USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
TownCrierIndia's central bank, too, enjoying the MTM paradigm with it's little gold#1470939/1/06; 01:17:06

HEADLINE: Gold reserves value up 49% to $6.6 bn in a year

MUMBAI, AUG 31: Bolstering further the country's creditworthiness, the Reserve Bank of India's (RBI) gold reserves value have increased a whopping 49.19% in the last one year, from $4.4 to $6.6 billion, as on the week ended August 19. This was against a mere 6.5% increase when compared to the previous year.

However in comparison, the total foreign exchange reserve has moved up only by 16.2% from $142.6 billion to $165.8 billion during the same period.

Madan Sabnavis, chief economist at NCDEX Ltd, said, "The increase in value of the gold reserves gives the comfort to the nation that in the worst case scenario, it can pledged for getting loans as happened in 1991 when the country was on the verge of a bankruptcy.

Therefore, central banks would prefer to hold on to gold even though it does not earn any return."

The central bank has categorically denied that it has not converted any additional reserves into gold during the reporting period. "The entire rise in the gold reserves in the last one year is due to the price of gold," a RBI spokesman said.

According to London Fix data, the price of gold increased from $438.6 per ounce to $652.25 per ounce, an increase of 42.5%, during the same period.

This massive increase in gold valuation has taken place when there was a valuation loss of dollar against major currencies.

...Anticipating the US dollar to weaken in the short to medium term, there are few central banks who are contemplating to convert some of its reserves into non-US dollar assets, especially gold — United Arab Emirates being one of them.

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

(Thanks to a friend for handing over this link.)

It's almost tragic to see the mention of gold's 49% gains in one breath, followed closely by a doltish comment that "...central banks would prefer to hold on to gold even though it DOES NOT EARN ANY RETURN."

Forty-nine percent... Hello???

The Reserve Bank of India would have fared better with more gold than it's puny share of holdings, but the famous gold savings of the citizenry stand the country in good economic stead... international purchasing power for the years ahead.

How many central banks' MTM programs have we highlighted over the past couple days?

You, too, can walk in the footsteps of giants.


QValuing reserves#1470949/1/06; 02:40:22

Town Crier.

The trap here is in viewing the denominator on top.You yourself have succumbed it seems.

India's gold reserves have not changed one iota, if the official's utterances are to be believed.

They have just as many gold ounces now as they did at the beginning of the year.

What has changed is the value of the notional fiat currencies that one arbitrarily chooses to value such weight of real, physical material. It is a very basic concept but one that many people seem to have very many problems inverting their thinking towards.

The value of gold is only changes relative to whatever abstraction one chooses to measure value. The WEIGHT of ones reserves does NOT change unless accumulating or dishoarding takes place.

For over 5,000 years it has been advantageous to ones financial well-being to use gold as the primary abstraction of value (the denominaire extraordinaire); the reason being that it is the least abstract of all the yardsticks of value, of which there are many.

TopazAs first days go, not too bad.#1470959/1/06; 02:55:34

1500 odd Contract equivalents is a pretty good start. If we get the 7400 (see Link) OI locked 'n loaded we'd be seeing some real price action let me tell you.
GoldiloxEmployment Numbers#1470969/1/06; 08:19:31


Another day of stats from the Labor Department to digest.
Total nonfarm payroll employment increased by 128,000 in August, and the unemployment rate was little changed at 4.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Payroll employ- ment grew notably over the month in education and health services; several other industries had modest increases. Average hourly earnings rose by 2 cents, or 0.1 percent, in August following larger gains in the prior 2 months.

Unemployment (Household Survey Data)

The number of unemployed persons (7.1 million) and the unemployment rate (4.7 percent) were essentially unchanged in August. A year earlier, the number of un- employed persons was 7.4 million, and the jobless rate was 4.9 percent.

Over the month, the unemployment rates for most major worker groups--adult men (4.1 percent), adult women (4.1 percent), teenagers (16.2 percent), whites (4.1 per- cent), and Hispanics (5.3 percent)--showed little or no change. The jobless rate for blacks declined to 8.8 percent in August. The unemployment rate for Asians was 2.9 percent, not seasonally adjusted.

My favorite number, the U-6 underemployed from table A-12 ran at 8.3% unemployed in August of this year, compared with 8.9% in August of 2005...

The CES Birth/Death model contributed 121,000 new jobs - which may or may not be real as CES is a guestimate kind of number.

To my jaundiced eyes, it looks like when I back out the CES model, the economy gained 7,000 jobs for the month. Big whooop.


More "BS" from BLS.

GoldiloxIntel said to be mulling up to 20,000 job cuts#1470979/1/06; 09:05:13{51E815DD-FB79-40C5-9B6F-8CFDB508FD79}&siteId=mktw


SAN FRANCISCO (MarketWatch) - Top executives at Intel Corp., acknowledging some recent setbacks, said Thursday the company plans to burn off excess inventory, finalize plans to restructure the business, and win back market share for its computer chips.

Intel, the world's largest chipmaker, has started the year on a downbeat note, with first-quarter profit down 38% from last year as demand for its PC chips slowed in the face of stronger competition from its smaller rival Advanced Micro Devices Inc.

Meeting with financial analysts in New York, Intel executives laid out more details about where the chipmaker is headed and what went wrong in 2005.

Paul Otellini, the company's chief executive officer, said he plans to wrap up his wholesale review of the company's operations by mid-summer. The review, announced last week and the first such appraisal since the mid-1980s, may lead to Intel jettisoning non-performing business units or other cost cutting initiatives. The company will cut $1 billion in spending this year.

The CEO was short on specifics but said the purpose is to "restructure and resize" the chip giant to address its changing market. More details in the company's third-quarter earnings conference call, he said.


Dem bones, dem bones.

mikalAn "experiment" and it's afterrmath#1470989/1/06; 09:35:52 Lies About Inflation by Jack D. Douglas - September 1, 2006
"We are spinning down faster and faster in a
vortex of contraction."

TownCrierQ, seemingly you've been missing the most important point.#1470999/1/06; 10:57:22

A more careful reading of my post should help dispell your concern that I've been confusued.

The key issue is that through the fog of paper gold the market value (or call it the real world purchasing power) of gold metal has been grossly undervalued for generations.

As this fog is lifted, through a growing official support for a "free gold" paradigm of price discovery, the market value (purchasing power) of gold will be seen to adjust/correct upward by many multiples, even as currency values may be seen to hold fairly steady relative to things other than gold.

Look again at my post, and I hope you will recognize the significance that gold's nearly 50% gain in market value during the year did not come as a mere mathematical consequence of the dollar (as a measuring stick) shrinking to 75% of its former value -- which the dollar certainly did not do over that time period.


USAGOLD Daily Market ReportPage Update!#1471009/1/06; 15:20:03">
The Daily Gold Market Report has been updated.

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FRIDAY Market Excerpts

Gold softens in short pre-holiday session

September 1 (from Reuters) -- Gold futures in New York pared losses but still ended lower Friday in holiday-shortened trade after the dollar rose on better-than-forecast U.S. August payrolls data, dealers said.

At the New York Mercantile Exchange, COMEX December gold ended down $1.60 at $632.60 after trading from a nine-day high of $635.90 to $628.

COMEX and NYMEX metals settled early at midday. U.S. metals will remain shut on Monday for the Labor Day holiday.

Gold retreated quickly after the dollar gained versus the euro on news that U.S. employers added 128,000 jobs, slightly higher than forecasts for 120,000. But prices pared their fall, supported by doubts about an easy solution to Iran's nuclear stand-off with the West.

"Tensions between the United States/United Nations and Iran should continue to underpin gold in the coming sessions, particularly with U.S. players absent for a long weekend," James Moore, analyst at TheBullionDesk, in a note.

The crisis has supported gold in its role as the tangible asset investors often turn to in uncertain times. Iran, which has defied Thursday's U.N. deadline to stop its atomic work, said the stalemate could only be settled through negotiation.

Russia called imposing punitive sanctions on Tehran a dead end.

Kitco gold analyst Jon Nadler said the increasing pace of mergers in the industry also seemed fundamentally bullish for gold, because it reveals that bigger miners were "really only able to find more gold on the books of competing firms but not that much in the ground anymore."

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

Nathan BrazilTownCrier (9/1/06; 10:57:22MT - msg#: 147099)#1471019/1/06; 16:39:59

TownCrier, thank you for re-stating this most important point, which we all too rarely see and I had forgotten.

I believe the multiplier effect you mention has nothing to do with the dollar, and everything to do with the scarcity of gold with respect to goods and services to buy with it.
Correct? Normally, only the "constant value/yardstick" argument is seen. If freegold can (must?) prevail, the multiplier will be predominant.

Topaz$Gold:$Silver#1471029/1/06; 17:46:09$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339

The ratio keeps tightening here with todays action taking the RSI below 30 as we await the reckoning.
In the past, (except for last Mar-Apr)generally we've seen a bounce off at this level but it'd be a brave soul who'd back it in this time through.
Gold's recent price history (say 10yrs) has been seen to be dominated by supply and demand ...firstly of PaperGold, then, in the last 5 yrs by Bullion.
Imo the PoG uptick we witnessed in ALL currencies 12 mths ago had everything to do with trying to rationalise the Paper Price with Physical Demand "within" the existing framework ...we're still struggling to reconcile this anomaly today.

GoldiloxAn Interview Worth Its Weight In Gold #1471039/1/06; 19:49:36*aid=2589*time=pm


I believe more than ever that a crash is how the debt bubble will deflate. If you plot the DJIA in terms of gold, you will see that the stock market has been crashing relentlessly since 2000 and recently hit a level equivalent to Dow 4000. In other words, if we had begun pricing the Dow in terms of gold in January 2000, it would have fallen by 2/3. It wouldn't be sitting near its high. So the only place I'm wrong about a crash is in the nominal figures. But I think that is coming, too. If I am correct that the crash will be deflationary, it won't make gold go up. People will be scrambling for dollars to pay interest and principal on those debts you mentioned.


A reflection from the deflafla camp. I haven't said I subscribe, so don't shot the messenger. It's always a good idea to weigh both sides of a debate this strong.

Golden LionheartGet him a Guide Dog!#1471049/1/06; 21:04:06

I think we should contribute to a fund to buy Bob Prechter a seeing-eye guide dog. Like Kaplan he is blind to the facts that are set out before him.
Armageddon@Goldilox - Inflation/Deflation in America#1471059/1/06; 23:26:05

I think one good possibility in terms of inflation and deflation in the American economy is a statement by that French Bank Agricole that "The US economy will walk a fine line between inflation (possibly hyperinflation) and a deflationary slump in the next few years. In the short term, we see further reinflation with continuing asset inflation as slightly more likely."

The article was written in January 2006 when gold was just starting to climb signaling inflationary pressures.

I think this means that:

1. Deflation overall comes next due to the slowing of economic activity due to the collapse of the housing bubble and a possible crash of the stock market similar to 1987 (some chart readers have suggested this), and/or more terror attacks and/or war with Iran. The consumer is 70% of the American economy and has been using his home like an ATM machine to support spending. This is being taken away and there is nothing to replace it. Intel plans to lay off up to 20,000 employees, IBM is now basically an Indian company with few high salary American employees mostly in sales and marketing, American manufacturing including Automobiles are getting hit hard by foreign competition (Ford sales dropped 20% last month). Wages adjusted for inflation have not increased significantly the past few years.
===> Gold will move down or move sideways.

2. Inflation/Stagflation comes next due to attempts by the Fed to spur growth by expanding the money supply creating net inflationary pressure to fight the deflation (Helicopter Ben's favorite scenario). The big question is wheather American companies will creates more jobs in America or just ship more jobs overseas because of the need to cut costs due of declining profits. I believe it will be the latter. I read an article recently saying Microsoft is using some of its cash horde to buy back stock not expand employment in America. They are expanding employment in India not America. I receive Informationweek which is a magazine devoted to Information Technology and it seems a major theme is how best to offshore jobs overseas not to create jobs in America. Thus, America will have an increasing domestic money supply and declining or stagment employment which is stagflation.
=====> Gold will trend upwards.

3. HyperStagflation phase will result from continuing Fed monetary expansion and the lack of job creation by American companies domestically in America. In fact, I have a feeling offshoring is going to pick up speed unless the dollar declines in value signifcantly against other currencies.
=======> Gold will go steeply upwards

4. Dollar collapse phase will result either from the American consumer's demand collapsing or decreasing significantly and/or the dollars given to foreigners in payment for these goods and services declining rapidly. Both events would destroy the value of America as an export market for foreign countries. Even if the Fed does not print more money if the value of the American market collapses then exporters ike China, Japan, and South Korea no longer have any need to continue supporting the dollar. They will start to SPEND the dollars they have horded in order to build their down economies. Most likely they will spend on commodities including gold and the dollar will drop significantly with respect to all these exporting country's currencies. The result from the American standpoint is more expensive foreign products which is stagflationary.
=======> Gold goes HYPERBOLIC!!!!

NOTE: Other events such as hedge fund collapses, major bank collapses/scandals could also send the dollar much lower overnight which is inflationary.

Conclusion: The dollar is only supported because other countries in the world want to export cheap goods and services to the American consumer and to the American businesses that support the American consumer and use this money to build their own countries. The American consumer drives 70% of the American economy. If consumer demand collapses or declines significantly or the money earned by foreign countries starts to decline significantly then the dollar will collapse. Foreign countries like China will use their massive horde of dollars to fuel their own economies instead of supporting the American government's debts. China alone has a horde of around 1 trillion American dollars.

GoldiloxGuide Dog?#1471069/2/06; 00:38:35

@ Golden Lionheart,

While I may or may not agree with Prechter's scenario, suggesting he is "blind" is probably naive.

Those who subscribe to a theory that there can be only one possible outcome is just the kind of "mark" that bankster con-men REPEATEDLY take to the cleaners, as the greatest tool of the "CON" is misdirection.

Assure that the marks are concerned with anything but that which is of importance, and then rob them blind at the exact moment they expect something entirely different. Based on the history of wars and economic depressions for those with the deepest political pockets, it's never failed.

Anyway, I think it prudent to examine as many perspectives as I can. When too many people gather on one side of a boat, it usually capsizes.

GoldiloxCasino's Post-Katrina Opening Not All Fun and Games#1471079/2/06; 02:40:57


SAN FRANCISCO - Hundreds of local residents protested the reopening ceremony for a 3.2-million-square-foot luxury resort in Biloxi, Mississippi Tuesday that was timed to coincide with the 1-year anniversary of Hurricane Katrina's landfall in the region.

The construction of the casinos are displacing land that people of color--Blacks and Vietnamese--owned or used to have their homes on and were destroyed...The casinos are buying up all the land in the adjacent areas. They are putting down shopping centers and everything they need for the luxury hotels.

Don Rojas, Oxfam

State officials were on hand to celebrate the grand reopening of the MGM-owned Beau Rivage complex, which includes a casino, 1,740 guest rooms and suites, restaurants, shops, kitchens, meeting rooms, a luxury spa, and salon.

But activists lobbying on behalf of the region's low-income families were not in a partying mood.

"The construction of the casinos are displacing land that people of color--Blacks and Vietnamese--owned or used to have their homes on and were destroyed," Don Rojas of the international humanitarian group Oxfam told OneWorld during the protest.

"The casinos are buying up all the land in the adjacent areas. They are putting down shopping centers and everything they need for the luxury hotels."

In the aftermath of Hurricane Katrina, Mississippi legalized on-land gambling (only water gambling had previously been allowed) and has handed out $5.1 billion in business grants, though critics say too much of that has been given to big businesses like casinos, with little left over to support the state's small businesses.

In addition, of the 60,000 families in Mississippi whose homes were destroyed by the hurricane, Rojas said only about 30 have received cash from the government.

The federal government has earmarked $3 billion for Mississippians who lost residential property to Katrina, but Rojas said that money hasn't materialized. "The governor keeps saying 'the check is in the mail--just be patient.' Now here we are one year later."

Derrick Johnson, president of the Mississippi State Conference of the National Association for the Advancement of Colored People (NAACP), told OneWorld there are a number of reasons for the government's slow response, including a lengthy and confusing application process and an administration of Republican Governor Haley Barbour that doesn't prioritize the needs of the state's poor.

"The recovery process for the average Mississippian affected by the storm is still a long ways out," Johnson said. "Despite all the hoopla around the reopening of the casino, a majority of workers have no ability to plan what they're going to do next."

Johnson is especially worried about renters who he says have received no support from the government--either state or federal.

Such callousness is ironic, says Johnson, because unlike the displaced from New Orleans, who have scattered throughout the country, most Mississippians rendered homeless by Katrina have not gone far.

"You can see the tension and frustration that's built up," he said. "People have been staying close to their homes with their friends and family. Mississippi is a very close-knit state. People are trying to make do with what they have but it's increasingly difficult."


But of course, in the Casinos built partially with government grants, residents now have the opportunity to "win" back their lives - or work for minimum wage and tips dealing cards! Interest form of "recovery".

968Syrian government orders switch from US dollar to euro for all transactions amid sanctions threat.#1471089/2/06; 02:58:13

DAMASCUS - Syria has ordered state institutions to use the euro instead of the US dollar for all transactions in case Washington intensifies sanctions on Damascus, a state-owned daily reported Monday.

SundeckForeign debt jumps to record $494b#1471099/2/06; 04:54:10 Oz, that is, not US of A...but it is all relative...


"The current account deficit and an unrelenting increase in the level of net foreign debt leave the economy open to the vagaries of international capital flows," Mr Koukoulas said.

Sundeck: The US of A is not the only L'le Abna having trouble living within its in Oz imports are rampaging, as is the trade deficit...despite terms of trade being the most favourable for 32 years. And the reserve bank is still likely to jack up interst rates to control "inflation". That is not likely to help trade deficit very much. Classic case of not understanding what "inflation" is (ref: Ten Bears post #147089...good one, TB).

If you look at Australian house price increases over the last ten years, they greatly outstrip those of the US of A... It would seem to me that "inflation" has already arrived and now we are in the wages catch-up phase, rather like the 1970s. Jacking up interest rates now is shutting the gate after the pony has perambulated forth...

So many variables to control with just one lever...short-term official interest rates...there has got to be a better way.


mikalThinking outside the box, CONTRARIAN, for investment success and prosperity#1471109/2/06; 09:20:04

Don't Believe Those Inflation Numbers - Mises Institute
| Mark Brandly | September 1, 2006
"Every few years the government revises the CPI, and with each revision the reported rate of inflation decreases."
Incisive essay examines government economic spin
simply with a few documented charts and irrefutable data and observations.
One message- management(and bureaucracy) out of control- becomes undeniable. In the same but slightly different way of MK, TC, James Turk, Jim Willie, John W. Williams and many others.
Though Brandly reveals how painted statistics push many Americans into a higher tax bracket and the ruse behind GDP for example, the size of this essay assures that many more details and implications just aren't covered.

Chris PowellThat's some medium of exchange that can't be exchanged#1471119/2/06; 10:02:48

Chinese Official Opposes
Sale of Dollar Holdings

From Reuters
Saturday, September 2, 2006

CERNOBBIO, Italy -- China would only damage itself if it sold dollars from its $941 billion stockpile of foreign currency reserves, a senior official said on Saturday.

The official, Cheng Siwei, vice chairman of the national parliament, said selling dollar-denominated assets would hurt China by weakening the dollar and the country should diversify its bond purchases.

China's yuan currency this week hit its highest level since it was unpegged from the dollar in July 2005 to float within managed bands. U.S. critics have said the yuan remains artificially cheap.

"The problem we have is that if we sell the existing dollar assets, the dollar will go down and it will hurt ourselves," Cheng told Reuters on the margins of a business conference.

Selling the U.S. bonds China has would be "a disaster," he said. Cheng made similar comments in April.

Asked what China should do to diversify its reserves, Cheng said: "I don't want to flatter the Europeans, but certainly the eurobond is one of the options."

Cheng praised parliament's passage last month of a long-awaited corporate bankruptcy law as a step closer to a market economy.

"We let the market play an important role in supporting the good guys and throwing out the bad guys," he said.

Gandalf the WhiteA "L@@K" at the US$ "Game", for Sir Goldie ! <;-)#1471129/2/06; 10:22:24

This weeks action was FUNTASTIC !
One must acknowledge the the PPT Boyz gave it their best effort ! Look at the efforts on Tues, Thurs, and Fri !
Now THAT is TOTALLY in the Helli-Ben Style of distributing those GREENS !
I will bet that each of the Boyz will get a fake GOLD MEDAL for the effort.
BUT, as one may see, --- IT DOES NOT WORK ANYMORE !
Hold your YELLOW close.

GoldiloxMarket role?#1471139/2/06; 19:12:17

@ Chris,

"We let the market play an important role in supporting the good guys and throwing out the bad guys," he said." - Ching Sewei

Rather strong words coming from an official in an economy with so many "underperforming" loans they don't even have a reasonable tally.

Ha! Ha!

mikalChina wants higher internal consumption, less investment, exports#1471149/2/06; 19:41:05 Bernanke Says China Hard Landing Can't Be Ruled Out: Report
MarketWatch | September 02, 2006
Imbalances such as overcapacity and bad loans
get down-played as long as policy makers talk up "reforms".

ArmageddonTerror Attack on Sept 11, 12? => Will Price of Gold Dive on the day of the attack?#1471159/2/06; 19:58:34

CNN just reported on a new Al-Qaeda Video saying for Americans to convert to Islam. Expert says this may be a sign before an attack.

Well I think this is another indicator that there will be a big terror attack soon in September. Perhaps the Whitehouse already knows an attack is coming? A previous member of this board posted a link to a video of Bush stumbling over a sentence.

August Saturday 19th 2006
Bush confused by earpiece, embarrasses self and nation, again
"We... I made my position clear about this war on terror and I... by the way, the enemy made their position clear, yet again, when they... when we are able to stop them."

After reviewing the video I noticed that Bush already had mentioned the thwarted attempt by a terror cell to use liquid explosives to down aircraft. So when he says the enemy made their position clear "yet again when they..(stumbles)" was he referring to a major terror event in the near future that he had previously rehearsed and prepared a speech for and accidently almost revealed? This is a plausable reason why he stumbled. He realized that he was referring to a terror event that will happen in the future that will not be stopped so in order to clarify which terror event he was referring to he said "when we are able to stop them" to try and recover and refer the listener back to the previously mentioned terror event in Britain that was stopped. Perhaps it wasn't an earpiece malfunction but a stumble where Bush almost revealed a terror attack that will happen in the near future that will NOT be stopped by the government? An interesting interpretation since I have seen polls that say 1/3 of the American people doubt the government's official account of the 9/11 attacks.

In any case if and when there is a major terror attack on the United States gold will go down. Remember that the European Central Banks have at least 160 tons of gold to legally sell before Sept 26 of this year. Also, the very unusual situation where these European central banks have so much gold left to sell in such a sort timeframe adds to the idea of forknowledge of a terror attack in September.

The banks, the Fed, European Central banks, and Japan's central bank will be ready to push gold lower the day of the terror attack. Which means this will be a big BUYING oppotunity for the rest of us!

American al Qaeda: U.S. should convert to Islam
POSTED: 8:35 p.m. EDT, September 2, 2006
Adjust font size:
Decrease fontDecrease font
Enlarge fontEnlarge font

ISLAMABAD, Pakistan (CNN) -- A new videotape has surfaced featuring Osama bin Laden's second-in-command, Ayman al-Zawahiri, and an American member of al Qaeda wanted by the FBI, according to a counterterrorism expert.

The tape, called "Invitation to Islam," runs 48 minutes, expert Laura Mansfield said. Al-Zawahiri speaks for about 4 minutes on the tape, and the American narrates the rest.

Californian Adam Gadahn, wearing a white robe and turban, introduces the message by calling on Westerners to convert. (Watch Gadahn accuse President Bush of not caring about U.S. troops -- 5:42)

Gadahn says that even Americans working with President Bush and British Prime Minister Tony Blair are invited to embrace Islam, but they should hurry.

"We invite all Americans and believers to Islam, whatever their role and status in Bush and Blair's world order," Gadahn says. "Decide today, because today could be your last day."

Mansfield, who is a writer and corporate adviser on the Middle East, Islam and terrorism, said the time reference could indicate an attack is near. Muslims believe that non-believers should be given a chance to convert before they are attacked, Mansfield said.

"This may well be a warning," she said.

The only indication of when the tape was made is a reference to the recent fighting between Hezbollah and Israel, which ended August 14.

Gadahn, also known as "Azzam the American," previously has been featured in al Qaeda tapes and is listed as armed and dangerous by the FBI on its Web site. (Watch why it 'makes sense' to use Gadahn as a spokesman -- 3:29)

He is wanted by the FBI in connection with possible terrorist threats against the United States.

Gadahn appeared on a tape last year on the fourth anniversary of the September 11, 2001 terrorist attacks. He also was on a tape earlier this year, on the first anniversary of the London subway bombings.

Much of his portion carries Arabic subtitles, while the segments in Arabic carry English subtitles. CNN is analyzing the tape.

CNN's Henry Schuster contributed to this report.

Golden LionheartTerror attack Sept 11#1471169/2/06; 20:20:54

@Armageddon. If it wasn't such a serious subject I would fall down laughing at the last paragraph "CNN is analysing the tape"
mikalLoony about lunar and gold to the moon#1471179/2/06; 20:42:51,,5-2338972,00.html,,5-2338972,00.html Star Wars Between Russia, China and US - Business - Times Online - Sept 2, 2006
By their own admission it's not for science, but "politics"
with it's quest for "resources" at an opportune juncture.
Would you say that currency inflation could
be seriously managed while nations subsidize more
and more of these astronomically priced boondoggles?
More signs we shall have the hyperinflation.

Ten BearsReasons for the upcoming debacle #1471189/2/06; 21:54:54

From Jim Willie, Brady Willett, and Todd Always



Will the Greenspan legacy be directly linked to the upcoming crisis in housing and the USEconomy, which is of his own making?"
The crisis will happen on Ben's watch. It is not preventable. Its pathogenesis was designed and laid out carelessly but meticulously by Mr Greenspan.

As the horse of ‘innovation’ leaps miles ahead of the mule that is regulation, the path for the average investor grows treacherous.

So what should happen next time? Put it this way, LTCM should have been allowed to burn. The Fed had the choice 8-years ago: regulate or bailout. They chose the latter, and that has made all the difference.

GoldiloxFox is blocked from giving address#1471199/2/06; 23:36:08


Congressional opponents seize control of chamber
By Manuel Roig-Franzia, Washington Post | September 2, 2006
MEXICO CITY -- In a historic rebuke, opposition lawmakers seized control of Mexico's congressional chamber yesterday and blocked President Vicente Fox from delivering his final State of the Nation address.

Fox, who was adorned in Mexico's green-red-and-white presidential sash, stood awkwardly in the chamber's foyer for nearly 10 minutes before conceding that he had no chance of entering. Surrounded by bodyguards, Fox was handed a microphone, quickly said that he would leave, and gave a copy of his speech to a legislative official.

The lawmakers who commandeered Mexico's congressional building are aligned with the Democratic Revolutionary Party, or PRD, and its candidate, Andres Manuel Lopez Obrador, who is demanding a full recount of the July 2 presidential election results.

After giving up, Fox turned and left the building with his wife, Martha Sahagun. Instead of addressing the legislature, he gave his speech on television, calling on Mexico to mend deep divisions that he said threaten the nation's newfound democracy.

The nation "requires harmony, not anarchy," Fox said in his address.

"Whoever attacks our laws and institutions also attacks our history and Mexico," he added, a thinly veiled reference to Lopez Obrador.

The speech on national television followed the bizarre scene at the congressional chamber, which was also broadcast on television. The latest unrest was part of massive protests and chaos that have enveloped Mexico City's downtown since the election was held on July 2 to replace Fox.

Lopez Obrador, a populist former Mexico City mayor who has led the demonstrations, says that fraud, allegedly committed by Fox's National Action Party, is responsible for his apparent narrow loss to Felipe Calderon. After refusing Lopez Obrador's request for a full recount Aug. 6, Mexico's special election court is expected to certify Calderon's victory within days.

PRD lawmakers rushed the stage in Mexico's legislative chamber, which was draped with a huge Mexican flag, while Chamber of Deputies President Jorge Zermeno tried in vain to get them to return to their seats.

The lawmakers chanted "vote by vote, polling place by place," repeating a phrase that Lopez Obrador and his supporters have plastered on posters for the past two months. Some waved signs that said ``Fox is a traitor," and others lofted Mexican flags.

Fox's departure from the legislative building, which is in the poor San Lazaro neighborhood of Mexico City, capped a strange sequence of events that captivated this city. First, thousands of police officers in riot gear surrounded the legislative building, anticipating an assault by thousands of Lopez Obrador supporters.

The masses of protesters never materialized. Dozens of street vendors who had anticipated a big crowd stood idle on the streets leading to the building. Police officers practiced using their shields to block violent demonstrators, squatting and rising repeatedly. With nothing better to do, many drifted toward the vendors, marching back to position sucking on popsicles.

While the police waited for an onslaught that never came, Lopez Obrador convened his latest in a series of dozens of "informative assemblies" in the large downtown square, the Zocalo, where thousands of his followers have been camping for the past month.

"Only the unjust resort to violence," he told the crowd.


Not a picture of serenity, our neighbor to the south. While this seems headline worthy outside the US, it does not even rate a mention in the LA Times or CNN . . . hmmmm.

Perhaps the globalist labor importers don't want to spread this kind of news.

melda laureFive years ago...#1471209/2/06; 23:37:06

I think this forum has underestimated the power of derivatives, (or perhaps the power of those wielding the derivatives).

On a whim, I went back and re-read all the postings from this time back in 2001. It was quite a lively forum in those days. Comments about Mr Clinton still appeared as Mr Bush still seemed a bit new (and perhaps irrelevant). Black blade's favourite word in those days was "pretty grim" as Japan and even europe were both quite sickly, not to mention the DOW and NAZ in freefall. On the day of the event AEL posts "Towers hit, off topic?" and then several other posts. The rest of the day saw posts that mirror almost all the pointless discussion we hear today on fox news and CNN, and from all the typical angles. Some comments seem prescient now. Others seem only tired drivel. POG hardly moved. That week, EVERYBODY was bailing out the dollar. There were a few rumours of derivatives gear grinding.

About four days before the event there was one last post by FOA, which ended "that is all I will say now, and for the next several months" or something like that. It was well worth sifting through two weeks worth of posts. Then as now, M3 was not growing as fast and the markets showed it. Dr Richebacher was predicting the END. Suddenly after the 11th, the game was jerked in the other direction. Basically over the last five years we have seen a slight imposition on our liberties, and a lot of slow grind in the markets little of which is directly attributable to the bombing or to terrorism.

Terrorism, bombings, wars, hurricanes, tsunamis. Yes they are quite disastrous for those who are victims. Yet there is no appreciable terror premium in oil, nor in gold. The economy (and therefor gold) simply doesn't see it as a problem. Interest rates, housing mortgage bubbles, trade imbalances, derivatives, peak oil, and other broken feedback loops are far more dominant.

The story is unchanged: the dollar is broken, has been for years; international trade is unbalanced and the only way to fix the problem is to find a new basis so that real wealth can trade for real wealth. The future is physical gold. The Ubiquity of nations with mark to market policies say so. Everything else is a dangerous distraction. The gold trail has neither sky-tram, nor rocket sled, nor do we walk it in search of avalanches or rock slides. We walk the trail because the giants walk before.

Perhaps, in time, there will be a Son of Another who will tell of new energies, and a new trail. But that is many long days from here. For the present, the central banks have but one element in the vault.

GoldiloxGold down on Terrorist attack?#1471219/2/06; 23:40:22

@ Armageddon,

Are you suggesting that the US dollar may be "fortified" by a successful terrorist action?

Please elaborate your thinking on the potential dollar and gold market reactions, as I don't follow your "cause and effect".

gePerformance of Gold#1471229/3/06; 00:42:55

Lots of things may be written about the Microsoft Company, but their Excel software, I believe, is a gem. Within Excel there is a worksheet function named XIRR, which is used to calculate the internal rate of return for a schedule of cash flows that is not necessarily periodic. That is, per annum compound interest rate. If this function is not available, run the Setup program to install the Analysis ToolPak. The syntax is, XIRR(values,dates,guess) where "guess" is optional and is not normally used. In one column one writes the dates of purchases of gold. The last row should have today's date. Write +NOW() at the cell to get today's date from computer. The second column has the cost of each purchase. Purchases should be negative numbers according to XIRR function. The last row should contain the mark-to-market value of your gold holdings, and should be a positive number. Now, go to an empty cell, writing +XIRR( and highlight your values, separate with a comma, and highlight your dates and close the parentheses. If all goes well, the cell will display the internal rate of return. Change the format to percentage for clarity. You see your, per annum compound interest rate, due your gold investment.
Armageddon@Goldilox - Dollar, Gold , and Terror#1471239/3/06; 01:19:25

If there is a big terror attack on America then I am saying that gold will probably be surpressed by the European Central Banks and others. Besides selling the 160 tons of gold on the open market to drive down the gold price I am sure there are other tools that manipulators have such as possibly derivatives? I know that traditionally there is an inverse relationship between gold and the dollar such as when gold goes up then normally the dollar goes down and vice versa because they are seen as competing financial products. However, BECAUSE of gold manipulation the dollar could fall and gold could fall or perhaps remain the same on the day of a major terror attack. Gold fell last month when the terror attack in Britain was revealed to the public. Just before I typed this I looked up at the stats above this forum and I saw that the dollar index was down .15 cents and gold was down over a dollar. The behavior of gold would depend also on increased investment demand after an attack including other central banks that need gold. If this demand overwhelms the sellers then of course gold will go up. However, I am betting that if there is an attack then the stock market will crash at least 25% in one day, margins will be called and people(the professional fulltime traders that drive the market) will need to get money from anywhere they can including gold and gold stocks. The European Central Banks will supress gold not because they want to support the dollar but in their own interest in eliminating gold as a competitor to their own fiat currencies. These factors would create downward pressure on the gold price. Now, on the other hand are the central banks of China and Russia and others that are looking to increase their gold reserves. They hold lots of dollars and many Chinese economic advisors has said they are looking to buy more gold, at least 3000 tons if I recall correctly, AT THE RIGHT PRICE. Also, add in other professional investment sources like mutual funds, pensions, etc that want to buy gold and these together will create an upward pressure on gold.

What I think is going to happen on the day of a major terror attack on America is that the dollar will go down against other currencies because an attack on America would slow down the economy compared to other countries. Although this is positive for gold the European central banks will supress the price of gold with the 160 tons earmarked to be sold by Sept 26 of this year. They would do this to make sure gold is not seen as a safe heaven investment that would compete with the Euro. The dollar will go down and gold will go down. When gold goes down far enough perhaps when it reaches $400-$450 per ounce then the central banks of China and Russa and other investors jump in driving the price back up eventually. The time for the small investor to buy is at the bottom of the dip in the gold price. I would love to pick up more physical gold at $300-$350 per ounce. :)

Do others on this board have alternate ideas as to the movement of the gold price in the event of a major terror attack on America? I would be interested to hear them.

melda laureSir 'Lox mssg#147121#1471249/3/06; 01:24:30

"That week, EVERYBODY was bailing out the dollar".

Though I might add, that since we are not in freefall yet, (and the elections are some weeks ahead), that it would be premature to play such a card now. I expect we shall have an indian summer until election day. Only then will Bernanke play the Grinch who Stole RLX.

After all, the WAG came first. The bailout came after the POG spike. This may be the best gold shopping season we'll get for some time, for those lucky enough to have spare fiat.

Armageddon@melda laure - POG price during 2001 attack#1471259/3/06; 01:42:50

If there is another major terror attack soon then I believe the dollar will go down as before. However, with gold we may see a battle of the central banks. The European and American and Japan central banks pushing gold down to destroy any notion of gold as a safe haven investment and the Chinese, Russian, and other central banks buying gold by the ton. I wouldn't be surprised in seeing gold prices swing wildly $100 or more in a single day several times.

During the 2001 attack the price of gold may not have moved because 99.9999% of the traders didn't immediately think to buy gold as a safe heaven since in the many years prior to the attack the American economy was super strong with high tech fueling economic growth and a feeling that all people needed was the American dollar as a store of value. America also didn't have these huge trade and budget deficits it has today. America during 2001 was considered THE superpower so gold was not needed and I think that was why it didn't move because few people thought to buy it immediately after the attacks.

This time it will be different.

melda laure (9/2/06; 23:37:06MT - msg#: 147120)
Five years ago...
I think this forum has underestimated the power of derivatives, (or perhaps the power of those wielding the derivatives).

On a whim, I went back and re-read all the postings from this time back in 2001. It was quite a lively forum in those days. Comments about Mr Clinton still appeared as Mr Bush still seemed a bit new (and perhaps irrelevant). Black blade's favourite word in those days was "pretty grim" as Japan and even europe were both quite sickly, not to mention the DOW and NAZ in freefall. On the day of the event AEL posts "Towers hit, off topic?" and then several other posts. The rest of the day saw posts that mirror almost all the pointless discussion we hear today on fox news and CNN, and from all the typical angles. Some comments seem prescient now. Others seem only tired drivel. POG hardly moved. That week, EVERYBODY was bailing out the dollar. There were a few rumours of derivatives gear grinding.

melda laureThe big bite.#1471269/3/06; 01:44:25

If we follow the playbook of the last time the big apple got bitten, the markets will be shut down, the Central Banks will provide liquidity to the bond market, and gold will have a modest pop on whatever exchange is left standing. It was interesting to review the archives from the first 9/11.

But this is no longer 2001. Then we were still in the bottoming phase in terms of POG whilst the dollar was topping. Today, having another six months to load up at todays' prices (and today's real inflation) would actually be a miracle. The only thing that can stop oil at this point is demand destruction. I'm not sure that works for gold. Perhaps if Mumbai were the target? With what? Scalar-weather drought? I am not even sure any "operations research" has been conducted on Indian gold buying, so the effects may not be easily predicted.

As I said earlier, I think terrorism (and catastrophism generally) is overrated as a POG mover. And that goes for derivatives and the dollar too. Most derivatives "accidents" have happened under blue skies (LTCM was precipitated in part over the Russian Bond mess). I would be more interested in Bernanke's plan for the MBS market. But MBS has little to do with gold (other than interest rates- easily papered over with more IR derivatives I suppose). Now a screw up with the ETF allocation, or shorting- THAT would be good for some fireworks.

melda laureCanuck 9/12/01 #: 61294 Gold pre disaster 271 (!!!) post disaster $275#1471279/3/06; 02:42:51

"This time it will be different."

I agree with that much. As I said earlier, there was real fear in the lead up to 9/11. It is easily forgotten nowadays, but the markets had been in freefall throughout much of august 2001, which accelerated in september. The market was ripe for a reversal.

Bear markets develope. The conviction of the players changes on each leg down. Unfortunately, we also have massive interventionism in play, as well as more national security apparatus. This is a market that has seen the death of the VIX. If containment is the goal, then a mere $25 down move may be sufficient. Back in the early days of the gold bull (really, the last days of the gold bear) it was not unheard of for the POG to go SIDEWAYS for weeks during turbulent times almost as if the traders had gone on vacation. $100 moves on POG serve but one purpose- wiping out small players in futures. Thus they are more likely on the down side. And that is a gambit best played after a wild run up as we had earlier this year.

Its all fair weather sailing as long as the casino is open. Recall the words of the House master mssg #61167 "Due to the size of public reaction and the extraordinary market constraints of the day, Centennial is currently willing and able to arrange for business transactions with our list of established clientele only. Our sympathies are extended to all those who have lost colleagues and loved ones in these horrific acts...

Fortunately CPM were up an running almost normally within a day or so. As I recall, I had an order still in the mail from a week before. It eventually arrived about two weeks later, but in the meantime I went to the local shop to unload more fiat.

And a snippet from #61304 (9/12/2001)
That aside, the specific aspect of "liquidity" that is now dominating the thoughts of the banking world these days is not in regard to the market trade in various assets mentioned above, but rather, it is in regard to the vital maintenance of liquidity among INTERBANK SETTLEMENTS.

And by sir Belgian (9/12/01; 05:10:14MT - msg#: 61255)
All An explicit "demand" by the US * NOT TO TRADE AGAINST THE DOLLAR * ! Voila. The ECB responded, positively and immediately. No more long and boring tirades about "total manipulation" necessary. There is an explosive amount of FEAR underneath the Alladin flying carpet.

So there is the answer to Sir Goldlox's question, I suppose. Though a look at the chart indicates that gold rose somewhat in the days after, and the dollar fell. The only thing in superabundance was TV coverage and liquidity.

My whole interest in reviewing the archives pre-9/11 was to ascertain what were the key issues at the forefront of the discussion. These issues have not changed. Though the superabundance of easy credit has dulled the senses. You will notice that when gold prices are calm, the traffic at the forum goes down and the tenor of the posts becomes a bit dull. It is a fairly decent buying indicator of sorts.

Well, the castle is asleep presently, so if you will excuse me I think I will go out and count the stars.

TopazBonds. The other little arm wrestle..#1471289/3/06; 04:49:12

FOMC Sept 8 Can't cut ...can't raise ...can't stand still.
Butch and Sundance would know what to do!

The Invisible HandHigh back-stage drama — a place called IMF#1471299/3/06; 06:09:21§ion=opinion&col

Paradoxically, the United States, the most powerful behind-the-scenes cast member, and thus the largest beneficiary of the status quo, has been the most aggressive at pushing for governance reform. To its immense credit, the Bush administration, under the direction of (relatively new) US Treasury Secretary Henry (Hank) Paulson and Treasury Undersecretary Timothy Adams, has written a screenplay for a new IMF.
Under the US version, the IMF would have some new leading players. The greatest weight added would be from East Asia. The reform would spotlight higher-profile governance roles for China and South Korea, in addition to Mexico and Turkey]
China will have the lead, but you can also pencil in a top-tier role for Japan, which still has a much larger economy than China, and which at some point should be given a permanent seat on the UN Security Council before too long. India, though it often moves like a tired elephant, is also in the ascendant, as is Indonesia, the Muslim capital of the world. And it would be nice to imagine what it would be like to live in a world with a united Korea for once.
Not everyone, to be sure, is thrilled to be moved into the background. Europe is especially grumpy about the US push, and some countries are actually opposed. They need to take a deep breath, execute a reality check and accept their supporting roles. There are Oscar possibilities, you know, even for those not in the lead.

The Invisible HandDollar fascism - the gold story GATA will never tell you#1471309/3/06; 07:22:48

Remarks by Chairman Ben S. Bernanke
Before Leadership South Carolina, Greenville, South Carolina
August 31, 2006
One of the most important economic developments in the United States in the past decade or so has been a sustained increase in the growth rate of labor productivity, or output per hour of work.



It serves to hide the colonising dollar financial imperialism and to give it heroic status.

At the end of the day, it is all about the essence of dollar fascism, the collusion between state and its central bank on the one hand and the captains of the US of A finance and industry on the invisible.

The John Wayne cowboys who are fighting this dollar fascism think that the euro is the same evil as the dollar. They are wrong.

The productivity of those JW cowboys originates in their GLOBAL GLOBALISING dollar-fascism.


Their so-called productivity is a consequence of the mobility of their dollar in the global dollar sea vis-à-vis the immobility of "labour".

Capital which is constantly on the move looking for the highest return while leaving exploited poverty behind. Plunder expeditions are indeed very productive.


Alan the Great and Ben the Helicopter are the Goebbelses of dollar-fascism. The dollar regime accompanies its globalising colonisation with a dollar-heroic propaganda.

Dollar-fascism cannot tolerate that Arabian oil gets the atom bomb because this would mean the end of the petro-dollar (Pax Americana). Israel received the bomb, but not for its security but only for perpetuating the petrodollar.

The wise continue to accumulate gold because the petrodollar may not be perpetuated.

In the meantime, the Arab world remains faithful to the dollar (while of course accumulating gold), but if the dollar would encounter inflation and the euro would not be faced with such inflation, the Arab world could switch its allegiance.

It seems indeed that the global power balance is changing.

Commander of Islamic Revolution's Guards Corps (IRGC) Major General Yahya Rahim Safavi said Saturday that events in recent decade show that the balance in world power is changing.
"America's claim to make the world unipolar in economic, political and security aspects has failed and the world is moving towards multipolarism. "A big world power will possibly appear in the Asian continent centering in China, Russia and India," he added.
Safavi said that the 25-member European Union (EU) will emerge as the big world power, adding that the world of Islam with its 57 UN member states, who are also in the OIC, with a population of 1.5 billion and a total area of 37 million square kilometers, or one fifth of the earth's surface area, possessing 50 percent of the world energy can serve as a world big power in the coming decades.
Under the banner of Islam and owing to the culture of monotheism and faith in the Prophet Mohammad (PBUH), fifty seven Islamic states can achieve convergence in economics, such as formation of a common market and banking system, close cooperation in the domains of culture and tourism as well as signing defense and security treaties.

And Israel also remains faithful to the dollar, but the world, it is also changing there.
Israeli exports to the EU will grow 9% in 2006 to $9.8 billion, predicts Export Institute director general Yechiel Assia. The reason is the renewed strengthening of the euro against the dollar in recent months. Exports to the EU grew 10.6% in 2005 to $8.3 billion, and they had been predicted to increase by 10% this year.


Gibson's paradox is an economic observation made by J. M. Keynes during the period of the gold standard that there is a correlation between interest rates and the general price level. Keynes' finding, which he discusses in "A Treatise on Money" (1930), is a paradox because it is contrary to the view generally held by economists at the time, which was that interest rates are correlated to the rate of inflation.

The paradox thus teaches that gold should move inversely to interest rates (real interest rates being the difference between the interest rate and the inflation percentage).

Since the creation of the plunge protection team after the 1987 crash, this is no longer the case.

RUBIN and SUMMERS managed to let a decreasing interest rate being accompanied by a decreasing price of gold.

This the best proof of DOLLAR-FASCISM.

The same Summers who in his article with Barsky "Gibson's Paradox and the Gold Standard" published in the Journal of Political Economy (vol. 96, June 1988, pp. 528-550). demonstrated that falling real long-term rates will lead to rising gold prices absent government interference in the gold market, and thereby underscored the futility of trying to control the former without also controlling the latter.

See the real rates and gold chart here

Fortunately, the birth of the euro put some limits on this fascism. We got INVERTED YIELD CURVES which have since continued to grow.
In 2000, we had an inverted yield curve (where short rates are higher than long rates). On September 1 the 3-month bill was at 6.27%, 0.59% higher than the 10-year yield, which was at 5.68%.
The inversion of the yield curve would top out four months later at a negative 0.95%. At such levels, the yield curve was telling us the probability of a recession was better than 50%.
Today, the 3-month bill is at 5.01% and the 10-year is 4.73%, for a "mere" inversion of 0.28%; but that inversion is rising, as the 10-year note is dropping faster than the 3-month.

We got negative real interest rates and this underpin gold, of course June 24, 2003

As the Chicago Sun Times puts it this morning
An expanding economy, a record string of double-digit quarterly earnings increases, and historically low bond rates add up to a perfect formula for rising stock prices, right? Well, not so far this year.

It seems that the birth of the euro resulted not only in the all times height of Wall Street but also in interest rates going back to normal vis-à-vis gold and even tending to deviate in the other direction.

But this is the part of the gold story which GATA will not tell you, as this would force GATA to discuss the gold euro.

The Invisible HandIndia set to be world's gold hub !!!#1471319/3/06; 07:45:21

"The government is taking and will continue to take all possible measures aimed at making India the gold hub of the world,"
India thus is no longer be looked as a price taker or price seeker of the gold.
"we, therefore, have the potential of becoming a price-setter in the international market."


A *** PRICE SETTER *** of gold can synergetically only benefit from marking its gold reserves to market prices.

The fact that the ECB (and the European System of Central Banks) has instituted the MTM (mark to market)-concept of gold reserves means that it wants to develop a totally NEW gold price fluctuation.

If the ECB would not have had that intention, it would have remained within the parameters of the dollar fixed gold price regime.

Why, the heck, does nobody want to see this?
How long will we have to wait until the sheeple awakens (and the price of gold explodes?)

The Invisible HandWithout the gold-euro, Emgland is set for socialism#1471329/3/06; 08:04:29
When Philippe Varin, the chief executive of Corus, complained last week that high energy costs were hitting the steel company's profits, he knew about the problems as both a consumer and a supplier.
The French businessman believes GOVERNMENT INTERVENTION in the energy market is essential.
"The energy question is absolutely critical. The short-term market cannot sort out the problems we saw last year. You can have a perfect market, but at the end of the day, if there is not enough gas in the pipeline, the price goes through the roof – but you still have a scarcity."
Varin explains why he believes such issues must be handled by the state rather than solely by private enterprise.
"On questions of infrastructure, when you have to look at projects in 10 or 20 years, interconnecting companies or developing new capacities, if you just have the market doing it, it won't happen.,,2095-2340014,00.html
Philippe Varin, chief executive of Corus, the Anglo-Dutch steel company that includes the rump of British Steel, said the group's energy costs would go up by £140m this year — more than two-thirds of which was related to increases in the UK.
"This is an issue we have raised with government. At the moment we are hedging for this winter at £60 per megawatt hour, while our RIVALS ON THE CONTINENT are paying half that. This puts us at a particular disadvantage," Varin said.
The situation was unlikely to improve unless pressure was brought to bear "to make the European market in energy work," he said. "We need more gas storage and more gas connectors with the Continent."


Today's energy prices are still subject to "normal" monetary devaluation, i.e., inflation.

The invisible hand is a metaphor created by Adam Smith to illustrate how those who seek wealth, by following their individual self-interest, inadvertently stimulate the economy and assist the poor. In the general opinion, in The Wealth of Nations and other writings, Smith claims that, in capitalism, an individual pursuing his own good tends also to promote the good of his community, through a social mechanism that he called "the invisible hand".

With the gold-euro, no need for government intervention.

The Invisible HandRe: my msg#: 147129 of today#1471339/3/06; 08:38:09§ion=opinion&col

High back-stage drama — a place called IMF



Yours invisibly observes:
In the last decennium, it has become VERY clear that the IMF's one and only function has been to provide, in the crises which it had itself caused, exit or escape funds for western bank-creditors buy-outs).

Yes, Indonesia, Mexico, Brazil, South-Korea and Argentine got the message.

The IMF is thus a GOVERNMENTAL (Ni dieu, ni maitre!) institution which allows western banks to get the money they lent back without any further trouble, be it that the country in crisis will be put even more in crisis due to capital flight and the imposition of "temporary" austerity measures until everything which has any value in the country will be seized to pay the debts.

All those IMF reforms will result in nothing substantially and will lead Asia to conclude to being less cooperative in global financial/monetary matters. The problem of the imbalances will thereby never be solved.

This is the sword of Damocles which remains above the head of the dollar.

This absence of cooperation from Asian nations will probably determine what will happen to the new gold reserve concept.

A diver (the dollar) swimming under a layer of ice (the dollar international financial and monetary system) knows that her oxygen (dollar-hegemony) runs out and that there must be a "hole" somewhere … GOLD.

FlaccusIH#1471349/3/06; 09:11:29

It's not a gold euro. It's just a euro. And in average currency terms a "weak" euro at that. Talk about dollar fascism what about the fascism the euro has imposed on its unsuspecting citizenry? A fascism England resists?? By your definition, all national currencies are fascistic.

Also by the time the Islamic revolution issues its own currency, we will all have beards to the floor.

FlaccusIH#1471359/3/06; 09:32:20


And what is the euro if not "COLONISING, HEGEMONIC and IMPOVERISHING"?
How many states were subscribed to the euro by popular vote?

968@ Flaccus#1471369/3/06; 09:33:15

"And in average currency terms a "weak" euro at that."

Can you elaborate that statement, please ?

Flaccus968#1471379/3/06; 09:44:15

It is a socialist currency issued by socialists. It is no better or worse than any other fiat currency except in the eyes of those who issue it.

The European citizen has just as much reason to own gold as the American or British? Do you agree or disagree with that statement?

FlaccusCorrection#1471389/3/06; 09:48:24

The European citizen has just as much reason to own gold as the American or British. Do you agree or disagree with that statement?

(Dropping the question mark)

968@ Flaccus#1471399/3/06; 09:50:31

I agree with you that it's in everyone's interest to hold physical gold.

I don't see WHY the euro is worse than e.g. the dollar.
Can you please explain me WHY the exchange rate of the euro has gone from .80 to 1.28 against the dollar ? And how all this is related to socialism ?
WHY did a euro-unit of account gained more purchasing power than a dollar-unit of account over the last six year, and how is socialism involved in that ?

The Invisible Handdemokracy#1471409/3/06; 10:00:12


You ask:
How many states were subscribed to the euro by popular vote?

My question:
You mean demokracy? What do you BY demokracy? And is that a value?

I thought demokracy was about a majority of people, not of states.

By the way, by which majority were the states themselves put into place. We – me and myself – the people?

Someone will say: Yes, Socrates, but cannot you hold your tongue, and then you may go into a foreign city, and no one will interfere with you? Now I have great difficulty in making you understand my answer to this. For if I tell you that this would be a disobedience to a divine command, and therefore that I cannot hold my tongue, you will not believe that I am serious; and if I say again that the greatest good of man is daily to converse about virtue, and all that concerning which you hear me examining myself and others, and that the life which is unexamined is not worth living - that you are still less likely to believe. And yet what I say is true, although a thing of which it is hard for me to persuade you.

Does truth need a majority?

Flaccus968#1471419/3/06; 10:02:14

I'm sorry but I have neither the time nor the inclination to educate you on the relationship between socialist economic policy and currency value. That is something you will have to undertake yourself.

Please note though I did not say it was "worse" I said it was "no better or worse" than the dollar or the pound. My wording is precise, please quote me directly or not at all.

Why on relative currency values? Because the dollar has declined against the euro. What is the mystery there?

Chris PowellGATA has been telling the dollar imperialism story from the beginning#1471429/3/06; 10:04:53

Invisible Hand, GATA has been telling the dollar imperialism story from the beginning. Dollar imperialism always has been a big part of GATA's explanation for the gold price suppression scheme. Dollar imperialism was cited specifically in the Dawson Declaration, adopted at GATA's Gold Rush 21 conference in Dawson City, Yukon, Canada, on August 9, 2005, which is posted below. And your own posting here cited Reg Howe and his Golden Sextant Internet site. Don't you know that Howe was GATA's first consultant and supporter and that GATA financially underwrote his lawsuit in U.S. District Court in Boston against the Bank for International Settlements, the U.S. Treasury, the Federal Reserve, and other involved in the gold price suppression scheme?

* * *

Adopted at the Gold Anti-Trust Action Committee's
Gold Rush 21 Conference
Dawson City, Yukon Territory, Canada
August 9, 2005

Having come to the heart of gold country to inquire into the condition of the monetary metals and the industry that produces them, we conclude and declare:

* While governments affect to have no use for them anymore, the monetary metals are of greater importance than ever because of their ability to hold value independent of arbitrary government power. So ownership of and free trade in the monetary metals are basic human rights against expropriation.

* While the monetary metals are unique as assets of intrinsic value that cannot default because they are no one's liability, this also has become their crippling weakness. For in being no one's liability, the monetary metals have had -- unlike their competitors, government-issued currencies -- no sovereign defenders.

* Indeed, for years now the monetary metals have had few defenders at all, the gold mining industry's trade organization having been dominated by short-selling corporations that have obtained metal at the sufferance of the issuers of government currencies, the central banks. This has left the monetary metals almost helpless against competing currencies.

* Since they issue competing currencies, governments have a powerful interest in suppressing what is perceived as the value of the monetary metals. Governments have
achieved this suppression through strategic and often surreptitious lending and dishoarding of their metal reserves. While it is seldom officially acknowledged as such, this is the manipulation of currency and commodity markets that should be free and transparent.

* This manipulation of the currency and commodity markets has become the primary mechanism of imperialism, projecting and maintaining the power of the international
reserve currency, the U.S. dollar, and its issuer, the U.S. government, and compelling other countries to sell their exports for less than fair value.

* To assist in the suppression of the monetary metals and at the urging of the International Monetary Fund, IMF member governments engage in deceptive accounting of their gold, deliberately confusing gold in the vault with gold that has been leased or swapped or whose ownership otherwise has been impaired.

* In the absence of a government currency's direct and fixed convertibility to the monetary metals, the only purposes for government reserves of the monetary metals are
currency intervention and market manipulation. To preclude this manipulation, governments should sell their reserves openly by a date certain.

* As defenders of the monetary metals, we do not necessarily maintain that they should be the only means of exchange. We do not worship the golden calf or the silver bull; we are not idolaters. To the contrary, we believe that individuals and nations alike have the right to decide what they will use as money, even as we acknowledge that freely traded gold and silver are simply the most convenient guarantors of economic liberty.

Accordingly, we will support an international monetary metals council that will:

* Defend the crucial place and purpose of the monetary metals and the industries that put them into circulation.

* Encourage the use of the monetary metals as parallel official currencies and in commerce and savings.

* Investigate, expose, and oppose attempts to subvert the monetary metals.

* And give the monetary metals a sovereignty of their own, the sovereignty of humanity beyond nations.

FlaccusIH#1471439/3/06; 10:16:26

Please do not quote old and shelved Greeks to me. I am a Roman. And live the Roman way. Our way is to act while the Greeks can only sit around and talk philosophy like they have some sort of monopoly on the mental process.

As for your question, whenever you accuse one of hegemony, colonialism and forced impovershiment, shouldn't you look for the same in that which you put at the apex? Since you like to discuss these matters through the prism of Greek philosophy, shouldn't we consider what might be the "ideal" instead of playing "politics", i.e. my currency is better than your currency?

FlaccusIH#1471449/3/06; 10:19:18

There should be a smile after that first paragraph 147319. I like you hold the Greeks in high regard.
FlaccusWhoops#1471459/3/06; 10:23:30

Make that 147143. These old eyes are playing tricks.
SpartacusIran#1471469/3/06; 11:08:01

@ melda laure

Five years ago... I posted this:

--- Spartacus (9/14/01; 01:33:39MT - msg#: 61447) A global clash between the West and Islam.

A clash of civilizations is under work.

It would be catastrophic to allow last Tuesday's terrorist attacks to result in a clash of civilizations. A global clash between the West and Islam will lead to huge tension between the West!

Washington and London are in a desperate need to install a clash of civilizations, but equally desperate to stop it are Berlin - Paris - Moskow.

Things will get ugly. ---

Spartacus: The Bush Administration got their clash of civilizations..... first in turn was Iraq and forward to this day... What country lies between Iraq and Afganistan?.... well Iran of course.... The Bush Administrations Grande Finale is soon upon the world, if nothing is done about it. "The Only Thing Necessary For The Triumph Of Evil Is For Good Men To Do Nothing"

CamelNWO#1471479/3/06; 11:12:56

Wouldn't it be a a hoot if Bush and Iranian president Ahmadinejad did have a debate. While there at it why not get some of the other world leaders to debate . There is your NWO. All under UN sponsorship of course and with strict guidelines as to the questions . Get the population problem under control, manage the energy situation, achieve an equitable distribution of wealth through globalization of manufacturing .And of course free gold. The US would have to admit it has had an "exorbitant privilege" and the dollars come home like "wet snow on the roof."

Maybe looking at it from the long term the market has done OK in preparing for $70 oil. I remember in the sixties the old Oldsmobile used to get around 12 MPG. After the oil shocks of the early seventies new technology (Japanese)came on the scene and many people switched to 4 cylinder vehicles. Also there was the beginnings of the CAFE standards. Energy consumption in this country dropped dramatically in the late seventies and did not return to former levels until about 1998, even in the face of increasing population.

Gas used to be 35 cents per gallon, then up to 1.25 now, 2.75 and the gradual transition has so far occurred without any major problems ( except for those it the bottom) Of course there are some that predict the collapse of civilization ....die-off.... what ever and if they are right then maybe the market has not done so well

IMO the Iranians have emerged as the only representative of a civil society in the whole wretched Mideast. They have been the victor in their decades old struggle with Iraq. They have acted with moderation and have cooperated with the occupation . They are the big winner , and they speak with pride in their ancient civilization.The bellicose threats of our government represent another misjudgment of the situation.

Who wants to have some wretched rag-head under the heal of your boot.. Let them flower like China and I suspect they will become considerably more moderate . And of course the old rules of " assured mutual destruction" still apply to nation states.That's not appeasement .

When that last generation prints the last dollar of the giant ponzi scheme and the population falls to 3 billion we will have achieved paradise. The end of growth . Until then better hold on to your gold.

CoBra(too)In the Context of Chris Powell's latest Post;#1471489/3/06; 11:20:37

Hi Chris,

Thanks for that one and also refer to John Perkins' book:

"Confessions of an Economic Hit Man!" - a replay of the interview is on this weekend's financial sense.

It bolsters your views, GATA's and finally mine as to the sorry state "imperialism" has finally managed to undermine this great nation, the U.S.A and its constitution as well as the hegemonial powers of a real global reserve currency by delinking it from the reality of gold (or even silver)as "the anchor" to stability.

This has worked throughout history - and everytime this boundary has been breached the result was the total collapse of the empire, along with its legal tender currency and military might - sometimes overnight!

Seems to me we're close to this kind of realization, as the overall debt burden is unprecedented by history, but the show must go on ... at least up to the November, 7 elections.

Looks like this global(-ized) fraud is finally approaching
its endgame. It will be ugly, though better than to prolong it for even worse consequences...
- if that's possible at all!

968@ Flaccus#1471499/3/06; 11:54:00

"I'm sorry but I have neither the time nor the inclination to educate you on the relationship between socialist economic policy and currency value."

Sir Flaccus, I perfectly understand you don't have the time to educate me.
I will be more than happy if you could only show me some practical examples between socialist economic policy and currency value in the euro-system.

Thanks in advance.

KnallgoldEuropes socialism#1471509/3/06; 11:54:28

"WHY did a euro-unit of account gained more purchasing power than a dollar-unit of account over the last six year, and how is socialism involved in that ?"

Without socialism,the euro would have gained even more.There is certainly room for improvement,but you need to have perspectives :-)

ANOTHER point closely related here,Switzerland will vote soon about an initiative calling for directing the profits of the SNB into the social security system.Now you can think whatever you want about central banks,but linking them to directly finance the welfare state will surely create a socialist monster of unprecedented proportions.Money and politics should be separated as far as possible.

In polls,a majority of the people is for the initiative.Time is almost up to change this,but the vote will be won with arguments,and not money my friends!

The welfare statists are licking their chops as they think to have direct access to the printing machine.

FlaccusNo, Sir/Madam 968#1471519/3/06; 12:25:44

we are not going to play this game. You answer my question first.

I asked if you agreed with my statement that "The European citizen has just as much reason to own gold as the American or British. Do you agree or disagree with that statement?"

You stated that you believed it was in "everyone's interest to hold physical gold." I didn't ask if it was in everyone's interest. I asked if you agree with the statement that " the "European citizen (please note use of the adjective "European") has as much reason to own gold as the American or British."

Do you aree or disagree with that statement? Please exclude any qualifiers or ambiguities.

GoldiloxStatism, Socialism, ism, ism, ism. . .#1471529/3/06; 13:18:18

Whether the welfare function of statism reveals itself in expensive social programs or bailing out politically connected corporate structures are really two sides of the same inflated coin.

Not unlike Reagan's small government rhetoric combined with the largest growth in military welfare spending and off-budget foreign covert ops up to his time.

Whether the inflafla is distributed in "market bubbles", through direct gov't spending, or via "social contracts", it is all still the same inflafla ripoff, enriching the Money Masters at the expense of the serfs.

Bizarro-GreenspanPerkins#1471539/3/06; 13:55:49

Yes,I've read his book,thinking that it might have been ORO writing it.

Perkins is just bobbing in ORO's wake,his depth of knowledge on this subject is little more than treadbare.

If you want credible information on how the FRN based monetary system "works" and the nefarious "means" used to justify the increasingly dubious and dangerous "ends",read ORO's thoughts.

Right here at USAGOLD

Bizarro-GreenspanAn inconvenient truth#1471549/3/06; 15:02:17

"Moreover, any asset, regardless of location, that is denominated in dollars is a US asset in essence. When oil is denominated in dollars through US state action and the dollar is a fiat currency, the US essentially owns the world's oil for free."

Henry CK Liu


The US conquered the world in 1945,the world runs on US issued money as a result of this fact.

Yes,there is now over 8 trillion in unpayable debts owed by the US government,every year that number goes up by another trillion or so,give or take.

This situation gets ever more inane,year in and year out,yet'somehow the system still functions in a reasonably
coherent fashion.

As long as the major commodity producers continue to sell their output in US dollars,the US dollar is,in fact,fully redeemable in a broad based basket of essential commodities.

It has a value based on "real things" that are essential to all nations,in order to have a properly functioning society so that it can feed and employ it's people.

Therefore,there are no limits to the ability of the US to continue to create dollars that have a redeemable value to anyone exchanging goods or services for them.

Here's Henry again...

"World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies. To prevent speculative and manipulative attacks on their currencies, the world's central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold more dollar reserves, making it stronger. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973."


We are now confronted full on by the much ballyhooed "energy crisis" of the 70's,only this time it's very real.

The strategy chosen by the US to alleviate this "problem" is to seize the energy reserves located in the Middle East and Central Asia.This idea was also prevalent in the '70's as a solution to the US' insatiable appetite for the world's resources and the inability to pay for them through the trade mechanism forced upon other nations by the US sourced institutions such as the IMF and the World Bank.

So,it's not new,by any way'shape or form.Those of us who knew this all too well in the 70's are not very surprised by the current promotional campaign carried out against the members of the "axis of evil".

So,new US dollars are being created in vast amounts by endless wars for "democracy and freedom" in the lands that also happen to sit upon vast lakes of hydrocarbons and/or pipeline transit routes.

All these dollars have "value"'so they are gladly accepted by merchants servicing the world's largest economy.

If perchance,the war for democracy and freedom fails,if the US people finally "wake up" to what they have become,the energy crisis could also be solved in the Homeland through domestic means;a massive debt expansion to develop and utilize all domestic forms of energy.Cost is of no object,the money can easily be borrowed from international creditors or just conjured up out of thin air by the money making authorities.

It's the ultimate prisoner's dilemma,we are all in this together.To try to affect massive monetary system change now would be catastrophic to all players on the little blue planet'so we will all carry on regardless.

The multi generational war promised to the western societies by their leaders does not really have to go on as planned,there are many,many other non-violent solutions to our common problems.

All it really takes is for people to say "NO,your solution is immoral,dishonest and totally unacceptable."

It has to start in the US,because they make the world's money,and by obvious extension,the world's policy.

ArmageddonChina's situation with 1 trillion dollars in reserve#1471559/3/06; 17:21:02

Referring to a previous poster's link to an article about how China can spend its 1 trillion dollar reserve without lowering the value of all their other dollars I have an idea.

Since China is actually a market oriented "SOCIALIST" economy as declared by the communist party that runs the country and not a free market economy where private propery is protected by the constitution if an emergency situation occurs then key foreign assets could be nationalized and American dollars could be used all at once to pay for these assets. The foreign companies would have no recourse since the law is determined by the Chinese Communist Party and not the court system. Of course if there is any money left then China could buy GOLD with it for its Cental Bank reserves. :)

mikal"Gold to $2500" and beyond #1471569/3/06; 18:39:03 Telegraph | Money | Monday View: Even The Sophisticated Are Attracted By Lure Of Autumn Gold | Ambrose Evans Pritchard 09-04-06
"Sophisticated" speculators, black boxes and seasonal strategies kick off this commentary that ends with high expectations.

HenriInteresting ... who got the better deal?#1471579/3/06; 20:04:41

My son is going off to college and my parents were here to help send him off. My father is 83 and he went to college after returning from WW2 as a veteran. He overheard what it would cost for a semester of meal plan $530/15 weeks for all-you can eat at a sitting. Works out to about $3/meal or $35/week. My father told my son "When I went to college I paid only $20 a week for my meals." It was then that it struck me. I said to them, "when you went to college $20 was an ounce of gold. Today that would have been the equivalent of $625/week". equivalent to $9,375 for the semester.

I am thinking we have a better deal these days but it really just illustrates the effects of govt manipulation of the "$ price" of gold. Both got meals for a week...the same deal. It is the cost that tells the tale. A man had to work very hard back then for that $20. I am thinking, I don't have to work near as hard for that $35 dollars. Has the dollar really lost 99% of its buying power since those days? It would apper not for important things like institutional meal plans...only 75% or did it? $35 is equivalent to 1.75 gm gold today and $20 was 1 full ounce of gold back when. Almost seems like the "official currency" of the US has gained purchasing power by 1777%.

What's wrong with this picture?

The Invisible HandChris and Flaccus#1471589/3/06; 22:19:18

I concluded
"But this is the part of the gold story which GATA will not tell you, as this would force GATA to discuss the gold euro."
Gata still doesn't discuss the euro

Flaccus was asking how many states had voted for the euro.
It's the Greeks who invented democracy. That's why I had to invoke them.

On this forum, I may masturbate intellectually as much as I want about gold, but as soon as I start talking about the status of the greenback, many readers get annoyed.

This makes it even more strange that Gata does not want to talk about the gold euro.

If this is not the example par excellence of dollar complacency, what is it?

What if the Sunni and Shia Muslims would stop being rivals and decided to solve the Middle East according to their own model and not according to the model imposed by the west?

Jama, this is no joke.




Redefining America's Islamic enemies in the Near East, President George W. Bush and his top aides now present disparate entities, such as Sunni terrorist groups like al-Qaeda; and radical Shiite and other organizations like Hezbollah and their alleged state sponsors of Iran and Syria, as a "united front" against Western civilization, an argument that may be used as part of reasoning for military action against Iran.
At the end of the day, the United States most likely will face the dilemma of striking Iran or trying to contain a "terrorist" Iran armed with nukes. Many observers here believe that Bush, his Vice President Dick Cheney and Rumsfeld, despite all odds, would not allow Iran's religious regime to get away with nuclear weapons. "The ideological struggle of the 21st century" would pave the way to "the mother of all wars," to quote Saddam Hussein.
Lessons for Turkey? The Turks should be prepared to see the worst in their region.

We think gold could go up a lot this quarter if the dollar starts to fall fast," he said.
Quietly, Moscow is buying and Russia's foreign reserves ($258bn and rising at $12bn a month) will soon match those of the entire euro-zone.
There can no longer be much doubt that the US housing market is crumbling. New home sales fell 21.6pc in July from a year earlier and average prices are following, down from $250,000 in February to $230,000 in July.
What will happen to the global economy when Americans stop drawing $600bn a year in pocket money from home equity, or when $2,700bn of floating rate mortgages come up for adjustment at much higher interest rates?
Gold will soon have to make up its mind whether it is a commodity like the rest of them or whether it is a safe-haven "currency" that shines in bad times – a sort of AC/DC asset to hedge against both inflation and deflation.

What's this?,,13130-2341434,00.html



PROLONGED high energy prices and fears of recession are setting back the plans of the European Union's new member states to join the eurozone. Hopes of most of the ten EU states planning to adopt the euro have been put back by up to two years since Slovenia was approved as the 13th country to adopt the single currency from the start of next year.
High oil prices have pushed up inflation in small countries with high rates of economic growth, particularly in the Baltic region.

melda laureI am uncertain about the strategy.#1471599/3/06; 22:55:43

Sir Camel I would agree with your characterization of Iran as being one of the better examples of a representative republic in that region. Generally, when the women are allowed to protest in the streets for voting rights there must exist some degree of respect for the rights of women, which is more than could be said for certain other countries.

Yes, Sir sparticus, it does seem that a clash is in progress, and it is the desire of both the Bin Laden's and of certain voices in the US (and elsewhere). I am less sure of what Moskow wants. But where is gold in all this? The flaw in the strategy is that a clash will not make oil flow.

There is some part of the chessboard that remains hidden from view. I am not certain that the clash is SOLELY about protecting dollar hegemony or securing oil. Perhaps I am attributing genius to what is merely incompetent leadership. Yet something tells me that the giants their own counsels keep, and that there are more humans on earth than their needs require. Subsidizing SUV driving soccer moms is hardly their goal. Could it be that it is better to rule in hell than serve in heaven? If free gold fails do we all reap chaos and a North Korean lifestyle?

"But if doom denies this to me, then I will have naught: neither life diminished, nor love halved, nor honour abated."
-The Pyre of Denethor.

melda laureIran talk is just idle bluster with no strategy.#1471609/3/06; 23:25:23

Sir IH, or anybody. Air power is so fascile: turn Persia into a glowing parking lot, Lebanon East.

How will this make oil flow?
What is the goal?
How will a result different than Iraq ensue?
Or how will another "Anarchist Democracy" help the dollar?

Sir IH, I do not dispute that Iran is a target of neocon lust. Shahmat. Problem is the shah is already dead and this is not the 1950's anymore. (Might be a strategy for Caracas though)

The only result I foresee is that NOBODY (including china) will get Iran's oil any time soon. Perhaps it is a Goldfinger Strategy: Destroy the other guy's production? In that case we should all load up on domestic producers and go and buy bicycles, because the POG/POO ratio is going down to the low single digits, and in the deflationary depression the US will have spare domestic oil to export in exchange for everybody elses gold.

Tell me when we invade iran and I will tell you the date of Peak Oil. And Randy, reserve me a rail car, becuase once the dust settles that's how much gold I'll be able to afford.

GoldiloxWho Really Controls America?#1471619/3/06; 23:58:25

George Carlin's 5-minute perspective on retirement in the "big casino" economy.

By the way, if liberal use of F-bombs in comedy offends you, consider yourself forewarned.

It is Carlin, after all.

GoldiloxConsumption, the new American pass time#1471629/4/06; 00:25:52

After listening to the comedic harbinger by Carlin, I delved into the weekly "Peoplenomics" article by George Ure - sorry, no quotes, as it is only available by subscription.

But basically, he expounds on the obvious similarities of the SM bubble and current housing bubble - both are the product of hyperbolic debt growth . . . and the predictable CB liquidity "response".

The question of the day seems to be what happens when the "bottom falls out" of the current Ponzi scheme? Remember, there must always be a "greater fool".

Will the Wizards behind the curtain be overwhelmed and forced to accept the natural deflationary result as in the 1930's or will they somehow "engineer" a another pass on those expectations?

I tend to believe that the "rank and file" are between as much of a "rock and hard place" as the CBs are. If TPTB allow the natural deflationary contraction, there is a serious likelihood of losing control over that process, and the US 1930's, replete with soup lines, may appear tame by comparison.

If they continue to manipulate their "coalitions of creditors", shoring up the cracks in the dyke will necessitate hyperinflation and even stronger government "intervention", thus more resembling the German 1930's.

Neither scenario is particularly appealing, as when TSHTF, it is never distributed evenly.

The Invisible HandEuropean citizenship and the new world oil currency#1471639/4/06; 00:49:52

Flaccus says
"The European citizen has just as much reason to own gold as the American or British."

By "European citizen", Flaccus means, I suppose, a citizen of Europe, of the EU, or of the euro area.

Here's from the backcover of a1993 book
Elizabeth Meehan, "Citizenship and the European Community’, London, Newbury Park, CA and New Delhi: Sage Publications:
As the European Community develops a programme of social policies at the transnational level, is a new kind of citizenship emerging?
[Meehan] provides a clear account of the development of social rights within the European Community in three key areas ...

Page 149 of the book speaks about the proposed ECB.

What Flaccus means is a citizen of the euro area.

Here's Paul Temperton with his "A picture of Euroland’-paper in: Paul Temperton (ed.), "The euro", John Wiley and Sons, 1998, 2nd ed., 13

p. 13
Euroland is a term which is now commonly used to describe the combined ECONOMY of the eleven euro area countries.

p. 18
In two respects, describing Euroland as one bloc is misleading.

First, Euroland is just one part of the European Union
‘Out’ countries will be heavily influenced by developments in Euroland
Second, there still exist substantial differences within Euroland.
Date: Wed Feb 04 1998 20:24
What are your "THOUGHTS" regarding the major currencies being backed by PM's?
Mr. Junior,
The large modern currencies, of today have only debt ridden economies to back them. They cannot change as debt blocks their path. "To change is to live and to live, some debts must die". The owners of much of this debt must lose if change is to occur. Even the new EURO will not be backed by gold! IT WILL HOLD GOLD ONLY AS INSURANCE AGAINST THE WORST OUTCOME, WAR.
Yes, an oil state comes to mind! It could even be CHINA!
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: Tue Mar 24 1998 20:58
Logical ( ANOTHER ) ID#320219:
" Your proposing an upheaval in international currency- is that why the EMU will be backed by so much gold or do we look else where for the future international currency? Your earlier posts had a much more urgent tone has oils plans been pushed to the right or is the increased gold backing of the EMU a workable solution for the interim? "
The large gold backing for the Euro and the "MUCH GREATER" GOLD RESERVES FOR THE INDIVIDUAL COUNTRIES OF THE EURO, IS A DIRECT RESULT FROM OBSERVATIONS OF GOLD BUYING BY OIL! If it is well known by the BIS that a move by oil to bring crude to $10.00 US, is a precursor to an "new world oil currency", then it is well known to the Euro makers! Gold will be managed back to a range of $320/$360 with much hope for participation of Euro as "the" "currency/gold" payment for oil. My knowledge is that the new range will bring a breakup to the London operation, with the ensuing run by gold to infinity. We will watch this, together, yes? I offer my past thought:

Here's the latest:

Sprechen sie Deutsch? Look at what Weber is saying here. Is there a dollar central bank which has ever uttered such wisdom?

We have been waiting for some sort of announcement from Herr Axel Weber, the President of the German Bundesbank.
"The Bundesbank reserves the right to reallocate some of its gold reserves into foreign currencies but does not plan to sell any to help overhaul Germany's public finances. We've never said that we don't want to sell gold in general. It's conceivable that our reserves could be reallocated somewhat -- from gold into foreign currencies. [In the context of selling to support the deficit] But we don't want to draw on Germany's currency reserves.
It's not a good idea to touch the substance. It would be better to consequently push for the reduction of debts. GOLD IS AN IMPORTANT FACTOR FOR THE CONFIDENCE IN THE STABILITY OF THE EURO.
With such a belief, it seems contradictory to sell even some of Germany's gold. Gold is clearly moving into the position we have expected it to for some years, of supporting currencies where they are vulnerable to a loss of confidence!


Who are the citizens of Euroland?
Are the Indians and Chinese?
Who are the citizens of US of A dollarland?

Do individuals who live in a place where the euro is protected by legal tendership laws have less incentive to buy gold? The question implies the knowledge that euro is backed by gold.

The late Harry Browne taught that for a non-bank, a reserve is an allocation of CAPITAL for possible losses or to meet a legal requirement. (For a bank, it is the money available to meet withdrawal requirements)

EVERYBODY needs a reserve.

be it that those who have euro's in their wallet need proportionally less gold, because gold is an important factor for the confidence in the stability of the euro.

The Invisible HandTax = theft, government = fraud#1471649/4/06; 04:01:11


WASHINGTON (Reuters) - A proposed new IMF lending facility to avert crises in emerging market countries would only be available to those with strong performing economies, sustainable debt and transparent reporting systems, a draft of the proposal obtained by Reuters says.
Fast-growing emerging economies have built up vast foreign reserves as a safe-guard against future crises, but the fund sees the instrument as a way to make itself useful to them again.
The prospect of a crisis prevention mechanism also comes amid increased warnings by the IMF of a sudden correction in global economic imbalances -- the large U.S. deficits versus the surpluses in emerging Asia and oil producing countries.
The IMF stressed it should be made clear from the outset that the instrument would not protect private creditors from losses in cases where a country has unsustainable debts.
Still, the fund said the instrument could reduce uncertainty over the amount of financing and conditions under which countries will be able to borrow.
It also questioned if emerging economies with large foreign reserves would use such an instrument.
The IMF cautioned that it wants to avoid "shifting too far in the direction of a rating agency" as it assesses if a country qualifies for the instrument or not.


The dollar-International Monetary Fund knows that the imbalances become uncontrollable. The current deficits will soon lead to cadavers.

The dollar-International Monetary Fund wants to buffer this inevitability with her – so-called – (read: fake) multilateral involvement.

The dollar-International Monetary Fund only wants to save the dollar-International Financial and Monetary System.
It doesn't mind the collateral damage which will inevitably be inflicted upon defenceless victims.

The so-called dollar-reserves of the surplus producers would have to be mobilised to prevent the knock-out of the dollar-International Financial and Monetary System.

The Chinese (diaspora in East Asia) will teach them who they (the Chinese) are.

The Invisible HandOne more reason for eurolanders to own gold#1471659/4/06; 05:22:13

"Europe is potentially very strong but it's divided and in reality has little weight," a source close to the Belgian central bank said on condition of anonymity.

It's the Indians, the Russians (and the Chinese) who are marking gold to market.

Does this mean that the euro's reserves are located in New Delhi, St Petersburg, and Shanghai?


Iran and Japanese firm Inpex say they are close to finalising a joint project to develop a big new Iranian oil field.
Both sides say they are less than two weeks away from final agreement over the Azadegan field, which is one of the world's largest untapped oil reserves.
Any deal will no doubt raise eyebrows in the US which wants sanctions against Iran due to Tehran's nuclear ambitions.
While Japan is totally reliant upon oil imports, Iran is the world's fourth largest crude producer.
Prime Minister Recep Tayyip Erdogan says Muslim countries has a historic duty to contribute troops for a peacekeeping force in Lebanon and adds that at least as many Islamic countries should send soldiers as European countries.

As I said in yesterday's msg#: 147158
What if the Sunni and Shia Muslims would stop being rivals and decided to solve the Middle East according to their own model and not according to the model imposed by the west?

The Invisible HandThe world as it is#1471669/4/06; 06:29:05

While US attack spending has climbed by about 50$bn each financial year (Oct-Sep)since 2002
in order to keep the dollar regime, and its petro-dollar leg, alive,
through the killing of human beings and the impoverishment of those who are allowed by our masters to go on living,

Another lunatic was reported last June to want to sell oil for euro,

and now India, a country which markets gold to market, opposes the IMF reforms.
US defence spending remained fairly steady throughout the late 1990s but since 2002 it has climbed by about 50$bn each financial year (Oct-Sep).
Chavez, blasting weak dollar, wants euro-denominated crude
He predicted the "end of the dictatorship of the dollar, currency of an empire that will fall in this century." Venezuela is already studying the idea of selling its oil in euros, Chavez said, while adding that he hopes to see the advent of a Latin American single currency analogous to the euro.
Washington - Three of the world's largest emerging markets - Brazil, Argentina and India - opposed an IMF voting reform package that is intended as a first step in boosting the power of developing countries, IMF board sources said on Friday

The Invisible HandEuro-Arab Coalition For Peace in the Middle-East #1471679/4/06; 07:20:59


Enter the United Nations Interim Force in Lebanon (UNIFIL)

The coalition of the willing was a group of nations acting collectively and militarily outside of the jurisdiction of the United Nations mandates and administration.

What is now being built up is a EURO-ARAB COALITION FOR PEACE IN THE MIDDLE-EAST within UNIFIL.

This looks attractive than the anti-Iraq bloc.

Here's Le Monde
Qatar is the first country to have announced its participation to UNIFIL.
Le Qatar est le premier pays arabe à annoncer sa participation à la Finul,1-0@2-734511,36-809203@51-796235,0.html

which is deployed in Lebanon since 1978 but which has been reinforced after the war between Hezbollah and Israel

Le Qatar a annoncé, lundi 4 septembre, qu'il enverrait un contingent de 200 à 300 hommes au Liban, devenant ainsi le premier pays arabe à participer à la Force intérimaire des Nations unies au Liban (Finul) déployée dans le secteur depuis 1978, mais renforcée après la récente guerre entre Israël et le Hezbollah libanais
La force de l'ONU pourrait passer à 15 000 hommes dans les prochains mois, comme le prévoit la résolution 1701 de l'ONU qui a mis fin au conflit déclenché le 12 juillet.

There could 15,000 troops in UNIFIL

Pour l'heure, dix-huit pays se sont engagés à fournir des troupes à cette force, quatorze Etats européens et quatre asiatiques.

