USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
AllanC@white hills#14889611/1/06; 00:06:49

Thank you sir, and I agree with you entirely. Don't misunderstand me, political issues are AS IMPORTANT to any discussion, as world events unfold and effect our economic lives. In fact, I know of no better way to start a gold discussion and I would'nt want to dissuade you in any way from exercising your right to contribute.

I was simply saying projecting value judgements are really not helpful when it comes to polital discussions, as we all tend to react negatively to them if they conflict with our own. And I plead guilty, having done that in the past as well.

I've enjoyed reading some of your posts, and naturally I hope you can continue to make a valuable contribution in this way. Cheers.

Topaz112.65 Yawn .. Ho-Hum.#14889711/1/06; 00:13:22

When last I looked at this (last night) it was hovering on 112, at this rate we'll hit 120 by Dec...and a solid result on my Compounding Buck-o-Meter to boot.
There are 2 forces at work here imo, One is DE-flation, the other Hyper-inflation.
Anyone chortling IN-flation is living on another planet OR having a big lend of you. again IMHO.

GoldiloxBounced again#14889811/1/06; 02:19:02

London rally turned back at 609.5 once again.
GoldiloxGold: Glittering Again?#14889911/1/06; 08:11:37


The price of gold has broken out of its recent trading range and is over $610 - at least in the early going today. Readers have a number of suppositions about what's driving this, and I have a couple myself. Armed with fresh coffee, here's the list:
Word came out on the 24th that there has been a shakeup in the financial department of the New York Mercantile Exchange, and that the CFO has resigned, just as the Nymex IPO was going out on road show. then came a follow-on report that the CFO was getting a half million dollar payment as part of his termination agreement. As one of our readers said in an email "Any time a CFO resigns, especially right before an IPO, you wonder 'What's going on?'" Frankly, I don't read anything into it, but a few readers are.
The more obvious candidate for gold starting to glitter a bit is that the US dollar is starting to show the strain of all the hype with the market. South Africa's Business Day headlines that "Gold up on weak dollar." That makes sense, especially when we consider the impact of the weak GDP numbers from last week. This makes a lot of sense to me.
Other headlines suggest that a monetary change of sea-state is at hand with one headline at Resource Investor headlining: "Gold Watch: Breaking the link with Crude?" This headline goes hand-in-glove with the weakening outlook for the Buck. Why? [I drop into my imitation of the voice-over in a Japanese Samurai movie and gesture with my six sigma marketing sword:] "You see, gozo, mmm....when you have a recession, demand for oil declines markedly, however, monetary demand increases as governments try to spend their way out of the crisis. And, gozo, when governments have already been spending at as you say crazy rates on the War on Terror, you risk hyperinflation of the money supply at the same moment that deflation is sweeping the world. This we will call this hyper-stagflation. Hi."


The People's Economist speaks . . .

GoldiloxBattle Royale in the Au pit#14890011/1/06; 08:49:20

Wild $2 swings at the per tick level. If you love action, check out this real-time chart, and reset it to "ticks".
GoldiloxOT - Depleted uranium risk 'ignored'#14890111/1/06; 09:35:58


UK and US forces have continued to use depleted uranium weapons despite warnings they pose a cancer risk, a BBC investigation has found.
Scientists have pointed to health statistics in Iraq, where the weapons were used in the 1991 and 2003 wars.

A report by the World Health Organisation (WHO) in 2001 said they posed only a small contamination risk.

But a senior UN scientist said research showing how depleted uranium could cause cancer was withheld.

The UK Ministry of Defence said that there was no evidence linking depleted uranium use to ill health.

Depleted uranium is extremely dense and hard, and is used for armour-piercing bullets or shells.

Fears over health implications led to a study by the WHO in 2001.

Dr Mike Repacholi, who oversaw work on the report, told Angus Stickler of BBC Radio Four's Today programme that depleted uranium was "basically safe".

"You would have to ingest a huge amount of depleted uranium dust to cause any adverse health effect," he said.

'Risk from particles'

But Dr Keith Baverstock, who worked on the project, said research conducted by the US Department of Defense suggested otherwise.

He described a process known as genotoxicity, which begins when depleted uranium dust is inhaled.

"The particles that dissolve pose a risk - part radioactive - and part from the chemical toxicity in the lung," he said.

Later, he said, the material enters the body and the blood stream, potentially affecting bone marrow, the lymphatic system and the kidneys.

The research was not included in the WHO report, and Dr Baverstock believes it was blocked.

Mr Repacholi said the findings were not collaborated by other reports and it was not WHO policy to publish "speculative" data. He denied any pressure was brought to bear.

But other senior scientists have pointed to worrying health statistics in Iraq, which show a rise in cancer and birth defects.

Prof Randy Parrish of the Isotope Geosciences Laboratory in the UK said environmental and health assessments were needed in Iraq to establish the facts.

Iraqi scientists trained by the UN are seeking to carry out such an assessment, but Henrik Slotte of the United Nations Environmental Programme said without clear information from the US on what was used and where, it was "like looking for a needle in a haystack".

He said there was "no indication" this information was forthcoming from the US.

A spokesman for the UK's Ministry of Defence, meanwhile, told the BBC that there was "no scientific or medical evidence" to link depleted uranium use to sickness in Iraq.

He said the MOD was aware of recent research into the effects of depleted uranium at cellular level, but that it had to be guided by "the professional advice of the Health Protection Agency and the International Commission on Radiological Protection".


Lot's of "official denial" on the military's latest "Agent Orange" scandal. Next some nut will suggest spraying it in your garden to "weigh down" insects! I've been visiting a friend recovering at the San Diego VA hospital lately, and they seem pretty "up in arms" around there.

Hiding long-term "friendly fire" dangers from our own troops renders "moral high ground" propaganda fairly moot. But it sure lightens the load for scientists that are still trying to figure out what to do with rapidly accumulating nuclear waste - one of the main reasons I left that industry after the Brown's Ferry fire. . . "Lawd, Lawd, got them Brown's Ferry Blues."

Since the Bosnian war, this issue has been fairly well contained, but with anti-war sentiment gaining ground, the timid press is leaking out more info, and VA doctors and nurses are taking a stand.

Not gold related, but an interesting peek at public sentiment and "official denial" 6 days prior to mid-term elections.

Ten BearsMogambo Guru#14890211/1/06; 09:43:30

good Mogambo rant this week.
CometoseBullion vs HUI#14890311/1/06; 11:04:03

Today's action in the mining sector while Gold is up 9.....
is pretty good evidence and action which indicates where gold and silver will be going soon .............

Interesting that this happens just before the election ...

Watch wait and enjoy .........

and VOTE ........

I already voted .........OUT ALL THE INCUMBENTS.........

my civic duty ....

Now i can wait watch and enjoy and take the appropriate action while we move into TUESDAY . I think we are getting confirmation ......
of what's certainly right around the corner.

Topazah looove the smell 'o FreeGold in the mornin!#14890411/1/06; 13:13:27

Well, not the "Freegold" normally discussed here, this FreeGold is the Paper variety freed from the shackles imposed by delivery of RealMetal.
Ye see, we're now in full blown Paper mode and the "Price" now is solely dependant on Dec futures. The Paper market, anticipating a Dollar drop in sync the aforementioned Bond strength, ran PoG and PoS. Well, they didn't get the Buck drop they'd anticipated and I'd be expecting an unwind today (Thur)

Let's see!

Town CrierAre we now very close to a parabolic rise into the Thousand$ ? ? !#14890511/1/06; 14:28:30

(See close-up of the pennant breakout on the 1-yr chart at URL above.)

gold price

USAGOLD Daily Market ReportPage Update!#14890611/1/06; 16:00:56">
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

November 1 (from MarketWatch) -- Gold futures climbed more than $12 an ounce Wednesday to close at their strongest price since early September, buoyed by recent dollar weakness and continued reports of robust physical demand linked to the holiday season.

"A weakening U.S. dollar, increased geopolitical concerns and a likely win for the Democrats are all bullish factors for gold going forward," said Peter Grandich, editor of the Grandich Letter.

The December gold contract closed up $12.50 at $619.30 on the New York Mercantile Exchange after trading as high as $619.70. It hasn't closed or traded at levels this high since early September.

"The recent weakening in the dollar due to last week's poorer-than-expected U.S. economic figures has pushed up the gold price in dollar terms," said analysts at Numis Securities. They also noted that the close correlation between the oil price and gold price seen since the end of 2005 has weakened this week, with gold prices rising but oil prices falling.

The dollar touched multi-week lows against the euro and yen Wednesday after a batch of economic reports reinforced the market view that the U.S. economy is slowing.

"The dollar has taken some serious uppercuts of late, and U.S. consumers have not only toned down their optimism quite rapidly, but are not too eager to spend the extra few dollars in their wallets that a curiously cheaper gasoline price has suddenly yielded," said Kitco's Jon Nadler, an investment-products analyst.

"Gold will bounce along quite nicely if the dollar continues to have such flu symptoms and/or if people start pulling some money off the very, very rich pile that is sitting on the equities gaming tables," he said.

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

USAGOLD / Centennial Precious Metals, Inc.Click hyperlink to view latest archive of news. (Consider the signup to receive news timely by e-mail!)#14890711/1/06; 17:09:08">join the newsgroup
The Invisible HandThe Sign of the Dollar …#14890811/1/06; 19:54:49


Nobody wants to disclose that the price of gold is being contained by the dollar-International Financial and Monetary System (IFMS).

It's all about perception by the sheeple.

The Jessica Cross gang is proclaiming that the dollar is still governing sovereignly.

Because they know that the events are displaying that the dollar has lost its sovereignty.

Their dollar-devaluation (dollar-IFMS implosion) terror is invisibly increasing in time. They know the dollar's time is up.

Hence, no dissonant sound may be heard.

Even the libertarians, the so-called defenders of liberty and INDIVIDUAL sovereignty, are panicking

Here's Congressman Ron Paul from the Republocrats Party, former Libertarian Party candidate for President.

In an October 30 press release, Congressman Ron Paul announced his support for a resolution introduced by Representative Virgil Goode of Virginia opposing construction of the so-called NAFTA Super highway and the establishment of a tri-national North American Union (NAU) or Security and Prosperity Partnership (SPP).
Any movement toward a North American Union diminishes the ability of AVERAGE AMERICANS TO INFLUENCE THE LAWS under which they must live," says Paul, the premier constitutionalist in the U.S. Congress. "The SPP agreement, including the plan for a major transnational superhighway through Texas, is moving forward WITHOUT CONGRESSIONAL OVERSIGHT-- and that is an outrage. The administration needs a strong message from Congress that the American people will not tolerate backroom deals THAT THREATEN -- OUR -- SOVEREIGNTY."

Former libertarian Ron Paul is thus advocating GROUP sovereignty instead of INDIVIDUAL Sovereignty.

The movement which was formerly known as LIBERTARIAN INTERNATIONAL (LI) is now known as the International Society for Individual Liberty (ISIL). The name change was done in order to avoid any confusion with the Libertarian Party (LP).

So far, so good. ISIL is the conscience of the LP.

Here's the ad for ISIL's annual world convention, next August.

ISIL's 26th World Freedom Summit
In 2007, Join ISIL In Historic Virginia where 400 Years Ago In 1607 "America" Began
And Plot the
In 2007, the International Society for Individual Liberty's 26th World Freedom Summit will return to the roots of American freedom – to the very place where the seeds of liberty planted in 1607 took root and grew into the United States of America

Why all the noise about the refounding of America. Is that because the dollar is represented by its (America's) initials?

literally stands for a free country's currency. Here, it makes the deeper point that the mind is the faculty responsible for the creation of wealth, and the mind must be free.

Do you know that the United States is the only country in history that has ever used its own monogram as a symbol of depravity?" Ayn Rand, Atlas Shrugged.

In 1960, an article in Time magazine covered a speech by Rand at Yale University. In the article, Rand is quoted as saying "The CROSS is the symbol of torture; I prefer the dollar sign, the symbol of free trade, therefore of the free mind."

Did our masters also infiltrate ISIL?

Meanwhile, one of our masters, Jessica CROSS, wants us to believe that the supply of gold metal is greater than the demand.

The road to Freegold presupposes the noticing of a continuous uptrend of the gold price without intervals.
The moment the whole world notices this uptrend, the dollar-IMFS will be toast.

More precisely, the toasting will have occurred just before the noticing. predicted on these pages by A/FOA.

melda laureIsilenno, to the moon.#14890911/2/06; 00:18:11

@ TIH, couldn't resist.
melda laureIt's all about liquidity#14891011/2/06; 01:03:22

With the passing of all souls day I suppose we might all consider our own mortality (or lack thereof). I see that Mr Nasrallah is making hay while the sun shines (before the rain wets his parade). So either way we are toast, nine ways from sunday. Thinking about WH's comment of what happens if they Nuked NY, somehow I just dont see that it tanks the system. Pearl Harbor was the beginning of the end for Japan according to the guy who executed the attack.

No, the foundations of the economy have to be totally rotten first for the house to crumble... oh... well, anyhow. Maybe it will crumble on its own.

A dollar crisis.

For argetina, US dollars represented hard currency. For the US, a dollar crisis is fundamentally different; it would be just as likely to have the FED credit each account by say $5000 just to maintain "liquidity". It is the only game they know.

How do nations get "out" of dollars? They are the modern day tar-baby. Mogambo's comment that PM's represent a sort of nash equilibrium is only partially true: it is assymetric, if you have only a couple thousand in savings you really CAN convert it all to gold. Bill Gates and the PBOC cannot. Moreover, Steven Roach's comment that we may (someday) see a return to "restraint" in monetary issuance in a new global financial regime seems to me to be pie in the sky: it's the wild west out there.

The US will confiscate your stocks when they lasso in the bankers at the FED. Not before. Not while the liquidity tap is flowing. Meanwhile, the FTD is already a "confiscation" lite. Paperless banking paperless stocks, and paperless voting. There's a reason the founders didnt' trust the ballot box. It's all about liquidity over substance.

TownCrier"Isilenno... to the moon."#14891111/2/06; 01:49:20

Bravo, melda laure. You're a marvel who continues to amaze.


TownCrierA good introduction to FOA for those gold-market newcomers yet to make his acquaintance...#14891211/2/06; 02:46:40

FOA (07/16/01; 12:42:07MT - msg#82)
The evolving message of gold

I begin tonight by reading an item from the very first TrailGuide walk. Then proceeding on to expand in more detail from our points in earlier talks. For the benefit of those who missed our last discussion, this thought picks up that theme very well:

"""""""""""""""" Our most broad view, expressing our strongest position is this:
From ten or perhaps twenty years ago a political will, a concept, was being formed that would today change the economic architecture and power structure of the world. Within this change, gold would undergo one of the most visible transformations since it was first used as money. We expect that, starting three or four years ago, the gold market itself has started responding to this sea change. As such, in our time, physical gold will enter the greatest bull phase in it's human use history. This my friends is the very trail we walk today. During our hikes and fireside chats, we will point out this political will, consider the logic and express our reasoning for this position. All the while observing the "river current", in the form of events, that will soon confirm our view."""""""""""""""""""""""""


First off, I want all of you to know that I was a hard money Gold Bug for decades. Actually, I still am in many ways. Yes, in spirit I am one of those little "roadrunners" mentioned in our last talk. Still storming down the gold money trail. Fortunately for me, and my portfolio position, I started looking at a realistic human / political side of money thought. A side most of us never grasped quickly enough to help us; because evolution was changing it before our understanding could catch up. My slow learning curve was speeded up with help from some very sharp people. Today I still see things using a hard money position; but, just as the world has turned and time passed by, my position has evolved quickly enough to flow with our human tide.


The major object of our discussion tonight is this thought:

--- the present state of affair in our gold market isn't just the result of political motive alone. --

I'm carrying this over from our last talk; that mentioned a new demand for fiat.

Yes, it's true; a simple political motive explanation would, indeed, solve all our problems. For many Gold Bugs this explanation does end their need to think much further on the subject, but their continued financial loses in the gold arena says their problem was never solved as such. Indeed, there is plenty of political push and pull going on to overtly move the market and we will later cover most of that in other talks. But, to underscore our isolated point, tonight, we magnify a few thoughts.


Had the dollar run it's inflationary course, in a manner and time period that history records all fiats as doing, there would have not been any contest for us to follow. From 1971, had dollar prices of everything soared, as hard money theory said it should have, every asset in the world would have seen hyper prices reflecting our run from this inflating currency. Perhaps not all of the wealth held in dollars would have went into real gold: some of it surely would have competed against the politically contrived paper gold markets. But, in spite of official thrusts, enough cash would have went into physical to drive it's physical dollar price to at least $1,000 or $3,000 over the last 30 years. It didn't.

The dollar did very much inflate from a printing press viewpoint and did so without massive price inflation. A 30 year repudiation of much hard money dictum. This tremendous rate of currency creation could not have been contained in a way that held off price rises with coordinated Central Bank support alone. The amounts of currency created and the build up of official assets held in CB vaults, to support the inflating currency, did not come close to matching each other. Even in a reverse fractional banking context. This one observation, simple to grasp as it is, points to another demand for fiat currency that did not exist when hard money thought was first built.

Over the last few decades a new demand use for digital money, or fiat unbacked paper money, has helped absorb most of this extra printing. The velocity of and gross increases of both private and world trade gave a use to worthless digital transactions and helped build a value that didn't exist in fiat currency before. This effect had to be real, because the world took in every last dollar that was printed and didn't dump them off to buy other real assets. A process that would have matched printed money rates to price inflation rates! I'm speaking of dollars alone, of course.

And there is more to observe that this alone.


In recent society's demonstrated use of unbacked fiat currency, they were advancing a trend to use currency in trade only; while owning wealth assets outside the known money context. As society advanced and trading volumes mushroomed, the need for more digital units increased more so from their trading function than their value retaining function.

This process was rendering the whole school of hard money thought useless as a strategy to to defend one's savings from inflation: as these inflating digital units failed to create a meaningful price inflation.


Owning wealth aside from official money units is nothing new. Building up one's storehouse of a wealth of things is the way societies have advanced their kind from the beginning. What is new is that this is the first time we have used a non wealth fiat for so long without destroying it through price inflation. Again, a process of using an unbacked fiat to function as money and building up real assets on the side. Almost as if two forms of wealth were circulating next to each other; one in the concept of money and the other in the concept of real wealth.

This trend is intact today and I doubt mankind will ever pull back from fiat use again. Fiat used solely in the function of a money concept that I will explain of in a moment. If we inflate this currency to it's death, and I expect we will, then the world will just start a new one and the process goes on. Note the minor examples of this process in various third world currencies as they kill their own kind and advance to using the king fiat dollar. The local currency printers eventually fail their task, so the next nation state's fiat comes into use. Currently, in the major category, the dollar is giving way to the Euro. Ha! Ha! In logical progression of this we will, one day three hundred years from now, be using the new mighty Argentina whatever as the world's next great fiat. (smile)


Understanding all of this money evolution, in it's correct context, is vital to grasping gold's eventual place in the world. A place where it once proudly stood long ago. In the time before us, fiat monetary policy, interest rates, appropriate debt levels and even speculative stock market binges will all be regulated to how a fiat does it's singular job of being just money; not functioning as a long term savings vehicle. How well that job is performed will depend on a free market trading value of gold wealth.

All of this transition is killing off our Gold Bug dream of official governments declaring gold to be money again and reinstitution some arbitrary gold price. Most of the death, on that hand, is in the form of leveraged bets on gold's price as the evolution of gold from official money to a wealth holding bleeds away any credible currency pricing of gold's value in the short run.

To understand gold we must understand money in it's purest form; apart from it's manmade convoluted function of being something you save. Money in it's purest form is a mental association of values in trade; a concept in memory not a real item. In proper vernacular; a 1930s style US gold coin was stamped in the act of applying the money concept to a real piece of tradable wealth. Not the best way to use gold, considering our human nature.


Modern society thought, has taken a step beyond our schooled understanding of money. Going beyond, by taking a step backwards and embracing a practice more real. By accepting and using dollars today, that have no inherent form of value, we are reverting to simple barter by value
association. Assigning value to dollar units that can only have a worth in what we can complete a trade for. In effect, refining modern man's sophisticated money thoughts back into the plain money concept if first began as; a value stored in your head! Sound like something that's way over your
head of understanding? I'll let you teach yourself.


So, you think we have come a long way from the ancient barter system; where uneducated peoples simply traded different items of value for what they thought they were worth. Crude, slow and demanding, these forms of commerce would never work today because we are just too busy.
Think again?

Lean back and think of all the items you can remember the dollar price for? Quite a few, yes? Now, run through your mind every item in your house; wall pictures, clothes, pots and pans, furniture, Tvs, etc.? Mechanics can think about all the things in the garage, tools, oil, mowers. If one thinks hard enough they can remember quite well what they paid for each of these. Even think of things you used at work? Now try harder; think of every item you can remember and try to guess the dollar value of it within, say, 30%. Wow, that is a bunch to remember, but we do do it!

I have seen studies where, on average, a person can associate the value of over 1,000 items between unlike kinds by simply equating the dollar price per unit. Some people could even do two or three thousand items. The very best were some construction cost estimators that could reach
10,000 or more price associations!

Still think we have come a long way from trading a gallon of milk for two loves of bread? In function, yes; in thought no! Aside from the saving / investing aspects of money, our process of buying and selling daily use items hasn't changed all that much. You use the currency as a unit to value associate the worth of everything. Not far from rating everything between a value of one to ten; only our currency numbers are infinite. Now, those numbers between one and ten have no value, do they? That's right, the value is in your association abilities. This is the money concept, my

Unlike the efficient market theory that was jammed down our throats in schools, we all still use value associations to grasp what things are worth to us. Yes, the market may dictate a different price, but we use our own associations to judge whether something is trading too high or too low for our terms. We then choose to buy or sell at market anyway, if we want to.

In this, we have moved little from basic barter. In this, we are understanding that an unbacked fiat works because we are returning to mostly bartering with one another. A fiat trading unit works today because we make it take on the associated value of what we trade it for; it becomes the very money concept that always resided in our brains from the beginnings of time.

In this, a controlled fiat unit works as a trading medium; even as it fails miserably as a retainer of wealth the bankers and lenders so want it to be.


The American dollar has brought it's makers a lifestyle that is at odds with this new thrust in money use. A reserve currency today must allow it's value to be set solely upon it's money function, not it's function of retaining wealth. Use trends today are forcing money creation policy and money values to be determined by wealth outside the official money realm. All the while the dollar holders are fighting to stop this from happening. Free Gold markets would today destroy the current dollar exchange rates and render it's debt creation null and void as a proxy to buy us things for free. Much is at risk to the lifestyle our old gold dollar relationships brought us if gold trades free. Much is to be gained for wealth savers, today, who buy gold for it's wealth function and forget it's current dollar created price.


I'll go further into the other aspect of money titled; "Who said we were suppose to save this stuff"!

Next time in our talks on the evolving message of gold. Good night and thank you for being here.


[...excerpt from the preceeding msg#81...]

I expect the above wealth demand to be politically reinstated. And timed to destroy the credibility of our current dollar paper gold system.

This ongoing discussion will embrace and follow this political reality as it unfolds in our time. Unfolding into what is about to become the greatest bull market in gold our world has ever seen. To fully understand how this will come about, we need to understand how some political forces are using both gold's and fiat's changing function in our modern economic structure. To grasp that, we all must understand what money is today, yesterday and tomorrow.

So keep those little feet going mr. roadrunner!

We will pull you back in long before gold hits $30,000...

^---(full commentary to be found at url)---^

GoldiloxBrittle euro notes baffle Germans#14891311/2/06; 09:43:51


German police are trying to find out why some euro banknotes of various denominations have been disintegrating - and who is responsible.
The notes are believed to have come into contact with sulphuric acid - perhaps during a cleaning process, police spokesman Michael Maasz said.

"They do not pose a risk to public health," he told the BBC News website.

Hundreds of the brittle notes have appeared in at least 17 German towns and cities, German media report.

The popular German daily Bild says a blackmail attempt is one of the possibilities that police are investigating.

The paper says the banknotes are not forgeries.

The first disintegrating banknotes appeared in June and July in Berlin and Potsdam, Bild said.

Since then, they have been found further afield, including in Duesseldorf, Karlsruhe, Kiel and Wuerzburg.

German media say 50-euro notes are most commonly breaking apart.


Planned obsolescence taken to the extreme?

GoldiloxEU abandons Turkey-Cyprus talks#14891411/2/06; 09:49:20


The European Union has dropped plans to hold a last-ditch meeting with Turkish and Cypriot officials, to be hosted by Finland in Helsinki at the weekend.

Finland said it was unable to get all sides around the table - but that it would keep trying for a breakthrough.

The meeting was meant to avert a crisis in Turkey's bid for EU membership.

The European Commission publishes a report next week that is expected to criticise Turkey for not opening its ports to traffic from Cyprus.

Cyprus is a member of the EU, but Turkey does not recognise it.

The island was divided in 1974, when Turkey invaded the north after a coup backed by supporters of a union with Greece.

Crisis looming

That the Finns could not get everybody together is not a good sign.

Finland was hoping to make progress on a plan under which Turkey would open some ports to ships from Cyprus, while the EU would ease the economic isolation of Turkish Cypriots.

But according to diplomats, Turkey refused to attend the talks, arguing that Greece should also be involved in any discussions concerning Cyprus.

Crash looms over Cyprus

Contacts will now continue at the level of officials, and the Finnish foreign minister will meet the Turkish Cypriot leader in Brussels on Friday.

But few expect a breakthrough by Wednesday, when the European Commission is due to issue a critical report on Turkey's progress, not just in its dealings with Cyprus, but also as regards political reforms and freedom of speech.

Brussels has repeatedly warned the government in Ankara that failure to keep its promises could derail its membership bid.

Next week's report is not expected to make any recommendation on the suspension of talks, which began only a year ago.

But EU leaders may have to take that difficult decision when they meet in Brussels in December and face a serious crisis in relations with Turkey.


It looks like Turkey has more than its Kurdish eastern frontier to worry about, as EU entry may be stalled without a Cypress agreement.

GoldiloxBurma leader's lavish lifestyle aired#14891511/2/06; 09:52:43


A video of the wedding of the daughter of Burma's military leader Than Shwe has appeared on the internet, giving a rare glimpse into a lavish lifestyle.
Thandar Shwe and army major Zaw Phyo Win actually married in July, but the video has only recently come to light.

In one 10-minute clip, now on the internet site YouTube, the couple pour large quantities of champagne and stand before an ornate, golden bridal bed.

Thandar Shwe is shown draped in what appear to be expensive jewels.

The newly-weds were reportedly given $50m-worth of wedding gifts, including, cars jewellery and houses.

Most Burmese will not see the video, since internet use inside the repressive country is restricted.

But some of those who have seen the video, both inside and outside Burma, viewed the wedding as a tasteless extravagance in an otherwise poverty-stricken nation.


I especially like the remark about the "golden bridal bed"!

FlatlinerLittle jewel#14891611/2/06; 09:53:20

Jewelry company stockpiles gold, hedges risk

An affiliate of State-run Bank for Agriculture and Rural Development (Agribank) has obtained the go-ahead from the central bank to import 1,500 kg of gold reserves to shield against price fluctuations.

The Agribank Jewelry Company (AJC) will purchase the gold via overseas accounts at foreign banks under future contracts and the bank branches are to facilitate transactions.

The move comes after the State Bank of Vietnam licensed the Phuong Nam (Southern) Commercial Joint Stock Bank to import 1,500 kg of gold, meeting the forecast mounting demand for gold on the local market towards the year's end.

Domestic gold prices Tuesday stayed unchanged to close VND11.8 million (US$737) per tael (1.25 oz), an increase by VND20,000 ($1.25) compared to late last week.

Local gold demand in the first nine months grew 9.4 percent year-on-year to 58 tons, according to the Vietnam Gold Business Association.

Of the figure, 41 tons was for gold bars, an increase of 24 percent from a year earlier, with the balance of demand for jewelry.

The Saigon Jewelry Co (SJC) said it rolled out 42.5 tons of gold bars to the market in the January-September, compared to 30 tons in all of last year.

The company has installed an additional gold ingot production line to raise its gold ingot output around 9,000 taels per day from the current capacity of 6,800 taels.

It planned to invest in equipment to increase its output to 10,000 taels per day by the year's end.

The Vietnamese gold association is considering a plan to develop the gold market during 2006-10 under which a gold transaction center, and a gold, silver and gemstone examination center will be set up to limit risks and stabilize market prices.

The Gold Transaction Center, set to commence next year, would define the price of gold, regulating the market.

Flatliner - every once in a while we see an article posted here where some bank puts on a big show with regards to coin count, but the weight volume doesn't really amount to much. Here, 58 tons/9 months is almost 6 1/2 tons per month. I've never heard of this Jewelry company before, but it looks like they've been given the ok to import more of this yellow stuff and they don't report in currency equivalents, but rather weight.

ArmageddonIs this the big ONE?#14891711/2/06; 10:31:26

Gold expert Chris Laird seems to be changing his tune about near term deflation and a lower gold price of $500-$550 by December if I correctly read his latest article.

He says in his latest article that

"you will not be as focused on the recent gold volatility. Rather, you will make sure your gold safety net is set up well according to your financial requirements."

I wouldn't be surprised if gold reaches $5,000 or even $50,000 per ounce by the end of the year. A dollar crisis because of a severely slowing American economy would be the reason for this. The bottom line is that the only reason foreign cental banks are supporting the dollar is to gain a trade advantage by selling their inexpensive goods and services to a "rich" American economy. When the American economy is no longer "rich" the support by foreign central banks will stop. I just read another article on CNN Money yesterday about another 1.5 million American jobs in administration at fortune 500 companies at risk of being offshored in the next few years which means the "rich" American consumer base will be further destroyed.

The recent gold price action engineered by Paulson and the Working Group where the gold price was first forced down as much as possible then in the last week or so of the election the gold price is creeping back up while the attention of the main stream press is looking at the congressional election. This is another reason to think this is the big One... Of course no one really knows for sure I think that is the point of Laird's article which I am still reading through.

Armageddon@USAGOLD - GOLD COIN SPECIALS#14891811/2/06; 11:00:25

I hope the next time USAGOLD holds a gold coin flash special that there is either a limit to how many a single person can purchase so that others can get a change to purchase these coins especially if they are real bargins like the last special which sold out in just 5 minutes.
GoldiloxUp into the close#14891911/2/06; 11:01:28

Nice rise today.
Flatliner@Armageddon's big ONE#14892011/2/06; 11:56:43

Unlikely. Why? Because no government in the world wants to give up its right to create currency out of thin air and central banks are the tools used to do this. Central banks are a collective group that will not stand by to watch gold gain status - if there is anything they can do about it. They will defend this right to the death.

Gold is the friend for individuals that stand for honest financial dealings. Anyone that takes a stand to own physical gold has exercised the best tool in the world to take a stand against the central banking system and those that use it to control the world.

The current system will continue on it's marry way until enough individuals (that save) around the world choose gold rather than currencies to store their wealth.

Continue to talk to everyone that you know about gold. He who holds the gold - holds the power. Until people wake up to realize that all forms of investment grade gold (read – paper gold derivatives) serves as real gold in the fight to centralize power, we will all continue to suffer the injustice that has prevailed for years. The only way to regain that control is to NOT give up on your claim to rightfully own physical gold.

TopazThe BIG one!#14892111/2/06; 12:33:50

Gee, you've got to consider it.
Look at these markets, it's as if several (Ag, Bonds, SM's generally) have hit a glass ceiling and although they WANT to go UP, rationality is keeping them in check.
If one blows out I think they ALL will for a time ...then REALITY will bite ...HARD!

TopazAll Currency PoG.#14892211/2/06; 12:45:03

Well, the intention in the latter stages of Oct was to re-establish Gold as an anti-Buck Barometer. Things have certainly soured now as is evidenced by the accompanying Chart where we see PoG running amok in all Pig-dog Fiat. Look at the $A ...puss on a stick.
To all those PigDogs out there, my humblest apologies!

Armageddon@Flatliner - My Big ONE#14892311/2/06; 13:26:38

While I agree that central banks want the ability to print their own fiat currency that does not mean they all would be willing to support the American dollar during a crisis. My point was that we might be heading into a dollar crisis that would raise the price of gold in dollar terms not neccessarily in Euro terms. Central banks might actually try to flee out of dollars into Euros.
Sierra MadreMy TWO BITS....#14892411/2/06; 14:35:20

Well, I know only ONE thing for sure. Gold will keep on going up, with ups and downs, but UP, for many years. Longer than I expect to live.

Another thing I know for sure: if some of us are around to see it happen, when the gold price goes into many thousands of any currency you like, then we shall be thinking (again, if we are still around): "Why didn't I think of that before? Obviously, IT had to happen THAT WAY. It was logically perfectly clear THAT had to happen."

Benefit of hindsight.


Flatliner@Armageddon#14892511/2/06; 14:39:02

Anything's possible. Lots of things are improbable.

As long as people differ their right to own physical property to someone else, we will have the status quo. This holds for any collapse or series of collapses. If an ‘issue’ that arises can be papered over, it will be. At the same time, why would a central bank or government want to create a problem big enough to cause people to run to the only alternative available? If people do, the power granted through paper currency will be very hard to find as metals take center stage.

The frog to be boiled speaks every language around the world.

Thoreauly@ Flatliner#14892611/2/06; 14:57:23

"If an ‘issue’ that arises can be papered over, it will be."

Indeed it will, but we are living through a time that is unique in human history, as the world's 35-year-old experiment in irredeemable paper money creates imbalances so enormous that a Nash equilibrium, whereby "an ideal financial strategy for everyone on Earth is to buy as much gold and silver as they can, as soon as possible" (see link), is fast approaching.

TownCrierDemocrats warn U.S. debt could trigger crisis#14892711/2/06; 15:06:17

WASHINGTON, Nov 2 (Reuters) - Democratic lawmakers warned on Thursday that U.S. reliance on foreign countries to purchase U.S. debt could lead to a financial crisis as they faulted the Bush administration's economic stewardship.

"If the United States does not begin to take steps to reduce its unsustainable dependence on foreign borrowing in an orderly way, there could be a run on the dollar that could precipitate an international finance crisis and a sharp increase in interest rates," a report issued by Democrats on the congressional Joint Economic Committee and House of Representatives Financial Services Committee said.

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

Does the nature of this report mean that 50% of our population (i.e., those with Dem affiliation) will now begin to open their thoughts to the possibility of currency troubles?

Saddly, sometimes it seems that many people in this country don't want to consider the possibility of something until their party tells them what to think on the matter. So if political sniping is what brings things to light and mobilizes half the population, how, then, can the population as a whole become somewhat self-reliant and prepared for the things that may someday threaten them from those political consensus regions of common ground?

In other words, what voice will ever be heard as credible when it warns about the various threats to the "core" customs, ways and means that BOTH parties agree upon as the very building blocks of Americana?

Sometimes, the most responsible thing you can do as a citizen is to listen to your gut instinct as a frail human being on the face of a random planet. If the nature of your lifeline -- that is, your savings -- seems flimsy, then alter your custom and choose something a little more tangible and secure. If more people acted with responsible independence, the very foundations of society would be made all the better.


Flatliner@Thoreauly#14892811/2/06; 15:11:51

Looks interesting – and long. I'm sure it will be worth reading.

It seems that the advice in the opening might be less then helpful. This gonzo economist writes "To oversimplify wildly, the reason to buy gold and silver is just that everyone else should buy gold and silver, too. There are two reasons to do it as soon as possible.

One is that anyone with an investment account can move money into gold and silver with a few mouse clicks. They trade on the US markets as the stock symbols GLD and SLV.

Two is that once this information becomes widely understood, US and probably global financial markets will be closed."

As we have all learned by viewing The Dark Side of the Looking Glass, FTDs allow for the shares issued against trusts to be fractualized (don't know if that's a real word, but think fractural reserve lending). A mad rush to these derivatives will not cause a short squeeze on gold. It will just cause FTDs.

But, I will hold out hope and read on.

Thoreauly@ TownCrier#14892911/2/06; 15:51:18

"The Democratic report, released by Sen. Jack Reed of Rhode Island and Reps. Carolyn Maloney of New York and Barney Frank of Massachusetts, said foreign ownership of outstanding U.S. debt had jumped to 42.1 percent from just 4.7 percent over the past 40 years."

In other words, both parties are to blame, so expect nothing but finger-pointing as the iceberg approaches.

In Gold (and Silver) We Trust.

USAGOLD Daily Market ReportPage Update!#14893011/2/06; 16:19:47">
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

November 2 (from Reuters, DowJones) -- Gold futures rose above $625 an ounce for the first time in two months on Thursday as investors and speculators competed to buy, spurred on by the break of certain chart levels and a soft dollar.

Gold futures are up almost $52 since starting to rally on Oct. 24 from $576 an ounce, catalyzed by a break above the downward sloping trendline from the 26-year highs in May. [see graph at yesterday's Forum]

"Everybody is turning bullish after that," a bullion trader said. "It's technicals and good investment money coming into this market."

The December COMEX gold contract rose $8.50 to settle at $627.80. It opened slightly lower, pausing from Wednesday's rally, then, from a low of $616.50, reached $628.30 in open outcry trade, the highest price since Sept. 8.

"The fact is that (U.S.) labor costs are at 24-year highs, meaning that there is inflation built into the system, and when it is built into labor it is seen as the beginning of the biggest escalation of inflation," said Tom O'Brien, analyst and publisher of The Gold Report.

Pressure on the dollar was reinforced Thursday when news that September factory orders rose 2.1 percent, less than the 4.0 percent rise expected, dovetailed with a report that business productivity growth stalled in the third quarter.

But the influence of the dollar was secondary to the technical buying. "I don't think it's hurting, but I don't think its the reason why we started," the bullion trader said.

Gold built enough upward momentum this week to break its correlation with NYMEX crude oil, which fell another 83 cents on doubts that OPEC can deliver on a planned production cut.

Some of the investor money leaving the energy market has been directed to gold.

Gold's acceleration higher this week also came as the Dow Jones industrial stock average pulled back from last week's record high. "I think there may be a little bit of asset reallocation going on," said Bill O'Neill, of commodity consultants LOGIC Advisors. "Some of these equity longs are seeing the stock market a little long in the tooth for now and doing a little bit of switching over."

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

TownCrierBuy gold regularly, like clockwork, and it will treat you right#14893111/2/06; 17:05:22

There are some people (and personality types) that I know who get themselves so wrapped up in market timing issues that they spend a lot of their time on the sidelines after a sudden move makes them think they've missed out. These people would do better if they could suspend their rear-view-mirror tendencies and just ACT whenever they find that they have the power to do so.

Without any attempt at market timing, an assortment of randomly placed gold purchases would have been netted at the average price for each year, yielding these following results...

Did you know that the average price for gold during all of 2005 was $444.50? So, on average, the gold bought randomly throughout that year and held to this present time would right now be be up 40%. That's arguably much better performance than would be had being on the sidelines.

In case you want to do your own calculations, here are the average prices for the years following the turn of the millennia -- the new mellennia for gold.

Average price for 2001 was $271.00

Average price for 2002 was $310.00

Average price for 2003 was $363.50

Average price for 2004 was $409.25

Average price for 2005 was $444.50

The average price thus far for 2006 has been $599.50

All rational signs are that the average price for 2007 will be yet higher. So if, indeed, you happen to be the market-timing personality, maybe a good strategy to help get you off of dead center and ACT is to recognize that making purchases this year will likely be better priced than most of the dips you might hope to nail next year. And it'll be a lot less effort and stress.

And when it comes to making the acquisition, USAGOLD-Centennial consistently has rock-bottom prices available on day to day products of gold coins and bullion. Yet, there's always that someone in the crowd who calls in and expends great energy trying to haggle down the market price.

My helpful suggestions for that person remain the same, "Look, if you wanted to buy this item at a dollar cheaper, you should've called yesterday."

Again, it is very easy to talk yourself into staying on the sidelines, always hoping to be handed a better bargain. Therefore, use whatever countermeasure of rationale necessary to ensure that that doesn't happen to you.

Year by year, you'll be all the more glad you finally became a gold owner. Keep at it, regularly, like clockwork.


TownCrierCopper may spike to a record $12,000 next year, says Credit Suisse#14893211/2/06; 17:46:30

Nov. 2 (Bloomberg) -- Copper may ``spike'' to a record $12,000 a metric ton next year, said Credit Suisse Group, which correctly forecast in 2005 that prices would rise to $8,000.

Labor disputes and other disruptions at mines may curb supply next year, said Credit Suisse analysts led by Jeremy Gray in London. Strikes, a rockfall and lower-than-expected mine recoveries have lost 476,000 tons of production so far in 2006, Gray said in an e-mailed report today.

``One of the themes that has dogged the industry for four years is supply disruptions,'' Gray said. ``Going into 2007, we believe there is another 642,000 tons at risk.''

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

For perspective on quantity and rarity, the merely marginal production quantity of 642,000 tons that CS deems to be "at risk" during 2007 is by itself four-times the weight of all the gold that has ever been gathered in the history of the world.

And though gold being rare as it is, contributions to newly produced annual gold supply comes as a by-product of copper mining in amounts that are not an insignificant proportion of gold's 2,500 tonne annual total.

Can you imagine a world in which, all things considered, copper prices climb 50% next year but gold prices do not?

Going back to the article,

----Growth in China probably will create a supply shortfall of 252,000 tons next year, Credit Suisse said. Assuming a U.S. housing slowdown wipes out 200,000 tons of potential copper demand, the deficit would be 52,000 tons, the bank added.
India, whose population of 1 billion is close to that of China, may add to demand growth as it increases spending on infrastructure and construction, Credit Suisse said. Currently the South Asian nation consumes 3 percent of global copper.
"India could represent up to 8 percent of global demand within five years as its $350 billion infrastructure program gathers pace," the analysts said.----

It is good to see significant portions of the world climb out of ThirdWorld/developing nation status. And with that in mind, it is certainly no world that I know of where advances in general economic development and infrastructure are not accompanied by an associated appetite for gold among the advancing populace in question.

How successfully will paper gold scheme be able to satiate their demand, as is largely done in the Western financial system? And when the papergold is expanded to failure, you will wake up in a world in which you shall realize you had no grasp for the latent disparity in the valuation of promises and of metal when hidden by this current perioud of availability at the same low price.

Given the choice, go for the tangibles and actually get more than you're paying for.


White HillsVoting Msg# 148894#14893311/2/06; 18:04:17

SIR Armageddon. The electronic voting machines may indeed be leaning towards the Republicans, However there is absolutly no doubt who the dead in New York and Chicago have and at this hour( via absentee ballots) are voting for in these Democrate controlled towns. White Hills
The Invisible Handnationalism#14893411/2/06; 19:22:31

Now that the US dollar is toast,
it may be a good time to discuss nationalism before this audience.
Let me try to give some views of nationalism.

First, nationalism would have positive values of great importance. In addition to its familiar role in the liberation of nations, it has often provided the motivation for unified action by the people of a state toward praiseworthy objectives. It would have been a significant force in promoting representative government. In brief, one might say that, by supplementing compulsion, self-interest, moral obligation, religious duty, and other forces, nationalism has added enormously to the constructive potentialities of modern states.
Second, it must be admitted that nationalism has often gone beserk in both domestic and foreign policies.
Third, one must recognize and accept the indisputable fact that nationalism, whatever its virtues and viciousness, is so deeply implanted in the minds of men that it is a major force to be reckoned with in all our hopes and blueprints for a more perfect world.
Finally, nationalism has heretofore performed vital functions, and it neither can nor should be obliterated until the functions are no longer needed, or until some better mechanism has been devised to carry out the functions that are still deemed essential.
(Palmer and Perkins, "International Relations", 1957, 2nd ed., pp. 803-804).

Here's Karl Popper in note 7 to Chapter 9 of Volume I of the Open Society, p. 288 of the Princeton UP, 1966 fifth revised ed.:
The attempt to find some ‘natural’ boundaries for states, and accordingly, to look upon the state as a ‘natural’ unit, leads to the "principle of the national state" and to romantic fictions of nationalism, racialism and tribalism. But this principle is not ‘natural’, and the idea that there exist natural units like nations, or linguistic or racial groups, is entirely fictitious. Here, if anywhere, we should learn from history; for since the dawn of history, men have been continually mixed, unified, broken up, and mixed again; and this cannot be undone, even if it were desirable.

Goldstein and Pevehouse, "International Relations 2006-2007 edition" p. 32
Many people consider nationalism – devotion to the interests of one nation – to be the most important force in world politics in the past two centuries. A nation is a population that shares an identity, usually including a language and culture.

Who's man? Does she need group-stability? Or power-stability? Power of the gold-standard or of the dollar-standard? Power of America, Russia or China?

Ten BearsScattershooting while wondering what happened to Mr. Gresham#14893511/2/06; 19:28:49
"Best Quotes"
Doug Noland, Prudent Bear
"The dilemma that emerges from the remediation of one Bubble with another (bigger one) is multifaceted. For one, it fosters an overwhelming profit motive/speculative bias that evolves over time to permeate all asset markets. Second, it accommodates and eventually firmly ingrains a Financial Structure (i.e. the powerful GSEs, Wall Street firms, hedge funds, derivatives, securitization markets, "structured finance," bank real estate lending, etc.) that propagates asset inflation and Bubbles (U.S. bonds 1993, emerging markets 1993-1997, technology, stocks, bonds again, housing, etc. thereafter). Third, an aggressively expanding Financial Sector and attendant securities markets inflation guarantee a self-reinforcing escalation in financial leveraging, instigating Monetary Processes whereby speculative positions over time play an increasingly instrumental (if largely unrecognized) role in system liquidity conditions. Fourth, when a central bank actively induces leveraged speculation as an expedient policy mechanism for system stimulation/inflation – as it clearly did in 2002 – it will not easily divorce itself from obliging a small but powerful cross-section of society. Fifth, as we're now witnessing with housing, policies that incite serial Bubbles ensure inherent fragility that inevitably traps policymakers in an overly accommodative posture."
Lyndon LaRouche
Foolish Americans today, thus seek the cause of our afflictions from without, when, in fact, the real enemy is mustered, thus, chiefly, among us, in the habits which have been induced in the unsuspecting, from within them.

(forgotten source)
"The two most important legislative acts in American history are the 1886 Santa Clara decision humanizing corporations, and the 1913 Federal Reserve scam, which permanently stole the hard-earned money of every American — in perpetuity."
There are those who cannot or will not believe, or perhaps attempt to conceal, the fact that the differences are so great between the powers vested in corporate individuals, verses natural individuals that no level playing field can ever be achieved without powerful organizations to represent natural individuals
The last president who promised to be a voice for the "unrepresented" was assassinated in Dallas. This email address is being protected from spambots. You need JavaScript enabled to view it.
"Common in China, Kickbacks Create Trouble for U.S. Companies at Home."
While Congressmen take bribes with impunity(and call them contributions) US law forbids bribes to foreign companies.
And insurance companies give kickbacks to doctors for discharging patients from hospitals early. No complaints from US law on that point.

Catherine Austin Fitts "The supremacy of the central banking-warfare investment model that has ruled our planet for the last 500 years depends on being able to combine the high margin profits of organized crime with the low cost of capital and liquidity that comes with governmental authority and popular faith in the rule of law. In short, transparency blows the game and cannot be allowed. No expense will be spared to insure that the insiders — at the expense of the outsiders — control financial data. As Nicholas Negroponte, founding Chairman of the MIT Media Lab, once said, "In a digital age, data about money is worth more than money"
It is impossible to have a legitimate democracy or a constitutional government in the US as long as a privately owned cartel controls the creation and distribution of the money supply.
Financial corporations sucking the life out of industrial corporations and pension funds too!

Leveraged Debt' "Crisis Menaces Banks, Pensions, Auto Plants" by Paul Gallagher

White HillsIts all about liquidity Msg#148910#14893611/2/06; 19:55:06

Sir Melda Laure,I only posted the end of the article, because of its length, showing the results of the attack. The following gives more details "At 0723 Hawaii time on the 67th Anniversary of the Pearl Harbor attack three old fishing trawlers, about 100 miles apart, and each about 300 miles off the east coast, launched six small cruise missiles from launch tubes that could be dismantled and stored in the holds under ice, or fish, and set up in less than an hour. The missiles were launched at precisely one minute intervals. As soon as each boat had launched its pair, the skeleton crew began to abandon ship into a fast rubber inflatable. The captain was last off, and just before going overboard started the timer on the scuttling charges. Fifteen minutes later and ten miles away, each crew was going up the nets into a small freighter or tanker of Moroccan or Liberian registry, where each man was issued new identification as ship's crew. The rubber inflatables were shot and sunk, and just about then charges in the bilges of each of the three trawlers blew the hulls out, and they sank with no one on board and no distress signals in less than two minutes.

The missiles had been built in a joint operation by North Korea and Iran, and tested in Iran, so they would not have to overfly any other country. The small nuclear warheads had only been tested deep underground. The GPS guidance and detonating systems had worked perfectly, after a few corrections. They flew fifty feet above sea level, and 500 feet above ground level on the last leg of the trip, using computers and terrain data modified from open market technology and flight directors, autopilots, adapted from commercial aviation units. They would adjust speed to arrive on target at specific times and altitudes, and detonate upon reaching the programmed GPS coordinates. They were not as adaptable and intelligent as American cruise missiles, but they did not need to be. Not for this mission.

They were small, less than twenty feet long, and only 18 inches in diameter, powered by small, quiet, fuel-efficient, high-bypass turbofans, and painted in a mottled light blue and light gray ghost camouflage. Cruising at 600 knots, just below the speed of sound, they were nearly impossible to see or hear. They came in under the radar until they reached the coast. After that they were lost in the ground clutter. Nobody saw it coming.

At precisely 0753, Hawaii time, 1353 in the District of Columbia, sixty-seven years to the minute after the Pearl Harbor attack began, the first of six missiles to hit the Washington area exploded in a huge white burst of nuclear fire just 500 feet above the White House, which disappeared in a mist of powdered plaster and stone, concrete and steel. President Bush and President-Elect Clinton had been meeting with Condoleeza Rice and Mrs. Clinton's national security adviser, reviewing the latest National Security Estimate, when they instantaneously turned into a plasma of the atomic elements that had once been human beings. No trace remained.

Alarms immediately began going off all over Washington, and precisely one minute later the second missile exploded just as it struck the Capital dome, instantly turning thousands of tons of granite that had one moment before been the nation's center of government into thousands of tons of granite shrapnel that shredded several square miles of Washington like a leviathan Claymore mine. At precisely one minute intervals, four more 3 kiloton nuclear weapons exploded at an altitude of 500 feet AGL above the Pentagon, the CIA headquarters, the NSA headquarters, the FBI headquarters, all of which were fully staffed in the middle of the day. In five minutes, the government of the United States of America was decapitated, and a quarter million of the people who made the place run were dead, or dying, or had simply disappeared.

Also at 1353 Eastern time, a missIle had blown off just above the New York Stock Exchange, in New York City,and thousands of years of collective financial knowledge and experience evaporated in the nuclear flame. In one minute intervals, others had hit the financial centers of Boston and Baltimore, and the Naval base at Norfolk, Virginia.

Simultaneously, within the same 10-minute window of hell, nuclear tipped cruise missiles devastated the largest intermodal shipping facility on the West coast at San Pedro harbor, exploded just above the Library Tower in central Los Angeles, and short circuited the computer technology ghetto of Silicon Valley in Santa Clara County, big time. One exploded ten feet away from the top of the Bank of America Building in San Francisco and set much of the east slope of the city ablaze. Another giant fireball flared among the phalanx of office towers along the Capitol Mall in Sacramento, instantly obliterating Arnold Schwarzenegger and the state government of California, the largest state economy in the US, the seventh largest economy in the world. Two ripped open the heart of Portland, Oregon, one shattered the financial district of Seattle, and the last one turned the Microsoft campus into a pillar of fire and smoke, wiping from the face of history, in a second, the IT giant that had revolutionized global communications" This part of the article shows the attack itself. The remaining first part of the article shows all the reasons for the attack and its success. I think this kind of attack would certainly produce the results that are depicted in the article. White Hills

Sierra MadreA foreboding...#14893711/2/06; 21:44:52

The price of gold seems to be fading at this hour.

On too many previous occasions, this has heralded a vigorous attack on the price.

It would not suprise me to see gold smashed down, once again, to $587 for the Friday close.

In spite of all this, and however long it may continue to be thus, the market will not be controlled forever, nor will the World be weaned from gold. All this is doing, is providing excellent opportunities for Asian buyers - perhaps a few Westerners, too - to pick up what the West, particularly the USA money power, is trashing.


contrarianThe Vilest Instutituon Known to Man#14893811/2/06; 23:03:54

Ten Bears--thank you for your contributions...there surely cannot be a viler instution than that filthy Creature from Jekyll Island...the "federal" you know what, which nurses the evil military/industrial complex, foments and enables needless wars that maim and kill, and gradually and insidiuosly robs people of their savings via inflation, in addition to invisibly taxing the rest of the world...not to mention its illegitimate half-sister, the internal you know what (that should be flushed along with the Creature)
Topaz@Sierra.#14893911/3/06; 00:04:44

You might be right but I'd be more inclined to lean the other way, at least for a week or two.
If you pull out Comex trading since the monthly rollover in isolation you'll find ALL the uptick coming from NY ...and the rest flat-down.
Comex active is Dec Futures, so they don't give a hoot at present and are longing it just for the exercise imo. Probably trying to keep a lid on el Bucko.

melda laureThe dollar, our beloved tar-baby.#14894011/3/06; 00:43:42

The problem for the US is the foundations of the house are already rotten, and they are at risk of collapse on their own. What keeps it all up? The magic of the tar baby of course.

This one observation, simple to grasp as it is, points to another demand for fiat currency that did not exist when hard money thought was first built.., has helped absorb most of this extra printing... gave a use to worthless digital transactions and helped build a value that didn't exist in fiat currency before. This effect had to be real, because the world took in every last dollar that was printed and didn't dump them off to buy other real assets....

In recent society's demonstrated use of unbacked fiat currency, they were advancing a trend to use currency in trade only; while owning wealth assets outside the known money context. As society advanced and trading volumes mushroomed, the need for more digital units increased more so from their trading function than their value retaining function.

Technically reserves aren't needed to clear international trade (according to Dr Feteke: The Merchants of Seville) which rather makes me wonder if there isn't some little detail hidding in FOA's comment:

How does the system replace the clearing center (lots of volunteers for that job!)

and How do the participants replace their "digital trade units"?

Sadly, freegold will not mean the end Banksterism, but perhaps they too need some touchstone of reality.

In one [phrase], Kondratiev's long-wave cycle is the manifestation of the fluctuation in the propensity to hoard....By letting the saver withdraw the gold coin (read: bank reserves) when the rate of interest falls to a level he considers unacceptable, the irresistible speculative money-flow to-and-fro between the commodity and bond markets - the engine of inflationary and deflationary spirals - would be shut down at source. Benign bond/gold arbitrage would replace the malignant bond/commodity speculation. Since the former is self-limiting while the latter is self-aggravating, economic stability would be enhanced.

[The consequences of unbridled fiat] is too horrible to contemplate. Unemployment more devastating than that of the 1930's, an earthquake shaking the international monetary system to its foundations, the construction of protective tariff walls and, in the end, a world war in which governments hope to find an escape route from economic chaos.

I still wonder how it will all work out, slowly I suppose. A/FOA's train is stuck in first gear. Other than bullion banking, gold hoarding appears manageable. Though I imagine its future dynamic will be more like the personal "escape route" Feteke envisions.

melda laureSpineless terrorists. Ring-envy#14894111/3/06; 00:43:50

@ WH
I am trying to resist the temptation to discuss nuclear counterterrorism. Back in the day when pap3r checks had to be "cleared" one could have achieved much by just taking out the check clearing centers.

Now it is all done on computer (the horror!).

The dollar is the worlds check clearing center; rash moves against it carry unpleasant consequences. What if foreign central bankers refused dollar payment? Of course it is a tit for tat, and that means their own dollar reserves would become useless. The key for the rest of the world is clearing, and today it is done in NY in dollars and derivatives. It might as easily be done in Paris in euro- if the participants had any euro reserves. New York is the lynchpin of the world economy. First the dollar gets killed off, then maybe someone pulls that lynchpin.

That is why procrastination via the worldwide currency bonfire is so much more popular. I am sure Mr Bin Laden wants the quicker solution (he has no electorate to face up to in his cave). I am equally sure Mr Ahmadinejad values his creature comforts too highly, and Mr Pyongyang Pompadour values the bribes he gets from foreign countries all of which would dissappear if the world economy goes poof (after all with the NPT gone, German made nukes are probably more reliable- and chinese nukes are more reliable AND cheaper).

Just a suspicion. That we would destroy the one ring and set up no dark lord over us is not an action that TPTB envision. They dont just want the dollar removed, they want their own fiat hegemony in its place.

melda laureoops.#14894211/3/06; 00:45:31

First the dollar gets killed off, then maybe someone pulls that lynchpin....

once their own necks are out of the noose.

TownCrierLBMA watchful of market review by UK authorities#14894311/3/06; 01:37:22

2 Nov 2006 -- The trading regime under which bullion markets operate in the U.K. is now being reviewed, and the London Bullion Market Association (LBMA) is working with the relevant British authorities, Association chairman Jeremy Charles said on Thursday.

"The regime under which the bullion markets operate in the UK was developed through close cooperation between the market and the authorities, primarily via discussions which we have held over the years with Her Majesty's Revenue and Customs and their predecessors."

Because current arrangements were established many years ago, and there have been considerable changes in all of London's commodity markets, UK Customs have begun reviewing key elements to establish whether legislation needs updating...

These are are complicated and, at times, difficult for many market participants to understand, he said.

"But I would like to stress that they are essential for the future health of the market and we will continue to work with HM Revenue and Customs to make sure that we have a viable basis on which to continue to develop our market," Charles said.

Charles said that the increased desire to include commodities for asset diversification had produced a wonderful opportunity for the London bullion sector. However, there has been an ever-increasing scramble to develop new markets, new exchanges and new products on a global basis.

"The establishment of these new exchanges has led to a more competitive environment and will no doubt lead to some additional participation in the market, but on the other hand this is also helping to create a globally fragmented marketplace."

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

In other words... what legislative tweaks are needed to deal with the many ways to paperize the concept of gold ownership? The choices are to open the barn door, or else to rein it in.

Three cheers for the "globally fragmented marketplace" in papergold -- the fragmentation helps limit a complete stranglehold on the price by preventing a more massive inflation of the paper substitutes as would be possible by approaching a theoretical perfection of the papergold's international fungibility. [shudder at the thought]


melda laureGold's slow train, vs the Rocketship.#14894411/3/06; 02:04:33

@ Sir TC

According to FOA, first the world found a USE for more trade digits as trade "mushroomed"

Now the world finds yet another (less creditable) use in a currency bonfire to keep unbalanced trade flowing.

Clearly, in the case of the LBMA, the proper choice is to shovel the refuse into someone else's barn. But speaking seriously, does the fragmentation have anything to do with the ability to arbitrage controlled markets with physical ones?

Todays Insouciant Parody:
Why Elves wont save the Economy.

Bilbo: I am like a captive burgler that cant escape but must keep on burgling the same house day after day. To which elves might answer "and isn't it time we pushed your barrel downstream?"

Bilbo: No- because your cave would collapse.

In this story, Bilbo and the dwarves stay locked up while the elves go and deal with old Smaug on their own. Finding the worm old and lazy, they trade some ponies for a coin or two to eventually fatten him up so much he cant leave the exit.

As the hoard is quite large, this part of the tale goes on for a couple hundred years during which a large unbalanced livestock industry grows up around Laketown until racist elven pony-lovers point out that goblins are cheaper than ponies whereupon war breaks out once the beancounters at Laketown realize that Peak Goblins has been reached and the gold is not exhausted nor the worm dead of cholesterol.

Eventually Saruman finds out that old Smaug will accept whopping big goblins in exchange for derivative gold which is a totally useless exchange, but it has the effect of ending the goblin/gold carry trade so the wood elves go back to their cave to watch over Thorin & Co, (now quite pissed off that Their Gold is in the hands of the wood elves, the lake men and several shifty eyed goblin hunters) and of course Bilbo has been wearing the ring far too long and has slowly faded and turned into an Economist. So the elves lock him up in an ivory tower somewhere, and start worring about the future in which

There's an Economist in the House with the one ring.
There's a dragon in the treasury.
They have dwarves locked up (treaty violations)
An evil wizard is feeding the dragon in exchange for paper debts.
The remaining goblins want revenge- and the elves only "enemey of our enemy" is an evil wizard.

At this point the elves repent of their "enterprising" ways and begin speaking in French: nous sommes totalments b-----! And they curse the Dwarves who can only reply that they are the captives. So the elves release them and the Dwarves crawl back to Moria where they get into a battle with Sauron's goblins who take them captive and find out it was the wood elves who put them up to the job, so now the wood elves have six problems.

Hard to say what the moral of this alternative story is, but it surely wasn't a short tale, the dragon got fat, and Bilbo never did escape. I would hesitate to assign allegorical lables as it would oversimplify a good tangled mess which is the whole point: a tangled mess.

Postscriptum: THE War eventually came, and, well, sparing you the heart rending bloodshed and heroic last stands which makes great reading except when you realize it is all hollow and for naught, en resumidai quenta, Smaug turned out to be nearly penniless, Thorin's forbears having spent the lot years before.

Of course Bilbo got squat for his pains.

TopazSorry, forgot the link in first post.#14894511/3/06; 02:10:16

Meant to highlight the Dec Futures Options where the Long side is call-ing the shots ...Good OI @ 650C, 700C and 750C at this juncture.
Theres good reason apart from Santa to look forward to Dec this year.

Suck it up Bankster Buddies!

GoldiloxInflation may have peaked: Dallas Fed's Fisher#14894611/3/06; 06:50:06


NEW YORK (MarketWatch) -- Examination of the Dallas Fed's own inflation gauge suggests that the worst news on consumer inflation may be behind us, Richard Fisher, the president of the Dallas Federal Reserve Bank, said Thursday.

"It is possible that the trend in overall consumer inflation has peaked and is finally heading lower," Fisher said in a speech to an economists group. Read full speech.

But Fisher quickly noted that the overall inflation trend remains above his "comfort zone."

Fisher said he used the Dallas Fed's Trimmed Mean PCE inflation rate, which sets aside price categories that rose and fell most sharply but does not automatically exclude food or energy prices.

The index slipped to a 1.7% annualized rate in September from 2.7% in August.

The Fed has held interest rates steady at three straight meetings after 17 consecutive rate hikes beginning in 2004. Economists are divided over whether the Fed will need to engineer more rate hikes to combat inflation or whether the next move will be a lowering of rates. Read MarketWatch's complete Fed coverage.
The bulk of Fisher's prepared remarks centered on one of his favorite themes: the growing significance of global economic factors to the Fed's policy making. He said econometric models should be globalized, so the Fed could fly "a little less blindly" in understanding international influences on the U.S. economy.

"I am encouraged by the change in direction of trend inflation," Fisher said, "and I hope that in the future my CEO and CFO contacts will be telling me that the competitive forces of globalization have kept their pricing power limited or nonexistent."

In the question-and-answer session, Fisher said that no central banks can tolerate inflation and that the key objectives for the Fed are to make sure the inflation menace doesn't get out of line and to maintain sustainable economic growth.

He said the Fed continues to use the core personal consumption expenditure index as its primary inflation measurement, although some regional banks have their own inflation-measuring tools. Fisher said rising labor costs are a concern, and he's worried about leaving core inflation above his comfort zone for too long.


Even banks are resorting to "their own" inflation tools and pooh-poohing the FED's published numbers.

DruidGold Panic Coming! (by Larry Edelson)#14894711/3/06; 08:27:09

When you've been trading the gold market for nearly 30 years like I have, you develop a sixth sense for the precious yellow metal.

You can hear it speak to you. You can feel its rhythm. You can interpret its signals. And let me tell you, gold can anticipate otherwise unforeseen events better than any other investment I know of.

Gold's recent rally back over $600 an ounce is telling me that all is not well with the world ... that a financial crisis of major proportions is about to strike. The forces that could precipitate this crisis are varied:

The stock market is now at unjustifiable levels based on earnings, dividend yields, relative strength, and more;
Real estate is in shambles;
The country's national debt is off the charts;
Economic growth is slowing;
Inflation is still picking up steam;
And the threat of another terrorist attack on U.S. soil is still an unfortunate possibility.


Druid: Pretty good read.

GoldiloxStrong Dollar - Stronger gold#14894811/3/06; 08:30:31

The pre-election rally in PoG isn't fading, no matter what they throw at it. This morning, the Comix opened strongly negative, but started catching bids around 618.

Here's a thought that may light a smile in my right-wing friend WH!

Are the traders bidding gold up because they "assume" Demo victories? After all, they may spend "differently" than Bushistas, but they still LOVE to spend.

There you go, WH. My obligatory knock on Democrats!

Go, go, gadget gold chart!

DruidDruid (11/3/06; 08:27:09MT - msg#: 148947)#14894911/3/06; 09:00:43

"Druid: Pretty good read."

Druid: Yeah, it was a pretty good read up until he started providing recommendations as to how to protect your past and present labor in the form of savings or wealth preservation. He cancels out his very own logic and historical chronology reference the "Dollar" by urging the reader to "invest" in Dollar derivatives. I mean really, back out of the derivative and where do you end up at once again? By the physical and start applying real logic.

CamelTurning gold into lead#14895011/3/06; 09:07:40


Despite record drilling activity, natural gas extraction volumes have slipped from the peak set in 2002, and output per well is now declining at an annual rate of 28%. Put another way, energy companies must add 3,000 more wells in 2007 on top of the 15,000 now in production just to keep output from diminishing.

That would be a daunting challenge even if there were spare rigs and drilling crews standing by. As it now stands, there is no spare capacity of this sort anywhere in North America.

With only eight years of proven reserves left in Canada, Hughes suspects that natural gas output is about to fall off a cliff. Barring a miracle or two, Canada will soon experience challenges in providing for its own citizens, let alone producing surplus volumes bound for American furnaces.

Sierra MadreThis curious world...#14895111/3/06; 09:22:35

I read where an oil painting by Jackson Pollock has sold for $140,000,000 dollars. (Gold is at $623/oz)

Gold at $623/oz. is roughly $20,000,000 for 1 (one) tonne of .999 gold. Works out that Pollock's paint and canvas is worth just about 7 (seven!) tonnes of .999 gold.

Oh, and the sale price probably does not include Christie's commission, which is substantial.

So this inflation we are experiencing is terrific, but apparently concentrated in a very small group who are raking off absolutely HUGE amounts of fiat, so huge that they don't know what to do with it. Only people who have so much they have lost all sense of proportion, can go around bidding up the price of - a painting by Pollock - to the equivalent of SEVEN TONNES OF GOLD.

I have a 1975 Ford Galaxie in perfect condition and will accept offers beginning at $500,000 US. No, make that $1,000,000 US.



Sierra MadreGold $627....pleasant surprise...#14895211/3/06; 10:09:41

Hmmm...Dow below 12, appears to be going up into the close, now at $627/oz

Will this mean fireworks on Monday?

"I fondly ask..."

Is the nefarious PPT just gathering up more ammo for a strike later on? Or are they folding?

Naah! Can't be. They'll be b-a-a-a-c-k! Count on it.


GoldiloxGold attacks#14895311/3/06; 10:37:25

@ Sierra Madre,

Been watching the action a little closer today. There have been a couple attacks, one at the open, and another about Noon EST. The second one was quite short-lived when some brash short had his head handed to him for about $2 an ounce in a matter of mmoents.

Yeah, they'll be back, but the force is NOT strong with them!

$630 is Sinclair's next "line in the sand", and if blows through as easily as $612, the next bus stop is the express to $650.

GoldiloxComix Close#14895411/3/06; 11:02:46

$628 - I love the smell of a "short squeeze" in the mornin'.

I guess too many people have figured out how to "read between the lines" of the Employment Report, or at least got as far as the addenda items on "under-utilized".

TopazBonds, Gold etc.#14895511/3/06; 11:46:11

Someone took a dump this AM and we'll be able to judge how resilient PaperMoney is in this climate by how well/quickly the Big Bad Bond recovers.
At the current level, the yards are harder to grab on the way up and curiously, this downturn didn't spark a selloff.

Inflation must be getting close to being referred to as the Barbarous Relic if this keeps up ...Ha!

Topaz$A PoG.#14895611/3/06; 12:00:27

Whilst we "purists" couldn't give a toss about the "price" of Gold irrespective of whatever Fiat it's measured in, theres a certain smug pleasure to be gained when Buck AND Gold pull an "in-tandem" UP day...
...and today is just one of those days.
Another thing, 5 yrs ago my Oz of Gold got me a $400 off-the-rack Suit ...Today it gets me a tailor-made-to-measure $800 Suit.
Now I know "somewhere" in the World, someone makes $50,000.00 Suits, we shall perhaps all meet in his/her fitting rooms sooner rather than later eh!

Sundeck....aaah yes, Sir Tpaz...#14895711/3/06; 12:47:53

...I need a good suit, too...perhaps I will wait a while though...

In the meantime, I never tire of marvelling at the price-action of Spot (not to mention the dollar!!).


USAGOLD Daily Market ReportPage Update!#14895811/3/06; 15:36:10">
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

November 3 (from MarketWatch) -- Gold futures closed higher Friday to end the week with a nearly 5% gain, boosted by growing tension over Iran's nuclear activities as well as strength in oil from various threats to production.

Strong U.S. employment data lifted the dollar, providing earlier pressure on gold which then limited the precious metal's gains. Gold "dipped in a knee-jerk reaction" to the employment report -- "at least until the time when news of an Iranian missile test hit the wires and sent people back to the trading pits wishing to now buy," said Kitco's investment-products analyst, Jon Nadler.

Iran reportedly continued with missile tests overnight. Tehran has started 10 days of military maneuvers across the country. The exercise comes as the United Nations continues to discuss sanctions against Iran for refusing to stop enriching uranium.

Against this backdrop, COMEX December gold futures rose by $1.40 to close at $629.20. After climbing a total of over $22 in three sessions, it ended the week 4.7%, or $28.20, above last Friday's closing level of $601.

Meanwhile, the dollar rallied against major currencies, touching one-week highs versus the yen and Swiss franc, after a government report showed the labor market is on fairly firm footing, damping expectations the Federal Reserve will lower interest rates soon. The unemployment rate fell to 4.4%, the lowest level in more than five years, the Labor Department reported Friday.

Given the rally this week in gold, most analysts still expect gold prices to reach $1,000 and beyond, though not as early as some had previously expected.

"Gold has posted a strong performance this week, signaling the return of more bullish sentiment but a period of consolidation around $612 to $625 would be healthy, avoiding an overbought retracement and ensuring the longevity of the rally," said James Moore, an analyst at TheBullionDesk.

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

melda lauresend up the reserves.#14895911/3/06; 15:40:28

Through the SEC, the Fed controls margin requirements and a recent announcement was described by the deputy director of the SEC as "a very significant change". Remember that this is essentially the same Fed and SEC that argued that no increases were needed during the late 1990s' tech mania.

Now they are talking about lowering margin requirements for institutions on stocks, options, and futures. Now ranging from 25% to 50%, the proposal is to drop them to 15%.

What this battle needs is fresh reserves! But why stop at %15? Mogambo says the banking system only has 40 billion in reserves against 5T in deposits.

Well it was not my intent to make light of the intelligence of this assemblage of illustrious luminaries, so allow me to put it as a short question:

Why don't we have freegold yet?

contrarianReducing the Margin Requirements#14896011/3/06; 15:47:13

Melda Laure--good reason for this...normally, when things are heating up, you would have the feds raising the margin requirements (so as to cool down the market)...but, according to Le Metropole Cafe, what's happening now is that a lot of the larger players (hedge funds I suppose) are feeling a lot of stresses, ergo, reduce the requirements, certainly can't bode well for the future, extending a craps game that's a sucker's rally...until the point when it suddenly comes crashing down...things go on as long as then can, until they can't (think Musical Chairs).

Whatever happens, it will be overnight. And then, like Chris Laird said, you won't be able to get gold at any price.

melda laureBut there are rules of course, we must have rules.#14896111/3/06; 17:11:57

The staff of the Securities and Exchange Commission has approved the New York Stock Exchange's application for a new type of trading account that would set requirements for using borrowed funds, called margin, based on the types and weightings of securities in the account - stocks, options and futures...

If approved by a majority of the five SEC commissioners, as is expected, the proposal would allow for margin requirements for financial institutions and hedge funds that are below current levels of as much as 50 percent - cutting trading costs. Proponents say the new system would make margin requirements more closely reflect the risks involved and make U.S. financial markets more competitive with those abroad.

So it is only those sophisticates who make structured bets utilising options or other instruments who can qualify. How eminently reasonable... this needs a closer look.

melda laureFiddling at the margins, more links.#14896211/3/06; 17:32:25

another disturbing event is that the SEC is about to loosen margin requirements that were first put in place after the Crash of 29. By reducing institutional margin requirements from as high as 50% to 15% the markets would not become more dangerous but - supposedly - more 'innovative': "The move removes a key barrier to the competitiveness of the US capital markets as similar margin rules already exist in Europe, attracting increasing numbers of hedge funds..." (FT)

I suppose this is an example of "me too" innovation. Yet still no real explanation.

A more technical discussion is to be had from an SEC speech before the SIA Options market Structure Conference.

The Commission is now considering margin rule amendments filed by the NYSE and the CBOE that would further expand the portfolio margining methodology to include all other equity products, including certain OTC derivatives. Looking further into the future, these proposed SRO rules could be coupled with a program that would permit certain firms to use INTERNAL MODELS to set margin requirements for their customers, consistent with how we have permitted the use of portfolio margining by our Consolidated Supervised Entities. Thus, we would likely examine the risk based margin methods of the firms and also focus on how they manage credit, liquidity, and funding risk as well as market risk with respect to proprietary positions.

I wonder who qualifies for this red carpet treatment?

TownCriermelda laure, "Why don't we have freegold yet?"#14896311/3/06; 17:46:49

Although I do associate with one or two who certainly are, I myself am certainly no illuminary of the likes you were seeking -- but I'll take a swing at your question none the less.

I really liked your twisted tale (msg#: 148944), by the way. Maybe I can factor some of that same instructional Hobbitty theme into my very brief comments.

As we have discussed, if any given central bank holds even a reasonably modest vault of gold reserves in conjunction with their vastly larger proportion of dollary reserves, then, upon actual institutionalization of a fully-fledged "freegold" market paradigm, the skyrocketing value of the small gold portion would provide adequate compensation for loss of paper value as the dollar inevitably loses its reserve-use status.

So, it would seem that the various foreign central banks have struck upon a very nifty and valid mechanism to maintain balance as the reserve dollar collapses -- the rising value of gold in the vault will fill the void of the depreciating value of massive dollar reserves.

But here's the rub... a very significant quantity of this CB gold supply is sitting uncomfortably on a foreign shore -- in cages within vaults deep below a particular bank in New York.

Now, you will recall that the U.S. has a notorious track record for defaulting on delivery of gold to its international trading partners. While on the Bretton Woods monetary system as originally crafted, it is undeniable that dollars (and dollar-denominated bonds) were indeed gold certificates -- by function if not in actual name. And yet when our international trade partners called in for redemption of those gold titles, President Nixon on behalf of our Treasury Department told everyone to bugger off -- we defaulted on our promise to make good on conversion and shipment of the BW dollar/gold treaty.

As a brief aside I will suggest that this will ultimately be seen in hindsight as a monetary positive. Prior to this the marketable gold value had been for nearly four decades frozen at the monetary price equivalent of 35 ever-inflating dollars. Be defaulting on delivery, Nixon initiated the first modern significant step toward the ultimate freeing of gold value from the depreciating monetary anchor. We're not there yet, but this is indeed what we are anticipating with the official rollout of "freegold" in due course.

Getting back to the main thread, the foreign central banks are keenly aware that they've already been cheated once by the refusal of the U.S. to convert their legitimate paper claims into gold to be handed over. The CBs know what it means for international paper to default on delivery, and a big part of the "freegold" paradigm is to eliminate the systemic risk of this ever happening again.

However, as indicated above, putting these paper defaults aside for a moment, the fact remains that significant CB reserves that were/are happily in the form of physical gold IS STILL SITTING very uncomfortably (effectively hostage) in cages below the Reserve Bank of New York.

Because all privileges of the current dollar-centric reserve paradigm accrue to the United States of America, it is a basic matter of protectionism that has the U.S. employing every trick in the book to maintain the status quo. The U.S. officials certainly recognize an international implementation of a freegold paradigm to be THE significant threat that it is to U.S. dollar hegemony.

For perspective, consider this: In 1971, even though it was only valued officially at $35/oz, gold was nevertheless deemed strategically significant enough that the U.S. refused to hand it over to their allies and trading partners that had earned it "fair and square".

Therefore, if the skyrocketing valuation of "freegold" is the single neat financial mechanism that will allow the world to maintain balance while at the same time shrugging off the dollar reserve hegemony, what, then, do you deem are the odds that the U.S. will willingly ship the remaining gold still caged in New York to its earmarked owners overseas?

Slim to none. The perfected idea behind MTM "freegold" reserves is that not only can they revalue as dictated by a fair market, they can also flow hither and yon as dictated by trade conditions. But, if much European gold was to forever remain effectively hostaged inside a NY bank, it sure makes the "perfection" of that whole concept a very tough sell to the international community.

Europe has surely not been blind to the fact that it is an easier (more politically tactful) task to retrieve its gold from New York under the radar screen -- calmly and within a prevailing pretense that gold as a reserve asset is not all that it's really cracked up to be. That is to say, gold *MIGHT* be able to be liberated under the insignificant airs of $250 - $650 per ounce, but you can bet your bottom dollar that it won't so easily be given over if doing so would facilitate a freegold flight to $30,000 per ounce.

This brings us back around to the instructional tale to be found in J.R.R. Tolkien's "The Hobbit". As you well know, a battle of five armies ensued, largely unnecessarily, because very much gold belonging variously to the multiple parties had been gathered up in one place (a Middle-earth "vault" called The Lonely Mountain) and guarded over by a custodian (a clever young dragon, Smaug the Golden) who (along with his successor custodians, the 13 dwarves) did not find the path to peace and prosperity in the wisdom which would have dictated a prompt demonstration of due respect for ones property rights.

With negotiations in full swing for a (two!) movie version of The Hobbit, I am ill at ease by the great likelihood that the socioeconomic message and parallels with the soon-to-be current conditions will be eerily apropos.

From petty and unjust protectionism, this can become as ugly as anything gets. Which brings us to an open plea to the Fed... without comment or fuss, SEND THE GOLD HOME!


GoldiloxTHE HIDDEN TAX#14896411/3/06; 18:08:42


Like everyone else, we are sick of hearing commercials on every possible medium lauding the voting record of one politician and smearing the name of whoever the opposition happens to be. What we continue to find amazing is how this election campaign is being run on a host of non-issues at least from a fiscal sense.

We're told to vote for so-and-so because they will increase benefits, programs and the like - and at the same time keep the tax cuts permanent! Their financial calculators must work differently than ours, that's for sure. Maybe it's the batteries. In any case, it is high time this fraud was laid bare for exactly what it is.

There are three and only three ways a government can obtain money. It can tax the population, steal it, or print it. Since for the last 6 or so years we've heard about nothing but tax cuts, and at the same time government spending has gone through the roof, it must be that either the government is stealing the money (which may be true) or are printing it. Government officials will be quick to tell us how corporate taxes have made up for a lot of that spending. Which brings up another thinly veiled fraud: Corporations do not pay taxes.

Period. Any increase in taxes to corporations simply gets tacked onto the cost of their products to maintain their margins. The consumer pays all taxes. Even with the increase in 'corporate taxes', we are still running a gross shortfall at virtually every level of government. This is the Keynesian equivalent of 'Student Body Left'; lower taxes, ramp up spending and fire up the printing presses.

People generally understand taxes, but tolerate them mostly because they never see the money anyway. It has been proven time and time again that we don't miss what we never had. Which brings us to the other two options. The money could be stolen and that might work for a while, but we don't believe that is what's going in America. We firmly believe the government's position is that it can print enough money to keep everyone happy, create inflation, then lie about the cause of inflation and blame consumers and oil companies for increases in price levels. By executing this strategy, inflation will sap away purchasing power the government would never be able to take via taxes.

In case anyone doubts this, look at the loss of purchasing power in the dollar over the past 75 years and then take a look at money supply and GDP numbers. Money supply growth has outstripped GDP growth for decades, which means this excess money was created essentially from thin air. A gold standard would have prevented this since our fairly stagnant economy would not have allowed us to accumulate more gold thereby preventing the printing of more currency. However, we have chosen to import rather than export, borrow rather than save, and therefore the gold standard is no longer an option.

We love a good conspiracy as much as the next guy. Much has been made in contrarian circles about the fact that the Fed is no longer publishing the M3 money stock numbers. They told us they wanted to save the taxpayers money and it cost too much to tabulate the numbers and they weren't useful anyway. There is, however, another distinct

possibility: The real inflation is about to begin and the Fed et al want to make sure that it happens in relative obscurity. Purchasing power indeed may become like sand in our hands. No matter how hard we squeeze we just can't seem to hang on to it.

As we near yet another election, nary a whimper of the hidden tax has made it into the mainstream. Is it the most important issue? That is up to individuals to decide. Our goal is for the average person to at least be aware it exists. Incidentally, neither political party has the intestinal fortitude to fix this problem. Fixing it would almost certainly require admitting that it existed to begin with, and once people realize how they have been robbed, well, it just wouldn't be cool to be a politician anymore.

Clink!The other white metal#14896511/3/06; 18:34:12

Taking a snapshot of the last month in gold, prices have been moving up slowly but surely, from $560ish to today's $625. That's around a 12% increase over 30 days. Compare that to platinum. Over the same period it has been as flat as a pancake and suddenly, yesterday, went from $1094 to $1151, and then today, after a flirt with $1220, ended up at $1200 even. Almost 10% in TWO DAYS ??!!! Think someone's being badly squeezed in the shorts ?


MKThurow, the dollar and a hiccup. . .maybe. . .but no more than that#14896611/3/06; 19:10:40

The current movement in the gold price, in my opinion, has less to do with the election than it does the rumblings from China and the Gulf on the future composition of their central bank reserves. And by that, I do not mean to diminish the importance of the upcoming election. Get out and vote!

I keep coming back to this highly insightful comment as published in Der Spiegel (and thank Randy for posting at the DMR page): "Lester Thurow, a member of Clinton's commission, draws the sober conclusion that no one will believe the US balance of trade could produce a crisis "until it happens."

(Aside: If you are new to gold and wanted to know the value of this website as well as the factors driving the gold market, some time spent at the Daily Market Report would provide solid grounding.)

The point I'm trying to make is that the forces behind the current gold market are not going to dissemble as of Tuesday, November 7. How many of us really care if we get socialism at 70 mph as opposed to socialism at 55mph? As for Iraq, it may be an issue for most of us, but the Democrats for all intents and purposes have taken it off the table. November 8 -- no matter the outcome -- will be business as usual for the gold market with perhaps a slight hiccup or two. . . .

I keep coming back to that Lester Thurow comment.

contrarianLowering the Margins#14896711/3/06; 19:27:28

"Lowering the margin rate means giving the huge players LOTS more money to play with, certainly. But it also--perhaps more importantly--means they've been given lots more breathing-room on their margin calls.

