USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
TopazOff we go!#1345228/1/05; 01:43:59

It's hard NOT to be keen on PoG's short-term potential here, getting a good leg-up on FND for Aug.
Then there's clearly a gap in Physical Supply due to reticence of Euro-zone WAG members to pony up the Metal.

The Physical Market looks short (est) 100T through Aug/Sept so any "political funny business" has the ability to exponentially affect PoG.

TownCrierMr Duisenberg had a reputation for straight talking ... spoke perfect english ... famed for his good humoured sarcasm#1345238/1/05; 02:51:15,1265,-1540280,00.html

August 1, The Guardian -- Mr Duisenberg, aged 70 and a former Dutch finance minister, was the first head of the ECB, between 1998 and 2003. He oversaw the introduction of the euro across 12 countries in 2002. Last night the French prime minister, Dominique de Villepin, expressed his sadness, saying Mr Duisenberg had "played an essential role in the introduction of the single currency and in the stability of the euro, which remains the driving element of the construction of Europe".

...he saw his country through two international petrol crises, which changed his approach from one described as Keynesian -- supporting growth by public spending -- to a policy of financial rigour...

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

Key point for those who hadn't grasped the subtle significance: the ECB and euro was launched under leadership of a first president who was NOT a "helicopter" Keynesian, successfully leaving the fledgling (and much maligned) euro as strong (vis à vis the dollar) at his departure as it was upon his inauguration.

On a personal note, I remember remarking when the presidency baton was passed on to Trichet that I would miss Duisenberg's sense of humor at the monthly Governing Council press conferences. Condolences to his friends and family.


TownCrierRussia: $10,000 From Huge Oil Revenues To Every Newborn#1345248/1/05; 03:29:17

(Neftegaz) -- Russian parliament official Sergei Mironov proposed that instead of accumulating vast sums in the Stabilization Fund and investing the money abroad, the government should award $10,000 of oil revenues to every newborn Russian.

He stated, the growth the oil exports revenues and a huge Stabilization Fund would allow Russia to create the "fund of future generations".

The speaker of the Federation Council criticized the Russian government's plans to invest a part of the Fund's assets into low-risk securities. He said that in such a way Russia "credits strangers, the economy of foreign states".

^------(see url)----^

Can you see the drift... the shift in philosophy against a dollar( monetary reserve universe?

In the larger purview, on one hand we see national resources potentially being "taxed" as a source of funding for a sort of "social security" program, and a preference is here being exibited for local/domestic interest-bearing assets rather than international (i.e., dollar) bonds.

And without overstating the obvious, to the same degree that oil reserves can be seen to act as a source of national wealth, so too with reserves of gold. And not only can underground reserves be tapped (and "taxed") like oil reserves for present usage, the accumulation and appreciation in price/value of ABOVE-ground gold reserves (especially as anticipated under a MTM freegold paradigm) can serve the future needs of its owners as a supplement to the interest-bearing accounts from pumping "yesterday's" oil.


TownCrierThe Central Bank Gold Agreement: – running out of stock?#1345258/1/05; 03:45:45

01 August -- We have heard of more reports of gold sales under this agreement to the amount of around 20 tonnes, seemingly from Spain. This leaves around 33 tonnes left to go from this year's allotment, over the next two months.

...We are informed that the B.I.S. has sold 20 tonnes and the Philippines 25 tonnes, in June, but these sellers are not party to the agreement. Is this gold price management? It would appear so particularly if they are acting in concert with the C.B.G.A. signatories, then de facto evidence is present of gold price management.

...Why isn't India as globally overwhelming as China?
It is abundantly clear the when the markets look at China the separate the economy from the Political side. We do not believe that this allows an accurate picture of the economy to be painted, as we brought out in our last issue. Bluntly expressed, the Chinese economy is driven and tightly controlled by the Chinese Communist Government. They want a high level of growth and will get it. They have made it clear they would like to see an investment diversification from bank deposits to a portfolio that includes gold.

Whilst slow about bringing this about to date, we do expect to see that happen over time, in line with the development of a distribution system that permits easy access to physical gold across China.

...There is a major difference between Indians and Chinese. It is why I believe the Indian gold market to be the most mature in the world. You think for yourselves, you are family orientated and refuse to accept the yoke of government or banking. This makes your people individually valuable. The Chinese bow to the State, even to the extent of limiting their offspring to one child, so they can get State support for the child. They will obey, as a nation, even the most outrageous of orders from the Central Government. They will stay silent and inactive in the face of unacceptable government policies and atrocities against themselves. They have a culture similar to ants in an anthill, subject to a central authority on which they allow themselves to depend. Indians walk their own road and accept government only where they approve of it.

But both countries believe that gold is real money!

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

It's real, alright, but to call it "money" is to sell it short. Literally. Should be calling it a real 'wealth reserve' instead.


SundeckUS dollar overvalued according to the IMF#1345268/1/05; 04:20:12


Aug. 1 (Bloomberg) -- The dollar fell against the euro for a third day and dropped versus the yen in Europe after the International Monetary Fund said the U.S. currency is significantly overvalued.

The level of the dollar ``remains above that necessary'' to narrow the country's current-account deficit, the IMF said in its latest annual report on the U.S. economy...

Sundeck: I suppose that China's recent miniscule revaluation with the new emphasis on a basket of currencies could be interpreted as China saying something like:

"Ok...we have done our bit to help solve your trade and budget problems. That is all we are going to do for quite a while. Now you go and address your own problems yourselves and stop griping at us!"

No mention of gold being included in the basket, but I just wonder...


TownCrierOil rises above $61 as Saudi king diess, Gold Up in Europe#1345278/1/05; 06:10:29

August 1, 2005 (Reuters) -- Oil prices climbed above $61 a barrel on Monday after the death of Saudi Arabia's King Fahd, but expectations that the new king would keep oil policy unchanged stemmed the rise.

U.S. light, sweet crude (CLc1) was up 52 cents at $61.09 a barrel...

King Fahd died in hospital on Monday and will be succeeded by Crown Prince Abdullah, his half-brother who has been the de-facto ruler of Saudi Arabia since Fahd suffered a stroke in 1995.

Abdullah is expected to adhere to Saudi Arabia's long-standing oil policy aimed at ensuring global markets are well supplied, a Saudi source said on Monday.

..."It's not going to have a great deal of effect because Crown Prince Abdullah has been effectively running the country for several years," said Geoff Pyne, Energy Consultant to Standard Bank.

"It could have a psychological effect on markets. Anything which adds uncertainty to the market could be construed as bullish in the short-term."

Before the news of Fahd's death, prices had risen on Monday after a spate of refinery problems in the United States...

Geopolitical tensions in the Middle East also threatened to rise after Iran said on Sunday it would resume sensitive nuclear activities at once...

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

Headline mentions gold although the article itself says not a word of it.


TownCrierKing Fahd leaves behind growing economy#1345288/1/05; 06:35:08

RIYADH - Saudi Arabia's King Fahd bin Abdul Aziz, who died Monday, leaves behind an economy experiencing its biggest growth in two decades thanks to a spectacular surge in oil prices.

But while the economy of the world's oil powerhouse is set on a path of privatization and opening up to foreign investment, it faces long-term structural problems partly attributable to the nature of Saudi society.

...Saudi Arabia produces about 9.5 million barrels per day with the capacity for an additional 1.5 million barrels.

Its structural problems include a dependence on foreign labor, the difficulty of integrating youth in the workforce and the fact that women, who make up half the Saudi population of working age, are confined to a limited number of professions or stay at home due to ultra-conservative traditions.

Saudi Arabia, which sits on a quarter of global crude reserves, enjoyed a first golden age in the 1970s on the back of a sharp rise in prices following the Arab oil embargo during the 1973 Arab-Israeli war.

But its reliance on oil rendered its economy susceptible to volatility in prices and fluctuation in demand.

This became obvious to King Fahd soon after he ascended the throne in 1982. Prices dipped and Saudi oil production slid to around two million barrels per day (bpd) in 1985 from 10 million bpd in 1981, forcing Fahd to slash government subsidies...

Unemployment was aggravated during much of Fahd's reign by a growth rate which lagged behind a steady annual population growth of over three percent.

This changed in the past two years, thanks to soaring oil prices, which generated a real growth rate of 5.3 percent in 2004.

The Saudi economy in 2003 and 2004 enjoyed a windfall of the unexpected surge in world crude prices that filled the coffers of its treasury. It posted a budget surplus of 9.6 billion dollars in 2003 and, with crude prices topping 50 dollars a barrel, reaped a surplus of more than 26 billion dollars last year.

The government plans to spend 10.9 billion dollars of the windfall on development projects while most of the rest will go to repaying part of the public debt of 176 billion dollars.

But much as increased oil revenues are welcome, the kingdom has realized the need to diversify. Oil receipts still represent around three quarters of budget revenues, 45 percent of GDP and 90 percent of export earnings....

The latter years of Fahd's rule, during which the country was effectively run by his successor Crown Prince Abdullah bin Abdul Aziz, were marked by the start of privatization....

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

Underground oil reserves provide a sort of "social security" program of wealth for the future of the nation, with current pumping rates providing transactional wealth to be used for both current economic needs and to contribute toward some form of above-ground financial-esque savings.

That is to say, if pumping occurs at such a high rate that the underground form of "savings" (oil) is being depleted at a greater-than-necessary rate (the volume/price needed to balance current national trade), you can be sure that a counterveiling inflow of gold from trading partners would provide the perfect compensation to mitigate the long-term effect of such 'accommodative' oil depletion.

But that's ANOTHER story, more or less...


TownCrierChina to hold forum on development of non-public ownership economy#1345298/1/05; 06:52:21

August 01, 2005 (Xinhua) -- China will convene a forum on the development of a non-public ownership economy in Hefei, capital of east China's Anhui Province, from Oct. 11-12.

...The forum will have a theme of the "new environment for non-public economic development". And participants will discuss and exchange views on six topics, including the "the State Council's 36-item circular regarding encouraging, supporting and giving guidance to the development of an economy of non-public ownership," ... and the "role of the economy of non-public ownership in the construction of a harmonious society"...

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

Because it exists as an intangible agreement, there is no ownership of an IOU -- and thus there is effectively no real 'ownership' of reserves or savings when in the form of bonds. Reserves or savings in physical gold metal, however, is perfectly compatible with a new emphasis on ownership.


USAGOLD - Centennial Precious Metals, Inc.USAGOLD Market Update for August 1, 2005#1345308/1/05; 10:24:09

Feature Articles: The Chinese revaluation


Short & Sweet...

Back in early July when gold had dipped below the $420 mark, we advised that the best time of the year to buy gold is in the heart of the summer doldrums when everything is quiet. Since then gold has rallied past $430. We still think the summer is a premier time to buy gold given its best performance over the past few has come in the period August through December......

Though the Chinese have decided not to revalue the yuan in any meaningful way, it would be instructive to keep a wary eye on the other half of the yuan equation -- the restructuring of its national currency reserves. The Chinese now hold 65% of their reserves in dollars.......


Notable & Quotable

also, archives and useful links, including the August Buyers' Group

click hyperlink

USAGOLD / Centennial Precious Metals, Inc.Rare Beauties!#1345318/1/05; 10:45:31

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USAGOLD Daily Market ReportPage Update!#1345328/1/05; 13:53:54">
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Monday Market Excerpts

August 1 (from MarketWatch) -- Gold futures closed higher for a fourth-straight session Monday, closing at its highest level since the end of June as further weakness in the U.S. dollar continued to spur investment interest in the yellow metal, which is often seen as a hedge against losses.

"Gold has made three higher lows ($410 in February, $415 in May and $420 in July) and has built a solid foundation now to test the old highs around $454," said Peter Grandich, editor of the Grandich Letter.

At the same time "the U.S. dollar is topping out and a close below 87 on the U.S. dollar index would signal its reversal is complete," he said.

In the latest dealings, the dollar fell against its chief rivals as currency traders questioned whether strong domestic economic data would be enough to fuel a flagging dollar rally in light of signs of revitalization outside the U.S.

Against this backdrop, COMEX December gold futures closed at $437.70, up $1.90 for the session. The contract closed more than 1% higher last week after climbing over the past three sessions.

"Gold is going to do well no matter what the dollar does, but the unpegging of the dollar by the Chinese, in my mind, has started the beginning of the end for dollar pegging and supporting throughout Asia," said Grandich.

(from DowJones) -- Bill O'Neill, principal, LOGIC Advisors, said when gold bypassed its 200-day moving average last week, it was a "good start" on its way to testing new highs around the $454 area.

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

SundeckSaudi Arabia - King Abdullah#1345338/1/05; 15:44:55

Apparently, the late King Fahd was around 84 years old, King Abdullah is 82 and his crown prince is 81. After that I don't know where the lineage goes.

What it indicates is that there will be continued succession-related uncertainty, on top of all the other uncertainties (sabbotage, state of Saudi fields, Iraq issue unresolved, level of world demand, etc), in the stability of oil supplies from the largest exporter...

Hard to see oil dropping too much in price...easy to see oil rising a lot in price...


GoldiloxSaudi Accession#1345348/1/05; 15:59:14

@ Sundeck.

I was discussing that with a colleague today. Whose sons are next in line - the late King, the current King, or the next King? Power plays seem more likely as the tree expands.

I think the short term stability holds more hope than the longer term.

DemosthenesA Tale of Two Gold Investors#1345358/1/05; 18:11:31

Some time ago I was discussing the state of the national economy with a co-worker of mine. We both had come to the same conclusions about the state of debt in the country, about the Fed, about the stock market, and about bonds. He told me about how he was explaining the power of compound interest to his son and about how his son (in middle school) then realized that there really was no point in saving at today's rates since counpound interest on practically nothing still amounts to practically nothing. We agreed that there really was no way to teach children not to spend, spend, spend. And we agreed that most likely the powers-that-be wanted it that way. And we agreed that there really was nothing that people who had money could invest in, since everything was overpriced.

In the ensuing months, we both changed our mind in on that last one, albeit in slightly different ways. We both discovered gold.

Several months later, I was taking a walk around the parking lot when I ran into this co-worker. He had been so intrigued by our conversation that in his spare time he began a more in depth study of economics, specifically inflation. This naturally led him to gold.

I took a similar path. In the evenings I would type lame queries like "Investing Ideas" into google. Eventually through some random luck I ran into a site about gold investing and after awhile I ended up here. The thought of being able to hold real gold in my hands was very appealing. I was smitten.

My co-worker had not had such a feeling. His investment is in gold futures of some sorts. I don't claim to understand exactly how it works, but it is highly leveraged. He said something about buying 30 ounces but getting the price movements of 75. He'd only lose everything if gold went down to 350, which we both agreed was unlikely.

This got me thinking a lot about how different types of gold investors view the price of gold. If gold went down to 350, I'd be estatic. It would be time to sell the rest of my stocks and plow it into gold. At 350, he'd lose his shirt. If gold goes up to 1000, he'd be happy since he just made a lot of money. I'd be a little sad since the small amount out of my monthly earnings that I devote to gold now buys me less coins. I hope to be able to pass these coins down to my children. He wants to make enough to pay off the house.

Two gold investors... Each came to the investment the same way... one wants the price to go up,up,up... the other wants it to stay flat or go down

MKDemosthenes#1345368/1/05; 18:59:00

Excellent post. It sounds like you are one of us. . .in your heart. MK
R PowellDemosthenes#1345378/1/05; 19:19:24

Do either you or your friend entertain any interest in "the other" precious metal...silver? I do not find it strange that a study of compound interest, economics or inflation has lead you here. I find it strange that so many never give these a second thought...other than how to get more disposable money.
Now you desire gold in hand and your friend holds "leveraged" positions. Nothing unusual here either. Opportunity presents herself in different forms to different eyes. Some people possess the physical and some invest in leveraged games. Some are involved with both. Hopefully your friend will fare well with his very volatile + dangerous investments. Derivatives are sometimes somewhat complicated and often unkind to the uninitiated.
Good day for metals today, at least for the bulls...(new highs for copper again)....silver lease rates were also up more than usual today. Does this portent something or no? Is this unusual during the summer doldrums?? I find it strange that the lease rates state that the rate applies to "bank to bank" loans. I didn't think banks loaned silver between or among themselves. I wonder if they even loan gold between themselves too? So much wondering, so few known facts.

mikalPressure cooker just under the surface#1345388/1/05; 21:48:57

Texas Hold 'Em or
Know When to Fold Them? by Rob Kirby - July 29, 2005 - Snippit:
"It is often said that America's pass time is the grand ole game of baseball. After listening to Financial Sense's Jim Puplava [July 23/05] interview Mr. John Williams of Shadow Government Statistics fame, I wonder if baseball, as a pastime, has perhaps not been replaced with fudging numbers. For more than 20 years, Williams has been making a living providing clients [the list includes individuals as well as Fortune 500 companies] with forecasts and analyses of official U.S. economic reports. Williams claims that most widely watched and reported economic numbers are extremely misleading the way they are currently reported due to biases built into their calculation. He claims that these biases have increased over time and tend to understate inflation and overstate economic growth. In the interview, Williams outlines the history of the 'corruption' of these economic reports and explicitly outlines just how far we've come in short time by revealing the differences between today's current method of reporting to what the same selected numbers would have been prior to the Clinton Administration [Bush 41]. Highlights of the interview included the following revelations:
CPI which was recently reported at an annual rate of approx. 2.5% would equate to a minimum of 6% or more in pre-Clinton methodology. The unemployment rate which was recently reported at a heralded 5% rate would be more in the line of 12% on the same basis. Gross Domestic Product [GDP] which was recently reported in the 3.5 - 4% range annually would be closer to 0% [zero] using pre Clinton measures. Budget deficit numbers being reported by the U.S. government would be increased by a magnitude of 10 fold if business accounting standards were adhered to. Williams suggests this 'crooked number keeping' is likely to result in a hyperinflationary depression somewhere down the road.
Williams points out that these economic reports were initially devised as a means to protect people – like the CPI was initially tabulated post WWII to act as escalator clauses in auto union contracts. He goes on to outline how each successive administration has co-opted the methodology used to tabulate different economic series. He goes on to point out that one of the very biggest reformers to the methodology used in reporting inflation numbers was/is none other than Sir Alan Greenspan who rewrote the book on measuring consumer price inflation. [RK emphasis]
Williams reveals that Greenspan along with Boskin allegedly made no bones about admitting that the alterations to the CPI tabulation methodology were consciously done to decrease the government's financial obligations [payments] to Social Security which contains clauses/escalators tied to the cost of living [CPI]. The upshot of the changes in CPI reporting as it relates to Social Security, according to Williams, is checks that currently get mailed to Social Security recipients are roughly one third less than what they would otherwise have been.
Williams goes on to explain how the official keeper of inflation statistics, the Bureau of Labor Statistics [BLS] has gasoline prices currently up 6.9% per cent year over year while the government's own Energy Information Agency currently shows gasoline prices up about 40% year over year.
Williams points out that pundits like to cite the core inflation stats - less the volatile elements of food and energy. He goes on to say that 'core' inflation was only conceptualized as a means of looking at components other than food and energy periodically to see how elements outside the food and energy complex were behaving in isolation, but NEVER intended to supplant the more important headline rate as is customarily practiced now on Wall Street and in the main stream media.
The list of tricks that are employed to alter inflation reporting numbers alone include the following..."

PRITCHORe "Texas Hold 'Em or Know When to Fold Them?"#1345398/1/05; 23:12:21

This really is another "Must Read" --However see the posted link to view at a site without joining.The author also wrote Todays Market Wrapup "FREE TRADE: AT WHAT COST?"
Sundeck@mikal, PRITCHO et al. - Statistics and the modern state#1345408/1/05; 23:38:09

Real 1984 George Orwellian stuff, isn't matter what the reality, the people are made to feel that things are always getting better through new-speak and mind-bend...and don't forget the great victories of the army in the foreign land...

I feel sure it is better than the Soviet Union of the 30s, 40s and 50s, with their show-trials and all, but there IS a faint similarity...perhaps just the way "states" manipulate "individuals", no matter what their political hue...


SundeckChina wind energy - tid bit#1345418/1/05; 23:53:21

By 2020 China intends to generate 10% of its energy needs from renewable sources, of which wind-energy is one. They expect wind-turbine energy to grow at rates of 50-75% annually to 2020!

The Chinese have a romantic nack for choosing names...their largest wind-turbine producer is called "Goldwind Science and Technology Co."

Gold...Wind = wealth from wind. Not bad eh? Could have chosen, for contrast "Dollar-Erg", or "Paper-Giant", or perhaps "Rotating-Debt"


GoldiloxCongress Fiddles whiie Washington Burns#1345428/2/05; 00:48:10

Watching the CSPAN congressional hearings on steroids in baseball.

Congressman Issa from California asked, "If a player uses illegal equipment, or enhancement drugs, is it not cheating, and ruining the level playing field"?"

I would ask Mr. Issa, if the voting machines are all owned by Republicans, programmed by Republicans, and unavailable to outside computer experts for validation (proprietary?), "is it not cheating and ruining the level playing field for non-Republican candidates?" What message does that send to our youth?

While they denigrate an athlete for using drugs that may enhance growth and definitely improve injury healing (the increased injury rate is starting to show across the league), they continue to allow the very same drugs to be added by farmers to our food supply to "enhance profits". Is this leveling the playing field for the thousands of children suffering from premature puberty and thyroid illnesses? How many false positives (like Palmeiro) might be caused by excessive consumption of Jumbo Jacks or other steroid containing foods?

How can a CONgress whose "blind trusts" beat Wall Street's best fund managers 100% of the time and formulates extravagant retirement benefits for members while passively watching non-congressional retirements being stolen call anyone else cheats with a collective straight face?

How can a CONgress who passes NAFTA and CAFTA while the government issues boldface lies about US unemployment numbers call anyone else "cheats" with a collective staight face?

All this emotive "investigation" continues while hundreds of thousands of Iraqi civilians are cluster-bombed to ferret out a renegade a CIA-controlled puppet who is already in custody, and thousands of US troops are being irradiated by depleted uranium shell dust by the cozy, pampered Pentagon officials in complete denial of its effects.

I sure am glad CONgress, who passes the Patriot Acts without a readable draft in hand, is getting so tough on Selig for not having read a draft of the Drug Policy prior to union contract negotiations.

Where is Congressional intervention in all the ripoffs of the financial world? The ENRON billions are still offshore supporting the RNC and ESF "slush funds", and the manipulated "free" markets continue to be ignored.

They hide their heads like ostriches from any REAL issues! As they like to say in baseball, they are MEAT!

TopazLong Bond.#1345438/2/05; 02:17:31

The Long Bond took a peek underwater yesterday and black boxes the world over had a little convulsion.
Been a while since we've had 114 on the LB and it'll be interesting to watch what happens here as it recovers from the shock.

makcumkaRe: Texas Hold 'Em or Know When to Fold Them?#1345448/2/05; 08:54:22

@ mikal / PRITCHO Very interesting article, thank you for linking it. It brings up a lot of interesting points and outlines a "method to the madness", perhaps?

For the longest time I personally was absolutely sure that the only way we were going to end up would be deflation and depression. Just like the thirties. Recently, about a year ago or so, it all changed for me. Can't really put my finger on what exactly was the catalyst, maybe it was the "free money for all" attitude that can be seen from the banks, auto manufacturers, furniture retailers, buy now - pay later newspaper ads, higher prices in grocery stores and gas stations, $15 haircuts in "value brand" barber shops, $7 ice cream cones - a combination of things. Suddenly the concept of deflation did not appear all that plausible, at least in the near future, say, 5 to 10 years from now. And the article did reinforce this point of view.

I have been holding off on buying anything on credit for a long time. Been debt-free since late nineties, rented homes instead of buying them, missing a boat on the recent run-up in real estate prices, although, without owning property it still made a lot more sense to rent (in Florida, at least), in disposable income terms, even when figuring out potential tax breaks associated with financing a home purchse. Been buying yellow and white metals, saving money - the contrarian approach, I guess. I still strongly believe that one day the situation will unwind, and precious metals will at least result in nice appreciation in comaprison to today's prices, if not taking the stage of the "reserve currency". Only now I think that this "one day" is further along the way then what it seemed.

I would not call myself a "true" goldbug, as my main purpose of precious metal ownership is profit measured in whatever terms - percentage gains over time, relative value to other hard assets, for example, real estate, inflation hedge - whatever. I do not believe that, in this day and age, with global marketplace, the world will revert back to accepting precious metals as the ONLY store of value and the ONLY reserve currency. If dollar falls apart, it will be replaced by another existing currency, most likely backed to some degree by gold and silver, but not by pure metal. After all, it will be impossible to go to the store and plop down a silver or gold coin to buy food. Think about it, if gold and silver are the ONLY acceptable currency, there is not enough to go around the world to support trade. Period. If gold goes to $850, and silver reverts to its historical ration of 16:1, an ounce of silver will be at $53. It will be a huge cost to coin small-denomination coinage to support trade at a lower level, for example, buying a $2 loaf of bread. So, without having a, say, tri-metal system, selecting nickel or something else as a means of providing change for silver, a precious metal-based currency will be difficult to obtain.

Paper money is here to stay, in my opinion. We might see a substitution of the dollar with euro, "new dollar" or some other paper currency backed by the precious metals. Hence, the idea of buying gold and silver because one day that will be all that is left does not appeal to me. What does appeal to me is that gold and silver have been, are, and will go up in relative terms and can be held, preferably in physical form, for profit. Please do not shoot me for uttering the "p" word.

And this brings me to the question already discussed here previously. If we are faced with inflation for the foreseeable future, and, according to the popular belief, "they ain't making any more land", why can't this work: Buy a house, watch it go in value, extract equity, buy precious metals with it, repeat cycle once or twice, either sell the house or wait for the system to hyperinflate and pay it off with way cheaper dollars. Even if you don't repeat the cycle and do it just once - what is the harm of getting into debt if money is getting cheaper?

Clink!@ Goldilocks RE 134542#1345458/2/05; 08:59:00

While I may agree with much of what you said, I have to protest at the continuation of the unfounded defamation of the ostrich. Far from sticking its head in the ground when danger threatens, it lifts it high as it avoids conflict by running away at speeds exceeding 40 mph - far faster than anything big enough to bring it down. If cornered, it again does not cower, it proceeds to try to kick the living c**p out of its aggressor. But I'm sure you knew all that.

@Sundeck. LOL! And if it had backing from politicians, we could add the Perpetual Hot Air Generator as well !

Moving on ......

I have notice two things in the past couple of months that make me think back to the late '90s.

The first is a tale of two parties I attended recently. At the first, in May, there was much talk about buying real estate for investment. One gentleman had been successfully renting out his properties for years and was continuing to accumulate slowly. He was a little concerned that the property he had just bought in conjunction with his daughter's going to college was too much to pay in a very tight market, but not overly so, as she had to lodge somewhere. Another guy was talking about the couple of apartments he had bought on paper and sold for a $10k profit as soon as they were finished. He was looking for more, but avowed that it was difficult because there was so much competition. Fast forward to last weekend, where I came across a group of half-a-dozen guys beside the pool listening to someone reading an email he had just received which cited the latest RE stats which have been mentioned with concern several times at the Forum. The concensus was that Bad Things were on the horizon. Quite a change in attitude.

The other thing I have noticed is that the gloom and doom over RE has moved out into the mainstream press. In my Sunday newspaper, there was a whole page article devoted to the different types of mortage available and their pitfalls , particularly in a cooling market with rising interest rates. In the same Money section there were two other regular columns cautioning people about RE investing.

So I have a question. Can anyone remember how soon before March 2000 the same kind of articles came out about, say, Internet stocks ? Was it '98 ? I'm just speculating as to how long the feeding frenzy can continue past the time when common sense says 'Stop !'


GoldiloxOstriches and politicians#1345468/2/05; 09:53:35

@ Sir Clink,

My apolologies to the ostrich. CONgress is a label with whom few would prefer to be compared.

And unlike the ostrich, CONgress only kicks its constituents - rarely the true transgressor.

I especially liked the many who said "one strike you're out" should be applied to all sports professionals who abuse substances.

How many politicians have we continued to re-elect in BOTH parties with histories of substance abuse. And especially with the Kennedies and Bushes, we continually see that the Apple falls not far from the tree, as generation after generation fall to the same predisposition.

Someone needs to remind them that pointing a finger elsewhere leaves three pointing right back to the source.

GoldiloxIraq Oil Output#1345478/2/05; 10:09:52


Truth and consequences in Iraq, which we note increased oil exports to 1.6 million barrels a day last month. B ut the same report says Iraq imported 3.25 million gallons a day to meet internal demand. So now let's run through the math, shall we? 3.25 million gallons a day is 77,380 barrels a day of imports, so the net export level was 1.522 million barrels per day. According to the US Energy Information Administration, Iraq was producing exports of 2.58 million barrels per day prior to the Bush War, which means the country is producing 59% of what it was producing before we started bombing.

-George is not the first to notice that reduced Iraqi output has a lot to do with the skewered supply and demand curve.

Well, if your fortune is in oil, as certain leaders might attest, the axiom is true. If you want more income, higher output is good, but higher prices are even better!

Perhaps the best Orwellian concept we have seen lately is that "external control" of the Middle East oil patch will lead to lower prices.

GoldiloxSinclair's Comments#1345488/2/05; 10:24:28


Jim Sinclair's Commentary:

The Avian Flu is both an economic killer as well as a taker of human life. We pray it never happens but as you know it is already in North America apparently under a total media blackout. To cut to the chase business will simply come to a screeching halt should a pandemic take hold. That means deflation in its most definitive terms: debt default. The largest economy in the world will be the hardest hit by simple logic. Currency market will be in total disarray. Only computer markets will remain in motion and then only for a brief period. Paper assets will have notional value only. It will be your worst nightmare and still few even think about it. Here's something from Stanford University on the 1918 flu pandemic:

The Public Health Response

The responses of the Public Health Departments in Europe and in the United States represented the ideas prevalent in society and in the scientific community. While most of the measures were solidly grounded in the current scientific concepts, they could also be traced back to Medieval and even Classical times of plague and pestilence. The idea of contagion prompting quarantines and isolation dates back to the Justinian Plague. However, epidemiological work by Snow and others in the 19th century did further these notions of contagion and understanding of transmission. Public Health Departments grew out of these advances and the belief in the ability of man to control nature. Sanitation, vaccination programs and other public hygiene efforts in the late 19th century enabled public health officials to gain power and authority. However, the Influenza Pandemic of 1918-19 challenged the public health agencies. The massive morbidities from the common illness of influenza were mysterious and frightening. Many of the measures formerly known to work were ineffective. They were not prepared for an event of this magnitude, lacking the organization and infrastructure and constrained by the war. Yet, the great war provided the rhetoric of nationalism necessary to usher in these authoritative responses and losses of liberty.

Authoritative Measures

The public health authorities in both the United States and Europe took up fundamental measures to control epidemics that dated back to Medieval times of the Bubonic Plague. They aimed to reduce the transmission of the pathogen by preventing contact. They framed their public health orders in scientific ideas of their understanding of how the influenza microbe spread through the air by coughing and sneezing, and their conception of the pathogenesis of influenza. Since they concluded that the pathogen was transmitted through the air, efforts to control contagion were organized to prevent those infected from sharing the same air as the uninfected. Public gatherings and the coming together of people in close quarters was seen as a potential agency for the transmission of the disease. The public health authorities believed that good ventilation and fresh air were "the best of all general measures for prevention, and this implies the avoidance of crowded meetings," (BMJ, 10/19/1918). This translated into the controversial and imperative measure of closing of many public institutions and banning of public gatherings during the time of an epidemic.


Banning public meetings is one way to bring down the demand for fuel, not mention those pesky grass roots political movements.

It's interesting to see a pure "inflationist" like JS outline a scenario for deflation.

KnallgoldGoldilox#1345498/2/05; 10:56:39

We're close to where taking colloidal Silver is being libeled as substance abuse'same goes for vitamins etc.So be careful with the term substance abuse.We are signing actually an initiative for a public vote in Suisse as the same UN laws are also being forced on us (and tried to being passed covertly!).Colloidal Silver certainly falls into the vitamin/mineral/herb category.

NWO being forced on us now,$Bill might have a point here.Interfering in such a way with ones most personal property,body/health,is pure fascism in my view.

What I recently got (see also link):
"By Dr. Carolyn Dean

June 19, 2005

The U.S. Delegation to Codex has just issued a formal written statement to the Codex Alimentarius Commission that the United States, during the July 4-9, 2005, meeting in Rome, will support compulsory rules created by this international organization directly overruling U.S. law regarding access to vitamins..."

TownCrierS.African gold miners to launch strike on Sunday#1345508/2/05; 11:09:04

JOHANNESBURG, Aug 2 (Reuters) - South Africa geared up for
more labour unrest on Tuesday as restive gold miners said they
would launch the first country-wide strike in this key sector in
18 years on Sunday.

A strike in the world's biggest gold producing nation would
follow a wave of work stoppages in recent weeks by city workers,
grocery clerks and airline employees.

Frustration among miners who say they are not sharing in a
booming economy would paralyse the South African mines of some
of the world's top gold producers...

...unions had rejected its latest offer of a 4.5-5.0 percent wage
rise plus bonus payments...

"We are disappointed that deadlock has been reached in wage
talks. Exaggerated wage demands put both jobs and ounces of gold
in jeopardy. The industry can afford neither," the employers'
chief negotiator Frans Barker said in a statement released late
on Monday.

Unions are demanding a 12 percent increase.

A strike would lead to the loss of around 28,000 ounces of
gold production per day...

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

Bottom line: To diversify a golden diversification of your portfolio, choose the metal to acheive true diversification, otherwise you haven't really diversified your exposure to various corporate issues and social risks.


GoldiloxCodex#1345518/2/05; 11:35:17

@ Knallgold,

Even more interesting that the Codex "acceptance" is being pushed through totally as riders to other legislation. No one would support this as transparent legislation.

I watched a CA Dept of Corrections budget panel meeting of the legislature yesterday on public access TV. The concentration camps are growing exponentially, and they can't keep up with the demand for new officers.

Use a vitamin, go to prison! And of course, wasting a strategic resource like silver for "questionable" health products will probably be considered extremely egregious.

Minimum wage is effectively reduced to $0.10 per hour for corporations utilizing this growing labor asset, with the pubic treasuries masking the costs of administration. Shades of IG Farben.

TownCrierFACTBOX - World forex reserves and U.S. deficits#1345528/2/05; 11:47:30

WASHINGTON, Aug 2 (Reuters) - China's decision to shift its yuan from a fixed dollar exchange rate to a multi-currency target in July has intensified speculation over how much longer Asia's central banks will continue to build dollar reserves.

China aside, the growth of foreign currency reserves slowed sharply during the second quarter...

Following are some facts on official dollar holdings worldwide...

^---(see url for overview)----^

Topaz@macumka.#1345538/2/05; 14:07:27

Long time no see, trust you're well said: -

And this brings me to the question already discussed here previously. If we are faced with inflation for the foreseeable future, and, according to the popular belief, "they ain't making any more land", why can't this work: Buy a house, watch it go in value, extract equity, buy precious metals with it, repeat cycle once or twice, either sell the house or wait for the system to hyperinflate and pay it off with way cheaper dollars. Even if you don't repeat the cycle and do it just once - what is the harm of getting into debt if money is getting cheaper?

The thing to bear in mind imo is that the "flations" debate is not a Yin-Yang issue.
ALL the incentives (Zero interest car loans, Low start-up housing finance, tax cuts amid twin defecit spending etc) are truly an indication that the System is potentially on the brink.
Whilst Bernanke's Helicopters sit lifeless on their pads, the "Stealth Choppers" are spewing out debt like no-bodies business ward off the deflation.

We can't, under these conditions, expect a Deflation to slowly creep up on us Sir, it will be more of an "event" determined by the Market as she discounts "future" earning potential for "present" reality. (Bird in Hand logic)

Under such a scenario, your Gold and Silver will (eventually) know no equal this "event" matures and ripens.

All IMHO of course.

Federal_ReservesHow much longer can we spend more than we make?#1345548/2/05; 14:37:16

As a nation we are in the hole on the deficit and trade.

As individuals our savings rate is zero. Most folks don't have any savings except the equity in the home, and they continue to borrow on it to make ends meet. Wage growth is paltry, and I bet this month the jobs report will be horrible what with all the recent layoffs announced.

If home prices tumble the economy is going to collapse. Most job growth here in the USA is based on the mortgage and housing industries.

Last month, for the first time in many, median home prices fell, both month over month, and year over year.

Tick Tock Tick Tock....

USAGOLD Daily Market ReportPage Update!#1345558/2/05; 14:49:28">
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

August 2 (from MarketWatch) -- Gold futures closed unchanged Tuesday, taking a breather from a four-session winning streak that's lifted prices by almost 2%.

"The gold looks very good for a move through the multi-years highs," said John Stafford, editor of Stafford's Investment Strategy Letter.

COMEX December gold contracts closed at $437.70, unchanged from the previous session. Prices have climbed over $8 an ounce since July 26. They stand at their highest level since June 30.

Futures prices reached their highest prices since the late 1980s when they traded near $450 in June of this year and December of 2004.

Gold is benefiting from "tremendous demand, especially in Asia," and gold miners in South Africa, the world's biggest gold producer, are "threatening the first country-wide strike in 18 years," said commodities trader Kevin Kerr.

For now, "any close above $451 basis December gold could set off a buying frenzy as this would signal a breakout from the recent consolidation in gold," said Dale Doelling, chief market technician at Trends In Commodities.

Gold has been trading inversely with the U.S. dollar.

"Fed monetary policy is wildly 'accomodative', as has been true since 1991," Stafford said.

"Therefore, the dollar continues to be devalued deliberately by both the Fed/big bankers and Federal government policies of paying off our debts and social welfare 'mandated' obligations in cheapened dollars."

And a weaker dollar often spurs purchases in the gold market.

"Soon the gold will clear the old highs above $450, and then run to $500 to year's end -- taking most gold stocks with it," he said.

Topaz...whatsmore mak,#1345568/2/05; 14:54:53

...(please excuse the missing "k" in previous post)

Is it THAT bigger stretch of the imagination, given modern technology, to envision a system whereby you front up to the Checkout and tender either your E-Gold card, OR Coin embedded with (say) 1 milligram of Silver (duly scanned) for your Loaf of Bread?

GoldiloxAuto Incentives#1345578/2/05; 15:18:22

@ Topaz,

Lexus is satirizing their own incentives with a new commercial. In it, they show kids whacking away at a Pinata, while the Dad sees visions of Lexus car keys falling from the busted paper mache.

Gifts raining down from the FED?

R PowellBuy a Chevy + get gold#1345588/2/05; 15:27:32

I guess rebates and incentives are suited to fit the culture. In India, Chevy is advertizing a rebate of $690 worth of gold jewelry with the purchase of a certain sedan. Now if Dodge would offer enough silver coins with a truck purchase, I'd be tempted to upgrade the old work horse.

Although Westerners often think of jewelry as a luxury, it is the customary form of metal ownership in India. It is the form they choose as a storage of wealth.

Interesting article....Where is Black Blade???

DemosthenesA short Short Story Review: "Gold" by Isaac Asimov#1345598/2/05; 16:49:22

I kjust re-read a story that I read for the first time about a decade ago. This would be my first exposure to the fact that people could even own gold coins. It won the Hugo award for best Science Fiction Novella. I forget the year, but it was in the early 1990's.

Jonas Willard is the leading compu-drama director in the world. His rendition of "King Lear" is considered by all to be the best ever. He is not sure if he will ever find a project to top it, and has not accepted any work since then for fear it will taint his legacy. He is then approached by a little-known but well-thought of Science Fiction author, Gegory Laborian, who wants him to make a compu-drama of his book. He offers Willard a sum of money not even enough to produce a single scene of the compu-drama and is promptly rejected, but then sweetens the deal. He offers to pay him in gold:


"Money, when it was a matter of electronic exchange, meant nothing. There was no feeling of either wealth or poverty above a certain level. The world was a matter of plastic cards (each keyed to a nucleic acid pattern) and of slots, and all the world transferred, transferred, transferred.
Gold was different. It had a feel. Each piece had a weight. Piled together it had a gleaming beauty. It was wealth one could appreciate and experience. Willard had never seen a gold coin, let alone felt or hefted one. Two hundred of them!
He didn't need the money. He was not so sure he didn't need the gold."

In my opinion this is one of the best passages about gold in modern popular literature. Not that there is a whole lot anyway. Willard, tempted by the gold, accepts the proposal and delivers an amazing performance, bringing to life a stoic science fiction novel with a derth of description.

Whether or not Science Fiction interests you, I figured the above passage would.

CoBra(too)The last Vestiges on political "Legitimacy" -#1345608/2/05; 17:29:43

As "The Privateer" puts it so eloquently (ecerpt):

"They will go to and are going to any and all lengths to preserve this legitimacy.

In the face of this desperate clinging to political legitimacy, it is striking that Gold has held up as well as it has. As the quagmire in Iraq deepens and as more and more Americans, Britishers, and Aussies grow closer and closer to DEMANDING a fundamental change in government policy as the only legitimate way to deter terrorism, the desperation of the political establishment in all three nations will deepen. If there was any way that these establishments could have forced Gold down - preferably back down below the dangerous (to them) $US 400 level - they would have used it by now.

The problem, for the political establishments, is simple. The chasm between what is REALLY happening and what they want their subjects to (literally) believe is happening has become to big to bridge. The graver problem is that they are now realising it.

Gold, as it has done throughout the political attempt at mass public delusion which began with 9/11, continues to shine as a means of capital preservation. This is true everywhere, but nowhere more so than at the epicentre of the political machinations, the US and its Bush Administration. Slowly but surely, the grip is being lost. The only way to continue it now is to escalate and widen the military adventure, and Iran is the prime candidate.

The grave risk here is a public backlash of similar dimensions to what happened when the Nixon Administration widened the Vietnam war to Cambodia. Seeing no other way out, that Administration decided to take the risk. The rest is history.

So is the crumbling of markets which took place in the wake of that decision. An equivalent decision today, an escalation in to Iran, would inexorably breed similar consequences. A decision to pull back from such a brink would inexorably expose the lies which have been circulated to this point to the cold light of day.

Either way, the three casualties of war, truth, freedom, and true market valuations, are close to snapping back with a vengeance. To the extent they do, the one economic good whose valuation has been held DOWN more than all others - GOLD - will snap back and UP proportionally. It's been a quiet year, so far. Don't count on it lasting too much longer".

And also James Turk of Goldmoney chips in - that gold is breaking out against the Brit. Pound; A multiyear BO!

Meanwhile on the political front it seems that Iraqi
Shiite leaders are teaming up more and more with their Iranian brethren in spite of the "presense" of the (crumbling) "allied 'occupation' forces", or is it to spite the same?

Teheran seems to follow its nuclear program with renewed vigor, which in itself does not bode well for cornered rodents ... running out of means to pay their way for their forays into other peoples affairs. Usbeskistan, Kirgistan and potentially other Central Asian States are setting ultimati for clearing US bases on their sovereign territory.

The realm of attacking Iran in desperation is bound to lead to repercussions of a magnitude, which may become the prelude to Armageddon!

Guess, I'll get the flac - so what! I'm depressed enough by the present state of affairs - and can't see any other outcome than Marc Faber's web site title - the Doom and Gloom Report ... and maybe even worse ... like in Dante's Inferno - Voi centrate, ogni speranza la'chate!
... cb2 -
back from a few days of oblivion in our mountains.

DoubleEagleRe: Demosthenes and Sci-fi gold#1345618/2/05; 17:58:48

Never was much of an Asimov fan, but Robert A. Heinlein on the other hand, I'm a huge fan of. He mentions gold as real money in most of his books, including the memorable "Time Enough for Love" in which the multiple-thousands-of-years-old Lazarus Long goes back in time to his own childhood; Kansas City, Missouri circa the first World War. For various reasons he sets about making his fortune, and has it all converted to U.S. double eagles (easily done at any bank in those days!), which he sews into his vest for traveling purposes. It's a strange book, even for Heinlein, and it contains his particular brand of pervasive sexuality, but I found it hard to put down.

IMHO, Heinlein's best work, and a book that begs to be made into a movie by skilled hands, is "The Moon is a Harsh Mistress." TANSTAAFL!


mikalMicromanagement creep, by creeps#1345628/2/05; 20:46:30

Japan's Nikkei @11,987 (+47) so far so good for the globalist nobility. The world stock indices are at multi-year highs and reaching the desired state of deliciousness for their mouthwatering climax should any stray weapon of ugly destruction happen to just explode
in some unfortunate place.
Excuse me. I must unload the contents of my stomach.

SundeckDepressed CoBra(too)?#1345638/2/05; 20:48:46

"get the flac", CB2?

Well, you need not fear being Austri-cised.

As for Iran,
If the Shiite hits the fan,
We can be sure that our eggs will be in the pan...
Either scrambled or Sunni-side-up.

I notice Donald is feverishly Yanking the puppet strings, trying desperately to arrive at a neo-CONstitution before public support runs out...Lord knows, he needs something to happen soon to save his Rumsfeldt-stilt-skin...all becoming a bit Grimm for him.

Hard to find a golden thread in a room-full of straw...better stop now...don't want to be more Austra-cised than I am already!

(Just light-hearted kiddin'...tryin' to cheer up CB2)


PRITCHOInteresting Snips from Sinclair & Russell's Sites - - -#1345648/2/05; 22:33:13

Taken from - (Aug '02)

Jim Sinclair's Commentary:

It is time to review Forbes’ take on the ramifications of US legislative pressure to kill the Chinese government's bid to purchase Unocal. The Chinese did not withdraw their bid but rather declined to face the frustration of continuing their effort in the face of mounting US protectionism. The Chinese will not repeat the same mistake that Japan made when they were too dollar rich. China will unload their long position in dollars as they are no one's fool when it comes to markets. Your hot shot dollar seers want you to buy but the Russians are moving out on this hot air dollar rally and the Chinese will as well via GOLD!

So please read the Forbes article that I am posting again (click here) as its importance cannot be overstated. Gold is going to $518 to $529 and in time above $1000 – period.

The article below demonstrates that they know not what they have done with respect to gold and regarding Chinese- US relationships - both economically and politically.

Taken from Latest Remarks --Richard Russell (Aug '02)

The following paragraphs are from the current issue of the Economist --

"The switch from a dollar peg to a currency basket may cause China to diversify its reserves away from dollars. It is unlikely to dump its dollars, but it could well reduce its new purchases of Treasury bonds in favor of other currencies. And, if China really has broken the yuan's link with the dollar, then this could be the trigger for another general slide in the greenback against the euro, the yen and other currencies, prompting investors to demand higher yields. The fate of American house prices could thus be determined by unelected bureaucrats in Beijing rather the unelected central bankers of the West.

"This article has argued that global inflation, interest rates, bond yields, house prices, wages, profits and commodity prices are now being increasingly driven by decisions in China. This could be the most profound economic change in the world for at least half a century. And its effects could last for another couple of decades. By some estimates, China has almost 200 million unemployed workers in rural areas, and it could take at least two decades for them to be absorbed by industry. Profit margins could also remain historically high for a period, though not forever, as stock market valuations in many countries seem to imply."

GoldendomeRoss Perot and that sucking sound.#1345658/2/05; 22:48:06

Does the CAFTA simply expose fertile ground to scatter more U.S. trade deficit dollars?

The Central American Countries ship us bananas, coffee, bright natty threads---and lets not forget--Panama Hats! What will we ship them? ......Dollars!.....

Where will they spend those dollars? ....China!... Just like everyone else.

PRITCHO@ makcumka -- Re msg#: 134544#1345668/2/05; 23:19:17

Thought for a moment I was reading my own story -we share some common ground.In Nov 2001 I consulted the so called "best" independent valuer in the City whom I'd used successfully on several prior occassions. We sold our ocean front home at a then record price for the suburb.His take & mine was that R/Estate was at a peak & that it was a good time to sell. Spot the mistake ! :) albeit in hindsight.

We do not cane ourselves unduly for this -luckily my wife is very supportive- just as well. We have been renting ever since & prior to Nov I have to organize another lease & find another property.Thats a real hassle & house prices are still strong here in Perth BUT I'm convinced this will change in the next 12 mths! Hope so.(Unfortunately rental
prices are on the rise & vacency rates have fallen from 5%
3 yrs ago to 2.5% now -because so many are finding it a struggle to pony up the purchase price)

I invested heavily in Gold & Silver & only my Silver is marginally in front.This of course is very disappointing as
I'm way under water with Gold -ONLY because of the games being played with currency appreciation.The Oz dollar Gold price was higher 4 yrs ago than it is now, ridiculous as that may be.It is just a matter of hanging on but for how long ?? Patience wears thin at times.

Like you I believe that Gold & Silver is there to be SOLD at an appropriate time when it can be put to maximum use. For example to fund a new home purchase when all the balls line up.Those that say they will "never" sell any of their Gold mustn't have much of it to begin with - or they must be mega wealthy. That's not to say that I would sell ALL -
certainly some would be kept for emergency AND as an unreportable source of funds.

Your last point -whether to buy a home useing credit & then pay it back in depreciated $ is one that I have often considered. It would solve the problem of renting where you loose the freedom of ownership.However I see pitfalls with this approach.

Firstly you would be buying an overly valued & inflated item which in truely high inflation - -may well depreciate at a rapid rate. This because nearly all home owners will have mortgages that they may have difficulty in servicing -- Job lay offs etc plus wages that don't keep up with the infaltion. While not everyone will have to sell -enough will in order to be able to exist. So prices on R/Estate MAY well come down considerably & if cash outs have occured - the resultant price increases in Gold & Silver may not fit the timing of repayment schedules.

Btm line - it's too big a gamble for this gambler -so I'll keep renting for at least the next 2 yrs plus and let the cards fall where they will. Scarey eh?

SundeckDollar bird off its perch...#1345678/3/05; 04:10:38

Wow...dollar bird has plunged from its perch in a death-dive...down 1% in a few hours...very up less than 1%...what is the reason for this?? What will happen when NY opens? Don't miss the next exciting episode of DOLLAR DODO!! (Coming to earth near youuuu...)


SundeckChina's demand for gold and jewellery ornaments blooming #1345688/3/05; 04:23:57


With the country's rapid economic growth and improving living standards, gold and jewellery ornaments have become another hot consumption item for the Chinese, like houses and cars.

Sundeck: Yep...those 1.4B Chinese are gonna want the "good life" just like yon "westerners"...and gold and diamonds are friends for life...Bless you Marilyn wherever you are!

SundeckWhen Will India Kick Its $200 Bln Gold Habit?#1345698/3/05; 04:43:30


However, India's gold consumption rose 57 percent from a year earlier in the 12 months ended March 31, on top of a 63 percent jump in the previous year.

``Gold holdings among Indian households at current market value are about 2.5 times the current equity holding of $80 billion,'' said Chetan Ahya, a Morgan Stanley economist. In other words, some $200 billion, or the equivalent of 29 percent of India's gross domestic product, is locked up in jewelry.

Sundeck: Wow...are those figures correct...60% increases?? Why do Indians hold so much gold?? Perhaps this chart:*&fd=1&fm=1&fy=1990&ld=31&lm=12&ly=2005&y=daily&q=volume&f=png&a=lin&m=0&x=

tells part of the story. Rupee lost half its value versus gold over 10 years...comparable to the capital gain in houses in Australia or the US, for example, but how many Indian brides can own a house? What else could they hold that retains wealth for them? You know, some cultural practices have a reason for being...

This is an interesting article that contains some other nice details about gold in India


CaradocCrystal ball report#1345708/3/05; 05:31:09

Interim high pending; high 440s/low 450s followed by a head feint down to $445 so that August longs at 445 make no profit.


PS: the guy in the orange sport coat said this crystal ball would be reliable....

SundeckCNOOC and other hot winds of change...#1345718/3/05; 06:00:02

Well, yes, I suppose the critics may be right...there was no reciprocity allowing, for example, Chevron to buy CNOOC, but the main question still goes unanswered: "What is China going to be able to acquire with its dollar reserves?"

And if the critics really are worried about China not playing on a level playing field when it comes to spending its hard-earned dollars on something American, how is it that they offer no ojection to America acquiring inexpensive goods from China in the first place; offering their dollars in gay profusion to Chinese companies that manufacture on those same unlevel playing fields. Could it be that the American consumer likes the playing field tilted in their favour, but don't like it tilted the other way?

Well, national security is certainly an important concern for any country, and I fully expected the CNOOC bid would be blocked, but still the question lingers...dum de dum...what to use dem dollars for? And what about all those ones that Japan holds, and Korea and Taiwan and half a dozen other countries in the Uncle Sam Benevolent Society?

With the "currency basket" signal already sent, I expect China will linger for a while as it gains experience in managing its currency in its proto-state floating-environment. China's trade with most other countries is largely balanced (as I understand it). It is just with the US that a large imbalance exists. And the US has major trade deficits with all its major trading partners. I really feel that it would be a bit unrealistic to expect China to move very far in a single might find its trade going into serious imbalance with one or other trading partners.

Of course, the other unanswered question is: "Why does the world persist in using a US-dollar standard, when it is patently obvious that it is no longer a stable standard?"

And a corollary might be: "In these days with instant electronic transactions and monetary conversions, and sophistocated arbitrage and hedging operations, why aren't more contracts written in arbitrary major currencies, like Euros or Yen or Swiss Francs, or Yuan or (dare I say it) gold?"

Why does one need a so-called standard at all? Lord knows, the US dollar is no longer a standard any more than half dozen other currencies are.

The currency winds may be warm, even balmy, but watch out for the turbulence as the laminar flow eventually breaks up...

Enough of this ramblin...before I get accused of being a worthless piece of tumble-weed and jammed into a fence and covered with dirt...


GoldiloxCNOOC#1345728/3/05; 06:21:20

@ Sundeck,

Watch CNOOC catrfully. They are reported to have withdrawn their bid for UnoCal due to political pressure, mostly from CONgress.

Since the object of their desire was Asian oil reserves owned by UnoCal, I suspect they will turn around and start making lucrative offers for individual exploration and extraction contracts.

If the UnoCal bid was an example of "biting off more than they can chew", I suspect they will respond with smaller bites! These will likely garner much less press and political resistance.

No chance that they are "going away".

Topaz@G'lox.#1345738/3/05; 06:55:55

Yer right there G'lox, the Chinese 'aint gonna to go away, that's for sure.
We had the Maytag 1.5B "fail" ...then the Unocal 18B "fail". I see Trojan Horse here and the "next" fail will probably tip the scales for them.

We Watch!

Topazvale July Ag.#1345748/3/05; 07:37:04

Now toast, it WAS curious to note though that July deliveries actually didn't get square 'till Monday where 2oddK was slated.
The Ag Lease rates indicated source of supply for this 10,000,000 oz's with a nice "little" uptick.

GoldiloxDX Waterfall#1345758/3/05; 07:42:21

The Dollar is not finding much support above 88.

The ESF is not gonna stand in front of a moving train?

mikal30 yr Bond brought back#1345768/3/05; 08:12:43

The US Treasury has revived the 30 yr Bond according to news reports.
Knallgold30yr bond#1345778/3/05; 08:44:08

Either the $ won in the currency battle (now watch the exchange rate to get a clue...) or this 30year bond,issued to finance more debt, will be again mostly bought by those carribbean shadow entities.In short,for further monetization of debt which is highly inflationary.And I thought there is no inflation...
Druid@Goldi /Sundeck#1345788/3/05; 09:09:39

Druid: The CNOOC attempt was a test move to see how warm the waters are. My guess is they new the deal wouldn't fly but wanted it out in public for all the world to see. Now, what about that dollar reserve (hoard) problem. I wonder if there is any correlation with the latest move in the Euro?

How are relations between the Euro faction with Iran and Russia etc..? We continue to watch from our good view high upon the mountain.

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Gandalf the WhiteWHO let the "dogs" out ?#1345818/3/05; 09:54:33

Jump SPIKE !
WATERFALL days are back !!!
Looking good --

DruidSee Link#1345828/3/05; 10:15:51

Druid: A real difference of opinion shaping up at this particular point in time. Check out the action.
TownCrierGold, euro on the rise#1345838/3/05; 11:10:47

NEW YORK, Aug 3 (Reuters) - U.S. gold futures surged on Wednesday, reaching a fresh one-month peak as a sharply higher euro made bullion more attractive to investors, traders said....

"There was a breakthrough with the euro, and gold has gone through several key numbers in the last few days," said analyst Scott Meyers of Pioneer Futures. "The key today was the advance in the euro currency."

He noted that breaking through the $1.2285 barrier could mark the beginning of further advances in the euro and gold.

Prices rising in $2 and $3 increments, Meyers said, was a sign of an orderly gold market.

"I like what I am seeing and I see $450 within the month," he said.

Concerns about a possible South African mining strike as early as Sunday have also contributed to driving the market... Gold and platinum companies in South Africa, the biggest bullion producer in the world, face the first country-wide strike in 18 years after wage talks broke down with miners' unions.

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

TownCrierU.S. Treasury rolling over $18.6 billion old debt, raising $25.4 billion in new debt; reactivates 30-yr bond#1345848/3/05; 11:35:21

TREASURY PRESS RELEASE -- August 2005 Quarterly Refunding Statement

August 3, 2005

We are offering $44.0 billion of notes to refund approximately $18.6 billion of privately held securities and government account holdings maturing or called on August 15, raising approximately $25.4 billion.

The securities are:
*A new 3-year note in the amount of $18.0 billion
*A new 5-year note in the amount of $13.0 billion
*A new 10-year note in the amount of $13.0 billion

These securities will be auctioned on a yield basis at 1:00 PM EDT on Monday, August 8, Wednesday, August 10, and Thursday, August 11, respectively.

The balance of our financing requirements will be met with weekly bills, monthly 2-year and 5-year notes, the September10-year note reopening, and the October 10-year TIPS reopening and 5-year TIPS reopening. Treasury also is likely to issue cash management bills in early September.

Thirty-Year Nominal Issuance

Treasury is re-introducing regular semi-annual auctions of the 30-year nominal security beginning with a bond that will mature on February 15, 2036.

...The re-introduction of the 30-year nominal bond means we must reexamine the current security offering calendar. We seek advice from market participants on how to fit the 30-year bond into the auction calendar and welcome any comments and suggestions. We will provide a calendar decision at the November 2005 refunding.

^---(see url for full press release)----^

CaradocNuke terrorists' favorite dates#1345858/3/05; 12:12:57


"In addition to mentioning this date as a preferred target, Al-Qaida operatives have made it clear they also prefer an attack during the daylight during the week to wreak maximum havoc and to be sure the entire world views the images of burning U.S. cities," said one knowledgeable military intelligence source.

"Others point out that Aug. 6 arrives in Japan while it is still Aug. 5 in the U.S. Does that raise the threat level this Friday?"
******end of snip********

Would have sounded like paranoia a couple of years ago, but with SecDef saying it's a matter of "when" rather than "if," it's worth reading informed speculation about answers to "When?"


melda laureDouble Eagle. Heinlein...#1345878/3/05; 13:18:52

Yes, and my favorite: the dollar, an "honorable world class reserve currency..."

If a man speak of his honor, make him pay cash! Clink clink!

melda laureSeat belts- check. Dramamine anyone?#1345888/3/05; 13:47:27

Mikal, the odd thing about the rare dish called Truth. It is a dish whose preparation violates all culinary principle. Often enhanced when paired with the foulest of lies for the most striking contrast. Best served quite naked, like beef tartare, without too much added spice.

And unlike meats or fresh vegetables, the quality of truth is not of particular concern. To the true gourmand, a fould batch of truth is almost as edible as a choice fact. Truth is tasty either foul, or fair, either ugly or glorious. We eat it even when it makes us sick. We prefer an ugly truth served plain to the more elaborate presentations by those lying chefs who disguise its pungent putridity with artful lies and mask it as honey cakes especially as the covert nausea is just as bad. I like to know what I'm eating.

Indigestion and emis are but part of the rare gastronomic experience which those raised on a diet of pablum avoid and are untrained to appreciate, though they eat it in disguise all the same- yet they forego the salutory vomitory process. This has the effect of blurring the vision, among others.

May I suggest an after dinner smoke of pipeweed? I'd better get the large pipe.

GoldiloxSpiced Truth?#1345898/3/05; 14:01:47

@ melda laure,

Quite a picturesque desciption, but to which particular meal are you referring?

mikal@melda laure#1345908/3/05; 14:17:43

LOL! Thanks for your empathy and advice. It does help.
But "Dramamime" and "pipeweed" are both certain to fall
short of the mark as not even my strongest brew of Peppermint tea can alleviate what I feel now.
At least there are those who say it is the time of "darkness before the dawn".
Best regards

USAGOLD Daily Market ReportPage Update!#1345918/3/05; 15:34:15">
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

August 3 (from DowJones) -- The euro's push to a fresh 8-week high against the dollar led the New York precious metals complex higher on Wednesday at the New York Mercantile Exchange.

The benchmark December gold contract settled $5.00 higher at $442.70, just off of a five-week high of $443.00.

Traders said New York futures opened with positive data out for the euro which "mercilessly" pushed the dollar lower.

Analysts at MKS Finance said Russia's announcement that it would cut dollar holdings in its currency basket and statements that "the days of dollar domination of the market are over" from dollar bears led to the euro breaking above $1.23.

Also reports that Middle East oil proceeds were being converted from dollars into euros fueled December gold to charge to $443 an ounce - its highest level since July 1.

Larry Young, a senior trader at Infinity Brokerage, said the dollar has solidified its relationship to gold once again and the yellow metal moved in converse direction to the greenback.

With "gold-bugs" continuing to buy gold mixed with hedgers and speculators, Young said there is a wide-range of players to keep the gold momentum up.

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

TownCrierEuro surges to nearly two-month high -- Economic data, chart break, reserve buying behind move#1345928/3/05; 15:48:12{6F3CB02C-DB26-42E1-9888-E7716D1710FD}&siteid=mktw

CHICAGO (MarketWatch) - The euro was its richest against the dollar in nearly two months Wednesday...

Reports that Middle East and Russian oil proceeds continue to be redirected from U.S. dollars into euros, which follows Russia's announcement this week that it's shifting more of its central bank reserves to euros, fueled an already firmer euro in summer-thin trading conditions, traders said.

"The latest batch of reports from Europe is confirming the market's view that the days of gloomy economic news from the Continent may be over," said Boris Schlossberg, senior market analyst with Forex Capital Markets, New York.

A report in London's Daily Telegraph said oil revenue is increasingly being spent in Europe, and rumors circulated of Saudi Arabian and Kuwaiti buying of euros.

That news follows an announcement earlier this week that the Russian central bank was moving to a 65%-35% dollar-euro mix for its reserves from 70%-30% previously.

Other currencies gained against the U.S. currency because of general dollar weakness.

The yen has fallen against a host of major currencies as political uncertainty persists.

Japanese Prime Minister Junichiro Koizumi risks an interim election being called in the wake of his controversial postal reform bills, which will be voted on Friday.

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

Euro and gold surging... Will aggravated Japanese savers "go postal" and revive their gold-buying sprees of recent memory?


TownCrierChoose your brokers wisely...#1345938/3/05; 15:56:55

HEADLINE: New York stockbroker pleads guilty in multimillion-dollar scam

NEW YORK – A high-rolling stockbroker who stole more than $7 million from employers and investors such as NBA star Latrell Sprewell agreed Wednesday to a plea bargain that will land him behind bars for up to a dozen years.

Calvin Darden, 30, who owned a $2.85 million Long Island home complete with a 20-foot-long aquarium, faces four to 12 years in prison at his Nov. 10 sentencing.

According to authorities, Darden stole more than $3 million from eight investors and $4.1 million from three employers: Smith Barney, a unit of Citigroup Inc., AIC Ltd. and Wachovia Securities LLC. Darden used $1.4 million of the money to pay off some of his victims while continuing his financial juggling act, authorities said.

Darden secured loans from his employers by promising to generate big business through a star-studded client list that included basketball star Shaquille O'Neal, musician Nelly, actress Angela Bassett and actor Samuel L. Jackson. He claimed to manage millions of dollars in assets for the boldface names, prosecutors said.

But Darden failed to deliver the high-profile roster, which didn't put the brakes on his celebrity lifestyle. Even as he was duping investors and employers, Darden was among the guests at the Waldorf-Astoria wedding of "The View" co-host Star Jones and Al Reynolds.

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

Schmucks like that remind us all why we are well-served to maintain a good percentage of our portfolios in closely-held gold, and why we choose to do business with only reputable individuals like those at USAGOLD-Centennial Precious Metals, Inc. -- serving gold investors professionally and reliably since 1973.


GoldiloxAMERICAN PRONOUNCED BULLISHNESS#1345948/3/05; 17:06:31


Let's face it, housing and its bubble supports our entire consumer economy, with the extra bonus of providing a speculative opportunity. Housing is the false economic foundation, upon which a sick demented consumer culture rests, fully infected by a powerful debt virus. You might be shocked to learn that 23% of all US college graduates declare bankruptcy before graduation. One could accurately call student bankruptcy part of the education to become a consumer. Students with no income are offered multiple credit cards. Savings has gone into reverse. We have a minus 1.0% to 1.5% savings rate in my book. People spend all they have and more, and often go shopping to counter boredom and depression, much like an addict, as well as to undertake a frivolous fashion initiative periodically. This supports the economy perversely, but at the same time surely dumbs down the labor force.

Retail, as we agree, sits on the lowest wrung on the economic food chain. Americans sense a profound change from dirty industry to clean financial and retail structures, with some recognition of the grand erosion of legitimate wealth creation. They feel they are getting away with it, wealth from inflation thin air. The latest erosion has been the transfer of R&D functions to Asia, well covered in the Business Week publications. However, Americans regard the massive job loss from manufacturing as a major thorn in our side, a festering problem which will not go away. At the same time, quite in contradiction, they regard the movement toward clean industries as evolutionarily advanced. This is clear cognitive dissonance. The reality gap shows up in added household debt. Again, housing enables this mental compromise, as the added household debt burden can be absorbed in yet more home equity loans and credit card consolidations. Inflation of the homestead makes it all go away, poof, all debt disappears. The untold story is how the credit card spending repeats, as it does with binge drinkers. High credit card balances reappear quickly. Housing is the great enabler of the American consumption and economic destruction.

The housing bubble is supported desperately by our banking leaders. We might even have seen an engineered bond rally this spring, feeding off the General Motors downgrade, to support housing, to ruin some hedge funds, and to cover up the absence of Chinese and Japanese official Treasury purchases. I suspect really nasty methods at work. The secular deflation natural process has greatly aided any and all bond bullish effects, joined in a powerful way by China and its triple quantum step cheaper labor. I believe you under-estimate the positive secular deflation effect on bonds, the Asian central bank collusion, and its ongoing fortuitous but temporary effect on US asset inflation. Our monetary inflation constitutes Asia's trade surplus, recycled directly into US Treasurys with no conundrum whatsoever. The core economic slowdown in the United States is so far undetected, due probably to extreme statistical deception through adjustments. That is the other answer to the so-called conundrum.


In an enlightening conversation with Kurt Richebächer, Jim Willie builds a case for the housing bubble and zero-financing being the weapon of mass financial destruction that could bring down the current western economic domination.

A really great read.

PRITCHOTodays Wrapup @ FS.Com - - Jim Willie talks to Kurt Richebächer#1345958/3/05; 19:51:16

SNIP - - -

The housing bubble is supported desperately by our banking leaders. We might even have seen an engineered bond rally this spring, feeding off the General Motors downgrade, to support housing, to ruin some hedge funds, and to cover up the absence of Chinese and Japanese official Treasury purchases. I suspect really nasty methods at work. The secular deflation natural process has greatly aided any and all bond bullish effects, joined in a powerful way by China and its triple quantum step cheaper labor. I believe you under-estimate the positive secular deflation effect on bonds, the Asian central bank collusion, and its ongoing fortuitous but temporary effect on US asset inflation. Our monetary inflation constitutes Asia's trade surplus, recycled directly into US Treasurys with no conundrum whatsoever. The core economic slowdown in the United States is so far undetected, due probably to extreme statistical deception through adjustments. That is the other answer to the so-called conundrum.

The US monetizes bonds via an Asian round trip. You expected great distress to the United States economy before now. Without Asian cooperation, we would be in total disarray and decline. They are not just our credit masters, as we know, but our hospital caretakers in full control of crucial intravenous drips of daily capital. We wither when they say so, but in the process, their economies lose their customer base. When Chinese middle class demand grows much more, when ex-Japan ex-China Asian demand grows much more, all of Asia can sacrifice some demand from the United States. When the Asian credit market is born, look out, as big changes will come here. Watch the United States obstruct the formation of this credit market, perhaps using the IMF or World Bank weapons.

PRITCHOSorry Goldylox - - - Re Duplicate Post - - - Almost !#1345968/3/05; 19:55:09

I just logged on & posted - -didn't read previous posts which is my normal habit- -- Anyway nice to see we both thought it a good read ! :) Back later
PRITCHOGhost site - - ?#1345978/4/05; 07:41:14

Bit quiet isn't it? Even the ads have stopped! :0)
GoldiloxGold Buying Soutce#1345988/4/05; 08:11:09

I wonder if this buying spree is being led by CNOOC money looking for a home?
Gandalf the WhiteHOBBITS --#1345998/4/05; 08:41:24

Go find out why the TownCrier has gone missing !

GoldiloxNY gold futures rise; other precious metals fall#1346008/4/05; 08:58:51


NEW YORK, Aug 4 (Reuters) - U.S. gold futures rose on Thursday, mainly on continued dollar weakness against the euro and some institutional buying, traders said.

Other precious metals lost ground, including platinum, which fell more than 1 percent, wiping out gains from the day before.

At the New York Mercantile Exchange's COMEX division, benchmark December gold was up $1.60 at $444.30 an ounce at 10:06 a.m. EDT, trading within a range of $441.20 to $444.80.

The euro was still strong against the dollar, at $1.2340 compared with $1.2342 late on Wednesday. A weaker dollar tends to boost gold prices as dollar-denominated bullion gets cheaper for investors overseas.

Summer vacations have kept gold trading a bit thinner recently and COMEX estimated volume was around 10,000 contracts at 9 a.m.

Spot gold was changing hands at $438.40/439.20, up from $436.35/437.05 in New York on Wednesday.

"We have been seeing some fund buying," said one trader at an international bank. "The technicals look good and $437 is healthy, but some resistance levels to $456, which is where it was last December.

"It could be difficult to get to the next level, but there is room for investors if it breaks through $456," said the trader, who requested anonymity. He said the weak dollar continued to be supportive of gold.

GoldiloxGaily reckoning interviews Jim Rogers#1346018/4/05; 09:27:04


Jim Rogers: I know that hundreds of billions of dollars are being poured into China to take advantage of the rise in the renminbi. First of all, whenever something like that happens, it wouldn't surprise me if this renminbi didn't go down for awhile, because all those people who poured hundreds of billions into China to speculate have got to get it out.

But whether it goes up or down in the beginning, I don't care. I'm going to be buying more of it myself. Because longer term, the renminbi's going to be a big currency, a great currency.

The consequences, again, there have been hundreds of billions of dollars of speculation on the renminbi, and that always worries me. So I know there are going to be some surprises. I just wish I were smart enough to know exactly what the consequences will be and what the timing will be.

I'm not one of the people pouring money into China right now to speculate on the renmimbi, that's for sure.

Sjuggerud: Is a hard landing in China inevitable at some point, as you suggest in your book?

Jim Rogers: Yeah, I don't remember if I specifically said... But real estate is where the major speculation has been, and that's where I'd expect the hard landing to center, if you will. It will reverberate out from there, of course. There will be other people who will suffer. That's my view.

I mean, some parts of the Chinese economy will never even know that there's a hard landing in Shanghai real estate, say, or that a bunch of real estate speculators in Beijing went broke. The guys out there producing coal, or building power plants, won't even know that there's a hard landing in other parts of the Chinese economy.

So I suspect it will certainly start with real estate, or something, and reverberate out... But parts of the economy will never know it.

Sjuggerud: Should there be a hard landing in China, do you anticipate a major consolidation in commodities?

Jim Rogers: Yes, I do. Something's going to cause consolidations in commodities. We always have consolidations in every bull market in history, no matter what the asset class. In every stock bull market, there have been consolidations along the way.

Again, I wish I were smart enough to tell you exactly what's going to cause them, and the timing, but I'm not. It's pretty obvious to me that if we suddenly see headlines in the Wall Street Journal of some kind of turmoil in China, that commodities would be having a correction, or would go into a correction. But that would be a chance to BUY commodities.

You know, in the '80s and '90s, we had some huge corrections in stocks. In '87, stocks went down what, 35-40% in several months, but people who understood that this was in the context of a major bull market bought more stocks; they didn't panic and sell.

Likewise, in '94 or any of the other corrections along the way in the bull market in stocks in the 1980s and '90s, you made a lot of money. So if you see those headlines, I urge you to buy all the commodities you can. Probably buy all the China you can, too; but certainly, buy all the commodities you can, too.

Sjuggerud: So if China slows down or crashes, that would be a tremendous buying opportunity in China and commodities?

Jim Rogers: In terms of commodities, yes... especially in terms of commodities, but also in terms of China.

But again, I wish I were smart enough... If we suddenly have a bird-flu epidemic throughout Europe, I suspect economies around the world will decline and scare people and commodities will slow down for a while. If Fannie Mae goes bankrupt, it's going to scare people. If China goes to war with Taiwan, it's going to scare people.

Something's going to cause consolidations, but buy 'em, don't sell 'em.

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TownCrierGo figure#1346058/4/05; 13:29:14

While the market in overnight fed funds was trading in line with the current FOMC target rate of 3.25 percent, the trading desk for the Federal Reserve felt the need to add liquidity, boosting the reserves of the nation's banking system by $18.25 billion.

Of this, $10.25 bln was provided through overnight repos at (ave.) 3.289 percent, and $8 bln was created through 14-day repurchase agreements at 3.4 percent.

Presumably, the higher rate on the two-week term repo is factoring in the likelihood of another rate hike in the policy target when the FOMC meets next Tuesday, August 9th.

As money depreciates, prices rise and workers demand higher wages and people tend to borrow more according to the new price and wage levels, which further increases the money supply, putting additional depreciation pressure on the currency as people are inclined to ramp up their timetables of spending in a race against higher future prices, and so it goes... and state-sponsored interest rates merely tag along for the ride, rising, but not quite fast enough to put the trend in jeopardy of collapsing back on itself to paralyze the economy or topple the banking sector. The fear, therefore, is never of a legitimate deflationary collapse, but rather of an inflationary (currency depreciation) runaway. This is why central bankers talk of how difficult it is to put an inflation genie back in the bottle.

So as the Fed continues to raise the "state-sponsored" interest rates on the dollar, one begins to wonder how "strong" the currency really is, and whether it might really be slipping out of the bottle, especially in contrast with the ECB Governing Council's decision today to calmly keep euro-area main refinancing rates at the same 2% level that it has been at since June 2003.

Choose gold.


USAGOLD Daily Market ReportPage Update!#1346068/4/05; 13:50:25">
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

August 4 (from MarketWatch) -- Gold futures close near $444 an ounce Thursday, extending a rally that's now claimed six out of the last seven sessions as traders kept a close watch on moves in the U.S. dollar and the possible strike of mineworker unions in South Africa.

COMEX December gold hit an intraday high of $445 before closing at $443.70, up $1 for the session.

The rally in gold "reflects a happy confluence of gold-positive and dollar-negative news," said Brien Lundin, editor of Gold Newsletter, including "looming labor strikes in South Africa, increased physical demand in China and an apparent exhaustion of central bank gold sales."

The potential strike over wage increases is a "concerted action by South Africa's three major mineworkers unions, and would be the country's biggest in 18 years," he said.

Its "impact has the potential to be devastating," he said, and the "prospect of 28,000 ounces of daily gold production suddenly going offline has provided a noticeable boost to bullion prices this week."

But to keep the bull market in gold alive from a technical standpoint, it's "crucial" that gold trade into the high-$440s before the end of the month, said Lundin.

"I think the global trends now in motion make it likely that the metal will do that, and more," he said.

Meanwhile, in Thursday dealings, the dollar hit two-month lows against the euro and three-week lows against the pound on Wednesday.

TownCrierQaeda's Zawahri warns Britain, U.S. of more attacks#1346078/4/05; 14:30:14

DUBAI (Reuters) - Al Qaeda's second-in-command Ayman al-Zawahri has warned the United States and Britain of more attacks, singling out London for the first time since suicide bombings on its transport system killed 52 people.

Zawahri, in the video aired by Al Jazeera television on Thursday, said British Prime Minister Tony Blair's policies would bring more "destruction" to London...

"Blair's policies brought you destruction in central London and will bring you more destruction," said Zawahri who stopped short of directly claiming responsibility for the London blasts.

"What you have seen in New York, Washington and Afghanistan, are only the initial losses," Zawahri said, referring to the Sept. 11, 2001, attacks on the United States for which al Qaeda claimed responsibility.

"Our message to you is clear, strong and final: There will be no salvation until you withdraw from our land, stop stealing our oil and resources and end support for infidel, corrupt (Arab) rulers," he added.

"If you continue the same hostile policies you will see something that will make you forget the horrors you have seen in Vietnam," he added.

"There is no way out for Washington except by immediate withdrawal. Any delay in this decision means more killing and losses. If you don't withdraw today you will inevitably withdraw tomorrow, but only after tens of thousands are killed and injured."

President Bush dismissed Zawahri's threats, saying the United States would stand its ground in Iraq.

"The comments by the number two man of al Qaeda make it clear Iraq is a part of this war on terror, and we're at war," he told reporters at his Texas ranch.

"People like Zawahri have a ideology that is dark, dim, backwards."

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

Makes it difficult to imagine a strengthening dollar or reliably firm financial networks and markets in such an environment as this.


GoldiloxRally Against the War#1346088/4/05; 14:36:44

CSPAN is televising last weekend's rally in Los Angeles sponsored by Rep. Maxine Waters and various speakers and reps from Iraq and VietNam veterans groups. The reason I post it here is that much mention was made of the corporate justifications for this particular war and the highly profitable involvement by various admin "alma maters". Sacrifice of individuals never seems to be "matched" by the involved corporations, who profit rather than share in the sacrifice.

Whether one supports their position or not, it is refreshing to see dialog building at higher levels than the sad state of single-message corporate "O'Reillys" we have suffered through for a few years now.

Perhaps the rebirth of dialog and investigation will even expand to cover the government and corporate abuse that is spearheading the destruction of the US working economy.

Maybe we should solicit CSPAN to cover events like the Barrick-Blanchard case, knowing that the "business media" will remain "lights out" on major financial and corporate abuse.

We continually ask for "more transparency" in the FED and corporate arena, but then balk at exposing our "heroic" leaders to the same scrutiny they increasingly subject us to.

The "solutions" to our economic quagmire are neither simple nor painless, but we have almost all agreed that "more of the same" will solve nothing.

Thanks to Michael and his crew for a forum that lets us examine the events and ramifications, and even question the protagonists. There is no better example of Jefferson's axiom that a successful democratic republic requires a well educated electorate.

Topazalt-currency Gold.#1346098/4/05; 15:50:04

Although encouraging, this current delivery uptick pales in comparison to the June one which saw PoG shining in ALL currencies.
To keep things in balance, Aug deliveries need to get to 10K+, we're currently half way there so I'd be expecting some "eye-opening" PoG moves next week.

Expectations are not realities though!

GoldiloxThe Real Estate Bubble Bursts the American Dream - Joyce Marcel#1346108/4/05; 16:42:11


There's a human cost to this real estate bubble. Children can't afford to buy homes in the towns they grew up in; they leave the area and even close families get split up. Downtowns become full of art galleries and homemade soap stores instead of shoemakers, fish markets, greengrocers and soda fountains. Our friends and neighbors are forced to leave. We no longer see familiar faces when we walk downtown.

It used to be the American Dream: buy a home on a 30-year mortgage, make friends, work hard, raise a family, be part of the community, watch the children marry, help them set down nearby roots, finally have a party and burn the mortgage, retire and putter in the garden, die and be buried in the local cemetery.

This was a great dream, a great promise, and now it's gone. "We are losing our history, losing our children out of here, losing to greed what makes Vermont special," Werner said. "The green space is going, going, gone. It's a race to see who can sell what at an outrageous price to some sucker from down south, and the suckers keep on coming. We're turning Vermont into exactly what people are fleeing from in New York and Boston."


More dots are being connected in the realization that FED liquidity bubbles are at the heart of a failing economy.

Banksters Beware!

HOOSIER GOLDBUGREAL ESTATE BUBBLE????????#1346118/4/05; 17:33:02

The real estate bubble will NOT BURST ever! As a real estate appraiser, I come upon the most extraodinary circumstances in my line of work! The FED will make it work at all costs. INTEREST ONLY LOANS, 125% LOANS, SECOND MORTGAGES, THIRD MORTGAGES,FHA/HUD "TEACHER IN THE NEIGHBORHOOD" AND "COP ON THE BLOCK" LOANS, ETC. MERRIL LYNCH, who I do work for says real property will double in ten years. We have an inverted interest rate curve which is going to get more extreme-down to .5% for mortgage money, etc. with short term rates at double digit. HUD says your home will be your only legitimate retirement plan down the road, so as a result, they want everybody owning a home. This game should have been up a long time ago, but is still going strong. Look at the latest reator figures. The manipulation in the markets, including the GOLD MARKET has just begun and we have only seen some of their tricks, just scratched the surface. There is a whole ----load of tricks remaining. People who cry wolf about the real estate bubble bursting need to apply to the government for psychiatric help.
TownCrierHoosier Goldbug, housing prices#1346128/4/05; 17:47:42

Well said. Not to mention... very often a significant amount of the local tax base/ local government revenue rides on the back of housing valuations. So, not only does the very formidible banking sector not want to see this particular market implode, neither does the grassroots level of our society's network of government.

But still, all this is not to say or imply that the nominal pricing gains in this sector will translate into real gains when accounting for inflation. For REAL gains, I'm putting my own money on the potential found in gold ownership.


DemosthenesHierarchy of assets#1346138/4/05; 18:06:16

Recall Gresham's Law "Bad money tends to drive out good money", which in regards to currency means that people will hoard money that they perceive is of higher value and circulate money perceived to be of lesser value. It's the reason we don't see too many pre-1965 coins in general circulation, for example. So let's see if we can extend this to other assets.

We can develop a "hierarchy of assets" based on this principle, that when people need to circulate money/assets they will do so in the order of least valuable to most valuable.

1)Other people's assets (aka credit): People finance homes and pay with credit cards even when they have the cash available.
2)Cash --- Most people do have a subconscious understanding that the digits in their bank account does not represent anything real. Why else is savings rates 0 to negative?
3)Paper proxies (e.g. Stocks) Certificates that represent a share of a physical asset but not control of the asset itself. Certificates representing gold in a vault in Timbuktu or wherever may also fall in this category.
4)Physical assets (metals, real estate, etc.): People part with physical things that have some tangible value last of all.

I'm not really sure how bonds would fit in. I want to put them in the same category as stocks, but something just doesn't feel right.

There was some discussion earlier about "using" profits from metals. It makes perfect sense to use the profits from these metals if all other assets classes are tapped or you want to convert them into other physical assets. If I recall somebody mentioned buying a house. Whether you want to do this depends on your view of credit, since such a large line of credit does enslave you for a period of time, although I must say that I wouldn't recommend it unless you could pay off the entire house, and if you could I'd say do it in a heartbeat. I couldn't see selling gold or silver though until after you have sold all your stocks/bonds, etc.

GoldendomeWhy we're not excited--yet.#1346148/4/05; 18:37:44

Someone asks: Who's buying the gold and driving prices higher? I confess that I don't have hands on strategic information that would give answers. But...this little rally here sure seems to look and feel and be progressing like about four rallies that have occurred this year as the gold price has yo-yoed between about 415 and 450--back and forth.