For the moment ,18 countries have said they would send troops, 14 European States and 4 Asian State.s
(The invisible Hand: NO AMERICAN STATES)

Le premier ministre turc, Recep Tayyip Erdogan, a estimé que les pays musulmans avaient un devoir historique d'en faire partie. Les députés turcs doivent se prononcer mardi sur l'envoi de troupes. Selon la presse, Ankara mobiliserait entre 600 et 1 200 soldats.
Turkey should send between 600 and 1,200 troops

Le premier ministre pakistanais, Shaukat Aziz, dont le pays examine l'envoi éventuel de troupes, a commencé une brève visite de "solidarité" au Liban.
Pakistan's prime minister, whose country is studying to send troops, made a brief "solidarity" visit to Lebanon.
Turkish Cypriot President Mehmet Ali Talat yesterday embarked on a landmark visit to Pakistan at the invitation of his Pakistani counterpart, Pervez Musharraf

Well, well,
the geopolitical events seem to accommodate the A/FOA story.

White HillsWorld as it is?#1471689/4/06; 10:36:07

The invisible hand, You say," While US attack spending has climbed by about 50$bn each financial year (Oct-Sep)since 2002 in order to keep the dollar regime, and its petro-dollar leg, alive, through the killing of human beings and the impoverishment of those who are allowed by our masters to go on living,"
Again you interject your political opinion into the mix of economic rantings.They are just as vicious and wrong to such a degree as to show your obvious contempt of everything the US does and is in this world. You are not a neutral observer just reporting what others say but constantly at every opportunity slam the US who in your extorted view seems to be everything evil. I don't come to this forum to read such drivel. White Hills

The Invisible HandWhite Hills#1471699/4/06; 10:53:57

You are complaining that I am not a neutral observer just reporting what others say.
Please feel free to be a neutral observer just reporting what I am saying.

YGMGOLD NEWS. (more declining production)#1471709/4/06; 11:38:03

News Today

Australia joins SA in reporting declining gold output

Two of the world's leading gold-producing countries, South Africa and Australia, have posted significant declines in the production of the yellow metal over the past year.

Although South Africa's gold production rose by 1% in the second quarter of 2006, compared to the first quarter, despite the high number of public holidays, its year-on-year decline in production stood at 6,4%.

This was compared to the near-11% decline recorded in the first quarter of 2006, the Chamber of Mines said in an emailed statement, on Monday.

There was a 7,5% decline in the average grade mined, to 4,59 g a ton.

However, the 18,8% quarter-on-quarter improvement in the gold price, as well as more tons being milled, helped to offset this, the statement said.

Now, Australia has shown a 5% production decline for 2005/6, compared to production for the previous year, Surbiton Associates reported in a statement made on Sunday. Australia's gold production fell to 251 t during the period, the lowest production for any financial year in the last decade. The Melbourne-based consultancy said that the full financial year total was almost 15 t less than in 2004/5. It attributed the lower production partly to a rain-affected March-2006 quarter and subdued production in the June quarter. Gold production in the June quarter totalled 61 t, 0,5 t up on the previous quarter.

Since the 1970s, South African gold-mining companies have been faced with numerous challenges, including significant consolidation, escalation costs from mining at depths below 3 000 m and decreasing grades and gold prices, which have resulted in the decline of production.

This has seen South Africa's contribution to the global gold-mine supply from 28% in 1990 to 13% last year.

Meanwhile, Surbiton's statement said that, while there were signs of renewed interest in gold, overall output from established mines had not changed much, but several new companies and new operations were beginning to spring up.

"The higher gold price, with a local record of A$933/oz on May 12, has encouraged some of the junior explorers to get into production as soon as possible," said Surbiton and Associates MD Dr Sandra Close.

She added that while some of these projects were relatively small, others were more substantial.

Some Australian gold-miners were also bringing old operations back, including Gleneagle Gold, at Fortnum, Renison Consolidated Mines, at Tom's Gully, and Haoma Mining, at Bamboo Creek.

"Things look quite buoyant, but it is important to realise that many of these projects have developed from old exploration successes, or from old mines," Close stated.

She went on to highlight that despite increased exploration expenditure for many other commodities in Australia, expenditure for gold had barely changed since the downturn in the late 1990s.

"While gold accounted for some 60% of mineral exploration towards the end of the millennium, this has now dropped to some 30%," she said stressing that gold exploration was critical for the long-term sustainability of the Australian gold industry.

In South Africa, Credit Suisse Standard Securities senior gold analyst Dr David Davis has written extensively on the matter. He has stated that the survival of the South African gold-mining industry depended on the continued replacement of depleted ore reserves by the discovery and conversion of new ore resources.

He argued that a renewed and increased focus on exploration of South Africa's gold deposits was essential to facilitating the replacement and, more importantly, the growth of reserves.

"While it is evident that South Africa's reserve base is rapidly dwindling, an upward trend in the gold price for the foreseeable future will likely mitigate the downward trend in reserves.

Credit Suisse Standards Securities' studies indicated that gold supply was falling behind demand as the diminishing number of new reserves failed to compensate for dying mines worldwide.

Davis had pegged the gold price at $1 200 by 2015.

On Monday, news service Bloomberg said that gold may rise for a second consecutive week on speculation that demand from jewellers and investors will recover, outpacing production from the world's mines.

GoldiloxComplaints#1471719/4/06; 11:53:34

@ White Hills,

You have been challenged a number of times to post resources that debunk what you "believe to be drivel", yet you just wave the flag, and offer NO evidence to the contrary.

Whassup with that? I've read enough of your posts to suggest that you have some basic distrust of the Globalists, as well, but you seem unwilling to ask the important questions when they hide behind our flag.

It's likely that much evidence is manufactured (not unlike the BLS and FED), or distorted, but the Yellow Cake boondoggle makes it pretty obvious that this tactic is rampant from all sides, and it's up to all of us to do the source verification homework - that's why we post them.

I absolutely love America, the Constitution, and the freedoms some of my siblings died to protect. I absolutely hate the SOBs who used their military caskets as vehicles to ply their private drug/arms deals and called it patriotism, garnering Presidential pardons to block investigation when they got caught. Oil, iliicit drugs, and arms sales are the vehicles of power for the current admin.

I demand much more than the "party line", and I will endure some overzealous criticism, checking and rechecking sources, to get a more honest picture of what my "leaders" are actually doing. Their actions speak so loudly, I often have trouble "hearing what they say".

On this day where we honor "labor", it's only fitting to examine exactly who is behind the dismantling of the US manufacturing economy and the US $ for their "Globalist" agenda.

GonlyoldTo Think I Said That - Scary!#1471729/4/06; 12:23:05

@ Bizarro-Greenspan msg#: 147154

""Moreover, any asset, regardless of location, that is denominated in dollars is a US asset in essence. When oil is denominated in dollars through US state action and the dollar is a fiat currency, the US essentially owns the world's oil for free."

Henry CK Liu"

This caught my eye. I said this in so many words when I posted that gold coins with the USA markings on them, e.g., the US gold eagle, etc., are USA titled coins. As such, the US OWNS the coins. The second reason the US owns the coins is Liu's quote above: they were paid for in US dollars. I mentioned that you may want to melt down those coins and have them assayed and re-marked instead. That's up to you.

Now to think that someone, in essence, agrees with me. That's scary! I never thought I was such a good discerner.

No one need reply to this posting. Please let me bask in my own mental uphoria (sp?).

GoldiloxGold "ownership'#1471739/4/06; 12:34:39

@ Gonlyold,

You don't get off that easy - LOL!

The nice thing about gold is it is rather impervious to which Emperor's kisser may happen to adorn it!

And, given even stranger times than those we currently inhabit, its malleabilty makes it easily reformed with a hammer or press.

I watched "Heist" again last week, and was entertained by the director's numerous hints at which form the Swiss gold took after the robbery.

GoldiloxWhat Is Peak Debt?#1471749/4/06; 12:50:42


I will limit the discussion to the US. If one looks at the long-term graph of Total Debt as a percent of the GDP (see graph in the above reference) one sees a Longwave Cycle type of behavior whereby the debt grows for a long period, decades, reaches a crescendo and then seem to fall down rapidly, in a crash-like fashion, and remains low for a long period. Since the process is cyclical in nature, it repeats. Thus, Peak Debt, unlike Peak Oil, is not a theory but an observed reality of our economic system.

What happens at the Peak Debt is that the Total Debt of the economy, as a percent of the GDP, or nominal debt in current dollars, or both, stop going up and start to go down. The last time that the Peak Debt occurred in the US was in early 1930s and I can confidently predict that the next Peak Debt will occur within this decade, because the forces pushing debt higher and higher are reaching a point of exhaustion. The rising Consumption Debt exerts a depressionary effect on future consumption and at some point the debt service reaches a high enough portion of the income that the current consumption must be cut down.

Debt plays an extremely important role in our economic system, especially, if one recognizes that stock market is a substitute debt market. In particular, Consumption Debt, taken on by the households for the express purposes of consumption expenditures (including mortgage debt), plays direct role in income and wealth inequality; corporate profits, hence stock market booms; inflation rate; etc. All these – inequality, historically high corporate profits, and inflation – peak before the Peak Debt. Peak Debt occurs during the early part of the Deflationary Depression phase of the Longwave Cycle. What follows Peak Debt is a long period of depression, as the material and psychological effects of the prior consumption boom linger. All the above are based on cause and effect and not some theory and fully supported by history of earlier episodes. Since these cycles are rooted in human behavior, in this case the predictable behavior of various participants, especially, bankers and consumers, the cycle unfolds in a "clock-work" fashion.

The modern history of Consumption Debt, on a broad scale, especially, on non-essential purchases, is only a century old. Its messiah was none other than Henry Ford. Ford realized that it is not enough to offer great products at a reasonable price but the consumers must be induced to purchase in order to be able to sell more and more product and make more profits. This led to financing of the consumer goods that ultimately resulted in the 1920s boom in the US (very very similar to what has been going on in India over the past ten years). What is new in 2000s, compared with the 1920s, is not just pushing the consumer products, for which financing became a vehicle, but pushing of the debt itself, which now results in later afterthought purchases of big-ticket consumer items. I hope that you discern the difference between the two. PUSHING DEBT HAS BECOME THE EASIEST AND THE MOST PROFITABLE BUSINESS IN THE US OVER THE PAST FEW YEARS. Who wants to take the risks of a producer when financing has become so lucrative? Look at the largest "industrial" corporations in the US over the past decade, or two, and what you see is that they are lot more into financing business than in production business.

BTW, the boom-bust nature of the Longwave Cycle has most to do with debt, hence the "banker's mischief" in creating them. Let me quote my favorite economist, Joseph Schumpeter, "One of the results of our historical sketch will, in fact, be that the failure of the banking community to function in the way required by the structure of the capitalistic machine account for most of the events which the majority of the observers would call "catastrophe."" I am amazed by the fact that blind faithful of the American System don't see the current "reckless mortgage lending" as an indictment of the whole econo-political system as being corrupt. These blind faithful will pay the price in not too distant a future. That is what happens with any blind faith. No system, or human institution, is immune from the control by the Crooks. We can proudly claim to be #1 when it comes to takeover of the econo-political system by Crooks, or as "the Money Bags" had done in England a hundred years ago.

The two largest bubbles of their kind in the US history – the Stock Market Bubble of late 1990s and the Housing Bubble of 2002-06 – over the past ten years are a result of the largest Debt Bubble (or Credit Bubble) in US history.


Jas Jain is one person who thinks the perils of "peak debt" far outweigh the concerns about "peak oil".

mikal@Goldilox#1471759/4/06; 16:20:57

Enjoy your posts. Your opinions aren't bad either. <g>
Re: "Oil, illicit drugs, and arms trafficking are the vehicles of power for the current administration."
Are they THE vehicles? One could surely add porn trade, human trafficking , extortion, blackmail, coercion and bribery IMHO.
But the root, basic power, problem and opportunity
is vested in the people, who get the leadership they deserve.
Very simply, this opportunity is at least two-fold:
*Continue to learn about and educate others
on the true nature of men and woman, thrift, our Constitution and especially the first ten amendments
aka The Bill of Rights, debt, usury, gold, fiat and basic derivatives, the government, modern government sponsored enterprises (GSE's), lobbies, finance and economics.
*Our rule of citizenship that every citizen participate
in electing and/or monitoring government, stay informed
& active(with vigilence).
True since the days of the revolution, protest and rebellion by all available, lawful means and channels is obligatory, be it peaceful assembly, lawsuit etc.
Eventually, every citizen should know the 700 yr old
Magna Carta, Commom law (as defined therein and in the constitution) and the right to trial by jury
(and the supreme implications for every man and
the fate of all men).

Ten BearsGoldilox msg#: 147174 & 147171#1471769/4/06; 16:30:11

I recall writing here some years back, that basing current consumption on debt reduces future consumption. (#105200) Jas Jain has expanded that concept and nailed it! Thanks for referencing the September 04, 2006 Peak Debt commentary by Jas Jain. (

"On this day where we honor "labor", it's only fitting to examine exactly who is behind the dismantling of the US manufacturing economy and the US $ for their "Globalist" agenda".
IMO the number who agree with you on that point increases daily.

While browsing the blogs recently, I came across the following concept.
(Paraphrased) The borrower is slave to the lender. The government is slave to the banking cartel.
If it were not so, would the manufacturing base have been exported (creating foreign demand for dollar debt and other dollar financial instruments)?

Golden LionheartKeep the bastards honest!#1471779/4/06; 17:15:15

Great post Goldilox #147171.
A politician in Australia called Don Chip has just died. In opposition his stated aim was to "keep the bastards honest"
I ask who is keeping the bastards honest in the USA?
Mike Moore and Kinky Friedman are the only ones I know about.
IMHO gold about to it now!

goldeyeThe Dow, Naz and Silver either kissing or very close to RSI 70 #1471789/4/06; 18:25:37

Still may be room for some upside but I wonder if at least some consolidation is in order in light of the high bullishness. I went to all cash on Friday and will just daytrade for the time being. Plus with the mid-term U.S. elections in November it would seem to me to make sense to have a correction in early to mid-September and thus allow a SM recovery going into November. dyodd. fwiw. Jmvho.
GoldiloxKeeping them honest#1471799/4/06; 18:35:51

@ Golden Lionheart,

While I applauded Mike Moore's efforts, the finished product seemed to point too many fingers singularly at Dubya and the NeoCons, ignoring the complicity of the Demo leadership, which was more than likely the political price to get it distributed.

I would add Ron Paul to your list. Anyone who keeps talking fiscal sense in Congress when all around him have lost their heads deserves respect.

I also like McCanney's idea of a Constitutional "reset button", as an attempt to turn back the clock on high office corruption.

White HillsComplaints#1471809/4/06; 20:16:19

Sir Goldilox, Once again I will explain my complaint about the Invisible hand and his political discussions. What I object to is the way he throws in his personal biase with statements like "While -US ATTACK SPENDING- has climbed by about 50$bn each financial year (Oct-Sep)since 2002
in order to keep the dollar regime, and its petro-dollar leg, alive,-through the- KILLING OF HUMAN BEINGS and the -IMPOVERISHMENT OF THOSE WHO ARE ARE ALLOWED BY OUR MASTERS TO GO ON LIVING.
I guess I could just ignore that garbage and anti everything he splashes out of whatever sewer he gets it from but it is very difficult to do that. He can post whatever he wants but I will continue to call him on it.
Slurs like the ones that he flings are impossible to discuss because unless you agree with him there is no starting point from which a dialog can develop.

You are right about my distrust of the globalists. I don't believe in free trade because there is no such thing. What we have is the colonialization of the US from an industrial power to a consumer nation. It can't continue of course but we have to remember that in the wild economic ride since WW11 we have been accompanied by most of the world to their benefit and our indebtedness. White Hills

GoldiloxComplaints#1471819/4/06; 21:10:20

@ White Hills,

There are certainly a growing list of others you might need to convince that the Petro-dollar wars are about things more important than $ hegemony.

While I choose a less inflamatory mode of description, my leaning toward the Money Masters as the ultimate architects of conflict suggests a similar outcome with only slightly different motivations.

As a long time poster, may I suggest you offer alternate resources for the rest of us, even if you believe TIH will not care about them.

We all have our differing opinions, but it's the information sources to which we introduce each other that are of real benefit.



GOLD FINGERWhat has happened to our IMAGE?#1471829/4/06; 21:38:29


Do any of you actually purchase GOLD from our fine Host?

I find it interesting how some try to tackle issues and in reality do not get the point across. With out being political here, only because I have had my hand slapped, I do have to say that irregardless who is in power now or who might of been in power or who was in power in the past. Most will have to agree that the us troubles could be avoided with better diplomacy and how we are seen abroad. It's simple, yet not practiced! I think many of our friends and enemies have just had enough of the arrogant west. Like I heard the comment today to conserve OIL! Now, talk about lack of VISION and leadership......That's what they tried to do in the 70's...HELLO!....

I think that the DOLLAR'S troubles stem not only from trillions of in indebtedness, but from how others in the world view the US. Remember the 80's? Strong dollar and REAGAN at the helm? Hmmm...maybe having crappy leaders is ultimately good for gold bugs?

Now, talk about hot air? I could not even imagine if John Kerry became the Pres...could you?? So maybe we can all learn a lesson here? It's called "How to make friends and influence people" (Great book by Dale Carnegie). I recommend all politicians to take a crash course. OH, and to some who read this forum!!

P.S. Sir INVISIBLE HAND...your cool in my book! If something is mentioned that seems off beat...I like to read it anyway. You see, unlike in some countries if your caught on the internet or even reading the bible you can be beaten.

REF:White Hills (9/4/06; 20:16:19MT - msg#: 147180)

Cheers.......Don't take life to serious!

mikalFrom Democracy to Monarchy#1471839/4/06; 22:20:35

The Dark Matter in Economics | Fred Foldvary | September 4, 2006
In a related (dark)matter, Congress, including the members of the Congressional Intelligence Oversight Committee, are still being denied access to documents needed to perform their official duties. Classified top secret by Bush, documents secret activities of the NSA and also involves failure to confer security clearances - National Security Whistleblowers Coalition,

mikalMore pumping up fuel cells #1471849/4/06; 23:20:03,_i_rssPage=5aedc804-2f7b-11da-8b51-00000e2511c8.html

Fuel Cells 'Are Key to Economic Progress' | Ian Limbach | Financial Times | 090506
Short article on desire for fuel cells to deal with peak oil and expected energy shortages, rising energy costs and environmental damage.
"Economic progress" would be immense if Rifkins vision of "millions" of small fuel cells could transform lives of average people throughout the world.

melda laureToli da' naan caladh.#1471859/5/06; 00:40:48

As soon as they find a catalyst that is cheap enough for the masses, Sir Mikal...

Sir GF, yes, I do. Whenever I can spare the fiat. I do not think US Diplomacy suffers a case of bad diplomatic manners (though that also plays a part), but rather that the Policy is dictated by Money- specifically the needs of a fiat based Order to Dominate the rest of the world.

To put it in a "political" mode: the neocons do what they do because the money tells them to, and not for lack of brains or common sense of which they are well supplied. The same of accusations should of course be applied to Mr Clinton and his entourage. And whatever my feelings towards Mr Reagan, it is clear that some of his "advisors" had intersting (nefarious) ideas of their own. Globalists gravitate to the white house like moths to a flame, no president can be free of their inexorable pull.

But this is needlessly inflamatory: politicians have had a tendency to dishonesty since Gilgamesh. Our only innovation is that now the banksters can allow the politicians the credit cards to do far more damage than before the disaster of 1913. It is a bipartisan disease.

Reagan was blessed to preside at a great reversal in the dollar descent, but after much effort he still failed to make a permanent end to the fiat monetary crisis, even his champion betrayed him as Isildur did Elrond. It is a deep moral issue which would seem to require that the Fraternal Order of Globalists acquiese in their own evisceration or that we ants destroy them in pitched battle.

Neither event is likely. It is no mere ring we would cast into the fire: we are all of us mired in the floodplain. Given that, a Free Gold model is perhaps the only monetary "armistice" that is feasible. It is an imperfect solution: smashing the ring into bits, and hoping they are not gathered and reforged. But happily it is a solution where even those of modest means may partake of their salvific crumbs antediluvium.

GoldiloxEven the sophisticated are attracted by lure of autumn gold#1471869/5/06; 00:41:20


Gold will soon have to make up its mind whether it is a commodity like the rest of them or whether it is a safe-haven "currency" that shines in bad times – a sort of AC/DC asset to hedge against both inflation and deflation.

The jury is still out on that big question. Gold passed the test in the dotcom recession when it parted company with its base cousins in the spring of 2001, pushing upwards as the Goldman Sachs index of industrial metals fell off a cliff. But it failed in the US recessions of 1975 and 1991, holding hands with copper and zinc all the way down.

Contrary to belief, gold is not always a good hedge against trouble. It fell during the French Revolution, again during the Napoleonic Wars, and in the First World War. But then it was the world's currency. Now it is the counter-currency, waiting in the wings to challenge an ever-more deformed and fragile dollar system.

I suspect that gold was already starting to explore this new role in 2001.

Which is not to say that the dollar will crash. It ought to fall, perhaps, to correct the world's vast imbalances but it cannot easily do so because there is no credible currency for it to fall against – except gold.

America has only just started to slow, yet Japan is already showing ominous signs of stalling – yet again – with vehicle sales down 5.9pc in August and construction orders down 20.1pc.

China remains a small economy (one ninth of US consumption), over-dependent on exports for 35pc of GDP.

The eurozone's short-lived expansion has already peaked, with German retail sales dropping 1.5pc in July. Lehman Brothers is predicting an outright recession early next year.

Paris and Berlin both insist that the euro must not rise above $1.30. Should it do so, we can expect finance ministers to start threatening use of their Maastricht powers to dictate exchange policy to the European Central Bank.

No, the dollar cannot collapse because the Japanese and European governments will not let it happen, while the Chinese yuan is pegged in any case.

They will counter US devaluation with devaluation of their own, setting off a fresh cycle of negative real interest rates. Is that what gold is sniffing as a few very rich men and women buy their call options at $2,500 an ounce?

Bizarro-GreenspanStuff in the ground will save the day,it can all be monetized in USD debt#1471879/5/06; 01:23:05

"Industrial plastics, the materials most in demand in modern manufacturing, more than steel or cement, are all derived from oil. Higher prices of industrial plastics will mean lower wages for workers who assemble them into products. But even steel and cement require energy to produce and their prices will also go up along with oil prices. While low Asian wages are keeping global inflation in check through cross-border wage arbitrage, rising energy prices are the unrelenting factor behind global inflation that no interest-rate policy from any central bank can contain. Ironically, from a central bank's perspective, a commodity-price-pushed asset appreciation, which central banks do not define as inflation, is the best cure for a debt bubble that the central banks themselves created."

Henry CK Liu

Dollars come will home to be invested in US assets.

Debt can continue to expand,and it will.

There really is no need to worry about debt-saturated US consumers and their much talked about inability to take on more debt now that the housing ATMs are temporarily out of service.

It's a big world,high commodity prices and fat margins are a banker's dream come true.Many new thin-air USD debts can created,both inside and more importantly,outside of the US.

The new money,is in the ground.

All the world's resources can be monetized in USDs,and all the facilities needed to ship and process the unrelenting demand for new sources of energy can be as well.

The US power structure can play nice,and still win.

So why is a new war with Iran such a pressing issue?

Bizarro-GreenspanPerhaps it's time to heed the advice of the forefathers,the one about eternal vigilance#1471889/5/06; 01:37:12

"Is there a possibility that there is a different "truth?" In the world I see after 30 years in this business, the United States and Russia have withdrawn thousands of nuclear weapons from service; nations have denuclearized aircraft and naval ships; and they have lessened high operational--readiness levels. In this world, the spread of nuclear weapons--particularly U.S. and Russian nuclear weapons, which were once deployed in scores of countries at many hundreds of sites--has significantly declined. Britain and France have significantly reduced their arsenals; China's arsenal has pretty much stood still. Worldwide stockpiles of nuclear weapons have declined by more than two-thirds since the late-1960's Cold War peak.

In this world, the roster of countries out of the WMD business far exceeds the numbers who have gone nuclear in the past 30 years: Iraq, Libya, South Africa, Brazil, and Argentina, not to name the list of northern democracies, from Japan to Sweden. Former Soviet republics agreed to relinquish physical possession of former Soviet weapons. Nuclear-weapon-free zones now exist in Latin America, the South Pacific, Africa, and Southeast Asia. International bodies are experienced and unsentimental in pursuit of the craft of inspections and disarmament. Like it or not, disarmament by force in Iraq has also communicated to potential state proliferators the cost of defying the international community. Post-Iraq, moreover, there is ever-greater vigilance in both monitoring and interdicting the trade in nuclear materials.

All of the evidence indicates that the threat of nuclear, biological, or chemical war has diminished to a lower level than at anytime in most of our lifetimes, yet the specter of a "nuclear handoff" from a nuclear nation to a terrorist group or the supposed ready availability of nuclear materials drives a completely different supposition. This cataclysmic picture has no factual rebuttal, yet that does not mean that nuclear terrorism is a vital, valid, or, even, the most important WMD threat."


War is good business,profit wise,for some people,other than that,it's hell.

Bizarro-Greenspan One more thing#1471899/5/06; 02:00:04

"Intellectual freedom means the right to re-examine much that has been long taken for granted. A free man must be a reasoning man, and he must dare to doubt what a legislative or electoral majority may most passionately assert. The danger that citizens will think wrongly is serious, but less dangerous than atrophy from not thinking at all. Our constitution relies on our electorate's complete ideological freedom to nourish independent and responsible intelligence and preserve our democracy from that submissiveness, timidity and herd-mindedness of the masses which would foster a tyranny of mediocrity. The priceless heritage of our society is the unrestricted constitutional right of each member to think as he will. Thought control is a copyright of totalitarianism, and we have no claim to it. It is not the function of our Government to keep the citizen from falling into error; it is the function of the citizen to keep the Government from falling into error."

--Justice Jackson, concurring and dissenting, in American
Communications Ass'n, C.I.O. v. Douds (1950) 339 U.S. 382, 442-443

The Invisible Hand9/11 and welcome to the real world#1471909/5/06; 05:09:56

The famous "with us or against us" is starting to become clear after 5 years.

The "with us" is the preventive crusade of the AngloAmerican dollar complex against the possible terror threat of Arab oil reserves which are described as "against us". (Is it any wonder that TG/FOA stopped writing three months after 9/11?)

The "us" is in fact the US of A, its dollar regime, and its coalition partners.

The "preventive" is because of the possible attack on the petro-dollar and its reserve status>

The "crusade" is a new monetary system which will be set up close to the oil reserves.

The "against us" is everybody who does no longer subscribe to the dollar system and its logic.

Every war is preceded by its specific warmongering programme with its hate campaign. Every war has its specific power motivation.

Since the dollar-International Financial and Monetary System feels the heat, the motivation for the war is obvious.

This is the framework within which the future of gold must be seen.

This framework is being systematically built up while nobody seems to be able or willing to stop the escalation.
It is the task of the observers to discuss this among each other. In this way the relation with the future of gold can be found.

It is precisely this aspect (the gold-correlation) which indicates that observation and the finding of links necessitates a sufficient distance from the play and necessitates that the observers do not participate in the gold tragedy.

These distance and non-participation could guarantee the objectivity of the observers.

As Pythagoras put it
"When Leon the tyrant of Phlius asked Pythagoras who he was, he said, "a philosopher," and that he compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as spectators; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for TRUTH."

The Invisible HandLet the dollar fall now!#1471919/5/06; 06:32:07

The dollar International Financial and Monetary System (IFMS) could claim during 70 years a victory of socialism. This victory must have had its reasons. Are these reasons still present? If so, why is it then that the dollar IFMS has gone into the offensive?

Today, the systemic dollar debt can no longer lead to price inflation, but must lead to systemic global imbalances which the war dynamism can flourish.
The dollar IFMS manages however to keep the appearances. However, since the System has penetrated to such a global scale, as was never seen before, once the appearances will no longer be able to be upheld, some problems could arise.

In the last 100 years, the US of A has continuously sabotaged its own "solvency" by its systemic debt mania. At the end of the day, a debt-driven economy can no assimilate this debt certainly not in an environment where global competition is leading to geo-price-deflation. This is a systemic threat for the banks (financial system).

Nobody dares to touch the dollar-exchange-rate. Therefore the systemic imbalances are systemically increasing. Therefore also gold is able to be revaluated without any consequent dollar buying power loss. This is the "real" gold revaluation prefiguring its reserve function.

The longer our masters wait with the readjustment of the dollar, the greater will be the catastrophe.
Our masters are lucky. The catastrophe is imminent. So they cannot wait much longer.

The Invisible HandKazakhstan MTMs its gold reserves#1471929/5/06; 06:46:40

Kazakhstan's gold, forex reserves grow 1.5% in Aug
The National Bank's assets in gold fell by $29.3 million as a result of an 2.39% drop in the price of gold on the world markets.

GoldiloxGold finds support in strong physical demand#1471939/5/06; 10:06:51{1DED1BF6-4F16-4E69-BBAD-BDAE5890C70B}


SAN FRANCISCO (MarketWatch) -- Gold futures shrugged off mixed trading in the U.S. dollar to touch their highest level in three weeks Tuesday morning, buoyed by strong physical buying as the Asian jewelry season approaches.
Gold for December delivery was last trading up $12.60 at $645.20 an ounce on the New York Mercantile Exchange after reaching $646.50, its strongest level since Aug. 11. The contract slipped Friday but chalked up an almost $2-an-ounce gain on the week as the dollar weakened and concerns about Iran's nuclear program persisted.

On Monday, gold traded in a narrow range in overseas markets with the U.S. closed for the Labor Day holiday.

Meanwhile, December silver climbed as high as $13.37 an ounce, a level it hasn't seen since May 30. It was last up 23 cents at $13.30.

Gold "traders took positive cues from a surging silver market (itself helped by strong fund buyers) ... and, perhaps most importantly, from just-released figures showing gold production as having slumped further in key countries such as South Africa and now Australia," said Jon Nadler, an investment products analyst at

"News that production of gold is tenuous -- at best -- is adding fuel to the fundamentals of the bullion market precisely on the threshold of the approaching Indian wedding season," he said.

Indeed, "physical buying" of gold "is likely to remain a feature over the next couple of months as the market enters a period of traditionally strong physical interest," said James Moore, analyst at


whodathunk something as mundane as "Supply and Demand" would figure into the equation?

KnallgoldNew oil find#1471949/5/06; 10:08:59

If significant'still 4 years to go "online".
Henrigoldfinger Msg 147182#1471959/5/06; 11:05:40

In answer to your question...

Yes, and regularly

MKThe latest USAGOLD NewsGroup is in your e-mail box#1471969/5/06; 12:18:12

If you have not registered for our NewsGroup here's a sample of what you are missing:

Gold breaks out of the doldrums. Here's the likely reasons why.

Ambrose Evans-Pritchard tells us what Russia is doing with its burgeoning currency reserves

The IMF interviews Nobel Laureate and friend of gold, Robert Mundell - Gold is discussed as a reserve item (Mundell is not interviewed often)

Plus...... We explore the myth of the new American gold standard with Antal Fekete

Then a surprise from John Dizard and the Financial Times: A vindication of the Austrian economists. It includes why AIG's Bernard Connolly bullish on gold

And we conclude with this. . . .Is a monster recession on the way?

This edition is a little longer than usual, but there's much to pass along.


To register, please go to the link above. We welcome your interest.

White HillsGold Finger-msg 147182#1471979/5/06; 13:19:54

Yes, I do and like Melda Laure it is when ever I can. I have been buying since 1999, Thanks USA GOLD. I think everyone on this forum wishes they had been buying gold since 1999. It is not too late as I believe that the Golden days of GOLD are just starting.
Now Sir GF, you don't really think the problems of the US could be avoided with better diplomacy, and how we are seen abroad? My thinking sort of follows mostly the reply you received from Melda Laure. Watch closely what is happening in the World and tell me it is all about feely touchy emotions or MONEY and POWER, those that have it and those who want it. White Hills

TopazTodays little uptick ...#1471989/5/06; 14:24:05

...serves to highlight how PoG has completely abandoned any Currency attachment and is now reacting solely to S and D issues. This is or has to be the case if we are to see an emergent FreeGold situation develop.
Silver otoh retreated on queue with DX rise ...which plays havoc with our Ratio calcs.

mikalChina has reserve reservations#1471999/5/06; 14:49:59

China Forex Reserves Must Not Grow, Says Vice President
| Agence France-Presse | September 5
Sept. 6, 2006 -Snippit - China's forex reserves rose further to hit $954.5 billion at the end of July but they must not be allowed to grow much more because of the upward pressure they put on the yuan, Vice President Zeng Qinghong said Sept. 5.
The latest figure translates into 30.3% growth from $732.7 billion at the end of July 2005 and places China well on track to hold an unprecedented one trillion dollars in forex reserves by the end of the year.
Zeng, writing in an article published on the website of the official Study Times, said China will take measures to ensure that there is no further significant rise in the reserves. "The foreign exchange reserves have reflected China's growing economic power but on the other hand they have increased exchange rate risks and added upward pressure on the yuan," he said in the article. "We will take comprehensive measures to avoid further significant growth in the foreign exchange reserves," he added.
The government will take measures to boost Chinese technology imports as well as "increasing imports of important strategic natural resources," said Zeng."

Underneath all the talk of commodities lurk deeper motives
amidst growing imbalances and shortages. And then there's their upwardly mobile masses with their gold appetite inculcated at birth.

USAGOLD Daily Market ReportPage Update!#1472009/5/06; 15:20:48">
The Daily Gold Market Report has been updated.

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

TUESDAY Market Excerpts

Gold jumps $14 after summer lull

September 5 (from Reuters) -- Gold jumped more than 2 percent on Tuesday as traders returned from the final long weekend of summer in a mood to buy precious metals, shrugging off falling oil prices and mixed signals from the dollar.

"I'm thinking there is some money coming out of the energies and coming into metals," said a floor broker.

Commodity funds were buyers, seemingly chomping at the bit after weeks of sideways trading for gold.

"There was some talk that India and the Far East have been active participants in the cash market, particularly in gold," said James Quinn, commodities commentator at A.G. Edwards.

"The gold market hit some stops this morning above the $636 level and we haven't looked back since."

December gold rose $14.30, or 2.3 percent, to $646.90, trading to a 25-day high at $648.50 from $631.60, the bottom overnight.

"It is quite a sharp jump when you consider oil is well entrenched below $70 and the U.S. dollar at $1.28 against euro is relatively strong," said Bernard Hunter, a director of precious metals trading at ScotiaMocatta in Toronto.

"Gold's reaction is probably breaking away from those traditional indicators."

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

GOLD FINGERThe power....OR Will to change?#1472019/5/06; 18:28:44

Gold will shine forever.....

Over the summer I have been reading and pondering a great deal on the US Economy and the wonders of it all. I do think that America is falling behind and becoming less and less competitive. This will effect us all and our personal wealth. The huge influx of out sourced jobs and the 11 million immigrants who are not fully registered and our growing oil dependency and all the other ills are making us WEAK!

I am not mushy, but diplomacy in regards to securing more good business in foreign countries would be suggested (LOOK AT CHAVEZ). I do see how the wealth of my nation (The US) is being gobbled up with unfair political practices and other corrupt procedures. It's a shame that we can't have it like our fore fathers planned it.

So many things have been diverted from the basic plan. I do think that as we become weaker and weaker that leaves us as a country vulnerable. Now, more foreigners own more US property than it's actual citizens. Savings are at a negative and excess dept is higher than ever.

Now, talk about POWER AND MONEY.

Well, we are sure to be on the loosing side. I think this follows what I have been saying all along. Practicality should be applied and our resources conserved. Both political sides could follow this agenda of more MODERATION!

In this Nation and others, the Leaders set the tone. It's not difficult to be mislead or deceived. I think that it's this deception that will break our American ingenuity and ruin the people and bankrupt the country. Then, like now, the Powerful become more powerful and even wealthier.

Moral to this idea....whatever you want to call it.... "Instead of a lavish gold!!....That's what I did"

I know GOLD BUGS are off the normal path of thinking. We will be the ones who survive the crises that lurks. All indications point to invest in GOLD/SILVER and get out of paper! So you have been warned.

Have a sunny tomorrow~


REF:White Hills (9/5/06; 13:19:54MT - msg#: 147197)

P.S. I do see the idea of Melda Laure also. I think it's a combination of BOTH! How can we get out of this mess with-out a huge depression? I wonder. I think that's what they want.....AGREE?? :-)

Armageddon@mikal - China reserves#1472029/5/06; 18:54:22

Thank you Sir Mikal for your informative info about China's decision to stop accumulating dollar reserves and start spending them. I just did the calculations.

Currently the European Central Banks are allowed to legally sell 500 tons of gold annually based on a previous agreement which is:
500 tons * 32,150 ounces per ton @ $700 per ounce = 11.2 billion dollars.

China gets around $200 billion dollars a year in surplus from America each year. If this pace continues then China alone could easily grab a huge chunk of European Central Bank gold if gold is dumped on the market.

It would definitely seem this change in China's dollar policy is EXTREMELY BULLISH for gold and other commodities since China states that "it needs to get rid of" instead of lets wait for the price of commodities to come down a little then buy. It seems China is going to buy regardless of price because its first priority is to get rid of the dollars to relieve the upward price pressure on the Chinese yuan. Gold at $15,000 per ounce? copper at $6.00 per pound? a $2 roll of American nickels worth $10 based on the metal alone? Who would buy these things at these prices? HMM.. Well the China Central Bank that is who because it needs to get rid of the dollars in order to maintain the stability of the yuan against the dollar.

Here comes the commodity HyperBubble. :)

Any others will differing opinions??

TopazGold:Silver.#1472039/5/06; 19:13:19$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339

@ 2.1% the Ratio gave back roughly what Gold put on the Buck ...which effectively means $Ag did blot.
I can live with the thought of Silver being the "Monetary Metal" whilst Gold takes on the mantle of Wealth Asset. Maybe this is evolving now.

Ten BearsPast predictions and current conditions#1472049/5/06; 19:17:53

Thanks to the posters here who share their knowledge and information sources.

While looking for an old quote from the archives, the forum's posts on 10-2-2001 and 10-3-2001 caught my attention. Ideas expressed here almost 5 years ago are only recently gaining traction with the general population. And some predictions seem to been proved accurate.

Also ORO appears to predict a top for gold at $600-800… interesting reads from some posters currently absent.

Chris PowellGoldman Sachs acquires another key position at Treasury#1472059/5/06; 19:19:00

Bush to Nominate Goldman's Steel to Treasury Post

From Reuters
Tuesday, September 5, 2006

WASHINGTON -- President George W. Bush intends to nominate Robert Steel, a Goldman Sachs executive, to the position of Treasury undersecretary for domestic finance, the White House said on Tuesday.

If confirmed by the Senate, Steel would replace Randal Quarles, who last month said he would resign when Congress adjourned later this year.

Steel is currently a senior director of Goldman Sachs Group Inc. and was previously a vice chairman of the firm, the White House said.

Quarles, a key player in the Bush administration's efforts to reform government-sponsored housing enterprises, became undersecretary for domestic finance in August 2005 and was the third high-ranking Treasury official to step down since Treasury Secretary Henry Paulson took over from John Snow on July 10.

Paulson was previously chief executive at Goldman Sachs.

GoldiloxTick Tock#1472069/5/06; 21:28:03

Four hours to London open, and as of yet, no serious challenges to today's POG rise.

Silver clinging to $13.00.

Supply and Demand?

Funny how it rears its head when there is less political noise to take the blame.

mikal@Goldilox#1472079/5/06; 22:06:59

Re: "no serious challenge yet"
Yes and no.
Yes, nothing serious about a joke of a market.
No, doesn't look like they're easing off completely yet. :)

ToolieMercosur "ban the dollar project"#1472089/6/06; 03:22:45

Mercosur's leading members Argentina and Brazil have agreed on a pilot Project to eliminate the US dollar in trade transactions between both countries with the purpose of reducing costs and bureaucracy for exports and imports.
"It's a decision which will strengthen Mercosur", said Argentina's Finance Minister Felisa Miceli.
Currently when an Argentine company sells to Brazil it must convert pesos into US dollars and then into Brazilian Reais, and vice versa for Brazilian exports.
The agreement was reached last Friday during the Mercosur Economy Ministers summit in Rio do Janeiro with the participation of delegations from the five full member countries and associate members.
The project should begin to be implemented in 2008; however countries that adhere to the Argentine/Brazilian initiative are expected to make the official announcement during the Mercosur presidential summit next December 15.

ToolieBuilding a wall around America#1472099/6/06; 03:53:00

Snip: LIMA, Peru, Sep 5 (OneWorld) - The Bush administration has announced it may revoke trade preferences from three large South American countries in a move some experts believe is designed to pressure them to consent to free trade agreements with the United States.

For over 30 years, trade preferences have enabled underdeveloped countries to export products to developed countries without paying tariffs or customs fees. The U.S. established its trade preferences program--called the General System of Preferences (GSP)--in 1976, and has renewed it eight times, most recently in 2002.

The three countries most likely to lose trading preferences with the United States--Argentina, Brazil, and Venezuela--have said U.S. proposals to open a giant free trade zone among the countries of North and South America unfairly favor U.S. companies.

"As a strategy, the U.S. may not renew trade as to pressure countries in the region to sign free trade agreements," said Romy Calderon, an economist at the non-profit Latin American Association of Development Financial Institutions (ALIDE), in Lima, Peru. (end snip)

So let's see, we're going to tax the oil imports from Venezuela. Tax the imports from the US owned auto plants. Or will there be exclusions for particular classes of imports?

Free trade? Sure, but it better be denominated in dollars.

ToolieMercosur common currency#1472109/6/06; 04:16:58

Brazil and Argentina, the top Mercosur countries, are now formally planning to launch a common currency, according to statements last week by finance ministers Guido Mantega of Brazil and Felisa Miceli of Argentina. According to information from Miceli quoted by French news agency AFP, the new currency will likely be launched next year and be gradually implemented, starting with two way trade of goods first. The new currency will benefit traders since they will pay less exchange fees, Mantega says. If it becomes a reality, the new currency will represent two vastly different monetary policies: Brazil's, which has aimed at keeping inflation under tight control, and Argentina's, which has failed completely at doing the same. No news yet on whether the other three Mercosur countries (Uruguay, Paraguay and Venezuela) will join as well.
ToolieFree Trade? Or Floating Fiat Finagling?#1472119/6/06; 04:39:17

Snip: Argentina confirmed Saturday its current policy of supporting a strong US dollar to ensure competitiveness to local manufacturers and for the export industry.
"The main pillar of this government's economic policy is for the Central Bank to buy US dollars to increase international reserves and ensure a high exchange rate", said Finance Minister Felisa Miceli addressing a manufacturers association celebrating Industry Day.
The current value of the greenback in Argentina's money markets is 3.11 pesos, "but without the intervention of the Central Bank purchasing dollars, the US currency would be costing 2.30 pesos", added Ms Miceli.
"Some economists and special interest groups argue that the Central Bank should not buy dollars and let it drop to 2.30 pesos, but if this was to happen, provincial economies could not maintain stability and growth", underlined the minister who was present at the celebration with all her cabinet top aides.
However the other side of a strong US dollar is inflation and rising costs in pesos, but Ms Miceli told her audience that "industrialization is the official policy of President Nestor Kirchner's administration; with prices compatible with international markets and it is essential manufacturers increase the supply of goods".(end snip)

Essential to the argument for free trade is a benchmark of value that is beyond the reach of financial engineers. Without that standard to "flatten" the financial world comparative advantage ceases to function. Gold has served this purpose for centuries, and will again, soon.

The Invisible HandChna buys time#1472129/6/06; 04:43:32

China's Wen BUYS TIME on economy, democracy, diplomacy


BEIJING (Reuters) - Chinese Premier Wen Jiabao pledged progress on sustainable economic growth, currency reform and democracy on Tuesday but stressed change would be gradual rather than radical
This means that the FLOATING OF THE RENMINBI exchange rate will be mainly determined by market supply and demand, and the floating band WILL BE GRADUALLY EXPANDED

The price of gold will also be gradually allowed to rise and then explode.

The Invisible HandTechnical analysis and yesterday's rally #1472139/6/06; 05:08:58

The late Harry Browne taught that technical analysis studies activity within investment markets. It looks at patterns of price, trading volume, and other traces of investor activity – in the hope of finding clues to an investment's future.
Support and resistance are the heart of technical analysis, wrote Browne.
(Chapter 8 of his book "Why the Best-Laid Investment Plans Usually go Wrong")

On the he gold chart in euro at the link, a resistance line can be drawn with three tops
EUR 560, EUR 530 and EUR 500

The sheeple follow technical analysis and they are concluding that the price of gold will decline because there were, I was going to write "because we had", three successive lower tops.

This is how the price of gold is technically being contained. It is as simple as that.

Yesterday's organised intraday gold rally came at the order of our masters in order to bring those three tops nicely on the screens.

Technical analysis fans will argue that once the declining resistance line will be broken, the up-forces will be greater than the down-forces.

Hahaha! Elsewhere in life, we think of people who see the future in lines and squiggles as superstitious – and we pride ourselves that our lives aren't directed by oldwives’ tales.
(Harry Browne "The Economic Time Bomb", Chapter 11)

SundeckCommon Currencies#1472149/6/06; 05:29:16

Ref Sir Toolie's "Mercosur" posts...

A brief wander around the world with Google suggests that "common currencies" are becoming, if not the flavour then perhaps a whiff, of the monetary times...

In addition to Mercosur, there are initiatives underway in East Asia (Japan, China and South Korea); the Southern Africa Development Community (SADC); The Gulf Cooperation Council (GCC); and possibly other world groupings intending to implement, or to at least investigate, common currencies.

In addition, ASEAN is bringing forward its desire for a free-trade bloc to 2015, although the move to a common currency appears to be not clearly on the agenda...even though some polls across the region show fairly strong support for a common currency.

Then, of course, there is the Euro which still seems to be chugging along in spite of doubt in some quarters about its long-term viability.

My accountant asked me recently if I thought the world would move towards a global currency. I told him that I felt that there would more likely be a transition towards several common currencies perhaps reflecting a concurrence of economic and trading ambitions. Something like this is needed to relieve the dollar of its schizophrenic role as domestic currency and international numeraire...

Of course, gold was once the "global currency" of sorts...recognised world-wide and with established relationships with the miriad currencies prevaling at the time.


The Invisible HandThe World is at a Critical Crossroads#1472159/6/06; 06:14:12


by Michel Chossudovsky
September 4, 2006


The Bush Administration has embarked upon a military adventure which threatens the future of humanity. This is not an overstatement. If aerial bombardments were to be launched against Iran, they would trigger a ground war and the escalation of the conflict to a much broader region. Even in the case of aerial and missile attacks using conventional warheads, the bombings would unleash a "Chernobyl type" nuclear nightmare resulting from the spread of nuclear radiation following the destruction of Iran's nuclear energy facilities.

Throughout history, the structure of military alliances has played a crucial role in triggering major military conflicts. In contrast to the situation prevailing prior to the 2003 invasion of Iraq, America's ongoing military adventure is now firmly supported by the Franco-German alliance. Moreover, Israel is slated to play a direct role in this military operation.

NATO is firmly aligned with the Anglo-American-Israeli military axis, which also includes Australia and Canada. In 2005, NATO signed a military cooperation agreement with Israel, and Israel has a longstanding bilateral military agreement with Turkey.

Iran has observer status in The Shanghai Cooperation Organization (SCO) and is slated to become a full member of SCO. China and Russia have far-reaching military cooperation agreements with

China and Russia are firmly opposed to a US-led military operation in the diplomatic arena. While the US sponsored military plan threatens Russian and Chinese interests in Central Asia and the Caspian sea basin, it is unlikely that they would intervene militarily on the side of Iran or Syria.


As I said yesterday msg#: 147190:
It is precisely this aspect (the gold-correlation) which indicates that observation and the finding of links necessitates a sufficient distance from the play and necessitates that the observers do not participate in the gold tragedy.
These distance and non-participation could guarantee the objectivity of the observers.
As Pythagoras put it
"When Leon the tyrant of Phlius asked Pythagoras who he was, he said, "a philosopher," and that he compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as spectators; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for TRUTH."
Let me elaborate. We are spectators. We are here in Denver to observe the world scene (including the Middle East stories and the gold market).

We are thus not strangers to the gold market and the Middle East, but we are outside the world of the gold market in order to better observe and understand the world and to observe and understand more specifically the world as just described.

This retreat or distance should,
- and here I am describing the ideal situation of which the conditions are, I am afraid, not fulfilled –
indicate our detachment vis-à-vis the world and should result from our curiosity about the world and about life.

Plaidoyer pour la philosophie

Lorsque Léon lui demande quel est son art, Pythagore répond qu'il est philosophe. Léon lui de-mande ce qu'est un philosophe. Pythagore lui répond que la vie humaine lui para"t semblable à une scène où se déroulent toutes sortes d'actions et d'acteurs. Le philosophe, lui, est spectateur ; il est là pour observer la scène de la vie. Cette définition que donne Pythagore fait du philosophe une personne non étrangère à la vie humaine, mais en dehors du monde qu'est la scène de la vie, pour mieux observer et comprendre le monde. Cette prise de recule, de distance, manifeste le détachement du philosophe par rapport au monde, à cause de la philosophie, curiosité portant sur le monde et la vie.

SundeckTechnical Analysis#1472169/6/06; 06:26:20

Ref TIH #147213

Ever since I first encountered the term "technical analysis", of the financial kind, it has made me feel uneasy...and viewing the prognostications of its various practioners has not offered reassurance.

Coming from a scientific background, as opposed to a financial one, the words "technical" and "analysis" conjure up fairly dominant perceptions of precision, established principles, objectivity, penetrating observation, and perhaps above all "reproducibility"...leading to a sound result that affords reliable predictions to be made.

"Reproducibility" means that if an analysis is done by several competent practitioners, then they are likely to get very nearly the same result as each other. Or if the same sort of problem is analysed by the one competent practitioner many times, then they will arrive at consistent results for that kind of task.

Reproducibility by itself, of course, is not enough to decide if an analysis is sound. Two delusionary practitioners, trained along the same lines and subjective in their assessments, may also reach similar fudging, ignoring crucial (but inconvenient) facts, or by some other act of individual and/or joint deception. That is where "objectivity" is needed for an "analysis" to be worth anything.

At the risk of uttering an heresy, I feel certain that nearly ALL treatises, applications and conclusions drawn by "technical analysts" are little better, or perhaps worse, than gobbilygook.

One little example...

Why the emphasis on straight lines? Did the god of finance imbue the straight line with some golden privilege whereby it always specifies "the trend"? For Pete's sake, why not use the arcs of circles of arbitrary radii, or the arm of a parabola, or some family of splines, or the curve of the buttock of a Norman Lindsay beauty?

Financial "technical analysis" is neither technical nor analytical. It should be given another name...perhaps something like "eclectical paralysis"


Ahhhh...Sundeck, crawl back under your stone! Your words are as sprinkles of dust in a sandstorm...


The Invisible HandOne direction at the crossroads is being indicated by Dr Mahathir#1472179/6/06; 06:30:36

Dr Mahathir Mohamad is a former Prime Minister of Malaysia.



In calling for a BOYCOTT OF THE DOLLAR, Mahathir has put his finger on the very essence of the American imperial project in the region. What the United States is fighting for in Iraq is not the oil per se. And they definitely have no interest in promoting democracy in the region. Witness the assault on the two most democratic entities in the Arab Middle East - the Palestinian Authority and Lebanon.

The Anglo-American INVADERS of Iraq have always had a single STRATEGIC GOAL - to MAINTAIN THE PRIVILEGE OF IMPOSING THE DOLLAR as the preeminent means of exchange in international markets. To operate what amounts to a currency exporting racket - the powers that be in Washington need oil to be priced in dollars and sold only in dollars. Of course, the 'oil for dollars' policy would not be possible without the collaboration of the dictatorial Arab custodians of the oil plantations.

Mahathir's call for a popular international insurrection against the dollar CAN AND WILL CHANGE THE COURSE OF HISTORY.

Clink!One man's squiggles ..... @ TIH#1472189/6/06; 06:31:52

I take your point, but, as someone who lives by arcane (even by my standards, sometimes !) squiggles in their work, the interpretation is very important. For me, your graph shows me the result of a significant positive impulse which was overlaid on the existing positive trend. There then followed a period of damped oscillation (ringing) which has almost died down. Usually, the pennant formation will resolve itself by breaking out in the direction of the underlying trend - in this case, up. What is most interesting however, is that in the euro chart the down trend and up trend lines have yet to meet. If you look at a dollar chart over the same period, it looks like there has been a breakout to the downside. At the time, I thought that this could be a sign of market manipulation to induce black box selling (which would then make it a self-fulfilling indicator as you suggest). Now I'm wondering if it's not just that the POG is currently being more influenced by the euro than the dollar. Or that I've been looking at too many charts ... :^]


The Invisible HandSCO left the crossroads#1472199/6/06; 06:48:24

WE HAVE A CHOICE. There are too many crises coming to our front burner at the same time: Iran, North Korea, Venezuela, Iraq and Nigeria to name just a few. Thomas Sowell commented in his article, Point of No Return?: "It is hard to think of a time when a nation -- and a whole civilization -- has drifted more futilely toward a bigger catastrophe than that looming over the United States and western civilization today."
SO, WHAT ARE WE DOING? Making deals with some of the most unsavory characters this side of a Star Wars cantina to maintain energy interdependence. With Iran entering the


which some refer to as a COUNTER FORCE TO NATO

will control the vast majority of the world's natural gas reserves, as well as a significant portion of its oil reserves, not to mention potential control of the Strait of Hormuz. These moves are significant because they amount to


Central Asia, the greatest remaining promised land for oil and gas development, is completely enveloped within the SCO, limiting hydrocarbon access to non-SCO nations.

SundeckPutin Visits South Africa, Seeking Good Will and Trade ...#1472209/6/06; 07:39:18

...and perhaps some gold as well?


Mr. Putin may also be intent on countering China, which in recent years has been striking deals in Africa to sew up supplies of commodities like copper and oil.

Sundeck: Putin also signing deals to deliver "nuclear fuel and technology" to South Africa.


SundeckOoops#1472219/6/06; 07:40:08's the link
GoldiloxMahathir#1472229/6/06; 08:42:59

@ TIH,

Wasn't he a major proponent of the Islamic Gold Dinar that seemed to find media oblivion immediately after Iraq II and the Indonesian tsunami?

A Dollar boycott would seem to fit the same political scenario.

mikal"Never be lax about the tax!"#1472239/6/06; 08:48:52

----- Original Message -----
Sent: Wednesday, September 06, 2006
Subject: Tax his land
At first I thought this was funny... then I realized the awful truth of it. Be sure to read all the way to the end!
Tax his land,
Tax his bed,
Tax the table
At which he's fed.
Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.
Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.
Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.
Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.
Tax his cigars,
Tax his beers,
If he cries, then
Tax his tears.
Tax his car,
Tax his gas,
Find other ways
To tax his ass
Tax all he has
Then let him know
That you won't be done
Till he has no dough.
When he screams and hollers,
Then tax him some more,
Tax him till
He's good and sore.
Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid.
Put these words upon his tomb,
"Taxes drove me to my doom..."
When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax (42 cents per gallon)
Hunting License Tax
Inheritance Tax
Interest expense
Inventory tax
IRS Interest Charges
IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Property Tax
Real Estate Tax
Service charge taxes
Social Security Tax
Road usage taxes
Sales Tax
Recreational Vehicle Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft registration Tax
Well Permit Tax
Workers Compensation Tax
COMMENTS: Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world.
We had absolutely no national debt, had the largest middle classin the world, and Mom stayed home to raise the kids. What Happened? And I still have to "press 1" for English.
[Mikel: An email sent by a friend. Thanks for reading!]

arbyhMuch talk today and this will tie it all in and give clear reasons and perspectve as to why.#1472249/6/06; 09:23:16

I have put in the link to the first video, but you must also watch the second (part 2) video. Some of you will say "oh I knew that". I urge you to watch it again...both parts.
I did and I learned something, namely 1. The demonetizing of silver, because it was plentiful in USA and therefore the Rothchilds and Bilderbergs couldn't control us. 2. When there is talk of a gold standard ...look out because the USA doesn't have much, so again further external control of USA.
The EU, American Union, African Union, The equivalent of same in Far East, are all planned by the international banking interests…leading to one world currency. Countries, even USA, are all pawns in the Rothchild / Bilderberg game, and any country, politician, that doesn't fall in line, ultimately gets slapped back in line.

There is another film in there about the FIAT, but oddly this American says he wants the gold standard. So even with a Doctorate he isn't in tune with what the prior film part 2 is saying. He does say that the vast world wealth owners are not out there for public consumption like Buffet and Gates.

Hey if spelled something wrong …screw it.

DruidSundeck (9/6/06; 06:26:20MT - msg#: 147216)#1472259/6/06; 09:33:50

Druid: I'm still laughing. These Magi's through their Institutional conduits have invoked higher order math to try and lend credibility to an ancient art by trying to apply a real scientific approach where it doesn't exist. Real science (that is highly objective) is repeatable in fairly short order over preset time ranges. Sure you can use math to create graphs, pictures and most of all PERCEPTIONS, but always remember, that it's these same Wizards who conjure up these data points that control the pictures. Now integrate this application with fashionably dressed up parrots who go before a TV camera and you have a real winning formula to do with as you please.

A lot of it is interesting but when I come across someone who gets pretty immersed in the art, I generally breakout my tools of the trade, you know, my seeing eye glass, chicken bones, crow's feathers, try and arrive at similar conclusions. It should be referred to as "Perception Analysis."

Ten Bears Divination…to foresee the future..#1472269/6/06; 11:21:02

@ Sundeck #147216 & Druid # 147225

Thanks for the good reads. Apparently there many who formally worked in the productive economy who are now adapting to the rule of financial capitalism and its various casinos and financial games. Reading the charts is almost like using an oscilloscope to trace noise or recurring patterns in an analog circuit. However when the amplitude or frequency turns against ‘the boys’ they change the signals with derivative trades, money supply pumping, necked short sales, daisy chains, or other more drastic methods to alter public perceptions and actions. It looks to me like the only way to consistently win against a crooked house is to figure out which way they want it to go and bet with them. However, no doubt some have better charting tools, or better chicken bones and spells.

Of course this is just one old geezer's opinion.

Sierra MadreREAL ESTATE CRASH: WHAT'S COMING.#1472279/6/06; 11:50:17


Not exactly on topic, but with indirect bullish consequences for gold.

When large numbers of homeowners begin to default on their mortgages, it will be politically impossible to evict them and send them on to the streets. Nor will the enormous magnitude of defaults be allowed to wreak havoc in the mortgage market and take down the economy.

The US government will set up a government-backed corporation (Homeowners Rescue Corporation – HRC) to assume all defaulted mortgages in exchange for its own government guaranteed paper. (A swap). No money changes hands. The owners of mortgages do not get money, they get another paper promise, from the new HRC.

The HRC will make all payments upon their paper to the former mortgage holders; payments which should have been made to the mortgage holders by the homeowners, who were not able to cope with the financial burden.

Where will HRC get the money it has to pay out? From the US government budget. Just more insignificant billions of deficit, to keep the ball rolling and the whole collapse of the real estate bubble from taking down the economy.

HRC will grant VERY generous terms to homeowners, so they can pay off their mortgages in, say, 50 years at fixed rate, way below market rate.

No problema! Homeowners will get their homes for next to nothing, as inflation lowers the purchasing power of the dollar. Happy days are here again!


TownCrierPsssst.... if you are a fan of St. Gaudens, have a look.#1472289/6/06; 12:53:24

One of the world's finest coins, currently available to you at exceptionally attractive prices as part of USAGOLD-Centennial's September Buyers' Group program.

All visitors, new and old alike, are welcome to participate!


USAGOLD - Centennial Precious Metals, Inc.The latest USAGOLD NewsGroup was sent to your e-mail in-boxes yesterday...#1472299/6/06; 13:39:40

If you are not participating in our NewsGroup, here's a sample of what you are missing:

## Gold breaks out of the doldrums. Here's the likely reasons why.

## Ambrose Evans-Pritchard tells us what Russia is doing with its burgeoning currency reserves

## The IMF interviews Nobel Laureate and friend of gold, Robert Mundell - Gold is discussed as a reserve item (Mundell is not interviewed often)

## Plus...... We explore the myth of the new American gold standard with Antal Fekete

## Then a surprise from John Dizard and the Financial Times: A vindication of the Austrian economists. It includes why AIG's Bernard Connolly bullish on gold

And we conclude with this. . . .Is a monster recession on the way?

This edition was a little longer than usual, but there's much to pass along.


To enjoy this service, please go to the link above. We welcome your interest.

USAGOLD Daily Market ReportPage Update!#1472309/6/06; 14:45:48">
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.

WEDNESDAY Market Excerpts

September 6 (from Reuters) -- Gold futures in New York slid off a 3-1/2 week high to end lower on Wednesday, as profit-taking ended the prior day's dramatic precious metals rally, dealers said.

Moves in energy and currencies played a partial role in gold's direction as the market continued to consolidate within a recent range, even after Tuesday's metals buying spree following the U.S. Labor Day holiday.

"Some traders chose to take part of the money they amassed on Tuesday off the table," said Kitco's analyst Jon Nadler. "Lower crude oil values and a bouncy U.S. dollar dented bullion prices but did so only marginally," he said in a note.

The COMEX December gold contract was down $5.10 at $641.80 after moving from $641 to $648.50 -- the same near one-month peak reached a day earlier.

James Moore, an analyst with TheBullionDesk in London, said that, despite its gyrations this week, spot gold stayed in its broad $605 to $655 trading range of the last several months.

However, investor interest and supportive fundamental factors were keeping gold on course to regain the $700 level before year-end, he added in a report.

Investment bank UBS hoisted its short-term bullion price forecast to $650 in one month from $630 previously, while its forecast for three months out rose $10 to $690.

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

SundeckRef : Sir mikal's #147223 taxing list#1472319/6/06; 15:45:44

Now that's getting down to brass tacks... (Hey, you forgot brass tacks!...or should that be "brass tax" or tax on "brass tacks"...I am sure that they both exist.)

Quite a list...sort of a taxonomy of tax, really...

Adds new dimensions to the two things that are certain in life...death and taxes. But while the bony old guy with the scythe only takes one cut at you, the government has many (and growing)...


Goldilox"Borrow and Spend Now, Pay Later"#1472329/6/06; 15:48:19

email from Elliot Wave International


by Vadim Pokhlebkin

Over the past few years, the British have grown so "extremely comfortable" with using credit cards that in 2003, the number of cards in circulation surpassed the number of U.K. citizens (BBC).
So comfortable that in 2004, consumer debt topped £1 trillion – for the first time ever.

So comfortable that British credit card companies expect the number of cards in circulation to jump another 40% by 2008.

They may get their wish, but all this "comfort" comes at a price. In the third quarter of 2005, for example, the British filed 31% more personal bankruptcies than the year before – "the largest number since 1960," and a new record. And now banks are starting to get hit: Barclays recently said their profits were down 14%, "after charges relating to writing off bad debts rose 30%." Lloyds and other large UK banks have reported a similar story.

What's more, apparently "20% of borrowers who owe more than £10,000 in unsecured personal debt are considering making themselves insolvent." Back in March, that number was 14% (Investment And Business News). Already this year, there are 66.3% more individual insolvencies in England and Wales than in 2005.

It's not just a British problem. For example, 40% more Germans filed for bankruptcy protection in 2005 than in 2004. And with interest rates rising, other citizens of the European Union may soon join in. Of course, on this side of the ocean, things aren't any better: Through October 2005 alone, U.S. consumers filed 49% more cases than in 2004.

British analysts blame this trend on the "softening in bankruptcy rules," higher interest rates and the appeal of the type of insolvency called Individual Voluntary Arrangements, "where payments are based on what the debtor can afford."

All of that rings true, but why are consumers borrowing so uncontrollably in the first place? Don't they know that one day, interest rates can rise? Or that house prices, which have financed comfortable lifestyles for thousands of homeowners, may one day fall? Or that, if nothing else, they may simply lose their job?

They know. But they hope for the best. And like many other cultural and economic trends, the "borrow and spend now, pay later" mentality is sign of the times. Contrary to the conventional wisdom, however, it's a sign of good times, not bad. To quote from Bob Prechter's "Conquer The Crash,"

"Near the end of every major expansion, few creditors expect default, which is why they lend freely to weak borrowers. Few borrowers expect their fortunes to change, which is why they borrow freely."

You see, willingness to lend or borrow money, just like willingness to buy or sell stocks, is determined by the health of society's overall mood – or social mood. Its best-known indicator is the stock market. Notice that as European stocks have climbed since early 2003, so has consumers' willingness to borrow. It's no surprise: Both trends are the results of improving investor and consumer sentiment and a direct reflection of rising social mood.

"The U.K.'s mountain of personal debt continues to have no peak in sight," says one British industry insider. Actually, from an Elliott wave standpoint, if you knew where British stocks were headed long-term, you could reasonably forecast how long the U.K.'s credit binge may continue…


Why should it surprise people that constituents imitate what they see their leaders do with impunity?

GoldiloxTax list#1472339/6/06; 15:53:54

@ mikal,

I forwarded your ditty to a PhD who shall remain unnamed, but responded:

"But those things didn't exist 100 years ago, so the comparison is not relevant."

My guess is that the flouride in his toothpaste is working quite well.

YGMInvisible Hand...?Off Topic? Not SureThese Days#1472349/6/06; 16:37:39

How To Negotiate With Terrorists
This brief blog entry takes you through a series of negotiations over time between peacemakers and terrorists:

A peacemaker walks up to the left side of a line. A terrorist walks up to the right side of the line. The peacemaker introduces himself. The terrorist kills him.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker asks, "why did you kill my friend?" The terrorist kills him and rapes his wife.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker says, "Stop that!" The terrorist kills him, rapes his daughter and kills his wife.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker says, "I'll pay you $1000 if you stop attacking us." The terrorist agrees to the deal, takes the $1000, and kills him.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker appeals to the United Nations. The United Nations says the peacemaker is at fault. The terrorist kills him.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker now has a gun, and threatens to use it. Other peacemakers start chanting the old 60's whine, "Can't we all just get along?" The peacemaker hesitates. The terrorist kills him.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker tries to convince his peacemaker friends that the terrorists aren't going to respond to negotiations, but they insist that if he kills the terrorist it'll just make the other terrorists mad. The peacemaker reluctantly agrees to try negotiating again. The terrorist kills him., his entire family, and his neighbor's family.

A heated debate now ensues between the peacemakers who want to be nice to the terrorists and the peacemakers who believe that there can never be peace until the terrorists are all dead. While they are debating, the terrorists kill 15 more peacemakers.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker asks himself, "Which is more important: being liked by everyone, or protecting my family?" The terrorist pulls a knife to kill the peacemaker, but the peacemaker pulls a gun and kills the terrorist first. The United Nations condemns the peacemaker's use of unproportional force. Many of his peacemaker friends turn against him.

A peacemaker walks up to the left side of the line. A terrorist walks up to the right side of the line. The peacemaker apologizes for what his friend did to the other terrorist. The terrorist kills him, his entire family and his neighbors, and threatens to destroy the city as soon as they develop a bigger weapon.

A peacemaker refuses to meet at the line because every time a peacemaker goes to the line the terrorist kills him. A terrorist walks up to the right side of the line and fires rockets into the peacemaker's town. The United Nations condemns the way the peacemaker provoked the terrorist by refusing to come to the line and meet with him.

Generations pass and not much changes until one day when the son of a peacemaker decides that the old strategy simply won't work. He walks up to the left side of the line a little early. As the terrorist approaches the right side of the line the peacemaker shoots him. Another terrorist approaches to replace the first, and the peacemaker shoots him too. This scene plays out several more times. Then a terrorist approaches carrying a white flag, but he also has weapons. The peacemaker shoots him. A terrorist next approaches with a ceasefire resolution from the U.N. The peacemaker shoots him also. A large group of terrorists approach and the peacemaker shoots them all and drops a nuclear bomb on the city they came from. The peacemaker continues killing the terrorists until the terrorists are all dead.

There is finally peace on earth and the United Nations takes the credit.

Topazalt Gold.#1472359/6/06; 18:39:15

The Chart shows how PoG and alt DX are now so "unattached" as to be an all but meaningless comparison ...we're getting close!
Silver OTOH can attach the Currency mantle though . If fair winds blow the Status-quo Ag will drive to 32 ( Au/Ag Ratio) this time through imo.
Comparitive Analysis ...Prose A/C for a straight line-weary world.

melda laureAssymetry of physical/paper#1472369/6/06; 19:20:48

More likely it was the silver amalgam, sir Lox.

Sir YGM, the only thing you left out is that the only reason the "terrorists" do not gang up together and try to wipe out the "peacemakers" all at one go is that they tried that already and lost. We have been watching a futile charade where the "reconquest" is supposed to happen one peacemaker at a time.

So we have a stalemate: the "peacemakers" cannot make peace unilaterally, so they build a wall and ignore the UN. Their adversaries do not have sufficient weapons so they appeal to their neighbors, none of whom have any real interest other than political lip service (or other geopolitical goals).

It is an unpleasant situation for both sides. Moreover there is nobody left who can credibly sign the peace aggreement for the "terrorists". And this situtation holds for both palestine and the US war on terror. The US has no berlin, no fuerher, no admiral Donitz. Should the US succeed with an air campaign in Iran there may be no one who can call for a truce on the other side. This sounds all too much like the fate of Rome, beset by roaming hordes of assorted "barbarians" with no particular home base, and therefore impossible to defeat in decisive battle

All too similar to how some paper gold bugs would conquer the market one paper contract at a time, or how the bankers propose to thwart Indian farmers by issuing gold credits where the nearest bank ATM is a three day walk away.

And so we see that there is an inherent assymetry in this idiotic path we are on. The west is unable to prevent the jihadistas from their program of one suicide bomber at a time. And likewise the banks are unable to prevent the gold bugs from their one gram at a time habit. The result is that the WOT is unwinnable by force or bloodshed, nor is the "reconquista" achievable by 5 kilo bags of fertilizer and 5cc nails. A negotiated settlement is the only answer, regardless of how many generations of patient bleeding it takes. Indeed that is the reason behind the russian and chinese involvement with Iran: the persians are a partner CREDIBLY able to negotiate an agreement and uphold it regardless of their trustworthiness. Afghanistan is not, nor Nigeria.

There is also a similar analogy in free gold. To stop gold would take too much paper in too many places where paper has no credence. The prevalence of MTM shows that some level of negotiated truce is underway. In spite of the populatity of currency unions (all too laughably reminiscent of John Cleese's Alternate Axii piece), such vehicles will not "float". Total anihilation of currencies is hardly a solution that can sustain foreign trade, nor is barter: that barbarous relic.

"It's not a good idea to touch the substance. It would be better to consequently push for the reduction of debts. Gold is an important factor for the confidence in the stability of the €. "

Why is gold's confidence needed except in future extremis? And what does that portend for the future of those charged with clearing global trade?

CamelOne you left out#1472379/6/06; 19:30:14

Here one you left out . The terrorist kills one of the peacemakers , then the peacemakers go out and pick some one at random and kill them . Then all the friends of the one they killed team up with the terrorists and go out and try to kill more peacemakers. In the end you can't tell who is the terrorist and who is the peacemaker.
melda laureThe days of "multiples" are comming as TC said #1472389/6/06; 19:39:34

Something like that Sir Topaz. Notice he implies that a US downturn may not entail a world downturn...

China and India are growing at an 8 to 10% growth rate per annum. In the case of China, I would see within 5 to 10 years it gaining sufficient momentum to be a main global economic driver in itself.

There was a discussion (ages ago it now seems) held here after the asian crisis that the Chinese reaction was different, that they sought to be independent of US monetary influence (ie recessions, interventions, etc.) Presently we hear interesting news of chinese businessmen in places like Africa, Zimbabwe, or in south america.

The euro may not be the only nail in the coffin for the dollar. Yuan and not dollars may say what african commodities are worth. The dollar may not say much. This paper addresses last weeks question by Armageddon and others as to the fate of gold in a recession.

melda laureGnazzo asks cui bono, I ask "Yesta Yasse?"#1472399/6/06; 19:56:12

Sir Camel, the story is too similar to the fate of certain native americans for my comfort (with differences of course). Perhaps South Africa with its large native population surrounding its smaller minority european segment is a better analogy. At least it is one with some hope, albeit small.

None of these conflicts was solved quickly.

The war on gold is young by comparison, as the "invasion" only dates from 1971, though the first "colonists" may be said to have landed in 1634, or 1913, or in 1307 (Jaques De Molay) or further back if you prefer. Perhaps as far back as he who said "all the gold is mine, all the silver is mine."

Indeed, we will have to address that question soon. For once free gold is in operation, it will no longer be an off topic question.

Ten BearsSierra Madre # 147227#1472409/6/06; 20:03:20

So: First, bad debt (created by financing consumption and speculation on credit cards) is moved into the GSE's(via loans on inflated housing prices to repay the card debt) thereby, creating secured debt; second, the GSE's cook the books. Third; the Feds bale out the de-facto bankrupt GSE's with a Resolution Trust (S&L bail-out) type of organization by buying the bad debt. And finally, the new organization extends the loans at low rates for long periods. Helps borrowers and banks…hurts savers.. yep! That sounds about right.
Ten BearsBob Chapman, The International Forecaster #1472419/6/06; 20:25:30

The professionals are catching on along with professional money managers and hedge funds. The public will join us, as will the sold out bulls, after gold passes $850 an ounce, silver $50 an ounce. This is going to occur when other markets are falling and investors and the public are desperate for a return on the capital they have left. This is how the story is about to unfold. We have been dead right on 98% of our calls for the past 17 years and we know we are dead right on this one. This is the culmination of our life's work.


YGMCamel (9/6/06; 19:30:14MT - msg#: 147237)#1472429/6/06; 21:52:11

Yes, but I didn't write it...Another point is the writer assumes that the only peace makers out there have nukes, which is so untrue. Otherwise alot of it remains a reality regardless of who the terrorist is in the altercation. Few nations have a terrorism free history over some unfortunate souls in the world.
The Invisible HandYes Goldilox#1472439/6/06; 22:21:27

The same Dr Mahathir who's one of the main proponents of the Islamic Gold Dinar.
Thank you for allowing me to better observe and understand the world scene (including the Middle East stories and the gold market).

Another element of this world scene is the IMF which would at present be in the process of being reformed.

As the London Guardian put in,,1864832,00.html
What will be passed off as a democratisation is in fact a way of ensuring the poor global majority continue to have no say

Another IMF point.
Here's an article under the title


At the bottom it says "COPYRIGHT" and guess what: It is difficult to copy and past it

The article starts by saying that the recent rally was China-fuelled and that the IMF analysis suggests that metal prices will decline progressively from current levels as new production capacity comes on stream.

It also says that China's booming economy has contributed most of the increase in world consumption of inter alia the key metals copper and aluminium whose prices "are above their sustainable levels".

The IMF bureaucrats are forecasting that aluminium prices should fall by 35 pct and copper by 57 pct by 2010.


Are those bureaucrats crazy?

Is the IMF HOPING that the metals production will start in order that the prices will not increase and lead to inflation (as if inflation was caused by higher prices?) Or has the IMF hard proofs (proves?) that this is already happening?

Why has the production then waited so long to respond to an increased demand?

Aluminium and cppper - above their sustainable levels? How? Do the IMF bureaucrats mean aluminium and copper prices which are causing price/wage inflation?

Even stronger: the IMF lunatics are able to predict the exact price decrease/fall (minus 35%) and the exact time (2010) at which this price will fall.


A third element of the world scene.
And now, we may be one step closer to the truth
Iran says U.S., Israel ordered September 11 attacks

"When Leon the tyrant of Phlius asked Pythagoras who he was, he said, "a philosopher," and that he compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as spectators; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for TRUTH."

GOLD FINGERTax needs the AXX~#1472449/6/06; 23:16:27

How true all this is! What has happened?

Years ago my Great Grand Father Sailed
to this country to Escape the high taxation!

Now, I am almost whishing he stayed.
After all I would have ended up in the
"Happiest country in the world."

I am wondering if we have sold out?
To all the socialist ideals of others?

To me if ALL the politicians had to scrub
their OWN toilets and mop up their own
floors we would not have to see the middle class
being cheated from their wealth.

Just imagine if this absurd over taxation was

Seems to be they want us to be poor! Talk about
eliminating the competition. No wonder the USA
is one giant welfare state. How pathetic!



REF: mikal (9/6/06; 08:48:52MT - msg#: 147223)
"Never be lax about the tax!"

ArmageddonRecession and Gold#1472459/6/06; 23:28:14

Since my last posts on gold where I stated that in a American recession I thought that gold will go down to go sideways I now think that gold will have an upward bias and continuing pressure to the upside since China now has publicly stated that "China Forex Reserves Must Not Grow" and thus China will need to SPEND those dollars earned through exports NOW not later or a little bit later when commodities drop BUT NOW!!!!! :)

I imagine one boat being filled with radioactive sewage and people in that boat needing to constantly bailout the boat so it doesn't sink which is America drowning in debt.

I imagine another boat being filled with dollars that need to be constantly gotten rid of, SPENT, which is China "DROWNING" in a sea of dollars.

This is a pretty amazing situation since I don't recall any other time in human history that anyone or any country had too much money coming in. :)

In a worse case Weimar Germany scenario I can image Chinese Central Bankers dropping American dollars from huge cargo planes over other countries like Thailand, Vietnam, Cambodia, etc. in order to just get rid of dollar currency. Helicopter Ben watch out you may have some stiff competition in the future. HAHAHAHAHHAHAHAHAAAA!!

China Forex Reserves Must Not Grow, Says Vice President

By . Agence France-Presse

Sept. 6, 2006 -- China's forex reserves rose further to hit $954.5 billion at the end of July but they must not be allowed to grow much more because of the upward pressure they put on the yuan, Vice President Zeng Qinghong said Sept. 5.

The latest figure translates into 30.3% growth from $732.7 billion at the end of July 2005 and places China well on track to hold an unprecedented one trillion dollars in forex reserves by the end of the year.

Zeng, writing in an article published on the website of the official Study Times, said China will take measures to ensure that there is no further significant rise in the reserves. "The foreign exchange reserves have reflected China's growing economic power but on the other hand they have increased exchange rate risks and added upward pressure on the yuan," he said in the article. "We will take comprehensive measures to avoid further significant growth in the foreign exchange reserves," he added.

The government will take measures to boost Chinese technology imports as well as "increasing imports of important strategic natural resources," said Zeng.

Analysts said this might suggest that China is stepping up its strategy of securing commodities needed to power its economy. "The U.S has rich oil resources but it still purchases a lot of crude oil," said Peng Xinyun, an economist at the Chinese Academy of Social Sciences CASS, the top government think tank. "If they can do it, why not us?"

To keep a stable exchange rate, Beijing has to constantly buy up the dollars coming into the system with yuan which in turn boosts liquidity in the local financial markets. That liquidity in turn has to be soaked up via the sale of government debt instruments to avoid inflationary pressures but the question is how long this can continue.

Copyright Agence France-Presse, 2006

melda laure(No Subject)#1472469/6/06; 23:41:09

Yes, I wonder about the idea of the chinese blowout. Tuesday's commodities action was rather impressive (gold up, oil down, dollar flat, and aluminum and copper up too). Time will tell.

I heard a rumour that used shipping containers have become quite cheap if one lives near Long Beach. In looking for news I found this:

Matson has entered the China trade at what some analysts regard as a difficult time. The industry is flooded with more ships than it needs, and the U.S. economy is showing signs of cooling...

..."The China business could turn out badly," Goldman Sachs Group analysts Jonathan B. Habermann and Carey Callaghan wrote in a report to investors on Matson's plans. "No U.S.-flagged carrier is currently in this 'retail' end of the market in China, and the concern is that the business could have a slow gestation period."

The presumption that the US consumer is 70% of the US economy is probably still correct. However, I doubt that our sneezings will cause worldwide colds anymore. A different article discussed the continued tightness at US ports and the need for more "investment" so apparently the confusion lingers still. I would perhaps be more interested in where China is investing in port capacity.

Gold may well be recession proof this time around.

melda laureThere is a historical example.... 1970's#1472479/6/06; 23:57:54

Sir A. recall the Saudi's in the 70's. Something like $150 billion in surplus cash (over what they used to get) each year.

As an earlier (circa 1998) Privateer paper had it, in '78 you could buy a space shuttle for 4 billion, an air craft carrier for 5 billion, an aircraft carrier task force for about 8 and if you wanted it stocked and armed (complete with helicopters and f-14's) the total was about 15 to 20 (I forget the exact numbers).

And this was in an era before derivatives could patch over this mess like today. The effect on gold was disastrous, (they had to take a rain check).

Usually, selling BACK your reserves puts upward pressure on the home currency. Now it is a case of TOO MANY reserves putting upward pressure? Such a quandry! The chinese will be building ports in africa just to get relief.

TownCrierLatest arrival at 'The Rocket School of Economics' from Prof. von Braun#1472489/7/06; 01:37:06

TITLE: Gold, Bankers, the Trade Deficit and Unsettled Transactions


Let's start with the principle of breathing, which, as we all know, is that for each new breath to be taken, the old has to be expelled. It is impossible to hold ones breath for any lengthy period of time, eventually that 'held' breath will expel itself and a new breath will be automatically breathed in.

Fortunately there is no charge for the air.

The working principle of banking is that a) the bank has a paid up capital to begin with and begins to accept deposits from customers, b) customers deposits are then lent out at higher interest rates, c) it is from the difference between what the deposit earns as interest and what the loan earns as interest that the bank makes its income.

Under a fractional banking system the bank can lend out the same deposits several times over, providing that it can find a willing borrower with recognizable security and the ability to repay the loan. Those that police the banking system are always looking at a bank's loan portfolio to see that these requirements are met, that the bank's loans are sound, that the security is there and the repayments are up to date.

The depositor also has an interest in the bank's soundness as he or she would at some stage like his/her money back.

...following the end of WW2 through to the late 1950's when an emerging Europe, having rebuilt itself from the previous debacle as a result of trade, began to accrue a surplus of these dollars and, per the 1944 agreement, began to request gold (then priced at $35 per ounce) for these dollars. This began a substantial decline in the US's gold reserves which continued until August 1971 when then President Nixon closed the gold window.
The process of settling transactions had taken on a different form as countries, central bankers and people conducting business came to grips with the new official non-redeemable international monetary system, which in and of itself is a very non-democratic institution, one that was never discussed, voted on or approved by any entity other than the US itself.

...Currently there is about $1.6 trillion held by US bankers within the US on behalf of the other countries central bankers. These amounts are referred to as reserves and it is estimated that 66% of all central banks reserves are denominated in US $'s which means that they are deposited in the US banking system. Now that is rather cute as the cost of doing actual business with Uncle Sam is, to be polite, a tad one-sided. To begin with, the most essential commodities, the ones required for productivity expansion, are priced in US $'s, so the other CB's obviously need to have access to US $'s to fund their own countries' development. But these dollars, the ones referred to as reserves, are deposited within the US banking system itself and it is from these accounts that payment is made.

However the notes used as payment are debt instruments and are themselves not officially redeemable, which suggests that any accumulation of them is a risky business. They are not a neutral item, on the contrary they are anything but neutral, being dependant on the rest of the world's inflationary banking system to agree to hold IOU's and not hold neutral items.

...The effect of the fiat monetary system is to postpone the settlement of any transaction for as long as possible, for that is all it can do. You can not pay off a debt with the creation of more debt, which is what the US has been doing since August 15, 1971 and you can not call a debt instrument a reserve, although that is what the other Central Banks have been doing. They have become depositors within the US banking system, not so much by choice but as a requirement of the banking system itself, the one agreed to in 1944 and drastically curtailed with no discussion or agreement in 1971.

...Basically no outstanding trade obligations have been settled since August 15, 1971 and the much touted wealth accumulation we hear about today is not other than a collection of compounded book entries that are really quite meaningless and of very dubious value. What the Chinese need to understand is that they are accepting payment for goods produced in a currency that is not a reserve, merely a swap item, which in and of itself creates inflation which appears as rising prices, which in turn shows up in the price of the very commodities China (along with India and other developing countries, as well as the western world) needs to keep the US-dominated fiat monetary system going.