And I suspect that's the principle reason for the move. If hedge funds are facing margin calls that means they're being forced into a position where they have to sell, and time and again that's the recipe for a market crash, as the margin calls beget selling which begets more margin calls and more selling.

This is absolutely a desperation move, no doubt about it. Coupled with the uncloseting and knighting of the PPT--which is nothing more than an officially sponsored market-manipulation group--it sounds a strong signal that something is very wrong.

What a strange world our markets have become when indexes can hit new highs and there is such wide-eyed desperation in the ranks that they're resorting to changing the rules to keep things going. Of course, keep in mind that a host of smart people have been saying that the markets have been playing against a "house edge" for several years now, and many old-timers have left the game altogether."

contrarianReason for Platinum Surge#14896811/3/06; 19:36:15

"Nov. 3 (LONDON) -- Platinum jumped the most in five years in London on speculation that an exchange-traded fund linked to the price of the precious metal may be introduced.

ETFs purchase and store metal, allowing investors to trade the assets without owning them. Silver had its biggest jump in 11 years on April 28 when Barclays Plc began offering a silver- backed ETF. Platinum rose partly on bets the fund may boost demand for platinum among retail investors, said James Moore, a precious-metals analyst at in Kettering, U.K.

``There's speculation a platinum ETF is being launched,'' Moore, said. Investors are ``bidding it up aggressively and will get out once the contract is launched.''

Platinum for immediate delivery rose 2.1 percent to $1,181 an ounce as of 1:03 p.m. in London. Earlier it gained as much as $62.50, or 5.4 percent, to $1,219.50. That was the biggest intraday gain since Oct. 3, 2001.

The metal, used in jewelry and car catalysts, traded at a record $1,340 on May 12."

melda laureMTM or MTLVC? (Mark to Local Vault Contents)#14896911/3/06; 20:09:32

Well thank you for your illuminating reply. Rather like Frodo being lectured by Gandy, it's hardly comforting news at all.

Mind you I'm not displeased at the slower pace of the rollout as it has been "profitable" thus far (that is to say, in ounces). In any event, why should I care, elves are immortal.

Without comment or fuss eh? We will get a good deal of both. W.W.I.D? What would Isildur do? Indeed, is the situation re:Iran and its swiss bankers any different? (answer yes: The swiss have a much smaller army.) However this does point up a research topic to pursue: what percentage of european reserves are locked up in the Lonely Bank Vault? Perhaps an acceptable loss at some point? Thanks to the WOT, it is doubtful that any islamic nation would swap swiss held gold for FED held gold (or any other foreign custodian for that) thereby closing one repatriation mechanism. Indeed, when "allied" governments no longer consider each other trustworthy, why should the little guy?

TownCrier"Without comment or fuss"... one must always offer repatriation assistance#14897011/3/06; 20:45:41

It's a matter of taking (or maintaining) the "high road". (Moral high ground -ish).

Here's a perfect and very personal case in point. Out of a long train of circumstances on both sides of the equation (access to secure vaulting not the least consideration) I found myself put into the role of custodian for the precious gold holdings of one of my lifelong friends.

Now, if ANYone within 1000' of me knows "what time of day it is", I submit to you that I am that person. And being that person carries a certain weight of responsibility to go the extra mile rather than merely assuming anything.

So, in the interest of preserving a stress-free friendship of more than thirty years, I very frequently ask my friend to please inform me when it would be prudent, desirable and convenient for me to assist him in the retrieval his property from my safekeeping.

In making these offers, I am looking to be free of this responsibility, but for friendship sake I will provide this assistance for as long as he requires. And in making these offers frequently, he has peace of mind that all is well among friends upon the landscape of gold ownership.

Given the 1971 fiasco, one would think that the gentlemen in New York ought to make frequent, insistant offers to see the holdings of foreign gold shipped safely and promptly back home.

To maintain a friendship the adage is 'neither a borrower nor a lender be', and that should probably extend to custodial services except upon the rare instances where safety dictates the foreign placement of the property.

At this stage in the geopolitical game, however, European CB gold ought not be caged in American CB vaults. Nothing good can come of it, only strained relationships.


ToolieSix Arab states join rush to go nuclear#14897111/3/06; 20:58:01,,3-2436948,00.html

Snip: Algeria, Egypt, Morocco, Tunisia, UAE and Saudi Arabia seek atom technology

THE SPECTRE of a nuclear race in the Middle East was raised yesterday when six Arab states announced that they were embarking on programmes to master atomic technology.

"Some Middle East states, including Egypt, Morocco, Algeria and Saudi Arabia, have shown initial interest [in using] nuclear power primarily for desalination purposes," Tomihiro Taniguch, the deputy director-general of the IAEA, told the business weekly Middle East Economic Digest. He said that they had held preliminary discussions with the governments and that the IAEA's technical advisory programme would be offered to them to help with studies into creating power plants.

Mark Fitzpatrick, an expert on nuclear proliferation at the International Institute for Strategic Studies, said that it was clear that the sudden drive for nuclear expertise was to provide the Arabs with a "security hedge".
"If Iran was not on the path to a nuclear weapons capability you would probably not see this sudden rush [in the Arab world]," he said. (end snip)

This looks to make a case for sanctions on Iran more difficult. I think the real message here though is found by considering that these states chose to make their announcements simultaneously. While these countries have may legitimate need nuclear power, the temptation to take things to the next level will be unbearable, I believe. Or have they already found the West ineffective in providing security for the region and are taking steps to provide for their own. It is time to accept a nuclear Middle-East. It can't be far down the road that we see demands that we trade value for value, rather than paper for oil.

DruidBush Moves Toward Martial Law #14897211/3/06; 21:11:13


In a stealth maneuver, President Bush has signed into law a provision which, according to Senator Patrick Leahy (D-Vermont), will actually encourage the President to declare federal martial law (1). It does so by revising the Insurrection Act, a set of laws that limits the President's ability to deploy troops within the United States. The Insurrection Act (10 U.S.C.331 -335) has historically, along with the Posse Comitatus Act (18 U.S.C.1385), helped to enforce strict prohibitions on military involvement in domestic law enforcement. With one cloaked swipe of his pen, Bush is seeking to undo those prohibitions.

Public Law 109-364, or the "John Warner Defense Authorization Act of 2007" (H.R.5122) (2), which was signed by the commander in chief on October 17th, 2006, in a private Oval Office ceremony, allows the President to declare a "public emergency" and station troops anywhere in America and take control of state-based National Guard units without the consent of the governor or local authorities, in order to "suppress public disorder."

President Bush seized this unprecedented power on the very same day that he signed the equally odious Military Commissions Act of 2006. In a sense, the two laws complement one another. One allows for torture and detention abroad, while the other seeks to enforce acquiescence at home, preparing to order the military onto the streets of America. Remember, the term for putting an area under military law enforcement control is precise; the term is "martial law."

Section 1076 of the massive Authorization Act, which grants the Pentagon another $500-plus-billion for its ill-advised adventures, is entitled, "Use of the Armed Forces in Major Public Emergencies." Section 333, "Major public emergencies; interference with State and Federal law" states that "the President may employ the armed forces, including the National Guard in Federal service, to restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of ("refuse" or "fail" in) maintaining public order, "in order to suppress, in any State, any insurrection, domestic violence, unlawful combination, or conspiracy."

For the current President, "enforcement of the laws to restore public order" means to commandeer guardsmen from any state, over the objections of local governmental, military and local police entities; ship them off to another state; conscript them in a law enforcement mode; and set them loose against "disorderly" citizenry - protesters, possibly, or those who object to forced vaccinations and quarantines in the event of a bio-terror event.


Druid: From my vantage point, this is probably contributing more to the latest gold price increase then any other factor. From a foreign investor's perspective, this wreaks of uncertainty and possible instability. It also suggests proactive policy planning for the not to distant future.

GoldiloxMartial Law#14897311/3/06; 22:25:27

@ Druid,

You wouldn't believe the grief I caught for suggesting this very move soon after the 2000 election, at least until Tommy Franks put a more "offcial" face on it in his "Cigar Oficiando" interview. Once the Mena AR gang took the White House in 1988 (actually 1980, but having a president in later stages of Alzheimer's disease helped mask that to a public who adored Reagan), I do not believe they will give it up without a rebellion.

People often remark that Cheney is the "most powerful" VP in a long time, but I submit that GHW Bush had much more power with less visibilty - despite Al Haig's "I'm in control here" smoke-screen to keep the public eye diverted from Pappy Bush.

As Sinclair posted today:

"We should never forget that everything Adolf Hitler did in Germany was 'legal' and everything the Hungarian freedom fighters did in Hungary was 'illegal.'" - Martin Luther King, Jr., "Letter from Birmingham Jail," Why We Can't Wait, 1963

GoldiloxCount The Votes - The MCA Torture Bill Didn't Pass#14897411/3/06; 22:41:49


By Douglas Herman
Am I missing something or did the Military Commissions Act pass the Senate using fuzzy math? Please explain to me how 65 votes out of 99 Senate votes cast equals two thirds majority? Seems they missed by one vote.

According to the link at Wikipedia (below) the Torture Bill breezed through the House of Representatives with a passing vote. Such luminaries as Florida representative, Ileana Ros-Lehtinen, self-styled critic of Cuba' s torture regime, voted to continue the US government-sponsored torture sessions at Quantanamo prison in Cuba. Not content with Gitmo, IRL and her co-conspirators voted to add MORE torture provisions to the US government here in the country that gave her shelter. From torture.

Then the good old boys in the Senate got to vote on the Torture Bill. Championed by other victims of torture like John McCain, they followed the example of Ros-Lehtinen, figuring that what was good for Communist military dictatorships overseas must be good for America .

So these worthies stomped on the Bill of Rights and pissed on the graves of REAL patriots like Madison, Jefferson and Franklin, and passed a bill into law allowing state security (SS) orgs to arrest anyone, torture them and hold them indefinitely without recourse.

But wait.

Did the law really pass?

I counted 65 votes of approval from the Reichstag, I mean Senate. Here are the House votes (HR 6166) and the US Senate votes (S3930).

To pass, the Senate would have needed at least 67 Ayes. Or 66-33 if one senator abstained. Correct? GOP Senators Chuck Hagel (R-Neb.), Lincoln Chafee (R-R.I.) and Olympia Snowe (R-Maine) signaled their support but, at the last minute, Snowe dodged the vote by being absent. Guess the good people of Maine must have flooded her office with calls. Thank you Maine .

At least two-dozen former military leaders penned a letter to the Senate Armed Services Committee outlining their objections to the bill (But, who gives a damn what high-ranking military leaders think, right?) They rightly believed the bill would put U.S. military personnel---captured soldiers as prisoners of war--- at risk in current and future military conflicts. Some expressed their concern that the bill would weaken the moral authority of the U.S. in the War on Terror.

But NEARLY two thirds of US Senators, lacking in spine and moral authority, and having no grasp of history or the US Constitution (That goddamned piece of paper), decided to vote for 666, otherwise known as the Military Commissions Act.

BUT wait once again. They were still a few quislings short.

34 Senators voted No while Olympia Snowe remained a no show. So, it seems as if the Act never passed and whatever goddamned piece of paper GWB signed into law was illegal.

USAF veteran and Constitutional Rights Scholar (actually just an Intern) Douglas Herman writes regularly for Rense. Email him if you know how the MCA passed. This email address is being protected from spambots. You need JavaScript enabled to view it.


Oh well, many say non-passing also worked for the 16th Amendment, so I guess "close counts" in more than just horseshoes, hand grenades, and hydrogen bombs.

GoldiloxThe Battle of Ciudad Universitaria#14897511/3/06; 22:59:47


The federal forces occupying the city of Oaxaca chose November 2, one of Mexico's, and especially Oaxaca's, most sacred days to attack the nerve center of the popular anti-government movement. The Federal Preventive Police (PFP) began to make incursions against Oaxaca's University City which not only houses the Autonomous University of Oaxaca Benito Juarez, but also the means of communication of the Popular Assembly of the Peoples of Oaxaca, Radio Universidad. Under the threat of the violation of the constitutionally backed autonomy of the university and the silencing of the movement's radio, thousands of Oaxacans chose to remember their recent dead, fallen in combat against the same federal troops, by pouring into the streets to confront the further aggression of the federal government. Through more than five hours of intensive street combat, the people of Oaxaca scored a decisive blow against the police and a symbolic victory over the government of Vicente Fox as they successfully out-fought and chased away the police.

In order to restore a semblance of law and order to Oaxaca, the federal police have begun to systematically clear away the numerous barricades scattered throughout the city. Around eight o’clock in the morning, federal troops amassed at the intersection of Cinco Se--ores, a major intersection connecting downtown Oaxaca, the University City and outlying residential neighborhoods. Protesters had built barricades out of burnt buses and semi trailers in this intersection to stop the incursion of the police into the university. The police operation was allegedly designed to break through the barricades surrounding the university. Since the occupation of the Z--calo by the PFP, the university has become the headquarters for the APPO and protecting Radio Universidad, a major preoccupation for the movement. Although the police had said that they would respect the autonomy of the university and not enter, the strategic importance of the site by the movement led them to fight for control of the principal avenue running in front of the university.


Dspite a near-blackout in US media, unrest is growing in our neighbor to the south.

mikal@Invisible Hand, Sir Douglas, all#14897611/3/06; 23:34:37

I want to see if anyone has anything to say about the IMS(Int'l Monetary System) dependence on the House of Windsor to rule America through it's "royal" presidential proxies. I posted a high profile news article here at the time of the last US Presidential election on the subject of blue blood presidents and challengers such as Kerry, boldly stating many of the recent candidates as well as presidents who have direct descendence from the "dark nobility", quoting the late poet Ezra Pound and Eustace Mullins among others.
Hillary Clinton and presidents(and challengers) going back over a hundred years or more also are this family relation. This is not coincidence nor is their disproportionate appearance in top government, corporate and finance posts around the world.
This bears directly on the gold in the Fed vaults and the almost completely foreign banking control behind the Federal Reserve (also highly represented by the Windsor lineage) owners, directors and top executives.
Some other quick thoughts regarding the gold is CB reserve MTM preeminence occurring at banks throughout Europe even beyond the EU. Preeminent for good reason as TC notes.
This is nothing less than a trial balloon or field test for the new global paradigm IMO. The new IFMS if you will. Foreshadowing of course the USA participation and thus giving the green light to overt submission regarding foreign held gold, which is covert at this point, in "dribs and drabs" as TC points out, so as not to tip off the world the ongoing plans for gold, MTM and the dollar and of course all matters of CB reserves.
There is talk of using US assets as collateral to the foreigners who own so much of our debt. It is known that corporate law displaced common law in our courts, that is British Admiralty (Maritime) Law dictates are in use along with the gold fringe around the US flag.
The financiers of wars and boom/bust cycles also see astronomical levels of personal, corporate and gov't debt on every level benefiting mostly their "elites", esp. the undocumented superwealthy and corporate and multinational consolidations, banking and industrial monopolies and pervasive trend of centralized gov't bureaucracy and global fascism disguised as various 'isms, i.e. socialism, capitalism, communism, islamism.
The act of Queen Elizabeth "knighting" the goldbug Greenspan ironically highlights his duel loyalties to monarchism and capitalism.

ThoreaulyVery disturbing email#14899111/4/06; 12:59:18

mikalInvestors betting too much on credit#14899211/4/06; 13:16:23

Sell Dow 12,000 | Kevin Duffy | November 4, 2006
Excerpts: "The bulls can't possibly be running confidently and running scared at the same time. What are the "facts" regarding investor sentiment?
Guest commentary on CNBC (a.k.a. "Bubblevision") is universally upbeat, bordering on giddy.
Over the last 420 weeks the Investors Intelligence poll of investment newsletter editors has recorded more bears than bulls just 6 times.
The Hulbert Stock Newsletter Sentiment Index shows its sampling of short-term market timers with a 67.0% exposure to the stock market. According to Mark Hulbert, "the HSNSI's average reading since the bull market began on Oct. 9, 2002, has been just 29.5%, or less than half the current sentiment reading. In other words, the wall of worry that has on average existed during this more than four-year bull market has now evaporated."
Institutional investors have not deviated from their fully invested course. Mutual fund cash levels remain at a paltry 4.3%.
Short sellers are nearly extinct. An estimated $4 billion resides in bear fund assets against $5.5 trillion in stock fund assets. The Strunk Short Index used to follow 25 short bias hedge funds; that number has dwindled to 8 or 9 (there were over 9,200 hedge funds at last count).
In a twist of irony, many in the bear camp have resigned themselves to owning stocks (primarily energy and commodity-related) as a hedge against hyperinflation.
The investing public is all in. Equities account for 35.6% of household financial assets compared to the long-term average of 26.5% (since 1952). Money market fund balances are near an all-time low 21.3% of mutual fund assets (see graph)."
"Ten of our favorite sentiment indicators are, on average, in the 73rd percentile of bullishness versus readings over the past ten years (see table). Overall, 1996 to 2006 was a period of stock market ebullience, making the current level of enthusiasm all the more extreme."(See Chart)

"Meanwhile, the Soft Landing crowd continues to turn a blind eye to a credit bubble about to go into an uncontrolled spin."

Mikal -> Some fine testament to the peculiarly precarious circumstances of US financial markets.
At the least it demonstrates institutional moral hazard and excess liquidity, embedded at orders of magnitude roughly
equivalent to the disparity between the highest and lowest income groups.
As in the New Testament Bible parable enjoining against living on foundations built on sand, today's money and market mirages convey an acutely moral message.

TownCrierThoreauly, a word on 'reporting requirements'#14899311/4/06; 14:17:32

At the link above you'll find some helpful info extracted from MK's book, "The ABCs of Gold Investing".

As you'll see, the only requirements for 'reporting' by gold dealers are when the gold dealers PURCHASE threshold quantities of certain forms of precious metals from a client. So in those cases, what is being reported (via the ubiquitous 1099) is that a PAYMENT has been made to someone. On the gold side of it, there are no official paperwork filing requirements that would serve to identify you or I as being individual gold buyers/owners -- the size and nature of our gold holdings are off the radar screen.

And with regard to the $10,000 cash reporting, that's boilerplate banking/financial rigmarole. And since nobody that I know of wants to deal with any more paperwork than they absolutely have to, that's a primary reason that the brokers at USAGOLD-Centennial have an internal company policy NOT to accept cash payments for gold purchases.

I hope this helps.


Thoreauly@ TC re: reporting requirements#14899411/4/06; 14:50:55

Thanks, TC, that's reassuring, at least for the time being, and reason, therefore, to stock up on all the Precious you can as soon as you can.
TownCrierFLASHBACK: LME imposes rare trading restrictions on nickel#14899511/4/06; 14:59:49

Here's an OLDIE, but a GOODIE, from mid-August.

17-AUG-06; RENO, NV ( -- Facing historically low nickel inventories and a "genuine material shortage," the London Metal Exchange Wednesday imposed trading restrictions on the metal.

Given the myriad of uses of nickel in construction, public facilities, households, and electronics, an acute nickel shortage has potential impacts for First World and developing nations.

In a news release, the LME announced it had imposed a backwardation limit of $300 per tonne per day in the nickel market and suspended the Lending Guidance in respect to those with dominant long positions in nickel.

As the three-month nickel contract price hit a record $29,200 a tonne, LME Chief Executive Simon Heale said, "Our first priority is to ensure that trading remains orderly and to prevent the risk of settlement defaults."

...The LME gave some relief to those with short positions in nickel, announcing that as of August 18, anyone with a short position who is unable to make physical delivery could postpone that delivery at a cost of $300 per tonne per day.

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

It should be relatively easy for you to draw from this the appropriate associations and contrasts with both current and potential future conditions in the gold market.

They work diligently and cleverly to keep the appearance of the market orderly -- until such time as they can no longer do so. And when that happens, you will find yourself positioned either happily on the metal side, or else sadly on the paper side of the equation awaiting an adjudicated settlement that falls far short of the physical prize.


GoldiloxFlashBack#14899611/4/06; 16:57:36

While confiscation orders may not re-materialize for "political" reasons, if we're already seeing FTDs (failure to deliver) in large numbers for stocks (debt paper for debt paper), how much more obvious will they be in the case of tangibles?

Any new "confiscation" will be accomplished with IOUs. After all, most any judge can be persuaded to rule for "cash equivalents" in leiu of the real thing, based on legal precedent.

TopazG'lox.#14899711/4/06; 17:26:53

It's not a big mind stretch to take in ALL those groups who have and do prosper under a Fiat regime. The Judiciary is prominent ..academia, Social Security etc. from all walks of life in Western Society.

It will be a tall order to expect "public opinion" to come down on your side when push comes to shove imo.

mikalAssessing financial flows and ownership through accounting fraud#14899811/4/06; 19:11:54 I Have Always Found It Amazing... | Walter Burien Jr. | November 4, 2006
Nice, brief introduction to the Annual Financial Report Accounting introduced into US governments
almost 60 yrs ago, conveying the scope of federal, state, county and local government investment
in equities, insurance, mortgage banking and finance. CAFR's for every jurisdiction may be accessed beginning with the web search he suggests.

The Invisible HandSnips#14899911/4/06; 19:46:38

mikal (11/3/06; 23:34:37MT - msg#: 148976)
@Invisible Hand, Sir Douglas, all
I want to see if anyone has anything to say about the IMS(Int'l Monetary System) dependence on the House of Windsor to rule America through it's "royal" presidential proxies.

The Belgian press is announcing today that even the Belgian crown prince Philippe (I understand His Royal Highness is not the brightest person there is) is a member of the Bilderberg Group

Chris Powell (11/4/06; 08:50:10MT - msg#: 148984)
Euro hasn't gained as reserve currency for three years

Here's why the euro may not make it.
When you send a certain amount of EURO's to your SWISS bank
(Switzerland is no EU-member, a fortiori, not a euro-"participant"),
you have to DOCUMENT to the Swiss bank the ORIGIN of the funds.
The International Bank Account Number (IBAN) is an international standard for numbering bank accounts. It was originally adopted by the European Committee for Banking Standards, and was later adopted as ISO 13616:1997 and now as ISO 13616:2003. The IBAN consists of a ISO 3166-1 alpha-2 country code, followed by two check digits, and up to thirty alphanumeric characters for the domestic bank account number, called the BBAN (Basic Bank Account Number). It is up to each country's national banking community to decide on the length of the BBAN for accounts in that country, but its length must be fixed for any given country. A unique identifying code for the bank, of a fixed length and at a fixed position, is required to be contained in the BBAN. However, it is left up to the national banking communities to determine its length and position within the BBAN, so long as it is constant for each country.
Cross-border transfers in euros as from 1 July 2003 - Frequently asked questions
TIH: my bank told me it was only applicable since September 01, 2006
Former World Bank Chief Economist Predicts Global Crash
Nobel Prize winner Stiglitz highlights agenda of predatory globalism now arriving in America under auspices of NAFTA Superhighway, North American Union

$60 oil divides consumers and producers over fair price
London: Five years after Norway joined Opec output cuts to head off a price collapse, the world's third-biggest exporter is backing the group's view that near-$60 a barrel crude is reasonable and no barrier to economic growth
OILPRICING has NEVER been a market event.
Oil now wants the maximum price the world economy can bear.
And as long as oil is being priced in dollar, oil and gas are now a dollar valuator.
Everybody who has Another view is an idiot.

Interview with Alexander Alexeyev
Experts in Moscow and Beijing share the opinion that the Russian-Chinese political relationship has reached an extraordinary high level. How justified are the pinions of certain experts that such a convergence between our countries has an anti-American motive and is based on the desire to oppose Washington's attempts to set a unipolar world?
- Russian-Chinese relations are at a very high level indeed now. Our countries have developed the practice of exchanges of opinions on a very wide range of relevant international and regional problems, including the Iranian nuclear program and the nuclear problem of the Korean Peninsula. We are also fruitfully interacting under the Shanghai Cooperation Organization, whose fifth annual summit was held in Shanghai in June 2006.
At the same time, it would be absolutely unwarranted to say that there is some desire to oppose the U.S. Our countries assume similar positions regarding the need to consider various concepts of a world order in the contemporary circumstances and to respect the right to independently choose models of development and reform. Our politics is directed at equal and mutually beneficial cooperation based on the existing system of international law with all partners in the world, especially such an influential global power as the United States. This is exactly why Moscow and Beijing are talking about multi-polarity as the fundamental principle of coexistence now. Moreover, you should bear in mind that both Russia and China are currently concentrated on reconstruction processes at home rather than on creating together various unions or coalitions.

TopazEuro, Oil 'n stuff on a lazy Sunday afternoon.#14900011/4/06; 20:38:14

I don't see the Euro as simply a better Dollar ...and it appears the ROTW shares that view. The Euro, so I've been led to believe, is or will be far better placed for recovery when and after things go awry.
You would not expect a Thoroughbred to perform well under Quarterhorse conditions however, when subtle changes are made to the "program" the breeding shines through.

So to Oil the $US Dollar backstop we need to consider and at least acknowledge how big an impact on "Inflation in a Global Fiat Regime" this Oil pricing is having.

Those good souls who scream inflation all the time don't appear to realise that $US Inflation is dead in the water "as long as" Oil is there (priced in Dollars) to mop up the excess.
The dangers are DE/Hyper-flation, as in a saturated world, there's nowhere to invest these mountains of PetroDollars but back into T's.

...or so it all seems to me ...IMHO of course!

TownCrierThoreauly, the Bottom Line on our conversation...#14900111/5/06; 00:39:26

Here is an added thought for additional perspective. There are far far more 'registration requirements' for someone purchasing a car or motorcycle than there is for the responsible soul seeking gold ownership. "Get you some."


GoldiloxGold "registration"#14900211/5/06; 07:45:54

At least they haven't added RFID chips to gold coins - YET!

I guess they're still too busy putting them into Casino chips!

slingshotGreat Day to be a Goldbug#14900311/5/06; 08:01:38

A few observations.

More and more coin dealers showing up at flea markets selling gold coins and slabbed morgan dollars.

Same goes for gun shows but have not seen trading gold for guns. Not yet.

Friend of mine works for a major building supply company. Last year the company made a bundle and his boss started to buy gold, BY THE POUND! He had a visit from the government asking him, Why he needed all that gold.


Thoreauly@ TC re: reporting requirements#14900411/5/06; 08:09:43

"There are far far more 'registration requirements' for someone purchasing a car or motorcycle than there is for the responsible soul seeking gold ownership."

The other side of this coin (if you'll pardon the pun) is that the endless proliferation of laws means that we can't ultimately know the law, even though ignorance of it is deemed to be no excuse. Thus, we are all "criminals" at any given moment and subject to punishment accordingly.

In short, it is an increasingly oppressive world we live in, our freedoms lying entirely in the hands of those who only pay them lip service, the better to perpetuate their own existence. For as Lew Rockwell rightly says, the only security the government ultimately cares about is its own.

Bottom line: In gold I trust, but only so far, knowing full well that I live at the pleasure of the state, not the other way around.

mikalDebt Britain's bane#14900511/5/06; 09:28:07

Breaking out of Britain's debt trap
Business comment
By Dan Roberts, Sunday Business Editor- Page 1 of 5
FSA warns rating agencies on banks
The insistent drip-drip of debt is everywhere. From ballooning mortgages and personal lending to the borrowing binge driving the corporate buyout boom, it lies behind many of the biggest business stories of our time.
Last week, Abbey's increase in mortgage limits was an uncomfortable reminder of how much our salaries are being swallowed up trying to match Britain's runaway house price inflation. Growing personal bankruptcies and flattening credit card lending hint at a generation of maxed-out households. Worries over weaker spending shows how dependent business has become on this unsecured and unsustainable personal borrowing.
Meanwhile, the debt-fuelled private equity bandwagon rolls on relentlessly: KKR, for example, looks to have $40bn burning a hole in its pocket to buy Vivendi, Marsh or any other big company it can get its hands on. As we reveal today, the buyers lining up to take over Aston Martin are all leveraged buyout companies – able to use aggressive debt financing to outbid anyone else. Those public companies that still manage to resist the siren call of private equity often do so by gearing up their balance sheets almost as aggressively – swapping equity for debt by giving away borrowed cash to their shareholders.
To say we live in a debt-soaked society is only the half of it; debt is now interwoven into the very fabric of the economy.
It does not have to be this way. It is all too easy to blame the explosion of easy credit in the last couple of years on forces beyond our control. Certainly, the reduction in global interest rates needed to stop the world slumping into recession after 2001 was hard to avoid. Combined with a glut of Asian savings and Middle East petrodollars, the low cost of borrowing has unleashed a tidal wave of liquidity on the world, driving up prices as too much money chases too few assets.
But back in Britain, the playing field has been badly tilted in favour of debt by forces we can control. Owning shares in companies has been made less attractive than lending to them largely by Government tax rules. In particular, the Chancellor's reckless decision to abolish tax breaks on dividends paid to pension fund investors did much to fuel their headlong rush out of the stock market and into the bond market.

mikalRe: Telegraph commentary#14900611/5/06; 09:43:38

First off, the line: "FSA warns rating agencies on banks"
near the title below, is NOT part of the story but an ad, and is hereby excised.
Second, to be fair, a comment on the Roberts editorial is in order.
Third, please note that the first page shown is the essence of the editorial as far as relevance to gold. The rest of the pages(2-5) are devoted to anecdotes particular to British tax policy and to companies operating there. Granted you may find it interesting.
Finally, notice that this excellent, pointed, though brief overview of British debt(Page 1)closely parallels our American situation, and doubtless to a certain degree others.

mikalGold, government and you#14900711/5/06; 10:07:04 Peterson's Law of Inflation by William H. Peterson
November 4, 2006 "First published in National Review, December 19, 1959"

A trip to a museum begins a journey through time and coinage in this short, timeless narrative. The end result is a changed perspective on gold, government and you.

Paper AvalancheWhen the dollar goes POOF, will you be allowed to leave#14900811/5/06; 11:25:28

Per a number of articles and reports on Free Market News ( the doors will be slamming shut in about 60 days.

We all anticipate that the dollar will inevitably go bye-bye (possibly sooner rather than later), but we forget that the people in other countires who lent us money (as a result of their toils an labor) expect to be paid back. You can't just let all of the American's who want to walk away from that debt leave. They, along with every other US CITIZEN, are sureties to the debt.

Prepare for restrictions on travel come 1/14/07. BTW, anyone else wonder if the fence with Mexico is to keep them out or us in?

Take care.

Chris PowellThe CPI must have replaced Picassos with Elvises on velvet#14900911/5/06; 13:23:09;_ylt=AiaWJxFEtZtGuCst3k_5Jmz2_sEF;_ylu=X3oDMTBidHQxYjh2BHNlYwN5bnN0b3J5

Art World Abuzz as New York Is Set
for Billion-Dollar Auction Season

By Catherine Hours
Agence France-Presse
Sunday, November 5, 2006

NEW YORK -- The art world is anxiously eyeing a series of impressionist and modern art auctions in New York this month, with expectations high that interest in the flourishing market will set records tumbling.

If the estimates prove correct, the sales could see more than one billion dollars' worth of art go under the hammer for the first time in a season.

With works by Pablo Picasso and Gustav Klimt among the highlights, the sales come at the end of a busy year for the sector, with the record for the highest amount ever paid for a single painting being broken twice since June.

Christie's is to hold its impressionist and modern art sale on Wednesday, with estimates of the total value of works ranging from 340 million to 490 million dollars.

One of the highlights of the evening is "Adele Bloch-Bauer II," a 1912 portrait by Austrian symbolist Klimt that was confiscated by the Nazis during World War II and returned to the owners' heir earlier this year.

It carries an estimate of 40 million to 60 million dollars. An earlier version of the painting, "Adele Bloch-Bauer I," broke records when it was sold at auction earlier this year in New York for 135 million dollars.

Picasso's 1903 work "Portrait of Angel Fernandez de Soto," bought by popular musical composer Andrew Lloyd Webber's foundation for 29 million dollars just over a decade ago, is expected to reach between 40 million and 60 million dollars.

Paul Gauguin's "Man with an Axe" is expected to reach up to 45 million dollars and is described by the auction house as one of the most important works by the French post-impressionist to come up for sale in 25 years.

Sotheby's sale of impressionist and modern works on Tuesday, while not boasting such valuable works, nevertheless includes a Paul Cezanne still life with an upper estimate of 35 million dollars and one of Claude Monet's series of beach scenes from Trouville, expected to reach up to 20 million dollars.

Sellers' expectations are high, in a bullish market fed by seriously wealthy buyers from around the world.

While Japanese buyers fueled the art boom of the 1980s and Russian and Chinese collectors have emerged in recent years, the latest private buyer to hit the headlines was Mexican financier David Martinez.

The discreet New York businessman was reported to have snapped up one of Jackson Pollock's trademark drip paintings for around 140 million dollars in a private sale last week, putting contemporary works firmly in the spotlight.

Christie's sale of contemporary and post-war art on November 15 and 16 features an Andy Warhol portrait of Marilyn Monroe expected to reach up to 15 million dollars and one of Mao Zedong estimated at nine million to 12 million dollars.

And among the highlights of Sotheby's sale of contemporary work on November 14 will be works by American abstract expressionist Willem De Kooning.

Gilbert Edelson of the Art Dealers Association of America said the contemporary works were causing the biggest buzz in the market, which he said was experiencing an exciting run.

"There seems to be a great deal of power in the art market. Prices have been going up, especially with post-war material," he said.

Edelson said the diminishing number of impressionist and post-impressionist works available had pointed a younger generation of buyers towards later works.

"That new generation, many of whom have made their money relatively recently, are putting their money into post-war contemporary art. That's the part of the market that is really very active," he added.

While he acknowledged that there were always speculative buyers in the market, he said he believed much of the current boom was due to collectors with a genuine passion for art.

"There are people who have two things: an interest in art and money," Edelson said.

USAGOLD / Centennial Precious Metals, Inc.A world of gold at your fingertips. Step inside and shop around...#14901011/5/06; 14:17:01

shop for gold coins
Flatliner@ Thoreauly's Very disturbing email#14901111/5/06; 15:20:33

Thanks for the Form 8300 information. Upon reading through the linked pdf file, it's pretty clear that the intent is to make the last few avenues of currency flow traceable. Most transactions have bee traceable for years. Tracking cash, on a larger scale, requires the cooperation of the masses. One has to wonder where the line will be drawn as inflation takes over. Will the 10,000 threshold stand when it comes to buying a loaf of bread? Artificial limits never word as intended. Governmental transactional overhead has it's limits when applied practically. It will be interesting to watch this law over time.

At the same time, I searched through a number of US IRS forms looking for ‘gold’ today and found a reference to gold in the 1099B form ( and below). I am not a tax expert, but it appears to me that the intent here is that if you sell enough gold that could be used to satisfy a regulated futures contract, that is a taxable transaction. That would imply that the gold sold would have to be of an acceptable alloy.

Now looking on the nymex, ( ) we see that they define a contract like the following:

"Grade and Quality Specifications
In fulfillment of each contract, the seller must deliver 100 troy ounces (±5%) of refined gold, assaying not less than .995 fineness, cast either in one bar or in three one-kilogram bars, and bearing a serial number and identifying stamp of a refiner approved and listed by the Exchange. A list of approved refiners and assayers is available from the Exchange upon request."

Hum… From our gracious host (, we see that gold Eagles are of Fineness .916 which does not qualify them to be used for delivery against a contract traded through the NYMEX. But, an American Buffalo with Fineness .9999 could be. I was not able to find, with the help of Google, the definition of "Commodity Futures Trading Commission (CFTC)-approved regulated futures contract (RFC)".

I was hoping to find a conclusive answer, when doing this research, that would clearly outline with regards to how much of what type of gold coin would qualify as a taxable transaction when selling it. But, unfortunately, the only information that I can find seems to imply that Eagles would not qualify for the 1099B transaction form. Does anyone know of a form where they would apply to a taxable transaction?


Sales of precious metals. A sale of a precious metal
(gold, silver, platinum, or palladium) in any form that may be
used to satisfy a Commodity Futures Trading Commission
(CFTC)-approved regulated futures contract (RFC) if the
quantity, by weight or by number of items, is less than the
minimum required to satisfy a CFTC-approved RFC. A sale
of a precious metal in any form that cannot be used to
satisfy a CFTC-approved RFC is not reportable.

For example, Form 1099-B is not required to be filed for
the sale of a single gold coin in the form and quality
deliverable in satisfaction of a CFTC-approved contract
because all CFTC contracts for gold coins currently call for delivery of at least 25 coins.

Sales of precious metals for a single customer during a
24-hour period must be aggregated and treated as a single
sale to determine if this exception applies. This exception
does not apply if the broker knows or has reason to know
that a customer, either alone or with a related person, is
engaging in sales to avoid information reporting.

The Invisible HandWhen the dollar goes POOF ...#14901211/5/06; 18:00:18

... it will no longer be necessary to look for correlations between the price of gold (POG) and currencies/oil/Dow.

They the Sheeple, continue to consider gold / POG as embedded in a monetary (currencies) and financial (Dow-paper) governance.

The POG behaviour is always being related to XYZ, always being considered relative to ABC.

In the meantime, nobody realises that it becomes more difficult by the hour to find/demonstrate/articulate a consistent gold relationship.

This is precisely what to creation of, or the evolution into, Freegold means.

At the end of the day, all gold links will have been severed in the present transition process.

In this way, the Giants, in whose steps we follow, will let the revaluation of wealth precious metal shine.

This is what the dollar regime does NOT want and what the euro regime wants.

It's as easy as that.

The Invisible HandRising India boosts global presence#14901311/5/06; 18:05:33

India's growing role in the global economy, and its status as a nuclear power, are starting to disturb the prevailing balance-of-power in a wide range of international institutions. While Delhi is set to achieve enhanced global status over the next few years, there are dangers that its rise may help undermine prevailing international regulatory institutions.

TownCrierSBV approves import of 20,000kg of gold#14901511/5/06; 20:23:10

VietNamNet Bridge – The State Bank of Vietnam (SBV) said it has licenced the importation of 20,000kg of gold in October in order to serve domestic manipulating and trading operations.

...Most recently, SBV has allowed Agribank's Gold, Silver and Gemstone Company to import 1,500 kg of gold to stabilise the market. .... to meet the increased domestic demand toward the end of the year.

The gold market has become more bustling recently, prompting gold trading firms to expand their business. ... Bao Tin Minh Chau, the well known gold trading firm in the north, has kicked off the expansion and upgrading of its distribution network in Hanoi and northern areas.

Raising supply volume and expanding distribution networks have proven to be the best solution...

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

Yet another article detailing the growth of the gold scene in Vietnam.

(see also)


TownCrierGold Gains as Rise in Oil Spurs Demand for Inflation Hedge#14901611/5/06; 20:47:01

Nov. 3 (Bloomberg) -- Gold in New York rallied, gaining for a fourth straight week, after a rise in oil prices increased the appeal of the precious metal as a hedge against inflation.

The price of gold reached a 26-year high in May, partly because oil was heading to a record. Oil climbed more than $1 a barrel today after the U.S. warned that Nigerian militants are preparing to stage a large-scale attack on oil facilities in the Niger River delta.

``Oil has helped bolster the gold price,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``Right now there's an upward bias on gold.''

Gold has climbed this week despite a weekly drop in oil prices.

``Some of the oil money is going into gold as a reserve instead of the dollar,'' said McNeill.

It currently takes about 10 barrels of oil to buy an ounce of gold. That ratio could climb as high as 20 to 25 barrels over the next several years, said Dennis Gartman...

Persian Gulf countries ``should sell crude oil, not for U.S. dollar nor for euros, but for gold,'' Gartman said.'s recovery after the drop in the euro may signal gold will climb despite weakness in the European currency. Gold rose 18 percent last year even while the dollar rose 14 percent against the euro.

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

We've said it before. If gold could climb this way even during this period of relative 'strength' in the dollar, imagine the potential size of its gains as the dollar begins to sag under the growing weight of the U.S. trade and buget deficits.


TownCrierGold Rises for Tenth Day...#14901811/5/06; 21:43:46

Nov. 6 (Bloomberg) -- Gold rose for the tenth straight day in Asia...

``Gold seems to be trading by itself, on good physical demand,'' Jonathan Barratt, managing director at Commodity Broking Services, said by phone from Sydney today.

A bullish outlook on charts some traders use to predict price moves is also drawing buyers, he said.

Charts some traders use to predict price moves show that gold has risen above its 50-day, 100-day and 200-day moving averages, signals that the bullion is poised for further gains, Barratt said.

Hedge-fund managers and other large speculators increased their net-long position in New York gold futures in the week ended Oct. 31, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 64,716 contracts on the Comex division of the New York Mercantile Exchange, the Washington-based commission said...

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

Truth in advertising (or truth in labeling) is a noble idea.

So... what would happen to the physical gold trade if the mostly non-physical contracts at the core of the speculative market were simply changed in name to "mold" contracts?

Aside from the curiosity factor, the physical market participants probably wouldn't/couldn't care less. Would the speculators? They could still place their bets -- it's not like the proposed name-change would render the contracts significantly less physical than their current profound degree of intangibility.

Food for thought.


TownCrierThe unwelcome growth story: China's ever-expanding forex reserves#14901911/5/06; 22:12:49

BEIJING : China's foreign exchange reserves have probably already hit a record-shattering one trillion dollars, and they could top two trillion dollars sooner rather than later, economists said.

Even if Chinese officials have vowed to slow the growth in this huge stash of cash, they are up against vast and inexorable economic forces and, just as important, a national policy of keeping the currency stable.

The inflow of foreign direct investment and a continuous stream of hot money aiming for short-term speculative gains have both helped reserves reach their current size, but booming exports are by far the most important factor.

The accumulated trade surplus in the first nine months rose to 110 billion dollars, already bigger than the 102 billion dollars recorded for all 12 months of 2005, according to customs data.

This is where the central bank's determination to keep the exchange rate stable comes in.

The inflow of money puts upward pressure on the Chinese currency, and the central bank has to counteract this by buying up foreign currency, adding to the already bulging reserves.

Economists warn that this trend must be stopped, or at least decelerated, because of the burden posed by managing super-large forex reserves.

"China has to slow its foreign exchange reserve accumulation because excess reserves are creating many problems," said Ding Zhijie, a professor with the University of International Business and Economics in Beijing.

One problem is that China can do nothing to curb the reserves without moving the markets, and hurting itself in the process.

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

This tale sure is getting a lot of play on the airwaves lately.

Price stability is certainly an important factor in fostering economic stability. So in dealing with their incoming cash surpluses -- that is, chosing some avenues and outlets over others -- the crux of what China really has to decide is *which* market to move.

Arguably, the least disruptive impact to the real economy would be choosing the physical gold market to absorb the brunt of the rising-price impact from eating a lion's share of the surplus cash.

The sky-rocketing gold avenue would be least disruptive because nobody needs to be able to afford gold to fill their bellies or to fuel their engines and furnaces. In fact, because gold's primary role right now is as a means of consolidating wealth, the net effect of this choice would be to bolster the real-world purchasing power of these people's golden savings. And any way you slice it, that yields a net positive for any national economy under question.


TownCrierA lot of purchasing power is at stake... here today, possibly gone in a puff of smoke#14902011/5/06; 22:29:49

November 6, 2006 --

When Mboweni speaks, he generally gives a brief recap of local and international economic conditions. And over the past few months, he has repeatedly brought up South Africa's relatively big current account deficit because it is much on his mind.

And when Mboweni says the words "current account deficit", the news agencies send them winging out to the world where they are caught by currency traders who leap into action on the rand, crying "sell, sell, sell".

This raises the issue: why does the rand recover? What do traders think happens to the deficit in-between the governor's speeches?

One answer is that they respond to new news.

This may well be true. However, if the fresh news is good enough to overcome their concerns about the deficit, why does it not stay good enough when they next hear him say the dread words?

But trying to work out what goes on in traders' minds is pointless because they are probably too busy to think as they punch away at their computer keys.

It's not surprising because they lead a high-wire life, dealing in mind-boggling sums. Average turnover in the currency market is running at $10.6 billion a day this year, up from $9.8 billion last year.

There's not much time to think when you handle that amount of money on a daily basis.

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

The article goes on to give a neat lesson in society's special interest groups pitching social agendas that face conflicting objectives/outcomes.

In a complex and often illogical world, the beauty of wealth consolidation using physical gold resides not in its yellow gleam, but rather in its elegant simplicity.

Interlopers in an increasingly chaotic world gladly gravitate toward things orderly and sublime.


Chris PowellChina said planning shift from Treasurys to mortgage and corporate debt#14902111/6/06; 06:30:38

China Wants to Adjust
FX Portfolio, Paper Says

From Reuters
Monday, November 6, 2006

FRANKFURT -- China wants to shift its foreign exchange portfolio away from U.S. Treasuries and into higher-yielding U.S. corporate and mortgage-backed debt, a German newspaper cited a financial source saying on Monday.

"According to information from financial circles, high-ranking Chinese monetary officials have made clear at international forums that a diversification of its currency reserves, which are mostly invested in U.S. government bonds, is necessary," the Financial Times Deutschland said.

The newspaper did not provide any further details or direct quotation from its source or sources.

The Chinese think a shift out of U.S.-dollar securities would be risky because it might spark a depreciation of the dollar, which would be costly for China as it holds almost $1 trillion worth of U.S. assets, the newspaper said.

"So what is more talked about is to increasingly bring higher-yielding dollar paper into the portfolio. This includes corporate bonds or bonds from para-statal institutions like the U.S. mortgage financiers Fannie Mae and Freddie Mac. Details are still unknown," the paper said.

GoldiloxChinese "shift"#14902211/6/06; 08:26:17

@ CP,

So the chinese want to move their money from the "blackjack table" to the "roulette wheel"?

I guess they figure as the risk keeps climbing, they should fortify the consumer mortgage industry that fuels their consumer electronics trade, as opposed to direct gubmit support.

Maybe the analogy of trading your house for a big screen TV is not so far from true!!!

mikalHeadline samples - November 5 - 6, 2006#14902311/6/06; 09:02:57

Treasurys lower as Moskow warns on inflation - CBS Marketwatch
Gold off two-month highs but seen strong - Reuters
Long-term, expenses can eat an account alive - Houston Chronicle
Middle class' cash woes cause election angst - Houston Chronicle
U.S. Health Costs Are Fueling a Fiscal Blow-Out - Wasik, Bloomberg
'Panic selling' hits derivatives market - FT ($)
Wall Street awaits election results - AP
Repo men - Economist
Gold May Rise for Fifth Week on Speculation Dollar Will Slide - Bloomberg
Service-Industry Expansion in Europe Unexpectedly Slows for a Fourth Month - Bloomberg
Once Safe, Public Pensions Are Now Facing Cuts - NY Times
Oil, Cash and Corruption - NY Times
Art auctions set to raise over $1bn - FT

MKChris P, Goldilox#14902411/6/06; 09:18:14

I take the report from the German newspaper with a grain of salt. Having gotten a feel how the Chinese are handling the reserve problem, I can say without reservations that they are unlikely to say much publicly about what they intend to do. Unless the statements below can be attributed with greater certainty than "information from financial circles" and at "international forums," I would just throw this in the pile with the rest of the speculation on what China is going to do. The clearest attributed statements came in the Financial Times article which appeared at the USAGOLD NewsGroup last month and they were all attributed to high ranking officials. There they talked about going to commodities, gold and a oil storage program. That actually makes some sense.

One more point:

The Chinese have stated clearly that they feel that their dollar reserves are too high and that they intend to trim them. Going from U.S. Treasuries to mortgage backed securities and corporate bonds is not going to get them the diversification they are looking for. They will still be in the dollar and vulnerable to its depreciation -- the exact opposite of their oft-stated intent.

This article appears to be a smokescreen planted in someone's behalf.


"According to information from financial circles, high-ranking Chinese monetary officials have made clear at international forums that a diversification of its currency reserves, which are mostly invested in U.S. government bonds, is necessary," the Financial Times Deutschland said.

The newspaper did not provide any further details or direct quotation from its source or sources.

mikalCredit derivatives #14902511/6/06; 09:19:44

More reasons for switching to gold can be found
every day. But some don't get it until something
bites them in the behind:
'Panic selling' Hits Derivatives Market
By Paul J Davies and Gillian Tett | Financial Times
Published: November 5 2006 15:52 | Last updated: November 5 2006 15:52 - Excerpt:
"Investment banks and hedge funds are being forced to rapidly adjust their trading strategies amid a wave of reported 'panic selling' in the US and European credit derivatives market last week.
This heavy selling has driven the cost of insuring debt against default in the market for credit default swaps to record low levels, signalling either that investors are extraordinarily optimistic about the outlook for corporate debt, or that prices are so distorted that they are no longer being paid for the risks they are taking on.
The rest of this article is for subscribers only"

KnallgoldChina#14902611/6/06; 09:42:13

Yeah,right,buying bonds of Freddy Krueg-ahem Mac,I'm almost LOL.

I'm noting that that the Chinese at least propose something $ neutral (if actions follow words...).This Reuters article is written rather opaque-"China wants to adjust"'speaks out its worries about a likely $ damage it will cause,Frankfurt,the heart of Axel Weber land,takes up the worry and says "So what is MORE TALKED about is to increasingly bring higher-yielding dollar paper into the portfolio..".

I'm wondering on what is more THOUGHT about,Randy recently seems to "liebäugeln" with the idea of China bidding for Gold with its $ reserves.So far I gave this a rather low possibility,because of its probably too hostile nature,but that this Chinese huge $ reserves story gets a lot of coverage lately and stated worries like "The Chinese think a shift out of U.S.-dollar securities would be risky because it might spark a depreciation of the dollar, which would be costly for China as it holds almost $1 trillion worth of U.S. assets" makes me think again about it.

Hey,its again "WHAT ELSE IS THERE?"!And the "Gold valve" theory almost screams here for attention.Every good system has security exits,I know this for example from high-pressure chemical reactors which have crack-glasses for controlled releasing over-pressures in emergencies.

I don't know exactly on the technicals,but if you buy Gold with $'s,is there even a need to go to the foreign exchange market?So technically,it doesent apply direct pressure to the $ exchange rate (versus other currencies),it just pushes POG up.The influence on the $ reserve system though is Another issue.But at some time,the final slap will come anyway.

A second point,more chart related.The TA all scream about the Wave III.If its true that it really started,how nice of The Invisible Hand to apply the Gold enemy a perfect C Wave III treatment...lets see if they can stand it :-)

FlatlinerChina buying gold… I still don't think so#14902711/6/06; 10:56:29

We all have to remember that gold is money that a central bank can't print. If the price of gold rises noticeably, people will not hold currency, but rather just use it for transactions. Thus, like I continually say: to a central bank, they will not give credit to gold by openly buying it. They don't want to use it and never will. The right to print currency is far too valuable to them for them to endorse gold in any way.

Also, ask yourself, if China is scared of dollar devaluation, how do they protect that? Keeping that question in mind, now ask yourself where would the currency go that they free it up to chase gold? In other words, if they took the 100 billion stored dollars and replaced that with gold, yes, they will have forced the gold price up and preserved their reserve in a non-printable money, but they will have also unleashed billions of dollars into circulation that will bid for goods and services. That second tier affect is just as bad as them running out and buying anything themselves. The only way to keep the dollar from devaluing is to not value it as anything but a reserve. They can't buy gold - they can't buy oil - they can't buy war ships or planes or nukes. They can't put the currency into circulation. It cannot move.

Unleashing these dollars on gold has another affect that people don't normally bring up when talking about this reserve for China. This idea is hidden in the second paragraph above. If China bids up gold, all those who save the Chinese currency will move it into gold. That will unleash billions more in the act of chasing goods and services. Around the world, there will be a chain reaction of all savers unleashing their currency holdings to chase gold. The end result will be a total loss of confidence in printable currency. The privilege that central banks hold today will come under intense scrutiny.

Seems odd. It's definitely at odds with how someone might handle their personal finances in light of not owning the right to create currency out of thin air. To the individual that works hard for his surpluses, he must take care to see that the surplus is not invisibly taxed out from under him. To the individual, gold makes for a historically good way to temporally store surplus currency. To the smatter then average individual, they will look and see that saving fiat currency leads to imbalances that cause very complicated financial policies.

If from day one, no one saves fiat currency, any inflation in the currency supply will be felt much, much, much sooner than if it's horded as a store of value. As we move forward and find ourselves dealing with the unleashed savings of the world, individually, we should take a stand against invisible taxation by not saving currency. Let cash be cash flow and turn surplus into assets.

If you get this, you will see that there is a huge opportunity if savings is unlocked.

On the flip side, I do not see central banks giving up on their ‘savings’ to spark the inflationary cycle. I also see that many rules and regulations are applied towards large investments houses so as to keep all their ‘savings’ from chasing any real (physical) goods and services. The derivative markets will continue to grow as long as they function to absorb this savings. Those that maintain confidence in currencies will do everything that they can to create laws to keep the savings in the paper markets from actually coming out to chase physical goods and services. One could only conclude that if they need too, they will make sure there is a financial crash in order to transfer the savings from the people into the hands of those that know not to spend it.

It's a cheery pre-election day in the US. Vote by taking control of your savings. Do not hold cash longer then it's needed as a function of living and get out of debt. (The act of going into debt means that you will pay interest (return hard earned money) to the bank on an asset that they created out of thin air. It's an unfair advantage in a game that you do not need to play. Also note that debt is currency inflation.)

TopazAg.#14902811/6/06; 11:23:15

The Silver Rocket is simmering on the LaunchPad with a continual trickle of deliveries flowing through in this Comex non-delivery period.

Gold:Silver Ratio Chart looks for all the world like it wants to go lower... they'll have to let it sooner or later imo.

DruidSimultaneous Explosions in Mexico City#14902911/6/06; 11:30:12


MEXICO CITY (AP) - Simultaneous explosions hit the Federal Electoral Tribunal, a bank branch and the headquarters of the former ruling party early Monday and authorities deactivated a homemade explosive device at a second bank branch, Mexican news media reported.

Authorities told Mexican news media there were no injuries.

Mexico City Public Safety Secretary Joel Ortega told the daily newspaper El Universal that emergency officials received two telephone calls shortly after midnight warning that bombs were about to be detonated.

The entrance to an auditorium at the headquarters of the Institutional Revolutionary Party, or PRI, was destroyed, with the door blown out and chunks of concrete and shattered glass scattered on the ground. There appeared to be little damage immediately inside the building
Police investigators using flashlights to sift through the rubble declined to talk to the press.

One of about a dozen private security guards on overnight duty at PRI headquarters, Valeano Toledo, 27, told The Associated Press that he was at a different building of the headquarters when, "I heard one explosion, and then a stronger one that shook the buildings, and the windows and glass doors." He and other guards ran to the site of the explosion, "where we saw a lot of smoke," he said.

The explosion at the electoral tribunal building damaged the first floor and broke second-floor windows, a police detective told El Universal. The official, who was not identified, said the explosive device that damaged the tribunal was an "electronic instrument much more sophisticated" than those planted by unknown groups in the city on previous occasions.

The Reforma daily newspaper quoted a witness as saying that two explosions happened at a branch of Canadian-owned Scotiabank in southern Mexico City, followed by "a strong smell of gunpowder." The blast broke some windows of nearby houses, the newspaper said.

Ortega said a police bomb squad deactivated an explosive device at a second branch of Scotiabank near the tribunal. The device bore a label reading "bomb-danger."


Druid: A pretty big story that is by-in-large being ignored by our media mental giants.

@Goldi & Thoreauly, I can only hope that any measures that are being put in place as it pertains to Martial Law are preventive in nature and are used as a last resort for any type of disorderly dollar devaluation or event.

@PA, building a wall to keep the immigrants out will also serve a more useful purpose of keeping the debtors in, it also suggests a possible repudiation of debt. So, will we have hyperinflation, repudiation or a combination of both?

joepickerplatinum etf#14903011/6/06; 11:33:29

Hello All

I enjoyed the big 2 day platinum move. Any comments on the Barclays Platinum ETF rumors.........thanks.

Chris PowellChina's diversification#14903111/6/06; 11:38:58

MK, agreed that the Deutschland FT story
is very likely part of a smokescreen. I
wondered if the Chinese thought that they
gain some cover by exiting a market in
which ownership is closely tracked (the
Treasury market) and entering (or claiming
to enter) bond markets in which ownership
is not so closely tracked.

But for all we know, China well may have
a secret deal with the U.S. and with the
Western central banks generally in which
its holding and continuing purchase of
government bonds is subsidized by the
surreptitious transfer of gold. Maybe
China is getting the gold already; we
hardly know where all the gold sold and
leased by Western central banks has been

Such an insurance policy might seem very
desirable to China and all big dollar-
surplus holders.

Ten Bears"Who Runs the World and Controls the Value of Assets?"#14903211/6/06; 12:03:04

Sir Contrarian-- thank you for the kind words (148938) and thanks also for sharing your wisdom. The type of information in your post 148851, (Horse Sense) should be more available. A version of the truth based on historical facts is difficult to find in the corporate media currently.

Another look at history from Joan Veon..Referenced above

Goldilox"preventative" enforcement#14903311/6/06; 12:55:38


"@Goldi & Thoreauly, I can only hope that any measures that are being put in place as it pertains to Martial Law are preventive in nature"

Not too fond of "preventative" law enforcement, as it tends to be focused on silencing dissidents who have done nothing wrong betond voicing an opinion.

Cases in point:

1) Over 1100 credentialed jounalists detained in NYC warehouse "jails" for 24 hrs or more during the 2004 Republican Convention

2) Employees of defense contrctors who host Presidential "lectures" who find themselves excluded or "arrested for trespassing" based on bumper stickers or tee-shirts that reflect divergent political opinion.

"Preventative" legal enforcement can already fill our jails and probation departments with "potential" criiminals who are guilty of nothing but non-mainstream thought - requiring millions of dollars for "surveillance" and monitoring! Adding a political basis as "reasonable cause" completes the noose of "control".

ArmageddonOpening Tommorrow on TV's near you - Dawn of the Dead versus Diebold#14903411/6/06; 13:26:52

I just heard on a conservative talk show that certain polls are "NARROWING" the leads for democrat candidates and in some cases republicans may be ahead. HMM..seems like things are being set up for a very SLIMMM... republican victory? The democrats may be having the dead on their side but republicans have voting machine makers like Diebold on their side and in the end its who COUNTS the votes that matters. Don't forget to watch this horror show opening on television sets near you all over America tommorrow. I think republicans are going to hold on to the house and senate by at least 1 seat each. GO DIEBOLD!!!
USAGOLD Daily Market ReportPage Update!#14903511/6/06; 14:17:17">
The Daily Gold Market Report has been updated.

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

MONDAY Market Excerpts

Gold futures slip prior to Election Day in U.S.

November 6 (from Reuters) -- U.S. gold futures sagged from a new two-month high on Monday, as gold bulls adopted a more conservative posture before Tuesday's U.S. congressional elections.

"Unless we see a big turnaround in oil ... the stock market and dollar, I think it's just going to be a little ho-hum Monday-Tuesday until this election is over," said a floor broker.

The COMEX December gold contract slipped $1.30 to settle at $627.90.

Technical buying by hedge funds, worries about the dollar, and rotation out of the U.S. stock and energy markets helped gold rally $52 since it broke higher on Oct. 24. The price is up $64 from the four-month low on Oct. 4 at $563.50.

But uncertainty before the election, in which all 435 House seats and 33 of 100 Senate seats are at stake, has encouraged some gold players to take profits and wait on the sidelines.

"In the grand scheme of things, that did really not have that big of an effect. Maybe some U.S. investors were holding back a little," said a dealer at a metals refining company.

Analysts and pollsters say the vote could change the balance of power in Washington by giving control of the House of Representatives and Senate to the Democrats. Democrats must pick up 15 House seats and six Senate seats to reclaim control from Republicans.

Still, most investors seem comfortable retaining their gold positions, seeing minimal, or indirect, impact whatever happens Tuesday.

"It would depend on how the foreign exchange markets are going to react. If one of the houses changes hands I suppose you have got the prospect of gridlocked government," said James Steel, senior analyst at HSBC in New York.

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

GoldiloxRole Reversal#14903611/6/06; 14:34:35

Comix holds the 626 line, but PoG drops in Access Mkt after-hours.

There's a new permutation!

GoldendomePlatinum#14903711/6/06; 15:21:30

Joe Picker: Platinum, IMO, is a distraction. Buy the rumor, sell the news. An industrial metal that will never be money. Too rare and there are few accumulated stocks. A hand to mouth commodity like most others. To be truely valued as money, a commodities monetary value has to by and large outstrip it's industrial commodity value thereby gaining for it, the status as a store of value--money. Gold and gold alone, did this centuries ago; that's why--though rare--most that has ever been mined is still about--stored away, protecting wealth. Gold's decline in marginal utility is nearly to zero; it's high stocks-to-flow ratio is proof of this and unapproached by any other commodity.
GoldiloxAre you so sure?#14903811/6/06; 16:21:42

@ Goldendome,

"Gold and gold alone, did this centuries ago; that's why--though rare--most that has ever been mined is still about--stored away, protecting wealth."

Are you so sure? We can't even get an accurate audit of the contents of Ft Knox, but everyone is "certain" that their estimates of gold production from the Mayans, Aztecs, and ancient Egyptians are completely accurate.

As for Pt being a "hand-to-mouth commodity," I'll trade you a bologna and cheese sandwich for a Pt Eagle right now!

The reason its value is rising more rapidly than others is due to the commodity nature of it use and poor recovery quotient, but the jewelry aspect of Pt is surely "wealth retained".

DruidMore War Games: Collective Security Treaty Organization (CSTO) & Shanghai Cooperation Organization (SCO) Join Hands#14903911/6/06; 16:36:59


MOSCOW. (RIA Novosti defense commentator Viktor Litovkin) - In an announcement that would have been sensational if it had not been so logical, Chief of Staff of the Russian military Army General Yury Baluevsky said that the Collective Security Treaty Organization (CSTO) and the Shanghai Cooperation Organization (SCO) were planning their first theater-level military exercise. The decision was made almost unanimously on Thursday as CSTO chiefs of staff met at the organization's Moscow headquarters.

The wargame codenamed Peace Mission Rubezh 2007 will be staged in Chebarkul in the Russian Urals. While the scope and the plot have yet to be drawn up and are subject to change, Russia and China are expected to come up with airlift and other support capabilities and battalion-sized motorized rifle or airborne task forces; Kazakhstan, Uzbekistan, and Tajikistan will participate at a company level (Dushanbe is likely to send its air assault company); others will send platoons.

A Chinese military delegation has already "reconnoitered" the proposed training site, which reportedly led Beijing to allocate its newest battle tanks, in their first appearance abroad, and the latest FC-1 light multirole fighters better known as Super-7 or Chengdu J-10 or Lavi (Israeli version). It is really a plane with a storied past: powered by the Russian AL-31FN/FNM1 engines, it is based on an IAI-built airframe that Israel was eventually forced to sell to Beijing as the U.S. effectively banned it from building its own fighter.

Most countries involved, except China, Armenia and Belarus, are members of both organizations. Likewise, though the CSTO is a military-political alliance and the SCO is economy-powered, both have a number of overlapping challenges to address, which include terror, drugs, proliferation and all kinds of extremism, all expected to be included in the exercise plot.

Presidents of all participating countries - Russia, China, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan - are expected to attend the final combat stage. There is still uncertainty over the attendance of the SCO observer nations (India, Pakistan and Iran), while, according to Baluevsky, the formal invitation to his Chinese counterpart Colonel General Liang Guanglie would be sent in the coming days. The exercise will also be open to outside observers.

Remembering the consternation in the Western media over last year's Sino-Russian joint exercise in the Yellow Sea, fuelled by fears that the two countries were "rehearsing an assault on Taiwan," who will be targeted this time might look like a perfectly legitimate question. This question was asked very selectively last year (the Indo-Russian exercise was labeled "a Russian attempt to dominate the Indian Ocean", while at the same time the U.S. was running numerous supposedly peace-loving exercises with the Japanese, Australians and a dozen other nations). The new wargame will by no means go unnoticed - or uncommented-on. Don't bother to bet on whether the comments will be positive.


Druid: In taking in all the sensationalistic bs that tries to pass itself off as informative news this evening, I must have missed this story. I guess, if you're going to go through the trouble to acquire these high priced weapon systems, you might as well, on occasion, take them out for a test drive.

@Goldi, I hear ya brother:)

The Invisible HandJim Rogers - a dollar loyalist#14904011/6/06; 17:13:43

The euro will disappear within 20 years because of the inability of member states to stick to the rules underpinning the European Union's single currency, prominent U.S. investor Jim Rogers predicted.


Jim's credibility is now gone. His senility leads him to advocate the continued existence of the dollar-regime.
He dares not even mention the four letter word anymore.

The Invisible HandOil for gold, said you?#14904111/6/06; 17:26:35

Nov. 03, 2006
Russia Adds to Its Reserves
Yesterday the Central Bank reported another increase in its gold reserves, by $1.8 billion in the last week of October, to a total of $268.1 billion. Experts asked by Kommersant maintained that, for the growth rate of the gold reserves to be reversed, the price of oil would have to fall to $30 per barrel.
Experts asked by Kommersant maintained that there are no threats on the horizon of substantial slowdowns in the growth rate of the gold reserves, much less threats that the reserves will shrink. TsMAKP predicts that they will grow by a further $25 billion in the fourth quarter of 2006.
sorry if posted before.

The Invisible HandSomething for Jim Rogers#14904211/6/06; 17:32:43,,1940955,00.html

The EU economy will outpace America's in 2007 for the first time in years, taking up some of the slack in global growth created by reverses in the US economy, the European commission said tonight.
The US economy, hit by a housing downturn, is expected to grow 2.3% in 2007 and 2.8% in 2008.
Joaquin Almunia, economic and monetary affairs commissioner, said his officials had added 0.5 percentage points to their 2006 forecasts and 0.3 percentage points to their 2007 forecasts since the spring.
Growth in the eurozone is expected to rise from a paltry 1.4% last year to 2.6% this year, 2.1% in 2007 and 2.2% in 2008 - driven by continuing investment and stronger domestic demand.
Unemployment is scheduled to fall from a peak of 9% in 2004 to 7.3% in 2008, with the EU creating 7m jobs in the three years from 2006, while inflation is forecast to fall below 2% by the end of the period.
Budget deficits are expected to fall to 1.4% in the EU and 1.3% in the eurozone by then.

The Invisible HandChna's Ancien Regime vs Freegold aka dollarkaput#14904311/6/06; 17:44:19,,13132-2440506,00.html

China's mountain of foreign currency soars above $1 trillion
Authorities and economists increasingly concerned about how long country can continue with present monetary and exchange rate REGIME

While a key concern is that it could endure huge losses on its dollar holdings if the US currency depreciates, the very scale of its stock of dollars makes it hard to diversify into other denominations. Any large-scale attempt by Beijing to do so would risk triggering a dollar slump, presenting it with enormous, self-inflicted losses.

GoldiloxChina's potential losses#14904411/6/06; 18:00:04


"While a key concern is that it could endure huge losses on its dollar holdings if the US currency depreciates, the very scale of its stock of dollars makes it hard to diversify into other denominations. Any large-scale attempt by Beijing to do so would risk triggering a dollar slump, presenting it with enormous, self-inflicted losses."

How big will their losses be if they don't diversify?

I remember some analysts in 2000 were suggesting that "most people don't have enough exposure to tech."

Sounds like Ponzi Marketing 101 to me!

GoldiloxChrysler's inventory casts long shadow on Detroit#14904511/6/06; 18:12:32


DETROIT (Reuters) - Dusted with an early snow, hundreds of brand-new Jeeps sit parked in neat rows in barbed-wire-fenced lots at Detroit's airport.

All dressed up with plastic on the seats and barcodes on the windshields, the convoy-in-waiting has nowhere to go since Chrysler dealers are balking at taking on even more inventory.

Welcome to Detroit, a nearby sign reads. Welcome, also, to yet another indication of the crisis facing the American auto industry.

Since the mid-1980s, when Japanese automakers began making vehicles in large volumes in the United States, Detroit's automakers have talked of the need to better align production with demand and move to a model of just-in-time manufacturing.

But with the U.S. economy slowing and pressure to return to profitability mounting, DaimlerChrysler's Chrysler Group now has thousands of vehicles without any clear destination.

Larger rivals General Motors Corp. and Ford Motor Co. are grappling with inventory problems of their own even as they shut plants and shed tens of thousands of jobs.

"Things are starting to slow down and particularly for Chrysler trucks," said IRN Inc. analyst Erich Merkle. "And Chrysler has been slow to react to that."


Detroit's program of a "free vehicle with every home equity loan" is losing its appeal to the under-employed, "tapped out" consumer.

The Invisible HandThe Road to Freegold#14904611/6/06; 18:13:11


Let the USDX Maginot-line of 80 surrender and you'll see something (on Wednesday after the elections).

The present situation whereby the short-term interest rates are higher than the long-term interest rates cannot continue after Tuesday. The present situation was an attempt by our masters to subdue economic activity (recession).

On Wednesday 08 November 2006, the dollar-International Financial and Monetary System (IFMS) will be faced with a simple question.

they continue their EASY MONEY POLICY but let short-term interest rates decrease and long-term interest rates increase in order to put an end to the present rate inversion.

they switch to a HARD MONEY POLICY, i.e., to cleaning up the mess through further recession.

Since each alternative is in all respects as disastrous as the other,
it is obvious that gold / the price of gold is going to sever its link from "its" IFMS-basis.

That's the point. That's the core issue.

The TRANSITION PROCESS about which nobody dares to think.

Wait till Wednesday.

The Invisible HandThe valuer of toilet paper#14904711/6/06; 18:21:52


The dollar will have the same worth as toilet paper.
If China does not sell ALL of its dollars, its losses will be the difference between the present "value" of dollar and the (cleaning or other) value of toilet paper.
A lot of mess will have to be cleant up, so toilet paper will be very valuable.
Good luck for China, even if it does not sell all of its dollars, it will be left with something of value.
Wait till Wednesday.

The Invisible HandValue#14904811/6/06; 18:22:36

not Valuer
GoldiloxTP or ?#14904911/6/06; 18:42:29

@ TIH,

The alternative is to make Presto logs with it to replace the oil they are taking from the market.

Then they can sell them to those with the "surviving currencies".

TownCrierFOREX and gold activities of the official sector#14905011/6/06; 18:45:53

Hi Flatliner (and Knallgold)

For anyone following along, it would probably be helpful if we took a brief moment to acknowledge that the issues being discussed are very large and complex, and therefore, any treatment given in this posting format will of necessity tend be greatly abreviated -- providing only the barest sketch of the skeleton of the writers thoughts, which themselves are usually unable to be much more than comprehension of the outline with perhaps a few fortunate insights deeper into the body of the issue.

So with that preamble out of the way, maybe we can compare sketches a little more carefully and decide how much similarity or disparity there is between our bare bones.

Although it may have had this appearance, I certainly didn't intend for my comments yesterday to be construed as a supposition that the Chinese official sector would suddenly (and openly) begin to be seen buying gold with their current hoard of foreign exchange reserves. It is far more likely that a program of gold buying began earnestly yet stealthily in the 90's, and will likely remain stealthy until such day as the value of it must be revealed as a means to offset any hyperinflationary collapse in dollar-confidence affecting their (massive) dollar reserves.

To my mind, such a "sudden reveal" would likely have the sort of targeted market-moving price effect as I indicated in yesterday's post regarding the opportunity/ability for China to choose which market it is willing to move with a primary impetus.

Flatliner, regarding your sketch (msg#: 149027) I think this largely addresses your opening point about central banks' natural reluctance for buying gold openly. However, your comments expressed that they had a stronger revulsion, "They don't want to use it and never will." I think this extreme view ("and never will") neglects a due respect for the willingness of prudent men to make use of the best (or only(?)) exit from a burning room. At face value, your comment there only leaves us to wonder why the central banks still hold as much gold as they do!

You also expressed an overall skepticism regarding the idea that the gold avenue could, through skyrocketing prices, reasonably be used to absorb the imbalances and excesses now pent up in the dollar-reserve system as we know it. You fleshed this out fairly well, so I don't think my read on your thoughts is mistaken; leaving me with the need to recognize our disagreement on this point about viable exit strategies.

First a review of a snapshot of your comments on this item:

""""...if they took the 100 billion stored dollars and replaced that with gold, yes, they will have forced the gold price up and preserved their reserve in a non-printable money, but they will have also unleashed billions of dollars into circulation that will bid for goods and services. That second tier affect is just as bad as them running out and buying anything themselves. . . . . . . . If China bids up gold, all those who save the Chinese currency will move it into gold. That will unleash billions more in the act of chasing goods and services. Around the world, there will be a chain reaction of all savers unleashing their currency holdings to chase gold. The end result will be a total loss of confidence in printable currency. The privilege that central banks hold today will come under intense scrutiny.""""

To be valid, this viewpoint requires a very heavy reliance on the second tier effect and chain reaction effects that I do not feel to be completely warranted.

To introduce a counterpoint from humble beginnings, I would ask you to consider some examples that show that isolated effects are possible.

First, this largely assumes that, after an evolutionary set-up (perhaps much as we've seen in the gold market over the past decade+,) a sudden, stunning gold-price jump shall inevitably occur as the official sector does its final "reveal" simply in order to make necessary use of the available exit as the old theatre burns.

When common people wake up to read the morning news, and they see that valuation in the fine artwork sector has exploded, these people do not automatically dump their currency savings into the art sector. On one hand, they are sidelined by the newly risen costs and the related fear that they have already missed the boat. And on the other hand, they still hold onto their lifelong habitual concerns about keeping conventional cash on hand to pay for their bread and eggs and the mortgage on their house. When it comes to evaluating the likelihood of second tier effects (cost-push and demand-pull), we do better to liken the gold market to the artwork market. To most it could played in the media as a remote curiosity -- the price can explode in isolation without causing unmitigatable fear among the rank and file population. By contrast, the effect of second tier pressures would be vastly different if staples such fuel or bread were the ones seen exploding in price as a person reads his newspaper over breakfast.

That presentation was meant to be currency-neutral. The impact on second tier (chain reaction) effects becomes even more forgiving when the newspaper reports that the soaring price of a particular non-staple wealth asset is occurring in a FOREIGN currency. To be sure, skyrocketing gold in terms of dollar-denominated prices would signal loss of reserve-status for the dollar (along with its global depreciation and wholesale dollar-denominated price increases), but again, this need not result in unmitigatable loss of confidence in other national currencies -- don't these foreigners also have local bills to pay and food to buy requiring local cash?

History is full of examples of specific nations whose currencies hyperinflated in relative isolation without necessarily causing chain reactions among their peers.

As the current center of our international monetary system's reserve structure, the dollar is certainly a unique case without precedent, but the above points remain largely valid. Granted, as stipulated above, the price of gold cannot possibly hope to skyrocket as an isolated asset sector without also signaling higher dollar-denominated prices across the board, but this hyperinflation of general dollar-price levels is a reflection of the unique case. In terms of other currencies, local gold prices could soar while other local prices remain moderately stable -- thus adding no definitive impetus to an international chain reaction of currency failures as you suggest.

It will certainly be a delicate and challenging balancing act to keep the whole thing from toppling in upon itself, but frankly I think the central bankers of the world recognize that this gold avenue is the only viable exit strategy in light of the current position. But we as individuals would be fools to put our complete faith in their ability to make it through the smoke without stumbling -- we would be fools to choose fiat currency as our form of savings. And in this regard, the latter part of your sketch and mine are in complete agreement:

"To the smarter-then-average individual, they will look and see that saving fiat currency leads to imbalances that cause very complicated financial policies.
"If from day one, no one saves fiat currency, any inflation in the currency supply will be felt much, much, much sooner than if it's horded as a store of value. As we move forward and find ourselves dealing with the unleashed savings of the world, individually, we should take a stand against invisible taxation by not saving currency. Let cash be cash flow and turn surplus into assets."

Amen. Choose gold as the most convenient of those assets, and as the one asset most likely to absorb the vast value transcending its way specifically out of the U.S. Dollar branded currency hoards of the world.


GoldiloxTHE DOLLAR MAY FALL AFTER THE ELECTION#14905111/6/06; 21:03:21


Making short-term predictions about the dollar is notoriously difficult. So why do we say the dollar may fall after the election? Once we know what the future composition of Congress will be, the markets can shift focus from the excitement of the moment to what may lie ahead.

We believe we have just seen the beginning of a more pronounced slowdown that will likely push us into recession. The reason why we are more negative than many economists is that high levels of consumer debt make the economy much more interest rate sensitive than in past economic cycles. An area where this is particularly apparent is in the housing market, as consumers in this so-called ownership society have massive levels of debt accumulated in their homes. Given that only short-term interest rates have risen, only the most speculative homeowners with adjustable rate mortgages should have been affected. But in a world where the speculators have driven up prices, the speculators are also dragging the entire market down with them as the housing bubble deflates. If and when long-term rates reflect that we may be heading into an inflationary or stagflationary environment, the fallout for the housing market could be severe as higher long-term rates squeeze masses of homeowners who need to refinance their mortgages in the months and years ahead.

For now, market commentators try to grab on to every bit of good news released. The "best" news seems to come from corporations that are involved in the option backdating scandals: these companies do not report their balance sheet while they investigate their wrongdoings. Wall Street loves them as revenue is the only reliable number released - and our executives have become experts as generating top-line growth. Indeed, in recent months, just about any piece of news has been interpreted as good news by the markets. Even in a perfect world, it is time to get very concerned about such exuberance. But the world is not perfect: when retail stores have same-store sales increases behind the rate of inflation, when hourly wages rise at a rate higher than economic growth, we have all the hallmarks of stagflation.

Remember those who were touting to buy stocks at the top of the dot-com bubble? Remember those who said there is nothing to fear from the housing market only earlier this year? These are the same pundits who called the top of the commodity boom this summer. It turns out that while the economy is slowing down, oil is about 50% higher than two years ago, gold is again above $600 an ounce, base metals hover once again near their highs.

Investors have been distracted from the big picture. And this is where the election may play a pivotal role. None of our challenges have gone away; but we now are faced with an economy that may slide into recession. The best news about the new composition in Congress is likely to be that it will get less done, which means that politicians can spend less. But just as equity and bond markets have priced in perfection, investors have also given more confidence to the dollar than it may deserve. Then again, many investors are not aware of just how much the dollar has weakened.


The last sentence may be the most important one!

mikal@Goldendome#14905211/6/06; 21:05:17

Great post on platinum. I agree with everything you say in summarizing why gold greatly outshines platinum.
I have posted similar thoughts on silver and have a
big new essay on this yet to be posted here.
I own silver(and would own platinum and palladium too
if enough funds were available)because the coins are beautiful, hard assets that retain their value as Goldilox says of jewelry, but without the large making(crafting) charge of jewelry from most areas of the world.
But gold today is sought after as an investment
to such an extent, that I put just a small percentage into silver.
I have largely disregarded Another(or was it Friend of Another, aka FOA, Trail Guide, Sir Douglas?)in investing
anything in silver simply because I believe it will retain
significant value, historical interest and beauty alongside some attraction as a commodity.

GoldiloxHousing Vampires Walk Streets After Halloween#14905311/6/06; 21:13:14


Bela Lugosi created the vision of vampirish evil in the 1931 classic movie, Dracula, and, as a Halloween costume, the vampire look has never gone out of style. But what if Dracula were more than just a scary character? If he were real, he'd be the perfect explanation for the goings-on in many boardrooms of public companies and on the streets of our neighborhoods (and I don't mean little kids wearing black capes and shouting gleefully, 'Moowah-ah-ahh').

After all, doesn't the back of your neck stand up when you hear the stories about blood-sucking CEOs who backdated their stock option grant dates to take home millions more with no extra effort? There they were in their offices late at night. The clock struck midnight, and out came their fangs. In the dead of night, these CEO vampires roamed their headquarters, searching for the document that listed their stock options. Once they found it, they sucked the blood from shareholders by changing the grant dates to more favorable ones when the company stock was at a low point for the year. Now some daylight is being shed on their nocturnal habits, thanks to a Wall Street Journal report that led to SEC inquiries and internal investigations. These investigations are driving stakes through their hearts. So far, more than 20 have resigned or been fired from their companies – all because they had to have more than their fair share of the lifeblood of their companies.

The more serious threats to the economy and life as we know it, though, will come from the undead who will still roam the streets well after this year's Halloween candy has been eaten. They will be those folks who overextended themselves to buy a handsome Gothic mansion in a friendly subdivision. And they will have one thing on their minds – needing more cash to make their monthly mortgage payments, particularly after their adjustable-rate mortgages are re-set. One estimate suggests that 2007 will be the Year of the Vampire, as $1 trillion-worth of ARMs (or 12% of all U.S. mortgage debt) will be readjusted upward, increasing monthly payments and adding to homeowners' burdens. The mortgage companies will want more blood from their mortgagees, yet these homeowners have already been bled white: where will they find the cash to make the payments?

As prices of both new and existing homes fall in many parts of the nation, more ordinary people will become unwilling footsoldiers in the vampire empire, because they won't be able to refinance their homes. Or, to use the vampire vernacular: They won't be able to get any more blood from their houses, which will be cold relics of themselves. Homes that once pulsed with life will now be peopled with deathly white homeowners trying to find more cash-blood.

Those who own their own homes or who can handle the mortgage or the rent payment may need to start carrying garlic and wearing crosses. Suppose your favorite sister calls to say that she and her husband need some help making ends meet with the mortgage. How will you respond – send the money each month or offer room in your own home? Suppose your friends receive an unwelcome letter coldly stating that their new monthly payment has just increased 50%. Will they lose all color from their faces? Will they suddenly feel a strong need for cash – or what Lugosi used to call 'blahd' in his thick accent? And -- again -- where can they find the cash?

They might try fixing their hypnotic stare on search engine company Google. With its stock price now approaching $500 a share, its stock market capitalization is more than $145 billion.

Or maybe they could fly after some of the military contractors who are awash in red-blooded contract money. According to the U.S. Defense Department, the Top 5 defense contractors for fiscal year 2005 are Lockheed Martin with $19.5 billion in contracts, Boeing ($18 billion), Northrop Grumman ($13.5 billion), General Dynamics ($10.6 billion), and Raytheon ($9 billion).

Ah, but the Federal Reserve is probably the best bet of all. It should be happy to hand out more credit. That's how we got in this fix in the first place. Ben Bernanke looks a little pale already, but Alan Greenspan should be rested now after his retirement and ready to give blood. But even he may find that this credit game is harder to play with so much national debt. More than a few market-watchers are less than sanguine about the future for the economy. Robert Prechter of has written about the wages of too much credit in his business best-seller, Conquer the Crash. Here's how he puts it in his November Theorist:

"We all know about the insane level of American indebtedness at all levels of society. We know that the national savings rate is below zero. We know that people have borrowed record amounts from home equity for spending and that the game is up. We know that declining real estate values are forcing a rash of foreclosures, and we all know that the reckless lending of the past two decades will stress the banking system. The credit bubble represents only potential for a bust – huge potential but just potential nevertheless. None of these conditions will matter to the economy until the stock market turns down in a big way. When it does, you will know that the social mood that kept the American financial casino going will then be working toward its destruction." [The Elliott Wave Theorist, published October 20, 2006]

Remember, with house-poor vampires on the loose, you want to stay financially healthy by living in a modest little castle that you can afford. Stay away from mortgage lenders who want to suck the blood out of you. In a few more months, you may also want to be wary of your next-door neighbors who have the For Sale sign out in their front yard. They may be getting desperate to meet those mortgage payments the longer their house stays on the market. And if your face is unlined, and you look like you're saving some money for your retirement and for sending the kids to college, besides paying off your mortgage, you may be their next victim. Moowahh-ah-ahhh.

melda laureThe road goes on and on. and on... and on.... ... and on.........#14905411/6/06; 21:13:49's_choice

@ Mikal #148976

I want to see if anyone has anything to say about the IMS(Int'l Monetary System) dependence on the House of Windsor to rule America through it's "royal" presidential proxies.

