USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
Mr GreshamSuccess in the New Year#1399081/1/06; 01:27:48

in all you wish for, and work for!

Still is an honor to be in company with those of such integrity. May it spread from here to all others in need of it.

GoldiloxRussia Starts Cutting Off Ukraine Gas#1399091/1/06; 02:31:13,1,2436665.story?coll=la-headlines-world


MOSCOW — Russia started reducing the pressure in its natural-gas pipelines to Ukraine today after Kiev rejected Moscow's last-minute offer to briefly delay a crippling increase in prices. The move toward a cutoff raised the possibility that European gas supplies also could be interrupted within the next few weeks.

Gazprom officials said this morning that they would begin a partial shutdown in the gas lines on the Russia-Ukraine border, which delivers about 40% of Ukraine's gas and as much as 30% of Europe's.


The state-controlled energy giant made its move after Ukraine rejected an offer Saturday from Russian President Vladimir V. Putin to hold off on a price increase on the heating fuel until April if Ukraine agreed to pay market prices after that date.

"Yesterday, we made an offer to the Ukrainian side. We were ready to compromise in order to provide comfortable conditions to Ukraine during the winter period. But we got a refusal," Gazprom spokesman Sergei Kupriyanov told reporters this morning.

"As a result, we're reducing pressure on the pipeline," he said.

Gazprom officials said a computerized delivery system would determine how to reduce the supply of gas to Ukraine while still ensuring full contract deliveries to Europe. Possibly, they said, they will cut the flow in the two pipelines that go most directly to Ukraine, while leaving uninterrupted three other Europe-bound pipelines, but that had not yet been determined.

Russian television this morning showed workers at a control room in the town of Sudzha, near the border, scrutinizing computer terminals that control the giant red, yellow and gray gas lines that run across the border.

In Ukraine, demands for a rate increase are widely seen as a response to the "Orange Revolution." The largely peaceful uprising a little more than a year ago toppled Ukraine's pro-Russian government and helped elect President Viktor Yushchenko, whose leanings are toward the market economics of the West.

"Russia's firm position that Ukraine should buy gas at European prices is certainly a reaction to the new political course Ukraine is pursuing now," Socialist Party parliament deputy Mikola Rudkovsky said in a telephone interview from Kiev, the Ukrainian capital.

On Saturday, Putin had been more conciliatory. "Ukraine is not an abstract bunch of senior officials, and not a lot of oil and gas barons looking out for their own interests, but above all it is the brotherly Ukrainian people, and we must think about all aspects of relations between Russia and Ukraine," he said Saturday afternoon at a meeting with his Security Council.

Putin instructed Gazprom to supply gas to Ukraine through the first three months of the year at current prices, provided that by the end of the day Kiev sign a contract agreeing to pay market prices thereafter. But Ukraine said shortly before midnight that it would not sign the document.

Ukrainian lawmaker Rudkovsky said the events of the last few weeks had demonstrated Ukraine's continuing dependence on good relations with Moscow. "You can raise your campaign rating by struggling against Russia, but this is a very dangerous game in which you end up building a road which leads nowhere," he said.

Russia is demanding that Ukraine begin to pay rates similar to those it charges Western European customers, which are more than four times higher. Ukraine has been paying the equivalent of $50 per 1,000 cubic meters in exchange for shipping additional Russian gas to Europe.

Gazprom has demanded that Ukraine pay $230 per 1,000 cubic meters. The Ukraine government has said it is ready to pay market prices but insists on phasing them in gradually; Yushchenko is said to favor an initial increase to about $90.

"If Ukraine agrees to buy gas at $230, the consequences will be catastrophic," Rudkovsky said. "The chemical and metallurgical industries that now make Ukraine's economy highly competitive will immediately become unviable.

"This … will in its turn destabilize the national currency. And all of this will catastrophically affect the investment climate in Ukraine."


While Putin battles to keep his Iranian nuke contracts alive, he has energy-based political issues even closer to home.

YGMPeace & Best New Years Wishes For All !!!#1399101/1/06; 02:32:20

I hope we all prosper and continue to share knowledge and civilly expressed opinions in 2006! Thanks for all the years gone by. Yukon Gold Miner (YGM)....Ken
BillinOregon2006#1399111/1/06; 08:41:55

May you have peace, prosperity, good tidings and happiness in 2006.

Love the news, knowledge and demeaner that is exibited here kind people.

White RoseUnofficial New Year's contest -- gold high for 2006 and 2006 closing #1399121/1/06; 09:13:48

I guess that the high for 2006 when measured in US pesos is $900, and the final price for 2006 (1 year from now) will be $830.

Anyone else want to try their hand at this?

RadPreparing to visit Iran#1399131/1/06; 10:04:45

German media: U.S. preparing Iran strike

By Martin Walker
UPI Editor
Published December 30, 2005

WASHINGTON -- The Bush administration is preparing its NATO allies for a possible military strike against suspected nuclear sites in Iran in the New Year, according to German media reports, reinforcing similar earlier suggestions in the Turkish media.

The Berlin daily Der Tagesspiegel this week quoted "NATO intelligence sources" who claimed that the NATO allies had been informed that the United States is currently investigating all possibilities of bringing the mullah-led regime into line, including military options. This "all options are open" line has been President George W Bush's publicly stated policy throughout the past 18 months.

But the respected German weekly Der Spiegel notes "What is new here is that Washington appears to be dispatching high-level officials to prepare its allies for a possible attack rather than merely implying the possibility as it has repeatedly done during the past year."

The German news agency DDP cited "Western security sources" to claim that CIA Director Porter Goss asked Turkey's premier Recep Tayyip Erdogan to provide political and logistic support for air strikes against Iranian nuclear and military targets. Goss, who visited Ankara and met Erdogan on Dec. 12, was also reported to have to have asked for special cooperation from Turkish intelligence to help prepare and monitor the operation.

The DDP report added that Goss had delivered to the Turkish prime minister and his security aides a series of dossiers, one on the latest status of Iran's nuclear development and another containing intelligence on new links between Iran and al-Qaida.

DDP cited German security sources who added that the Turks had been assured of a warning in advance if and when the military strikes took place, and had also been given "a green light" to mount their own attacks on the bases in Iran of the PKK, (Kurdish Workers party), which Turkey sees as a separatist group responsible for terrorist attacks inside Turkey.

Goss's visit to the Turkish capital followed the rising international concern over recent statements by the new Iranian President Mahmoud Ahmadinejad that Israel should be "wiped off the map," denying the existence of Holocaust, and suggesting that Israel's Jewish population might be re-located to Europe.

In a December 23 report, the DDP agency quoted an anonymous but "high-ranking German military official" telling their reporter: "I would be very surprised if the Americans, in the mid-term, didn't take advantage of the opportunity delivered by Tehran. The Americans have to attack Iran before the country can develop nuclear weapons. After that would be too late."

The DDP report also said that several friendly Arab governments, including Saudi Arabia, Jordan, Oman and Pakistan, had also been informed in general terms that the Pentagon was preparing contingency plans, including "the option of air strikes," in the event of the new Iranian government precipitating a crisis.

Arab diplomatic sources have told United Press International that they have been given no briefings on any policy change beyond President Bush's "all option are open."

Bush's most recent such statement in public came on Aug. 13, during an interview at his ranch in Crawford, Texas, when he told Israeli TV: "As I say, all options are on the table. The use of force is the last option for any president and, you know, we've used force in the recent past to secure our country."

Other NATO sources have told United Press International that "all this may be mood music, a way to step up the diplomatic pressure on Tehran."

It is possible that leaks from NATO and German security sources are part of a ploy to convince the Iranian government that the Americans and their NATO allies are in dead earnest when they say a nuclear-armed Iran would not be tolerated, and that Iran had better start negotiating seriously.

But the German media speculation about the supposed U.S. plans has been fueled by a number of high-profile visits to Turkey this month, including trips by Secretary of State Condoleezza Rice, by the CIA's Porter Goss and by the FBI Director Robert Mueller, who also delivered U.S. intelligence reports on Iranian backing for PKK operations aimed against Turkey. There have also been some significant Turkish visits to Washington, as reported by Der Spiegel.

"Two weeks ago, Yasar Buyukanit, the commander of the Turkish army and probable future chief of staff of the country's armed forces, flew to Washington. After the visit he made a statement that relations between the Turkish army and the American army were once again on an excellent footing," Der Spiegel reported Friday.

"Buyukanit's warm and fuzzy words, contrasted greatly with his past statements that if the United States and the Kurds in northern Iraq proved incapable of containing the PKK in the Kurd-dominated northern part of the country and preventing it from attacking Turkey, Buyukanit would march into northern Iraq himself," the German weekly added.

The CIA Director's Dec. 12 call on the Turkish prime minister last for over an hour, far longer than customary for a mere courtesy call, and followed an even longer meeting with senior staff of MIT, Turkish intelligence. The Turkish Daily Cumhuriyet reported on December 13: "Goss also asked Ankara to be ready for a possible U.S. air operation against Iran and Syria."

Der Spiegel noted Friday that the latest high-level visitor to the Turkish premier was NATO Secretary-General Jaap De Hoop Scheffer. This is not unusual, since Turkey is a member of NATO, but the coincidence of these various trips prompted Spiegel to comment "the number of American and NATO security officials heading to Ankara has increased dramatically."

"In Berlin, the issue is largely being played down," Der Spiegel reported Friday. "During his inaugural visit with U.S. Defense Secretary Donald Rumsfeld in Washington last week, the possibility of a U.S. air strike against Iran 'had not been an issue,' for new German Defense Minister Franz Josef Jung, a Defense Ministry spokesman told Spiegel."

The original story in the German press which provoked the wider media furore was written for the DDP agency by a veteran reporter on security and intelligence matters, Udo Ulfkotte, who has in the past been criticized in the German media for being "too close to sources at Germany's foreign intelligence agency, the BND" (Bundesnachrichtendienst).

At the same time, Ulfkotte has himself come under scrutiny by German security services, and his home and offices have been repeatedly searched in the course of inquiries into allegations that he had published official secrets.

24karat2006 Au price predictions#1399141/1/06; 10:10:38

After a nice 18% runup last year, I figure a healthy 30% is due this year with increased interest in the metal. This would put the price around $672. Put me down for $672 high and a $660 close.

Happy New Year to all. I look forward to another year of intelligent financial conversation, even if it includes silver!

MKMy Man of the Year - Bundesbank President Axel Weber#1399151/1/06; 10:38:08

When incoming Christian Democratic Union finance minister Peer Steinbrueck publicly pressured Bundesbank to sell 120 tonnes of gold in Novermber of this year, president Axel Weber had an answer for him. Weber went public himself to say that the central bank would not cave-in to political pressure from the Angela Merkel government. "I assume," he replied angrily, "that we can agree to respect each other's responsibilities." One month later senior conservative lawmakers within the CDU fell in line with Bundesbank stating their continued opposition to gold sales. By taking this position, Bundesbank sent a loud and clear message that resounded in the gold market and bullion bank trading rooms around the world. Central banks can no longer be relied upon as a ready source of metal to support gold lending schemes. In early November gold traded in the $450 range. By December, it had pushed over the $500 mark and briefly nudged $540 per ounce. Weber's courage in the face of political pressure earns him our Man of the Year award.
MKMy Event of the Year - Russia's announcement that it would purchase gold in the open market to bolster its reserves#1399171/1/06; 10:43:21

This announcement touched off a string of similar announcements from other central banks including South Africa's. An article appearing in China's Peoples’ Daily called for the Chinese central bank to increase its gold reserves from 600 tonnes to 2500 tonnes as a means of diversifying out of its huge dollar position. Government policy in China is often presaged with articles in the People's Daily, and the thought of China being in the market for that amount of physical metal is likely to loom large in the gold market in the months (if not years) to come.
el doradoHappy New Year#1399191/1/06; 13:01:30

Here's wishing all of you a happy new year and a golden sunrise! Gold will reach 677.00 by April and 745.00 by year end.
*el dorado*

Liberty Head2006 - The Big Rise#1399201/1/06; 13:36:51

I am quite optimistic for the POG in 2006. Gold will continue to rise in value, while fiat will continue to decline in value.
I must admit however, if gold went to $10,000, it wouldn't lessen the deep, profound shame I have for the torture, rape, murder, fraud and extortion the US gov't perpetrates with impunity at home and abroad.

May 2006 be a year of growing vocal uprising among the decent people of the world.

"Beware of the risen people" – Thomas Moore, The Hunt for Confederate Gold

Best Wishes

MKCavan Man -- Gold Forecast 2006#1399211/1/06; 13:38:01

2006 could be a breakout year. My $525 2005 forecast hinged on G-8 programmed dollar weakness. Instead we had the dollar and gold going in the same direction for most of the year. The obvious question is "If gold managed to rise over 25% with the dollar appreciating, what might it do should the dollar resume its bear market?"

2005 brought us many surprises -- two of which I allude to below in my Man of the Year and Event of the Year choices, but none larger than gold's breaking its shackles with the dollar.

Another big surprise for me was the changeover in the mainstream press from anti-gold to pro-gold. In the last two months of the year, many gold market articles on the finance pages started with "Gold pushed higher on the prospect of central bank buying. . ." How many of us would have guessed at that change??

Much of this was signaled early in the Financial Times as I brought up here in a previous post. It all culminated December 21st in a full page opinion section article headlined: "Precious mettle - Why the world is daring to get a grip on gold." (The "mettle" instead of "metal" is deliberate.) I cannot recall in all my years of reading FT a full page article in the opinion section on gold's prospects -- and a largely positive one at that. To me it signals acceptance of gold's new role in personal, institutional and official portfolios - a major crossover.

One wonders what all of this might mean for the mining companies that have sold a goodly portion of their production forward at much lower prices and the bullion banks which have sponsored them. We could see a major Ashanti-style meltdown in 2006. I wouldn't surprised if we did. Although those who have acted against the gold price in the past have been humbled, I do not believe they have been taken out of the picture completely -- so we will still have bouts of price weakness as they attempt to assert their authority. There may yet be a battle between the commercial bullion banks and the international accumulators. Short-covering is likely come into play at any sign of weakness, and by the end of the year, we might be able to claim final victory in the long battle between the bulls and the bears.


In the background, rising oil is consistently and constantly pushing the inflation rate in countries all over the world. High oil prices are here to stay and the reality will wreak havoc from end of the globe to the other. As a result, big-time investor gold demand has become global in scope. All investors -- large and small -- no matter where they live must hedge or lose to currency depreciation versus goods and services.

Simultaneously, mine production has gone into a long term decline that might not right itself for a decade or more, and central banks are backing off their previous liberal policies with respect to their gold reserves. I don't think any of us can fully comprehend what central bank gold demand might do to the price particularly in light of the huge dollar reserves building up in the petro-states as well as the export-based economies.

And then on top of it all, we have the "Big X-Factor" for 2006 -- the ascendancy of Ben Bernanke to head of the table at the Federal Reserve. Who knows what that might mean for the economy and gold? I have always wondered if Alan Greenspan acted directly against gold all these years through the New York Fed trading desk, but how can anyone really know? We might learn more on that score as 2006 and the Bernanke chairmanship takes on a character of its own.

All in all, I agree with several commentators who have said:

"Gold may have entered a new era."

When you combine all of the above with the fact that none of the disturbing trends (the twin deficits, etc) driving gold demand has been addressed, it all adds up to what could be a breakout year for gold.

Rather than a semi-objective specific dollar forecast like I made last year, I will just say that gold could experience a break out year in 2006. As is the case in any breakout, the top will be difficult to call. If I were to make a wild guess though, I would look for a interim top in the $760 range.


As with any forecast published here, those trading on these opinions and forecasts take full responsibility themselves. Anything can happen and a down year in gold is not out of the realm of possibility.

The Invisible HandThe best-kept secret#1399221/1/06; 17:41:52

The best-kept secret in the investment world is this:
"Almost nothing turns out as expected"
Forecasts rarely come true, trading systems never produce the results advertised for them, investment advisers with records of phenomenal success fail to deliver when your money is on the line, the best investment analysis is contradicted by reality.
In short, the best laid investment plans usually go wrong. Not sometimes, not occasionally – but "usually’
(Harry Browne, "Why the Best-Laid Investment Plans Usually Go Wrong", New York: William morrow and Company, Inc., 1987, p. 1)

But of course, these are not usual times. Isn't what everybody thinks about the time at which she's living?

balzacTO 2006#1399231/1/06; 18:52:39

To all goldbugs wherever you view this site.


My portends: Gold at 30% higher by June 1st 2006 = US$ 672.00


balzacAU KARAT#1399241/1/06; 18:58:30

MY apologies , I hadn"t read far enough down to see your prediction, sometimes people think alike, maybe we are right???

Thoreauly@ Liberty Head (#139920)#1399251/1/06; 19:31:46

Sadly, I agree, longing for the day when I can be a proud American once again. I doubt, however, that this will be possible under the aspices of the "Empire of Debt" -- -- whose days look increasingly numbered.
WaveriderCONTEST??....did I hear CONTEST 2006??#1399261/1/06; 21:07:44

White Rose - please put me down for a POG high of $850.00 in 2006, with a close at $775.00. I think Bernanke and his helicopter $$ and an invasion into Iran will impact POG in 2006. We could also see POO hit $100.00. Cheers,


KnallgoldWeber/Steinbrück#1399271/1/06; 23:08:31

"When incoming Christian Democratic Union finance minister Peer Steinbrueck"

Not to be picky,but Peer Steinbrück is member of the SPD,the so called "great coalition" is made of CDU and SPD.

White HillsLiberty Head#1399281/1/06; 23:38:45

I know that USA gold has somewhat relaxed the language and the subjects that can be discussed here; however you, Sir, have gone far beyond what would be normal a discourse in interjecting your radical beliefs by accusing the USA of murder, torture, rape, fraud and extortion at home and abroad. The shame you say you are feeling should be because of your outrageous statements about this country. Normally a malcontent like you would just be laughed at but during this time of war when men are dying to defend this country and at the same time make other men free it is no laughing matter. I pity you if you believe the garbage you spew over this forum. It make everything else you say irrelevant to any discussion on any subject. God Bless America. White Hills
GoldiloxWho is the real patriot?#1399291/2/06; 00:46:49

@ White Hills,

You continually wave the flag but flatly close your eyes to any and all evidence.

It's sad that you can't understand that someone can love their country enough to not blindly follow those who stoop to the depths of the Mena Drug Gang that have bought their way into the White House for the last 22 years. By the way, when Ollie North was pardoned by Bush 41 for refusing to testify about his arms for drug deals, who was he selling all those drugs to? Is flooding our streets with heroin and cocaine REALLY in the best interest of National Security?

You can echo the babble that we are "not supporting the troops", but who is actually supporting them? Those who want them home alive to do their real job of defending America, or those who send them on misadventures to secure the poppy fields in Afghanistan and the oil fields in Iraq for their private stash?

Yes, we get the leaders we deserve. The history of the Bush family profiting from Nazi spoils, running drugs through Noriega, arming hit squads to kidnap college students in South America, propping up Saddam for 25 years, and escorting their bin Laden family business partners from the US on 9-12-01 speaks for itself.

Maybe these are all excusable actions to you, but a growing number of Americans are seeking a higher moral ground. We are no longer buying the line that "National Security" means enriching a few campaign contributors and selling out the American worker.

I have offered to explore the evidence with you on any Saturday or Sunday, but it seems you are more interested in blind loyalty than examining evidence of abuse.

specie-manPredictions 2006#1399301/2/06; 01:58:34

What is really patriotic:

1. To "support the troops" and to support the Government's actions and policies.

2. To question the Government's actions and motives and to hold Goverment to higher standards ?

Both actually. The common thread is eternal vigilance.

I hear all these things about domestic spying, outing of CIA agents, and so on and so on. I hear things about possible attacks on Iran and Syria (what about North Korea ?). An eternal "War on Terror". Whatever happend to the "War on Drugs" ? That is one thing I don't hear much about any more. I guess they found a better war ?
I hear plans for keeping the troops in Iraq until the "job" is done. When China ramps up it's space program, will we enter a new space race ? I haven't heard much about plans to "fix" Social Security and Medicare lately. Energy suppliers are realizing the pricing power that they have, but I don't hear much about conservation or alternate energy technologies.

So with that, on with the predictions in no particular order or logic, and with no particular reasoning other than gut feelings (I'm psychic, no ?).

1. Only one thing IS sure. All of the above is (and will be) very expensive !!! And with the cessation of M3 reporting, the only way we will know how expensive it all really is, is by the price of gold (and silver, etc., etc.). Gold will reach a high of $785 and end the year at $760. Silver will reach a high of $13.05 and end the year at $11.90 .

2. Russia has shut off gas supplies to the Ukraine. Ukraine always wanted a "market economy". And now they have it. Be careful what you wish for. Now they must pay market prices for natual gas or shiver. I predict that the Ukraine will threaten to block the pipelines that run through their country from Russia to Europe. A sort of blackmail, if you will. Eventually a deal will be struck - Ukraine will pay higher prices, and Russia will give them a reasonable discount (for a time). Crude oil will hit $86 and end the year at $86.

3. The Bush administration will continue to feel the heat of threatened impeachment proceedings. But those proceedings will be averted. The US will suffer a series of small-scale conventional terrorist attacks.

4. Iran will be bombed and special forces will conduct limited operations in the country. But no large-scale invasion will occur. The terrain of Iran is vastly more difficult than Iraq. Internal Iranian resistance to the hard-line government will increase, but not enough to overthrow the government. The Iranian oil bourse will proceed as planned, although it will have somewhat of a slow start due to attempts to thwart it.

5. Hurricanes will cause more damage in 2006, but not nealy as bad as in 2005. Major (but not catastrophic) damage will be caused by an earthquake in the US.

6. The "Housing Bubble" will lose some air, but will continue to float along defying gravity and expectations of deflation.

7. The stock market will not suffer a major crash. The bond market, however, will see a major "event". This will be unprecedented and nothing like it has ever happened before. It will be the conundrum for all time. The bond market will falter, and the masses (like they always do) will initially run to the bond market for cover ! The action will be highly chaotic, and the chips could fall in many different ways. The FED will indeed lose control of interest rates. The yield curve will remain stubbornly flat, but yields themselves will be highly volatile.

8. Emergency controls on capital flows may be initiated. Many dollars from overseas attempting to flow into sectors other than the bond market will be blocked. But that will only work for a while as the back-pressure builds and the flows find other routes to avoid the blockage - like water through a leaking (or blown) dike.

TownCrierGold price likely to remain high#1399311/2/06; 02:17:14

January 2, 2006 -- THE price of gold is expected to continue its upward momentum and remain on the high side this year on good investor demand.

Analysts believe the climb in global gold price will be driven by strong jewellery sales from the burgeoning middle class in China and India, Japanese consumers' concerns about inflation, recycling of petro-dollars by Middle Eastern investors and muted gold supply growth.

"Buying by the central bank will also boost gold price," said an analyst.

...a trader found last year's run-up in gold price puzzling."Inflation was tame and the US dollar firmed," he said.

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

The trader ought to spend more time reading at USAGOLD; then he'd not be so puzzled by the evolving price.


TownCrierGold Trades Near 25-Year Closing High as Investors Diversify#1399321/2/06; 02:35:37

Jan. 2 (Bloomberg) -- Gold traded near its highest annual close in 25 years as hedge funds and other large speculators may buy more bullion to diversify their holdings.

Gold ended 2005 at $517 an ounce, the highest since 1980, after having reached a 24-year high of $541 an ounce on Dec. 12 by buying from investors concerned over widening U.S. budget and current account deficit.

...The U.S. government reported a budget deficit of $83.1 billion, a record for November. The country's U.S.'s current- account deficit, a shortfall in trade and investment flows, is projected to widen to $759 billion this year from last year's $668.1 billion. That means more dollars need to be converted to pay for goods.

The U.S. current account deficit and oil prices pose a "significant risk" to the world economy, European Central Bank Governing Council member Nicholas Garganas said...

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

Just as it ever has, the system evolves as necessary in corrective response to similar evolutions of problems and imbalances that arise under the shortcomings of the existent framework.

Hence the latest rise of gold, as the major players seek it out, mindful that the era of the dollar as reserve asset has grown past its prime.


KnallgoldIran#1399331/2/06; 03:51:16

What about "unintended" collateral damage to the Iranian oil bourse by some "terrorist" attack?

I'm just wondering if the Europeans have more safe "free trading aces" in petto than the likes of Iraq,Cuba,Iran.

Btw,during this holiday season I started to read "Geld,Gold und Gottspieler" by Roland Baader,very important book in my view,1 or 2 faults in FreeGold suddenly sticking out.

Anyone familiar with the work of Baader?

TownCrierBuffett and major traders still see a dip in dollar#1399341/2/06; 03:51:44

Bloomberg; JANUARY 2, 2006 -- The investor Warren Buffett and the biggest banks in the currency market - Deutsche Bank, UBS and Citigroup - missed the dollar's rally in 2005. But for 2006, they are standing by their old predictions.

These investors and analysts missed the gain by focusing on the U.S. trade deficit instead of a widening gap in interest rates in the dollar's favor, driven by eight Federal Reserve rate increases.

Buffett and the analysts say they were not wrong, just early.

"There are signs the Fed may stop raising rates, so the dollar may go down," said Benedikt Germanier, a currency strategist in Zurich at UBS, the large foreign exchange trading bank.

Deutsche Bank, forecasts a drop in the dollar, with the euro rising to $1.27 by the end of 2006. UBS in London, expects a euro rate of $1.30, and Citigroup in London is the most bearish on the dollar, at $1.36 for the euro.

Together, the banks account for about 37 percent of the trading in the $1.9 trillion-a-day market for foreign exchange, according to Euromoney magazine.

Buffett, who has been selling the dollar since 2002, said the currency should fall because the trade deficit, which grew to a record $68.9 billion in October, keeps widening.

...according to a statement from Berkshire Hathaway on Nov. 4, the company, which had $926 million of pretax currency losses in the first half, used forward contracts, or agreements to purchase or sell a currency in the future at a preset price.

Buffett, based in Omaha, Nebraska, said the United States must introduce tariffs to make imports more costly and do more to promote exports.

"The policies that we're following are likely to lead to a weaker dollar over a long period of years," Buffett said at a news conference in Boise, Idaho, on June 20. "It's not a forecast for next week or next month or even next year."

Debbie Bosanek, an assistant to Buffett in Omaha, said Buffett had no further comment.

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

With the above-stated banks accounting for "about 37 percent of the trading in the $1.9 trillion-a-day market for foreign exchange", one has to consider the impact their dollar-bearishness in the coming year may have by way of self-fullfilling activity in the market.


GoldiloxXchange rates#1399351/2/06; 04:15:56


"Deutsche Bank, forecasts a drop in the dollar, with the euro rising to $1.27 by the end of 2006. UBS in London, expects a euro rate of $1.30, and Citigroup in London is the most bearish on the dollar, at $1.36 for the euro."

Should we assume by these comments that the prominent bankers expect the "bugger-thy-neighbor's currency" tactics to:

1) desist, or
2) not work?

Although, these levels really just put us back at 2004 equilibria.

White RoseUnofficial New Year's contest -- gold high for 2006 and 2006 closing #1399361/2/06; 08:32:44

I propose an unofficial contest to guess the high price for gold in 2006 as measured in US "dollars", as well as the closing price for the year. Here are the entries so far:

24karat: $672 for 2006 high, $660 for EOY 2006
Balzac: $672 for June 1, 2006
el dorado: $745 for EOY 2006, $677 for April 2006
MK: $760 or 2006 high
waverider: $850 for 2006 high, $775 for EOY 2006
White Rose: $900 for 2006 high, $830 for EOY 2006

Let me add my main prediction for 2006: everyone will be disappointed.

I invite everyone to try their hand at predicting the gold price high and ending price for 2006.

White HillsWho is the real patriot#1399371/2/06; 09:23:33

Sir Goldilox, AMAZING! White Hills
SlowmanGold guess for 2006#1399381/2/06; 10:27:37

Its my guess that gold will hit 752 and closet the year at 726.40. Going to be a very good year for gold bugs. I also suspect silver to close at 22 which will be better than gold. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Gene@ Specie-Man#1399391/2/06; 10:28:15

Your item #7 is clear as mud.I hate it when people don't use plain, understandable English. Please be specific. What do you mean in #7?
GoldiloxAmazing, yes#1399401/2/06; 10:40:30

@White Hills,

Even more amazing that you never address a single issue in your smug responses.

POG is not rising in a vaccuum. As many have remarked, it is a very political metal, and reflects the world's political climate.

Not that rising repression is "good" for anyone, but many goldophiles recognize that the insurance value of private gold ownership is even more important as we move toward martial law.

General Tommy Frank's "Cigar Afficionado" interview was quite revealing.

Check it out.

GoldiloxAlt Energy#1399411/2/06; 11:00:53

@ specieman,

"Energy suppliers are realizing the pricing power that they have, but I don't hear much about conservation or alternate energy technologies."

Without going into tangential detail here, the mainstream media is passing over this topic, but there is actually a lot going on that can be accessed on the internet. Here are just a few favorites for your reading pleasure. (news site) (news site) (news site) (news site) (recently passed on researcher with great position papers) (ret. Lockheed and US Army researcher) (young post-grad researcher) (independent rsearcher)

Mthirsty1(No Subject)#1399421/2/06; 11:01:05

I have enjoyed your discussions the past year and looking forward to the coming year.$640 high,$640 eoy.M.
USAGOLD / Centennial Precious Metals, Inc.To begin the New Year, Resolve to Learn More about Diversifying your Portfolio with Gold!#1399431/2/06; 11:05:41">gold ownership starter kit
specie-manPredictions 2006 - explanation of #7#1399441/2/06; 11:33:13

In years past, when a major economic risk developed, investors would typically undertake a flight to "quality" or "safety". That usually meant buying US Treasury bonds.

But what if a major "event" were to occur in the US bond market ? Suppose Asian banks slowed their buying of US bonds, all the while M3 exploded upwards due to the twin deficits (and monetization of those deficits by the Fed). If no one buys the bonds, then the Fed has to.

In other words, the so-called bond market "conundrum" is really this:

The current flat (or slightly inverted) yield curve is artificial. It is an artifact, purposly created by the Fed to depress inflation expectations. Everyone thinks that an inverted yield curve signals a coming recession. What better way to manage inflation expectations than to engineer an inverted yield curve by raising short-term interest rates and by buying (monetizing) longer-term US Treasury bonds ?

In the end, as investors flee the bond market, the Fed will enter the bond market, all the while saying anything and doing anything in an attempt to cover their tracks and to manage expectations and sentiment.

In sum: the Dollar will go down against "things".

Goldiloxmanaged inversion#1399451/2/06; 12:08:38

@ specieman,

"What better way to manage inflation expectations than to engineer an inverted yield curve by raising short-term interest rates and by buying (monetizing) longer-term US Treasury bonds ?"

Better than stright monetization has been the buying of debt by "trading partners" and "silent" Caribbean accounts.

This keeps the spotlght off the FED as an open participant.

With foreign CBs falling "out of line", it will be interesting to see who assumes their role.

Gene@ specie-man#1399461/2/06; 12:16:26

Thanks. That's what I thought you may be alluding to; but I don't see why or how the masses would rush to the bond market for safety under those conditions. I'm not convinced the Fed can manipulate the long end rates w/o flooding the world with dollars. They certainly would have to offer to buy more than were offered for sale to keep the long rates low. I remember the early 80s when rates on the long end hit the high teens or more.Folks who bought then are sitting fat & sassy today, if they held on.
This is all interesting conjecture anyway. I guess we can't say how this will end, except we are pretty sure it will end badly.Regards.

Druid@Specie-man#1399471/2/06; 12:32:31

"In sum: the Dollar will go down against "things"."

Druid: Great commentary Sman. As this plays out, the inversion will become more pronounced but what will become of all that "money" that is scrambling for some form of safety? It's my guess that the Bond Apprentices will head for equities which will cause a massive re-inflation of those markets both here and abroad thus fooling local investors. I believe this is already occurring with the Nikkei. While this plays out, certain Central Bank Masters will be reconfiguring their portfolios by swapping out of US debt and dollar reserves with the ultimate wealth reserve of all time, gold bullion.

I'm still trying to figure out the Iran angle and how this fits into the puzzle. It could be that we're in the initial stages of the mother of all re-inflations and that this additional buying power into the equity markets could foretell that the "markets" like the idea of going into Iran and thus provide the justification for it. I don't know but am still thinking on this one. Great post Sman.

specie-manMore on #7#1399481/2/06; 12:44:28

When the Fed raises short-term interest rates, that sends a signal that they are serious about maintaining the "Strong" dollar. With the yield curve tilting towards negative, that sends an additional (but false) signal that recession is coming and that bonds are the thing to buy. So the "masses" (or perhaps I should instead call them "fools" since the "masses" generally don't have any money to invest) come in and buy bonds (and the Fed picks up the slack). And the "smart money" will be more than happy to sell them the bonds.
specie-manFed Speak#1399491/2/06; 12:57:14

Greenspan appears to enjoy superfolous public speaking. Bernanke seems like a quiet guy. But don't be suprised if "Fed Speak" actually increases in 2006. As the danger level rises, more Fed Speak will be spoken.
specie-manAlternate energy#1399501/2/06; 13:00:33


Yes, obviously there are prive entities working on energy technology. But I don't see much evidence of Governemnt activity in that arena. And if there was, that would be just one more thing to pile onto the budget deficit.

Last I heard, they were actually laying off people at NREL (the National Renewable Energy Laboratory).

specie-mantypo#1399511/2/06; 13:01:25

"private" entities
specie-man@Druid#1399521/2/06; 13:08:26

Yes, I think equities may perform reasonably well in 2006. If you buy ownership into a corporation, and that corporation owns assets such as real estate, mineral deposits, intellectual property, etc., then you are indirectly buying "things".

specie-manRE: Unofficial New Year's contest -- gold high for 2006 and 2006 closing#1399531/2/06; 13:10:34

@ White Rose
Please see my guess in message # 139930 (point #1).

ThoreaulyGold price predictions#1399541/2/06; 13:28:48

High: $750
Close: $725

White HillsMy mind is made up, don't confuse me with the facts#1399551/2/06; 13:58:37

Sir Goldilox:

I was waiting to answer you in detail on Saturday or Sunday, when political discussion is allowed, and I will still do that, but here is one fact you can chew on in the meanwhile.

The bin Laden flight was on September 20 (see footnote 28 in the 9/11 Commission report, with supporting documents). That was one week after the FAA allowed commercial air traffic to resume at 11am on Sept. 13.
Keep the facts straight and don't depend on Michael Moore for your information. If this is representative of your "facts" I am sure that I will find other misinformation when I have time to check all of your other accusations, falsehoods, half-truths, insinuations and "left-wing talking points" parroted from left-wing blog sites such as "freerepublic" See you on the weekend. WhiteHills

Bound Spirit@goldilox 139940#1399561/2/06; 14:12:21

Dear Goldilox:

Many of us (as I'm sure you would claim) "knee jerk" patriots do not wish to engage in "issue" politics as so typifies a liberal or the "win the battle - loose the war" libertarian. We generally start from some Acoms Razor view of the world that deals quite easily with the likes of you and all your petty and mostly irrelevant issues. For example, here's a glimpse of General Franks' world view that I happen to agree with – (taken from the General Franks interview you posted)

((Franks ended his interview with a less-than-optimistic note. "It's not in the history of civilization for peace ever to reign. Never has in the history of man. ... I doubt that we'll ever have a time when the world will actually be at peace.")).

Now, try to reconcile this statement with your criticisms of the USA and your desire for higher "moral ground". Do our reactions to the events of 9/11/01 square with Frank's statement? You bet. Can these events be explained solely on the basis of the greed of the Bush family? Please! Where would your so called 'higher moral ground' lead us? hmmmmm? To a refutation of Franks world view? Please! Speaking of vagueness, your reference to higher moral ground is well cloaked in mystery but is in fact your acoms razor. So don't be shy - put it to the test.

I'll remind you that our founding fathers were quite wealthy – but chose a path that put their lives, the lives of their families, and their fortunes at mortal risk. Of course, extreme pessimism would chalk up their actions to simple greed for power. But my personal reflections yield that people can have convictions that transcend personal aggrandizements. I guess that makes me a hopeless idealist. Of course I don't care - Whether humans can intrinsically transcend their inner evolutionary animal, is not important, a belief in that transcendence,is. No?
What else is there worth believing in?

Let me supply an alternative explanation for current events. The larger view IMHO and a little lesson on reality as it is not what you want it to be. Iraq and conflicts in the middle east (and this includes control of oil) is fundementally a cultural conflict. Now I don't harbor misgivings against the people in Islamic nations any more than I harbored against the American Indian – but the simple fact is that irreconcilable cultural differences must be resolved one way on another. That is the fundamental defining feature of the history of civilization that Franks refers to. Does the West have irreconcilable differences with Islamic culture? You bet. If you would have us believe that reconciliation can be accomplished through the application of pure reason (akin to the Rodney King "just get along" montra) – then you, my fellow gold bug, are the naive idealist. Trust me when I tell you that within Franks’ statement is an acknowledgment that war, and the threat of war, has been and will always be, the primary reconciling agent.

Now if you don't think this is fundamentally a cultural conflict – or if you don't see any security need to preserve U.S. global hegemony, then your issues of personal motivation through greed and other selfishness may have more validity. But state your world view first so I can know if your Sunday morning chats can be productive. Based on your posting to White Hills, I won't be missing church.

Now here's the part where you will call me a fascist. Do I think the West should prevail in this cultural war. Yes. Why? Because on balance it is the superior and more adaptable cultural. Are there elements of islam that I like? Yes. Are there western cultural elements I don't agree with? Yes. But I won't throw the baby out with the bath water when there's so much at stake. And that's what all your issues amount to – bathwater. My willingness to stategically suspend a few freedoms to protect the baby is what makes me, and IMO, all true citizens, a patriot.

Finally, what makes me a believer in real money? Fiat has placed our Judeo Christian/ Roman Greco cultural at great risk. Can we survive it? I don't know. But when it is combined with the other forces of secularism and the collapse of our social institutions, I must admit to harboring a "half empty" demeanor. And to be quite honest, you and others, who seemingly operate without a larger philosophy, are stealing what little water I have left.

Please forgive me for my inability to participate in the forum on a continuing basis – I just don't have the time and today's "day off" posting is a rare exception. I do however have the time to appreciate responses.

GeneIran/Oil/Gold#1399571/2/06; 14:17:26

I don't think we need an excuse about Iran other than self preservation. If Iran develops a nuclear weapon, they will use it.I think the groundwork is being layed right now amongst our allies & aquaintences for a strike either by us or Israel or both against the facilities in Iran. Of course oil & gold prices will explode with the first detonation in Iran. My only problem with this is that I don't think we should do it without having first instituted conscription again.We need more "feet on the ground" capability. We should not undertake such activity w/o having considered all possible "unintended consequences" & w/o overwhelming force on our side.
By the way, my guess on the 2006 gold high & close is $823.

GoldiloxUsing Nukes#1399581/2/06; 15:01:05

@ Gene,

Using your "logic", someone should have nuked the US long ago, as it is the only country who, once having a nuclear arsernal, immediately used them on civilian targets.

In fact, the US is still the only force using nuclear contaminated ammo, preferring to expose its own troops and continue to deny the reality of "Gulf War Syndrome" until most of those soldiers affected are already dead from slow nuclear poisoning.This is the same insane policy as the chemical and biological weapons employed in Viet-Nam. My brother came home from Nam and suffered for 15 more years from officially denied "friendly fire poisoning," and was finally awarded his due "honor" posthumously. I hope your children and grandchildren are treated better by your blood thirst than my family has been.

Thankfully, everyone in the world does not as readily promote mutually assured destruction as you do.

Gene@goldilox#1399591/2/06; 15:12:02

As much as I would like to respond, I know from experience that no amount of reason or logic will convince a left wing whacko of anything. Boy, did Bound Spirit ever have you pegged correctly. Discussion over!
GoldiloxMore name calling#1399601/2/06; 15:59:26

Thanks Gene,

I cetainly expected no less than childish epithets after reading your first post.

I have some very conservative friends who are more than willing to engage in intelligent "no-name-calling" debate, but you obviously aren't prepared for that level of discourse.

Liberty HeadQuestions#1399611/2/06; 16:07:59

What is it about people who speak the truth, that they must be crucified?
What is it about people who hear the truth, that they must crucify?
Does the truth not remain long after the messenger has been demeaned and murdered?

Best Wishes, from one who has been condemned to eternal irrelevance.

SmeagolWhen Gold Is For Losers... And when It's Not#1399621/2/06; 16:14:33

Gold And "A Mug's Game"
The Gold / US Currency in Circulation Ratio
by Mark J. Lundeen


"For the better part of the past 86 years, holding gold has been what Humphrey Bogart in a 1938 gangster movie would have called "a mug's game". A mug's game being an occupation best left to losers. In this article I will discuss an oscillator that for 86 years has correctly called the turns when gold was the smart play and when gold was best left to the mugs. I call it, "The Gold / US Currency in Circulation Ratio" (The Gold / CinC Ratio or just The Ratio). Right now, The Ratio is telling us that gold is a mugs game - no more."

"The Gold / CinC Ratio is very simple. To construct it, one only uses as variables the price of gold and US Currency in Circulation (CinC) both indexed to 1.00 on 05-January-1920."

"The Ratio trends downward as CinC increases at a rate faster than the price of gold and holding gold becomes a mug's game. As The Ratio trends down towards its lower end point in the cycle, the markets reach a point of revulsion to Federal Reserve Notes (dollars). Confidence in "the full faith and credit" behind those controlling the issue of US currency is shaken, serious money sell their dollar assets to buy hard assets including gold, and gold is no longer a mug's game."


A different... ssimple way of showing how It prices dollars...and what we all know is coming for dollars and they that keep and use them. Ssir Gandalf would like the chartses, they resembles "dollar-waterfalls" he likes so much.

May you find safe ways through 2006 and beyond, precious.


GoldiloxResponse to "Bound Spirit"#1399631/2/06; 16:18:14

Thanks for the reply. I differ with your thoughts, but I have never labeled you "facist", or anything else - those, my friend, are your own words. I'm surprised that you would stoop to accuse me of that, given the thoughtfulness of the rest of your reply. I'm happy to engage your ideas in open discource when appropriate without resorting to name calling. I leave that tactic to less thouhgtful posters.

As to the sources of my "world view", I rely on reports and anlayses by those who review the largest slate of facts that can be assembled. One of my favorites is a book promoted on the very right wing Puplava site entitled "Confessions of an Economic Hitman", a rather scathng treatise on the tactics of dollar hegemony.

As to White Hills accusation that I get my facts from Michael Moore, I have referenced a lot of sources in the last few years, but never Michael Moore, as I believe he is no more independent than FOX "bought and paid for" News. If WH is unable to differentiate those sources, I suggest he should do more in-depth research before posting such off-the-cuff remarks. As to left-leaning tendencies, I have no more love for the Democratic Party's "government trough" agenda than I do for the NeoCons "conquest" agenda. I agree more with Ron Paul more than anyone on the left side of the carpet, but I don't let spinster's labels prejudice my opinion of someone's ideas.

I won't go into any more detail in deference to the host and topical preferences, as I do not reference these issues anymore except when responding to someone else's post.

As POG reflects the world political climate, among other things, I think we are likely to experience MK's projected "breakout" in the coming months. I concur with those who are predicting some large increases and wild volatility in response to dollar weakness and political unrest.

Prosperous New Year to all.

goldquestWrong Gold Forum!#1399641/2/06; 16:24:28

It's the "other" gold forum that discusses everything except gold and precious metals.
They are also, experts at insults, religion bashing and keeping their forum in an constant hostile enviroment.
If the members of this great gold forum want that kind of a dialogue, then I wish everyone a "Happy New Year," and a goodbye.

GoldiloxMug's Game#1399651/2/06; 16:28:37

@ Sir Smeagol,

Interesting article. Despite all efforts to sweep abuses like Barrick-Banchard under the table, the "smart money" responds to the bigger picture, which is not very fortuitous for unabated dollar hegemeny.

I still question the bankster predictions TC posted yesterday, as I wonder how willing they are to continue their "bugger thy neighbor's currency" policies, but it is very likely that in the nearer term, gold will respond well irregardless of CB reactionism.


Smeagol...and the beginning of...???#1399661/2/06; 16:32:00 The End Of The Innocence
Rob Kirby

"To any untrained [or uninformed] eye, viewing the stockpile data of physical gold 'warehoused' at the NYMEX's COMEX division in NY - admittedly nothing seems to be amiss [ie. warehoused totals don't seem to change much]."

"The "churn" on COMEX - for now - serves as strictly a 'change of ownership' of the physical stockpile. It seems the physical metal ownership is being acquired by some entity [s] in such a way as not to draw attention by significantly drawing down on stockpiles - so it's all optics."

"Over the next three months, the U.S. dollar faces an uncertain future owing to likely significant liquidations in favor of the Euro with the establishment of a Petro Euro Oil Bourse - [March 20/06]. This uncertainty could significantly jeopardize the U.S. dollar's standing as the world's reserve currency."

"March 20, 2006 - like it or not - is shaping up to be a date of significance. As this date approaches it will be interesting, indeed, to observe the machinations of COMEX warehouse stocks of metal as well as the fortunes of Iran - geopolitically on the world stage."


The dots are being connected...we watches...



Smeagol...we forgot to add the part#1399671/2/06; 16:40:27

in our last Post, about the Fed susspending their M3 publishing at the ssame time.

And the Ides of March to boot. What a confluence.

Ssir Goldilox, the Banksters will do what they have always done...meddle in affairs better left to the natural order of things...until everyone wises up... or worse.


Mthirsty1Mercury#1399681/2/06; 16:45:44

A very interesting article on mining in Nevada.Never realized Nevada is the third largest gold producer in the world behind South Africa,and Austraila,and produces four fifths of the gold in the united states.
PH in LASupporting US global hegemony!#1399691/2/06; 16:47:15

Dear Mr. Gene,

Thank you for articulating in advance your fascist point of view by calling Goldilox a few names and quickly declaring your contribution to the discussion over. At least this is something we can agree on, even as the content of your and Bound Spirits' remarks turn stomachs throughout the thinking world.

Thoughtful members of the world community do not take General Frank's opinion as the word of law any more than they support conscription as a way to get "our" oil out from under "their" countries. For your information, the "clash of civilizations" that warmongers like to cite as the reason for present-day conflicts already happened a thousand years ago. Rather, it is the racist character of the State of Israel that is the root cause of the state of today's world. When apartheid was the official policy of South Africa, the civilized world brought pressure against that rogue nation until it was abolished. This will happen eventually to Israel, too. No matter how many fascists and religious racists promote war as a solution until it happens.

If you want to support the "institution of conscription" as preparation for your "final solutions" may I suggest that you make your move by signing up yourself. You might consider requesting that the daughters of our oh-so-brave President Bush join you, too. Such a "voting with your feet" action would be far more persuasive than any list of names you might like to call the "liberals" and "left wing whackos" that find your views repulsive.

For my part, I will continue to oppose aggressive war just as I did during the Vietnam war. I will never support the government of the United States in any use of nuclear weapons to subdue any other part of the world, nor will I support the ongoing commission of crimes against humanity, war crimes and/or violations of US laws, all of which are trademarks of our current government, in any misbegotten bid to preserve "U.S. global hegemony" or whatever other fancy name you would like to use to describe tyranny and/or human oppression.

GoldiloxKirby's thoughts#1399701/2/06; 16:48:21

@ Smeagol,

Kirby's observations bring up an interesting point. Many posters have suggested that nationalization of in-ground resources may be imminent if more drastic measures are needed to retain national wealth, but what about a Nixonesque nationalization of the Comex to keep inventories in-house?

Or maybe not a complete nationalization, but serious export restrictions, instead.

That would certainly add fodder to the fan.

GoldiloxWar Messages#1399711/2/06; 17:19:57

@ PH,

Please don't lump Bound Spirit with posters as unwilling to converse intelligently as Gene. At least Bound Spirit states his case and is willing it defend it. As with White Hills, I am always willing to debate when he is willing to bring his research to the table (on weekends and holidays).

The bottom line is that none of this is about my or anyone else's beliefs, but the revelation of goings on about us to our mutual enlightenment as a group.

Some affect gold overtly, and some, as Another revealed in his oil for gold analogy, are more covert in their actions and effects.

The wars, as dollar hegemony actions, certainly affect POG (the last Iraq invasion saw a 25% run up in a short time), but not always as expected.

Nor do we always immediately recognize the cause and effect. Was the POG run up just a natural response to political instability, or a more specific response to the policy of printing $billions more debt to purchase a "coalition"? Between Pakistan, Turkey and Israel, there were more than $50 Billions on the table for coalition support. That's a lot of overnight debt to add, on top of the direct costs of war.

GoldiloxBase metal majors jack up prices#1399721/2/06; 17:36:29


Buoyant global rates seen as trigger
Dilip Kumar Jha / Mumbai January 03, 2006
Domestic base metal producers have increased their prices substantially, effective January 1, in sync with international rates.

State-owned integrated copper producer Hindustan Copper, in one of the largest-ever price hike, has increased rates by Rs 11,000 a tonne across the board,.

Aluminium major Hindalco Industries has hiked selling prices by Rs 4,000 a metric tonne, while state-run National Aluminum has raised prices by Rs 3,500 a metric tonne across all product categories.

Hindustan Zinc, the largest zinc producer in the country, also raised its selling prices by about Rs 1,300 a tonne to Rs 107,300 per tonne (SHG) effective January 1, 2006. In the case of aluminium, this is the second price rise within a span of 15 days, following the 5,000 a tonne hike on December 17.

The current hike has increased prices of aluminium ingot IC20 to Rs 111,450 a tonne, while billets CH10 has increased to Rs 114,450 a tonne. Aluminium wire rods WE20 surged to Rs 120,050 a tonne, while aluminium cast strip CS10 has shot up to Rs 120,800 a tonne.

Aluminium prices are going up interruptedly in the international market with the white metal touching all time high of $ 2300 on the London Metal Exchange (LME).

Lower than expected aluminium inventories in November are mainly attributed to the current price rise. Total world aluminum inventories in November fell by 30,000 metric tonne to 3.195 million tonne, from a revised 3.225 million tonne in October. Total unwrought aluminum inventories in November fell by 18,000 tonne to 1.765 million tonne compared with the previous month.

Indian aluminium production, however, was higher at 612,247 tonne, up 6.7 per cent in the first eight months of the financial year.

"A similar price rise in the international market is not the only criterion on which we decide the new price trend. There a number of other factors including comparative realisation in the international markets. If the realisation is better in the international markets, then we increase prices. Ultimately, all are working for making money," a Nalco official said.

An official from Hindustan Copper said, "Monthly average LME copper prices, on which prices are decided, are calculated at $4576.78 in December compared with $4269.34 in November. We had no choice but to raise them in order to bring them at par with international rates."

Despite a 25 per cent surge in output at 329,465 tonne during April-November 2005, prices have picked up owing to higher international prices and declining stocks across global warehouses.


As energy is a major cost item in mining and delivery, this is hardly unexpected, especially as demand is experiencing no abatement either.

Gene@PH in LA & Goldilox#1399731/2/06; 17:36:45

Please go back and read my first post. You are attributing volumes to me that I did not write. I never said anything about Gen. Franks. I have never read anything he has written. I certainly do not advocate any nuclear strike against anyone. I am not a fascist or a racist and have never been so accused. I was not in favor of our participation in any war in places where we were not directly threatened, including this one and the two before it.I served in one & am too old now to do it again. Though I think the South Koreans are mighty glad they are not living the life they would have had we not been there.
What I said was that I believe Iran will use a nuclear weapon if they can get one; and they would use it against us if they could. There is still a diplomatic door open to them. They don't need to enrich their own uranium. If a crazed criminal stands before me armed and says he's going to kill me, I'm going to do my utmost to shoot first. If you say that's wrong, so be it. I'll still shoot.As far as I'm concerned, American hegemony, crooked politicians, and the other things you both mention, they are not even relevant in this instance. This is strictly a case of survival.
By the way, we get most of the oil we use from our neighbor to the north.

YGMHear Hear to These Remarks of Goldquest's#1399741/2/06; 17:53:26

goldquest (1/2/06; 16:24:28MT - msg#: 139964)
Wrong Gold Forum!
It's the "other" gold forum that discusses everything except gold and precious metals.
They are also, experts at insults, religion bashing and keeping their forum in an constant hostile enviroment.
If the members of this great gold forum want that kind of a dialogue, then I wish everyone a "Happy New Year," and a goodbye.

Lots of pathetic posts here today and other days. Can't speak of Silver w/o flak and insults but we have to wade thru the piles of crap posted today to follow any PM conversation. One or two manage to slip in politics and conspiracy crap ANY day of the week now. Maybe this is not the USA Gold Forum of old anymore. Too bad as this was always the best Gold & PM talk site. What next? HuTu's vs Tutsi's? Religion? Anti fur lobby?...YGM.

SmeagolKeeping It within borders...#1399751/2/06; 18:15:24

Ssir Goldilox: "...what about a Nixonesque nationalization of the Comex to keep inventories in-house?"

Hmmm...we thinks that level of interference in the marketses would be a thing of lasst resort, precious, but COMEX is not the ONLY place to get It, anymore. If the US-country does something like that it will only add to the "Dumb Things We've Done" side of the ledger.


SmeagolTaking Shots at the Mother Of All Gold-Price Contessts#1399761/2/06; 18:24:45

White Rose (1/2/06; 08:32:44MT - msg#: 139936)
"I propose an unofficial contest to guess the high price for gold in 2006 as measured in US "dollars", as well as the closing price for the year."

Predict the high AND ending price of It a year from now...with all that is on (and above, and below) the horizon?? You might as well have assked us to pull Melda Laure's elven bow! Ssss...what tassks they sets us, precious! But, ssince we loves to guess It sso much, we must try...sss...even with no or little hope, and less training!

Will a kind Giant please hoisst us up... sso we can use this?.... thank you!

For the ending price of It in 2006.......errrrr-r-rghH!TWANG!sshhhhhhhhh >Thunk!<


sss...and for the peak price of It in 2006.....errrr-r-r-aaaAARGH-H-H!...TWANG!!OWWWW! Our fingers!! sshhhhhhhhhh >THUNK!!<


Ach! Sset uss down now and take away this tricksy thing! It's jusst as bad for us as elf-cakes!

Not as high as others... but we will cover that by saying our guesses might be out the window anyways if some unexpected major "event" happens during the year.


YGMNationalizing Gold "In Ground"#1399771/2/06; 18:29:29

Personally as far the thought of western world, democratic Nations usurping publicly owned Mining Company's Gold reserves goes, I find the notion is totally ridiculous. We have many laws that would have to be legislated and changed and outside of total Gov martial law these transitions would take years. The dollar amount which would have to be paid in compensation would be staggering. If it ever did come to pass you wouldn't own any private Gold long before they take the Gold in ground. Confiscation will come long before Nationalization.
MKForum rules change#1399781/2/06; 18:30:05

After much thought and discussion, including input from USAGOLD-Centennial Precious Metals clientele who either participate in this forum or visit it regularly, we have decided to return to the gold only discussion format and that includes the weekend. As of this post, this forum is no longer an open forum. If you see a post disappear, it is most likely because we have deemed sufficiently off-topic to warrant removal. We see this return to our original format as in the best interest of both the firm and the forum itself.

With the New Year upon us, we felt it would be a good time to make this change. We are looking forward to 2006 as an important year for gold and the international economy. It is our sincere hope that this unique forum will serve as a source of information and opinion for our current and prospective clientele.

Thank you for your co-operation.

YGM2006 Hi & Close Au#1399791/2/06; 18:36:34

High--$$$ 999.99 $$$
Close--$$$ 999.95 $$$

If wishes were horses, beggars would ride. Now awaiting Invisible Hands quote (smile) I KNOW from past experience I'll like his 2006 estimates much better.

Cavan Man@ The PH Man...#1399801/2/06; 18:42:46

Finally...after all these years...we are in complete harmony! Salutations...CM
Smeagol...and so it begins (?)#1399811/2/06; 18:49:07,1283,42745,00.html

by Declan McCullagh
2001-03-30 15:00:00.0


"WASHINGTON -- The Secret Service has raided a New York state business that exchanged dollars for grams of the digital currency called e-gold.

A bevy of agents from the Secret Service, Postal Service and local police recently detained the owners of Gold-Age, based in Syracuse, and seized computers, files and documents from the fledgling firm.

U.S. Attorney Daniel French said Friday that the investigation involved charges of credit card fraud. "We haven't brought charges yet," French said. "We're in the investigative phase."

Gold-Age owner Parker Bradley says that during his eight-hour interrogation on March 12, the Secret Service seemed less interested in credit card fraud and more interested in the mechanics of e-gold. Until last year, Bradley accepted credit cards and paid out e-gold, but said he quit because too many people used stolen credit cards when conducting business with him.

"The interrogation became less about me and more about politics and e-gold," Bradley said. "They were trying to get me to blame e-gold for fraud. Just to be blunt, these guys have no clue about how e-commerce works, how e-gold works or what I was doing." ....

"Bradley, who was raided, says that he's retained a lawyer and is asking that his computer equipment be returned. He said that in addition to the Secret Service seizing his business records, the raid seemed personal: They snatched his passport, birth certificate and personal checkbook."

"When it was obvious I had done nothing wrong, they tried to get me and my wife -- interrogating us separately -- to implicate e-gold," Bradley said. "They said, 'Might (e-gold) be doing this, could they be doing this?'"


More at link.

The REAL quesstion is - why are "THEY" (U.S.) doing THIS? ~>8-(


SmeagolInstant Law#1399821/2/06; 18:55:33

Ssir YGM (msg#: 139977)

"We have many laws that would have to be legislated and changed and outside of total Gov martial law these transitions would take years."

Two words, precious:

Executive Order.


specie-manRE: ...and so it begins (?)#1399831/2/06; 18:55:39


VERY interesting...
Someone views E-Gold as a threat, it would seem.

GoldiloxConfiscation vs. Nationalization#1399841/2/06; 19:08:14

@ YGM,

I think that these are two horses of only slightly different color. You suggest that too many laws would need to change and it would take months to implement nationalization. One might have originally thought that of confiscation, as well, but it took only an overnight emergency Presidential proclamation, and laws followed later to support its enforcement.

More and more things that constitutionally "require" legislation are finding their source in admin orders that are later supported by legislation, so while there may be many reasons to doubt nationalization, your explanation doesn't strike me as one that would hinder today's governmental processes.

GoldiloxRules Change Clarification#1399851/2/06; 19:14:02

@ MK,

Does this mean discussions of silver, oil, and NatGas and non-gold currencies are now considered out of bounds, as well?

Not trying to be facetious, but would appreciate some clarification of the boundaries.

YGM2006 Up Up & Away.#1399861/2/06; 19:16:49

Au & Ag off to a running start. Let er rip!
GoldiloxAu and Ag open#1399871/2/06; 19:19:50

Actually moviing in opposite directions at the HK open, but the night is young!
MKGoldilox#1399881/2/06; 19:32:42

Make sure you relate your posts to gold is some way, shape or form. You will know that a warning has been issued if your post[s] are removed.
MKGoldilox#1399891/2/06; 19:41:13

Essentially, we will be looking for patterns of abuse. I think most of us have been around long enough to know what's acceptable. Use your best judgement. We value you and everyone else here as posters. We just need to keep things under control. That's a personal commitment that all of us need to incorporate into our thinking as posters here. Look at it this way: It's in the best interest of the Table as a whole. We are asking for co-operation.
Flatliner@so it begins#1399901/2/06; 20:04:11

Smeagol, The link is very interesting. The listed date makes me question why it took so long to find it's way into this great forum. Did this happen recently or (years ago) back in 2001?

MK, Your discipline for this forum earns you and this site great respect. My hat is off to you and all who selflessly reach out to improve the financial lives of those who visit here. Thank you.

Liberty HeadCompetitive Money#1399911/2/06; 20:11:17

Despite the gold standard's success it's unlikely to be reintroduced by the U.S. government very soon. However, other monetary arrangements are still possible. As technology evolves, private forms of money may crowd out the importance of government money. Peter Thiel, co-founder of PayPal, said that in 2000 his company thought, "we're going to replace every government currency in the world." Although PayPal is an alternative payment system it's not an actual alternative money since it is denominated in national currencies. If other companies, which denominate accounts in commodities such as gold, like E-gold, increase to PayPal's size, technology may yet provide alternatives to government money.

Nobel Laureate F.A. Hayek argued in his 1976 monograph, The Denationalization of Money, that private firms should be allowed to compete with government money and that the competition would provide a more stable and sound currency. With globalization, technological change, and firms like PayPal and E-gold we may eventually get there. In the meantime, as the Fed changes personalities, it is important to keep in mind that our modern monetary system, based entirely on expectations, has existed for only a brief time and its stability should be monitored cautiously.

The REAL quesstion is - why are "THEY" (U.S.) doing THIS? ~>8-(

Liberty Head

Competition me thinkss is unwelcome.

Best Wishes

Mthirsty1USA GOLD#1399921/2/06; 20:18:46

I started watching this discussion about a year ago.What has kept me coming back is the things i learn when listening to you folks.I have made a couple of posts in the last few weeks and would like to continue to participate.I do not really know what set off this last round of debates,but i am not seeing what i have in the past.Even though i am the new guy,i,think that everyone in this forum needs to take 5 minutes and go back and read the rules to take place in these discussions,as i did just before making this post.I did not see one rule that has not been broken in the past few weeks.CPM has the right to negate this forum at any second with no warning.
GoldiloxEuropean moves to solve gas row#1399931/2/06; 20:31:15


International efforts are taking place to solve the dispute between Russia and Ukraine over gas prices, which has disrupted supplies across Europe. EU foreign policy chief Javier Solana said he was trying to persuade both sides to resume talks. Ukraine said it would call for arbitration.

Russia says it will pump more gas to countries that said supplies had fallen after Moscow cut Kiev's provision.

Gas firm Gazprom said full supply would be restored by Wednesday evening.

EU energy officials are set to discuss the crisis at a meeting on Wednesday.


Price jumps in NatGas might seem like Putin's political manipulation from one perspective, but during this bitter cold winter in Europe, no one wants to see interruption of NatGas deliveries, or any upset of energy/economic equilibria. Perhaps cooler heads will prevail.

Not directly gold related, but certainly well within our pre-open forum topical guidelines. I hope I'm not on thin ice with this one.

Mthirsty1"OOPS"#1399941/2/06; 20:39:49

Sorry folks,i left the discussion and went to the doctor and went directley to the rules.I had not seen MK'S POST.I appoligize.M.
MKNew rules#1399951/2/06; 20:44:06

We should be a bit more specific, as we really do not want to inhibit good and useful conversation. Let me put it in a simple framework:

Acceptable posts include discussion of economics, financial and monetary markets, and geopolitics -- that is, insofar as they each are made to demonstrate relevance to the topic of GOLD ownership.

We'll go with that and I will leave the rest to all of you in the spirit with which we created this forum and with which we would like to see it proceed in the future. Lets not forget that it wasn't too many years ago that discussions like this on gold as it relates to our political, financial and economic well-being did not even exist. The mainstream press controlled what was said about gold and each and every one of us was a quiet voice with a limited audience. We have had something special here over the past nearly eight years (Yes! approaching eight years now). Let us all appreciate and take personal responsibility for what we have here and make it better place for all visitors -- both new and old. By this we will nourish something special for ourselves.

Let the discussion continue. . .

My best to all of you with best wishes for a happy and successful 2006!

Federal_ReservesOnce Communist China realizes#1399961/2/06; 21:52:11

they are becoming a sub-state of the global corporations (US, Britan, European, Japan) who run the world, and who they have allowed to control their economy since 95, it's likely they will start to react in a negative fashion, particularly as they recognize they will not be allowed control of Taiwan. This will be the trigger for a negative world event.
Rookl/_#1399971/2/06; 22:11:45

I for one am grateful for less politics on the forum.

One guy asked me this year where to invest 50000 dollars. I told him (again) that my choice would be gold. I put usagold on his favorites list for him. I mentioned that gold had risen since 98, and thought it would reach 500 this year. Following MK's lead on that. Later I happened to talk to him and he said he had mentioned to some people that I had told him it would reach 500 and it did. I said there was no good reason why it will not continue to trend up. If he does follow the link I gave him, I know he would never settle into the forum with the blogger style politics we have fostered. I have another freind, well, I will call him freind, can you ever call the obscenely wealthy people freind? None the less, we have a happy record of encounters, and numerous at his house, and I wonder if there is another person who is in love with gold leaf as he is. His cielings, some doors, virtually all fixtures, including sink fixtures, gold plated or leafed. I mentioned to him, why dont you buy gold bars for door stops? He has statues and other works of art that are costly, I recommend that usagold offer solid gold statues and gold plated items. Send me a package you want me to give him. No big explanations. Do you have a way to get some Napolean gold coins? Were some ever made? He has a new Napolean bust with spotlight. I bet he would spring for some Napolean gold coins.
He just bought a home on the beach, Palm Beach. Right after the big hurricane season. Why? because it is opulent.
Dont send me a package to give him that is all logical. Promote the beauty of your coins and whatever.

Rookl/_#1399981/2/06; 22:21:19

Oh, and I think you could clinch a sale if you include some small amount of creatively made chocolate. I'm serious! He would react positively. If you had pieces made in a fancy -- H -- shape, you would have him calling.
I kid you not.

TownCrierRook,#1399991/2/06; 22:36:13

Not quite the Napeoleons you're looking for, but have the advantage of being both reasonably priced and available.


Bound Spiritback on topic#1400001/2/06; 22:39:07

Ok, wow!! First post after years of lurking and I become part of the straw that breaks the camels back. My sincere apologies for any offenses my argumentative and philosophical proclivities caused. I do however believe that these off topic topics are critically important and need to be discussed - especially in light of the dark places I believe we are heading. I also believe that this forum is frequented by a caliber of people where these broader discussions will be productive. Few things generate self reflection more than the alienation felt by true gold (i.e real money) advocates. But that said, I promise to stick closer to the home topic.

In the short time I have left before the responsibilities of previous commitments take hold again in 06, I will summarize my latest thinking about the concept "gold" lest other forum participants get the idea that I'm a true interloper. Unfortunately for those here, my contributions are almost wholly philosophical – it's just my nature and can't be helped.

I'm an Gold investor, not for its investment qualities, but because I believe in Gold as a devinely derived "concept" which aids living an intended and purposeful life. To that end, I couldn't be more indifferent as to its fiat measured value. For me, gold is literally one of those - put your money where your mouth is – things. There's nothing apart from "gold as a concept" that is attractive to me. So, to briefly elaborate, what is my long held "concept" of gold as I see it?

I believe our founding fathers felt that people should be free to pursue their interests and accumulate wealth through hard work and the successful implementation of their ideas. There's a lot to focus on in life: the pursuit of happiness, the security of family, the education and civic participation responsibilities of the self governed, and the time to reflect upon the larger questions of life. Today, thanks to the use of fiat currency, we have unnecessarily added to those responsibilities to the diminishment of others. Now we must kept a constant vigil that our accumulated wealth is safe from theft and/or erosion. With gold, if you had a good hiding place, it was an easy thing to do. Today? – take your eyes off the screen at your own risk!

I personally resent being compelled to know so much about, and stay abreast of; global macro economics, trade issues, bond markets, currency markets, derivatives, real estate, etc. And especially the transitory monetary and fiscal policy's that fiat money management demands. Inflation doesn't just steal money while its still in our wallets, it steals precious time away from,IMO, vastly more important concerns. Concerns that is fundamental to preserving our eroding way of life. Fiat money is a destabilizing force used in the name of funding things without tacit authorization of those living and not yet born. Gold as a concept, properly understood and implemented, avoids all this. That is its power, and that's mostly why our founding fathers believed in it and that's why its worth owning, period.

Maga Circe@ Smeagol 139981 & Liberty Head 139991#1400011/2/06; 22:42:21

Great posts! I reminded me of what I read in the Sovereign Individual, by Davidson and Rees-Mogg, Ch. 7. The reference to the von Hayek paper is there together with an explanation of why cybercurrency (backed by gold) as a competitive currency would threaten the government's monopoly on legal tender. When that happens, governments lose the abitlity to expropriate whealth via inflation. Even the transaction fee required by firms who make e-gold available is lower than inflation. No wonder If I understand it correctly, this is all very exciting.
I am very thankful to all the poster in this great forum where so much good education and useful knowledge is discussed.

RookN3#1400021/2/06; 22:49:21

This is a guy who will value it more if it is high priced.
He wont go competitive shopping. Pitch it as valuable, a work of art, and he will become a guy with gold coins lying around. With one to flip as he walks around. I will email my address. He will be back in late february. I know I just meandered into this sale idea, but I know the guy, he will go for it.

TownCrierRook, your friend is an 'interesting' situation#1400031/2/06; 23:22:40

Given that USAGOLD-Centennial's prices are so very low, may I suggest the happier solution that your friend be informed of the benefits of accepting a greater quantity rather than taking the trouble to find another gold dealer/broker who'd be both eager and willing to give him less for the same money.


YGMSign of Times?#1400041/2/06; 23:38:19

Indian banks are cutting interest rates on personal loans to buy Gold (only Gold)
Rook.,.#1400051/3/06; 00:00:28

Randy, your right, I will pitch him on a chest of gold coins for the living room.
BeamerGold Price 2006#1400061/3/06; 00:03:31

The gold price should rise all year long. I expect to see it hit $900 by the end of January 2006. The high for the year and the year end price will both be the same. Namely, $1900. Why? Look to China accumulating some 2,500 tons of gold in the short term. Their implementation of the new paper gold strategy on January 5 will effectively offset the rising costs in the spot market.
skiLooking backward and forward.....2005-2006#1400071/3/06; 00:11:43

Year-to-date change in PM prices as of 12-29-05 as posted at Rude-Awakening.

Silver $8.85 YTD +29.9%
Gold $516.70 YTD +18.1%
Thus silver advanced 11.8% more than gold in 2005.

I have been here at the forum for several years and my tune has never changed. I have simply stated, that on a percentage basis, silver will outperform gold. But as we all know, we cannot profit from the past.... the record books for 2005 have been closed. Therefore the important question of the day is, "What will happen in 2006?" I'll make three observations.

1. Silver will outperform gold on a percentage basis.

2. The difference between gold and silver will be even GREATER than the 11.8% difference in 2005.

3. The fact that there is less above-ground silver than gold will finally be recognized. (No one can know exactly how much of each commodity there is. I work with these figures: Gold, 5 Billion ounces and growing by the day. Silver, 1 Billion ounces and GETTING SMALLER by the day.)

Either way, both precious metals seem to have a very bright future.

TownCrierBeware being caught up or tainted among the abuses of 'e-gold'; instead choose forthright personal ownership of gold as savings#1400081/3/06; 00:54:43

JANUARY 9, 2006

INVESTIGATIVE REPORT: Online payment systems like e-gold Ltd. are becoming the currency of choice for cybercrooks.

Diverse as they are, many cybercriminals have something important in common: e-gold Ltd.

Customers can use a false name if they like because no one checks. With a credit card or wire transfer, a user buys units of e-gold. Those units can then be transferred with a few more clicks to anyone else with an e-gold account. For the recipient, cashing out -- changing e-gold back to regular money -- is just as convenient and often just as anonymous.

Law enforcement officials worry that the little-known digital currency industry is becoming the money laundering machine of choice for cybercriminals. On the evening of Dec. 19, agents with the Federal Bureau of Investigation and Secret Service raided the Melbourne (Fla.) office of e-gold's parent company, Gold & Silver Reserve Inc., and the nearby home of its founder, Douglas L. Jackson.

The FBI separately is pursuing about a dozen probes in which e-gold appears as a "common denominator," a senior agent says.

...e-gold appeals to savvy online crooks who want to move money quickly and without detection. American banks and conventional cash transmitters like Western Union are legally required to monitor customers and report suspicious transactions to the government. E-gold seems to go out of its way to avoid such obligations. Its operations are in Florida, but in 2000, its principals registered the company in the lightly regulated Caribbean haven of Nevis.

The man behind e-gold, Doug Jackson, is a tall, powerfully built former oncologist. A fan of the gold standard, Jackson, 49, became a pioneer in digital currency when he set out a decade ago to create what he describes as a private gold-based monetary system. He envisioned e-gold as a currency that would be accepted at Wal-Mart while also permitting peasants from China to Peru to offer products at stable prices. "I thought there would be this flock of e-gold users, and I would be their messiah," he says. "It just didn't happen."

What did happen, according to law enforcement officials, was that a pack of felons flocked to Jackson's brainchild.

...Started in 1996, e-gold was part of an early wave of Internet payment systems that converted conventional money into a Web currency. Most of those pioneers soon flopped, because consumers resisted paying fees to get Web cash. Others, such as PayPal, now a unit of online auction giant eBay Inc, evolved into credit-card processing services.

...Investigators say Jackson may have begun his quirky business with innocent intentions. But in recent years he has turned a blind eye, the officials say, to mounting evidence that e-gold has attracted a seamy clientele.

The federal raid suggests that agents are intensifying their focus on e-gold and its potential criminal liability.

...Whatever its legal status, e-gold's usefulness to scam artists was colorfully illustrated by E-Biz Ventures, which allegedly portrayed itself as a Christian-influenced organization that offered investors returns as high as 100%. E-Biz' proprietor, Donald A. English of Midwest City, Okla., allegedly highlighted his reliance on e-gold to appeal to victims' fear of the federal government and their desire for anonymity. E-Biz investors opened e-gold accounts and transferred funds to accounts controlled by English. He shifted e-gold among more than 25,000 accounts, using new investors' money to pay off some older ones. The scam took in $50 million before the SEC shut it down in 2001. Investors lost $8.8 million. Later prosecuted in federal court in Oklahoma City, English pled guilty to wire fraud and last May was sentenced to five years in prison.


^---(see url for full article)---^

To be sure, the nature of the problem -- the exploitation an the resulting suspicion and scrutiny -- has NOTHING to do with gold, but has EVERYTHING to do with the platform of exchange.

In a manner of interpretation, the French assignats of the late 18th Century were an early expression of this as a sort of e-land (or rather "p-land", paper land), with the representative currency unit conveniently circulating in place of the confiscated lands that were supposed to backed them.

Note, however, that the various abuses which were facilitated by assignats as an platform of exchange were in NO WAY WHATSOEVER an idictment or taint upon the wholesome principles of land ownership and the use/husbandry thereof.

Similarly, there is no reason any gold owner need feel tainted by the stain of others illicit activities, nor incur the scrutiny that follows close by. Simple, direct ownership of gold coins and bullion has served honest hardworking people very well -- as an honorable avenue of reliable savings by accumulating gold as a significant fraction of their personal property.

Start the new year off right with a resolution to own gold.

Call USAGOLD-Centennial Precious Metals as your gateway to the sound principle and practice of actual gold ownership as a means of savings -- consolidating your wealth in an indestructible form that is above reproach. The firm has been in business, in Denver Colorado, since 1973, helping diversify the portfolios of honest and reputable investors and savers just like yourself.

TOLL FREE 1-800-869-5115


BelgianGOLD dog figures become hit in market !#1400091/3/06; 01:24:55

Pure Gold !
GoldiloxChocolate gold?#1400101/3/06; 02:50:13

@ Rook.

How about some "Hanukkah Gelt" chocolate coins wrapped in pure gold foil? Now that would be pure opulence for your illogical friend. He could battle the urge to ruin the gold foil to get at the tasty chocolate.

Sounds more like Hammaker-Schlemmer than CPM, though.

TownCrierGoldilox, the problem with skimming...#1400121/3/06; 03:27:45

I suggest you re-read the post precisely as written, and then evaluate it with your head, not your gut.


White RoseUnofficial New Year's contest -- gold high for 2006 and 2006 closing #1400131/3/06; 03:48:12

I propose an unofficial contest to guess the high price for gold in 2006 as measured in US "dollars", as well as the closing price for the year. Here are the entries so far:

24karat: $672 for 2006 high, $660 for EOY 2006
Balzac: $672 for June 1, 2006
Beamer: $1900 for both 2006 high and EOY
el dorado: $745 for EOY 2006, $677 for April 2006
MK: $760 or 2006 high
Slowman: $752 for 2006 high, $726.40 for EOY 2006
Smeagol: $670 for 2006 high, $632 for EOY 2006
Specie-Man: $785 for 2006 high, $760 for EOY 2006
Thoreauly: $750 for 2006 high, $725 for EOY 2006
waverider: $850 for 2006 high, $775 for EOY 2006
White Rose: $900 for 2006 high, $830 for EOY 2006
YGM: $999.99 for 2006 high, $999.95 for EOY 2006

I invite everyone to try their hand at predicting the gold price high and ending price for 2006.

Gold StandardGold Price - High and EOY#1400141/3/06; 05:08:55

My belief is that gold's 2006 high will stun us all, at $860.80

End of Year price will be a slightly conservative $790.30.

KnallgoldRepo overboost#1400151/3/06; 06:51:32

Quite a revealing chart picked up on the other castle!
Cavan ManMK's Event/Man for 2005#1400161/3/06; 07:23:30

Completely agree; however, I think the discontinuation of the release of M3 has had much more of an impact on the smart money crowd--significant.
GoldiloxHUI Watch#1400181/3/06; 08:57:18

Up 14, or 5%, at 290, as investors replace their window dressing sales from 2005.
Knallgoldinofficial POG forecast contest#1400191/3/06; 09:17:56

I'm having some troubles with those #'s from 600-800,they might be possible but I'm still in the school of a "gap-up".Technically,theres much air between these 600-900.For me,therefore,the only question is,will it be this year,the gap,the long awaited revaluation?Many stars are aligning to this,but then,I thought this before.In fact,I truly expected a false start into 2006 with a fall back to the 450 level,and somehow still do-well,I still have a buy on hold,now look at Spot the Bulldogg :-( . Might be more prove to the "air theory" from above.If the market is really cooking it will be impossible to control,and I assume the Gold reallocations are mostly done and Gold has gotten the okay by the masters.

Is it too cheeky to have some powder dry for an eventual paperGoldcrash to get a few REALLY obscene cheap fruits?

So my forecasts for the contest would be: high: 2500$/oz.,close 1000$/oz.

Gandalf the WhiteGOLDEN 2006 !! <;-)#1400211/3/06; 10:04:19

WAY to start the NEW YEAR, SPIKE and SPOT !!!
Look at the BEAUTIFUL Waterfall US$ today also -- LINK
YES, this will be a GOLDEN year !

CoBra(too)mk#1400221/3/06; 11:23:15

It had to happen.

Either you steer a close ship - and have a closed society of your own crew - or you allow some kind of renegade free thinkers.

In both ways you will eventually win! - Or will you?

If you allow gold spin only, totally and top it with "free gold" advocates it is your priviledge... and you may even be right.

Still, I'm a bit of the renegade and have my qualms with the TC's, Belgians et al true and blue "free gold" advocates.

For the last several years they've been totally correct in their assesement ... only the outcome was more than than cumbersome. In part the paper players, including shareholders of deep storage did a lot better than the purists.

Though, that's not my point - My point is pure and simple - don't ever sever politics from gold and silver ...

PS: And if you have to - too bad ... for you!

Belgian@cobra II#1400231/3/06; 12:40:24

Free Gold advocacy : Today, I've been observing the markets' behavior with a lot more of intense attention than usual. Especially, because of the developping fundamental background events, against which this behavior was unfolding (Russia).
Free gold is on its way, dearest cobra...and at a faster pace ! Forgive me for not repeating the same list of arguments that got some more evidence added, today.

The paper mutants of gold (and silver-metal) will gradually lose their affinity (old links) with the growing free gold. The prices are distributed at the END of the race, Sir !!! And it is free gold that is going to win the race and collect the BIG price.

It is indeed very difficult to select those specific political facts that do relate directly + indirectly to the gold matters. Because politics do have a strong polarizing effect and make observers much too subjective (one sighted).

Let's keep racing and that the best may win...-:)(:-

Kiwi chickGold - Physical and Paper#1400241/3/06; 13:14:11

A question for the experts on this forum. At what POG level will the physical and paper markets go their separate ways?
USAGOLD / Centennial Precious Metals, Inc.Longevity and Reliability: Good savings will have value when you need it, and beyond!#1400251/3/06; 13:31:43

Golden Goal

"Treasure chests throughout history
have been filled with gold, and not by idle choice."

-- R. Strauss

Clink!Remember the good old days ?#1400261/3/06; 13:41:00

Yes, those long-ago times, when we were limited to only $6 up days ? I must be getting old, it seems so far away - was it.... November ?!

Hmm. There doesn't appear to have been much of a pause in the upwards trajectory moving into the Access hours. We're about $16 up on the day as I type. A trivia question - when was the last time this happened ? The first WAG announcement ?


Clink!@ Kiwi chick#1400271/3/06; 13:48:46

That is the proverbial $64,000 question. Which might also turn out to be the answer too !


Belgian@kiwi chick#1400281/3/06; 14:02:22

This is not a matter of goldprice but "gold-market" !
But be careful...and don't hope for being able to switch racing-car (paper gold to goldmetal) during the ongoing race (gold-market evolution) as to catch the big price at the finale.
Many (an increasing number) of paper goldbugs are thinking about this smart (?) strategy. Taking profits on paper gold instruments...gradually losing their leverage...and switch to physical gold...just in time for the spurt. Good luck !

Rimhre: Clink!#1400291/3/06; 15:22:38

I believe it was Feb 4, 2000 when Placer announced they were going to reduce their hedges (I think I recall that as the news that day, but I could be wrong) - not that they made much effort to follow through on that announcement, but that's a mute point now......
Rimhsorry, it's a moot point.....#1400301/3/06; 15:24:05

Galearis@ gold AND silverbugs#1400311/3/06; 15:58:46

I have some very interesting news about the gold and silver markets (to do with the supply/government sales side) from a well informed citizen of India. His was the letter posted on Midas from last night about Indian PM markets, but I find myself leaning toward reticence with the new posting policy of accepting gold discussions only. I regret this shift because the news would be quite gold positive too. But as the forum wishes to return to the narrower focus, I feel I should not go against the desires of our hosts,,,who I feel now have only been (just) tolerating our discussions. I do not feel comfortable about posting information that may or may not be appreciated so,...

It is time to move on.

Best regards, and good luck in the years ahead.


spotlightGold vs. gold stocks#1400321/3/06; 16:28:41

Your statement:
"The paper mutants of gold (and silver-metal) will gradually lose their affinity (old links) with the growing free gold. The prices are distributed at the END of the race, Sir !!! And it is free gold that is going to win the race and collect the BIG price."

I believe most of us here are fundamentalists at heart'so would be interested in your reasons why Physical gold will leave gold stocks (paper gold) behind.

I have my own reasons to be wary, but would like to hear yours.

LimitUpGalearis#1400331/3/06; 16:44:03

May you have a wonderful journey.
YGMGalearis#1400341/3/06; 16:58:59

I don't think Mr Koasares is condeming Ag discussions to the trash heap at all. Silver has always been contentious here by some, but I (correct me if wrong) think Michael is urging "moderation" (not aguementative repitition) and respectful discussions. Not the my way or the highway mentality. Silver is also purveyed by CPM don't forget. I cannot think in terms of one without the other myself and many others who have posted here for years are of similar mindset. I favour owning alot more of the Yellow than the White on a personal level, but I still want to hear and read about both, and would miss your input. If all the posters leave who have some interest or holdings in Silver (alongside their Gold) or even paper traders left the hall who would be here to grace these pages with thought? Not very many!
CoBra(too)@ Galearis and all#1400351/3/06; 17:03:07

I'm sure it's not as strict as you (or I) have put it.

Your info was and will be most appreciated - IMHO - everything else will be our loss.

... and if I'm wrong - so be it! ... But then it's probably time to wander off any way and not just wonder!

Thank you - USAGOLD (for 7 years, I guess also true as a poster) - of a great learning experience ... the last thing I want to see spoiled by purists only is this great website!

It may be time to listen to a free market news interview by Edward G. Griffin - author of the Creature of Jekyll Island:

Meanwhile Gold and Silver is showing stealth in view of the marketeers calling for a big reaction. Free gold marketeers will have their day anyway - give us other guys, having put in their stash before playing paper and other games some credit and please don't disservice your own agenda, by paraphrasing every and any suspected "dissenter" as a renegade.

I guess, most of us have loaded up on physical before the purists have even arrived.

