USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
melda laurena alye i laurea vinya loa#1506131/1/07; 00:54:24

Jane, stop this crazy thing!

(getting off the inflation roller coaster wont happen quickly, there's too much momentum for any "real" deflation just yet)

Knallgold2#1506141/1/07; 01:44:53

"After he said that an alarm bell went off and I thought to myself maybe that is the point!!! Do the elites know something is going to happen over the long holiday weekend the masses don't? I mean why couldn't Wall street open Tuesday and take Wednesday off for Ford's funeral? "

Nah,too obvious,though I had the thought as well.

Paulson arrested?Forget it,we would know it by now.And ministers are immune.

CometoseCOT#1506151/1/07; 06:16:52

Since my last look , the report dated Dec 26 (which may have little relevance during the holiday )
showed that the Commercials in

SILVER were net long 3000 contracts for the week

Copper were net long 1430 contracts for the week

Gold were net short 1333 conracts for the week

mikalAffluent asians advance into luxury, quality and authenticity not unlike real gold#1506161/1/07; 09:13:12,20867,20999508-643,00.html,20867,20999508-643,00.html Euro Fashion Invades Asia | Business | The Australian | Natasha Bita | January 2
mikal(No Subject)#1506171/1/07; 09:56:07 Next Big Test of Power to Seize Property? | The US Supreme Court will examine whether a private company can demand payment in exchange for not seizing private property | Christian Science Monitor | January 2, 2007
Chris Powell10-gram gold contracts offered in India; gold deliveries rising fast#1506181/1/07; 10:00:00

From The Economic Times, New Delhi
Monday, January 1, 2007

MUMBAI -- The National Commodity and Derivatives Exchange Ltd (NCDEX) will launch 10 grams immediate delivery gold contracts, to be traded on its electronic spot exchanges, in order to increase its bullion clients.

"It will be an immediate delivery contract in form of 10 grams gold coins for our spot exchanges and we plan to positively launch it before the first quarter of next year," NCDEX Head Business Development Shrikant Subbarayan told media.

The NCDEX electronic spot exchanges are expected to be rolled out from the middle of January starting from Rajasthan and West Bengal. The spot exchange-traded 10 grams gold coin contracts would be available for a cheaper price with assured quality and have a buyback option.

"If you buy a 10-gram gold coin from a jeweller or a bank it is usually 10 to 15 percent high in price while purity is a big question. One also faces a problem in buyback," he said. Through these contracts NCDEX is targeting to increase its bullion trade clients to five lakh to one million from current level of 25,000 to 30,000, he said.

The exchange had earlier started its futures mini gold 100 grams contracts and registered a delivery of 89 kg of gold during the first month of expiry of these contracts in December.

"The brokerage firms were able to tap the potential of small net worth investors who want to have gold as a part of its investment portfolio," he said. In its total bullion trade, NCDEX has witnessed an upswing on the deliveries.

In October a total of 743 kg of gold was delivered at the exchange. November saw a delivery of 940 kg of gold while December saw a record delivery of 1,104 kg. There was an increased participation from both the investor class and trading community in bullion either to take delivery or to make good returns.

"In the December month itself there was a return of 12 percent annualised, which is not possible through fixed deposit or call money market for a month," Subbarayan said.

If you buy gold in December and sell it in January through NCDEX, for a month you get 12 percent risk free returns whereas in other markets one cannot get a return of more than 5 percent, he said.

Chris PowellReport predicts China's currency will gain 5% on dollar in 2007#1506191/1/07; 10:10:04

From Xinhua News Agency, Beijing
Monday, January 1, 2007

BEIJING -- The exchange rate of the renminbi, the Chinese currency, is expected to appreciate by some 5 percent to one U.S. dollar for 7.44 yuan, according to a Xinhua Economic Analysis Report released Monday.

The report projected that the pace of RMB appreciation would be faster in the first half of 2007 than in the second half.

Xinhua Economic Analysis Reports are regular products by a team of more than 80 economic analysts under Xinhua Economic Information Department. The latest issue of the reports reviewed the country's ten key indices in the economic and financial sectors and made projections on possible changes in the coming year.

In 2006, the value of the RMB rose 3.28 percent against the dollar, with an accelerating trend from 0.66 percent in the first quarter to 1.15 percent in the fourth. The central parity price closed at one U.S. dollar for 7.8141 yuan, the lowest of the year.

The report held that the short-term RMB exchange rate will be influenced by the fluctuation between the dollar and other currencies, but in the long run, it depends on the progress of China's exchange rate reforms. Stable appreciation in small steps is generally expected.

Earlier in December, China's State Information Center predicted a 3 to 4 percent appreciation of the yuan in 2007, while the Bank of America and Deutsche Bank expected a rise of 4 to 6 percent and 4.5 percent, respectively.

China's foreign exchange policy is in line with the pace of China's economic development and the daily floating band is enough to allow sufficient appreciation of the RMB, according to Chinese economist Fan Gang.

However, some economists argue that the appreciation of the RMB is a double-edged sword, as it will make Chinese exports more expensive and therefore reduce export volume. Some export-driven small and medium companies may not be able to survive and have to lay off employees.

"If China were coerced into really large appreciations of the RMB, it could face the same deflationary fate as Japan in the 1980s and 1990s -- and all this without reducing its trade surplus," said Ronald McKinnon in an article published Wednesday by The Wall Street Journal.

Zhou Xiaochuan, governor of the People's Bank of China, said that there was no timetable for a further widening of the daily floating band between the RMB and the U.S. dollar.

China raised the value of yuan by 2 percent to 8.11 per U.S. dollar and started linking it to a basket of currencies on July 21 of 2005, and allowed it to move 0.3 percent above or below the parity rate against the U.S. dollar.

The report also projected that the country's gross domestic product (GDP) will grow by 9.5 percent, lower than the estimated 10.5 percent for 2006. Major reasons for the slowed pace include the decline of global economic growth and the Chinese government's tighter macro-economic control aimed to curb overheated sectors such as investment and housing.

It forecasts that fixed asset investment will increase by 25 percent, compared with the estimated 26.6 percent growth for 2006. However, the report cautioned that investment can easily rebound for reasons of liquidity surplus, fast growing corporate profits and local governments' investment impulse.

The growth of fixed asset investment and credit both slowed down in 2006 as a result of hikes in the benchmark lending interest rate, which was increased from 5.85 to 6.12 percent.

It will be less necessary for the central bank to further raise interest rates in 2007, as too fast declines of investment growth will be no good to an anticipated slack in economic growth, but the possibilities of interest rate drops are even smaller, says the report.

The Chinese government has been trying to curb runaway investment to let consumption contribute more to economic growth, with measures to stimulate domestic demand such as improving the social security system, raising minimum wages and protecting the interests of migrant laborers.

Domestic consumption will grow faster in 2007, with retail sales of consumer goods to rise 15 percent year on year, the report predicts. The number is estimated to be 13.7 percent for 2006, 0.9 percentage points up from 2005.

USAGOLD / Centennial Precious Metals, Inc.HAPPY NEW YEAR ! ! !#1506201/1/07; 12:31:41

Spot thrives!
Chris PowellBanks and funds pay top dollar to secure commodity talent#1506211/1/07; 12:58:47

By Kevin Morrison
Financial Times, London
Monday January 1, 2007

LONDON -- London Commodity traders, once the overlooked Cinderellas of the financial trading world, are being offered multi-million-dollar lock-in payments reminiscent of the early dotcom boom, when banks were also desperate to expand into new areas by offering guaranteed payments to key staff.