I think I'm not the only skeptic out here that's waiting to see some type of new breakout to the upside before getting too excited about this current move. My belief is that this move is probably just the gold shorts buying back their own paper after their last torpedo job, pushing the market gently higher most days with just enough "oomph" like yesterday, to drag in some long side sheep to the next futures market sheering. A little higher--a little higher, until the short shears are dragged out and the price driven back to the 420 area again. Disagree? but I think that this skepticism is a shared phenomenon just now and is a reason there is so little excitement about these daily incremental increases in the gold price here on the forum. We know that the shorts will allow $20 up over two weeks, then take it down $20 in three days. If someone somewhere is buying gold, I hope they do it in the physical market, that's the only place where the shorts can lose control. No one can have enough money to beat them in the futures pit, if the governments with money creation don't want it to happen.

On a very unrelated topic: When was the last time that a justice of the United States Supreme Court left before the age of eighty? Who and when? I confess, I don't know.

PRITCHOFrom Richard Russell - - - - Latest Comments #1346158/4/05; 18:48:45

As for gold, we know that India is a big accumulator of gold. More recently, the Chinese government has been encouraging its people to accumulate gold. Today the US will not release its gold stock to other nations in order to settle its debts. If not for that, gold would be pouring out from the US Treasury and heading to foreign lands. When Nixon shut the gold window on August 15, 1971, the transfer of US gold to settle debts ended. And that's when the current paper currency system actually began.

So the US is trapped in an idiotic paradox. The US refuses to release any its store of gold, but at the same time it's schizophrenic attitude is seen in the way the US government prices its gold stock -- at 42.22 an ounce, rather than pricing it to market. Sad, stupid, pathetic. "Gold is garbage," says the US government, "but you can't have any of it, it's ours."

The old adage tells us that -- "To the winner goes the spoils." There are two spoils in the world today. The two are gold -- and "black gold" or oil.

From the Financial Times, Aug. 3, by Fred Hu -- If China establishes a solid track record in its policy reforms and gains international credibility in the management of monetary and exchange rate affairs, one can easily foresee that the renminbi will find ever-increasing prominence in global commerce and finance. It is likely that within a decade the Chinese renminbi will join the dollar, the euro and the yen as the fourth major reserve currency in the international monetary and financial system.

Russell comment -- I note that Mr. Hu calls all four currencies "reserve" currencies. Funny, I thought only the US dollar was the world's reserve currency. Mr. Hu, by the way, is no amateur yo-yo, he's a managing director of Goldman Sachs.

From the August 4 Financial Times -- "The US May Regret Letting Politics Kill the Chinese Takeover. An inquest into the demise of the bid by CNOOC for US oil company Unocal would reject the verdict that it died of natural causes. This was a blatant case of foul play. The bid was killed off by political opposition, culminating in last week's reprehensible decision by Congress to pass legislature dragging out the regulatory approval process. This sorry tale should trouble anyone who believes in the importance of free and open markets. It also exposed the disturbing mood of anti-China hysteria now gripping Washington."

Russell comment -- you won't read anything like this in the Wall Street Journal. If you want to know what's going on, read the Financial Times out of London (they also own the Economist magazine).

*That last comment really nails whats wrong & rotten about Financial Reporting in the USA. It doesn't happen!

GoldendomeObscure shipping index points to troubled waters ahead.#1346168/4/05; 19:17:51

The BDI (Baltic Dry Index)is issued every business day by the London-based Baltic Exchange. The Baltic Exchange had its early roots in the Virginia and Baltic Coffee House in London's financial district in 1744. Every business day Baltic executives canvass shipping brokers worldwide and ask the rate to book various cargoes of raw materials on various shipping routes around the world. Variables are considered such as type and speed of the ship and length of the voyage. Answers are then molded into the BDI.

The BDI provides an assessment of the price to move the world's major raw materials by sea and insight into the global shipping market. It is an accurate barometer of the volume of global trade. A large demand for shipping means rising rates, and slack demand means lower rates. The BDI doesn't deal with ships carrying finished goods. It only deals with precursors to production, so the index seems to be a better indicator for economic growth and production and is devoid of speculative content. No one books an ocean freighter on a hunch! When bulk shipments of cement, grain, iron ore, etc. are arranged with a shipping company, there is economic activity planned at the end of the line where the raw materials are delivered.

>>.....The index registered a blow-off high near year-end 2004 at the 6250 level and plunged. An attempted rally in the first quarter of 2005 failed and since mid-April the BDI has dropped 63%. Over a 52-week period, the index has plunged 72%.

We already know that the European economy has slowed down appreciably. Britain alone has just reported the slowest economic growth in 12 years and the German economy is terribly anemic. Also, in Asia the Chinese economy has become overheated, and there is concern for the banking industry and possible negative impact on the Chinese economy.

The BDI chart seems to be predicting a significant slowdown in global economic activity which, for the world's stock markets, would mean the end of the cyclical bull market and a return of the secular bear market, and probably with a vengeance. For the world's capital markets, the dropping BDI should, in theory, mean lower interest rates. But in the debt-ridden US, a declining economy will cause an unprecedented real estate implosion for starters, which logically would cause interest rates to rise as defaults soared and the mood of Americans changed from fearless to fearful.

For the world's gold devotees, fear has been the missing ingredient, which has kept the precious metal in the doldrums while real estate has been in the limelight. If fear gets a grip on world markets, gold will suddenly become the preferred chaos hedge.

Unless the BDI has suddenly become skewed by something which is not apparent, like an undocumented large supply of new bulk shipping tonnage, the collapse of the index since April is predicting a drop in global economic activity and trouble ahead for investors.

Something appears to be amiss globally, and it could become dangerous to one's financial health to ignore the BDI's precipitous decline. Troubled waters may be ahead!

GoldiloxReal Estate "gains"#1346178/4/05; 21:38:19

@ Hoosier Goldbug, TC,

On paper, and measured against hedonicly adjusted indices, prices may continue to rise. After all, we've seen over 95% debasement of the dollar already in the FED's reign. Why should we not eventually suffer the same fate as other hyperinflations?

The FED can "manage" liquidity just fine, but asymptotic rates require infinite price rises to balance them, just from the raw mathematics of the hyperbola.

To assume we can maintain asymptotic rate reduction forever is very likely rose-colored glasses reasoning. At some point, Mr. Market will rebel, and the longer manipulation is maintained, the stronger will be the reversion to the mean.

The consequences inherent in running an economy at near breaking point have been historically demonstrated over and over again. It's akin to running a race car engine flat out forever. Something WILL eventually break.

Yes, Papa FED (whoever that might be at the time) will resort to his "magic bag of tricks" to save the risk-bearing lending institutions, but that says nothing for the consumer, whose defaults are already at record levels - even at these historically low rates.

In a market so finely tuned, NONE of these defaulters will be able to return to the housing market without some financial windfall - especially given the latest bankrupcy tightening. By your own reckoning of last result "savings", they have then been reduced to welfare candidacy, placing even more stress on the "system".

TC's point is well taken, for beyond the burden of greater and greater principle obligation, the government will reap greater and greater "tribute" in the form of growth matching RE taxes and the like - costs that continue to grow even after 100% loan repayment.

On top of that, we have a "wealth distrubution" issue, where the 98% majority is being squeezed out of more and more "real" wealth by a smaller and smaller elite class.

As to the idea that anyone who happens to disagree with you should line up for psychotic medicine, well, as a discussion tactic, that speaks for itself.

DoubleEagleRe: Goldendome#1346188/4/05; 23:08:28

Technically, Sandra Day O'Conner is a young lass of 75, born in Texas in 1930, but your point is still made. Part of it is that to have the stature necessary to be confirmed or even nominated as a Supreme Court justice you have to have some experience under your belt. So, you're looking at people in at least their 40's, and likely older when they get on the court. Then they stay as long as it suits them, which is sometimes very long indeed.

As for your skepticism on this rally, I'm right there with you. I don't think I've ever heard someone describe it so succinctly, but up $20 in two weeks and down $20 in three days (or maybe fewer!) is so true. I keep looking for the scalping. I've been a bug for about 7 years, with tendancies towards it all my life. I have seen very few $6+ days, and a lot of double digit down days. I'll start getting really excited when we see a $20+ move to the upside in a single day. Of course, if we hit $800 an ounce in increments over 365 days, I might start to feel good in that case too. :)


TopazReal Estate valuations.#1346198/5/05; 03:20:43

The prattle generally focuses on the wealth effect of rising R/E valuations and continual tapping of equity to sustain an increasing standard of living.
Precious little is said about accessing equity to sustain/maintain a Family's standard of living in the face of rapidly deteriorating future prospects for all but the Bread-winner(s)
Who'da thought 30 yr's ago that our "Babies" would be still clinging to the nest in record and increasing numbers ...not by choice, but out of necessity!

R/E to the Moon ...HA!

Topaz...meanwhile, back in the Farmyard#1346208/5/05; 03:35:54

The process of Milking the Cow has run it's course.
Someone soon will declare "Let's Eat the Cow"


You are missing my point completely! The FED is the game, is the market! There is no reversing to the mean when you not only manipulate the game, you are the game. You change the rules at will because you are the game, you play the game to get what you can from the game. If you cannot get what you want, you devise a new game, because you are not only in control, but you are the game. The complexity of the derivative market, with no one including Mr. Alan Greenspan, understanding the intricate setups, models,programs is a testament to this overwhelming fact. Throw away all your historical knowledge of the markets, including all the indexes you so heavily rely on because they are irrelevant in the face of all the complex game situations occurring. There is no getting back to normalcy in the markets anymore! Nothing makes sense anymore. You cannot use rational thinking anymore with regards to the market, because what is occurring is totally irrational. Those people who are on the right side of the trade, are there because of luck. All the interns from the big business schools who work for the TREASURY, FED, etc. during the summer, get to work on these projects to help devise plans, strategies, models, to facilitate this game into eternity. Its not business anymore, its called magical theatrical presentations. The FED or TREASURY should be nominated for an academy award every year. Time-Warner setting aside 3 billion dollars to cover irregularities in the accounting department of AOL. Where is there precedence in the history of business for this kind of BULL----? When people analyze companies do they take these set aside accounts into consideration or the possibility for such accounts? As for interest rates, mathematical models or principles go out the window. Inverted interest rate curve is already out of whack! .5 % interest rates versus double digit short term rates are just a matter of degree of variance not a view through rose colored glasses. Defaults by borrowers are just a minor casualty in this game, just like budget and trade deficits, pension fund underfunding, corporate debt, ets. are on a grander stage. As far as psychotc drug solicitations, you are correct in stating that this is a weak argument, especially since the government can/is maybe already getting drugs to the populace via the water supply. The way the markets are acting, this may be a possible reason.

contrarianHoosier#1346228/5/05; 06:47:41

I like your comments...really on the money...I do think though, that in the long run, all these FED machinations are doomed...and that, regardless, as following the historical context, (as per "Reminiscences of a Stock Trader", there is nothing new under the sun), the paper is doomed as well, and nothing can override the inexorable Kondratieff cycle which will end in the greatest depression the world has known.

HOOSIER GOLDBUGREALITY!#1346238/5/05; 06:55:31

I sure hope you are right! Guess I am just losing faith! I am getting back into emotional balance at this moment, so back to the trenches slowly accumulating the yellow stuff.

GoldiloxReality or "Marketing sales manual"#1346248/5/05; 07:59:06

@ Hoosier Goldbug,

Your wrote, "Where is there precedence in the history of business for this kind of BULL----?"

I would say there is plenty of precence in history - John Law, Tulip Mania - South Sea Corp. - they all apply.

Their "goldilocks scenario" (no relation, please) is not sustainable over any long period of time. It always looks tenable to the marketeers of the moment, but NEVER lasts very long by historical standards. (Wanna buy a pyramid?)

Methinks you have been mixing too much of your mortgage broker's sales manual into your morning coffee and paper. Defaults are "FAR FROM" being at insignificant levels to those who are not in the "loan broker" business.

In order to run rates to 0.5, it will require prices that run another 10x, and then rates will run to 0.05 and prices will run to 100x, ad nauseum, all while the hedonists are keeping "inflation" tame, and completely screwing everyone who is not "a player". We've already seen that nearly 50% of RE purchasers are speculators buying second homes and "investment property". That's the point where sheep begin to be historically sheared.

The FED, et al, are relying on the hope that all of us have been well progrgammed to buy into the "Good Shepherd" stories, expecting they will fill the role. One of my favorite things (as Topaz referered to) about that story is they always leave out the part about "lamb chops".

Remember also, as the Asians masterfully take the "market reins" away from the fat and sassy American sheep dogs, that "dog" often ends up on their dinner plate as well.

GoldiloxESF DX traders#1346258/5/05; 08:09:14

Well, it's Friday, and they finally showed up! Quite the roller coaster over at the Forex.

CNBC: "Home builders are under pressure today" - looks like some others are beginning to doubt the "forever" growth rate in RE.


Mr. Goldilox,
FYI,I have not been mixing anything with my morning coffee.
With all do respect, if your mathematical principles,indexes,rational criteria with regards to the market arena are as concrete as you profess and imbalances NEVER continue forever, then it should make sense that you can state/project levels at which these imbalances end as horrible as JOHN LAW, TULIPMANIA and SOUTH SEA CORP episodes. Were there derivatives back then as today? If debt levels are NOT insignificant, when do they become trully significant (exact amount?????????????)? How much longer is the ASIAN losing situation tenable? I will patiently wait for your response, especially the FACTS and FIGURES regarding when this house of cards falls! Remember exact quantifiable numbers/levels for disaster only!

Gandalf the WhiteSir Goldilox ---#1346278/5/05; 08:56:03

PLEASE note that the MAXIMUM top $ level is now CAPPED at 88.00 !!!

GoldiloxFacts and Figures?#1346288/5/05; 09:18:03

@ Hoosier Goldbug,

I listed some history, facts, and figures and you already poo-poo'd them. Where are yours? There is too much "mortgage broker sales hype" in your post for me to buy in.

I recognize your resistance to any doubts about the RE pyramid scheme, as you may be too deeply embedded in the forest to see ought but trees, but the bigger picture too closely resembles the historical scams already noted to be ignored.

You're asking me to predict the exact speed and location of the of a "train wreck", which no one can do. At the same time, I try not to "play on the tracks". We're hearing the train whistle in the distance, and the point of impact will be too late to act . . . all the more reason to pad the stash in this low-POG climate.

Derivatives are not the miracle many assume, but more likely to be the "straw that breaks the camel's back".

Even Buffett (Warren, not Jimmy) has expressed serious doubts about the ability of derivatives to perform in a more volatile environment.

Perhaps "Cheeseburger in Paradise" is not the lasting legacy we hope!

GoldiloxDX Cap#1346298/5/05; 09:21:31

@ Gandy,

It certainly seems that 88 is a powerful battle ground. But, as the ESF seems to have just arrived on the scene, after a few days of lurking, it'll be interesting to see their resolve.

With anohter DOW down day, they might have their hands pretty full already.

White HillsReal Estate Bubble#1346308/5/05; 10:22:53

Sir Goldilox, I couldn't agree with you more. Some years ago in Orange County, California there was a pyramid scheme raging through the community. Even when the authorities shut down the operation as a illegal pyramid scheme people went to court to fight the action. They were so sure that the the scheme would work that they joined together to fight the action in court. No matter how it is spun, what we have is a hybrid of a pyramid scheme enclosed in a REAL ESTATE BUBBLE.And, like all pyramid schemes, it requires more and more investors to come into the scheme with mathematical progression.
As to the timing of the collapse of the BUBBLE, it is difficult to predict as the one thing we can't know is the length of which the Powers That Be will go to keep it inflated (with FRN $). For 25 years there have been predictions concerning the economy of this country from a radical currency reform to a great depression, and just because they haven't happened may just be a matter of timing. Nobody can predict the timing of any economic collapse. Like all great events in human history they all come as a shock to the people of the day.
Regardless of all of that I agree that, whatever happens, boom or bust the yellow stuff will see you through. White Hills

GoldiloxRE Bubble#1346318/5/05; 10:51:21

@ White Hills,

We can agree on some things and disagree on others. It's nice to know.

Dang, this discussion thingy is awesome!

I have a conference call coming up and need to disappear for a short stretch.

Have a golden day, everyone


P.S. - Gandalf, keep an eye out for those nasty ESF gnomes! I smell a bear trap coming.

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DruidHOOSIER GOLDBUG (8/5/05; 05:08:37MT - msg#: 134621)#1346338/5/05; 11:42:18

Druid: Sir HG, you cleared the cheap seats with this one. Over the years the consolidation and integration of the financial services industry has effectively designed a cartel of sorts that, albeit through a complex route, eventually answers to the Fed and Treasury.

You are correct in that they are the game and the game is paper in all its forms and at all costs. We haven't even approached the power and speed of the digital printing press in its modern day form.

The endgame is to maintain the status quo in all its paper forms, the perception is "Bull vs Bear".

HOOSIER GOLDBUGREALITY CHECK!#1346348/5/05; 12:29:58

Mr. Goldilox, Mr. White Hills:

Gandalf the WhiteGoldi#1346358/5/05; 12:50:22

Youse are soooooo smart !

contrarianPainting themselves into a corner#13463608/05/05; 13:01:06

I would say that the Powers That Be (PTB) are slowly painting themselves into a corner, pulling all the levers possible to ensure a "safe" landing, which will never happen. They are exhausting every possible option, raising interest rates, changing income repatriation laws, jawboning, etc., etc., but nothing is working. Long term rates keep staying low, which is a contradiction (and of course because of our bankers Japan and China). But the bankers will eventually tire of the game, and are starting to. The winds of change will consequently blow back in our faces, shattering the real estate house of cards worldwide, with devastating implications, as real estate has always been considered a safe last resort, and concomitantly a source of wealth and leveraging for further wealth. I know just as the stock market collapsed (and will return to collapse), it was just a prelude to the even greater real estate collapse. Nothing new here! Of course you will never hear this from a broker!

When the wheels of the runaway train reverse, they will go just as fast if not faster than the prior forward motion (like the stock market), and of course overshoot the mark to the devastation of many. Just like stocks that bounce up only to bounce down to lower than justified valuations.

As with global warming, the current conditions will ensure an extreme result, and the scouring of the maximum possible ranges, as a river carving a canyon. Like the frequency of hurricanes, droughts, floods seems to be increasingly a result of a large increase in average global temperature, so will the economic winds blow--and severely so.

The question is when will this happen? It's always longer than you expect, yet I have heard middle of next year. Rickenbacker had some good musings on this at And it might not happen overnight, but will still catch people by surprise. There will just be no buyers! It won't happen like stocks, since it's a different market, but the result will be the same. House that were purchased for $500,000, of sold, may only go for $300,000 or less, etc., etc.

We are living in very interesting times!

Topaz@Hoosier. The Ghost of Bubbles Past.#13463708/05/05; 13:39:27

Thankfully we can opt not travel on the Train ...just in case ;-)
As with all "activities" in life, there are risks ...usually directly proportional to rewards. We can hop on and off the Train at will, but whilst "aboard" we clearly run the "risk" of being involved in a Wreck.
I don't believe running through the Carriages declaring "this Train is NEVER going to crash" is necessarily the actions of a reasonable train traveller.

A definitive "time-frame" is as impossible as trying to "prove" a Negative or, in this case determining a Date for a Deflation ...It will be WHEN we(collectively)decide it ...or when the Have's en-masse realise Capital erosion is not being adequately compensated for by the IR spectrum.

We can't expect the Baristas, Burger-Flippers and miriad other marginal "service providers" ...which are an ever-increasing component of the "employment" stats, keep lining up for arguably more dubious R/E proposals ad-infinitum can we?

GoldiloxLIMITS of Excess#13463908/05/05; 14:02:30

@ Hoosier Goldbug,

Stop yelling. It doesn't become you at all.

Maybe there are quantifiable limits but I just don't happen to know them. If I did, I wouldn't hang out here trying to discern them with other esteemed posters.

Did anyone KNOW the limits of the 1929 SM crash before it collapsed? Did anyone KNOW the limits of John Law FIAT before it collapsed? Did anyone know the limiits of the Titanic before it crashed? They sure were there, but not identifyable prior to the events.

Your "quantifiable limits" question is like asking someone "when" they quit beating their wife. Any answer is either incriminating or lying.

Bottom line is, I can say things are gonna crash and you can say they aren't. We'll only know when at some arbitrary point when it has or hasn't happened.

History has demonstrated that EVERY example of hyperinflation so far ends in failure. "Faith" just isn't enough validation for this engineer - especially "faith" in a bunch of banksters trying to sell me a "bill of goods" .

If there is a 50/50 chance for each of our hypotheses, I'm gonna prepare for the worst and "hope" the best, as this strategy has served me well for many decades.

HOOSIER GOLDBUGREALITY CHECK#13464008/05/05; 15:03:16

If you are in the train-wreck group, there MUST, not maybe, be quanitfiable LIMITS!!!!
The time frame can also be predicted. It is when those LIMITS are EXCEEDED!!!!
If you are in the NO train-wreck group or IMPROBABLE train-wreck group, there are no limits, as policies (FED, TREASURY, CENTRAL BANKS, ETC.) are engineered for the outcome/manipulaton as required to keep the "GAME" going. LOOK AT WHAT IS GOING ON TODAY WITH RESPECT TO THE MARKETS, THE WAY WE CONDUCT BANKING, BUSINESS, ETC. This is the group Mr. Greenspan is the leader of, including of course other prominent central bank figures, treasury officals, etc.. They have means to keep this "GAME" going, that most cannot even comprehend or even imagine. The irrationality of the markets should be our clue to this amazing fact. THIS TIME FRAME CAN ALSO BE DETERMINED/QUANTIFIED with regards to collapse. IT IS CALLED "NEVER"

TopazG'lox#13464108/05/05; 15:08:57

A "Date" might be elusive, but nominating a "Day" is not too difficult.
The Holy Grail in Nerdsville (where YOU have spent some time if memory serves) has NOT been the next whizz-Bang Computer program ...Nooo, it's the Ultimate Lines of Code that will render this Cyber/On-Line quazi existance we all take for granted ...USELESS!!
Now, as in the past our material existance has been overshadowed/clouded by several hundred Strategic Nuclear Warheads which, at any point in time could be untethered, wreaking havoc around the world.
Imo, so too do those elusive Lines of Code sit idly in readiness to be deployed ...rendering our "current" existance unworkable.
Of course, that bloody al-queda would cop the Flak, as our now discredited "mainstream" media would again hold sway.

The Day, we could define as ...the Day your machine keeps returning "Error-Page can not be displayed"...
...over ..and Over ...and OVER!

TownCrierEuro may become top reserve currency by 2022--study#13464208/05/05; 15:11:40

WASHINGTON, Aug 5 (Reuters) - The euro could supplant the dollar as the world's dominant reserve currency within 20 years if Britain and other European Union countries adopted the unit and the greenback continues to slide, a recent study showed.

The paper, released by the National Bureau of Economic Research this week, outlined two key criteria for a change of the current status quo -- where about two thirds of world's central bank reserves are denominated in the U.S. currency.

First was the scope for expansion of the euro zone...

Second is the role of U.S. economic policies and the risk that they might undermine confidence in the dollar through inflation and depreciation.

"We ... find that even if some of these countries do not join, a continuation of the recent depreciation trend of the dollar -- were it to occur for whatever reason -- could bring about the tipping point even sooner," the study's authors wrote.

As world central bank reserves, particularly from Asia, have rocketed over the past three years as downward pressure on the dollar has mounted, speculation has grown that central banks may soon wish to diversify away from dollars.

Most economists reckon the euro is one of few sufficiently large and liquid alternative currencies.

The most recent data shows about 64 percent of the $3.81 trillion of world currency reserves are held in dollars and 20 percent in euros. But signs of diversification are mounting.

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

Why do these monetary "brainiacs" forever only indicate an either/or scenario -- that is, the world's principal reserve asset is EITHER the dollar, OR the euro.

Nuts to that. It would be a classic case of "out of the frying pan, into the fire".

Sure, to some extent the euro area politicians would enjoy the cheap borrowing privileges that would result from this switchover, but complaints would also arise from the export sector due to the artificial relative strengthening that would result for the euro's exchange rates with other currencies.

A more politically attractive (and thus more likely) outcome would be a transition toward gold under a mark-to-(physical-basis)-market pricing paradigm as the principal reserve asset. Meanwhile, the international role of the euro would
be as an invoicing numeraire to offer a stable alternative to the rapidly depreciating dollar.

In addition to gold as the principal reserve, central banks would continue to hold various foreign currency bonds, but likely only in quantities that are in proportion with international trade levlels among these various countries to serve reasonable expectations for liquidity.

Bottom line: in the role of principal reserve asset, gold could become priced "to the moon", and yet Mother Nature's monkeys won't ever complain about the uncompetitive effect being done to their export sector.

And so it shall be done... through the appropriate transition period targeting smmmoooooooothness as much as possible. Or not, if someone wants to get nasty (and hasty) about it.


GoldiloxTrain Wreck#13464308/05/05; 15:22:27

Of course there were limits BEFORE the train wreck, so why didn't the engineer know them? If he did, there should never have been a wreck. Too simplistic.

Accidents happen because people CAN'T juggle all the mitigating factors 100% of the time. Often, they are blind-sided by one or more events. One visit to "traffic school" and their yucky filmography demonstrates that.

You keep insisting we all should KNOW these limits before hand, and that's just plain fantasy! But we SHOULD be able to see that EVERY SINGLE previous hyperinflation has imploded from its own stench! Does the fact that ours will be on a greater global scale render us immune to the effects, or just build the pimple's "pop" to greater proportions.

We seem to agree that the problem is the bankster's rigged system, but we obviously aren't going to agree on whether the supermen at the FED can maintain their smoke and mirrors in perpetuity.

You seem to have unyielding "faith" that Sir AG, et al, will be able to flawlessly execute forever. I lean on 4000 years of recorded history that suggests otherwise.

GoldiloxUltimate tech limits#13464408/05/05; 15:45:37

@ Topaz,

Ah yes, the infamous "Blue screen of death!"

I have, and continue to spend many an hour in the search for increased computer function and security. In fact, I am currently on staff hosting a World-Wide conference on ILM (Information Life-cycle Management) and Sarbanes-Oxley data compliance in February 2006.

Whether it's OS overhead, security, feature creep, etc., SW always overtakes any and all performance enhancement of newly designed HW. It's all part of Moore's Law.

I always laugh at folks who think they can buy a Win98 vintage notebook and run efficiently with all the latest MS bells and whistles intact. It's not long before they are cursing their choice and crying for help! UNiX platforms exhibit the same issues. The internet, rich html, and JAVA have added even another level of sophistication for any machine to process.

Every computer I ever bought was the fastest, most powerful graphics engine of its day, and ended up feeling like a 1956 VW after a few rounds of SW upgrade, choking on its own I/O, DRAM, and MHz constrictions.

By the way, we've been assured that the Y2K boondoggle has abated, but one visit to Symantec will remind a person that threats to smooth operation over the internet are very real and resource-intensive to protect against.

GoldiloxFed G.19 Consumer Credit Disaster#13464508/05/05; 15:54:57


"Holy cow, Market Man, did you see that?" asked Fed Boy.

"See what you alarmist, paranoid nutjob?" replied Market Man.

"The Fed just released the June Consumer Credit report and it shows the annual rate of change for Consumer debt climbing at 11 1/2% annualized for revolving debt and 6.5% annualized for non-revolving debt," said Fed Boy, pointing at the Fed's latest online confessional released a mere one hour before market close - which they tend to do on bad news days.

"Nothing to worry about, like I said, you little twit. It's all just the Joker trying to play another nasty trick on us," cautioned Market Man.

"You mean the Joker who still calls himself Alan Greenspan?" asked Fed Boy.

"Shut up or I'll see you get sent to Mauritania to fight for the neocon's next oil. Now help me buy some calls to keep this thing from tanking in the final few minutes of trading today."

"You think that AP story about job growth 9-minutes before the bell will help?"

"Shut up and buy calls, twit. Hey...who's that guy with the laptop over there furiously typing?

(boom, kapow, socko @#$%^&*)


George's snse of humor is somewhat hyperactive today, as we witness just a little more financial "collateral damage."

USAGOLD Daily Market ReportPage Update!#1346468/5/05; 16:04:04">
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

August 5 (from MarketWatch) -- Gold futures closed modestly lower Friday, after a strong-than-expected U.S. payrolls report provided a boost to the dollar and weakened demand in the metals market, but prices still logged a gain of $7 an ounce for the week.

COMEX December gold contracts closed at $442.80, down 90 cents for the session.

"The precious metals markets are reaching short-term overbought levels," said Dale Doelling, chief market technician at Trends In Commodities. But for the week, the contract added 1.6% after having closed Thursday near $444 -- a level not seen since June 29.

"With the dollar strength waning and gold prices having rallied sharply, gaining $20 since mid-July, don't be surprised to see a short pause," Doelling said.

Strength in the dollar against its chief rivals Friday weighed on gold prices. Traders read the stronger-than-expected July payrolls report as keeping pressure on the Federal Reserve to make further increases in U.S. interest rates, with a hike widely anticipated to emerge from next week's meeting reviewing monetary policy.

Even so, Doelling believes that "we're now in the next leg down in the dollar and the precious metals markets are ready to resume their advance that began back in 2001," he said.

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

mikalCountdown?#1346478/5/05; 16:10:15

Could Terrorists Hit US With a Nuclear Suitcase? - August 5, 2005 - FMNN Staff
The conclusion seems to be WMD of VARIOUS sorts,
circulated through or originated within the borders,
may or may not be used to extend the Afghan or Iraq conflicts to a different front for example.

TownCrierFOCUS: Gold Bulls Say Long-Term Outlook Turning Positive#1346488/5/05; 16:12:17

SYDNEY (Dow Jones)--Despite unconvincing near-term chart patterns, gold's long-term prospects are brightening as those of the U.S dollar darken, according to market participants.

Spurred by its traditional inverted correlation with the dollar, gold has gained 5% since mid-July but has been making progressively lower highs this year and is struggling to break resistance around US$440.

Nevertheless, some market watchers say the metal can hit 18-year highs of around US$500 by year-end on a combination of macro-economic and industry-specific factors.

Reports overnight that Russia will cut dollar holdings in its currency basket and Middle Eastern oil proceeds are being converted from dollars into euros add weight to the argument that the dollar's days as the world's reserve currency are numbered.

..."We believe people are starting to question using the dollar as a store of wealth and will look more and more at tangible assets like gold," said the firm's senior analyst Matthew Newham.

Newham also expects more cases of "petro-dollars" being converted into hard assets, which last happened on a grand scale in the 1970s when sky high oil prices helped send gold to an all-time high US$850.

Fat Prophets expects gold prices to return to those levels within three years.

Eventually, however, countries with large U.S. dollar reserves, such as China and Japan, are expected to look at gold as a way of diversifying reserves...

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

Finally, somebody is getting it right out there in media-land.


Topaz@TC#1346498/5/05; 16:14:54

Freedoms just another word for nothing else to "choose"...
...or better put, "you can choose ANY colour as long as it's a shade of Grey"
So it goes, our choices are dictated to us ...Rep or Dem? Christian or Muslim? Frying Pan or Fire?

Don't you just love Freedom!

TopazSilver delivery.#1346508/5/05; 16:45:26

As curiosities go, this probably doesn't rate but on a 9 down day, Ag shows OI @ 116 and 116 Deliveries. Not of itself odd but in a Non-D month, I can't help but feel this is related to July, and MAY indicate stresses in the Physical Ag pits.

Where's that Rich when we need him!

GoldiloxKris Kristofferson Lyric#1346518/5/05; 17:41:13

@ Topaz,

Except the lyric goes,

"Freedom's just another word for nothin' left to LOSE.

Nothin' ain't worth nothin, but it's free."

Yours is interesting rhymology, but a different connotation perhaps.

Topaz@G'lox#1346528/5/05; 20:23:17

Yup, intentional lyric warp to better fit the subject.
Having recently acquired an iPod, I enthusiastically set about filling it up with all the favoured Songs of my 50odd year life.
Janis Joplin's "Bobby McGee" was but one of several hundred "favourites".
Needless to say, after a week the novelty wore off ...I MAY load it up with a French Lesson next ...or perhaps Mandarin ;-)

PRITCHORichard Russells Latest Comments - - - ONLY The Last Sentance Is Positive ! #1346538/5/05; 20:31:24

At age 81 RR is an icon & well worth listening to. He has over 10,000 subscribers world wide. See Link.

SNIP -- (From the opening)
August 5. 2005 -- I have five kids, and I'll tell you the truth, I worry about their future, not because of their abilities, but because of the way things are going in the world. Consider the following -- The US is a great country, but I think it's being run by a bunch of, well, I hate to say it, but I think it's being run by a bunch of stubborn, wrong-headed people. "We're at war," announced the President yesterday, but it didn't have to happen. I was against attacking Iraq from the beginning. I thought when Congress avoided it's duty and turned the decision to go to war over to this gung-ho President, that was the first mistake, and it was a huge one. The first mistake tends to lead to the next one -- and the next. So the situation just deteriorated from there.

Now Americans are being killed in Iraq every day. And our government releases no statistics on the thousands who have been wounded. Meanwhile, the insurgents are getting stronger, and their weapons have become more sophisticated. The war is costing the US over a billion dollars a week, but we have a solution. We're going to turn Iraqis into good soldiers, and they'll learn to battle the insurgents. Furthermore, the US is pressuring the Iraqis to come up with some kind of a constitution -- the faster the better. I'll stop there. Just put me down as thinking the whole Iraqi thing is a gathering disaster.

The US continues to run huge deficits in its trade balance, its current account balance and its budget. I see no end to this. Our creditors have to be looking at the US and these deficits, and wondering how long the dollar can remain a reserve currency. How can the world's biggest debtor be producing the world's reserve currency? It doesn't make sense, and now we're seeing other nations quietly "diversifying" out of dollars.

Meanwhile, China and Russia have joined forces, and it's clear that their goal is to clear the US out of Southeast Asia. Furthermore, the two nations that the US cannot bully both have nuclear capabilities. I'm afraid that we're turning China into an enemy, and this will be a major mistake. The Chinese and Russian want us out of Southeast Asia, and the Muslims want as out of the Mideast. Sometimes I think the world no longer loves us.

The US savings rate has collapsed to just slightly above zero, which means that this nation is in a very weak position to weather any emergency. And that worries me. The general attitude here is -- "I want it, and I want it NOW." As for saving for the proverbial rainy day, it's "What rain, dude, it ain't never going to rain again."

The US public seems to be out in spaceville. The younger set appear to be celebrity happy. I mean it's almost weird, Americans are dying every day in Iraq and Afghanistan, and every week a new celebrity magazine hits the racks of the grocery stores. Clubs are springing up everywhere, and the good times are rolling. Even high-price gasoline hasn't slowed America's drivers down. As far as I can see, the freeways here in San Diego are choking with cars. Where the hell are they all going?

Look, maybe I'm just a stupid old crank. Maybe I should lighten up and just smell the roses. But honestly, I'm worried.

Of course, I lived through the Great Depression, and I lived through World War II, And I've lived through a lot of good times, and quite a few bad ones. So I say to my psyche, "Leave me alone, get off my back." And I answer, "I'll try, I'll try. Smile Russell, keep on smilin'."

And then again, maybe all my worries are misplaced. Maybe somehow the problems the US faces will be solved. In the end, I've learned to trust the wisdom of the market, and so far, the markets haven't told me to run for the storm cellar. But just in case, I continue to suggest that my subscribers keep some portion of their assets in the only true form of money -- gold.

Topaz...just for fun G'lox..#1346548/5/05; 20:32:35

...I Googled "Freedoms just another word"
Wow! Bush-Bashin' is becoming a very popular international pastime eh?

PRITCHO@HOOSIER GOLDBUG -- - Re Housing Bubble etc#1346558/5/05; 20:59:08

Saw & read an article titled:"The Housing Bubble" (Lasco Report)over at a neighbours site. While not definitive he explores some interesting angles & most importantly tries to answer:
*Is this a bubble, and
*At what stage of the mania are we in if in fact we do have a mania?

The article also looks at other Markets inc GOLD.A good read ! See Link.

GoldendomeSir Pritcho: Again, a good Russel post#1346568/5/05; 21:13:34

He boils things down very nicely and reflects certainly what more citizens are thinking. The older we get, the weirder is current reality. We enjoy your Russel posts.
2023My 2 cents to the discussion earlier#1346578/5/05; 21:16:08

I try to see the markets, including real estate, in terms of currencies. In the US it's the US buck. I my opinion a lot of the movement in the markets these days is due to the decline of the dollar. This may be a bit of an oversimplification but you have to admit that the almighty US dollar has lost some ground over the past couple of years to other currencies including gold and silver. Part of the real estate 'boom', and also other rising markets, is a currency issue. Just look at oil, as the dollar declines the producers want more dollars for the black gold.

Have a great weekend all.

White HillsTrain Wreck#1346588/5/05; 21:57:07

Sir Goldilox, Damn, how do you make such sense when talking economics and be so wrong politically? Could be I am wrong--Nah. White hills
GoldiloxSense?#1346598/5/05; 22:54:54

@ White Hills,

You think I talk sense? You must be having a "mellow day".

I just imagine the same tricks are being played by the same people in both arenas and come to the "logical conclusion" that if they think they can pull it off, they probably are!"



GoldiloxMatt Simmons on FSN#1346608/5/05; 23:21:18

Jusr a reminder to all you Puplava fans that this week's guest is Matt Simmons, author of "Twiight in the Desert".

Get the popcorn popping and the libations ready.

contrarianSundry Thoughts#1346618/5/05; 23:44:56

I live in NYC and have noticed something confirmed by various people in my wanderings around town, etc. It seems like the rich are getting richer and the poor getting poorer. There are expensive Whole Foods stores opening in Massachusetts across from my mother's house, one down the block from where I live in NYC, and I just saw a new one in Union Square in NYC. These are very expensive supermarkets catering to the well to do. We are becoming a society of the haves and have nots. This is not to mention the plethora of luxury apartments building up in Manhattan, practically on every block on the West side, where $2000 a month is now considered reasonable. The middle class is disappearing, and we are becoming a nation of either pencil pushers with advanced degrees OR burger flippers/checkout clerks working for minimum wages. This is obviously because we have mortgaged our future to China, literally shipping our manufacturing plants to Shanghai.

Also, regarding the nuclear thing, I think is is not COULD but WHEN and WHERE. Even the US govt acknowledges the likelihood of a nuclear event on US soil within the next 10 years.

And the celebrity obsessions are a sign of a sickness in our society where frivolous pursuits are assigned value, while the real deal is given short shrift. Since the advent of film in the early twentieth century, there has always been a cult of celebrity (versus a cult of accomplishment which was the standard before), but it seems detrimentally extreme now because it distracts from truly important things like the future of this country. Such as the continued laissez faire attitude about NAFTA, CAFTA, and all such schemes to create giant sucking sounds of jobs disappearing from our soil.

And the lack of sense of accountability working for the mutual good among most of corporate America, and rather an every man for himself attitude--as evidenced by the obscene salaries paid to CEO's and the disparity between that and the average worker's wage. Such was not the attitude 50 years ago, or at least before the civil war, where someone like Henry Ford wanted to pay his workers well so they could afford his to buy his cars.

And the Republicans have abandoned their traditional conservatism wrt spending, and are just as bad as the Democrats. Truly it's everyone feeding at the trough while there's slop to be had, and getting in gulps as quickly as possible before the slaughter.

SundeckHousing - this from The Economist...timely discussion#1346628/6/05; 00:34:57


NEVER before have real house prices risen so fast, for so long, in so many countries. Property markets have been frothing from America, Britain and Australia to France, Spain and China. Rising property prices helped to prop up the world economy after the stockmarket bubble burst in 2000. What if the housing boom now turns to bust?

According to estimates by The Economist, the total value of residential property in developed economies rose by more than $30 trillion over the past five years, to over $70 trillion, an increase equivalent to 100% of those countries' combined GDPs. Not only does this dwarf any previous house-price boom, it is larger than the global stockmarket bubble in the late 1990s (an increase over five years of 80% of GDP) or America's stockmarket bubble in the late 1920s (55% of GDP). In other words, it looks like the biggest bubble in history.



I haven't read all the preceeding forum discussion on housing, but I noticed this rather timely article in The Economist that may be of interest...(don't think anyone has posted it so far).

Just a quick comment: when people refer to the "value" of housing increasing, what they really mean is the "price" increasing, since mostly the value stays relatively unchanged. It is common for people from the bottom to the top of the human economics fraternity to confuse "price" and "value". (Value is what you get from your house...such as shelter, prestige, convenience, social interaction, etc.) In most cases, when the price goes up, what is really happening is that portion of your currency which is exchangeable for housing has depreciated.


SundeckCaveat Emptor#1346638/6/05; 00:45:40

Oh...just one more thing...I want to draw attention to Chart Number 3 in the article from The Economist...a comparison of average (Australian, UK and US) housing price trends with those in Japan, that have been falling for ten years...

Difference? Well...the FED holds the BIG handle (which I think is the point that Sir Hoosier Goldbug is making), but will that be enough???


SundeckWealth preservation: Indians use gold...Ausies, Brits and Americans use housing#1346648/6/05; 01:54:25

Oh...oh...yet one other point...

Refer to my post msg#: 134569 where I made the observation that the rupee has depreciated about 50% in the last 10 years against gold, about the same factor as housing has appreciated (in price) in the USA, UK and Oz. If one were an Indian woman getting married, it is unlikely that one would own a house (which would permit the woman to preserve her wealth in countries like Australia, the UK and the USA). Instead, the women hold gold which does the same job, but in more practicable sized allotments. (I wonder what proportion of women in Australia, the UK or the USA hold a house?? Well at least, they probably hold a sizeable interest in a preserve their wealth.)

It seems to me that holding gold (especially if you live in the USA) is going to be a sensible thing "going forward"...more manageable than owning a house and probably with more upside in the present environment...

The same observation probably holds for Australia going forward. The Ozzie dollar has depreciated more rapidly than the US dollar over the last forty years and I suspect it will continue to play poor-relation to big brother as big brother gets his come-upance (or go-downance!!).

(Not investment advice, just a casual observation.)

SundeckHousing versus Treasuries#1346658/6/05; 04:21:36

...and still one "last more" point(as my grandson used to say when he was two)...

If you live in America and are in the housing game....that is, you have owned/buying one or more houses for many years or have jumped onto the present boom a year or two ago, then you are probably doing a wise thing to preserve your wealth. If you were a foreign (non-american) holder of treasuries, then I suspect you would have done not quite as well, when you repatriate your money, as you would have if you had held US real estate. I suspect this is largely intentional on the part of the FED...force a housing bubble in order to preserve the wealth of US citizens holding real estate (few foreigners will want to hold real estate in another country), while selling treasury holders down the drain... clever eh? Wonder how Central Bankers in China, Japan, Korea etc are feeling with all those "treasuries" swelling their hip-pockets and watching the effects of inflation (swelling money supply) first manifesting in the real estate markets, unable to buy US assets (like energy companies) and knowing that the dollar is about to resume another down-leg... What to do? Too late to buy US real estate. US stocks overpriced. Where is the next bubble???


OvSSundeck#1346668/6/05; 07:56:53

Now where did the FED learn that?
From the penny stock operators in
O.K., I didn't say that... OvS

Gandalf the WhiteSir Sundeck ---#1346678/6/05; 08:55:32

Perhaps like the Indian and Chinese people, they might THINK of GOLD ?
Would not that be interesting ?

USAGOLD / Centennial Precious Metals, Inc.A world of gold at your fingertips...#1346688/6/05; 11:11:31">gold -- a global calling card
GoldiloxMore RE Bubbliciousness#1346698/6/05; 11:54:44

Just extrpolated from my own fairly fuzzy crystal ball.

In the late 1970's, Japan repatriated its excess US$ into RE assets, to the point where the US populace saw one of the first RE bubbles supported by foreign monies. Pebble Beach, SF, NY, and Honolulu hotel and business properties were highly desirable targets. Inflafla soared, as did property prices.

Once the froth died down with Volker's "Scrooge" policies, property prices dropped - not to recessional levels, but 10-20% in the hotter markets.

Those who bought in with traditionally higher down payments saw their equity decline, but managed to hold on through the downturn. Some localities even readjusted property taxes downward (almost unheard of) to ease the pain. Foreign specs and the most highly leveraged backed off.

This forced the most highly leveraged players to decide whether to spring for more cash or drop out of the property and wipe the slate clean. San Jose, for example saw ten years of very high commercial vacancies, only finally mitigated by the Internet bubble, with vacancies returning after that bubble burst.

This current RE bubble is driving prices up 25-30 per year in some high demand markets (especially coastal properties). Three or four years of this doubles the price for those who entered the market early. Those who entered late, especially with backwards LTVs and ARMs, are at great risk for any correction.

A 25-30% "cooling off" correction (one year's growth lately), will hammer the zero down, ARM, and new purchasers - about 1/4 to 1/3 of new buyers - sending their properties back to the foreclosure market, and their paper into default.

Perhaps, through even more liquidity, the RE and loan markets can handle this correction, but at some point, one must wonder if this reaches HG's vociferously demanded "quantitative limit".

Historical bankruptcy rates have been low enough to re-absorb, but current numbers are creeping up from there. Any upward pressure on rates, or downward pressure on prices, and a much larger proportion of the market will experience the pain, as this is the last vestige of "savings" in the US.

I know some have said "the manipulators will never let it happen", but my recollection of history is that they've let much worse than this happen. Western financier's and corporate moguls (Rothschild's, Ford, Rockefeller, and Prescott Bush) directly financed Hitler's Third Reich, under the excuse that Germany "needed" business recovery to pay its war reparations. Japan attacked Pearl Harbor in direct response to the US cutting off oil supplies (not completely unlike the CNOOC debacle).

What might they "let happen" to repair any financial "accidents" on the horizon?

CometoseOIL / Gold #1346708/6/05; 12:05:50

Matthew Simmons on FINANCIAL SENSE NEWSHOUR summarizes the findings that are in his new book today .........
It's quite an enlightening segment and ..........
he speaks to a couple of snaffu's in our current global situation with respect to oil supplies......

1. Saudi Arabia has been lying about the amount of oil it has......because it is now pumping 18 million barrels of water into its fields to get out 12 million barrels of oils ...YES THAT IS every day ..........

this eventually causes a collapse in the oil structure of the field where the only other alternative is to use an alternative technology toward oil recovery which is LIFT...

the amount of oil that one can recover is much smaller and at a much more expsensive cost of recovery ...

2. We have a refinery problem ......

we can't get enough oil refined to accomodate our current consumption .....and as time passes from now through November their will be a respit from the high demand time but by WINTER because of the severe demand draw downs during the winter months ........we could develop a "2-5 million barrel per day shortage of oil" ( I assume this means refined product) . THIS WILL CAUSE OIL TO RISE PRECIPITOUSLY IN PRICE......

Additional DETAILS........From 71 - 79 the global demand for oil went from 45 million barrels a day to 66million ...

While that was happening ....we had what is called an OIL EMBARGO .......where the OPEC nations just said PAY UP ..or we are cutting off your supply .....THEY CUT BACK THE SUPPLY DELIBERATELY ......

OIL WENT UP in PRICE did GASOLINE.....and that CAUSED RAMP UP IN INFLATION .......throughout the economy .

At this time the stock market crashed..going from 1000 to 700 a 30% drop ......

GOLD WENT FROM 30 to 900 dollars an ounce ....TODAY THE FED DEFICIT and TRADE DEFICIT are far worse ...but with the closing of the gold window .....the rest of the world decided to price our US DEBT SECURITIES OBLIGATIONS in a mark to market strangle lock with the price of GOLD ....

IF what MATT SIMMONS states in today's broadcast comes to pass this winter......with regard to distillate problems.

STAGE TWO OF THE GOLD BULL will unfold in a dramatic and efficient fashion ........

He said that if we develop a supply deficit with regard to winter distillates in the amount of 2-5 million barrels a day ........that OIL COULD GO UP BY 5 TIMES ,,,,NOT DOLLARS PER BARREL .....5 TIMES THE PRICE IT IS NOW....
HE INTERRUPTED THE HOST OF THE SHOW to CORRECT JIM PUPULVA to make it clear ....he was not referring to a 5$ rise in the price of oil but that the price could easily rise by five times...

THis event .....THIS SUPPLY SHORTAGE that may very well occur ........will be tantamount to the SAME EMBARGO CONDITIONS THAT WE HAD IN THE 70's

IF we have a reproduction of THE EMBARGO waiting in the wings ......and extrapolate the multiples that happened in the seventies......again to accompany the unfolding scenario's the math ....

70's low $35 dollar gold goes to $900.00 ; that equals a multiplier of 25 times...

If you want to use the 2001 low of $250.00 per ounce as the bottom price and apply the same multiplier for a comprable effect of the same scenario unfolding this time as that will be happily suprised to know that the possilble top this time of this stage two of the bull market may be $6250 bucks per oz.....

The reason I refer to STAGE TWO of this bull market only is because many think that GOLD will reach a new plateau here and not return .........


In the 70'S when the embargo happened , THERE WERE HUGE RESERVES STILL LEFT in the ARAB oil Fields.....

IT IS NOW BECOMING PUBLIC KNOWLEDGE ,,,that today the SAUDI OIL FIELDS have reached peak oil ...

WITHOUT additional huge oil finds to supply the earths global energy needs or alternative technologies development to meet the new and growing needs of the future ........this is a terminally grave energy situation ....

When the media decides to disseminate this info .......
it will have become a crisis........THAT WILL DRIVE THE PRICE OF OIL TO????? and the price of GOLD to perhaps a new plateau of $6250.00 per oz....and silver ????????

Cometosethe realm of possibility #1346718/6/05; 12:16:26

I should say that based on the previous posts ....possibility of unfolding or even a partial occurence thereof....

I expect that the inflation that is unleashed on the system .....

will cause the STOCK MARKET to have a fall and that the selling is already beginning because of the actions of the FED ....and that continued action combined with any parrallels to the previous MATT SIMMONS SCENARIO DESCRIPTION might drive interest rates skyward and therefor crash the stock market....

If dollars are being traded en masse for GOLD AND SILVER MONEY to protect from inflation due to dollar depreciation ..because of such a more permanent in nature crisis (decribed below) ....THE FED will have to raise intrest rates keep players from dumping dollar denominated assets... If this happens an aside......SAY BYE BYE TO THE BOND MARKET AND THE MORTGAGE BACKED SECURITIES MARKETS.

GoldiloxSimmons#1346728/6/05; 13:09:17

Near the end of his talk, Simmons hits on a very important point that probably is the crux of his latest political incorrectness. . . not to mention that his "critics" are basically all analysts in the employ of Saudi-Aramco.

He makes the statement that Globalism is a very strong culpret in the coming energy shortages and inflations, as better than 50% of the cost of imported goods lies in the tranportation costs. No wonder Nike charges $150 for shoes that are produced in China for less than a dollar. In this case, transportation and marketing make up about 90% of the cost.

Local industries may pay more for labor, but the transporatation savings are likely to make them look more viable as fuel prices continue to rise.

His solution - a massive development effort in alternative energies - at the level of RADAR in WWII - something he says we have basically ignored for a hundred years in our love affair with "cheap" oil.

I never thought an oil analyst would echo my statements about energy!

Oil doesn't have to "go away" or be completely tapped for this to happen. We just need to see that complete dependence with no alternatives is a myopia that fuels many of the geopolitical risks we face today and demand alternatives.

Gandalf the WhiteSir Goldi ---#1346738/6/05; 13:26:14

Did you notice WHERE the US$ ended yesterday "
RIGHT on the 88.00 level !
Sooooo, ALL the dollars that the ESF through at the market yesterday was a total waste !

Gandalf the Whiteoops !#1346748/6/05; 13:28:22

How about "THREW" !

GoldiloxRE bubble - FSN#1346758/6/05; 13:29:46

With all the focus on Matt Simmons' excellent presentation, some time in the third hour of Wrapup with Jim Puplava and John Lefler offers a very detailed examination of current RE bubble risks.

One of their main points is that safety valve of "owner equity" just does not exist in the current upside-down schemes. He thinks securitization of mortgage loans is another ENRON in different clothing just waiting to happen.

Puplava call this the most reckless mortgage lending cycle he can remember and compares it to 1970's Latin American loans for which banks required bail out later.

mikal"Fresh air" currents give gold lift#1346768/6/05; 13:37:40

Pivotal Events - Bob Hoye - August 5, 2005
Excerpt: "Technicals: For the past few weeks, we have been noting that the window for the first "chop" of the summer would close at the end of July. That model was based on the repetitive swings following a year of 52 weeks of bullish sentiment readings. Typically, this pattern held for the first 7 months and this is now over, but the correction seems "close enough".
The July 26 edition of ChartWorks introduced an overview model and this would require about 7 weeks of speculative zoom. One example given was the conclusion of the bull market in January, 1973. The zoom would include homes, industrial commodities, and the stock market. The latter two could reach upside exhaustion by mid-September.
Warnings signs would include the advent of the next phase of credit spread widening and the reversal of the treasury curve to steepening. Providing some anticipation of this is that the UK curve, from the 10-year to the 3-month, has been in a steepening trend since June 8.
Further confirmation of pending exhaustion would be provided by gold outperforming silver."
### Unlike many commodities bulls, Hoye implies that
commodities are part of no small speculative frenzy. This short essay on the life cycle of "parties" offers some clues on why the fearless Fed spiked the punch bowls and what awaits on the classic "morning after".

GoldiloxDX and Gold#1346778/6/05; 13:40:24

@ Gandalf,

It's definitely on my RADAR screen. Speaking of LCD glass, I'm pricing larger screens on because I can''t fit all the info on my current one. Of, course that probably means I'll want a new 'puter, as well! Gotta do my part as a consumer holding up this market - LOL.

Dave Morgan suggests that there is still room for another light correction (to the $420 level) prior to any autumn blow off, and I think he has a point. They're not done wasting our tax dollars (and their illicit ENRON gains) just yet. My crystal ball is still pretty fuzzy!

I'm gonna continue to hold some puts just in case!

mikalGold and Silver technician supports recent outlook on trend#1346788/6/05; 14:18:45

Carl Lofberg on gold and silver. Compares COT positions
to reinforce an expectation, using charts and TA, that
BOTH metals should excel in the medium to long term, if not short term.

968Speech during the memorial service for Wim Duisenberg on 6 August 2005 in the Concertgebouw, Amsterdam#1346798/6/05; 14:33:00

Speech by Jean-Claude Trichet, President of the ECB,
6 August 2005

"Equally, Wim's influence at the European Monetary Institute under the chairmanship of Alexandre Lamfalussy and as President, where the crucial decisions to prepare effectively the single currency were wisely taken, including the decision that the ECB should have all its accounts in euro from the outset, which owed a lot to Wim"

Ten BearsScattershooting while wondering what hapened to Blackie Sherrod.#1346808/6/05; 14:49:59 "If we learn the knowledge of the past and add to it, we are progressing. If we refuse to learn, then society will regress." Education as a lifelong process is the topic of the referenced Charley Reese commentary. Thanks to those who post here for their substantial contribution to that process. A special thanks to Goldilox for the extensive research and informed perspective provided to those of us who are following Charley's advice, and to the proprietor of this site for making the space available. Most of Reese's commentaries are worth a read in my view. "Debt, n. An ingenious substitute for the chain and whip of the slavedriver." Everyone and their cousin appears to be in the mortgage brokerage business. All of the bad debt from over consumption is being loaded into the GSE's. Either the money must continue to depreciate in purchasing power rapidly and allow for repayment with a "smaller unit of measurement", or the tax payers are in for another (much larger) bail out similar to the resolution trust for the S&L's. Additionally, the wages for those "slaves" described by Bierce must increase in order to pay even the interest amounts.

Henry George, nineteenth century maverick economist, made a speech to a group of economist considering granting him some academic legitimacy which contained the following, "Monkeys with microscopes, mules packing libraries are fit symbols of the men, and they are many, who go through the entire education process and come out nothing but learned fools." Needless to say he was not granted the award, A more up to date, but consistant opinion of the profession of economist is expounded upon at the referenced site. "Economists have become a plague as dangerous as rabbits, prickly pear or cane toads. Economists have become the cultural cane toads of Canberra, oozing over the landscape and endangering myriad indigenous species. Not only the economy but also mental health would be greatly improved if we could lift the fog of obfuscation on things economic. The first step is to take economists from their pedestal and to see them as the curiosities they are. The first step to reducing their power is to reduce their legitimacy. How is this to be achieved? First, economists' outpourings should, as a matter of principle, be met with laughter, derision, benign paternalism. They should cease to be employed as media commentators. In the long term they should cease to be hired. Let them be pensioned off and die out. Extinction is a worthy end for a profession whose brief is rotten to the core."
-- Dr. Evan Jones, Economics Department, University of Sydneyh "Economic efficiency means that the "correct people" (those who can afford it) will get the "correct goods and services" (whatever they want). Economic efficiency allocates resources to people who are the most successful at gaining social power. In the economist's ideal world, the rich get richer and the poor get poorer"

Lord Keynes, while engaged early in his career, with statistical analysis of city lighting costs depended upon data gathered by night watchmen who patrolled the streets after dark. His comment went something like this, "We can apply the latest statistical methods to this data, however in the final analysis, our results rely on the data gathered by the watchmen and they write down what ever they damned well please." It is with this skeptical approach that all Government statistics should be viewed. Not only do they record what ever they damed well please but there is a strong interest in making all things look good while holding down any cost of living adjustments based on the cpi for the ever expanding number of retirees

Impoverishment allows people to be "bought cheaply" and therefore easily controlled. The huge immigration from south of border is accomplishing that goal. Almost two centuries ago some of my ancestors were forced to move westward down the trail of tears by the decendants of the Anglo revolutionaries tribe who took over from the British. Now, decendents of the tribe of moneylenders who took over in 1913 are displacing the Anglo's with poor immigrants from the south. Nothing much ever really changes, only the names are different.

spotlightInterest rates#1346818/6/05; 16:09:42

Did Alan Greenspan follow market rates down, and now up, or has he arbitrarily engineered them? Also, is there any evidence to support either case.

TownCrier968, thanks for the post and link#1346828/6/05; 16:27:26

"Gretta, I am particularly fond of one memory of Wim, an event which I must relate because it says so much about him. The two of you were in Aachen when Wim was to receive the Charlemagne Prize. There was he, that tall fellow with his magnificent mop of hair and there were you, a picture of supreme elegance. But you had a problem walking on the cobblestone streets of Aachen – so Wim gave you his shoes, carried yours and walked in his socks through the streets with his prize around his neck." --JCT

Such a great picture.


TownCrierspotlight, Greenspan's rates#1346838/6/05; 17:08:57

Apples to apples, the "market rates" you're referring to would have to be those as bid on overnight fed funds. Otherwise, we'd simply be adding our 2 cents to the recent "conundrum" dialogues. And as to whether or not Alan is leading or following that market, a look at a chart (confer any good financial rag) plotting both the market rates and the FOMC target through time would perhaps serve you better than anything I could say on the matter. I would, however, want to caution you in your resulting interpretation; that is to say, the Fed itself has an active hand in making the "market rates" what they are on an ongoing basis, after all, that's the whole point of the FOMC's target rate -- to serve as a monetary policy guideline in the Fed's open market activities which are intended to bring about either tighter money or more accommodation in accordance with the Fed's assessment of the economy and banking community's need for steerage one way or the other.

So, with that final point said, I certainly wouldn't characterize the actions as "arbitrary". But in a weird way of looking at it, we could say the Fed is doing as most central banks do, i.e., "leaning into the wind", albeit a wind largely of its own making.


Topazspotlight#1346848/6/05; 17:40:00

Might I chime in Sir...
The Fed certainly seem more "resolved" this time through than the previous "irrational exhuberance" rate episode.
Then,(c-1996) market forces, via the 3mo bill overwhelmed the rate increases and sent the Fed again into reverse.

I think they (Fed) are so fearful of the Zero % that they are doing anything and everything (witness TC's excellent and regular contributions on o-nite actions) to reverse a downward rate spiral ...and hence the Conundrum. IMHO.

GoldiloxRobin Cook passes#1346858/6/05; 17:56:30

Just announced - Robin Cooke, former Foreign Secretary and House of Commons member who resigned over Blair's war policy succumbed to a heart attack in Scotland today while hiking in the hills.
CometoseRefinery Fires and explosions#1346868/6/05; 20:08:32

These events seem to play well into the hands of the inflationists to keep deflation in check .....Sir Alan would be proud ........maybe friends of his are lighting the fires
The Invisible HandThe end of the world as we knEw it#1346878/6/05; 21:26:45;jsessionid=M4LHZC02S3A4NQFIQMGSNAGAVCBQWJVC?xml=/opinion/2005/08/07/do0702.xml&sSheet=/portal/2005/08/07/ixportal.html

Harvard Prof.: In normal times, it would be front page news

'Italy despairs of euro' by Niall Ferguson
In June the Minister for Welfare, Roberto Maroni, dropped a small bombshell by calling for a return to the lira. "The euro has to go," he declared in an interview. "It has caused devastating price increases and made the Italian economy uncompetitive." He and his party, the Northern League, are calling for a referendum on the issue.
Some commentators dismiss Maroni as a mere maverick. But last week the Italian Prime Minister, Silvio Berlusconi, endorsed his position, calling the euro a "disaster". The single currency, he added with characteristic finesse, "has screwed everybody". Wait a second: the Italian Prime Minister publicly denounces the euro? Shouldn't that have been front page news? Well, a year ago it would have been. But one of the many side-effects of a terrorist bombing campaign is to distract public attention from almost every-thing else (aside, of course, from Test match cricket). I suspect that even if Germany invaded Poland it would merit no more than a paragraph near the bottom of page six.

Niall Ferguson is Laurence A. Tisch Professor of History at Harvard University,6903,1543922,00.html

Why $60 doesn't have the world over a barrel

We used to think a $30 oil price would cripple the global economy. Now prices are twice that. Heather Stewart on why meltdown hasn't arrived

One explanation for the global economy's resilience is that the cause of the rapid price rise has not been short supplies of oil, as analysts first thought, but the sheer strength of demand for the precious fuel, especially from the rapidly expanding Asian economies.

spotlightGreenspan/interest rates#1346888/7/05; 02:20:01

Thank you sir for your comments.

I believe Greenspan engineered the fed funds rate down to the 1% level which caused malinvestment on many levels, especially housing. I would be interested in concrete evidence supporting or refuting this assertion.

Input welcome.

NedDeflation anyone?#1346898/7/05; 05:34:37

Just finished reading Prector's "Conquer the Crash". Outside of the first couple chapters which are heavy on 'Wave' principle, it is an awesome book.

Funny that many on this forum and others subscribe to the inflation theory while a sizeable portion look for deflation to rampage the global economy.

I don't understand the mechanisms or the triggers that will surely tip the pot but it seems to me that we are on the edge. Watching Greenspan 'engineer' 40 year record lows on short-term IR must have been a sign of impending (deflationary) panic by TPTB. As quickly as that wave came and passed, the next wave of inflationary panic is upon us and Greenspan is jacking rates as quick as he can. Others may disagree but I see rates moving straight down and then straight up, why can't they be 'flat' for a period of time?

Looks like continuous damage control to me. The BOE cut rates last week, all other CB have been holding, how can the FED keep raising? There was talk of 50 bp at next weeks meeting. How is that possible?

Looks like 'IT' is rolling over again, are we set for the final PANIC? The deflationary collapse? The last straw?

For all the 'hits' that Prector takes about predictions of $100 gold he does make at least half-a-dozen very, very positive points about physical gold ownership. I leave you with my 3 favorites:

"Precious metals are one day to become the most important asset class to own. From the mid-1970's to the mid-1980's, investors were dedicated to owning gold and silver for safety. Today, people are utterly disinterested in gold or silver, which is what sets the stage for an opportunity.

First, some brief background. Currencies today are utter fictions, but few realize it. Sometime during this century, people will question the validity of the fiat money system. The 1970's may prove to have been a warm-up in a world battle for real money. Governments may exercise their powers to keep the fiat money system afloat, defending their currencies with various schemes and legal restrictions, but in the end, gold will win. "

Prector has claimed that gold and silver might fall further in a deflationary depression but adds this:

"You might be surprised to find that I advocate holding a healthy amount of gold and silver anyway. There are several reasons for this stance:

First, it could be different this time, for some reason I cannot foresee. In a world of fiat currencies, prudence demands hedging against a rush to tangible money.

Second, these metals should perform well on a relative basis compared to most other investments.....These metals are downright inexpensive compared to their top values in 1980. Relative to home prices and stock prices, the metals have never been cheaper.

Third, the question of whether there will be further bear markets in the metals is really one for speculators and quibblers. Gold and silver have declined in dollar value for over 2 may not be prudent to try to finesse the final months.

Fourth, the metals should soar once the period of deflation is over.....silver rebounded ferociously after it bottomed in 1932, tripling in just two years....Given the likely political inflationary forces, it could be much stronger. So by all means, you want to own precious metals prior to the onset of the post-depression recovery.

Fifth and foremost, if you buy gold and silver now, you'll have it. If investors worldwide begin to panic into hard assets, locking up supplies, if governments ban gold sales, if gols and silver prices go through the roof, you won't be stuck entirely in paper currency. You will already own something that everyone else wants. "


"I do not advocate buying gold and silver in paper form by way of futures contracts, gold-backed bonds from the Russian government or ownership certificates connected to commingled accounts at storage facilities. After all, which is better - owning actual gold or some entities promise to pay it? For maximum safety, you should own gold and silver in physical form, outright"

Don't you just love this guy !!

Have a golden day.

Topaz@spotlight#1346908/7/05; 05:57:22

The accompanying link (pity it's dated ;-( shows the relationship between FFR and relative IR's.
You'll notice the correlation in the short term Bills and FFR is close whilst Bonds are all over the shop.
I don't believe the Fed engineered the rates "down" contraire, the run-up in FFR 97-2000 would appear to be an engineered attempt to get rates "UP!" ...which failed, and resulted in the quick retreat back down.

Are we again now seeing a (more resolute this time) Fed trying to eke the final few heart-beats out of a System long past it's use-by-date?

GoldiloxPrechtor's Defla crash#1346918/7/05; 06:06:25

@ Ned,

Prechtor makes pretty good case for his hypothesis, but I have heard what I consider a more likely scenario from Puplava, who regularly explains why he thinks the infla scenario makes more sense with this particular crowd pushing the buttons.

Monetary inflation coupled with asset deflation is a popular choice, as well.

It's a complex soup!

For a taste, listen to his third hour wrapup on today's FSN,

CaradocSemi off topic for Goldilox#1346928/7/05; 06:35:27

If you have an empty PCI slot, adding a cheap video card and a second monitor will give you twice the "radar screen" while saving enough for at least half an ounce of yellow metal.

Ask Google for "second monitor" and you'll get several links like this one.


GoldiloxSecond monitor#1346948/7/05; 07:35:41

@ Caradoc,

As a reliability engineer at a major PC manufacturer, I actually tested those scenarios about 15 years ago, sothey don't scare me off. However, I think my 400MHz workhorse is probably ready to be recycled at this point. I've been playing with Garage Band SW, and my trusty "Blue and White" just lacks the required horsepower for all my needs - another case of SW overwhelming the HW capabilities.

My glass TV also hails from the precious century, so I want to kill two birds, so to speak.

Here's the scenario I am envisioning in my small, but adequate, beach apt.

1) New laptop - smaller screen to keep the costs down, but still enable faster networking, processing, and portability - one that supports DVDR, strong audio and fast DVI out - probably a PowerBook 12" (2-3 oz).

2) Wide screen HDTV as a desk monitor - Some of the PIP-capable screens are looking pretty good, and definitely beat the PC manufacturers by an ounce or two of shiny. Syntax Olevia (27" or 30") is getting good reviews as both monitor/TV for around 2-3 oz.

Using the PIP, I can monitor bubble vision, CPM forum, and my trading accounts simultaneously on split screen. When the business day is done, I can switch off the PIP, and use the full screen to watch DVD's, baseball, or Monster Garage while I kickback in the lounge chair. With bluetooth, I can also "lounge" while surfing - a sort of "remote" for the 'puter when I am totally "potatoed". Sometimes I tune in "Animal Planet", as Kitty likes to check out the "Big Cats" at play.

Hopefully, I can accomplish all of this at about a 5 oz. tarriff. Heck. if I can hold off another couple months, maybe even 4 oz or less - LOL. The screen prices are dropping like flies, and the shiney, well?

GoldiloxThanks Caradoc#1346958/7/05; 07:50:58

@ Caradoc,

With all my gum-flapping, I forgot to thank you for the kind thought!

It probably appears that I am totally "potatoed", but as I crashed my beloved Cruiser a few weeks back into a non-attentive soccer-mom's mini-cage, I am still awaiting delivery of my new ride. Thankfully, we experience perpetual summer here in Puplava-land, so I won't miss the "riding season".

Max RabbitzWho done it? #1346968/7/05; 09:05:46

It's funny that during the Clinton era (1st ?) there were no mid-eastern connections found with any terrorist acts on U.S. soil. The Oklahoma City bombing was said to be just McVeigh and Nichols although neither could construct a workable pipe bomb. Read Jayna Davis's "The Third Terrorist" for a local TV reporters investigation. Then there was Flight 800 that was lost to a "fuel tank" explosion, but not terrorists. This is understandable, I guess. Failure to protect your citizens reflects very badly on leaders, so smart politicans try to put the blame where it provides the most political spin.

Now in the Bush II era it's harder to deny the "mid-east" connection. Few yet dare to be politically incorrect and put a clear name to the source (hint...we need that oil). Instead, every scrap of hearsay or possibility is used to weave theories to blame ourselves and our institutions, or politcal foes. In science all available facts must fit the theory or the theory must be discarded, no matter how beloved. Not so in politics. With the facts presented so far with 9/11 and London I doubt the "we did it to ourselves" conspiracy theory would not make it past a 3rd rate science editor, although carefully selected items could be used to construct a best selling paperback or Michael Moore propaganda film. It is more likely that the truth is more drab, and perhaps more deadly.

I remember the 9/11 Pentagon conspiracy theories that made all sorts of claims. Each of these claims was later easily and clearly refuted from the pictures taken at the scene. The disturbing part was that all of this evidence was available to those who made (and make) the conspiracy claims....but was ignored!!! Not only did I waste a significant amount of my time investigating these claims but such a deliberate attempt to deceive in a time of war could be considered sedition (such a quaint concept nowdays). I wonder at the source.

We live in a complicated world where much is hidden. Thus,we often must make judgements based on limited information. For me, the Western world is in serious trouble in several ways. Economic empires are not the only ones being fought for.

968@ Ned - deflation.#1346978/7/05; 09:46:06

Forget Prechter's deflation theory. We are talking here about DEFLATION IN THE RESERVE CURRENCY.
- Can you name me a few items in which we can see a coming deflation, or can you name me a few items in which we can see a coming inflation ?
- What will happen if the greenback's status as reserve currency will be put in question openly, in favor of another currency, be it yuan, euro, ... ? Deflation ??????
- The US, as biggest debtor on Earth will, even in a crisis, pay all its debts, to the last penny. And will this create deflation ????
- If other nations dump their dollars, will that cause deflation ????

I may be very wrong on this, but I doubt a serious deflation in the dollar.

TownCrierSouth Africa set to be hit by massive gold miners' strike#1347018/7/05; 10:54:14

JOHANNESBURG : South Africa's leading mining union is set to hit the world's top gold producer with its largest strike in 18 years as workers prepare to walk off the job late Sunday.

...the strike would have a "serious impact on an industry that's already on its knees."

"At the moment the rand has weakened and the gold price has picked up by some seven percent, so mines are just breaking even, but there are no profits," he earlier told AFP.

Miners earn a minimum monthly wage of 2,200 rand (338 dollars, 277 euros) in South Africa.

The country is the world's largest gold producer, despite a nine percent decline in output in 2004, yielding a total of 342 tonnes, according to the Chamber of Mines.

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

Draw your conclusions as you see fit.


TownCrierSouth African Gold Miners Set to Strike#1347028/7/05; 10:59:56

(AP) 08.07.2005 -- About 80,000 gold miners were set to stop work on Sunday evening for the first strike in the gold sector since 1987 after wage negotiations collapsed last week, the National Union of Mineworkers said.

...In a memorandum last week, Solidarity argued that employers can afford the pay hike, saying prospects for the gold mining industry for the year ahead were "looking rosy," with the gold price on an upward curve and international economic instability prompting investors to seek stability in gold.

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

For investors seeking stability, times like this remind us that it is better to own the metal than to own (invest in) the firms trying to mine it. The yellow metal is always "good as gold", but a company has its ups and downs just like any other.


TownCrierSouth African gold miners to go ahead with strike Sunday#1347038/7/05; 11:03:44

JOHANNESBURG (Reuters) - Around 100,000 South African gold miners will launch the first industry-wide strike in 18 years later on Sunday to press demands for better wages, the country's biggest mining union said.

"The main issue is that at 6 p.m. (5 p.m. British time) tonight, the strike is beginning," Gwede Mantashe, general secretary of the National Union of Mineworkers (NUM), told a news conference.

"Tonight there will be a strike, our forces are ready."

South Africa's gold industry is the biggest producer of bullion in the world, accounting for around 15 percent of total global output, and the mining sector contributes about 8 percent to the nation's gross domestic product.

A strike would lead to the loss of around 28,000 ounces of gold production and 79 million rand in lost revenue per day, a Deutsche Securities analyst has estimated.

...Unions are demanding a rise of between 10 and 12 percent.

Wages make up around half of total costs in the labour intensive sector, the biggest in terms of mining employment.

The strike would paralyse the South African mines of the world's No. 2 gold producer AngloGold Ashanti, fourth-ranked Gold Fields, sixth-placed Harmony Gold and South Deep, a joint venture of South Africa's Western Areas and Canada's Placer Dome.

...Mining firms, which gave workers a 10 percent wage rise two years ago, have taken a tough stand, saying they cannot afford rises much above inflation, which is running below 4 percent.

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

Ditto previous remarks.


Max Rabbitz9/11 Pentagon#1347058/7/05; 12:30:19

I've seen and investigated many of the claims and feel I've wasted much time. People can and do say anything. "Hijackers" still in Paris? Who says? Where is the evidence? There are many "mid-easterners" with the same name as the hijackers. In their culture they have long strings of names as far back as Adam (in theory), all of which are their proper names. Disinformation is common, especially in a war. Look at the many photos of 9/11 Pentagon strike and see for yourself. There are turbine engine parts lying right near the hole that exactly matches the size of the plane cross section. There are other large plane parts lying in the field (see link for pictures and debunking). Plus dozens of eye witnesses and funerals of people on the plane. Some well known. Yes, I suppose in theory this could all have been contrived in vast conspiracy of the illuminati to gain total power. I'll go with the odds and Occam's razor.

Listen to Puplava's third hour for this week, about a half hour in to get another viewpoint of the mid-east and what is coming at us as we sleep. Failure to clearly see a threat usually means an organism is doomed to extinction. I rather think the west is toast…Europe included. This is a major reason why I buy gold (more than silver)…..not just a corrupt and manipulated financial system.

I watched the History Channel CD of the War of 1812 last night. The American Secretary of War refused to believe the British were really going to attack Washington, and prevented mounting a useful defense until too late. He thought the Brits would go to Baltimore, the source of the privateers raiding British commerce. Why bother with Washington, of no military consequence. Wrong. Washington burned. Not just the Whitehouse and capital, but all public buildings except the customs house. The fire could be seen for 50 miles. The empire got revenge.

But then a funny thing happened. That night as the city burned, a hurricane hit and massive amounts of water put out the fires. Winds threw soldiers and cannon alike. A tornado touched down. What was left of the 4000 invading soldiers left the next morning. Perhaps a divine wind will save us from those who have plans to slaughter us. There is hope.

Topaz@Randy ...Perfect Storm?#1347068/7/05; 12:57:59

80K Miners could sure slow down the flow of Bullion to Market "just when" it's needed most!

Our fellow Gold watcher Mr Phillips (via a neighbouring site) has alerted us to the fact that pre-season Indian buying is MIA at present ...and still to impact the Bullion market. He anticipates a mid-late Aug timeframe.

We also have Comex Aug to work through ...imo this "could" require upwards of 30K contract equivalents.

The Euro-Zone WAG commitments have all but been done now 'till Sept ...again indicating a "reduced" short-term supply outlook ... if we can just convince G'Lox to hold off trading his shiny for gadgets ...;-)

GoldiloxShiney for gadgets#1347088/7/05; 13:51:41

@ Topaz,

If my 4 ounces will rock the boat, we're in more trouble than I imagine.

Actually, I probably won't sell any shiney, but I make a habit of calculating most major purchases in those units since they comprise the vast majority of my assets.

It makes the transaction much more graphic when I calculate the trade-off in units of measurement that mean something to me.

mikal@Topaz#1347098/7/05; 14:05:33

Re: Possible gold shortages from mining strike, India demand Europeans close to limit on Washington Agreement, etc. Very interesting.
I saw that the latest stats on gold sales included 60+ tons from the BIS and the Phillipines in May and June. Clearly there is more where that came from amidst the Japanese WW2 hoards recovered by Marcos et al.
If gold is to rise in price, it will not be without the consent of the banking cartel and the shadow nobility.
I'm banking on it happening either slow or fast for all the reasons you cited and others, like derivatves, hedge books, debt, multiple economic exhaustions, imbalances and deficits, safe haven flows, and more!

GoldiloxInvestors Not Put Off by S. Africa Strikes#1347118/7/05; 14:22:02


CAPE TOWN - South Africa is reeling from a wave of strikes that grounded the national airline and now threatens to cripple gold mines, but the stoppages will not damage investor perceptions of a country pushing to lift growth.
Strikes are common in Africa's largest economy as the annual wage talks season draws to a close but this year's union actions have been more hostile than in recent years as workers battle to share in the fruits of a growing economy.

Police fired tear gas at protesting shop assistants last week and passengers were left stranded across the world during a bitter six-day strike at South African Airways.

Now the mine sector -- which contributes around 8 percent of gross domestic product -- is battling to avert the first industry-wide gold mining strike in 18 years, which unions threaten to start on Sunday.

Frustration among miners who say they are not sharing in a booming economy would paralyse the South African mines of some of the world's top gold producers -- AngloGold Ashanti, Gold Fields and Harmony Gold.

If the miners' strike goes ahead, gold companies stand to lose around 28,000 ounces of gold production and 79 million rand ($12.21 million) in lost revenue per day, a Deutsche Securities analyst has said.

Sasfin chief investment strategist Craig Pheiffer said any strike could hit mine earnings hard. "Most of them (mines) are making losses and any extra day without production could be critical".

But analysts say the stoppages will not significantly dent investor and market perceptions so long as they have no knock-on effect on monetary policy.

"I would downplay the impact of the strikes, I don't think they have been on the radar screen (of dealers)," analyst Koon Chow of CS First Boston told Reuters from London.

South Africa's capital markets have shrugged off the strikes and the rand currency jumped to a 2-month high this week after Standard & Poor's upped its rating -- which was already investment grade.

"The only way it would really impact on the market is if people thought that wage increases would accelerate, inflation rises quickly and monetary policy would be forced to respond," Chow said.


How could such a "barbarous relic" with no monetary value evoke such worldly concern? Monetary policy? Who uses gold in their monetary policy?

CoBra(too)Buy on Strike News -#1347138/7/05; 15:29:50

As the old adage goes - Goldi -

In this case it may become more than true as Sa is still the # 1 gold producer ... though now closely followed by Nevada, as Ralph Roberts (USGS) has predicted some 40 years ago.

I can see some shorts having trouble to keep same clean as they might be cleaned out anyway.

Looks like the spooks haven't turned the curve and are still playing yesterdays game, chasing financial assets to Nirvana and never get the idea that hard assets may already be the game - for a long time to come - sez who?

Your humble cb2

GoldendomeThe miner's strike should not effect gold prices.#1347148/7/05; 17:30:25

I wouldn't expect too much change for the gold price, from the gold miners strike. Maybe a little bump up on excitement, then back to the normal see-saw battle, hopefully inching upward.

Recall that there is plenty of gold in the vaults. The stocks to flows ratio for the Monetary metal--Gold, is estimated at over 50 to 1. In comparison, the same ratio for the industrial metal copper is closer to .25 to 1. My conclusion is that a strike by copper miners would have a much greater effect on the copper price than a gold miners strike will have on the gold price.

POG depends on the other factors we discuss here: economics, political unrest, dollar disgust, etc. ---IMO

MKCobra and Goldendome. . . .South African strike#1347178/7/05; 19:48:14

If I can offer a slightly different reading on the South Africa situation. . . . .

Africa is a continent in economic and social turmoil. South Africa, though probably the richest African nation, has not escaped the turmoil as both of you are well aware.

I do not see this, at the outset, as simply a 'labor strike'. I see it as symptomatic of deep-seated socio-economic problems of which this is simply the most egregious, symbolic and perhaps final eruption. In short this could develop as far more than your run of the mill, average labor strike. It is dangerous in that it could precipitate something much deeper. It could unleash latent aggressions of which most of us in Europe and the United States are tangentially aware. People's lives are at stake and there is much on the table.

I could be wrong about this as I am not an expert on the situation in that country. From essentially a layman's perpective, though, I see this as a major negative for South Africa which has been brewing for a very long time. The last time strikes were threatened, the situation settled quickly, and that is likely what you are thinking.

I am not ready to dismiss the strike in the gold mines as an addendum to previous labor/management conflicts. I see it as something new and perhaps more far-reaching.

There is an additional factor which I have yet to see addressed. Much of the short position in London stems from the South African mines. With production down, these shorts will have to be satisfied by other means. This amounts to another stress on an already stressed-to-the-max situation in the lending market -- evidenced by the ECB and BIS entrance in the market as sellers. I don't think they would be there if they didn't have to be.

These developments, in my view, amount to major bullish for physical gold and you wil likelyl others picking up on this line of thinking in the days and weeks ahead -- assuming of course a quick settlement is elusive. On the other hand, pressures resulting from that short position could force management to settle quickly.

Your comments? I have not seen specifics on labor's demands and management's ability to meet them. If anyone has some background, I think we would all benefit.

Ned968/Goldilox#1347188/7/05; 19:52:19

Thanks for your points. I'm really struggling with this deflation/inflation business, what seems to be clear is that one can be talking about a multitude of asset classes and monetary aspects that can undergo either or both simultaneously.

I did listen to Puplava's '3rd hour' today, it seemed to drag on about 'peak oil' and the Saudi ability to crank out more and more production. He did mention the very real ongoing debate about deflation vs. inflation. I think an argument can be made for either.

What I got out of Prector's book ("Conquer the Crash") was that debt cannot continue to expand on and on forever, as a matter of fact it is approaching it's theoretical peak. As Prector maintains, the expansion of debt is the defacto increasing of money supply. When debt expansion ceases, money supply will shrink, there will be less money chasing alloted goods, thus deflation. Prector is most concerned about asset deflation; stock markets, bonds, housing market, commodities.

On a personal level I look at it this way. I have borowed money, lots of it to finance stock purchases (PM's) and also for physical metal. Lines of credit have been maxed. I moved into a large house (2) years ago to try to leverage what's left of the RE bubble. I am told I am J6Pack. So although oil is going mental (definitely inflation in the oil patch) this will eventually stonewall, if not sink, the global economy. As the economy slows, my employer slows, I slow. I get nervous, very nervous because I am in over my head. Now if everyone stops borrowing, the banks cannot write new loans. If things get even remotely ugly and a pinch of debt is defaulted, money supply goes to heaven, lenders get nervous, IR rise, J6P is now panicing with his variable rate zillion dollar mortgage. On it goes....