... and in the end I'm not really challenged by people calling me "my dear cb2 or whatever else"; Since I really hate any kind of governess, however well-meaning it may be!

Thank you all and have a great year!


Clink!I guess this answers my question#1400361/3/06; 17:32:00

A snip from tonight's Midas :-

And Adrian:

In case you haven't had time to look back through the database, gold today made its BIGGEST one day gain in this bull market to date closing up a whopping $13.30. The closest big move to this was on May 18, 2001 when gold rocketed up +$12.65 in a single day.

There has only been one day that has beaten this move in the last 21 years which was +$14.20 on September 27, 1999 due to the announcement of the Washington Agreement.

End snip.

I don't know if the 2001 date is yours, Rimh (you seemed to specific for that to be the case), but as the POG is currently at $534.80 (up $17.80), this largely eclipses the WAG spike. Mind you, I suppose he is probably quoting closing numbers, so we will have to wait till tomorrow to see if it can be bettered !

More roo ! More roo !


HenriKiwi #1400371/3/06; 17:42:22

For the moment separating gold/silver stocks from the malevalent paper gold players meaning futures and options...the price will of course break free when there is no more gold coming onto the market to be sold in the future. Then all existing contracts will be settled for cash and not much since there will be no real gold backing the action. Naked shorts will be saved by regulators settling contracts at a price far below the free market gold price...just an opinion...
TownCrierCoBra(too), purists#1400381/3/06; 17:47:47

Maybe this wasn't at all your point, but given comments that I've read in the past, I'm under the impression that persons such as Belgian and myself are part of this unsavory lot which you call 'purists'.

But that begs the question: What's the opposite of a purist? A 'spoilist'???

I certainly wouldn't count myself among any group of 'spoilists'.

Closer to the mark, however, I would call myself a 'realist'.

I have assessed to the best of my ability (and to the extent that it matters) the lay of the political and economic landscape. There are certain driving forces akin to gravity, and there are certain constraints akin to 'immoveable' mountains. In the same way that one can assess the trend of future erosion or even public works that affect the actual landscape, one can also reasonably assess a realistic pattern of development upon the monetary landscape.

In making the most useful assessment possible, there is no room for me to cling to any sort of 'purist' mindset that sees only gravity-like drivers while ignoring the various (usually social) constraints. But with that said, in the end, even the highest immoveable mountain is inevitably worn down to the golden shores of the sea.

Is it possible that the difference in interpreting whether a person is a 'realist' or a 'purist' is in their available time and energy to describe the intervening erosion in mind-numbing detail?

Respectfully, no thanks!!

So speaking for myself, I'll continue to make assessments as a 'realist', even though my necessarily brief commentary in this format may risk giving me the outward appearance of a 'purist'.


Mthirsty1contest#1400391/3/06; 17:58:50

Whiterose,would you please put me down for $640 high and $640 EOY.Thank you.M.
CoBra(too)Purists vs Realists a/o spoilists#1400401/3/06; 18:30:34

No Thanks - says (un-)graciously TC.

Well, we'll forgive the young ones - They may have a lot to learn - still - even if they feel it's their order to feed us with their own un-distilled magnitude of pro gold fodder.

Even that may become its own main stream (street) nonsense. Knowing what your aiming at it's like an arrow missing the apple of old - your repetitive pro-active gold advocacy is missing the crucial point - as you've never experienced it in reality!

I'm as aware as yopu and other spoilists are, that the ever growing debt situation in the West has to be redeemed. Redemption is pro'lly beyond reality and so ... what?!

Let's blow up the world as we've known it - as we might be slowly adapting to the old Club of Rome asessement of Limits to Growth! Only 35 years later the (then seemingly)idiotic logic was deemed to be correct - only having lost 35 plus years of preparation.

The same logic is bound to specify purists, realists and potentially spoilists. And before you want to really engage me - please grow up and try to learn your own lessons.

So, my friend don't ever try to teach me the lesson I've personally learned and don't ever try to convert to me to to your "purist" ideas - been there and have gone through all phases you try to re-convert me to.

Anyway - Thanks for your consideration - but as you've hinted - NO Thanks!
Good Bye - cb2

CoBra(too)Re my latest#1400411/3/06; 18:47:30

Lacking some real depth! As I figure - still fair enough to say fare well ... cb2
GoldiloxPosting rules #139995#1400421/3/06; 18:50:32

The last clarification from MK suggested a return to pre-open-forum topics. Silver, energies, and currencies are NOT out-of-bounds in the flavor of the forum, especially as they relate to POG and/or gold markets.

"Acceptable posts include discussion of economics, financial and monetary markets, and geopolitics -- that is, insofar as they each are made to demonstrate relevance to the topic of GOLD ownership. "

David LinkleyTick tock tick tock#1400431/3/06; 18:50:41

The gold fuse is now lit in light of the recent strength above $500 and there are those lurking who feel the end of the US - IMF system is ney. Not so as nature abhors a vacuum and no country or entity is ready to replace the US or the dollar. If fact the US is racing the printing presses as fast as possible and are still having difficulty bringing the dollar to a lower level. No military, technology base, or free market orientation can currently match the good old USA. MTM all you want but all players will be forced into a "Bretten Woods II" agreement because right now all other options lead to a responsible system which the insiders of course cannot tolerate. Keep up the the good work gang and watch the ECU dishoard the only real wealth they have while falling futher behind the rest of the world with there socialist ways.
GoldiloxGriffin interview#1400441/3/06; 18:58:01

@ Cobra (too),

The Griffin link didn't work, but it gets us to the home page, where we can search on Griffin as a guest to get to the interview.

Muchas Gracias for the reference.

TownCrierCoBra(too), you're either missing the gist of it or else enjoying your own sense of drama#1400451/3/06; 19:00:18

As I refer again metaphorically to the process by which a mountain range is picked apart grain by grain and atom by atom and delivered to the seashore, what part of the the erosional process in "mind-numbing" detail are you eager to have described?

When I said, "Respectfully, no thanks", I am fairly sure that that sentiment applied EQUALLY both to the weary audience of such a mind-numbing geologic dissertation as well as to the prospective writer who, I'm sure, has more interesting ore to mine in the use of his fingers' remaining energy.


USAGOLD Daily Market ReportPage Update!#1400461/3/06; 19:22:15">
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TUESDAY Market Excerpts

Gold begins New Year with a Bang

January 3 (from MarketWatch) -- Gold futures stretched their winning streak to seven sessions Tuesday.

COMEX February contract climbed to a session high of $533.20 and finished the session up $13.60 at $532.50 an ounce, the highest futures closing level since April 1981.

"There's a lot of upside left in the entire metals complex," said Dale Doelling, chief market technician at Trends In Commodities. And "as some of the financial uncertainties become more clear as we head into 2006, gold is going to take the lead and achieve exceptional returns for traders who continue to focus on the long-term trends in these markets," he said.

Echoing this theme, the factors that drove gold up by more than $80 an ounce over 2005 remain intact, said Peter Grandich, editor of The Grandich Letter.

The foremost of these -- physical and investment demand -- shows no sign of cooling down.

"The rapidly growing economies in China and India have been key and while soft patches are likely going forward, the enormous wealth creation ongoing there appears to assure strong demand for gold for the foreseeable future," Grandich said.

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

CoBra(too)Gist & Drama#1400471/3/06; 19:36:36

I can't care less, if I miss the the gist of it! (What gist of what), nor am I enjoying my own sense of drama.

I personally think young man, you're way ahead of yourself. That's fine with me and you're probably doing a great service to the rest of the world.

TC, Randy or whoever - think again - there may be some not appreciating your recurring lectures - as they may have arrived at your goals long before you've ever thought about it .

Dramatize your own future and please never mention cb2 again - he's gone . from here forever ...

YGMCb2#1400481/3/06; 19:57:02

You got to know you'll be missed. Alot of water passed under the bridge over the years. Maybe we can still swap some stories one day. Just ask B Murphy or C Powell (GATA) to put you in touch w/ the Yukon Gold Miner and you can find me. Adios` and stay well. Vancouver Gold Show Jan 22 & 23. I'll be there for a week....Ken
TownCrier"Holey underware, Batman!"#1400491/3/06; 20:01:39

I tend to think that's a lot of drama for a 'young man' like me to cope with, cb2!



Caradocemail to friends, relatives#1400501/3/06; 21:52:39

I thought I'd given up on my brother-in-law (as others at this Table may have given up on some friend or relative?), but I went ahead and included him in an email I sent earlier today. Nothing new for anyone here, but I tried to make it so clear that maybe even my brother-in-law (or yours?) could read the handwriting on the wall.

To enhance the odds that some addressees would actually read it rather than just say "It's him again ranting about gold" and delete it unread, I titled the email "Implications of Fed ceasing to report M3 and what to do about it."

Text follows and any of you can feel free to relay some or all of it to any friends, inlaws, or outlaws who are likely to hit you up for help when TSHIF.


***text follows***


Check out the recent surge in how much the feds are pumping into the economy as overnight (so-called "repo") money to the banks. Since this overnight money is one of the differences between M2 and M3, it might well explain why the feds are going to cease reporting M3 in March.

M3 is in red charted against S&P 500 in blue:

Throw in the fact that March is when Iran begins selling its oil for Euros rather than dollars...
* less international demand for the dollar since countries like France, Germany and Japan will no longer have to buy dollars first in order to pay for oil
* greater stateside supply of dollars since existing Petrodollars/Eurodollars will gradually leave Swiss bank accounts and shift back to the US every time a Middle Easterner buys a Cadillac or some other US product and redeposits Euros rather than dollars into his Swiss account.
* Between greater supply of dollars competing with the ones in your pocket and less demand for dollars, the old "supply and demand" thing kicks in and the dollar is due to head south. More specifically, it's due to have already headed south by March. And since markets generally anticipate when there's clear handwriting on the wall, we've already got the dollar down sharply today (the first trading day of the year):

[Paste in graphic from link above by doing a right-click on chart and selecting "copy" or "copy image" before doing "edit, paste" into the message.]

and gold up by more than $13 per ounce to over $530.

Last thing to consider: some 43% of US debt is owed to China and Japan. They've been real obliging about propping up the dollar by buying our debt so that US consumers can afford to buy their products, but as the dollar tanks they're likely to buy less of our new debt (less demand for debt denominated in dollars) while cashing in the dollar instruments they hold for things like Chevy Suburbans and Boeing jets (more dollars headed back to stateside).

Bottom line is twofold:
(1) Over the next few weeks, we should begin to head into a deflationary depression.
(2) High likelihood that feds will respond by cranking up the printing presses and creating enough dollars to stave off any deflation. Instead, we'll have inflation like nothing any of us have ever experienced.

So, if you have a foreign car you plan to keep, I'd suggest buying all the parts needed for a couple of brake jobs. Other than that, every financial asset you own has a lot in common with Cinderella's carriage because sometime between now and March it's going to turn into something the color of pumpkin. To avoid that outcome, switch to some mix of (1) physical gold held in your possession and (2) stock in gold mining companies that have NOT sold their future product into the futures market; i.e., won't benefit from gold going up and which are not involved in so-called "non-recourse" loans for their operations since such loans invariably include a derivitive short-sell put against gold (sometimes labeled as "variable cost of financing") placed by the original lender at the time the loan was made for protection against the chance that gold would go down. Using those two criteria, I've focused in on producer Goldcorp (GG), royalty collector Royal Gold (RLGD) and explorer/ would-be royalty collector Tan Range (TRE). As a matter of disclosure, I'm in both GG and RLGD and am kicking myself for having sold TRE.

Just my opinion, but I'll bet you a nickel I'm right.

***end of text***

Those here might consider buying a few extra ounces to be able to help those you fail to convince.

Regards to all,


GoldiloxTHE GOLD TREATMENT by Richard Karn#1400511/3/06; 23:31:51


If the American central bank's goals are to provide monetary stability and to control inflation, gold standard advocates submit they are not doing a very good job. According to this chart, the US dollar has lost about 93% of its purchasing power since going off the gold standard in 1933. To put that in perspective, when the US was on the gold standard, a $100 basket of goods purchased in 1800 could be purchased in 1900 for $102, amounting to a 2% inflation rate over the course of a century; today that same basket of goods would cost more than $4,000. On the gold standard, they claim inflation is next to impossible simply because without increasing the gold in its vaults, a government cannot create more money.

Supporters of the gold standard suggest that the inflation created by a government operating a fiat currency amounts to a secret, or hidden, tax its citizens neither recognize nor understand. By unilaterally printing money whenever it wants to, without either explanation or public debate, the government is in fact defrauding its constituents by diluting the purchasing power of their money. And this ability to increase the amount of monetary instruments in circulation is the fatal flaw of all fiat currencies, for there has never been a successful fiat currency.

Not one.

The failure of every fiat currency in history has been due to miscreant politicians, aided and abetted by clever bankers, creating so much money and credit to finance their various agendas, including enriching themselves and their cronies, that the money in circulation eventually becomes worthless and collapses under its own weight. This idea is best summed up by the phrase "confiscation by inflation"[6]: the deft transference of naive citizens’ savings to slick operators who understand how to manipulate the financial system.

Whereas in more than 800 years of fiat currency use there has never once been a successful fiat currency, during that same time there has never been a currency based on the gold standard that failed—until it was either corrupted or taken off the gold standard. In fact, fiat currency crises resulting in either outright collapse of severe devaluation are so common the public hardly notices anymore. In the last generation, Mexico, Thailand, South Korea, Indonesia, and Russia, to name but a few, have experienced currency crises that adversely effected the economic well being of their citizens. And do not be lulled into dismissing such events as phenomena that only occur in third world countries: the British pound's most recent crisis was in 1967; the US dollar-gold convertibility crisis of 1971 resulted in the dollar devaluation of 1973, which led to the inflation prevalent for the rest of the 1970's and was followed by the dollar exchange crisis in the mid-1980's[7]. Fiat currencies over time simply do not work.

- Goldilox

Nothing new here, but a solid restatement.

Liberty HeadOn Fiat Currencies#1400521/4/06; 00:13:45

I suggest we stop declaring that fiat currencies always fail. It sends the wrong message. It makes the gov't seem stupid rather than fraudulent.
Fiat currencies have always been successful for their respective gov't. The fiat schemes just don't last forever.
Fiat currencies are like syringes for drawing blood. Sooner or later the syringe gets thrown out, but only after the blood has been extracted.

To paraphrase an old saying; You can't bleed a bar of gold.
Get you some!

Best Wishes

HenriCB2#1400531/4/06; 00:29:35

This is a sad day indeed witnessing the departure of a friend. I will miss your witty rhymes. You were a welcome messenger from afar. For my own part, I believe the forum benefits enormously from your input. I sense that for you the discussions have grown stale and the table round has become suddenly less noble. Farewell Sir, and I hope that we shall meet someday at a gold conference.
Belgian@spotlight#1400541/4/06; 00:57:49

One does not need to be a fundamentalist/purist to realise that the financial industry succeeded in having misformed "the markets" into a mutant where paper instruments (positions) enjoy the unprecedented privilege of "HUGE" leverage on top of the (minimalized) underlyings. >>> DERIVATIZATION ! And this did not happen exclusively to goldmine or any other gold paper. It was organized (!!!) for all papers (stocks-bonds-currencies).

Yes, the motivations behind this organized phenomenon (not a conondrum) are "political". This is exactly what divides us here into the 2 camps (purists-non purists).

Let us watch the race without argumenting about the betting on the horses, anymore. Because the very fundamentals are of a pure political nature.

GoldiloxFIAT Failure#1400551/4/06; 02:30:58

@ Liberty Head,

No complaints with your analogy from me, but you'll probably hear it from the "never attribute to malice that which can be explained by stupidity" apologists. Of course, the problem here is that the perpetrators aren't the ones apologizing. They're enjoying a free pass from the blind suckers.

The reason I agree with you, is that there has never been a recorded case of reparations for FIAT destruction once the "stupidity" has run its course.

No remorse = No repentance

The banksters and their government lackies are ALWAYS ready to "give it another go", and the first thing they institute is their own "golden parachutes".

GoldiloxGold and Dollar Market Summary#1400561/4/06; 02:36:05


What an interesting difference a day can make. One CIGA asked me today: "Now that the $530 mark has been hit, what will gold do?"

The answer is "just what it did today."

Forget for a moment the truths you already know about the gold price. Gold, as I see it, is headed to $682 and then through $750. All the rest is drama.

It doesn't matter if it happens now or later this year. No one can be absolutely sure of the timing because there is a hidden hand in the market equation called over-the-counter derivatives which supersedes the US Dollar/Gold relationship, the price of oil, the Fed minutes or any other potential motivator.

What is most critical today is what the media refuses to discuss in print or on business television. The code of silence being applied to OTC derivatives is not happening without a good reason.


Speaking of DRAMA, JS just hates to be right, doesn't he!

contrarianHumpty Dumpty#1400571/4/06; 04:18:16

When it falls, I'll bet it'll all fall together...stocks, bonds, dollars, paper, etc. It's an interconnected chain teetering on the brink of collapse. Stock market alone is a rotting, mad cow-infected carcass tottering on one leg. And who knows, per Sinclair, gold may even be the trigger to unleash the derivatives monster and every foul paper creation along with it, upon the world.
TownCrierGold May Extend Gains for Sixth Year as Hedge Funds Diversify#1400581/4/06; 04:30:03

Jan. 4 (Bloomberg) -- Gold prices may extend gains for a sixth year in 2006 as hedge funds buy the precious metal to diversify from stocks, bonds and currencies.

``It's all about fund diversification. That's the bottom- line,'' said Peter Hillyard, head of commodities sales in London at ANZ Banking Group.

Investors have been ``heavily dependent on equities, bonds and currencies.''


Investors are buying gold because it's outperforming stocks and bonds. Gold rose 90 percent in the five years to the end of 2005, while the Standard & Poor's 500 Index returned 2.7 percent with dividends reinvested.

An index of Treasuries maturing in two years or more returned about 30 percent including interest reinvested, Merrill Lynch & Co. indexes show.


A sixth year of gains would be the longest winning streak since central banks allowed the price of gold to find its own level in the free market in 1968.

Bullion is a ``top trading pick'' for 2006, Goldman Sachs Group Inc., the third-biggest securities company, said in a Dec. 19 report, citing concern over inflation, currency values and the U.S. trade deficit.


Prices of the precious metal may climb to $600 this year, Marty McNeill, a trader at R.F. Lafferty & Co. in New York, said.

``It's a long-term thing,'' said McNeill, 63, who witnessed gold's last bull market as a trader, when the metal peaked at $873 in 1980.

Gold may rise as high as $850 an ounce within 18 months as a weakening dollar boosts the metal's appeal as an alternative investment to U.S. assets, Paul Walker, chief executive of London-based research group GFMS Ltd., said in an interview.


Buying by central banks could push gold up to as much as $560 this year, said Graham Birch, who helps manage $8.5 billion in mining assets for Merrill Lynch Investment Managers Ltd., the world's biggest investor in gold stocks.

``Countries with big trade surpluses, such as China and some in the Middle East, have too many dollars. They may think about gold as a reserve diversifier,'' he said.

Russia's central bank said in November it may double its gold reserves. Central banks in South Africa and Argentina have also said they may increase their gold holdings.

Central banks, mainly in the U.S. and Europe, hold almost 20 percent of the world's gold supply as a reserve asset.

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

This Bloomberg article is good basic crash course for beginners -- enough to whet your appetite, a springboard to get in and begin to learn more about the why's and wherefor's.


968ECB's weekly financial statement ---- historical moment !#1400591/4/06; 08:36:05

Gold : 163881 million euros.
Forex : 163100 million euros.

So, for the moment, despite all the ECB-goldsale blabla, the ECB's gold position EXCEEDS their foreign exchange reserves position !!!!!

Does the forum has any thoughts on this historic event ?

GoldiloxECB gold reserves#1400601/4/06; 09:19:52


They just can't sell IT fast enough to keep up? Kinda makes the "bugger-thy-neighbor's currency" game a little tougher on them.

SmeagolEuro MTM goals?#1400611/4/06; 09:25:15

Is, there a goal, precious... a target percentage? Are they trying for a certain ratio... or shooting for 100%?

And if the markets "overshoot"...and they have more of It than they "need"...will they sell more or...sss... print (or hold back) Euros to keep It at 100%?


Belgian@986#1400621/4/06; 09:26:22

The "real" historical moment was a bit earlier...when the ECB started with the MTM-concept of the CB's gold-reserves ! But I do agree, that it is nice to see how one's gold-reserves are rising in price with the purpose of having all those accumulated gold-reserves completely "revalued" and finally express real "wealth", universally agreed upon. This in sharp contrast with another CB that prefers the helicopter concept...
Belgian@smeagold and goldilox#1400631/4/06; 09:33:46

Do you really think that the ECB is in the "making money" business with its gold-wealth-concept !? How is it possible that you keep projecting this attitude on an institution that has a whole new set of ambitions !? What facts are you still waiting for ? Are you going to take goldmetal into possession at a certain (much higher) price level that you have in mind ?
Knallgold968#1400641/4/06; 09:39:09

Doesen't look good for fiat euros,to put it cynically.Was that their goal?

Well,and I have more Gold than euros (or any other papercurrency) probably longer than them :-)

GoldiloxWaiting For?#1400651/4/06; 10:21:21

@ Belgian,

Don't assume I am waiting for anything. My gold decisions were implemented in 2003.

I was just making a facetious remark about the "historical" essence of their MTM being worth more than their currency reserves.

Must have gotten lost in the translation.

Flaccus968#1400661/4/06; 10:42:23

Just think where they'd be if they had kept their gold. Nominal fiat gains do not always translate to real gains.
Druid968 (1/4/06; 08:36:05MT - msg#: 140059)#1400671/4/06; 10:57:19

Druid: While the subtlety of those numbers might not be understood at first glance, they strongly suggest that, a new paradigm is taking shape concerning how certain CB's are valuing their gold reserves by way of a free floating mark-to-market pricing mechanism as opposed to a fixed price decree of other CB's.

This is highly suggestive that a new monetary architecture is slowly being crafted in such a way that gold bullion will be allowed to do the heavy lifting as a CB's primary wealth reserve asset in lieu of all those bond and dollar reserves that seem to have no end. A reclassification of sorts.

968@ Flaccus#1400681/4/06; 11:35:41

"Just think where they'd be if they had kept their gold. Nominal fiat gains do not always translate to real gains."

Can you elaborate this please ? What is the gain for the US Treasury, who hasn't sold an ounce ?
If there aren't fiat gains, you have a monetary vacuüm (emptyness). Still no gains...

Smeagol #1400691/4/06; 11:40:08

Ssir Belgian: "Do you really think that the ECB is in the "making money" business with its gold-wealth-concept !?"

We never ssaid they were making money, precious...sss... but they are not in the business for nothing, yess? All we wondered was if the euros in circulation are to be adjussted in any way with the MTM. But upon reflection we ssee that is not necessary. They may keep more of It than "sstrictly" needed.

"How is it possible that you keep projecting this attitude on an institution that has a whole new set of ambitions !?"

We doesn't know what they has in the deepest recesses of their mind, precious. All we sees is what they allow to be ssen. We do not trusst them. That is why we are here, to learn.

"What facts are you still waiting for?"

A timeline? A complete list of central banks that are pro/con/neutral the MTM concept? Anything... not that it will change much...we are merely very curious! (grin)

"Are you going to take goldmetal into possession at a certain (much higher) price level that you have in mind ?"

Going to? Sss...we don't trade paper, precious... we buy hard yellow as we can... and no, we've hardly been waiting for a higher price of It, either! (cackle) But as currencies fall away from It, and debt NOT associated with poor Smeagol is absorbed by It, It will soon become impossible for us, and a lot of others of modesst means, to buy. Then we musst do with what little we has.


GoldiloxWaterfall or Freefall?#1400701/4/06; 12:43:58

@ Gandalf,

The Web bot (and others) predictions of "running out of the dollar" are starting to materialize.

What's the 2006 score now? Down 2% in two days? Ouch!

USAGOLD / Centennial Precious Metals, Inc.New to gold? Assets and information to help get you started on the right foot!#1400711/4/06; 13:26:06">gold ownership starter kit
TownCrierDubai ruler dies on Gold Coast#1400721/4/06; 14:36:49

Thursday Jan 5 -- The ruler of Dubai, United Arab Emirates Deputy President Sheikh Maktoum bin Rashed al-Maktoum, died on Wednesday on Queensland's Gold Coast.

The UAE's official WAM news agency confirmed his death in Australia.

He died on the Gold Coast at the Palazzo Versace resort from a suspected heart attack.

"The UAE has today lost a historical leader who dedicated his life to building the nation and doing good for its people," said a statement from the UAE's presidency.

Dubai's main stock market halted trading after the news. The UAE has declared 40 days of mourning and government institutions will be closed for a week.

"We recognise the cultural urgency in terms of getting his body back to his homeland for burial."

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

From Dubai, the "City of Gold", to the Gold Coast, and back again. Certainly no-one is eager to pass on, but when your time comes, I think you could look back at that particular road and conclude that you must surely have lived a charmed life.


TownCrierYuan Rises to New High Vs Dollar#1400731/4/06; 14:49:22

SHANGHAI, China (AP) - China's currency strengthened Wednesday to its highest level against the dollar after the central bank began allowing banks a greater role in setting the yuan's value.

The People's Bank of China, the country's central bank, on Wednesday began a new policy of calculating the yuan's value against the dollar using a weighted average of the prices given by major banks.

Giving banks a role in setting the new daily benchmark, called the central parity rate, is seen as a sign the central bank is willing to allow market forces a greater role in daily trading.

Since its July 21 revaluation to 8.11 yuan to the dollar, the Chinese currency has gained about 0.5 percent against the dollar.

Throughout the morning, the yuan traded between 8.0681 and 8.0709 to the dollar. That's less than 0.1 percent, but a relatively broad range compared to its usual fluctuation. But according to rules announced at the July revaluation, China allows the yuan to trade only in a band of 0.3 percent above and below its opening level against the dollar and 3 percent versus other currencies.

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

Relatively speaking, depending on how you look at it, is the yuan being allowed to float (like a hot air balloon), or rather is the dollar being cut loose and allowed to float (like a sandbag ballast)?

The days ahead call for gold.


BelgianGold#1400741/4/06; 15:44:14

Just returned from a meeting where some significant (authoritive) gold-statements were analysed : It is very remarkable how many authorities, of all kinds and places, have been at a loss about gold, during the past 25 years ! Nobody, exactly knew WHAT to do with monetary gold. Since 1971, there was an orderly chaos in the entire global gold arena. Many recent statements and gold actions already happened in the period '71 > '90. Those random statements and actions gradually started to converge in an organized architecture since '90 > '95 and has taken a definite form, today ('99).

Today's market action in gold-oil-stockmarket and euro/dollar exchange rate, was a repetition of yesterday...fitting nicely in the architecture of gold's future. Today, gold is not existing in a vacuum anymore. A new "purpose" for gold has been outlined and is in application. Gold shall become "wealth" again...without much DRAMA (as little as possible)! That is exactly what is confusing the majority of stereotype observers. Something "different" is now definitely happening with gold and they can't guess what it possibly could be.

W're coming closer and closer to a point where "everything" can happen with gold. I mean the real change and not the usual (stereotype) kind of gold-drama that comes and goes, as it did in the past 2 decades since 1971.

Disclaimer : The Belgian shrimp still has 100% of his (modest) wealth savings in physical gold...and feel 100% comfortable with it, whilst remaining open minded for every argument that evidences that I have it wrong.

Gold's future (its VALUE) is very unlikely going to remain in the (standard) vacuum of the past decades. I do imitate the ECB's concept and have stopped to see/consider gold as an misleading (perceptive) "insurance". A new role for gold has been found. And a strengthening (rather silent) majority is going to make it happen. The idea and will, for it, have matured.
Only one man's personal opinion !!! DYOD.

Flatliner@Belgian and DYOD(D)?#1400751/4/06; 16:35:44

Hi Belgian, I love trying to decipher your messages. It's like working a crossword puzzle – in a good way! There is always something exciting about the discovery that keeps me going.

So, in an effort to D my ODD, are you willing to share a little more about your first paragraph? Did you really just return from a meeting? From reading that text, it appears as if the meeting was 7 years ago. Also, would you be willing to share the gold-statements that were analyzed? It seems to me that anyone that understands the words of Another and FOA would have a point of view that would be considered very unique by main stream standards.

Also, in the second paragraph, can you point out the ‘actions’ of the day that really stand out in your eyes? I mean, sure the price went up, but it's hard to find things like volume or physical sales volume on a daily basis. We also watched the value of the dollar drop almost 1.5%. At the same time, I totally understand the wealth angle – I mean, look at Google! Where is the intrinsic value there?

Going further, ‘everything’ seems a little vague. You have much experience in the field of gold understanding, it would be nice to see you say something more then ‘everything’. Do you mean anything? As in, we could run out? New mines could come online flooding supply? I would like to understand.

And, don't get me wrong. I value your words *highly*. Really. Following your own words, I do not believe that you are a shrimp at all. Anyone that is 100% invested in gold is a true bulldog in hiding. (I hope bulldog doesn't hold any adverse meanings here. Those things are loyal, determined and downright huggable!)

Please note that I value your time and look forward to seeing anything that you post.

TownCrierFederal Reserve buys Treasuries outright today#1400761/4/06; 16:37:27

Following the holiday season, one would normally expect the Federal Reserve to be spending its time now mopping up the bulge in excess commercial banking reserves that it usually helps create at the end of the year as a consequence of the inordinate amount of cash swirling around in the hands of shoppers and holiday revelers.

But these time we seem to be living through a scenario far from ordinary.

Despite a market in fed funds that was trading in line with the FOMC directive target of 4.25, the Fed's trading desk began the morning with open market operations to temporarily pump an additional $7.75 billion fresh money into the coffers of the nation's banking system via two-day repurchase agreements.

Flexing its muscles more fully just a short moment later, the Fed bought U.S. Treasuries outright on the open market to the tune of $844 million, thereby 'permanently' injecting the money supply with fresh cash made instantantly in the process of the transaction.

When you see how easily money is made, you question the wisdom of various parties (especially foreigners and CBs) who have for so long been willing to hold onto it as though it were a reserve asset of particular merit.

To be sure, there was a time for it, but that time is now passing. The move is on to gold.


Flatliner@White Rose and the Unofficial New Year's contest#1400771/4/06; 17:10:41

Hi White Rose, It is interesting to see your unofficial contest here. What a great way to kick off the New Year. What I find interesting is that the contest only seems to cover the price of gold with regards to the high spot and closing spot. That is, if I understand the contest correctly.

Have you given any thought into conducting a non-spot contest? I seem to remember a poster by the alias of Holtzman, now found in the hall of fame, that talked about the separation of spot and physical with regards to pricing a Krugerrand in a pure physical market (See message 14297). Currently, derivative markets seem to drive the PoG based on paper liquidity. What if the paper becomes worthless and our current system no longer functions as it does today? I would think that the derivative price for paper gold may find its own price separate from the real physical price. Thus, we could end the year with a price of paper gold at zero – or find that the market is closed.

At that point, how will you determine the contest closing price or high price?

It is also interesting that you selected the PoG in dollars. Why not Euros? Rubles? I would think that any currency, with gold officially on reserve, may act differently then one that doesn't. The reason why I mention this is that if the markets close, for some unknown reason, in the US, how will they (you and I) find the true value of gold? How will we really know what a reasonable ‘world’ market value is for our ounce?

I guess when it really comes down to the contest, what I would have found very interesting is a contest where we can challenge each other to come up with a date where the PoG breaks free from the paper gold driven spot price. If you really think about it, many that tune in here are looking for that information. When will gold break free? It would also be interesting to debate the reasons why someone selected their date. There are hundreds of reasons why systems fail, but foreseeing the sequence of events that may lead up to it may spark discussions for months to come!

Anyway, I appreciate your contest and look forward to praising the winner. May your year be golden.

USAGOLD Daily Market ReportPage Update!#1400781/4/06; 17:36:56">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

WEDNESDAY Market Excerpts

January 4 (from Reuters) -- U.S. gold futures rallied to a three-week high on Wednesday, as fund buying bolstered the precious metal amid positive sentiment and a weaker U.S. dollar this week, dealers and analysts said.

COMEX February gold contracts gained $3.10 to $535.60.

On a settlement basis, the close was the priciest for futures since January 1981, although on Dec. 12 the price reached a higher session peak, at $544.50.

Gold got a lift from commodities index-based buying more than anything else, said trading sources, as fund-type accounts continue to diversify away from underperforming assets such as equities, currencies and bonds.

Gold also drew support in its role as a currency alternative from a weaker dollar amid ideas that 1-1/2 years of U.S. interest rate increases may be near an end. The Federal Reserve's minutes from its mid-December meeting of policymakers hinted late on Tuesday that the rate rise campaign might be almost over.

Leonard Kaplan, president of Prospector Asset Management he was bullish on gold. "I would think we will get past resistance at $544.40, to perhaps $550, or $600. "The stock market is not doing well, real estate is off the boil and commodities are the flavor of the year," he said. "Last year, $25 billion to $50 billion went into commodities; this year, people are saying, it will be $50 billion to $60 billion."

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

White RoseRe: Flatliner, msg. 140077; clarifying the contest rules#1400791/4/06; 18:31:00

OK, I was thinking of the value of the Krugerrands that I bought from our hosts. While I appreciate the 24 hour ability to get the gold price from places like Kitco, I know these prices are influenced by paper gold prices.
Since it is my contest, I will define the price as "the gold price coming from a recognized source for which it is possible to purchase Krugerrands for a reasonable $5-$20 dollar premium." If the listed gold price is $800, but Krugerrands cost minimum $1230, then the listing source is no longer valid. If it is impossible to buy Krugerrands for reasons of law, banking rules, nuclear war, bird flu, or martial law (or all of the above), then this contest is null and void and no winner will be declared, except to issue a special statement that all gold holders are winners.

CaradocIran: oil paid in precious metal?#1400801/4/06; 19:15:15

The linked article is supposedly about the possibility of an attack on Iran, but squeezes in some "background" about Iran maybe allowing payment for oil in gold. As a source, this site is sometimes wrong and sometimes first with what others don't have for a week.

No clue whether they have a source for the idea or are just guessing.


FlatlinerWhite Rose, Is it too late for contest?#1400811/4/06; 19:19:59

I do not foresee nuclear war, bird flu, martial law or ‘reasons of law’ that would prohibit anyone from purchasing a fine round Krugerrand in the current year from our fine host. Also, I do not foresee uncontrollable hyper-inflation or gold confiscation. If I were a level headed individual, I would point to MK's entry in the contest and smile knowing that it is a reasonable and educated guess. In all reality, it could very well be the most probable.

But, today, standing out on a thin limb is how everything feels to me. Will this year be the year that gold hyper-inflates? Will the mother of all gold rushes hit the world in a yellow blizzard of hording? Will we even be able to buy a round 12 months from now? We… shall all see.

In light of the fact that I hold a round and I have protested here that ‘you may never want to sell your gold again’, it will take a lot to get me to part with, what Smeagol has said, is most preciousss! I would entertain circulating a round at a factor of 100 over today's prices, but figure many others would be happy with a factor of 10. Thus, if it is not too late, I will venture an insanely high guess, somewhere around $5000 with a close in the $3500 dollar range.

I will be looking forward to the following contest and the one after that. It may even take longer then that for the gold market to settle down into a predictable pattern that would make for easier guessing (constant world wide inflation rates). It will be most interesting to see if the value of gold, in the coming years, means anything more then buying the right to survive. I look forward to being around to see.

The Invisible HandThe truth shall prevail!#1400821/4/06; 19:22:45

January 4, 2006 –
If the United States invades Iran, or if Israel starts military actions by launches missiles at Iran's nuclear power facilities, which then opens the door for the United States to intervene, most Americans will believe that our military actions in Iran will be to defend freedom and liberty while spreading democracy, when the TRUTH is that we'll be fighting a war in Iran because of our nation's relationship with the Federal Reserve, a so-called bank that is not owned by the federal government, maintains no reserve, and isn't a bank at all, but a cartel.

Alan G. retires later this month.
As I posted earlier:
… at the end of January, Mr Greenspan retires from the position of Fed chief. Although approaching 80, he is already planning his new career.
"He's going to write. He has many ideas about how economies work and free markets," his wife Andrea Mitchell, NBC's chief foreign affairs correspondent, told me.

Maybe, he'll speak.

TownCrierFrom yesterday's linked article, "THE GOLD TREATMENT" by Richard Karn#1400831/4/06; 20:12:34

He said in his concluding remarks:

"In more than 800 years of fiat currency use there has never once been a successful fiat currency, whereas during that same time there has never been a currency based on the gold standard that failed -- until it was either corrupted or taken off the gold standard."

<Now, taking a deeeeeeeeeep breath before taking the plunge...>

I'd say he's got it all topsy-turvy. It would have been more accurate and more instructive if he had said this instead:

In the past 800 years there has never once been a successful gold standard, whereas during that same time there has never been a fiat currency that failed -- until it was either corrupted or put on the gold standard.

In that form the statement is nearly perfect.

Unfortunately Mr. Karn doesn't yet understand it as he talks prematurely from his podium. God bless him... if he delves deep enough and thinks on it long enough he'll come up to speed (just like I, too, eventually did).

That, or else he (or any volunteer) will please endeavor to show me the error of my reckoning.

On with the discussion...


SmeagolWhat would happen...#1400841/4/06; 20:28:58

...if the US-country began marking it's Gold-reserves to market?

sss... granted, the US reserves of It would make up a very tiny part of the total number of dollars floating around out there...but over time...

...will they be eventually be forced to do this anyways?
Can they?


TownCrierPre-emptive comment#1400851/4/06; 20:43:10

Before everyone rushes in to suggest that the hyperinflated mark of the Reichsbank
Flatliner@THE GOLD TREATMENT#1400861/4/06; 20:44:59

TownCrier, Well said.

I have found that it's extremely hard for people to separate gold from currency and replace that association with currency and economy. I believe that this is in the cards for the world in the coming years. We will have governments that dictate currencies and print those currencies as they see fit. Gold, will stand out not as an alternative currency, but as a place to store wealth before getting back into a currency.

With that, people will have a choice, hold fiat currencies and be subjected to inflation (taxes), or hold gold. Governments can print all the currency that they want, but if they can not provide reasonable confidence that it will hold value over time, the PoG in that currency will climb to the moon and international trade with that country will falter.

This belief implies that we will forever have inflation! This belief also implies that we will always have boom and bust business cycles. But, countries with good political systems, where they are able to manage their currency well, will be rewarded by businesses that will be able to function! It will be in the interest of the governments of the world to find stability in order to support business that will improve the quality of life for all in it's boarders.

Exhale! You may thing that you stir the pot, but, there are many that see the words that you write and don't find it offensive – yet.

SmeagolEntertainment...#1400871/4/06; 20:50:57

"I would entertain circulating a round at a factor of 100 over today's prices..." - Flatliner (msg#: 140081)

And it might even be entertaining, precious...

Ssss... flag that posst of yours, Ssir Flatliner, and recall it when the opportunity actually arises to exchange that precious Krugerrand at that price. Do you assume today's purchasing many that time?

Many have ssaid and prophesied that It would be priced in five, maybe six dollars of course, precious... but even after a once-in-a-lifetime MTM "gain", by then many other things may also be much more expensive than they are today.

It will indeed be very interessting, yess...and entertaining?...what people will think of It, and do with It, then. And that time is now one day closer...


Rook.,.#1400881/4/06; 20:54:59

In the past 800 years, there has not been a successful monetary structure, because of poor achitecture, insufficient cooperation, and human nature.
Well, you did invite attempts at rewrites;-)

Flatliner@Smeagol, I can almost hear your hissing snicker of a laugh.#1400891/4/06; 21:22:44

But today, I do not part with the precious round.

Part of the reason why I believe the outrageous 100 factor, can be found in my previous post. I believe that we will forever have inflation – not just US hyper-inflation that has been held of for nearly forever (and my never come), but inflation in every currency for the rest of our lives and the lives of our children, grandchildren and so on.

If you untie Gold from a particular government currency, you will never find the problem of having to get off ‘the gold standard.’ But, unlock gold, let it trade free. Then, governments and their central banks can create money all they want. If they create too much, every business in that country will fail, there will be no long term capital investment gold will fly across the boarders and its price, in that currency, will skyrocket.

My belief is that this is what the coming financial system will look like. Gold will trade free and currencies will be measured against economies (not gold). The success of the economy will provide confidence to the people to enter the currency carry trade of that country thus, reducing the price of gold in that country.

But everywhere, we will have inflation. It is just part of the process. The best part is that as gold trades freely, it will find its natural worldly value. That value will transcend boarders and be redeemable anywhere and everywhere. But, still we will have inflation.

Sure, we might have a one time readjustment to the price in dollars, but, if you think about it, the fundamentals of inflation remain and will forever remain. Thus, don't look at the one time adjustment of MTM as the end game. You, my friend, will most likely be in this for life and your children for their lives and so on and on and … Well, you get the point. The PoG, in an inflationary environment will always go up. And by inflationary environment I mean as world wealth grows, so will the value of gold and so will the supply of currency.

So, laugh today because it would be ridiculous to imagine trying to sell a round a factor of 100 above today's prices. But, to the kids, when they sell, that is what they will get and laugh they will joyously.

GoldiloxCurrencies don't fail, people who control them fail#1400901/4/06; 21:26:38

Reading the ping-pong between opinions of currency failures, whether FIAT or backed, one thing becomes obvious to me.

Currencies don't fail, but management of them has failed regularly. Some are harder to manage, and some leave more room for abuse, but the failure itself always boils down to corruption and greed. One can comfortably say from the sidelines that a government that implements a 100 to 1 or some value trade-in didn't really fail. But those trying to live through that episode might suggest that in its ability to serve its populace, it certainly did fail, and it required complete replacement.

Like Larry the Cable guy says:

"Guns don't kill people. Husbands who come home early do!"

We're debating nothing but semantics on this issue.

SmeagolThe Silence of the Gold#1400911/4/06; 21:43:09

"Thus, don't look at the one time adjustment of MTM as the end game." - Flatliner

We doesn't...

So, laugh today because it would be ridiculous to imagine trying to sell a round a factor of 100 above today's prices. But, to the kids, when they sell, that is what they will get and laugh they will joyously.

100, 1000, 1,000,000... there is no number that is ridiculous
...and we are not laughing, and rarely do... where It is concerned.


Ten Bears"Successful" gold or fiat?#1400921/4/06; 21:43:45

Message 140083

It depends, obviously, on how one defines "successful". If one defines a successful fiat monetary system as a system which successfully fleeces, and over time impoverishes the majority and richly rewards those who have the monetary franchise, then your contention is correct.

If, on the other hand, success is defined as a sound-money system which does not allow the "hidden tax" associated with a continually depreciating monetary unit, and one which provides reasonable prosperity for the majority at the expense of power for the few , then Karn is correct.

Additionally, if one addresses the record of almost continual warfare associated with states using "debt" fiat currency, requiring continual monetary expansion, and a borrower of last resort (often military expenditures), then "success" associated with fiat currency looks even less desirable for the majority.

Or perhaps, like one favorite professor commented long ago, "Maybe everything I have learned over the last half-century about economics is wrong (just not up to speed)……But I doubt it."

SmeagolOopsss...please put quote marks around the third line in our lasst, precious#1400931/4/06; 21:44:48

GoldiloxPoint vs. full view of inflation#1400941/4/06; 21:48:13

@ Flat-liner,

I think your analysis is right on. We are progammed to think of "inflation" as a natural "linear" progression of money supply growth by insincere types like Bernanke, and the incredibly obtuse system of hedonic measurement has evolved to keep us in that thought pattern even as the inflatinary curve slope crosses over the point of unity. All hyperbolic curves approach a slope of zero in one direction and infinity in the other. That's the definition of hyperbolic.

Nothing is happening (or may even be available) to alter that curve, as no one has come up with a monetary theory that defies the hyperbolic trend.

Most people aren't even alarmed by the idea that the dollar has lost 96% of its value since 1933, as they say "it's just numbers in a ledger". But the bottom line is that, while this is true, the "controllers" use this obtuse calculation to run the pyramid scheme to its logical conclusion EVERY TIME. Unfortunately, that logical conclusion is greater and greater distortion of the distribution of wealth. Like any Monopoly game, the game must end and be restarted when the balance is completely lost.

Unfortunately, the repeated success of this system lies in something I recently read called "Cognitive Foreclosure", wherein the masses decide it's not worth standing up for rights or equality and prefer instead to just stay "under the RADAR" of the controllers.

Liberty HeadRe: TC or Karn#1400951/4/06; 21:55:08

Actually both statements are equally correct yet overly simplistic.
Each statement does reveal something about the perspective of the speaker.
Since any currency system will eventually fail once it is corrupted, perhaps it would be more instructive to ask what currency system would offer the most resistance to corruption?
Is the chosen currency system supported by the use of force, fraud and terror to maintain monopolistic control?
Are competing, alternative currencies readily available once corruption is found out?
Is the currency inflatable?

Best Wishes

SmeagolCurrencies...#1400961/4/06; 21:57:24

We looks at paper-currencies as the sstock-certificates of corporation-governments...which people are forced to use rather than freely least within corporate government borders...and as the corporation goes, so goes it's sstock. And even with good management, corporations may sstill die.


GoldiloxMissed reference#1400971/4/06; 21:58:10

For those who want to read the Doug Soderstrom article where he presents his theory of "Cognitve Foreclosure", here is the URL.

It's too far afield topically to elucidate here, so go read it for yourself, if you care to.

Mthirsty1contest#1400981/4/06; 21:58:49

Flatliner,i am new to this forum as you know.My posts come from a 55 year old sheetmetal worker who built all of those buildings where the white collar workers have their board meetings.Whiterose asked if anyone would be interested in taking a guess at end of year prices of gold period.Why does a simple little contest that is all in fun have to be dragged into the global market of rubles,paper,and whatever else is happening in the world.It's like signging up for a football pot at the work place.You just pay your money and pick your squares.This is whiterose's contest.If you do not want to enter no big deal.If you want to see a contest that includes what you discussed start your own contest.With all respects M.(p.s.i have posted 640 high and 640 end of year)
TownCrierFlatliner msg#: 140086, well done!#1400991/4/06; 22:10:59

Very well said. I stand and applaud.

However... (did you see that coming?)

In the pursuit of rock-solid thinking on this matter, I want to challenge you further on one small thing... the conclusion you drew in the second paragraph where you said "...the PoG in that currency will climb to the moon and international trade with that country will falter."

Firstly, taking your introductory remarks, I fully agree that if indeed the Governments forsake reasonable management, then yes, absolutely, the PoG as expressed in that currency will 'climb to the moon'. So far, so good.

However, I think on the face of it you might be overly hasty in concluding "international trade with that country will falter".

Think about it like this. Based on the same rationale and understanding that you so excellently expressed in all other areas of your post, a clever fellow like you would not maintain much more than a superficial level of currency in your checking account. You'd select just enough from your income stream to meet your expected expenses, whereas any excess you had (the portion that you would earmark as savings) would prudently be exchanged for the security of tangible gold metal.

Not only would you do this, but so would all of the other equally clever people of the land! And in fact, if you travel to many places of the world where the government's management of the currency has a bad track record, you'll find a lot of people there are already on this sort of gold savings paradigm.

And that right there, my friend, is the essential BEAUTY of the system; because these folks shall be using gold as their savings, they will not be losing their international purchasing power -- even as the government is driving their currency into the floor!

The people of the nation will, just as before, be able to dip into their savings to buy foreign goods (imports).

Now take it a step further, and stand on the outside looking in. If that country's currency is going to the floor and yours isn't, that exports will certainly look very affordable, and foreign capital will certainly bid aggressively on their available goods (exports).

So you see, international trade need not suffer at all, and in fact, the paradigm will do great service in preserving, through time and all sorts of currency storms, a better continuity of balance between the imports and the exports.

Finally, picture yourself as a tourist to that fair but far distant land of the weak currency. In fact, say the country is so small, and its currency so unattractive and exotic that your hometown bank can't provide you with any of its folding money to have in you wallet upon you arrival at the airport.

Furthermore, being a land of gold savers, let's say they really have no need for your own pathetic currency, either, because you, too, are from a fair but far distant land with an equally weak and exotic currency.

No problem! Being a gold saver yourself, you pocket one of your many gold sovereigns that you've bought from USAGOLD-Centennial Precious Metals, and you hop on your airplane with dreams of a righteous sun tan.

You land in that fair land, find the local gold merchant (there shall be many of them on account of the locally active gold/currency exchange) and hand over the sovereign for enough cash to see you through your vacation -- paying for all of your locally rendered services (hotel, haircut, shoeshines, meals, etc) as well as the goods that you take back home as souvenirs.

now think about it the balance of trade upon your return. That country effectively IMPORTED one sovereign (0.2354 oz gold), the local economy was stimulated by your use of local services, and only the small balance of physical souvenirs that you took home registered as EXPORTS.

Meanwhile, perhaps your own country's government will be 'hip-hip-hurrahing' because you single-handedly contributed towards a net EXPORT of what had previously been domestic goods (your own gold) meanwhile IMPORTING less. And in the currently topsy-turvy world, isn't that what every government seems to be striving for -- a net EXPORT of goods... which they perversely call a trade SURPLUS?!


Thanks a mint for your participation in this critical discussion. It's the future as you'll soon enough know it by experience rather than just as a mental exercise. And the premise of a monetary system built upon a framework of floating MTM gold reserves is the critical ingredient to deliver it to our future doorsteps.

Now THAT's a cause for cheering. Hip-hip-hurrah.


GoldiloxTrade in countries with bad currency#1401001/4/06; 22:53:05

@ TC and Flatliner,

One of my favorite reads in the last couple years was Jim Rogers' book "Investment Biker", the story of his trek around the world on an "Airhead" BMW. He describes his entry into each country as an adventure in checking out the health of their local economy via this route:

First he would go to the bank and exchange a small amount of US$ (1980-ish) for the local FIAT. Then he would seek out the local money changers in the street markets and compare the exchange rates. If they were similar, he ruled the local economy healthy, if not, he suspected that government controls were operating at a level that stifled commerce.

Not unlike your gold market analogy, with a more emperical basis.

TownCrierGoldilox says, "Currencies don't fail, people who control them fail"#1401011/4/06; 22:53:45


And when we say the people fail, what we mean is their management is bad -- to the detriment of the currency's purchasing stability.

A gold standard currency will ALWAYS fail, thus giving over to a sudden disruptive dislocation of currency value (at the moment of suspension of convertibility) and subsequent transition to a less 'shocky' fiat currency regime, because even the 'almighty' gold standard is controlled (operated) by fallible human beings.

Technically, 'currency' is whatever your social structure (most frequently this means your government) says it is, as a portable unitized portion of that society's monetary system. 'Money', however, is the same wherever you go -- and you CAN'T quite put your finger on it... except in the form of its designated currency.



GoldiloxGold currency failure#1401021/4/06; 22:58:30

@ TC,

I totally agree that even gold backed currencies will finally fail, once the pyramid scheme runs its course.

A reasonable question, and probably not very easy to answer, is:

Does solid backing of a currency lend itself to less corruption and longer life?

Obviously not, if the controlling entity is completely rotten, but a hypothetical comparison of backed vs. unbacked currency life given similar conditions might be an worthwhile study.

TownCrierGoldi, your question#1401031/4/06; 23:22:12

"Does solid backing of a currency lend itself to less corruption and longer life?"

Revisiting square one, the premise was that a fiat currency NEVER fails, but a gold standard (currency) ALWAYS fails eventually.

So there's there answer to that. Also arguing against the gold standard currency is that when it DOES fail, there is usally a large dislocation among the users of the system who had so-called convertible accounts in the bank which one fateful day suddenly no longer are convertible.

A currency on a fixed gold standard leads to gold with a frozen price/value along with shocking devaluations; whereas a fiat currency with floating MTM gold reserves provides all the while solid and ever reliable gold values and easily-coped-with gradual currency devaluation.


TownCrierTen Bears msg#: 140092, money and war#1401041/4/06; 23:47:45

I read your comment about the "the record of almost continual warfare associated with states using 'debt' fiat currency".

This question is sure to put a smile on EVERYONE's face.

Please give me the name of ONE single war that was prevented by a monetary gold standard.

<general laughter dies down>

Ok, now in all deadly seriousness, consider that we were on an international gold standard AND YET the Great War (WWI) still managed to spring into being.

Now I'll grant you that many participants subsequently chose to suspend the gold standard, but please answer this: How exactly does a gold standard prevent a war when the standard is so easily suspended in accordance with the political will to do so?

Even good ol' Ferdi could never quite figure that one out, but bless him, he never let it stop him from stating that false claim anyway.


Gold StandardOil in Euros#1401051/5/06; 01:01:47

It is often published that the intent to sell oil in Euros (e.g. Saddam Hussein 2000, Iran 2006) is deeply offensive to the World Oil Powers That Be, and that armed intervention will occur soon afterwards.

I simply cannot understand how pricing a commodity in a different currency can cause any such concerns - surely it is simply a matter of clicking a mouse on the unit of international transfer (be it USD, Euro, Yen, CHF or whatever).

It's not that oil will be priced any <b>differently</b> in Euros or whatever, as the price must take cognisance of the world market price.

Then again, maybe I am being simplistic. Can anyone on the forum enlighten me?

GoldiloxAxioms#1401061/5/06; 01:01:53

@ TC,

"Revisiting square one, the premise was that a fiat currency NEVER fails, but a gold standard (currency) ALWAYS fails eventually."

Ain't buying this one, for reasons I already proposed.

Your explanation of why FIAT never fails only work for the outside oberver, not for the participant.

Absolutes, while great for armchair quarterbacking, never take the hits dealt in a real game.

Liberty HeadTC Questions#1401071/5/06; 01:11:25

"How exactly does a gold standard prevent a war when the standard is so easily suspended in accordance with the political will to do so?"

Liberty Head
TC, must you persist in asking duplicitous questions?
If a gold standard must first be suspended than it must be preventing something, right?
So the gold standard isn't the problem, it's something else.
Your question is like asking; How exactly does the Constitution prevent a war when it is so easily suspended in accordance with the political will to do so?
These questions lead to no useful understanding. They are camouflage.
A more useful question would be; How do we contain the gov't?

Best Wishes

GoldiloxBenefits of being the "reserve currency"#1401081/5/06; 01:16:14

@ Gold Standard,

"I simply cannot understand how pricing a commodity in a different currency can cause any such concerns - surely it is simply a matter of clicking a mouse on the unit of international transfer (be it USD, Euro, Yen, CHF or whatever)."

Ah, but you are forgetting who gets the benefit of those mouse clicks. Remember, 96% of the dollar inflation has been "absorbed" back by the creators as their "commission" for control and creation. Once the widespread use deteriorates, the built-in profit of the creditor is disrupted, and the game table is releveled. Worse yet, the debt might have be repaid, instead of inflated away.

One analogy is the "bank" in BlackJack, always owned by the house, vs. the "bank" in Bacccarat, which moves around the table, player-to-player. If one assumes that the "bank" has an advantage, the IMF-dollar system hardly wants to "share" that advantage with other currencies, as it is the very size and continued growth of the international debt that is keeping the US $ afloat.

Once the international debt stops growing, the pyramid scheme begins to unravel.

Knallgold@GoldStandard/@all#1401091/5/06; 01:22:19

It must be the power they can excercise through these paper currencies.Like the pattern of the flag ruling was of utmost importance in the old times.Now we come nearer to the moral imperative questions TC likes to avoid.But I'll help him:who says the PTB can't be more moral?Who says the Goldstandard needs a fixed price,must be a "centrally governed" standard?Why not a personal Goldstandard?

Liberty Head hit the nail with that one: "since any currency system will eventually fail once it is corrupted, perhaps it would be more instructive to ask what currency system would offer the most resistance to corruption? "

TownCrierGoldi msg#: 140106, short memory#1401101/5/06; 01:33:33

Your forgetting our intermediate discussion.

Technically it isn't the currency, per se, which fails, but rather it's the management of the monetary officials which fails.

To be sure, the result of that management 'failure' is ultimately that the purchasing power of the currency unit falls to nearly zero, but other than that the currency as a utility is alive and kicking, same as it ever was.

Let's not miss my overarching point which is this. Money (supply), irrespective of the type of currency unit chosen by the sovereign, has a tendency to grow as the economy grows, and atop that feature the sovereign management has a Keynesian tendency to fight monetary contractions associated with downturns in the economy (à la the classic "business cycle"). The consequence is a ratcheting effect that, as Flatliner would readily agree, points to perpetual inflation (and depreciation of the currency unit) to one degree or another.

Hence the prudential motivation of industrious people to choose physical gold -- gold outside of the monetary system -- as their means of secure saving without fears of being taken down with the currency depreciation as would affect any such coinage that trades at par with the currency unit itself.

Is there a way for me to make this any clearer?


TownCrierLiberty Head, it was SO self-evident you apparently miss-identified it#1401111/5/06; 02:11:44

I guess the next time I consider 'asking' a rhetorical question, I need to bear in mind that the written word does not convey the sentiment as clearly as the spoken word.

Despite your handling of the affair, you did at least arrive close to the intended target zone. Namely, it boils down to finding the mechanism by which one can deal with one's would-be controllers -- and if a suitable degree of outright control is unachieveable, then the next order of business is probably closer to finding a means to survive/thrive the best you can underground.

Gold is useful in either event.


Goldiloxclear, but still circuitous#1401121/5/06; 02:11:58

"To be sure, the result of that management 'failure' is ultimately that the purchasing power of the currency unit falls to nearly zero, but other than that the currency as a utility is alive and kicking, same as it ever was."

When my bottle of beer is empty, the bottle may retain its utility, but the beer is still gone.

Your currency of "near-zero value" may also retain its "utility" as a concept, but the value is still gone.

As a living being, the basic "utility" of that currency can be measured in its acceptability for goods. If that is "near-zero", it has lost its function as far as I'm concerned, if it no longer purchases what I need to sustain life.

The Invisible HandIran is Cheney's Next Target #1401131/5/06; 02:12:29

It's the financial threat of Iran introducing a euro-based energy exchange.

Ironically, America originally invaded Iraq - a poor, defenseless country - partly to send a message to other oil producing countries not to rock the petrodollar system, but the real message for small countries is that they need to present a credible deterrent threat or risk being ignored and/or invaded.
Iran may, indeed, be attempting to acquire nuclear weapons. However, it also has a "legitimate" interest in developing nuclear power, since its own oil reserves are already post-peak and it aims to continue in its role as an energy exporter. Iran is a signatory in good standing to the Nuclear Non-Proliferation Treaty (NPT) and has openly informed the International Atomic Energy Agency of its intentions as requried by the Treaty.
However, Iran's presumed attempt to acquire nuclear weapons is only the politically acceptable excuse for America's threats.

TownCrierKnallgold,#1401141/5/06; 02:26:12

Since you're apparently apt to agree that currency SYSTEMS are vulnerable to corruption, why can't we use that as an instructive premise to solve our problem at hand?

Nobody wants to risk losing their life savings.

Nobody wants their savings to be corrupted.

Nobody wants their savings to be even remotely vulnerable to corruption and loss.

That's why gold must exist outside and away from the controllable aspects of the currency and monetary system. That way it will not share in the vulnerability to corruption.

There's really not much we can do, personally, to control our monetary system or its controllers.

But we CAN take control of our savings, by making sure it is as secure as solid gold.

Fortunately, a coalition of deep thinking politicos and central bankers have apparently seen the light and are taking giant steps to take gold all of the way out of the dollar-IMF deep-freezer of official control so that it will finally be able to serve us all in the above-stated manner as the savings/reserve asset par excellence.


TownCrierGoldilox, #1401151/5/06; 02:43:14

Don't let a few zeros confound your thinking. A currency can lose half of its purchasing power, or even 99 percent, over and over again, an infinite number of times.

Usually the managers knock off a few zeros for convenience sake, and the system keeps on truckin'.

Imagine if we didn't have a numerical based pricing system for our currency, but used something like a spectrum of colors (like the cheap plastic poker chips you played with as a child). Then, there wouldn't be any of this 'zero' dilemma between us. We would quickly agree that, as the prices tended to get larger due to depreciation of the currency, the colors of the chips in primary circulation would tend to evolve along down the spectrum, always heading in the direction that represented an adequate degree of purchasing power.

Forgive me if that's too abstract. I don't know how else to put it.

And again, don't loose track of my primary point. Money depreciates, and there's nothing to be gained in whining about that fact of life except earning a degree in self-humiliation.

So the thing to do is preserve our energy, gather up our currencies, and use them to choose gold as our means of savings. There's really nothing else for it.

And with that, I relinquish the floor to the night shift. Tidings, good fellows!


GoldiloxDeep thinking politicos#1401161/5/06; 02:51:41


"Fortunately, a coalition of deep thinking politicos and central bankers have apparently seen the light and are taking giant steps to take gold all of the way out of the dollar-IMF deep-freezer of official control so that it will finally be able to serve us all in the above-stated manner as the savings/reserve asset par excellence."

You're obviously a lot more trusting of these "deep thinking politicos" than most of us are. Some remember how they used gold confiscation to bail their bankster butts out of sling in 1933, at the price of prolonging the depression by about ten years - and still needed to "cull" the world's workforce by another 50 million souls during the decade after that.

I've also been thinking about your example of WWI as a war under the gold standard. While the gold-standard was in effect, it was at the prodding of JP Morgan who bet on the wrong side that the US entered the war to bail him out of Britain's ultimate financial collapse. Without the massive debt engine, it might not have been a "world war" at all. So while the gold standard was ofiicially in place, the Keynesian principle of rule by overwhelming debt was already in play, and the destruction of the gold standard was more than likely the result.

GoldiloxPurchasing power#1401171/5/06; 03:13:07

Your quote, "Don't let a few zeros confound your thinking. A currency can lose half of its purchasing power, or even 99 percent, over and over again, an infinite number of times."

I care not for the number zeroes, but a person can only starve to death once. Are you really so "collective" oriented, that the survival of a paper system is more important than the survival of the species?

This is where we really differ. Your major concern seems to be that the currency retains some flicker of life after having the stuffing stomped out of it. I believe the real issue is that a relatively few money changers suck up all the stuffing, starve a major segment of the populace, completely hinder real technical progress to shelter their friends' "franchises", and spend more than half of the world's productivity for weapons to retain their yoke upon civilization . . . and for some reason we seem to be too "civilized" to guillotine then for doing it, so they repeat it generation after generation, and we call them "Royalty".

The best most people can muster is to "stay out of Massa's RADAR", caring naught for arresting the slide of civilization into the next "Rishi-style" bye-bye.

OK, I'm an idealist, but I've been called worse, especially in the last few days!

Knallgold@TC#1401181/5/06; 03:23:02

Starting as a financial novice here at USAGold,now after all these many years of studying the monetary concepts I think I'm coming very close to hit the G-Spot (pun intended) on the matter and formulating my own conclusions.But a complete change in the 5000year old monetary (Gold) history makes it necessary to pedantically think through the remaining grey areas/potential flaws-it will be something for a weekend post and I still need further read of "Geld,Gold und Gottspieler".But you touched already on it with the following:

"That's why gold must exist outside and away from the controllable aspects of the currency and monetary system. That way it will not share in the vulnerability to corruption."--TC

KG:do you see the contradiction here?Particularly with the next statement:

"There's really not much we can do, personally, to control our monetary system or its controllers."--TC


"But we CAN take control of our money, by making sure it is as secure as solid gold"--TC

KG:Admittedly I changed a small bit.

"Fortunately, a coalition of deep thinking politicos and central bankers have apparently seen the light.."--TC

KG:then,they could as easily operate something like a Goldstandard,no?

It all somehow boild down to corruption (morals) and the Gestalt (and value or not) of money'some things might be semantics and I try to sort this out from now on.

Randy,no need to answer now (guess you deserve a good sleep anyway) nor later,I posted this just that your knowledge about my thinking gets a more solid foundation and that you will understand my future posts.And frankly I have to more carefully read all the great posts from yesterday.

BelgianGold standard versus Freegold#1401191/5/06; 03:44:44

The non US-$ factions NEVER felt comfortable with the "evolving" $-gold-standard as fundamental of the $-IMS !

Idem dito for the parallel $-oil-standard as another fundamental of the $-IMS.

And it is not accidental that Russia has become very vocal about this "feeling uncomfortable" with these different forms of $ standardisation (Goldreserves-Gazprom !).

And herein lays the answer of Smeagol's question : The "new" producers and owners of wealth don't wish to be standardised with (by) the means of a $ unit of account (fiat money) as the expression of their (real) wealth !

Like it or not...but a fast growing and coherent coalition wants a regime change from the $ standard to a wealth standard.

Any IMS will have to adapt-restructure to this change or decline in -global- "use".

The reasoning is VERY simple : Stop plundering our wealth by the means of the $ standard (IMS)! The solution (change) is even simplier : Restore the notion of real wealth in a structured manner.

This globalizing world (the non US-$ factions) is definitely in the fast proceeding process of re-defining universal "WEALTH"...not the $ standardised mutant. No military power or killing is going to stop this evolution, anymore.

BelgianTrust in politicos and central bankers ?#1401201/5/06; 04:06:55

It is NOT at all a matter of "trust", Goldilox ! It is about the global owners and producers of REAL wealth ! GLOBAL ...not local !!! Forget the island view - tunnel vision. Don't generalise (globalise) the $ standardisation.
Politicos + central bankers have to and are "structuring" the needed and wanted transition...out of the fake wealth standard into the real one. This is NOT a matter of trust but bare nescessety.

The $-gold-standard(s) IS (are) as socialist/collectivist as can possibly be. Freegold IS (real) capitalism !!! And the global wealth giants are not intimidated if and when some factions are going to label it as "unfair".

The KnifeAn oz. of gold or a share of Google?#1401211/5/06; 07:48:24

Here's a question I pose for the forum. If someone offered you an oz. of gold or a share of Google stock, which would you choose? Why?

Consider that gold is $526 per oz. and Google is reaching a new high this week at $445 per share.

Ten BearsRETURN TO CONSTITUTIONAL MONEY#1401221/5/06; 07:53:59

Worth a look.
Rook.,.#1401231/5/06; 07:58:37

Invisible hand, feel free to leave comments like, the us invaded a -poor defenseless country iraq- on the link you provide and not on the forum.
GoldiloxThe End of the Grid#1401241/5/06; 09:20:47


[Huck Finn's Electricity Hut is regulated by the State. So Huck can only charge his customers a moderate fee for service. But one day, Godzilla comes to town, already in possession of a hundred similar operations. He offers a pile of money for Huck Finn's Electricity Hut, and now Godzillacorp has a hundred and one subsidiaries all over the USA. Clearly, Godzillacorp is an interstate entity, so it is not subject to the regulations that kept Huck's prices so low in the past. The laws that once prevented Godzilla from buying up large numbers of small independent utilities were largely repealed during the legislative bonanza that brought you Enron. The coup de grace was the repeal of the Depression-era Public Utility Holding Company Act last fall. And while the giant lizard is buying up all the small utility companies, the natural gas needed to generate electricity is running out. Scarcity will impose cuts in energy use, and whoever controls the generation and delivery system will be choosing where to cut. If the weather is harsh (perhaps because of a radically destabilized climate), access to energy is a matter of life and death. And if Godzilla is in charge, will Huck and his dirt-poor client base be around much longer? Deregulation + arbitrage = hypothermia.

And whom do we find at the heart of all this? Warren Buffett


I have always maintained that Buffett's pennies-on-the-dollar public gas and pipeline purchases were of much greater import than his silver and dollar side bets. It looks like Michael Ruppert agrees.

Whether or not one agrees with Michael's conclusions, the questions themselves are important, and get little airtime anywhere.

Basically, if Peak oil [energy] is either a reality or perceived reality, how does that drive geopolitics, given hydrocarbon's already very political nature?

I think a similar question can be asked of Belgian and TC's "politicos are engineering freegold" statements. Do you mean the same good-natured "politicos" that are "engineering" gold and silver price suppression? Is this practice really "for the good of all", or just to line their own pockets during the "global transitions".

Goldilox$6 limit#1401251/5/06; 09:25:50

Watching the POG correction this morning brought up an interesting question. Are we seeing the $6 limit imposed on the downward side in this phase of the golden bull?
contrarianGold Standard--Oil in Euros#1401261/5/06; 10:05:13

Gold Standard--
please read link above for explanation of how important keeping oil traded for dollars is for maintaining dollar as international reserve currency.

FlatlinerHomebrew?#1401271/5/06; 10:37:58

I don't think *I* emptied enough bottles of beer to clearly see the analogy presented in a previous post.

Does the beer represent the ‘value’ where as the bottle represents the ‘currency’? If so, I have to ask, how did the beer disappear?

What is very interesting here is that in these discussions the element of time is quite often overlooked. How long does it take for a currency to be devalued? How long does it take before the failures in the system cause confidence in the system to be reduced? How long does it take to count to infinity?

Let's take counting to infinity as a starter. Here, let's consider counting from 1 to zero by always cutting the number in half. Thus, the sequence starts: 1, 0.5, 0.25, 0.125, 0.0625, … Anyone that has explored this puzzle will find that there are an infinite number of entries between 1 and zero and, even though we may continue to try to solve the puzzle day in and day out, getting to the end is impossible and it will take an infinite amount of time. To speed up the process, if you can apply some calculus and determine that given that you've counted an infinite number of times, you will come to zero as your answer.

Calculus is great because it removes the element of time. Reality is a little different. We are stuck with time.

Now, let's look back to see what happened to that beer – over time. If, the owner of that beer drank it, well, they got to enjoy the full value of their beer. That would be like selling your car for 10k and turning around and buying new living room furniture. Very little time elapsed between the opening of the transaction and the completion of it. During that time, as with counting to infinity, only a few steps can be taken along the devaluing path and it may not even be perceived as having an affect during that time frame. But, what if the owner of the beer wanted to enjoy it over a long period of time? Well, here we've got problems. One problem is evaporation. Left in the bottle uncapped, evaporation is slow but rot steps in. Spread thin, evaporation comes into play. The amazing part here is that once the beer is opened, everyone knows that you either enjoy it *now* or it becomes worthless.

This same principles of rot and evaporation can be applied to currencies where time is the currency carry trade. Once you open a transaction thus acquiring currency, you have an open beer. If you use that currency right away, it trades at full value – it's a full beer. Everyone sees it as a full beer. Everyone will accept it as a full beer. But, if you hold that beer long, it will ether evaporate of rot. Thus, anyone that has studied beer knows that you don't buy beer and put it on the shelf in the garage with the intent of keeping it for a long period of time. It goes bad. Currencies are the same way. Either there is outright inflation (Evaporation of value) or the system of preservation is flawed allowing rot to consume it over time.

We could debate all day about which is worse – evaporation of value or rot in the system, but the reality is that it just goes bad over time. It's that simple. Don't buy and save beer. Buy it when you want it and use it before it before it goes bad. Keep the period of time where you're into your beer transaction at a minimum and find things that don't rot to use as your savings.

silverton3Beer is the wrong example.#1401281/5/06; 11:47:37

A currency is much more like a bottle of hard liquor that is in Dad's liquor cabinet.

The teenagers have a party, and drink half the liquor. Then they fill it up with water, so that anyone looking at it does not know it has been consumed.

Then there is another party, and the remainder is consumed. Still, the teenagers refill the bottle, which is now all water. But until dad checks the bottle, nothing happens.

GoldiloxLiquor Cabinet#1401291/5/06; 12:15:16

I yield to Silverton3's awesome analogy!
FlatlinerMoonshine? Maybe?#1401301/5/06; 12:18:06

Ah… I see. I like how dad is deceived in this example. Very nice.

It would still do dad good to buy his liquor closer to the time that he wants to use it. That way, when the kids open the cabinet to rob him, there is nothing there to steal. The problem here is still time. The longer dad holds the bottle, the higher the probability that the kids will party at his expense.

canamamiGold-backed currencies#1401311/5/06; 12:51:37

One alternative is that allowed by US law: Insert gold clauses of some sort in private contracts.

The entire monetary system is not based on gold, so there is no need and little incentive for the government "to go off the gold standard", or to outlaw the gold clauses. However, private parties who agree to use gold clauses as part of their contracts can do so. This permits a private party to a long-term contract to look to a gold clause to protect their interests (long-term asset value protection), perhaps in the context of a long-term commercial lease. The flipside probably would be to allow one party to walk away from the arrangement, if the other party triggered the gold option in the contract.

USAGOLD / Centennial Precious Metals, Inc.The art of converting your seasonal fruits into everlasting value!#1401321/5/06; 13:01:41

Swiss gold francs

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

USAGOLD-Centennial has three decades of experience in the field

Liberty HeadDad's Moonshine#1401331/5/06; 13:19:51

Dad's kids are more clever than Dad. They dilute the moonshine and finger the maid. They beat her up. Dad says with pride "That's my boys". Dad brings in more moonshine, finds another maid and the cycle repeats until the kids all drop dead with cirrhosis.
Anyone who tries to tell Dad the truth is accused of treason, anarchy and terrorism. If there is a trial at all, it will come after the sentence has been imposed.
Welcome to the USA.

Best Wishes

TownCrierKnallgold, msg#: 140118#1401341/5/06; 13:45:54

Arrrgh! (And by that I also mean, "Ooops!!")

"There's really not much we can do, personally, to control our monetary system or its controllers. But we CAN take control of our money, by making sure it is as secure as solid gold"--TC

I beg your many pardons for my confounding grammatical slip. I'm sure you'll have an easier time following my train of thought when I offer the corrected version below, which is what I MEANT to type.

"...But we CAN take control of our SAVINGS, by making sure it is as secure as solid gold"


WhitewaterwomanGold, please, Mr. Knife#1401351/5/06; 13:48:55

...because unlike the Google company, I know gold's fundamentals and I like them very much. I'm not saying Google doesn't have good fundies, but I don't know them or their management.

What I love about physical gold is that I know the manager intimately: it's ME! And I have great trust in myself.

On a wonkish note, Google's value depends on people being online. If energy costs soar, or anything else causes rolling computers, except for laptops rechargable by solar or hand-crank.

Happy New Year, all!

GoldiloxDad's Booze "conundrum"#1401361/5/06; 15:43:00

Or maybe, being smarter than the average Dad, he moves the good stuff to the garage filed under "automotive lubricants", and lets the kids keep acquiring more and more diluted booty from their illicit enterprise. He might even add some color to the liquid in the bottle (a little flat cola will do) to make them think they are still getting real hootch!

Now there's a Dad that understands "market spin".

TownCrierFed still buying more Treasuries outright#1401371/5/06; 16:42:43

Following yesterday's outright purchase (monetization) of $844 million of government debt, the Federal Reserve was at it again today. [see yesterday msg#: 140076]

Today, depsite a tame fed funds market, the trading desk of the Federal Reserve bought another $448 million, upping the 'permanent' money supply in the process. This time the focus was upon TIPS across the spectrum, taking maturities from January 2007 to April 2032.

In additional open market operations today the Fed added temporary money through $11 billion in two-week repurchase agreements, and a further $5.75 billion via overnight repos.

When you see how easily money is made, you question the wisdom of various parties (especially foreigners and CBs) who have for so long been willing to hold onto it as though it were a reserve asset of particular merit.

To be sure, there was a time for it, but that time is now passing. The international move is onward to gold.


TownCrierKnallgold, that's odd...#1401381/5/06; 17:02:09

Just now I was scrolling through the forum and ran across my original post... where I now see I hadn't actually misspoke. Turns out that your translated quote was out of kilter, and it was that translation that I subsequently responded to.

[The 'Copy&Paste' feature of the mouse is a very quick and handy tool to avoid that sort of thing.]


silverton3Increase Margins#1401391/5/06; 17:41:06

Chicago Board of trade raised margins on Gold and Silver Futures.


The following margin changes are effective with the closing of business January 5, 2006.

I. Changes to Margins on CBOT Futures

From Initial/Maintenance/Hedge
To Initial/Maintenance/Hedge

100 Oz. Gold $1,418/$1,050/$1,050

Mini-Sized Gold $473/$350/$350

5000 Oz Silver $1,620/$1,200/$1,200 $1,823/$1,350/$1,350
Mini-Sized Silver $324/$240/$240 $365/$270/$270

In setting margins levels, the Chicago Board of Trade Margin Review Group along with the CME Clearing House monitors current and historical price movements covering short-term, intermediate and longer-term data using statistical and parametric and non-parametric analysis. Futures maintenance margin levels are typically set to cover at least the maximum one-day price move on 95% to 99% of the days during these time periods.

USAGOLD Daily Market ReportPage Update!#1401401/5/06; 18:04:42">
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

January 5 (from MarketWatch) -- Gold futures closed with a loss of over 1% Thursday after gaining more than $40 an ounce in the past eight sessions.

"Gold was overbought and the first quarter is a seasonally weak period for gold, so no surprise there's profit-taking," said Peter Grandich, editor of the Grandich Letter.

"But this powerful secular bull market in gold has a history of sharp but short corrections so any sustained weakness is not expected," he said.

The COMEX February contract has climbed $40.30 since its close at $495.30 on Dec. 21. On Wednesday, it traded at a three-week high on an intraday basis but closed at the highest level in almost 25 years.

The contract finished Thursday at $527.80, down $7.80 following a low of $524.

Indeed, "gold has [been] hit with a round of profit-taking as the dollar found some legs and crude is trading soft," said Charles Nedoss, an analyst at Peak Trading Group.

"Keep your seat belts buckled. It's going to a wild ride as volatility remains high," Nedoss warned.

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

TownCrierChina relaxing grip on dollar#1401411/5/06; 19:15:59

BEIJING, Jan 5 (Reuters) - China's foreign exchange regulator said on Thursday it would abolish foreign exchange quota limits for outbound investment as one of its key tasks in 2006.

It also said it planned to explore new ways of using China's foreign exchange reserves and broadening their investment scope. Most of the country's foreign exchange reserves, which hit $769 billion by end-September, are invested in U.S. Treasuries.

"We will abolish foreign exchange quota limits for outbound investment to give more support to companies investing overseas," the State Administration of Foreign Exchange said.

The move will offer a boon to domestic firms as they seek to strike out onto the world stage and help the country to offset a rapid accumulation of foreign exchange reserves.

...also reiterated the government's goal of reducing China's balance of payments surplus, saying it aimed to promote a balanced international payments position.

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

Take a moment and try to understand what this signifies that China is going to let its companies SPEND their earned dollars in the first place -- rather than having the People's Bank continue to ABSORB the dollars in exchange for renminbi.

Secondly, try to reconcile to your own satisfaction how the other two goals can work in harmony; one being that China wants to "broaden the investment scope" of its vast dollar-dominated foreign exchange reserves, and the other being that China wants to promote a "balanced international payments position".

Choosing gold (technically an import) is a NATURAL way to achieve a balancing of the books while at the same time sacrificing nothing with respect to the size and strength of their reserve position. In fact, with an eye to future performance of dollars vs. gold, with MTM gold they emerge all the stronger.

The transition to freegold... slowly happening right before your eyes, folks.


GoldiloxChina investment atmosphere#1401421/5/06; 19:39:14


Given how much China has invested in infrastructure, production, and resources in the last years, it's tough to tell if this release is a "continuation of a trend" or just an official announcement of something they've been doing for a while.

Huge purchases in Canadian and South American resource projects, large purchases of Boeing and John Deere equipment, and the offer for UnoCal are all indicative of them wanting to put some of those excess dollars to work. They may not be ready to stop propping up the US Treasury, but they sure aren't going to put all their eggs in that one basket.

TownCrierGoldi#1401431/5/06; 20:38:47

First there is the conception of a goal.

Then there are stirrings in the shadows.

Then there is writing on the wall.

Then there are headlines.

Then there are newscasts.

Then you one day awake and marvel at how so much could have happened 'overnight'.


PS. Flatliner, I liked your comments about TIME and the brew analogies that followed.

Flatliner@TownCrier and However…#1401441/5/06; 20:44:30

"International trade with that country will falter" – ah, yeah… That's what I wrote. Did I really mean that? Now that you've pointed it out, I'm not sure.

At the time I wrote that, I was thinking about long term business decisions. In an environment where the currency is unstable, business can't plan for the future with as much confidence as they can in a stable environment. In a stable environment, you can borrow currency at a known fixed rate and spend it over time knowing that it will depreciate at some small constant rate over the life of the loan. Likewise, and probably more important, the creditor can lend currency at a rate above inflation knowing that they will make a little profit. In an unstable environment, any money that you borrow, may not have the purchasing power in a few months that you'd planned your business around thus, driving you out of business. Or, credit just dries up because no one is willing lend - long.

Businesses usually need investment capital to grow, stay current and get more efficient. In a society where stability can not be found with the currency means that businesses will suffer. If business suffers, it's going to be really hard to actually manufacture something to export.

Also, everyone on the outside looking in is going to think twice before investing in a business in that type of environment. The risks are just too great. Sure, they will look for things to buy, but they will not invest.

So, in a Fiat system where the value of the currency is determined by the economy of that county, those in charge of printing the currency will want to think twice about how they manage it. If they print little, their currency will be strong for business attracting investment capital for long term decision making and fundamental business support. If they print a lot, they will undermine the ability for business to function in any long term fashion.

It seems that when it comes to exports and imports, it might be a matter of – does anyone want what they produce? If building the hottest car on the market will improve exports, then the country will have to have a monetary policy that will attract big business investment. Then, in time, exports will happen. (maybe…)

I'm glad you called me on that tidbit and I'm sure you'll call me on something that I've written here. Keep in mind that I am a student, at heart, and look forward to broadening my understanding though this change in this great forum.

Oh, two more things. I'm looking forward to the day when traveling with a gold coin is the norm and the compliments that I've seen lately in this forum. It has lightened the mood a little.

GoldendomeMore Middle Eastern intrigue#1401451/5/06; 22:41:42

Yesterday, saw the Israeli PM afflicted with a severe stroke, leaving him gravely ill.

Last night and today saw about an $8 drop in the gold price and a leveling off of the dollar after a big fall. Coincidence? Probably. But with the U.S.'s hands full in Iraq, it's been rumored that Israel might be the designated Iran attacker. An attack, we are told, that would be prompted by nuclear activity -- in the headlines, and by the Euro-oil bourse, on the back page.

Now with Prime Minister Sharon down and Israeli politics in a state of uncertainty, could the gold market be dropping the odds on an attack taking place? I don't know -- but it's only about 9 weeks away to the opening of that market (early March, I believe.)

Some have opined that some of the gold run-up of late, may be attributed to nervousness over the Iranian issues now and in March. If an attack is less likely, I would expect continued weakness for the dollar going forward, and growing strength for the Euro as more demand is anticipated for that currency; and hopefully, steady to rising gold prices.

GoldiloxNews sequence#1401461/5/06; 22:48:17

@ TC,

Ain't it the truth?

The Newshounds are nearly the last to know.

SundeckPersonal IOUs, FRNs and Gold. Nothing new...just a reminder.#1401471/5/06; 22:48:31

Supposing I met one of the knights or ladies from this round table and, after a bit of friendly banter, it was agreed that I should buy from them some item which we both valued.

It might be anything across the spectrum of human values, but we both agree that, whatever it be, it has value to each of us. Therefore the exchange involves an agreement within which I undertake to deliver to you (the knight or lady) something of comparable value as agreed between us.

I offer you four modes of settlement:

(1) an IOU written on a scrap of paper and signed by me,

(2) federal reserve notes totalling an agreed sum,

(3) a digital transfer to your bank account of agreed sum,

(4) pure gold of an agreed weight.

Which of these modes of settlement would you be most CONFIDENT in accepting?

(1) Personal IOU. Now, you don't know me from Adam.... and apart from my sparkling personality (capped by wit and an honest countenance) you have no way of knowing whether I would honour an IOU to be settled in the future. You, and most people, would consider this to be a very risky mode of settlement, but nonetheless one that may be chosen under certain circumstances. Still, nearly everyone would agree that this would be the riskiest of the four modes of settlement. One might say that your CONFIDENCE in the transaction would be low.

(2) Consider settlement with FRNs. If our chance encounter and our deal was conducted in the USA in present times, then most people would be comfortable accepting FRNs as settlement. Concerns that may arise include whether the notes were counterfeit; or that they may be the profits from the sale of stolen goods or illicit drug deals. There may be other concerns as well, but few people would worry (at least in present times) about the extra THIRD-PARTY RISK implicit in such a mode of settlement: that is, the risk of default by the backer of the notes - the Federal Treasury of the USA.