...Currently I believe that now is about the time we see the emphasis on the back-to-the-basics game when it comes to gold, commodities, bankers and unsettled transactions. If you as an investor, being a holder of US $ denominated 'stuff,' do not currently hold commodities, then you are going to be one among many in a very large pool, one that is tainted with redeemability issues that have been postponed and postponed and postponed again and again, for the last 35 years.

The net result is the numbers increase -- as in from billions to trillions -- in terms of debt, debt that can never be settled, as there is no official mechanism in place to do it with. The only thing left to do is to come up with ever more exotic debt instruments, some of which must work their way through to the consumer so they can continue to consume. Needless to say this will be difficult to do as the consumer is over consumed already, suffers under the weight of personal debt, has no savings and is about to become un-creditworthy.

Put another way, it's time for the US banking system to breath out and resume functioning in a fashion that reflects what a banking system should be -- a means to settle transactions via a neutral item, one that is acceptable to all parties involved.

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

See link for von Braun's full commentary, and an index to the Rocket School archives.


USAGOLD / Centennial Precious Metals, Inc.Click through to see the latest, and sign up to ensure you receive the next!#1472499/7/06; 01:48:05">join the newsgroup
NedGood job Camel !!#1472509/7/06; 04:28:39

"In the end you can't tell who is the terrorist and who is the peacemaker"
NedMore who is the terrorist and who is the peacekeeper#1472519/7/06; 04:35:42

The peacekeeper knowing there are terrorists in a city invade the city and to find a terrorist they (mistakingly?) kill 100 men, women & children. They do this many times. When the smoke clears the peacekeepers announce (believe?) they have killed 100 terorists.

The city announces their dead in the thousands.

The "terrrorized" terrorists plan to invade the "terrorist" peacekeeepers.

SundeckProf von Braun's latest rocket class, TC's msg #147248...#1472529/7/06; 05:36:07 a tidy summary indeed...

Debt begatting debt, the old testament of monetary genesis in biblical spades! ...and seldom (never) any real way to settle...remember CNOOC and Unocal?

"Take dem dollars aways where I cannot see 'em!" says Uncle Sam. "They is fer UDDER peoples ta use 'n enjoy! Dontcha remember? 'Tis better ta give dan receive... 'N I jus luvs given out dem dollars!"

Good one TC...


GoldiloxUSDX#1472539/7/06; 09:09:09

Sinclair: Expect a hard chop as the dollar tries for positive ground but gets turned back and the gold phobic professional traders play the "all pile on" game when weakness naturally occurs.


"Hard chop," indeed!

TitanGold not tied to USD?#1472549/7/06; 09:13:53

I've read here of late the view that the POG is not really related to how the dollar goes up and down. Well, this morning's drop of $20 in POG juxtaposed with news that the dollar is strengthening vs. the euro kind of shoots holes in that theory. There doesn't seem to be anything else in the news that I've seen that would cause gold to drop so drastically. Anyone have any other analysis?
GoldiloxOther analysis#1472559/7/06; 09:51:41

@ Titan,

See the quote I posted in msg# 147253.

Sinclair would beg to differ with anyone who asserts that there has been de-coupling of the $ and gold.

While gold may move based on true fundamentals on days when there is no stronger currency or political buzz, it cannot be totally independent from the US $ as long as it is priced in that currency.

Goldiloxemail from Congress#1472569/7/06; 09:58:43

Got this email yesterday from the US Congress Weekly Update.

Rumsfeld Under Fire:
The Senate may consider an amendment as early as today calling on Pres. Bush to replace the Pentagon leadership including Sec. Rumsfeld.
Should President Bush replace Secretary of Defense Donald Rumsfeld for his handling of the Iraq war?

Yes, Pres. Bush should replace Sec. Rumsfeld

No, Pres. Bush should not replace Sec. Rumsfeld


Do they actually care what we think, or are they just counting the volume of returns to see if anyone is still awake?

I guess my emails to the Senate and House are getting read somewhere!

GoldiloxElliott Wave email#1472579/7/06; 10:01:51

There is an old traders' joke that goes like this:

"After a long day, an exhausted, frustrated trader is standing in front of the elevator, waiting to go home. Elevator doors open, and he sees his chief market analyst. Trader looks at him and says, 'OK, now can you tell me which way it is – up or down?'"

I felt that way this morning (Sept. 6) when reading the analysis of today's move in the U.S. dollar. It gained against other majors, but as to why it happened – well, that's where it gets murky.

"The dollar rose broadly on Wednesday after data on labor costs and growth in the service sector suggested greater strength in the U.S. economy than some investors had thought," said Reuters.

Not so fast, retorted The Financial Times. Something was "fishy" about today's U.S. corporate profitability number and the Institute for Supply Management report, according to a couple of analysts who pointed out several inconsistencies in the data.

Why did the dollar gain today, then? Oh, take your pick. Maybe it really was the morning data. Maybe it was "traders liquidating some of their short dollar positions." Maybe it was both... or maybe something else altogether.

Whatever it was, in the end, it doesn't really matter. Because for whatever reason the dollar gained today, it has already happened. It's history. We can all analyze the move till we're blue in the face, but the only relevant question now is – where does the dollar go from here?

Unfortunately, that's the one question all this analysis doesn't answer. And that's just the problem with economic data: They are rarely black-and-white, and neither are the conclusions you reach when you're done weighing all the pros and cons.


Paralysis by analysis?

melda laureIt is POG that walks and the dollar that sleeps.#1472589/7/06; 10:18:48*%2085.7/DXY&a=D&z=610x300&d=medium&b=bar&st=

Yes Sir titan, we do look a bit silly this morning. I think if you compare the magnitudes (0.6% rise in DXY versus 2.8% drop in POG) you can see that either the dollar has an inordinate effect or that POG is doing its own thing with wild abandon whilst DXY is merely twitching in its wake.

On a longer term chart of POG and comparing it to the DXY de-normalized POG price we see... no difference! The normalized price ought to be a straight line as the two are inverses of each other (according to the old way of looking at things). Put another way, comparing both normalized POG and normalized DXY ought to be mirror images with the same amplitude. But in fact we see that adjusting pog for the changes in DXY makes no difference.

I have had a dispute with Gandalf as to whether the chart should be

GC * DXY/ const.

or whhether it ought to be in the denominator as he puts it:

GC * const / DXY

But as (in this case) both charts are VIRTUALLY IDENTICAL (!!!Good Heavens!!!!) then we may conclude that in the recent past, POG has walked its own trail while the dollar has been sitting still.

silverton3Is ThisThe Fakeout??#1472599/7/06; 10:42:02

News today...bad comments on housing market

Slow housing means fed will not raise, or will lower rates.
Lower rates mean lower dollar means good for gold.

So why is the dollar higher and gold lower???

Volumes on the stocks I follow seem light. No panic that would result in a large drop in prices. Looks like a fake out to me. Specialists just opened prices 2% down to see if they could pick up some shares cheap.

The only thing that has me concerned is some trend lines were broken on some of the stocks - bad technically.

GoldiloxDollar vs. gold#1472609/7/06; 10:57:00

@ melda laure,

As long as the USDX "treads water", I can agree with you - fundamentals rule.

Should TPTB lose "control" over the US $ slide, the negative correlation will be back with a vengeance, IMHO.

GoldiloxGold drops as much as 3% as the dollar gains#1472619/7/06; 11:03:22{0D66AFEC-CD8D-4CA6-B858-5CAC712B0D17}


SAN FRANCISCO (MarketWatch) -- Gold futures fell as much as $20 an ounce Thursday morning, continuing the consolidation trend of the prior session as the dollar rose against some of its counterparts and traders digested news of rising production in China and two major mine expansions in South Africa.
Gold for December delivery was last down $17 at $624.80 an ounce on the New York Mercantile Exchange, after trading at a low of $621. On Wednesday, the contract lost more than $5 an ounce as dollar strength and weak oil prices gave traders an excuse to cash in some of the metal's recent gains.

"In addition to fresh confirmation of rising Chinese gold production (+9% in the January through June time frame), the market was also presented with ongoing dialogue about a significant mine expansion effort by Gold Fields in South Africa," Nell Sloane, an analyst at said in daily commentary.

"While the mine expansion was known in the action yesterday, the trade is seeing the details of an effort to 'go deep' and hopefully increase production by as much as 10.8 million ounces," she said.


Headline mentions dollar strength, but the meat of the story is focused on supply increase.

Cometosethe beloved PARTY has a voracious gold apetite re: proclivities toward using imenent domain to seize your property .#1472629/7/06; 11:13:51

This subject might be an underreported undercurrent
that should be analyzed for it's influence in the coming months on markets near and dear.

Cometosedollar / Goldilox#1472639/7/06; 11:19:47

every time they sell the oil reserves , it supports the dollar's having an emphasized impact on the price of $GASO which is dropping like a rock ........


The question WHERE WE GO FROM HERE may not be as immenently important as to WHEN THE MASTERS can affort to stop dumping OIL RESERVES on the open market.

I think WHEN is maybe a month shy of the elections ...

Goldilox$Gaso#1472649/7/06; 12:02:01

@ Comatose,

There certainly is something strange going on in the $GASO market, as Labor Day weekend, the traditional final fuel gouge of the vacation season, went by with the lowest prices of the last six months, if not the entire year.

I guess they have bigger fish to fry than collecting an extra dime on Labor Day.

MKThere were two important pieces of news today. . .#1472669/7/06; 12:34:46

The markets took one into account and ignored the other. Both had to do with commodity supply/demand. Commodities across the boards tumbled as the bears made its view stick, drove prices through supports, and pushed futures positions liquidations. This was another paper phenomena that has little to do with the actual physical markets in any of these commodities.

The negative news came in a report from the International Monetary Fund. It stated that the commodity price boom over the last three years was "unsustainable" and to expect "sharp declines by the end of the decade." Though the IMF report went to pains to say that this "collapse" was not imminent, it appears to have had a dampening effect in the market led by oil and gold.

The IMF's reasoning in this report is categorically at odds with mainstream analysis on the commodities markets and one wonders the real motivation for the report. Statistics are pulled out of the air and assumptions drawn with little connection to the real world.

For example, the report states that "the average price of aluminum and copper will decline by 35% amd 57% respectively by 2010. It is hard to say how the IMF might have drawn this conclusion, but there it is nevertheless. The IMF says it bases this assumption on a diminution of current high demand and an expansion in mine and smelter production over the next five years -- two best-of-all-possible-world outcomes that few seasoned market players would take for granted.

The IMF also "dismisses" speculative demand in the commodities markets as playing a significant role in high oil and metal prices. One wonders what would be the outcome if strong investor speculative demand were to enter the market, since it hasn't played a role already.

To make what others might turn into a lengthy analysis manageable for our readers, let's just say that much of the IMF position looks to be inspired by dollar politics and neglects the fundamental analysis most of the rest of the financial community has employed in analysing the commodities' boom. Needless to say, I find their conclusion that investor interest in the commodities has not been a significant factor to be a bit short of comprehensive. Nevertheless, the bears decided that this was enough fuel to drive the commodity complex lower which they did with impugnity. As usual, the bull side -- disparate and decentralized as it is -- couldn't muster the forces to fight back, so the bears had their way. It is likely to be a different story as we move along and investors see the weaknesses in the IMF position.

The ignored news has to do with well-placed statements out of China that it would use its currency reserves -- now estimated at near the one trillion dollar mark -- "to fend off risks" to its economy including the "import of products" and "strategic materials" (read commodities like oil, base and precious metals). The fact that these statements (made not just by anyone in China but by its prime minister, Wen Jiabo, and vice premier, Zeng Quinghong) appear today alongside the IMF report, I believe, is both significant and a study in contrasts.

Let me ask you which one has more staying power? The study by the IMF based on supposition, or the report from China which reveals the developing strategy how it will employ its massive reserves?

This final paragraph in the Financial Times report this morning is telling:

"China's large holdings of U.S. securities -- substantially in T-bills -- makes the discussion of any change in reserves policy extremely sensitive. Several lower-ranked officials have talked about diversifying the composition of future holdings of reserves away from dollars. But it is difficult to assess whether there has been any change."

Perhaps the market should have played this the other way around. Perhaps it should have ignored the IMF report and wagered on the China story. As its often remarked, where there's smoke there's fire.

All of this translates to another buying opportunity to those who make the proper connections between cause and effect. We will be dealing with propaganda all the way up in this bull market, just as we have in the past. We may have lulls or corrections in the trend but, until something changes fundamentally -- changes beyond the rhetoric -- this bull market is intact for the long run.

I particularly like the opportunity embodied in our St. Gaudens $20 gold piece offer. I can't remember the last time premiums were so low. Even if you already own these, you might want to add and thus reduce your average premium. If you have pre-1933's that you would like to give a little extra potential, a trade might be to your advantage at these premium lows. Go the link above for an interesting graph and discussion, and also a spectacular photograph of this ever-popular U.S. coin.

At any rate, I thought the forum might benefit from the analysis above. As always, none of this should be contrued as investment advice, just some speculation on what happened today.

My best.

Topaz@Titan ...$Gold#1472679/7/06; 13:07:11

Rest assured Titan, the Gold/Buck thing is O V E R!!
Up until the '05 roll-over, $Gold was simply an alt- Currency mirror ie: whatever DX did, PoG did the opposite.
Now we see a new kid on the block showing scant regard for or attachment to Currencies of ANY stripe...(See Chart) PoG now rises and falls in ALL Currencies.

Of course PoG can be seen doffing it's Hat to the tired old Dollar, but nowadays we also see acknowledgement to the many bright young things also.

arbyh(No Subject)#1472689/7/06; 13:08:01

@ MK...good post.
The IMF interests spell out that the real money in the world will fight tooth and nail to preserve the status quo until they are ready to reap the whirlwind. It is either that, or a misdirection play for them to continue to consolidate PM purchases on the cheap. I understand that they hold the most already, but if they are pushing for a world currency to "save the day" they would want most others to consider PM of no value to further enhance the grab. The powers that be after all want total world financial domination with no loose ends. New World Order thing.
China is a loose cannon and still a new arrival on the block for the Money Changers. China hasn't been totally owned and puppeted yet by Money Changers. I have heard of fights there too over a central bank theme. China will try to do what is right for China, as we USA once tried to do, but the Money Changers will have thier way. The Money Changers are in it for as long as it takes. 1796 till now still on the same game plan, plus prior with Bank of England. Rothchilds, Tri-Lateralists, and Bilderbergs, others...
Did you watch the films I linked to?

melda laureI'm sorry sir, do you have any other cards?#1472699/7/06; 13:37:55

Sir cometose, that was an interesting pack of intrigues. Regardless, I have never heard of the Federal Financing Bank. Apparently the machinery of this sort of thing just isn't in my vocabulary; shocking!

I wonder whether China's exit from the CHIPS is for real or not. Hard to spend when they pull your credit card, but even worse for the bank if you have the ability to issue your own. Did IH ever mention this back on Aug 14th?

I like MK's story better, (at least from the plain hobbit sense metric) though the one you linked was quite entertaining. In either case, grim days for the dollar's future, (but presently a bit of relief if the chits are all locked up).

Sierra MadreChina says: "We have enough reserves. No more wanted."#1472709/7/06; 14:17:50

I think this will turn out to be a MEMORABLE DAY.

China says: "Basta!" - "Ca suffit!" - "Enough already!" with regard to reserves - and we know they refer to dollars.

I agree one trillion nothings should be enough.

What happens next? Well, the USA might say, "You no buy more Treasuries, we raise tariffs on Chinese goods, yes?"

When a borrower is in too deep, and no further loan is visible on the horizon, it is not unusual for the borrower to get nasty with the lender. Threaten bankruptcy or some other ploy to squeeze the lender, worried about his capital.

Another thing: the Chinese skim off all incoming dollars in order to prevent their reserves from rising, and OTHER countries will go and do likewise. A persistent SELLER of dollars is the last thing the dollar wants.

The financial thing seems to be on the verge of unravelling. That's why I think the statement by the Prime Minister and Vice Premier of China is very important, indeed.

I'd say the world has sort of been holding its breath, nothing much happening after Israel got through with Lebanon, the Iran deadline passed and nothing! Nothing happening.

This Fall should be eventfull. If you have some cash, gold is on sale, right now.


Demosthenesinflation#1472719/7/06; 14:26:36

I was having an interesting discussion with my father the other day about incomes and inflation. I am currently selling my townhouse and moving to a single family home, much like my father did when he was my age. In 1980, he was just promoted to grocery manager of a major chain supermarket, roughly equivalent to 3rd or 4th in command. He made a salary of 30k a year(got paid double-time for working Sundays back then), which according to government inflation calculators is now equivalent to 68k a year. The salary of a beginning grocery manager now... between 35-40k.(no double-time Sundays) Ouch. Of course, 68k is on the order of what I make as an engineer for a defense contractor. So people with college degreees in highly paid fields are now doing just as well as a hard-worker with a high school diploma could do working a job with no special skills. There is something dreadfully wrong here...

Tried to also tell him that even if he bought gold at its height in 1980 you would still be ahead of cash in a mattress, but he wouldn't hear it...

Sierra MadreDemosthenes: How to convince your Dad...#1472729/7/06; 14:40:13

Demo, try this:

Give him a $20 St. Gaudens gold piece as a gift. Put it in his hand and see what happens. (Available at CPM)

I think you'd probably be surprised to see the reaction.


FlatlinerThe price is just noise#1472739/7/06; 14:59:24

It's what's happening in the background that will set the stage for gold in our futures. If there were ever a grass roots movement that sits at the tipping point, it is human understanding of the gold market. It is a complex work (in progress) and something that would never have been truly understood if not for the existence of the internet. Those who seek this knowledge find solace in holding physical gold and trust that the truth will spread and the honorable will act.

If you are nervous for your future, buy a little gold and connect your friend – through the internet – into the fabulous network where information is freely exchanged regarding inflation and foreign bank gold reserves. If your friend has money and a logical mind, they will see gold differently then those that lived through the 70's.

We are not long from the point where the common investor will not buy a gold derivative. That common investor will by physical leaving only those that move the market in control of both the long and short sides of the paper contracts. It will be at that point that we will read reports about delays in physical delivery at these low bargain basement prices. It will be at that point that the paper markets will do exactly what has been done with nickel just a short while ago. But, unlike nickel, if this same thing happens in gold, news will travel very fast via word-of-mouth. Gold will be coveted.

As long as people continue to learn what is going on with regards to our world currencies, those with brains will save in gold. All others will be shaken clean.

USAGOLD Daily Market ReportPage Update!#1472749/7/06; 16:06:05">
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.

THURSDAY Market Excerpts

September 7 (from DowJones) -- COMEX gold futures settled sharply lower on Thursday as gains seen earlier in the week were erased by profit-taking and strength in the U.S. dollar.

At settlement, most-active Dec gold was down $16.90 at $624.90. During the session the contract traded as low as $621 -- its weakest level in more than a week.

Analysts said a broad-based metals sell-off was triggered by a oil-led liquidation craze and a rise in the dollar versus its major counterparts.

In New York, oil futures dipped below $67 a barrel for the first time since April after BP PLC (BP) said it plans to return to full production at Prudhoe Bay, Alaska, and after U.S. government data showed distillate stockpiles were higher than expected.

The move sent precious metal lower along with concerns over potential U.S. interest rate increases due to signs of the weakening housing market, analysts said.

The fear of rate hikes down the road combined with gold's inability to follow through from Tuesday's gains played a vital role in the session's downturn, said Stephen Platt of Archer Financial Services.

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

melda laureManke tanya tula?#1472759/7/06; 16:14:52

@ SM.
I've done that...

"What is this?..." more puzzled looks. Hefts the coin. "Jeez this is heavy." some try to bite it at that point wherupon I say "It's 22 carat, you really cant chew it with your teeth." then usually somebody tries to stick it in their pocket (presumably to see my reaction) or somebody else says "Lemme see that!"... "Is this real gold?" I shrug... "Naw, it cant be!... It's real isn't it?" and I say "of course its real." Then the person has to scrutinize it closely because it's probably the first krugerrand they have ever actually held, or because it is 30 years since they held their grandmothers last double eagle when they were knee-high to a rug rat. The odd brown discoloration is alwas confusing... "What's this thing worth?" is the next question, which I answer in typical elven vagueness "Its about an ounce; whatever an ounce of gold is worth"... "How much is that?" whereupon I make up a number and add "who the heck cares, if I knew THAT I'd be retired with all my winnings trading commodities." The next question is usually "where did you get this?"

"Manke tanya tula?... Minas Denver, Coronar tinca Meldon."

It is a rather amusing phychological exercise in which the future price action matters little.

TopazGold.#1472769/7/06; 17:46:06

mikalBehind the wall: China's complexities mirror world economy#1472779/7/06; 17:53:10

Silver lining: China's Strong Yuan Has Some Benefits For America | Tyler Cowen | The New York Times | Sept 7, 2006
"U.S. policy makers are nonetheless concerned about cheap Chinese imports. Treasury Secretary Henry Paulson Jr. will visit China this month, in part to add further pressure on the Chinese to allow their currency, the yuan to rise in value on world markets."
Mikal - The renewed 'Washington Agreement' stipulated a combined annual gold sales quota for European banks of 600 tons.
Fortunately for the Chinese, they have the opportunity to purchase gold this way off market. The current agreement expires this September(the 26th) and doomers and some speculative traders are betting the remaining 150tons of allowable quota will show up all at once between now and this deadline.

"To the United States, the primary gains from yuan revaluation would come from the increased spending by Chinese consumers on U.S. exports.
But the Chinese are, and should be, extremely cautious. In addition to saving about 50 percent of their incomes, they are spending most of the rest on local basics, like food, cheap cars or education. Health care is a probable growth sector. China is still a poor country, and its potential to drive U.S. export success is modest for the foreseeable future.
Revaluation advocates claim that the Chinese need a stronger currency to prevent their economy from "overheating."
China may indeed not be stable. But it is unlikely that the U.S. government can successfully micromanage a foreign country of 1.3 billion people into a soft landing. Chinese economic data are very poor, and Americans do not have a good record in advising transition economies. The Chinese recipe for economic growth, which encouraged exports, seems to be working, although it ran counter to efforts by American economists and policy makers to promote the privatization of state-owned companies."

Mikal- Complaints and conundrums! If they cannot get China to have "stability", better "economic data", to "increase spending on US exports", "prevent their economy from overheating", improve their "record in advising transition economies", arrange more Chinese "privatization of state-owned companies" or "successfully micromanage...a soft landing" in China, they can blame it on China's problems.
And they justify past trade and forex policy with claims of "innovations", cheap goods and other offsetting "benefits".
No wonder gold consumption is rising exponentially!

GoldiloxDefense CEOs doing well since 9/11, study says#1472789/7/06; 19:18:15


WASHINGTON - The chief executives of corporations making big profits from the war on terror are enjoying far bigger pay increases than CEOs of nondefense companies, according to a study by two liberal groups.

The study, conducted by the Institute for Policy Studies and United for a Fair Economy, found that, on average, CEOs of corporations with extensive defense contracts are getting paid about double what they made before Sept. 11, 2001.

CEOs of other large corporations — without big stakes in the war — have averaged pay gains of 6 percent during the same period, the study said.


It's highly profitable to oversee the destruction of the US manufacturing economy! War drums are not likely to subside when arms sales (legal and illegal) are the most profitable enterprise of all!

The Invisible HandMundell doesn't understand the new gold market#1472799/7/06; 20:47:29

Mundell would be thrilled if the governors of the IMF would give more thought to finding an arrangement to get back to the goals of Bretton Woods. "There was nothing fundamentally wrong with the kind of monetary system we had in the postwar world." It was a system in which other countries fixed their currencies to the dollar, WHILE THE US FIXED THE PRICE OF GOLD...


Mundell argues that the system broke down in the early 1970s because the US of A rejected the idea of INCREASING THE PRICE OF GOLD....

He still doesn't realise that
1/ the price of gold has been "GOVERNED" for the past 60 years
2/ there now is ANOTHER system which does NOT object to the increasing price of gold.

He's thereby displaying that he hasn't the sligthiest clue about the "new" gold market.

Isn't it amazing that not a single poster had anything to say on the forum about this Mundell-IMF interview?

The Invisible HandSpotlight on SCO is no coincidence#1472809/7/06; 22:01:11

The Shanghai Cooperation Organization [SCO) {...] Founded under China's leadership in June 2001 , the SCO was quickly marginalized by the success of the U.S.-led war in Afghanistan later that year,pubID.24873/pub_detail.asp

I reported earlier that the IMF said Wednesday the prices of precious metals have peaked and could descend in the short term, after posting all-time highs in the past years because a a voracious appetite on the part of China.

The IMF WANTS that secondary price-inflation causing raw materials stop rising in price.

The IMF will achieve this through the "efforts" of its dollar-loyal banking friends. - watch the price of gold having been flicked away down from the $640 level, nicely timed with the public relations stunt of the IMF.

How many spectators can still doubt that the dollar International Financial and Monetary System is MEGA-CONTAINING the system?

Now that an Iran war is being contemplated by our masters, members of the SCO are strengthening their mutual cooperation and even their cooperation with Iran.

If the Iran war ends up for the Great Satan like the Iraq war, who will be marginalised? The SCO or the Great Satan?

Here's the Orando Sentinel earlier this week:

though, war is not inevitable. The Iran conundrum offers at least three other future scenarios.
One would be for Iran to come to its senses.
Another scenario would be for Iran to suffer global sanctions for a time before it comes to its senses.
Third -- and this is my preferred outcome -- the Iranian people will stop allowing themselves to be squeezed between their rulers and the international community, and stand up. Iranians have more experience in such matters than most people. They overthrew a tyrannical shah in the late 1970s, and they should not hesitate to take similar ACTION AGAINST THE TYRANNICAL MULLAHS today.

Without a self-inspired reversal, a sanctions-prompted about-face or a revolution, Iran will further isolate itself, heighten its pariah status and invite a war beyond proxies.,0,1633862.column?coll=orl-opinion-headlines


That's what we need. A good Revolution in the Middle East and then Iran will without problems be admitted in the SCO.

As I said earlier, once Iran is a full member of the SCO, it is GAME-OVER for the gold-containers.

The Invisible HandSCO marginalised after US victory in Afghanistan?#1472819/7/06; 22:08:41

Nato's leaders have urged member countries to provide reinforcements to help in its campaign against Taleban guerrillas in southern Afghanistan.

Qthe venerable nobel economiesters#1472829/7/06; 22:32:11

"a new method to determine the value of derivatives."

Myron Scholes
He co-founded the ill-fated Long-Term Capital Management (LTCM) in 1994. In 2005, Scholes was implicated in the case of Long-Term Capital Holdings v. United States, where he attempted to invest funds from his company, Long-Term Capital Holdings, in an illegal tax shelter in order to avoid having to pay taxes on profits from company investments. It was found that Scholes and his partners were not eligible for $106 million in tax deductions they had claimed. Additionally, they were fined more than $40 million by the IRS.

Robert C. Merton
Robert Merton and Myron Scholes were on the board of Long-Term Capital Management, a hedge fund company founded by John Meriwether that folded in 1998...

... He then applied optimal control theory in order to derive consumption and portfolio allocation rules for economically optimizing agents, and his work has paved the way for the now flourishing field of financial engineering,

any questions?

QGold and the invisible hand#1472839/7/06; 22:40:33

The invisible hand of the free market of trading entities distributing resources is something to be studied and modelled and marvelled at. It is not something to be manipulated and controlled, optimally or otherwise.

The conceit of men who engage in such atrocities have the suffering of their fellow men on their hands.

It seems the vital lessons of communsim have not been learnt and the fundamental errors are still preached today. Did 40 million russian and 60 million chinese souls die for nothing?

The arrogance and lethality of the state is the problem, not the solution.

QIn the rooftop penthouse suites#1472849/7/06; 22:45:58

they are mowing the tennis lawn, whilst the golden foundations of the building creaks and groans 156 stories below.

Ask Alan Greenspan, he knows.

GoldiloxSTORM CLOUDS CAST SHADE ON THE RALLY#1472859/7/06; 23:34:57


A scan of the various US market, international, and sector exchange traded funds (ETFs) indicate that practically all of them are in bullish patterns. However, there are some notable exceptions and these may be suggesting that what appears to be an overwhelmingly bullish stock market is not so bullish after all. Consider the following ETFs that are showing sell signals and bearish price objectives according to one percent, three box reversal point-and-figure (PAF) charts:

Dow Transports (IYT)

Industrial Select (XLI)

Timeliness Select Portfolio (PIV)

(In addition, several energy-related ETFs are now in PAF "sell" signals.)

Most ominous is the action in the Dow Transports where practically all of its components are in bearish technical patterns. As of Wednesday evening, 18 of 20 Dow Transports are below their 10-week moving average, and 15 of 20 are below their 40-week moving average. With the Dow Jones Industrial Average and the S&P 500 rallying in suspect volume during August and nearing their multi year highs, the bearish action of the transports seems to cast doubt upon the validity and sustainability of the current US stock market rally.

While this doubt is cast, it is important that the longer term UP trendline of the Dow Transports is still intact and deserves respect. Similarly, the UP trendline in the relative strength line between the Dow Transports and the S&P 500 is still intact. Both of these trendlines are in the process of being approached and the behavior of the transports near these trendlines is important since it has implications for the broader stock market.


Hmmm . . . $GASO is down, but so are the $Transports, who should be enjoying margin relief from the former.

Which is the cart, and which is the horse?

KnallgoldStaring into the abyss?#1472869/8/06; 08:03:34

We have neither a fall rally in Gold nor a weakening $ nor further escalating commodity prices.(sidenote:Uranium made a big leap of 7.2% upwards days ago,a hint which alternative energy we'll use...)

Did the summer doldrums/fall rally pattern get too apparent (thanks to USAGOLD's chart)?It seems the fix is back in full strength.The strong$ policy has always included selling Gold down,and Paulson et al have announced this policy when coming into office'so don't say you haven't been warned!

ANOTHER wrote once that the prospects of a physical sale leads actually to a HIGHER Gold price,because it SUPPORTS the paper Gold game.No sales,no support.

So we have 1)the $ guys are abusing the Gold market till the last drop of blood and 2) the Euro guys are way short of their Gold quota-and are very silent about it.

This in mind,I'm tempted to further stress the view of "here the agreement stops"-to support the paperGold market!

KnallgoldA hypothetical question#1472879/8/06; 08:36:31

What would happen if all commodity paper markets would blow up?I mean by accident.Nickel and Copper come to mind.

Ari said FreeCommodities is not on the agenda,but the current lockstep of the commodity and Gold markets at least provokes this thought.I know that the Goldprice is made primarly with above-ground supply where commodities are mostly mining supply driven.But the paper'n'futures logic applies to both.

I think most of the sound reasoning of FreeGold can be applied to other commodities.It would surely address the comlaints of the producer nations.Yeah,the west would face heavy inflation-but we have Gold (they say).

FreePricing,once you open the pandora's box...

GoldiloxSHORT, MEDIUM, LONG TERM GOLD#1472889/8/06; 08:36:32

One very good thing about this article by Chris Laird, from "the Prudent Squirrel", is that he talks about the opposing scenarios and what might possibly drive each one. Ike Iossef is the other financial pundit I see regularly expounding on potentials for moves in both directions.

While they don't present me with a "this has to happen scenario", they remind me that "pure prediction" is usually too one-sided of an argument.

GoldiloxUSDX#1472899/8/06; 08:42:08

Meanwhile, back at "the ranch" . . . another gap up!
Cometose30 year bond .....#1472909/8/06; 09:12:26

Looking at the weekly , this does not look good from an RSI view or from the MACD perspective........

As loaded as the markets (indexes) are with interest rate sensitive (mortgage etal) paper........

and with the housing market info coming out like darkness running away from the light when it comes.......

This could bode poorly for the market indexes in the coming weeks .....

as a postscript it's interesting looking at the movements in the bondmarket alongside the Dow on the weekly...

It may be a case of the dog (bond market ) wagging the tail ( dow jones industrials, nasdaq, s&P).....

I think that the rest of the global investment community probably is taking note of this ........and that it (present circumstances) suck ...............the air out of the BUBBLE........

Cometose30 year#1472919/8/06; 09:13:11

Cometose30year#1472929/8/06; 09:16:56$usb,uu[w,a]daclyyay[pb50!b200][vc60][iup5,3,3!la12,26,9]

FlatlinerWhere is the rally?#1472939/8/06; 10:09:47

It's interesting to note that SLV claims to hold a little more silver today - 102,327,450 ounces (listed on their website up from the 10,050,000 ounce area). Seeing that the price action was down about 4% yesterday and another 4% today, one would have to wonder if there is a rush into holding this physical underway. I can't help but wonder what the delivery rate is like at the typical bullion dealer. Any hints from anyone we know? I'm also wondering if there is a connection between end of the month deliveries and the rise in stocks of SLV. Hopefully, we'll all get to see over time.

Knallgold – would it be, using Another's logic, that if the 160 tonnes of gold is not sold into the markets that the paper market will not get support? But, if the banks that have withheld metal make an effort to distribute it, that we'll find support? In other words, if the Washington Agreement limits are not hit, with regards to gold metal transfers, those that trade things for gold & fiat on world markets will not recycle their fiat into the short side of the metal's market?

Where is physical gold moving too? If it is following SLV type behavior, the longs will have their day given just a little time.

Hum… watching seems like the best thing to do.

FlatlinerWhere are the follow up articles about Nickel?#1472949/8/06; 10:11:18

Seems there is a void of media coverage on this topic on the web. That is most unfortunate.
GoldiloxAfghan attack worst since Taliban's fall#1472959/8/06; 10:43:25


KABUL, Afghanistan - A suicide car bomber struck a convoy of U.S. military vehicles Friday in downtown Kabul, killing at least 16 people, including two American soldiers, and wounding 29 others. It was the Afghan capital's deadliest suicide attack since the Taliban's 2001 ouster.

The blast near the U.S. Embassy came as NATO chiefs appealed for member nations to send reinforcements to combat resurgent Taliban militants fanning the deadliest violence in five years. A top British general said the fighting in volatile southern Afghanistan was now more ferocious than in Iraq.

The bomb blew pieces of an American Humvee and U.S. uniforms into trees, which were set ablaze by the explosion. The blast shattered windows throughout downtown, and a cloud of brown smoke climbed hundreds of feet into the sky.


It looks like the Western "security forces" are losing control over their recently regained Afghan heroin operations. NATO is not happy with this development, so we'll probably see more "security" dispatched to oversee the "black pharma" operations. Of course, more body bags also means increased importation vehicles for their dope.

Maybe the strongest driver for PoG is the complete breakdown of what is considered "security", not "security" itself.

AlexFlatliner - Nickel Prices - Default ??? - It's The Speculators#1472969/8/06; 11:48:17

Almost rather a void than the likes of the standard articles blaming "speculators"! Meanwhile, the article ends with an admission of a rather large short position that has been moved to forward months !!! Noooo! No Way !???
Geez... Go Figure. Duh!????? Imagine That ! - Speculators Again. LOL No mention of the benefits to unlimited fiat. Well, maybe we should sell 500 million tons of something we don't own ???

LME nickel highs driven by speculators – Eramet

Have agreat day.


Max RabbitzGold Wars and Black Pharma#1472979/8/06; 12:07:21

I'm don't see why the International Bankers (Fiat International) would want to control the poppy fields if they control the trade and some have alleged. I doubt they would want to have such a close association. Why is it that some can only see evil coming from within? Surely the world is a bit more complex. If Nazi's marked to market their gold would they then be the good guys? Even if the dollar system is corrupt and immoral it is the stupid Americans who will ultimately pay the highest price when that huge overhang of reserve dollars enters the market. I hope the gold wealth I have accumulated will help those I can. But we need to recognize another form of fascism in the coming global storm before we and our gold are washed so many once were from the days of Byzantium on. This constant war of attrition and terror will not end with the economic collapse so many here seem to look for, but only with submission.
FlatlinerIt's the speculators...#1472999/8/06; 12:22:48

Alex, You have an interesting insight with regards to those dang speculators. I guess that if the big picture were to hold ALL commodity prices down in order to maintain a Strong Dollar policy where you are empowered by the ability to take unlimited losses it would suggest that the speculators, that one talks about here, are those on the short side of things. In other words, let's not force physical delivery, but rather apply a stiff penalty to the shorts that is currency based. Thus, the shorts can continue to sell into the market without worrying about having to make an actual delivery. I would take it that this is a clear sign that the LME is no longer a physical delivery market. At the same time, metal continues to flow through that exchange. This is VERY interesting. How do miners tolerate this?

Hum… At one point (in my short history on this site) I remember someone saying that the LME was a physical delivery exchange where as the COMEX was not. It would seem to me that the LME is starting to morph into a COMEX type of exchange. That is, you can get your metal – maybe – but it is not guaranteed AND the exchange actually discourages it from happening.

As long as some player (or collection of players) can take unlimited paper loses in the futures markets and that the futures markets determine ‘standard’ market prices for precious metals the price of these precious metals will be controlled by those speculators. The simple example is if you can sell a million contracts into a non-delivery market you can settle with cash at any time OR roll the contracts. Also, if no one is willing to buy your contracts, you can partner with yourself to keep the volume up making it all look legitimate.

With Nickel, it seems that we need to really watch the Stainless prices where nickel is actually used. Ultimately, one has to wonder if there is a huge hidden stockpile of Nickel that can be used to feed the physical market to keep the real costs of things like Stainless down? We all know that there are very tight links in the gold industry and that there are some very large stockpiles, I wonder if the same has happened with Nickel?

Interesting form of deception - IMO.

melda laureJust what I need for the bunker, a pile of 30 year bonds- NOT.#1473009/8/06; 12:31:13


Yes, we need a different model entirely. It seems no one is thinking up at the state department anymore (or perhaps they've all been locked up in the basement.

And now comes Prof. Bernard Lewis, one of the world's foremost authorities on the Middle East, who rejects this thesis' validity for the region. What was true during the Cold War does not apply to Iran, says Lewis.

Well the article is by an israeli who disagrees saying "Let Them Have Nukes". And I have noted, the US was willing to lose many cities if it were necessary to prevail against communism. It hardly seems reasonable to think that we have suddenly become squeamish now that we have "new enemies". The real question (which Mr Tlaga asked some years ago) is will the gold question be solved by gentlemen, or by truck bombs? It seems we have upped the ante considerably from truck bombs. I still have hope that the currency transition can be handled without a second helping of the dark ages.

Well it's not a world run by hobbittses.

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mikalTucked away in the Austrian Alps, for all to see!#1473029/8/06; 13:21:12

John Dizard: Vindication of Austrian Economists and Their Theories By John Dizard
Published: September 4 2006 21:04 | Last updated: September 4 2006 21:04
"Now that most people are back from their summer break, it is time to set the investment theme, or themes, for the autumn.
There is the spectre of an American war with Iran but that won't happen for a while.
The investment theme of the autumn will instead be the vindication of the Austrian economists and their theories about the nature of the business cycle."
Mikal - This on is so full of quotables on the flaws of Greenspan, Bernanke and the sytem they serve, that it deserves a full reading and rereading. More on the more visible depravities currently being regurgitated:
"What they have been telling the so-far uninterested public is that the Federal Reserve has been keeping interest rates below the "natural rate", or what an unconstrained set
of lenders would be able to charge borrowers, given what the borrowers could earn on the new capital.
The Fed, with the encouragement and support of the political class, kept rates low so as continually to postpone financial busts over the past decade and a half.
This has led to over-investment, from the technology bubble to the housing bubble, with one bubble obligingly taking over from the previous bubble. Now there are no bubbles left to blow.
The term the "Austrians" use for this sort of policy mistake is "intertemporal misallocation". That means that the only way growth has been maintained as high as it has as long as it has is by borrowing it from the future, so to speak. Well, the future is now."
Well this traitor to the establishment has to redeem himself somehow. So read on and note that although gold is all but deified herewith, alas, it's coronation is proclaimed to be many months afar! Well done Sir Dizard!

"ernard Connolly, the global strategist for Banque AIG, has been making the case that we face intertemporal misallocation for years but, unlike other Austrians, he takes no pleasure in the prospect of being proved right. He says: "The time has come – too late – for the Fed to recognise that intertemporal misallocation has been at the root
of all US economic problems. The difficult question is whether acting
on that recognition would in fact be better late than never."

What central bankers do, apart from fly around to a lot of meetings, is raise or lower interest rates. The Fed now faces the growing recognition that official interest rates are both too high and too low. Rates are too high to maintain a trend rate of growth and to avoid the effect on the larger economy of a housing bust. They are too low to ensure price stability.
This is reflected in the minutes of the last Fed meeting, as well as in the range of financial analyses I get from market people.
People such as Bridgewater Associates and Morgan Stanley correctly point out that growth is continuing, shortages and order delays are increasing, and inflation remains a problem.
The interest rate futures market participants, consumer economists such as Susan Sterne, and others say, also correctly, that policy rates have to be cut, and soon.
Mr Bernanke is famously a student of the Great Depression, and an advocate of rapid intervention in such circumstances to throw cheap loans
at people so they will do something, anything. The problem is that as short-term cycles pass, the cheap money has to get cheaper and cheaper as the over-investment piles up.
The Austrian analysis is probably the best one on hand to analyse the present bind of investors and central bankers. It does not, however, give you a cookbook approach to making lots of money fast with no risk, the noble goal of this column. For example, while Austrians are natural goldbugs, I think the price of gold will be lower over the next nine months than it is now.
If you do believe – or come to believe – in intertemporal misallocation, you will decide that continued tactical flexibility is important to making or preserving your money. As long as policymakers are torn between conflicting imperatives, you should anticipate their next, politically driven, move.
Right now, Mr Connolly of Banque AIG thinks that means buying US Tips inflation-indexed bonds, since long-term real rates will have to come down again, over time. Both of us are also bullish on the longer term prospects for gold."

Mikal - Hey, here's a guy that's bolder than the rest of them that pine for breathing room upon seeing the approaching wall. Well, not as bold as some of the banks, who predict even further delays in the bull market, if not castration. Bloomberg and Reuters too have been bolder and bolder in recent weeks and days -their latest excuses for gold behavior have become so tabloidesque, that I would swear Jessica Simpson will be mentioned any day now...

mikalDec futures pare early week gains#1473039/8/06; 14:46:44

Comex Gold Drops 1.2% to Finish at 10 Week Low | Yahoo Asia - Reuters | Saturday, September 8, 2006 | Excerpts:
"At the COMEX division of the New York Mercantile Exchange, December delivery gold ended off $7.60 at $617.30 an ounce, after dealing between $626.70 to $613.50. It was benchmark December gold's lowest settlement since June 29."

Mikal - Gold Dec futures solid. Additionaly,
this "news" contains a litany of mostly predictable claims and assertions about the gold and currencies market action. We can at least be consoled that the J-word is not used here, and that I only excerpt a few of the "barbarisms" conveying the discomposed comportment behind the journalistic scenes. Sprinkled in the menu for balance is some gratuitous acknowledge of gold's market potential. Bon appetitt!:

"Central banks with an agreement to limit their annual gold sales still have somewhere around 150 tonnes of gold to dispose of before late September.
But gold may have over-reacted compared to the more measured falls in the euro and in oil prices since Tuesday, said some dealers, and current levels may indicate a buying opportunity rather than a signal for further distressed selling.
Gold frequently moves in the opposite direction to the dollar and is also seen as a hedge against inflation.
"Gold's at a decent value here and it should attempt to hold here," said George Nickas, a broker at FC Stone in New York. "I think that at this level you get a new layer of fresh speculation and people with deep pockets who have been out of the market are going to be very interested in the market."
Final estimated COMEX gold volume was 43,000 lots, well below Thursday's official total of 64,520 contracts. Open interest fell 1,287 lots to 321,092 contracts.
In the foreign exchange, the dollar rose to six-week highs as investors positioned for the risk that the Federal Reserve may have to raise interest rates to keep inflation at bay. The euro off 0.5 percent at $1.2670 at midafternoon.
Some trading sources said that looming large over the market was the fifth anniversary of the Sept. 11 attacks, on Monday, and additionally, the Group of Seven meeting in Singapore set for Sept. 16.
Investors would be looking at G7 talks to see if finance ministers keep up pressure on countries enjoying big trade surpluses, notably China, to allow more currency appreciation."

Sierra MadreVERY interesting article; 15:17:00

Most interesting discovery by Mr. Harrison, presented at George Ure's site today:

The S&P index very closely tracks the NAHB index (Nat. Assn. of Home Builders), with a 12 month lag.

In other words, the S&P index does what the NAHB index does, but twelve months later. Very close.

AND, if the correlation holds, which looks to me quite likely, the S&P will be about....600 by August 2007!

S&P today is ....1298. Wow! That's really something.

I think we should all keep an eye on the NAHB and S&P indexes. Looks like stormy weather ahead.


USAGOLD Daily Market ReportPage Update!#1473059/8/06; 16:06:07">
The Daily Gold Market Report has been updated.

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FRIDAY Market Excerpts

Gold returns to June pricing

September 8 (from Reuters) -- Gold futures in New York plunged 1.2 percent to end at a 10-week low Friday, swamped by a second day of heavy technical and currency-based selling, market sources said.

Other precious metals also came under fire as investors ditched long positions, mainly due to a rallying U.S. dollar, with palladium closing down nearly 6 percent, silver losing 3.2 percent and platinum 2.2 percent.

COMEX December gold ended off $7.60 at $617.30 -- benchmark December gold's lowest settlement since June 29.

"It's long liquidation because of the dollar's short-covering rally of the last few days, which has put people on the defensive," said George Nickas, a broker at FC Stone in New York.

Other factors, such as rumored central bank selling of gold and analyst talk that commodities prices could be set to return to more sustainable levels in the coming years, have weighed on gold this week too, said sources.

But gold may have over-reacted compared to the more measured falls in the euro and in oil prices since Tuesday, said some dealers, and current levels may indicate a buying opportunity rather than a signal for further distressed selling.

"Gold's at a decent value here and it should attempt to hold here," said Nickas.

"I think that at this level you get a new layer of fresh speculation and people with deep pockets who have been out of the market are going to be very interested in the market."

Some trading sources said that looming large over the market was the fifth anniversary of the Sept. 11 attacks, on Monday, and additionally, the Group of Seven meeting in Singapore set for Sept. 16.

Investors would be looking at G7 talks to see if finance ministers keep up pressure on countries enjoying big trade surpluses, notably China, to allow more currency appreciation.

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

Ten BearsWHEN ATLAS SHRUGGED #1473069/8/06; 16:15:22

by Antal E. Fekete A good read from the good professor

Whitewashing illegitimate derivatives using free market rhetoric will not legitimize them. To sing a song of praise of ‘financial innovations’ designed to justify and perpetuate official check-kiting is not fitting for a defender of the free market.

Simply put, the role of the derivatives market is to make phantom bonds available to buy, and phantom gold available to sell, for the benefit of speculators.

The dynamics of the growth of the derivatives market is hardly spontaneous. Here is the reason why.The government has the following desiderata:
(1) to have a floor below the bond price;
(2) to have a ceiling above the gold price.

Ten BearsHave you ever wondered just how bad things could get? #1473079/8/06; 16:53:10

What If? by Enrico Orlandini

Here's some food for thought: what if something similar happens in the United States? The idea that an electorate would sell out to the highest bidder is not particular to Peru.

a bankerWe return to balance#1473089/8/06; 17:31:20

Some of the most useful questions you can consider are these:

"Why didn't the U.S. Federal Reserve System hold Soviet debt obligations among its reserve assets throughout the Cold War?"

"Why does the U.S. Fed still shun post-Soviet national bonds as reserve assets, even in return for the U.S. debt-holding kindnesses shown by the post-Soviet banks?"

"Why does the Fed hold no Chinese debt as reserves, not even in return for the massive bond-holding kindnesses shown by the People's Bank?"

"HOW, WHY, and most importantly DOES the U.S. STILL curry this asymmetric favor as recipient of an everlasting gift throughout all the world?"

Turning up its own nose at outside debt for the most part, for decades the U.S. has held at least eight thousand tonnes of politicly-neutral yet wealth-positive reserves. Reserves of this sort in the central banking world are popularly known as gold.

Is it possible that the central banks of the world could gain enough of this rare wisdom to say, "Me too!"

Look around and you will see we have not only begun to do it with wide participation, but are doing it one better. In time you will gain a better understanding of the mark-to-market accounting principle. Only an amateur illusionist (or a very very bad bookkeeper) would represent a positive asset at non-performing values ($42.22/oz, fixed) as is being done by Uncle Sam. But with nothing left to lose, Uncle Sam will try to make an ugly show of it for all of those CBs (and their tentative politicians) who are very newly arrived to join the MTM team.

The pioneering ECB was made to endure the low gold price abuses from the day of its birth for two years until the final $250 low in April 2001. For the newest MTM teammates this latest price storm which began in mid-May will be quite nothing to that. A mere tempest in a teacup.

Keep your wits. Keep your gold. Your good fortune will one day recall these words to your head and you will laugh that you ever briefly entertained even a shadow of a doubt.

Golden LionheartDream on!#1473099/8/06; 18:12:26

You are all just dreaming if you think the Neocons are going to lose control. It would take a Revolution to do that.
Keep buying gold.

CamelGlobalization#1473109/8/06; 18:28:59

There seems to be a little schizophrenia among the market devotes in regard to" globalization ." On the one hand they decry the shift in manufacturing to cheaper labor while on the other they want to let the market take care of everything , like it was God.

I think it may have been Henry Ford who first verbalized the idea that for more people to buy his cars they needed jobs . Its all about market share ; the multi-nationals compete for new business from the gradually increasing standard of living of the" third world" They relocate their factories for cheaper labor , while creating jobs to buy their products..They must have growth . If they don't have continuous quarterly growth their stock gets punished.

In the process nations like China and India have become prosperous. Out of altruism form the multi-nationals? Probably not ... but as a side effect.

Those people are POOR!!! whole nations of Katrina like victims squatting around a dry water hole watching their cattle die. I'm sure it has dislocated a lot of people in this country....... though I don't really see it where I am. Everything is boomimg around here.

"Every valley shall be exalted, and every mountain and hill be made low, and the crooked shall be made straight and the rough places plain."

Druida banker (9/8/06; 17:31:20MT - msg#: 147308)#1473119/8/06; 22:34:10

"Look around and you will see we have not only begun to do it with wide participation, but are doing it one better. In time you will gain a better understanding of the mark-to-market accounting principle. Only an amateur illusionist (or a very very bad bookkeeper) would represent a positive asset at non-performing values ($42.22/oz, fixed) as is being done by Uncle Sam. But with nothing left to lose, Uncle Sam will try to make an ugly show of it for all of those CBs (and their tentative politicians) who are very newly arrived to join the MTM team."

Druid: I came this conclusion a few years ago (about three). I always asked myself, why would this present administration continue to ramp up expenditures in such a way that it would appear like they were trying to literally destroy our own currency? And then it hit me, we are holding quite a bit of bullion that we can MTM and in that day, the world will take the ball and run with it in the right direction.

GoldiloxUS Gold reserves#1473129/8/06; 23:19:57

While no one has actually audited US gold in many, many years, I still wonder what all the hullabaloo over Iraqi gold reserves was about.

Certainly the phony bars in the trucks paraded before the in-bed-with media did not contain the reserves that were earmarked for backing the planned Islamic Gold Dinar, but where did it actually end up?

The US Navy was floating in place and waiting for six months before the Indonesian tsunami, and was asked to leave immediately upon entering the devastation zone. Were the Indonesion authorities trying to protect their Islamic Gold Dinar reserves as their first priority?

Gotta wonder why Ft Knox is never audited.

Is it because TPTB do not want anyone to know how much has been sold and leased? Maybe they don't want anyone to know what they've acquired in their foreign adventures, either.

Pure speculation on my part, but not without some strong hints. What a nice revolving door for feeding the gold price suppression if no one is allowed to oversee the transaction window!

ArmageddonGold Cartel and the Plunge Protection Team at Work Overtime this Week#1473139/8/06; 23:29:26

Well, again I am not surprised at gold's behavior this week. It appears to me that gold's sudden dive this week all started with China's declaration that "WE DONT WANT ANY MORE AMERICAN DOLLARS AND WE ARE GOING TO SPEND THEM ON SUCH THINGS AS COMMODITIES AND GOLD!!!!!!". This declaration was also mentioned by Sir MK in a personal post to this forum this week. Of cource the IMF timed a press release to coincide with this Chinese declaration in order to help the gold surpression and to help confuse who or what was driving the gold price down.

Well I think we are seeing another preview of what will happen to gold when world events be they economic, military, health related, or TERRORISM act to spur an interest in gold as a hedge against disaster.

IF there is another major terror strike on America look for gold to go down significantly right afterwards. Remember Sept 11 is right around the corner.

NOTE: A group of investors has offered to purchase GG gold shares up to Sept 13. When the tender or offer was first made the offer was below the current price of GG stock. However, right now as of Friday's close the offer is above the market rate. It would seem these people anticipated GG's stock to go down around Sept 11 and again are anticipating it to go up after Sept 13 when the tender offer ends. Another possible sign of coming major problems?

ArmageddonThere is still gold in Fort Knox?#1473149/8/06; 23:41:20

Hmm.. I have heard that there is a trillion dollars missing from the Pentagon that cannot be accounted for so what makes you think there is still gold in Fort Knox?

Who knows, I may have more physical gold in my posession than Fort Knox? :)

The Invisible HandThe dollar-IFMS is kaput#1473159/9/06; 06:37:04

dollar-IFMS = dollar-International Financial and Monetary System


"Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision. Their goals differed, but they all had this in common: that the step was first, the road new, the vision unborrowed, and the response they received—hatred. The great creators—the thinkers, the artists, the scientists, the inventors—stood alone against the men of their time. Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won."
Ayn Rand

On Sunday September 26, 1999, 15 European Central Banks concluded the Washington Agreement on the sidelines of an IMF-World Bank meeting. By this Agreement, the politicians wanted to set limits to gold lending. This agreement recognised that gold will remain an important part of global monetary reserves and that the involved central banks will, apart from the sales which have already be decided, not sell gold in the next five years.
The ECB reserves [...] are still being, marked to market on a quarterly basis. The Agreement [... has been] renewed on stricter terms between more than the 15 original parties at the IMF-World Bank meeting in Dubai on September 23-24, 2003.

Some people have apparently managed to convince some central bankers of their unborrowed vision that gold needs in some way to given back its monetary use, by instituting Freegold and the marking to market of gold reserves,

The mark-to-market (MTM)-concept has brought an end to the upward limitations on the price of gold (POG). By the same token it also brought an end to the dollar-International Financial and Monetary System (dollar-IFMS).

President Bush's speeches clarify what he (the dollar-IFMS which he represents) wants to achieve with his "crusades". The dollar-globalisers want to stop all opposition to their IFMS through flagrant provocation. The dollar-regime and its petro-dollar fundament need this opposition in order to be able to justify the bloodbaths they are causing.

For the moment, the challenger (the dollar) obtains the desired results. No financial-monetary-economic catastrophes are occurring and the price of oil (POO) remains contained. There is a global equilibrium between the challenger and the opposition (the oil and gas cartel). Both are positioning themselves for the final battle which will be the fall or resurrection of Tehran.

China, Russia. the Middle East, India and some smaller members of the opposition are precisely those who learnt in Dubai on September 23-24, 2003 about the unborrowed vision of increasing and MTM-ing gold-reserves.

If Bush conquers Tehran, then the dollar-IFMS with be able to continue counting on its petro-dollar fundament, but the opposition could decide to deny henceforward its reserve status to the dollar and to switch to gold.
NEW YORK - Benjamin Netanyahu, as part of an American tour repositioning himself for a return to the Israeli premiership, told an audience in New York yesterday that President Bush is preparing to ditch the United Nations to take on Iran alone and that American politicians of all parties would do well to stop squabbling about Iraq and join the president in focusing on threat from Tehran

This is the most difficult phase of the War on Terror (WOT), the surpressing of the US opposition. It is no accident that a movie is being made about a Bush-murder.

The cold and warm wars about oil and gas are thereby in full swing. But if China and Russia manage to cooperate (within Shanghai Cooperation Organization (SCO)) and do not explicitly follow the path of socialism, the US of A will lose its welfare trump.

That's why Rubin invented to strong-dollar-doctrine. This led to delocalisation. At some moment, the doctrine will have to be reversed and the dollar will have to be devalue. The colonisation of trade-relations by the US of A will thereby come to an end and China and Russia will make their respective currencies convertible.

By their strong dollar carry trade, the Japanese are loyal to the strong dollar and the accompanying dollar-imposed export enslavement. The Japanese yen is therefore weak and at the same moment, the US of A wants the Chinese to revalue their yuan/remnimbi. This is the contradiction of the dollar-dominance of the dollar-IFMS.

Sinclair, GATA and others do not understand that they are teaching the wrong gold-future theory.

Yes, the dollar-fiat-digit machine can control and contain the POG forever PROVIDED that the dollar regime and its power structures continue in existence.


Freegold is the most radical antithesis which the innovators of unborrowed vision have devised to the TOTAL dollar-regime and thus not only to the dollar-currency which is only one aspect of the globalising regime.

De dollaristas (including Mundell
The Invisible Hand (9/7/06; 20:47:29MT - msg#: 147279)
Mundell doesn't understand the new gold market
continue to think in terms of the old gold-dollar-standard. The shorting of dollar-gold cannot be cornered as long as the valueless dollar-currency will continue to be used by the dollar-regime.

The gradual and orderly POG increase is a result of the dollar regime beginning to admit that it cannot possibly withstand the Freegold pressure forever.

As long as gold market observers do not want to realise this, they are misinforming their audience.

Why does Nato need more troops in Afghanistan? Is that also Iran-related?
(Nato's leaders have urged member countries to provide reinforcements to help in its campaign against Taleban guerrillas in southern Afghanistan

This spectator cannot but conclude that the dollar-IFMS is kaput thanks to those people of unborrowed vision who managed to convince some central bankers of Freegold through the MTM-ing of gold-reserves.

GoldiloxGold vs. dollars#1473169/9/06; 06:47:46

@ Armageddon,

Assuming TPTB are a lot smarter than their public persona, losing $ is much less traumatic than "losing" gold. The former can easily be replaced by Heli-Ben and Co. The burden is borne by the $ itself, while the "gain" is realized by the "off-budget" slush funds that are so useful to the political and economic "hit men".

Thus no "official" concern about the $Trillion that Catherine Austin Fitts found "missing" at HUD, except to blackball her for publiicizing the information.

Again, pure speculation by a believer in many of the NWO theories.

While some might complain that my "speculations" are too radical, I think "what if" is a useful exercise to establish potential connections between "behind the curtain" moves.

GoldiloxBorrowed and unborrowed visions#1473179/9/06; 07:07:45

@ TIH,

The Pharisees of "today" will always mock their counterparts of "yesterday" that time has exposed as fools and frauds, while continuing their "protect the status quo at all costs"" tactics.

The most prominent feature of systems of inequality is self-protective paranoia from any "clear and present" dangers, even if said dangers might provide a path to greater solutions.

The Jesuses, Mohameds, Ghandis, Gutenbergs, Gallileos, Teslas, Reichs, Fitts', McCanneys, Hutchinsons, Rifes, Mahathirs, Zappas, and Naders of the world must all be publicly denigrated and have their message competely obliterated by time to protect the special interests.

"Out of box" thinking is never tolerated beyond cheap commercial messaging.

Boilermakera banker msg#: 147308#1473189/9/06; 08:49:45

Thanks for your focus on important Fed Reserves questions. However, when I search for information regarding the foreign currency holdings of the Fed by nationality I can not find any. I only see their most recent total, about $40 billion, at this site

Perhaps you could offer your own thoughts on the questions you posed.

In any case the foreign currency holdings of the Fed are trivial in relation to the current account imbalance of the US. If we paid for net imports out of this account it would be gone in three weeks.
The US gold reserve, booked at $42.22/oz, is shown as an asset worth $11 billion. If this reserve were MTM it would be about $160 billion. Even at the MTM value US gold (if it indeed exists in the form (bars) and in the amount 8000+ tonnes that are claimed) is trivial compared to the $ held by foreign CB's, institutions and individuals.

The USTreasury site linked above has some revealing information about foreign holdings of US bills, notes and bonds. Here are some observations of these data:
- Japan, holding about 30% of the total, has actually reduced their holdings by $32 billion over the past year.
- China has increased their holdings by $30 billion over the past year despite talk of diversification.
- The UK has consumed a huge amount of US paper, increasing holdings from $58.8 to $201.4 billion the past year.
- Canada and Mexico have both increased their US paper holdings very significantly, $22.8 and $17 billion respectively.
- Oil exporters have increased their holdings $33 billion or nearly 50% the past year reflecting high oil prices and revenues.
- Notable by its absence from the list is Russia.
- Carib. Bnkng. Ctrs have decreased their holdings modestly after huge growth in 2005.

The UK is eating US paper at a prodigious rate. I wonder if they will get indigestion. Perhaps some gold is being passed under the table to facilitate their appetite for paper?

I would like to hear other thoughts about these data.

Cometosetaking care of business means taking care of people in a planned economy : the planners are planning 100 years ahead#1473199/9/06; 09:10:23

hurricane season is light so far this year ........

CometoseChina and the CRB#1473209/9/06; 09:11:41

GoldiloxUS Paper holdings#1473219/9/06; 09:25:05

@ Boilermaker,

- Japan, holding about 30% of the total, has actually reduced their holdings by $32 billion over the past year.
- China has increased their holdings by $30 billion over the past year despite talk of diversification.
- The UK has consumed a huge amount of US paper, increasing holdings from $58.8 to $201.4 billion the past year.
- Canada and Mexico have both increased their US paper holdings very significantly, $22.8 and $17 billion respectively.
- Oil exporters have increased their holdings $33 billion or nearly 50% the past year reflecting high oil prices and revenues.
- Notable by its absence from the list is Russia.
- Carib. Bnkng. Ctrs have decreased their holdings modestly after huge growth in 2005

I always find this table interesting.

One wonders if Japan is getting "tapped out"?

While China has increased US paper by $30B, does that reflect a percentage increase, as well? i.e. how much has their total reserves increased in the same period?

UK major increase is indeed noteworthy - I wonder how and why?

Russian absence certainly suggests "independence".

Carib. Banks are possibly too busy with PPT duties to earmark more funds to the bond market.

I also wonder why Israel, with all their "aid money" is not on this list significantly, i.e. $10B for NOT participating in Iraq II.

Just my thoughts.

Goldiloxhurricane season is light so far this year ........#1473229/9/06; 09:34:47

@ Comatose,

So light, in fact, that NOAA has taken to "naming" 35-40 MPH light gales in order to increase their storm numbers, since their "prediction" is so far off.

Methinks they have egg on their faces, as the warm oceans they purport to create 'caines are not following their model at all. Oops!

Might the currently quiet solar cycle be a greater storm driver than they care to admit?

MoegoldUS Paper Holdings#1473239/9/06; 12:05:20

@ boilermaker msg#147318
The "grand total" row shows generally increasing holdings of US paper, but interestingly the row below labelled "for. official" shows that since Feb 2006 foreign official holdings have been declining. Note also that the UK numbers, the source of the biggest increases in paper, include the Channel Islands and Isle on Man. Is some hedge fund front monitizing the debt? Does this make sense to anyone?

mikal@Moegold#1473249/9/06; 13:23:46

Yes. Makes sense some front companies monetize the debt at these offshore havens. Like money laundering, recycled payoffs, etc.
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Boilermaker@Moegold, G'Lox#1473269/9/06; 16:00:16

Thanks for the response. I agree that Isle of Man and The Channel Islands could be home to a lot of US paper holders. They may have picked up the paper ball handed off by Carib. players.
Picture a pasture with a herd of Guernseys quietly devouring US Treasury notes that grow in abundance throughout the field. This fodder passes through the four stomachs possessed by ruminants for digestion and comes out the backend as a foul remnant of its original form. Perhaps a metaphor for the future of the $.

Economy of the Isle of Man
From Wikipedia, the free encyclopedia
Offshore banking, manufacturing, and tourism are key sectors of the economy of the Isle of Man. The government's policy of offering incentives to high-technology companies and financial institutions to locate on the island has paid off in expanding employment opportunities in high-income industries. As a result, agriculture and fishing, once the mainstays of the economy, have declined in their shares of GDP. Banking and other services now contribute the great bulk of GDP. Trade is mostly with the United Kingdom. The Isle of Man has access to European Union markets.

The Channel Islands Economy
Tourism is the major industry in the smaller islands (with some agriculture). Jersey and Guernsey have, since the 1960s, relied on financial services. Guernsey's horticultural and glasshouse activities have been more significant than in Jersey, and Guernsey has maintained light industry as a higher proportion of its economy than Jersey. Jersey's economy since the 1980s has been substantially more reliant on finance.
Both Bailiwicks issue their own banknotes and coins, which circulate freely in all the islands alongside UK coinage and Bank of England and Scottish banknotes.

The Invisible HandBorrowed and unborrowed visions#1473279/9/06; 17:33:55

Goldilox says:
The Jesuses, Mohameds, Ghandis, Gutenbergs, Gallileos, Teslas, Reichs, Fitts', McCanneys, Hutchinsons, Rifes, Mahathirs, Zappas, and Naders of the world must all be publicly denigrated and have their message competely obliterated by time to protect the special interests.

Neweuropeans says:

"When the grand-sons of Pétain, Hitler, Mussolini, Franco and Stalin will take over the EU". This new scenario is entitled : "USA 2010 – When the Washington Wall falls".
The "Washington Wall" is the Dollar, and the fall of the "Washington Wall" will consist of a serious loss of confidence in the Dollar

The Invisible Handdollar solar system vs. prosperity of the planet#1473289/9/06; 19:27:02
HANOI (Reuters) - U.S. Treasury Secretary HENRY PAULSON said on Friday he supported a STRONG DOLLAR and believed the value of the U.S. currency should be set in open markets.,,1868625,00.html
Heather Stewart, economics correspondent
Sunday September 10, 2006
The Observer
Ed Balls, the Economic Secretary to the Treasury, urged Brussels yesterday to promise substantial cuts to the EU's £30bn farm subsidy regime in order to kick-start stalled global trade talks.
Federal Reserve chairman Ben Bernanke and former World Bank chief economist Joe Stiglitz have both argued in recent weeks that GLOBALISATION is under threat from protectionist forces.
CAP {, Common Agricultural Policy,}. reform is an explosive issue within the EU, with liberalising countries such as Britain and Germany pushing for cuts in farm spending, which accounts for more than 40 per cent of Brussels' budget, while France leads anti-reform countries which have sought to reduce Mandelson's room for manoeuvre.
Balls's controversial intervention came as the Chancellor prepares to travel to Singapore for NEXT WEEKEND'S ANNUAL MEETINGS OF THE WORLD BANK AND INTERNATIONAL MONETARY FUND.
As chair of the IMF's major decision-making committee, he has invited WTO director-general Pascal Lamy to attend a meeting, in the hope of pushing the issue of global trade up the agenda. Finance and development ministers will also discuss a package of radical IMF reforms.
Likewise, European Central Bank President Jean-Claude Trichet said that the EU's approach was "complimentary" and "certainly not contradictory".
"We continue to hope that it would be possible to have the multilateral negotiations take place again at the level of Europe and the world," he said.
"That would be considered by all central bankers as something of extreme importance," Trichet added.



This imposition cannot occur without the doctrine of military power and financial-monetary supremacy.

Dollar-globalisation does not want to / cannot serve the economic prosperity of this planet because it wants virtual wealth to be consolidated in its dollar as THE reserve currency.

Whereas all non-dollar states want to have their currency unit managed as an instrument of economic prosperity, the US of A dollar wants the continued association of wealth with its dollar regime.

The dollar doctrine rests on the fiction of the dollar-gold-standard, whereas non-dollar states have prepared their wealth for Freegold and for the managing of their currency unit as an instrument of economic prosperity.

All economic theories have been written to please the principals who pay the writers for putting the principals’ self-interest above the global interest. This is no different, in the modern globalising world, for the dollar-regime (dollarisation).

Paulson is confirming this in Vietnam. By the same token, Paulson is confirming that other trade blocks have comply with the dollar-solar-system. What a hubris!

Contrast this to the humility of the Freegold practitioners who are defining their currency units not like the old dollar-gold-standard as a certain quantity of gold, but who are using gold as a free trading financial reserve so that each increase in the price of gold brings about an increase in the value of their currency reserves and thus an increase in the value of their currency itself. This currency concept is closer to the tenets of the philosophy of TRUTH and FREEDOM than a gold standard because of the exchange restrictions which inevitably follow from the gold standard.

The Invisible HandNext week-end IMF in Singapore#1473299/9/06; 19:39:54

The European Union and China have agreed to launch talks on a new treaty to cover their growing political and economic ties.
The announcement came at a summit in Finland, which currently holds the EU presidency. They also made statements on North Korea and Iran.
China and the EU are doing more business together than ever before.
HELSINKI, Finland -- President Gloria Macapagal-Arroyo [of the Philippines] arrived here Saturday to attend Finland's largest gathering of world leaders and further deepen the 50-year-old bilateral ties with the home country of cellphone maker Nokia as well as forge a historic trade partnership agreement with Japan.
Chinese Premier Wen Jiabao left here Saturday morning for a four-nation tour to Finland, the United Kingdom, Germany and Tajikistan.
He is paying the visit at the invitation of Finnish Prime Minister Matti Vanhanen, British Prime Minister Tony Blair, German Chancellor Angela Merkel and Tajikistan Prime Minister Akil Akilov.
Wen will also attend the 9th China-EU Summit and the 6th Asia-Europe Meeting (ASEM) to be held in Helsinki, capital of Finland, and the 5th Meeting of Prime Ministers of the Member States of the Shanghai Cooperation Organization (SCO) to be held in Tajikistan's capital of Dushanbe


Da world, it is changing!

Ten BearsLABOR DAY? HOW ABOUT GREED DAY?#1473309/9/06; 21:20:14

O T, a bit late, but the best Labor day commentary this year: from Richard Reeves
mikal"President's Worklng Group on Financial Markets" back in news#1473319/9/06; 21:30:55 Paulson Sizes up Wall Street Disaster Defences | Financial Times - | David Wighton and Paul Taylor in New York | Sept 9, 2006
Short story covers: Paulson, "The Working Group", integrity of markets, utilities and telecommunications, threats such as influenza.

osa104cWHAT DAY???#1473329/9/06; 22:12:20


Your post provokes interesting thought(s).........GREED DAY???, how about

AVARICE DAY ..............the day of inordinate love for riches. Its special malice, broadly speaking, lies in that it makes the getting and keeping of money, possessions, and the like, a purpose in itself to live for. It does not see that these things are valuable only as instruments for the conduct of a rational and harmonious life, due regard being paid of course to the special social condition in which one is placed. It is called a capital vice because it has as its object that for the gaining or holding of which many other sins are committed. It is more to be dreaded in that it often cloaks itself as a virtue (DEMOCRACY), or insinuates itself under the pretext of making a decent provision for the future. In so far as avarice is an incentive to injustice in acquiring and retaining of wealth, it is frequently a grievous sin.

GET sum GOLD to spend in the is fleeting...........AMF

Flatliner@a banker#1473339/9/06; 22:39:07

Some of the most useful questions... Can you add some more insight into the "A mere tempest in a teacup" statement? Also, is this a first post? Most intriguing, please share.
The Invisible HandIMF's De Rato calls for higher ECB interest rates#1473349/9/06; 22:47:10,1518,436149,00.html

Rato zufolge sollte die Zeit niedriger Zinsen angesichts der guten Weltkonjunktur zu Ende gehen. "Die Notenbanken weltweit tun gut daran, das gute Umfeld für Zinserhöhungen zu nutzen." Das schaffe den erforderlichen Spielraum, um später schlechten Zeiten überhaupt entgegenwirken zu können. "Soweit sich die wirtschaftliche Erholung fortsetzt, muss die EZB von einer eher lockeren Zinspolitik zu einer neutralen kommen, und dies bedeutet Zinserhöhungen." Angesichts der Arbeitskosten und der niedrigen Inflation könne die Zentralbank dabei aber behutsam vorgehen.
Der IWF ist eine Sonderorganisation der Vereinten Nationen und gilt als Feuerwehr bei Wirtschafts- und Währungskrisen. Am kommenden Wochenende trifft sich die Organisation zu ihrer Jahrestagung in Singapur.

The Invisible HandDe Rato in Canadian#1473359/9/06; 23:39:35

SPRUCE MEADOWS, ALTA. -- The Bank of Canada may have to raise interest rates further -- but modestly -- because of strong domestic growth and inflationary pressures from higher fuel prices, says the head of the International Monetary Fund.
Mr. de Rato said he believes that the global economy is growing strongly and will continue to do so into 2007, but that economic risks have increased since April.
We'll see what "they" will "do" next week-end in Singapore.

The Invisible HandThe ultimate decadence of the dollar regime#1473369/10/06; 00:31:17


NEW YORK (Reuters) - Former NYSE Chairman RICHARD GRASSO said on Thursday he wants to run a company after the upcoming trial over his controversial $187.5 million pay package ends.


This monster was during 8 years the big boss of NYSE and then gets a golden handshake of $187.5 million!

The monster is demanding this fortune in order to keep quiet about the NYSE practices (Plunge Protection Team - PPT) of course.

Spitzer is now regularly on CNBC talking about Liu's theories.

This happens in order to justify the excessive appetite of the practitioners of the financial industry for public opinion. In the meantime, those practitioners continue to plunder.

Grasso admits that he wants to run a real company instead of a virtual wealth machine (the stock-exchange).

That's how this SHAMELESS MONSTER wants to quiet his conscience.

The story indicates very well what we are actually doing.

The system of FINANCIAL CAPITALISM is destroying the healthy sense of entrepreneurship. Hence, many businesses are rotten to the core and are artificially being kept alive through the phenomenon of financial industry. The system is a pure BUBBLE FACTORY. It is this mentality which is globally exporting the dollar-regime.

This is also happening in HOUSING where it has become a generally admitted (expected?) practice to MORTGAGE HOUSES IN ORDER TO DEVELOP SPECULATIVE INVESTMENTS. As a result of this, prices increase to such a level that no more buyers can be found. Monetary policy loses its grip on such a system. MONETARY POLICY CAN NO LONGER DIRECT THIS SYSTEM and is there by being forced to assist the system in inflating, in order to prevent the bubbles from exploding.

This is what the dollar-regime is continuously blaming the ECB for –


For gold, this all-comprehensive (financial) inflation is not allowed to occur.

It is of the utmost urgency/necessity for the dollar-regime to have the sheeple perceive the dollar as strong.
If a lunatic would now let the price of gold increase, she would unmask the enormous underlying inflation and thereby deny the dollar of the US of A the last pillar on which it still standing.
When that happens to the "system", it will be GAME OVER for the dollar-regime.

That's why our masters are postponing this as long as possible.

The Invisible HandGCC to introduce common currency on time in 2010#1473379/10/06; 00:58:43

Abu Dhabi: The common currency of the Gulf Cooperation Council is expected to be issued on schedule on January 1, 2010, according to a senior UAE government official.
"We have discussed a draft monetary agreement based on the draft agreement that was provided by the European Central Bank (ECB), which included the general guidelines."
He expected the new common currency to be pegged to a single currency, but he declined to speculate. He also said that pegging to a basket or current would not be efficient.


Anybody in doubt to which "single currency" the new common GCC currency will be pegged?

GoldiloxThe Tragedy of Busted Myths#1473389/10/06; 02:35:34


Mythology is powerful. Just a few thousand years ago, men would go to war over strange beliefs about gods and goddesses, or make decisions of state, or act upon the fate of cities and hamlets, or enter into big trade agreements, or embark on grand voyages, or agree to marriage, all after consulting the oracles. They were the gurus of their day, replaced today by economists from many corners. Budget advisors, brokerage analysts, government spokesmen, and academic charlatans are the modern soothsayers, hardly ever correct, always revered, never understood. It seems whenever things are about to go badly, we face more economic myths in the process of being shattered, and are soon subjected to new ones. In their failed wake, we install more controlling (corrupting) mechanisms like the Plunge Protection Team after crises like the 1987 Black Monday and the 2000 Tech Telecom bust.

Once again the motive in promoting silly myths is the same, or at least the nucleus motive is the same. Domestically, that is to deceive the hapless ignorant hopeful public to continue to trust the leadership out of Washington DC and New York City, to continue to remain invested in the Wall Street game, to continue to participate in the consumption game, to avoid a panic and head for exits before the losses mount. On the foreign front, the motive is to encourage other nations to continue to send their hard earned savings into the Great Black Hole that is the USEconomy, to continue to supply and satisfy its desperate credit needs, to continue to pay for the entry fee for selling in its vast marketplace. The unspoken motive is to enable the aristocrats to continue to churn their machinery, to ply their trade of exploiting the great paper game, to further the squeeze on the middle class. In fact, the middle class is the greatest loser from inflation's impact and heavy cost.

Inflation has its hidden costs. Writers, analysts, and pundits catch the easy victims, like savers who are robbed of the stored value from the drip drip drip of erosion. Like small-time participants who shun the opportunity to grow big. Rising wages, which at first seem like an advantage from a steadily inflating economic system, have turned on the masters of the inflationary machinery. Job outsourcing to Asia has ripped the manufacturing foundation of the USEconomy clean off its mooring and capstone, deprived it of legitimate wealth generation. Consequently, the participants of our mfg-less society have been deceived into believing that consumption within retail chains can stand in its place. It offers the benefit of cleaner air, less sweat, and more fun. What's not to like? Let's go shopping, the great medication for the depressed. Instead of factories belching out smoke, noxious fumes, and rendering its workers musclebound but with damaged bodies from chemical intake, we have clean tidy shopping malls, nifty prevalent consumer retail chains, really cool electronic stores, and nice smelling furniture marts. Complimenting the networks of consumer havens are our homes, the veritable piggy banks. Who needs to save anymore, so passé? We have mutual funds and trading accounts. So we have suffered a deadly transition from making products in an industrial setting, wherein added value is gained from human labor with the aid of sophisticated machines. We now stand with one foot in the financial credit spin cycle replete with mortgages and car loans and vendor financed sales, not to mention the world of stocks and bonds, and the other foot in the service collage known to keep our devices and grounds in working order and looking spiffy.

Is this progress? No way! It is a tragedy in the making, fully denied. We crossed the Rubicon ten years ago, maybe as long ago as the 1971 date. At that time, we both abrogated the Bretton Woods gold standard for the USDollar, and embraced the USGovt social & military contract. The dual pact often called "Guns & Butter" committed to provide a vast social safety net (despite claims we are not socialist) and to wage war wherever we can. The Medicare plan is the latest socialist plan passed under the current Administration is certain to worsen the national bankruptcy condition, fully fingered by the St Louis Fed this summer. So since 2001 we have a grand scheme identified by Nationalism & Socialism, the former brandished proudly, the latter quietly engrained more deeply, all against a backdrop of growing fear, withering civil liberties, and wider war. My concept is that military actions represent the ultimate in fixed business investment, although with as much cleared paths for trade benefits on the positive side as global backlash on the destructive side. Whereas the multiplier effect reaps benefits in six to seven steps from trickle down in commerce, military and defense spending reaps benefits mainly to the contractors in an abrupt one to two steps as some degree of destruction results. On rare occasion, military contract engineering has civilian benefits, however far more being evident in NASA space research.

The most reckless and irresponsible phase change has been the overdue dependence within the USEconomy on the inflated equity of the entire housing sector. Indeed it sustains the system to a great degree. Americans have not saved actively since the mid-1990 decade, when Greenspan endorsed irrational exuberance by warning about it, but continuing to feed the destructive damaging condition. Several years later, Greenspan actively shocked the world by claiming that gains in home equity suddenly realized should be regarded as legitimate wealth. This is unprecedented in the modern era for a central banker. Worse still, in 2005 Greenspan added insult to injury by stating that "People who took on too much debt were desirous of financial harm." He urged the housing bubble stampede, then stepped out of its path on political fallout. The central question should be "Will the Greenspan legacy be directly linked to the upcoming crisis in housing and the USEconomy, which is of his own making?" Given the utterly imbecilic naïve confounded lack of comprehension of economic matters, blame is likely to go to the current USFed Chairman Bernanke by the present public and current leaders alike.

The entire nation has been dumbed down on all matters economic, at least on the macro level. The crisis will happen on Ben's watch. It is not preventable. Its pathogenesis was designed and laid out carelessly but meticulously by Mr Greenspan. He split town to leave Bernanke with the headache, and likely blame. Without a doubt, Ben was selected to become the bagholder. Poor Ben has less charisma than Alan, perhaps equal ability to explain and confuse, but he tragically has no more available bubbles to engineer like Alan did. Housing is the last bubble. Well, to be more clear, the commodity bull is the final bubble, but it is of a cost nature.

GoldiloxBACKGROUND OF JOBS FRAUD#1473399/10/06; 02:38:03


Some background, a little history, and a scorecard puts the aggregate fraud into perspective. Valuable details help to establish, in legal parlance, a prima facie (first face) for fraud. Back in year 2000, the Bureau of Labor Statistics decided to enhance their primitive "bias factor" which bridged the gap between its employment surveys and the IRS tax data. What was once a simple fixed addition each month has become an elaborate model, one certain to rival the slick devices utilized in the other doctored statistics. The jobs estimate and its parent model have come of age. The Birth-Death (B-D) model was up to the job of creating an ever increasing number of jobs, in itemized categories no less, to aid the political charlatans seeking approval and re-election. It joined the other equally massive statistical lies which clutter the financial journals.

As new businesses are formed and new jobs arise, they are nearly impossible to properly track when business deaths occurs simultaneously. After the fact, the BLS learns the details of job creation which lag in time, slow to become known. As they occur, the BLS learns of details of job deaths. So they created a statistical model in order to estimate new job counts. They offer little information in defense, and do not even bother to include the B-D additions in the official statement, making no reference to it. Each month my monitor takes a gander at the latest fiction. See the official CES Net Birth-Death Model thumbnail description and data, being sure to scroll down to the current year. It seems they choose to claim plausible deniability in fraud by providing the information, but sending it to disjointed destinations without links. Their bread crumbs are thus scattered.

The actual method is a very sophisticated time series technique, one called an autoregressive integrated moving average model, this one of eleventh order, or ARIMA(11). It takes the ratio of job births to job deaths each month, then treats those differences sequentially, then estimates future ratio differences based upon a long weighted combination of eleven previous ratio differences. Nearby months matter more than distant past months. With known job deaths come estimates of job births in the most recent months, after working out differences. It sounds pretty cool, but is overly complicated and indefensible. Please demonstrate the model efficacy by F-stats on the ratio difference model, and why not simply the ratio model utilized. However, the basis of the model is built from the dynamics of yesteryears. So many changes have come to the global economy since 1999 that defy quantification, let alone continued trends to permit assumptions to be deemed valid. Please demonstrate the validity in past historical years in backcasting (past forecasts versus actuals), which pass through the 1999 to 2002 time frame where structural changes in global trade occurred. Outsourcing to China and India are so rampant that the entire system continuity cannot be taken for granted anymore. In 2007 it is very possible that a stall to outsourcing might again render the Birth-Death a further embarrassment.

The autoregressive models from my past experience make sense, in forecasting sunspots and tidal reaches in nature. This is due to the minimal influence of external forces, perhaps with the exception of Halley's Comet. These models are useful in other cyclical settings, but few applications in my judgment make sense in economic settings. Cycles within nature make sense, since the human organism cannot yet screw it up. Well just wait, as global warming and carbon dioxide levels might prove the exception. Economic cycles are so skewed, that rational devices to forecast them have been rendered nearly meaningless, even by most Nobel Prize Economists who sport their farcical models of 200 variables with little claimed accuracy whatsoever. We tend to be impressed by either elaborate nonsensical soliloquies from Greenspan, or elaborate nonsensical statistical models. A rule in statistical artistry prevails, that parsimony is preferable to complexity. That means being stingy in building only a few components for a statistical model is a wise practice. Pay attention, Samuelson and Friedman, since you violate this rule yet receive adulation without merit. There is no business cycle anymore, only the credit cycle, and even it has been turned on its ear with a credit explosion soon to challenge the Weimar period.

contrarianBuying 40,000 ounces of gold--a CIRCUS UNMASKED#1473409/10/06; 05:54:44

This is an excellent comment on the gold market. Just to keep things in perspective.