This is one of those touchy topics that require special care. I think I have been listening to that lecture and I wanted to make a few short comments, and refer to Ten Bears Link of Ms x otherwise excellent historical review. I have never been partial to zionist banking conspiracies because they grossly oversimplify what are complex and messy relationships and it is all too easy for some to overindulge in their personal hatreds, at the same time it requires the full historical facts to keep the activities of these actors in perspective. Were this the 15th century would we not be grousing about how all the world's ills are the fault of house Medici?

Again, to keep this short, I asked the plain question:

Why do we not yet have freegold?

And Sir TC was kind enough to point out the obvious glaring hurdle that the US FED still holds significant quantities of european gold underneath the streets of New York, (as well as gold of other players). Yet we should also ask what other hurdles, "hobson's choices" and prisoner's dilemmas stand in the way.

Thus, keeping this short, IF the United States, via the FED is under the control of the Crown, or a certain banking family, or even an association of all the crowns of europe (if you like) THEN it follows that they will not destroy their favourite chess piece for naught. Moreover, in spite of the incredible power of central banking and of the unmached capability of the US in conventional military forces, yet all this has not sufficed to deal with an insignificant and unassuming islamic country, (and mind you, I am not passing any judgement on that particular endeavour, but rather merely pointing out that the US has not yet achieved what they had hoped).

So from a purely chessplaying standpoint, it seems The Game has reached an unsatisfactory roadblock (if you want to call it a Nash Meta-stable-Dis-equilibrium go ahead). The players will have to reasses their travel route. Money and Power will keep one in the driver's seat, but they cannot control the weather nor road conditions. Of course FreeGold is still on the itinerary, but the road may wind about in unexpected ways.

That's about as neutral as I can make it. There may be other large issues which I leave to others to enumerate. In plain: europe needs oil too, and I will not estimate middle eastern appetite for european paper when china has alternatives.

melda laureIt's a really nasty disgusting question, "so uncivilised."#14905511/6/06; 21:41:51

So many things I would like to say, and oughtn't. From a gaming standpoint indeed. Phrasing it as a question, IF the US dollar could be taken down as simply as pulling the plug, THEN what are the necessary preconditions before the charges are lit?

I suppose it depends on what cards one holds! You dont pull your sixguns while you have a potential winning hand, at least not usually. (Vague, isn't it?)

Sir Mikal, that was Mr Eustace Mullins little rant I belive? I haven't heard all of it yet, so I will be a while longer for me to place the pieces on the board before further comment.

Flatliner@TownCrier & FOREX and gold activities#14905611/6/06; 22:06:10

You have a way with words that are sculptures next to my rambling thoughts. Time limits writing to "only the barest sketch of the skeleton of the writers thoughts", which I completely agree with.

The "They don't want to use it and never will" comment below should really be tempered into the context that they really don't want to use gold. They will fight in any way possible to not have to use the physical resource and do everything that they can to preserve confidence in the right to print currency. I can't help but look at actions in the face of public comments. Even when Russia announces that they will increase their gold reserves, which we all know they could do in a heartbeat, they stall. Sure, we see MTM notices, but weight changes are hidden behind dollar denominated statements that do not adequately describe what's really going on.

Reading between your words, it might be that you agree with me that central banks will not bid for gold. That seems to be supported with the "sudden reveal" idea that you express. A ‘sudden reveal’ would be something like oil trading for gold. Or some other functional commodity calling gold home with an honest exchange. The ‘sudden reveal’ idea would definitely remove the loss of confidence implied by a central bank bidding for gold. An honest tradable price for gold would also make it possible for central banks to reallocate their reserves question free - openly. This would, by far, simplify the entire problem that I outlined. I would guess that the second tier actions in the ‘sudden reveal’ situation would happen within the gold community itself. The investment hands would place their gold into circulation reaping their dollar rewards.

I completely agree that a ‘sudden reveal’ will be a delicate situation to navigate but completely doable. A hyperinflation in the price of gold without an actual bidding war will cause an mind altering shock without the fear of loss. At the same time, the fiat exchanges continue unhindered. Imports and exports continue just as today, but the wedding ring that you wear now becomes precious.

We will watch. I still believe that central banks will not bid for gold. I also believe that central banks will not release their holding either. No one will willingly rock the boat in the current situation. No one wants to take the blame. Even though central banks hold gold, they know that it's as insurance for the right to print currency.

In this out of balance environment, the individual has an opportunity – a very golden opportunity. What is not precious today will undoubtedly be after this ‘sudden reveal’.

TownCrierFleshing out the bones#14905711/6/06; 22:30:54

Flatliner, thanks for kindly adding extra meaning to BOTH of our sketches!


melda laure(No Subject)#14905811/6/06; 22:51:06

Yes that first paragraph was truly a bit of wizards wisdom.

I was thinking that it all depends on which central bank. I could imagine a few small "totally co-opted" nations who would stay in the burning room to the bitter end, if a suicide mission were in the interests of their overlords. Canada dumped theirs, Suriname... it's too horrible. I could also imagine a Cuba or Bhutan saying "gimme" in total defiance (as long as the offtake were small).

GoldendomeDollar knee-jerk on Wendnesday? Possible. Collapse? No.#14905911/7/06; 00:00:52

Regardless of what transpires on Tuesday, Wednesday's dawn will find the world much as it is today. Too much is invested in the dollar to allow it to crumble, quickly. Too much power is held by those who benefit from the printing presses not to support the confidence game indefinitely into the future, IMO. As Flatliner has stated, and I agree, the Central Bankers have all climbed into the same boat. They all benefit from the efforts to navigate the paper boat of fiat currencies through the turbulent currency storms. Should one banker wish to lighten their load of dollars, there are many more to step in and support the market at some point.

China has over a Trillion dollars of foreign currency now. Though those dollars are steadily losing some buying power, they benefit from their own inflation and exports that grow from those dollars, more than they lose to dollar inflation. IMO again, Gold is a sideshow to these central bankers. They benefit *SO* overwhelmingly from inflation, that any thought of gold on their parts is really just a passing fancy. This worldwide confidence game may go on for a long, long time. Particularly, if the central bankers themselves don't pull the curtain back to reveal the farce behind! That does not mean that as fiat currencies and debt continue to proliferate worldwide, that we won't see gold continue to rise in value. I think that we will. But don't look for the dollar to be scuttled--at least in the short term.

slingshotSound the trumpets#14906011/7/06; 00:34:25

I have been away for sometime but return to find the Castle has been well defended. The war maps have shown that Breakouts in both gold and silver have occured and those Knights have stoodfast. Town Crier and Sir M.K. have
kept our army from deserting with the help of such noble Knights as, Melda Laure, TIH' Goldilox, Mikal, Goldendome Armageddon, Cris Powell, Druid,Flatliner, Knallgold and I see a new Knight Joepicker.
As for my absence, I was beseiged. Caught in a myriad of contrversy and unable to continue the story to which I most humbly apologise to my readers.
I call forth Sirs Black Blade,Otish Mountain, Belgian Cobra too,Talga. The Great Wizard Gandalf and Lady Waverider. I summon all Knights to the "Table Round" to make themselves known from a simple post at the forum.
Let this show who we are!


Show yourselves and be counted at the Table Yore!


slingshotBeing intimidated#14906111/7/06; 00:53:00

For those who lurk at this forum and have something to say but are afraid to do so, I say post what ever you want if it is in the guide lines. I am a small time investor STINT as I abreviate. Do not fear the major posters. They are here to help you understand the world and smaller economys. The past 4 years or so I have never been more kindly accepted as this group of posters. Not to mention the kindnes of the host of this forum. Especially Jonathan.
Yeah, I still remember our phone conversation.

slingshotWondering#14906211/7/06; 01:02:27

Anybody out there?
melda laureSauve qui peut!#14906311/7/06; 01:05:29

Enough of the politics and chess games! Now is not the time to affix blame (we'll have ages enough to chew that and plenty to spread around on both sides of the aisle). The City is Burning, the foundations set to crumble. Voting cannot avert the storm, let not the swift await the slow - the fire will take the hindemost. It is time for a personal asset protection plan.

Take what physical gold you can carry, the orcs will torch all paper, sparing neither reds nor blues nor green$.

slingshotmelda laure#14906411/7/06; 01:09:38

Yes! Yes! Call it like you wish. A call to arms. We are strong in numbers and we call it like it is!

slingshotmelda laure, are you French?#14906511/7/06; 01:17:40

Kiss you on both cheeks.

slingshot9-10 thousand. Anybody down under?#14906611/7/06; 01:26:03

I'm easy to talk to.
slingshotBelgian#14906711/7/06; 01:59:36

Miss your posts

slingshotTalking around the world#14906811/7/06; 02:16:07

There was a time that forum posters had access to information from posters around the world / 24 hrs a day.
To Sir M.K.
Due to the amount of registered posters I would not give any gold away. ( Notice I say Give) unless there is at least 200 entries. because you are International in your contest.

slingshotOh Lordy#14906911/7/06; 02:23:35

Let me make myself perfectly clear. That the winners were winners. Yes Congratulations for sure on the last contest.

TopazBond.#14907011/7/06; 02:41:14

This thing is looking like it's picking up steam with the aftermarket currently showing 9/32 Green. Dow futures also Green, these two can't share the spotlight so one will capitulate. For Golds sake I hope it's Bond.

Slingy, welcome back!
We ran our Melbourne Cup today, I backed the third place getter each-way and got out with my shirt ...and a sore head.
Join me in a Bex, a cuppa Tea ...and a good lie down ;-)

slingshotHey Topaz#14907211/7/06; 02:50:59

Nice to hear from you. Good that you kept the forum alive. yeah I did read some posts now an then but you know I was like the guy in the tractor getting the golf balls and everyone had to take a shot at me on the driving range ;0) The forum is like a rock. You can leave and come back and it is like you never left

ToolieSlingshot,#14907311/7/06; 02:52:23

Welcome back, from much besieged Detroit. Lots of moving sales around here these days, and a whole lot of property for sale. The last I read, U-Haul was having a hard time keeping trucks for outbound traffic. When the big three started to shift production of tools and engineering to third world countries 5 years ago, the impact was limited to small time shops. Now that they are cutting vehicle production, the tier 1 suppliers find themselves in the position of having to bail out their suppliers, lest the dominos fall. If it weren't for their ham-handed leadership, they'd have my pity.

I hope all things are well you and yours.

slingshotToolie#14907411/7/06; 03:01:44

Welcome Sir Knight
I thank you for approaching the "Table Yore". We have lost so much in membership as they encountered the correction. Only to fell the support that will bring us to heights ( With corrections) where we have not gone before.

slingshottoolie#14907511/7/06; 03:17:37

Forgive me my fellow Knight, for I was exurberant in your reply and not to its susbstance. They are gutting the U.S. manufacturing base to china.

TopazToolie#14907611/7/06; 03:20:20

I'm in Oz and do a lot of City miles/week.
The thing that has struck me lately is the HUGE array of Makes ....and to compound that the VAST number of different Models of those Makes, on the roads today.
We're only a small country (20mil) and are trying to support 4 (that I'm aware of) Manuf/Assy plants ...with this variety of homegrown PLUS imports the industry is doomed here too I'm afraid.

slingshotHey Topaz and Forum#14907811/7/06; 03:36:01

Do you really want to know, from an average investor has to say! I CAN NOT AFFORD ANY MORE METAL AT THIS PRICE! I have to pay bills and taxes. Put food on the table and so on. Remember when I told the forum I will purchase till I could not afford. This is the limit! According to my expenses, this is it.

Topazslingy.#14907911/7/06; 03:44:19

shhh, if the Cabal gets wind of the fact you're all tuckered out ...well who knows where the price might end up!

Let the Family eat Cake ...and keep on buyin'

slingshotYes Topaz#14908011/7/06; 03:59:42

Understand that there are those that believe and have brought metal in its profitable range but now see it rising above its attainable range.

Spector of things to come?

Think, for I am the first of many.

spikedogWelcome back Sir slingshot#14908211/7/06; 06:37:08

Sorry for the late response; word takes a while to reach this end of the castle. The kitchens are a long way from the Table Round.....
Chris PowellBank of China offers gold options, silver forwards#14908311/7/06; 06:38:09

From Reuters
Tuesday, November 7, 2006

BEIJING -- The Bank of China said on Tuesday it is offering gold options to individual account holders and silver forwards and silver leasing to its corporate account holders. Some Chinese banks already offer 'paper gold' and other gold-related investment tools, to attract deposits from increasingly prosperous domestic clients.

"In light of more volatile gold prices and to protect against rising risk in gold products tied to settlement prices, the Bank of China has offered its clients a new risk-management tool," it said in a press release on Tuesday.

Gold prices hit a two-month high on Monday, as sentiment on the U.S. dollar weakened. Gold and silver both hit a 25-year high in May of this year.

The Shanghai gold exchange launched a silver contract last month. International silver prices also hit a two-month high this week.

Clink!Chrysler woes#14908411/7/06; 07:05:04

The problems of the overstocking aren't limited just to the manufacturer. There's a discount dealership here in the Tampa Bay area who put their entire stock and the non-negotiable price for each one on the web. In my experience, these prices are well below other dealerships in the area. At the moment, there are 91 vehicles in stock, of which only 8 are '07 models - the rest are all '06s. That's some stock overhang they have to clear - probably explains why I have now had three letters from them advertising increasingly "silly" offers.


slingshotBeen a long Night#14908511/7/06; 07:15:36

Before it had been a couple of months since I had made a post at this forum and within that interval I did read many posts by this forum's Knights and Ladies. The purpose of my posting, especially Msg 149080 was to inform you that the window is closing for some of us. The Invisible Hand and Goldilox,I commend for their fortitude in bringing things to light, but I have always been for the Small Time Investor and was shocked by the number of passes to this forum with no input at all. I happen to read a commentary that stated that Gold Bugs see things in LONG TERM. Eventhough we would like the satisfaction of happening right away. So my fellow Knights and Ladies I do not see this transition, or better put, the less accumulation of PM's as a negative point. Only that it confirms, sooner for me, and later for others, what is most confident to occur. That is gold to rise beyond our dreams. All that I have read in the ABC book has been on mark and even Sir M.K. and his Trusted Wizard could not foresee everything.
One last point. I would ask that some of those 9 thousand lurkers post a comment or two. They have never taken my head off here, although I might have deserved it ;0)

Clink!Hey ! It's Election Day ! Don't forget to vote !#14908611/7/06; 07:20:26

And if you are lucky, they may even be counted the way you intended. Even more interesting than that Google video I posted a couple of weeks ago is the 90 minute HBO special that is airing at the moment called Hacking Democracy. Scary stuff, although I wonder why, considering that most of the material is several months old at least, they only chose to show it now, when it's too late to do anything this cycle.

On a personal note, this morning I voted for the first time in this country. After signing the register, I was given a smartcard to insert in the machine. I just couldn't believe it. I mean, having the individual voter place something (out of the sight of the supervisors) into a machine with secret, proprietary code. I can't think of an easier way of ensuring that their are indetectable back doors into the system. I seem to remember reading a comment somewhere recently that it would be hard to design a machine which is more hackable - I would concur. Sorry, rant over. At least the use of the cards means the increased use of gold to plate the contacts.


slingshotHail ,Sir Spike dog#14908711/7/06; 07:22:01

The kitchen is a wonderful place and a great chef, can do wonderful things, for both mind and body.

Paper AvalancheHi Clink!#14908811/7/06; 07:42:30

In Arkansas the voting machines generate a paper receipt that simultaneously prints your selections as you are making them. The paper reciept is then stored in the machine (which I am certain could be "lost") but is not actually issued to the voter. Seems like a pretty good way to have an auditable, PHYSICAL trail to compare against whatever results the election commission may report. IMHO, unaudtiable results from all other voting machines are no more real than enron stock, credit swap derivatives or the social security trust fund. The story will be whatever those who pay the story tellers want it to be.

I liked a quote that I saw earlier on the forum that if voting really changed anything it would be made illegal. I guess that it is a panacea for the sheeple to feel that they are in control.

On this election day, vote for the ultimate store of wealth by selecting physical gold over paper promises.

Take care.

arbyhArise and Shine#14908911/7/06; 07:53:33

Arise and Shine - for it is a bright and shining new day in which to endeavor in wondrous new activities. - John A. Hort

Time for a shift in power at the feed trough. The wealthy have fattened for too long. The game will soon flounder and leave all but gold in the hurt locker.

Sierra MadreSlingshot, don't give up!!#14909011/7/06; 10:57:50

Slingshot, if you cannot afford gold, go for SILVER!

Silver has always been "the people's money" - I believe I am right in saying that this whole "world monetary mess" began with the demonetization of silver as the first step by weaning people from the use of silver as money.

Only gold was left, purposefully, as money for the wealthy.

The last step is killing gold's reputation as an eternal valuable asset - which TPTB are now frantically attempting, but, they are losing and will most certainly lose.

Gold as too expensive for you, is part of the plan. Thus, you MUST revert to silver.

It will perform the function you require - the provision of a safety net for your family.

And by the way, L. Frank Baum wrote "The Wizard of Oz" with this problem in mind: Dorothy's shoes were SILVER SHOES (which in the film were cast as red, because the red color showed up better on film.) which shoes could grant her any wish. The book is really an allegory regarding silver money.



FlatlinerEmptying the magazine #14909111/7/06; 11:00:52

Ah slingshot, it's not about being able to afford it, but rather knowing what it's for. I'm sure there is no knight in the castle that expects to carry the full weight of physical starvation revaluation on their shoulders. The burden would be crushing. At the same time, what is seen as not attainable today to one, is child's play to another. Hold your bedrock and turn over the next stone.

Don't let the currency exchange price of gold fool you into not seeing the real transition that it taking place. Speak of your understanding of gold with others. Share with them what it means. Show them what is clearly visible and lead by example. One by one, people will come to see the true value of their situation and weigh in on the golden scale. Deception and misdirection will stir people at any moment into any price of gold. It truly matters not what the price is to those that understand the value of personal property and freedom.

Help others wake up. The matrix is thick, but we have the most amazing tool available to us that just involves connecting in and making reasonable observations. For those that look hard enough and long enough, they will see that gold is your long term ticket to freedom.

It is hard to put complex understandings into short paragraph form, but to the observant, they will see that there are simple signs that show that paper is very well organized in its effort to keep individuals from owning physical assets. Facts show that inflating the currency supply always leads to price inflation. But, that only happens when the currency actually chases goods and services. Savers of the world have collected trillions in what they see as wealth in all their paper plays. Those in control of the rights to print paper, know without doubt that if this savings is unleashed on goods and services, it will be a cascading waterfall of pain. Thus, we read every day that some new bank has created some new paper ‘asset’ that can be used to absorb some more of that worldly savings. I see two possible paths with the same outcome: we continue to walk our current path where paper continues to find creative ways to prevent people from spending their savings or there will be a huge transfer of wealth from those that do not fully understand paper to those that do. The end result in either case is that the individual is robbed of their wealth and forced to pay interest on debt that cost the banker nothing to create.

Gold represents freedom from this oppression. As you watch your loved ones struggle under the burden of interest and see their hard fought savings leak through the holes in the paper container, you can teach them how unencumbered allocated gold will always be there for them and it will not charge them 5% per year commissions.

As Black Blade always says, get out of debt get you some physical assets.

GoldiloxRussia gold, forex reserves up 50% in 10M06, to $272.5 bln - CBR#14909211/7/06; 13:42:20


MOSCOW, November 7 (RIA Novosti) - Russia's gold and foreign exchange reserves rose 49.55% in the first 10 months of 2006, to 272.54 billion, the Central Bank of Russia said Tuesday.

The CBR said that as of November 1, foreign exchange reserves stood at $187.6 billion, gold reserves at $7.58 billion, and other reserves at $77.1 billion.

The CBR said in October that reserves were up 2.38%, from $266.2 at the beginning of the month.

The CBR said earlier the continued strong rise in Russia's gold and foreign exchange reserves is due to the high world prices for Russia's main commodity exports, as well as the country's macroeconomic situation and policy.


As Sinclair reminds us, Putin does not play for chump change!

GoldiloxOrtega leads Nicaragua poll race#14909311/7/06; 13:59:57


The one-time revolutionary has 38.6%, eight points ahead of his conservative rival Eduardo Montealegre, results from 62% of polling stations show.

Washington has warned that Nicaragua could lose American aid if Mr Ortega - a US foe in the 1980s - is elected.

Mr Ortega needs to win 40% of votes, or 35% and a five-point margin, to win outright and avoid a second round.

Mr Ortega led Nicaragua from 1979 to 1990.

Mr Ortega says he has changed from the leader who seized property from the wealthy during the 1979 Sandinista revolution.

Mr Montealegre dismissed the partial results, saying he would face Mr Ortega in a run-off.

No-one has won here, we are going to a second round.
Eduardo Montealegre

"No-one has won here," he said. "We are going to a second round."

He also highlighted voting irregularities, saying: "In a democracy, that is unacceptable."

The poll is being watched by the US, which is concerned that its former Cold War enemy could be returned to power.

Chief Nicaraguan election official Roberto Rivas struck out at a US embassy statement suggesting "anomalies in the electoral process".

"We have promised the Nicaraguan people transparent elections, and that's what we've done," he said.

Mr Ortega's opponents say he would take the nation back to the days of the civil war with the Contra rebels.

'Savage capitalism'

Turnout was reported to be high with some people having to join long queues to vote, but election observers reported no major problems.

Mr Ortega has unsuccessfully stood for president on three occasions following his sole success in 1984.

There are five candidates in all.

Mr Ortega has seen 16 years of conservative governments and says he wants an end to "savage capitalism".

But he says his revolutionary days are behind him - and his main priority is to secure foreign investment to help to ease widespread poverty.

Mr Ortega has been endorsed by left-wing Venezuelan President Hugo Chavez.

He was also hoping for support from the 80% of Nicaraguans who live on $2 a day or less.

"He is the only one who looks out for the poor. All the others are just for the rich," said William Medina at a Managua polling station.

As a Marxist revolutionary in the 1980s, Mr Ortega led the country through a decade of civil war in which his Sandinista forces fought rebels known as the Contras, who were financed by the United States. About 50,000 people died in the conflict.

The election was overseen by 17,000 observers, among them ex-US President Jimmy Carter.

The incumbent, President Enrique Bolanos, has served the single five-year term allowed by the constitution.


One of the "other elections" going on.

Flatliner@Russia gold, * reserves#14909411/7/06; 14:08:47

In my gray haired youth, stating the gold reserves in dollar equivalents is a little misleading. IMHO, Gold reserves should be stated by weight. On Nov 1st, gold traded for about 620 an oz, so $7.58 billion should resolve to about 12,225,806 oz or about 382 tons (/32k). Unfortunately, I cannot find how many oz gold they reported earlier this year.
GoldiloxGarbage in, garbage out#14909511/7/06; 14:29:13


In an apparent and rare in-house critique, the president of the Federal Reserve Bank of Dallas said that because of faulty inflation data, the Fed kept interest rates too low for too long earlier this decade, fueling speculative housing activity.

A number of critics have said the Fed under former chairman Alan Greenspan kept monetary policy too easy from 2003 to 2004. But Richard Fisher's remarks to the New York Association for Business Economics yesterday mark the first time some Fed watchers could recall a sitting Fed policy maker making such comments.

Mr. Fisher said from 2002 to early 2003, inflation, as measured by the price index of personal consumption expenditures (PCE) excluding food and energy, was running below 1%. That suggested that a serious shock to the economy could turn inflation to deflation, or generally falling prices. Deflation makes it much harder for the Fed to boost growth by engineering deeply negative real, that is inflation-adjusted, interest rates.

To reduce the risk of deflation, the Fed lowered its target for the Fed funds rate -- charged on overnight loans between banks -- to 1% in June 2003 and held it there until mid-2004. It has since raised it to 5.25%.

Mr. Fisher noted that subsequent revisions show PCE inflation was actually a half a percentage point higher than originally estimated. "In retrospect, the real Fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer than it should have been," Mr. Fisher said.

"In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today...the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country. It is complicating the [Fed's] task of achieving...sustainable noninflationary growth."

Mr. Fisher, who took office in April last year, said in an interview that his speech wasn't meant to be a criticism of the decisions Mr. Greenspan and the FOMC made then. He said: "I wasn't at the table at the time -- it's easy to look at things with 20-20 hindsight. The point is we need to continue to improve our ability to develop and work with better data."

Jan Hatzius, chief U.S. economist at Goldman Sachs, called Mr. Fisher's remarks "pretty striking," while noting it is Mr. Fisher's style to be opinionated. He added that while he agrees the Fed's policy from 2002 to 2004 fueled speculative housing-bubble activity, it was still reasonable "knowing what you knew at the time. You take out some insurance against a really bad, low-probability outcome, and after the fact you regret having paid the insurance premium."

Mr. Fisher said inflation, at about 2.5% now, is still higher than his "comfort zone," but it is possible it "has peaked and is finally heading lower."

Fed governor Susan Bies echoed that sentiment in a speech to Drake University in Des Moines, Iowa, saying, "inflation appears poised to decelerate in coming months... but the risks to that outlook seem tilted toward the upside."

Gandalf the WhiteHAIL Sir Slingshot !!#14909611/7/06; 14:46:08

Far too many things to keep in the air nowdays causes me to be thinking of "cloning" !

Golden LionheartCloning!#14909711/7/06; 15:45:43

Sir Gandalf...........Don't let Dubya hear you say that!
mikalRepo "trading" slows after warnings#14909811/7/06; 16:21:04
Trading fall hits US repo market
Tuesday November 7, 5:05 pm ET
By Saskia Scholtes and Michael Mackenzie in New York
Activity in parts of America's $4,000bn Treasuries market has fallen sharply in recent weeks as banks and others have cut back on aggressive trading amid investigations by regulators into alleged market manipulation.
Traders say an auction of US government bonds due to take place on Wednesday and Thursday have triggered a far lower level than usual of related activity in the "repo" market, as banks scrutinise their trading strategies.
On Monday, compliance officers and the heads of Treasury bond trading from the 22 primary dealers were summoned to a meeting at the New York Federal Reserve to discuss concerns about a rise in questionable trading activity. Fed officials advised dealers to integrate strong management oversight and compliance into their daily operations.
Repo agreements are linked sale and repurchase deals by which participants can borrow securities for short periods in return for collateral, usually cash. In effect, it helps those selling bonds short to borrow the notes they need to do so; it also allows traders to raise short-term funds using bonds as collateral.
Such activity is crucial ahead of Treasury auctions, when demand for selling current Treasury issues in the repo market generally rises sharply as traders foresee hefty selling from investors. This allows traders to position themselves for the market move by selling bonds short.
This process usually sends repo rates below 1 per cent. However, in recent trade both the three and 10-year notes have been trading near the normal overnight lending rate of 5.3 per cent. The Treasury will sell $19bn of three-year notes on Wednesday and $13bn of 10-year notes on Thursday.
Scott Skyrm, senior vice-president at FIMAT USA, said: "There has been a cloud hanging over the repo market heading into the refunding. It takes time for people to build up positions in repo ahead of auctions."
Dealers said on Tueaday that stark warnings from the US Treasury, New York Fed and Securities and Exchange Commission had pushed market participants to the sidelines.
Regulators' concerns relate to instances in which firms appear to have gained a significant degree of control over sought-after Treasury issues and used their positions to their advantage through the repo market.
The practice can harm market liquidity, in what market participants call a "squeeze". Still, dealers say there is a fine line separating a squeeze from standard market positioning."

GoldendomeSlingshot's current lack of fiat for gold--#14909911/7/06; 16:29:37

Got me to thinking. Declare victory in Iraq, bring the troops home, and send each taxpayer a check for $1,000,000.! Let us spend our coming debt dollars as we see best. This amount will be less than the coming debt per taxpayer that will be accumulated in the desert in the next year! Then we can all buy up the gold, silver, Platinum and (oh yes) oil that we have our hearts set on.
GoldiloxGoldendome's dream#14910011/7/06; 16:36:43

Ah, but then we have to buy from someone other than no-bid contractors with White House ties.

Right now, the $1M rebate you propose is fattening the Exxon's of the world to the tune of about $10B profit per quarter. No one talks about the fact that they pay only "production and shipping" costs for the oil from Iraq - minus a few bribes, of course.

If THEY had to go to NYMEX to get their oil, we'd be paying more than the Europeans at the pump.

mikalU.S. Treasury faces tough choices#14910111/7/06; 16:38:41

Europe's lessons for US watchdogs
Tuesday November 7, 5:05 pm ET
By Gillian Tett |
Snippits: "As US regulators mull over what action, if any, they might take to deal with "short squeezes" in the government bond market, they could do well to glance at some lessons from the other side of the Atlantic.
The Treasuries market is the largest in the world, but it is certainly not the only arena where short squeezes have appeared. In 2000, the German bond market experienced a so-called "monster squeeze", which has subsequently become the stuff of trading desk legend - and set the tone for how mainland European officials now handle such problems."

"More "normal" shortages of bonds still emerge in most European government bonds, from time to time as a result of repo activity, traders say. Leaving aside the Citigroup trade, which was extreme, the measures introduced in 2000 do appear to have prevented shortages from lasting more than a few days - or turning into full blown squeezes.
"What happened in 2000 was the monster of all squeezes, and as a result the rules were changed," says Don Smith, an analyst at ICAP. "Since then, you don't really see such big squeezes in the eurozone." Mr Garbi says: "What our experience shows with squeezes is that it is not good to simply leave the markets to themselves - that is not good for the credibility of the markets in the long term.""

"In the US, government intervention in the markets remains controversial. The US Treasury has floated the idea of a backstop lending facility to ease pressure on securities that are in short supply. But for the most part, this met with resistance from bond market participants.
"There is still a difference between attitudes [across the Atlantic]," says an official at a large institutional investor in London. "Could the US learn a lesson from Europe? Perhaps. But I doubt it will.""

USAGOLD Daily Market ReportPage Update!#14910311/7/06; 17:33:49">
The Daily Gold Market Report has been updated.

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

ELECTION DAY Market Excerpts

Gold trades sideways on U.S. Election Day

November 7 (from DowJones, Reuters) -- The New York precious metals complex was mixed throughout the session on Tuesday then settled near flat ahead of the outcome of the U.S. midterm elections.

At settlement, the COMEX benchmark December gold contract was down 20 cents at $627.70.

During the session the contract didn't stray far from the unchanged level as it traded in a tight range of $626.20-$631.20 with traders noting a tone of cautiousness on Election Day.

Many market players and analysts said the outcome of the elections will not likely have a large impact on the gold market.

Other traders said financial markets might not view gridlock in Washington as a bad thing if it blocked unpopular policies and curtailed government spending.

"If the Republicans win, I expect gold to explode, because you'll have gotten a little bit more of the same," said a bullion trader, adding that gold might pull back a bit if Democrats carry the day.

"Political experts are betting that the Democrats will regain control of the House in Congressional elections," said analysts at MKS Finance in a daily note. "The result is likely to be gridlock and of little significance to cause a liquidity crunch on the dollar."

Peter Grandich, analyst and editor of The Grandich Letter, said a Democratic win in Congress would likely be negative for the dollar and bullish for gold.

"If the Republicans hang onto congress or somehow increase their hold, I think it has no effect," said Grandich.

Going forward, the MKS analysts said precious metals will likely be supported by crude oil prices above $60 a barrel and a weakening dollar.

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

TownCrierChina's gold output up 8 percent in first nine months, trading up 35 percent#14910411/7/06; 17:43:32

(Xinhua) -- China's gold output rose 8 percent to 169.3 tons between January and September, or 12.6 tons more than the same period of last year, said the latest data from the China Gold Association.

In September, the country's gold production came to 19.17 tons...

During the nine-month period, the trading volume at the Shanghai Gold Exchange stood at 896,269 kilograms [896.27 tons], a rise of 34.64 percent year on year.

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

Plenty of appetite to absorb a paltry supply.


WaveriderHey Sir Slingshot#14910511/7/06; 19:41:09

I think that Gandalf the White must have been looking into his Crystal Ball and performing his magic for I have only just....finished reading my edited draft of Midas Crusade and returned here to find your posts. They have inspired me to work on this again soon...faithfully,

Lady Waverider

Ten BearsDollar, War, and Campaign...Dangerous times#14910611/7/06; 19:56:16

Three perspectives:
"Spent Dollar Momentum" by Jim Willie CB

The list of risks to the US Dollar reads like a laundry list, so long, so broad, that is should be frightening. It covers every single pillar from the last decade, each now eroding. For the last four years, the US Dollar has been supported for some rather perverse reasons, among them the Asian desire both to retain its customer base and to bleed the US-based capital until the body American withers. From a manufacturing perspective, a withered corpse is precisely what the US Economy resembles, decked by (asset) bubbles and flesh eating (consumer) microbes scattered across the body.
JP Morgan simply works silently in the background. Their only unwanted emergence from the shadows came collapse five years ago during the Enron, whom they mentored. The duo are in the business of making money, in any and all manner, free from the distraction and annoyance of law. Who is to stop them from market manipulation?
An intermediate rally in energy be coming very soon, one to weaken the US Dollar. The next news story on energy might involve Russia with their utterly blatant confiscation in Sakhalin Island aimed against both Royal Dutch Shell and Exxon Mobil.

Engdahl stressed in strong terms the growing hidden confrontation between the United States and Russia, as outlined in his recent works. Behind the scenes, he describes how a grand battle on the global chessboard has extended the establishment of military bases surrounding the Russian state. President Putin has responded in what can best be described as a backlash or backfire in policy, after recognition that Khordorkovsky was a "chosen son" of US Oil Giants working with the US Govt. That fact has eluded the intrepid lapdog sleepy US press reports. The real problem that US leaders have with Iran can be traced to Russia. We have a renewed cold war ignited.
"Dangerous Insanity" by Charley Reese For Friday, November 3, 2006

While everyone is being distracted by the war in Iraq, Tom Cruise's impending wedding and George Clooney's deep concern for the people in the Darfur region of Sudan, the knuckleheads in Washington are laying the groundwork for a sure-enough war - a war we won't win.

Rather than help Russia transition from communism to a free market, the U.S. sent sharpies who helped the oligarchs steal most of the country's wealth during the drunken presidency of Boris Yeltsin.
the Russians replaced their drunk with a smart guy, Vladimir Putin.
So China and Russia have come together in a strong, strategic alliance nobody would have thought possible 20 years ago.
Russians and Chinese are among Earth's most brilliant people, and they are not taken in by political blathering.
"Campaign ‘06—Goodbye and Good Riddance" by Molly Ivins

Meanwhile, in case you hadn't noticed, Iraq is in a state of full collapse. And Afghanistan is not far from it. Baghdad is worse off for water, sewer, electricity and infrastructure than it was before the war. The R's have taken care of the whole problem with the brilliance we have come to expect from them—they have decided to abolish the Office of the Special Inspector General for Iraq Reconstruction (which has exposed bribery, contracts to cronies, shoddy work, the loss of billions of dollars, the failure to track hundreds of thousands of weapons shipped there, and more). You must admit this is big, bold and brainy. This is Karl Rove problem-solving at its best.

Congress stands before us so hopelessly corrupt that the stench has washed all over the country. Perhaps my least favorite excuse for cheating is "Everybody does it." NO, everybody DOESN’T do it. Nor does the system make you do it, or alcohol or drugs or Jack Abramoff. I do not want to hear one more excuse—apologize and go.

The Invisible HandRemember the days when you …#14910711/7/06; 20:50:39




Freely-priced gold means a free-floating gold price whereby gold reserves are being valued/priced under a mark to market(MTM)–regime.

Do we want a constant or even growing gold metal quantity with a fixed price of gold?

Do we PREFER a FREE-FLOATING gold-metal quantity and price of gold?

Yes, it is POSSIBLE to imagine an optimum freegold metal reserve wealth in exact and changing proportions.
The Invisible Hand (11/6/06; 17:26:35MT - msg#: 149041)
Oil for gold, said you?
Nov. 03, 2006
Russia Adds to Its Reserves
Yesterday the Central Bank reported another increase in its gold reserves, by $1.8 billion in the last week of October, to a total of $268.1 billion. Experts asked by Kommersant maintained that, for the growth rate of the gold reserves to be reversed, the price of oil would have to fall to $30 per barrel.
Experts asked by Kommersant maintained that there are no threats on the horizon of substantial slowdowns in the growth rate of the gold reserves, much less threats that the reserves will shrink. TsMAKP predicts that they will grow by a further $25 billion in the fourth quarter of 2006.

The emitting European Central Bank (ECB) prefers a FREE-FLOATING gold-metal quantity and price of gold.

The reason why the ECB prefers a FREE-FLOATING gold-metal quantity and price of gold is that the physical economy can no longer tolerate/assimilate/follow/absorb the excess of dollar-digits which are being created by the expanding FINANCIAL INDUSTRY (FI) and thereafter entering the physical economy.

The physical economy can no longer SUBSTANTIALISE, give sub-stance ("sub" means "under" in Latin, "stare" "to stand") to, the dollar digits which are being created. This is becoming clearer by the day.

In the absence of substantialisation by the physical economy,


How will the emitting European Central Bank (ECB) "manage", "administer" the transition process?

Once the FI has created financial "products", it must find customers for these hallucinations. These customers must themselves productively have achieved excesses/surpluses. This means that the "investing" populace is working hard in the physical economy to buy hallucinations of the FI. This is happening on a world scale

In the meantime, the dollar FI continues to promote the dollar regime.

This monopolisation of world trade by the dollar is what makes it possible for the FI to continue the dollar-regime promotion.

Meanwhile the euro is rising as a reserve currency, ahead of a dollar crisis
So much has been written about the coming $ crisis, but the $ keeps holding on, moving within a 5% band up and down, but not outside that band. Why doesn't the crisis come?
The full effect on the international financial system of vast foreign ownership of U.S. government debt was not fully understood

But first, let me get these matters legally straight.

The US Sherman Act prohibits MONOPOLISATION, i.e., the adopting of practices which lead to the creation of the monopoly for the entreprise which adopted these practices.
The EU Treaty of Rome prohibits ABUSE OF DOMINANT POSITION.
The dollar achieved its monopoly/dominant position long ago.
The dollar-International Financial and Monetary System (IFMS) does thus no longer have to monopolise (achieve a monopoly/dominant position in) anything, but "can only" abuse its present dominant position.

The point is: antitrust law should have been abolished long ago, except against government, ni dieu, ni maitre, n’en déplaise à Gata.

Before this interlude, I wrote:
This monopolisation of world trade by the dollar is what makes it possible for the FI to continue to promote the dollar regime.

I must now correct this:
This abuse of dominant position in world trade by the dollar is what makes it possible for the FI to continue to promote the dollar regime.

Meanwhile the euro is rising as a reserve currency, ahead of a dollar crisis
So much has been written about the coming $ crisis, but the $ keeps holding on, moving within a 5% band up and down, but not outside that band. Why doesn't the crisis come?
The full effect on the international financial system of vast foreign ownership of U.S. government debt was not fully understood

(TIH: How much, and since how many years, has been written (by A/FOAakaTG on these pages) about the New Gold Market?)

It is precisely because of this dollar abuse of dominant position that the physical economy can no longer follow the FI. We however are able to follow in the footsteps of the Giants and make our host happy.

The dollar system is thereby constantly revoking itself.

Those who manage to accumulate dollar excesses/surpluses are confronted with ZE KWESTION about the INTRINSIC VALUE of these digits.

If those digits can no longer be converted into tangible (physical economy) what is then their "value"?

Those accumulators’ view is then, as if led by my namesake, directed towards the euro digit.

AS OF A SUDDEN, the accumulators realise that the manager/administrator of this unit, the emitting ECB, has a floating gold reserve.

But the sheeple, they don't want to listen.

Lunch time!

The Invisible HandDemocrats put an end to Republican dominant position#14910811/7/06; 20:58:54

Democrats Gain Ground in Senate, House
Nov 7, 10:24 PM (ET)


POSITION not prosition

The Invisible HandAnother Clinton#14910911/7/06; 21:11:28


Latest: Hillary Clinton says US wants end to ‘culture of corruption’ as she wins in New York.
Last Updated: Wednesday, 8 November 2006, 03:59 GMT

GoldiloxThe Dollar's Full-System Meltdown#14911011/7/06; 21:26:54


The U.S. Dollar is kaput. Confidence in the currency is eroding by the day.

A report in The Sydney Morning Herald stated, "Australia's Treasurer Peter Costello has called on East Asia's central bankers to ‘telegraph’ their intentions to diversify out of American investments and ensure an ‘orderly adjustment’….Central banks in China, Japan, Taiwan, South Korea, and Hong Kong have channeled immense foreign reserves into American government bonds, helping to prop up the US dollar and hold down interest rates,’ said Costello, but ‘the strategy has changed.’"

Indeed, the strategy has changed. The world has come to its senses and is moving away from the green slip of paper that is currently mired in $8.7 trillion of debt.

The central banks now want to reduce their USD reserves while trying to do as little damage to their own economies as possible. That'll be difficult. If a sell-off ensues, it will start a stampede for the exits.

There's little hope of an "orderly adjustment" as Costello opines; that's just false optimism. When the greenback begins listing; things will turn helter-skelter quickly.

In September, we saw early signs that the dollar was in trouble. The trade deficit registered at $70 billion but the Net Foreign Security Purchases (NFSP) came in at a paltry $33 billion. That means that our main trading partners are no longer buying back our debt which puts downward pressure on the greenback. The Fed had two choices; either raise interest rates substantially or let the currency fall. Given the tenuous condition of the housing bubble and the proximity of the midterm elections, the Fed did neither.

A month later, in October, the trade deficit hit $69.9 billion but, then, without warning, a miracle occurred. The Net Foreign Security Purchases skyrocketed to a "historic high" of $116.8 billion; covering both months’ shortfalls almost to the penny.


Not likely. Either the skittish central banks decided to "stock up" on their dollar-denominated investments or the Federal Reserve (and their banking-buddies) is buying back its own debt to float us through the elections.

This is exactly the kind of hanky-panky that people expected when Greenspan stopped publishing the M-3 last March keeping the rest of us in the dark about what was really going on with the money supply.

Are we supposed to believe that the skeptical central banks suddenly doubled up on their T-Bills while they're (publicly) moaning about the dollar's weakness and threatening to diversify?

That's a stretch.

According to the Wall Street Journal the Chinese Central-bank governor Zhou Xiaochuan stated unequivocally that "We think we've got enough." The Chinese presently have nearly $1 trillion in USD and US Treasuries.


The United States runs a $200 billion per year trade deficit with China. If they've "got enough" we're dead-ducks. After all, it doesn't take a sell-off to kill the dollar, just unwillingness on the part of the main players to stop purchasing at the same rate.

Of course, everyone in Washington already knew that doomsday was approaching. That's the way the system was designed from the very beginning. It's all part of the madcap scheme to "starve the beast" and transfer the nation's wealth to a handful of western plutocrats. That's explains why the Fed and the White House whirred along like two spokes on the same wheel; every policy calculated to thrust the country headlong toward disaster.

The administration never created a funding mechanism for the $400 million tax cuts or for the 35% expansion of the Federal government. Defense spending increased by leaps and bounds as did the "no-bid" contracts for friends of the Bush clan. At the same time, interest rates were lowered to rock-bottom to put as much money as possible into the hands of people who couldn't meet the traditional criteria for a mortgage. And, if gluttonous waste, reckless overspending and "Mickey Mouse" loans were not enough; the Fed capped it off by doubling the money supply in 7 years; a surefire prescription for hyper-inflation.

So, which one of these policies was not deliberate?


A powerful essay on dollar destruction, and who stands to profit from it.

GoldiloxWHY GOLD? AND HOW?#14911111/7/06; 21:52:19


$250,000 in Gold Bullion - In Your Hand

At London's biggest private investor trade show (IX Investor 2006) the star was a bar of gold bullion. Members of the public were able to put their hand into the display cabinet and try to pick it up - all 406.225 ounces of it.

About 27 pounds of bullion gold in a single bar. Value: $250,000.

London based BullionVault was using the bar to illustrate the difference between something of real, solid value and the all-too-often temporary rights of the modern intangible. Needless to say no other exhibitor needed two burly Brinks security guards to keep an eye on things, and - as it happens - few were attracting quite such a crowd either. There's an important point there - somewhere.

BullionVault's Director, Paul Tustain, is in a special position in the gold market. His company is providing 10,000 private investors from around the world with their route to gold. So he's probably as well qualified as anyone to explain why more and more people are buying real physical bullion - most of them to hold quietly in Switzerland, rather than to trade.

He gave a simple but revealing presentation :- "Why gold? And how?"

Below is the text of the presentation - interlaced with some thought-provoking slides.


Go there at least for the pictures.

Goldilox"McArthur's Park is melting in the dark"#14911211/7/06; 22:11:47

Jim Webb has pulled ahead of George Allen in the Virginia Senate election. If the Demos take three of the seats that are close in VA, MT, KY, or MO, they will sweep both houses.
GoldiloxCorrection#14911311/7/06; 22:15:37

TN, not KY. Sorry 'bout that.
Chris PowellTreasury joins Fed in repo-like manipulation of money supply and markets#14911411/8/06; 02:22:09

U.S. Treasury Is Quietly Doing Fed's Work

By John Crudele
New York Post
Tuesday, November 7, 2006

For the past few years the U.S. Treasury has been quietly involved in what the financial markets call "repo" agreements, and this near-secret operation could explain why the nation's money supply seems to be confoundingly large.

It might also explain why Washington decided earlier this year to stop publishing M3 money supply figures, the broadest and most popular measure of money in circulation.

Repurchase agreements -- or repos -- have long been used by the Federal Reserve to get money quickly into the hands of financial institutions, which in turn can put the money into circulation in the form of loans.

Last Thursday, for example, the Fed executed $2.5 billion in overnight repos and $8 billion in 14-day repurchase agreements. These were reported on the financial wires.

The Treasury completed a $5.5 billion repo operation on the same day under what it calls the Term Investment Option. There was no mention of the Treasury operation on the wires. In the Fed's repo deals, the banks temporarily turn over securities to the central bank in exchange for cash.

The Treasury TIO program works in a similar way, except the financial institutions pledge securities as collateral in exchange for the cash.

Is this like the repo operation at the Fed?

"Kinda," says a spokeswoman for Treasury. "But not really."

She said the TIO program only replaced the old way of putting government cash in banks without making the banks place bids, which gets the government a better deal.

Most people judge whether the Federal Reserve is trying to influence economic growth by its actions with interest rates.

If the Fed is raising rates, for instance, it really isn't tightening credit if it is also putting large amounts of money into the hands of bankers through repos.

The opposite is also true: The Fed can't really speed up the economy by cutting the interest rates it controls (and hoping all other rates come down) if it is keeping a tight fist on the amount of money banks have available to lend. This is the way the repo market has worked -- up to now.

These days, whenever the Treasury finds itself with extra cash lying around, it can turn the money over to the Fed to be invested.

Apparently the Treasury doesn't report its repo auction results in the Fed's report since last Thursday's maturities in the two operations didn't match. It's difficult to call this operation "secret" if financial institutions have been using it for three years to increase their liquidity. But folks I asked on the trader side of the investment community if they had never heard of this arrangement.

Experts worry whenever there is too much money -- liquidity -- in the financial system because it can lead to things like price spirals in the housing market and bubbles in stocks.

But even more worrisome for the financial markets than too much liquidity would be an inability to track the amount of money being pumped into the financial system.

Unless I find out differently, it looks as if the Treasury has created a way to duplicate the Fed's power. And that is a disturbing possibility unless it is somehow monitored.

TownCrierCrudele's article on Treasury Dept. repo market participation#14911611/8/06; 05:34:28

Thanks for sharing that article, Chris.

Crudele concludes, "But even more worrisome for the financial markets than too much liquidity would be an inability to track the amount of money being pumped into the financial system. Unless I find out differently, it looks as if the Treasury has created a way to duplicate the Fed's power. And that is a disturbing possibility unless it is somehow monitored."

As nicely "alarmist" as this is for everyone who likes to revel in that sort of thing, I'll share my gut instinct in the interest of keeping clientele balanced and well informed.

My gut is telling me that this is likely much ado about nothing, because, according to my most educated impression on the matter, the the cash involved in the repos in question is most probably sourced from the Treasury's tax and loan accounts (rather than from their general account at the Fed).

To explain the point, as the funds in these tax and loan accounts are already residing in the commercial banking system, the liquidity represented by these funds are ALREADY in play in the system. Therefore, to engage these funds in the repo market is a basically an exercise in reshuffling the deck -- there is a new reallocation of cards among the players, but the key point here is that the number of cards in play remain the same.

The Treasury has historically maintained its tax and loan accounts spread out over several thousand accounts with depositary institutions, and as a practical exercise, an issue arises for the portion of these accounts that exceeds the depository insurance protection at each institution. As a technical matter, operating proceedure calls for the excessive balances to be fully collateralized, and this is done neatly enough through, you guessed it, the Treasury repo operations that Crudele is crudely endeavoring to grasp and describe.

And to put a final point on his concluding remarks, I've said it before (regarding discontinuation of M3 reporting) and I'll say it again -- if a person thinks having M3 numbers are a prerequisite to figure out what his money is worth, he's already losing the game because his head is not in the right place. It takes an eye upon the market transaction happening in front of you to show you the instantaneous value of the currency in question, and even then, you have no assurance of the transactional value of your additional money supply held in savings. If the savings is held as tangible wealth, however, there is no ambiguity at all -- it's value is what it is. On the value scale currencies come and go, but tangibles continue to define economic realities through all of human history and progress.

Questions, comments?


DruidTownCrier (11/8/06; 05:34:28MT - msg#: 149116)#14911711/8/06; 07:48:58

Druid: TC, thanks for bringing your razor like sharpness front and center stage in describing these intricacies. So, if I understand you correctly, this type of action by the Treasury is typical in terms of collateralizing any excess funds that they have sitting spread out throughout the banking system? Would this be considered routine activity on part of the Treasury as it pertains to the REPO market?
melda laureMy head is spinning.#14911811/8/06; 10:33:12

"questions comments"

The FED buys bonds with New Paper. Then treasury, (having a bit of loose tax-payer paper now just idle) lets banks bid on the same paper with their bonds.

Ugh! Sounds like a cheque kiting whirlwind, my head is spinning. Will the real inflationist please stand up? As tax receipts require arm-twisting, whereas the FED just requires typing, I'll blame the latter.

mikal@Melda laure#14911911/8/06; 11:47:40

Thanks. Re: "questions, comments ...Will the real inflationist please stand up? ...the FED just requires typing, I'll blame the latter."

Yesterday's post by Goldilox appears to addresses this
aspect well:
"Goldilox (11/7/06; 21:26:54MT - msg#: 149110)
The Dollar's Full-System Meltdown"
I agree with the author that "the Federal Reserve (and it's banking buddies) is buying back it's own debt, but not "to float us through the elections."
1) If they wanted, they could just cancel the elections.
That's not necessary partly because their owned and pocketed candidates are ubiquitous on the ballots- driving out other parties, the Independents and Libertarians, etc.
2) They've been monetizing the debt pretty much all year according to J. Sinclair, Jim Willie and many other experts
here, on the web and in the gold investment advisory business.
3) Various aspects of the bond market, the economy and precious and current official policy coalesce to bring this situation about, which has only just begun. Posts and articles such as yours help to reveal the many subtleties
that all of us can use.

mikal@Melda laure#14912011/8/06; 11:52:30

Re: "precious and current policy"
Meant "previous", but something must have taken
control of the keyboard... :)

FlatlinerRumsfeld stepping down#14912111/8/06; 12:15:27

It was interesting to see this news break and the selloff of gold happen at the same time. I have to wonder what it really means. The talk is that foreign policy will turn more diplomatic. To me, Diplomacy, rather than force, will allow economies that do not use the dollar to stand strong without fear of military repercussions. One would half expect Oil to start trading in Euro's in the near future. Or reserve dollars that have been horded and strategically recycled to move without as much fear as before.

Also, there is much talk about entitlements. Seems to me that more money will be needed to supply funding for these entitlements. But, we'll see.

Ultimately, we've turned over a new rock to find what we saw under the old one.

CamelSanity#14912211/8/06; 13:10:20

Looks like the market is afraid the Democrats will restore some sort of sanity to the country.
melda laureIf Bernanke resigned...#14912311/8/06; 13:21:51

Would it end the dollar mess?
mikalEurope euphoria or lipstick on pig noveue#14912411/8/06; 13:57:45

It doesn't get much easier than this to play "devil's advocate" or
have a different take on the slant of a news reporter.
Observe how easily average people on the street,
not credentialed specialists in global economies or high finance, can see the true complexion of
the issue at hand, not as observed in mirrors
or through rose coloured glasses:
ECB Fears Decay In Bank Standards By Carter Dougherty
International Herald Tribune | Published: November 7, 2006

"FRANKFURT: The European Central Bank said Tuesday that banks in the European Union might be compromising their financial standards in order to win lucrative business from hedge funds."
Mikal- Here they begin by downplaying the problem
by stating the EU "might be compromising" standards. That's nough to leave the brain dead(and they assume most readers are) guessing as to whether it's even worth anyone's trouble to mention it since it's just a great mystery and everything always turns up royally, I mean roses.

"Banks reap large fees by lending to hedge funds and executing trades for them, but "intense competition among banks may have contributed to a certain erosion of standards," the bank said in its annual report on the stability of the European Union banking sector.
The ECB said that some banks had assumed the role of both buyer and seller as they mediated transactions for hedge funds, effectively concentrating the risk for themselves."

Mikal- Again "may have contributed to a certain erosion of standards" sounds like they want to hedge their conviction and not fully commit themselves to a sacriligious offense against editorial protocal. And "a certain erosion" sounds like a euphemism for cancer.

""From a banking sector stability point of view, it is important going forward that banks retain sound risk management practices vis-à-vis their hedge fund exposures," the ECB said in its report.
The report raises the possibility that the large risks that hedge funds take when trading stocks, bonds and other securities could spill over into the banking sector. But for now, the ECB painted a picture of a European banking system that is hale and hearty."

Mikal- I told you they would make it easy to see the "true complexion" of the scene, not one with rogue, mascara, eyeshadow & lipstick. "For now" they'll ignore it even as the ECB says in it's report, "From a banking sector stability point of view, it is important going forward that banks retain sound risk management practices vis-à-vis their hedge fund exposures."!

"After a crisis early in the decade, banks have been recovering strongly since 2003, and their return on equity - a measure of earnings and efficiency - reached 15 percent at the end of 2005, a relatively high level.
"Not only the 'usual suspects' of the banking industry took part in this favorable development," said Edgar Meister, head of the ECB's banking supervision committee. "Weaker institutes also trended upwards."
The bank said that recent innovations, like the ability of banks to securitize loans and sell them to investors, had helped to curb the risks they contend with. But this practice has transferred the risk to other investors, notably unregulated hedge funds, making it harder to keep track of. "We do not know exactly where this risk is," Meister said."

Mikal- These guys are taking the words out of our mouths here, yes?

"Meister added that EU banks were now highly solvent, "adequate to cope with unexpected losses, comfortably exceeding regulatory requirements."
Tight interest margins, which have fallen as different companies compete for consumer and corporate business, are one of the few dark spots, Meister said.
By and large, the ECB said that strong economic growth was helping to contain what risks do exist for the European banking system, though a downturn could expose questionable lending practices."

Mikal- Again self-contradiction dominates the reporting. They say "adequate to cope with unexpected losses" and "a downturn could expose questionable lending practices" in the same breath! Excuse me while I open a window...

""Increasing indebtedness and signs of an erosion of credit standards in new lending in many member states could become causes of concern if the macroeconomic environment should develop less favorably than expected," the bank said."

Mikal- Here, "could be causes of concern" is understating something again, yes? And this "signs of an erosion of credit standards" is no different than their "contributed to a certain erosion of standards" above- didn't they really say it depends on what IS is?

KnallgoldGold down on Rummy resignation?Less force?Oil for euros?#14912511/8/06; 14:01:37

Maybe also less force to use the $ Gold market?
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TownCrierAnswering Druid (msg#: 149117)... 'the routine of repos'#14912711/8/06; 14:51:22

Money being nothing more cumbersome than a digital number, within the wide framework of our financial system, the possibilities presented are limited only by the skill of the mathematicians and the flexibility of quite rubbery official policy.

As all "routines" in place today have evolved from ancestral operational routines, your question becomes one of choosing the point within the evolutionary grey area that suitably defines a distinction between "routine then" and "routine now".

If this is indeed to be treated as a "news" item, then it would seem to me that the distinction we're looking for might be that the Treasury itself is now significantly a party involved in directing the employment of so-called tax and loan funds in the repo market rather than passively sitting aside while letting the depository institutions conduct what would simply be deemed "business as usual".

Does that help?


GoldiloxTreasury participation#14912811/8/06; 15:09:18

@ TC,

"If this is indeed to be treated as a "news" item, then it would seem to me that the distinction we're looking for might be that the Treasury itself is now significantly a party involved in directing the employment of so-called tax and loan funds in the repo market rather than passively sitting aside while letting the depository institutions conduct what would simply be deemed "business as usual"."

OK, I think I see your distinction in the change of "process", but what, in your estimation, does this mean to the bigger picture, if anything?


Flatliner@usury participation#14912911/8/06; 15:21:05

I might be reading this all wrong, but does it mean that the treasury has invested the people's money? You know, like retirement funds have moved to 401k programs where the only investment options (to most) are paper plays under private unaccountable management? Seems to me that invested ‘money’ is subject to investments going bad.
mikalPurely gold #14913011/8/06; 16:16:26

Gold predicted to break record high
By Chris Flood, Financial Times - November 8, 2006
Snippets: "Gold prices and gold equities are likely to enjoy another three to five years of solid growth, according to RBC Capital Markets, which hosts its annual gold mining conference in London today.
Stephen Walker, director of global mining research at RBC, will tell the conference that the summer correction in gold prices has run its course. Bullion will test this May's 26-year high of $725 a troy ounce early next year, during the period of higher jewellery demand from India, he will say.
In 2007, investor appetite for gold and other base metals is expected to be lifted by rising global liquidity as the Federal Reserve cuts interest rates in response to slowing US economic growth."
Me-> The Fed's liquidity injections along with the world's other banks have added liquiditity sufficient to do the job. More liquidity will accompany damage control, spin, obfuscation, noise and related histrionics. Devaluation of currency may be slowed or halted long afterwards as a result of being officially of lower priority.

"RBC said gold could challenge its all-time peak of $850 a ounce, reached in 1980, helped by bullion's growing importance as an alternative investment and rising risk aversion among investors."
Mikal- The article then goes on about gold equities and ETF strength and then more of the incredulous jewelry assertions, but makes some good points.

"Gold remains an attractive alternative asset for investors seeking alpha [above market returns] and for central banks wanting to diversify their reserve assets," said Mr Walker.
Foreign exchange reserves are growing rapidly in Asia, the Middle East and China.
RBC said gold's outperformance since 2000 of the main alternative foreign exchange assets (the euro, yen and sterling) would encourage these central banks to raise their gold holdings from the current average level of 3 per cent."
Mikal-> I doubt the accuracy of these figures but the basic trend is clear enough. Large investment funds and institutional holdings are likewise shifting more to gold.

The Invisible HandThe Iranian missiles are flying again ... #14913111/8/06; 16:51:30


Gold rises in Asia after Iran's testing of rockets
LONDON, November 8 (IranMania) - Gold gained in Asia after Iran yesterday tested new cannon and rockets, increasing the precious metals appeal as a haven, Bloomberg reported.

TownCrierGoldilox and Flatliner#14913311/8/06; 17:57:15

Maybe I have been unduly influenced by reading all the gloomy economic forecasts and discussion surrounding the fate of the dollar, but no matter how very accurate they may soon prove to be, the net impression that I am left with is the sense that people seem inclined to lean more easily toward pessimism from realism.

This Treasury repo thing would seem to be a good candidate for propelling people hastily down the thought process that upon this "evidence" things are going from bad to worse. I'm merely saying that the item in question looks largely to be nothing more than a technical deviant from the status quo. In other words, rather than a headlong rush from bad to worse, we are basically going from bad to more of the same.

Flatliner, good question, but it really doesn't quite boil down to a case of the Treasury looking to invest the people's money. The tax and loan accounts are depositories within the commercial banking system where the Treasury receives its inflow of funds on a daily basis from such sources as the various payroll taxes that are regularly withheld from workers by their employers. The Treasury isn't trying to stockpile this money for investment purposes, it is simply using these accounts as an effecient collection point or staging area prior to the money being dashed off to pay the various government bills. (After all, the government is in debt, you know!)

The Treasury knows even more clearly than you and I do that the currency game boils down to a depreciating business, and therefore, even though any given specific dollar may reside in one of these accounts for only a very short time, the Treasury Department never the less knows that it is prudent to do two things: 1) make sure the deposit is as safe as possible from default (i.e., protected by deposit insurance up to the available limit, and then fully collaterallized beyond that amount); and 2) try to earn a paltry market yield (interest) on the funds to help mitigate the insidious erosion of depreciation (loss of purchasing power).

Again, as I tried to express in my first post, whether or not the Treasury takes an active hand in directing the use of these temporal funds in the repo market, these same funds would still be "in play" on the liquidity scene.

If you want to press me freely for the "million dollar insight", I'll gladly hand it over. Even though I just now indicated that the funds are in play effectively "all the same", regardless of who is giving direction, I would stipulate that as being the case only in conditions of an orderly financial market. During calm times, it doesn't significantly matter whether the Treasury is offering its funds to the repo market, or whether those same funds are being put out there by the various banking managers.

HOWEVER, if there was a financial/banking crisis, bank managers would tend to retrench and become very conservative in their lending/repo operations -- potentially making the crisis of illiquidity even worse. By contrast, the Treasury does not need to be bothered with issues of solvency, therefore, now that it has clearly shown itself to have gathered the necessary operational competency in this arena, it now has the wherewithal to boldly step into any foreseeable breech where bankers themselves would fear to tread.

So, what we're really left to ponder is whether the Treasury developed this new operational capacity as a mere matter of accounting efficiency, or whether it was done as a proactive measure to mitigate a foreseeable crisis in the money markets?

The short answer is, buy gold.


Flatliner@TownCrier's Treasury's saving accounts…#14913411/8/06; 18:18:44

It's pretty obvious that the price performance of gold over the last couple years has outperformed any standard saving account. Why doesn't the Treasury just place it's saving in gold?
TownCrierFlatliner, you're not quite hearing me#14913511/8/06; 18:46:39

I tried to indicate that, put very very simply, the government (i.e., Treasury) is in DEBT -- the money in the accounts in question are not intended to represent savings. They are only there in a very marginal way as they are effectively passing through from the tax collection end of the equation to the bill payment side of things.

Getting back to the topic of savings, however, if the Treasury has anything to be accorded that distinction, it would be the 8,000 tonnes of gold that it allegedly has gathered to itself in the vaults of Fort Knox and West Point. But that's a whole different kettle of fish.


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WEDNESDAY Market Excerpts

Gold dips on post-Election profit taking

November 8 (from Reuters) -- Gold futures fell 1.5 percent on Wednesday on profit taking after Democrats wrenched control of the House of Representatives from the Republicans and were close to retaking the Senate in Tuesday's midterm U.S. elections. But prospects for gridlock in Washington between a Democratic Congress and an unpopular Republican president were expected to pressure the dollar and renew support for gold, which rose to two-month highs in the run-up to the election.

Dealers said it was "buy the rumor, sell the news" as a Democratic sweep of at least one house of Congress was priced into the gold market.

COMEX December gold contracts settled down $9.40 at $618.30, dropping under $620 for the first time in six days.

Defense Secretary Donald Rumsfeld resigned Wednesday over anger about the war, although there was little prospect of a dramatic policy change or quick exit from Iraq that would undermine the safe-haven argument for owning gold.

"The general view, especially in Asia, is that the Democrats in power will not be good for the dollar, so long term, things will reverse. But people had been positioning themselves for this outcome," said Carlos Perez-Santalla of Hudson River Futures.

Gold rose to $632.20 on Monday, its highest since early September. Still, after a 12 percent rally, mostly in the last two weeks, a correction was overdue for gold.

"It's a little bit of a technical correction, which makes sense," said Scott Meyers, analyst at Pioneer Futures. "They might bring it down to $608-$610, then we look to be a buyer again."

Democrats gained about 30 House seats, exceeding the 15 seats they needed to win to take control of the 435 member body from the Republicans. They won five of six Senate seats needed for a majority and narrowly led in the race for the last one in Virginia.

"I think there was a little bit of caution that came into the market, although I don't necessarily think a Democratic Senate is bearish for gold," said Bill O'Neill of New Jersey-based commodity research firm LOGIC Advisors.

"I think this will prove to be a one-day event as far as that's concerned, then we'll see the market focus back on fundamentals."

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

Ten BearsLike I said, insane!#14913711/8/06; 19:34:09

by Richard Daughty

And if you don't think that prices are rising, then let's stroll on over to the latest Economist magazine and take look for ourselves. Hmmm! The Dollar Index for All Items is up 37.5% from a year ago. Sounds like higher prices to me! Food is up 20.1% from a year ago, and that sounds like higher prices to me, too! All Industrials is up 56%, which I am SURE is higher prices, and Metals is up 80.4%, which I am absolutely positive is higher prices!
The only thing that is NOT up in this table is Non-food Agriculturals which is still up 2.8% from a year ago, a level of inflation that used to be thought of as alarmingly high, back before Americans lost their minds 50 years or so ago.

The big, ugly news (BUN) is that the Treasury increased the national debt by $90 billion in October! In one month! Ninety billion dollars in one month! That's $300 more debt for every man woman and child in the country! In one month! One!"

Adam Hamilton of Zeal Intelligence when he said "From its peak in mid-2001 to its trough in late 2004, the US Dollar Index lost a staggering 33.3% of its value in the world currency markets!

According to the Bank for International Settlements (BIS), the combined turnover in the world's derivatives exchanges totaled USD 344 trillion during Q4 2005. No, that's not a typo, that's $344 trillion of notional value, where if one were to annualize a total, it doesn't take long to figure out the world is now trading in excess of a quadrillion worth of this paper every year. Is that a big enough bubble for you? And it goes without saying this has been a boon to the brokerages and banks that deal in these formerly exotic financial instruments."

Even at $600, the total world supply of gold above ground represents only 3% of U.S. dollar-based financial assets. As recently as 1980, the figure was 29 percent."

Ten Bears: Hyperinflation is not coming in the future; the 'front end' is already here!

And from Enrico Orlandini "In Search of Knowledge"

"People instinctively know the system is rigged and they know the system is going to fail at some point in time. They just don't know when and that creates a hell of a lot of anxiety".

TownCrierOn further thought, Flatliner...#14913811/8/06; 20:42:58

Your last question was beautifully formed, that it now occurs to me that you've heard things perfectly well, and your question instead was meant to be a stepping stone to this final point:

The Treasury behavior we've been discussing today, although quite complex in detail, boils down to a very simple model that we would all do well to follow as individuals.

That is, there exists a portion of the Treasury's total picture which represents its active cashflow stream, typified by the tax and loan accounts. These are derived from recurring income and are best thought of as the monies that need to be readily available for the payment of recurring expenses -- just like a household budget. (While a simple checking account is adequate for our individual needs, the scale of the Treasury operation adds a bit of complexity to the nature of their own "checking account".)

With the item of cashflow thus addressed, we can turn to savings. Despite being in chronic debt, the Treasury still finds it prudent to maintain an extra special reserve of savings, set aside to be counted on reliably even under the rainiest of days. This "savings account" is its 8,000 tonnes of gold.

Taking a good cue when we see it, we, too, should seek to set aside our "rainy day" savings fund in this most reliable form posssible -- the form of physical gold.


FlatlinerBetter yet#14913911/8/06; 21:23:35

What if the Treasury took its golden savings and lent it to the Fed so that it could get an additional percent return per year. I mean, we're talking eight thousand tons here – it's got to be good for something! I mean really, in the worst case, they'd still own title to all that gold they lent out and just call it home if they need it. Isn't that what other central banks do?
Flatliner@Ten Bears - Hyperinflation is not coming in the future#14914011/8/06; 21:24:46

It's like crying wolf - "Hyperinflation is not coming in the future; the 'front end' is already here!" Some that have looked at the world's debt savings have said this for many years, yet its ravaging affects have not landed on the dollar saver. Do you have any good reasons why it has not?
Ten Bears@Flatliner#14914111/8/06; 22:21:48

crying wolf?... ravaging affects have not landed on the dollar saver?... What country do you live in Flatliner?

Food prices up three hundred percent in a decade… Housing purchase prices that or more … fuel similar increases. Wages in dollars have not stayed up for most white or blue collar workers. For the elderly, on defined benefit pension plans plus social security, percentage increases have not stayed up. (cpi misstated). In fact "ravaging affects" have landed extremely hard on most dollar savers.

A ninety percent loss of purchasing power since 1956, most of that coming since 1971, and rapidly accelerating rate recently. The living standards have declined here in the USA for three decades. You can find considerable data to demonstrate that fact.
If you are old enough, your memory is good enough, and you are well enough traveled in this country, all you have to do is go take a look to see the "ravaging affects"

In fact it is so bad that even PBS had a special last night on why the boomers would not be able to retire. (PBS is not exactly in the forefront of news)

If you choose to define inflation as an increase in money supply, check the m3 charts (until discontinued).

FlatlinerThat ‘sudden reveal’#14914211/8/06; 22:50:58

TownCrier, In all seriousness, I can't stop thinking about your ‘sudden reveal’ posting yesterday (msg #149050). Over the many months that I've searched for information in this forum, the sudden reveal concept, though it could work, always seems to come up as the most improbable.

For those of you just joining in, my understanding is that this concept gets its support from a big player (or multiple big players) that willingly revalue gold higher. High enough for it to actually, once again, be functional as money. The idea is built around an honest desire for gold that is so overwhelming that this big player will willingly give dollars away in order to obtain the real physical metal. This revaluation may come across similar to barter, if that big player has something that they want to trade. It is also built on the idea that this someone is fed up with dealing with dollars – they see the dollars as funny money with no integrity.

I know that Another has touched on this topic pointing directly towards the big player(s). But, time has passed, gold remains a commodity and jewelry is still warn openly. Thus, I'm starting to wonder if that big trader picked up an education from established currency wizards with regards to the function of paper currency and fractional reserve lending that may have corrupted big players desire for physical gold. Or, if nothing else, his willingness to openly bid for it.

I all seriousness, actions seem to show that those that own the right to collect interest on currency will do absolutely anything to preserve that right. If someone threatened that right, it would logically cause tension and the problem would be stored six feet under. Standing up against this seems like a career-limiting move that would turn even the most righteous person to reconsider they're actions.

Due to this logical diversionary force, the sudden reveal concept starts to take on a concept that might be a little more hope base or one that might require a super hero to appear and stand up for society. It would definitely be noble and possibly terminal. I must say that I will hope. But, the feeling is just not right. It's like hoping someone will take a bullet for honest money. It's hard to ask that, and, because of these problems, the concept seems like a futuristic possibility of low probability.

I believe that you are correct that the sudden reveal concept would cause the lest amount of economic damage as people wake up to the new price and gold's new function. It seems clean, safe but likely.

After giving this a little more thought, it occurred to me that the only likely scenario would come from the Fed itself. But that would most likely only come during a loss of confidence situation. As we all know, gold is held on reserve specifically to protect the currency that it backs. If confidence is lost in the US Dollar, it is either defend or it's destroyed. I seem to remember a month or two back where it was reported that the fed seemed to acquire the gold that was held by the US treasury. If there is a life threatening move against the dollar, one might expect the Fed to go before congress where they will offer to buy dollars with gold. Having watched central banks, we would expect the trade price to be in the banks favor. Thus, the price of the gold would not balance against the outstanding currency, but supersede it by leaps and bounds.

This approach seems to make a little sense if you also think about the alternatives. If the dollar is crashing, you either unleash your dollars towards physical commodities – which will have repercussions in all currencies – or you redeem them with the Fed thus letting gold mop up the excess. If you already hold gold, the fed delivers a windfall with it's announcement. It's a win-win situation.

Thus, Ten Bears realization that hyperinflation is already in the pipeline may be tempered if worldwide savings could be redirected towards a revalued gold. Even before a crises, if gold were revalued, that trillion dollars that China holds over the US economy could be resolved with a million ounces trading at a million dollars an ounce (30 tons = $1,000,000).

Another interesting thing here is that because so many worldly currencies are locked to the dollar, they will all devalue at the same instant. Fiat trade will continue as if nothing happened.

Hum… This scenario is just too good to be true.

I will go back to holding out hope for the individual. Individuals can redeem currency for gold. Because I plan for the worst, I will hold savings in gold and fill my pantry.

Flatliner@Ten Bears#14914311/8/06; 23:06:53

Don't get me wrong, it looks like hyperinflation is on the doorstep. And, if you step back a couple years, it looked like it was on the door step then. If you go back even further, you can still see it. If you look at the late 70's, it was first noticed. In all these cases, it's still just on the door step.

Sure, not only have we had currency inflation, but price inflation is there also. I see what it is that you talk about and we're all living the inflation.

I guess by ravaging affects, I mean two things. 1) gold is unobtainable in the currency and 2) no one saves it. It's trivial to find that gold is trading just over $600 an ounce and trillions upon trillions of dollars are actively being saved.

The potential for hyperinflation is present – but until the saving is unleashed, you have seen nothing!

So I guess I was looking to see if there might be any good reasons why people continue to save US dollars? We all know that gold availability is a function of the paper gold liquidity.

Oh, as you probably already know, that paper liquidity has the affect of keeping the physical price really low.

The Invisible HandAnother "Cohabitation"#14914411/8/06; 23:15:59



Politics of the United States of America takes place in a framework of a federal presidential representative democratic republic, whereby the President of the United States is both head of state and head of government, and of a two-party legislative and electoral system.

Politics of France takes place in a framework of a semi-presidential representative democratic republic, whereby the President of France is head of state and the Prime Minister of France head of government, and of a pluriform multi-party system.
The tradition in periods of "COHABITATION" (a President of one party, prime minister of another) is for the President to exercise the primary role in foreign and security policy, with the dominant role in domestic policy falling to the prime minister and his government.

Yes, I know what "cohabitation' means in "normal" English.

In France they call it cohabitation, but in the US a situation in which a president from one party has to work with a Congress from another is usually known as GRIDLOCK,,1942100,00.html

American investors seem to be voting with their wallets for gridlock, a state of affairs in which the balance of power in Washington is evenly apportioned between the two major parties, preventing most new initiatives from getting off the ground.
In the short run, that should be a good thing for financial markets, and, indeed, after some initial hesitation when it seemed like Democrats might take control of both houses of Congress, stocks and bonds moved higher on the day.
Gridlock is seen as a positive by many investors, who fear that a government that takes action is apt to take the wrong action, at least from the perspectives of the financial markets.
Longer term, however, gridlock may give way to desperation if a legislative morass prevents the country from putting its finances in order. "Gridlock IS NOT GOOD NEWS FOR A SAVING-SHORT U.S. ECONOMY, (TIH: good for gold)" said Stephen Roach, chief economist at Morgan Stanley, in a note to clients on Wednesday.

NEW YORK (Reuters) - Wall Street investors don't often agree on anything, but for the past week most agreed on one thing: political gridlock in Washington D.C. is good for corporate profits.

Some dealers said prospects for gridlock in Washington between a Democratic Congress and an unpopular Republican president could put pressure on the dollar and RENEW SUPPORT FOR GOLD, which had risen to a two-month high in the run-up to the election.

The Invisible HandDoes EU's Mandelson put Freegold on very close horizon?#14914511/8/06; 23:47:37


BEIJING (XFN-ASIA) - China should peg the yuan to currency baskets rather than just the US dollar, EU Trade Commissioner Peter Mandelson said, arguing that this would help clear perceptions that the country is engaging in UNFAIR TRADE.

(TIH: … ABOUT ACHIEVING FREE TRADE, fair trade being a misnomer)

BRUSSELS (BELGA PRESS AGENCY) European Trade Commissioner Peter Mandelson wants in the coming weeks to increase contacts with Democrat congressmen in the US. He wants to convince them about the importance of the restarting of the Doha-round, the talks in the World Trade Organisation about the further freeing of world trade.


BRUSSEL (BELGA) - Eurocommissaris voor Handel Peter Mandelson wil de komende weken de contacten opvoeren met Democratische parlementsleden in de VS. Hij wil hen overtuigen van het belang van het heropstarten van de Doha-ronde, de gesprekken in de Wereldhandelsorganisatie WTO over verdere vrijmaking van de wereldhandel.


Or does free trade not include Freegold? No free trade in gold?
If so, why bothering about the yuan peg?
Ah yes, XFN-ASIA spoke about China engaging in UNFAIR (not: unfree) trade.

The Invisible HandGridlock revisited already#14914611/9/06; 00:05:45


Gridlock normally refers to the House of Representatives and the Senate being controlled by opposing parties. ( )

But now we have the House and the Senate being controlled by one party opposing the President of Another party.

This is what the French mean by "cohabitation".

Another "party", that's why Another chose his name?

So now all the prerequisites for Freegold are in place.

The Invisible HandThe morning after!#14914711/9/06; 00:15:54

Gridlock not good for stocks after all?


The Invisible HandThis is not speculation ...#14914811/9/06; 00:44:54


By Mike Whitney
Nov 9, 2006, 01:24

In the next few months, a financial crisis will arise somewhere in the world which will jolt the American economy and trigger a swift and precipitous decline in the value of the dollar.
This is not speculation; it will happen and there is nothing that the Bush administration can do to stop it.
Currently, the U.S. economy is held together by the slimmest of threads; literally duct-taped together by massaging all the crucial economic numbers, pumping as much cheap fiat-currency into the system, and by "increasingly suspicious" maneuverings in the futures markets. With the elections over, there will be no reason to conceal the rot at the heart of the system. After all, we are not facing an unforeseen catastrophe, but a planned demolition intended to increase the disparity between rich and poor to such an extent that democracy, as we know it, will no longer be possible.
So what is Paulson anticipating?
Gabriel Kolko offers us a clue in a CounterPunch article, "Why a Global Economic Deluge Looms,"
"The entire global financial structure is becoming uncontrollable in crucial ways its nominal leaders never expected. Instability is its hallmark . . . Contradictions now wrack the world's financial system, and if we are to believe the institutions and personalities who have been in the forefront of the defense of capitalism, it may well be on the verge of serious crisis."

TownCrierFlatliner, I like your style!#14914911/9/06; 00:47:13

GoldiloxHyperinflation at your doorstep#14915011/9/06; 01:33:02

@ Ten Bears, Flatliner,

Of course hyperinflation is here! Our "great unwashed" press wouldn't know a hyperbola from a parallelogram, and in their myopia lack of mathematical education, they see "parabolic" effects in everything that makes a sudden move up or down - completely ignoring the initial hyperbolic growth.

A hyperbola, if you remember your algebra-geometry from HS days, is a curve that is asymptotic to both the X and Y axes. What means it SLOWLY grows from "near zero" until its slope reaches unity (1:1) and then mirrors itself as it approaches infinity on the other axis.

While we're not at "collapse" yet, the national debt graph suggests we are at the point where the function squares itelf in whole number quantities now. Thus Cheney's statement that "deficits don't matter".

It took a number of years (about 50) to reach unity - probably the Nixon cut-off window, but the slope increase is now in the "greater than one" side of the curve, and cannot be stopped from its natural geometric progression with anything short of complete monetary transition.

Since the "velocity of money" is what the debt financing pyramid scheme called FIAT is all about, any halt in said "velocity of money", causes a complete collapse of the monetary Ponzi scheme!

GoldiloxTypos go hyperbolic after midnight!#14915111/9/06; 01:40:41

Apologies for the late-night, blurred-vision typos in the previous post, but I don't think they unwittingly change what I meant to say.

FIAT currency brings hyperbolic inflation out of the gate - always has, and always will.

GoldiloxBaghdad's 'missing' billions#14915211/9/06; 02:04:33


When Saddam Hussein's regime was toppled in April 2003, Iraq was in a mess, despite its oil wealth.

Decades of conflict and sanctions had wrecked the infrastructure of roads, power stations, schools and hospitals.

When US President George W Bush announced the war had ended, he promised the US would help to rebuild Iraq, saying: "Now that the dictator's gone we and our coalition partners are helping Iraqis to lay the foundations of a free economy."

Since then, huge sums have gone towards reconstruction. The US has spent $36bn of its own money. More controversially it has also spent $22bn (£11.5bn) of Iraqi cash.

These Iraqi funds were controlled by the Americans during the year-long occupation that followed the war.

They consisted mainly of Iraqi oil revenues and leftover cash from the oil-for-food programme - the pre-war sanctions regime run by the United Nations. The money was in the Development Fund for Iraq, set up by the UN as the war ended.

'A huge scandal'

In hearings on Capitol Hill in Washington, Democratic congressman Henry Waxman has emerged as the most vocal critic of the US' record on reconstruction.

In particular, Mr Waxman says proper accounting procedures were ignored when large sums of Iraqi cash were handed over by the Coalition Provisional Authority (CPA) - the US-led body that ran Iraq immediately after the war - to get Iraqi ministries functioning again.

"I think we're looking at a huge scandal. The CPA handed over $8.8bn in cash to the Iraqi government even though that new government had no security or accounting system.

"No one can account for it. We don't know who got that money," Mr Waxman said.

Stuart Bowen is the special inspector general for Iraq reconstruction. His task is to follow the paper trail - and after more than 100 investigations his work paints a grim picture of waste and mismanagement.

Mr Bowen said billions of dollars were shrink-wrapped in plastic and flown out of the US to Baghdad.

"It was $2bn a flight, and I know of at least six flights," he said.

Mr Bowen said some of the cash went to pay the salaries of thousands of "ghost employees", or Iraqi civil servants who did not actually exist.


Washington transferred its "off-budget" policies to Iraq, and it remains to be seen if the current regime can survive on anything more realistic. They handed out dollars in the same flamboyant style as depleted Uranium, suggesting a similar attitude of "nuclear waste" for both. Any "flush" of dollar hegemony will surely send the current Iraqi puppet regime down the crapper with it.

The Invisible HandFreegold transition process#14915311/9/06; 02:33:01

French UN troops are 'seconds' away from firing at Israeli aircraft over Lebanon ,

Shanghai Cooperation Organization (SCO) military officials met in Beijing to discuss how to step up defence cooperation among members and observers
(TIH: Iran is an observer)
of the SCO.

It can no longer be denied that there is no way to end the escalation of violence in the Middle East.
This will continue to weigh on energy prices and will bring about higher energy prices.
All this is part of the transition process.

The Invisible HandLook at the price at which#14915411/9/06; 02:50:43


Shanmuganathan N.
Every time the Fed announces a decision on the US interest rates, gold prices also react. If interest rates are increased, gold prices go down, and vice-versa, indicating a negative correlation. The explanation offered is that when interest rates rise, the higher returns attract foreign capital and demand for dollars. The higher demand for dollars raises the US dollar-exchange rate. This increased return on the dollar makes gold less attractive and, hence, the gold price falls
A more fundamental reasoning would be that the 35-year experiment with the loose-monetary system has to end "eventually".
Subsequently, when we go back to Bretton Woods, gold would have to be priced at $30,000 to account for the dollars in circulation today. Thus, using a gold standard to define the intrinsic value of the metal, $5000 would indeed be cheap.