So trusted is this "legacy" arrangement, that I could offer you (a non-US National, say) US FRNs in many other countries (Costa Rica, Canada, Thailand, Mexico, Russia, to name several) and you may still be comfortable with the arrangement. Then, your additional concerns may include increased uncertainty about the authenticity of the notes, the inconvenience of being able to pass-on the notes in other personal transactions, or your ability to readily exchange them for local currency. Nonetheless, most people would consider this mode of settlement less risky than a simple paper IOU from me. Your CONFIDENCE would be higher than for a personal IOU, but in effect, whether you realised it or not, you would be accepting an IOU, not from unknown little-ol' me, but from the mighty Treasury of the USA. Not a difficult decision, you might think...

(3) Digital transfer. In this case, if you could witness the transfer and see that the balance of your account had altered accordingly, then you may be reasonably comfortable. You may have concerns about the authenticity of the details that you are viewing on the computer screen (from cyber-shysting of various kinds), but if you could overcome this, then your CONFIDENCE would be that which you have in your bank combined with that which you have in the US monetary system. In this case you are effectively refusing my paper IOU in prefernence for the IOU of the Federal Treasury as well as whatever guarantees are provided by your bank regarding digital transactions and accounts generally. Again, not a difficult decision, you might think...

(4) Gold in the hand. You would be rightly concerned that the "gold" I am giving you is pure and that the weight is correct. However, these are simple things to verify in this day and age...unlike hundreds of years ago. Upon my giving you the agreed weight, your CONFIDENCE would be that which you have in gold alone as a store of value. Perhaps there would still be concerns about theft or inadvertant loss (problems in common with FRNs or personal IOU), but there would be absolutely no second- or third-party risk associated with settlement. I could be eaten by a lion, your bank could fail, or the US Treasury could disappear into the sea and it would not affect the value of your transaction one iota.


Notice how I have emphasised CONFIDENCE in the above text...because it is confidence above everything else that underpins settlement; be it in the form of personal IOUs, government IOUs (FRNs), digital transfers of "nominal" FRNs, or gold itself.

It is largely because of this CONFIDENCE problem (that had to be overcome) that gold became the preferred means of settlement between traders... especially for trade with foreign lands. No problem with that...easy to understand.

What about the IOUs (the "currencies") of one country or another? These are inherently risky. Not only may their value be pushed and pulled by the enormous FX flows that course around the globe, but their value may also be altered arbitrarily by the custodians of the currencies involved - the national treasuries of the governments concerned.

Governments always act with their own interests in mind, so when you accept an IOU from another country you knowingly or unknowingly accept all of their idiosyncrasies. If they are loose or wiley in issueing you their debt, then you bear the risks...just as you would if you were dealing with me and one of my IOUs. And if they happen to carry a very large stick and have demonstrated a willingness to use it then you can whistle for settlement...just as you would have to do with Sundeck if he packed a pair of pearl-handle six-shooters and was a crack shot. fact, the IOUs of a nation may well be MORE RISKY than the simple IOUs of an unknown soul that you meet in a bar somewhere...and there may come a time (if it is not already here) where lowly Sundeck's IOU is held with greater confidence than the IOUs of the Federal Treasury of the USA.

Let me say that again..."There may come a time (if it is not already here) where lowly Sundeck's IOU is held with greater confidence than the IOUs of the Federal Treasury of the USA."

Nearly everyone would scoff at this, but it is true. Sundeck is unencumbered by debt, his honesty can be verified from numerous referees and he does not have a punitive arsenal with which to fend off, intimidate or destroy those coming to claim upon his IOUs. Sundeck's IOUs never overstate his worth and his credit is good. Unfortunately the same may no longer be said of the USA.

In truth, CONFIDENCE in the USA and its monetary system is eroding rapidly. It is being talked about more and more...not only behind the scenes, but in the mainstream media. Since most other monetary systems have been strongly coupled to the US dollar for fifty years or more, loss of confidence in the US dollar will likely infect these other "derivative" currencies. Indeed, the custodians of these other currencies may be unable to stand against the flow away from the US dollar - even if they wanted to...they may just have to go along with it. Under these circumstances it is tangible "things" (goods, sound businesses, commodities) - amongst which gold is pre-eminent - that will be sought by small and large players alike in exchange for the IOUs of all countries alike, but especially the IOUs of the USA.

Nothing new under the Sun here...



TownCrierSundeck, thanks for the continuing contributions#1401481/5/06; 23:27:14

Among the very finest.

(Usually it takes a contest to wrest such a gem from your desktop.)

If I ever owed you a compliment, it is now paid. Until the next time...


Knallgold@TC#1401491/5/06; 23:51:47

The arrgh was not your fault as you found out-when I copied this line,I changed a little bit intentionally (and noted that in my comment afterwards),in the hope of being able to make a point subcutaneously.Hmm,not sure if I failed.
LacklusterSundeck, your previous post#1401501/6/06; 05:14:48

Sundeck, I also liked your post. Very succinct. Perhaps you should, however, add a fifth, theoretical, payment option, that is, a currency that is backed by gold that is "marked to market". I say theoretical, because I am unsure if there is such a currency presently, unlike your other four options, which already exist. Towncrier, correct me if I'm wrong, but would that not be "freegold"?
Cavan ManTC:.......silly arguing and debating esoterica.....#1401511/6/06; 05:37:16

......and you miss something like this in the process. 'Tis akin to Nero's fiddling Mr. TC.

China signals reserves switch away from dollar
By Geoff Dyer in Shanghai and Andrew Balls in Washington
Published: January 5 2006 20:13 | Last updated: January 6 2006 02:43

China indicated on Thursday it could begin to diversify its rapidly growing foreign exchange reserves away from the US dollar and government bonds – a potential shift with significant implications for global financial and commodity markets.

Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback.

In a brief statement on its website, the government's foreign exchange regulator said one of its targets for 2006 was to "improve the operation and management of foreign exchange reserves and to actively explore more effective ways to utilise reserve assets".

It went on: "[The objective is] to improve the currency structure and asset structure of our foreign exchange reserves, and to continue to expand the investment area of reserves.

"We want to ensure that the use of foreign exchange reserves supports a national strategy, an open economy and the macro-economic adjustment."

The announcement came from the State Administration of Foreign Exchange (Safe). It gave no more details about whether this meant a big shift in the investment strategy for Chinese reserves, which according to local press reports reached nearly $800bn at the end of last year and are expected by economists to near $1,000bn this year.

The regulator also said it would end quotas on the amount of foreign currency Chinese companies can acquire to invest in overseas assets, a decision that removes a bureaucratic hurdle facing companies that plan to make international acquisitions.

The statement comes at a time of growing debate in China on how the reserves are invested. Some economists have called on Beijing to use the funds to finance infrastructure investment and clean up state-owned companies, or to invest in higher-yielding assets rather than financing US borrowing.

However, according to Stephen Green, economist for Standard Chartered in Shanghai, although the language was "vague", Thursday's statement was the first time Safe has publicly indicated a shift away from dollar assets.

"It is a subtle but clear signal that they are interested in moving away from the US dollar into other currencies, and are interested in setting up some kind of strategic commodity fund, maybe just for oil, but maybe for other commodities," he said.

The Group of Seven leading industrialised economies has repeatedly called for an adjustment in global trade imbalances, including a rise in the renminbi. The US has expressed frustration that China has not allowed its currency to rise significantly after last July's 2 per cent revaluation. That saw China move from a dollar peg to managing its currency against a basket of currencies, potentially allowing the renminbi to rise against the dollar.

John Snow, US Treasury secretary, speaking earlier on Thursday, repeated his call for China to allow the renminbi to rise against the dollar. "The trade deficit is influenced by lots of things, differential growth rates, differential savings rates and investment rates and so on. But clearly, getting the [Chinese currency] more appropriately valued will be helpful to the global adjustment process," he said.

However, some economists believe it would be a mistake for China to shift its reserves into domestic investment or other asset classes.


TownCrierCavan Man, if you weren't so busy looking for an excuse to tear me down...#1401521/6/06; 06:51:47

you might have noticed that I posted this yesterday at 7:15pm...
TownCrier (1/5/06; 19:15:59MT - msg#: 140141)
China relaxing grip on dollar

BEIJING, Jan 5 (Reuters) - China's foreign exchange regulator said on Thursday it would abolish foreign exchange quota limits for outbound investment as one of its key tasks in 2006.

It also said it planned to explore new ways of using China's foreign exchange reserves and broadening their investment scope. Most of the country's foreign exchange reserves, which hit $769 billion by end-September, are invested in U.S. Treasuries.

"We will abolish foreign exchange quota limits for outbound investment to give more support to companies investing overseas," the State Administration of Foreign Exchange said.

The move will offer a boon to domestic firms as they seek to strike out onto the world stage and help the country to offset a rapid accumulation of foreign exchange reserves.

...also reiterated the government's goal of reducing China's balance of payments surplus, saying it aimed to promote a balanced international payments position.
^---(from url)---^

Take a moment and try to understand what this signifies that China is going to let its companies SPEND their earned dollars in the first place -- rather than having the People's Bank continue to ABSORB the dollars in exchange for renminbi.

Secondly, try to reconcile to your own satisfaction how the other two goals can work in harmony; one being that China wants to "broaden the investment scope" of its vast dollar-dominated foreign exchange reserves, and the other being that China wants to promote a "balanced international payments position".

Choosing gold (technically an import) is a NATURAL way to achieve a balancing of the books while at the same time sacrificing nothing with respect to the size and strength of their reserve position. In fact, with an eye to future performance of dollars vs. gold, with MTM gold they emerge all the stronger.

The transition to freegold... slowly happening right before your eyes, folks.


Sorry for making this repeat, but I figure that it's better that some folks might see this news twice rather than risk having someone not see it at all.


TownCrierMile-high gold grab#1401531/6/06; 07:15:02

January 5, 2006 -- If flying wasn't already an exhilarating enough experience, passengers are now being offered a unique chance to win slabs of gold while in the air.

Under a new promotion, Cathay Pacific passengers have a five per cent chance of striking gold if they buy a box of chocolates during the flight.

A five-gram piece of the precious metal will be hidden in one in every twenty boxes of Goldkenn Goldbar chocolates, under the Hong Kong-based airline's new promotion.

...The airline, which will launch a Manchester to Hong Kong route in late March, says the promotion gels with its wider in-flight shopping drive.

The airline also recently launched a new pre-flight order website, allowing passengers to pick up their favourite duty free items during flights after ordering them online.

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

Gold takes to the friendly skies.

Maybe nation-hopping with gold in hand shall become as commonplace as packing your passport and toothpaste?


TownCrierInvestors sue Jim Rogers, firm over Refco transfers#1401541/6/06; 07:28:46

NEW YORK, Jan 4 (Reuters) - Two investors have sued prominent money manager Jim Rogers and his management firm over the transfer of "hundreds of millions of dollars" of assets to Refco Inc., the futures and commodities broker operating under bankruptcy protection.

They said the defendants improperly or negligently allowed the transfer of assets from regulated accounts to Refco's unregulated broker-dealer unit, Refco Capital Markets Ltd.

The plaintiffs are seeking to hold the defendants responsible for the loss of fund assets, or in the alternative for compensatory damages.

In October, the Rogers International Raw Materials Fund LP and Rogers Raw Materials Fund LP sued Refco for the immediate return of $362 million of assets.

Rogers was a co-founder of the Quantum Fund with another well-known investor, George Soros.

Refco filed for Chapter 11 protection from creditors last Oct. 17...

Refco has said it owes creditors $16.8 billion.

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

Some of the continuing fallout from derivatives giant, Refco, going bust this past autumn.

It makes for a good cautionary tale regarding monies put into an investment account, which brings into play a degree of counterparty risk.

Should something go badly anywhere along the links of the chain, you might be waiting a long time in litigation to have use of your digits (money) again.

With personal holdings of physical gold, those particular worries are gone, and you'll always have ready access to your personal property which is both highly portable and highly liquid for nearly any currency anywhere on the world scene.

Choose gold.


The Hoople$12 gold move- yowsers!#1401551/6/06; 09:02:19

Seems awful quiet around here to be in the midst of such a
ruckus raising day at the Comex. Those shorts that yesterday thought they were so smart are getting blown up 24 hours later. It's not nice messing with Mr. Trend.

Maybe a few (dozen) of those newsletter top-callers would like to once again say mea culpa to their clients. Poor Gartman, his disdain for gold bugs spiel once again proves to be a signal to buy. There must be a big move imminent to be this quiet around the chat sites.

I am getting even more "exciteder".

GoldiloxMile-High Grab#1401561/6/06; 09:12:03

@ TC and MK,

Maybe CPM could hide some chocolate in its gold orders as a "surprise"?

GoldiloxHUI Watch#1401571/6/06; 09:27:43

At 306.xx, the HUI has busted through 300 with a vengence. I suspected yesterday's gold attack wasn't very committed, when HUI reponded with only a slight loss.

If the web bots are on target, we have some very golden days ahead!

GoldiloxWe Be Toast#1401581/6/06; 09:35:29


An alert reader picks up "New Tipster of the Day honors for catching the the story that China has had it with the US Dollar and is about to go elsewhere for a reserve currency. "Well George this headline caught my eye this morning. Is this retaliation for the Fed talk of slowing or stopping interest rate hikes? Or do they know they have us boxed in and just telling the world we're pullin the trigger?" Something like that, yeah. With all the corruption floating around DC these days, the arrival of Peak Oil, and such, the inscrutable folks are probably right in thinking that except for the 17 financially hip people who read this site, no one else is going to get it. Meantime, we watch gold (up) and dollars (down).


See folks, TC is not the only one who thinks China's announcement is "good for gold". Lots of goodies at urbansurvival this morning. I think I'll post one more.

Cavan ManRandy....#1401591/6/06; 09:42:37

I'm a customer of this firm and I merely think you've gone a bit too far--my opinion based on reading and listening for a long time. All the best...CM
GoldnoviceBarrick#1401601/6/06; 09:47:00

It's been two weeks since I came across this extraordinary website, this treasure trove. There's enough in the archives for a lifetime of study. As befits my humble status as a newcomer to gold, my first ever internet post is a question. Was Barrick set up primarily to supply the Arabs with gold? If we assume that is so, then everything about the company falls into place, I mean everything. Or has the forum exhausted this topic already?
GoldiloxShopkeeper Economics, Redux#1401611/6/06; 09:58:05


As the Labor Department issued its latest report on unemployment (a tich better 4.9% in December) we have to recall that hundreds of thousands of out of work and under-employed are not counted thanks to handy-dandy "make it good" statistical techniques.
Total nonfarm payroll employment increased by 108,000 in December, and the unemployment rate was little changed at 4.9 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The December in- crease in payroll employment followed a gain of 305,000 in November (as re- vised). Several industries added jobs over the month, including food serv- ices, professional and business services, health care, and manufacturing.

Unemployment (Household Survey Data)

Both the unemployment rate, 4.9 percent, and the number of unemployed per- sons, 7.4 million, were little changed in December. The unemployment rate has ranged from 4.9 to 5.1 percent since March.

The unemployment rates for adult men (4.3 percent), adult women (4.5 per- cent), whites (4.3 percent), and Hispanics or Latinos (6.0 percent) showed little or no change in December. The jobless rates for teenagers (15.2 per- cent) and blacks (9.3 percent) declined over the month; the rate for black teenagers had an unusual large decline and fell to 24.4 percent.

Even our U-12 (Alternative Measures of Labor Under utilization) improved a tad. Why is this? Genuine improvement? Well, let's see, first we notice that the civilian labor force was reduced by 30-thousand....and a smaller denominator does what?


Now you just need to be unemployed for more than 12 months to be considered "permanently off the labor rolls," as evidenced by the 30K reduction in labor force - or has the BLS let slip the "real number" of US Gulf Region workers that expired in September?"

It also keeps the public bulls-eye off of the serious employment issues around the nation, as foreign operating "no-bid contractors" suck up the gubmint "investment trough" for oil adventures, and foreign labor is imported to do sub-code reconstruction in the Gulf Region.

One [good/bad] thing about perp hunting in Washington. The Supremes should be well practiced from their complimentary participation in "Cheney's Hunting Junkets", though we'll see if their bird hunting experiences inspire a "shotgun" approach.

SurvivorFreegold Dialogue Spreads Its Wings#1401621/6/06; 10:01:51

This, from a Doug Horning commentary at the neighboring castle. First time I've noticed the "free" word associated with gold outside our fine round table:

David Vaughn, in his Gold Letter, caught the mood of the market yesterday when he wrote: "Well, for those worried about gold having reached a rally high & are now worried about a quick retreat south again – that ain't goin’ to happen . . .What we are observing now is a ‘free’ gold price acclimating itself to the true market forces of supply & demand."
-end snip-

A golden Friday to all.

- Survivor

White RoseI have my own theory about Barrick#1401631/6/06; 10:05:19

Barrick was set up by Saudi billionaire oil and arms trader Adnan Khashoggi as part of a scheme to bankrupt the Soviet Union. When central banks sell gold, it raises the price of gold (less overhang on the market). When newly mined gold shows up, it lowers the price of gold (new supply). I think that Barrick has been a conduit to take borrowed central bank gold and sell it into the marketplace as if it was newly mined gold.

Yes, quite a bit of that gold probably went to the Saudis. Part of the "bankrupt the Soviet Union" plan is characterized as "convincing the Saudis to lower the price of oil for a few years". What better way than to offer the Saudis a new supply of gold real cheap.

It worked. The Soviet Union went bust.

Then the central banks needed their gold back. This is where Barrick started selling gold "in advance". They have been trying to avoid having cough up much real gold.

Yes, there has been some real mining going on.

But think about it. Why do they need the ex-prime minister of Canada and the ex-president of the USA and a raft of JP Morgan lawyers on the board if they are doing business the straight and narrow.

An excellet topic.

GoldiloxBarrick Arabia#1401641/6/06; 10:10:30

@ Goldnovice,

Welcome aboard. That's a pretty loaded first question. Do you know of any reference support for this theory?

As Smeagol might say, "We likes to read almost as much as we likes to talk."

Belgian@Goldnovice#1401651/6/06; 10:11:14

The answer is definitely "YES", Sir, without any doubt !
And it is not only Barrick gold. The evidence remains well hidden within the echelons of the internationalist goldcartel web (synarchists).
A -novice-...asking such a question...humhum :)-(:

Smeagol(snicker)#1401661/6/06; 10:16:29

Yess, Ssir Goldilox! The amount of information we limited only by our sspeed of taking it in.

We jusst wishes we had total RECALL! (cackle)


GoldnoviceBarrick#1401671/6/06; 10:17:04

@ goldilox, White Rose, Belgian

No. No support reference for the theory. Just thought of it myself after reading several oldish articles about Barrick's texas hedges, which only make sense in such a scenario (or something similar).

GoldiloxBarrick#1401681/6/06; 10:18:10

@ Goldnovice and White Rose,

"Ask and it shall be given."

And we all thought Barrick was common pond scum - from your info, it seems they are "official" pond scum.

GoldiloxTotal Recall#1401691/6/06; 10:19:59

One of the Governators' best. We wishes he would go back to his core business and leave the pond scumming to the professionals.
Flatliner@Goldnovice#1401701/6/06; 10:20:21

It seems that you may be new here, but it's obvious that you have some background that has helped you formulate this question with such precision. I have time. I'm sure many hear do also. I'm sure all would love to learn how you came to such a conclusion.

Please... share.

Belgian@White Rose#1401711/6/06; 10:22:18

You still remain convinced that CBs are ignorant idiots and bullion banks are the enlightened ones. Soon you will find out that it is exactly the other way around.
TownCrierCavan Man,#1401721/6/06; 10:30:13

As you well know, I'm not the host of this fine establishment, and therefore I'm not under any delusion that any amount of respect whatsoever in my direction is warranted. However, I would have hoped it was not too much to expect a basic courtesy, such as might be shown to the butler during your visit.

Nero? Nero???!

For the life of me I can't understand why you'd go out of your way to take a poke at me. Clearly I didn't miss the Chinese diversification news, as I have already demonstrated.

In fact, back on December 27th, prior to this announcement, I offered these following comments in association with a short news article reporting that the buildup of Chinese forex reserves had slowed sharply according to November's data. I commented...
TownCrier (12/27/05; 11:41:07MT - msg#: 139747)
SHANGHAI, Dec 27 (Reuters) - China's foreign currency reserves rose at the slowest pace in 18 months in November, an official newspaper reported on Tuesday... Still, the $9.3 billion increase boosted the reserves, the world's biggest after Japan's, to a record $794.2 billion, the China Business News said, citing sources familiar with the data....

[Randy's comment following article>>>]...Consider this. When China absorbs dollars (and ultimately interest-bearing dollar-denominated bonds) as the concluding balance of payment for its international trade surplus, there follows political harping of tensions over perceptions of unfair currency exchange alignments and unfair competitive advantage as evidenced by the trade surplus. Or so the argument goes.

A tidy remedy exists to put an end to this petty sort of grousing over international monetary and trade issues. China need take only one additional step in the process. Rather than concluding its balance-of-payments dollar inflows with an absorption of U.S. bonds, China instead ought to use those same dollars to bid for gold. Imbalanced trade would thereby be concluded with a physical good, and thus would the technical spotlight upon trade flows be dimmed as China could validly argue that it has erased its trade surplus, and right along with it any further need to deal with political sensitivities over its forex handling of its monthly excess dollar inflows -- as these, too, would concurrently be eliminated.


So, Cavan Man, with those bases nicely covered, I don't know why you're faulting me for doing my part to stimulate a lively conversation. I'm merely doing my part helping to show people that, despite our new discussion guidelines that narrow the scope of discussion to gold-related matters, there remains an endless degree to which additional thought and discussion can be beneficial. Are you suggesting that the various participants in that discussion were wasting everyone's time and space, including their own? Are you speaking on behalf of all readers?

How can we expect anybody to decide upon and justify their own portfolio's satisfactory percentage of gold diversification if we don't allow ourselves to fully consider the very nature of money, the nature of savings, and how these concepts must accommodate the evolving nature of monetary, financial, and investment markets?

Sometimes I wonder why I even try.


GoldnoviceBarrick#1401741/6/06; 10:34:47

@ Flatliner
Okay, will try. It's been ten years since I moved from Australia to this gold-loving country of Vietnam - the perfect place to realize the importance of the metal. Heavens, even the houses are priced in gold (so with the rising POG, the property market is as dead as a dodo). My gold background is simple: about a year ago, I made a decision to learn about economics and finance, subjects that had been utterly outside my experience in 40 years of life. As I read article after article from the internet, making sure to consider opposing views, I am starting to make sense of the world and understand about gold, but it's hard going. Why did gold capture my fancy? I don't know but I'm happy that it has (and started buying six months ago). No, I'm no-one special who can enlighten the forum, just someone who can learn a great deal from it.

USAGOLD / Centennial Precious Metals, Inc.New to gold? Enter the market with grace and confidence; assets and info to get you started right!#1401751/6/06; 10:38:04">gold ownership starter kit
GoldnoviceBarrick conclusion#1401761/6/06; 10:43:05

@ flatliner

1. The Arabs love gold, always have

2. From 1971, they can no longer get it for US$35 an ounce so they have to go into the (black) marketplace, hence the oil crisis

3. Less gold available so forward selling begins in earnest (if I have that right)

4. By the 1990s the situation is getting desperate, hence the formation of Barrick

SmeagolNever ssay never...#1401771/6/06; 10:47:50

"No, I'm no-one special who can enlighten the forum, just someone who can learn a great deal from it." - Goldnovice

We did not know houses in Vietnam were priced in It, until you enlightened is good to have gold-information from all over the any form. Welcome!


GoldnoviceThanks#1401781/6/06; 10:52:11

@ Smeagol et al

thanks for the kind reception

FlatlinerHouses priced in gold.#1401791/6/06; 11:05:04

Goldnovice, I did read an article a while back about housing market in Vietnam and how the rising price of gold put a damper on home sales. The question that I had regarding gold for houses was how they structured the actual deal. Do you have experience with how these deals are structured? For instance, is a house simply valued at a particular number of ounces and to buy it, you deliver that weight of gold? Or, do people go in debt to acquire the house? If they do, how is that debt structured? Do they comment to deliver x ounces (where x equals the sale price of house in gold) over time? I guess I'm curious what the value of time is with that transaction. Do they deliver x+y gold over time? (Where y is interest paid in gold).

This question may seem obvious to some, but, if gold really does find a little respect from common people, I would expect that most all significant purchases will someone revolve around gold. Thus, I would like to understand how these deals are structured. Thanks in advance.

GoldiloxAll in the Delivery#1401801/6/06; 11:12:31


If I may be so bold as to stick my nose in other's business, it seems CM was more concerned with tone than context - though his was perhaps not flawless. Judging from recent interchanges with Cobra(too) and Rich P, discussions seem to have gotten more personal of late.

I'm not laying blame, just observing the trend.

A wise man recently reminded me that "Can I help you?" and "What the f' do you want" are two very different ways of asking the same question, as I often suffer from "foot in mouth, then shoot foot" disease.

GoldnoviceVietnamese and gold#1401811/6/06; 11:18:47


This is mainly a cash economy in Vietnam, so the transactions are done in one go. Housing loans are very rare. If you buy a house, the seller will either choose gold itself or the cash equivalent, but either way it's usually done at a bank (gold accounts are common, though I would never use one since the banks sell much of the "deposited" gold to the jewelry trade - better to hide your gold somewhere safe). Anyway, the entire amount for the house is paid in one go, as we did when gold was near the bottom (very useful having a Vietnamese wife who understands all these things). I've never heard of an extended payment for a house in this part of the world.

Of course, if someone buys a house for, say, 500 taels of gold (one tael is roughly 1.2 troy oz.), they'll never want to sell it for less. That's why the property market is stagnant over here, and likely to stay that way as the POG keeps climbing.

GoldnoviceVietnamese and gold#1401821/6/06; 11:22:45

Flatliner; Oh, and yes, the Vietnamese people feel a tremendous affinity with gold. There are jewelry shops everywhere, and the merchandise is nearly all yellow, and the women wear gold all the time, not just on special occasions - bracelete, earrings, necklaces.
TownCrierGoldilox, tone#1401851/6/06; 11:30:34

I think you'll agree that the particular mindset of the reader governs a great deal of the "tone" that they derive from an otherwise flattish monotone of type-written words.

In the course of a discourse, what may have been delivered in a patiently cool and insistent emotional state by the typist may be received as the same by one reader, as a weak-kneed rebuttal by another, a condecending lecture by another, as unflagging aggression by another, as badgering by another, as boring pedantic blather by another, etc, etc...

Back to gold... setting a new 25-yr closing high today.


GoldnovicePOG#1401861/6/06; 11:37:07

Is it too much to expect another concerted effort to drive down the POG? After all, a fall to $450 would crush the vast majority of new gold investors, who would vow never to touch it again. I'd feel much happier about buying below $500 but will buy more anyway.

Belgian, perhaps both the central bankers and the bullion bankers know exactly what they are doing. It's usually easier to think by starting from this premise.

Flatliner@Vietnamese and gold#1401871/6/06; 11:47:23

It will be most interesting to hear from you over the coming months as the value of gold goes up and to see how that relates to people's thinking in Vietnam. It seems that they have already leaned towards holding gold with expectations that the exchange, gold for houses, will be much less heavy in the near future.

As with regards to time, it would appear that trust is not an option in the deal. I would drive that right back to Sundeck's posting yesterday. It seems like the Vietnam people have a working situation where option 4 is the choice of preference.

GoldiloxTone#1401881/6/06; 11:51:53

Always an issue online. No blame intended. We just defused a similar customer miscommunication in my business this morning.

And yes, today's gold movement certainly sets the "tone" for the shortsters!

"Get off the tracks, the g-train is a'rollin'!"

GoldnoviceVietnam#1401891/6/06; 12:00:17

Flatliner, the houses are valued in gold, but the physical metal does not make an appearance when a house vendor and a buyer do their transaction at a bank. The seller's gold account is simply credited with the amount. Of course, the seller can then withdraw the physical metal. There will always be enough in such circumstances. But if there was a run on gold "deposits" I'm sure most people would miss out as the gold is merely "unallocated" and hence part of the bank's reserve assets, as it is elsewhere in the world. As so many people keep saying, get physical!

Any more opinions on Barrick?

Flatliner@ Vietnam#1401901/6/06; 12:10:00

"There will always be enough in such circumstances." Ah ha ha ha ha ha ha…

Ah, my friends, you may never sell your gold again.

USAGOLD Daily Market ReportPage Update!#1401911/6/06; 12:46:00">
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 up $13.40 today, over $22 on week

January 6 (from MarketWatch) -- COMEX February contracts closed at $541.20 after touching an intraday high of $541.80. Prices haven't closed at a level this high since March 1981, though on an intraday basis, they touched $543 on Dec. 12 of last year.

The contract finished up $13.40 for the session and up $22.30, or 4.3%, for the week.

China said Thursday that it would diversify its foreign-exchange reserves away from U.S. dollars and government bonds.

"China's announcement of wanting to diversify their foreign-exchange reserves holdings is going to have a profound effect on financial markets worldwide," said Peter Grandich, editor of the Grandich Letter.

"It's the death blow to the U.S. dollar, which had enjoyed a temporary reprieve in 2005, and another bullish factor for gold going forward," he said.

Also, "disappointing U.S. employment numbers spooked the dollar, and in turn boosted gold prices on its traditional inverse relationship," said Matthew Parry, an economist at

The dollar fell to its lowest against the yen Friday since mid-October.

"Diversifying away from dollars has become desirable -- retail investors returned to the precious metals arena in droves this week," said Jon Nadler, an investment products analyst at bullion dealers Kitco. "Low yields on cash and negative real interest rates are adding fuel to this quest for adding gold and silver to one's portfolio," he said.

However, "it is still mostly the fundamental picture of sluggish supply and robust demand plus the prospects for weakness in the dollar that are the engines of this latest spike in prices."

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

GoldiloxDOW flirts with 11K#1401921/6/06; 13:11:24

Ok, fine.

I'll just hope that predictions of DOW=POG happen before the DOW falls on its sword!

GoldiloxCNBC gold "bug"#1401931/6/06; 13:16:48

I love how they have changed their "screen bug" to reflect the price change since the 1PM close of COMIX instead of the daily change.

Gold $540.6 DOWN 0.60

As the Mogambo would say, "HAHAHAHAHAHA!"

melda laureSkip the dramamine, pass me the old toby#1401941/6/06; 13:20:58

The California style market: chock full o' fruits and nuts. Yes but the first five trading days arent' over til monday....

We wonders... we wonders... two massive POG peaks so close together...

melda laure(No Subject)#1401951/6/06; 13:30:26

"Is it too much to expect another concerted effort to drive down the POG?" Short answer: No.

Longer answer: those whose plan is to accquire a slightly bigger pile (and who already have a nice little pile) can afford to wait a few months after such suface waves; we're riding the big one already (the subsurface wave)

Belgian@Goldnovice#1401961/6/06; 16:32:26

I agree, that the short selling bullion bankers do know for sure that they can count for 100% on a bail out in any case and circumstances. Their job was to BUY precious time. Not "that" smart imo, but they had no other choices left. The CBs that organized, ...paved the way...for freegold, are somewhat smarter.

Knocking the $-goldprice back to $450 would tell us that the old $ goldregime still has some power left and more importantly, is allowed to use it for buying some more time. But I suspect that Asia (China) wants to do something about the imbalances. In particular the $-reserves. The more so, now that the dollar expansion has all the green lights it could ever dream of. This morning, a CNBC-Europ anchor also said that everything is possible with gold...even a $ goldprice of $3,000/Oz (3 thousand).
But he was still reasoning with the "old" gold logics.

Today, we see > Dow + euro + gold and oilprices UP ! Is very strong evidence for helicopter dollars assisted with massive economic peptalk. I would be extremely surprised to see $-POG reach $450 ever again.

Flatliner@Vietnam and gold on reserve#1401971/6/06; 16:40:58

Can't help but revisit post 140189 from Goldnovice. I've selected a small section of the words while hoping to not change the context. "But if there was a run on gold "deposits" I'm sure most people would miss out as the gold is merely "unallocated" and hence part of the bank's reserve assets, as it is elsewhere in the world."

The "as it is elsewhere in the world" is part of what I've been searching to understand for a while. You see, I live in the USofA. To you, that might qualify as ‘elsewhere’. Here, banks do NOT hold gold on reserve! They don't want it and they don't value it in the slightest. If you go to the bank to try to get a secured loan using gold as collateral – you'll be laughed back out into the street. All they want to deal in is paper or better yet, digital ‘money’. Here, believe it or not, to most every citizen, the dollar is actually better then gold and more secure! It can actually be insured up to 100k in one account. The people here have bought that program to such a depth that even though we have one of the strongest currencies in the world, people just will not buy gold with it – they truly believe that there is no need to do so. Money in the bank is insured by the government up to 100k! What's better then that? Paper, in all its forms, is what banks here deal with.

Also, the "if there was a run" part is also interesting. Here, in my ‘great’ country, reserves in banks are next to non-existent. A small bank with up to 56 million on loans needs virtually no reserves. As the bank grows larger, the reserve percentage goes up but, across the board, the percentage is small. Why? Because any run on the bank is just a digital transfer away. Believe it or not, part if the strength here is that there is no gold on reserve. About the closest thing we see towards bank runs can be seen with what happened to Refco a couple months ago. But, what's interesting here is that because there really wasn't anything tangible behind that run, anything lost could be covered with a cheap promise from a few banks or potential buyers.

"Deposits" is also quoted here. Does that mean that money in Vietnam is convertible? You know, like the old gold standard that people here wish for? Or, if you deposit gold in the bank you can get gold out and if you deposit currency in the bank you get currency out. Is that how it works? I am truly curious.

As a side note, gold gets so little respect in the USofA that when you spell out the advantages of owning gold to someone, they will always ask "where do you buy gold?" The concept is *so* lost, that people have even separated the concept of jewelry and gold! Going to the jeweler doesn't even come to mind. Then, when you finally tell them where it can be found for reasonable prices (like from our great host) they then get all nervous because they as so scared that they will lose dollars! Ah! Sometimes, I think The Great Mogambo is right, we're doomed.

Main thing to note here is that not all places treat gold the same way. Another thing is that the banking system in the US does not value gold.

One last thing before departing for a labor intensive weekend, it seems that the plan of a soft economic landing in the US just means to me that gold will get more expensive. If the fed is able to perform such an act, it will be like confiscating gold once again by making it harder to purchase. This time though, no one will object because they truly don't value it here. The only squeals of protest heard, will be from people complaining about globalization and how they now have to put the kids to work in order to make the mortgage payment. And, even when they do, they'll shrug and say "It's just the way things are now. By the way, did you see Dancing with the Stars last night? Oh man, don't you love those outfits?"

If you have all not noticed, I am completely sold on the idea of not letting the bank hold any reserve for me. If a Vietnamese citizen were prudent, I would guess that they would continue to wear their reserve.

Now, I think I'll try to find something really bad that happened to someone else so I won't feel so depressed.

silverton3Monday, 8AM#1401981/6/06; 16:45:18

Will we wake up to GOLD 550. A little slip in the dollar and we could be there. Overseas they will not be looking at the same dollar charts we are, so they may not have resistance selling at 543.

GOOD MORNING GOLD! Wish it was monday. Now I have to wait.

GoldendomeHave the "Newshour" pundits eaten their Crow? We'll hear.#1401991/6/06; 17:35:50

We will be listening in to James Puplava's Financial Sense Newshour this week, to hear whether or not he and Frank Barbera ate -- and in fact -- filled up on "Crow", over the long holidays.

Surprisingly, they were slammin' gold pretty hard (short term) on the show dated Dec. 17th., looking for gold to drop to 470 or lower by February; gold was 505.70 as of the show date, having dropped from the earlier December high. I don't believe that it went lower after their call to sell. Made me think at the time, that they had sold at the high, then wanted everyone else to sell behind them, bringing the market down to where they would want to buy again. (I know that's just suspicion and cynicism, but hey! stuff happens.)

That's not to say that we couldn't have the seasonal correction that we've seen in the past few years in the early months of the year (Smeagol, has written of it lately.) But right now, they've sure missed in the short term, on their "top" call.

Funny to go back and hear Frank say that the market had run-up to fast; he felt it necessary to sell and be on the sidelines until some of the "weaker hands" had been shaken out of the gold market. Ha! I guess they were Frank -- Yours and Jim's.

David LinkleyWhen will da boys cover?#1402001/6/06; 17:41:40

The COT or commercials are supposed to be infallible when it comes to trading because they "are the market." Everyone knows they are the "smart money." After watching them trade oil, the dollar and gold the past 2 years one has to wonder if they really aren't the dumb money. As MK has mentioned in the past maybe these huge losses sustained over the past several years are really the cost of doing business.

Anyway you look at it the table is set for commodity inflation not seen since the 70's. Helicoper Ben will try to get the Republicans through the mid-term elections by supporting the economy and the DOW with huge liquidity injections (reason #1 why M-3 reporting is gone), since Eastern central banks are buying gold along with the world smart money and the dim central bankers in the West are selling combined with falling production the price of gold is going much higher than people think.

One has to wonder if the covering of gold shorts is even possible. Cash settlements are really the only way out as even smaller investors are beginning to ask if they too should own some gold? The COT is out of luck and gold could spike at any time regardless how severe any correction may be. Don't wait, get it now while its still cheap.

We may disagree on this board about what is now occurring in the big picture world economic scene, but we all agree on the necessity of owning physical gold in your possession as the coming economic crisis hits.

SmeagolDat ole seasonal weakness#1402011/6/06; 17:50:10

Sss...if we do NOT ssee the typical seasonal pattern, precious...that will sspeak volumes!


SundeckCatching up on Saturday morning in Oz...Sundry issues (Saturdry issues, actually...Ouch!!)#1402021/6/06; 18:35:39

Nice PM move...suspect there may be more in the pipeline...

@TC #140148 Thanks... you're welcome.

@Lacklustre #140150 Mmmmm...a currency backed by MTM gold? "Backed" in the sense that it is redeemable for gold? Not sure what you would have there...

Call this hypothetical currency the "Bernankor" (B). Suppose initially that B100 are exchangeable for 1 oz of gold, then:

In a closed economy/financial system, if treasury expands B supply willy-nilly (too rapidly), people who hold gold and who wish to acquire Bs for "normal" commerce will see the B-value of their gold eroding and will demand more than B100 per ounce of gold. Simultaneously, people with surplus Bs will rush to exchange these inflated Bs for gold (or other "things") - like the French did with the US-dollar in the '60s. These two thrusts will drive up the POG in Bs (along with the price of just about everything else). Hence MTM gold will rise in price, as will many other things. The detailed trajectory of the POG will depend upon gold's relative importance (perception) in the mix of things that characterise the diverse economy over time, as well as upon the change in the gold supply.

I don't really understand what would happen in the full complexity of an open economy/financial-system where international pressures are involved. However, my feeling is that "backing" a currency with gold (in the strict redeemable sense) is not what is meant by "free gold" - better to let gold run its course separately and find its own level internationally. Gold then may play its role in an MTM reserve sense, as in the concept of the Euro.

Maintaining a rigid relationship, even a MTM one as you suggest, between a currency and gold introduces stresses within the fabrics of economies and financial systems that probably inevitably lead to failure.

Just my first quick thoughts...

@Goldnovice et al., Reference Vietnamese houses "priced" in gold.

Now, there seems to be something schizophrenic going on here...

If houses are quoted in gold ounces, then that would seem to me to be an attempt by Vietnam to couple the VALUES of houses and gold together...rather like "backing" a currency with gold.

Coupling houses and gold may not be a bad idea in a highly regulated environment, but in real systems things have a tendency to follow independent the supply an demand for houses and gold follow separate trajectories.

In the "west", house prices have increased 50-60 times since 1970 while gold in US dollars has increased only about 15 times. (What has been the situation in Vietnam?)

If the housing market is stagnating as the price of gold (in US Ddollars, and in Vietnamese Dong) is increasing,

does this mean that people are trading their gold for dong (or dollars) and spending on things other than houses?

Somewhat the opposite seems to have been happening in western countries (Australia, UK, US) where people have been spending their dollars and pounds on houses lickitty-split, forcing up the price of houses (inflation manifesting preferentially in housing)...then redrawing their "equity" and spending again (on houses and other retail items).

Without knowing anything about differences in "mercantile sentiment" between the US (say) and Vietnam, I suspect that there may be great differences in the way a "house" is perceived in the US (status symbol, etc) versus Vietnam??? But I am only guessing, and I am sorry that these thoughts are a bit garbled...


Flatliner@Reference Vietnamese houses "priced" in gold#1402031/6/06; 19:06:56

Sundeck, There is another point in the post by Goldnovice that is radically different that what many are used to in the (wild) west. That is, these people do not go into debt to get their house. Thus, drawing out equity wouldn't seem like an option. It's a straight across value for value exchange that's a one time deal. I would think that if this were the case, these people would thing long and hard about the place they purchase, because if they can't sell it, they are out their gold. Their family could be stuck there for years.

Could you imagine someone in the US getting a house if they had to buy it with gold? … I don't think so! 99% of this country would be homeless *and* goldless at the same time.

Also, I think we both, at first glace, thought that the government might be involved with pricing houses in gold as if the monetary system were backed by houses. But, after reading it a few times, I believe that it is the people that value houses and gold together. If they make a bad investment, they will get less gold back when (if) they sell it. The problem is that if one of the two items changes in value, they will have to rethink the exchange. If one suddenly becomes more valuable, it may be that houses will start selling again when the original buyer realizes that 50 coins have the same value as 500. But, until that change can occur, no one is going to sell a house because those holding gold will not give it up at this point.

I think Belgian would like this value for value comparison for gold. No?

MKMr. Linkley#1402041/6/06; 20:11:33

Thanks for reminding us what we all have in common here. Sometimes we get so locked up in our differences that we forget why we came here in the first place. I think if we were to acknowledge starting points and what drives us together, it could be summarized as follows: It is still the case that if you were to bring up gold in a crowded room, 95% would flee, 4% would be curious enough to ask a question or two, a 1% might ask who you use for a broker. That's in a time when gold investors have made incredible gains, when most of what we had prophesied has come to pass and those who have put their money in other markets have for the most part taken a merciless beating. My point is that we ought to count our blessings, give the other guy better than an even break (at least here at the Table Round), and perhaps consider that we should ourselves cultivate and preserve ( for our own use) whatever small piece of ground we have been able to garner. Friendships, even those internet based, are worth holding for the long term -- like gold itself.

Speaking of differences, I heard from a friend today that James Sinclair says that gold is going to $750 at the top this year. I beg to differ with the illustrious Mr. Sinclair, but I think it's going to $760. I wonder what you might have left out of the analysis that would have brought you to the right number.

And thanks, David Linkley. For reminding us all of our roots.

Gandalf the WhiteLook at the "POOR" US$ chart !#1402051/6/06; 21:03:33

You can "size" this chart to the last "Five Trading Days" and see the "BIG SLIDE" --- OR just look at today's chart and see the FAB BEAUTIFUL WATERFALL !

Gandalf the WhiteSIR MK #1402061/6/06; 21:13:40

The "Wiz" sees the POG at $755 in his Crystal Ball !

GoldendomeTo the dearly departed.#1402071/6/06; 23:20:28

by Bill Bonner

Mercy Otis Warren on the ratification of the Constitution in 1788:

"When fortune throw[s] her gifts into the lap of fools, let the sublimer characters, the philosophic lovers of freedom who have wept over her exit, retire to the calm shades of contemplation, there they may look down with pity on the inconsistency of human nature, the revolutions of states; the rise of kingdoms, and the fall of empires."

We warn our dear readers. What follows is more of a churlish lament than a real forecast. As we have confessed more than once, and proven more often, we get the news no sooner than anyone else. Still, we have two advantages over most forecasters: We know our limitations, and we don't watch television.

So, today, we begin by describing the world, not as it will be, but as we think it is. It is a world where individuals who mind their own business can live better than at any time in history. Painless dentistry, air-conditioning, automobiles, the Internet - we are humbled by the majesty of our own creations. Year after year there are more of them. Now we can eat pineapple in London in the wintertime. We can read books written by dead Chinese scholars in our native languages. We can chat with a friend on the other side of the globe, at almost no expense. And we can have an erection where and when we want one (so we are told), thanks to the wonders of modern biochemistry, rather than the mysteries of old-fashioned hoochie coochie. The thought of it is almost too much for us. We swoon, and ask the gods: what next?

While the progress of the world swells up before our eyes, we turn our eyes to the newspaper and wonder what has gone wrong, for there is the story of 100 dead in Iraq. Reading more carefully, we find that the news from Iraq could have been written 100 years ago, when the British Empire was fighting insurgents in the area. It could have been written nearly 1000 years ago, when Baghdad was under assault from the Great Khan. We also might have read it 2,000 years ago, when similar battles were fought with the Romans.

Has nothing changed? Why is our own Texas Tiberius repeating the errors made by virtually every empire that ever was: pushing beyond the limits of its resources, until it finally falls apart? And he does so at the very moment when life seems so sweet in so many ways. We Americans can barely brush our teeth often enough.

Alas, dear reader, while we enjoy real progress in matters of technology, in matters of psychology we remain the same as we always were: prone to panic, backsliding and humbug.

Which is why we expect little from 2006. Technology improves with the passage of time; psychology oscillates like the seasons. While we are sure that the year will bring marvelous new gadgets, we doubt that it will bring marvelous improvements in our mental state. We have enjoyed a long season of calm, comfort and conceit. Bitter weather must follow, as it always does.

Returning to the occupation of Iraq, what should we expect? More bad news is our guess. Psychologically, the nation is sliding down from the peak of "bring 'em on" optimism. It is becoming obvious that the war benefits only two groups: Osama bin Laden and his gang, who were happy to see the posse head off in another direction...and certain well-placed defense contractors. The former, bin Laden's bunch, are presumably holed up in a cave somewhere. But the latter are living it up in New York. The International Herald Tribune ratted out David Brooks, of DHB Industries, maker of bulletproof vests for the military. The vests are worn by the poor grunts sent on Mr. Bush's fool's errand. Mr. Brooks wears silk. The IHT describes a private party for the vest-maker's daughter, held at the Rainbow Room at Rockefeller Center:

"The bash was headlined by a list of performers that could easily have carried the Super Bowl halftime extravaganza. The superstar rapper 50 Cent and the front men from the rock group Aerosmith were among the night's many performers. According to the The Daily News in New York, the party [cost] $10 million..."

Brooks can afford it. Prior to the Bush administration's war to make the world safe for democracy, the man made $525,000 a year. In 2004, thanks to fat government contracts, he made $256 million, in compensation and stock sales.

Good for him. But we suspect that fewer Americans will want to sacrifice their sons and daughters in 2006 so that Mr. Brooks can get rich. In fact, we expect the average working stiff to go a little sour in the year ahead. He's been losing ground for the last three decades. His wife went to work to help pay the bills, and then he borrowed money to keep spending. But this is the year when the bills begin to pinch.

Home sales will be down 6% to 8% in 2006, says Fannie Mae. Wal-Mart just reported its smallest December sales gain in five years. Auto sales for the Big Three were all off in December. And even, "truck sales stumble in '05," says AFP.

It may be true that the new, globalized economy helps everyone get richer. The trouble is that the riches do not fall on all voters equally. The rich - those who own financial assets, and those whose labor is protected from Asian competition - are getting richer. The poor are getting poorer. When the poor finally realize it, they aren't going to like it, and 2006 may be the year they begin to wise up:

"Millions brace for credit card crunch," says a CBS headline.

But the lower and middle classes can do nothing about it. They are the ones who have borrowed too much - often taking out interest-only mortgages, with no income verification. They cannot work their way out of the hole; their wages are under constant pressure from Asia. They will have to suffer, along with those who hold their mortgages.

Technology inches forward, but changes in mass psychology can happen by leaps and bounds. That is why the financial markets are prone to panics. Of course, they do not happen frequently. That is why forecasters are usually right when they predict that next year will be like the last. Extraordinary events, like panics, happen rarely. Otherwise, they would be common events. And since they do not happen very often, people generally think they never happen. People build their houses on low ground...knowing that a flood is possible. But they rate the odds so low as not being worth worrying about. Likewise, who worries about a panic out of the dollar? Who worries about a stock market crash? Who tosses and turns at night, sweating the risk of a real estate collapse? After so many years of stability, investors come to think these things can't happen. They imagine that the monetary authorities have made some fundamental progress - like the progress in microcomputers or gene therapy - that makes these extraordinary events obsolete. They think they will never happen again.

Imagine what they would think...imagine what they would do if the dollar sinks by 5% every day for a week. Imagine how hysterical they would become if their neighbors house stays on the market, even after they cut the price by 50%. Imagine how panic-stricken they would be if interest rates shot up 2%...or 4%...or even to 18% as they were in 1981. All of these things are possible. All are likely, maybe not in 2006, but certainly before the end of time. All are human, psychological reactions...completely foreseeable and completely unpredictable at the same time.

We have no opinion on sectors, markets, or individual stocks. But our opinion of our fellow man is that he is given to fits of desperate sanity. And our instinct is that he is getting close to one now. He will look at his dollars and realize that they are nothing more than pieces of paper. He will look at his stocks and wonder why he ever thought they were worth 20 times earnings. He will look at his house and won't be able to believe that someone would have willingly paid him so much for it...and that he, damned fool, didn't take it!

All of that is in the future. How far in the future, we don't know, but we are happy to own gold while waiting for it. Gold, any broker or financial planner will tell you, is nothing but a "risky speculation." In our opinion, it is one of the few places you can put your money that is not a speculation. It is there when your neighbors are happy. It will still be there when they're sad. It's there when the empire is riding high. It is still there when it doth lie so low.

We hold onto it now, because we expect an extraordinary the U.S. empire sinks, and your neighbors start to growl. Gold should not merely stay there, but go up.

Bill Bonner
The Daily Reckoning

GoldiloxGold predictions#1402081/7/06; 00:16:00

@ MK,

I'd be interested to know what fundamentals you think Mr. Sinclair missed to explain your higher estimate of $760? LOL

Reading the web bots, which are not to be reproduced in violation of their proprietary nature, "fundamentals" are certainly in place for more of Gandy's dollar waterfalls, but we are seeing many of them here already.

For non-sunscribers, George Ure has permission to reprint some of the web bot findings at his site.

GoldnoviceVietnam again!#1402091/7/06; 02:00:38

Flatliner, Sundeck
Have just caught up with the forum since leaving last night. Please excuse my poor explanations. I'm new to this game and nervous about posting.

Flatliner, the idea of borrowing against your home is alien to the Vietnamese people. I explained it to my Vietnamese wife, who is a foreign-trained economist, and she was appalled. Over here most everyone lives in a house owned outright by the family, a house that will probably stay in the family after the elders have died.

It's an entirely different culture - not too much of this moving from house to house, buying and selling as you go through life. They are not "stuck" in their house for years - they live in it. It's their home. Often they were born there. If the house gets too small and they have the money, it's common for the old place to come down and a three to six-storey residence go up in its place, even eight or nine floors. Putting a property on the market can be a sign of desperation.

Sundeck, it seems to me that depositing gold in a Vietnamese bank is similar to having unallocated gold in a Western bullion bank. Perhaps I should have added the word "bullion" when I mentioned banks in the rest of the world. Now from my understanding, unallocated gold in a bullion bank is part of that bank's reserves and can be sold if need be. The bullion banker OWES you that gold, which earns no interest and is not covered by federal insurance - a really bum deal.

Let me explain property prices again. The Vietnamese value property in terms of a QUANTITY of gold, and the unit they use is the tael (roughly 1.2 oz.) There's no regulation, it's a cultural thing and the government plays no part.

If they want to sell a house, the quote a price in gold taels, not in cash. Unless they are desperate to sell, the quantity will be that which they value the house in.

For example, during the urban property boom in Vietnam when gold was at its nadir several years ago, we were offered 2,000 taels of gold for a four-story house that we own in the heart of Saigon and let out to a retailer. We refused but that's neither here nor there. Now the POG has doubled but the building's value is still 2,000 taels (we wouldn't think of selling for less), hence double the cash it would have sold for before.

What will happen in the future as gold keeps climbing I don't know, but I think the property market will stay dormant unless there's an economic collapse and people are forced to sell their homes to survive.

Partly because of this gold link, property in Hanoi and Ho Chi Minh City is among the most expensive in the world. The house mentioned above measures 22x4 metres (it has four storeys) and, like most urban buildings in Vietnam, it takes up all the land.

Actually a homeowner holds the land-use rights to the land, which is owned by the state. Since these rights are perpetual and can be bought, sold, inherited or donated, the effect is the same as owning the land. Oh, and my name appears with my wife's on the title deeds to our properties only because she is Vietnamese. A foreigner cannot own land outright, or should I say "land-use rights".

One more thing about this place: silver and platinum are okay for some jewelry, but gold is THE precious metal. When I asked my wife about buying a small stash of silver, she responded "Where? How? Impossible!". Bullion over here means GOLD.

Well, that was all over the place. I've been living in a Vietnamese household for ten years (as is usual, we have relatives living with us) so communicating in English is sometimes a bit harder than it used to be. Most of the posters in this forum seem to be very erudite, and knowledgable.

SundeckVietnam housing and gold#1402101/7/06; 04:17:38

Ref Goldnovice #140209

Thanks, Sir Goldnovice, that is a helpful description of the housing scene in Vietnam.

What I was wondering about in my earlier post #140202, although not stating very clearly, was the relative appreciation over time (in terms of dong) of housing and gold in Vietnam. You have largely answered my "wonderings" by the following passage from your #140209:

"For example, during the urban property boom in Vietnam when gold was at its nadir several years ago, we were offered 2,000 taels of gold for a four-story house that we own in the heart of Saigon..... Now the POG has doubled but the building's value is still 2,000 taels (we wouldn't think of selling for less), hence double the cash it would have sold for before."

On this (admitedly) small sample of one, it seems housing and gold retain an approximately fixed relationship to one another over time...that is, as prices change in terms of dong, both housing and gold track the changes in the currency at comparable rates. This is what one might expect of two "things" that retain their perceived "value" in a society. And from what you say, it seems clear that both gold and houses have been deeply treasured by the Vietnamese over long periods.

This is in contrast to the UK, US or Australia where housing prices have increased around 50-60 times since about 1970, while the price of gold has increased only about 15 times. If one were (foolishly) to equate "price" with "value" (as many people do), one might think that housing in the Western psyche has become significantly more valuable than gold...and perhaps that is the Western perception!! But I rather feel that housing prices in the West have a significant speculative component built into them, which is intertwined with the Western tradition of debt-financing, and the many years of easy money. I suspect we are seeing inflation manifesting in the housing sector and gold has not yet caught up.

In other words, lending ( = money creation) has favoured housing in the West and housing prices have outstripped other inflation indicators (gold, CPI). At face value, housing prices have to fall (anathema to debt-ridden Australians and Americans) or gold prices must rise...

As an aside, I remember Marc Faber commenting recently on this issue. He said something like: "Western investors should sell housing in places like Australia and the US and buy housing in SE Asia." This would tend to lower housing prices in the West (something Western Central Banks will fight tooth and nail) and raise housing prices in SE Asia.

Given what you say about gold and housing (in Vietnam, at least) being coupled together in fixed-value relationships over time, the corollary is that the price of gold must also rise...

Interesting information, Sir Goldnovice... Thank you for bringing it to The Table...


CaradocTrigger?#1402111/7/06; 06:17:55

This forum has previously addressed various possible "triggers" that could launch a major move in gold. If over the next few days gold breaks past resistance at $547/ $548, a quick look backwards will indicate that the trigger for the move was China's 5 Jan signal that it could switch its foreign exchange reserves away from the US dollar.

The link above was updated as of 6 January.

Economists estimate that more that 70 per cent of the reserves are invested in US dollar assets, which has helped to sustain the recent large US deficits. If China were to stop acquiring such a large proportion of dollars with its reserves – currently accumulating at about $15bn (€12.4bn) a month – it could put heavy downward pressure on the greenback.
***end of snip***

Sticking with the trigger metaphor, the pistol was cocked by Iran's plan to begin selling oil in Euros two months from now.

Could be a good time to add a few ounces to your stash.


BelgianCaradoc -plus-#1402121/7/06; 06:40:15

Read the alinea >>> It is a subtle but clear signal that...

Maybe China (PBoC) has already the 2,500 tonnes they suggested to accumulate !?
Simply because I find it very unusual that CBs (SA/Russia/China) announce/trumpet their intention to accumulate more gold-reserves. I want gold...means, less gold for more dollars (reserves).

If there is no goldmetal available anymore for redistribution...the value of physical gold can run away from its papergold pricing. We have CBs that are increasingly reluctant to let goldmetal go and CBs who want some more ! When there's no more goldmetal moving...the price of the metal can lift off. A goldprice decline means that metal is still moving.

Belgian bullion private uptake is up 25%.

Caradoc@Belgian#1402131/7/06; 07:38:46

Congratulations on increasing your stash by that huge percentage!

I'm up this week by only a few ounces, ~1/3 of the profit from selling January calls in one of my favorite miners. Another 1/3 went into slightly out-of-the-money calls for July and next January, and the final 1/3 I plan to squander on the luxury of a paved driveway.

I won't be surprised if/when the day comes that "all paper will burn" and, yes, options are only paper that gives the right to buy more paper, but in the meanwhile -- once your stash of physical gold in hand approaches comfort level -- the realm of paper is a strange place where you can gamble a few ounces worth of FRN greenies and maybe generate enough greenies to take possession of those ounces, roll the gamble forward, and have greenies left over for other purposes.



GoldnoviceHousing & gold in Vietnam#14021401/07/06; 08:36:47


Quote: "it seems housing and gold retain an approximately fixed relationship to one another over time...that is, as prices change in terms of dong, both housing and gold track the changes in the currency at comparable rates. This is what one might expect of two "things" that retain their perceived "value" in a society. And from what you say, it seems clear that both gold and houses have been deeply treasured by the Vietnamese over long periods."

Precisely, but the concept was so different from the West that it took me nearly ten years to figure out (and we even bought two properties in that time!).

That was an interesting comment from Marc Faber - good idea to buy property in SE Asia (but hard to do). And yes, I agree that housing prices in the West have a high "inflation" component.

GoldiloxNot Presactly a Breakout#14021501/07/06; 09:39:52


A number of readers have written in saying things like "Where's your Crash?" Damn good question. While I am not especially anxious to see it come, let's have a little reality check. First, we have to look back on Friday's news events and see what was happening to give the market such confidence:
The Chinese, as we reported, are diversifying out of US Mal-Bucks now and are looking for something better. Ticks off Treasury Secretary Snow, but he doesn't run China.
Democrats (reports the Drudge Report) are planning to ambush the Sam Alito nomination to the Supreme Court.
Not a hanging party for the DeLay folks in CONgress, but with Abramoff & friends about to rat out other members of CONgress, it doesn't seem to inspire much confidence in the political system.
George "Here, have some free lunch" Bush was speaking in Chicago about tax cuts.
The "deal" with the street is pretty simple: When George and/or Snow speak, the market rallies. Got it? The Fed turns on the easy money, and off we go on a tear. Of course, the observant reader will notice gold popped nearly $13, too.

So while no, "my crash" hasn't shown up yet, let's look at things in a comparative manner and see where the Dow should have gone if it had increased on Friday at the same rate as gold.

Gold opened Friday at around $526.20 and closed around $538.80 (at least by the chart above, and no, let's not quibble about the small differences between dealers and buy/sell spreads, for the sake of this discussion, OK? That's a 2.414% gain in one day.

Now, if we look at the Dow, we see it gained 0.71%. If the Dow had kept up with gold, it should have closed the week at 11,144.84 - a 262 point gain for the day. Instead we got this weakish 77.16 point gain - there's 185 points that didn't show up.

While I'm pleased to report "my crash" didn't show up this week, let's try to keep in mind that the Dow is underperforming gold (by a huge margin) over the past several years. I don't wish any ill toward my beloved country, but when we are living on OPM/CM (that's Other People's Money - China's money to be precise) the sober-as-a-judge call we have to make is that pump and hype aside, our Fed is between a rock and a hard place that looks to me to be moving more toward toward nuts in a vice than paradise.

GoldiloxMarket thoughts#14021601/07/06; 09:45:05


The US dollar broke down below its second power uptrend and as Dan points out it is well below its 100 day moving average considered so important to traders.

I am always amused at the financial TV seers who are willing to make fools of themselves by telling you exactly what the Federal Reserve is going to do at each meeting. They were coming out of the woodwork today.

The dollar's decline was measured as the President lauded the creation of jobs in the past year in the face of national weather disasters (which means rebuilding or repairing homes) and increased fuel prices, most of which has found its way to credit card balances.

Who says the oil companies were stupid when they converted gas pumps to credit card machines? American consumption of gasoline was the highest rate in 16 years during December. The American public will spend money as fast as they can borrow it with no thought or concern for tomorrow or that eventual rainy day. It is probable that this is a product of the demise of almost all of those traumatized by the 1930s. The new bunch thinks that economies never turn down or if they do only a wee bit.

I once again ask you to see the movie "Enemy of the State" as it is almost PROPHETIC in terms of understanding the world we live in. A combination of "Wag the Dog," "Bulworth," and "Enemy of the State" will give you a better understanding of the factors underpinning the gold market than any gold site.

The old high of this gold bull market is clearly in the crosshairs of today's gold price. The move above $529 is still alive and well regardless of those who pronounce otherwise. The market is the only advisor and the use of trend lines for the general public is a good way to understand the language of markets. The more you listen to market and the less you listen to advisors, the better you will do.


Sinclair's latest observations

GoldiloxWhen Smart Bombs Pop Over Tehran, Gold Will Pop to Over $1000/oz#14021701/07/06; 09:55:21


A melt down is on the near horizon, far exceeding that of Chernobyl Ukraine, but this time, will be intentionally done, probably by summer, and Gold will pop to over $1000/oz, virtually over night, and maybe to $1500/oz. With moderate-of-late Sharon out of the political picture with a stroke, it will be difficult for Perez to hold the middle ground in Israel's politics to secure a centrist political party victory supporting Palestinian statehood and unilateral withdraw and moderation, as the Likud party chief, and former Prime Minister, Benjamin Netanyahu resurfaces from the shadow's of the parting Sharon. It wont take long either after the March Israeli election.

Netanyahu wont mess around with Iran by begging for useless endless negotiations as are the EU-3 presently doing with Iran. Israel is relatively immune to Iran's threaten oil price increases, and will strike from the get go. Israel already has a massive stock pile of 2000 bunkerbusters and has a vast array of anti-missile batteries to counter the Salaam III 1500-mile range Iranian missiles. It wont matter what Iran says, truth or not, Israel will defend itself from being "wiped off the map". The Israeli knows that a vote for Deputy Prime Minister Ehud Olmer, Sharon's present 2nd, now tainted with the middle of the road tact, is too dangerous, in the presence of being threaten to be "wiped off the map", as the Iranian President has recently proposed. With Israel in fear of growing threats and extinction from Iran, Israelis will fall back on the old warrior, Netanyahu, as a necessary vote to defang Iran and preserve Israel.

Based on history, Netanyahu will act and act quickly, before summer. With multiple wars, oil supply uncertainty, vast fiat money printing, and global moves by central banks to buy gold in a supply deficit market, it is a no-brainer where gold will go this year. Gold will be in the four digits by July 4th, but initiated with a more impressive fire work show than that ever seen in a USA ballpark. The hard line Likud chief, Benjamin Netanyahune, will move as the bold man he is. Is there really any choice? Is there really any doubt?


I know this is leaning toward over-policizing, but coming from leMetropoleCafe via FSO, this "one-man's opinion" is worth a look. When sabres rattle, paper markets get the jitters, and those seeking safety run for the cover of bullion.

GoldiloxIN MEMORY OF "A Market Gem"#14021801/07/06; 10:01:58


Jim and I were shocked to learn that Kennedy Gammage passed away yesterday. Our heart-felt condolences are sent to his family. Personally, we will miss his humor, his kindness, and his wonderful spirit. He was a gentleman at all times, an astute technician, a market scholar, and a fountain of wisdom. Truly, this was a life lived well. He will really be missed by many.
- Jim & Mary Puplava

Brief Bio and Editorial Archive
Financial Sense Newshour Broadcasts
11/01/2003 FSN Roundtable: Goldbugs & the 5 Bears with Kennedy Gammage, Robert Prechter, Peter Eliades, and Tim Wood
06/28/2003 FSN Roundtable: A Technical Perspective of the Markets & Gold with Kennedy Gammage, Richard Russell, Peter Eliades, and Tim Wood


To honor the passing of Kennedy Gammage, Mary has posted links to some of his gold roundtable participations at the memorial URL.

Goldilox(No Subject)#14021901/07/06; 10:06:34


When the December Federal Reserve Open Market Committee meeting minutes came out on Tuesday afternoon, it was akin to a starter gun shot at the beginning of a race. Debate will persist on interpretation. Regardless, the year 2006 has begun with a bang. The S&P500 loved it. The SPX rose 18 points, sensing an end to restrictive money. Gold loved it. The metal rose $15 per ounce. Crude oil loved it. The black tea rose almost $3 per barrel, surely aided by the Russian & Ukrainian skirmishes. The euro currency loved it. The EU "stock" rose almost 200 basis points in two days. Wow!!! The clowns on the financial networks cannot even properly interpret events. Did gold rise in sympathy to the Gazprom extortion maneuver on the energy front? Or did gold rise from expected lost pillar to the USDollar and the world monetary foundation? Did crude oil rise from rattling sabers in Eastern Europe? Or did oil rise from expected lost pillar to the USDollar and the world monetary foundation. These media harlots (perhaps only incompetent) attribute higher USDollar exchange rates to robust (they are exaggerated) economic growth, when support for the clownbuck owes primarily to bond arbitrage carry trades feeding off the higher US Treasury yields over Europe and Japan. The lost pillar of higher US interest rates will have a profound effect on the USDollar, gold, and crude oil in the new year 2006. Perhaps they should listen to Rick Santelli more often. He gets it. He has smelled something rotten from the inverted yield curve signal. But does not connect the dots to conclude a weak USEconomy and declare an invalid GDP statistic.

It is my opinion that the big stories this year will be

the end of the USFed tightening of interest rates
the slowing housing market, and drag on the economy
the worldwide scramble for energy, complete with raging violent conflicts
My full expectation is for a very tumultuous year. US economists will receive a wakeup call on how dependent the USEconomy actually is on the housing sector, and especially home equity loans. Fully 50% of domestic growth is tied to the housing boom (aka bubble). In the first week, we have been treated to a nice preview of the financial stir of its cauldron. Expect more pyrotechnics in the next few months.

Absurd talk continues of USEconomic robust strength. It is really robust philandering corruption distortion and deception in the calculation of all major economic statistics. A mere 12-yrold kid can unmask the lies on the statistics. Gee, wages will rise to catch up to strong productivity! Well, the benefits of this imported productivity are in Asia. Gee, robust performance with "full employment" is the mindless manipulated mantra. Well, such a boast requires not counting those who no longer receive jobless insurance benefits. Gee, low price inflation has returned to our shores. Well, let's stop driving, shipping, heating, and eating for that matter, and ignore asset bubbles.


Never one to mince words, Jim Willie also predicts some major chaos upcoming.

GoldiloxINFLATION - WHO SAYS IT'S DEAD?#14022001/07/06; 10:12:12


Inflation in my adult years increased average prices 1,000% or more:

a postage stamp in the 1950s cost 3 cents; today's cost is 39 cents - 1,300% inflation;

a gallon of full-service gasoline cost 18 cents before; today it is $2.28 for self-service - 1,267 % inflation;

a new house in 1959 averaged $14,900; today it's $282,300 - 1,795% inflation (+1,510% if quality-adjusted);

a dental crown used to cost $40; today it's $740 - 1,750% inflation;

an ice cream cone in 1950 cost 5 cents; today its $2.50 - 4,900% inflation;

monthly government Medicare insurance premiums paid by seniors was $5.30 in 1970; its now $88.50 - 1,664% inflation;

several generations ago a person worked 1.4 months per year to pay for government; he now works 5 months.

and in the past, one wage-earner families lived well and built savings with minimal debt, many paying off their home and college-educating children without loans. How about today?
Few citizens know that a few years ago government changed how they measure and report inflation, as if that would stop it - - but families know better when they pay their bills for food, medical costs, energy, property taxes, insurance and try to buy a house.

Is inflation a threat to society, beside the prices we pay and the fact fewer children have a full-time mother at home? Consider this famous quote:

"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose."
Lord John Maynard Keynes (1883-1946), renowned British economist.

Inflation is the loss of a constant purchasing value of the dollar,
caused by an increase out of 'thin air' of the supply of money and debt creation by the financial system.


OK, "one more for the road'. Michael Hodges offers a scathing, if rather lengthy, analysis of "covert inflation" and its causes.

Flatliner@Vietnam housing and gold#14022101/07/06; 10:13:11

Goldnovice, Thank you for your time. To all others, I do hope this thread hasn't diminished the value of this forum.

I do hope to get back to the value concept discussed here at some future date. It seems to me that house prices in the west have even less value today then they did before this conversation took place. You see, if the price of a house falls in the west, the owner of the home only stands to lose his equity (the equivalent of very few gold coins) along with his good name (he gets a tarnished mark on this debt servicing record). Losing equity or getting a tarnished record really does not mean much to the owners here, for every time the economy turns south, many people simply walk away from their obligation. Could you imagine someone walking away from a gold coin? Yeah, right, I don't think that would happen.

GoldiloxInflation, cont.#14022201/07/06; 10:15:44

(See previous post)


"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. The abandonment of the gold standard made it possible for welfare statists to use the banking system as a means to an unlimited expansion of credit (debt creation)" - Alan Greenspan (#8), 1966

"It was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But, in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, has allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess." - Chairman Alan Greenspan Before the Economic Club of New York, December 19, 2002 "Issues for Monetary Policy"


I usually refrain from postin two quotes from a source, but these were too juicy to pass up!

Goldilox"Tarnished Name"#14022301/07/06; 10:27:58

@ Flatliner,

With the US becoming more and more a "credit-based" economy, and the institution of new bankruptcy laws, I submit that foreclosure brings more grief than just a "tarnished name", as cost of participation in the credit "merry-go-round" rises dramatically.

I don't think your intent was to minimize this, but your analogy of "just walking away" only applies to those well-heeled and perhaps "trust-protected" so they have a secure destination for their credit "walk-about".

Maybe I'm focusing on the opposite extreme?

NedVery interesting angle.............#14022401/07/06; 11:06:20

Haven't seen or heard of this before but I was watching "Tout-TV" yesterday and the analyst who was asked about gold's stellar performance had a new angle.

He surmises that Asian countries who have never had their currencies and economies exposed to a severe bout of inflation are 'hedging their bets' and buying pallets of physical gold.

So not so much as a western demise, a western economic crisis or dollar deval. but more so a hedge against Asian ('eastern') inflation.

Interesting angle....bring it on!!

Have a golden weekend.

Flatliner@"Tarnished Name"#14022501/07/06; 11:18:10

You bring up a good point and the future will educate people. In the past, people would just walk away and start over again. Sure, they got a tarnished name, but they could still live, even though it was a little harder.

But, times have changed haven't they? Do people really understand how the rules have changed? To you and I, we see that the laws have been changed so that if you have the ability to pay, you will. But, we haven't had a slowdown have we? Thus, do people understand that you just can't walk away? I would submit that the general public does not understand this new concept. People are acting today as if they could just walk away. They do not take seriously the responsibility that they have acquired with signing their name. In time, people will learn (what you already know).

But, I am still torn with regards to the pain that it will cause people. By today's standards (assuming that all things stay the same), acquiring a half million dollar debt for 30 years would surly mean 30 years of slavery. The puzzling part is that things are not staying the same. Particularly with the money supply! It may be that making a half million dollars a month may be something in our not-to-distant future. Thus, paying off that debt may be possible and even relatively easy. Thus, the pain of holding house debt may not be all that bad – in the short run. (But, I've glossed over all the other problems that this type of inflation would cause!)

Sorry for bringing so many more words into the forum.

FlatlinerHyper-inflation and the price of gold.#1402261/7/06; 12:54:05

Thanks Sundeck for the pointer to and their graphs. Anyone wonder what the PoG looks like in a hyper-inflationary environment? Graph gold against the Zimbabwe Dollar. Wow.
Caradoc@Goldilox, more on China dumping dollar, etc.#1402271/7/06; 14:10:11

Link is today's assessment of the Chinese angle from Financial Times.

Hey, Goldilox! Great series of posts today. We could be in for an interesting week.

Looking at both the posts on Asian housing priced in parallel with gold versus the US housing bubble prompts a few thoughts...

* Recent price growth for US housing is on top of the 70 or 80% increase resulting from FHA's 1973 decision that spouse's income should be considered in deciding how much debt a couple could swing. (Two incomes per couple competing for most everything on the market drove prices up so that by late 70s the typical single-income family had been priced out of the market.)

* With the end of cheap energy saying that food will be more expensive to grow and to ship and that the same applies to commuting and and home heating expenses, it's easy to figure that difficult-to-heat McMansions (large houses on small lots 50 miles away from work) will tumble in value.

* Big difference from the 1930s is that then most Americans rural roots to which they could return (the skills at least, if not Mom in her apron and Dad in his overalls expecting them.) Today, with most family farms having been bought up by agribusness, most people won't have a place to go. And even if you're lucky enough to have the family farm still in the family, you'd be more welcome if you could show up with a pickup and a rototiller than with an SUV and a Miata.

* Given what seems to lie ahead, any US housing that comes with a few acres and an independent water supply should be in for a healthy increase in value no matter whether nubucks are issued at ratio of 100:1 or 1000:1. It's no coincidence that the fellow who hosts the site that Goldilox occasionally visits has relocated from Los Angeles to east Texas.

Focusing in a bit on drinking water as a pending shortage and that shortage's investment implications, Jim Puplava's "Blue Gold" article from Nov 2004 is the quickest intro to the subject:

I've mentioned before that if you have a well, two solar panels and a 24-volt pump will let you retain flush plumbing and drip irrigation for as long as the sun shines. Not bad, but my hunch is that, instead of that approach, having an artesian spring with gravity flow downhill to the house will be good for an additional price delta that will exceed what could be raised by selling 2 or 3 McMansions.

Regards to all,


CaradocGreat discussion of peak oil#1402281/7/06; 14:49:00

Well worth listening to. -Caradoc
USAGOLD / Centennial Precious Metals, Inc.A world of gold is at your fingertips...#1402291/7/06; 15:47:09">gold -- a global calling card
GoldiloxWeb Bots eerily right, again#1402301/7/06; 16:36:45


As we've warned before, expect economic pandemonium this spring and a transition from a meta data period of militancy to something far worse by mid-late summer. Go read our story earlier this week on the "war counsel" which we've heard this weekend from highly placed sources is uncomfortably accurate about where things are going.

As reports that the Iraq war alone could cost over $2-trillion show up, repudiation of the dollar externally becomes almost a foregone conclusion. Thus the market can rally on a paper basis but the gap between the Dow and gold is likely now to rapidly close.


I'll keep the qoute on the economic side. Go to George's site for the detail . .

GoldendomeA problem with real estate.#1402311/7/06; 16:45:04

The thing memorable, that captured my eyes a couple of weeks ago while lost in the Queen Ann Hill area of Seattle, was not the little old houses spaced about two yards apart, nor the glitzy Audi's, Porches, Bimmers, and Mercedes lined along the curbs as though gathered for a Road and Track magazine photo shoot; No - it was the three houses I saw that had, "Accepting offers" signs on their front lawns.

Goldendome, assumed that this meant that the owner was willing to part with his prized dwelling...if the price was right. But that's the thing about real estate, how do you know what it's worth? Goldendome, by this time, had already had his big bofo business property on the market for FOUR years and had only now found the nearly correct pricing point. Yes, two - got that TWO, parties were actually wishing to relieve him of his burdens. But, at a price much, much lower than Goldendome had at first offered it unto the public, and lower still than his final asking price.

I thought to myself: Goldendome, here you've wasted all of these years, suffered all of this frustration, and why? Because you just weren't smart enough to put a sign out front that said, "Accepting offers". I could have had the money out years ago. I could have put it all into physical gold, like I remember now, that I was going to do then; and the way the gold market has gone - in retrospect - I'm sure that I would have done, 100%! --Oh, to have the courage in the present that we had in the past, or know that we will have in the future.--

So, now, it looks as though Goldendome will be getting some significant dollars out of the place, (not all at once, as I had thought a couple of weeks ago -- as the first accepted offer [that we had thought could not perform] had a right to perform and will). But still some significant dollars to a little pawn that lives out here in the middle of Podunk, Washington.

Now, will Goldendome have the courage and confidence to commit a large trove of $ into the gold market (as he had done over the years with smaller amounts), even though the price has moved up over a $100 or $200 an ounce above where he's certain in positive market movement retrospection, he would have made his commitment one, two, three, or four years ago? -- I think so! If anything, things are worse now than then. Goldendome, remembers a sentence that MK used here many weeks back. "Gold is where savings go to stay whole" he said. With the state of the on-going deficits and underfunded, state, and national; the prospects for paper dollars and currencies appear grim. Barring some unforeseen glitch, Goldendome's deal should close in early February. --Oh, to have the courage then.--

MKThe Gathering Storm and Gold#1402331/7/06; 17:04:12

The following extracts from a Financial Times article headlined "Questions grow over China's forex strategy" with my comments appended. The China strategy no doubt figured largely in yesterday's gold market run-up.


Financial Times: "The spectre of Asia's central banks deciding to diversify away from their dollar holdings has long threatened a sharp drop in the value of the U.S. currency."

MK: A quote from The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold:

"Nowhere are the dangers to the world economy more implicit than in the United States’ economic relationship with the two Asian exporting giants, China and Japan. It is estimated that east Asia holds approximately two-thirds of the world's foreign currency reserves. Japan and China alone hold an estimated $800 billion and $400 billion, respectively, in U.S. dollar reserves, about 17 percent of the total U.S. federal debt.

[Addition 1/7/06: China is likely to catch Japan in terms of dollar reserves soon, so the emphasis at the moment is quite naturally on China. At the same time we would be remiss to discount the dollar holdings of Japan and the oil exporting nations -- particularly the Gulf States and Russia.

U.S. economic policy in the past could focus principally on Japan (with respect to the dollar overhang. Now American policy-makers have a half dozen nations with which to contend. The United States is quite literally flooding the world with dollars. Needless to say this complicates matters significantly making it difficult for a coherent policy to emerge.

Discipline in the dollar-holding ranks could suddenly break setting off a deluge of bond redemptions which in turn could ignite a full blown financial crisis. In other words, we might be a gun shot away from a full stampede.

The implied threat imposes itself directly on the private investor who has no resources but his or her own should such a panic were to unfold. If you haven't diversified into gold, now is the time. If you have diversified but still need to add more gold to your holdings, it is better to get the job done now than wait for a price correction. As the past week exemplified, the downturns are shallow with a quick bounce back to the upside. Don't play games with your future as this dangerous situation gathers momentum. -End 1/7/06 addition-]

The ABCs: "Recently the Sydney Morning Herald openly questioned dollar policy and its potential impact on the Pacific region.

‘Around Asian financial circles, there is growing, if still muted, talk of a looming 'dollar crisis' equivalent to the sterling crises of the 1960s — when London could no longer support the reserve role of the British pound—unless Washington mends its profligate ways and accepts higher interest rate and taxes. A default by the U.S. government is still unthinkable, but not so a unilateral change in the rules of international finance—akin to Richard Nixon's halt to the convertibility of dollars into gold in 1971, or Franklin D. Roosevelt's devaluation and repudiation of gold-denominated contracts.’

Under the circumstances, it is not difficult to understand why Japan and China might be interested in increasing their gold reserves. Even a small shift in the Japanese and/or Chinese reserve position toward gold would have major implications for both gold and the dollar.

[Addition 1/7/06: It is not just China and Japan that might be interested in increasing their gold reserves. Russia has announced a similar interest and so have several other nation states. It is a long-held belief in the gold market that wealthy Arab oil producers have been quietly building their gold reserves as oil revenues have poured in. I would contend at this juncture, that private attempts to acquire gold will be ,pre successful than the public, official sector type, though the official sector endeavors will have an important psychological effect on the market even if they meet with only limited success. I would not be surprised to find out down the road that in this period wealthy oil money was quietly going about the business of physical gold acquisition, and that this was the underlying current in the gold market that took it to 25 year highs. End 1/7/06 addition.]

Richard Duncan, former International Monetary Fund economist, speaks to what this might mean to the world economy of the future:

"By accident or by design, Japan is carrying out the most audacious endeavour to conjure wealth out of nothing since John Law sold shares in the Mississippi Company in 1720. So far, the results have been impressive. Japan's monetary alchemy has been the most important factor in allowing the U.S. government to finance a $700 billion deterioration in its budget over the past three years without pushing up U.S. interest rates to levels that would pop the wealth-creating property bubble there…These developments highlight a fundamental question that has been debated repeatedly over centuries: Can governments create money and make the population richer without setting in motion a chain of events that ultimately ends in monetary chaos?

We may be about to find out, as Japan tests the hypothesis on an unprecedented and global scale. If this experiment in unorthodox monetary policy succeeds, then we have arrived at a new international monetary paradigm. Governments will have discovered how to finance limitless deficits through the creation of paper money, and we all can look forward to an age of great prosperity. If it fails—as have all past attempts to create wealth from thin air—then the world may not be able to avoid a severe and protracted economic slump as the extraordinary imbalances in the global economy, caused by the explosion of fiat money in recent years, begin to unwind.

In mid-2003, economists at the U.S. Federal Reserve published apaper explaining why the Fed was not "out of bullets" despite having cut short-term interest rates to one percent. That paper stated that "the Fed could even implement what is essentially the classic textbook policy of dropping freshly printed money from a helicopter," if necessary, to stimulate the economy. Today, that helicopter is in the air. But, strangely, it is not the Stars and Stripes that is painted on its side, but rather the Rising Sun. That much is clear. What still is not quite discernible, however, is who is actually in the pilot's seat."

One of the unhappy consequences of the structural trade deficit is that the Greenback is being held hostage by foreign financial interests. Any of these interests can move against the Greenback at any time by simply selling off their bond holdings. Foreign-held dollar debt has become a weapon in the equivalent of an economic Cold War. Just as nuclear weapons were held for most of the twentieth century like a sword of Damocles over the nations of the world, so now are dollar reserves held over the head of U.S. financial markets. To say the least, this puts U.S. stock and bond investors in a precarious position, and makes gold, the stand-alone asset, a critical holding or those who understand the dangers this tenuous synergy implies."

-End ABCs quote-


Financial Times: ". . .market reaction yesterday to the announcement was limited. China watchers pointed out that the statement on Thursday evening did not come out of the blue, but followed comments by government officials and academics questioning the wisdom of China's reserves management strategy."

MK: The reaction in the gold market was not limited by any stretch. In my forecast for 2006 (Available at the Daily Market Report page), I commented on the dominant role central bank gold demand could play in the gold market. Beyond the immediate psychological effects, the real world implications will be felt for a long time in the physical market itself. The enormity of the implied central bank demand is likely to further upset the gold market's already delicate and tenuous balance .

Most mainstream commentators -- even those with some understanding of the gold market -- have yet to fully comprehend what is really going on in the gold market. Those who come to this website, however, are well aware of the breach between supply and demand already in place due to a combination of short covering and declining mine production. Now we must factor-in that central banks as a group have become net gold buyers instead of sellers -- altogether a potent brew that could catapult gold into the investment limelight and keep it there for a long time to come. Some of the early reports on Chinese interest in gold suggested a 1500 tonne addition to its reserves. What about Russia? South Africa? The Gulf? India? And don't forget -- European and American investors (perhaps as big a market if not bigger than the others mentioned). The gold market may not be ready for what is about to happen to it.

Financial Times: "Last month Yu Yongding, a prominent academic who sits on the central bank's monetary policy committee, warned that China's reserves could be seriously eroded if the US dollar weakened further, a comment interpreted in some circles as a warning against excessive investment in dollar assets. However, Thursday's statement did break new ground: it was a public statement by Safe, rather than comments by individuals."

MK: In China policy is often foreshadowed by articles written by key policy makers. China will likely act in its own best interest despite the ramifications to the world economy. Though China's approach is likely to be measured and the policy applied over a protracted period of time, the effects on the market will be immediate. We are talking about quantum changes in the way the world does business -- a shattering of the paradigm. All markets will be affected inlcuding gold. Please see more on this below.