The deflation cycle can get nasty very quickly, at least according to Prector and deflation experts.

Back to the inflation argument. Yes, a declining dollar will import inflation.....quickly. One must wonder if oil is discounting a large dollar deval. soon? If the 'peak oil' business is true and somewhat accurate we don't need to talk anymore, the entire planet and put its head between its legs and kiss its sorry butt good-bye !

So maybe the dollar will drop against the Euro or Yuan. This will only happen if the economic backdrop is seen to be better elsewhere. Is it? The dollar has had a wicked rebound from Christmas, is this merely the result of the FED defending it w/ IR increases? I see the BOE lowered rates last week, are they seeing 'deflation', quick lower rates, beat up the 'pound' and get inflation back? Will the FED increase again this week?

Interesting that all CB's were lowering rates as fast as they could a couple years ago to multi-decade lows to ward off deflation, have they licked it? Did they go too far for too long, the ensuing credit expansion, mortgage expansion, etc. has set monstrous records. So now the FED is heading off an apparent inflation scare only to open the doors of hell.

Deflationary hell.....and oil will see to that. Couple that with baby-boomers beginning to liquidate stock in 2 years time along with the huge McMansions. Its over. One of the biggest clues is GM and Ford. They can't expand any more, even with 0% for the last few years. No new stream of revenues means no servicing bond payments and pension obligations. Watch this nightmare unfold, day by day it will get uglier. The oil issue and the rolling over economy only makes their problem 'worser', less revenues.


Everything will get smaller boys and girls, stock market, real estate market, bond market, your job, my job, corporations, governments.

The only red herring Prector leaves in his book is the chance of hyperinflation. Default the whole show and let chaos rip it all apart for a while. Reset all the counters and start over.

I don't know, gotta absorb more info, its getting late in the game, 4th quarter down by 2 scores, gotta move the ball.

Thanks for the info. Best of luck to you. We're going to need it.

Have a golden day.

GoldiloxInfla/Defla and debt#1347208/7/05; 20:20:34

@ Ned,

Isn't it interesting that debt seems so interwoven in both the problems and proposed solutions?

Leverage, when it works seems like a fantastic advantage. When it doesn't, it wipes out many participants..

I've been watching Animal Planet today to get away from politics and finance for a day. The feeding behavior of dolphins and sharks on the shoals of sardines and the predatory patterns of the african hunters (non-human) that track the wildebeast migrations could not help but remind me of the markets - OK, I am hopelessly entangled.

The interesting thing about the wildebeast migration is that more are trampled by their own herd's panic than fall prey to the predators themselves.

Will the Joe6'ers of the RE market and SMs be panicked into trampling each other if and when market volatility reaches more frightening proportions? This is obviously one factor the FED will find difficult to control, and I would submit their hedonistic BLS, CPI, and PPI data and rose-colored bubble vision is justified in their minds as anti-panic measures.

Over the long term. another anti-panic strategy has been the herding of investors into funds and other such groupings, to convey the illusion of safety in numbers. As program trading continues to dwarf individual trades, is their even greater danger of overloading one side of a trade?

One look at the NASDog in 2001-2 reminds us that when too many sailors line up on one side of the boat, they risk capsizing it.

masMr Joker, from the Privateer.#1347218/7/05; 21:04:14

It is a tragedy that the one English-speaking nation which has always had the highest tolerance for
individual eccentricities, strange manners, speech, conduct and dress, should now find itself in the
situation where a law-abiding Brazilian man has been shot to death by the London metropolitan police
simply because he looked suspicious to them. The situation is not improved by what the Guardian
newspaper has reported. Up to seven other people have come within seconds or inches of also being shot
to death by the special teams of the British police. This IS a shoot to kill policy! It is also a failure on the
policy level. Regardless of Prime Minister Blair's protestations that it is not true, 85 percent of the
British public according to the latest polls have drawn a straight line connecting the British military
participation in the attack and occupation of Iraq and the attacks made in London. According to Prime
Minister Blair, that makes 85 percent of the British public supporters of terrorism!
Prime Minister Blair is blatantly ignoring the nearly two million people who peacefully marched past the
offices of the British Government in London, protesting against him joining with President Bush in an
attack upon Iraq even before that military attack had been made. Now, the British Armed Forces are in
Iraq and "others" have decided to bring the consequences of aggressive war back to Britain, so that the
people in England could themselves get a taste of what war is really like. At the policy level, Mr Blair
has clearly decided that a "shoot on suspicion" policy is the proper answer.
Here lies the ultimate failure of Mr Blair's policy. It has made the British civil police as dangerous to any
person who might attract attention as are the terrorists themselves. What is the difference between being
blown up in a terrorist bombing or being shot to death by the police because of a foreign policy which is
certain to bring about such terrorist bombings? Terrorism, so-called, is the militarily weak party's
response to being attacked because it does not have the Tornados or the F-16s with which to make a
"proper" military response to being attacked. The central policy question here is simple. Is Prime
Minister Blair prepared to accept that a full-scale air and ground attack would be made upon Britain
because of his own military attack upon Iraq? The answer to this nearly classical question is obvious. Of
course, Prime Minister Blair would NOT have made his attack if the response could have been a real, fullscale,
"proper" military war with the nation he had attacked. The attack upon Iraq was made by Prime
Minister Blair because he thought that it was "safe". He thought that there would be no direct "proper"
military response, because Iraq did not have military means with which to respond.
Now, a response has come. It is neither a "proper" nor an official response. Four bombs exploded in
London and another four might have gone off a few days later, if the detonators or home made explosives
had functioned. They did not and Londoners were saved from another massive number of dead and
wounded. Now, the political cry is out to the effect that the Blair government needs additional emergency
powers. When Parliament returns, it looks like these emergency laws will be passed very quickly. Then,
Britain too will be under emergency laws, with the only difference from martial law being that it is its
civil police doing the random killing instead of soldiers, as would have been the case under martial law.

masUK Bankruptcies hit another record.#1347228/7/05; 21:21:31

Interesting that the trend is climbing faster and faster. Hence the cut in interest rates?

Who's next in line?

Topaz@ned.#1347238/8/05; 02:03:02

I'm aware we've been over all this before ...once or twice eh? ...but it might bear repeating as you have obviously been taken with Mr Prector's tome.
My 02: - FWIW and hope it helps.

Yin-Yang ...Inflation-Disinflation ...Deflation-Hyperinflation.
Stage 1 ...A clear and prolonged loss of faith in the markets ability to determine/engineer "future" expectations. (Def)
Stage 2 ...A clear loss of Faith in the Fiat Numeraire as a tangible/viable transaction medium (Hyp)

WE will decide our fate and level of Faith ...THEY are doing all they are physically/technically able to do to forestall OUR decision ...and they're going to "extreme" lengths!

I haven't read Mr Prector's work as yet Ned, but by the sound of it, imo he's on the Money.

Sundeck'China to fuel gold to $725' #1347248/8/05; 03:57:17


Chinese retail sales of gold jewellery rose more than 11 per cent to 224 tons in 2004, according to GFMS. Sales may increase to as much as 600 tons within five years, according to Merrill Lynch's Birch, leading China to surpass India as the biggest consumer. Indian demand for gold jewellery totaled 517.5 tons last year, GFMS figures show.


Sundeck: No argument there...

SundeckDiggers and Dealers 2005#1347258/8/05; 04:12:56,5744,16183274%255E643,00.html


The 1300 or so tickets to the three-day shindig sold out months ago. Accommodation in the Goldfields capital is tight.

The forum is popular not only for what happens on the stage and in the sponsor's marquee, but because of where it is held.

On the edge of the western desert 600km east of Perth, Kalgoorlie-Boulder has a reputation as a hard-drinking town famous for gold and scantily clad waitresses called skimpies pouring beer in most of 32 pubs.

Sundeck: Held every year in August... For those of you who are not atttending (like me), the program can be found here:


SundeckOne Nation Under Debt#1347268/8/05; 04:38:30


First it was Warren Buffet, then Bill Gates, then George Soros, now even our allies like the Korean central bank and, most recently, Saudi Arabia have been dumping dollar holdings in favor of other currencies. Why? Because we've become One Nation Under Debt.


Is the U.S. dollar really at risk of losing its status as the world's main "reserve" currency? Yes, the dollar's share of global reserves has already fallen from 80 percent in the mid-1970s to around 65 percent today.


Over the past 2,000 years the leading international currency has changed many times, from the Roman denarius to the Dutch guilder and then to the British sterling.

In 1913, at the height of its empire, Britain was the world's biggest creditor. Within 40 years, after two costly world wars and economic mismanagement, it became a net debtor and the dollar usurped the sterling's role.

The dollar has been the dominant reserve currency for more than 60 years, delivering big economic benefits to Americans, which can pay for imports and borrow at low interest costs. But never before in history has the guardian of the world's main "reserve" currency also been the world's biggest net debtor. If America continues on its current path, the dollar is likely to suffer a fate similar to the sterling.

Here are a few tips on how you can prepare for a dollar meltdown:

Reduce debt, live within your means.

Increase income, develop your talents.

Diversify some assets out of U.S. dollars.

Vote to cut government tax-and-spend policies.

Pray that God's providential judgment upon America will teach our nation the benefits of righteous living before we face more social-economic consequences.


Sundeck: Dang it all...this guy has been readin' Black Blade! (Where is Black Blade?) Mmmmm...I like that last one... Can you please include Australia in your prayers? (We have similar sinful ways with credit cards and home equity.) What's the betting that gold will top $470 by end of October?

SundeckFor whom the bell tolls...#1347278/8/05; 05:13:40


In the second week since China's announcement of its decision to abandon the yuan's peg to the dollar, the reaction in global financial markets has intensified. Those who have underestimated
the significance of this policy shift are running out of time to reassess their complacency. If holders of U.S. dollars were wondering for whom this bell tolled, the markets themselves are crying in crystal clarity "It tolls for thee."

During the week the price of gold gained about $10 per ounce, with the Philadelphia Gold and Silver Index (XAU) surging over 7% at its intra-week peak, its highest level since March. In additional, oil prices rose sharply as well, reaching a new all-time record high above $62 per barrel. Furthermore, the U.S. dollar posted its largest weekly decline this year, with the euro rising about 2%.


The fact that demand is increasing for non-U.S. dollar, high yielding, safe-haven investments, as well as for traditional inflation and financial hedges while simultaneously decreasing for dollar denominated securities, reveals a major flow of funds taking place.

Sundeck: I'll be Earnest with you... What's Donne cannot be un-Donne...and as I see it, China's bell is ringing out the dollar's year, loud and clear. You might say that the dollar is Donne-for Papa... My guess is dollar index below 80 by end October...


Knallgold$ future#1347288/8/05; 06:00:10

...and now that CONgress officially announced that large $ piles are worthless-... (fill in your POG target/Gold to da moon rhetoric)
GoldiloxNY gold retreats early on broker selling, eyes Fed#1347298/8/05; 10:17:08


August 08, 2005 09:09:03 (ET)

NEW YORK, Aug 8 (Reuters) - U.S. gold futures edged down before stalling on Monday morning, and traders were reluctant to pressure prices sharply due to the start of a huge strike by gold miners and thin volumes before a U.S. Federal Reserve decision on interest rates on Tuesday, dealers said.

Roughly 100,000 workers in South Africa began their first industry-wide strike in 18 years over the weekend, but little impact on gold prices was seen amid plenty of supply.

George Nickas, vice president of sales at FC Stone in New York, said gold prices had underlying support from the strike and also from a firm euro against the dollar, but activity was at a low ebb due to the summer doldrums.

"The ring capitalized on the quiet market and tested the downside earlier. Don't be surprised to see it test the upside later on in the day," said Nickas.


$ down, gold down, HUI up, SM flat - it looks like no one has a direction firmly in hand.

mikalRoyal treatments in Saudi Arabia#1347308/8/05; 10:32:21

Saudis to retrieve $360 billion abroad- UPI - August 7, 2005
Goldilox- Don't they WISH it were a "quiet day in the gold pits".
"Janitor, get me another mop!"

USAGOLD - Centennial Precious Metals, Inc.Austrian 100 Schilling gold coins#1347318/8/05; 11:14:53

Congrats to those who acted swiftly enough to secure for themselves a few of these rare beauties -- they are now sold out.

A 'Summer Special' remains for additional savings on U.S. $20 Liberties and St. Gaudens. See the Bulletin Board (URL given above) or call for details on these or any other gold coins and bullion.

NedAnimals & Oil#1347328/8/05; 11:40:06

Are oil traders animals? We'll save that for Another day !

Funny you mention the animal thing Goldi. I was at the good doctor's office Saturday, our conversations often drift, this visit was no different. He was explaining the weight of a human reaches it's low right now and then reaches its high in late March. Sounds right, right?

So I said to him we're opposite of bears, peaking in fall and reaching its low in March/April. Humans, the unusual mammal.

So I see oil raging again......or at least I assume that. The Toronto exchange has tacked on another 100+ pts. while the Dow has stalled. Can only mean one thing either oil is booming today or commodities in general. And I see the TSX has nosed ahead of the DOW.

Hmmmm? Peak oil being confirmed as we speak? Wonder if BB (Mr. Erectus) is licking his lips? And just at the front end of hurricane season. Should be an ugly fall.

Have a golden day.

R PowellNed#1347338/8/05; 13:04:00

Your words here...

"Hmmmm? Peak oil being confirmed as we speak? Wonder if BB (Mr. Erectus) is licking his lips? And just at the front end of hurricane season. Should be an ugly fall."

An ugly fall indeed, if/when it does retract and markets do retract, even in the face of supportive supply/demand numbers. Although, if one believes the government numbers, domestic oil supplies are NOT scarce right now and the strategic reserves (which Bush has been filling) are due to be topped off soon! Or perhaps that "ugly fall" you refer to is a prediction for the economy as oil prices climb even higher...? How expensive before the economy seizes up? Where then does the POG go?

But, as someone on another forum asked..."Who has the gonads to short crude, heating oil or unleaded RIGHT NOW?"
This refers to paper games, of course, but such speculation is often the mover of the markets.

It's often been mentioned that no one knows for sure what might trigger such a mania in the precious metals arena (even though many causes are cited as potentials), and perhaps little will it matter after the fact. But, once triggered, it should provide quite a show. Then we'll need to decide if it is speculation or if the monetary situation has indeed fundamentally changed or maybe (probably) both. Or, perhaps gold + silver simply continue to be priced higher in a gradual manner as time goes by. I certainly don't know but don't believe they will go down substantially for a good long time. Are the Elliot Wave believers still calling for sub $300 prices? Silly chartist predictions or severe Deflation? Won't it be tough to have deflation with +$60/barrel oil prices or ...?

GoldiloxSaudi repat#1347348/8/05; 13:50:03

@ mikal,

One might almost think they don't quite "trust" the banksters from an announcement like that.

Was it Another/FOA who reminded us that the banksters taught the oil-rich Arabs how to invest in Latin America and lose their robes?

TownCrierLatest arrival from von Braun ---- Central Banks and 'Reserves'#1347358/8/05; 13:50:58 (excerpts)

"If the American people ever allow banks to control the issuance of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property, until their children will wake up homeless on the continent their fathers occupied. The issuing of money should be taken from the banks and restored to Congress and the people to whom it belongs." -- Thomas Jefferson.

What exactly are central bank reserves? Not too long ago the answer would have been gold or a combination of gold and silver. Today it's different, so we are told, and the dominant reserve held by the central banks of the world are US dollars, which are estimated to comprise 70% of CB's total reserves, the balance being some gold and other paper currencies such as the Euro, the Yen and the Swiss franc. There are also other regional based currencies that make up a small portion of these reserves.

...The US currently is dependant upon its trading partners to finance its deficits and continue to hold these units which in turn are classified by these 'partners' as 'reserves'.

Recently, China has been told by the US Congress that it can't spend its reserves as it sees fit. The anti-China stance, when it came to the proposed acquisition by China of Unocal, is only the beginnings of a movement that can only affect the US itself, since it brings into doubt the very idea of the US dollar being the world's reserve currency. This privileged position has been impaired since 1971, and has been abused on an ever increasing basis by the issuing of debt, partially enabled by a willingness of other central bankers to continue to accumulate ever more of these non redeemable instruments.

For Congress to tell a large holder of these peculiar instruments that they can not even redeem them by buying assets priced in US dollars is tantamount to saying "yes, you have the money, but, no, you cannot spend it." Now what sort of a reserve is that?

Should China be concerned about what it called 'undue political pressure?' One would think so. And would not a signal be sent to the Chinese to say 'OK, let's buy something else!' But what?

Much talk is heard about diversification by central banks but as the US has the monopoly on central bank reserves, what exactly could other central banks diversify into? They have to find somebody else to be willing to buy or exchange their dollars first and that's the tricky part when it comes to the actuality of diversification.

Are they holding reserves in the true sense of the word, or are they merely holding liabilities that are uncollectible, unenforceable and unredeemable at that? And is this not what Thomas Jefferson was referring to all those years ago, failing only to estimate the size of the potential fallout by not including other countries as well?

^-----(see url for full commentary)-----^

I think that final point made by von Braun is a particularly good one. That is, no matter WHERE you live, if you have chosen an unwise type of reserve, the 'wrong' form of savings, then you may actually be much closer to 'homeless' than your assets currently seem to say you are.

The bottom line: a house that cannot stand the test of the storm is really no house at all.

Choose your savings/reserves wisely. Choose gold.


GoldiloxAg action#1347368/8/05; 13:51:48

Silver is "clinging" to Seven bucks today!
USAGOLD Daily Market ReportPage Update!#1347378/8/05; 14:28:21">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Monday Market Excerpts

August 8 (from Reuters) -- U.S. gold futures drifted to a softer close on Monday, hit by speculative liquidation as a strike by gold miners began as expected.

Summer volume in the market remained thin before a U.S. Federal Reserve decision on interest rates on Tuesday, dealers said.

At a U.S. Fed meeting on Tuesday, policymakers are seen delivering a tenth straight 25 basis-point increase in the benchmark funds rate, taking it to 3.5 percent.

Gold traders said the market also had priced such a rise.
COMEX December contracts slipped $2.50 to $440.30.

Meanwhile in South Africa, gold miners who are demanding higher wages stayed off work on Monday, bringing gold pits in the world's biggest bullion producer to a standstill.

The strike was the latest action in recent weeks in a nation plagued by huge income gaps between the rich and mostly black poor, more than a decade after apartheid's official end.

One lead negotiator representing gold producers estimated a daily loss of around 40,000 ounces and 130 million rand ($20.2 million) in lost revenue per day due to the strike.

"The strike was priced in and the fund buying from last week in gold and silver stopped -- that's why we came off on liquidation-type selling," said a desk trader in New York.

"It's range-trading now, and we'll wait to see what the dealers want to do," he added. "They might buy a little down here, but you don't know where the next big move is going to be."

TownCrierOil hits record on Saudi security threat#1347388/8/05; 15:07:19

LONDON (Reuters) - Oil prices hit a record high $64 Monday after warnings of militant attacks in the world's biggest oil exporter Saudi Arabia and on worries about refinery outages in the United States.

Concerns over the Saudi security situation coincided with news that another U.S. refinery had run into output problems, adding to pressure on gasoline supplies in the world's biggest consumer during peak summer demand.

News that OPEC's second largest producer Iran had resumed its nuclear work, despite European Union warnings of possible United Nations sanctions, further strained nerves.

In real terms, stripping out inflation, oil is still below the $80 a barrel on average for the year after the 1979 Iranian revolution.

But at an average of more than $53 for the year to date for U.S. crude, prices are well above those during the 1974 Arab oil embargo.

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

Two things. Although oil ITSELF hasn't changed, there are more USES for a barrel of oil today than there was back then. On the other hand, the dollar, while still the same in name, is certainly not the same in spirit as it was back then.

And by extension of these thoughts, therein can be found the rationale in choosing gold (instead of dollars) as your form of savings. Anticipate the scenario where gold comes more fully into vogue through improved usage as a MTM reserve asset in place of the intellectually and morally bankrupted post-Bretton Woods system.


Black BladeLicking Lips? #13473908/08/05; 16:00:49

WTI Crude at $64 and NG at $8.75

The problem for Crude is that production is at capacity and light sweet crude has hit "peak oil" production. Also note that refinery capacity is extremely tight as we in the US have not built a new refinery since 1976. Most of those refineries handle light sweet crude. We have nice inventories (including the SPR) but it is all heavy and heavy sour crude. It takes more heavy oil to get the same yield of distillate and gasoline than from light sweet crude.

Competition for remaining global oil (and natgas, coal, uranium, etc.) supply is intense with China and India ("Chindia") entering the market as new industrial powerhouses. This along with emerging middle classes in the Third World demanding a piece of the good life (cars, computers, cell phones, household appliances, etc.). Just tell Chang and Raj they can't have the same comforts in life as we do in the west and see where that gets you.

Today the most cited reason for the rise in the price of oil is the closure of the US embassy and two consulates in Saudi Arabia on security threats. Add to this possible terrorism with the change in Saudi leadership (although not considered a problem for US-Saudi relations). Al Qaeda would love to drive a wedge between the two governments now as there is speculation what changes in that relationship may be down the road when the next generation of the House of Saud takes over as the old generation dies off.

NatGas is already a concern due to limited land access to Federally owned lands and limits on drilling permits. But more important this summer is a return to normal summer temperatures that have "natural gas peakers" firing up to generate electricity on increased power demand (mostly air conditioning). NatGas injections are low and Canada's storage levels have fallen fast (they contribute 15% of US winter heating demand). The housing boom has also been a concern in the industry because virtually all new housing is heated with natgas. Meanwhile siting for LNG offloading terminals has been been another problem with NIMBY and safety concerns.

On the bright side, energy investors have made good money and energy workers have been fully employed for the first time in many years. I have been quite busy with up to five drill rigs at a time and running along with a couple of other projects for clients. This is quite a change when I was out of work for over a year a couple of years back (essentially living off dividends and funds from operations from royalties). In the US we have not prepared for the inevitable oil crunch and that has been quite beneficial for those in natural resource investments. In the end it will help to crush the USD and it is imperative to have a bit of "Portfolio Insurance" in Gold and Silver.

As always, get out of debt and stay out of debt, stash enough emergency cash for several months household expenses, accumulate Gold and Silver "portfolio insurnace", and start a storage program of nonperishable food and basic goods.

Licking my lips? You betcha!!!

- Black Blade (aka Dennis Erectus)

GoldiloxSimmons interview#13474008/08/05; 16:34:22

@ BB (aka Dennis Erectus) - there's a blast from the past!

Puplava interviewed Matt Simmons over the weekend for his final pre-sailing spot this summer.

Have you read "Twilight in the Desert" or listened to any of Simmons' talks?

I think I speak for the majority of posters in that we would highly regard your impressions of either or both.


TopazBond/Dollar#13474108/08/05; 16:50:21

Icessant anti-Dollar jawboning over the last several weeks has "finally" resulted in slightly negative (soft DX-soft Yield) market action.

Not what I'd call convincing though!

Black BladeMatt Simmons - Twilight In The Desert#13474208/08/05; 16:54:37

I have the book and am taking it slow to analize the material closely. It is very good and I see a real debate developing between Matt Simmons (Simmons and Co. Intl.) and Daniel Yergin (CERA - Cambridge Energy Research Associates). I tend to lean more toward Simmons on the "Peak oil" issue as he has researched the subject quite well. I think that Yergin is just a bit too trusting of Saudi claims despite the lack of "transparency". One thing is certain - that light sweet crude production has definitely "peaked".

Another book I have, but yet to read is "The End of Oil: On the Edge of a Perilous New World" by Paul Roberts, and a re-read of "The House of Nomura" by Albert Alletzhauser for fun.

- Black Blade

R PowellRelative to what..?#13474308/08/05; 17:11:58

I posted the MRCI night quotes link for anyone interested in watching the prices of crude, heating oil + unleaded climb. Crude is now over $64.00.

Every once in a while I see ALL the currencies down and it's then that I wonder what the relative values are relative to. They're all down now (site updates every few minutes) with gold up $0.10. I know it's just market noise but still I wonder (who'll stop the rain).

melda laureHere's a corker, POG/POO ratio of unity.#13474408/08/05; 17:25:25

Well talk about your "unredeemable" the sweet little troglodyte behind the banking counter wouldn't cash my paycheck. She said I need a "driver's license". or something like that. I tried to tell here I'm a retired sailor (wink!) and I never took up animal husbandry....

It is increasingly hard to get green stamps. It is almost silly. SNIP:

"If world demand for oil grows to say, 86 – 88 million barrels per day this winter heating season [from its current 83 - 84] without a corresponding ramp in supply, Simmons reckons the price of crude could spiral up in the magnitude of 5 or 10 times"

And that, my duckies, is at a constant dollar index value. The retro rockets are primed and ready. Which will explode first? POG? POO? Comex AG? Well, it wont matter. Orcs love explosions, and once they start, they'll use up the lot. And they wont have Goldman Sachs to call the top at 800 dollars the barrel.

R PowellBlack Blade#13474508/08/05; 17:28:49

Welcome back. You have been AWOL too long.

Your opinions on the approach of peak oil have been known for years. What's your opinion of this current run-up? Is this current move based on real supply/demand fundamentals OR just a majority belief that peak oil has arrived (as in speculative in nature)? Or, is it political in nature?

Rephrased: is this the big one? Real bull markets sometimes don't like to let too many people on board and I doubt that anyone has the nerve to short energy right now. If this is so, is there a down side move ahead? Just wondering as usual.....?????

Black Bladere: R Powell#13474608/08/05; 17:57:53

I doubt that this is "the big one". Just a realization among many that we are near "peak production", have refinery constraints, "peaked" on light sweet crude capacity, have at the very least bumped up against "production capacity", and that to keep the treadmill steady we have to pay more to produce "higher cost" oil to meet global demand amid the surge in demand from the world's new manufacturing powerhouses - "Chindia".

Also, note that many producing regions have recently "peaked" - North Sea, Mexico's Cantarell Field, and even Saudi Arabia's Ghawar Field. No new discoveries of "Super Giant" fields have been made since Cantarell in 1976. You need to find several smaller "Giants" to make up for the decline of the easy to find and produce "Super Giants". So far that has not happened as we lose 5 barrels of oil for every 3 we find (a losing proposition).

- Black Blade (Dennis Erectus)

Gotta hit the dojo for a couple of hours (link)

masBush sign's massive energy bill into law#13474708/08/05; 19:06:52

Out of the whole article, I like this bit the best.

"The bill recognizes that America is the world's leader in technology, and that we've got to use technology to be the world's leader in energy conservation," Bush said.

BB, you just mentioned that the last refinery built was when, 1976? Guess getting into the refinery business for heavy crude processing would be a good idea.

Isn't 25% of all the oil is consumed by the USA every day?

Flaccusmas#13474808/08/05; 19:12:55

Americans are expected to beat their breasts about that sort of thing in this politically correct world. But let me put it this way:

What if the United States did not consume 25% of the daily oil production? Where would the rest of the world be economically?

GoldiloxDaily Wrapup - Rob Kirby#13474908/08/05; 19:17:59


I have gone on enough about oil, but did so because in many regards, I feel the oil story parallels the same type of unsustainable structure we are currently facing in the world's fiat money regime. Too much un-backed money and credit is being produced for currency to maintain its value. Amazingly, there has been no credible audit of the U.S. sovereign gold reserve alleged to be largely stored at Fort Knox, West Point and the Denver Mint – for 50 years, coincidence ehh? The bulk of mainstream economists and media ‘have always assumed’ the Wizard – Easy Al Greenspan has everything under control and the Federal Reserve is really an inflation fighting do good organization. Great efforts are made on the part of officialdom to marginalize folks who challenge these long held views. Gold bugs contend that officialdom is selling gold - rigging its price to perpetuate an unsustainable fiat money system that is doomed to fail and obscuring their actions through obfuscation including everything from creative accounting to fudging numbers to outright lies and deceit. The claims from officialdom center on their proclamations that ‘they too have done the numbers and everything looks fine’ – with official reports of a strong economy, low unemployment and low levels of inflation. If the bugs are correct, officialdom has done the number alright, and the Achilles heel in the illicit rigging game is officialdom's bleeding stocks of physical metal required to perpetuate the game. If history is a guide and the fiat game plays out in the same manner as the oil game, officialdom will sweep the gold cupboard bare – right to the last bar – before they say uncle. If this is really what is happening, by the time the game is over, the price of gold will categorically go up geometrically. Count on it.


After a powerful commentary about Simmons weekend interview, Kirby compares the state of oil analysis with that on the financial front.

Flaccusmas#13475008/08/05; 19:20:21

Sorry. Misunderstood your post on first reading. Point remains but not directed at you.
GoldiloxLess oil consumption#13475108/08/05; 19:31:15

@ Flaccus,

Fewer skyscrapers and less debt, perhaps?

One thing the economic boom of the Strong Dollar Reserve has enabled is the transfer of more wealth to billionaires and the nearly constant lowering of living conditions for most of the workers of the world (first world included).

With rebellion from the IMF/WB strangleholds growing in third world countries, we are now seeing a second wave of resource transfer in the NAFTA and CAFTA debacles, that also further erode US manufacturing strength.

The RE bubble exhibits some very concerning risks, as struggling US homeowners will likely find the banks owning their property and renting it back as in the 1930's.

Hedonistic BLS figures hide the unemployed behind their official epithets of "underutilized" and "not looking for work". Adding these numbers in from the footnotes of their own reports brings unemployment well into double digits - certainly not conducive to stability in an exploding RE market. Latest RE numbers show that upward of 50% of homebuyers are in the "speculative investment" market, not purchasing their own dwelling.

This debt balloon thingy will likely end badly!

R PowellBasic silver fundamentals#13475208/08/05; 20:12:45

I've always been a believer that over the long, looong term, the law of supply and demand would set prices or, at least, highly influence them. In extreme situations, higher prices should be necessary to curb demand or channel smaller supplies to those who need that supply the most. Conversely, lower prices (sometimes below production costs) should discourage production when that production becomes too excessive. Coffee prices from about 2000 until mid-late 2004 are an example of a commodity priced below the cost of production. But the longer I study economics, the more convinced I become that I know very little.

But I'll post this link for what it's worth + for whoever is interested. The sources are suspect, as usual, but there isn't much of an alternative for number crunchers like myself. Anybody got any others..???

R PowellBB#13475308/08/05; 20:16:31

Thanks for the link..!
FlaccusGoldilox#13475408/08/05; 20:52:58

I would argue the opposite. American consumption elevates the world's workers, moreso than Marxist dogma could have dreamed. For every skyscraper built there are thousands in Africa fed. As for the debt, how much of this economy is an illusion; how much reality? Would you rather live in a prosperous illusion or a poverty stricken reality? Now there's a question the philosophers hanging on the periphery of this table might take pains to address.
masFlaccus#13475508/08/05; 21:05:09

Remove 25% consumption from the world today and what do we have? Lower oil prices? Better economies? Stability? No war in Iraq, thats for sure. No reserve currency? Pollution, no melting Greenland Ice lake. What else?
Take your pick. I may have it wrong, but that's the way I see it. We need better conservation methods, and that all points towards lower consumption. Or maybe we are reading this all wrong, could it be that the oil price isn't going up but the dollar is going down?
We wait and watch. Fed should have dropped the gold price yesterday by at least 10 USD's, will they be able to do it tonight? Be interesting if the gold price went up, that would really start to raise some questions about what is really going on with interest rate rises. (Junk bonds comes to mind).

GoldiloxIlusions#13475608/08/05; 21:37:41

@ Flaccus,

Interesting that use the word "illusion" in this "Made for TV" world situation.

Don't know how much time you've spent in third world countries, but I found just getting off the plane quite an experience. The mass migrations from "poor" agrarian lifestyles have filled the city streets with hungry beggers in most major cities. At least as poor farmers they had a chance to feed themselves.

I guess the bottom line is whether we really want to "build self-sufficiency" or just make everyone "beholding" to the IMF/WB model.

The IMF history (well documented) as been to "advance" huge sums to friendly junta governments - the lion's share of which is used for "police weapons" to protect the generalissimo's power. Little of it actually goes to "development". Once the locals realise thay have been hood-winked by those in power, the junta is overthrown and flees, leaving behind huge debts to the banks that propped up the generalissimo in the first place. The "renegotiations" of that debt includes "privatization" of their resources (selling them to foreign interests) so the process can begin anew.

NAFTA and CAFTA hold great promise to reduce the US work force to similar conditions of debt burden as soon as foreign interests decide to stop funding the "consumer miracle". ARMs have reached 40% of new home mortgages, setting new home buyers up for a serious ravaging of their last vestige of "savings".

The bottom line is that the 20th Century, aside from being the bloodiest in human history, with over 100M deaths by human hands, in addition to some of the most deadly famines in history, has actually aided the transfer of more assets to the smallest percentage of individuals in history.

While those of us with some open eyes on this forum struggle to obtain what we hope to sustain us in later years in a "safer" form of savings, our taxation resources, originally earmarked for domestic services, are being redistibuted to the collaborators of world-wide resource plunder. How much of our SSI contributions have funded the oil admin's resource wars?

Now that admin wants to give the SSI proceeds to the same brokers who destroyed our 401k's with their ENRON facade and "Y2K bubble. I get no sense of financial security from that plan.

I recommend you find a copy of "Confessions of an Economic Hitman" for further documentation.

GoldendomeWorld economy may well decline.#13475708/08/05; 22:33:05

Sir Mas: Remove 25% of world consumption and we will certainly have a different economy; not necessarily for the better prosperity of all. But your points are well taken and may happen in the natural course of events.

Matt Simmons made a point in the interview, that I don't think has been presented here yet.
It is, that the developed nations, in particular, have deluded themselves forever about the perpetual supply of cheap fossil fuels. They have developed cities, mass infrastructure, and business and industry that will now, in the near future, be unsustainable, as fossil fuels inexorably increase in price. By not insisting earlier on, that real prices be higher--by forcing production ever higher--developed nations have built their economies on false cost structures that may shortly lead to disaster.

He further opined that the Globalization of trade is coming at precisely the wrong time. His view, that soon companies aren't going to be able to afford to outsource world wide for every facet of their production components. Localization will be coming back into vogue.

GoldiloxSimmons#13475808/08/05; 22:50:46

@ Goldendome,

I especially liked the irony in his globalization remarks.

Increased localization being empowered by stifling fuel costs.

Who says market self-balancing principles are dead?

If this somes about, obviously, some new energy algorithms are gonna be needed.

GoldendomeSirs Goldi & Ned#13475908/08/05; 23:53:09

Goldilox: Isn't it interesting how the inflation or hyperinflation arguments clash with the deflationist views? Yet they both travel the same direction--toward disaster, along what may be parallel paths within sight of one another.

As J. Puplava has stated many times on his Financial Sense Newshour, he feels that we will suffer both inflation in required items (food, energy, health care, etc.) and deflation in leveraged financial items (real estate, bonds, stocks, etc.) both at the same time!

The question has been asked: How can you have deflation with $60 dollar oil? Why not with $100 oil? I think we can see that this could happen. The price of oil affects the pricing or profitability of a highly leveraged entity, group, or risk exposure, causing a large "hole" to appear where once was perceived a great fiat currency valuation---that is a deflation!
And should it spread, affect other markets and participants...well, who can say how many financial dominos could be threatened and fall. I have come to think that a deflationary "event" could cause a great knee-jerk movement into the monetary metals, faster than an inflation. So, yes, I think Puplava may be largely correct in his assertions that high rates of inflation and deflation may be able to exist together.

I was going to post a link for Ned, to a June 18th interview by Puplava with Robert Prechter at the Financial Sense Newshour, but my computer is acting up, not wanting to show URL's and I may need the assistance of second offspring to correct the mal-function. You know how that can be with we older technophobes. I listened to that interview again yesterday. Thought it good; it's little wonder that they agree on many and most things. Just how things progress and develop is a friendly point of controversy. So, Ned, if your interested, go to the "Ask the Experts" then click the 2005 Experts and look for the date 6-18-05 with Prechter. You can either listen or get a written transcript of the interview.

Have a great evening. Gdome

Topazthis might be an interesting diversion...#1347608/9/05; 02:14:42

...from watching the Lines.
>The Red Planet (MARS) is about to be spectacular! This month and next, Earth is catching up with Mars in an encounter that will culminate in the closest approach between the two planets in recorded history.
>The next time Mars may come this close is in 2287. Due to the way Jupiter's gravity tugs on Mars and perturbs its orbit, astronomers can only be certain that Mars has not come this close to Earth in the last 5,000 years, but it may be as long as 60,000 years before it happens again.
>The encounter will culminate on August 27th when Mars comes to within 34,649,589 miles of Earth and will be (next to the moon) the brightest object in the night sky. It will attain a magnitude of -2.9 and will appear 25.11 arc seconds wide. By August 27, Mars will look as large as the full moon to the naked eye. Mars will be easy to spot.
>At the beginning of August it will rise in the east at 10p.m. and reach its azimuth at about 3 a.m. by the end of August when the two planets are closest, Mars will rise at nightfall and reach its highest point in the sky at 12:30a.m. That's pretty convenient to see something that no human being has seen in recorded history. So, mark your calendar at the beginning of August to see Mars grow progressively
>brighter and brighter throughout the month.
>Share this with your family, friends, children and grandchildren.

Golden LionheartThe chances of anything coming from Mars...............#1347618/9/05; 03:42:28

If Mars ever looks as big as the Full Moon to the naked eye
then we Earthlings are in a lot of trouble. Never happen! But lets hope the occurence bodes well for gold.

Should it look as big as a full Moon then I will publically declare that George Walker Bush is the greatest President the Estados Unidos has ever had.

SundeckMars and the golden (or is it silver??) Moon#1347628/9/05; 04:07:43

Hold on a minute, or at least a few secs, Sir Topaz...the Moon subtends approximately 30 minutes of arc at the Earth (that is, about half a degree...roughly the same as the Sun, a coincidence of Nature that has lead to things like total eclipses and annular eclipses of the Sun), but at closest approach, Mars subtends only about 25 arc seconds at the Earth...that is, less than half an arc minute.

Thus Mars will appear less than a sixtieth of the diameter of the Moon (sixty arc seconds in an arc minute...thanks to the Babylonians...ancient Iraqis...remarkable people...had lots to do with finance as well...don't know if they had a FED 'though...but they certainly had lots of gold).

Golden Lionheart is pretty safe in his assertions...and George Walker Bush will NEVER need to worry! the Moon golden or silvery...

Take care Sir Topaz...


TopazG - Lionheart#1347638/9/05; 04:08:09

I just spent a half-hour scanning the eastern sky for "Mars" then, on giving up and reading your post I thought I'd better check.
Seems as if I'm 2 Yr's LATE!!
...and who said snail-mail was slower than email!

TopazTouche too Sundeck.#1347648/9/05; 04:13:52

'tis a foin way to start a Golden Day ;-O
TopazSix Years too early into Gold...#1347658/9/05; 04:38:02

...Two yr's late on Mars, Bad-Timers Anon might be worth a Google!
Speaking of which, that Google-Earth is worth a look, spent Hours last night pinging the Planet. THE Status simbol du-juor would be to have your House whited out methinks.
Meanwhile, back in the cess-pool...
...our Gold seems to be suffering from futuritis with Dec now holding sway and "current" action taking a back seat.
The Good souls at NovaScotia ponied up 1K contract equivalents Yesterday for a tidy Monthly total to date of 6.9K

We're not done with Aug yet I feel!

GoldiloxMars close approach#1347668/9/05; 04:56:28

McCanney mentioned this disinfo on his radio show Thirsday.

Close approach might make Mars appear a scosh brighter, although one would be hard pressed to tell in most light-polluted environments, but certainly not much, if any, larger, except with a good telescope, where one is multiplying the effect.

The Moon is a 1/4 Earth 's radius, and Mars is about 1/2. It would need to approach to about twice the Moon's distance to appear equivalent in size.


GoldiloxMore Strike Non-news#1347678/9/05; 05:06:54


Johannesburg - The rand recovered against the dollar yesterday, shrugging off news of the biggest mining strike in 18 years as the focus turned to domestic and US interest rates.

The rand moved in a thin band ahead of the Women's Day public holiday today, boosted by offshore investors selling dollars and euros.

At 5pm the rand was bid at R6.4462 a dollar, 1,87c stronger than its close on Friday. It hit an intraday low of R6.5050.

"The rand has been very quiet. Initially it followed the euro, but offers came back in from offshore names. With the holiday [today], there has been limited interest," said a Johannesburg trader.

About 100 000 South African gold miners downed tools yesterday to demand higher wages in the world's top bullion producer, but traders said the stoppage was largely dismissed in currency markets.

"It's not considered much of an issue ... Strikes in South Africa don't seem to last long," the trader added.


So far, so Ho Hum!

GoldiloxStrike Question#1347688/9/05; 05:09:16

Is the Strike a big enough deal that one might expect some PoG manipulation to make them appear unsuccessful and go back to work?
krashAlan Greenspan Rants Against Threat to US Dollar Due to Iran and PetroEuro #1347698/9/05; 08:25:43

Written by Felix at (Satire)

WASHINGTON (Reuters)—On Wednesday, US Federal Reserve Chairman Alan Greenspan ranted against the planned switch to the "PetroEuro" by Iran for oil sales which he claims endangers the PetroDollar and the plain old American greenback.

"I can't stand it anymore!" shouted Greenspan during Congressional testimony in which he alternately chewed on crack cocaine and gulped quaaludes. "Iran's Oil Bourse will be denominated in PetroEuros and that is a grave threat to the US dollar and our domestic interest rates. We must bomb those Persians back to the stone age just like we did to the Iraqis!"

To illustrate his point, Greenspan withdrew a 9mm Glock from his briefcase and repeatedly fired it into the ceiling of the Senate hearing room until cordite fumes and the clatter of spent shell casings filled the chamber. Guards quietly asked Greenspan to tone it down.

"I'm the God and ruler of the PetroDollar and the greenback and interest rates and no one can stand in my way!" Greenspan bellowed. "We must bomb Iran all to hell and gone and topple its government with an invasion just the same way we did to Iraq because Saddam also switched to PetroEuros for his oil sales!"

Aides quickly converged on the outspoken Fed Chairman and calmed him down by reading from the novel "Atlas Shrugged" by Ayn Rand. They also took away his crack cocaine and his Glock.

Greenspan was under an understandable degree of stress because he was out on bail after being recently charged by police with killing off large sections of the American middle class with his Federal Reserve policies.

The charges arose due to revelations in the new book by economist Ravi Batra "Greenspan's Fraud: How Two Decades of His Policies Have Undermined the Global Economy" -- see the related story "Alan Greenspan Charged With Killing Off Middle Class, Setting Stage for Economic Collapse" (click here).

Under Greenspan's questionable management of the Federal Reserve, America's rich have gotten a lot richer and the poor have gotten a lot poorer as the middle class have been eroded, just like in the 1920s before the Great Depression began. Many believe such an unjust division of society reduces purchasing power of the masses and causes economic collapse and depression, which is just about to occur today too. The US dollar could lose its status as the world's reserve currency for trade, oil sales and foreign exchange holdings, and could collapse in value.

Now to potentially worsen things for the US dollar, the government of Iran is planning to open its Oil Bourse in March 2006 to sell its oil for Euros, rather than for dollars. Iraq had also just begun selling its oil in Euros in 2000 rather than in US dollars which many believe was the real reason that prompted the US government to invade that country in 2003, in addition to seizing control of Iraq's oil wealth to the benefit of large US oil companies like Exxon Mobil and Chrevron Texaco.

Many currently believe that the US military is even now planning to attack Iran with nuclear weapons in order to similarly prevent its moving to the Euro, and to make Israel happy. The pretext for the attack is the hysteria being orchestrated by western media over Iran's enrichment of uranium for peaceful purposes.

Meanwhile, other nations including Russia, China and Japan are diversifying their foreign exchange holdings out of US dollars, and out of US treasuries, further lowering the value of the US dollar and raising US interest rates.

"I'm in charge of interest rates, not some slanty-eyed Eastern tinpot despot government," sobbed Greenspan as he finally broke down. The Fed Chairman was last seen being carried from the Senate Chamber on a stretcher and in a strait-jacket with a strong sedative being fed into his arm in an IV drip.

USAGOLD / Centennial Precious Metals, Inc.FREE Gold Information Packet...#1347708/9/05; 11:55:25

TownCrierFOMC Policy Statement -- August 9: Rate increase to 3.5%#1347718/9/05; 12:22:59


The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 3-1/2 percent.

The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Aggregate spending, despite high energy prices, appears to have strengthened since late winter, and labor market conditions continue to improve gradually. Core inflation has been relatively low in recent months and longer-term inflation expectations remain well contained, but pressures on inflation have stayed elevated.

The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability.

Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Roger W. Ferguson, Jr.; Richard W. Fisher; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; Anthony M. Santomero; and Gary H. Stern.

In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 4-1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.

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

More of the same old same old.


Federal_ReservesFED statement#13477208/09/05; 13:36:48

What a joke. No mention of the credit bubble that is driving consumer spending, nor the trade deficit or fiscal deficits, they mentioned a good labor market but no mentioned that wage growth is paltry and at record lows, only a little by-line about the energy crisis and no mention of the fact we are running out of crude oil in the next 10 years - these guys are living in a Goldilocks dream land. No real analysis or understanding of what we face anywhere at the FED, and for that matter in the government or media. Prepare for the crash folks. Idiots are in charge. No truth telling anywhere at anytime at any level.
Survivor@ Federal_Reserves#13477308/09/05; 13:54:26

Those boys know full well what's going on. They are in a game of confidence and spin. If they drop the fantasy rhetoric for even a minute it, is game over for them.


TownCrierCBOT aims to avoid repeat of June 10-year expiry woes#13477408/09/05; 14:44:10

CHICAGO, Aug 9 (Reuters) - Some of the basic ingredients look the same, but after a controversial expiration for 10-year Treasury note futures in June, the Chicago Board of Trade hopes for a tamer outcome in September.

That is especially so with the U.S. Treasury looking back at events to sniff out possible wrongdoing...

Problems in June revolved around scant supplies of the cash 10-year note that was cheapest to deliver against CBOT futures, and questions on whether holders of those notes were deliberately keeping supplies off the market.

[...In June, low supplies of the CTD note led to a series of "fails" in the cash market, when sellers of the security were not able to deliver the note to buyers.]

Each contract represents a U.S. Treasury note with $100,000 face value.

Stung by events in June, the Board of Trade on June 28 told regulators it would change some of the terms of its Treasury futures contracts. .....position limits will apply for the final 10 trading days for expiring Treasury futures contracts. For 10-year note futures the limit for any person will be 50,000 contracts.

For its efforts, the CBOT got a rebuke from the Futures Industry Association, a Washington-based lobbying group whose members include major investment banks.

...Separately, the Treasury is considering setting up a special lending facility to address liquidity problems.

Traders need to be aware that the cheapest to deliver note is "just one issue, and that futures might not always be able to price off the CTD," he said. "Going to the next cheapest note can be a costly matter, but it exists."

The June expiration showed that the CBOT has in some ways become a victim of its own success.

Volume in Treasury debt futures is up sharply while supplies of cash notes are relatively flat, increasing the chances of bottlenecks at expiration.

^----(see url for full article)-----^

It is my singular greatest hope for this day that everyone here who reads this article will fully comprehend it, and more importantly, will see the important applicability to the 'liquidity' and pricing dynamics of the gold market.


968@ Towncrier#13477508/09/05; 14:56:29

Very, very interesting posting ! Thanks !
Clink!Another marker in the road ......#13477608/09/05; 15:05:15

Catchy slogan :- Bubbles are for Bathtubs !

This site isn't actually up and running yet, but you can see the trend. If this isn't an advert for the Greter Fool Theory, I don't know what is.


Clink!Ermmm#1347778/9/05; 15:16:04

That last post of mine was, of course, also an advert for the Greater Bad Speler.

USAGOLD Daily Market ReportPage Update!#1347788/9/05; 15:24:16">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Tuesday Market Excerpts

August 9 (from MarketWatch) -- Prices for gold futures in the evening session posted slight gains Tuesday as traders digested the Federal Reserve's decision to raise interest rates. "Gold has consolidated nicely this past week and there's nothing in the Fed news to cause it to drop sharply," said Peter Grandich, editor of the Grandich Letter.

"The fact that the U.S. dollar can't rise sharply in face of another Fed hike is very bullish for gold, and likely to give it cause to resume its uptrend for the balance of the week," he said.

September gold was last at $440, up 20 cents in evening trading.

Gold for December delivery closed at $439.80 on the New York Mercantile Exchange, down 50 cents.

Shortly after regular trading for metals futures ended Tuesday, the Federal Open Market Committee raised its target for short-term interest rates by a quarter percentage point to 3.5% and gave no hint that it is interested in stopping anytime soon.

"The Fed has become quite predictable, and the market response has become even more so," said Dale Doelling, chief market technician at Trends In Commodities.

The euro climbed a bit following the announcement, and that "cements the fact that the dollar is dying and those traders who are now long the major foreign currencies are about to do a serious tap dance on the heads of the dollar bulls," he said.

In turn, "this will eventually allow the precious metals to break out of this consolidation range and take prices to levels not seen in decades," Doelling said.

(from Reuters) -- Consultant CPM Group said strong investment demand has dominated the gold market through the first half of the year, though interest has waned since the first quarter when physical demand bolstered prices near last year's 16-year high.

CPM said in its Gold Survey 2005 that the market still was benefiting from the most sustained investor buying in at least 60 years, even though buyers appeared more cautious on gold since April.

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

TownCrierGold prices seen rising further on festive demand#1347798/9/05; 15:53:55

(Mumbai)August 10, 2005 -- Global gold prices rose in the second half of July recovering from a declining trend in the first half of the month, a report by the National Commodity and Derivatives Exchange said.

The upward trend in gold prices should continue on speculation of a higher demand ahead of the Chinese New Year and upcoming festive season in India, the report said.

There was a continued disconnect between the price of gold and the dollar since mid-May... but the link became weaker over the past three months.

The strong inverse relation between gold and dollar resumed in the second half of July. The impact of soaring crude oil prices on the world economy and the revaluation of the yuan weakened the dollar and increased the value of gold.

...Another development seen supportive of gold is the strike at South Africa mines, which many fear, may affect the global supply, the report said.

^---(see url)---^

This final point on supply effects out of S.Africa recalls the general point from my previous post regarding volume in futures markets bing up sharply while supplies of the underlying 'physical' deliverable are constrained.

As noted in the article, a mitigating source of liquidity to bridge the futures market (price dynamic) with the spot 'physical' market is through lending of the underlying asset.

(For that, please recall this excerpt, "the Treasury is considering setting up a special lending facility to address liquidity problems.")

In this financial world, with so much futures-driven pricing going on in everything, and so much artificial supply as a result of lending activities to provide, essentially, price-depressive liquidity, how on Earth can an owner of an asset ever hope to find a point of solid ground as a benchmark from which to assess a relative value of his wealth?

That's where we perceive that the architects of a new IMS reserve paradigm will turn to FOA's "free gold market" as the bastion of stability and benchmark for the easy determination of relative monetary values.


TrurlMars closest approach#1347808/9/05; 16:55:54

This is a hoax:

It it easy to propagate information on the Internet.

I would say little of it is true.

You need to learn for yourself sources you can trust.

...Being here is a good start...

ToolieTownie,#1347818/9/05; 17:18:27

Let's see if I "fully comprehend" your post.

What I should take from it is this: While the Treasury is capable of cushioning a failure to deliver notes to buyers due to naked shorts, they would be hard pressed to cover a failure to deliver physical bullion.

TownCrierPolicy recommendations to shift from dollar predominance#1347828/9/05; 17:55:24

International investors poured vast sums of money into East Asia and Latin America during the mid-1990s, when the emerging-market boom was at its peak. Then Thailand stumbled, panic seized the markets, and boom gave way to bust. Investors suffered large financial losses.

Asian countries suddenly experienced large capital outflows, and the subsequent macroeconomic pressures plunged into crisis countries that had been growing rapidly.

Much the same had happened in Latin America when the debt crisis broke in 1982: The banks that had lent money to the region suffered years of anxiety capped off by substantial losses, and the countries that had been growing nicely suddenly found themselves confronting a lost decade.

Latin America again suffered a similar fate a few months after East Asia stumbled, in 1998.

Can feasible policy actions curb the sequence of boom and bust and thus permit both investors and emerging markets to tap the potential benefits of capital mobility without the costs of crises?

[IIE News Release] Washington, DC -- A new Institute for International Economics study by Senior Fellow John Williamson concludes that a series of new policy actions by creditor and debtor countries could curb at least some of the volatility in capital flows that causes so many problems for emerging market economies and investors alike. In Curbing the Boom-Bust Cycle: Stabilizing Capital Flows to Emerging Markets, he proposes several initiatives with this aim:

-- Emerging markets should limit, and perhaps ultimately eliminate, foreign currency borrowing by their governments. These governments should instead start issuing inflation-indexed and plain vanilla bonds on their local markets, and growth-linked bonds on the international market.

-- Emerging-market governments should also discourage their private-sector borrowers and lenders from issuing and holding assets denominated in foreign currency since currency mismatches in debtor countries aggravate crises. This might be accomplished by imposing higher taxes on interest earned on foreigncurrency assets than on interest from domestic-currency denominated assets, or by limiting the tax concessions on interest on borrowing that is denominated in foreign rather than domestic currency.

-- Emerging markets ought to retain the right to use capital controls in certain situations, especially where they are being flooded with excessive capital inflows.

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

This brings to mind evidence of early trail blazing in a portion of the Wim Duisenberg memorial speech by J-C Trichet that 968 brought up here during Saturday's Forum:

"Equally, Wim's influence at the European Monetary Institute ... where the crucial decisions to prepare effectively the single currency were wisely taken, including the decision that the ECB should have all its accounts in euro from the outset, which owed a lot to Wim"

In the end, it comes down to recognition and efforts toward eliminating exchange-rate risks, not only as pertains to the value of international obligations, but also to the value of international reserve assets held on the CB's balance sheet.

The comments above address the potential problems with respect to obligations.

And, to address the other concern, given the expansive nature of national (or regional) montary systems found everywhere, there is nothing better than a mark-to-market system of gold assets -- within a "free gold" pricing paradigm -- to ensure that there is a class of "international reserves" for which the price/value will never significantly drift adversely to the locally denominated balance sheet.


TownCrierToolie, with regard to physical#1347838/9/05; 18:14:41

I wouldn't say "hard pressed" to cover (i.e., prevent) a delivery failure; after all, this is exactly what's been going on with success for as long as gold lending (or 'leasing', if you prefer) has been in practice.

In effect, the futures market and lending practices under consideration have worked together to provide willful buyers with a pricing subsidy for the acquisition. The larger point that I've tried to make in adjacent posts is that despite the success of the effect, it can't be continued forever. And even more important is the consideration that the process need not necessarily be tolerated to the inevitable failure/exhaustion point, but rather may be abolished sooner on international political will to reap the benefits of strength and stability of a central banking structure upon a foundation of rightly priced MTM physical gold reserves.


PRITCHORichard Russells Latest Comments - - Yes he Does mention gold!#1347848/9/05; 18:45:10

Richard nails it down in simple terms - - See Link

SNIP - -
Russell's "What If?" In my dreams I evidently ask a lot of uncomfortable questions. What if? What if the Bush family never had any connections with the Saudi royal family, and what if the US never had any interest in keeping the corrupt Saudi dynasty in power? What if the US had never backed all the assorted dictators who were supposed to keep the "bad guys" out of the Mideast, all the while keeping the Mideast "stable" and oil cheap? What if the US had stayed totally out of the Mideast, and what if the US had just bought the oil instead of trying to control it? If all that had occurred, would oil be any more expensive than it is today at over $60 a barrel?

If all that had taken place, would young Americans be dying in the deserts of the Mideast? If all that had occurred, would the US be spending over a billion dollars a day in Iraq? What if?
I thought the piece below was so thought-provoking that I wanted all my subscribers to read it. Many thanks to Bill Bonner.
Convenient Beliefs by Bill Bonner from the always excellent Daily Reckoning site. "America became an empire without anyone noticing. But Americans came to believe in empire…so much so that they are willing to spend hundreds of billions of dollars on it."

We have been wondering about the way people seem to play whatever role is offered to them.They adjust their beliefs to the role. Where the roles come from, we do not know, but we marvel at how people seem to come to believe whatever they need to believe when they need to believe it.

Alan Greenspan believed strongly in gold –until he became a central banker. Then, he believed he could do a better job than gold. The belief was necessary to the job, just like a wrench to a plumber.

In public life, for example, people generally believe in the system in which they live. We are all democrats in the United States. We believe in electing our leaders. There is no particular reason why this method should be superior to having leaders selected by lottery or hand-to-hand combat. Throughout most of human history, people believed in other systems…and lived in other systems. Are we smarter than they were? Maybe not. If we lived in a kingdom, we would probably believe strongly in monarchy. But circumstances change…and ideas change with them.

America became an empire without anyone noticing. But Americans came to believe in empire…so much so that they are willing to spend hundreds of billions of dollars on it. They maintain military bases all over the world – to protect a world economy that once served their own economic interests. Now, the pax dollarium serves the interests of their creditors and competitors…but Americans still believe in their empire. They believe they must meet challenges in Iraq, Iran, North Korea…all around the periphery of the empire. They might just as well think that the poor Iraqis, Iranians and North Koreans can take care of their own problems…but the thought wouldn't be compatible with the imperial role.

A rich person plays the role of a rich person. He is the person who must find ways to get rid of his money. He cannot get richer and richer forever. Trees do not grow to the sky. There is no yin without a yang…no day without night…no boom without bust. Everything regresses to the mean – including the wealth of an individual or a group. Even our own lives regress. No one was ever born who was not destined to die. The mean is the grave – for which we are all bound.

When a man gets a certain amount of money, he has to find ways to spend it. And so he takes up the beliefs of a man who needs to spend money. He believes he needs a bigger house. He believes that more expensive wine is better than the cheap stuff. He may even take a course on wine…and bore his friends and neighbors with his sophisticated palette.He believes a Maybach is superior to a Honda. He believes he needs a mistress. Or a yacht.

He gives himself handicaps until he is able to get his wealth down to more reasonable levels – closer to the mean, that is. If he dies before his work is done – that is,while he still has some change in his pockets – he can be sure that the next generation will finish what he began. In a few years, the family will have average wealth rather than extraordinary wealth.

So, too, does a rich society need to give itself handicaps – so that its wealth and power can come back to a meaner level. America surpassed Britain as the world's leading economy in 1910. Its lead gained over the next five decades – greatly aided by two devastating European wars, one of which it prolonged and made far more disastrous for Europe than it otherwise would have been.

But America's handicaps increased. It now spends almost as much on its military as all the rest of the world combined. After 9/11 it might have put a few more cops on the case…instead, it launched a whole "war against terrorism" – another costly, distracting handicap. Over the years, it has also increased its expensive social welfare programs; the economic freedom that made the U.S. economy the leader of the world has given way to a rigged, controlled, and regulated economy. General Motors has the handicap of having to spend thousands of dollars worth of health and retirement costs for every car it builds. Its competitors in China have almost none.

The empire is still in business. But it is, like General Motors, wobbling under the weight of its handicaps…and headed for the graveyard.

GoldiloxIs the Stock Market Predicting Happy Times?#13478508/09/05; 22:57:30


The growth of corporate profits has coincided with the decline in incomes for the average American working man and the yawning chasm separating the haves and the have-nots continues to widen. Steven Rattner, writing in the August 8 edition of Business Week, notes that the top 1% of earners take a larger piece of the economic pie now than at any time since the 1920s. "Over the past 30 years, the share of income going to the highest-earning Americans has risen steadily to levels not seen since shortly before the Great Depression," writes Rattner.

Rattner tells of how the disparity between rich and poor has progressively widened over the past 30 years, with the share of income garnered by the top 10% of Americans growing by nearly a third, while the share of the top 0.01% of households with an average income of nearly $11 million has multiplied nearly four times. The blame for this situation, according to Rattner, is in part globalization (the emergence of the Global Economic Order), the employment of cheap labor in emerging markets to the exclusion of American labor, and an increasingly regressive tax code.

To the above list we can probably add the periodic resurgence of stock bull markets, since they tend mainly to the aggrandizement of the haves and to the penury of the have-nots. This has been eloquently described in George Brockway's magnum opus, "The End of Economic Man." In his book, Brockway details how the stock market can only rise by sucking in more and more money, which is thereby denied to the producing economy.

"The bull market that started in 1982 took five years to absorb a trillion dollars," wrote Brockway in 2000. "The bull market that started in 1988 absorbed a trillion dollars in less than four years and is well on its way to six trillion more...but the devastation, disorder, and despair resulting from the extraction of $7,000,000,000,000 from the producing economy in less than twelve years challenge our capacity to understand."

He concludes, "The economics of the rational greedy economic man failed our forebears. It is failing us. We fail ourselves if we refuse to understand that failure."


Clif Droke's commentary over at Financial - it speaks for itself.

GoldiloxDUMB AND DUMBER - Sol Palha and John Tyler#13478608/09/05; 23:04:48


Now we can understand why so few people truly know the true significance of Gold and how it could end all the misery caused the insidious silent killer tax other wise known as inflation. It seems that things will have to get so bad before this generation attempts to understand the true power of this powerful metal. This is another reason why Gold has not appreciated as fast as say real estate and some of the other hot commodities; when the panic hits though it will move rather fast. The only problem is that no one really knows when this scenario will unfold; we seem to be getting closer to it with the passage of each day (and the printing of billions of more dollars each year).

This also proves two points:

One should apply the contrarian perspective to every aspect of ones life and not only to the investing aspect if one is to be a true contrarian; do not forget the mass psychology component too. It also illustrates the paradox theory in full effect one never gets what one chases or hopes for. There is no room for hope or desperate people (those who chase usually are very desperate). In their desperate attempt (it may not seem desperate but study the actions of most parents and you will find that in general it is) to give their kids a better live then they had they are actually giving them one that is infinitely worse then they could have ever imagined.

Once again we find ourselves mouthing the same phrase "welcome to the new world order", an order which will be built on chaos and the "I want everything now syndrome".

The only thing that ever consoles man for the stupid things he does
is the praise he always gives himself for doing them.
-Oscar Wilde 1856-1900, British Author, Wit

GoldiloxLong-Term, 1995-2007, Pictures of the US Housing Supply-Demand, Vacancy, and Renters vs. Owner Occupancy#13478708/09/05; 23:14:31


The Costliest Lie In History

Does anyone believe that the economists who work for the real estate industry don't look at the US Housing Inventory data? If they don't then they must be fired. How could it be possible that none of them look at it?

And why is it that they never mention this data when they make claims about the supply falling short of demand? Could there be a collusionary conspiracy to hide the facts?

As the data clearly show, the incessant propaganda by the Unreal Estate industry in the US, mostly over the past two years, that there is a shortage of supply to meet the demand for housing is a BIG LIE. In terms of the financial damage to Americans, who have borrowed trillions, it might prove to be the costliest lie. I first became convinced of this lie when I read that the California Association of Realtors’ economist put out a number for the current demand in California at 250,000 per year. The data showed the actual demand at less than half that amount. Why 250,000? Because the permits were running at 215,000. One must pick a number higher than the permits to scare people into the future scarcity, a scarcity that simply does not exist.

There are lots of vacant housing units all over America and California and they keep increasing in numbers every day that the sun sets.


I picked a few paragraphs to highlight his conclusions, but I recommend reading the entire piece by Jas Jain to get a proper view of his hypothesis and support. This is a very interesting look at the housing market.

GoldiloxAN ASSET ALLOCATOR'S NIGHTMARE - by Doug Wakefield#13478808/09/05; 23:33:10


The world of modern finance refers to diversification as the use of non-correlating assets. The College of Financial Planning's Investment Planning textbook teaches that, "Diversification and the reduction in unsystematic risk require that assets’ returns not be highly positively correlated. When there is a highly positive correlation, there is no risk reduction. When the returns are perfectly negatively, risk is erased. This indicates that combining these assets whose returns fluctuate exactly in opposite directions has the effect on the portfolio of completely erasing risk."

In short, assets that move in step with each other have more potential risk than assets that move in opposite directions from each other. My purpose here is only to say that true diversification can be useful in reducing certain types of risk.

Our common sense and life experiences tell us as much. We have all heard the old saying, "Don't put all your eggs in one basket." We all agree that if we have five people each carrying a basket with one egg, we have less chance of all of them getting broken than if we had one person carrying all five eggs in one basket. The problem is that the current situation appears to be more like 5 people running a race with their legs tied together on a rainy day after the staying up all night at a keg party.

**** insert charts ****

So as you can see from these numbers, with the exception of the 30-year government bond, over the last 2 years all of these indices have exceeded the highest 20-year average returns of the S&P 500.

To see what has caused all of these indices to move in step with stellar returns for the last two year, we need look no further than the monetary policies of the Federal Reserve. We are floating on a sea of liquidity. From June 28, 2003 to July 18, 2005 the money supply, as measured by M3, has grown by $836 billion dollars from $8.913 trillion to $9.749 trillion. 6 From the indices presented here and the GDP and other numbers coming from the government, one would think that we have, once again, inflated our way to victory. As for the debt that has been created along the way, (don't worry) we'll inflate that away too.

However, oddly, since the first Federal Funds Rate increase was announced on June 30, 2004 and in spite of its inflationary monetary polices, the 30-year government bond is up from 105.61 to 115.31. This is what we would expect to see if the Fed had cut interest rates or kept money supply growth to a minimum. As we are all aware, the Federal Reserve has raised its rate from 1% to 3.25%. When government bonds go up almost 10% in an environment where the Fed Funds Rate is increasing, this does not bode well for future economic prospects. The predominant theme in history has been that when an economy has grown weaker, bonds prices have gone up. When inflation concerns are tame and business prospects are bleak, we see a flight to the safety and returns of the government bond. When the economy picks up, business prospects expand, and inflation heats up, bond prices fall. So while the stock market churns out high returns, the bond market does not seem the least concerned with inflation or a stronger economy. Once again, something is wrong.

So based on our common sense, modern financial theory, and decades of price history on the S&P 500, we know that the real world is screaming a story far different than pretty pie charts of average annual returns produced to give investors a false sense of security. Coloring the eggs differently will not make investment portfolio returns safer. A lot of eggs are about to be broken.

Chris PowellFrom GATA's Gold Rush 21: The Dawson Declaration#13478908/10/05; 01:30:02

The summary and conclusions of the conference.
GoldiloxMining industry cannot afford strike or wage demands, says Harmony#1347908/10/05; 04:25:21


The wage increase demanded by the National Union of Mineworkers (NUM) was unaffordable, and if the union did not moderate its demands a prolonged strike would result, Harmony Gold CEO Bernard Swanepoel said on Monday.

He was responding to questions about the industry-wide strike that began late on Sunday, after the presentation of the group's results for the quarter and year to June.

Swanepoel said the package of demands by the NUM took their position closer to 15% than 10%, while the package offered by the mining groups would cost them 6%-6,5%, which is significantly above inflation. The mining industry could not afford a strike, but neither could it afford the increases demanded by the unions, he said.


Looks like the SA miners are caught between the proverbial "rock and hard place."

GoldiloxGold up in Europe, shrugs off rate rise#1347918/10/05; 04:29:08


LONDON, Aug 10 (Reuters) - Bullion firmed in Europe on Wednesday, taking an expected hike in U.S. interest rates in its stride and was seen consolidating recent gains and looking to currency markets for short-term direction.

The U.S. central bank lifted its funds rate for a 10th straight time to 3.5 percent on Tuesday and said more "measured" increases were likely. The Fed gave no signal it would soon wrap up the credit-tightening campaign launched last year.

Silver managed to drag itself away from a two-week low scored the previous day, while platinum and palladium were little changed.

By 0851 GMT, spot gold was at $435.20/436.00 a troy ounce, firming from New York's late quote on Tuesday of $434.30/435.10.

Higher interest rates can be negative for gold as they increase the cost of funding a long position or the opportunity cost of holding an asset that yields nothing.

"I just think the opportunity cost for holding gold gets more expensive after every (Fed) meeting," said Simon Weeks, director precious metals at ScotiaMocatta.

"I would still prefer to sell rallies and I still think the wheels will come off the bus at some point."

But some analysts said the link between gold and interest rates was much weaker than generally perceived.

"We continue to believe that rising interest rates will not prevent a continuation fo the gold price rally which began in April 2001," Alan Williamson of HSBC Bank said in a report.

He also noted the current net long position on the New York gold futures market was some three million ounces heavier than when Fed tightening began.

In the shorter-term, gold would find it tough going to crack back through last week's five-week high at $439.10.

On the downside, buying was seen emerging around the 200-day and 100-day moving averages at $430 and $427 respectively.


Jawboning the price down just isn't working - DARN!

GoldiloxPrevious post#1347928/10/05; 04:31:42

For the "Gold is money" folks, this a clear-cut case of "Money talks and BS walks!"
GoldiloxFood for thought on Saudi funds repat#1347938/10/05; 04:43:42


We reported to you on Monday that the Saudi's are making no secret of repatriating $360 billion from the US to other places closer to their home. After consultations with Cliff at, I've come to consider the Saudi moves one of the most interesting of the past six-months. Just collecting the headlines puts it in perspective:

July: Saudi Foreign Minister resigns
August: King Fahd dies
US shuts down embassies over terror threat
Oil prices hit record

What would drive the Saudi's to pull out their money from the West without so much as trying to hide it from the public? A number of disturbing possibilities come to mind, but the two that are at our top of the heap are a pending Saudi production decline or perhaps the Saudis have a "heads up" on a financial disaster to come.

We see the theme of the Saudi's "suddenly" (*over a few months) "running out" of oil as prospect #1. Not that they will actually run out, per se, but they will likely according to industry experts like Matt Simmons, run into huge problems with water cut. The only way the Saudis have been able to maintain their current production levels is to inject huge amounts of seawater into down wells in order to push oil up out of extraction wells. Fine, as long as it works, but the difficulty comes as the oil field being exploited reaches its end-of-production zone. Here, what happens is instead of pumping in 18-million barrels of seawater to "pressurize" a field (and extract say 10-million barrels of oil), the amount of seawater required increases by a factor of 2, 3, even 6 or 10-times what is being pumped now.

The disturbing idea is that the Saudis have the mental horsepower to plot out the increasing problem of water cut and figure more or less precisely where they are on the production/decline curve. Then we ask the logical question, "If you knew that your oil had indeed peaked, and would never go to higher production than it is today - something that would crash and trash the inflated Western Economy, especially the housing bubble in the US which is almost entirely auto driven - wouldn't you get your money out of harms way before you got run down by your own oil problem? We think there's a very good chance this is what is presently in play.

The other alternative is that the Saudi's have gotten a heads-up (again a long lead time - long enough to move money around) that the US would be hit with another 9/11 type event this fall, and thus they are moving assets in advance. Although this seems like the less likely of the two possibilities, it still much be considered because the move is undeniably occurring, and the forces of militant Islam, of the improvised explosives variety, not my Islamic colleagues and friends who are every bit as committed to a peaceful world as I am, have tipped off their money sources in the Kingdom with long lead time.


It's tough to know, as the Saudis keep their oil numbers "proprietary", so George offers a few hypotheses of his own.

GoldiloxDaily euro vs. US$#1347948/10/05; 04:50:56

Check out this chart for some interesting symetry!

Click "time scale" and switch to "Daily".

GoldiloxGold Chart#1347958/10/05; 04:55:10

Classic Reverse Head and Shoulders on this one at 4AM PDT

Set "time scale" to "10 minutes"

GoldiloxReverse HS#1347968/10/05; 05:00:27

My old VP of Sales had a "technical term" that might fit the Reverse HS.

He called it "A$$es and Elbows" - referring to sakesman's entry tactics.

OK, I am up WAY too early - back to bed!

968Belgium sold 30 tonnes of gold in July and August.#1347978/10/05; 09:06:06

The Central Bank of Belgium (NBB) reported today that it sold 30 tonnes of gold in July and August.
Gandalf the WhiteSir Goldilox#1347988/10/05; 09:21:40

The US$ chart is showing that the 88.00 level is now a BARRIER and that instead of WATERFALLS we now have a cascade of RAPIDS !!
I think that I like the RAPIDS as much as WATERFALLS.

GoldiloxGold Chart #13479908/10/05; 09:49:47

@ Gandalf,

Check out the NetDania Gold chart at the ten minute interval I mentioned in my earlier post.

You know how most "walls of worry" climb slowly up and correct very quickly?

This one is the opposite. It jumps and corrects very methodically, like correcting is a lot of work!

White HillsBe Nice#13480008/10/05; 10:02:37

Sir Goldilox, I suppose I should be nicer to you. A little liberal politics isn't oo much to put up with considering all the information you furnish on any given day. Keep it up, we all are watching. White Hillsd
GoldiloxCurrent Volcanism#13480108/10/05; 10:03:52

For all you NatSci buffs, here's a page documenting current activity at the world's most active volcanoes.

I've found EQ information easier to locate thanks to the USGS, but this is interesting too.


White HillsWhat next?#13480208/10/05; 10:20:08

As reported in the Los Angeles Times ( Los Angeles Hard Times as I call it) illegal aliens now receiving home loans in California legally. Egads! what next? White Hills
GoldiloxPolitics#13480308/10/05; 10:20:29

@ White Hills,

Now don't you go getting soft on me!

I don't wanna hear any whining when it becomes more obvious that the bums are manipulating a whole lot more than hedonic financial numbers.

By the way, I am no more enamored by the so-called left. Crooked politics is not an invention of the NeoCons. They're just a little better at it these days.

There probably isn't a political label that fits me well, but I imagine something like left-leaning libertarian. If that's not oxymoronic, I don't know what is.

Even baseball is churning my stomach these days. Felipe Alou is boycotting the Giants flagship station because one of the hair-brained commentators called the team a bunch of "brain-dead Caribbean hackers". Not particularly smart, for sure, but unfortunately true. I've never seen a bigger group of free-swinging strike out artists that just happen to be mostly Caribbean nationals. Now it's turning into a RACISM controversy. My Oh My!

As BB likes to quip: "What interesting time we live in."

GoldiloxIllegal Aliens#13480408/10/05; 10:26:59

@ While Hills,

The US citizens took the southwest mostly by virtue of overrunning the indigenous and Spanish colonials. The reverse is now in play here, as it is in Europe.

I watched the Border Patrol mgmt asking for more budget on CSpan the other day, and they had not one non-Latino in their upper eschalon.

The melting pot sometimes gets a little hot to the touch!

BoilermakerBelgian Gold Sale#13480508/10/05; 10:37:58

BRUSSELS (Reuters) - Belgium's central bank said on Wednesday it had sold 30 tonnes of gold in July and August, leading to an increase in the yield on its assets.

"These gold sales took place within the framework of the gold agreement (the 'Central Bank Gold Agreement') which was concluded between 15 European central banks," it said in a statement.

The bank said it had 227.7 tonnes of gold after the sale.


Was this reported earlier? If not, doesn't this put WA II over the limit?

GoldiloxBelgian Gold sale#13480608/10/05; 12:41:35

@ Boilermaker,

Limit, sclimit! Those financial collaboraters NEED their shiney or they'll start whining!

I'm not selling mine, and you're probably not selling yours, so the banks will just have to sell more of theirs!

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GoldiloxUnoCal approves Chevron bid#1348088/10/05; 13:11:40

CNBC just announced that UnoCal shareholders approved the Chevron takeover bid today.

UnoCal mgmt will stay only for the transition period, and receive buyouts equal to 2-3 years salary + equal "bonuses", along with health benefits and all their stock will vest.

Not a bad premium for selling the company!

otish mountainGold#1348098/10/05; 14:24:14

Could it be that Central Banks will have to step up to the plate with more physical sales now that there is a strike in S.Africa?
It was Another that said to the effect that if physical sales dried up it would be bullish for gold. Without mining production in South Africa this could cause a lot of unrest for the bankers keeping the price down, hence the increase in paper sales.
Just thinking alloud.

TopazAccess action#1348108/10/05; 14:46:38

NY Comex Access action of this magnitude is a rare event and augurs well for PoG short-term.
Those BCB sales don't come close to satisfying demand here and unless someone else steps up, we could be in for quite a ride.

Cage RattlerSaudi 'repatriation'#1348118/10/05; 14:51:22

I think the rumour mill spun out of control and twisted the facts over this so-called story. The original wire via Reuters is as follows (and you'll notice the same amount being mentioned too):

DUBAI, Aug 4 (Reuters) - Gulf Arab governments and private investors are likely to buy over $360 billion of foreign assets in 2005 and 2006, financed by record oil revenues, according to a report by the Institute of International Finance (IIF).

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Wednesday Market Excerpts

August 10 (from Reuters) -- Gold futures in New York finished higher on Wednesday, with speculative buying the dominating factor amid a weak dollar and strong crude prices after Tuesday's rate increase by the Federal Reserve.

COMEX December gold contract gained $2.20 to close at $442.

Futures firmed as the dollar slumped to a two-month low vs. the euro after markets digested the Fed's latest increase to benchmark interest rates.

A weaker dollar makes gold more attractive to investors because the dollar-denominated metal gets cheaper for non-U.S. buyers.

Gold also often benefits from rising oil prices as some investors use the market as an inflation hedge.

Crude hit a record $65 a barrel on Wednesday, hoisted by a rally in gasoline prices.

News that Belgium's central bank said it had sold 30 tonnes of gold in July and August failed to dampen gold's mood. The sales took place within the framework of the central bank gold agreement. The bank said it had 227.7 tonnes of gold after the sale and would not sell any more gold this year.

(from MarketWatch) -- "The smart money worldwide has already been converting increasingly worthless pieces of paper currencies into 'increasingly worth-full' pieces of precious metal," said John Stafford, editor of Stafford's Investment Strategy Letter.

"That process is accelerating."

"The Fed's multi-decade deliberate policy of running a 'well-managed hyperinflation' is becoming less 'well-managed'," he said.

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

GoldendomeDJI all over the place today#1348148/10/05; 15:33:56

Man-o-man, did you take a look at the action on the DJI today? That the players were whipped around like the tail on the old homecoming snake dance is no kidding. They went from the outhouse to the penthouse and back to the outhouse. Looks like 3 swings during the day of well over 100 points each; finally ending about 120 points down for the day. Significant? Only time can answer.
TownCrierArgentina's Lavagna Defends Weak Peso Policy, Attacks IMF#1348158/10/05; 15:38:17

BUENOS AIRES -(Dow Jones)- Argentine Economy Minister Roberto Lavagna attacked the International Monetary Fund and other critics of Argentina's exchange rate policy Tuesday in a speech in which he strongly defended his government's commitment to a weak currency.

...The policy of keeping it weak has required the central bank to buy dollars on a massive scale, pumping fresh pesos into the banking system to do so and creating a risky surge in money supply that's becoming increasingly difficult to counteract with open market operations.

Either the central bank should let the peso rise to remove the pressure on money supply caused by its exchange interventions or it should let interest rates rise, many analysts say. Among these are the staff from the IMF, who recently called inflation Argentina's biggest risk in the medium-term and called on Argentina to allow the peso to strengthen and to tighten monetary conditions.

As it is, lower-than-desired interest rates are making inflation-fearful investors unwilling to lend to the central bank in anything more than the shortest maturities in the weekly note auctions it uses to manage money supply. That's creating a balance sheet rollover problem and is ensuring that the monetary base remains high, helping to further stoke inflation concerns in what some see as a vicious cycle.

The consensus forecast is now for inflation to hit 11% by year-end...

Lavagna warned against taking interest rates too high Tuesday, fearing that it would undermine the exchange rate goal.

"We need to avoid allowing the increase in interest rates that they (the IMF) are proposing from creating a self-fulfilling prophecy where the increase in interest rates is followed by inflows of speculative short-term capital which forces a revaluation in the peso and increases returns in dollars," he said.

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

It's a mixed up, muddled up, shook up world...

It needs a good foundation -- as discussed yesterday.

Pick the right path, walk the 'Gold Trail', choose gold (for individual savings and for international reserves).


BoilermakerOil Market#1348168/10/05; 15:40:57

The following article might explain some of the upward pressure on crude prices;

Nigeria identifies 300,000 crude shortfall, output at 2.4-mil b/d

Paris (Platts)--10Aug2005
Nigeria will be unable to implement its 2005 budget due to a shortfall of some
300,000 b/d in the country's projected crude supply to the world market and a
bill to the government of some Naira 112-bil ($813-mil) for subsidizing the
price of petroleum products, Nigeria's finance minister, Ngozi Okonjo-Iweala
said, reported in Wednesday's ThisDay newspaper.

The senate had last week mandated its committees on appropriation, finance,
national planning, and petroleum resources (upstream) to investigate the
revenue profile of the budget vis--vis implementation. "Our initial projection
was for the production of 2.7-mil b/d. According to what the Nigeria National
Petroleum Corp told us, due to the closure of some oil wells which is also due
to community unrest, it has come down to 2.4-mil b/d. I want people to know
that," said Okonjo-Iweala. The country's oil minister Edmund Daukoru earlier
this week said unrest in the oil-rich Niger Delta, with its history of
kidnappings, pipeline sabotage and crude oil theft, posed a major challenge to
oil and gas production.

The oil market seems to be getting a bit bubbly lately. As a small producer I'm all for higher prices, makes my oil to gold conversion work a little faster.

TownCrierChina Discloses Currencies#1348178/10/05; 16:15:30

SHANGHAI, China -- China's Central Bank said Wednesday that the dollar, euro, Japanese yen and Korean won dominated its new reference currency basket, disclosing the contents for the first time since it revalued the yuan last month.

The basket also included the Singapore dollar, the pound, the Malaysian ringgit, the ruble, the Australian dollar, the Thai baht and the Canadian dollar, Central Bank Governor Zhou Xiaochuan said.

Zhou did not detail the proportions or say whether other currencies were included in the basket.

"The currencies in the basket depend on the amount of foreign trade we conduct. The United States, euro zone, Japan and South Korea are our biggest trading partners now."

"Hence, their currencies are naturally the main ones in the basket."

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

In a related DowJones Newswire article, the following was also reported:

China's three largest trading partners last year, in order, were the European Union, the United States and Japan...

Analysts have debated whether the dollar or the euro might have a larger role in the basket...

The basket makeup doesn't change the large amount of dollar reserves still held by the Chinese central bank, according to some analysts...

China's government will now allow larger domestic companies representing a range of industries to trade currencies with banks and bet on future currency moves in the so-called forward market. These transactions had been limited to [366] financial firms. Firms who export at least $2 billion annually are eligible.

"Chinese policymakers made some more significant liberalization moves overnight by saying that they would allow the start of an interbank onshore forward market," said Steve Barrow, currency analyst in London, with Bear Stearns. "Yesterday, they said that they would allow more bank customers to trade forwards, but the ability for banks to trade forwards between each other in China is much more significant in our view."

"With the value of trade between China and Europe and China and the United States fairly close, we expect the dollar and the euro to constitute very similar weightings in the basket with the Japanese yen tracking not far behind," said Kathy Lien, senior currency strategist with Forex Capital Markets.

She thinks the reserve picture may also change. "This announcement has been and will continue to be very positive for the yen and the euro as China, one of the biggest players in the global-reserve market, gradually aligns its reserve holdings with the reference basket for their managed float.

"We do not expect China to make another move for at least a few months, but what we do see and what we expect to be consequence of China agreeing to revalue, is increased talk of Chinese firms looking abroad for acquisition targets," Lien added.

As mentioned before, should a buying-spree commence, there's a huge appetite to be fed by way of uncertain dollars groping toward a sparsely provisioned table.