Where did I hear that price before?

The Invisible HandFreegold transition process revisited#14915511/9/06; 03:21:08

The Invisible Hand (11/9/06; 02:33:01MT - msg#: 149153)
Freegold transition process
French UN troops are 'seconds' away from firing at Israeli aircraft over Lebanon

"It is a miracle that nothing serious happened, because there could have been a response on the part of French troops "
Philippe Douste-Blazy
French foreign minister

The Invisible Hand No déjà-vu!#14915611/9/06; 06:03:40





Euro Advances on Speculation ECB to Push Interest Rates Higher

Higher interest rates on debt increase the dollar deluge.
The dollar-Financial Industry and its colluding media are continuously uttering nonsense about monetary and financial fundamentals.
This is mega-deception on a never-seen scale and with a shameless intensity (superlatives)

At the end of the day, and that end is approaching very fast, the final denouement will happen.

Gold at $30, 000 - only Freegold can determine what will be the universal exchange value of gold.

But nobody understands what Freegold means and how it will be lifted OUT of the dollar-monetary/financial system.


China trade surplus:
Sept. $15.3 billion
Oct. $23.8 billion

Annual oil consumption:
US 22 million barrels
China 1.7
India 0.8.

Net US assets balance-sheet (i.e., value of the US assets abroad vs. value of foreign assets in the US) is evolving negatively since 1978.

The total AMOUNT (not dollars) of consumed goods in the Chinese economy is 60% of the total amount in the world economy.


a poor country such as Vietnam wants to convert the wealth it has in universally tradeable gold-wealth

our masters continue to feel the need to refer to China, India and the Middle East when they talk about gold.

The expansion of the middle classes in China, India and the Middle East is having a positive impact on demand, ending an extended period of de-stocking by jewellery manufacturers.
Foreign exchange reserves are growing rapidly in Asia, the Middle East and China.

Are westerners too stupid to practice "MONKEY SEE – MONKEY DO"?

Why do they need to play with so-called leverages (gold-derivatives)?

Thoreauly@ Goldilox re: hyperbola#14915711/9/06; 07:08:09

Because the same thing is happening to technology, and because both it and fiat money are in roughly the same position -- i.e., somewhere above the "knee" of the curve -- I believe this represents one of the most intriguing phenomena in human history. Why? Because both the exponential ascent in technology and the exponential descent in fiat money (since this curve should in fact be inverted) favor the individual over the state.

Think of the Internet on the one hand (see link) and of Greenspan's "Gold and Economic Freedom" on the other. If the state is helpless against the Internet and can't exist (at least in its modern form) without corrupting money, then as these curves cross paths and race away from each other, will human civilization not change accordingly, i.e., exponentially?

In Gold We Trust.

GoldiloxHyperbolae#14915811/9/06; 08:13:37

@ Thoreauly,

Gotta wonder which hyperbola is being suppressed more vehemently to maintain the status quo!

Ten Bearsravaging affects#14915911/9/06; 08:27:31

"I guess by ravaging affects, I mean two things. 1) gold is unobtainable in the currency and 2) no one saves it."

Your definition of ‘ravaging affects’ is a bit narrow Flatliner. The price and availability of gold is a trifle in the big picture. Relatively few people own gold, and only a minority will ever own gold as an investment.

Oh, as you probably know gold has not been the best investment to offset the ravaging affects of dollar purchasing power depreciation. An investment in stock indexes a decade and a half ago or most real estate investments have beat gold hands down.

The ravaging affects that have landed on the dollar holders have been much broader. Almost a century of the slaughter of innocents associated with largely unabated warfare since the little crowd of inflationist took over.

The looting associated with the great depression and the current economic conditions, following that master inflationist Sir Greenspan, have stressed many. (Yes the effects of the depression flowed through to current generations.)

Gold, in my view, is an insurance policy used to preserve wealth for future generations, not necessarily the best investment to make, but certainly not the worst, and one which will shine in times of catastrophe.

A few years back, a poster here suggested that all named posters here meet for a discussion he questioned the size necessary for a meeting room. The implication was that some (one) poster used many handles. Interesting idea.. "that".

ThoreaulyHyperbolae#14916011/9/06; 08:47:50

@ Goldilox

Good question, my anwer being that while the state will do (is doing) everything in its power to continue the fiat hyperbola, it is schizophrenic when it comes to the technology hyperbola. Why? Because of the ongoing battle between the fundamentalists and the secularists to control the state, the former wanting to suppress "God-like" technology, with the latter wanting to control technology for its own purposes. Think stem cell research, though what the fundamentalists might think of, say, the robotization of the solder, which DARPA is deeply involved in (see link), is unclear. (Or is it, as the fundamentalists don't seem to have any qualms about "dropping the Big One" on their fundamentalist counterparts.)

But again, without fiat money to pay for such research -- indeed, without Monopoly money to perpetuate the welfare-warfare state -- the fortunes of each will be held in check, much to the advantage, imo, of the individual and thus of humanity as a whole.

GoldiloxTech suppression#14916111/9/06; 09:09:56

@ Thoreauly,

I was thinking more in terms of the piddling amounts spent on serious "forward looking" energy research and efforts to "rein in" the Internet, but your points are also valid.

Ever since Westinghouse and Edison figured out they couldn't "own" Tesla (especially after both balked on paying his contractural royalties), they demonized his later research, and we have been pretty much stuck with a 19th century grid system that maintains "central control" in favor of more localized power designs.

A few efforts have sprung up - Million Solar Homes, etc., but they still focus on legacy grid systems, wasting a lot of energy in transport.

I think the same is true in general with "trickle down" economics, as pointed out by Ms. Fitts and her Solari Network efforts to "localize" infrastructure investment.

One can also argue that the "benefits" of globalization are actually negated by the ecological, social, and economic costs of increased transport. Oil cannot stay "cheap" when it is the entire lifeblood of the globalist JIT economies. Worse yet, the resource wars eat up about 2/3 of the GNP, so we really experience highly negative "growth" as a result.

GoldiloxPoG on ROO MEAT!#14916211/9/06; 09:34:09

Release the hounds, INDEED!
geAn Anatomy of Bear Markets#14916311/9/06; 09:57:30

Faber says:

"At present [April 2006], the Dow is at around 11,000 and the price of gold is at $590. Let us assume that, as a result of Mr. Bernanke's more efficient paper money printing machine (incidentally, a machine that has been in operation since the formation of the Federal Reserve Board in 1913 and which accounts for the dollar's 92% loss in purchasing power since then), the Dow Jones rises to 36,000 in the next few years. (It won't take another 100 years for the US dollar to lose another 92% of its purchasing power; more likely is 10 to 20 years.) If this were the case, the price of gold could rise from $550 to $3,600, which would bring down the Dow/gold ratio from currently about 19 to 10; or, in an extreme case, gold could rise to $36,000, which would bring down the Dow/gold ratio to only 1 (as was the case in 1932 and in 1980)."

"Thus, in nominal terms, the Dow would have trebled from the present level, but lost significantly in real terms -- a possibility that I regard as very likely. In this respect, we shouldn't forget that during the German hyperinflation period between 1919 and 1923, share prices rose sharply in paper mark terms but tumbled in dollar terms (then a strong currency), because the rate of the paper mark depreciation against the US dollar exceeded the local share appreciation. Thus, by October 1922, an index of shares in local paper mark terms had increased from 100 in 1918 to 171 billion, while in dollar terms the same index had dropped from 100 to 2.72! Needless to say, the 1918-1923 German hyperinflation was devastating for paper mark cash and bond holders."


Since the ultimate hard currency is gold, it is logical that we should monitor Dow/Gold ratio.

Tobin's Q Ratio in that chart is the combined market value of all the companies on the stock market divided by their replacement costs. Q Ratio chart is updated at

geFaber link#14916411/9/06; 09:58:30

FlatlinerThat Hyperinflation thingy#14916511/9/06; 10:17:20

I agree with all that the currency expansion rate is high and growing. The affects are felt by all through price inflation and register emotionally with everyone. But there is a difference between hyperinflation and just plain old run of the mill inflation. Inflation turns into hyperinflation when no one is willing to save that currency. In other words, when the currency carry trade becomes too expensive to hold dollars, it's liquidated by all turning inflation turns into hyperinflation.

Even if the currency creation rate is 100%, if the function of the economy is such that the money is put to use without making the currency carry trade too expensive, people will continue to carry it. If you look closely, you might notice that people are still saving dollars. They have been since the first claim that hyperinflation was on our doorstep.

If you look around at all the central banks, they all save their surplus. This savings process is the means by which hyperinflation is kept at bay. Similarly, the growth of financial investment instruments along with investment laws that penalize the liquidation of savings, we have high end recycling of dollars into these investments (created from thin air) rather than recycling into goods and services (that would trigger hyperinflation).

Now, let's take this a step further. We all know that through the magic of short selling, capital can be removed from markets in a short period of time. Looking back at 2k, it was very clear that too many people felt too rich through their new found wealth and they took that capital to chase goods and services. It was at that time that the Fed stepped in and changed people's perspectives. In other words, the drain of liquidity helped people feel poor again. That feeling translated into less conversion from stock wealth into goods and services. Thus, took the edge off the force of hyperinflation.

The next opportunity that came along came from the ability to acquire cheap currency. Sense Americans (and many others) think in dollar terms, being able to get 100k for pennies/month plus the lack of understanding about general price inflation rebuilt that sense of ‘richness’ in the people again. General shortsightedness shines through and people start feeling rich again and exercise their right to apply their wealth towards goods and services – once again driving up prices.

So once again the Fed gets worried that people will convert savings into good and services. They hike interest rates and this emotional wealth generator (known as easy money) puts a damper on this conversion process.

Once again, hyperinflation remains at the doorstep, but the knocking is a little softer than before. Inflation is bad, but it hasn't triggered the steps needed to kick off hyperinflation. Will hyperinflation remain just out of reach? Only as long as goods and services are not bid for by savings. Will this happen? Who knows?

But then again, I could be all wrong.

FlatlinerIn defense of the dollar#14916611/9/06; 10:33:38

If you didn't see my (other) ramblings found in yesterday's archives about the sudden ‘reveal concept’, you could help with my monetary understanding if you old timers might let me know if the topic has been covered in this forum before.

The brain fart spewed can be summed up that any ‘sudden reveal’ will most likely come from the Fed in defense of the dollar in order to mop up foreign savings.

Knowing that the Fed will do anything it can to preserve the monopoly of printing the US Currency, it logically stands that to remove the feeling of being rich from foreigners that want to move their saved US Dollars into goods and services (triggering hyperinflation), the fed may offer gold at some ridiculously high price to call home paper that is being liquidated.

Does this idea seem farfetched? Sometimes, when a creditor realizes that the debtor can't pay back a loan, it's better to seize a small asset then to get nothing after the bankruptcy proceedings. And, if it turns out that that small asset just happens to be the foundation upon which your monetary system is built, you suddenly find yourself very rich.

KnallgoldSudden reveal#14916711/9/06; 10:36:53

What if we combine "sudden reveal" and "reform of the monetary system" ?

FreeGold as a concept was born long ago,put into discussion on this fine Forum by men which voices are heard.So I'm seeing this as a vision,more precisely:a goal actively pursued.

No official uses the words "reform of the financial system",but whats going on behind the scenes?Due is it,no?And aren't we "on the road"?

The Gold revaluation,not a big blast by a "rogue trader",but part of a deep reform of the financial architecture,to be announced from a "good sounding place"?I think Randy ment something like this,no?It would fit the sudden reveal perfectly.I'm not going into details on the exact technicals and possible events/schedules/politicals,I just wanted to put the focus on the vision.For the details,we have better brains than mine...

MKFlatliner#14916811/9/06; 10:45:05

In my view, that would only be done under an international monetary agreement signed by the major trading nations at an agreed upon gold price, that I would estimate in four figures -- $2000 to $3000 per ounce. Of course, there would be other provisions to the agreement including de jure budget balancing mechanisms, money supply bands, a free floating gold price etc. I present this as a "what if" in response to your query, as in: "What if" the great trading nations wanted to redistribute the official sector gold holdings in order to blance the dollar system and then restart under a new currency regime? I don't know that they will choose to do this though it makes a great deal of sense. Of course, those holding physical metal will benefit from this though there could be a breakdown in the physical gold market when the ensuing scramble begins. . .
Thoreauly@ Goldilox re: hyperbolae#14916911/9/06; 10:53:13

Globalization" is really just "dollarization" -- i.e., the perpetuation of "free trade" through a fiat currency that other nations must hold in order to protect their own fiat -- that is doomed to fail, and massively so, the only question being when. And since oil must be dollarized to perpetuate this fraud, massive ecological and socioeconomic imbalances are the inevitable result.

Of course, we would have been long past the Age of Oil -- nay, there would not even have BEEN an Age of Oil -- had the state not institutionalized it as a "strategic resource" to be endlessly fought over at the expense not only of alternative fuels but of alternative modes of transportation (e.g., light rail instead of cars) and alternative modes of development (e.g., transit-oriented development instead of suburban sprawl).

But as "War Is the Health of the State" (see link), what else should we expect? And why wouldn't we then expect that what the state spends on research would be part and parcel of that war? Government research, after all, is purely a matter of political influence, i.e., of special interests that wage war against each other in an arena that could not exist without the state for the simple reason that it IS the state. Thus are highly beneficial technologies that cannot not be owned routinely suppressed, even as those that CAN be owned are now routinely offered for free via the open source movement --

Oh, what different world we would live in if society were left to its own devices.

But again, as the technological and monetary hyperbolae intersect . . .

Flatliner@MK#14917011/9/06; 11:15:13

Seems reasonable... And, if you think about it, these agreements (to some extent) could have already been made.

Seems trivial, by executive order, the futures markets could be terminated and settled and then gold would be open for bid (rather than revalued). The settlement that would need to happen for the temporarily closed futures markets will be in US Dollars and the sums would simply be added into the price of gold.

Another wrote in this forum that the price of gold goes up when big traders know gold is available for purchase. If the Fed willingly announced gold for dollars, all foreigners would bid it up in order to make their claim. Knowing this, it would be foolish of the Fed to under price gold.

As for the provisions of a free floating gold price, that is a given here. The Fed will not have backed the FRNs with gold, but rather offered gold in exchange at going market prices.

Stretching into the ‘legal agreements’ that you mention, to me, they don't matter. The simple act of the Fed offering gold for dollars means that the currency is being defended. This also brings up the key point behind the MTM use of freegold. When gold is offered at a worldly bid price and the central bank has a reserve, the central bank can continue to inflate the currency supply and have gold as a tool to mop up excess savings. In a freegold system, who cares if the US balances the budget. All those that would hold currency will switch to gold for their savings and let the Fed inflate away. Inflation will end up overseas and right back into the US Dollar MTM gold price.

Using the US gold reserves in a MTM fashion will empower the Fed with another tool to maintain confidence in the US Dollar. We may not see high inflation rates and we may not see the collapse of capital (depression) if the MTM tool is put to work.

Flatliner@MK#14917111/9/06; 11:20:05

Working change "Knowing this, it would be foolish of the Fed to under price gold." To "Knowing this, it would be foolish of the Fed to allow redemption all at once. Selling off a little at a time will allow the market to find a functioning balance – because some gold savers will offer up their gold for dollars."
BelgianGOLD#14917211/9/06; 11:27:29

Flatliner@Belgian#14917311/9/06; 11:33:40

Why are you back?
FlatlinerSudden Reveal and silver#14917411/9/06; 11:35:52

This idea doesn't support a bid for silver. Hyperinflation supports a bid for silver.
Knallgold!!#14917511/9/06; 11:43:57

Hello Belgian!Just this weekend I have been to Belgium,wonderful,particularly fell in love with Brugge.And we have eaten like God in Belgium...

Greetings from Suisse,and may we have FreeGold,the sooner,the better.

Smeagol! :~8-)#14917611/9/06; 11:48:18

Welcome back, Ssir Belgian!
Thoreauly@ Belgian#14917711/9/06; 12:35:18

Yes, what a wonderful surprise, and please enlighten us as to why there will be no gold standard!

Do mean we are heading straight to freegold?

Can't wait for your answer!

FlatlinerBelgian: a passing ship in the night?#14917811/9/06; 12:44:29

Thoreauly, It appears that the comment may have been directed towards MK's post below. MK's post seems to imply that some international banking society will get together to come up with a price for gold and that they will sign agreements with regards to conduct.

Belgian has never believed this. The Sudden Reveal concept that TownCrier brought up (that I've butchered with hypothetical ideas) needs no agreements or fixed price for gold. In fact, if the international community agreed to a fixed price or 2 or 3k, the Fed would not agree and we will have more of the same. 2 or 3k will not work. Only an environment where the Fed can offer up a little gold to the highest bidder to absorb the most surplus currency will serve this purpose.

MK, do you read Belgian's comments this way? Did you mean to imply a fixed gold price?

Ten BearsWelcome back Belgian#14917911/9/06; 12:46:26

Druid@Belgian#14918011/9/06; 12:47:44

Druid: Welcome back.
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Gandalf the WhiteGREAT to "see" you again Sir Belgian !#14918211/9/06; 12:51:26

Ten BearsScattershooting#14918311/9/06; 13:53:24

@Goldilox #: 149150
Well said, and informative: thank you.

Anecdotal evidence:
In my area of the world, we have very hot summers. Since the 1970's many young mothers entered the work force, due in large part to the decreasing purchasing power of the dollar and the inability of one earner to support a family. Women have been encouraged by the propaganda machinery to work outside of the home partially because they produce extra tax revenue.

Every year for the past several years at least one child is killed by heat when an exhausted sleep deprived mother or father leaves the child in the closed auto. In a neighboring state they are rarely prosecuted, here they generally are. There are also frequent cases of incompetent day care workers causing children's deaths.

The paid ‘village’ involved in child care, while both parents work one or more jobs each to stay up with the constant ‘raising of the bar’ of living costs, is a poor substitute for the full time care provided children throughout the nineteenth and early twentieth century.

One small (perhaps overly emotional) example of the ‘ravaging affects’ of dollar purchasing power depreciation:

TownCrierA word or two on the Uruguayan coins...#14918411/9/06; 15:14:57

Coming from a country that has suffered massive inflation, these coins make a particularly good taking point for the distinction between the choice to save using gold metal instead of saving currency units of the local money.

When these were minted in 1930, they had a face value of 5 pesos stamped upon a gold content of one-quarter ounce. Having 20 pesos in a bank account or in cash folded up in your wallet meant that you could at that time use its purchasing power in exchange for one ounce of gold.

In the intervening 76 years, a whole lot of water has passed under the bridge. The world discovered through experience that the elasticity of the banking system's money could not stably coexist within a fixed convertibility relationship with physical gold.

Long story short, these coins were stored away from the fray as the peso system inflated iself into near worthlessness. Two peso currency system overhauls took place in the 70's and the 90's, each one devised to issue a "New Peso" currency unit to equate with the old one at a rate of 1 new peso per each 1000 old pesos. Effectively this hid six zeros worth of inflation upon the pricetags of everything, including the notes themselves.

As a result, savings in 1930 that had been kept in the form of paper notes or bank ledger entries have severely depreciated in value, whereas savings held in the form of gold metal has not.

In fact, the quarter ounce of gold contained in these coins would equate not with 5 of those original pesos, but with 3.750 BILLION of those pesos.

And today that number continues to grow as gold continues to climb and the peso continues to lose value.

Choose the form of your savings wisely, and someday the gold you have saved will return the favor and save YOU.


TownCrierPIMCO sees dollar resuming long-term decline#14918511/9/06; 15:28:32

NEW YORK, Nov 9 (Reuters) - The dollar will resume a long-term decline in the months ahead due in part to increased diversification in foreign central bank reserves, managers of the world's largest bond fund said on Thursday.

"The U.S. dollar is due for a renewed downward adjustment ... Several factors suggest the dollar is likely to resume its downward path in the months ahead," they said.

"There is evidence that many of these countries are seeking to pick up the pace at which they diversify away from the dollar," PIMCO said.

Zhou Xiaochuan, central bank governor of the People's Bank of China, on Thursday said China has a clear plan to diversify its towering $1 trillion stash of reserves.

Central banks in Russia and Switzerland in recent months have said they are increasing the share of yen in their reserve portfolios.

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

Some days you get the distinct impression that PIMCO's managers would sleep better if the charge of their fund was to hold gold instead of bonds.


USAGOLD Daily Market ReportPage Update!#14918611/9/06; 16:19:40">
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THURSDAY Market Excerpts

Gold leaps, Chinese talk weakens dollar

November 9 (from Reuters) -- Gold futures rallied 3 percent to reach a new two-month high on Thursday as investors bought on rising oil prices, a weak dollar and speculation that China could buy gold for its foreign currency reserves.

The recovery stunned traders as it came so soon after gold succumbed to profit taking on Wednesday, after the Democratic Party wrested control of Congress from Republicans in Tuesday's elections.

Morning buying turned into a precious metals free for all, with silver rising over $13 an ounce, after China central bank governor Zhou Xiaochuan said China was considering many instruments to diversify its $1 trillion foreign exchange reserves, without getting specific.

"It certainly means pressure on the dollar against all other currencies," said a dealer at a precious metals refining company.

The COMEX December gold contract settled up $18.50 at $636.80, reversing Wednesday's $9.40 sell-off. The benchmark contract fell to $614.50 in overnight electronic trade, shortly after Wednesday's close.

The swift rebound in a market that was extremely overbought after a 12 percent gain in the past month reinforced the positive outlook for gold. It also made traders nervous.

"There are good reasons to own gold. I think there are good reasons to be bullish, but I find the turnaround a little surprising," said a commodity broker at a futures commission merchant.

A recovery from a four-month low of $563.50 on Oct. 4 gained momentum in the past two weeks as computer trading models at trend-following commodity funds issued buy signals when gold cleared predefined technical levels.

Some analysts and traders predict that gold will revisit 26-year highs set in May above $750, possibly this year.

Gregory Weldon, publisher of The Metal Monitor, noted that gold bulls should be encouraged that gold rose in both sterling and dollar terms, even though the Bank of England raised interest rates on Thursday.

After winning control of the House of Representatives and taking the Senate, Democrats will have more control of economic policy. That prospect sent jitters through the stock market on Thursday, weighing on the dollar and sending money into gold, a day after the Dow Jones industrial stock average reached a record high.

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

TownCrierGold Gains Most Since June as Dollar Drops on China Report#14918711/9/06; 16:27:26

ov. 9 (Bloomberg) -- Gold in New York gained the most since June on speculation that China will boost purchases of the precious metal to diversify its foreign-exchange reserves.

The dollar tumbled against the euro after Reuters reported the People's Bank of China may switch some of its currency reserves. Gold, sold in dollars, generally moves in the opposite direction of the dollar. The metal is up 23 percent this year while the U.S. currency fell 7.7 percent against the euro.

``China indicated many options are being considered, and the market is inferring some reserves will go into gold,'' said James Vail, who manages $800 million in natural-resource stocks at ING Investments LLC in New York.

``All central banks are trying to diversify,'' People's Bank of China Governor Zhou Xiaochuan said at a conference in Frankfurt. ``We have had a very clear diversification plan for several years.''

``I'm worried about a weakening dollar and bullish on gold,'' said Thomas Au, principal at R.W. Wentworth & Co., a New York-based consulting company. ``Apparently, Mr. Zhou and company are, too.''

``With the change in Congress, and an inferred anti- business climate, the foreign investors are souring on the dollar,'' ING's Vail said.

``Gold has taken on a life of its own,'' said Matt McKinney, a commodity broker at Infinity Brokerage Services in Chicago. ``If it gets any help from a weaker dollar or stronger oil, that would surely catapult it.''

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

Conditions evolve as time marches on. Will the purchasing power of your chosen savings keep pace? Choose metal.


The Invisible HandÀ bon entendeur, Salut! #14918811/9/06; 16:36:52





What a day we had!

The price of oil is again rising (above $61) together with,
on the one hand, the euro (above $1.28)
the euro's gold wealth reserve ($635) on Another.

The greenback is left in the dark without its Freegold sceptre.

Note that gold is now jumping more than $10 a day instead of winkling $6.

This means that we are every time noticing a movement of TWO PERCENT on the price of gold (POG).

This is "SYSTEMIC" and indicates that the POG has been submitted / transitioned / transited to Another governance.

Another governance which will at the end of the day lift gold OUT of the dollar straitjacket and thereby have changed gold's status into that of FREEGOLD.

… let's stroll on over to the latest Economist magazine and take [a] look for ourselves. Hmmm! The Dollar Index for All Items is up 37.5% from a year ago.

1yearchg +169.00 +36.24%

37.5% vs. 36.24%

This means that the POG goes up
the USDX goes down.

What does this tell about the survival chances of the greenback?

And, by the way, what does this tell about the TRUTH of the story which is being hammered out on these pages by A/FOAakaTG since 1998?

Even the blind don't need a chart now to realise that 37.5 equals 36.24. Even they realise that the Freegold deal is done.

À bon entendeur, Salut!
(Greetings! - to her who can listen)

TownCrierGold Shines; Chinese Shoot Down Dollar#14918911/9/06; 16:44:19

NEW YORK (Dow Jones) - The U.S. dollar tumbled and gold rallied Thursday after news that China's looking to diversify its rapidly growing foreign-exchange reserves.

A number of countries, including Sweden, the United Arab Emirates, Qatar, and Russia all announced intentions this year to diversify their reserves away from dollars.

Officials in Beijing have also repeatedly hinted that China might gradually reduce its purchases of dollar-denominated assets. China's reserves increased by a massive $850 billion in the past five years...

Leading government think tanks in Beijing have recently recommended using some of their reserves to buy other assets such as gold and oil, which bodes well for gold.

"About 60% of total international reserves were held in gold in 1980. That figure was just 9% in 2005," Crescenzi said. "Obviously there is plenty of scope for central banks to increase their gold reserves going forward."

A large purchase of euros by China, for example, would cause the euro to surge, he said. A strong euro would hurt European exporters as it would make their goods more expensive.

Such a move would "invite protectionist measures far greater than China has thus far experienced from the U.S. given the protectionist tendencies in Europe," he said.

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

Over past years I've frequently expressed that same issue regarding a shift from one reserve currency to that of another country resulting is more of the same grousing about unwanted currency strength adversely affecting the trade position of the newly chosen reserve country.

This continues to be a strong argument for the gold avenue, because soaring gold prices will not adversely impact anyone's trade position -- Mother Nature will not get an ear-full from any special interest sector of her population because her minions are not in the business of exporting anything.


The Invisible HandAmerica Defeated In Economic War#14919011/9/06; 16:52:59

$2 Trillion Economic ($) Bullets Poised To Make Takeover Complete.

Japan has accumulated $1 trillion surplus currency reserve ($) bullets. China has also accumulated $1 trillion surplus currency reserve ($) bullets through their balance of trade surplus with the United States.

All this monetary ammunition is being used to buy our major corporations which are for sale daily on the open stock market. We have already lost 8,000 companies in the last 10 years alone to foreign purchase and domination. All this coupled with a dismantled industrial infrastructure assures a foreign dominated future and a much lower standard of living.

This accumulated money held in foreign hands is now making us almost completely controlled in every way by foreigners.

- Foreign countries are funding almost 100% of our Government debt
- Lobbying American politicians (hundreds of millions of dollars spent in Washington in last decade)
- Influencing American media through advertising dollars
- Influencing American educational institution through professor fellowship and research funding
- Creating inextricable links to local communities through "insourced" manufacturing and employment
- Not just sheer magnitude of ownership of U.S. companies, but ownership of major chokepoint industries as well as key thought-controlling publishing, movie, and other media industries

There is now no limit to what foreign countries can do to infiltrate, bind, and obligate our local, state, and federal officials and business leaders. We are not allowed to do any of these things in other countries and we have no oversight or restrictions as to how foreign countries can influence and take over our economy and control our whole country.

This article can be found at:

GoldiloxWelcome back#14919111/9/06; 17:01:30

I, too, want to welcome Belgian back on this fine Gold day! His insights provide additional thought fodder to the US-centric "analysis" that I endure daily!

Welcome back, SIR BELGIAN!

- Sir G'lox

The Invisible HandLike in my good old pre-Y2K days#14919211/9/06; 17:03:12


1. Wholesale sellout of core strategic assets to foreign acquirers: according to official figures, more than 8,000 American companies have been sold to foreign corporations in the last 10 years for at least $1.2 trillion (US Dept of Commerce)

2. Decline of vital industries through bankruptcy, foreign predatory competition, and foreign acquisition: foreign interests now own a majority of US industries in areas like mining, publishing/movies, cement, mineral manufacturing, rubber and plastics, and engine manufacturing and own substantial portions in areas like pharmaceuticals, glass, coal, chemicals, industrial machinery, transportation equipment, petroleum, and others (Internal Revenue Service)

3. Inability to manufacture competitively: American manufacturers suffer a 30+ percent structural cost disadvantage compared to overseas competitors through taxes, health and pension benefits, litigation, regulation, and energy costs – this disadvantage is more than the total labor cost of production in many other countries (National Association of Manufacturers)

4. Overdependence on imports: $1 in $4 of US consumption of manufactured goods now goes immediately and directly to imports (US Dept of Commerce)

5. Massive wealth transfer to foreign ownership: our trade deficit, at $723 billion in 2005, is funding foreign competitors with $1.4 million per minute of our dollars or $2,400 per US person per year spent on imported cars, clothes, toys, and thousands of other products (US Census)

6. Loss of job and career opportunities for people at all educational levels: 3 million high-paying manufacturing jobs lost over past 5 years (US Bureau of Labor Statistics)

7. Transition to low-paying services-oriented ("servant") economy: high-paying goods-producing industries have lost net employment over the past 25 years while non-tradable service-providing employment has nearly doubled (US Bureau of Labor Statistics)

8. Insourcing of foreign manufacturers destroys our domestic industries, takes profits and taxes overseas, and provides only low-skill jobs for American workers: foreign manufacturers operating in the US now account for over 20 percent of our exports and manufacturing assets, and a large percentage of our employment (Internal Revenue Service)

9. Foreign financing of vast majority of government debt: foreign countries now control 47 percent of our total federal deficit and finance nearly 100 percent of all new borrowings – our competitors are now our bankers (US Federal Reserve)

10. Outsourcing key manufacturing, research, and design: unchecked offshore outsourcing benefits individual companies and shareholders but destroys entire industries and communities

11. Lost scientific, engineering, technological prowess: in 2004, China and India graduated a combined 950,000 engineers versus 70,000 in the US. US ranks near the bottom of science/math proficiency (Associated Press)

12. Wealth shift into less productive assets: residential real estate now represents a record 38 percent of household net worth on record over-inflated home valuations and record mortgage levels (US Federal Reserve)

13. Record levels of personal and government debt: household liabilities at record levels, federal government adding record levels of debt each year financed mostly by foreign countries, trade deficits transferring unprecedented accelerating amounts of wealth to foreign hands each year (US Federal Reserve)

14. Misleading commonly used economic statistics: misleading incomplete statistics like GDP, job creation, and productivity belie our crumbling economic infrastructure

15. Proven failed trade policies and other legislation contributing to our demise continue unchallenged: destroying our industry and allowing our assets to be sold or taken from us

If these trends continue unabated, what future could we possibly have? This wealth of this country was created under far different conditions than those that now exist. We are being misled into believing a false sense of perpetual invulnerable self-sufficiency. We largely fail to acknowledge just how extremely vulnerable we are. Given the scale of the problems outlined below, any single major disruption to our economy could have devastating consequences. Decide for yourself.

This article can be found at:

GoldiloxGold, the US Dollar and Crude#14919311/9/06; 17:06:11


There can be no conclusion other than the obvious fact that .8500 is a crucial level for the USDX.

Crude is proving that any active market that cannot be driven lower by an army of short sellers is clearly headed higher.

Gold is acting better than even the rational bullish market participants expected. Gold is showing that it wants the upside, not the downside and it wants it in a BIG way.

Gold is reflecting the fact that "Like Father - Like Son" the Democratic sweep of the mid term election has caused shock and surprise in the White House. It will turn to anger quite soon. Anger clouds judgment. Clouded judgment spawns serious mistakes. Serious mistakes create gridlock in politics.

Gridlock leads to items spinning out of control.

Of course the Chinese as well as all fiscal surplus Asian countries will purchase gold as they are gold poor in their reserve position. There is no question at all about that and there never has been. Asian diversification of their reserve dollar position into gold and the Euro (non-dollar) has always been the thesis of Chung Phat. This is NOT new news nor is it the lone reason for gold's move today.

Gold's target now is $650 and then on to $682.

Gold rules 2007 and 2008 in a major way.

The metals shares that have outperformed under bear pressure will continue to outperform in a bull phase. Laggards will lag. That is a simple rule of this business.

Buy weakness and sell 1/3 on strength. If you have bought strength and sold weakness there is still time to stop losing your shirt. Bite the bullet and stand aside. Buy the next reaction.


I had a short conversation with Jim via email today, and I totally concur (as do the web bots) that the Admin's reaction will turn to mismanaged anger soon. That will accomplish nothing more than continued "risk premium" in Gold and Silver.

GoldiloxReference#14919411/9/06; 17:07:41


as if you don't all know where this came from.

The Invisible HandPelosi's Real New Deal#14919511/9/06; 17:18:19

European central banks did not sell enough gold under the 500-tonnes, five-year pact. The shortfall is the second year in a row and is an indication that the banks have pretty well sold all they wanted to. For example, Germany, the biggest owner of gold, has not sold any of its hoard because of a dispute between the Bundesbank and the government over the disposition of the proceeds. The shortfall of central bank gold sales has been neutralized in part by the drop in demand for jewelry, which is sensitive to higher gold prices. De-hedging has also contributed to demand (gold miners bought back 2 million ounces in the third quarter) and overall investment demand is expected to outpace supply as producers again fail to replace the decline in output from existing mines.
Meanwhile, the U.S. core inflation rate hit 3.5 percent last month, the fastest pace since 1995, despite 17 consecutive rate increases. Of more concern is that the U.S. Commerce Department reported that prices of imported goods rose 6.6 percent in August, due in part to higher oil prices and the fact that the U.S. dollar has fallen almost 6 percent this year. And how do we explain that the New York Taxi Commission is to increase cab fares by 12 percent? And while it has become more expensive to drive your car or even taking a taxi, tire-makers are increasing the price of tires by 8 percent. What we have is "stealth inflation"
However, gold is not a bet on inflation or China, but a bet against the U.S. dollar.

What has now to happen is that that ugly M-pattern has to leave the tops of the price of gold.
Chartists find such an M-patterns extremely repugnant.
Gold must thus reach new highs in almost all currencies,

À bon entendeur, Salut!

Nancy, can you hear me?

The Invisible HandSinclair's utter nonsense#14919611/9/06; 17:22:23

(Buy weakness and) sell 1/3 on strength.

Another imbecile who doesn't want to grasp the concept of Freegold.

GoldiloxGOLD SHORT-TERM BEAR OVER - GOLD DETACHING FROM CRB? #14919711/9/06; 17:25:31


Well, last week was one busy week for gold and for me! Recently, I had been tracking the gold short term bear, and I am glad to say that is over. Lots of reasons for this.

It was certainly never my goal to give gold bulls a hard time, and now I am glad to be talking about gold's long term bull.

There are several reasons for me to be able to say that the gold short term bear is over. First, let's look at some action of last week:

Gold rose about $20, despite the fact that the USD strengthened that week – gold bullish.

Gold rose last week in spite of continued oil weakness too – gold bullish.

Gold rose last week in spite of supposed good US unemployment numbers at 4.4% - gold bullish.

Gold rose last week because there were bad US economic statistics, the ISM index barely over a recessionary below 50 reading, at just over 51. – Gold Bullish

Gold rose last week when US productivity growth came out at zero. That is inflationary and recessionary. –Gold Bullish

Gold had risen the prior week when Greenspan said central banks don't want the USD that much any more…. Gold Bullish

There are reports out that there will be a physical excess in 07 of bullion due to some reduced jewelry buying at these prices, and things like supposedly Central Banks may not add to their bullion holdings, among other things. That is Gold Bearish. But I foresee enough fund buying to easily overcome the projected excess of about 150 or more tons in 07.

Iran and Iraq situations are both deteriorating, that is very Gold Bullish. Iran is right in the middle of the Prophet 2 war exercises in the Gulf, right in the teeth of an unprecedented gigantic US naval operation in the Gulf – very nervous situation. – Very Gold oil Bullish.

Gold appears to be detaching from the CRB which had been dragging gold down. If the US goes into recession, the CRB would continue down, but if gold detaches because of financial flight to safety and geopolitical flight to safety, then gold will rise regardless. If gold stays detached from the CRB, that is gold bullish.

Overall assessment: Very gold bullish, and the end of the short term gold bear I have been writing about recently. There may be some profit taking however. I expect gold to stay above 610 in this latest week.

Flight to safety to buttress gold

As I said in my previous public article, Post US Election Anti Investment Pussyfooting, I am very concerned about both the deteriorating situation in Iraq and Iran. I expect the fear premium to return to both oil and gold in coming months. This is one major reason I decided to pull my December forecast of $500 to $550 gold, as well as gold appearing to detach from the CRB which had been dragging it down. I notified subscribers of this change – that the short term gold bear is over – on Nov 2, 06.

Fund buying into rallies last week

Last week, when gold shot up $20, funds were buying into the rally after gold first passed $610, and then $620. Up to last week, funds had been selling into gold rallies for roughly two months. That change, funds now buying into rallies, is also a reason why I say the short term gold bear of the last several months is over.

Jewelry buying lower, and Jewelry demand lower at these prices

But, fund buying can easily replace that. India had about a 30-40% drop in jewelry tonnage demand because of higher gold prices, and also a trend there of gold fund investing and stock investing this year. People are more interested in India than before in paper investments. India will always have high jewelry demand, but there is a trend of money there moving into paper gold, and stocks, instead of such focus on bullion type purchases such as jewelry. The reduced jewelry tonnage demand is one reason for the forecasts out, by Virtual Metals, among others, for a gold bullion surplus of about 150 tons in 07.

Gold detaching from CRB?

Here is a chart that shows that gold has just diverged some from the CRB. In previous weeks/months, a dropping CRB had dragged gold down with it. If gold stays detached from the CRB, and there is flight to financial and political safety going forward, gold can rise even if the CRB drops going into 07. Also, even if the USD were to stay in its present range of 80 to 87 on the USDX.

US mid-term elections

The recent Democratic victory in congress may help reduce US spending excesses (to a small degree). That will be interpreted by gold investors as slightly gold bearish. Overall, however, I foresee gold being strong into months ahead for the reasons outlined above.

The gold short term bear is over.


Published YESTERDAY!

GoldiloxImbecile?#14919811/9/06; 17:29:33

@ TIH,

Epithets aside, one has to remember Jim is first and foremost a miner, and second a trader, or maybe the other way around. He has never advocated 1/3 trading for physical, but for gold paper of various qualities.

Not sure why that qualifies him for imbecility in your book, but you're welcome to your opinion.


contrarianPrognosticators--Good and Bad#14919911/9/06; 17:39:39

I think Sinclair is one of the most accurate voices out there, as I have been following him since 2002. His is almost always on the money.

As for the Laird forecast of $500-550 gold, which I think he made around September, I bit my tongue at the time, but it didn't pass the gut test for me at the time. I knew he had made some correct calls in the past, and said to myself, let's see if his record continues. (I didn't think it would). Fortunately I sat tight.

Now comfortably proved wrong, he joins the other side of the camp (or risks appearing a total fool!)

GoldiloxGold production falls again#14920011/9/06; 17:41:48


South Africa's gold production fell 5.1 percent but and non-gold mineral production inched up by 0.5 percent year-on-year in September, Statistics South Africa said on Thursday.

Mineral production as a whole fell 0.4 percent year-on-year in the month.

Gold production fell to 67.6 index points, and non-gold mineral production came to 133.5 points.

Seasonally adjusted gold production was down 1.2 percent to 63.7 points in the September quarter, compared to the three months to end-June, with non-gold minerals up 1.1 percent to 126.7 points over the same period.

Overall there was an increase of 0.8 percent in the seasonally adjusted total mining production for the three months ended September 2006 compared to the previous three months.

Mineral sales rocket

Mineral sales meanwhile totalled R17.564-billion in August, up 50.3 percent on the same month a year ago, Stats SA said.

Gold sales in August totalled R3.1868-billion, up 115.7 percent from August 2005, and other mineral sales totalled R14.377-billion, 40.8 percent higher than a year ago.

This was the third consecutive month that total sales topped R17-billion.

August's seasonally adjusted gold sales were however down 4.8 percent compared to July, while non-gold minerals increased by 6.9 percent in August compared to July.

-Goldilox (:^)

Sales up, supply down

Chris PowellChina says it long has had a dollar diversification plan. Do you?#14920111/9/06; 18:15:51

Latest GATA dispatch.
The Invisible HandNationalism and Heroism#14920211/9/06; 19:03:19






HUMILITY – Is that no virtue any longer?

show this great Nation what is happening in the gold market!

Now that the US dollar is toast,
let me try to give some views of nationalism.

First, nationalism would have positive values of great importance. In addition to its familiar role in the liberation of nations, it has often provided the motivation for unified action by the people of a state toward praiseworthy objectives. It would have been a significant force in promoting representative government. In brief, one might say that, by supplementing compulsion, self-interest, moral obligation, religious duty, and other forces, nationalism has added enormously to the constructive potentialities of modern states.
Second, it must be admitted that nationalism has often gone beserk in both domestic and foreign policies.
Third, one must recognize and accept the indisputable fact that nationalism, whatever its virtues and viciousness, is so deeply implanted in the minds of men that it is a major force to be reckoned with in all our hopes and blueprints for a more perfect world.
Finally, nationalism has heretofore performed vital functions, and it neither can nor should be obliterated until the functions are no longer needed, or until some better mechanism has been devised to carry out the functions that are still deemed essential.
(Palmer and Perkins, "International Relations", 1957, 2nd ed., pp. 803-804).

Here's Karl Popper in note 7 to Chapter 9 of Volume I of the Open Society, p. 288 of the Princeton UP, 1966 fifth revised ed.
The attempt to find some ‘natural’ boundaries for states, and accordingly, to look upon the state as a ‘natural’ unit, leads to the "principle of the national state" and to romantic fictions of nationalism, racialism and tribalism. But this principle is not ‘natural’, and the idea that there exist natural units like nations, or linguistic or racial groups, is entirely fictitious. Here, if anywhere, we should learn from history; for since the dawn of history, men have been continually mixed, unified, broken up, and mixed again; and this cannot be undone, even if it were desirable.

Goldstein and Pevehouse, "International Relations 2006-2007 edition" p. 32
Many people consider nationalism – devotion to the interests of one nation – to be the most important force in world politics in the past two centuries. A nation is a population that shares an identity, usually including a language and culture.

Who's man? Does she need group-stability? Or power-stability? Power of the gold-standard or of the dollar-standard? Power of America, Russia or China?

Those who continue to proclaim a renewed "gold-standard" thesis (POG between $2000 and $3000) continue worshipping their dollar-hero.

This hero is and remains for them untouchable.

Amercans, GATA and Sinclair consider the gold standard as a maximum for gold.

This site has however been set up to provide a "Forum" for the A/FOAakaTG Freegold-theses.

For the Americans, GATA and Sinclair, Freegold means the death of their beloved hero, the dollar-regime, previously known as the Bush regime.

COME ON, NANCY, show this great Nation what is happening in the gold market.

Tell them they have to SWITCH HEROES, from the greenback to the yellow.

Here's Karl Popper again, "The Open Society and its Enemies", Vol II (Routledge Classics, 2003) Chapter 12 "Hegel and the New Tribalism":

The conception of man as being not so much a rational as an heroic animal was not invented by the revolt against reason, but it is a typical tribalist ideal.
We have to distinguish between this ideal of the Heroic Man and a more reasonable respect for heroism.
Heroism is, and always will be, admirable,
but our admiration should depend, I think, very largely on our appreciation of the cause to which the hero has devoted himself.
Because there is also an heroic element in gangsterism.
The tribal ideal of the Heroic Man … is based upon different views.

p. 79-80
HEROISM is a direct ATTACK upon those things which make heroism admirable to most of us – such things as the furthering of CIVILISATION.
For, p.80,
this is denounced as shallow and materialistic,
because of the idea of security which it cherishes.
"LIVE DANGEROUSLY" is its imperative;
the cause for which you undertake to follow this imperative is of secondary importance


To repeat
HEROISM is a direct ATTACK upon the furthering of CIVILISATION.
For, .
this is denounced as shallow and materialistic,
because of the idea of security which it cherishes.
"LIVE DANGEROUSLY" is its imperative;
the cause for which you undertake to follow this imperative is of secondary importance
America must abandon
the tribal ideal of the heroic dollarman
switch heroes
from the dangerously living greenMAN
to the free-floating yellow freeTHING.

US PAPER dollar
which can break your Hand.

An important characteristic of science so conceived is HUMILITY, the awareness that truth is out there to be found.
It cannot be produced by human fiat. It belong to no man
The Renaissance was marked by a return to classical mysticism,
the idea that the world is not only intelligible,
but that its design can be known independently of experience,
‘by reason alone".
This means that wisdom resigns one to the passive role of a SPECTATOR (theoros) and a life devoted to theory
Frank van Dun, " The Science of Law and Legal Studies"

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.


Give me truth, or give me death!

Ten Bears@Thoreauly #: 149160 and 149157#14920311/9/06; 19:04:14

Thank you for the referenced links… good reads!
Paper AvalancheRE: Flatliner (11/9/06; 10:17:20MT - msg#: 149165)#14920411/9/06; 19:07:44

Excellent big picture synopsis.
MKInvisible Hand#14920511/9/06; 19:26:52

Your statement:

"This site has however been set up to provide a "Forum" for the A/FOAakaTG Freegold-theses."


This site was set up to give free voice to a multitude of ideas and systematic research including that of Another, FOA, Trail Guide, et al. But in no way was it ever meant to be anyone's personal blog including the aforementioned. The day it becomes ONLY THAT I will mercifully put it rest.

The Invisible HandNancy Freegold is very powerful, indeed …#14920611/9/06; 19:28:01

... even though Goldilox refuses to admit that he quoted Sinclair in
(11/9/06; 17:06:11MT - msg#: 149193)
as saying that after you have bought gold on weakness,
"Buy weakness and sell 1/3 on strength." was the Sinclair quote.

By Ambrose Evans-Pritchard;jsessionid=SGI5KY504ASLRQFIQMFSFF4AVCBQ0IV0?xml=/news/2006/11/08/uambrose108.xml
If the top echelons of the Bush administration have done anything wrong over the last six years in power, they can now expect to see every vile detail exposed in one of those menacing wood-pannelled chambers on the Hill.
For better or worse, the perfect storm is gathering with malevolent intensity right above the Oval Office.

By Ambrose Evans-Pritchard
Gold surged more than $19 an ounce to $635 in New York trading after China's central bank chief said the country was eyeing "lots of instruments" as alternatives to US dollar reserves. Governor Zhou Xiaochuan said the bank had a "clear" plan to lower the dollar share of its exchange reserves, now $1 trillion and rising fast.

TownCrierChina 'to boost gold for years to come#14920711/9/06; 20:05:47

10/NOV/2006 -- Gold surged more than $19 an ounce to $635 in New York trading after China's central bank chief said the country was eyeing "lots of instruments" as alternatives to US dollar reserves.

Anthony Fell, head of RBC Capital Markets, said gold's emerging role as a reserve currency would push the metal above its all-time high of $850 an ounce.

"The correction we saw earlier this year is over and gold has embarked on the second stage of its long-term secular rise," he said.

...Although global mine supply will rise over the next couple of years, it will fall sharply from 2010.

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

For various reasons, 2010 remains a significant landmark upon the financial landscape. Will the dollar even be able to hold its position 'til then?


GoldiloxRead a little closer, Sir TIH#14920811/9/06; 20:20:16


... even though Goldilox refuses to admit that he quoted Sinclair in
(11/9/06; 17:06:11MT - msg#: 149193)

I fully admitted the source in # 149194, as I hit the send button in the previous post too soon. Is there a bee in your bonnet today?

As to your added interpretation that the words "SHOULD, ON STRENGTH, SELL A THIRD OF THE GOLD YOU OWN" relate to physical in-hand, I don't believe Jim means that we should all run out to the dealer and trade coins back and forth against the dealer margin (no offense meant to MK and CPM staff).

Anyone who has followed Jim for a long time should understand he is talking about "paper gold", because in the same posts, he often states the importance of overnight electronic markets, not exactly the outlet for physical trading.

Real gold is for saving. Paper is for trading.

The Invisible HandFreegold transition process#14920911/9/06; 21:19:40


The midterm elections have left America's policy on Iraq in a state of confusion. The Defence Secretary, Donald Rumsfeld, has been sacked, and President Bush seems to have outsourced strategic thinking on the subject to James Baker's Iraq Survey Group, which is not expected to report until next year. The newly resurgent Democrats will have a profound influence on what happens now, too. They must decide whether to pursue a bipartisan approach to Iraq or increase the pressure on the Republican administration in preparation for the 2008 presidential elections. But if Washington's senators, congressmen and policymakers have any sense of responsibility they will divert their attention from matters of domestic advantage, and concentrate on the interests of the Iraqi people.
To grapple with this question it is necessary to recognise THE SCALE OF THE HORROR FACING IRAQ. The prospect of the break-up of the country into separate Shia, Sunni and Kurdish blocks looks increasingly unavoidable. The national government of Nouri al-Maliki is weak and lacks popular legitimacy. Ethnic cleansing on the ground is well advanced. American and British troops are doing nothing to prevent this. Nor is our military presence stopping the sectarian killing. As for the Iraqi national police force and army, they seem too feeble or compromised by the infiltration of sectarian militias to perform their security duties. The north of the country is relatively peaceful, but this is because the Kurds are well on their way to autonomy already.
Article Length: 481 words (approx.)

"I just heard that Bush has been beaten up by the Democrats," [Venezuela's Chávez] beams. "It's a reprisal vote against the war in Iraq, against the corruption.",,1944386,00.html

The Invisible Hand (11/9/06; 02:33:01MT - msg#: 149153)
Freegold transition process
French UN troops are 'seconds' away from firing at Israeli aircraft over Lebanon msg#: 149155)
"It is a miracle that nothing serious happened, because there could have been a response on the part of French troops "
Philippe Douste-Blazy
French foreign minister,

Shanghai Cooperation Organization (SCO) military officials met in Beijing to discuss how to step up defence cooperation among members and observers
(TIH: Iran is an observer)
of the SCO.

Read a little closer, Sir TIH

arbyhI'm sure the paper shreaders will be working overtime#14921011/9/06; 21:30:37

I'm sure the Republican paper shreaders will be working overtime and leaving the smallest trails they can... between now and when they leave in Jan.

I agree with your assessment of party politics. I propose a new political party....The Citizens Committee...Along the idea of "We the People" discussed this at length and this is what we think, support and oppose..... Strong usage of the Information Age communications technology.... More to follow on the ongoing development of a new independent party: The Citizens Committee.

CNN would be choice media and maybe Lou Dobbs would give a fair assessment of Citizens Committee positions. "Do the right thing".

I have some strong ideas on Border Security Management and Immigration, both legal and Illegal; Education; revitalising the efforts of the USA in domestic production; reworking, down sizing, and creating honesty and integrity in govt.

GoldiloxIraq Horror story#14921111/9/06; 22:03:57

@ TIH,

It's interesting that the popular movements in Iraq are probably accomplishing the partitioning the Brits should have implemented after WWI, the UN should have facilitated after WWII, and GHW should have done after the first Iraq invasion.

The Iraq on our map has always contained three tribal groups that basically want little to do with each other, but 70 years of Western policy has been to quietly favor the Sunnis, who, having little oil on their traditional lands, are the quickest to jump at Western command, in return for dominion over their Shiite and Kurdish neighbors and the black gold beneath their lands.

The goal in both Iran and Iraq was to establish Saudi-style "managed" regimes, first with the Shah, and then with Saddam, but nothing nearly as "manageable" has materialized in either locale, and rumor has it that the House of Saud may also be teetering. Dollar weakness does nothing for their longevity.

That must really scare the bejesus out of the Israelis. Memories of the pre-emptive Six Day War are dancing about in their Zionist dreams.

GoldiloxPPT#14921211/9/06; 22:17:19

So where were the PPT boyz during the dollar rout and PM blast-off?

I certainly saw no signs of "defending the currency" today.

Might they have figured out that the light at the end of the tunnel truly was an "oncoming train"?

Topaz(No Subject)#14921311/9/06; 23:06:25

Crunching the numbers, the $14.00 uptick was par for the course with Dow and Buck soft on an unch Bond.
Euro and ChF PoG managed to crawl back to their last week level ...and the excitement was enough to bring Belgian out of hybernation, so I s'pose it WAS a good day!

We heed some follow through ...softer Bond, softer DX etc. cos without it the PaperPoG will struggle ...imo.

KnallgoldHedging in China#14921411/9/06; 23:32:17

Of course it is spun negative,but at least the Goldderivativemining disease has not spread to China:

"Hedging activities are prohibited in China and any decline in the gold price could adversely affect earnings," said UBS (UBSN.VX: Quote, Profile, Research), one of its IPO sponsors, in a research report."

Golden LionheartHi-Jacking the Forum#14921511/9/06; 23:45:53

Thanks MK for your words about the original purpose of this Forum.

I sometimes feel that The Invisible Hand is trying to take over the Forum with his unacceptable use of CAPITAL LETTERS all the time. Using capitals is frowned upon as a form of shouting in most civilised company on the net.

Kindly give it a rest TIH. With respect.

The Invisible HandCapitalisation#14921611/10/06; 00:09:25

Golden Lionheart,
How can I make subtitles and stress some words except through capitalisation?

Golden LionheartCapital Letters - TIH#14921711/10/06; 01:36:16

Firstly I would like to say that I read and enjoy your posts.
Regarding the use of capitals I'll give you a "for instance". Your msgs # 149188, 149202 & 149156 just recently. Maybe this usage is acceptable in French?

GoldiloxEURO RESISTANCE#14921811/10/06; 02:37:39

Euro 1,29 seems to have presented some barrier in early London trading.
NedPlease confirm....#14921911/10/06; 03:44:52

From Laird (as mentioned by Goldilox):

"Iran and Iraq situations are both deteriorating, that is very Gold Bullish. Iran is right in the middle of the Prophet 2 war exercises in the Gulf, right in the teeth of an unprecedented gigantic US naval operation in the Gulf – very nervous situation. – Very Gold oil Bullish."

to the point...

"....right in the teeth of an unprecedented gigantic US naval operation in the Gulf ..."

I have read several articles throughout the internet on this supposed US military build-up in the Gulf. There are stories confirming and denying this development.

Does anyone have any comment on this? I would like to know how Laird comes up with "unprecedented gigantic US naval operation...."

Thanks in advance.

KnallgoldBad call by bankers#14922011/10/06; 06:28:00

Too bad if you have to rely on bankers to get the Gold out of the ground...
contrarianMilitary Buildup#14922111/10/06; 06:30:07

Ned--never ceases to amaze me how the mainstream media purposefully refuses to provide coverage over what is happening in the Persian Gulf. Your intelligence is revealed in your asking of the question.

Snippet below from an excellent Web site with a global perspective over what is really happening in the world today, which you won't get from the stupefied local paper or TV news.

"There is a massive concentration of US naval power in the Persian Gulf and the Arabian Sea. Two US naval strike groups are deployed: USS Enterprise, and USS Iwo Jima Expeditionary Strike Group. The naval strike groups have been assigned to fighting the "global war on terrorism.

Goldilox"Intelligence"#14922211/10/06; 07:46:21

@ contrarian,

While I read as well, I would not call them an "intelligence" site . . . more to the tune of political analysis. is a better example of an "intel" site.

Ten BearsPerpetual growth: The Debt Money system:#14922311/10/06; 08:13:27

Charley Reese comments on the results.
It's a mystery to me why so many people have difficulty grasping the concept that all natural resources are limited.
That was the attitude, understandably, 200 years ago — that there was so much land, so many forests and so many buffalo that people would never even put a dent in them. The attitude was, exhaust the soil and move on; cut the trees and move on; slaughter the game and move on. Well, oops, we've run out of places to move.

Many people, it seems, believe that if they can just make it to the cemetery in a comfortable style, it doesn't matter what happens to their posterity.

The college boys and old professors who work for the foundations funded by big corporations are always telling us there is plenty of space and plenty of resources.

The trend lines, however, point toward a dark future. If you're a teenager, you ought to think now about joining the preservation army and fighting for a decent life 40 years down the pike. Don't rely on the older generations. We're the ones who messed it up.
For Friday, November 10, 2006

Ned@ contrarian......c/c:all#14922411/10/06; 09:53:27

Thanks for the link....very interesting.

So are 3 "naval strike groups" (USS Enterprise, USS Iwo Jima & USS Boxer) "a massive concentration of US naval power in the Persian Gulf" as per Michel Chossudovsky and a "unprecedented gigantic US naval operation in the Gulf" as per Chris Laird ?

Again, TIA

White HillsMilitary Buildup#14922511/10/06; 10:30:42

Sir contrarian, The article you quote by Michel Chossudovsky as posted at www.globalresearch is right on and is one of the reasons that Chris Laird used to suggest a possibility of war with Iran. He also suggested that "A war pretext incident, similar to "the Gulf of Tonkin Incident", which triggered the Vietnam war, could be used by US forces, with a view to justifying retaliatory military action against Iran". I do not discount this possibility but also believe that it is just as easy to suggest that Iran would take the opportunity to provoke a clash that would help them make their case internationally that the USA is the aggressor in the Middle East. Why else would they take this opportunity to shoot off missiles into the Gulf? White Hills
arbyhDeployed Navy - setting up a 'We Dare You"#14922611/10/06; 10:32:06

Putting carrier groups in too close to the persian gulf invites trouble, instead of preventing it. It is a calculated dare, much like the "Tonkin Gulf" incident prior to Vietnam deployments.
Good excuse for unleashing an ass whipping...we get a small incident and must respond leading to full engagemnt of forces. It would not be in the plan that we get a major incident with major loss right at the start. We appear to be control freaks don't we.
Fearless leader blindly shapes the scenario and pulls the strings, but fails to observe true environment, and only looks ahead a few moves - planting the seeds of failure in the region. Realigious zealots all.

We should quietly pay for oil, plan and diversify energy neeeds, stay out of cluster f___ regions. Practice revitalising our own production to meet the needs of our own markets.

ReSeizing Internal Markets

I agree to an extent on the America not "owed a living" trend; however we can recover economically as a country of prosperity if we begin to refocus and shelter our own economy. Start producing for our own needs again. Re-tool and diversify some industry from swords to plowshares along lines of items normally imported. As a country we need to choose self sufficiency at a living wage for all. If that means we systematically reduce chosen particular imports by replacing them with internal production. Re-seize internal market economic advantage in targeted products and services by targeted protection internal markets from imports.

It is said that anything in excess is harmful. Well as a country and a people, "The American People" have lived in excess by overextending debt on both personal, national, and even country to country trade levels, while our purchasing behavior favors the imports due to low cost .
Foreign imports historically have ruined empires before. Empires have been crumbled and eroded away for no other reason then the "diffusion of technology" and lost economic advantage. Products once monopolized by the original empire's economic advantage were overtime learned and duplicated and then products were reintroduced back into the empires internal markets at reduced cost. The citizens purchased these items to their own economy's detriment.
History repeats itself… I will readily acknowledge that low cost, affordable, easy buy items have enhanced our lives tremendously, yet while sacrificing our own economy and jobs as domestic industries and market niches were replaced overtime.

I say we need to reapply ourselves as a people and a country by protecting niche industries and re-seize our economic advantage in targeted areas, even if trade restrictions were needed to protect some internal markets and domestic production. If our own internal markets in domestic production were once replaced, we re-seize them… over time we re-seize more and more of them, as needed to maintain a prosperous and self sufficient economy and nation.

My thoughts on re-seizing - a word I just invented?
John Arby Hort

seize (s z) KEY

seized , seiz•ing , seiz•es
1.To grasp suddenly and forcibly; take or grab: seize a sword.
a.To grasp with the mind; apprehend: seize an idea and develop it to the fullest extent.
b.To possess oneself of (something): seize an opportunity.
a.To have a sudden overwhelming effect on: a heinous crime that seized the minds and emotions of the populace.
b.To overwhelm physically: a person who was seized with a terminal disease.
4.To take into custody; capture.
5.To take quick and forcible possession of; confiscate: seize a cache of illegal drugs.
6.also seise (s z) KEY
a.To put (one) into possession of something.
b.To vest ownership of a feudal property in.

Flatliner"Lots of instruments"#14922711/10/06; 10:43:49

Yesterday in TownCrier's post 149207 and The Invisible Hand's preceding post, we got to see that "Gold surged more than $19 an ounce to $635 in New York trading after China's central bank chief said the country was eyeing "lots of instruments" as alternatives to US dollar reserves." (

I may be fishing with no bait, but to me "lots of instruments" means financial widgets - the type of financial widgets that are created out of thin air to absorb excess currency in circulation. Just like the Fed, the bank in China will do everything that it can to maintain control if it's currency monopoly. That is good for the government and (believe it or not, the) people. Just like everyone in Dollarland that complains about inflation, so too do the people in china - but everyone knows that a total failure of a key monetary system will set that country back at least a decade during the reconstruction. China will not stand for failure.

Immediate reactions in the market are emotional rather than fundamental. If you have been reading along with the postings in this forum over the last year, you will have seen a number of articles where China has been laying the infrastructure for its paper gold market. To me, they are laying the same groundwork that is well established in the west. This implies shorting. This implies that China has found a function for its surplus reserves. I would expect that China will use its trillion dollars worth of paper gold as gold in the gold paper market. If they want to actually grow their physical gold reserve, they will have to help prevent the rise of the physical price of gold.

Another worthless idea can be built around the trading of copper. We all know that China is consuming copper. We also know that it was not long ago that China got caught with its pants down in a short position dealing with this metal. One would be led to believe that the person that did this was a rogue trader. But, consider for a moment that you have a trillion dollars that you are forced to not chase physical goods with. But, you can chase financial widgets. Wouldn't it make sense to sell copper short and take delivery of the actual metal in the back ground? Anyone that has researched GATA's work knows that this is not a new idea. A few well spent dollars in the short market prevents the physical price spike that accompanies investment speculation. Paper liquidity dominates in our world today.

So, let's see… China wants to grow its gold reserve. To do this, it's going to sponsor gold exploration in its country and build infrastructure to support it. At the same time, it's going to liquidate the paper market and stir investment capital away from physical into this paper market. This way, the metal that comes out of the ground will just cover exploration expenses and not be held for speculation purposes. Over time, just like in Russia, the gold reserves will grow.

This reeks of manipulation, but it's all quite legal.

Is the situation hopeless? No. Those that invest through the paper markets will feel cheated, but those that invest by acquiring the actual physical assets will feel that they've picked up a bargain. Ultimately the real cost of physical gold is the current price + the losses taken in the paper market. After that, the MTM price of gold will be found to be somewhere between speculation demand and central bank + individual physical liquidity.

But all this could be wrong and - look – no capital letters when it seems obvious to buy physical gold.

GoldiloxFace-off#14922811/10/06; 10:48:16

@ WH,

It's akind of "face-off", like you see on WWF before the real "match". Who will blink first, or will they slowly back down and reassess the situation?

Iran would NOT be a pretty place to play Lebanon and level the place because a couple of reconnaissance personal were captured at the border.

That kind of over-reaction on a larger scale could be globally devastating.

geUS Navy#14922911/10/06; 10:50:02

The Navy deployment is reported at the attached Navy link.

All signs point to a change in US strategy towards Iran: Think of a re-make of Iran-Iraq war with two fronts: Iran vs. Kurd & Iran vs. Sunni Iraq.

USAGOLD / Centennial Precious Metals, Inc.This 650-coin allotment is well over 90 percent SOLD OUT. . . call today to stake your claim!#14923011/10/06; 10:58:12

November Buyers' Group
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at BULLION Pricing!

Call and Save
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GoldiloxGold Declines on Skepticism China to Buy Metal for Reserves#14923111/10/06; 11:00:24


v. 10 (Bloomberg) -- Gold in New York fell from a two-month high on skepticism China will buy the precious metal to diversify its foreign-currency reserves.

China, which has about 1 percent of its reserves in gold, said the country will maintain a policy of reducing holdings of U.S. assets. Gold, sold in dollars, generally moves in the opposite direction of the dollar.

"People are skeptical,'' said Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois. ``China is not going to buy precious metals for their reserves.''

Gold futures for December delivery dropped $2.10, or 0.3 percent, to $634.70 an ounce at 9 a.m. on the Comex division of the New York Mercantile Exchange. Prices jumped 3 percent yesterday to the highest since Sept. 6.

The metal was poised for the fifth straight weekly gain. It has climbed 0.9 percent this week.


No, they won't. Yes. they will!
The financial media is clueless, as preferred by the real executors.

TopazBond Gold.#14923211/10/06; 11:29:00

Big Bad Bond rode back into Dodge today sending them all scurrying for cover, Bases, Nobles, Stocks...the works! ...yup, those Bloomburg junkies got the heads-up early ...sheesh!
Of more interest to us Gold types is the weighty call options on the Dec contract at strikes above $650, which should buoy the price somewhat for another week or so. Theres a truckload of 'em and come December, I hope they ALL end up as Metal....Yum!

FlatlinerSafekeeping of the bullion#14923311/10/06; 12:00:51

Now let's look at India. With all the hype about gold investing, India has graciously created another financial widget for the world to use. This one hides until the promise of a trust. In this case, we have a trust that serves to create shares against metal but the trust doesn't hold the gold it's deferred that right to a number of key worldly banks. I have to wonder if any of these banks get audited on a regular basis? I also wonder if the banks can legally hold a futures contract on the ledgers in place of physical gold. It seems that central banks have done this for years.

The article follows:

The Securities and Exchange Board of India (Sebi) has amended its Custodian of Securities Act to enable the custodians of the proposed Gold Exchange Traded Funds (GETFs) to outsource the safekeeping of bullion to outside agencies. The amendment in the Act would pave the way for the launch of GETFs in the country.

Allowing the custodians to outsource the safe custody of gold in GETFs, Sebi, however, said the custodians would remain responsible to its client (mutual funds) for safekeeping of the gold kept with other person, including any associated risks.

Further, Sebi added, "All books, documents and other records relating to the gold so kept with the other person shall be maintained in the premises of the custodian or if they are not so maintained, they shall be made available therein, if so required by the board."

The stock market regulator also said the custodian of securities would "continue to fulfil all duties to the clients relating to the gold so kept with the other person, except for its physical safekeeping.

Reacting to the amendment, Chairman of Association of Mutual Funds in India (Amfi) said most banks, which would enter the custodial business in GETFs, preferred to safe-keep the bullion with an outside agency. "The amendment in the Custodian of Securities Act will now allow mutual funds to launch GETFs," he said.

Fund houses, including Benchmark, UTI AMC and DSP-Merrill Lynch Fund Managers, have announced the launch of GETFs in India.

Rajan Mehta, managing director, Benchmark Asset Management Company, said, "The Sebi has fulfilled our demand and now we expect it to clear our application to launch gold ETF. Once it happens, we are ready to launch the fund."

Only those banks which hold the RBI licence to trade in gold are likely to get the Sebi nod for custodial service in GETFs

Industry officials said banks such as ICICI Bank, Bank of Nova Scotia, State Bank of India, HDFC Bank and a few others are likely to enter the business of custodial services in gold.

They are, most likely to rope in an outside agency for the safekeeping of the gold, they said.

Globally, there are reputed players which undertake the business of safekeeping of the bullion for banks.

mikalGold seen through the looking glass clearly#14923411/10/06; 12:24:33

US gold falls from new high, pullback seen healthy
NEW YORK, Nov 10 (Reuters) -Snippits: "Gold futures fell on profit taking early Friday after reaching a new two-month high, but fund buying and speculation that China could buy gold for its foreign currency reserves remained supportive factors, traders said.
Dealers said the pullback was healthy, given that gold has rallied more than 10 percent in little more than two weeks.
"Although it's a bullish market, with bullish sentiment, it just needed a little bit of a pullback here," said a bullion dealer. "The market is seeing a lot of profit taking and producer selling. Also, copper is getting completely spanked here and that has helped drag the market down.""
Mikal- Gold is a bull market for many reasons.
Short, intermediate and long-term POG has a rainbow of causes. Some of these are exclusively
mainstream and possess unseen substance. Is it like the vapory denizens of "Deep Storage Gold"? Or does the government have in-the-ground gold earmarked for
that purpose?
Hard to say but many obscure, opaque, over-the-counter derivatives give government and it's traders the obfuscatory, off-the-books advantages of unstandardized, pro-forma and irregular accounting so pervasive today.

"Some analysts and traders predict that the precious metal will revisit 26-year highs above $750, which were set in May.
The morning pullback came despite a sharp fall in the dollar, which dealers said should continue to benefit gold in the long term, by making bullion cheaper for foreign investors.
The dollar hit new 2-1/2-month lows against the euro and an 18-month low versus sterling on Friday, after the head of the Peoples Bank of China, Zhou Xiaochuan, said China planned to diversify its assets across different currencies and investment instruments.
That heightened speculation that more gold could be included in the country's $1 trillion reserves. The market has long thought that China wants to hold more gold.
Asked by reporters on Friday if China would sell gold, Zhou said, "No, why would we sell gold?"
"The China story certainly is something in the background. It's something that's been a long time coming to the foreground," said Gregory Weldon, analyst and publisher of The Metals Monitor.
Spot gold bullion was quoted at $627.10/8.10, down from New York's close at $633.60/4.60. Bullion dealers fixed London's afternoon spot reference price at $629.30."
Mikal- This sampling of market opinions comes up short on substance, long on spin, but it's head and shoulders taller than what was seen a year ago IMO.

GoldiloxConfirmation from Paraguay#14923511/10/06; 13:29:55


After an article appeared in Havana's publication "Juventud Rebelde," saying that former President Bush Sr. purchased a major 175,000 acre estate in Paraguay, a confirmation of the report came to me from a Paraguan CIGA. The estate sits on one of the largest aquifers in the world, providing potable fresh water. Paraguay has granted American soldiers immunity from the jurisdiction of the international criminal court. This treaty is waffling so we will see if it is again put on firm ground.

The difference between who is a war criminal and who is a war hero is historically defined by who wins and who loses. The question is will this apply to political control as well?


I heard about this a few week ago, but was awaiting confirmation. First thoughts were that Paraguay's paramilitary government still eshews extradition, but control of the aquafer makes better sense. Puplava has been talking about "fresh water control" for at least a year.

TownCrierCONGRATS to all who acted quickly... Uruguays are SOLD OUT.#14923611/10/06; 15:53:35

Jonathan tells me that the November Buyers' Group offering of 650 Uruguayan 5peso coins has now been completely sold through... in under three days. And says, 'Thanks for your participation!'

Apparently quite a lot of the Latin American coinage has been moving like gangbusters lately. Be sure to check out that southerly wing of the online coin shop for a few special gift ideas or simply to add some spice to your current portfolio!


USAGOLD Daily Market ReportPage Update!#14923711/10/06; 16:31:21">
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FRIDAY Market Excerpts

Gold rests after 10 percent rally

November 10 (from Reuters) -- Gold futures retreated from a new two-month high to end down 1 percent on Friday, pausing from a breakneck rally lubricated in recent days by a tumbling dollar and speculation that China could buy gold. Investor enthusiasm for precious metals was undiminished. Silver and platinum ended higher and dealers said gold's pullback was healthy, given that it has rallied more than 10 percent in little more than two weeks.

"That's nothing but volatility and preweekend profit taking," said Ian MacDonald, managing director of of precious metals at Strata Partners.

The COMEX December gold contract settled $6.70 lower at $630.10, partially retracing Thursday's $18.50 rally.

"Although it's a bullish market with bullish sentiment, it just needed a little bit of a pullback here," said a bullion dealer.

Worries about the election, economic growth, Iraq and nuclear saber-rattling by Iran and North Korea also made gold attractive as a safe haven and portfolio diversifier. "You can't point to one single item any longer," MacDonald said.

"China told everybody they are going to be diversifying their reserves and gold would be an obvious candidate. Physical buying worldwide remains at record levels."

The dollar hit new 2-1/2-month lows against the euro and an 18-month low versus sterling, after the head of the Peoples Bank of China, Zhou Xiaochuan, said China planned to diversify its $1 trillion foreign currency reserves across different currencies and investment instruments. Dealers have long believed China wants to hold more gold.

Asked by reporters on Friday if China would sell gold, Zhou said, "No, why would we sell gold?"

Gregory Weldon, analyst and publisher of The Metals Monitor said, "The China story certainly is something in the background. It's something that's been a long time coming to the foreground."

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

CometoseCOT#14923811/10/06; 16:40:02

Silver commercials net short for the week

Copper commercials net long for the week 1000 contracts

Gold commercials net short another 7500 contracts

these numbers are not reflective of what's happening

You don't think that the banks would try to steer the metals markets by showing their power at the COT do you?

I just wonder if China needs any oil for their strategic reserves


Maybe the people that dumped dollars today are the same people who tried to suppress the price of gold while the dollar was getting a drubbing ...

Maybe those COT numbers are reflective of an attempt to keep gold suppressed to the election ....It worked for about a day. Then did it come out of the water like a full TILT SUBMARINE YESTERDAY....

I guess we are just going to have to wait around and see

If the Chinese need anymore oil and if
THE DOLLAR is going to go south some more.

Massage the numbers all you like and everywhere you want to ................

YOU CAN'T make any more GOLD or SILVER.........

I would hate to be without these two commodities......
IF A SQUEEZE WERE TO OCCUR......or the dollar to get caught in WHIRLING Hurricane.....( imagine a toilet flushing)

Flatliner"YOU CAN'T make any more GOLD or SILVER"#14923911/10/06; 16:56:44

But they are making fools gold and silver!
Chris PowellChina's central bank chief says gold is 'separate' from FX diversification#14924011/10/06; 19:50:22

Latest GATA dispatch.
arbyhFlatliner--But they are making fools gold and silver.#14924111/10/06; 20:01:09

Flatliner--But they are making fools gold and silver.

They now make close to perfect man made diamonds. Diamonds were thought a good investment. Are they still?...I don'r think so. The point is who can say for sure what the future will bring. Don't put all your investment in trolly cars.

Maybe, just maybe the future will be digitised transactions PERIOD! = Direct deposit, a scanner, and a card. So then what happens to gold? Is it still a monentary medal, or just nice for trinkets and artifacts? Remember when gold was conversations? The conversations that Americans must have had from 1933 until the late 70s wasn't it? When we could buy gold once again.

Does China have any historical "gold fever"? They did historically develop apart from the western world, and our addictions - gold fever Babe!!!

arbyhamend#14924211/10/06; 20:08:34

Amend prior to read: monentary metal conversations....

Sorry... Knights of Gold.....All and all coherence not bad for a party night.

How about those "Cut the BullShit" Democrats.
Basically all the American people want is that our elected officials act honestly, preserve the constitution, and care enough to know the difference - any real inspiration towards the greater good is a plus too.

The Invisible HandThey don't get it#14924311/11/06; 01:18:05

While Iran is talking about closing the Strait of Hormuz in the Persian Gulf

Although actions like establishment of an oil boursethat uses Euro instead of dollar for its transactions, has been considered as part of the possible ways of using oil as a weapons, it seems that the "oil weapon" is anything that could be used to stop or hinder the actual flow of the much-needed oil to the international markets. This could include a wide range of actions that intentionally stop or seriously reduce the flow of oil from the oil exporting countries to the main consumption centers.,

Gata blindly quotes a Chinese central banker saying that gold is 'separate' from FX diversification

Gata dares of course not guessing what this could mean.
Gata and its subscribers blindly worship the dollar,
i.e., the dollar gold standard instead of Freegold.

melda laureI can see clearly from here: the road only gets wurser#14924411/11/06; 02:28:14

"the meek will inherit nothing"- FZ

@ WH, 'Lox, Mikal

the wars once planned so long ago
are fully ripe, let's start the show.
Its much to late, the crowd is bored
the Barrells stufft, the charges stored
We told them it's a party dance
now instead they'll wet their pants.
They're broke, they wont be buying drinks
(and anyhow this venue stinks)
so if we cannot make them dance
We'll mesmerize them in a trance
With Shock and Awe, we'll take their rights
and Hire them out to fight our fights.
And once the cups and plates are shatterd
(and infrastructure ripped and tattered)
to profitably BUILD AGAIN.

Of course these rubes will have to pay
They Voted GREEN$ ju$t ye$terday.
Red Plus Blue makes PURPLE, eh?
they had no savings anyway.
Sorry son, you wretched fellow
Y'all shoulda voted for the yellow.
"Datz quite some 'spensive edjucatshum man"
But now ya know dey gangsters plan."
Yall will say that "dis poem sucks"
Das whut you gitz fo' 60 bucks.
Ya coulda bought a gold sovereign
But dis aint Hollywuud, dey aint no happee ending. Is suppos' to end badly as it getz wurserer and wurserer, and she right on schedule. Good luck Ms Pelosi, it's your tarbaby now and the babysitters are booked until 2008.

The Invisible HandChina, Blair, Gaza and Gridlock#14924511/11/06; 03:13:26

Gold's share of China's total reserves is relatively low at around one percent, so it would need to buy a large amount of bullion to bring it up to, say, five or 10 percent, dealers said.
Some European central banks hold up to 50 percent of their reserves in gold and in the United States, the world's largest holder of gold, reserves account for 64 percent

Blair will urge US to talk to Syria and Iran,,1945398,00.html
Tony Blair is to urge the US administration next week to open talks with its great adversaries Syria and Iran, as a way to break the impasse in Iraq and the wider middle east.
He is due to give video link-up evidence to the independent bipartisan panel in Washington headed by James Baker, seen as the vehicle whereby George Bush can change course on Iraq. The evidence, on Tuesday, is regarded as a vital opportunity for the prime minister to influence thinking in Washington at a rare time of flux.

Gaza: While the world looked elsewhere, another week of death
The Western world has no doubt already moved on from the catastrophe in Beit Hanoun. For the Athamneh family, now in their second day of mourning after the funerals, it is impossible to do so.

The urge to save humanity is almost always only a false-face for the urge to rule it. – H. L. Mencken

They still don't mention the four letter word
Dollar downdraft to resume – the case for currency diversification

How can the wealth value of gold be expressed in the paper value of the dollar?
Why should the link between wealth and paper be kept?

No, there is nothing very positive about gridlock except for the chance that it will slow down a bit the runaway train of government intrusion in people's lives. Perhaps that will provide a little chance for people to learn better and better what the American Founders tried to teach them
about the proper scope of governmental power. This is that such power is only justified when used defensively, to ward off violations of our basic and derivative rights. The rest is tantamount to nothing less than political malpractice.- Tibor R.Machan

The Invisible Handthe four letter word#14924611/11/06; 03:34:57

The reason why the Pimco article
does not mention the four letter world is that the sheeple are in complete denial.

How will the sheeple interpret this?

Trichet and Bernanke differ on strategy

differences over monetary strategy erupted into the open on Friday as the European Central Bank sought to modernise its policy of relying on money supply measures as an inflation early-warning system.

Chinese billionaire takes stake in Anglo

The third richest man in China has bought an $800m stake in resources group Anglo American held by the Oppenheimer dynasty, a landmark deal in China's aggressive acquisition of African resources
The surprise sale highlighted China's appetite for resources in Africa. It followed Beijing's hosting of a summit for 48 African countries last week.
"This is further evidence of China's aggressive acquisition of commodity assets in Africa," said John Coulter, former head of JPMorgan in South Africa. "China is committing huge capital to the commodities sector."

The Invisible HandHandelsblatt ignores Bernanke#14924711/11/06; 04:27:23

URL is for FT-article in my previous post whose URL was attached to the first word of the snip

Bernanke spoke at 1:45 pm GMT, that's 2:45 pm Frankfurt time.
Trichet at 4:30 pm, timezone not indicated

PARIS, 10 novembre (Reuters)Les investisseurs attendent avec impatience deux interventions à Francfort dans l'après-midi: celle de Ben Bernanke, président de la Fed, Ben Bernanke, à 13h45 GMT, et celle de son homologue de la BCE, Jean-Claude Trichet, à 16h30.

Anyway, Bernanke spoke before Trichet.

And at 4:02 pm (GMT+1), that's before Trichet spoke, the Handelsblatt, the German financial daily, did NOT report on Bernanke's speech but did report on Trichet's. Has Bernanke become irrelevant?

HANDELSBLATT, Freitag, 10. November 2006, 16:02 Uhr
Geldmengenwachstum (Growth of the quantity of money)
EZB räumt Strategieproblem ein (ECB discloses strategy-problem)

The Invisible HandAnd now 250 central banks are conferencing #14924811/11/06; 04:54:05

about M3 and the ECB credit strategy

ECB strategy about which Jean-Claude and Ben quarreled yesterday

This post will argue that our ECB masters are now agreeing with A/FOAakaTG that one should no longer save in so-called money, but in Freegold.

Gipfel der Notenbankchefs
Prominenter Rat für die Europäische Zentralbank
Fed-Chef Ben Bernanke und seine Kollegen aus China und Japan sind zu Gast in Frankfurt. Und das nicht allein. Rund 250 Notenbanker und Wissenschaftler diskutieren die Strategie der EZB.
Während die EZB nach wie vor auf ihr komplexes Zwei-Säulen-Modell setzt, in dem Informationen über das Wachstum von Geldmenge und Kredite als sogenannte monetäre Säule eine zentrale Rolle spielen, folgt die Fed bisher keinem offiziellen Regelwerk. Das soll sich nach dem Willen Bernankes ändern: Der Federal-Reserve-Chef gilt als Verfechter des sogenannten Inflationsziels, bei dem sich die Notenbanken dazu verpflichten, bestimmte Teuerungsraten zu erreichen.


Perhaps it was because the Handelsblatt knew that Trichet's position would be discussed this week-end, that it just chose to ignore Bernanke.

Anyway, now it is clear that the quantity of money should be used as an activator of the economy.

Central bankers should stop worrying about the purchasing power value of the bookkeeping unit (currency).

This means that one should no longer save in so-called money, but in Freegold.

The Invisible HandNew Bretton Woods this week-end in Frankfurt?#14924911/11/06; 05:13:31{23556CD8-DCCA-4870-BBF9-B36E41451F24}&siteId=mktw

It's also in Frankfurt that China made its comments. And look at the text after my "+".

Dollar, gold move on China's diversification talk
By Wanfeng Zhou, MarketWatch
Last Update: 3:46 PM ET Nov 9, 2006
NEW YORK (MarketWatch) - The U.S. dollar tumbled and gold rallied Thursday on heightened expectations that China will diversify its rapidly-growing foreign-exchange reserves.
Zhou Xiaochuan, governor of the People's Bank of China, said at a conference in Frankfurt that China has very clear plans to diversify its reserves, which now stand at more than $1 trillion. A wide range of instruments are under consideration, Zhou added.
Leading government think tanks in Beijing have recently recommended using some of their reserves to buy other assets such as gold and oil, which bodes well for gold.

The Invisible HandOpaque institutions are in Frankfurt#14925011/11/06; 05:38:40

Opaque but capable of springing surprises ...
this week-end.