Financial Times: "Foreign investors have continued to be willing to finance the US current account deficit at very low interest rates in spite of the foreign exchange losses they suffered during the dollar's decline from 2002-04. This has made it easy for the US to finance its current account deficit, which has risen above 6 per cent of gross domestic product and requires the US to import more than $2bn of capital from abroad every day.

But it would not need China to start dumping dollar assets for there to be pressure on the dollar. If China became less willing to continue adding to its holdings of US Treasuries, that itself could put downward pressure on the dollar and upward pressure on US interest rates – particularly if it encouraged other countries to follow suit.

Oil-exporting countries have become increasingly important sources of foreign capital, owing to the high oil price, becoming as important as developing Asian countries in financing the US deficit. "

MK: The implications to the American economy of those four small paragraphs are alarming. This past summer the world's financial pages were filled with discussion about Alan Greenspan's conundrum -- the fact that interest rates were dropping in the real economy even as the Fed attempted to drive them higher. When Ben Bernanke takes the reins of the Federal Reserve he might very well be confronted with a conundrum of his own.

If China indeed begins to diversify out of the dollar (by reducing its purchases of U.S. Treasuries) in any meaningful fashion, the dollar will be the victim and so will easy money in the United States. The Greenspan conundrum came from China and Japan undermining Fed policy by flooding the American economy with dollars from their reserve hoards. A Bernanke conundrum -- as described above (the opposite of the Greenspan conundrum) may cause an early launch of those money dropping helicopters we have all read so much about.

China, possibly without realizing it, could precipitate a stagflationary crisis every bit as dangerous as the one tsunamied the Asia economies in the late 1990s (Bernanke's worst nightmare if you've had the occasion to study his speeches and academic papers) -- only this time it will occur in the economy upon which all other economies depend. It is a dangerous business and dangerous times for the world's investors.


The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold by Michael J. Kosares can be ordered at the link above.

Here is the link to the Financial Times article featured above:

SundeckChina, the PBoC, housing and gold#1402341/7/06; 17:12:48

Ref Belgian #140212

Yes Sir Belgian, it would seem odd that the PBoC would openly admit that it was seeking more physical gold prior to actually trying to acquire it. But then, other CBs have made similar comments...South Africa, Argentina and, I think, Vietnam. (Didn't some treasury official in Japan make a similar comment a year or so ago?) I doubt if they ALL have acquired the amounts to which they publically aspire...and I doubt if China has either.

Also, in a similar vein, Russia has openly admitted that it was intending to increase its reserve holdings of Euros (along with other CBs, I believe). True, the market for Euros is likely to be less "tight" than the market for gold, and so the impact upon the "price" of the Euro is likely to be less sensitive than the impact of such announcements by CBs upon the price of gold.

On the other hand, China literally may not give a damn about the People's Bank's statements regarding gold purchases and their impact upon price. Even if China were to start from scratch to acquire its 2500 tonnes of metal, at present prices the whole deal would be around $US43.4 Billion...almost a measely amount along-side China's enormous (and growing) US dollar reserves of around $700Billion. China probably knows very well where the price of the metal is headed, and that any purchases are going to reap a tidy profit whether it signals its intent or otherwise. (And, as TC pointed out recently, gold purchases by China may help quiet the yelping about trade imbalances with the USA...especially if China becomes a significant buyer of US gold production...and/or gold reserves!?!?!?)

Remember also the PBoC Chairman's comments a few years ago, openly encouraging China's people to invest in gold? (Can you imagine Greenspan or Bernanke saying something like this openly??) I suspect this encouragement by the PBoC is closely akin to the "culturally overt" and tacit encouragement by CBs and commercial banks in the West for their peoples to get into housing in a big way and stay there, as a means to save themselves from the inevitable devaluation of the US dollar and its "derivative currencies".

No, I suspect authorities in the populous part of the world (China, India) would be very happy to see the price of gold sky-rocket whereas the authorities in the "priviledged" part of the world (UK, US, Australia, etc) want to see housing maintain its present price-levels no-matter what. They do not want to see a major exodus, or diversion, of funds from housing into gold. However, they will no doubt be able to tolerate a "mini-exodus" into gold...since the housing market in the West is many, many times larger than the gold market; and would probably remain so even in the face of a significant "gold rush".

It is for this reason (the scale of the two markets in the West - gold versus housing) that Asian gold can have its way while Westerners can have their way with their houses...AS WELL AS reap the rewards of a rising gold price...if they see the writing on the wall and act upon their convictions.

Cheers, Sir Belgian...a Happy New Year to you.


GoldiloxGold Tsunami#1402351/7/06; 17:45:52

Judging from the very obvious fundamentals in MK's message, and the support it is receiving from every corner of the financial pundit world, the bullion banks and CBs may need to "give" gold away to keep the price from reacting accordingly.

How likely is that? Giving away SUVs when gas prices are rising is not quite the same as gving IT away when all meaningful prices are rising.

Should be an exciting quarter.

Cavan Manmonetary evolution (not without pain)#1402361/7/06; 18:44:53

Tripartate trending: Americas, Asia, Eurasia = currency zones
NedWhat?#1402371/7/06; 20:07:46

Goldilox (01/07/06; 09:55:21MT - msg#: 140217)
When Smart Bombs Pop Over Tehran, Gold Will Pop to Over $1000/oz

Now that's an ugly story.

Its the reason I keep a somewhat far-out ask on all my gold stocks. Let's say "Golden Arches" has a bid/ask on the go for $20/21, I will have a ask in the mix for $28. Just in case 'hell' breaks out.

Do you wanna be holding paper, even gold stock paper when 'nukes' are flying?

GoldiloxETFS ARE NOT REAL ASSETS#1402381/7/06; 23:24:45


An ETF is regulated by the laws of the land. Laws change. What you buy into today may be completely different from what you are owning tomorrow, basically depending on the financial stability of the Nation in question, and at the whim of the legislators or the President, who can change anything and have changed everything in times of great crisis.

But you bought that ETF claim, based on some kind of economy that was working when you bought in, a financial system that was working at the beginning, and later, a national currency crisis, banking crisis, market liquidity crisis, or another crisis changes everything, and now all the laws are subject to change, and the best outcome for the ETF would be probably payment in…. you guessed it… in dollars.

But you thought you owned a real asset, didn't you?

I have another basic objection to an ETF. It is a multi-layered paper/electronic claim. There are layers and layers you have to go through to get anything back. You have layers of laws between you and the asset you think you own. Let me tell you something. Having a claim on something, and actually getting it are two different things……

To me, there is no comparison whatsoever with a gold coin and a paper claim on it.


Not gonna get much argument here!

YGMThe Steps of China's Gold Coup...#1402391/8/06; 00:45:50

This is part of China's planned Gold Coup...First allow & encourage (as they have done, and Asians need NO encouragement to own Gold and never have) the people to trade paper savings for physical Gold, then follow up with China's Central Bank exchanging some of the Trillions of US Bonds and Fiat for Gold...Hence the Yuan becomes a power and the peoples personal wealth of the Nation is protected from ANY Fiat's devaluations...Next liberalize China's mining laws, privatize mines and encourage westerners with modern expertise and highly trained people to come and explore for & mine Gold in China, thus vastly increasing Gold production. (this has also been put in motion and mines in China are currently being bought by western companies and much new exploration is taking place already)...Follow the first hints in this year old speech...

Zhou Xiaochuan: Gold market functions to hedge against risks

Speech by Mr Zhou Xiaochuan, Governor of the People's Bank of China, at the 2004 London Bullion Market Association Annual Precious Metals Conference, Shanghai, 6 September 2004.


How can we transform the gold market into a financial market from its present stage as a commodity market? The current situation presents individual investment in gold as a realistic answer to this question. Our total domestic household savings amount to as high as 12 trillion RMB, readily conditioned for investment in gold or rather turning the asset of the ordinary people from currency into gold. From the macro-economic perspective, it creates an additional channel to convert savings into investment balancing the demand and supply.

From the micro-economic perspective, allowing people to hold assets in gold can improve social welfare benefiting both the country and its people. Also, the dual characters of being an ordinary commodity and a currency allow gold to well hedge against risks. <end>

SundeckChina#1402401/8/06; 03:49:22

Good one China things don't just happen at random..."We have a plan!"...Aussie Sinogold (I think) was the first into the fray and there will be more to follow..

I get the feeling that I should be listening to a different selection of news media these days...unfortunately I don't comprehend any Asian languages and am therefore reliant upon "enlightened" English translations...being in the world with China today is a bit like what it must have been in the world in 1880 when the US was the "exploding" industrial nation...Oh well! Back to my Kipling stories! :-)


BelgianGold#1402411/8/06; 04:51:20

EU, Russia, China, South Africa, and many other nations, have been making "political" statements on gold whilst having gold "policies".
Conclude, that all the gold action is an "official" one, rather than a private one.
First, the general public was pushed away from gold, through the gold-sales hysteria...and now the opposite is encouraged officially.

Bringing gold from the back stage to the front, means that the existing monetary regime is being a gradual and orderly (disciplined) way as to not cause another gold-bubble in a vacuum ( cfr. 1971 > 1980). This means that the "new-gold" supporters do mean business, today !!! That's why all the other bubbles (housing-stock/bond/dollarmarket) will be deflated progressively.
This is the very nature of the "transition" that w've been talking about for so long now (5 yrs).
Soon, South America will join the "transition" idea.

GoldiloxSouth America#1402421/8/06; 07:51:52


I remember Atgentina making a gold reserves statement early last year, so I heartily concur with your prediction. I think that with NeoCon RADAR already active in SoAmer, they are making sure they "outrun" Iran and Sorth Korea, to use the hunter/bear analogy.

None of them wants to be the next Iraq, so staying off the "most wanted" list is a prudent political calculation.

KnallgoldFreeGold#1402431/8/06; 08:20:42

"So, Cavan Man, with those bases nicely covered, I don't know why you're faulting me for doing my part to stimulate a lively conversation"--TC

You were very successful,that was one of the most intense week of (Gold) discussion,I was so distracted to get my thoughts about FreeGold to a finalisation that I lost contact with my daily work sometimes :-( Thanks to you and all that participated.

Putting a few PR/monetary/political flaws aside,FreeGold is GREAT,anyone who does not think so is just not getting it (abstract to follow).

And no,China (and Russia) do NOT announce intentions to buy Gold.Just read "the art of list",with the 36 Chinese strategems described.This and their Konfuzian history forbids stupidities like Englands Gold sales.This is now the revaluation part!

Great week to all!

PS:the Kennedy murder is solved,a new documentary coming to cinemas by a german has some fine evidence/witness.It was Fidel Castro.

YGMSundeck#1402441/8/06; 11:41:53

Since the acceptance of China into the WTO and it's Gov't 'White Paper' on new mining laws and reg's there are at last count over 20 major & junior western Gold mining co's currently active in China. FWIW
Caradoc"Chinese currency reaches new high"#1402451/8/06; 12:16:39

Snip with details of China's new pricing mechanism:

The People's Bank of China, the central bank, began a new policy Wednesday of calculating the yuan's value against the dollar using a weighted average of the prices given by major banks. The highest and lowest offers are excluded from the calculation, the central bank said in a statement issued Tuesday.

***end of snip"


Belgian@YGM#1402461/8/06; 12:32:38

If I were China-Russia-South America...I would invite as much foreign expert goldminers as possible to dig for the precious on my territory...and pay them with excess dollar-fiat-confetti (reserves) in exchange for the precious "metal" to be physically stored in the National CB vault, waiting for the freegold finale !

Hasn't arabian oil been doing exactly the same, for many decades !?

It is the non dollar block of the planet that wants to consolidate its vastly growing excess of dollar-paper into a universal tangible...not to be dominated by the dollar regime.

Why is it that South Africa joined the CB gold reserve hints and not Australia or Canada (dollar block) !?

The goldmining business is also involved in the transition of papergold to physical gold. Much more regulation and control will be the final outcome.

USAGOLD / Centennial Precious Metals, Inc.A risk-free request, helping you enter the gold market with grace and confidence.#1402471/8/06; 14:37:22">Get a head start on the gold market!
YGMBelgian#1402481/8/06; 14:47:41

Why is it that South Africa joined the CB gold reserve hints and not Australia or Canada (dollar block) !?

I wish someone could answer that for me! My letters to Can Minister of Finance and the Opposition Party Finance critic get no replys as do requests for answers as to who gave the Gov't the right to sell off all our Gold reserves in the first place.

canamamiShanghai housing bubble bursts#1402491/8/06; 15:03:18,0,7585034.story?coll=la-home-headlines&track=morenews

The attached article states that the housing market in Shanghai has popped, and this may threaten the Chinese economy.

Of course, when one can no longer count on real estate as a store of value, or as a place to put one's excess savings (either as a lender or an owner), gold is often next on the list as the secure asset of choice. Hence, we may see more Chinese money move into gold.

TownCriervon Braun: 'Where have all the projects gone!'#1402501/8/06; 16:02:44

The latest 'Rocket School of Economics' commentary has been posted by Professor von Braun; this time he provides his views on the scramble for gold reserves among mining companies after years of shabby investment to support exploration and development initiatives.

Click URL above to access the current page and the 'Rocket School' archives.


White RoseSpot price crosses $540.#1402511/8/06; 17:34:37

Another mark bites the dust. I hope we start seeing $550 by this time tommorrow.
NedWow ! More breakthroughs......#1402521/8/06; 18:49:55

$541 spot of Dec 12/2005 approx. 3:00am now history, I see spot at $543 presently.

Next on the list is the London PM fix. Next breach is through $539.50 set on March 26, 1981. Almost surpassed again on Dec. 12, 2005 when the PM fix saw $536.50.

Surely to be tested tomorrow.

Next stop is $570/575.

All aboard Gold Express III.....hey which is Misetich !

Noble1Texas Hold-em#1402531/8/06; 20:36:16

It appears that one of our major foreign UST bondholders(China) may be getting ready to call our hand. I hope that we at least have pocket jacks(some physical left in our treasury). Aces would be nice if its all there. I fear we are on a bluff and deep storage gold doesn't sound like too solid a hand.
Even the credible threat of the CBofC diversifying into PG may convince Japan(the largest foreign holder of our debt) to try to take their seat before the music stops.
What are we going to do? Enquiring minds want to know. Where is the gold price going. If best comes to best(pocket aces) it only reaches the moon(in USD). If worse comes to worse(bluff), may God help the US economy, it goes to the stars.
If foreign debtholders diversify or even just fail to participate in future purchases of our debt(both highly likely), where are they going to put those USDs. We shut them out when they expressed interest in an oil company. They can and will purchase gold. They can and will purchase euros(whoopee). At least the euro has that 15% physical gold component. A bigger plus is the fact that the Iranian oil bourse will be denominated in euros. If that bourse begins to trade 10%+ of oil in a short period of time(and there is no reason-other than war-to think that it won't), we WILL see monetary fireworks. And we're looking at a short period of time here folks. Months. March. So far the coal has just been loaded in the burner. Better get on the train before it leaves the station.
My take is that if (when) these debtholders bail, we will have to bring our (US) gold into play. If we hold aces, then a 15% backing seems reasonable. In past postings I have seen mention of a $ POG that would represent. Would somebody please remind me. If we hold jacks, we will try our best to play them but I fear they may not hold up. We will probably lose the hand but not get knocked out of the tournament. If we are on a bluff, who knows what will happen. People don't like to get ripped off. Probably WWIII. We currently are, in fact, the empire de jour of the world and we should expect nothing less from our illustrious and enlightened leaders.

Back to Bodog.


PS: CB2. Please reconsider your decision to leave these halls. We have benefited greatly from your input. I have also been chastised and called names by some incredibly intelligent yet shallow minds within this forum.

Clink!$2T#1402541/8/06; 20:51:02

Snip :-
Nobel Laureate Joseph E. Stiglitz and Harvard budget expert Linda Bilmes plan to present this week a paper estimating the cost of the Iraq War at between $1-2 trillion. This is far higher than earlier estimates of $100-200 billion.

End snip.

The attached URL has quite a number of (polite) postings about the paper and some interesting comparisons in terms of magnitude of the various other "financial disasters" rolling down the pike towards us. For me (Engineer that I am) the most interesting was from a certain Dave Adams who penned :-

I was wondering what else could be done with $1 Trillion, so I just ran through a back-of-the-envelope calculation:

Current un-subsidized cost of photo-voltaic (i.e. "solar") power (i.e. the true cost): $9600 per Kilowatt

Number of Kilowatts capability that could be purchased with $1T:

1E12/9600 = 104,000,000 Kilowatts (KW)

Number of productive "solar" Kilowatt-hours per year:

8 hours/day X 365 = 2980

Quantity of Solar-Electric capacity per year that could be purchased for $1T (at today's prices)

104,000,000 X 2980 = 304 billion KW-Hours

The DOE estimates the total quantity of KW-Hours of electricity used by US homes at about 1.14 Trillion KW-Hours.

In other words, if its just $1T, then the cost of the Iraq War could have gone toward providing about 30% of the entire US home electricity requirements.

End snip.

Another poster compares this $2T estimate to the existing $10T U.S. government debt. And how was all that going to be paid for again ? Ah yes, Mr. B., I can already hear the whirring in the sky.


OZ@ Sir Belgian....your request#1402551/8/06; 21:06:13

A storey on why Canada gold was sold

GoldiloxAlt uses of $2T#1402561/8/06; 21:11:35

@ Clink,

Your fairly conservative projection does not even consider how much generating efficiency might be regained by putting a sizeable portion of that money into the development lab, and how much price efficiency would be realized by true mass production and marketing.

Unfortunately, it always seems to take serious crises to open people's minds to cleaner and less politically dependent alternatives.

But that is probably why gold will overshoot any reasonable parity adjustments. The gold market's lack of smooth transitions will likely mirror similar behavior in the energy markets.

I especially enjoyed the analogy of "to the Moon" vs. "to the stars."

YGMIs The Time Near?#1402571/8/06; 21:31:45

...when the world's populous finally realizes there is and always has been a one world currency and that currency is Gold? Will it take Gold trading freely at unrestrained and unmanipulated free market value in the thousands of dollars to have that realization hit home? Like Belgian wrote why do Australia and Canada's CB's ignore Gold after giving it up to the powers that be for a song and a few peices of IOU paper? Trying to wade thru the muddy waters, reading all, even reading between the lines of Mundell's papers, or the mass of speeches by heads of the world's CB'ers on the BIS website gives only clues and a headache. The only solution I hold dear to is "Own the Gold" and watch and wait, knowing full well whatever comes, owners of physical Gold in hand will be among a selct fortunate few in the money when the muddy waters become clear.
GoldiloxCanada Gold and Soviet Bankruptcy#1402581/8/06; 21:35:21


If you use the Optional URL box supplied by TC's input script, it will allow readers to click directly to your link.

What a great post. I have been through Puplava's site a number of times and seemed to miss that one, or else my fading memory is not recognizing it. I'm glad you found it.

Canada's government is often enigmatic. Why would a government so intent on labeling it's homegrown inventor, John Hutchinson, an "eccentric crackpot," so often raid his lab and confiscate his surplus-sourced "toys", thus fueling public skepticism of their disdain for his very non-traditional work?

Gandalf the WhiteIF --- IF --- and IF !!#1402591/8/06; 22:09:09

IF the US$ breaks the 88.80 level ---
IF even the POO stays steady --
IF the GOLD GODS smile today ---
The POG shall be $555 in NY by the "COMIX" close!!

YGMGoldilox#1402601/8/06; 22:17:02

Ed Steers Complete Essay on Canada Gold etc
YGMGATA's Collection of Golden Essay's#1402611/8/06; 22:30:36

Lots to pick and choose from here.
skiWhat's new in silver?#1402621/9/06; 00:21:39

I have been reading PM commentaries for a number of years. After a while you begin to seperate the writers that are solid and credible (Where is BB?) from those that over-hype, over-reach and exaggerate the facts. One of the people that I have come to respect is James Turk. Although I don't personally know him, I usually agree with what he has to say. Along these lines, I was a pleasantly surprised by one of his very recent commentaries.

The gold/silver ratio will not of course decline in a straight path, as is clear from the table immediately above. Silver is notoriously volatile, and understandably so. The competition for silver between its industrial demand and monetary demand can at times be intense, and volatility is often the result. But the point is, if I am right and the ratio falls, then perforce silver will outperform gold in the years ahead. That outperformance provides some reward to offset the risk from volatility one can expect from silver. end snip.

Thus, Mr. Turk now expects the gold-silver ratio to move in favor of silver as silver outperforms gold. So, yet another credible gold bull comes out on the side of silver.

*Sorry, no link given per forum guidelines.

TownCrierArgentina Cenbank rebuilding reserves#1402631/9/06; 05:15:51

BUENOS AIRES, Argentina, Jan 8 (Reuters) - Argentina's Central Bank will begin buying euros in the foreign exchange market to help bolster its foreign reserves, which were sharply reduced to pay back the country's debt with the IMF, a Central Bank official said on Sunday.

...The government of President Nestor Kirchner slashed the bank's reserves last Tuesday to $18.5 billion from $28.05 billion previously, using the funds to pay its full $9.5 billion debt to the International Monetary Fund.

The Central Bank began diversifying its reserves several years ago to include euros, yens, sterling pounds and gold, as well as U.S. dollars. It now intends to continue that process.

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

That's a riddance of $9.5 billion in dollar-reserves that it won't likely be rushing out to reacquire for its own sake.

Note also the growing prominence of gold appearing in reserve-related announcements such as this. And if you've been reading here for any length of time, you surely know why that is.


Ned"Canada's CB's ignore Gold "#1402641/9/06; 05:22:43


I've heard it said and there are days that I agree, Canada does not need gold. The theory goes that with the 2nd largest oil reserves in the world (after Saudi), bank reserves are indeed the oil reserves.

Canadian loonie backed by oil? Perhaps, check the strength of the CDN buck.

I would think that a Central Bank, of any stripe, must have reserves whether they be black or golden, yes?

Have a golden day Sir.

P.S. You are a Canuck yes? Have you heard this theory before?

Clink!@ G'lox#1402651/9/06; 08:17:04

Yep, I just knew that snip would catch your eye ! LOL !

geShanghai's hot housing market has fizzled#1402661/9/06; 08:24:53,0,7585034.story?coll=la-story-footer&track=morenews

after a run-up fed by speculators, threatening a significant part of China's economy.
GoldiloxCanada Reserves#1402671/9/06; 08:29:21

@ Ned,

"I've heard it said and there are days that I agree, Canada does not need gold."

One question. How many of those oil reserves actually "belong" to the Canadian CB?

Perhaps it's one thing for a CB to say "Our clients have reserves," and quite another to say "We have reserves."

I'd like to hear views on this from those who understand CB roles better than I do.

GoldiloxDarwin awards - Intelligent Design?#1402681/9/06; 08:41:26

Totally off-topic, so I won't post any snips, but I know there are fans here, and the awards for 2005 are posted.
USAGOLD - Centennial Precious Metals, Inc.The Gathering Storm and Gold - - - - by Michael Kosares#1402691/9/06; 09:49:21

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USAGOLD / Centennial Precious Metals, Inc.Pre-1933 gold coins at better-than-bullion pricing!#1402701/9/06; 09:55:46

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Buongiorno!Ahhh--Canada! @ Ned and Goldilox#1402711/9/06; 10:31:37

Let me take a very humble swing at your good questions....
Overview: Canada has about one-half the area of USA and (former) USSR, but only roughly ten per-cent of the population. Natural resources are abundant, running all the way from asbestos to zinc. People there are well-educated, energetic, and pretty much together. (Huge natural resources "owned" by a small population....think "rich".)

Energy resources are substantial, but much of that is reflected in tar sands. (Think oil shale, think BTU's in and BTU's out...) Then think of the abundant other minerals in that treasure chest--and we have a start on an answer to your question about oil-or-gold.

The function of their Central Bank, IMHO, should be to tweak the system of credit availability, interest rates, general governing policy, etc to see the temperature of the water is suitable for commerce and that lubrication is getting to the gear boxes.

Oil and other assets in the ground must be harvested in order to have tangible value. Profits are realized by selling all of those wonderful raw materials to a world parched for such stocks--or (better still) in the manufacture finished goods that sell for many times that markup.

Canada is doing both. Very well, IMO--and therein lies her greatest treasure of reserves. (Central Bank holdings are subject to being loaned, sold, etc (we all know the drill), and I am betting the true wealth of Canada will be reflected in the items I have mentioned. Much more can and should be said about this--a book, anyone?

Bottom line, because of these factors, I think the Loonie will appreciate about eight per-cent against the Dollar during 2006. We shall see. Good luck to our "cousins" up north!

Ned@ Goldilox#1402721/9/06; 10:35:01

I'm guessing. Reserves from an "access" point of view. Explain why Canada's currency is going up and is regarded as the "go to" currency of late while the greenback is a point of nervousness. Is lack of gold a function of this. Wondering out loud.

U.S. has "deep storage" gold?

Canada has "deep storage" oil?

YGMBuongiorno...Close but no Cigar :-)#1402731/9/06; 10:35:30

Canada is actually bigger than the USA by a wee bit. Canada has the second largest land mass in the world. FWIW
YGMCanada's Dollar #1402741/9/06; 10:41:30

IS a resource & mineral productivity based Currency. This is always a deciding factor in the strength of our dollar, even w/o Gold reserves in the CB. The list of known in ground natural resources is second only to Russia and we all know the nightmare associated with doing business or extracting resources in Russia. Now Canada is fast becoming a world factor in the production Diamonds as well.
YGMDollar Bills#1402751/9/06; 10:44:45

Just IOU's for future productivity. The (any) dollar is now only as good as what Joe Blow is going to produce next monday. IMHO
Buongiorno!glasses on now!#1402761/9/06; 10:51:12

@ YGM--mia culpa! Mis read my Atlas. You are correct--

Clink!Congressman Paul sounds off on finance scandals#1402771/9/06; 11:07:39


When the federal government redistributes trillions of dollars from some Americans to others, countless special interests inevitably will fight for the money. The rise in corruption in Washington simply mirrors the rise in federal spending. The fundamental problem is not with campaigns or politicians primarily, but rather with popular support for the steady shift from a relatively limited, constitutional federal government to the huge leviathan of today.

We need to get money out of government. Only then will money not be important in politics.

End snip:-

Forgive me for sounding jaded, but how many politicians even have the political incentive, let alone the will, to even think of cutting more than token sums ? By Parkinson's Law, the engine of bureacracy can't be slowed - it keeps on going faster and faster till it runs out gas, at which point it stops altogether. The best we can hope for is that it doesn't fly off a curve before that happens.

Gandalf the WhiteGOOD Jumping, SPIKE !!! <;-)#1402781/9/06; 11:32:43

Note the now "classic" signature of the "COMIX" trading action.
Today the US$ was "pumped", or it would have hit $555 !
Sir Goldilox -- Please call me when the US$ breaks the 88.80 level and we shall celebrate !!
GO SPOT (Yellow that is !!)

Federal_ReservesThe road to bankruptcy#1402791/9/06; 11:39:40


Official US Treasury funded debt soared by $US 237.6 Billion in the last quarter of calendar year 2005.

12/30/2005 $8,170
09/30/2005 $7,933
Net Increase 237

Annualized debt growth about 12% growth per year now compared to 3-4% GDP. Unsustainable.

Going to have to raise taxes on the rich soon and/or drastically cut xfer payments to the poor. Should be an exciting election year.

I'm still looking for a RICH MAN's panic similar to 1907, when they realize that ultimately, as US citizens they are the bagholders for this debt.

GoldiloxRich Man's Panic#1402801/9/06; 12:16:10

@ Federal_Reserves,

I think the growth in Caribbean banking and their "investment" in US T's is already indicative of that.

How many US contractors were in the CONgressional target sights for moving offshore to evade paying taxes to the trough they so willingly slop from?

GoldiloxFOCUS: Gold Mkt Too Small For Chinese Diversification#1402811/9/06; 12:56:43


LONDON (Dow Jones)--The world gold market is too small for China to achieve any meaningful diversification into the precious metal, leaving it likely the country will instead follow a more cautious, dollar-bound investment path, analysts said Monday.

Sentiment towards gold has been boosted since Friday, when it was reported that China may start to diversify its foreign exchange reserves away from the U.S. dollar and government bonds.

Hu Xiaolian, director OF China's State Administration of Foreign Exchange, said in a statement last week that the agency plans to "further improve the structure of currency assets in the foreign exchange reserve portfolio and continue to broaden foreign exchange reserves' investment channels."

Taken by many market participants to be a plan to move into gold, the precious metal jumped from an intraday low of $523.15/oz to around $540/oz as the possibility was widely welcomed by gold traders. The metal reached a fresh 25-year high of $544.40/oz Monday.

According to World Gold Council data, China has around 600 metric tons of gold in its holdings, about 1.1% of its total reserves. This ratio is tiny when compared with countries such as the Netherlands (722.4 tons or 51.3%) or the European Central Banks (719.9 tons or 20.6%), but closer to the gold reserves-holdings ratio of Japan (765.2 tons or 1.3%). But analysts remain skeptical over the likelihood of an aggressive move into gold.

"We view China's ability to raise gold holdings to a meaningful level for diversification as constrained, as the gold market is too small for this to happen without a serious price distortion," said Barclays Capital analyst Yingxi Yu.

"If it were to raise (its gold holdings from 1.1%) to 10%, it would absorb some 4,680 tons, or around two years of global mine production. Investing in other commodities like oil and base metals would be more possible, or the outcome could well be a combination of elements from different asset classes," she added.

To bring China in line with other international standards is unlikely, said HSBC analyst Alan Williamson.

"For China to raise its gold in reserves to the international average of 8.9% would require the purchase of an additional 3,613 tons," said Williamson. "For China to raise its gold in reserves to the ECB benchmark of 15% would require the purchase of an additional 6,501 tons," he added. By comparison, most European national banks have agreed to limit their total gold sales to 2,500 tons in the five-year Central Bank Gold Agreement, signed in 2004.

"The bulls in the market would argue that at a sharply higher gold price - an inevitability if China and/or Japan did begin to buy gold on the open market - the volumes required would be commensurately lower. Nevertheless, liquidity remains a key consideration," Williamson said, adding that his statistics are based on a gold price of $528/oz.

Williamson said it was more likely China would look at utilizing the gold reserves in a "more pro-active manner." "Rather than accumulating U.S. treasuries, for example, the Chinese government could use the reserves to secure energy and other commodity resources overseas."

But he pointed out that such a strategy isn't without its problems, as last year's attempted purchase of U.S. independent oil producer Unocal by Chinese oil company CNOOC proved. The $18 billion deal ran into significant political pressure in the U.S. and was abandoned last August, with Unocal subsequently purchased by Chevron in November, Williamson said.

A further problem comes from the fact that should China stop acquiring U.S. dollars with its reserves, the greenback would come under extreme pressure, something the Asian country has been keen to prevent in order to protect its export sector. For this reason, U.S. dollar-denominated treasuries and bonds look likely to remain the most desired assets for the Chinese, analysts believe.

Also, it's still uncertain whether or not increased volumes of gold changing hands at the gold fix in recent weeks are anything to do with Asian central banks buying gold.

"We have no way of knowing if this is true," said UBS analyst John Reade. "We have no evidence that central banks in the region are adding to gold reserves, but we noted a lot more interest in the metal than we have seen in recent years," Reade added.

Spot gold fixed in London Monday at $541.50/oz.


Denial isn't just a river in Egypt.

MKGoldilox: China can't get the gold it wants#1402841/9/06; 13:37:33

Quite an nteresting thought:

Let me translate.

"China would like to add gold reserves, but it cannot because there is not enough supply."

There's a hidden message there - in that attempt to throw cold water on this rally - worth contemplating. The private investor, I am happy to say, is not caught in such a quandary, nor is he or she forced to hold dollars because the market cannot accomodate the demand.

Could Barclay's have argued more forcefully in favor of private gold ownership? We would be hard-pressed to come up with a more convincing argument than the one Barclays and Dow Jones makes while attempting raise the specter of the bear.

The message in the article is straightforward: China would like to get out of the dollar at some level, but it can't.

Now, what would you do if you were China? Commodities rising in an inflation induced price rally; shut out for the most part from acquiring commodity producing companies; and stuck with an ever-growing pile of fiat dollars to which history has consigned a dubious conclusion.

Let's just say that the whole gold rally doesn't come to a quick conclusion simply because an analyat at Barclay's with an accomodative last name proclaims that there's not enough gold available fro China to craft a dollar escape.

In fact, it persuasively argues the exact opposite.

Thanks for bringing the article forward.

MKSorry all#1402851/9/06; 13:39:43

For the scratches and reposts and then errors anyway. . .

Very busy here today.

CytekUSA GOLD#1402861/9/06; 13:40:48

Well i haven't posted for a while. But i was introduced to this site from a friend of mine back in 99'. Been reading it since faithfully. You guys still know what's really going on out there. THANKS for your continued input. I started buying physical at $280 and have been ever since. The best investment of a lifetime. Get it, it's still not too late to start.


GoldiloxBarclays' China-Gold Article#1402871/9/06; 13:46:58

@ MK,

Pretty weak, wasn't it.

I agree that the most telling part of the article was public recognition that China wants out of the dollar investment corner it is painted into.

The UnoCal offer was an interesting "test of the waters," but far be it from the largest country in the world to stop trying after that one political setback.

If they should replace the US and Canadian banks as the financier of choice for the miners, the HUI/XAU would probably achieve liftoff.

canamamiChina Gold Diversification#1402881/9/06; 13:52:17


But what else is there, besides gold? If China buys other currencies, that action will drive those currencies up, affecting international trade and political relations. Moreover, other countries will become very leery if the Chinese bank/government tries to buy up national resources (commodities), or the companies which mine those resources. So, China has to put its trade surplus into something, and presumably some of that surplus will find its way to gold. Parking the money in gold is arguably safer politically and economically than in non-$US currencies, even if it drives up the gold price.

It may be that China will either have to import more, or export less, to put an end to accumulating dollars (and its trade surplus generally). India has developed without encountering the same problem, by keeping its international trade more in balance.

One other point: Chinese private demand. If the housing boom has popped, then private Chinese money will find its way to gold.

Chris PowellGATA comment on Dow Jones story on Chinese FX diversification#1402891/9/06; 13:56:48

The bad guys are whistling in the dark.

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.

Flatliner@ Mkt Too Small#1402901/9/06; 14:01:07

Why, this market is too small concept is just silly. It's huge! Millions of ounces trade on the NYMEX all the time. Dang, last time gold got tight and Oil wanted to acquire gold, exchanges popped up everywhere with a major surplus of gold. Back then, the price dropped and, it seems, everyone that wanted gold got it.

Someone should inform that analyst that anyone can buy all the gold they want with a couple clicks of a mouse. Also, China would stand to make a little profit too. Just think, February contracts are really cheap and it doesn't take hardly any money to acquire them! I mean, really think about it, they could hedge the next trillion dollars of US deficit in all markets around the world for pennies on the dollar. Then, just sit back and let the gold roll in!

Hey, the Chinese even have their own gold markets. Someone should tell them to just go shopping and get out of the headlines! I mean really… we've got a booming economy to think about and no one in their right mind would question that. ;)

Ah ha ha ha ha ha ha ha… I hope everyone here has their own water rights.

MKGoldilox, Canamami, Cytek, CP#1402921/9/06; 14:10:29

Watch for China to move in directions unforeseen -- or perhaps foreshadowed by its actions in the past.

There is nothing to prevent China from contracting at the source. The pressure could come to the gold market from a different direction than the one anticipated.

Would China be desperately wounded by paying 125% of the current market price to buy gold?? 150%?? 200%??

Clink!@MK#1402931/9/06; 14:18:44

Would China be desperately wounded by paying 125% of the current market price to buy gold?? 150%?? 200%??

Why, is that what they were offering you ?!! LOL !!


GoldiloxChina yuan closes at 8.0641 to US dollar vs 8.0668 in exchange-traded market#1402941/9/06; 14:26:16


ING (AFX) - The Chinese yuan closed on the exchange-traded market at 8.0641 to the US dollar, ending the day at a post-revaluation high, according to traders.

The price rose from the close of 8.0668 on Friday, the previous trading day, as it strengthened against the dollar in the first day of its second week of trading under a new market-maker regime.

Today's central parity rate was set at 8.0665 to the dollar. The central bank allows a trading band of 0.3 pct on either side of the midpoint.

On Jan 4, China launched an over-the-counter system for the interbank foreign exchange market, allowing two market participants to make currency trades on credit without the intervention of a third party.


Just some more FAT for the fire.

GoldiloxCNBC Poll#1402951/9/06; 14:29:14

CNBC's Closing Bell Poll is:

Would you buy a car made in China?

Now see what we've done by shining a spotlight on all this China bruhaha!

MKBy the way, canamami#1402961/9/06; 14:34:41

Good point.
968@ Flatliner#1402971/9/06; 14:36:55

Can you please explain me how a papermarket, that has an UNLIMITED supply of paper, can fulfill delivery against a LIMITED amount of gold ?
For your information : once upon a time in '71 there was a UNLIMITED supply of paper that could no longer be mathematically converted against an LIMITED supply of gold...

TownCrierGold Buyers' Group -- Update#1402981/9/06; 14:54:25

The Uncirculated King Willem coins have sold out. XF Kings and Unc Queen Wilhelmina still available in this discount allotment -- while supplies last.


Flatliner@968#1402991/9/06; 14:57:14

Smile! Hang on to your physical. Life will be good to you. And remember that once upon a time, the liquidity in the paper market drove the physical market price down.

It seems that China might be in a difficult position when it comes to finding gold. As MK points out, the easiest most private way to acquire might be to contract with the source. Another avenue is to go on vacation and go jewelry shopping! Let's see 155,000 tonnes exist, 30,000 tonnes locked up in central banks. That means that 80% of the gold in the world is free for them to buy. Don't you think the wife of the CB head in China would look nice in a 1 ounce 22k gold necklace from Tiffanys?

Time will be our guide.

TownCrierBrazil's central bank sells $417 mln in swaps#1403001/9/06; 15:09:31

SAO PAULO, Brazil, Jan 9 (Reuters) - Brazil's central bank said on Monday it sold 8,800 currency swap contracts linked to short-term interest rates, canceling out about $417 million in debt instruments indexed to the dollar.

The auction marked the 31st time since November that the bank has offered such swaps...

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

Like Argentina, the Brazillian central bank appears to have thrown out the old rulebook and looks poised, ready to play a new game for the days ahead. Any guesses how long before 'gold' is mentioned in association with Brazil, too?


GoldiloxCurrency Swaps#1403011/9/06; 17:03:24

"SAO PAULO, Brazil, Jan 9 (Reuters) - Brazil's central bank said on Monday it sold 8,800 currency swap contracts linked to short-term interest rates, canceling out about $417 million in debt instruments indexed to the dollar."


Can you elaborate on this for the unititated? What is a "cuurenct swap", and how does it cancel out a debt?



Goldilox"Currency swap"#1403021/9/06; 17:04:51

Sorry for the typos.
Cavan ManChina Gold Discussion#1403031/9/06; 17:10:32

Procuring hard metal will enable China to pay for natural resources going forward which are denied to her today; e.g., Unocal. Having the gold enables the rules. If the price of gold is driven up to a relatively high (historical) level from Chinese buying and maintained there more/less, gold could be featured again and rightfully so in the forex showcase of sovereign nations. I am setting aside the Murphy/GATA argument as well as the freegold tautology.

If China buys metal at (relatively) reasonable prices indefinitely with USD-good. If Chinese buying (current) precipitates are paradigm shift in global monetary dynamics-good. Either scenario sees China playing the trump card.

USAGOLD Daily Market ReportPage Update!#1403041/9/06; 18:02:38">
The Daily Gold Market Report has been updated.

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MONDAY Market Excerpts

January 9 (from Reuters) -- COMEX February gold contracts jumped$9.30 to $550.50, after trading between $536.50 and $551.40, the priciest for benchmark futures since March 1981.

Gold raced higher after a flurry of profit taking at the open, as bullish traders pushed the market up to retest highs from Asian and European trading. (Investors in Japan were absent due to a holiday but dealers and analysts noted fund buying from elsewhere in the region.)

"You saw fairly steady fund buying through most of the day, and you saw some dealer buying too," said Andy Montano, a director at ScotiaMocatta in Toronto. "It seemed to be more a sentiment move than anything else and there didn't seem to be any significant interest in selling, and so the buying just kept taking it upwards and upwards."

The day's rally in gold, an alternative to more traditional investments, was unusual in that it coincided with a strong stock market and with a firmer dollar in the afternoon. The Dow Jones Industrial average rose above 11,000 for the first time in 4-1/2 years.

"There seems to be some pretty good economic strength in the markets in general and that is giving rise, I would imagine, to some concerns over inflation," Montano added.

Market sentiment on gold is overwhelmingly bullish amid a positive supply/demand outlook for 2006 and as funds continue to diversify into commodities and away from currencies and the stock market to boost returns.

(from MarketWatch) -- The dollar has come under pressure in the past week from expectations that the Federal Reserve is approaching the end of its rate-raising cycle. At the same time, high energy prices have stoked inflation fears, bolstering demand for gold.

"We expect continuing record U.S. budget and trade deficits to weigh on the greenback," said P. Mark Smith, analyst with Dundee. "The greenback could weaken further and faster if Greenspan's replacement takes the chair and eliminates rate hikes or reduces rates."

Ben Bernanke is scheduled to take over as chairman of the Fed from Alan Greenspan at the end of January.

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

TownCrierGold scales 25-year high#1403051/9/06; 18:11:43

(Bahrain Tribune) January10,2006 -- ..."[Some] People have had for many years a very negative view of gold and that view is now changing.

"There is a lot of wealth creation in countries that have an affinity with gold," said Robin Edwards, president of UK-based Sabre Fund Management.

"People are allocating money to gold," he said.

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

MKGold in perspective. . .Lest we lose sight of what has happened#1403061/9/06; 18:50:54

Ran into this Reuters report in my early evening reading. Though it worthwhile to pass along. Apologies if someone else has already posted it.

There seems to be some pretty good economic strength in the markets in general and that is giving rise, I would imagine, to some concerns over inflation."

******At its peak, gold was up more than 5 percent from a week ago, 18 percent from some two months earlier and 30 percent from a year ago. The price has more than doubled in five years.******

Market talk that China and other central banks in Asia -- which jointly have $2.6 trillion in foreign currency assets -- might be looking to diversify some of their reserves into gold had underpinned sentiment since late last year.

China said on Thursday it planned to explore new ways of using the country's foreign exchange reserves and broadening their investment scope. It has 600 tonnes of gold in its reserves, accounting for only 1.2 percent of the total.

Dealers said worries about rising energy costs and general security concerns in the Middle East had prompted funds and investors to diversify away from equities, currencies and bonds.

"The market overall does look strong," said Frank Aburto, a broker at Rosenthal-Collins Group in New York. "I don't think it is going to collapse. Setbacks are an excuse to go into the market and go long, which is what the funds are doing at this point."

Analysts said speculative positions in the U.S. market were high but had been stable for the past four to five weeks and there was no pressure on market players to liquidate.

HektorChina and the market price of gold#1403071/9/06; 20:00:19

"Would China be desperately wounded by paying 125% of the current market price to buy gold?? 150%?? 200%??"

If China paid some multiple above the market price for gold, that would immediately BECOME the market price for gold.

Cavan ManChina/OIL/Gas#1403081/9/06; 20:12:17

Beijing gets key ally in Bolivia's Morales

Bolivian President-elect Evo Morales has declared China his ideological ally after inviting Beijing to help his country develop its vast gas reserves.

These deals were exclusive domain of US industry giants. Competition on this scale likely means great conflict ahead.

Cavan ManUSAG 14303#1403091/9/06; 20:13:16

Anybody catch that one? China will buy resources with gold IMHO.
FlatlinerDollar Dazed?#1403101/9/06; 20:20:00

Could there be a Head and Shoulders in the daily chart? Seems to look that way. The weekly and monthly charts seem to express that the dollar will get support for a couple more months before the big squeeze hits it. But, that seems to go against the emotion that's stirring the world.

All you paper pushers, keep in mind that it takes time to convert into physical. Figure out your timeline you may find that it's 2 or 3 weeks at the fastest.

Flatliner@Cavan Man#1403111/9/06; 20:22:31

Physical gold holders will be the only ones that will be able to afford to buy resources.
SmeagolOf state secrets...#1403121/9/06; 21:03:57

"If China paid some multiple above the market price for gold, that would immediately BECOME the market price for gold." - Hector

But how could that happen - IF they, and those private ones whom they purchase It from, agree to keep silence, precious? One has never had to pay market price for It...perhaps this is where the sseparation of It from the paper-market price begins? Or has begun?


GoldiloxGold for resources#1403131/9/06; 21:08:55

@ Flatliner,

Sort of amounts to an evolution from paper swaps to resource swaps.

The spinsters can call it what they will, but "backing" is in, even if it doesn't manifest itself as "currency backing".

Still hoping TC has the time and inclination to explain "debt swaps" to those of us (me, in particular) not familiar with that terminology.

GoldiloxEQ map#1403141/9/06; 21:17:20

Somewhat tangential, but interesting that there is a large cluster of late in Alaska and the Andes, both resource rich regions. Not meant to propound any conspiracy theories, as resources do tend to surface in tectonically active regions.

If EQ activity is in a rising cycle, the mining industry may experience indications of it earlier than others.

Druid Attack on Iran: A Looming Folly#1403151/9/06; 21:20:22


Monday 09 January 2006

The wires have been humming since before the New Year with reports that the Bush administration is planning an attack on Iran. "The Bush administration is preparing its NATO allies for a possible military strike against suspected nuclear sites in Iran in the New Year, according to German media reports, reinforcing similar earlier suggestions in the Turkish media," reported UPI on December 30th.

"The Berlin daily Der Tagesspiegel this week," continued UPI, "quoted 'NATO intelligence sources' who claimed that the NATO allies had been informed that the United States is currently investigating all possibilities of bringing the mullah-led regime into line, including military options. This 'all options are open' line has been President George W Bush's publicly stated policy throughout the past 18 months."

An examination of the ramifications of such an attack is desperately in order.

1. Blowback in Iraq

The recent elections in Iraq were dominated by an amalgam of religiously fundamentalist Shi'ite organizations, principally the Dawa Party and the Supreme Council for Islamic Revolution in Iraq (SCIRI). Both Dawa and SCIRI have umbilical connections to the fundamentalist Shi'ite leadership in Iran that go back decades. In essence, Iran now owns a significant portion of the Iraqi government.

Should the United States undertake military action against Iran, the ramifications in Iraq would be immediate and extreme.

In the first eight days of January, eighteen US troops have been killed in Iraq, compounded by another twelve deaths from a Black Hawk helicopter crash on Saturday. Much of the violence aimed at American forces is coming from disgruntled Sunni factions that have their own militias, believe the last elections were a sham, and hold little political power in the government.

If the US attacks Iran, it is probable that American forces - already taxed by attacks from Sunni factions - will also face reprisal attacks in Iraq from Shi'ite factions loyal to Iran. The result will be a dramatic escalation in US and civilian casualties, US forces will be required to bunker themselves further into their bases, and US forces will find themselves required to fight the very government they just finished helping into power. Iraq, already a seething cauldron, will sink further into chaos.

2. Iran's Armaments

Unlike Iraq, Iran has not spent the last fifteen years having its conventional forces worn down by grueling sanctions, repeated attacks, and two American-led wars. While Iran's conventional army is not what it was during the heyday of the Iran-Iraq war - their armaments have deteriorated and the veterans of that last war have retired - the nation enjoys substantial military strength nonetheless.

According to a report issued by the Center for Strategic and International Studies in December of 2004, Iran "has some 540,000 men under arms and over 350,000 reserves. They include 120,000 Iranian Revolutionary Guards trained for land and naval asymmetrical warfare. Iran's military also includes holdings of 1,613 main battle tanks, 21,600 other armored fighting vehicles, 3,200 artillery weapons, 306 combat aircraft, 60 attack helicopters, 3 submarines, 59 surface combatants, and 10 amphibious ships."

"Iran is now the only regional military power that poses a significant conventional military threat to Gulf stability," continued the CSIS report. "Iran has significant capabilities for asymmetric warfare, and poses the additional threat of proliferation. There is considerable evidence that it is developing both a long-range missile force and a range of weapons of mass destruction. It has never properly declared its holdings of chemical weapons, and the status of its biological weapons programs is unknown."

A MILNET brief issued in February 2005 reports, "Due to its position astride the Persian Gulf, Iran has constantly been a threat to the Gulf. The so called 'Tanker' wars in the late 1980s put Iran squarely in the bullseye of all nations seeking to transport oil out of the region. Even the small navy that Iran puts to sea is capable enough to harass shipping, and several cases of small boat operations against oil well heads in the Gulf during that period made it clear small asymmetrical tactics of the Iranian Navy could be quite effective."

"More concerning," continued the MILNET brief, "is the priority placed on expanding and modernizing its Navy. The CSIS report cites numerous areas where Iran has funded modernization including the most troublesome aspect, anti-shipping cruise missiles: 'Iran has obtained new anti-ship missiles and missile patrol craft from China, midget submarines from North Korea, submarines from Russia, and modern mines.'"

It is Iran's missile armaments that pose the greatest concern for American forces in the Gulf, especially for the US Navy. Iran's coast facing the Persian Gulf is a looming wall of mountains that look down upon any naval forces arrayed in those waters. The Gulf itself only has one exit, the Strait of Hormuz, which is also dominated by the mountainous Iranian coastline. In essence, Iran holds the high ground in the Gulf. Missile batteries arrayed in those mountains could raise bloody havoc with any fleet deployed below.

Of all the missiles in Iran's armament, the most dangerous is the Russian-made SS-N-22 Sunburn. These missiles are, simply, the fastest anti-ship weapons on the planet. The Sunburn can reach Mach 3 at high altitude. Its maximum low-altitude speed is Mach 2.2, some three times faster than the American-made Harpoon. The Sunburn takes two short minutes to cover its full range. The missile's manufacturers state that one or two missiles could cripple a destroyer, and five missiles could sink a 20,000 ton ship. The Sunburn is also superior to the Exocet missile. Recall that it was two Exocets that ripped the USS Stark to shreds in 1987, killing 37 sailors. The Stark could not see them to stop them.

The US aircraft carrier Theodore Roosevelt is currently deployed in the Persian Gulf, with some 7,000 souls aboard. Sailing with the Roosevelt is the Tarawa Expeditionary Strike Force, which includes the USS Tarawa, the USS Austin, and the USS Pearl Harbor. The USS Austin is likewise deployed in the Gulf. The Sunburn missile, with its incredible speed and ability to avoid radar detection, would do terrible damage these ships if Iran chooses to retaliate in the Gulf after an American attack within its borders.

Beyond the naval threat is the possibility of Iran throwing its military muscle into the ongoing struggle in Iraq. Currently, the US is facing an asymmetrical attack from groups wielding small arms, shoulder-fired grenades and roadside bombs. The vaunted American military has suffered 2,210 deaths and tens of thousands of wounded from this form of warfare. The occupation of Iraq has become a guerrilla war, a siege that has lasted more than a thousand days. If Iran decides to throw any or all of its 23,000 armored fighting vehicles, along with any or all of its nearly million-strong army, into the Iraq fray, the situation in the Middle East could become unspeakably dire.

Druid: March, shaping up to be one hell of a month.

GoldiloxChina gold acquisitions#1403161/9/06; 21:22:59

@ Smeagol,

As we saw in Another's theories on the gold-oil trade in the ME, that depends very much on who they obtain it from and how public the sale information is.

I would not put it past TPTB to arrange for them to get more than announced, IAOF (if, and only if) they publicly sell some on the open market to keep the price in check.

Not a supportable hypothesis - pure speculation.


Rook.,.#1403171/9/06; 22:55:47

Greetings Druid, The usagold forum no longer has open topics. Linking to commentary is probably ok.
GoldiloxThe Road Ahead - Rob Kirby#1403181/10/06; 04:47:37


For those of you who have not been paying attention, there has been a considerable amount written recently about the Fed's announcement to "abolish" the publication of M3 [money supply] data. Most of what is being written centers on the notion that M3 data is going to be withheld to mask visible statistical manifestations of INFLATION.

With the past couple of Mondays falling close on the heels of first Christmas – and then New Years – I've had the occasion to read up a little more on this topic than usual. To kick off the New Year, here are a few snippets of what I've been reading.

Just The Facts…Nothing But The Facts

Last week market pundit - Peter Grandich, gave us his take on a statement by China's foreign exchange regulator re: rebalancing reserves,

Put this statement somewhere and look back in a few years and you will have in your hands a part of history. What this statement says, IMHO, is that China's rapidly-growing foreign exchange reserve, of which an estimated 70 percent is invested in U.S. dollar assets, is going to move away from the U.S. dollar and government bonds and into other areas (one of which, I believe, is gold and why gold has been rallying so strongly).

I wholly concur with Mr. Grandich's sentiment about the significance of this ‘announcement’ and I also share the view that most of the main stream media has been negligent in reporting its importance.

Inflation For The Nation…..And The Rest of the World Too!

Another notable and highly relevant piece that ‘caught my eye’ was Robert McHugh's most recent offering, The Fed's Money Supply Armament is Underway. In this well timed, well researched effort McHugh gets at the heart of the soon to be discontinued M3 issue when he reveals,

M-3 has been launched into outer space, up another $56.3 billion last week, up $92.4 billion over the past two. This is some real horsepower. Over six weeks, the meaningless figure, ahem, is up $177.8 billion. These annualized growth rates are 28.7 percent, 23.6 percent, and 15.3 percent respectively. Those are the seasonally adjusted figures. The raw, non-seasonally adjusted, figure is up $293.3 billion over the past 12 weeks, on a pace to add 1.2 trillion in money to the economy. Wow. There must be a need for this. Maybe the master Planners see a coming need to monetize our debt? To support markets? They tell us the economy is good, so clearly they cannot be stimulating our way out of a recession. There's a lot of money flooding the economy and it has to go somewhere. Right now it is lifting markets.

That's right folks – soon to be discontinued money supply data ALREADY showing annualized growth rates in excess of 28% - and the Fed would have us all believe that this is a non event. McHugh opines that the "master Planners" perhaps see a coming need to further monetize [the] our debt?

In another brilliant piece of reporting, Jim Willie points out how "official" reported GDP figures and estimates are at odds with empirical realities in interest rates [inverted yield curve] and miss the mark by purposely ‘underreporting current inflation,’

….All this blizzard of evidence must be placed against a backdrop of an inverted Treasury yield curve. The 5-yr TBill yield is still below both the 2-yr and the 10-yr TBill yield. The bond market has it right, and fully contradicts the corrupted manhandled falsified GDP economic growth statistic….. It was mostly price inflation, not removed properly, then labeled as growth, aided by hedonic lifts to technology spending, compounded by chain weighting.

Slippery When Wet

I've already pointed out the coincidental timing of the cancellation of M3 data and the planned beginning of trade of Iran's new Petro-Euro Oil Bourse. Recent empirical observations include the following:

The stock market continues to rise - even in the face of tepid job growth numbers.

The price of oil has resumed it's upward climb.

The price of host of other commodities [including gold] has done the same.

Market pundits [like Peter Grandick] are pointing out that the U.S. dollar has now 'put in a technically significant double top.'

All Roads Lead To Rome?

With so much that I read and experience in the real world pointing to the likelihood of a pronounced bout with hyper-inflation in the near future – I thought it would be more than fitting to review an invaluable piece I came across recently, penned by Eric Englund - and titled, Surviving Hyperinflation.

If, and when a hyperinflationary scenario truly unfolds, this paper and related links should serve as perhaps a blueprint or at least a roadmap – providing ‘big picture guidance’ to entrepreneurs, managers and individual investors alike since – in the New Year - we will all likely come ‘face to face’ with the true WMD [Weapon of Mass Destruction]:


Rob ends the article with a picture of his proposed WMD. Well worth the click!

ArcticfoxAttack on Iran: A Looming Folly#1403191/10/06; 06:08:50


Conclusion: Is Any of This Possible?

The question must be put as directly as possible: what manner of maniac would undertake a path so fraught with peril and potential economic catastrophe? It is difficult to imagine a justification for any action that could envelop the United States in a military and economic conflict with Iraq, Iran, Syria and China simultaneously.

Iran is suspected by many nations of working towards the development of nuclear weapons, but even this justification has been tossed into a cocked hat. Recently, Russian president Vladimir Putin bluntly stated that Iran is not developing its nuclear capability for any reasons beyond peaceful energy creation, and pledged to continue assisting Iran in this endeavor. Therefore, any attack upon Iran's nuclear facilities will bring Russia into the mess. Iran also stands accused of aiding terrorism across the globe. The dangers implicit in any attack upon that nation, however, seem to significantly offset whatever gains could be made in the so-called "War on Terror."

Unfortunately, all the dangers in the world are no match for the self-assurance of a bubble-encased zealot. What manner of maniac would undertake such a dangerous course? Look no further than 1600 Pennsylvania Avenue.

George W. Bush and his administration have consistently undertaken incredibly dangerous courses of action in order to garner political power on the home front. Recall the multiple terror threats lobbed out by the administration whenever damaging political news appeared in the media. More significantly, recall Iraq. Karl Rove, Bush's most senior advisor, notoriously told Republicans on the ballot during the 2002 midterms to "run on the war." The invasion of Iraq provided marvelous political cover for the GOP not only during those midterms, but during the 2004 Presidential election.

What kind of political cover would be gained from an attack on Iran, and from the diversion of attention to that attack? The answer lies in one now-familiar name: Jack Abramoff. The Abramoff scandal threatens to subsume all the hard-fought GOP gains in Congress, and the 2006 midterms are less than a year away.

Is any of this a probability? Logic says no, but logic seldom plays any part in modern American politics. All arguments that the Bush administration would be insane to attack Iran and risk a global conflagration for the sake of political cover run into one unavoidable truth.

They did it once already in Iraq.

Rook.,.#1403201/10/06; 06:57:00

Articfox, the forum rules have changed.
Link political commentary in your post, but the forum is no longer the place to post it.

White RoseWar with Iran, Day One#1403211/10/06; 06:59:46

This article, which is credible to me, predicts that gold would go up $120 on the first day of a war on Iran. Thus a discussion about an attack on Iran is quite appropriate for this forum. The article is written by Douglas Herman.
GoldiloxGlobal Conflagration and Paper Deluge#1403221/10/06; 07:08:52


Not debating the article itself, it doesn't belong here without economic linkage. Better expressed as a linked reference with posted material focused on on economic effects of deeper war entanglement.

One source I have read (proprietarily non-postable) suggests that another "front" may cost the US as much as a 1/3 dumping of the US economy, perhaps not far off considering Rob Kirby's 28% M3 growth posted below, should major foreign sources stop absorbing US debt in response.

It is quite possible, given the M3 reporting halt, and other inflation obfuscation, that the paper engines of war finance are already pumping liquidity to fund the expectation of further entanglement. Diplomatic solutions might actually be rendered economically unacceptable at this point, because forcing that liquidity into other than "defense" resources would tend to have serious bubble-creating effects.

When the effects of that "paper deluge" are manifest, gold-in-hand will be pretty much a no-brainer.

BoilermakerIran's Nuclear Program#1403231/10/06; 07:51:06

As I've posted before I believe (at least I want to believe) that Iran's posturing about its nuclear program doesn't make sense unless they are creating a bargaining chip to gain leverage for other efforts such as denominating oil in Euros. After watching Afghanistan and Iraq invaded I cannot believe Iran's leaders would yank GWB's chain so hard with their provocative nuclear and oil programs. Iran has also alarmed "moderate" European leaders with their nuclear posturing and these are their major oil customers. It would make sense for them to abandon their nuclear weapons program, restore good relations with Europe and defuse US objections to Euro/oil markets.
Ultimately, oil is a stronger weapon (relative to the US and Europe) for Iran than nuclear will ever be.
Finally, if Iran were truly trying to develop nuclear weapons why in the world would they want to bluster about it?
Iran's oil for Euros will put another nail in the $ coffin and be far more effective than inviting worldwide nuclear angst and possible repraisal. Whichever way they go gold will benefit.

GoldiloxFractals#1403241/10/06; 07:53:24


George, when will the fat lady sing? Soon. Too soon. It would be much preferable for the people of the world if the Federal Reserve and World Banks could continuously monetize all of the enormous debt, pension, and entitlement obligations that has been created by the historically anomalous continuous yearly positive GDP growth that has linearly occurred through debt expansion during the last fifty years- but that will and cannot not happen. As long as there is a significant private sector subject to the conditions of profit need, ongoing consumption of goods and services, employee wages, and their own pension obligations - self feedback macroeconomic corrections will inevitably occur.

GM is the prototype of of a formerly great private enterprise undergoing feedback collapse. Its debt burden and pension obligations are too great; its profit margins are collapsing as Asian engineers produce a better product, competitive even with the added cost of transoceanic shipping. The overproduced housing industry will soon follow as ongoing consumption of its widgets is being limited by the wages of entry level service workers who must pay annual property taxes on overvalued domiciles. Debt must be serviced and the co-conditions of the wages, cost of living, and debt load of bottom feeders who provide the pyramidal base support for the various speculative bubbles will effect the immutable feedback that rights the imbalances.


Yes, "it IS the economy, stupid." When the tapped-out US consumer can no longer hold up the manufacturing base - never mind that their own job base has been gutted by globalism - the consumer of last resort is always the military. Besides, Hummers yield a much greater profit margin than Camaros, and their life expectancy makes the most planned-obsolesence advocate drool Pavlovian.

As the French President of Nissan told CNBC yesterday, when asked if the US automakers' trroubles were the reason he turned down offers to join them, "GM can and will be fixed".

Given the global economic quagmire, peace may not be an option for the "paper tigers."

GoldiloxCNBC and Commodities#1403251/10/06; 08:37:24

Rick Santelli just reminded viewers to remember when looking at commodities, be they metallic, foodstuffs, or oil, that the commodities markets can be generally described as small markets with big players.

Sounds like a man who expects some major volatility ahead!

GoldiloxTHE GOLD STANDARD MANIFESTO#1403261/10/06; 09:14:59


Specter of the Gold Standard

A specter haunts executive mansions, chambers of legislatures, and halls of universities: the ghost of the gold standard. Governments and academia have utterly failed in discharging their sacred duty to provide a serene environment for the search for and dissemination of truth regarding economics in general and monetary science in particular.

This failure has to do, first and foremost, with the incestuous financing of scientific research ever since the Federal Reserve System was launched in the United States in 1913. The formula for distributing the profits and undivided surpluses of the Federal Reserve banks has made it possible for the United States Treasury to grab the lion's share (in spite of explicit prohibition of Treasury participation in the earnings of these banks by the Federal Reserve Act as amended), with far-reaching consequences. As a result the bond market has been reduced to a gambling casino where shills, in order to whip up gambling frenzy, conspicuously make obscene gains at the gaming tables.

Check-Kiting by Another Name

But unknown to the public, at the end of the day the shills (the Federal Reserve banks) are obliged to hand over their gains to the casino owner (the United States Treasury). There is nothing open about what is euphemistically called "open market operations" of the Federal Reserve. It is in fact a covert conspiratorial operation. It has come about through unlawful delegation of power without imposing countervailing responsibilities. It was never authorized by the Federal Reserve Act of 1913. It defies the principle of checks and balances. It is immoral. It is the most lucrative business second only to highway robbery. It is a formula to corrupt and ultimately to destroy the republic.

Even though later amendments to the Federal Reserve Act retroactively authorized it, the constitutionality of open market operation has never been put to the test. It is clear that such an examination would not be in the interest of the conspirators, and they would use every means at their disposal to prevent it. The folksy name for open market operations is check-kiting, whereby two conspiring parties issue obligations that neither one has the intention or the means to honor but, when they come up for payment, the phantom obligation of one party is covered with that of the other.

Incest in Financing Research

The side effect that concerns us here most is the fact that the junior partner in the conspiracy, the Federal Reserve, can only increase its share of the loot beyond the mandated limit of 6 percent per annum of subscribed capital if it increases its power in a way not measurable in dollars. It can readily do so by beefing up its "support" of research, namely, by spending pre-distribution dollars in making grants to anybody pretending to be able to write awe-inspiring, mathematically convoluted, nonetheless vacuous, papers on macroeconomics, or anything else of which the fraudulence and charlatanism is hard to detect.

As a result of this immoral way of financing research a veritable deluge of worthless papers has glutted the technical literature on money which has one common earmark: they all attempt to defend the indefensible. They try to defend the issuance of irredeemable promises to pay: the bonds issued by the Treasury and the Federal Reserve notes issued by the Federal Reserve banks. Thus, then, the basis for money creation is the flimsy check-kiting scheme whereby the Federal Reserve banks buy the bonds with the notes while the Treasury uses the notes to pay the bondholders at maturity. The bond is supposed to have value because it is ‘redeemable’ in the note which, in turn, is supposed to have value because it is ‘backed’ by the bond. In effect both instruments are irredeemable and both lack backing in the form of any verifiable wealth. At the heart of the money-creating process, however explained, analyzed or defended, is the stubborn fact that both the Treasury and the Federal Reserve banks are privileged to issue obligations that they have neither the intention nor the means to honor. For any other would-be check-kiters the running of such a scheme would constitute a crime dealt with by the Criminal Code.

This double standard of justice has, of course, an immensely demoralizing effect. But what concerns us here is that the grant departments of the Federal Reserve banks have effectively put themselves in charge of deciding what should and what should not be researched on the subject of money. While they control research on money directly, they control the appointment of heads of economics department and directors of research institutions and other think-tanks indirectly.

This incest in financing research stands without precedent in the entire history of science to the eternal shame of our "enlightened" age, regardless what yardstick we may choose to measure it, of which the dollar amounts of grant money is only the most conspicuous, but we should not ignore the more subtle yet more persuasive methods of arm-twisting: bribe and blackmail.

Crime of Omission

The hijacking of the agenda for economic research has resulted in a distortion of traditional values. The new values favor ephemeral knowledge, short-horizon planning, consumerism, debt-creation without seeing how it will be retired, instant gratification, marginalization of savings, scientific charlatanism, spreading half truths and even outright falsehoods, while discriminating against durable knowledge, time-honored scientific values, work-hard/save-hard ethics, long-horizon planning. It is no less a crime of omission than it is a crime of commission, as revealed by the following.

Support for research on the merit of metallic monetary standards as a political arrangement of placing the power to create and to extinguish money directly into the hands of the people, rather than into the hands of elected representatives or appointed agents, in conformity with the demands of the U.S. Constitution, is nil.

Support for research on the burning question of the "sudden death syndrome" as it affects irredeemable currencies with a deadly 100 percent efficiency, is zero.

Support for research on the question of legality of the open market operations by the Federal Reserve as it was surreptitiously and illegally introduced and retroactively authorized, is unavailable.

Support for research on the scientific foundation of accounting and on the necessity of taking great pains to make the sharpest possible distinction between an asset and a liability, capital and credit, debt owing and debt owning, is naught, in contrast with generous support for research purporting to justify the practice of shunting items in the balance sheet of governments from the liability to the asset column.

Support for research on the code of inspecting financial statements in order to prevent overstating assets and understating liabilities, even in the balance sheet of banks, is non-existent.

Support for the scientific examination of the curious tenet that it is possible to increase the volume of unpaid and unpayable debt in the world indefinitely, is denied.

Support for the examination of the question whether the issuance of promises to pay which the issuer has neither the intention nor the means to honor can have any justification, is not available.

Inflicting Irredeemable Currency on the People

The above short list already makes it abundantly clear that something is woefully amiss with the principle of granting unlimited power, not subject to advice and consent, still less to control, review or withdrawal by the public, empowering one particular agency not only to issue purchasing media but also to direct, permit or inhibit all scientific research pertaining to the question of its own activity of issuing the purchasing media.

It is a sad commentary on the corruption of the flow of funds in support of research that neither a single court of justice, nor a single accredited university in the entire world has found it possible to place the justification for a world-wide regime of irredeemable currency on its agenda, after thirty-five years of unprecedented economic and financial devastation, including the decimation of the purchasing power of all the currencies of the world, and the even more vicious decimation of the market value of all the bonds in the world, directly attributable to that regime.

It was this corruption of financing research that has disabled the immune system of society, that has made economics and monetary science open to the invasion of quackery and chicanery, ensuring that the success of the final assault on sound money would be a foregone conclusion. In the end the government of the United States could inflict irredeemable currency not only on its own subjects, but on the people of the rest of the world as well, without meeting any significant resistance.

Integrity of Financial Journalism

It speaks volumes about its integrity that financial journalism has failed to alert the public to the imminent danger of a credit collapse arising out of the universal use of irredeemable currency which the governments of the world have blithely embraced and foisted upon their subjects, without bothering to examine the scientific and juridical arguments against it. In previous instances of experiments with this type of currency sane and self-respecting governments have always resisted the temptation of siren song to join others living in financial backwater. Whenever weak governments came to their senses and wanted to return to the path of monetary rectitude, there was no lack of countries around on the gold standard to lend them a helping hand.

No such luck this time. The world is a rudderless ship on uncharted waters, and the storm is fast approaching. When it strikes, it will be "everybody for himself". No helping hand will assist survivors. All defenses against this type of disaster have been dismantled, and all life savers cast overboard, thanks to the diligence of the grants departments of the Federal Reserve banks.

Not only have financial journalists failed to alert the people of the dangers they are facing under the regime of irredeemable currency, they keep adding insult to injury. They lionize the Wonderful Wizard of US, King Alan who, unlike King Canute, has been able to order the tide of inflation back. Maybe after disaster has struck, it will be blamed on the ‘early’ retirement of the Wizard.


Not a pretty picture, especially as you progress further in the article.

USAGOLD / Centennial Precious Metals, Inc.Uncirculated Kings sold out yesterday, XF Kings have sold out today. Get in on the remaining Unc Queens while you may!#1403271/10/06; 09:32:19

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Special discount pricing on Dutch 10 Guilders

Shop online or phone for addtional savings.
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GoldiloxDollar Dilema#1403281/10/06; 09:55:16

Peter Schiff of Euro Pacific Capital is telling CNBC that the Dollar's fate has been sealed. He reminds the viewers that in 2000, when the DOW first hit 11K, it represented 45 oz of gold, while today's 11k mark represents 20 oz of gold. In his view, gold isn't rallying, so much as the value of inflated paper trading vehicles continues to cave in.

DOW2006 (11k) = 45% of DOW2000 (11k)

Couldn't have said it better myself.

Sounds like a pretty smart guy, even if the CNC dodo kept reminding him that "Warren Buffett lost his shirt in dollar shorts last year."

BelgianTHE GOLD MARKET IS TOO SMALL....!!!-???#14032901/10/06; 10:29:23

Too small for having CBs accumulate enough goldmetal reserves...
Utterly nonsense, of course : The financial media cartels got the political message >>> If there is not enough goldmetal...let its price go up as to "revalue" the existing stashes !
That's why the goldprice decoupled from the - dollar exchange rate - !!! And that's why gold is heading for its - reserve - function !!!

And it is exactly because there is not enough goldmetal that gold is appropiate as universal reserve.

This is NOT another ***goldprice-rally*** but the start of gold's revaluation process.

It is because the market of fiat currencies is unlimited, that fiat units cannot function as a reserve.
Today, gold isn't functioning as an insurance, because the fiat markets are already heating up towards ignition temperature. The M3 thermometer must be removed so that pink pigs can fly.

This will become much clearer when POG goes beyond $600/Oz !

During the past 25 years, goldmetal has been redistributed and now the gold-owners want to revalue it.

YGMF.O.A....Question (Sir Belgian would you know this??)#14033001/10/06; 10:46:32

Didn't our missing Trail Guide once state along while back that there were quiet Gold transactions that take place periodicly at prices far above the quoted spot price? I'm sure he did.
FlatlinerYour point of view#14033101/10/06; 11:12:10

"In addition, there is an important angle of economic competition over Iranian resources and access to Iranian markets. Russia continues to believe that Western concerns about nuclear proliferation merely reflect commercial interests to drive Russia out of competitive markets. In September 2003, for instance, in his interview with Western journalists, Russian President Vladimir Putin stated: "According to our information, many Western European and American companies cooperate with Iran either directly or through intermediary organizations in the nuclear sphere."

To substantiate the Kremlin's claims about the commercial nature of Washington's pressures, some Russian analysts argued that, even in the absence of official contracts, US-Iranian trade turnover was about US$1 billion, which was higher than that of Russia, despite the Russia-Iran strategic partnership agreement. The analysts also pointed out that immediately before the Islamic revolution in Iran, Washington and Tehran had signed a contract worth $24 billion, which provided for US assistance in constructing eight nuclear power plants in Iran within 10 years."

Google search "Iranian News Papers": - great list. - Found snip above.

It is sometimes interesting to view the world from a different propaganda source. Here in the US, there doesn't seem to be anything but unfavorable news regarding Iran. Writing is everywhere stating what the intent is behind their movements. But, is it one sided? I don't know. But it is interesting to stand objectively aside for a few minutes every once in a while and put a search engine to work on the web.

How this all relates to gold? Well, it seems to me that the real reason behind what's going on is financial and unfortunately Iran seems to be caught in the crossfire.

Buy physical gold and guard it well. You may find your house worth billions of dollars in the near future but find it nearly impossible to drive to the store.

silverportNOT ENOUGHT GOLD#14033201/10/06; 11:55:52

There is between five and ten times the amount of gold above ground,and most has been kept hidden.This has been aquired in the past three centuries in many ways.Because gold is real wealth,and has power it must be hidden from view and also from taxation.It is in a few hands and gives control over states and kings.When a few persons have so much control they become kings, but still hidden from the people with puppets installed to work from behinded the scenes.This is a vast subject of which gold is a small part, but will become more important in the next few years.Just a few lines from a newcomer,thanks.
GoldiloxCoin Show#14033301/10/06; 12:02:24

CNBC just did a bit on the Coin show going on in Santa Clara. No mention of our gracious hosts, however.

But imagine Sue's "Wow" when the prices of some earlier US gold pieces were revealed.

Like, DUH!

FlatlinerBig Trader#14033401/10/06; 12:35:27

When I re-read this clip from Oct 1997, I can't help but wonder who HK was? Didn't the region of in South China return to Chinese rule on July 1st 1997? Isn't that southern region that of … Hong Kong? Could it be that in ’97 they (HK) got an education with regards to how you acquire large quantities of gold without driving the price up? (I don't know, I'm just guessing) But, if HK is Hong Kong, I would be willing to bet that they have already acquired what they *needed*. This would also give support to what Belgian keeps saying with regards to us being in the re-valuing phase.

Now, it will be interesting to see how it's revalued. Could it be that enough mine supply just doesn't make it to the public market? That would be my guess, but we shall see. We've been told publicly that South Africa's production numbers are down. Could it really be that the public supply is down but the private supply isn't? (Is it possible to research something like this) When Russia says that it will acquire more, are they really saying that mine supply will not find its way into public markets?

Just coins for Thoughts…

Date: Sun Oct 12 1997 10:42
How DO they do it?

It's more complicated than this but here is a close explanation. In the beginning the CBs didn't sell their own gold. They ( thru third party ) found someone else who had bullion. That "party" sold to a broker who sold forward for a mine or speculator or government ) . In the end the 3rd party had the backing from the broker that he had backing from the CB to supply physical if needed to put out a fire. The CB held a very private note from the broker as insurance and was paid a small fee. This process mobilized free standing bullion outside the government stockpiles. The world currency gold price was kept down as large existing physical stockpiles were replaced by notes of future delivery from the merchant banks ( and anyone else who wanted to play ) .

This whole game was not lost on some very large buyers WHO WANTED GOLD BUT DIDN'T WANT IT'S MOVEMENT TO BE SEEN! Why not move a little closer to the action by offering cash directly to the broker/bank ( to be lent out ) in return for a future gold note that was indirectly backed by the CBs. That "paper gold" was just like gold in the bank. The CBs liked it because no one had to move gold and it took BIG buying power off the market that would have gunned the price! It also worked well as a vehicle to cycle oil wealth for gold as a complete paper deal.

Are you with me?

Well a funny thing happened right after the Gulf war ended. What looked like big money before turned out to be little money as some HK people, I'll call them "Big Trader" for short, moved in and started buying all the notes and physical the market offered. The rub was that they only bought low, and lower and cheaper. They never ran the price and they never ran out of money. Seeing this, some people ( middle east ) started to exchange their existing paper gold for the real stuff. From that time, early 1997 LBMA was running full speed just to stay in one spot! In other words paper volume had to increase to the physical volume on a worldwide scale, and that was going to be one hell of a jump. It could not be hidden from the news any longer.

This was not far from the time that "Big Trader" said that "if gold drops below $370 the world would see trading volume like never before seen". The rest is history. Now the CBs will have to sell 1/3 to 1/2 of their gold just to cover whats out there. To use the Queens English "it ain't gona happen dude"!

Everything is now upside down and reversed. The more the CBs sell outright the more the price will rise.

It's not a bearish sign anymore. They will now sell to keep the price rising slowly.

What of those T-bonds and the US$?

More later.


Clink!Big Trader#14033501/10/06; 13:49:21

Well, Murphy at the Cafe keeps on mentioning a large buyer called "Stalker" (and now a number of little "Stalkers" too) from Asia, so this might be one and the same entity. I'd take a small bet it's not Henry Kissinger, at any rate ....

Belgian@YGM#14033601/10/06; 15:20:59

It speaks for itself that a substantial amount of goldmetal (tonnes) is often transfered for much more (indirect) "value" than the the dayprice of gold indicates. An example : During the period of sanctions against South Africa, a lot of goldmetal moved in exchange for much needed oil that couldn't reach SA. Those were the days that secrets were not "that" secret.

Oil and gas, also have many different prices ! Recent examples are found in Russian resources that flow to different parties at much different prices (Oekraine -etc).

That's why gold and oil are called "political" tangibles. Energy and gold are both "state-affairs" and the official market price we see, is a price indication for the general public, us the schrimps.

And if gold is shared amongst many states, through redistribution, to participate all together the gold-wealth-reserve has been exchanged for much more future "value" than the present price is suggesting !

$600 and euro 480 per ounce, are the prices that are adjusted for "official" (!!!) price-inflation for the US and EU. All in line with the past 35 years of official goldprice management. Once the POG passes through $600/Oz (in '06) we have lift off for the gold=wealth reserve concept shared by those who whish to align with EMU.

Watch how the POO is (subtly) forcing the POG to go higher.
Watch how the goldmine prices definitely have lost their former (traditional) leverage to the POG. Good sign that the present goldprice is "managed" by other forces than was the case during the past 3 decades. Russia AND China have substantial amounts of underground gold. They do now what other gold states never did >>> Value their underground gold reserves before having mined/refined it.
It is not the 50 billion mining industry that has any importance, but gold the metal has when stored under another goldregime. Asians, nor Russians are holding goldmine shares. And if goldmining stops tomorrow, the goldmetal trade is not going to stop trading !

Bear in mind that the bulk of goldmines are already state controlled and have no grip at all on the price of their product.
It is the financial industry that continues to make the general public believe that the world's goldprice is a market fenomenon. IT IS NOT !!!


FlatlinerUS has 64% of its reserves in gold!#14033701/10/06; 15:38:08

There you have it folks. Atul Parkash is the person of the hour. We can all rest now knowing that there is no evidence that central banks are buying gold and that they just don't make decisions fast enough anyway.

Hey, this guy also seems to know exactly how much gold the US holds. Someone should get this guy on the horn and find out the actual numbers. :)

Full article included below. (Sorry about the length.)

By Atul Prakash
LONDON, Jan 10 (Reuters) - Central banks are unlikely to rush to diversify their reserves into gold in the foreseeable future because of their lengthy decision-making process and small size of the bullion market, analysts said.
The market has been abuzz with talk that some central banks might consider raising the gold holding in their reserves to reduce heavy dependence on currencies.
China's announcement last week that it planned to explore new ways of using the country's foreign exchange reserves and broadening their investment scope, boosted sentiment and lifted gold to its highest in 25 years at $550.75 an ounce on Monday.
But a senior central banker said on Tuesday China will not sell its current U.S. dollar assets as part of a move to diversify foreign reserves. [nPEK362492].
"If you are talking on the pure diversification argument, the numbers don't necessarily add up because the gold market is simply too small," said Jon Spall, director at Barclays Capital.
"If China were to accumulate gold at the same rate at which European central banks are divesting, then it will take them 8 years to achieve 10 percent of their reserves in gold, given the somewhat unlikely corollary that nothing else changes."
In March 2004, 15 European central bank renewed a 1999 pact to limit their sales over a five-year period to 2,500 tonnes, with annual sales limited to 500 tonnes.
Analysts say diversification into gold by a central bank would mean allocating five to 10 percent of its reserves. A rise of one or two percent is seen as minor adjustment.
"The gold market is not big enough really for that kind of purchase," said Mathew Turner, analyst at Virtual Metals.
Barclays said in a report that if China planned to raise its gold holdings to 10 percent, it would need some 4,680 tonnes or about two years of global mine production.
"Certainly gold has a role to play for central bank reserves but whether they actually add to their reserves or not is an unanswerable question," said John Reade, precious metals analyst at UBS Investment Bank.
"We have seen no evidence that central banks have been buying gold over the last 6-12 months. Until we actually see a reported increase in holdings from one of the big Asian central banks, that's always going to remain a possibility rather."
Analysts said central banks take a long time to decide about any change in their holdings and it appeared there was nothing on the table at the moment.
"We are definitely aware of some central banks that are showing more interest in gold but there is a long decision making process, so we are not expecting any major purchases soon," said Jill Leyland, economic adviser to the World Gold Council.
The general trend over the past 10 years or so has been for central banks to sell their gold, which gives little yield on deposits compared to foreign exchange reserves.
But unstable currency markets, high oil prices and concerns about rising trade barriers have prompted some central banks to start considering reducing their heavy dependence on the dollar.
"There were suggestions that Russia, South Africa and Argentina might increase their gold holdings and these all fanned the flames of enthusiasm," SG Corporate and Investment Banking said in a report.
"There has been little evidence to date of sustained central bank buying activity, but where the official sector is concerned perception is everything," it said.
World gold reserves total around 31,000 tonnes. China holds 600 tonnes and India 358 tonnes, but gold's share of their reserves is just 1.2 percent and 3.6 percent respectively.
In some European countries, gold accounts for 50 percent, while in the U.S., the world's biggest holder, bullion makes up 64 percent of reserves.

Belgian@Flatliner#14033801/10/06; 16:04:09

This Reuters-type of article is wonderful (indirect)evidence (again) that "they" know very well what is actually happening (for the past 5 yrs already).
How many different theories have already been served (by the financial media) to the general public as to explain (guide) the change in price behavior of oil and gold !?

When POG declines from $550 to $540...-they- scream that "profits" (???) are been taken !? Jesus !

Normally, all official gold-reserve holders (states) should enjoy the revaluation of their gold-reserves. One particular (old) block constantly seems to feel very unhappy with the gold revaluation. All the others remain rather silent (neutral) about the goldprice. They (most)probably feel very comfortable with the gold revaluation process. Do we hear the Asians, Russians, oil-owners scream that there is not enough gold !? On the contrary, they state that they want more of the precious metal. In sharp contrast with Alan's statement of >>> CBs stand ready to...

Today, my 13 yrs old daughter went to visit a bank with school : Guess what was showed and discussed >>> GOLD !!!

Flatliner@Belgian#14033901/10/06; 16:19:14

I, too, believe the indirect evidence. It seems interesting to find so much information to confirm the gold trail.

I do have one question for you. I seem to remember that you have taken the stand that the revaluation will be orderly in previous postings. Just before the end of the year the Japanese market got speculative and then the PoG got hammered. I'm still trying to understand why you think the process will be so orderly?

Also, you must not live in the USofA! Gold would not be discussed as having any value by a banker.

Belgian@Flatliner#14034001/10/06; 16:38:51

The transition plan (rather process) that has been architected over more than 2 decades, goes ordely. Certainly so, when it is in everybody's interest (opposing factions).
Example : First there was a decade of ECU and then EMU.

Watch the goldprice chart of the past 25 years : Do you see irrational exhuberance ? Do you see an oilprice going bezerk ? No, this is all happening relatively disciplined.

As soon as prices (exchange rates) are pushed by speculative see pricing regulation coming in, without breaking the long term desired trends. No drama for the time being.

Read how Asians are doing their best to avoid misunderstandings (mis-interpretations) of their statements on important monetary matters.