By querying bullion dealers for buying 640,000 ounces to hear that he could get it right away, no problem, and then placing an order for only 40,000 ounces to hear that next time two weeks notice will be required for any such order, Rob McEwen established that so called gold market is a tightly scripted show.

It's like theater performance where all the scenes and dialogues flow smoothly and naturally as long as they follow the playwright's scenario. But when one of the actors all of the sudden says and does something that is not in the script the whole circus collapses.

It's September 1999. Gold is in 250s and Dow in 11,000s.

And one evening Reverend Pat Robertson says on 700 Club TV program that what the markets are doing is beyond belief. He advises his one million audience to cash in and park the proceeds in sovereign debt.

Dow right away drops below 11,000, and obviously not all sellers put their money in Treasury securities, because gold went up from $255.40 on Monday, September 20, to $270.00 on Friday, September 24.

The number of new buy-orders for gold must have been increasing too fast, for the governors of all European central banks were brought to Washington on Saturday to sign on dotted line the authorization for dumping their gold (kept on deposit at Federal Reserve Bank of New York). The "Washington Agreement" was announced on Sunday by Wim Duisenberg, President of the European Central Bank, but it had no effect whatsoever on the gold spike.

In other words, governors of 15 central banks announced wholesae dumping of their gold, but the price was climbing even faster as if their announcement was never heard.

It wasn't until October 5, 1999, for the spike to get arrested at $325.50, and then it took sixteen months of seesaw struggles until February 2001 (!) for the price of gold to be beaten down into $250s.

It is easy for the fiat racketeers to terrorize big buyers (vulnerable to IRS methods) to accept paper for gold. But no viable method exists for threatening a multitude of Jacks and Jennies trying to buy their small share of gold to protect however little of their wealth they still have. The power is in numbers.

contrarianFascinating Minutes#1473419/10/06; 05:57:12


Meeting of the

Exchange Stabilization Fund

September 2, 2006

[Unauthorized, Unredacted and Apocryphal]


A meeting of the principals of the Exchange Stabilization Fund was held at Camp David, Maryland, on Saturday, September 2, 2006, at 11:00 a.m.





Mr. Bernanke, Federal Reserve
Mr. Gonzalez, Department of Justice

Mr. Hazmat, Goldman Sachs International
Mr. Shortz, Goldman Sachs London
Mr. Jetski, JP Morgan
Mr. Fu, HSBC
Mr. Apnea, Citibank

Staff and Aides, Working Group on Financial Markets

Ms. Miers, Secretary

THE PRESIDENT. I appreciate you all being here for this special meeting of the Gold Stomping Fund, or whatever you want to call it. I understand we got a lot to go over. I'm going to turn things over to Hanky Panky directly. We start talking about this financial stuff and I'm out like an odd man. But first, Dickie has something.

THE VICE PRESIDENT. Unauthorized disclosure of the existence or content of these proceedings will be deemed to be an act hostile to the vital interests of the United States. Violators will be tortured and shot.

SPEAKER. (?) Surely the Vice President is speaking figuratively. Such -- uh, extreme -- penalties for a simple leak would raise serious issues under the Constitution.

THE PRESIDENT. I got all the Constitution I need right here, son. It's called the Bible. Albertini?

MR. GONZALEZ. Sir. Under our reading of the relevant provisions of the Constitution and the enabling legislation promulgated thereunder, the President, in his capacity as Commander in Chief, has very broad powers in certain narrowly defined circumstances. Such powers include, without limitation, classifying certain individuals as enemies of the state, and administering such extrajudicial remedies as he may deem useful in his sole discretion, including, without limitation, corporal and capital punishment. Qualifying circumstances include, without limitation, preemptive war initiated by the CIC. Accordingly, it is our position that it is currently within the CIC's prerogative to cause those persons suspected of breaching applicable confidentiality stipulations to be tortured and shot.

THE PRESIDENT. Like he says. I'm the Decider. Well all right then. Hanky?

MR. PAULSON. Thank you, Mr. President, ladies and gentlemen. I'll get right to the point. As I expect you are all well aware, the financial condition of the United States is best described as catastrophic.

The St. Louis Fed has recently confirmed that we are staring at a fiscal gap of 66 trillion Dollars.

This assessment is based on our -- the Treasury's -- numbers. It is conservative.

You all know how we got here. Over a period of many years, many of us in positions of public and private power have betrayed our trust, looting the system and creating third world wealth disparities in the United States. We have abused our stewardship of the global reserve currency, and sequentially engineered the most dangerous and irresponsible series of credit expansions in history. The superficial effects of these credit expansions have, until now, masked the underlying rot. But a reckoning is upon us.

Today, the country is hemorrhaging from a ruinously expensive series of mismanaged foreign military commitments and runaway domestic entitlement programs. We have made trillions of Dollars worth of promises we cannot -- and will not -- keep. By all standard measures, by any rational calculation, we are in a state of national bankruptcy.

THE VICE PRESIDENT. Deficits don't matter.

THE PRESIDENT. To me, the question comes down to this: Is our seniors saving?

MR. PAULSON. The situation is dire. It is widely held in financial circles that we have no exit strategy. Indeed, I hold my present office at the insistence of certain important interests with a major exposure. They are increasingly alarmed at our drift. My charge is to oversee the development and implementation of a viable end game. Now, our only realistic policy option is painfully obvious: we must repudiate our debt through radical devaluation of the Dollar. But I am here to see that we do so in a way that will enable our favored creditors to salvage something from the process.

THE PRESIDENT. I met some radicals once. In college. Don't know what ever happened to them.

MR. PAULSON. The outlines of the strategy have now been drawn. It has four key phases.

Phase One extends from the date of my confirmation through the November elections. Our objective is to continue to preserve the apparent stability of critical financial indicators. To achieve this goal, we will continue, and intensify as warranted, our ongoing program of market intervention. On the one hand, we will support the Dollar, the domestic equity markets, and the fixed income markets. On the other, we will keep the prices of certain precious metals, notably gold and silver, in check. We will do this in collaboration with certain friendly central banks and finance ministries. Phase One will create a window within which our favored creditors may exchange a substantial portion of their Dollar holdings for alternative currencies and other assets, including precious metals, of their choice.

Phase Two will start immediately following the midterm elections and extend for an indeterminate period currently estimated at approximately six months. As a practical matter, the length of time will depend on political factors. Our objective will be to trigger a temporary, but wrenching, recession. To achieve this goal, the Fed will stop pushing down the far end of the yield curve, and allow interest rates on Dollar-denominated assets to rise well above the actual rate of inflation. Phase Two will create a window within which the Dollar will temporarily strengthen against other currencies and assets, and our favored creditors may exchange a substantial portion of their Dollar holdings for certain assets adversely affected by the rise in rates.

[Disturbance: Sound of extreme flatulence; groans; laughter.]

THE PRESIDENT. The smeller's the feller!

MR. PAULSON. Phase Three will commence as we approach what we deem to be the point of no return. We cannot allow the liquidation to gather such momentum that we risk a downward spiral beyond our power to reverse. Our objective will be to devalue the Dollar and effectively repudiate Dollar-denominated debts. We propose to achieve this by means of adopting what will be popularly perceived as a hyperinflationary monetary policy. We will work closely with the Fed to monetize virtually all assets. Phase Three will leave our less favored creditors with worthless claims, an outcome which is expected to have a commensurately negative effect on their own financial systems and productive economies. Our friends will already have taken advantage of Phases One and Two.

Phase Four is frankly a work in progress. It will commence when we conclude that we have reduced our debt to manageable proportions, and extend indefinitely into the future. Our objective will be to restore confidence in a stable currency unit. We propose to achieve this by introducing a new currency with a nominal -- but not an actual, to the extent we can avoid it -- relationship to precious metals. This should enable us to start over once the brush has been cleared, as it were.

We're obviously going to need the full cooperation of the Working Group in each Phase to make this a success. That's why I'm delighted to see so many old friends from the Street here this morning, wearing their quasi-official hats. We'll provide further detail of the program at the staff level over the course of the next few weeks. But I'll be pleased at this time to entertain any questions with respect to the broad strokes. Yes. Kung.

MR. FU. Hank, what is point of Phase One? Why we not rret rates rip now?

MR. PAULSON. A change in control of either House will introduce an undesirable element of uncertainty, putting at risk the successful execution of Phases Two through Four.

That said, I must caution you that control appears likely to shift irrespective of the outcome of the midterm elections. Bob?

MR. HAZMAT. What the Secretary is alluding to is a decision by the Olmert-Peretz coalition to retain Goldman Sachs to explore a sale of Israel's controlling interest in Congress. We haven't announced it yet, but we are enormously proud of this mandate.

THE PRESIDENT. Holy moly. Condi know about this?

SPEAKER. (?) What ingrates! Why would they give up on us now? Because we're broke? Because that resolution endorsing the destruction of Lebanon was a few votes short of unanimous?

MR. HAZMAT. No, no, nothing like that. The engagement covers only the Legislative branch. The Executive and the Press are expressly excluded. They're quite happy with their relationship with the United States. Really. No, this deal is driven by economics. They get just $3 billion each year from the United States. They then have to turn around and reinvest a huge slug of that just to maintain the message discipline network in all 435 Congressional districts. But as we all know, the Legislative function is all but irrelevant in today's America. They're just not getting a fair return on their investment. Add to that the big turnover expected in November, with old assets going out the door, a slew of new guys to buy: the numbers just don't work. Plus, there's that stupid study out there putting a spotlight on the whole thing. Under present circumstances, divestiture is an attractive option.

MR. PAULSON. Thank you, Bob. I'll defer to the political experts on the broader implications of the pending sale. I bring it to your attention only to underscore the delicacy of the situation as it relates to executing our strategy. Other questions? Yes. Dopey.

SPEAKER. (?) Hank, how can you call back the deflationary process you plan to unleash after the elections? How can you have a little deflation? And what if you get a cascading series of defaults and the system enters an irreversible downward spiral?

MR. BERNANKE. If I may. The conclusion that deflation is always reversible under a fiat money system follows from basic economic reasoning. A little parable may prove useful: Today an ounce of gold sells for $300, more or less. Er, make that $600. Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified, and he announces his intention to begin massive production of gold within days. What would happen to the price of gold? Presumably, the potentially unlimited supply of cheap gold would cause the market price of gold to plummet. Indeed, if the market for gold is to any degree efficient, the price of gold would collapse immediately after the announcement of the invention, before the alchemist had produced and marketed a single ounce of yellow metal.

What has this got to do with monetary policy? Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.

THE PRESIDENT. That's deep, Benny. I like it. Nice slacks, by the way.

SPEAKER. (?) But how will we maintain domestic order? First deflation, then hyperinflation. Then whatever. No one has a clue this sort of thing is coming. That's if it works. If it doesn't work, we're facing a thing without a name. Hyperdepression? Either way, we're going to have riots, mutinies, rude behavior everywhere.

THE PRESIDENT. Two words, son: Marshall Dillon.

THE VICE PRESIDENT. Any expression of dissent from this policy will pose a direct threat to our way of life. Therefore at the first hint of opposition this Administration will have no choice but to declare martial law. Important elements will include: internal passports with imbedded transponders, exchange controls, a military draft, civilian detention centers outside the major metropolitan areas, and extensive restrictions on all non-essential travel and communication.

THE PRESIDENT. That includes the Internets.

THE VICE PRESIDENT. With these measures in place, we will have the ability to deter, detect and suppress any domestic opposition. And so preserve our freedoms.

THE PRESIDENT. Hard core objectors will be sent hunting with Dickie.

SPEAKER. (?) Jesus Christ. Aren't there any Constitutional impediments?

THE PRESIDENT. I'd appreciate it if you wouldn't take the Lord's name in vain, son. And I'm getting pretty sick and tired of hearing the C word every time I turn around: Constitution, Constitution, Constitution. These are important times. We've got to stay the course. You're either with us or against us. Albertini?

MR. GONZALEZ. Sir. Under our reading of the Constitution, in a declared domestic emergency, the CIC assumes divine powers.

MR. PAULSON. Yes. Sleepy.

MR. APNEA. Hank, this seems like a pretty blunt instrument. How do we make sure we stiff our enemies but not our friends? And what's to stop the bad guys from dumping their Treasuries before we destroy their value?

MR. PAULSON. As to stiffing our friends, we don't worry so much about this, since we have so few -- most of the world is already dancing on the grave of the American empire, thanks to our maladroit foreign policy -- and they'll be in the loop anyway, helping smooth the markets. As to our enemies striking first, yes, we do worry about that. But the Chinese authorities, who have the largest exposure by far, are focused on preserving power through promoting China's industrialization, and, conversely, our deindustrialization. Selling their Dollar assets precipitously would put their own development at risk by triggering a global contraction with major blowback into their own economy. So we're betting this strategic emphasis will lead them to defer Dollar sales, to the point where they end up with a total loss on their positions. Worst case, they figure out the game and crash the party, loading up on cheap metal like our friends. We see that as an acceptable risk.

MR. PAULSON. Sneezy.

SPEAKER. (?) I'm a little unclear on how we get people to think things are stable in Phase One when we're obviously heading over a cliff.

MR. PAULSON. We target two main audiences with our communications policy. One is the public. While we've had serious slippage in other policy areas, generally speaking, the American public still believes what we say on financial matters. So when we release economic statistics -- however inconsistent with objective reality --, and when the markets generate averages -- however absurd --, to date, we have found the public receptive or at worst disinterested.

The second target audience is the financial community, a more sophisticated crowd. They know what's happening. But as long as they make money at it, they're happy to play our virtual reality game. These people are not in business to defend the principle of free markets or otherwise make trouble. They are in business to make money. We set up a simple incentive system. If they do what we want, we let them make their numbers. If they don't, we destroy them. It's an easy call.

THE PRESIDENT. I love this guy. He cracks me up. Hanky Panky Bo Banky....

MR. PAULSON. The wild card is real estate. The big mortgage resets don't start kicking in until next year. But if housing collapses before November, we have a major problem. The public won't listen to us on the subject of how much their houses are worth, and we don't have a price support mechanism for this market.

SPEAKER. (?) Perhaps in that event we'll experience some sort of shock that will take people's minds off their declining house prices. Remind them how lucky they are to have us in charge.


MS. MIERS. Hank, in the markets you do control, how do you do it? Doesn't this create a rather awkward paper trail?

MR. PAULSON. No, Harriett, it's a lot more subtle than that. But that's a very discerning question. You care to amplify on this, Joe?

MR. JETSKI. Sure thing, Hank. We tell the markets what we want in several ways. One way is direct -- we create a trading environment where only those prop desks who position themselves according to our playbook ever make it home. We make things go up when they should go down. We make things go down when they should go up. We're very easy to read when we're doing policy trades. The guidance is so obvious a blind squirrel could see it. It's mostly just computers responding to our algorithms anyway. You'd have to want to lose money in a big way to override your systems and go against that flow.

Another way is indirect -- we goose or pressure assets in one market by trading derivatives in another. We buy or sell in size, futures, say, in market A, creating obvious arbitrage opportunities relative to the underlying assets in market B. The big players that aren't brain dead pile in for free money. They go long or short against us in the derivatives market and do the opposite simultaneously in the cash market. They book an instant, risk free gain in the amount of the differential we just created. They keep doing it as long as we supply the juice. At the end of the day, the cash markets go where we want. The leverage is huge.

Still another way is my personal favorite, "Operation Rolling Plunder." Every so often, we rain terror from the skies. We bomb the trading pits and exchange posts with massive sell orders. Without letup; all the way down. At the same time we pull all bids, blocking the exits. The refugees get trapped like rats, then panic and dump their holdings. We snarf up their discards and reload, all the while bombing and shorting the stragglers. By the time we finish, the only survivors are a few miserable deadenders and nutcases. All they can do is piss and moan about "market manipulation," and hatch their kooky conspiracy theories. They call themselves "gold bugs."

THE PRESIDENT. A-holes is more like it.


SPEAKER. (?) But Hank, how will you have the gold you need as a platform for a new hard currency when you're selling so much of it now to maintain stable prices?

MR. PAULSON. We don't actually sell much metal any more. There are some wash trades among friends - the central banks - from time to time, but for the most part we sell claims to metal. When the time comes, the exchanges and OTC counterparties will declare force majeure and settle out the claims in paper.

THE PRESIDENT. Force majeure?

MR. PAULSON. French for screw you. Sir. Besides, we're gathering up plenty of accessible metal in the ETFs. And Barrick holds a lot of reserves we can monetize if needed.

THE PRESIDENT. American Barrick? Is that the exploration company No. 41 helped Mr. Khashoggi and Phelonious Monk set up a few years back?

MR. PAULSON. The very one. They're big now, and getting bigger all the time. We -- the government, that is -- are the indirect owners of most of their reserves. By the time we're finished with Phase Two, we expect Barrick will control most of the known reserves on the planet. Except for all the stuff we -- at Goldman and the other banks, that is -- are picking up in our personal accounts. Throughout Phases One and Two, we'll be buying gold in the ground at a fraction of its future monetary value.

I would also point out that in any event, we don't expect to have to use real metal backing for the new currency. Just the promise of metal should be enough, based on historical experience. People will be so exhausted by that time that they'll clutch at anything. The Rentenmark had no gold backing, for example. So we plan to keep the metal right where it belongs. With us. Broadly speaking.

THE PRESIDENT. The Renten-Who?

MR. SHORTZ. I would be most pleased to address this topic, Excellency. What the Secretary is referring to is the Rentenmark, which was the immediate, interim successor to the German Reichsmark. In the course of the German inflation, the Reichsmark declined in value from an exchange rate of about 12 to the U.S. Dollar in 1919 to over a trillion to the Dollar in 1923. A very large decline indeed, Highness. The Rentenmark was a cracking good success, and although it was presented to the German public as a currency unit linked to gold, in fact there was not a single gram of gold behind it. It was all a very great spin. Of course, the circumstances then were very different. The hyperinflation of the Germans came before their internal repression and external aggression.

THE PRESIDENT. Who's the towelhead, Hanky?

MR. PAULSON. This is Mr. Grunji Shortz, sir. He's our -- Goldman's -- head trader in London. He quarterbacks a lot of our market management activities.

THE PRESIDENT. Well, this is all very interesting, Hanky. No, I mean it. But I got a bike date. Then I need a nap before the Rangers game. Pablo Escobar's pitching. So let's wrap it up. Do I hear a movement?

A motion having been made, seconded and carried unanimously, the meeting then ADJOURNED.


Harriet Miers,

Knallgold#147308#1473429/10/06; 08:31:26

ANOTHER banker saying Freegold without spelling it...
Ten BearsGREED=AVARICE#1473439/10/06; 11:45:40

@ osa104c # 147332

I think that Reeves would agree with you. More from Reeves archive referenced above.

Chris PowellAustralian central banker admits disinformation campaign to dupe FX markets#1473449/10/06; 13:23:48

Markets 'Duped' in Dollar Crisis

By Tim Colebatch
The Age, Melbourne (Australia)
Monday, September 11, 2006

Reserve Bank governor Ian Macfarlane has revealed that the Reserve teamed up with Prime Minister John Howard and Treasurer Peter Costello in the 1997-98 Asian financial crisis to hoodwink foreign exchange markets into thinking interest rates might rise.

In an hour interview last night with ABC radio, Mr Macfarlane said the "unusual" collaboration was intended to prevent interest rates rising, in response to a worrying plunge in the value of the Australian dollar.

In the panic of the Asian financial meltdown, foreign exchange markets spread "contagion" to most Asian currencies, dragging down the Australian dollar from 73.91 US cents on October 13 to 58.45 US cents eight months later. At one point the dollar fell by more than 5 US cents in a fortnight. It then had several more sustained falls before turning back up.

Mr. Macfarlane said in most other countries whose currencies were falling, central banks had raised interest rates to try to shore up the currency. But the Reserve, which had cut cash interest rates from 7.5 percent to 5 percent over the previous 15 months, thought this would be ineffective and decided to try another strategy: "to make sure that a lot of people thought interest rates might go up".

"It was very important to get the rhetoric right," he said. "Canberra was very helpful. We sat down and talked to the treasurer and the prime minister, and we all agreed on various things that should be said, and should not be said.

"We agreed -- and it's an agreement which by and large has held very effectively since then -- that the treasurer and the prime minister do not talk about the value of the Australian dollar."

They could, however, always hint that rates could rise.

Mr. Macfarlane, who steps down as governor on Sunday, will present the ABC's annual Boyer Lectures later this year.

Ten BearsBOND MARKET HAS IT RIGHT by Jim Willie#1473459/10/06; 13:55:57

Jim Willie discusses Ricardo's ‘iron law of wages’ labeling it ‘iron ceiling’, bond rates, and other pertinent topics, which mainstream economist consistently refuse to see clearly, (or perhaps just refuse to accurately portray publicly).

the GDP is exaggerated by at least 4%. Its cousin lies is the Consumer Price Index, which is suppressed by at least 4%. Keyword is "lie" here.

The labor cost differential between the United States and China is NOT RESOLVABLE without airtight trade protection.

Prices have risen in the wrong places, named COSTS, and prices cannot seem to rise in the right places where people live and work. That is the key problem.

Exploitation is the name of the game in capitalism, which curiously has been forgotten. The object of exploitation has shifted with the new paradigm, namely us in the developed inflated aging world.

Reflation engineered and dictated by the USFed was a snap, so often repeated that the procedure earned the label of the Business Cycle. Of course, that is a misnomer if there ever was one. It was the Credit Cycle.

In a sense a new Hot War wrought by globalization has wrecked USFed policy effects.

a bankerFor Flatliner; tempests in teacups#1473469/10/06; 16:21:07

In the minority are people of independent thought and action. The majority are guided by the combined influences of the behavior of the surrounding crowd which in turn is given further shape by the deliberately-worded narration of all such events as spun by the popular media.

Those few of independent thought and action will not benefit from anything I have to say. Cutting to the chase they are already the owners of gold and the buyers of more when monies allow it. My comments are for the trembling masses who bow and sway to the guiding winds like the compliant twigs and servile leaves of the birch tree.

Among the many varied powers of the earth there are those that would have the market use (and value) of gold constrained as an adversary. Also there are those that would see gold set free in a beneficial allegiance. A basic delineation of these two sides I expressed in my other post.

The battle is ongoing to constrain or to free the gold function and resulting value. In the ebb and flow many lazing birch leaves were stirred to life by the winds blowing $730 in May's mid days. This was even as many central banks were making their first bold choices to join the freedom-fighting side of the mark-to-marketeers in the war over the fate of gold's reserve function.

These CBs are among the thinking few and are not going to be disoriented by a change in the wind. The ECB as a pioneer of unborrowed vision blazed the early trail. They weathered two full years of deep gold-value suppressions by the incumbant powers that were blowing constantly for gold constrainment.

Compared to the past I likened this current gold constrainment (fall from $730 mid-May) to a tempest in a teacup. The teacup is among the least of things to any man of independent thought sitting at the table and is largely ignored with his eyes and thoughts upon the disposition of the long-awaited entree.

But again, these comments were not for those august philosophers among men, but for the many leaves of the quaking birch trees who were swept into a frenzy of action on the strong breeze of $730 and who hang limp and despondent when not being blown wayward and confused by the alternating winds of $600.

I meant only for my words to help some of the trembling leaves come to a firmer grounding of thought and walk their own deliberate path like any man able to put a shoulder into swirling winds and to ignore the silly teacups served by the other side.

Bizarro-GreenspanBizarro pop-in#1473479/10/06; 16:34:03

"If there is one principle more deeply rooted in the mind of every American,it is that we should have nothing to do with conquest."

Thomas Jefferson

Ten BearsFROM KNOW-HOW TO NOWHERE :Addison Wiggin#1473489/10/06; 17:39:53

Another guy who understands the true situation;
The first thing to realize about a deficit in foreign trade is that, by definition, it reflects an excess of domestic spending over domestic output. But such spending excess is actually caused by overly liberal credit at home, and not really by cheaper goods produced elsewhere.

The diversion of U.S. domestic spending to foreign producers is, in effect, a loss of revenue for businesses and consumers in the United States. Is this important? Yes. The loss is higher than $500 billion per year. This is America's income and profit killer, and it can't be fixed with more credit and more consumption.

The need for ever-greater credit and debt creation just to offset the income losses caused by the trade gap is one of our big problems.

An equally big problem is a distortion of the numbers. We are officially in great shape, but the numbers don't support this belief. Personal consumption in the past few years has increased real GDP at the expense of savings, while business investment has grown only moderately

If we were to measure economic health by credit expansion, the United States has the worst inflation in history. And still our experts are puzzled by a soaring import surplus.

The problem here is that American policy makers and economists fail to understand the significance of the damage that is being caused by monetary excess and the growing trade gap. The trade gap is hailed as a sign of superior economic growth, while the hyperinflation in stock and house prices is hailed as wealth creation.

"Foreign ownership of our assets will grow at about $500 billion per year at the present trade-deficit level, which means that the deficit will be adding about one percentage point annually to foreigners' net ownership of our national wealth. As that ownership grows, so will the annual net investment income flowing out of this country. That will leave us paying ever-increasing dividends and interest to the world rather than being a net receiver of them, as in the past. We have entered the world of negative compounding - goodbye pleasure, hello pain."

Clink!@ contrarian#1473499/10/06; 18:29:20

The best satire is where there is only a fine line between farce and supposed possibility. I find it heartening that the satire of the last year or so has had more teeth than in the preceding four. It's always good to see the nervous smiles of TPTB when they see the people laughing ..... at them. A good find, sir.

The Invisible HandThere are the Fascinating Minutes in today's msg#: 147341#1473509/10/06; 19:23:56


MORAL HAZARD - A problem whereas investors, after being insulated from the consequences of risk by intervention, might pay insufficient attention to similar risk the next time, or operate on the expectation of official intervention.
In 1999 the 'Counterparty Risk Management Policy Group' (CRMPG) was formed to address the issues with LTCM and to develop policy that would protect the financial world from another threat to the financial markets such as the LTCM incident
The CRMPG filed their report in July of 2005. Here are some selected excerpts with my comments.
The report can be found here.
CRMPG: "The primary purpose of CRMPG II — building on the 1999 report of CRMPG I — is to examine what additional steps should be taken by the private sector to promote the efficiency, effectiveness and stability of the global financial system.


There is also the Washington Agreement (WAG) I and WAG II.

And the dates of these Agreements seem to coincide with those of CRMPG I and CRMPG II.

In insurance theory, moral hazard is the name given to the increased risk of problematic (immoral) behavior, and thus a negative outcome ("hazard"), because the person who caused the problem doesn't suffer the full (or any) consequences, or may actually benefit. Such a concern typically arises in the context of a contract (for example, an insurance policy).


What was the use of gold in one's portfolio again?

Golden LionheartSatire?....... I thought it was true!#1473519/10/06; 19:34:17

Great post Contrarian.
ArmageddonGold Buying Opportunity in next 2 weeks!!!!#1473529/10/06; 20:10:45

As I am looking at the price of gold its down $10 and under $600 per ounces. Just as I thought since the European Central banks are probably unloading their 160 tons of gold or gold paper products before Sept 26. Hmm... Mid Term Election is just around the corner too and the House and Senate are up for grabs. Oil is coming down, gas is coming down, I just heard Iran is now thinking about suspenstion of uranium enrichment for 2 months (just in time for the election..) and now guess what?? Gold is coming down.

However, we don't know if this drop in gold price is going to be accompanied by a major terror strike or not. Thats why I am NOT going to sell the gold I have. If the terror strike is a nuke attack and if it affects my area, if I survive I probably wont have electricity, phone service, and mail service since the nukes can destroy electrical circuits through EMP. My bank accounts and credit cards may not work and thus I won't be able to buy after the Gold Cartel Knocks gold down.

The supercriminal known as Henry Paulson the current Secretary of the Treasury is a 700 million dollar Goldman Sach's goon and super criminal. I am pretty sure he is a master crook who can manipulate the financial system in innovative and sneaky ways. Because of this I suspect gold is going down to somewhere around $300-$500 in the next 2 weeks and I am sure Paulson is going to try and hold it down there through the election.

I guess if there was a gold price guessing contest right now then I would say on Sept 26, 2006 the price of gold will be $425 per ounce. Other board members opinions are welcome. Actually I think this is a good time for another gold price guessing contest. :)

The Invisible HandIMF should know that TINA is dead#1473539/10/06; 21:06:51



The IMF is an organisation charged with keeping the global economy stable

Its managing director, Rodrigo de Rato is therefore saying that the world economy is stable

Or do you expect that De Rato will concede that he is unable to fulfil his impossible task in the present world of dollar-dominance?

His aim is to help further developing the debt-inflating dollar-monopoly of the FED.

This becomes more difficult by the day as the strict monetary policy of the ECB is continuously displaying that there is an ALTERNATIVE. (TIAA).

This makes it more difficult for De Rato to have his way. Attention is indeed automatically turned to the EMU-euro-concept

This is the POINT FOR THE IMF.

It is the system of the dollar-regime which, through dollar-globalisation, directs the whole planet. The ECB is here the pain in the neck for the IMF.

We have a choice between
-a dollar world economy based on dollar debt creation
-a euro economy which wants to control debt-policy in its internal household


Is it really a surprise that the world is watching which of the systems/regimes/policies obtains better results?

The ECB (EMU) can NO LONGER accept that the system of the dollar-regime determines what the EU should economically/financially/monetarily do.

This is a pain in the neck for De Rato and some European politicians who are saying that it is a SHARED RESPONSIBILITY of everybody to end the economic imbalances.

The ECB DISAGREES and thus refuses to admit that the global imbalances are, as De Rato, Juncker, and Heinaluoma. argue caused by those who refuse to follow the system of the dollar-regime and policies which the IMF devises to perpetuate the regime
The Europeans used the Helsinki gathering to set out where they stood on those fronts, mandating two men to explain their position in Singapore - Luxembourg's Jean-Claude Juncker, chairman of the Eurogroup club of finance ministers, and Finnish Finance Minister Eero Heinaluoma.
A draft of their Singapore speaking notes called for orderly correction of global economic imbalances.
"This is a SHARED RESPONSIBILITY and should be done in a way that minimizes disturbances to sustained growth," it said.
But EUROPEAN CENTRAL BANK President Jean-Claude Trichet and Juncker suggested that RESPONSIBILITY LAY OUTSIDE EUROPE.

What we see here is a DIVERGENCE within the EU between the POLITICIANS and the BANKERS.

The euro-gold concept is thus NOT the result of a POLITICAL WILL

BUT of the fact that SOME PEOPLE HAVE APPARENTLY MANAGED TO CONVINCE some central bankers of their UNBORROWED VISION that gold needs in some way to given back its monetary use, by instituting Freegold and the marking to market of gold reserves. (1)

Interest rates are now 4.5% in dollarland, 3.5% in euroland. This is a difference of a FULL PERCENT. This is enormous.

The cause of this difference is the fact that the two DIVERGING MONETARY SYSTEMS/REGIMES/POLICIES. have of course DIVERGING, PURPOSES

The IMF wants to keep the two diverging monetary systems/regimes/policies to CONVERGE whereas they are …. DIVERGING.

That's where Freegold can fully play its role. The bankers know it . The politicians refuse to admit it. Remember the gold sales by (the now future prime minister of the UK) Gordon Brown?


The Invisible Hand (9/9/06; 06:37:04MT - msg#: 147315)
The dollar-IFMS is kaput

dollar-IFMS = dollar-International Financial and Monetary System


"Throughout the centuries there were men who took first steps down new roads armed with nothing but their own vision. Their goals differed, but they all had this in common: that the step was first, the road new, the vision unborrowed, and the response they received—hatred. The great creators—the thinkers, the artists, the scientists, the inventors—stood alone against the men of their time. Every great new thought was opposed. Every great new invention was denounced. The first motor was considered foolish. The airplane was considered impossible. The power loom was considered vicious. Anesthesia was considered sinful. But the men of unborrowed vision went ahead. They fought, they suffered and they paid. But they won."
Ayn Rand

On Sunday September 26, 1999, 15 European Central Banks concluded the Washington Agreement on the sidelines of an IMF-World Bank meeting. By this Agreement, the politicians wanted to set limits to gold lending. This agreement recognised that gold will remain an important part of global monetary reserves and that the involved central banks will, apart from the sales which have already be decided, not sell gold in the next five years.
The ECB reserves [...] are still being, marked to market on a quarterly basis. The Agreement [... has been] renewed on stricter terms between more than the 15 original parties at the IMF-World Bank meeting in Dubai on September 23-24, 2003.

Some people have apparently managed to convince some central bankers of their unborrowed vision that gold needs in some way to given back its monetary use, by instituting Freegold and the marking to market of gold reserves.

GoldiloxMONEYIZATION, PART 29: Process of Elimination Leads to Gold#1473549/10/06; 22:27:22


Much discussion has begun on whether or not the housing industry is approaching a "buying opportunity." Such talk is premature and largely ignores the systemic nature of the problem. The massive housing finance system of the U.S. is only beginning to have its structural integrity attacked. With foreclosures likely to reach levels beyond anyone's guess, the ability of that system to provide financing for home purchases will be seriously constrained. If the fuel injection system on your car fails, it will not heal itself overnight in the garage.

The implosion of the housing bubble should benefit Gold investors. Two responses are likely to this massive economic problem, and both should push the value of Gold higher. First, the Federal Reserve will indeed panic and attempt to lower interest rates. Any attempt by the Federal Reserve to reverse the collapse will fail. Putting gasoline in the tank of a car with a broken fuel injection system will not make the car run. The same is true for the housing situation. As the financial system that connects monetary injections from the Federal Reserve to the housing industry will be in near total disrepair, this easing will be ineffective. The market response to this policy action will be felt on the foreign exchange markets where the dollar's value will fall. $Gold will move nicely higher in such an environment.

Second, we can expect foreign investors to become reluctant to purchase U.S. dollar-based debt. This action will put further pressure on the dollar's value. Something approaching $60 billion a month of dollars could be dumped on the foreign exchange markets. At some point foreign investors will begin to liquidate their holdings of U.S. debt. US$1,375 Gold will not be hard to reach in such an environment.

melda laureEarly start to Christmas Shopping season!#1473559/11/06; 00:40:27

Welcome A Banker, quite poetic (and to the point). Sir 'Lox it has always been my suspicion that the fake bars found in iraq were quite real and that the "fake bars" was a cover story. My only basis supporting this is that the fake bars have never been seen since, nor has any follow up story by published since that day.

Nuclear Transmutations in Thin-Film Nickel Coatings Undergoing Electrolysis," George H. Miley and James A. Patterson...Following a two-week electrolytic run, the Ni film was found to contain Fe, Ag, Cu, Mg, and Cr, in concentrations exceeding 2 atom % each, plus a number of additional trace elements. These elements were at the most, only present in the initial film and the electrolyte plus other accessible cell components in much smaller amounts.

Sir contrarian, that was quite hillarious, farts and all. But I am not sure we will be lauging forever. There are many truths that must remain apocryphal because the cost is too high. This I fear is one of them. However it is still a good deal easier to punch keystrokes on a computer, so there is no cause for alarm. I worry more about our descent into slavery.

"Now suppose that a modern alchemist solves his subject's oldest problem by finding a way to produce unlimited amounts of new gold at essentially no cost. Moreover, his invention is widely publicized and scientifically verified..."

Bernanke may come to regret having said that; gold will have its day all the same.

GoldiloxFake Iraqi gold#1473569/11/06; 01:14:19

@ melda laure,

I thought we had determined from the press photos that the weight of thay many bars would have totally overcome the trucks' suspensions had they been real.

After all, the density of gold is multiples greater than that of any of the industrial metals that might have been decorated to resemble the real thing.

That aside, I am inclined to agree that it was a cover story of some kind, as I fully believe that crushing the Islamic Gold Dinar movement (and "confiscating" their reserves) was a top priority of the FIAT Masters and the contrived Iraqi invasion.

While the Euro and other pure FIAT currencies can masquerade as competitive alternatives to the World's Reserve Currency to our hearts' delight, they really offer no true alternative. They represent the very same "obligation" to the same Money WIzards as the "almighty dollar".

melda laureOk, then perhaps I was mistaken.#1473579/11/06; 01:20:50

I do not remember anyone saying that, but it would be a good reality check. I do recall the same point being made about the brinks trucks that were used to haul away the contents of the comex vault under the WTC.
YGMTrue Signs of the "Times"#1473589/11/06; 04:02:01

smoke, mirrors, agendas, gold plating lead, gold embossed IOU's, prophet's of doom, powerful fiat IOU's yet worth little, singularly 1st up best dressed mentality worse than ever before globaly, ethics, (what does that word mean?), pigs at the trough in a frenzy. Contradictions every 30 minute's in the media reports of so called mining & market experts,it's going up, no it's going down, the metals/commodities bull has years to go, no it's peaked, newspaper articles headed w/ superlatives to exageratingly describe every up or down movement of metals and markets which is more often than not some editors/owners/IOU buddy, agenda driven tactic. Masses screaming for more, better, faster, all the while totally ignorant of what is meaningful in life or wealth. Funny how some deep buried yellow wealth, family or friends and an open mind can help you rise above the endless chatter & madness.....YGM
Knallgold(No Subject)#1473599/11/06; 08:31:20

"But with nothing left to lose, Uncle Sam will try to make an ugly show of it for all of those CBs (and their tentative politicians) who are very newly arrived to join the MTM team."---a banker

Uncle Sam could actually shoot in his own feet.If its so obvious he engineers the ugly show,it will only attract more to the Golden Team.Once they realize they only have to beat a weak anti-freemarket force (which already is in its last grasps as world reserve),Golds charisma will be so seducing...

btw,a banker,you write a bit like Another-just to know if we say hello to an old friend!

arbyhWe watch as history bears witness ...#1473609/11/06; 09:51:31

... and the FIAT -vs- Gold battle on the market unfolds today as we see the dollar trying to make and hold a small gain, while other forces coordinate a damaging blow to gold. This battle pits the well entrenched financial and world structural establishments utilizing unlimited dollars as a tool, against the forces of difficulty in trying to prop up an overburdened shell of debt country with the fundamental problem being that the currency itself looses value with all new debts. All current spending is debt.
It compares with a man cutting his own throat, gauging the need blood money, against the pain and chance of collapse.

May we have a moment of silence for the 9 / 11 victims? ...

... This is also a major anchor around the neck of government. While balancing the shell of debt, they must fight a dangerous battle of intrigue, against an unseen and well hidden foe. 9 / 11 plays witness to the dangerousness of our foes. We battle with massive fire power and guidance systems against an enemy of skilled in explosives, assault and camouflage.
Have you ever played Command and Conquer Generals? I have, and having been a career soldier and a fairly skilled tactician I have engaged in battle (war gamed no less than 20 times in the general vs general game option) these two types of adversaries against each other. I have yet to score a victory of the Advanced Tech Army over the well hidden army skilled in explosives, BIO CHEM tech, assault, and camouflage. Why? Well you could say I'm unskilled in the game, but reconsider the foe. The elusive deadly foe striking at will from unseen locations. Unleashing his deadliest power as quickly as possible.
TOC speaking with the Sensor Operator: "Did you see that, can you get me imagery on that? Here's the coordinates vicinity...OK...Now who did it, and which way did they go? I don't know I'm looking and see no tell tale activity. They are gone. I'll look for high speed vehicles moving away...shit there are hundreds of them."

Turning back to the FIAT -vs- Gold battle...I see gold is getting its ass kicked. Well hard to be surprised it has a foe of unlimited resources and establishment.
My GG, IFN, PCFG, CEF are killing me all of them. I must be a bad tactician, because it surely hurts.

Bizarro-GreenspanWhat's the outlook,ORO?#1473619/11/06; 09:58:25

"The outlook is one of stagflation worse by far than the 70s. The cause for monetary inflation of the order I expect is bad debt. The bad debt is a result of the process of credit quality deterioration characteristic of loose credit conditions, which are themselves the result of having no substantial solvency risk for the major banking houses, which,in turn,is the result of the moral hazard created by the presence of a lender of last resort."


Sounds great,let's all watch them get themselves out of this one,tally ho.

arbyh(No Subject)#1473629/11/06; 10:05:56

The Dow Jones Industrial Average is only down a little, so it is the "nay sayers" who are taking a, emerging markets...
Flatliner@a banker #1473639/11/06; 10:14:14

It is a rare day when one see's independent thought filter through the sea of noise in a discernable way. It's the rare song that sparks a lonely tear, or the cry of the sacrificial lamb. Lost in the crowd of black umbrella's are a few red ones that standout, yet dare not resist the flow in fear that their true color will be noticed. Then, along comes a sunny day.

Modesty is a virtue that leads to an invitation to play.

You come to the forum at an interesting time with a sense of confidence that has not been seen for a while. This is truly refreshing and bewildering. To those that ‘think’ they are of independent thought, many will see benefit from your words, if only to see another red umbrella in the crowd or as to see someone that also notices that it really isn't raining.

How do you share?
Why do you share?

If you are here to help some trembling leaves, how is this done? Where is the wind calm and why is it that the crowd moves in unison towards what looks like the obis? Do you speak words that have been rehashed a million times? Or is your foundation build on rock rather then water?

Sorry for the barrage of questions, but I can't help but see that it's a sunny day.

arbyhpressure on gold is waning#1473649/11/06; 10:50:14

The pressure on gold is waning. The establishment forces must have taken a lunch break.
OT: When Hitler's rail car artillary forces attacked the Maginot Line of French forts they would fire 1 round an hour, on the hour, from 8 to 5 (as I recall). They would, of course, skip the noon hour for lunch and resume at 1PM sharp.

Sierra MadreArbyh: Here we go again....#1473689/11/06; 12:28:56

9/11 - ANOTHER day that will live in infamy...

"9 / 11 plays witness to the dangerousness of our foes. We battle with massive fire power and guidance systems against an enemy of skilled in explosives, assault and camouflage."

I agree with that statement; however, you have not identified THE FOE.

If you still believe those towers fell because two planes hit them, you still have to explain the collapse, on its own footprint and at free-fall speed, of WTC 7.

I have a fine bridge to sell, you interested?


Sierra Madre(No Subject)#1473699/11/06; 12:30:11

Please excuse the repeats...sorry about that.


contrarianPancakes#1473709/11/06; 12:37:39

Sierra Madre--yes indeed, buildings do not pancake at freefall speeds, even at IHOP!
ThoreaulyThe NAHB Index vs. the S&P 500#1473719/11/06; 12:59:13

This was referred to yesterday, but I don't think the link worked. The graph is truly eye-popping, however (see link), as it shows the S&P following the NAHB Index in virtual lockstep for the past ten years . . . but with a twelve-month lag! That is, the NAHB Index is essentially giving us a look at where the stock market will be a full year from now!

My question: assuming the PPT is (or soon will be) aware of the correlation, what in the world can they do to stop what would be nothing less than a full-scale economic collapse?

GoldiloxThe Goldilocks Monday#1473729/11/06; 13:14:37


The Fed is working overtime on the creation of a mass perspective of a non inflationary economy. The media is working overtime to call the end of the commodity market. Crude oil is being painted as a rotten apple ready to and in fact dropping from the tree.

The item that allows this game is not energy or metals of edibles, but rather the US dollar. Argue if you wish, but if today the US dollar was below .8500 the impact of all this misinformation would have been quite limited.

The goldilocks economy is being repeated on the airwaves today. It claims the economy is slowing perfectly and the cooling of commodity prices proves the wisdom, timing and depth of intellect of the new Conan the Money Man, Professor Bernanke. Greenspan has, like an old soldier, just faded away.

The Fed's Poole has just come out and said everything the market wanted to hear to fit the Goldilocks economy. We are right back on the 1930 Plateau of Prosperity as the markets seem to have forgotten about the Cinderella Economy that was in play a few months ago. I guess Goldilocks with its implication of the 3 BEARS is even better than a Cinderella (she vanishes at midnight).

Right behind Poole was Cathy Minehan of the Fed repeating the perfect balance now existing economically by Red's sage actions. This Monday 9/11 has got to be the best day ever in media reporting of the health of the US economy. There is hardly a challenge out there.

Geopolitically, both Iran and North Korea are ready to lay down their arms and beat them into plow shares.

Today Afghanistan and Iraq do not even exist.

Forgotten is every fundamental for which there is neither fix nor today attention. Every black box has gone bear oil and bear energy, yet the dollar remains the key. Gold is all in the US dollar.

It is inhumane to lecture people who are suffering. All I can say is damn margin, damn writing options, damn credit card use in investments and damn personal loans to speculate. They are the killer today as no one can stand pat and change the channel when the margin call person is banging on your front door looking for your first born.

If anything proves Wag the Dog is in action it is the concerted commentary from all corners of government and international banking TODAY concerning the miracle of the perfect Federal Reserve management of the economy with geopolitics falling directly into orderly control.

Gold is going to set the bear trap of all time, but those hanging on by a thumbnail might just be the means by which the wash out occurs. They always are.

As far as I am concerned:

The "Formula" is absolutely correct.
Gold is headed for $1650.
This is an attempt to break the back of inflationary psychology before October 1st.
The amount of gold, silver and precious metals shares on margin is shocking. Even the most conservative I have spoken to has been nursing margin debt for the past month. I feel so deeply for their pain.

$580 was called by a poster as the bottom of the "correction" last week. Will he/she be correct?

mikalNews too true to use#1473739/11/06; 13:54:35

Asian Countries to Let Currencies Rise, Hike Rates
Sun, Sep 10 2006 19:15 GMT
BASEL (AFX) - The Bank for International Settlements said Asian central banks which have intervened to limit currency strength may be forced to raise interest rates or let their currencies appreciate as inflation pressures grow.
Central banks have been able to keep interest rates low during the large-scale foreign exchange market intervention of recent years, because other structural factors such as increased competition and excess capacity have limited inflationary pressures.
But this situation is unlikely to last, the BIS said.
"The concern would be that these structural forces might recede or eventually be overwhelmed by the inflationary pressures arising from expansionary monetary conditions," it said in its latest quarterly review.
"Growth since 2002 has reduced excess capacity in the global economy, and commodity prices have risen strongly across the board. In such circumstances, central banks may have to raise interest rates and allow their currencies to appreciate at a faster rate than in the past," it said.
The scale of intervention in recent years has been unprecedented, resulting in reserve accumulation at a rate of 250 bln usd a year by emerging market economies between 2000 and 2005. This represents 3.5 pct of their combined annual GDP, the BIS said.
Reserve accumulation has been particularly rapid in China, South Korea, India, Malaysia and Taiwan, and also in Russia, it said.
Intervention has been aiming at offsetting some of the upward pressure on the countries' currencies resulting from their large current account surpluses.
Because the domestic money supply expands when a country sells its own currency in interventions, this would normally be expected to lead to additional inflationary pressures.
But these pressures can be offset if the authorities "sterilise" the intervention by issuing securities to mop up the resulting extra liquidity.
But in the case of some central banks, recent interventions have not been fully sterilised, the BIS said.
In India, South Korea, Malaysia, Singapore and Taiwan, between 85 and 95 pct of intervention was sterilised between Jan 2000 and May 2006, whereas the figure was just above 70 pct in China and 60 pct in Russia, it said.
"Many central banks may have used reserve accumulation opportunistically to expand the monetary base to support their choice of a more accommodative monetary policy stance," it said.

TownCrierFT HEADLINE -- The Short View: Gold and oil#1473749/11/06; 14:33:19

by John Authers, Investment Editor
(FT) September 11 2006

September 11 was an eerily inappropriate date for a decline in the global perception of geopolitical risk. But yesterday saw the sharpest fall in the world gold price in three months.

It fell more than 4 per cent, bringing it below $600 per ounce to reach $586, and 18 per cent below its high for the year, as investors assimilated the idea that political risks may not be not as high as they had seemed and that oil is not a one-way bet.

^---(FT registration req'd to read article at url)---^

Without going further, I can only hope that the author does not propagate the myth that geopolitical risk (specifically the threat of violence) is the primary force shaping the market value of gold during this era.

Closer to the truth would be an explanation that we are looking into a crucible to see what survives as dualing reserve-accounting paradigms square off in a trial by fire.

It is only paper-gold that is added as fuel, and it is only the paper that burns. Unfortunately, it isn't until the test is completed and all the smoke clears that a lot of novice or potential gold investors will be able to understand the difference. As a result they are paralyzed on the sidelines rubbing their eyes and they miss out on glorious buying-opportunities in the heat of the moment.

Does anyone really seriously doubt that physical gold will prevail? If, indeed, you are in doubt, take a long hard consideration of its competition.



USAGOLD Daily Market ReportPage Update!#1473759/11/06; 15:48:37">
The Daily Gold Market Report has been updated.

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

MONDAY Market Excerpts

September 11 (from MarketWatch, Reuters) -- Mirroring a broad decline among commodities, gold futures dropped $20 an ounce Monday to close under the $600 mark for the first time since late June, with some analysts betting that an upcoming sales deadline could translate into higher market supplies of the precious metal.

COMEX December contracts fell $20 to end the session at $597.30 after trading at one point as low as $589.60 -- the lowest intraday level for the contract since June 23.

"The selling in the last few sessions has all the earmarks of central bank selling," said Peter Grandich, editor of the Grandich Letter. "The belief the Washington Agreement participants would not meet their quota by September 26 now looks like wishful thinking," he added, referring to a handshake-pact among certain central banks to set limits on each year's sales of the metal from sovereign vaults.

The Washington accord had been more than 100 tons short of its quota, but the banks should be finished with their sales before the cutoff date, he said.

"Physical buyers are accustomed to this and have stepped aside knowing a big rally will occur once the selling runs its course," Grandich said.

It's true that the precious-metals investment community is fully aware there is a potential remaining 160 metric tons of gold that has not yet come to market under the terms of the central bank gold agreement, said Kitco's analyst Jon Nadler.

But traders don't have a handle on whether the quotas will be met or simply fall short, he said.

The Bank of Portugal said Monday it has sold 20 tons of gold reserve in recent months and settlement of the operation is now complete. It has sold a total 35 tons of gold this year and holds a total 382 tons of gold in reserves, said a bank spokesman.

Prices for precious metals have seen some hefty losses over the past several days, but some analysts believe the declines provide a buying opportunity.

This looks like normal market volatility to us and it is not a fundamental change in the story," Mark Mathias, managing director of Dawnay Day Quantum, said.

James Steel, analyst at HSBC Bank in New York said: "The key seems to be oil and copper. The direct correlation between gold and oil is not very strong, but gold is being undermined by its inclusion in commodity indices."

"World gold prices are falling at precisely what ought to be a time of seasonal strength in the marketplace, prompting skittish shot-term speculators to bail out en masse, rather than await the much-anticipated return of the throngs of jewelry buyers from India," said Nadler.

"The calendar however, will not wait, and the wedding season will be upon India within a month," he said, meaning "some will have to decide whether $580 or $590 gold is enough of a bargain to go ahead and load up on bullion."

Grandich said he believes a "big reflex rally is near."

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

TownCrierRussian investigation of highland gold widens#1473769/11/06; 16:06:53

MOSCOW ( --The main shaft fire is still not out at Highland Gold's Darasun goldmine, in Chita region, Southeastern Siberia, five days after an explosion trapped 61 miners below surface. Twenty-five died. Local firefighters say that they will take another two to three days before the fire will be extinguished.

The incident is the worst in the region, or in a goldmine across Russia, for more than a decade. The protracted rescue effort has been conveyed nightly on Russian television, as hope for the survivors dwindled.

The damage to Highland Gold, the London-based goldminer created by Roman Abramovich and Roddie Fleming, is serious. Rescued miners have given interviews to the media, accusing Rusdragmet, Highland's local management company, of ignoring fire safety requirements, and economizing on mine protection to cut costs of production. One said he would not return to work at the mine.

In Monday morning trading on the London Stock Exchange, Highland Gold's share price fell 8% to a historic low of 143 pence. This followed falls on Thursday and Friday of 15%...

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

Mining is dirty, difficult, dangerous work.

Maybe that's why so many financial institutions resort to simply printing and selling the idea of it instead.

Are you buying it?


The Invisible HandIMF - Rato , the broken record !#1473779/11/06; 19:53:49

The international monetary fund chief has warned that the global economy could head into recession if imbalances in the world's financial systems are not resolved.


Imbalances...take it disorderly's difficult...don't rush...

And ABSOLUTELY NOTHING happens ! That's how it goes
with very, very important matters.

(IMF) !

When none of the main imbalance-parties does what is expected...they all know very well how it might end.

Most probably they "want" it to happen.

"It", being the further build up of the imbalances up until it bursts.

An explosive devaluation of the dollar + global hyper price-inflation.

Exactly what IMF-Rato doesn't dare to say !

He keeps hoping for a recession as the best case scenario for the dollar-IMF he is serving.

The Invisible HandThe Goldilocks euro#1473799/11/06; 20:21:07

The UAE Central Bank Governor this week gave his strongest hint yet that the emirates will shortly enter the gold market and also purchase euros as a diversification of the national currency reserves presently held in US dollars. With the US dollar ripe for devaluation this seems a timely initiative.

MKCurrent market#1473809/11/06; 20:26:15

There is a lot of talk in and around the gold media about who or what might be responsible for the gold sell off. I do not go with the theories that some European nation state is responsible for the sell-off. France has been transparent about its interests and Axel Weber put the kabosh on German sales. So if there is selling where is it coming from? Portugal was mentioned in today's Daily Market Report, but the tonnages discussed there aren't enough to create a problem -- especially with China and Japan waiting in the wings to buy whatever the official sector would like to put on the market.

So, once again, where is the official sector selling -- if there is any -- coming from?

To me, if there is selling, and I'm not competely convinced that there is, by a process of deductive logic, it could be the European Central Bank that might be the source. We have established over the last year or so that the bullion banks need a bleed-off of about 50 tonnes a month required in order to defray the possibility of a default and runaway price. In the past, it was the ECB that stepped-in to support the bullion banks when all other sources dried up. (And that support could well be delimited to German and French bullion banks from this writer's point of view.)

I would label such selling as the primary central bank fulfilling its role as the lender of last resort -- even if it were to apply that role to gold bullion loans. The ECB claims to be transparent in this regard, but in the past they have been anything but. Opaque would be a better word to describe their actions. Therefore, the ECB is suspecrt. I can't say for sure who the seller has been (if there is one), but this all has the same feel of several months ago when it was announced in arrears that it was the ECB itself doing the selling (and I was among the strongest critics of the sales.)

Who knows what would be the result in the grander scheme of things if one or more bullion banks were to find themselves in a position unable to meet the demands of their depositors. Not only would you have the probability of depositors given the heave-ho, you could have the multiplier effect of diverse market players sensing that the system could no longer meet its gold obligations. The price would run. The problem -- from the central bank's point of view -- would feed on itself as physical supplies dried up. You could have the bullion banks -- which in some cases are also huge national commercial banks -- up against the wall with massive losses to contemplate and the consequent moral hazard marching toward the central banks' doors.

So it is not beyond the understandable to think that the selling culprit, if there is one, could be the ECB.

That having been said, there is another possibility.

Too often we, as gold owners and advocates, discount the power and incentives in the paper trading community. The world we know has been turned sideways, twisted, stood up and its legs cut out from underneath it when it comes to analysing the gold market. It is all too probable that what we have witnessed the past few days is nothing more than paper traders -- the big banks, hedge funds, commodity funds, et al -- all responding to signals imbedded in their programmed trading systems.

I have mentioned this before and I'll mention it again: The computerized, black box trading programs could be a force in and of itself every bit as formidable in the gold market as central bank selling. And there's an automaticity to it that is nearly frightening to long time free market types.

We live in the age of concentrated capital and decisions being made by funds and groups which literally overwhelm the wishes and desires of the individual owners and traders like you and me. I mentioned this in my post the other day and I suggest so much again today. They look for signs and symptoms most of us wouldn't even consider to be important. They react to these signals rightly or wrongly and create a market result foreign to most of us who hold the metal physically on the basis of supply/demand fundamentals and an understanding of the political economy that goes far beyond the concepts employed in black box trading.

As it is the gold market accomplished two things of importance to the computerized gold trader (picture the borg). At $590 gold you are at the 200 day moving average -- a buy signal. At $590 gold, you have also achieved a second technical buy signal -- that provided by the Elliot Wave/Fibonacci .380 correction also at $590. So perhaps the borg will see this as a turning point. That, of course, remains to be seen. I simply point it out for your own consideration.

I see the current situation the way many have today who have bothered to post in one or another their analysis: This is a good time to buy for physical gold owners and advocates.

Maybe the above thoughts will hold water. Maybe they won't. Either or/Any all -- I was only hoping to give you something to think about.

Your comments would be appreciated.

Cometosedollar gold relationship#1473819/11/06; 20:26:23

dollar missed it's cue today or it's really sick duh
Armageddon@Mk - Who is responsible for the gold plunge?#1473829/11/06; 21:27:42

Sir Mk, you make some very good points about the European central bank and "Black Box" program trading really moving the gold market today. Some of my previous posts mentioned the European Central Banks and their 160 gold ton sell quota as well. I hadn't really thought about the program traders but it would explain the rapid gold price plunge and upward recovery as I see gold is over $590 per ounce as I am typing this.

However, another culprit for the gold plunge could be Paulson who is Secretary of the Treasury and the tools he wields through the Federal Reserve, the private Gold Cartel, other Central Banks around the world and his experience with world financial markets and the legal, semilegal, grey-area, even illegal actions he can take to supress the gold price. I have a feeling that this most recent gold plunge may be an attempt to get rid of the people on margin, and weak hands, the people that are listening to the gold experts saying gold will be $850 by the end of the year and just want a quick easy profit without understanding the basic financial reasons why they should own gold in the first place. The dollar must be maintained as the world's reserve currency. Furthermore, the mid term elections are coming up and you notice that oil,gas,gold are down and even the Iranian situation is seeming to quiet down as well. Gold, oil, gas all need to go down in price to create the illusion of a strong economy with low inflation. In fact I just saw a headline on CNN's financial web site stating "Fed's Poole sees strong economy" even though monthly job creation for the past few months is well below 150,000 which is the minimum number to offset the growth in the work force. Thirdly, its the anniversary of the 911 attacks and the supression of gold price could be a running start to the continued supression of gold during a major terror attack on American soil.

In essense, I would add Henry Paulson to the list of who is responsible for the recent gold plunge.

The reasons behind this are:
1. The American dollar must be preserved as the world's reserve currency.
2. The Midterm elections are coming and the financial people in the Bush administration want oil,gas, and gold down in price in order to create the illusion of a strong robust economy so that Republicans are re-elected this November.
3. Possible coming major terror attacks on American soil and gold must be supressed to convince people it is not a store of value in times of crisis.

However, I believe Paulson will eventually fail because of China's refusal to revalue it currency.

White HillsArmageddon#1473839/11/06; 22:04:24

Of course Paulson is in charge of the PPT . He is doing what he was hired to do. How bad is it? What are we willing to do to turn back from the economic black hole sucking us down? It is all ABOUT THE DOLLAR.The rest is much to do about nothing. White Hills
GoldiloxTO HEDGE IN A HAND BASKET#1473849/11/06; 22:13:35


Businesses who ply their trade in the extractive or natural resource industry have historically been subject to the ups and downs of the business cycle – hence they've long been, collectively, branded ‘cyclical stocks.’

Junior exploration and resource companies fulfill the function of prospecting or discovering identifiable new resources to mine. Call this "grunt work" if you will.

Miners and their Hedge Books have been in the news a great deal lately.

Miners have been making news because the sector has been consolidating. Consolidation amongst the miners has stemmed from takeovers and mergers amongst the base metals producers like Inco and Falconbridge, for example, to the precious metals producers too – ones like Goldcorp/Glamis, Barrick/Placer and more recently Barrick's hostile attempted takeover of Nova Gold. The motivation for this rash of consolidations has been sparked by rising prices for the commodities in question, increased production or run rates to benefit from these higher prices and the inevitable resulting race-to-replace diminishing, finite reserves in the ground. "Cheap and easy money" has made it more attractive to buy and finance existing proven resources than to bother working-for-a-living and actually finding new resources.

This should come as no surprise to most; there are parallels. The moral equivalent is evidenced daily with the proliferation of Texas Hold'em Poker on T.V., which has been elevated to the status of "sport" - with anxious card holders sweating over bad cards - through its overwhelming invasion of all North American sports channels.

Why bother to break a sweat when some good ole fashioned service [watching, concentration, etc.] will suffice, ehhh?

Recently, inordinate attention has been paid to miner's Hedge Books. One well documented, highly publicized case – Barrick Gold Corp. – sports a ‘hedge position’ which is short physical gold bullion, that, speaking of bad cards - by some estimates has been "off-side" [underwater but ‘unrealized’ losses for accounting purposes] to the tune of 3 billion dollars.

This hedge position was ostensibly put in place to appease banker's[?] concerns and "allegedly" entered into to mitigate risk. That such a losing position would be allowed to "fester" to such unimaginable proportions tends to give new meaning to genesis of the word Barrick, which Dr. Antal Fekete so aptly described in his recent illuminating piece titled, To Barrick or to be Barricked, That is the Question (see link).

Apart from appeasing friendly bankers, if we're to believe Dr. Fekete, it would appear that Barrick's hedge position has left a ‘foul taste’ [or a foul smell, perhaps?] in the mouths of some interested parties.

A Foul Smell Indeed

In fact, Barrick's hostile bid for Nova Gold has so rankled some in the gold world, namely GATA – that they have rallied to support Nova Gold and have even gone public urging Nova shareholders to reject Barrick's hostile takeover bid,

"GATA urged NovaGold shareholders, in an August 14 news release, "not to tender their shares to Barrick before Barrick closes its short position in gold." The organization said that Barrick's alleged short position of about 12 million ounces of gold "long has been a major suppressing force against the gold price and against the price of gold mining shares."

Don't hedges work well?

For the uninformed or the uninitiated, it might do well to remember that even perfect hedges are often "thorny places" which may pose danger to unsuspecting trespassers [or would be shareholders too, perhaps?].

TownCrierGold in Asia Rises After Decline to 10-Week Low Lures Buyers#1473859/12/06; 00:14:56

Sept. 12 (Bloomberg) -- Gold in Asia rose for the first day in five, reversing earlier losses, after its decline to a 10- week low attracted buyers who deemed the fall to be overdone.

The precious metal fell 3.5 percent yesterday, the most in three months, as investors who had bought it as a hedge against oil prices and inflation, sold after crude prices dropped.

``In the immediate aftermath of the sell-off, people will be jumping in as they see a good buying opportunity,'' Andrew Harrington, an analyst at Australia and New Zealand Banking Group Ltd. in Sydney, said. ``This may also improve the buying from the Indian jewelry market.''

``If you look at gold, we are producing about 1,700 tons of gold a year, we consume 4,000 tons, 800 tons of scrap, so it's a huge demand-supply imbalance,'' Juerg Kiener, chief investment office at Swiss Asia Capital Ltd., said in Singapore today.

Gold for delivery in December rose as much as $9.70, or 1.6 percent, to $607.00 an ounce in after-hours electronic trading...

In India, the price of the metal for October delivery rose as much as 1.1 percent to 9,107 rupees per 10 grams, or 28321 rupees ($611) an ounce, at 10:25 a.m. Mumbai time on the Multi Commodity Exchange of India

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

Dwell on this: If gold's price were to move in one direction along a straight line, it would be too late for you to convert paper to physical.


melda laureShopping season continues.#1473869/12/06; 00:51:58

"We have established over the last year or so that the bullion banks need a bleed-off of about 50 tonnes a month required in order to defray the possibility of a default and runaway price."

At $580/oz, or 18.5M$/ton, thats about a billion $ per month to fend off the "ant invasion". Those are quite small potatoes, a can of Raid would be much cheaper. Indeed, compared to 50 tons of yellow it is MUCH cheaper.

One thing is certain, the hedgies will never play the long side in physical. Scalping paper tickets is more in their line.

One hears odd things about Christopher Story's Leo Wanta affaire: lately its about a hidden crisis in clearing trade balance payments via CHIPS. More credible are the comments about too much leverage by certain gold paper longs, and the need to kill the commodities and petrol prices until the US election is in hand. If so, then expect little in the way of a new trend until late october or november; meanwhile, enjoy the free-lunch harvest, and may your yuletide be golden.

melda laureBears, Porridge, and impertinent little girls.#1473879/12/06; 02:03:37

With apologies to sir 'Lox.... sir Armageddon, apparently mr Sinclair agrees with MK.

This is an operation to dress the markets for the mid term election that has started too early.... The economy is rolling over hard and unless you lie about the figures it will become quite evident before November...

Knowledgeable interests know this and will step in on a margin wash out, which occurred today in many situations and will occur soon in gold. The transparency of what is happening now is totally clear to major interests, but has escaped the ill informed masses.

I'm waiting for the part where she goes screaming into the woods. Could it be that the president may find himself invested in Irish real estate should these "gentlemens" agreements not work out? Beyond embarassament, there are horrific collateral consequences if that awful road is taken for then perhaps other gentlemens agreements will also fail. The rule of law, (corrupted as it is) hides many unpleasant but necessary horrors that keep the unbalanced system running. Mr Spitzer doesn't investigate the CFTC silver mess, and with good reason: it is a state-sanctioned crime so regardless who becomes the sacrificial lamb, all of congress, the executive and Spitzer himself are complicit. After all, every member of congress has been briefed on GATA. Post Enron, JPM fingered everybody else. Containment may be impossible. Imagine 9/11 but with lawyers crawling over every inch of the rubble.

Better to trash paper pog than reap the whirlwind.

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KnallgoldMK #147380#1473899/12/06; 02:38:15

Not sure if it was the ECB with the selling.7 years after WAG 1 I just have a hard time thinking there are still bullion bank bailouts in Europe.And weren't the quotas mostly for pro-Gold allies anyway?

I do think its mostly the US banks/Treasury responsible for the recent big runup in the LBMA volume.The two sides are diverging.I'm also trying to read between a bankers recent lines.So yes,this drop might be a pure paper phenomenon-one possible reasoning is the unmet quota,its easy to engineer a perception of the rest of the quota is being sold now!Plus,there can't be just Another easy-profit fall rally.

I could be wrong though.

Do we know any quotas from the next WAG year btw???

Armageddon@melda laure - MK's Question#1473909/12/06; 02:57:23

Actually Sinclair also agrees at least in part with me also since he stated that the recent gold drop

".. is an old fashion politically motivated raid that will fail. It will fail because the dollar has no significant upside and gold cannot be broken unless you can build a bull market in the US dollar. The only question is when and at what price the wash out completes and the bear trap is sprung."

Note the politically motivated part that is supposed to support the Republicans up for re-election this November.

MKKnallgold, Armageddon#1473919/12/06; 03:59:54

In my view, the Washington Agreement was signed to abort runaway gold loan volume. Previous to the agreement, it was compounding in what might be described as fractional reserve lending system. Red lights began to flash in certain quarters and Rothschild led the way in calling for more "transparency" in the gold market and a new system to deal with the burgeoning gold lending market.

The same gold was being loaned and re-deposited in a way that more than one entity believed it owned the same tonnages. The greater the over all loan volume being generated by the bullion banks, the greater the attrition rate in terms of physical ounces being returned to depositors on an annual basis. If you have five per cent of depositors wanting their gold back and the overall gold volume is x tonnes, it is one thing. Five per cent of four or five times x tonnes might be a problem -- and a drain on the central banks who eventually become the suppliers. In order to keep the system from running amok, the central banks agreed to a system that limited the amount of physical that could be put on the market annually, thus capping the overall loan volume, and creating a manageable situation. Or so they hoped. . .

I suggest the European central bank as a potential seller through a process of elimination. It could be an entity out of left field, but logic points me in the direction of the ECB, if, as I say, there is actually a seller. There might not be in reality. As White Hills suggest such speculation may be academic anyway, though the situation does carry some import to gold investors moving forward.

Here's why.

The allotment for next year is 500 tonnes. If the central banks are unwilling to provide any more gold to the system than 350 tonnes, this will further shrink the lending market unless other cb's, outside the euro system, are subscribed as sellers. You have to think that Germany's decision not to sell has something to do with the U.S.' deliberate, unspoken policy to devalue the dollar so it is doubtful they are going to be pulled in as sellers next year either.

This same logic might be applied in the policy of other cb's. With the amount of flak that Gordon Brown and the Bank of England have absorbed for the British decision to sell at market bottom, others can't have failed to take note. In my view, Axel Weber's position at Bundesbank goes beyond politics and is one of principle -- that gold is an important and required aspect of individual nation state's reserves, a position, by the way, which echoes comments previously made by Alan Greenspan in the United States. This is a major change and one that is likely to have a knock on effect elsewhere as the dollar situation proceeds.

Odds are this latest drop has to do with black box trading more than anything else and the pile on effect that we have witnessed all too often in the gold market, as I pointed out in my previous post.

The rebuilding process in gold will begin on technical factors and gather momentun once the market realizes that the central banks haven't made the 2006 quota and are unlikely to make it next year as well (if that indeed is found to be the case when the smoke clears). The current agreement runs to 2009.

As you can see, Knallgold, in my view this does not have to do with gold allies coming together to deliberately push the price of gold higher. It has to do with saving the system and keeping the various bullion banks from getting in over their heads and creating a situation that the central banks could not bail out if they needed to. That is a more formidable and permant force underlying the market than the desire to push the price higher. The system, it seems, requires about 50 tonnes of central bank gold per month. The question is where is that going to come from if you get to a place where the previous sellers, or subscribed sellers, decide not to deliver?

As I say, that is the situation with which the armies of the night could very well be confronted when the smoke clears.

KnallgoldMK#1473929/12/06; 06:19:13

I see where you are coming from,this sounds logic and very practical.

Just curious,it seems you don't believe there's some kind of an ultimative goal in all these CB actions,Gold sales being at least partially a redistribution (into the pro Gold allies I hinted),leading finally into a reform of the international monetary system with Gold at its core?In short,you are not subscribing to the FreeGold theorists?I know this all very speculative so you can remain vague...

CometoseIf I were a banker tuning up my portfolio#1473939/12/06; 07:12:28

and I knew that the equities markets full to the tilt with real estate paper was going to be soft ........I would go looking for a new investment that was going to grow ....

To make that growth sector more appealing ,,,,,,,,,,I would begin selling it big time to get prices down at a bargain basement level .

My selling of my current equity sectors may take some time to make the market fall as a result of my self fulfilling prophecy selling ....which might take a couple of months .

In the meantime , all the while I can transfer these funds into the gold sector as me and my buddies continue to suppress that sector by shorting bullion futures..

This also is a great time to be buying gas which keeps nosediving toward 1.40 .... These prices may never be seen again .........when the dollar begins to deteriorate.

Armageddon@MK - Black Boxes and Paulson#1473949/12/06; 07:43:12

"Odds are this latest drop has to do with black box trading more than anything else and the pile on effect that we have witnessed all too often in the gold market, as I pointed out in my previous post.
" - MK

I guess my only comment is that Paulson might have a better idea as to what is actually inside these black boxes that determine when to buy and sell large amounts of gold automatically. For example, Paulson could direct or encourage the "massaging" of key government data that would to the ordinary person or most economists seem not significant but to the formulas inside these black boxes, they are critical turning points that would indicate buy or sell signals for gold. This is where an "insider" like Paulson can be magnitudes more effective than an "outsider" acedemic that doesn't know how and why trading is actually done.

GoldiloxBalance of Trade Wreck#1473959/12/06; 08:19:05


Not that it comes as any surprise to us, but here's the latest on the Balance of Trade out today:
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total July exports of $120.0 billion and imports of $188.0 billion resulted in a goods and services deficit of $68.0 billion, $3.2 billion more than the $64.8 billion in June, revised. July exports were $1.3 billion less than June exports of $121.2 billion. July imports were $1.9 billion more than June imports of $186.1 billion.

In July, the goods deficit increased $3.4 billion from June to $73.4 billion, and the services surplus increased $0.2 billion to $5.4 billion. Exports of goods decreased $1.3 billion to $85.7 billion, and imports of goods increased $2.1 billion to $159.1 billion. Exports of services were virtually unchanged at $34.3 billion, and imports of services decreased $0.2 billion to $28.9 billion.

In July, the goods and services deficit was up $10.0 billion from July 2005. Exports were up $13.4 billion, or 12.6 percent, and imports were up $23.4 billion, or 14.2 percent.

What is amazing about all this, you ask? Well first, it's a new record. Secondly, the dollar jumped on news of this. Totally backasswards of what would make sense, unless even worse news had already been factored into pricing. Or markets are manipulated. Remember, this is rearview economics - July figures and we're in September now.


Borrow more, get mote rich!

MKOn conspiracies and market action#1473969/12/06; 09:19:17

Treasury secretaries, finance ministers, chancellors will play politics with money and finance and use whatever tools they have at their disposal to advance the interests of their political party. That is a given.

At this moment, the finance ministers in Europe want lower interest rates. They are campaigning for it vigorously using every avenue and means open to them to make their argument. But they, as powerful as they are, have opposition in Trichet and the European central bank. If you only viewed one side of the equation -- the finance ministers' side-- you might prepare your portfolio for a lower interest rate environment. If so, you might be in for a nasty surprise if the ECB holds sway.

It is also a given that the major players with their concentrations of capital and power will endeavor to move the markets in their direction. Some will view this as conspiratorial; others will view it, as I do, as just market elements that need to be figured into the equation. If, in this example, the conspirators were to drive the price of a group of commodities lower, what would be the result? A buying opportunity for those who have a need for or believe in the long term value of that commodity. Gold is a good example in this regard. Let me assure you that the East lies in wait just hoping for lower prices.

Powerful players -- even if they sit as head of the finance ministry, the treasury department or the chancellery -- are not omnipotent. They cannot have their way with the markets without opposition. To believe otherwise is the mistake that many conspiracy theory proponents make.

How often do you believe some powerful individual somewhere hasn't thought to himself: "No matter what I do to discourage these people from going to gold, it keeps going up. What's it going to take to calm their ardor? What's a finance minister to do??" I believe that those who believe the conspirators are god-like in their powers miss a good deal of the analysis by believing the opposition resides on Olympus. In my view, if the analysis ends there, it stops short.

Little do they know how well they serve the lie by making others believe that the perceived powerful can have their way unchallenged. In my view, a group can conspire to make a market do something, but they cannot continue it for long if it is against the primary trend - not without substantial expense. Aas any student of ancient Greek literature knows, there is always a price to pay even if you dine with the gods and goddesses amidst the clouds on Mount Olympus.

We should ask ourselves one question:

If the anti-gold conspirators are so powerful, how did we get from $250 gold to $730 gold? Now let me take you back to those dark days at $250 gold when we called ourselves knights and ladies of the table and gathered here to discuss gold. How successful might we have been, if we believed even then that the forces opposed to gold were invincible?

Having said that, I do believe that there is value to understanding the forces at play in these markets including the powers in the Beltway and along the Hudson. In my view we make a mistake if we accord them status beyond mere mortals.

GoldiloxConspiracies and markets#1473979/12/06; 10:33:41


To suggest that market forces imply that no conspiracies exist (I don't think that's what you were saying) is also simplistic. GATA and others have provided strong evidence to the contrary.

After all, a conspiracy is not granted instant immortality, but is just evidence of collusion, legal or otherwise.

Is what you are saying, perhaps, that given the knowledge of conspiratorial forces and their "mortality", those who do their homework are better prepared to enjoin the battle?

If I understood you correctly, we are saying essentially the same thing, as is Sinclair.

CoBra(too)MK's - 3 latest posts#1473999/12/06; 10:55:20

A series, condensed to a rather clear and great essay to which I would like to fully concur.

As we are still in a mainly Keynesian political, economic and probably and in particular a monetary environment it seems to me that the FED is not the only culprit to remedy its ailments by throwing excess liquidity at any arising problem. This of course can not be seen as a strategy pulled off in a vacuum.

The monetary extravagance of the US and its hegememonial IOU called Dollar is still the globe's reserve currency; All major commodities are still traded in this currency unit - and there is not much around to replace this legal tender fiat paper at this time. The US and the rest of world does know it and will play along - as long as it's beneficial to their own goals. At this stage it may seem as a poker game - who dares to be first to fold?!

As our intellect and past experience clearly calls for the Dollar's demise in view of the absolute debt levels in the US of A - the charade must go on. And so it will - until the FED and its international partners in crime will succumb to a rogue wave, tempest or any transgressor in the wild West of counter party delinquencies.

The portfolio insurance of physical gold - real money - might save your day outside of the spin "mist"*!


*Mist - also garbage in German ...

Thoreauly@ MK#1474009/12/06; 11:07:09

Well said, as always, to which I would add that in my view, all state action is anti-market in that it distorts the market as a matter of course. Thus, the point is not that state action is conspiratorial; it is that, by its very nature, its conspiracies tend to be more "successful" -- i.e., long-lasting -- than those that are confined to the marketplace. After all, market monopolies are ephemeral at best (including those that result from state-issued patents), while a territorial monopoly on the use of force -- the minimal definition of the state -- exists for as long as it can do what the market by definition cannot: force its "customers" to do business with it.

Yet since each of these monopolies exists in a state of nature vis-a-vis its counterparts around the world (and the den of thieves that is the UN in no way alters this fact), each conspires against the other, distorting the market to the point that beyond its surface transactions, the market doesn't actually exist. For while free trade and protectionism are endlessly debated, insofar as all trade takes place within a global regime of centralized, fractional-reserve banking, it takes place under the "protection" -- as in protection racket -- of the state.

Thus is "globalization" nothing more than mercantilism, where the mercantilists use their monopoly money to "compete" to see who can fleece their subjects the longest (there being no citizens, properly speaking, in statist society), never mind that this, the most massive fraud in human history, must inevitably fail.

And simply put, this is what every true gold bug awaits, not because he will take any pleasure in the ensuing mayhem but because, unlike the vast majority of his fellows, he knows, with Ayn Rand, that "We can evade reality, but we cannot evade the consequences of evading reality." He knows, that is, that while the state is certainly a reality, (1) it exists primarily to DISTORT reality, (2) the more it distorts reality, the more it hastens its own demise, (3) nothing distorts reality more than the corruption of money, and (4) nothing corrupts money more then centralized, fractional-reserve banking.

So while these competing conspiracies permeate our existence, we should worry less about their day-to-day effects -- "market fluctuations" and the like -- and instead load up on as much shiny as we can, urge our family and friends to do likewise, and otherwise go about our business.

Flatliner@ msg#: 147391#1474019/12/06; 11:07:20

MK, Well said. Motivation must not be overlooked as a key element in any analysis. A stout observer, like yourself, is quick to point out that this element must be considered when looking at the current situation and your willingness to share is highly respectable.

I particularly like your (following) collection of words: "It has to do with saving the system and keeping the various bullion banks from getting in over their heads and creating a situation that the central banks could not bail out if they needed to."

If I understand this correctly, "saving the system" really means maintaining the status quo with regards to central banks printing fiat as the foundation for economic trade and maintaining public confidence that trade will continue in this manor because, as simple as it can be, the fiat has value.

"Getting in over their heads" really seems to mean that the banks have overcommitted reserves. In the classic sense, when people figure out that the deals that a bank has made have compromised the ability for the bank to make good on its deposits, there is always a bank run. If you think about this on a worldly scale where gold is the historical international currency of trade that is still the foundation upon which BigTraders depend, one has to wonder where these big customers will go to do business?

Finally, thinking about the last part – "creating a situation that the central banks could not bail out if they needed to" will make every physical gold holder think seriously about the physical gold that they hold. We all know that the enemy of central banks is the loss of confidence in the fiat that they print. The central bankers of the world have worked very hard for many years to create a system free of bank runs and quick on liquidity. It is all based on digital transactions and little rectangular plastic cards. But, what lies before our eyes is that there is another market, a gold market, that is as it has always been. To prevent a bank run where the reserves are gold, the banks MUST hold gold. This is an extremely important point and gives support to what Another wrote many years ago. The main idea is this – central banks value gold at prices way above public market prices because it buys them the right to print fiat!

There is one currency that stands to get hit the hardest if confidence is lost in it. Currently, it is the world reserve paper currency. As we all watch the world move to regional currencies, we are witnessing the loss of confidence in the US Dollar and the growth of confidence in gold. Because central banks understand that physical gold use will give strength to their fiat currency, all central banks are scrambling to not only build reserves but to import gold into their countries! It is clear that all central banks around the world have been watching how business is conducted – today – and they see exactly what Another wrote when he said that it took a combination of fiat plus a little gold to trade with oil.

Even if we, the little ants of the world, do not enjoy the right to print fiat to get the leverage of a central bank, we can still know without a shadow of doubt that what we hold is the foundation upon what the central banks need in order to keep the current system running. Without gold, confidence will be lost. If the central banks do not raise the ‘price’ of gold, those that understand these words will not give up the gold to support the fiat game.

If you do not hold gold, it is time to understand that it is the foundation upon which the world relies. This function is much more valuable then current market price.

968MK#1474029/12/06; 11:21:34

"If the anti-gold conspirators are so powerful, how did we get from $250 gold to $730 gold"

- Aren't they VERY powerfull ? The POG is already managed during the whole previous century !
- What's your opinion about US-Treasury gold ? We know the European CB's are selling some, and value the rest at marketprices, so they actually do something with their goldreserves, they use them. They even discussed if the Eurosystem need 30 or 15% goldreserves before the introduction of the EMS.
What do we know about US-gold ? Is it still there ?
Is some US-gold sold, leased, swapped, lend out, used to bail out US bullion banks,... ?
- In what way do you think the US-Treasury will use US-gold to support the dollar situation ?
- In what way do you think gold can help the international monetary system, and the global imbalances ?

MKReplies#1474049/12/06; 12:42:49

Goldilox: The world is filled with conspiracies of different shapes and sizes. Political conspiracies are of a different nature than the financial type. The financial conspirator must always be aware of the consequences it might engender. You can misdirect a market but you cannot overturn belief. To state it simply, financial conspiracies are overrated.

Cobra (too): Welcome back to the table, CB. The Keynesian notion may be the ultimate conspiracy that under lies all, but, of course, as you and I know it is doubtful that Keynes himself would have subscribed to what we see going on in the world economy today. When you consider the level of notional exposure and its geometric growth in recent years, this indeed could be a time bomb ticking away under the dollar superstructure. Others (Warren Buffett comes to mind) have issued the same warning, so we cannot be considered radical to mention it again. Portfolio insurance in the form of gold is essential to any thinking man or woman under these circumstances, as you rightly point out.

Thoreauly: Distortion to the markets is the hallmark of the system we are attempting to navigate these days. Make no mistake though: The market exists and we cannot philosophize it away -- distortions and all. I first encountered Ayn Rand as a senior in high school and she forever affected my thinking and view of the world. I am now rereading "The Fountainhead" which I haven't touched since my college days. Conspiracies by their nature are short term. For one thing, all the participants must believe in the same set of circumstances today that they did when they subscribed to the conspiracy in the first place. Only those who cannot believe that times change, or have a serious vested interest, can subscribe to a conspiracy for the long run. I can't believe, for example, that the anti-gold crowd can continue to hold "central bank gold sales" over the head of the market these days without being laughed off the internet (for example). That is a powerful incentive to check one's premises and why you might have joined the anti-gold crowd in the first place. You are right to put the day to day effects on the back-burner. They have to be factored into the overall history and not be allowed to dominate it.

Flatliner: Yes, please consider that all you say is from their point of view, not mine. They have a job to do and primary among their duties is to keep the system from imploding. In the case of bullion loans, if defaults were imminent, that run on the bank you mention could develop overnight. You are right, the central banks have no alternative but to allow the price to rise in order to assure market liquidity. I was able to predict the price of gold over the last two years nearly on the money because I had an understanding similar to what you are saying. The G-7 central banks will attempt to manage gold within a band using the same methodology they have used in the past to unsuccessfully manage currencies. The point of much of my posting today has to do with hazards implicit in managing markets. The whole scheme could blow up on you for any number of reasons including the totally left field event no one saw coming. Meanwhile, as you rightly point out, the price is still low when viewed from the point of view of the Japanese or Chinese who have much too little official gold reserves. I have said before that I think if someone were to approach either one of those countries and offer to sell them significant tonnage at double today's price they would jump at the opportunity as long as it were kept quiet so as not to disturb the markets.