TownCrier's 2010 date is being mentioned

None of this rules out change. GCC (Gulf Cooperation Council) central banks like others across the world are opaque institutions more than capable of springing surprises. But change pre-2010 looks highly unlikely.
The only thing that would lead us to change our view would be a catastrophic year for the dollar. We are already bearish on the US economy, but a hard landing could see the dollar fall by significantly more.

Ned@ arbyh,contrarian,ge,Goldilox, White Hills......... c/c: all#14925111/11/06; 05:44:43

The beginnings of a discussion materialized yesterday. Thanks for the navy link, ge. I believe this was also presented in the 'global research' article.

"Deployable Battle Force Ships..278; I think I counted 7 or 8 ships in the Boxer "expeditionary group". Let's say perhaps 24 ships in the 3 groups either in or soon to be in the Persian Gulf. This is less than 10% of US naval power. Did I not read an article recently that USS Eisenhower was leaving port soon to relieve USS Enterprise?

Again.......are 3 "naval strike groups" (USS Enterprise, USS Iwo Jima & USS Boxer) "a massive concentration of US naval power in the Persian Gulf" as per Michel Chossudovsky and a "unprecedented gigantic US naval operation in the Gulf" as per Chris Laird ?

Interesting that a Canadian frigate, HMCS Ottawa is joined up with the Boxer 'group'. When did Canada join the "war on terror"?

Again, TIA.

NedEisenhower article...#14925211/11/06; 05:55:59

The Invisible HandThat's NOT a seminar#14925311/11/06; 06:10:01

Anybody has dictionary?

Saturday 11th November 2006
"(Diversification) includes currencies, investment instruments, including emerging markets," Zhou said yesterday on the sidelines of a MONETARY CONFERENCE here.

Gipfel der Notenbankchefs (SUMMIT of CB chiefs)

Monetary conference and summit,
that's NOT a seminar.

That's an "event" where they are discussing where they are going.

I didn't translate this
Gipfel der Notenbankchefs
Prominenter Rat für die Europäische Zentralbank
Fed-Chef Ben Bernanke und seine Kollegen aus China und Japan sind zu Gast in Frankfurt. Und das nicht allein. Rund 250 Notenbanker und Wissenschaftler diskutieren die Strategie der EZB.
Während die EZB nach wie vor auf ihr komplexes Zwei-Säulen-Modell setzt, in dem Informationen über das Wachstum von Geldmenge und Kredite als sogenannte monetäre Säule eine zentrale Rolle spielen, folgt die Fed bisher keinem offiziellen Regelwerk. Das soll sich nach dem Willen Bernankes ändern: Der Federal-Reserve-Chef gilt als Verfechter des sogenannten Inflationsziels, bei dem sich die Notenbanken dazu verpflichten, bestimmte Teuerungsraten zu erreichen

Summit of CB chiefs
Prominent Council for the ECB
Fed-Chief Ben Bernanke and his colleagues from China and Japan are guests in Frankfurt. And that's not the only thing. Around 250 central bankers AND SCIENTISTS discuss the STRATEGY OF THE ECB
Whereas for the ECB the information about growth of the quantity of money and credit plays a central role as so-called monetary pillars, the Fed is up to now not following any rules. The Fed chief is however an advocate of the inflation target, which compels central banks to keep inflation below a certain target.

(I must confess that I'm not sure about my translation after the "+")

contrarianLargest Ever Massing of Military Force in the Region#14925411/11/06; 06:25:01

Are they there to twiddle their thumbs? Afganistan, Iraq, Lebanon, Iran, Syria....Also check out the following:

"The US and NATO countries had amassed the largest military armada in the Middle East. The US armada consists of Carrier Strike Group 12 led by nuclear powered aircraft carrier USS Enterprise, Eisenhower Strike Group – another nuclear powered aircraft carrier with accompanied military vessels and submarines, Expeditionary Strike Group 5 with multiple attack vessels led by aircraft carrier USS Boxer, the Iowa Jima Expeditionary Strike Group, and the US Coast Guard. Canada has sent its anti-submarine HMCS Ottawa frigate to join the American Armada in the Persian Gulf. On October 1st the USS Enterprise Striking Group had crossed the Suez Canal to Join NATO armada at the eastern shores of the Mediterranean Sea.

The NATO force is composed of troops and naval vessels from several countries and is lead by Germany. It includes Garman command naval forces, Italian navy, 2 Spanish warships, 3 Danish warships, 10 Greek Warships, 2 Netherlands warships, and French, Belgium, Turkish and Bulgarian troops in South Lebanon.

This is the largest amass ever of military power in the region, and it is gathering for a reason.

The US had started its military provocation on October 30th with its "Leading Edge" war game across the Iranian shores. Iran responded with a 10 days military maneuvers "Great Prophet" taking place in Gulf, Sea of Oman, and several provinces of the country test-firing dozens of its long-range missiles capable of reaching Israel and American military bases in Gulf States.
The powder keg is ready and all it needs is a match to ignite it. This could come in the form of an "arranged" terrorist act in Lebanon – e.g. another political assassination or toppling of government- to be blamed against Syria and Iran. American warnings of such an act are already in the media."

The Invisible HandConference programme#14925511/11/06; 06:58:34

The role of money: money and monetary policy in the twenty-first century
4th ECB Central Banking Conference
Frankfurt am Main, 9 - 10 November 2006

mikal@melda laure#14925611/11/06; 08:27:02

Great poem that, in no time flat!
Outclasses mine, a little rhyme:
"He says they didn't vote for the yellow,
But made their choices blue, red and green,
A voice, a bellow for the little fellow.
There's little time in between
What's past and where we're going.
The way the branches lean
Calling all the knowing.

GoldiloxChina's reserves#14925711/11/06; 08:32:09

@ TIH,

"Gold's share of China's total reserves is relatively low at around one percent, so it would need to buy a large amount of bullion to bring it up to, say, five or 10 percent, dealers said."

I think this assumes an equilibrium in the currency markets, which the CBs may be "Hell-bent" to maintain, or not . . .

If some contrived "freegold" equation (what an oxymoron) were agreed upon, the "currency value" of China's gold might rise exponentially overnight, using the same theory that estimates the figure of 5-10% as a "recommended" PM insurance percentage for private investors.

Since China, as all CB states do, has the power of the monetary press, does it really need to carry the same "percentage" as a private investor? Probably not.

I suspect China plans on some pretty big "paper losses" once the Dollar regime is transitioned, but since they hold astronomically huge amounts, they have bought a lot of control over said transition if it is engineered without complete collapse. It also means much of its behind the scenes acquisitions before any transition "event" stay below the RADAR monitoring its more massive holdings.

Actually that's not unlike the fate of some of the founders, who watched their "paper worth" fluctuate from millions to billions and back again. Many managed to retain control of some viable companies in the process, even though a lot of their "inflated" startups were later absorbed at much lower equity values.

The "game" is not how much one retains in "dollar value", but what control of real assets is maintained in both the peaks and valleys. This is why Black Blade's adminition for the private individual translates to low or no debt, ownership of dwelling, food, and water sources, if possible, and "real" assets to back it up.

Just some thoughts on the bigger picture . . .


Ned@ contrarian#14925811/11/06; 09:34:26

Thanks for the article but......I think its a 'red herring'. I will have to read it again later in the day.

What does a herd of ships amassing in the Mediterrean Sea have to do with the build-up for the "War in Iran"?

Is it not the mandate of the recent UN resolution that a buffer zone be filled with neutral parties south of Lebanon, north of Israel?

This build-up in the Mediterrean Sea is 2000km from central Iran, what's going to happen there?

A snip:

"The NATO force is composed of troops and naval vessels from several countries and is lead by Germany. It includes Garman command naval forces, Italian navy, 2 Spanish warships, 3 Danish warships, 10 Greek Warships, 2 Netherlands warships, and French, Belgium, Turkish and Bulgarian troops in South Lebanon.

This is the largest amass ever of military power in the region, and it is gathering for a reason."

You are right, they are not there to "twiddle their thumbs", and "it is gathering for a reason", they are there as a result of the agreed (UN) aftermath of this Israel/Hezbollah business.

What's the connection of "10 Greek Warships" to Iran 2000km away?

Who is this "Dr. Elias Akleh"? Seems to be a little paranoid, yes?

He mentions "French, Belgium, Turkish and Bulgarian troops in South Lebanon", are they all going to walk across Jordan and Iraq to get to Iran?


I'm going to research this further but I think Laird and Chossudovsky are overstating this "unprecedented, massive, gigantic" naval business.

To be certain, things are not rosy, a powder-keg it is. And it probably will get uglier over time but the situation I do not believe is as presented at the moment.


The article is indeed strange. The author portrays Iranian President Mahmoud Ahmadinejad as damn near a nice guy.

Is this true:

"Ahmadinejad is not the Jew-hater, Holocaust denier, intent on wiping Israel off the map as Bush keeps describing him. Ahmadinejad pointed to the Iranian Jewish community, who are living peacefully within Iran as any other Iranian citizens. Iran is the home for the largest Jewish community (25 thousands) in the Middle East outside Israel, who lived there for the last 3 thousand years since the rule of Cyrus the Great. Iranian government recognizes the Jews as a religious minority to be protected and represented by a PM, Maurice Mohtamed, in Iranian parliament. Iranians make a distinction between Jews and Zionists. "

- what about this-

"When Newsweek's Lally Weymouth (October 2nd 2006) asked Ahmadinejad about the Holocaust he acknowledged it as a historical event by stating "We know this was a historical event that happened. But why is it that people who question it are persecuted and attacked?" He also questions the reasons why the Palestinians have to pay their country and their lives for what the Europeans had done. He questions the exploitation of the Holocaust to justify the usurpation of Palestinian land, their evacuation from their homeland and the destruction of their civilian homes, the targeted assassination of their freedom fighters, and the abduction and jailing of their democratically elected officials. "The Palestinian people, their lives are being destroyed today under the pretext of the Holocaust. Their lands have been occupied, usurped. What is their fault? What are they to be blamed for? Are they not human beings? Do they have no rights? What role did they play in the Holocaust?" Ahmadinejad answered NBC's Brian Williams, who asked him about the Holocaust during an interview in September 20th, 2006. His acceptance of the Holocaust as a reality could not be any clearer than in his statement reported by the Washington Post December 9th 2005 "Is the killing of innocent Jewish people by Hitler, the reason for their (the Europeans’) support to the occupiers of Jerusalem?" "

- and what about this? What did he really say?

"Ahmadinejad's plans to build a nuclear bomb and use it to incinerate and "to wipe Israel off the map" as Tzipi Linvi – the Israeli Foreign Affairs Minister and Vice Prime Minister- likes to keep reminding the world of, is totally baseless. It is an intentional misinterpretation and distortion of Ahmadinejad's speech. In the New York Times of June 11th, 2006 Juan Cole, a Middle East specialist at the University of Michigan, stated that "Ahmadinejad did not say he was going to wipe Israel off the map, because no such idiom exists in Persian. He did say he hoped its regime i.e. a Jewish-Zionist state occupying Jerusalem, would collapse." Ahmadinejad was not threatening Israel; rather he was calling for the end of Zionist occupation of the city of Jerusalem. He – and the Iranian government- are intelligent politicians, who understand that striking Israel with one atomic bomb would lead Israel to shower Iran with its 200, or more, nuclear bombs, some of which are ready to be launched from submarines."


So what's a person supposed to believe? Why is there no definitive answer? Are there really 25,000 Jews in Iran with a representative in Iranian parliament?

Is the Iranian President question as quoted by a US paper valid, ""Is the killing of innocent Jewish people by Hitler, the reason for their (the Europeans’) support to the occupiers of Jerusalem?""

And what if Iran gets a nuclear weapon. Who is going to drop a nuclear bomb in this day and age? Iran drops one and the entire country will be evaporated by several others. Same for North Korean. What if Israel drops one on Iran? Is China,India, Russia and NK going to stand idly by?

What if US drops one on Iran?

And what if US/UK/Israel decide to set Iran back 10-50 years. China, India, Pakistan, Russia and many, many others to not react?


Back to research ....way too much going on !!

Need answers !

USAGOLD / Centennial Precious Metals, Inc.Step inside and explore...#14925911/11/06; 11:08:20

shop for gold coins
mikalTo flee or not flee...#14926011/11/06; 11:19:02

China's reserve plans keep forex market on edge
Fri Nov 10, 2006 1:54pm ET By Steven C. Johnson
NEW YORK (Reuters) - Excerpt: "China may or may not be speeding up plans to shift its $1 trillion in foreign exchange reserves away from dollars, but investors aren't taking any chances.
Traders unloaded the greenback as soon as People's Bank of China Governor Zhou Xiaochuan said Thursday the bank will keep diversifying its dollar-heavy portfolio, a catalyst that may spark a sustained dollar decline.
Though Zhou said this was consistent with long-standing Chinese policy, his comments came shortly after central banks in Russia and Switzerland announced similar reserve shifts, bringing diversification away from dollars into sharper focus."
Mikal- "China may or may not be speeding up plans to shift it's $1 trillion..." is like a broken record. But it's being played more and more. And played for all it's worth...

mikalMarket whispers#14926111/11/06; 12:49:28

More Gains Ahead for Gold By Michael Brush Contributor 11/10/2006 4:00 PM EST Excerpt:

"This column was originally published on RealMoney on Nov. 10 at 7:54 a.m. EST. It's being republished as a bonus for readers.

Gold and silver showed some strength Thursday after a breather following a rebound off early October lows. Is this just a head fake or the real deal?
Several factors point to further gains ahead, according to gold sector analysts. Here are the highlights."
Mikal --> Some quite interesting though low key points on pages 1 and 2. Page 3 and 4's focus is stock recommendations.

mikalPost election musings#14926211/11/06; 13:20:45

The Verdict Is In
Richard Russell snippet | Dow Theory Letters | Nov 9, 2006
Extracted from the Nov 8, 2006 edition of Richard's Remarks

Russell Comment -- November 8, 2006 -- The verdict is in. The majority of the American people by their vote have said "enough" to Bush and the neo-cons. The House went to the Democrats and as I write the Senate is in doubt. Was it Iraq, was it the economy, was it the lies, was it the sleaze, was it the incompetence? It was probably all of these. The vote has rendered President Bush a "lame duck." The nation now faces gridlock. But Iraq will continue, and the deficits will continue.
Much power has now been transferred to the Democrats. They don't deserve it. They went along passively, cowardly, and cluelessly with the Bush caravan. Their real claim to power is not courage or intelligence, their real claim to their new power is simply that they are not Bushies or neo-cons. In all, it's a sad story. But it's a story, less sad than it was a day ago.
Effectively, the reign of Bush and the neo-cons is over. Today there is one less neo-con, Rumsfeld is gone. What turned the tide? Actually, it was the belated back-stiffening of the press. The newspapers, early on, were cowed by the Bush crowd. Later, Iraq, lies, and the administration's arrogance was too much for the press. The press regained its courage. With the recovery of courage by the press, the truth emerged, and the Bush people were doomed.
Economically, the big picture will now boil down to four phenomena: (1) Iraq, (2) the continuing massive US deficits, (3) the longer-term effects of the deteriorating housing picture, (4) the incredible disparity between Wall Street and the rich -- and the great mass of struggling Americans.
Iraq will be a continuing cancer. I have no idea how it will be resolved.
The deficits will probably be ignored despite much hand-wringing.
The housing situation (in my opinion) will deteriorate and become a huge problem.
The disparity between the rich and the poor will remain an unsolved cancer -- it will also be a source of anger on the part of most Americans.
The consensus continues to be that housing is due for a "soft landing." In my opinion, the soft landing is a fantasy. I think it will be well into next year before we know what kind of landing housing is headed for. I think it's going to be a very hard landing, one that will work a hardship on the entire nation.

lots more follows for subscribers..."

Mikal -> Food for thought from the much respected Russell.
Reiterates and reinforces much of the discussion here this week.

TopazBond, Gold, Silver. #14926311/11/06; 14:23:28$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339

I wouldn't part with one gram of Gold to "invest" in the other two BUT, as long as the wheels stay on, 120 Long Bond (4.2%ish yield) and G:S ratio of 30:1 seem inevitable going forward.
Aftre 120 LB ...well, it doesn't bear dwelling on in the here and now!

FlatlinerStepping back in time#14926411/11/06; 14:27:06

5/3/98 Another wrote about the Euro being strong in gold and the Dollar being made weak. How?

Another wrote: "The holding of large reserves by the ECB and the withholding of sales from the market will not only bring the end of the London paper gold market, it will, thru a high USD gold price, "make the dollar weak in gold"!"

Scenario: Another seemed to believe that one day, European central banks would stop delivering physical gold for contracts on the London paper market. On that day, that group knows that any physical gold delivered will come from mine delivery or scrap recycling or it will come in defense of the dollar. Knowing this, this collection of central banks will be buyers rather then sellers in the market. Any actual physical delivery will be an actual transfer of wealth from the dollar regime or from an unsuspecting speculator. The central banks, that had been sellers, would most likely sit as buyers calling in all contracts (rather than rolling them over). This would force a settlement situation that would force a scramble in the physical markets to cover paper commitments. Or, simple paper settlements, but the intent will be to remove credibility from the paper gold markets. People will have to question the paper markets as to there purpose and function. If they don't function, what is the purpose?

Next, the net affect is that because gold is quoted in dollars, the scramble will show a high gold price for dollars. For the sake of clarity, let's pretend that the price goes from 600 to 6k an oz. Because of the 4/3 exchange in the currencies, one would expect that the price of gold will rise to maybe 4.5k in Euros.

As a side note, all around the world, anyone holding currency just found it devalue against gold. This isn't necessarily a bad thing because it happened everywhere at the same time. Some of the banks that had gold found that their reserve status, that used to be weighted towards dollar reserves, just changed from US dollar reserves to Gold reserves. In other words, in China's case, if they hold 300 tonnes gold, it might go from being worth a few million to a few billion but still remain a small proportion of the overall reserves. In Europe, the gold goes from being half the reserves at 300 billion gold value + 300 billion US currency value to 300 billion US currency value + 3.0 trillion gold value.

Notice what this means. It means that before the ‘event day’ the dollar was strong in gold. Afterwards, all currencies are weak relative to gold.

The affect here is that anyone holding gold benefits from the newly discovered price in each currency.

Another wrote also that "From this position, the dollar will lose the "oil backing" from the Middle East!"

If I'm reading this correctly, oil backs trading in dollars because dollars are strong in gold. Thus, a dollar that no longer buys much gold will remove the advantage of trading in dollars. At the same time, all currencies are weak against gold.

Now, that newfound wealth can be put to play by the European banks in order to strengthen or weaken their currency against gold. If they add liquidity into the European market, the price of gold will drop. If they remove liquidity, the price of gold will rise.

This is the fundamental part of the Freegold concept (as I see it): The ability to use gold in a local economy will strengthen or weaken the currency relative to gold.

Now let's look back at oil. If the premises is that oil wants gold, then the central banks of Europe can ever so slightly liquidate gold in their economy effectively lowering the price or making it stronger in gold then other currencies. China may not be able to do this. The US may not be able to do this (If it doesn't have gold). This availability of gold, purchased with Euros, will cause a conversion into Euros by oil – but only if gold is liquid in that economy.

As everyone knows, conversion into a currency changes the exchange rate. Those who want it bid up the price. Another wrote: "the dollar will bid for the Euro" thus as the world sees that the Euro is stronger in gold, dollar holders will exchange for euros. This will cause the Euro to gain exchange status against the dollar. As this happens, the price of gold will be falling in euros and rising in dollars.

For the sake of argument, at some point, to acquire a Euro it might require 10 or 20 dollars. This implies that 6k dollars might buy an ounce of gold where as 3 to 6 hundred Euros may acquire the same ounce. Or 12k dollars to 1200 Euro per ounce.

If oil trades for currencies that are strong in gold, it would make sense that we'll see oil backing the euro after gold can be used to balance the currencies price against gold.

How does the dollar economy fair? It seems to me that the loss of oil backing will drive home surplus dollars creating a hyperinflationary situation. The savers of the world will have unlocked the savings to switch to Euros. Unless the unleashed savings can be evaporated – as in a stock market crash. In other words, if a trillion dollars is freed up to chase Euros that would normally find its way into goods and services, if that demand can be offset by a trillion dollar reduction from a source like the stock market, we don't have hyperinflation, but a serious depression.

If the way to strengthen a currency comes from liquidating gold in the economy, it would stand that the only hope for the dollar is that it has gold backing.

If there really is 8k tonnes gold that can be used to defend the dollar, then the closing of the paper gold markets places the US on the same playing field as the European central banks. Gold can be used to hold the strength of the dollar in an effort to keep oil backing. Ultimately, that requires that the gold is liquidated to trade for dollars. This, once again, is the action of Freegold. With the number of outstanding dollars and the trade imbalances, it doesn't make sense to ‘fix’ a gold exchange and if one is fixed inflation will always tilt the scale.

It would seem to me that if the US has a store of gold, a crisis situation will trigger Freegold actions and a new way of dealing with gold. Otherwise, we'll see hyperinflation or a serious loss of savings.

Now the question is how long will it be before metal is not delivered in the paper markets? Will rising physical demand create this condition or will a more political event bring it to light? Will jewelry buying India exceed market supply? Will hedge funds loose interest in paper gold speculation? It all seems to hinder on the collapse of the paper gold markets. And, at the way the paper gold markets are expanding, it doesn't seem that a closure is anywhere on the near term horizon.

It seems that those without gold, those stuck without the ability to balance their economy with gold, will do everything that they can to put off the day or reckoning. Can this do this indefinitely? Physical gold ownership and understanding seems critical at this juncture in time.

MKChina, Gold and the USAGOLD NewsGroup#14926511/11/06; 15:48:17

"Now that we've safely ensconced the FT Comment & Analysis piece on Chinese reserves at the NewsGroup archive where it can be easily accessed, I would like to make some additional comments on the subject. At present, I think that the magnitude of what is being presented in this article has yet to hit the markets. When it does there could be some substantial adjustments. Right now the financial world is dealing with minor atmospheric disturbances (recession worries, interest rate concerns, the housing bubble, the elections, etc) compared to what might happen once it sinks-in just what China is actually up to." (USAGOLD NewsGroup - 9/29/06)

This past week China moved front and center in the gold market. The remarks above were first published 9/29/06. It took over a month for the magnitude of China's trillion dollar problem to hit the the markets. Coupled with the election results, gold thundered higher.

If you have an interest in the USAGOLD take on the news and what we deem to be essential reading for the contemporary gold investor, we invite you to join our NewsGroup.

Many benefited from our analysis of the China situation and positioned themselves at what turned out to be bargain prices. You can benefit as well by going to the link above and registering for this important sevice.

And best of all . . . . It's free.

We invite you to become well-informed.

MKAnd here's the link to the original article quoted below. . .#14926611/11/06; 16:04:02

for those who may have missed it.

Snip >>>>>>>>> All in all, it would hard for me overemphasize the importance of the revelations in this article for gold owners. Suddenly, many of the questions that have been bandied back and forth for months and even years as to what China might do with its growing dollar reserves are now in the first stages of resolution. I won't deal here with the subject of gold availability because for the gold owner that is a side issue. The real impact will be the counterweight China is about to impose both on the gold market psychology and in reality. Indirectly, gold will benefit as investors internationally take a second look at the dollar. Gold will benefit directly from an ever-present demand source acting as a counterweight to supply. Gold's opponents will no longer be able to wave the red flag of central bank sales without someone else raising the specter of central bank gold purchases. And, it is unlikely that the move to gold will stop with China. It will become exemplary -- with the oil-rich Gulf States immediately coming to mind. <<<<<<<End Snip.

MKMy take on the election. . .#14926911/11/06; 16:56:47

It used to be that when Congressional committees were not controlled by Republicans, they were controlled by conservative southern Democrats. This "arrangement" generally worked from the viewpoint of those of us who call ourselves fiscal conservatives. The federal government's deepest instincts to spend were at least somewhat contained, and what might now have been a $20 trillion national debt has been held to a respectable $8.5 trillion.

Now all of that has changed.

Consider this:

John Dingell, Chairman, Energy and Commerce

Barney Frank, Chairman, Financial Services

Henry Waxman, Chairman, Government Reform

Charles Rangell, Chairman, Ways and Means

And if that's not enough to shake the post-election cobwebs from your heard, consider the fact that come January we will have San Francisco's Nancy Pelosi as Speaker of the House. (I won't go into what might happen in the Senate where Ted Kennedy, Charles Schumer et al will become prominent voices.)

My fellow goldmeisters, these aren't just Democrats we're talking about here. This likely will be the most radically liberal Congress since the time (dare I say it) of Franklin Delano Roosevelt.

My conclusion:

The election results will be misinterpreted. This group will push for the max despite the soothing tone they will take in the media. Nancy Pelosi has already said, "The Democratic majority has heard the voices of the American people." One wonders what she hears. . .

Be afraid.

It's not just that Bush will be a lame duck, as Richard Russell correctly points out. What could prove to be the most radically liberal Congress in history will square off against a politically sterilized president. It was supposed to about the war, but it will become more than that.


It will take a while for the reality to sink in, but already money managers and private investors around the world are taking note. The most interesting quote in Friday's gold reports came from my old friend Ian MacDonald. "Physical [gold] buying," he said, "remains at record levels."

GoldiloxCongressional Spending habits#14927011/11/06; 17:17:22

@ MK,

Not to add political controversy to your observation, but the greatest spending increases in US history occurred under the Reagan (the "great conservative") and Bush administrations, so I don't believe your labels are accurate any more, if they ever truly were.

That said, spending MUST continue, no matter who is in the "allocation seat", or the Banking/Government Ponzi scheme collapses, as all financial pyramids finally do. The US government is way too indebted to even pretend real fiscal "responsibility". Even Clinton's "relative relaxing" of debt growth was only accomplished by absconding with the very prolific SSI revenue.

One glance at the "relative smoothness" of the government debt curve since 1929 completely obliterates any ideas of fiscal change.

GoldiloxHodges Grandfather Debt graph#14927111/11/06; 17:25:16

By the way, for those who reference the debt graph on the previous post, it almost looks parabolic, until you add the 16 years of FED control previous to the graph, stretching the x-axis a little further left. Once you do, it becomes a near perfect HYPERBOLA with only a couple "bubble blips" to interrupt the smooth geometric progression of x-asymptote to y-asymptote.
GoldiloxInflation growth vs debt growth#14927211/11/06; 17:44:52

Some enterprising politician might want to produce a graph of debt growth adjusted for inflation, although anyone with a clue would instantly recognize it as an attempt to white-wash the political reality of "the invisible tax" into a partisan comparison of "taxation methodology".

Whether constituent assets are visibly taxed away with collections or invisibly taxed away with devaluation, the end result is too similar for anyone but the no-bid contractor to notice any difference.

Think where we would be already if the, ENRON, and WorldCom "disasters" were not created to funnel public ammunition into the PPT. Tax receipts alone would never have fed the voracious appetites of "dollar protection". How much more "debt" would we have taken on to prop up the dollar IMS?

The Ponzi scheme must be be either played out or abandoned for a new "system", as endless "modifications' only minutely delay the inevitable collapse. Probably BOTH!

The Invisible HandEasy money – the Spanish and Dutch examples for Norway#14927311/11/06; 18:55:14

London 07 November 2006 speech by Jarle Bergo, Deputy Governor of Norges Bank, Norway's central bank

"The Norwegian economy and financial stability"

Spain in the 17th century provides a good example of [how bad easy money is for a country]
More recently, the expression "Dutch disease" reminds us that the issue [of colonisation of South and Central America by Spain gave access to a wealth of natural resources, not least gold] is still relevant.


Now you know why Norway is no EU, a fortiori no euro, member.

Sorry, I don't know how to copy from an Acrobat document.

The Invisible HandHelicopter Ben not interested in money supply! (Financial Times)#14927411/11/06; 19:05:35

I loved this headline.

Sorry for the repeat
msg#: 149246
Trichet and Bernanke differ on strategy

msg#: 149247
Handelsblatt ignores Bernanke
HANDELSBLATT, Freitag, 10. November 2006, 16:02 Uhr
Geldmengenwachstum (Growth of the quantity of money)
EZB räumt Strategieproblem ein (ECB discloses strategy-problem)

The Invisible HandEU can't afford "extensive" tariff reductions with China#14927511/11/06; 19:40:39

Hence, Russia is diverting its oil from the EU towards China,

China being a developing country whose fragile financial system can't afford "drastic" changes.

EU-China aim to close trade gaps
BEIJING: The European Union's trade chief said yesterday new talks with China next year would tackle "gaps" in Beijing's efforts to dismantle trade barriers and protect intellectual property rights.
"We are satisfied China is implementing the bulk of its WTO accession commitments, but there are gaps," said Peter Mandelson, concluding a week-long visit here.
In a statement, the EU said it was not seeking a "full-blown" trade agreement because that would involve extensive tariff reductions that would be difficult for both sides.

But Commerce Minister Bo Xilai rebuffed Mandelson's appeal, saying China was a developing country with hundreds of millions of poor people and a fragile financial system that couldn't afford to make drastic changes.

Beijing and Moscow sign new energy deals
Deals in the energy, trade and space sectors have been signed in Beijing. Closer ties between the two powers could mean the emergence of a new axis capable of drawing in other states.

melda laureSnip from TIH's previous link.#14927611/12/06; 00:28:43

Challenges in an oil economy

Norway ranks as the world's third largest oil exporter after Saudi Arabia and Russia and the eight largest oil producer.

Petroleum activities have contributed substantially to Norway's GDP, exports and government revenues since the late 1970s. Petroleum activities give Norway an economic base that is not available to many other countries.

But oil and gas also present Norway with considerable economic policy challenges. The experience of other countries that have received large, unexpected income from natural resources is not encouraging. Societies that suddenly gain access to huge wealth stemming from natural resources have a tendency to spend the money and then fall into decline.

Spain in the 17th century provides a good example of this, as the historian David Landes observed.1 The colonisation of South and Central America gave access to a wealth of natural resources, not least gold. Spain chose to spend a large portion of the windfalls on luxury and war. More recently the expression "Dutch disease" reminds us that this issue is still relevant.

It can certainly be argued that easy money is bad for a country. It is tempting to live comfortably on this income – which actually is not income but drawing on wealth – while it lasts, and forget about and be less concerned about safeguarding other revenue sources. The challenges with large income from natural resources and its negative impact on economic growth have also been pointed out by Jeffrey Sachs and Andrew Warren.2

Success in managing our petroleum wealth may be particularly dependent on four key factors.

First, from a long-term perspective, oil and gas production will take place during a limited time period. When oil is extracted and sold, petroleum wealth is transformed into financial wealth. This wealth belongs not only to our generation, but also to future generations. We must therefore manage the wealth as an asset.

Second, the size of the cash flow from petroleum activities varies considerably from year to year. If it were to be spent as it accrues, this would lead to strong cyclical fluctuations in the Norwegian economy.

Third, in terms of economic policy, an explanation for "the resource curse" has been that such "un-earned" wealth leads to an extreme focus from various groups on acquiring as much of this extra wealth as possible. It is therefore important that the decision-making processes in the political sphere guard against this kind of "rent-seeking" behaviour.

Finally, petroleum revenue spending will have a serious impact on the competitiveness of Norwegian industry if spending is too rapid and variable. It is therefore important that we succeed in maintaining an industry structure that promotes learning, innovation and development, which can give us other sources of revenue than oil.

What we are trying to achieve is to transform petroleum wealth into financial wealth, to the benefit of future generations as well.

Nonetheless, the discounted value of our own labour force is our main asset. Our livelihood essentially depends, and will continue to depend, on our ability to efficiently produce goods and services and to use our creativity and innovation to become ever more efficient.

Well that was brilliantly said, and nicely avoided any taint of Colonisation. It is of course common in the west to focus on the suffering of the "victims". What is less discussed is the transforming effect easy money has on the perpetrators: generally it causes the moral fiber to fray- sometimes completely. Thus the behaviour of europeans with respect to the natural world has been much less circumspect when they came upon the western hemisphere than was customary in their homelands- after all, there was so MUCH of it lying around whereas back home it was scarce (and expensive!) Perhaps in another 500 years, sanity will finally prevail.

So much for my lecture on thrift. Easy money, easy credit, easy "resources". The result is the same, it seems to be universally intoxicating. Respect for wealth is something that must be taught, and must be learnt (especially when the wealth doesn't belong to you, but rather to future generations). But I dont see the inheritance tax being repealed until congress sees that businesses are being liquidated and jobs lost.

Given the decapitalisation of the west, Sir BB is right, you may well need your own fiefdom to be comfortable, as the government is looting the value in any paper chits via taxes, inflation and regulations. A personal plot of taters and gold might be quite handy.

The Invisible HandBehind the curve?#14927711/12/06; 03:06:45

"Without our thorough monetary analysis, we could have been in danger of falling BEHIND THE CURVE," Trichet said.

FOA (08/28/01; 10:34:03MT - msg#104)
Just a walk down the path!
is in the evolution of our modern paper money dynamic itself.
The US was way BEHIND THE CURVE in grasping how our changing "world economic function" was reworking the use, demand and nature of how fiat money settled commerce.
Even with all it's awful inflationary attributes, we were evolving with the markets to use our fiat moneys in ways that were in spite of their losing value.
Had American money policy seen this in process, they could have dropped the war on gold long ago; the way the Europeans have already.

Yesterday's msg#: 149274
Helicopter Ben not interested in money supply! (Financial Times)

Has anything changed in the US? Is history repeating itself?

Yesterday's msg#: 149248
Perhaps it was because the Handelsblatt knew that Trichet's position would be discussed this week-end, that it just chose to ignore Bernanke.
Anyway, now it is clear that the quantity of money should be used as an activator of the economy.
Central bankers should stop worrying about the purchasing power value of the bookkeeping unit (currency).
This means that one should no longer save in so-called money, but in Freegold.

Zorry vor ze kapitalization.

GoldiloxA Staggering New Bill For Iraq?#14927811/12/06; 04:04:52


he U.S. armed services have requested a $160 billion supplemental appropriation to fund the wars in Iraq and Afghanistan in the remainder of fiscal year 2007--a staggering amount that, if approved by the Defense Department, may hasten the showdown between resurgent congressional Democrats and the Bush administration over the budget-busting War on Terror.

The request--which will likely include all costs related to the war on terrorism--far surpasses the $94 billion supplemental authorized earlier this year to fund the ongoing wars as well as hurricane recovery in the Gulf and is nearly double the $82 billion Iraq war supplemental outlay of 2005. It comes within days of Republicans' stunning losses in the midterm elections and the resignation of embattled Defense Secretary Donald Rumsfeld, who was set to decide on the request Nov. 15.

President Bush said Wednesday that he would nominate as Rumsfeld's replacement Robert Gates, former head of the Central Intelligence Agency under the presidency of his father, George H.W. Bush.

GoldiloxOmitted reference#14927911/12/06; 04:07:29

Reference for the previous post.


Nothing disinflationary about numbers like this.

GoldiloxDaily Commentary#14928011/12/06; 04:15:48


Apparently the gold market responded aggressively to renewed talk yesterday of Chinese Central Bank diversification away from US assets. While some gold traders seemed to bid up prices on the theory that diversification would pressure the Dollar and in turn lift gold, other traders took the news as a sign that China might actually be set to add gold to their reserves. While the US Fed member prediction early this week, of more Central bank diversification was key in waking up the market to a critical big picture development, the statements from the Chinese governor on Thursday, regarding diversification, really gives the trade some confirmation. Furthermore, various noted analysts have already suggested that seeing China add more gold to its reserves, has the capacity to provide support to gold prices for years to come. In fact, from the bull camp's perspective, a realistic chance of increased Chinese central bank gold buying is a very major development, as the Chinese gold reserves as a percent of total reserves currently represent only 1%. Some overnight predictions suggested that China could raise their gold reserves to as much as 5% or 6% and that has the potential to change the world gold supply and demand equation dramatically. In the background, the trade continues to toss around the idea that the Russians are in a similar position to China, with their progress as a world trading partner also expected to raise their gold reserve needs. In another bullish development overnight, it seems that Indian regulators have cleared the way for trade in gold ETF's and that is potentially another source of investment demand for gold. Into the opening today, a lower Dollar is only providing marginal support for gold prices and that could be the result of the overbought condition from yesterday, and it could also be the result of generally weaker oil prices and some strength in equity prices overnight.


From Dave Morgan's site. "Will or won't China" seems to be the question of the day.

I saw another commentary at FSN entitled "Bull in a china shop", but this one could have been labeled "China in a bull shop".

GoldiloxFinancial Sphere Bubble Watch#14928111/12/06; 04:25:23


November 6 – Bloomberg (Christine Harper): "Never in the history of Wall Street have so many earned so much in so little time. Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. are about to reward their 173,000 employees with $36 billion of bonuses. That's a 30 percent increase from last year's record, and it doesn't include the billions more that will be paid by Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, as well as the hundreds of hedge funds and private-equity firms that constitute the financial industry."

November 8 – Dow Jones (Damian Paletta): "Fannie Mae Chief Executive Daniel Mudd said…that the company's announced $1.05 billion cost in 2006 related to restating its accounting errors and complying with regulatory oversight was ‘dramatically’ higher than earlier projections."


The appetite for "junk issues" continues to grow, along with wealth transference to Wall St.

Can we continue to tap the consumer and his retirement welfare for even more "records"?

GoldiloxQuotable#14928211/12/06; 04:34:23

"Every mania in financial history has been liquidity driven. You can go back to the South Sea Bubble or tulips in Holland. As long as the money is coming in, everything is fine. "
- Raymond DeVoe, Dec. 11, 1995


The one-arm-bandits in this neck of the woods continue to magically appear like mushrooms in a rain forest, emulating the record "earnings" on Wall St.

So long as there is money, er liquidity, to "mop up", someone will oblige.

ShantiAt the Fourth ECB Central Banking Conference, Frankfurt, Germany #14928311/12/06; 05:14:32

Seems the helicopter will keep flying

Although a heavy reliance on monetary aggregates as a guide to policy would seem to be unwise in the U.S. context, money growth may still contain important information about future economic developments. Attention to money growth is thus sensible as part of the eclectic modeling and forecasting framework used by the U.S. central bank.

Loosing grip ?

Various special factors have also contributed to the observed instability. For example, between one-half and two-thirds of U.S. currency is held abroad. As a consequence, cross-border currency flows, which can be estimated only imprecisely, may lead to sharp changes in currency outstanding and in the monetary base that are largely unrelated to domestic conditions

MatthewTypo?#14928411/12/06; 05:20:59

Shoot the typist? Total Ag up 55-60 million ounces!
KnallgoldGoldilox,the empty notes and left holding them in bags#14928511/12/06; 09:13:29

"The appetite for "junk issues" continues to grow, along with wealth transference to Wall St."

Hmm'some think $'s are not really wealth-"your wealth is not what your currency says"-Another.

I'm sure you'll take some comfort in that Goldi!

SmeagolSsir TIH, PDF copy/paste#14928611/12/06; 09:55:44

[Smeagol mode off]
Sir Invisible Hand, if you are using an IBM/Windows based system you should be able to copy/paste from a PDF this way: on the toolbar above the document, next to a little hand (yours? ;-) ) there is an arrowhead with the word "select". Click that, then click and drag across the text you want to copy, then press "Ctrl"+"C" to copy it. Then you can paste it into your message (or into Notepad) or some other for editing) by pressing "Ctrl"+"V".

While the Norway ECB post was worthwhile I found the second article in that PDF link- Macro Prudential Policy - to be very interesting also:

"What has changed in the past ten to fifteen years is that central banks have started to give much more explicit emphasis than in the past on their macro prudential responsibilities and have distinguished it more clearly from the micro-supervision perspective. This renewed emphasis has several different sources.
One of them was undoubtedly the financial crises that hit Asia in 1997. This experience showed that even if the individual banks in a financial system appear to be sound, the system itself can still be overwhelmed by financial shocks. For example, the system can be exposed to a common risk that isn't obvious from looking at each bank individually. In the Asian crisis countries the exposures of banks to foreign exchange risks didn't show up on bank balance sheets. The risks were instead in the balance sheets of their major borrowers, who had borrowed heavily in foreign currencies even though they had domestic currency cash-flows. And this also points to another feature of macro prudential concern – it cannot stop at the traditional boundary of the banking system, but must look at the risks in the non-bank financial sector and at the structure of household and corporate balance sheets."

"But it is important to be careful how the risks and vulnerabilities are presented. The last thing we want to happen is for the predicted problems to surface because everyone has rushed for the exit at the same time. So the message has to be not one like "we think it's too risky to extend more credit to this sector" but instead more like "have you thought about the entire range of relevant risks in extending more credit and are your underwriting criteria in line with the riskier environment?" It's important in publishing a financial stability report to present its findings as a range of possible outcomes which the private sector can then be encouraged to factor into its own risk management practices."

A little like walking on eggshells, it feels to me.

"In addition, the experience of the last decade has also taught us that non-bank financial intermediaries matter for the soundness of financial systems. For example, there is plenty of evidence that insurance companies have been major sellers of credit derivatives. This passes credit risk from the banking system to the insurance sector. How well can the insurance sector manage such risk? And if bank-insurance linkages are strong (e.g. through financial conglomerate groups) can we be sure that the risk has really passed out of the banking system? Similarly, the role of hedge funds in financial systems has recently begun to receive a good deal of attention from central banks and regulators. The extent to which they increase the volatility of financial markets has long been the subject of debate. But increasingly this largely unregulated sector has become a major provider of credit – thus transferring risks out of the regulated banking sector and into a part of the financial system that is far from transparent. Macro prudential policy cannot afford to ignore these innovations.

Finally, as the debate on hedge funds has also shown, financial stability analysis cannot stop at national borders or in particular jurisdictions. A hedge fund based in the Caribbean is capable of moving markets half way round the globe. In these circumstances, macro prudential policy must take into account the possibility of shocks originating outside our domestic financial systems in today's global, integrated financial marketplace. It also requires central banks and regulatory agencies to cooperate to develop policies to mitigate these risks."

Why do I feel in my gut that at some point fairly soon they WON'T be able to mitigate those risks?

Thank you Sir TIH for the informative posts!

[Smeagol mode on]


GoldiloxCongress Sets New Federal Debt Limit: $9 Trillion#14928711/12/06; 10:07:28

Old news story - Mar '06, but a great graph showing how much debt has risen as a percentage of GDP.

35% to 60%

KnallgoldFlatliner #149264#14928811/12/06; 10:48:01

"..Now, that newfound wealth can be put to play by the European banks in order to strengthen or weaken their currency against gold. If they add liquidity into the European market, the price of gold will drop. If they remove liquidity, the price of gold will rise.

This is the fundamental part of the Freegold concept (as I see it): The ability to use gold in a local economy will strengthen or weaken the currency relative to gold.

Now let's look back at oil. If the premises is that oil wants gold, then the central banks of Europe can ever so slightly liquidate gold in their economy effectively lowering the price or making it stronger in gold then other currencies. ...

As everyone knows, conversion into a currency changes the exchange rate. ...


If oil trades for currencies that are strong in gold, it would make sense that we'll see oil backing the euro after gold can be used to balance the currencies price against gold.
If the way to strengthen a currency comes from liquidating gold in the economy, it would stand that the only hope for the dollar is that it has gold backing.


KG:Pardon if I understand something wrong here or didn't get your point,but last time after writings like these Belgian shouted "there will be no Goldstandard anymore"!?Central to FreeGold is its cut of the link to money/currency machinations/manipulations. Gold-simply a reserve,the most precious one though.Not a "wealth proxy"(an oxymoron) like the currencies, Goldpapers,etc.The original!

Or do we get a "floating Goldstandard"? (Smells like Another oxymoron)

It appears to me that Flatliner is highly skeptic of any real steps towards "FreeGold".Which can describe the simple reality,and often I have my doubts as well.But too many rational arguments just aren't going away anymore,it simply sticks,the time of the idea has come.And there are these small re-assurances ,at the right time (I might read too much into it though).

One last note:"And, at the way the paper gold markets are expanding, it doesn't seem that a closure is anywhere on the near term horizon. " Maybe exactly this big final blow will give it the final shot,"collapsing on its own weight","on the way up or down".

FreeGold is dead'say it isn't so (smile)!

Flatliner@Kanllgold. The fundamentals of Freegold#14928911/12/06; 13:21:52

Thanks for being a listening ear. Words only convey a fraction of what is really needed in conversation and reading between the lines requires making assumptions of the writer's intentions which may not be apparent.

It was most encouraging to learn that Belgian still reads these pages and is willing to state: "Belgian (11/9/06; 11:27:29MT - msg#: 149172) GOLD THERE WILL BE NO GOLD STANDARD ANYMORE ..." I may not fully understand the context for this comment, but it does seem tied to the topic thread that I was involved in the other day. I would honor the opportunity to expand my understanding on this golden topic, being a relatively new student to the topic of gold and it's growing roll in the world's monetary environment.

Maybe it is time that I spend a little more time trying to understand the Freegold concept. You state: "Central to FreeGold is its cut of the link to money/currency machinations/manipulations. Gold-simply a reserve,the most precious one though.Not a "wealth proxy"(an oxymoron) like the currencies, Goldpapers,etc.The original!" (Is this a reference? or your words? Thanks.)

We all know the background behind the Fed and that people at one time could exchange FRNs for the stated amount of gold. We also know that the idea behind the Fed is to allow the government to inflation the currency supply. Governments intentionally use central banks as a means to create, out of thin air with the use of law and governance in it's defense, the fundamental tradable commodity for an economy. Anyone that understands what inflation does to the purchasing power of the ‘money’ knows that without the convertibility option people will be swindled out of their purchasing power when they hold that printable commodity.

Today, we are being swindled. There is no ‘fixed’ convertibility between dollars and gold. If the number of dollars in existence were limited by the convertibility protection, there would be but billions of dollars in existence.

It seems to me that in order to draw out the deception of convertibility, dollars were exchanged for a long time at face value against gold. Because this process always breaks down when people use the convertibility option in an inflated currency environment, we saw it break down in ’33 with the fed. Even though it broke down internally, it was still used externally up until inflation had been exported in large enough numbers to be redeemed by foreigners. The deception was called, through the convertibility option.

The deception is that the currency was as good as gold. We know that not to be the truth. Thus, anyone that comes along to state that they will exchange gold in a fixed amount for a note, that they create out of thin air, is lying and they will be called on it (eventually).

Then, another great deception was played out in the markets. Gold was allowed to trade freely but if you wanted it, you needed to go into the futures markets. The idea here is that the players in this arena are more trust worth then you with regards to holding the gold. If you read closely, you will find that when you take the gold out of the system, it loses credibility and must be re-assayed. We've all followed this for the last 30 years and clearly see that more paper gold exists, and is traded, than the gold that exists in the world. It's clearly a gold inflationary environment just like the currency environment.

But, the deception is that you can redeem your futures contract at face value for gold. This clearly cannot be done. If those that have the right to make this convertibility claim make it, the contracts will not be honored.

One interesting thing about the current futures market is that it has "made the dollar strong in gold." Effectively, because the deception works and people are willing to exchange their gold – in the open market – for the currency provided through these futures contracts we have an environment where those that hold dollars and want to convert can. As long as dollars can be converted through this process, the dollar maintains the illusion of being strong in gold – just like currency that maintains the illusion of being backed by gol.

At the same time, gold ‘appears’ to trade freely.

Now, let's go back to the words "Central to FreeGold is its cut of the link to money/currency machinations/manipulations." It would seem clear to me that the environment in which gold is traded today is deceptive and it falls into the category that it's being manipulated in order to provide credibility to the dollar. Now, I will step out on a limb and guess that the intent of these words really means that the "cut of the link" is really that the convertibility through the futures market between dollars and gold must break down. In other words, when people realize this deception that makes the dollar strong in gold, the dollar will loose that privilege and become weak in gold.

Let's pretend for a moment that the dollar loses this privilege. We all know that the paper gold market will be exposed as a sham and those holding physical will no longer exchange it for the current small numbers of dollars. At this point, gold may find a ‘stable’ point at which it will be offered for dollars (or Euros or whatever paper currency if offered). Is this a Freegold situation?

It seems to me that the European banks all got together and talked about this deception many years ago. Could it be that they thought ahead to the day when the paper deception would be exposed? It would make sense that they would and that they would lay the foundation in order to maintain the right to print currency out of thin air after the point of exposure. As we have seen, bankers (governments) will do everything they can to preserve that right.

So now, I will scurry a little further out on the limb. The central banks have gold and they are intimately tied to the ability to print currency. Thus, a central bank – with a gold reserve – stands to be able to either buy or sell gold. The mere thought of a central bank going into the open market to purchase gold sends the price skyward. If they actually did go into the open market, gold would become scarce – the price would rise. At the same time, the mere thought of a central bank selling gold drops the price – because they actually could liquidate the market.

This functionality has given me the understanding that if gold convertibility is lost through paper markets, the next avenue of convertibility will be open physical markets. In these markets, people will ‘think’ that they are getting the best possible price for their metal because there is no actually over issuance of paper claims against the metal. Gold will ‘appear’ to be free! This is where I made the association between the Freegold concept and the collapse of the paper gold markets.

What is interesting about this next step in the evolution of central bank currencies is that the privilege to control the price of gold moves from the global paper markets to the central banks of the world that actually hold gold. Contrary to what some people believe – that it will move into the hands of individuals that hold gold. But, the ability to control the price of gold is not lost.

This is very important to understand. If a bank holds a massive amount of gold and an infinite amount of currency, they control the price of gold in that economy. Sure, when the paper claims are dropped, the price of gold may be 100 times more valuable but the ability to manipulate does not go away.

Thus if - "Central to FreeGold is its cut of the link to money/currency machinations/manipulations." Then I do not believe we will ever have Freegold.

But, I do not see this as a bad thing. For one thing, when the burden of paper claims disintegrates, the value of physical metal will jump relative to currency. And, I see that the value can be balanced at a high level or made to grow at a relatively constant rate due to the tool of inflation in the currency arena. The act of inflating the currency supply will be directly reflected in the price of gold in that currency (driving the price of gold up). In other words, the days of inflating the currency supply for years and years and years without the price being reflected in gold will be over. People will save gold and spend currency but central banks will continue to function.

The words "Gold-simply a reserve,the most precious one though.", in light of the above information, has an interesting spin in this type of gold trading environment. To individuals, gold is a means to protect yourself from the inflation of the currency supply. To a central bank, gold is a means to absorb the excess currency in circulation. A high gold price and huge gold reserves allows a central bank the ability to control gold liquidity. If there is too much liquidity, they buy gold and add it to either reserves. If there is too little liquidity, they sell gold. But, there is a limit to the amount of gold they can sell AND there is a limit to the amount of gold they can buy.

So, if the definition of Freegold means that central banks will not manipulate the price of gold, then, I do not believe we'll ever see a Freegold environment. Thus, I duly ask the forum – what would you call this type of environment?

USAGOLD / Centennial Precious Metals, Inc.Shop online, or make a list and phone Monday for quantity savings!#14929011/12/06; 13:59:07

shop for gold coins
GoldiloxEssay on "freegold"#14929111/12/06; 15:10:39

@ Flatliner,

Your essay is great, but you left out the potential for the populace losing confidence in the CB's paper, as has happened sooooo many times in the past. Maybe that's the point where gold really becomes "free", except for the manufactured "criminality" contrived by the anti-gold forces (a la 1933 in the US of A).

At that point the "freegold" battle takes on a new meaning, as the controllers demonize the very thought of "owning" gold, huddling their loyal cannon-fodder in nationalistic contrivances with flags, bread, and circuses to "take it back".

Flatliner@Goldilox#14929211/12/06; 16:45:02

Sure people could loose confidence in paper currency, but if you look at nearly all the historical examples, people accepted another replacement for their failed currency. I'm starting to see that currency is for the function of economies and gold as a function of individual wealth.

As for demonetizing it, the actions of all the central banks around the world show just the opposite - for they fit nicely into the outline that I described below. Central banks have taken what paper markets have demonetized and changed its status by making gold the reserve currency. It is being used a money. They will eventually exchange it like a currency.

Sure, when some big trader (or collection of traders) no longer comes to find redemption of dollars through the paper markets, one might find a loss of confidence that is functionally overwhelming. At this point, I see that there are a few situations that arise for dollar support:

The easy situation is, if there exists 8,000 tonnes gold held on reserve for the support of the dollar, it can be brought into play. We reset and follow the rest of the world and everyone's equally unhappy.

Some people think that, due to the previous actions of the Fed, gold will be seized illegally in order to raise the gold needed to back the dollar – so that it can be used as outlined below (or that it can step as it exists almost a hundred years ago). But, if you really think about it, you will see that the act of making gold illegal to own will remove the key function of converting dollars into gold. In other words, once the dollar looses its international reserve function – because it is replaced with gold, the convertibility of dollars will happen only within the dollar economy. That means that gold will have to trade in the US or the dollar will be found so completely weak in gold that absolutely no one will hold it for any reason what so ever. Effectively, the dollar will die. At that point, another currency will have to be created. It would most likely be modeled after some other working economy (Euro) but gold will still have to be gathered.

The situation that I believe is most likely is that there is no gold held on reserve (by the Fed or treasury), gold will not be made illegal and that a situation will be engineered as to facilitate gold's redistribution in the US. (By redistribution, I mean that there are haves and have nots – the haves will find the rules bent in their favor.) In this case, I believe debt will be offered up for gold. In other words, the bankruptcy laws have changed in the US so as to make it harder for someone to ask for forgiveness. Everyone will be forced to work to buy down debt. The alternative will be to exchange gold for debt forgiveness. At a high enough price, gold will circulate. Under savvier debt burden, people will work to reduce debt. I believe that this process will prove highly profitable to those that hold gold as assets will be transferred in exchange for gold in order to pay off debt. … I'm sure some here will find flaws in this way of thinking, but the fundamental principle is that gold must physically trade in the dollar or the dollar will die. Likewise, gold must trade in whatever other currency comes to replace it, or it will die.

Reading between the lines, you might see that I'm implying that gold will be very expensive in dollar terms and debt will be a burden (crime, maybe?). In simple terms, this might imply a situation where gold spikes in price but nothing else does. If all commodities – except gold – were to remain at their current prices, people would not be able to buy down debt through any means but hard work over time. Could this situation actually happen? Possibly. I don't know.

It could be that if foreigners are prevented from spending their dollars in the US for anything other then gold, we could find this seemingly lopsided situation. Under something like an executive order, we might find that we wake up one day and hear that export laws with regards to gold have been dropped and foreign reserves can be exchanged, in the open market, for American gold. In other words, come and get it - but that is all that you get. No oil companies, no car companies, no golf courses, no toll roads, no nothing of anything else. A payday of sorts.

Who knows how it might play out or what plays out. But it seems pretty clear that something IS playing out.

TownCrierFlatliner,#14929311/12/06; 17:40:36

Flatliner (11/12/06; msg#: 149289) -- "... Thus, I duly ask the forum – what would you call this type of environment?"

First importantly, your billing (i.e., forum handle) is all wrong, Flatliner. Such STRONG SIGNS of LIFE are hard to hide -- meaning, there is definitely a pulse of a powerful heart feeding the workings of an extraordinarily able brain!! Thanks for sketching out pounds of tissue to help flesh out and fatten up our animated skeleton of thoughts.

What would I call this, you ask...

Well, assuming the necessary structures were also included in order to appropriately curb the artificiality of the gold lending sector right along with that of the futures/forwards sector (or have you already effectively lumped these together under your term "paper gold"?), then I would call the general environment you sketched as representing the attainable pinnacle of human achievement in the monetary/economic realm.

The operative word there is "attainable". The architectural of that operational paradigm duly recognizes and accommodates our insuperable human frailties, striving toward the perfect ideal yet striking a political balance for achievement at the very highest PRACTICABLE level of our reasonably imaginable human potential.

On the whole, a different name could probably be found more suitable than "Freegold". Given that the achievable plateau doesn't strictly conform to the non-management which "free" implies; and given the current state of affairs with the requirement of political will to deliver us from "here" to "there", it seems to me that a more appropriate moniker (and serving also as a constant political admonition(!!)) would be along the lines of...

... a Noblesse Oblige Gold Paradigm.

Thanks again!


GoldiloxUS Gold in play#14929411/12/06; 17:46:08

@ Flatliner,

"The easy situation is, if there exists 8,000 tonnes gold held on reserve for the support of the dollar, it can be brought into play. We reset and follow the rest of the world and everyone's equally unhappy."

I'm not sure that I am following your reasoning, but even if there is 8000 tons available to meet US debt obligations, that is only three years of current production, so it may not keep the dogs at bay for long.

Once that gold is exhausted, the dollar is naked and worthless - requiring replacement, but also demanding a fairer substitute, unless the US populace is to become 300 million indentured servants to the rest of the world.

That might just be a more bitter pill than can be peaceably swallowed.

Flatliner@Gold in play!#14929511/12/06; 18:39:51

Goldilox! "Once that gold is exhausted, the dollar is naked and worthless" If there is 8,000 tonnes of gold available to back the dollar as gold backs the Euro, the dollar will never be naked or worthless! Rather, gold will balance foreign trade deficits!

Who is to say that this gold will ever be exhausted! If there is gold, and more importantly, if that gold is offered – the world will bid for it. The act of offering this gold will enable all foreign holders to get out from under the burden of inflation taxation! The offer is absolutely to amazing to pass up. If the Fed offered gold – at fair market value – you would see the fair market value in no time at all! As I mentioned a few days ago, if gold traded at a million dollars an ounce, 30 tonnes would negate China's dollar holding and balance out their books and remove the fear of inflation taxation and remove the need of the Fed to inflate as quickly (interest on debt). More importantly, they will have received something real of value in exchange for all their hard work.

It could be that if the Fed brought the US gold into play they will use a fraction of it to mop up excess foreign reserves and use the rest to implement a currency system just like the Euro. Remember, as the world bids up the price of Fed held gold, the reserve, MTM will gain value – just like all gold around the world. If 30 tonnes mops up 1 trillion in foreign held reserves, just imagine what the remaining 7,970 tonnes will be worth!

But reality is more like gold in the tens of thousands. The opening auction for this gold will bring everyone to the table as they desire it greatly. Seeing this demand and leveraging time, the fed can determine a reasonable auction price (much like a stock IPO) that will function as a starting point. 2k, 3k, 4k? It doesn't matter all that much because they would only sell a little gold. The idea, balance supply against demand (at a higher price). The Fed will find a balance where they can stabilize the liquidity of gold in the environment. Keep in mind that there are already many tonnes of gold held in private hands that is looking for a higher price to make it circulate. Thus, the Fed may offer up 30 tonnes, but the public may offer up another 30 or 40 or 50. Remember, if the public offers up gold, who's to say the Fed will not buy it itself in order to maintain the ‘correct’ amount of gold and maintain a supply that will empower economic control. It could be that the Fed may offer up the first 1,000 tonnes but the remaining 7,000 will more then empower them to control the gold liquidity for the dollar economy. I am suggesting that any large amount of gold, held in a MTM way will empower the Fed a high degree of control with regards to gold trade in dollars.

If there is 8,000 tonnes of gold that can be used in a MTM fashion to mop up excess dollars, the dollar will remain relatively strong in gold (low gold exchange rate)! If there is little gold, the dollar will be found weak in gold (high gold exchange rate).

Just like stock prices trade along supply and demand lines, so will gold. It will rise to a price that brings together buyers and sellers. The only difference in this system is that there will be no way to sell it short. That is what happens in the paper markets and it will not be trusted. As we all know, paper markets are but promises to pay.

But, I'll temper this with – but this is all just crazy thinking. Who is to say what the future brings.

Flatliner"a Noblesse Oblige Gold Paradigm"#14929611/12/06; 19:09:39

Ah, TownCrier, that made me laugh.

Paper gold… I guess I need to understand what is really meant by the term ‘paper gold.’ I have assumed that it was a term that covered the act of signing a contract with regards to a golden purchase. In other words, any gold transaction where a promise is given rather then actual metal. It's basically any situation where gold is promised rather then actually acquired.

Thus, the futures market falls in the category of paper gold. So does gold lending. There, the buying party is trusted to return the gold – a reverse futures contract (so to speak).

It's through the ability of making a promise and transferring that liability that gold can be sold short. When convertibility exposes the deception that the transfer of liabilities hides, no one will trust any promise to deliver.

Buying gold from USAgold is not a paper play. I do not see USAGold selling promises, but actually delivering real metal.

What? "The architectural of that operational paradigm duly recognizes and accommodates our insuperable human frailties, striving toward the perfect ideal yet striking a political balance for achievement at the very highest PRACTICABLE level of our reasonably imaginable human potential." Are you saying that – an economic system that balances the need to inflate, on one side of the system, against an asset that reacts to this inflation, on the other side of the system, is probably the best we can hope for? If so, I would say we agree.

Freegold, to me, can only occur after the deception held in the paper gold markets comes to an end. At that point, he who has gold will be free to trade it in an open physical delivery market free of the paper market overhang. Gold will really be freed from the false sense of convertibility. At the same time, anyone that owns a lot of gold will be free to do with it what they choose! If the central banks of the world want to use it to provide stability to their current type of paper commodity, so be it. With this in mind, the term ‘Freegold’ really does make sense to me.

melda laureinteresting side note.#14929711/12/06; 19:52:50

Its such an interesting discussion, pardon me if I seem to point out the interesting paradox:

...the fed can determine a reasonable auction price (much like a stock IPO) that will function as a starting point. 2k, 3k, 4k? It doesn't matter all that much because they would only sell a little gold. The idea, balance supply against demand (at a higher price). The Fed will find a balance where they can stabilize the liquidity of gold in the environment. Keep in mind that there are already many tonnes of gold held in private hands that is looking for a higher price to make it circulate. Thus, the Fed may offer up 30 tonnes, but the public may offer up another 30 or 40 or 50. Remember, if the public offers up gold, who's to say the Fed will not buy it itself in order to maintain the ‘correct’ amount of gold and maintain a supply that will empower economic control.

Usually offering lots of something for sale pushes the price down. Here the IPO goes swimmingly and the price RISES, so much others get into copycat IPO's and the FED must intervene.

My guess as to the reason for the paradox is that by this point in the hypothetical future, the HIDDEN demand for the IPO (presumably there is no real supply in quantity at the previous official paperized price) is actually enormous, such that a limited physical "float" becomes explosive.

But that is just a guess, perhaps someone else has a better view.

In regards to the question you pose at the end of #149289, if we go from a "downward manipulation environment" to an "upward" environment, all that obtains is the ability of banks to use the rising value as backing. Gold then paces inflation, but doesn't prevent it. Booms and busts would continue.

The Invisible HandWhy does the ECB wait 12 months …#14929811/12/06; 20:04:11

before publishing the reports of its annual central banking conferences?

30 May 2005 - Publication of the book on the third ECB central banking conference "The New EU Member States: Convergence and Stability"

The European Central Bank (ECB) is today publishing a book entitled "The New EU Member States: Convergence and Stability", containing the proceedings (papers, discussants’ comments and summaries of the general discussions) of the Third ECB Central Banking Conference of the same title, held in Frankfurt am Main on 21 and 22 October 2004. The contributions of leading experts in the field as well as of high-level policy-makers review the development of institutions in the Member States which joined the EU on 1 May 2004, address the potential integration consequences of currency unification and discuss the macroeconomic adjustment necessary to achieve sustainable convergence on the path to Economic and Monetary Union and beyond. The book in particular addresses aspects of monetary integration for the new Member States.

The book can be accessed and downloaded as an e-book from the ECB's website at Hard copies can be obtained by writing to the ECB's Press and Information Division at the address given below.

European Central Bank
Directorate Communications
Press and Information Division
Kaiserstrasse 29, D-60311 Frankfurt am Main
Tel.: +49 69 1344 8304, Fax: +49 69 1344 7404

GEMSTOCKSthey'll trade paper for paper#14929911/12/06; 20:13:54

Flatliner wrote: "
Paper gold… I guess I need to understand what is really meant by the term ‘paper gold.’ I have assumed that it was a term that covered the act of signing a contract with regards to a golden purchase. In other words, any gold transaction where a promise is given rather then actual metal. It's basically any situation where gold is promised rather then actually acquired.

Thus, the futures market falls in the category of paper gold. So does gold lending. There, the buying party is trusted to return the gold – a reverse futures contract (so to speak).

It's through the ability of making a promise and transferring that liability that gold can be sold short. When convertibility exposes the deception that the transfer of liabilities hides, no one will trust any promise to deliver."

The way I understand it, only a few of us dinosaurs still expect that paper gold to be exchanged for the real thing, physical gold. The rest of the world knows those paper contracts will be settled with more paper. Paper with pictures of dead Presidents will be enough to buy anything they need. Or maybe in a digital world they will be able to eliminate the need for paper. Why waste trees when electronically transmitted digits will pay for anything a man needs?

If every person on Earth had an equal share of the above-ground gold right now, in a few minutes some people would not have any and some others would have a lot. In a few months it would be back to normal, with most of the gold in a few hands and IOUs in most of the others.


The Invisible HandDoes buying gold equal ‘dumping’ dollars?#14930011/12/06; 20:16:26

[The People's Bank of China (PBOC) governor] Zhou went on to stress that the diversification would be a gradual process as ‘dumping’ dollars would stress the US economy, one of China's largest trade partners and cause large losses on their own books. A substantial selling of greenback by the PBOC would send it down sharply. In recent months, central banks in the Middle East and Europe have also considered reallocation of the US dollar portion of their reserves to non dollar assets.

I have bought gold in Belgium with Belgian francs. And in Switzerland with euro's. Did I dump Belgian francs and euro's?

Flatlinerinteresting paradox#14930211/12/06; 20:21:05

melda laure, very good point. "Usually offering lots of something for sale pushes the price down. Here the IPO goes swimmingly and the price RISES, so much others get into copycat IPO's and the FED must intervene."

Your guess that hidden demand is enormous seems to fit the general concept here.

When we think about idea that someone would sell 8,000 tonnes of gold, we immediately think that it will overwhelm that demand side of the equation. Thus, when you see my theorizing about it, there must be some hidden demand that is not obvious.

What is an observer to think? Do they not go into the futures markets because the gold is available there?

It seems to me that it is well understood that physical gold is not delivered in the paper markets, or, all those central banks around the world that are actually building their reserves, would simply put in an order and take delivery. With a click of a mouse, they would hit their gold reserve goals and get on with business.

Thus, one might conclude that those that want large amounts of gold either go straight to the source or they buy it privately from some big store. You know, some private auction. Unfortunately, when you look around the globe, there are only a few large stores of gold. One, rumored to be held by the US Treasury.

Now, just like any good auction, if the treasury were to offer this gold up for bid, one would expect those central banks around the world to line up in order to get their share. Maybe, every week the Fed offers up 10 tonnes. Maybe it sells, maybe it doesn't. Maybe those holding dollars would rather keep them. But, the world will never know unless the gold is actually brought up for auction.

And yes, "Booms and busts would continue." This is most unfortunate. To me, this is the ultimate problem when someone is given the ability to control a commodity. In this case gold AND currency. The central banks will continue to play their games with the currency supply and gold supply.

The ground will always be fluid.

The Invisible HandNATO as EU/US decoupler#14930311/12/06; 20:42:08

The "transatlantic pact" guaranteed US global pre-eminence since 1945.

The ongoing global systemic crisis is a historic "passage" between two more stable eras.

The one before 15 August 1971 and the one next month after the Riga Summit?

NATO 2006 – The year of global dilution and of EU/US decoupling
Riga, November 28-29, 2006 – The upcoming NATO summit , which chose to take place on former soviet soil in order to symbolize the success of the North Atlantic Treaty Organisation, is likely to be remembered as the Summit where two opposite trends thrust the Alliance into the ongoing global systemic crisis, and as the symbol of « "the end of the western world we have known since 1945".
This is an example of the fact that the ongoing global systemic crisis does not convey catastrophes and problems only; it is a historic "passage" between two more stable eras. But the process will often affect the players themselves in an unpredicted (though not unpredictable) manner; indeed a dominant player can manage to have a decision of his own adopted, and end up unpleasantly surprised by the real consequences of this decision. The invasion of Iraq is there to illustrate this feature. As regards NATO, part of the trends described by LEAP/E2020 belongs to the same logics, with reforms initiated by Washington likely to result in a major weakening of the Alliance and of Washington's strategic weight in Europe and worldwide, and, in the end, in the tearing apart of this "transatlantic pact" that guaranteed US global pre-eminence since 1945.

The Invisible HandFreegold transition process#14930411/12/06; 20:59:03

First, they discontinued the M3 publication.
Eight months later, they are quarrelling about money-supply with their ECB counterparts.

The Fed publishes data on money supply and has in the past set targets for money supply growth. But it abandoned that practice when a statutory reporting requirement lapsed in 2000 because the relationship between money supply growth and the performance of the U.S. economy had become unreliable.
The rapid pace of financial innovation in the United States is one reason for the instability of the links between measurements of money supply and aspects of the economy, Bernanke said. Overseas holdings of a substantial portion of the U.S. currency has also contributed to this instability, he said.
Bernanke's comments come on the heels of a warning by ECB President Jean-Claude Trichet against completely rejecting the use of monetary aggregates by central banks as a tool in setting policy.
"A model of monetary policy that includes no role for money is incomplete in some important respects," Trichet wrote in the Financial Times on Thursday.

What was that again about M3? Ah yes, publication discontinued.

Discontinuance of M3
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.
Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).

And now 8 months later, we notice the consequence of this decision.

Let's see what happens in Riga.

The Invisible HandDon't wait for Riga Nov 28-29#14930511/12/06; 21:09:05

Next week-end Melbourne G-20 meeting

Sydney, Nov 13, 2006 (ACN Newswire) - There will be protests, lobbying, a lot of noise and some big issues discussed at next weekend's G-20 meeting in Melbourne.
China, the holder of the world's biggest financial reserves (approaching one trillion US dollars, which is more than the GDP of the Australian economy), has officially confirmed that it is diversifying its currency holdings away from the US dollar.
The issue will be raised at the G-20 meeting if only because of the presence in Melbourne of US Federal Reserve Chairman, Dr Ben Bernanke and the head of China's Central bank (the People's Bank of China) Zhou Xiaochuan. Also attending will be the President of the European Central Bank Jean-Claude Trichet, and the Governor of the Bank of Japan Toshihiko Fukui. Deputy US Treasury Secretary Robert Zimmit will attend along with the deputy to UK Chancellor Gordon Brown and the deputy Governor of the Bank of England.
All will want to discuss the implications of the disclosure of the new China policy which has been widely speculated upon but up until last week not officially acknowledged by the Chinese authorities.

Goldilox"New" Charts#14930611/12/06; 21:17:12

We all have our favorite charting sources, but my favorite FOREX site has recently added some trend line drawing tools and the ability to overlay charts.

Just thought I'd pass on the news.

Click on any of the listed comparisons for a chart and then select it in the "Instruments" pull-down menu.

Lots of views and tools available.

GoldiloxGriffin Interview#14930711/12/06; 21:28:00

For those who missed the audio interview with G. Edward Griffin at FSN a couple weeks ago, Mary has posted a transcription.

Interesting background on the "Creature from Jekyll Island".

GoldiloxDON'T BET ON GRIDLOCK#14930811/12/06; 21:34:33


Now that the Democrats have likely taken control of both houses of Congress, some on Wall Street are cheering the return of government "gridlock." The idea is that in a divided government each party stymies the other, resulting in no new legislation and no need to reformulate business plans. Companies and investors feel more comfortable with the devil they know. As legislation often does more harm then good, gridlock can be seen as being friendly to business and good for the economy.

However, my fear is that we actually get something far worse: bi-partisan cooperation. The most likely result of both parties "working together" is Democratic support of Republican pork, in exchange for Republican support of Democratic pork, which will wreak further havoc on the country's already dismal balance sheet. In addition, grandiose and ill conceived pet programs on both sides have much better chances of actually being passed. The last thing we need is Democrats and Republicans actually working together.

By 2008 the country will likely be in a deep recession squarely blamed on the Bush administration. This will set the stage for the Democrats to recapture the White House with a strong mandate for change and a supportive legislature. If the "free market" and "laissez-faire" rhetoric of Republicans are discredited, then the big government Democrats could be perceived as the solution. If so, look for a potential President Hillary Clinton and Speaker Nancy Pelosi to summon the ghost of FDR and conjure up another New Deal. Such fiscal activism, especially coming at a time when our nation can ill afford it, will cause the recession to be a whole lot deeper and last a whole lot longer than might otherwise have been the case.

The main problem however, is that the real economic damage has already been done, under Clinton with the technology/internet bubble and under Bush with the housing/consumption bubble. As a result, our highly indebted, de-industrialized economy teeters on the brink of collapse, with nothing but the perceived political expediency of foreign central bankers temporarily propping it up.

The fact that so many on Wall Street are oblivious to the political storm brewing on the horizon is yet another example of the head-in-the-sand complacency that rules the day. However, based on the seemingly benign current economic statistics, the Republicans should have done much better. Rather than merely attributing the poor showing to Iraq or to personal scandals, perhaps it is evidence that the economy really isn't as good as these phony statistics purport it to be. Of course, it wouldn't actually dawn on anyone on Wall Street to actually connect these dots.

At least precious metals traders seem to be getting the picture. Gold's sharp rally today following the news that the Democrats regained control of the Senate shows that the inflationary implications of rampant government spending are not lost on everyone. The correction is clearly over, the lows are in, and a new high in gold is likely sooner than just about anyone thinks.

The Invisible HandThe great debates#14930911/12/06; 21:45:59

Smoke eurodope -
Another reason to save in Freegold, not in currency

Inflation-targeting is not so different from the old gold standard
(this poster's position being that Freegold is indeed very different from the old gold standard)

In essence, the disagreement revolves around the sorts of things a central bank needs to look at and control in order to ensure continuing economic stability.
Specifically, M. Trichet thinks money supply has an important role to play
whereas Mr Bernanke thinks money supply is next to useless when it comes to interest rate decisions.
Ben Bernanke may well sign up to Milton Friedman's famous dictum that "inflation is always and everywhere a monetary phenomenon", but Mr Bernanke doesn't think this is enough.
These comments reveal a disagreement about the role of monetary policy that goes back over almost a century.
Both views stem from economic developments in the 1920s and 1930s.
This is more than just a historical debate.
Which approach is more likely to succeed? All monetary regimes seem, eventually, to come unstuck, hence the constantly changing approach of central banks over the
past 100 years.
Abandoning money supply altogether might, within European circles, be seen as sending "the wrong message". But to claim that inflation-targeting is anything new would also be stretching history a little too far:


and, given the ups and downs of interest rates in recent times, is increasingly looking like the "stop-go" policies of the 1960s.

Solved: the mystery of the crumbling €50 notes
THOUSANDS of Germans have been stuffing euro notes up their noses — and destroying not only their health but also the
currency, police believe.
They say that the mystery of why euro notes have been falling apart since the summer — many look moth-eaten after only a day in the pocket — is down to an increasing use of crystal methamphetamine.
In Germany this drug is fast replacing cocaine as the illegal party substance of choice.
The Bundesbank, which normally takes damaged currency, has been very reluctant to take these notes back.,,3-2451668,00.html

The Invisible HandDemocrat-led Congress increases existing Systemic Risk#14931011/12/06; 22:27:33

``The difference between death and taxes is death doesn't get worse every time Congress meets." – Will Rogers
However one must be reminded that any belligerent approach by the incoming leadership in dealing with the controversial trade or currency aspects essentially translates to systemic risks. This leads your analyst to even be more bullish on gold and on Asian currencies.

The Invisible HandNorwegian inspiration for the Chinese?#14931111/13/06; 02:54:58


13-11-2006: China think-tank joins call for FX diversification
China should diversify its US$1 trillion (RM3.68 trillion) in foreign exchange reserves by building up strategic reserves of crude oil, important metals and bulk commodities, a government think- tank said in a report published on Nov 13.

The Invisible HandNo more gold backing for paper#14931211/13/06; 03:13:15

I have been waiting for the consumer to cave in for many months now. Given past reversals in consumer spending one must question if the latest downturn is the real deal or just another outlier.
No, this is NOT the golden age of financing, unless of course you have been investing in gold on account of it. Consumer credit did turn down, but the next question (assuming this is not an outlier) is: "Will total credit follow?" For a county so totally hooked on "borrow and spend" the consequences will be enormous when (not if) it happens.


The fact that "risk" is systematically being taken away from all paper indicates that gold does no longer can / want to back this.
Gold wealth cannot be constructed on a paper morass

HenriPerhaps this explains the buildup in the east mediterranean#14931311/13/06; 08:59:11

Political collapse of the Lebanese govt would destabilize the region to say the least. Although its not as if lebanon was ever a bastion of stability over the last 20 years. Military might always converges on areas that are existing in apparent chaos. Like vultures to a kill. They circle above the field drawing in other predators to divide the spoils. No political entity is enthusiastic about perpetuating the myth of a cogent political arrangement in Lebanon...perhaps because they have no oil.
HenriLooks like kitco charts buggered again#14931411/13/06; 09:11:29

Bottom fell out of the markets for gold silver and platinum????
Must be a mistake. Gold at $424.30??? Silver at $7.07???
If so, buy!

KnallgoldFlatliner#14931511/13/06; 10:18:06

Thank you for expanding in your last posts,I think I see clearer where you stand.Ah if we all could meet on a big oaken table in a real castle some day and debate without needing to read between lines...

"Central to FreeGold is its cut of the link to money/currency machinations/manipulations. Gold-simply a reserve,the most precious one though.Not a "wealth proxy"(an oxymoron) like the currencies, Goldpapers,etc.The original!" Just my words btw.

As for the issue of Gold manipulation,the term FreeGold indeed has lead often to confusion (I'm guilty as well).In fact,it just means "Free-of-derivatives" Gold trading.Of course it will be still manipulated by some parties,but a) the devastating and ever present paper pressure will be gone and b)a big incentive for manipulation will be removed:

As its a natural law that "money will always get worse",it got apparently imminent that also the need/incentive to put pressure on Gold will always grow with time (to guarantee convertibility).In FreeGold,Gold won't be official money anymore,meaning that any and every "promised" convertibility will be cut.This removes a BIG and ever present incentive to meddle in the Gold market.And they can still keep the printing press as you argued.

Not even an incentive to manipulate upwards,Gresham's law will do the trick on its own.Primarly,CB will just have Gold on reserve,for reasons you have stated.IMHO no need either to throw it in the FX market,to make the currency weak or strong.They could,but why?And why selling Gold at all?Only if they have to-nothing new.You don't sell your wealth!"You might never want to sell your Gold again"-FOA(?).

The FX markets will just function on its own,decoupled! Though,for the start,there has to be some amount of Gold re-balanced in the CB system.You gave several scenarios for the FED for the transition.

And the people will keep the right to own Gold as well."Gold is private property",FOA et al were very clear about this crucial part of the foundation FreeGold rests on.That theres no (fix-ed) convertibility doesen't mean we can't trade it for paper currency whenever we want (the new physical-only Gold market EBES will come, as the finale!Another part of the foundation)

"an economic system that balances the need to inflate, on one side of the system, against an asset that reacts to this inflation, on the other side of the system, is probably the best we can hope for? If so, I would say we agree"

Beautiful sentence of yours I'd like to close with."We return to balance"--a banker

Yes!Because we have to!

GoldiloxMuch ado about nothing . . .#14931611/13/06; 11:02:17

in the gold market today, with swings from $424 to $434 and back again.
Flatliner"Free-of-derivatives"#14931711/13/06; 11:23:20

This is close to my conclusion found in yesterday's forum. If there is a difference, I would include that gold must also be free-of-over-commitments to qualify as Freegold.

You ask "IMHO no need either to throw it in the FX market,to make the currency weak or strong.They could,but why?"

I would contend that this is exactly what they want to do when Freegold arrives. When I say ‘they’, I mean those that manage currencies as a unit of trade in an economy. If wealth is a measurement of how much gold you hold, then in an economy, the currency may be measured against gold availability.

Consider… Freegold has arrived and you are a businessman looking to add a few ounces to your wealth. The way you have been doing this is by, say, producing Olive Oil. There are 12 countries around the globe that have reasonable climates for Olive trees and you are planning on growing your gross output, over the next 20 years, so that the 10% that you convert into gold, twenty years from now, will get your twice as much gold. Is this possible? Or, better yet, where would you invest your capital, today, with hopes of reaping the rewards 20 years from now? This leads too…

If the central bank for some country can manage the rate of currency inflation against the use of the currency supply in that economy, they will have a stable gold exchange environment. The price of gold may NOT rise or fall in that region. If the currency is functioning, there may be little demand for gold. Thus, next to no gold will need to be traded to mop up surplus supplies.

What does this mean to the businessman? It means confidence. If the currency supply is balanced against its use, there will be no price inflation – no rising gold price – in that economy (or deflation). This means that, if the management is good, the businessman will know that the investment in the Olive orchard will function as intended 20 years from now.

In an environment where more currency is printed then that which finds function in the economy, the surplus will be exchanged for gold driving the gold price up. The Olive Oil producer's investment, in that type of environment, is effectively deflating. In this type of environment, all he can hope for is to sell his Olive farm for a greater profit – or that the price inflation of other assets will equal with the appreciation of the gold exchange rate in that economy – which is never really is. But, the problem here is that he's forced to sell to actually realize his profits. Thus, his profit stream for that businessman ends.

I would contend that a stable inflation rate at 0, as a measure against the price of gold exchange, in an economy is vital in order to build a successful business base. This will drive the gold holding central banks to use gold to provide this balance. An economy that maintains this steady exchange will be one that can build a stable business base for the long haul. They will attract the Olive orchard and it will stay.

FlatlinerAh...#14931811/13/06; 11:25:42

My oppologies, Knallgold, for the absence of your address in the previous posting.
The Invisible HandFreegold transition process#14931911/13/06; 11:53:46

- an orderly and gradual process in which gold evolves into a new wealth status


We are not concerned here with the implausible scenario of a Soviet-style collapse of the American superpower, perhaps induced at the hands of the rising East. Nor is it about the destruction of the US. Rather than thinking in such unrealistic black-and-white terms, the reader should consider whether the current US global position of dominance is at risk, not the existence of the US as a superpower.
Russia, China, India and the rest of the rising East have never fully trusted nor supported that liberal order, are not members of its governing institutions, have no say in the decisions of those institutions and do not see themselves as having any real stake in that liberal order, and they are actively reverting to the rigid bilateral long-term supply contract in their energy dealings across the globe, This locks up (and makes inaccessible to the US-led liberal order) a increasing portion of global supply and reserves.

The dollar-recycling with the systemically growing dollar volumes is the basis for the global hyper-price-inflation. At the same time GOLD is evolving into its WEALTH STATUS.

But the AngloAmerican dollar-industry continues to view gold as inferior to the dollar, thereby promoting VIRTUAL PAPER WEALTH.

WORRIED ABOUT THE HOUSING BUBBLE? You should be, but don't let it monopolize your agita. There are four other bubbles also deserving of attention, according to America's Bubble Economy: a stock-market bubble, a foreigner-supported-dollar bubble, a consumer-debt bubble and a U.S.-debt bubble. When the five collide in a "BUBBLEQUAKE," the book's authors predict, the air will rush out of the pumped-up U.S. economy, deflating the average American's assets and standard of living.

Paper AvalancheAvoiding Credit Contraction At All Costs#14932011/13/06; 12:03:11

I heard on satellite radio this morning an ad from a mortgage company offering a $300,000 mortgage for just $63 / month (not a typo, sixty-three dollars per month). Apparently the rate is just 0.25% and it is an interest only mortgage for the first TEN years.