Those who whish to make speculative money on bull/bear-runs/rallies, are most probably very disappointed or should I say disoriented.

When the euro/dollar exchange rate rushed to 1,36...Trichet asked NOT to rush into the euro .

Political statements often function as market sentiment regulators, whilst the plans are proceeding.

OvSPuzzle.#14034101/10/06; 16:43:21

Thanks Flatliner for your
msg # 140334.

Your repost of Another's:
Can someone go graphically
through his scenario? For
the life of me (and for
reason of 3 glasses red),
I seemed to get lost; who
is the third party? (Maybe
someone like HSBC who knows
the gold depositers in its
vaults?). Are the brokers &
merchant banks one and the
same (like Goldman Sachs &
Morgan Stanley)? Selling
forward for mines, specula-
tors or governments are not
of a kind; some gold is in
the ground, others above?

"Another" sounds like Belgian
when he forgets to put on
his French accent...or, did
our Belgian thru rereading
Another's Thoughts absorb by
osmosis his claimed English-
ness? Ha,ha, just joking.OvS

OvSI am sorry, but...#14034201/10/06; 17:10:24

Although I am very
bullish on gold, I
will sell some of it.
I will acquire a very
nice looking and old
stone structure and
will remodel it with
old world taste into
something I always
wanted to own so I
could do the things
not possible in my
Three of my seven
children attend private
colleges and soon the
remaining will follow.
By then my venture shall
be finished and perhaps
I'll shall invite the
forum for a celebration
there? We'll see...OvS
PS. And remember, Gold
and Silver is not every-
thing...joking, of course.

David Linkley@Belgian #14034301/10/06; 17:17:38

Hi Belgian,
Good posts to make one think about the NWO. I have no doubt that some parts of the world want higher gold prices to offset the huge creation of dollars which acts to discount their labors and or resources. Where I differ from you is that I see all of the West in the same boat. Poor demographics, too much debt, lack of fiscal restraint, poor leadership and degradation of the money. The ECU is just as guilty as the US when it comes to poor stewardship of their money and gold continues to flow from west to east.

At this point in time oil is very crucial to the gold currency relationship. However, a time will come when a strong movement towards energy independence will come and is achieveable over a multi-decade period. Gold will not benefit long-term countries who ignor economic realities and that includes the ECU. The end of American dominance is coming but it is much further off than most realize. For sure changes are occurring now which will force the US to accept others wishes more than in the past 50 years.

What the NWO will look like is still very much in the air. However it won't be the ECU leading the charge, they will be a player but look east in 40 to 50 years if you really want the anwser.

USAGOLD Daily Market ReportPage Update!#14034401/10/06; 17:26:26">
The Daily Gold Market Report has been updated.

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TUESDAY Market Excerpts

Gold rests on solid footing

January 10 (from MarketWatch) -- Gold futures closed Tuesday with a loss of almost $5 an ounce after tapping a quarter-century high in overnight trading, but many analysts considered the pull back only temporary.

"While gold is very overbought and profit-taking can be expected, this secular bull market has continuously punished the bears and market-top forecasters," said Peter Grandich, editor of the Grandich Letter.

"This time should be no different."

COMEX February gold contracts closed at $545.70, down $4.80. It touched a high of $553.10 in overnight trading between Monday and Tuesday, a level not seen since 1981.

Last weeks' announcement that China it will diversify its holdings of foreign reserves has put pressure on the dollar and provided support for gold, taking prices in overnight trading to a quarter-century high of $553.10 overnight.

"Asian interests are in the driver's seat," said Brien Lundin, editor of Gold Newsletter, "while Western speculators have been largely absent from the market, outside of short-covering.

"This new 'gold fever' has been helped by indications that China will diversify its foreign reserves away from the dollar, and rumors that the nation may begin increasing the gold component of its reserves," he said.

So "Asia is fueling this latest gold rally -- broadening and deepening the base of investment demand for what is a relatively small market," he said.

Overall, the gold market remains on "solid footing fundamentally and technically," added Jon Nadler, an investment products analyst at bullion dealers Kitco. Investors are looking at the longer-term picture, he said.

They "don't mind gold's short-term gyrations and are more scared of Iran, of U.S. domestic spying fallout, of [Ben] Bernanke taking the helm at the U.S. Federal Reserve, the statements of diversification away from the U.S. dollar coming out of China and of investing in other assets that are probably far more overpriced than gold really is."

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

MKBelgian, All -- The HOWL#14034501/10/06; 17:35:57

From the Reuters article linked below:

"We are definitely aware of some central banks that are showing more interest in gold but there is a long decision making process, so we are not expecting any major purchases soon," said Jill Leyland, economic adviser to the World Gold Council.


The World Gold Council knows better than most how the gap between supply and demand has been met over the past decade or more. It is met through central bank gold sales -- principally European central bank gold sales. That gap is roughly 500 tonnes.

Three things of importance have happened over the past six months.

First, European selling is in the process of drying up. (Germany, Switzerland, et al)

Second, a handful of nation states have announced either an interest in or a program for gold reserve acquisitions (China, Argentina, South Africa, Russia, et al).

Third, mining companies have continued their programs to reduce their hedge books through forward gold purchases of physical metal

The combination of the three has put extraordinary pressure on the supply-demand equation the likes of which we have never before seen in the gold market.

What if you now added a COMPLETELY NEW element to the gold market equation? What if the official sector over the next few years became net buyers of gold instead of net sellers? Where would those short the market obtain the metal needed to fill their short positions?

God forbid that the bullion bankers -- like Barclays and Virtual Metals -- would have to compete in the market with the likes of Russia and China to fill its clients' needs.

That is why the howl is so loud from certain quarters, Belgian. This is a major breach in the gold edifice -- a run around the Maginot Line -- and some are having a hard time dealing with it. When Russia first announced that it would make gold purchases for its official reserves in the open market, I likened its importance to the signing of the Washington Agreement. At the time a similar HOWL arose from the bullion banks very much like today's HOWL as described in the below linked Reuters article.

Can you all recall when this very same group would trot out the central bank gold sales mantra whenever gold got on a roll?

Now, for the very same reasons they wanted us all to believe that the central banks were net sellers, they want us all to believe now that the central banks will never become net buyers.

Methinks that some protesteth too much. . .


I would like to address in particular Jill Leyland's opinion that "we (whoever we is) do not expect any major purchases soon." To see the bullion bankers register significantly on the pain meter, and so publicly in the press, we gold owners and advocates should ask ourselves why this whole thing requires such a prominent and vocal response. I return to the "GAP." Central banks need not purchase gold tomorrow or the day after. All they need do is THREATEN to purchase gold. Just as the THREAT of central bank gold sales was enough to kill price rallies in the past, so the THREAT of of central bank gold purchases will be enough to kill price corrections in the future.

That, my friends, is the reason for the BIG HOWL.

I seem to remember a poem that started with. . . .

"I saw the best minds of my generation. . ."

What was that?

Au-someHowl#14034601/10/06; 18:07:40

Part I. From Allen Ginsberg. Howl and Other Poems. San Fancisco: City Lights Books, 1956.

For Carl Solomon


"I saw the best minds of my generation destroyed by madness, starving hysterical naked,

dragging themselves through the negro streets at dawn looking for an angry fix,

angelheaded hipsters burning for the ancient heavenly connection to the starry dynamo in the machinery of night,

who poverty and tatters and hollow-eyed and high sat up smoking in the supernatural darkness of cold-water flats floating across the tops of cities contemplating jazz,..."

and so on

Chris PowellDVDs of GATA's Gold Rush 21 conference go on sale#14034701/10/06; 20:04:24

Latest GATA dispatch.

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

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

Ten BearsThe Golden Goose @ Beyond Keynes to Inflation#14034801/10/06; 20:06:35

Two views for 2006.

"The expansion of the monetary base, that has been so choreographed, that has gotten every fiat currency in history in trouble, resembles the inverted pyramid. Less and less backing more and more credit expansion."

"The monetary expansion and velocity must continue, or the death of a fiat currency will be the end game."
"Your only safety net in such a scenario is gold, silver, and other things 'real'."

"Hyperinflations are caused by extremely rapid growth in the supply of "paper" money. They occur when the monetary and fiscal authorities of a nation regularly issue large quantities of money to pay for a large stream of government expenditures. In effect, inflation is a form of taxation where the government gains at the expense of those who hold money whose value is declining. Hyperinflations are, therefore, very large taxation schemes"

"The CPI underestimates actual inflation by 1.5 to 2 percent by excluding housing prices and using "hedonic price adjustment"

"For 2006 and beyond, I expect the inflationary war on savers will continue, and I just don't see how financial assets - stocks and bonds - will keep up. The preservation of real wealth at a time when the Federal Reserve will be dedicated to building debt, money and inflation, is not going to be an easy task"

MKAu-some -- Howl#14034901/10/06; 20:14:20

Well, that's a bit darker than I remembered it. Over the top, I would say. And the poem doesn't really have much to do with the point I was trying to make. So my apologies to the Table for the misplaced reference. I hope it doesn't divert attention from my basic message as outlined in that post.
Mthirsty1stock market#14035001/10/06; 22:05:23

I do not know if i am understanding the whole senarieo here,but what i am reading in the forum is that everyone want's the stock market to perform badly in order to push the price of gold higher.I have just started investing in gold recentley as most of you know.I purchased the gold starter kit from CPM.I for one can't wish for the stock market to crash,because all of my wife's pension and profit sharing is tied into the market as is millions of other americans.She has worked her whole life towards her retirement.When you are in this situation,when you can't take money out to buy gold(except paper gold)then all you can do is buy it when you can afford it.Are we investing in gold to await for doomsday,or are we looking for both the market and gold to give us the future we have all worked for our entire lives.With all respect to the roundtable,M.
HektorState Secrets#14035101/10/06; 22:41:59

Smeagol, you are far too subtle and cunning for me. Of course, what you say would happen -- both parties to above-market sales would keep it secret, both in their own interests. But, if those sales became sizeable, methinks it would leak out.

"If China paid some multiple above the market price for gold, that would immediately BECOME the market price for gold." - Hector

But how could that happen - IF they, and those private ones whom they purchase It from, agree to keep silence, precious? One has never had to pay market price for It...perhaps this is where the sseparation of It from the paper-market price begins? Or has begun?

Goldiloxmarket crash?#14035201/10/06; 22:42:17

@ Mthirsty1,

I don't know that "everyone" wants the market to crash, or even if it will. The fundamentals do not look great, but as I pointed out earlier, this 11k DOW is not the same as Y2K's 11K DOW. Massive liquidity may carry it forward quite well, although the dollars it's being measured in are worth much less.

In gold terms, it is 55% lower at the same numerical value.

You may not have a lot of say about your retirement "investments", but there are market options, i.e. Bear funds, etc., that can appreciate your capital in a down draft, and usually don't get hit too hard in a rally, either. Many of them have at least some gold components in their portfolios.

Do your homework, as group advisors are often asleep at the switch!

TownCrier3 die in AngloGold rockfall#14035301/10/06; 23:05:57

Johannesburg - South Africa's largest gold miner AngloGold Ashanti (ANG) on Tuesday announced that three people died and two people were seriously injured in a rockfall at the company's TauTona mine...

"The fall was caused by a seismic event, with a 2.4 magnitude, which occurred some 3000m below surface," the company said.

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

If losing your life for it nearly two miles below the earth's surface doesn't somehow inform you that that the pricing mechanism is currently out of kilter (market value is grossly too low), then I don't know what will provide that perspective for you.

Choose gold -- still a bargain and attainable with, relatively speaking, burger-flipping chump change.


Mthirsty1market#14035401/10/06; 23:09:21

Goldilox,thank you for the reply and the info.M.
TownCrierChina Senior Economist:To Shift Some FX Reserves From Dollar#14035501/10/06; 23:17:54

NEW YORK -(Dow Jones)- China has resolved to shift some of its foreign exchange reserves away from the U.S. dollar and into other world currencies, according to a high-level state economist who advises the nation's economic policymakers, The Washington Post reports in its Tuesday edition.

The new policy reflects China's fears that too much of its savings is tied up in the dollar, a currency widely expected to drop in value as the U.S. trade and fiscal deficits climb, the Post said. China's foreign exchange reserves are now in excess of $800 billion.

The comments of the Chinese senior economist were made on the condition of anonymity because the government disciplines those who speak to the press without express authorization...

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

As the battle wages on between conflicting statements of intent, the litmus test to help you discern the most probable course of action is to sit back, take a deep breath, and, while considering the conjunction of all things, the version to buy into is the one that reflects the most intelligent choice.

Simply put, gold endures and prevails. And everybody knows it on one level or Another.


TownCrierTIME Magazine: Gold Fever#14035601/11/06; 00:04:50,13673,501060116-1147217,00.html

The soaring price of the yellow stuff isn't stopping Indians from indulging an old obsession. Plus: you can't wear stocks and bonds

[Randy's note: Ha! That's a nice twist on an old theme in the article's subtitle; ususally some idiot likes to point out that you can't eat gold... which ultimately begs the question, what type of condiment are they using to choke down all of those edible(??) stocks and bonds?]

Society Section, Sunday, Jan. 08, 2006 -- ...All through India, Padmanaban says, famous temples are replacing the silver plating on their idols with gold, and smaller shrines are replacing copper deities with silver ones. "People in India have more money now," Padmanaban says, "and the result is that our temples are being covered in gold and silver."

The gilding of the nation's temples is an aspect of one of mankind's great investment obsessions: the Indian love of gold. The country buys at least one-fifth of the global gold supply each year, making it the world's largest consumer of the metal.

Experts believe that 15,000 to 20,000 tons of bars, ingots and jewelry is locked up in India's bank vaults and household safes. Indians are furiously adding to that horde. The World Gold Council estimates gold buying in India was up nearly 33% to 850 tons in 2005. The increase is all the more remarkable given the metal's surging price... it's clear that India's gold appetite has not been markedly diminished even by sharply higher prices.

In many ways, gold [demand] is a relic of weak investor rights and shaky financial systems, where people distrusted banks and the stock market and preferred to store their wealth in tangible assets, chiefly gold and property.

Although India's current economic boom has been criticized for unevenly benefiting the rich, new wealth is percolating down in many parts of the country to newly empowered members of the working class such as Padma Kondababu, a 40-year-old maid in Madras. The first woman in her family to work outside the home, Kondababu makes $85 a month, a good salary by Indian standards. Whatever she can save, she says, she uses to buy gold, sometimes even in $12 installments...

"It's a matter of pride for people like me to buy gold," she says. "Gold used to be a few hundred rupees for a sovereign [a measure of eight grams] in the time of our parents, and yet they couldn't dream of buying it. Now it's six thousand rupees for a sovereign, and still we have the money to buy gold."

It's no coincidence that consumption is highest in the south of India, which has in recent years seen some of the fastest economic growth and the most thorough dispersion of wealth to villages and small cities.

..."So many banks fail and close their doors, and ordinary people get hurt when that happens," says Jhansi Rani, a schoolteacher in Madras, pointing out the case of a close relative who had deposited his pension money in a private bank, only to see it close down suddenly and find that the funds had, apparently, disappeared.

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

Read this, and strive to understand the essence of TRUE SAVINGS... property in hand (and all rights and privileges attendant with having sole access and control over that which you actually own).


968Fannie, Freddie selling foreclosed homes in Florida at 40%-60% discounted prices#14035701/11/06; 00:36:17

Just for information...
Belgian@MK#14035801/11/06; 00:37:52

You certainly aren't going to be surprised when I say that I totally don't agree with your 3 most important things that happened the last six months.

I've called the latest statements "political ones"...and you say it are "HOWLS". What's in a name ?
But,...what is " -BEHIND- " all this !? Something deeply fundamental or simply -goldmarket- minor anomalies ? You seem to suggest rather strongly, it is the latter ? In that case, we differ completely again on opinion.

mdgcChinese currency appreciation#1403591/11/06; 05:34:22

To see charts of the Chinese reminbi (yuan) go the charts URL below.

Open the file menu, Click change symbol, then click ‘more’ and then type in ‘USD/CNY’. The daily six-month chart of the number of yuan needed to purchase one US dollar will pop up.

As I write the rate is 8.0672. That is 2.6% lower than the old fixed rate of about 8.28.

The Chinese switched from the pegged rate to a so-called floating rate in late July. The 8.28 pegged rate had been set in 1994.

The quick glance at the daily six-month chart shows that the bands were initially narrow form late July to mid September when they widened. Presumably this was the widening from point one percent to point three percent, a shift that was widely mentioned in the press.

In early November the bands narrowed again, and have stayed tight since then. This has not been widely reported. It would appear that the Peoples Bank of China did not like the wider bands.

The finer scale of the daily three-month chart highlights the daily intra-day ranges. And to my eye, the rate of appreciation of the renminbi appears to have suddenly picked up in 2006. Could this be a PBC policy decision to let the yuan's appreciation accelerate?

Flatliner@Belgian#1403601/11/06; 10:01:06

If feels like there is a challenge of a dual, but, I do not see your three swords!
OvSMK vs. Belgian?#1403611/11/06; 10:29:25

Belgian, MK's three-pointers
are more of a tactical nature,
yours are longer-ranging stra-
tegic.So you don't necessarily
disagree from that vantage-point.
There is also your disagreement
with silver-traders that intent
to convert their silver-profits
into golden ones. It's a matter
of tactics, and when done right,
lets them catch the coat-tails
of fatter cats up the ladder.
You want to gain more, you must
risk more. If prudence prevails,
that game has to decline percent-
age-wise the higher the goldprice
Please keep honoring us with
your mantra--it keeps everyone on
their toes and probably will save
many a knight from foolish excess
I bet your 13 yr old didn't learn
anything about gold she did not
know already, but she probably was
relieved to hear it confirmed by
an outside source. OvS

GoldiloxGold holds above $544; sentiment upbeat#14036201/11/06; 11:09:30


NEW YORK (MarketWatch) -- Gold futures rose in late trade Wednesday, extending their gains above $544 an ounce as sentiment on the metal continued to be upbeat.

Gold for February delivery was recently up $3 at $548.70 an ounce, after trading as low as $543.70.

The contract lost almost $5 Tuesday after tapping a quarter-century high overnight, with most analysts viewing the move as a normal correction.

"Expectations for strong demand out of China and other major emerging economies, such as India, coupled with supply constraints and Middle East geopolitical concerns (Iran nuclear concerns and Israeli prime minister issue) has fed medium-term bullish sentiment," said Action Economics.

In the past week, gold has found support from a weaker dollar after China said it is considering diversifying its $800 billion of foreign reserves. Many analysts predict that China will switch part of its reserves into gold, not just into other currencies.

William Adams, metals analyst at, said funds are also keeping a floor under gold prices.

"The overall environment for the metals looks supportive, even though it remains vulnerable to a price correction," he said.

At Altavest Worldwide Trading, analyst Thomas Hartmann said the market will likely see bouts of profit taking and liquidiation in the near term.

However, "we're clearly in a bull market so there are not many aggressive sellers at this point," he said.


Fortunately, our hosts are still selling for those who want to get in on the gold bull. Was that a "wall of worry" message?

BelgianFlatliner/OvS#14036301/11/06; 11:11:06

It is not Belgian versus MK, but about the "supply-demand" aspect of gold AND the nature of the -evolving- market in which this takes place ! Repeat >>> evolving goldmarket.

And since the goldmarket is evolving "fast", we better forget about thinking and acting long term or running the risk of exclude ourselves from the gold revaluation.

Better NOT to follow the WGC trail and its -conventional- considerations about gold and its nearby future ! That is the "real" debate.

Can we ever know how the major goldmines arrange their books with their specific bankers...or...what facts do we exactly know on CBs' commitments ?
Is the goldmarket still that same place where we speculate/gamble (win/lose) or buy the perception to insure ourselves against fiat depreciation ? NO, things golden are definitely changing and it is against this idea that the most aversion is met. Had a long talk with a Belgian bullion dealer and understand WHY there is such an aversion towards gold-change. Does that mean we have to remain silent about it and ignore it completely ? Are there not enough arguments for suggesting that a Big gold change is happening ? I keep on watching the arguments piling up. Maybe I'm interpreting them all wrongly ?

Flatliner@Belgian#14036401/11/06; 11:31:05

Ok. I guess that I *really* have nothing to lose by watching, other then time.

Also, do you mean to write, "since this evolution is happening fast, you better get physical so you don't miss the boat?" Or, am I still not understanding?

I am also curious about the comment about depreciation. Do you mean to say that the folks that have thought of gold as *only* a hedge against inflation are starting to see gold as an investment? In other words, currency depreciation at x% doesn't match gold appreciation of x+y%? I think I fit in that x+y group.

GoldiloxCurrency depreciation#14036501/11/06; 11:44:56

@ Flatliner,

I think I fit into the group that recognizes:

DOW2006 (@11k) = 20 oz gold

DOW2000 (@11k) = 45 oz gold

That's some pretty nasty currency depreciation over 5 years.

Belgian@Flatliner#14036601/11/06; 11:53:05

If "you" conclude that there IS a -boat- (as I do), then you are 100% consequent in holding physical gold. If there is NO boat, keep on gambling/speculating with (or without) leverage. I don't see any serious argument for "playing" it the two ways (combination of paper + physical).

Holding the goldmetal in possession since 1971 is ONLY a hedge against the OFFICIAL price inflation !!! That means that $600 and 480 euro are the price inflation neutral targets for gold. These are the general consensus (hum) prices for gold in '06.

All the above has nothing to do with my personal (!) conclusion/opinion, that gold's valuation process is on its way to leave the conventional/official price inflation hedge towards the < gold=wealth reserve > concept, with absolutely no link anymore to the inflation hedge (mal)function. That is *my* reason for debate.

And to all those who still remain convinced that gold's sole function is price inflation hedge...I ask the following question : "WHY" was the goldprice knocked down to $250/Oz !? I already know the bulk of the classic answers and none of them makes any sense at all.

FlatlinerX+Y#14036701/11/06; 12:11:51

Goldilox, I would contend that you've defined x+y very well. If we look back a few months, where gold broke out with regards to all currencies, that is where I believe that we saw ‘y’ grow larger then zero. For the last few months, we've seen people very excited about owning gold. I believe that there is a direct association between y (percentage) and this ‘emotion’.

If I'm also understanding Belgian, the ‘y’ portion of this equation is the wealth aspect percentage, that, up until a couple months ago was zero. Also, Belgian believes that because the hedge function of gold is a dead concept, ‘x’ is going to zero. Thus, the ending equation will be 0+y or just ‘y’. Thus, I would expect that over time we will see ‘y’ outgrow ‘x’ as the leading percentage factor. It would seem to be that this is what is referred to as the revaluation process.

USAGOLD / Centennial Precious Metals, Inc.The Kings are gone but some Queens remain -- at better-than-bullion pricing!#14036801/11/06; 12:22:00

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USAGOLD Daily Market ReportPage Update!#1403691/11/06; 14:14:40">
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WEDNESDAY Market Excerpts

January 11 (from MarketWatch) -- Gold futures closed higher Wednesday, extending their gains above $550 an ounce as sentiment on the metal continued to be upbeat amid strong physical and investment demand.

COMEX February contracts closed up $4.40 at $550.10, after trading as low as $543.70 and as high as $550.80.

"Expectations for strong demand out of China and other major emerging economies, such as India, coupled with supply constraints and Middle East geopolitical concerns (Iran nuclear concerns and Israeli prime minister issue) has fed medium-term bullish sentiment," said Action Economics.

In the past week, gold has found support from a weaker dollar after China said it is considering diversifying its $800 billion of foreign reserves.

Many analysts predict that China will switch part of its reserves into gold, not just into other currencies.

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

canamamiFascinating speech - US trade objectives mid-20th century#1403701/11/06; 14:37:57

This is an excerpt from a speech given by Solon Low, then leader of the national Social Credit Party, to the Empire Club in Toronto in 1947. Low is basically forgotten today. Anyway, the oldtimers will find this excerpt fascinating (Shades of China today?):

"Now there are certain countries which for some years have been carrying on a very aggressive policy of foreign trade and investment. They have insisted upon favorable balances of exports over imports, and upon leaving these balances for investment in the countries to which they have sent their goods. By way of example, Canada has had difficulty in the past in balancing her payments with the U.S.A. whilst on the other hand we have had a surplus account with other nations. This has been mainly because the U.S.A. refuses to accept imports of Canadian goods sufficient to pay for her exports to Canada. This same policy the United States has insisted upon following with Britain, and some other parts of the Commonwealth. During recent years the United States has attempted to force upon all nations who would trade with her, a most-favored-nation-clause in her trade agreements. The strict application of this clause in her trade relations with Japan was unquestionably one of the important factors which goaded that country into preparing for and declaring war on the United States. The "most-favored-nation" clause is enemy number one of the British Commonwealth today.

Just why do I make that assertion? Let me illustrate the answer by quoting from Ludwell Denny's "America Conquers Britain", page 407:

"We were Britain's colony once. She will be our colony before she is done; not in name, but in fact . . . We shall not make Britain's mistake. Too wise to try to govern the world, we shall merely own it. Nothing can stop us. Nothing until our financial empire rots at its heart, as empires have a way of doing. If Britain is foolish enough to fight us, she will go down more quickly, that is all . . . Our weapons are money and machines. The other nations of the world want money and machines. Our materialism, though not power, is not matched by theirs. That is why our conquest is so easy, so inevitable."

There you have the point-of-view of the powerful interests who would destroy Britain and the Commonwealth by the force of trade weapons. How do they propose to do it? They have already gone far in their conquest. Nations of great productive potential, whose goods Britain and Canada and others need to keep up a standard of living, have refused to balance their trade with us by accepting our goods in payment for those they export to us. They have left their favorable balances in our countries for investment in industry and resources, with the result that a very substantial percentage of Canadian and British industry is owned and/or controlled by foreign interests, and consequently our economies among other disabilities, must bear the strain of all the evils of increasing debtor relationship. It is not beyond possibility that what Mr. Denny has forecast, the complete industrial conquest of Britain, will become reality unless world trade policies undergo immediate and radical change. "

FlatlinerEerie feeling#1403711/11/06; 14:41:29

Does anyone else see an exponential curve in this graph for Crude Oil? If that curve holds, one might expect 85-90 buck chuck in a few months.

The graph for Natural Gas ( looks like it's just come down to a more linear looking graph.

Don't commodities prices look like this during hyperinflationary times? Does anyone have graphs for things like coffee, sugar and other imports to the US?

Golden LionheartJ P Morgan and Affiliates#1403721/11/06; 16:34:43

I don't really follow the GATA story closely but I seem to recall that they see J P Morgan as one of the villians.

It is therefore interesting to see that J P Morgan Nomineees or J P Morgan Chase Company feature in the top 20 shareholder lists of many of the Australian gold producers and emerging gold companies.

To quote an example J P Morgan Chase has just raised its stake in a company in the State of Victoria to 8%.

To my simple mind this seems to indicate that Morgans anticipate a rise in the price of gold.

Any thoughts/comments?

GoldiloxExponential Oil curve#1403731/11/06; 16:39:58

@ Flatliner,

Why not? The dollar/debt curve is an almost textbook hyperbola. Just who's driving this bus?

The geniuses on CNBC today were remarking that any disruption in Iranian oil flow to Europe would result in a greater than $10 pop in Lt Sweet.

"No schweet, Sherock!" They made it sound astounding, when it's probably a very conservative estimate.

GoldiloxJPM#1403741/11/06; 16:43:12

@ golden lionheart,

Astute observation, but if you'd been following a few more inside tracks, you'd find that the "bankster boyz" are all playing "pump and dump" with the gold miners.

Puplava discusses it ad nauseum. I often wonder why he plays gold stocks if it irritates him so much.

Flatliner@Golden Lionheart#1403751/11/06; 17:41:35

Looks like the site now points to the link above. If you're suspicious of the "pump and dump" comment, give this site a read regarding naked short selling. Enjoy. (Maybe, see also:
Golden LionheartJ P Morgan#1403761/11/06; 17:54:05

but with J P Morgan I mainly see buying and holding..............
GoldiloxJPM#1403771/11/06; 20:01:51

@ Golden Lionheart,

If what you're watching is the retail trading scene, your observations may still be good news.

But to really track an investment banker's involvement, you need to know about the warrants held against loans, and the amount of float they received for client sales if they participated in the IPO, etc.

The daily volume is often just the tip of the iceberg, especially for companies that are getting additional financing with secondary offerings and such.

If they hold a lot of warrants, the trick is to run up the price, and then sell the warrants at a profit, all the while looking like an accumulator at Level II.

Gandalf the WhiteOOPS -- The US$ is at a ---CRITICAL --- level AGAIN !! <;-)#1403781/11/06; 21:53:21

Watch that 88.78 level !!!
The NEXT waterfall is going to be BEAUTIFUL for the YELLOW !

YGMGoldilox.. But to really track an investment banker's involvement#1403791/11/06; 23:51:41

You also have to know what their (Banks) loan involvement, advisory capacity is with the miners in question and the position the banker holds in Gold futures market. They hold leverage with loans (and are financial advisers) and can force or convince the miner to forward sell which is needed by the banker to depress Gold prices. ie; Goldman Sucks and Ashanti. Very muddy waters and very big conflicts of interest and VERY big money involved in these games played.
TownCrierEurosystem continues long trend, dishording foreign paper#1403801/12/06; 00:14:08

The consolidated weekly financial statement shows that while the eurosystem reallocated 5.5 tonnes of gold (a scant EUR 77 million) during the past week, it dishoarded a disproportionately larger stake in foreign currency, reducing its net position by EUR 1.5 billion.

Among assets, eurosystem gold and gold receivables now stand at EUR 163.8 billion, whereas the net position in foreign currency as a proportion of the total has slipped yet further, to EUR 161.7 billion.

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

How low can it go... stay tuned!

And to repeat, it remains my position that not only is the eurosystem gold juggling nothing to be alarmed about, but arguably it was the prerequisite action as necessary to jumpstart the gold-price liberalization era that began in 1999 and continues to this day and well beyond.

[If you have a hard time imagining the rationale behind this reallocation, I would point you to a crude financial parallel which might prove instructive. I would ask you to consider what the IMF did as as measures to get its Special Drawing Rights program of 1967-69 off the ground. To be sure, the IMF as an institution was convinced that these SDRs were as "good as gold", and yet despite that, instead of hoarding the SDRs all to itself, it did the "unthinkable" thing and allocated them amongst its collaborating nations, beginning in 1970.

Getting back to the modern situation with gold reserves, in the end, I think you will find it was a very small "sacrifice" for the eurosystem to reallocate one third of its metal position when the payback for such an deft strategy is the eventual revaluation of the remaining stockpile of reserves to many many multiples of its former value -- it having been forced into long stagnation under the outgoing dollar/IMF regime.

When you understand the trail ahead, you'll know that physical gold is THE place to be.


miner49erCB Gold Accumulation#1403811/12/06; 01:35:57

Busy, so just quickly on this. The $-faction analysts keep putting forth the same tired arguments poo-poohing the various statements about gold accumulation by the Chinese, Russians, et al. One of the favorites that keeps coming up of late is that it is not possible to obtain that much metal, so as to meet their stated percentage targets.

Now while I gather the person of only average intelligence can see right through this, the various $-faction analysts want you to draw the conclusion that the above is true -- at current prices, or the level "experts" tell you gold will attain -- this is of course these various pull-it-out-of-thin-air numbers that have been tossed around for years now, so that they have become "authoritative" through repetition: $600, $800, $1000 (max!!).

Sure, at those prices do the math, and it will take years for such an accumulation to be successfully obtained.

So honestly, are the CBs so stupid that they can't do basic math, or do they have some other numbers in mind? I venture that the $-faction analysts being trumpeted to the media by the various $-houses and WGC, must necessarily be composed of a) entry level weenies that are too wet behind the ears to know anything but what they learned in school, which in this case is only the strategy of the last war; or b) veterans that know all too well what the problems are, but must keep spinning it like this because the fortunes of those that butter their bread are at stake.

For years TC, and more recently 968 have been providing us the links to the weekly ECB releases, and we have observed the slow and steady dishoarding of forex reserves from their coffers, and the slow and steady increase in the value of their gold, until just recently the two met for the first time. So think of it, if the ECBS can be a net-seller of gold over these past years, and still find their gold reserves decidedly increasing on a percentage basis (now over 50% of their foreign exchange reserves!), surely banks that publicly state their intent to add to their gold holdings can also find their much more modest percentage targets attainable.

And, are the CBs so stupid that they announce their intent to buy large quantities of gold publicly to the marketplace? Please. I think people only demonstrate their own naivete when they even consider such possibilities. These people are not stupid, once and for all! If they make these pronouncements, it is only because they are ready for the show to start. They already have a) satisfactory in-hand accumulation; b) promises that ARE worth their weight in gold -- not like the contracts the munchkins in the general public hold -- and most likely private deals that we don't know anything about; and c) gold in the ground on their own soil that will find its way to the state at favorable pricing. Any publicly traded contracts they have outstanding are not what they are putting their hopes in. These are the last venue of accumulation, and the public pronouncements only come after they have secured their contracts at current low prices, surely. Will these people fear standing in line when the public futures markets fail? No, they are not paeons/pee-ons like us; as FOA said about such, "they will get their ticket punched."

So, it seems to me a combination of ignorance and arrogance on the part of $-perspectived folks that cannot make sense of these foreign CB gold accumulation, dollar dishoarding statements. The world is evolving and the gold market as B keeps warning, IS evolving. The balance of financial power is shifting to a consortium of states that DO favor gold appreciation, and the comments they are making of late are not spurious or superficial. Pay attention.

Golden LionheartJPM @Goldilox YGM & Flatliner#1403821/12/06; 02:29:54

The figures I see are listed on the ASX (Australian Stock Exchange)Form 604 Corporations Act 2001 Section 671B.
The form shows the date of purchase, price paid, quantity bought and the percentage held in that company. The form has the name of the JPMC officer who lodged the form.

The dealings are quite open for anyone to see and in the gold company that I mentioned JPMC hold exactly 8% of the ordinary shares. I will monitor this over the next few months on a regular basis.

This form is used for all shareholders who hold a substantial holding in any company in Australia

BelgianAnglogold-Ashanti#1403831/12/06; 03:17:57

This super hedger (gold forward seller) seems to be rather confident about a goldprice rise (short/medium term).
So, at the time they were selling gold forward and colluded in knocking gold's price down ($253)...they sold/commited this *CHEAP* gold to certain parties ! And what goes down (POG)...must go up. To *-WHO-* are they (and other mining buddies) delivering goldmetal (their product) into the wonderful contracts !!!-???
Is the hedging (forward sales) of major goldmines an enterpreneurial "nescessity"...or...are major goldmines doing a BIG favor to privileged goldmetal clients (Giants)!?

Why is it that the Big ownership and transfers of goldmetal *MUST* remain in the dark ? What is so special about goldmetal...that the ownership of it must remain secret !?

Is this part of the tools to manage the existing gold-market ?
Why are Barrick and Placer Dome merging ...whilst the general consensus seems to agree on a goldprice rise for the nearby future ? What's the "real" purpose for the merger ? Can't these two miners make it alone ?

If there is not enough "underground" gold anymore...WHY aren't goldminers declining their output, drastically ?
Or...can't the goldminers decide about their own future ?

Isn't it a funny change that the rand doesn't want to detoriate any further since 2001 !? A low, permanent weak, rand as to plunder cheap gold out of the South African golden arch.
Why had the goldmine share holders to remain speculative bull/bear punters for the past 35 years ...whilst providing speculative capital to bring goldmetal to the accumulators' vaults ?

Same story for cheap oil(gas) plunder all over the globe. WHO has been accumulating all the wealth that oil (gas) wealth has been delivering, during the past 3 decades ?

We better think (and act) fast about these fundamental questions, now ...before we will be faced with the "REAL VALUE" of gold and energy !

GoldiloxGold consolidates before seen spiking again#1403841/12/06; 04:34:21


LONDON (Reuters) - Gold consolidated on Wednesday after touching a 25-year high earlier in the week, but analysts and traders said it was building steam for another charge higher.

A rise in the dollar earlier had prompted some investors in Asia to drag down the metal, which surged 18 percent in 2005 and added another 5 percent in the past 10 days. It recovered some losses in European business.

"It's just a kind of consolidation phase but on a very, very high level. We always have to be prepared to see some sell offs but the overall direction is up," Wolfgang Wrzesniok-Rossbach, head of precious metals marketing at Germany's Heraeus, said.

Spot gold was quoted at $544.20/545.00 an ounce by 1557 GMT, slightly up from $543.80/544.60 late in the U.S. market on Tuesday. It spiked to $550.75 on Monday, the highest since January 1981.

Talk of China diversifying some of its dollar asset reserves was a major factor in driving gold higher earlier this week, although a senior central banker said media had wrongly interpreted a statement from the foreign exchange regulator.

Analysts said gold was set for further gains in 2006 and had the potential to breach $600 an ounce.

Australian investment bank Macquarie said it had raised its gold price forecast by an average of 19 percent in 2006 to $565, while Barclays Capital hiked its average price forecast for 2006 by 13 percent to $525 an ounce from $465 previously.

Physical demand for gold has also been affected due to such high price levels.

"We will be more comfortable with a positive view on the metal once physical demand has re-appeared again, although...we believe lower and more stable prices are required for physical buyers to re-emerge," John Reade of UBS Bank said in a note.

Reade noted gold had already broken above his $540 one-month forecast, but remained short of his 3-month objective of $555.

Dealers remained positive on gold, with investors diversifying into precious metals due to worries about the outlook for the dollar, global tensions and firm oil prices.

"I think they are going to try and push it higher towards this $550 level again, although I remain a bit wary of people taking profits," one dealer said.

The dollar lost ground against the euro and steadied versus the yen, as the market waited data that could offer clues about U.S. economic growth and the monetary policy.

Thursday's data is expected to show a narrowing of the U.S, trade deficit in November from a record shortfall the previous month.


Not without the "obligatory statement" on China reallocation, but pretty bullish on gold. The trade deficit numbers will probably carry today's action, given no other geopolitical or geological drivers. Lower oil prices may help the trade deficit look like benign, but remember, oil has recently shot back up from the Santa Claus levels used to buoy retailers in December.

Chris PowellDerivatives backlogs rise despite banks' efforts#1403851/12/06; 07:10:23

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USAGOLD / Centennial Precious Metals, Inc.Convert the seasonal 'fruit of your labor' into enduring value!#1403861/12/06; 08:19:56

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Flatliner@miner49er – just a snip.#1403871/12/06; 10:33:05

Historical Miner, thank you. I have been searching for a while in order to try to find an understanding to Another's comments of old that the price of gold is low because no one is selling. Then, your comment came along today "Sure, at those prices do the math, and it will take years for such an accumulation to be successfully obtained." … That, is very insightful.

Maybe I'm seeing things backwards, but Another always talked about "Big Trader" having cornered the market years ago. Basically, those that want to acquire large amounts of gold to represent the real wealth of the dollars that they hold – cannot. As everyone here knows, their simply isn't enough gold in the world. Any action to try to acquire large amounts of gold – in public – also, can not be done as "Big Trader" demonstrated years ago. The affect is that "Big Traders" of the world have been locked out of the public markets.

Miner49er's comment seems to support this by looking at the process by which a "Big Trader" must go through publicly to acquire gold. "it will take years" for such a big trader to fill a huge order in a public way!

Now, let's go back to Another's point of view that the price is low because no one is selling. From my point of view "You may never sell your gold again" puts me in that "no one is selling" group (and no, I'm not a Central Bank!). So, it seems interestingly backwards that because no one is selling physical in the paper markets "Big Traders" do not shop there. Thus, the price is low – Real demand does not go through the paper markets. Miner49er's comment sums it up really nice! If "Big Trader" had to go through the paper market, it would take them years (and years and years) to accumulate what they really want because the supply is not there.

Reflecting on Another's comment from ’97 (ID#60253) "Fact: If the world bids up the price of gold, all deals will be off! It would be every nation for themselves.Oil would explode in price!"

What happens if the world bids up the PoG? It's simple, more sellers enter the market. If the price is bid up far enough, LOTS of sellers enter the market. At some point, "Big Trader" will find enough sellers in the market to fill his big order!

What about "the world" in Anothers comment? Well, look around you! "The world" seems to be interested in gold again! There is a ‘mood’ about it that the gold market has not seen in many, many years. It seems, that "the world" is bidding up the price. "The world" is overwhelming the gold market's ability to supply physical. Unlike how they treated "Big Trader", ‘the world’ CBs can not say to ‘the world’ – stop! You are going to blow up the system!

It seems to me that the CB's of the world have been selling piddly little amounts into the public system in order to satisfy the OLD world's thinking. They had the ability and desire to maintain the system as long as people valued Dollars over gold.

Times have changed. "The world" is involved now, the end is near. You may never want to sell your gold again!

RimhRussians revalue to market price#1403881/12/06; 11:33:00

Following the ECB's lead, Russia shows how much stronger the balance sheet looks with appropriately priced gold reserves. Hark, is that a trend I see developing.....?
TownCrierFed buying bills, adding permanent reserves#1403891/12/06; 15:51:27

NEW YORK, Jan 12 (Reuters) - The Federal Reserve said on Thursday that it was buying bills in the open market, adding permanent reserves to the banking system.

The Fed said it was buying bills with maturities ranging from February 23, 2006 to May 4, 2006.

The benchmark fed funds rate last traded at 4.25 percent, the Fed's current target for the overnight lending rate.

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

The size of the operation was $1.249 billion. Given the targeted maturities, the 'permanence' of this reserve injection is mostly jargonistic; with respect to money supply this effectively translates into something more akin to a 1.5 - 4 month repo operation.

Speaking of which, the Fed today conducted two. Seven billion dollars was temporarily injected via overnight repos, and ten billion dollars was added through 14-day repurchase agreements.


USAGOLD Daily Market ReportPage Update!#1403901/12/06; 15:54:53">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

THURSDAY Market Excerpts

January 12 (from DowJones) -- Gold futures recovered from early weakness to finish with only tiny losses in New York Thursday. Speculative buying returned after an early profit-taking pullback that was blamed largely on a stronger U.S. dollar.

February gold settled down 80 cents to $549.30 but well up from a low of $543.20.

"The original fall was in response to the trade numbers and the strong U.S. dollar," said Bernard Hunter, director of precious metals at Scotia Mocatta.

The U.S. currency was boosted by news that the country's trade deficit narrowed 5.8% to $64.21 billion in November, compared to a consensus forecast of $66.5 billion and a revised $68.13 billion in October.

Forex analysts said the dollar also got some help when the European Central Bank left interest rates unchanged.

"Underlying the market is still very, very good investment demand," said Hunter. "The overriding trend of the market remains positive."

A trader commented that a pattern seems to have developed in gold over the last week in which profit-taking pullbacks are met by renewed speculative buying. "There has been a lot of speculation going back and forth," he said.

"Somebody will be taking profits while somebody else gets in. Net, it really hasn't moved that much over the last week, although you've had some pretty big ranges each day."

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

SundeckRussian CB gold MTM...New Year resolutions...New World (financial) Order??#1403911/12/06; 16:30:07

Ref Rimh #140388

I just love that "official" wording:

' The CBR said the change in its calculation method was due to "the need to bring published data in line with current market realities." '

As if some junior official in the CBR went to work one morning thinking: "I really must fix up that little, nagging oversight that has been around soooo long. I'll do it as part of my New Year's Resolutions!"

Perhaps (in regard to the suspension of M3 publication in March) the FED might have said something similar, like:

' The FED said the suspension of M3 publication was due to "the need to bring published data in line with current market realities." '

....cruel financial satire from the FED...


Gandalf the WhiteQuestion ---#1403921/12/06; 16:32:40

Late last May, IF you were a Zimbabweian and had one ounce of Gold, YOU were a Zimbabweian MILLIONAIRE !
TODAY, IF you still have your one ounce of Gold, you are a forty-eight times over --- Zimbabweian MILLIONAIRE !!!!
The Question is: WHEN AND WHY, do you sell your one ounce of Gold ?

TownCrierThe Belgian chocolate theory of the dollar#1403931/12/06; 16:34:53,_i_rssPage=af37e996-cbfd-11d7-81c6-0820abe49a01.html

(FT) January 12 2006 -- A few weeks ago an interesting experiment was undertaken at the Brussels food fair, a yearly affair where food lovers wander around among the many stalls stuffed with all imaginable delicacies.

A shop was put up selling boxes of Belgian chocolates. The first day the price was set at €9 for each box. Sales went well.

The next day the price was raised to €15 per box. Steeped in economic theory, you might think that demand now declined. Wrong. Demand doubled.

On the third day the price was lowered to €2 for each box. Demand for chocolates collapsed. What went wrong with the law of demand?

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

If you can get your mind (and your mouth(?)) around Belgian chocolate, you will have a useful insight into the price-wranglings of the gold market. To wit, you will understand the utility of a 20-year gold-price decline (1980-1999) during the long deliberate build-up to euro launch, followed by a sudden turnaround that has the "Belgian chocolate phenomenon" among the assurances that even as the price goes higher, the market will gain fundamental support through a greater depth of participation.

In other, simpler, words... when it comes to gold in particular, there is no such thing as a price that is "too high". (That is, especially when viewed in isolation. Only when cross-currency prices are compared does a rational basis for RELATIVE price levels come into play. But even then, when viewed globally as a general price level in all currencies, we can still gain insight from the above-referenced €15 versus €2 price per box phenomenon.


Gandalf the WhitePS: <;-)#1403941/12/06; 16:35:55

That QUESTION is a -- "NO PRIZE" -- Question !
(For educational purposes only !)

Flatliner@Question#1403951/12/06; 16:50:29

"IF you were a Zimbabweian and had one ounce of Gold" you would have also bought a hand full of ounces of silver. Every once in a while, you sell an ounce of silver to live. Then, you remain a Zimbabweian MILLIONAIRE !!!!
Belgian@Towncrier#1403961/12/06; 16:52:45

I saw the experiment some weeks ago. The same trick doesn't work with products that aren't percepted as having "value". But the Belgian pralines are valued. We even have chocolat with finegold leaves on it.
I could have doubled the sales of the expensively priced boxes, simply by suggesting delicately that the interested person cannot afford these valuable delicacies.

The same, but opposite, psychology was used by the goldmanagers during the old old regime. But one day gold-observers are going to have tell the general public that gold-wealth is not affordable anymore for modest folks. Oooooh, la nature humaine...vanity, nothing but vanity.

Sundeck...and Hallelujah! "Narrowing" trade deficit saves The Dollar..#1403971/12/06; 16:56:22

...from #140390...

"...the country's trade deficit narrowed 5.8% to $64.21 billion in November..."

Man-o-man, now that's truly "appears" we are not overspending quite as fast as we were in October!

Definitely worth a dollar-kneejerk...

Notice gold's blink was followed by a continuation of its concerted stare...

More a "wink" than a "blink"...


Belgian@Flatliner#1403981/12/06; 16:57:28

Let me tell you some simple present fact : Many organised burglers from the East-block come down to central Euroland and do steal systematically almost...ALMOST...everything...except "silver" (included old coins) !!! Sorry, mate.
Flatliner@Belgian#1403991/12/06; 17:12:53

Then a Zimbabweian would have not bought gold in the first place? ??? Knowing all along that "burglers from the East-block come down" to take everything but silver? I wonder if TC's chocolates are wrapped in something that will have value after they are consumed. Beer bottles just don't cut it. :(

Hopefully, the demise of the dollar will be slow and painless.

SmeagolWizard's poser#1404001/12/06; 17:19:28

"The Question is: WHEN AND WHY, do you sell your one ounce of Gold ?" - Gandalf the White

WHEN? When sselling It is the only option left.
WHY? To get more options.


SundeckOf gold, chocolate and tomatoes...#1404011/12/06; 17:21:22

TC, Belgian et al.,


That is an old grocers' trick as well...a wholesale consignment of tomatoes (say) is divided into two parcels and placed upon the shelves with different price-tags...$3 per kg and $4.50 per kg, say. The grocer finds that sales of the more expensive lot are comparable with (or may exceed) the less expensive lot.

This jiggery-pokery is not so simple though. There are limits to every trait that "the market" exhibits...gullibility being one such trait. Had the grocer placed the more expensive lot on sale for $25 per kg it is unlikely that he/she would have made any sales from that lot. In fact, the whole think may have backfired when customers see through the attempt to swindle them and leave the store en masse...

On the other hand, if some prominent person (say) is seen to be "conspicuously" buying the $25 tomatoes, a rush may out the store of every tomato in sight...even the squashed ones on the floor!

..."la nature humaine" indeed, Sir Belgian.

Lesson: Retail marketing of gold, like tomatoes, must be handled deftly...


David Linkley@Belgian #1404021/12/06; 17:36:07

Hi Belgian,
I just wanted your thoughts about why is the COT so heavily short gold. If gold is going up and countries are MTM their currencies to gold then why stand in front of a speeding train? On one hand you and TownCrier maintain that gold sales help raise the price but on the other hand you mention the need for an orderly rise. Is the COT gang shorting at the behest of the central banks or are they on their own?

I ask because $550 is being defended aggressively and I know several hundred thousand gold calls are in the money now not including calls on the gold stocks. Goldman Sachs is covering on COMEX but shorting aggressively on TOCOM.
What gives, any thoughts?

TownCrierBelgian msg#: 140396, humanity and psychology#1404031/12/06; 18:02:57

Fortunately, every single one of the many USAGOLD-Centennial Precious Metals clientele are blessed with superhuman attributes of being both wise enough and prosperous enough to load up their personal vaults and safes with gold coins and bullion. They know, almost as second nature, that "low value" can be held in paper form as reasonably as in any other (simply because there is little risk in having not much to lose), whereas "high value" (high net worth) demands the accumulation of gold metal because a paper representation of one's wealth is simply not good/reliable enough.

However, while this happy situation is certainly true of Centennial's clientele, unfortunately, it's sad to say, NOBODY ELSE can afford to have, and take action on, that same degree of wisdom/instinct.


TownCrierSundeck, I love tomatoes, but...#1404041/12/06; 18:13:37

"The same trick doesn't work with products that aren't percepted as having 'value'."

As superficial as it may be, it nonetheless bears upon the case that no-one would think to impress anyone with a crate of tomatoes rotting a week hence, regardless of price paid.


Clink!vanity, nothing but vanity#1404051/12/06; 18:46:11

"Vanity - my favorite sin !"
Al Pacino as John Milton aka The Devil in The Devil's Advocate

David Linkley@humanity & psychology#1404061/12/06; 19:08:06

A friend of mine remarked back in 2002 that Americans will dislike gold at $300 - $400 but will love it at $600 -$700 and higher. Many of my clients who thought I was nuts back then are beginning to ask questions now.
OvSBelgian.#1404071/12/06; 21:08:23

I read every word of yours
about gold and try to
absorb your very deep and
profound knowledge about
the metal and all those
political connections.

But you do not understand
silver. As far as I am con-
cerned it is not a monetary
metal; there is not enough
around and it is constantly
used-up...So how in the world
could it be a monetary metal
down the road? It's more in
the nature of palladium, or
platinum, or rhodium (which
traded for $5,200 dollars for
one ounze not so long ago,
and now is meandering around
$3,000). Enough of that.
If East European gangs don't
rob or steal silver and or
other old coins...well, they
just aren't so smart then.

The silver petition crown coin
of 1663 sold in 2003 for
138,000 pounds.
The 1796 no pole half cent
copper coin sold for $506,000.
A Thomas Jefferson Indian pence
'medal' went for $115,000 and
an 1804 Silver Dollar from the
Walter H.Childs collection for
$4,140,000. Yes, that's millions.

Back to gold and all those impli-
cations; it's immensely inter-
esting and like an international
thriller book a la Le Care.
Respectfully yours, OvS

GoldiloxGold Leads Stocks in a Bullish Technical Pattern#1404081/12/06; 22:19:02


A long-term chart ratio suggests that gold will outperform stocks in the next few years. Based on technical analysis, the odds favor stocks dropping with gold stable, gold rising with stocks stable, or gold rising with stocks falling. Since the beginning of the gold bull market, analysts have been pointing to the out-of-whack low gold to Dow ratio as a reason why gold should outperform stocks in the years ahead. This is fundamentally correct, and now it appears that there is a technical signal that suggests that the gold to Dow ratio should get back "in whack" sooner rather than later. "Sooner" means in the next 3 years or so.

The long-term monthly chart below depicts the Gold to Dow Jones Industrial Average (DJIA) ratio from 1990 to the present. After making a bottom in 1999, the ratio had a successful retest of the 1999 low in early 2001, before forging ahead until early 2003. If you had bought gold at the second bottom and shorted the Dow in early 2001, you would have made 100% on your money by early 2003. The ratio then formed a basing pattern until the end of 2005, and now appears to be breaking out to new multi-year highs. The two moving averages displayed on the chart (10 and 30 month) seem to suggest a bullish long-term pattern. The out-performance of gold compared to the Dow puts all the media excitement about Dow 11,000 in perspective. In terms of real money, the Dow has done nothing in recent years.


I would add, the DOW has not only done nothing, in gold terms it has dropped 55% in five years.

DOW2000 (11k) = 45 0z gold
DOW2006 (11k) = 20 0z gold

Which one guards your future financial security?

Belgian@David#1404091/12/06; 23:50:25

Blunt answer : To hell with all gambling positions on the goldprice ! Shrimps (us) can never win (net-net) against the goldprice derivative bookmakers.
After having speculated full 25 years on goldmines, I "had" to conclude that gold IS in the process of changing and that all further goldprice speculation/gambling will end badly ...with great loses...opportunity losses, for the most succesful amongst us, who would succeed in break even.
David, I even don't look at any position anymore. I want the chocolat, the tomatoes, and the BULLION in my hand...NOW !

No stocks, no bonds, no derivatives ! I don't even bother to short all this stuff. Am definitely "out" of the arena and don't even watch the games anymore.

Belgian@OvS#1404101/13/06; 00:12:56

Most probably I do not understand silver !? And if one day, I meet those burglers...I'll ask them why they refuse to take the silver ! And they will definitely not get away with some blablabla explanation...

There are soooooo many precious (and rare) metals out there, OvS . I happen to live close to a metals refiner (Umicore). Many of those rare (essential) metals are being valued for ever more reasons. But Euroland banks stopped providing silver, long ago. Today, the banks still do deliver goldmetal...and will continue to do so.
My conclusion is simple : Silver's future is different from gold's future. Made my choice for gold on this argument. And shrimps better make the right choices as we cannot "diversify" and miss the best opportunity in our short and modest lives. There are good times to make money...and these are usually followed by times where one better "consolidates" one's savings in an appropiate tangible, sit back, relax and watch.
Am I getting old !?

OvSBelgian#1404111/13/06; 00:32:05

You are funny. Thanks
for making me laugh out
loud. Good night. OvS

BelgianDow and goldprice :#1404121/13/06; 01:39:09

Again and again,...the financial experts try to correlate ad nauseum. As if the entire gold-buying world is constantly watching "the Dow" and suddenly realizes that paper is overvalued and gold undervalued.

Maybe the goldmanagers decide to let the Dow drop back to one thousand and have Dow/ to contain the goldprice ! Nonsense of course...complete nonsense.

The Big gold-change, happening now, is the process where the goldprice is ***delinking*** from everything they always wanted to link (correlate) it with !

A rising goldprice should be viewed as inflation hedge. But why should the Dow have to deflate when there is inflation (monetary + price) !? And if the goldprice is rising because of inflablabla...why aren't the IRs inflating ?

The financial industry is fooling the entire public with masses of inconsistancies, conveniently presented as "conondrums". They are telling us HOW we have to look at and percept, gold ! Their vision is enforced on the entire world with the one and only tool of goldprice-control (euh management). But a growing majority on this planet is NOT buying this old gold-regime anymore.

Manage all things paper-financial as you wish...but...stay away from goldpricce management. This message is subtly send (and shared by) to a coalition of gold=wealth advocates.

Sticking the goldprice evolution firmly to the Dow-index...means, that when paper is to be raised in price again...the goldprice should decline, again ! This time it is NOT going to work that way anymore. That's why the goldprice is rising against all currencies (confetti). And the goldprice is not going to stop when paper is pulled into a gold-standard (semi fixed goldprice) again. Gold is being revalued and not re-priced. Cfr. the Belgian chocolat (many) prices and (one) value. The "value" of all the gold shall represent all the value this planet has created (is creating). Gold-management shall not be abused anymore as to keep all the world's debt, credible ! That is the essential difference between gold-pricing and gold-valuation.

SundeckDow:gold ratio...the Ghost of Sundeck-Past...#1404131/13/06; 04:28:39

I thought that I had written something on this subject and posted it here before...sure enough...for those of a stalwart disposition...

check out #103526...

Mmmm...I think I still think the same as I thought then...."Of all the things I ever lost, I miss my mind the most!"


White RoseWatch gold zip up there#1404141/13/06; 08:50:21

$554.10 for gold, $9.10 for silver, and $1025 for Pt.

Something is going on. It is worth watching.

Clink!Now that's what I call a SPIKE !#1404151/13/06; 08:50:27

+$8 in half an hour. Tighten seat belts, and you may be needing those drop-down oxygen masks !

GoldiloxGold futures rally, trade at fresh 25-year high#1404171/13/06; 09:34:44{F2B9686D-9B80-4721-8FED-C0170C343B1C}&siteid=bigcharts&dist=bigcharts


SAN FRANCISCO (MarketWatch) -- February gold climbed as high as $557.30 an ounce in New York, an intraday level not seen since March 1981. The contract was last at $556.90, up $7.70, or 1.4%. It's trading almost 3% above the week-ago close of $541.20 with metals trading on the exchange set to end by 12:10 p.m. Eastern ahead of Monday's Martin Luther King, Jr. holiday.


Three percent a week sheds a new perspective on the "miracle of compounding".

Better than 10% since gasoline prices were held in check for the holiday shoppers.

The $6 daily limit is seems to be a "barbarous relic".

Flatliner@Wizard's poser#1404181/13/06; 10:12:25

"The Question is: WHEN AND WHY, do you sell your one ounce of Gold ?" - Gandalf the White

This is a very interesting set of questions. When and why, ... truly! Smeagols answers, although true, left me less then satisfied. And, as Gandalf the White pointed out, it was for educational purposes only. So I do ponder...

... That last May a Zimbabweian millionaire had the foresight to convert some of his dollars into a ounce of gold. Last May, it cost (maybe) a million dollars and eight months later it would sell for 48 million (If he so choose to sell).

The first thing that pops out here is the timeline. May to January is æ of a year. Looking at the link provided, we also see that the PoG more then doubled (seemingly) overnight on one fateful day in October after having already gone up by a factor of nearly 10. This Zimbabweian did not have to wait long for the markets to move around him. Hyperinflation happens very fast.

A second thing that is less obvious is that during this same time period, the price of wheat has remained relatively constant everywhere else in the world ( The same holds for many other commodities that this millionaire may want to acquire. So, even though the PoG in the Zimbabweian dollar has gone up more then 48 times, it really means that the value of this dollar has gone down to 1/48th of it's original value.

Now, when does he sell his gold? That brings in another point that is discussed here by many. That is the fact that gold, even on this local level, is a political metal. As long as the government of Zimbabwe continues to print money in an out-of-control manor, that millionaire would be a fool to sell his gold for anything valued in Zimbabweian dollars.

With this in mind, he has two options, either wait for the government to get their act together and win back the confidence of the people in the country in order to stabilize the dollar, or, he converts the wealth that he holds in gold into items that can not be acquired with Zimbabweian dollars. If he is a noble millionaire, he may take his gold and purchase some wheat on the world markets. If he is ingenious, he would convert that into a finished product and sell it to his starving neighbors and then quickly convert the proceeds, once more, back into gold (if he can even find gold, but, that may be unlikely in this type of environment). If he is capitalistic, he may find that his wealth has elevated him into a profitable business that can help him acquire more gold.

I can logically conclude that it is misleading to believe that because the price goes up in one country by 48 times, that the purchasing power on an international scale also goes up.

The more interesting puzzle is to look at the inflation that is happening on a global scale. What if, on some fateful day in May or June, you wake up and find that the PoG in *your* currency is now 3 or 4 or 5 times higher? Are you suddenly richer? I would expect that you would immediately search for international comparisons in order to determine exactly what happened. Did the value of the currency deflate or did the value of gold get re-valued up? If it were me, as a simple check I would look to see if the PoG tripled in all currencies or just in my own currency. If it tripled in my currency -- welcome Zimbabweian type hyperinflation. But, if it tripled in all currencies -- welcome gold re-valuation, but with caution! It may be that the price of wheat also increased by multiples making the spread between gold and wheat diverge by only a few percent -- not 48 times.

We live in interesting times. It will take a group effort to see through the deception of global inflation. It may be that gold will buy things that currencies can not touch in the near future. I would hold my gold, today, so as to hopefully be able to buy those things at some day in the future.

GoldiloxPPI Jumps 5.4% YoY and 11% rate annualized#1404191/13/06; 10:55:06


You were wondering why the Federal Reserve is in such a hurry to lose the M-3 reports? Well, as I've been telling subscribers to our site for a couple of months, my outlook for 2006 is "inflation in the first half and deflation in the second." Today's Produce Price Index, up at an annual rate of 11.3% annualized rate is pretty much in keeping with our expectations.


We seem to be forgeting the mantra:

There is NO inflation, There is NO inflation, There is NO inflation.

Gandalf the WhiteThanks "ALL" for thinking about the QUESTION ! <;-)#1404201/13/06; 10:57:39

Sir Smeagol's and Sir Flatliner's responses were not the only that I have received, as a number came directly to me from the four corners of the WORLD !

One, from SE Asia was of the thinking, "When needed to SAVE your and family's lives !"

I have personally seen exactly this in action before ---
My former Secretary was from Vietnam, and her family's GOLD was used to "book" the only young child's transportation on a fishing ship to HK in the midst of the war.

ANOTHER Answer was:
When "everyone" that never was interested in buying Gold wants to "obtain some" at any price --- THAT is the time that you should be thinking about selling SOME of yours !

IF you were around in the USA during the 1979-1980 era, you have seen this in action also. (SAME with SILVER too.)

KEEP THINKING as the YELLOW has now smashed through the $555 level ! WHERE is Alice ?

Gandalf the WhiteBEAUTIFUL job "SPIKE" !!! <;-)#1404211/13/06; 11:00:37

Gandalf the WhiteBTW --- #1404221/13/06; 11:04:11

Have you ever seen a more PERFECT "UP-FLAG" than this one in progress ?
Alice is not in KANSAS anymore !

Gandalf the WhiteDIVE, DIVE, DIVE !#1404231/13/06; 11:13:29

THERE goes the US$ !
Back to the 88.8 level !!

White Hillssmall market gold#1404241/13/06; 13:39:34

Something interesting from the trenches. Small amounts of gold 1gm, 2 1/2 gm, 5 gm, 10 gm are selling at great premiums as fast as they are offered. The range of prices run over the 556.50 that gold closed for today. The equivalent of 930.00 per oz is common and even greater spreads are there depending on the form the gold comes in. It is all .9999 fine. The average guy is starting to buy gold in small amounts. As the supply gets smaller prices will go even higher. White Hills
USAGOLD / Centennial Precious Metals, Inc.Queens available -- at "better-than-bullion" pricing!#1404251/13/06; 13:55:36

January Buyers' Group
Special discount pricing on Dutch 10 Guilders

Shop online or phone for addtional savings.
Call today, save today!

SundeckGold price moves#1404261/13/06; 14:02:51

Nice price step...around $10 in spot...

Looking at the historical gold charts for 1979 and 1980 (for example, at the K-castle)...there were a couple of $60-70 daily increases in Jan 1980 during the late blow-off phase of the gold price. Before that, quite a few in the $20-30 per day range. So a $10 daily move is "quite respectable".

Of course, it is probable that "we ain't seen nothin' yet"; considering the substantial devaluation of the dollar in the last 25 years, the state of the national finances and the parlous prospects for the dollar going forward.

...the Moon is still a long way off and Dorothy (don't you mean Dorothy, Sir Gandalf?...#140422) and Toto are only just leaving Kansas...on their way to rendezvousing with To-the-Moon Alice...


specie-manWhen do you sell your gold ?#1404271/13/06; 14:08:22

Those who have been wise enough to put some or all of their savings into gold during the last six years have obviously done well. As such, the question above, could be phrased differently:

"When do you sell your savings ?"

The simple answer to both questions is:

You don't ever "sell" your gold - you "spend" it (when the need arises).

White RoseThe real question for today#1404281/13/06; 14:45:20

According to Sinclair, gold has shot past the level needed to trigger some sort of derivative event. If all goes according to the predictions (as I understand them), various members of the gold cartel now will be jumping ship, making a fast move up in price.

Does anyone believe this? Or am I just an obnoxious kid saying "are we there yet?" over and over on a very long car ride?

BelgianLBMA figures for december '05#1404291/13/06; 15:04:06

Rather high !? Theory : Are the gold paperpricers pushing the goldprice up in anticipation of metal delivery from USTreasury as to keep the dollar ball in the game (oil invoicing + reserve status) ??? Thoughts anyone.
TownCrierPut on your thinking caps#1404301/13/06; 15:11:00

The following note came in today by e-mail:
"My son is working on a project... hoping you can help... the topic he wants to discuss is

'What would happen if all the gold in the U.S. was destroyed?'

Without getting into the 'how', he would like to study the effects of the loss of all the gold in the Federal Depository."

I figured, why not share the fun of this challenging scenario?

I'm sure many of you recall the specific motivations behind Goldfinger's desire to destroy the U.S. gold supply in the 1964 James Bond film, but you'll want to further take into account that we were on an international gold standard in 1964 (by which the dollar had a fixed redemption rate against gold) whereas that is no longer the case today. (Basically, Nixon did administratively on August 15, 1971 that which Goldfinger failed to accomplish in 1964).

With that, I'll turn it over to you all to help give this young man some talking points.


osa104cafter burners ignite with OWN o2 #1404311/13/06; 15:12:47

dollar game? No, real fear developes when ALL parties panic.. US$ at 85.40....get out your leaf blowers...trash OUT!!
Flatliner@LBMA figures for december '05#1404321/13/06; 15:16:06

Belgian, what are "LBMA figures for december '05"? Also, thinking back to Another's comments that because no CB sold into the paper market, the price remains low. I'm just guessing here, but if the US Treasury offered gold for sale in the paper markets, the price would explode! Every "Big Trader" would call in some gold. ... But, I may be completely missing the intent of your posting. I will look for clarification.
SurvivorFurther to Gold Price Moves (Sundeck)#1404331/13/06; 15:22:52

In 2006 dollars, those 1979 -1980 moves would need to look like this for an apples<>apples comparison:

$10 move in 1980 = $23 move in 2006 dollars
$60 move in 1980 = $138 move in 2006 dollars

Only a matter of time until those are the kind of numbers we will witness.

- Survivor

BelgianUSTreasury gold#1404341/13/06; 15:26:09

From the original 28,000 tonnes of UST gold, 20,000 tonnes moved to Europ pre 1971. If the dollar ($-IMS) is already buying time with shipping goldmetal (from the 8,000 tonnes left over) to those who still support the $-reserve status and invoice oil in is only a mater of time before the $-IMS must transition into another monetary system. No gold-reserves in the vaults means nothing to Mark To the Market as all the wealth reserves have gone.

This might explain why the goldprice rises without affecting the USDX !?

SurvivorThe Answer: When to Sell Gold? #1404351/13/06; 15:31:51

@Specie-man #140427

My humble compliments to you good sir. That is exactly the answer I have been trying to put into words for some days now. Brief, to the point, and spot on!

- Survivor

Belgian@Flatliner#1404361/13/06; 15:32:40

If (!!!) the UST is already shipping/delivering goldmetal from its will NOT go through LBMA, but directly to the privileged receivers. At LBMA, it are the gold-contract players who manage gold's price.
If one "has" to deliver goldmetal, one better delivers at the highest price possible. In sharp contrast with the strategic redistribution of euro-gold as attractive as possible, at the lowest "official" be revalued at the appropiate time.

USAGOLD Daily Market ReportPage Update!#1404371/13/06; 17:11:48">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

FRIDAY Market Excerpts

January 13 (from Reuters) -- Gold futures in New York reached a new 25-year high on Friday, as a weaker dollar and frenetic speculative buying before a holiday weekend rekindled a rally in precious metals, dealers said.

COMEX February gold futures jumped $7.7 to $557 after trading from $545.20 to $558.80.

Gold blasted higher as investors who are bullish on the market for 2006 increased their stakes before a long weekend. New York metals are closed on Monday for the Martin Luther King holiday.

With the strength of the buying, futures managed to break past initial chart resistance at $550.50 and surpass Tuesday's quarter-century peak, at $553.10.

"The funds are coming back to buy it to new highs on a weak dollar and strong euro," said James Quinn, a market commentator at AG Edwards & Sons, at the floor of the COMEX.

Money managers and investors have increased exposure to gold and commodities as they diversify away from currencies, equities and bonds in hopes of boosting returns. Concerns about the economy, geopolitics and a weaker dollar in 2006 also have attracted investors to the precious metal.

The dollar slipped Friday as traders questioned how much further the Federal Reserve will raise interest rates, after U.S. retail sales data came in weaker than expected and producer prices were higher than forecast.

Separately, Deutsche Bank raised its gold price forecast by 16 percent to $570 an ounce for 2006 and by 26 percent to $660 for 2007.

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

SundeckDanger time for America#1404381/13/06; 17:27:52

...cover story on The Economist.

Greenspan passing the (explosive) baton.

Meanwhile, "The World"...where to from here?

Median housing prices in much of Australia have fallen about 10% over the last year. Suspect similar slump in UK and elsewhere. Equity draw-downs must be becoming less of an option for many...although perhaps the baby-boomers still have a lot of equity tied up in their houses??? Will they call upon it for the "good-life" in retirement and leave their kids nought? Or will they need it just to survive in place of pensions that are too lean for the task, leading to banks ending up owning most of the housing in "deceased baby-boomer estates"?

Damn it Janet...what we need is another good bubble somewhere!

Don't go to sleep and miss the Bernanke Chapter just over the page...


MK*******760.00****** theBullionDesk's Ross Norman gets it right, agrees with MK; Sinclair, Gandalf probably close but no cigar#1404391/13/06; 17:58:52

"Gold is forecast to average $618 a troy ounce in 2006 - with a high of $760 an ounce, and a low of $520.75 - according to UK-based consultancy" [Ross Norman]

"Looking at the charts the big numbers like $550 and $600 are really only psychological numbers - from the charts perspective, and they're important, there isn't very much between here and $800 actually, and that's the high we saw back in 1980. You tend to find a little bit of resistance at the big numbers, because people that want to sell choose the big numbers to leave those orders on - so they only provide a bit of a hurdle. But from a technical perspective there isn't too much resistance from here, and northwards all the way up to $800."


MK: These guys predicting $750 (ahem) and $755 (ahem) are missing something in the analysis. Ross Norman has it right at $760 (ahem). And I'm not saying that just because he agrees with me. We web site proprietors have to stick together. When we get to 2007, we can clink the champaigne glasses or cry in our beer. Both joy and misery love company. So welcome to $760, Mr. Norman. 'Tis a good number.


Meanwhile back at the castle. . .

Gandalf, is this is a violation of contest rules? This Ross Norman thing.

Oh, we are not having a contest, you say?

But I thought we were.

What's that? We are but we aren't? A trip to the Treasury is not going to be required? By the saints, methinks you've hit on something, my wizardrous friend. Contests without prizes! This is one of your greatest innovations. You are truly a Great Wizard.

Oh, you think it only temporary, and an aberration. . . . By all that's holy, Wizard, I take exception to your use of the word "cheap." I'm not, I say. Thrifty would be the more elegant description.

Back to Ross Norman. What about outside guesses? Are they now acceptable?

You're thinking about that? Very good. We need an answer. What's more, as you always say, we need rules.

What's that? Speaking about rules, you're not sure if I can enter the contests?

True, it's never been done before. Ahem. . . .It IS difficult to award oneself a prize. This is truly a conundrum. . .

No, Wizard, I do not believe that the word "conundrum" is over-used. Sir Alan would never overuse a word. Remember the one about irrational exuberance. . . Whoa, what a furor over two words. . . .

(Voices fade down corridor, metal door clangs, echoes. It's time to sup and and greet a good weekend after a very good week)

Chris PowellSouth Korea spends $1 billion to suppress its own currency#1404401/13/06; 18:35:08

The Chosun Ilbo, Seoul, South Korea
Friday, January 13, 2006

Government intervention in the currency market boosted the value of the U.S. dollar on Friday, when the greenback surged 13.80 won to 987.80 won. The exchange rate opened up W2.00 at W976.00 on an increase in the yen-dollar rate and continued to rise rapidly as government intervention fostered buying movement. Insiders say the currency authorities were at their most active so far this year by
buying $1 billion.

Meanwhile, Finance Minister Han Duk-soo defined the current
appreciation of won as abnormal. "The won-dollar rate is falling too much. I shared this opinion with Bank of Korea Governor Park Seung during a phone conversation today," he said at a forum on advancing Korea in Seoul.

Chris PowellAsian currency unit draws near, much to dismay of U.S.#1404411/13/06; 18:36:39

Single Asian Currency Comes a Step Closer to Reality

The Chosun Ilbo, Seoul, South Korea
Friday, January 13, 2006

The Asian single currency, which so far exists only in the minds of economists and officials with international organizations, will take on more concrete reality soon.

The Asian Development Bank plans to publicize the Asian currency unit (ACU), a notional unit of exchange based on a "basket" or weighted average of currencies used in the 10 ASEAN member countries plus South Korea, China, and Japan, the Yomiuri Shimbun (Tokyo) and others reported Friday.

But that does not mean that any bills or coins will circulate any time soon. The ACU is only the first step toward the integration of Asian currencies, a "virtual currency" that takes into consideration gross domestic product and trade volume of each of the 13 nations and serves as a gauge for governments to implement foreign exchange policies. So far Japan and China have tried to make their own national currency into the Asian currency, but their jostling in effect canceled out the efforts of the other. That is why the ACU is gaining support on the road to a single currency.

Given that it took more than 30 years for Europe to launch its single currency, the euro, Asians also probably have a long road ahead until the ACU or its successor chinks in their pockets. However, it could take less time than in Europe, since internal trade volume in the region is increasing faster than external trade volume with the U.S. or Europe, according to Yun Deok-ryong, a researcher with the Korea Institute for International Economic Policy.

Still, many obstacles lie ahead. The U.S. above all is likely to worry that it will lose its influence over Asian economies and use the International Monetary Fund to block the introduction of the ACU.

The launch of the Asian Monetary Fund, which is to coordinate monetary policies in the region, faces objections from the U.S., which does not want to see an Asian single currency emerge as another key currency along with the dollar and euro in the global financial market, an official with the Ministry of Finance and Economy said.

Chris PowellCopper and other base metals are turning into currencies#1404421/13/06; 18:37:37

Platts News via
Thursday, January 12, 2006

Copper is no longer behaving as an industrial raw material but as a financial instrument, Bloomsbury Minerals Economics said in a report on the impact of commodity index funds on metal prices Thursday.

"We think that it is pointless continuing to analyse copper prices as if they were simply prices of an industrial raw material. For now, copper is behaving essentially as a financial instrument," said BME analyst Peter Hollands, adding that Commodity Index Fund buying was raising copper prices above the level that would otherwise be seen.

"Demand for metals futures is compounding the effect of market deficits and low physical stocks. Copper price behaviour has made a transition from being primarily that of an industrial raw material to that of a financial instrument," said Hollands.

He said, however, that the index fund demand for metals drives up prices, which attracts money to the index funds, which drives up prices: "It is a bubble."

"Life has become very dangerous indeed to the physical copper industry," he warned.

Hollands also noted the breakouts of actual price from modeled physical-market fair value that have emerged in aluminium and zinc during 2005 and in lead and nickel this month.

"Commodity Index Fund investments have had an equally dramatic effect on gold by converting it from a currency and real-interest-rate driven financial instrument to a Commodity Index Fund-driven financial instrument, causing gold prices to correlate positively with base metals prices," he noted.

Hollands said Commodity Index Fund investments were expected to rise from around $80 billion now to $105-115 billion by the end of 2006 and $140-150 billion by the end of 2007, provided that a major bear market in commodities has not begun by then.

"Some of the newer funds are more metals-intensive. If Index Fund investments do grow like that, then index fund buying could add the equivalent of 350,000-525,000 metric tons of demand for aluminium futures, 180,000-270,000 metric tons of demand for copper futures, 100,000-150,000 metric tons demand for zinc futures, 70,000-105,000 metric tons of demand for lead futures and 100,000-150,000 metric tons of demand for nickel futures, in both 2006 and 2007," he said.

Hollands noted that the impact on price may well be most extreme in metals where there are also deficits in the physical market and very low stocks.

"The end of a fundamentally-driven bull market in commodities will most likely bring the inflow of investment money to a halt but may not prompt a great deal of disinvestment. The pensions industry seems to have accepted a long-term role for commodities holdings for the purposes of diversification, inflation hedge, offsetting weak developed world currencies, and gaining exposure to emerging market growth," said Hollands.

SundeckRooster crowing in the castle?#1404431/13/06; 18:56:42

Is that a rooster I hear crowing in the castle?

Sounds like: Cock-a-760-dollar-doo! Or something like that...difficult to discern amongst the echos...perhaps the hens are all laying golden eggs...

Could this crowing cock be signalling a new golden dawn?

Is China going to feature highly in the next golden day?

Next Chinese calendar year (commencing 29Jan06) is the Year of the Dog (doesn't sound too good for the Dow)...2007 will be the Year of the Boar...and then the Year of the Rat...

Coincidentally, 2005 was the Year of the Rooster - signalling a golden dawn indeed!!

Sir MK, I hope next year that you are still crowing (and not eating your crow instead!!!).



Clink!Moving measurement units#1404441/13/06; 19:03:31

While having to admit that TA can be extremely useful, I have difficulty in taking seriously any estimates that are based on the $850 peak in '81. Even the illustrious Richard Russell is talking about the 50% retracement level between $850 and $250 (see link). Well, that might be fine if he's talking about a 2-year chart but, unfortunately, that figure of $850 is rather misleading, as it is a number of 1981 dollars which, as Sir Survivor kindly informed us earlier today, is maybe worth 2.3 times that or $1955 in today's money. (Of course, it is a little difficult to calculate in real terms as so many points of reference in any inflation index have shifted in the intervening period) So it just goes to show that we have a l-o-n-g way to go before approaching the froth of '81.


PS. Of course, I know that you didn't use any of this tomfoolery to arrive at your prediction, MK. You probably just borrowed the wizard's crystal ball for an afternoon.

David LinkleyExcuses#1404451/13/06; 20:42:06

Although I thought it not possible for a US President to outdo the damage Bush has done, Bush himself is raising the bar. The inflamed dialog with Iran has begun and the major powers have chosen sides. The question is will this President yet again sanction an attack on a sovereign nation on false premises? The real crime of Iran is to plan on opening an oil bourse in March of this year trading oil in Euros. This President seems intent on dividing, indebting and isolating the US. Make no mistake a new era in the US and world is now decending upon us. War and scarcity are in the air and their is no escaping. I pray that many of you are out of debt and hold physical gold. If the US participates or sanctions an attack I believe chaos will follow.

Gold will tell us just how much of a challege we have ahead of us. Throw out the gold charts, we are living in a time akin to 1939-1940, good luck.

Bizarro-Greenspan"Euro 350 is the line in the sand." ,ORO,May, 2003#1404461/14/06; 00:05:20

"To make the banker's position clear, the business of banking is the marketing of debt. The denominator of the debt need not be on hand at all. When one opens a non-allocated gold account ( the normal type of gold account ) , then the bank is under no obligation to have any gold to back the account. The bank only needs the gold when the gold is requested for delivery in hand or into a fully allocated account.

Thus the banker will take your dollars deposited as a gold account, and use them to buy bonds or lend. If gold or Pt was deposited the bank will do one of the following:

1. If currency interest rates are higher than metal lease rates, it will sell the metal, buy the currency and invest it.

2. If the lease rate is the higher rate, the bank will lend the metal itself.

3. If reserves are low, and there is danger of a "bank run" ( depositors of metals asking for their metal ) then the bank will keep the metal for reserves, however, it will sell call options into the market in order to make a return on the reserves. Often, these calls would be delta hedged."


Liberty HeadPutting Gold To Work - The Oso Negro Plan#1404471/14/06; 00:43:29

After watching "Treasure of the Sierra Madre" yesterday, I had a business idea.
With the pending implosion of the US dollar, I anticipate a big demand for dormitory style flophouses in the near future. Privately owned flophouses, like the Oso Negro, not gov't owned flophouses, like The Superdome.
Those of us who own gold now are well positioned to own a franchise in these new Oso Negros.
Movies like "Treasure of the Sierra Madre" will play in the lounge. Maybe have kids run around selling lottery tickets, too. Are you with me?

Remind the guests "this is a country where the nuggets of gold are just crying out for you to take them out of the ground and make'em shine in coins and on the fingers and necks of swell dames."

Then perhaps open a prospecting supply/donkey rental business with beans and ammo too, just around the corner from each Oso Negro.

The bonus of this plan is knowing the greedy ones will never make it back alive. On a large enough scale, this could thin the herd until there is nobody left to run for Congress or manage a Central Back or the Federal Reserve.

Only honest people and gold will be left.

Oh well! It's getting late. "I think I'll go to sleep and dream about piles of gold getting bigger and bigger and bigger."

Best Wishes

geEU joins US in condemning Iran – A Sketchy Attempt for Interpretation#1404481/14/06; 00:58:20

1/ EU does not have indigenous energy resources and must import energy.
2/ Currently, Russia is the main energy provider for EU.
3/ Recent Russia-Ukraine events have demonstrated that energy supply can be used as a political lever.

Iran is the only alternative for EU to gain energy independence from Russia & US. As a side note, EU has to secure both Iranian energy and it transportation route for energy independence from both US and Russia.

EU joins US in condemning Iran.

1/ EU has given up energy independence plans. May be there was a deal and EU received something else in return?
2/ Joint US-EU force is now planning for sanctions. Quoting from BBC:
"What kind of sanctions? They would be trade-orientated, aimed primarily at the one major industry that Iran has - its oil and gas."
3/ Sanctions would result in higher oil and gas prices.

Gold StandardIranian Oil#1404491/14/06; 03:18:48,12858,1677542,00.html

David Linkley, your #140445 hypothesised that "The real crime of Iran is to plan on opening an oil bourse in March of this year trading oil in Euros."

The real crime? Are you seriously proposing that Iran's President has not recently given a strong indication that (a) Iran's nuclear ambitions go far beyond "peaceful" electricity generation, (b) that he desires Iran to have the same level of nuclear arsenal as Israel, and (c) that Israel should be wiped off the face of the earth?

Are these falsehoods that unfairly impugn the peaceful Iranian Government (whose only real crime is to seek to set up its own bourse) being unfairly reported by conservative media sources in the USA? Perhaps you should read what a fair and balanced journal like The Guardian says (see link).

It matters little whether oil is priced in Euros or $US, as it all comes down to electronic entries on computer screens anyway.

To project some sort of US hegemony where a gun-toting President Bush blows the crap out of any nation who has the temerity to even think about selling oil in Euros, to me simply indicates that it well past medication time.

968@ Gold Standard#1404501/14/06; 03:51:09

WHY is it a problem for the US if Iran should obtain a nucleair weapon ? Can you elaborate this please ?
Belgianeuro-dollar competing currencies....#1404511/14/06; 04:22:46

The main question is : Are both currencies allowed to compete ...ON ALL LEVELS !? Is it opportune for the global $-IMS, to have competition between two major currencies !?

Or, the question that is interesting us here in particular : Does "gold" play a role in the euro-dollar competition !?

BelgianNuclear deterrent#1404521/14/06; 04:33:46

Pakistan, an islamic fundamentalist state, with a military leaderschip, was allowed to acquire nuclear power as to balance with India's nuclear power. But Pakistan has no oil deterrent. Oil being of "global" strategic interest, through the oil for dollar reality.

In other words : No major oil-reserve state should have nuclear power ! Only oil consuming states have the right to have a nuclear deterrent.

Consumers that control the very fundamental (oil) of global economy and oil-owners who are excluded from this global prosperity.

This is of particular interest for Russia as an energy/resource rich state "with" nuclear power ! Watch how Russia and Germany are getting closer and closer !