The value of such traders -- and energy traders in particular -- has risen sharply over the past 18 months, amid the continuing commodity price boom that has prompted hedge funds and top-tier banks to expand their commodity trading businesses.

Such new entrants are competing with the established bulge bracket banks in commodities such as Goldman Sachs, Morgan Stanley, and Barclays Capital.

However, these banks have tied many of their senior traders into lucrative share deals, making it often impossible for them to join the new entrants to the commodities markets.

Banks appear willing to pay not only significantly higher base salaries to commodities traders, but also guaranteed bonuses to attract and retain such staff.

Guaranteed payments represent a salary and bonus package that will be paid to a trader regardless of the subsequent trading performance at the bank.

Among the biggest such recent guaranteed payments was one made by Deutsche Bank, who hired David Silbert as their head of commodities from Merrill Lynch, where he had headed up the bank's European commodity business. People familiar with the situation said Mr Silbert was on a three-year guaranteed payment worth £10m-£15m.

Deutsche Bank would confirm Mr Silbert's appointment but would not comment on his remuneration package.

Such guaranteed payments are fixed costs that could come back to haunt the banks in the event of a downturn, when revenues decline. Equally, however, the fixed nature of such deals will repay the banks for as long as the commodities boom continues.

Given such lucrative lock-in payments, aggressive new entrants to the commodities markets are increasingly being driven to look elsewhere to find top traders. In the energy industry, this has meant going directly to the big oil groups such as BP, Royal Dutch Shell, Total, and ChevronTexaco.

Industry insiders estimate that at least 30 traders -- including David Ferner, Christophe Balleaux, and Chad South -- have left BP in the past 18 months to go to either banks, private oil traders, or hedge funds.

GOLD FINGERA video can say a 1000 words if not MORE!#1506221/1/07; 16:29:09

I noticed at the funeral proceedings of Gerald Ford as the camera spanned around the Capital rotunda where the casket lay and as the Vice President read the eulogy about his life, there were two people sitting close to each other.

Two who have great wisdom and who many regard as almost prophetic for the USA and the economy. These men still have a lot to say and I wonder what they were talking about after the funeral??

Want take a guess about both?? How about what they may have been saying about 2007? Well, I bet when Allen Greenspan and Hennery Kissinger collaborate the conversation is most enlightening!

OIL and GOLD will again be in the top news this prediction!!


May you all have a most prosperous 2007...the year of the Pig~

skiPrice Prediction Contest...........#1506231/2/07; 00:32:40

I've been here for several years and have noted a large number of Price Predicting contests. IMHO, there is only one guessing contest that is well worth attempting for everyone here.

Gold's advance:
2005 18.1%
2006 23 %
total 41.1%

Silver's advance
2005 29.9%
2006 45 %
total 74.9%

In my post #140007 on 1-3-06,I predicted: (Hey, wass'up with doe's last three numb bers?)

1. Silver will outperform gold on a percentage basis.
2. The difference between gold an silver will be even GREATER than the 11.8% difference in 2005.

Back to the point. THIS is the price predicting contest that has some real value to everyone who picks the correct answer. 41.1% is a "nice" number, but it's a distant second to 74.9%. And for 2007? No change in items 1 and 2 above.

Let's ALL have a blessed, good year ......

White RoseIt is even better than that#1506241/2/07; 08:33:19

You need to multiply the numbers to find out the results over 2 years.

For gold: 1.181 times 1.23 yields 1.45 or a 45% increase

For silver: 1.299 times 1.45 yields 1.88 or an 88% increase

I too am hopeful for significant increases in the valuing of gold and silver in terms of fiat money.

Happy New Year!

KiloSki - Re: Combined statistics of gold and silver#1506251/2/07; 09:11:36

Correct me if I'm wrong (or missing your point), but aren't the combined totals of gold and silver advances kind of a moot point ? After all, you cannot have the same money invested in both metals simultaneously.
USAGOLD / Centennial Precious Metals, Inc.Hard assets, EASY access!#1506261/2/07; 09:28:35

shop for gold coins
tejbearKilo, msg#: 150625#1506271/2/07; 10:21:10

Why would you want "all" of your eggs in one basket? Both metals are precious, but have different characteristics that make both desirable. In terms of investment, silver will out perform gold. However, it is very difficult to carry $10,000 worth of silver in one pocket. Given the draconian leadership in the US today, this may facet of gold may well be more important than silver's ROI. And don't forget, even the Mogambo keeps talking about oil.

The Bear

FlatlinerInternational Forecaster's view on oil and gold#1506281/2/07; 10:26:50

Snip: "The depreciation of the US dollar, the world's reserve currency, did not happen due to malfeasance – it's the result of a calculated plan to tax dollar users. ..."

Knowing how to measure your tax burden is something that is not taught to the commoner. The common misperception is that the only time a tax burden is acquired is during a purchasing transaction. The wise know that not purchasing is also a taxable situation as they have learned to count the impact of loss of purchasing power in their currency hoard.

Fortunately, the laws are fashioned so as to backload the taxable transaction. The loss of purchasing power is measured later, rather than now. Thus, to a saver, it pays to acquire something that is not taxed over time and is rare enough to maintain its purchasing power.

From the postings below, it looks like gold and silver fit the bill for savers. Many other big ticket items are taxed over time (houses and property) thus they must be put to work or they become a draining asset over time.

What is more valuable than these metals? Life. Buy your insurance for life and then build you life savings.

Where is Black Blade anyway? Best wishes!

frosty 12007 revisit the gold trail.... #1506291/2/07; 10:40:11

hello!! happy 2007!!
I was thinking on the wise advice that all long term Goldtrail followers had at thier screens.Some, just read the sage advice of the mystery posters(Trailguide, another) and did nothing...others acted and did well.
Now,as much of the advice was forward thinking and about the best way to position ones self as the future unfolds,I think it would be wise to update everyone on just where we are on this (Trail).As we should not take any one person, or groups take on matters...we should not let a goodtrack record go unrewarded.I do think there is much value in what these fellows foretold.
If anyone who has been on the trail would like to do a short summary of what these posters had to share,it would help everyone.The postings of the trail are quite lengthy but should be read for those who can find the time.

mikalUnderground euros, black market gold #1506301/2/07; 10:55:15

Tuesday, January 02, 2007 - Dr. Ron Paul, Congressman TX

The financial press reported last week that the euro, the new currency created only five years ago and used by most European nations, has supplanted the U.S. dollar as the most widely used form of cash internationally. There are now more Euros in circulation worldwide than dollars.

This alone is not necessarily troubling, as the dollar remains the world's most important reserve currency. About 65% of foreign central bank exchange reserves are still held in dollars, versus only about 25% in euros. And the European Central Bank faces the same inflationary pressures that our own Federal Reserve Bank Governors face, including a growing entitlement burden that threatens economic ruin as both societies age. European politicians want to spend money just as badly as American politicians, and undoubtedly will clamor to inflate – and thus devalue – the euro to fund their creaky social welfare systems.

Still, the rise of the Euro internationally is another sign that the U.S. dollar is not what it used to be. There is increasing pressure on nations to buy and sell oil in euros, and anecdotal evidence suggests that drug dealers and money launderers now prefer euros to dollars. Historically, the underground cash economy has always sought the most stable and valuable paper currency to conduct business.