And there's nothing quite as powerful as gold to fill the void and ease the hunger.


Goldendome@ Sir Boilermaker#1348188/10/05; 16:30:24

Are you still packing around all that Silver Bullion as disguised ballast in the bottom of your yacht? Updated passport and all-- just waiting for the right moment to make a break?
HOOSIER GOLDBUGREACHING LIMITS!#13481908/10/05; 16:46:00

If the WASHINGTON AGREEMENT II has been exceeded in the sale of raw GOLD material, are we getting closer to exceeding limits? First GOOD news I have heard this week. Oil prices rising, debt snowballing, etc. and the price of gold is under $850. Did the collapse of LTCM hedge fund teach the manipulators how to keep the train on the track with derivatives, swaps, etc.??? HOPING it derails on GREENSPANS watch! Serves that traitor right! Karma! What goes around, comes around! We don't need to back the currency with gold, because we (central bankers) are acting as if we were on one! I nominate the statement as the JOKE OF THE YEAR 2005.
melda laure(No Subject)#13482008/10/05; 17:12:39

'Lox #134803. The reason you cant find a good label is your choices are too narrow in the modern market of ideas. Today, our choices of label consist of various kinds of pseudofascism: our political spectrum consists of various shades of pink that masquerade as "conservative" or "liberal". Some people like to label the current president as a neo Hitler, which I find amusing since the previous occupant was also variously called "Klintler" and so on. The fox news aficionados wonder how a guy who cut my taxes, wrote new "free trade" CAFTA into law and is pro-market could EVER be called a goose stepping moron but similar things could be said of the previous oval office occupant. The fact that all those "gentlemen and ladies" voted for the patriot act makes them all closet Nazis. Welcome to the era of a kinder gentler fascism. Nelson Hultberg wrote a nice piece.

Too bad. Iran is far closer to democracy than Saudi ever will be.

GoldendomeLearning from LTCM#13482108/10/05; 17:19:13

Sir Hoosier: I supose a lot was learned by many from the collapse of LTCM; it was all pretty well out in the open during and after the event. However, I suppose it somewhat like playing Texas Holdum Poker, you can learn alot, be clever and crafty, but if the luck turns against you...then all that guile, cleverness, and knowledge won't save you.

There's a great book on LTCM called, "When Genius Failed" by Roger Lowenstein. It's been in print long enough that your local library should be able to come by a copy for you. The book lays it all out in black and white. Pretty much is just as the title suggests: A bunch of too smart guys that got way ahead of themselves and didn't use proper risk or cash management.

Boilermaker@ Goldendome#13482208/10/05; 17:32:35

Dear Sir Goldendome,
My yacht never existed in reality, only one of my many temptations of the mind. My reality is a tractor with a mower sailing across pastures needing trimming. Today's effort won me a world class bee sting that inflated my upper lip to clown-size proportions. The family was duly impressed and had fun with my misfortune. Perhaps I'll put my silver in the rear tires for better traction.

On a less cheerful note, one of my daughters, a single 40 year old, lost her house in a sheriff's sale last Friday. It was a 110 year-old house in a "mixed" neighborhood that she bought four years ago for $76,000. She had done considerable improvements but kept dipping into the equity to keep herself liquid. She's basically a person who can't handle financial responsibilities and this proved it. I went to the auction to see if I could buy it at a price well below market but the bank was bidding it up to the current outstanding loan value. I decided to let them have it. Better for them to buy back my daughter's debt and try to find a greater fool to take it on. A difficult but necessary choice for a father trying to demonstrate the consequences of poor financial choices.

The sheriff's sale was a real eye opener. They make up about 20% of the real estate transactions in our county. This is Northeastern Ohio and properties are relatively cheap. This will be increasingly played out in courthouses all over the country. The banks will own an increasing percentage of "non-performing" real estate with no market to sell into. It's fascinating and scary to watch the first stages of a depression, like the squiggles on a seismic chart fortelling the "big one".

HOOSIER GOLDBUGREALITY TIDBIT!!#1348238/10/05; 18:32:26

Goldendome: THANKS for the direction.
Boilermaker: The usual scenario in our neck of the woods, SOUTHERN INDIANA, is that the bank bids it up at the shreiff's sale, in essence since they already own the property, they will not let it go for less than the mortgage amount owed! They then list it with a real estate broker, who has done a market analysis on the property, usually high, to get the listing. After it has sat on the market 2-6 monthes, the next step is they then have it reappraised (it was appraised before the auction), but this time they will ask the appraiser for a 30 day or 60 day "quick sale" valuation. Usually the greater percentage of these properties sell for less than the last legitimate bid from the public at the sheriff's sale. It is just the game they play, first to see if they can find a fool to takeover the property at their price/debt owed, and secondly to see what the demand is for the property. KEEP YOUR EYES OPEN! YOU MAY STILL GET TO STEAL THE PROPERTY!

White HillsWhere are you Audie Murphy?#1348248/10/05; 18:39:44

The Army has announced it has upped the financial incentives and added recruiters in an effort to meet their 11% shortfall in enlistments this year. In addition, it has asked Congress to raise the enlistment age to 42 yrs instead of the present 35 yrs. Yes, lets throw money at the problem and lets raise the enlistment age so that we can get more old guys. Or, better yet lets enlist more women by offering them more perks and higher ranks as well as more money. Under present enlistment regulations a recruit has to have a high school education or equivalent to enlist. Just the one regulation alone would have exempted Audie Murphy, Sgt. York and too numerous to mention other medal of honor, silver star, and ect. winners. As well as ordinary soldiers that includes White Hills. It would be understandable if a high school diploma really meant anything in present times. It certainly is no assurance that the student can even read. I haven't exactly researched it but with some confidence believe that many of the soldiers in WW1 and WW2 probably didn't have a high school education. By using a high school diploma as evidence of the education or intelligence of the recruit, the Army is missing a very large and valuable pool of potential quality recruits. Instead lets give them a test and judge from that ,not on piece of paper that represents nothing but time spent . After all what the Army really wants and needs are soldiers who will obey orders, accept dicipline and do their duty when asked. If the Army really wants to accept all the political correctness they should make the requirement a college educatio and raise the enlistment age to over 65. It certainly would solve the social security problem. White Hills
GoldendomeSir Boilermaker#1348258/10/05; 19:43:54

Sorry to hear of yours and daughters misfortunes.
Happy that you could still smile at my friendly ribbing; I'll not go there again. Best in the future. G-dome

GoldendomeWho let the Dogs out?#1348268/10/05; 19:58:16

SundeckHey diddle diddle...#1348278/10/05; 20:02:52

"Private Company Plans $100 Million Tour Around the Moon"

You too can jump over the Moon...for a cool $ u kno what u can use your ill-gotten gold gains for...


GoldiloxUS Treasuries a touch softer on refunding letdown#1348288/10/05; 21:10:51


NEW YORK, Aug 10 (Reuters) - U.S. Treasury debt eased slightly on Wednesday after the second leg of the government's quarterly debt refunding auctions drew only meager demand from indirect bidders, including foreign central banks.

The $13 billion in new five-year notes was met with solid overall interest but primary dealers dominated the buying, stoking fears of waning foreign demand for government bonds.

Indirect bids for Monday's three-year note auction were also disappointing, making investors anxious about what Thursday's 10-year sale might bring.

"The auction itself was pretty decent but the foreign participation was lacking," Alan DeRose, a trader at CIBC World Markets, said of Wednesday's sale.

The market was not pleased, and traders proceeded to trim early gains and nudge benchmark 10-year notes 1/32 lower in price for a yield of 4.40 percent, compared with 4.39 percent Tuesday.

The new notes were sold at a high yield of 4.223 percent, and garnered 2.92 times the number of bids per amount of notes on offer, much stronger than the 2.39 percent average so far this year.

The trouble was, indirect bidders took home only $2.79 billion or 21.5 percent of the sale, saddling primary dealers with the rest.

"Given the revaluation of the Chinese renminbi last month people are going to be looking very closely at this statistic. One auction does not a trend make, but if we consistently see lower indirect participation then I think people are going to get worried," DeRose added.

Offshore central banks, particularly those of China and Japan, are huge holders of Treasuries, cornering over a quarter of marketable Treasuries.

This trend is due in part to large-scale currency interventions in recent years that left those countries with excess dollar reserves. These had to channeled somewhere, and Treasuries seemed like the safest bet.

But some investors are concerned that China's revaluation might leave them with fewer extra dollars and therefore dampen their desire to purchase Treasuries.


Are foreign banks playing "hot potato" in the bond market?

When the music stops the US taxpayer will be the one left holding "the bomb".

GoldiloxRETORT TO A GOOD ECONOMIST - Jim Willie CB#1348298/10/05; 21:21:36


Achuthan stands out among others in pointing out how the explosion known as "globalization" produced price deflation in "tradable goods and services" despite another explosion, that being of monetary expansion. Most economists focus entirely on low-cost solutions, and the benefit to consumers in money saved. I might add that the monetary and fiscal (federal) stimulus has been gargantuan, not cited by Achuthan, so large in volume that a great many good analysts have incorrectly expected for price inflation to result. It has in every past episode, first the flood occurs, then the entry into pipelines, finally end product prices all rise along with worker wages. This time is indeed different, and Achuthan implies that Asian manufacturing in a "tsunami" is responsible for engulfing the monetary effect. One should take a lesson as a student from this point. The human response on monetary inflation is overwhelmed by the natural economic force of Asian industrial overcapacity! Asian factories snuff out the domestic inflation attempt, since the US system has exported that inflation. The US inflation succeeded mainly in the housing market, which could not be exported. It is like most of the US monetary surge was sent to Asia, where it passed through an industrial filter, and returned transformed to the US Economy in the form of cheap finished products. This entire concept was explained in "Export Inflation, Import Deflation."

Achuthan makes a fine parallel with the dotcom boom in 1999 and the housing boom today, something I have referred to in the past (with my 19 itemized parallels). The mild recession was due in his opinion to that dotcom boom lessening the impact of the 2001 recession. He talks of importing deflation. He recognizes the simultaneous monetary influence (he calls it "cyclical upswing") upward in prices, countered by imported price deflation to bring about a tranquil pricing structure. What he overlooks is what I call "cost inflation" whereby most materials, supplies, commodities, energy products, and foodstuffs have risen in price. On the opposite side, the prices which producers are able to sell the finished products are massively influenced by the imported deflation. A profit margin squeeze has occurred, unaddressed by Achuthan, which might be responsible for some of the flattening in the Treasury bond yield curve. Tranquil? Since when is a profit squeeze evidence of tranquility? Add rising health care costs and payroll tax contributions paid by employers, and you have a toxic environment for job growth. This factor is far more prominent to "checking growth in both jobs and wages" than his cited productivity factor.

Achuthan credits strong productivity incorrectly again, in my opinion. Let's be plain. Most mainstream economists earn a "D" grade on productivity comprehension. This topic, with inflation, stands head & shoulders above other topics as primary areas of confusion, poor theoretical grounding, outright deception, with serious downstream consequences from that erroneous base. He believes productivity has resulted in boosting corporate profits. I believe extraordinary money supply growth, extremely accommodative low interest rates, and pathetically easy vendor financing has brought about bigtime growth in corporate balance sheets. The financial sector and financial subsidiaries own the lion's share of that profit growth ending up in balance sheets. Any benefit from the "imported" productivity on corporate profits is severely undermined by the export of the entire supply chain associated with what is imported from Asian factories. Therein lies job loss, flat wages, and the near total destruction of the entire labor union movement.


Aside from the rhetoric (both pro and con) it's hard to find a thoughtful discussion of the issues it wreaks upon the participant economies.

GoldiloxREAL ESTATE PRICES...HOW FAR IS DOWN? - Christopher Fox#1348308/10/05; 21:34:10


Reversion to the Mean

Economics borrows a tool from statistics called "Reversion to the Mean." It's a simple concept that explains how prices of goods will at times deviate from the long-term mean price to the upside or to the downside.* But the real value of this concept is in using it to predict future prices because what this tool shows us more times than not is that the elasticity of the deviation is generally equal on both sides of the mean.

In other words, if the price of something increases by 10 points above the mean price, then we find that eventually, the price of that something will fall below the mean by about 10 points for a total of 20 points.

Now, what I find very interesting about Janet L. Yellen's comments regarding the current level of the price-to-rent ratio is that she tells us how high above the long run average it has become. "About 25 percent above its long-run average." She also tells us that this ratio varies from place to place "For Los Angeles and San Francisco, the price-to-rent ratio is about 40 percent higher than the normal level."

Surely Dr. Yellen has heard about the "Reversion to the Mean" concept, yet after she tells us how high the price-to-rent ratio has gone, she fails to tell us that we should expect to see this ratio drop 25 percent below it's long-run average. Or 40 percent below the long run average in Los Angeles and San Francisco.

Given this data from Dr. Yellen, we can now surmise the answer to our question of how far is down for the housing market? The price-to-rent ratio should fall approximately 50 percent from its current levels, or 80 percent for Los Angeles and San Francisco.

Let's see if these numbers work in my hometown of North Scottsdale.

My new landlord (who happens to own four rental properties) is refinancing and recently had an appraiser come by the house I am renting. He told me that he was going to appraise the house at about $550,000. Let's assume my landlord decides to lock in a fixed rate and he chooses to go with the current 30 year 5.75% loan. His monthly mortgage payment, not including insurance or any maintenance costs comes to $3,209 per month. My monthly rent payment is $1,900.

So a quick calculation of 3,209 divided by 1,900 gives me a price-to-rent ratio of 1.69.

Let's assume that the price-to-rent ratio in North Scottsdale is somewhere between 25 percent and 40 percent above the long run average as Dr. Yellen suggests in her speech above. I'll pick 30 percent just for the sake of running the calculation.

If 1.69 is 30 percent above the mean, then a reversion past the mean, with a final destination of 30 percent below the mean would allow me to expect that the price-to-rent ratio should drop by 60 percent which should be a .68 price-to-rent ratio.

With this new price-to-rent ratio, I can now work backward to determine what the new value of my rental house will be assuming that my rent stays the same at $1,900.

$1,900 X .68 = $1,292.

$1,292 is what the new mortgage payment should be if the price-to-rent ratio drops to .68.

Plugging the $1,292 mortgage payment into a simple mortgage calculator on the internet at 5.75 for a 30-year fixed mortgage gives me a new property value of $220,000.

So now we can see exactly "How Far Is Down" for any particular rental property.

In this case I should expect to see my current rental house drop in value from $550,000 to $220,000 based on historical mean reversion characteristics.

The real problem lies not in the fact that the rental house I live in will only be valued at $220,000 but rather how fast it falls and what happens when the landlord decides to sell.

This house will become the new comparison for the other houses in the neighborhood and we can expect to see those house values come down also.


A pretty bleak picture painted by one who still believes in "reversion to the mean."

Topaz< ALERT > Half Australia's active Volcanoes are Erupting!#1348318/11/05; 02:17:41

Got to be good for Z-Gold. We've only got two of 'em though.
Reversion-to-the-mean G'lox was interesting.
I'd think things would look decidedly more grim should IR's head to (say) 15%.

NedDo or die me thinks !#1348328/11/05; 04:41:27

POG approaching triple top of $440, will be interesting if and when we cross over or fall off a cliff.

Me thinks (me hopes!) we bust out by end of August, and break the $455 set in Dec. 04 within 90 days.

Have a golden day.

BoilermakerDoing the Math Correctly#1348338/11/05; 05:36:00

In Goldilox' post #134830 Chris Fox makes the calculation;

"If 1.69 is 30 percent above the mean, then a reversion past the mean, with a final destination of 30 percent below the mean would allow me to expect that the price-to-rent ratio should drop by 60 percent which should be a .68 price-to-rent ratio."

Chris Fox has made the common error of adding/subtracting percentages. Here's the right way. If 1.69 is 30% above the mean then the mean is 1.69/1.30= 1.30. If the ratio drops 30% below the mean then it will be 1.30 x (1.00-.30)= .91. This doesn't change his point about the reversion to mean in the housing market but it does make it less dramatic.

BoilermakerReal Estate and Yachts#1348348/11/05; 06:49:21

Hoosier Goldbug;
Thanks much for illuminating the MO of the banks in repo sales. That's exactly what was happening at the Sheriff's sale that I attended. Out of 60 properties listed, 23 sales were cancelled per plaintiff's attorney, 3 were purchased by third parties and 34 went to the plaintiff (mortgage holder). This happens every Friday at 10:00 AM in the courthouse rotunda and the numbers are very consistent.

No problem with the ribbing. Reminds me of the old story about a visitor to New York who admired the yachts of the bankers and brokers in New York Harbor. Naively, he asked "where are the customers’ yachts?". Of course, there were no customer yachts. There's also a book by that title.
Perhaps someday I'll go to a sheriff's sale of repo'ed broker's yachts and finally get to put my silver to use. ;)

GoldiloxRepo Sales#1348358/11/05; 08:45:16

Your repo story reminds me of Martin Luther King's (less) famous, but more flamboyant Atlanta speech. I found it at the old "Wizard's of Money" site which has since been bought and modified by an educational site vendor.

In it, MLK described the fleecing of inner-city HUD-financed RE owners by similar practices. The "auctions" were held on the courthouse steps with the main bidders being the mortgage company's own attorneys. No wonder the FBI "shadowed" his every move.

The major scheme was to get HUD to sell them back the property at a lesser cost, using HUD funds to "insure" their losses.

Catherine Austin Fitts of "Solari Network" also describes some of these practices in the expose of HUD fraud that got her fired as an independent HUD auditor.

GoldiloxCNBC picture#1348368/11/05; 08:55:02

CNBC is interviewing a gold fund manager and just showed a video of a gold wherehouse that was stacked high and deep with bars. WOW!
968Janet L Yellen: Views on the economy and implications for monetary policy#1348378/11/05; 10:25:03

Speech by Ms Janet L Yellen, President and CEO of the Federal Reserve Bank of San Francisco, at the Portland Community Leaders’ Luncheon, Portland, Oregon, 29 July 2005.

"Of course, oil prices do pose an inflation risk. The price of oil has just about doubled over the past two years, from the low $30 range to around $60 per barrel recently. Higher oil prices are reflected in higher "headline" inflation. And they have been passed through to some extent to core inflation as well, but, unless they rise further, the effect on core inflation should begin to dissipate next year. Another risk relates to labor compensation, which is the single largest component of business costs. Recently, one measure of compensation per hour jumped abruptly. Here, too, though, I am not terribly worried because a good part of the jump is probably accounted for by one-time events, such as bonus payments and the exercising of stock options."

"Two of the major factors contributing to the sizable imbalance between our imports and our exports are the strength of the U.S. economy relative to our major trading partners and the relative strength of the dollar. In 2004, the increase in the trade deficit—by itself—subtracted almost one percentage point from real GDP growth, representing a significant drag on overall activity."

"One common way of thinking about housing's fundamental value is to consider the ratio of housing prices to rents. The price-to-rent ratio is equivalent to the price-to-dividend ratio for stocks. In the case of housing, rents reflect the flow of benefits obtained from housing assets—either the monetary return from rental property, or the value of living in owner-occupied housing. Historically, the ratio for the nation as a whole has had many ups and downs, but over time it has tended to return to its long-run average. Thus, when the price-to-rent ratio is high, housing prices tend to grow more slowly or fall for a time, and when the ratio is low, prices tend to rise more rapidly. I want to emphasize, though, that this is a loose relationship that can be counted on only for rough guidance rather than a precise reading. Currently, the ratio for the country is higher than at any time since data became available in 1970—about 25 percent above its long-run average. Of course, the results vary widely from place to place. For Los Angeles and San Francisco, the price-to-rent ratio is about 40 percent higher than the normal level, while for Cleveland the ratio is very near its historical average. Closer to home, the figure for Seattle is just over 35. For Portland, it turns out that the price-to-rent ratio is a bit anomalous. Unlike the ratio for the nation and many of the cities I've mentioned, Portland's ratio has been trending up, and this pattern has been going on since the late 1980s. This means that there's not a stable long-run average ratio to use as a comparison for today's ratio, so the analysis we did for the other cities wouldn't be that meaningful for Portland. What we do know is that the pace of home price appreciation in Portland has been close to the national pace over the past few years, lagging behind somewhat in 2003 as the state struggled to recover from the 2001 recession, but mostly catching up in 2004 and early 2005 as economic growth picked up noticeably in the state. As of early this year, home prices in the Portland area were up 12 percent over a year earlier, only a bit below the national pace of 12½ percent. More recently, I've heard reports that upscale homes in the Portland area are increasingly being sold at above-asking price—a phenomenon we're all too familiar with in the Bay Area! So it's clear that Portland's housing market has been hot, but I'm sure that's no surprise to you."

"Given this uncertainty, my focus as a monetary policymaker is on trying to understand what kind of risks a drop in house prices would pose for the economy. One of the classic ways to do this is to ask "What if…?"—in other words, to pose a purely hypothetical question. In this case, the "what if" question might be, "What's the likely effect if national house prices did fall by 25 percent, enough to bring the price-to-rent ratio back to its historical average?" Before going any further, I want to emphasize that I'm not making any predictions about house price movements, but instead, simply discussing how a prudent monetary policymaker could assess the risk. First, there would be an effect on consumers’ wealth. With housing wealth nearing $18 trillion today, such a drop in house prices would extinguish about $4½ trillion of household wealth—equal to about 38 percent of GDP. Standard estimates suggest that for each dollar of wealth lost, households tend to cut back on spending by around 3½ cents. This amounts to a decrease in consumer spending of about 1¼ percent of GDP. To get some perspective on how big the effect would be, it's worth comparing it with the stock market decline that began in early 2000. In that episode, the extinction of wealth was much greater—stock market wealth fell by $8½ trillion from March 2000 to the end of 2002. This suggests that if house prices were to drop by 25 percent, the impact on the economy might be about half what it was when the stock market turned down a few years ago."

"Now let's complicate things. Suppose house prices started falling because bond and mortgage interest rates started rising as the conundrum was resolved, say, because the risk premium in bonds rose due to concerns about federal budget deficits or other factors. Then we'd have the cutback in spending because of the wealth effect, plus there'd likely be further spending cutbacks, as borrowing costs for households rose. Furthermore, a rise in long-term rates would have effects beyond just households—it also would dampen business investment in capital goods through a higher cost of capital. How manageable would this scenario be? Like the wealth effect, these added interest-rate effects operate with a lag, so, again, there probably would be time for monetary policy to respond by lowering short-term interest rates. This obviously would not be a "slam dunk," but in many circumstances it would seem manageable."

"As I've discussed, if a sizable reversal in house prices were to occur, it probably would affect the economy mainly through the lagged effects of declines in wealth and increases in interest rates, rather than through widespread financial disruptions. This would give monetary policy time to react to any resulting economic weakness by lowering interest rates. In addition, the magnitude of the potential house price overvaluation may be only around half that of the earlier stock market overvaluation."
In God and the Fed we thrust !

Compare this speech to Otmar Issing's interview ( and conclude yourself...

SurvivorToday's Action#1348388/11/05; 10:29:21

Anyone know why the currency and metal markets are so volatile today?

I know a truck of explosives went off in Utah. Is the rumor mill seeing this as a terrorist act? Apparently it was just bad driving.

- Survivor

RimhWhat's goin' on?#1348398/11/05; 10:49:13

Like Survivor, I, too, am wondering what is driving the gold price/oil price today? Is the coiled spring that is physical demand finally putting "real" pressure on the paper-pricing market or was it some super-high-test Roo meat that Gandalf fed spot and spike this AM, or what....?

The fact that the $6.00 rule has been breached in such significant way is shocking... I haven't seen a move to the upside this good since at least '03....

The HoopleSurvivor#1348408/11/05; 10:58:09

I wouldn't know where to begin with what's causing today's metal volatility. Fannie postponing earning statements for a YEAR and assigning an army of beancounters to investigate? This is huge IMO, what you bet they already know it's a disaster and bought time to delay the inevitable. Miner strike? Also known as nothing coming out of "deep storage" in Africa for a while. Iran nuke talk? No CB physical gold to dump for a few months now they've burned through the WA2 allotment? China re-allocating their portfolio to shed those pesky FRN's? So many gold friendly reasons, not enough suppression ammo. Maybe it's coming down to cover your --- time at the BB's and assorted gold short brain dead funds. With what I know about the economy there should be an extra zero on today's gold rally.
Clink!Double spike#1348418/11/05; 11:08:22

The action could just be black box trading. Gold has been in a l-o-n-g pennant formation - look at a 1-year chart to see it - with a breakout point of around $440. That was broken this morning, and, with the relatively low open interest at the moment - there was plenty of room for the specs to pile on.
Oil had a potential peak point of around $65, and it would appear that it has just pushed on through that. Ackerman mentions it in his daily article today, with a target of $70.
We shall see what the cabal can do to stifle the excitement.


GoldiloxHUI Watch#1348428/11/05; 11:23:42

After about 4% yesterday, the HUI is up another 4% today, currently at 217.29
USAGOLD / Centennial Precious Metals, Inc.Access to a world of gold awaits your phonecall#1348438/11/05; 11:59:51

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TownCrierOld ghosts may haunt dollar after mid-summer slump#1348448/11/05; 12:22:00

NEW YORK, Aug 11 (Reuters) - China's change to its currency regime may have hastened a shift of currency reserves out of the dollar, a trend that could revive the greenback's three-year decline after a six-month respite.

"The idea that we will get further diversification in these foreign reserves is pretty real," said Bob Kowit, portfolio manager of $3.5 billion in international fixed-income investments...

Since China abandoned its yuan peg to the dollar on July 21, the prospect of the world's central banks continuing to diversify some of their approximately $2.44 trillion in dollar-denominated reserves into other currencies has resurfaced as a focus of concern in currency markets.

China previously had held the yuan peg in place by selling yuan, buying dollars and investing them in U.S. Treasuries.

But China and other central banks may no longer need to buy so many U.S. Treasury bonds, reducing the $2 billion a day in capital inflows needed to finance the massive U.S. current account deficit.

It may be no coincidence that the U.S. dollar's recovery in first half of 2005 came to an end in late July after the change to the Chinese exchange rate regime.

...Meanwhile, huge U.S. structural imbalances still loom over the dollar's long-term prospects and have become a recipe for dollar weakness when concerns over U.S. deficits mix with worries over central bank diversification.

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

To protect yourself from an erosion of purchasing power, choose gold -- for all the reasons we've explained over the past several years.


mikalDawson conference PR#1348458/11/05; 13:36:55

GATA's Dawson Gold Declaration - August 11, 2005
From newsfeed @ -Media picks up declaration which GATA released early in the week.

TopazPhysical Culture.#1348468/11/05; 13:43:57

Our altGold Chart shows a fairly defined "copy" of action between June and August (albeit Aug going a bit early) and as such, we could expect Gold to get a bit toppy here however...
...with only 94 Comex Deliveries getting done, to total a shade under 7K, I feel this situation will change and PoG should now continue it's ascent.

It's ONE thing to quite simply orchestrate a monetary response to the tendency to revert to the "mean" simply increase short-term rates to make holding Cash unattractive ...however to deflect a concurrent move to Gold, well, that's ANOTHER thing entirely!

mikalLiquidity crisis among fears about flawed investment schemes#1348478/11/05; 13:59:47

As Hedge Funds Go Mainstream, Risk is Magnified - Ben White - August 11, 2005
Gandalf the WhiteWELL -- Sir Topaz told you it was coming !#1348488/11/05; 15:06:07

AND today's FUNTASTIC "Breakout" means that we GOLDHEARTS can look forward to hearing "TO THE MOON, Alice" again !

Gandalf the WhiteLook Sir Goldilox ---#1348498/11/05; 15:09:34

Yesterday's "RAPIDS" are getting like little WATERFALLS today!

Cometoseaccelerant ???#1348508/11/05; 15:46:26

something rare this way came today with the breaking of the $6 rule in GOLD to the upside some 9 $ .

This action has many wondering and asking the question , what is going on ..????

There is a fire burning and it has been burning for some time now we who have been following the Metals Markets are aware.......

Today's action indicates accelerant was added to the fire....

and while we may question and guess as to what might be today's catalyst....? it is more interesting to me at this time .....

to wonder if it's accelerant ......and if it is accelerant ....if the nature of it's presence will remain permanent......

SYSTEMIC AND might very well be
both of these....

which might mean easier cruising in the near term with much less chop

and I will remember to listen to the ADEN SISTERS WHEN they remind me where the BRAKES are ....

USAGOLD Daily Market ReportPage Update!#1348518/11/05; 15:49:29">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Thursday Market Excerpts

August 11 (from MarketWatch) -- Gold futures closed above $450 an ounce Thursday for the first time in five months, logging a gain of almost $9 -- the biggest this year.

A weaker U.S. dollar and record oil prices sparked the return of precious metals' appeal as a defensive investment.

"We have achieved lift-off," said John Stafford, editor of Stafford's Investment Strategy Letter.

"Those looking for 'one more pullback' will be wrong and have egg on their faces."

He added that "18 months of correction and consolidation is enough. ... This is the real thing."

COMEX December gold contracts traded as high as $452.70.

Prices closed at $450.90, up $8.90, or 2%, to mark their highest close since March 18.

"The [trading] range is fairly impressive," said Thomas Hartmann, analyst at Altavest Worldwide Trading. He said he hasn't seen a price movement like this since January, when the daily range was $11.30.

The day's gain is "probably the biggest gain this year and possibly over two years," he said.

The U.S. dollar sagged against its European and Japanese counterparts as a mixed bag of U.S. data was overshadowed by brighter economic prospects elsewhere.

Demand for gold often climbs on the heels of a weaker dollar because the precious metal is used as a hedge against financial losses.

At the same time, oil prices continued to reach records Thursday, with September crude rising above $65 a barrel in New York.

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

TownCrierGold charts#1348528/11/05; 16:15:36

Every chart looks good.


GoldiloxWaterfalls#1348538/11/05; 16:26:14

@ Gandy,

Yes they have returned, I notice through the "egg on my face!"

As $450 is noted as a technical hurdle, tomorrow may hold the key to the momentum.

mikalCoin designers "inspired by 1907 U.S. gold"#1348548/11/05; 16:33:41

How to coin a state symbol - Erik Lacitis - August 11, 2005
Nimble article on Washington quarter design and selection contains several pronounced tributes- to the U.S. 1907 Saint Gaudens and Miss Liberty.
Also serves up a reminder of the collecting preoccupations of alarming numbers of naive children and adults. Not the casual collector or history buff, but the majority whose
focus is base metal coinage such as modern quarter and nickel redesigns, to the exclusion of everything else. A shame that the promotional energies of the U.S. Mint are not biased towards the most valuable of their annual output or that of prior years.

Boilermaker968 msg#: 134837#1348558/11/05; 16:46:39

Thanks 968 for the subject post. Janet Yellen has put on her best Goldilocks scenario to keep the financial world from panic. She didn't mention that the "reversion to mean" of housing prices might be expected to go below the mean by the same percentage as it was above the mean, ie., a double down. Also, she didn't mention the relative leverage involved with housing versus the stock market. If I have equity of 25% in my house and the price declines 25% I'm back to zero equity. This may get my attention more than a 25% drop in my stock investments where I have no leverage. My real estate inspired spending may be curtailed beyond the 3.5% multiplier that Janet suggests. Another factor that's lacking in her analysis is also related to leverage.
Repo houses on the market will drive prices down just like margined stock will. The housing market in the "hot" markets are probably the most leveraged. These markets are akin to .com stocks. Sell now!

When it comes to wage push inflation here's my view. In the US most of the jobs are low skilled service sector jobs. We have tens/hundreds of thousands of legal and illegal immigrants willing to take them at minimum wage. This puts a cap on wage push inflation. Europe has the same scenario with Turks and Arabs filling the role of low cost immigrants. Manufactured product prices are capped by super cheap Asian labor.

This is not a stable system. Janet Yellen can try to put lipstick on this pig but it's still a pig destined for the slaughter.

mikalSA Strike off#1348568/11/05; 17:38:09

South African Gold Miners Call Off Strike - August 12, 2005
Work set to resume "tonight" in their gold mines.

CometoseMcHugh's Purchasing Power Indicator on the HUI #1348578/11/05; 17:51:10

Date: Thu Aug 11 2005 19:40
Cometose (McHugh's) ID#139261:
Copyright © 2002 Cometose/Kitco Inc. All rights reserved
PPI indicator on the Hui generated a buy today which now confirms the Hui 30 day Stochastic signal which generated a buy signal several days if not a week ago .....

more accelerant I would expect........

GoldendomeToday--Everything up...but the dollar!#1348588/11/05; 18:03:20

From the INO market charts at the top of this page, today was a day to buy something--to get rid of dollars. Buy Gold, Silver. Buy Stocks--the Dow, NASDAQ, SP. Buy the bonds, the CRB, anything to get rid of some dollars. Coastal real estate advanced another $10,000 today, on buying... Cars, China stuff--everything a Buy, today.

Tomorrow comes the trade report.

ArcticfoxToday..everything!! was up.#1348598/11/05; 18:21:48

Read this quote at FSO today..

There Always is a Bull Market Somewhere,
but There Never is a Bull Market Everywhere (for long)

KnallgoldGold sentiment#1348608/11/05; 23:13:33

"CNBC is interviewing a gold fund manager and just showed a video of a gold wherehouse that was stacked high and deep with bars. WOW!"Goldilox

Saw something similar recently in a financial ad,plus you posted the other day about some analyst speaking "of plenty of supply" (haha),on TV one commentator remarked Gold is not the place to invest,its only a store of wealth (nothing industrial) and therefore won't attract much money.

The contrarian smells blood-the white of their eye??As controllled they want to let it appear...

GoldiloxUS may deny visa for Iran leader's UN address#1348618/11/05; 23:46:42


The Bush administration is considering taking the unprecedented step of preventing a visting head of state from addressing the United Nations in New York by denying a visa to Mahmoud Ahmadi-Nejad, Iran's new elected conservative president.

Officials said a decision rested on investigations into whether Mr Ahmadi-Nejad was involved in the 1979 US embassy hostage crisis and the killing of an Iranian-Kurdish dissident leader in Vienna in 1989. Iran denies his involvement in either event.

A top Iranian official confirmed Thursday that Mr Ahmadi-Nejad, who took office on Wednesday, planned to address the UN Millennium Summit and its annual General Assembly next month. His US visa application is expected to be submitted on Friday.


All in the good name of "exhausting all diplomatic solutions", I am sure. Why not just declare war and get it over with. If Iran's representative is not going to be allowed to attend the UN, it is no longer an "international" body, but rather, a guest organization that meets at the "pleasure" of the host administration.

I wonder if the international bankers that froze $15 Billion in Iranian Assets, calling it the "Shah's personal fortune" are gonna be denied access to NYC, as well. They pretty much engineered the "hostage crisis" with that single act of international theft. They could be "cellies" with Bernie Evers' and swap stories of how many $Billions they ripped off.

Golden LionheartIran Leader to UN#1348628/12/05; 01:17:36

Then IMHO its time to move the HQ of the United Nations out of New York to some Democratic country such as Sweden, Norway or Switzerland!
Golden LionheartGold#1348638/12/05; 01:19:07

Gold has lift off!
Caradoc@ Golden Lionheart#1348648/12/05; 01:32:28

Yes, $449 looks like the voyage is beginning. I'm still expecting a smashdown to $445 for Friday, the 26th of August. Only question is whether $456 comes before the 26th or after the market recovers from the smashdown.


TopazGolden Lionheart.#1348658/12/05; 01:56:29

While driving home this a-noon, (here) I heard a report that GWB had "approved" the Iranian visit to address the UN.
My first and only reaction was exactly the one you expressed in the earlier post.

masCaradoc#1348668/12/05; 02:11:51

Why the 26th, expiry date? Or what?

SundeckSafe as houses...#1348678/12/05; 05:04:36

Krugman at the NYT sums up the economic recovery...its all about buying and selling houses...


The answer, these days, is that we make a living by selling each other houses. Since December 2000 employment in U.S. manufacturing has fallen 17 percent, but membership in the National Association of Realtors has risen 58 percent.


Quick, what do we do next?? More military spending perhaps? Maybe start spending on infrastructure to supercede the oil age (now that might be "productive")? How about more emphasis on new collective delusions...Tulips? (Nope...been there, done that!) Religion? (Yup...always a winner!) Warfare? (It's in the pipeline...wink, wink, nod, nod!) (mmm...maybe more mileage in that one!) Space? (OK...but we need VOLUME!) How about environmental restoration? (Mmmm...something for everyone there...but first we have to wean people off big houses, gas-guzzelling cars and lots of fancy foods...but it has potential...and it may come by default...). OK...I give up...let's just keep printing's worked well so far!


canamamiWashington refuses order to refund $5B Canadian duties#1348688/12/05; 06:42:09

U.S. poised for trade war
Washington refuses order to refund $5B Canadian duties

Paul Vieira and Drew Hasselback; with files from JasonKirby in Toronto
National Post

Thursday, August 11, 2005

CREDIT: Greg Fulmes, CanWest News Service
Canadian lumber producers say they expect Ottawa to act decisively if the United States ignores the NAFTA ruling.

OTTAWA and TORONTO - Washington says it has no plans to obey a NAFTA ruling that compels the United States to refund an estimated $5-billion in illegally collected duties to Canadian lumber producers -- setting up a potential trade war that experts say could threaten the future of the North American trading bloc. .......

GoldiloxVisa Approval#1348698/12/05; 07:49:34

@ Topaz,

If your report was correct, it sounds like the Iranian VISA approval "process" was more Rove-Style "my back yard" posturing. The difference between government and the Boy Scouts seems to be that one of them employs "Adult Leadership".

GoldiloxCanadian Trade dispute#1348708/12/05; 07:56:22


And one wonders why the Canadians are less restrictive on the Chinese. At least they are willing to pay for the resources they want.

I can just see Snow-Man arguing abut a "level playing field" with the Canadians. Uh, Uh. . . .

NAFTA is a joke, with CAFTA as an "after-thought" punch line.

Free trade? Try selling your car in Mexico, and you''ll be singing a rousing version of the Kingston Trio's "The Tijuana Jail".

Goldilox70,000 Stranded at Heathrow Over Labor Spat#1348718/12/05; 08:07:49


Thousands of Travelers Are Stranded As British Airways Cancels Heathrow Flights Over Labor Spat

LONDON (AP) -- At least 70,000 travelers were left stranded Friday as British Airways canceled all flights to and from Heathrow Airport after catering staff, baggage handlers and other ground crew walked off the job in wildcat strikes at the height of the summer tourism season.

Staff handed out food and water to hundreds of tired and frustrated passengers, many of whom had spent the night on benches and floors at the world's busiest international airport. Travelers stood in long, slow-moving lines in an attempt to get on alternate flights.

"We're trying to get on any flight to Germany," said Helge Kreckel from Frankfurt. "We don't care where or which airline, just any flight. Then we can take the train to Frankfurt. We're not leaving this line until we get it."


Now if this were a US carrier, I can just imagine a "catereing" picket line with Mr. Peanut and Mr. Pretzel leading the parade.

canamamiReply to Goldilox#13487208/12/05; 09:25:09

I'm not aware of your debate with Snow-Man. However, even a friend and admirer of the US such as myself is fed up at the US' behaviour in the lumber and the beef disputes, as well as a few others.

There is a big difference, however, between Canada and China. In spite of the fact we are too left-wing in my country, Canadian companies are still merely private bodies focused on profit-making, like US companies. Our currency floats naturally, and is not managed as an export subsidy.

Chinese companies are state agencies, which ultimately serve the ends of the Chinese state. China's currency and wages are artificially suppressed to make China the factory floor of the world, a strategy which has geopolitical as well as money-making objectives.

The US behaviour towards Canada in some of these disputes is unwise, partly because it undermines the legitimate complaints the US has with China.

RimhGoldilox, canamami#13487308/12/05; 09:50:34

While the US' formal position is to refuse to pay back the $5B in tariffs, the latest WTO appeal ruling in Canada's favor again may set the stage for a behind the scenes deal to resolve the dispute. Headlines are often for political posturing, but there's a sense by some that this latest ruling will encourage the US to be more realistic at the bargaining table. But of course until a deal is struck, who knows?
Rimhsorry....#13487408/12/05; 10:30:21

that's NAFTA ruling....
USAGOLD / Centennial Precious Metals, Inc.Enter the gold market with grace and confidence.#13487508/12/05; 10:34:30">Get a head start on the gold market!
TownCrierGold reaches for 17-year highs as funds buy#13487608/12/05; 10:51:47

Reuters, Aug 12 -- Gold is on track to reach its highest since June 1988 as fund money pours back into the market, triggered by dollar weakness and high oil prices, traders said today.

Bullion surprised many on Thursday when it jumped by more than two percent. The market then paused in Asia trade, before moving up a gear in early European business to strike a fresh eight-month peak at $449.30 an ounce.

Traders noted that gold had also jumped in euro terms, breaking back to €360 for the first time since early July.

"Gold seems poised to move higher over the very short term. Markets will remain volatile and trade erratically," Frederic Panizzuti of MKS Finance said.

Oil prices hit a fifth consecutive record high on Friday, topping $66 a barrel.

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

Instead of thinking that gold is reaching 17-year highs, another BETTER way of looking at this is to recognize that gold has been undervalued for so long, and that even now, in our inflation-filled world, you can still load up on it cheaply -- at the same market prices as 17 years ago. Wow, now THAT's a sign of a bargain.


TownCrierTrade deficit surges on record oil imports#13487708/12/05; 10:59:34

(AP) Aug 12th WASHINGTON -- The U.S. trade deficit increased sharply in June as surging oil prices pushed petroleum imports to an all-time high and the politically sensitive deficit with China also set a record.

The Commerce Department reported that the imbalance between what America sells abroad and what it imports rose to $58.8 billion in June, an increase of 6.1 percent from the May deficit of $55.4 billion.

More than half of the trade deterioration in June reflected America's surging foreign oil bill, which hit a record high of $19.9 billion, an increase of 9.8 percent from the May level.

The average price of a barrel of imported crude oil jumped to $44.40 in June, the second highest monthly average for imports on record, exceeded only by a $44.76 average in April.

Analysts say the foreign oil bill will rise even higher in coming months, reflecting a continued surge in global oil prices, which set a new record of $66 per barrel on Thursday.

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

Looks like larger future trade imbalances are in the pipeline. (Both literally and figuratively).


TownCrierStocks fall#13487808/12/05; 11:23:46

NEW YORK (Reuters) - U.S. stocks fell on Friday as technology bellwether Dell Inc. slumped on a lower sales outlook and crude oil topped $67 a barrel, worrying investors that it may slow the pace of earnings growth.

Shares of Dell dropped 7.8 percent... its biggest one-day drop in almost four years...

The Dow Jones Industrial Average was down 102.22 points...

Nasdaq was down 28.15 points, or 1.29 percent, at 2,154.32, its biggest one-day drop since the end of June.

...Also weighing on stocks were data showing a worsening trade deficit, higher-than-expected import prices and a drop in consumer sentiment, fueled by higher gasoline prices.

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

Speaking of bargain hunting, stocks would still have a long drop to come down down to price levels equal that of 17 years ago. (see msg#: 134876)

Choose gold, the best bargain going.


TownCrierLong, slow retirement of paper gold?#1348798/12/05; 12:33:54


RELEASE DATE: Friday 12 August 2005


Clearing statistics for gold and silver were sharply lower in July, as trading ranges in both metals narrowed.

Ounces transferred in gold fell 23.5% from June's three-year high of 19.1 million ounces to 14.6 million ounces.

Based on an average fixing of $424.48 -- down $6 from June -- value fell even more sharply, to a daily average of $6.2 billion. The number of transfers decreased more modestly, by 9.6% to an average of 748 a day.

Measured year on year, gold statistics were slightly lower for the most part, with the exception of value, as the average fixing was $26 lower in July last year. Ounces transferred fell 3.3% and the number of transfers was 3.5% lower.

^---(see url for full report and hyperlink to charts)----^

"Ounces" Transfered among the fraternity are down a full two-thirds from the heady days of 1997. Take this decrease in book activity as an evolution in gold from long suffering as a monetarily managed voluminous papery plaything of the bankers toward more full-bodied metallic vigor as scarce physical property.


GoldiloxGold Strike Halted, But Jobs Could Be Big Loser#1348808/12/05; 12:59:19


SA's gold-mining houses yesterday began counting the cost of a crippling four-day strike after the unions formally accepted Wednesday's revised offer of 6%-7% wage increases.

The industry-wide strike, which began at midnight on Sunday, was reportedly costing the sector R130m in revenue, or 40000oz of gold, a day.

SA accounts for 15% of global gold output and the sector contributes 2% to the country's gross domestic product.

Sparked by the Chamber of Mines' insistence on a 5% wage increase instead of the 12% demanded by the workers, the strike quickly grew to be one the biggest in 18 years -- sucking in members of the key unions, the National Union of Mineworkers (NUM) and Solidarity.

Yesterday the chamber, which represents all mining houses in wage negotiations, said the mineworkers were expected to resume work last night.

The unions and the chamber also agreed that wage increases next year would be one point above inflation.

According to the agreement, the companies would, in addition to the pay increases, offer a "living out" allowance of R1000 and a transformed provident fund catering for a secured retirement portion and a 1% employer contribution to the risk portion. The parties also agreed on R10 000 funeral cover.

NUM general secretary Gwede Mantashe said yesterday: "We are also pleased that we were able to settle the strike in such a short space of time."

Solidarity spokesman Dirk Hermann said last night that his union would still call for the establishment of a mining industry bargaining council to prevent companies from making offers to individual unions.


Rather quick settlement. I'm surprised the Union settled so close to the chamber's original offer. They must have felt that a prolonged strike was futile, or may not have had a decent strike "war chest" to support their efforts.

GoldiloxComparisons#1348818/12/05; 13:04:01

@ canamami,

Perhaps you missed my point. I was not comparing Canada to China, but actually comparing the actions of US and Chinese customers of Canadian firms.

I once worked for a startup with a "one-trick pony", a single major customer, and man, were they a pain in the nether regions. Knowing they had Wal-Mart status with us, they took full advantage.

GoldiloxCrude and gasoline#1348828/12/05; 13:09:56

The march higher continues.

Lt Sweet Crude is at $66.86
Unleaded gas is wholesaling at $1.99.

A CNBC analysts just told Maria that nothing on the horizon suggested a correction in the near future, giving the geopolitical and supply-demand issues driving specs.

As noted earlier, most of the June trade deficit numbers are derived from 45-day-old and older data, so this latest rise in fuel costs will really look nasty two months down the road.

GoldiloxCNBC and gold#1348838/12/05; 13:24:37

Right on cue, and fashionably "late to the party", CNBC is offering its second day in a row of gold market "analysis".

Will they get investors whipped up just in time to correct, or will they fuel broader interest?

Of course, their focus is on equities, which seem to following the metal recently.

TopazGold/Silver.#1348848/12/05; 13:52:25

As expected, all the mainstream blurb is now focused on the end of the strike in SA, tacitly implying a return to normalcy in the Gold price.
Our Au/Ag comparitor would also suggest a softening in Au going forward.
However, we are only half way through August and I'd be expecting this current divergence to go to June 1 proportions at least, this time through.

We watch a most interesting time!

TopazGold/alt's#1348858/12/05; 14:16:33

Here again we're seeing a non-reflective reality where golds performance vis the alt's is "lacklustre" ...not to mention alt/Dollar, they're (alt-currencies) simply not cutting the mustard imo!

I'd not be at all surprised to see a repeat Gold/Dollar run next week ...say Au$455+ and DX90+ IMHO.

TopazLast one, I promise ...Dollar/Oil.#1348868/12/05; 14:39:18

This little divergence, given the Bond move today HAS to correct itself next week.
Are we on a $/Oil Standard ...OR aren't we?

USAGOLD Daily Market ReportPage Update!#1348878/12/05; 15:10:35">
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.

Friday Market Excerpts -- Gold extends rally, up nearly $9 on week

August 12 (from Reuters) -- U.S. gold futures edged up to close at their highest level in eight months on Friday, as the mixture of dollar weakness and crude oil at $67 a barrel drew investors to alternative assets like the precious metals.

News of a 6.1 percent rise in the U.S. trade deficit in June ($58.82 billion) after the gold market opened prompted a flash of buying as the dollar eased, but futures later trimmed back their gains amid some scattered profit-taking.

COMEX December gold futures contracts climbed 50 cents to $451.40.

Spot gold was up $1 on the day, last fetching $446.30/447.10.

"The momentum players are back in gold," said George Gero, senior VP at Legg Mason Wood Walker, referring to the market heavyweights, the commodity funds.

Gero said that fund-type accounts were massive buyers of gold at the futures pit at the exchange on Thursday and they continued to aggressively take more offers from floor brokers on Friday.

Independent analyst Greg Weldon said he saw potential for a big wave of money inflow that could drive gold toward $500, if the dollar selling as well as buying of commodities seen over the last day continues.

"Investors remain heavily underweight the precious metals sector" relative to other assets like paper currencies or energy, said Weldon.

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

TownCrier'Real Money' Radio Recap: Gold Shines Through Stock Selloff #1348888/12/05; 15:19:47

8/12/2005 ( Staff) -- Stocks may be selling off, but Aaron Task says gold is glittering.

Once again sitting in for the vacationing Jim Cramer on RealMoney Radio, Task told listeners that Friday's selloff is due to Dell's lowered guidance and may not be the end of the world. Still, it's a good opportunity to look at gold prices, which have been heading in the other direction, up more than 5% since last month to $445 an ounce.

"Armageddon is not around the corner," said Task, co-executive editor of "However, gold is a safe haven against financial distress and should be at least 5% of an investor's portfolio."

Task reminded listeners that people have been flocking toward hard assets such as real estate since the bubble burst, and people need to remember that gold is also a hard asset worth picking up.

When everybody is buying gold, said Task, then it's time to leave, but "we are nowhere near that point."

One way to enter the precious metals is to buy gold coins and put them in your safety deposit box.

..."Think about a pinch of gold for your portfolio and don't panic."

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

Call USAGOLD-Centennial and know that you're in very good hands.



GoldendomeWe're not in Kansas anymore.#1348898/12/05; 16:55:29

What does the roundtable think of today's and the week's market actions?

My take is that the boys are jumpy and fearful about the on going strength of the u.s. economy is it walks into the head winds of higher energy prices. The trade deficit numbers show that the u.s. consumer is still racking up the debt to buy foreign items and energy (debt is the growth in the u.s. economy). So long as we acquire more debt the economy grows--odd that sign of strength. So-- the stock market pretty much turned turtle this week with fear; the Bond markets, the last couple of days at least, rallied in sucking up the money.

Soon the bond market yield curve will look like a concrete patio--flat, save one inch per 10 feet. If my looking's are about correct, the two year note gets you about 4/10's more than the 3 month bill; and the 30 year bond yields a whapping 1/2 point more interest than the two year! From start to finish, less than a point between the 3 month and the 30 year bond. Obviously, someone must think that's pretty good eatin', as they seem to loading up on them!

One thing that I'm getting a kick out of, is how these guys seem to be dancing around like water dropped into a hot skillet. They don't seem to know which way to jump from one day or week to the next. Another thing that must be tearing at some insides in this market, is the disappearance of the easy, carry trade money. Others here have posted here about some of the potential blow-ups that may happen at any time, some have said that Fanny is on government life support now. Wow! There's surely, no place like home.

Gold? ----Always at your service!

Gandalf the WhiteFUNTASTIC show by the "ESF Boyz" today !#1348908/12/05; 18:12:26

THROW US$ at it !
Watch the skyrocket --
THEN, cover your head and run for cover !!

Clink!Thanks for the cleanup, TC#1348928/12/05; 18:54:03

Some people just don't realise they are abusing a privilege ....


SmeagolThe Sound(ing) Dollar Policy#1348938/12/05; 19:08:57

Ssir Gandalf, is that a whale we ssee, spouting in the midst of your dollar waterfall chartses? Dive! Dive!(cackle)


PRITCHOEverybody Looses - - - - Pt 2#1348948/12/05; 22:13:35

This is worth reading in full for some of the stats - -

SNIP - -
A fellow called me this morning and asked me, "How long can this go on?" My answer? I don't know, but it has gone on as long as it has, as opposed to the German and France collapses, because of huge amounts of credit. I mean credit, the likes of which couldn't even be comprehended a few decades ago. Never in history, have so many bought so much with so little. Never in history, have so many been in debt to the extent that it may never be paid back, because of bankruptcy, and the chain of bankruptcies this causes down the line, to all industries. Now this is frightening to me, and I hope to you.

Maybe the answer is, that as long as the presses run, it can go on. The press runs of currencies don't really prolong the thing forever, because wages never keep up with the prices increasing. They can't, because wage increases, as far as unions anyway, can only happen at the close of a wage contract, which are often two or three years long. Press runs of currencies are not a solution, because when governments sell their debt to foreigners or domestic investors, and inflation is running at a huge rate, the bonds and treasury bills are also at certain interest rates for long periods of time. Runaway inflation towards the ultimate end, are figured on a daily basis. This discourages anyone from buying government debt, or any other debt either, because investing in debt for more than a brief period of time, is worthless, as the currency is debasing at a faster rate than the interest earned. It has to come crashing down…eventually.

gvhumble question for the forum#1348958/12/05; 22:38:03


I apologize if I have not properly read the archives, but I am curious.

What makes gold an objective store of wealth? What exactly is it about the metal that defines it as an objective store of value?

Is it because throughout history, mankind has generally gravitated toward the metal as a fungible divisible unit of measure, medium of exchange, and by proxy a store of "wealth". (common definition of "money").

I understand gold not being "money" in the modern sense of the word. From what I see, "money" nowadays is primarily a medium of exchange and definitely not a store of value, obviously.

If gold is defined as being a "yardstick", or rather, a vehicle to serve as a "checks and balances" against the whims of the paper-printers, then cool, if that actually works out in practice. The people who bought gold at $800 aren't believing the store-of-value argument, though.

I am not sure how the metal itself is a store of value. I could be wrong, but I thought "wealth" meant "store of value". I'm just trying to understand how the physical metal represents a store of value.

If I get paid for digging a ditch, I have expended X amount of energy in the act of work (either physical energy or mental energy). Then, I am compensated for my work output. Compensated in what?

I definitely want my compensation to preserve over time, I do not wish to see it inflate away. But why is it that Gold will help me preserve those calories of physical or mental output? Why is Gold the "objective store of value" ?

Why not just use some other item as the means for a "checks and balances" against paper-printing? Why gold?

I am not sure there is -any- true Objective Store Of Value.


CaradocGV's query#1348968/13/05; 01:25:02

If "store of value" means simply means something that retains value, a large garage full of copper pipe would store the same value as a small pouch of gold coins. Unfortunately, the "spread" between wholesale and retail is brutal, it fills up your garage, and it's awkward to liquidate.

Go with gold!


CaradocSinclair and $456#1348978/13/05; 02:44:41

Assuming a smashdown from whatever level to $445 by Friday, August 26 (so that all those futures contracts go sour), I recently pondered whether we'd reach $456 before the smashdown or during the bounce after the smashdown. As of a few hours ago, Jim Sinclair has gone a step further than I did:
***text follows***
A close above $456.60 shifts the odds sharply toward a run in gold versus December delivery in the $475-$485 range.

This is another way of saying that the resistance at $456.60 is significant. If this level is to come under a test it will do so in the next week and a half.

I have withheld exact point and exact time because this information was being used to hurt you by COT. It became evident time after time after time. The reason I will be reinstating specifics is not an ego thing but rather because for gold to make that run it will require a perceived loss of control by the Fed and the US treasury over their monetary friends around the world who assist in doctoring every item to keep the financial social order under their control. Such an event would render COT powerless.

The exact point is $456.60 and the exact timing is with one and a half weeks from this writing. That is the window of opportunity for the 2005 Big Kahuna in gold.
***end of text***

By "one and a half weeks from this writing" it's not likely that he's counting non-market days like Saturday and Sunday which would have 10 1/2 calendar days from yesterday evening work out to Tuesday, 23 August, with plenty of time for further rise and still have smashdown by the following Friday. More likely, he's looking at five days as a "week" of trading so that "one and a half weeks" comes at the middle of the trading day on Wednesday the 24th.

Since I function in the realm of paper to get the greenies that pay for the real thing, my preference would be to get the smashdown over with before hitting 456 so that we get a clean (and easily tradeable) rise thereafter. It makes my head hurt to think about hitting 456 at mid-day on either the 23rd or 24th. How far to ride the tiger? When to jump off? The only easy part would be buying back in after the smashdown.

Even hitting $456 early next week doesn't help the trader. True, gold takes off --apparently toward the moon -- with spot taking out half or more of the distance to $500 within days (Sinclair mentions $480), but from that level it becomes possible that TPTB will skip the smashdown and go with "cash only" settlement of all those futures contracts.

The only sure thing is that converting loose greenies into yellow metal at prices available this weekend is a good move.


Topazgv#1348988/13/05; 07:57:36

You need to be crystal clear in your mind what "store-of-value" represents and how it is measured.

Of course to measure "value" in FRN's is an oxymoron, as Fiat currency is simply an inflating denominator of Debt ie: your Dollar will return you (say) .025 hr's labour equiv "today" and (say) .010 hr's labour in 5 Yr's.
The ground is far too shaky to base our measurement of Value in Currency gv.

We are offered "interest" to compensate for this erosion in purchasing power and, after all and sundry have had a bite, the consensus is "saving-money" is for the Mugs.

So we are left to ponder "what" to save as a store of value that isn't Money ...or has NO monetary stigma attached...
...I have to say, Gold is far and away the BEST of many candidates that fit the Bill.
An Oz of Au is, was and will be just that!
Even astute Central Banks are again coming to this conclusion gv ...who are we to argue.

This "Current" situation, as has those before it, will run it's course and we may see our Gold valued higher OR lower in Fiat terms but, in the SoV wash-up, what REALLY matters.

An Oz an Oz an Oz.

24karat@gv Humble question for the forum/ mess. #134895#1348998/13/05; 09:53:32

Great question gv. I am just surprised that the forum has not jumped on this question like a bunch of horny monkeys !

To me, it seems that a store of value can be anything that is in vogue at the time. We've seen real estate being perceived as a store of value. We've seen the same with the stock market and 25 years ago, it was gold. In each case investors bid up the prices to unsustainable levels.

Goldbugs like myself believe that the metal is currently deeply UNDERVALUED. What we know about gold is that it has been an accepted form of exchange for at least 5000 years and that it has some intrisic value due to the metals' various uses. These are advantages over many other assets.

Cash on the other hand has only paper as its intrinsic value. Those who argue that "cash is king" would say that cash also has the ability to earn interest.

Your point that those poor saps that bought gold @ $800/oz may not think the metal was a good store of wealth but as we've seen over and over again, nearly anything can see out of control price swings.

On a separate note, I wanted to introduce myself as a new poster to this forum. I've been a goldbug for about 3 years and I've been religiously reading this forum for about two months. The contributors here are a sharp bunch. Each day I look forward to reading the posts whenever I get a chance to log on. Just don't expect to receive any words of wisdom from me as I am "no theat to Einstein" when it comes to the workings of the financial markets.

Gandalf the WhiteWELCOME Sir 24Karat#1349008/13/05; 11:03:45

Thanks for joining in on the discussion !
Now, don't be a stranger.
BTW, where is "The Stranger" ?

GoldiloxWelcome Aboard!#1349018/13/05; 11:11:10

Welcome to the forum, 24carat.

Not so many "Einsteins" here. We just read a lot, try to figure a few thing out, and post a snip from the source readings - perhaps accompanied by a question or comment.

Feel free to test the water. The worst that can happen is some ne'er do well flames your post, but a little thick skin goes a long way. The forum rules (mostly well adhered to) eschew name calling and other typical online misbehavior, as well as advertising or hawking any wares by other than the host.

One more caviat. Although we are currently enjoying an open forum at the pleasure of our host, straying too far from related issues may elicit some electronic eye-rolling or an occasional delete and/or timeout issued by the sitemaster (aka TownCrier) or Lord of the Castle (MK)- at their discretion, of course . . .

I look forward to your observations!

NedWicked baby-boomer demographics stuff#1349028/13/05; 11:31:12

Follow the link to the 'McKinsey & Company' link, follow to the 'US:Boom or Bust' pdf.

Article a little slow until page 15. Graph there shows lowest fertility rate for women at 2.0 children in 1937 (depicting fewest number of present retiree's aged approximate 60-65) while highest fertility rate in 1957 at 3.8 (aka the 'baby-boomers'), dissaving rate(s) begin to plummet now, 'baby-boomers' begin to move through peak saving years having peked in 2000. This graph on pg. 18.

"No easy counterbalance demographic pressure...." pg. 29

"This slowdown would reduce corporate earnings and government tax revenues.....will be grappling with fast-rising health care and pension costs." pg.28/29

USAGOLD / Centennial Precious Metals, Inc.A world of gold at your fingertips...#1349038/13/05; 11:58:34">gold -- a global calling card
SmeagolGold = Wealth >>> Time#1349048/13/05; 12:22:34

We welcomes you to the Table Round, Ssirs Gv and 24karat. (hey even lets the likes of us in here! (cackle))

"What makes gold an objective store of wealth? What exactly is it about the metal that defines it as an objective store of value? Is it because throughout history, mankind has generally gravitated toward the metal as a fungible divisible unit of measure, medium of exchange, and by proxy a store of "wealth"."

Ssss...yess... Hisstory does it, Hisstory proves It. The physical properties of elemental Precious are unsurpassed as a CANDIDATE for keeping "wealth" in stasis through the longesst possible Time. Other things can "sstore" wealth, yess... but Precious has proven the BESST way to do this.

"I understand gold not being "money" in the modern sense of the word. From what I see, "money" nowadays is primarily a medium of exchange and definitely not a store of value,

"Modern" being worthless paper notes with nothing behind them but the fading likelihood through Time that you will be able to pass them to some other person in exchange for
something that has objective value, eh? "Modern" meaning those notes attach to a (temporary) political sysstem, not (eternal) Nature. But if the tricksy paper lie propagates long, then there may SEEM to be little INSTANT difference between that and Gold.

"If gold is defined as being a "yardstick", or rather, a vehicle to serve as a "checks and balances" against the whims ofthe paper-printers, then cool, if that actually works out in practice."

O, it does... this is why governments and banks keep It as a lasst resort, and while they will have their play-days, the Precious will always win in the end, O yess...
Why do they want us to use their limitless paper while they keeps Precious for themselves? Something sstinks, there...

"The people who bought gold at $800 aren't believing the store-of-value argument, though."

Over Time, they will, precious... you watch! (grin) We live in ssuch an impatient world.

"I am not sure how the metal itself is a store of value. I could be wrong, but I thought "wealth" meant "store of value". I'm just trying to understand how the physical metal represents a store of value."

It represents wealth because people trusst that It will do that... jusst like paper notes! Unlike paper notes, though, the rare Precious cannot be mass-produced at a whim, and thus can never be masstered, only temporarily influenced (price controls, taxes, panics)... and even that influence depends on people trussting in falsehoods, not truth. When It is left alone to do It's job, It's "wealth constant" is extremely stable and trussty over generations.

"If I get paid for digging a ditch, I have expended X amount of energy in the act of work (either physical energy or mental energy). Then, I am compensated for my work output. Compensated in what?"

Anything you agree to take for your effortses... you may want wood for a shelter or fire, or a nice fissh to eat if you are hungry, more so than Precious, precious... but if not, Precious is a besst way to preserve and transfer your wealth to ssomeone ELSE through Time (and disstance)... because It is a besst thing they can use to do the ssame thing, through Time, and sso on.

"I definitely want my compensation to preserve over time, I do not wish to see it inflate away. But why is it that Gold will help me preserve those calories of physical or mental
output? Why is Gold the "objective store of value" ? Why not just use some other item as the means for a "checks and balances" against paper-printing? Why gold?"

Many things converge, to make Gold an ideal wealth-sstore:

It is very rare.
It is a single element.
It does not corrode.
It is compatible with the human body.
It is extremely malleable and divisible.
It is beautiful.
It may be easily formed into shapes of standard weight and purity.

Other things can be used to store Wealth... diamonds, gems, iron, silver, canned food, land, trees, paper... the lisst is endless... Gold happens to be at the top of the list, for
nothing else preserves/passes Wealth as conveniently through Time with as little loss as does the Precious. Gold, Wealth and Time go hand in hand. Humans don't live long enough nowadays to experience that lesson... perhaps if they could remember the fiat disasters of the Passt and how much their ancesstors losst in them, then maybe we would not fall for ssuch now...

"I am not sure there is -any- true Objective Store Of Value."

Ai, you are right! You can't take value with you to the Beyond. And if somebody doesn't want your Precious (or paper) in trade, you will have to work out something else. Gold is only a servant, and a very good one... as Copper has come to be a preferred electricity conductor over physical distances, so Gold is the preferred "value-conductor" over Time. It waits patiently to flawlessly perform that function jusst like the wires in your house wait for you to flip the sswitches to let the current flow. Biding Time, It can easily outlasst you... eventually transferring the leftover fruits of your labor to your heirs.

Thank you for your Thought-insspiring Quesstions!


"Storm's a comin'. Get you goldside." - Captain Goldheart

NedHoly mackeral ! Chevron endorses "end of easy oil"#1349058/13/05; 13:37:36

Click on "download a pdf of this ad" and enlarge to read the endorsement by Chevron CEO David O'Reilly.


NedWhat does "Peak Oil" + "Baby-Boomer" = ?#1349068/13/05; 13:38:51

Get Gold Now !!!!!!

Have a golden weekend1

GoldiloxQuestionses#1349078/13/05; 14:54:55

Sir Smeagol,

Reading your treatise to the newbie's questions, I came up with a couple of ideas to run by you.

His question: "I understand gold not being "money" in the modern sense of the word. From what I see, "money" nowadays is primarily a medium of exchange and definitely not a store of value,

begs the following:

Does paper (or bytes repesenting paper) work better as modern money due to the upside down nature of "debt" and "credit"? What banker would want to carry gold loans from individual customers when there is no reasonable way to use anything like "fractional reserve" to cover them? Better to cover in FIAT that can be multiplied by progressive loan techniques. Something DEFINITELY stinks here!

Your quote: "It is compatible with the human body."

- I've been trying to gather info on monatomic gold and its potential for physiological benefit. Some is slowly coming to light, but not as quickly as silver's antibiotic properties.

Zecharia Sitchen suggests that early humans were the mining slaves for the Anunnaki gold accumulation, which helped fuel the Earthly demand as humans became more independent - interesting hypothesis.

I've included a link to another I have just begun reading - no opinion just yet.

Toodle - oo


Liberty Headgv - Why Gold?#1349088/13/05; 15:29:07

Any item or service with a demand can function as a store of wealth. The ideal store of wealth would also be secure from theft. The dollar is a poor choice as a store of wealth as its value is easily stolen through taxation and inflation. The ideal store of wealth would be invisible to the insatiable thieves that lurk through the databases of our wealth, and plunder on a global scale with impunity. The grandiose vermin with flag pins on their lapels have proven to be the greatest threat to confiscate our wealth, our homes, our blood, our children.
You can own gold and nobody but yourself needs to know how much you own or where you keep it. Gold is wealth that flies below the Imperial radar. Gold is very portable. It can easily be converted to most any currency in most countries.
As more folks wise up to the grand illusion, the more valuable Gold will become.
The tricky part is to survive the journey.

Best Wishes

GoldiloxWhy Gold?#1349098/13/05; 15:33:54

@ Liberty Head,

"The tricky part is to survive the journey."

Well spoken, indeed.


Clink!Ah, Progress !!#1349108/13/05; 17:01:24

I can remember, when I worked as a modem designer, that the epitome of chic was that the modem would allow you to work on a laptop beside the pool. How 20th century ! Now I can read my favorite forum -IN- the pool ! I just hope an excess of Miller Light doesn't cause me to overturn my floater.

Medical uses of gold you ask, Sir G ? How about a couple of links about cancer. The first concerns the replacement of gold/phosphorous for platinum in a variety of cancer drugs.

The other one is the gold plating of nanoshells (it's possible that this has already been reported here - I can't remember where I heard it first). The basic idea is that cancer cells are (because of their faster metabolism ?) less tolerant of higher temperatures than normal ones. We're not talking much here - only a few degrees over normal. Nanoshells coated in gold are injected into the tumor, and a means is used - the link mentions IR laser, but I've also seen electromagnetic induction - to heat them in a very localized fashion. Normal cells survive, cancer cells don't (hopefully).

Neither application is going to cause a run on the Comex, but it's nice to know there are other uses of (one of) our favorite metal(s) than just keeping the rascal bankers at bay !


Clink!Ah, Progress 2#1349118/13/05; 17:25:18

Of course, there are always drawbacks with technology. For instance, take my computer-in-the-pool situation. The battery capacity isn't enough for a really good soak, and the red warning light comes on to tell me that I might get cut off at any mome
mikalGold reflections (in your mirrors)#1349128/13/05; 18:13:27

More P's (Peace) of Gold:
Protecting families from swooping kites,
Pointing like sextants guide sailor's sights.
Passing to progeny of freedom loving folk,
Primary instincts it dare not revoke.
Preserving proceeds won hard through pain,
Partitioning true wealth from ill-gotten gain.
Plainly reminiscent of many a gilded time,
Purchasing gold with blood, sweat and grime.
Painted with radiance of solar paternity,
Placed first on the earth for all eternity.
Portioned for production of nanotech precision,
Propels high-tech industry and prevents collision.
Prohibits pretense and pro-forma plunder,
Priced for an instant far beneath under.

TopazG'lox ..Ye too will become as Gods!#1349138/13/05; 18:27:32

First thing, you'd better go check on Clink!, I think his accelerator just came to a standstill ;-)

If memory serves, Hudson took his leave from this mortal coil a couple of years ago.
I've linked a Florida/Hurricane/Bush/Gore page from your previous link ...curious eh?

We are also seeing an increase in seismic activity as the Moon transits through Half ..."again".

The RHIC site focuses on Sub-Atomic Gold and have recently achieved some stellar results ...I'll pull the link up and post it.
They might divulge some stuff on MAGold if asked.

mdgcChinese basket of currencies#1349148/13/05; 18:28:35

I have been away for a couple of days and may be posting some thing that has been psoted earlier. Apologies if so.


Dominant amongst a raft of currencies are the US dollar, the euro, the yen and South Korea's won.

The Singapore dollar, pound sterling, the Malaysian ringgit, the Russian rouble, the Australian dollar, the Thai baht and the Canadian dollar are also considered in the calculation, Zhou said.

heavy mettleZecharia Sitchen#1349158/13/05; 18:37:31

Hello Goldilox,

You wrote:

"Zecharia Sitchen suggests that early humans were the mining slaves for the Anunnaki gold accumulation, which helped fuel the Earthly demand as humans became more independent - interesting hypothesis."

I read that book as well and yes, very interesting. When you carry this thinking further out, if true, then the slaves were more than likely bread for their ability and willingness to work hard. Unfortunately American slave owners were not immune to this sort of behavior. Further if all slaves were of the same make, having that in common would more than likely unite them against their captors. So a little mixing and matching, you get different workers suited to different jobs thus divided and ruling themselves, eventually. I've often wondered where the diverse ethnic groups came from. It could have been from the mines after the easy gold was extracted or some evolution blah, blah. Could be the whites moved to the northern latitudes to escape the heat and sun and not the other way round.

Now stretching it a bit, have things really changed all that much in the above scenario? The slaves are still working for the Kings, Nobel's, Prime ministers, Presidents and Priests. Especially with the onslaught of fiat money, the hamster on the treadmill still works hard for the man. And once again the gold is being mined and placed into the hands of the same powers; the other side to those anonymous bank sales. Maybe a case of the same result but different methods employed.

Food for thought to chew on or spit out.

Have a good day.

TopazRHIC-Accelerator site.#1349168/13/05; 18:43:46

Now if RHIC could ramp up the velocity of FRN's, maybe they too could be morphed into something else ...of VALUE!
DemosthenesGold makes CNN#1349178/13/05; 19:06:04

I apologize if anybody has posted this already, I didn't see it. I saw it on the front page of the CNN site earlier.

Now I figure average Joe investor might want a piece of this gold thing... after all, CNN reports on it. Only downside I see is that the article does sort of play up the "volatility" of gold.

I sincerely hope though that nobody makes a rash decision on their finances based on what they see on CNN, like the "gotta get me some of 'dem tech stocks/real estate" attitude. Something like gold should only be bought after some careful research, which thanks to sites like this is easier. It would be a shame to have somebody turned off on gold if they didn't understand how buying gold works and they got duped by somebody unscrupulous.

MKDemosthenes#1349188/13/05; 19:40:13

I appreciate the point you make about not buying gold simply because CNN highlights it or herds the public in that direction because suddenly they see it as the next bubble. First and foremost, gold is a defensive position -- taken on because one realizes that the international monetary system could go awry. Gold is not a bubblephenoma. It should not be viewed in that context.

Moreover, when an individual purchases gold, it should not be viewed as a negative vote "against" the dollar and the United States. It is a positive vote "for" prudent management of one's assets. I have worked with literally hundreds, if not thousands of gold owners (one way or another) over my more than three decades in this business, and I cannot recall a single instance where the purchaser was rooting for a failure of the dollar. In almost every instance, the investor simply wanted to protect what he or she had worked so hard to attain.

Most real money approaches gold with a certain amount of humility. One doesn't buy gold because he or she believes absolutely that the system "will" fail. One buys gold simply because he or she believes it "might" fail. That is sufficient. There is nothing wrong with working in one's personal financial defense and none of us should let the press and the Wall Street crowd lead us to believe there's something wrong with it.

In the end, gold may be the most patriotic of investments simply because it very well could form the capital pool from which we would extract a recovery should the "awful event" occur. Certainly, that is exactly what the Japanese and Chinese government have in mind when they encourage their citizens to own gold. Let's not under-estimate the importance of this publicly proclaimed Asian gold policy.

As the summer doldrums fade and gold breaks the $440 mark, I have some new observations and analysis which I will share with you in time. Demosthenes, your post gave me an opportunity to indulge in one of the most important. I will have more to discuss over time. . . . .

Welcome to all the new posters. It's great to see you here.

Onward, my friends.

SmeagolAll that is Gold doesn't glitter?#1349198/13/05; 20:04:51

Ssir Goldilox, "Does paper (or bytes repesenting paper) work better as modern money due to the upside down nature of "debt" and "credit"?"

O yess... at least until until 'the system' takes a header... and sso far there have been no fiat winners in the long term. Sss... the problem is not really the paper or digits, but the nasstier aspect of Man's tendency to twist something that would be very useful to benefit one over the other.

"What banker would want to carry gold loans from individual customers when there is no reasonable way to use anything like "fractional reserve" to cover them?" Better to cover in FIAT that can be multiplied by progressive loan techniques. Something DEFINITELY stinks here!"

Ah, the true import and implication of loaning Gold becomes apparent when one musst give up the Metal itsself, eh? ha ha!

The evil fractional reserve practice exploits Man's greedy-lazy side to the utmosst - as long as "we gets ours" and gets out before the end (gain for nothing done), or before somebody spills the beans and the game sstops, then it's not our problem, it's someone else's, eh? Tempting, O sso very tempting! Such a perfect crime!

Unfortunately the Justice that is done to those who initiate fiat schemes pales into insignificance in comparison to the magnitude of desstruction that ultimately results from ssame!

We uses Fiat for the instant, short-term "debt-discharges", and "Gold-capacitors" to sstore "Wealth-charge". Jusst our (rapidly devaluing) .02 worth.


We read the link you possted... we are sskeptical, not of the possibility of monatomic Gold, but with the claims... and we wonders if anyone "outside" has ever quantitatively analyzed a sample of that "white powder of Gold" - with a mass spectrometer, for instance.

The possibility of Gold-atoms being "configured" to "neutral-atom" behavior (a 'noble gas' indeed!) sstatus is fasscinating.

We found a link to Hudson's British ORME patent at
...we wanted to see for ourselfs. But if he patented this in 1988-89, the patents are close to expiry. Maybe this will be what ssaves the bullion banks from disasster? (tongue firmly in cheek)



"One doesn't buy gold because he or she believes absolutely that the system "will" fail. One buys gold simply because he or she believes it "might" fail. That is sufficient." - MK

Now there's a quote worth keeping, thank you Ssir MK.

The Invisible Handthe objective store of wealth#1349208/13/05; 20:13:01

Here's what Harry Browne has to say about the subject (in his book "The Economic time Bomb – How You Can Profit From the Emerging Crises", New York: St. Martin's Press, 1989, p. 174):
Although gold's primary purpose is to provide protection during a period of inflation, it is also a SECURITY OF LAST RESORT (emphasis by The Invisible Hand) – the one asset that isn't owed to you, but represents value in your hand. gold is real money – portable, independent, divisible, durable, and recognizable. It survives when everything else fails.
Don't confuse real gold with any investment that's only indirectly related to gold – such as a share of a gold-mining stock. Gold stocks are "stocks". Like other stocks, their values are affected by factors – such as company management, strikes, government policies, political unrest, and the like – that have nothing to do with US of A inflation or the price of gold. Gold stocks can go down when gold itself is rising.,,2095-1733856,00.html
THE OIL BUBBLE WILL BURST and interest rates fall...
That does not mean oil prices are going to collapse. It does mean they are likely to return gradually to earth — which probably means a sustainable $40 a barrel — when geopolitical worries subside. That, in turn, will expose the fact that Britain's higher inflation is largely an oil phenomenon, enabling the MPC to reduce rates further. And what if oil prices were to hit $100 a barrel? The Bank would need to cut in those circumstances, too, to prevent an already slow-growing economy sliding into recession. Either way, despite the Bank's cautious message last week, this month's rate cut will not be the last.
Regulatory probes of General Re are an embarrassment for Warren Buffett, seen as the world's greatest investor and a celebrated critic of others' foibles. Grant Ringshaw asks if his reputation will suffer.

SmeagolCountdown to Spring 2006... or War?#1349218/13/05; 21:23:26


"Despite the complete absence of coverage from the five U.S. corporate media conglomerates, these foreign news stories suggest one of the Federal Reserve's nightmares may begin to unfold in the spring of 2006, when it appears that international buyers will have a choice of buying a barrel of oil for $60 dollars on the NYMEX and IPE - or purchase a barrel of oil for €45 - €50 euros via the Iranian Bourse. This assumes the euro maintains its current 20-25% appreciated value relative to the dollar – and assumes that some sort of US "intervention" is not launched against Iran. The upcoming bourse will introduce petrodollar versus petroeuro currency hedging, and fundamentally new dynamics to the biggest market in the world - global oil and gas trades. In essence, the U.S. will no longer be able to effortlessly expand credit via U.S. Treasury bills, and the dollar's demand/liquidity value will fall."


Dollar Bill.,.#1349228/13/05; 21:43:42

I just dont know if israel will attack in sept or in 6 months. The iraq constitution will certainly give the us a real break so that the ok can come for the attack on iran.
I expect that when the world economy tumbles badly enough, that we will find ourselves being welcomed into the ==new new deal==.
The new new deal, is the social security program for ....the world.
Not like the new deal, which was for the US only.
It no longer matters does it? I mean, if the economy takes a real hit. The big boys will save us with the new new deal.
As chirac said; the new communism.
Between now and then, I expect gold to not be a store of value, but a real investment ride up. Say it isnt a bubble, but I expect the one world order guys to eventually crush the price so they can buy back the gold from the regular citizens at cheap rates eventually because we all shall find ourselves as "associates" in the one world order new new deal socialism/communism. How else will saudi arabia get food in 25 years? 46 years? 67 years? 459 years?
Since, in my opinion, the owo is here, it fits in with the plans to have the regular joe take a beating and stop consuming so much oil.
All the financial factors that went into getting us past the obstacles, like defeating the EU, and the Russia block, have worked out to the point where I do believe that greenspan and whomever has been working towards this owo, now know that those factors are no longer the factors they care about, and now only owo factors are important, and regular joe american, can suffer the results of his indebtedness and it wont harm the owo.
I think the 454 billion dollar road bill is like one of the last big pig feasts the us govt is going to be able to host.
The days of deficiets will wind down as the other countries that have signed on to the owo will want the new new deal to start to kick in.
Which means, we will get speeches about "shareing" the money, and the pain. THe us still ends up being able to host the tag sales that contain the vast bulk of the worlds products made in the last number of years, but, we also have made a dang ugly bet on globalization that will find suburban guys wondering what they were thinking.
As we have built ourselves way out on a limb, as the owo tree becomes the new structure, vast personal financial bets placed by regular americans, will come to an ugly end.
I really think this could happen quickly.
Al greenspan said something recently about the houseing bubble that I cant quote, but it was something like, oh well, things are about to change in a big way.
A freind asked me what he should do with 50000 dollars, I said but gold.
Iran wants the war. They know better than me that israel has promised to bomb them. They are religious guys! One nation that is bound church and state, israel, and one nation that is bound church and state iran. Or course! they want to fight to the death. That is the inevitable result of religious men with power. Oil will skyrocket, venezuala may hold off oil production as a support for iran protest move, the us will use its national reserve for the winter, if isreal attacks in sept, or for driving in 6 months when israel attacks. Whatever, I suspect that will lead to financial collapse enough to give us the new new deal.
Sensible discussions about gold ownership as part of a mixed bag of investments, I think, should be thrown out the window because we are on the verge of the owo.
They say what doesnt kill you makes you stronger. I have not bothered to analyze that but taking that, I say that a collapse will not kill the owo, but will make it stronger. However, the regular people will feel like thier lifestyles have been killed, or more accurately, changed not to thier liking.
And they will be right. Anyway, I dont know how this sounds, I dont mean to seem like the all seeing eye, but this is how I see it. I think I/we should marvel at the present moment. It is about to change in a fundamental way I think.

Dollar Bill.,.#1349238/13/05; 21:58:04

Smeagol, I think that isreal will manage to find a way to drop a electromagnetic pulse bomb in the new oil bourse complex. If not, the owo will manage the price of the euro to whatever level will make the dollar or owo control still complete. Hence the german french effort to get iran to give up its bomb making efforts. Iran has to be taken out, and it is playing its card perfectly to invite being taken out. Not that "taken out" means things will be tidy.
It is a big dang religious mess that is one more evidence that nations around the world have to wake up to find the proper seperation of church and state. The US definately is not the model of what that should look like.
And it is moving more in the direction of closer church and state. What a mess. But, I suppose we are not here on earth to stand around repeating the obvious. We are meant to be a big drama show, and we certainly are.
One gold qoute can be; Big drama looming? Buy gold.
Transitioning from one financial global struture to another? Buy gold. Nothing looks like it is founded on solid basis? Buy gold. Lots of lying happening? Buy gold.

GoldiloxCountdown#1349248/13/05; 22:11:02

Sir Smeagol,

In the smug transferance of manufacturing and programming technology, the "controllers" believed that their experience and network infrastructure left them the upper hand in "service industries".

How short sighted to not understand that service industries are the easiest to transfer, as their only requried resource is human ingenuity.

The Iranian oil bourse challenges the US oil magnets' role as energy middleman for the entire world, and their NYC offices are threatened to become as obsolete as the electronics and computer workers whose jobs moved to India and China.

If backed into the corner, their all too predictable response will be similar to their "final solution" in Iraq, whose CIA propped up ruler chose to bite off more than he could chew politically. Interruption of the Iranian supply at levels similar to Iraq will easily deliver T. Boone Picken's and Matt Simmons' predicted $100+/bbl oil prices.

Maybe with the Asian peninsular nations crippled by the Tsunami Christmas present, the oil admin feels they have the perfect opportunity to wreak havoc on Iran at a point when it's Islamic Dinar partners are crippled by recovery. It will certainly not ease oil prices anytime in the foreseeable future.