GoldiloxPast Medication time?#1404531/14/06; 05:17:31

@ Gold Standard,

It seems you are suggesting that those who stop taking their medicaton are "a threat"? Given that "homelessness" is now a "crime" in many US cities, there are obviously those in power who are "all too regular" in their medication regimen. Why is it that those with "itchy trigger fingers" always want those who express restraint to take ever stronger drugs?

More seriously, I'm not sure where else you've been lurking, but most here have agreed that war actions of late have had a strong financial component. The major topical disagreement has been the question of how much of one.

Notice that none of the other "Nuclear threats" are targeted for anything beyond occasional rhetoric, even those who are already "locked and loaded".

What makes Iran more "dangerous" than North Korea, Pakistan, etc.? The answer may lie in their oil-based financial independence, because the others are so poor that they must rely on outside "paper aid" to survive, having no serious natural resources to barter. Islamic gold Dinar? That one's been completely squelched.

If Iran falls, No Korea and Pakistan will not be the next targets, as they have nothing to offer in the way of "spoils of war." Venezuela, Bolivia, and Brazil, however, are looking a little too "socialist" to the admin. But wait, if socialism is the target, why are Great Britain, Canada, and the EU not on the list? Ya gotta get way past O'Reilly, Hannity, and Colmes for any of this to make sense.

"Resource wars" has been a strong topic even on right-of-center sites like Puplava, so maybe that's a good place for you to get up to speed on the subject.

GoldiloxA Partial Resolution#1404541/14/06; 05:25:01


The year 2005 will be remembered for many things. For one, it will be remembered as a year that twisted, stretched and broke many statistical relationships and historical norms on both the bullish and the bearish sides of the equation. For example, a bullish statistic that has held true since 1896 was broken. That statistic showed that since the inception of the Industrials, every year ending in a 5 had been an up year. That was until 2005, which broke that record as the Industrials did finish the year marginally negative. Also, a bearish relationship that ultimately proved to be invalid came with the break into the April lows as both averages confirmed each other by breaking below their January Secondary lows. This put both averages in gear to the downside, yet this break was later corrected and the averages moved higher. I could go on and on with more examples, but the point is that 2005 was marked by both failed bullish advances as well as failed bearish breaks, and in the process, many of the historical relationships and norms were either out right violated or stretched.


2005, the year of financial conundra? Tim Wood offers an interesting look at the first few weeks of 2006.

Ned@ Gold Standard, 968, others.......#1404551/14/06; 05:26:04

Gold Standard,

-2 of your quotes

"Are you seriously proposing that Iran's President has not recently given a strong indication that....... Israel should be wiped off the face of the earth?"

"It matters little whether oil is priced in Euros or $US, as it all comes down to electronic entries on computer screens anyway.

To project some sort of US hegemony where a gun-toting President Bush blows the crap out of any nation who has the temerity to even think about selling oil in Euros, to me simply indicates that it well past medication time."


I think you may want to slow down and go back to the research board.

I had once thought the simple exchange of my home currency to dollars to facilitate an oil purchase was all that was required. It goes a lot deeper than that. There are many, many articles and notes on this throughout the internet. DO NOT assume its only a simple currency exchange or an "electronic entry".

The Iranian President or Prime Minister or whoever WAS CLAIMED to have made the statement of Israel "off the map" did so in a long-winded address that I read a few months ago. There was a carefully presented pre-amble which set up the delivery of that infamous sentence. It's been a while since I read that passage but IT MIGHT have been something to the effect that Israel has been beating the war drums and if it attacks Iran, Iran will retaliate and as a consequence "Israel will be wiped off the map". Again I forget the exact phrasing and posturing but trust me it wasn't as if the Iranian walked up to a podium and blurted "Israel should be wiped off the face of the earth".

I hope during the course of the weekend either myself or someone else can help you (and I) with these 2 misconceptions, if I may, that is perceived.

Thank you.

NedHere's a starter.....#1404561/14/06; 06:04:46

""'In his battle against the World of Arrogance, our dear Imam [Khomeini] set the regime occupying Qods [Jerusalem] as the target of his fight.

"'I do not doubt that the new wave which has begun in our dear Palestine and which today we are also witnessing in the Islamic world is a wave of morality which has spread all over the Islamic world. Very soon, this stain of disgrace [i.e. Israel] will be purged from the center of the Islamic world – and this is attainable."

(Khomeini sets the stage years and years ago with the memorable "wiped off the map" statement. Ahmadinejad references the Khomeini statement)

""There is no doubt that the new wave in Palestine will soon wipe off this disgraceful blot from the face of the Islamic world," he said. "As the Imam (Khomeini) said, Israel must be wiped off the map."
"Anybody who recognises Israel will burn in the fire of the Islamic nation's fury. Anybody who recognizes the Zionist regime is acknowledging the surrender and defeat of the Islamic world""


also see:

for a full

"world without Zionism"

Goldiloxcomputer bits and bites (pun intended)#1404571/14/06; 06:07:19

Gold Standard,

Your quote,

"It matters little whether oil is priced in Euros or $US, as it all comes down to electronic entries on computer screens anyway."

is exactly what those who control the FIAT currency explosions want everyone to believe. This is truly an antithesis to your own screen name.

Our major agreement here is the about the viabilty of gold as a "measure of value", often to the point of realization that the "out of control" FIAT printing machines (be they real or virtual) employ gold suppression as an important tennant of their success.

Which is the real "measure of value"? gold in hand or the "electronic entries" that have grown 28% in the last six months based entirely on public debt?

SpartacusIran #1404581/14/06; 06:16:02

Belgian (1/13/06; 15:32:40MT - msg#: 140436)

"If one "has" to deliver goldmetal, one better delivers at the highest price possible. In sharp contrast with the strategic redistribution of euro-gold as attractive as possible, at the lowest "official" be revalued at the appropiate time."

What if Merkel and Bush have made a deal regarding Iran…… Germany will stay passive in case of an US attack on Iran and in return get a high gold price, which will undermine the euro(gold)system? ….. AND maybe open a door for Germany to leave to euro…… After all the Germans were forced by the French to accept the euro, as a price for the German unification... Divid et impera? Just thinking out loud.

OvSAsian Flu#1404591/14/06; 07:19:45

A recently returning
Belgian traveller to
Turkey has been hos-
pitalized with the
suspecion of having
contracted the deadly
flu virus.

BelgianHohooo Spartacus#1404601/14/06; 07:24:36

Angel(a) Merkel is part of the EU faction that is still nostalgic for a euro-dollar coalition (or union). Trans-Atlantic free trade zone.
But the bulk of the gold redistribution has already taken those very low goldprices ! There is not that much left for much further distribution.
The increasing priority now is oil/gas-peace and reliable flows at reasonable (economic viable) values. An excellant negociation platform for all parties (forces) involved.

A rising goldprice is "positive" for the euro ...short-medium-long term ...and negative for the $-IMS ! The competing currencies, both go after the oil. The essential (fundamental) difference between the two is gold. That is the only reason why these subjects belong on this forum.

A compromis about Iran's future (US-EU-China-Russia)and(Japan-India) is in our common interest. And seems so far being in the interest of gold's price (and later revaluation). Also a nice frame for having the evolving transition in an orderly way (through further negociations instead of devastating confrontations).

Angela has started with opening doors (multilateralism), but don't expect her to kniel down for anyone/anything. The ongoing (transitional) competition will steadily go further. Now you see some new political action taken by another faction in Euroland. Positive for gold without having negative effects on things (presently) related to gold (currencies) !

France never forced Germany into the EU (EMU). Angela's first visit was straight to Paris. Forget about the divide and rule logic. Isn't having any effect anymore.

All the above illustrates that the evolution towards freegold cannot happen and exist in a vacuum (politically, monetarily, economically). It is a step by step (gigantic) process that builds upon the new fundamental concept for gold.

The present goldprice rise hasn't changed anything, but the price of gold. So there is no argument for suggesting that the goldprice rise was part of any (political) negociation. Russia, China and parts of South America will get their gold-wealth out of the mines on their territories. This can happen with a rising goldprice, without having these mines selling their gold forward with the intention to help (collude) knocking down the goldprice.

Bear in mind that the organized goldprice crash ('99-'01) served the purpose to sabotage the $-competing (gold)euro.
Allowing the goldprice to rise orderly is allowing the euro to compete somewhat more freely. In that sense, it might be percepted as a concession...but it isn't.

DruidUKRAINE GAS DISPUTE - HAS PUTIN GONE NUTS?#1404611/14/06; 08:54:00


It's more useful to assume that the answer is ‘no.’ Then we must ask what is Russia doing with its gas price policy demands and supply cut-off to Ukraine?

It's clear that the move is one part of a complex series of Russian moves in the ongoing Grand Chess Game. That game is between Washington as sole global superpower, and Russia as a reconstructing nuclear power--one with a vast resource wealth needed by its Eurasian neighbours from China to Germany and beyond. Russia, which holds far the world's largest known reserves of natural gas, is playing its own energy card with Ukraine as the current field of that battle.

The Ukraine drama is clearer if we look at it in the context of a series of very quiet but dramatic moves recently by the Putin government in the realm of energy and national military preparedness.

Part I: The Ukraine issue

Just one year after the Washington-backed Ukrainian President Viktor Yushchenko came into office in Kiev, promising to bring Ukraine into NATO and into the EU, Putin and the Russian state-controlled Gazprom natural gas monopoly of Russia, cut gas supplies to Ukraine on January 1. The ostensible reason was that Ukraine refused to pay a 450% price increase for Russian gas demanded by Gazprom for its delivered gas.

By January 4 both countries announced that they had reached a compromise settlement. The terms appear to be a face-save for both sides: Ukraine's state Naftogas, and Russia's Gazprom. Under the Byzantine fine print Ukraine agreed to pay Gazprom's demand of $230 per 1000 cu m for gas. The gas flows to Western Europe were reported back to normal after falling by up to 30% on January 1-2.

Some 75% to 80% of all Russian gas exports to Europe flow via pipeline through Ukraine at present. That fact has become a strategic Achilles Heel for Russia now that Yushchenko's Ukraine is moving towards NATO.

There are two aspects to this peculiar situation which bear further examination. The first is commercial; the second is geopolitical.

Fallacy of ‘world market price’

For more than a quarter century the major Western oil companies led by ExxonMobil, ChevronTexaco, BP and Shell, have tried to establish the artificial construct of a ‘world market price’ for natural gas, similar to the Brent or Dubai or WTI daily price benchmarks. A global market in gas is far more awkward than for oil simply because of the transport problems. Gas needs pipelines or costly LNG terminals and tankers and is thus less mobile. Oil by contrast is controlled by four giant Anglo-American oil majors—ExxonMobil, ChevronTexaco, British Petroleum (BP) and Shell. Those four determine world oil prices. Because it has not been possible to create a controlled global market for natural gas, the gas tends to be pre-sold in contracts typically of 20-25 year term.

What has resulted is a patchwork of different prices, usually in some opaque, undisclosed manner, tied to a formula linking it to crude oil such that, when oil in dollars drops by say, $1, gas would drop along with, but by how much is a proprietary secret of the gas companies and for obvious business reasons—lack of price transparency can hide a multitude of sins. That non-transparent price formula allows companies like Germany's E.ON-Ruhrgas to charge significantly more for its gas to end-users when oil prices climb above $60, even though most of its gas deliveries from Gazprom are in typically 20 to 25 year fixed price contracts with small variances possible.

The Gazprom Ukraine dispute opened the Pandora's box of confidential gas pricing to the world as Russia revealed Western customers paid some $450 tcm compared with the then $50 tcm Ukraine enjoyed.

Gazprom argued that raising that to $230 or about half the western price, was a fair price. Gazprom is in the process of becoming a global energy giant on a par with BP or ExxonMobil.

Putin also signed a decree on December 28 lifting the limits on foreign ownership of Gazprom, an ostensibly market-oriented move. It made good a promise Putin made two years ago on the controversial arrest of Yukos Oil chairman and political rival, Mikhail Khodorkovsky, namely that he would liberalize the shares of Gazprom, in a matter of ‘months not years.’

Gazprom share ownership by foreign interests was previously capped at 20% of total shares, and the Russian government held the remaining and controlling share. Foreign investors were limited to Gazprom London-listed American Depository Receipt shares.

Gazprom shares will now be listed on the Russian stock market later this month. Gazprom has a current market capitalization of $160 billion, dwarfing the next largest Russian stock company, LUKoil with $50 billion capitalization, and Surgotneftegaz with $40 billion.

The new law will also bring Gazprom into the widely followed Morgan Stanley Capital International emerging market index, dramatically shifting weightings there for index tracking investors. That has major implications for international financial portfolio investment.

Gazprom argues it was ‘commercially’ justified in breaking an August 2004 Gazprom-Naftogaz supplement contract which specified a fixed $50 price until 2009, a price it said then was ‘not changeable.’ All that being said, the Gazprom-Kremlin move was clearly a hardball Russian geopolitical warning, with an eye to both NATO and upcoming Ukrainian Parliament elections in two months.

Druid: An excellent read in light of todays and recent discussions. It delves into natural gas price structure and the vaious relations that countries have with each other built around natural gas and oil.

Is Europe trying to do an end run around the US politically by pressuring Iran? This would make sense in that Iran (and many others) are trying to extricate themselves from the petro-dollar deal to a Euro-dollar deal.

Excellent read. Belgian, Miner, MK, TC, OVS, Goldi,968 and many others thanks.

GoldiloxEngdahl Article on ME NatGas#1404621/14/06; 10:06:23

@ Druid,

Thanks for posting that great piece of analysis.

With nearly 70% of the world's NatGas in the region, there is definitely some serious "liars' poker" being played.

S/B required reading, before anyone runs off on a tangent about "ideological differences" . . .

As usual, "follow the money!"

Druid@Goldi#1404631/14/06; 10:26:24

Druid: Thanks. This point in time as it pertains to things economic/political/financial just gets more and more difficult to read as the poker hands keep getting called and then raised. I know that TC takes a lot of heat for his laser like focus in his postings but I for one sure appreciate it because his focus is at the heart of the game and not the ball. The CB's represent the monetary architecture and this architecture IS changing throughout the world. I for one know when my intellectual game has been raised to such a level that it's difficult to keep up, I try to on occasion, thank those that have contributed to that awareness. Belgian's my Seer.

Now back to the "game".

geEngdahl site#1404641/14/06; 12:27:14

DruidDruid (1/14/06; 08:54:00MT - msg#: 140461)#1404651/14/06; 12:51:49

"Is Europe trying to do an end run around the US politically by pressuring Iran? This would make sense in that Iran (and many others) are trying to extricate themselves from the petro-dollar deal to a Euro-dollar deal."

Druid: That should read "Euro-petro deal" doh!

USAGOLD - Centennial Precious Metals, Inc.A timely reminder of our 2006 New Year's Resolution...#1404661/14/06; 13:57:35

Navigating the Wide Seas of Discussion

As the New Year arrived, we felt it would be a good time to implement a change -- a "New Year's Resolution", if you will. We are looking forward to 2006 as an important year for gold and the international economy. It is our sincere hope that this unique forum will continue its strong legacy in serving as a source of information and opinion for our current and prospective clientele.

After much deliberation, including input from USAGOLD-Centennial Precious Metals clientele who either participate in this forum or visit it regularly, we decided to return to the "gold-only" discussion format, INCLUDING WEEKENDS. We see this return to our original format as being in the best interest of the firm, and best serving the folks which gather here.

***The Litmus Test: Acceptable posts include discussion of economics, financial and monetary markets, and geopolitics -- that is, insofar as they each are made to demonstrate relevance to GOLD ownership, pricing, etc.

***If you see a post disappear, it likely was deemed sufficiently off-topic to warrant removal. Consider that to be a gentle warning. A pattern of individual abuse will be met with subsequent revocation of posting passwords.

The rest is up to all of you -- to carry forward in the spirit with which we created this forum and with which we would like to see it sustained. Let's not forget that it wasn't too many years ago that discussions like this on gold as it relates to our political, financial and economic well-being did not even exist. The mainstream press controlled what was heard about gold, drowning out all others having quiet voices and smaller audiences. We have been turning the table here for nearly eight years! If we all appreciate and take personal responsibility for what we have here and make it better place for all visitors, both new and old, by this we will nourish something special for ourselves and those who follow after.

Onward with the discussion. . .

USAGOLD / Centennial Precious Metals, Inc.Especially designed for those who are taking their first step...#1404671/14/06; 13:58:24">gold ownership starter kit
Liberty HeadGeorge "Zapata" Blake on FSO#1404681/14/06; 15:19:07

There is an outstanding interview with Mr. Blake at Financial Sense Online. This straight talking country gentleman tells it like it is. His topics are oil, gold, silver and global politics.
He sinks every nail with one hit.

Best Wishes

GoldiloxBlake interview#1404691/14/06; 17:49:22

@ LH,

The Blake interview was enlightening, or perhaps better said, "a good summary" of the financial situation the world finds itself in today, especially in the metals and energy markets. But while he does a good job of hyping the Oil industires efforts at staying current in exploration, pricing, and geopolitics, he pretty well brushes over the link between government and big oil althogether and treats them as "adversaries", and one glance at the current US and UK admins suggest this is not so.

Given that oil is so necessary for economic growth in the current scheme of things, his premises are not far off. He alludes, however to a very important variable while he is talking about VW manufacturing in China. He assumes that all energy MUST come from oil, which is not a surprising statement coming from one of "the good ole' boys" of the oil market. But he also mentions the possibility that the billion atomobiles in India and China over the next ten years might find alternate power sources that we are not predicting.

What pray tell, happens to the energy paradigm if, perchance, the many alt energy movements that have been so heavily suppressed (overtly and covertly) by government subsidy of oil (defense support, tax advantages, continuing growth as a customer, etc.), suddenly find new support from the rising tide of world unhappiness with the oil cartels/governments handling of such.

I can't say that I have a a specific scenario in mind, but just for the sake of more complete examination, futures algorithms should include the possibility of oil losing its monopoly on the energy business, and tranportation losing its prioirity in globalized manufacturing. It will certainly not "go away" in our lifetime, but we may experience a radical change in priorities.

How might this affect the gold market? Only enough to redirect its flows from oil masters to "other masters," I would think.

Liberty HeadGlobal Energy/Global Money#1404701/14/06; 22:42:55

@ Goldilox

You pose some excellent questions. The dollar losing its monopoly on oil is the more immediate concern as I see it. The expansion of big oil/big gov't empires are tied to fiat currency schemes. They intend to defend their empires at all costs. I'll bet the good ole boys will be throwing nukes before they go down. Their arrogance is as unbounded as our Federal Budget.
For the survivors, it will be good to have gold and speak Chinese.

Best Wishes

GoldiloxUnbounded Currency Expansion#1404711/14/06; 23:21:10

@ LH,

I think we're pretty much in agreement. History demonstrates that unbounded currency expansion is nearly always a precursor to war, as said expansion is used to fund a disproportionate amount of "defense" toys.

I know Belgian has his fingers crossed for a peaceful redistribution of gold and power, but that's much harder to achieve, as Blake reminded us in the interview.

Rook.,.#1404721/15/06; 00:07:38

Gandolf, I would shave off some of the ounce of gold, buy whatever property I felt would not immediately make me a target of thieves and murderers, settle back into living off the land, and keep the rest of the gold. If they are into some hyperinflation in zimbabwe, would it be smarter to wait out the crash and sell a little gold then?
BelgianWhat is happening with gold !?#1404731/15/06; 02:16:10

After a decade of gold-action, the physical gold market is cornered ! Next job is to break the gold pricing power of the gold contract market. And this is what we are seeing :

During the past 3 decades (1971), physical gold was price by contract gold. This resulted in a gold market that had enough available goldmetal to satisfy the marginal demands.
Now, it is the other way around : The cornered physical goldmarket is systemically breaking the (former) gold contract power !

The final purpose is to pull gold and its management "out" of the infla monetary system and "in" the gold=wealth concept.

It is gold-wealth that is going to say what your credibility is or isn't. That's why gold's link to fiat had to be severed (Duisenberg). That's why Russia/China/Sout Africa/Argentina...made the recent statements : Gold shall not be infla-money anymore, but wealth. And wealthy nations are taken more seriously than poor ones.
All the CB actions of the past decade should be seen against this background.

Infla linked gold paralyses the management of the monetary system. Unlinked Gold Wealth supports the monetary system.

The ongoing gold action is a process that is breaking the goldprice management that had gold incorporated into the monetary system.

The gold contract market will be lured into the goldpricing arena, again and again (cfr. dec.LBMA figures) and be given the illusion that it still can "manage" the goldprice. Then the cornered physical gold market will pop up and break the contract gold positions, resulting in repetitive losses.

Think about it and check it by watching carefully.

SpartacusGold/Dollar/Euro#1404741/15/06; 03:32:09

Belgian (1/14/06; 07:24:36MT - msg#: 140460)

"A rising goldprice is "positive" for the euro ...short-medium-long term ...and negative for the $-IMS ! The competing currencies, both go after the oil. The essential (fundamental) difference between the two is gold."

I agree.

Belgian (12/19/05; 00:53:20MT - msg#: 139466)

"The world's dollar-holders cannot hedge and then the political will to stop this unfunctioning goldmarket, rises. That's the moment that EMU comes up with its alternative...a euro physical gold market, where you can hedge your dollar holdings with functional PHYSICAL GOLD instead of with unfunctional paper gold contracts."

But.... I think We overhere in Europe underestimate what it really takes….politically…. for EMU…. to come up and implement its alternative ....a euro physical gold market.

Thank You for your great independent thinking all these years.

Belgian@Spartacus#1404751/15/06; 04:28:35

Don't worry about, what you call, "implementation". Everything (gold's happening future) is concealed (wrapped) in the notion (concept) of freegold-goldwealth.
The decades of western gold-marginalization process is being stopped and reversed. The concept is so broadly based that it doesn't need implementation. We will simply roll into it. It is exactly this process that hyper confuses all (western) gold observers !

Make no mistake,...the general public has seen the recent gold(price) move ! Soon, the former marginalization of (infla)gold will be over. It simply takes a new ATH for the goldprice to change the "moods" and perceptions. The real content of "wealth" will be restituted through a soft and sweet process.

Forget about all the old gold terminology (media) to describe what is happening to gold.

No military power can stop the ongoing process of physical gold accumulation by those who always had it function in its role as wealth. EMU simply had to provide the "structure" behind the will to revalue gold. Watch the idea of ACU that points in that same direction ! Watch Dubai...the city of gold !

Allow me to repeat a previous remark about the recent Russia/China/Sout African gold-statements : Why should/would they announce the accumulation of gold, when they already know that the physical gold market has been cornered !? They simply wanted to get ONE message across : WE WANT GOLD AS WEALTH !!!

Ned...."the Wide Seas of Discussion"#1404761/15/06; 05:01:44


On one hand I see the 'Iranian' posts have 'survived' but on the other I see my reference to the search for a "world without Zionism".

The thorny issue of Zionism was of course not the topic of the moment but rather a reference to the Iranian leader's mention of the yet another thorny issue of Middle East conflict, namely Palestine and Israel.

This doubled-edge Iranian sword, namely the oil bourse in the spring and the nuclear ambition charge, is drawing a lot of attention. Even CNN and main stream news outlets mention the supposed ambitions of the U.S./UK & possibly Israeli miltary.

I apologize for approaching the edge of appropriate discussion, this post is meant to get the subject leaning back towards a gold-oriented flavor.

Gold does not like nervousness. This Iranian situation is making it more so day by day. This we watch with bated breath.

Have a golden weekend Sir.

BelgianGold does not like nervousness > Ned#1404771/15/06; 05:28:58

This old mantra is "definitely" passé, Ned !!! Forget about this cultivated gold(price) axioma. But if you wish to continue seeing what you want to see...please feel free to do so.
Gold is on Another road and NOT disturbed anymore by what was supposed to move the goldprice in the old days.
Concrete : Iran or no Iran...will not change anything on the new "fundamentals" on which gold has embarked.
It is not the general public's buying (or selling) that is making (breaking) gold's price-trends !!! It never was.

Gold was priced by those that guardian the monetary system in which gold was incorporated. This has been taken over by those who cornered the physical goldmarket and now work to break the gold contract pricing power. Physical now controls the paper goldpricers. Goldprice bull/bear-rallies, due to whatever event, will be smoothened immediately and not disturb the general "revaluation" trend.

Watch how disciplined the oilprice (revaluation) is behaving, regardless of the global events.

GoldiloxThe Melt Down Ahead#1404781/15/06; 08:47:58


To see what's coming, you only need to read a few stories, in the right order, and think through the picture being painted. Because it's a weekend, bear with me for a few minutes, and let me walk you through the highlights, ok?
More than a few of us who have been buying gold since the Manufacturers Resource War broke out (with 9/11/2001) have been expecting gold to begin making its "big move". With prices surging past 24-year highs on Friday, this very well could be it. If it is, our inclination is to wait until the Dow and the Price of Gold (POG) are even, then we'll figure out where to deploy both of our dollars next.

I have to agree with one poster over at LeMetropole Cafe who noted that the surge in prices was not directly attributable to Iran tensions. He noted if that was the case, we would have seen oil spike up in a similar meaningful way. It hasn't, so he figures, something else is at work.

What's really going on, as best I can judge, is that the Fed has partially lost control of the money supply (which is why they will stop their weekly confessionals of M-3 in March of this year - it will be too scary for "regular people" to stomach by then. This week's report shows that M-3 has increased by 7.84% compared with year ago levels. It's really worse: The November to December change in M-3 pencils out to an 11.5% annual rate. In simplest terms, the money supply is going nonlinear now. That's why gold is up.

You might be asking what is so frightening about that - we've had bouts of inflation before, so no big deal. Well, not quite. You see in the same period, the amount of M-1 (basically cash in the system) has actually decreased by about 2-10th's of one percent in the same period!.

In other words we have deflation and inflation simultaneously in the money figures. The divergences are staggering. You've got less paper money in hand, yet easy credit - so the purchasing power of cash goes up and the consumers are forced more and more into debt to make ends meet.

It doesn't take a rocket surgeon to figure out that this condition in the economy can't go on forever. Thus, later this weekend, when the new web bot run (future forecasting techniques of based on linguistic shifts on the internet which seem to precede major social/psychological turnings points, such as 9/11, the anthrax attack, and others) we expect that a very large unexpected event will seen happening between now and April 1st.

Why? Because it's clear to the international banksters that their game is falling apart and they need an "event" of some kind in order to maintain their cover and remain in functional control of the country through their shadow government proxies. Care to take a guess what that will be?

Let me help you...


In his inimitable style, George reminds us that "day-to-day" events are no more than mere entertainment to divert us from "the man behind the curtain."

Also read his missive on how poor a public school education has become, because it really sets the stage for getting John Q. Jr. to "go anywhere and do anything" at the drop of an "ideological" hat.

There hasn't been a war yet that hasn't included "culling the herd" as a major component. When unemployment is just too high (not the BLS "official release" figure, but the real one, includng the "under-utilized"), the solution was best described by Tom Paxton in his 1966 ditty "Letter from LBJ":

"I got a letter from LBJ
It said this is your lucky day
It's time to put your khaki trousers on
Though it may seem very queer
We've got no jobs to give you here
So we are sending you to Viet Nam"

The strains on $-IMS hegemony are appearing on mulitple fronts - political, economic, and resources, not to mention personal.

GoldiloxGold sales up in UAE#1404791/15/06; 09:09:33


Despite sharp increase in gold prices, customers in the UAE are buying gold as it is still seen as a safe haven from an investment perspective.

"Last year, gold had appreciated by 25 per cent and I believe that we will see another double digit growth this year. This is not just idle speculation. From what we have seen in the market, even with the rise in diamond sales, gold sales have not dropped,'' said Karim Merchant, managing director of Pure Gold, one of the major players in jewellery market.

At present, the price of 10 tola gold in UAE is Dh 7,490, while 24 carat pure gold costs Dh65 per gram and 22 carat gold Dh61 per gram.

According to Dubai Gold and Jewellery Group, this has not discouraged people from investing in gold jewellery in Dubai.

When asked about the buyers of gold in the present scenario, he said: "In terms of market, there is no doubt that customers from the subcontinent have a spiritual connection to gold. They are the biggest buyers when it comes to gold. However, we also see heavy investment in gold by Arabs and buyers from the Middle East. In terms of the market, tourists comprise around 60 to 65 per cent of the buyers."


Who was that suggested we keep a close eye on Dubai?

Belgian$-IMS versus euro-EMU#1404801/15/06; 10:38:27

Two monetary systems. Two currencies. Two different managements. Two different continents...having an affair with <GOLD>.

Why is it that all goldobservers watch at gold through only one of the monetary systems ? There are more dollar-digits outside the US... WITH NO LEGAL TENDER STATUS...than inside the US borders. Why should the dollars inside the US rule gold for the dollars outside the US ? It is this question that the architects of the other monetary system (EMU) asked themselves and came up with an alternative function for gold ! This escapes ALL gold watchers and commentators. They can only see dollar-gold and not the gold in the other monetary system.

All the (non US) holders of non legal dollar-digits outside US borders have been accumulating goldmetal next to their increasing stash of dollars. This gives us the highest probability as to which kind of gold will surface in the nearby future : Semi fixed, price regulated dollar-gold...or...goldwealth that can be freely marked to the market !

The same evolution happened with the oilpricing. The old dollar-oil-standard versus the new oil valution. The oilprice broke out of a 30 yrs controlled price and set a new ATH. Simply because non US oil is paid with non legal tender dollars.

First, the dollars outside the US borders, were not redeemable in US gold (1971). Now, 35 years later, the amount of dollars outside the US have dramatically increased and no serious fraction of these dollars can flow back within US borders as to have legal tender status. So all these dollars need a good safety belt. They are finding this in gold that will not be controlled by the $-currency for which the holders are protecting themselves.

The same reasoning goes for the owners of all vital energy reserves : They don't want the US-$ to tell them what their energy is worth. And they see the alternative EMU monetary system having gold-reserves that are free to be marked to the market. The only step to be taken is simply change the existing dollar gold market into a free gold market, where the whole planet can value gold and not one single ($)faction...the one single $-goldsize that must fit all.

The gold-revaluation can evolve for quite some time without disturbing global trade and dollar use. The transition, diversification, redistribution, pricing changes (oil/gold) can orderly evolve without having devastating crashes that are in nobody's interest.

Watch the 35 yrs goldprice chart in 2005 dollars and conclude that gold-perceptions will strongly change within the $600-$800 price zone ! Once through this historical barrier, you will see the notion gold-wealth more often in the media.

Liberty HeadEuro and Gold#1404811/15/06; 12:07:16

Would someone please post a link to historical charts for POG in Euros? Euro/ounce
Thank You

Best Wishes

FlatlinerGold in Euros#1404821/15/06; 12:10:28

Here is three years. I hope this helps.
Liberty HeadThank You Flatliner#1404831/15/06; 12:28:11

Best Wishes
David Linkley@Belgian #1404841/15/06; 12:42:53

Bravo Belgian,
IMO a great post and on the money. I wonder what will happen to the global economy as the US $$ purchasing power declines another 25 - 30%, interest rates rise significantly and the US consumer can no longer support the world economy. With a looming energy crisis ahead the US is heading into an economic period that will challenge the 30's in size and scope.

FlatlinerIs it March yet?#1404851/15/06; 14:41:17

Its interesting reading different achieves on the net. The link provided appears to have been published on June 24th, 2000. From that article, Jason Hommel stated:

"Since the Washington Agreement of September 1999, other gold analysts have shown that U.S. gold export figures have averaged 100 tons a month. With this much gold leaving the U.S. on an average month, the allegations are that our government is secretly dumping our nation's gold reserves to prevent the dollar from devaluing... This condition cannot last very long, and the price to be paid will be horrible when we realize we have sold our gold for less than 1% of its true worth, and for what? At the most, 8,139 tons of gold being dumped on the world market at a rate of 100 tons a month will last a maximum total of 81 months, or 6.7 years, starting in September, 1999."

Seems to me that, if this has any truth in it, the US really got a lot for its gold stash! 100 tons of gold a month bought the US stable oil and a stable dollar (all relatively speaking).

It also seems odd that 6.7 year (81 months) seems to line up very well with March of this year. … It seemed to slip my mind, but isn't the Fed changing some type of polity in March? Hum… isn't oil looking for a different currency come March?

I'm sure my memory will come back to me. But, for now, I think I'll go back to shaping my golden burial mask.

SmeagolWhich Gold?#1404861/15/06; 15:16:08

Ssir Flatliner, did they ssay It was from the Treasury, or exported from the miners/refiners? That might make a LITTLE difference in the tone of the message, precious?

Unless they exported the "deep storage" gold (gold marked for the Treasury that is sstill in the ground (?)).

"It's all fun and games until someone loses a city."

Flatliner@which gold?#1404871/15/06; 15:19:12

The context is Treasury gold, implying 'deep storage' gold.
Flatliner@which Gold?#1404881/15/06; 15:22:54

Sorry, I guess I misunderstood your question. The context comes from 8000 tons that the US labeled ‘deep storage’ that GATA states the US claims to own. That any clearer?
SmeagolDiscernment...#1404891/15/06; 15:37:38

"Since the Washington Agreement of September 1999, other gold analysts have shown that U.S. gold export figures have averaged 100 tons a month. With this much gold leaving the U.S. on an average month,"-

Ssss...we does not SEE the word "Treasury" in thiss line, precious...

-"the allegations are that our government is secretly dumping our nation's gold reserves to prevent the dollar from devaluing..."

...and attaching the government's Gold in the mind of the reader to the previous sstatement via use of a comma, produces an ASSUMPTION in the mind of (ssome) readers... which is misleading.

We has problems too... with the way ssome of the other pointss in the article are presented:

"What kind of growth rate takes $850 in 1980 to $25,000 by 2000? An 18.5% annual rate. Thinking in these terms then, a rise in price to $25,000/oz. does not seem so unrealistic. Those 20 years of gains seem typical of a wise investment. Even Warren Buffet has done better than 18% for his investors for over 20 years. Who says gold does not pay interest?"

Sssssigh... people SSTILL do not get it, concerning It. There is no "growth rate" with It. The purchasing power is the ssame... then, and now. How do you twisst an 18.5% dollar-devaluation into "growth"? Ach! There is no gold-gain here, but there IS a dollar-LOSS.


CaradocMissed this one last November#1404901/15/06; 15:48:45

Worth going back to, I think. -Caradoc

Snip follows:

A move away from the dollar and a strengthening of the euro would further benefit Iran as according to a member of Iran's Parliament Development Commission, Mohammad Abasspour, more than half of the country's assets in the Forex Reserve Fund are now euros.

It is primarily the US which stands to lose out from any move away from the petrodollar status quo, it is the world's largest importer of oil and a move away from invoicing oil in dollars to euros will undoubtedly have a negative effect on its economy.
Fewer nations would be willing to hold the dollar in reserve which would cause a significant devaluation and result in the loss seigniorage revenues. In addition, US energy-related companies stand to lose out as they will be unable to participate in the bourse due to the longstanding American trade embargo on Iran.

Liberty HeadWho's Fault Is It Anyway#1404911/15/06; 16:14:06

Selling oil for Euros isn't the cause of the dollars decline. One must go to the heart of the issue to find the truth. Uncontrolled spending by the US Gov't is the source of the dollars decline. That's what has oil exporters searching for another currency in the first place.
It is also important to understand the US Gov't is out of control, by the popular will of the US citizens.

Lie to me once, shame, shame on, shame on you. Lie to me 10,000,000 times, won't get fooled again.

Justice does not bypass the ignorant.
Get wise, get gold.

Best Wishes

Smeagolah, the Irany of it all...#1404921/15/06; 16:17:28

"In addition, US energy-related companies stand to lose out as they will be unable to participate in the bourse due to the longstanding American trade embargo on Iran."

Ssss... is that a trap we hear ssnapping shut ssomewhere?


YGMThai Gold Rush After the Flood#1404931/15/06; 17:50:17

Small reward from disaster.
White HillsLiberty Head#1404941/15/06; 18:16:55

Who's fault is it anyway, you ask. Your answer is uncontrolled Government spending as the main source of the dollars decline. Your answer is a little simplistic and is only part of the problem. Everything else in your post is political opinion and not relevant to the discussion. White Hills
CamelDebt#1404951/15/06; 18:31:56

Don't forget the 2 trillion (?) consumer debt , and the 9 trillion(?) corporate debt, and all the municipal debt. All these dollars must come from somewhere, out of thin air I guess.
Smeagol...and all those derivatives#1404961/15/06; 18:39:24

contrarianUpdate on a past posting--a roadmap#1404971/15/06; 18:52:45

This posting goes back a few years, and lays out a roadmap that so far seems pretty accurate, although the end point is off, having been forestalled. I would only update it by saying perhaps we're now, with what will happen in March with Iran oil bourse, about to enter into step 2, but perhaps others might have some input.

specie-man (9/23/05; 00:23:12MT - msg#: 136333)
A report on my predictions...
Greetings All,

I have occasionally lurked here over the last year or so, but I've not posted, obviously. I've been passing the time buying and selling coins (some bullion, but mostly the "collector" type coins).

Well, here it is Autumn, 2005.
I thought it would be interesting to dredge up my old predictions from almost two years ago, as posted here in November, 2003 under the title "The Fall of 2005".

I got a number of things only part-way right, and some things wrong. But some things I got really right - especially #2 in the "countdown". Here is the original post:

Gold Price Countdown - the Fall of 2005 A Speculation By "specie-man" - 10 November, 2003

In 1997, a mysterious individual began a series of anonymous postings on gold-related internet bulletin boards. This person, and their associate, seemed to have inside knowledge of world gold dealings. The information they relayed indicated, in a somewhat cryptic way, that there were two completely different gold markets in existence.

One of those markets is the paper gold market that we all see (COMEX) - a market who's hidden purpose is to suppress the price of gold and to generally manipulate the market in favor of commercial (short) entities, at the expense of speculative (long) entities.

The other hidden market was larger, and traded in physical gold only - at prices far higher than the paper gold market. As the theory goes, this market was the vehicle for transferring large quantities of gold to rich oil-producing countries. This arrangement was secretly agreed upon by banks and governments, so that in return, the price of oil (as measured in US dollars) would remain stable even during the economic boom years of the late 1990s. This was at the core of the so-called "strong dollar policy", which the US Government frequently mentions but never seems to be able to explain.

The two markets worked together such that the paper gold market would effectively siphon off world gold supply and production at reduced prices, and deliver it to the secondary "hidden" market at a profit. Why would the large buyers acquire gold on this hidden market, rather than buying contracts for future delivery for lower prices in the paper market ? Because it would have been impossible to purchase the desired quantities of physical metal on the limited paper market, and any attempt to do so would send the price of gold much higher on both markets, possibly destroying the paper market and ending the price suppression of gold. This would cut off their supply of relatively cheap gold. Perhaps the intentions of these major buyers are to first obtain large quantities of gold, and then go to the paper market to drive up the price.

The individuals responsible for bringing this information to light predicted that at some point, the world price of gold would be revised sharply higher (by orders of magnitude) in conjunction with a move by oil-producing nations to officially reduce their intake of US dollars and increase their intake of other currencies and gold. This monstrous gold price increase would signal the beginning of a new world order. That prediction was made around 1998, possibly to occur in the 1998-1999 time frame.

These individuals correctly predicted a badly-faltering stock market and economic malaise. But now, four years later, their predictions about a rapid gold re-pricing event have not taken place. Gold has increased in price significantly in the last four years, but the rise has been relatively gradual. Gold bugs are still waiting for that big event. Will it come and, if so, when ?

Before any major gold price upheaval (increase) can occur, certain conditions must first exist. Some have already occurred, and others are developing. Watching the progress of these conditions will be like watching a rocket launch count-down ! Those who are watching will know when their last chance will be to jump on board before lift off. Here is the count-down as towards an explosion in the price of gold (as a result of a crashing US Dollar):

12. Rapid expansion of world-wide credit (debt).

11. Stock market declines.

10. US government, state/local governments, corporations, and households go much deeper in debt.

9. US trade deficit expands relentlessly.

8. The US dollar starts declining in value relative to other world currencies.

7. Long-term interest rates increase relative to short-term interest rates, bond market declines.

6. Housing prices level-off and start declining in some areas.

5. Other (Asian) countries counter the falling US dollar by working to devalue their own currencies.

4. Gold starts rising in price relative to all major world currencies, including the Swiss Franc.

<===== WE ARE HERE !

Inflation/stagflation starts taking hold in Japan, China, and other countries that have a large trade surplus with the US. Bad debts are monetized en-masse (paid off by "printing" large quantities of the local currencies). This is highly inflationary. To forestall hyper-inflation, Asian central banks will be forced to cash in some of their dollar reserves to bail out large debtors (commercial banks, etc.). This will bring an end to the "strong dollar" policies of those governments. Japan, for example, will no longer print and dump as much Yen on the market and buy dollars to weaken the Yen relative to the Dollar.

Consumption in foreign (especially Asian) economies starts growing more rapidly and oil-producing nations realize that they will no longer have to rely as much on the US market to sell their oil. At that point they won't have to worry about how much oil the US consumes (or how much a barrel of oil costs in US dollars). Due to the world-wide glut of declining-value US dollars, and a revulsion for US foreign policies, some oil-producing nations begin switching their official oil pricing currency from US dollars to another currency and/or gold.

The paper gold market (COMEX) shows a large increase in speculative long positions. The long speculators have been trounced many times over the years by the commercial (short) traders. This time, however, the ranks of the long speculators will grow and grow. They will hold firm in the face of the commercial shorting onslaught, as if being commanded by General Stonewall Jackson himself. The commercial shorts will break and run as people world-wide attempt to take delivery of gold. Some major financial institutions will fail as a result.

0. Blast-Off !
Foreign countries no longer have a need for the excessive amounts of US dollar assets (US Treasury bonds) that they hold because it becomes increasingly difficult to purchase oil (and/or gold) with them. Foreign governments do not buy and hold US Treasury bonds out of the goodness of their hearts. The second that they no longer have the need or ability to hold and acquire those assets, or the instant they perceive that their ability to exchange them for something useful is diminishing, they will dump them for something else. A world-wide "crash" in the US dollar will result, leading to a world-wide revulsion of anything and everything US dollar, much higher US interest rates, a severe case of hyper-"stagflation", and higher prices for all tangible assets. The derivative pyramid will crumble. The US dollar will become the "laughing stock" of world currencies - akin to some of the weak currencies of the Central American and South American regions. All this occurs just as the first wave of American "baby doomers" are scheduled to retire. Life will go on in the US and it won't be all bad, but it will be very different and difficult.

Right now, the countdown is at 3 and counting. Many of these events have been (and will be) occurring concurrently. What is still lacking is significant world-wide wage inflation (but world-wide commodity prices are now escalating). When you hear the phrase "wages are increasing to keep up with inflation", you will know that the time is very close. Current indications are that the final prerequisites for a blast-off in the gold price are forming. Hints of inflation in Japan, commodities, and elsewhere are starting to appear, as is talk about doing something about the bad debts in Japan, and bad debts rapidly increasing in China. The US Federal Reserve will aggressively fight any significant downturns in real estate prices. They will do anything, even drop cash from helicopters, to prevent consumers from defaulting on their mortgages en masse. The alternative is just to catastrophic.

The COMEX open interest in gold is now increasing. Battles between the commercials (short) and the speculators (long) have usually ended in favor of the commercial traders. This time, it will end in a stalemate - a moral victory for the longs. The day when the longs totally rout the commercial shorts is coming fairly soon.

History is riddled with unfulfilled predictions of gold's price soaring (and collapsing). Gold is heating up now. But realistically, how long might it be before the price explodes rapidly upwards in an economic upheaval of epic proportions ? That is hard to say. The old saying definitely applies here: "markets always do WHAT they are supposed to, but never WHEN they are supposed to". Such drastic economic realignments are always fought against by governments, and they always take longer than expected.

Should all the current COMEX longs hold firm and a quantity of them demand physical delivery, then the countdown could go to blast-off immediately. Other "wild-card" events (war, terrorist attack, major California earthquake, etc.) could ignite the rocket as well. The countdown process started in the mid 1990s and it should last about ten years. The closer the countdown gets to zero, the faster it will tick. Gold will continue to increase in price during the remainder of the countdown. ! Lacking any unexpected triggers, the countdown will finish during the Fall of 2005.

SmeagolOpen eyes are as rare as It...#1404981/15/06; 18:55:09

ssss...we have been reading... and ssneaking into forums at other casstles and lisstening... watching the chart-makers draw... and the analysts figuring...and looking for more in regards to the revaluation of It... for quite ssome time, O yess, precious.

We are quite amazed, at how little is ssaid outside these walls about It in this regard, and it appears that very few sseem to know about it. And if that is any indication... out of the very tiny fraction of people online that are even interested in It, only a very tiny fracton of those know about the MTM plan? After all these years?

As a well-resspected Wizard around here might ssay... Wowsers!


YGMSmeagol...other halls#1405001/15/06; 19:58:27

are full of instant gratification seekers. It seems to be the focus of most of our humans. Not so with Smeagol, Hobbits, Giants, Wizards & the odd old bush man miner. The winning of the Gold Ring is patience and vision, coupled with a talent for finding a trail thru the wilderness. The speakers we have and have had in this great hall have been excellent trail blazers.
OvSBelgian#1405011/15/06; 20:26:24

Why is the Oppenheimer family
eager to sell Anglo Gold? OvS

overtonjim grant on bernake#1405021/15/06; 20:39:26

1/13/06: "Market Monitor"- James Grant, editor of "Grant`s Interest Rate Observer"

PAUL KANGAS: My guest "market monitor" this week is James Grant, editor of the widely followed publication, "Grant`s Interest Rate Observer" and welcome back to NIGHTLY BUSINESS REPORT, Jim.

JAMES GRANT, EDITOR, "GRANT`S INTEREST RATE OBSERVER": Thank you, Paul, nice to be here.

KANGAS: Are you one of the ever growing crowd of analysts who believe the Federal Reserve is nearing the end of its measured interest rate increases?

GRANT: Gosh, I guess I am. I didn`t realize it was that big a crowd but, yes, I am of that multitude. I think that the next increase could well be the last.

KANGAS: That would put us under 5 percent then for the Fed funds rate.

GRANT: It would indeed; it would take us to 4.5 percent.

KANGAS: Are you saying that the Fed sees enough figures on the economy that it`s slowing enough to they don`t want to raise rates anymore. Is that the reason?

GRANT: Well, hear I borrow from the excellent Paul Casrio (ph) of Northern Trust Company. The Fed set out to raise the funds rate to a more normal level, more normal than, say, 1 percent. It has done that. It set out to forestall inflation and to dampen inflationary expectations and by some measures it has done that. It set out to dampen the speculation in the housing market and it has done that as well. It doesn`t want to precipitate a recession and so much of this economy is so dependent upon housing that if it were to tighten further it just might do that. So it seems to me that the Fed is very close to being finished.

KANGAS: Fair enough. Now, Jim, give us your assessment of incoming Fed chief Ben Bernanke and how he might compare with Alan Greenspan.

GRANT: He is a very smart fellow, Mr. Bernanke. He is however -- he is beset by the characteristic lack of imagination of the true intellectual which is that he believes that he can control events rather than being controlled by them. He is really in the price-fixing business. The Fed itself is a price-fixing agency. It set this rate called the Fed funds rate. Now, we have markets the world over that discover prices and interest rates in the case of central banks. Central banks set the rates. Mr. Bernanke is very smart, but he`s not smart enough to be a successful long-term price controller. Nobody is.

KANGAS: OK. You think the market should set the rates, as simple as that?

GRANT: I do.

KANGAS: OK. Now recently we experienced a few brief cases of an inverted yield curve. That`s when short term rates are a bit higher than long term and a lot of economists believe such an inversion is a signal of oncoming recession. Do you subscribe to that theory?

GRANT: Sometimes such an alignment of interest rates does presage a recession. However, in this case, the alignment was not really inverted, that is to say short rates were about even with long rates and it was torturing this model to say that there was a so-called inversion. So, no, I don`t think that the yield curve is saying that.

KANGAS: It`s not a signal of an oncoming recession as far as you`re concerned?

GRANT: No, it is not.

KANGAS: OK. On your list visit with us in early March of last year, you recommended two securities and Korea fund up 36.8 percent and Korea electric power up 43.3 percent, two great calls, Jim, and I compliment you. Are you still with them?

GRANT: God, did I say that?

KANGAS: Yes, you did.


KANGAS: OK, stay with it. You also said stay with golds from your previous visit with us like Toqueville and First Eagle and Newmont Mining and they`re way much, much much higher than they were last March so you`ve done very well. How about some new suggestions?

GRANT: Well, my first idea, Paul is a mutual fund called Third Avenue Value Fund. It`s run by the eminent Martin Whitman, a great value investor of long standing. And this fund specializes in buying cheap and safe securities. Marty wants to buy equities at a price below what he calls readily ascertainable net asset values.

KANGAS: All right, we weren`t able to get a chart on it, but it trades in the high 50s. I can tell you that much and we`ll get a correct figure on that early next week. We have time for one more. We just have a few second left.

GRANT: Japan, which I have a personal interest, as indeed I do with Marty`s fund. Japan, I think, is in the beginnings of a terrific bull market. Things are going right where they have been going very wrong.

KANGAS: And do you own these securities?

GRANT: I do.

KANGAS: OK. Great. Jim, I want to thank you very much for sharing your insights with us.

GRANT: Thank you, Paul.

KANGAS: My guest, Jim Grant of "Grant`s Interest Rate Observer."

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2005 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

1/13/06: "Commentary"-Fame Vs. Brain

JEFF YASTINE: Finally tonight, a new poll shows kids in Britain would rather be famous than brainy. The survey by Britain`s learning and skills council shows one in 10 young Britons would quit school to become the next tabloid star. The Brits have long been obsessed with celebrities -- so have Americans -- and the data shows a growing number of children are more interested in becoming rich and famous than getting a good education and Paul, 9 percent of those surveyed thought fame was a great way to earn money without skills and without qualifications.

KANGAS: The same skills and qualifications would probably keep them from losing all that money.

Nightly Business Report transcripts are available on-line post broadcast. The program is transcribed by eMediaMillWorks. Updates may be posted at a later date. The views of our guests and commentators are their own and do not necessarily represent the views of Community Television Foundation of South Florida, Inc. Nightly Business Report, or WPBT. Information presented on Nightly Business Report is not and should not be considered as investment advice. Copyright (c) 2005 Community Television Foundation of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.

GoldiloxLiberty Head's post#1405031/15/06; 20:59:10

@ White Hills,

On the very surface, I would tend to agree with your analysis of LH's post, but your response is just as simplistic.

LH's analysis of the government spending, although still tangential to most Boob-tube addicted John Q's, is a very "critical part" of the problem. One numerical analysis posted last week demonstrated that monetary inflation has logged 28% increase in the last six months alone, suggesting that the BLS BS and FED obfuscation are much more ignominious than the silly political "whodunnits" clogging the airwaves.

Why so important, you ask? Because the only thing backing the US dollar is "full faith and credit" in the US gubmint, whose broad stroke actions are igniting further worldwide distrust on a daily basis.

Without venturing into the politics of this, when dollar "investors" lose faith and look elsewhere to bolster their wealth, the dollar loses it "hypothetical value," and this paradigm shift will possibly turn Gandalf's waterfall in to a full-on avalanche.

GoldiloxTimeline#1405041/15/06; 21:04:20

@ Contarian,

I love your timeline as much now as when you first posted it, but I think numbers 3 & 2 are quite further along than you suggest. Granted they are not overnight changes, but we're seeing eveidence of them all the same.

I.e., Japan has been printing Yen like newsprint for a while now.

Just MHO!

GoldiloxMixed metaphor#1405051/15/06; 21:07:11

OK, how about "turn Gandalf's waterfall into a full on bursting dam!"

There. That's better!

SmeagolTimelines and price-lines#1405061/15/06; 21:44:13

We agrees with Ssir Goldilox... it almosst seems as if 1,2, and 3 are bunching up and will ssoon be jockeying for position.

We are curious to ssee whether there will be another "six-dollar notch" Monday, hmmm? We have noticed that Dollar-treats are liked less and less effect by the Houndses lately! (cackle)


GoldiloxMonday market#1405071/15/06; 22:59:57

Is the Comix operating over the MLK holiday, or just non-US markets?
GoldiloxAnglo American begins huge demerger#1405081/15/06; 23:03:11,5744,17832216%255E643,00.html

With other mega-hedgers consolidating, does anyone have any relevant thoughts on this apparent disassembling of AA?
MarkeTalkGoldilox--Monday Market#1405091/15/06; 23:53:32

Monday is Martin Luther King Day, a legal holiday here in the United States, which means that all government functions, banks, and markets are closed. Non-US markets will be operating as usual unless there is a legal holiday which just happens to coincide with our MLK Day.
White HillsSimplistic Answer#1405101/16/06; 00:05:57

Sir Goldilox, My intention was to point out to Liberty Head that his statement that uncontrolled Government spending was the source of the dollar decline, was and is simplistic. That doesn't mean that Government spending is not part of the problem, just not the only problem. I agree with your economic outlook to a large degree and have no argument with you. The truth is that the political part of his post just vexed me. However, a question for you, is Government spending a cause or effect? Has uncontrolled Government spending brought us to this point where the dollar is declining or in the last 60 years have other forces of politics and economics led us down this path to what seems to be eventual bankruptcy. My belief is that it is an effect and not the cause of our present economic dilemma. What say you? White Hills
Belgian@OvS#1405111/16/06; 00:45:57

AA always wants to optimalize (leverage) the values (shareprices) that it is holding. The very essence of the financial industry. Merging and demerging.

Have no idea what the "specific" reasons now are. Let's wait and see who's taking the Anglogold A. shares.

Note how the financial media profit from the announcement to suggest that we are in a goldprice "bubble" !?

GeneWho's Buying-Who's Selling#1405121/16/06; 01:24:54

Okay, so I'm not the sharpest knife in the drawer. So answer me this: Somebody wants gold and they pay for it with dollars. Somebody sells the gold because they want dollars. What are they going to do with those dollars? Those dollars are losing value. Who wants them in place of gold? Are the gold buyers getting in while the getting's good? Well, I guess I would.
Buying gold now at $550,knowing that it's going much higher
is a given. So who is selling & why? Is our Treasury that stupid? Well, the UK was.
Maybe someone has an answer. Why buy dollars with your gold?

Rook.,.#1405131/16/06; 01:33:52

I guess it is a safe bet that in 2006 iranian nuke efforts will be attacked with general approval. chavez will cut his oil I bet in protest, and that may result in takeover of that countries oil fields. Or the demise of chavez.
The iran president will scream for revenge, and wont that be a nice sunny day. God gets the blame for this, as is his lot, so we may see some, well, I will bet we definately will see some terrorist style reaction in the so called west. How this affects the price of gold...........If Gandolf runs a contest asking how high gold will go this year, I pick 650.

Topazalt-Gold.#1405141/16/06; 02:03:16

Dec and Jan have, it seems, got back on song with the Currencies which, I might add augurs well for a swooning Buck and firmer Bonds going (inching) forward.

Let's see how today goes without a live-action Comex!

Goldilox"Part" of the problem#1405151/16/06; 02:49:59

@ WH,

"Has uncontrolled Government spending brought us to this point where the dollar is declining or in the last 60 years have other forces of politics and economics led us down this path to what seems to be eventual bankruptcy. My belief is that it is an effect and not the cause of our present economic dilemma."

I would agree that other political forces are involved, but I'm not so sure they are really that independent of profligate government spending. Maybe they are just "horses of a different color."

When a dog bites, it's only the teeth part that hurts, but the whole dog is involved in the biting.

Democans and Replublicrats alike have fully subscribed to the hyperbolic decline of the dollar for generations - one could say, even as far back as Lincoln, who chose bankruptcy over Federal dissolution. Unlike our ignorant history "textbooks" would have us believe, this was a greater manifestation of "Federalism" than any of Hamilton's policies. WWI was an extension of that policy, as JP Morgan was allowed to pass his bad UK war loans along to the US Treasury through the misdirection of the Lusitania. Hearst and the other Yellow Press proponents honed their war-fervor whipping skills in TR's war of Spanish colonial conquest, and fully conspired in bring the US into WWI to "rescue" Great British empire from complete bankruptcy.

The actions of creating the FED, debasing money, stripping the west of manufacturing capability in favor of cheap foreign labor - coupled with expensive marketing and transport, and controlling subservient markets through abusive banking are all inter-related, but they all absolutely rely on debasing currencies to work effectively.

I can't say definitively whether the goal is truly "one world government", but the driving force is certainly "one world banking," with absolute power over the currencies. The enemies of that movement are any one who suggests an alt currency outside their absolute control, i.e. Islamic gold Dinar, or it seems, any real gold backing.

The Euro proponents may argue this point, but the fact that the ECB has some gold in its vaults does not guarantee "backing" unless they are willing and able to trade their gold to Euro holders on demand.

I'm going to go out on a limb here, but I firmly believe that wars are part of the "entertainment" designed to mask the "man behind the curtain", and find it sad that the PTB always find it preferable to waste such an unGodly proportion of their productive resources protecting fiefdoms.

Many people smarter than me have said it, but the greatest challenge to a technolgical society is to overcome its ability to destroy itself, and Nukes and WMDs are only "some" of the many ways that can come about. Market destruction can be just as deadly, but we've never witnessed anything greater than 1930, as TPTB always lead us into war to mask its effects and protect their historical positions of privilege.

GoldiloxWho's to blame?#1405161/16/06; 03:05:08

@ Rook,

"God gets the blame for this, as is his lot,"

Yes, it's always easier to blame "forces unseen", be they "God" or the boogeyman, rather than endure the pain of serious self-examination.

A lot of energy is expended keeping the wizards' curtains tightly drawn, but there is also a lot of effort being focused on removing the veil, as evidenced in this forum.

"By their works ye shall know them!"

GoldiloxUp, up, and away-ay #1405171/16/06; 03:14:30

in my beautiful balloon!
GoldiloxRE story#1405181/16/06; 03:19:24

I heard a really trippy RE story today. A friend told me (its already 'hearsay') that her parents tried to sell some RE and the buyer offered them bullion for a down payment. They were so concerned that it might be "dirty money", that they turned the offer down and requested cash instead - as if that "laundered" the proceeds sufficiently - LOL

I only bring this up to demonstate that John Q still distrusts gold and gold proponents.

OK, the gold bull market is alive and well.

BelgianSimple...#1405191/16/06; 03:50:53

Time out for *-easy oil-*...and soon (maybe very soon) we will realize that EASY GOLD also finished, so suddenly !?
Ned@ Belgian#1405201/16/06; 04:24:46

We watch together how "nervous" and how "disciplined" the gold and oil markets REALLY are in the coming months.

As Sinclair said "one drop" of Saudi blood, well add this to the mix, one bomb in Iran and we watch the oil market in particular.

.....replacing the black w/ yellow amigo. Your best line ever!

Take care & have a golden day.

Buongiorno!Anglo Break-up @Goldilox 508#1405211/16/06; 06:01:09

Thanks for the link and heads-up. My thoughts, FWIT, are twofold. One, The Ashanti thing may have to do with their hedge book worries (where ARE they now?)and thus bullish for gold--if we truly believe those guys know (or control) what is going on.

The other transactions are less than clear. Perhaps, it is a part of the cyclical nature of markets where one phase is to put-em-together and another is take-em-apart. Remember back when Gulf and Western bought everything it could, then started selling later when things changed, interest rates rose, and carrying costs were higher? Lots of others did the same thing.

Perhaps overall, there is just not enough detail yet to figure this out. Others? Many thinks for your efforts to keep us all aware.

Cavan ManDriving AU this AM??#1405221/16/06; 06:55:12

Iran issues stark warning on oil price

War of words over trade sanctions

Robert Tait in Tehran
Monday January 16, 2006
The Guardian

Iran stepped up its defiance of international pressure over its nuclear programme yesterday by warning of soaring oil prices if it is subjected to economic sanctions. As diplomats from the US, Europe, Russia, and China prepared to meet today in London to discuss referring Tehran to the UN security council, Iran's economy minister, Davoud Danesh-Jafari, said the country's position as the world's fourth-largest oil producer meant such action would have grave consequences.

BelgianMoving the goldprice !?#1405231/16/06; 07:30:58

The Iran matters have nothing to do with the pricing/valuation of gold !!! We had already TWO Gulf wars and an oilstate in flames (Kuweit). We had oil nationalised (Russia) and a stop in gas deliveries (Ukraine). There was a Tsunami and Katrina.
Nothing of all this is having a direct impact on gold's price ! These are all temporary explanations for public consumption as to avoid telling the "real" reason for the changing gold.
They wanted to stick peak oil to the public but can't do this with gold for obvious reasons.

GoldiloxMoving the Gold Price?#1405241/16/06; 09:12:28

@ Belgian,

While I agree in principle that "events", themselves, are not the prime movers of PoG, the "event trend" likely has some effect on the "slope" of the curve, as it makes it harder for the shorts "to get a word in edgewise" in the transactional conversation.

See today's for an interesting discussion of the "event trend".

Flatliner@Belgian, Moving the goldprice !?#1405251/16/06; 10:01:56

"They wanted to stick peak oil to the public" – Ah, once again, you show a point of view that it outside mainstream that spikes my curiosity. If I understand this correctly, your point of view would be that the rise in oil price has nothing to do with peak oil. I would go a step further and speculate that it's completely immaterial whether we're at peak oil or not. But, those that want change in price need a good story that is ‘outside the curtain’, so to speak. A reason for the increase that is not as open as someone saying – ‘your dollar has no value to us.’ Or, ‘because you are no longer giving us gold, we're going to let the price climb.’ It seems like good politics to come up with peak oil. That way, no one looks at the one in charge of the resource as the ‘one’ to blame for upsetting the system. Sometimes, it seems a simple answer is the most logical.
GoldiloxPeak oil#1405261/16/06; 10:51:48

While I read a number of sources that debate "Peak oil" as a marketing invention, it's rather obvious that part of what we are seeing is "Peak Cheap Oil", at the very least.

Whether this is truly a geological phenomenon or more a geopolitical one is a focus of much debate.

Either way, the price is rising!

David LinkleyEndangered species - Elliott Wave top callers#1405271/16/06; 12:02:40

Tops have been called in oil, gold, copper, or just about any hard asset in the past several months. They have all been dead wrong. A twenty plus year underinvestment in commodity production combined with Asian demand plus the ongoing currency (gold) revaluations have made mincemeat of future predictions. IMO, get gold NOW while you can, the storm is almost here.
USAGOLD / Centennial Precious Metals, Inc.A world of gold at your fingertips...#1405281/16/06; 12:48:54">gold -- a global calling card
BelgianPeak in cheap oil (1999-$10/barril)#1405291/16/06; 13:52:49

Right Flatliner ! It is the ***** PRICING ***** of oil that has drastically changed from the old order !!!!!
Belgian@Goldilox#1405301/16/06; 14:07:53

The "events" are the result of changes in policies !!!!!
Don't put things upside down.

Irak invaded Kuwait as to force higher oilprices (policy)...and then all the events start happening.
EMU policies (+ its growing coalition) want freegold...and then the gold-action-events followed.

It is very important to put things in the right order (sequence).

The financial industry + colluding media, still want us to believe that it are the events that cause the goldprice to move...bull, bear, bubble, etc...

Ad if you really want to "understand" the financial industry's systemic modus operandi >>> Think about the complete story of Enron (and tutti frutti). That is the real world !

USAGOLD Daily Market ReportPage Update!#1405311/16/06; 14:09:43">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

MONDAY Market Exceprt

Gold up overseas while US on holiday

January 16 (from Reuters) -- Gold rose to fresh 25-year peaks in Europe on Monday while U.S. markets were closed for Martin Luther King Day.

By 1533 GMT spot gold was at $561.60/562.40 a troy ounce, just off a fresh high of $562.

Dealers said investors and fund managers had been buying precious metals because of high energy prices, global security worries and the dollar's weak outlook. Concerns about bird flu were also cited.

Gold has added nine percent this year and investment banks and trade houses have sharply raised their price forecasts.

Alan Williamson of HSBC Bank voiced concern at the speed of gold's rally. "We quite like metals, but probably not at these prices. Look at the way gold has gone -- up $100 an ounce in less than two months... It's not inconceivable that you could see $600, $650 or a silly number, but I think gold is getting above its fair value," Williamson said.

Others saw that as bullish as they felt the dynamics in the market had changed.

Traders attributed recent gold strength to talk of buying by a Middle East central bank. That could not be ruled out given current turmoil in the region, analysts said.

"Recent price action again appears to point to a significant buyer at work," RBC Capital Markets said in a daily report.

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

David LinkleyGerman gold sales?#1405321/16/06; 14:46:01

As reported in Lemetropole this afternoon, John Reade gold analyst at UBS is reporting a possible announcement in the next couple of days of Bundesbank gold sales leaked through Reuters Frankfort office. Given the number of upside down gold shorts out there this possibility shouldn't suprise anyone.
TownCrierDavid Linkley#1405331/16/06; 14:55:03

I've typically been of the opinion that all the talk of troubled shorts is way overdone.

But that's neither here nor there, regarding Germany. If indeed there is a materialization of the current sales rumor, here's the MAIN reason why it shouldn't surpise anyone -- see URL.


David Linkley@TownCrier#1405341/16/06; 15:11:13

Why do you think the gold short position is overstated? If the COT are out to maximize profits, why not jump on the long side of a secular bull instead of shorting all the way up from $250. Their trading activities lead me to believe other motives are at play.
MKDavid Linkley -- Some conjecture on the German gold sale rumor#1405351/16/06; 16:49:54

It wouldn't surprise me to learn that some major German bank is in trouble on its gold loans, the result of the rising prices. The strange stories out of Germany over the past few years -- the odd Welteke episode wherein he publicly kited about a dozen different reasons to sell; the constant pressure from certain political quarters to get Bundesbank to unload; the huge derivative position, etc. -- point to something going on over there for which we have not gotten the whole story. It would surprise me however to learn that Axel Weber, the Bundesbank president, had caved-in to the pressure after his widely publicized stance against gold sales late last year.

Reade is right when he says it won't matter in the larger scheme of things since the sales will still fall within the Washington Agreement guidelines.

I would add a second element. If actually sold, the gold will likely be channelled to the bullion banks needing it and from there it will go to the depositors demanding their gold back. -- and it could be to Iranian depositors (you will remember stories about Iranian gold repatriation a couple of years ago). It is unlikely that this gold will even reach the marketplace. In other words, even if true a German sale would most likely turn out to be a non-event, after a possible sell-off (buying opportunity).

There is also the possibility that this is a planted rumor. If so, it wouldn't take a financial genius to figure out why someone might want to start such a rumor at this juncture. Even if the rumor were true however, I do not think it will affect the general market direction. Back in the 1970s the United States sold into the bull market. It was like throwing a quarter into a black hole. It just disappeared.

GoldiloxUpside down#1405361/16/06; 17:35:59

@ Belgian,

Please be so kind as to suggest just what you think I have "out of order". Your response is too cryptic to derive it from that.

I certainly never said that events drive the market, I merely said they are "used" to mess with the dailies to adjust the slope for the traders.

Thanks in advance -


White RoseHey, quit arguing! Gold just hit $564.#14053701/16/06; 17:57:36

Not bad for a barbarous relic.

I bet all those short gold now wish that their contracts were null and void right now. I think going short gold is a good way to become a barbarous relic yourself.

GoldiloxDon't stop arguing!#14053801/16/06; 18:23:30

In all you years here, have you still failed to notice that gold makes it best moves when the castle is quibbbling?
SmeagolIf It keeps going like this for the quarter....#14053901/16/06; 18:26:57

...some hedgebooks are going to get VERY heavy...


Belgian@Goldilox#14054001/16/06; 18:32:06

The two main events-event trends + slopes, of the last decade are : Goldprice down to $253 and xxxx ?
I am of the opinion that the so called traders, parasiting on both trends (down-up), are a neglectible side show.
You certainly remember my opinion on the notion of "market". Market-trends are "made"/fabricated/constructed, by very dominant powers. That's why I mentioned Enron as a perfect example.

All gold commentators/observers invent a wide variety of reasons as to explain each and every move and trend(s) without ever finding the real fundamental reason why a certain trend/direction exists/existed.

So called markets are very often hyper-dominated by invisible molochs (conglomerates). They increasingly can make the impossible happen. Simply because they know where they want gold to be or not to be. That is the ultimate power of those that are privileged by the money (confetti) issuers/managers. Yes, Big powers can and do clash. But these wars are above what we call (free)markets.

Most of the market participants are simply "followers". That makes markets often (now more than ever before) so irrational.

So, I don't care what the eventual slopes for the goldprice are or will be. Because I stick to my conviction that the overwhelming forces want gold's revaluation, their way and not the market's followers way.

The dominant gold-pricers/valuators know very well how the followers react on their strategies. I am not observing exclusively on gold but on other things too. IMO, the evidence is often crystal clear.

Think about "the maestro" Sir Alan. Not a follower but a market leader (very visible hand).

We watch if the gold-revaluation theory is correct or not.

GoldiloxEvent manipulation#14054101/16/06; 18:51:46


Although I have stated more than once that I agree with you, you still persist in professing that I don't. I don't think we're getting through to each other very well.

However, let me recount one major great example of the "event manipulation" I am talking about - contrary to trend.

Prior to the last Iraq invasion, gold was hovering in the $300+ range. As invasion became imminent, it jumped rather quickly to $385, dropping soon after back to $325.

I'm not arguing that this was any kind of trend change, but it was certainly an example of a 20% "wobble" as a response to geopolitical events.

Just the kind of "wobble" that lets market weenies wriggle out of some bad trades and dump some of their losses on those who are gullible enough to get "in the trading game" and follow their "gold advisors".

MKSmeagol#14054301/16/06; 18:53:26

You are so right.. .the hidden, forgotten story here is the one of the hedge books, and bullion bank gold loan gaurantees. Anglo Gold, for example, in my opinion, is playing a pr game with shedding Ashanti. We could have a blow-up anytime, and it could be a household name (at least around the castle household), or could come out of the blue. . . .
SmeagolSssir MK#14054401/16/06; 19:21:02

While we are are not ssavvy on the intricate details of the hedge-massters... but looking at the quarterly hedge-book sseems quite possible (to our always-looking-for-the sinisster-side-of-things mind)...sss... depending on how fasst It rises and how fasst the mines pay It into the hedges, a ssituation could occur that they sstay underwater for a long time, dollar wise... if ssomeone wantss it that way, or has designed it to be sso... maybe it does not matter.

Jusst thinking out loud... (dangerous grin)


GoldiloxAlcoa phasing out traditional pensions#14054501/16/06; 20:54:17


New hires to be offered 401(k)s from March 1

By Jim Jelter, MarketWatch
Last Update: 7:28 PM ET Jan. 16, 2006

SAN FRANCISCO (MarketWatch) - In another sign of how rare defined benefit pensions are becoming among the nation's blue chip employers, Alcoa said Monday most salaried workers joining its ranks after March 1 will be offered a 401(k) retirement plan.

The move aims to limit long-term liabilities faced by Alcoa as pensions costs and the number of retirees swell. At the same time, the company said the changes would have no immediate impact on its profitability.

The giant Pittsburgh-based aluminum producer said defined benefit pension plans, which provide guaranteed income using company-managed funds, will remain intact for current Alcoa employees, retirees, and union workers.

But salaried newcomers will be offered a defined contribution plan based on a combination of pretax paycheck and bonus withholdings and company matching funds.

"We will move to a defined contribution system for new hires -- a contribution to a 401(k) plan of 3% of salary and bonus, in addition to our match programs on the first 6% contributed -- that gives employees significant flexibility and portability of their retirement savings," the company said in a statement.

Alcoa said the move followed a review of the marketplace in which it found nearly 65 percent of employers' pension packages rest primarily on 401(k) plans.

Proponents of defined contribution pensions argue they give workers more control over how their retirement nest egg is invested and that it can more easily follow them from one employer to another.

Critics say 401(k)s transfer more financial risk to employees while allowing companies to shave costs by skirting long-term financial commitments to their workforce, handing employees what amounts to a pay cut not felt until they retire.


Another corporation opts to pass all its retirement risk to its employees, setting them up for another 2001-style 401k implosion. Once the asset deflation is complete, "Hello indentured servitude" to pay pay off all those inflated mortgages they lured folks into with generational low finance rates.

Ain't stagflation grand? Unfortunately, the "stag's head" on the hunter's trophy wall will be that of the consumer who traded his life for the "American Dream", and believed that the pyramid scheme of $ hegemony would last forever.

Goldilox"China's Global Reach: Markets, Multinationals, Globalization"#14054601/16/06; 21:18:04

Great interview - well worth listening.
HektorBarbarous Relic#14054701/16/06; 22:33:18

A correction: Keynes did not say that gold is a barbarous relic; he said the gold standard is a barbarous relic.
Gandalf the WhiteWOWSERS !!!#14054801/16/06; 23:35:25

Volatility !

TownCrierDavid Linkley, on shorts#14054901/17/06; 00:12:16

My apologies, but I don't have the foggiest idea how to go about interpreting your follow-up question. You've made a general statement about commitments of traders (COT) -- focused upon profit maximization, but as you should know, for each contract there's both a long and a short, and only one side can be a "winner" under any given price movement. So how is it that the presence of loss-yielding short commitments, as during the past 5-year secular bull up from 2001's $250 low, leads you to "believe other motives are at play" any more or less so than the presence of loss-generating long commitments during the whole of the previous 20-year secular bear market down from 1980's $850 high?

And maybe an equally valid point to ponder is why you would perceive that the weekly reported "observable" commitments of traders staking their positions through exchange-traded contracts warrant the special mention you've given them as opposed to the less visible positions being staked by players in the OTC arena? Particularly when your original post implied a potential need for a German-led physical-doling bailout, which is certainly not what one would expect as being either a necessary or useful action for the succor of traders on the short side of COMEX contracts.

To be sure, since the $250 low five years ago, dozens of contracts have had their moment in the active spotlight, each in turn passing into expiry and obscurity, none of which have been the instrument of the overhyped "Mother of all Short Squeezes" that seems to be ballyhooed all over the internet wherever goldbugs gather. This even as the price has doubled its way cleanly through many of the so-called "critical" levels that supposedly represented certain and sudden "death" for the shorts.

That's merely one of the reasons why I said I've typically been of the opinion that "all the talk of troubled shorts is way overdone".

If it brings you any comfort, you can certainly seize upon a similar application of the rationale to dismiss the media's standard mantra among analysts when they try to suggest the counterpoint that the market is vulnerable due to such a predonderance of longs that it might lead to the mother of all profit-taking liquidations. That talk, too, is way overdone.

In fact, everything COMEX-related is way overdone.

My contention is that the most significant long positions are the ones that are physically held. And when it comes to shorts, the most significant positions are the ones commited OTC. And since we have no ability to ferret out the whos, whys and wherefors of those agreements and their counterparties, talk of squeezes and bailouts are merely fanciful at best, distracting at worst.

I would submit to you that all idle speculation on the fate of OTC gold derivatives and their conditions of settlement will never tell you anything as useful as simply using this same energy to reach a basic understanding of the political and economic advantages (and hence the implementation motivations) behind having price-liberalized physical-based MTM gold reserves among the various weath-producers as fully endorsed and supported by some significant central banks of the world.

This is probably too much of a rambling presentation to do you much good. I've had the flu for the past week and still find the formulation of my waking thoughts (as often as not) to be scarcely better than a half-baked product of a fevered brain.


TownCrierForeign Currency Piles Up in China#14055001/17/06; 01:03:17

SHANGHAI, Jan. 16 -- China's state media on Monday reported that the country's foreign currency reserves swelled by more than one-third last year to a record $819 billion as its factories churned out goods for markets around the world...

The details disclosed in Monday's state press accounts and reported Sunday on the Central Bank's Web site confirmed that China is on track this year to exceed $1 trillion in foreign exchange reserves. That would probably elevate China to the biggest holder of foreign currency, eclipsing Japan, which has $847 billion.

China and Japan have propped up the value of the dollar and financed U.S. spending by continuing to absorb U.S. debt via the purchase of Treasury bills. Yet these purchases have sown unease, with some in Washington complaining that the United States has relinquished control of its destiny to foreigners.

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

Control your own destiny to the maximum extent possible -- choose gold to ensure that the value of your savings is never confused and lost with the fate of bad debt.


Belgian@Goldilox#14055101/17/06; 02:46:59

You are looking much too close at the ball and forget too often to look at the (great) game.
And on a regulary basis, you (and the absolute majority)deny the existance of the euro-gold concept as the new force in the gold game and determinant for gold's building future.
And I'm (personally) not looking for ideal moments to step into the accumulation of the precious. I'm in it for 100%...and STAY in it. I am NOT speculating/gambling on those minor goldprice up/down slopes (bull/bear/bubble) caused by "events".
What is the big deal of having the ball (goldprice) going temporary out of the big gold playing field (revaluation) and then back in, again ? Am not looking to speculate with leverage on the goldprice over/under reactions and running the risk of excluding myself from the big game, because of an emotional mistake (wrong position-gamble).

I think that you certainly agree with this at the moments you can put your doubts about the real nature of the gold game aside ? We smile together and enjoy having the luck for being able to share our precious thoughts, at this unique CPM place.

GoldiloxForeign currency#14055201/17/06; 02:50:32

As the biggest loan-shark on the block, one has to wonder how China plans to deal with welchers when the paper burns.

Breaking legs is oh, so western. Maybe water torture?

Will they take Puplava's advice and start buying all the water companies?

GoldiloxGreat game#14055301/17/06; 02:59:35


"And I'm (personally) not looking for ideal moments to step into the accumulation of the precious. I'm in it for 100%...and STAY in it,"

As am I. That's what I've been trying to tell you for weeks now.

My only PM purchases these days are when someone pays me in FIAT for some contract obligation and I need to convert it to "MY bank."

Just because I post someone's opinion, doesn't automatically make it mine. That's my complaint with your assumption. I often post things to demonstrate the diversity of thought on the street, not because I am in complete agreement.

GoldiloxEuro#14055401/17/06; 03:07:04

@ Belgian,

I consider teh failure of teh dollar more important than the rise of the Euro, but that difference may just be one of perspective.

An Asian or Islamic currency evolution might be an even greater threat to $-IMS than the Euro, which I see as different colored paper from the same banksters that control the FED.

The great game, as I view it, is about whose pockets control what.

Belgian@Goldi#1405551/17/06; 04:20:38

Here we go again...
It is NOT about currencies and gold...but about GOLD > period !
Gold first NOW...and currencies, MUCH later.

That's exactly what is behind gold's "revaluation".

That's why the latest gold-statements indicate that it is GOLD that is wanted...NOT more and more of the same confetti.

All confetties are worthless when they exclude gold. And it was the $-IMS that was based on the exclusion of gold in its right function.

Gold and fiat fiduciary units are NOT going to "extremes" but simply transition into another system based on gold as wealth and not gold, the money.
That's what < gold's behavior > is trying to tell, all of us.

Belgian@Goldilox#1405561/17/06; 07:48:10

I understand that you are rarely fully agreeing with the others'opinions, you are providing us. And I'm not (always) reflecting on your personal thoughts but on the thoughts of others you reproduce. All these mainstream thoughts (bullion desk) are all along that same old goldline and rarely diverge from it.
These floods of instantly changing opinions must drive one crazy as to never detect the real fundamentals that are being unfolded.
So in the future I will not refer to any poster name or article, to avoid misunderstandings.

GoldiloxReferences#1405571/17/06; 09:15:41

@ Belgian,

or better yet, refer to the article and refrain for attributing the ideas directly to the poster. A good referrence is much better than none at all.

GoldiloxCurrencies and gold#1405581/17/06; 09:21:35

@ Belgian,

Which is why the Islamic Dinar needed to be crushed post haste by the FIAT printsters! Unlike the Euro, which advertises, "we have value because of gold in our vaults", the Islamic Gold Dinar was to be, I understood, either "convertible" or actually minted gold.

That was the differentiation I was trying to make from my also "flu-addled" mind.

Clink!Jevons' Paradox#1405591/17/06; 11:10:37

The attached URL gives much food for thought. He is talking particularly about energy, but it is applicable to many other aspects of our civilization.

Snip :-
It is in the nature of complex systems to grow and burgeon until fundamental flaws bring their downfall. Complex systems are rather susceptible to sudden, large scale change. They handle slow and subtle changes smoothly, but quick, large scale change does not leave a complex system an adequate opportunity to adapt......There is simply no way to anticipate a systemic breakdown. You can hazard guesses about some of the effects and prepare for those; but you can be sure that you will run into something unforeseen, and that the effects you did foresee will be complicated by other chains of effect beyond your ability to forecast.

C! In other words, don't try to make long-term predictions because it is always the event out of left field which will effect the most dramatic change.

And ----
...for those who say that a technofix [to the energy shortage caused by peak oil] would work if we also practiced conservation, I submit that it is impossible for our current socioeconomic system to conserve. For one thing, conservation could endanger the economic growth upon which this system is so dependant. And even if we did succeed in conserving energy in some ways, Jevon's Paradox implies that total energy consumption will still increase.

--end snip.

From the Wikipedia link in the article :- technological improvements increase the efficiency with which a resource is used, total consumption of that resource may increase, rather than decrease. It is historically called Jevons Paradox since it ran counter to Jevons' own intuition, but it is not a paradox at all and is well understood by modern economic theory which shows that improved resource efficiency may trigger a change in the overall consumption of that resource, but the direction of that change depends on other economic variables

C! So if we try to apply this to gold as a more efficient holder of wealth, its use should increase, no ?

BelgianGold#1405601/17/06; 11:31:54

On top of the ECB's balance - activa-, stands number 1 > Gold and gold receivebles at a constant of 15% of the total activa. Normally, one should expect this gold post on the bottom of the page (left colum).

The ECB's activa (EMU) do evolve in function of the world's goldprice in euro and balances this activa/passiva through MTM the gold to worldprice. This suggests (rather very strongly) that the ECB (through BIS) is (very) active in het gold pricing market, in function of where it wants its book-keeping to evolve to.

The sudden change from a goldprice anticipating the US-$ exchange rate to a goldprice that rises in "all" NOT a natural market fenomenon but a POLICY change !!! Gold wealth reserve, NOW...and currencies later.

Offering the gold-euro to Iran is certainly on the negociation tables, somewhere, somehow ! Most probably, Angela is carrying it with her (?).
The gold-euro competes with the threath of military against bombs.

But the whole Middle East should be concerned in solving the Irak + Iran problems and at the same time the reliable flow of oil to all competing blocks on our planet. Is the US-$-IMS ready for concessions ??? If not, it will take some more time and some more events to give the whole matter another occasion to restart negociations...around the very same fundamentals of value (gold) for value (oil/gas).

In the mean time, the oilprice will continue to rise as to make the oilprice having a significant impact on the competing Asians so as to bring them on the negociation table with a somewhat other attitude.


Watch the main trends and let's try to "understand" what exactly those trends do mean.

geBelgian #1405611/17/06; 15:00:14

You write:

***The sudden change from a goldprice anticipating the US-$ exchange rate to a goldprice that rises in "all" NOT a natural market fenomenon but a POLICY change !!!***

Gold rises against all fiat money, and this not natural? Really? Are you serious?

GoldiloxBROKEBACK REAL ESTATE - The Tragic Tale of American Land and Gold#1405621/17/06; 16:30:29


Have you seen the movie yet? You know, THE MOVIE. Well, this story starts in 1963, just like that story, but has less alcohol, less smoking, and is unlikely to get any awards. However, just like that story, this story probably will end with someone living in a trailer with nothing to their name in a few years.

You may have read some of the articles lately about the Dow and Gold, and where the market stands today. I got the idea to look at U.S. average home sales and Gold, so I did a little research at the Mortgage Bankers Associate site, combined with some historical data on the price of Gold. What I discovered may not be as shocking as the love that dare not speaks it name, however it certainly indicates to me when it comes to real estate, and gold, a lot of people do get screwed.

In 1963, according to what data I could find, the average cost of a home in the United States was $19,300. We know that Gold was fixed at a price of $35.00 an ounce so it is easy to see that the average American home in 1963 was 551 troy ounces of Gold.

From 1963 to 1969, the average cost of a home in the United States increased by $8,600, or 44%, or 245 troy ounces of Gold. From what I can tell, in 1969, the year of my birth, a home in the United States was on average 797 troy ounces of Gold. If you use the price of Gold today, say $550, then the average home was nearly $440,000. Suddenly, this home in 1969 is not so cheap after all, yet I am sure if you asked someone about home prices in 1969 they probably would have considered them dirt cheap.