More importantly, our greatest benefactors for the last twenty years – Asian central banks – have lost their appetite for holding U.S. dollars. China, Japan, and Asia in general have been happy to hold U.S. debt instruments in recent decades, but they will not prop up our spending habits forever. Foreign central banks understand that American leaders do not have the discipline to maintain a stable currency. When the rest of the world finally abandons the dollar as the global reserve currency, both Congress and American consumers will find borrowing money a more expensive proposition.

Remember, America can maintain a large trade deficit only if foreign banks continue to hold large numbers of dollars as their reserve currency. Our entire consumption economy is based on the willingness of foreigners to hold U.S. debt. We face a reordering of the entire world economy if the federal government cannot print, borrow, and spend money at a rate that satisfies its endless appetite for deficit spending.

At some point Americans must realize that Congress, and the Federal Reserve system that permits the creation of new money by fiat, are the real culprits in the erosion of your personal savings and buying power. Congress relentlessly spends more than the Treasury collects in taxes each year, which means the U.S. government must either borrow or print money to operate – both of which cause the value of the dollar to drop. When we borrow a billion dollars every day simply to run the government, and when the Federal Reserve increases the money supply by trillions of dollars in just 15 years, we hardly can expect our dollars to increase in value.

mikalDollar bears could have easy call this year as many forces converge#1506311/2/07; 11:00:59

Tuesday, January 02, 2007 -

Economists anticipate that the fall of the U.S. dollar in world currency markets that began in 2006 will accelerate in 2007. "The dollar could lose as much as 30 percent of its value in 2007," econometrician John Williams, who publishes the website Shadow Government Statistics, told WND. "In 2007, we are likely to see the economic downturn of 2006 develop into a structural recession and yet we have international trade and federal budget deficits careening out of control." World Net Daily

Click Here For The Full Story

mikalPeaked prosperity underscores nature of overextensions and predatory colonialism#1506321/2/07; 11:33:09

World's Oil Outlook Frightening, Group Says
By Andrew Garber, Seattle Times staff reporter
"Dave Reid, a member of Seattle Peak Oil Awareness, added solar panels to his Beacon Hill home, which he purchased close to the new light-rail line.
Food shortages, cars abandoned, another depression. It's the stuff of nightmares — and the type of future an eclectic group of engineers, computer experts and others in
Seattle believe could await us.

They're not religious zealots predicting Armageddon, nor survivalists digging bomb shelters. They believe the world is about to start running out of gas.
Members of Seattle Peak Oil Awareness expect world production of oil and gasoline to peak soon, if it hasn't already, and hard times to follow. Similar groups are popping up around the country from Boston to Portland, despite oil-industry assertions that there's nothing to worry about...

Other members of the group talk about a financial shock caused by soaring oil prices, followed by something approaching the Great Depression.
"I think we're looking at recession upon recession upon recession," but not a complete breakdown of civilization, said Dave Reid, an electrical engineer with a touch of a Scottish accent.
"We're not going to Mad Max," he said, referring to the post-apocalyptic movie.
Reid, who is 43, is preparing by investing in gold, installing solar panels and buying a home near the new light-rail line, which he figures would still operate. Other members of the group are making similar preparations for a low-energy future."
[Calls for more government action mentioned in this article will grow louder. The Independent online featured a story this weekend that did just that based on global warming fears.
This is reason enough to believe the price of energy products will not go down, because government wants the tax revenues and bigger bureaucracy.
Add too many other propellants, some of which are:

Halliburtan, BP, Exxon Mobil et al.
Leveraged investment vehicles (and those slated to open).
Recent news of the monster broken (south of N. Pole) ice shelf & related global warming fears.
Costs of current, planned environmental restrictions.
Asian energy use for cars, industry.
Aging infrastructure.
Security costs associated with petrofuels.

skijust for Kilo #560625#1506331/2/07; 11:45:28

Yes, you are PRECISLY correct in stating: "After all, you cannot have the same money invested in both metals (gold & silver) simultaneously." The reason why you "missed the point" is that I intentionally did not make myself perfectly clear in a effort to avoid upsetting any of the gold-bug-investor types here. Didn't want to rub silver in their face so to speak.

Actually, silver has outperformed gold, not just the past two years, but on a multi-year basis. It is the clear investment winner & people should be paying attention. The impression that I get on the fourm is that many here still don't get it or don't want to see it.... thus we are forever talking about gold with little mention of silver.

As a small investor, I have one primary goal. "To make as much money as I possibly can in the shortest possible timeframe." Thus I only own silver and have no meaningful gold investments whatsoever.

Kilo, I can't recall seeing your name here all that often. So just for the record, I have been here for several years and have strongly advocated silver from the day of my arrival. So, I've always been on the right side of the price predicting contest. I hope you are too!

FlatlinerRumblings of Euro discontent#1506341/2/07; 11:50:40

A dichotomy? On one side we read that there is a building new world reserve currency – Euros (see mikal's posting below). On the other, rumblings of loss of confidence? Hum…

The article by Chris Laird has a great link in it ( ) and I wonder if there is more supporting information for his stand?

From Chris's article: "Reports of Germany and France readying stocks of native (non euro) currencies – in case of – what? Those reports alone made me take a big double take, thinking of what this can mean." Unfortunately, the only place I've found any hint that might support this statement is through reading the Wanta tail. Is there anyone that can support this claim via any other means?

968@ Flatliner#1506351/2/07; 13:30:14

Flatliner, what are your personal thoughts on the Wanta-story ?
mikalIncrease in base metals mining paces profits#1506361/2/07; 13:55:49

Major Base and Precious Metals all up in 2006. Where to in 2007? By: Rhona O’Connell
Posted: '02-JAN-07 12:00' GMT © Mineweb 1997-2006
LONDON ( --Excerpts:
"Last year saw yet another bullish performance overall from the metals markets with gains registered all round over the course of the year; this article is intended to provide a brief round-up of the metals’ activities.
As the table shows, the non-ferrous sector was a stronger performer than the precious metals...

Some financial houses are looking for a bursting of the commodities bubble during 2007, but GFMS Metals Consulting remains friendly towards the markets, noting that the economic environment remains remarkably benign for this stage of the cycle. The group does make it clear, however, that this and other fundamental factors do not necessarily point to further price increases. The Group's forecasts for 2008 will be published in its next Monthly Briefing."

Mikal-- The spread on a gold purchase and/or sale continues to shrink compared to that of other metals, especially
as wild volatility of these other metals escalates risk premiums.
Nonsense in this mineweb story about the end of the housing correction joins with reliance on long-compromised growth and economic statistics but doesn't mean that the actual shrinking in the US
GDP versus positive GDP in other nations won't turn into a global recession or (as is likely) worse:

"The economic numbers released for the United States towards the end of December were generally stronger than expected and there is an increasing view that the fall in the housing market, a key driver of the economy, is drawing to a close. The fed funds futures markets are now pricing in the possibility of one rate cut from the Federal Reserve next year, probably in the third quarter; this is more hawkish than the view prevailing before Christmas, when the markets were looking for two rate cuts with the first coming in the first quarter of the year.
The European Central Bank is expected to continue to raise rates as senior officials are consistently commenting to the effect that the Bank's monetary policy remains "accommodative" and money supply is also growing at a higher rate than is seen as comfortable, while the Bank of Japan, despite some continued concern on the part of some Japanese politicians, is likely to retain a hawkish view and to raise rates further, although this is both from a very low base and expected to be gradual."