968: I would say that gold has been "mismanaged" (not "managed") during the whole previous century, wouldn't you? Gold owners did very well by the gold and monetary mismanagement of the 1970s -- including the effects of the IMF and U.S. Treasury Department sales which may be testimony to just how powerful the VERY powerful really are. Gold cannot help the international monetary system and global imbalances under the current architecture. However, it will greatly help the individual owner. Central banks can use gold just as you or I do -- as a portfolio hedge, and that is essentially what Axel Weber said recently and Greenspan has said in the past. That will work for them and they shouldn't expect more. The U.S. hasn't leased gold at all, for any reason, as far as we know. Maybe you have some information that has eluded me. If so, post it. I'd like to see it. Eventually the United States might need to give up some of its gold to rebalance the system, as I've mentioned before. But this will be done at substantially higher prices and as part of a new international monetary agreement. The opportunity for the United States to use gold to support the dollar situation is long past. That went by the window in the early 1970s and the gold connection was abandoned then. As I say, there's no hope of using it now.

Thoreauly@ MK#1474059/12/06; 13:28:11

As we are so largely in agreement, let me simply say that a FREE market could in no way contain the enormous imbalances that we witness (and are forced to struggle with) today, as its sound-money basis would preclude it. So while I recognize that a market of sorts exists, it is one that is doomed to collapse and thus, in the near term, to play into the hands of those who will blame "market failure" on what is in fact the unraveling of a gargantuan statist fraud.

That said, I would be most interested in your thoughts on the NAHB/S&P graph depicted in the attached link, as it would seem to be of very highly predictive value. If so, then what, if anything could the PPT do about it?

GoldiloxConspiracies#1474069/12/06; 13:48:41


"Conspiracies by their nature are short term. For one thing, all the participants must believe in the same set of circumstances today that they did when they subscribed to the conspiracy in the first place. Only those who cannot believe that times change, or have a serious vested interest, can subscribe to a conspiracy for the long run."

I think we hold entirely different ideas of what constitutes "conspiracy". Yours seems to be tied to "events", while mine is more the traditional Websters definition - collusion of persons. That's why I added the tag line "legal or otherwise".

I think conspiracies quite often outlast particular events, as the protagonists turn their collective attention to new targets. They only collapse when one or more of the protagonists initiate actions against the others - think Rummy and his chosen "Mid-East" secular savior, Saddam Hussein.

Would we suggest that that the PPT "conspiracy" is disbanded and reformed every time they choose a new bubble to support? I don't.

Just some thoughts on a great day for posted ideas.

GoldiloxIMF Identifies Risk of `Disorderly' U.S. Dollar Drop #1474079/12/06; 15:51:56


By Mark Drajem and Shamim Adam

Sept. 12 (Bloomberg) -- A ``disorderly'' drop in the dollar is the biggest risk to world financial markets, the International Monetary Fund said, urging policy makers to prepare and act quickly when asset prices slump.

Investors are buying U.S. bonds under the assumption that the dollar won't slide, and a drop in the currency might turn into a rout as foreign investors and central banks move to cut losses, the global financial watchdog said.

"A low-probability but potentially high-cost risk to the global financial system is that a dollar decline could become self-reinforcing and hence disorderly,'' the IMF said in its Global Financial Stability Report today.

Last week, IMF Managing Director Rodrigo De Rato singled out lopsided global trade and investment flows, protectionist sentiment and high energy prices as sources of concern to an otherwise benign outlook for the global economy. The IMF says the U.S. current account deficit, running at a record rate, needs to narrow.

The Washington-based lender will announce new projections for global economic growth later this week in Singapore before its annual meeting. In April, the fund forecast an expansion of 4.9 percent in 2006 and 4.7 percent next year. An IMF spokesman said growth would be about 5 percent in 2006.

The dollar has fallen 6.8 percent against the euro this year. It was recently little changed at $1.2710 against the euro and fetched 117.6 yen.

The lender forecast that a drop in the U.S. dollar would affect different areas of the world differently.

Oil, Inflation

"The dollar's real effective exchange rate is expected to remain relatively stable across all major trading partners, but Asian currencies are expected to appreciate over the medium term while non-Asian currencies are expected to weaken,'' the IMF said.

World financial markets may experience increased volatility as risks of faster inflation, higher oil prices and a slowing U.S. economy are not sufficiently priced in, the IMF said.

Global equity, bond and commodities markets plunged in May amid concern central banks will need to do more to keep inflation from accelerating. The threat of slowing growth may increase investors' aversion to risky assets, the lender said.

"There are risks to the global economic outlook that have tilted to the downside,'' the report said. "International financial markets could undergo more severe corrections, especially because markets appear to be pricing in the baseline growth scenario with little provision for risk.''

U.S. Slowdown

De Rato warned last week there were ``clouds on the horizon'' for the global economy. Still, the outlook for world growth and inflation is one that is a ``continuation of favorable developments,'' even as oil prices and a U.S. slowdown pose risks, the IMF said in today's report. That's a scenario that will lead to healthy corporate earnings, low default rates and improving sovereign finances, it said.

"Global growth remained strong and continued to become more balanced, providing a broad underpinning for financial markets,'' today's report said. "Financial sectors in many countries are in a strong position to cope with any cyclical challenges and further market corrections to come.''

Emerging-market stocks in May had their biggest monthly drop in more than three years as the prospect of higher interest rates and a slump in commodity prices prompted investors to pull out of markets from India to Russia. Stocks in Europe the same month had the worst performance in three years, while those of the U.S. dropped the most in almost two years.

Risk Management

Governments must improve economic policies and reforms, while investors should increase risk-management strategies, to limit volatility and mitigate the impact of risks to growth, the IMF said.

"Supply shocks and/or an increase in geopolitical tensions could lead to a renewed retrenchment in risk appetite,'' the IMF said. That "would likely increase volatility, force risk premiums higher, and erode business and consumer confidence, thereby testing the resilience of the global financial system.''

melda laureConspiracy to aid buyers of Physical... (smirk)#1474089/12/06; 15:55:44

Yes, something like that sir Lox. Sir Armageddon, I have a serious problem with the idea that ALL the present activity is WHOLLY directed towards the upcomming election. But in any case that is a short term issue; the long term issue of imbalanced trade (aka the dollar problem) is a thornier problem begging for a gold plated solution.

So in that sense, the "ultimate end" insofar as a strategy is evident, is vastly higher gold prices supporting a free gold international trade model. There is of course some greater plan in the minds of giants, but that is rather beyond the scope here. Discerning the near term trend (and its causes) is trader talk. I would rather just take the "ante" and laugh at the casino; true, they dont play fair, but since they've been so kind as to facilitate my paper conversion I wont complain too forcefully.

The christmas special wont last forever.

USAGOLD Daily Market ReportPage Update!#1474099/12/06; 16:53:02">
The Daily Gold Market Report has been updated.

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

TUESDAY Market Excerpts

September 12 (from MarketWatch, Reuters) -- As some investors saw Monday's dramatic sell-off as a good buying opportunity bargain hunting gave gold a brief boost in the morning, but the rally soon fell apart due to moves in other markets and a fresh round of speculative selling, trading sources said

"The story continues to be one of oil and the U.S. dollar," said Bernard Hunter, a director at ScotiaMocatta in Toronto. Oil failed to sustain a brief rise above $66 a barrel. By midafternoon, crude had fallen to a six-month low below $64.

"The precious metals markets are taking it on the chin," said Dale Doelling, chief market technician at Trends In Commodities. "From a technical perspective, the markets may see a modest bounce over the next couple of trading days, but the odds favor a retest of the June lows," he said.

The dollar traded slightly higher against major foreign currencies Tuesday, as investors shrugged off a record U.S. trade deficit number and instead focused attention on the possibilities of further interest rate increases in the U.S.

The nation's trade deficit widened by a larger-than-expected 5% in July to $68.0 billion, the Commerce Department said.

Against this backdrop, COMEX December contracts fell $3 to close at $594.30, retreating from an earlier high of $602.50 to close at its lowest level since late June. Prices fell $52.60 in five-straight trading days.

Overall, "trading conditions are set to remain volatile particularly with the scale of economic data coming out of the U.S. this week as the dollar and oil still remain key factors in determining gold's direction short-term," James Moore, an analyst at in London, said in a note to clients.

Goldman Sachs said the recent slump in commodities, particularly oil, is excessive and provides an attractive chance to buy.

It added there was little threat of a recession, though it said three consecutive months of declines in its indicators underscored the need for a cautious medium-term outlook on commodities demand.

In other news on Tuesday, four men shouting Islamic slogans tried to blow up the U.S. embassy in Damascus but their car bomb failed to explode and Syrian security guards killed three of them in a shootout. No U.S. diplomats were hurt. The state news agency SANA said a Syrian guard was killed and 13 people were wounded, including two Syrian security men.

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

The Invisible HandAnd if we cannot attract enough capital from foreigners ...#1474109/12/06; 18:10:24


BOSTON (MarketWatch) -- Persistent budget and current account deficits are not a problem in the short run, top White House economic adviser Edward Lazear said Tuesday.
"In the short run, it's important that we continue" to attract capital from foreigners, he said.

The Invisible HandMK and CoBra #1474119/12/06; 18:24:34

The POG is down again, isn't it?

Why do you continue to be biologised by the bail-out syndrome?

The gold containers managed to bring gold down from
$850 to $250.

What's the relevance of the journey from $250 to $720 (now $580) within 35 years of gold containment vis-a-vis all other explosive evolutions of the dollar-paper?

Why do you keep thinking that gold bugs will never be able to claim victory over the paper-gold titans?

Can you still not understand that the change can and will come from the HETEROGENE titan-ic complex which is managing the International Financial and Monetary System?

The Invisible Handgold containment = also currency management #1474129/12/06; 19:02:47

EU supports IMF reform,
but tells fund not to rush it
Helsinki - The EU on Saturday backed plans to give poor and rapidly developing countries more voting power in the International Monetary Fund (IMF) as the lender seeks to adapt to a new world economic order.
The ministers issued a statement saying a second stage of reform should base countries' voting weight on GROSDS DOMESTIC PRODUCT PLUS HOW OPEN THEY WERE TO TRADE AND IN FINANCE.
The ministers said they backed giving the IMF more of a role in surveillance of economies and, in particular, currency policy.


Since it is the US of A and the dollar which have a dominant position in voting, it will always be the US of A and the dollar which will impose "their" dollar-norms as to the meaning of "being open in finance".

It is still not the invisible hand but the dollar-regime which decrees the exchange-rate of other currencies vis-a-vis the dollar.

The gold containers are thus also managing the currencies vis-a-vis the dollar.

The Invisible HandMost oil states (officially) faithful to dollar-reserves#1474139/12/06; 19:24:44



Other Gulf Arab central banks are studying the euro's growing allure as a reserve currency. A Qatar central bank official said in April the bank was buying euros,
which could eventually account for up to 40 per cent of reserves.
But the Saudi Arabian Monetary Agency (Sama), the region's wealthiest central bank, reiterated that there would be no change in its reserve policy.


Perhaps Saudi Arabia wants first to see what happens to the Gulf Cooperation Council (GCC) single currency.

canamamiRecent action confirms....#1474159/12/06; 20:20:05

...the only safe way to hold gold is as unencumbered physical, as a part (not all) of one's portfolio. Shares, and share and commodities options, and commodities contracts are too vulnerable to manipulation and getting it "wrong" short-term. Even unencumbered physical exposes one to some risk, as the paper price determines what one's physical is worth on the open market if one (or one's estate) must liquidate. However, physical gold is the portable hard asset par excellance, and is a good hedge against currency debasement and currency paradigm shifts. Gold also doesn't become a bad debt.
TopazCurrent drop.#1474189/12/06; 21:26:39

Gee, you take your eyes off these things for a few days and wham! they whack it good.
What used to be the Velvet Glove of Management has given way to the Iron Fist of Desperation I think if the 3mo is any indication.
The next FOMC on the 20th could see a 50bp rate cut which in turn could turn DX decidedly south should be giddy-up for our PM's about then I think.

968Gold industry aflood with dollars#1474199/13/06; 02:53:00

Dollarloans provided to the goldindustry by the $-cartel, and their colluding banks keeps the goldmines working in favour of the dollar. High loans and low prices forces them to mine as much gold as they can, which can be used by the $-cartel to manage the POG, and the distribution of the mined gold.
The Invisible HandKa-Poom and DDPE#1474209/13/06; 03:52:35


(Ka-Poom theory is the hyperinflation predictor)

In the Debt-Driven Political Economy (DDPE), the market events which occur ARE NO MARKET.

Ka-Poom is a big covered swimming pool in which surf waves are artificially being created.

Like the 9/11 thing, most people will never believe this.

The concept of DDPE is so all-encompassing that nobody thinks about it.

However when shocks disturb the DDPE in its management of everything, then this "everything" is again being referred to as "the market".

We have therefore to conclude that the invisible hand cannot be timed through a "timing" method, precisely because there is NO MARKET and because the DDPE operates according to its own -separate– logic which is dependent upon the whims of the politicians.

Sometimes, politics is anticipating, sometimes it decides not to be anticipating, then it anticipates the wrong thing etc.

How many different stock-exchange, financial, and economic theories did we have in the last fifteen years? Those theories turn with the political winds and thus not with the "essence" of the "market".

Paulson has been politically chosen because of his qualifications to run the DDPE.

Our masters want the system to continue standing on its head. They want the DDPE, which prevents market events from occurring, to serve the market-events. Nonsense, of course!

The crude political reality is of course the other way around. Economic activity constantly has to adapt itself to the hyper-changing whims of our masters and their so-called laws.

Nobody wants to understand this. Hence, everybody continues with her "wise" advice: "Buy some gold, … just in case".

The DDPE will probably still continue to exist for quite some time. But "changes" will have to be introduced in order to account for Freegold and in order to stop talking as if we were living in a "market" economy.

Everybody continues thinking there's a temporary conspiracy. Nobody understands that everything is part of the "system".

Thus the Ka-Poom man has the correct vision: Don't trade gold-metal, even if it falls to $500 - $400.

The DDPE-system has NO timing models.

This explains the suddenly resurfacing of the discussion of the Rubin/Summers policies and their effect on the price of gold (POG) and the Gibson paradox.

Nothing market driven, everything Politically Economised and focused on gold (and interest rates).

Goldbugs convincing themselves that this has been relegated to the past by the so-called market forces? How could that be? THERE IS NO MARKET!

If there had been a gold market after 1971, then the POG should at least have accounted for monetary depreciation and should be at $2000/Oz.

It's now THIRTY-FIVE YEARS that there has been NO MARKET FOR GOLD.

In those 35 years, the DDPE has behaved more and more perfectly. Once the DDPE will no longer behave, Freegold will be a fact. That's why the DDPE can also be referred to as the dollar-International Financial and Monetary System (IFMS).

A system is a game and once the players do no longer follow the rules of the game, the system breaks and new rules enter into force.

The breaking-point could be Iran being admitted to the Shanghai Cooperation Organization.

Another element which could lead Freegold is in the hands of the economic "psychology" of the sheeple. When their psychology will lead them to conclude that danger is coming and that they are in trouble because they don't have any savings, a confidence shock could arise.
As a result of this shock, the central banks could find themselves unable or unwilling to continue synchronising their policies and let gold, the dollar IFMS and the DDPE go.

On this other element, see my

The Invisible Hand (8/30/06; 23:45:29MT - msg#: 147071)
Gold will explode when the sheeple will awake!

MatthewGold calculator#1474219/13/06; 05:39:47

Useful site for calculating value of bullion; scroll down the first currency column to gold etc..

ge1 Barrel crude oil = 1 Barrel gasoline#1474229/13/06; 05:50:24$WTIC:$GASO

Gasoline is quoted per gallon, while crude oil is quoted per barrel. Since, 1 American barrel = 42 American (US) gallons, when the oil/gasoline ratio is about 42, it means refineries are practically giving away gasoline. Greenspan might have characterized this observation as a conundrum wrapped in an enigma!?
The Invisible HandIf China does not want to submit voluntarily to dollar intervention, #1474239/13/06; 05:56:12


BIS Quarterly Review, September 2006
The changing composition of official reserves gold

SNIPS (Disclaimer: I had to copy this by hand and then type it – errors are not impossible)

The liquidity and sophistication of the euro financial market are fast approaching those of US of A dollar market. This helps to strengthen the position of the euro as a possible alternative to the US of A dollar in official reserves.
pp. 30 -31
Historically, the bulk of reserves were held in gold. This has changed radically over the past three decades. Gold holdings, VALUED AT MARKET PRICES (emphasis mine), fell from about 60% of total reserves in 1980 to a low of 9% in 2005.
Today, the vast majority of reserves are invested in foreign currency assets, mainly deposits and securities.
Whereas foreign currency assets totaled $4.3 trillion at end-March 2006,
gold-holdings totaled only $0.5 trillion (AT MARKET PRICE)
The management of gold reserves has changed over time. Initially, they were segregated from other assets and physical holdings of gold were left unchanged even as prices fluctuated and reserves accumulated. Then, starting in the late 1980's, some central banks sold part or even all of their gold. The sharp rise in the price of gold in 2005-06 helped to boost gold's share of reserves above 10% in early 2006.
Nevertheless, physical holdings of gold fell further, continuing to contract at a rate of about 2% a year.
The shift from gold to foreign currency assets was part of a broader reallocation towards assets PERCEIVED (my emphasis) to offer more attractive risk-adjusted return.


Why is it that the gold part of the reserves decreased from 60% in 1980 to 9% in 2005?

Because more currency is taken into reserve and because the price of gold (POG) is obscenely low.

Is the shift from gold to foreign currency assets part of a broader reallocation towards assets PERCEIVED (my emphasis) to offer more attractive risk-adjusted return, as the BIS Quarterly Review alleges, or is it that there are more than enough reserves which can if necessary be catapulted like a rocket through marking them to market (MTM)?

Philip D. Woolridge, the author of the report, continues to frame reserves as instruments for emergencies. Woolridge forgets that foreign reserves can be used by the financial industry to "intervene" in currency exchange rate markets.

When the dollar-International Financial and Monetary System (IFMS) will have exploded, the question will concern the proportionality or disproportionality of the gold parts in the respective central banks’ reserves.

EU –12,000 tons
US of A - 8,000 tons
This is FIFTY PERCENT DIFFERENCE, also after the reserves being MTD-d.
And I am not yet talking about China and Japan. But this disproportionality is also valid for the dollar-volume which is spread over different economic blocs which are, we are told, together managing the IFMS.

The IMF would then have a "surveillance" role instead of a role as intervening financier (money changer).

But how the heck will all these imbalances be corrected and what will happen to the US of A which is itself the producer of the (world) dollar reserve product and which can produce its own reserve?

Woollridge concludes that the position of the euro as a possible alternative to the US of A dollar in official reserves is being strengthened.

China will never accept that the dollar breaks its centrally led financial-monetary system in order to achieve a yuan exchange-rate which pleases Washington so that Washington can determine what happens in the expanding Chinese economy.

Next week-end the IMF meets in Singapore. Currency exchange rate management (and disproportionally increasing reserves) will have to be discussed. The distribution of votes will also be discussed, it being clear beforehand that it is the US of A which will determine the criteria on the basis of which the votes will be redistributed. Those criteria will be: open trade and finance.

If China does not want to submit voluntarily to dollar intervention (regulation, control, dominance, etc.), it is useless for the Chinese to travel this week-end to Singapore.

This is a ticking time-bomb.

The Invisible HandNow we know#1474249/13/06; 06:15:47


IMF official says "RESOURCES NATIONALISM" could backfire

While OPEC ministers and energy experts were trying to seek ways to protect their own interests under the precondition of stabilizing the international energy market, an IMF senior official voiced here on Tuesday a stern warning: resources nationalism could backfire.
Such oil producing countries as Venezuela, Bolivia, Chad, Algeria and Russia were adopting resources nationalism to seek more profit and control rights from multinational corporations, which drilled for energy in their oil and gas fields, the high-profile IMF official said.
Rato said that domestic fuel prices in all countries should be set to reflect economic and social costs, and to promote a response to an appropriate demand

The Invisible HandComplex contradictions#1474259/13/06; 06:44:45

The Invisible Hand (9/13/06; 03:52:35MT - msg#: 147420)
Ka-Poom and DDPE
Another element which could lead Freegold is in the hands of the economic "psychology" of the sheeple.

Russia has no plans to transform the Shanghai Cooperation Organization (SCO) into a military bloc, Russian President Vladimir Putin said at a meeting with foreign political scientists last Saturday, Interfax news agency reports.
"We are not going to turn the Shanghai Cooperation Organization into a military-political bloc. It is an open organization," he said in answers posted on his official website on Wednesday.
While tackling issues related to SCO ENLARGEMENT, it is necessary "to take into account a COMPLEX LINE-UP OF FORCES IN ASIA AND CONTRADICTIONS BETWEEN VARIOUS COUNTRIES," he said.


Could one of these contradictions relate to the fact of whether or not, they are MTM-ing their gold reserves?

But this is no joke. The MTM-concept is even appearing in Barrick articles.

Although Tumazos noted that, "in effect, ABX sold 10% of its reserves for 4% of its enterprise value," nevertheless, he called it "a savvy move to marshal cash as ABX's remaining negative mark-to-market in its 12.3 million ounces total hedge position is near $4 billion."

Complex contradictions, said you?

Psilver Psychedge#1474269/13/06; 07:30:54

When crude oil is "cracked" to turn it into gasoline... the higher viscosity (density) crude becomes lower viscosity (density) gasoline. Typically 1 barrel of crude (42 US gal) "in" will yield the equivalent of 50 gallons of gasoline "out"... (Sorry for off topic posting).
gePsilver Psyched#1474279/13/06; 09:09:01

Thanks for the correction. I did not use as many words as I should to convey my message leading to misunderstanding. My point is that refinery margins are being squeezed. One example of refinery margin which is the widely used is the "3-2-1 crack spread," which assumes that 3 barrels of crude oil can be processed into 2 barrels of gasoline and 1 barrel of distillate fuel oil. This implies 1 barrel oil --> 2/3 barrel gasoline, although the yield is said to depend on the type of crude and refinery. Actually there are three variables in this equation, and, unfortunately I do not know a handy site with a chart in the net that I can link, so used the simpler oil/gas ratio. This may not be very off-topic since some people suggest that oil and gold prices are somehow linked.
GoldiloxBrazil, South Africa, and India strengthen ties#1474309/13/06; 10:28:06


Brazil and India have signed multi-million dollar trade deals to improve co-operation between the two major emerging economies.
The agreements were signed at the start of an official visit to Brazil by Indian Prime Minister Manmohan Singh.

The deals involve technology and alternative energy source development.

Brazilian President Luiz Inacio Lula da Silva said strengthening ties formed part of a vision to create a more just economic world order.

The new agreements came on the eve of a summit between India, Brazil and South Africa.

The summit in the capital Brasilia is aimed at improving links between what are three of the world's largest emerging economies.

Mutual praise

Mr Singh had nothing but praise for his host whom he described as a great statesman and a champion of the world's emerging economies.

For his part, the Brazilian president said trade between the two countries had grown from $400m in 1999 to more than $2bn in 2005.

The two men will be joined on Wednesday in Brasilia by the South African President, Thabo Mbeki, for the first summit of the so-called India-Brazil-South Africa Dialogue Forum.

The forum was created in 2003 to improve ties between the three countries.

For the Brazilian president, who is in the midst of a re-election campaign, the summit gives him an opportunity to get across to voters at home that his vision for a Brazil on the international stage is very much alive.


The players on the globalism stage want more autonomy in their trade relationships, and perhaps less control by "first world" financiers.

GoldiloxAmazonian tribe protests at oil pollution#1474319/13/06; 10:34:40


Indigenous communities of the Peruvian Amazon are stepping up their campaign against oil companies, as the BBC's Dan Collyns reports from the capital, Lima.

Some feel the rights of indigenous populations are not taken seriously

Peru's Amazon state, Loreto, takes up almost a third of the entire country.

A vast expanse of rainforest divided by tributaries of the Amazon river, even its main city Iquitos is only accessible by boat or plane.

But its inaccessibility has not discouraged oil companies from hunting for black gold, and they have been doing so for the last 35 years.

During that time, the Achuar people, who have lived in harmony with their environment in this part of western Amazon for thousands of years, say their way of life has been systematically violated.

The Federation of Native Communities of the Corrientes' river (FECONACO) says that for every barrel of oil there are nine barrels of contaminated water produced as a by-product - a total of more than a million barrels a day.

The water contains high concentrations of hydrocarbons and heavy metals, like lead, cadmium, mercury and arsenic.

The Achuar people say it is destroying the fragile eco-system in which they live, killing the fish and wildlife, contaminating their water source and seriously damaging their health.


In addition to the challenges of "resource nationalism", the corporations and local governments continue to face challenges from indigenous peoples claiming damage from the extraction activities. Lots of tugs on the old apron strings!

Resource extraction is not getting any easier.

Psilver Psychedge#1474329/13/06; 10:35:59

Yes, refinery margins are definitely being squeezed. I am more than a bit nervous re:refiners as there are global refineries coming on stream in the next couple of years. If the world has indeed reached "peak oil", then all this new refinery capacity translates into excess refining capacity which will drive the cracking spead way down. I suspect that should that occur, the US refiners would probably lose profitability faster than offshore locations. So, holding drillers makes more sense than refiners at the moment assuming that oil will become less plentiful (assuming you are paying equally to the present value of both industries). Of course, imo...
mikalInternet gaming for gold prize#1474359/13/06; 12:18:25

Reality-TV Guru Mogul Barnett Mines Multimedia Gold - Hollywood Reporter - 9/13/06 By Carly Mayberry
Wed Sep 13, 1:40 AM ET
LOS ANGELES (Hollywood Reporter) -
Excerpt: "What began for reality-TV producer Mark Burnett months ago as a mining expedition deeper into the online world is set to become Wednesday a race for $2 million in gold, with the success of his first interactive reality game, "Gold Rush," at stake.
The seven-week contest, which requires competitors to solve several pop culture trivia challenges embedded within CBS television programming and commercials and spanning across magazines, radio, song lyrics and the AOL Web site, was created through a three-way collaboration among Mark Burnett Prods., AOL and CBS.
Unlike Burnett reality projects like "Survivor" and "The Apprentice," which involved casting for their participants, "Gold Rush" is a free-for-all -- anyone over age 18 with an Internet connection is eligible to play.
"These days, you can't go into a workplace without finding people IM-ing or on the Web, therefore the question is: Are more people receiving broadband 9-to-5 or watching TV at night?" Burnett asked. "These activities prove we're heading into a different type of primetime, and the question for me was what to do.""
Mikal - Seems like a lot to ask for just to get into the qualifying round. But considering the prize, many will enter and many more will be tainted by some measure of lust for the "barbarous relic"! ;)

mikalEnvironmental remediation with a reward#1474369/13/06; 12:27:10

Scientists Mine Gold With Alfalfa | ABCNews | Sept 5, 2006
USAGOLD Daily Market ReportPage Update!#1474379/13/06; 15:27:56">
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

Gold up after 6-session downdraft

September 13 (from MarketWatch) -- Gold futures closed higher Wednesday as a weaker dollar and stronger crude price gave traders the impetus to step back into the market after five days of losses shaved 8% off the metal's value.

"At the end of the day, we know that the major fundamentals have not changed," said Jon Nadler, investment analyst at bullion dealers Kitco.

"Absent oil and geopolitics, life in the gold market goes on -- albeit at perhaps 'saner' levels than before."

The COMEX December contract closed up $2 at $596.30, having earlier touched a high of $600.50. The contract had seen prices fall by a cumulative $52.60 over the prior five trading days, leaving it at its weakest level since late June on Tuesday.

Merrill Lynch strategist Richard Bernstein said recent dollar strength, sliding oil prices and lowered inflation expectations have all taken the shine off gold. However, while Merrill has never been a firm backer of gold, the investment bank has thought for some time that part of a portfolio should be in gold or gold shares as a hedge against inflation and political risk, said Bernstein.

"We think the hedge is still worth considering," he said.

At TheBullionDesk, analyst James Moore agreed.

"While some are calling the current correction the end of gold's bull run, little has changed in the longer-term picture with the market still seeing historically low mine output," he said.

Moreover, "geopolitical unrest and a questionable future for the U.S. economy make gold a viable safe-haven/anti-inflationary hedge," he said.

The dollar was last trading down 0.2% against the yen and down 0.1% against the euro.

Oil futures were higher for the first time in eight sessions, as traders weighed the latest government data on supplies, showing a bigger-than-expected decline in crude stocks...

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

TownCrierGold in the mind of a recent Nobel Prize winner#1474389/13/06; 16:03:40

Excerpts from a recent biographical sketch of Robert Mundell:

When Robert Mundell received the Nobel Prize in economics in 1999, the Royal Swedish Academy of Sciences cited his "uncommon-almost prophetic-accuracy in predicting the future development of international monetary arrangements and capital markets" back in the 1960s. He's widely regarded as a pioneer of modern international economics....

Although the Canadian-born economist's work during the 1960s has now become mainstream, a number of policies that he's advocated at various times have not been embraced by the vast majority of his peers. These include his call for a return to a gold standard when U.S. inflation hit double digits in 1980; a return to the post World War II (1946 71) Bretton Woods fixed exchange rate system, modified to correct its defects; and the creation of a global currency...

...Actually, if Mundell could have his way, the entire world would be one big optimum currency area, sharing a global currency. But he admits that political rivalries make it difficult for this to happen because a necessary condition for the creation of a monetary union-global or otherwise-is the creation of a security area. He believes that, in a world where war is a possibility, an international monetary system based on a fiat world currency wouldn't work unless it were backed by one or more of the precious metals. Gold could still be used as a reserve asset in a reformed international monetary system in the 21st century, but it would be a far cry from the international gold standard that prevailed before World War I.

Mundell would be thrilled if the governors of the IMF would give more thought to finding an arrangement to get back to the goals of Bretton Woods. "There was nothing fundamentally wrong with the kind of monetary system we had in the postwar world."

It was a system in which other countries fixed their currencies to the dollar, while the U.S. fixed the price of gold. Gold was convertible but only for foreign monetary authorities. Mundell regards it as having been an ingenious accommodation to the reality of the United States as an economic superpower. In that regard, he quotes Joan Robinson as having once called the IMF an "episode in the history of the dollar."

Mundell argues that the system broke down in the early 1970s because the U.S. rejected the idea of increasing the price of gold-and thus made gold's relationship with the dollar untenable-not because fixed exchange rates were wrong. In fact, had the U.S. revalued gold, the system could have sailed along for another two or three decades.

Mundell believes the best way for a smaller country to achieve monetary stability is to fix its currency to a large and stable currency area. He also feels that the IMF is playing a "divisive role" by encouraging countries to move to flexible exchange rates, "balkanizing the monetary world into a ridiculously large number of tiny currency areas."

^---(full sketch at url)---^

Painted with such a broad brush, it's difficult to tell presicely where Mundell would choose to firmly stand in the real (rather than theoretical) world of geopolicial economics.

I am inclined to think we would have plenty to lock horns over, affording Mundell an opportunity to see further by standing on the shoulders of giants. That is to say, Gentle Reader, that you must not let yourself think for a minute that the "freegold" MTM reserve paradigm has diminished stature simply because you yourself have been treated to an insider's view of its evolution and development through this unique window we have offered here at USAGOLD featuring ANOTHER, FOA, and their supporting cast through the years.]

And while this missing details of Mundell's actual viewpoint are the make-or-break element of any such designs, this sketch is nevertheless important to the casual reader who would otherwise be overwhelmed and lost in discerning the meaning of such details. At a minimum, this article can help the casual reader gain a general appreciation for the fact that gold is indeed an important international asset -- as it can be seen residing prominently in the mind of a very recent Nobel Prize winner.


GoldiloxMundell's grasp of the obvious?#1474399/13/06; 18:06:48


"Mundell argues that the system broke down in the early 1970s because the U.S. rejected the idea of increasing the price of gold-and thus made gold's relationship with the dollar untenable-not because fixed exchange rates were wrong. In fact, had the U.S. revalued gold, the system could have sailed along for another two or three decades."


Well, the system did sail along for another three decades. It's the coming ones that look particularly shaky. He says nothing about the huge imbalances created by the reserve currency monopoly. I wonder who butters his bread?

Goldilox"Nobel Prize" in Economics#1474409/13/06; 18:16:32

"In 1968, Sveriges Riksbank (Sweden's central bank) instituted this Prize in memory of Alfred Nobel, founder of the Nobel Prize. The first Prize in Economics was awarded to Ragnar Frisch and Jan Tinbergen in 1969."

Not really a Nobel Foundation prize, but a look-alike sponsored wholly by the Swedish Central Bank.

I'll probably draw criticism from "banking fans" for this, but having a Central Bank sponsor this award is a bit of "the fox watching the hen house."

The Invisible HandIMF's De Rato lacks any credibility#1474419/13/06; 18:16:59

The housing market in the US cooling faster than anticipated, he says.

But he does not make any reference to the fact that the US of A artificially popped up its housing bubble to dangerous proportion.

And this dollar-freak is president of an international institute (and, like the central bankers who mark gold to market, is paid for his job with stolen tax money)?
The International Monetary Fund (IMF) has warned that a GLOBAL SLOWDOWN is looking more likely because of high oil prices and a cooler US housing market.,_i_rssPage=ff3cbaf6-3024-11da-ba9f-00000e2511c8.html
Mr Rato said high oil prices increased the risk of a worldwide ECONOMIC SLOWDOWN.
"With the housing market in the US cooling faster than anticipated, there is a risk of an abrupt slowdown in the US, which could derail the GLOBAL EXPANSION," he said.
Mr Rato warned oil producing-countries that oil nationalism and the recent trend towards increasing taxes on international energy companies would eventually backfire.

He's even confusing global slowdown with global expansion.

FlaccusGoldie#1474429/13/06; 18:37:10

The real question is not who butters his bread (at the moment its China). Its at what price would the system have remained liquid
NedHere's one of my mentor's saying's......................#1474439/13/06; 19:12:37

"Our pending energy supply contraction= no economic growth= no debt service= chaos"

What this boils down to is this, if "peak oil" is here, it's over. If true, gold goes to the moon because US has the most to lose, peak oil = peak USA.

Identifing peak USA = recognizing peak USD

Hello Peak-Oil = Hello Peak USA

Have a nice after-life.

ArmageddonChinese Yuan Full Convertability in 2008?#1474449/13/06; 19:13:23

The following article states that the Chinese yuan may be fully convertable in 2008. I believe this further strengthens the arguement for a higher gold prices in the years ahead since the Chinese Central Bank is going to need at least 3,000 tons of gold to back up its fully convertable currency.

China to Start Yuan Convertibility Trial in Tianjin (Update2)

By Lee Spears and Jake Lee

Sept. 13 (Bloomberg) -- China will allow investors in the northern city of Tianjin greater freedom to buy and sell currencies as part of moves towards a fully convertible yuan.

China's State Administration of Foreign Exchange has approved Tianjin's plan for ``limited convertibility'' of the yuan at the Binhai economic area, the city's mayor Dai Xianglong said at a conference in Xianghe, outside Beijing. Tianjin will adopt a ``floating foreign exchange mechanism,'' he said.

The comments by Dai, a former governor of the People's Bank of China, add to signs that the government will use a more flexible exchange-rate to cool the world's fastest-growing major economy. A senior Chinese legislator today said 2008 may be ``the right time'' to allow full convertibility of the currency.

``China's reforms are always gradualist and now we're seeing a pilot program along the road of yuan reforms,'' said Wang Qing, head of China strategy at Bank of America in Hong Kong. ``They're creating an experiment in a physical environment that shows they're on the direction of moving the yuan to be convertible.''

Since ending a peg to the dollar on July 21, 2005, China's central bank has allowed the yuan to rise about 2 percent. The People's Bank of China's ability to control the market would be reduced were the yuan more widely convertible. The currency can now only be bought or sold for foreign trade purposes or to fund approved capital investment projects.

``Ultimate Goal''

``The ultimate goal is to make the yuan fully convertible,'' Cheng Siwei, the vice chairman of the Standing Committee of the National People's Congress, China's parliament, said at the forum. China's cabinet plays a greater role in setting currency policy than its parliament.

A more flexible yuan will help the central bank use its ``monetary policy instruments more effectively,'' the International Monetary Fund said Sept. 11. The fund is meeting this week and next in Singapore. The Group of Seven nations, which told China in April to let the yuan appreciate, also meets this week in Singapore.

U.S. Treasury Secretary Henry Paulson may use a speech today to pressure China to allow faster currency gains to curb its exports and help cut the U.S. trade deficit. Paulson will speak at the Treasury Department at 11 a.m. New York time.

Trading Band

Since ending the currency's peg, the central bank has allowed it to float with reference to a basket of currencies including the euro, yen and South Korea's won. It is not allowed to fluctuate more than 0.3 percent against the dollar from a rate set daily by the central bank.

The China Securities Journal said today China may widen the yuan's trading band, citing experts it did not name. Larger fluctuations would discourage inflows by increasing the risk for speculators, according to the Journal, affiliated with state-run news agency Xinhua.

The People's Bank of China, the country's central bank, said it has no plans to release any statement on a widening of the trading band for the yuan

``We have no press releases or statements for the moment,'' said an spokeswomen in Beijing, who declined to be identified.

The yuan weakened 0.03 percent to 7.9486 against the dollar as of 5:30 p.m. in Shanghai, according to the Web site of the China Foreign Exchange Trade System.

``There's a consensus that Asia including China will perhaps need to do more in order to address the trade imbalances and the global imbalances,'' said Tai Hui, an economist at Standard Chartered Bank in Hong Kong.

Trial Zone

The Binhai zone in Tianjin is replicating the financial services pioneered by Shanghai's Pudong financial district and Beijing's Finance Street area to attract overseas companies including HSBC Holdings Plc. Under World Trade Organization rules, China must let overseas lenders tap the nation's $1.9 trillion in savings through lending and taking deposits in the local currency by Jan. 1.

China Construction Bank Corp., the nation's fourth-largest lender, said it's been invited to take part in Binhai's trial relaxation of currency controls, the bank's chairman Guo Shuqing said in a Sept. 11 interview.

Companies will be granted ``preferential treatment'' to exchange ``small amounts'' of local currency into U.S. dollars for investment purposes, Guo said. The program will be extended to individuals later, he said, without giving a timetable.

The city will also adopt a ``floating foreign exchange management mechanism'' that is ``determined by market supply but regulated,'' Dai said, without giving details.

To contact the reporter on this story: Lee Spears in Beijing at This email address is being protected from spambots. You need JavaScript enabled to view it.
Last Updated: September 13, 2006 06:27 EDT


The Invisible HandIMF news from the British Press#1474459/13/06; 20:29:03,,1872061,00.html
IMF warns that Britain's over-valued housing market is vulnerable to further increases in interest rates,,1872002,00.html
· Benn ties extra funding to softer rules for poor states
· Wolfowitz's hard line on corruption also attacked
China is vastly more important than it was six years ago during the last global downswing
This is the usual autumn meeting that takes place before the annual meetings of the International Monetary Fund and World Bank but the fact that it is in Asia gives the opportunity for the whole financial community to focus on what is happening in the region. Henry Paulson, the US Treasury Secretary, WILL GO ON TO CHINA after the meetings.
My own view, for what it is worth, is that the more likely trigger for the next downturn will be something happening to house prices worldwide. There is an element of "bubble" to prices in many markets, including the UK (as the new IMF Economic Outlook acknowledges). But the second most likely trigger will be some disruption in the Chinese economy, leading to disruption more generally throughout East Asia. But all this is, I think, still some way - perhaps a couple of years - in the future.,,13129-2357344,00.html
Henry Paulson, the US Treasury Secretary, has urged China to open up to market forces,,9072-2356826,00.html
PRESIDENT CHÁVEZ of Venezuela is striking a deal with Ken Livingstone, the Mayor of London, to supply Londoners with cheap fuel in return for access to London's CCTV and genetic fingerprinting expertise


I said in today's msg#: 147423:
If China does not want to submit voluntarily to dollar intervention,
it is useless for the Chinese to travel this week-end to Singapore.

Bad luck! Even if they don't go to Singapore, Paulson will come to China.

Heads you lose, tails I win!

GoldiloxProton 21 - The New Fusion?#1474469/13/06; 21:59:44



By subjecting a copper electrode to a gigawatt pulse of energy, Dr. Stanislav Adamenko believes that he's found a new form of fusion that occurs inside a millimeter sized plasma that forms in the electrode. Has Adamenko finally cracked the code for solid-state fusion, and what potential for future energy does it hold? He joins us for the inside story on Proton 21's research in creating "The New Fusion"...


Not your typical "cold fusion" claim, but some serious research into small scale nuclear reactions. Good after-hours reading.

Maybe "peak oil" is not the end of civilization, but the kick in the pants needed to move on!

Sierra MadreArmageddon: Why 3000 tons?#1474479/13/06; 22:43:34

Armageddon - you state that China would need 3,000 tons of gold to back up its currency if there was convertibility for the Yuan.

I don't see why any gold at all is needed. No currency in the world is redeemable in gold or anything else, for that matter. So - the gold is there more for window dressing than for anything else - insofar as "backing the currrency".

Now, if the politicians and Central Bankers and/or whoever runs things in this world, really did not care about gold anymore, no Central Bank would have to hold a single ounce. But, they do own gold, just how much we do not know; perhaps they hang on to some because they have to dish it out in doses to keep the price down and maintain confidence in their own currencies.

In other words, the purpose of gold held by C.B.s is - to fight gold, nothing else. Nothing to do with backing the currency!

So, China doesn't really need all that gold. What they have is quite sufficient. Heck, the USA probably hasn't any gold at all (no audit since Eisenhower)and look at how they carry on the fight against it.

It would be nice if the Chinese did buy the gold necessary to top up the vaults to 3,000 tons. But, it may be quite a while before it happens. For practical purposes, maybe never.


Chris PowellMorgan Chase fined, censured for short-selling violations#1474489/13/06; 22:48:45

NYSE Fines 3 Firms for Violations

From The Wall Street Journal
Thursday, September 14, 2006

NEW YORK -- NYSE Regulation Inc., the New York Stock Exchange's regulatory arm, said it fined Citigroup Inc., J.P. Morgan Chase & Co., and Wachovia Corp. a combined $3.1 million for separate violations of exchange rules.

J.P. Morgan was fined $400,000 and censured for violations of short-selling rules between 2001 and 2005. The NYSE said violations primarily involved the mismarking of orders.

Citigroup was fined $500,000 for supervisory failures on its precious-metals trading desk between January 2002 and January 2003. The NYSE said Citigroup's sole precious-metals trader at the time, Gail Edmonds, traded "in excess of her authorized limits."

Wachovia was fined $2.25 million for failing to retain and review email communications made between January 1999 and April 2006. The NYSE said $1.65 million of the fine will be waived in recognition of the payment as part of a regulatory settlement with the North American Securities Administrators Association relating to email communications.

In agreeing to the penalties, the companies neither admitted nor denied guilt.

A Citigroup spokeswoman said, "We are pleased to have this matter resolved. This settlement relates to an incident dating back to 2002; the firm took immediate action when the matter was discovered, and we have since strengthened our internal controls. Citigroup remains committed to the highest levels of governance and transparency."

A representative at Wachovia wasn't available to comment.

A J.P. Morgan spokesman declined to comment.

Sierra MadreMundell: where does he stand?#1474499/13/06; 22:56:50

I spoke with Mundell a few years ago, and asked him about the Balance of Trade deficit (it was then, only a fraction of what it is today, but already quite worrisome at that level) and I was simply DUMBFOUNDED at his reply. Now get this:

He answered that there was a Balance of Trade deficit, because foreigners were so anxious to purchase stocks and bonds from the US. Foreigners were feverishly purchasing American stocks and bonds, and exports could just not keep up with the amounts of money coming into the country to buy stocks and bonds.. Thus, the Trade Deficit was the Foreigners fault. Not credit excess in the US!

I could not believe my ears! "The cart before the horse", is all I could think of. The man has "chutzpah", I may say.

The US line (and IMF, too) is essentially the same today. "China is responsible for the Trade Deficit because it won't revalue its currency". It's always convenient to point the finger at someone else, for one's own sins.

Take it from there.


Armageddon@Sierra Madre - 3,000 tons of gold#1474509/13/06; 23:02:24

I have read recently that top advisors to the Central Bank of China have said they need around 3,000 tons of gold to be in line with current European guidelines for gold ownership as a percentage of the economic output. China has also very recently stated that they do not want any more growth in their foreign exchange reserves (including dollar reserves) and they plan on spending those dollars on commodities and gold and also other imports. Furthermore the last article I posted here stated that a top legislator in China said that FULL yuan convertability might happen in 2008. As you said the reason China needs that gold is to maintain "CONFIDENCE" in the paper currency and to intervene in the gold market when their currency becomes weak against gold after the yuan is fully floated.

I just added 2 + 2 + 2 and got 6. :)

I think China is probably going to start buying gold in greater quantities in the next 2 years in order to be ready for the full convertability of the yuan on the international market and that gold will be used to stabablize the value of the yuan on the global market and to promote confidence in the yuan by foreigners.

SundeckDeputy Russian central bank chief dies after shooting#1474519/13/06; 23:57:40


MOSCOW, September 14 (RIA Novosti) - The first deputy chairman of the Central Bank of Russia died Thursday morning after gunmen opened fire on him with automatic weapons late Wednesday, hospital officials said.

Sundeck: up the banking sector in Russia has its risks...


GoldiloxCitigroup Rogue Trader Lost $20 Million, NYSE Says #1474529/14/06; 00:40:17


Sept. 13 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank, lost $20 million buying and selling gold and silver in 2002 and 2003 after a rogue trader hid contracts and reported bogus prices, New York Stock Exchange documents show.

Gail Edmonds, 40, went as much as 75 times over her trading limit in the month before she was fired in January 2003, when Citigroup discovered the hidden positions, according to documents released today. The exchange fined Citigroup $500,000 for inadequate supervision of its precious-metals desk and released findings by a hearing board that investigated the trades.

The case offers another example of lax controls that evolved at New York-based Citigroup under former Chairman and Chief Executive Officer Sanford Weill. Citigroup found in a 2000 internal audit that its precious-metals desk lacked proper supervision and price verification, and then didn't do enough to address the failings, the NYSE board said.

The procedures Citigroup adopted "did not provide for reasonable supervision of the price-verification process,'' according to the July 17 NYSE hearing board decision released today. "As a result, the firm failed to discover Edmonds's misconduct for almost one year.''

Citigroup learned of the trades on Jan. 8, 2003, after two customer inquiries about precious-metal prices. By then, Edmonds had made commitments obliging the bank to deliver $331 million in gold and silver, the NYSE documents show. At one point in December 2002, she had $373 million in open positions.

Tighter Controls

Charles Prince, who succeeded Weill as CEO in 2003, imposed tighter controls last year after Citigroup paid more than $5 billion in regulatory and legal settlements. The U.S. Federal Reserve punished Citigroup for its regulatory lapses with a yearlong ban on mergers that ended in April, and the bank's shares have lagged behind peers such as JPMorgan Chase & Co. and Bank of America Corp.

Edmonds also lied to a Citigroup clerk about her trading risks, the hearing board determined. She was barred from the securities industry for four years. Edmonds and Citigroup didn't admit or deny the board's findings.

Attempts to reach Edmonds were unsuccessful, and her lawyer, Joan Secofsky, wasn't immediately available.

"We are pleased to have this matter resolved,'' said Citigroup spokeswoman Danielle Romero-Apsilos. "The firm took immediate action when the matter was discovered and we have since strengthened our internal controls.''

Eagles, Maple Leafs

According to the NYSE documents, Edmonds traded in gold and silver bullion and coins such as American Eagles, Canadian Maple Leafs, Chinese Pandas and South African Krugerrands. In January 2002, she started exceeding her $5 million overnight trading limit by concealing transactions and mispricing gold and silver positions, the NYSE investigation found.

By the time she was fired, her trades obliged Citigroup to deliver about 903,300 ounces of gold and 4.3 million ounces of silver.

"As a result of Edmonds's misconduct, the firm incurred about $20 million in trading losses,'' the NYSE regulators said in a separate May 30 decision.

Citigroup reported $6.73 billion in trading revenue for 2003, an increase of 4 percent from the previous year.

Edmonds traded on behalf of retail and small institutional customers as well as for Citigroup. The hearing board said her trades on behalf of those customers used "fair and accurate prices'' and none suffered "quantifiable'' harm.

Citigroup failed to notify customers it overstated the value of some precious-metals trading accounts after discovering the mistake in January 2003, the NYSE hearing board said. The firm instead corrected the accounts in the following month's statements, according to the NYSE.

The Invisible HandDollar hegemony to be confirmed in Singapore#1474539/14/06; 04:06:05
Yet, [Henry CK] Liu argues [writing in the influential Asia Times] forcefully that soon "the day will come when this technical issue" of the value of China's currency "will become moot, when the Chinese yuan will naturally become a reserve currency for trade, reflecting the reality of changing global trade patterns," challenging the current hegemony of the dollar.
When that day arrives, the entire monetary and financial edifice of US imperialism will be subject to a major shock.
The US will be unable to resort so easily to the printing press to deal with its pressing economic problems but, like most nations, will have to earn foreign currency the old-fashioned way — by working and producing.
Moreover, taxing Chinese exports will simply drive up inflation in the US, particularly for consumer goods, and will hamstring corporations like Wal-Mart, KMart, Sears Roebuck and many more
In the currency area, since China de-linked its currency from a decade-long peg to the dollar in favor of a basket of currencies, it has repeatedly promised to allow its forex regime to become more flexibility.
But the yuan has since strengthened by only about two percent, rankling tempers, especially in Washington, where a soaring trade deficit with Beijing has sparked accusations of unfair trade practices and threats of punitive duties.
The IMF officials "noted that greater exchange rate flexibility, along with other policy changes and reforms in China, will aid in rebalancing the economy over the medium term, and will contribute to the orderly resolution of the global current account imbalance." — AFP


All statements in advance of this week-end Singapore IMF meeting confirm that the dollar-International Financial and Monetary System (IFMS) wants to continue exercising its monopolisation of the determination of the monetary policies.

Everybody has to comply with the US of A self-serving dollar-easy money policies, with its bubbles, booms and busts organisation.

In this way, it is easy to continue arguing that the US of A and the dollar are the engines of the world economy.

The US of A and the dollar want again easy commodities in spite of all resources nationalism, in order to render possible the dollar hegemonic policies.

All exchange rates have to continue adapting themselves to the dollar whims in order to have continued global expansion under US of A and dollar leadership.

Under such circumstances, it is barely surprising that the dollar-opposition is using the frozen price of gold to redistribute gold holdings among the members of the opposition who want a dollar-regime change.

Even Japan with its $10 trillion of savings is being FORCED to remain loyal. Failing for Japan to do so would result in its loss of dollar-wealth.

The easy dollar is losing its leadership because the dollar-IFMS is no longer considered by everybody to be worthy of being upheld. No pressure can force those who no longer want to uphold the System to uphold it.

Most feign dollar-regime collaboration.

The Chinese, for instance, talking about a controlled floating yuan experiment, but in reality:
Japan may ask China to allow its currency to trade more flexibly at the G7 meeting scheduled to take place Saturday in Singapore, according to [Germany's Deputy Finance Minister Thomas Mirow].
"When a government tightly controls a currency's moves, it's difficult for investors to manage their risks and runs counter to the true meaning of a floating currency," the official said.
"Sometimes the yuan moves in the opposite direction of its reference basket. Chinese officials should loosen controls to allow the yuan to move in the same direction as the basket," he said.

Meanwhile, Rodrigo De Rato, the IMF managing director, is silent about the US of A's irresponsible monetary expansion – easy money – and the resulting housing bubble.

Quite to the contrary, the culprits for the coming recession/depression are being indicated beforehand as being the yuan, the EU and Japan who don't want to grow enough, and China which does not want to slow down its growth.

Nathan BrazilTrader lost $20 Million: Story emphasizes danger of gold#1474549/14/06; 06:23:35

I wonder how many people will carefully read the story notice that the trader lost $20 million SHORTING gold.

"By then, Edmonds had made commitments obliging the bank to deliver $331 million in gold and silver, the NYSE documents show."

Most will read the headline and take away that GOLD=DANGER.

Clink!@ Nathan Brazil#1474559/14/06; 07:29:16

I was about to make the same comment. I wonder when there will be the "discovery" that the main reason for all the gold shorting by entities such as Goldman Sachs turns out to be just a few "rogue traders" going against company policy. After all, wasn't that the problem with copper and Sumitomo a few years back ?

GoldiloxEurope's central banks step up gold sales for now#1474569/14/06; 07:44:09


By Krista Hughes

FRANKFURT (Reuters) - Europe's central banks have stepped up sales of gold as the deadline for the current phase of an agreement limiting bullion sales approaches.

But analysts said that for the first time in seven years the banks are not expected to sell their full gold quota.

The steep rise in gold prices over the past five years may encourage some central banks to hold on to their treasure trove, while others are selling as they seek to diversify their reserve holdings.

Central bankers meeting next week in Singapore for the International Monetary Fund sessions will have the opportunity to swap notes on the merits of gold versus other assets, as they review progress of the five-year Gold Sales Agreement.

Markets expect sales to fall about 25 percent short of the 500 tonnes of gold that central banks are allowed to sell in this, the second year of the pact, which runs out in just under two weeks.

And some wonder whether the pattern will be repeated in its final three years.

"Until this year they had sold the limit so it would be a departure...certainly the easy assumption that they will always sell the limit will have been shaken a bit," said Matthew Turner, analyst at precious metals consultancy Virtual Metals.


"while others are selling as they seek to diversify their reserve holdings."

And which CB holds so much shiney that trading it for dollars will "diversify" their portfolio?

HA HA HA! Very funny!

GoldiloxPM Smack Down#1474579/14/06; 07:56:54

As soon as the CB gold-sales story was posted by Reuters, the WWF-style smack down of PMs began. Someone believes that tripe?

or just coincidental that it was dropped on the market after a $5+ pre-Comix rise?

GoldiloxRogue Traders vs. Black Boxes#1474589/14/06; 08:11:40

I wonder which "Rogue Trader" gets the blame when a series of black box trades gets caught in the fan, or do they consider firing the "programmer", and rescinding his "Nobel Prize"?

According to George Ure, over 92% of stock trades are of the program variety! I wonder how the commodities trades "stack up"?

White hats vs. Black boxes?

HA HA HA once again!

Chris PowellRussian central banker murdered after attacking insolvencies and corruption#1474599/14/06; 09:16:34

By Steve Gutterman
Associated Press
Wednesday, September 14, 2006

The top deputy chairman of Russia's Central Bank died Thursday, hours after being shot by unidentified assailants in an attack that officials suggested was prompted by his efforts to clean up the country's banking system.

Andrei Kozlov, the bank's first deputy chairman, died hours after he was hospitalized in critical condition following the shooting late Wednesday, Moscow prosecutor's office spokeswoman Svetlana Petrenko said.

Kozlov's driver was also killed in the attack, which Russian media said was carried out by two gunmen who fled after the shooting. It occurred outside a sports arena where bank employees were having a soccer game.

While rarer than in the turbulent 1990s, contract killings of businessmen and bankers still regularly occur in Russia, where business conflicts often turn violent.

Vice Premier Alexander Zhukov said the shooting was likely linked to Kozlov's duties, and suggested the possibility of a connection with the Central Bank's revocation of licenses of unreliable commercial banks, the Interfax news agency reported.

Kozlov had been responsible for banking supervision, and had overseen an ambitious program to reduce criminality and money laundering in the banking system.

"His steps to cleanse the (banking) system and to build a normal, civilized system apparently strongly encroached upon somebody's interests," the head of the Association of Russian Banks, Garegin Tosunian, told Ekho Moskvy radio.

Kozlov, 41, had been the Central Bank's first deputy chairman since 2002 after first holding that position from 1997-1999.

His work had made him a potential target for the owners of the hundreds of unsound or criminal banks operating in Russia, and he had frequently been the target of smear campaigns in Russian newspapers and on Web sites.

Kozlov's most conspicuous achievement had been the introduction of a deposit insurance program designed to restore faith in the banking system after widespread defaults in 1998, in which many Russians lost their savings.

At Kozlov's initiative, bank licenses were revoked and others were effectively earmarked for closure when they were denied access to the deposit insurance program.

Kozlov "repeatedly infringed upon the interests of dishonest financiers," the ITAR-Tass news agency quoted Finance Minister Alexei Kudrin as saying. Kudrin called him "a very courageous and honest person who was at the forefront of the struggle with financial crime."

Opening a Cabinet meeting hours after Kozlov's death, Prime Minister Mikhail Fradkov expressed condolences to his wife and children and government officials stood for a moment of silence, shown on state television.

Anatoly Chubais, a former prime minister who is now head of electricity monopoly RAO Unified Energy Systems and survived an assassination attempt last year, called Kozlov "an unquestionably honest, principled and absolutely noncommercial person."

"His killing is an impudent challenge to all Russian authorities," Chubais said in a statement.

Tim Ash, an analyst with the investment firm Bear Stearns, said the shooting was a direct affront to Putin's government and threatened a return to the violence that plagued Russia's chaotic business world following the 1991 Soviet collapse, Dow Jones Newswires reported.

"We would expect Putin to set the resolution of this case as an absolute priority for the country's security services," Ash was quoted as saying. "Failure to apprehend the killers would send a signal to others that intimidation of government officials is once again an option."

GoldiloxGold futures fall; rally forecast weighed#1474609/14/06; 11:00:32{1A624DEB-DD6B-4D5E-8A50-318BD4711528}


SAN FRANCISCO (MarketWatch) -- Gold futures fell Thursday as traders mulled a report from a key metals consultancy that predicted prices could surpass $700 by the end of 2006 but warned a downturn in the U.S. and Chinese economies could put that estimate at risk.

Gold prices could top the $700 mark by year-end as investment purchases offset weaker demand for high-priced jewelry, said GFMS Ltd. Thursday.
But it also said any severe downturn in the U.S. and China could sink the price of gold and other commodities. See full story.

And gold demand faltered in the first half as prices reached a 26-year high, with jewelry fabrication fell by over 400 metric tons, or nearly 30%, with the biggest drops in India and the Mideast.

"The GFMS outlook seems to justify at least a portion of the September washout in prices," said Nell Sloane, analyst at

"One could also conclude that the failure to see renewed bargain hunting and investment buying would mean that the ... forecast generally favors the bear camp," she said in daily commentary.

In midday dealings, gold for December delivery fell by $3.50 to $592.80 an ounce on the New York Mercantile Exchange, turning lower after earlier touching $600.30. The contract climbed $2 on Wednesday to break a five-session losing streak that caused prices to fall by a cumulative $52.60.
Despite GFMS's prediction of $700 gold by the end of the year, "the gold market appears determined to complete a corrective phase that many misjudged as having ended during the most recent rally (from July 4th to last week) up to the $640 level," said Jon Nadler, an investment products analyst at

Still, "it may prove to be a costly mistake to urge people out of gold entirely, precisely during the time when its protective attributes are becoming very much needed -- the present era of uncertainty and turmoil," he said.


Sounds like something Lewis Carroll might have penned.

GoldiloxDown into the close#1474619/14/06; 11:26:55

The attack on PMs is heightened into the Comix close. Whew!
Flatliner@Why 3000 tons?#1474629/14/06; 11:34:25

Sierra Madre, you bring up a really good question. Why, in this day and age, would the Chinese need any gold reserves at all? As we have all learned, gold reserves have been used to fight gold rather then give it backing thus the real question is what you wrote "I don't see why any gold at all is needed."

This is where we need to think about the function of gold. What if oil really only trades for a fiat if that fiat buys gold? What if, oil has been trading with US dollars because US dollars will buy gold anywhere in the world? Another wrote that this is true and that gold is flowing to just some players and it's vitally important that the physical gold make it to the appropriate destination. In other words, he implied that there is function to this gold that is above and beyond what we see in the public markets.

What if, central banks of the world need the backing of oil in order to complete the function of the fiat currency that they print? In other words, sense oil's backing the US Dollar all countries find support from oil by holding US Dollar reserves.

Now let's consider the Freegold concept where a central banks currency is freely convertible into gold on their open market. It is an interesting thing to think about. Here, the key thing to notice is that anyone that collects the central bank fiat can redeem it for gold within that country. If Oil collects too much of that one fiat, they can redeem it for gold in that country OR use it for economic trade, again, in that country. If trade gets out of balance, the country going in debt will find a rising price of gold as the debtor comes collecting. This lowers the value of the fiat and, in turn, increases export trade because the standard of living is falling in the country that is in debt.

Now comes the function of gold. The trick for the central bank, at this point, is to manage it's fiat against gold rather then other currencies. Here, the debt of the country can be ‘forgiven’ as the fiat falls against gold, but, to maintain oil support, gold MUST continue to flow until a trading level is found for the fiat that improves international trade.

If you look closely, the function of gold now not only gets the backing of oil, but it also becomes the measuring stick for the fiat currency.

Without gold, the gold-less country will be forced to build fiat reserves with another country that is strong in gold. The weak country will be subject to the politics that rule trade in the strong country and, ultimately, the weak country will be economically enslaved to the strong one.

Gold for China, gold for All of South America, gold for Russia, gold for Europe, gold for any central bank gives them the right to control their own fiat float. That is what the US Dollar has been doing for decades but is not widely understood (Strong dollar). Every central bank that has declared that they are building gold reserves and using the MTM concept has publicly said that we measure our fiat against gold – redeem our fiat in OUR gold, trade with us, because if gold is in low supply in our market, we will liquidate our reserves to support our fiat. In other words, gold provides the guarantee of fiat stability.

As we watch the US trade imbalance grow to a crushing level, the world will discover the beauty of the Freegold concept as soon as the people of the world realize that the implicit strong dollar policy can not function under the growing debt load. It must be weakened. That is the point at which the world will see how gold behaves as a reserve asset and we'll see a functioning Freegold system without any words spoken. It will just happen.

At the same time, it may not be that the central bank will need to by reserves before this transition, but without golden reserves, it will be REALLY hard for them to maintain confidence in their currency in the face of all the other currencies that will have gold support. In other words, the central bank will have to buy gold with their own fiat. Those that hold gold in that country will only part with the gold if the fiat has value (function) for trade. Thus, wow be it for any country that does not have gold reserves!

Now a plug for our sponsor: Buy their physical gold for your reserves.

mikalHeadlines from People's Daily#1474639/14/06; 13:16:33

People's Daily Online headlines:
Chinese army concludes first exercise involving long-range maneuvers Thu Sep 14, 2006
Chinese premier reiterates resolve to protect intellectual property rights Thu Sep 14, 2006
China mainly relies on domestic supply to meet energy need: Chinese premier Thu Sep 14, 2006
Chinese premier says Sino-EU ties stronger than ever
Thu Sep 14, 2006
China committed to pursuing peaceful development: Chinese premier Thu Sep 14, 2006
Let us not forget China is stockpiling moany months and in some cases, years worth of commodities of various forms.
Their gold stockpiles on the other hand, should last even longer.

Ten BearsMogambo Guru#1474659/14/06; 13:46:32

Very good Mogambo Guru commentary today!
mikalChina/U.S. ties less ambiguous than fate of U.S. $!#1474669/14/06; 13:55:03,20867,20413685-36375,00.html

US Wants China to Succeed: Paulson | Krishna Guha, Washington | September 15, 2006 | Excerpts:
"US Treasury Secretary Hank Paulson has laid out the framework for a comprehensive new strategy towards China, emphasising the need to take a "generational" view of the US-China relationship.
Mr Paulson told the Financial Times he wanted to "strike a balance" between tackling pressing short-term issues while maintaining a strategic perspective on China's emergence as a leading player in the global economy."

["New perspective" etc. Code words for CHANGE. Watch how regional agreements flower with less emphasis on the dollar IMS and western consumer "growth and prosperity" drivers.]

""We have a common interest," he said, arguing that many of the steps the US wanted China to take were in its own best interest.
The interview followed a landmark speech by the former Goldman Sachs chairman ahead of his first trip to China as Treasury Secretary, in which he said he would tell his counterparts in Beijing: "We want you to succeed."
Mr Paulson said: "The United States has a huge stake in a prosperous, stable China - a China able and willing to play its part as a global economic leader."
He said the US and China shared areas of economic interest, highlighting energy and the environment as two specific areas where the two nations should work together.
He added that the US looked to China to be its "co-operative partner" in reviving the Doha trade talks.
Officials said Mr Paulson would push hard on Doha in meetings with world finance ministers in Singapore later this week."
[It seems these trade talks are subordinate to all "regional priorities" such as the NAmer. trade zone?]

"For example, he said, on the currency front "the intermediate-term viewpoint is that it is very, very important to open up their capital markets, to have healthy competition within the domestic financial system, so they can have a currency that is freely tradeable". But he added: "They also need to show more flexibility in the short term."
His speech did not dwell on the currency as a stand-alone issue, framing it as part of a necessary shift towards more market-based management of China's economy. But Mr Paulson warned the Beijing authorities that they underestimated "at China's own peril" the extent to which the currency was "viewed by their critics as a symbol of unfair competition".
He called on China to press ahead with liberalisation across a broad front, including financial sector reform, fiscal and regulatory policies to reduce excess savings, market-based macroeconomic management and intellectual property rights."

[China's savers will have no choice but to yield to official pressures and various incentives to spend more into the domestic and regional economy as the U.S. and Europe importation "miracle" becomes a mirage. Not how oblique references to the Chinese currency compliment US Treasury/administration/Fed opaque dollar policy. Clearly they say one thing and do another. So the dollar will get derivative rash and the scratching will be a worldwide contagion.]
"In his speech, Mr Paulson praised China's record of economic reform, and said China already "deserves to be recognised as a leader". This, he said, was why the US backed plans to give China and other emerging markets a much bigger say in the International Monetary Fund."

[Plenty of Paulson praise for China, unlike Bush who couldn't even afford traditional protocal during their leader's recent visit to DC.]

"The speech positions Mr Paulson in the role of honest broker between China and its critics in Congress. He characterised the fundamental division as not one between the US and China, but between liberalisers in both the US and China, and their protectionist opponents."
[The commercial banks and media fail only to supply the violins. They and the corporatocracy and shadow bureaucracy
to the wealthiest globalists will decide as always the ground rules of trade- who, what, where, when and "why".]

mikalChina/EU trade grows#1474679/14/06; 14:29:36

Chinese PM Wen Says Sino-German Trade to Reach $80 Bln in 2006 | Sep 14, 2006
BERLIN (MarketWatch) -- Chinese Prime Minister Wen Jiabao sees trade with Germany growing this year with the value of goods probably reaching $80 billion.
"Trade relations between China and Germany overall are very good," Wen told reporters after meeting with German Chancellor Angela Merkel. The value of trade goods flowing between the two countries "will probably reach the $80-billion mark this year," Wen added.
Germany is one of China's most important trading partners within the European Union, with around EUR61.2 billion worth of goods flowing between the countries in 2005. At the current dollar rate, that's worth $77.8 billion.
A spokesman for the BGA association of German traders and exporters said he's confident that the $80-billion level "will definitively be surpassed." He pointed to the 27.6% rise in German exports to China and the 28.8% rise in imports from China to Germany during the first half of 2006 compared with the same periods a year earlier.
At the same event, official signed agreements between the two countries, which included a feasibility study between China's state-owned energy firm Sinopec Group and BASF AG (BF) about the Yangba project, a long-term cooperation agreement between Shanghai Chemical Industry Park Development Co. and Degussa (China) Co., a unit of German conglomerate Degussa AG (DGX.XE), as well as cooperation to protect intellectual property rights.
Asked about China's demand for the European Union to treat it as a market economy, Merkel said she wants a continued dialogue between the E.U. and China about market economy status. "Once the Commission comes to the conclusion that talks have been successful, Germany will support the proposals," Merkel said.
The E.U., which has so far been reluctant to grant China this status, will review the question again later this year.

Ten BearsEquity Markets Approach Critical Mass #1474689/14/06; 16:13:24

by Joseph Russo

"Those who controlled the Money and Banking System had at their complete disposal the most robust and full spectrum instrument of power with which to control the course of the World Societies, and their inherent Internationally Trade Based Economies." If such revelations were not born of a sincere crisis related, solution based moment of recognition; one has only to assume that such motives were far more sinister and willfully engineered.

Since abandoning the Gold Standard in 1971, The Federal Reserve has issued nothing but "make believe" worthless units of pure fiat debt/credit, vs any reasonable facsimile of "hard asset backed money." As such, dollars as we know them are not truly valid representative measures of wealth; rather they simply represent the current medium of exchange for essential goods and services as commanded by Government fiat. The more dollar (debt) units of exchange that are available, the less valuable they become. This is a flat out Debauchery of Sovereign Currency, camouflaged under the propaganda paradigm of inflation.

At the end of the day, we are all in effect playing one big game of monopoly at the house of the spoiled rich kid who owns the game, always gets his way, insists on making up his own rules, always has to win, and who is always in charge of the money.

It is common knowledge in both the financial and political communities that there is an overabundance of largely intractable fiscal and geopolitical minefields weighing upon the present and future landscape of Globalization as presently structured.
As such, we shall continue to presume that easily manipulated illusory benchmarks of unequal measures alongside well managed maligned reporting of official statistics is likely attributable to rapidly diminishing levels of plausible denial rather than representative of any legitimate milestones of merit toward achieving a greater good.

FlatlinerAnyone notice?#1474699/14/06; 17:09:25

SLV is now in trust of 103,325,607 ounces silver.
GLD has also jumped a couple tones from 390.7 to 393.79.

There may be a panic in the paper markets, but when it comes to physical holding, investors seem solidly stable.

TownCrierThe joy of learning#1474709/14/06; 17:15:08

In order to better comprehend the economic socio-political contests of the modern day, it is often helpful to learn enough history as context to grasp that the nature of these struggles is an on-going feature.

A light introduction for those who are new to this area of exporation can be found in the latest arrival at our Gilded Opinion pages.

Called "Money and Politics in the Land of Oz", in it author Quentin P. Taylor walks along with you down a fun and fanciful path (i.e., yellow brick road) to explore a few of the monetary and political intrigues at the turn of the previous century.

A full and on-going education is important because the more you know, the better you are able to comprehend the big picture and to thus ensure that you make wise decisions in the course of your life.

Bottom line: the more you know, the better you understand the comforts and benefits of gold ownership.


USAGOLD Daily Market ReportPage Update!#1474719/14/06; 18:56:40">
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 Update

Gold futures dn $10, $700 rally forecasted

September 14 (from Reuters, MarketWatch) -- Gold futures in New York sank 1.7 percent to end at a three-month low Thursday, pummeled as oil prices hit a six-month nadir and as traders generally were reluctant to step in front of falling commodities markets.

Gold retreated further from $600 an ounce resistance after briefly rallying in early trade, as few investors saw the market offering an immediate buying opportunity, due to expectations that it could soon test support near $570 to $580.

The COMEX December gold contract fell $10.30 to $586, its lowest close since June 19.

Gold has lost 10 percent on aggressive investment selling after it failed last week to get above resistance just shy of $650. "There are so many speculators and gold-bugs so materially 'hurt' in the course of the past several days that their margin clerks are going to make quite certain that they are sellers of gold, silver, platinum et al on this and any subsequent further rallies," said Dennis Gartman, author of The Gartman Letter.

"It may prove to be a costly mistake to urge people out of gold entirely, precisely during the time when its protective attributes are becoming very much needed -- the present era of uncertainty and turmoil," said Jon Nadler, an investment products analyst at Kitco.

The drop in gold prices over the last few weeks was driven partly by easing concerns about inflation, as energy and commodities prices tumbled from their recent highs, analysts said.

Separately, Europe's central banks have stepped up sales of bullion as the deadline for the current phase of an agreement limiting sales approaches. But analysts said that for the first time in seven years the banks are not likely to sell their full quotas. Markets expect sales to fall about 25 percent short of the 500 tonnes of gold that central banks are allowed to sell in this, the second year of a five-year Gold Sales Agreement, which ends in around two weeks.

Meanwhile, precious metals consultancy GFMS said strong investor buying on a bleak outlook for the dollar and a volatile situation in the Middle East is likely to drive gold through $700 by year end.

GFMS said in a half-yearly update to its Gold Survey 2006 that even higher prices could not be discounted, though that was perhaps possible in 2007.

For now, "the negatives for the metals (strong financial markets, firm dollar) will probably remain for now but I expect to see the stock markets come undone soon and, if that were to occur, it should provide the necessary spark for the next leg up in the metals complex," said Dale Doelling, chief market technician at Trends In Commodities.

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

The Invisible HandHanky goes to Beijing ...#1474729/14/06; 20:49:33

SINGAPORE, Sept 15 (Reuters) - IMF Managing Director Rodrigo Rato said on Friday that world policy makers needed to be ready to adapt to a "more challenging" economic outlook.
MF fears global growth contraction in 2007; Urges ECB to move cautiously on interest rate hikes
"The United States has nothing to fear from China's emergence as a global economic power ... We want you to succeed ... The tasks faced by Beijing are so daunting that the biggest risk we face is not that China will overtake the US, but that China won't move ahead with the reforms necessary to sustain its growth and to address the very serious problems facing the nation."
- US Treasury Secretary Henry Paulson, who is due in Beijing for two days of talks with Chinese officials next week.
CQ Transcripts Wire
Wednesday, September 13, 2006; 11:48 AM
On energy, China, which was self sufficient in oil until 1993, is now the world's second largest oil consumer behind the United States. We clearly share an important interest in energy security with China and other nations, particularly those which are net importers of oil.
That means developing new sources of supply, minimizing supply shocks, increasing conservation, and the developing alternative technologies. Since much of the oil we both need is found in troubled regions of the world, China and the U.S. have common incentives to minimize regional instability while reducing our dependence on foreign oil.
It has almost reached knee-jerk proportions: a powerful China will assume the leading position in Asia at a time of US decline. Officials in Beijing and a host of Asian countries paint a different picture. Flexible diplomacy by Asian governments supported by undiminished US security and economic power and influence precludes Chinese leadership or dominance in Asia, and in fact reinforces US leadership


Before Paulson goes to Beijing, he will stop in Singapore for the IMF.

Gold and its pricing will certainly be informally discussed there.

When currency exchange rates are being discussed, the discussion concerns not only the economic aspect but also the monetary (reserves) aspect (imbalances!).

Then our masters will again be concerned with question what is the optimum of a central bank gold reserve and in what quality (freely-unfreely priced)?

The answer to this question will determine the redistribution of the "excessive" gold reserves of Portugal, Algeria and Lebanon.

Hence, the movement in monetary and non-monetary gold and the monetising or not of those reserves.

It seems that the international financial and monetary administration (the central banks) have not yet reached a consensus on these matters.

The paradox of the monetising (the coining into money or establishing as legal tender) of monetary gold (reserves) on the one hand and the severance of the link between gold and currency on the very visible.

Hanky Panky says that China and the U.S. of A. have common incentives to minimise regional instability while reducing our dependence on foreign oil.

How did the price of oil go from $10 (1999) to $80 (2006)?
Only because of regional instability?
What happened to peak-oil?

Or …

Is it permissible for the financial industry to negate the invisible hand with their dollar power?
Is Hank going to try to dollar-americanise China?

Is China letting the gold knock-down containment happen for the moment, just before it goes to Singapore?

Does Paulson want to let the yuan float in order for the dollar International Financial and Monetary System (IFMS) to introduce price-inflation?

How can Paulson, in face of the undeniable Chinese power, go to China to ask it to support the dollar-regime?

If, as the Asia Times suggests, a rising China can't dominate Asia, because of US of A leadership,
isn't it time to throw the child (the US of A) out with the bathwater (the dollar)?

Hank should know that the Chinese language has no equivalent of "Monkey see, monkey do" and that the name "Singapore" does contain the French word "singe", "monkey".

SundeckHank Paulson's China etude#1474739/14/06; 20:51:45

Ref mikal #147466

Having been spectacularly unsuccessful in bashing into China with the stick of the Snowman, the US Treasury is now trying to woo China with flattery and reassuring, fatherly encouragement. Unfortunately Paulson comes across as being just a tad too paternal in his worldly acclaimations.

Come now, Mr Paulson, we all know that America speaks with its own self-interest at heart...I know it, you know it and China knows it. And guess what? China is going to do exactly what it feels is in its best interest...although perhaps without reciprocating paternal advice for you.

To the extent that it is able, China will progressively increase domestic consumption of its manufactures, as well as increase their export to countries from which it receives the raw materials and services that it uses to power its economy. These countries include a goodly bit of the developing world (Brazil, Venezuela, India, Africa and Russia, amoung others). Exports to these countries will likely grow to offset diminishing exports to the USA as the US consumer's home-equity is fully withdrawn and US domestic spending plateaus, or descends. The big question is whether these trends can march in time to avoid shocks and economic disruptions....

The way the CRB index is behaving (major correction), it would seem that there is not a little concern amoungst investors that the transition is likely to be rough, rather than seamless...


Sierra MadreBED TIME STORY#1474749/14/06; 23:54:57

Once upon a time there were three little pigs, and the time came when they had to go out into the world to make their own way.

The first little pig made himself a house out of stocks. And the big bad wolf of financial collapse came, and he huffed and he puffed and blew the house down, and ate the first little pig.

The second little pig made his house out of bonds. And the big bad wolf of monetary inflation came, and he huffed and he puffed and he blew the house down, and ate the second little pig.

But the third little pig made his house out of gold. Then the big bad wolf of the PPT came and he growled at the little pig's door and said, "Little pig, little pig, sell your gold or I'll blow your house down!" And the little pig answered, "Not by the hair of my chinny chin chin!"

So the big bad wolf he huffed and he puffed and he caused the price of gold to fall tremendously. But the little pig was still safe and warm in his house of fully-paid up physical gold. So the PPT wolf said, "I'm coming down the chimney!"

So the little pig set a pot to boil on the fire in the chimney, and when the big bad PPT wolf came down the chimney, he fell into the boiling pot and the little pig had PPT wolf stew for supper.

And the little pig lived happily ever after and his gold house became more and more valuable.

Sierra MadreOn a more serious note...#1474759/15/06; 00:21:46

Well, Paulson going to China is one more round in the on-going poker game (big stakes!) being played by USA and China.

Representing the USA is Paulson, a canny trader.

The Chinese are, however, an extremely intelligent race. Would you want to play poker with a Chinese cardsharp? Not me, thank you!

The Paulson hand has the cards of wooing the Chinese into being "accepted", into being an OK country, into opening up like other countries (subverted by the USA).

Paulson can insinuate that either China plays ball, or the US can....what?

What are the Chinese cards? Well, they don't talk much, like a good poker player. Just what cards do they hold? Well, they have $ONE TRILLION in reserves. Are they going to fold? Not bloody likely. Just listen politely. Rather like an elephant regarding a chihuahua dog.

I think the Chinese are far, far too intelligent to fall for the sweet talk about "China and the USA, we can do great things TOGETHER" (From "Mars Attacks", my favorite film).

With great politeness, they will pull the rug out from under the USA when they think the time is right.

Most interesting to watch this game evolve.


GOLD FINGERTHE END?#1474769/15/06; 01:17:11

Guess we are feeling the pain of DOWN? Is this the end of the BULL MARKET for gold?

The dollar is still doomed in my mind. Can this prop up gold with out inflation?.....or is it just asleep until the next big crises?

Perhaps after all the big EU Central banks have sold their gold....then it will be happy days again??


I am smiling irregardless.....I have gold to look at!

TopazA silver lining, of sorts.#1474779/15/06; 01:34:21

The thumping continues, for the moment anyway and we can all take heart that this PoG drop is being experienced right across the board in all currencies, not simply the Dollar.
This is important because?? ...Gold has to remain decoupled from Currencies of any stripe to fully mature when the time is ripe.

GoldiloxUSDX#1474789/15/06; 07:19:59

Team PPT us off and running this morning.
geQuarterly Gold Chart#1474799/15/06; 08:07:19

looks nice...
mikal"CPI" up less, options expiry and trillion dollar dinners#1474809/15/06; 08:40:37

CBSMarketwatch headline: Inflation Takes a Breather as Gasoline and Home Prices Help
Did gubermint stop printing dollars and expanding M2(and M3) by record astronomically correlated parameters?
The "INDEX" not "inflation" took the "breather", along with gov't cronies and collusive apologists hiding complicit paymaster financiers and bankers.

Cometoserosie ........., #1474819/15/06; 09:04:12

I'm sure we're going up on the sm averages.......

to new all time highs .......

with peace breaking out in the mideast ......

lackluster huricane season ........

gas dropping like a rock .........

and oil overflowing from the strategic reserves everywhere
where oil might be needed or wanted......

CRB breaking it's 3/4 year trendline...


for the elections.......

However, THE DOllar is still the dollar , Peak oil is still peak oil ........
and interest rates are precariously close to a level that
would be cataclysmic for Real Estate....

For midterm elections to go well and to keep the consumer homeowner american confident .....and buying to keep the chinese products rolling ......
It is good to have unseasonably .......wonderful news....
on so many fronts.

It doesn't look like it will last ........though .....

It looks like a conveniently timed interruption burp in
well developed mega trends...

Thoreauly@ ge re: Quarterly Gold Chart#1474829/15/06; 10:27:18

Nice indeed, as this is viewing gold from the proper perspective. And all you fence-sitters out there need to focus on the fact that unlike the previous high, the fundamentals (i.e., debt) are altogether different now, meaning that far from plunging, gold will soon be looking down -- WAY down -- at $850.
mikalBanking execs gaze into, fail to recognize "the abyss"#1474839/15/06; 12:45:16

Banking execs say defaults no worry until recession
By Nick Godt, MarketWatch | Sep 15, 2006
NEW YORK (MarketWatch) -- Credit-risk officers at Bank of America and US Bancorp on Friday said they were not overly concerned about risk of defaults on loan payments unless the economy goes into a recession next year.
The executives were speaking at a Merrill Lynch conference addressing credit risk amid a fast-falling housing market and predictions that the economy will slow, or perhaps enter into a recession, in 2007.
Consumers have come under pressure from higher interest rates, higher energy prices and the prospect that the wealth provided by ever-rising home prices over the past five years has stopped growing and in some cases is falling.
The large levels of debt, especially from mortgages and refinancing that have helped finance U.S. consumption are especially an area of concern.
But the key factor influencing whether consumers default on loan payments remains unemployment, which remains low, the credit officers of the two banks said.
"The biggest concern we've had is the rate increases, the impact of the housing market and energy prices," said Sam Ramsey, who heads Bank of America's consumer real estate and market risk division.
But, he added, the Federal Reserve has now paused its two-year campaign of interest-rate hikes, energy prices have fallen recently and credit quality remains robust so far.
"We're cautious but constructive," Ramsey said. "Now it all boils down to whether we get a soft landing or a housing-led hard landing."
Mike Doyle, chief credit officer at US Bancorp, said that consumers have started paying down their debt at a faster rate and will remain able to make payments as long as unemployment doesn't spike upwards.
"As I think about interest rates, I worry more about the impact on the GDP," Doyle said. At the same time, with consumption largely supporting economic growth "we don't want a consumer-led recession," he added.
However, a bankruptcy law that makes it harder for consumers to obtain protection from creditors kicked in this year and has blurred the picture somewhat as it created a spike in bankruptcy filings late last year followed by a sharp decrease so far this year, said Ramsey.
"There is a great deal of uncertainty," he said. "Will [the new law] lead to a great contractual default rate? This is unknown because this is a new frontier."
Likewise, Ramsey expressed concern about the amount of unsecured loans that have been extended in the subprime area of the market, where borrowers have less than perfect credit scores.
Banks that have extended these types of loans have relied on complex risk/reward models that are untested in real conditions, he said.

Mikal- Appearances are deceiving even to banks's "credit risk officers". Though their bosses would be more in touch and have hedged future losses, they are not allowed to see or at least acknowledge true "unemployment levels" and the consequences of debt saturation.
But some of them are now suspicious in the wake of rising delinqiencies and top-heavy debt pyramids.
Even the new bankruptcy law falls under suspicion for it's temporary palliative and potential backlash.
Reliance on "complex risk/reward models that are untested in real conditions" sounds like a euphemism for aggressive and criminally culpable credit extension.