By 1980, the relationship between home value and gold had changed considerably. Even though homes had appreciated another 270% during the decade, with an average home going from $27,900 in 1969 to $83,000 in 1980, the price of Gold exploded even more until this average home cost only 127 ounces of Gold!!!! Homes had depreciated 85% in value of gold from their high in 1969, even as they appreciated in U.S. dollars by 270%! Talk about smoke and mirrors!


Tribble's anaysis goes on from here, and discusses the relationship on into the present. A very nice perspective from one who calls himself, "a proud hoarder of what was once illegal money!"

USAGOLD Daily Market ReportPage Update!#1405631/17/06; 17:07:05">
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.

TUESDAY Market Excerpts

January 17 (from MarketWatch) -- COMEX February gold futures fell $2.70 to close at $554.30 after climbing as high as $561.50 during the regular session, and as high as $565.50 in overnight trading Monday, as increasing tension surrounding Iran's nuclear program and attacks on Nigerian oil installations raised the price of oil to a three-month high.

"The precious metals may finally be suffering from the rarified air that they find themselves in at this time," said Dale Doelling, chief market technician at Trends In Commodities. But "there's certainly no cause for alarm," he added. "The markets are overbought and a pullback from these levels is absolutely necessary for the trends to continue their upward paths."

"Firm oil and energy prices and related geopolitical tensions (ongoing concerns about Iran's pursuit of nuclear-power development) should ensure that the price of gold remains underpinned," according to economists at Action Economics.

"News last week that South African gold output fell 11.3% in volume terms in November illustrates the constrained supply side of the equation, too."

Oil futures traded above $65 a barrel Tuesday, at levels not seen in over three months.

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

Rook.,.#1405641/17/06; 20:48:07

Are derivitives the mutual assured destruction of the financial world?
Is there a way to protect parts of the derivitive structure if it goes awry? How did they limit the enron fallout? I would like to see a flow chart of money in a derivitive structure. Or a flow chart of connections. Is it that the big banks and financial orgs get loans to patch things up, and it is only all the people that take the loss? Must be some self healing properties to derivitives arrangements that keep meltdown from occuring.

GoldiloxFallout#1405651/17/06; 21:15:07

@ Rook,

"Is there a way to protect parts of the derivitive structure if it goes awry? How did they limit the enron fallout?"

Hear that "whoopwhoopwhoopwhoopwhoop" in the background?

That's their answer, and that's why we're all HERE!

The meltdown has already occurred. The bulk of the reported "productivity gains" come either from profits on foreign manufactured goods (which can not continue with the trade balance in nose-bleed territory), or rebuilding disaster sites (human or naturally induced, it matters not) with gubmint contracts. In other words, productivity is of mythical proportions.

US majors are bailing on pension plans because they can't pull off another ENRON swindle, and want to be out of the way before Phase III of the grizzly gets underway in earnest.

They don't have to outrun the bear. They just have to outrun John Q.

Rook.,.#1405661/17/06; 21:44:14

Goldilox, I heard only part of a report when someone changed the channel, and by the time they changed it back at my request, I missed the details. However, the gist was that China is at some type of disadvantage in its export business. Major obstacles stand in the way of it taking over the full arm of exports. They can manufacture, but (missed data here), cannot easily become the middleman to retail around the world. The barriers of entry are somehow quite high. I dont comprehend that because hong kong is thiers, but, it was a quality business report.
Chris PowellJapan's stock market falls sharply#1405671/17/06; 21:56:56

Maybe connected with gold's fall tonight.

* * *

Michael Tsang
Bloomberg News Service
Wednesday, January 18, 2006

TOKYO -- A rout in Japanese stocks deepened today, helping to wipe away more than $300 billion in value from the world's second-largest equity market this week.

Technology shares including Tokyo Electron Ltd. and Toshiba Corp. dropped after earnings from Intel Corp. and Yahoo! Inc. fell short of estimates and heightened expectations profits in the industry will disappoint.

Internet-related shares including Softbank Corp. and Yahoo Japan Corp. fell for a second day. The Yomiuri newspaper said today that Livedoor Co. falsified earnings to show a profit instead of a loss in the year ended September 2004.

"Earnings such as Intel's that missed investor expectations are having a big effect on technology shares today," said Atsushi Osa, who helps oversee $4.1 billion at Sumitomo Mitsui Asset Management Co. in Tokyo. "The share selloff, especially in Internet-related companies, will continue to hurt the market until the Livedoor incident quiets down."

The Nikkei 225 Stock Average dropped 709.48, or 4.5 percent to 15,096.47 as of 1:20 p.m. in Tokyo. Yesterday, the Nikkei slumped 2.8 percent, suffering the biggest percentage loss since April 18. In points terms, the Nikkei's decline exceeded that on Sept. 12, 2001, the day after the attacks on the World Trade Center in New York and the Pentagon in Washington. The Topix index today slid 92.52, or 5.7 percent, to 1539.09.

Share-price declines in the past three days have reduced the market value of companies listed in the Tokyo Stock Exchange's first and second sections to 508 trillion yen from 544 trillion yen ($4.4 trillion) at the close of trading last week.

The 35.5 trillion yen loss in market capitalization almost equals the value of the entire Chinese stock market, which was valued at $329 billion as of yesterday's close.

The Tokyo Stock Exchange today asked investors to group orders together on concern trading will exceed the bourse's daily capacity of 4 million transactions.

DruidNikkei#1405681/17/06; 22:22:26

Druid: You would have thought that after all the collaboration that has taken place over the years between the Japanese and U.S. Governments on how to swap currencies for debt, someone might have slipped in a Power Point presentation on how to keep the Nikkei levitated or at least range bound, much like the DOW and S&P 500.

The paper wars are really heating up.

Belgian@ge#1405691/17/06; 22:24:08

If you only read 1/3 of the very short sentence and "repeat" only that same 1/ can we possibly communicate our mutual thoughts ?
Goldilox"Service Economy" Hype#1405701/17/06; 22:39:02

@ Rook,

China is just the biggest piece of the unequal trade patterns puzzle of the globalists. Have you been watching the US admin's priorities in Latin America?

Yes, the middlemen are making tons of money (listen to part 4 of Puplava's Saturday broadcast with George Zhibin Gu), but as the international comglomerates put more and more small business owners and previous corporate labor out into the streets, US consumers are gonna find it difficult to continue supporting the globalist agena. After all, we can only take in each others' laundry for so long. The housing boom is showing signs of slowing down, along with the ATM function of individual RE equity.

A work force that produces virtually nothing will eventually be replaced by either a lower paid work force (i.e. India), or automation, itself.

If the only job left for the newest generation of US youth is playing international cop, then war will be necessary to "sustain that industry". But remember, while war contractors make managerial level salaries, the rank and file of the US military still earn less than the poverty rate in most communities, so they can't even enjoy the "spoils" of their conquest.

To shelter one's eyes from that possible result of gobalism does not decrease its likelyhood one iota.

GoldiloxWar Ahead or Just Training?#1405711/17/06; 23:28:20


Not to be an alarmist about such things, but we have one Reader who spends a lot of his time watching public information about the US military. Today, he notes the following:
WOW ... almost everything that can carry a Marine is now at sea. Enough stuff is now out to fully outfit an ADDITIONAL FIVE (5) Marine Expeditionary Strike Forces.

All 8 LSD's are out

6 of the 8 LPD's are out (1 was scheduled for retirement this spring and another 1 in Aug so I don't even know those two (2) are capable of going to sea)

4 of our 7 LHD's (new model mini carrier) and 3 of our 5 LHA (old model mini carrier) are out (enough for one for each real and each potential ESG).

The Marines are MOVING.

+++++++++++++++++++++++++++++++++ as of January 17, 2006:

Carriers: USS Theodore Roosevelt (CVN 71) - Persian Gulf USS Abraham Lincoln (CVN 72) - Pacific Ocean USS Ronald Reagan (CVN 76) - Pacific Ocean

Command Ships: USS Mount Whitney (LCC 20) - Atlantic Ocean

Tarawa Expeditionary Strike Group (ESG) [13th Marine Expeditionary Unit (MEU) (SOC)] USS Tarawa (LHA 1) - Indian Ocean USS Cleveland (LPD 7) - Indian Ocean USS Pearl Harbor (LSD 52) - Indian Ocean

Nassau Expeditionary Strike Group (ESG) [22nd Marine Expeditionary Unit (MEU) (SOC)] USS Nassau (LHA 4) - Arabian Sea USS Austin (LPD 4) - Persian Gulf USS Carter Hall (LSD 50) - Arabian Sea

Amphibious Warfare Ships:

USS Peleliu (LHA 5) - Pacific Ocean USS Essex (LHD 2) - Pacific Ocean USS Boxer (LHD 4) - Pacific Ocean USS Bataan (LHD 5) - Atlantic Ocean USS Iwo Jima (LHD 7) - Atlantic Ocean USS Ogden (LPD 5) - Pacific Ocean USS Juneau (LPD 10) - East China Sea USS Nashville (LPD 13) - Atlantic Ocean USS San Antonio (LPD 17) - Gulf of Mexico USS Whidbey Island (LSD 41) - Atlantic Ocean USS Fort McHenry (LSD 43) - Pacific Ocean USS Comstock (LSD 45) - Pacific Ocean USS Harpers Ferry (LSD 49) - East China Sea USS Oak Hill (LSD 51) - Atlantic Ocean USS Germantown (LSD 42) - Pacific Ocean

Could Iran (or somewhere else) be about to "go hot?" We're watching for the last few days of the month into first week of Feb in part because of the movement of forces, partly because of the dark of the moon then, and because the web bots say something unexpected is coming around then... Now, place your bets: Is this a bluff? You saw our reports of air units moving to the Middle East we reported last week, right?


Not argue the pros and cons of such activity, but just reporting that it's there. As Firesign Theater used to say: "Where there's smoke, THERE'S WORK!"

Are the gold shorts just preparing for the leap ahead? Make a few bucks on the ride down, and be ready to slam it the other way!

BelgianA Pyrrhus victory...#1405721/18/06; 00:10:05

Is a victory where the price to be paid for peace is a high multiple of the price for making war (threaths of war). And after each costly war (and threath)...there comes peace.

Will wars on/for energy reserves result in a peaceful/prosperous energy environment for all, afterwards ? No way !

Can "paper" go on to pretend that it is wealth, for ever ? No way !

Think we might see a short cut on the road to freegold wealth.

GoldiloxPyrrhic Victory#1405731/18/06; 01:34:26


Pyr·rhic victory P Pronunciation Key (prk)
A victory that is offset by staggering losses.


A Pyrrhic victory (pronounced pirric) is a victory which is won at too great a cost for the victor. The phrase is a reference to King Pyrrhus of Epirus, who defeated the Romans at Heraclea and Asculum in 279 BC, but suffered severe and irreplaceable casualties in the process, going on to eventually lose the Pyrrhic War. After the battle of Asculum, Plutarch relates a report by Dionysius that:
"The armies separated; and, it is said, Pyrrhus replied to one that gave him joy of his victory that one other such would utterly undo him. For he had lost a great part of the forces he brought with him, and almost all his particular friends and principal commanders; there were no others there to make recruits, and he found the confederates in Italy backward. On the other hand, as from a fountain continually flowing out of the city, the Roman camp was quickly and plentifully filled up with fresh men, not at all abating in courage for the loss they sustained, but even from their very anger gaining new force and resolution to go on with the war."

BelgianAllo Tokyo#1405741/18/06; 01:40:47

The organized rise of the Tokyo stockmarket + today's enronitis, evidences once again, that the complete financial industry has mutated into ONE BIG HOUSE OF CARDS.
Worse, than a rather pleasant Vegas casino.

Once again, the ongoing revaluation process of gold, meets the organized desperate shorters, along the road (gold trail).

Nothing more, nothing less !

The mutation into the "one big house of cards", was only possible thanks to the allowed/supported existance + proliferation of the "derivatives" !!!

Why is it so silent on the forum...when the news is so terribly good for gold's future ?

BelgianThe (former) Gold Exchange Standard....#1405751/18/06; 01:49:12

...Was the existing of gold-reserves next to $-reserves (simplified)!

What if the gold-reserves are evolving into taking over the function of the $-reserves ? And the last remains of the virtual gold-exchange-standard become officially obsolete ! Think about it in an historical evolutive context.

Usultimbervision, abiotic oil:#1405771/18/06; 04:19:21

If oil resupplies itself abiotically, why hasn't it refilled all the old Texas oilfields, where output has decreased steadily since the 1970s? If that is all abiotic oil can do for a depleted oilfield, it will be a fat lot of use when the Saudi, Iraqi, Nigerian, Iranian, etc. fields start to decline and will make absolutely no difference to the argument that oil prices must rise as the 50% point of easy oil extraction is passed.

Rolling Stone (Link), April 2005:

"Some "cornucopians" claim that the Earth has something like a creamy nougat center of "abiotic" oil that will naturally replenish the great oil fields of the world. The facts speak differently. There has been no replacement whatsoever of oil already extracted from the fields of America or any other place."

"Show Me the Oil!"

"The abiotic hypothesis remains just that, an hypothesis which has failed in prediction and so cannot be elevated to a theory. It is completely ignored by the oil industry worldwide, and even within Russia. And that is the final testament to its failure."

Oil + Energy (debunking abiotic oil)

"Perhaps one day there will be general agreement that at least some oil is indeed abiotic. Maybe there are indeed deep methane belts twenty miles below the Earth's surface. But the important question to keep in mind is: What are the practical consequences of this discussion now for the problem of global oil depletion?
I have not personally inspected the oil wells in Saudi Arabia or even those in Texas. But nearly every credible report that I have seen - whether from the industry or from an independent scientist - describes essentially the same reality: discoveries are declining, and have been since the 1960s. Spare production capacity is practically gone. And the old, super-giant oil fields that the world depends upon for the majority of its production are nearing or past their all-time production peaks. Not even the Russian fields cited by the abiotic theorists as evidence for their views are immune: in June the head of Russia's Federal Energy Agency said that production for 2005 is likely to remain flat or even drop, while other officials in that country have said that growth in Russian production cannot be sustained for more than another few years."
Richard Heinberg

Are you shorting oil or gold or both? Clearly the argument on the peaking oil side is that the increasing costs of oil will stoke general price inflation and tend to increase the price of gold. If you believe in magically refilling oil wells, you should buy one of those old dead Texas oil fields and wait for it to magically refill and make your fortune.
Let us know how you get on.

Humble PieRE #140574 Allo Tokyo#1405791/18/06; 07:12:33

You hit the nail right on the head.Keep it coming
DruidNikkei Boogie#1405801/18/06; 07:56:07

Druid: Let me guess, some big Japanese players are helping propel shiny's price upward and squeezing some shorts along the way, and so Vader sends out some hedge fund guys on a mission to spank the Nikkei. Market volatility is really going to be served up on the menu this year.
ericIranian Oil Bourse #1405811/18/06; 08:15:06

I have posted an article on the Iranian Oil Bourse on the UK motley fool site. You may need to register to view it but this is free. The article is written by a PHD economist. I am interested in the forums thoughts about the article.


Belgian@Eric#1405821/18/06; 08:41:03

The general idea, in the Petrov article, is already known (and discussed) here for almost 7 years now, Eric.
Let's guess about the future and how exactly gold is going to fit into it.

GoldiloxClimate Discussions#1405841/18/06; 09:05:39

@ Rook,

With the return to previous topical restrictions, we shouldn't be talking about this here.

GoldiloxWelcome to "Hell Day"?#1405851/18/06; 09:18:20


I won't gloat and yell "Dammit, I told you so!" (or, maybe I will) but here's the overnight picture:

The Tokyo stock exchange closed in a panic apparently touched off by a reported investigation into LiveDoor. The market was closed 20-minutes early by circuit breakers [market panic prevention trading limitation rules] being activated by selling which saw the market down more than 4% at one point.

The price of gold is taking a hit, down to the US$ 545 level.

Markets in Europe are taking it on the chin, as well and as I write this special early edition of today's report, Dow futures are down nearly 100 points.
Other factors impacting trading later today: Intel is not as optimistic as expected.

Oil is back near $67 a barrel.

On our watch list today: How well the US Tech Sector will do (we expect poorly, but it will be an issue of magnitude) and the Global Hell Day is likely to visit Germany where a second real estate fund has barred the door to investors exiting.

The German situation is, I think, far more significant to the investment mood than is the LiveDoor report in Japan. Why? Because if there's one thing that scares the daylights out of investors, it is the notion of being "locked in" to a declining investment. Should the inherent lack of liquidity in many paper funds become evident to a large enough group of Baby Boomers who are watching their retirement nest eggs closely, then you would have the potential for a worldwide economic meltdown.

To our way of looking at charts, this would simply be the resumption of the declines that began when the tech bubble burst in 2000. The market at a very macro level has been in a huge "B" wave bounce since March of 2003. It seems likely that the C wave Down is beginning in here, and if so, it could portend a Dow falling to the 6,000 area, and that would effectively steal up to 40% of Baby Boomer's retirement nest eggs. Not that you couldn't have figured that out for yourself, of course.

Now, I won't say "told you so" BUT you will recall that the web bots had been talking about the financial meltdown to come in the January-March period. Well, although it's early to be certain, this is probably the start of that sequence of events the future predictive software has been alluding to. By the way, congratulations to both Cliff and Igor at for getting this so right on. Their primary commercial client has to be just ecstatic because they were perfectly positioned for this thanks to the private data runs. Say, is this cool, or what? Now I know why I awoke this morning at 4;00 AM uneasy and unable to sleep.


DOW 11K sure didn't last very long! Got retirement? Got gold? Notice our $20 PoG spanking seems to be turning around already. When was the last time we saw some "early market closures"?

otish mountainIranian Oil Bourse#1405871/18/06; 09:47:42

Here is a clean link for the article I think Eric is referring to.
I recommend a read for it enlightened me on the concept of world taxation thru currency debasement which I had not thought of before.

Thoreauly@ eric#1405881/18/06; 10:18:20

This may well be the future.

At least I hope so.

timbervisionOil#1405891/18/06; 10:40:16

I am largely a paperless investor, so no shorting from me. I was wondering if perhaps the reason for the intensification to war in the Middle East could be related to more than just the current known supplies of oil. I had heard that some of the older Texas oil wells had "replenished" themselves. Why an old field could be replenished could still have a fossil oil explanation.

Thanks in any case for the details you provided refuting the case for abiotic oil. I think we all know the weight of accepted evidence supports the fossil fuel explanation for oil's existance.

Flatliner@Belgian, "Why is it so silent on the forum..."#1405901/18/06; 11:05:40

"when the news is so terribly good for gold's future ?" True. You would think that there would be a little more excitement for gold's future here. But, unfortunately, I have seen that there are quite a few in the forum that subscribe to the point of view that change will cause chaos – at least temporarily. It is true that tensions are high, many are concerned and the majority hold their breath.

From my point of view, if you have not been able to convince your brother, who values paper over gold, to buy gold, you have not tried hard enough to save your family. I wish I could be happy right now. :(

Flatliner@eric and how#1405911/18/06; 11:19:08

One of the most valuable things that CPM has done for you is archive the Thoughts of Another and FOA. If you have not read the Gold Trial and Thoughts (linked to above) you might only have a partial view of the big picture. I would suggest to everyone to read these words and thank CPM with your next purchase.

With regards to, it will really be interesting to see if any of these alternate currencies actually stand over time.

I would lean towards history to see how gold will fit into the future. I would assert that it will fit in just like it has always fit in. It is a store of value. Look at how the Central Banks around the world are viewing it and treat it the same way. The simple concept is, they are using it as their savings. So should you. But, when they want to put it to work, they exchange it for a currency which buys them goods in that currency. Picture a society much like today, except, people's perceptions will change. Rather then valuing dollars over gold, they will value gold over dollars. All else remains the same.

bskijaLimits to Gold Purchase#1405921/18/06; 11:42:52

Do any of you earthlings know if a gold dealer is obligated to buy gold coins as well as sell them? Is there a limit as to how many one oz. Eagles someone can buy at one time before they would have to report the purchase to the IRS?
HenriTime for me to sell goldshares#1405931/18/06; 11:44:19

The last time I sold a few shares of Newmont and the gold price took off to the upside as if to mock me...

Likewise when I buy, the price goes down...

Didn't buy anything recently...perhaps I am contagious.

Truly, I don't believe that what I do matters one fig...but then one never knows does one...

PanAvocet Mining's new 360000 ounce of GOLD - Put Options sold to Macquarie Bank,#1405941/18/06; 11:57:29

Another 11.2 tons of GOLD "sold" to the Gold Cartel!

The game keeps going on, and on

The CEO must be afraid Gold will fall below 450.-$ and not cross over 700.- $ in the next 3 years!

°The Company has purchased European put options (the ability to deliver at a certain price, exercisable at specific periods) for 10,000 ounces per month at US$450/oz over a 36 month period from April 2006 to March 2009. The
Company has also sold European call options (the ability for a third party to purchase from the Company at a certain price, exercisable at specific periods) for 10,000 ounces per month at US$700/oz over the same period
from April 2006 to March 2009."

The transaction counterparty is Macquarie Bank, the Company's principal banker. Macquarie has already granted the Company a US$10 million revolving credit facility. The transaction was entered into for zero cash consideration. No margin calls apply.

Henribskija#1405951/18/06; 12:02:31

I do not know the answer to the question you pose, but I would think a dealer would be able to answer it. I think the reporting only applies to cash purchases and is across the board federal reporting requirement. The same as deposits or withdrawals of large amounts of cash. I believe purchases drawing on good funds by check or wire are not reportable events. I think the reporting current level is $2500 US for banks and it is reported as a "suspicious" transaction related to money laundering operations.

This is a very good question, does anyone know for sure?

Here is another.

Why does the IRS care what you buy with their fiat? Isn't the impetus to continue consuming so that fiat has a high velocity of circulation? If one hoards fiat, it slows the velocity and more fiat must be pumped into the system to maintain velocity de jour. Does anyone think the Fed monitors fiat velocity as a control throttle? Greenspan admitted they they really don't know what constitues money these days. I'm guessing that they do know what fiat is.

Henriso quiet...#1405961/18/06; 12:04:21

Perhaps it is because we are together with Trail Guide...just watching now
968Budgets & military power...#1405971/18/06; 12:23:26

"If Bush had come to the American people with a request to spend several hundred billion dollars and several thousand American lives in order to bring democracy to Iraq, he would have been laughed out of court."

"To get an idea of the economic black hole the Iraq war could become, it is useful to remember some of the past estimates given by the administration of President George W Bush. Recall, for example, when then-White House economic adviser Lawrence Lindsey suggested in 2002, six months before the war, that the mission could cost $100 billion to $200 billion, Bush fired him because his estimate was up to three times the $70 billion the administration estimated."

"Americans need to ask themselves if the White House is in competent hands when a $70 billion war becomes a $2 trillion war. Bush sold his war by understating its cost by a factor of 28.57. Any financial officer anywhere in the world whose project was 2,857% over budget would instantly be fired for utter incompetence."

"For the sake of comparison, consider that late last summer the Pentagon was spending $5.6 billion per month on operations in Iraq, an amount that exceeds the average cost of $5.1 billion per month (in real 2004 dollars) for US operations in Vietnam between 1964 and 1972. Currently, the Pentagon is spending about $6 billion per month in Iraq. The total direct cost of the decade-plus Vietnam War to the United States was estimated to be $600 billion. And not even three years after its start, Iraq has already cost 42% of what the Vietnam war did."

"...despite the political rhetoric one hears from all politicians, it turns out that America's fighting men and women are not worth that much.
The authors wrote: "The military may quantify the value of a life lost as the amount it pays in death benefits and life insurance to survivors - which has recently been increased from $12,240 to $100,000 [death benefit] and from $250,000 to $500,000 [life insurance]. But in other areas, such as safety and environmental regulation, the government values a life of a prime age male at around $6 million."
So a civilian death is worth at least $5.4 million or about 11 times that of a serviceman or woman. The economic cost for civilian deaths also applies to private contractors."
What would an Iranian adventure cost the US taxpayer ?
How much is dollar hegemony worth ?

Belgian@Henri#1405981/18/06; 12:32:07

Yes, and A/FOA also mentioned that it will be the gold-longs that will be excluded from the gold revaluation >>> Yesterday, the gold longs were locked in Tokyo !
bskijaIf the Sky Falls In#1405991/18/06; 12:38:16

I am heavily invested in gold Eagles and gold stock since 1975. If the stock market crashes and our dollars go south, I'm sure gold stocks will go with it. Although, I'm also sure gold stocks will rise after the smoke clears. The dollar that is currently worth 100 cents will swirl down to one cent. If I find that I will need to sell some gold Eagles to pay my bills, will I have to back up a truck at the dealer's door to make the transaction? Will the dealer declare a moratorium so that the US Treasury printing presses can catch up to the world-wide demand? Should I purchase truck hauling stock?
Flatliner@If the sky Falls in#1406001/18/06; 12:52:10

Bskija, Ah, you made me laugh! A truck needed for a transaction… Do you need a truck when you buy a house? I would contend that even in the face of an EMP currencies will remain digital and gold will be a store of value.

You are wise to own Eagles. May your wealth be too heavy to carry!

Flatliner@Thoreauly, This may well be the future#1406011/18/06; 13:41:59

Seeing that you provided no real editorial comment, I followed your link to see how gold will fit into our future.

The article is about digital currencies, specifically, private digital currencies. Currencies that are separate from government currencies.

I see one element of truth in that article. That is that digital currencies are here and that they provide cost savings along with ease of use that make them attractive. But, IMHO, I believe that the article doesn't consider human nature or the fact that governments will not give up their currency monopolies. Also, every gold advocate here they will be disappointed by the weakness of the argument that is provided in the article.

Sadly, it comes across in the article that digital ‘money’ has value and that the benefits are actually increased trust in the system.

I have been using digital ‘money’ for more then 15 years. I have less trust today in digital money then I did when I carried a pocket full of hundreds! Currencies are for transactions. Gold is for saving.

Buongiorno!Goldilox 571--possible salvo of marine assault ships#1406021/18/06; 14:03:52

Thanks for the heads-up. Now Drudge has as lead story the end of negotiations with Iran over nuclear development. "Not much to talk about", was the cryptic statement from Condolezza Rice, SecState. Even the French agree on this one....

Iran sits upon one of the largest energy reserves on earth. They need nuclear energy like they need more sand.

Israel,USA, and others can not gamble with the possibility of a nuclear Pearl Harbor. I can just hear the same whining now as was after 9-11, "Why didn't some one doooo something to prevent it?" Well, we are trying. Some toys are just too dangerous to be in the hands of homicidal maniacs. Just an opinion.

If our Marines have indeed put to sea, calm yourselves. This is just the way nations talk to each other when they really mean business. Remember when Kennedy forced the Russians out of Cuba with their missiles. Such arms were unacceptable to us, we cut a deal, and tensions eased. Hope for that here.

Delivery systems are the reason I fear a nuclear Iran more than Iraq. My limited understanding is that Iran has some missiles that would certainly threaten Israel and Europe--possibly the US. Others?

Gold? Well, if Iran were to cause a slowdown of oil deliveries in some way, (the market may be reflecting that now), that may be their reply to whatever we are doing. Thus, we may wake up some morning to see oil at $75, gold at $600, and an even bigger mess in the Middle East.IMVHO!

Bulldog968 - How much is dollar hegemony worth?#1406031/18/06; 14:08:55

Apparently the whole bundle. Easy to fund the wars with dollars printed at will; may be getting harder to find the bodies.
Thoreauly@ Flatliner#1406041/18/06; 14:42:43

I don't pretend to be an expert, but believing as I do that the demise of the state will be one of the 21st century's greatest legacies, I also believe that advanced technologies will bring out the best in gold in terms of convenience, safety, etc., to the great and lasting benefit of mankind.

Here's a link that has a wealth of information in this regard:

bskijaBy the Truck Load#1406051/18/06; 15:03:22

@ If the Sky Falls In
Flatliner, In a hypothetical situation let us say the current dollar was worth only one cent in purchasing power. I need about five thousand dollars to pay my bills each month before the sky fell in when the dollar was worth 100 cents at that time. It wouldn't matter whether I paid digitally or by paper money the creditors would demand the equivalent of the old worth of the dollar. If I brought one gold Eagle into the gold dealer's store I would not accept the current price of $500 one cent dollars, since the gold coin would only have a true value of 5 dollars compared with the old worth of the dollar which was worth 50,000 cents for an Eagle coin. The creditors would want 500,000 one cent dollars to address my bills if they wanted to stay in business. In Germany back in the 1920s and 1930s a person would have to bring a wheel barrow-full of money to buy a loaf of bread, the next day he would have to bring two wheel barrows-full to buy another loaf of bread.
The digital dollar and the paper dollar would have the same worth. Each would be worth the equivalent of only one cent compared to the present day 100 cents dollar.

Flatliner@Thoreauly#1406061/18/06; 15:05:24

These digital currencies are very interesting. The problem right now is that they will be tested in the near future. At the point where physical gold become scarce, the real question will be – will the participants in these systems be able to get access to gold? Personally, I do not believe that they will. The second part is, if gold can not be found to back this system, what does? Faith? ???

It may be that we'll have a system similar to these in the future, but, it will not be a means for saving – it will be a means of exchange. Savings will always be in physical form.

Flatliner@ By the Truck Load#1406071/18/06; 15:15:16

Bskija, If the value of the dollar goes to 1 cent making your Eagles worth 5 dollars a piece, I would gladdy buy every one of them from you. The more you have for me the happier I'll be.

When the dollar loses buying power, time disperses wealth. If you are a creditor, over time, you get back money that is worth less then when you originally signed the deal. If you are the debtor, you pay with money that has less buying power over time. If you have a fixed debt of 5k per month and the dollar falls to being worth 1 cent it means that the value of your debt is now 1/100th the value that it was before. Thus, it's 100 times easier for you to pay. The creditor is the one that goes out of business. They are the ones that are getting 5k a month from you but that 5k only buys them 1/100th what it did before the dollar lost value.

Likewise, if you take your Eagle anywhere in the world (anywhere), you will get the going world price. If the dollar loses 99%, that means that it will take 100 bucks to by 1 Euro. But, it may be that gold is 450 Euros per ounce, thus you'd get 450 Euros, convert them into dollars (45,000 dollars) and you would have enough dollars to by your 5k bills for 9 months.

mikal"Experts" expect 911 terrorism again- markets know it#1406081/18/06; 15:21:08 Numerous Bush administration officials have
flatly stated their expectations in this regard.
"It's not a matter of if, but when."
Judging from the flat US stock, bond, and dollar markets, and current geopolitical international crossfire over alleged "volatility" in gold and Japan for example,
a rogue event may be close at hand. This column by Buchanan could lead one to believe terrorism in the US, in a subway in London, or elsewhere could, by process of elimination, (along with M3 stealth in March) prove to be ample reason for war... and multi-colored Bernanke balloons:
Another Undeclared War? - Patrick J. Buchanan - Creators Syndicate

Thoreauly@ Flatliner#1406091/18/06; 15:50:31

"The foundational currencies to the Gold Economy are 100% backed by gold bars held in secure vaults in locations around the world, such as London, Zurich, and Dubai. Should any holder of a gold digital currency require their equivalent value of gold holdings, they are redeemable in actual gold bars or can be converted to national currencies by exchange agents."

That is, savings is based on physical, since the system is based on physical.

Flatliner@Thoreauly…#1406101/18/06; 16:16:22

I would still question this system. To me, it is just another form of fractional reserve lending (banking). :) They basically team up with bullion dealers around the world so that anyone that wants to take gold out of the system can ‘shop’ at any one of these dealers. I have not read the fine print, but logic has it that these systems have a ‘reserve’ that is a fraction of the total ‘money’ in the system. Why? Because they don't need to convert it all, thus they won't.

Look at the people in Vietnam. They believe that their ‘gold money’ is as good as gold. Why? Because if they need to take it out of the bank, they can go and do so. But, the banks KNOW that all people will not draw out all their gold at any one time. Thus, they only hold a small reserve.

With these digital systems, if I put in 500 bucks currency, I have 500 bucks worth of value in the system. If you put in 1 ounce gold, you have about 500 bucks value in the system. In the system, there is 1 ounce of gold and 500 dollars currency but 1,000 worth of value. Where is the 100% backing in gold?

When I get time, I will read the fine print. I believe that what I'll find will be that the value you own in the account is 100% redeemable in gold. This way, the system doesn't have to come up with gold as a losing 3rd party to the 1,000 dollar value problem.

FlatlinerDigital Currencies#1406111/18/06; 16:37:50

Any form of currency involves extending trust into the system. The one thing that CPM gives us that these digital currencies do not is the freedom from having to extend trust to a relatively unknown system.

I'm sure we will all watch these digital currencies and, it may be, that we will find value in them. But, if you do not want to *have to* extend trust to someone else, somewhere else, hold physical in hand. As White Hills says, I trust myself.

Thoreauly@ Flatliner#1406121/18/06; 16:46:52

In a market-based (i.e., free) monetary system, banks and related exchanges would need to subject themselves to routine audits by outside agencies in order to establish and maintain their reputations -- all based on trust -- and thus their competitiveness. This isn't to say that fractional reserve banking wouldn't be tolerated; it's just that it probably wouldn't stand up to the competition, as consumers would prefer to do business with 100% reserve banks.

Only time will tell, of course, but I find the "Big Picture" compelling:

Flatliner@Digital Currencies#1406131/18/06; 16:57:30

I do also. It is an interesting challenge for any government. Caution prevents me from getting involved just yet. Why? Because I expect in the near future that the perception that people hold with regards to the value of gold will change drastically.

When CPM endorses it, I will be more willing to participate. But, right now, I see it as a way for ‘Big Trader’ to acquire more gold at these ridiculously low prices.

spikedogFlatliner, Thoreauly, digital currencies and banks#1406141/18/06; 17:38:53

Perhaps, it would be best if we all became our own reserve, and not worry about what Bank A or Bank B has for reserves.

If I understand the change that is coming: currency (of any pedigree) will ONLY function as a medium of exchange and banks will ONLY be the clearing houses for daily transactions. Disposable income will be exchanged for indispensible wealth in the form of gold and other tangibles and will be held in hand. Hence, banks may have much smaller deposits and if they go belly up, people won't be losing much (as opposed to life savings).

Look to China and India - they seem to be leading the way. I wonder if they care about what banks have for reserves.

Just musing here. If I've stated the perfectly obvious, everyone can just move along - nothing to see here.


ToolieIran says ready to repatriate oil earnings#1406161/18/06; 18:40:46

Snip: TEHRAN –– Iran, facing mounting international pressure over its nuclear plans, will repatriate oil earnings held in foreign accounts if that proves necessary, Central Bank Governor Ebrahim Sheibani said on Wednesday.

Iran is facing referral to the UN Security Council for possible sanctions over its disputed nuclear programme. It has bitter memories of its money being frozen in US accounts shortly after the 1979 Islamic revolution.

"Whenever that proves necessary, we will do whatever needs to be done," Sheibani told reporters, when asked about the possible need to repatriate oil earnings.
Gold traders on Monday said a surge in the price of the precious metal could be due to buying from a Middle Eastern central bank.

Some traders pointed fingers at Iran which does not report its gold reserves to the International Monetary Fund. But they admitted they had no direct evidence for this.

When contacted by Reuters about any major change in the distribution of its assets, the Central Bank of Iran declined to comment. (end snip)

Perhaps a lesson here for other countries that foresee possible cross-purposes with resource consuming superpowers – save early, save often.

USAGOLD Daily Market ReportPage Update!#1406171/18/06; 19:24:17">
The Daily Gold Market Report has been updated.

If you are considering investments in gold we invite you to">request our free introductory information packet detailing the products and services offered by USAGOLD ~ Centennial Precious Metals. We welcome your inquiry and look forward to working with you.

WEDNESDAY Market Excerpts

Gold sees profit taking as Tokyo stocks crash

January 18 (from Reuters) -- At the New York Mercantile Exchange's COMEX division, February gold futures sank $9.80 to end at $544.50 on Wednesday on investor and fund selling as some players ditched positions to lock in profits from recent 25-year highs after a fall in Tokyo metal prices overnight.

Dealers said futures extended a pullback from the prior day after Tokyo Commodities Exchange (TOCOM) gold tumbled on heavy selling timed to meet margin calls amid a drop in the Japanese stock market. [see link or story below] The Nikkei share average fell 3 percent Wednesday in a broad sell-off.

"This is all Tokyo profit taking. It is a classic thing: as their stock market dumps, they can't sell their stocks so they have to get out of whatever they're long in, and obviously they're long gold," said a long-time COMEX gold trader.

Japanese investors had been big boosters of gold in the last few months as many viewed the precious metals as a preferred asset to hold amid currency weakness.

But the market has become increasingly volatile since Tokyo gold margins were raised, prompting occasional long liquidation by some funds and speculators.

However, analysts' sentiment on gold remained mainly upbeat and they said it could soon rebound. Gold is up 4.9 percent in 2006, after rising 18 percent last year....

Selling Stampede Shuts Down Tokyo Stock Market

A flood of sell orders forced the Tokyo stock exchange to close early as investors stampeded from the world's second-largest share market on Wednesday, spooked by fall-out from an investigation into a high-flying Internet firm. The company is suspected of fudging financial reports and spreading false information to boost its share price.

...[The] sell-off has wiped out more than $300 billion in shareholder value -- about equal to the gross domestic product of Sweden -- in just three days.

"The current situation is totally unexpected," said Tokyo Stock Exchange President Taizo Nishimuro.

"The problem has caused a selling climax. Everyone is throwing in sell orders, said Ken Masuda, a senior dealer at Shinko Securities shortly before trade was halted.

"Even after five minutes, orders aren't going through. This is ridiculous."

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

Toolie"free trade" & the gold standard#1406181/18/06; 19:44:34

Smeagol posted a link to an article about a month ago, written by Bremmer (?) (the unquotable Mr., Bremmer). I can't seem to find it, but was struck by the fact that it was a speech prepared for the CATO institute. IMO, the think tank that propels the "free trade" agenda in DC. What struck me about the speech was the tone, it wasn't the ‘green fields and blue sky’ talk that has been such a large part of CATO's ‘free trade’ advocacy. Instead, it offered superficial salve for the heat that some of the ‘free trade’ supporting politicos have been experiencing. The other thing that was out of place about it was, that is the first time in a very long time that I had seen the gold standard referenced in a CATO document. I seems that they have chosen not to discuss the gold standard much since ‘free trade’ had gotten traction. Prior to that it was staple of their ideology.

Below, further salve, and excuse making...
Snip: When assessing the performance of the international monetary system, one is tempted to paraphrase Winston Churchill on democracy: The system of flexible exchange rates is the worst possible one, except for all the others.
Critics of the current system correctly point out the costs imposed on the economy by the swings that have occurred in the value of the dollar. For instance, U.S. exporters made painful adjustments when the dollar strengthened between 1997 and 2002, resulting in considerable economic distress for stockholders, workers, and communities across the country.
Now there has been a shift at the margin in the attractiveness of investment in Asia. Not U.S. weakness, but China's impressive strength is driving that shift.
The pre-World War I classical gold standard operated with fixed exchange rates and economies experienced large capital flows. The international economy also saw relatively free movement of people across borders. War and the rise of totalitarian nation-states put a damper on both.
A return to a world of peace, free trade, and prosperity would be the best of all worlds. A system of fixed exchange rates might be a byproduct of a return to a liberal international economic order. In the meantime, flexible rates facilitate the adjustment to the global economic changes we confront. (end article)
Gerald P. O'Driscoll, Jr. (the author) is a senior fellow at the Cato Institute and former vice president and economic adviser at the Federal Reserve Bank of Dallas. (end credits)

Conclusion: Some folks in DC very much expect a return to the gold standard.

(I can hear Townie now: Toolie, you want freegold, not the gold standard! So i'll respond in advance: Since when does what I want matter?) :-)

SmeagolDid we hear a requesst for The Unquotable Mr. Reuven Bremmer?#1406191/18/06; 20:34:31

Ssir Toolie, here is that link, precious.
"The U.S. Dollar and Prosperity: Accidents Waiting to Happen"

Smeagoloopssy... that'ss BreNNer, not BreMMer#1406201/18/06; 20:37:41

-don't quote us either! (cackle)

USAGOLD / Centennial Precious Metals, Inc.FREE Gold Information Packet...#1406211/18/06; 20:48:41

SmeagolIt's bouncing right back...#1406221/18/06; 21:24:21

...above USD 550. Go Houndses!


GoldiloxStating the obvious#1406231/18/06; 23:40:42


You have put into a handful of words the entire breadth of the goldbugs' mantra.

When gubmints speak out of their neck, derivatives make up 90% of the "markets," and none of the published data adds up, what better answer can there be than "Perhaps, it would be best if we all became our own reserve"

Your simplicity is laudable!

Today, Apple announced earnings and revenue that anihilated street estimates and it bought them a hefty 9% haircut. If companies that grow and make money "producing things" don't excite investors, then just what ARE they looking for?

The approaching day of financial reckoning is weighing heavily on the paper tigers.

BelgianThe London Gold Pool actions revisited....#1406241/19/06; 02:02:46

...But with ONE single major difference : CBs are NOT going to "manage-control" what was formerly called -monetary gold-. Fasten your seat belts !
GoldiloxMarket Wrapup#1406251/19/06; 02:22:29


Stocks are off to a rough start following disappointing results from Yahoo and Intel, Google was downgraded, and last night there was another major sell-off with stocks in Japan. Sell orders flooded the floor in Tokyo forcing the Nikkei lower by 3% with trading halted by an early close. As you might expect, CNBC reports the markets are overreacting and investors should not panic by selling their stocks. Wall Street is a perpetual selling machine that would have you invested in stocks at all times. According to the perpetual bulls, this is just another buying opportunity for tech stocks and financials. Just remember they really don't care about you or your portfolio. They are more concerned about profits for themselves using your money! Mainstreamers on Wall Street will rarely tell you to buy gold and silver or mining/resource stocks to protect your assets.

Economic news today has the Labor Department reporting an unexpected decline in consumer prices with the Consumer Price Index falling for a second straight month. The headline CPI number fell 0.1% in December following a 0.6% decline in November. I would be very surprised to hear people say that their monthly bills are falling right along with the inflation data. This is a manipulated number by the government, so you can believe them or you can look at your monthly expenses and decide for yourself. The mainstream media is painting this to be a positive story because it means the Fed will back off the measured interest rate increases sooner rather than later.

The ABC/Washington Post consumer comfort index fell sharply last week to -13. The state of the economy and the buying climate both fell to -24 and personal finances fell four points to +8. This follows ten weeks of improvement in the comfort index. I believe it is more than a coincidence that consumer comfort was moving higher all the way through the Holiday Shopping Season…as oil was "managed" to stay under $60 a barrel so consumers would open their wallets to shop ‘till they drop! Some analysts suspect oil was covertly released from the strategic petroleum reserve during the shopping season, and now they need to top-off the tanks before the war with Iran begins. Covert releases from the SPR would be synonymous with central bank leases and sales of gold to keep the price down, thereby giving the dollar more credibility.

Gold and silver are selling lower today because of the muted inflation data. Bloomberg News reports as follows: "Gold Declines the Most in Almost Two Weeks as Inflation Concerns Subside." The opening sentence to the article reads, "Gold in New York fell 1.5 percent, the most in almost two weeks, as U.S. consumer prices unexpectedly fell in December, eroding the precious metal's appeal as a hedge against inflation." Frankly, I've been expecting a short-term correction in the metals, but still see much higher prices later this year. The extent of the correction will depend mostly on geopolitical developments, especially with regard to Iran. Gold and silver are much more than a hedge against inflation…they are REAL MONEY! Fiat currencies around the globe are "funny-money" compared to the hard currencies of gold and silver. If you want currency protection, buy gold and silver. I will increase my exposure to precious metals stocks when it looks like this short-term correction has run its course . . . .

Have you ever wondered how it is that the President is able to write executive orders that work to circumvent the Constitution? The short answer is simple…the USA is bankrupt! We live in a constant state of "national emergency" wherein our Presidents believe they have the right to set up dictatorial powers for the executive office. This all goes back to FDR in 1933 that imposed the War Powers Act for a state of economic emergency, not a military emergency. Don't take my word for it; you can begin your homework with all the details found at a very interesting website called the Library of Halexandria. This link will take you directly to the bankruptcy of the USA, executive orders and where martial law comes into play.

Frankly folks, I am a bit concerned I am losing my objectivity for analyzing the macro picture in the financial markets. I'm no rocket scientist in finances or the economy; I just report on things I have learned in seeking to find TRUTH in all the propaganda we hear from the mainstream press. I received an e-mail many weeks ago when someone read my Wrap-Up and commented that I was pessimistic about where stocks and the dollar are headed. He said I've been predicting an economic/financial crisis for at least a year now, but the dollar and stocks just keep going higher.

After much thought I responded to the e-mail by saying, "I simply don't understand how the powers that be can keep juggling the enormous global imbalances in the financial markets…most notably unbridled U.S. consumption via continued increases in debt. Since when can a person or entity borrow their way to prosperity?

The answer is quite complex and has to do with the U.S. dollar acting as the sole reserve currency for the world. Global trade is denominated in U.S. dollars, but there are some very powerful forces that would like to change the way business is done around the world. The first group that comes to mind is the Shanghai Cooperation Organization with members such as Russia, China, Iran, India and loosely with Venezuela and others. A year ago our Congressmen were getting heavy handed with China to revalue the yuan, but lately you don't hear much about it. They wanted to impose a 27.5% import tariff on all Chinese goods and now they are silent, along with Treasury Secretary Snow saying China doesn't manipulate their currency. I wonder what China had to say behind the scenes to Mr. Snow?

I still believe stocks and the dollar will tumble unless the Feds step in and monetize U.S. assets that are dumped by foreigners. That's probably the reason the Fed will stop reporting the M-3 money supply in March. Get ready for "Helicopter Ben" to take the reins of the Federal Reserve in a couple weeks.


Mike Hartman, one of Puplava's usually conservative analysts, also covers the Iran risk and the recurring debt ceiling issue. I left behind the MORE political parts. Collectively reading 60M internet locations, the Web bots are suggesting the "emotive state" of the US populace is very near the point of "ENOUGH, already!" - usually not a good sign for markets.

GoldiloxTHE LOOMING FIAT CURRENCY TRAIN WRECK#1406261/19/06; 02:29:34


While the bulk of the Western World's main stream media continues to make pronouncements about the price of both crude oil and gold continuing to rise as a result of Iran's nuclear aspirations – they have completely and utterly ignored the stark, dark reality of the currency train wreck [that is empirically only beginning to unfold] right in front of our eyes.

Iran's Potential Influence

So Just How Much Oil Does Iran Produce Per Day Anyway? Well, let's ask the experts over at the U.S. Department of Energy [DOE] – shall we?

In 2003, Persian Gulf countries had estimated net oil exports of 17.2 million bbl/d of oil (see pie chart). Saudi Arabia exported the most oil of any Persian Gulf country in 2003, with an estimated 8.40 million bbl/d (49% of the total). Also, Iran had estimated net exports of about 2.6 million bbl/d (15%), followed by the United Arab Emirates (2.4 million bbl/d -- 14%), Kuwait (2.0 million bbl/d -- 12%), Iraq (0.9 million bbl/d -- 9%), Qatar (0.9 million bbl/d -- 5%), and Bahrain (0.01 million bbl/d -- 0.1%).

Now let's take a look at what 2.6 million barrels of oil per day is really worth in term of "potential new Euro demand" anyway? Here is the math:

2,600,0000 x 60.00/barrel x 30 [days per month.] x 12 [months per yr.]


Now I don't know about you folks, but where I come from, 56 Billion still buys a whole lot of love and respect.

Now, Let's Take A Look At Venezuela

Let's get the lay of the land, so to speak, right from the horse's [Chavez's] mouth – 1.5 million barrels of Venezuelan crude [60 % of production] is currently purchased by the US of A each and every day. At 60.00 per barrel, this amounts to 60 x 1,500,000 x 30 [days per month] = 2.7 billion per month Worth of EUROS [32.4 BILLION WORTH ANNUALIZED]. This is simply the amount of Euros the US will need to purchase [read: print] or borrow to maintain its current quota of Venezuelan crude should Chavez sell all output for Euros. Additionally, the balance of Venezuelan crude will fetch another [60.00 x 1,000,000 x 30] = 1.8 billion per month worth of Euros the rest of the world will need to purchase said oil, or, A FURTHER 21.6 BILLION ANNUALIZED. So folks, cumulatively – in the case of Venezuela alone – we are potentially talking somewhere in the neighborhood of NEW DEMAND FOR EUROS OF 54 BILLION US DOLLAR EQUIVALENT PER YEAR.

Oh well, at least the Fed will save a few nickels and will no longer be publishing M3 [money supply] data. If you can't see the money printing – I guess it can't hurt you, eh?

Step A Little Further Back, Shall We?

In big round numbers, daily global oil production runs in the area of 82 million barrels of oil per day. The U.S. consumes approximately 20 million barrels of oil per day – yet only produces [domestically] about 5.4 million.

How often are we bombarded with the "clap trap" – not to worry - that rising crude oil prices self serve to reduce demand [consumption]? Seems to me, forever! Meanwhile, the empirical realities suggest COMPLETELY THE OPPOSITE where oil is concerned. LOOK AT THE GRAPH!

Compliments: M.W.Hodges, The Grandfather Report

While the price of crude oil has increased dramatically over the past 5 years – U.S. consumption has factually grown. Also, by looking at the production line in the chart above – we have a crystal clear illustration of exactly what "Peak Oil" really is – right in front of our noses!

Imagine, main stream pundits continue to speak of interest rate conundrums without even mentioning the 300+ TRILLION U.S. GORILLA [interest rate derivatives – swaps] sitting on top of the interest rate complex. Why has no one stopped to investigate or explain the cancerous growth [123 Trillion at Q3/03 – now exceeding 300 Trillion [Q3/05] - pg. 47 of 126]? Also, the most recent rise in the price of gold – the main stream media would have us believe it is wholly attributable to increased nuclear tensions with Iran – failing to mention a well documented 16,000ish ton short of physical metal on the part of Western Central Banks?

In addition, has anyone not noticed that while "officially" inflation continues to be reported in benign terms [around 2% - core rate?] – the cost of virtually EVERYTHING [except DVD players] from health care to insurance/professional premiums to copper to real estate and municipal taxes keeps going up?

Misreporting, denial and refusal to admit that our markets have been hijacked - rigged and ‘stick handled’ is EXACTLY WHAT HAS CREATED THE BULK OF THE PROBLEMS WE NOW FIND OURSELVES FACING. Oil is slated to begin trading for Petro-Euros on March 20, 2006.

Put simply, we just don't have much time left to "start getting it right". In Fed ‘baseball parlance’ – it's the bottom of the ninth, the count is full and the sacs are drunk - but does anyone really know what the score is?


Perhaps more than just the "sacs" are drunk? Is that a light at the end of the tunnel, or just an oncoming train?

PRITCHOFrom Richard Russells Latest Comments (Jan 18th) - -and A Reply to Buongiorno re post 140602#1406271/19/06; 03:09:45

I thought it very interesting that RR highlighted the article below in his comments & called it a mind-blower.I agree with Belgian that most here had the gist of it a long time ago.Seeing it spelt out so clearly though made it worth reading -again!
Speaking of oil (and I'll be speaking lot about oil), I urge all subscribers to turn to the Gold-Eagle site and read carefully the article, "The Proposed Iranian Oil Bourse." by Krassimar Petrov. This is a most important article, actually a mind-blower.

Question -- Russell, you've talked a lot about gold and oil, and you've shown charts of the dollar and you've talked about the dollar. How do you feel about the dollar?

Answer -- Interesting question. For the first time since I started investing back in the mid-1940's I find that I feel "nervous" about the dollar. Maybe I'm just a nervous kind of guy, but I've never felt this way before about holding dollars. Honestly, there are just a lot of things about the dollar and the background of the dollar that bother the heck out of me.

What this has done is that it has moved me into a larger position in both gold and oil than I would normally take. You see, I've reversed the situation, and now I ask myself, "Just how big a position in dollars am I willing to hold? Or do I feel SAFER in gold and gold shares and oil stocks? And my answer to myself is that I definitely feel safer in gold, the metal, than I do in dollars. And yeah, that's a NEW feeling, but to tell you the truth -- I really don't feel comfortable holding "too many" dollars.

Furthermore, the current veritable explosion in the M-3 money supply worries me. The money supply is rocketing higher today while business is still good. What will the Fed do if business begins to slump, say this year or next? Yeah, the truth -- today I feel safer in gold than in dollars.
As for the Buongiorno! post:(Usual neocon rubbish repeated)
"Delivery systems are the reason I fear a nuclear Iran more than Iraq. My limited understanding is that Iran has some missiles that would certainly threaten Israel and Europe--possibly the US. Others? "
Reply In a Nutshell:
Nuclear Weapons Count - - Who's the danger?

USA - - -- - 10,350!

Israel -- - 200 plus

Iran - - - 0

Ahmadinejad was democratically elected, but since taking office, he has ignited an international firestorm by saying Israel should be "wiped off the map" and calling the Jewish holocaust "a myth." He was actually taken out of context as he was referring to the words of a previous religious leader. No matter, he has not backed away & clearly believes that Iran should not be dictated to by Washington or its pit bull nominee Israel.(I agree)

Clearly, a leader who utters such "dangerous nonsense" as Ahmadinejad cannot be trusted with nuclear weapons. Iranians would reply that, unlike the U.S., Iran has not invaded any other countries. Speaking of dangerous nonsense, was it not U.S. President George Bush who claimed Iraq had WMDs that menaced the world? Or that Iraqi germ-dispensing drones were poised to attack a sleeping America?

I hope not to make a profit on PRECIOUS METALS because of more suffering from a 3rd world country.Pity others weren't so predisposed.

BelgianFreegold#1406281/19/06; 04:40:17

When the entire world CAN go "out" of the dollar..."into" gold, you have FREEGOLD ! Emphasis on - can go-.
This wasn't possible in the period 1957 - 1974. Today one can.

bskijaTrucks and Helicopters#1406291/19/06; 05:15:55

Trucks and Helicopters
(Yesterday) When I say trucks and Bernanke says helicopters, we don't mean trucks and helicopters. In my writing I'm saying what would happen if the world loses faith in the dollar in a risible way. With Bernanke's helicopters, he is saying seriously that he will fight inflation with no holds barred. There will no trucks or helicopters involved.

Buongiorno!Pritcho 627#1406301/19/06; 09:24:15

Concur with Russell--usually do.

You are another matter. "Neocon rubbish" may be a violation of forum decorum, or do mannerly forms of address only apply to those with whom we agree? We shall see. By the way, how IS the view from the top of your nice mountain?

The nice statistics on nuclear weapons miss the point---we don't WANT Iran to get them, get it? N. Korea was not on your list. They are thought to have several weapons now which they did not possess some few years back. Now, which snake would you rather deal with? (With, or without?)

Given your weak excuses for Mr. Ahmadinejaid, I can never understand why some folks deem to dislike their friends and love nut case dictators.

"Iran has not invaded any countries...."---uh, not lately. (Think of them as Persia....)

"I hope not to make profits from the suffering of others...." So it is back to the top of the mountain, is it? (Might want some eyeglasses for that smug myopia.)

No one wants others to suffer. But, most of us have no power to change anything, just to prepare as best we can. If we see a train wreck coming and get off that train,we take no joy in being correct. Just glad to get off that train. Islamo-fascists are taught to hate us deeply. I wish it were otherwise. Once, a great battles were fought at Port Moresby and Coral Sea. Glad we sorta won. Sorry the twin towers got hit. Would not like to see that kind of hate backed by nuclear weapons--anywhere!

What shall I do? Picks me up a few scraps of gold and silver when fortunate enough to do so and hope the train wreck never happens. Puts me hope in one hand, the gold in the other, though.

Gandalf the WhiteLooks as if "VOLATILITY" is the norm now ! <;-)#1406311/19/06; 10:55:15

Nice US$ WATERFALL today !

CopperfieldWhen people in High places openly predict doom and gloom..#1406321/19/06; 10:57:49

Dutch finance minister Zalm warns in newspaper dollar could slide and throw The Netherlands/EU in severe economic crisis.

URL in Dutch..

Gandalf the WhiteTodays Non-prize "Question" ! <;-)#1406331/19/06; 11:01:35

How soon will this VOLATILITY bring the "LIMIT UP" move ?US$17 moves are "nice" ! <;-)
BelgianToday#1406341/19/06; 11:16:13

JPMorgan/C : The goldprice started to rise in a currency decoupled the time of the French -Non- !? Funny connection. Was immidiately remembering J.Rueff.

Copperfield : Zalm >>> This pinball player knows exactly what is going on, now...and knows the monetary system's history of the past 60 years. It was already broke...then !
And why isn't he profiting from the occasion to tell us why the euro exchange rate isn't rising against the dollar !? Zalm knows all the details that happened during the London Gold Pool episode.

CNBC : Osama tapes and the financial framing that goes with it. What a perfect world !?

GoldiloxNorth Korea and NeoCons#1406351/19/06; 11:40:40

@ Bongiorno,

One must question if North Korea would even have nuclear weapons if Rumsfeld hadn't so greedily sold them a reactor from his "Swiss" company in the 90's. Now he wants the US government to buy $7.5B worth of his "Tamiflu" to stockpile, and his Gilead Sci stock is acting like Google. It also doesn't take a lot of research to remember that Saddam wouldn't have even been in power or had WMDs if he wasn't on the NeoCon's "good guy" list for 25 years. They overturned a "democratically" elected government to insert "their guy" Saddam, just as they trained and funded Bin Laden to create resistance in Afghanistan.

The NeoCons don't seem as interested in protecting Americans, as much as propping up their own investments. That's why Halliburton not only gets no-bid contracts in Iraq, but in New Orleans, as well - using imported Mexican labor. American labor is finding it hard to compete with the "foreign labor" Neo-NewOrleans.

If the west was REALLY interested in non-proliferation, ALL the non-signatories would be pressured into compliance, not just the ones with coveted resources.

Market stabilization can only happen in concert with political stabilization, not by continuing to send "black ops teams" all over the world to foment revolutions and sponsor "terrorist events".

We seem to be witnessing a repeat of the financial collapse of 1929, where a decade of war buildup was the best answer the various political controllers could come up with to "fix" the world economic issues.

Off-topic? not entirely, as all markets, including gold, are reacting to the war threats, just as gold reacted fairly violently in 2003 for the Iraq "threat".

Belgian@Gandalf#1406361/19/06; 11:53:35

No limits up anymore, only limits down. Nobody ever found out what that $6 limit exactly was and more importantly, who was using it.
Once beyond $600/ will find an open space. Then, very little metal will be available for individuals and states. Because the goldprice's behavior will be such that all become a "flatliner" and refuse to sell any.

Flatliner‘become a "flatliner" and refuse to sell any.’#1406371/19/06; 12:17:59


Yesterday we heard that Iran says it's ready to repatriate oil earnings. Does this mean they will sell US dollars and buy their own currency? Or does it mean that they will sell US dollars and buy… gold? I'm leaning towards the latter.

I'm also curious for the first day of February. With all the funds running towards gold, it will be very interesting to see how many take delivery. We all know that all it takes is one ‘Big Trader’ to break the link between the paper markets and the physical market. Could it be that Iran gets backed into this corner? We all know what happens when confidence is lost…

I lost confidence a long time ago, thus, to me, gold is way more valuable then any paper dollar. Unless the conditions in the world change significantly, I may never sell my gold again and others may take the same opinion.

overtonAll the more reason to incease your AU holdings#1406391/19/06; 12:32:07

Constituion is sliiping away

MKUpdate: Gold breaks the glass ceiling. What does this mean for the average investor?#1406401/19/06; 12:39:38

There's one thing we have to keep in mind as gold breaks through the glass ceiling: It has been artficially held down through one machination or another for a good many years.** Those numbed by gold's rise and unable to act should keep that historical fact in mind. Under any of the correlations we hold dear with respect to gold price analysis, where would gold be trading today if nothing would have stood in its way over all these years? THAT above all should be primary in any potential gold owners analysis. $600? $700?? $800??? $2000???? The number is essentially irrelevant. Please read on!

As I have mentioned here before, the cyclical retracement for which some might be hoping may not come until we once again attain the old highs near the $900 mark. The slight retracements -- like the one before this rocket shot -- should be viewed as purchasing opportunities. The real mission for most investors is to protect one's hard-earned (won) wealth through the ownership of the most direct representation of wealth itself -- gold.

Those waiting for that long, deep correction may be waiting a long time simply because rising gold could very well be part of a much bigger cycle than most market observers have factored-in. As Elliot taught us there are cycles, cycles within cycles and then cycles over the long term which over-ride all. We are likely in one of those super cycles now.

Gold is now reacting to a confluence of factors -- too numerous to summarize without diluting my essential message. Let's look at the bigger picture. Those of you who know me and have read my work over the years know that I put a great deal of stock in the notion that markets, including the gold market, are largely governed by crowd (mass) behavior, and that overrides all else, including government intervention (any government's intervention). Charles Mackay's "Extraordinary Delusions or the Madness of Crowds" remains now -- 250+ years later -- the seminal work on market behavior as an integer of human behavior (It is available at our Gilded Opinion page linked above) for anyone looking for some grounding on this subject. The changes in progress now having to do with the dollar, gold -- in fact all paper currencies -- is pervasive, a generational change in attitude a long time in incubation but now making itself known. That is why you have so many msp's commenting on gold's "inexplicable" behavior.

Along these lines, the stock market panic in Tokyo over the past two days took the financial community by surprise and showed just how vulnerable stock and bond markets really are -- including the U.S. markets. We also have the reports of the losses at JP Morgan's trading desk in this morning's reports. Why did this loss occur? It occured, in my view, because some fundamental changes have taken root in the financial markets and JPM was taken by surprise. The way the players used to play the game no longer produces the same old winning percentages. JP Morgan was playing the old market; we are in a new market. The result has been and will continue to be a change of psychology and strategies more suited to the new venue. Without putting too much emphasis on this change with respect to the complexities of the gold market, my take is that this will be enough to put a rising floor under the gold market which will likely cover a great deal of price territory on the upside.

I said gold was cheap at $250; repeated that at $350 and $450 and say the same as we blow past $550. These are cheap prices relative to the massive dollar obligations and balances at loose in the world economy; cheap compared to the changing international financial psychology.

I was interviewed by CBS News (for gold market background) a couple of days ago and was asked when should an investor buy gold. I answered that the way I always answer it: Gold is not like other investments; in fact it isn't really an investment at all. It is an insurance policy against the deprivations and dangers of politically motivated paper currency values. One doesn't buy gold to make money. One buys gold to preserve what one already has.

There is no right price. The only real question is whether or not one has enough to weather the storm. If you have no gold or you need more, it is ridiculous to think that this price is too high in the fact of what is happening in the world economy. Price is relative, but gold's mission is unchanging. If you believe that the world economy will stumble through just fine, stick with your dollar (yen, euro et al) savings and investments. If you believe otherwise make the change. Price is not an issue. Your financial well-being is.

** I don't want to once again enumerate those machinations. If you are new here and in the dark on this subject, I would suggest a visit to our archives, the Gilded Opinion page, the Gold Trail, et al for background.

bskijaSale on Gold Eagles#1406411/19/06; 12:43:51

Flatliner, you will have to be prepared to pay more for the one oz. Eagles. If you have dollars guaranteed to provide me with 100 cents of current purchasing power the sale price is $556. If you delay and the dollar has only one cent of purchasing power in the future the sale price currently will be 55,600 dollars and not a penny less. Regarding your premise that the big boys will be skunked because you are paying your debt with cheap money, I believe that it will be snowing in mythical hell before the little guy can skunk the big boys. Everybody will suffer here and abroad because the US is the major engine in the world's economy. It will be all currencies that will suffer not only the dollar. Only the pope doesn't have an eraser on the end of his pencil so I'm not infallible, but I believe that the dollar will drop in value but not to the extent of creating total chaos through out the world.
Goldilox"Investing" vs. "Insurance"#1406421/19/06; 12:48:01

Thanks MK for clarifying that again. I personally think it's the most misunderstood aspect of gold investing.

In this era of "savings" being nearly vilified by "easy money" and abusive credit scams, gold-in-hand just seems to be the only SAFE savings.

MKGoldilox#1406431/19/06; 13:11:09

Sorry for the repeat message for some here. There's always new people visiting and at important juncture's like today's the same-old same-old bears repeating for those who lose sight gold's essential mission. By the way, thanks for the updates you post. We all benefit from what you bring to this table.
968@ Sir MK#1406441/19/06; 13:53:06

Goodevening Sir MK,

"Gold is not like other investments; in fact it isn't really an investment at all. It is an insurance policy against the deprivations and dangers of politically motivated paper currency values."

The impression this statement gives me, is that gold is nothing more then a dollar-hedge, or a put option on the dollar.
Let's imagine that there is a perfectly managed paper currency, then the people who hold this currency don't need to own physical gold ?

"These are cheap prices relative to the massive dollar obligations and balances at loose in the world economy; cheap compared to the changing international financial psychology."

Can you elaborate on the changing international financial psychology, please ?
How does all this fits in the massive gold shortpositions (Deutsche Bank,...) you mentioned a few months ago ?

Or do I misunderstand your statements ?
Thanks in advance for your insights !

Kind regards,

GoldiloxNo, Thank you!#1406451/19/06; 13:53:57

@ MK,

Thank you for sponsoring this outlet of information interchange.

It appears that 2006 is off and running with a lot of political, financial, and market turmoil everywhere we look, and we here at the forum probably get the broadest available perspective on the machinations of "the man behind the curtain" - the one the Wizard says we should pay no attention to!

Keeping one's "eye on the prize" is often difficult, but oh, so important in times like these.

MK968#1406461/19/06; 14:20:44

"Imagine that there is a perfectly managed paper currency."

You reveal much of yourself when you ask something like that. I'm sorry but I do not imagine such things. It's a waste of my time.

GoldiloxWizards of Money#1406471/19/06; 15:31:44

After disappearing since 2003, Smithy's "Wizards of Money" Tutorial on how money is created and manipulated has been recollated at this URL. It is one of the best available lay person's descriptions of the wizardry of banking, as reflected in its title, and the editors have included it with some other very meaty titles.

One of my favorites on this MLK holiday week, is her analysis of the MLK speech on abusive RE lending practices in Atlanta in WOM#3, "Banking on Poverty". While winning the Nobel Peace prize, and having a holiday named after him for civil rights activities, most people are not at all aware that MLK was a severe critic of banking and RE practices in ghetto neighborhoods.

I have not found a better source for learning about how banking "works". Make sure you set aside some listening time, as it is lengthy, but well organized and well documented.

bskijaGold and Paper#1406481/19/06; 15:41:20

I doubt that gold will ever replace paper money. It would be like a car that has no brakes or steering wheel. One can accumulate wealth with gold. Since 1997 my average annual return has been 11.89% and since 2002 my return has been 79% on the gold Eagles I purchased the year of 2002. Gold has many enemies such as the Central Banks and most of the big boys. In the old days the Central Banks would buy gold when supply was greater than demand and sell gold when demand was larger than supply to keep the price under control. Because there were horrendous losses by some of the big boys that threaten to bring the world's economy down to a level that would make 1930s look like an era of prosperity during the 1980s and 1990s, the Central Banks raided the cookie jar.
Some of the cookies were gold. In order to stay alive the gold mining folks stopped exploration for gold and mined the good stuff near the ground, leaving the bad stuff deep in the ground for later when the price to do so was justified. Exploration for gold takes five to ten years before the bacon is brought to the table. Instead the gold companies are swallowing up other gold companies to keep their supply flowing. The supply can't keep up with the demand and the Central Banks apparently don't have enough gold to attenuate the price of gold. I often wonder if Fort Knox is as empty as Old Mother Hubbard's cup-board.

BoilermakerGolden Insurance#1406491/19/06; 16:05:50

MK, 968, Goldi, all,
For me, gold is life insurance against the death of the $ as the world's reserve currency. I forsee a new reserve regime that recognizes gold as the necessary major component in a central bank's reserves. Instead of the typical 10 or 15% gold component, gold will become the 85 to 90% component. This will occur by virtue of a real decline in the $ and a real appreciation of gold vis-a-vis other assets. Basically I expect a 90% decline in the purchasing power of the $ and a 5-times increase in the purchasing power of gold. Together this implies a forty-fold increase in gold vs the $. This adjustment will automatically result in the reserve ratios noted above without the need for major central bank gold aquisitions except for countries like China and Japan that are woefully under-insured.
If you subscribe to some version of this scenario then you might, as I do, view your gold as insurance with a big kicker.

NedWhat's the truce?#1406501/19/06; 16:15:29


"Further adding support Thursday, apparently al-Qaida's Osama bin Laden warned of fresh terrorist attacks against America. The threat came in a audiotape broadcast by Arab TV network Al-Jazeera, reports said. Bin Laden also reportedly offered a truce."

-sorry, no link-

BelgianGold#1406511/19/06; 16:16:26

If gold is an insurance...then who is the insurance company and how does this insurance "works" ?
BelgianNed#1406521/19/06; 16:20:25

To which bin laden are you asking the answer on your question ? (-:^:-)
Boilermaker@Belgian#1406531/19/06; 16:26:53

For me, using the term "insurance" for gold is one way to describe it as an alternative to currency, specifically for the preservation of wealth. If it also has the potential of appreciation against other assets that is an added benefit. There is no risk of default by an insurance company, ie., the $, and the premium is paid only once.
Black Blade"Portfolio Insurance"#1406541/19/06; 16:38:25

Some good discussion lately. Precious metals are "portfolio insurance" and they have performed very well. The recent volatility is interesting as funds have been in and out of the market only to reenter again. However, even as the funds try to push the price around we should take notice that we are hitting higher highs and higher lows. This is a secular bull market that will last years if not decades.

As the stock indices have been rather stagnant I have to point out that the biggest problem for the markets now are the "twin deficits" that are ravaging the US Dollar. It is somewhat amusing that the carnival barkers talk up the "strength of the US dollar". Whatever happened to that "strong dollar policy" anyway? The administration, and particularly treasury Secretary John Snow, has been noticeably silent on this. Warren Buffett (aka "The Oracle Of Omaha") recently spoke out on the trade deficit as the biggest threat to the dollar. I would have to agree but the budget deficit and lack of savings among consumers must also be considered.

Gold and Silver are not only hedges against a weakened US dollar, but are a hedge against a weak stock market and rising inflation. Also keep an eye on "real rates" (real inflation minus the Fed rate). When the "real rate" is very low or negative as now then it is important to consider hard assets for "portfolio insurance". I always get a chuckle when I hear the carnival barkers tell us that precious metals are a terrible investment. Where have they been the last five years? Maybe they are right in a sense because I consider precious metals as "insurance" rather than what is normally considered as an investment. Sure precious metals can be an investment but more as an investment against economic and geopolitical turmoil.

Is Gold still a buy at these higher prices? Damn straight! Gold remains grossly undervalued and the basic supply-demand fundamentals are very strong. Now with liberalized Gold ownership in China, rising demand in India and the Middle East we won't see any meaningful addition to supply for the next several years. It takes years to explore, permit, and start construction on new mines, and that is before the first dore is poured from production. And Central Bank sales? Forget it! Central Bank gold rarely if ever makes it to the open market but are merely transfers from institution to another. Also note that the "Gold Carry" trade is dead with these low interest rates and besides, too many producers have been badly burned on these deals. Even the mega-hedgers are struggling to unload these burdens as fast as they can.

Still holding Gold and Silver as "portfolio insurance" myself. It has been a very good move for me.

- Black Blade

Cometosegoldprice////// #1406551/19/06; 17:00:23

Noticed quite a bit of reference in MK's address re: his CBS Interview and thought about the most recent Hamilton
article ........see below

He said the relative gold is still CHEAP
The 950 Peak in prices equates to in excess of 2000 present day dollars............

He presented analysis that states that in REAL DOLLAR terms the recent high in Real Dollar is not 25 years but 13 years.............

We haven't even got started on Phase II yet..........

In light of Japan's recent bump in the road ........and their long lasting love affair with Gold as well as Platinum and the Chinese proclivity toward the same .., even platinum may be cheap and those two nations may take them up as well into the stratosphere.

THe underlying fundamentals of this BUll are much different than those of the late 70's .........Oil cannot come down ....and because of BLACK GOLD'S RELATIONSHIP TO
THE METAL ........the prices ahead of us may not be undone as easily as they were in the days of The Former FED Chairman .......

For many here and for many that read these pages...(fortunate) ....what is unfolding is going to be a permanent life changing event........It's nice to look like a genius .......I prefer the comfort derived from seeing the market (look) .......over the effect of the other look .

I beieve our great fortune is to have this pages at our disposal for all these years. Happy NEW YEAR to the Staff .


ThoreaulyTaking equity out of your house to buy gold#1406561/19/06; 17:01:05

I would be interested to know what you folks think about this idea. I own my house free and clear, its market price having increased around $125,000 since I bought it in 2000. Assuming that it's market price has peaked, and believing that gold is still dirt cheap, wouldn't I be wise to up my gold holdings in this manner?
David LinkleyWhat's changed?#1406571/19/06; 17:26:21

Gold continues its relentless climb and laughs off all attempts at top calling and the COT theatrics. Clearly some very large entity or entities is currently buying all the dips and then some. Many expanations abound including the fine writings of Belgian on this board. Is this the beginning of a panic into gold by those who realize just how short the physical supply is or an end of January short squeeze? The one constant to me is the relentless expansion of the money supply in an attempt to hold the world economic system afloat. I agree with MK that all of the factors for the rise are too numerous to mention but Warren Buffett mentioned yesterday that a sharp adjustment along with severe political consequences as a result of the trade deficit are not too far off. The message is - get gold now while it's cheap and available. "Tommorrow" is almost certainly going to look much different than today's complacent activity.
CometoseThoreauly/ equity out of your house#1406581/19/06; 17:27:13

Good Thinking..........

I took all the cash out of my life insurance policy and went to debt to finance a gold purchase 2/3 years ago in approximately the same amount .

Now paying it back from other sources to the insurance co that my insurance equity can now fund sll future premiums.......

Beer ManValue of GOLD over Time ??????#1406591/19/06; 18:05:35

I Know this may sound foolish ..... but when Gold hit $300 for ( real, to my door ) .. the only kind ... I thought I would slow down ... & knew at the time it was A BAD IDEA ... That I would look back & think how cheap it was & that I should have been getting it with Both Hands!! I was Right & wrong at the same time ..... the good news is it didnt take long to get back on track ...... Say Yes!! I have seen many things ( realestate ) do that for many years ... Yes I think TO The Moon !!!!!!
RadThoreauly/ equity out of your house#1406601/19/06; 18:18:26

I did it. It felt like a crazy thing to do, but I reasoned (right or wrong) that it was a wise thing to do given our circumstances. I put it in play in early November, by chance the same time the FED gave the discontinuing M3 announcement. It has been working out well. I have no trouble servicing the debt but haven't had a high paying job long enough to have a wad of cash saved. Also, Bush is helping me pay it off by devaluing our currency.
USAGOLD Daily Market ReportPage Update!#1406611/19/06; 18:28:23">
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.

THRUSDAY Market Excerpts

Gold futures end with $15 gain

January 19 (from MarketWatch) -- Gold futures climbed almost $15 an ounce Thursday, erasing the prior session's losses on the heels of concerns about volatility in energy prices and news of a purported al-Qaida threat against the United States.

COMEX February gold contracts closed up $14.50 at $559 an ounce after touching an intraday high of $559.70.

On Wednesday, gold was also caught up in the turmoil in the Japanese stock market, where trading ended before its regularly scheduled close as a flood of orders threatened to overwhelm the Tokyo Stock Exchange's systems.

The sell-off was triggered in part by a raid on Internet portal Livedoor. Traders said that gold got swept up in the volatility as funds liquidated futures positions to meet margin calls on equity positions.

"We saw little evidence yesterday that the Godzilla-size footprints of funds bailing out of gold was present," said Jon Nadler, an investment products analyst at bullion dealers Kitco. "We did see evidence overnight that millions of tiny [individual-investor] footprints make for an equal-size impact on gold -- in the opposite direction."

According to Julian Phillips of, overall, "this accelerated climb up a net $60 since December is symptomatic of the ongoing evolution of the gold market to a broader-based alternative to currencies in an increasingly uncertain global environment."

Further adding support Thursday, apparently al-Qaida's Osama bin Laden warned of fresh terrorist attacks against America. The threat came in a audiotape broadcast by Arab TV network Al-Jazeera, reports said. Bin Laden also reportedly offered a truce.

"I think it's just another log on the fire -- al-Qaida, Iran, crude and the fact the foreign central banks are shying away the dollar and the commodity funds are chasing another hot market," said Charles Nedoss, an analyst at Peak Trading Group.

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

Ned@ Thoreauly#1406621/19/06; 18:30:00

I'll trump all of that.

I feel the housing market is toppy so I'm going to sell high, rent and buy gold low.

Beer ManPrice of G vs R#1406631/19/06; 18:49:30

I think the realestate value is mostly tied to location & dont think it will ALL go up or down .... I took a Zero rate card & did the same not too long ago .. glad I did .. when asked buy a friend at work that started to see the light .. how much do you have .. the answer was Lb.s not Oz.s ..... All is Well
MKBelgian#1406641/19/06; 19:12:43

The insurance company?

The millions across the globe who understand that gold transcends paper currrencies and preserves their hard earned wealth (large or small) no matter what government (including the European variety) does to their money.

How it "works"?

I suggest the link above. (In case you've forgotten.) I also suggest (humbly) "The ABCs of Gold Investing: How to Protect and Build Your Wealth with Gold" where my ideas are developed in more detail. I have also written a great many articles and essays with which you may be familiar ( a Google search will help you in this regard. My most recent efforts are available at our Daily Market Report page linked at the top of the page.) No point in rewriting what's already been done. If you are not familiar with the situation at Deutschbank, I would suggest starting with the Bankers' Trust merger some years ago and working your way forward.

With respect,

GoldiloxCarnie Hawks#1406651/19/06; 19:17:07

@ BB,

"I always get a chuckle when I hear the carnival barkers tell us that precious metals are a terrible investment."

Perhaps because they view "investment" as a "bet", not an asset.

Why else would 80-90% of all market activity be in "derivatives"?

MKSorry, Belgian#1406661/19/06; 19:31:12

The last sentence in my post below is directed to 968. I got confused between you there.
OvSMK vs. Belgian.#1406671/19/06; 19:35:43

If gold is insurance
then this insurance
protects your wealth?
Come again...

SmeagolPerhapss one could say....#1406681/19/06; 19:58:30

...that It is Wealth which among many uses may be called upon as insurance in troublous times. You hold this golden "policy", which at your option may be "exercised" or cashed out under terms which you decide the "policy" covers.


OvSYes, Deutsche Bank.#1406691/19/06; 20:01:27

Certain "friendly" cousins
planted that Trojan Horse
called Bankers Trust into
Deutsche Bank just as those
"friendly" cousins planted
Marathon Oil into DuPont.
It's a well known technique
to take over "Troy". All of
sudden, Citi(bank)Group is
ready to take over the heart
of European business...more
power to them. Just shows that
trusting and highflying ueber-
managers are a little on the
slow side. OK, CB2? Yours,OvS

OvSOK, Smeagol#1406701/19/06; 20:08:57

That was the "old" way.
The "new dawn" proclaims:
Gold "insures" wealth-

GoldiloxBlack Gold - US Dollar Hegemony#1406711/19/06; 21:16:57


There is the distinct possibility that the often talked of "powers that be" are not the individuals that most consider them to be. They are not Presidents of Nations, although they may do their bidding. They are not Kings and Queens, although they may do their bidding. They are not the mightiest military powers, although they may do their bidding.

They are so subtle and powerful that they often support both sides in international disagreements, waiting to the last second to remove their support from one side – tipping the balance of power.

They are so powerful they created the concept and working structure of central banking. If money is truly the sinew of war – then he who controls the money, controls war, and the outcome of war. Are there those who profit from war – the merchants of death?

So perhaps we should not be so quick to believe everything we read, as who owns most if not all of the major media outlets. Perhaps the Iranian Bourse will come to be. Perhaps it will have an affect on the value of the dollar - perhaps not.

Might there be those who would like to see the U.S. dollar collapse? Might there be those powerful enough to set up the Iranian Bourse or anyone else they care to, to take the fall?

Did we not just read a very highly regarded paper on Petrodollar Warfare that talked of such.

Furthermore, what of the euro – has it just happened upon the world stage without a lot of forethought and planning? Who was the force and power behind all that planning, and what fore?

Could the euro and euro-land be a prototype of a New World Order? Why has Britain been so reluctant to join? Who resides in the innermost circle? Cui Bono.

Nevertheless, one thing is almost certain – nothing will happen that is not directed to happen – by the board of directors of the New World Order.


This is very powerful (and long) discussion of IRAN as it relates to the total global oil market and global power jockeying. What is really telling to me is that an article of this persuasion would NOT have appeared on a conservative site like FSO two years ago. The mind set of the "investing herd" appears to be changing!

TownCrierA tale told by numbers#1406721/19/06; 22:32:12

The Wholesale Price Index as documented for the fateful decade preceding the "Nightmare German Hyperinflation" provides a sobering reminder, as recently reiterated by MK, that waiting to choose an auspicious entry point (a 'cheaper' gold price) can easily become a fool's errand when, in fact, the more important task at hand is simply to accomplish (without any further excuses for delay) ownership of gold metal commensurate with a level of savings (true savings) actually befitting your life's achievements. Otherwise, procrastination and a 'trading' mentality can put it all up in smoke like so much paper and ill-founded promise.

Turning now to the German example, with July 1914 as the benchmark, one ounce of gold had a corresponding price of 86.8 marks from the Reichsbank.

To show how quickly things got out of hand, and the relative futility of "bargain shopping", the following is a tabulation of what the price of single ounce of gold would have been at steps along the way were it to be floating independently right along in response typical with other wholesale prices of the period.

July 1914 -- 86.8 reichsmarks

Jan 1919 -- 225.7 reichsmarks
July 1919 -- 295.1

Jan 1920 -- 1,093.7

Jan 1921 -- 1,249.9
July 1921 -- 1,241.2

Jan 1922 -- 3,185.6
July 1922 -- 8,732.1

Jan 1923 -- 241,735
July 1923 -- 16,839,200
Nov 1923 -- 63,016,800,000,000 reichsmarks

During the eight year period from July 1914 to July 1922, the reichsmark price of gold increases 'only' by a factor of 100 (and dissuading how many from choosing "expensive" gold, we wonder), but during the short timespan of the following singlular year, to July 1923, the price of gold jumps by an additional factor of nearly 2,000!

And then, in the following blowout to November 1923, with one look at the price it should become very apparent that all former thoughts of trading in and out of gold in pursuit of a paper (monetary) profit were but a frivolous misplacement of understanding, and that any given currency unit, receivable at it's price for gold, is somewhat superficial like the number of candles and color of icing on a cake -- whereas the gold itself IS the cake AND the icing AND the candles.

The choice is yours. You can wait, foolishly cakeless, until there are more and more candles on the cake and the baker has a long waiting list, or you act now with aplomb and put your current currency's purchasing power into action -- by using it to buy gold you can HAVE your cake, and EAT it, too.

("Eating" it means you've successfully consumed/used/digested the purchasing power of your holdings of money which was otherwise at risk of wasting away; and still "having" it means that your ownership of gold metal always provides you easy access to full-bodied purchasing power at any future time that you might desire to tap into it.)


FlatlinerSlow and steady?#1406731/19/06; 22:38:04

Belgian, For weeks now I have been more then puzzled by your insistence that the rise in gold price will be orderly. I still wonder, but a few minutes ago, I may have stumbled across a clue that questioned my own chaos theory flipping it a little more your way. It seems obviously simple too.

As everyone knows, once you get into an investment position, you either go long or short. When you select a side, you usually push your point of view knowing all along that anyone else joining your side will help move it one-step closer to reality. If you are an individual investor, you might be able to convince a person or two, but usually not many.
If you're an investment house, you've got hundreds of brokers with hundreds of clients and a "top notch" group of analysts on your side. As the house, when you push your point of view, people buy or sell on your recommendation. Or, better yet, sense I know I'll find resistance here with that statement, ‘Sheepeople’ will buy or sell based on the recommendation from the house.