Mikal -- Advances in money supply have not only accelerated. They have entered the statosphere, untethered and uncontrolled like Greenspan suggested, after he was retired and no longer paying lip service to the greatness of the "new economy" and structured finance. The many aggregates and proxies, derivatives and loans and financial instruments origination from nations like Japan, China, India, the EU, Britain and from their private companies, banks and financial institutions is overextended and overrated. Behind the walls of the BIS and it's geneological intimates it is time to rein in the Fed, for if rates are lowered, raised or kept steady, a "benign outcome" is no longer possible within this quarter IMO. New directions appear inevitable and the euro area should also see easy solutions to many gripping problems as a rising price of gold should buttress their balance sheets.
Industry groups such as GFMS are hopelessly undermined by corporate and political interests and this mineweb article reveals similar slant and some liberal use of rose-colored prognosis:

"With economic imbalances still a cause for concern this continues to point towards a further weakening of the dollar after its recent upward correction, while underlying global economic activity is likely to continue to underpin metals demand.
These factors continue therefore to point to sustained strength in the non-ferrous metals markets and, largely, to that of the precious metals also (there is plenty of scope here for arguing that there is in fact only one truly "precious" metal, but this piece is not the appropriate platform for that debate).

GFMS Metals Consulting notes that the supply side of the base metals is, as would be expected, more varied. The group highlights nickel as the market where the "producers are struggling meet demand" and pointed out also that many of the next generation of nickel projects are hampered by financial, technological or political risk. Copper, lead and zinc are characterised by extreme tightness at the concentrate stage (although this is likely to ease during the coming year) and that it is only in the aluminium market where we are already seeing a supply response to high prices.

As far as the precious metals are concerned, gold continues to enjoy broadly friendly sentiment on the back of the outlook for the dollar, sustained strength in the fundamentals and continued geo-political uncertainty. The platinum market, while the under performer in 2006, is expected to remain relatively buoyant although fresh mine supply is coming on stream in response to the price's notable strength earlier in the decade and the sustained tightness in the market, with little available by way of inventory. Palladium, by contrast, remains plagued by high inventory and this may hamper any further attempts at fresh strength.

Silver is the Lord Byron of the sector; in the words of Lady Caroline Lamb, "mad, bad and dangerous to know". The sharpness of the recoil in December of 2006 was by no means the first time this metal has dropped like a stone; its fundamentally justifiable price is considerably below the prevailing prices above $12.50 and holders should be aware that this metal can bite you when you least expect it. Note that professional speculators, of late, have been taking very quick turns in this market."

Flatliner@968#1506371/2/07; 14:04:15

Simple; What cannot be disproven could therefore be possible - and - time will surely tell us more.

At this point, I have queried the net enough to know that the information to disprove this is not currently within my grasp. If it was, I would share it, apologize in(to) this great forum and move on.

One thing that I have learned from the hours of reading through the postings that have been gathered on this site is that the posters humbly strive for honesty and demonstrate a clear desire to understand the truth and that the focus has been on the real underpinnings of the financial system. Thus, seeing the Wanta story (and hearing it - see a previous posting,) it sparks a little curiosity on my part, but I would guess that it would also spark the curiosity of others in the forum. Also, knowing that this forum is connected to a worldwide audience, it would logically play that if there is information outside my reach, there would be others that would have a simple disproval within their reach and they would share.

So far, that has not come about.

There are many claims made in the reports that could be easily verified – given the right connections. For instance, if the Germany and France are truly hedging their Euro stand with local currencies, by actually moving them into key banks, it would stand that we (those in the forum or those connected to the forum) would be able to make contact with someone that is a witness to get verification. If currencies are moving, someone has to move them. No?

Together, we are many eyes. With the net as our nervous system, we should be able to put this picture together sooner rather than later.

mikalElectronic trade starts off 2007#1506381/2/07; 14:28:04

Gold futures extend winning streak
Myra P. Saefong, MarketWatch
Last Update: 2:28 PM ET Jan 2, 2007
SAN FRANCISCO (MarketWatch) -- Excerpts:
"Gold futures extended their winning streak in electronic trading Tuesday, with a weaker U.S. dollar helping the precious metal start the new year on firm footing.
Trading on the New York Mercantile Exchange was closed to observe a day of mourning for former president Gerald Ford. Read more. Regular trading will resume Wednesday.
Gold for February delivery was last up $4.30, or 0.7%, at $642.30 an ounce in electronic trading on CME Globex.
Volume on the CME Globex electronic trading platform rose 31% in 2006, with total volume of 956 million contracts, the Chicago Mercantile Exchange reported Tuesday. CME Globex volume accounted for a record 75% of total CME volume for the fourth quarter of 2006, vs. 67% during the same period a year earlier.
On Friday, gold futures closed up $1.10 at $638 an ounce on Nymex, marking its fifth-straight session of gains. The price was 23% above the close of the front-month contract on the last day of 2005. See full story.
"Gold bullion kicked off 2007 with a follow-through rally that was prompted by further dollar weakness overseas," said Jon Nadler, an investment-products analyst at bullion dealers
"Trading activity may not resume a full participation level until next Monday and today's action also reflected market closings in Japan, in the U.S. equities markets, and the fact that some traders have not made it back to their desks yet," he said...

"If the economic data to be released soon will indeed (as many expect) confirm a cooling U.S. economy, the prospects for any imminent rise in U.S. dollar rates will keep getting pushed further back, as the primary concern for the Fed may become how to stimulate the over-extended and quite tired armies of U.S. consumers," said Nadler.
For now, "we remain friendly towards the [gold] market in a long-term accumulation sense, and whilst even the medium-term looks appealing, there are some risks still lingering in the background," he said, pointing out that $650 "has previously proven difficult to overcome, we are near a one month high, short-term dollar support could emerge" among other things.
So for the short term, traders might "wish to proceed with heightened caution."
Mikal-- These last few quotes are somewhat like performing a soothing zither or lute, strumming to tickle
in your ears a buzz over mythical "resistance" and "support" levels.
Low levels of PM's holdouts compared to earlier stages of the 5 yr bull market mean that some fence-sitters and experts(and I admire all the experts for their unique perspective and gold-insights versus the detractors and distractors)are nursing wounds, financial, psychological or both.

FlatlinerA continuation of ‘Euro discontent’ from below#1506391/2/07; 14:43:03

Empirical evidence states that the Euro is widely adopted. Also, many months ago, some head of a central European bank stated that he did not want oil trading in Euros. It would make the currency too strong thus leading to the problems that Euroland seems to be having today with exports and imports. Likewise, a rumor (very fine intelligence source?) states that Germany and France are distributing local currencies because they – are scared that the loss of function will kill the economy and thus kill the Euro currency.

At this point, the logic behind the function of the MTM gold in the European central banking system makes me believe that the conclusions reached above many not be completely accurate. Specifically, there is gold on reserve to defend the Euro.

My reasoning may be circular, but I'm leaning towards a story where the Euro engineers are pretending to discredit the Euro in order to intentionally elevate gold as the currency of currencies. People all around the world do not believe that there is enough gold in the world to absorb the ‘wealth’ held in currency terms, thus currency doesn't even consider chasing gold. Thus, the Euro engineers are trying really hard to get to world to move that way (towards gold). If they are successful, gold will be revalued, the Euro will continue to function and no paper currency stands up as the world reserve currency (it will have been replaced with gold). If they are not successful, they may withhold their own gold from the markets for a little while to bring the entire story to light. At that point, using gold to defend the Euro will be an easy thing to do and the Euro stands on it's own.