Imagine if John and Suzy consumer are able to effectively make their mortgage payment "disappear." Viola! Here comes a fresh batch of fiat liquidity added to a faltering credit bubble. I wonder if this type mortgage could go main stream the way the interest only products did over the past 3 years.

How much longer do you think the friendly people who trade their labor / products for our paper currency will continue to do so given such wreckless fiat creation? A more interesting question might be will there be a fourth stimulus if this recent development is the third of three initential stimulative efforts since 2001 (first, stock market - second, housing refi / equity extraction - third, elimination of mortgage payment via negative amortization)?

This game never ceases to amaze me.

Take care.

mikal@Paper Avalanche#14932111/13/06; 12:19:07

Re: "A more interesting question might be will there be a fourth stimulus if this recent development is the third..."
No. Lending standards have been lax as a prelude to a
different paradigm.
Tighter lending standards and new bankcrupcy laws in the last year or so have not been
as severe as need or expected. This too is part of the intentional looseness in credit standards, with accompanying flood of liquidity that I feel
was made to fail at a certain point. (They're looking the other way for a reason- the sudden market changes and paradigm shifts that they're positioning for.)
What I've read of analysts commentary on these new instruments- 40, 50yr mortgages, reverse mortagages, etc
indicates they are too little, too late by a wide margin.

The Invisible HandPaulson and Britain's Brown Snub next week-end's G-20#14932211/13/06; 12:33:39

Ahr, those AngloAmericans

Or is it a sign that the new world monetary system will not be AngloAmerican-inspired?,21985,20752925-661,00.html
Late withdrawals include British Chancellor of the Exchequer Gordon Brown and US Treasury Secretary Hank Paulson.
Mr Paulson has decided to stay in the US amid fallout from the Republicans' drubbing at last week's mid-term congressional elections.
He will be represented at G-20 by his deputy, Robert M. Kimmitt.
Mr Brown met Mr Costello in Singapore last month but is sending his understudy, chief secretary to the Treasury Stephen Timms.

MOSCOW. November 9 (Interfax) - Russia's gold and foreign currency reserves were at $274.2 billion on November 3, up from $269.1 billion on October 27, the Central Bank said in a press release. [RU EEU EUROPE ASIA EMRG AA ECI MCE LDC EUR CEN GOL GDM FRX]

The world's most powerful central bankers will meet in Melbourne next weekend to try to pry open the global oil cartel, with the aim of bringing down petrol prices at the pump.
As the oil price edges back up towards $US60 a barrel, they want to loosen the world's tightly bound oil and gas markets and avert a destructive scramble for energy resources.
"We would like there to be some agreement that cartels should not operate in open global and competitive energy markets," Mr Costello [Australian Treasurer Peter Costello} said. The world's biggest oil producers will be at the table, including the most important member of the Organisation of the Petroleum Exporting Countries, Saudi Arabia. "We're going to have Saudi Arabia and Russia there, the big oil producers and the big consumers, the US and China, and this is our concrete global action on an issue which is totally connected to the hip pocket of every Australian family," Mr Costello said.

Flatliner@The Invisible Hand - TAKE ON OIL#14932311/13/06; 13:43:26

Your clip stated: "We would like there to be some agreement that cartels should not operate in open global and competitive energy markets,"

Flatliner's Translation – As we have done in the gold market, we wish to do in the oil market.

The surplus of investment dollars created through the uncontrolled printing of the US dollar, and the easy created provided by the US Fed, is now flowing into the public oil markets creating a situation in where the majority settle, at or before contract maturity, for cash rather then actual physical delivery. Because of this, the old means, by which the cartel set the price no longer functions as intended. We, as a cartel of central banks would like to empower the oil cartel, once again, to set a price through the means of private contracts rather than public ones. This agreement will empower the central banks of the world to offset speculation demand in the oil futures markets through a combination of oil leases based on our surplus of dollars on reserve.

This action will be perceived by the average Joe as a good thing. Oil prices in US dollar terms will fall. Those that actually sell oil in this public market will see their profits drop. US Corporations that compete with you in this open market will be faced with added liquidity that they did not expect. Their profits will drop, yours will not because you will not be selling oil for dollars.

If you are unwilling to sign private contracts with us for oil, we will still liquidate the open public markets just like we did with gold. It is in your best interest to seriously think about signing these private contracts rather than supporting the dollar through public markets.

Sierra MadreGold on sale tomorrow....#14932411/13/06; 14:50:05

Gold is quiescent...not doing anything...ominously quiet.

Gentlemen, prepare you wallets. Gold on sale at $604.90 tomorrow noon.


USAGOLD Daily Market ReportPage Update!#14932511/13/06; 15:43:08">
The Daily Gold Market Report has been updated.

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

MONDAY Market Excerpts

November 13 (from Reuters) -- Gold prices fell on Monday, as a rise in the dollar and weaker oil prices encouraged investors to sell, though the correction since last week's highs has not changed bullish market sentiment.

But the market was poised for volatility as the year draws to a close, traders said. A rally in early overnight trade had fizzled by the time New York floor trade opened. The COMEX December gold contract settled down $4.30 at $625.80.

Technicals and expectations for a slower U.S. economy were expected to keep investors bullish toward gold, which rose more than 10 percent in 2-1/2 weeks before retreating on Friday.

"From here, we still favour the upside in gold. Positive weekly closes will do much to encourage technical traders and we still believe investors have inclinations to get short the dollar and that they will look to buy gold as well," said John Reade, analyst at UBS Investment Bank.

But the performance of precious metals in the short term might be determined by base metal prices, he added.

Copper fell to a four-month low and lead tumbled 12 percent as people took profits on growing worries about rising stocks. "The combination of lower crude oil prices and the base metals decline is really a powerful enough cocktail to get the market to take some profits," said James Steel, senior analyst at HSBC.

"I think you could reasonably argue that a correction is in hand without undermining the overall bullish stance of the market."

On Monday, a $1.01 slide in NYMEX December crude to $58.58 a barrel eroded interest in buying gold as an inflation hedge, while a slight firming of the dollar to $1.2802/05 per euro upped the cost of buying bullion for non-dollar investors.

The dollar reversed course after lifting gold last week, when it came under pressure on comments that China planned to diversify its estimated $1 trillion in reserves. There was speculation that China could switch to owning more gold.

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

GoldiloxCovert Olive Branch?#14932611/13/06; 17:59:38


Now I'm going to go out on a limb and suggest that the following "olive branch" was a peace offering to the international financial fraternity this past Friday - from the besieged Bush Administration – to help smooth over the protectionist tilt of the mid term elections. The notion that this was indeed an olive branch is reinforced by its receiving "ZERO PRESS" in the cooperative [or, co-opted perhaps?] American media but did warrant mention in the British Press:

Russia and US poised for WTO deal
BBC News, Nov 10, 2006

Russia has finally cleared the last hurdle in its bid to join the World Trade Organisation (WTO).

The US has agreed in principle to approve Russia's membership, after holding out in lengthy bilateral talks

Russia and the US hope to sign a WTO accession deal at the Asia-Pacific Economic Cooperation summit in Vietnam next week...

A breakthrough like the accession of Russia to the Word Trade Organisation [WTO] – one might logically think - would normally be a prominent front page financial news item. Well, let's just say this story did garner coverage in China and Russia, too – but curiously none in North America.

Perhaps this was not the kind of message the Republicans wanted "splashed" across headlines on the heels of an election all about change.

The Invisible HandFreegold transition process#14932711/13/06; 19:45:15

Money and Economy

Nothing new under the sun: bureaucrats look only at the short term

It appears more and more it that the whole "thing" looks like the external management/administration of a Monopoly-game: money – economic activity – players.

This enables us to better understand the role of gold.

It appears that the present (and future) management/administration is only taking into account what will happen in the short term.

I think I can conclude from this that Freegold is ready.

It seems as if the discipline required for the long-term planning of the world dollar-system (the dollar-International Financial and Monetary System (IFMS)) can no longer be brought up.

Paulson and Britain's Brown snub next week-end's G-20.

Chinese Premier Wen Jiabao urges writers, artists to speak TRUTH "Chinese writers and artists should reflect reality in society and encourage people to seek the TRUTH," Premier Wen told delegates of art and literature organizations Monday.

Ac Harry Hazlitt concluded 60 years ago:
the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups

Hazlitt concluded that, after he had said that:
the whole difference between good economics and bad lies in this. The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.
The distinction may seem obvious. The precaution of looking for all the consequences of a given policy to everyone may seem elementary. Doesn't everybody know, in his personal life, that there are all sorts of indulgences delightful at the moment but disastrous in the end? Doesn't every little boy know that if he eats enough candy he will get sick? Doesn't the fellow who gets drunk know that he will wake up next morning with a ghastly stomach and a horrible head? Doesn't the dipsomaniac know that he is ruining his liver and shortening his life? Doesn't the Don Juan know that he is letting himself in for every sort of risk, from blackmail to disease? Finally, to bring it to the economic though still personal realm, do not the idler and the spendthrift know, even in the midst of their glorious fling, that they are heading for a future of debt and poverty?
Yet when we enter the field of public economics, these elementary truths are ignored. There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: "In the long run we are all dead." And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.
But the tragedy is that, on the contrary, we are already suffering the long-run consequences of the policies of the remote or recent past. Today is already the tomorrow which the bad economist yesterday urged us to ignore. The long-run consequences of some economic policies may become evident in a few months. Others may not become evident for several years. Still others may not become evident for decades. But in every case those long-run consequences are contained in the policy as surely as the hen was in the egg, the flower in the seed.

I said:
It appears that the present (and future) management/administration is only taking into account what will happen in the short term.

Hazlitt said:
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups

Is the snubbing by Paulson and Britain's Brown of next week-end's G-20 the thing which indicates that it's this time?

Ten BearsFunnymoney and Trainwrecks#14932811/13/06; 20:27:02

Disgruntled Federal Reserve Customer Lee Rogers

Former World Bank Vice President, Chief Economist and Nobel Prize winner Joseph Stiglitz has predicted a global economic crash within 24 months - unless the current downturn is successfully managed. Asked if the situation was being properly handled Stiglitz emphatically responded "no," and also drew ominous parallels to the development of the NAFTA Superhighway and the North American Union.

More proof of this can be seen with the financial war that has been waged on America's middle class over the past 50 years. In the 1950's a male blue collar worker by himself could make enough money to support a family. Now in the early 21st century both the father and mother have to work in order to sustain the same standard of living. The combination of currency devaluation and the rush towards globalization has left America's middle class the big loser.

I'm looking at a short term target of $700 an ounce gold and $15 an ounce silver. If you are planning on buying physical gold or silver bullion don't bother waiting for pull backs. This bull market has a long way to go, so if you buy consistently and hold for the long term, you'll be rewarded greatly.
Bob Chapman Train Wreck of the Week - November 11 2006

We, as stated for four months, we see an Iraq and Afghanistan withdrawal initiated by elitists from behind the scenes. They control both parties and their plans supersede all others.

Finally after years of exposing government statistics as a fraud we have Wall Street and the Fed admitting that they are a fraud.

Gandalf the WhitePrognostications #14932911/13/06; 22:40:51

Sierra Madre (11/13/06; 14:50:05MT - msg#: 149324)
Gold on sale tomorrow....
Sir SM
Me thinks that you have errored in one of those digits !

TownCrierHEADLINE: Dow's high doesn't reflect economy#14933011/13/06; 22:41:24

Nov. 14, 2006 -- For decades, this index of 30 major companies was considered the best indicator of Wall Street's performance. I'm not sure even that's true today. Although the Dow has surpassed the record it set in the last boom, the Nasdaq is still off its peak...

...the Dow has become an unreliable indicator of the broader economy.

Why did the Dow surge this year? One reason was a huge wave of mergers and acquisitions, often tax-free. This further consolidation of corporate America strengthens the largest players directly and indirectly. It means something very different to most Americans.

For example, AT&T - itself a product of the takeover of the old Ma Bell by SBC -- is acquiring Bell South. The deal will mean huge bonuses for the investment bankers and lawyers who make it happen.

Such mergers have helped ensure that bonuses for investment bankers will rise 10 to 20 percent this year, according to the Wall Street Journal. A first-year associate at a major investment bank makes $300,000 to $450,000 a year. A managing director can pull down $3.8 million.

...But the acquisition of Bell South also means that 10,000 jobs will be eliminated. And that's just what was promised to Wall Street. Typically, as these deals fail to deliver, more jobs must be cut.

...Instead of making things, American workers increasingly spend their time at jobs revolving around debt and other "financial services." Pay is similarly wanting. Most Americans have seen their wages stagnate while the Dow was rising and CEO compensation was hitting records.

Those outcomes are in the economic interests of Dow companies, which operate in the global economy, where low labor costs mean higher stock prices and executive bonuses.

Once upon a time, it was possible to imagine a broad investor middle class - I called it Shareholder Nation - where most Americans owned shares and their interests worked in concert with Wall Street. Embedded was an ideal of shareholder-as-owner, where we took a stake in a company we cared about and watched as it grew over years. That dream has proven hopelessly naïve with the end of the bubble, ongoing corporate scandals, and the disproportionate damage to small shareholders.

The big players have the power in this casino, and every stock represents a one-night-stand to be thrown aside for the highest bidder. If the loss includes venerable companies, talented employees and wealth that it took a century to build - hey, the Dow is hitting records.

Yet the Dow still stands for something: the increasing divergence in interests between average Americans and the biggest corporations.

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

Now you can stop wondering why it is so hard to keep up with the Joneses... even when Mr. or Mrs. Jones are merely "a first-year associate at a major investment bank".

What's left for the shareholders? Choose gold.


GoldiloxIncome Disparity#14933111/13/06; 23:23:40

@ TC,

With income figures reported as "averages", most Americans miss this huge disparity, which has been quietly growing since the Reagan years - with a short paper divergence during the dot-com bubble.

Factor out the huge bonuses mentioned in the article and tell us how the great unwashed or even the American-dream middle class are really faring.

Better yet, report the MEDIAN income, especially now that Dubya's tax cuts put everyone over $60K in the top tax bracket, and eliminated the next one down.

IMO, the have vs. have-not battles of the Third World are coming home to roost on the globalist perpetrators.

mikalEntitlement spending unsustainable#14933211/14/06; 07:01:45 Demographic Reality and the Entitlement State by Ron Paul
November 14, 2006
Congressman Paul sees an end to the entitlement status quo.

GoldiloxUSDX#14933311/14/06; 07:04:32

Gap down at the open, trying to break thru support at 85.
GoldiloxEntitlement Spending#14933411/14/06; 07:22:09

Not all entitlement spending is "gifted", although the way the SSI money is diverted to the general fund, one would think so.

The biggest "gift" is the Medicare Suppliments bill, that guarantees price supports for Big Pharma at public expense. "What the market will bear" has no meaning when gubmint steps in hands out pork.

Even during Clinton's dot-com boom years, they only achieved the appearance of a balanced budget by "borrowing" about $100 billion a year from SSI proceeds.

Too bad no one is enterprising enough to start a public referendum on allocation of funds "supposedly" collected for a specific purpose, but that has about as much chance in Washington as tying gubmint retirements to SSI.

If the law was written in a way that voters could see their representatives are either "for 'em or agin 'em", you would see an even bigger turnover in the next election.

FlatlinerTurkey's most important wealth lies underground#14933511/14/06; 09:35:30

Recently, a UNESCO-sponsored meeting was held in Ýzmir on "International Geological Studies." 70 academics from 16 countries discussed Turkey's mineral wealth and gold in particular. The common argument was that if the gold reserves are exploited properly, Turkey's future will indeed be bright.

Professor Ýsmet ... z from Dokuz Eylül University's Geology Department said Turkey was rich in gold reserves and added: "Ovacýk is very profitable. Exploitation in Kýþladað and Efem Çukuru is just beginning. If a country succeeds in exploiting its mineral wealth, that country will not face economic hardship. In gold extraction, modern and environmentally friendly technology is now used. We pay between $6 and $10 billion a year for oil. We can use gold to counterbalance this loss. Apart from the four known gold reserves, there are around 15 more gold reserves waiting to be exploited. They are waiting for permission." Waiting for permission is just a waste of time.

At the same meeting, the University of Oslo's Professor Nigel Cook made an important remark: "Turkey can save its economic future by exploiting is gold mines. Exploration continues: I believe the results will be good."

Flatliner – These guys seem to give more value to gold then the international exchange rate in dollars implies.

FlatlinerForeign Gold Miners Could Be Set to Prosper in the Red East#14933611/14/06; 09:52:15

According to the statistics of the China Gold Association, gold production in China was about 224 tonnes in 2005. China‘s gold production is forecast to be 240 tonnes this year, up 7% from 2005.

Not only is China's national gold industry expected to get a strong boost, but successful foreign companies active in China will also contribute to growing production in the years to come, according to the report.

The China Geological and Mineral Survey Bureau estimates the gold resources of China's 10 major provinces to be over 11,000 tonnes and the country's prospective gold resources at around 15,000 tonnes.

According to statistics of the China Mining Association, Shandong Province in east China is the richest area (approximately 40% of total proven reserves), followed by Shaanxi, Sichuan, Gansu, Yunnan and Guizhou. Production is centred on the eastern provinces where 70% of known gold deposits are located.

But most of China's production comes from small, underground mines with little mechanization, according to the report. Only a few mines produced more than 100,000 ounces annually, but have an annual average closer to 16,000 ounces.

"Missing many of the sophisticated techniques of the western approach including highly sensitive geochemical and geophysical survey as well as high-end interpretation of satellite imagery, China is relatively undiscovered. This offers a high potential for successful exploration," the report noted.

Flatliner – Trying not to read too much into this article. But, I guess if I had a trillion dollars in an environment where metal could not be found, I would invest in infrastructure and dig it out myself. Seems China is on this path. We all know Russia is on the same path. The previous article about Turkey shows that someone is trying to drum up interest there.

Dollars are easy to obtain, gold is not.

FlatlinerChinese individuals take a shine to gold#14933711/14/06; 09:57:58

This article says: "Rallying gold prices have sparked a passion with Chinese individual investors, who are not legally allowed to trade on the Shanghai Gold Exchange." Is there anyone in the forum that can expand on this? If individual investors are not allowed to trade on this exchange, who does?
FlatlinerLegal change would keep baht fully backed by foreign reserves#14933811/14/06; 10:08:18

A Currency Act amendment will leave the baht fully backed by foreign reserves, according to Chanchai Boonritchaisri, senior director of the Bank of Thailand's Legal and Litigation Department.

… (after a bit of BS) …

Mr Chanchai said the amendment was also aimed at helping the central bank to mark-to-market foreign reserves on a monthly basis so its account would better reflect market trends.

Current law permits the central bank to mark-to-market its foreign-reserve accounts once at the end of the year, running the risk of valuation losses.

"By making accounts better reflect the market, the central bank will be more careful with foreign-reserve management," he said.

Gandalf the WhiteNOW look what you did ! Sir Goldie !!#14933911/14/06; 10:41:36

The US$ did break the 85 level and then the PPT was awakened and PUMPED it up a full half point !

Topazalt currencies PoG.#14934011/14/06; 10:41:58

Todays action would indicate we're back in Currencyville with Gold it should be in the middle of a non-delivery month ie: full-blown Paper mode ...beware though, at this level, Gold has left the currencies for dead months ago and any mimicry is pure paper related ...or co-incidental.
Give it Another week and we'll begin to see Golds REAL potential from a price perspective imo.

KnallgoldFlatliner#14934111/14/06; 10:45:51

Hmm,I'm not completely following the reasoning in your #149317.You imply that they rather screw with the indicator (Gold) of a rising money supply-but is this not just more of the same?"A stable inflation rate against the price of the Gold exchange"'surely this signals good times,confidence, business will invest etc..

But when the times are changing "In an environment where more currency is printed then that which finds function in the economy, the surplus will be exchanged for gold driving the gold price up." Right,thats exactly the purpose of this Golden valve,and thats why it is implemented uncompromised for the first time.To protect savings against currency depreciation,particularly in bad times,without having to resist an ever growing pressure on a formerly fixed convertibility.

This doesen't make the times good,cycles aren't dead.It will only save us through,without having to take Another final devastating hit.But manipulating the "inflation rate against the Gold exchange" by selling Gold (if I understand you correctly) is screwing with the only protection from currency depreciation.And if its possible to mop up business climate sustainable by tuning the Gold inflation rate is rather doubtful,the other side (money creation) should be targeted.

Though,in an imperfect world as we are, I see the temptation is there to meddle.But as the concept is formulated,the longevity and stability it guarantees should be incentive enough to stick to it.

After the implementation of the new monetary regime,I do see the role of CB's in regards to Gold merely as an operator/ guardian of this FreeGold market,they have sufficient Goldbacking to do it (a pre-requisite,"he who has the Gold...") and have stated it (unofficially).It would add some fresh meat to their recently diminished role in the markets.

geFlatliner - Shanghai Gold Exchange Members#14934211/14/06; 10:57:05

Exchange members include commercial banks, gold producing corporations, gold consuming corporations and mints (from a 2003 LBMA document).
GoldiloxShot myself in the foot#14934311/14/06; 11:07:45

Paulson's Pirate Toadies (PPT) love F'ing with me!
FlatlinerThanks ge. #14934411/14/06; 11:19:17

From the link, Snips:

The official opening of SGE heralded the start of a brand new era in the gold market in China, and is further evidence of the intention of our government to deregulate its precious metals market.


Trading in the SGE is limited to physically-settled spot trading, executed between members either on the trading floor or on a computerized trading platform. Trading is also limited to standardised quantities of designated fineness designed around the needs of the physical rather than the speculative or investment market.


As of 30 April 2003, all 108 members have been online with a total transaction volume of 89,984 kilograms for a turnover of RMB 8.219 billion in all and the average daily trading volume reached 731.58 kilograms.

At a rate of approximately one tonne per day, SGE's gold volumes are already equivalent to the 220 tonnes per annum of Chinese national gold demand. It is clear that not all of these transactions are associated with physical bullion, since, although it is really largely a physical market, some members must have used SGE for speculation. But with the central bank's much-diminished role in this market, all of these transactions will soon gravitate to our Exchange and will probably lead to incremental growth in turnover.

The Shanghai gold price has become an indispensable reference for China's gold manufacturers and consuming enterprises in the process of selling, clearing and price fixing. Being the most authoritative price revealing the demographic gold supply and demand, it has received great attention from overseas markets. The price has risen from RMB 83.53 yuan/gram at the beginning of SGE's operation to RMB 92.37 yuan/gram at the end of 2002 by 10.58% (the international gold price rose 8.86% during the same period of time), showing that the Chinese gold price has been quite close to that of the international market.

Four major domestic commercial banks have partly fulfilled the function of gold trading. Their active involvement in gold trading has been of great importance in establishing the market, matching supply and demand and improving the liquidity of the market….

Flatliner – I asked "If individual investors are not allowed to trade on this exchange, who does?" Looks like there are four major domestic commercial banks that trade significantly in the market. Of course, we all know that banks also provide the foundation for customers to get involved through them as speculators in the market. But, maybe not. In any case it looks like these banks are serving their purpose of providing liquidity.

Flatliner@knallgold#14934511/14/06; 11:53:44

My thinking stems from – as economies grow and shrink, the amount of currency in circulation must expand and contract. These calculations that need to be done to keep balance seems to be a function of Savings + Spending. Thus, central banks might wrestle with questions like – in a growing economy, there is need for extra currency, but how much? We know that we must expand by a curtain percentage for debt servicing, but if too much is saved, we may have to create a little more to offset this so that demand for the commodity (currency) does not make our exports too expensive on the world markets. At the same time, if foreign reserves grow too large, foreigners may take control of our monetary policy by strengthening our currency to their trade advantage. Thus, we may have to devalue their holdings against the only real measuring stick – gold. This devaluing serves two purposes 1) helps to maintain a ‘real’ honest international trading level for the currency and 2) encourages the foreign body to convert into gold.

If gold is ever revalued so that it can serve its real goal in a Freegold environment, it will be the most important tool in the central bank's tool chest for monetary control.

You should conclude that I do not see central banks as merely the guardian of the gold stash, but as controllers of the currency and protectors of the right to print currency. If they can use gold, to their advantage, to maintain confidence in their currency, that is exactly what they will do. If it involves buying and selling gold, they will do it.

My previous posting was to provide my thinking with regards to what might happen when gold is free of its convertibility constraints. My thinking leads me to believe that Freegold will empower those that hold gold. Anyone that holds gold will have wealth that can be converted into assets that they can use to their advantage. Anyone that does not hold gold will not be wealthy. We all know that central banks hold lots of gold, thus they will be empowered to work their agendas.

We are all ants in comparison. If Freegold arrives, wouldn't you like to find yourself wealthy and in a position to take advantage of opportunities?

Short answer: Gold price is not directly related to currency inflation, but rather related to gold demand.

Federal_ReservesPeak oil debate #14934611/14/06; 13:11:27

Global Oil Output Won't Peak for 25 Years, Yergin's Group Says

By Joe Carroll

Nov. 14 (Bloomberg) -- Global oil production will increase for at least the next 25 years as new drilling and refining techniques make it possible to tap heretofore untouchable reserves, according to Cambridge Energy Research Associates, the consulting firm run by Daniel Yergin.

The world probably has 3.7 trillion barrels of oil left, more than twice the estimates of geologists and analysts such as Matthew Simmons, of the investment bank Simmons & Co., who argue global output is close to a peak, said Peter Jackson, director of oil-industry research for the Cambridge, Massachusetts, firm.

``The peak-oil theory causes confusion and can lead to inappropriate actions and turn attention away from the real issues,'' Jackson said in remarks prepared for a conference call today with analysts, investors and reporters. ``Oil is too critical to the global economy to allow fear to replace careful analysis about the very real challenges.''

The late geologist M. King Hubbert, working for a unit of Royal Dutch Shell Plc, first put forward in 1956 the theory that output from a specific oil deposit or region would peak and then start to decline following a predictable curve. His ideas have gained currency as oil prices tripled in the past five years and producers struggled to keep pace with rising demand in China.

The theory is ``misleading'' and based on incomplete data, according to today's report from Cambridge Energy. Worldwide oil production will rise by more than 50 percent to about 130 million barrels a day around 2030 before output plateaus, the report said. Yergin, the firm's founder, wrote ``The Prize,'' a Pulitzer-winning history of the oil industry.

When global crude output begins to fall around 2050, the decline probably will be gradual, giving policy makers, industry and energy producers time to develop new alternatives to petroleum-based fuels, the report said.

Peak Oil Study Group

The Association for the Study of Peak Oil estimates the world has 1.46 trillion barrels of oil left and that production will peak in 2010, according to the group's November newsletter. The group's leaders include British geologist Colin Campbell, who helped popularize the peak-oil theory with his 1997 book, ``The Coming Oil Crisis.''

An August report from Cambridge Energy that took issue with the peak-oil theory was criticized by the President of the peak oil association, Kjell Aleklett, as a money-making vehicle based on proprietary data that the firm was unwilling to submit to impartial scientific review.

Aleklett said Cambridge Energy analysts were too optimistic about the ability of big producers including Saudi Arabia to increase output.


U.S. Representatives Roscoe Bartlett, a Maryland Republican, and Thomas Udall of New Mexico, formed the House Peak Oil Caucus to promote the theory among lawmakers. Bartlett and Udall endorse the peak oil association's prediction that output will start declining after 2010.

``There is not much time to act,'' Udall, a Democrat, told a House Energy and Commerce Committee panel in December. ``Since oil provides about 40 percent of the world's energy, a peak in global oil production will be a turning point in human history.''

Refiners have used about 1.08 trillion barrels of crude since the birth of the petroleum industry in Pennsylvania in 1859, according to Cambridge Energy.

Undiscovered fields probably hold 758 billion barrels, followed by 704 billion trapped inside a very hard type of rock known as shale, and 662 billion in the Middle East, according to the report. The rest of the firm's 3.7 trillion barrel total comes from untapped reserves in the deepest seas, the Arctic and places such as Canada's tar sands and Venezuela's Orinoco basin.

Fifth Time

``This is the fifth time that the world is said to be running out of oil,'' Yergin said in an e-mailed statement. ``Each time -- whether it was the `gasoline famine' at the end of World War I or the `permanent shortage' of the 1970s -- technology and the opening of new frontier areas has banished the specter of decline.''

Oil prices have climbed 24 percent in the past two years and touched an all-time high of $78.40 a barrel in July. Economic growth in China, India and the U.S. has boosted demand while hurricanes and militant attacks crimped production in some regions, including the Gulf of Mexico and West Africa.

Cambridge Energy Research Associates, which advises governments, oil companies and financial institutions on energy issues, is not the only skeptic of the peak-oil theory.

Stuart McGill, a senior vice president who oversees Exxon Mobil Corp.'s oil and gas business, dismissed the peak theory in a Nov. 1 interview as being without merit. Irving, Texas-based Exxon is the world's biggest oil company, pumping more crude than every member of OPEC except Saudi Arabia and Iran.

mikal"Terror" not out of left field#14934711/14/06; 13:23:24

Tuesday, November 14, 2006 -

Dame Eliza Manningham-Buller, director general of MI5, wants Brits to be afraid. "There are up to 30 alleged ‘mass casualty’ terror plots in operation in Britain, as well as hundreds of young British Muslims on a path to radicalization," reports the Independent. -Kurt Nimmo

Click Here For The Full Story
Mikal- This is a sampling of the literature
underscoring Goldilox assertions of complicity and duplicity in alleged "global fight against" and "terrorism".
As intelligence agencies and linked cells seem to sprout like anthrax spores on a pile of rotting fiat,
we can ask at what rate they will
dissappear if government spending ever adjusts to real economic pressure?
Replicating themselves in the future may depend
on exploiting smaller, more local social(and racial, class, etc.)polarities and/or quelling internal "dissent" &
free speech, rather than arranging, financing and fomenting so far away from view that when "terror" hits home, it seems like it came out of left field.

Flatliner@yesterday's The Invisible Hand posting that read#14934811/14/06; 13:46:04

The world's most powerful central bankers will meet in Melbourne next weekend to try to pry open the global oil cartel, with the aim of bringing down petrol prices at the pump.
As the oil price edges back up towards $US60 a barrel, they want to loosen the world's tightly bound oil and gas markets and avert a destructive scramble for energy resources.
"We would like there to be some agreement that cartels should not operate in open global and competitive energy markets," Mr Costello [Australian Treasurer Peter Costello} said. The world's biggest oil producers will be at the table, including the most important member of the Organisation of the Petroleum Exporting Countries, Saudi Arabia. "We're going to have Saudi Arabia and Russia there, the big oil producers and the big consumers, the US and China, and this is our concrete global action on an issue which is totally connected to the hip pocket of every Australian family," Mr Costello said.

Flatliner - Has anyone been able to validate this claim that we saw on yesterday? One might have thought that it would have caught people's attention here. It seems to me if Oil stops using public markets, denominated in dollars, it would be as good as opening competing markets in other currencies. Or, am I reading too much into this?

Sierra MadreCENTRAL BANK CHIEFS TO TAKE ON OIL, GAS CARTELS...#14934911/14/06; 13:57:52

So, it's a showdown between the PAPER CARTEL and the OIL AND GAS CARTEL.
FlatlinerNot Another's words, but in dialog:#14935011/14/06; 14:13:12

"Soon, European oil purchases will be made in, partial gold backed Euro's that "in US dollar terms", will be the same as 100% gold backed currency! As Another would say: Gold and oil will never flow in the same direction!"

USAGOLD Daily Market ReportPage Update!#14935111/14/06; 14:44:32">
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 chops sideways, PPI falls

November 14 (from Reuters) -- U.S. gold futures erased early gains to end slightly lower on Tuesday, after the dollar clawed back some ground lost on U.S. data showing slower economic growth and diminished inflation.

The COMEX December gold contract ended 50 cents easier at $625.30. It peaked at $630.40 before falling to $620.00. Analysts see more upside potential after gold consolidates.

The contract hit a two-month high at $638 on Friday, up more than 13 percent from a four-month low on Oct. 4 at $563.50.

The bullish case rests on strong technicals since gold broke above $600, anxiety about the nuclear programs of Iran and North Korea, and prospects for a U.S. growth slowdown.

The dollar fell against the euro and yen, giving overseas gold investors a buying incentive, after the Labor Department said its Producer Price Index fell 1.6 percent in October. That was the biggest drop in over 13 years, and three times the 0.5 percent fall expected on Wall Street.

At the same time, retail sales fell 0.4 percent last month, against expectations of a 0.2 percent decline.

"The numbers translate to the Fed keeping rates stable, if not considering cutting them. And that would only boost gold as well as weaken the dollar," said one gold dealer.

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

Belgian@ Flatliner#14935211/14/06; 14:49:11

The $-regime/system is in the proces of losing its (old fashioned) control on oil (gas) AND oil (gas)-pricing.
W're past peak $$$$$$-oil (gas). Watch how Russia's (and Iran's) oil-gas cartel is building. Many currencies will soon "bid" for oil/gas. Some will have strong (very strong) purchasing power...and others will have weak purchasing power...
Soon, the *- pricing -* of oil/gas will be clearly understood...

Flatliner@Sierra Madre#14935311/14/06; 15:04:39

Almost. I see it as a showdown between the Strong Dollar paper cartel and the MTM backed paper cartel for oil backing.
The negotiations that we saw between Russia and their big customers (last January) shows that Russia endorses the use of private contracts in its oil dealings. If Russia were to sell its oil in the open public markets, they would be under the influence of the Strong Dollar Policy stated by the US Government – but, they know that they cannot redeem their surpluses in gold (Gold is also under the influence so no one will give it up). Thus, the next best thing for them is to offer up their oil in their currency, that function will make the currency strong which they can counter through inflation. Thus, Oil in Rubbles provides the ability for them to acquire value through inflation.

As it has been spelt out in this forum before, the only one nation in the ME needed to support the dollar in the open market in order for the illusion to be complete. For that open market support, that one supporter was rumored that they received gold and security for their troubles.

If the MTM backed paper cartel were to 1- get the biggest oil producers to not trade for dollars, they could stop their support for the paper gold market. Gold would find its true value in little time empowering the MTM paper cartel to keep the price of oil stable in dollar terms. The rise in the price of gold would empower the MTM paper cartel to not only liquidate the paper oil, but also make the illusion complete by funneling oil into that market to prevent default. Effectively, the fallout from the broken Strong Dollar Policy would be contained.

Got Gold?

Belgian, I crafted the above before reading your posting. You have been gone for too long. The bread crumbs that you have left for me to follow have been quite cryptic. Thank you for your words of encouragement many months ago.

Flatliner@Belgian#14935411/14/06; 15:34:53

I have a question that I believe you are uniquely qualified to answer. By which avenue will the MTM currencies succeed at bidding for oil while gold is still contained?
GoldiloxCurrencies#14935511/14/06; 16:16:38

@ Flatliner,

" . . . as economies grow and shrink, the amount of currency in circulation must expand and contract."

Is one of the major liquidity problems based on the fact that TPB cannot bear to actually contract currencies when it might be appropriate? That seems to me to be the basis for constant currency inflation since 1913.

In my 50+ years, I can't ever remember a "currency burning" party where the FED decided to "contract' the amount of currency in circulation - book and crop burning, yes, but NEVER currency!

GoldiloxGold, the USDX and Crude Oil#14935611/14/06; 16:19:42

@ Gandalf,


Today it was Fed Bank President Poole's turn to mouth the dollar higher. Unfortunately his beard is less well kept than the Professor's, so his words brought the dollar up from .8480 to .8530, but is now in the process of giving that back.

By examination of the chart below, you will have to agree that .8500 is the number which represents the mark where the Fed cheerleaders are chanting "Hold that Line." I wonder where they got that number from since it does not adhere to any common technical study.

Gold which closes earlier on the COMEX ended off $1.60 tracking the dollar's action.

Crude again touched its support area and bounced back.


And I thought it was my taunting that rescued the sawbuck!

Belgian@ Flatliner#14935711/14/06; 16:32:31

I don't see it as an "avenue"...but rather an orderly/gradual (diffuse) "process". Let the goldprice remain contained for as long as needed. In the mean time, gold-currencies do continue to develop (position for the bidding). TIH has been posting many links to relevant (and very prudent) statements illustrating how (and where) "the process" is developping...from Kazachstan to Algeria.
WHY is there such an increase in gold-mining all over the globe while we are still supposed to percept gold being "sold" by CBs !? Paradoxal, no.

And what about the recent (prudent) exposure of the fundmental difference between ECB-FED !? Is this the end of the process or rather the very beginning of it ? Apparently, nobody sees the (free)gold-link...yet .

WHY must the (rapid) expanding russian oil/gas-cartel be demonized ?

At this time, in the transition process, the very existance of the freegold concept is enough. Give all the traveling (freegold) consultants time to reach the opportune moment for freegold implementation.

Flatliner@Belgian#14935811/14/06; 17:14:26

Wow. Those that hold dollars will be in for a rude awakening when they discover that the market place of goods no longer exists for their dollars!
The Invisible HandI won't be long ...#14935911/14/06; 17:30:58

Alert: China Dumping U.S. Dollars

Yes Flatliner,
Wow. Those that hold dollars will be in for a rude awakening when they discover that the market place of goods no longer exists for their dollars!

It won't be long before the foondamental difference between the ECB and the Fed will also occur/appear to the sheeple.

Therefore, it is not surprising that both managers/ administrators (ECB and Fed) have opposite gold policies. (And Bernanke was so stupid last week in Frankfurt as to let this appear in the open. Let's keep our fingers crossed for this week-end in Melbourne.)

To repeat: It won't be long before the sheeple will start noticing this.

FlatlinerThis is not hyperinflation.#14936011/14/06; 17:51:24

Hyperinflation is a situation where no one saves and the velocity of currency exchange drives prices through the roof.

What do you call an environment where no one spends their currency, yet the goods in the environment disappear?

Contrary to the boastings of many in this forum, we are witnessing a situation where prices are relatively stable when compared to the currency that has been created, but the function of the dollar is being removed by the removal of goods.

In other words, if someone refuses to trade, does that just skip the hyperinflationary period and end up at the end of the game at … worthless?

CamelPeak oil#14936111/14/06; 18:03:00


I'm no expert , but It may be the two studies you mentioned are comparing apples and oranges." Peak oil " I believe is generally considered to refer to conventional oil pumped from the ground in the usual way. This is what is expected to peak sometime in this decade, just as it peaked in this country in 1970.

The other sources of hydro-carbons mentioned such as the Canadian tar-sands and the Venezuelan pitch are probably not figured in the studies put out by the Campbell group. Some of these potential sources are said to have certain "problems" that may limit the amount of oil that can be recovered. The Canadian tar sands use huge amounts of water to extract the oil and it is now generally assumed that one or more nuclear plants will have to be built to heat the water

Some similar problems exist in the Orinoco deposits as it so thick it doesn't flow like regular oil. The deeper it is the more energy it takes to get it out.

I watch the Saudi output as the bell weather for the peak oil theory . They keep saying they will increase their production , but it never seems to get over 10 million barrels per day. Iraq is also said to have considerable potential to increase their output , hence the war.

The Invisible HandOpen oil trade …#14936211/14/06; 18:18:05

by acknowledging the fact Freegold becomes reality NOW!

THE world's most powerful central bankers will meet in Melbourne this weekend to PLOT TO PRY open the global oil cartel, with the aim of bringing down petrol prices at the pump.


In Dutch, there's a saying "absents have always the wrong position". (In French also.).

I am not at home and I have thus no access to my dictionaries, but in my mind, (at least one of) the verbs "to plot" and "to pry" have a negative consonance. "Negative" consonance I said, but POSITIVE for Freegold, I think.

Since Paulson and Britain's Brown will be absent …

Les absents ont toujours tort. Afwezigen hebben altijd ongelijk.

The Invisible HandFreegold transition process#14936311/14/06; 18:29:33,,1947759,00.html

What if Atlas shrugged?

Brussels gives Microsoft nine-day deadline to provide its rivals with outstanding details of its software systems or face fresh fines.
· Commissioner says she is losing patience
· Energy and finance sectors also in spotlight

GoldiloxHyperinflation#14936411/14/06; 20:31:28

@ Flatliner,

"Hyperinflation is a situation where no one saves and the velocity of currency exchange drives prices through the roof."

This may be more a question than a statement, but isn't hyperinflation the printing of money to the point of its own worthlessness, no matter how the mechanism of "price" reacts?

It seems to me that withdrawing goods from a specific monetary market may very well be acknowlegement that the price is about to go infinite in that currency.

Will listen to responses . . .

David LinkleyTo Belgian, Flatliner and The Invisible Hand#14936511/14/06; 21:37:25

I read your posts at times to get a sense of what you're thinking these days and I must say your concept of freegold seems to me to be an economic and political oxymoron at this time in history. Gold in and of itself does not provide for an enduring period of strong currencies and economic success. Gold combined with the freedom to produce, a strong rule of law, moral leadership and a strong military can result in a strong foundation for lasting prosperity. The US for instance has currently foresaken it's roots of these elements and has reached a fork in the road in which one way leads to Patriot Acts, Detention Bills, perpetual war and a virtual police state while the other "harder road" leads to a return to the Constitution sound money and eventually a new economic start. The freegold Euro and other currencies are in a similar position to that of the US dollar, they are promises to pay junk. Without the other elements I've listed, the concept of freegold will mean little as governments world wide tighten their grip on what remains of their resources (including gold). I appreciate your posts but find your enthusiasm for socialist governments with a supposed backing of 10-15% gold for their currency's to be some sort of solution in today's world a bit reaching.
mikal@David Linkley#14936611/14/06; 22:26:00

The US dollar currently spends, and for that I have much to be thankful for. In the history of currencies, rarely has anyone encountered that opportunity for as long as I have (half a century). And then to be able to have a rare look forward to an improvement on that. Something even bigger and better.
"The ability to produce" is improving overall. There are areas in the world such as the US where artifial supports to business toook the form of underpriced raw good and resource exploitation fromthe third world. This is gradually changing. Like third world sweatshops, it's a matter of awareness and willpower to overcome government sponsored slavery and oppression such as in the Republic of Ireland, parts of Mexico, many districts in China and on and on.
I don't see and don't expect "the rule of law" to go sour. The frequency and type of crime in the US is improving in some areas, worsening in others but nowhere is crime more serious than in officialdom and in the less civilized countries, whose citizens exploit every opportunity to flee their country of birth for Italy, for the UK, the US etc. But I even see movements to curtail the overreach of the executive branch and police state powers. Deregulation that favors large corporations is giving way to more incentives for small business.
Again, the change is gradual but opportunities for success are not- there is no limits on personal achievement
I see gradual heightened awareness on issues vital to the world's people and environment. Health and safety for example have been spearheaded by people in Europe. The euro is another innovation and MTM is being adopted globally. The quality of life for people in areas of previous exploitation such as Asia including India is gradually improving. Currencies can be expected to do the same IMO.

mikalMuseum for credit derivatives?#14936711/14/06; 22:50:34

New "Warehouse" For Derivatives | Financial Times | Markets
November 14, 2006
@David Linkley, Belgium, CB2, Maxwell - Good to see you and others again!
This short article is on a special place for OTC credit derivatives that is just amazing.
Here, in one place they're going to make things all better- after they've kept track of who owns what and how much and all, "regulation" is going to save the day- NOT!
Reality is it looks like a neocon staging/sorting area of a suspect, an instrument of mass financial destruction,
for the day the excrement exits the air circulator.
A cozy detention facility with one exit going to the gallows and the other easy street.
And then maybe a museum...

KnallgoldDL#14936811/14/06; 23:00:22

"Without the other elements I've listed, the concept of freegold will mean little as governments world wide tighten their grip on what remains of their resources (including gold)"

But Gold is exactly where their grip will be stopped-quasi by decree.FreeGold is as much about taking Gold away from the governement,its no more official money.CB will protect its role for stability sakes.How was that FOA citation about the hard money socialists???

And please forget the "15%" backing.Its sounds a little pregnant.No backing of the currency,no promises.Pure fiat.FreeGold will be on the total opposite for balance.

GOLD FINGERDisasters and the market#14936911/14/06; 23:17:12

Sunny days to all gold bugs!!

It's been a thrill to read all the fascinating conversations here. Some, I can agree with and others I find utterly amusing. The US elections had everyone talking or writing for that matter! I found it interesting how some will point out what we possibly have to FEAR with the new results.

In fact, I find FEAR to be the dominating emotion that prevails with this gold forum. Is it because we really have no crystal ball to show us what tomorrow brings? Are we all just trying to predict how the future will unfold?

Well, I for one really do not need to be motivated by fear. I act with my gut. I have done this all my days and it has never lead me astray. I must say it's good to have an informative gut feeling and that's what leads me to believe that if your holding actual physical GOLD in the next few months you will be better off than you are today.

I read and follow many articles from several groups. Here is one and the other is posted in the url bracket. Simple ideas for a not so simple future. So did I cause you to FEAR?? OR BE FEARLESS!! :-)


Seems like everyone has something to say...about fear!!

Flatliner@Goldilox#14937011/14/06; 23:24:00

The Wikipedia has a pretty general definition that leans heavily into the price side of things. What is interesting, is that it's clearly obvious that the rate of currency expansion and the amount of created currency is enormous. But, you can't really have the ‘dictionary’ definition of hyperinflation if it doesn't react in the prices of things.

Will the withdrawing of goods really spark an infinite run on prices? It hasn't happened in the gold market. In that market, it seems obvious that anyone wanting to ‘break the bank’ is told the metal has been lent out, come back another day. Will the same thing happen in the oil markets?

I don't know what to make of it other then the fact that it is puzzling.

Flatliner@David Linkley#14937111/14/06; 23:25:43

I apologize for my enthusiasm. I am more of an observer, or student, on this topic of gold than a teacher, or policy setter. I do not know what the future will bring and carry many of the concerns that you express. Freegold may, or may not come anytime soon (or never). Who is to say if that system will be any better than the one that we currency live under? With many things in life, it is a matter of perspective.

One thing that I am sure of is that I'm pretty open to new ideas and have a willingness to engage. That is why I spend time investigating and questioning what I see. It may be impossible to prove something perfect, but it is usually really easy to prove that something is flawed. We have all seen how so many things about the current economic system is flawed, could there be something that is not as flawed?

Overall though, I know that I'm a skeptic. The idea that a central banker would genuinely do something to the economic system that would improve my life is something that is hard for me to swallow. I will only truly believe it when I see it.

Who is to say if the coming changes will be good or bad? It seems like it could go either way. But the more I read and observe, the more actions that I see on a worldly scale that seem to hint that there really is a battle being waged for economic control between the really big players. The enthusiasm that you read in my posts could probably be likened to the drunk guy in a bar that sobers up enough to notice that, even though the room is full of people partying and carrying on like they have for hours, the bartender, band and waitress quietly cleared out and in one little corner of the room, on a solo TV, there runs a live breaking story where the international police squad is closing in on an out-of-control party at a local pub that looks very much like the one he's sitting in. Something just don't seem right.

Chris PowellChina should 'pick right time' and buy gold, economist says#14937211/14/06; 23:35:21

From Reuters
Wednesday, November 15, 2006

BEIJING -- China should buy more gold at the right time as part of a strategy for diversifying its $1 trillion in foreign exchange reserves, a prominent government economist said in remarks published on Wednesday.

The economist, Xia Bin, head of the financial research institute at the Development Research Centre, the cabinet's think tank, has long advocated more active management of the growing stockpile of reserves.

"China should use its surplus reserves to fund economic reform and important national strategic projects. China should also pick the right time to increase the proportion of gold in its reserves," the overseas edition of the People's Daily, the mouthpiece of the ruling Communist Party, quoted Xia as saying.

China has 600 tonnes of gold in its reserves.

Chris PowellSilver smashdown imminent#14937311/14/06; 23:45:29

The warning is the usual disinformation
from GFMS.

* * *

Silver to Hit $15/oz on Investor Demand, GFMS says

From Reuters
Tuesday, November 14, 2006

NEW YORK -- Strong investor buying of silver, fueled by a popular exchange-traded fund, is likely to take the silver price 17 percent higher to $15 an ounce in the next few months despite lower fabrication demand, precious metals consultant GFMS said on Tuesday.

The London-based firm said in its half-yearly Interim 2006 Silver Market Review that demand from investors remained the main driver of silver and had raised silver to a "well-above-equilibrium" price level.

"GFMS expects significant price volatility but, over the next few months at the least a bias to the upside, with a spike to $15/ounce very possible," GFMS said in its report, compiled by GFMS for the Silver Institute, a trade group for silver miners, refiners, and fabricators.

Spot silver traded at around $12.80 an ounce Tuesday afternoon. Between June and October, silver prices have gained almost 30 percent. Spot silver rose to trade around $15 in May, ignited by the launch of the iShares Silver Trust, the first U.S. silver ETF.

"There is a possibility that we will see more investor money going to the metal, particularly as gold has had a good run, and silver could also be quite a bit higher," GFMS Chairman Philip Klapwijk told Reuters.

But GFMS cautioned that as investors were building up stock through ETF, they might decide to liquate at some point, although the risk was moderated partly because of the ETF's broad ownership.

Also, slowdown in industrial demand and substantial rise in mine production growth might hurt silver prices in 2007, GFMS said.

Total fabrication demand -- which includes demand from industries, jewelry and silverware, and photography -- should fall by just over 3 percent for 2006, GFMS said. It noted that demand saw solid growth in 2005 despite the massive price increase.

GFMS's Klapwijk said a large part of silver fabrication demand is not very price sensitive in the short run.

Industrial demand was expected to post a full-year gain of 1 percent, but it should slow toward the end of 2006 and possibly fall in 2007, according to GFMS.

GFMS also forecast that demand for jewelry and silverware to fall 8 percent due to a slump in India, while photographic use was expected to drop by nearly 11 percent in 2006 due to the switch to digital photography.

In terms of supply, GFMS was expecting mine production to increase by 0.6 percent, or 4 million ounces, in 2006.

GFMS said that it was pegging greater mine output increase of around 16 million ounces in 2007, with strong growth forecast to continue into 2008.

Scrap supply was forecast to be broadly unchanged this year despite higher silver prices, while government sales should be on track for a marginal increase, GFMS said.

TopazHyperinflation?#14937411/14/06; 23:49:15

It's easy to imagine circumstances where H might come calling "IF" we have an alternative to act as a Yardstick.
At present we don't! All the other Currencies are Fiat derivatives of Buck which is the Fiat equivalent of 1/60th a Barrel of Oil.
No Bugs, this isn't the key to unravelling the enigma imo.

KnallgoldThe battle#14937511/15/06; 00:02:53

"..the more actions that I see on a worldly scale that seem to hint tthe more actions that I see on a worldly scale that seem to hint that there really is a battle being waged for economic control between the really big players."--FL

Yes!The old king is corrupt,fat and terminal.In such an environment,maybe the white knight sees the best chance in becoming the new king?

Well,I'm known for being a black pessimist,but I don't wanna cloud my thinking too much by it as I'm genuinly interested to find the truth after all.So all possibilities have to be checked.

GoldiloxWikipedia?#14937611/15/06; 01:05:57

@ Flatliner,

Pardon my surprise, but I'm not so easily convinced by the "Internet amateur encyclopedia"! They rely too often, IMHO, on definitions from those who publish just to see their names in print.

My question for the table itself, stands.

Given that inflation, and therefore, hyperinflation, by definition, is a MONETARY more than PRICE action, and . . .

We have already witnessed the dollar's devaluation of over 95% in just a few generations, should we so quickly dismiss hyperinflation as the cause and/or result?

Would removal of goods from the dollar market not qualify as recognition by those who control REAL resources that the last 5% of value could be gone in a puff of smoke and mirrors, and they don't want to be left holding the bag?

Mathematically, if we have already experienced 95% of the hyperbola, that last 5% is almost vertical in slope, and anyone who accepts this as a possibility must be pretty antsy to swap out - something we're seeing a lot of jawboning about.

Maybe we're too busy focusing on examples like Argentina, who experience the ravages of HI overnight, but dismissing the potentially different view from aboard the "Titanic" US economy - for sheer misunderstanding the slower (and perhaps, different) effects that might accompany HI in the "global reserve currency".

Don't know that any of this is true, just trying to think a little further "outside the box".

GoldiloxHyper-price-inflation#14937711/15/06; 01:22:09

The other reason I am reluctant to accept "market prices" as real indicators of inflation, is that the evidence suggests that the purveyors of inflation are using the bubble liquidity to "manage" prices (some up, some down). This flagrant manipulation causes their own indicators to be completely flawed - perhaps by design to hide the more ravaging effects of hyperbolic loss of value.

Using the "coiled spring" analogy, if it is NEVER allowed to decompress, it's only remaining option is to break from the constant stress.

Again, maybe somewhat orbital as I am trying to "think outside the box."

TownCrierNYMEX IPO... and depths of so-called "capital"#14937811/15/06; 04:26:15

November 15, 2006 -- Yesterday, the 132-year-old Nymex raised the price of its proposed IPO by 10 percent and added another 500,000 shares to the offering after mutual funds and other investors clamored to get a piece of the deal.

Nymex is expected to price about 6.5 million shares at $57 a share on Thursday night, according to people familiar with the IPO.

Some investors believe Nymex's stock could shoot up to as high as $75 on the first day of trading...

Meanwhile, a full seat on the Nymex, which includes the right to trade crude oil, gasoline and other products, sold last Friday for a record $6 million. In February, a seat sold for as little as $3 million.

The value of the Nymex has soared as hedge funds and other investors pour loads of cash into trading futures based on crude oil and natural gas. The blowup in September of hedge fund giant Amaranth Advisors, which lost $6 billion on natural gas bets in one day, had almost no effect on the energy market -- a sign there was enough capital in the system to sustain big shocks.

^---(full text at url)---^

On that final point, it's actually a sign that there's so much "capital in the system" that ruptures can be initially ignored like a rupture on the bottom of the deep blue sea... sending a hiccup on a collision course with Main Street, slowly and imperceptably building into a tsumani of excess where all the customary rules and behaviours of the beach lifestyle are suddenly changed.


TownCrierRussian Govt calls off big SA trade meeting#14937911/15/06; 04:53:06

15-NOV-06 MOSCOW ( --The Russian government has called off a big meeting with the South African government, which had been scheduled for Pretoria later this month, according to sources in Moscow and Pretoria.

...This is the high-level group which meets annually, and is chaired by Foreign Minister Nkosazana Dlamini-Zuma and Russian Minister of Natural Resources, Yury Trutnev...

The timing of the cancellation comes as the Kremlin has turned negative towards the role of Russian businessmen trying to further their business in southern Africa by positioning themselves between the governments in the two places. This concern, sources in Moscow reported in September, was one of the reasons for the last-minute cancellation of Putin's planned visit to Angola.

In a report issued last week by the Institute of Security Studies in Pretoria, it is charged that there was a trade of political favours and mining licences in South Africa by Victor Vekselberg, the Russian metals and oil magnate.

The affair has been reported this week in Moscow by the Kremlin-friendly newspaper, Kommersant. ... The newspaper is now probing what exactly Vekselberg and his Renova group have been doing in South Africa (SA).

...Vekselberg promised substantial investment in SA, but then quietly transferred ownership of his SA stakes to a Bahamas-based affiliate of his SA firm.

On September 13, President Vladimir Putin met Vekselberg after both men had returned from the President's visit to Cape Town. During the SA trip, it was announced that Vekselberg would be co-chairman of a newly-formed SA-Russia Business Council. Nicky Oppenheimer is the SA representative.

Putin has rejected an attempt by Vekselberg to preserve his aluminium group SUAL: from a state-ordered consolidation, and at their meeting he warned Vekselberg against exporting capital that, Putin suggested, should be invested in Russia. Since that meeting, it has been announced that Vekselberg's SUAL will be taken over by Russian Aluminium (Rusal).

...Also, reports last week indicated that Vekselberg's major oil company TNK-BP has been compelled by the Kremlin to make a back-tax repayment to the government of $1.44 billion. This is the largest government tax claim against a Russian company since Yukos and its owner Mikhail Khodorkovsky were indicted, and convicted, in 2004.

^---(more at url)---^

A fascinating chapter in a larger unfolding saga.


TownCrierThe Gold Market... scrambling to de-hedge#14938011/15/06; 05:18:47

(excerpts) -- Despite some weird trading action, gold prices are likely to rise by $200 over the next four years. That's the forecast of firms like UBS, Credit Suisse, BMO and others, and it also just happens to be what the forward market is priced at.

There are many factors involved in setting prices, some in opposition, and some more popular at times than others. But at the end of the day, prices rise because demand is rising and supply is not.

In their Weekly Comment (Nov 13) on Gold, Credit Suisse states:
-- U.S. economic fundamentals –- the US$ underpins the gold price. There continues to be a raft of reasons and arguments from economists against the long-term health of the US$. These include: the massive and rising debt and current account deficit; looming crisis in Social Security; the rising budget deficit; and excessive household debt.
-- Global supply and demand factors –- mine supply will likely continue to decline significantly over the next 10 years. Global gold producers are depleting reserves faster than they can discover them.
-- Official Sector supply (Central Banks) will likely decline significantly, particularly after 2009, and many countries could increase their gold reserves in the future (China, Russia Japan).
We believe the US$ will continue to underpin the gold price. However, supply and demand factors will begin to make their presence felt to such an extent that they alone (or in combination) could trigger a quantum upward change in the gold price, enough to sustain a new gold price US$ equilibrium.

[S]everal major producers ... are rapidly trying to de-hedge, which means that as and when the gold price pulls back, they are going into the market and buying back some forward production they previously sold. That will drain future cash flow and profitability, so traders have to watch this situation as well.

Credit Suisse is reporting that goldminer producers have de-hedged 10.24 million ounces (318 tonnes) YTD, and that already is twice greater than the 131 tonnes de-hedged for the whole of 2005.

That statement tells anybody who can read that gold mining companies expect the price to ramp up from here.

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

So, what are you waiting for... your dear mother to hold your hand and tell you it's OK to exchange your dollars for gold?

Pick up the phone and make progress toward physical savings.


KnallgoldFrance calls for powers to stem rise of the euro#14938111/15/06; 06:41:56

The EU politicos are at it again...

"France calls for powers to stem rise of the euro
By Ambrose Evans-Pritchard Last Updated: 1:37am GMT 15/11/2006

French premier Dominique de Villepin has sent shivers through EU institutions and caused consternation on the currency markets by calling for euro-zone governments to stem the rise of the euro.

"We can't let the European Central Bank act alone on the exchange rate," he said at a meeting with Airbus sub-contractors in Toulouse. The euro instantly fell from €1.2840 to under €1.28 against the dollar, as the comments flashed across traders' screens.

Mr de Villepin also called for the creation of industrial giants with clout to defend Europe's "strategic interests" against the Americans and Chinese, and a shift away from free market competition policy set by Brussels. "Europe must apply the law of reciprocity in global trade when foreign practices are unfair," he said.

It is the first time that a major EU leader has threatened openly to invoke Maastricht Treaty powers giving the politicians a key role over the euro.

EU finance ministers (Ecofin) have the legal power under Article 111-2 to shape the exchange rate, a tool that would let them dictate a policy of lower interest rates to the ECB – stripping the bank of its independence. Economists have long warned that this could create unworkable tension in the long run.

Airbus has been the most visible casualty of euro strength, racking up almost €200m (£135m) in losses in the third quarter as it struggled to sell aircraft in dollars while paying labour costs in euros. Goldman Sachs said the company ceases to be viable at an exchange rate above $1.40.

Mr de Villepin, who promised €145m (£98m) in aid, said he would do whatever it takes to save France's aerospace industry. "We will not let Airbus fail," he said. "

MKKnallgold#14938211/15/06; 10:11:41

According to yesterday's FT, the problems at Airbus go beyond a simple exchange rate problem. They have production problems as well having to do with splitting various component manufacturing between countries. To make a long story short, the left hand does not know what the right is doing leading to delays and huge additional costs.

I did not know about the clause in Maastricht stating that the EU finance ministers can override central bank policy. If I had, I would have been even more skeptical of the chances for a stable, long-term union.

Anyone know how this works? Do they get together in a meeting and vote on interest rate policy? That would be interesting. . .

In my view, France keyed the formation of the EU, and, one way or another, it will key its unravelling with the vote against the Constitution the first and most important step in that unfortunate evolution. Villepin's dalliance occurs even with a fellow Frenchman, Trichet, heading up the ECB. What happens when the Germans get their turn?

Socialism remains the most important impetus to gold ownership for the private citizen in both the United States and Europe.

geBush and Putin discuss Iran, WTO entry at Moscow airport#14938311/15/06; 10:37:10

dpa German Press Agency
Published: Wednesday November 15, 2006

Moscow- US President George W Bush and his Russian counterpart Vladimir Putin confirmed Wednesday they are preparing to sign a trade agreement putting Russia on the threshold of WTO entry, a Russian official said. The two world leaders also discussed Iran's nuclear enrichment programme "with great understanding" during the one and a half hour meeting at Moscow's airport Wednesday, Putin spokesman Alexei Gromov told Russia's Interfax news agency.

...Yalta Conference II ? ... without the British this time?...

mikalDollar delicatessan - "Give us new menu" #14938411/15/06; 11:23:52

Rubin, Volcker Say Investors May Avoid Buying Dollars (Update2) By Kevin Carmichael
Nov. 15 (Bloomberg) -- Excerpts: "Robert E. Rubin, Treasury secretary under President Bill Clinton, and former Federal Reserve Chairman Paul Volcker said foreign investors probably won't keep increasing dollar holdings, raising the risk of a slump in the currency.
Failure by the U.S. government to shrink its budget deficit may spook the central banks, hedge funds and others who have been buying Treasury notes, Rubin said. Volcker said the U.S. borrowing requirements raise the risk of a ``crisis'' in the dollar as soon as the next two and a half years."
Mikal -- Paul, would you be more credible if you had
instead said a "crisis in the dollar as soon as" exactly 2 and one half years, 6 hours and 3 minutes? No, and I hear jawboning of the beleagured buck. Foreigners are already slowing purchases of the dollar since at least last year.

"``It's incredible people have gone on so long holding dollars,'' Volcker said during a panel discussion at the event. ``At some point, you will get a situation where people have had enough,'' he said. He added that he wasn't ready to ``extend'' a previous prediction of a crisis within two and a half years."
Mikal-> Paul knows that "extending" the prediction would
extend credibility apparently!

"The U.S. budget situation must be addressed now because the government is just five years from ``rapid acceleration'' in spending tied to Social Security and Medicare, Rubin said. He reiterated that the incoming Democratic majority in Congress and President George W. Bush should raise taxes to reduce the deficit."
Mikal-> It's a no win situation trying any of old policies
that cannot generate jobs and modest, sustainable taxes
from them. But I agree "the U.S budget situation must be addressed now" but for different reasons.
Here and in the balance of the article are deliberate deceptions on Medicare, Social Security and Medicaid
in reports last week and which are becoming louder.

FlatlinerTigers - @Goldilox hyperinflation#14938511/15/06; 12:00:33

Goldilox, you have a rarely unique point of view with regards to inflation. The time that you have put in to really figure out the cause rather than the effect is honorable. The world could use a few more people that put forth the dedication that you do towards understanding the complexly simple topic.
A Tiger comes to town everyday and eats someone from the middle class. The middle class of that village is large, but the people, as long as they can remember, have seen a Tiger come to town and eat someone on a daily basis. There are a lot of people, so as a collection, they are not too concerned. "That is just the way life is" some say. Others "The Tiger is hungry too and it must eat." People watch and in time someone with great credentials stands up and declares – "The loss of person to the hunger of the Tiger we will call ‘Inflation.’ It is forever a phenomena of life! As long as Tigers live, we will have inflation."

Life goes on and someone visits the village from a distant one and says "A pack of Tigers has just consumed my village!" The people think – Of my goodness, more than one? He with great credentials stands up and says – "this total destruction by Tigers we'll call hyperinflation!" The people look at him in fear knowing that they can live with inflation, but if hyperinflation comes along they will all surely die in the mouth of an unstoppable Tiger.

Meanwhile, there comes along one in the family of ‘lox that finds a liking to Gold and a great fear of the Tiger. As a little ‘lox, he is observant, compassionate and cautious. Mysteriously drawn in by the power of the great Tiger, the little ‘lox studies how and when the Tiger feeds. He thinks - If I can figure out why the Tiger eats, maybe I can prevent the Tiger from eating me! That thought becomes a driving force in his life.

As time goes on and the ‘lox gets older and finds work as a butcher. This business is good to him and he prospers. Common sense prevails and this ‘lox does not leave his meat out to spoil but rather plans each day so that what is butchered is consumed. Rather than leaving profits in meat, the ‘lox converts to gold for storage overnight. It is at that point that the ‘lox makes another thought provoking observation – those that give up their gold to take home more meat then they can possibly consume in one day have a higher probability of falling prey to the great Tiger. It is then that this great butcher realizes the obvious – the Tiger is drawn in by the scent of meat!

The ‘lox, now recognized as an outstanding merchant in the village, announces this theory at the monthly gathering – "Tigers eat meat. Do not hold meat any longer than you have to or the Tiger will visit you and most likely find the small portion of meat that you hold less than filling and turn on you." The people laugh! "Silly ‘lox, everyone knows that Tigers eat people." The ‘lox asks "If Tigers eat people, what are all the Tigers eating that are circling the village?" The people yell back "Why, people, of course! That's what Tigers eat, that's what Tigers have always eaten!" "No," the ‘lox insists, "Hold gold, it will prevent you from being in the path of the Tiger." The people laugh, "Foolish gold loving ‘lox. Everyone knows that gold is not food." "Exactly!" cries the ‘lox. But the people ignore him and start chanting "Gold loving ‘lox, Is a Gold-eating-lox." And laugh at the thought of giving up meat.

As time goes by, the people start calling this ‘lox – Goldilox, because of his love of gold. They fail to see what the Goldilox sees and the people continue to live with inflation. Every day, as the Goldilox converts meat into gold, he watches as the Tigers continue to gather. "One day," he states, "the number of Tigers in the woods will surly overpower what this village has to offer and the entire village will fall victim to hyperinflation."

The Goldilox knows that if all people of the village convert their excess meat into gold, the Tigers in the woods will not be tempted by the smell and not find their way into town. Also, if the population of Tigers do not find substance in eating people, the Tiger population will surely diminish.

Meanwhile, there are some in town that hear Goldilox's words and they share their thoughts: "It is obvious that Tigers eat meat." "I too see hundreds of Tigers circling the village!" "I have witnessed the Tigers feeding on paper meat surely that will not satisfy them." "I have seen great villages with many leashed Tigers." "What happens if those leashed Tigers are released?" "There will be a great rush from meat to gold if those Tigers are released."

As surely as a gold coin will fall to the ground when released, Goldilox knows that the collection of Tigers in the woods, of this magnitude, has been feeding on the village population in a way never seen before. Goldilox declares "Hyperinflation is here. Surely, if you do not see the obvious, you will surely be meat for a Tiger!"

Years pass and the population of Tigers continues to grow and yet the Village is not obviously destroyed. Inflation is still happening, but the population is only partly annoyed by the buildup in the woods.

In time another villager sees also sees the circling Tigers and has also seen how the term hyperinflation was defined and asks Goldilox "How is it that hyperinflation is here when total destruction of the village has not occurred?" "The definition is incorrect" says Goldilox. "Hyperinflation is really a population of Tigers that circle a village looking for the day to attack." The naive villager questions "But it seems to be the act where the Tigers ravage the village."

The wisdom of Goldilox then shines through as he says, "Look closely and you will see that the Tigers are strategically destroying the value in the village. They do this in the open, yet the people refused to notice the inflation. Gold would save them, but they refuse this idea because they follow the philosophy that Tigers are a phenomena of life." The Naïve villager is left thinking, "Unlike other times where villages are openly destroyed, the Tigers have figured out a way to secretly keep consuming a village without arousing suspicion in the people, thus prolonging the suffering and yet not inflicting a change in lifestyle." Can this be adverted? The naïve one wonders as he cautiously buys only enough meat from the butcher for the day and continues to save the rest in gold.

FlatlinerThe NYMEX ipo#14938611/15/06; 12:14:54

Being suspicious about most everything, I have to wonder what the motive is for a 132 year old private organization to go public?

As we all know, an IPO is an initial public offering. It is the act of selling the company to the public. Sometimes the sale is to raise capital to expand the business, sometimes it's to simply make a profit that can be allocated in different ways.

What if those that own this business know that they will be out of business in a few years? You know, what if the paper markets are not what they seem to be and they know it. This sale may be an indication that the future of paper trading may be coming to an end as the current owners look to offload what they know to be a dead end business onto the public.

If there is any meat behind the idea that central backs are looking to get the oil cartel to NOT trade in open public markets, it would imply that open public markets will no longer be needed.

Just a thought. I may be reading too much into it, but if I knew that public markets would not be needed in the future and I owned one today, I would sell it now rather then hold it when it goes under.

FlatlinerQuestion#14938711/15/06; 13:19:36

Is there anyone reading today, that can provide a good reason why central banks around the world should not buy gold?

Likewise, is there any good reason why central banks around the world should sell gold?

USAGOLD Daily Market ReportPage Update!#14938811/15/06; 15:19:29">
The Daily Gold Market Report has been updated.

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

WEDNESDAY Market Excerpts

Gold dips, dollar firms, CalPERS looms

November 15 (from Reuters) -- Gold futures ended lower in choppy trading Wednesday, bouncing from the lows as the dollar slipped back from morning gains and financial markets waited for an important U.S. inflation report on Thursday.

Sources expected gold to keep zigzagging in a wide range, and to find resistance at recent two-month highs from the multiple rallies in the past 30 days.

The COMEX December gold contract settled down $1.50 at $623.80, trading from $615.30 to $625.80. On Friday the contract reached $638 an ounce, a price last seen Sept. 7, having advanced 13 percent from a four-month low at $563 on Oct. 4.

"We are a bit overbought this week. We failed to get over the $630 mark in the gold market, and so it looks like a little bit of profit taking has kicked in with the dollar's strength," said a floor trader.

The dollar was initially boosted by a surprisingly strong gain in New York area manufacturing, which eased fears of a slowdown in the U.S. economy.

"Consolidation remains the short-term theme for gold, particularly with oil locked between $58-60/barrel and the dollar showing signs of stabilizing," wrote James Moore of TheBullionDesk.

The dollar fell a bit to $1.2812/14 per euro and to 117.97/99 yen in the run up to the Wednesday afternoon release of the minutes of the Federal Reserve's most recent policy meeting, where policy makers' greatest concern was reducing U.S. inflation over time to counter any expectations of higher prices.

"The dollar certainly is important, and that came off again at a certain point," said a bullion trader.

"In the back of people's minds is this idea of CalPERS out there and passive money with or without a name potenially going to be in the market," he said, referring to the largest U.S. pension fund, the California Public Employees Retirement System, which said last week it would invest $500 million in the commodity markets.

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

Belgian@ Flatliner#14938911/15/06; 15:47:02

Yes, tiger...the Belgian lilliputin is still reading your brilliant thoughts.

Gold is in the process of becoming much more "private" and the financial/monetary industry is being "collectivitized".

Private wealth property versus collective debts.

There will always be (infla) tigers everywhere and villages with large/small numbers of meat (finance)collectors.

CBs will always exchange gold-wealth AND infla-meat. But "wealth" is per definition a private matter and "debt" is a public matter.

A nation state can only pull its worth out of private wealth and not out of public debts.

Main difference between individuals and states is that individuals want to posess as much wealth as they possibly can get and states want to produce as much debt as possible. Freegold will balance the public debt against gold-wealth (individual and state freegold wealth reserves).
Conclude that states (their CBs) prefer to posess as little gold as needed. That's why freegold is needed.

That's why the optimum goldmetal redistribution is still taking place before freegold is fully implemented.

Thanks for the nice tiger-story, Flatliner...

Ag-geekDesparate for shiny!#14939011/15/06; 16:28:12

What some people won't do for a little Au!
Ag-geek@FLATLINER#14939111/15/06; 16:46:41

Loved your Tiger story!
GoldiloxTiger-iffic!#14939211/15/06; 17:15:46

As Tony the Tiger would say, "Grrrr-reat!

Now everyone can see why I rarely talk about my "gold religion" unless first questioned. The tiger-fodder just doesn't "get it".

GoldiloxIllegals#14939311/15/06; 17:23:28

@ Ag-geek,

I gotta doubt those numbers drastically. If wildcat miners can skim 10% of SAs gold out of the ground illegally, something is terribly wrong with the mining business - like taxes are still too high to healthy mining ops, and they are subsidizing their own thieves.

Anyway, it comes from CNN, who brought us the Iraqi gold story. Methinks they likes to exaggerate gold stories for press effect.

36 tons? Don;t tell me they hid that in their underware.

GoldiloxPhysics promises wireless power - Tesla vindicated#14939411/15/06; 17:45:56


The tangle of cables and plugs needed to recharge today's electronic gadgets could soon be a thing of the past.

US researchers have outlined a relatively simple system that could deliver power to devices such as laptop computers or MP3 players without wires.

The concept exploits century-old physics and could work over distances of many metres, the researchers said.

Although the team has not built and tested a system, computer models and mathematics suggest it will work.

"There are so many autonomous devices such as cell phones and laptops that have emerged in the last few years," said Assistant Professor Marin Soljacic from the Massachusetts Institute of Technology and one of the researchers behind the work.

"We started thinking, 'it would be really convenient if you didn't have to recharge these things'.

"And because we're physicists we asked, 'what kind of physical phenomenon can we use to do this wireless energy transfer?'."

The answer the team came up with was "resonance", a phenomenon that causes an object to vibrate when energy of a certain frequency is applied.

"When you have two resonant objects of the same frequency they tend to couple very strongly," Professor Soljacic told the BBC News website.

Resonance can be seen in musical instruments for example.

"When you play a tune on one, then another instrument with the same acoustic resonance will pick up that tune, it will visibly vibrate," he said.

Instead of using acoustic vibrations, the team's system exploits the resonance of electromagnetic waves. Electromagnetic radiation includes radio waves, infrared and X-rays.

Typically, systems that use electromagnetic radiation, such as radio antennas, are not suitable for the efficient transfer of energy because they scatter energy in all directions, wasting large amounts of it into free space.

To overcome this problem, the team investigated a special class of "non-radiative" objects with so-called "long-lived resonances".

When energy is applied to these objects it remains bound to them, rather than escaping to space. "Tails" of energy, which can be many metres long, flicker over the surface.

"If you bring another resonant object with the same frequency close enough to these tails then it turns out that the energy can tunnel from one object to another," said Professor Soljacic.

Wireless energy transfer has been thought about for centuries

Hence, a simple copper antenna designed to have long-lived resonance could transfer energy to a laptop with its own antenna resonating at the same frequency. The computer would be truly wireless.

Any energy not diverted into a gadget or appliance is simply reabsorbed.

The systems that the team have described would be able to transfer energy over three to five metres.

"This would work in a room let's say but you could adapt it to work in a factory," he said.

"You could also scale it down to the microscopic or nanoscopic world."

Old technology

The team from MIT is not the first group to suggest wireless energy transfer.

Nineteenth-century physicist and engineer Nikola Tesla experimented with long-range wireless energy transfer, but his most ambitious attempt - the 29m high aerial known as Wardenclyffe Tower, in New York - failed when he ran out of money.

Wireless power for gadgets

Others have worked on highly directional mechanisms of energy transfer such as lasers.

However, these require an uninterrupted line of sight, and are therefore not good for powering objects around the home.

A UK company called Splashpower has also designed wireless recharging pads onto which gadget lovers can directly place their phones and MP3 players to recharge them.

The pads use electromagnetic induction to charge devices, the same process used to charge electric toothbrushes.

One of the co-founders of Splashpower, James Hay, said the MIT work was "clearly at an early stage" but "interesting for the future".

"Consumers desire a simple universal solution that frees them from the hassles of plug-in chargers and adaptors," he said.

"Wireless power technology has the potential to deliver on all of these needs."

However, Mr Hay said that transferring the power was only part of the solution.

"There are a number of other aspects that need to be addressed to ensure efficient conversion of power to a form useful to input to devices."

Professor Soljacic will present the work at the American Institute of Physics Industrial Physics Forum in San Francisco on 14 November.


It's sad that it takes this kind of effort to vindicate 100+ year-old technology, but at least it's getting some serious attention.

If it is viable, copper demand should really take a hit.

GoldiloxAlcohol-powered laptops ahead#14939511/15/06; 17:53:36


Toshiba has unveiled a prototype fuel cell it hopes will become the power source for laptops in the future.

Fuel cells should work with existing laptops.

The fuel cell breaks down methanol to generate power and, Toshiba claims, will provide enough juice to run a laptop for about five hours.

To get the cell working, the alcohol fuel is provided in small 50cc cartridges.

Toshiba hopes to put the fuel cell on sale in early 2004.


Heck, I've seen evidence of alcohol-powered word processing for YEARS, but obviously at doses exceeding 50 cc.

David Linkley@Belgian #14939611/15/06; 19:09:50

Hi Belgian, glad to see you back as always you challenge accepted thought processes. Freegold as you call it has no shot short of a worldwide revolution as those in power will take it when they deem it necessary. The current path the world in on is more about replacing the current systen than ideals of freegold grandeur. Only those with money and power can afford to buy and hold an asset which pays no return and is a pain to hold safely. The ECU will not last minutes (in historical time) without a strong new world presence to guarantee it's survival. We are now entering the new "dark ages" and only time will tell whether we are worthy enough as a people to break free and create an even better world. Ultimately freegold is the answer but not before a revolution occurs to replace the current facist system which engulfs the globe.
TownCrierDavid Linkley, on "replacing the current system" >>>or let's call it a paradigm shift#14939711/15/06; 19:57:50

I think almost any rational and politically astute student of the evolutionary process and economic developments moving us toward the MTM "freegold" reserve paradigm would only very scarcely deem the anticipated goal/outcome as "ideals of freegold grandeur".

Rather, even in their most candidly optimistic assessment, they would assuredly replace your lofty (and ill-warranted) phrase with something more akin to "freegold -- warts and all".

May I ask what personally threatening bugaboo is causing you individually to perceive this stardard fare in such a loftily skewed fashion?

To be sure, we are guided by a set of certain truisms and contraints:

One of them is that central bankers truly do want to eliminate sources of systemic risk that could paralyze the financial and monetary system, thus, the dollarcentric derivative-ridden system which is currently in place is on the agenda to be phased out.

Equally valid is that no other political trading bloc wants its own currency to simply replace the world's dollar reserves -- because they don't want to inherit the associated trade asymmetries. Convenient evidence of this latter point can be seen by scrolling down to Knallgold's (msg#: 149381) post with the Telegraph article having the headline, "France calls for powers to stem rise of the euro".

Without burdening this sketch with further details, I would ask you, what is left by way of a solution? There is the gold avenue -- nothing so lofty as "ideals of freegold grandeur", but rather a commonsense application of "freegold, warts and all" as has been described at this Forum these many years by various dedicated spectators.


David Linkley@TownCrier#14939811/15/06; 20:11:37

I truely wish freegold were a reality as the world would be a better place for it but I'm afraid the globe is now moving in the opposite direction of more war, more consolidated power and less freedoms (including the priviledge of holding gold privately). Gold stands for objectivity and the only true defense of the individual against the money powers and thus the state. Encouraging freegold for citizens at this time is mearly a way to slowly try and break free from the current system. If you really want to improve the world, eliminate the Fed and the Bank of England and then freegold would have a chance. Sorry but the blood of patriots will be spilled worldwide before the concept of freegold has a chance. Relying on weak, stratified socialist governments to lead the way is a fools game.
Goldilox"Total deficit at the Pension Benefit Guaranty reaches $40.9 billion that has to be Federally Financed."#14939911/15/06; 20:37:45


Here is a perfect example of making good news out of a festering disaster, resulting in the continuing downward spiral. The real headline should read "Total deficit at the Pension Benefit Guaranty reaches $40.9 billion that has to be Federally Financed."

WASHINGTON (Dow Jones)--The Pension Benefit Guaranty Corp. says its deficit for fiscal 2006 is nearly $5 billion smaller than the agency's shortfall during the year prior.

The PBGC's insurance program for single-employer pension plans posted a deficit of $18.1 billion in fiscal 2006, compared with a $22.8 billion shortfall recorded a year ago, the agency said Wednesday.

The $4.7 billion net improvement is mainly due to the airline relief provisions in the Pension Protection Act that led to a sharp reduction in the amount of "probable" liabilities reflected on the agency's balance sheet, the PBGC said.

"The PBGC's financial condition appears to have stabilized for the time being," said the PBGC's interim director, Vince Snowbarger. "Our current assets can cover pension payments coming due for a number of years into the future, and our exposure to additional losses has declined."

The PBGC was created by Congress and funded by premiums raised from companies with covered pension plans. It guarantees pension benefits for roughly 40 million workers by taking over pension plans a company can no longer afford to fund.

-By Jeff Bater, Dow Jones Newswires; 202-862-6616; This email address is being protected from spambots. You need JavaScript enabled to view it.

Ten BearsBack to basics... two sources...#14940011/15/06; 20:59:56





Topics...(1) "How Money is Created" (2) "Financial Risk Transfer" (3) "Banking on Poverty"... and several more.

The Invisible HandAnother step towards Freegold#14940111/15/06; 21:48:23

BEIJING -- China will fully open its gold market but on a gradual basis to foreign investors, an industrial insider said on Wednesday

Flatliner@David Linkley#14940211/15/06; 22:30:26

Before the opportunity passes, I am pleased to see you posting here again. Your postings show a strength that few can duplicate.

Some of the most profound changes that happen are changes that happen slowly spanning much time. Like aging, these changes occur reshaping the world sometimes slowing it, sometimes laying it back, but even as those changes occur, it is up to the individual to perceive the moment and choose, from their own perspective, what the change really means to them as they encounter it.

There is not a day that passes where we, as humans, do not get the opportunity to interpret the world from our unique vantage points. Our past experiences, weather they be successes or failures, go into shaping how we see and interpret the world at any given moment.

Will it be the same tomorrow? … Or better yet, will the world change, or will our point of view change?

You say: "Gold stands for objectivity and the only true defense of the individual against the money powers and thus the state." This is a pleasantly strong statement. Well said. It has taken me a few years to really see the meaning of these words. Yet, then again, I know my perspective is different then yours so I will not assume that I know what you mean – exactly.

From my point of view, tomorrow's outcome could go any number of different ways. I my live, or I my die, but from past experience, I'm pretty confident that tomorrow will most likely be much like today – a day where little changes will happen and little real progress occurs.

Time, just may be a good thing. I'm sure that as time passes your words will gain more strength in me as we watch the world advance from our own unique positions. I look forward to the future. There is much to do, many people to learn from!

Buy your objectivity and show others how it's done. United, common, like minded individuals with different perspectives can still individually choose to make a stand against the money powers together.

GoldiloxWizards of Money#14940311/15/06; 22:30:39


Smitty's treatise on the relationship of banking to political power is one of the most comprehensive and well documented I've ever read, and should have netted her a PhD in history. More likely it got her "washed out" of Grad School!

It's also where I learned the interesting coincidink that MLK Jr was shot right after his "less famous" "HUD in Atlanta" speech, where he perhaps too closely outlined the RE flip-flop scheme that Catherine Austin Fitts was blackballed for revealing 20 years later. You know, the one where she told her boss, GHWB, that about a $Trillion in HUD money had been "misallocated" over the 20 year period she audited. (that's a trillion of 1980 money).

I guess this is why I have a hard time believing those who preach that the banksters are only a "little pregnant", but working hard to ensure the "stability" of currencies and markets.