We all know that there is a short squeeze going on in the gold market. The bullion banks are on the short side for thousands of tonnes. They… are also the house. It would seem to me that speaking negative about the precious metals would clearly be in their best interest. I would expect that every report from any brokerage house that has any connection to a house with any short position will have nothing but negative information to share with the public.

It gets even better then that. Anyone that has ever studied the marketing used in Hollywood will know that any publicity is good publicity. Why do ‘Stars’ do something stupid only days before their art hits the market? Whether it's running off for a quickie three day marriage or throwing a phone at someone, it draws attention to them. In the gold world, if you're the house, you're going to do everything that you can to not say a word. You don't want any attention. None.

It seems that there are three possible outcomes. 1) The price stays down and over time the banks are able to work out of the contracts. 2) The price goes up like gangbusters and the fraud of the entire system is exposed for what it is or, 3) the price goes up slowly, the banks take loses but not too much while working out of the market and the fraud remains – to some degree – hidden from sight.

Case 1 is no longer an option so we're fighting between 2 and 3. Back in December, we saw speculators in Japan get blitzed with a 50 buck drop and a change of rules thus leading me to believe that there is still some control capping the gangbusters approach. At the same time, all the propaganda that comes out of brokerage houses is still bearish on metals. But, more importantly, metals are "unimportant". They have made it clear that it's not worth really talking about and they don't.

It will be interesting to watch this unfold in the next few months. Will the gold silence propaganda work? If so, we go the slow and steady stealthy path. If it doesn't, we go the chaos overnight path. If we go the overnight path, there is a high probability that the banks will be out of business, markets will shut down and our society will swing radically to an extreme that may be almost a complete breakdown.

I think the ‘Big Traders’ out there know how susceptible the system is and that it can be exposed any number of different ways. At the same time, all the bad guys lose if the fraud is exposed, thus it's in the bad guys interest to make sure the system isn't exposed. Thus, compromises must be made. Hopefully, we'll see the outcomes of some compromises is the immediate future to make sure we stay on the slow and steady path.

We watch a truly interesting battle. One must prepare for the worse and hope for the best. I'm looking forward to feedback from all.

Flatliner@Black Gold#1406741/19/06; 22:53:53

Goldilox, Very interesting lead. I found the following after skimming the article and followed the link (I've included it here). I was wondering why the natural gas prices came down so fast. It seems that logic applied in the gold market works in other markets also…

Suddenly in November of 2005, the Federal Reserve gave its Approval of proposal by JPMorgan Chase & Company (click link for Fed Document of approval) "for commodity trading activities, including physical transactions in energy-related ... JPM Chase also must notify the Federal Reserve Bank of New York..."
Even more sudden was the 40% drop in natural gas prices.

TownCrierEurosystem continues long trend, dishording foreign paper#1406751/19/06; 22:59:20

The consolidated weekly financial statement shows that while the eurosystem reallocated a half tonne (0.5t) of gold (EUR 7 million) during the past week, it again dishoarded a disproportionately larger stake in foreign currency, reducing its net position by EUR 0.6 billion.

Among assets, eurosystem gold and gold receivables now stand at EUR 163.797 billion, whereas the net position in foreign currency as a proportion of the total has slipped yet further, to EUR 161.1 billion.

^---(stats from this url... )---^

For full commentary on this situation, I would simply repeat verbatim my zesty offering of last week.

For that, see the earliest post of the day in the archives at the hyperlink given above. Click and scroll all the way down to....
TownCrier (1/12/06; 00:14MT - msg#: 140380)


GoldiloxA tale told by numbers#1406761/19/06; 23:37:26

@ TC,

For those who constantly say, "It can't happen here", I suggest you take a closer look at the graph of US debt, and then tell me it's not already happening here.

"You say 'hyperbole' and I say 'hyperbola',
Let's call the whole thing off!"

Belgian@Flatliner : orderly gold#1406771/20/06; 00:51:40

Because you also see gold as an are expecting a dramatic event...a disaster (strong currency depreciation), against which you have insured yourself. Once the disaster has happened, you cash your insurance (sell gold) and live on.
Some are even ready to take out equity (cannabalise assets) to acquire gold-insurance.

MK's insurance company > the planet's gold-holders > FAILED to insure all gold holders for the past 7 decades of permanent disaster > fiat depreciation !

Taking a fire insurance on your property, means you have a contract where everything is stipulated. Where is the contract of the gold-insurance ?

That's why I continue to elaborate on the "change" of gold's nature. Not a opaque insurance policy but a wealth reserve holding. And that's why gold will evolve as orderly as possible. You are permanently insuring against a permanent disaster that isn't performing > compensating for the damage > because the "complex" insurance company is permanently cheating you !

Those who want gold to stop being an insurance and change it into a wealth reserve ....are breaking with old gold !
They don't wish to be fooled anymore by the complex insurance company (individual and state gold-holders/pricers, a priori unreliable).

The google robot is not providing you (for obvious reasons of course) all the history of gold for the past 60 years.
Some libraries in lilliputan land Belgium, do have gold-history written down. Gold's future is already evolving, away from its impossible insurance nature to pursang wealth reserve. And for the time being, this evolves rather orderly. Do you agree ?

The essential difference between -insurance- and -wealth reserve- is NOT a semantic one ! Think deep about it as to make the right decisions for yourself whilst walking along the gold trail.

ski@Thoreauly #140656#1406781/20/06; 01:11:49

Enjoyed your question and the various responses. Want another view?

I have been working in the area of "other people's financial problems" for several years. A key observation is that, like snowflakes, NO TWO INDIVIDUALS HAVE THE SAME FINANCIAL STRUCTURE. I usually discuss financial issues and EVERYTHING ELSE that is near and dear to the individual, and his spouse, over a period of several hours before I dare to suggest the first move. Why do I do this? You can easily guess at a couple dozen accurate answers .... the central theme is: "Is the individual FULLY prepared to make this work"? Given what you have provided, the correct answer for one individual is YES. But for another, NO.

Said another way, you did not and can not provide nearly enough vital information for anyone to properly begin to answer your question. Furthermore, an otherwise useful forum like this is not suited for properly taking on such a complicated task.

Your "bait" was easy to take for some who visit here. However I liken the responses to that of a "Jailhouse Lawyer."

1. Sounds good
2. The advice is free
3. It is non-professional
4. The "lawyer" does not suffer any consequences if anything goes wrong
5. It usually does

You are thinking of making a very big decision that has the possibility of many large consequences. I hope you find the "right" answer that is perfectly suited for YOU!
Will keep you in my thoughts.

PRITCHOFrom Richard Russells Latest Remarks - - - -January 19, 2006#1406791/20/06; 03:46:30

Gold -- is moving with high volatility, rallying and declining as much as 1% a day. I've been watching the gold action, and I have a different take on gold action today. I now distrust and almost ignore the Commitment of Traders. Gold is too international. What does some businessman in China or some bride in India care about whether the Commercials are shorting gold or whether gold is overbought? What does a gold trader in Dubai care about the open interest in gold on the Comex? No, the gold market is totally international. The gold action has come down simply to world supply and demand. And the demand is growing.

Furthermore, I believe the gold mining crowd is finally starting to believe that the gold bear market is OVER. Thus, they are cutting back on their forward selling (shorting). They are starting to go with the flow, and the flow is bullish. So gold mines, no more shorting your own supply. Why? Because your supply is getting more profitable month after month after month.

I was looking at some central bank holdings of gold. The US leads the world with 261.8 million ounces of gold (assuming the gold is actually there). Germany has 110.1 mils, ounces. Switzerland has 41.8 mils. ounces. China with its 1.25 billion people has only 19.3 mils. ounces. India has 11.8 mils. ounces. Russia has 12.4 mils. ounces. And Britain, which stupidly sold most of its gold at much lower prices, is down to 10.0 mils. ounces of gold.
Must admit I'm really enjoying Gold's reluctance to go down

Belgian1976 - 7 and 8 Januari - Kingston-Jamaica#1406801/20/06; 04:07:27

The "principles" of the gold-accord were "confirmed"...and the G-10 "TRIED" to eliminate the knots as to force the implementation of the accords.
It was the very start of the re-organisation of the IMS...THE START !!!
Gold, as the former basis of internal money-circulation,... had to evolve " GRADUALLY " from then on an "INTERNATIONAL" basis (right Pritcho-post) !!!

The IMS needed a new anchor. The SDR's could only function...IF (!!!)...there would "remain" enough solidarity between the member states + the building of the IMF as a sort of world central bank.

Try to understand what this gradual "DEMONITIZATION" of gold is meaning, when thinking about the freegold wealth reserve concept.


GoldiloxMiners#1406811/20/06; 04:44:49

@ Pritcho,

"Furthermore, I believe the gold mining crowd is finally starting to believe that the gold bear market is OVER."

- And it only took a 120% rise for them to see it. How astute of them.

Ned@ Flatliner.......all#1406821/20/06; 05:03:59

Nice posts.....#140673 very good.

Wanna hear gloom and doom? After reading these forums and the J6P stories, the financial debtberg and the greed and corruption stories for 7 years I have come to a generalized conclusion.

Guys like you and I and perhaps most on this board are perhaps "okay" but mankind in general is destined to fail. The default position is to blow up. Man is too stupid, too reedy, too corrupt for all of this to work out. Simple example is this "peak oil" theory, "greenhouse effect" Kyoto accord business. We all know the planet is being 'raped' and we have a sick sense that the entire world needs to hold hands and 'fix' it. Instead, governments cannot agree and this 'accord' will fail and the planet will continue to degrade until finally the "last man standing wins".

It's a sorry story and as a consequence we will continue through the 'muddle through' economy and the muddle through society and then BOOM, TSWHTF, TEOTWAWKI.

Financial structures will implode, "peak oil" will be recognized, debtbergs will sink and under the cover of mayhem, bombs, LARGE bombs will be dropped.


Again, because MAN is too conceited to fix it. The default position is to screw it up......and screw it up large is what we are good at.


I'm sorry to say......soon. The RWE, IMVHO, will be upon us before 2010.

Have a golden day.

Caradoc@Goldilox#1406831/20/06; 05:04:11

You're right! The stocks are beginning to move and call options are sweet. Yes, they're only paper giving you the right to buy paper stock, but the greenies made in this quasi-imaginary realm convert quite nicely into real things like ounces of yellow, land, logs, solar panels, etc.

Thank you for the many links you've provided here.



GoldiloxFailure of gold insurance#1406841/20/06; 05:05:35

@ Belgian,

"MK's insurance company > the planet's gold-holders > FAILED to insure all gold holders for the past 7 decades of permanent disaster > fiat depreciation!"

Let's see - 7 decades ago, gold was "valued" at $35/oz, that being after FDR's swindle that gave it a 75% revalue overnight, so we could even start at $20/oz.

At today's $560 valuation (28x), I'd say the insurance function didn't do so badly over those seven decades. It may not have been optimal, but it also didn't require "leverage" - a combination of risk and "tax".

Even looking at 2000-2006, if one were to have started getting into insurance when signs of smoke and froth were gathering in the markets, we have:

DOW2000 (11K) = 45 oz Au
DOW2006 (11K) = 20 0z Au

I know you can enumerate entry points that yielded less appreciation, and in some extreme cases, even losses, but I'm measuring from the beginning of your range and from the point that most modern goldbugs began to take notice. Anyone who got into gold at $850 (1980) is akin to getting off the tracks after the train has passed, but may not feel so bad in a couple more months/years.

Using these metrics, I can't agree with your broad assessment that the insurance function completely failed all gold owners.

DruidBelgian (1/20/06; 00:51:40MT - msg#: 140677)#1406851/20/06; 07:14:48

Druid: Sir Belgian, just my thoughts concerning the discussion of gold as "insurance". As always, another opportunity for yours truly to better understand something about the concept of insurance. I think over the last few years under the existing paradigm of gold management as brought to us by the IMS, to view gold as insurance against the managed cycles of unabated fiat currency growth was the proper view. However, as we transition to ANTOHER paradigm where there might be some bumps along the way in trying to work through the affects of unabated fiat currency growth, the collective perspective concerning gold bullion will change from that of "insurance" to that of flat out wealth.

An insurance policy in its most rudimentary context is supposed to protect accumulated wealth and anticipate future wages, earnings, etc... Once exercised for that objective, the policyholder in this case is not around to enjoy the fruits of that accumulation. In this case and context, insurance is primarily used to guard against something, a potential catastrophe. Under the old paradigm, gold served this purpose masterfully as a way to protect accrued wealth, under this new emerging paradigm, gold will do this and so much more as people's collective views will change accordingly. I could be completely wrong but this is how I view the discussion. Thanks.

DruidDruid (1/20/06; 07:14:48MT - msg#: 140685)#1406861/20/06; 07:18:54

Druid: that should read "ANOTHER paradigm". Operating on about three hours of shut eye.
BelgianDruid#1406871/20/06; 08:02:42

Let's keep it (very) simple, Druid : Let each and everyone play gold, his/her way. I just communicate my personal view/perception of the evolving nature of gold and try to provide as many sound arguments as there are possibly to find. Let's not waste time in discussing what insurance, investment, wealth, etc... do exactly mean. Gold will show us what it wants to be.
And the very rare, gold=wealth, advocates...are still firmly isolated by the so called 1001 gold commentators/observers/followers/explaners.

Example : China cannot buy gold because there is not enough of it. China cannot sell gold because they will lose money. Great insurance !?
What about having gold-reserves that are in the process of revaluation as to represent all the wealth that has been produced ?
When any stock goes up 10 or even 100 times...nobody defines this as wealth or shows dramatic emotions. When gold shows early signs of being priced around a 25 years all time is a bubble !?

Don't sell apples for oranges to Belgian. :-^-:

osa104cDollars for gOLD?#1406881/20/06; 08:35:14

Numbers may be incorrect, but lets say Japan holds one trillion US$'s, China 8 some point won't they demand payment, (drop "US" to our knees)????.........release of US gold holdings??
Clink!Glass ceiling ?#1406891/20/06; 08:48:01

I was wondering what was going to happen today. On a share option expiry day, with the POG up yet another 1% over yesterday's close and a boatload of options way in the money, and the HUI (which opened up around 1.7%) is now floundering in negative territory. Ah ! The joys of the paper games !
Flatliner@Dollars for gOLD?#1406901/20/06; 09:21:11

Osa104c, The hyper-inflationist in me would have agreed with you 6 months ago. But, after having read the words of old-timers in this forum (that call for orderly change), I have come to the belief that it is not in these countries best interest to ‘release’ their currency holdings. And, better yet, they have probably ‘insured’ themselves against their windfall of paper holdings.

Take a quick look at the MTM concept that gets so much attention around here regarding Europe (and the Euro). This currency has gold on reserve as well as foreign holdings. As you've seen in posts here, the value of the gold holdings is starting to overtake the value of the paper holdings. Interesting? I do believe so.

Now add in: Gold equals wealth, All paper will burn, ‘Big Trader’ HK, Economic survival and Orderly change and what you may see is that the central banks have already written off their foreign holdings! The foreign holdings are… not gold. They can not exchange them for gold (They are too big!). It may be that they will let the value of their foreign holdings go to ZERO and not release them in order to keep things orderly.

But someone might say, "hey, they are losing value as the dollar depreciates thus they might release these for something better. I know that I would." If you really think about it, if they have already taken the stand that foreign currencies are worthless, then recycling them back into the foreign markets to support the debt system helps keep the economy going. That, actually, has value (More then zero). For the US, as long as foreign dollars continue to flow into supporting our debt system, Americans will continue to spend. I would conclude that the value in foreign holdings is to keep the system well ‘oiled.’

At the same time, I would not call them stupid (I know that you did not). I would be willing to bet that every country out there has a substantial gold reserve that is both public and private. This is their insurance. Watch it. You might find that even as the value of foreign currencies drop, the value of the reserve stays the same because the gold reserve gains offset the paper currency loses. This, in my opinion, is a brilliant move on their behalf.

So, if you're looking for motivation from the big players, that seems to make as more cents then just saying that the dawn of a new day is coming that will show you the value of gold.

Chris PowellIran confirms transfers from its foreign accounts#1406911/20/06; 09:25:23

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coolslugHow does POG increase affect precious metals stocks and mutual funds in Canada?#1406921/20/06; 09:58:18

First off, thanks to all of you who contribute so much at this fantastic forum. I have been lurking here every day for a few years now and this is one of my favorite sites to come to. I have a question that I hope someone here can answer for me. Most of my investments are in Canadian gold and silver stocks and also RBC Precious Metals Fund in an RRSP account. My question is this: If POG were to go up 20% in 2006 which would be about $660, what percentage would my gold stocks and precious metals fund go up? I am hoping that my investments will increase by 60% if POG goes up 20 percent. Do you think this is unreasonable?
Flatliner@ -insurance- and -wealth reserve- is NOT a semantic one !#1406931/20/06; 10:06:52

Teach me. :)

It was barely a year ago when I first realized that I might, just might, be being misled by my government (USofA) with regards to price inflation. What's reported and what's experienced are two different things and in my region, the spread is probably 8% (or more). I figured that any cash that I held that depreciated at 10% a year would be absolutely worthless to me in 5 or 10 years.

Where do you turn? What do you turn too?

At the same time, I had a savvier case of the NASDAQ flu. Having held and profited from many high fliers through the 90's, only to find their real value next to zero, I was *not* going to jump right back in and blindly ‘trust’ the system that just burnt me so bad.

So, as any good ‘investor’, I looked for what historically protected capital (That's what I lost in the NASDAQ turn down). That's what I figured I would be losing by holding dollars over time. I found gold. A simple investment in reverse shows that if gold holds its purchasing power over time and the value of the dollar drops by 10% a year, gold is a no-brainer!

If this provides any support to MK, the reason why I got into gold was to preserve investment capital. That's it. That was ALL that I needed. That preservation concept aligned very well with the concept of insurance. I think I see MKs point of view.

But, I didn't stop there. The deception part haunted me. Why would they do that? It's obvious to me that the numbers are wrong, why doesn't anyone else see it? These questions drove me to research many different sources and at every step, I found more deception and even bigger lies! I found that there are hundreds of people that feel the same way, but the louder they speak, the louder the noise is around them canceling out their cries. Anxiety became by worst friend that kept me up at night. It wasn't until I found this forum and read the words of Another that I started to get hope.

It wasn't until this last fall, when the price of gold broke out against all currencies that my rock solid belief in gold as a means of preserving capital came under question – in a positive way. As I studied this breakout, it became obvious that the foundation for a bull market in gold had been developed and it might be that I was in the right place at the right time. This actually brought a smile to my face.

But, preservation of capital still plays a huge rule in my thinking. What if those that control the price of gold only allow it to rise at a rate to offset the decline of the value of the dollar? If the slow and steady approach is what we see, then the function of gold is to preserve capital – and offset loses.

At the same time, there is a wild card here and that is actually people's perceptions. It is very clear to me that - People value dollars more then they value gold. If these perceptions change, gold will provide more then just the preservation of capital. If that is wealth, so be it. If it is international trade, I can stand for that also. If it's liberty and freedom from the political establishment… ah, who am I kidding here?

In any case, it is a pleasure to be able to read and participate in this great forum. I do believe that, over time, peoples perceptions about gold will affect the market price and… that may be a good thing.

Gandalf the WhiteFriday is "fun day" on the "COMIX" !!#1406941/20/06; 10:33:05

Boyz are playing GAMES !
WAIT until next week.

GoldiloxCapital Preservation#1406951/20/06; 11:02:43

@ Flatliner,

Well spake!

Notice the "top-callers", as Sinclair labels them, are in full mating regalia today - Marketwatch, CNBC, etc.

They gently acknowledge the fundamentals, but are so concerned that gold will stumble on some miracle rebalancing of US obligations.

I think we all know who's really stumbling, as we watch the DOW bounce off 11k like a basketball backboard.

SurvivorPublic Perception of Money#1406961/20/06; 11:22:13

@ Flatliner

Remember that John Q. Public in the western world has seen nothing but depreciating fiat currency for generations; they know nothing else. Their perspective about money is about the same as the preverbial frog who gets boiled alive because the pot of water is changing temp at a rate so slow that it doesn't alarm him.

On a different subject: I see that the PPT has done their work at the Crimex this morning. With the DOW at -150, we should see their effort switch to Wall street any time now.

- Survivor

DruidEquity Markets..#1406971/20/06; 11:26:55

Druid: There seems to be some sort of liquidity drain taking place in the equity markets throughout the world as of late. I wonder how long this will keep up? Are the markets reflecting some signs of uncertainty prior to a change of leadership at the U.S. Fed? Stay tuned....
bskijaBe Happy Don't Worry#1406981/20/06; 12:55:04

Be happy don't worry! Japan or China is unlikely to exchange dollars for gold. Japan lost World War Two unconditionally. If you look up unconditionally in a good dictionary you will discover it means that Japan must sell its soul to the victory. Japan fought like hell so this would not happen. Now they do as they are told. In the case of China, their game plan is to allow British and American business to build factories in China to feast on the cheap labor. They are doing this because they know that they are back in the 1940s in technology and will jump into the twenty first century overnight by allowing British and American businesses to do their work in China. Selling their dollars for gold could jeopardize their game plan. A country can never be a super power if they are fifty years behind other countries in technology. Remember Japan would sell toys and trinkets before the British and Americans moved in. The US held an advantage after World War Two because Europe and the Japan were devastated. They had the world's business all to themselves until Europe and Japan got back on their feet in the seventies. This fact gave the US a big lead in technology. We shouldn't look back though because Europe and China are gaining on us.
GoldiloxDon't Worry, Be Complacent#1406991/20/06; 15:55:39


Your techno-babble has a lot to do with some markets, but maybe not as much with currency issues.

I don't think anyone looking closely expects BOJ, PBC, etc., to dump their $-based assets. A more pertinent question is:

"Will they keep up with the demand placed on those assets by hyperbolic debt growth? I don't think that's as likely, and very well affects the longer term value perceptions."

It's easy to live in the first leg of a hyperbola and not be concerned by the perceived inflation rates. However, the second leg accelerates the slope rather quickly and will defintely be "noticeable".

It's a lot like cruising down river and enjoying the "help" from the current, until one finally realizes that the current is increasing rapidly do the the waterfall ahead. It's difficult, nay impossible, to escape that current beyond a certain point.

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January 20 (from MarketWatch) -- Strength in energy prices, tensions in Iran and a fresh threat of terror attacks combined to lift investment demand for the metal during much of the week, but gold prices eased as analysts warned of further volatility next week and traders took profits.

COMEX February gold contracts closed at $554, down $5 for the day and $3 for the week, still, the session's peak of $568.50 surpassed the $561.50 high from Tuesday, which had been the highest level the market has seen since March 1981.

"Expect volatility to go higher and trading ranges to expand," said Jon Nadler, an investment products analyst at bullion dealers Kitco. But overall, "aside from the amalgam of worrisome news items coming from many corners of the globe ... the investment community is also looking with apprehension at economic news and has nothing to smile about," he added.

Nadler cited al-Qaida's warning for the United States reported Thursday, as well as "Iran playing the big roulette" with the resumption of its nuclear program.

In addition, downbeat economic news included disappointment over financial results reported by General Electric Co. and reported plans for layoffs at Ford Motor Co.

Gold thus "remains a beacon of safety, diversification and comfort," he said.

Gold prices tacked on nearly $15 an ounce in New York dealings on Thursday after al-Qaida's Osama bin Laden warned about attacks against America in an audiotape aired by Arab TV station Al-Jazeera. The CIA later confirmed the authenticity of the tape.

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melda laurefree money? or free energy?#1407021/20/06; 17:56:50

With one caveat, Belgian. Reality is simply a measure of the extent of our ignorance.

I just saw Jared Diamond try to explain why Western Civilization has so much "cargo" and Papua New Guineans so little. He doesn't really know- for all his various explanations: it all boils down to whether your saving and investing "technology" (farming/building/etc) is SCALABLE TO SIZE.

Nothing scales too far without being able to create independent contracts. Otherwise Warren Buffet would have to be at the Sees Chocolate factory every two weeks to hand out payroll checks (or worse, he might have to hand out the yellow putting MK out of work!).

But J. Diamond and the other scientists who reviewd the material do not know the secret of great wealth. They are ignorant of economy and of all things military. Alexander the Great had sucess because he went towards Persia. Had he landed on Plymouth Rock, he would have been a failure.

As in finance, so too in Physics. This age is ignorant of many many things. I had hoped this ignorance would last a while longer and enlightenment would come in a happier and more civil time: a hope that was ill founded, I fear this now will change. TANSTAAFL used to sit as the basis of our reality. It is no substitute for the golden rule. The giants must succeed, or there will be a long age of darkness. Events come swiftly now, even counted in the years of men, that force their hand.

The finance of open systems is not the same as the finance of unbridaled fiat- whose fruits are only destruction, tyranny and death.

I apologise for the horrible subscripts. The first page ought to contain enough heresies for most. The intrepid can muse upon pp 477,478. TANSTAAFL is dead, may the golden rule have a happier reign!

Ned@ coolslug#1407031/20/06; 19:50:31

I'll take a crack at your question.

It would be impossible to say that a 20% increase in the POG would translate into a 60% increase in gold shares. Historically, goldshares have offered leverage to the price of gold anywhere from 2X to 5X, both up and down. Asking if 3X is reasonable is a can of worms, lets first ask if an increase of 20% in the POG is reasonable?

It's all if's, if's and more if's.

If you are a REAL student of this forum you know that the foundation of gold ownership starts with a footing made of physical gold. Then a conservative layer of 'steady-eddie', non-hedged imtermediate and senior producers, a thinner layer of promising producer/explorers and then a sliver of speculative junior explorer.

I personally play the game with about 50/60% physical and then 30% Central Fund /intermediate producer. The 10% sliver is held for speculative juniors/explorers. Here's the twist, I watch the HUI/POG ratio. When POG gets ahead of shares I switch to shares. When the shares get ahead of POG I switch to CEF.

The HUI has had a nice run from 258 to 305/310. I consider the shares ahead of gold. I am in CEF at this time, I consider the shares ahead of themselves. I believe gold stocks are now discounting $600 gold. Gold will run, shares will wait...until the next run.

Hope this helps.

PRITCHORichard Russells Latest Comments - - - January 20, 2006#1407041/20/06; 22:15:25

Yes Mr Russell is GIG on Gold & at 80+ hes been ther & done that - -Soooo he's worth taking note off & thats for sure!

Gold -- Gold is the standard, the base, the only real money (although at times silver also fits this definition). Consequently, the true price of all other items rises or falls in relation to gold. If it takes more pounds of steel today than it did last week in terms of a given quantity of gold, than the true price of steel is declining. If it takes fewer ounces of titanium to buy an ounce of gold this month than last month, than the true price of titanium is rising. If your home can be bought for less gold this year than last year, then the true value of your home is increasing.

The Fed has been creating liquidity at a furious pace. Over the last six months, M-3, the broad money supply, has risen at a 9.0% rate. Thus, the US, money-wise, has begun to resemble a banana republic. This has not been lost on real money, gold. As this frantic MONETARY INFLATION continues, the price of almost everything declines in relation to gold. Or to put it another way, it's taking more of almost everything to buy a given quantity of gold.

You don't believe me? OK, then let's check a few important examples. The chart below shows gold in relation to the Phila. Housing Index. The direction is UP, meaning that gold is outperforming housing. Of -- it takes an increasing amount of housing to buy a fixed amount of gold.

Next, we see gold in relation to the Banking Index. Same story, gold is outperforming the banking industry.

How about tech? Here I show HUI, the gold average, plotted against SOX, which represents the chip industry. And the conclusion is again the same -- gold is outperforming tech.

Let's look at Treasury bonds in relation to gold. You can see the answer below. Gold is far outpacing bonds. Or again, I should say, it's taking an increasing amount of T-bonds to buy a given quantity of gold.

You prefer stocks? OK, below we see the widely-followed S&P Composite in relation to gold. And the answer is the same. The gold shares are outperforming the S&P Composite.

The charts don't lie. The charts tell us that it's taking more of everything to buy a given quantity of gold. This is the result of monetary inflation. Monetary inflation leads to price inflation, and the tell-tale indicator is gold. No wonder governments don't like gold. No wonder the central banks despise and fear gold. They fear gold because when gold rises, it's telling the world that their governments are debasing the currency.

Economists can babble about "inflation being contained," and the government can release phoney inflation statistics. The Fed can eliminate M-3 statistics so that we don't know what's happening to the broad money supply.

But gold knows. Gold tells us the story. When gold rises as it is now doing, it's telling us that our so-called money, the money that everything we own is denominated in -- it losing its value. This is inflation pure and simple. Rising gold trumps all the government lies and denials; rising gold trumps all the phoney statistics put out by the Fed ("core" inflation for example).

I find it simply fascinating how little is currently being written about the big bull market in gold. Where anything is written, it's almost a warning that "gold is volatile," that "speculators are driving gold up," or that "the gold shorts are simply being squeezed." Never a word about the Fed creating new inflationary oceans of liquidity, never a word about the dollar losing its purchasing power, never a word about real money rising against all other asset classes. Silence reigns regarding what could be the most significant bull markets in recent history.

I lived through the gold bull market of the 1970s, but I believe this is a much bigger, more important gold bull market. First of all, the 1970s bull market was pretty much about US inflation. This bull market is about a world view of the dollar, that view being that the dollar is headed for major trouble -- due to massive US debts. Furthermore, that 1970s gold bull market ended with interest rates "through the roof" and with long T-bond near 15%. This gold bull market is progressing with LOW interest rates, and low interest rates don't bolster the dollar.

Finally, this gold bull market includes "an extra" one third of the world -- China, India, Russia and most of Asia. While the European central banks have foolishly been selling gold, I believe the "secondary" central banks have been buying gold. Gold is moving out of Europe and into Asia. Follow gold and you're tracking the direction of economic power.

PRITCHORe Previous Post - - -#1407051/20/06; 22:16:48

GIG should have been BIG - - too fast on trigger finger!
GoldiloxRussell's Words#1407061/20/06; 23:21:44

@ Pritcho,

I find it pretty hard to argue with his logic. At dinner this evening, I remarked to a colleague about the differential between DOW2000 (11k) and DOW2006 (11K) as a 55% depreciation when measured in gold. I could see the wheels turning as he analyzed his paper positions.

It won't take a complete collapse of the dollar or the stock market to accelerate gold "revaluation", as Belgian puts it. Because the gold market is dwarfed by the FOREX and other markets, it will take no more than a "leaning" toward a stronger gold position by some bigger players and more public buyers. Their media mouthpieces will continue to sell the investing herd on the concept that it is "risky and volatile" until they are fully invested. Then they will hype it to get the next level of pyramid buyers interested and run it up some more. That has been the formula for bull markets since the dawn of investing. They won't fight the trend. They will APPEAR to fight the trend.

The fly in the ointment is discovering the top, and accurately predicting the movement from that point. Geopolitics and global finance will try their best to "control" that in their favor, and the end game hinges on their ability to accurately maintain that control.

GoldiloxSinclair's Daily#1407071/20/06; 23:25:37


Every time gold runs hard they pull out the gold-phobic Bundesbank to do a blitzkrieg on the price. Any effort by Germany to sell gold will be offset by China buying Germany's gold. If that financial vaudeville act was not a cry for help from the shorts at gold $565, I never heard one.

When will the foolish holes in the wall gang of fund managers wake up to the fact that the most bullish thing that happened for gold from 1970 to 1980 was Central Bank selling?

Central Bank gold will never see the marketplace but will be traded between the banks themselves. Should any central bank demand sales into the market, all they would do is facilitate huge buying of major lots at singular prices free of commission. This attracts big money and is therefore bullish. Had gold held $565 today, then I would not have been at all surprised to see it take out $600 next week.

So this is it. The battle of the gold titans is on. This time the naked shorts are the gold fund traders. They were the longs that recently got killed; now they are the shorts so their demise again isn't out of the question. With position published by COT, when a battle like this runs red knowing the size of any position is inherently its own demise. The shorts thank god that the position size is as of Tuesday and not Friday.

My position remains the same and $544.87 is the number. Twice the shorts hammered at it and failed. God help them if they fail again.


How often have we seen the "top callers" more accurately reflect strong support?

GoldiloxENRON Insider Trading - The "smoking cannon" of 911#1407081/21/06; 00:47:17


Don't you find it unbelievable that to date not one person, despite overwhelming evidence, has ever been prosecuted for these short sales in concert with 9/11? The financial tracks to find them were certainly there, and should still be available.

That concludes the e-mails to a member of Congress from this individual who wishes to remain anonymous at this time. The big trials for Enron's major players are looming (January 30, 2006) and oddly enough, the feds are taking a different position than expected. In a December 29, 2005 USA Today piece, we find this:

Causey's shift eases burden for prosecution By Greg Farrell, USA TODAY

"The decision by Enron's former chief accounting officer to plead guilty this week will undoubtedly alter the dynamics of the criminal trial of former Enron chiefs Ken Lay and Jeff Skilling next month. On Wednesday, U.S. District Judge Sim Lake accepted a deal in which Richard Causey pleaded guilty to one count of fraud and will serve seven years in prison and forfeit $1.25 million. Another court opinion made public Thursday revealed that Lake also rejected Skilling's request to dismiss 10 inside-trading charges that are pending against him in the case. Legal experts predict that Causey will boost the prosecution's case in the following ways: The case is less about whether Enron abused obscure accounting rules and more about whether its top executives lied. "The government's not going to have to present mind-numbing, off-balance-sheet deals to prove its case against Causey," says Houston attorney Philip Hilder. Doing so "would certainly run the risk of confusing the jury and, finally, of boring the jury," he says."


Isn't Blackstone, (ENRON's financial trading manager firm mentioned earlier in the article), the very same one being absorbed by JPM in today's news? What a coinckidink!

If this information bores the jury, then I suggest the jury be selected from those free of overdosed "anti-depressant" threrapy. So far, the ENRON mess has been pretty well hushed up by plea deals that hide the evidence from the public records. As Justice works their way up the corporate ladder to White House "fishing buddies", and the big boyz try to defend themselves, more of these incredible dealings may find their way to light. The timing of the trials is just about right for the web bot prediction of "yet another failed effort will emerge very rapidly into a full blown 'energy drain' for the Bush Admin."

Not that they haven't already seen so many setbacks that Larry Kudlow is hosting the VP's political apologetics on Financial Bubblevision.

Loss of credibility is not a good thing for a currency backed by nothing but "full faith and credit." I lean toward the view that M3 obscurity was put in place just to prepare for such an eventuality.

Whoopwhoopwhoopwhoopwhoop. Here come Bennie's Hueys!

It's well documented that helicoptors experience difficulties in the sandstorms of the ME. Mr. Bernanke should hope they perform better in the s**tstorm that is brewing in the US courts.

The Invisible HandIranian Oil Bourse and natural gas#1407091/21/06; 03:43:00

Threat to the peace? Act of aggression? How can Bush et al. expect the Security Council to conclude that IAEA Safeguarded programs constitute a threat to the peace or that pursuing them is an act of aggression?
Or expect the Council to take measures under Article 41 (sanctions), much less Article 42 (use of force)?
Obviously, as the Iranians, themselves, have pointed out, Bush had sent the Europeans on a Fools Errand.
Fortunately, the recent temporary curtailment of Russian natural gas supplied to Western Europe by a pipeline which passes through Ukraine, and the terms agreed to by Ukraine and Russia for restoration of supply, may have put a hitch in the Europeans gitalon
What is the Iranian Bourse and what has a Russian natural gas curtailment got to do with it?
Well, to answer the second question; in future, some gas delivered to Ukraine and perhaps on to Western Europe via pipeline will be Iranian.
Belgium's prime minister was allowed earlier this week to stay longer with Bush than planned.
Ask yourself why.

In the meantime, decriminalise insider trading. Otherwise all readers of this forum will have to go to jail soon. In fact, they all should already be in jail. Fortunately for them, insider trading laws are applied very selectively.

BelgianGlobal conflicts and gold :#1407101/21/06; 04:29:07

After the divide and rule strategies that kept the whole Middle East weak for the past 4 decades, a new period has already started. Western strategic occupation of the remaining cheap oil reserves (and pipeline corridors).
Iran (and all other oil rich arab states) do see what is happening in Irak. Today, most big oli/gas-reserve holders want their full sovereignity.

This can only be achieved "peacefully" with a positive, multilateral approach. The ENTIRE energy-consuming planet should pay what energy is worth. And here lies the main problem : Continue to pay with the same old dollar or the new gold-euro unit !? That's why G.Brown suggested IMF reforms. And the question remains > How sovereign can states be (become) when sticking to the $-IMS.

The $-IMS will never accept any transition to gold-euro under the present conditions. That's why the nuclear element (rapport de force) is popping up. Nukes also ended the third Reich.

We can only sit and watch how this drama evolves. We have an idea about what the stakes are. What the final outcome will be is still a guess.

bskijaSmoke Smoke Smoke#1407111/21/06; 06:11:43

Goldilox, the Chinese will sell some of their dollars for gold, but will be careful not to upset the apple-cart of dollars. This would circumvent their game plan. Because the Central Bank of China has the least amount of gold in their reserves than most developed countries they will exchange some of their dollars for gold. The precipitous interest in gold by the big boys indicates to me that something bad is out there. Gold is the smoke detector of the world's economy, when something is wrong the thing sounds off. This is very annoying to Wall Street and London. Getting off the subject of gold and bringing our attention to our prosaic smoke detector in our homes, a good way to test the battery that is not long for this world is to put the smoke detector in the refrigerator to see if it sounds off. Even a good battery when it is very cold will only have a half-charge.
Liberty HeadThe Truth About Faith#1407121/21/06; 12:12:21

As "Full Faith" in fiat approaches zero, POG will approach infinity.

The "Full Faith" snowball is already rolling down the long slope, destroying all in its path.

Fortunately, we can sidestep this destruction by placing our faith in a more worthy entity.

Best wishes from the simplistic and eternally irrelevant, Liberty Head

bskijaIndian Gold Dance#1407131/21/06; 12:23:00

Back in the nineties the Central Banks would loan their gold at a low rate of interest to the big boys. This was not for keeps, because the Central Banks expected the stuff back. The big boys would sell the gold immediately and invest the proceeds into an investment that would give them a healthy profit (little guys were not allow to play this game). The gold that was sold was greedily brought by people from India (when it comes to gold these people know a good thing when they see it). The Indians hammered the stuff into ornaments. They do not trust banks and prefer to adorn their bodies with it.
How the big boys will pay this vast amount of gold back to the Central Banks is an ambiguity to me. The selling of gold reach such a fever pitch that it drove the price of gold lower than whale poop. Blanchard a gold business was severely hurt by this game. They sued Barrick and J.P.Morgan for their alleged involvement. My belief is that Blanchard is like a flea challenging an elephant to a tug of war in their law suit. I believe this gold that was sold will only be recovered if the Indians decide to sell it(unlikely). In the mean time yearly world production of gold is declining each year. South Africa has always been a major gold mining entity. Because their gold is miles deep into the ground it is harder and harder to maintain production.

osa104cHappy Birthday#1407141/21/06; 12:57:09


Change your smoke detector battery every birthday......I agree, what is China to do with the 800 billion $'s...can't even buy a little oil company in South Asia....always a threat to AMERICAN interests???......A rapidly changing world is quickly evolving.....accelerated by information to the masses.......Don't the masses eventually influence outcome???

CaradocIranian Oil Bourse (coming in March)#1407151/21/06; 13:00:00

Mandatory reading from the castle on the next mountain.


FlatlinerRising demand for Dollars?#1407161/21/06; 13:07:51

When I read the BLACK GOLD U.S. Dollar Hegemony Article by Douglas V. Gnazzo, on the Financial Sense website yesterday, I couldn't help but wonder if we're going to see a rising dollar rather then a falling dollar in the coming months. Then, reading the Treasury Bonds Topping article by RobertMcHugh, Ph.D., I once again wonder specifically at his comment "Perhaps how it will go is, demand for U.S. Dollars (to buy oil) will decline once Iran opens its euro-based oil bourse in March. With too much supply, the Dollar collapses."

As we already know, dollar demand is partly supported from buying oil around the world. He who wants to buy oil, converts into dollars, and then puts those dollars to work. At the same time, with the IOB coming online in a couple months it stands that there will/may be a weakening in demand for dollars on a global scale that will soften the demand thus causing the price to fall. But, I'm starting to question this logic and I wanted to share the idea in this forum to see what others think.

Look at the price of oil. It's, ah, going up. At one time, the price was ½ of what it is today. Back when it was ½ the price, it took ½ the total number of dollars to buy oil. Oil demand is going up at a couple percent a year, yet the price is going up much faster (double maybe?).

Look at the strength in the dollar over the last year and you see it going up. Could people be buying more dollars in order to buy higher priced oil thus causing a higher demand for dollars thus, keeping it from visibly crashing?

It will be interesting to watch this in the coming months. It will also be interesting to see if things stay in a delicate balance. In other words, if the price of oil, say, goes up at 30% will that be enough to offset the reduced demand for oil in dollar terms allowing other currencies to buy oil without crashing the dollar?

The real question I have is, will the rise in oil price create a demand for dollars that will offset the displaced demand that moves to another currency thus preventing the dollar from falling on its face. If so, I would expect the price of oil will, over time, come to punish those who hold dollars vrs those who don't.

Seems like a pretty wild idea, but not to wild for this forum. The idea also seems to fit with previous predictions that the dollar will appear to be strong even though the rug is being pulled out from under it.

bskijaPay checks and Batteries#1407171/21/06; 13:54:30

If you take what the average person made each week in 2005 and gave him a list of foods and stuff available now and in the 1920s and had him put it on a table, and had what a person made in the 1920s each week and had him put the same stuff on a second table, I am sure the 2005 paycheck would be a whole bunch larger than the 1920s stuff on their table. This despite the fact the dollar is getting cheaper and cheaper as the years go by. With this example, is the dollar really experiencing less worth? Is the living standard of the average person declining? I don't think so, but pessimistically with the right-wing Republicans in full control it may come to that. The battery in my smoke detector lasted a little over two years before indications cause me to replace it. If I went by the rule of every birthday it would double my expense for batteries. If I went by what they tell us to change every year or a cetain amout of mileage I would be in the poor house.
Belgian@Flatliner#1407181/21/06; 14:20:30

You do surpise me sir, with your fast progress in understanding the big picture >>> The $-IMS and all its international institutions (IMF-WB-etc) do function already for *many* decades with a dollar-debt-unit. The point of no return (hard money) has already definitely been passed long ago (1971 was the coup de grace). But the debt-dollar-unit still keeps functioning ! This should NOT surprise us at all. Simply because "gold" is evolving, whilst we keep on using the existing system. Nothing really matters anymore...more or less rates...oil in dollars or euro...etc.

IT IS IMPOSSIBLE TO MAKE THE DOLLAR A HARD CURRENCY, AGAIN ! And we "have" to continue -using- it up until the alternative, "GOLD", is on its feet. That's what gold's revaluation process is all about. Gold is in the process of unwinding all the automatisms (official and private) that got installed during the past 25 years.

There are limits on the permanent depreciation of the debt-dollar-unit and its non inflation correcting/compensating dollar-gold (POG). It is the fast "emerging" part of the world that is defining those $-limits and how fast these will be reached.

The international institutions are losing their (former) grip on the management of the $-IMS. They also watch gold's they did 40 years ago when they were still able to organize a London Gold Pool. But in the present decade an opposite (to the LGP) action has been taken under the form of WAG I-II ! Why was the goldprice crashing (ATL-$253) whilst the dollar-debt-unit added tonnes of debt !? And WHY was this particular (succesfull) action countered with WAG I-II !? Could it be that the international institutions and the cooperating CBs are divided about gold's changing future !? You bet they are.

That's why the dollar-debt-unit is still used, whilst gold is building on its brand new future (freegold wealth reserve instead of handicapped $-inflation gold).

It speaks for itself that the dollar must ignore what is really happening with gold, for as long as this process is building. All oil is NOT going to be invoiced in another currency, overnight !!! A dollar-divorce is NOT going to happen overnight. This is a process ! And there is NOT one single sign that tells us it is not going to happen. On the contrary.

That is what we are watching and better should recognize as such. Keep your precious -wealth- firmly in hand, Flatliner and think deep before considering the goldprice having outrunned $-inflation. That axioma will soon become history.

mikalAnother opinion piece on Iran#1407191/21/06; 14:23:25

Nuclear Showdown with Iran - Eric Margolis - Pretty good overall perspective on Iranian history and current affairs, with some minor errors, seems to prove the US is in between a rock and a hard place, barking louder than it's bite.
The role of gold must soon become more important and all-embracing. IMHO, NIA.

mikalIran and China#1407201/21/06; 14:45:15

Iran's Bomb - Charley Reese
Another, short opinion piece that mostly throws cold water
on the idea of an attack on Iran by Israel or USA. Reese also sees China as an important player.
As we have heard this week, foreign Iranian accounts are being moved premptively and gold is still viewed favorably there. It seems the larger questions are how quickly an Iranian oil bourse will affect transactions in dollars,
world currencies and gold.
It's also unclear whether Iran's March, petroleum bourse will institute trading in euros in stages, as rumored, or immediately.
All major currencies are being divested in exchange for gold. It will be interesting to see how they stack up against each other in a few months time.

FlatlinerMotivation for FreeGold.#1407211/21/06; 15:08:24

Thanks Caradoc for posting the lead to Krassimir Petrov's article. It seems to me that this fine author might have failed to mention something that rings loudly in these halls. The author wrote: "Essentially, the U.S. declared itself an Empire. It had extracted an enormous amount of economic goods from the rest of the world, with no intention or ability to return those goods, and the world was powerless to respond- the world was taxed and it could not do anything about it." Effectively, the creation of new US Dollars acts as a tax on all that hold them, not just US citizens.

This reason why this is interesting to me is that in order to believe in the Freegold concept you look for evidence that would support that concept coming into existence. There is absolutely nothing more motivating then to reduce your TAX burden. As it stands right now, every single country in the world is being taxed by the US through its money creation(expansion) process. If I could find no other reason to support Freegold on a worldly scale, removing this taxation burden would be enough for me to believe that the world as organized against the US – just to remove this burden.

In an odd kind of way, US citizens might come to embrace this concept (Freegold) in the future just to get out from the hide tax that they are currently paying.

CaradocIran "moves assets out of Europe" #1407221/21/06; 15:11:22

Another marker along the trail...

To the right of this BBC article, there's link to another one on how Iran's action complicated things for China:

The Chins link is good for what it covers but doesn't mention that China has to be aware of its huge pile of dollar-denominated debt when charting a way forward. They may need to buy more aircraft and Chevrolet Suburbans,


Clink!Sometimes the best laid plans go very, very wrong .....#1407231/21/06; 15:17:04

Snip :-

As the liquidity bubble inflated, a corresponding deflation of values and principles strangely took hold. Prudence and frugality went out the window, which seemed to breed a general disrespect for rules, ethics and especially tradition.

For instance, the time-honored Monopoly rule of only one hotel per property was rejected as old-school, and soon rows of shiny red hotels were springing up on single, small-lot properties.

Eventually, there was a shortage of hotel building materials, and Lego blocks were brought in as substitutes, stacked up like high-rise condos along the New Monopoly skyline. Before long the bank ran out of $500 bills, so the now-worthless $1 notes were declared to be $1,000 bills by fiat. Eventually, in a stunning display of central banker irresponsibility, an imaginary zero was added to all currency notes, so people could afford to pay rent on Boardwalk and Park Place with five hotels.

End snip.

C! Any similarity between this story of using a game of Monopoly to teach your kids about economics and actual reality is totally intentional ....

David Linkley@Flatliner#1407241/21/06; 17:14:19

The dollar is toast by design. The current policies of the Bush administration are to lower the dollar over time in a controlled manner. Deflationists may be ultimately right but "Helicoper" Ben Bernanke has been hand picked by Bush to inflate at will. Gold is now ringing a loud warning bell by not correcting for any length of time or price. Gold is the fly in their soup. As they continue the endless terrorist warnings, plan for more war and take our rights away gold demand is climbing. If Iran is attacked I believe events may escalate beyond any plan or control and into a world conflict. The US economy is sinking and they will try even more drastic money creation to fight it. Orwell would be proud of the current Western Governments. For all you socialists out there, thanks for the decades of endless paper creation, lies, dumbed down education system, false promises of taking care of everyone and removing the only real check and balance known to properous societies - honest, moral money backed by gold. You're about to get what you all deserve, go ahead and take another deep inhale from that stong stuff you smoke, your philosophy is about to implode and take us all with it.
The Invisible HandEnd of the West's economic arrogance #1407251/21/06; 17:32:06

Al Jazeera, Sat, 21 Jan 2006 10:07 AM PST

In response to the mounting threats to refer its nuclear dossier to the United Nations Security Council to force it suspend its nuclear program, safeguarded and certified by the IAEA to be for peaceful purposes, Iran announced it's moving all its foreign exchange reserves out of Europe to shield itself from the threat of sanctions likely to be imposed by the UNSC.

USAGOLD / Centennial Precious Metals, Inc.Assets and information to help you enter the gold market with grace and confidence#1407261/21/06; 17:53:05">gold ownership starter kit
Cavan ManIran "ISSUES"#1407271/21/06; 18:30:34

Of course, the real issue is the new enegy/EURO bourse. The rhetoric regarding nuclear ambition is obfuscation. Iran apparently will not bend under pressure. Therefore, the bourse goes live and M3 goes the way of the dinosaurs. Happy monetization/stealth hyper inflation...CM As an aside; it was enlightening to first see our "allies" condemn Iran and then back OFF. Indeed, a "fool's erand" was spent.
Cavan Manlast CM post#1407281/21/06; 18:31:38

Please accept my apology for poor spelling...always in a hurry...CM
Smeagol"I, Greenspan"#1407291/21/06; 19:21:36


"Why should I, Greenspan, suffer such a fate? No, it was not for me. This was the "golden predicament" I faced. Yes, I knew well that the nation would be better off if the punch bowl were removed, but I knew that I would be removed too, if I did it. And I knew, also, that it would be just a matter of time until the pressure for easy money would overwhelm any resistance a Fed chairman could put up. No pure paper money system has ever lasted. People can never resist the temptation to make the money easier and easier…until it is so wobbly and woozy it falls on its face. It's better that it falls sooner rather than later. It's better that the lesson is taught now, rather than 10 years from now. It's better that the lean times come on the next man's watch, not on mine! That's what I owe to old Ayn; she taught me who rules Greenspan - Greenspan! Ayn taught me the number one rule: Look out for Numero Uno.

I remember it so clearly. I was sitting in a House committee hearing room. My tormentors kept asking questions. I kept giving the kind of answers for which I later became famous…answers that didn't say anything. And I thought to myself: if these lardheads want easy money, I'll give them easy money. I'll give them the easiest money the planet has ever seen! I'll give it to them good and hard!

And so, I did."


CometoseTHE ORANGE AND BLUE SKI #1407301/21/06; 19:38:15

My date and I noticed before arriving at Invesco last weekend while leaving from AURORA ......that the skies around DENVER were ORANGE AND BLUE .........I said to my companion that that was a bad omen for the NEW ENGLAND PATRIOTS...........

I noticed today that the sky was orange and blue when I awoke and it was orange and blue when the sun went down ........
THAT IS A BAD OMEN for the Pittsburgh Steelers.

Someone needs to interpret and indentify .......this to the local news media............THIS ISN"T A COINCIDENCE
..........You can bet on the FRIENDLY SKIES over DENVER that TOMORROW"S WIN OVER THE STEELERS IS IN THE WIND (BAG) and it's a cinch.........

GO BRONCOS !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

NO WAY THE LIMITED STAFF of the STEELERS can outcoach the genius staff of the BRONCOS......

LOW SCORING 1st half .....
SECOND HALF .....BRONCOS COACHING STAFF figures out the Pitsburgh defence stunts and weakness......

GO BRONCOS!!!!!!!!!

seekerTHE WAY THE WORLD REALLY WORK#1407311/21/06; 19:39:13

Caradoc Your 140715 post is a good find!

From what I've read over the years, this is one of the most concise, to the point article on what is really happening in the world today.

Watch in absolute wonder how the U.S. will tell us that the world is not safe with Iran about to acquire nuclear weaponry. We must invade! HMMMMMM sounds just like the precursor to the Iraq affair eh?

How perfect for the U.S. We start a war with Iran, the price of oil goes up because of this conflict, we prevent yet another country from using anything but U.S.$ for oil trade and now everyone must buy more U.S. dollars to pay for the higher priced oil.

The only question I have about all of this is why would Europe go along with this?

Beer Man@ Black Blade or our host .. Looking for a phone interview for local Talk Radio Show#1407321/21/06; 20:09:44

I have asked before .. not in this way .. they have a toll free # .. the show is M to Fr 9 am to 11 am cent time ... for as long or short as you like .. I have asked Dr. Ron Paul .. so far no responce .. just want to cover some basic stuff or what you think the folks need to know about gold & how best to invest in gold .. or what ever you want .. Many Thanks Dan The Beerman P.S. Sorry for the misspelling in my past post .. saw it AFTER I hit the send .. hate when that happens ... this keyboard also has 3 keys that dont function .. so what !!
DruidPerplexed....#1407331/21/06; 21:15:26

Druid: I find it very interesting, or at least, a mystery as to why the Iranian Oil Bourse is about Iran switching to Euros as a form of payment for oil but then advocating and then pulling investment out of Europe to make a statement concerning Europe's possible U.N. support. Any comments....?
Flatliner@Perplexed#1407341/21/06; 21:40:04

I, too, find it interesting. For what it's worth, Europe is a big place. Where *exactly* did they take their money from and to where *exactly* did it go? Remember that their can be two stores on the street and you may shop at both, but if you have a falling out with one of the store managers, you are more likely to no longer visit that one store.

Could it be that they are saying that they have removed their money from Europe where in reality, they have remove their money from a collection of American backed organizations or organizations that have strong ties(control) in the US? I'm sure the people that they direct their threats too will see this very clearly. We… do not.

Keep your eyes and ears open and share what you do find. I am curious for reasonable facts.

mikal@Druid#1407351/21/06; 22:42:44

You asked about Iran's actions and stated they perplexed you. Perhaps there's no contradiction, but rather consistency in Iran's:
a)"making a statement" by moving assets out of Europe before any possible UN action(which is precautionary and prudent IMO), and
b) selling oil in euros, along with inviting other oil nations to join this on new exchange/bourse, and placing those fresh euros in Singapore, Hong Kong, Indonesia and other favored banking locales.
The euros in both cases are treated as valued assets and placed where free from arbitrary or punitive western or UN sanctions.
At the same time they can be liquidated for use in natural disasters, to buy gold, to build hospitals or other reserve functions.

GoldiloxWhy would Europe go along with this?#1407361/21/06; 23:09:16

@ Flatliner,

The answer lies in a closer examination of one of your earlier statements.

"Could it be that they are saying that they have removed their money from Europe where in reality, they have remove their money from a collection of American backed organizations or organizations that have strong ties(control) in the US?"

Every examination of the makeup of the FED that I have seen leads right back to Europe's banking families as major participants. When it comes to banking and control of money, the "us and them" is defined by "us bankers" and "them non-bankers," not by national boundaries. Find a list of "stockholders" in the Federal Reserve Bank to verify this.

Governments can exist at odds with their banking community, but as financing is critical to maintain a government, NOT FOR LONG! Especially when war and expansionism are involved, because someone has to "guarantee" the troops will be paid and the WMDs are paid for. The spoils of conquest may pay back the financiers, but if not, the new markets will be skewed to their advantage as "war reparations" - a la "no-bid contracts."

Notice how Iraq's oil is pumped by US contractors for free or pittance rates to pay for their regime change. No one remembers that they never asked for their democratically elected government to be overthrown by the CIA and Saddam in the first place, but since the butcher Shah Pahlevi had been ousted, the western powers needed a new "dictator-friend" in the oil patch post haste.

Why worry about paying them in Euros, if you can avoid paying them at all!

France's opposition to Iraq-II was not altruistic. They had over $15B in oil contracts that the US invasion wiped clean.

Follow the money!

BelgianSeeker/Druid/Flatliner#1407371/22/06; 05:14:18

Answer to your question is found in nuanced/balanced text (link). The writer evidences that the he is understanding much of what goes on beyend the screens and what is "played" in front of them. Read it with all the attention it deserves.
bskijaBlue and Orange Sky#1407381/22/06; 05:59:08

Cometose, you might be correct with your blue and orange sky. I have a picture from a digital camera with a blue and orange sky. This picture is proof that they can't dispute. Unfortunately this message system doesn't allow pictures to be sent. Will the bookies change the odds because of this phenomenon?
ToolieAbandon parochial currencies#1407391/22/06; 06:07:57§ion_id=4&newsid=13387&spcl=no

Snip: Benn Steil 1/22/2006
Of all the objections that have been raised against globalisation - including its alleged damage to income equality, workers' rights, democracy and the environment - none is even remotely as compelling as the devastating periodic havoc wreaked by currency crises in developing countries.
Economists with the most impeccable pro-globalisation credentials, such as the Financial Times' Martin Wolf and my colleague, Jagdish Bhagwati, acknowledge capital flows as the Achilles heel of globalisation.
Anti-globalisers will be aghast at such a blow to "monetary sovereignty". But that concept is among the most damaging sovereignty fetishes to have emerged in the 20th century. Spanish and later higher-quality Mexican silver coins circulated freely throughout the US until the late 19th century. Medieval popes actually condemned rulers for debasing currencies, which is today's fatal state solution to every economic toothache.
One need only look at Argentina, generating double-digit inflation once again, to see the anti-globalisation backlash that inevitably emerges from the wreckage of failed experiments with national monies that no one wants to hold. Globalisation's earlier golden age has taught us that capital flows need not be the Achilles heel of today's reincarnation. The key is to refound globalisation on monies that people will hold without compulsion.
The writer is director of international economics at the Council on Foreign Relations and co-author of Financial Statecraft: The Role of Financial Markets in American Foreign Policy.
— FT Syndication Service
(end snip)

mikalIran currency stays#1407401/22/06; 09:51:31,1,2970236.story?coll=la-wires-business&ctrack=1&cset=true

Iran Insists It Isn't Withdrawing Currency - Los Angeles Times - 01/22/06
Two denials, from a foreign ministry spokesman and from the Central Bank, that up to 50 Billion reserves have been moved from Europe. Said they will keep reserves in banks they trust, and act expediently to move them if necessary.

*How fast will success come to their new oil bourse and currency exchange?
*Can Sec. Snow's "strong dollar" policy continue to elicit support from it's reserve status privilige, from competitive currency devaluations, from corporate repatriations, from Carribean trades?
*Can oil rise much beyond $68 barrel?
*How many new dollars and world currencies will be added to reinflate and cushion economies, governments and banks?

SmeagolIt will be interessting...#1407411/22/06; 10:00:26 see whether newspapers, radio and TV news-wires in the US-country pick up that UPI sstory, Ssir Belgian... or sweep it under the carpet.

We read through Another's commentary yessterday... it appears that gold will ssoon (is in the process of) be bidding for oil (through the euro), that the ssituation has extended much farther that even Another thought possible, and that the US, insstead of going along - by marking it's remaining gold reserves to market, perhaps? - may attempt to keep it's dollar hegemony AND take the oil too.

Thiss can only end badly.

We found these possts ssingularly interessting in regards to current events:

"Date: Sat Mar 07 1998 23:16

Date: Sat Mar 07 1998 20:01
Neophyte ( Another - ECB gold holdings? ) ID#390249:
Do you know how much gold the ECB will hold as part of its reserves?

Mr. Neophyte,
I do not know. I have knowledge of some discussion for 15% with a individual country holding that is very high. If this is as a final outcome, many CBs will be forced to call in lent gold and buy. I have reason to find this to be as fact!"

"Date: Sat Mar 07 1998 20:17
Psilver Psyched ( @Another ) ID#216217:
The USA has been openly courting Venezuelan oil?

Mr. Psyched,
Please reread the most recent posts from Another. Your question should be: Why would the USA buy most of it's oil from Venezuelan when it would be far cheaper to buy it from the ME using gold? It is possible that the new oil bid will come about with the introduction of the EURO and give that currency the oil backing!

If the EURO is backed with gold in a large way, oil may be purchased with EUROs and even a smaller amount of gold!"

"Date: Wed Mar 25 1998 23:58


Date: Wed Mar 25 1998 23:13
Junior ( ANOTHER @ ) ID#248180:
Copyright © 1998 Junior/Kitco Inc. All rights reserved
It appears to me that the strongest position of Oil Exporter Nations outside of the USA is the "Threat" or actually the "Move" to full production resulting in very cheap oil for an extended time period. Does this equal the "Change" or trigger the "change"?

I do not understand?

You state: "The USA/IMF and its' Hegemoney currency could not withstand cheap oil prices."

Mr. Junior,
Be very sure to understand this: They can "stand cheap oil prices". But, it is the loss of having the US$ removed as the "world reserve currency" that makes them "fight" a lower oil price, and the new "world oil currency" that it would bring!

Bring this thought into focus and you will inderstand why Iran and Iraq did fight so long. And why Iraq invaded. The warships are an attempt to keep prices from "falling"! You think long and hard on this!

Look now and see if the US dollar does not "fight" for a high oil price! In every way, the question of supply disruptions is shown as the need for other suppliers. But, other suppliers cannot produce at a lower price? If the gulf states are allowed to bring oil "down" to it's true "fair" production price, in terms of a "correctly higher revalued" gold price, the US dollar would no longer be priced and backed by oil. Any paper trading currency would do. I would say, "if the Euro is strong in gold, and crude oil is allowed to be devalued by gold at $10,000 to $30,000, then all other paper currency reserves held against the EURO would be , "for show?"

"The world is going off the dollar standard as the dollar is going off the oil standard ", find this event "in your time"! We watch this new gold market, together, yes?"

Yes. How can we not? It's happening right in front of us now.


MKBelgian: Gold as a utility (smile)#1407451/22/06; 11:09:03

Gold is many things and different things to different people.

It is an insurance.
It is wealth.
It is a hedge.
It is an asset of last resort.
It is money.
It is vehicle for profit.
It is adornment.
It is savings.

For you or I to define it as one thing only is to deny its utility to any number of people to use as they see fit.

More than anything, gold is a financial tool. And just as a hammer can be used to drive a nail, it can be used to tear down a wall. So gold can be an insurance, a representation of wealth, a hedge, an asset of last resort, a money, a vehicle for profit, an adornment, a form of savings -- any or all of the above depending upon the need of the individual utilizing it.

Given any population sampling around the world, if you were to ask the question -- "What is gold to you?" -- you would have a distribution across the spectrum listed above. Since no one has done that as yet, we cannot ascertain the result with certainty.

After more than thirty years of meeting the needs of gold investors, I can tell you without equivocation however that that 90% of the people who contact our offices open the conversation by telling us that they wish to buy gold to protect themselves. You can label that any way you like. I use the word "insurance" for the most part to contrast my viewpoint with those of others who see gold as speculative, investment vehicle purchased to make a return. I don't have a problem with gold for profit (we supply people all the time who have that as their goal); it's simply that most people don't buy gold for that reason. I hope by my reference to gold as an "insurance" to convey the essence of gold ownership from my experience -- asset preservation.

By the way, I recently had the opportunity to purchase ten Kim Thanh from a Viet Namese client I met through this web site. Some of you may recall the story in "The ABCs of Gold Investing" about the Viet Namese couple that sold me their Kim Thanh in the 1970s to finance a new business in the United States. These were boat people who got out of Viet Nam with nothing but the clothes on their back and the Kim Thanh they brought to me to raise funds. Some years later I sold my Kim Thanh and regreted it all these years. Needless to say, I was very happy when I was contacted with more Kim Thanh.

I will ask Randy to photo it and put it up at the site so all can see what Kim Thanh looks like. For me, this small circle is comlete. I bought that gold before the 1970s gold bull market. So now I have my luck back -- a good omen for all.

Allow me to conclude with the following from the first chapter of The ABCs:

"I kept those golden Kim Thanh for many years. They became
something of a symbol for me—a reminder of the
power and importance of gold. Today, when economic and
financial problems have begun to signal deeper, more fundamental
concerns for the United States, I still remember that
Vietnamese couple and how important gold can be to a family's
future. Had the couple escaped with South Vietnamese
paper money instead of gold, I could have done nothing for
them. There was no exchange rate for the South Vietnamese
currency because there was no longer a South Vietnam!
Wisely, they had converted their savings to gold long beforethe helicopters lifted U.S. diplomats off the roof of the
American Embassy in 1975.

Over the years, I have come to understand and appreciate
the many important uses of gold—artistic, cultural, economic,
and industrial. Gold is unsurpassed for jewelry and as
a high-tech conductor of electricity. Gold has medical applications
in dentistry and in treating diseases from arthritis to
cancer. Gold plating is used in computers and in many other
information-age technologies. All of these pale, though, in
light of gold's ancient function as money. As an asset of last
resort, gold makes its most important contribution to the general
welfare. Through the many economic debacles in human
history runs one common thread: those who survive financially
do so because they own gold. In recent years, gold has
regained its glitter among American investors. This renewed
interest in gold is not so much a hedge against the devastation
of war but against something much more subtle—the potential
destruction of wealth from an international collapse of the
dollar and a subsequent economic breakdown.'


As you can see, Belgian, I remain consistent in my description of gold's redeeming qualities. I do not say what I say about gold to challenge you. Gold is a big tent that holds many beliefs and viewpoints -- including yours and mine. Let's not narrow the field by demanding that others hue to our own definition of the metal and its most appropriate uses. In the end, can any of us truly define gold (by a single word)? At the same time though, we can agree on its utility with respect to the owner.


And yes the winter sky here is orange and blue.

Go Broncos!

Belgian@MK#1407461/22/06; 12:06:33

Now I do agree with your fine (complete nuanced) post for 100% ! And as an established bullion trader, you are very well placed to communicate "all" gold's utilities.
But...of course, but...

Will the future 3 decades of gold be a copy of the past 3 decades, you describe correctly !? Yep they will : The emphasis of gold's many utilities is already shifting towards the "wealth" function ! And you are gradually going to meet old and new clients who's gold perceptions have changed, are changing.

Just like gold's perceptions have been build (!!!) during the past decades. The one word for gold will gradually (increasingly) become "wealth"...on a broder and broader basis.

States and international institutions, were "always" concerned (rather worried) about the general public's perceptions on gold ! Of utmost importance.

The established gold-houses in Brussel and Paris developped that expert feeling about their clients (gold public) perceptions and actions (buy and sell goldmetal).
I don't know about your clients, but here folks have started to look (experience) gold, fundamentally different. And what is most important...this change in gold perception is very little based on its recent price rise but rather on a much more general feeling.

In lilliputan land, Belgium...we are having now more and more gold prizes (1 KG bars) in public contests. Same is happening in Germany and Russia. This never happened before ! And it is not happening accidentally and/or temporary.

And let us agree on the fact that most of the past 5 milliniums, Gold's main utility was definitely associated/linked to wealth (consolidation and reserve).
And this happened under many forms of course.

Gold for profitable trade (through leverage) will make (much more) place for gold the wealth consolidation. It is this shift that I wish to bring under the spotlights as to provide all gold owners with another idea about the future (another purpose) of their goldmetal.

Of course, goldmetal should be traded. Wealth must have a minimum of liquidity. But in order to have gold evolving towards its full wealth status...the present forms of gold-trade must change also. And it is exactly here that we are seeing/feeling a shift towards a more/broader (global) conservative look on gold.

The forces that are presently moving gold's behavior, also changed from the past 3-7 decades. The general public (sheeple) will follow...are already following ! They will go on buying and selling goldmetal for 1001 different reasons. But their goldtrade "behavior" will change gradually, because the gold forces are working on gold's (new) perceptions through new gold fundamentals.
This is happening on a global scale in many different forms of course. And the goldmetal advocates (consultants-hum) are gaining the overhand, worldwide.

Belgianerror > correction#1407471/22/06; 12:08:27

...Yep they will NOT...
Caradoc@Goldilox#1407481/22/06; 12:11:33

You get the credit/blame for me checking into the urban survival site on a regular basis.

Here's snip of their latest:
* With all due respects to whale lovers, the biggest story out this week, which will likely prove a driver for all other international events in short order, is the revelation that Kuwait's oil reserves are not even near what they were supposed to be and that Peak Oil is a real problem - right now, now 10 or 20 years off in some hypothetical future somewhere. That's why the price of oil was up again this week, coupled of course, with the problems afoot in places like the Ivory Coast and Nigeria.
* A Bella Ciao article (specifically point #3) today alleges that U.S. banks are receiving instructions from the Department of Homeland Security that in event of an economic collapse, bank officials may be told not to allow people to remove gold (and we assume silver) from their safe deposit boxes. Now, this is only an allegation, but it's something to ask yourself: If there were a breakdown of civil order, how would you fare? Ask your bank next time you go in there.
* Part of the reason why the US Dow Industrials blew off more than 200-points in the Friday frenzy was the word that Iran is moving virtually all of its financial assets to Asia, a move that is synonymous with throwing in with China/Russia as we postulated earlier in the week.
* We also speculated that Iran and Syria almost certainly have a secret (or not so secret now) mutual defense pact in place. Stories about that are starting to percolate up through the media fog today.



OvSMK#1407491/22/06; 12:13:29

Yesterday I made a 450 mile
roundtrip (nice to get away
from the family) to a table-
tennis tournament. While I
was driving along I thought
more about MK vs.Belgian.

The function of gold is in
the mind of the beholder,
defined by his financial
and physical circumstances.
Gold is the only uncorrupted
anker for a world-monetary-
system and the only true
measure of wealth; all other
functions can be replaced by
other means.


SmeagolKim Thanh#1407501/22/06; 12:54:18

Yess, Ssir MK we would like to ssee these... and more!

How about an 'art' gallery, with high-quality images of all the different bars and coins of the World? And people could contribute images of rarer ones or ones you (CPM) doesn't have on hand?

Jusst a thought...


Belgian@OvS#1407511/22/06; 13:11:22

It is NOT the naked theoretical/academic truth about gold, that is of greatest importance...but... which aspect (out of many) that "they" want to be (officially) attributed (associated with) to gold !!! "They" >>> being the gold-controllers (or mangers, if you prefer) on duty (in power).

Main problem with this (mine) theory : The general public (gold loving) does not like to hear this. It confuses them...and certainly when it is disturbing their personal vision (perception) of gold...that often fail to evolve sufficiantly. Dominated by confusing doubts. That's why the goldprice management + official statements (in combination) are so important for the building of the general public's perceptions on gold and MANY other items.

And BTW, this (theory) also happens for 85% in our global debt-driven-political-economies !!!

If "they" want the public and states to leave gold alone..."they" simply repeat the 1976-1980 event : Push/power the goldprice skyhigh and shoot it down. I don't see this happening, anymore. Watching the goldprice-behavior of the past decades + all the guiding official statements...I stick to the "process" theory. No devastating drama during the initial launch period (present) into revaluation stratosphere.

And the CBs goldctions had to be labeled as "goldsales" rather than "redistribution" for reasons of global gold-perceptions (and other reasons of course)!
The general public is as stupid as simply accepting that the UK (and other CBs) is as stupid as to sell half of its goldreserves at AT-lows ! What a joke.
And now, the general public is told that the goldprice is rising because (the stupid) CBs stopped selling gold ! Jesus !

CBs and international institutions...HAVE BEEN MANAGING THE WORLD'S GOLDPRICE ALREADY FOR MANY DECADES !!!!!!!!!!!
This is NOT a new fenomenon in an historical context.

And what we saw in this present decade is NOT a temporary fenomenon that will fade away and bring gold back in line with the general perceptions that were builded in the past 3 decades (since 1971).

How many different deceptive lies are we going to have served about the evolutive oilprice !? How can we possibly check the oilreserves in Kuweit (or many other places), when 98% of the commentators hardly know where Kuweit (or Kazakstan) is located ?

But it is no secret at all for the general public, that the era of cheap (seemingly valueless) oil, is definitely over. Soon, the perceptions on oil's -value- will have changed regardless of all its utilities. Same story is building for gold !

bskijaGreenspan#1407521/22/06; 13:14:14

I think the criticism of Greenspan is unjustified. Didn't he warn investors about irrational exuberance? What did they do, laughed at him. He was well aware that the country was in big trouble if they didn't change their ways (they didn't). In order to try to fix the economy temporarily, because the country and the people were getting deeper and deeper in debt, he tried to buy time with artificial bubbles and by lowering interest rates. This action only put off the day of reckoning. He was well aware of this, but was hoping a miracle would somehow happen. The government and the people continued to spend their butts off. The peoples’ savings went to a minus number. To address inflation he had to increase interest rates. As a result, more and more people who purchased homes that really were not qualified to do so, found it impossible to keep up with the mortgage payments. Home owners joined into the party by using the equity on their homes to buy their butts off. What will the banks do if they don't get paid? They will sell the owners’ homes. This will increase the supply and lessen the demand there-by lowering the price of homes. Some of the new laws passed in Congress will emasculate peoples’ ability to buy and to meet their obligations. The people used their plastic to obfuscate their dire financial situation. Do people know at twenty five percent interest their debt will double in less than three years? Since two thirds of the economy depends on the consumer buying things, how will they accomplish this when they will be unable to do so? Look not at Greenspan, but rather the government and the people that you see when shaving in the morning.
RAPGold IRA question?#1407531/22/06; 14:14:51

I have all my savings in a gold IRA.
Is it time to cash it in?

RAPcorrection!#1407541/22/06; 14:30:29

Not cash it in but roll it over into gold in hand out of the goverment eyes.
Thoreauly@ bskija #1407551/22/06; 15:00:49

I apologize for the length but cannot resist:

by Bill Bonner

I, Alan Aurifericus Nefarious Greenspan, Chairman of the Federal Reserve Bank, holder of the Medal of Freedom, Knight of the British Empire, member of the French Legion of Honor, known to my peers as the "greatest central banker who ever lived," (I will not trouble you with all my titles. I will not mention, for example, that I was the winner of the prestigious Enron Prize for distinguished public service, awarded on November 1, 2001, just days after Enron began to collapse in a heap of corruption charges) am about to give you the strange history of my later years.

For I will dispense with childhood…even with young adulthood, and those dreary sessions with that terminally dreary woman, Ayn Rand, who couldn't write a compelling sentence if her life depended on it. I'll also dispense with my own dreary years at the Council of Economic Advisors, and pass directly to the time I spent as the most powerful man in the world. For here are my real titles: Emperor of the world's most powerful money, despot of the world's largest and most dynamic economy, and architect of the most audacious financial system this sorry globe has ever seen.

Yes, I, Alan Greenspan, ruled the financial world. But who ruled Alan Greenspan? Ah…I will come to that, and tell you how, while presiding over the biggest boom ever I became caught in what I may call the "golden predicament" from which I have never since become disentangled.

This is not by any means the first thing I have written. I have written much over the years. But it was all written for a purpose, which only a few were able to discern. Most readers foolishly saw the cluttered mind of a dithering economist or the clumsy, stuttering pen of a professional bureaucrat. Many listening to my wandering speeches and twisting sentences thought that English was not my first language. They thought they detected a faint accent, like that of Henry Kissinger or Michael Caine. They mocked me as "incomprehensible" or "indecipherable." They watched what they thought was an obsequious bureaucrat squirm. They had no idea what I was really up to and what I can only now reveal.

But they admired me, too. I knew it. Because they saw in me a kind of genius…a Bernoulli of banking…a Newton of numbers…a Leibnitz of lucre…a Copernicus of currency. My mind worked at such a high pitch, they believed, that my thoughts were inaudible to most humans. They counted on me to keep the great empire's economy trundling forward. Little (actually nothing) did they know of my real thoughts and designs.

But now, all has changed. Now, I can write clearly and speak the truth. For now I am leaving my post. There is no further need for me to dissemble; no further need for me to pretend to kow-tow before Congressional committees; no further need to hide the real facts from my employers and the American people. Now, I swear by the gods, what I write comes from my own hand, and not from some overpaid, anonymous flack.

Some are born in crisis, some create crisis, and others have crisis thrust upon them.

Let me begin at the beginning. Scarcely had I settled into to the big chair at the Fed when a crisis was thrust upon me. And it is true, I responded in the conventional manner. There is no manual for central bankers, but there is a code of behavior. Faced with a financial crisis of any sort, a central banker's first duty is to run to the monetary valves and open them. This I did in 1987. I was new to the job and probably didn't open them enough. The U.S. economy lagged its rivals in Europe for several years. My old boss, George Bush, the elder, lost his bid for re-election in 1992 and blamed it on me. I resolved never to make that mistake again. Faced with a slew of challenges, shocks, uncertainties, crises and elections…ever thereafter, I made sure that every valve, throttle, level, switch and sluice gate was wide open.

But it was on December 5, 1996, that I had my first epiphany. That was the year that I made my celebrated remark about stock prices. I wondered aloud if they did not reflect a kind of "irrational exuberance." In truth, whether they did or did not, I do not know. But what I came to realize was this: 1) People, especially my employers, actually wanted prices that were irrationally exuberant. And 2) they could become far more irrationally exuberant if we put our minds to it.

I was 70 years old at the time. I had weaseled (why not be honest about it?) my way to the top post by knowing the right people and by making myself generally agreeable, and helpful, and by not saying anything anyone could disagree with. That was the original reason for what the press called "Greenspan speak." My private thoughts remained mine alone. All the public and the politicians got was gobbledygook, but for good reason.

They would not have wanted to hear what I really thought. So, I did not tell them. For I knew well and good what generally happened when politicians and central bankers got their hands on soft money and a compliant central banker. I was not born yesterday. They use their control of the money to cheat people. It is as simple as that. (I explained this early on in my career; fortunately, no one bothered to read what I wrote. Otherwise, I never would have gotten the job.) If central banking were an honest métier, there would be no reason to have it at all. Private banks could do the job better.

But people are ready to believe anything. Somehow, they think that a collection of rich financiers and power-mad politicians got together to create and run a central bank for the benefit of the people! Well, I've got news: it doesn't work that way. Money is only valuable when it is rare. It is like stock in a company. The shareholder is happy to hold a few shares. But imagine how he would feel if the company issued a few million more shares. His own ownership of the valuable thing is diluted. He would be cheated.

Likewise, an honest banker cannot dilute his depositors’ money. He cannot create real money "out of thin air," as if he were issuing new share
certificates, without cheating his clients. But that is exactly what central bankers do. They issue a certain amount of currency. Then, they issue more and more of it. So, the people who got it and saved it lose a little bit of the value each year. In effect, the value is lost by the savers holders and captured by the people who control the currency. It is really a very simple swindle. Who but an octogenarian Fed chief, on his way out the door, would have the courage to say so?

People today act as if they had invented money themselves. But money, central banking, and currency debasing have been around a long time. In 64 A.D., Nero decreed that the number of aureus coins minted from a pound of gold would increase from 41 to 45 (each coin would be about 10% less valuable). The silver denarius, meanwhile, lost 99.98% in the five centuries before the sacking of Rome. Paper sheds value even faster. The dollar has lost 95% of its purchasing power since the Fed was set up to protect it in 1913.

A successful central banker, in the age of compliant paper money, is one who is able to control the rate of ruin so that the rubes don't catch on.
A little bit of inflation, they believe, is actually healthy. Haven't the economists told them so? Issuing a little bit more money each year makes people feel richer…so they spend more; they hire more people; they build more houses. Everybody is happy. Everyone feels richer. What an elegant fraud! It's almost a perfect crime, because no one objects as long as it is done right. (My replacement at the Fed, Ben Bernanke, specializes in controlling the rate at which central bankers can steal from dollar holders without getting caught. He says that if necessary, he'll "drop money from helicopters" should the currency fail to lose value fast enough. I predict that there will be a lot of people who will want to drop him from a helicopter…for reasons I will explain here.)

I return to my narrative. After I made my remark about "irrational exuberance," I was called into Congress. The politicians who confronted me were the usual oafs and know-nothings. They made it clear that if I wanted to hold onto my job, I would have to stop worrying whether asset prices were too high; instead, I would need to do all I could to goose them up! It was on that very day, I recall it well, that what I had previously seen only in foggy theory came out into the clear, bright daylight of applied central banking.

No one wants honest money. No one. The politicians, bankers, investors, voters, and householders – anyone with a voice in the matter wants "easy"
money. It is just too delicious to resist. (I wondered what kind of a central banker would stand against them; he would need a backbone of titanium like Paul Volcker, and a head as thick and hard as a vault.) Debtors want a little inflation to lighten their burdens and put a wind to their backs. Creditors want inflation to swell their asset values. Politicians want to be re-elected. Businessmen want customers with money to throw around. Is there anyone who doesn't appreciate a little inflation?

And yet, of course, I always knew the answer. Easy money only works by defrauding people into thinking they have more money than they really do.
Easy come; easy go. They get it; they spend it. Before you know it, you have a boom. But people soon adjust their expectations. Prices rise to catch up to new money. Debt levels increase, and with them come heavier debt service costs. The magic fades. What can a central banker do? He can do the right thing. He can "take the punch bowl away," as my predecessors used to say. But this is where the trouble begins. Take away the punch bowl, and they begin punching you! I recall they burned Paul Volcker in effigy on the Capital steps when he did it. They would have burned him alive if they could have gotten their hands on him.

Why should I, Greenspan, suffer such a fate? No, it was not for me. This was the "golden predicament" I faced. Yes, I knew well that the nation would be better off if the punch bowl were removed, but I knew that I would be removed too, if I did it. And I knew, also, that it would be just a matter of time until the pressure for easy money would overwhelm any resistance a Fed chairman could put up. No pure paper money system has ever lasted. People can never resist the temptation to make the money easier and easier…until it is so wobbly and woozy it falls on its face. It's better that it falls sooner rather than later. It's better that the lesson is taught now, rather than 10 years from now. It's better that the lean times come on the next man's watch, not on mine! That's what I owe to old Ayn; she taught me who rules Greenspan - Greenspan! Ayn taught me the number one rule: Look out for Numero Uno.

I remember it so clearly. I was sitting in a House committee hearing room. My tormentors kept asking questions. I kept giving the kind of answers for which I later became famous…answers that didn't say anything. And I thought to myself: if these lardheads want easy money, I'll give them easy money. I'll give them the easiest money the planet has ever seen! I'll give it to them good and hard!

And so, I did.

Since I joined the Fed, outstanding home-mortgage debt has jumped from $1.8 trillion to $8.2 trillion. Total consumer debt went from $2.7 trillion to $11 trillion. Household debt has quadrupled.

And government debt, too, exploded. The feds owed less than $2 trillion in the second Reagan administration, a figure that had been almost constant for the previous 40 years. But under my direction, the red ink has overflowed like the Nile in flood - to over $7 trillion.

During the two terms of George W. Bush alone, the feds have borrowed more money from foreign governments and banks than all other American administrations put together, from 1776 to 2000. And more debt will be added in the eight Bush years than in the previous two hundred. The trade deficit, too, more than tripled since I've been at the Fed, from 150.7 to 756.8 billion, and will reach $830 billion in 2006. When I came to power, the United States was still a creditor. Now, it is a debtor, with more than $11 trillion worth of U.S. assets in foreign hands, a more than 500%
increase since 1987.

Who can argue with such a record? Who can compete with it? Who would want to?

But that is the smooth, perverse pleasure a cynical old man takes in his achievements. I have practically ruined the nation, and I know it. If you distributed the cost of the federal government's programs, promises, and pledges to the voters, along with the nation's private debt, the typical household, and the nation itself, would be broke. And yet, almost everywhere I go, I am revered as a maestro…saluted as if I were a war hero. It is as if I had won World War II all by myself. The same numbskulls that wanted easy money 10 years ago, now praise me for causing what they call "The Great Moderation," as if there were anything moderate about America's borrowing binge.

Others say that my real legacy is that I finally "made central banking work." Yes, I made it work…just like it's supposed to work, giving the people enough rope so they could hang themselves. That's what they've done. Now, they dangle from a long rope of mortgages, deficits and credit cards.

And I am delighted. Soon, people will be able to see how central banking really works. And poor Ben Bernanke will get the blame for it. He and his stupid helicopters…he almost deserves it.

Psilver PsychedTest#1407561/22/06; 15:58:45

Since a message I wrote on 03/07/1998 was repasted today, I was jst curious if my password still works...
Clink!@ Smeagol#1407571/22/06; 16:03:05

And why stop at coins and bars. Here's a quality image of something you might appreciate ! (Oh, we teases, we