Either way, gold wins out. It's just a trick of getting the bulldog to look the other way while you jump the fence.

Minero@968 & Flatliner "Wanta story"#1506401/2/07; 15:12:13

I too have read all that I can find on this subject. The numbers are so large as to give me a headache. I can find nothing to truly discount the story. In lew of what I am seeing relating to the Illiminitti and NWO stuff, I suppose if one were true, the other well could be also.
Things are merky at best.

KiloMr. Ski#1506411/2/07; 15:12:51

True sir, I do tend to lurk more than post here at the castle, though my PM investments go back to the days of Jerome Smith and other early silver prognosticators. I still try to pick out the occasional words of wisdom from the "nothing new under the sun" daily rehash. (grin)

I agree that silver is the much more volitile of the primary PMs, that the market price in fiat can and often does outpace gold. But as we know from times past, this can apply to the downside as well as the upside.....the farther they rise, the farther (and faster) they tend to crash when that time comes. The 1978-1981 era is a good case in point. But where are we today, vis-a-vis the all-time market peaks ? Gold is comfortably in the 74 percentile range while silver still lags more along the lines of 26 percent of its peak. This is not to say that I prefer one over the other, gold or silver, and one can always look at the current situation from different perspectives. Either silver has failed to retain its peak percentage in comparison to gold, or in failing to do so, it provides even more opportunity for the future. Like any good prognosticator, a positive case can be made for any investment at any time when properly "spun" to fit the circumstances.

I suppose too that we each have our different goals in mind when it comes to the PMs. While you look to maximize (assumed dollar) profits in as short a time as possible as stated, others of us take into consideration maximizing our purchasing power stability in like kind. Does one form of metal provide more "volitility protection" than the other, while the other provides just the needed volitility to maximize in-and-out trading profits on a dollar basis ? I believe that is pretty much a well established fact of life.

I'd also like to say that I have followed your writings across the internet concerning silver, right along with the writings of others about gold. For many asundery reasons, I hold both with no particular aversion or preferrence for one over the other. Both fit the bill as far as "profits and protection" in my view, and that is the beauty of choice. As tejbear mentioned, "separate baskets" with similar goals, though I could ship my AU holdings in a single (heavy) package while it would take a truck to haul the AG. Interesting to note also that the AU holdings carry some 4 or 5 times the monetary value of the AG.

TownCrierGold's year-to-year gains... 35.9%, when considerately measured.#1506421/2/07; 15:28:51

Having seen a number of commentators in the press call attention to gold's price gain (23%) over the January-December span of 2006, I would like to offer a few additional words from a slightly different perspective which is more appropriate for the typical gold owner/investor and client of USAGOLD-Centennial.

As many folks have turned to physical gold ownership as a rock-solid alternative to the counterparty risks and margin-call follies inherent in the volatile derivatives markets, an evaluation of gold's price at year-end December 31st as a percentage-gain over January 1st makes little rhyme or reason when considered against the typical pattern of their acquisitions.

Our typical client and gold owner buys gold, not as a one-off speculation to coincide with an annual clock, but rather as a means to capture and consolidate the purchasing power of their accumulated excess dollars. They accomplish this through consistent and regular series of acquisitions throughout the year (and, even then, usually trying to catch any opportunistic price-dips).

When thinking about gains from year to year, therefore, I find it much more useful to bear in mind this behavior by which their accumulation of gold is acquired -- not at January 1st, but rather in increments throughout the whole year, and from one year to the next.

Just a moment ago I mentioned price dips, but for the sake of even-handedness, the remainder of this commentary will assume that those attempts provide results that are no better than another buying blindfolded.

For all transactions conducted throughout the span of 2005, the average goldprice was $444.5 per ounce for each transaction.

For all transactions conducted during 2006, the average goldprice was $604.0 per ounce for each transaction.

This simple and straightforward demonstration reveals that holdings bought on average (blindly) in 2005 and sold on average (blindly) during 2006 would have netted gains of 35.9 percent for the participant.

35.9 percent ! ! ! [That's pretty impressive for buying (and then selling) with your eyes closed!]

But again, in trying to address the situation as most accurately pertains to the typical client and goldowner, we would rewrite the section about to omit the part about them selling in 2006, and calculate instead that the same average 2005 gold held throughout is actually tipping the value meter at 44.1 percent gains when evaluated at today's current price of $640 per ounce.


As said above, average price in 2006 was $604, and average price in 2005 was $444.50.

2004's average spot price was $409.25 per transaction.

2003 had an average of $363.50 per ounce.

The average price for 2002 was $310.00, and the average 2001 price was $271.00 per ounce.

In percentage terms, year-by-year gains in average annual gold price have been 35.9 percent, 8.6 percent, 14.4 percent, 17.3 percent, and 12.6 percent.

The bottom line:
Physical gold -- no muss, no fuss, no hassles, no margin calls, no counterparty risk.

What are you waiting for? Diversify your portfolio today and begin your program of regular, tangible acquisitions.

Speak to a USAGOLD broker TOLL FREE 1-800-869-5115 for a diversification strategy that's right for you.


TownCrierArgentine savers angry at peso ruling#1506441/2/07; 16:20:49

December 28 2006 -- Argentine savers protested angrily on Thursday at a Supreme Court ruling designed to end a five-year impasse over the forcible conversion of dollar savings into devalued pesos during the country's 2001-02 crisis.

The judgment has caused further anger among many savers and could yet pave the way for more litigation.

The court upheld a government move on Wednesday and ordered that the value of dollar savings frozen at the end of 2001 to prevent a run on the banks and then converted into pesos at the start of 2002 would be repaid at current market rates and in pesos.

Jose Luis Espert, an economist, said: "Even if they are given the same amount as their dollars in 2001, a dollar today is not the same as a dollar five years ago." Mr Espert noted that the ruling gave no compensation for any return on the savings that people could have made during the past five years – a loss of 30 per cent, according to some calculations.

Dozens of Argentines gathered outside the Supreme Court with signs saying "Corrupt, thieves, give us back our savings" and "Remember: the banks robbed you and they'll do it again."

Mr Espert said it was lamentable that the court had upheld the expropriation of much of the nation's savings. "It's one more example of this country's institutional shortcomings," he said.

The government still faces litigation by the holders of $20m worth of bonds who refused a 70 per cent writedown on their debt and are suing for full reimbursement.

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

Dollars, pesos... merely variations on the same theme. Why save using paper when you can choose gold?

And speaking of which, on this specially appointed day of remembrance for Gerald R. Ford, we owe a special debt of gratitude to this fine man for signing into law the appropriate legislation which became effective December 31, 1974 and put an end to the abominable executive orders and legislations that germinated during the Roosevelt (FDR, not Teddy) administration which prohibited American citizens from owning gold from 1933.

This dark stain upon human rights lasted 42 years, through both Democratic and Republican administrations, and had a multi-generational negative impact to disassociate gold as a viable savings alternative in the minds of U.S. citizens. Barring any new acts from Congress, this restriction was finally put to rest under the steady hand and penmanship of our dearly departed and warmly remembered former President, Gerald Ford.


GOLD FINGERSet your goals & BUY gold!#1506451/2/07; 17:20:31

Happy 2007!