Add this to the money-laundering shenanigans of post-WWII, the SLDIC swindle of the '80s, ENRON, Katrina and Iraq "rebuilding scams," and the phony Monday Night Football telethon, and do the math! The current PTB are just plain dirty. They wouldn't have a clue how to conduct themselves in an honest market.

Maybe they justify all of this with a "Swordfish" mentality that "it's necessary to sustain our way of life", but the bodies they have to step over to maintain the facade are just too numerous, and cannot reap any harvest BUT constant warfare.

Hiding some Gold may save a few individuals, but if the reins of power do not change, it may require serious capitulation to realize that salvation, a la the banking friends of Roosevelt's confiscation. They got the gold mine, we got the shaft!

GoldiloxOops - wrong recipient#14940411/15/06; 22:32:58

The previous post should have been addressed to Ten Bears.


Liberty HeadTIH#14940511/15/06; 22:36:55

Any trading of gold in which a gov't participates is not a move towards freegold.

Best Wishes

The Invisible HandChina, Russia, Middle East and GFMS#14940611/15/06; 22:39:50

China should buy more gold - govt economist
BEIJING, Nov 15 (Reuters) - China should buy more gold at the right time as part of a strategy for diversifying its $1 trillion in foreign exchange reserves, a prominent government economist said in remarks published on Wednesday. China should pick the right time to proportion of gold in its reserves.

China should pick the right time to proportion of gold in its reserves.

This means that whether the world is or is not ready for Freegold is not important. The concept is available and now we are evolving towards its implementation.

As a result of impossible US (dollar) policies, the nuclear proliferation will increase in the Middle-East.

China, again, and Russia will play here an important role.

Nuclear power distribution in order to protect their wealth from the dollar regime.

War brings the end of the dollar regime closer whereas it makes oil and gas wealthier.

Wealthier not in US dollar of course, but in gold euro, ruble or yuan.

Perhaps somebody should tell GMFS that ETFs are money pools and that price variations result from the machinations of the organisers of the ETFs (and all other derivatives).

CP wants to allow GMFS (and others) to sell silver and therrby knocking down its price.

The Invisible HandNi dieu, ni maitre!#14940711/15/06; 22:57:33



Liberty Head,

What if this time, some lunatics are convincing Leviathan to start doing it the right way and to wither away?

Join me in Cebu, Philippines, on December 13 at the ASEAN summit. (If G-20 Melbourne next week-end and Nato Riga later this month have not yet achieved Freegold)

The venue is not ready.

So it may be in my garden.

Flatliner@Belgian#14940811/15/06; 23:30:25

Months ago, your statement "A nation state can only pull its worth out of private wealth and not out of public debts." Would have flashed past my eyes like another line of newsprint. But today, I am grateful to read.

You see, like nearly everyone that I know, they tend to measure their worth in dollars and cents. Well, not really cents any longer – due to inflation, but that is how the old saying goes. At any point in time, that person may say, I have a 6 figure income and a 7 figure savings account. I live in a town where the mean income is 40% over the national average and all my friends drive BMWs (that is a wishful stretch to make a point). Any time you talk to anyone, they talk dollars as if dollars were the end goal.

After much study, and it was a long road, it has been pointed out to me that currency is a debt based system. What is typically thought of as a prize that is hard won, is rather something that is built upon someone else's ability to pay. Ultimately, the only way someone can gather currency is if someone else goes into debt to create it and looses it!

This is peculiarly interesting. At an individual level, the battle for control of that currency really does empower the individual with the sense of wealth for the currency can find function in trade if one so chooses to trade it.

When viewed in a collection of individuals, that currency takes on a different meaning. The gathering of debt means that you are enslaving those that went into debt to create it. It's debt service. Thus, on the books of a collection of individuals, they all may be very wealthy, but if the debtors fail to work off their obligations, the millionaires are left with a collection of broken promises.

This is where some millionaires stand out from the crowd. Some know that currency is not the end, but the means to the end and they use it to acquire assets. If those assets are free and clear, it's hard to compare the wealth of that millionaire to the wealth held by the currency hoarding millionaire. One has real assets, the other has collected contracts that are dictated by law that the debtors back.

Stepping back even further, debt in circulation may be held by citizens obligated under the law to honor the debt contract and held by those who are not legally bound to the contract. I'm sure US dollars are not honored for taxes in Spain. Thus, any dollar contract that finds it's way outside the US has effectively offloaded debt responsibility into an environment of honor, rather then of legal, binding. That debt seeks a tangible exchange, and services are usually not an option.

Now, if a nation becomes a collection of millionaires that count their wealth by counting the debt that they have gathered rather then counting the assets they have gathered, the rest of the world will look at that and say – "You are a collection of foolish millionaires!"

On top of that, if a nation where to crate currency out of thin air as debt service and distribute that throughout the world, it would only be perceived as having value if it can be exchanged for real assets. These real assets are held by the non-debt holding millionaires. That real wealth is unencumbered assets.

The statement "A nation state can only pull its worth out of private wealth and not out of public debts." Should even make a bigger impression on people if they think about how the wealth of the US is measured – it is measured in debt units! People count it by counting contracts rather then actual unencumbered assets that could actually be exchanged at any moment for the outstanding debt.

This should make anyone that hold unencumbered assets take note. Those that hold debt overseas have not found function through redeeming it within the country or through exports, thus anything that ‘could be’ exported would have more value than that which cannot be. This skews demand towards gold and away from things like houses and services.

Yes, for a nation to truly redeem its debt contracts, real things will have to be exchanged rather then simply providing more obligations.

Belgian@ Flatliner#14940911/16/06; 01:08:50

The $-centric world is getting closer to the generalization of *- interest only -* loans / 100% debt (0% credit). It is the $-regime/system's flight "forward" .

That's why the globalizing banking-industry creates (forces the proliferation of) financial "products" (products-!!!) as erzats wealth.
None of the participants know the meaning of "erzats" (stocks, bonds, currency) anymore.

When a state (CBs) has no genuine wealth anchor (freegold) anymore to lean (build) on...the state and its system disintegrates.

The liberalization of gold at many places in the East in fact the privatization of gold-wealth through setting gold "free". It is a natural process that is being structured.

It is against this evolving background that the (fundamental) changes in the global goldmining industry should be seen. Gold(mining)bugs have been blinded during the past 35 years...and therefore can't see what is happening.
(same for stocks and bonds - financial products).

Nobody wonders WHY the financial/monetary industries do evolve soooooo orderly and gradual !? STRUCTURIZATION !

You mentionned Villepin-Airbus-euro : One could write a book about the background (fundamentals) that ly behind this single (small) event.Fascinating for a few...absolutely boring for the majority.

TownCrierA matter of natural selection, of sorts, especially for David "the Missing" Linkley#14941011/16/06; 02:40:24

Thanks for your reply (msg#: 149398).

A few thoughts come quickly to mind.

Beyond the impetus of network externalities, the only other glue binding together the function of the dollar-centric International Monetary System (IMS) is the continuing cooperation of the world's many diverse nation-states -- through some perverse combination of their own free-will and/or from extortion.

For consistency of thought, in the above regard we out to consider putting aside the element of freely chosen cooperation -- especially if your take is accurate insofar that "the globe is now moving in the opposite direction of more war".

In such a jangled geopolitical environment, can the U.S.-dollar-centric IMS long survive?

Your posts would have us believe that that the suggested alternative, the use of MTM "freegold" reserves, must somehow rely on "weak, stratified socialist governments to lead the way".

I beg to differ. Beleaguered nations of every stripe shall not find it difficult to understand how their employment of a MTM freegold reserve paradigm will help foster stability and generate general benefits that accrue to themselves. In sharp contrast is the current dollar-centric system, the primary benefits of which accrue lop-sidedly in favor of the debt-riding government of the United States.

In other words, it is the current dollar-centric system that requires the firm leadership (or extortion/intimidation) for its very survival. I think your own words amply advise us of a climate in which we should have reason to believe that the old pillars supporting the dollar-centric IMS are crumbling.

The subsequent use of the freegold paradigm will very likely appear to most onlookers as a very natural freelance solution to fill a void -- a Darwinian successor that was not designed per se, but rather emerged as (survival of) the fittest.

There is no fancy political footwork needed to acknowledge that gold has endured through the ages as a wealth asset, and it doesn't take rocket science to figure out that MTM has emerged as the standard and proper accounting practice for financial assets that transcend time and place.

And finally, if your primary insistance is simply that blood will be spilt before freegold happens, I won't argue with your apparent insight -- on the two events as a basic matter of chronology. But be that as it may, I would say that I don't deem blood spillage as a necessary PREREQUISITE for full freegold implementation.


ThoreaulyChina to corner the gold market#14941111/16/06; 06:44:35

Today's Money & Markets newsletter (by Larry Edelson):

If China were to lay its $1 trillion in reserves end-to-end using dollar bills, the trail of paper would stretch for 96,906,565 miles. That's enough to wrap around the widest part of the earth 3,876 times!

Clearly, Beijing's coffers are overflowing. In fact, China has the largest foreign reserves of any country in the history of the planet. Compare that to Washington, which owes nearly $9 trillion, not counting contingent liabilities.

Whose paper currency do you think should have more purchasing power? Naturally, the yuan. Yet that's not the case — the dollar remains stronger. But not for long. Here's why ...

I warned of this nearly three years ago, but now the signs are even clearer: Over the next few years China is essentially going to corner the world's gold market. In the process, the price of the precious yellow metal could soar to well over $1,000 per ounce, and eventually to more than $2,000 an ounce.

Mind you, this won't be intentional on China's part. Beijing will not set out to consciously "corner" the gold market. But, in effect, that will be the end result.

Take it from me. I've met with central bankers, banking regulators, and gold traders in China. I know their views on the yuan and gold. I've been told that China will be buying up huge amounts of gold.

You see, Beijing knows that the rest of the world perceives China's economy as loaded down with hidden debts and plagued by corruption. So as China progresses toward superpower economic status, authorities in Beijing want the country's currency to be a world-class, stable medium of exchange.

They envision the yuan as a major international currency some day, with as much (or more) status than the U.S. dollar. That's why they're going to back the yuan with gold ... loads of it.

Consider this: China has a mere 1.3% of its reserves in gold (600 tons). That's the lowest of any industrialized economy! To put it into perspective ...

The U.S. has nearly 75% of its foreign reserves in gold.
The European Union has 26.5% of its reserves in gold.
Lithuania, Mozambique, and even tiny Nepal all have more of their reserves in gold than China.
Just to up its reserves to 5% in gold, Beijing would have to purchase $50 billion worth. That could easily send the yellow metal skyrocketing to more than $1,000 an ounce.

And if China were to match roughly half of the gold reserves held by the United States, it would have to buy another $300 billion worth. That kind of buying would send gold to more than $2,000 an ounce.

We're getting closer and closer to the day when this starts unfolding. Why?

A few months ago, China announced that it will plow at least 2.5% of its trade surplus into gold. That's a staggering $2.5 billion of brand new demand for gold every year.

Then, last week, People's Bank of China governor Zhou Xiaochuan said China's government is seeking alternative investments to risky U.S. dollars.

My view: China has probably already started purchasing gold. That's one of the reasons gold is now trading in the $625 range, well above important support levels on the charts between $590 and $600 an ounce.

This is why I suggest getting more aggressive in gold right now. By the time Beijing officially declares that it's buying gold, it will be too late.

mikalIran appears to step up nuke work#14941211/16/06; 08:18:19

Iran Says About to Take "Final Step" in Atomic Plan - Reuters - Yahoo! News - Farisa Hafezi - Nov 15, 2006
mikalGold may close positive!#14941311/16/06; 08:28:32

Gold futures edge higher, aim to break losing streak - MarketWatch - 11/16/06
TopazBond.#14941411/16/06; 09:31:58

A bit of self-management going on here, ...what the!

If it was up to me, the middle of a non-delivery month would seem like the most "least complicated" time to re-engineer the system.

Flatliner@Liberty Head#14941511/16/06; 09:50:11

Greetings. Even though you directed you comment "Any trading of gold in which a gov't participates is not a move towards freegold" towards TIH, it looks like a purposeful statement intended for all.

In light of the hypothetical positioning that I have posted over the last few days where governments may use gold purposefully in the functioning of an economy, is it that the hypothetical situation supports, or condemns Freegold? Or, may it be that your understanding sets you in a position to say that gold is not needed – as a tool – by central banks to mop up the mess created by governments?

In other words, Freegold is yet something all together different?

Flatliner@Goldilox's Wizards of Money#14941611/16/06; 09:50:38

It looks as if you have come to the conclusion that the only real solution is to just, flat out, kill the Tigers.

It seems to me that even if the Tigers are slaughtered, just enough escape, possibly as villagers, to come back another day with even more cunning.

Are there other options? Is there a way to keep the Tigers in the woods while possibly ‘defanging’ them at the same time? Or possibly, is there a way to neuter the cats that torment the village and let the rest just play in the woods?

If there is a high probability that the slaughter approach will leave the villagers with the sense that they never have to worry about Tigers again, they will soon forget what a Tiger looks like. If they do, how will they protect themselves as the Tiger sneaks in under the cover of darkness to re-establish its position as king of the forest?

History shows that this has happened many times before. Probability has it, that it would happen again.

Ten BearsWizards of Money#14941711/16/06; 09:52:42

@ Goldilox #: 149403
"Smithy's treatise on the relationship of banking to political power is one of the most comprehensive and well documented I've ever read,"

I agree with your assessment. Other voices of reason from that time period were Dave Lewis of "Chaos-onomics", and Jay Hanson of "".
None appear to be actively posting now. Lewis's final post on Chaos-onomics was something of a classic, as I recall.

I have noted from your posts, your interest in alternative science. You might find Glenn Turner's "" interesting.

968@ msg#: 149382#14941811/16/06; 10:15:22

It's strange that one immediately associates Europe with socialism...

What is the most socialistic financial system ?
A Federal Reserve System that provides helicopter money ad infinitum, versus a Eurosystem with a Stability and Growth Pact (be it less strict than it was initially) ?
Or does the Federal Reserve System and the US Treasury also have a sort of Stability and Growth Pact that I don't know about ?
Does the Federal Reserve also aims at inflation rates of below, but close to, 2% over the medium term ?

GoldiloxKill Tigers?#14941911/16/06; 10:39:59

@ Flatliner,

Oh, my no. Aren't they a "protected species"?

De-fanging is perhaps more along my line of thinking. Actually, if TPTB weren't keeping the Tiger's movements secret under the auspices of "National Security", there might even be a chance for inter-species cohabitation.

I'm not anti-banking. I'm anti-under-the-table "free markets". Some call this government by proxy, others call it "chronism". The word we used 30 years ago was nepotism.

With all the "talk" about level playing fields, those who shout the loudest want seem to "own the referees" and conduct business "in secret", with complete amnesty for their "inteligence associates".

Flatliner@Belgian#14942011/16/06; 10:50:43

Am I interpreting you correctly? You say:
"The $-centric world is getting closer to the generalization of *- interest only -* loans / 100% debt (0% credit). It is the $-regime/system's flight "forward".

That's why the globalizing banking-industry creates (forces the proliferation of) financial "products" (products-!!!) as erzats[erstaz] wealth.
None of the participants know the meaning of "erzats[ersatz]" (stocks, bonds, currency) anymore."

In other words, the dynamic growth of financial instruments has evolved due to the common misunderstanding of wealth in the west. People that have forever lived in the dollar environment have learned to associate being rich with holding a large sum of debt instruments. These debt instruments are but a derivative of goods (or real assets) and services in a real working economy. Bankers, being capitalistic opportunists (or any other collection of dirtier names), who make money off providing financial instruments, have perpetuated the idea that to get rich, you must make the right investments. As it turns out, those investments happen to be what the banks derive their profits from and everyone else uses in order to gain a higher sense of self worth.

But your stand is that it wasn't long ago that being rich and wealthy were one in the same. At one point, He who was rich owned the company rather than a share in the company. He who was rich owned the capital to provide a loan. He who was rich knew that a currency was the means to the asset. Being rich meant that you held assets and they would all tally up to a great summation of wealth.

Ultimately, the real understanding comes down to the fact that debt instruments, currency, financial instruments are all derivatives of wealth.

This leads to your next line that states "When a state (CBs) has no genuine wealth anchor (freegold) anymore to lean (build) on...the state and its system disintegrates." This, indeed, make sense. If all that can be counted as the value of a state is in the form of derivatives, the effective wealth of that state is zero.

Thank you ALL for helping me see this.

Flatliner@Goldilox#14942111/16/06; 10:58:55

I'm glad I asked.

It seems to me that the one that controls the meat supply for the entire village has a keen love of Tigers. Even if all the people discarded excess meat and killed as many Tigers are they could, the ones that love Tigers would hide them, and under the cover of owning the meat supply, they would feed the Tigers and wait for the opportunity to set them free once again.

If the villagers could find a way to separate the grounds in which the Tiger roam from that of the villagers, it would seem that the two might be able to exist at the same time without colliding.

mikalOverbought may mean overdue#14942211/16/06; 11:19:53

Growing Investor Complacency a Concern - John Authers - Nov 15, 2006 | Financial Times
Short article on US equities and why a correction may be due, based on certain measurements.

mikalBanks must prepare for worst case#14942311/16/06; 11:33:57,,1948641,00.html

Banks Warned of 'End to the Good Times'
Jill Treanor and Rupert Jones | Thursday November 16, 2006
The Guardian | Excerpt:

"The City regulator issued a warning to the high street banks yesterday that the "clouds were already darkening" and urged them to prepare for the impact of rising unemployment and the knock-on effect on bad debts.
The Financial Services Authority highlighted mortgages based on high multiples to income..."
Mikal -- Good article shows that serious issues face banks in Britain, not just in US, China etc.

GoldiloxTigers and villagers#14942411/16/06; 11:40:20

@ Flatliner,

Are you suggeting that we have less to fear from Tigers than villagers in Tiger clothing? If so, I'm inclined to agree!

GoldiloxFear mongering#14942511/16/06; 11:49:42

@ Flatliner,

I have always feared those who would "protect me" from damnation more than damnation itself, be they insurance, public health, government, religious, or politically minded.

The cure is often worse than the ailment, or in financial cases, more expensive than befits the risk of loss.

Kinda leads right into Greenspan's horse hooey about how derivatives "protect" the market" from collapse, when what they really do is pass the risk of high-roller speculation on to the public who believe they are "saving".

Flatliner@Tigers and villagers#14942611/16/06; 11:52:49

Maybe, we should fear he who loves Tigers more than villagers. Holding gold protects one from Tigers. What protects one from the villager who loves Tigers so much he is willing to sacrifice villagers?

The above was crafted before reading your following message. I believe that we are in agreement.

GoldiloxStructural Changes#14942711/16/06; 12:07:24

Quake activity around the Kuril Islands continues at regular >5 magnitudes two days after the >8 event. Is Godzilla awakening?
Henri@ Belgian and Flatliner#14942811/16/06; 12:07:26

Greetings Belgian...I celebrate your return to the table Sir.

Flatliner...great analogy of tigers and inflation. great collections of idle fiat such as those tied up in derivative contracts should draw the great tigers to feed...or is the collection of derivative contracts "meat already consumed"? Perhaps it is a trap set by the great tigers to draw lesser tigers to feed on as these great predators crave "Tiger Meat"


GoldiloxProtection#14942911/16/06; 12:09:06

@ Flatliner,

Certainly not the "Tiger Regulatory Agency".

Flatliner@Belgian#14943011/16/06; 12:09:20

You say "Freegold will balance the public debt against gold-wealth (individual and state freegold wealth reserves)."

I am starting to believe that the concept of Freegold is more like an ‘operation’ rather than a state. Yes, I believe it will function as you describe, but I believe it goes much further than that. I will present this option as time warrants.

Flatliner@TownCrier#14943111/16/06; 12:24:20

In your "A matter of natural selection" post below, you reference the MTM Freegold reserve paradigm. I will argue, shortly, that the MTM reserve paradigm is greater than the MTM Freegold reserve paradigm. The concept of Freegold is larger than the function.

... Goldilox, thanks for the Regulatory laugh!

GoldiloxRegulatory#14943211/16/06; 13:06:12

@ FL,

After a little more thought, I think it might be better described as the "Fat-Cat Preservation Society".

Humble PieState of the country#14943311/16/06; 13:12:31

In the words of George Meaney ,What this country needs ia to get back to woik
mikalPayable to Paulson and pals#14943411/16/06; 13:23:56

Federal Reserve Bank of New York - Temporary Open Market Operations
Thursday | November 16, 2006 | $19 Billion($3Bil + $16Bil)
What's a few Repo's between friends?

mikal@HumblePie, Goldilox#14943511/16/06; 13:31:10

@HP - "get back to work" - Well and true but who's work, where and why? Not mention what and how?
Above all, any work must not only keep one busy, but out of trouble and be enjoyable enough to be productive.
@Goldilox - Re: "Fat cat conservation society" There ya go ya bleeding heart liberal! ;)

mikalFrom the copy editor:#14943611/16/06; 13:34:03

@HumblePie- I meant, "Not TO mention what and how."
Humble Pie@ Mikal#14943711/16/06; 14:15:45

Thanks for your comments
mikalG20 meeting is unique from many vantage points#14943811/16/06; 14:31:42

G20 Meets in Melbourne - Thursday, 16 November , 2006 18:30:00 PM Reporter: Stephen Long -- Snippits:
"MARK COLVIN: Melbourne is renowned for hosting big sporting events, but this week it's a huge economics event that's dominating the city.
Its known as the G20 and it brings together finance ministers and central bank governors from the world's 19 richest countries, plus the European Union.
They're meeting behind closed doors and barricades at the Grand Hyatt Hotel."
Mikal-- This is intriguing! Sort of Bilderbergs on steroids.

"The barricades are there to keep thousands of protesters at bay, who don't share the G20's belief that globalisation and trade liberalisation are the best way to end world poverty.
Our Economics Correspondent Stephen Long is in Melbourne for the G20 meeting, and he has this report.
STEPHEN LONG: In the staid world of economics, meetings don't come with much bigger billing than this."

Mikal-- I like that word "bigger", don't you? After all,
SOMEONE'S got to keep up with the growth in world pop. and gold demand. :)

"STEPHEN LONG: The Treasury line from senior official Martin Parkinson.
His boss Peter Costello will be playing host to the G20 and the guest list is a who's who of economic regulation....
Reforming the IMF and the World Bank are also on the agenda.

MARK THIRLWELL: It is certainly the case that the relevance of those institutions is under increasing challenge. One of the big things that we've seen in the world economy over the last couple of years is that the recovery of East Asia and one of the legacies of the 97/98 financial crisis is a distrust of international institutions in general and of the IMF in particular.
One way to address that, of course, is to give the region a bigger voice in the governance of the fund.
STEPHEN LONG: The protests against the G20 begin tomorrow; the talks take place over the weekend and finish on Sunday."

Mikal-- We join The Invisible hand in anxiously awaiting the outcome of this and other coming initiatives...

USAGOLD Daily Market ReportPage Update!#14943911/16/06; 15:45:19">
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

November 16 (from Reuters) -- Gold futures erased early gains to end lower on Thursday, after the dollar reversed its course and strengthened on key U.S. economic data that eased inflation concerns. Traders expected the gold market to remain fickle and continue to move in a wide range.

One analyst said that gold could find support at current levels and to possibly retest new highs in the near future.

The COMEX December gold contract settled down $2.1 at $621.7.

It traded as much as $5.20 higher at $629 after the U.S. government said consumer prices fell by a greater-than-expected 0.5 percent in October. "The CPI number came in relatively benign, which everybody expected, but maybe they didn't expect it to be quite benign, and the dollar came back up," said Jeffrey Christian, managing director at CPM Group.

Reduced inflationary pressures could work either way for gold, which is seen as a hedge against inflation, but could nonetheless derive investment flows if U.S. interest rates and the dollar come down. The Fed has kept its rate on hold at 5.25 percent since June, though minutes from its last policy meeting revealed that inflation is still its main concern.

After gold trading ended, crude oil futures extended their losses and fell more than 4 percent below $56 a barrel late Thursday. Gold is usually traded as a hedge for crude oil inflation risks, but the linkage between the two markets has been weakened in the past month. CPM Group's Christian said that the crude market had "a very small effect" on gold prices on Thursday.

Other sources also cited short covering and dollar-related profit taking for gold's choppy trading. Steven Platt, an analyst at Archer Financial, said that gold was settling toward a key support area in the $618 to $620 range.

"If we can hold in here overnight, I think the market could actually see some renewed buying interest emerging," said Platt.

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

GoldiloxEpithets#14944011/16/06; 15:52:52

@ mikal,

Here we go, name-calling again. But you got me wrong. I'm as close to anarchist as they come without the revolutionary tactics.

I should have expected the "bleeding heart" label when I said "Don't kill the Tigers".

Belgian@ Flatliner#14944111/16/06; 15:56:12

...being rich and wealthy were (past) one in the same...
Exactly Sir.
Do agree that freegold should be viewed as an "operation" (rather than avenue or process)...because it is realized that being rich and possessing wealth is permanently diverging.
China's rich $ 1 trillion reserves (and others) are a blessing but managing these, (transforming/processing these rich reserves into wealth) is a burden.

Please do elaborate on freegold-operation.

GoldiloxHAS THE FED ENGINEERED A SOFT LANDING?#14944211/16/06; 16:03:37


For all the fears over inflation, especially when the headline PPI/CPI figures were running high due to energy prices, are beginning to come down. And this phenomenon is not just in the US, but in countries around the world, inflation rates are coming down. Interest rates are another story, as rates in the US remain well above those around the world. According to data from ISI, their composite inflation index from 36 countries shows 30 with slowing inflation and the index now at the "deflation fear" lows of ’03-’04. And like the Energizer Bunny, the stock market keeps going and going …. While theories abound about economic growth, the impact of housing and an irrational financial market – let's take a look at what IS going on and make some guesses as to what may follow.

The economy is most definitely slowing down – from over 5% at the beginning of the year to under 2% today. While housing may be to blame for some of the decline, I think much of it rests with the consumer who continues to shoulder heavy debt loads. Consumers have reigned in spending a bit, to allow the savings rate to actually rise, albeit from a negative figure (just what the "savings rate" figure actually measures is a discussion for another time!). Consumer debt, especially revolving debt is coming down – again as consumers SLOWLY repair their balance sheets.


As expected, the FED is much quicker to take responsibility for "engineering" a soft landing than engineering the crises leading to the need for it. How often has anyone, not certifiably fringe, given the FED the credit it deserves for inflating the US dollar to less than 5% of its 1913 value.

CoBra(too)A Wise Western Hero#14944311/16/06; 18:20:49

Like the great actor James Stewart always used to define in his arguments was :

I've had a friend -
and he was jumping out the window of a ten story house ... you know, at every floor he dropped by he found ... up to now I'm OK! -

Today's monetary system, based on the hegemonial Reserve US Dollar has long ago jumped out of that window and it will crash - for sure. What's unknown is at what floor we all are at this stage.

... and I personally @ Belgium can't care less about free gold as long as I have adequate ounces to fade away in the second row only! ... though fade away I will - cb2

The Invisible HandWe learn from history …#14944411/16/06; 18:25:12

that we learn nothing from history

At a certain moment silver and platinum will unexpectedly no longer follow gold to the moon

This post argues that:
1. gold's new status could come out in the open at next month's ASEAN meeting,
2. we are noticing the early signs of the collapse (reverse big bang) of stock markets,
3. that ASEAN's membership gives it authority to prevent the repeat of the Vietnam experience in the Middle East.

One reason Bernanke and Zhou are meeting [this week-end … behind closed doors] in Melbourne is to ensure they understand what the other is doing and do not accidentally bring the world economy unstuck.

Physical gold metal in possession will save you WHEN, not "if", the world economy gets unstuck.

At a certain moment silver and platinum will unexpectedly no longer follow gold to the moon.

The success of the Financial Industry (FI) to perfectly synchronise gold and silver is very suspicious.

The reason why the FI attempted this synchronisation was to hide gold's new wealth status. The FI wanted gold to continue to be perceived as raw material.

In order to hide gold's new status, opinion makers continue to rely only on supply and demand data. Such nonsense (this poster is saying that relying on supply and demand data for gold's price evolution in the near future is nonsense) makes the gold containment by the dollar-International Financial and Monetary System (IFMS) easier.

Makers of electronics were loading up on gold in the third quarter while consumers put off purchases until a sudden late-September splurge, according to the World Gold Council in London.

Here's an FT article which seems to indicate that we are noticing the early signs of the collapse (reverse big bang) of stock markets.

There was a time when a stock exchange, no matter where it was located, was a sort of a club. It had members, who were bankers, who owned it and made money buying and selling shares, on their own behalf and on behalf of others.
Now, the bankers who once made up the club they left have come full circle. A group of the seven largest participants in the equities markets have agreed to form a new club to own a multilateral trading facility to deal in shares – and possibly derivatives and other asset classes – and charge only what it costs to run the platform.

ASEAN seems now to cooperate with China and its Shanghai Cooperation Organisation.

30 years ago, no one could have predicted the magnitude of China's ties with its neighbors. China's rapid economic development since the late 1970s as well as territorial disputes involving the South China Sea and different ideologies...all cast shadows of doubt around its neighbors. But in recent years, the view of China's role is changing profoundly.
Gloria Macapagal-Arroyo, Philippine president said, "As the Chair of ASEAN I would like to express how proud we are of the role ASEAN has played in helping China integrate its economy and become an economic power house. This role of China has helped ASEAN, our trade is surging China and we are seeing more Chinese investment in ASEAN."
Its Commemorative Meeting with ASEAN member economies and its participation in the SHANGHAI COOPERATION ORGANIZATION both demonstrated such determination.
Analysts say China's relationship with its neighbors is undergoing the most active and unprecedented period. New challenges and problems could emerge in the region that will test the strength of the partnerships. And how the sides face these difficulties will largely determine how the partnerships will develop in the future.

echos of Vietnam are heard again resonating from the Middle East more loudly than 30 years ago. Does anyone in Washington high circles understand George Santayana's famous dictum that "those who forget the past are doomed to repeat it?" And do people in those circles know about British playwright George Bernard Shaw who said "WE LEARN FROM HISTORY THAT WE LEARN NOTHING FROM HISTORY" and could have explained how doomed this adventure would be from the start? There are just as many damn fools now as in the past, but the most dangerous ones are those who won't admit they got it wrong till it's too late and then it's someone else's problem. The only debate now is whether it's already beyond fixing, and no solution acceptable to Washington will work.

And guess what? Vietnam is an ASEAN member.

ASEAN with Vietnam can now in cooperation with Shanghai Cooperation Organisation tell the world that perhaps it is about time to prevent the repetition of history.

The Invisible HandDoes the ECB "act" on the euro exchange rate?#14944511/16/06; 18:43:17

French premier Dominique de Villepin has sent shivers through EU institutions and caused consternation on the currency markets by calling for euro-zone governments to stem the rise of the euro.
"We can't let the European Central Bank act alone on the exchange rate," he said at a meeting with Airbus sub-contractors in Toulouse. The euro instantly fell from €1.2840 to under €1.28 against the dollar, as the comments flashed across traders' screens.

Will the politicians stop the gold euro?

The Invisible Handlink#14944611/16/06; 18:45:34

MKChris, from your link with thanks:#14944811/16/06; 19:44:33

"[I]n an environment of increasing reserve accumulation, diversification of reserves is not zero-sum -- the purchases of yen or euros for example, do not necessarily mean dollar sales.'" — Marc Chandler, Brown Brothers Harriman

Just what then are they purchasing euros and yen with -- toilet paper?? Sorry for the crude reference, but I'm sure you get my point. Just what do those sales mean? From the U.S. Treasury point of view this whole thing is rather simple: These are dollars that have to be raised elsewhere. If the dollars aren't raised in the open market, they will be monetized. That is the open end of the zero sum game. . .

And the wind's against you.

GoldiloxHow Many Wheelbarrows Are You Worth?#14944911/16/06; 19:54:07


Some fun statistics.

According to the US Bureau of Engraving and Printing each bill in circulation weighs 1 gram.

Every ounce contains 31.1 grams. [actually, Av Oz = 28.35]

Every pound contains 12 troy ounces.

So if you are worth US$1 million dollars and you requested the currency in $1 dollar bills you would have 32,154 ounces or 2679 pounds of physical currency in your possession.

According to a wheel barrow for sale at Canadian Tire - it can hold 210 pounds.

This means that US$1 million dollars would weigh approximately 13 wheel barrows if you had to transport it via $1 dollar bills. The largest currency in circulation in the US is the $100 dollar bill.

Conversely if you held $1 million dollars in gold you would have 1592 ounces of gold (1,000,000 divided by $628.20) or approximately 133 pounds of gold which would be less than one half of one wheel barrow.

Now the US has M3 currency in circulation of approximately US$11 trillion dollars. If we use the same $1 dollar bill calculation we would find that we have just over 100 million wheel barrels of US dollar bills – if the entire money supply was $1 dollar bills which obviously it is not. This is also one wheel barrow of US dollar bills for every 3 men, women and children in the United States.

Again it would be 1 million wheel barrows of M3 money supply if we use the $100 dollar bill as the bill in the calculation.

Here is the math.

11,000,000,000,000 (11 trillion)

Divided by 100 (for the $100 dollar bill) = 110,000,000,000 grams.

Divided by 31.1 to get the number of ounces = 3,536,977,491.96 ounces.

Divided by 12 to get the number of pounds = 294,748,124.3 pounds

Divided by 210 pounds to get the number of wheelbarrows = 1,403,562.50

Multiplied by 100 to get the number of wheelbarrows if we use the $1 bill instead of the $100 dollar bill.

Buy all the gold you can carry.

How many wheel barrows are you worth?


It's comforting to see that I am not the only fool who enjoys "fun with numbers" trivial pursuits. I see he even has the same trouble translating from Av Oz to Troy Oz that gets a lot of us in trouble.

Ned@ David Linkley#14945011/16/06; 23:07:50

Please let me say first that I am tickled pink that you have surprised us with a couple short, to the point messages.

This is your strong suit, I would guess. Thank you immensely for your brief, easily understood but measurably strong and concise point of view.

Regarding your message 149396, I agree that "Freegold" is a lovely concept, it "is the answer" however that is in our eyes not "their's".

Quoting the last 2 sentences of your message may I ask a question?

"We are now entering the new "dark ages" and only time will tell whether we are worthy enough as a people to break free and create an even better world. Ultimately freegold is the answer but not before a revolution occurs to replace the current facist system which engulfs the globe."

I believe we will not create a better world, I believe a diminishing global resource base will create panic, that is how people are. A revolution will begin an dit will engulf the globe.

I always look at this bottom up. What will the world be like in 100 years......completely ruined, possibly non-existant. In 50 years, probably close to the same. In 20 years, maybe on the slippery slope. Does it matter then when we begin to acquire the precious? Does it matter if we nail the timing?

Is the bottom line, is the inevitable the same sorry story?

I have a question Mr. David Linkley. I had a dream not so long ago that the world was in tough shape, a group of heavily armored personel were going door to door confiscating gold.

What do you think of silver?


Liberty Head@ Flatliner#14945111/16/06; 23:29:06

Greetings to you. In response to your question:
" it that the hypothetical situation supports, or condemns Freegold? Or, may it be that your understanding sets you in a position to say that gold is not needed – as a tool – by central banks to mop up the mess created by governments?"

Gov't is, by it's very nature, a destroyer of freedom. Gov't is entirely about control. It is the antithesis of all that is free.
To survive, Gov't must disguise itself as a guarantor of freedom, a task it accomplishes with embarrassing ease.
What is the point of mopping up a mess, as you put it without first closing off the source of the mess?

As one example, how free could freegold be, while mining is regulated by gov't?

Best Wishes

Chris PowellJohn Crudele: How you may have kinda saved $392.10 #14945211/16/06; 23:37:39

By John Crudele
New York Post
Thursday, November 16, 2006

You will be happy to know that your household costs actually went down in October because of that light truck you didn't buy.

I don't mean to mess with your head this early in the day. But the declining costs of light trucks was a major reason the government earlier this week was able to announce a surprise 1.6 percent drop in producer prices for October.

If you believe the U.S. Department of Labor -- whose statistics rarely make much sense -- we are on the verge of another deflationary episode like the last one that never happened.

I'll explain about deflation scares in a minute.

But first, let me talk about light trucks.

I didn't buy a light truck last month, and I'm guessing that you didn't either.

Yet as insignificant as the price of these vehicles is to the average American's budget, a $392.10 drop in light-truck prices did help the government conclude that the producer price index (PPI) declined.

Wow! It almost makes me wish I needed a truck.

And I'm almost tempted to buy one -- except that the price didn't really drop $392.10. (Remember that lies are always best when told with precision -- hence the 10 cents.)

In fact, the new light trucks that reached showrooms this fall didn't really go down 9.7 percent in price as the government implies.

Washington simply concluded that the new models are so much better than last year's class that buyers got more for their money -- and a price break.

How did the Labor Department come up with the $392.10 figure?

It said that you got an extra $160.09 (notice again the precise number) in extra value from new federally mandated and non-mandated safety improvements "such as tire pressure monitor systems, stability control and airbag system improvements."

And you got another $58.01 in powertrain improvements, plus another $174 in value for "other quality changes." These include "changes in levels of standard and optional equipment."

Voila, the price went down even if it really went up.

Hedonics (a word that I've been barred from using ever again) and an assortment of other such razzmatazz allows Washington to report lower inflation, which automatically makes economic growth look stronger than it is, which in turn allow politicians to proclaim that an economy is great when it isn't, which ultimately gets them thrown out of office.

But on a more pernicious note, these inflation tricks can also fool economic planners like the folks at the Federal Reserve.

Recently the head of the Dallas Fed, Richard Fisher, complained that Alan Greenspan's central bank kept interest rates too low because it had been tricked into thinking the nation was on the verge of deflation.

He said the Fed was incorrectly worrying about deflation.

"In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets," Fisher added.

In other words, if you bought a house at a price that turns out to be too high, you can blame bad data caused by hedonic adjustments to light trucks that makes the PPI looked tamer than it really is.

Today the government will announce its October Consumer Price Index.

It too will be nonsense.


John Crudele is business columnist for the New York Post.

Chris PowellChilean court says Barrick doesn't own Pascua Lama#14945311/16/06; 23:39:05

By Jon A. Nones
Thursday, November 16, 2006

According to a Chilean news source, El Diario de Atacama, Rodolfo Villar, a local gold prospector and geologist, has won a court rulingestablishing ownership to the properties in the 8,600 hectares of land surrounding andincluding Barrick's Pascua Lama. Barrick is challenging the ruling ina Chilean Court of Appeal.

Vince Borg, senior vice president of corporate communications for Barrick, confirmed this withResource Investor but said the Villar case is a "nuisance suit."

According to the news source, Judge Maria Isabel Kings decreed that the transactionawarding Barrick ownership to the propertiesnull and void. ...

* * *

Full story available at the link above.

Chris PowellChoking on hedge book, Newcrest stalls payment for 2 years#14945411/17/06; 00:15:39

From Reuters
Friday, November 17, 2006

SYDNEY -- Australia's Newcrest Mining Ltd. said on Friday it had restructured its hedge book by deferring 1.6 million ounces of gold in order to get better exposure to market bullion prices. The company said the purpose of the restructure was to achieve a better balance of exposure to spot gold prices and to reduce the percentage of production hedged for any one year.

It deferred 1.6 million ounces from fiscal 2006/07 to 2009/10 into the subsequent three years from 2010/11 to 2012/13, extending its hedge book by a further two years.

"The restructure has potential cash flow benefits with minimal profit and balance sheet implications," Newcrest said.

At current spot prices, the impact of the restructured hedgebook on the company's cash flow would be positive in the early years, it said.

Newcrest Managing Director Ian Smith has previously said the company would lower the amount of gold it hedges to about 50 percent of production, from 75 percent to 80 percent, by mid 2007 in the hope of capturing higher spot prices for bullion.

The hedge book, a hangover from the 1990s when miners routinely sought to fix selling prices for nuggets not yet mined to protect profits, has been clouding Newcrest's performance outlook.

A near-uninterrupted rise in bullion since 2000 has turned the sector away from hedging in favour of direct exposure to gold's spot market prices.

Gold, which sells for around $618 an ounce, hit a 26-year high of $730 an ounce in May as investors seeking more tangible assets flooded commodities markets.

Newcrest now has 358,158 ounces hedged for 2006/07, with 323,965 ounces hedged at A$591 an ounce and 34,193 hedged at A$488 an ounce (US$373.54 an ounce).

The gold miner has 1.4 million ounces hedged at US$386 an ounce for the remaining two years.

Newcrest shares were 2.8 percent higher at A$22.86 at 0118 GMT, in step with higher bullion price, bucking a modest decline in the wider S&P/ASX200 index.

968BIS report : OTC derivatives market activity in the first half of 2006#14945511/17/06; 03:58:50

"Contracts on gold and other precious metals expanded by 36% each, reaching $0.5 trillion and $0.1 trillion, respectively, at the end of June."
TownCrierGold dehedging could reach record 15m oz in 2006#14945611/17/06; 06:54:40

2006/11/17; (Creamer Media's Mining Weekly) -- Gold dehedging was expected to come close to 15-million ounces in 2006, representing the highest yearly figure of dehedging since the cycle of reducing forward sales began six years ago, the GFMS said this week.

...It said that forward sales had, yet again, bore the brunt of the decline, with contracts scaled by 1.7-million ounces. It attributed the bulk of the decrease to scheduled deliveries, but noted that AngloGold Ashanti had made an additional contribution to the decline with a reduction in its longer dated forward contracts.

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

Remember, miners would not be doing this if they did not have ample reason to expect higher gold prices in the times ahead.

To put it to you very very basically, watching their action in this regard is perhaps the closest thing most of us mere mortals can ever come to getting "insider information" regarding what the future holds in store for the price direction of gold.

If you are the two-handed variety of investor, use one to rid yourself of your paper currency as fast as you can use the other to receive gold metal in the exchange.

But if you're missing one, such as one buddy of mine who left his right arm on a roadside in Iraq, don't be shy about asking for a little help.


TownCrierPimco's All Asset Fund Quadruples Bet on Commodities#14945711/17/06; 07:18:00

(Bloomberg) -- Pacific Investment Management Co. quadrupled commodity holdings in its All Asset Fund, which has about $13 billion in assets, because the risk to supplies "hasn't disappeared," said money manager Rob Arnott.

The so-called fund of funds, which selects investments from a range of Pimco investment products, raised resources assets to 12 percent of the total from 3 percent, said Arnott, a sub- adviser to Pimco and chairman of Research Affiliates LLC in Pasadena, California.

He reduced investments in equities to help fund the increase. Pimco runs the world's biggest bond fund.

The majority of the increase in commodity investments was made "in the last 60 days," Arnott said.

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

Hmmmm. Gargantuan Pimco was liquidating shares to quadruple its commodity position, largely in the past 60 days...

And during this same 60 day time period, to what concrete actions are YOU, individually, now able to lay claim?

Remember, especially if you are a procrastinator, nobody is going to knock at your door to FORCE you to do anything that is in your best interest. That (thankfully!) is left for each of us to look after for ourselves according to our own designs, understandings and abilities. But sometimes a nudging reminder from a friend helps motivate some of us to rise from our more stubborn periods of complacency. And that's what this is. Get up and read one post at random from 'The Gold Trail', and then consider taking a course of action that seems likely to serve your best interest.


HenriThe passing of one of the worlds foremost economists#14945811/17/06; 07:23:57,,2-2457181,00.html

I toast to this man's life and his attempts to make a difference in the world. Perhaps his greatest contribution was the notion that governments can do very little to control economic conditions in their countries. This supports the idea of Laissez faire mercantilism which remains the hope of any sane individual. Our current drive of "globalization of markets" is predicated upon giving govt a hand in deciding what is best for its people resulting in pervasive cronyism and further separation of the haves from the have nots and destruction of the "middle class" who normally would modulate market dynamics. Without a middle class of merchants and consumers, valuations of necessities as well as those of luxury items are skewed to suit the friends of those in power.
TownCrierA MUST READ: Dollar Breakdown to Ignite Gold Market#14945911/17/06; 07:32:07

Friday November 17; (Jason Hamlin) -- just published an article entitled "Dollar on Path for a Crisis". We couldn't agree more. The timing of this crisis should coincide nicely with wave III of the current bull market and may very well be the fuel to ignite gold's next big run.

The dollar is moving toward a crossroads. The U.S. Dollar Index, which tracks the buck against a handful of the world's major currencies, has been consolidating along an uptrend line that began in December 2004, but also along a downtrend that started in November 2005. Given that the trendlines are on path to intersect, the dollar will be breaking out soon. Technically speaking, it looks very likely that the direction will be to the downside.

With China and other countries freely talking of plans to diversify their foreign exchange reserves, which have been predominantly comprised of U.S. dollars, the FX hordes now have a fundamental excuse to push for a breakdown.

After the turn of the millennium, the White House told us a strong dollar was in our best interest, but it was pretty obvious that they didn't really mean it. The dollar index, which tracks the U.S currrency against a basket of its major trading partners, lost a third of its value from the February 2002 high (120.51) to the December 2004 low (80.39), but the government did nothing to fight it.

The Street.Com reports that "gold is still glittering" and the shine is about to get much brighter...

The technicals aren't looking very good for the dollar. Looking at the short-term chart, we can see that the dollar recently broke down, crashing through the 50-day and 100-day moving averages. These lines, which traditionally act as support , provided no such thing. In fact, the dollar continued falling and broke the trend line that has been in place since August.

A number of countries, including Sweden, the United Arab Emirates, Qatar, India and Russia have all announced intentions this year to diversify their reserves away from dollars. China's reserves alone have topped $1 trillion, doubling from 2004! U.S. dollars are thought to account for over 70% of this amount.

How significant is this figure and what does it mean to gold?

Well, it would be enough to buy all the gold sitting in central banks’ vaults twice over. Put another way, if China invested just 5% of its reserves in gold, it could buy the world's entire annual mine production. If China decides to take this route, those wild predictions about $2,000 gold could come to fruition in a hurry. Are you still sitting on the sidelines thinking gold is a barbaric relic?

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

This is a nice back-to-the-basics sort of article for a mainstream audience.

The clever readers of the world don't need further commentary from a schmuck like me to get a sense of the prevailing weather, but you'll definitely find some additionally helpful charts within the article (see link).

A storm is brewing. Thankfully you all have the wits to seek proper shelter so as not to be a burden to your friends and neighbors.

Call the brokers at USAGOLD-Centenntial to implement a diversification strategy that's right for you. TOLL FREE 1-800-869-5115


Henri@ CoBra(too) Msg 149443#14946011/17/06; 08:03:41

Welcome back Sir! What can be definitely said about falling out the window is that with each floor passed the speed at which one falls increases until a terminal velocity is attained. The $ descent has been slowed by various parachute like devices deployed by the govt such as SM and housing bubbles...I think now the only chute left is the Emergency chute and no one remebers which cord to pull to deploy it. Perhaps they are afraid others will get the idea that there is an actual emergency if they pull that cord...Did those guys in charge back when $ jumped out the window even remember to pack the E chute???....Do those in charge now know where the cord is in the unlikely circumstance that one was packed...Ben?

Most importantly, is there now enough time to deploy it to slow the descent rate for a sublethal impact? That would depend on what floor we are passing and the rate of accelleration.

Situation hopelessly terminal

GoldiloxEmergency conditions#14946111/17/06; 08:56:23

Housing still down, consumer credit tapped out . . .

What happens when the TIgers run out of food? Do they devour their Tiger-friendly locals and then start to eat each other?

Mmmm . . . fat-cat bacon, anyone?

I better start breakfast, 'cause I obviously have bacon on my mind!

MKHenri - - - Milton Friedman#14946211/17/06; 09:08:38

Thanks for acknowledging Milton Friedman today.

Friedman didn't get it right as far as gold is concerned, but he got most of the rest of it right. He was a champion of free markets and individual liberty. The socialists never liked him -- which elevated him into the upper reaches of the economics profession in my book. I always thought his idea of a money supply that grew relative to the population had some merit. To that he coupled a central bank that acted more like a currency board (another interesting idea). I was surprised when he publicly advocated selling the U.S. Treasury gold hoard. That did not seem to be in character. Of course his greatest contribution was the book on monetary policy with Anna Schwarz. The great champion of monetary analysis, I wonder what Friedman thought about the scrapping of M3 and Bernanke's decision not to use money supply as a guide to monetary policy. . .the exact opposite of what he advocated most of his public life. Which leads to a question: If Friedman represented the apotheosis of monetary discipline, where does that put Ben Bernanke who advocates targeting the inflation number -- a statistic, as Crudele pointed out yesterday, that is largely a politicized fiction?

USAGOLD / Centennial Precious Metals, Inc.Our newly-arrived collector boards -- just in time for the holidays!#14946311/17/06; 09:11:53

Gold -- a fine gift idea!
coin collection
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This custom-made board provides an attractively assembled sampling of 19 coins snatched from the brittle pages of history... each one a legacy of wealth endurance, at once signifying, and yet surpassing, the Gold Standard Era from the turn of the previous Century.

GOLD -- a Fine Gift Idea!

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Flatliner@Liberty Head#14946411/17/06; 09:26:15

Not free indeed. That is a very fine point that you do expose. Makes one seriously wonder if gold will ever truly trade freely.
DruidBOC unit to manage equity fund#14946511/17/06; 10:06:46

BOC International Holdings, the investment banking arm of the Bank of China, has been appointed the exclusive manager of a US$2.5 billion (HK$19.5 billion) government-backed equity fund that aims to channel investment to northern China, its top official said.
The equity fund will be the first of many, including an overseas fund that BOCI will begin developing next year, BOCI chief executive Wang Yan said.

"The Bohai Industrial Fund is China's first yuan-denominated industrial fund and is very important for the development of China's industrial fund sector," Wang said. "Later, we will see a variety of this type of fund appear, including resource sector funds."

The Bohai Industrial Fund is based in the Tianjin Binhai New Area, about 200 kilometers southeast of Beijing. The area is the test-bed for a variety of market-oriented reforms including a more convertible currency.

The fund will be launched "very soon" after approval by the State Council, Wang said. "We will be the only one," he said, when asked if his firm would be one of several management firms for the Bohai Industrial Fund.

Investment funds may be a new tool for China to channel capital into the minerals sector, he said. "Chinese companies lack capital when developing. Funds can help channel capital investment amounting to several times the financing available from commercial banks."

That could help firms meet minimum capitalization requirements necessary to get loans under China's tightened credit restrictions.

Druid: There's nothing like crating new relationships for the purpose of sharing knowledge.

DruidDruid (11/17/06; 10:06:46MT - msg#: 149465)#14946611/17/06; 10:09:05

Druid: Should read "creating" as opposed to "crating". Very interesting read though.
Druid(No Subject)#14946711/17/06; 10:11:29

Druid: Pretty informative portal for a diffrent slant on world news.
Druid(No Subject)#14946811/17/06; 10:18:52

Druid: Pretty informative portal for a diffrent slant on Asian news
mikalGoldman writing off old(and gold) assumptions#14946911/17/06; 11:40:40

Banker Push Limits in Hot Debt Markets By Richard Hubbard
LONDON (Reuters) - Excerpt: "A surfeit of liquidity in the financial markets is tempting bankers to underwrite and finance deals that may come back to haunt them, a top banker at Goldman Sachs said on Thursday.
Eugene Leouzon, the chief underwriting officer for Europe and Asia at Goldman Sachs (GS.N: Quote, Profile, Research) who sits on the investment bank's global credit committee, said the current conditions were unparalleled in his experience of investment banking.
"The markets are really, really red hot," said Leouzon, who approves new loans and debt deals to fund mergers and acquisitions (M&A).
"The things we are seeing being done, both on the investment grade side and the non-investment grade side, are I would say borderline stupid," he told the Reuters Investment Banking Summit in London.
"There is just too much capital going after too little by way of deals," said Leouzon, who also manages the firm's underwriting and lending portfolio in Europe and Asia.
But Leouzon said the outlook was for a strong level of new deals going forward, led by lending money to fund leveraged buyouts and cash mergers and acquisitions."

Mikal -> Deals "may come back to haunt them" is just a euphemism, like "borderline stupid" for really, REALLY
taboo, aka offensive, stuff.
This article is more vindication of those, who like Bill Murphy and Jim Sinclair and Michael Kosares, demonstrated in their own way that today you can't ask for more.
This article, read with appreciation of it's careful understatement and veiled innuendo, teams Reuters with Goldman Sachs in a case for the barbarous relic.

mikalFrom the copy editor:#14947011/17/06; 11:59:44

Change: a case for the barbarous relic- to: a case for the "barbarous relic".
It's been a while(perhaps a year or more) since the media's featured any pundits, market analysts or "experts" making that claim, so newcomers to gold should know that our references to "barbarous relic" are often tongue-in-cheek, satirical, ironic etc. Aye me hearties, why just today I was flipping some of me circulated mates into me chest, using me cutlass, while my other hand was busy with that pesky mouse. Into the chest they flew, the big, the small, the veterans and the dainty. What you say, I didn't stop to count them or access the collateral damage? ARRGGHHH! ;)

mikalAssess, not "access"#14947111/17/06; 12:02:50

What do you expect from a mere pirate...
GoldiloxExperts warning against common people's investment on gold#14947211/17/06; 13:38:37


Chinanews, Beijing, November 16 – With the rising of gold price in China, many people have begun to show great enthusiasm for investment on gold, making the country the fourth biggest gold consumer in the world.

However, gold price is determined by many unpredictable factors, investment on gold will pose greater risks even than on stocks. "Even professionals like us can not always tell whether gold price will fall or rise, not to mention ordinary consumers,"said an expert.

Furthermore, many Chinese put their investment on gold ornaments, rather than pure gold bars; however, the value of these ornaments depends largely on their art layout rather than their material, and it is much harder to realize the value of gold ornaments than gold bars. Thus gold ornaments are not rational choices for investment.


"Don't try this at home, boyz and girlz!" Let an "expert" handle your 401K," and just buy some plastic beads for "onamentation".

This is what passes for "disclaimers" from "experts".

Federal_ReservesHousing Starts and Permits Plumment#14947311/17/06; 14:05:42

The decline has been shocking. In case you haven't been watching, this is THE trigger for the coming recession. As long as the unsold inventory rises they'll keep chopping employees and prices. Unemployment should start to pile up big time now! The builders aren't going to let their hammer swingers stand around idle on their job sites while they wait for a recovery that could be years away - out they will go! Then the whole support network = mortgage men, appraisars, applicance and furniture makers, carpet and tile layers, stone millers, landscapers, concrete droppers, sawmill choppers, copper millers, lumber cutters, even government inspectors too. They'll be added to the pile heap of on-going manufacturing jobs still being lost to unfair trade.. The parteeee is over. The home is no longer a ATM machine which can be used to fund the outrageous spending habits of US consumers.

Keep an eye out for a huge spike in job claims, and panic in "WASH"ington DC. I'm sure they'll try to hold everything together till past the holidays, but after that LOOK OUT BELOW!

mikalAnother derivation of an old theme (history repeats)#14947411/17/06; 14:14:30

The Biggest Bubble of All - Derivatives Trading Soars to $370 Trillion – it will be the root cause for global depression | Alan Hershey | Nov. 17, 2006 | Excerpt:
"An interesting data came out from the Bank for International Settlements. The global market for derivatives soared to a record $370 trillion in the first half of 2006. It is the highest ever and the bubble is bigger than any one can imagine.
The kind of euphoria in derivative trading has never been seen before. The amount of outstanding credit-default swaps contracts jumped by 60% at the end of last year. This year the rise is even faster. It is a typical pyramiding technique. Money is creating false concept of money and that in turn is creating ever lager conceptual money. When the tide blow off and balloon bursts, the catastrophe will be unimaginable. The 1929 debacle and resulting depression will be miniscule to what is coming.
The derivatives were initially designed for hedging. It has now become the instruments of trade. An example of what can happen is as follows."

"The complacency level, the sentiment indicators and above all the fundamentals are all ready to make the market collapse big time."
Mikal -> Good editorial on some aspects of derivatives
of interest to any investor. Suggests too that the
type of investment advice availed by the average person
isn't nearly adequate to the task.

White HillsFederal_Reserves#14947511/17/06; 15:02:59

One thing that we could do to solve unemployement from the housing industry is repeat'Operation Wetback': How Ike Stopped Illegal Immigration From Mexico
Written by John Lillpop. "Profits from illegal labor led to the kind of corruption that apparently worried Eisenhower. Joseph White, a retired 21-year veteran of the Border Patrol, says that in the early 1950s, some senior U.S. officials overseeing immigration enforcement "had friends among the ranchers," and agents "did not dare" arrest their illegal workers.

In 1954, Ike appointed retired Gen. Joseph "Jumpin' Joe" Swing, a former West Point classmate and veteran of the 101st Airborne, as the new INS commissioner.

Then on June 17, 1954, what was called "Operation Wetback" began. Because political resistance was lower in California and Arizona, the roundup of aliens began there. Some 750 agents swept northward through agricultural areas with a goal of 1,000 apprehensions a day. By the end of July, over 50,000 aliens were caught in the two states. Another 488,000, fearing arrest, had fled the country.

By mid-July, the crackdown extended northward into Utah, Nevada, and Idaho, and eastward to Texas.

By September, 80,000 had been taken into custody in Texas, and an estimated 500,000 to 700,000 illegals had left the Lone Star State voluntarily.

Unlike today, Mexicans caught in the roundup were not simply released at the border, where they could easily reenter the United States. To discourage their return, Swing arranged for buses and trains to take many aliens deep within Mexico before being set free.

Tens of thousands more were put aboard two hired ships, the Emancipation and the Mercurio. The ships ferried the aliens from Port Isabel, Texas, to Vera Cruz, Mexico, more than 500 miles south.

The sea voyage was "a rough trip, and they did not like it," says Don Coppock, who worked his way up from Border Patrolman in 1941 to eventually head the Border Patrol from 1960 to 1973."
Nothing has changed except this time there is just more of them. But, remember we have more buses, trains ,planes and ships. White Hills

GoldiloxOperation Wetback#14947611/17/06; 16:48:07

@ WH,

The bottom-up method of OW focuses on the symptom rather than the cause. Incarcerate some employers and you will see serious attention to the issue. Besides, it takes fewer bus loads and fewer cells.

If the word gets out that there are no jobs because the employers value their freedom, many fewer will come looking for "illegal opportunity". Besides, if a few fat cats saw the insides of our jails, we might get some prison reform as a side benefit.

Just like their foolish (or phony, depending on your perspective) Drug Enforcement program, they go after "users", and ignore the well-connected sources!

Since the importers all have "intelligence service" amnesty, the "Queen Bee" is never taken out. That would interfere with "business as usual".

Chris PowellGartman flees argument with Veneroso on gold price suppression#14947711/17/06; 18:11:42

Latest GATA dispatch.

* * *

7p CT Friday, November 17, 2006

Dear Friend of GATA and Gold:

From GATA's point of view, the most interesting part of the 2006 New Orleans Investment Conference so far was today's exchange between GATA consultant Frank Veneroso of Veneroso Associates and Dennis Gartman, editor of the Gartman Letter. They had been invited to discuss, among other things, whether the gold market is manipulated.

Veneroso remarked that "managed" might be a better word than "manipulated," even as his smile indicated that those on the receiving end of the "management" might not be able to tell the difference.

The manipulation of the gold price isn't done by financial houses dealing in gold but by the central banks, Veneroso said, adding that it is done "in a formal way." He noted the June 2005 speech of William R. White, head of the monetary and economic department of the Bank for International Settlements, who admitted that central banks intervene in the currency and gold markets:

Veneroso also cited the comment made in 1999 by the governor of the Bank of England, Edward A.J. George, to Nicholas J. Morrell, chief executive of mining house Lonmin PLC, confirming that there was aggressive intervention by central banks to suppress the gold price following the price spike after the first Washington Agreement on Gold that year:

Veneroso said he had received from an official of a major central bank complete confirmation of this surreptitious intervention against gold.

Gartman's response to Veneroso and the gold price suppression issue was simply to default. "Who cares?" Gartman said. "The damn stuff is going up." He added that he was "in awe" of Veneroso's research and that done by GATA Chairman Bill Murphy but considered it all "a waste of time."

Unfortunately a fire alarm went off soon after Gartman's made these remark and the conference had to be evacuated briefly before anyone had the chance to explain to Gartman, if he really didn't know already, that anyone invested in something that might be valued at a much higher price but for surreptitious government intervention in a supposedly free market might have PLENTY of reason to care.

The exchange between Veneroso and Gartman suggested again that the gold price suppression issue simply can't be discussed honestly with most people who would be part of the world's financial establishment, the evidence of that suppression having become not only so overwhelming but also so dangerous to the establishment.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

TownCrierFederal_Reserves,#14947811/17/06; 18:27:00

"...the whole support network = mortgage men, appraisars, applicance and furniture makers, carpet and tile layers, stone millers, landscapers, concrete droppers, sawmill choppers, copper millers, lumber cutters, even government inspectors too."

Heh heh... your lovely alliterative list gave me an unexpected chuckle, as the voice came to mind of Harvey Korman, in "the role of a lifetime" (wink) as Attorney General Hedley Lamarr, rattling off his colorful list of "Help Wanted" in one breath:

"I want rustlers, cutthroats, murders, bounty hunters, desperados, mugs, pugs, thugs, nitwits, halfwits, dimwits, vipers, snipers, con-men, Indian agents, Mexican bandits, muggers, buggerers, bushwhackers, hornswogglers, horse thieves, bulld%kes, train robbers, bank robbers, @$$kickers, sh**kickers, and..."

Apropos of nothing, really, but I guess to make this post topical, some could say his was a prime example of government proactivity in trying to stimulate the economy! Do the modern efforts really do much better? If something of governmental origins is "trickling down", I'm inclined to say "Eeeww!"

BTW, "Blazing Saddles" was ranked #6 on AFI's list of top 100 comedies. I guess that officialy makes it Hollywood "gold".


Chris PowellNew York museum shows glory of gold, if not central banking#14947911/17/06; 18:46:20

7:25p CT Friday, November 17, 2006

Dear Friend of GATA and Gold:

Here's a story about the opening of a fascinating exhibit about gold at the American Museum of Natural History in New York, but it contains a terrible error. It reports that all the gold ever mined totals "330 million tons." The World Gold Council estimates that the total gold mined as of 2001 was only "145,000 tonnes," and yearly gold production since then has been less than 3,000 tonnes.

Of course all the paper money printed since central banks escaped the discipline of a monetary system tied to gold may weigh far more than 330 million tons, and all the money created by central banks and investment houses out of mere electrons in the last few years weighs nothing at all. That may not make for much of an exhibit about the glory of central banking.

But the inference that can be drawn from the story about the new gold exhibit is sound: This is the age of infinite money, and we now joyfully await the age of infinite goods and services.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

New York Museum Shows Glory of Gold

By Deepti Jajela
Associated Press
Friday, November 17, 2006

NEW YORK -- It has been used to crown kings and fill cavities, for high-end jewelry and high-flying space travel.

Gold has long represented wealth, power and prestige, and a new exhibit showcases just how remarkable this rare and precious material is. "Gold" opens Saturday at the American Museum of Natural History and runs through Aug. 19.

Gold is a unique mineral in a number of ways, said Jim Webster, one of the curators for the show -- it's malleable, so it can be stretched into the slimmest of wires or flattened into the thinnest of sheets. It's reflective, which is why it has been used on astronauts' helmets to reduce glare.

It can be worked and handled in its native form, right out of the ground, and doesn't need to be heated or smelted like other minerals such as copper. And it doesn't really tarnish or corrode, so even coins on sunken ships that spend hundreds of years on the ocean floor can be found in perfect condition.

"It's just amazing, the impact it's had," Webster said. "Most cultures that have run across it have incorporated it as a symbol of power, strength and authority."

And, of course, it's got that lovely glow and luster to it, the only mineral that naturally occurs in that yellow color.

That spectacular shine is on full display in the museum's exhibit, which contains about a ton of gold. Divided into sections, the show begins with the geology and mineralogy of gold, showcasing the various forms in which it can be found, such as a 2.2 pound nugget taken from the museum's collection.

The next section looks at its physical properties, like its heavy density. (Those movie scenes, where someone takes off carrying a bag full of gold bars? Um, not likely. The bag would weigh hundreds of pounds.) Visitors will be able to walk through a special room, 12 feet by 12 feet by 8 feet, that's completely lined with 22.5 karat gold leaf to see a physical demonstration of how thin gold can get. Gilding the entire space only required three ounces of the material.

Another section focuses on gold's cultural and artistic importance, its usage in jewelry everywhere from South Asia to the collection at Cartier, which contributed a breathtaking diamond and gold necklace. Further on, its economic importance takes center stage, with old coins and a mind-boggling loan from the Federal Reserve Bank of New York, which lent 27 gold ingots. The Federal Reserve's vault is 80 feet below ground and holds $147 billion worth of gold bullion, the world's largest collection of gold used for monetary purposes.

All this impact, for a mineral that isn't even that common. The exhibit points out that in all recorded history, just over 330 million tons of gold have been ever been mined. Contrast that to the millions of tons of other minerals that are mined every year.

"All of human history, all the impact it has had, all of that," Webster said, "we make more iron in 1 1/2 hours."

The museum has programmed lectures and events to accompany the show. It will travel, but a schedule had not yet been released.

* * *

The exhibit's Internet site can be found here:

USAGOLD Daily Market ReportPage Update!#14948011/17/06; 19:14:51">
The Daily Gold Market Report has been updated.

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Friday Market Excerpts

November 17 (from MarketWatch) -- The December gold contract closed up 80 cents to close at $622.50 on the New York Mercantile Exchange after trading as low as $614.50, its weakest intraday level since Nov. 1.

The dollar fell against the euro and yen Friday, retreating from earlier gains on market talk that a major hedge fund is in trouble.

"Nothing like a bit of alleged hedge-fund trouble to slice several more layers off the value of the U.S dollar," said Kitco's Jon Nadler, an investment-products analyst.

"Couple that scare with persistent chatter about presumptive Chinese diversification out of the greenback and you have the makings of a run for the exit doors," he said.

"Gold, for the moment, will have to prove itself on the pivotal factor that has historically been most reliable: the value and the perception of future value of the U.S. currency," said Nadler. Data showing inflation at the retail level was tamer than expected in October -- that followed data from earlier in the week showing a bigger-than-expected drop in wholesale inflation -- likely helped cap the gains in gold, which is often viewed by investors as a hedge against inflation.

"In that context, gold remains confined to the $608-$631 range and will need to make a break for either end of the scale in order to establish a more defined course," he said.

"Ahead of a Thanksgiving weekend, trade quieted down, leaving the market ready for a quiet week with little activity expected," said Julian Phillips, an analyst at GoldForecaster.

"But with the London market dominant, perhaps the true expression of the physical gold market will be made," he said.

"Certainly global influences will reign over U.S. ones."

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

The Invisible HandThe world and its order (or otherwise) at this hour#14948111/17/06; 22:15:39

dollar-IFMS can no longer REPRESENT enough real wealth

BECAUSE it can no longer be kept "hard"

THEREFORE, the dollar-IFMS has become unmanageable,

gold being the STATIC which has been introduced into the transmission of information through dollar prices

"One of the major adverse effects of erratic inflation is the introduction of a STATIC, as it were, into the transmission of information through prices. ("Free to Choose", p. 17)

"Static electricity" is an accumulated electric charge at rest, that is, one that is not moving (Tillery, Enger and Ross, "Integrated Science", McGrawHill Higher Education, 2004 int’l edition, p. 107)

The presently onrushing breakdown crisis of the entire world's present monetary financial system is being outlined here:

The pivotal feature of the world crisis now spelling doom for a U.S. under a continuation of a George W. Bush Administration, is the presently onrushing general breakdown-crisis of the entire world's present monetary-financial system. As I emphasized, once again, from Berlin, in my Oct. 31, 2006 international webcast address and remarks, there is no effective reform which could be undertaken successfully within the framework of the existing world monetary-financial system.

and here:

The neo-cons are shameless SOPHISTS, who have no problem distorting the truth beyond recognition--if it suits their goal of perpetual power. Will the Sunni Arab lions and the Israelis be so stupid as to walk into this trap?

As F.C. Copleston, S.J., says in Volume I of his "History of Philosophy" (Image Books – Doubleday)

Early Greek philosophy was only interested in cosmological speculation, trying to determine the ultimate principle of all things.
The Sophists moved the interest of philosophy from Object to Subject, from the Cosmos to Man himself (p. 78)

The cosmologists wanted to find out the OBJECTIVE TRUTH about the world,
they were in the main disinterested seekers after truth.
The Sophists were not primarily intent on OBJECTIVE TRUTH,
their end was practical and not speculative. (p. 83)

The Sophists advocated relativism and scepticism. (p. 85)

Against this relativism, Socrates and Plato reacted, endeavouring to establish the sure foundation of true knowledge and ethical judgments. (p. 95)

One Sophist was Protagoras (born 481 BC).
He argued that "man is the measure of all things, of those that are that they are, of those that are not that they are not (p. 87)

Some say that by "man", Protagoras does not mean the individual man, but man in the specific sense.

The meaning of his dictum is thus
-NOT "what appears to you to be true is true for you, and what appears to me to be true is true for me"
-BUT that the community or group or the whole human species is the criterion and standard of truth (p. 88)

I thought this philosophical excursion was interesting to "see" why goldbugs are considered lunatics.

Let's return to our subject, the present world order or otherwise.

ASTANA. November 17, 2006. KAZINFORM /Aigul Tulekbayeva/ Shanghai Cooperation Organization: History. Problems. Prospects. round table is being held at the Gumilyov Eurasian National University.
Within the framework of the round table Askhat Orazbai, charge d'affaires of Kazakh Ministry of Foreign Affairs and national coordinator of the SCO activities from Kazakhstan, has stressed SCO proved to be an authoritative international organization, "essential factor" of foreign relations and key element of present world order

How's the dollar-International Financial and Monetary System (IFMS) doing in the present world order?

Oil goes down with $2.5 to $56.

Is there real nobody (no oil farmer) any more who wants to save the dollar-IFMS?

SOMEbody sent me however a chart without URL comparing the Dow and interest rates (IR) in the period 1960-1980.

This chart shows that the Dow was flat and IRs rising.

In that period, our masters wanted to keep the dollar-IFMS "hard" in order to enable it to REPRESENT enough real wealth.

This representation can no longer be achieved because the dollar-digit volume has increased in genuine debt form (no credit).

That was 1960 -1980.

Since 1981, the Dow has multiplied by 12.

Everything is connected.

Dow multiplied by 12 since 1981 should entail that the price of gold should also have done something like that.

And what do we see?
Everything else did it, but gold did not.

This is the STATIC which has been introduced into the transmission of information through prices.

The dollar-IFMS has been able to develop at the expense of unfree (governed) gold.

The degree of virtuality of this dollar-IFMS wealth.
What does this mass of dollar-trillions in fact REPRESENT?
How will our masters keep this increasing mass liquid?
Answer: By always putting more of the same into circulation, disproportionally with the increase of the physical aggregate.
This is what one Nobel prize winner outlined in his childishly simple inflation theory.

But nobody listens.

The dollar-IFMS has become unmanageable.

Meanwhile, the playground has been moved to Melbourne this week-end.

[Australian Treasurer Peter Costello, the meeting's chair, said]
The demand and supply effects of China and India's voracious appetites for oil and other energy-producing resources will be a key topic in delegates' minds.
"I want to see an energy freeway between Australia and East Asia where we're supplying needs that a growing East Asia will have," referring to his desire to establish continuity of supply and demand in which in prices are set in a TRANSPARENT MARKET.

The same lunatics at BusinessWeek are reporting that
US calls for China to reform its yuan

A currency market which is so transparent that the dollar-IFMS removed M3?

What IS the joke?

Hank and Gordon, where are you this week-end?

Peculium Aurum12x#14948211/17/06; 23:58:46

To the hand no one can see, you said:
Dow multiplied by 12 since 1981 should entail that the price of gold should also have done something like that.

Try a different date like 1965,
1. when a common Double Eagle
$20 Gold piece was selling for $55
(Yeomen Red Book on coins)
2. The dow was around 950
3. Averge USA home Apx. $18,000
4. Gas, 20 to 25 cents a Gal

I think wou will find Gold has kept up. And 1980-82 shows
us the wealth potection that Gold will provide during unstable times.

The Invisible HandBlair has a clue about the Iraq war ...#14948311/18/06; 00:08:38

... but is a moron re oil.
But was the Iraq war not about oil?

Another summit this week-end

Fears of a recession mount as the number of homes being built plummets. Ambrose Evans-Pritchard reports
In the once booming neighbourhoods of Arizona and Nevada, "for sale" signs are being replaced by even gloomier "foreclosed" signs.

Equity and commodity contracts grew at 17 per cent and 18 per cent respectively, according to the biannual report from BIS.
Almost 90 per cent of all contracts measured by notional amounts had one leg denominated in US dollars, compared with 40 per cent for the euro and 25 per cent for the Japanese yen.

Tony Blair has conceded on Arab TV that the invasion of Iraq had been a mistake;jsessionid=OSYRAHLF1LZWZQFIQMFSFF4AVCBQ0IV0?xml=/n.
Blair has a clue about the Iraq war.

Speculation is rife that Gordon Brown will raise petrol duty for the first time in three years.,,1951151,00.html
The Invisible Hand (11/17/06; 22:15:39MT - msg#: 149481)
The world and its order (or otherwise) at this hour
How's the dollar-International Financial and Monetary System (IFMS) doing in the present world order?
Oil goes down with $2.5 to $56.
Is there really nobody (no oil farmer) any more who wants to save the dollar-IFMS?
Blair is a moron re oil.
But was the Iraq war not about oil?
How can he then have a clue about that war?

Vietnam rolled out the red carpet yesterday for US President George W. Bush and many other world leaders converging here for a weekend Asia-Pacific summit focused on the drive for global free trade

FULL SPEECH of Prime Minister Surayud Chulanont of the Kingdom of Thailand at the Apec CEO Summit in Hanoi. Vietnam
As part of ASEAN, we are forging ever closer links not only within the region, but also with economic powerhouses such as India, China and Japan. ASEAN plans to become a free trade area by the year 2010 and an ASEAN Community by 2020 or even earlier. At the ASEAN Summit in Cebu, the Philippines, next month, the region's leaders will discuss how to expedite this process further.

Asia-Pacific leaders are to pledge to tackle a deadlock in global trade talks at a key regional summit in Vietnam.
In a draft statement circulated before the Asia-Pacific Economic Co-operation (Apec) forum, the leaders say they will take the lead by making concessions.
World Trade Organization (WTO) talks collapsed in July after countries failed to reach agreement on subsidies.

China will speed up economic restructuring and the transformation of pattern of economic growth. "We will endeavor to develop a circular economy, lower energy and resources consumption and build a resource-conserving and environment-friendly society and ensure sound balance between economic development, population, resources and environment."

Canada will not "sell-out" its position on human rights to cash in on trade and investment with China, Prime Minister Stephen Harper said Wednesday, firmly putting his government's stamp on relations with the Communist economic powerhouse.

APEC 2006 Summit - Ha Noi, Vietnam
The upcoming APEC Summit will be held in Ha Noi, Vietnam in the fall of this year. As APEC 2006 host, Vietnam has selected the following theme to guide discussions throughout the year: "Towards a Dynamic Community for Sustainable Development and Prosperity."
Canada's APEC priorities for 2006 are:
1.To advance key Canadian trade policy interests including progress in the Doha Round, our regional trade policy objectives, and making the Asia-Pacific region more accessible to Canadian businesses through trade facilitation, transparency and anti-corruption.
2.To enhance security in the Asia-Pacific region by expanding adherence to counter-terrorism agreements, capacity building, enhancing health security and infectious diseases strategies, and promoting human security, including emergency preparedness.
3.To promote private sector development in Asia-Pacific by supporting policy measures that benefit small, medium and micro-enterprises, strengthening legal infrastructure in developing economies, and narrowing the digital divide.
For information on APEC 2006, please visit the APEC - Vietnam 2006 Web site.

Here's the APEC - Vietnam 2006 Web site

Here's their joint statement

The joint statement says nothing.
So, it could be Melbourne or … Cebu

Singapore's Ambassador to Viet Nam, Lim Thuan Kuan, spoke to Viet Nam News on the occasion of his country's National Day today.
How have Viet Nam and Singapore worked together in regional and international forums?
Viet Nam and Singapore work together at many regional and international forums. The co-operation is very broad and so I shall only highlight two examples here – ASEAN and APEC.
Viet Nam joined ASEAN in 1995. As fellow ASEAN members, Singapore and Viet Nam have worked together to fulfil ASEAN's goals of accelerating economic growth, social progress and cultural development in the region. Both Viet Nam and Singapore have worked towards closer integration of ASEAN. ASEAN meetings are also where our leaders can meet and discuss important issues of interest to member countries.
As the chair of APEC this year, Viet Nam has worked tirelessly to host APEC's meetings. APEC's geographical scope is unique in the world as it spans the Pacific Ocean to bring together a diverse membership to co-operate on a vast array of issues. Singapore fully supports Viet Nam's Chairmanship and we look forward to the successful APEC Summit in Ha Noi at the end of the year.

The Invisible HandPeculium Aurum#14948511/18/06; 01:21:18

peculium -i n. [small property , savings]; esp. [the savings of slaves and sons].

aurum -i n. [gold; anything made of gold , gold plate, coin, a cup, ring, etc.; the golden age].

Why is
Peculium Aurum (11/18/06; 00:16:03MT - msg#: 149484)
identical to
Peculium Aurum (11/17/06; 23:58:46MT - msg#: 149482)
12x ?

The Invisible Hand (11/18/06; 00:08:38MT - msg#: 149483)
Blair has a clue about the Iraq war ...
was not identical with
The Invisible Hand (11/17/06; 22:15:39MT - msg#: 149481)
The world and its order (or otherwise) at this hour


Reread my
With Chinese Freegold from a reserve currency to a world standard
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

geHedge Fund Failure Rumors#14948611/18/06; 01:25:26

The Invisible HandI was wrong ---#14948711/18/06; 02:45:18

I will be wrong again!

China has so far not been put under pressure at a Group of 20 meeting of finance ministers and central bankers to revalue the yuan, People's Bank of China governor Zhou Xiaochuan said Saturday.

The Invisible HandVeneroso - Gartman : " Who cares?"#14948811/18/06; 02:50:04

Mr. Pauwels:
Gold and its price have been governed since 1933.
Why re-invent the wheel (gold-governance) since 2000 ?
330 million tonnes of gold x $600/ounce = $ 6,600 trillion

The Invisible HandThe Muppett Show is back!#14948911/18/06; 03:04:32

Yes, I know, one shouldn't laugh at somebody's name.
But do you remember the Muppett Show with KERMIT The Frog & Fozzie Bear?

Surging demand for oil and minerals from fast growing economies China and India have benefited commodity powers like Australia, while fanning concerns over the emergence of unstable supplies and market distortions.

IMF managing Director Rodrigo de Rato told reporters Saturday that governments have no power to affect the value of major currencies and should leave that task to markets.
"The markets are the ones who fix the value of the most important currencies and governments won't be able to affect that," de Rato said.

On Friday, U.S. Deputy Treasury Secretary Robert KIMMITT renewed Washington's call for China to move faster in reforming its currency, the yuan.

"We believe that the Chinese need to accelerate the movement of their exchange rate to reflect underlying market conditions," KIMMITT told reporters.

As I said:
Meanwhile, the playground has been moved to Melbourne this week-end.
[Australian Treasurer Peter Costello, the meeting's chair, said]
"I want to see an energy freeway between Australia and East Asia where we're supplying needs that a growing East Asia will have," referring to his desire to establish continuity of supply and demand in which in prices are set in a TRANSPARENT MARKET.
The same lunatics at BusinessWeek are reporting that
US calls for China to reform its yuan
A currency market which is so transparent that the dollar-IFMS removed M3?
What IS the joke?

The Invisible HandThe Muppett Show already revisited#14949011/18/06; 03:46:31


BEST ARTICLE (Leap/E2020) - December 2006
Dollar-Real Estate-Stock Markets:

US consumer's insolvency, a catalyst of the impact phase of the global systemic crisis.
Extract of the GlobalEurope Anticipation Bulletin N°9

The American mid-term elections have now passed and, only a week later, as announced by LEAP/E2020 in GEAB N°8 of last October 15, the "euphorisation" of US voters/consumers and world financial players seems to have already passed wit them. The development process of the global systemic crisis has resumed its course, artificially stopped last July due to the upcoming mid-term elections, as shown by the recent changes in the Dollar's value and by the latest US economy indicators. In parallel, a series of topics which had curiously disappeared from the pages of financial media these last months is reappearing, such as the end of the "carry-trade" based on the Yen[1], increasing fears of the risk of implosion of the market for derivatives and "hedge funds"[2] and of course the uninterrupted fall of US real estate[3] with its procession of negative consequences on American growth[4] (all these developments generating from now on increasing reflection as to the health of the US banking sector, one depending more and more on unsound debt[5]). For the team of LEAP/E2020, all these trends, which mark the beginning of the impact phase of the global systemic crisis, have a common catalyst, and that is the insolvency of the US consumer in the framework of a generalized degradation of the quality of credit to all US financial and economic operators[6].
Very concretely, this November issue of GEAB sounds two "LEAP/E2020 Alerts":
- The first relating to banking and finance sectors which, by the way of "hedge funds" and "bad quality credit", will be at the centre of the impact phase of the global systemic crisis;
- And the other, which again amplifies the Alert published in GEAB N°4, relating to European real estate, with as an illustration, an analysis of the market trends of the British and French real estate.

The Invisible HandThe latest US-EU war (of words)#14949111/18/06; 06:16:06

Bilateral US trade talks with three big Asian economies were progressing well, Susan Schwab, the top US trade official said on Friday, as she played down signs that they appeared to have stalled.
In an interview at the Asia-Pacific Economic Co-operation (Apec) forum in Hanoi, Vietnam, Ms Schwab claimed that the bilateral trade deals would boost global trade liberalisation, while the European Union's version of such agreements might well reduce it.

The Invisible HandWhere's Hank?#14949211/18/06; 06:21:21

Instead of being in Melbourne, Gordon is Basra.

BASRA (Reuters) - Chancellor Gordon Brown flew into Iraq for the first time on Saturday and pledged an extra 100 million pounds to help rebuild the country.

The Invisible HandOn Monday, Hank will be in New-York#14949311/18/06; 06:32:41

Treasury Secretary Henry Paulson is scheduled to speak about the competitiveness of US capital markets in New York on Monday.

Where he's now, I don't know.

Couldn't resist:
Goldman Sachs Chairman Hank Paulson Calls For Action To Restore Investor Confidence
Wednesday, June 5, 2002

How does Hank intend to do that if the Melbourne Muppett show goes on without the Secretary of Treasury?

The Invisible HandSince the elections ….#14949411/18/06; 06:46:28

the task of the Secretary of the Treasury has been redefined as

[restoring] the long-term financial stability of Social Security, the national retirement program, and Medicare, the government benefits for the elderly and disabled, as baby boomers head to retirement.


The guy thinks that's possible within the environment of the global systemic crisis. So why should he be in Melbourne?

GoldiloxSome Thoughts on Gold and Silver#14949511/18/06; 06:47:19


This week gold has held the range of $614 to $630 an ounce and silver has been between $13.17 and $12.50. Right now gold is $621.70 and silver is at $12.80, both in the middle of this week's trading range. A five percent range for silver and 3% range for gold is nothing out of the ordinary, but note how the mining shares are closing the week close to their lows. Don't let the red ink in the mining shares, especially from yesterday, throw you for a loop. If you take a look at the stock prices relative to the stock options that expire today, the downside volatility is easily explained.