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FRIDAY Market Excerpts

Gold Correction Continues

September 15 (from Reuters) -- Gold futures in New York closed at a three-month low on Friday, as traders dumped more metals holdings after oil prices stayed weak and as the dollar strengthened.

"We're still correcting and the market is under pressure," said one desk trader in New York.

"We saw some short covering up to $588.50 in Dec, but it could not maintain that level and got hit right away again. ... The direction is down, but the market is very careful at these levels and I don't think we are going to go down much further," he added.

COMEX December gold contracts lost $3.00 to close at $583, within a range of $588.50 to $576.60, and touching its lowest price since June 15.

Analysts saw prices touching further lows in the short term and trading in a range before resuming an upward path. Gold has shed 10.7 percent in just more than a week.

"This has been quite a shock to a number of people. It's the second big drop this year and it will take time for sentiment to recover," said Stephen Briggs, economist at SG Corporate and Investment Banking.

"The dollar is not declining despite what everybody is expecting, geopolitical tension is much less pronounced than it was and because oil has declined, there is slight disenchantment with commodities," he added.

"We have a combination of a stronger dollar and weaker oil prices and a significant weakness in the base metals and those three factors, I think, very much have gold cornered," said Jim Steel, a senior analyst at HSBC in New York.

The dollar gained against European currencies ahead of a weekend Group of Seven meeting, shrugging off benign U.S. inflation data that was viewed as likely to keep U.S. interest rates steady in the months ahead.

Oil slid to a six-month low at $62.03 a barrel as U.S. fuel stockpiles grew before winter and investors probed for a price that would trigger an OPEC supply cut.

"People are nervous. They throw gold away because they don't know what's going on. There's a panic liquidation. The next levels that people are looking at are $550, $545 and $530," said a dealer in Singapore.

"But I don't think metal players are that negative. I don't think we are going to hit $500 and below it. That kind of scenario is not present at the moment. People are just frightened by the speed of the fall in prices," he said.

The Invisible HandIran's oil bourse to be launched #1474869/15/06; 17:47:35

TEHRAN, Sept. 15 (MNA) -- Oil Minister Kazem Vaziri-Hamaneh said here on Friday that all preparatory requirements were arranged for launching the oil stock market in the country.
The Invisible HandWSJ understands something about IMF and the … gold standard#1474879/15/06; 18:04:39

When the International Monetary Fund and the World Bank convene their annual meetings in Singapore in the next few days, they will be eager to discuss a common problem: how to justify their existence in a world that no longer wants or needs them.
The more elegant term for this discussion is "reform" of the international financial institutions, which were born at Bretton Woods more than 60 years ago under the gold standard. In a world of floating exchange rates and open capital markets, the IMF's raison d'être no longer exists.
floating exchange rates?

The Invisible Handfloating exchange rates vs the gold standard#1474889/15/06; 18:31:34

The elite of those policy makers, finance ministers and central bank governors from the Group of Seven industrial countries meets on Saturday amid market speculation that they will renew pressure on Asian nations, particularly China, to let their currencies rise to help reduce global imbalances.
At the heart of the imbalances is the US current account deficit, which has reached 6.5 percent of its output, and corresponding surpluses in oil-producing countries and Asia.
Rato said the imbalances were a complex phenomenon that had built up over years. "It would be unrealistic to expect the problem to be resolved through a magic bullet," he said.


Do you understand now (after reading the WSJ snip in msg#: 147487) why the Bush regime wants China to let the exchange rate of the yuan float?

And why Henry Kissinger does not want a new world order but the kontinuation of the AngloAmericam dollar order?§ionfiltered=opinion&col

The crippled dollar-International Financial and Monetary System (IFMS) kontinues insisting on yuan float and oil prices.

Paulson is quoted as saying that Bejing would ignore at its own peril other countries' concerns about its exchange rate.

Why does Hanky not utter such menacing language vis-à-vis oil?

A yuan undervalued by 15% to 40%? This is a lot, but how the heck did Hanky the Yankee arrive at these percentages? Remember, we live in a world of floating exchange-rates.

China reduced (scrapped) tax rebates paid to exporters.
Why must Chinas be forced to do what the Yankees don't wanna do?

This is the CLASH between

The Chinese understood long ago that central banks’ gold reserves should be monetised and unmonetised gold (wealth) should be allowed to freely circulate.

Thoreauly@ The Invisible Hand#1474899/15/06; 18:35:30

Even things that float must have something to float on, and where money is concerned it floats on confidence.

Simply put, gold has the confidence of millennia on its side, while paper...

CamelWorth repeating#1474909/15/06; 19:09:44

Something everyone knows, but doesn't hurt repeating. As the old saying goes " the camel does not see the curve in its neck"

"In 1953, Iran had a democratic government. This is a very jarring thing for us to realize now because we are not used to seeing the word "Iran" and the word "democracy" in the same sentence. The fact is, however, that Iran was developing a long, rocky but democratic path in the early 1950s. For reasons which my book explains in great detail, the United States decided, in the summer of 1953, to go in and overthrow that democratic government. The result of that coup was that the Shah was placed back on his throne. He ruled for 25 years in an increasingly brutal and repressive fashion. His tyranny resulted in an explosion of revolution in 1979 the event that we call the Islamic revolution. That brought to power a group of fanatically anti-Western clerics who turned Iran into a center for anti-Americanism and, in particular, anti-American terrorism.

The Islamic regime in Iran also inspired religious fanatics in many other countries, including those who went on to form the Taliban in Afghanistan and give refuge to terrorists who went on to attack the United States. The anger against the United States that flooded out of Iran following the 1979 revolution has its roots in the American role in crushing Iranian democracy in 1953. Therefore, I think it's not an exaggeration to say that you can draw a line from the American sponsorship of the 1953 coup in Iran, through the Shah's repressive regime, to the Islamic revolution of 1979 and the spread of militant religious fundamentalism that produced waves of anti-Western terrorism."

The Invisible HandDe-monetarisation#1474919/15/06; 19:18:25

Monetarisation is the conversion into certificates to bearer (In the large sense: the recognition of debt as a means of payment.)

But de-monetarisation exists also.

Suppose that a notary public, the bureaucrat par excellence, would allow me sell my house for 20 kilogram gold metal, and thus without transiting over any certificate to bearer (central-bank money – gold is money, isn't it?). At that moment gold and my house would have been de-monetarised. This would be barter.

Since taxes are being levied upon central-bank money and are being paid with central-bank money, no taxes can be levied on this sale. This means that gold has been de-monetarised.

If you sell your house (for central-bank money), you are by the same token monetarising your house and you will therefore immediately be threatened by the tax collector for this monetarisation.

If you buy gold with the central-bank money, you have de-monetarised your house again. You have exchanged a debt-certificate for wealth-tangible.

Unfortunately, Leviathan has rendered this impossible. It is no longer possible to hand in your central-bank money to the issuer of that paper and claim your gold wealth. If it were possible, we would experience a bank-run.

The producer (issuer) of central-bank-money-debt certificates does no longer have to keep unmonetarised gold (wealth) in reserve because there is no way in which the available gold metal could cover the amount of debt-units.

This explains why the central bank will feel free to monetarise all its monetary and non-monetary gold reserves.

The fact that the central bank will feel free to do so does however NOT mean that it will do so ARBITRARILY (regularly under fixed price) as in the past. Quite to the contrary, it will do so UNDER A MARK-TO-MARKET (MTM)-REGIME.

Non-monetary gold (unmonetarised gold) must then completely disappear from/OUT OF the central bank circuit and thereby be de-monetarised.

This de-monetarised gold must then COMPLETELY be in private hands so that the correct "value" of gold can be universally determined on a CONTINUOUS basis.

Linguistic remark: the difference between "de-monetisation" and "de-monetarisation" is not clear to me.

Thoughts, anybody?

TownCrierCentral Bank Gold Agreement – Will they sell 170 tonnes by 26th September?#1474929/15/06; 19:21:43

14 September 2006 (Gold Forecaster) --

Some analysts have reported that up to 370 tonnes of gold have been sold under the present agreement this year, but the figures reported by the E.C.B. just do not support this... Nor do the figures reported by the World Gold Council support this. ...IF we include the tonnage sold by Germany for coins at 26 tonnes equates to around 330 tonnes [these are approximate as the tonnage sold is reported in the €.] So the shortfall is around 34% from the ‘ceiling’.

Will these Central Banks sell +170 tonne, in the next 10 days?

...the concept that 160 to 195 tonnes of gold would suddenly be dropped onto the market is just out of character...

Hence the rumors of Central Bank massive sales are just that, rumors!

We believe the fall against seasonal rise in demand is due almost entirely to the funds believing that gold is tracking oil and acting on that with as much aggression as they can. This has been effective. This leaves the funds either short or moving to very low long levels.

Should demand push prices back up, we have no doubt that the funds will reverse their stance and take the price back up.

The gold price has demonstrated that it is driven by forces outside the pure jewelry and industrial aspect of the gold market, with the commodity aspect acting effectively only when Investors are sidelined. Investment forces are greater than underlying commodity market features.

We believe this is a set of moves commensurate with the evolution of the gold market and expect great volatility from now on, prompted by macro-economic and currency [plus oil] events.

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


Ten BearsSILVER MONEY FOR MEXICO #1474939/15/06; 19:31:39

Hugo Salinas Price
We must understand that the financial sector in all parts of the world creates this so-called 'money' out of nothing and that it is the financial sector which is the first beneficiary of this fraudulent creation. This is the reason that we see luxurious towers erected in Mexico City and in all capitals of the world. They represent the (involuntary) transfer of purchasing power from the People, to the financial sector.

The monetization of silver would act as a balm for a wounded country. It would provide a base for the beginning of concord, a sign of nationalism that the Left is anxious to see and which would not bother the Right at all - what is more, the Right would also love the possibility of saving in silver.

For this reason I shall continue to insist upon silver as a lifesaver for Mexican salvation. It is not going to resolve all our problems, but it will be a soothing balm that will be very welcome, even though the full cure may take a long time; monetized silver places us on a road which gives us hope.

Ten BearsUS Housing Hits The Wall#1474949/15/06; 19:35:53

peter richardson
The boom, delayed by cyclical adversity over several periods, was completed
in 2005.

We will be swinging from a sellers market to a buyers market. the prime
house sellers in the years ahead, people aged 50-69, will jump from 41
million to 56 million.

Programs involving options will be set up to insure against housing
price declines and will be maintained by mortgagers and offered to
sellers by insurers.

Many are looking for a major bust in housing. The Fed and the Treasury
staffs have been studying this for years. In a fiat money world, only
the stupid underestimate the talent of private and public sector
financial engineers.

The Invisible HandDollar-hegemony, is that not something neo-con?#1474959/15/06; 19:54:46

We have thus two sister organisations meeting
-the World Bank which is being attacked by BRITAIN for its neo-conservative agenda
-the IMF whose International Monetary and Financial Committee (IMFC)
(not to be confused with the dollar-International Financial and Monetary System (IFMS))
is currently chaired by BRITAIN's Chancellor Gordon Brown

Are we witnessing a break-up of the AngloAmerican camp?,,1873947,00.html

· Wolfowitz denies row after UK holds back funds
· Critics attack leadership's 'neo-conservative' agenda

Larry Elliott in Singapore and John Aglionby in Batam
Saturday September 16, 2006
The Guardian
Paul Wolfowitz last night sought to mollify critics of his stewardship of the World Bank as evidence emerged of a growing rift with Britain and other European nations over the alleged neo-conservative agenda being pursued by the Washington-based organisation.
The International Monetary and Financial Committee (IMFC), which is currently chaired by UK Chancellor Gordon Brown, advises the Board of Governors and will discuss the outlook for the global economy and developments in financial markets. At the 2006 Annual Meetings, the committee will review the implementation of the IMF's Medium-Term Strategy with a focus on IMF governance (voice and representation) and on adapting the IMF surveillance framework. The IMFC will also examine the IMF's engagement with emerging market countries; and IMF support to low-income members in achieving the Millennium Development Goals. At the conclusion of its meeting, the IMFC will release a communiqué, which will be followed by a press conference by Chancellor Brown and IMF Managing Director Rodrigo de Rato. For more details, see the Annual Meetings'

The Invisible HandThis guy is krazy!#1474969/15/06; 21:23:15

IMF managing director Rodrigo de Rato said global financial imbalances were unlikely to be resolved in the short term
The IMF hopes discussions will bring about shared analysis and understanding of the consequences of imbalances
What about the solution(s)?

The Invisible HandIMF schizophrenia, says The Australian#1474979/15/06; 21:30:10,20867,20419433-643,00.html

For all its talk of risks, the IMF's best bet (its central forecasts) is still on good growth through 2007. As for the global imbalances it frets about, here is its latest view:
"The MOST LIKELY outcome is still a gradual and orderly unwinding of the imbalances over a number of years."
Who's John Galt?

The Invisible HandGot gold?#1474989/15/06; 21:34:35

IMF head Rodrigo de Rato has warned that INFLATION RISKS and global trade imbalances mean "testing times" for the world economy in the months ahead.

The Invisible HandHa Ha Ha#1474999/16/06; 01:19:38

SINGAPORE -- The U.S. and its major allies are working to give the International Monetary Fund greater power to crack down on countries that meddle with exchange rates to gain an edge in international trade.
At a series of meetings here this weekend, top financial officials from the Group of Seven major industrial nations are expected to press for new IMF rules that would make it easier for the global economic watchdog to brand a country for manipulating its exchange rate -- and, in theory, embarrass it into stopping.

The Invisible Hand G7 to discuss petro-euro#1475009/16/06; 01:43:49,2828,ticker-26607706,00.html

In a joint press-conference this morning with Axel Weber from the German CB, the German finance minister says that one of points the G7 will discuss is what happens to the petro-dollar.

[bei einer gemeinsamen Pressekonferenz mit Bundesbankpräsident Axel Weber am Samstagmorgen in Singapur, wo die G-7 im Vorfeld der Jahrestagung von Internationalem Währungsfonds (IWF) und Weltbank zusammenkommen. sagte Bundesfinanzminister Peer] Steinbrück , die G-7-Minister würden zudem das US-Defizit,

die Frage "WAS PASSIERT MIT DEN PETRODOLLARS", die "erheblichen Investitionen der chinesischen Exportindustrie" sowie Möglichkeiten einer Erhöhung des Potenzialwachstums in Deutschland und der gesamten Eurozone sowie eine stärkere Koordination der EU-Finanzpolitik erörtern.

The Invisible Hand (9/15/06; 17:47:35MT - msg#: 147486)
Iran's oil bourse to be launched
TEHRAN, Sept. 15 (MNA) -- Oil Minister Kazem Vaziri-Hamaneh said here on Friday that all preparatory requirements were arranged for launching the oil stock market in the country.

The Invisible HandMoney is a political issue#1475019/16/06; 01:58:20



During the short period 2000-2006, the US of A stock market lost and recouped $8 trillion against a GDP of $10 trillion. Yihaaaa

Private debt lost $8 trillion backing and regained it in no time. Simply amazing what central bank money monopoly can and is willing to achieve.

This happened under the derivatives-regime, where risks are being completely socialised and the speculative profits are being privatised.

And now there is the other (backing) bubble : Housing.

Impossible now to have a period of "tight-money" (reconcentrating wealth) that should follow the "easy-money" period (spreading wealth). Impossible to continue in the present "stagnation"- perpetual equilibrium (stagfla).

The bubbles and their debt mountains desperately NEED,and will get, HYPER PRICE INFLATION. Most probably this general infla will not be of the spreading wealth-type anymore...but rather devastating for the majority in the bubble regions.

The IMF knows all about the present stagnation-mode we are in and knows that getting out of it is impossible without devastating action - to be taken exclusively by the system that created this deadlock situation. The IMF is however unable and/or unwilling to take this action.

Gold's time has come and nothing can stop an idea whose time has come.

The Invisible HandStrong G R O W T H#1475029/16/06; 02:07:22 is a political issue

SINGAPORE (Reuters) - The world's leading industrial countries are enjoying strong growth but face the risk of rising inflationary expectations, tight energy markets and spreading protectionism, a draft communique of the Group of Seven rich nations says.

The statement, to be released later on Saturday after talks in Singapore among G7 finance ministers and central bank governors, makes a thinly veiled call for Asia to let its currencies rise faster to help reduce global economic imbalances.



So why don't these "leaders" simply keep ENJOYING it?

If this "strong growth" is resulting from having SYSTEMIC GLOBAL IMBALANCES,
how the heck can these so-called leaders have any reason to "ENJOY" this kind of strong growth?

This is just Another illustration of how desperate the whole situation is and will remain for some time to come.

This also explains (should explain) gold/goldprice's BEHAVIOUR.

The Invisible HandIf this is not socialism, what is it?#1475039/16/06; 04:19:55

A draft of a statement to be issued on Saturday makes clear the G7's view that Asia and oil-producing states are not pulling their weight in the collective management of the global economy.

geJanszen releases Ka-Poom V2.0#1475049/16/06; 08:03:19

GoldiloxIMF- Manipulation policy#1475059/16/06; 10:28:20

@ TIH,

What they mean is, the IMF will "crack down" on those who "manipulate" the currency exchange in the opposite direction that the Money Masters themselves manipulate it.

BOJ's zero interest policy to support the carry trade is NOT manipulation?

PPT fire drills everytime the dollar starts a fundamental "correction" is NOT manipulation?

Holding PoG to 1/4 of its nominal "value" is NOT manipulation?

Phony hedonistic BLS and FED statistics are NOT manipulation?

Ha ha ha, indeed. Who are these clowns kidding?

KnallgoldGold now#1475069/16/06; 10:44:21

"Cometose (9/15/06; 09:04:12MT - msg#: 147481)
rosie .........,
I'm sure we're going up on the sm averages.......

to new all time highs .......

with peace breaking out in the mideast ......

lackluster huricane season ........

gas dropping like a rock .........

and oil overflowing from the strategic reserves everywhere
where oil might be needed or wanted......

CRB breaking it's 3/4 year trendline...

: INFLATION TAMED......... "

What you describe are actually the best conditions for Gold to advance.Remember,Gold will rise when it is doing the least damage.

Ah,while on it,has anyone been a bit surprised about the recent words out of Iran afer the EU/Solana visit,that they are now considering a pause in their Uranium enrichment?After months of intense negotiations they always stuck tight to their position-now what has changed their mind so suddenly?I remember a renowned mid-east commentator once saying that in this nuclear poker,Iran wants to deal out the highest possible price for their cooperation.Maybe they got the rest of the WAG quota,or/and the EURO oil bourse matter is somehow interwoven.

GoldiloxTHE END OF GOLD'S BULL MARKET, NOT!#1475079/16/06; 10:53:24


Over the past several days gold prices have plunged by over $60 per ounce and silver prices have dropped by close to $3 per ounce. Popular excuses for the carnage include lessening tensions in Iran, falling oil prices, and diminishing inflation fears. However, I am convinced that the decline has nothing to do with changes in the underlying fundamentals for either metal. In fact, with this week's release of yet another record high monthly trade deficit and continued evidence of a rapidly deteriorating housing market, those fundamentals have never been better. How then do I explain the sharp recent declines?

This leg of gold's relatively young bull market has been characterized by sharp down-side volatility. Every time gold and silver appear to be poised to break-out, that is precisely when they get hit the hardest. The reversals are often sharp and quick, come without warning, and defy easy explanation. Reluctant to appear clueless, the media and Wall Street experts confidently identify fundamental causes, but their explanations rarely have anything to do with the decline. This must be extremely frustrating, not to mention costly, for momentum players who routinely buy on strength.

The purpose of these sharp declines is two fold. First, it helps purge the weak hands from the market, including the momentum players, highly leveraged speculators, and "Mad Money" aficionados. Second, it helps interject a healthy dose of fear into the market, and helps erect a steep "wall of worry" for this bull market to scale.

Bull markets hate excess baggage, and before the next big surge higher, all that excess baggage must be ejected. After the momentum players have been burned once too often, the stage will be set for a major advance. Gun shy from previous false break-outs, such players will be too timid to pull the trigger. As such, they will remain on the sidelines, watching in fear as the train finally leaves the station without them.

Many people feel that these declines are orchestrated by central banks or major investment houses. It's possible that the conspiracy theorists have a point. But in reality, it makes little difference. All they are doing is creating excellent buying opportunities for the rest of us. Remember, though they may be able to slow gold's ascent, they can not alter its trajectory. If they could, would gold have really risen from below $300 per ounce to its recent high above $700?

Gold's bull market is far from over. In fact it has barely begun. The fact that each correction is immediately interpreted as being the bursting of a bubble, with precipitous declines looming on the horizon, actually supports this view. Genuine bull markets, especially those that take on bubble like proportions, seldom fail to make record highs. In the case of gold and silver, neither has achieved such milestones. When prices are adjusted for inflation, they haven't even come close. Believe me, by the time this bull market really ends, those highs will be distant memories.

Remember, this metals bull market has its roots in a looming global currency crisis, as the dollar, and those other fiat currencies backed by dollar reserves, are increasingly shunned by enlightened savers. As they re-discover gold as an alternative, its appeal, and therefore its price, will ultimately surge. The global economic imbalances are stretching to a breaking point. The dollar's role as the world's reserve currency, and the borrow and spend U.S. economy it supports, teeter in the balance. This may well be one of the last great buying opportunities of this leg of the bull market. Do not let it pass you buy. If ever there was a gift horse, this is it. Rather than staring dumfounded into its mouth, simply reach into your pocket and grab your last remaining greenbacks and buy all the gold and silver you can get your hands on.


How many times recently have we heard, "This is the LAST buying opportunity"? Crying "wolf" itself is oversold, as we have been exhorted to BUY at 700, BUY at 650, BUY at 600, and BUY again at 575. Are we expected, like the PPT, to have bottomless sources of BUY capital?

More likely, the gold analysts are as correct as a broken watch - twice a day!

Bizarro-GreenspanSierra Madre,Mundell#1475089/16/06; 11:19:44

He is right at this point in time.
Bizarro-GreenspanThis one's a keeper#1475099/16/06; 11:35:57

"Let me simply say that a FREE market could in no way contain the enormous imbalances that we witness (and are forced to struggle with) today, as its sound-money basis would preclude it. So while I recognize that a market of sorts exists, it is one that is doomed to collapse and thus, in the near term, to play into the hands of those who will blame "market failure" on what is in fact the unraveling of a gargantuan statist fraud."


Bizarro-GreenspanFOA#1475109/16/06; 11:49:38

"If I had a nickel for every time we thought the dollar was finished, I would have a bunch of nickels!"
Bizarro-GreenspanShort and sweet#1475119/16/06; 12:30:48

"In the European Union (EU) we may have seen the high watermark of the monopoly-money ideal. Those nations that signed up for the euro have submitted to a supra-national central bank.

Not a voice was heard from official sources that a total free market in monies might be more fruitful and more interesting. This was the hoovering up of monetary diversity into a Commission-derived monopoly The notion that lays unspoken in so much public debate is that the state is the repository of a wisdom and benevolence not to be found in the vulgar rough and trouble of the market.

I contest the notion civil servants, in this case central bankers, are disinterested guardians of the public good. They are the eternal exponents of monetary nationalism as well as inflation.

I do not claim my notion is original. The first person to write on this theme was Professor Benjamin Klein. Other liberals, in the old sense, have doubted the sense in gifting such a role to the political class.

Perhaps the most arresting essay on this topic was Hayek's seminal "The Denationalisation of Money". Hayek argued that it is only numismatists that have no illusions about central banks. The great inflations of the past such as Diocletian or Henry VIII were all attributed eventually to rascals (perhaps we should say crooks?) adding base metal to the coins, clipping their coins or, when it came to paper money, simply printing much more than they said they would. The issuing of extra money empowers the state.

Professor Hayek argues that money does not need to be created by a single authority but, like laws and language and morals, it would emerge and evolve spontaneously.

I am not arguing for a return to a semi-religious worship of gold but I do observe it's central attribute, beyond its lustre, that the supply of new gold is very restricted while new money is simply a printing press act."

mikalLimping away from loans#1475129/16/06; 12:42:52

Liar's Loans | Bill Bonner | FMNN | SEPT 15
Relates relevant anecdotes from a recent trip to, and a speech given in, Ireland.

mikalDivvying up derivatives#1475139/16/06; 13:02:47 Dogs in Bulletproof Vests by Bill Bonner - 09-16-06
Exploiting "homeland" defense contracts at the end of the housing and defense era.

Ten BearsScatter shooting after browsing the blogs and archives#1475149/16/06; 13:35:48

ORO, "Production moves away from the source of money creation".
Since production creates wealth, true wealth (production capacity) also moves away. What returns is a skewing of income distribution toward those with the money creation franchise (and their cohorts).

Napoleon Bonaparte,"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain".

America is great because she is good. If America ceases to be good, America will cease to be great." Attributed to Alexis de Tocqueville

Ernest Hemingway, "The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. And both are the refuge of political and economic opportunists".

Mission accomplished: Those were the words which flowed from President Bush on the deck of a navy carrier what now seems like ages ago.
Perhaps now they are true. Iraq is destabilized, on the way to being divided into at least three warring camps. The Jewish state is safer, their neo-con supporters are happy, and American bases are in place.

Within the parameters of the phony debate in the corporate media, the Rush Limbaugh and Fox news crowd contend that the Government can do no right and Corporations can do no wrong. What is not mentioned is that the same corporations, whose supposed competence is touted so vociferously, are themselves the current controllers of the government.

The one party with two names (democrat and republican) offers a Hobson's choice at every political level.

"A monetary system which at its hart is fundamentally dishonest is unlikely to foster the development of honest business or governmental institutions."

The reason that people buy gold: fundamentally,they do not trust paper!

Bizarro-GreenspanTen Bears,ORO always was gold to me#1475159/16/06; 14:24:03

"ORO (10/25/00; 16:16:57MT - msg#: 39904)
goldhunter - supply and demand of what?
Supply and demand of paper - trading at 1000 tonnes per day would most definitely overwhelm a physical trade of 2500 tonnes of new supply per year and perhaps 10000 tonnes changing hands per year.

So long as bankers have a warehouse that delivers physical gold against a paper claim, then the futures market is setting 90% + of the price. The banks are already behaving as if their warehouse is emptying. The price is indicating a discount on gold obligations rather than a lack of demand for either gold or its paper substitutes. Basic economics teaches us that a speculative player expecting prices to fall will directly or indirectly cause an emptying of inventory if he is incorrect. The clear process of emptying the banker's warehouse is the reason for the bankers looting all the central banks. The gold derivatives show a distinct tendency of banks in general to be short on gold, at least by a 2:1 ratio - the ratio of a gold short position that is delta hedged.

As for your insistence that a market like the gold market can at any time be an actual market dominated by supply and demand expectations, I wish you good luck in bankruptcy court as you try to get something paid out from the futures and options you bought thinking that this market was "real". I expect you will milk as much from this as you would from a paper cow."

Ten BearsBizarro-Greenspan 147515#1475169/16/06; 14:55:23

Thanks for the ORO reference.

OEO was a person of great knowledge. I do not suppose that anyone knows what happened to stop the sharing of that knowledge on the net?

Bizarro-GreenspanHello,Ten Bears#1475179/16/06; 15:25:35

It's good to see someone else shares my opinion of ORO.

His output was prodigious,he must have spent countless hours composing his posts,for little obvious reward,that I could perceive anyway.

He turned up at ANOTHER gold site,he had his own commentary site called ORO's Vault,which,unfortunately,is no longer available.

His last posting were in May of 2003.

He indicated at that time that he had been in a serious car accident and it was very difficult for him to post anymore.

I sure miss him,he was like a ever-ready flashlight in the misty,convulted labyrinthe that is today's gold market.

"Euro 350,the line in the sand",was his last great call.

Check out the LT Euro gold chart,you will see what I mean.

The Invisible HandThey have no brain!#1475189/16/06; 17:19:10

China allows only limited movement in its currency, the yuan.
Many think that a more flexible approach would make China less competitive and so REDUCE THE US TRADE DEFICIT.
Voting system
The G7 also noted a danger of what it called "PROTECTIONIST TENDENCIES".
"reduce US of A trade deficit " and then the next sentence speaks about "protectionist tendencies".
Are the Amerikans exempted from the prohibition of protektionism?

CamelAnything Goes#1475199/16/06; 17:42:45

There certainly seems to be a wide a variety of libertarians and one should probably not try to paint them all with one brush.

There seems to be an element of them that think it improper for an entity such as the US Government to try to shape the future, or even plan for the future. One need only point to the Internet and the space program or Social Security to refute them. The problem is that these entities are financed with borrowed , even fraudulent money, and, like war, if the people actually had to pay for them maybe they wouldn't have so many. With $350 billion a year going to pay interest on the national debt , something has run amok.

There is a third kind that view the big corporations as synonymous with some idealized mom and pop craftsman living up on a mountainside. These are the ones they bring out on TV every so often to defend the tobacco industry ( who just happens to finance their think tanks.)

That's what a I am, a mom and pop cratman living up on the mountainside and I can assure you I am not the same as a big corporation.

Then there are the anarchists and libertines. Rand herself was sort of a libertine , for her day, though all pretty tame by today's standards. To quote Cole Porter .... Anything Goes....and as I recall she wrote extensively against the Church. I do like her books though ,My favorite is The Fountainhead.........the creator is entitled to their creation..

And, like Rand, many are down on the Catholic Church as it continues to foment population growth while they should be leading a concerted effort to slow it down, particularly in Latin America where they are so influential.

That's one reason the Reagan free market policies of the 70's were so bad. In evolutionary terms it may have allowed an expansion of the population beyond the carrying capacity of the environment , Of course eventually it will correct itself , but at what cost ?? Better to use the mind to anticipate and solve problems before they result in disaster.

The Invisible HandMore US of A protectionism vis-à-vis China#1475209/16/06; 17:59:26


Spurred by concern about China's growing economic might, Germany is considering a plan for a free-trade zone between Europe and the US.

A senior aide to Angela Merkel said the chancellor was "interested" in promoting the idea as long as such a zone did not create "a fortress" but rather "a tool" to encourage free trade globally, "which she is persuaded is a condition of Germany's future prosperity
Two of Ms Merkel's most senior advisers, Jens Weidmann on economic policy and Christoph Heusgen on foreign policy, have warned her the initiative could be construed as PROTECTIONISM.
Yet the notion has struck a chord with Ms Merkel, who has often called for "a global framework of rules" – MINIMUM SOCIAL, ENVIRONMENTAL AND ETHICAL STANDARDS – to prevent competition from sophisticated yet authoritarian low-wage economies eroding western achievements in these domains.


It is clearly said. Merkel wants to protect minimum social, environmental and ethical standards

This is TAFTA, Transatlantic Free-Trade Association again.

This means a euro-dollar coalition. This protectionism has consequences for gold.

....the west needs to pull together...
...Merkel called for - a global framework of rules

This could well explain why the ECB and the European System of Central Banks (ESCB) are helping the dollar to freeze the price of gold.

The Committee on Economic Affairs and Development of the Council of Europe (not to be confused with EU) devoted its 6 June 2000 session to the prospects for a new transatlantic trade relationship.

This could well be a negative element for gold.
All the gold action will then have to come from Asia.

Hence the protectionism vis-à-vis China.
Doc. 8752
6 June 2000
Prospects for a new transatlantic trade relationship
Committee on Economic Affairs and Development
Rapporteur: Mr Bonet Casas, Andorra, Liberal, Democratic and Reformers’ Group
Transatlantic trade and investment - long a cornerstone in the world economy - need new impetus in order to ensure greater prosperity, a continuation of close and stable political relations and improved prospects for world economic relations within the World Trade Organisation framework. Such a new transatlantic trade relationship, the report maintains, should have a wider focus than the traditional US-European Union one - at a time of EU enlargement, pan-European economic integration, progress within NAFTA (North American Free Trade Agreement) and hemisphere-wide trade liberalisation in the Americas.
The report underlines the support of the Council of Europe's Parliamentary Assembly - strengthened through Canada's and Mexico's recent observer status - in favour of efforts further to strengthen transatlantic economic links. The Assembly offers its assistance in this process in its capacity as a parliamentary forum for numerous international institutions in the economic and financial field. Parliamentarians, the report concludes, must ensure that the CONCERNS OF CITIZENS - BE THEY SOCIAL, CULTURAL, ENVIRONMENTAL OR LABOUR-RELATED - are not forgotten as we shape the economic relations across the Atlantic and across the world in the new century.

The Invisible Hand; again, protection of these concerns.

And then the global imbalances led to the Revolution.

The Invisible HandGive anarchy a chance!#1475219/16/06; 18:11:22

"Internet, the space program , and Social Security refute the thesis that it is improper for an entity such as the US of A Government to try to shape the future, or even plan for the future."

You mean without Big Brother, "we" would have had no internet and no space programme?

You mean Social Security means security for everybody?

"Better to use the mind to anticipate and solve problems before they result in disaster."

You mean internet, the space programme and Social Security are developed by a mind (and financed at the point of the IRS gun)?

What have the space programme and the internet to do with disaster?

Are there no more poor people in the US of A since advent of Social Security?

Tax is theft! Government is fraud!

GoldiloxGold recovers on fresh buying#1475229/16/06; 18:33:18


MUMBAI: Gold attracted good buying support from local jewellers and stockists on the bullion market here on Saturday after the metal crashed to a three-month low of Rs 8690 yesterday.

The demand from jewellers was quite higher in view of the forthcoming festive and wedding season, dealers said

"Jewellers are just waiting for the prices to fall so that they pick up the metals at lower prices to make jewellery for the coming wedding and festival seasons", they said.

Silver also ended with fresh gains on good support.

However, both the metals were trading sharply weak in the global market yesterday.

Standard gold (99.50 purity) opened firm at Rs 8730 and rose further on increased offtake, before ending at Rs 8735, showing a good gain of Rs 45 over the previous close of Rs 8690. Pure gold (99.9 purity) firmed up by Rs 50 to Rs 8790 from Rs 8740 yeste rday.

In the overseas market, gold fell by $3 to $583 per ounce on increased offering.

Ready silver (.999 fineness), after a firm start at Rs 17,690, met with fresh resistance at that level and softened to end at Rs 17,680, still Rs 35 higher than the previous close of Rs 17,645.

The Invisible HandSCO and Iran#1475239/16/06; 18:41:15

Prime Minister Daniyal Akhmetov of Kazakhstan told reporters that he suggested the next meeting of the SCO prime ministers' council should pay more attention to the
which he called necessary to further link the energy co-operation among the member states.

Uzbek Deputy Prime Minister Rustam Azimov said the economic projects, on which agreements were reached during the International Shanghai Conference, cannot be implemented without the cooperation of Iran, as a significant regional country.

In the wake of Iran’s current high-stakes nuclear standoff with the United Nations Security Council, Venezuelan President Hugo Chavez told Iranian President Mahmoud Ahmadinejad at a meeting of the Group of 15 developing nations that "Iran is under threat; there are plans to invade
Iran, hopefully it won't happen, but we are with you."
If Venezuela and Iran managed to create global flight of FOREIGN-EXCHANGE RESERVES AWAY FROM THE DOLLAR AND INTO THE EURO, the move could cause the value of the U.S. currency to collapse.

MKTen Bears, Oro#1475249/16/06; 19:13:57

All we ever asked of Oro is that he submit to the rules of this forum. No one is above the rules. Not Oro. Not Another. Not FOA. No one.

At this juncture, if Oro would like to begin posting again, all he need do is submit his request for a posting code directly to me:

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

It will be granted. I know at this juncture that Oro would not attempt to circumvent or break the rules, and I would welcome him back. In fact I would greatly look forward to it, as I believe he belongs here.

I never had a poblem with Oro's message. Instead, I would hope to gain by it.

The Invisible HandChina and the West on brink of trade war #1475259/16/06; 19:32:27

China and the West were on the brink of a trade war last night after Europe, the United States and Canada said they were taking the Asian tiger to a world tribunal over car parts.

As the IMF warns that the good times may not last, Heather Stewart gives six reasons, from oil prices to bird flu, why growth cannot be taken for granted
Sunday September 17, 2006
The Observer
Not so long ago, central banks believed they had beaten the inflation demon, with the help of a glut of cheap products from China, India and other low-cost economies. But oil prices have more than tripled since the beginning of 2002, creating an inflationary surge that the bankers may struggle to contain.

Is the "China effect" — low-cost imports that have helped to keep prices down — coming to an end?
So PROTECTIONISM could be the biggest risk. Left to its own devices, the China effect has many years to run. Protectionism, if allowed to take hold — and the collapse of the Doha world trade round was a pointer — could cause this era of globalisation begin to run into the sand, and deprive the world of its contribution to low inflation. China would probably do pretty well, even in these circumstances. For the rest of us, things might not be so good.
Russia's natural resources ministry has stepped up its pressure on foreign oil companies amid increasing signs of the state's tightening grip on the country's energy industry.
If today's epic US borrowing does end in tears, and if world leaders fail to help the IMF get the job done, history will not treat them kindly. Instead, they will be blamed for not seeing an impending catastrophe that was staring them in the face
The crisis of the Bretton Woods institutions must be seen as part of the same phenomenon that has overtaken the World Trade Organization, whose latest round of trade liberalization negotiations fell apart in July.

MKThe message below#1475269/16/06; 19:33:49

would have been submitted in private if possible. I have no way of contacting Oro directly, or I would have long ago. MK
USAGOLD - Centennial Precious Metals, Inc.Serving the lie: Why the gold conspiracy isn't all it's cracked up to be#1475279/16/06; 20:29:28

Posted in several parts earlier in the week, Chris Powell has kindly assembled and edited these commentaries by Michael Kosares into a stand-alone abridgement for the GATA readership.

You can read it at the link above.


In my view the Washington Agreement was signed to abort runaway gold loan volume. Previous to the agreement, gold loans were compounding in what might be described as a fractional reserve lending system. Red lights began to flash in certain quarters, and Rothschild led the way in calling for more "transparency" in the gold market and a new system to deal with the burgeoning gold lending market.
It is a given that the major players with their concentrations of capital and power will endeavor to move the markets in their direction. Some will view this as conspiratorial; others will view it, as I do, as just market elements that need to be figured into the equation.

If, in this example, the conspirators were to drive the price of a group of commodities lower, what would be the result?

A buying opportunity for those who have a need for or believe in the long-term value of that commodity.
Gold is a good example in this regard. Let me assure you that the East lies in wait, just hoping for lower prices.

...I believe that those who believe that the conspirators are godlike in their powers miss a good deal of the analysis by believing that the opposition resides on Mount Olympus. In my view, if the analysis ends there, it stops short.

Little do some analysts know how well they serve the lie by making others believe that those who are perceived as powerful can have their way unchallenged. In my view, a group can conspire to make a market do something but cannot continue for long if it is against the primary trend -- and cannot continue for long without substantial expense. As any student of ancient Greek literature knows, there is always a price to pay even if you dine with the gods and goddesses amid the clouds on Olympus.

We should ask ourselves a question:
If the anti-gold conspirators are so powerful, how did we get from $250 gold to $730 gold?...

Click link to view the whole commentary, dated September 12th.

The Invisible HandThe three stages of the introduction of the Petroeuro#1475289/16/06; 20:40:04

This article is from 30 August 2006


In drei Stufen soll das ehrgeizige Projekt gegründet werden.

-In Teheran wird eine Erdölbörse gegründet, die Preise nur in Euro notiert. Teilnehmer verpflichten sich, US-Dollar notierenden ... lbörsen zu meiden.
-Währungen der Teilnehmer werden an den ... lpreis gekoppelt. Zahlungsverkehr innerhalb der teilnehmenden Länder finden nur noch in Petroeuro statt (Barrelpreis/100 = 1 Petroeuro)
-Der Petroeuro wird Zahlungsmittel in den teilnehmenden Ländern. Sanktionen, militärische Angriffe oder währungsspekulative Offensiven, werden sofort mit einer Drosselung der Produktion beantwortet.

Vier Länder sollen bereits großes Interesse an der Realisierung des Projektes gezeigt haben: Venezuela, Indonesien, Malaysia und natürlich der Iran selbst.



The project will be introduced in three stages:
-First, the Iranian Oil Bourse will be established where oil will be traded in euro
-Then, the currencies of the participants will linked to the price of oil and trade within the participating countries will occur only in Petroeuro
-Finally, the Petroeuro becomes the means of payment in the participating countries.

Four countries are very interested in the realisation of the project: Venezuela, Indonesia, Malaysia and, of course, Iran itself.


Why it will be called the Petroeuro and not the Petrodinar is not clear to me.

With the upcoming Sino-West trade war, it will be interesting to see how the Chinese community (part of the Chinese diaspora in East Asia) in Indonesia and Malaysia will react to the Petroeuro. Will the diaspora convince the country of origin (China) to adopt the Petroeuro also? This would then vindicate this lunatic who was arguing in September 2003 that it is China, not Europe, which would lead the way to Freegold.

Now that the gold developments in the US of A and Europe are negative for gold,
(Today's msg#: 147520
it is refreshing to see that China could do what is necessary to achieve Freegold.

Now that I am talking ethnicity. The Malays constitute the dominant ethnic group in among others Malaysia, Indonesia, and the Philippines

Malaysia and Indonesia will be adopting the Petroeuro. The Philippines not.

As Henry C.K. Liu observes
The Philippines is a living example of failed American democracy, which Bush understandably did not mention in his speech on world democratic revolution.
The US government during the Cold War used the threat of communism as the pretext for tightening US hegemonic control over the Philippines.
Of all the factors that obstructed the development of democracy in the Philippines, US policy occupied the top of the list.

Many Filipinos perceive the [Philippine] peso's value in relation to the US dollar and tend to blame whatever regime is in power for the worsening exchange rate.

If the dollar collapses, it will be interesting to see whether the Filipinos will, like their Indonesian and Malaysian brothers, adopt the Petroeuro.

This would then be STAGE FOUR of the introduction of the Petroeuro.

mikalHigh costs, delays, invitation to bribes and cronyism#1475299/16/06; 21:24:05

Import Certificates Proposed to Narrow U.S. Trade Gap - Xinhua News Agency | 09-16-06
Any company that wants to import goods into the UnitedStates would have to get a government certificate, under a plan to eliminate the nation's trade deficit proposed by two Democratic senators Thursday, The New York Times reported Friday.
"We're choking on trade debt and it is becoming a bigger and bigger danger to our country by the day," Senator Byron L. Dorgan of North Dakota was quoted as saying. "We need a new strategy, and that is what we are proposing today."
The U.S. trade gap reached a record 717 billion dollars in 2005 and is on track to exceed 800 billion dollars this year, according to the report.
Dorgan and Senator Russell D. Feingold of Wisconsin said the bill would create a market-based system to cut the trade deficit to zero within 10 years.
Under the measure, companies that export goods from the United States would be issued a certificate to import goods. The exporter could use the certificate or sell it to another company, the senators said.
The plan would be phased in over five years, with one dollar in exports earning 1.40 dollars in import certificates the first year, 1.30 dollars the second year, 1.20 dollars the third year and so on.
For oil, the phase-in period would be 10 years, to give the economy time to find and develop alternative energy supplies, the senators said.
Sherman E. Katz, a trade scholar at the Carnegie Endowment for International Peace, said the plan was an impractical approach to reducing the deficit that would burden American consumers with higher prices and anger trading partners.
"This is well intentioned, but it looks on the face of it to represent an enormous intrusion of government activity" into business totaling trillions of dollars each year, he said.
Feingold criticized the North American Free Trade Agreement and trade agreements with China and Central America that he said had contributed to the deficit and had led to job losses in the United States.

mikalBanks wait on the storm#1475309/16/06; 22:08:55,,1874094,00.html

The Observer | Business | Banks and borrowers wake up to that morning-after feeling | September 17, 2006
The Invisible HandPLEASE HELP OUT - Is this a joke? - Got gold? #1475319/16/06; 23:04:26

The world is enjoying its strongest burst of economic growth in 30 years, but the G7 warned of the risk of rising inflationary expectations, tight energy markets and spreading protectionism.
Apart from a call to revive the World Trade Organization's deadlocked Doha Round of market-opening talks, the G7 statement was silent on concrete policy initiatives to counter these risks.

The Invisible HandThe morning after#1475329/16/06; 23:30:19


SINGAPORE (Reuters) - International Monetary Fund chief Rodrigo Rato called on policy makers on Sunday to be ready for a slowdown in the United States, despite the prospect of strong growth in the world economy, and to tackle rising price pressures.
"There is a risk of a more disorderly unwinding that would imply a heavy cost for the global economy, especially given that foreign investors' exposures to losses from a U.S. dollar decline are large and growing," Rato said.

The Invisible HandHere's why the imbalances are not being tackled#1475339/17/06; 00:34:03


SINGAPORE (Reuters) - Squabbling over voting clout soured the International Monetary Fund's annual meeting ON SUNDAY as countries lined up to find fault with a plan crafted to reflect a shifting balance of power in the world economy.


HA HA HA - Got gold?

The Invisible HandCome and listen to my sermon!#1475349/17/06; 03:03:41
TEHRAN: Religious seminary schools across Iran were closed on Sunday in protest at remarks by Pope Benedict XVI that linked Islam to violence, state media said.
[State television] said that the heads of the main seminary schools in Iran's clerical epicentre of Qom "asked all scholars and theologians to gather for the protest which will be held (in seminaries) across the nation at around 10:00 am (0630 GMT)."
In place of normal lectures, students were expected to listen to sermons by theologians damning the pope's speech and then collectively ask the pope for an unequivocal apology.

USAGOLD - Centennial Precious Metals, Inc. (9/16/06; 20:29:28MT - msg#: 147527)
Little do some analysts know how well they serve the lie by making others believe that those who are perceived as powerful can have their way unchallenged.

...those who are perceived as powerful can have their way unchallenged...

"The powerful" - Give "them", the system, a name - the dollar-International Financial and Monetary System, (IFMS), for instance.

Are these human beings who are being perceived as powerful or is it a system?

Who or what is challenging the powerful? How is this challenge being structured?

Is the goldprice rise from $250 to $730 a sign/evidence of any kind of challenge ?

Why does the power of those who are perceived as powerful remain unchallenged?

Is that because of the word which is hyphened to IFMS?

Are the present troubles surrounding the IMF not the occasion par excellence to start discussing the power of the dollar-IFMS-defendants and of the challengers?
And to start listening to the sermons of both parties?

The Invisible HandThe reason why China should NOT revaluate the yuan#1475359/17/06; 05:01:27


Question : Inzwischen haben viele Länder in Asien, vor allem China, hohe Devisereserven aufgebaut. Schützen die genügend vor neuer Anfälligkeit?
Answer: Einer der Gründe für hohe Devisenreserven ist, externe Schocks abwehren zu können. China hat die größten Reserven, allerdings weniger als Schutzwall gegen Schocks, sondern um die Währung stabil zu halten. Die anderen asiatischen Länder haben vernünftige Bestände aufgebaut. Aber als Puffer können diese Beträge schnell aufgezehrt werden.

One of the reasons to have foreign exchange reserves is to be able to ABSORB EXTERNAL SHOCKS. China's foreign exchange reserves do not serve that purpose, but the purpose of KEEPING THE CURRENCY STABLE. Other Asian countries have devised clever instruments. Those instruments are not sufficient for China.
(Disclaimer: translation is bad.)
Dans le «panier» de la BPC, l'euro représente entre 10 et 15%. Il dépasse le yen, la livre et le franc suisse. Mais il reste un second choix. D'autres substitutions d'intérêt pratique, comme le pétrole avec la création d'une «réserve stratégique», les matières premières ou l'or, se heurtent à une même réalité : l'étroitesse de marchés déjà survoltés face à l'énormité du besoin chinois de placement.

In the basket of the People's Bank of China, the euro represents between 10 and 15%.
That's more than the yen, the pound and the Swiss franc. But it remains the second choice. Other substitutions of practical interest, such as OIL with the creation of a "STRATEGIC RESERVE", raw materials such as gold are confronted by the same reality: the narrowness of the markets which are already worked up ("survoltés") by the enormous Chinese need for investment.
SINGAPORE (Reuters) - China has no need to make a big change in the composition of its $954.5 billion stockpile of reserves, the country's foreign exchange regulator said in remarks published on Sunday.
Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told the publication Emerging Markets that China had already shifted some of its foreign currency reserves out of the dollar, diversifying most recently into the South Korean won.
"Over the past few years, we have already diversified our reserves away from exclusively U.S. dollar to other currencies -- euro, yen and we have also moved now to the Korean won -- so that's already evidence of diversification," she was quoted as saying.
CHINA DOES NOT DISCLOSE THE BREAKDOWN OF ITS RESERVES, the largest stash in the world. Bankers assume that at least two-thirds of the reserves is invested in dollar assets.


The Le Figaro article seems to indicate that there is not enough gold. So the price must …

Who knows how much gold is available in the Chinese reserves for the purpose of keeping the currency stable?

Yes "right", property rights and other human rights are not very well respected in China, but are they anywhere on this planet? Try to flee "your" country and see what happens (except if you have gold.)

The Invisible HandAnother reason for China NOT to revaluate the yuan#1475369/17/06; 05:18:20

Economist Joseph Stiglitz has always been something of a provocateur. A liberal academic and former chair of President Bill Clinton's Council of Economic Advisors who often argues in favor of government regulation, he won his 2001 Nobel Prize for showing how unchecked free markets can break down due to the imperfect flow of information. As chief economist at the World Bank from 1997 to 2000, he earned the ire of many Washington, D.C. insiders and the love of the developing world by accusing the Bank of doing more harm than good in places like East Asia.
Stiglitz: When the US first began pushing the Chinese to revalue their currency three years ago, there was a certain loss of credibility, because at that time the Chinese didn't have a multilateral trade surplus, but a bilateral one [with the US]. So, it appeared that the whole thing was more about US interests. Now, the trade surplus is multilateral, and that is suggestive of a problem. The question is, what's the best way to deal with it? One of China's real problems is that rural development hasn't kept pace with the rest of the economy. A currency revaluation would further hit the price of Chinese agricultural goods. Meanwhile, US agricultural subsidies are hurting China already (and the rest of the world to boot). So, unless we [stop subsidizing] our own farmers, we're really not on high moral ground, asking for a currency re-evaluation. So then what should be done about China's trade surplus? What I've suggested, and what China is doing, is to reduce VAT for exporters, which amounts to a partial appreciation of the currency. I've also advocated an export tax, which would do even more. In any case, I don't think that Paulson's plan would actually make things better for the US. As long as we have a huge fiscal deficit, we'll have a trade deficit. The only difference [assuming an appreciation in Chinese currency] is that we will buy textiles from Bangladesh, not China. That could make things worse, because while the Chinese are well aware of the global financial picture—if they don't hold a lot of dollar bonds, it could create global instability—the Bangladeshis are not. The Chinese have a strong incentive to help finance the US; others don't.

KnallgoldORO#1475379/17/06; 05:56:51

I thought he died not long ago???Do I mess this with the car accident?Surely would like to read him again.
GoldiloxIRS Orders All Saints to Yield Documents on '04 Political Races#1475389/17/06; 09:31:17


Antiwar remarks at All Saints in Pasadena were made two days before the 2004 election. The church is ordered to hand over records.
by Louis Sahagun

Stepping up its probe of allegedly improper campaigning by churches, the Internal Revenue Service on Friday ordered a liberal Pasadena parish to turn over all the documents and e-mails it produced during the 2004 election year with references to political candidates.

All Saints Episcopal Church and its rector, the Rev. Ed Bacon, have until Sept. 29 to present the sermons, newsletters and electronic communications.

The IRS investigation was triggered by an antiwar sermon delivered by its former rector, the Rev. George F. Regas, at the church two days before the 2004 presidential election. The summons even requests utility bills to establish costs associated with hosting Regas' speech. Bacon was ordered to testify before IRS officials Oct. 11.


"Selective" use of the IRS to quash anti-NeoCon sentiment. Note Pat Robertson and his 700 Club are never called to task by the IRS about using their television podium for "politics", even when advocating assassination of foreign leaders. It's another weapon in the arsenal against dissent. . . not unlike arresting protesters for "trespassing" in the "no-free-speech" zones.

Fortunately for the gubmint, the so far unsuccessfully challenged surveillance policies allow them to keep track of dissenters and prioritize the IRS "lists".

The same is true in "selective" use of SEC records. They can track every stock or commodity purchase they wish for tax purposes, but when it comes to pinpointing the 911 short-sellers, they are "unwilling" to follow the money.

CometoseCOT copper#1475399/17/06; 09:59:13

In spite of break of trendlines recently in copper prices ,

there has been negligible impact or effect in the positions the commercials are holding in Copper futures ......

If i had been sprinting for the past 4 years , i would need to take a breather as well.

Perhaps I will......

sometimes vigilance requires much more of us than we suspected(initially) .....before we made its acquaintance and were taken by it for a ride .........

may the rising tide lift us all EAGLES catching a thermal ........

they rise effortlessly after the conditions present reveal to them the existence of a thermal nearby.....

1000's of feet in minutes

Do your homework ,,,,have confidence in the information you have from your Due Diligence and Be patient ........

may we not all also walk in the footsteps of giants?

mikalMore players depend on risky derivatives #1475409/17/06; 10:27:10

CBOT to Trade Credit Derivatives | Bloomberg News | September 15, 2006
The Chicago Board of Trade says it plans to offer contracts based on credit derivatives next year.
The exchange, which plans a dollar-denominated, index-linked futures contract, is negotiating with banks and brokerages on using established indexes while also exploring the creation of its own benchmark, said Robert Ray, senior vice president of business development.
"I would put a circle around 2007," Ray said Wednesday. "The index route is definitely the way to go, especially at the beginning."
The $298 trillion global derivatives market is attracting greater interest among traders, brokers and exchanges as an easier way to bet on the direction of equity and commodities prices, interest rates and corporate debt ratings.
Credit-default swaps is the fastest-growing segment of the derivatives market. Last year, it doubled in size, to $17.3 trillion, according to data from the International Swaps and Derivatives Association.
Eurex AG plans to offer futures based on an index of European credit-default swaps. The Chicago Mercantile Exchange has said it sees "opportunities" in credit derivatives."
mikal-- CBOT joins the growing list of corporations and quasi-government institutions seeking protection in defaultable derivatives.
While the total quoted here, $296 trillion represents a conservative estimate by far, it still is large and metastasizing.

mikalCorrection#1475419/17/06; 10:30:53

I stated: "The $296 $Trillion...". It should read: "The 298 $Trillion..."
Goldilox911 gold#1475429/17/06; 10:34:45


What happened at the Top of the Towers that morning in many senses served the same purpose as a magician's wand- the events at the top were, in part, a sick sort of diversion, to draw attention away from the events going on at and below ground level.

As we all continue to learn more about this topic, we start to comprehend the grandiosity of the thefts and fraudulent transactions that took place under the umbrella of 9-11- specifically hundreds of billions of dollars worth of gold bricks which were surreptitiously liberated from their safety deposit vaults under the World Trade Center. Couple that with the realization of the verifiably true statement made by Donald Rumsfeld on September 10th 2001- wherein he announced that $2.3 trillion dollars in U.S. taxpayer funds had been misappropriated by Pentagon accountants and "lost".


I am continually reminded of the line from "Swordfish", where Travolta's character reminds us that the most important tactic is "misdirection".

Sierra MadreEXERCISES IN FUTILITY...#1475439/17/06; 10:59:31

The Lilliputian men gather in councils with imposing names, and attempt the impossible: how to make a system based on an irrational concept work as they wish it would work. The Lilliputian leaders strut about, solemnly declare their judgments, but arrive at the same place they came in: the International Financial and Monetary System isn't working to their satisfaction.

The International Bankers and the politicians have had a marvelous power-orgy together since 1971. Fiat for the masses has been an effective drug to induce passivity and acceptance in the world population. Bankers never had it so good; politicians have seduced the population of the world with inexhaustible handouts of credit and fiat provided by the bankers, and have furthered the degradation of humanity with the encouragement of sexual licentiousness to a degree never seen before. Drugged by fiat and engrossed with sex, the population of the world accepts the rule of the politicians and bankers – "democracy" just changes the faces but never the policy.

"How to live in dreams in a real world" should be the name of the program for the Singapore conference.

For those of us who prefer not to live in dreams, the final outcome of all this nonsense is clear: total disaster for the world. At some point in the future, the world's population, crazed by hunger and fear, will be slaughtering itself.

What Reality tells us: Mankind cannot work together in the peaceful division of labor without real money. Reality cannot be dealt with by means of illusions.

Gold in possession: it's wise to have some.


Chris PowellIran knocks bank boycott, considers dumping dollars#1475449/17/06; 11:01:23§ion_id=22&newsid=37910&spcl=no

Iran Vows Legal Action
on U.S. Move Against Bank Saderat

From Agence France-Presse
via Financial Express, Mumbai
Sunday, September 17, 2006

SINGAPORE, Sept 16 -- Iran has vowed to take legal action to challenge US sanctions on the Iranian lender Bank Saderat and has said it is considering shifting some of its foreign exchange reserves out of the dollar.

"We intend to take all legal recourse available to us and expect the International Monetary Fund (IMF) ... also to take an appropriate stance against this unilateral and illegal action, which can seriously disturb international payments," the head of the Iranian central bank, Ibrahim Sheibany, told the newspaper Emerging Markets in an interview appearing here Saturday.

The US Treasury Department announced September 8 it had taken steps to prevent Bank Saderat, one of Iran's largest lenders, from doing any business with US-owned banks on grounds that it supports terrorism.

"Bank Saderat facilitates Iran's transfer of hundreds of millions of dollars to (the Lebanese Shiite movement) Hezbollah and other terrorist organisations each year," said Stuart Levey, undersecretary for terrorism and financial intelligence.

Sheibany told Emerging Markets: "This move may cause us to distance ourselves from (the dollar), and I'm sure other countries are looking at us. Even now we are using other currencies, and this encourages us to get away from the dollar."

He said Iran could place its oil-generated revenues into "neighbours' banks," such as those in Saudi Arabia or Bahrain, and added: "We also have very good relations with European banks."

US Treasury Undersecretary Tim Adams told reporters earlier this week that financing for terrorism and "proliferation activities" would be on the agenda for Saturday's meeting here of finance ministers from the Group of Seven (G7), Britain, Canada, France, Germany, Italy, Japan, and the United States.

"Keeping the global financial system free from illicit activities, from those who seek to use it for proliferation of weapons of mass destruction and other activities is vital," he said.

Sheibany insisted that the US action was "100 percent political."

"Our banks are very transparent," he said.

He said Iran's specific challenge to the sanctions had yet to be determined but stressed that Tehran would "actively pursue" its arguments both legally and through the IMF, according to Emerging Markets.

Saturday's G7 meeting will be followed by the annual assembly here of the IMF and the World Bank.

mikalTalking Cameras: Social control of the future?#1475459/17/06; 11:10:23

Big Brother is Shouting at You | The Daily Mail | 09-16-06
This shortie is now making the rounds, satisfying some and enraging others. This may be crime prevention that's less expensive than other forms of detection, deterrent or "cure" and less drastic than heavy-handed and illegal measures sometimes taken on the streets and in homes and businesses. But it's so-far, limited utility is not enough to guarantee that this tech, like so may others, will not be exploited and abused.
In any case, if you own gold in hand, then you have less excuse to be in areas where trouble is likely to occur.
And in the best case, can afford other measures for yours and your family's personal security!

Chris PowellChina rebuffs G7 appeals to let yuan rise faster#1475469/17/06; 11:18:11

Despite pleas of G7, yuan will stay on its current track, says central bank chief.

From Reuters
Sunday, September 17, 2006

SINGAPORE -- China on Sunday brushed aside calls to take the yuan off its tight leash and said it would stick to its policy of letting the currency climb only gradually.

"The direction of reform is clear and our determination is firm. We will not backtrack," central bank chief Zhou Xiaochuan told reporters.

But Zhou, speaking a day after the Group of Seven industrial nations singled out China for not doing more to help iron out global trade imbalances, said currency reforms would be gradual.

Beijing would take account of China's ability to adapt to changes in the exchange rate as well as the country's international responsibilities, Zhou, governor of the People's Bank of China, said.

"We will keep the renminbi's exchange rate relatively stable at a rational and balanced level," Zhou said on the sidelines of the annual meetings of the International Monetary Fund and World Bank.

China revalued the yuan, or renminbi, by 2.1 percent against the dollar in July 2005 and scrapped a decade-old dollar peg in favour of a managed float.

Since then, to the frustration of critics who say the currency remains undervalued, the yuan has gained only a further 2 percent.

To keep the yuan stable, the central bank buys most of the dollars pouring into China from the country's record trade surplus, direct investment of more than $1 billion a week and inflows of speculative capital.

The intervention has swollen China's foreign currency reserves to a world record $954.5 billion.

Zhou reaffirmed his determination to gradually let market forces play a greater role in setting the value of the yuan, something that he said was already happening.

But Zhou played down market talk that a widening of the yuan's trading band was imminent.

Under the floating regime, the yuan may rise or fall by 0.3 percent a day against the dollar from a midpoint rate set every morning by the People's Bank. The daily band against other major currencies is plus or minus 3.0 percent.

Zhou said the question of widening the band had not arisen because the market had not yet pushed the yuan to its limits.

"I don't think the floating band is a serious matter. It depends on market movements," he said. "If you set a narrow floating band and market forces drive the rate to the limit, you have to consider that the band is probably too narrow and you should expand it. Fortunately, this has not yet happened."

The United States, with a record trade deficit, is particularly anxious to see a stronger yuan.

Zhou said Henry Paulson's visit to China this week, his first as Treasury Secretary, would mark an important step in economic relations.

But he said a shift in the yuan's exchange rate would have less impact on two-way trade than structural policy adjustments that, on the Chinese side, stoked domestic demand and reduced savings and, on the U.S. side, boosted the nation's savings rate.

On China's reserves, an international comparison showed that China had achieved very good returns, Zhou said.

"The structure of China's foreign exchange reserves up to now has been appropriate, but I can't say that there won't be an adjustment if it becomes necessary," he said.

The country's foreign exchange regulator said in remarks published on Sunday that China had already diversified part of its reserves, which bankers assume are invested mainly in dollar assets, but saw no need to make a big shift in future.

"Until now we haven't made a huge adjustment to our reserves composition because China's trade is largely in U.S. dollars," Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told the publication Emerging Markets.

Turning to the economy, Zhou said data for August had pointed to a slowdown in growth but it was too early to be sure.

The central bank has raised lending rates twice since April and also increased banks' reserve requirements twice to brake the economy, which grew 11.3 percent in the year to June, the fastest pace in a decade.

"Economic theory tells us that monetary policy usually works with a time lag. We should not be in too much of a hurry," he said.

"We will closely follow the economic indicators. Whenever necessary, we will use monetary policy as an instrument to adjust our economy," he added.

Chris PowellChina sees no need for great shift in FX reserves#1475479/17/06; 11:22:27

From Reuters
Sunday, September 17, 2006

SINGAPORE -- China has no need to make a big change in the composition of its $954.5 billion stockpile of reserves, the country's foreign exchange regulator said in remarks published on Sunday.

Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told the publication Emerging Markets that China had already shifted some of its foreign currency reserves out of the dollar, diversifying most recently into the South Korean won.

"Until now we haven't made a huge adjustment to our reserves composition because China's trade is largely in U.S. dollars," Hu was quoted as saying.

The dollar as a consequence constitutes a large chunk of the currency basket against which China manages the yuan, "so there's no need to shift greatly from this", she added.

Emerging Markets is being published in conjunction with the annual meetings of the International Monetary Fund and World Bank. The paper did not say when it interviewed Hu.

She said diversification was a long-standing portfolio management practice for China that predated the scrapping of the yuan's decade-old dollar peg in July 2005 and switch to a managed float.

"Over the past few years, we have already diversified our reserves away from exclusively U.S. dollar to other currencies -- euro, yen and we have also moved now to the Korean won -- so that's already evidence of diversification," she was quoted as saying.

China does not disclose the breakdown of its reserves, the largest stash in the world. Bankers assume that at least two-thirds of the reserves is invested in dollar assets.

contrarianA very interesting for thought#1475489/17/06; 11:44:04

Seems to make some sense...a post from Gold Eagle...

I think this recent weakness in the PM sector goes much deeper than NG veruse ABX. ABX made their move at this time do to the convenience, it might even be related to the big banks, but I think the real significance of this short-term depressive event in the PMs has much deeper significance.

I believe that the Gold shorts simply had to manufacture a way to cover their shorts at this time because they know that Gold and Silver will be going much higher over the next couple of years. So, Paulson goes to Washington- not a story for the faint of heart. So, did Paulson take over the Treasury (A corporate takeover?) with a story for the Administration outlining how he could make winning the November elections possible- a plan that would ultimately benefit the Gold-short crowd as well?

Let's take a look at what such a plan might entail. With the poll numbers for Cheney possibly sinking into the single digits- a feat never before performed by an Administration in history, I have read, along with the President's poll numbers being extremely low; it seems that virtually every single aspect of reality needed to be revised if the current Administration wants to see status quo in Congress continue. So, all of a sudden- up must be down, and down must be up. The idea that inflation is rampant needed to be reversed in the minds of voters- no matter what reality is- it needed to be reversed in the future hopes of the people at least until November. With the housing market imploding, rates needed an overhaul at least to the point of changing expectations to no further raises in rates, to promote the Bond markets, the real deciders of rates- to rise.

In order to achieve the above, the course seems simple. With the massive drubbing the economy is taking, you start off by suddenly withdrawing liquidity, an event we saw over the last couple of weeks. Since most liquidity has been finding its way over to the Precious Metals and commodities, ultimately, the withdrawal of liquidity is the initial smack to Gold and Silver. With a set plan in place and if "Another" can be believed, it is not a far reach to think that a well-organized plan would find the ME oil producers willing to go along. As Another stated, the oil producers have no problem with lower oil as long as the price of Gold is down since they only hold long-term value in Gold, ie., they value Oil in Gold. So, now we have the beginning moves of Treasury sponsored drops in Oil and in Gold/ Silver. This is followed by a "paper attack" on Gold and Silver and Oil. Another also said that the "paper Gold" markets contain mutliples of all of the Gold in what stops the "crew" from simply adding a bit more? About the same time, the usual rumors of Central Bank selling surfaces. I have some questions, here. Has anyone ever seen real life evidence of such selling? In my opinion, this Central Bank Gold does not cross on the paper exchanges where paper Gold is traded- small PM investors are not taking deliver of it. So, in reality this Central Bank Gold, IMO, is just traded around by entities that do not routinely take deliver of "paper Gold", anyhow. It is all just an illusion, IMO, that Central Bank Gold has any real effect on the physical Gold markets - just another PTB illusion to separate you from your Gold and Silver at the wrong time.

So, it seems that the bottom line is that we have an Administration that wants to be protected by a friendly Congress, coupled with corporate interests that have a real bad need to cover their short positions in everything PM. IMO, they are trying to cover all of their collective P's and Q's in one fell swoop.

JS has always said that the day would come when the same group that is shorting Gold would be the same group to cover and to take Gold, higher. I think that day has come. If you look at charts of the fall in the PM sector you see a complete rout in price. It had to be that way to break the psyche of Gold investors and to make a dramatic change in the psychology of voters, IMO. It had to be that way to force enough selling for the Gold shorts to cover, AND to go long. The process is not yet complete, but I don't expect it to take much longer than a week or two. The rest of the cover for the Gold shorts will be completed on the first wave 1, up and wave 2 down. The "break" in the price of Gold and Oil will be sold by the Administration as the "future of inflation", just not seen in current inflation numbers. Who gives a rats ace once November is out of the way, right?

This is part of the reason I stated in my editorials that "if the fractal completes, exactly, we will see lower HUI lows." Yet, I also said, "If it does, I will be holding my PM positions since I do not want to miss the next run in the PM sector." IMO, it would have been very risky to do much selling based on a past fractal if the break-out in the ascending triangle would not failed. I also never try to trade downside spikes if I expect them to be very short-lived. As "jlodots" said, trading the PM sector can be very difficult. Instead, I treat the current environment in what I call a "position trade." It means that I expect the HUI to be much higher over a year due the HUI fractal so I use the drop (since it has occurred) to set-up positions that will take advantage of the combined leverage of explorers, junior producers that will have increased production in the face of rising PM prices, and call options mostly placed out in future months/ years (yet steeply reduced in price on this PM plunge)......all set as positions to create a dramatic rise in the portfolio, all in deference to short-term valuations. There are lots of ways to skin a cat, but to skin a cat one must not be left behind standing at the station.

So, let me introduce to you the "Real Question" as I see it. What will it mean to PM sector pricing over the next few years when the Gold shorts have covered and gone long? Who will hold the PM sector back after the fact, besides PM investors getting nervous (and selling) afraid that the current charade sell-off might happen, again? Don't forget that JS has often said that when this PM market takes off into the sky, the bulk of the PM investors will be left behind. JS has constantly told us over the last couple of weeks that this smack was coming. He has said it does not last into Octboer. I have told you, last night, that the HUI fractal suggests it ends by the end of next week, but I will hedge a week by saying the week after next. After this low is in, the HUI fractal suggests we might have a move up to the middle Bollinger Band at around HUI 320 to 330 in what will likely be the equivalent of mid-October. After that, we would see a re-test of the bottom if the HUI fractal plays out, exactly. Then.....well, then the HUI would look like a real rocket-shot for the subsequent approximately 4-5 months all the way to 468ish, with the possibility of a spike to 500 in that setting- a virtual 4 to 5 month doubling of the HUI index........IF....and I repeat "IF" the HUI fractal plays out "exactly."

"That" is what I think the future looks like with the "Gold shorts gone wild-long." "Gold shorts gone wild- long?"....sounds like a good title for an editorial to me. BTW, at 468ish, the GSGW, Gold Shorts Gone Wild, will not be done. The rest of the year, IF the HUI fractal repeats exactly, would likely see the HUI index run up to around 740 to 780. Now, let's think about this for a moment. If the HUI index bottoms around 262 in about a week, then runs to 780 over the next year- that would be a 197.71% increase in less than 12 months. Yet, many PM stocks would grossly outperform the performance of the HUI Index since it is composed of some larger stocks that will not show as much "upside volatility." I would not be surprised to see ECU trade up to $20 to $24 Canadian during that run, though that is not based on charts, only my gut feeling for how stocks trade. SSRI might trade to as high as $80, IMO......that IS based on charts. Under those precise conditions, all supported by an HUI fractal that has not missed a single beat since I proposed it publicly around HUI 165, almost every single PM position should make the associated investor very happy, IMO. Yet, it is nothing new. Most of these moves in the HUI since the bottom have seen the next "upmove" increase by about 2x the prior intermediate high. THIS ONE WILL BE A BIT DIFFERENT, THOUGH. What will be different? Well, this final move down has been orchestrated, IMO, to separate you from your PM shares, from your PMs, and from your contracts. I would take this very personally because these fraudsters, whoever they are, be it GS, MS, ABX, or whomever- they want your PM possessions precisely at the time when you need them the most, IMO. (Christ, I am starting to sound like Trader_Vic.- Not swearing, only talking to God, now.)

Please....please do your own due diligence at this time. These are only my very personal opinions and I am nowhere near an expert in anything investing, nor charting. Please also understand that if I am anywhere near correct in the ideas contained, above, HUI 262 is not a magic number- just one supported by the fractal. The real bottom for the HUI could have come in, today (I seriously doubt it.), or it could come in a bit lower than 262. If the targets and time for 468 and 740 to 780 are anywhere close to reality, does it really make a big difference where you add to or establish PM positions once we are within around 10% of the bottom? I know this is a scary time for all PM investors, but exactly that makes me "not scared" at this time.

One more idea as long as I am running my trap ad nauseum (sp?). If "we" are right about this dive in the PM sector being potentially one of the biggest coups in market history by the Gold shorts, there are other implications, me thinks, as well. "Another" introduced to the world the idea that the ME oil producers looked at oil pricing in terms of Gold pricing. If the above is soon to play out, as the price of Gold rockets off to the old highs, then through to higher levels, do you really thing the ME is going to allow oil to be sold at these current low levels? NO WAY, JOSE'!!!! I think we might be at an inflection point in history where inflation is being sold as low and going lower, yet the next year will see one of the most dramatic rises in inflation in history. Even if you only consider inflation in monetary terms, that is still so. In fact, I have another question. We know that the Fed has been between a rock and a hard spot that has constantly increased to being between a rock and a harder spot as more liquidity keeps moving to Gold, Silver, and Commodities. So, if the Gold shorts, spelled- the big US banks are now going from "Gold short" to "Gold Short Gone Wild Gold- Long", will they even care anymore about liquidity moving over to the Gold, Silver, and commodities after the elections are over? If not, this fact will eventually hit the general stock markets hard, which will have a negative effect on the PM shares, but I would argue "that comes in 2007." In fact, the HUI fractal equates to a fairly steep drop in the HUI after about the equivalent of HUI 740 to 780. If the Gold shorts have moved to "Gold shorts gone wild longs", they would have no motivation to hit the PM sector at that time. Will that weakness be the result of the general markets being under selling pressure? I don't know the answer to that one, but I like to be thinking ahead.

I apologize for the very long rant, but I think the Gold shorts are going long......and it might be a good time to get 'em by the short hairs by front-running them to some degree.

Chris PowellForeign businesses not as welcome as China changes strategy#1475499/17/06; 14:31:15

By Elaine Kurtenbach
Associated Press
Saturday, September 16, 2006

SHANGHAI, China -- The going for foreign businesses in China, never easy, has gotten tougher as the government rethinks the "open door" policies that have made the country a magnet for foreign investment.

New rules forcing foreign news agencies to distribute news, photos and other services through the government's Xinhua New Agency are the most recent in a series of obstacles placed in the way of foreign businesses eager to invest in China. In recent months, Beijing has slapped limits on real estate investment and tightened controls on mergers and acquisitions -- moves that caught many foreign investors off-guard.

"In the old days, they wanted foreign capital. Now, there is a conservatism in the sense that some worry they are giving away too much in terms of state assets," says Bob Broadfoot of the Hong Kong-based Political and Economic Risk Consultancy.

Beijing has cited various motivations for the new measures, from the need to ensure competition to a desire to cool off too-hot segments of the juggernaut economy.

Overall, Chinese leaders insist there has been no reversal in the two-decade-old policy of encouraging foreign investment -- a strategy that has made China the world's favored destination for foreign direct investment for several years running, drawing $72.4 billion in foreign funds last year.

"The Chinese government will continue to adhere to the policy of opening ourselves to the outside world," Premier Wen Jiabao told British and Chinese business leaders during a visit to London this week.

Other factors too are creating a tougher business climate. The low wages that have made China a manufacturing powerhouse are beginning to rise, as are land and utility costs, potentially eating into profits.

But Beijing also is getting choosier. In recent months, the government has delayed closure of several major deals.

The private equity firm Carlyle Group LP has been waiting nearly a year for approval of a $375 million bid for an 85 percent stake in state-owned Xugong Group Construction Machinery Co.

Citigroup Inc. has been waiting for months to close a deal giving it a stake in troubled lender Guangdong Development Bank. Bank officials refused comment on reports this week that Citigroup had prevailed over rival buyers, winning a sharply scaled back 19.9 percent stake.

In both cases, nationalist sentiment over the sale of assets to foreigners was at work. After the Carlyle deal, the government later announced that big construction equipment makers must consult Beijing before selling stakes to foreign investors.

Germany's Schaeffler Group is still waiting approval of its 1.1 billion yuan ($138 million) bid for Luoyang Bearing Group, one of China's three biggest bearing producers.

Meanwhile, Beijing has announced a series of new regulations tightening restrictions on some kinds of foreign investment:

--New merger and acquisition regulations, which took effect Sept. 8, require that the Ministry of Commerce approve all deals involving national or "economic security." Local companies must keep control of Chinese trademarks and brand names.

--Rules announced in July bar foreigners from buying residential property that isn't for their own use and require government approval for transferring properties -- restrictions Beijing says target property speculators.

--Proposed rules would limit growth of foreign retail chains such as Wal-Mart Stores Inc., which are becoming a huge presence in cities.

--The government has announced limits on new foreign investments in cigarette and automobile manufacturing, citing the need to prevent gluts in both industries.

How the often vaguely worded rules will be applied is befuddling the foreign business community.

"We're concerned about some points, especially those that refer to 'economic security,'" said Bob Poole of the U.S.-China Business Council, an industry group of companies doing business in China.

In some cases, Chinese businesses appear to be winning government support for measures that shield them from foreign competition.

The new regulations announced Sunday that restrict foreign news agencies was a boost for the Xinhua News Agency, a staid purveyor of government propaganda that wants to transform itself into a global media titan. The rules grant Xinhua authority over foreign news agencies and the right to censor a wide range of news and information it deems unacceptable.

"They're using the excuse of information control to build a business monopoly," said James McGregor, chairman of JL McGregor & Co., a boutique investment and consultancy company.

Xinhua said in a statement that in its new role as regulator and distributor "it seeks no economic gains therefrom."

Despite such trends, foreign investment does not seem on the verge of dwindling. In a recent survey, the U.S.-China Business Council found that only 2 percent said they would be cutting back on investment next year.

Foreign companies are still bullish even in the real estate sector, where prices are beginning to plateau amid a multipronged crackdown on investment.

A survey of 180 executives by the Urban Land Institute, a non-profit, U.S.-based research group, found that a large share see China as a "must have," says Steve Blank, a senior researcher at the institute. "People say, 'Go get me a piece of China. I'm not interested in the details, just get me a piece.'"

Bizarro-GreenspanQuote from Robert Rubin#1475509/17/06; 19:19:53

"We have long recognised that helping
prevent extreme market fluctuations from generating
self-fulfilling losses of confidence that could
unnecessarily destabilise the real economy is an
appropriate objective of government policy. We also
recognise that government action is often required
to create the conditions for markets to work at
their best."


One wonders if these objectives could also be applied in advance of elections,to create the conditions for the electorate to vote for the appropriate party.

Bizarro-GreenspanHere's a recent one from George W.#1475519/17/06; 19:30:14

"I've always felt the economy is a determinate issue, if not the determinate issue in campaigns. We've had a little history of that in our family, you might remember."
SmeagolO yess, we remembers...#1475529/17/06; 20:59:58

"Read my lips..." Sss! >8-(
tejbearThings are getting better, right before elections...#1475539/17/06; 21:09:13

I know I am not the only one amused by the drop in gasoline prices and the renewed strength of the dollar, RIGHT BEFORE THE ELECTIONS... Clearly rigged.

I am sorry to admit that I now believe that most Americans are willing ignorant fools, who merrily will follow the Republican piped piper. As a Vietnam Vet, I am saddened by this awareness. If the Republicans are able to steal another election, you can be sure of more irresponsible fiscal management and over seas conflicts continuing to increase our countries’ liabilities. Let's not even talk about global warming or our environment.

These of course portend well for holding gold and silver… But if the oceans rise 150 feet, who cares…

The Bear

GoldiloxHAS THE DOW SEVERELY CORRECTED ALREADY?#1475549/17/06; 21:17:39


We decided apply the simple concept of pricing the Dow in Gold and Silver in the same way we did in an article titled Dow 1200 Illusion or?

We will take the low of the Dow in the last 4 years and the low that gold put in the last 4 years. As the Dow is priced in Dollars we will divide the price of gold into the Dow. For the record we could choose other price points as they only serve to illustrate our point.

In Oct 2002 the Dow was trading at 7200 (4 year chart) and Gold was trading roughly around 300.

If we divide 7200 by 300 (the price of Gold), we get 24 ounces. Now it took 24 ounces of Gold to buy the Dow back in Oct 2002 (remember we taking the Dow's lows into consideration and not it's highs) so it should take at least 24 ounces or more to buy the Dow today. Let's check that figure out.

In May of this year the Dow put in a new 52 week high and almost tested its old all time high of roughly 11700. For arguments sake we will assume that the Dow traded to 11700 in May. At that time Gold put in a high of roughly 720.

11700 divide by 720 = 16.25

Back in 0ct 02 it took 24 ounces to buy the Dow and at this time it was trading at a 4 year low. This means that the Dow was actually trading higher back in Oct 2002 then it was today because today it takes 8 ounces less of Gold to buy the Dow when it's trading at close to a new 5 year high. For the Dow just to break even to its Oct 2002 levels it would have to be at (24 X 720) 17280.

The Dow only made it to 11700 so far. That mean the Dow has corrected over 35% as it should actually be at 17280 instead it's below 11700. Market technicians state that we are in a bear market if the market has corrected over 20%. Based on these figures we have corrected over 35% yet the Dow has just put in a series of new illusory 52 week highs. Hence in reality the market could technically rally a lot more and still be in a bear market. The funny part is that the bears are actually right but they just don't know how to use this info and the bulls are actually wrong but they happen to using the info for the time being in the right manner.

If we use Silver as the constant the figure we get is even more outrageous and it suggests that the markets have corrected even more then 35%.

Silver was trading around the 5.15 mark in Oct 2002.

Dow 7200 divided by 5.15 = 1398 ounces

May 06 Silver traded roughly to 15 dollars

1398 X 15= 20970; that's the level the Dow should be just to equal the level it was trading in Oct 2002 when priced in silver.

This means that the Dow has already corrected a whopping 44.2% and yet it has put in a series of new 52 week highs. These highs are all illusory in nature.

Since the Dow is priced in dollars lets perform a final test on the Dow. The Dow hit an all time high back in 2000 (look at picture below). To simplify matters lets assume the value of this high was 11700 (actually it's higher).

Now let's look at what the dollar was doing in the same time period. At the time the Dow put in its all time high the dollar index was trading around 105; this is roughly 20 points (currently in the 85 ranges) lower then where it's trading right now. On a % basis it works out to 19.5%. To make things simple we will round it of to 20. That means the in today's dollars the Dow would have to trade 20% higher then the high it put back in 2000 just to break even. At this point in time the chances of the Dow trading to the 14040 price point level are slim to none. If we were wildly optimistic we would probably issue a target of 12600 at the most; for the record we are not wildly optimistic at this point in time.


This is yet another completely out of the box way of examining the markets and what they are doing. This viewpoint provides yet another valid reason to support our bullish out look on the intermediate time frames. We are still bearish when taking the long term view, however a lot can happen between the short, intermediate and long term time frames. If you are not properly positioned you could end up bankrupt while actually being right.

One could technically state that the market is simply experiencing a long dead cat's bounce or that we are in a long term bear that is truly invisible for the time being. In the end one must understand that when one is dealing with the markets that nothing remains the same forever; those who examine the markets with closed eyes and a closed mindset will find that their wallets enter into the empty zone rather fast. This little exercise also very clearly illustrates the evils of inflation.


While so many "chartists" compare today's levels with previous "highs", not adjusting for the pernicious effects of inflation, I think this is a more "real" comparison.

GoldiloxNovember elections#1475559/17/06; 21:22:36


The NeoCons may not be able to steal another election, but one has to ask what differences will be exhibited with the other side of the bankster coin still solidly in control. Can the current Democratic PTB throw off the chains of debt servitude?

Follow the money! Their actions speak so loudly, I often cannot hear what they are saying.

mikal@Goldilox#1475569/17/06; 21:38:45

Re: "Their actions speak so loudly I cannot hear..."
While it is an old maxim that actions speak louder than words, a newer precept is that a politician's
earbud receiver can be turned to full volume
if his speeches and press conferences are being heckled!

GoldiloxWeek Ahead: BOE minutes in focus#1475579/17/06; 23:22:25


LONDON (SHARECAST) - While the coming week sees a string of results from blue chip companies the market's attention may well be elsewhere.

The Bank of England releases the latest minutes from its interest rate setting meeting on Wednesday and they are likely to dominate proceedings.

The committee voted to keep rates on hold at 4.75% at the September meeting, following the surprise rate hike in August and expectations are that a hold would have been unanimous.

The outlook will be closely monitored for when the next rise could be, with most settling on November, although some economists are refusing to rule out October.


Rising mortgage failures may be signalling moderation of the "interest rate" races.

Probably good for gold.

arbyhFederal Reserve ownership:#1475599/18/06; 08:45:58

As of 1976...
It would be interesting to compare to Bilderberg's names.

FlatlinerAnother diversion#1475609/18/06; 09:55:10

This time, with a little hedge fund:

Amaranth, a big hedge fund, says it suffered huge losses last week on bad bets on natural gas trading.