I find it interesting how many always refer gold as the "PAR" medium of exchange. I think that if I were to act on this comment taken from this article posted I would take my earnings in gold. In fact I whish more would pay in gold. I think over all many would be in a much better position.

......"With 600 feet of oceanfront property and an additional 1,100 feet along the Intercostals Waterway, real estate like this in southeastern Florida is pure gold."


I need some piggies for my gold collection!

FlatlinerAnyone use Euronext?#1506461/2/07; 17:22:17

Anyone know anything about it?

I'm able to find "Today, Euronext is Europe's leading cross-border exchange, integrating trading and clearing operations on regulated and non-regulated markets for cash products and derivatives. Euronext was formed in 2000 in response to the globalisation of capital markets and to create a pan-European exchange offering its participants increased liquidity and lower transaction costs."

Also find: "Transparency Directive. These measures are due to be finalised in the course of 2006. More competition between market operators is likely to result from the MiFID, which allows financial institutions to execute orders from clients outside the regulated markets by means of MTFs and the internalisation of order execution by investment firms. Moreover, the MiFID establishes a harmonised framework for Europe's regulated markets, which may make it easier for them to obtain recognition in countries outside the EU, including the US."

USAGOLD Daily Market ReportPage Update!#1506471/2/07; 17:23:49">
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.

TUESDAY Market Excerpts

January 2 (from MarketWatch) -- Gold futures extended their winning streak in electronic trading Tuesday, with a weaker U.S. dollar helping the precious metal start the new year on firm footing.

Trading on the New York Mercantile Exchange was closed to observe a day of mourning for former president Gerald Ford. Regular trading will resume Wednesday.

Gold for February delivery was last up $4.30 at $642.30 an ounce in electronic trading on CME Globex.

"Gold bullion kicked off 2007 with a follow-through rally that was prompted by further dollar weakness overseas," said Jon Nadler, an investment-products analyst at bullion dealers Kitco.

"Trading activity may not resume a full participation level until next Monday and today's action also reflected market closings in Japan, in the U.S. equities markets, and the fact that some traders have not made it back to their desks yet," he said.

For now, "we remain friendly towards the [gold] market in a long-term accumulation sense, and whilst even the medium-term looks appealing, there are some risks still lingering in the background," he said, pointing out that $650 "has previously proven difficult to overcome..."

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

PalWhere in the world is Paulson?... Update#1506481/2/07; 17:32:01

It looks like the original source at WorldReports is the first to give an update on the whereabouts of Henry Paulson.
The top link shows a close-up photo of him and here is another that(if you squint) he is seated in the top right corner.

I would like to know the story that he is telling to Condoleezza Rice in the linked photo. I can't help but think it started with: "You won't believe what happened to me in Germany..."


PalOther photo#1506491/2/07; 17:34:43

...too quick on the click.
mikal@Pal#1506501/2/07; 17:41:16

Thanks for digging up that photo.
Re: "You'll never guess what happened to me."
Maybe he said, "What will those bloggers dream up next?" :)

skiKilo#1506511/2/07; 17:46:25

Thanks for your reply. I could talk at length about many of the points that you brought up. Instead, in the spirit of "nothing new under the sun", I'd like to suggest only one thought to chew on.

I'll state my conclusion up front. TO GET THE MOST ACCURATE PICTURE OF SILVER'S PRICE BEHAVIOR OVER THE PAST 30 YEARS, OMIT THE PERIOD OF THE BRIEF, HUNT PRICE SPIKE. (This forces you to draw some very different conclusions.)

The Hunt price spike of 1980 was a one-off event mostly caused by less than 10 individuals. The spike to $50 was NOT a free market event and thus did not reflect the underlying supply and demand fundamentals of the day. It was a rogue event. Yet, everyone looks back at the spike with certainty that silver volatility is inherently extreme and silver investing is therefore very dangerous. To add insult to injury, todays PM's authors mistakenly compare the $50 dollar silver spike IN AN EQUAL LIGHT to the $850 spike in gold. They are not hardly related. If you omit the Hunt price spike, silver is NOT even one-half as volatile as people now believe.

I'm not one to haphazardly ignore history. But, IMHO, this is an exception the the rule. Without that price spike to cloud ones thinking, silver has made a very orderly advance and is not something to be feared.... but to be appreciated.

mikal@Flatliner#1506521/2/07; 18:00:44

Re: Your msg's on Euro and Euronext. Very good
and useful information. Here is a repost on euro use, circulation etc:
Euro Used as Legal Tender in Non-EU Nations
The Associated Press - Published: January 1, 2007
Excerpt: "BRUSSELS: Slovenia converted to the euro Monday, officially becoming the 13th member of the euro zone — and the first among the newest EU members to qualify to use the currency. But at least half a dozen other European mini-states and territories are using the currency as legal tender — without approval from the European Central Bank.

The euro was introduced five years ago to provide economic cohesion among EU countries. But euros also are in circulation in dozens of countries and overseas territories from the North Atlantic to the Pacific.
In Europe, Montenegro, Vatican City, San Marino and the principalities of Andorra and Monaco have used the euro since its inception.
In the province of Kosovo — administered by the United Nations, but technically still part of Serbia — the euro circulates alongside the Serbian dinar.
The European Central Bank has not opposed "unilateral euroization" by mini-states that historically have been linked to the French franc, Spanish peseta or German mark as legal tender.
"The ECB does not either encourage nor deter third countries from using the euro," the ECB president, Jean-Claude Trichet, said recently.
Joaqu'n Almunia, the EU economic and monetary affairs commissioner, has encouraged nations to adopt the euro as a means of achieving economic stability. "The adoption of the euro creates the right conditions for economic prosperity by providing low inflation and low interest rates," he said.
It is not uncommon for small countries in Africa, Latin America and Asia to use the currency of a major nation — typically, the U.S. dollar. When newly independent East Timor adopted the dollar after seceding from Indonesia in 1999, the U.S. Treasury dispatched planeloads of paper money and tons of coins to the impoverished Pacific nation.
However, the euro has made inroads into the international dominance of the dollar. Montenegro, for example, switched to the euro after having adopted the German mark in the 1990s."

arbyhGreetings and a Happy New Year....we all should hope so. #1506531/2/07; 18:03:52

I hope whatever market equalibrium quest to rebalance occurs...I hope it isn't too damn painful!!!! Having gold and silver , or not ...No what I mean?
mikal@Flatliner#1506541/2/07; 18:11:57

James Sinclair uses the same reasoning(as yours) on euro and gold in his early morning commentary today:
"Few have recognized the milestone event of the euro meeting and exceeding dollar use. The dollar became the universal reserve currency for two reason.

It was the only currency with enough in circulation to settle all world transactions in.
The sales force of the US Treasury, the World Bank and the IMF did a good selling job.
Now the Euro as the NON-DOLLAR has met and is exceeding the primary reasons the US dollar took the preeminent position. This is just another reason why the US dollar is headed for a very-very hard landing.

Regardless, the Euro is just another promise to pay backed by nothing whatsoever. This is when gold becomes the currency of choice by the people and $1650 follows."

GOLD FINGERDie for maybe!!#1506551/2/07; 18:36:53

One more thought.......with the rise in copper and other metals I would expect all premium metals like gold, silver and platinum are still a fantastic buy. I read now almost daily of thieves trying to rip out or rip off wire from construction sights to under ground conductors. I just find it fascinating to what ends some will go to convert something into a fast buck! This tells me a lot.