I'll use a couple of the mainstream mining companies as an example for what I believe is happening in the precious metals arena to close the week. Newmont opened the week at $46.70 and has dropped to $44.30 as I write. There are 16,415 call options at the strike price of $47.50 and 14,645 at $45.00. The $47.50 calls were not a problem for the call writers, but earlier in the week the $45 calls represented a liability to the writers. With a close below $45, the calls are worthless. As I write, NEM stands at $44.28.

Coeur d’Alene Mines touched a high of $5.24 yesterday, but looking at the call options there are 59 calls at $2.50, 5,261 calls at $5.00 and 69 calls at $7.50. The only significant strike price is $5.00. Yesterday CDE closed at $4.97 and now stands at $5.04. Another nickel lower, and the $5.00 calls will be worthless at expiration…nice for the writers as they pocket their profits. Take a look at GG, SLW, PAAS, etc. and they are all singing the same song!

Another thing that told me the downside volatility was tied to the options expiration is the fact that the juniors didn't sell-off like the larger-cap shares did yesterday. The junior mining shares market capitalizations are so small; they can't write options against the stock prices. There was not as much motive to sell the juniors down like they have with the larger cap shares with options attached.

This is temporary trading volatility. If you want to be long the precious metals mining shares, this is normal business. To that point, be aware that the options for December gold and silver contracts expire on Monday, 11/27. There are really only three trading days next week with the Thanksgiving Holiday upon us, so it won't be too difficult to keep the metals in check until options expiry on 11/27. I believe we will see the upside in gold and silver following the options expiration of the December contracts.


Leave us not forget the power of the derivative monster to "manage" short-term swings.

Goldilox2nd Hour Guest Expert#14949611/18/06; 06:55:41

Jim's guest today is Jonathan Knee, author of "The Accidental Investment Banker: Inside the Decade that Transformed Wall Street"

Book reviews:

From Publishers Weekly
If "investment banking" gives you visions of stodgy New York geezers harumphing and gufawwing in a black-suited gaggle, Knee's look at high finance in the '90s will change that. A thumping ride across deep waters, Knee evokes the precarious, risky thrills courted by businesspeople great and small. Smart, clever and unfailingly articulate, Knee made, in the nineties, a seemingly sensible career choice: to become a startlingly well-paid investment banker among prestigious big boys (names are named) at Goldman Sachs, and later Morgan Stanley. Clear-eyed enough never to give his whole life over to banking-as did many of his colleagues-Knee maintains a reporter's sense of detachment, observing how the decade in question turned into an economic house of mirrors as money-guzzling dotcoms bloomed and withered, playing havoc with long-established rules and mores, nurturing an era of incompetence and brawling, veiled in the traditional pseudo-gentility of a privileged profession: "The goal was to do deals, generate revenue, and be noticed. ... whatever the cost, particularly when someone else bore that cost." Are bankers the "greediest people in the world?" Is an MBA one of the "poorest educational choices?" As the book progresses, these questions take on the quality of a whodunnit mystery, in which not only is everyone a suspect-almost everyone is guilty. Funny and knowing, this business memoir debut should appeal to a wide swath of business veterans.
Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

From Booklist
Knee, an investment banker at Goldman Sachs for four years beginning in 1994 and at Morgan Stanley from 1998 to 2003, describes the operations of these firms and explains the role of investment bankers and how "deals" are done. He weaves a fascinating tale of his employers and a multibillion-dollar industry, which was transformed culturally and structurally by extraordinary growth and then devastating retrenchment at the beginning of the twenty-first century. Knee mourns what he contends is the loss of historic integrity in the transition from boom to bust and describes many industry changes, including competition from hedge funds and LBOs (leveraged buyout firms). This book will attract those in the -investment-banking community as well as students of Wall Street. However, the author's lavish praise of certain individuals at Goldman Sachs and Morgan Stanley set against his stinging criticism of others reflect his judgment and perhaps that of his anonymous sources. His view of reality may not be shared by all. Mary Whaley

The Invisible HandBIS to meet on Monday in Melbourne#14949711/18/06; 08:12:32

As China has posted record trade surpluses, its foreign reserve stockpile has surged to more than $1 trillion, creating a fresh worry for economic leaders: the possibility that it would diversify out of the dollar and trigger wild currency swings.
Zhou [head of the People's Bank of China} said the central bank began diversifying its reserves years ago after the 1997-98 Asian financial crisis, but he said he could not be specific about the makeup of reserves.


saying only that China sought to have safety and liquidity while still achieving reasonable returns.
Rato of the IMF focused on the risk of inflation, despite the past few months' declines in the price of oil.

ECB officials will be speaking a number of times throughout the week including Trichet,


Meanwhile the Swiss Franc also ends the week slightly lower after SNB President Roth said last weekend that the currency's attractiveness as a safe haven asset has diminished with the launch of the Euro.
The G-20 meeting is being held in Melbourne Australia this weekend along with the BIS meeting. The last time we heard from central bankers at one of these meetings, their comments were mostly targeted at the Japanese Yen. We would not be surprised to hear the same this time around.

[Bank of Korea Gov. Lee Sung-tae] is also scheduled to attend the Bank for International Settlements meeting for central banks' governors in Sydney on Monday to discuss the global economy and financial markets, the nation's central bank said.

What the heck, could they discuss without Hank and Gordon?

First, although [the Washington Agreement] does not have the legal force of an international treaty, it is nonetheless an international agreement signed by each central bank governor, each having legal responsibility for his country's official gold reserves. For the UK, the Governor of the Bank of England signed on behalf of HM TREASURY, where that legal responsibility rests. The agreement will be monitored by the Bank for International Settlements, with a dedicated unit to be set up there for this purpose.
While the agreement is between European central banks, including the ECB, it was put together through the Group of Ten central bank governors who meet regularly in Basle on a monthly basis. It therefore has a broader dimension in that the United States and Japan have been at least present at the G10 discussions and in agreement with the spirit of the agreement. Indeed, the Japanese government issued a statement in support the following day on 27th September stating that it also will not be selling or lending gold. The United States had of course stated its intention not to sell earlier on 20th May this year and neither the US nor the IMF lend gold.

HM Chancellor of the Exchequer being in … Basra.

While Paulson is in charge of Medicare and Social Security,
Brown is in charge of foreign policy. Ah yes, the war was about oil.

The Invisible HandHere's what G-20 and BIS could be talking about#14949811/18/06; 08:33:03


Reform of the {IMF and the World Bank], known as the Bretton Woods institutions after the New Hampshire resort where they were conceived, is the first topic on the G20 agenda, and perhaps the most divisive. But Australia argues that unless European states agree to a smaller share of the cake, and give Asia its fair share of voting rights, then they will retain a large share of a shrinking cake, as the IMF loses its relevance.
The IMF and the Bank of International Settlements worry aloud that with each year, the risks are rising that lenders could suddenly pull back, choking off the supply of funds, and sending the US, and the world, into recession.

A fourth issue on the crowded agenda for this weekend's meeting is energy security.
But the sources of that oil would be drying up.


17 November 2006
The volumes outstanding of over-the-counter derivatives expanded at a brisk pace in the first half of 2006. Notional amounts of all types of OTC contracts stood at $370 trillion at the end of June, 24% higher than six months before. Growth was particularly strong in the credit segment, where the notional amounts of outstanding credit default swaps (CDS) increased by 46%. Rapid growth was also recorded in other market segments. Open positions in interest rate derivatives rose by 24%, while those in FX contracts expanded by 22%. Equity and commodity contracts grew at 17% and 18%, respectively. Gross market values, which measure the cost of replacing all existing contracts and thus represent a better measure of market risk at a given point in time than notional amounts, increased by 3% to $10 trillion at the end of June 2006.
The following trends are noted in the statistical release:
- Rapid growth in credit default swaps despite an increase in multilateral terminations;
- Accelerating growth in interest rate and FX products;
- Slowing growth in commodity and equity derivatives;
- Concentration in OTC derivatives markets remained stable.

CoBra(too)@ Henri - Thanks#14949911/18/06; 09:25:12

There never once was a soft landing - ever!

... and while we watch the accelerating descent of the reserve currency, from floor to floor, the fallout of the crash before the inevitable impact can be lessened by cushion your portfolio by reality and insurance!

... And in essence free gold any other great ideas are just that - ideas; As long the PTB (or PPT)are in charge gold will never be entirely free - though it will stairstep to new heights and that's pro'ly in the best interest of the rest.

As Scruffy says - BCBN

The Invisible HandOn which market will Freegold be traded?#14950011/18/06; 09:36:59,1-0@2-3234,36-831701@51-813061,0.html

LE MONDE 07 November 2006
A fin 2005, notait la Banque des règlements internationaux (BRI), la banque centrale chinoise détenait 20 % du total mondial des réserves de change.
The Bank for International Settlements noted at the end of 2005 that the reserves of the People's Bank of China equal to 20% of the world's exchange reserves.

It is therefore normal that China will take the lead in Freegold.

While preparing yesterday a post which I didn't post, I was struggling with the question on which market will Freegold be traded.

Here's what led me to the struggle.

I had posted:
The Invisible Hand (11/16/06; 18:25:12MT -
msg#: 149444)
We learn from history …
Here's an FT article which seems to indicate that we
are noticing the early signs of the collapse (reverse
big bang) of stock markets.

Yesterday, I found this on the same story
There is something to be said for a stock market which
is entirely neutral of the vested interests of its
users, even if it is a monopoly.

Now I even find this:
Belgian (10/15/03; 03:10:14MT - msg#: 110413)

Many keep on struggling with the definition (understanding) of what exactly "freegold" means.
Freegold is Gold that is trading in a FREE GOLD
Most are convinced that Gold is trading freely within a gold market that they consider free. We can all buy and sell physical gold, can we !? Yes you can ! But...

The reason WHY we can buy/sell, physical gold (in homeopatic quantities) is because we prefer to trade paper gold above physical gold !!!
We have been "conditioned" into paper gold bugs by the perfidious monetary system. Gold imprisonment has been made very convenient.

The illusion of the virtual free gold market can live on for as long as there remains physical gold available for those contrarian sceptics that barbaricly keep on preferring physical above paper. That's why a minimum of physical gold must remain available under all circumstances as to not provoke any rush from paper gold into physical gold...

As to keep the *illusion* of freegold in a free gold market, alive. Paper gold IS Unfree gold. Paper gold can ALWAYS remain managed, because there will always be more than enough paper available under any circumstances...and the necessary homeopathic amounts of Physical, as well.

TIH, try to argument understandably why your questionaires should "de-paperize" themselves before the paper circus defaults Big way. Wish you all the luck possible with your endeavors.

8/10/98 Friend of ANOTHER FOA)
On the other hand, buying gold ON THE OPEN MARKET, using your local currency, works as a far different dynamic from selling foreign bondreserves. This action takes physical gold off the market, and in doing so increases it's value in dollar terms. Gold is and always has been the chief competitor with the dollar for exchange reserve status. The advantage here comes from the fact that governments do not run out of local currencies to use in buying gold, as opposed to selling foreign currency reserves to buy the local currency ON THE OPEN MARKET. Of course, the local price of gold goes sky high, however, in this action you are seen as taking in reserves, not selling them ofF.
Also, as gold begins to rise against the dollar, the local gold reserves are seen as assets of increasing value, backing the local currency. Under these conditions, with a stable currency, citizens will purchase more gold as it is seen as a positive asset. Not unlike a rising stock, everyone wants an increasing investment. Contrast this action against that in Korea, where everyone sold gold as it increased in an unstable currency!

What is the open market?

mikal(No Subject)#14950111/18/06; 10:05:16

Bank of America, JPMorgan Subpoanaed in US Bid-Rigging Probe | Bloomberg | November 17, 2006
GE and other firms in a probe that will
thrill the political appointees in
the de facto Dept. of Injustice.

KnallgoldTIH,awaiting an announcement for a new Gold market which never came#14950211/18/06; 11:01:00

FOA always said FreeGold will be traded in a NEW physical only Gold market,yet to be implemented.He gave a few possible places like Shanghai (do they still have no futures contract?),Dubai'somewhere in Europe (Frankfurt?Zürich? Paris?).He even gave it a name,the EBES,Euro Bullion Exchange System.It appears to largely depend on the euro as a transactional currency.

What if it starts silently,no starting shot fired?Case:Already did and now building up a big-float stealthly,for being ready for a smooth snap when the-$$$sh**-hits-the-fan?

CB2:Servus to Oööschtriich!Yes,Gold will have a "stairway to heaven".But FreeGold,free of TPTB,no,never,who said so?Free of derivatives,free of official monetary restrictions,yes.

And also to David Linkley:what a revelation you had recently !Yeah these ideas which sound like revolutions.Revolutions follow revelations!Randy already expanded on it.I will give you an example of something similar which time just has come with a vengeance and subordinates daily all governemental interests with similar vengeance.Yeah they are still trying to control/censor it,but the critical mass is way beyond THEM: the Internet! Irony has it that even someone from a governement invented it,Al Gore (just kidding)!

David, will you now also become a FreeGold revolutionarly?

Long live the Internet!Long live USAGOLD FORUM!Long live FreeGold!

KnallgoldIf you want to have a big laugh read the following bloomberg .Thanks Chris for the article#14950311/18/06; 11:21:27

And why does he eve have to say it?

"Fed's Fisher Says Dollar Likely to Stay Main Currency (Update4)

By Christopher Anstey

Nov. 17 (Bloomberg) -- Federal Reserve Bank of Dallas President Richard Fisher said the dollar is likely to remain the world's top currency in central bank reserves because of U.S. growth rates and success in containing inflation.

``It would be very difficult to replace the dollar as the central holding of central banks,'' Fisher said at a banking conference on the euro in Frankfurt.

The key attributes of a reserve currency are maintaining value by countering inflation, usage as a unit of exchange, and the size of the economy, Fisher said. By those measures, the dollar is likely to stay attractive, he said. At the same time, increased use of the euro isn't a bad thing and doesn't imply central banks will sell dollars to buy euros, he said.


``Usually it takes a large shock'' to displace the world's main currency, he said, citing historical examples of the pound and Dutch guilder. ``I doubt'' any such shock will occur to the dollar, he said. ``I'm not aware of any.''

Fisher said the Fed ``should not be questioned in any way, shape or form in terms of its firm determination not to allow inflation to creep into our society.''

Asked whether the trigger for inflation concern at the Fed is 3 percent compared with a 2 percent rate for the European Central Bank, he said ``we have no tolerance for continued inflation above 2 percent.''

Fisher said the buildup of reserves isn't likely to precipitate a financial crisis, in response to a question at the conference. "

mikalSolar Calendar News Network update#14950411/18/06; 12:55:57

Year of Pig Gold Bars Go on Sale Today | Shanghai Daily
Last Updated(Beijing Time):2006-11-18 14:00 - Excerpts:
"Investment-grade gold bullion marking the coming "Year of the Pig" will go on sale in the city today to quench investors' and collectors' thirst for the precious metal.
The bullion, which can be sold back to the issuer, is expected to prove a popular investment alternative amid the current sluggish property market and low bank deposit rates."
Mikal- A "sluggish property market and low bank deposit rates" for the LOCALS, but not yet for foreign invad, er investors. Might happen if China gives more emphasis
to pork barrel politics and/or protectionism.
But the "People's Republic" remain particular to pork bellies, pig iron, petroleum grease and now, porkish bullion.

"China Gold Coin Inc, the country's sole wholesaler of gold bars and coins, is set to issue 300 kilograms of gold bars celebrating the coming Chinese lunar new year today...

Buyers can cash the bullion in at any time they want, with buy-back prices based on gold prices in local and international markets minus a two percent commission fee.
The annual sale is always a success due to the metal's reputation as a safe haven and the buy-back option.
Gold Coin will issue three tons of gold bars this year, an increase of 21 percent from last year.
While gold prices have jumped 72 percent since the first batch of bars went on sale in 2002, few buyers have sold them back.
"Most buyers look at the bullion as a long-term investment rather than a means to make a short-term profit," Chen said yesterday.""
Mikal-> In China as in other parts of the world, prices usually mean little. But today, financial reality redefines gold wealth within the confines of currency depreciation and price inflation so that Chinese purchasing power and cost of living issues grow in importance.

mikalClarification#14950511/18/06; 13:03:20

Re: "In China as in other parts of the world, prices usually mean little." This applies to SOME other parts of the world. I mean to imply that not ALL purchases made are "price inelastic", i.e. made with little or no concern for price, though many if not most Asians and Middle Easterners and some central banks, bullion banks and dehedgers buy, borrow, swap or barter for gold this way.
mikalMagnetism of metal#14950611/18/06; 13:32:02

China issues gold bars to commemorate Year of Pig | 2006-11-18 20:44:31 | BEIJING, Nov. 18 (Xinhua) -Excerpt: "China Gold Coin Corporation issued a series of gold bars made of 99.99 percent gold on Friday to commemorate the forthcoming Year of the Pig.
The total volume of gold bars being issued in China this year is 3,000 kg, at a price of 175 yuan per gram in Bejing, the first city to issue them to the public. They can be bought in weights of 1000g, 500g, 200g, 100g and 50g.
Sales of the gold bars are expected to be boosted due to the Year of the Pig being the last year in the 12-year rotation of the Chinese lunar calendar making it a lucky and rich year, according to traditional superstition.
Add to the fact that out of the five Chinese elements - metal, wood, water, fire and earth - 2007 is the year of metal, or gold, and people are expected to snaffle up the pig bars."
Mikal-> Aye "snaffle up the pig bars"! I couldn't have said it better meself. OINK!

mikalBubbles now "synchronized"#14950711/18/06; 14:18:39

Credit Bubble Bulletin, by Doug Noland
Derivatives "Insurance" - November 17, 2006
Scroll down near the bottom for his commentary,
starting where you see the title repeated("Derivatives Insurance"). Good overview of derivatives in general and where we stand in terms of risk.

mikal@Invisible Hand#14950811/18/06; 14:51:47

I was reading your newropeans article at another forum, and thought the following excerpt (and others) to be especially pertinent to your recent discussion:

For the LEAP/E2020 team, it is from now on time to remove the ‘conditional’ from this scenario. It is currently happening throughout all the United States and constitutes a catalyst of the impact phase of the global systemic crisis. The US consumer, i.e. the US middle class, basically becomes insolvent[11], victim of overwhelming debt, a negative rate of saving, the bursting of the real estate bubble, the rise of interest rates and the collapse of US growth. All these elements are dependent, and mutually reinforcing, to plunge the United States, starting from the end 2006, into an economic, social and political crisis without precedent[13].
Very concretely, this November issue of GEAB sounds two "LEAP/E2020 Alerts":
• The first relating to banking and finance sectors which, by the way of "hedge funds" and "bad quality credit", will be at the centre of the impact phase of the global systemic crisis;
• And the other, which again amplifies the Alert published in GEAB N°4, relating to European real estate, with as an illustration, an analysis of the market trends of the British and French real estate.
This is a new extract of the GlobalEurope Anticipation Bulletin N°8, published by the think-tank LEAP/E2020 on October 15th, 2006. Newropeans Magazine wishes to thank LEAP/E2020 for authorizing the publication of this extract.)
©LEAP/E2020 (15/11/2006)
(Laboratoire Européen d’Anticipation Politique)

The Invisible HandConfirmed!#14950911/18/06; 18:30:23


Like hyper-successful businessmen in any part of the world, their minds are turning from wealth creation to WEALTH PROTECTION

SAUDI ARABIA is threatening to suspend diplomatic ties with Britain unless Downing Street intervenes to block an investigation into a £60m "slush fund" allegedly set up for some members of its royal family.A senior Saudi diplomat in London has delivered an ultimatum to Tony Blair that unless the inquiry into an allegedly corrupt defence deal is dropped, diplomatic links between Britain and Saudi Arabia will be severed, a defence source has disclosed.
The Saudis, key allies in the Middle East, have also threatened to cut intelligence co-operation with Britain over Al-Qaeda.
They have repeated their threat that they will terminate payments on a defence contract that could be worth £40 billion and safeguard at least 10,000 British jobs.
The payments, in the form of lavish holidays, a fleet of luxury cars including A GOLD ROLLS-ROYCE, rented apartments and other perks, are alleged
to have been paid to ensure the Saudis continued to buy from BAE under the so-called Al-Yamamah deal, rather than going to another country. Al-Yamamah is the biggest defence contract in British history and has kept BAE in business for 20 years.,,2087-2459780,00.htm

The Invisible HandThe week that was and the week ahead#14951011/18/06; 18:37:06

Maybe Freegold will, at the end of the day, be traded on that platform for trading shares in Europe's biggest companies, which the world's big banks are getting together to build.

Wall St WEEK AHEAD: Stocks await BLACK FRIDAY in holiday week
Trading will be at a minimum on Wall Street next week, with the market closed on Thursday for the Thanksgiving holiday, but investors' attention will quickly turn to retail sales the following day.
Among the scant data set for release next week is the final reading of consumer sentiment from the University of Michigan, due on Wednesday.
The real test of the U.S. shopper's staying power will come on "Black Friday," the unofficial kickoff of the Christmas shopping season.

THE WEEK THAT WAS: The plot thickens in the stock exchanges sag
On Tuesday, the seemingly interminable saga of the London Stock Exchange reached page 1,595 with a new sub-plot. It emerged that the world's big banks were getting together to build a platform for trading shares in Europe's biggest companies. The move would put them in direct competition with stock exchanges including the LSE, Euronext and Deutsche Börse.
The news emerged as it was revealed that Deutsche Börse was about to drop its plan to merge with Euronext. LSE shares, which had more than doubled over the past year, fell back almost £1 to 1,215

The Invisible HandThe rest of the news at this hour#14951111/18/06; 18:46:31

There is nothing accidental about the crisis we'll soon be facing.

I may have posted the first snip already some days ago.
Or perhaps it's an expanded version of the old article.

NOV 18, 2006, 10:18
Currently, the U.S. economy is held together by the slimmest of threads; literally duct-taped together by massaging all of the crucial economic numbers, pumping as much cheap fiat-currency into the system, and by "increasingly-suspicious" maneuverings in the futures markets. After the elections, they'll be no reason to conceal the rot at the heart of the system. After all, we are not facing an unforeseen catastrophe, but a planned demolition intended to increase the disparity between rich and poor to such an extent, that democracy, as we know it, will no longer be possible.
Nothing is more repugnant to America's ruling elite than the notion that every man, however broke and insignificant, can participate in our system of government.
There is nothing accidental about the crisis we'll soon be facing. Officials at the Federal Reserve and the US Treasury are fully aware of the devastating effects of massive trade deficits, increasing the money supply, and self-serving interest rates manipulations. They have set the country on the path to ruin as part of a broader scheme for remaking the global-system according to well-known precedents. In truth, the plan to modify the present system has a long history; going back to the 1980s when many of the same actors in government today were in positions of power in the Reagan administration. For the last 6 years they have been patching together their strategy; producing record deficits, unfunded tax cuts, mammoth government expansion, and doubling the money supply.

HANOI (AFP) - Russian President Vladimir Putin has touched down for a regional summit wielding key diplomatic cards on North Korea ‘s nuclear crisis and the promise of energy for Asia‘s surging economies.

William Pfaff: The midterm congressional elections demonstrate that the US public wants to get out of Iraq almost as much as the British.,,1951704,00.html

GoldiloxTimesOnline#14951211/18/06; 19:27:44

@ TIH,

The Timesonline reference loads a blank page -

Browser issues, or already pulled from circulation?,,2087-2459780,00.htm

GoldiloxRussia: Coveting the CPC, Bankrupt or Not#14951311/18/06; 19:34:52


The Russian Ministry of Industry and Energy has rejected a plan by the Caspian Pipeline Consortium to settle its $156 million tax debt and has called for an even greater increase in transit fees charged by the consortium. This could well cause oil suppliers to choose alternative methods of delivery and could bankrupt the consortium, which is operated by the U.S. oil supermajor Chevron. Employing its usual method of economic pressure, the Russian government is likely trying to put the pipeline under the control of the state oil pipeline monopoly Transneft. [more]

(additional text requires login)

The Invisible HandFreegold open market, said FOA/TG#14951411/18/06; 19:51:36

Not on the over-the-counter (OTC) market

Karl Popper revisited -
Freegold as a way to the Open Society

Over-the-counter (OTC) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. It is the opposite of exchange trading which occurs on futures exchanges or stock exchanges.

What is the Open Market?

Open market operations are the means of implementing monetary policy by which a central bank controls its national money supply by buying and selling government securities, or other instruments. Monetary targets, such as interest rates or exchange rates, are used to guide this implementation.

This is not what I am looking for.

Open Market
Weiterleitung - Freiverkehr
Open Market
Redirected – Free Circulation/Movement

Unter Freiverkehr versteht man ein deutsches Börsensegment. Der Freiverkehr zeichnet sich durch die folgenden Besonderheiten aus:
- Die Preise werden durch freie Makler ermittelt.
- Rechtsgrundlage sind die an den einzelnen Börsen geltenden Freiverkehrsrichtlinien
- Die Börsenpreise werden bei den anderen Marktsegmenten unter staatlicher Aufsicht und Überwachung festgestellt.
Free Circulation/Movement
Under free circulation/movement, one understands a part/segment of the German stock-exchange.
Free Circulation/Movement has the following particular characteristics:
-The prices are being arrived at through FREE BROKERS
-The legal bases of the price discovery process are the Free Circulation/Movement DIRECTIVES which are in force
-The prices are being established (taken into account?) by the other market segments under GOVERNEMENTAL supervision.

If the New Gold Market is an Open Market
-Who are the brokers?
-Who establishes the directives which have to be followed?
-Which government supervises the thing?

Perhaps an Open Gold Market can lead to an Open Society (not to be confused with a Free Society).

What is an Open Society?

One of the definitions, Karl R. Popper seems to offer is that an Open Society encourages individual initiative and self-assertiON. (Karl Popper, "The Open Society and its Enemies" , Vol. I "The Spell of Plato", Princeton, Princeton University Press, 1966, 5th rev. ed., p.190)

Dr Nathaniel Branden defines self-assertiVENESS as the assertiON of consciousness. This, he continues, entails the choice to see, to think, to be aware. To ask questions is an act of self-asertion. To challenge authority is an act of self-assertion. To think for oneself – and to stand by what one thinks – is the root of self-assertiON. (Nathaniel Branden, "The Six Pillars of Self-Esteem" , New York, Bantham books, 1994, pp. 119-120)

An Open Society is thus a society where one has the choice to see, to think, to be aware to ask questions, to challenge authority, to think for oneself – and to stand by what one thinks.

But I'm not interested in an OPEN Society.
I want a FREE Society.

Just as I am not interested in an OPEN gold market. I want a FREE gold market.

The Invisible HandTimes Online link#14951511/18/06; 19:57:44

does not work (final "l" was missing – sorry)

Go to the Sunday Times’ main page

The article appears on top.

The Invisible Handdirect link?#14951611/18/06; 19:59:21,,2087-2459780,00.html

direct link?
Maybe this works.

The Invisible HandFreegold is indeed silently being introduced#14951711/18/06; 20:14:14

Freegold starts indeed silently,
no starting shot being fired,
at least not by the West(-ern press).

Knallgold (11/18/06; 11:01:00MT - msg#: 149502)
TIH,awaiting an announcement for a new Gold market which never came
FOA always said FreeGold will be traded in a NEW physical only Gold market,yet to be implemented.He gave a few possible places like Shanghai (do they still have no futures contract?),Dubai'somewhere in Europe (Frankfurt?Zuerich? Paris?).He even gave it a name,the EBES,Euro Bullion Exchange System.It appears to largely depend on the euro as a transactional currency.
What if it starts silently,no starting shot fired?Case:Already did and now building up a big-float stealthly,for being ready for a smooth snap when the-$$$sh**-hits-the-fan?


Have you noticed the websites,
I needed to go to to discover that there is a BIS meeting on Monday?

I didn't find anything on the BIS website about the meeting.
The only thing I found was this BIS press release. msg#: 149498
Here's what G-20 and BIS could be talking about
17 November 2006
The volumes outstanding of over-the-counter derivatives expanded at a brisk pace in the first half of 2006. Notional amounts of all types of OTC contracts stood at $370 trillion at the end of June, 24% higher than six months before. Growth was particularly strong in the credit segment, where the notional amounts of outstanding credit default swaps (CDS) increased by 46%. Rapid growth was also recorded in other market segments. Open positions in interest rate derivatives rose by 24%, while those in FX contracts expanded by 22%. Equity and commodity contracts grew at 17% and 18%, respectively. Gross market values, which measure the cost of replacing all existing contracts and thus represent a better measure of market risk at a given point in time than notional amounts, increased by 3% to $10 trillion at the end of June 2006.
The following trends are noted in the statistical release:
- Rapid growth in credit default swaps despite an increase in multilateral terminations;
- Accelerating growth in interest rate and FX products;
- Slowing growth in commodity and equity derivatives;
- Concentration in OTC derivatives markets remained stable.

Freegold starts indeed silently, no starting shot being fired, at least not by the West(-ern press).

USAGOLD / Centennial Precious Metals, Inc.Step inside and shop at your convenience. Open 24/seven.#14951811/18/06; 20:38:06

shop for gold coins
The Invisible HandSouth of Manila#14951911/18/06; 20:44:04


Cebu, the venue for month's Asean summit, is referred to [by the people of the kapital, of course], as "the queen of the South".
Geographically, it lies however in the center of the Philippines.
Mindanao is in the South.

Siquijor is the six-village, 80,000 souls paradise island in between Cebu and Mindanao, which annually celebrates its independence "Araw ng Siquijor" on September 17


President Bush was urged at the APEC summit in Hanoi to get more involved in fighting terrorism in Mindanao.
President Arroyo urged for a greater US involvement in the peace efforts in Mindanao by including more economic and military aid to promote greater presence in the fight against terrorism in the Southeast Asian region.
Mrs. Arroyo twice made the pitch before US President George W. Bush on the sidelines of the 14th Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit here. The first was at the meeting between the US president and the heads of state of APEC members from Southeast Asia, and the second, at the "pull-aside" one-on-one meeting with Bush. ..
"Mindanao has all the ingredients of a fresh global crusade to defeat terror, to foster understanding and interfaith solidarity, to build self-determination, to fight ignorance and poverty," {Arroyo's spokesman Ignacio] Bunye said, quoting Mrs. Arroyo during her bilateral meeting with Bush at the Hanoi International Convention Center
If the Philippines were bordered by Syria, Iran and Pakistan instead of Malaysia, Indonesia and Thailand things might be very different.

HANOI, Vietnam -- Saying Mindanao could be the next theater in the global crusade to defeat terrorism, President Macapagal-Arroyo on Saturday called for a "deeper and broader" role by the United States in the peace process and counter-terror campaign on the island.
During a 10-minute "pull-aside" meeting on the sidelines of the 14th Asia Pacific Economic Cooperation (APEC) summit, Ms. Arroyo talked with Bush about the situation in North Korea, a proposed RP-US free trade agreement, and a more comprehensive US involvement in Mindanao.
"The President would like to invite a deeper and broader involvement (for the United States) in the Mindanao peace process alongside our fight against terror. This, she said, is an alliance that will benefit Asia and the whole world," Press Secretary Ignacio Bunye said in a briefing about the meeting.
Bunye said the President made the invitation after Bush assured leaders of the Association of Southeast Asian Nations (ASEAN) that his administration would not "retreat" from Southeast Asia.
When asked what a "deeper and broader" US involvement in Mindanao meant,


"The US President said the US will not stop engagement in the Far East. It will not retreat and will be active in such fora as APEC," he said.
"Mindanao has all the ingredients, (Ms. Arroyo) said, of a fresh global crusade to defeat terror, to foster understanding and inter-faith solidarity, to build self-determination, and to fight ignorance and poverty,’’

GoldendomeDeficits don't matter--Reagan proved it.#14952011/18/06; 23:00:26

If we can learn one thing from history, it's that when mutual interests of major powers come together, doomsday is just not happening—or is greatly—Greatly delayed. You can see that everyday…markets against all odds.

The best example for this is the US deficit and the always "soon to come" dollar collapse. I believe the first time that I read about this was early-Reagan era-- and I'm sure that it was around a while before that. Yet, so far--nothings happened, why? Because the powers that are- have no interest whatsoever in a major dollar decline. It will take a huge event to tip that balance over a cliff, and we can't know the event.

If one thing is crystal clear, if the worst transpires, Ben and the powers that are, where ever they may reside, will start to buy everything that can be remotely called an asset if it helps to inject liquidity. One asset class that they explicitly mention: Asset backed securities, MBS's.

Bottom line: Inflation is much more probable than deflation in the medium term. Mainstream deflation fears should be a major buy opportunity for gold, if indeed a severe recession is ahead. Just don't count on a dollar collapse as the trigger for gold prices. IF an accident happens to the dollar, the reactions of the Chinese, Japanese, and global central banks are the wild cards and up to everyone's guess. My guess is they will ALL step in to save it (the dollar) and stabilize the collective status quo.

The Invisible HandDid he see that his life work had not been useless#14952111/18/06; 23:27:52

and that his life had thus been a success?

LINK – scroll down and you'll find the English text
Thursday, November 16, 2006
Milton Friedman, the grand gentleman of libertarianism, died a short while ago as the result of an accident.
Dr. Friedman slipped in the bath and hit his head. He was rushed to hospital but passed away from heart failure while there.

As I quoted earlier today
There is nothing accidental about the crisis we'll soon be facing.

Lyrics to "Accidents Never Happen"
This song is by Blondie, and can be found on Eat to the Beat.

no i don't believe in luck
no i don't believe in circumstance no more

accidents never happen
in a perfect world
so i won't believe in luck

i saw you walking in the dark
so i slipped behind your footsteps for a while
caught you turning round the block
fancy meeting you in a smaller world after all

accidents never happen
could have planned it all
precognition in my ears

accidents never happen
in a perfect world
complications disappear

now you love me
yeah, i could tell
i never lied
i never cried
and you,
you knew so well

like the magi on the hill
i can divinate your presence from afar
and i'll follow you until
i can bring you to a perfect world

accidents never happen
could have planned it all
precognition in my ears

accidents never happen
in a perfect world
complications disappear

now you love me
yeah, i can tell
i never lied
i never cried
and you,
you knew so well

now you love me
yeah, i can tell
i never lied
i never cried
and you,
you knew so well

accidents never happen
in a perfect world
accidents never happen

If you feel this post is inadmissible, please feel free to remove it.
My point is only that some accidents may not be accidents, but may be subconsciously caused or willed by the "victim".

The Invisible HandALARM!#14952211/19/06; 04:48:38

Paul Volcker ties up with deranged gold bugs!

Reviewing the systemic case for gold investment
The twin US deficits threaten to undermine the US dollar within the next two-and-a-half years. Not the argument of a deranged gold bug but the former Federal Reserve Chairman Paul Volcker last week. Another Washington big name Robert Rubin also called for higher taxes to rebalance the budget to save the US dollar.


I'm no longer the only idiot in the village.

The Invisible HandUS Bankers Warn of Financial Breakdown#14952311/19/06; 04:55:15

President George W. Bush, and most of the financial pages of the U.S. press, may still be touting the "wonderful economy" in the United States, but over recent days, warnings of a systemic crisis, and impending financial blowout, have been issued by leading representatives of major U.S. financial institutions. All are talking of the risk of out-of-control financial chaos, as a result of the massive, unpayable debt bubble created by Alan "Derivatives" Greenspan. There is not a hint of a solution to the onrushing crisis in any of these alarums, but, as Lyndon LaRouche noted in his Nov. 16 webcast, if they serve to wake people up to the danger ahead, they will be useful indeed.

The Invisible HandThey think ...#14952411/19/06; 05:15:44




They think they can solve the systemic crisis with the same means as those which caused the crisis in the first place, MORE EASY MONEY

Let them blablabla this in the way they want, the complete downward spiral is occurring more and more in society and politics. The sheeple are feeling there is "something" comin’. They just can not yet find out "what" it is precisely that is comin’

Chicken without head can also still walk around for a time.

The Invisible HandTime to face up to an old problem, says China#14952711/19/06; 07:22:59

Imagine there's no countries
It isn't hard to do
Nothing to kill or die for
And no religion too
Imagine all the people
Living life in peace...

You may say I'm a dreamer
But I'm not the only one
I hope someday you'll join us
And the world will be as one
- John Lennon

One-child policy
Mr Zhou and other top central bankers were in Melbourne at the weekend, presenting what by some accounts was a consensus that the worst of the global inflation threat may have passed.
But Mr Zhou presented a more complex outlook to the "Herald".[Newspaper].
"I think it's a general worry about inflation, not only in the United States but also the possibility in other areas," he said.
In China, he said, new wages pressure needed to be carefully assessed against the impact of cheaper food and electronics.
"China's growth rate is relatively high … labour costs are going up, we really have some pressures that may cause inflation pressures," he said.
"But … recently the Government strengthened the agriculture sector so food prices are now quite stable."

Imagine ...
A UNIFIL in Gaza (and West Bank)
European assertiveness?

One of the definitions, Karl R. Popper seems to offer is that an Open Society encourages individual initiative and self-assertiON. (Karl Popper, "The Open Society and its Enemies" , Vol. I "The Spell of Plato", Princeton, Princeton University Press, 1966, 5th rev. ed., p.190)
Dr Nathaniel Branden defines self-assertiVENESS as the assertiON of consciousness. This, he continues, entails the choice to see, to think, to be aware. To ask questions is an act of self-assertion. To challenge authority is an act of self-assertion. To think for oneself – and to stand by what one thinks – is the root of self-assertiON. (Nathaniel Branden, "The Six Pillars of Self-Esteem" , New York, Bantham books, 1994, pp. 119-120)
An Open Society is thus a society where one has the choice to see, to think, to be aware to ask questions, to challenge authority, to think for oneself – and to stand by what one thinks.
Imagine there were a FREE society, not "just" an open society.

European assertiveness or a systemic campaign of crushing pressure on Israel to fall into line?

At that moment, UK –troops must return there. Back to the roots!

Spain, France and Italy have unveiled a Middle East peace plan amid frustration over the latest developments between Israelis and Palestinians, with London surprised by the initiative and Israel rejecting it immediately.
According to Spanish daily El Mundo, quoting a Spanish government official, the Paris-Madrid-Rome initiative has already been categorically rejected by Israel.

The primary object of the new Spanish-Italian-French Middle East "peace plan" is to insert European military forces into the Gaza Strip after establishing themselves in the expanded UNIFIL in South Lebanon. In furtherance of their goal, the European Union endorsed the UN resolution's call Friday, Nov. 17, for Israel to pull out of Gaza, although its withdrawal to the UN-approved line was completed in September 2005.

Attending the Apec Summit in Hanoi yesterday, His Majesty the Sultan and Yang Di-Pertuan of Brunei Darussalam made several observations on world issues
His Majesty said that the dynamism brought about in APEC could bring real economic benefit that would contribute to the sustainable development of the Apec economies.
The retreat took place at the National Convention Centre. Upon arrival, His Majesty was greeted by the President of Vietnam, Nguyen Minh Tiet, as the chairman of Apec 2006.
During the meeting, His Majesty and the other Apec Economic leaders discussed two major issues - boosting trade and investment, as well as factors ensuring dynamism, growth and sustainable development among the Apec members. They are aimed at strengthening coordination in action; consolidate multilateral trading system; and promote trade, investment, economic, technical and human security cooperation. They will also enhance the association between Apec and other economic forums in the region and the world.
One of the major outcomes anticipated during the two-day Apec leaders' meeting will be the Hanoi Action Plan. The plan is made up of concrete actions that include support for the multilateral trading system, the promotion of high-quality free trade agreements and capacity building. The effort to revive the Doha round of trade negotiations is also high on the agenda.

The Invisible HandBlah Blah Blah#14952811/19/06; 07:38:18


In a communique, the G20 spoke of strong growth and highlighted the danger of inflation.
Faced with potential inflationary pressures, the normalisation of monetary policy underway in many G20 countries will need to continue," the group said.
A Brazilian official, however, later told reporters that both Federal Reserve Chairman Ben Bernanke and European Central Bank (ECB) President Jean-Claude Trichet were positive on inflation.
"Mr Bernanke was optimistic about inflation in America," Brazil's Secretary for International Affairs, Ministry of Finance, Luiz Melin said after the meeting.
"Mr Jean-Claude Trichet also mentioned that as far as the ECB was concerned, while they cannot afford to be complacent, they were also very happy about that (inflation)."


The Invisible Hand (11/19/06; 07:22:59MT - msg#: 149527)
Time to face up to an old problem, says China
Mr Zhou and other top central bankers were in Melbourne at the weekend, presenting what by some accounts was a consensus that the worst of the global inflation threat may have passed.

TownCrierTreasury tightening down on two mortgage giants#14952911/19/06; 08:41:32,1406,KNS_327_5152781,00.html

(AP) November 19, 2006; WASHINGTON - The Treasury Department is tightening its process for approving the millions of dollars of mortgage-related debt issued by Fannie Mae and Freddie Mac, a change that could diminish the footprint of the two giants in the financial markets.

The changes could take effect as soon as January, a senior Treasury official said Friday.

The two government-sponsored companies, the biggest buyers and guarantors of home mortgages in the country, have been roiled by accounting scandals and are under pressure from the Bush administration and Republican lawmakers who want their combined multitrillion-dollar holdings to be reduced.

The latest government move is seen as an attempt to bring the companies to the bargaining table over legislation that still could arise in Congress' lame-duck session.

The two companies were created by Congress to pump money into the home-mortgage market by buying home loans from banks and other lenders and bundling them into securities for sale on Wall Street. They have grown dynamically in recent years and now finance or guarantee some $4 trillion of home mortgages, representing about half of the single-family mortgages in the country.

If the amount of debt the companies could sell was lessened, they likely would have to compensate by selling off part of their mortgage portfolios.

The new process will require Fannie Mae and Freddie Mac to notify the Treasury several weeks before the start of each quarter about how much new debt they intend to issue during the period and to justify the amounts. ... Sometimes under the current arrangement Treasury isn't informed of the companies' plans for issuing new debt until after the fact.

Rep. Michael Oxley, R-Ohio, outgoing chairman of the House Financial Services Committee, who would play a role in legislation being considered during the lame-duck session, also warned that "the time to legislate is getting short."

With the Democrats taking control of Congress in January, prospects for legislation to reduce the companies' mortgage holdings are less favorable.

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

As fiscally reckless as the Republicans have been, does that final remark indicate that the Democratic Congress will have an even looser hand on the reins? God help us all -- there's no saving the dollar's international reserve function.


TownCrierPhilosophical Mysteries of Wages v. Inflation#14953011/19/06; 09:09:00

(NY Post) -- "Are wages keeping up with inflation?"

Remember that old brainteaser, "If a tree falls in the forest does anyone really care?" Or something like that.

This question is a little like the tree question. If you can't rely on the figures being reported by the government on inflation and you can't count on Washington's survey of wages, then can anyone really come up with an answer to your question?

...Consumer Reports' newsletter recently tackled the issue that I've been handling for years in a story headlined "Inflation's Sharp Pinch On Your Bottom Line: What the CPI really means to you and your pocketbook."

As I've been preaching, the article goes on to explain how the government massages the numbers using various academic formulas.

Bottom line: We really don't know how bad inflation is.

...And, by the way, nobody cares about the falling tree until it hits him in the head. Same with government numbers -- nobody cares until they create a situation where the government loses credibility.

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

It seems to me that inflation is of greatest concern to those who have piles of unused dollars sitting around. The concern is whether or not inflation is eroding their purchasing power before they are finally put to use.

The easy counter to this is to avoid "stockpiling" dollars in the first place -- by putting them to use immediately (exchange them for enduring tangibles), the issue of inflation in this regard becomes a moot point.

And for best liquidity, choose easily divisible, portable property... choose gold coins and bullion. The gold that you save today may one day sooner than later save YOU.


GoldiloxSpeculation on Chinese Reserve Diversification Just Keeps Building#14953111/19/06; 09:11:47


LONDON ( -- An increasing number of people within China and in the wider world are suggesting that the People's Bank of China (PBOC) will soon look to diversify its foreign exchange reserves, which at the equivalent of over $1 trillion now exceed those of any other central bank, away from the U.S. dollar. Such a move does indeed look like a very strong possibility at some point, and would likely have huge consequences for currency markets, as well as for the gold price.

I flagged this issue for Resource Investor readers months ago in this article, but now the idea seems to have really taken hold elsewhere.

It must cause the People's Bank of China, and just as importantly its political masters, quite some pain to know that immense losses will be sustained on its dollar holdings as the value of the dollar falls, and that these losses can never be recouped. The desire to shift into something safer is understandable, even though one of the reasons that the PBOC's dollar holdings have piled up so high is that the Chinese government has seen fit to prop up the value of the dollar so as to sustain U.S. demand for Chinese exports.

It is not generally part of the mission of a central bank to make profits or even to avoid making losses; rather, the needs of the economy as a whole are the overriding priority. But when currency losses are being contemplated on such a scale as in this instance, the avoidance of said losses may well become a powerful consideration for those with decision making power.

Something that gold investors will be hoping for is a shift of some of the PBOC's reserves into the yellow metal, thereby creating a significant source of new investment demand. However, a meaningful move by the PBOC into gold may not be all that likely. For one thing, the process of acquiring sufficient gold could drive up the metal's price substantially, which is an obvious discouraging factor.

But even if sufficient gold could be acquired with acceptable effects on its price, by acquiring such a large amount of gold, the PBOC puts itself in a similar situation to that which it is now in with regard to its dollar holdings. That is, being unable to divest any sizable portion of its stash of dollars without triggering a significant decline in their value, turning the exercise of accumulating dollars, or in the analogous case, gold, into a loss making venture.

Furthermore, by the time the PBOC had amassed a potentially worthwhile amount of gold, the bull market for the metal might well have passed. After all, a very good case can be made that the current strength in the gold price is primarily a function of a major currency market adjustment, long in gestation, that is centred on a redefinition of the dollar's role in the world economy.

It follows that this period of high gold prices is temporary and will end once the currency market adjustment is complete, albeit that this could take 10 or more years yet, and that breaching the gold price highs of earlier this year along the way is in no way precluded. Therefore the PBOC, which has to plan for the very long term, would be ill advised to shift its reserves out of dollars and into gold.

But the news is still good for gold investors, as any major diversification by the PBOC into other currencies, the euro being a prime candidate, will undermine the value of the dollar and that, more than anything else, has positive implications for the gold price.


No matter how much they talk gold down, the conclusion remains "good for gold".

The Invisible HandI was wrong again!#14953211/19/06; 09:19:45

The systemic risks to the world economy result only from currency speculation

Business Execs Eager to Get Into Vietnam
Supachai Panitchpakdi, the former head of the WTO, also warned Vietnam to be on guard against systemic risks such as currency speculation that led to the financial crisis that derailed Asian economies in 1997 and 1998.

Oh, I forgot
Good Stocks to Buy

TownCrierYAWN... add Japan to the "no inflation" parrot list, China speaks of change#14953411/19/06; 09:49:51

MELBOURNE: Japan does not face an immediate inflation threat, Toshihiko Fukui, governor of the Japanese central bank, said Sunday...

"Japan's prices are very stable, and we think they will gradually mount as long as the economy achieves a long- lasting expansion," Fukui said at a press conference in Melbourne after a Group of 20 meeting. "That doesn't mean that we see any threat of inflation in the near future."

...The head of Chinese central bank, Zhou Xiaochuan, said Sunday that banks in China are "stronger" and can cope with a more flexible yuan.

"The Chinese financial sector has become much stronger compared with the period of the Asian financial crisis" of 1997-98, Zhou said at the G-20 meeting.

This "creates better conditions for them to accept more financial reform, including a more flexible exchange rate and interest rate liberalization," he said.

Zhou's comments indicated that Chinese banks were preparing themselves for changes to the currency so they can better manage risk.

...China, the world's fourth-largest economy, needs to "accelerate the movement" of its exchange rate reform, Robert Kimmitt, U.S. deputy Treasury secretary, said Saturday.

China wants banks to prepare for more volatile currency trading by learning how to use derivative products that have been introduced to help manage risk.

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

Borrowing a theme from my previous post, if a bank in the forest becomes weak and technically insolvent, but no regulators actually force it to shutter its operations, will derivatizing its various vulnerabilities against a time of votatility/crisis make it sound? And does it even matter -- that is, in a climate where nobody seeks to use the shutters?

Thus, to the (very small) extent that it actually may matter, derivatives may make for a tidy accounting tool for use by an immortal company, but for the security and operational integrity of a MORTAL INDIVIDUAL, nothing less tangible than gold will reliably serve your needs through a financial upheaval.


spikedogRe: Goldilox - talking gold down#14953511/19/06; 09:49:55

"It follows that this period of high gold prices is temporary and will end once the currency market adjustment is complete...." ROTFLMAO

I didn't realize these guys were so funny!

The Invisible HandPhilosophical Mysteries of Wages v. Inflation#14953611/19/06; 10:00:30

Yes, TownCrier, you got my attention.

Bottom line: We really don't know how bad inflation is.

Gnoseology, aka as epistemology, is the study of the metaphysical theory of knowledge.
It studies the scope and validity of human knowledge>

Metaphysical realism adheres to the primacy of being over thinking.

The fundamental basis of realism is not to be found in the works of ancient or modern philosophers.
It is derived from things themselves which are the object of our knowledge and the subject of our language.

(Alejandro Llano, "Gnoseology", Manila, Sinag-Tala Publishers, 2001, pp. ix and x)

Both on the objective side and the subjective side, my act of knowledge presents a complexity which reveals a well determined structure.

To the decreasing objectivity of the object in
- the given
- the image
- and the concept

corresponds the increasing assimilating activity of the subject in
- the perception
- the imagination
- the conception

The act of knowledge ends in the judgement.

(Fernand Van Steenberghen, "Philosophie Fondamentale", 1989, p. 85)

What is given? The dollar International Monetary and Financial System (IFMS) managed to paralyse gold.

We have image of a FREE society.

The concept is that of Freegold.

We perceive the contradictions concerning inflation in Melbourne. Zhou knows what he wants. Trichet perhaps also. The others don't. We know however that the increase in value of gold does not depend on inflation but will result from Freegold.

Our imagination leads to $30,000 gold, (We are stupid – It's only the market, but I don't know what that market is, which can determine that price.)

Our conception is that of a Free Society.

This conception is being derived from the things themselves which are the object of our knowledge and the subject of our language.

Goldilox"Imagine that"#14953711/19/06; 10:03:48


"Imagine" is certainly the kind of song to garner a one a "programmed bullet", but maybe Tom Paxton's "We Didn't Know" is even more appropos! I've added a verse at the end to update it, as social satire must always be "currrent".

"'We didn't know' said the burglemeister, 'bout the camps on the edge of town.
It was Hitler and his crew, that tore the German nation down.
We saw the cattle cars it's true, and maybe they carried a Jew or two.
They woke us up as they rattled on thru, but what did you expect us to do?

'We didn't know' said the puzzled voter, watching the President on TV.
I guess we got to drop them bombs, if we're gonna keep South Asia free.
The President's such a peaceful man. I guess he's got some kind of plan.
I wish this war was over and through, but what do you expect me to do?

We didn't know at all. We didn't see a thing.
You can't hold us to blame. What could we do?
It was a terrible shame, but we can't bear the blame.
Oh, no, not us. We didn't know -oh!"

with apologies to Mr. Paxton:

"'We didn't know' said 'entitled' workers, that our pensions would be gone.
They gave us a point or two on paper, said Wall St could do no wrong.
An ATM is easy to hold, so why get all weighed down with GOLD?
My "American Dream" is not coming true, so what do you expect me to do?"

Greenspan is right that the downfall of the US economy comes from "lack of education", but his idea that we all need advanced degrees to flip burgers and check coats at fancy pants hotels is a bit misleading. The American worker is about to get a financial education that has been sorely lacking, and it won't net any letters after his name!

The Invisible HandGoldilox#14953811/19/06; 10:38:46

I suppose my father, a medical doctor, who is still alive, would also tell me "I didn't know what thalidomide would lead to".
If you put your head in the sand, you can't see anything.
It's a matter of drawing your attention to that which matters.
Or to be a Sophist and do what everybody tells you to do. msg#: 149532
Oh, I forgot
Good Stocks to Buy

TownCrierRandom quips, Milton Friedman...#14953911/19/06; 10:43:27

President Franklin D. Roosevelt based his New Deal on the ideas of Britain's John Maynard Keynes, the most influential economist of the time.

Keynes argued that the government should intervene in economic affairs to avoid depressions by increasing spending and controlling interest rates.

Friedman argued that government should allow the free market to operate to solve inflation and other economic problems.

"There Is No Such Thing As a Free Lunch" (Friedman's 1975 book title)

"...when I was first exposed to his powerful writings about money, free markets and individual freedom, it was like getting hit by a thunderbolt," Gov. Arnold Schwarzenegger said in a statement.

In an essay titled "Is Capitalism Humane?" Friedman said that "a set of social institutions that stresses individual responsibility, that treats the individual ... as responsible for and to himself, will lead to a higher and more desirable moral climate."

"People like myself, what we did was keep these ideas open until the time came when they could be accepted."

Ed Crane, president of the Cato Institute, a think tank that promotes free market concepts, said that "ultimately, what Milton believed in was human liberty and he took great joy in trying to promote that concept."

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

"a set of social institutions that stresses individual responsibility, that treats the individual ... as responsible for and to himself, will lead to a higher and more desirable moral climate."

If that is so, it begs the question... have the INDIVIDUALS been living up to their end of the bargain? ((Not to mention their governments!))

Is your savings secure and tangible, or are you a financial basketcase waiting to happen?


GoldiloxSpent Dollar Momentum#14954011/19/06; 12:42:27


The USDollar has been a certain beneficiary of the engineered energy decline, whereby crude oil has declined over 20%, unleaded gasoline has been pushed down by 80 cents, and natural gas was hammered but bounced strongly. That enormous lift at the hands of Jason of the ArGo(ldma)n-auts might be coming to an end. The inverse relationship between crude oil and the United States currency is well known. As energy costs subside, prospects for sustainable growth improve within the USEconomy. Well, until you factor in housing and its momentous multi-tiered crash. Let's call a spade a spade. The list of risks to the USDollar reads like a laundry list, so long, so broad, that is should be frightening. It covers every single pillar from the last decade, each now eroding. For the last four years, the USDollar has been supported for some rather perverse reasons, among them the Asian desire both to retain its customer base and to bleed the US-based capital until the body American withers. From a manufacturing perspective, a withered corpse is precisely what the USEconomy resembles, decked by (asset) bubbles and flesh eating (consumer) microbes scattered across the body. The Asian project still is at work, as a truly tragic transformation continues like from a Sun Tzu playbook. My joke told in many circles in the last year has been that the USDollar is backed by a powerful military, and not much else. One should not find comfort in such a thought, unless your aggression greatly exceeds your mental process.

The late summer USDollar momentum seems to have dissipated. The long-term downtrend might be ready to resume, once past the highly charged US elections. The currency market might be factoring in the election resolution, as much as anticipating a changed position by the dynamic duo. Goldman Sachs could easily see the merit in a flip flop, free from politico accusations. They are highly likely to start talking and pushing up crude oil, matched by talking and pushing down the USDollar. JPMorgan simply works silently in the background. Their only unwanted emergence from the shadows came collapse five years ago during the Enron, whom they mentored. The duo are in the business of making money, in any and all manner, free from the distraction and annoyance of law. Who is to stop them from market manipulation? Surely not the USGovt or any of its servile agencies. Many of them are embroiled in their own corruption.

Most economic forecasts are so far off that they are funny. Only a small fraction are based in reality. Most optimistic forecasts are for business promotion purposes, couched as unbiased and founded in analysis. They are instead founded in business profit and support of entrenched positions and cheer leading to keep the public invested. Of course, most forecasts incorporate the housing decline as a factor, or they claim to do so. The common themes missing in most economic forecasts are MOMENTUM, FEEDBACK LOOPS, and RIPPLE EFFECTS from the housing bear market downturn. These effects and dynamics are covered in my Hat Trick Letter reports. Other powerful feedback effects are to be seen from the falling USDollar on rising costs. The housing decline is in its early stages, nowhere near its end due to powerful momentum. The ugliest aspect of the crisis will be the resolution of homeowners struggling underwater in their mortgages, who owe more than their house is worth. They will bail out, and make national headlines. My expectation is for the brutal bear to rip into the housing market for at least another two years as ripples hit like earthquake after shocks. Lending available funds is the issue now, not interest rate. Lending has gone from corrupted lax to somewhat restricted. Soon it will turn to strictly measured and then desperately restricted.


We all know the "reasons" why the dollar needs to be devaluated. It remains to see if PTB will "let it happen", while they publicly attempt to jawbone the Chinese into upwardly revaluating their currency. Be careful what you ask for!

CometoseCOT#14954111/19/06; 12:42:52

SIlver net short 4000 contracts

Copper net long 4900 contracts

Gold net long 9000 contracts

CometoseCOT / CRUDE#14954211/19/06; 12:47:45

The commercials SIlver net position is
negative 4400 contracts (correction)

The commercials in the CRUDE OIL market are
Net Long 18000 contracts this week

Ten BearsQuips and Quotes#14954311/19/06; 13:34:26

Every Congressman, every Senator knows precisely what causes inflation...but can't, (won't) support the drastic reforms to stop it (repeal of the Federal Reserve Act) because it could cost him his job." -- Robert A. Heinlein, Expanded Universe

The length and severity of depressions depend partly on the magnitude of the 'real' maladjustments, which developed during the preceding boom and partly on the aggravating monetary and credit conditions."
- Gotfried Haberler, Prosperity and Depression, 1937

Whoever controls the volume of money in our country is absolute master of all industry and all commerce ... and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate." -- President James A. Garfield, just a few weeks before he was assassinated on July 2nd, 1881.

"By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some....The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose." - John Maynard Keynes Economic Consequences of the Peace, 1920

An argument for sound money is an argument against a privately owned central banking cartel.

There can be few fields of human endeavor in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dimissed as the primative refuge of those who do not have the insight to appreciate the incredible wonders of the present." --- John Kenneth Galbreith, A Short History of Financial Euphoria

During times of universal deceit, telling the truth becomes a revolutionary act."
George Orwell

The penalty good men pay for indifference to public affairs is to be ruled by evil men."

All truth passes through 3 phases: First, it is ridiculed second, it is violently opposed, and third, it is accepted as self-evident." —Arthur Schopenhauer

The world is governed by very different personages from what is imagined by those who are not behind the scenes." --Prime Minister Benjamin Disraeli of England, in 1844.

The liberty of a democracy is not safe if the people tolerate the growth of private power to the point where it becomes stronger than the democratic state itself. That in its essence is fascism - ownership of government by an individual, by a group or any controlling private power. " President Franklin Delano Roosevelt

The whole aim of practical politics is to keep the populace alarmed and hence, clamorous to be led to safety - by menacing it with an endless series of hobgoblins, all of them imaginary" -- H.L. Mencken

These sectors of the doctrinal system serve to divert the unwashed masses and reinforce basic social values: passivity, submissiveness to authority, the overriding virtue of greed and personal gain, lack of concern for others, fear of real or imagined enemies, etc. The goal is to keep the bewildered herd bewildered." -- Dr. Noam Chomsky, from What Uncle Sam Really Wants

mikalFed fumbles between a rock and a hard place#14954411/19/06; 13:48:21

No Knockout Blow Yet in Fight Over Fed Outlook
Leading indicators report due Monday; economists divided on rate cuts - Greg Robb, MarketWatch
Last Update: 5:00 AM ET Nov 19, 2006
WASHINGTON (MarketWatch) -Excerpts: "Economists are locked in a fierce debate about the outlook for Federal Reserve policy over the next 14 months, but the evidence so far has yet to give either side the ammunition necessary to win the argument."

Mikal >> There is insufficient evidence you are told to believe. But the pseudo-"fierce debate" in recent weeks is intentionally stalemated and off target so that their outcome can come as a surprise.
What will the Fed use to justify their next move is a
prime question of late. The media spouts conflicting
answers- natural gas, petroleum, "inflation", the security of Saudi refineries, recent U.S. home refinancings, etc.

"A rough majority of economists believes the federal funds rate, the benchmark for short-term interest rates, will start to decline next year.
At the same time, a vocal minority believes this is wishful thinking..."
Mikal >> The predictions that follow in the article,
like the vast majority seen in the media,
assume the Fed has more time to keep rates on hold
than is likely. And give them more room to raise or lower rates than they actually have.

mikalNew gold exhibit in NYC #14954611/19/06; 14:44:45

Running from Nov 18, 2006 to Aug 19, 2007
at the American Museum of Natural History(AMNH),
the large exhibit can be previewed online
with many informative essays and historical photos.

mikalAP scoops gold#14954711/19/06; 14:53:18

New York City exhibit showcases the glory and grandeur of gold - Posted 11/17/2006 1:14 PM ET
By Deepti Hajela, The Associated Press
NEW YORK — Excerpt: "It has been used to crown kings and fill cavities, for high-end jewelry and high-flying space travel. For thousands of years, in practically every culture that has been exposed to it, gold has represented wealth, power, and prestige. A new exhibit showcases just how remarkable this rare and precious material is. "Gold" opens Saturday at the American Museum of Natural History and runs through Aug. 19.
GOLDEN EYE: The exhibit page for "Gold"
Gold is a unique mineral in a number of ways, said Jim Webster, one of the curators for the show — it is malleable, so it can be stretched into the slimmest of wires or flattened into the thinnest of sheets. It's reflective, which is why it has been used on astronauts' helmets to reduce glare."

David LinkleyWhy gold, why now?#14954811/19/06; 16:42:54

The establishment press has been going all out lately to make sure we all know how wonderful the world economy is. Barron's had DOW to 13,000 on the front page last week and bullish articles along with a stronger dollar article this week. Fortune has a picture of Hank Paulson on the front page of it's latest issue obviously to let us know how lucky we are to have him.

Underneath the surface however lies a very different picture. The US debt issues now leave us in the hands of those who hold dollars and Treasuries. Many "old hands" such as Volker and Greenspan have warned about out of control debt. In contrast to the latest false conclusions of the recent GFMS report, gold demand continues to rise with a senior gold trader from UBS saying he has never seen such sustained strong physical demand out of India and Asia. Dehedging is on it's way to becoming a record in 2006, supply is falling, and the US is now exporting more gold than at any time since Nixon was in office.
One last note, in 1980 gold comprised 29% of total US financial assets, today that figure is about 3%.

None of the reasons gold has risen since 2001 has changed, they have only become more supportive. When the dollar resumes it's downward path $600 gold will be a memory. Don't wait to protect you and your family now, get your gold insurance while still at bargin prices.

Chris PowellDemand will prevent crash in mineral prices, World Bank says#14954911/19/06; 16:55:44,20867,20786046-643,00.html

By David Uren
The Australian, Sydney
Sunday, November 20, 2006

Surpluses in mineral supply will emerge in 2008 but continued growth in demand and rising mining costs will stop prices from dropping back to their level of the 1990s, according to the World Bank.

The bank says long-term demand growth will remain strong, while the industry faces challenges in raising its supply.

"However, it would be foolish to underestimate the impact of price signals, the power of markets and the versatility of the mining industry to address the challenges that it faces."

Resource industry leaders in Melbourne for the G20 summit said there had been a lack of investment in capacity in the industry, with a decline in levels of both skills and research and development.

They also conceded that the growth in Asian demand had not been anticipated.

"The industry has been responding to these changes and is making massive investments, but the lead times are typically up to 10 years," a statement prepared by the newly formed energy and Minerals Business Council said.

Last week, the Government's commodities forecaster, the Australian Bureau of Agricultural and Resource Economics, said mining developments in Australia had notched another record, with $35 billion in major projects under way.

The number of minerals and energy projects under construction or committed to, has also hit a record 94.

The World Bank said demand for copper could rise by 60 per cent or more over the next 15 years and require the discovery of new reserves to replace depleting mines.

In a review prepared for the G20, it says that although demand growth from China will eventually slow, there is large potential demand from other developing countries.

The World Bank says world reserves of mineral resources should not become exhausted in the foreseeable future.

Although the known reserves of copper would last for only 32 years if demand growth continues at the 3 per cent annual rate of the past 15 years, the bank says companies do not have an incentive to incur the costs to prove up more than 20 years of future reserves.

The bank says, however, that the long-term decline in ore grades may continue.

There is also a concern that for some metals, including copper, new mines will be smaller and underground, so economies of scale will be harder to obtain.

In the case of nickel, the easily processed sulphide ores are being mined out, and production is shifting to more expensive laterite deposits.

In other minerals, the new ore bodies are likely to be increasingly remote, and require substantial infrastructure investment, the bank says. In the short-term, mines are facing higher costs from energy, and shortages of skills and supplies.

otish mountainOne World-One Money?#14955011/19/06; 16:58:55

An E-mail debate between Mundell and Friedman Circa 2001
See link. lots of other stuff as well.

Chris PowellFreeport-McMoRan pays 33% premium to acquire Phelps Dodge#14955111/19/06; 17:18:15

From Reuters
Sunday, November 19, 2006

NEW YORK -- Freeport-McMoRan Copper & Gold Inc. said on Sunday it agreed to acquire Phelps Dodge Corp. for $25.9 billion in cash and stock, creating the world's largest publicly traded copper company.

Freeport-McMoRan said it will pay a total of $126.46 per Phelps Dodge share.

Each Phelps Dodge shareholder would receive $88 per share in cash plus 0.67 of a common share of Freeport-McMoRan.

Freeport-McMoRan said this represents a premium of 33 percent to Phelps Dodge's closing price on November 17 and a premium of 29 percent to its one-month average price at that date.

On Friday, Nov. 17, Phelps Dodge shares closed at $95.02, while Freeport-McMoRan's stock closed at $57.40, both on the New York Stock Exchange.

* * *

Joint press release from Freeport-McMoRan and Phelps Dodge:

The Invisible HandBIS news – at least - less than an hour to wait#14955211/19/06; 18:19:02

Today's G-10 gathering is held under the auspices of the Bank for International Settlements.
Fed Chairman Ben S. Bernanke, ECB President Jean-Claude Trichet, Bank of Japan Governor Toshihiko Fukui and People's Bank of China Governor Zhou Xiaochuan will attend the bi-monthly G-10 meeting, the first time it's being held outside Basel, Switzerland, since November 2003. Trichet, 63, who chairs the summit, will hold a briefing around 1 p.m.

One p.m. should be in less than 45 minutes.

Freegold? Who cares?

The Invisible HandFlatliner#14956411/19/06; 18:58:03]

This Friedman obituary seems to contain a nice section on his Monetary Theory.
I'm not sure however this answers your questions.

The Invisible Handlink#14956511/19/06; 19:00:17

GoldiloxCommodity prices#14956611/19/06; 19:06:03

@ Flatliner,

"Thus, if oil prices skyrocket, those that own oil are not going to sell it while the price is rising. But, rather, they will hoard it with hopes of selling it at a higher price in the future."

Wasn't oil around $10 in 1998? I'd say 600-700 percent in 8 years qualifies as skyrocketing, already.

Perhaps not exponentially, but also not corresponding to inflation figures.

The Invisible HandYuan is rising against the dollar#14956811/19/06; 20:16:13

GS sees growth away from Americas

Nov. 20 (Bloomberg) -- Pressure for higher interest rates in China ``has eased a bit'' amid signs investment and industrial production growth is slowing, central bank Governor Zhou Xiaochuan said.
``This decline in growth'' in investment ``is a good thing,'' Zhou said in an interview today in Sydney, where he's attending a meeting of central bankers from the Group of 10 industrialized nations. ``We still must keep an eye on inflation. But the pressure has eased a bit'' on interest rates.
Zhou's comments suggest that concerns have waned that rampant investment spending would result in a glut of idle factories and empty apartments in the world's fastest-growing major economy. China's growth slowed in the third quarter as lending restrictions that included two interest rate increases this year took effect.
``The economy is starting to slow because of the measures the government has put in place,'' said Amy Auster, a senior economist at Australia & New Zealand Banking Group Ltd., in an interview from Singapore.
The yuan gained 0.06 percent to 7.8670 against the U.S. currency as of 10:35 a.m. in Shanghai, according to data compiled by Bloomberg. The yuan has advanced 3 percent since China ended its link to the U.S. currency in July 2005.

Goldman Sachs is to strengthen its executive office in London to ensure better management of a group that, like many US-based investment banks, is seeing faster growth in Europe and Asia than the Americas.
Top US-based executives, including chief executive Lloyd Blankfein, are to have scheduling and other administrative support functions in London identical to those they currently have at headquarters in New York.

Same article [today on main page wo registration]
US banks see growth away from Americas

Chris PowellDerivatives market grows by a quarter in just six months#14957211/20/06; 00:09:40,20867,20785202-36375,00.html

By Gillian Tett
The Australian, Sydney
Monday, November 20, 2006

The global derivatives market surged by almost a quarter to $US370 trillion in the first half of this year as bankers, investors, and companies turned to these complex instruments to manage their risks or place speculative bets on markets.

At the end of June, the face value of all outstanding derivatives contracts in the global over-the-counter (OTC) market had risen 24 percent or $70,000 billion, according to the Bank for International Settlements in Basel. The latest figures mean the derivatives world has almost quadrupled in size since the start of the decade, with a face value on its contracts 30 times the size of the US economy.

But the BIS, which acts as a meeting forum for central banks, stressed that the data did not mean that the level of risk-taking by investors was rising at the same pace. If the value of derivatives contracts are netted off against each other, then their so-called "market risk" is only 3 percent higher at $US10 trillion -- roughly equivalent to the size of the US economy.

Nevertheless, the explosion in the headline value of derivatives contacts shows how these instruments are now playing a dominant role in the financial sphere -- even though many of these products barely existed two decades ago.

This is creating new challenges for regulators, investors, and bankers -- particularly because most derivatives activity is now occurring in the opaque OTC sector, or in private deals arranged between banks, and partly out of the control of regulators.

Data from the BIS showed, for example, that there are now four times more outstanding contracts in the OTC sphere than on regulated exchanges. This rapid pace of growth is welcomed by many investment bankers -- particularly because it is providing a lucrative source of revenues for the financial industry.

"Derivatives are a power for the good of the financial system as a whole," argues Robert Pickel, head of the International Swaps and Derivatives Association, the main industry body.

"Not only do they help individual businesses better adapt their risk profiles but they benefit the financial system by disaggregating risk more broadly."

However, the trend leaves some mainstream investors uneasy, given that derivatives can also sometimes create losses: Warren Buffett, for example, has famously dubbed them "financial weapons of mass destruction".

The largest single factor behind this year's increase was a rise in contracts that bet on the direction of interest rates. The nominal value of these grew 24 percent between January and June to stand at about $US262 trillion.

Foreign exchange derivatives also saw strong growth of 22 percent, to stand at $US38 trillion. Meanwhile, the credit default sector -- the main branch of credit derivatives -- reported 45 percent growth.

One factor behind the growth is that many traditional pension funds and other mainstream investment groups are starting to use derivatives for the first time.

However, the recent climate of ultra low interest rates is also forcing investors to embrace creative new strategies to earn returns.

Meanwhile, the new generation of computer technology is making it easier and cheaper for banks to invent new derivatives products.

GoldiloxSmall change crisis for Argentina#14957311/20/06; 02:33:55


Residents of the Argentine capital Buenos Aires have plenty to worry about, like rising crime, the economy and increasing football hooliganism.

But the most immediate daily concern of many portenos, as city residents are known, is how to make sure you have enough change for your bus fare home.

There are simply not enough coins minted and there is a serious shortage.

Bakeries may give you a small pastry or greengrocers an extra carrot instead of the 10 centavos change you are owed.

The trouble is, the chronic shortage of coins in the city can turn you into a liar. 'Have you got 25 centavos?' asks the shopkeeper.

No, you reply, nervously fingering the coins deep in your pocket. Just this 50-peso note.

Newspaper kiosks put up signs saying "No change".

Shops implore customers to pay with the exact money.


Base metals in too much demand to supply coinage?

GoldiloxThe day Argentina hit rock bottom#14957411/20/06; 02:41:51


When, four years ago, Argentina's economy hit rock bottom, it came as a shock, even to locals accustomed to hardship following a string of crisis since the 1930s.

Nobody had expected the country to fall this deep.

Argentines will always remember 2001 as the year of the country's worst crisis, on a personal as well as on a financial and political level.

"We had the worst Christmas and New Year of our lives," recalls Isabel Garcia, 62, a psychologist who works in the public sector.

"We were all very depressed and sad. There was no mood to celebrate and no cash to buy presents."

Massive debt default

These were desperate times for the country's people.

It all begun when, after a lengthy recession, President Fernando de la Rua resigned on 20 December, amid violent street protests in which 25 people were killed.

The subsequent political instability led to four presidents succeeding him in only 10 days.

Soon bank accounts were frozen and the currency - the peso - was devalued, ending a decade-long fixed link with the US dollar.

Thousands of people saw their life savings disappear.

"It was a catastrophe for us," says Ms Garcia.

"As the economy ground to a halt, we had less work and we could not keep up our mortgage repayments. We felt totally impotent."

Argentina then made history with the largest ever sovereign debt default of more than $80bn (£42bn).

The country, whose wealth rivalled that of France seven decades ago, was lying in ruins, its face to the ground.


Politicians were quick to blame the economic policies dictated by the International Monetary Fund, something the multilateral institution has consistently rejected.

What is certain is that the middle-classes were left cash-strapped and poorer, and poverty expanded to half the population. Unemployment soared to 20%.

Many still await the benefits of the economic upturn

Civil engineer Ricardo Leuzzi, 40, works in the building sector. He remembers very well how he and his workers had a difficult time following the meltdown.

"My savings were frozen, and the bank would not understand that these funds were being used in a construction project, so we were left stranded," he says.

"I promised myself to never deposit money in a bank again."

Politicians' credibility also hit rock bottom. "All should go," was the most common heard chant, accompanied by banging pans, at protests during the collapse.

Ms Garcia took part in one of the popular assemblies spontaneously set up in Buenos Aires to try to find a direction in the midst of the economic and political chaos.

"Although demands among participants were very diverse, all the people agreed that a profound change was needed in Argentina. I think that, in some way, this explains the recovery that followed," she says.

Back to growth

Argentina's economy started to climb out of the crisis in 2003.

"The turnaround was remarkable," says economist and former minister Aldo Ferrer.

"Agricultural exports hit a record high thanks to a cheaper peso and the growing demand of Asian markets, and the country attracted more investments."

Argentina also managed to restructure its massive debt, offering creditors new bonds for the old, defaulted ones.

Now Latin America's third largest economy is growing at a rate of nearly 8% and unemployment has fallen to 10%.

Last week, President Nestor Kirchner said Argentina would pay its $10bn debt to the IMF three years early.

"That's good news," says Mr Ferrer. "I think the recovery was mostly thanks to a better command of the economy and a clearer sense of direction."

Poverty still rife

But macroeconomic figures, however rosy, rarely paint a true picture of the lives of ordinary Argentines, and neither does the first impression that greets visitors to Buenos Aires, a lively middle-class city.

But travel through the interior of the country, and it becomes clear that poverty is still rife and that many still await the benefits of the economic upturn.

"Fighting poverty is obviously the main challenge, although some social programmes have helped to alleviate it," Mr Ferrer acknowledges.

Inflation, which has been a chronic problem in Argentina, is once again a looming threat to consumers, while salaries are losing ground.

Accountant Gabriel Tabacinic, 30, says wages have not yet fully recovered and that, because of this, workers are still paying the price of the 2001 crisis.

"Salaries are well behind the inflation index, and the government should do something about it," he says.

The country has yet to find a resolution to a deadlock with the mainly foreign-owned utility companies, which had their tariffs converted into devalued pesos and then frozen.


Not a pretty picture.

968G10 Trichet: central bank gold sales 395.75 tonnes#14957611/20/06; 09:58:13

SYDNEY, Nov 20 (Reuters) - Central bank gold agreement sales in the year to Sept. 26, 2006 were 395.75 tonnes versus a limit of 500 tonnes, the head of the Group of 10 top central bankers, Jean-Claude Trichet, said on Monday.
He was speaking in Sydney after a meeting on the global economy.

968Investors Underestimate Market Risks, Trichet Says#14957711/20/06; 10:00:59

"Investors are underestimating risks to the global economy and financial markets, European Central Bank President Jean-Claude Trichet said."

Trichet said he and his G-10 colleagues ``don't exclude the possibility that there will be a re-pricing of risks,'' though the central scenario was that the process would be ``orderly, smooth and progressive.''

968China issues gold bars to commemorate Year of Pig#14957811/20/06; 10:11:26

China Gold Coin Corporation issued a series of gold bars made of 99.99 percent gold on Friday to commemorate the forthcoming Year of the Pig.

The total volume of gold bars being issued in China this year is 3,000 kg, at a price of 175 yuan per gram in Bejing, the first city to issue them to the public. They can be bought in weights of 1000g, 500g, 200g, 100g and 50g.

Sales of the gold bars are expected to be boosted due to the Year of the Pig being the last year in the 12-year rotation of the Chinese lunar calendar making it a lucky and rich year, according to traditional superstition.

Add to the fact that out of the five Chinese elements - metal, wood, water, fire and earth - 2007 is the year of metal, or gold, and people are expected to snaffle up the pig bars.

China first issued the gold bars to commemorate the lunar new year in 2002, the Year of the Sheep. The wooly gold bars were sold for 92 yuan per gram.

TownCrierThe "New Nickel"... HEADLINE: Mint has high hopes for new golden dollars#14957911/20/06; 10:45:24

WASHINGTON - Can George Washington and Thomas Jefferson succeed where Susan B. Anthony and Sacajawea failed? The U.S. Mint is hoping America's presidents will win acceptance, finally, for the maligned dollar coin.

The public will get the chance to decide starting in February when the first of the new coins, bearing the image of the first president, is introduced.

"These designs are beautiful and so eye-catching that a lot of Americans are going to do a double-take when they get them in their change the first time," Edmund C. Moy, the director of the Mint, said in an interview.

Will all this be enough to make the presidential dollars a success where the Susan B. Anthony, introduced in 1979, and the Sacagawea, introduced in 2000, have been flops, at least in terms of gaining acceptance as circulating coins?

Moy is optimistic, saying a number of things have changed since the Sacagawea launch six years ago. Rising prices mean it takes more quarters to feed parking meters and vending machines. People might now be more willing to carry the dollar coin to replace four quarters.

^---(From url)---^

For popular use I think the dollar coins remain too large. They ought to be closer to a dime in size.

In quasi-related news, the U.S. Post Office, of all entities, is actually demonstrating a remarkable degree of proactive behavior. It is phasing out its use of stamp vending machines, all to be removed by 2010. Are they anticipating the typical vending machine obsolescence through hyperinflation?


TownCrierMORE: Feds try dollar coins again...#14958011/20/06; 11:02:23

Nov. 20, 2006 -- ...The coins will enter circulation with George Washington on Feb. 15, four days before President's Day, and will be gold in color like the Sacagawea to distinguish them from other coins. Like the Sacagawea, they will be slightly larger than the quarter.

While the presidential coins are expected to be popular with collectors, it's doubtful they will be used by consumers and businesses on a daily basis, some experts argue. Instead, with dollar bills still an easy alternative, they likely are doomed as a means of commerce, as Susan B. Anthony and Sacagawea before them, says David Sklow, a numismatic expert and former director of the library and research center at the American Numismatic Association.

"I hope it does get accepted, but I wouldn't hold my breath," he says. "Americans do not like dollar coins, they just don't. You want to carry three or four of these around? If you are a man (and carry money in your pocket), I don't think so."

A dollar coin hasn't widely circulated for more than 70 years, when the silver Peace Dollar was in use.

David Didriksen, owner of Willow Books & Cafe in Acton, Mass., says there's a reason for that... "As it is now, a typical trip to a bank involves carrying a bag of 20 or 30 pounds or more," he says. "The last thing we need now is more coins."

Greater use of dollar coins instead of bills would save the government hundreds of millions of dollars each year, even though the coins are more expensive to produce. That's mainly because coins last for about 30 years, more than 16 times longer than dollar bills.

Studies, including those from the Government Accountability Office, the investigative arm of Congress, suggest consumers will embrace dollar coins only if dollar bills are pulled from circulation.

But the idea of replacing the dollar bill with coins has met stiff resistance from lawmakers, printing unions and paper manufacturers.

The public has also opposed eliminating $1 bills... when asked their opinions on replacing dollar bills entirely, 79 percent said they would oppose such a move. Even when told that replacing bills with coins would save the government $500 million a year, 69 percent said they still opposed making such a change.

"It's just easier to carry the bills," says retiree Ellen Barlow, 74, of Culbertson, Neb., who opposes replacing dollar bills with coins. "Five dollars of coins weighs a lot more than five dollars of bills."

...being collected and being used are two entirely different things, says Beth Deisher, editor of the publication "Coin World."

"The Mint is really in an uphill battle," Deisher says. "No other nation has successfully circulated a coin equivalent of the paper money. It doesn't happen. Human nature is such that you would take the paper money."

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Sort of a sketch of human behavior that helps remind us why paper and digital currency is here to stay (for transactional convenience), whereas it remains quite natural at the same time to gather and set aside precious gold coinage and bullion as true savings.


mikalYen undervalued but very popular#14958111/20/06; 11:22:17

Forget Petrodollars -- Get Ready for Petroyen: William Pesek
By William Pesek
Nov. 20 (Bloomberg) -Snippits: "Few countries would find fault with investors looking their way. That is, unless it's Japan and the buyers in question are central banks...

What's more, the yen may have an unexpected role to play in the oil-fueled rise of Middle Eastern economies.
There's much talk of how increasing amounts of so-called petrodollars are flowing to Asia. The term refers to dollars earned through the sale of petroleum. Since the 1970s, the Middle East has accepted dollars in exchange for its oil. Now, the desire to reduce U.S. hegemony, both economically and politically, has Iran working to set up a market in which countries can buy and sell oil in euros, rather than dollars."
Yen purchases and investments in Japan are seen here in the context of history and many variables. Other Asian "tigers" such as China and Korea must have similar monetary and financial interests and concerns as Japan especially
in relation to other regions of the world.

"Rapid growth in Asia is increasing Middle East trade, particularly with booming, energy-thirsty economies such as China and India. A look at the financial pages also shows how Arab states, companies and individuals are scooping up Asian real estate and investing in oil refineries and Islamic debt.
In June, for example, Dubai's DP World, rebuffed in its efforts to manage U.S. ports, announced a $500 million investment to build a terminal on the northeast Chinese harbor of Tianjin.
All this may seem a reach, yet the influence of petroleum- related liquidity will grow. While crude prices are about $56 a barrel, from a record high of $78.40, they are likely to rise anew. Energy needs in China and India alone could boost prices for years to come. The proceeds from those sales may find their way back to Asian assets, including ones denominated in yen.
Central banks aren't known for being prescient traders. Nor are they in the business of racking up big gains in markets. In the case of recent yen purchases, they may do both."
Pesek presents an overall excellent hypothesis
regarding the yen's future, and simulteously sheds light on the future of dollar, euro and by extension other currencies including gold.

geChina issues gold bars to commemorate Year of Pig#14958211/20/06; 11:41:32

gesorry 968 for re-posting the same news...#14958311/20/06; 11:43:46

GoldiloxP.O. Vending machines