"We anticipate our year-to-date losses might be in excess of 35% as we near completion of the disposition of our natural gas exposure," the hedge fund said in a letter to investors obtained by The letter is signed by the hedge fund's founder, Nicholas Maounis.

Based in Greenwich, Conn., Amaranth employs more than 360 people, including 115 traders. The fund's Web site tabs its assets at $7.5 billion, and the firm has offices in Houston, Toronto, London and Singapore. Sources say assets under management may have been more than $9 billion going into September.

"We have met every margin call to date," the letter continues. "We are in discussions with our prime brokers and other counterparties and are working to protect our investors while meeting the obligations of our creditors."


Flatliner – I'm sure the Google link will give you the latest.

melda laureMuch too hot.#1475619/18/06; 10:13:40

@ Arbyh. UN speech.

All he has to say is "Ditto what Ratzinger said". What a mess! Kettle calling the stove black and all that.

This is no way to run an international economy. "He was warning the West, not the East..." But who now will warn whom? We have all stopped listening: Bush to Powell, the muslims to the pope, and the chinese to Paulsen. The dollar speaks of its honor, and gold says "pay cash then..."

We all need a long cool drink, and maybe a puff or two.

GoldiloxUSDX#1475629/18/06; 11:40:45

Nice bump on the miserable BoT numbers. Someone is wrking hard this morning.

Gold, however, seems to "get it", and given the gross oversold positions of the metals and miners, we are seeing some strong rebounds, even against USDX "strength".

arbyhTough Times Indeed; News of the day 18 Sept 2006#1475639/18/06; 12:26:38

First news of the day: Bush addresses the UN....oh boy - who is he goin g to piss-off this time?

Second: The Pope has offended the Whole Muslim World in a 13th century quote. Muslim World reacts like it was an EO compliant and carries their flag high and burns effigies of the Pope in protest. The Head of the Catholic Church and most of the Christianity in our world naturally apologizes profusely. No Good, says the Muslim World; and protestors continue to march in the streets all over the world.
This is a major deal!!!
Musical lyrics, fast 4 4 tempo:
"Running for cover...
Life on the line...
A soldier is waiting...
looking for the sign...
some fight for freedom...
some fight for love...
some fight for money...
or heaven above...
Chorus: I don't want a Holy War...That's not what I'm looking for."

Third news of the day: The controversy as to destroy, or limit the opium poppy production and illicit distribution activities in Afghanistan. Afghanistan's economy is reliant upon the opium income, legal and illegal.

I spy with my little western eye the self-righteous thug mentality in the whole mid-east region. More precisely, just a culture that developed totally outside the western experience. The two cultures until recently have little history in common with one another.
Marco Polo told most everything the western world knew about them for a large chunk of time in cultural development. Except for the crusades of course, and that is a good culturally bonding memory reminder for them. GWBush used the term "crusade" in a speech referring to the mid-east in the not to distant past. Bright and sensitive fellow that he is.
In Business, bribery and intense negotiation is the rule. They love to haggle for the best deal. Haggle with one, it is an experience. They take pride in it as they stroke their beard. The beard all traditional men wear to signify wisdom and maturity. A man strokes his beard when he tells you something to signify it as the true on his honor. Never mind he might just be lying...or seriously exaggerating, while always speaking with loud body gestures. A not long ago a thief would lose a hand, and people were stoned to death in the street.
Women have few rights little education and male dominant society - has been that way forever.
They themselves see it the world differently from a totally different reference point. They traditionally pray 5 times a day, whole family and entire community goes to Mosque on Friday. Their Mosque and religious leaders are the most driving influence in their lives. They will without question stand armed in front of their Mosque ready to fight to protect it. They don't drink, or allow pornography.
Their culture is so much more basic and open to the charisma of individuals. Saddam looked brave as he toyed with the western leaders in defiance, and now defies the court. Iran's leader looks so impressive to the mid-easterner, when telling the west to wait and see...we will think about it. Even the average man on the street there observes the fundamental rules of respect and posturing while in conversation with elders, juniors, or equals.

Our western mindset's lack of ability to understand the mid-easterner is due to the totally different cultures. The Arab world, which although does display ancient cultural advancements, until relatively recently, when natural resources were discovered in several countries, was left outside most joint cultural mutual points of reference.
It is a cultural thrust really. The Arab mind is the mind of a prideful zealot easily swayed by charisma and religious devotion, but once devoted to a cause is single-minded in its pursuit. They are prone to toy with and insult an adversary. The western mind is more apt to take things casually, looking for the middle ground, seeking to optimize the outcome, and we will change our minds over matters as the need arises. We are prone to fight and hit first in matters where we are being insulted and toyed with.

Fourth bit of news: A man crashes his car into the U.S. Capital building. Oh boy test fire dry run, or just a driver seizure and loss of control. He made it all the way to the basement of the building. Good thing it wasn't a truck bomb I say. I guess our defensive posture still isn't nearly high enough. Concrete tank traps work well and look cool. Better to use them then to rebuild significant national buildings. Shopping malls aught to have concrete barriers completely surrounding them as well, even add secure entry points in and out.

I don't want a holy war.
Too late,
5th bit of news: SFC Marion Howard, who loved helping the children of Afghanistan, was killed in the line of duty in Afghanistan.

And the day's not over yet.

Go Gold!!! Smartly the mideasterners hold gold in high regard, as do westerners. Maybe there is hope for gold.

mikalA gold in hand equals two thousand in the bush#1475649/18/06; 13:35:08

Credit Bubble Bulletin | Monetary Disorder Watch by Doug Noland | September 15, 2006
mikalExcerpt#1475659/18/06; 13:36:49

Credit Bubble Bulletin | Monetary Disorder Watch by Doug Noland | September 15, 2006
Excerpt : September 14 – Bloomberg (Andreas Scholz and Chris Malpass): "Hans Tietmeyer, who headed Germany's Bundesbank when it still set the pace for interest rates around Europe, comments on inflation, interest rates and the outlook for economic growth in the U.S… ‘We can't exclude a hard landing in the U.S., this is a threat to the economic outlook for 2007.’ On currencies: ‘We see a considerable exchange rate risk. That's going to be an issue in Singapore now [during the G7 meeting]. We can't control exchange rates, we have to coordinate policy. The biggest risk is: how long will Asians prefer to invest in U.S. dollars?’ On inflation: ‘I still see considerable potential for inflation because of the continuing expansion in money supply. Not enough of this has been absorbed yet. Second-round effects are still limited, but it's not over yet. And inflation expectations are very unstable. Monetary policy is not restricting growth, and remains clearly accommodative, there's no question of that. Real interest rates are still low.’"

A learned and accomplished central banker such as Mr. Tietmeyer recognizes Monetary Disorder when he sees it. Sure, the dollar may today appear reasonably surefooted (with dollar bears on their heels), yet Tietmeyer is keenly aware of its deep-rooted fragility. Dollar "stability" demands ongoing massive central bank dollar purchases – support operations certain to only exacerbate Global Monetary Disorder. In concert, domestic and international Credit system dynamics do today buttress U.S. financial and economic Bubbles – housing slowdown notwithstanding. It's inevitably a losing proposition. The market impact of the recent unwind of some commodities and bearish bets is absolutely inconsequential compared to the crisis that will be initiated when Monetary Disorder eventually leads to a scramble (and de-leveraging) out of bursting U.S. and global securities markets Bubbles. Hopefully, this episode does not involve myriad highly inflated Bubbles all bursting simultaneously across the globe, although the nature of current Monetary Disorder would appear to support just such an outcome. If the Bernanke Fed is relieved by – or perhaps even celebratory of – the decline in energy and commodity prices in conjunction with gains in stock and bond prices, I suggest to them that they should instead be extremely concerned with the unprecedented degree of speculation now pemeating U.S. and global securities markets. Rampant and unmanageable Credit Inflation and its myriad effects remain their chief worry. As such, a speculative run in U.S. equities would essentially culminate Monetary Disorder's worst-case scenario."



So what major outside forces knocked the "Commodity Super Cycle" off its upward course, and then led to the latest plunge in the Reuters CRB index? According to the charts above, the CRB moved drastically out of alignment with the global stock markets! The CRB index is 16% off its 25-year highs, with the king-pin crude oil and gold markets 20% lower, the copper and zinc markets are off 17% to 19%, yet the global stock markets were left unscathed.

Is the latest down-turn in the industrial commodities signaling the onset of a global economic recession, led by a US housing slump or a hard landing in China, and not yet reflected in the global stock markets? Or did the rout in the Reuters Commodity index simply wipe out a swath of speculative froth after a four-year climb, a classic shake-out of over-extended long positions, and presenting bargain hunters with new opportunities to make money in a longer-term secular bull market?

The major forces that have rattled the Reuters CRB index within such a short period of time, to its lowest level in a year and a half include, (1) Global central bankers are lifting interest rates in unison, and slowly draining global liquidity. (2) Beijing is tightening its grip on the yuan money supply, leading to exaggerated fears of a hard landing for China's economy. (3) Crude oil traders unwound a $15 per barrel Iranian "war premium" after Europe's big-3 signaled a split from the Bush administration's campaign for UN economic sanctions against Iran. (4) Weaker crude oil prices triggered a rout in the gold and silver markets.

osa104cMISSdirection ..... PPT (plunge protection team) #1475679/18/06; 16:58:19

The Nest Egg Index looks at the 934 core-based statistical areas defined by the U.S. Census Bureau. It examines 12 categories that influence personal savings categories, including savings and investing propensity; 401(k) and pension plan penetration; home ownership and home values; mortgage and personal debt levels; net worth; household incomes; cost of living; and employment rates. "Rather than just incremental savings, we are looking at people's assets and debt levels," says Beckmann.

Pension plan penetration? worth?.....Unsustainable........Cost of living?..........Undefinable...........PM's (GOLD / SILVER), no DEBT, $um dry goods..........PRICELESS......................AMF

Ten BearsThe Coming Showdown: Henry C.K. Liu#1475689/18/06; 18:38:37

The housing bubble burst, while a heavy load, is not going to be the
straw that will break the camel's back. The straw will be the hedge funds.

USAGOLD Daily Market ReportPage Update!#1475699/18/06; 19:30:27">
The Daily Gold Market Report has been updated.

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

MONDAY Market Excerpts

Gold gains nearly $10, bargain hunting cited

September 18 (from Reuters) -- Gold futures in New York ended higher on Monday on investment buying fueled by firmer oil prices, but many market players stayed wary of a further correction after the recent commodities sell-off and ahead of this week's Federal Reserve meeting.

Dealers said gold got a boost on trader short-covering and bargain hunting after it slid into technically oversold territory last week following two weeks of steep declines.

"We were were able to hold the June lows on Friday in December gold and I just think you're seeing stronger price action in commodity markets and gold's benefiting from it," said David Rinehimer, head of commodities research at Citigroup Global Markets in New York.

"Then, once we took out the previous high at $589 an ounce, we moved higher and we probably had some stops (stop-loss buy orders) that were hit on the upside," he said.

COMEX December gold contracts rose $9.80, or 1.7 percent, to end at $592.80.

UBS analyst John Reade said gold's positive relationship with oil prices has increased since the start of 2006. "Although the correlation between gold and the dollar has also tightened over the past few months, the correlation with oil remains higher than that of the dollar."

The dollar rose against the yen but stayed lower versus the euro. Analysts said the greenback largely ignored U.S. data showing foreign capital inflows into the United States dwindled sharply in July.

Many market watchers expect the U.S. Fed will keep interest rates unchanged when it convenes this week following its first pause after 17 straight rate increases.

The Federal Open Market Committee will decide on Wednesday whether to raise the target for its benchmark rate from the current 5.25 percent.

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

The Invisible HandVive la France!#1475709/18/06; 21:08:02

Currently the IMF follows rules originally drafted in 1977 after the 1973 collapse of the international gold standard and fixed-exchange-rate system.

Welfare economics and Power politics - those are the very essence of the dollar-International Financial and Monetary System (IMFS).

Global capital is treating local markets as parking lots only. And increasingly, unlike "physical" parking lots, for financial "virtual" parking.

It is the continuous and increasing disparity of income, locally and globally, that will doom this system of debt-economy.

The ongoing (legal) process of (hyper) wealth concentration is the driving force of the growth of globalising capitalism.

It has now all the appearances (!!!) of a perfectly managed competition. (The ideal of senator Sherman, when he brought his Antitrust Act in 1890 to the Senate.)

NO international institution (IMF) is going to stop this process.

Quite to the contrary, the Shanghai Cooperation Organization (SCO) will enhance the process.
The fifth meeting of the Shanghai Cooperation Organization [SCO] member nations' prime ministers was held in Dushanbe, capital city of Tajikistan, on 15 September 2006
The organization's secretariat is authorized to draw up a detailed action plan on cooperation with the observer nations in the economic and humanities fields in accordance with the organization's legal documents.

Remember that Iran is an observer nation in the SCO
and that
once Iran will be a full member of the SCO, Freegold will be a fact.

And look what happens. Aux arbres, citoyens! (1)
President Jacques Chirac last night provoked a diplomatic showdown at the UN when he broke ranks with America and its allies and called on them to stop threatening Iran with sanctions.
But with FRANCE clearly now all but united with RUSSIA and CHINA, two other veto-wielding powers, in opposing UN Security Council action against Iran, American hopes of progress in confronting Iran this week seem dim.

Well, well, who had thought this Hand would ever applaud Jacques Chirac, Empereur de France et d’ailleurs? (2)


(1) "To the trees, citizens" – Satire of the French national anthem, the Marseillaise, "Aux armes, citoyens" –"To the weapons, citizens."

(2) ailleurs = other places

FlatlinerTime shows all things#1475719/18/06; 21:54:45

@Another diversion below, we get to see another case of speculators taken to the cleaners. I'm sure they were bright people with an outrageous understanding of the fundamentals in the Natural Gas market, but I wonder if they remember what happened last November. (Below, I've included a posting from months ago.)

Flatliner (1/19/06; 22:53:53MT - msg#: 140674)
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.
:End snip.

Now, what find most interesting about this is that the idea behind allowing this bank to get involved seemed to be to balance out speculation money with unlimited money in order to keep the price of the commodity stable. If you can take unlimited loses AND only a fraction of the longs actually take delivery, that speculation money that drives the price up can be countered with commodity liquidity that keeps the price down. This is a cost affective way to maintain order in society.

Now, what do we all see as being the result of this? For starters, it's Amaranth. IMHO, there is a connection here that all should learn from.

Now, we watch as the bank makes things stand on edge.

I can't help but think that it will not be long before all investors will see that the strong dollar policy has created a fractional commodities environment. The run that we will all see on this (commodities)bank is already happening. Those that are getting (or have gone) into physical metals are at the head of the line. Those on the street that believe their accounts, are backed by something real, are in for a rude awakening.

It took months to play out, but it is here. Now, we get to watch as it gets swept under the rug.

Clink!It's too much for my brain, TIH !#1475729/19/06; 06:22:49

"Well, well, who had thought this Hand would ever applaud Jacques Chirac"

What is the sound of one hand clapping ? After many years of quiet meditation on this classic conundrum, I was finally coming to grips with the answer. Then you had to up the ante - And what if that hand were invisible ?



GoldiloxUSDX#1475739/19/06; 08:55:46

Looks like the FOREX boyz are betting on a FED respite or cut, even after the instantaneous "bump" a the open.
arbyhThe spark that set fire to the world.#1475749/19/06; 09:33:12

VATICAN CITY (Reuters) -- Western leaders and churchmen are trying to defuse the crisis over papal remarks about Islam as Pope Benedict XVI on Tuesday faced a growing chorus of demands for an unequivocal apology.

Even President Bush got involved, saying Monday that the pope had been "sincere" when he said he was sorry to Muslims and that his words had been misunderstood.

But for many Muslims, Benedict's attempt to explain himself Sunday did not go far enough and observers were waiting to see if he would speak about it again at his general audience at the Vatican on Wednesday.

The pope enraged Muslims in a speech a week ago in Germany quoting 14th century Byzantine Emperor Manuel II Palaeologus, who said everything the Prophet Mohammed brought was evil "such as his command to spread by the sword the faith he preached."

The leader of the world's 1.1 billion Roman Catholics said on Sunday he was "deeply sorry" for the reaction caused -- but stopped short of apologizing for his words or retracting them.

In a telegram to the order of an Italian nun killed in Somalia who may be the crisis' first victim, the pope hoped her sacrifice would help build "real fraternity among people with reciprocal respect of everyone's religious convictions."

But the deluge of criticism and threats continued. Italian media said an al Qaeda group in Egypt called for the German-born pope, who is 79, to be punished by strict Islamic Shariah law for insulting their religion.

An al Qaeda umbrella group in Iraq has also vowed war on "worshippers of the cross."

Workers at Turkey's Directorate General for Religious Affairs, or Diyanet, petitioned for the arrest of the pontiff when he makes a scheduled visit to Turkey in November.

They held banners saying, "Either apologize or don't come."

Benedict's comments annoyed the Turkish government, but there are no plans to cancel the trip.

In Iraq, where an effigy of the pope was burned Monday, parliament speaker Mahmoud al-Mashhadani called his apology "inadequate and not commensurate with the moral damage caused to Muslims' feelings."

The grand mufti of the Palestinian territories, Sheikh Mohammad Hussein, said the pope must make "a personal and clear apology to 1.5 billion Muslims in this world for the insult caused by his lecture. ..."

But the cleric asked for an end to attacks on churches in the area after seven were vandalized this weekend.

The president of mostly Catholic Slovenia, Janez Drnovsek, said on his Web site that Muslims were justifiably upset and that the pope should be big enough to learn from his error.

In Italy, politicians and churchmen defended the pope and said his words were taken out of context and his explanation was quite clear. Vatican newspaper L'Osservatore Romano published it in Arabic on its front page to try to clarify his meaning.

But while some Muslim clerics say the alleged insults are the latest skirmish in a new Western "crusade" against Islam, some Catholic churchmen say the pontiff's words have been purposefully twisted by militant Muslims.

"We pray for the pope whose words have been maliciously interpreted," Cardinal Crescenzio Sepe said in Naples at the annual "miracle" of fourth-century St. Gennaro, whose blood turns from powder to liquid in what is seen as a good omen.

The head of Australia's 5.1 million-strong Catholic Church went as far as to say that violent reaction "justified one of Pope Benedict's main fears" about Islam.

Cardinal George Pell said this showed "the link for many Islamists between religion and violence, their refusal to respond to criticism with rational arguments, but only with demonstrations, threats and actual violence."

Local Muslims called Pell's comments "unhelpful."

GoldiloxThailand calls state of emergency#1475759/19/06; 10:03:33


Thai Prime Minister Thaksin Shinawatra has declared a state of emergency in Bangkok amid rumours of a state coup.

"I declare Bangkok under a severe state of emergency," he said on television. He is currently at the UN in New York.

The measure came after tanks took up position around the Thai government headquarters in Bangkok, where they blocked traffic.

An army-owned TV station is showing images of the royal family and songs linked in the past with military coups.

Mr Thaksin announced he had removed the chief of the army, Thai television reported.

The prime minister ordered troops not to "move illegally", Reuters quoted him as saying in a voice broadcast on Thai television.


While the cat's away . . .

GoldiloxAmaranth hedge fund suffers huge loss#1475769/19/06; 10:17:46


NEW YORK - Amaranth Advisors’ multi-billion dollar hedge fund may suffer losses in excess of 35 percent because of a position on the natural gas markets, the fund said on Monday.

"Last week, the Amaranth multi-strategy funds experienced significant losses in their energy-related investments following a dramatic move in natural gas prices," Amaranth said in a letter to investors obtained by Reuters.

Amaranth, created in September 2000, has more than $7.5 billion in capital under management, the company said on its Web site.


I think this has been noted here, but I wanted to make sure, as it is a big story on CNBC today.

FlatlinerBalance of trade#1475779/19/06; 10:52:59

If a gold bug who understands MTM functionality reads this type of article, it should bring to light how the EU has structured gold as the element that balances international trade. If the "globalization of supply chains" makes determining the balance of trade fuzzy, all one (central bank) needs to do is to not hinder the flow of its own fiat into gold and the imbalance will quickly, and quietly, disappear.

It seems that the design … is working. At least it appears to be on the surface. If the trade imbalances for the EU countries is relatively balanced (ie. There is function for all the outstanding currency) then the price of gold, today, provides the balance needed for trade.

What happens if the balance shifts in the coming years? What happens as Asian product imports into Europe skew the flow of fiat offshore? (much like with the US today) Will the Asian countries recycle fiat into treasure notes that strengthen the fiat as with the US strong dollar policy? Or will they go shopping for a little gold?

One thing to think about that might help you determine what they will do is to remember that if the fiat is not recycled back into the parent economy that economy will suffer a recession. A recession will reduce the imports thus impacting the country that has gathered the surplus fiat. This spreads recession. To get out of a recession, the central bank will issue more currency in an effort to stimulate the economy thus leading to inflation and the devaluation of the fiat. Thus, to the country that hold surplus fiat, the buying power will be reduced over time as a defensive measure.

But, if they recycle the surplus currency into gold (currency), like magic, the value of the fiat drops against gold in the local economy AND the fiat is available for debt service – thus not feeding into a contraction of the fiat supply that would lead to a recession. No recession means a much lower inflation rate which leads to a more stable fiat currency which makes for better trade.

In time, I am sure we will see this function for gold. As we do, the world will value gold as no one alive can remember.

FlatlinerGreat article on GLD by James Turk#1475789/19/06; 11:17:33

An article for anyone that actually believes GLD holds gold. It sure seems like they do… It's an old article. Sorry if you've seen it many times already.
mikalMania Watch- got gold?#1475799/19/06; 12:34:53

Mania Watch - Tuesday Headline Spectacular:

U.S. stock losses mount on Yahoo revenue outlook - CBS Marketwatch ["Losses mount" for some = BIG PROFITS for a few!]
Treasuries Rise as Inflation Remains Tame, Housing Starts Drop - Bloomberg ["We get by with a little help from our friends"]
Oil slips as brimming stocks ease worries - Reuters ["We win when it's up, we win when it's down, WHHEEE!"]
Producer Prices in U.S. Rise 0.1 Percent; Core Rate Declines 0.4 Percent - Bloomberg [No comment needed, smells for itself.]
U.S. August Housing Starts Decrease 6% to a 1.665 Million Pace - Bloomberg ["Good for bonds" they're saying today.]
IMF Chief Says Growth to Suffer Without Trade Accord - Bloomberg ["Growth" in WHAT sectors?]
Fed Confusion on Policy Impact May Increase Dangers for Economy - Bloomberg [The Fed IS the danger.]
Health insurance costs soar for small businesses - KC Star [OLD NEWS!]
Top CEOs Signal Dim Outlook - LA Times [Who's "dim", and how dim is "dim"? ;)]
A Hedge Fund's Loss Rattles Nerves - Morgenson, NY Times
Fannie Mae could be hit hard by housing bust - CBS Marketwatch [Not fannie, but the unfortunate "wayward" clones uninsured by gubmint]
Hedge fund gassed - N.Y. Post [That's a gas!]
Some hedge funds hit a slump this year - USAToday [Are we nonchalant or what?]
Amaranth's Risky Business - [They're a disgrace to the herb!]
Big names burned by hedge fund losses - N.Y. Post [MORE? ;)]
Commodities as an Asset Class - Roach, Morgan Stanley [What's his take NOW?]
Surprise rate hike would be disaster for bonds - Reuters [Bonds ARE a distser.]
Homebuilder sentiment sinks again in Sept: NAHB - Reuters [Another tidbit "good for US bonds"]
GM and Ford reportedly held talks - Boston Globe [Will there be a baby named Gord?]
Thailand Premier Declares State of Emergency, Fires Army Chief - Bloomberg [Who bankrolls who?]
Yuan Gains Should Quicken to 5% Annual Pace, Zhu Says - Bloomberg [Yawn, and prove it!]
Australia Cuts Wheat Forecast 28% on Dry Weather - Bloomberg [Representative of the globe.]
New Swedish government plans sell-off - FT [State assets, that is, not gold.]
Why do wealthy people go broke? - NY Times [Because they're not connected, they get screwed by some scam, high taxes, too much reg's or they deserve it?]

mikalUS$ and bonds catch safe haven bid on Thai crisis#1475809/19/06; 12:57:33

Dollar Gains Versus Euro as Thai Group Says It Controls Bangkok By Min Zeng
Sept. 19 (Bloomberg) -- The dollar gained against the euro and pared a drop versus the yen after a group in Thailand claiming to represent the police and military said it took control of Bangkok.
The U.S. currency reversed an earlier decline that came after U.S. government reports showed producer prices last month gained less than economists forecast, while housing starts fell. Thai Prime Minister Thaksin Shinawatra declared a state of emergency.
``You are seeing some knee-jerk reaction'' in the form of dollar buying, said Tim Mazanec, senior currency strategist at Investors Bank & Trust Co. in Boston. ``The dollar is a safe- haven play of choice.''
The dollar advanced to $1.2673 per euro at 1:39 p.m. in New York, from $1.2706 late yesterday. It traded at 117.71 yen, from 117.95 yen yesterday, rebounding from a one-week low of 117.
Traders sold dollars earlier after a Labor Department report showed U.S. producer prices increased 0.1 percent in August, the same as July. Excluding food and energy, prices fell 0.4 percent, after a 0.3 percent drop in July, the first back-to-back declines since 2002. The median forecast in a Bloomberg survey was for a 0.3 percent overall increase.
U.S. housing starts fell 6 percent to a 1.665 million annual rate in August, a government report showed. It compared with the median forecast of 1.746 million in a Bloomberg News survey.

Police and Military
A group calling itself the Thai Reform Council issued a statement on Thai television saying it has control of Bangkok. The group says it includes the chiefs of the police and military. Bangkok police had been bracing for political protests as Thais seeking to oust Thaksin planned to stage mass rallies tomorrow.
The Thai baht fell 1.3 percent to 37.79 per dollar, the biggest drop in four years.
Thaksin spoke on state television from New York, where he was attending the United Nations General Assembly.
``People tend to flock to less risky currencies such as the dollar when they see some political uncertainty happens,'' said Brian Taylor, chief currency trader at Manufacturers & Traders Trust in Buffalo, New York. ``There is safe-haven buying of dollars.''
Signs U.S. inflation is in check may boost speculation the Federal Reserve is finished with its two-year cycle of interest- rate increases.
The Fed will probably leave its benchmark overnight rate at 5.25 percent tomorrow when policy makers meet to set rates, according to all 109 economists in a Bloomberg survey. The Fed paused last month after 17 straight rate increases since June 2004.
Interest-rate futures show traders see a 6 percent chance the Fed will lift its benchmark to 5.5 percent by year-end, down from a 22 percent likelihood yesterday.
``We are seeing a general dissipation of inflationary pressure'' that will begin to fuel speculation about a Fed rate cut next year, said Michael Jansen, a senior North American market strategist at National Australia Bank Ltd. in New York. ``The U.S. dollar has a very significant risk of moving materially lower.''

mikalMore geopolitical angst: Hungary#1475819/19/06; 15:10:01

"Jim Sinclair's Commentary

What is the difference between Hungarians and Americans? TV stations are safe.

Protesters Storm Hungarian State TV
Unrest Follows Disclosure of Campaign Lies
BUDAPEST, Hungary (Sept. 19) - Protesters stormed the headquarters of Hungarian state television Tuesday and forced it off the air briefly in an explosion of anger after the prime minister admitted lying about the economy during an election campaign in April.
Officials said about 150 people were injured in the violence, including 102 police officers, one of whom suffered a serious head injury.
Prime Minister Ferenc Gyurcsany vowed to stay in office and carry out economic reforms, despite the riots he described as the worst since the end of communism in 1989..."
Mikal: If all this is happening now, when the "global economy is robust, has never looked better" et al, what's the future hold?

GOLD FINGERIt's all about manipulation...RIGHT?#1475829/19/06; 15:26:18


The MSN URL has some good points....for MSN...

I always knew we have plenty of oil. Now, once we all start saving and conserving how will this commodity's lower price effect have on the POG? Up ....more?...or Down even LOWER

...Bear again...or a new run up to BULL?

Dollar is up...will it last or will trillions deficit keep it doomed....

I wonder what Sir Black Blade has to say about this....?

Anyone else have an idea or two?

My gold shines.....however, it can't buy as many dollars as it once did.....I will still buy! The wolf is just sleeping.


TownCrier33 tonnes#1475839/19/06; 15:40:49

Members of the eurosystem reallocated 33 tonnes of their gold during the previous week (within limits of the CBGA), and also let their net position in foreign currency decline by EUR 0.2 billion.

Now think on this if you can... allow yourself to imagine that these actions are conducted with confidence, not trepidation.

Are you able to see how in the context of previous discussions this conduct presupposes and preordains higher gold values in years ahead?



mikal"Behind every great fortune there is a great crime." #1475849/19/06; 16:03:34

The Dollars and Sense of 911 - Douglas Herman - September 18
The above quote by Balzac is the theme of
this short esaay, summarizing many 911 heists, including "hundreds of millions" in gold from the vault beneath the third downed building- WTC 7.

NedQuestion re: those airlines put options#1475859/19/06; 16:59:45

How can we know that there actually WAS millions of dollars of put options on airlines and NOT know their names?

How is that even possible?

Who said there was millions of put options bought?

Let's start there !!

Paper AvalancheHi GoldFinger!!!!#1475869/19/06; 17:35:12

Awesome and insightful post as always. I love your stuff. Hey, when you said "however, it can't buy as many dollars as it once did" are you refering to bank credit / debt dollars (FRN's)?

If instead of "buying" six $100 bills a week or so, what if you buy 573 $1 bills today? You would have 95 times the number of dollars!!!!

What? Quantity of dollars doesn't matter because the bank credit / debt dollar is a manipulated accounting abstract?

I agree.

Your post gives all who enjoy this board a terrific reason to rewalk the golden trail to further their understanding of pure physical wealth's (gold) inability to be "priced" in terms of a unit of measure that has no physical value. This is one of the fundamental steps in understanding gold as a store of wealth instead of money and a glimpse at the mathematically inevitable result of the struggle between physical gold and fiat credit.


CKMThe Pope's Remarks#1475879/19/06; 19:07:58

Consider the fact that the pope is not only a scholar but a politician -- and a good one, or he wouldn't have become the pope. He is not only a head of state, but the head of a global church with a billion members. The church is no stranger to geopolitics. Muslims claim that they brought down communism in Afghanistan. That may be true, but there certainly is something to be said also for the efforts of the Catholic Church, which helped to undermine the communism in Poland and to break the Soviet grip on Eastern Europe. Popes know how to play power politics.

There is an intensifying tension in Europe over the powerful wave of Muslim immigration. Frictions are high on both sides. Europeans fear that the Muslim immigrants will overwhelm their native culture or form an unassimilated and destabilizing mass. Muslims feel unwelcome, and some extreme groups have threatened to work for the conversion of Europe.

It is obvious that Benedict delivered a well-thought-out statement. It is also obvious that the Vatican had no illusions as to how the Muslim world would respond. The statement contained a verbal blast, crafted in a way that allowed Benedict to maintain plausible deniability. Indeed, the pope already has taken the exit, noting that these were not his thoughts but those of another scholar. The pope and his staff were certainly aware that this would make no difference in the grand scheme of things, save for giving Benedict the means for distancing himself from the statement when the inevitable backlash occurred. Indeed, the anger in the Muslim world remained intense, and there also have been emerging pockets of anger among Catholics over the Muslim world's reaction to the pope, considering the history of Islamic attacks against Christianity. Because he reads the newspapers -- not to mention the fact that the Vatican maintains a highly capable intelligence service of its own -- Benedict also had to have known how the war was going, and that his statement likely would aid Bush politically, at least indirectly. Finally, he would be aware of the political dynamics in Europe and that the statement would strengthen his position with the church's base there.

GoldiloxThe Pope's remarks - well considered?#1475889/19/06; 20:00:12


The Pope's major mistake is "playing politics" in the first place. How does a moral and religious leader point his finger at centuries old writings that encourage "spreading the word with the sword", when "spreading Catholicism" in South America centuries later caused the direct death and enslavement of many millions that still live as serfs to their European born leaders. They have yet to "address" that situation, or even acknowledge it, even as some of their own are "purged" in the process of making moral statements.

Another case of the pot calling the kettle black! No peace-making can be expected to come from that posture.

While religion itself is a "personal" choice, the history of religion as a political tool is fraught with genocides, illicit dealings, and "well-postured" silence at the inhumanity dealt to to those who do not toe the dogmatic line.

To me, this was the greatest fear of the US founding fathers, as leaders who feel "led" to dehumanize their enemies and dissenters with "God as their guide" tend to dehmanize their friends sooner or later, as well.

Wasn't it Jesus who said, "As you do unto the least of these, you also do unto me"?

USAGOLD Daily Market ReportPage Update!#1475899/19/06; 21:35:04">
The Daily Gold Market Report has been updated.

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

TUESDAY Market Excerpts

Gold gives back most of Monday's gains

September 19 (from Reuters) -- Gold futures in New York closed sharply lower Tuesday as investors opted to sell after a prior rally due to lingering weakness in metals and energy markets after a recent drop to multi-month lows, dealers said.

The COMEX December gold contract fell $9.60 to conclude at $583.20.

"Technical funds have been shorting the gold market, the silver market and selling the energy market as well, so you have new shorts in the market who I think are defending positions and selling on rallies," said Mike Guido, director of hedge fund marketing at Societe Generale in New York.

U.S. oil futures fell to fresh six month lows below $62 a barrel, resuming the steepest slide in more than a decade as high inventories eased supply worries ahead of winter and countered concern over simmering geopolitical tensions.

"All that seems to be going on is we're still basically in a trading range between, say, $575 or $580 an ounce on the downside and $595 to $600 on the upside" in COMEX December gold, Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, said earlier.

Prices got little in the way of safe-haven support from a crisis in Thailand, as gold mostly tracked crude as well as a stronger dollar. The Thai army took control of Bangkok on Tuesday without a shot being fired and announced a commission to reform the constitution, despite the prime minister's declaration of a state emergency from New York.

Scotiabank's precious metals division, ScotiaMocatta, said weak oil prices had dramatically depressed gold and silver over the last two weeks, but their fall was tempered by a strong start to seasonal buying from physical market players.

A fall in bullion from above $660 an ounce in July to below $600 this month generated a "strong resurgence in demand" from India, the Middle East and Asia, coinciding with the beginning of the annual festival and wedding seasons which run until March, ScotiaMocatta said in a quarterly report.

"In India, much of the increase can be attributed to domestic investment product demand which has recently seen a phenomenal surge at the expense of the more traditional jewelry market," said the firm's director of sales, Bernard Hunter.

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

TownCrierGold Rises in Asia as Price Drops Attract Buying#1475909/19/06; 21:47:13

Sept. 20 (Bloomberg) -- Gold rose in Asia amid buying from jewelers, who are increasing their purchases after the precious metal's 8 percent decline this month.

The bullion's drop is attracting jewelers looking to build stocks before next month's Indian wedding season and the year- end holidays. Buying in Thailand isn't related to yesterday's military coup, which appeared orderly, said trader Ng Cheng Thye.

``India, Thailand, Indonesia, the whole region has been buying heavily,'' Ng, head of the precious metals market desk at Standard Bank Asia, said by phone today from Singapore.

...Still, gains may be capped by continued selling by hedge funds...

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

It is important to be clear on this. For the most part Hedge Funds do NOT have metal to sell, and thus it is largely PAPER derivatives of gold that they are selling, thus making life easier for those of us who endeavor to load up on the metal for as long as this topsy turvy market arrangement endures.

Blessings upon the hedge funds and the mothers that raised them.



Chris PowellROB-TV sponsors 'The Great Gold Debate' -- GATA dispatch#1475919/19/06; 22:28:31

12:13a ET Wednesday, September 20, 2006

Dear Friend of GATA and Gold:

For an hour Tuesday Canada's Report on Business Television sponsored "The Great Gold Debate" between our hero, John Embry, chief investment strategist for Sprott Asset Management in Toronto; Paul van Eeden, the well-known gold market analyst and president of Cranberry Capital; and Stephen Hochberg, chief market analyst for Elliot Wave International.

The most telling parts of the program may have been when Embry read one of the several official confessions of the gold price suppression scheme, the speech of William R. White of the Bank for International Settlements, delivered to a BIS conference in June 2005, wherein White identified suppressing the price of gold as one of the five primary purposes of international central bank cooperation:

Whereupon van Eeden and Hochberg insisted again that there is no evidence of central bank intervention against gold.

Well, as somebody said a long time ago, there are none so blind as those who will not see. U.S. Treasury Secretary Henry Paulson might have stopped by the ROB-TV show to give the panelists U.S. Government-issued boxes of Cracker Jacks with gold eagles or maples as the surprises in them and van Eeden and Hochberg might have said only, "Yummy! There's no evidence of central bank intervention against gold!"

After all, haven't the Elliott Wavers been short gold since about $285? (For their sakes let's hope that they have been only theoretically short; otherwise they couldn't afford even Cracker Jacks.)

Anyway, you can watch "The Great Gold Debate" for a week at the ROB-TV archive here:

It's in the Tuesday section at 12:30 p.m.

The Canadian commercials are always interesting, and unlike TV in the United States not one of them mentions erectile dysfunction or laxatives. It's almost like being young again.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

a banker"intervention against gold"#1475929/19/06; 23:26:30

"intervention against gold"
"intervention against gold"
"intervention against gold"

We hear this again and again like a broken record. Without the Why's and Wherefore's the utterance is worse than pointless.

"The man is starting a fire!"
"The man is starting a fire!"
"The man is starting a fire!"

This seems alarming if we are fed evil imaginations of the man to be standing in the forest of dry trees.

It has different meaning when we are brought to understand that fire may be used to fight a fire.

To see only half the picture can be more misleading than being shown no picture at all. The responsibility is yours to determine how much of the picture is reaching your mind.

Why do GATA-minded persons fail to become acquainted with those of us who have adopted policy alignments with which freely rising gold is to be favorable?

There are enough now that the old balance has tipped. The old microscopic views must receive new interpretations if they are to be seen without misleading distortion.

It is your responsibility to suspend judgement if the parts reaching your mind can not be seen and reconciled as consistent with the more obvious elements of the new whole.

The Invisible HandAnd the POG is collapsing ...#1475939/19/06; 23:58:51

... and the gold reserves are, in this transitional phase, being redistributed


Now $570.

Note that the median price of gold (POG) was $400 over the last 25 years.
median = the price level around which the POG oscillated

From $400 to $570 = +40% in 25 years!!!

If gold had had the same yield as a 6% bond, that should have been ($400 x 4 =) $1,600.

This POG is absurd to such an extent that we MUST wonder what the price hides. What factors led to today's price of $570?

This Hand failed to notice ANY analyst/observer who is able to ask, let alone answer to, this question.

Let me explain:
MAIOR: (Given that the POG was 25 years ago at $400,)
the POG should be now at least at $1,600 and if it is lower, then there must be something not kosher
MINOR: The POG is at $570
CONCLUSION: Something is not kosher in the gold market.

Where are all those pragmatically thinking US of A-ans with their so-called financial brains - if any?

Is it not yet sinking in that their theory holds no water and that nothing has changed in the 35 years gold containment?

Remember this from yesterday?
Currently the IMF follows rules originally drafted in 1977 after the 1973 collapse of the international gold standard and fixed-exchange-rate system.

My dear American observers
(How the hell, can you observe, when you participate in the game? -
Life, said Pythagoras, is like the great games in which the best role is the spectator; most people hunt for gain or fame, but philosophers search for the truth)
maybe it is time that you start accepting the view that the present euro gold commitments must be framed within the transitional gold reserve redistribution among the European System of Central Banks (ESCB) in ANTICIPATION of the COLLAPSE of the DOLLAR-SYSTEM.

If you are unable to accept this conclusion, then you must again look up Aristotle, the father of logic, and you could reason in the following way:

MAIOR: As a result of all the cancers of the last 35 years, the dollar should be near-dead
MINOR: The dollar is not near dead
CONCLUSION: The dollar-system withstood the cancers and is very healthy.

This reasoning takes no account of the invisible story of the gold redistribution among the ESCB at the present hilariously low prices. In you take as the antecedent of MAIOR "As a result of the gold redistribution among the ESCB in anticipation of the collapse of the dollar-system", then the consequent of the MAIOR becomes "the dollar is near-dead" which is then contradictory with the minor. Ex impossibile sequitur quod libet. Out of that which is false follows anything you want.

Suppose that the POG falls through $540, the previous bottom, and then gently goes back to $400. Would this mean that gold is no longer the hedge against almost everything and everybody?

It will be interesting to see whether gold continues its collapse or whether there follows a spike-up.

Anyway, if it collapses, there will always be posters here saying "Buying opportunity".

Heads you lose, tails I win!

But deep down, we all know that ...

Unfortunately, every fall of the POG makes us doubt.


Check your premises!
Contradictions cannot exist!

BTW (for Ayn Rand fans), Aristotle never said that A=A.
How could he have said it? He used the Greek alphabet.
Neither does Thomas Aquinas know the principle of identity as first principle.
It is true however that many neo-Scholastic authors mention it, almost always reducing it to the principle of non-contradiction (Alvira, Clavell and Melendo, "Metaphysics", Manila: Sinag-Tala Publishers, 1991, p. 41.)

The Invisible HandFlatliner and Kudrin#1475949/20/06; 00:26:50

No sharp fluctuations expected in dollar exchange rate in foreseeable future - Kudrin
MOSCOW. Sept 19 (Interfax) - No sharp fluctuations are expected in the exchange rate of the U.S. dollar in the foreseeable future, Finance Minster Alexei Kudrin told reporters.
"There won't be any noticeable fluctuations," he said.
The dollar lost a lot in the previous period, he said. "But if we talk about the future, the American economy remains the leading economy and it accounts for one-third of world GDP," Kudrin said.
The U.S. authorities have taken MEASURES to reduce the trade deficit and this "is playing a role," he said.
Kudrin said that one should listen to the International Monetary Fund, however if the exchange rate of the dollar drops it will do so very slowly. The IMF earlier forecast the possibility of a strong drop in the dollar's exchange rate against world currencies

Flatliner (9/18/06; 21:54:45MT - msg#: 147571)
Now, what find most interesting about this is that the IDEA behind allowing [JPMorgan Chase] to get involved seemed to be to balance out speculation money with unlimited money in order to keep the price of the commodity stable. If you can take unlimited loses AND only a fraction of the longs actually take delivery, that speculation money that drives the price up can be countered with commodity liquidity that keeps the price down. This is a cost affective way to maintain order in society.
Now, what do we all see as being the result of this? For starters, it's Amaranth. IMHO, there is a connection here that all should learn from.


Does this IDEA equal those MEASURES?

The Invisible HandThe system is broken#1475959/20/06; 01:26:14

Kudrin says that for the moment everybody is still happy with the system and thus that nobody wants to change anything

Before I reread Flatliner, it was unclear to me what measures the US of A would have taken to lower the trade deficit.

Now, what do we all see as being the RESULT of this, asks Flatliner.
And Flatliner replies: For starters, it's Amaranth, Amaranth being a hedge fund suffering huge losses, says Goldilox

But back to those MEASURES. What measures did the US of A take to lower the trade deficit? The tumbling of the price of oil from $80 to $63?
So, Kudrin (and OPEC) agreed with this tumbling in order to consolidate the status quo.
As long as the price of gold remains at $600, oil producer can still buy enough to consolidate their wealth.
There thus SEEMS still to be a will to synchronise all markets. Or is it?

Most bourses are rising back to their 2000 All Times Heights (ATHs).

This is being allowed by our masters because we, the subjects, are happy with that.

To that effect, our masters of the dollar-International Financial and Monetary System (IFMS) are "intervening" selectively in the oil-, gold-, exchanges rates- and interest rates markets. In that way, the "system" has its permanent winners and losers

That's how the system could survive for such a long time.

That's also why the system is itself the big winner at the expense of all those who produce and possess most physical wealth (Asia, oil/gas).

The losers will (have to) demand more and more indulgence from the system in order that they (the losers) will not be/remain the total losers.

In such an environment, the invisible hand has to constantly perform a gargantuan acrobatic equilibrium exercise.

Hence, all the IMF comedy concerning the yuan float.
The dollar-IFMS wants China to be a second dollar-loyal Japan.
The dollar-IFMS will not succeed in these attempts.

How can there a North Atlantic Free Trade Area (NAFTA) à la Germany's Angela Merkel when, as I explained yesterday, France's Chirac wants a Eurasian unity, which will be achieved horizontally by integrating all the economies into one?

Contrast this to the "unity" which the US of A wants to achieve of the American continent by dollar-dominating / colonialising South-America.

The petro-euro has no such dominating / colonialising intents.

Quite to the contrary, Venezuela, Iran, Malaysia and Indonesia seem to voluntarily want to call their oil-linked currency, the petro-EURO

As I posted earlier
This article is from 30 August 2006


The project will be introduced in three stages:
-First, the Iranian Oil Bourse will be established where oil will be traded in euro
-Then, the currencies of the participants will linked to the price of oil and trade within the participating countries will occur only in Petroeuro
-Finally, the Petroeuro becomes the means of payment in the participating countries.
Four countries are very interested in the realisation of the project: Venezuela, Indonesia, Malaysia and, of course, Iran itself.

Why it will be called the Petroeuro and not the Petrodinar is not clear to me.

How could Kudrin then say that for the moment everybody is still happy with the system and thus that nobody wants to change anything?


But without brains, eyes are useless.

As I said, just before midnight,
Where are all those pragmatically thinking US of A-ans with their so-called financial brains - if any?

The Invisible HandIMF vs ECB#1475969/20/06; 01:43:48
Currently the IMF follows rules originally drafted in 1977 after the 1973 collapse of the international gold standard and fixed-exchange-rate system
IMF rules don't expressly bar a country from pursuing any exchange system - except one that's linked to gold


Or do the IMF rules allow an exchange system linked to oil?

And is the petro-euro an attempt to let the gold-euro enter through the back-door?

The Invisible HandThe global dollar glut#1475979/20/06; 02:11:10


It is the global dollar-glut that makes this -unit "unique" among all other currencies.
US-dollar *-export-* (read dollar-globalisation) started when the US of A decided to confiscate gold from its own citizens. Dollar-export took a leap from 1971 onwards and is now in full exponentional swing.

The other side of this systemic dollar-globalisation is exportitis to the US of A and dollar-stocking + circulation outside US ofA borders.

During this 8 decades long process, the dollar-unit gradually lost all of its original (unofficial) reserve-status. Today, the dollar-unit is in the process of losing its use-function as trade settlement unit. As a result of this systemic rising dollar-glut, we are now faced with systemic growing global imbalances !!!

In this process, the dollar-glut is suffocating all other currencies and their local (internal) economies. The US of A-dollar-glut producers are expanding dollar-debt versus dollar-surpluses that increasingly have to be stocked, totally unproductive, and have to be perceived as dollar-reserves so as to hide the absurdity of this dynamic.

It all started with millions - went on to billions - and now we're dealing with trillions.
The US of A-dollar-glut made the dollar a *non-convertible* unit ! A growing stash of dead digital units flashing from screen to screen. - compare the daily d5 trillion dollar repo-market.

This US-dollar-glut is now resulting in a global systemic impoverishment . All other currencies and their local (internal) economies arebeing killed through dollarisation.


We should know better.

The rest of this message is way off topic. Sorry for abusing the bandwidth.


Pythagoras compared life to the Great Games, where some went to compete for the prize and others went with wares to sell, but the best as spectators; for similarly, in life, some grow up with servile natures, greedy for fame and gain, but the philosopher seeks for truth.

After quoting the three origins of this quote, the website I just referred quotes
Aristotle's, "Metaphysics", 980a
"All men by nature desire to know. [Pantes anthropoi tou eidenai oregontai phusei]. An indication of this is the delight we take in our senses; for even apart from their usefulness they are loved for themselves; and above "all others the sense of sight. For not only with a view to action, but even when we are not going to do anything, we prefer sight to almost everything else. The reason is that this, most of all the senses, makes us know and brings to light many differences between things. "

Four hundred years after 830, still before the so-called Renaissance, Dante Alighieri wrote his Comedia, later labelled the Divina Comedia, which consisted of three parts, part I being the Inferno.

In 1954, The Inferno was translated into English by John Ciardi. On Bastille day 1953 Archibald T. MacAllister wrote an introduction to the Ciardi translation. The first Signet Classic printing of this translation dates from June 2001.

Page xiv of the Signet Classic MacAllister introduction:
Dante firmly believed that the senses were the avenues to the mind and that sight was the most powerful (noblest, he would have said) of these.
Hence his art is predominantly visual.
He believed also that the mind must be moved to grasp what the senses present to it,
he combined sight, sound, hearing, smell and touch,
with fear, pity, anger, horror and other appropriate emotions to involve his reader to the point of seeming actually to experience his situations and not merely to read about them. It is really a three-dimensional art.

What does man need to live? Leibniz demonstrated ethics in a geometrical way His book was "Ethica more geometrico demonstrata". "More" is the ablative from "mos", which here means "manner". Another meaning of "mos" is custom, habit, hence "mos" (whose genitive is "moris") is also the etymological root of "morality".

Ayn Rand went on to say that morality is an objective requirement for man's survival and that art is a selective re-creation of reality according to an artist's metaphysical value-judgments.

Do habits/morality arise out of the senses, or rather out of man's thinking upon what his senses have perceived? And is the wisdom of art dependent upon the evidence of senses as appraised by the intelligence?

As I said earlier this morning:
How could Kudrin then say that for the moment everybody is still happy with the system and thus that nobody wants to change anything?



As I said, just before midnight,
Where are all those pragmatically thinking US of A-ans with their so-called financial brains - if any?

Sorry for the rambling.

The Invisible HandThe comedy already revisited#1475989/20/06; 02:29:09


MOSCOW Nine months after piquing European governments by shutting the flow of natural gas in a pricing dispute during the coldest days of winter, Russia faced another din of international criticism Tuesday about its energy policies, this time from Asia.
Russian regulators withdrew an environmental permit Monday for the $20 billion Sakhalin-II oil and natural gas development, which employs 17,000 people, with the two largest Japanese trading and engineering companies as minority owners


Wealth will now have to be valued as to its equivalent instead of according to more US of A dollar-glut.

This is the CLASH between the CIVILISED US of A dollar-glut and the BARBAROUS producers/owners of "real" wealth.

It will be seen from the foregoing chapters that the Erewhonians are a meek and long-suffering people, easily led by the nose, and quick to offer up common sense at the shrine of logic, when a philosopher arises among them, who carries them away through his reputation for especial learning, or by convincing them that their existing institutions are not based on the strictest principles of morality.

a bankerIMF vs ECB#1475999/20/06; 02:38:23

IMF vs ECB = No contest.

The ECB has relevance. The IMF has none.

It is as you have marked. The passage of time has left the IMF behind. It is become a bureaucratic fossil cemented in self-serving inertia. Were the IMF doors and windows shuttered on the morrow and its servants sent home, an objective historian could record no place upon Earth where there was a good deed left half undone by its sudden absence from the scene.

The Invisible Handa banker#1476009/20/06; 04:51:39

Where do you come from?
The Invisible HandChavez proposes creation of 'Bank of the South'#1476019/20/06; 06:00:19

Havana, Sept. 17 (PTI): Venezuelan President Hugo Chavez has proposed the creation of a bank of south-American nations to use international reserves for financing the development of these countries.
"Where are our reserves today?... in the countries of the North. This is about re-launching the potential of NAM and the basis of unity of this movement," Chavez said.
However, Chavez said it was action and not debate that was needed to hasten the process of setting up such an institution.


The only problem is that the internationalistic dollar bankers can financially-monetarily cluster bomb like they did with the gold dinar. Is that the reason why Iran, Venezuela, Malaysia and Indonesia are adopting the petro-euro, linked to the price of oil, not to the price of the euro?

The gold standard and the dollar standard are two very different animals.

The dollar standard is a 100% *non-standard* datum.

Like the metre, the dollar standard can endlessly be stretched.
The metre, or meter (US), is a measure of length. It is the basic unit of length in the metric system and in the International System of Units (SI), used around the world for general and scientific purposes. The symbol for metre is m. Historically, the metre was defined by the French Academy of Sciences as 1/10,000,000 of the distance from the equator to the north pole through Paris. Now, it is defined by the International Bureau of Weights and Measures as the distance travelled by light in absolute vacuum in 1/299,792,458 of a second. This is approximately the distance from floor to hip bone on the average barefoot man.

Like the metre, the dollar standard can endlessly be stretched. How could it ever compete with eternal gold?

Some antitrust activists would do well to leave their dollar-loyalty behind. (Note that this would not justify antitrust activism.)
As for the recent drop in the price of gold, it might indicate that investors are "beginning to doubt that the [U.S.] trade deficit will produce a huge rush to the exits from the dollar, as the dollar's adjustments to the trade gap continue to be orderly."

For a banker

Druida banker (9/20/06; 02:38:23MT - msg#: 147599)#1476029/20/06; 07:08:33

Druid: This from a trader's perspective. I don't think that it was a coincidence at all. Trichet is taking over from Greenspan. I think Paulson will carry more weight then Bernanke.

Central Bankers Unite in Battle against the "Commodity Super Cycle"

Coincidentally, the peak in the historic CRB index rally was recorded just three days after a May 8th meeting of central bankers from leading industrialized and developing countries in Basel, Switzerland. Jean-Claude Trichet, spokesman for the G-10 group of central bankers, urged members to avoid complacency, because inflationary expectations were rising during a period of high commodity and energy prices.

"It is not the time for complacency if we want this global growth to be sustainable. We have to be careful to see that this period of global growth does not end up in inflation. Global economic growth remains strong and steady, but there are elements there that call for very special attention, especially in terms of inflationary risks. We have to look at the inflationary risks with great attention," Trichet declared.
Central bankers from a dozen different countries heeded Trichet's siren call to tighten their money spigots, including emerging market giants in China, India, and Russia. A barrage of quarter-point rate hikes by a united front of central banks, and higher bank reserves requirements in China and Russia, started to flatten out the Reuters CRB index in June - July, and then greased the skids for its biggest downfall in 16-years, in August and early September, led by a $15 /barrel slide in crude oil.

The historic slide in the Reuters CRB took place since August 8th, even after three major players, the Federal Reserve, the Bank of Canada, and the Bank of Korea ran out of ammunition, and the Bank of Japan was handcuffed by the ruling LDP party. But other central bankers picked up the slack in the battle against the "Commodity Super Cycle", led by China and the ECB. Higher interest rates are still on tap for Australia, China, the Euro-zone, England, India, South Africa, and Switzerland in the months ahead, to keep commodity traders on edge.

GoldiloxAmaranth and "sophisticated" investors#1476039/20/06; 08:30:35

CNBC reports that a number of public employee retirement funds were steered to Amaranth as a doorway into commodity investments, including the San Diego County Pension fund, already embroiled in litigious disputes.

The fallout from this endangers a lot of of "secure" pensions. In some municipalities, pension losses are guaranteed by the budget, placing even more burden on red-inked municipalities.

Is the financial media chasing the big investors away from "commodities, in general?

Just some morning thoughts . . .

BoilermakerGyurcsany fesses up in Hungary#1476049/20/06; 09:08:21

"Gyurcsany has been at the center of a scandal that threatens to throw Hungary into a political crisis. The 45-year-old politician, seen as one of the most successful young leaders in postcommunist Eastern Europe, has admitted to lying for years to Hungarians about the state of their country's economy to win reelection."


I don't suppose GWB (or any other US politician in either party) will take the cue offered by Hungary's PM. Oh well, the US is too big to fail. Let's charge into the abyss and then we'll deal with it.

GoldiloxNew Highs?#1476059/20/06; 09:09:03

Stock markets are approaching new "highs" according to CNBC.

While they banter the term "inflation" around like it's meaningful, they DO NOT apply it to their reported indices.

Is this a case that what's good for the Goose is not so good for the Gander?

arbyhCRMPG - collusion and manipulation #1476069/20/06; 09:37:47
'Counterparty Risk Management Policy Group'.

CRMPG: "since we know that financial disturbances and even financial shocks will occur in the future, and we know that no approaches to risk management or official supervision are fail-safe, we also know that we must preserve and strengthen the institutional arrangements whereby, at the point of crisis, industry groups and industry leaders, as well as supervisors, are prepared to work together in order to serve the larger and shared goal of financial stability."

CRMPG: "It is acceptable market practice for a financial intermediary's sales and trading personnel to provide their sophisticated counterparties with general market levels or "indications," including inputs and variables that may be used by the counterparty to calculate a value for a complex transaction. Additionally, if a counterparty requests a price or level for purposes of unwinding a specific complex transaction, and the financial intermediary is willing to provide such price or level, it is appropriate for the financial intermediary's sales and trading personnel to furnish this information."

Thoreauly@ Boilermaker re: Gyurcsany fesses up in Hungary#1476079/20/06; 09:45:19

As Jeffrey Tucker over at the Mises site wrote in response to Gyurcsany's admission that he "lied morning, evening, and night" to get elected:

"In other words, a dog barked, a cat meowed, and bird chirped," as lying is the natural mode of political discourse (all the more so when it comes to the lie that is centralized, fractional-reserve banking).

FlatlinerThe system is functioning#1476089/20/06; 10:53:03

Just because something isn't fair, doesn't mean that it's broken.

What I see is a fully functioning system. Central banks around the world have amassed huge stockpiles of fiat cash that they know they can't spend on real things without locking the system. Picture China converting it's trillion into commodities. We all know what that would do to the price of these commodities. At the same time, gathering US dollars is a futile exercise if they can not find value in them. Where is this value? What can they do with these dollars to skew the balance of trade there way?

They buy time. (Remember time? Time is our friend.) We have all witness the recycling program into US Treasury notes. This is great for them because they see that our GDP is mostly based on consumers finding cheap money to spend. Thus, taking a few billion here and a few billion there and making it available for loans keeps the consumer buying goods and services that feed the trade imbalance for those gathering US Dollars. When you think about the scale of the trading going on, a few recycled dollars ‘lost’ is really a great investment if it brings in a trillion.

But recycling into treasury notes doesn't complete the full picture. What about building an army of battleships, skyscrapers and transportation infrastructure? To do these things, you need to have a handle on basic resources (over time). What if you look into your economy and find that you'll need so much copper that when the world figures it out, everyone will charge an arm and a leg to get it. Here, the one that gathers all these extra dollars can work, as part of the team, to hold down commodity prices while all their buddies to out and sign contracts for real metal.

You can look over all the different cases of strange commodity ‘price’ action and what you'll probably see is that there are very large players in the field that have a vested interest in keeping the price at, or just above, the cost of manufacture (or mining). By doing this, the dollars that they hold remain strong.

Many call foul of the Fed at being the one key source of commodity price control. I question this. The words that we read over and over again lead me to believe that there is a collection of banks that all work together to maintain the strong dollar function on a worldly scale. There are a collection of individuals (at the top) that make more wealth out of holding the commodity prices down so the actual commodities can be used to provide function to the other deals that depend on them.

How long can these organized individuals hold any chosen commodity price down? As long as it works to their advantage! If spending a billion makes you two, why would you stop doing it? If the depreciation value of the dollars that you hold is below the growing purchasing power that you hold, you are still coming out ahead.

If spending money into a rising commodity market means that you are able to keep the flow of the commodity happening, it is a good investment.

In light of this all, there are those among us that look at the current commodity prices as a gift. Those with big pockets are intentionally holding down commodity prices in a conscious effort to keep it flowing in US Dollars. To the little guy with extra US Dollars, they can take advantage of this by picking up some of the actual commodity at the discount prices.

To me, as long as the current working system proves favorable to the parties taking advantage of it, they will continue to play.

There are many that will state that this is totally unfair! And, in an honorable system, it is. In a capitalistic system, he who can create the advantage makes out the winner.

The key thing to look for is where does the advantage break down? When will taking a loss not create a profitable situation? Or, will a situation arise that closes the opportunity door that is opened by taking a loss?

Overall, I buy gold because of the trickery found in this process. Few understand that there are organizations out there willing to take a loss to keep their advantage. Because of this, there will be hoards of speculators that loose fiat ‘betting’ against the system. These loses will be huge, but not to large for a central bank to come to the rescue! This has happened many times in the past, it will happen again. When the rescue is performed, even more fiat is created to negate those loses. Over time, that fiat flows through the system ending up in the hands of the most capitalistic and it is used to open up new opportunities. If the fiat doesn't end up back in the hands of those in control, but rather, in the hands of the ants, the physical market will get very tight. As long as the ants hold strong, the loses will have to be larger to get the ants to part with their commodities!

At that point, will the loses taken supporting the strong dollar policy continue to provide the capitalistic advantage?

If no – Freegold.
If yes – more of the same.

Time is your friend. Use it wisely.

968@ Flatliner#1476099/20/06; 11:16:51

Great post. Thanks !
mikalGold stamina#1476109/20/06; 12:57:23

Gold's Dynamics Arise Again
The certainty inherent in physical gold galvanizes during autumn in Calgary, as Amaranth hedge fund's Brian Hunter blows $5bn in a week on bad natural gas trades.
by Barry Sergeant | 20 Sep 2006
Snippits; "Financial markets were taken aback this week by news that Brian Hunter, a Nick Leeson wannabe, lost $5bn in a week on bad natural gas trades. Hunter is based in Calgary but works for Amaranth Advisors, a hedge fund based in Connecticut, where the sexiest hedge funds have tended to congregate.
Unlike Leeson, who lost £1.3bn of his employers’ dough in dodgy trades, Hunter liked to be thought of as genuinely gifted. As the dust settles, the loss of $5bn in a few days once again highlights the risks inherent in the activities of hedge funds, and refocuses the safety of traditional safe-haven assets such as gold bullion.
But the news about Hunter cannot be fully categorised as a surprise. Just a few months ago, the European Central Bank (ECB) warned that hedge funds had created a "major risk" to global financial stability; for this, the ECB warned further, there were no obvious remedies."
[Quotes from Warren Buffet are included among the discussion of derivatives that follow in the article. A good basic dose of caution IMO.]

"For investors who disavow the fantasies of hedge fund managers, along with fiat money, gold bullion remains one of the most attractive alternative investments. This week, analysts at ING Financial Markets said gold prices were likely to rebound going into next year. Among the bull points for gold bullion, ING analysts mention rising geopolitical tensions, gold's status as a safe-haven asset, support from still-high crude oil prices, the easing of central bank selling of gold, and an increase in institutional demand.
Global macro fundamentals remain focused on the value of the dollar, which has once again started to exhibit its inverse correlation with dollar gold prices, a relationship firmly in place for more than a decade. A number of exogenous factors, led by the US's now entrenched habit of importing about double what it exports, are likely to depress the dollar's value going forward. That would be good for gold, and all other commodity and metal prices. For hedge funds, the outcome is anyone's guess."
[This closely follows what recognized experts
like MK and TC have been saying here for years.
In the end, guidance such as this makes rationalizing physical gold and buying and holding much easier.]

mikal"Dangerously sloppy" no longer accepted accounting practices!#1476119/20/06; 13:23:38

FSA Warns Banks on Derivatives Trading | Gillian Tett | Financial Times | September 19 2006

Investment banks and hedge funds were on Tuesday warned by the City watchdog to tackle conflicts of interest and operational problems in the derivatives world or face penalties.

Thomas Huertas, head of the Wholesale Firms Division at the Financial Services Authority, said the trading systems being used for some products, such as equity derivatives, remain dangerously sloppy.

The rest of this article is for subscribers only

mikalUncovering real interest rates and real inflation#1476129/20/06; 14:50:15

End of Great Bond Bull Market
By Joachim Fels - September 20 2006
Excerpt: "Conventional wisdom has it that the forces unleashed by globalisation have depressed world long-term interest rates in recent years and will keep doing so for many years to come. This view rests on two pillars. The first is an alleged global savings glut – an excess of desired savings over desired investment – fuelled by high savings rates in China and other parts of Asia, which has supposedly depressed real interest rates. Ben Bernanke, US Federal Reserve chairman, is a proponent of this theory. The second pillar is the vast supply of cheap labour in China, India and elsewhere, which weighs on the prices of manufactured goods, keeps inflation subdued and reduces the inflation compensation that bond investors demand when buying long-term bonds – or so the story goes.

However, these pillars rest on shaky analytical and empirical foundations. Yes, long-term interest rates have been exceptionally low in recent years. Yet this is unlikely to have been caused by a savings glut, but rather by a global liquidity glut that is now receding. Globalisation is more likely to push real interest rates and inflation higher than lower in the next few years."
"The rest of this article is for subscribers only"

By any objective measurement, gold is entering
a phase of springtime. As other "assets" enjoy
unprecedented popularity and "lifespans", the derision that likely follows them could disrupt and delay any restful "hibernation" and recuperation they
could acquire during their "winter" phase.

USAGOLD / Centennial Precious Metals, Inc.Have you missed the latest? You are invited to join the NewsGroup...#1476139/20/06; 14:55:46">join the newsgroup
TownCrierFOMC Press Release -- Rates held stead at 5-1/4 percent#1476149/20/06; 15:57:23

September 20, 2006

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

The moderation in economic growth appears to be continuing, partly reflecting a cooling of the housing market.

Readings on core inflation have been elevated, and the high levels of resource utilization and of the prices of energy and other commodities have the potential to sustain inflation pressures. However, inflation pressures seem likely to moderate over time, reflecting reduced impetus from energy prices, contained inflation expectations, and the cumulative effects of monetary policy actions and other factors restraining aggregate demand.

Nonetheless, the Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Susan S. Bies; Jack Guynn; Donald L. Kohn; Randall S. Kroszner; Frederic S. Mishkin; Sandra Pianalto; Kevin M. Warsh; and Janet L. Yellen. Voting against was Jeffrey M. Lacker, who preferred an increase of 25 basis points in the federal funds rate target at this meeting.

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

Steady as she goes...


FlatlinerDid anyone have any doubt?#1476159/20/06; 16:00:25

Sept. 20 (Bloomberg) -- Citadel Investment Group LLC and JPMorgan Chase & Co. plan to take over energy trades from Amaranth Advisors LLC, the hedge fund whose wrong-way bets lost about $4.6 billion this month, two people with knowledge of the decision said. ...

Flatliner – When you take the speculation money out of the market, it makes sense to gobble up those you take out of business.

mikalGold supply#1476169/20/06; 16:25:13

Ultra-deep Mining Won't Solve Gold Supply Problems
FMNN | Staff Reports | September 20, 2006

USAGOLD Daily Market ReportPage Update!#1476179/20/06; 17:10:50">
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 up as physical buying takes hold

eptember 20 (from DowJones, Reuters) -- Gold futures closed higher Wednesday, much of it on position-squaring as market participants awaited the outcome of a meeting of the Federal Open Market Committee, analysts said.

The COMEX December gold contract rose $3 to settle at $586.20.

"I think that some of the negative sentiment on the metals in overnight trade was pared by a little bit of physical dealing," said Jim Quinn, commodities floor analyst with A.G. Edwards.

"The cash market was stronger at the weaker levels. The market has spent the rest of the day with some position-squaring after gold held (around) $580 overnight and ahead of the Fed statement at 2:15 this afternoon."

Analysts with also cited some physical interest overnight.

Still another analyst, Mike Zarembski of XPRESSTRADE, reported that speculative buying occurred. He also cited some possible physical buying in the mid $580s, plus position squaring ahead of the Federal Reserve.

"I still see a downside but I don't think it's the start of a bear run. It's just a correction. Certainly metals will recover towards the end of the month," Tony Dobra, a director at Standard Chartered Bank, said.

"We have come down a lot but we are still way above where we started the year," he said, referring to a price level of $517 in early January.

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

FlatlinerTime for more hedge funds to collapse?#1476189/20/06; 17:59:02

Thai coup unlikely to ignite wider Asian financial crisis – economists
SYDNEY (XFN-ASIA) - Thailand's military coup ousting Prime Minister Prime Minister Thaksin Shinawatra is unlikely to ignite a financial crisis across the Asian region, economists said.

They said the coup differs from the 1997 Asian currency crisis even though that crisis began with a sharp depreciation in currencies including Thailand's baht which fell sharply in the wake of yesterday's coup.

Commonwealth Bank senior economist Michael Workman said the Thai coup is unlikely to spark a wider financial crisis in Asian region, saying that unlike the 1997 Asian financial meltdown, the coup will not ignite a loss of confidence in the region's financial markets.

Flatliner – Everyone in the west expects Asian currencies to strengthen over time. Hedge funds, in search of higher returns, have been shopping over the pacific for a long time. A drastic currency move may not spark an overall correction, but it will most likely cause pain for some hedge funds. Time – will tell here. We can now watch to see who will get hurt by the Baht.

The Invisible HandLondon Telegraph vs London Times#1476199/20/06; 22:02:42

For the Telegraph, the euro will break up and gold has not yet been invented.

For the Times, the ECB"s policy is different from that of other central banks.
The disintegration of the euro may be drawing closer. Warnings of an EMU bust-up were once confined to a handful of eurosceptic journals: they have since spread to City banks such as Morgan Stanley and HSBC, and are now moving perilously close to the EU core itself.
As The Daily Telegraph's Brussels correspondent, I used to meet for furtive lunches with a Commission economist
(The Invisible Hand: an EU-Kommission-bureaucrat, right?)
who was so worried about the coming smash-up that he had switched his savings into "hard" currencies, choosing foreign accounts beyond EU reach. I joke not.,,1061-2363085,00.html
Instead of warning about the economic disaster that prophets of doom see unfolding, the IMF has predicted an unprecedented fifth year of rapid growth in the world economy
I would add another even more important explanation for the present golden age — the willingness of CENTRAL BANKS and governments in every region of the world APART FROM THE EURO AREA to use proactive monetary demand management to keep economic growth as close as possible to its trend rate.

The Invisible HandWhy October?#1476209/20/06; 22:07:20

UNITED NATIONS (Reuters) - Iranian President Mahmoud Ahmadinejad on Wednesday signalled a willingness to negotiate as major powers said Tehran had until early October to agree to suspend its nuclear programme.


Is October not the month of the stock-market crashes?

For a discussion how Ahmadinejad and Chavez will switch to euro,
see my "His Presidential Excellency Mahmud Ahmadinejad"

My only question is: Why have they not yet switched?

What was that again about the cause and the effect of inflation?;jsessionid=EZEM34AU2MO5HQFIQMFSFGGAVCBQ0IV0?xml=/money/2006/09/21/cnrates21.xml


The Bank of England has issued what experts described as an inflation "red alert" after its independently-produced survey recorded a dramatic spike in living costs.

The Invisible HandThai coup may not lead directly to financial instability#1476219/20/06; 22:27:00


and thus indirectly to financial instability in the region

Flatliner in msg#: 147618 quoted
Thailand's military coup ousting Prime Minister Prime Minister Thaksin Shinawatra is unlikely to ignite a financial crisis across the Asian region, economists said.

(3RD UPDATE) PRESIDENT Gloria Macapagal-Arroyo [of the Philippines] is in "firm control" of the government and the armed forces, [the Office of the President] said Wednesday, a day after Thailand's Prime Minister Thaksin Shinawatra was ousted in a military coup.

Wait until October?

ge@ TIH#1476229/21/06; 01:45:08

Is it possible that, Telegraph could be right and wrong simultaneously at the same time? A rising Euro may force Italy and incrementally other Club Med members (Italy, Greece, Spain, Portugal) out of the monetary union. Not a falling Euro but a rising one. Let us say Euro/Dollar rate rises to 1.6 (quite possible imo). In that case what are Italy's options? If, additionally, a stock market shake-out happens (an interim deflation scare on the way to hyperinflation) and central banks start slashing rates, Italy may be faced with an overvalued currency and a hyper-low bank rate.
The Invisible HandSome thoughts for ge – IMF question to everybody#1476239/21/06; 03:35:56

Date: Wed Feb 04 1998 20:24
Even the new EURO will not be backed by gold! It will HOLD gold only as insurance against the worst outcome, war.

Date: Sat Mar 07 1998 23:16
It is possible that the new oil bid will come about with the introduction of the EURO and give that currency the oil backing!

Date: Wed Mar 25 1998 22:35
The large gold backing for the Euro and the "much greater" gold reserves for the individual countries of the Euro, is a direct result from observations of gold buying by oil!

I am trying to find the articles of the IMF Articles of Agreement which prohibit member countries from linking their currencies to gold.

The full text of Articles is at the link

The prohibition was instituted by the 1978 Second Amendment to the Articles
The Second Amendment to the Articles of Agreement in April 1978 eliminated the use of gold as the common denominator of the post-World War II exchange rate system and as the basis of the value of the Special Drawing Right (SDR).

This amendment has been integrated in the Articles.
Adopted at the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 22, 1944. Entered into force December 27, 1945. Amended effective July 28, 1969, by the modifications approved by the Board of Governors in Resolution No. 23-5, adopted May 31, 1968; amended effective April 1, 1978, by the modifications approved by the Board of Governors in Resolution No. 31-4, adopted April 30, 1976; and amended effective November 11, 1992, by the modifications approved by the Board of Governors in Resolution No. 45-3, adopted June 28, 1990.

It is not just one provision of the Second mendment in the Articles which institute the gold link ban, but several.
Before the Second Amendment of the Articles of Agreement in April 1978, the role of gold in the international monetary system was central and pervasive. The Second Amendment contained a number of provisions that, in combination, were intended to achieve a gradual reduction of the role of gold in the international monetary system and in the IMF. However, gold is still an important asset in the reserve holdings of a number of countries, and the IMF remains one of the largest official holders of gold in the world.

I am too lazy to read the whole Articles. Does anybody know which provisions of the Articles institute the ban?

By the same token, note that the gold haters can be clever. Why didn't they in 1978 just introduce a new article concerning the ban, but did they spread it over several articles?

Which of these IMF Articles of Agreement prohibit member countries from linking their currencies to gold?

SundeckThis and that...#1476249/21/06; 04:58:01

1. The IMF

After the last meeting of the IMF and World Bank, I notice that China's and a few other "emerging" nations' voting power has been increased about two percent. Wow! What a windfall for these future power-houses. Meanwhile, the "submerging" nations (Europe and the USA) still retain predominant voting rights...the US still has its veto 17%.

I suspect the IMF is on its way to monetary extinction, as Asia enhances the Chiang Mai Initiative:

"...``Chiang Mai is already starting to look like a shadow IMF and it may already be too late for the fund to stop this trend,'' Fred Bergsten, director of the Washington-based Institute for International Economics, said in an interview. ``If Asia continues to break away, the IMF's role as a global body would be greatly weakened.''..."

(see this link:

If there is no longer an Asia to bail out, and Latin America is running tidy surpluses and paying down their old IMF debt, then that leaves Africa. But Africa is about as fond of the IMF as W is of Chavez, and China is making inroads there with clear purpose.

Perhaps we need to keep the IMF around to bail out the US when the chickens come home to roost...? ;-)

2. Chavez and Ted Turner

Mmm...I see Ted is living up to his reputation with his frank comments on Iraq, Iran and other things. I didn't realise that he had provided $1B support for the UN. Go Ted...that's what I call philanthropy with a capital $. One of the great American is freedom of speech. See:


And, in a similar vein, Mr Chavez has been using the podium at the UN to get stuck into his old mate W... A bit unfair, I think, as Venezuela wasn't part of the axis of evil, was it? Apparently you can get 40 months in the slammer in Venezuela for defaming the president...mmmm, I think I would still prefer to live in the US...even with W shooting fast and loose from the hip (and the lip).

3. CRB free-fall

I wonder how much of the fall in the CRB is due to hedge-funds desperately closing out long positions in commodities like poor old Amaranth Advisors? and taking on short positions for all they are worth? Expect an over-swing at some point and a sizeable bounce...that's my guess. But then again, if the agents of the FED are involved big-time, then there will be concerted efforts to dampen the rebound near the bottom and hold commodities low in US-dollar terms to help "contain inflation".

I wonder where OPEC will decide it wants the price of oil to settle? Since it is now a "sellers market", and knowing that the US dollar is treading water, I would be surprised if OPEC would be happy with oil less than about $60.

Without invoking hedge funds with their wrgong-side wagers, some of the recent descent in the price of oil may have arisen from calming perceptions about the Middle East in general. Now the US and Iran seem to be getting back on shouting terms, there is probably less chance that Iran is going to sink three oil tankers in the Straits of Hormuz. And peace and understanding is beaking out all over amongst the many smoke-stunned bees... Mmmm, better look out when the smoke wears off and things get back to normal....maybe we will see oil sneaking up towards $70 again....especially if the FED manages a soft-landing in the US economy.

4. Ditto gold and silver.

Are we near the bottom? I think so...



TopazGold Lease.#1476259/21/06; 05:15:16

1yr LR's have quadrupled in Sept giving an impression this PoG level is unsustainable for much longer. Paper Au and the real stuff are in disagreement!
Oct roll-over will be memorable at this rate.

The Invisible HandPOG is low b/c virtual trade in anything systemically swelling #1476269/21/06; 05:17:59

TIME-BOMB of "our" guv'mints’ debt-driven POLITICAL ECONOMY (dollar-hegemony)

for established names as SIEMENS and DAIMLER/CHRYSLER


19.09.2006 14:38
19. September. News-Trading in Derivaten auf deutsche Standardaktien, Bewegungskäufe bei Indizes - dieses Bild bietet derzeit der Markt für Anlage- und Hebelprodukte an der Börse Frankfurt. Die Themen heute: DAX, Allianz, Deutsche Bank, DaimlerChrysler, Siemens.
Bullish für Siemens und DaimlerChrysler

Derivatives on standard shares.
Bullish for Siemens and DaimlerChrysler.


The Financial Industry is proud, is convinced, wants us to believes that it is serving the economy with its engineering. This would be about accommodative global convergence and optimalisation.

This is bull excrement. A financial nuclear TIME BOMB.

This time bomb is threatening not just the exotic financial fringe, but well established names as Siemens and DaimlerChrysler

The danger that this virtual market is systemically swelling is very real as unproductive money is kontinuously looking for the highest return possible.

This is the ONLY reason why the price of gold must still remain so low.

These days, our masters have no problem assimilating Amaranth and its hole of $6 billion (JPMorgan), just like it is child's play for them to let $2 billion flow daily to the US of A.

Our masters are forgetting that the systemic increase of the derivatives trade renders unlimited money creation possible as this new money can be absorbed and neutralised by the increasing volume of this trade.

This explains why this monetary expansion does not lead to price inflation.

For instance, repo-collateral is a guv'mint bond – the collateral is thus a DEBT paper – this guv'mint debt is the result of more expenses than income.

Derivatives are a Tower of Babel built on a swamp.

This is what "our" guv'mints’ debt-driven political economy leads to.

Because of the DOLLAR-HEGEMONY, everybody HAS to participate in the scam.

Siemens and DaimlerChrysler must also participate and derive the bulk of their profit from this virtual trade because there is more debt volume (increasing systemically) to be traded than there are products to be sold.

Dear Reader,

If you want to remember anything from this post, please try to remember that this Hand wanted to draw your attention on/to the SYSTEMIC, "of, affecting or circulating through the entire body", says Webster's, CHARACTER of the GLOBAL IMBALANCES.

The thing which was started by our masters as the most normal/obvious thing in the world (derivatives) has become a systemic and disproportional danger to the global economy due to the DOLLAR-HEGEMONY, the dollar of the Great Satan.

In 1971, Nixon severed in 1971 the link between the dollar and gold.

In 1999, Duisenberg was telling something about re-establishing that link between gold and the euro.

But none of these two chaps explicitly explained WHAT THIS ACTUALLY AND EXACTLY MEANT nor what came in their stead.

(Since the IMF prohibits the linking of a currency to gold) what came in their stead is the CONCEPT OF GOLD-WEALTH-RESERVE.

Or did you expect the dollar-International Financial and Monetary System (IFMS) to start making this concept public?

a bankerThe Invisible Question#1476279/21/06; 05:26:24

"Which of these IMF Articles of Agreement prohibit member countries from linking their currencies to gold?"

Article IV - Obligations Regarding Exchange Arrangements
---Section 2. General exchange arrangements

(b) Under an international monetary system of the kind prevailing on January 1, 1976, exchange arrangements may include (i) the maintenance by a member of a value for its currency in terms of the special drawing right or another denominator, OTHER THAN gold, selected by the member, or (ii) cooperative arrangements by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members, or (iii) other exchange arrangements of a member's choice.

>>>>>>You will find this at the link.
>>>>>>You will find more if you continue here.

Article V - Operations and Transactions of the Fund
---Section 12. Other operations and transactions

(a) The Fund shall be guided in all its policies and decisions under this Section by the objectives set forth in Article VIII, Section 7 and by the objective of AVOIDING the management of the price, or the establishment of a FIXED PRICE, in the gold market.

>>>>>>You may find this of general interest and may find Section 7 to have a sinister air about it.

Article VIII - General Obligations of Members
---Section 5. Furnishing of information

(a) The Fund may require members to furnish it with such information as it deems necessary for its activities, including, as the minimum necessary for the effective discharge of the Fund's duties, national data on the following matters:
official holdings at home and abroad of (1) gold, (2) foreign exchange;
holdings at home and abroad by banking and financial agencies, other than official agencies, of (1) gold, (2) foreign exchange;
production of gold;
gold exports and imports according to countries of destination and origin;
total exports and imports of merchandise, in terms of local currency values, according to countries of destination and origin;
international balance of payments, including (1) trade in goods and services, (2) gold transactions, (3) known capital transactions, and (4) other items;

---Section 7. Obligation to collaborate regarding policies on reserve assets

Each member undertakes to collaborate with the Fund and with other members in order to ensure that the policies of the member with respect to reserve assets shall be consistent with the objectives of promoting better international surveillance of international liquidity and making the special drawing right the principal reserve asset in the international monetary system.

>>>>>And to that end they may wield a very free if not (In)visible hand.

Article IX - Status, Immunities, and Privileges
---Section 3. Immunity from judicial process

The Fund, its property and its assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immunity for the purpose of any proceedings or by the terms of any contract.

---Section 4. Immunity from other action

Property and assets of the Fund, wherever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation, or any other form of seizure by executive or legislative action.

---Section 6. Freedom of assets from restrictions

To the extent necessary to carry out the activities provided for in this Agreement, all property and assets of the Fund shall be free from restrictions, regulations, controls, and moratoria of any nature.

>>>>>They claim so much immunity and yet they demonstrate fear.

Article XIII - Offices and Depositories
---Section 2. Depositories

(b) The Fund may hold other assets, including gold, in the depositories designated by the five members having the largest quotas and in such other designated depositories as the Fund may select. Initially, at least one-half of the holdings of the Fund shall be held in the depository designated by the member in whose territories the Fund has its principal office and at least forty percent shall be held in the depositories designated by the remaining four members referred to above. However, all transfers of gold by the Fund shall be made with due regard to the costs of transport and anticipated requirements of the Fund. In an emergency the Executive Board may transfer all or any part of the Fund's gold holdings to any place where they can be ADEQUATELY PROTECTED.

>>>>>>Pushing the paper to the very limit.

Article XXII - General Obligations of Participants

In addition to the obligations assumed with respect to special drawing rights under other articles of this Agreement, each participant undertakes to collaborate with the Fund and with other participants in order to facilitate the effective functioning of the Special Drawing Rights Department and the proper use of special drawing rights in accordance with this Agreement and with the objective of making the special drawing right the PRINCIPLE RESERVE ASSET in the international monetary system.

>>>>>>>How to escape? The exit hatch for those who find a better way: a policy of marking gold reserves to market value and curbing facilitation of epidemic production of intangible bookkeepers gold.

Article XXIV - Termination of Participation
---Section 1. Right to terminate participation

(a) Any participant may terminate its participation in the Special Drawing Rights Department at any time by transmitting a notice in writing to the Fund at its principal office. Termination shall become effective on the date the notice is received.

(b) A participant that withdraws from membership in the Fund shall be deemed to have simultaneously terminated its participation in the Special Drawing Rights Department.

The Invisible HandErsatz Economy#1476289/21/06; 06:12:56

My portfolio consists for 100% of Maple Leafs because I think we are living in an Ersatz (substitute) Economy in which the Financial Industry's behaviour is giving rise to a CATASTROPHIC situation which will lead to a … catastrophe.