PRITCHO@Dollar Bill - - - - Re your last Post #1349258/13/05; 22:11:51

Bill I seriously advise you to take your medication on a regular basis. Also if you have a friend he would no doubt like to see it not spelt freind.*(Remember i before e except after c)

We have all heard this same rant before -including your ill contained excitement re an Israeli attack on Iran and your comment that Iran wants war. Boring boring dribble.

Dollar Bill.,.#1349268/13/05; 22:18:05

Smeagol, your link didnt even mention isreal.
I cannot figure out why.

Dollar Bill.,.#1349278/13/05; 22:21:23

Pritcho, you see my name at the top of the posts, feel invited to not read them.
GoldiloxReligious Mess#1349288/13/05; 22:37:25

@ $Bill,

I do not disagree totally with your political scenario, but I think "religion" gets a bigger role than it deserves from the media, just a it did in Ireland. People who believe thay are completely repressed will "fight to the death" no matter what their religious persuasion, even those who have none.

From Thermopylae to the current instabilities in Iraq and Palestine, every war in history has featured suicide martyrs of some sort.

In WWII, the Kamikaze pilots got the PR advantage, but the Marines sent a lot of suicide missions into service as well.

GoldiloxIsraeli involvement on Iranian issues#1349298/13/05; 22:51:12

@ $ Bill,

With some of NeoCon's higher level advisors holding dual US-Israeli citzenship and allegiances, I'm not sure if it's even dsitinguishable whether any particular action is US or Isreali organized. The most that might be determined is which insignia the troops and airships wear into battle.

I've read a lot of hypotheses about Israeli "control" of Congress and NY business, and vice-versa. I wonder if this really matters or is just one more smoke screen?

I do believe there is a real risk of invasion or aerial bombardment of Iran, and if executed, we wll watch oil prices go orbital - perhaps just the agenda that oil controllers want to accomplish to continue their hyperbolic profit growth.

PRITCHOIt's NOT about Nuclear Ambitions - - It's the threat to the US$! (What else)#1349308/13/05; 23:08:38

From the ever insightful Privateer - - LatestIssue(today)

What Price The US Dollar?:

Beginning on March 20, 2006, the Tehran government in Iran plans to begin competing with both the New York NYMEX and London's IPE with respect to international oil trades, using a Euro-based international oil trading mechanism. Acting in parallel and in advance, from Ridayh, Saudi Arabia, camethis from UPI: Saudi Arabia has said it is working to bring back to the Kingdom a total of $US 360 Billion invested abroad in the last 18 months.This started the long end of the US yield curve climbing. It is deadly dangerous to the US Dollar's standing because it is currency displacement.

Currency Displacement:

Currency displacement is an issue which The Privateer has dealt with in its usual style - in advance of approaching but foreseeable events. It has been an item in several past issues.

If, in March 2006, Iran does start its Euro-priced oil exchange - buyers of Iranian oil will, of course, have to offer Euros for the oil. That will be no problem for the Euro currency nations in the EU. It will also add an incentive for those EU nations still outside the Euro to join. But, there is another aspect to this.Europe will then not have to offer either the Euro or any other European national currency for the US Dollar before it can buy oil. This is where the US Dollar dollar becomes
"displaced". It will be displaced from part of the global markets in oil. The US Dollar will also lose a previously assured demand from all those in Europe who had to buy US Dollars before they could buy oil. If nobody in a market wants a currency for purposes of trade - it is displaced. Since the near same quantity of US Dollars are all still in
circulation worldwide,a lesser global demand for them will cause the US Dollar to fall in exchange value.

The problem goes further.Non-US global sellers of oil will have a free choice to offer the oil for sale in the Tehran Oil Exchange.Of course,the oil they offer there will never even have to go to Iran. It will simply be on board a tanker anywhere in the world. But once the contracts are signed,when the oil actually does arrive at its destination the seller of the oil will be paid in Euros.

It goes further still. Once Central Banks around the world become aware of what is going on (they are already aware of what is planned), they will start worrying about the value of their reserves. If these reserves are held mainly in US Dollars and in US Treasury debt, they will start doing lateral shifts of their reserve holdings. They will begin to hold more Euros and EU paper assets than before. That will again displace the US Dollar. When these Central Banks are not to be seen at the next US Treasury refunding,
not only does the US Treasury have a problem placing its debt paper, but so does the Greenspan Federal Reserve! Alan Greenspan's problem then is that he will have to offer the rest of the world a better deal. The only way he can do that is to offer an even higher US rate of interest. But, as earlier explained, even higher US rates of interest are poison, not only to American households, but also to the US Treasury. US consumer debt is rising at a 9.3% annualised pace. US Treasury debt is almost $US 8 TRILLION with budget deficits as far ahead as the eye can see. That combination is deadly dangerous, not only to the US Dollar, but to the US economy and especially to the US claim to being the world's only superpower.

Finally, once this exchange is up and running in a non-US currency and trading in a central global commodity, it is a certainty that many small boutique trading houses will set up shop or have direct links with the Iran Exchange. They will then start trading up a storm, not in oil perhaps but in everything else. All of this trading will not be done in US Dollars,it will be done in Euros.At that point,the US Dollar faces an even greater displacement.It is a short step to the point where in Iran and in many other places, there will be market makers dealing in all the world's major commodities who will be willing to set prices for such commodities in Euros. That will displace the US Dollar further still. The end result of historic
currency displacements has always been the point at which the foreign holders of such currencies make the choice to storm back to the nation which issued the currency to buy whatever they can of real value there, almost regardless of price. That swings the current externally circulating US Dollars back inside the US, adding to the US Dollars. That is a DIRECT INFLATION of money.

PRITCHOFrom Gold this Week - -At the Privateer #1349318/13/05; 23:48:16

SNIP - -
Complacency is based on a SELF ENFORCED ignorance - not a genuine lack of knowledge but a refusal to know. As such it is a brittle state of mind, and in 2005, it has been steadily splintering. That process is now speeding up, fast.

What was, in the US and elsewhere, a quite understandable and rational fear of real foreign enemies in the immediate aftermath of 9/11 is now, not quite four years later, a growing fear in the minds of many of those same people of their own governments. There is nobody left whose mind is capable of reason who is not aware of the fact that the entire rationale for the US invasion and occupation of Iraq was fabricated. There are few people left who are not aware of the design to deceive them.

The last refuge of complacency was the housing bubble. It has now been firmly burst in Australia. In the UK, the most certain indicator that it is about to burst was the decision by the Bank of England to lower official rates last week. And in the US, it is clearly on its last legs as the number of houses for sale (but not selling) is growing fast. On top of that, there has been a sudden and steep dive in US consumer confidence.

Complacency is hard to maintain when one winces every time one pulls into a gas station. It is even harder to maintain when one contemplates a situation where the amount owed on a house is now more than the house is "worth".

On a political level, complacency is being rocked to its core in the US by the single act of the mother of one of the almost 1900 Americans who have now been killed in Iraq. Cindy Sheehan is camping outside President Bush's Crawford Ranch. She wants an answer to the simple question of what exactly is it that her son died for in Iraq. She wants Mr Bush to answer her, face to face. He refuses to do so.

Mrs Sheehan's vigil has attracted worldwide attention. She is being praised by many and villified by many others. What she has forced into the awareness of those who have refused to see by their own choice is a simple and inescapable truth. There is only one answer to her question. Her son died to defend and protect a corrupt political and economic system which is rapidly turning into a tyranny. We don't know whether her son knew this. There is no doubt that Cindy Sheehan knows it.

As this knowledge widens, or to be more precise, as more and more people get off the increasingly painful fence they have been sitting on and finally face what is REALLY happening, the situation will become more and more volatile. This is certain to be the case in the policital realm. It is even more certain to be the case in the economic and financial realm.

If you want a connection between political and economic events, consider the vigil of Mrs Sheehan and the "sudden" gyrations of both commodity and currency markets this week. The vigil in Crawford has placed a political time bomb under the Bush Administration. Her particular action may not set it off, but it has shortened the period before it does go off. The issue she has raised cuts to the heart of the entire situation. It is as difficult to ignore as it is to answer. If the question is not answered by the White House, and there is no chance of an honest answer from that quarter, then it will remain open for each individual to answer for him or herself.

Those who answer it will find that it leads to a host of other questions, each of which will follow the same theme: "What has our government done to our country?" Neither markets, nor finance, nor government policies, nor even politics as usual can stand up to that one. They couldn't in the late stages of and after the fiasco that was Vietnam. They won't this time either.

It is conceivable, though VERY highly unlikely, that the action of Mrs Sheehan (and the inaction of Mr Bush) might galvanise enough outrage amongst her fellow Americans to force the Bush Administration to "blink" at their now obvious plans to invade Iran (and/or Syria) in order to perpetuate their power and re-inforce the now tattered external distraction that is Iraq. But if the Bush Administration does now compound their incalculable folly by taking such an action, it is far more likely that Americans will see it for what it is. It is also far more likely that having done so, they will not be so eager to impose another episode of self-enforced delusion.

In the financial realm, there is no way back from the havoc which has already been wrought by an insanely profligate government and by the brittle complacency of too much self-enforced delusion by too many Americans. This week, the facade slipped and Gold bolted $US 9.00 higher in one day. Gold is now just over $US 10.00 below its bull market highs set way back in December 2004. It will be kept below that $US 456 high as long as the mechanations of the financial system and the political imperatives of the political system can keep it there. We do not think that will be for too much longer.

Modern politics and economics is a cesspool which cannot be drained by a Gold "price", no matter how high that "price" might get as expressed in modern paper currency. The task can only be accomplished when the words of James Madison (see the mid August Privateer - #533 - published on August 14) are heeded and understood: "If tyranny and oppression ever come to this land, it will be in the guise of fighting a foreign enemy."

How's THAT for being far sighted?

GoldiloxOil Bourse risks#1349328/14/05; 00:05:45

Just a thought, but the euro-basd oil bourse probably changes little for the euro memeber nations, as they were printing euros anyway to buy $ for the middle-man transaction.

There is an opportunity, however, for much more drastic ramifications from Japan and China, who both import a lot of oil, and would no longer "require" the same volume of US dollars. THe CNOOC- UnoCal fissile may stress the importance of this revelation. If US$ are not necessary to China for direct oil purchases, and are chased from the MA market in deals like the CNOOC-UnoCal offer, what good are they to the Chinese? They would have to buy a lot of Boeing planes to even dent that mountain of money.

Or perhaps a LOT of gold?

GoldendomeDollar Bill, Re- your message #134922#1349338/14/05; 00:07:51

Sir Dlr. Bill: We certainly hope and would think, that no one would be so Stupid or Crazy as to attack Iran at this point. We (the U.S.) and Israel seem to have our hands full right now with other current war matters.

If attacked, could we expect Iran to embargo the one commodity their attackers and the corresponding economies need most: oil? It would seem a reasonable result and would preclude any nation from being an idle disinterested spectator! How high oil prices would reach is anyone's guess, but for sure; a resulting scenario could be devastating for the world economies, particularly if protracted.

Is anyone in government in the U.S.--administration, congress, or otherwise, talking publicly about attacking Iran? I don't think so. I haven't heard them. They are turning this over to the United Nations and the Europeans to attempt to sort out differences at this point if possible; and I doubt that the Israeli's are going to be--or have been given the approval--to be a lose cannon firing the first shot. Short of using the nuclear option themselves, I doubt the Israelis would have the carrying power that it would take to sustain a prolonged attack against Iran, with potential war also lurking at their own borders. The U.S.? Again, short of an ironic first nuclear strike to prevent, at this point, what is a make believe potential nuclear threat, could we carry this forward in light of our last caper into Iraq on false pretenses? with a steadily skeptical and unsupportive public? and if gasoline prices should sky-rocket? A further point: the attack on Iraq was not a sneak attack; it was well advertised. The Israeli's might be capable of a sneak attack, but I doubt the U.S....and were one to occur and it be discovered that the U.S. knew in advance about it's happening--watch out. A political front would quickly develop at home and abroad.

We believe that the U.S. economy is way over extended and headed for increasing difficulty in the future. However, I strongly disagree [if I interpret you somewhat correctly]--with this clandestine, planned out scheme of one world order, that everyone in the U.S. and round the world is going to acquiesce to. Among other things, there is a fierceness of independent spirit throughout the world that has never allowed for that type of melding.

Best, G-dome

GoldiloxCorrections#1349348/14/05; 00:10:18

Sorry, I left my good glasses in the garage, and didn't see that my spell-checker commenced mid-message.

euro-basd = euro-based
memebers = members
fissile = fizzle

CaradocQuestion for those assembled at this table#1349358/14/05; 00:27:51

With gold moving toward its proper pricing in terms of paper dollars, with much talk of bubbles in real estate and other markets, I've got to pose the question: For each of you, what price of gold in US dollars between now and May of 2006 would constitute a "bubble" in gold?

All I'm asking for is your number. Mine is $1,642.

Those willing to include their personal definition of "bubble" and what, if anything, they would do about it will make for informative reading. For what it's worth, my cut is that anything over $1,000 before June 2006 is becoming irrational but for me "bubble" means high enough that I'm obliged to do something about it. At this point, I can't say what that something would be but if the real estate bubble has burst before or concurrent with a gold bubble, some acreage with good water supply and located next to federal property (preferably a national park rather than BLM land) would be a real contender as a store of value for a large fraction of my stash.

There are more than a dozen of you whose responses will get 100% of my attention even if you have time only to post your number.


Smeagol"Batteries (Israel) not required for this war"#1349368/14/05; 00:31:53

Ssir Dollar Bill,

(msg#: 134926)

"Smeagol, your link didnt even mention isreal. I cannot figure out why."

Perhaps, precious, Israel is not involved in the US/Iran problem. Israel does what they will do, in their interesst; the US-country does what it will do, ditto... and sseparately. Ssss... corporate power-people don't care about nations and peoples... they only care about controlling resources and continuing their exisstences.

Based on what we SEES, Israel is not a superpower bent on World-domination and Oil-sale-monopoly. Nor do they have troops and bases everywhere, nor is their currency and spending-irressponsibility a matter of world concern.

And if we reads things aright, no earthly power is a match for the One who watches over Israel anyways...

Thankss for the possts, from you and Ssir Pritcho too. My, but we do live in interessting times, yess? Sso much to analyze, filter, ponder! Jusst the facts, please! We watches!


GoldendomeThe Privateer's message on dollar displacement.#1349378/14/05; 00:52:40

Sir Pritcho: your #134930. The message is clear and straigtforward. Thanks for the post. Well worth the read.
SmeagolBubble-SWAG#1349388/14/05; 01:04:18

Ssir Caradoc assks..."What price of gold in US dollars between now and May of 2006 would constitute a "bubble" in gold?"

Nice poser, precious... (exactly when do prices become 'bubble-icious'?)

Fore-cassting is not our forte (and the houndses have been guarding Ssir Gandalf's crysstal ball very well lately)...sss... but we would opine that extending the trend-lines on the Gold-chartses to May 2006, and then tripling that, would result in a bubble-price of... ssay, around US$1200-1500 between now and then... definitely a bubble area (we also thinks houses are currently sselling for about three times what they are reasonably 'worth' as a shelter). Of course, what may be a 'bubble' in dollars may only be a wrinkle in another currency... and if ssome major world financial 'event' happens before then we would add a few hundred more to that.


ToolieSlingshot#1349398/14/05; 01:57:26

Didn't you promise Another golden tale next rally?
Black BladeWorld Oil Transit Chokepoints#1349408/14/05; 02:03:54


Oil transported by sea generally follows a fixed set of maritime routes. Along the way, tankers encounter several geographic "chokepoints," or narrow channels, such as the Strait of Hormuz leading out of the Persian Gulf and the Strait of Malacca linking the Indian Ocean (and oil coming from the Middle East) with the Pacific Ocean (and major consuming markets in Asia). Other important maritime "chokepoints" include the Bab el-Mandab passage from the Arabian Sea to the Red Sea; the Panama Canal and the Panama Pipeline connecting the Pacific and Atlantic Oceans; the Suez Canal and the Sumed Pipeline connecting the Red Sea and Mediterranean Sea; and the Turkish Straits/Bosporus linking the Black Sea (and oil coming from the Caspian Sea region) to the Mediterranean Sea."Chokepoints" are critically important to world oil trade because so much oil passes through them, yet they are narrow and theoretically could be blocked -- at least temporarily. In addition, "chokepoints" are susceptible to pirate attacks and shipping accidents in their narrow channels.

Black Blade: Speaking of "oil risks". It would not take much to send global economies spiraling into oblivion should terrorists target a large vessel in one of these "chokepoints". Again, it is imperative to have a portion of your investment portfolio insured with precious metals against the unexpected (or even the expected for that matter).

CaradocRules for the Non-contest#1349418/14/05; 02:04:51

Thank you, Sir Smeagol!

This is no contest and there are no prizes offered, but -- as our Wizard has often pointed out -- we must have rules. So, consistent with our host's easygoing attitude toward weekend posting, this is a one-day event ending at midnight tonight. Post your entry of what POG constitutes a bubble in standard contest format: ***XXX*** or ***XXXX***. Let's keep it to whole dollars and not sweat the pennies.

To cope with the issue Smeagol pointed out (the possibility of "ssome major world financial 'event'" happening between now and June of 2006) your definition of a POG bubble is in terms of constant August 2005 dollars.

Sir Smeagol, I'll take your range of 1,300 to 1,500 as telling me that 1,500 is definitely a bubble. So, listed in order of decreasing bubble tolerance...

Caradoc 1,642
Smeagol 1,500

Again, added input such as your personal definition of what defines a gold bubble and what if anything you would do about it is more than welcome, but a simple post of ***whatever number*** gets you included in this non-contest.


PS: An ideal opportunity for readers who haven't requested a password to do so. Ditto, a grand time for a reappearance by those who have been too long absent from our company.

geInsider selling at major home-building companies#1349428/14/05; 02:17:13

Dollar Bill.,.#1349438/14/05; 07:06:16

Pritcho, All is well, I do remind you that flashes of hot moments that lead to sentences like -your on meds, or -IF you have a freind-, arent really gold table norms.
Despite that, I trust Madison would have added to his idea about tyranny to include thought police and thought tyranny that comes from factions from left to right in attempts to control the populations voting.

Goldendome, there have been links here at the forum to sites that have credible reports going back more than a year of israel comments about how it will not accept an Iran with nukes. The same reports mention how the US sent/sold israel over 300 missles that are bunker busters.
I guess I just assumed forum folks also went to those links and perhaps some did.
I think I would define -bubble- as, something that is out of natural bounds. I would call gold right now as being in a bubble. In a controlled out of natural bounds state. A controlled bubble. Other ideas of bubbles would be that it is a sign of overinvestment. I dont think gold is a bubble or could be a bubble for that reason, I just did work on the Newhouse home in NJ, they are supposed to be worth 7 billion. I bet they would build the solarium out of solid gold if you could buy gold in really large amounts. The rich folks must trust the level of control by the CB's to garuntee that they wont wish they had eventually.
Ok, the question is, gold bubble price in the next year and a half or so.....If/when Iran is attacked, wont they react in anger at the euro as well as the dollar? They might try to buy gold. I think the big boys have decided that Iran is playing out a nightmare owo scenario, and they will just not accept it Iran trying to build a Muslim reserve currency in some union with the euro. Didnt Iran miss its chance when saddam was trying to do that? Didnt thier previous war with saddam cause them to lose the focus on the big picture enough to see that thier hope of control was if they sided with saddam and the euro before the US broke that union?
I think Iran is too late, and the French vote finished off the EU hopes, and now the mullahs want to do it, but I think the US has promised that the UN will have reserve powers and police powers, if they reform, and France and Germany at this point are more on board that plan rather than a Iran supported order where china, russia and the euro countries support Iran in the hopes that they will be able to control the owo spending more.
I think the US has played chess, and had luck, or grace, and despite the ugly sides, is about to, or actually just recently did, construct the owo. If china sides with Iran, I think it will only be within owo boundries. Meaning, they do have some leeway to act in thier own self interest while not going against owo member limits.
Surely China is not looking to Iran to be a source of purchases of Chinese goods, or a source of food when times get hard. Really, what does Iran have to offer beside an oil card that they recently misplayed? Thier chance came and went. And George Bush played the hand.
I dont care about any complaints about Bush, I am only interested in economics. He is the face of a faction, and that faction is the owo faction I do believe, and I am just trying to watch the show.

968@ Caradoc#1349448/14/05; 07:09:33

In your opinion, if the POG goes skyhigh, will it still be priced in dollars ?
PRITCHO@ Buffalo Bill :) #1349458/14/05; 08:09:24

Your Last Post -- SNIPs:
**"I dont care about any complaints about Bush, I am only interested in economics. He is the face of a faction, and that faction is the owo faction I do believe, and I am just trying to watch the show."

I think the US has played chess, and had luck, or grace, and despite the ugly sides, is about to, or actually just recently did, construct the owo.

What? And have us believe you don't have an opinion? Like you can sit on a fence over this? Bull poo! It's obvious where you're coming from --I just can't believe that you really think it's all OK just because you're an American.
But unforgivingly you believe the US has won?

What trick of your mind leads you to that conclusion?

jenika********$1000.00 Australian dollars*****#1349468/14/05; 08:31:23

My definition of a bubble would be anything that costs more then my perceived value. ie If I looked at a house with a price tag of $500,000 and could only see $250,000 value I would say its overpriced. Its something we do everyday when we shop, if Tbone steaks are $15 each and we feel they are worth $10 they are overpriced. Its our perceived value which is made up via our income.

Just as with gold, a poor person would find gold at $450 overpriced whereas Bill Gates would probably still find gold cheap at $2000.

So with my current circumstances my perceived value on an oz of gold is $1000 and a total bargain at current prices.

GoldiloxIran buying gold#1349478/14/05; 10:06:47

$ Bill, et al,

The problem with Iran buying gold is one of logistics.

In order to buy gold at levels to satisfy a country's demand, a reasonably secure and silent source would be necessary. At these levels it's akin to buying arms.

Second, gold requires storage. If Iran is fearful of attack, where do they store their gold? Do they really "trust" someone else to hold it for them, a la Fort Knox?

We're already heard stories that Euro gold held in the US is "captive" and not available for sale.

There's also the "problem" of the Islamic Gold Dinar. If Western officaldumb is concerned about the proliferation of "viable" coin of a realm, they are not gonna stand by for this plan. With the loudest proponents of the IGD already digging out from tons of Tsunami mud, Iran would need complete cooperation from Saudi Arabia to pull it off, This is not likely while the House of BushSaud is pulling the strings there.

Dollar Bill.,.#1349488/14/05; 10:24:43

Pritcho, I live with a few people. Family, but independent people. If some like the red sox, and some like the yankees, and that is the case here, I might, and actually I do proclaim myself not careing because the battles are repetative and fun for some, but the thrill is gone for me, if it was ever there on that subject, and so I play Swiss on it.
The bush/iraq/global warming/whatever, are by now off my list of things that I can spare a sentence about.
Goldilox, Iran and Saudi Arabia really do have a divide between them. That Sunni Shiite division is quite deep. The Wahabi religion of the Saudis is rather blunt in its insults of Iranian thinking that Ali was to follow Mohammed as leader. As soon as Mohammed died, the split happened. So much for Al kida dreams of recreating some mythical origional "pristine unity". It was never there.
Saudis have signed on to the owo. They would never want the iranians to have global shared reserve power. The Iranians are critical of Saudi control of Mecca. They just have real issues between them. Lucky for the world.
I dont know if the owo is best for the world. But is sure looks like it going to have its day to show its stuff.

SmeagolBubble-SWAG addendum#1349498/14/05; 10:32:21

Ssir Caradoc "Again, added input... a gold bubble and what if anything you would do about it..."

Sss...if It bubbled up to that point, we would grin and cackle at the paper-shorts twissting in the wind, sell a few PHYSICAL ounces of It to pay down our ssmall (but exassperating nevertheless) remaining debt... sell a few more for cash to hold 'til we hears a >POP!< and wait for the price to come back down (if it IS a bubble the price has to come down leasstways 20-50% from the high, eh, precious?)... looking for any overshoot... and then buy It back to resstore our (tiny) sstash.

(whispering) rissky, rissky, Ssir Caradoc! Don't let Gandalf ssweet-con you into running for Masster-of-POG-Contessts! He almosst had us talked into playing the Horns! (cackle) ~8-)


24karat@ Caradoc Au bubble non-contest#1349508/14/05; 10:32:43

I've been thinking about this more than I should have.
To answer, I had to figure out what a bubble is. I don't think a bubble is simply being the same as overvalued. If gold was a penny above its long-term mean, it would be overvalued but, in my view, not in a bubble. A bubble could be a rapid run-up in prices, well above the mean, driven by widespread demand. This definition is also too messy.

Instead I decided that a bubble is the point at which I'll start dumping my metal. Now I can answer your question ...but wait! Now I have to figure out the possibility of some major event disrupting the financial markets. After all, I will be less willing to give up any gold if the US joins Isreal in an attack on Iran. Thank goodness I don't have to figure out where the dollar will be then.

Oh heck with it. Put me down for $1800/oz.

If the actual price on 6/06 is $700, do those of us who guessed higher all win? At $700 the bubble may only be beginning to inflate. This would mean that a price above that level would contstitute a bubble and we would all be right.

Thank you for the question. My brain is usually inactive on Sunday.

SmeagolAutumn Melt-down?#1349518/14/05; 11:08:08

From an article at yonder Casstle...
The meat:

"The Fed seems to do one of these pump-and-dump operations about every four years. The last was the 2003 51/2% FED Funds drop to 45 year lows of 1%. Previously was the 1999 Y2K credit expansion, which inflated the early 2000 Nasdaq bubble and led to the subsequent crash. The major one before that was the 1992-93 credit expansion, which culminated in the 1994 global bond market debacle. The process of leveraging up the system sends out a signal -- go forth and speculate. Buy stocks, bonds and houses, build buildings, leverage up your holdings. Take no thought for tomorrow. We are in a NEW PARADIGM. Swing for the fences. At some point, the leveraged Ponzi scheme collapses -- either as a result of a Fed tightening -- or it simply topples from its own dead weight of poor ill advised investments (malinvestments). Investment Balloons like trees can't grow to the sky.

Both the Bond and stock Markets, the Real Estate and Commodity markets as well as the Economy are approaching that point. Even though long term interest have fallen and have only recently started to turn around since the FED started tightening over a year ago, it will indubitably be too much Fed tightening that once again upsets the apple cart. There used to be a rule "three steps up and a stumble" well we just had our 10th rate increase and there is increasing evidence of the beginning of involuntary de-leveraging. (The reason that its taking more than three steps before the stumble is because up until this week we were in negative interest rate territory)"

And a gem:

"Remember Money created out of thin air is not Real Capital. When a loan made out of thin air money is repaid it does not go back to the original saver, it just disappears ( gets wiped off the books) and the money supply shrinks."


Caradoc@968#1349528/14/05; 11:18:09

If gold goes skyhigh, will it still be "priced" in dollars?

No. And a discount from the price of paper futures contracts will no longer point backwards toward the present spot price. COMEX will have lost that role by lowballing the bid on futures contracts (perhaps to or near zero) while renegging on delivery of physical and offering settlement as cash only.

Between now and then, there will be a period of a few days when Au is still priced in dollars but at numbers that would sound absurd here in August of 2005. My version of the gold bubble starts at $1,642 and goes too high to talk about.

The idea of establishing a proper pricing mechanism for gold assumes that something non-gold will be used to price gold rather than the other way around. I suppose using a basket of currencies like SDR (Special Drawing Rights) would be the most transparent approach, but I'd rather see it the other way around.

I'm off to the mountains to water some baby trees. Will enjoy catching up here later this evening.


Belgian$-POG bubble...#1349538/14/05; 12:15:12

The price of gold NEVER was in a bubble...and will NEVER be in a price bubble !

This one and only real universal/transferable "- WEALTH RESERVE -" has always been and will remain * underpriced *.
Real "WEALTH" is a priori non speculative under whatever pricing-regime it has to live ! Wealth is lost to the owner, when this owner loses on his non-wealth speculations/gambles.

Goldmetal in possesion is NOT an insurance for/against whatever. Otherwise, goldmetal in possession would be taxed.

SmeagolOkay...#1349548/14/05; 12:24:34

...then isstead of a Gold Bubble, we will jusst call it a Dollar Crater. Sell Gold at the crater floor, buy It on the rim and enjoy the view! ~;-)


SmeagolSsss...#1349558/14/05; 12:26:48

... ach! that's "insstead", precious.


White RoseThree revolutions: Ferdi Lip's speech at GATA's Yukon conference#1349568/14/05; 12:29:49


Eighth conclusion: Gold and Silver prices will be much, much higher.

Oil prices too. There is not enough gold. Who wants to produce gold and silver as long as prices are held artificially low? This whole manipulation of the gold market has to end. It will end like the London Gold Pool in 1968. Just collapse. The gold pool was created in 1960 by the central banks to keep the price of gold at $35. It could not last. Gold was stronger than the central banks. And gold will also be stronger than the hedge fund boys who are criminally borrowing and shorting stocks of small gold-rich exploration companies just to bring them to their knees.

Only this time the explosion of prices will be more spectacular. The prices will go to the moon. And the manipulators will be hit by a real boomerang. Also, the central banks will start buying in 2006. Nobody will be able to stop that future gold rush. Gold will take its revenge.


968@ Caradoc #1349578/14/05; 12:35:18

"The idea of establishing a proper pricing mechanism for gold assumes that something non-gold will be used to price gold rather than the other way around."

So Caradoc, according to you, if the POG goes skyhigh, there will be no world reserve currency anymore ?

What if there would be a currency that strenghtens under a rising POG ?

BelgianAnd after all these years...#1349588/14/05; 14:46:50

...Dearest Ferdi still doesn't understand a iota about ...where Gold is going !

Why did the South African goldmines strike stopped, dearest Ferdi !!!??? And wich CBs exactly are you talking about ?
The one who keeps gold at a fixed price...or the one who is marking its goldreserves at market...or the CBs that are accumulating gold...? Oh dear.

Who or what exactly is going to break that particular goldprice manipulation you mention !?

Shouting "Gold to da moon" in such an empty (unstructured) context, smells very unprofessional to me, humble listener.

CoBra(too)Ferdi Lips Remarks ...#1349598/14/05; 16:05:53

I'm in a bit of a loss at Belgians rather ridiculing words towards Ferdi Lips' comments at GATA's recent Goldrush conference in the Yukon.

I may, though, be the only unsophisticated gold advocat not understanding Belgian's meaning - I should probably say hidden meaning - as I seem to have had difficulties in the past to come to grips with some concepts as "free gold".

OK, I know the geological term of free gold and think I also came around to grasp the context of the buzz word as used by a few purists. God, wouldn't it be nice to have such a clear cut understanding of how the world should function. Black and white and no shades either!

Well, maybe B. will be gracious enough to fill me in on his reasoning, why he feels the above remarks are empty ( unstructured)and unprofessional. I'd also be happy to learn of sophisticated proposals to break POG manipulation ... since it apparently seems, I also don't understand a Iota about - where gold is going.

In my humble mind, Ferdi Lips is understanding the "why" far more than the "when"! ... and his conclusions suggest a lifetime of experience in the (gold-)markets.


The Invisible HandThe Gospel according to Mr. L.#1349608/14/05; 16:57:51

Ferdi L. wants to achieve a higher POG not by The Revolution, but by three small revolutions, the GATA revolution, the education revolution and the mining revolution.

As to the first revolution, Mr L. alleges that GATA courageously fights for free markets, better markets, honesty, and a better world. GATA therefore deserves our full support.
How can that be given GATA's very name, the gold ANTI-TRUST action committee?
As Alan Greenspan wrote in Ayn Rand's "Capitalism: the Unknown Ideal"
"The world of antitrust is reminiscent of Alice's Wonderland: everything seemingly is, yet apparently isn't, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet "too much" competition is condemned as "cutthroat." It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as "enlightened" when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge's verdict -- after the fact."

As to the second revolution, Mr. L. wants to create a worldwide monetary institute for which you do not need a building. The free market will overwhelm the manipulators. The free market will decide the right price for gold. This can be achieved, he says, like the victory of Christendom over the Roman Empire.
Christians like goldbugs have an intuition which they say is true. I am not a religious person, so I may be wrong but it seems to me that the intuition of goldbugs can be supported by fact, whereas, as far as I know (please enlighten this Pagan writer), this is not possible for religious intuitions.

The third revolution displays the honesty of GATA and Mr. L.
" I am going to speak to you as a representative of the gold-mining industry. …
We need a healthy mining industry. It is good for the world economy"
end of quote
If there's anybody in this room who thinks a representative of the gold-mining industry would say that the gold-mining industry is bad for the world economy, raise your hand. All invisible, yes?
Sorry, if you want to say that gold mining is good, you should at least try to hide that you're a gold miner yourself. Or do you believe in monkeys cutting the branch on which they are sitting?

Golden LionheartArchaic Measurements#1349618/14/05; 17:48:49

This is the 21st Century, so I've been told, yet we are still using the archaic quantity of the ounce as a unit in which to price gold.
IMHO it is time to change the pricing into the internationally used unit of the gram.
Here in Australia we changed to the metric system about 40 years ago. It was quite painless as far as I can remember.
Gold priced in Euros per gram or kilogram would help free this wonderful commodity from its link with the US$ and enhance its position throughout the world.

PRITCHO@Golden Lionheart - - - Buy in Metric - I agree !#1349628/14/05; 19:01:53

Thats why I buy my Gold by the kilo! :)
Clink!Hobby horses#1349638/14/05; 19:50:52

Gold by the kilo. Ah, yes ! We can all dream. Some of us can even do (lucky dogs !).

I must admit to having been profoundly shocked when I arrived in the US to see the total anarchy in terms of measure. The first weekend, we bought an exercise weight (aka the Sunday paper) and had a look through all the ads - heck, there was novelty value back then ! One of sections was an ad for a supermarket. There were seven different items where the item was described by volume - and each had a different unit of measure !
Orange juice - quart.
Beer - fl oz.
Milk - pint.
Soda - liter.
Water - gallon.
Storage container - cu ft
Laundry basket - bushel

Talk about making life unnecessarily complicated .....


PS. Thanks for the thought, Sir Topaz, I'm back on mains power again.

PPS. The last time I saw the word bushel was in the King James version - how (early) 17th Century !

Ned@ CoBra(too)#1349648/14/05; 19:57:48

Hey buddy how are you? 'frr' mean anything to you?

I've never understood Belgian. That's okay. I have my own agenda.

I've gathered all I know about 'demographics' and this raging 'baby-boomer' force that's advancing mercilessly towards retirement. There will be a 'drawdown' of 'money' like never seen before. I posted a link this weekend to a great article on 'demographics', believe it was Henry To over at Gold-Eagle.

I've gathered all I can on this "Peak Oil" business, read half a dozen books. This WILL be the ugliest matter in human history.....and why argue endlessly whether its now, 2 years, 5 years, 10 or 20. What does it matter!

I've gathered all I can on the monetary expansion and the 'debtberg' that will soon implode. Inflation, hyperinflation, deflation.....a combo platter, who knows, who cares....she's going to pop, and pop large. A couple deflation books and Prector sealed this for me.

So I have (3) 20 page essays that I distribute to friends and relatives.
1) Demographics
2) Peak Oil
3) Deflation/depression

Read 'em and weep. I also tell them the top-down theory of TEOTWAWKI. Will it be 20 years, 10, 5 2, 1 ? Doesn't matter..IT WILL HAPPEN....get ready.

Take care CB2, have a golden day.

Clink!The non-contest#1349658/14/05; 20:32:53

Not to second-guess our generous host, but I was just thinking that it is at moments like these - right at a technical breakout - that he has announced contests. I'm sure that it was NOT unintentional ! Nothing like a bit of volatility to stir things up.

Gold in a bubble ? I've been thinking a lot about bubbles recently, particularly the and RE ones. I'm almost thinking that a definition of a bubble must be a certain multiple (in percent or time ?) beyond what seems "reasonable". Back in '75, did $300+ gold seem like it would be bubble territory ? I'm guessing yes. But the market swept way past that point.

In the current situation, we have a double whammy. On the one hand, we have the dollar, which, most everyone seems to agree, is walking on pretty thin ice at the moment. On the other, the price of gold has been suppressed by all the fiat barons for more than 30 years. I wouldn't be surprised to see gold at $50k at some time in the next 10 years, but, unfortunately, this being the case, we will see $100k/oz in the following 3 months. Of course, at that point it will cost about $10k to fill up an Explorer (Hummer drivers won't be permitted to do complete fillups).

It sounds kind of scary, but you only have to talk with old timers to realize how mere inflation in a "stable" economy can change things. When I started as a graduate engineer, I was paid about $4.5k per year. 25 years later, the starting salary is ten times that. When my dad started work just after WW2, he was paid about $200/year as an accounting apprentice.

So where will the bubble end ? I'd say much further out and up than we care to imagine at the present time. 2006 ? Nah. 2016 ? That's more like it. At $100k/oz errrr no, $3.5k/g. errrrr no, $15k/dinar.


TownCrierNed, you seem to have overlooked the condition in which a currency can fall to zero and basically stay there#1349668/14/05; 20:53:57

You said, "I've gathered all I can on the monetary expansion and the 'debtberg' that will soon implode. Inflation, hyperinflation, deflation.....a combo platter, who knows, who cares....she's going to pop, and pop large. A couple deflation books and Prector sealed this for me."

The clearest counter-argument I can provide is to ask you to consider, for example, the many Central or South American currencies that have just kept on inflating to the point where the monetary officials issued "new" currency notes to eliminate the ponderous chain of zeros on the prices of everything.

Turkey is another example of a country that cosmetically shed its zeros. The link shows you what can, and does, happen in these places of predominately one-way inflation.

You might want to ponder how you (or Prector) would account for the ongoing absence of the deflation you speak of in all of these cases. Try to answer to your own satisfaction why it is that these landscapes have witnessed no such Deflation Dragon to raise its magical head to burn away the bad excesses and restore these currencies to their full original strengths.


SmeagolBrrrr!#1349678/14/05; 22:13:17

Whilst sneaking the Casstle halls, we sstopped to read a chapter of "Extraordinary Popular Delusions and the Madness of Crowds"in the Archives. A little chill ran down our neck when we read this part:

"For a time, while confidence lasted, an impetus was given to trade, which could not fail to be beneficial. In Paris, especially, the good results were felt. Strangers flocked into the capital from every part, bent, not only upon making money, but on spending it. The Duchess of Orleans, mother of the Regent, computes the increase of the population during this time, from the great influx of strangers from all parts of the world, at 305,000 souls. The housekeepers were obliged to make up beds in garrets, kitchens, and even stables, for the accommodation of lodgers; and the town was so full of carriages and vehicles of every description, that they were obliged in the principal streets to drive at a foot-pace for fear of accidents. The looms of the country worked with unusual activity, to supply rich laces, silks, broad-cloth, and velvets, which being paid for in abundant paper, increased in price four-fold. Provisions shared the general advance; bread, meat, and vegetables were sold at prices greater than had ever before been known; while the wages of labour rose in exactly the same proportion. The artisan, who formerly gained fifteen sous per diem, now gained sixty."

And then this - "New houses were built in every direction; an illusory prosperity shone over the land, and so dazzled the eyes of the whole nation that none could see the dark
cloud on the horizon, announcing the storm that was too rapidly approaching."



968@ Cobra(too)#1349688/14/05; 23:47:25

Isn't it strange, in Ferdi's populistic 3 explanations, I see nothing about the pricingmechanism in which gold functions right now ?

Can you tell me, in your own words, why the POG will rise ?

KnallgoldBelgian,the world has changed again#1349698/15/05; 00:28:38

"The one who keeps gold at a fixed price...or the one who is marking its goldreserves at market"

But in my book the ECB is still a fixer of the Goldprice,recently joined by the allegedly Goldfriendly BIS.And we are again,oh,how many years later?

"Who or what exactly is going to break that particular goldprice manipulation you mention"

See above,maybe it IS (only) us,the asians,GATA who are breaking/exposing the manipulation just by the shear fact of overwhelmingly buying physical?Okay,the Goldderivatives outstanding have been dramatically reduced (but then,Goldpanda said be careful on gov. statistics...),maybe this is just a very defensive move because it really posed a systemic risk-but why then should the FED be in Another camp?

Face it,the big-gov.-unified EU idea has taken an irreparable hit-and it was fully their own fault, ignorant,arrogant and incompetent as they have been-just deserved a slap!It opened a door to a better and brighter and more pragmatic way,it only has to be walked now.Gold as UNMANIPULATED wealth asset is in my view a central part of it.Its also in the interest of those holding Gold,including the USA!So,Europe and America are bound to work together on it-some will have to step over their shadow though but its imperative as the whole western world is challenged!

Sometimes a reality check helps!

968@ Towncrier#1349708/15/05; 00:39:11

Randy, can you please share your insights on this subject with us, please ?

Thanks in advance.

BelgianCobra2#1349718/15/05; 01:12:48

No ridiculing, no hidden meanings at all...nothing personal, etc, etc. Gold dialoque !

Any goldprice is the result of a "gold-pricing" that happens in a "structure". The goldprice(s) are NOT a random effect.
Think, for instance, WHY the goldprice of bullion, encounters increasing pressure to abandon VAT on it. What exactly is the purpose of this changing trend ? VAT or not has to do with a gold-pricing policy that happens under a structure (a system). It is the difference between who wants the goldprice to remain controlled under the present gold-pricing regime and who wishes the gold-price to evolve under another pricing regime.

Think about the following : Up until now w've valued the bulk of publicly quoted enterprises (stocks) at an equilibrum price of 15 times (real and not pro forma)earnings. As a matter of fact, the goldprice was related to the oilprice...also with that same (average) factor of 15. POG = 15 x POO.
This (price-pricing) relationship has "changed" !!! How come Cobra ? Temporary accident, anomaly...or something much more fundamental behind it ? A PURPOSE...a strategy !?

When a golden bird has been living for decades in a cage (goldprice container) and suddenly the cage is opened (freegold)...does this bird realizes instantly that it is free and takes off skyhigh ? No, Sir...the bird's new freedom is also one with a particular structure...limitations (cage versus athmosphere).

It is the difference between a goldprice as a result of the goldpricing under the gold=money regime and the future goldprices under the goldpricing under the gold=wealth regime. Gold dialoque is needed to agree (to see and understand) on the difference between "money" and "wealth" !!! On this we totally fail on this unique forum and all gold-authorities leave goldbugs and philes in the dark, simply by mixing the two (money and wealth) conveniently (confusingly) with each other.

Money (all types of confetti) are taxed...Wealth isn't.

One's health is one's wealth...but this particular wealth is not transferable or eternal. the metal in possession, is ! A goldmine is NOT the "owner" of the metal !!! The papergold speculators cannot be the owners of the goldmetal-wealth that the contracts are supposed to represent. This is the old (dying) goldpricing regime...the gold=money thing. Lips is a banker with a goldmines' relationship...he's a confetti merchant and speaks for his cartel. The gold=wealth advocates are uniting and striving for another gold-pricing-regime.

Money, fiat, confetti...knows bubbles and busts. Wealth doesn't ! Wealth (the goldmetal) is universally transferable intact.

There is no such thing as a wealth-option (derivative). That's complete nonsense ! But again, here we have to determine exactly what "property" is and isn't.

Cobra : You also see how the oilprice is evolving. Do you suspect that something is changing in the oil-pricing ...the structure/system under wich the oilprices are assembled ?
And surprise, surprise...many theoretical thinkers are even very busy with architecting the structure/system/regime under wich the present house-pricing is happening...

CaradocGold "Bubble" non-contest#1349728/15/05; 01:55:19

Interesting responses!

I had planned to list responses in decreasing order based on the number of Aug 2005 dollars necessary to be perceived as a "bubble" by May of 2006. Instead, here's a summary of what you all posted:

Belgian in effect, no number high enough to be a bubble
Clink! $100,000 or equivalent (but around 2016, not 2006)
24karat $1,800
Caradoc $1,642
Smeagol $1,500
jenika $1000 (but Australian dollars)

Those assembled at this table are an independent-minded crew, so I don't envy Gandalf his duty as master of contest. We all owe him a vote of thanks because that duty must be like trying to herd a bunch of cats. If this had been a contest, there would have been a correct answer to try for and fairness would demand eliminating some responses. Instead, each of you gets full credit for having accurately addressed your own perception of a gold bubble.

Further, I find myself agreeing with the logic each of you uses. Starting at the top, if I hear that in the faroff kingdom of Boomba you can buy gold at 1000 baboombas per ounce, I know exactly what a baboomba is worth and have learned nothing about gold. And if I hear later that the price has suddenly risen to 3000 or 4000 baboombas (high enough and fast enough to satisfy 24K's preliminary definition of a bubble), I know that something has happened to the baboomba -- something Smeagol might call a "baboomba crater" -- and still have learned nothing about gold.

That said, a bubble is by definition something that bursts. If you join me, 24K, and to some extent Smeagol in seeing potential advantage in at least temporarily reducing gold holdings at or near the peak of the gold bubble/ dollar crater, you still have to recognize the signs that we're in a bubble and the signs that it's nearing its peak.

Picking up on 24K's "rapid run-up" and "widespread demand," the clues are likely to be in terms of human behavior rather than in reaching/ having reached a specific number. Looking at a previous bubble, the US stock market, note that in 1997 "DOW 10,000 by the year 2000" sounded crazy but was more than 10% below the mark. Equally, some respected stock market gurus were advising caution as early as 1998. Any bubble -- including the current housing bubble -- is likely to reach heights no one would expect and last longer than most would think before bursting.

My hunch is that when cab drivers and convenience store clerks want to talk about gold, you'll know we've entered a bubble. As for when to exit to avoid the bursting of the bubble, it'll be at most a matter of weeks after the gold boom takes over the covers of national publications. Closing the focus in to a matter of days, note that when television's 60 Minutes did a segment on people standing in line to swap Grandma's golden candlestick holders for dollars, the bubble had burst before the following weekend.

True, those wishing to relay a certain number of ounces of real wealth to their descendants need not concern themselves with gold pricing whether in dollars or baboombas. And attempting to play the bubble will admittedly be a gamble. But with the right clues, switching at least temporarily to another form of wealth just might allow you to relay an even greater number of ounces to those descendants.

Regards to all,


BelgianKnallgold : reality check#1349738/15/05; 02:17:45

The (helping) reality is that euro-policies proceed as architected, highly or lowly publicly profiled.
How many "slaps" has the EU-unification process been absorbing and overcoming in the past decades !? Common Knally...the recent "hit/slap" changed nothing on the decades old "idea" and Very little on the implementations of it.

Rethink the general (public) opinion on the ECB/BIS-complex's "actions" !!! WHAT and WHY exactly are they strategically fabricating !? Is this really as transparent as it is publicly presented ? Ohhhhh Noooooo Sir.
Always bear in mind that the $-numeraire under the $-IMS has no legal tender laws outside the US. Transplant this to the €-numeraire !

From 1971 to 1980, the global gold-accumulators were in the (unorganized-!!!) process of freely pricing the metal. This (rather spontanious-natural) action was brutally aborted. Don't bid for goldmetal...or...we manage you can't get a gram (price to da moon)! THIS STILL WORKS TODAY, Sir.

What is changing the gold-camp formations and their respective weight on the $-IMS. Another goldpricing-regime also means a different relationship between the heavyweights in the planet's boxing ring. Very unopportune for the game to finalise it with any kind of KO uppercut (breaking the goldprice management). We simply evolve round after round (think Asia/oil factors).
We continiously check these realities, no.

Champs and friends, come and go...but all wish to stay in the ring.

What exactly stopped/altered/broke the gold-regimes in 1913, 1971 !? The correct answer is that it is not a very particular event that changed the regime overnight...but a process that was evolving (riping) and suddenly was decided to "happen" (step over the shadow). So, why do we ask ourselves the same question, today : what is going to break the existing goldpricing-regime !? There is no fixed date for having the new free gold pricing. As there were no fixed dates for US citizens' gold confiscation or closing of the gold window...or WAG I...or any other official goldmetal exchanges (redistribution transfers).

Think about the recent "process" of the evolving yuan regime as an example as to how the gold-pricing is evolving.

Was there a predictable timespan for the fall of the Berlin wall (re-united Deutshland)!? But we increasingly grow in our convictions that one day this ugly thing was going to become history. What happened to the iron curtain ...etc...Why then is it so difficult to accept/see that the same (kind of process) is happening in the gold-pricing (recent regime) !?

It is as if all goldbugs collectively don't wish "it" to happen ? Strange, no. No, it is not strange...

TopazFreeGold.#1349748/15/05; 02:26:16

FWIW, My interpretation of what FreeGold represents and is destined to achieve, is that status of an Asset to Hold that is OUTSIDE the System.
Currently through both Libor/GoFo and Futures Markets, PoG is effectively Paperised. As such she's very much IN the System.
This inhibits it's ability to act as a Systemic Counterweight.
Given ALL the usual reasons (longevity, scarcity etc.) gold should be associated with NO interest and it's Price determined by Spot demand/supply.
We will have as an option, unrestricted access to - Gold Bullion - untethered - no interest - No lend or borrow, to FREELY buy and sell as our circumstances AND our assessment of relevant Fiat regimes dictate ...of course this would negate the NEED for a WRC...they would all then be vying to retain as much value against Gold rather than as is nowadays, trying to LOSE value against the Buck.

It's far too involved for me to keep track of nuances that head us in that direction but imo, the concept makes too much sense not to.

Topaz...however,#1349758/15/05; 02:50:46

to imply an "Official" move to FreeGold, is imo selling the FreeMarket short somewhat.
I would think all these micro-moves we are or have been witness to these last 6odd years (WAG's etc) are more a reaction to Mr Markets tacit insistence on FreeGold than any contrived future declaration.

Ned@ TC#1349768/15/05; 05:26:21

Yes indeed Turley a la Argentina experienced dwindling currency. I wonder though about the dollar. Was it FOA or amother that said (paraphrasing), " the end both the dollar and gold will rise together". I guess they saw a pinch of deflation too!

Up until a year ago I was firmly in the inflation camp, bought the McMansion, as Prector calls a huge house w/ huge mortgage, open up as many lines of credit as possible and said "let 'er rip". Co-incidentally this also was in parallel to the FED beginning to raise rates to 'cool' inflation.

Now I see a different view, what if oil does crash the world economy? What if oil, as we first assumed would, does not cause inflation to 'percolate' through the economy? What if it stops the economy dead in its tracks? What if the housing giddyness does stop? What if the consumer does stop spending frivalously?

This inflation/deflation debate is a waste of time, it could go either way (see/hear Puplava).....for that matter it may not happen at all! Maybe Mr. Greenspan has been sold short, maybe he is the MASTER ! Maybe the US FED can keep this going for another decade.

However, given the fullness of time gold will win. As Prector says regarding the fiat money system, " the end, gold will win". My 3 Horsemen will see to that:

Fiat burns ........2006-2012

Add to the mix "Resource Wars", "Blood & Oil" (Michael Klare) and you get NUKES........2010-2020.(I don't believe Klare actually said NUKES, I'm thinking maybe NUKES)

Guessing on the time frames of course. Trouble is the 'default' position of the human race over time is to muck things up, go to war, shed blood, make things worse.

I leave you with a snip of an already famous Paul Volcker quote, I believe from the spring of 2005:

"Circumstances seem to me as dangerous and intractable as any I can remember. ... What really concerns me is that there seems to be so little willingness or capacity to do anything about it"

Gold.........get you some.
Nuke you one.

mikalDollar rises ahead of inflows data at 9AM#1349778/15/05; 06:35:34

Dollar Rises on Speculation Demand for U.S. Assets Increasing - August 15, 2005
GoldiloxCalcutta plans ban on rickshaws#1349788/15/05; 08:40:08


"Calcutta's famous hand-pulled rickshaws will soon be banned, according to the chief minister of the Indian state of West Bengal.

The rickshaws had long been considered "inhuman" and did not exist anywhere else, Buddhadev Bhattacharya said.

The rickshaw, immortalised as a living symbol of Calcutta in films such as City of Joy, will be phased out in four to five months.

The hand-pulled rickshaw came from China in the 19th century.

Mr Bhattacharya said: "We have taken a policy decision to take the hand-drawn rickshaw off the roads of Calcutta on humanitarian grounds."


More bone piles, even in India. My guess is that they will push for gasolin-driven alternatives, exascerbating the unemployment issue with a massive uptrend in air pollution.

Of course, there will be a large influx of 24-Hour Fitness centers and the accompanying fees required to keep them healthy!

We can rest assured that stupid government is not limited to the west.

mikalHapless dollar fights back#1349798/15/05; 09:05:43 Morningstar - Dow Jones & Company, Inc.: CURRENCIES: Dollar Lifted By Investment Data - 8/15/05

GoldiloxRussia Politely Supports Iran's Nuclear Intentions#1349808/15/05; 09:12:48


It was reported yesterday that Russia made an official statement that it would like to see tensions eased over Iran's nuclear development program. Russia, as well as China, have large oil investments in Iran and would likely come to its defense in a showdown with the US with respect to advancing the country's nuclear program.

Iran is not Iraq and military action against Iran will put in harms way large Russian and Chinese investments. That could be a serious risk in today's world. This will also empower the certifiable nut bar in North Korea to belligerently pursue his profitable program of selling nuclear technology to the highest bidder.


Not to mention the certifiable nut job in the Pentagon who "looked the other way" while his Swiss company sold North Korea the nuclear technology in the first place. These guys are "all about security" until it interferes with their bottom line!

But of course, this same nut job was buddying up to Saddam while that great hero Ollie North was parlaying Nicaraguan cocaine into arms for Iran from the White House basement flea-market. North's lies about this garage sale to Congress won him an indictment and subsequent "pardon" from Bush the Elder (and of course, his own TV show on FOX).

If Iran's oil bourse sees the light of day, the new "reformed" CIA will be ordered to spin some "Yellow Cake" memos to bolster oil profits in the Nymex. This particular yellow cake will in no way resemble "angel food", and will lead to further interruption in the world oil supply.

Once this comes to pass, Exxon's $8B record quarterly profit will resemble "lunch money".

When commodities, a finite resource, meet FIAT, an infinite resource, paper prices rise "to da Moon", at least until some "miracle" changes the perception.

CaradocIran to open up to carmakers#1349818/15/05; 10:08:06

FRENCH and Korean car manufacturers including Citroen, Peugeot, and Daewoo are set to benefit most from the burgeoning Iranian car market as Tehran moves to lower import taxes tax on whole cars.

The carmakers are well placed because they have joint ventures in the country as do Renault, Nissan and Mercedes. Most ventures take the form of licensing and production agreements though Korea is currently investing in a state of the art plant.
End of snip

Sounds like several economic entities won't want things disturbed in Iran (which plans to open Tehran oil bourse priced in Euros in March of 2996). This lessening of demand for dollars becoming petrodollars won't go down well in DC.


GoldiloxIran offices#1349828/15/05; 10:14:07

@ Caradoc,

McCanney reported this week that the London times was questioning a Halliburton office in Downton Tehran. Does this violate the "dealing with terrorist nations" act, or perhaps suggest that US interests also have proprietary reasons to cool down the political rhetoric?

CaradocUK says Islamic law OK for Iraq#1349838/15/05; 10:14:07

Two snips:
BRITAIN's new ambassador to Baghdad has no objection to Iraq becoming a formal Islamic republic if that is what its policymakers choose as they prepare to unveil the new constitution this week.
..."We don't have a problem with theocracy in Iran. Having a democratic election in which you have a theocracy is OK, as long as that can be changed and is not a once-and-for-all election," he said.
End of snips

Wonder whether the ambassador has any examples of Islamic theocracies (governments implementing Sharia law) ever changing to something different as the result of an election rather than as a result of violence. I don't know of any.


PS: maybe "Iran" in second snip was typo for "Iraq"?

Caradoc2006, not 2996. #1349848/15/05; 10:16:13

Sorry 'bout that.
CoBra(too)Belgian#1349858/15/05; 10:27:53

Instead of an answer - I really loved your caged golden bird
analogy; It may be close to the canary in the coal mine - if the mine becomes dangerous, just kill the canary.

I'm sure with you when you restate gold=wealth and so would Ferdi Lips be, notwithstanding that he founded the Rotshild Bank of Zurich in 1971 and a few years later the Lips Bank, a gold bank purely on its own gold/wealth standard.

Been there,have seen it all and more. And yes I admit I'm also closely connected to some junior gold/silver producers, developers and even explorers.

just one more remark re oil pricing - Here the market has taken over in large parts, even if some "powers" are still trying to interfere. The demand situation has changed dramatically, just as it did with almost any other hard asset, including the pm's. While the pm's seem still lagging, it just may be because there is no other solution available in the jungle out there to ameliorate a total destruction of today's system; And not only the prevailing monetary system. Well, as it looks today all markets are manipulated - the currency-, sm-, bond and even derivative markets. In the end it is the last stand of defense for the system's apologists.

A/FOA have seen this long ago and so have all of us on this great site of our gracious host MK, who has so much to contribute. Meanwhile the debt pyramid, and one one can't get by to mention the spiralling of the US debt on all levels has taken on utter irredeemable proportions - it may become to speculate if the US $ reserve Currency systeme will become totally obsolete; It is only a question of when.
The Unocal takeover bid from the Chinese may become a catalyst of grabbing some more real and hard assets in the US - regardless of price - as long as the US $ still buys anything of "relative" value;

Displacement of the system has come a long way and will only accelerate from here on out. The POG also will again be following the fundamental demand/supply equation - when the miners again will watch the canary signalling danger.

Best cb2

PS: Ned - Sure I know frr quite intimately.

GoldiloxUK theocracy statement#1349868/15/05; 10:30:05

@ Caradoc,

That's an interesting statement coming from a government where the "apolitical" "Royal Family" still owns one of the largest asset holdings in the world.

As US demographics are rapidly growing in Hispanic numbers, and Euro block countries exhibit rapidly rising Muslim populations, I wonder how that statement will look in 10 or 20 years. . . especially if Parliament starts seating some Islamic MPs from the immigant neighborhoods. Will they be able to successfuly gerrymander their election districts to counter-effect this?

The US is seeing second and third generations of Latino immigrants actively engaged on the political scene, and it only lends credence to the suspicion that Britain and the Euro block will experience the same.

TownCrier968, RE: msg#: 134970#1349878/15/05; 12:34:03

My thoughts on WHICH subject -- on the gold pricing mechanism, or on Ferdi having knitted a perpetual purgatory to which he would have us all go?


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TownCrierFed boosts money supply -- adds 'permanent' reserves through outright Treasury purchases#1349898/15/05; 13:42:53

In open market operations the Trading Desk for the Federal Reserve today injected 'permanent' reserves of fresh cash into the nation's commercial banking system through the outright puchase of Treasury coupons for the Fed's own account.

The size of the operation totalled $1.39 billion, tarketing maturities of Oct 2006 to Nov 2007. As this new cash is so called "high powered" cash reserves, the banking system can use it to further expand the money supply to the full practical limitations allowed by our banking system's fractional reserve structure.

Polishing up the liquidity pile, the Fed's trading desk also today injected $9.5 billion in temp funds via overnight repos.


TownCrierBankruptcy possible for Vista Gold#1349908/15/05; 14:08:19

The Denver Business Journal - Monday

Vista Gold Corp. is teetering on the edge of bankruptcy, without enough capital to cover the roughly $3.2 million in known obligations coming due in the next year.

...Vista studies and buys prospective gold mines that have defined gold resources. The company does additional exploration and technical studies to raise the value of the projects for eventual development.

The company lost about $1.5 million during the second quarter, compared to a $1.4 million loss for the second quarter 2004.

For the first six months of 2005, Vista reported a loss of $2.4 million...

The company blamed the losses on several factors, including slightly decreased exploration, property evaluation and holding costs, and increased administration and investor relation costs of about $100,000 for a mass mailing marketing campaign during the second quarter.

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

Simply a reminder that gold exploration and mining companies can suffer all of the same woes as any other stock investment, even in a gold bull market.

True diversification, therefore, requires a portion of your holdings be in gold METAL rather than gold stocks -- because in the long history of the world, companies have come and gone, but nobody has ever seen a box of gold coins declare bankruptcy, nor has its owner gone begging.

Invest in what you will, but be sure to devote a prudent portion toward putting a solid foundation under your portfolio. Call USAGOLD-Centennial for consultation on a diversification strategy that's right for you.



968@ Towncrier # 134987#1349918/15/05; 14:16:25

Your fine thoughts on both, please !

Thanks in advance.

TownCrierChina's economic planning body hits out at central bank#1349928/15/05; 14:17:03

AFP, Beijing -- China's key economic planning body, the National Development and Reform Commission (NDRC), Monday lashed out at the reform policies of the central bank in a highly unusual display of bureaucratic infighting.

^---(see url for short article)---^

Sometimes in a body the left hand doesn't always know exactly what the right hand is doing...



Topazrelatively speaking,#1349938/15/05; 14:20:55

our Gold-v-alt currency spread is approaching '99 proportions. Over the last 5 Yr's, we've endured many a mini-retreat as Gold retraces to lend support to the Basket, I think however we may now be ready to give them all up.
As the pundits sit back content in the knowledge that this current up-tick/retrace was nothing more than SA strike inspired, watch closely as PoG nails them to the alt side of the Crucifix with mouths agape.

What the!! ...indeed.

968@ Cobra(too)#1349948/15/05; 14:28:39

"Displacement of the system has come a long way and will only accelerate from here on out. The POG also will again be following the fundamental demand/supply equation"

Again ???? Can you tell exactly WHEN the POG did follow the demand/supply equation in the past ?

A demand/supply equation as gold, a commodity, or as a wealth reserve asset ??? If gold is nothing more then a commodity subject to the supply/demand equation, why not buying silver ?

Looking forward to your answer !

USAGOLD Daily Market ReportPage Update!#1349958/15/05; 15:01:14">
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

August 15 (from MarketWatch) -- Strength in the dollar brought pressure to bear on precious-metals prices after a Treasury Department report showed capital inflows into the United States accelerated in June as foreign investors snatched up a record amount of corporate bonds.

COMEX December gold closed at $447.60, down $3.80.

Gold futures climbed over the past three sessions, posting an advance of nearly $9 an ounce last week.

"There's a bit of long covering ... with people taking profits" in the gold market, said Thomas Hartmann, an analyst at Altavest Worldwide Trading.

"Gold has been following crude -- both are taking a breather," said Charles Nedoss, an analyst Peak Trading Group in Chicago. Oil prices lost ground but remained above $66 a barrel.

Overall, however, "the gold charts look very constructive -- this looks like profit taking after last week's run," he said.

Gold has "every reason to pause, consolidate or pull back short-term," said Peter Grandich, editor of the Grandich Letter, but the "surprise continues to be its upside potential."

"Very strong physical buying worldwide combined with continuing mining supply shortfalls is but two of numerous bullish factors going for gold at the moment," he said.

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

CoBra(too)@968 - re: gold supply/demand#13499608/15/05; 15:59:50

just to pick out a few dates where physical gold demand overwhelmed available supply - how about 1933/34 when gold posession was made illegal in the U.S. Also with the demise of the London Gold Pool 1968/69. And last 79/80 when the CBs again lost a major and unbearable portion of their gold "reserves".
... And resounding yes, as a wealth asset. Precisely, as the fiat monetary systems had to be preserved by all means for another (merry-go)round ... until the pressure became to great!

It will happen again! cb2

BTW, I'm also hoarding physical silver, which unfortunately has a VAT of 20% in the EU, while gold has none - Ha, why? Because it's just a commodity, or isn't it?

mikalAsia's Treasury Appetite Matures#13499708/15/05; 16:20:54

Asian Diversification Hits Treasuries - Jennifer Hughes - August 15, 2005
968@ Cobra(too)#13499808/15/05; 16:27:31

In these periods, the POG was still "a political" priced POG, as it still is today ! A POG in a dollar cage.
And did the demand really suddenly fell in 1980 ?

So why will the POG rise, according to your thoughts, by lack of supply, or by a failing fiat monetary system ?

And if all fiat monetary systems fail with a rising POG, what is the difference between a Central Bank that uses a fixed POG for valueing goldreserves, and a Central Bank that uses an MTM-system ? Why doesn't the US uses a MTM system ?

Goldilox1980 demand fall#13499908/15/05; 16:45:31

@ 968,

That's a really good question. Does anyone remember that period wll enough to describe the "fall fom grace" after $840/oz.?

GoldiloxSilver Round#13500008/15/05; 16:48:49

I received my silver round in the post today. It's beautiful!

I'm never much good at "guessing", so you finally asked something I knew the answer to! LOL

Thank you MK, Marie, and CPM staff for this lovely addition to my collection!

GoldiloxFYI Sports Fans#13500108/15/05; 17:20:17

For those who remember when sports was fun, the Little League Mid-Atlantic Final is on ESPN2 right now.

The NJ leadoff batter brushed off some "chin music" and answered with a shot over the LF bleachers.

No one is holding out on "contract disputes". Now THAT's baseball!

CoBra(too)@968 & Goldi#13500208/15/05; 17:34:23

In my mind it was Paul Volcker, who went all out with blazing guns to fight inflation. Interest rates went up to almost 20% on US $ debt instruments (GMAC issued a Euro Dollar debenture even higher). Recession followed, but the Dollar was saved for another day and recouped almost all its losses vs. all major currencies.

A feat to repeat today would in essence crash all markets and economies, due to the gigantic debt levels accumulated since. Debt, now dubbed credit in the US Seignorage $ Reserve system has become irredeemable.

I know, the next bone you'll be throwing my way is going to be why big Al is rising interest rates. Well, whatever else can he conceivably do to get out of his conundrum (flattenming yield curve) and pass the last months of his reign in some dignity. Mr. Bubbles may well pierce some more of his self inflicted bubbles by raising rates 1/4 too many yet, leaving his presumed successor with no more choice as to resort to the Bernanke "chopper" money.

MTM would be a great thing, though first you would have to know your markets - and then you would have to return to a reliable value of your medium of exchange. If the medium loses value at the rate the reserve currency has lost over two years time vis a vis its (not stringently pegged) trading partners, then any hedging on a future delivery of a product becomes obsolete; And the only hedging would be against the pre-dominant medium of exchange...An abomination per se in the meaning of future contracts - as in most of all derivative trading today and the massive advent of hedge funds ... The largest being the monstrous US banks, accompanied by the UBS' and DB's of the world! Still wondering wherever they wann'a find counterparties, though that's a pretty idle question.

Sorry for being long and obstinate - No, only the former ... cb2

PRITCHOAnswer To an Oft asked Question ? - - A SLOW BOAT TO CHINA OR HOLLYWOOD HUBRIS?#13500308/15/05; 19:24:51

Market Wrap Up -at a neighbours site.

This a very well thought out article-- It explores & gives reasons why the Baltic Dry Index [the spot cost of hiring a ship] has sunk so low.Right out of the box and well worth the read.
Follow the link for a good read.

PRITCHOFrom Richard Russell - - - - Latest Comments #13500408/15/05; 19:33:37

This guy is good.(Age 81 so been around the floor a few times:) He writes an interesting article 5-6 times a week & theres ALWAYS something there to grab hold of. Recommeded.

August 15, 2005 --
Random and disjointed thoughts from the Russell underground. The chart below is courtesy of my old friends, the inimitable Aden sisters ("Aden Forecast"). Is there a connection between the price of oil and the price of gold? Well, they both represent a type of wealth, and they do call oil "black gold." And I guess you can say that gold is wealth you can hold in your hand, while oil is wealth that resides in the ground. Everything of value is related to everything else of value, and you can always plot the price of one in relation to the price of the other.

The chart below shows the ratio of gold to oil over the last 20 years. Oil's price has recently been surging to record highs, and gold in relation to oil has been declining to its lowest levels since the '80s. The chart suggests that gold is now "too cheap" in relation to record high-priced oil.
How about these statistics? The US is now graduating 60,000 scientists and engineers yearly. China and India between them are graduating 500,000 scientists and engineers a year, and they are not being handicapped by a "faith-based" government.

"Chindia" is the new buzz-word for the combination of China and India. The current issue of Business Week features China and India on its cover. One article starts, "At an elite tech school near Calcutta, someone is trying to invent the next Blackberry, but one that will sell at a fraction of the US price. Outside Bombay, they're putting the finishing touches on a $2,200 people's car. In a world-class Shanghai lab, a Chinese team is mapping breakthrough cancer research."

If you read the above paragraph and it doesn't start you thinking, then, dear subscribers, you're not seeing the picture. The picture is increasing world competition coming from one-third of the world -- a third of which is very hungry, a third of which is just joining the game. It's a third of the world that wants the good life, the kind of life that you and I enjoy.

I have no idea how it's all going to turn out, but I do believe that we have massive problems ahead, and that we may be on the wrong track.

The US will not continue to be master of the world. The way to power in the future will not be through military supremacy. The US is losing power via our zero savings rate and our loss of our manufacturing base.

There must be, and will be, a leveling process, and that leveling process will probably result in a decline in the US standard of living while China and India and Asia improve their living standards. They are the savers while we are the spenders. They are the producers while was are the consumers.

The power of the US lies in the rest of the world's willingness to accept US dollars. This cannot last, when the nation that issues the dollars is a nation that is running endless deficits.

Gold always gravitates toward the powerful and the successful, both in individuals and in nations. Gold is now moving toward Asia.

Somewhere ahead the US economy will falter, then decline. That will be deflationary. The Federal Reserve will not tolerate deflation, since deflation renders the Fed impotent. To fight deflation, the Fed will open the floodgates of fiat money creation. They will send short rates to zero if need be. Under those conditions, gold will move into its third frenzied phase. Interest in gold will then be the opposite of the disinterest that we see now.

The primary bull market in gold that started in 2001 continues to be a hidden non-event as far as the great majority of investors are concerned. They don't know it exists. And the chart below shows you why. Gold has moved up in steps, each step followed by a "discouraging" correction. But when you view the big picture as seen in the chart below, you see that a primary bull market is very much in force.

PRITCHOMore BS - - Now we Get AN Internationally Recognised Speaking Out - - Again!#13500508/15/05; 19:54:11

Highly Questionable US Employment Gains!
by Marc Faber

Dollar Bill.,.#13500608/15/05; 21:41:56

The French and the Germans have a few reasons for moving Iran toward the security council dont they? If Iran does the euro bourse, the euro value increases, which the EU certainly seemed to not like in the winter when the euro value went to what? 124? Whatever, they didnt like it.
If iran wont listen to them about the threat of war ifthey continue with the enrichment process, how will Iran listen to other concerns of the French and Germans ect if the iranian become kingmakers via oil and euro economic warfare? The iranians are run by the same kind of guys these countries are expelling as undesireables.
12 mullahs as power brokers internationally must look less lovely as each day passes.
Saddam had a long term freindship with chirac. saddam did have western tendencies that chirac felt were enough to allow him to overlook saddams horrid torture of his citizens. Hell, the US was siding with other mideast tyrants and thieves, Chirac had his oil guy, whats the dif?
But this Iran there is hardly a redeeming feature to them. At this late point, the embrace of the euro by this iranian crowd must look and actually be like a embrace of a tar baby that is just too, way too.....well.............religious!
Not exactly enlightenment material!
Chirac must view this all as like being stuck between a rock and ahard place. Can the euro countries really afford to take a walk with Iran as saviour of the euro?
Isnt that kind of saving just death in disguise at this point? The point of being reserve currency is to run deficiets I believe. Cant france and germany run deficiets now that the US is hosting an infinite debt model and hints it is moving towards power shareing? Would having Iran at the chokehold of your currency strength give you sleepless nights?
12 mullahs decide they dont like your law about girls wearing those hoodhats, and you have a currency crisis on your hands. Wont allow certain moslem wishes fulfilled in France? Ooops, your oil, oooops, your currency might be effected. We didnt mean it, some guy in charge of hitting the right switch went to prayers and forgot to do this or that. You understand right? Dont squack or we might deal in dollars. I just cant imagine the french and germans wanting this iran bourse, or the iran nukes.

PRITCHO@ Another pointless Rant - -- Oops forgot the medication- again#13500708/15/05; 22:15:46

Most importantly repeat - - i before e except after c !
PRITCHODeath & Obligations - - - - - #13500808/15/05; 22:48:12

In case anyone on this board has the misconception that being dead will releave you of your obligations and concerns, this should resolve the issue.

This is so priceless, and so easy to see happening, customer service being what it is today.

A lady died this past January, and Citibank billed her for February and March for their annual service charges on her
credit card, and then added late fees and interest on the monthly charge.The balance had been $0.00, now is somewhere around $60.00. A famil ymember placed a call to Citibank:

Family Member: "I am calling to tell you that she died in January."

Citibank: "The account was never closed and the late fees and charges still apply."

Family Member: "Maybe, you should turn it over to

Citibank: "Since it is two months past due, it already has been."

Family Member: So, what will they do when they find out she is dead?"

Citibank: "Either report her account to the frauds division or report her to the credit bureau, maybe both!"

Family Member: "Do you think God will be mad at her?"

Citibank: "Excuse me?"

Family Member: "Did you just get what I was telling you -the part about her being dead?"

Citibank: "Sir, you'll have to speak to my supervisor."
Supervisor gets on the phone:

Family Member: "I'm calling to tell you, she died in January."

Citibank: "The account was never closed and the late fees and charges still apply."

Family Member: "You mean you want to collect from her estate?"

Citibank: (Stammer) "Are you her lawyer?"

Family Member: "No, I'm her great nephew." (Lawyer info given)

Citibank: "Could you fax us a certificate of death?"

Family Member: "Sure." (fax number is given)

After they get the fax:

Citibank: "Our system just isn't setup for death. I don't know what more I can do to help."

Family Member: "Well, if you figure it out, great! If not, you could just keep billing her. I don't think she will care."

Citibank: "Well, the late fees and charges do still apply."

Family Member: "Would you like her new billing address?"

Citibank: "That might help."

Family Member: "Odessa Memorial Cemetery, Highway 129, Plot Number 69."

Citibank: "Sir, that's a cemetery!"

Family Member: "What do you do with dead people on your planet?"

GoldiloxCome on, Bill#13500908/15/05; 23:00:11

Rummy didn't "overlook" Saddam's torture and genocide. He supplied the helicopters, bio-technology and "advisors", all while Ollie North was supplying the Iranian Mullahs on the other side of the conflict. He was also on the board of the Swiss company that sold North Korea their reactor in 1998. By the way, they both supplied bin Laden's boyz in Afghanistan, generous arms purveyors that they are.

Were the Shah, who the CIA propped up after their coup of Iran's democratically elected non-religious government, or Noriega the Bush's designated coke dealer that ratted them out, or let's go one step futher, Pinochet the Butcher all great for their people?

This is the kind of friends the corporate raiders support to assist in first world mass consumption of the third world natural resources.

No doubt the guys you mentioned are not "nice folks" (rulers NEVER are), but they pale in comparison to the genocide committed by the super powers and their resource wars of the 20th century. More that 100 million died at human hands in the "century of genocide."

I personally don't care if the women in Iran have to cover their head. The Catholics in America must do the same when they enter a church, even as a tourist.

Every culture has some very peculiar laws and some very unfair practices, even the US. It's not a good thing to eliminate all cultures and homogenize everyone to one set of global rules as the result is the NWO you seem to detest so much.

GoldiloxFannie Mae "conundrum"#13501008/15/05; 23:07:47


Comment: Why do they not know the commitment and market prices of every instrument that they have purchased? This is absurd. How can you value something if you do not know the market price, or if there is no market price? How can you hold it on your books as if there was a market for the asset? It is customary to value illiquid assets at a discount from the price one paid, or at most, at an amount equal to the price paid. Has Fannie Mae, and perhaps many other derivative holders, been misrepresenting the value of their derivatives? If it is true that they do not know the value of their derivatives on every day of the year, how have they priced them in their historical financial statements?

Is it not the responsibility of the company holding derivatives to accurately represent the value of these contracts? If they do not know the exact value, is it not their responsibility to say so and to take a conservative stance on the value of these illiquid assets? A derivative is a complicated instrument and depends on the financial solvency and good will of all counter parties to the contract, and of any future purchasers of the
contract. How does Fannie Mae, or any other derivative holder monitor that?

In my opinion, the accounting profession and the corporate holders of derivatives have to get their hands around this big and growing problem. Fannie Mae is a big example, but many, many financial institutions of all
types, and many other corporations are parties to derivatives, and they are unable to know the accurate value of these contracts. Yet, there is no clear way to explain to readers of Fannie Mae's financial statements just how much risk the company has taken on. This leaves many groups; investors, creditors, suppliers, and others without a clear picture of the risks involved in doing business with a specified company. Many parties, such as those listed above, have been taking Fannie Mae's statements at face value, and yet the company and their accountants cannot be sure that the financial statements reflect the actual values. Many experienced, and thus cynical observers of the situation, believe that the derivatives may be much less valuable, or may carry much more risk, than they had been led to believe.


Monty Guild's comments on the FNMA derivatives mess. See the link for the full context and the reference source.

Goldilox7.2 EQ off the coast of Honshu#13501108/15/05; 23:20:22

About 220 miles notheast of Tokyo.
Goldendome$ Bill, The U.S. is suffering the fruits of it's success.#13501208/15/05; 23:55:30

Cruel irony for the U.S. that it now faces the establishment of a much more strictly Islamic government in Iraq than the dictator who was displaced. Certainly Sadam had his faults, but his was a much more secular government than nearly any other in the region. Sadam made sure that the religious factions and clerics knew who was in charge...and it wasn't Islam!

The removal of a strong Iraq removed the counter balance to the strongly Islamic states in the region, particularly including the Iranians. Just as water flows when a dam is broken, so too will power flow to fill the void in Iraq. Can the Iranian government be blamed if their zealots flow to assist in filling the power void in Iraq that the U.S. created? How would they be stopped? We can't even control our own borders here in the United States for Pete's sake. These people by tradition, culture, religion, and experience are certainly not like us. That is a mistake that we have been making all along; to expect the people of the middle east to adhere to our rules in government and national undertakings.

You state that the purpose of the reserve currency is to inflate. That's shedding a new thought on what has obviously been happening, particularly since 1971. Certainly then, you agree that the U.S. dollar is no long term store of value. More reason to buy and hold gold for those savings.

Again, Best, G-dome

Goldendome$ Bill, a correction for my post#13501308/16/05; 00:03:07

I stand corrected, you stated the purpose of the reserve currency is to run deficits. -- I said, inflate.

But for practical operation purposes, deficits have certainly led to inflation at home and abroad.

GoldiloxPurpose of Reserve Currency?#13501408/16/05; 03:18:17

Stating that the purpose of a reserve currency is to run deficits is like saying the purpose of having banks is so there's something worth robbing. At least John Dillinger thought so. He stated that the reason he robbed banks is so they had some competition for their theft.

Not to suggest that many in government haven't pressed this advantage, but it is still larceny no matter how much lipstick you put on the pig.

Most of the failures of western capitalism can be placed squarely on the shoulders of those who have envisioned government as a "feeding trough", One can easily imagine that this refers to individuals who "expect" support, but even more so to industries who lobby for preferential treatment, a la banking, energy, drug subsidies, ad infinitum.

Just as similarly, the failures of "Communism" fall squarely on the shoulders of those who abused the state powers, as the demise of the Societ Union exhibited the rise of "oligarchs" who transfered their previous state "privileges" to into Mafia-style private ones.

In either system, once the rights of the "people" become secondary to the "welfare" of the state, failure is inevitable. The people are the only reality, whereas the "state" is a fiction agreed upon for various simplicities, i.e. disaster security, common defense, etc.

Dollar Bill.,.#13501508/16/05; 03:39:03

Gold(endome/ilox), Pritcho,
What happens if the iran bourse starts up?
Buyers flock to the euro...speculators do also......... gold must rise? As investors are freaked about what is happening to the order and what might happen......doesnt the euro just skyrocket? Oil buyers....who would pay more if the it cost less ineuro? But what happens then?
What happens to zillions of dollars? What happened when saddam traded in euros? Wouldnt the euro guys have to recycle,or buy dollars with euros to keep the euro in some acceptable-whatever that is- range?
If the dollar is deeply effected, the us economy tanks somewhat, the world economy shutters, oil use goes down, price lowers, mullahs wont care, they are after control first, not concerned if the -west- lives at Iran citizen financial levels...can you have a workable 2 reserve situation? In such an untidy world, can that be managed?
Did chirac think he was smart enough to make that work? Must have, but how?
He must at least have had assurance from saddam that the euro guys could control the money game.
I imagine the iran 12 mullahs like Sauron in Mordor. What did Gandalf say? "sauron ..................."(?) "and he does not share power".
Dont religious guys with power automatically think that god is giving them power, and the 12 mullahs come from islam, which has many sentences that the 12 could choose from, many of them would lead them to think thier euro allies are lining up to be swallowed by islam, and hence, how much of an alliance of equals would this stand a chance of being?
Anyway, I thought maybe Pritcho might be on to something if I view it as an invitation to ask the questions I think of as I think of them instead of waiting for ideas to come and then posting. I imagined that my posts were filled with questions, perhaps, but perhaps not obviously enough. Or.......hmmm......but I dont mind if the unspoken is the case.

Dollar Bill.,.#13501608/16/05; 03:53:20

G-lox, dang boy, when do you sleep? What time zone must you be in? I have a question you might like. On the subject of -rights of man-. rush limbaugh sells shirts insulting muslims and he pretends that it is insulting "leftists".
He has over 20 million listeners a day. none complain? the fcc wont act? Should there be an independent leader with no fear of restraint, in a free land?
Shouldnt freedom of speech have limits? Can a man get an audience, lead them to insult anothers religion, give out a supreme court justice home address 3 times, at least, and not have anyone to fear? Can he sell products from a govt regulated media perch into the public square, that insults anothers religion, and have no limits?
Individual rights of speech must have limits right?
If there was no evil, maybe not, but this is a world with evil, and no one is immune from going bad it seems.
How does one stop him from doing this? John Rawls wrote about law, but how does a govt "respect the comprehensive doctrines" of its citizens if it hosts, on its regulated media, an individual faction, or organized faction that insults another groups religion?
Maybe the forum gods are sleeping and wont delete till the working day begins;)
I ask because I want to act.

Topaz@PRITCHO.#13501708/16/05; 04:10:25

My Freind,

At the height of foreign unrest, GWB chooses to seize the opportunity to persue leisure ...weird, planned or neither neighbour?

GoldiloxQuestions#13501808/16/05; 04:33:08

@ $Bill,

I took an early nap and got up to watch the tickers for a while.

If being religious is a role of "servant", then claiming "religious power" seems a huge oxymoron. If religion, as professed, is a spiritual art, then practicing it for temporal power might just be perversion.

I harbor no admiration for the primitives who profess religious power, but even greater disdain for the educated, who really should know better.

When GWB professes that God told him to "Bomb Iraqi civilians", is he any better than the Islamic hate mongerers or the KKK grand Knights who told their minions that God wanted them to burn out all the blacks and Jews?

One of the great sadnesses of this country was the tenure of James Watt in the position of Secretary of the Interior. It is told by his subordinates that he prostated himself daily to pray for the end of the world. It sounds like a wish in direct conflict with his role as chief steward of the planet.

As far as Rush goes, I have seen tee-shirts about him as well, and to be sure they are not complimentary. Gotta love that free speech, with all its potential for abuse.

I wonder if Rush supports Congress' "one strike, you're out" rule for drug abuse in sports. If applied to representation and journalism, we'd see some massive numbers of vacancies.

GoldiloxRush#13501908/16/05; 04:43:09

I forgot. Just because free speech allows a man with a drug-addled mind to broadcast, doesn't afford me the gullibility to believe him.