If I could only remember where my dad stashed that bail of copper wire!!


mikalGold bars stack up#1506561/2/07; 20:34:08 Gold Roars After ECB Member Bank Buys | Ambrose Evans-Pritchard | January 3, 2007
Go to link to see the ways in which gold bars
really DO stack up...

Sierra MadreMIKAL: ECB Bank bought gold in Dec. 2006#1506571/2/07; 21:37:25

Well, the announcement was downplayed as a possible "technical adjustment" with no significance.

I consider this as: "Strike ONE!"

Let's watch this interesting game and be on the lookout for further announcements.

In my opinion, one more announcement of this nature would constitute Strike TWO.

One more after that, Strike THREE, and it will be game over and pandemonium in the gold market. Market psychology: "Shucks, the CB's in Europe are buying gold. They must know something. I better buy some, too."

Might happen this year. One false move by the USA in foreign policy may provide the trigger.


Chris PowellFighting over gold in the land of Dracula#1506581/2/07; 21:46:23

Fighting Over Gold in the Land of Dracula

By Craig S. Smith
The New York Times
Wednesday, January 3, 2006

ROSIA MONTANA, Romania -- Eugen David, a small-time farmer with a chipped tooth and muddy boots in this obscure wrinkle of Transylvania, is an unlikely man to attract the attention of movie stars and moguls. But he counts Vanessa Redgrave, George Soros, and Teddy Goldsmith among his backers in a land battle with a Canadian gold mining company.

The company, Gabriel Resources, owns the rights to mine the hills here and wants Mr. David, 41, to leave his 50 acres of land so that the company can carve out what would be Europe's largest open-pit gold mine. Mr. David says he isn't budging.

"We don't want to move," he says, staring across at the brown-gray stain of Rosia Montana's defunct gold mine, which would be swallowed by Gabriel Resources' huge project.

In the old days, a pipsqueak like Mr. David wouldn't stand a chance fighting powerful and sophisticated adversaries like Gabriel Resources and its minority partner, the Romanian government.

But this is the Internet age, when local activists like Mr. David can tap into an increasingly well-oiled global network of non-governmental organizations for financial and political support on a long list of causes and emerge with almost as much clout as any corporation.

Mr. David's stubbornness has struck a chord with the anti-globalization movement. Gabriel Resources' proposed open-pit, cyanide-leaching mining process has also drawn the ire of international environmentalists who are now trying to stop it.

They just might win.

Mining is one of the world's most unpopular pursuits these days, particularly the gigantic gouging that leaves the earth pocked with moonscape-like craters a mile or more wide. Gold mining is disdained even more because of the perceived frivolity of its end: to provide lucre for the rich, status for the everyman, and hidden stores of wealth for nations.

But it also has a strong allure, particularly for resource-rich countries like Romania that are struggling to develop impoverished communities that need jobs.

The $3.7 billion project would plow more than $2 billion into the Romanian economy and could earn Gabriel Resources and its shareholders profits of $1 billion or more. And the company involved here, a Toronto-based corporation with market capitalization of $1 billion, is run by savvy mining executives, many of them highly experienced from cutting their teeth building Barrick Gold Corp., the largest gold mining company in the world.

The allure is perhaps stronger in Romania because the country was created, in a way, by gold mining.

Early in the second century A.D., Emperor Trajan extended Roman territory to include what is now Transylvania, in the western half of Romania, to mine Europe's most important gold deposits. The mines helped finance the expansion of the empire to its peak. When the Romans abandoned the territory almost 200 years later, they left behind colonists who are the ancestors of Romanians today.

When the Romans left, the mining did not stop. The eventual ruling dynasty, the Hapsburgs, and the Communists, who turned to open-pit mining, continued the process, though with dwindling efficiency. The mine was finally shut in early 2006.

Gabriel Resources was born in the breakup of the state-owned economy after communism's collapse when Romanian businessmen with little mining experience and suspected ties to the former secret police won a vast concession to exploit mineral deposits.

Mr. David and his neighbors realized six years ago that the company planned to expand the old mine and formed an association called Alburnus Maior -- Rosia Montana's Roman name -- to try to stop the project. They were engaged in an ineffective letter-writing campaign when the founders of Gabriel Resources moved the company's listing from Vancouver, British Columbia, to the more respectable Toronto Stock Exchange.

Mr. David's opposition might have withered had it not been for an ill-advised plan to build a Dracula theme park near the picturesque Romanian town of Sighisoara, once home to Vlad Dracula, the notorious Romanian ruler and inspiration for "Dracula," the Bram Stoker novel.

Prince Charles of Britain, fond of Romania's old Saxon villages, was outraged. So was Teddy Goldsmith, the aging anti-globalist environmentalist and scion of a wealthy business family.

A Swiss-born environmental journalist named Stephanie Roth, who wrote for Mr. Goldsmith's magazine, The Ecologist, moved to Romania to help defeat the project. With such powerful forces aligned against it, the theme park for Sighisoara died. While in Romania, Ms. Roth heard about the Gabriel Resources' plan for Rosia Montana and went to meet Mr. David in April 2002. Within months, she had introduced him to some of the most powerful environmental organizations in the world.

"When I came there was no computer, no Web site," Ms. Roth said. "I tried to empower the local organization."

Ms. Roth started by helping Mr. David's group obtain a grant for a few hundred dollars from an American environmental organization, Global Greengrants Fund. They organized a public hearing in Rosia Montana that drew 40 non-governmental organizations with Romanian operations, including Greenpeace, and catapulted Mr. David's dispute onto the national stage.

Then Ms. Roth took to the road. By the time Gabriel Resources' founders turned the company over to more professional management in 2005, the company had an international coalition of nongovernmental organizations arrayed against it.

But the mining industry doesn't easily back down.

Hoping to extract an estimated 300 tons of gold and 1,200 tons of silver from the mine, Gabriel Resources introduced a public relations campaign with Madison Avenue-style television commercials and community sponsorships to win over 960 Rosia Montana families that it needed to relocate. It cast itself as an economic savior. It even countered a critical documentary with its own film, "Mine Your Own Business."

Some efforts backfired. Gabriel Resources helped sponsor the Transylvanian International Film Festival in nearby Cluj-Napoca. But when its organizers invited Ms. Redgrave to receive a lifetime achievement award, Ms. Roth quickly put the actress and Mr. David together.

Ms. Redgrave's acceptance speech became a rallying cry against Gabriel Resources' project. The anti-Gabriel Resources' movement had its mascot and the European press began covering the story.

Word of the movement had by then reached the Open Society Institute of George Soros, which has been working for years for more accountability from Romanian public officials.

"When guys in SUVs with bags full of cash show up in a poor locality in Romania, they can really make the law there," said Radu Motoc, project director of the Open Society Foundation-Romania.

Nearly all members of Rosia Montana's former and current council are either employed by Rosia Montana Gold, Gabriel's local subsidiary, or have family members who are, according to the foundation.

The foundation, which has already given $35,000 to the cause, says it plans to spend as much as $240,000 next year fighting the project and helping Mr. David. Because of the polarizing debate surrounding open-pit gold mining, it is hard to find an unbiased commentator to assess the risks and benefits of Gabriel Resources' proposed mine. A major focus of contention is the use of large quantities of highly toxic cyanide to separate gold and silver from the ore.