Nobody wants to admit that the profit of companies quoted on the stock-market originate in the organisation of the financial industry. Nobody knows / wants to know what she has under the pillow or what she is in fact trading (financial "pro-ducts")

The real nature of the three world-economies is evolving in the following way:

1/ Anglo American dollar : Globalising debt-driven and externally geared/directed (directed towards the rest of the world) - Financial economy.

2/ Asian: Production of tangible goods and services - Physical economy.

3/ EU : Ever more internally-geared, internally-directed (not directed towards the rest of the world) economy, less debt-driven, more politically organised

Those are "diverging" evolutions which are, for the time being, converging under a dollar-system umbrella.

This cannot continue forever.

Just like the hand is the tool of tool and can not be replaced by an Ersatz Hand, so the real economy cannot be replaced by an Ersatz Economy.

Part 8
Let us now summarize our results about soul, and repeat that the soul is in a way all existing things; for existing things are either sensible or thinkable, and knowledge is in a way what is knowable, and sensation is in a way what is sensible: in what way we must inquire.
Knowledge and sensation are divided to correspond with the realities, potential knowledge and sensation answering to potentialities, actual knowledge and sensation to actualities. Within the soul the faculties of knowledge and sensation are potentially these objects, the one what is knowable, the other what is sensible. They must be either the things themselves or their forms. The former alternative is of course impossible: it is not the stone which is present in the soul but its form.
It follows that the soul is analogous to the hand; for as the HAND IS A TOOL OF TOOLS, so the mind is the form of forms and sense the form of sensible things.
Since according to common agreement there is nothing outside and separate in existence from sensible spatial magnitudes, the objects of thought are in the sensible forms, viz. both the abstract objects and all the states and affections of sensible things. Hence (1) no one can learn or understand anything in the absence of sense, and (when the mind is actively aware of anything it is necessarily aware of it along with an image; for images are like sensuous contents except in that they contain no matter.
Imagination is different from assertion and denial; for what is true or false involves a synthesis of concepts. In what will the primary concepts differ from images? Must we not say that neither these nor even our other concepts are images, though they necessarily involve them?

The Invisible HandALARM: It's official!#1476299/21/06; 06:46:40



Here's why the Great Satan won't attack Iran



Shi'ite leader Muqtada al-Sadr's militia has grown into a formidable force - far too big for the US to engage directly. Indeed, it's more a question of Muqtada holding back his men. There's likely an Iranian hand in play: the occupation soldiers are virtual hostages against a US attack on Iran.
US troops must be supplied by convoys of trucks that go across hundreds of kilometers of roads through this Shi'ite heartland, and the Mehdi Army and its allies in the south could turn those supply routes into a "shooting gallery".

Patrick Lang,[former head of human-intelligence collection and Middle East intelligence at the Defense Intelligence Agency], noted that the supply trucks are driven by South Asian or Turkish civilians who would immediately quit.
Only Iran's ability to persuade Muqtada to hold off on his effort to end the occupation can prevent a violent confrontation between Shi'ite militants and the occupation forces. But Bush's advisers may still not understand how fundamentally the power equation in Iraq has shifted.

"They don't think like that," Patrick Lang said. "They think they are still in charge."
"And Iran is abusing the financial system." [US Treasury Secretary Henry Paulson] did not elaborate.

The Invisible HandGerman Confederation of Banks criticises Paulson's Iran policy#1476309/21/06; 07:20:10

Bankenverband übt harsche Kritik an Iran-Politik der USA

Die harte Haltung der USA gegenüber der Atompolitik des Iran hat in westlichen Ländern prominenten Widerstand hervorgerufen. Der Chef des Bundesverbands deutscher Banken, Commerzbank-Chef Klaus-Peter Müller, lehnt einen Vorstoß von US-Finanzminister Henry Paulson ab.
// Oil companies will have to be forced to join it
Oil companies are in no hurry to join the new exchange, although they do not dismiss such possibility altogether. Meanwhile, experts believe it is inevitable that the government will have to force the companies to join the exchange

GoldiloxSM Records within reach?#1476319/21/06; 07:43:42


No doubt about it, the market's strength in the past couple of weeks has been surprising, but then again, maybe not. There has been some good news for the market, such as the Fed holding pat on interest rates on Wednesday. But to me, the longer term picture is not so bright. Still, whenever Mr. Market gets this close to setting an All Time High, we need to take a sobering swig of the morning brew and consider whether it it - or isn't - more than illusionary.

If you would click over to the Federal Reserve Bank of Minneapolis inflation Calculator here, and put in the following numbers, I think you'll see my point. In the "In year" box put 2000 because that's when the market hit its weekly closing high of 11,723 by the Dow. The week of January 14, 2000 the Dow closed at 11,722.98, but for a lousy 2-100th's of a point, let's not quibble.

In the "I bought goods or services for $" box, enter the Dow all-time-high of 11723. Almost done: In the "then in year" box put 2006.

Press calculate and you should get 13,785.76.

Thus, your People's Economist claims that using the Fed's own numbers (which reflect how fast they are printing money beyond the actual growth in goods and services, thus watering down purchasing power so you need more paper "money" to keep even) the Dow would need to be that much higher just to break even.

Now for the detractors and "purists." Detractors of this almost to obvious point will claim that the calculation is not "fair" because it does not recognize (and maybe even compound) some of the dividends that companies pay. The detractors can sit on it and twirl for the following reasons: a) the calculation doesn't reflect companies that millions put their money in which tanked. Think Enron, Worldcom, and you know that list, although I hope not personally.

Then the detractors don't like to think about the impact of stock buybacks. These have some interesting effects (too diverse to run through completely) but let's just say that buybacks spend cash and while they theoretically increase shareholder equity, they're many times about executive bonuses which have done just fine in this period.

And with a note to the purists, who would claim that a further 2% to 3% can be added to the 13,785.76 target because of inflation in order to take into account the roughly half-year of inflation that's not shown in the Fed calculator's output, I'd have to agree. At the lower figure, we see 14,061.48 and at the higher, 14,199.33 would be the target.

Other Indices
Although its peak was not the same week, the NASDAQ in the "record Dow" week of 2000 was at 4,064 and the S&P (SPC) was at 1,465.

If we ignore the detractors and purists here, the NASDAQ Composite should be at 4,779.09 (ignoring the part year with unaccounted for inflation). That's just a week bit different than its close yesterday at 2,252.89. The NASDAQ Composite on a purchasing power basis has dropped 53% of its value since 2000. I know lots of folks who bet everything on high tech day trading, and will tell you that at its worst, purchasing power what half (or less) of even these sickly returns in their own portfolios.

The S&P is a little better off - but it's hardly a moonshot, either. The same calculations
show the S&P should be at 1,722.78. The close of the index yesterday (GSPC) was 1,325.18, or still down on a purchasing power equivalency basis 23.1% from its close on "High Dow" week in January of 2000.

-Goldilox (:^)

Being a little too busy to run the numbers, I was happy to see that George ran them for me.

The Invisible HandThe gods tell me I erred in today's msg#: 147626#1476329/21/06; 07:50:33

On August 15, 1971, the world entered the first era in its history in which no circulating paper anywhere was redeemable in Gold by anyone. On that date, U.S. President Richard Nixon "closed the Gold window"

Nixon did NEVER explicitly say that he severed the link of the currency with gold. He only repealed its redeemability.

Duisenberg did however say that the euro
is the first currency that has not only severed its link to gold, but also its link to the nation-state

May I burn in hell!

GoldiloxUSDX#1476339/21/06; 07:53:25

New waterfalls or head-fake?
GoldiloxGold and Dollar Market Summary#1476349/21/06; 08:14:45


Gold, Silver and the USDX today:

It is still in the dollar as the countdown to the midterm elections pulls out all spin stops in order to iron out the apparent economic and geopolitical wrinkles in the world.

The deadline for Iran has come and gone. Iraq and Afghanistan might as well not exist. A major hedge fund blows up but this is an aberration with no meaning other than bad trading judgment. Go figure!


It's a Mad, Mad, Mad, Mad World!

GoldiloxState sues car firms on climate#1476359/21/06; 09:21:00


State sues car firms on climate

About one-third of California's CO2 emissions come from traffic.
The state of California is suing six carmakers for costs associated with their cars' greenhouse gas emissions.

The suit names General Motors, Toyota, Ford, Honda, Chrysler and Nissan.

California is asking for "monetary compensation" for the damage which it says their emissions are doing to health, economy and environment.

The Alliance of Automobile Manufacturers (AAM), a pan-industry body, called it a "nuisance" suit and suggested it may be dismissed.

"Right now, global warming is harming California," runs the state's complaint.

"Human-induced global warming has, among other things, reduced California's snow pack (a vital source of fresh water), caused an earlier melting of the snow pack, raised sea levels along California's coastline, increased ozone pollution in urban areas, [and] increased the threat of wildfires."

State lawyers want any judgement for damages to be ongoing, so that manufacturers will be liable every year.

Guto Hari, the BBC's North American business correspondent, notes that California has taken an aggressive stance on global warming, passing legislation to significantly reduce carbon dioxide emissions by 2020.

'Time to answer'

The lawsuit, lodged on behalf of the Californian people by state attorney-general Bill Lockyer, alleges that emissions from cars made by the firms in question account for 30% of all carbon dioxide emissions in California.

It is time to hold these companies responsible for their contribution to this crisis -Bill Lockyer, state attorney-general

The complaint alleges that the firms' activities have harmed the state's environmental health, with California having to spend million of dollars responding to environmental threats such as coastal erosion.

Mr Lockyer said he had not put a figure of the level of damages he was seeking but that it was likely to run into "hundreds of millions of dollars".

"Global warming is causing significant harm to California's environment, economy, agriculture and public health," he added.

"The impacts are already costing millions of dollars and the price tag is increasing. It is time to hold these companies responsible for their contribution to this crisis."

'Most significant'

This is the latest in a series of legal and quasi-legal cases in the US aimed at forcing reductions in greenhouse gas emissions

An Inuit group is taking the federal government to the Inter-American Commission for Human Rights
Conservation groups are trying to force the government to protect coral and polar bears from the effects of global warming
There are ongoing attempts to force the Environmental Protection Agency to define CO2 as a pollutant and regulate emissions
Roda Verheyen of Climate Justice, an international organisation which co-ordinates legal climate cases, said California's suit took action to a new level.

"It is the most significant piece of climate change litigation that has ever been brought," she said.

Car manufacturers have their own case against California pending over laws requiring them to reduce emissions.

The AAM said in a statement: "Automakers will need time to review this legal complaint [by California], however, a similar nuisance suit that was brought by attorneys-general against utilities was dismissed by a federal court in New York."


Leave it to government to use litigation to increase popular division. No efforts to really address the issues - just "give us some money".

The Invisible HandThe Principle of Non-Contradiction (PNC)#1476369/21/06; 09:44:41

There are some primary or fundamental elements in human knowledge which serve as bases for all other truths.
Just as "being" is the first notion of our intelligence, implied in any consequent notion of our intelligence, so too
"there is a judgment which is naturally first, and which is presupposed by all other judgments".
This first judgment is as follows:
"it is impossible to be and not to be at the same time and IN THE SAME RESPECT"
(Alvira, Clavell and Melendo, "Metaphysics", Manila, Sinag-Tala Publishers, 1991, p. 33)

Up to the moment that the gods contacted me today to draw my attention to the fact
that Duisenberg had said that the euro is the first currency that has not only severed its link to gold, but also its link to the nation-state,
I thought that the euro was linked to gold.

Hence this lunatic concluded three years ago;
The ECB will not define the euro like the old gold standard as a certain quantity of gold, but will use it as a free trading financial reserve so that each increase in the price of gold will bring about an increase in the value of the euros reserves and thus an increase in the value of the euro itself. This currency concept is closer to the tenets of libertarianism than a gold standard because of the exchange restrictions which inevitably follow

This is not the gold standard, right. But is this not linked to gold?

Enters the Duisenberg statement, the euro is the first currency that has not only severed its link to gold.

Aristotle rightly saw that one of the conditions for the application of the PNC is that the "to be and not to be" apply to the thing IN THE SAME RESPECT

I continue to maintain that the euro is linked to gold. Right, it is not linked to gold IN THE SAME RESPECT as the dollar was linked to gold before the creation of the Fed.

Nuance, said you?

My msg#: 147596 was thus wrong.

The Invisible Hand (9/20/06; 01:43:48MT - msg#: 147596)
Currently the IMF follows rules originally drafted in 1977 after the 1973 collapse of the international gold standard and fixed-exchange-rate system
IMF rules don't expressly bar a country from pursuing any exchange system - except one that's linked to gold


Or do the IMF rules allow an exchange system linked to oil?

And is the petro-euro an attempt to let the gold-euro enter through the back-door?

GoldiloxUSDX#1476379/21/06; 10:35:56

Waterfall confirmation?
The Invisible HandPNC#1476389/21/06; 10:41:05

Was it not Duisenberg who violated the PNC?

The value of the euro is linked to that of gold.

The link has not been severed. Quite to the contrary, as the conclusion of this lunatic's paper suggests, the link has been strenghtened.

What happens to the IMF prohibition? (Allow me also to thank (better late than never) a banker for her/his IMF references.)

Did Duisenberg violate the PNC in order to "avoid"/"evade" the IMF prohibition?

Knallgoldeuro#1476399/21/06; 10:50:36

The euro is not linked to a fixed Gold price.

The euro though is linked to the FreeGold concept.

FlatlinerWhat is a gold-euro?#1476409/21/06; 12:09:26

The Invisible Hand, Hidden in the many words of your postings today is a glimpse that you, like many here, are also a student in the self directed school of economic thought shared in this great forum. I find it very interesting that those who post here contribute to building a huge mural from a collection of millions of small colored dots. Each posting is yet a color in the larger picture and that picture can only be seen by those that stand a million miles away.

My understanding of the Euro is that it is measured against gold – rather then redeemed for gold. Gold is a currency. Gold is what was selected as the reserve currency for the Euro that can be, and will be, used to defend it (or as we'll see, to manage it). If you think back to when it was created, the populous laughed at the Euro because gold held no value. I mean, really think about it, the banks put a currency on reserve that basically held no value thus it would be impossible to defend anything with it! Even today, the value of the gold reserves barely eclipsed the US Dollar reserves (at the end of last year, or starting of this year).

We need to also think about why the Euro might need to be defended. Defense happens with confidence is lost and no one wants to hold the currency. We all know that at that point, people exchange the fiat for anything real or something that is perceived as real. To the creators of the Euro, they knew that if the fiat functioned for trade – in a balanced way, they would not have to worry about having to defend the currency from imbalances. This is what the US is facing on a daily basis. Those that gather hoards through imbalances use those imbalances to gain advantages in the system. Over the years, we have seen how hard the central banker's value balanced trade in the Euro-zone.

What if demand for the Euro grows? We have seen clear threats around the world from oil based countries that they will trade oil for Euros. At the same time, we have seen those in control of the Euro stand up and say there are not enough Euros to go around.

One might imagine that if Oil started trading in Euros, we would all find that the value of the Euro would jump significantly due to demand for that fiat commodity. This would imply that a Euro would buy much more oil AND anything else around the world (for those holding these Euros). If a Euro buys more, it would stand that it would by more gold, thus the price of gold, valued in Euros would drop. Effectively, oil would make the Euro strong like it makes the US dollar strong.

Is this a bad thing? Well, if trade is balanced in the Euro-zone, then what we see is that all boats rise with the tide. In other words, All those living with the Euro today will not notice much of a difference when they go by a loaf of local bread, but they will when they go fill the gas tank with imported fuel. As fiat starts to flow offshore, it will come home to find redemption in some way. Knowing that Oil has an affinity for gold, the bankers know that it will come back to buy gold. So be it.

At this point, there is a run on gold as it's priced against the Euro. Because the Euro is so strong, it comes back to buy lots of gold. This drives the price of gold up relative to the Euro. Thus, the gold reserve value that it Marked To Market goes up AND the currency exchange against gold drops!

To reiterate, if a currency is measured against gold, as in this case, we'll find that oil backing of the Euro will strengthen the currency (demand for Euro). This creates a currency that is strong against all others. But then, as oil gathers reserves, some portion will be redeemed for gold. Thus the exchange rate for Euro/gold reflects this demand driving the price of gold up and the exchange value of the Euro down.

When you think about this, if a currency is measured against gold, a rising gold price means a weaker currency. A weaker currency means that exports from the Euro-zone are still functional around the world. Thus, the threat of having a currency that is too strong (to function) will not happen if demand is channeled into gold.

As redemption demand is channeled into gold, the currency held on reserve in the banks now takes on a functional roll rather then a symbolic (defensive) one. Not only has the value of the gold reserves gone up, but because the fiat is measured against gold, the bank has the tools needed to take shocks out of its fiat currency. Now, the central bank can play with the gold supply in the economy. If the supply thins threatening loss of value to oil that redeems (some) for gold, the bank can supply that metal with confidence through the open market. If the demand for gold drops in the economy, the central bank can by it back itself adding to its reserves.

The end result is that the gold on reserve will be used to help maintain stable – predictable – exchange rates for that fiat currency. The stable exchange rate is good for business and adds strength to the economies that use the stable currency. Business decisions that take many years to unfold will be made with confidence, because of the function of gold.

Does this mean that the price of gold will be fixed? No. It will trade on the open market at prices for all to see. It will go up and down based on trade imbalances and central bank liquidity.

If you take close note, you will see that this gold function is something that every economy can do that creates it's on fiat currency. If South America also Marks it's gold reserves To Market, it may too find backing from oil – due to the availability of convertibility in the open market of that country.

Now, when you look at the process of managing fiat currencies, it's no longer political between countries as with the conflict between China and the US. Also, if a country wants to inflate the currency supply for social activities, the people of that country will suffer the ravages of inflation and the exoduses out of the currency from foreigners will be seen through an exploding gold exchange in that country. This mismanagement will be reflected in loss of business. Over time, the quality of living for the people in the country will drop. But, the cycle will be reborn as they work to export products to the stronger countries in an effort to regain their quality of life.

Even though the Euro is not redeemable for a fixed amount of gold through the central bank, the purpose of gold in the system is clear and hugely valuable. Confidence is found in the Euro (today) through its standard function in the economy. If oil turns to the Euro, we will all see how the central banks value gold. All central banks are preparing for this all around the world. Oil stands ready. The banks stand ready.

Do you?

FlatlinerIs it real?#1476419/21/06; 12:31:24

SLV now claims to hold in trust 104,323,655 ounces of metal (up about 1,000,000).
GLD claims to hold 388.85 tonnes in trust down a couple from yesterday and a hand full from Monday.

(See posting form yesterday for sideline details about trusts.)

DruidWall Street's biggest losers#1476429/21/06; 14:29:28


By making $5 billion vanish, hedge-fund trader Brian Hunter has joined an elite group of investors who have made some extraordinarily bad bets.

By MSN Money staff and wire reports
If there were a Bad Trade Hall of Fame, Brian Hunter would have just secured himself a prominent spot.

Losing $5 billion in a week will do that.

Hunter lost that amount earlier this month, according to The Wall Street Journal, making big, risky bets on natural gas prices for coming winters. Amaranth Advisors, a Connecticut hedge fund that employs Hunter, has informed investors that its assets under management fell from $9 billion to $4.5 billion since the start of September, according to the Journal.

It's hard to feel too sorry for Hunter, who works out of his hometown of Calgary, Alberta. He still has his job with Amaranth, according to reports, and his winning trades last year helped him reap total compensation of more than $75 million.

But Hunter's name, like Nicholas Leeson's, will now be mentioned every time another huge bet goes sour in the global financial markets. Here's a quick look at some of the most infamous losing trades in the financial markets.

Brian Hunter, Amaranth Advisors
To say Hunter, 32, has had an up-and-down year doesn't quite do justice to his 2006. According to the Journal, his account was up by $2 billion at the end of April. Then he lost $1 billion in May, made that amount back over the summer and finally took his $5 billion bloodbath last week. What's behind the huge swings? Gyrating prices -- natural gas was above $15 per British thermal unit last December but just at $5 now -- and huge multi-billion-dollar positions, according to the Journal.


Druid: Kind of a cute article if you're not up to speed about the action behind the curtain. Notice the gurus from Long Term Capital didn't make the list. I wonder why?? The average "investor" doesn't stand a snowball's chance in hell, but then maybe, that's the point.

geWhat is next?#1476439/21/06; 17:04:55

The greatest sea and air armada Europe has ever assembled at any point on earth since World War II, the Italian-based American Sixth Fleet, Israeli ships and submarines and a NATO fleet of various nations are gathering around Lebanon shores.

8 German warships set sail for Lebanon

MKO wily wizard of the Table Round#1476449/21/06; 17:51:55

Sent an e-mail. Hope you got it.

Is that the sound of trumpets I hear faintly from the other end of the castle?

spikedogTrumpets#1476459/21/06; 18:07:53

If trumpets be heard on the far end of the castle, can a golden change in the wind be far behind?
USAGOLD Daily Market ReportPage Update!#1476469/21/06; 18:17:44">
The Daily Gold Market Report has been updated.

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

THURSDAY Market Excerpts

Gold steadies, climbs higher as hedge fund sours

September 21 (from Reuters) -- Gold steadied on Thursday after falling overnight as dollar weakness and a rise in oil prices encouraged investors and bargain hunters to buy on price dips.

The dollar slipped broadly as investors priced in steady U.S. interest rates for the rest of 2006 and possible lower rates next year, a day after the Federal Reserve kept rates unchanged.

Dealers noted physical demand from jewelers but huge trading losses at hedge fund Amaranth Advisors raised fears of more fund selling in the commodities markets.

Amaranth Advisors LLC, a Connecticut-based hedge fund that lost billions of dollars in natural gas trades in recent weeks, on Wednesday took steps to disband, forging agreements to sell its energy assets and holding talks to sell other parts of the business, people familiar with the situation said.

"Sentiment has been affected by Amaranth. People are afraid of a spillover effect," said a metals dealer in Singapore.

"We have been seeing very strong physical demand both from our own clients and also from the professional market as well and that's ... supportive for gold," said John Reade, precious metals analyst at UBS Investment Bank.

"I am not ruling out a re-test of the recent lows but I am beginning to think that we may have seen the worst of this. A lot would depend on what happens to the dollar."

COMEX December gold futures rose $2.10 to finish at $588.30.

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

GoldiloxGreatest Armada?#1476479/21/06; 18:58:08

@ ge,

Not to suggest that assembling two carrier groups is meaningless, but it's interesting that Debka calls two carrier groups the "greatest armada assembled since WWII," when 7 of 12 US carrier groups were in the Asian waters during the pre- and post-tsunami period.

Kinda like the sports announcers who love to call the current days' players the greatest at every game they call.

MKGoldilox#1476499/21/06; 19:04:13

Ten BearsInteresting sites: #1476509/21/06; 19:09:23

much about monetary history, gold, reform, Federal Reserve.!

GoldiloxInflation - LOL#1476519/21/06; 19:54:50

But Sir MK,

"There is no inflation, there is no inflation."

Dang. There's an echo in here!

Thanks for the laugh. . .

Are those trumpets I hear approaching yonder castle?

Drum and bugle corps . . . or ?

Chris PowellDubai's AMEInfo: Buy gold to hold, not to trade#1476529/21/06; 20:21:45

From AMEInfo, Dubai
Thursday, September 21, 2006

Dr. Marc Faber this week told Bloomberg he is a buyer of gold at and below $580 an ounce. But traders in gold have recently suffered a mauling because central banks are manipulating the market.

The Federal Reserve wants to contain inflation to engineer an interest rate cut before the November US elections. It is as plain as the nose on your face that gold market interventions of the past couple of weeks have been organized to bleed gold traders dry.

One thing that gold traders could do to help themselves is to stop publishing their latest market "insight" on Websites. The demons of the gold cartel are clearly reading everything that they write and making absolutely sure that it goes wrong.

Indeed, a section of the gold-bug community has identified the existence of a cartel or cartel-like organization within the central banking system that conspires to keep gold prices down when economic forces would suggest they should go up. This is one way of trying to control inflation, albeit it not a very good one, as curing the symptoms never cures a sickness.

However, there is no point in trying to fight such a powerful cartel. It is a futile exercise, and traders will be quickly wiped out if they insist on trying. Those who do this on margin are doubly foolish, as the irrepressible volatility of precious metals is going to catch them out sooner or later.

For to succeed in this kind of market you need to recognize the reality of a fixed gold market and buy and hold until this whole artificial construction comes tumbling down. Then gold and silver prices will soar and the holders will make a huge profit.

So buy a little gold for your portfolio, or quite a lot if you have the cash available. For gold will protect your finances against inflation, deflation, devaluation, stock market crashes, and almost any other negative economic scenario.

It always pays to be ready for a rainy day. Are we not now hearing many siren voices warning of a US housing downturn and a coming US recession, which will surely be accompanied by further devaluation of an already weak US dollar and a downturn in US financial markets?

What is the safe haven asset that will perform in such a noxious investment environment? Precious metals are pretty much immune from everything, except the central banks in the short term. So take Faber's advice and do what he is doing himself and buy gold at these price levels while you can.

Lest we forget, Faber, an AME Info columnist and celebrated contrarian, wrote the book "Tomorrow's Gold," predicting this scenario four years ago, and he has been consistently right on gold since then.

GoldiloxAME Article#1476539/21/06; 21:02:54

@ Chris Powell,

If I read the author correctly, he/she has totally given up on market infotmation and prefers to hoard PMs in an information vaccuum. Putting a stop to analysis and publication plays directly into the hands of those who would have us all be their 21st century serfs.

While I do not completely disagree with the conclusions about TPTB fighting the trend, I fully believe that continued investigation and analysis is absolutely necessary.

The warning about "trading the perceived trend" is valuable, but no one should stop publishing their analyses - they should just remember who they're up against.

I would hope that GATA will not stop publishing their findings.

mikalWhy "China's reserves" means little in all the media airplay#1476549/21/06; 23:02:02

Been out of town most of the day.
Nagging me for an answer that's short and satisfying,
"What is the talk of "China's reserves" missing from the commercial media, and the utterances of politicians and global corporate PR?"
IMO, hidden, unstated but implicit in their mention
of "China's reserves", which we know are distractingly
growing in $ terms, is also the reserves, official(aka public) and private (i.e. belonging to the "public") of the whole developing world:

India, by far the largest consumer of the planet's gold. Taiwan, Korea, Vietnam, Phillipines, Singapore, Malaysia, Indonesia, Thailand, Burma, Nepal, Persia, N. Africa, Africa, Middle East, Russia, East Europe Americas
and more- added to growing investmment and industrial demamd from the "rich, developed" countries.

Many including myself, believe central bank sales under
the Wash. Agreement(and some before) are private, presolicited, and presold. Don't hit the open market.
Reserved for other banks.
Even some developed countries banks-
it is well known that recently Chinese, Korean, Russian and Japanese officials spoke briefly(before being censured) on "diversification" into gold and out of the dollar.
These are IMO steath accumulators, as are some
developing nations such as India(for all their central banks besides the open import for private purchase by the public), Malaysia, Thailand, Taiwan, Phillipines,
Singapore, Indonesia, Nepal, Burma, Sri Lanka, UAE,
Saudi Arabia, Iran, Libya, Yemen, Bahrain, Nigeria, S. Africa, Quatar, Egypt, Jordan, Lebanon, Syria, Turkey, Argentina, Brazil, Venezuela, Columbia, Uruguay, Peru, Chile, former Soviet states and others.

The Invisible HandFreegold versus absurd IMF virtual SDR-situation#1476559/21/06; 23:21:44



Every shyster knows that when she wants to know what a particular statute/act/law says, she should start not with reading that statute/act/law, but with reading ABOUT that statute/act/law.

In a sinister way, this shyster learnt that the IMF is based upon Special Drawing Rights (SDRs)

Thar he goes.
Special Drawing Rights (SDRs) is a potential claim on the freely usable currencies of International Monetary Fund members.
It is neither a currency, nor a claim on the IMF.
SDRs are defined in terms of a basket of major currencies used in international trade and finance.
At present, the currencies in the basket are the euro, the pound sterling, the Japanese yen and the United States dollar.
The amounts of each currency making up one SDR are chosen in accordance with the relative importance of the currency in international trade and finance.
The determination of the currencies in the SDR basket and their amounts is made by the IMF Executive Board every five years.

This seems to indicate that SDRs constitute the reserve of the inexistant IMF-currency.

"a banker" indicated in msg#: 147627 that Article IV, Section 2, of the IMF Articles of Agreement says that exchange arrangements may include inter alia (under (b) (ii)) cooperative arrangements by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members.

Freegold is the opposite of this absurd (virtual) situation.

The IMF wants its members to use/take the SDRs as reserve.

We, the People in the know of the fact
that the dollar-International Financial and Monetary System (IFMS) cannot be expected to start making the CONCEPT OF GOLD-WEALTH-RESERVE public,
want Freegold as reserve.

In this situation, the IMF has no more role (to fulfil) except that of bailing out the US of A.

In this situation, Freegold in the European System of Central Banks (ESCB) has the same role to fulfil as the Mona Lisa in the Louvre.
A wealth reserve in the strong room (the Louvre) of a Monetary Union with a currency, the euro.
The French Republic has property rights over the Mona Lisa and the EMU has property rights over the gold of the ESCB.

Every individual, not the EMU, is now free to copy the concept of Freegold
(Freely priced gold – as Knallgold rightly observed, no longer "fixedly" priced gold)
as wealth reserve (no backing or redeemability).

Just like anybody can come to Euroland and determine for herself what is the nature of the Euroland economy and can then appreciate and/or copy it. (1)

It is FREEDOM and TRUTH which will determine the possible future decision of the EU/EMU to break with the dollar-IMFS and to join the FREEGOLD-EURO-CONCEPT.

The EMU/EU will NEVER force oil/gas owners to accept the euro as the concept materialising their wealth.

Euroland is a UNION which is in the process of being set up and is developing around its EMU system. (2)

The dollar-reserves in Euroland are certainly as big as those of China and Japan. Apart from these dollar-reserves, there is the Freegold Wealth Reserve (FWR) whose visibility does not escape China and Japan. China and Japan know the EU has the FWR.

If China and Japan want also to have a FREELY-PRICED Mona Lisa in the central bank building, their currency will do so by aligning themselves AUTOMATICALLY with the gold euro instead of with the non-gold-dollar.

In that way, an end will come to the competitive devaluation of all currencies in order to compete for export which will be paid for in dollar.

Instead of warning about the economic disaster that prophets of doom see unfolding, the IMF has predicted an unprecedented fifth year of rapid growth in the world economy
I would add another even more important explanation for the present golden age — the willingness of CENTRAL BANKS and governments in every region of the world APART FROM THE EURO AREA to use proactive monetary demand management to keep economic growth as close as possible to its trend rate

At that moment, every "nation" (3) can develop its own economy INTERNALLY, in harmony with the euro (4) and independently of/from the dollar hegemony

In harmony with the euro to the extent that they want it. Cross-border trade in equivalent (aligned) currencies.

This totally Another concept than the dollar regime that derives its power from DOMINATIONS (5).

I continue to argue that Iran holds both keys to Freegold by the two acronyms SCO and IOB.
Iran was invited to become a full member of the Shanghai Cooperation Organization (SCO). So far no concrete timetable for Iran's accession to the SCO has bee set. This enlargement of the Shanghai Cooperation Organization, which also includes observer status for India, Pakistan and Mongolia counters US military and strategic objectives in the broader region.
(Dr. Edward W. Miller , Nuclear Jazz at The United Nations, September 21, 2006,
Iran is planning to open a commodity exchange, referred as 'Iran Petroleum Exchange', 'International Oil Bourse' or 'Iranian Oil Bourse'. A Petrobourse for Petroleum, petrochemicals and gas in various non-dollar currencies, primarily the Euro. If successful, this would establish a euro-based pricing mechanism for oil trading, or oil marker as it is called by traders.
The acronym 'IOB' has been used as it can be interpreted as either "International Oil Bourse" or "Iranian Oil Bourse", but it has no official status.
The Iranian oil bourse, first reported in 2005, was to have a planned opening date of March 20, 2006 [2], which is the Iranian New Year, Nauroz. According to an April 2005 report, the Tehran Stock Exchange (TSE), the Wimpole Consortium and a private staff fund for retired petroleum workers will together to form the consortium developing the exchange [3].
In January 2006, Chris Cook of the Wimpole Consortium referred to delays in the process due to the election to the presidency of Mahmoud Ahmadinejad and subsequent difficulty in appointing a new oil minister acceptable both to the president and parliament [4].
In March 2006, the Petroleum Minister of Iran, Kazem Vaziri Hamaneh, announced that due to "technical glitches", the Bourse launch was postponed, with no new date set. [5]. However, as of April 26 Iran had restarted its move to open the oil market, and Kazem announced the bourse was set to open the first week of May [6].
In May 2006, Minister of Economic Affairs and Finance Davud Danesh-Jafari said the Oil Ministry has a two-month deadline for presenting the Articles of Association of the Iranian Oil Bourse. Danesh-Jafari said that the Euro had not yet been finalized as the legal tender of transactions in the oil bourse, and the final decision about that depends upon the Oil Ministry's proposed IOB Articles of Association [7]
During the first phase of its implementation, the Iranian Oil Bourse plans to offer financial derivatives relating to crude oil.
In July 2006, a building has been purchased and the projected opening date is September 2006. [8]


The Iranian Oil Bourse will trade oil in euro.
The petro-euro, linked to the value of oil, not of the euro, will then be legal tender in Iran, Venezuela, Indonesia and Malaysia.

Once Iran will be a full member of the SCO, Freegold will be a fact.

Enter Hugo Chávez!


As I said in previous posts

The gold-euro concepts are again being confused. A euro which is evolving in concert with a gold-reserve which has WEALTH-status and thus NO monetary (public, symbolic, only for the protocol) status. Freegold like a Free-Mona-Lisa or another wealth (consolidation) object. The Mona Lisa was not the backing of the French franc.
It would never enter the mind he owner of the Mona Lisa daily to organise a "test-action" to establish what today's value of his wealth is. The ECB is doing this on the final day of every quarter. With Freegold this will be done continuously … freely and on a global basis.

FREEGOLD has nothing to do with money. It's for the gold auctions to determine the content of the gold wealth.
The Gold Euro is a currency with a gold wealth reserve (Freegold) in its central bank (the ECB).
The Mona Lisa was not the backing of the Franc
The gold-euro concepts are again being confused. A euro which is evolving in concert with a gold-reserve which has WEALTH-status and thus NO monetary (public'symbolic, only for the protocol) status. The euro has stored its wealth in Freegold....whilst the dollar is being hedged with papergold prices.
Freegold like a Free-Mona-Lisa or another wealth (consolidation) object. The Mona Lisa was (is) not the backing (nor the hedge) of (for) the Franc (France).
The euro numeraire has the golden Mona Lisa in its strong-room. We will have to wait until later before we know what will be the intrinsic reserve value of this asset.

As Lasok and Bridge put it almost 35 years ago:
Ubi societas, ibi ius – To understand the nature of the law one must understand the nature of the society from which it emanates and which it purports to govern.
(Lasok and Bridge, "Law and Institutions of the European Communities", Butterworths, Preface to the first edition, 1972)

"nation" comes from the past participle "natus" of the Latin verb "nasci" "to be born" and presupposes thus ONE LANGUAGE – how many so-called nations can claim that?

In that way, the EU concept of bureaucratically directed harmonisation can be replaced by the real harmonisation all over the world.
See for example my unpublished LL.M. dissertation "A Critique of the Role of Harmonisation of European Company Law" at Exeter University, 20 years ago.

Law students among my readers could perhaps reread the comparative study which the late Belgian European Court of Justice judge Joliet devoted more than 30 years ago to the distinction between abuse of dominant position in EU law and monopolisation in the US of A Sherman Act.

GoldiloxBanks see bullion biz doubling in Gujarat#1476569/21/06; 23:32:12


AHMEDABAD: Bullion banking is regaining its glitter in Gujarat all over again. Huge investment demand coupled with renewed buying interest from jewellers have increased bullion sales of the banks by over 100 per cent in just last one month.

According to banking sources, the bullion business is gaining momentum with easing gold prices in international and domestic markets. Leading bullion banks like ICICI Bank, UTI Bank, Bank of India and the public sector trading agency MMTC are registering a growth in their sales volumes.

Sources said that average monthly sales of gold has increased from 2,000 kg to 5,000 kg in just one month in Gujarat. "Our monthly sales of gold has increased from 500 kg a month to 1,000 kg in last one month," AR Kuppuswamy, zonal manager, Bank of India, told TOI.

According to Kuppuswamy, the sudden surge in bullion demand can be attributed to declining gold prices that has accelerated investment demand. Besides, renewed buying interest of jewellers in Ahmedabad, Rajkot, other parts of state have also given fillip to bullion demand.

In the last one month, gold prices have dropped by 7 per cent. From August 20, gold price per 10 gms has come down from Rs 9,429 to Rs 8,754. People are parking their funds in gold as the investment in the precious metal is considered a hedge against inflation. Gold prices have shown some correction in the prices just because crude prices are coming down, a leading bullion analyst said.

Other banks that have witnessed surge in their bullion sales are UTI Bank and ICICI Bank. Bullion sales of UTI Bank has gone up from 800 kg to 2,000 kg in last one month.

It is not that wholesale demand for the yellow metal has increased but investment demand from the retail segment has also northward movement. "Our retail sales of gold are expected to rise from 30 kg to 100 kg," Venkat,retail head, ICICI Bank said.


Supply down, demand up. Not exactly rocket science.

Gold, unlike many dot com stocks, has NEVER gone to zero.

968Central Bank to increase gold metal reserves #1476579/22/06; 05:13:05

RBC, 21.09.2006, Moscow 18:45:08.The Bank of Russia intends to increase the volume of gold metals in Russia's gold and foreign currency reserves, the Bank's First Deputy Chairman Alexei Ulyukayev told the State Duma budget committee today. The share of gold in the country's gold and foreign currency reserves is 3 percent at present. If the volume of gold metals increases, still its share will not raise, he noted.

The prices of gold and other precious metals have been rising lately but the market is correcting at present, Ulyukayev stressed. The gold price is now $550 per ounce, which is $80-90 lower than the record price. The metal prices are highly volatile at the moment, but the Central Bank has not imposed any limits on gold acquisition, he said.

Russia's gold reserves exceed 380 tonnes.

CometoseGold bullion and shares#1476589/22/06; 06:41:48

These are pretty good prices ........

This buying opportunity isn't over .......imho.

I believe the "banker buyer's gone wild" scenario outlined by poster at ge

I think we might get another hit next week ....

consolidation .........

then (if you like poker like I do ):


or if you are an eagle watcher :


There's a very interesting article that may offer insights into the future based on recent but obscure (distant/Japanese) parallels in the past ;

it would seem the dollar (the big apple reserve currency) is going to be sacrificed (applesauce) for the global good.

GoldiloxThai king backs coup leadership#1476599/22/06; 07:50:53


The leaders of Thailand's military coup have been given formal royal approval, in a special televised ceremony.
An army officer read out a royal decree of assent, before coup leader General Sonthi Boonyaratglin knelt before a portrait of the king.

The footage confirms the coup leaders' claims two days ago that the king had endorsed their new military regime.

In Bangkok, dozens of pro-democracy activists held the first protest rally since Tuesday's coup.

The gathering, outside an upmarket shopping centre, was illegal under martial law but ended without incident.

Human rights concerns

The new leadership is consolidating its grip on power, banning all political meetings and assuming legislative duties in the absence of a parliament.

It is also blocking broadcasts it deems harmful, and has threatened to shut down media that violate the new restrictions.

This coup is abusing the rights of the people. We want democracy back
Patchanee Kamnek, anti-coup protester

Amnesty International has expressed concern, and called on Thailand's new leaders to safeguard human rights.

"No one should be penalised for their peaceful exercise of the rights of freedom of expression, association or assembly," the pressure group told the French news agency AFP.

The military has also continued to crack down on those close to the ousted prime minister Thaksin Shinawatra.

Several pro-Thaksin police officers have been removed from their posts, and at least three ministers of the deposed government are in custody. More detentions are expected in the coming days.

But the anti-coup demonstrators in Bangkok were able to protest without being arrested on Friday afternoon, despite the ban on gatherings of more than five people.

"This coup is abusing the rights of the people," said one of the protesters, Patchanee Kamnek. "We want democracy back - and we've come here to make a stand."

In a statement from London, where he is currently staying, Mr Thaksin appears to have accepted there is no going back to power, telling reporters that he planned a "deserved rest".

But he still faces many hurdles, one of which is a probe into his sometimes controversial business dealings. The coup leaders have already formed a panel to investigate allegations of corruption against Mr Thaksin and his close aides.

Possible PM candidates

Under sharp criticism from the international community for launching the coup, the new ruling council is under pressure to move fast to appoint a civilian interim prime minister.

Gen Sonthi has said he will resign from power in two weeks, and hand over to an interim premier until new elections are held in October 2007.

Among those being considered for the post are Supachai Panitchpakdi, chairman of the UN Conference on Trade and Development, and Pridiyathorn Devakula, the head of the central bank.


Nice to know "the King" backs the coup (under who knows what duress, perhaps), but one of the "candidates" for interim PM is "the head of the central bank." I guess that lets us know who also supports it.

GoldiloxUS 'threatened to bomb' Pakistan#1476609/22/06; 08:01:05


The US threatened to bomb Pakistan "back to the stone age" unless it joined the fight against al-Qaeda, President Pervez Musharraf has said.
General Musharraf said the warning was delivered by former Deputy Secretary of State Richard Armitage to Pakistan's intelligence director.

"I think it was a very rude remark," Gen Musharraf told CBS television.

Pakistan agreed to side with the US, but Gen Musharraf said it did so based on his country's national interest.

"One has to think and take actions in the interest of the nation, and that's what I did," he said.

'Ludicrous' requests

The extracts from the CBS show 60 Minutes, which will run on Sunday, were released on the same day that the White House praised Pakistan for its co-operation in America's "war on terror".

Gen Musharraf is due to meet US President George W Bush at the White House on Friday.

The BBC's Jonathan Beale in Washington says that Gen Musharraf was deliberately distancing himself from the White House in the face of intense pressure within Pakistan over his close ties to Washington.


Interesting comments from a leader whose "Security Service" has been accused playing both sides against the middle. Is the "coalition of the willing" losing losing its solidarity, or is this just your average political fork-tonguedness?

GoldiloxUSDX#1476619/22/06; 08:03:59

First breakdown thru 95 in a while.

PoG reactions seem well "in hand" so far.

Clink!Man Plummets 50 Feet to Grab Missing $20#1476629/22/06; 08:21:55

Sadly, he wasn't going after a MS65 St. Gaudens but a measly FRN.

Snip :- "I got my money back, hell yeah," Giorgio told the Sarasota Herald-Tribune. "Twenty bucks is a lot of money when you're broke."

C! I would say that $20 is not a lot when you're brokeN, but that would be laboring the point .....

GoldiloxHead Fake at Comix#1476639/22/06; 08:25:39

The shortsters waited until SM open to pounce this morning.
The Invisible HandRussia characterised as adversarial regime of the US of A#1476659/22/06; 09:54:09


Russia sets the pace in energy race
Speaking at a conference under the rubric "Summit on Energy Security" at West Lafayette, Indiana, this month, the powerful chairman of the US Senate Foreign Relations Committee, Richard Lugar, characterized Venezuela, Iran and Russia as "adversarial regimes" that were using energy supplies as "leverage" in foreign policy.
Paradoxically, from the EU's point of view, in this dismal scenario of even greater dependence on Russian energy supplies in the decade ahead, the only realistic solution lies in the Iranian vector of the European energy policy. Clearly, by 2015-20, the EU will face very serious gas shortages, even if Russia continues its gas supplies and even augments the supply level. Iran, thus, becomes a special case for Europe's gas security. (One can't lay a gas pipeline from Qatar to Europe except through the unstable territories of Iraq and Saudi Arabia.)
As for Iran, its first preference has been, and will always remain, to sell its gas to Europe.
And this is undoubtedly a critical factor of divergence in the respective approaches of Russia, the EU and the US toward the Iran nuclear issue.


Can you spell "World War THREE"?
Perhaps the pope can help?

The Invisible HandThe Chinese mean business.#1476669/22/06; 10:04:34

Look at Paulson's picture.
No comment!

The Invisible HandAsia Times article URL#1476679/22/06; 10:10:22

final l was missing
USAGOLD Daily Market ReportPage Update!#1476709/22/06; 17:58:03">
The Daily Gold Market Report has been updated.

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

FRIDAY Market Excerpts

Gold closes higher, gains 2% on week

September 22 (from DowJones) -- Comex gold futures popped to a one-week high Friday at the New York Mercantile Exchange but eased slightly from that level by the close as it continues to draw direction from the U.S. dollar and fluctuating oil prices.

At settlement, the benchmark December gold contract was up $7.10 at $595.40.

During the session the contract traded to weekly high of $598 an ounce but faced strong resistance up to the psychologically important $600 level. Traders said lots of business remains above $600 an ounce and once hit, gold is likely to take off higher.

Earlier in the day, another analyst said that an easing of worries over expected liquidation stemming from the beleaguered hedge fund Amaranth is also adding to the upside in gold.

The move of the energy portfolio from Amaranth to JP Morgan and Citadel Investment Group may have softened the blow of what many market players thought would be a massive liquidation in the energy market that could have stretched into the metals arena, said George Gero of RBC Capital Markets Global Futures.

"The liquidation is not likely to come so traders are covering shorts in (Comex) gold," says Gero.

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

Ten BearsGrandfather Economic Report #1476729/22/06; 18:09:02

by Michael Hodges

A comprehensive overview of many economic problems in/for USA:

GOLD FINGERT.G.I.F#1476739/22/06; 18:18:57

Perfect day....?

It's inevitable that the market will drop. It is over extended along with the over confidence of various investors. Even google took a hit!

If you look at this last week we had a 5 billion crash in over extended petroleum futures.

Now, I do not call this you? It points to a growing trend. If it's not right today it will be around the corner. Give it time. I am sure that 5 billion dollars will have a few discouraged....don't you?

Happy evening...


arbyhUSA walking the tight-rope#1476749/22/06; 18:44:12

USA walking the tight-rope, high in the air, poised for a fall?

I would expect that China will quietly secure the deal for oil with both Chavez and Iran. Cuba too for whatever interests are common... others to follow. China is coming off as not nearly so condescending to the emerging countries with resources, as the USA is. We criticize from official channels on high as if we have some God given right to. That doesn't play well in how to win friends and influence people.

I would expect China to smile, and hint to Paulson in a humble indirect oriental manner for the USA to cooperate quietly and not openly criticize or push China in any way, otherwise it could be of China's consideration to choose not to buy US treasury bonds, and turn dollar reserves into Euros or gold. Unspoken outcome: The US Empire falls on its face. It is bad when the fate of the USA is in the hands of suto-friendly foreign nations.

Some would argue that China wouldn't dare mess with the great deal of selling the USA goods. (China has 10 and 20 year collective plans for as long as anyone can remember. They built the great only took them 800 years.) I say markets change. One economic indicator of what I'm saying is that our multinational auto makers (GM and Ford) are moving, not just production, out of the USA, but also focusing MUCH more on world markets. India, China, Russia, Brazil, and others will be the next giant consumer markets and when that happens... well lets just say that Chavez was applauded for his comments on the floor, while Bush was tolerated with respect when he spoke. When the tide turns, we will get kicked hard, and the world opinion will likely be: "Good, foolish Americans, serves them right. That's what you get." That is what I heard was said (from the cheap seats) in the last Bilderberg meeting when the US housing bubble was brought up.

I'm sure that my mind isn't the only one seeing this unfold. I'm not saying that I like any of this, it's just that this is how the cards will be played, as I see it. I'll suffer along with the rest of us Americans.

Maybe, Gold and silver, in my pocket, will help....although they are both demonetized, and all the powers that be want them that way. I don't believe the USA has enough gold to save itself, from itself anyway, but what the hell do I know.

R PowellGold Finger#1476759/22/06; 19:01:51

Your words here....

"If you look at this last week we had a 5 billion crash in over extended petroleum futures."

I suppose you are refering to the nearly $5 billion lose suffered by Amaranth in its OTC natural gas long side bets. Yes indeed, I'll guess there are some mighty mad investors wishing they had never "invested" with Amaranth.

But, an equal amount of money was made by whoever held the opposite (short) side of that trade. Now, I'll guess there are some mighty happy people there. No money or wealth was created or destroyed. It just changed hands, as money does every day.
happy weekend....!

GoldiloxCountrywide may cut jobs by 10%#1476769/22/06; 19:08:53,1375,VCS_226_5007144,00.html


The end of the real estate market boom is forcing one of Ventura County's largest employers to cut 5 percent to 10 percent of its work force over the next few months, a top executive told workers Tuesday.

Countrywide Financial Corp., the country's largest mortgage lender with about 5,700 workers in Simi Valley, Thousand Oaks and Westlake Village, instituted a 60-day hiring freeze and plans to reduce staffing in several areas, Dave Sambol, president and chief operating officer, said in a memo obtained by The Star.

The memo does not mention layoffs, but several workers leaving the company's Westlake Village office as security guards roamed the parking lot declined to discuss layoffs or said they were told not to talk with the media.

A Thousand Oaks woman who did not give her name said she received two weeks severance pay after working for the company the past 2 years. She clutched a packet she said contained information to help her find another job. She added that layoff rumors that had been swirling on the Countrywide campus for weeks were confirmed Tuesday morning.

"You found out because your vacation time on your paycheck was gone," she said.

Countrywide officials did not return The Star's repeated calls for comment.

The Calabasas-based holding company, which offers a range of financial services, has more than 56,000 employees and some 900 offices nationwide. That means the cutbacks might directly affect as many as 5,600 workers.


Here's where the "wealth transfer" hurts! Adding to the bone pile.

SundeckGold and oil and the US dollar - the significance of US "energy independence"#1476779/22/06; 19:22:25


The US dollar is the very heart of the empire. It's the cornerstone upon which the military, the media and the political establishment rests. The dollar's strength however does not come from its comparative value to other currencies, but from its widespread use as the world's reserve currency. As the reserve currency the dollar defies the fundamental rules for determining "real value," that is, the relationship between the nation's credits and debits and the size and strength of its economy. Rather, the dollar's extensive use is the result of America's economic dominance since the end of the World War II, the profitability of its markets, and its stranglehold on the oil trade.

Sundeck: This thought-provoking article from Mike Whitney reiterates many of the issues discussed here over the years.

One question that popped into my mind, after reading (again) about the importance of the oil trade to dollar strength, is:

"What happens to the US dollar if and when the USA become self-sufficient in energy?"

As various countries and enterprises develop alternative energy strategies, it is unlikely that these many and varied interests will see it necessary to continue to trade their wares (energy units: joules or BTUs) for US dollars. Thus, in this brave new world of energy independence it would seem that the US dollar is doomed...

I suspect we will not have to wait that long, however. There are many signs on the wall already. To a Lilliputian like me, it would seem prudent for the US Administration, and indeed the administrations of all nations, to stop denying the inevitable and work towards a smooth transition out of "dollar domination", so that the transition ushers in a minimum of trauma.

In Australia, the initiative is being taken at the State Government level, by businesses big and small, and by "green" groups. The national government still seems to be in a state of denial...partly because of its very close collaboration with the present US Administration, but also perhaps because of the very great influence of the coal and oil lobby.

Clearly, possession of gold offers the Lilliputian safeguards against this inevitable transition in the role of the US dollar; be it soon or far-off in time...


SundeckGold Farming#1476789/22/06; 19:39:49


BEIJING, Sept. 21 (Xinhua) -- There is a continent with over 6 million people that is not charted on any map. Called Azeroth, it's a computer-generated continent in the World of Warcraft (WoW), an online game people can access through the Internet.

The game, first launched by California-based Blizzard Entertainment in 2004, now has over 6 million players, with more than 3 million in China.

As WoW becomes increasingly popular in China, the game has given birth to a new way of making money: trading the virtual game money called "Gold" into real money in the real world.

"We call it 'Gold Farming'," said Wang Yiwei, "Gold is the virtual currency in WoW with which players can buy stuff just like in the real world. Players can only obtain Gold by accomplishing time-consuming quests, slaying monsters, or starting a virtual business through the game's trade and auction system."

Sundeck: "virtual" gold for "real" money in the real world??? Now that brings a new twist to the unreal world of money and indeed!


Ten BearsSundeck #: 147677#1476799/22/06; 20:10:27

Thanks for the link, several good reads!

$$$$$$$$$$$$$$ A "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the December COMEX contract (GCZ6) on Thursday, October 5, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Monday, October 2nd, AND ALL ENTRIES must answer THE QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a "Dutch Treat" -- No, No, No ! I mean one of these four different types of The Netherlands 10 Guilders gold coinage.
IT (<== See that Sir Smeagol ?) could be a:
"King Willem", (Minted 1875 - 1889, Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce; or a "Young Queen Wilhelmina" (Minted 1892 - 1897, Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce); or a "Queen Wilhemina", (Minted 1911 - 1917. Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce); or an "Elder Queen Wilhelmina", Minted 1925 - 1933, Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce) !!!! IT just depends which one SIR MK finds first when he goes down into the dungeon. <;-)

Please go to the USAGOLD link at:
to view these coins.

There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure Silver Canadian Maple Leaf coin. ( <=== See that Sir Rich ?)

The QUESTION -- (Put on your THINKING HATS !) -- is:

"Who or what put gold to sleep, and who or what is going to wake it up?"

Answers should be in 30 words or more.


1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) December 2006 Gold Contract (GCZ6) on the date of Thursday, October 5th, 2006.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $ 666.6)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $ 666.6 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on Monday, October 2nd, 2006.

6) AND MOST IMPORTANTLY (as this part MUST accompany your Price prognostication)
--- In order for your entry to be valid, YOU will need to answer "THE QUESTION", in 30 words or more.
LET the CONTEST begin !

Clink!$$$$$ 620.0 $$$$$#1476819/22/06; 21:09:58

A delicate injection of a soporific drug or a severe bludgeoning to the head will render things unconscious, but who is to tell whether the market is asleep or knocked down ? As for what will revive the volatility ? Well, I can't speak with authority about the causality - which is the chicken, and which the egg - but I have noticed a very strong correlation in the past between increased market action and the announcement of a POG guessing contest at the Forum. It therefore appears to me from past experience that a/ the volatility will pick up significantly in the next week, and b/ gold will end up nowhere near $620 on Oct 5th (sadly!).

The Invisible HandIt's 8:30 am in New York#1476829/22/06; 21:30:30


1:30 pm in London. 2:30 pm in Paris. Big question; Is the price of gold going to be contained today? At 5 pm, Paris will awake.

Nobody notices that the recent containment (freezing) of the price of gold HAS to occur in a totally different manner than in the period 1985-1994.. In those days (before the advent of the internet? – is that a coincidence?) the price of gold could be controlled by a bird's song. The gold price containment (governance) has thus become more rigid.

This "rigidification" coincides also with the interest rate compression which HAD to go into overdrive during the last decades, whereas dollar-M3 had been deleted in the meantime in order to prevent the sheeple from realising that ever more monetary expansion would lead to ever lower GDP.

This is the paradox of the unproductive monetary expansion and decreasing interest rates (stagflation).

The paradox is one of the things which the gold price containment programme of my masters has to hide.

If the price of gold were allowed to rise, ALL interest rates would rise. And no economic bloc can/wants to allow this. Rising rates would awaken the debt monster (My masters would be very frightened.). The monster's actions would have a devastating on the internal/external buying power of the US of A dollar (USDX maginot-80) and its virtual reserve function in the dollar-International Financial and Monetary System (IFMS).

This situation lasts already for 12 years (1994-2006). The price of gold was allowed to perfectly follow the interest rate which was kept low. My masters, you seem to be able to produce a perfectly synchronised management. How strong you are!

Neither my new master Hanky nor China have changed anything to that. And the "show" is allowed to go on.

I don't think that if my masters decide to attack Iran, my masters’ global management will be able to neutralise the collapse of the dollar-IMFS.

If my masters fail to attack Iran, my masters are preventing Iran from immediately joining the Shanghai Cooperation Organisation (SCO) as a full member and from immediately setting up the Iranian Oil Bourse (IOB).

In either case, my masters and their dollar-IFMS will be the great losers.

Find the link: Two snips from today's (Saturday's) London Independent
Jeremy Warner's Outlook: Is this Enron again? Why, no. It's called the public finances
Hedge fund's losses soar to $6bn
Amaranth founder pledges to win back investor trust. Citigroup emerges as potential saviour

Wait until it's 5 pm in Paris. What a paradox!

Sundeck$$$$$650.0$$$$#1476839/22/06; 22:41:10

Golly Sir Gandalf, on the remote chance I win, what are some of those alternative Dutch Treats that were suggested?

Chocolates? TuLips? Shares in wind-power companies?


The question: "Who or what put gold to sleep, and who or what is going to wake it up?"

An answer: Well, there may be several reasons why gold went to sleep.

1. After that very vigorous run-up from below $500 to above $700 in the six months to May 06, it behoves anyone to rest. Even golden giants get tired when they run hard...

2. Then on the other hand, POG was starting to look a bit "spiky", suspiciously like it did in 1979. And remember what someone important (was it Volker??) said about not containing gold back in 1979? Well, the US Treasury and the FED were unlikely to make the same "mistake" twice, so one major suspect would have to be the FED in liaison with the US Treasury (and perhaps a few other sympathetic national entities).

3. But then again , since we all know that we live in free countries with free markets, it may just have been Mr Market getting cold feet at the run-up and deciding to rest a while and see what happened. Well, what happened was that the longs started getting cold feet as well and sold gold down, paused until they saw the CRB falling as well and then continued to sell gold down and, well, here we are...not exactly back to $254 yet, 'though!

What will wake it up?

Never fear! Gold is not dead, merely asleep, or it was anyway. (No, this is NOT "Monty Python gold" I am talking about, but real live gold.) I suspect the parrot...err I mean gold, has rested long enough and is now stretching its wings for another flight. Who will power the flight? Ahhh...the Indian consumer and the latent investor and the thinking person who realises that the US dollar is still treading water and it too will get tired... Who knows, even an hedge fund or three may see the wisdom of taking out a few long positions...or closing out a few shorts...



$$$$$$$$$$$$$$ A "PRICE of GOLD" GUESSING CONTEST!! $$$$$$$$$$$$

We shall have a price guessing contest on the closing (Settlement price) of gold for the December COMEX contract (GCZ6) on Thursday, October 5, 2006, ---BUT all entries must be posted to the TableRound before Midnight on Monday, October 2nd, AND ALL ENTRIES must answer THE QUESTION !!

The POG Contest winner -- the closest price guess to the actual Settlement Price -- will receive a "Dutch Treat" -- No, No, No ! I mean one of these four different types of The Netherlands 10 Guilders gold coinage.
IT (<== See that Sir Smeagol ?) could be a:
"King Willem", (Minted 1875 - 1889, Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce; or a "Young Queen Wilhelmina" (Minted 1892 - 1897, Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce); or a "Queen Wilhemina", (Minted 1911 - 1917. Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce); or an "Elder Queen Wilhelmina", Minted 1925 - 1933, Fineness: 0.900 and Actual Gold Content: 0.1947 troy ounce) !!!! IT just depends which one SIR MK finds first when he goes down into the dungeon. <;-)

Please go to the USAGOLD link at:
to view these coins.

There will be also be two runners-up prizes for the next closest prognostications --- each winning an one ounce pure Silver Canadian Maple Leaf coin. ( <=== See that Sir Rich ?)

The QUESTION -- (Put on your THINKING HATS !) -- is:

"Who or what put gold to sleep, and who or what is going to wake it up?"

Answers should be in 30 words or more.


1) The Winner is the poster with the Price Guess closest to the Settlement price of the COMEX (most active) December 2006 Gold Contract (GCZ6) on the date of Thursday, October 5th, 2006.

2) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $ 666.6)

3) "Guesses" shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "Dollar Signs" so as to be OFFICIAL !
(Such as $$$$$ $ 666.6 $$$$$$$ )

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes MIDNIGHT (24:00) on Monday, October 2nd, 2006.

6) AND MOST IMPORTANTLY (as this part MUST accompany your Price prognostication)
--- In order for your entry to be valid, YOU will need to answer "THE QUESTION", in 30 words or more.
LET the CONTEST continue !!

Gandalf the WhiteThanks for the "early entries" and ANSWERS to the "Q" ! <;-)#1476859/23/06; 00:12:17

Listing of Entries in POG Contest !

$$$$ $650.0 $$$$ Sundeck (9/22/06; 22:41:10MT - msg#: 147683)

$$$$ $620.0 $$$$ Clink! (9/22/06; 21:09:58MT - msg#: 147681)

COME ON IN all you "Lurkers" --- get your FREE posting code and enter the POG CONTEST !!
Quite a bit of available space for your entry.
Start thinking of your ANSWER to the Question !
Good Luck

Goldilox**** $626.2 ****#1476869/23/06; 01:24:03

@ most gratitious of wizards and castle masters,

Now that I am confident that I was not just experiencing a bout of "tinitus trumpetus" . . .

Many of the "pundits" called this correction, but alas, I found myself a bit quick on the trigger returning to the wager table, wasting far too much financial ammunition. I sefishly place my current prognostication on the number that regenerates my stake.

"Who or what put gold to sleep, and who or what is going to wake it up?

Who, you ask? Why, the "market players" who neither sweat nor toil to bring this exquisite product into being, but prefer, instead, to gamble on its "comparative value" for their amusement. Fundamentally, I blame a unique confluence of most of the excuses published thus far.

Who or What will wake it up? Another confluence, perhaps, of enormous debt and deficits, failing confidence, geopolitical insecurity, and greed on the part of those who have already forced it into a strong "oversold" position. Perhaps they are busily plotting the reversal of their previous strategies as we muse.

Once again, I'm grateful that the contest rules impose only a minimum word count, as tautology is a much stronger attribute of my composition style than is economy!

Smeagol***** FRN606.7 *****#1476879/23/06; 01:57:50

Now, THAT's the way to wake a body up with trumpetses.... from a disstance (and the farther the better, O yess, preciouss) (cackle) >8-)

"Who or what put gold to sleep, and who or what is going to wake it up?"

The venerable Wizard poses a poser for uss, precious... sso, what does we think?

Ssss...the hypnotist-prestidigitators of paper... hired and billed by the politician-promoters, put It to sleep, precious, a long time ago, in the greatest show that Middle-earth has ever sseen. But this could not have been done without the...ssss... willing participation... of the AUDIENCE, which in the eagerness of seeing the miracles of imaginary fortunes placed within their reach, also succumbed to the terrible sspell... and currently dream, fasscinated, within... when the acrid smoke of burning paper-illusions awakens them to the fact that the entertainers have in the final act set the theatre ablaze, with no thought for their safety whatsoever, perhaps then, O yess mayhap they will realize their peril, and run for it... and It.


SmeagolAch!#1476889/23/06; 02:03:23

We didn't use dollar signs to bracket our Guess...sss...please disregard the ****'s and treat them as $$$$! (Jusst as the money massters assk us to treat FRNs as It? Tsk, tsk, that's what you gets, precious, for watching the magician.)


The Invisible HandBad lack for those who thought only the euro would be used#1476899/23/06; 04:05:47

LONDON, September 23 (IranMania) - Iranian rials will be used as the main currency at the much-publicized oil bourse that the world's fourth largest oil producing country and the second biggest exporter within the Organization of Petroleum Exporting Countries (OPEC) is to establish on the Persian Gulf island of Kish, Iran Daily reported.
Mehdi Karbasian, who heads the board of directors of the International Oil Bourse Company, told Fars that the euro and the US dollar will also be used concurrently at the bourse

The Invisible Handluck#1476909/23/06; 04:09:21

not lack
KnallgoldTIH#1476919/23/06; 04:15:07

Sounds like handing over the hot potato...

We will see what currency they will actually use.Words are one thing...

The Invisible HandDerivative heroism ?#1476929/23/06; 04:31:59

One R Powell is defending my masters in yesterday's msg#: 147675.

R Powell quoting Gold Finger
"If you look at this last week we had a 5 billion crash in over extended petroleum futures."
R. continuing:
I suppose you are refering to the nearly $5 billion lose suffered by Amaranth in its OTC natural gas long side bets. Yes indeed, I'll guess there are some mighty mad investors wishing they had never "invested" with Amaranth.
But, an equal amount of money was made by whoever held the opposite (short) side of that trade. Now, I'll guess there are some mighty happy people there. No money or wealth was created or destroyed. It just changed hands, as money does every day.
happy weekend....!"If you look at this last week we had a 5 billion crash in over extended petroleum futures."

Me not like that.

How are these gambling profits served to the many counterparties when the other side is failing?

What kind of profits are being made when a stock/bondmarket crashes...when failed gambles are being bailed out...when the goldprice is governed through decades of systemic shorting...?

Who can possibly know the realities of profit and loss when 90% of all derivative deals happen invisibly OTC?

How many digits are created out of nothing with systemically inflating a derivative cosmos upon a shrinking mass of underlyings?

How real or virtual are the profits and loses that are permanently swelling in this gigantic play of derivative upon derivative...upon derivative?

Should we all enjoy heroically this evolution and encourage everyone to join it?

Do the masses have to continuously serve the winning insider masters with permanent derivative losses?

Hope you don't mind me saying NO THANK YOU.

The Invisible HandDictatorial heroism?#1476939/23/06; 04:54:57

For those, who like myself, like Chavez

The initiative taken by President Hugo Chávez to create one single ruling party is tied to the plans for indefinite re-election and concentration of the president's power


The perennial question as to democracy:
Why should the majority have the right to abuse the minority?

One Hand is a minority.
So if you don't agree with Anarchy, why not try dictatorship?

Rule of law, said you? That's tied to a Rechtsstaat, un Etat de droit, not to democracy.

Your next objection will be that nowadays most so-called Rechtsstaats are democracies. So what?
They are maintained alive through taxation and taxation is incompatible with the Rule of Law.
(Tax is worse than theft. The thief does not back periodically. Nor does the thief pretend to be stealing in the public/general interest.)

Topaz###$643.00####1476949/23/06; 04:57:44

I think we'll see a rebound in PoG this next week coincident with the Delivery window at Comex.
What poured cold water on PoG this month? ...the threat of WAG deliveries in September to match their assumed commitment.
What'll wake PoG up? ...same group becoming more recalcitrant with deliveries going forward.

GoldiloxFSN - Saturday Radio#1476959/23/06; 10:39:30

Doug Noland, Market Strategist for The Prudent Bear is today's guest on the Financial Sense Newshour hour #2.

He talks about the credit bubbles, their origin, and how he believes they drive the bubbles.

Surprisingly, he does not attribute this to the FED as creators, but more as "accommodators".

While he expects the imbalances to continue as long as it can be drwn out, his important question is, "Just what will China do with trillions of US$ when they decide they need to realize some return on them?"

Great interview. Pour a morning cup and enjoy his opinions and analyses.

USAGOLD / Centennial Precious Metals, Inc.Step right in and shop awhile... you may find some new arrivals!#1476969/23/06; 11:45:43">gold -- a global calling card
Chris PowellGoldman's revision of commodity index caused plunge in gasoline prices#1476979/23/06; 12:47:29

More tape painting by the government and its agents.

Latest GATA dispatch.

YGMM3 Is Back#1476989/23/06; 12:54:50

Interesting Webpage.
CometoseCot : silver gold copper#1476999/23/06; 13:25:37,

These tables show the positions of the commercials futures only and then with
options added in.

Someone commented two weeks ago that the open interest relative to price hasn't been this incidental since the last time there was a big set up for a LIFT...OFF

I look at these cot numbers with some regularity and I 've noticed that as this market has continued to develop (silver specifically) the Commercials have dropped their shorts from 78000 levels , with their longs in the 20000's since not long ago (i approximate within the last year). You may also notice that Copper commercials are running the numbers up too, from short to long ; this in spite of the dramatic pull back in the crb ? actually copper hasn't come down that much .

As long as the credit bubble continues to hold up ( picture geodexic dome made of toothpics held together with Elmer's glue to approximate the fragility of the financial system which operates on PERCEPTION AND CONFIDENCE alone : here I must echo my sister's response to the idea of gold ownership: " you think there is something amiss in the banking industry ?"{loose credit always causes Bankers to MISS the Mark}) and the dollar slides , building of infrastructure here and abroad will continue.......floating all boats as long as possible .


The Golden Guild will be rebuilding together from the carnage that the bankers leave behind , if things should go amiss.

If things don't go amiss,The metals will fly higher faster because they will be the next BUBBLE BYPRODUCT OF BANKER FOLLY. Imagine this picture : Unimaginable LIMITLESS DOLLARS OF THE WORLD chasing limited SILVER AND GOLD .........

this process is one that takes years to unfold ...but it can be accelerated by THROWING GAS ON THE FIRE.......and there are any number of TRIGGERS that may constitute ACCELERANT FLASH POINTS...

THE ONE I love thinking about the most is what happens to the YUAN when the DOLLAR SLIDES erasing DOLLAR PAPER VALUE and making Americans'purchasing power sink,,,,,while making CHINESE purchasing power surge..........


Chinese planning in 100 year increments IS VERY WISE ( what to do with US DOLLAR RESERVES) and the side effects it seem are going to be very encouraging for the CHINESE they grow up in the world .

THIS torchlike accelerant is a slow burn but in the end will come forth like a ROMAN (THAT IS A ) CHINESE CANDLE.



The Bible refers in Proverbs to industriousness : when it states "GO TO THE ANT , thou sluggard ".

The Bible also refers to a PARABLE that Jesus told about THE MAN THAT BUILDED his house on the ROCK in contrast to the man that builded his house on the SAND.

It appears that the CHINESE culture is EXHIBITIVE of Characteristics held up for example in both the former illustrations.

Don't get too caught up in the scenario that you are safe in your Golden GUILDED insurance program without the SPIRITUAL RICHES to accompany your fortunate choice toward gold .

I have inside information that THE CHINESE CHRISTIAN UNDERGROUND which is a groundswell we can't imagine, has it's aim to take the GOSPEL (GOOD NEWS of the REAL NEW DEAL regarding JESUS CHRIST and his RESURRECTION and all the affects of this SPIRITUALLY GOLDEN TREASURED GIFT to its' reciepients) to all of ISLAM .........


because the world of Islam cannot look up to westerners with the tainted and noisome pestilence in the background in their witness.........but the world of ISLAM does look up to and respect the CHINESE and their CULTURE....

I know how fast the WORD of GOD MOVES inside the work of the UNBRIDLED HEART OF GOD'S LOVE COURSING THROUGH HIS PEOPLE (the MYSTERY IN MOTION : the BODY OF CHRIST working in harmony ) blowin and goin on all 12 cylinders)

Once the momentum reaches a specific level ; it starts growing GEOMETRICALLY WITH GOD'S HELPING HANDS.......and then the SCRIPTURE WILL BE FULFILLED that PROMISES THAT THE GOSPEL WILL BE TAUGHT IN ALL NATIONS.......

It was taught already in all the world in the 1st Century ( Collossians 1;5,6, Collossians 1:23,24 , ACTS 19:20 are THE WORDS TRIANGULATED TESTIMONY and MEMORIAL TO THE WORK OF THE 1st Century SAINTS...........WHO gave YOU FREEDOM .
THEY ARE THE FRONTRUNNERS of the PIONEER FAMILIES THAT established this COUNTRY in THE LEGISLATIVE CONSTITUTIONAL FREEDOM born and washed in SAMSONITE COURAGE and BELIEVER BLOOD that made the land we live in ; IF you are thankful for what HE DID ; If you are thankful for WHAT THEY DID..........your LIFE WILL SURELY SHOW IT BY GIVING your brother's and sisters a putting your shoulder to the plow and

SOWING SEEDS OF GOD's WORD in the lives of people you see everyday ........

The CHINESE , THAT VERY DILIGENT people and industrious have proven that if they get it in their minds to do something , they will most definitely accomplish it .....

THEY are going to bring the greatest deliverance and spiritual wonder and beauty in motion and grace that the world has seen since the 1st CENTURY because the DESIRE OF THEIR HEARTS IS A BEAUTIFUL ACT........

When they have finished TAKING THE GOSPEL TO ALL OF ISLAM and the rest of the world HEARS as a BYPRODUCT OF a major work on their part.........

JESUS CHRIST COMES BACK .......and THAT's the WAY it is
IT WAS PROMISED by our FORBEARS and it's coming to pass as we speak ......

It's going to happen whether we participate or not ......You may as well decide to be on board......
because the rest of his promises are going to come to pass as well regarding those that have opposed HIM FOR CENTURIES and those who have aided and abetted the OPPOSER.
YES THIS IS THE REAL WAR and it's been going on for a while .
WE don't want to be here when that transpires (the rest of the promises about the end of the age).....WHAT DO YOU THINK MUSICAL CHAIRS IS ABOUT .....What do you think Don MACLEAN was singing about when he STATED THE TRUTH about the MUSIC DYING ....IF WE ARE NOT WITH HIM and in the PRESENCE THE MUSIC ..........WE WILL BE SOMEWHERE ELSE ..... where ever that ELSE IS : I PROMISE : you don't want to be. WE ALL HAVE TO CHOOSE.

When the music dies : all will MENWOMENANDCHLIDREN have taken their SEATS (the seating arrangements have already been made : we are waiting for everyone to take their SEATS. EPHESIANS 1:18 - Ephesians 2:6 (these are the seating arrangements).
GOD said that he called us and THAT WE ARE LOVELY AND ACCEPTABLE .............

We might as well live like it (GOLD OR NO GOLD )

He's quite a chef and the savor that comes from HIS KITCHEN is magnificent.

Sierra MadreINVISIBLE HAND...very pertinent observation of yours#1477009/23/06; 13:38:23


The new world religion is "democracy". You can deny the existence of God, and very few, or no one, will condemn you for it; but say, "I do NOT believe in democracy" and you are asking for serious trouble.

Today, there is only one acceptable form of government: democratic government. All others are damned. Curious situation, since Aristotle plainly showed that Democracy is the worst of all possible forms of government.

You raise an excellent point, what matters is the "Rule of Law", the "Rechstaat" or "Etat de Droit". This is what is important, and not the particular type of organization that applies the Rule of Law.

Alas! Dictatorship or Kingly rule, under wise rulers, implies social stability and I believe there are very powerful folk out there who are set against this. They shall be nameless. If I have to tell you, you don't need to know!

I feel that Chávez is basically a good person. Whether his government can endure or fall due to bad economic measures, is another thing. If he applies sensible measures, the people of Venezuela will be content while he rules.


With regard to derivatives, we know who lost and how much; now, whether those having rights as counterparties CAN COLLECT on their winnings - is that not something else again?

Maybe ALL concerned will lose?


The Invisible Hand$$$$8,752.0$$$$#1477019/23/06; 14:30:09

$$$$8,752.0$$$$ The Invisible Hand (2/18/02; 01:46:17MT - msg#: 70296)
Confirmation and discussion ****$ 8,752****
I do hereby confirm my guess of ****$ 8,752 ****
Discussion: Although in an earlier post of the last fortnight I said that A/TG predicted an upward surge of 50 bucks a day, I think it would be more precise to say that the gentlemen argue the unexpected move towards $ 30,000 can occur at anytime. It must thus start once. Why not within the 'time limit' of the contest
70 years of gold/goldprice governance by the organisers of the dollar-International Financial and Monetary System (IFMS) put gold asleep.
It is the same organisers who are being forced to accept that their governance had failed and that gold goes to da moon.

GoldiloxWOW!#1477029/23/06; 14:52:10

@ Comatose,

Moral and religious principles for individuals are a great thing, but when politico-religious bodies bill themselves as "error-free historians", their efforts are fraught with serious bias distortions, borrowing of myths from other cultures, and outright fabrications to support their "dogmatic" history.

While some in the media would have us believe that this "clash of cultures" is the basis of Mid-east turmoil, it really boils down to a good old-fashioned battle for territory and resources. The "Money Masters" commit a lot of resources to this centuries-old disinformation campaign to solidify their hold on the "hearts and minds" of their cannon-fodder! - or should I say "canon fodder'?

Before oil was a factor, the great mid-eastern deserts were left to the Arabic nomads' own devices, much like the native American "reservations" in the US. Once those resources were again in demand (a la Indian Casino land and oil leases), the battle was rejoined to again regain control. Notice how the corporations are commiting massive resources (and some under-the-table shenanigans) to participate in "Indian Casinos", leaving a few scraps on the table for the "rez", but absorbing massive profits into the corporate coffers.

History is always told from the bias of the "winners", but never taught with that bias openly exposed, as it might encourage developing minds to look at the "whole picture" and endanger the "party line".

Just my $0.04, adjusted for profligate money creation.

R PowellInvisible hand#1477039/23/06; 15:29:31

Your words here...

"One R Powell is defending my masters in yesterday's msg#: 147675."

Sir or madam, I have no idea what you are trying to say here. I have no idea who or what your "masters" are.

I merely stated that the money lost by one hedge fund is money gained by the trade's counterparty or counterparties so, no money was created or destroyed. It merely changed hands. Money changes hands every day, it is an intrinsic function of currency to do so.
happy weekend....

a bankerR Powell#1477049/23/06; 16:17:03

This is at once beautiful and tragic. You have the innocence of the newborn. But this is no blessing in financial affairs.

Pursue deeper academe and contemplation on the derivatives niche.

It was not the metal seekers that drove development of this market of toys. When you comprehend the makers you will also nearly understand how and why leverage was utilized as the necessary bait for this trap to function in its clever purpose.

Until this is brought home to your mind you shall remain as one lost. A babe in the woods.

R PowellBanker#1477059/23/06; 17:05:29

I'm not at all inpressed by your condescending riddles. Obviously you do not agree with my statement.

Let us stick to that one simple statement, nothing more, as I neither said nor implied any more. Exactly how is my statement not correct?

R PowellBanker#1477069/23/06; 17:17:23

Your words here....

"It was not the metal seekers that drove development of this market of toys. When you comprehend the makers you will also nearly understand how and why leverage was utilized as the necessary bait for this trap to function in its clever purpose."

I said absolutely nothing about "metal seekers", "development of this market", any "makers" (of what? the markets?), "leverage", "bait" or "traps".

I merely stated...the simple concept that one party's derivative lose is another party's gain. Exactly what in this statement do you find in error??

The original post that I was refering to implied that $5 billion had been eliminated or somehow lost. It was not, that $5 billion still exists, but it is in someone else's pocket. Don't read more into what I said than what I said. Is this not correct?

a bankerCorrection on the evidence#1477079/23/06; 17:33:13

Please now substitute "slow and intemperate" in place for "innocent".

There is no riddling here. Contemplation for understanding is something that only you alone can do for yourself. Another cannot do it for you but can point the direction for your exploration. In that blank region on the edge of your mental map I see the writing "There be monsters."

Will you not tread these lands into familiarity to abolish your fanciful creations?

Contemplate: It was not the metal seekers that drove development of this derivatives market. If you cannot understand its nurture you will never comprehend its nature, its purpose and function.

Topaz...and so it begins!#1477089/23/06; 18:04:21

The slide into Hades ratcheted up a notch Friday with the 3mo just shy of 50bp below FFR.
Lower yields=LowerDX=Higher (paper) Au/Ag ...up into the end-game when a reversal of sorts occurs.
Should be fun!

R PowellBanker#1477099/23/06; 18:06:01

I can see that you can not or will not answer. This is of no consequence to me. Be peaceful + happy in your mysticism. May the force stay with you.
happy weekend to all....B

Flatliner@a banker#1477109/23/06; 18:17:24

Your options seem genuinely opaque. Why is this?

Many read your postings and, if the past is any indication of the future, your words will live on for all to see and contemplate for years to come. With art, one person's understanding of life may bring a totally different visual experience, to the viewer, then what is seen by a friend viewing the same art at the same time. One may conclude that your understanding has given you an image of the big picture and your addition to the forum indicates that you might have a willingness to share. Do you?

GOLD FINGER5 billion loss = theft#1477119/23/06; 18:30:48

5 billion loss = theft

Not only will this impact those who lost. But, it greatly affected the Price of Oil. Investors who speculate and drive up the oil prices are in my mind thieves. Along with most stock brokers who fake numbers and cook up books with accountants. I have see some horrendous things and I am not going to stock brokers ever. Now, Gold is friendly and safe compared to all the hoopla of over sold futures.

Hurray for gold!

Gas now at 1.99 us gal in my area and falling! Gold is out performing petroleum!


a bankerFor R Powell#1477129/23/06; 18:41:01

Reciprocally I can see that you cannot or will not devote the resources of time and concentration to contemplate that blank region of your map. This is of most unfortunate consequences to me and to others because the flow of worldly events are mired in the collective ignorance of the participants.

Those masses without sharp discerning minds are very easily led to be accomplices in the status quo. This dark age is ruled by an entrenchment of priviledged few who put up every obstacle (including popular delusion) with which to forestall the humanitarian improvements of the enlightened pioneers from gaining traction in popular wisdom and implementation.

Ever has this been the struggle in each step forward in the evolution of the human condition.

Your choice to remain a pawn is a drag upon us all.

SmeagolThings like thiss makes our brain hurrt, but we tries...#1477139/23/06; 19:40:40

a banker: "Contemplate: It was not the metal seekers that drove development of this derivatives market. If you cannot understand its nurture you will never comprehend its nature, its purpose and function."

It is hard for poor Smeagol to understand, precious...we aren't privy to a banker's inside information... but we wants to understand.

FWIW, this is what Smeagol sees so far... atop the actual physical market... is a lot of people hoping to generate wealth without working for it... by making rissky long/short promise-bets they don't intend to keep... to others of ssimilar mind.

We sees other folk that takes advantage of this by offering "bait" (= leverage?) in hopes that these greedy ones will take it... while they sspring the "trap" (manipulation?) either way, resulting in a margin call (= more money extracted from the pocketses of the trapped?).

We sees... that much more money flows in paper-metal than in metal.

We sees... that modern currency "accounting units" can indeed be lost (bankruptcy, etc.) and not balance on the books as should be... because "gains" and "losses" are vapor until they are transformed to substance.

We sees... that the flows of "accounting units" that result from all this can provide grist to still other people to control (= hold/release/steer?) physical metal to where It is wanted or needed, for purposes noble or...sss... nefarious, unless/until the game sstops (= substance call?)

Sss... mayhap a banker is not "allowed" to reveal certain things directly... or cannot, because of position... nevertheless we thinks it fortunate that he/she has decided to drop on the Table Round what hints and clues as can be dropped.

We will gladly snap up those bits, but we does want to run with them in the right direction!


a bankerFor Flatliner#1477149/23/06; 19:52:40

A body of knowledge cannot be gifted over like writing a cheque from your account. We cannot be old until the many years have made us so. In like fashion we must each work for our collected awareness by the passage of toil to seek and evaluate, assimilating piece after piece.

Please then understand that I will not pretend to be "writing cheques" as if they may transfer the account. But small opportunities may be ocassionally handed over like loose change.

A small beginning.

Mona Lisa remains a popular and useful example. It has value in the mind of men because man has the unique ability to hold the idea of it in his mind. But lacking that ability, the Mona Lisa enjoys no value in the minds of dogs.

That speaks only of the starting point for value. If we can hold the IDEA of things in our mind, we can order our body of thoughts in many ways, ranking these things relatively upon the notion of value.

To leap chapters forward, a key reason the Mona Lisa in the physical world enjoys its very high ranking of value (as measured by its price) is that there is only one. While it does exist in the MINDS OF MANY men as an IDEA (of low relative value) it can exist in the HANDS of ONLY ONE as the TANGIBLE ITEM (of high relative price).

Building upon this, but extending to analogy, the derivatives makers very basically attempt to use the marketplace to assign a price to the value of the IDEA of the Mona Lisa as it exists simultaneously in the minds of many men.

No rational thinker should predict that the price discovered by the marketplace for the value of the Mona Lisa held as a mental idea could ever be as high as the price discovered by an auction for the singular painting held as a tangible item.

But for reasons touched on previously, the makers of these derivative markets do not want the participants (R Powells of the world) to mentally span that leap forward in chapters of wisdom from understanding prices assigned in the "idea" realm as wan shadows to the values obtainable when the "tangible" realm is explored.

My firm sense is that you already know this. R Powell does not. We hope he reads and explores to become a pawn no longer.

a bankerFor Smeagol#1477159/23/06; 20:00:34

Thank you fo