I've read Goebbels "greater fool" theory, and it is my responsibilty to protect myself against such "Elmer Gantries".

If they get enough followers to self-destruct the planet, well, from what I read of the ancients, it won't be the first time!

I imagine "God" playing the role of the collegiate father:

"Too bad.
So sad.
Your Dad."

Buongiorno!yield curve#1350208/16/05; 08:44:07

Did anyone see the article in last Thursday's WSJ regarding manipulation of the 10 year treasury? One of the main points was that there is major derivitive action by speculators in amounts far exceeding available supply. The players mostly roll their positions forward, but the whole thing has the smell of a big short squeeze of the kind we goldbugs endured for many years.

Result? A flat yield curve because the treasury has been concentrating on shorter instruments (than 10 years) for funding and some of the players are having to cover in a market grown thin....

A friend had made a point that very morning about "how could gold possibly be strong without weakness in the 10 year bond?" And there the answer was, in the WSJ! Long story short, I gave him my highlighted copy, and that was the last I saw of it. Anybody else see that article and what did you make of it? My take was recent dollar strength could have been caused by a big short squeeze in treasury bonds, and perhaps a rebound from oversold condition. Our trading partners could be in on it, since a weaker dollar would hurt them--and a stronger dollar could be useful in convincing the sheeple that "all is well". Others?

Buongiorno!yield curve#1350218/16/05; 08:46:21

para 1, should read "manipulation" instead of "short squeeze"--sorry.

TownCrierGoldilox, a rethink of your opening remarks (msg#: 135014)#1350228/16/05; 08:54:29

If the government of issue (of the currency in question) does not object to its usage as predominant int'l reserve, it is surely due primarily to the benefits that accrue to them on the basis of a cheaper borrowing environment -- support for its bond market and also the "uncashed check" phenomenon.

The oversimplified reality is that our monetary system has reached a level of sophistication that the state-of-the-art has no need for the ponderously inequitable and inegalitarian reserve structure built upon the debt and currency issuance of a singularly privileged entity in that regard (i.e., a structurally-supported borrowing facility).

The less simplified tale, however, recognizes that "state-of-the-art" comes along as an evolutionary/developmental/transitionary process, and thus we are usually stumbling forward to the best of our ability while knee-deep in all the entanglements of yesterday's customs and habits.

And just as surely as the country of issue (of the reserve currency) is reluctant to change, to give up its unique privileges, so to are some of the non-reserve countries reluctant to risk changing the particular benefits that they have been able to eke out of the present system. For example, many non-reserve countries have used their support of the dollar for a weak local currency in order to enhance present economic development around their export sector -- especially insofar as it caters those exports specifically to DOLLAR-holding consumers, particulary those residing in the country of issue (dollar creation).

It would be well to point out, however, that a shift away from a singularly privileged currency (e.g. dollar) reserve structure would NOT necessarily remove the lattitude of these other countries from continuing to pursue independent "beggar thy neighbor" monetary policies if they deem a relatively weak currency to be in their national interest. Therefore, looking beyond general inertia, the most active resistance to progressive change in the international reserve architecture probably springs forth mainly from the American doorstep -- to preserve its aforementioned benefits of cheap deficit borrowing.

On the subject of resistance to change/transition, some final food for thought:

If other national central banks are employing U.S. dollars and dollar-denominated bonds as their primary int'l reserve asset, what on earth is there of qualifying use for the U.S. Federal Reserve to use for its own behalf?

Then, assuming such a suitable reserve asset could be found and put to use in the U.S. for that purpose, what force on earth could for very long prevent all other international central banks from transitioning toward employment of that same supreme asset, the King Reserve of all lesser reserves?

Keeping it simple, this is largely why you do not see the U.S. as one of the pioneers in the employment of Mark-to-Market freely floating gold as a foundation of its reserve structure.

But nonetheless, the requisite "trail blazing" has been done by Another, and others are not so dim that they won't follow as fate and opportunity best suits them to do so.


GoldiloxGold Edges Up#1350238/16/05; 09:09:47{21AEBC07-55DA-4A37-BA57-6A32BA8DB94C}


At the same time, gold futures edged higher as mixed trading in the U.S. dollar provided little direction for the precious metal.

"We've seen a nearly $10 decline in the December gold contract since the intraday day high of 455.30 on Aug. 12," noted Doelling.

"The commodity funds holding long positions are starting to get nervous and, if the market closes below $445, they'll exit the market, flooding the trading floor with sell orders," he said.

If that happens, prices "would likely push down to major support at $436," Doelling said.

At last check, December gold traded at $448.20 an ounce on the New York Mercantile Exchange, up 70 cents, after having lost nearly $4 on Monday.

Rounding out the early Nymex action, silver for September delivery traded at $7.025 an ounce, up 6 cents, while October platinum fell $11.20 to $894 an ounce and September palladium traded at $185.50 an ounce, down 75 cents.

Tracking inventories, copper supplies were down 302 short tons at 8,085 short tons as of late Monday, according to Nymex. Silver stocks were up 152,682 troy ounces at 111.2 million troy ounces, while gold inventories stood at 5.90 million troy ounces, down 482 troy ounces from the previous session.

TownCrierBuongiorno!, see last Tuesday's post, TC (08/09/05; 14:44MT msg#: 134774)#1350248/16/05; 09:11:44

Archive day is linked, scroll to subject line "CBOT aims to avoid repeat of June 10-year expiry woes"

Of note is the remark, "Separately, the Treasury is considering setting up a special lending facility to address liquidity problems."



Survivor@ Topaz, msg#: 135017#1350258/16/05; 09:22:42

You said: "At the height of foreign unrest, GWB chooses to seize the opportunity to persue leisure"

Hard to ignore the analog with "Rome burns while Nero fiddles".

- Survivor :)

GoldiloxReserve remarks#1350268/16/05; 09:27:55


Your prose renders the whole deal all so inocuous. Perhaps it is perdition rather than convenience that forces participants to "play along" in the first place.

Countries who have chosen NOT TO have seen every pressure from FOREX currency runs, tsunami (can't prove this one, but there is grounds for suspicion) to outright invasion - hardly the tools of "convenience".

Does a shopkeeper "participate" in an extortion swindle out of "convenience" or "survival"?

The fact that he adapts to the conditions are perhaps more survival than convenience.

I think Japan makes an interesting study in this regard, in that its thriving export economy grew from the ashes of war rubble. Once cheaper labor markets were developed for the trinkets and gadgets, it experienced a national deflation, clinging to its superiority in automotive and robotics to survive. It would also have not survived without an incredibly frugal savings rate, a well noted distinction from the country supplying the world reserve currency.

GoldiloxFiddle-dee-dee#1350278/16/05; 09:31:52

@ Survivor,

Not to let GWB off the hook in any way, the two latest pork laden bills suggest that Congress is in no way excused from also fiddling in the fire.

As Mammy explained in "Gone with the Wind",

"It ain't fittin', it just ain't fittin'!"

968Caleb M Fundanga: Monetary policy issues and the process of foreign payments#1350288/16/05; 10:49:19

Presentation by Dr Caleb M Fundanga, Governor of the Bank of Zambia, at the Zambian Heads of Missions Briefing Seminar, Lusaka, 19 July 2005.

"In addition, the containment of growth in money supply has contributed to this outcome. Furthermore, the anti-dollarisation campaign that the Bank of Zambia waged some two and half years ago has had an equally important role to play in the observed relative stability of the kwacha against major currencies."
Anti-dollarisation campaign ???

GoldiloxSmoking Gun - "Who's wagging whom?"#1350298/16/05; 11:32:26


System Planning Corporation designs, manufactures and distributes highly sophisticated technology that enables an operator to fly by remote control as many as eight different airborne vehicles at the same time from one position either on the ground or airborne. For those looking for an extraordinarily interesting hobby, please see photos and specs of this hardware (about the size of a small refrigerator) at Just be sure your mom doesn't catch you causing havoc with the airlines.

And, of course, I would be remiss not to mention that Rabbi Zakheim just happened to be the chief financial officer of the Pentagon one ordinary day when a news conference was held in New York City.

On September 10, 2001, Secretary of Defense Donald Rumsfeld held a press conference to disclose that over $2 TRILLION in Pentagon funds could not be accounted for. Rumsfeld stated: "According to some estimates we cannot track $2.3 trillion in transactions."

Such a disclosure normally would have sparked a huge scandal. However, the commencement of the attack on New York City and Washington in the morning would assure that the story remained buried. To the trillions already missing from the coffers, an obedient Congress terrorized by anthrax attacks would add billions more in appropriations to fight the War on Terror.

The Comptroller of the Pentagon at the time of the attack was Dov Zakheim, who was appointed in May 2001. Before becoming the Pentagon's money manager, he was an executive at System Planning Corporation, a defense contractor specializing in electronic warfare technologies including remote-controlled aircraft systems. Zakheim is a member of the Project for a New American Century and participated in the creation of its 2000 position paper Rebuilding America's Defenses, which called for "a New Pearl Harbor."


Ever since a first class flight on one of the airlines involved in 911 terror actions, I have been interested in the "remote control systems" installed on every late model commercial jet (done in 1998, according to company pilot seated next to me). The announcement of $2.3 TRILLION missing from the Pentagon budgets closely mirrors the missing HUD funds highlighted by Catherine Austin Fitts of the Solari Network, for which she lost her job and suffered fifteen years of punative litigation. In this world where arms sales dominate "foreign policy", smoking guns pop up like prairie dogs in a child's hammer toy.

How does this relate to global finance and gold suppression? Global market domination is a top priority to those who play these highest level of "manipulation games". Missing the inter-relationships is akin to diagnosing illnesses strictly from a single piece of symptomatic data.

GoldiloxAnti-dollarization#1350308/16/05; 11:38:54


In the past, when countries failed to fall into line with US dollar agenda, the Forex market promptly ate their lunch - see Asian contagion, Argentina, Brazil, Mexico, ad nauseum.

It's interesting that the foreign banks and governments seem to be approaching this current effort at dollar deflation en masse, desperately seeking "safety in numbers".

Is there a concerted effort to battle US$ hegemony, or are we witnessing a manpulation directed from within the hallowed halls of the Beltway?

DoubleEagleUp into the close#1350318/16/05; 11:43:36

I'm almost cautiously optimistic. I'd like to see silver come along too.


TownCrierGoldilox, a word on my 'innocuous' presentation#1350338/16/05; 13:18:43

Had this discussion been instead something with regard to a 'harder' science, such as physics, I am sure that in speaking of gravity, for example, I would have found it equally expedient to spare the listener unnecessary rhetoric about a particular set of kinsmen regarding their adverse attitude about aided or un-aided flight by man.

By keeping it 'innocuous', I achieve better odds at highlighting the fundamental guiding 'physics' which resides within the overarching political complexities of our social fabric.

Were I to abandon that posting guideline, I'm sure my posts would rapidly devolve into the appearance of so much whining and worthless ranting of political rhetoric as can be found easily elsewhere on the net.

If I can give you innocuous presentations of the underlying mechanics, the plain cake so to speak, then it is most utilitarian to you and to everyone else to take it as a starting point, and to bury it under as much fudgey frosting as you like, to then determine whether the underlying principle and your political perception or preference can coexist; or if not, then the pathway to reconciliation is at least within grasp -- scrape off the fudge and retry.


Topaz@Survivor.#1350348/16/05; 14:30:30

The sentence was meant more as a rebuttal of the "i before e" Rule than a profound observation Sir S, but point taken ;-)

Todays action "almost" put paid to the $6 Rule eh?

Gremlins are also at work at Nymex with the Daily Comex Delivery pdf server "down". Hmmm! hope that gets fixed shortly, I kinda like to watch the system unravel!

Topazalt diversion?#1350358/16/05; 14:53:19

The aforementioned Comex Delivery pdf should indicate a bit of covering today. How much and more importantly, how much left to clear the decks on August, will determine where PoG is headed next.
The diversion in alt/Gold is a healthy reminder we're tip-toeing outa Kansas kiddies!

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Tuesday Market Excerpts

August 16 (from MarketWatch) -- Gold futures rose almost $4 an ounce Tuesday, recovering everything they lost in the previous session as high oil prices and a varied outlook on the U.S. dollar fueled growth in demand for the yellow metal.

"Despite an onslaught of suspicious selling periods, seasonally-weak time frame and a supposed 'strong U.S. dollar', gold has managed to not only build a formable base, but [it] appears $500 an ounce is a question of when, not if," said Peter Grandich, editor of the Grandich Letter.

December gold closed at $451.50, up $3.90, or 0.9%, after having lost $3.80 on Monday.

"Gold is benefiting from a dramatically improved technical picture," said Brien Lundin, editor of Gold Newsletter.

"In addition, windfall oil profits have apparently boosted physical gold demand from the Middle East, and the onset of the buying season in India is making demand from this region an increasingly important factor," he said.

(from DowJones) -- Grandich commented that gold remains in a major uptrend on the charts. On a spot basis, significant bottoms in the metal over the last six months have tended to be higher than the previous ones, he pointed out.

"It's been able to do this - up until recently - in the face of a strong dollar and a strong equity market," said Grandich of gold's gains.

"More and more people have been recognizing the strength of this move."

There are reports of "extremely strong" physical demand, Grandich said. And, he added, this is occurring during the summer, when physical demand historically has been soft.

"That means as we get into the strong season, which is September through November for the holidays, we could expect even more," he commented.

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

GoldiloxPhysics and gold#1350388/16/05; 16:33:47

@ TC,

I apologize if one of my posts offended you. Let me attempt to clarify my intentions.

My comment on YOUR post was that it seemed to disregard some basic observations of documented banking behavior in favor of "simplicity." IMHO, this omits factors important to derivation of a valid market equation.

The post you seem to have found repugnant was a response to $Bill and Pritcho who seemed specifically interested in the investigations into that topic. The US$ is losing world confidence rapidly, and the "unexplained loss" of Trillions from two separate budgetary entities can't bolster that confidence in any way. To suggest that massive airline puts and budgetary scandals both surfacing on 9/10 are unrelated to the events of 9/11 may not be convictable evidence, but it seems too coincidental to completely ignore in the "loss of confidence" algorithm.

If we oversimplify the "world financial algorithm" and pretend that it has no political component, we disregard many a potential for strong external influences. We seem to celebrate GATA's expose of gold market manipulation, but avoid discussion of similar exposition in other markets, assuming, perhaps falsely, that they are "unrelated'.

OK, here's a real-life gold related example.

Gold rose by $3.60 today, while the US Dollar, it's primary driver, remained pretty flat, as did gold equities. This violates the premise by most financial pundits that gold and the dollar are "joined at the hip".

From the deeper political investigations of Another/FOA, we who have paid attention have good evidence that underlying political currents are beginning to divert gold from its "dollar inverse" tether. I don't think "technical analysis" offers a ready explaination for this, but world events offer some very interesting hypotheses.

TownCrierGoldilox, I was responding to this post,,, the one you directed to me#1350398/16/05; 16:38:03

Goldilox (8/16/05; 09:27:55MT - msg#: 135026)
Reserve remarks

Your prose renders the whole deal all so inocuous. Perhaps it is perdition rather than convenience that forces participants to "play along" in the first place.

Countries who have chosen NOT TO have seen every pressure from FOREX currency runs, tsunami (can't prove this one, but there is grounds for suspicion) to outright invasion - hardly the tools of "convenience"....

[and etc..]


Dollar Bill.,.#1350408/16/05; 19:16:55

TC, when you posted, I read the post like it was partially aimed at me. Maybe that indicates how much of a bill centric world I like to live in, but it was hitting lots of points that I was interested in. The knee deep, and the transitions and the grounding in gold avoidance.
Glox, I suppose we will have to wait for an Oliver Stone movie. If that farenhiet movie guy makes the film, well then I will assume there are lies in it.

PRITCHO@Topaz - -Re your 017 - - - :) #1350418/16/05; 19:28:22

Well done mate -I spotted the gist ss soon as I saw the nature of the message and the DELIBERATE mistake with the spelling "My Freind". I should have covered my A$$ by stating that there were exceptions - - thanks to luck I haven't had top learn Englih as a 2nd language!

It's only 9.21 am here in Perth & so I've only got as far as your post.Wonder if others spotted the hidden agenda?
Very funny - - I've still got a grin on.

White HillsGoldilox#1350428/16/05; 19:33:28

Hey guy, you have to quit drinking that kool-aid. Try sticking to economics you make more sense,the rest is just ranting. White Hills
GoldiloxKool-aid#1350438/16/05; 19:49:02

@My buddy White Hills,

Never Kool-aid, I want caffeine in my liquids. From now on, when I find evidence the NeoCons are screwing us at the bank, polls, and poisoning our soldiers with Uranium dust, I'll ignore all the parts that don't have $ signs in them.


GoldiloxFun with Filmography#1350448/16/05; 20:01:58

@ $Bill,

That can safely be said about any Hollywood production. That's why it's called the "city of dreams".

Was it "Saving Private Ryan" that was pulled from the networks recently for being too "graphic"? That was an interesting screenplay. They killed off an entire platoon to find one kid to send home early?

We'll know we're really off target if someone makes a movie about gold price manipulation.

mikalPower geopolitics and trade#1350458/16/05; 20:44:53

Russia and China Meld Muscle For War Games - Fred Weir - August 17, 2005
Russia and China meld muscle for war games | - Fred Weir - August 17, 2005
"Shared concerns cause nations to push aside differences"
This terse assessment of China/Russia relationship throws a spotlight on comparative power in Asia and Russian strength. Russia appears remarkably strong in relation to China and thus well poised to raise offtake in gold markets as many expect. Additionally, the various inter-Asian accords, completed and in planning, obviate the need for U.S. dollars to a greater extent than in the past. And note the mention of India, Pakistan and Mongiolia in the text. By itself this would justify the greatest possible investment exposure to gold for many people. And it certainly does compel many more when one or more of countless other fundamentals are factored in.

PRITCHO@Goldilock -- - Excellent Posts #1350468/17/05; 00:15:43

Today from you with plenty of thought.I am concerned though about post 135038 where you somehow link me in with he who sometimes misses his medication.

Hopefully you made a slip here ? -if you think not please explain :)

TopazDec too far away?#1350478/17/05; 01:44:48

Vol on the Aug Contract posted as 61 and Deliveries 51 (Aug total 7311) would indicate the Aug Contract is now trading Spot delivered ...
...well, I don't think so ...given the "average" 10k/Mth AND I'm thinking 20K +or- we may well see materialise from the Aug options.
If PoG can generate a $6 up-day in NY trading on 51 deliveries, what will it take to get 30oddK done?

At least TWO +$6 day's I'd reckon ;-)

BelgianGoldilox-Pritcho#1350488/17/05; 01:53:03

I do interprete your postings as evidence for the framework in wich the ongoing change of " gold-pricing " is taking place.

We are all supposed to percept the $-IMS to be (to remain) in what is called a Bretton Woods - II ambiance (unspoken policy). And it is exactly in this ambiance that a very particular faction (factions) of the gold-pricers are evolving. And indeed Sirs, it is not only the goldpricing that is changing.

Many astute fish in the monetary/financial/economic bowls are getting increasingly worried that "the" system (to be percepted as BW-II) is heading to a cliff (abyss). Is that cliff perhaps the USDX-80 maginot line !? Watch that chart over the past 35 years again and do some fresh interpreting.

Those particular (invisible) gold-pricers, certainly knew already for quite some time that the $-IMS was bound to go right towards te abyss. The Asian-factor...!

The gold-pricing shifts progressively out of the paper circus (Randy-LBMA stats) towards the tangible wealth in possession (property). When desertification rises, one trades less water paper contracts and starts stocking "the water" !

A lot of POG/relative-charts are saying so. But as long as the perception of the BW-II remains valid...the goldprice (not the pricing) will not sound the alarm.

Right,...this is pure A/FOA theory, once again. But isn't it happening !!!??? IT IS !

It is, because the global political changes are a juicy feeding bottom for this. And the gold-matters are only a fraction of this changes that are taking place. As goldphiles, we look into the future, without staying glued to the past.

CB-goldsales, have very little to do with "sales" but...WITH THE CHANGE IN GOLD PRICING !!! It will be when people see a dramatic new goldprice, that the consiousness of the new gold-pricing will wake up for the general public.

It is NOT "gold" (the force/power of gold) in itself that is is how we/the world, look "at" gold AND ITS PRICING, that is changing !

The same is hapening with black gold. At the of this decade w're gone look at oil in a complete different way. The "pricing" of this particular wealth-generating commidity is changing, progressively and will certainly climax.

Thanks for your great posts guys.

TopazDTFA - 2.#1350498/17/05; 02:46:13

...see previous link.

With the most active Month (Dec) -w a y y- off in the distance (currently speaking) we might just see some Backwardation in PoG in the coming days-weeks, as Futures traders lose their nerve. Just maybe!

We watch enthralled.

TopazOK, I'm exuberated.#1350508/17/05; 03:08:11

Arthurs Chart gives us a look at the maturing relationship between PoG and Comex Delivery months. Albeit unintentioned, the Channels he's included coincide nicely and are cause for (I'd think) some exuberation ...definitely the rational kind!
GoldiloxLink post # 135038#1350518/17/05; 06:29:41

@ Pritcho,

The "link" was purely topical, no table settings were planned.

cmsueWhich Country is exporting and importing of gold, world gold mine maps.#1350528/17/05; 07:28:49

Can anyone of you can give me the direction where can i find out all the latest information for 2005.
Clink!@ Sir Topaz - You're exuberant, but ...#13505308/17/05; 09:42:44

I'm just confused. What you posted looked fairly significant, but I'm not sure I get the gist of the correlation. Could you add another three or four sentences to explain, please ?

CamelDeferred payments#13505408/17/05; 09:46:15

"windfall oil profits have apparently boosted physical gold demand from the Middle East"

This brief snip from a news article maybe says a lot about the oil- gold relationship and a simple mechanism by which gold could be repriced.

Another recent news article states that gasoline purchases made by credit card are increasing 'suggesting deferred payments are part of the reason the economy hasn't been much affected by raising oil prices

"The mills of the gods grind slowly, but the grind exceedingly fine ."

GoldiloxFACTBOX-Failed overseas bids by Chinese state oil firms #13505508/17/05; 11:19:07


SINGAPORE, Aug 17 (Reuters) - Chinese state companies suffered the latest blow in their attempts to acquire foreign natural resources assets after CNOOC ((0883.HK))(CEO,Trade) failed in its $18.5 billion bid for U.S. oil producer Unocal Corp. (UCL,Trade).

The following tracks the series of setbacks faced by Chinese state firms over the past three years.

(For related story, "ANALYSIS-China oil firms need more bite in foreign takeovers", please click on [nSP208959].

QENOS IN AUSTRALIA - China National Chemical Corp. suspended a plan to bid for Qenos, a petrochemical joint-venture between Exxon Mobil Corp. (XOM,Trade) and Orica Ltd. ((ORI.AX)). The move came after it failed to secure a feedstock supply guarantee from Exxon Mobil via a future natural gas pipeline linking Papua New Guinea with Australia, a source close to the process said this month.

THAI PETROCHEMICAL INDUSTRY PCL - In July, China's state-backed CITIC Resources Holdings Ltd. ((1205.HK)) dropped a bid for Thai Petrochemical Industry PCL ((TPI.BK)), Thailand's largest corporate defaulter. Sources familiar with the situation cited the Thai government's unwillingness to sell the company to a foreign firm.

POGO ASSETS IN THAILAND - A Chinese consortium including state-owned China National Petroleum Corp. (CNPC) was in the running for Thai oil and gas assets of U.S. energy firm Pogo Producing Co (PPP,Trade). In June, Thailand's state-run PTTEP Offshore Investment Co. Ltd. and Japan's Mitsui acquired the assets for $820 million.

NORANDA INC. - State-owned China Minmetals Corp. abandoned in March a multibillion-dollar plan to take over the large Canadian copper and zinc miner, Noranda (NRD,Trade).

YUKOS ASSETS - China National Petroleum Corp. (CNPC), parent of PetroChina ((0857.HK))(PTR,Trade), might get a share of Russian oil company YUKOS's ((YUKO.RTS)) main producing assets as they were broken up, Russian officials said earlier this year. But talk of a buy-in has faded as the process became entangled with domestic mergers.

INCHON REFINERY - State-owned Chinese oil group Sinochem's $669 million bid to buy South Korea's 275,000 barrel-per-day (bpd) oil refiner Inchon failed in January.

PT MEDCO ENERGI INTERNATIONAL TBK STAKE - PetroChina was among the losing bidders last year for a stake in Medco ((MEDC.JK)), Indonesia's largest listed oil and gas producer.

KASHAGAN BID - CNOOC Ltd. and Sinopec Corp. ((0386.HK))(SNP,Trade) ((600028.SS)) were thwarted in 2003 in their attempt to buy a BG Group ((BG.L)) stake in Kazakhstan's giant Kashagan field. Existing partners of the project blocked the deal.

RUSSIA'S SLAVNEFT - CNPC failed in an attempt to buy into oil firm Slavneft in Moscow's biggest privatisation of 2002 due to political reasons.

CNPC's efforts to acquire small Russian oil firm Stimul have also been blocked by the Kremlin.

HUSKY INTEREST - PetroChina and CNOOC Ltd. tried in 2002 to buy tycoon Li Ka-shing's Husky Energy Inc. ((HSE.TO)), Canada's No. 5 oil producer, but failed to agree on a price, sources said.


Looks like all that "Monopoly Money" we have been giving the Chinese for DVDs and Flat Screens is, well, only good for board games and by some strange coincidence, Treasury purchases, as governments all around the world are telling them them "No thanks".

mdgcrenminbi revauation continues#13505608/17/05; 11:42:34

The quote for the Chinese yuan (renminbi) changed today.

The new quote is 8.094 - 8.104 to the US dollar.

It has been at 8.1011 - 8.1211 since the late July revaluation. Before that the rate had been about 8.28.

mikal@Camel#13505708/17/05; 12:02:57

Re: Gasoline purchases by credit card increasing
I would expect this to reverse sooner than expected- September is the month in which credit card issuers
are expected to double, on average, the minimum monthly
card payment. If true, a card with a balance of $8,000
currently billed @ around $200 would become a $400 bill.
Multiply this by 2 or more and you get the average increase for many U.S. card holders.

TownCrierINFLATION WATCH: July producer prices jump on energy costs#1350588/17/05; 13:12:27

WASHINGTON (Reuters) - Soaring energy costs pushed U.S. producer prices up by TWICE as much as expected in July, with core prices excluding food and energy also flashing a warning of future inflation.

Prices for finished energy goods jumped 4.4 percent, the biggest rise since October 2004...

"There are pipeline inflation pressures out there. Business pricing power continues to rise as the economy grows above trend and there are upside risks going forward that eventually will show up," said Morgan Stanley economist Ted Wiesman.

BONDS JOLTED ...the broader sense that strong U.S. growth could fuel inflation in the future startled fixed income markets.

Bond prices slipped...

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

TownCrierInflation scare drags U.S. Treasury debt lower#1350598/17/05; 13:19:11

NEW YORK, Aug 17 (Reuters) - U.S. Treasury debt prices retreated on Wednesday after a report showing July producer prices grew at double the rate forecast, suggesting the Federal Reserve will keep raising interest rates.

Price gains excluding food and energy, which the central bank monitors closely, grew at four times the rate estimated on Wall Street.

...The central bank raised its target federal funds rate for the tenth straight time last week, bringing it to 3.50 percent.

Treasury yields had spiked to four-month highs last week as signs that growth was picking up even as inflation stayed contained, sparking talk of a "Goldilocks" economic scenario.

But that picture has started to unravel in the last few sessions, with data from the retail sector falling short of expectations and many worrying that heavily indebted U.S. consumers might be starting to falter.

One major obstacle to solid economic growth is the oil sector, where new record highs have become an almost weekly occurrence.

The price of a barrel of crude touched $67 last week...

"It's not so much the inflation rate to date that is concerning the Fed, it's the underlying inflation pressures and what that might mean for future inflation," noted Josh Stiles, senior bond strategist at IDEAglobal.

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

Choose gold -- the time-tested classic hedge against suffering inflationary losses in the purchasing power of one's savings.


Topaz@Clink!#1350608/17/05; 13:24:19

Assuming you mean the manic-depressive PoG action coincident with the Comex Delivery window...
...we sit now half way through Aug on this current uptick, the Channel is far steeper than those of the previous ones and indications are that, to get it done (deliveries for Aug) we'd be looking for a "minimum" 4K more.

This is all consistent with the perceived (lo and behold Pritcho, the ie and c rule!) Bullion drought we currently are experiencing.

Little snapshot within BIG Picture though SirC! as todays action reminded us.

Aug will be good for a few more +$6 Days yet I feel ...maybe the odd +$60 ;-)

shawnisSurowiecki on Gold#1350618/17/05; 13:40:04

I was Googling "Goebbels greater fool" and came across this page.

This guy really doesn't like goldbugs. You can almost taste how he despises us.

He misses a few points on gold, though, especially on how it's the currency of freedom.

2023'inflation'#1350628/17/05; 13:51:45

In checking various charts today of US stocks I own or I am watching, I find it interesting that the US govt report out today shows increasing 'inflation' but stocks / commodities that are 'inflation' hedges are getting wacked.

Also, I wonder how much money the banksters created today to take a wack at the oil price - down over %4 to US$63.50 or so. But still the trend is up. Looking at a reverse head and shoulders chart posted on a day or two ago, the neck line was broken in the US$62 area. It would be normal to have a retreat to the neckline before moving higher. Sinclair shows the formation gives a target price around US$77.

Have a good day all.

Federal_ReservesProtect the Borders#1350638/17/05; 14:01:30

Well at least the elites in Congress are consistent. They can't protect our borders in the USA from invasion any better than IRAQ's. Richardson, declared a state of emergency in New Mexico, and the guy is part Latino! Just about everywhere you go in the USA now, illegals are flooding in looking for jobs...or a place to rob. Folks are getting FED up. Want to be President in 2008? Support a crack down on illegals....

Border emergency declared in New Mexico
Governor says area 'devastated' by human and drug smuggling

Saturday, August 13, 2005; Posted: 1:39 p.m. EDT (17:39 GMT)

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WATCH Browse/Search

Richardson discusses border security (4:27)

New Mexico
Bill Richardson
or Create Your Own
Manage Alerts | What Is This? (CNN) -- New Mexico Gov. Bill Richardson declared a state of emergency Friday in four counties along the Mexican border that he said have been "devastated" by crimes such as the smuggling of drugs and illegal immigrants.

The declaration said the region "has been devastated by the ravages and terror of human smuggling, drug smuggling, kidnapping, murder, destruction of property and the death of livestock. ...

"[It] is in an extreme state of disrepair and is inadequately funded or safeguarded to protect the lives and property of New Mexican citizens."

Topaz2023...flations 101.#1350648/17/05; 14:14:25

The only thing thats inflating here is TALK of inflation.
USAGOLD Daily Market ReportPage Update!#1350658/17/05; 15:23:05">
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.

August 16 (from DowJones) -- Gold futures got pummeled in New York Wednesday, declining with the euro and crude oil, with much of the selling said to be in the form of long liquidation.

The most-active December gold contract fell $6.30 to $445.20.

Traders have been blaming weakness on the softer euro and stronger dollar since the open. "Gold started weakly in response to strength in the U.S. dollar," said Dan Vaught, futures analyst with A.G. Edwards.

"The dollar has been able to sustain a bit of a bounce after being under quite a bit of pressure in July and early August. That got the gold market off on the wrong foot." The metal then extended its loss when a rally attempt in oil failed and the metal turned "solidly south," said Vaught.

As gold was closing, the euro had fallen to $1.2274 from $1.2364 late Tuesday and September crude was down $2.38 to $63.70.

TownCrierArchaeologists Find Ancient Treasure#1350668/17/05; 15:35:17

(AP) Aug 17 -- Bulgarian archaeologists have unearthed about 15,000 tiny golden pieces that date back to the end of the third millennium B.C. — a find they said Wednesday matches the famous treasure of Troy.

The golden ornaments, estimated to be between 4,100 and 4,200 years old, have been unearthed gradually during the past year from an ancient tomb near the central village of Dabene, about 75 miles east of the capital...

"The buried man was cremated, and then an earth mound was piled over his ashes and his riches, suggesting that he was part of these people's social elite..."

"This treasure is a bit older than Schliemann's finds in Troy, and contains much more golden ornaments," Nikolov said.

The treasure consists of miniature golden rings, some so finely crafted that the point where the ring is welded is invisible with an ordinary microscope.

"This is the oldest golden treasure ever found in Bulgaria after the Varna necropolis," Dimitrov said.

The golden artifacts from a vast burial complex discovered in the 1970s near the Black Sea port of Varna date back to the end of the fifth millennium B.C. and are internationally renowned as the world's oldest golden treasure.

---(see url for full article)---

Gold stands the test of time. Had the man been buried with his IOUs, there isn't a legal system anywhere that could enforce delivery against those contracts for the benefit of his heirs.

Choose your savings as carefully as you choose your treasure.


USAGOLD / Centennial Precious Metals, Inc.A good treasure will be as vibrant tomorrow as it was yesteryear#1350678/17/05; 15:39:11

Golden Goal

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

-- R. Strauss

spotlightInflation/gold#1350688/17/05; 16:17:35

Inflation surged today much more than expected, however the market told us (by dropping gold $5.50) that gold is a very bad investment against inflation. All those that believe the saying "Let the maket tell you" must now believe that gold is dead. All those that believe that the gold market is "managed" will ignore the market's message and rely on the fundamentals which no government or market "managers" can overcome with deceptive manipulations. CN.
Clink!@ Topaz#1350698/17/05; 18:02:55

Thanks, Sir T ! I follow your drift, now. I had just assumed these were the resonant peaks of the pennant formation POG has been in this year, and it completely passed me by. (Come to think about it, I do seem to remember someone at the Forum mentioning this before .....(!) The connection does seem to be rather striking - I wonder why there is so much higher a correlation now than in years past.
I think there is a fair chance that you will be right about the upcoming $6 days, although I would couch it more in terms of having broken out of a pennant (rather earlier than we might have expected) and are returning to the line of resistance to test it is now support. Or whatever - TA in a rigged market is more to do with the perception that the riggers want to portray. I note with a degree of resignation that the shares have been bopped especially hard just as we come up to options expiration. Same old, same old. The only consolation is that it seems to have happened much closer this month than usual. POG's strength helps, to be sure, but we can always hope !


PRITCHO@Goldilox - - - - Your 051 #1350708/17/05; 18:30:21

Not a very convincing reply -- TFN
PRITCHORe The Markets - - - From Richard Russells Latest remarks - -#1350718/17/05; 18:35:21

Richard talking plainly again - - -
My old friend, the late Elliott Janeway, one time business editor of Time magazine, once told me, "Dick, when the President is in trouble, the stock market is in trouble."

Well, right now, the President is in trouble. And the trouble is finally breaking out into the open. Strangely, it's starting with a 48 year old woman name Cindy Sheehan, who's son was killed last year in Iraq.

Sheehan has taken an anti-war stand just outside of Bush's Crawford Ranch. She says she'll stay there until the President meets her face to face. Since Bush has nothing to gain from meeting her, and a meeting could be a public relations disaster -- he's staying away. He's not going to be pressured by some 48-year old lady. But something has clicked. Suddenly anti-war groups are surfacing around the country.

The unbelievably cowardly Democrats up to now have avoided the whole Iraq situation. When cornered, they've come up with such lame answers as -- "Now that we're there, I guess we should stay there until the war is won." But it looks increasingly as though the war is not going to be won. Meanwhile, US casualties continue to build, and the situation in Iraq continues to deteriorate. Nobody knows how many Iraqis have been killed -- estimates run upward of 25,000. On top of that, Iraqi infrastructure has fallen apart. Electricity and drinking water are available only sporadically.

The Bush people's desperate answer to the gathering mess is to pressure the Iraqis to come up with a constitution, any constitution, and to build a serviceable Iraqi police force. But the Bush people are in a no-win situation. If they stay in Iraq, the odds are that they'll get nowhere except to build more casualties. If they leave, it will appear that they've lost, and Iraq will probably splinter and fall apart. Actually, if the Americans leave, it looks increasingly as though Iraq will dissolve into civil war.

Worst of all for Bush, the latest polls show that only 35 percent of Americans now believe that we should never have attacked Iraq in the first place.

Thus Bush's dream of being "America's War President" and of finishing what his dad failed to do -- is turning into a military and a political nightmare. Bush would have done well to study the "law of unintended consequences."

TownCrierThe ore, the mining, & the poor#1350728/17/05; 19:47:18

The majority of the world's gold comes from some of the poorest countries, but local mining communities often reap just a fraction of the riches that lie beneath their soils. Mali is no exception. The West African nation ranks near the bottom of just about every U.N. development indicator, even though its the world's ninth-largest gold producer. The southern village of Sanso struggles to capitalize on Mali's gold rush.

Sanso's Mayor says the Morila mine has brought little to the village.

...But rural communities like Sanso are beginning to negotiate for a fairer share of the country's gold wealth and to make foreign mining companies accountable for potentially devastating, long-term health and environmental damages from their operations.

The Morila gold mine also offers a cautionary tale for villages once united in poverty, and now divided by wealth.

...the mine has created jealousy and enormous divisions among villagers who have profited from the mine and those who have not.

...during an earlier power-point presentation at Morila's air-conditioned headquarters, Mr. Toure said the mine has already invested $1.2-million in a hodgepodge of development projects. Besides the schools and mosque cited by mayor Mariko, he said the money has been spent to upgrade a local health center, and build community gardens and a rice paddy.

While Morila and its miners' quarters are lit up at night, Sanso, about seven-miles away, has no electricity or paved roads.

And while some villagers, like Chary Mariko, 27, have found well-paying jobs at the mine, many others have not.

Mr. Mariko said working in the mine is very difficult. He works a 16-hour shift and then gets two days off. He says he has not suffered any health problems mining at Morila. And his 300-dollar monthly salary represents a small fortune in Mali, where the average per-capita income is 250 dollars a year.

...Across the globe, communities are taking a growing interest in local gold mines. In Peru, Indonesia, Ghana, and elsewhere, they are demanding better pay and better environmental and health standards, although not always successfully.

Striking miners at Morila last year got the mine to establish a $500,000 community development fund to be tapped after the mine closes in 2011.

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

When the mine finally reaches its point of exhaustion and closure, the local community may (or may not) have achieved an overall improvement in local wealth and infrastructure. What will investors have received by the holding of their shares? In the end all mines eventually dwindle to the exhaustion point, and as they do, share prices tend to reflect that eventuality.

Choose to get your hands on their product while the getting is good. For how much longer will labor be so relatively cheap, and the supply what it is today?


SundeckSons of Gwalia - Results of a toxic hedge-book#1350738/17/05; 20:15:30

More on this will be coming out over the next few days, including details of the toxic hedge-book that lead to SGW's demise. (Details in "Subscription Only" articles in today's Aust Fin Rev).

...the results of gambles-gone-bad in the great big papery derivatives casino where (not) everyone emerges a smiling winner!


GoldiloxShare bopping#1350748/17/05; 21:18:23

@ Clink,

"I note with a degree of resignation that the shares have been bopped especially hard just as we come up to options expiration. Same old, same old."

If you're right, Friday Noon to 4PM is the time to buy them back. Most were looking pretty "toppy" in the last week.

If you're also right about the shortening time frame, one of these expiry days the options writers will be burned. Most of them employ the strategy that they will be right 90% of the time and cover themselves by buying a cheap call at the next exercise point to limit their losses.

As my Pappy used to say, "IF is a mighty big word for only two letters:

Topaz@Clink!#1350758/18/05; 04:43:20

Why you ask, dunno, but try this on and see if it fits.

The Market - in a deteriorating economic climate, will naturally ebb toward Cash and Gold. The Cash at present is $/Oil and the Gold is Bullion...
...hence the Dollar run-up from Jan, and anecdotal Gold shortage, driving Gold accumulators to shop @ Comex.

Our pricing of the various markets is at present, by and large "futures" rather than "Spot" determined ...and Comex likes it that way but, to maintain the appearance of a "market" in Gold, they have to put Gold on the Line every couple of Months ...and WHACK!
If this trend gets out of hand, our out-months will go into backwardation as "faith" in the markets ability to determine Spot ...and time component (ie: the wait until - say - December) ..are BOTH discounted.
The upshot could well see Gold "price" plummet ...with Bullion being unavailable to market.

Odd?... slim chance? maybe,...but perfectly logical in this current environment.

I've been fixated on Comex since March Sir C! and Gold is doing exactly as I've been expecting.
Silver? we won't mention Ag 'till Sept's misbehaving.

There Randy, I didn't mention the D word once!

GoldiloxNasty Fractal Scenario#1350768/18/05; 08:22:21


"George, is the global economy at the brink of a breakdown much greater than its predecessor in 1929? How do the current imbalances compare to those late Roaring Twenties' similar circumstances of consumer-level forward consumption, debt, overvaluation of assets, and industrial overcapacity? Will the devaluation and asset decay process at the end of the second 70 year sub-fractal - contained within the 140 year Second Grand Fractal cycle beginning in 1858 - be greater than at the end of its first 70 year sub-fractal?

A chicken in every pot and two cars in every garage has been replaced with eating out three of seven nights at the plethora of fast food and dining opportunities that 'froth' the highways and typify the service type of economy the States have become. Three SUV's and a Hummer distributed between a primary residence and an investment residence have superseded the two cars in a garage. Buy a radio or washer on credit has been bested with buy and buy with abandon everything imaginable with ubiquitously facilitated debt from refinanced or second mortgages based on the surety of ever appreciating house prices -the latter caused in part by fed fund rates 1/4 of the rates in 1928.

The evenly balanced declining and increasing annual GDP growth rates prior to 1929 have been replaced with continuous positive annual GDP's growth rates during the past 45 years. The great creditor nation status of 1929 has been substituted with a beggar man debtor bravado country wearing only the emperor's new clothes. Its treasury is writing bad checks against future income that can only be guaranteed if the remaining 57 percent of the US private (nongovernmental) work force becomes governmentalized allowing a Weimar type of hyperinflation. In short the consumer saturation point of 1929 looks very appealing against the very poor economic hand that America now holds. Consider America's current financial balance sheet and thereafter consider how badly the unbalanced excesses of 1929 unfolded.

In the next nine weeks, data - which has always been there - will be re-recognized. GM's and Ford's junk bond status and their probability of default on a collective 450 billion dollars of debt will reappear. The thousand mirrors that reflect a single dollar in the derivatives markets will have key reflecting glasses broken erasing the image in 925. The housing bubble, that is so historically remarkable in its uniqueness in that virtually all know it to be a bubble, will crack. The microcosm of forward consumption in the last two months of the American auto business will witness the expected necessary microcosm of historically poor follow-on monthly sales. Major airlines will throw in the towel declaring bankruptcy and pension amnesty. Declining monthly GDP will receive attention. The real position of the individual debtor and the debtor country in the face of declining asset valuations and projected tax revenues will get its due. Fiscally impossible city and state governmental pension funds whose futures are tied to the equity markets and escalating real estate property values will have a viability reality check. For the first time in many years the concept of consumer retrenchment will be seriously and widely explored as a probable scenario.

The comparative initiating decay fractals at the secondary summit, with respect to March 2000, of US equity indices suggest a very remarkable primary revaluation. Watch the general trend and descent of the long term US note and bond debt markets as exiting money from equities and commodities flows into these long term debt instruments driving their interest rates lower. Gold has potentially only one more week before completing its maximal 12/30/30 weekly growth cycle with an abrupt devaluation. Opposite to gold, the dollar will transiently trend well. Expect the unexpected. Within this quantum fractal decay process, expect nonlinearity.

Gary Lammert "


I'm not going to blindly accept all his predictions, but they're worth reading, as his studies link some very real issues. I'm going to try to compare Tim Wood's Cycles work to this cycle description and see if they jive.

It's interesting that major prognosticators are beginning to diverge wildly as we move into what looks like a very volatile autumn market. October, with its storied SM history, always seems to carry the spectre of "readjustment" on its shoulders..

GoldiloxGETTING TO THE "CORE" OF INFLATION PROPAGANDA#1350778/18/05; 08:33:09


Yesterday the Labor Department reported that July Consumer Prices rose by .5%. Today we were informed that July producer prices rose an even sharper 1%. Though these are very serious numbers, indicative of a chronic inflation problem, Government officials, Wall Street strategists, and the financial media tell us not to worry. Excluding energy prices, the so called "core" CPI rose a benign .1% and the "core" PPI a somewhat less benign .4%. Measuring inflation while excluding energy prices makes about as much sense as dieters weighing themselves while excluding all the fat around their stomach, hips and thighs. Just how did this ridiculous concept get started in the first place?

Food and energy prices have historically been quite volatile, up big one month, down big the next. To prevent economists from jumping to erroneous conclusions the concept of the "core" CPI was developed. It has been argued that by looking at the monthly numbers without these volatile components, economists get a more accurate read on the true impact of inflation on consumer prices. Excluding food and energy in no way implied that such prices were not important components of the indexes, just that their prices tended to be more volatile, and hence less relevant on a monthly basis.

In 2002, when oil prices began their steady ascent from $20 per barrel, the common wisdom held that the rise was a temporary phenomenon based on global terrorism and the build up to the Iraq War. As a result, economists began ignoring the actual CPI in favor of the "core" as everyone knew that rising oil prices were a temporary phenomenon. Based on that false analysis, at least it made some sense to exclude rising oil prices, since the belief was that higher prices would ultimately be reversed. However today, with oil prices above $65 per barrel, and more economists having resigned themselves to the inevitability of even higher oil prices in the future, why is anybody still looking at the core?

Since 2002, oil prices have been anything but volatile. They have in fact been quite predictable, rising steadily for four years. In such an environment, excluding them when measuring inflation is a farce. Yesterday, CNBC showed a graphic which revealed the divergence between oil prices and the over-all CPI. Though historically the two have been highly correlated, recently they have diverged. CNBC's conclusion was that the U.S. economy was now so efficient that oil now has less influence on over-all consumer prices. Far simpler and credible an explanation is that either the data is being manipulated, or the lag between rising oil prices and rising consumer prices in general has lengthened.


I have to agree here. "Volatility" is NOT defined as measure increase, but rather "cyclical ups and downs". The BLS and FED "big lie" has been based on previous, but no longer relevant assumptions, to aid the accompanying political slumber.

GoldiloxDON'T LOSE FOCUS!#1350788/18/05; 08:36:41


Gold is definitely looking exciting on the charts!

But already as we watch gold rise closer & closer to breaking its 20 year highs we hear "Oversold!", "Oversold!" being shouted by pundits. Is gold over sold right now & due to come back down a bit? A good question to ask & my answer to this is – "So what?"

"…the outlook for gold remains positive despite recent dips in the gold price. The prevailing opinions were supported by a recent study, released August 9 by commodities consultant CPM Group. In its Gold Survey 2005, CPM said the market is still benefiting from the most sustained investor buying in at least 60 years…" The Gold Report,, 8-11-2005

Let me put in a plug here for "The Gold Report " as this is an excellent source for gold market related news & is published by the respected & successful Streetwise, Inc. Anyway, the point to be drawn by gold's present price action is that a new trend & a new long term trading range is slowly & methodically being established.

The temporary swings & oscillations are less important & are really irrelevant to the simple fact that ultimately gold is heading much, much higher. Just as the hand on a Grandfather clock swings back & forth price oscillations are to be expected, but it is the formation of the longer term higher trading range that is the important fact to understand.

"Dr. Clive Roffey, editor of Gold Action, recently told readers that he was classifying the recent correction in gold shares as "a minor breather in a continuing bull market and am looking for the gold stocks to move to new highs. The resource stocks keep on moving and I expect to see continued new highs across the whole of the resource area," said Roffey." The Gold Report,, 8-11-2005

Probably more money is lost by those who try & to establish an exact top & an exact bottom to a market. What is that old saying about those who don't see the forest for the trees? I think wisdom necessitates us looking today at the overall forest and not the individual trees. And I see an entire vast forest growing on the horizon as gold climbs in the long run to new highs that will in due course bring a ton of new campers into the woods.


And now a view from the "other side" of the forest . . .

GoldiloxAre we endangered by a new Savings Paradigm?#1350798/18/05; 08:47:39


'One Account' Blurs Savings and Mortgage debt

The new savings paradigm is most apparent in the design of a relatively new financial product called a "One Account" released about two or three years ago by banks and financial service companies in the UK. The idea of the "one" account is that an individual does not need two separate transactions, one a mortgage loan, the other a savings account. Normally, if a homeowner keeps them separate, the savings account proves inefficient. The individual is in effect giving the bank his savings and then borrowing it back at a higher rate of interest.

Why pay a "spread" on your own money? What the "one" account does is to give the individual a mortgage, but with flexible repayments (within certain broad limits.) This way, if there is extra cash at the end of the month, the individual simply pays down his mortgage, thereby increasing the net equity in his home. If in the next month he needs money, he increases his mortgage debt somewhat. So long as at the high point of each year, the debt stays below certain pre-agreed limit - which are related to a normal amortization schedule - the lender is happy. From the individual's standpoint, the beauty of this scheme is that he is paying off the more expensive mortgage debt. The reduction in interest expense provides a better return, than the saver would get from interest on a savings account. And the 'one' account may also reduce taxes, since there is no savings income subject to taxation. (This type of account works best when the mortgage debt, or the least a portion of it which can be prepaid and reborrowed, is at a floating rate.)

This type of loan flexibility has helped individuals to think about savings in a more powerful way: The real challenge is to increase one's net wealth, not just the balance of their personal savings accounts. And this notion has helped them to see their homes as a vehicle for savings. It is obvious that increasing net equity increases their wealth. And home equity is increasingly liquid wealth too, because there are myriad financial methods (remortgaging, equity release loans, selling-to-rent) for releasing that equity. With this liquidity achieved quickly and cheaply, equity-in-the-home becomes almost indistinguishable from equity in a savings account or in a securities account.

Government officials and their economists may be out-of-date, if they think that the balance of a savings account matters to the new breed of Home-Equity-Savers who have grown up in our age of quick-and-easy financial services. Logically, most people will put their efforts into increasing their aggregate wealth, more than trying to hit some mythical cash savings target. Ironically, in a time of soaring property prices, this objective has encouraged many to borrow even more money in order to buy a bigger house than they need, or a second property, in the hope that the value of the larger property investment will increase, pushing the investor's net equity to a higher level. And what's wrong with becoming a landlord? Particularly, if the amounts to be received in rentals, exceed the amounts paid out as interest. It is not only big hedge funds who can enjoy the benefits of a "carry trade." So we see that, the new wealth paradigm has the impact of increasing debt and reducing traditional savings.


Financial experts have always warned "Don't put all your eggs in one basket". For the vast majority of homeonwners, home equity is their last remaining basket. It seems wonderful as long as hyperbolic FED liquidity increases remain intact. Any "crack" in the FED dyke will likely crush those with single basket scenarios. The "mortgage miracle" is more and more resembling the Pied Piper's siren flute!

The HoopleGoldilox, rotten to the "core" numbers#1350808/18/05; 09:44:40

Orwellian statistics indeed- wouldn't it make more sense if food, energy, and housing WERE the core- and dvd's and all non-essential imported stuff non-core? I have maintained for years that if they stated true inflation in these CPI/PPI numbers entitlements would already be bust. Same for pensions and retirementss tied to cola's. Apparently many others are now agreeing according to the CNBC poll I just saw. 77% said they thought CPI understates inflation while only 17% thought it overstates inflation. Gold and bond rigging is paramount to the success of this fraud. Can't have gold at $2,000 if the CPI is "tame" at 2.3%. No 30 yr. bonds at 84 either. And then there's that whole housing bag of worms if Fannie's derivatives by the trillions implode. To me wealth destruction is the only option elitists have for us. Their goal is for as few as people as possible to realize it's happening to them. In that regard CPI's and PPI's are sort of tranquilizers. I prefer to be non-medicated.
USAGOLD / Centennial Precious Metals, Inc.Especially designed for those who are taking their first step...#1350818/18/05; 10:27:26">gold ownership starter kit
Goldilox"Core" numbers - Cost of Living (and dying) indices#1350828/18/05; 10:46:36

@ The Hoople,

Yes, the entire idea of "core" inflation is an anachronism whose time is long past. The items deleted from the "core" calculation make up about 90% of the "living" expenditures of working households. Housing, Energy, Food, Medical? What else matters to millions of people living from paycheck to paycheck? Oh yeah - back to school clothes.

I know. Let's have an inflation index that only measures the flow of "discrestionary" expenditures, as the other items fall into the same category as "death and taxes".

Speaking of the macabre, the SM "winners" in this sideways shuffle are tobacco and "defense" stocks. Wanna make big money? Buy the stocks of companies whose product is population extermination!

Today everyone is watching the Vioxx trial to see if Big Pharma's purveyors of death and disability will fare as well as tobacco in the "Kangaroo Courts".

Look to the public funeral companies for big returns - there's no discounting in that market!

Clink!@ Topaz#1350838/18/05; 11:13:26

Well, that is certainly Another view of things. Maybe one of the whacks will just keep on going down. When I read the Trail, I wondered what clues there might be to the approach to that Awful Liquidity Crunch in gold futures - you may have come across one of them.

Clink!@Goldilox#1350848/18/05; 11:27:18

Well, that would be the theory, but I'm not betting the farm on it (just a couple of acres :^] ). Of probably more importance is to see where the balance of the open interest is and look at the share price with respect to that. If they are the same, I wouldn't expect to see much change before expiration - after all, don't derivatives make for smoother market operations ?!

About the CPI, it has just occurred to me that if the CPI is more a measure of discretionary expenditure, it is an even worse guide to real inflation than I thought. As expenditure in the real essentials squeezes out the money available for the discretionary items, these items will lose their pricing advantage, putting a further deflationary spin on the index. If everything is on sale, maybe we'll get a 5% "special rebate" on the CPI. Or maybe the same bank rate as the "employees".

Goldiloxderivatives#1350858/18/05; 11:46:37

@ Clink,

I usually watch the OI carefully, paying particular attention to the put/call ratio. A high bias one way or the other usually suggests that the sellers will pound accordingly near expiry.

As miners are subject to the price received for their product, both company and commodity fundamentals factor into the equation.

The HoopleClink!#1350868/18/05; 11:49:06

Essential spending crowding out discretionary spending, putting further price pressure on "core" items you say? Kinda like measuring housing inflation with imputed rent. The bigger the housing bubble the more it drives DOWN the rent, hence CPI. Which is about 24% of the whole index. They are clever little deceivers aren't they? If rents ever begin rocketing they'll then go to real estate value basis and capture the entire housing crash as "deflation". George Orwell meets Rube Goldberg.
GoldiloxEmployee rate#1350878/18/05; 11:50:13

@ Clink,

If everything is on sale, maybe we'll get a 5% "special rebate" on the CPI. Or maybe the same bank rate as the "employees".

I caught this one on the second read (after caffeine). Too funny. We may get the employee rate, but we'll NEVER get the "bank rate".

Your "hedonic" evaluation of the inflation numbers is probably right. You should copyright that one!

GoldiloxGold defies pressure from dollar rise#1350888/18/05; 12:09:30


AN FRANCISCO (MarketWatch) -- Gold futures edged higher Thursday, defying pressure from a stronger U.S. dollar after a more than $6-an-ounce drop in the previous session.

At last check, disappointing European economic data and demand for U.S. Treasurys spelled strength in the dollar against the euro on Thursday. See Currencies. Strength in the dollar usually eases investment demand for gold.

But the "trend in the dollar is still down and the market is just testing the resolve of the dollar bears at this time," said Dale Doelling, chief market technician at Trends In Commodities.

Given that, "the long-term trend remains positive for the precious metals and traders will eventually see that [Wednesday's gold-price drop] was nothing more than a tremendous buying opportunity," he said.

December gold was last up $1.70 at $446.90 an ounce on the New York Mercantile Exchange after dropping more than $6 in Wednesday's session.

Silver for September delivery traded up 1.2 cents at $7.005 an ounce.

GoldiloxCalif. home buyers stretch to afford homes - study #1350898/18/05; 12:25:16


August 18, 2005 12:15:33 (ET)

By Jim Christie

SAN FRANCISCO, Aug 18 (Reuters) - Home-ownership in California has increased to a level not seen since 1960 but it is coming at a high cost and risk for home buyers, according to a study released on Thursday.

To keep up with soaring home prices, Californians are setting aside a dangerously large share of income for house payments and taking on risky mortgages, according to the Public Policy Institute of California.

It found 52 percent of Californians who bought a home in the last two years spend more than 30 percent of their total income on housing and 20 percent of recent home buyers spend more than half of their income on housing.

"That gets to be problematic," said David Yeske, a certified financial planner in San Francisco and past president of the Financial Planning Association. "When your mortgage represents that percentage of your income, you've got no room for error if some other expense comes along."

California home buyers are assuming such risk because lenders have relaxed lending standards. That has helped lift the state's homeownership rate, or the percentage of households owning their own homes, to 59 percent, compared with a previous peak of 58 percent in 1960, according to census and other data compiled by the Public Policy Institute of California.

"Higher debt-to-income ratios are possible because more and more lenders are foregoing the fiscal practice of limiting housing costs to no more than 30 percent of income," according to the center's study. "Instead, they are qualifying buyers for loans that consume 40, and even 50, percent of their income."


Lenders have little choice. The percentage of households able to afford a median-priced home in California is shrinking and closing on a record low 14 percent set in the summer of 1989, according to the California Association of Realtors.

The minimum household income needed to buy a median-priced home at $542,720 in California in June was $125,870, based on an average mortgage interest rate of 5.71 percent and assuming a 20 percent down payment, according to the realtors group.

A year earlier, the minimum income needed to buy a median-priced home in the state was $111,420, when the median price of a home stood at $468,050 and the prevailing interest rate stood at 6.01 percent.

"People are stretching, doing whatever they can do" to buy homes in California, said Beth Haiken, a spokeswoman with mortgage insurer The PMI Group.

That includes taking on interest-only mortgage loans, which carry long-term risk should their low interest rate components expire during a period of high interest rates.

"We're concerned for borrowers because they may not fully understand what may happen," Haiken said. "In three or five years, we may be in a different credit cycle and they may not be able to refinance as easily as they expected."

Last year, 46 percent of loans used to buy homes in California had interest-only components, up from 23 percent in 2003, according to LoanPerformance, a mortgage research unit of First American Corp.

"In the San Francisco metropolitan statistical area, that percentage was 59 percent. San Diego was 62 percent," said LoanPerformance spokesman Bob Visini. "It's really being driven by affordability."


Buy now, pay later continues to increase the risk factors and the number of buyers "out on a limb". This will end ugly!

TownCrierDelhi to cut VAT on bullion#1350908/18/05; 13:12:55

New DelhiAugust 19, 2005 -- Desperate to woo back bullion trade, which has shifted to low tax-regime states such as Gujarat and Rajasthan, the Delhi government is firm on cutting value added tax (VAT) rates on precious metals to 0.25 per cent if the VAT panel fails to make other states raise tax rates to one per cent.

"This time, we will not wait beyond August 24 for VAT panel to take a decision in this regard. We have lost almost all of our trade in bullion to Rajasthan and Gujarat because of lower tax in these two states," said Delhi finance minister A K Walia.

The state will lower VAT to 0.25 per cent from one per cent in line with sales tax in Gujarat and Rajasthan in case no agreement is reached in the empowered committee meeting, he said.

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

It's always nice to see occasions where market forces and politics work together to bring about an improved structure. And in this case, I refer to the reduction of VAT on bullion further toward the zero-percent ideal.

Should give you hope that it is only a matter of time before these forces continue their favorable work in this arena and manage to move the pricing mechanics toward the physical-based ideal.


otish mountainBelgian Re: S. African miner's strke#1350918/18/05; 13:37:43

Last week you made a remark about the ending of the miner's strike but did not expand any further.
I'm interested on your "take" for what I thought an abrupt ending of this dispute.
My impression was a settlement was forced quickly by big money.
I had thought this strike would be a long drawn out affair, I didn't know miners were deemed an essential service.

TownCrier'flation#1350928/18/05; 13:51:30

JOHANNESBURG ( -- On August 8, following a meeting on interest rates, the South African Reserve Bank (SARB) cited inflation fears, underpinned by record crude-oil prices, as the key reason for why core interest rates would not be cut.

...SARB cut its core rate progressively from 13.5% on June 13, 2003 (during a year when crude oil averaged $29 a barrel) to 7% on April 15 this year, when crude oil was well on the way to this week's multi-decade record above $67 a barrel.

Measured in today's money, crude was around $85 a barrel (the highest since 1865) during the 1980 crude crisis.

After the 1980 crisis, the world took a new look at energy efficiency; today it takes half as much energy to produce one unit of economic output (GDP, gross domestic product) than in 1980. But is it that simple? This week, the Wall Street Journal laughed off the US's producer price index (PPI) increasing at a crudely annualised rate of 12%...

While the July figures for the US were scary to some, at, James Cramer said that US inflation peaked with the "spike" in PPI. Investors should no longer be focused on inflation, Cramer argued, "they need to keep an eye out now for recession. Although we're not in recession mode yet, we're in deceleration mode."

For investors, the bellwether stock for measuring the impact of crude oil prices is Wal-Mart, the world's biggest retailer. On Wall Street, the stock price is down nearly 20% this year...

...many of its customers fall into the US's blue-collar paycheck-to-paycheck market. But is modern inflation – or more precisely, its instruments of measurement - all it is cut out to be?

In the past ten years, the total cost of living in Britain has risen by just 14%. However, changes in individual constituents vary massively: school fees have increased 62%; hairdressing has risen 58%, holidays are up by 52%, and eating out is 33% more expensive.

It is the prices of mass-produced manufactured goods that have fallen enormously: prices for clothes are down by 42%, shoes by 31%, and consumer electronics by 63%. The price falls are almost fully attributable to the entry of the world's "engine room," China, to the world economy.

However, Chinese demand has increased prices for items where the world's most populous country lacks legal infrastructure (benefiting financial services) or where the goods or services are non-tradeable (housing and education), or which must be partly or fully imported (crude oil being the leading example).

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

TownCrierCentral Bank Gold Agreement sales limit breached#1350938/18/05; 14:11:22

LONDON ( -- The latest figures from the European Central Bank suggest that the total tonnage sold to date in this, the first year of the second central bank Gold Agreement, have reached 506 tonnes against a limit of 500t.

...If we can assume that sales are now likely to drop right away, then this does alleviate potential overhead pressure on the price.

It is perhaps worth pointing out here that official sector metal is a boon rather than a bind to the gold market, especially now that there is an element of transparency about some of the transactions.

To illustrate: annual gold fabrication plus bar hoarding demand in 2004 was 3,410 tonnes against physical supplies from the mining sector (net of dehedging) and scrap of 2,850 tonnes (GFMS Ltd. figures). This produced a shortfall of 560 tonnes or 10.8 tonnes per week, much of which was met by net official sector sales.

The market does actually need this material to come out if prices are not to gallop higher to reach the appropriate market clearing level and cause disorderly conditions - which could have repercussions on long term stability.

Example: after the frantic conditions of 1979 when prices doubled over six weeks, culminating in a spot price of $850 on January 21st, demand dropped like a stone (allied with heavy scrap return in the early years) and it took until 1986 before fabrication levels of 1978 were regained.

Furthermore a disorderly gold market sends distress signals to the rest of the financial sector, especially given the amount of liquidity available in gold.

It is also important to note that it is not necessarily clear how much of this has come straight into the market or how much has been sold to other members of the Official Sector – it is perfectly possible that some of these sales are transfers between CBGA signatories and other official sector bodies, which means that not al the metal necessarily reaches the private market

^----(article at url)----^

To be sure, much needs be done as paradigm shifts are particularly challenging for those attempting to maintain "orderly markets" through the progression.


TopazWell Done USAGold ...and Clink!#1350948/18/05; 14:18:54

Congrats on the "Starter Kit" promo Gents ...every home should have one!

Sir C! ...this is good: -
As expenditure in the real essentials squeezes out the money available for the discretionary items, these items will lose their pricing advantage, putting a further deflationary spin on the index.

When considering the impact on inflation these items we assume as "essential", energy and whatnot, we need to balance this against an economy which is essentially "discretionary" biased to wit, the enormous impact of China and the spawning of a "discretionary" domestic workforce we've been witness to these last several yr's.

I'd be inclined to think that by insulating CPI from these essentials, given aforementioned discretionary bias of the Economy, we're actually "overstating" the inflation number rather than the other way round.

TopazKeep diggin Boys!#1350958/18/05; 14:40:46

Comex miners managed to dig 200 odd contract equivalents today before the stope fell in.

With only 7500 CE's now done for Aug one thing's for sure, they'll be back on the tools tomorrow!

Dig my pretties ...D I G !

USAGOLD Daily Market ReportPage Update!#1350968/18/05; 15:19:58">
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.

August 18 (from MarketWatch) -- December gold fell 50 cents to close at $444.70 an ounce on the New York Mercantile Exchange. But the contract traded as high as $447.70 earlier after dropping more than $6 in Wednesday's session.

"As far as today's trading goes, gold's early rebound is an indication that the bull market trend is intact, and that the contribution of higher energy prices to the metal's rally was marginal, at best," said Brien Lundin, editor of Gold Newsletter. ... But now, "the underlying support for gold has been outside of the speculative arena, with physical demand emanating from buyers with longer-term views," he said.

"Oil money from the Middle East, as well as seasonal demand from India are certainly strong contributors to the recent surge in gold buying," said Lundin.

Even more demand stems from investors who are looking six months to a year down the road, and "seeing a slowing U.S. economy and the end of the Fed's rate-hike campaign," he said.

In that scenario, the investors "don't see gold trading for anywhere near today's prices," he said.

Indeed, for the moment, "gold continues to find good demand from the physical sector which will no doubt increase as we head into the festival season in India and the Middle East," James Moore, an analyst at London-based, wrote in a note to clients.

Dale Doelling, chief market technician at Trends In Commodities, said "the long-term trend remains positive for the precious metals and traders will eventually see that [Wednesday's gold-price drop] was nothing more than a tremendous buying opportunity."

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

melda laureOil to stay in the 60$'s for years#1350978/18/05; 17:40:01

But it's not the fault of peak oil! So now Goldman sachs makes it official! It's the oil explorers fault, (those lousy cheepskates) they just wont get off their duff and go spend the bucks to find some more. Never mind that there's precious little to find and that Matt Simmons is saying the cost to put a new barrel per day of production on line is from $20,000 to $40,000 per barrel. Hmm, that's 40 billion dollars per million barrel per day additional supply. A mere pittance for an enterprising chinese Boon Pickens.

But, hey, spread that over an oil field lifespan of a hundred years and that's only 75 cents!

Maybe they should take a page from the miners. What spectacular new find has come to light in the last four years? Where is the new "south africa" to replace the old?

"`Reinvestment rates if anything appear to be falling not rising,'' the report said. Higher taxes, a shortage of rigs and workers and a lack of available oil and gas reserves are all driving up costs, the analysts said. "

Maybe Iran really DOES need those nuke plants. They'll be using steam injection to power the suction to grab the last 20% that wont flow naturally. And blowing $20,000 per barrell for a site that will last 3 years, not 100. Either that, or they'll be using Juan Valdez and his burro to turn the wheel. Somebody tell me again why we want to invade this silly little country?

But dont worry, there's plenty of oil left. And there's plenty of gold under Johannesburg, if you're willing to dig down 20km.

Give my regards to the balrogs lads, I'll buy mine from the gift store, thank you.

mikalTrigger?#1350988/18/05; 21:04:40

Several posters here and at other forums have comented they
now saw a window for an exogenous event. A trigger may have occurred tonight as FT(Financial Times of London) is now reporting that Saudi forces have killed a top-ranking Al-Quada figure. Also in the news are the ongoing China/Russia land and sea exercises and the UK is
making official plans for dealing with Bird Flu pandemic.
And many pension and hedge funds await obligatory end-of-month and end of quarter acccounting reports and revelations, as do many corporations, REIT's, banks, insurers and sundry government, mutual and investment funds.

mikalU.S. financial obligations necessitate a golden rescue#1350998/18/05; 23:51:40

A winner. Contains many of the Ed's best ideas and suggestions backed by expert presentation of official data.
Though strong warnings about a future U.S. may go
too far for some, a need for gold and sensible preparations is aptly conveyed.

Belgian@ Otish mountain#1351008/19/05; 00:25:21

Bear in mind that the SARB still is an AA ruled institution with a gold-mission/task (simplification).
The (general) strike in itself and the ending were indeed a surprise.

All the participants in the so called Bretton Woods-II management, need to contribute their particular share in the orderly deroulement. Avoiding any goldmetal shortage (bottleneck) has become a task of utmost importance in order to continue this BW-II management.

Gold-pricing and the goldprice itself are a pillar on wich this BW-II management does rely.

Daan Joubert (GE) has some real nice pictures of the long term USTBs. These giant triangles, with their peak in 1980, shows you the pattern of the BW-II during the past 3 decades. Add the long term charts of the POO/POG/Dow/Money Supplies...and conclude that all these patterns already have and are in the process of "change"...Big change.
The BW-II management cannot run the risk to have any "disturbance" on the gold matters. NOW MORE THAN EVER BEFORE...and it (this worry) will not go away. On the contrary (read TC's 2 posts).

The actions are NOT in the interest (well being) of the mineworkers/goldmines...but exclusively in the BW-II interests ! Remember IMF goldsale hullabaloo.

In other words...more goldmetal has to be "mobilized" as to keep a high enough level of liquidity for continued gold(pricing/price) management. And South African's goldmetal output is steadily declining. A long and general minestrike (especially in SA with its goldservice-oriented SARB) would be extremely unwellcome to the (AA) BW-II management.

In this context, also note the following : Putin wants the internationalization debate on Irak started...coupled with the condition of a withdrawel of the occupying force. Gazprom wants the control of Sibneft and Russia has now quasi Saudi status on oil/gas matters.
Note that oil is not included in the WTO regime and the WTO regime imposes draconian free-market rules on trade...EXCEPT for oil AND currencies !
Some-body has to take care of the gold-management too !!!

Back to this giant triangle patterns (45 yrs) and their paek in 1980 (gold's ATH) : When such a clearcut pattern has been completed...a new pattern must start its formation. And guess what...the goldprice pattern already did !!! This is very alarming for the BW-II fellas.

And as I mentioned increasing amount of astute BW-II observers and insiders are getting very worried (anxious) about the global (derivatized)situation...risking to become UN-manageble !

And as a sidenote, bear in mind that CBs are very often indirectly involved in (organized) general strikes and the negociations ! A very complicated world indeed, Sir. But sticking to your goldmetal property is as simple as cake.

GoldendomeOil production and export disruption#1351018/19/05; 00:42:25


Protesters demonstrating for more equitable distribution of oil revenues have shut down production and export of oil from this Northern South American country.

Ecuador, a small producer by some world standards, still has been exporting around 150,000 barrels a day of crude oil, mainly to the United States.

Will this unexpected protest be long and significant enough to once again cause a jump in crude prices on world markets? We'll see.

TopazaltGold.#1351028/19/05; 02:29:01

Any GoldHeart that isn't totally absorbed by this trading activity is simply not watching!!

Our altCurrency-Gold spread is again equal to June's largest and a look at the Chart finds this current uptick mimicing June very closely...we're just before the Drop-off.

It's so very important to realise WHAT is about to be revealed. Today's action could be a defining moment for PaperGold imo.

Belgian!#1351038/19/05; 02:52:57

Topaz : The Gibson - Mr.Rubin paradigm is still in play...but the counter winds become increasingly stronger.

Goldendome : There is NO such thing as an "oil-market" ...MARKET !!!

TopazTownCrier (8/18/05; 14:11:22MT - msg#: 135093)#1351048/19/05; 03:02:07

The impression one first gets is that the Market has just to get through to September and then the gold flows as Yr 2 begins.
I'd be a little skeptical about that TC.

The German recalcitrance this Year has led to other signatories having to put up the metal they're short for next year already!
If Germany again pass, making the 2006 quota would look nigh impossible...
...assuming there IS a next year.

Caradocexplosion in Jordan#1351058/19/05; 03:14:51

As of just before 2 AM Pacific, various news sources are reporting that a mortar fired at a US Navy ship in Jordan's port of Aq'baa missed its target and instead hit a building. Some reports say "warehouse" and add "no report of casualties."

I suspect that those (like me) who suffer from traderitis should consider sticking to the conservative side of things between now and the anniversary of 9-11.


TopazHey Sir Belgian.#1351068/19/05; 03:18:50

As in Death and transformation in the postmodern society? That's the way of it I think mate.

I love your faith in smooth transition, whats more I hope you're right.

SundeckIn the Long Run, Sleep at Home and Invest in the Stock Market#1351078/19/05; 05:33:30


As the value of real estate has skyrocketed, owners have become enamored of the wealth their homes are creating, with many concluding that real estate is now a safer and better investment than stocks.
Since 1980, for example, money invested in the Standard & Poor's 500 has delivered a return of 10 percent a year on average. Including dividends, the return on the S.& P. 500 rises to 12 percent a year. Even in New York and San Francisco, homes have risen in value only about 7 percent a year over the same span.

Sundeck: One of a few interesting articles in today's NYT...this one quite good on "housing". It rambles around with various statistics and concepts. Most people (including world-class economists - if that isn't a contradiction in terms) confuse the concept of "house price" and "house value". It is even officially sanctioned on the annual "valuation" statement that I receive from the local government body (Canberra, Australia). The "value" of my house has supposedly increased by quite a lot over the last year...well that is news to me indeed, as I am still using it for exactly the same things that I have always used it for, and as far as I can see, its value hasn't changed at all. What is meant, of course, is that the price many people are prepared to pay for my house has increased significantly from last year. Or, if you like, the "value" of the Ozzie dollar (insofar as it is exchangeable for housing) has diminished significantly!

This NYT article raises a lot of issues, giving examples, and comparing house price-increases with stock returns. It concludes that stocks have done better than housing since 1980...which may be correct; but the last 25 years in stocks has seen the greatest bull market EVER!...a circumstance that is still in the process of "correcting". Wait for another ten years and perhaps the Dow will still be sitting stubbornly between 10,000 and 11,000 (flat ... like it was in the '70s) and ask the question then whether stocks have done better than housing?

It just demonstrates that bloated (inflated) money supply finds its way into different sectors of the asset spectrum in different epochs....from 1980-2000 it was stocks, from 2000 - 2005 it was housing, from 1980 - 2005 it has also been bonds/treasuries.

"Commodities" are also taking off now, and some of this will be due to the inflated money supply and not just demand/supply factors. Gold is starting to respond to the tune, but it is lagging quite a bit...expect more to come as the beat gets louder and people find that the tune is a "catchy" little number...


SundeckRice Warns China to Make Major Economic Changes#1351088/19/05; 06:55:03


Secretary of State Condoleezza Rice warned this week that China must make significant structural changes in its economic policies, lest it remain "a problem for the international economy."

In an interview on Wednesday, Ms. Rice also laid out the administration's concerns about China's military buildup, its human rights record and its restrictions on religious freedom. Her unusually sharp criticism was a clear indication of the administration's ambivalence and frustration with China, even as officials prepare for a state visit next month by the president of China, Hu Jintao, his first visit since taking office in 2003.
"The overwhelming sense I got was that they do not want a conflict with the United States," Mr. Zoellick said. But he said that he, too, "tried to get them to see how their actions are perceived by the other side,"...
Ms. Rice, like Mr. Zoellick, said she told China's leaders in her recent meetings with them that they should heed the warnings from Congress and elsewhere. Even though the administration opposes the Graham-Schumer bill, Ms. Rice said she told the Chinese leaders "Don't ignore what people are saying to you about the problems of a Chinese economy that is both big and unreformed.

"We remind them that the president is a free trader, but he is a free trader who believes there has to be a level playing field for American workers and farmers and American goods."


Sundeck: I imagining it, or is there just a touch of the arrogance of empire in Ms Rice's (and Mr Zoellick's) motherly and fatherly advice?

Now let me see...China's 1.2B people have descended in an unbroken stream of civilisation for some 10,000 years while the USA (in its present imperial state) is all of 400 years old. You might say that China "invented" civilisation. Sure, there have been many upheavals and reformations along the way and, at present, China is emerging (remarkably successfully) from its most recent one.

"Military buildup?" "Human rights?" "Religious freedom?" Come now Ms that not the pot calling the kettle "black"? Which country, may I ask you, sits atop the Tower of Military Babel...and which country is yet to fully realise "The Dream" of its untimely-deceased black King. Really, Ms Rice, cannot you see yourself for the ineffectual fool that you are...

Oh don't worry, I am not "anti-American"...we have the tendency to lecture China here in Australia too...our present Foreign Minister (a tribute to what good schooling can do with dull material) has done it lots; although, I must say, recently, he has been trying to have a foot on either side of the barbed-wire fence. (Mmmm...couldn't happen to a nicer guy.)

And there you have the long and the short of international politics: "perception" and "expediency" over truth and honesty any day... And that's also a flaw in Democracy: Why shouldn't the head donkey bray at the Moon... knowing that they are in a dark field populated with a majority of donkeys!

I wonder whether the foreign ministers of the Spain of Philip II; or of the Great Britain of Queen Victoria; or of the Moghul India of Aurangzeb; or of the Byzantium of Romanus II; issued similar lectures to neighbouring doubt they's called "the arrogance of empire" at its peak...

"O wad some Power the giftie gie us
To see oursels as ithers see us!
It wad frae monie a blunder free us
An foolish notion:
What airs in dress an gait wad lea'es us,
An ev'n devotion!"

Robert Burns


Robbie Burns

SundeckI'm no Robbie Burns...#1351098/19/05; 07:04:27

Lest I too be perceived somewhat arrogant...please ignore the second occurrence "Robbie Burns" from my last post.


Only Sundeck

Belgian@Topaz > smooth transition...?#1351108/19/05; 07:43:32

Very little faith but more pragmatism. Why : The ongoing problems do affect (concern) the entire globe ! This specific type of war on terror is going to solve/change nothing. And Pax Americana knows very well where its limits are...not in the least because of the true nature of 9/11.

This looks much more like an environment where one rather behaves pragmatic.

Of course, there are some wild dogs out there. So far, they are only barking whilst the caravan proceeds.

If more war is in the cards...still nothing would change the ongoing transitions (power shifts). Why have more war on top of it ? Very unpragmatic, no.
I still remain rational in my (personal) conclusions after my (very limited) observations.

Goldilox"Smooth Transitions" and "Free Tade"#1351118/19/05; 08:08:02

As I am beginning to see "Free Trade" as a NeoCon Orwellism for "Free Labor", I penned this rythmic description:

They "leveled the players" with NAFTA,
And toasted Bacardi to CAFTA.
But the pickings are lean
In this Job-jacked machine.
So take any old job 'cause you HAFTA!

GoldiloxReal Estate vs. Stocks#1351128/19/05; 08:24:25

One of CBNC's more lame 20 second slots just aired a superficial comparo of the S&P's 15% long-term growth rate vs. Real Estate's 7% LT rate. The reason given for RE as the flavor du jour was tax benefits.

I dropped my jaw when they neglected "leverage" as a driver. With many RE loans featuring "zero down" and "negative amortization", RE specs are jumping on the "free bets" like Casino perks. Is this resemblence more than casual?

DruidSpecial Policy Brief 26#1351138/19/05; 09:41:01

Rumors and News:

Credit Derivatives Trigger Near System Meltdown

Randall Dodd, Director

Financial Policy Forum

August 5, 2005

Rumors started circulating two months ago concerning the possible failure of several large hedge funds and massive losses by at least one major global bank. The source of the troubles was a free-fall in prices in the credit derivatives market that was triggered by the downgrading of GM and Ford. The financial system ended up dodging a systemic meltdown, but without proper coverage and analysis of the events there will be no lessons for policy makers to learn.

This Special Policy Brief is an attempt to put these rumors together in order to tell a coherent story. The purpose is to show how the events posed a severe threat to the stability of our financial markets and overall economy. The narrative also should help illustrate the market problems with these non-transparent markets organized around dealers with no commitment to market participants to maintain orderly and liquid markets.

During these May events, there were only rumors because this "near-systemic meltdown" – in the words of a senior representative of the securities industry – occurred in OTC derivatives markets where there are no reporting requirements and hence no real transparency.

Instead of news and facts, it was rumors that circulated. First the rumors were of one hedge fund failing, and then another. As the New York Times (May 12, 2005) put it, "One firm that was the subject of rumors was Highbridge Capital Management." Highbridge, which manages a reported $7 billion in hedge fund investments, had to send out a reassuring letter to investors denying the rumors. GLG Partners – a London hedge fund owned by Lehman Brothers known to have suffered enormous losses – was also the subject of such rumors. More alarming were rumors that Deutsche Bank had lost $500 million on its own account from trading in credit derivatives and that it faced further losses through a default from its prime broker relationship with an unnamed hedge fund – its stock slid 3% as a result. Kim Rupert, analyst at Action Economics, put it this way, "There could be pretty substantial problems given the size of the moves… At this point we're trying to figure out whether this is just the tip of the iceberg and how big this iceberg may be."[1]

A few journalists cautiously reported this, but were constrained by the lack of factual information and flat denials or refusals to comment by those targeted by the rumors. Being long rumors and short facts is not the basis for sound journalism. And it is made all the more acute because so few journalists feel comfortable talking about the intricacies of derivatives markets and especially credit derivatives.


Druid: Enjoy the read. "They" kept this one pretty hushed.

USAGOLD / Centennial Precious Metals, Inc.Proven Reliability, Longevity, Quality and Professionalism ---- Invest with Confidence!!#1351148/19/05; 11:34:28

TownCrierSundeck (msg#: 135108), China apparently enjoying EU's Baltics as a "Condoleeza-free Zone"#1351158/19/05; 12:26:31

HEADLINE: Chinese Foreign Min Praises Lithuania's Economic Growth

VILNIUS, Lithuania (AP)--Chinese Foreign Minister Li Zhaoxing met with Lithuanian leaders on Thursday to discuss strengthening business ties and other issues.

Li, who visited Estonia earlier this week and headed to Latvia later Thursday, met with Lithuanian President Valdas Adamkus and Prime Minister Algirdas Brazauskas and praised Lithuania's economic growth and said he hoped the two countries could strengthen business ties.

He said Lithuania was becoming an attractive destination for Chinese tourists since it joined the European Union last year.

"We share same values and opinions, it is even hard to find a topic we would disagree about", Li said.

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

Without complicating negotiations with a backdrop of hypocrisy and arrogance which you've pointed out, the article goes on to say "Lithuanian leaders and Li were expected to discuss Lithuanian manufacturers' concerns about an influx of cheap Chinese textiles and electronics that has flooded the European market."

Something about honey vs. vinegar... It would seem that politics in America has become a lost art.


mikalConference Board cop out#1351168/19/05; 12:50:27

The Big Picture Weblog: Mis-Leading Economic Indicators - August 19, 2005
"Surprise! The revised Leading Economic Indicators increased."

TownCrierThe point of it being... (plus a few words on "The Conundrum")#1351178/19/05; 13:30:37

With our currency serving as an international reserve asset at the pleasure of those who hold it, what's to happen when these entities become sufficiently displeased?

Food for thought on the flat U.S. yield-curve conundrum:

Say, for example, that entities such as China or the euro-area already have their sights set on a paradigm shift away from a dollar-centric reserve structure.

Say, also, that they realize they are largely trapped in their dollar position, a quagmire of dollar holdings which are too large to meaningfully liquidate without invoking a precipitous plunge in value on the U.S. Dollar/bond market. Effectively, they would be left holding the bag -- sitting on a huge smoking pile of worthless reserves, the marketplace finally being brought to acknowledge what these CBs knew all along.

Therefore, since the CBs KNOW that they are largely trapped in this position, if they had a TownCrier on their staff, they would surely have been advised to take measure to make the best of it.

That is to say, they would be advised to abandon their old tenets of central banking which favor liquidity (i.e., short-dated Treasury bills and notes) on the grounds that liquidity has become a minor concern in contrast to the valuation concern.

Subsequently, they would be advised to shift their U.S. debt holdings out to the long end of the yield curve so as to eke out the highest possible interest rate earnings for as long as the system holds together.

In doing so, yes, they would cause the seemingly "unnatural" flattening of the yield curve, but it is indeed quite natural if you are seeing it as described here.

Furthermore, in bringing down the long-dated interest rates, these clever CBs would be causing the rest of the ill-informed world to have and maintain an unfounded high level of confidence in the strength and fate of the dollar.

This, my friends, would play into the CBs advantage as it buys them time, allowing them to achieve a greater shift in their reserve structure than they would have be able to otherwise. That is, in keeping the long end of the yield curve strong, the confidence this inspires for the dollar in global markets helps them liquidate the shorter-term holdings into strength, and more importantly, the illusion of a fundamentally strong dollar helps keep the gold market liquid.

As we've explained before, gold can flow most easily when regular investors aren't excited. And to be sure, a network of CBs who are determined to achieve a necessary reallocation of vital gold reserves certainly isn't going to let those competing investors get excited and interrupt their gold flows by something as mundane as a runaway gold price when it is so easily controllable through their banking network and the current pricing mechanism.

Thus, I would say to you, use this current era to your full advantage -- use the carefully-crafted illusion of the strong dollar and the carefully-crafted illusion of weak gold to shift out of the overvalued paper and into the underpriced metal.

When the day arrives that the CBs have achieved an adequate degree of reallocations, their escape from the dollar quagmire will be effectively accomplished as a sudden elevation in the MTM value of gold holdings (upon a "free (physical) gold" pricing mechanism) will compensate their balance sheets for the precipitous MTM losses of the dollar piles which are still on their books.

The only real question is, why don't you hear this tale in any other venue or hall? It could be that some things are simply not meant to be known to a wider audience. (Or maybe that TC has fallen off his rocker and scrambled his noodle?)

Time will tell.

Choose gold, and choose the firm that tries to invest its time to do more for you -- choose USAGOLD-Centennial Precious Metals for the best product at the best prices.
Call toll free 1-800-869-5115


GoldiloxPolitics or Diplomacy?#1351188/19/05; 13:38:45

@ TC,

"It would seem that politics in America has become a lost art."

I was watching CSPAN day before yesterday and saw Christopher Hill, the lead ambassador to the Six-Nation talks with North Korea. He seemed to be a very lucid and intelligent representative.

It makes me wonder if the "politics" are rendering "diplomacy" less effective?

Excellent analysis of the CB dollar and "bond conundrum", by the way.

mikalTracking patterns of trading#1351198/19/05; 14:03:39 2005 Options Expiration Calendar
Sequences of last trading day and expiration day, so far follow predictable patterns.

CoBra(too)TC - Excellent Post#1351208/19/05; 14:09:09

... Though as it may happen, some of the big players may lose confidence in the reserve currency or just get annoyed that they are blocked to spend their surplus reserves on whatever they feel would be in their interest.

The aborted Unocal deal was such an instance, which may bring down the house of cards prematurely. If you can't spend your accrued reserve currency paper at will and for assets benefitting your own economic strategy - then the currency's viability and utility may just be swept away as the proverbial carpet under your feet.

The flattening of the yield curve, IMHO, just takes away another carry trade from the hedgies; A problem which is countered by still more leverage to make a buck!

The lemurs are speeding to the brink of their particular cliff. Good riddance, though be prepared and get your insurance in Gold.

BTW - Rob Kirby had a great article on freemarketnews on asset allocation, where gold was considered as an asset class and portfolio insurance again in a few decades.

All lights green for gold - any dips are to be bought - says Ian Notely - cheers cb2

BelgianTC msg# 135117#1351218/19/05; 14:35:16

Not the first time that you communicate your brilliant insights into the gold-matters. But this time you formulated it as pure and refined as bullion's fineness ...a 24 carat post, Sir ! Magnificent.
This is exactly what is happening...disciplined and orderly. No conondrum for you of course.
Your conclusion (one and only) is the result of intelligent deductive thinking after having gathered all possible significant facts. There's only a very small (neglectable) probability left for having it (the final conclusion) wrong.

I've been thinking about the context in wich the recent 30 tonnes Belgian gold were sold/committed. It nicely fits into the general idea expressed in your msg. CBs ARE FAR FROM STUPID ! When their present system shows sign of failure...they already have an alternative in place. Pure evolution theory and practice.

Thank you Sir.

TopazFor a Systemic Voyeur...#1351228/19/05; 15:03:03's like Christmas every day.

I so look forward to the Hour or so I can squeeze in of a morning, before heading off to work. Eagerly firing up the 'pute...and checking the Charts/Forum rekindles those long past memories of, on Xmas morn, ripping off the paper on the Presents to reveal their contents.
Some would be just ho-hum whilst others would be "just the thing" you wanted.

This particular morning (here) was basically a "socks 'n undies" event ...however, the beauty of this groundhog dayesque Xmas morning scenario is, Tomorrows array of Presents will surely surprise and delight.

NedGreat message TC, question about this part:#1351238/19/05; 15:48:50

"Subsequently, they would be advised to shift their U.S. debt holdings out to the long end of the yield curve so as to eke out the highest possible interest rate earnings for as long as the system holds together.

In doing so, yes, they would cause the seemingly "unnatural" flattening of the yield curve, but it is indeed quite natural if you are seeing it as described here."

Making the best out of a bad situation, I suppose. Here's the part I'm not getting. So CB's are crowding into the long end, driving long-term rates down.

Now if Greenspan is not so hell bent on a strong dollar anymore and if inflation is truely not an issue why keep driving the short end up? I suppose if your CB/long end theory is correct then Greenspan must attract the short end in some fashion. Something must keep this trade deficit in balance. I hear the likes of Sinclair talking incessantly about the 'TIC', so is it possible the CB's falling off to the long end creates the void at the near end as confirmed by the absence of foreign capital in the TIC report and confirmed by the rapidly rising short-term interest rates?

Sounds like a mouthful and I think I've got myself sufficiently wrapped up in a knot. I'm stuck on Pierre Lassonde boldly predicting $525 POG by January and wonder what's his claim? The other thing that's gaining ground is this Iranian 'oil bourse'. I was off on holidays this week, spent a pile of time investigating Iran's so-called nuclear activities. This 'uranium enrichment' process, which is fascinating in itself, seems to co-incide with Lassonde's January gold call.

So I've got to wondering lately if we are to see another war or if this monetary implosion is set for the winter 2005/spring 2006?


Have a golden weekend.

TopazCB's ...Market movers or smoovers?#1351248/19/05; 15:56:27

Yup, good perspective Randy ...I didn't intend to indicate the Forum was ho-hum today (as it appeared) your post was clearly a delightful "gift".

CoT OI, given Tuesdays report would be currently nearing or beating the #^)K top earlier this year ...(HA!, the "Dude wearing Shades" is really 350). Our CRB daily hasn't updated yet but I'd guess it to be so.

This poses a real dilemma @ Comex "at this time" with an oxymoronic -Spot needs to rise, Dec needs to drop- situation.

otish mountain@Belgian,TC,CB2#1351258/19/05; 16:11:01

Belgian:Thank you friend, I ask for a morsel and am served a 5 star meal.
TC: Absolute brilliance, only here at this forum is the thinking far ahead of the crowd. Blazing Trails that are yet to be discovered. Thank You.
CB2: Funny you should mention Ian Notley. Have read his Notes for years now and find every page has a thousand words

TopazAnother marker "on the Trail"#1351268/19/05; 16:11:30

Is Sept Futures Options OI ...very low in a non-delivery month indicating Metal rather than Money is the driving force du-jour.
R PowellConumdrum#1351278/19/05; 16:15:51

Clearly it continues to confound + confuse....

10 year yield = 4.211
5 year yield = 4.079

Difference continues to contract, now calculated @0.132 or 0.132 percent.

Why? What does this mean? + Happy weekend...!

GoldiloxBond Curve Inversion#1351288/19/05; 16:45:29

@ Rich P,

Actually, I think it opened up the last couple of days. I noticed Weds or Thurs that it was in the high 11's.

We're definitely getting close to actual inversion.

Let's see - lend them $100K for 5 years at 4% or 10 years at 4% or less?

I'm not sure why that's even a question, but I am studying TC's explanation to see if I "GET IT". - LOL

BoilermakerForeign Holdings of USTreasury Securities#1351298/19/05; 16:46:44

Check out the bottom lines on the TIC link. Recent data on foreign holdings of Treasuries are confirming TC's hypothesis this year. T-Bills were 19.6% of foreign holdings in January 05 but were only 16.7% in June 05. The total has been nearly static this year. I'm worried. Who's going to fund poor old Boilermaker's lifestyle. God bless whoever has taken up the challenge. :-)
GoldiloxChinese dollar deals #1351308/19/05; 16:52:42

@ Cobra (too),

Although CNOOC-UnoCal hogged all the press, I posted a list of busted China oil deals the other day. There were about a dozen of them listed. It must be getting pretty frustrating trying to trade with "Monopoly Money"!

Gandalf the WhiteWOWSERS --- Roller coasters !!! #1351318/19/05; 17:56:55

US$ chart ?
Clink!@ Gandalf#1351328/19/05; 18:02:35

Hey, Gandy - a new chart formation for you. The Golden Gate Bridge ! (And a three quarters shot at that).

Clink!Oh, you beat me to it !#1351338/19/05; 18:05:26

A bit like Rorschasch (sp?) patterns aren't they. What do others see hidden in there ?

TownCrierThanks for the positive "conundrum" feedback#1351358/19/05; 18:09:34

Here is a link to assist with future access. Additional expositionary material, including Greenspan comments and a chart, have been added to the original commentary.


USAGOLD Daily Market ReportPage Update!#1351368/19/05; 18:40:20">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Friday Market Excerpts

August 19 (from MarketWatch) -- Gold futures fell Friday to end the week with a cumulative 2% loss, pressured by some strength in the U.S. dollar and by overall weakness in crude-oil prices this week.

"Gold put in its highs early in the week and is in the process of testing major support areas," said Charles Nedoss, an analyst at Peak Trading Group.

"The market seems to be shrugging off the inflationary implications of crude and higher interest rates," he said, adding that the session's weakness marks a "technical correction."

"Gold is holding on the technical levels it needs to," Nedoss said.

COMEX December gold futures closed at $442.20, down $2.50.

(from DowJones) -- Gold futures finished lower in New York on Friday, pulled down by weakness for much of the day in the euro. Some fund selling was reported in thin trading conditions, exaggerating the move.

"The dollar was stronger earlier," said Dave Rinehimer, director of futures research with Citigroup Global Markets. This tends to hurt precious metals.

"There hasn't been too much reaction to the strong recovery in energy prices today," he added.

As gold was closing, September crude was up roughly $2 for the day.

A trader said a couple of funds appeared to be selling gold. "There was very little liquidity on the exchange," he said.

"I think the move was probably exaggerated today. I don't think that much was going on. A couple of big players were pushing it down a little bit and they didn't run into too many bids on the way down."

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

TownCrierHDFC Bank raises bar with gold#1351378/19/05; 18:47:32

Mumbai, Aug. 19 (PTI): HDFC Bank will launch ‘mudra’ — a service that will offer branded five-gram gold bars with a purity of 99.9 per cent.

...Launched to coincide with the beginning of the festive season, the gold sale plan will play out in 160 branches in Mumbai, Delhi, Calcutta, Chennai, Bangalore and Hyderabad from August 27.

HDFC Bank plans to expand the service to other cities.

"The product is ideal for customers who have been demanding purity in gold for investment purposes," Shyamal Saxena HDFC Bank's head of retail liabilities, said.

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

Indian savers understand the unique and enduring value of tangible property.

Don't be left out in the cold. Make sure your golden savings are physical -- and too heavy to hold!


SundeckDynamic conundrum#1351388/19/05; 19:15:27

Someone, a year or so ago, posted this link to the dynamic yield curve...enables a dynamic view of the "emergent properties", i.e. the yield curve, but not the underlying causes...


DruidTC#1351398/19/05; 19:49:44

Druid: Thanks for the excellent commentary concerning Greenspan's "conundrum" and how the CB's might be using longer-term credit in the fashion you described to buy time for the coming metal re-val.

Personally, I think Greenspan's trying to accomplish a few things on the short end of the credit spread. First, is to go after the hedge fund and speculating crowd that is giving him so much hell on the short end. He mentioned this fact in one of his speeches in Europe. I don't think he's trying to defend the dollar or take out the housing bubble with this strategy although that is what it might appear that he's doing and reported as such in bubblevision.

Second, a yield inversion would wreak havoc on the speculating crowd but create an opportunity for another round of refinancing among the consuming public which would go a long way in buying more time for CB portfolio adjustment that is currently in progress.

The idiots caught up in the housing bubble will have their day but not today. In my opinion, Greenspan and his Magi's are going after the sharks and these people are playing in the derivative's markets. He's trying to target shoot his game with these baby steps in raising rates.

Personally, I'd like to see him take the machine gun approach (Volcker) and raise rates 3 or 4 points at one time to see what he can break in the paper economy.

Oh well back to my cave.

slingshotFacets of a Goldbug#1351408/19/05; 20:53:56

A very long read but just may put all the feelings of a goldbug into one commentary.

slingshotLast post#1351418/19/05; 21:01:14

My apology, Please follow the bandwith to the the bottom. It all interconnects.

slingshotTo the Oaken Table of Yore#1351428/19/05; 22:53:01

As a lower Knight of the Table. I come forth to ask a question of the Table Round. Seeking only probalities and not certaincies. I have answered the call of each of your requests (Contests) as have many Knights and Ladies. Rewarded in kind for their most noble guess and reply to your question. In all due respect, My Lords, it is time to ask, How will the Forum evolve to help those in dire straits? When GOLD starts its upturn.
This is not an attack nor an attempt to corner USAGOLD.
Only to understand how you will handle the coming crisis as you precieve it.

MarkeTalk, Towncrier, and Sir M.K.


slingshotTake notice you Lurkers#1351438/19/05; 23:20:48

O.K. Slingshot has gone over the edge. But wait a minute. Thick about this? Is the dealer obligated to fill the first order or the largest order? Not only that can the order be completed in substitution. Pandas for Maples? Could there be a price variance when 1/10th are use to fill 1 ounce contract. Just because you have one ounce of gold does not mean you have paid for one ounce of gold.
By spot.

slingshotWhere do we go from here?#1351448/20/05; 00:11:44

Have you had enough?
Baltic Dry Index
interset rates
Bond activity
GM Ford junk Status
Real EstateFed Def
Trade Def.
M3 money supply
Nafta Gatt Cafta
Gas Prices
Real Estate
I will not be back till 451 when paper burns unless called.
And the Ralley monkey will be with me!

ge Iran, Venezuela discuss oil embargo#1351458/20/05; 00:47:48

masIs this really true? From the Privateer#1351468/20/05; 03:36:20

This is really a serious situation.

In the Bay Area of San Francisco, the official unemployment rate was, at the latest June 2005 figure, 5.1%. This was up from the official 4.6% rate which had been recorded for May. Such an unemployment rate is reflective of a prosperous part of the world.

Yet when Wal-Mart let it be known this week that they were looking for 400 people to staff their new store in the area, they had more than ELEVEN THOUSAND applicants. That's twenty-eight applicants for every job on offer.

It is a well-known fact throughout the US that Wal-Mart does not offer high-paying jobs. Nor is there much in the way of "fringe benefits" attached to the jobs they offer. Indeed, Wal-Mart has long been the target of US unions for the paltry health benefits and low wages they offer.

How prosperous can a nation actually be, how robust can the economic "growth" of a nation actually be, when more than eleven thousand people line up to apply for 400 of the lowest paying jobs available in that nation? And how is it possible that such a thing could happen in a suburb of a major city in that nation which claims an unemployment rate of 5.1%?

The answers are, of course, simple. A situation in which eleven thousand people apply for 400 menial jobs is redolent, not merely of recession, but of actual DEPRESSION. It is a more eloquent indictment of the economic and financial policies of both government and banking system than any number of learned treatises on economics. It is also the slap in the face which reality always gives, sooner or later, to the official statistics by which governments seek to obscure the REAL state of the nation they govern. In such a situation, the claim that the unemployment rate is 5.1% is preposterous, and obviously preposterous.

GoldiloxRead the fine print in unemployment reports!#1351478/20/05; 07:13:32

@ mas,

We have become so disenchanted by "fine print" reports, that the BLS knows we never get past their glossy first page. In his analyses of the employment reports, George Ure digs into the addendum numbers as well. The ones that are never spoken in the media are called "the under-utilized" and "ceased looking for work", simply because they no longer qualify for unemployment compensation or show up at the office to examine their paltry jobs lists. This number has remained steadily in the 12% range throughout the "jobless recovery". Adding them to the "official" 5% gets us very close to 1930's 20% numbers. By the way, if you're stretched for cash, and sell some of your possesions on ebay, you are now considered self-employed in the new paradigm - another way to exit the tally of unemployed!

In addition, Wall Street moguls are back raking in their multi-million dollar bonuses, thus skewing the compensation figures to boot. A few dozen 8 figure bonuses goes a long way in bolstering a 2% compensation gain average. If they measured compensation gains with a median, it would show that the majority of workers have seen wages fall, especially against non-hedonically adjusted inflation.

One last question, how many accounting bureaucrats are "employed" solely to create this illusion that unemployment is "low"?

It's not in the least surprising that Wal-Mart saw 28 applicants for every job posted. It fits right in with yesterday's limerick:

They "leveled the players" with NAFTA,
And toasted Bacardi to CAFTA.
But the pickings are lean
In this Job-jacked machine.
Take any old job 'cause you HAFTA!

GoldiloxJim Willie CB and Richebacher#1351488/20/05; 07:37:09


Massive sea changes are quietly underway. We are entering a new phase whereby politics are soon to collide with the concentric financial spheres. (Oh, no, White Hills - who'da thunk it?)

In the last few years, focus was on Europe over NATO, support for a US coalition in the Iraq War, the new EuroBond alternative to USTBonds, numerous trade conflicts, and broad calls for European reform. Now the focus has shifted to Asia. Watch the trade war with China. It is indescribably dangerous. Most Americans have no idea what is going on. They could not name more than three Chinese cities. I have not met a single person in my social conversations who is aware of the Senate tariff bill threatening overhead. Bear in mind that most of my conversations outside the office are not financial in nature. The conflict with China will be pervasive, as it covers trade, retail center shelves, job loss here, job growth overseas, lower wages here, lost fringe benefits here, intellectual property cheating, technology transfer, automobile industry destruction, competition for commodities, multi-national energy contracts, Russian military acquisitions, new Iranian alliance, and Treasury Bond support. What a lethally dangerous mix in the witch's cauldron!!! The last item points to implications to our housing industry and its gigantic bubble. I have talked to many many people who actually claim that the US housing sector has never suffered a bear market or decline, incredibly. Facts offered by me fall on deaf ears, from the reality of 1988 to 1992. Any talk about Bundestag or Krystalnacht goes right over their heads. Americans do not study history. We pull it off the shelf when needed and rewrite it to suit our needs, but not as egregiously as the Soviets did.

Most Americans believe the USA has survived all previous threats and will survive all future threats. We are the champion of capitalism and free enterprise, yet most people cannot define either term nor notice the erosion across the spectrum. The USA exploited cheap Persian Gulf oil for two decades until 1973. We built an interstate highway system with a quasi-tariff tax. The USA took advantage of the Asian Meltdown in 1997. We embraced a cheaper supply chain. We reacted quickly to the US stock bust in 2000 with lowered interest rates. We bounced back from the World Trade Center attack with repairs and increased security. The Lower Manhattan transportation system has been upgraded in the process. We took charge with a counter-attack to isolate the violent risk in the Middle East and to secure oil supply in the process. The USA reacts and prevails, that is the consensus view. In many respects, the USA is truly a mighty responder. We are innovative and versatile. Many Americans base their economic and financial bullishness on our military superiority, without connecting the defense budgets and federal deficits to Asian sources for credit supply. That is taken for granted. Few notice how the empire is suffering from "imperial overreach" and crippling indebtedness. Few notice that with growing national debt comes unavoidable loss of sovereign control. Arrogance still runs high, with its associated high level of confidence. If ten reasons backed that confidence, the top three reasons can be traced to housing, from its general rise in household wealth, its equity extraction, its speculative gains. Military supremacy ranks high also. Signs point both to a flatter housing market from numerous indicators, but also to continued gains in certain metropolitan areas. It is interesting to watch those in charge of the Private Mortgage Risk Index assess Boston, Long Island New York, and Washington DC as each having over a 50% risk of declines in the coming 12 months. The housing heart of the bullish optimism is soon to be tested. The last GDP revision included a housing price component decline in the calculations.


In a recent "Hat Trick Letter", Jim Willie CB shares an email exchange he had with Kurt Richebacher, wherein he lays out his economic risk factors. It's good reading.

GoldiloxMissing Link#1351498/20/05; 08:31:47

Sorry about that. Here's the link to the Jim WillieCB editorial.
BelgianGold Mobilization :#1351508/20/05; 09:07:04

Facts : During the past decade, the whole planet knows that euro-gold...EURO GOLD !...was officially on the move...mobilized ! Other $-allied CBs, also mobilized an amount of their gold-reserves. It is only the UST that never communicated any gold mobilization initiative ! The USTreasury only renamed its goldreserves...changed the status of its goldreserve.

Remember that the planet had gold mobilizations before : FDR confiscated citizen's gold and stated that gold should only be stored in government's hands in the Treasury's vaults. Then in 1974, gold was mobilized again when US citizens were allowed to store goldmetal once again (state gold + private gold). Another kind of gold mobilization was the shipping of goldmetal from the US (20.000 tonnes) vaults to Europ and other places.
In other words...there have been several important gold mobilizations...or shall we call these exchanges !

All this gold was mobilized/exchanged under an expanding dollar-regime. The past decade, the general public is superficially informed about a certain mobilization of...EURO from the European System of Central Banks ...where private gold was never confiscated, and never will !

Time we ask ourselves if there is a fundamental difference between the previous $-gold mobilization and the recent €-gold mobilization !!!

The exchange of dollar-gold served the dollar's global expansion, and the present exchange of euro-gold serves...yep, the ambitions of the euro's expansion within the expanding EU>EMU and beyond. Yes, we are in the dark as to what the real nature of this euro gold mobilization/exchange, really is. Is it re-distribution / re-allocation / privatization / ...other.

Bear in mind that the $-gold stayed in the IMF and couldn't be mobilized/exchanged. It is euro-gold that moves (full circle or not).

Is it the old -$-Gold Exchange standard that is death and a new -€- Gold Exchange Standard that is born to introduce the € competitor as a global settlement numeraire !? Just like the dollar did for decades whilst expanding outside the US with no legal tender status.
What is more important for the euro's global ambitions...a constitution or a new (€) gold-regime (smile MK) !?
Does such a euro-gold system needs military super status, when embraced by the rising blocks on the planet ? Even the Swiss and the UK officially mobilized half their gold reserves contrast with the UST gold that is still lying in the vaults ( encumbered or not -?).

How will the tender status of dollar and euro, outside their respective borders, evolve under the 2 different gold-exchange regimes ? A fixed price $-gold regime versus a €-MTM gold regime. What kind of "political value" are both numeraires gaining or losing under the present evolving geopolitical circumstances ? How is the systemic rising US trade deficit affecting the dollar status versus a Euroland that has a trade surplus ? Can one defend one's currency (its political acceptance and use) with permanent war ?

Is the ESoCBs delivering (perform with gold) into its promesess towards Asia and specific oilstates (gold mobilization/exchange) ...supporting the €-gold exchange standard in progress ? Will UST gold be exchanged for euro a later huge euro (and dollar)prices ? So the damage to the US (loss of $-reserve status) can be minimized as is in the global interest.

Euro-gold is certainly not mobilized as to "support" the dollar's reserve status and keep the euro dwarfed...condemned to stay within its own borders. Euroland uses its own euro as a reserve next to the much more important gold reserves elevated to wealth-reserve status under a MTM regime.
The dollar cannot control "all" the oil/gas on the entire planet !? Or can it ?

Does anyone has any details about the IMF conditions for debt relief for the specific African states ? How much oil and gold is there mobilized ? Was that the real reason why SA miners could call a general strike and get most of what they asked for ... ASAP !? Was it Gordon Brown who subtly hinted that gold (and oil) shipments (mobilization) were OK for having the debt relief ? Keeping UST gold out of the way for later €-reserves transition.

Is this the reason why the WAG restrictions on bullion supplies are starting to bite more and more and more goldmetal is demanded obscene low dollar exchange level !?

What is more war going to change on this play !? Anyone.

USAGOLD / Centennial Precious Metals, Inc.Especially designed for those who are taking their first step...#1351518/20/05; 09:34:26">gold ownership starter kit
NedThanks for the link ge#1351528/20/05; 09:35:02

It is clear that oil producing countries will become bolder as the years go by. They perceive, and rightly so, their 'clout' getting stronger with each passing year. OPEC's contribution to world production gets larger, as a percentage, as time rolls on. Producers get bolder & stronger, consumers become more and more desparate.

This is what sets the stage for WW III.

Examples of each include Iran's new bold step w/ continued uranium enrichment and "try to stop me now" attitude and Mr. Bush's 'stunt' in Iraq. What is also clear is that sides are being picked, Venezueula is siding up to Iran. China although not stated as such, is also cozzying up to Iran. Japan and the UK are clearly allies of the U.S. Gotta wonder about Israel calling the U.S. & Europe 'spineless', this thing gets going and Israel is the first place 'evaporated'.

We are about to witness who has big balls. No idea of a timeframe but gotta think this can't go on for another year.


mikalTrade sanctions mulled, but no bombardment#1351538/20/05; 10:15:03

Iran Bomb Production at Least 10 Years Away - August 12, 2005 - London Telegraph
Chris PowellTreasury claims power to seize gold and silver -- and everything else#1351548/20/05; 10:38:42

In a letter to GATA, the U.S. Treasury Depatment issues a remarkably comprehensive claim of tyrannical power.

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.

GoldiloxEvaporation#1351558/20/05; 11:42:42


The only way Israel gets "evaporated" is if someone upwind decides thay have had enough. Most of the oil producing Arab countires are downwind and would make their own homes unliveable from the fallout.

We who get our "nuclear information" from Hollywood don't think about that too much. Fallout and long term damage stopped being "mentioned" after "Dr Strangelove - How I Learned to Stop Worrying and Love the Bomb".

I especially love the idiots that say "Just nuke them and take the oil". I guess glowing exhaust pipes don't bother these "iron men".

GoldiloxTrading with the Enemy Act - a political farce#1351568/20/05; 12:26:00

Notice how it only applies to the Non-connected.

Ollie North was subpeonaed by Congress about trading cocaine for guns in Nicaragua and swapping guns for Afghani heroin with the Iranians. Gee, I wonder who he sold those "commodities" to? We never heard that part! When he was indicted for lying his a$$ off, George the First quickly pardoned him and Reagan denied any knowledge, even while declaring bin Laden's boyz heroes and dedicating the Space Shuttle to the "Freedom Fighters in Afghanistan".

During WWII, Standard Oil (John D. Rockefeller) maintained producing wells in Axis Saudi Arabia and Ford continued production of trucks in Vichy France- both to supply Hitler's war machine. Neither was ever questioned about the practice, except by the "liberal" press.

Will gold suffer confiscation again? Probably not, unless some enterprising bureaucrat can figure out how to do it without the US taxpayers responding as Iran did when their treasury assets were "frozen" for the deposed Shah's benefit.

A strong reason for vilification of gold ownership is to maintain a small enough gold community that we can be considered "collateral damage" by the greater electorate should they decide to confiscate or "freeze" public assets to support their "dirty little wars".

After all, gold confiscation in 1933 affected almost everyone as gold coins were in circulation. In 2005 forward, gold owners probably number onlly in the hundreds of thousands or few millions.

BelgianGold mobilization II#1351578/20/05; 13:15:44

The euro initiative to re-distribute (re-allocate) goldmetal serves the purpose of re-instating gold as a non-money wealth reserve under the mtm regime. Such a regime would not work when the one entity managing the euro numeraire would be the biggest owner of the gold as reserve.
There must always be good reasons for gold exchange (the metal that is). That's how gold functions as a wealth barter once again. This principle fits perfectly in oil and Asia's strategies (policies)...and Euroland too as we can call this blocks ...the savers in sharp contrast with the AA credit (debt) culture !

Any fiat should only/exclusively be backed by its legal tender status and by nothing else ! FreeGold will tell each and every currency how good or bad it is managed and worth its "use".

The re-privatization of the goldmetal in the US in 1974 already signaled that no government is worth the fiat it is issuing. Fiat has never been and will never become a "saving" instrument (gold-alternative). This becomes very visual for the general public in the present environment of abnormal low interest rates versus the real price inflation. It will become much clearer when the housing boom stagnates (no massive crashing) and the global economy isn't able to restart a stable growth.
Gold wealth for saving and fiat numeraire for trade ! How simple. The Asian factor and the change in oil pricing will force the $-IMS to switch to this principle once again. That's why the availability of the goldmetal continues to decline...and this is even less visible in the price of gold for the same reason as in the run up to the eighties : bid for goldmetal and we shoot its price to the moon so nobody gets an ounce in possession. A finalized goldmetal redistribution will not have to face that same old problem. That's why the PBoC brings goldmetal to the public (1,2 billion souls). This is increasingly happening in the expanding center of Dubai. Goldmetal (wealth) must represent again 100% UNIVERSAL PURCHASING POWER and nothing else. Real purchasing power is real wealth. This principle is not a cake for those who live on a permanent debt/deficit culture and don't see any purpose for wealth saving (and intact transfer).

We, the historic supporters of the $-IMS, cannot keep on fighting (opposing) the growing factions on the planet that still desire to save (culturely embedded) in a universal wealth tangible (gold). Don't ever dream to succeed in paperizing an Asian's goldmetal wealth !!! And w're talking here about half the globe's population ...growing by...100 (one hundred) million a day !

And here I cite FOA again : The difference between " use-function " and " value-function " of our (US$) money, was most surely convoluted for political gain and banking credit interest.
In a globalizing planet no NWO will ever succeed in mega dominance for ever ! Watch how the formation of different factions is indeed succesfully evolving...against the efforts of the NWO. Russia and China are having joint military excercises...!!! What an enormous change.

TownCrierBelgian,#1351588/20/05; 15:56:52

Thanks for the solid synopsis -- a clear view of our real world as it turns.


heavy mettle(No Subject)#1351598/20/05; 20:17:59

The New World Order is NOT limited to the US and its backers or its dominance of world politics, oil or gold. Assuming that one country carries its flag is divided thinking. The NWO idea was more than likely hatched in Europe's very own back yard. Jim Sinclair has it right when he labels it ‘Authoritarian Free Enterprise’ as one can see its effects with modern governments everywhere; U.S.A., Europe, Russia, China, etc., taking more and more liberties with yours under the guise of fighting terrorism. Welcome to whatever one labels it as it's an equal opportunity employer everywhere.
The Invisible HandEuro faces a derivatives-based competitor, the Bootho#1351608/20/05; 20:37:54

'The bootho will be bigger than the euro'
By James Hall (Filed: 21/08/2005)
Richard Booth, the second-hand book retailer and self-appointed King of Hay-on-Wye, the Welsh book town famous for its literature festival, is planning to launch a new international currency, "the bootho", which he claims will be more widely used than the euro.
Last week, Booth held talks with a London-based specialist derivatives dealer about setting up an international currency exchange on which boothos can be bought and sold.,6903,1553111,00.html
the fact that the public still expects inflation to be contained despite oil prices at $65 a barrel is an indication of the confidence Greenspan has been able to command. 'We believe in the Fed's ability to deliver low and stable inflation’

gvRe: Belgian / Gold mobilization II#1351618/20/05; 22:52:44


I have found your postings to be insightful and very intelligent. I hope not to take your comments out of context, and I am just playing a little tiny bit of devil's advocate, for a simpleton newbie like me. :)

--> "Goldmetal (wealth) must represent again 100% UNIVERSAL PURCHASING POWER and nothing else. Real purchasing power is real wealth. This principle is not a cake for those who live on a permanent debt/deficit culture and don't see any purpose for wealth saving (and intact transfer)."

This is where I stumble. Yes, we find Kings of old buried with their Gold Metal and nothing else. I do agree there seems to be an intrinsict value of Gold because of its scarcity compared to other elements on the periodic table, and because it is fungible and transferrable.

But in the US Dollar-based pricing discovery mechanism, ever since gold was "freed" in the early 70's, I humbly submit that in Dollar terms, unless you were very shrewd to have purchased Gold at $45 per ounce, in Dollar terms, we really haven't "Preserved Purchasing Power". It's been brought up here before. The last 20 years in Dollar terms, Gold hasn't been the greatest of "wealth preservations".

I agree in theory, that it -SHOULD-. Gold -should- preserve and sustain Buying Power and "Wealth Preservation" over time. Whether it does or does not... or has or has-not.. I guess it is because of two things: Either market forces and free markets have placed a lower value on Gold, or there is some unseen "Powers That Be", pulling the strings on all of us.

I am still debating the word "Wealth" in my mind and objective stores of value. I am starting to believe there is no true wealth in the world. It's all temporary, ethereal transfers of "something" with no basis on anything except for confidence that the "something" can be transferred further. Unit of transactions.

If I had to define, "Wealth", the best I could come up with is the ownership + control over recurring, value-generating entities. Either it is your own mind (you are wealthy because you have a level of intelligence,knowledge,experience to provide a needed service to others in an employed sense), or you are the owner of a company which produces things + services that other people require.

In my opinion, true "wealth" would be to own several sustaining businesses in geographically different locations, each business in a different field.

The "Savings" you speak of would be re-investment in other businesses or expansions in existing businesses.

I really would LOVE to see, whether it is Gold Metal or some other physical thing, a totally market-driven Objective store of Purchasing Power, but I don't see how we can transition from the current market-driven forces to that. What would happen? Suddenly, the price of Gold Metal goes to $30,000 per ounce or whatever number (to make up for the past 20 years), and then fluctuates based on Dollar-M3 expansion.. ? Or fluctuates based on Total Bank Credit expansion.. ?

Maybe I am missing the point entirely..

PRITCHOGold/Oil Ratio Extremes 3 - -- - Worth The Read #1351628/20/05; 22:54:06

SNIP -- -
This 1970s Great Commodities Bull pushed both elite commodities up to their all-time inflation-adjusted highs as well. In today's dollars, oil exceeded $95 per barrel in April 1980. Gold ended January 1980 at $1690 in today's dollars, truly impressive. And while this chart is composed of monthly data, if gold's all-time daily closing high on January 21st, 1980 is considered in 2005 dollars, it now runs about $2140 per ounce!

These all-time highs are important to consider as we ponder the GOR extremes evident today. At $67 today oil is already three-quarters of the way to hitting new all-time real highs. But gold, at $440 today, is only one-quarter of the way to achieving new record highs. Bull to date crude oil is up nearly 500% in recent years while gold is pushing just 70%. Just as in 1976 we are presented with three scenarios … gold soars, oil collapses, or the GOR relationship implodes. Which will it be?

geNed msg#: 135152#1351638/21/05; 00:44:13

Frankly, I do not have a firm understanding of what is going on. There are several possibilities and it is very difficult to tell fact from fiction. Just watching and taking notes.

One possibility is the following:

"…you may still be under the impression that Iran is some kind of enemy of the United States. Let the relative peace in the Tehran-dominated south of Iraq dissuade you of that notion." is main message of this site.

Consider the memories of Sheikh Yamani:,6903,421888,00.html

***start of quote***

"His voice quickens further when he reminisces about the era of great oil diplomacy in the Seventies and his contemporary, former US Secretary of State Henry Kissinger.

"At this point he makes an extraordinary claim: 'I am 100 per cent sure that the Americans were behind the increase in the price of oil. The oil companies were in in real trouble at that time, they had borrowed a lot of money and they needed a high oil price to save them.'

"He says he was convinced of this by the attitude of the Shah of Iran, who in one crucial day in 1974 moved from the Saudi view, that a hike would be dangerous to Opec because it would alienate the US, to advocating higher prices.

"'King Faisal sent me to the Shah of Iran, who said: "Why are you against the increase in the price of oil? That is what they want? Ask Henry Kissinger - he is the one who wants a higher price".'

***end of quote***

A higher oil price would increase the demand for Dollar while the oil is being priced in USD.

Belgian@ gv msg#135161#1351648/21/05; 03:47:25

You are not at all missing the point...on the contrary, IMO.

Gold is indeed about wealth and even more important about wealth "preservation" !

Maybe it is because I've started maturing that I come to grips with the notion of what (objective-universal) wealth exactly to preserve it for transfer.

Very important is your absolutely correct observation that for the past 7 decades, the aboveground goldmetal has NOT ...absolutely not...reflected the total (global) accumulated wealth. Gold did NOT ***-function-*** as it should ! Very, very significant.

Gold should have functioned as the consolidator of what you (me and all the others) percept as generation of wealth (productive, profitable enterprise). Businesses come and go and the fiat they generate (profit) is permanently depreciating.

The whole complex system of economic/financial/monetary affairs starts to show serious deep cracks. We are observing these growing defaults daily. The system starts to roll on square wheels (disfunctioning with insufficiant harmony - unbalanced). The need for a fundamental change grows by the day. And it is exactly at this point that your observation about gold having dysfunctioned for the past x-decades, is gaining in importance ! We were ooooh sooooooh convinced that we could manage the whole affair...without gold properly functioning : A. Greenspan >>> CBs are acting as IF we were on a gold-standard !

The objective (gold) store of accumulated wealth was deliberately disabeled...made unfunctionable. Our purchasing power had to be permanently falsified as to operate on the $-IMS...SYSTEM.

Any expansion (businesses) must happen on solid foundations. Drifting debtbergs are far from solid foundations. Debt (not credit) is not a consolidation of one's wealth. An objective store of value must be debt-free as a starter.

GV, we are NOT living under market-driven forces...we are all living under a debt-driven political economy. A real market is about credit/credibility/creditworthness and not about an endlessly accumulation of debt ...and the political organization/management of such a system !

Savings are a postponement of consumption. But natural savers also want to consolidate a part of those savings into an appropiate (perfect) tangible. A solid foundation as an intact wealth for eventual later expansion of business that generates fiat.

Any bussines is a venture and can turn into a total loss. Wealth consolidated in gold can never turn into a total loss. But look what they have done to gold in the past 7 decades...from confiscation to price containment...taking gold's wealth function away or disabeled. The confetti brewers "had" to take the golden foundation away in order to have "their" system up and running !

But that's history...because the system reaches the end of its lifetime. And then one goes "automatically" back to the roots...the foundations...modernized freegold !

But after 7 decades (3 generations) of confetti brewery (notes to digits)...the notions of real wealth and freegold have almost been extinguished...almost, dearest gv...almost !

Today's markets are but virtual markets, based on nothing but debt and the illusions that debt brings with it. Time is running out for empty promesses that aren't functioning (manageable) anymore. I want value for the offered value...from now on ! And I strongly suspect that I'm not alone with this idea.

But this gigantic transition from illusionary debt richness to genuine wealth consolidation is going to be a rocky ride. Big changes always carry a lot of injustices (suffering) in them. Realizing that one's wealth is NOT exactly what its virtual credits say it is. But today's savers (postponed consumption) are losing purchasing power at a faster speed and scale than they actually realize...due to the massive (systemic) falsification of stats and false perception building forces that can easily deceive.

This time, the organized robbery of what is supposed to be wealth will not be a temporary event. The planet's rapport de forces have been changing already. Many (objective) observers certainly already agree with this ongoing fact.

It is NOT the end of the world...but it is the end of the foundationless confetti brewery era...the empty and unproductive speculative/gambling finale. Consolidate your smartness properly as to preserve what you accumulated to be classified as transferable wealth.

It is against the above background that all chart-patterns (with their ever rising extremes) should be interpreted.

And in all honesty we do realize all together how extremely difficult these decisions realy are. But that's exactly the main thing on what the gold = wealth disablers have been counting to marginalize gold's function for such a long period. But we all let it happen for temporary great fun !

Have a nice WE, Sir.

GoldiloxA Modern Dilemma - Addison Wiggins#1351658/21/05; 09:00:21


The problem becomes severe when, unavoidably, the system finally collapses. At some point, the Federal Reserve - with blessings of the Congress and the administration - prints and places so much money into circulation that its perceived value just evaporates. Can this happen? It has always happened in the past when fiat money systems were put into use. We have to wonder whether FDR was sincere when, in 1933, he declared that the currency had adequate backing. It wasn't until the following year that the president raised the ounce value of gold from $20.67 to $35. He explained his own monetary policy in 1933 after declaring the government's sole right to possess gold:

"More liberal provision has been made for banks to borrow on these assets at the Reserve Banks and more liberal provision has also been made for issuing currency on the security of those good assets. This currency is not fiat currency. It is issued on adequate security, and every good bank has an abundance of such security."

It was the plan of the day. First, the law required that all citizens turn over their gold to the government. Second, the value of that gold was raised nearly 70 percent to $35 per ounce (after collecting it from the people, of course). Third, the president declared that currency printing was being liberalized - but it is backed by gold, so it's not a fiat system. This may have been true in 1933, but since then - having removed ourselves from the gold standard - the presses are printing money late into the night. The gold standard has been long forgotten in Congress, the Federal Reserve, and the executive branch.

It may be the view of some people that a perfect monetary system may include changes in value based on purchasing power and on the demand for money itself. Thus, rich nations would become richer and control the cost of goods, while poor nations would remain poor. In spite of the best efforts under the Bretton Woods Agreement, it has proven impossible to simply let money find its own level of value. Unlike stocks and real estate, the free market does not work well with monetary value because each country has its own selfinterests. Furthermore, today's post-Bretton Woods monetary system has no method available to prevent or mitigate trade imbalances. Thus, trade surplus versus deficit continues to expand out of control. The United States ended up accumulating current account deficits totaling more than $3 trillion between 1980 and 2000.This perverse twist on world money has had a strange effect:

"These deficits have acted as an economic subsidy to the rest of the world, but they have also flooded the world with dollars, which have replaced gold as the new international reserve asset. These deficits have, in effect, become the font of a new global money supply."


FIAT money systems have diluted the benefits of capitalism, by rendering that very capital unstable. More effort is spent defending the capital than building wealth and trade. This can be witnessed by the sheer volume of currency and derivative markets versus the "real" markets for commodities and finished goods. When "free markets" are constantly foot-noted, confidence becomes fleeting, at best. When manufacturers make more profits through currency arbitrage than actual sales, the system is being gutted before our very eyes.

Who is behind the curtain, Toto?

I explained the Hollywood transition of Dorothy's silver to ruby red slippers to some friends at dinner Friday night, and they were fascinated. Are we witnessing some personal fiscal rennaissance from this economic turmoil?

GoldiloxWhat About Silver Demand? - David Morgan#1351668/21/05; 09:12:19


Long-term studies of commodity prices have shown that over time, commodities return to their mean. This "average" price, however, can remain outside of this range for a very long time. Silver has certainly remained outside of its purchasing power range for the past 25 years, and remains so today. Therefore we fully admit that having this knowledge for the past quarter-century was of little practical value. However, things are changing rapidly in the world's financial landscape, and the new silver age is rapidly approaching, first from a technological standpoint and later from a monetary and wealth building/preservation perspective.

After Warren Buffett announced his silver purchase in 1998, Forbes magazine ran a brief article on silver and included a very interesting graph. (visit web site) This graph provided 600 years of silver prices in 1998 dollars. So, all the inflation is taken out of the equation, and the prices reflect silver's true value. In constant dollars, silver's purchasing power averaged $150 per ounce in 1998 dollars for 600 years. This is the average purchasing power for 600 years; obviously, silver has nothing close to that "value" today, which provides one unbelievable investment opportunity.

The question becomes whether silver will ever reach either the $150 nominal value or, better yet, the purchasing equivalent of the 600-year average? According to long-term historical standards it must, but will we all live long enough to benefit from this? The Silver Investor is on record as stating that silver could trade as high as US$100 per ounce in nominal terms and perhaps higher. It is our belief that this will most likely occur on a price spike and the price will quickly adjust downward but establish a new range, perhaps in the US$20.00 area. We are looking at 2007-2008 as the area for a large price spike, but not the final spike. We will need to study the market activity to make our best call at the time.


Interesting analysis weaving the SSI dilemma into the silver supply-demand equation.

GoldiloxA Flawed Mandate - Tim Iocono#1351678/21/05; 09:20:46


So, here we are in the summer of 2005, nearing the end of the 18 year term of Alan Greenspan. We cannot help but marvel at two things - how lucky Mr. Greenspan was to have started his term when he did, and what a poor job he has done in the last ten years.

The reason we say this is that his term has benefited from one notable condition, low inflation (as measured by consumer prices), and Mr. Greenspan has responded to this condition in an inappropriate manner that has resulted in a series of asset bubbles and global imbalances that his successor will inherit.

Some say that the Greenspan Fed has been "fighting" inflation, and that is why it has remained low. This is far from the truth. Paul Volcker "fought" inflation by raising interest rates to near 20% and inducing a recession. The Greenspan tenure at the Fed has been marked by moderate energy prices and inexpensive imported goods from Asia, which have offset other rising prices to keep overall consumer prices relatively low. Some statistical slight-of-hand with inflation calculations and deliberately misleading reporting of inflation (i.e., emphasizing "core" inflation) has helped keep a lid on "reported" consumer prices as well.

Both of the first two factors, inexpensive energy and imports, are beyond the control of the Fed and are not likely to continue.

The Fundamental Error

The Federal Reserve has a three-part mandate for monetary policy - maximum employment, stable prices, and moderate long-term interest rates (it seems "maximum sustainable growth" used to be included here, but no longer). The fundamental error by the Greenspan Fed has been to make monetary conditions overly stimulative in order to facilitate job creation, while believing that it was achieving price stability.

While statistically, these mandates have largely been achieved in recent years, the failure to address asset prices and to consider the effects of trade and currency policies on import prices has enabled the creation of huge asset bubbles and trade deficits, while resulting in job creation of increasingly poor quality. The apparently mistaken belief that energy prices would stay low indefinitely will likely turn out to be simply a case of good timing for Mr. Greenspan and bad timing for his successor.

Collectively, these factors - asset prices, trade and currency policies, and energy costs - have painted a misleading picture of price stability, particularly over the last ten years, which the Fed has failed to recognize. Or, perhaps it has recognized these factors but has chosen to ignore them - for political or other reasons.

The failure to address asset prices and asset bubbles is well known - first stocks, now housing. These prices are not included in the consumer price indices, and this is, in part, justification for ignoring them as monetary policy considerations. The Fed says it is not their job to stop asset bubbles from forming, but rather to mitigate the effects of the bubble's aftermath. This is just nonsense, as will likely be demonstrated as the housing bubble aftermath develops.

The trade and currency policies of recent years have allowed huge trade deficits to develop with our Asian trading partners using what is essentially a fixed exchange rate system. While it is not the responsibility of the Fed to police other central banks and monitor the exchange rate policies of other countries, the Fed should be well aware that the absence of freely floating exchange rates has kept the prices of imported goods artificially low for many years. Instead of higher import prices due to a devalued U.S. dollar, this imbalance shows up in the huge trade deficit.

Finally, the relentless rise of energy costs in recent years brings with it the very real possibility that energy costs over the last twenty years were the exception and not the rule. While energy plays a smaller role in the overall price structure than it did two decades ago, it is still very significant, and if the price of oil continues to rise - to $80, $100, and beyond, as predicted by many - this will dramatically affect consumer prices.


The FED's "inflation fighting" efforts have more closely resembled a fixed boxing match than a true contest, so the judges continue to call the dollar "ahead on points". Monetary inflation has essentially gone hyperbolic since that fateful closed door meeting on Jeckyl Island, rendering the consumer the final loser!

GoldiloxWhat is "inflation", anyway?#1351688/21/05; 09:33:32

If FIAT money is no more than a fiction of "credit and debt", inflation seems nothing more than a premeditated opportunity to plunder the accounting for the benefit of colluding banks, corporations, and governments.

Do we "make money" by riding the coat tails of the inflationists, or if we're lucky, perhaps, maintain an even keel?

So much has been written about the separation of Church and State, but not since Madison and Jefferson have many explored the equally incestuous and pugnatious relationship of Bank and State.

Personal freedom can do nothing but erode while the banksters and high priced corporate lobbyists apply choke collars to Congress and the administration for their own enrichment.

The last highway bill contained 3600 pork riders - that's about 11 for each Congressman.

GoldiloxGOLD - Is it Really all in the Name? - Doug Gnazzo#1351698/21/05; 09:39:31


Why Gold Shines

When money is exchanged for other goods, we do not literally exchange the money for the other goods, but the value that the money represents in other goods. We exchange values for values.

In trade we give goods for goods, evaluating them in comparison to the monetary unit. The money is but the medium of exchange that represents the purchasing power by which other goods can be exchanged for. Money is the standard – for comparison – the measure of value.

Thus money is a receipt for value. The monetary system is an agreement between traders to regulate the issuance of money, to exchange values in terms of the monetary unit, and to keep an account of all such exchanges.

Gold as money is a measure of value. Gold as money is a standard of value. Gold as money is a store of value. The quality or purchasing power of money is more important than the quantity or supply of units of money.

Gold retains its purchasing power through time and over time. Gold cannot just be printed up or made to appear on the ledger by the mere flick of a computer key, it must be mined from the bowls of the earth, by the sweat, blood, and tears of man. This gives gold an inherent discipline from being overproduced at will – by fiat.

Another quality that makes gold so valuable is the fact that it is not consumed. This is best shown by gold's "stocks to flow ratio" – the above ground stock of gold divided by the annual production rate of gold.

This ratio is approximately fifty to one. In other words, it would take fifty years at the present rate of world gold production to produce the present stock or supply of gold.

Gold's stocks to flow ratio is an important reason why it is deemed to be so valuable, it is not just because of subjective valuation. There is also a cumulative process of subjective valuation that has taken place over centuries of market behavior that has by freedom of choice determined that gold is the most marketable commodity. This means that gold has the least declining marginal utility as perceived by the market.

Thus gold is seen to be the best transmitter of value in time, through time, and over time. This cumulative process has caused gold to be saved and hoarded throughout the ages.

Because gold retains its purchasing power, it is the best store of value – the best store of wealth.

Gold has obtained an objective form of valuation based on its stocks to flows ratio in combination with its many other monetary qualities. This objective valuation has given gold an objective exchange value as well. Collectively, these numerous monetary qualities and functions make gold the most accepted common medium of exchange throughout history.

Although gold has no intrinsic value in and of itself, man has chosen to value gold most dearly throughout the ages. He has chosen gold as the supreme receipt and store of wealth - The Sovereign of Sovereigns.

To believe that gold or any form of money has intrinsic value is to misunderstand the concept and theory of money. This is just what the would be rulers of the universe want – illusion and delusion, as the people can't question that which they know not.

Be not deceived. Gold is most valuable and will become of even greater value, but the value comes from what We The People place on it – nothing more, nothing less. Gold represents a receipt for wealth, as long as man so chooses to accept it as such.

Gold and silver are the best choices of money, history has clearly born this out. Nothing else is needed but the return to Honest Money – Gold and Silver.

GoldiloxMissed Link msg#: 135167#1351708/21/05; 09:45:41

Sorry 'bout that
USAGOLD / Centennial Precious Metals, Inc.A world of gold at your fingertips...#1351718/21/05; 12:26:29">gold -- a global calling card
GoldiloxThe Great Influenza: The Epic story of the 1918 Pandemic#13517208/21/05; 15:57:26

John Barry, author of the above title, is currently on CSPAN describing the issues that exacebated the killer flu epidemic of 1918 as outlined in his history of the 1918 flu crises.

The greatest problem, in his estimation, was the rash of public misinformation that actually impeded battling the epidemic. In comparison, he suggested that Asia's response to SARS was so politically motivated to protect poultry farmers, that had it been as lethal as the 1918 virus, we would probably have seen huge death tolls.

His current concern is that microbiologists have their hands full staying on top of the rapid flu virus mutations and keeping vaccines vital.

Off topic, for sure, but very interesting discussions, given the outbreaks of bird flus and the migration to human carriers recently.

With all the economic "factors" teetering on edge, one wonders how a global or major regional health crisis might tip the scales.

mikalIndians "price takers not price setters", for now#13517308/21/05; 16:11:29 The Hindu Business Line : The changing scenario - G. Chandrashekar - August 22, 2005
mikalTo America: "Get your house in order"#13517408/21/05; 17:59:33

Experts Warn That Heavy Debt Threatens American Economy - Robert Tanner - AP - August 21, 2005
mikalSwim with a golden current or drown#13517508/21/05; 18:28:02 Democracy Is An Illusion - Foreign Bankers Hold Our Purse Strings - Henry Makow PhD - August 21, 2005
Excellent short treatise and entreaty concerning money awareness.

SmeagolWe owe? we owe?#13517608/21/05; 19:02:14

Regarding the comment in the article linked by Ssir Mikal:

"You owe $145,000. And the bill is rising every day. That's how much it would cost every American man, woman and child to pay the tab for the long-term promises the U.S. government has made to creditors, retirees, veterans and the poor."

Sss... it irritates uss... we never understood where people seem to get this notion that ssomebody owes ssomeone else anything they never agreed to, or that has been sspent without their permission! >8-(

Forty five thousand,
plus another hundred grand,
they say we owes? HA!


GoldiloxLittle League Update#13517708/21/05; 20:12:28

Kalen Pemintel, who tied a LL record yesterday by striking out all 18 outs (he also gave up two runs) in the Vista, CA Little League playoff game, hit an RBI double and a grand slam today to beat Maine 7-3 and advance his team to the final 8.

Not bad for a 12 year-old!

Now all he needs is a "gold glove" for a complete "hat trick."

This is more fun than MLB.

Clink!If ever proof were needed .....#13517808/21/05; 20:42:08

Someone once said that the US and the UK were separated by a common language. Goldilox, your last posting demonstrated that in spades !!!!!!!!
GoldiloxLanguage#13517908/21/05; 20:57:08

@ Clink,

That's NOT Cricket!

mikalBundles of debt and fraying nerves#13518008/21/05; 21:00:40

Major media probably shouldn't be ignored when they run stories like this one recently from Financial Times: "Derivatives Cannot Take the Strain", regarding the short squeeze delivery problem in the 10 year US Treasury, listed future (first derivative).
Excerpt: "The real problem is that the US economy is just too leveraged. Starting with the housing industry, the country is too dependent on derivative markets to create the illusion that interest rate risk can be conjured away. The technical problems of the 10-year are just another early warning sign of this fundamental weakness."

Clink!And on other matters ...#13518108/21/05; 21:04:39,0,3467977.story?coll=la-home-nation

While watching TV last night, I was informed that the President took three books with him on vacation. While musing on the real power of someone who is professed to be the most powerful person in the world, but can't keep his reading material a secret, I considered his list :-
1/ Salt: A world history. Considering that it was used, among other things, to pay Roman legions, it was an early version of real, tangible wealth. We can but applaud. On a personal note, I haven't read the book, but was blown away by the revelations in one of the author's other books "Cod". It might be difficult to believe, but it was fascinating reading.
2/ The Great Influenza: The Epic Story of the Deadliest Plague in History. If anyone has been following Sinclair recently, this should be sending cold shivers up and down your spine. What has he been told to expect ?
3/ Alexander II: The Last Great Tsar. Is George the Second trying to find any lessons from history ? Like how to avoid a revolution ?
All in all, I must congratulate him on an interesting choice, but, in the back of my mind, I have my doubt about the veracity of the list. As the "commentator" said (OK, it was Bill Maher), this is a guy who is probably really excited because it's not every day that you get to go cycling with a guy who has walked on the Moon .....
The attached link gives a little more info.

Clink!Sheesh Goldi !#13518208/21/05; 21:11:01

Not only do you post at virtually all hours of the day and night, but you're hovering here in between times !

There is a riposte to that which was favorite T-shirt material, but I don't have time to find it tonight - got to be up in (wince) less than seven hours. 'Night.


Goldiloxthe Great Influenza#13518308/21/05; 21:11:54

@ Clink!.

I wonder if that's why the author was being interviewed on CSPAN "Book Report" today?

mikalBin Laden and WMD focus of news reports#13518408/21/05; 21:31:41

CBS News | Bin Laden Expert Steps Forward | August 21, 2005
Former CIA expert tells why he considers a Bin Laden WMD attack on US soil most likely.
"Gold, get you some." - Aristotle

GoldiloxAnonymous#13518508/21/05; 22:16:52

@ mikal,

The interesting thing about Anonymous' tale is how cleverly he evades the well-known facts that Osama and Al Qeada were set up and funded under the watchful deep pockets of the CIA in order to do battle with the Soviets in Afghanistan 25 years ago. Remember, Reagan specifically dedicated the 1981 launch of the Space Shuttle to their "heroism". Their funnel for funding was the Pakistani Secret Service, whose director was having breakfast with admin officials in Washington on the morning of 9/11/01, but supposedly the whole arms funneling operation was unknown to him.

Either "the left hand doesn't know what the right hand is doing", or they just don't have the cajones to admit when they lose track of their own operatives.

It smells too much like a disinformation campaign when they purposely omit so many verified facts.

Topaz4 Days of the Condor.#1351868/22/05; 04:35:28

A whiff of an uptick and a bit of positive alt au action should seal Golds short-term fate Today.
I don't know when 451 will go slingshot but I feel you'll be back before weeks end ;-)

mikalBrimelow: No rest in days of summer#13518708/22/05; 07:05:09;siteid=mktw

No rest for the gold stalwarts - Peter Brimelow - August 22, 2005 - MarketWatch
Clink!Dr Paul in fine fettle#13518808/22/05; 07:37:57

Borrowing, Spending, Counterfeiting. You can't get straighter talk than that !

Clink!Conflict of interests#13518908/22/05; 07:48:56,3604,878122,00.html

I have been researching biodiesel since the topic came up at a friend's house a couple of weeks ago. I came across this article from the UK which is from two and a half years ago. I think you can get a number of points from this, not least being the inventiveness of the average Joe. What really disappointed me was the reaction of the Excise people to drivers who were, in their own small way, trying to reduce their country's reliance on imported oil :-


The enterprising motorist was, so the reports suggested, running his diesel-engine motor on a mix of Asda cooking oil and standard fuel. At 42p a litre, the supermarket chain's oil is considerably cheaper than the 73p a litre that even a discounted retailer charges for diesel. The astonishing thing was it worked. Without any need to modify the engine, the motorist could run his car on the mix with no discernible difference in its performance. What's more, instead of diesel fumes, the engine gave off a rather pleasing odour - like frying time at the local chippy.

And if Asda's sales figures were anything to go by, unless he was running a fleet of buses across south Wales, the driver who had been pulled over by the emissions inspectors wasn't the only one. Wind your windows down in a Swansea traffic jam last spring, the rumour went, and the chances were you would think someone was having a barbecue. The local joke was that the whiff was particularly prevalent around the DVLC, the government's national car-licensing department, which is headquartered in the city. It was a nice irony, because, as the cooking-oil driver discovered when he was fined £500 and had his car impounded, the government is not amused by cheap alternative fuel. Diesel is relatively pricey because a large chunk of the cost is made up by duty. Cooking oil carries no such tax. But if it is put to use in a petrol tank, duty is due.

End snip.

Talk about a bizarre tax structure. I can understand that you might have different tax rates for different commodities, and even across similar materials (eg different tax rates between gas and diesel), but to charge different rates on the same commodity depending on what you use it for seems crazy. A good example of arbitrary government fiat !


GoldiloxBiodiesel#13519008/22/05; 08:17:51

I also saw a snip on one of the auto shop TV shows where they claimed to use recycled oil from the local fast food fryer, cutting their substrate costs down to their efforts to retrieve and filter the oil. Their enterprising efforts to obtain free substrate cut costs to below $0.50 per Gallon.

A quick Google revealed a number of kit vendors on the internet.

In the US, this violates no laws yet, as long as the fuel is NOT resold, as fuel taxes are imposed on the retail vendor.

If it gains any popularity, I expect to see something similar to the home-brewing legislation battles of the 1970's.

GoldiloxRon Paul at the dinner table#13519108/22/05; 08:29:52

The media has made their mark. Most public mention of Dr. Paul's fiscally conservative ideas brings up the "Nut in Texas" epithets, as people have been brainwashed by Cheney's "deficits don't matter" drivel (as he wipes his chin and pockets a cool $million in annual Halliburton pension - no conflict of interest there, of course).

When asked "How their own deficits are going", they usually reply, "Government is different!"

"Please don't confuse me with facts, kind sir - my politics are powerful enough to spend their way through any fiscal abuse!"

GoldiloxDouble top#13519208/22/05; 08:35:25

@ Gandalf,

Looks like the double top signaled fading of the USDX after all. Maybe just enough gold pundits were warning of $ strength to "let it fall" for now.

Gandalf the WhiteYES, Sir Goldilox !#13519308/22/05; 09:12:58

The US$ looks like it is "SICK" and the YELLOW is starting to be "looking good" !
(AND it shall be "looking good" far longer than just today).
GET all the YELLOW that you may!
(and get ready Sir Slingshot, to publish !!)
TO THE MOON, Alice !
PS: Thanks to all for the GREAT postings.

USAGOLD / Centennial Precious Metals, Inc.Especially for those who are taking their first step...#13519408/22/05; 10:21:41">gold ownership starter kit
SurvivorConflict of Interest Not Unique to England#13519508/22/05; 10:29:36

Clink!: "but to charge different rates on the same commodity depending on what you use it for seems crazy."

Survivor: Same thing in Canada, and also here in the U.S as far as I know. Farmers and other off-road users buy motor fuel much cheaper than folks who buy fuel that has been taxed for use on the public roads. In Canada the off-road fuel is dyed purple. I've been stopped at "fuel check" road blocks in rural areas. They siphon enough fuel from your tank to check the color.

TownCrierGold refining and smelting giant looks abroad#13519608/22/05; 11:16:57

(Mining Weekly) -- South Africa's Rand Refinery Limited -- the world's biggest single-site gold refining and smelting complex -- is wooing gold producers and generators of smelter feedstock beyond South Africa in its ongoing and energetic pursuit of new business...

While South Africa remains the world's biggest producer of newly-mined gold, volumes have fallen steadily in recent years, most recently as result of mine production cutbacks due to the strength of the rand and consequent weaker rand gold price.

...Kenny believes the same guarantees of quality service, competitive pricing, secure infrastructure and efficiently-managed logistics that have proved attractive to African producers will be as attractive to other producers internationally.

"We have had to satisfy our new clients that we have adequate financial arrangements in place with reputable institutions to pay them on delivery for their gold and that, technically, we are able to meet their particular refining requirements.

...Kenny stresses that distance, the management of logistics and security should not be deterrents to prospective international clients for either Rand Refinery's refining or smelting services.

"We have well-established relationships with South African Airways and other international airlines regarding the inward passage of dorÈ and the outward passage of refined gold; and we tackle security through our own personnel and reputable security companies with international standing. Our own secure vault at Johannesburg International Airport also plays a pivotal role," he says.

Rand Refinery makes much of its conferred credentials. It is one of 56 refineries worldwide on the prestigious London Bullion Market Association (LBMA) Good Delivery List, which is widely recognised as representing the 'de facto' standard for the quality of gold and silver bars. It is one of just five refineries approved by the LBMA as a good delivery referee, responsible for the testing of samples from existing and applicant good delivery refiners in support of the LBMA's good delivery system.

Most recently, Rand Refinery was the first refinery in the world to achieve accreditation by the Dubai Metals and Commodities Centre in terms of its newly-launched Dubai Good Delivery Standard. Accreditation requires refineries to maintain strict standards of creditworthiness, financial strength, operational competence and superior production procedures.

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

It is good to see an emphasis placed on both payments and upon security of the metal's quality, delivery and vaulting. By contrast, merchants and bankers of "paper gold" have only ever worried about whether the payments rolled in in an orderly fashion, and whether they could maintain the collective illusion that account statements and/or contracts were as good as the real thing.

It is good, also, to see progression of the Dubai gold exchange. Although it is not mentioned here, I particularly like Dubai's emphasis on standardizing small gold bars as an alternative to the hefty 400 oz London Good Delivery bars. This hints at progressive thought and comprehension of the future physical gold market in which a profoundly higher market value will warrant smaller bars to foster widest possible liquidity among participants so as to facilitate a most reputable global benchmark of price discovery.


TownCrierCentral bank reserves in transition -- thoughts to explain the flat yield-curve "conundrum" and gold#13519708/22/05; 12:15:15

Here is a modified format that should slightly improve readability from Friday's presentation of this material.


GoldiloxUse Taxes#1351988/22/05; 12:46:45

They're certainly not that unusual. When I was a practicing chemist in the "old days", we got 99.99% pure grain alcohol (labeled ethyl carbomol to keep the non-chemists from recognizing it) with exempt "laboratory use" tax stamps. We only broke the rules around the holidays, when they made incredibly powerful "screwdrivers".

Lots of OJ was brought into the lab in December. Lab security always wondered who snuck in the hootch, as it was, of course, strictly prohibited. It was right there on the reagent shelf all the while!

Actually, it's not much strangeer than different tax classifications of gold as "jewelry or money".

Chris PowellGATA press release on Treasury Department statement#1351998/22/05; 13:33:47

Treasury Department claims the authority to commandeer any financial instrument, not just gold and silver, in an "emergency."
USAGOLD Daily Market ReportPage Update!#1352008/22/05; 14:54:52">
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

August 22 (from Reuters) -- Gold futures in New York bounced from a near two-week low to end higher in light trading on Monday, lifted by dollar weakness that increased the metal's allure for investors.

COMEX December gold contracts rose 80 cents to $443.

Gold has re-coupled with the euro's moves vs. the dollar in recent days and that relationship remained the key driver for the market at the start of the week, dealers said.

"The gold/euro correlation seems to be getting back in place," said Paul McLeod, vice president of precious metals at Commerzbank in New York.

"But I would add that the markets are very quiet. These are the dog days of August, and with a lack of any news story, we'll just probably drift along and follow the euro," he said.

No major U.S. reports are due until Wednesday, when figures on durable goods orders are released. Markets also are awaiting a speech Friday by Federal Reserve Chairman Alan Greenspan.

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

TownCrierCB gesture of gold, symbolism#1352018/22/05; 15:12:40

HEADLINE: Central bank donates special gold, silver coins to war memorial

BEIJING, Aug. 22 (Xinhuanet) -- The People's Bank of China, the country's central bank, Monday presented a set of gold and silver coins marking the 60th anniversary of the War of Resistance Against the Japanese Aggression...

The set, including a gold coin and a silver one, was issued by the People's Bank of China on August 15 to commemorate the victory of the Chinese People in their war against Japanese aggressors and the world's war against Fascists six decades ago.

The serial number of the authentication certificate of the coins is 815, which was chosen to mark the special day of August 15, 1945, or the end of World War II.

[The obverse of both coins are the same whereas the] reverse side of the gold coin has designs of Beijing-based Lugou Bridge, a pavilion and a tablet with words of the 60th anniversary of the victory of the War Against Japanese Aggression and the victory of the World Anti-Fascist War, while that of the silver coin bears the scene of mass celebration of the victory of the anti-Japanese war and the design of Baota Mountain in Yan'an.

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

To be symbolically associated with gold, specifically, it is hard to conceive of a more fitting icon than a bridge.


R PowellBuffett and oil#1352028/22/05; 15:34:31

The link goes to a short article in which someone....someone...has assumed that Buffett believes that oil prices have peaked, no time-frame given, as he is reportedly on the verge of selling shares in a Chinese oil company.
What does one do with huge profits from oil investments..? Maybe he'll add to his silver collection..?

Black Blade; 17:30:48

The Simple Facts - "Sweet and Sour"

Dennis Erectus (aka Black Blade)
August 22, 2005


He financial media continues to trot out alleged "energy experts" to tell investors that there is plenty of oil in inventory and that the commodity is grossly over priced. The excuses are varied but usually boil down to the same moronic arguments that energy is an unimportant commodity because it only represents a small portion of the Gross Domestic Product or is represented by less than 10% of the S&P 500 stock index. Another stupid argument is made consistently that there is an overhang of crude oil in inventory, and that inventory is greater than the previous year.

I won't belabor the point of the importance or unimportance of energy. Just try to live in today's world without it. As far as the amount of energy as a component of the GDP or how much is represented in the S&P 500 as a reason for valuation is so stupid that I won't even waste anymore breath on this ridiculous contrivance. Instead I will simply "state the facts".

Black Blade: Peak Oil is already here, or at least Peak Oil for the desired grade of the commodity. The higher demand and higher costs have not shown up in the twisted and convoluted BLS and Fed data - at least yet. Be assured that you want protection from the devatation about to steam roll over your investment portfolio. Better get at least a modest precious metals position soon - the sooner the better IMO. Our host here has the goods and we have the need!

Black BladeThe Simple Facts - "Sweet and Sour"#1352048/22/05; 17:47:28

Sorry, the title should have been:

The Simple Facts - "Sweet and Sour"

- Black Blade

MKChris Powell: How You Can Survive a Potential Gold Confiscation#1352088/22/05; 21:04:17

The fact that the government retains the power to confiscate gold is well-known to clients of this firm and has been for some time. Gold ownership in the United States is a privilege, not a right, and as distasteful as that might seem, confiscation is a potential reality, like it or not, all prudent gold owners should incorporate into their thinking....

For complete commentary, please visit the link provided above.

OvSGold-Confiscation#1352098/22/05; 21:05:03

MK. Thank you for thinking. OvS
MKFor memo and more info. . .#1352118/22/05; 21:38:04

This should get you to our information packet page.
SmeagolAlternatives...#1352128/22/05; 22:24:02

(Smeagol mode off)

Thank you, Sir MK, for posting the confiscaton. It is an uncomfortable subject but it deserves its share of time on the Table alongside more pleasant matters. In my humble opinion, a confiscation order should be met by the people with silence, and no gold, on principles. In that time, those responsible for the mess deserve nothing but the hightest contempt, and hard time.

I notice USAGOLD also sells gold chains. It would seem to me these would also be a good alternative because they are in no way connected with national 'money' gold - coins or bullion. And jewelry may be easier to leave the country with. Confiscation of jewelry has not been discussed as far as I know. Thoughts?


Smeagolcorrection#1352138/22/05; 22:26:08

In my previous post,
"confiscaton" = "info on possible confiscation."


SmeagolSeeing red through gold-colored glasses#1352148/22/05; 23:37:44

(Smeagol mode still off)
My apologies... when I get TICKED, my spelling quality may suffer. I was thinking of "highest" and "height of" at the same time. "Hightest", though, as in high-octane, does pun the current gas price irritation, also caused by THEM. Okay, I'm reaching...

In the gold/economics/market/personal property arena, "confiscation" of anything is my THIRD RAIL.

I toy around and experiment with high voltage as a hobby (among others) and while getting an unexpected jolt from a neon transformer won't kill me, it makes me want to pick up that transformer and throw it across the room (but I don't - I'm not the violent type, ask any of my friends)... it's just that some things REALLY get under my skin. THIEVERY UNDER COLOR OF LAW is one of them. I would rather throw what gold I have in the Sea than let free-spending THIEVES backed and immunized by the full faith and arms of the United States have it.

They have "eaten out (your name here)'s substance" so many times before. How much more of this kind of behavior will Americans and the world put up with? IF they try to STEAL America's gold-wealth again, I say "Hang 'em high!" with a rope of gold (fume...fume...breathe slowly...count to ten...think peaceful thoughts...maybe a nice contemplative haiku will calm me down...).

They suck our wealth-blood
while we faint on their tread-mills
May they choke on gold


SmeagolSigh...#1352158/22/05; 23:51:15

...okay, I'm done ranting. Perhaps I should look at things Another way. What will DISSUADE the USA, or other powers, from confiscation? What will PERSUADE them that it would not be wise, and that it is best to let things unwind? What can be done to EDUCATE them into common sense? Can it be done?


Chris PowellGATA's correspondence with Treasury Department#1352168/22/05; 23:51:39

MK, thanks for your thoughtful analysis of the Treasury Department's statement to GATA. Our correspondence with Treasury is meant for public use so please do with it whatever seems appropriate. I take some consolation from Treasury's declaration that EVERY financial instrument, and not just gold, silver, and mining shares but even the
pipe-dreamiest technology stock and every 6-year-old's piggy bank, is potentially a target for this government of ours already contemplating going wildly out of control. The only option seems to be to get it back under control. A big job ahead for every citizen.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

riding-bittsTreasury Department's "claim" on assets#1352178/23/05; 01:36:51


Please review the history of the "Assignat" of France from about 1760 to 1789 (1789 being the year of the beginning of the French Revolution) for the answer to the response of the US Treasury to the query from GATA......

TopazFree-Range Gold.#1352188/23/05; 01:57:00

Curious range trading of late with PoG rising and falling WITH Buck for the most part, but managing to get back to status quo by the close.

Battery Hen--FreeRange Hen--Eagle is hardly a natural sequence, but if you're already an Eagle, you never WERE a Hen anyway!

CoT looks to be holding around last weeks 331K and Del'ys Yesterday was Blot,Zilch.
Aug Deliveries look pitiful given the perceived Bullion situation so this could explode any old tick imo.

TopazCase in point.#1352198/23/05; 02:36:40

A few minutes ago, Buck fell 10 points and Gold dropped a Buck return both to par for the session.
The Invisible HandSorry, if this has been posted before#1352208/23/05; 03:12:22

Starting in 2006, Iran will start up an "oil bourse", or a stock exchange for trading energy, that will be based on the euro, not the US dollar. While this may seem innocuous, it will be a grave risk to continued American global hegemony.

BelgianUSA - gold confiscation !?#1352218/23/05; 03:19:00

If,...IF,...US'citizens goldmetal would be confiscated again...what purpose would it serve this time ?
Why were S.Koreans asked to bring in their gold, during the Asian crisis?

What does it say about a nationstate that is forced to collect gold-wealth as to ship it (DELIVER) out of its borders ?

Who are the receivers of (the confiscated) gold and why exactly are those gold-receivers so privileged ?

These questions and their speculative answers are important as to have an idea about gold's (the gold market's) possible evolution.

When we see the shocking all time extreme on the oil-goldprice relationship...we must conclude something out of this (fact)(pattern).

If a peace-economy gradually slides into a war-economy...something is rotten in the $-IMS under wich this planet has been operating.

Main question is not if a gold (or other) confiscation is possible again...but...would any kind of gold confiscation be opportune for those that confiscate ? Interventions + regulations never exclude the needed amount of pragmatism for ever.

If the old $-goldpricing evolves into the new €-goldpricing...the MTM-concept of fysical goldtrade...what would be the purpose to rob citizens from their goldmetal in possession ? In 1933, the purpose was very clear >>> global dollar expansion of the $-IMS, where a global majority agreed upon (then). Any gold confiscation would be self destructing under the present circumstances and evolution. Why should the US (US$) confiscate gold, when the eastern part of the globe (3 million souls) is encouraging its people to accumulate the precious wealthmetal ?

Same goes for the war on oil control. Can one single (singled out) power gain "enough" oil(pricing)control ? I don't think so when observing the new alliances that are being brewed globally.

Why confiscate gold and ship it (deliver) to CBs with rising $-reserves...under the IR conondrum (Randy Strauss) ?

Let the goldprice FLOAT ...change the $-goldpricing regime...let gold-wealth have its appropiate place and function as the universal reserve and live in peace.
One can fight this concept up until pragmatism takes over. It may be closer than we think.

Belgian@ TIH#1352228/23/05; 05:08:50

Today, it is NOT the dollar anymore who is valueing a barril of is oil that is devaluating the dollar currency in wich oil is invoiced. In other words...the "-pricing-" of the dollar unit and the barril are turned upside down.

And the coming civil war in Irak will be (organized) around the distribution of oilrevenues between the 3 communities.
It will also be a matter of oil-pricing.

Expect the same kind of change for gold...not in Teheran...aber in Frankfurt !

Caradoca trigger point?#1352238/23/05; 05:30:17

As posted a week or so ago, Sinclair's "week and a half" as possible point for Au to take off for $500-plus comes due today or tomorrow (depending on whether he meant a 7-day calendar week 0r a 5-day market week). Should make for good watching.


PS for Topaz: Imagine two gnomes from Zurich being offered a choice of strange pasttimes and declining: "Neither foreign financier seized either weird leisure." Might as well shove all the exceptions into one sentence even if the result is contorted.

PRITCHORe Potential Confiscation - - - #1352248/23/05; 06:02:40

Something has been smelling in the "Land of the Free" for a LONG while. Look at the Gold action on a daily/weekly basis(as most of us do)& at the pathetic last minute daily/weekly share market pumps & we see an out of control Bunch of Crooks at work.It's shameful & there's been enough written about it to bore everyone stupid.

Now GATA take the credit( and probably wants a medal) for getting a confession that the crooks will steal your GOLD! Well done GATA! I'm not really amused --it was always common knowledge that a desperate, crooked bunch of thieves would help themselves if & when they wanted to.NOW all the nervous nellies will bail out at the slightest pretext. Well done!

However there is a solution. You don't have to be victims. Shut up about what you have in the way of GOLD/SILVER --even & especially to other family members.Loose lips & all that. If ever there is a call to hand in your PRECIOUS --tell them to get stuffed by disobeyance! It's yours & paid for & you DON"T HAVE TO put your hand up to be raped - -figuratively speaking of course.

Max RabbitzPRITCHO#1352258/23/05; 06:39:54

The stress of confiscation will likey give me a mini stroke. Now where did I put those I forget what....sacagaweas?.......I thought I put everything valuable in my bank safety storage box. What's your name again Mr. Government man? Perhaps a cup of tea while I try to recall the old days?
OvSBelgian#1352268/23/05; 07:39:47

Thanks for putting things in
perspective; as usual. OvS

OvSBelgian#1352278/23/05; 08:21:00

I see the cousins at work again.
As implementors and receivers.
And thinking they can ge away
with it. Pure and very regretable
foolishness. OvS

Topaz@Cardoc ;-)#1352288/23/05; 08:44:00

Those feindish Reich neighbours forfeited science for Sovereign weight?

Them Gnomes do it to us EVERY time!

GoldiloxGreat Question, Mr B#1352298/23/05; 09:00:20

Once again, Belgian asked the question tht most dare not utter,

"Who are the receivers of (the confiscated) gold and why exactly are those gold-receivers so privileged ?"

While the shivering populace is searching for all manner of boogeymen to blame for their collective fear, and politico-religious "icons" like Pat Robertson are calling for a suspension of the Ten Commandments just long enough to "assassinate" Chavez, NO ONE dares ask just who is "profiting" from this turmoil?

Even the claims of CB gold being sold to "feed the poor" ring especially hollow. Just who is receiving that plundered treasure in return for some FIAT to buy "food stocks" - Gee, why not give gold directly to the farmers? There always has to be some bankster "mddleman" to skim the cream.

The wake up call is long past, but the media has been punching the "sleep" button on the Cyclops ad nauseum.

Yet another piece on the missing party girl in Aruba - it suggests to me that Nancy Grace and her angry minions are soooo embarrassed that their "usual suspects" ploy blew up in her face, that they will harp this story until they get their legal "pound of flesh". It so threatens their reputation as super-cops and "defenders" of the weak.

While decrying the barbarism of militant Islam, ruling Christianity is reverting to the torturous tactics of the Spanish Inquisition, with each "moral leadership" trying to outdo the other in "unspeakable terror".

It's truly getting interesting, but like a good drug-store mystery novel, every effort is being made to divert us from the most important clues!

USAGOLD / Centennial Precious Metals, Inc.FREE Gold Information Packet...#1352308/23/05; 09:23:34

BelgianHey Goldi#1352318/23/05; 09:46:50

Was just watching the Pat Robertson thing...and had the same thoughts. Seems it is getting time for strait hard talks and actions. Brrrrrrrr...
TownCrierChina yuan ends firmer as central bank stays out#1352328/23/05; 10:04:58

SHANGHAI, Aug 23 (Reuters) - China's yuan strengthened against the U.S. dollar on Tuesday to close at 8.1012, with dealers saying the central bank was less involved in directing trade compared with the past few sessions.

...One-year onshore forwards were quoted at 7.855 on Tuesday, unchanged from Monday and indicating expectations of a 3.1 percent appreciation versus the dollar in a year's time, but no trades were done, exchange data ( showed.

The onshore forex forwards were launched last week, providing a benchmark for local expectations of the yuan's longer-term appreciation.

Trade has been thin so far as the domestic market is still feeling its way around the unfamiliar product, dealers say.

Investors speculating on a rise in the value of the yuan had turned previously to offshore non-deliverable forwards , which stood at 7.8426 on Tuesday afternoon.

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

I'm posting this primarily to get you thinking generally about this new-fangled "onshore" product.

As it pertains to the evolution of the gold market, especially, I want you to think about the present pricing domination in the market of derivatives and unallocated accounts ("paper gold"), and consider these to be as akin to to the "offshore non-deliverable" products which are also mentioned above.

Benchmark pricing mechanisms DO change, and it continues to be my hope that you begin to see signs of the change in the direction of the prevailing winds.


USAGOLD / Centennial Precious Metals, Inc.Put a Solid Foundation Under Your Portfolio#1352338/23/05; 10:10:07

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements

Buongiorno!Sirs Smeagol and MK--Confiscation!!#1352348/23/05; 10:41:19

"Things that go bump in the night"--enjoyed your posts regarding confiscation. Sometimes, ideas that worked last time may not work this time around. But it is a good place to start.

This time,I suggest getting as many politicians owning gold as possible. It could take awhile, but hopefully, we may have that. It would be hard to get them to agree to an action that is against their own selfish interests.

Resist any measure that would register firearms--as that will just lead to confiscation. (See England and Australia, recently, and Belgium before and during WWII.) The bad guys would still have their guns, since criminals do not obey the law anyway--go figure. Once disarmed, it will be very hard to resist either criminals or criminal government if they should try something.

Passive intimidation--at the first sign of any such registration or confiscation, camp out in front of the home of any politician, judge, or lawyer involved--raise holy hell, but legally. (All they need is some incident to justify sending in storm troopers--see Reichstag fire, late '30s.)

Do not be misled by old Eliott Ness movies on TV. Federal Police are just that--Federal--and owe no allegiance to local ciltizens or their elected officials. (See Waco and Elian Gonzales episodes.)

FDR's confiscation was reported to me first hand. The FBI agent came to the door and was politely admitted. "Mr. Jones, I have been speaking with your neighbors and they tell me that you have been breaking the laws of this nation. We are prepared to overlook that, and will give you this crisp, newly minted bill in exchange for your gold. Present your gold assets now, or face penalties under the law!" The man was allowed to keep one pair of solid gold cuff links, as they were deemed to be jewelry. (sigh...)

That takes us to the question of jewelry. Although lovely, the 18k stuff just leaves Personal preference, I suppose. Any chance to get our hands on the 22-24k stuff without going overseas? Just a thought.

Also suppose that all of us, esp. MK, may be confronted some day with an Elian Gonzales type raid....front door kicked in, federal thug in body armor brandishing a subgun and demanding our gold (and for MK, his inventory and RECORDS! I know that he would do all he could to protect us, but gummint is gummint....) Not a pretty sight, so we MUST derail this thing at the earliest possible moment and give everyone the idea that such a plan would meet strong resistance.

Lastly, the three instances of raw abuse of FEDERAL POWER referenced above were under the auspices of FDR and his lineal descendent, WJC. Might be a good thing to keep in mind....without putting TOO sharp a point on it.

TownCrierGold output falls 18% in the second quarter#1352358/23/05; 10:48:41

23 August 2005 -- Gold production fell 18% to 72 tons during the second quarter of 2005 compared to the same period last year, the [South African] Chamber of Mines said today.

"The continuing decline on both a quarter-on-quarter and year-on-year basis is indicative of the industry's adjustments to the prevailing economic environment and the restructuring that has continued over the past three years," the chamber said.

...In late March, the country's fourth largest gold producer DRDGOLD closed its loss-making North West mines, which been hard hit by the buoyant rand, slashing output by a third.

Harmony Gold, the world's sixth biggest gold producer, has also struggled with loss-making mines and reported its eighth consecutive quarterly headline loss this month.

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

Risky business. For the security of your savings choose the refined metal rather than investments in the corporations that try to make a viable run through the extraction gauntlet -- between Mother Nature relentlessly ruthless on one side and the government relentlessing taxing on the other.


DemosthenesConfiscation Conversation#1352368/23/05; 11:12:13

Thanks all for the wonderful conversation on confiscation. This is the type of thoughtful analysis that keeps us all coming back to this page. If I may add a few things to the mix...
I like the concept of jewelry as a method of avoiding confiscation, unfortunately jewelry seems a little pricey to do this en masse, but if it your spouse's birthday or anniversary and you are going to get a gift anyway, might as well make it gold(I've have an anniversary coming up and have been eyeing some of the coin pendants for my wife).

I like the pre-1933 coins, not necessarily for safety from confiscation but because I feel like I am holding a piece of history in my hands. That feeling is worth the premium to me.

A thing to remember about records, they can only prove that you once owned the gold, they say nothing about the time you lost it in that poker game with that guy from out of town(was it Fred, or John...). A stash hidden at a safe location( a good idea anyway) will protect against the federal agents barging in, especially if you have some "token" gold to hand over.

I prefer prevention, though. Gold was illegal for more than a generation. With nobody to pass it along and coins scarce, the feeling you get from holding a gold coin in your hand was lost. Nowadays, people are told to contribute to their 401(k) and buy stocks and bonds and you will be taken care of. Few mainstream financial advisors that you see on TV advocate gold. And while I believe that the online brokerages are a good thing, taking investing power away from central advisors makes it harder to(and more important) to educate the masses. It's especially difficult since the average persson that owns gold is not going to talk about it. People will talk about the stocks they bought the other day, but not their onces.

I've said enough, I'll let other people have a go at it.

GoldiloxEqual protection under the law?#1352378/23/05; 11:45:37

When civil rights leaders advocate "civil disobedience', they are indicted for "inciting criminal activity".

When gold-bugs advocate monetary use of PMs, the SWAT and Incendiary teams bust down their church doors with automatic weapons, citing "tax law" offenses by "potentially violent" criminals.

Now we have a self-anointed representative of "the Prince of Peace" using religious "dogma" to incite assassination, but the State Department statement just says, "Robertson is a private citizen, but we don't advocate his strategy". Where were these bastions of "moderation" at Ruby Ridge, Philadelphia Move, and Waco?

No mention of any Justice Department action, but then, Robertson is neither a person of color nor "leftist". I guess it's considered "moderate" to incite murder if you preface your inflammatory remarks in the name of "Jesus" and pay one's "indulgences" to the "high priests"!

On the subject of confiscation, Buongiorno says a mouthful in his comment:

" Sometimes, ideas that worked last time may not work this time around. But it is a good place to start."

Before formulating a "protection plan", it is wise to see what worked in the past and build upon creative evolution of previous successes, knowing full well that these successes will top the list of new "targets".

In addition to financial crisis, I also think expansion of war activities will endanger personal assets, as the "contractors' (aka mercenaries) need to be paid to keep them inciting revolution in resource-rich countries.

The dark ages are again knocking at our door. Are we prepared for the new "Inquisition"?


There is NO safe place to HIDE GOLD in the event of a mandatory confiscation. There is technology capable of finding your GOLD anywhere or in any possible location, especially where it can be retrieved by the owner. If they want it, they can get it, regardless of memory loss or lack of knowledge or evidence of ownership.
Federal_ReservesA look back at the great PANDEMIC!#1352398/23/05; 12:57:33

The influenza pandemic of 1918-1919 killed more people than the Great War, known today as World War I (WWI), at somewhere between 20 and 40 million people. It has been cited as the most devastating epidemic in recorded world history. More people died of influenza in a single year than in four-years of the Black Death Bubonic Plague from 1347 to 1351. Known as "Spanish Flu" or "La Grippe" the influenza of 1918-1919 was a global disaster.
mikalHardest part of retaining gold is deciding when and what to sell#1352408/23/05; 13:20:39

Price inflation and dollar exchange rate deflation are two forms of egregious modern "confiscation", as are asset bubbles, pension defaults and more. History repeats and land-grabs as designated in Executive Orders and Emergency War Powers and various taxes are also forms of modern wealth "confiscation". Gold likely will not be this go around, although various precautions advocated here are excellent and commendable while delineating numerous gov't deficiencies.
U.S. Deep Storage Gold designated by the United States Treasury is also available to use as hard reserves. Though evidence exists to show that what may be in Ft. Knox or Fed vaults is partially sold or leased(exchanged for IOU's), there is no need to go after the U.S. Mint's newly promoted Eagles, nor Maple Leafs, old coins, etc.
Not when you have all that and can do land grabs and taxes. Total US Deep Storage gold then actually theoretically equates to more than enough:
* Federal lands to be opened and/or leased to mining
* Gold in vaults including NY Fed, unaudited Ft. Knox etc.
* Resource-rich private mines or land
* Windfall Profits Taxes and 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. Gold storage has a long tradition. Diverse and sensible bullion and early coinage without fleeting "rarity" is still a bargain though less abundant and in some isolated cases, unavailable. Many different options and strategies will still achieve the same success for all kinds of people.)
If the US attempted confiscation, international credibility would be irreparably trounced, along with trade and crucial investments in bonds, the dollar, equities, capital markets, etc. likely resulting in a return to world war and radical global depopulation.
It'd be like assuming gold isn't the world's premier reserve currency. And as if full-color Gold Eagle brochures, printed out of the U.S. Mint, never touted gold's history, safe-haven function and timeless appeal in elaborate detail since 1986 to clients of gold brokers and dealers.
Gold trade within U.S. borders is not ready to be openly invited to flourish to the places listed above and to every black and back-door market existing or conceivable. Nor to the Carribean, Europe, Hanoi and all points in between where there is already growing competition for existing and future supply and trade.
Today's unprecedented strength of fundamentals and coiled potential, along with political understanding of the necessity of a revitalized US central bank and Treasury gold certificate ratio (or MTM - mark to market) gold reserve function, will allow gold in every currency to realign rapidly.
As a result most individuals and investment funds will be left with scant pickings, at prestigious prices. Such a POG, along with currency depreciation and inflation would "confiscate" a great opportunity from the unprepared.

GoldiloxMass Layoffs Summary#1352418/23/05; 14:24:51



In July 2005, employers took 1,249 mass layoff actions, seasonally
adjusted, as measured by new filings for unemployment insurance benefits
during the month, the Bureau of Labor Statistics of the U.S. Department
of Labor reported today. Each action involved at least 50 persons from a
single establishment, and the number of workers involved totaled 131,326,
on a seasonally adjusted basis. (See table 1.) The number of layoff
events in July rose by 74, and the number of associated initial claims
increased by 3,439 from June. In the manufacturing sector, 360 mass layoff
events were reported during July 2005, seasonally adjusted, resulting in
48,967 initial claims. The number of mass layoff events in manufacturing
was somewhat higher than a month earlier, while the number of initial
claims was lower.


While housing sales are starting to look "toppy", the number of potential buyers continues to decline . . . more "bone pile" fodder.

mikalRestructuring firms salivate over junk bond defaults#1352428/23/05; 15:36:44 Junk bond binge seen fueling restructuring - Reuters - August 23, 2005
GoldiloxSLOW BOAT TO CHINA OR JUNK TALES TO DEBUNK? – THE SEQUEL#13524308/23/05; 16:52:07


Spurred on by Financial Sense's Jim Puplava interview of Matthew Simmons [Twilight in the Desert], I've written about the topic of shipping and crude oil - to varying degrees - over the past few weeks. Then this Bloomberg report fell out of the sky:

Shipping rates drop on high oil
Wednesday, August 17 - 2005 at 10:04

Record oil prices saw supertanker bookings for oil exports from the Middle East fall below the monthly average for 2005, which pushed shipping costs lower, according to Bloomberg report. Shipping rates for VLCCs to Asia dropped by as much as 45% in less than four weeks as the high price of crude hit demand.

Now, as a background to this piece, I would like everyone to know that I spent approximately 4 hours of a day communicating with a few professionals in the shipping trade – discussing the merits of the last piece I wrote, A Slow Boat to China or Hollywood Hubris? In that article I cited VLCC [very large crude carrier or tanker ship] data as a proxy for the Baltic Dry Index [ships that transport dry goods like iron ore or wheat for e.g.]. While the two rates [wet and dry] are highly co-related and traded in sympathy over the relevant time span, I would like to be perfectly clear that there is a difference – in much the same way that while the NASDAQ and DOW are both equity indexes, one is technology laden while the other is composed of large cap names.

*Just To Clear The Air*

While I will admit that not everyone [seemingly few in shipping] believes the Baltic Dry Index [BDI] is capable of being manipulated [very reminiscent of players in the gold market, eh?] the only part of my thesis that anyone managed to poke a hole in was my using ‘net new tanker [wet] tonnage hitting the water’ as a proxy for ships that would be contributors to the BDI or dry index. While I will admit, and gave some ground, that this is an apples to oranges comparison, its relevance in the overall context of the piece I wrote is of little consequence since the movement or direction in rates [for both wet and dry cargoes] was so highly co-related over the relevant time span – namely the past 6 months.

Furthermore, the world's ability to create new ships [shipyards] is very finite. Shipyards are not like Krispy Kreme donut franchises that are capable of immediately ramping output to meet demand. They require large lead time to set up and establish and order books have been "full" now for a number of years – i.e. They [ships] can only be built and enter service in Greenspan parlance – at a measured pace. Shipyards are [and have been] turning out ships as fast as they can – period. The tanker stats already cited reflect incremental net increases [new builds less ships retired/scraped] in tonnage. To suggest that an unusually large number of net new dry bulk carriers suddenly appeared out of the woodwork – causing a plunge in the BDI – is not consistent with the realities of ship building.

For the most part, folks making the assertion outlined above – also contend that China's economy is ‘slowing down a lot.’ My response in this regard is, "Show me the numbers." The reality, dear reader, is there are no such numbers whatsoever, to support this China Syndrome claim and there likely will not be [wishful thinking, perhaps?] - so long as China continues to grow their GDP at a 9.5% clip.


THis contiuum of an article by Rob Kirby has some interesting twists, including a pic of gas lines in China reminiscent of 1970's USA.

I think it may demonstrate, however, some of the strain that high oil prices are beginning to exert on global economics.

USAGOLD Daily Market ReportPage Update!#1352448/23/05; 17:04:52">
The Daily Gold Market Report has been updated.

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Tuesday Market Excerpts

August 23 (from MarketWatch) -- Gold futures logged a second-straight day of gains Tuesday, holding firm near the $445-an-ounce level where the benchmark contract has been for nearly a week now.

After climbing by 80 cents on Monday, COMEX December gold closed at $444.30, up $1.30.

Ned Schmidt, editor of the Value View Gold Report, believes gold is "consolidating from the move up and out of the lateral pattern in which it has been trapped since late 2004."

This consolidation should last most of the week, he said, and would then "prepare gold to set another 2005 high."

December gold rose near $459 in March -- that was its highest since December of last year.

SmeagolQuesstions...#1352458/23/05; 17:50:58

Ssir Demosthenes: "Thanks all for the wonderful conversation on confiscation. This is the type of thoughtful analysis that keeps us all coming back to this page."

We seconds!

Ssir Hoosier Goldbug: "There is technology capable of finding your GOLD anywhere or in any possible location, especially where it can be retrieved by the owner."

Sss... other than metal-detectors, can you elaborate further, precious? We can think of lots of places they would never look.

"If they want it, they can get it, regardless of memory loss or lack of knowledge or evidence of ownership."

But, how much would it cost them to do that, if NO ONE heeded the thief-sirens, and if they had to search (essentially, MINE) for EVERY ounce... scattered hither and yon?

Ssirs Belgian, "Main question is not if a gold (or other) confiscation is possible again...but...would any kind of gold confiscation be opportune for those that confiscate ?" and Mikal: "If the US attempted confiscation, international credibility would be irreparably trounced, along with trade and crucial investments in bonds, the dollar, equities, capital markets, etc. likely resulting in a return to world war and radical global depopulation."

Sss...we think it would... but they who would do ssuch things are not concerned about the long term, only the advancement of their own fortunes at the expense of others, at any cost. To them, you (other human beings) are disposable resources (collateral damage).

Ssir MK, how long does USAGOLD keep records of sales and purchases, and if there is a time limit, are those records then destroyed/erased?

Ssir Boungiorno!: That takes us to the question of jewelry. Although lovely, the 18k stuff just leaves"

Our sskeptical opinion is that 22 or 24 karat jewelry, though prettier because of its purity, might be "reclassified" as bullion in an emergency...think like they do for a moment... wouldn't you consider it?

Thanks to all for chiming in on this mosst important ssubject... keep those Thoughts coming.


PanPressure goes on in Thailand to quell Gold imports!#1352468/23/05; 17:53:42

Traders deny gold speculation

Published on August 24, 2005

Gold traders insist that the increase in gold imports last month was due to a hike in world gold prices, and not driven by speculation, the president of the Gold Traders Association of Thailand said yesterday.

Jitti Tangsithpakdi was responding to a query from the Commerce Ministry about the increase in the value of gold imports in the month against the decline of other commodities such as steel and oil.

"World gold prices rose 5-10 per cent in the month, pushing up the import value," Jitti said.

On Monday, the ministry said it would seek a meeting with gold traders to find ways of reducing the imports amid growing concern that they were not purely for domestic consumption.

The ministry's data showed that gold imports in July rose US$84 million (Bt4.215 billion) from the same period last year. Imports are being closely monitored following steep deficits in trade and current accounts.

Trade deficits in the first seven months of this year amounted to $8.5 billion, while the seven-month current account deficit totalled $6.2 billion.

Jitti said domestic demand increased significantly in July despite the high global gold prices at $430-$440 per ounce. When the baht appreciated to Bt40.90 against the greenback, domestic gold prices increased only Bt150 per 15 grams, which "encouraged many Thais to buy gold as a way to save."

Yesterday, the retail gold price was Bt8,800 per 15 grams (one baht-weight).

Gandalf the WhiteKhop Khun Krup, Sir Pan#1352478/23/05; 18:02:26

REAL gold news from around the WORLD !
Thanks (in English)

GoldiloxThai news#1352488/23/05; 18:12:05

@ Pan,

Isn't interesting how governments fear the "importation" of gold? They cringe whenever it shows up in someone else's pocket, but jump at the chance to sell their own treasury gold.

Wilhelm Reich was so right. It takes a special form of psychosis to qualify for government "service".

GoldiloxTechnology?#1352498/23/05; 18:34:22

Sir Smeagol,

My wide-eyed optimisssstic friend.

"There is technology capable of finding your GOLD anywhere or in any possible location, especially where it can be retrieved by the owner."

Sss... other than metal-detectors, can you elaborate further, precious? We can think of lots of places they would never look.

"If they want it, they can get it, regardless of memory loss or lack of knowledge or evidence of ownership."

But, how much would it cost them to do that, if NO ONE heeded the thief-sirens, and if they had to search (essentially, MINE) for EVERY ounce... scattered hither and yon?


The technology for "getting what they want" is being "refined" in Gitmo and the "Correctional Psychiatric Labs" at Vacaville, because once a confiscation order goes out, any non-compliance is treated as felonious treason! As Bush has so quaintly expressed. "You're either with us, or again' us!" - no other alternatives.

Heeding the lyrics of a 1950's ditty entitled "The John Birch Society", we must remember the hewn cry,

"You cannot trust your neighbor or even next of kin
If Mommy is a Commie then you gotta turn her in"

I tend to agree with MK that in order for things to get that bad, it would probably be prefaced by a currency collapse, but never underestimate the capabilities of an ideal-driven bureaucrat. Staying below their radar is still probably the most conservative approach. Escalation of war drums often brings resource "needs" into the "political arena", justified or not.

Beer Man find your gold ???#1352508/23/05; 18:43:37

If the fed. can do this why not go out & look for the mother of all nugget's ?????? Could they go to my old house & find the ring I lost in a snowball fight, also I can't find my key's ??
SmeagolAch! Ssir Beer Man#1352518/23/05; 20:12:17

O no, not again, not another losst ring!?!


SmeagolO well...sssigh....#1352528/23/05; 20:20:44

Paraphrasing Ssir Goldilox's:
"You cannot trust your neighbor or even next of kin
If Mommy is a Goldbug then you gotta turn her in"

We forgot... you are right, mass ignorance in the government's handses is a Weapon of Gold Destruction. Against that there is little hope.


GoldendomeThe Federal Reserve had been tracking private gold withdrawls since 1915.#1352538/23/05; 20:25:11

Excerpts from, Illegal Tender, Gold, Greed, and the Mystery of the Lost 1933 Double Eagle. By, David Tripp --2004.

On August 4, [1934] Nellie Tayloe Ross [Mint Director] wired the superintendents of the Mints at Philadelphia, San Francisco, and Denver "to proceed with the melting of the general stocks of domestic gold coin." [This is a year and a half since the U.S. gold recalls have been in place.] It was the beginning of the end for all the gold coins stored in the government's vaults. The furnaces at the Mint would now blaze. Each day, eighty-four thousand ounces of gold coin was metamorphosed into bars....At this rate, it would take more than two and a half years to melt the nation's vast hoard of gold coins. [page 71]

When at last the deed was done, the shipments to Fort Knox began. The newly made bars were placed in massive crates made of inch-thick planks of seasoned oak. These were reinforced with heavy straps of cast iron that encircled the lower three-quarters of the crate and looped outwards so that bars could be fitted on either side to carry the fiendishly heavy boxes. Each had stenciled on its side, US MAIL.
Eighteen armored trains made up this granddaddy of mailings. Each shipment carried over three million ounces of gold and was meticulously accounted for... [page 72]

Liberty HeadConfiscation #1352548/23/05; 20:42:58

Remember this, confiscation of gold would be conducted by the same folks who can't keep drugs out of prisons.

Best Wishes

Gandalf the WhiteThe QUESTION is --- #1352558/23/05; 22:29:29

WILL TOMORROW show the US$ chart to be a "Roller-coaster", a "WATERFALL, or the "Plains of Spain" ?
We (Goldhearts) await the vote of the moneychangers !
It could be very good for IT ! Yes, Sir Smeagol ?

GoldendomeAnd the answer is....#1352568/23/05; 22:58:46

Sir Gandi: ....May as well be a waterfall event. There will be more softening economic data--not good.

Oddly enough, sales could remain firm, while firms go bankrupt. Higher prices paid for fuel may fuel sales figures, while they crush sales elsewhere.

SmeagolWoo-hoo!#1352578/23/05; 23:15:29

Yess, O Wizard White! We are enjoying the easy log-ride down the dollar-rapids you kindly post! >THUMP< Ai! What was that bump and dip... a boulder made of IT? (grin) ~8-)


GoldiloxOne last gasp at the resistance?#1352588/23/05; 23:29:14

Oh Wizard,

The ESF boyz are taunting you again this even with a run on the 88.50 resistance line. Time for some powerful spells to overcome their powerful smells?


SundeckThings in a muddle?#1352598/24/05; 06:03:46

Maybe it's just me, but everything seems to be in a directionless muddle at the moment...I sense we are in a transitional state...but I am unsure exactly where we are transitioning to...funny feeling...perhaps just a "planetary alignment" of transitional events... Here are some, in no particular order:

- Yuan dollar peg transitioning to basket valuation
- Significant "Gaza-transition" in Palestine...real progress(???) transitioning from ugly stalemate??
- Iraq war transition from "popular" to "unpopular" in US public opinion
- Uranium transitioning from "unclean" to "kosher" energy fuel
- Oil transitioning from supply surplus to supply deficit
- Oil production transitioning from "increasing" to "decreasing" volume (Hubbert's Peak)
- Oil marketing transitioning from dollar-exchange to dollar plus euro-exchange (Iran)
- Gold mining input costs transitioning from "benign" to "malignant" - especially energy and labour costs
- South Africa transitioning from major, profitable gold producer to producer struggling to stay above water
- US dollar transitioning from "as good as gold" to "not worth the paper it is printed upon"
- US transitioning from virtuous creditor to derelict bankrupt
- US evangelists (Roberston) transitioning from "overt virtue" to "overt thuggery"
- US citizenary transitioning from "confident freedom" to "frightened wariness"
- "secular rationalism" transitioning to "dogmatic ideology"
- "Western" dominance transitioning to "Eastern" dominance (or at least, equality)
- Dow uncertain whether to go up or to go down
- Yield curve transitioning from normal to inverted

...maybe there are it different from any other era???

Maybe Sundeck just has a "touch of the Sun"??


contrarianTransition Period#1352608/24/05; 06:27:25

I do think your comments are on the mark. The risk of the yield curve inverting is an especially portentous omen, and that could spell dollar disaster. The slow nature of this transition implies the seriousness of what is to follow, and perhaps it may make the 30s look like a picnic. But I do think this is one of the best comments I have heard about what is going on economically and societally. I know that on Wall Street, everyone is perplexed, as the old models just aren't working and your guess is as good as mine!

This is truly a transition period, but when the train comes rolling in, watch out!

masOil/Water#1352618/24/05; 06:39:30

Heard that the water injection in Saudi is running at 11 million injection with 7 million oil output. Source, people on the ground.
BB, you may wish to reconfirm, but if true then times/production are changing fast . Reserves, what reserves.
Got a smaller car?

GoldiloxU.S. durable-goods orders fall 4.9%#1352628/24/05; 08:15:00{F3C6F7A6-C3F8-494C-8FF3-101C39D5807F}&siteid=bigcharts&dist=bigcharts&


WASHINGTON (MarketWatch) -- In a broad retreat after three straight strong months, orders for new durable goods decreased 4.9% in July, the Commerce Department estimated Wednesday.

This is the largest decline in new orders since January 2004.

Orders were dragged lower by a 16.6% decrease in defense orders and a 20.2% drop in civilian aircraft.

The outlook for business investment also dimmed as core capital-goods orders fell 3.7%, the largest decline since last October.

The drop was sharper than expected. Economists had forecast a 1.5% drop in July durable-goods orders. See Economic Calendar.

The dollar was weaker and stocks slipped in reaction to the report.

Economists were generally unfazed by the decline.

The data on new orders and shipments of durable goods tend to be very volatile from month to month, so economists prefer to focus on longer trends spanning a quarter or a year.

"We do not see this decline as anything more than statistical noise at this point. Despite the 4.9% decline in July, over the last three months, durable goods orders have risen at a 17.0% annualized rate," said the economic team at Bear Stearns in a note to clients.

Durable orders in June were revised to a 1.9% increase from the 2.8% rise previously estimated. Durable-goods orders jumped 7.3% in May.


All over the map. This is not good news, but is widely accepted as too volatile to perform pin-point measurement. Early SM reaction was strong and down, but seems to be tempered by better housing data.

Gandalf the WhiteWELL, thems ESF Boyz tried, BUT ----#1352638/24/05; 09:13:22

The US$ is under the 88.00 level AGAIN, and seems to not be able to break that RESISTANCE LEVEL !
This could be the start of a GOLDEN BREAKOUT !
Hold on to your Yellow tightly.

Belgian!#1352648/24/05; 09:16:54

Sundeck : I do fully agree with the (correct) conclusion of your observation. Day after day we see this confirmed in the behavior of the financial/monetary/economic parameters under hyper intervention-regulation.

Mas : There is still plenty of oil/gas ! Otherwise the building big picture would look completely different .

osa104cForget ME (not)#1352658/24/05; 09:27:05

Keeping your "precious" safe is serious business. Maybe this will provoke other ideas:::::

THE MIDNIGHT GARDENER Burying your gold and silver is one solution to the problem. You'll need several lengths of PVC pipe (available at any hardware store) sufficient to hold your coins. A foot of 6" diameter PVC pipe will hold about $100 face value US 90% silver coin. At the same time, for every container you plan to make, buy one round cap end and one screw-top end. Be sure to buy plenty of PVC pipe cement and Teflon sealing tape. If you don't have a hacksaw, you'll need that, too. If you've never worked with PVC, be sure to ask the hardware store sales clerk how to do it.

MAKING A BURIAL CAPSULE Cut the PVC pipe to a handy length, not more than 18". Prepare the surface of the end and the inside of the cap with steel wool, apply PVC cement, and stick the closed cap on one end.

Prepare the surface of the other end, apply cement, and cement in place the screw-top closure. Let it sit 24 hours, and your Midnight Gardener capsule is ready to use.

Before you bury it, however, you'll want to drive out all the moisture (very important for silver). Turn your oven on to its lowest temperature ("Warm"), and place your Midnight Gardeners in the oven.

Leave them about 15 minutes, then take them out of the oven, put in your coins in, and screw down the closure. Be sure to put Teflon tape on the threads before you screw down the closure. If you set your oven at a temperature that is too hot, you will have the biggest mess in your oven since Oven-Off commercials. Remember, PVC is plastic, and you only want to warm it enough to drive the moisture out of the air inside.

BURYING THE CAPSULE now you are ready to bury your Midnight Gardener. But how will you remember where you buried it? Best to plant a bush over it, or measure an exact distance and direction from some landmark not likely to move, i.e., the corner of your house, a fence post, etc.

Bury it at least three feet down!!! Cover it with eighteen inches of dirt. Place some old scrap metal in the hole. A junk alternator is perfect. Then fill rest of the hole. If anyone with a metal detector searches your place, he will dig and find the alternator, and, you hope, give up.

The best security here is to buy six or eight old alternators, and bury them randomly all over your yard at different depths. Now the searcher is looking for a needle in a haystack. Obviously, the Midnight Gardener method of hiding gold and silver is not recommended for storing items you might need frequently or often.


osa104cOOOppps#1352668/24/05; 09:30:27

forgot to post URL.....plagiarizing me…
GoldiloxStealth#1352678/24/05; 10:02:50

The Midnight Gardner story is cute, but if you have enough privacy to accomplish this without your neighbors wondering what kind of nut is out burying parcels in the yard and planting bushes after midnight, hiding goodies is probaby not that big of a deal.

Disclaimer: I'm not revealing how or where I might hide any precious metals that I do not really have!

Topazalt-Gold and stuff.#1352688/24/05; 11:48:42

PoG looks a bit weak-kneed here but is holding up pretty well in current no-delivery-Delivery period.
Three sessions now and no del'y ...this PoG pups going feral, and it's got very little time left, say 'till next Wed to settle what I estimate will be somewhere between 4 and 20K Contracts.
The CoT next Fri (for Tue) will reflect the markets current neutrality imo but I'd be expecting increased action for the rest of the week.

This inversion thing is intriguing ..Mr Greenspan went on a rate-hike rampage '97-2K until the curve inverted, SM tanked and the Fed promptly scurried back down to all-time lows.
Clearly, a salutary moment in money management, which saw the Market hand out a "who's the Boss" lesson to the Fed, will be repeated again shortly ...the difference this time, Ground-Zero (at the short end) is a LOT closer now than then as our long dated T's are there already!

Will they hang on for a Flat earth Systemic melt-down, or opt for an air-burst?
...whatever they do our Gold will "inevitably" ie: not necessarily consequently, prove a good radiation barrier as it has done time and time again.

contrarianLayoffs/Transition Period#1352698/24/05; 12:50:29

From It does appear we are in a transition period as per earlier posting...the end of the agar and the depletion of the wealth...and the oil too!

Mass Layoffs Up

New figures out from the Department of Labor are due out this morning are sure not to get much attention in the mainstream media because they don't paint a picture of the vibrant job growing economy that DC likes to talk about.

In July 2005, employers took 1,249 mass layoff actions, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Each action involved at least 50 persons from a single establishment, and the number of workers involved totaled 131,326, on a seasonally adjusted basis. (See table 1.) The number of layoff events in July rose by 74, and the number of associated initial claims increased by 3,439 from June. In the manufacturing sector, 360 mass layoff events were reported during July 2005, seasonally adjusted, resulting in 48,967 initial claims. The number of mass layoff events in manufacturing was somewhat higher than a month earlier, while the number of initial claims was lower. (See table 1.)
As we see it, the mass layoffs are only a simply symptom of a complex socioeconomic problem. The problem is that the world is in what I'd have to call "Last days in the Agar mode." If you think back to junior or senior high school biology, one of the experiments often used is to make some nutrition media (called "agar") and then introduce a bacterial into it. What happens? Well, at first, the agar supplies the nutrition and the bacteria grows like wildfire - soon encompassing the entire surface of the agar media.

But then, a funny thing happens: the bacteria finishes eating all the available nutrients and the whole dish dies off. So it goes with last-ditch capitalism. Rather than focus on spreading around the wealth and the work behind it, America has become engaged in "end of agar" behavior which means eating up all remaining industrial nutrients.

USAGOLD / Centennial Precious Metals, Inc.Especially designed for those who are taking their first step...#1352708/24/05; 12:56:16">gold ownership starter kit
Bulldog 24 hour gold chart#1352718/24/05; 15:16:23

It seems that the 24 hour gold chart plunges just before noon on too many days. Any explanations?
GoldiloxPoG Action#1352728/24/05; 15:59:32

@ Bulldog,

Most PoG action occurs at the following three hours nearly every day:

1) London open - first hour
2) NY open - first hour
3) NY close - last hour

Your observation is behind door # 3.

TownCrierSundeck, another sign of transition#1352738/24/05; 16:02:42

You know how the markets tend to carefully parse things like the FOMC statement and hang on the potential implications of every nuance of change in wording, such as whether the Fed alters its use of the term "measured" with respect to interest rates?

To build upon your list, maybe another sign of change is similarly evident by parsing the standard phrasing as used and frequently repeated in Reuters reports on the gold market.

They used to say something along the lines of---

"A lower dollar often benefits gold, which is priced in dollars, because it becomes cheaper for foreign investors."

But now they say,---

"A lower dollar usually lifts gold, which is mostly priced in dollars worldwide, as it gets cheaper in key overseas trading areas such as Asia and Europe."

Note the shift in pricing rhetoric -- from an implied ABSOLUTE pricing in dollars, to the current form in which gold is merely "mostly" priced in dollars.

Significant? I don't know. It's "only" Reuters, after all. It depends on how carefully orchestrated these things actually are. In other words, who is it in the back room that provides the Reuters reporters with its reference book of 'canned' phrases, and what motivated the change?


USAGOLD Daily Market ReportPage Update!#1352748/24/05; 16:14:28">
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

August 24 (from MarketWatch) -- Gold futures lost more than $2 but closed above a two-week low Wednesday, as traders took the market's temperature and gauged interest for the yellow metal.

COMEX December gold contracts closed down $2.10 at $442.20, matching Friday's level.

"The dollar turned south, thanks to a surprisingly large drop in durable goods orders in July, and gold curiously turned down along with it," said Brien Lundin, editor of Gold Newsletter. Weakness in the greenback usually attracts buyers into the gold market.

But "investors are caught in a tug-of-war between conflicting economic and technical indicators, with many responding reflexively to every new headline, while others are stuck like the proverbial deer in the headlights, looking for some trend," said Lundin.

For his part, Lundin said that the price action in gold "has been extremely constructive, and argues for higher prices heading into the fall."

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

TownCrierGold prices to go up in 6 to 12 months: GFMS#1352758/24/05; 16:23:52

Mumbai,August 25, 2005 -- In the next six to twelve months, gold prices are seen to be extremely volatile and are expected to touch $500 per troy ounce, according to Paul Walker, chief executive officer, GFMS Ltd, a London-based consultancy.

"With the twin-deficit problem in the US, and the country borrowing to pay the interest on borrowing, the imbalances are too large for the economy to pick up in the near future. In this scenario gold is seen to be distinctly up," Walker said speaking on the sidelines of the India International Gold Convention in Mumbai.

As far as India goes, an expected normal monsoon, with a fairly robust economy is expected to spawn unprecedented demand for the yellow metal in the coming few months, Walker pointed out.

"The demand from India is likely to be the strongest we've seen since 1998," he said. India is already reported to have imported over 500 tonne of gold in the first half of the calendar year, which is almost the entire imports last year, which stood at 560 tonne.

Walker said that the demand for bars and coins was growing at a faster rate than jewellery.

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

Considering the scope of transitions now underway, you can either buy gold now, or else you can merely wish that you had.


mikalAnother Ford downgrade#1352768/24/05; 16:38:47

Just saw a minute ago "Moody's Cuts Rating on Ford Credit to 'Junk'". That's Another big one. Nice cars and trucks though. Too bad they don't have better mileage.
mikal@TC#1352778/24/05; 16:51:28

Well, if "prices were expected to touch $500" that would mean light as a feather, without solid contact and recognizable committment, yes? Nothing to worry about.
How about "demand for bars and coins has exceeded jewelry"- GASP! How can that BE? They must've meant coin jewelry medallions and bars with bezels. ;)

mikalCorrection#1352788/24/05; 17:01:50

"demand for coins and bars was growing at A FASTER RATE than jewelry"
Indian investment in jewelry is a great value and the product bears no resemblence to western jewelry in appearance, price or marketing.

TownCrierSundeck and contrarian, RE: your morning comments on yield curve#1352798/24/05; 17:21:56

What alignment of perceptions and conditions do you see as driving investors toward an actual inversion of the yield curve?

I can understand and explain a flattening to my own satisfaction (see hyperlink), but predictions of an actual inversion, to my mind, would imply that all participants have lost their marbles -- and by that I mean their capacity for rational thought and action. Would all parties so easily forget the nature of a dollar and whence it springs forth?

Or are you suggesting an underlying rationality of significantly sized influence that would be capable of perpetrating a seemingly irrational condition (inversion) -- against the counter-balancing forces of other rational participants -- as a means to an ultimately rational and desirable end, irrespective of taking conventional paths to get there?

Simply put, I'm curious to hear more of your inversion thoughts, especially as they may compare or contract with my own previously offered yield-curve thoughts and the driving forces there (link).


GoldiloxStocks Tumble, Record Oil Price, Gold in Lock-down#1352808/24/05; 17:48:40


Stock index futures were pounded lower in pre-market trading when the Commerce Department announced U.S. July Durable Goods Orders fell a whopping 4.9%, following consensus expectations for a decline of 1.5%. The dollar moved lower with the announcement Treasuries caught a bid to move interest rates lower with the weak economic news. When stocks opened for trading, the Dow Industrials fell 35 points in the first ten minutes, but the sell-off sure didn't last long. Within an hour the Dow turned positive and the NASDAQ posted double-digit gains.

Similarly, when the weak durable goods numbers came out, gold popped higher by two dollars and silver was up a few pennies, while the dollar began to sink. Gold was given the "brick wall treatment" with the spot price threatening to break above the $440 mark. Have a look at the Kitco 24-hour chart to see the five dollar take-down in gold.

Also, note the spot price has made five attempts in the last three days to break through the $440 level, but was met every time with aggressive selling (not the kind of selling that maximizes profits…just pure dumping!). It certainly appears the commercial traders have the upper hand in gold as they expand their short positions. The commercial short positions and increased selling in gold will act as a temporary anchor for silver. According to silver analyst, Ted Butler, the COT's are favorable for an upside move in silver with the commercials reducing their short positions and putting on new longs. I agree with Mr. Butler that we will probably see a nasty shake-out of the weak longs before the silver price moves notably higher.


Seems Mr. Hartman believes that someone(s) have a vested interest in "hammering It." But I wonder, with so many gold analysts currently predicting a "shake out", might it already have occurred? Remember what they always say about too many people on the same side of the boat.

Beer Man Question RE: metal detector#1352818/24/05; 18:46:45

I don't have a metal detector & wanted to know how good they can tell one metal from another. If a midnight gardener had alternators in their yard could the person tell that from say lead or gold ??? Or if it was PLANTED near an underground pipe or re-bar in concrete could one tell the difference ??? What about silver ?? Would the size make a difference ?? ....................................... P.S. @ Black Blade I saw a post not long ago that had a name other than John Warner in it ..... I thought that was you name ... BTW I have been reading this site for about 5 year's & want to thank you again for all your hard work !!!!!!!!! Also MANY thank's to our host !!!!!!!
Chris PowellPhilip IV's money is still good at the bar and everywhere else#1352828/24/05; 19:17:12

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contrarianInversion#1352838/24/05; 22:14:52

Sundeck et al--
All I notice is that the people I have the chance to work alongside, who are supposed to be experts as to what is transpiring economically, are perplexed by the economic conditions today, and wondered what will happen if the yield curve inverts. It may not have to be a drastic inversion, but perhaps just going a bit south of flat

will cause economic dislocation, perhaps turn the stock market into a tizzy, and, combined with what will surely happen with gold (going to three digits, given that Saudia Arabia is surely approaching point of no return with water pumping (see another post on this page I think), it will turn into a perfect storm, and with the collapse of the real estate bubble by an inexorable hissing sound to give added momentum to this conflagration of unfortunate circumstances.

SundeckOf Agar and (Wo)Men and the Primordial Slime...#1352848/24/05; 23:57:16

Contrarian, TC et al.,

Ahhh yes, Sir Contrarian, there are analogies between the activities of mere bacteria and mere (wo)men... As the agar is infested with bacteria which eventually consume most of the nutrients before starving and drowning in their own effluent, so too does Homo (Un)Sapiens consume all around him and swim around in his own (industrial) effluent...

A not very cheery thought, but one supported by overwhelming observational evidence...

However, all may not be lost! Homo not-very-Sapiens does have some additional means of adapting, over and above those available to the humble bacteria. It would seem that we have the means to store knowledge and communicate amongst ourselves (individually and collectively). We also have the means to understand, to manufacture and to modify in ever more diverse ways...even into the building blocks of our clone and construct new life-forms themselves...

So, on the surface, it would seem that we have more options to pursue our destiny than does the humble bacterium... That may be so, but there is no proof that those extra means will ensure that our species withstands the Test of Time...the sobering thought is that bacteria have been round about 4 billion years longer (on Earth) than has the humble Homo (un)Sapiens.

Nonetheless, we are aware of many of the issues confronting our own precarious existence and I think there is a lot of fat in the system still. Our societies are complex and undoubtedly some parts are brittle and may fail catastrophically. However, other parts contain more redundancy and may absorb change benignly.

It is not just the USA that is gobbling the is happening almost universally...but there are many people and groups who are reacting in more or less sensible ways; in many well as in the USA.

Change will be ushered in by the sisters Choice and Necessity...we just hope that Necessity's hand is not too harsh...

Who knows...we may yet become Homo Sapiens!


Note to TC: I am thinking about your questions on the yield curve and will reply in due course... In the meantime, please note the shows an inverted yield curve during the year significantly higher interest rates of course. I wonder what the factors were on that occasion?



GoldiloxFictional Hedge Fund Collapse#1352858/25/05; 04:06:21


At the conclusion of our first installment, [when free media had been renamed the Ministry of Truth] the employees of our beloved hedgy STCM [Short Term Capital Management] had just been sworn to secrecy – the secret, of course, being the massive gold short removed from their books by Central bankers, Estate Secretary - Roger the Raccoon, and let's not forget the noble [or Nobel, take your pick?] assistance from their investment banker cohorts at Silverman Socks and J. P. Horton.

Anyway, with the crisis being brought under control, or, shall we say contained in the short term – the Central Gangsters, err Banksters realized they were going to have to concoct something a little bigger – that is to say, more grand – to keep fooling even the dumbest of a dumbed-down Six Pack public, drinking and grazing, believing ‘all was in fact’ – you know, well. The question, how to do it! This was going to require a plan, Stan. So, the Central Banksters decided to hold a convention in Albuquerque, New Mexico, to wheel and deal, deceive and devise and otherwise chart their future intentions where gold was concerned [cause they were clearly running out of the stuff, ehhh?]. Anyhow, as an honest oversight, the Central Banksters forgot to make their room reservations in Albuquerque early enough [or perhaps made a wrong turn somewhere?] and all the hotels were full - and instead they had to make emergency reservations in their 2nd alternative location [after the La Brea Tar Pits were full too] - Washington, D.C. In the words of one of the participants, E. D. Smith – in his best English,

"By George, we were in a jam [a sticky situation?] and were looking into the abyss. If the price of gold rose further – we were all hula-hoop-ed. We almost got tarred and feathered! Good thing the tar pits were full [booked]. It's also a good thing the private corporation that masquerades as a Government Central Bank bailed us out and secretly sold or leased some of their gold stocks and had their stooge J.P. Horton [the who's who of Derivative Banking] swamp the gold derivatives market with untold billions of synthetic gold short sales as Chasers, ehhhh?"

Meanwhile, back at their hastily called convention, where they ended up having the world's largest Texas Hold ‘Em convention - because everyone knows how much they like to gamble [risk, ehhh?], they formed a pact. Between bluffs, they decided to agree or consent - or otherwise conspire and cajole, concocting a ‘green plan.’ The plan spanned 5 years and involved selling vast hoards of their sovereign gold [shhhh, most of which was already leased and had left the vaults anyway, so keep it quiet and don't tell anyone, ehhh?] to obfuscate their true intentions - to keep the Freedom dollar strong and the price of gold capped – cause once you're in this deep, there's just no way you can afford to fold. Besides, it doesn't really matter what the size of the fraud you commit, so long as you are doing it in the name of Freedom [or fraud perhaps?].

Now I know that some of you folks are going to think, ‘this story is just too funny’ to be real. Well, I agree, but it gets funnier – believe me. Did I mention to you that the Estate Secretary [Roger the Raccoon] and then Chairman of Silverman Socks [Frank Cortizone] were take-charge type of guys and were instrumental in the diabolical cover up of the Short Term Capital gold swindle? Anyway, with life being as ironical as it is, the Estate Secretary really relished the idea of being a big city banker, while [you're not going to believe this], being perfectly frank – Cortizone was more interested in politics [where he could rid baseball of steroids] all along. So the two of them switched sides! Meanwhile, the job of Estate Secretary was plugged [or Pugged, take your pick?] during a short but hot summer before getting back to school – Harvard of course!

***Scary Music Interlude***

For any of you who have ever been to the movies before, most of you would be well aware of the Hubris that Hollywood really spews. And the scary music is usually a lead in to the most heinous part of the whole story, right? Well, I'm happy to report, that we're not going to let you down!

All's Well That Ends Well?

Shortly after Frank Cortizone and Roger the Raccoon mustered up the energy to switch sides, so to speak, the greatest calamity – to date – befell Freedomville. Talk about the luck of the Irish - always after me lucky charms, ehh? The real price of loyalty in case you were unaware [or fell asleep under a tree for a number of years, perhaps?] is calamity; the most pervasive fraud [that anyone owned up to] to ever grip Freedomville – namely, the collapse of the corporate energy behemoth – EndRuin.

Then it Snowed!


A tale worthy of our own masters of mirth!

GoldiloxIRANIAN OIL BOURSE COULD KILL THE US DOLLAR - by Toni Straka#1352868/25/05; 04:26:13


Can the Iranian Oil Bourse become the catalyst for a significant blow to the position of worldwide power the US Dollar enjoys? Manifold supply fears have driven the price of crude oil near-wards its recent highs of $67.10 which are also only a notch below historical records in real dollar terms. With the world facing a daily bill of roughly $5.5 billion for crude oil at current price levels it becomes apparent that sellers and purchasers of the black gold are looking into all ways that could lead to a financial improvement on their respective side.

While the worldwide bottleneck of inadequate refining facilities and partly dramatic declines in production - for example in the North Sea - are two factors that cannot be eliminated in the short term there is one area left which could result in smiling faces of oil producers and (most) buyers likewise. Non US dollar thinkers are the victim of a transaction cost in the oil trade. The necessary conversion of local banks can be considered a hidden tax, charged and enjoyed by the banking sector.

Until now oil is solely priced, traded and paid for in the greenback on both markets in London and New York. The Treasury Inflow Capital data from mid-2005 show that OPEC members have parked only a skimpy $120 billion in direct dollar holdings which are almost equally split between equities and debt paper. This is a clear indication that oil producers are investing their windfalls elsewhere. The yield spread between US and EU debt papers in favor of the EU is clearly another hint where the petrodollars might flow after conversion.

The Iranian Oil Bourse (IOB) will become a factor that could further unsettle the dollar's dominant position.

Especially in the case of Iran it does not make sense to accept dollars only for its much desired commodity. Being seen as a hostile country by the USA for the intention to build its own nuclear reactors one wonders whether the new IOB will not try to attract other buyers than Americans who are particularly unwelcome in that corner of the globe. Iran has recently announced that the new oil exchange will start up its computers in early 2006.

The IOB can count on two sharp arrows in their holster. It can - and probably will - lure European buyers with oil prices quoted in Euros, saving them transaction costs. And it can strike barter deals with oil-hungry giants like China and India who have a lot of products and commodities to offer. I doubt that hamburgers and legal services will be considered adequate collateral for the world's most after-sought resource.

A Renunciation Of The $ Is Worse Than An Iranian Nuclear Attack

Steering away from the almighty commodity, currency and commodity currency - the US dollar - can have a deeper impact on the US economy than a direct nuclear attack by Iran. The permanent demand for dollar denominated paper stems to a good part from the fact that until now almost all resources of the world are quoted in it.

While this has led to the Eurodollar market in the 1970's new terms of trade could ring in the demise of the dollar as the premier reserve currency. With the world economy depending so much on oil, the black gold itself can be seen as a reserve currency that will be handed out only against the best collateral in the future. The Fed San Franciscos's recent paper about the progress of the diversification of international central bank's reserves shows that the dollar position is on the decline in many countries. NOTE: China has officially declared to diversify a part of its forex holdings into oil here.

Iran holds a strong hand as the #2 producer of crude behind Saudi Arabia. Politicians there will also keep in mind that dollar deposits might become a burden in the future when the US will step up its current war of words to the level of economic sanctions in the crusade against nuclear power plants. Money in the bank does not help when you have no access to it.


The last sentence is a truth learned by the Iranians in 1979, when after the collapse of the CIA puppet "Shah", Iranian "investment assets" were frozen by order of the US government, sparking the "hostage crisis" at the US embassy. Note that Bush wanted to keep the Iranian Premier from attending the UN for his "alleged" participation in this fiasco, but the banksters who enjoyed the $15B "windfall" are never mentioned in the same sentence, nor is Ollie North, that great American "Drug Runner" who armed the Islamic revolution in return for Afghani heroin with which to flood the US streets.

GoldiloxTime for the Big Picture#1352878/25/05; 04:34:34


Over the last several trading days, the market has come under pressure from the bears, after a couple of weeks of progress to new multi-year highs in the S&P500 and year-to-date highs for the Naz. Although looking at the big picture is nothing new to us here, I feel we are at an important juncture, and that its time to look into how the recent progress of the market fits into the realm of its larger design. As we will see this week, we are at quite an important phase in the long-term the market.
Many short-term traders believe that the big picture is not important in their trading. Few things could be further from the truth – that is, if your longevity or lifespan as a trader is something you would consider "important." The market is always changing. And the many times the market has changed behavior in the past is quite evident in its charts. You would not need to be an expert in technical analysis to identifying shifts in trends and changes in price action behavior. As a short-term trader, you will feel these changes directly, as your overall performance is greatly affected. This is true whether you see the changes in the long-term charts or not, one thing is for certain, you will be affected. The larger (in time-frame) the change … the bigger the effect will be on all participants, regardless of trading style.


Some VERY interesting long-term chart analysis of the S&P and NASDog for those enamored by such. (Note the name error in the URL, as the author is Gonzalez, not O'donnel).

GoldiloxHOUSING: CONSOLIDATION OR POTENTIAL CRASH? - Sol Palha#1352888/25/05; 04:47:43


So much money is racing into the real estate sector because most individuals do not understand the true function of Gold; in fact they won't even believe it when you tell them as this valuable lesson is no longer part of any school curriculum. To make matters worse most people don't even understand what inflation is; for most it is an increase in prices rather then an increase in the money supply. So what are people do when they want to put their money into something that will hold its value. Money is no longer backed by gold and every currency has its own inherent problems; they are all rotten it's just that some are more rotten then the others. Individuals are scared and they are looking for ways to tuck away money for their golden days; it appears that for now that real estate is the masses vehicle of choice. In fact it's becoming a global problem; we have a global equity boom and at some point in time this bubble has to pop. However one must understand the main reason for this boom is that individuals are being forced to speculate with their money; there are simply not enough places one can put ones money and earn a fair rate of return. (Remember most of them do not understand the principles of inflation or what the true function of gold is and hence they race to find alternative investments that will act as a buffer against these unpredictable times. History shows that most of them will choose the wrong investment).

According to the Economist global money supply is increasing at a rate of 20% plus; those were the figures for last year and it appears that this year things can only but get worse. Now one can begin to understand why the price of so many basic commodities has taken off and why we are in the midst of a global real estate bubble. They have just launched a new program in California that provides mortgages to illegal aliens. It seems that the big chaps will stop at nothing to keep the housing market alive; its funny they think of the illegal aliens only after the market has reached insane levels. One of the big banks taking part in this is Citibank, so it's just a matter of time before this program goes nationwide.

The above charts quite clearly illustrate that while the housing sector is not crashing it certainly appears to be topping. One of the main ingredients in a house is lumber and this market topped over 1 year ago; one would think if everything was fine that this market would be putting in new highs but this is not the case. Read our previous article on this subject, Lumber and Real Estate.

If you look at the last chart you will notice that it took 1.75 units of the housing index to buy one ounce of Gold; today it takes only about .81 to do the same. Notice also that it appears that a bottom has taken hold (based on the conditions stated above) and that Gold will slowly become the stronger of the two. These factors are not good news for the housing sector but could be potentially beneficial to the Gold and the precious metal sectors since this money will eventually have to find a new home.


One last "gem" from the FSU "vacation" archives.

SundeckSon of a (smoking) gun! #1352898/25/05; 05:21:08


A telephone call yesterday afternoon to the Stamford office of the Bayou Group was not answered. A message left at Mr. Israel's home was not returned.

According to documents filed with the Securities and Exchange Commission, Bayou started four hedge funds in January 2003, expecting to raise more than $250 million from wealthy individuals. The minimum investment in each fund was $250,000. They were called Bayou Superfund, Bayou No Leverage Fund, Bayou Affiliates and Bayou Accredited Fund.

Hedge funds, which are lightly regulated investment funds aimed at wealthy investors, have grown significantly in recent years. Tremont Advisors, a firm that tracks hedge funds, said that individual hedge fund managers manage $1 trillion today, up from $120 billion in 1994.


Sundeck: Hullo...all quiet on the bayou?? "Son of a gun, we'll have big fun...on the bayou!" Hell Hank! Looks like someone is not having much fun on this bayou! Suggest yo'll stick with thems gold 'n cod-fish oh mi..oh!


SundeckBayou link...#1352908/25/05; 05:22:57

Oops, sorry's the link
GoldiloxBayou#1352918/25/05; 05:47:36

So much for the Bayou "Accredited Affiliates Super No Leverage" Fund. Maybe they were just TOO BUSY ferreting out ten baggers for their lucky subscribers!

"Time's a wastin' - bes' bag you a $250K HELOC and git aboard a'fore the paddle wheels role, 'cuz da fish are a'bitin'!"

. . . with apologies to Samuel Clements.

contrarianYield Inversion#1352928/25/05; 07:36:51

Sundeck et al--
Just participated in a 10 min conversation regarding yield inversion...has happened in 2000 and in 88. Complicated. It can be presented that it preceded two recessions, in 88 and 2001.

Good article here predicts 20% chance, but I would imagine that's understated given the rosy tendendencies of Wall Street!

I still think the writing's on the wall, and s to hit the f in 2006!

mikalReminder: Fed mental health pep rally#1352938/25/05; 11:17:33

Don't forget Friday, your mandatory attendance at Guru Greenfed's Financial Frankenfest where Egor(Igor) will be taking patient's roll call. If you are found to be drowsing or absent at therapy, you must attend after-school session in the basement of the Ministry of Economic Reeducation.
USAGOLD / Centennial Precious Metals, Inc.The perfect property: Liquid. Portable. No sales tax. No annual property taxes. No upkeep expenses.#1352948/25/05; 11:26:02

pre-1933 gold coins
Why should YOU buy gold?

Because no one else will do it for you.

USAGOLD-Centennial can help.
1-800-869-5115 Extension 100

TopazSomewhere, beyond the C's. #1352958/25/05; 12:42:40

PoG is doing it's darndest to trade away from the Currencies at present and all the while August is fast running out of options.
Futures look mired at c325Kish, frankly, in a word ..Boring!
I might do a slingshot and pick a target ($475)...
...see you all next week!

TownCrierTreasury yield curve flattens anew, Greenspan looms#1352968/25/05; 12:58:22

NEW YORK, Aug 25 (Reuters) - U.S. Treasury debt prices were narrowly mixed on Thursday as investors awaited a speech from Federal Reserve Chairman Alan Greenspan on Friday.

As he takes the podium, the Fed chief might be wondering about what he called the "conundrum" of persistently low long-term interest rates, which has only deepened since he first identified the trend.

The spread between 10- and two-year notes shrank on Thursday to a meager 0.15 percentage point -- its narrowest since early 2001.

Given recent strides in the market, some dealers were predicting a sell-off if, barring some unlikely change of heart, Greenspan delivered his usually upbeat message on the economy.

But the topic of his speech, "Reflections on Central Banking," is rather ethereal, and most investors were not expecting his remarks -- which were not due to be followed by a question and answer session -- to bear directly on the market.

"Given this is a swan song for Greenspan, I think it's going to be one more of these global topics," said David Ader, Treasury market strategist at RBS Greenwich Capital.

"There will be very little if anything that will give us any insight into monetary policy."

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

GoldiloxNew Recent record#1352978/25/05; 14:06:35

Lt Sweet closed at $67.49, a new closing record, after peaking at $67.70 for the day.

Ecudoran strikes are holding that country's production to 80% normal.

Get your motorcycle or hybrid soon!

It's no wonder that SUVs and big V8 trucks are experiencing gve-aways, when it runs about $70 a fill up.

Hawaii is capping wholesale gasoline prices in an effort to stem the tide! As justification, supporters are citing the direct correlation to record prices and record oil company profits.

TownCrierShifting cashflow#1352988/25/05; 14:12:49

Readers weigh in on how rising prices at the pump have taken a toll on their lives.

NEW YORK (CNN/Money) - To cope with rising gas prices, some people are driving less -- or changing vehicles.

Some are cutting back elsewhere in their budgets. Some are taking more drastic measures....

Brown bagging... "I used to spend $7 per day for lunch or $35 per week. Now I take lunch to work and it costs about $3 per day ( $15 per week). The extra $20 savings is shifted to the tank. ... Also I stopped going to Starbucks and lowered my Lottery ticket purchases."

Walking off the job... "Because of the rise in gas prices I had to leave my job. I worked on the east side of Detroit and lived about 85 miles away. I have had to make the decision the leave a good job to look for local employment that probably wont pay more than $9 an hour.

Extreme measures...? "I've had to switch from Charmin to newspaper."

^---(see url for additional gripes)----^

With enough people feeling the cashflow pinch, how many will be able to withstand increasing interest rates on their credit card balances as would normally be expected if the Fed were to continue raising short-term interest rates?

And yet, given the number of Fed rate hikes to date, it seems to me that I'm still receiving an abnormally high number of credit card offers for balance transfers with low rates for the life of repayment (i.e., good until balance is paid off), and even offers of zero percent cash advances (with NO fees) for periods exceeding a full year.

For that matter, just two weeks ago I received a curious letter from one of my banks informing me that by September I could count on receiving such no-fee offers from SEVERAL banks, stating matter-of-factly that at least some of these would be no-fee deals, and further encouraging me to call them to negotiate prior to making any decision to take my business elsewhere.

It seems to me that the Fed's target rate hikes have become something for "show value" only, whereas the commercial banks continue to be free and easy with their terms of credit creation.

What would a crowd hard-working underpaid foreign laborers think about the value of the nominally small "dollar-equivalent" of their meager incomes upon learning how easily the rest of us can tap into free piles of the stuff which allows us to out bid them on the resources and products of their own land and labor?

I can't imagine that the privilege conferred by "reserve status" of the dollar will be politically supported for very much longer.


BelgianGreenspan...#1352998/25/05; 14:39:52

...that will give us insight into monetary policy.

Is A.Greenspan actually managing the US' monetary affairs ?
Or is Greenspan rather silently organizing the defense (survival) of the $-IMS as most urgent and important ?

Is it still possible to have appropiate monetary policies that are good for the US of A - AND - at the same time appropiate for the planet's $-IMS ?

Can a debt-dollar still be accepted as a creditworthy unit of account in world trade ...savings and reserves !?
What do other CBankers think when Alan speaks at home or abroad ? Do we ever hear any outsiders commenting on Alan's policies that affect the $-IMS ? No, we don't (to my knowledge). What does this silence mean ? Agreement or disagreement ? Or are there no insights on $-monetary policies needed anymore ?

osa104cSTEALTH MODE?#1353008/25/05; 14:56:17

PHILADELPHIA - The U.S. Mint seized 10 Double Eagle gold coins from 1933, among the rarest and most valuable coins in the world, that were turned in by a jeweler seeking to determine their authenticity.

Joan S. Langbord plans a federal court lawsuit to try to recover them, her attorney, Barry H. Berke, said Wednesday. Langbord found the coins among the possessions of her father, longtime Philadelphia jeweler Israel Switt, who had acknowledged having sold some of the coins decades ago. She now operates her father's business.

David Lebryk, acting director of the Mint, had announced in a news release that the rare coins, which were never put in circulation, had been taken from the Mint "in an unlawful manner" in the mid-1930's and now were "recovered."

The coins, which are so rare that their value is almost beyond calculation, are public property, he said.

But Berke said Mint officials couldn't prove the coins had been stolen, or were subject to forfeiture.

In 2002, Sotheby's and numismatic firm Stack's auctioned off a 1933 Double Eagle coin for $7.59 million, the highest price ever paid for a coin. That Double Eagle, which is believed to have been part of a collection belonging to King Farouk of Egypt, surfaced when a coin dealer tried selling it to undercover Secret Service agents.

After a legal battle, the dealer was permitted to sell the coin at auction on the condition he split the proceeds with the Mint.

In its statement, the Mint said officials were still deciding what they would do with the seized coins, which are being held at Fort Knox. They said they had no plans to auction them but would consider saving "these historical artifacts" for public exhibits. Other double eagle coins seized in the past were melted down.

Double Eagles were first minted in 1850 with a face value of $20. The 445,500 coins minted in 1933 were never put into circulation because the nation went off the gold standard. All the coins were ordered melted down, but a handful are believed to have survived, including two handed over to the Smithsonian Institution.

Langbord declined to discuss how the coins might have come into the possession of her father, who operated an antiques and jewelry shop for 70 years and died in 1990 at 95.

The Mint contends Switt obtained a cache of the gold coins from his connections at the Mint just before they were to be reduced to bullion in 1937.

Switt admitted in 1944 that he had sold nine Double Eagle coins, but he was not charged in connection with those transactions, according to the Mint.

The family attorney said the coins were found recently, and Langbord and her son, Roy, notified the Mint of the discovery in September. Mint officials asked to authenticate the coins, then confiscated them after doing so, Berke said.

He contended Langbord and her son never relinquished their right to the coins.

Better yet.....RUN SILENT, RUN DEEP.............

USAGOLD Daily Market ReportPage Update!#1353018/25/05; 15:08:36">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

Thursday Market Excerpts

August 25 (from MarketWatch) -- Gold futures climbed Thursday as a $2 loss in the previous session and a weaker U.S. dollar spurred fresh interest in the yellow metal.

With slightly higher action in gold, the dollar weakening and "the oil markets fanning the flames of uncertainty, it seems as if gold has effectively shifted its track away from the downside," said Nell Sloane, an analyst at in daily commentary.

COMEX December gold futures climbed $1.10 to $433.30. At last check, the dollar churned at a narrow disadvantage to most of the world's leading currencies, with the same themes tugging at the greenback - expensive oil and expectations for higher U.S. interest rates.

"The dollar has been hammered vs. the euro this week but the precious metals are marching to a different drummer so far," said Dale Doelling, chief market technician at Trends In Commodities.

December gold's support at $440 "seems to be very strong," he said, adding that he's "looking for a new weekly high above $445.70 which would turn the chart for December gold.

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

BoilermakerWindfall Profits Tax Proposed#1353028/25/05; 15:13:21

Washington (Platts)--23Aug2005
With US gasoline and crude oil prices at or near record levels, several
Senate Democrats are looking at the possibility of imposing windfall taxes on
oil companies.
US Senator Carl Levin (Democrat-Michigan) urged President Bush in a
letter sent Monday to tell oil companies to lower prices or face windfall
profit taxes, his office said Tuesday.
"I urge you to call the major oil companies into the White House, and to
tell them in a clear and forceful way that, if they do not act immediately to
bring down oil prices, you will support an excess profits tax," Levin wrote.
Levin also requested that Bush tell oil companies that he would ask the
Federal Trade Commission and Department of Justice to investigate recent steep
price increases to determine if any existing laws have been violated.
Meanwhile, Senator Byron Dorgan (Democrat-North Dakota) last week
introduced a bill to impose a windfall profits tax on major oil companies,
which he said are reaping an extra $7-bil in profits each month because of
strong oil prices. "These biggest oil companies stand to gain up to $80-bil in
the next year in windfall profits," Dorgan said in a statement.
"This has nothing to do with a free market," Dorgan maintained. "It is
about the OPEC countries and the major oil companies profiting in a controlled
market that rewards then and penalizes our consumers."

Those Democratic idiots (as opposed to their Republican moron counterparts) in the Senate are about to punish US oil producers (again) because we're running out of cheap oil. First they put millions of acres of onshore and offshore properties off limits to oil exploration and development then they punish the producers for not finding enough.
I remember the first round of windfall profits taxes that were supposed to fund alternative fuel projects. They mostly got wasted on projects that never materialized. Oil prices crashed because OPEC still had a lot of idle capacity and couldn't maintain production disipline. This time is different. There's not much, if any, idle capacity in crude production or refining.
I think we should confiscate/nationalize all the US oil and gas fields into a nice goverment sponsored entity called Enermac. This can be swiftly done as we have recently learned under "trading with the enemy" legislation. Clearly nothing so important as oil and gas should remain in the hands of robber-barron oil companies. If the Saudi's and the Ruskies have done it why shouldn't we?

And by the way, if gold gets pricey look for some miners in your portfolio disappear into governmental coffers either by taxes, confiscation or both.

Clearly, free markets have been and will continue to be set aside for the wisdom of governmental management.

TownCrierDelhi defers decision on lowering VAT on bullion#1353038/25/05; 15:27:03

New DelhiAugust 26, 2005 -- The Delhi government on Thursday deferred a decision on lowering VAT rate on bullion by 15 day after the empowered committee assured that it would persuade Gujarat, Rajashtan, and Uttar Pradesh to raise tax on precious items to one per cent, on par with other states.

"Empowered committee chairman Asim Dasgupta assured us that he would take up the matter with the chief ministers of the three states by the first week of September. As such, we will wait till then (before taking any decision to lower VAT rate on bullion),"said A K Walia, Delhi finance minister.

The empowered committee has decided that it would meet chief ministers of eight "non VAT" states from September to persuade them to switch over to the new tax regime, Dasgupta said.

...Delhi and some other states like Maharashtra have complained to the VAT panel that their bullion trade is shifting to Rajasthan and Gujarat since they have 0.25 per cent sales tax on precious metals compared to one per cent VAT rate in other states.

After Gujarat and Rajasthan, Uttar Pradesh has also lowered sales tax on bullion.

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

The saga continues from last week's article....

Here, the low- and so-called "non VAT" states ought to simply tell committee chairman Asim Dasgupta to get stuffed if/when he tries to talk them into higher rates.


BoilermakerWindfall Profits on Oil#1353048/25/05; 15:42:17

As a postscript to my previous message of this subject I wonder if Congress will propose a windfall profits tax on our major crude oil suppliers Venezuela, Saudi Arabia, Canada and Mexico? That would be an interesting proposal. I'm sure all our major suppliers will understand the need for Americans to get rebates on overpriced energy products.
TownCrierMint confiscates Double Eagle gold coins from jeweler seeking authenticity#1353058/25/05; 15:48:36

(AP) Aug. 25, 2005, PHILADELPHIA --

David Lebryk, acting director of the Mint, had announced in a news release that the rare coins, which were never put in circulation, had been taken from the Mint "in an unlawful manner" in the mid-1930's and now were "recovered."

The coins, which are so rare that their value is almost beyond calculation, are public property, he said.

...The 445,500 coins minted in 1933 were never put into circulation because the U.S. went off the gold standard. All the coins were ordered melted down, but a handful are believed to have survived, including two handed over to the Smithsonian Institution.

The Mint contends Switt obtained a cache of the gold coins from his connections at the Mint just before they were to be reduced to bullion in 1937.

^----(full article at URL)----^

The key points that distinguish these particular coins from other coins is that, because these were never officially released for use in the first place, they never ceased being the property of the Mint from which they were, by deduction, stolen.

Looking to another point, seeing how limited production runs in coinage can command attractive premiums over actual gold content over time, it is doubly attractive to an investor when pre-1933 gold coinage can be obtained near bullion prices and in good condition.

Such is the appealing market today in many of these historic gold. Call USAGOLD-Centennial for guidance and opportunity.



GoldiloxWindfall Profits Tax#1353068/25/05; 16:03:51

@ Boilermaker,

Without trying to exonerate anyone in Washington of your well-founded charges, I think they are reacting to Exxon's (and others) record breaking profit announcements, trying to get some "Look how we protect you" press, as they did in their mindless foray into baseball and steroids.

If the oil giants were being squeezed by their suppliers (as is being portrayed in the Venezuela issue), common sense would suggest that their bottom line might exhibit some squeeze effects. Why is this not so?

Contrary to media hype about "OPEC control", major oil companies "own" about 75-80% of all production and pay "royalies" on their profits to the home nations in most localities. In the case of Venezuela, Robertson's call for assasination is based on the fact that Chavez raised the royalty from a 1% discovery rate to a 15% production rate in order to be "in line" with the rest of OPEC. He is still only charging 60% of what Bush's Saudi cousins demand.

When we are dutifully informed that OPEC is "squeezing us", 75-85% of that squeeze comes from NeoCon's buddies in the biz, and the remaining 15-25% finds the pockets of their indigenous cronies.

I'm not one to gullibly believe that government overtaxation would relieve any pressure on the consumer, but they'll try like heck to sell it on bubble vision.

Tarriffs, whether on foreign importers or domestic gougers only line the pockets of the government, while the consumer continues to pay the toll! The pain remains the same, only the account number of the extortionist changes.

One last thought. If the Pols are so eager to target their own feeding troughs in the oil patch, think of how ravenous they will be if they turn their sights on a taxpayer's golden stash!

The analogy of agar (or seed capital) being consumed to the point of starvation is becoming more and more appropriate.

BoilermakerGoing Out of Business Sale?#1353078/25/05; 16:06:26

DETROIT (Reuters) - General Motors Corp. (NYSE:GM - news) on Thursday said it was extending through Sept. 30 the discount program under which it is selling new cars and trucks to the general public at the same low price a GM employee would pay.


What's the strategy here? Maybe GM will get oil company windfall profits revenues to pay pensions and med costs. This looks like a going out of business sale to begger a government bailout like the Chrysler deal way back. GM paper is too big to fail.

GoldiloxChavez's response#1353088/25/05; 16:14:35

@ Boilermaker,

On the subject of rebates, Chavez proposed to use his government's 14% ownership in Citgo to funnel low priced fuel to US consumers if there is a way to keep the US middlemen and government from skimming the profits before they each the pump.

It's not hard to see that this rhetoric is as fantasy-based as that from CONgress and the Oil Admin!

It's truly disheartening how leaders on both sides of the fence regularly insult our intelligence.

GoldiloxMint "confiscation"#1353098/25/05; 16:23:57

@ TC,

Kinda blows a hole in the theory that pre-1933 coins are less vlunerable to gubmint thieves than typical bullion. The more it's worth, the more the bureaucratic scum wanna get their mitts on it.

I especialy like the logic "It must have been stolen, so we're gonna steal it back!" Who decided to nullify the statute of limitations?

I'm only surprised that this case has actually been in court for so long, as I have seen references on the History channel, press, etc., for years.

If this case is ruled in favor of the mint, then all the archeaological relics in the Smithsonian and all the WWII booty should be returned to their "rightful" owners in the third world.

Boilermaker@ Goldilox#1353108/25/05; 16:25:19

"Contrary to media hype about "OPEC control", major oil companies "own" about 75-80% of all production and pay "royalies" on their profits to the home nations in most localities. In the case of Venezuela, Robertson's call for assasination is based on the fact that Chavez raised the royalty from a 1% discovery rate to a 15% production rate in order to be "in line" with the rest of OPEC. He is still only charging 60% of what Bush's Saudi cousins demand."

I'm not sure where your "major oil companies "own" about 75-80% of all production" came from but I'd like to see the source. My view is the opposite, 75-80% from national oil companies (see URL). US oil companies have been pushed out of the biggest foreign producing regions even though they still have lots of resreves and production. Do not think or hope that US producers have any leverage in todays oil markets. They are but a shadow of their past dominance.

GoldiloxReferences#1353118/25/05; 16:52:50

@ Boilermaker,

My latest reference comes from the Saudi's own call for gas developers last year. They took bids from Chinese, British, and Russian companies for the rights to drill for a 25% royalty on the production.

The Exxon/Chavez numbers came from all the press last year when he publicly upped the royalty and pee'd off Condi Rice. At that time the press (US) compared his royalty charges to the rest of OPEC.

Nationalized oil companies are not the simple entities one might think, as many are really just middlemen between oil giants and governments.

I believe it when you say that oil companies do not wield the kind of clout they did in John D's day, but at $8B in reported profit for Q2 (above and beyond tax write-offs and left-over discovery "credits"), Exxon is FAR from feeling any pain from this oil squeeze! In fact, it's the only for-sure winner in my current portfolio.

If you have actual numbers to the contrary, I'll be happy to compare them, as mine are probably over-simplified, but I trust the accuracy of the ones I quoted.

Bottom line, nobody in Washington, Houston, Riyadh, Tehran, or Caracas is gonna ease our at-the-pump burdens any time soon, and I'm pretty sure we agree on that!

GoldiloxYour reference#1353128/25/05; 17:01:28

@ Boilermaker,

You believe a left-wing rag like the Post? - LOL!

What jumped out at me is the following:

"About 77 percent of the world's 1.1 trillion barrels in proven oil reserves is controlled by governments that significantly restrict access to international companies, according to PFC Energy, an industry consulting firm in Washington."

Yes, it says access to the oil is controlled by the indigenous locals, but no mention of the contractual split on the proceeds. I believe you and I may be comparing apples to oranges in this matter.

Goldilox"The Mystery of Afghan Gold"#1353138/25/05; 18:05:10

Now showing on the History Channel. Hopefully they will replay it.

The CB of Afghanistan, throughout 25 years of war with the Soviets, followed by the Taliban's cultural purge, successfully hid secret chests full of golden antiquities that survive for the current regime's stewardship.

It's a really interesting story of the importance of golden artifacts to both historical and financial continuity.

Oh, and they are following it with "Wild West Tech" - the episode about California/Nevada mining.

Lot's of golden history today!

Goldilox"The Great Grab"#1353148/25/05; 18:25:30

Interesting that as we talk about agar in "finite cultures", McCanney is mentioning what he calls "the great resource grab" on tonights show - starting in about 35 minutes live, and archived after that.

I'm sure he'll also target his regular topics of weather phenomenon and NASA questions, I'm sure.

I won't quote him, as he asks people to not copy directly from his web site.

To listen in via webstream, go to his site and scroll down to the URL link

It will install a REAL Audio URL to access the stream.

FlaccusGoldilox#1353158/25/05; 19:22:10

What part of a gold coin dated 1933 is pre-1933? Just asking. It seems obvious to me that the number 1932 precedes 1933 and 1933 is, well. . .1933. Do you wish to argue that?
TownCrierGoldilox, msg 135309, on Mint "confiscation"#1353168/25/05; 19:26:07

I certainly hope this isn't an example of your best thinking.

To make a quick but effective analogy, if the Munch's "The Scream" painting turned up after a long unaccounted absence, would the museum be "stealing it back" in proclaiming and demonstrating its rightful claim of ownership? Anyway, your tone strikes me more as being a display of rhetorical bravado rather than an attempt to make a valid point, so maybe I shouldn't bother overmuch with making a reply. If the Government is at odds with someone, is it your part to always take the other side automatically?

However, giving you the benefit of the doubt, on the final matter you raised, you can be reasonably sure that most archeological relics and whatnot have indeed undergone their due degree of scrutiny under prevailing laws, and to be sure, some of them probably rest more securely than others in their present locations.

To take it all a step further, this could also serve as an example where the current holder could certainly hope to benefit from a legitimate receipt showing when and how it was legitimately procured from the previous owner in question.

Another way to say it, if you roll out of a lot with a new car, its tough for the dealership to wrongfully claim you've stolen it if you can produce a receipt and title that shows they signed it over to you.

They say ownership is nine-tenths of the law, but sometimes a bit of supporting paperwork can be your best friend.


PRITCHOMore on Venezuelan Oil - - It is THEIR OIL After All !#1353178/25/05; 19:50:11

Orinoco Flows
by John Mackenzie
July 20, 2005

Hugo Chávez and the Venezuelan Government are striking back.

They have summoned the courage to take the offensive in reminding Chevron and nearly two dozen additional Energy Companies need to cough up $3 billion in back taxes. Venezuela is the world's fifth largest petroleum exporter, accounting for a sizeable account of OPEC's 40% share of Global Supply.

Venezuela regularly exceeded its OPEC oil production targets prior to President Chávez's December 1998 election. Since his election and until quite recently, Chávez has maintained a policy of strict adherence to OPEC quotas.

He required the PdVSA (Ministry of Energy and Petroleum) to cut production dramatically at existing fields, and reduce investment and total production capacity.

Current estimates suggest Venezuela has been producing less than its current OPEC production quota of 2.7 million bbl/d, instead holding the line at 2.35 million bbl/d in order to conserve oil resources until equitable agreements can be reached.

Venezuela presently has little interest in achieving its OPEC mandated quota @ 2.9 million bbl/d; despite all the mass media pabulum to the contrary. Chávez is first and foremost seeking reparations for previous Kleptocratic resource rape and pillage executed prior to his tenure.

In October 2004, he began raising royalty fees to an average of ~ 17% from 1%. More importantly, he began exercising currency seignorage in paying for contract services in nonconvertible Venezuelan Bolivares as opposed to U.S. Dollars; ordering well contracts to be converted into Venezuelan Government controlled joint ventures with partners taking the minority position @ 49%.

Venezuelan has the largest reserves in the Western Hemisphere.

The U.S. Majors have made overtures to the tune of $50 billion in capital investment dollars for Venezuelan fields. The reason is quite simple; Venezuela is a 100 hour tanker trip to the Gulf Coast refineries. As the fourth largest supplier of crude oil to the U.S., Venezuela remains a strategic source of vital energy to this nation.

Although Chávez's capital investment plans under joint venture appear restrictive, the fact is very few OPEC producers even allow direct foreign investment. Mexico decided the Rockefeller gringo's were a most unwelcome partner when they suggested PEMEX be sold to the highest bidder. An easy feat when printing Dollars costs damn near nothing.

Despite failed coup attempts, assassinations and failure of the economic hit men, Chávez has remained willing to send oil our way; such is the present power of the Petro Dollar and risks to the Global Economy.

Chavez presently wants to attract $10 billion in foreign direct investment from oil companies to improve economies of scale and vastly expand Venezuela's total oil output to 5 million barrels a day by 2009.

There is little doubt Chavez has very carefully observed the Yukos debacle. Russia, the world's second-largest oil exporter, has essentially nationalized oil production in taking a most precious and scarce resource out of the hands of Kleptocrats and placed them firmly within Mother Russia's control.

The Rockefellers were again rebuffed after dramatic plans to position themselves with a 17.5% stake in Yukos prior to President Putin's assumption of control under the auspices of the Rothschild's. They did, in fact, place Putin in power after the endless theft under Boris Yeltsin had created a Mafia Nation State; untenable to the austere Red Shield.

The simple fact is Oil Producers face higher royalties in order to do business in Venezuela.

And pay up, they most certainly will; at least until a successful attempt on President Chávez's life can install a more friendly regime. This effort is likely to have the desired effect, regardless of Pat Robertson's embarrassing diatribe.

What is not being said by our major media (propaganda outlets) is far more important than what is reported.

President Chávez clearly wants to expand output, but under terms which are fair to one and all. He is looking to assist the impoverished and in turn receive a fair price for Venezuela's resources.

Call him what you will, Marxist, Communist or whatever label suits you. Reality is as such, benevolence is on display; ignore this at your peril goes the warnings.

Venezuela's President is leading Latin America by example and I happen to believe the balance of Central and South American Nations States will be very quick on the uptake. The IMF & World Bank must be fuming.

Chávez has publicly stated he prefers a reduction in Venezuela's dependence on oil sales to the U.S., which accounts for about 60 percent of the nation's crude exports.

Chávez has signed agreements throughout 2004 and 2005 to boost oil sales to Argentina, Brazil, China, India, Paraguay and Uruguay. In addition, he has proposed constructing a pipeline to Pacific ports in Colombia in order to ship increasing quantities of crude to China; who has been exceptionally vocal with respect to inducing bilateral trade.

The U.S. imports 15 percent of its crude oil from Venezuela. In March of this year Chávez restated Venezuela's intent to reduce sales to the U.S. market by selling off the assets of Citgo Petroleum Corporation. Citgo is a Houston-based refinery and gas station chain that the Venezuelan PDVSA owns with 13,500 gas stations in the United States.

Our Foreign Policy clearly lacks a coherent strategy to deal with the ever changing energy arena.

GoldiloxStatute of limitations#1353188/25/05; 20:43:33

@ TC,

I had a rare and collectible guitar stolen in 1985. I filed the "legally proper" police reports and was informed that if the guitar surfaced in any hands within 8 years, the law allowed me to reclaim my stolen property.

After that period, the statute of limitations on stolen goods ran out, and if it surfaced after that period, I no longer had claim to it, no matter that I retained documentation of my ownership and that it was properly documented as stolen.

The same statutes apply to the coins that disappeared from the mint over 70 years ago. What the prosecution has accomplished is to override the Federal statute of limitations, simply because the government is the complainant.

Even more interestingly in this case, the government has no documentation that the coins were "actually" stolen, as there is no historical documentation of these coins having been stolen from the mint. Lack of documentation can only be classified as "circumstantial evidence", since no one can actually document that the coins were not properly released and the documentation then lost by government mistake. The burden of proof is still on the prosecution, not the defense.

You seem to be suggesting that the government should have the privilege to "override" its own statutory limitations in this particular case. If you believe this to be fair and good, therein lies the basis for our logical divergence.

You're right about one thing. When a question boils down to individual rights vs. government overstepping its defined powers, I will always line up on the side of individual rights. I offer no apology for that.

GoldendomeSwitt's 1933 Double Eagles.#1353198/25/05; 20:57:07

Today's postings regarding the 10 newly found and confiscated 1933 Double Eagles is amazing as sighting an Ivory Billed Woodpecker!

Too bad and too ironic, that Israel Switt had protected and held on to those coins for decades even with the G-men coming at him as the source in the 1940's, only to have his daughter and grandson lose them to the Treasury Dept. They should have known the history! All of these court battles were fought hard in the 1940's and 50's by the deemed illicit holders of the then known "33's. Most of the principals were dead by the time the battles ended and the eight originally confiscated coins melted in 1956. The Government won in every instance. The '33's were never money as they were never issued, and could not be claimed as a "good faith" purchase. They were deemed stolen property, and one can never, I believe, be a good faith holder of stolen property. With the 2002 auction of the Farouk Double Eagle, the government made it widely known that it would be the lone exception to the rule. All other "33's would again, be treated merely as U.S. stolen property. The buyer in 2002 in addition to the 7 million paid for the coin, still had to pay an additional twenty dollars to the treasury dept. to "monetize" the coin since it had been stolen.
The governments weak point in a possible court case regarding the Farouk coin, was that the coin had been mistakenly-- but completely legally-- exported to Egypt as a numismatic coin after Farouk's agent had purchased it. Even the experts at the Smithsonian institute and the mint, who approved the export paperwork in 1944, had been unaware that no '33 Double Eagles had been monetized and issued from the mint in 1933.

Switt was a wry, uncooperative, and forgetful interview for government agents during their investigations. He claimed to not have more than the nine "33's that he was known to have sold. Interesting that he could remember how many, but could not name a single purchaser!
When in 1944, he was asked for his business records dating from, I think it was, 1935 to 44, he produced them all with the exception of 1937 when all of his transactions in the "33's had occurred. Many of the coin dealers and purchasers had been more forth coming with information, as many believed the coins to be legal tender and held legally. One--a James Macallister to whom Switt had sold more "33's than anyone else (4) had at one point told government agents investigating the case, that Switt had admitted having more than the up-to-that-time known "33's. [Macallister reminded Strang (FBI) that he had given up buying the 1933 double eagles at the end of 1937 when he felt that the supply was too abundant for the coins to be considered rare much longer. What Switt had told Macallister he now recalled in vivid detail: "My partner Ed can get all he wants of these, as we had 25 and only sold 14."] page 168 of Illegal Tender by David Tripp.

Many had long thought that Switt had melted down any remaining "33's in his possession when the government came investigating. Obviously now, not. If the numbers given by Switt to Macallister were correct, there still may be about five unaccounted for 33's. In his book, David Tripp, shows a Kodak dated photo, 1980, of a 33--not the Farouk coin. So, a few more may exist.

It would be a pleasant surprise, but I don't think that there is any way the government will be pried lose of its grasp on Israel Switt's ten remaining "33's were they actually found and turned over to the mint for determination of ownership. This story still seems too unreal. Is it really true?

goldquestSpeaking of Stolen Gold!#1353208/25/05; 21:56:16
Perhaps the Fed was irritated because someone got away with a few Gold Eagles before they could steal them!

Liberty HeadStolen Gold#1353218/25/05; 22:39:10

One must keep in mind that the Gov't has never earned a single dime. The Gov't has no product to sell. Every coin ever minted was done at the expense of taxation under threat of force. Every coin is illegitimate at birth.
The Gov't has no moral claim to anything. All the gov't has is large armies of devoted thugs, mindless sheep and credible liars.

Best Wishes

GoldiloxSwitt Case#1353228/25/05; 22:49:32

Thanks Goldendome for the extra detail on this case. I'll probably get a lot of flack for suggesting it, but if they sold one to King Farouk for $20, you'd think they would have monetized the rest of them and ended the debate instead of spending tens of $1000's of taxpayer dollars to "protect his royal investment".

They create a windfall for a King, but penalize the ordinary citizen.

And TC wonders why I appear "biased" against governments . . .

I guess I stand guilty as charged, not being the King who reaps the "bennies".

GoldendomeMore on Switt as a source of rare gold.#1353238/25/05; 22:50:04