In 1999, Aurul, a joint venture of the Australian mining company, Esmeralda Exploration, and a Romanian national company, Remin, began a leaching operation to recover gold from old tailings in Baia Mare, or Great Mine, roughly 80 miles north of Rosia Montana. Like Gabriel Resources, the company promised a state-of-the-art, self-contained project that would not pose risks to the environment. But less than a year later, the dam holding back a lake of cyanide-laced water burst, sending 100,000 cubic meters of contaminated water downstream to the Danube, killing more than 1,200 tons of fish in Hungary.

Gabriel Resources says it would build in safeguards that were missing at Baia Mare. It has promised to convert most of the cyanide into a nontoxic compound before discharging it into the mine's tailing pond. It also promises to clean up pollution left by past mining operations and spend $70 million to do as much as possible to repair the altered landscape after its project is done.

"Arsenic, cadmium, nickel, lead," said Catalin Hosu, a public relations official for Gabriel Resources, ticking off just a few of the heavy metals that leach from ancient mines to give this valley its name; Rosia Montana means "red mountain."

"We help the biodiversity; we help the environment," said Yani Roditis, Gabriel Resources' chief operating officer.

That's difficult for many people here to believe. The new project will grind down several hills, leaving four deep pits in their place, and slowly fill an entire valley with wastewater and tailings that will take years to solidify.

Robert E. Moran, a mining expert hired by the opposition to evaluate the impact of Gabriel Resources' plans, said that the mine, despite detoxification, would inevitably produce other toxic byproducts damaging to the environment, including heavy metals.

The controversy, meanwhile, has splintered the town, its buildings divided between those with signs that read, "Property of Rosia Montana Gold Corp." and others that say, "This Property Is Not For Sale."

"I was born here, so why should I leave?" said Gabriela Jorka, 38, who runs a small general store in Rosia Montana. "I'd rather kill myself."

Eugen Bobar, 60, the school principal, says that the dispute is pitting parents against children, husbands against wives. But only about 40 percent of the families to be relocated remain, and Mr. Bobar predicts that most of them will leave. "Most of the people who talk about the environment are just making an excuse," Mr. Bobar said, sitting in the school's office late one night. "They will leave for a good price."

Mr. David, however, insists there is a committed core of opponents who will not sell, whatever the offer. In that case, Gabriel Resources warns, it may ask the state to step in and move people out by force. But that could lead to years of legal wrangling.

The company has told its shareholders that it expects to receive final approval for the project from the Romanian government this year and will start producing gold by mid-2009.

Gabriel Resources, which is based in Toronto, is, meanwhile, trying to win over the remaining holdouts. It is sponsoring education for underprivileged children in Rosia Montana through a nongovernmental organization run by Leslie Hawke, the mother of the actor Ethan Hawke and a celebrity herself in Romania. She supports the project.

"It's probably better that nothing happened, but the gold is there and if they don't do it, somebody else will," Ms. Hawke said. "And I'd rather that they do it than somebody else."

mikal@Sierra Madre#1506591/2/07; 21:54:53

Good points. Also, regarding "One false move in foreign policy could provide the trigger", I was reminded of just that today as there was a long, purposefully lame article out titled(I may be paraphrasing) "Hot Spots in 2007", which, despite much sterilizing, was hardly encouraging,
proposed zilch solutions and represented that we
would not even get a "world muddling through", with "no resolutions in sight". Funny, isn't this what always happens when spending and inflation starts to get out of hand?

TopazGold-v-Silver.#1506601/2/07; 22:37:38$GOLD:$SILVER&p=D&st=1990-01-01&en=2006-12-23&id=p44105871339

They really are two different types of "investment" and I hold both for differing reasons.
The "dollar" Gold: "dollar" Silver ratio chart indicates $Silver is rapidly advancing on $Gold as the ratio descends can structure your acquisitions accordingly via the RSI and be ahead of the curve imo.
This is not to be confused with a Gold:Silver ratio though and only a shift in, or awareness of their use value as money will "suddenly and spontaneously" pull that little genie out of the hat!

KnallgoldOn the ECB bought Gold story#1506611/3/07; 00:12:20

"Nikos Kavalis, an analyst at GFMS, said it was too early to tell if the purchase was significant. "We would be cautious about this. These banks have a duty to uphold monetary stability: they're not hedge funds," he said."

What does he mean with that?Monetary stability,I think he meant $ stability/support,did he?Then he better had kept his mouth shot.Now he signified that the ECB probably has pulled $ support and gives a rat about "$ stability".

No,they're not hedge funds,thats why they are going back to Physical Gold.Long live the new stability!

CometoseRaid #1506621/3/07; 07:34:42

Nice push down this morning .......
It would appear that the move prior to this was not bluff and that there are a lot of buy orders backed up in the bottleneck .......

Whoever went into the market first this morning seems to have been able to buy themselves a lower price entry point.

Cometosesmackdown #1506631/3/07; 07:45:33

given that this is the first trading day of the year and in light of the late smackdown .........
this post smackdown lift is probably an ominous sign....
of the amount of money pouring into this metals bull now

this is a mark in time...

The Chinese New year hasn't begun yet.......

KiloMr. Ski#1506641/3/07; 08:44:00

I certainly agree with your contention that the 1980 era silver spike was a fluke, an anomaly which may or (more probably) may never be repeated on the same scale. Unfortunately, that same "spike" is used far too often in a marketing sense on those who do not understand or appreciate the (in)significance of "one-time" price spikes.

Still, all things are relative, and "timing is everything" when investing. Similar investments in gold or silver can result in very different returns or losses depending on entry and exit timing as you are aware. Personally, I started buying Mexican 50 Peso AU coins around 1968 as they were one of the readily available "legal" bullion coins at that time and could be had in quantity for a little over $50 per coin. Ah, the "good old days"..... Similarly, I also started buying silver about the same time, then at an average price of about $1.95 per ounce.

Leaving the spikes and dips aside since that time, and looking at the more "orderly" price advance from then to now, we still see gold "up" approximately 1542% in dollr terms while silver continues to lag at approximately 667% over the same time period. Keep in mind, these are my personal figures if you will, and may vary depending on those entry points.

But respective of silver, it has always shown more price volitility than gold for the most part, rising faster in up markets and falling faster on the dips on a percentage basis. THIS VOLITILITY is just what makes silver the better "trade play" and gold the better "buy and hold" in my opinion, though a good case can be made for either at different times and under different market conditions as we both know.

But these figures still fail to take into consideration such matters as inflation, taxes, storage costs, dealer spreads, opportunity costs in the way of lost "cash" interest, and so on. When all is said and done, there is much more to any investment than just "what it cost" vs. "what it's worth" at present. I think too many "investors" fail to take these additional matters into consideration and understand fully why the "buy and hold" is not always the most profitable over time.

USAGOLD / Centennial Precious Metals, Inc.Make a New Year's Resolution -- LEARN more about gold and DIVERSIFY your portfolio!#1506651/3/07; 09:25:40">Gold Investing - Second Edition
Knallgoldpaper POG#1506661/3/07; 10:01:58

You've got to wonder now if the bearish theory about "pulled support of the $ paper Gold market" by FOA has any sudden truth to it,I mean a possibly bullish story (an ECB bank buying Gold)yields a fat drop in POG.I think we can pull the "possibly" from bullish,it was said its "only a technical" in nature-they're painting somehow confirms me the oppsite,its indeed something relevant,a "first strike" as Sierra Madre suggested.I wouldn't hold any Gold contracts right now,thats for sure...

If they can't bring us past the old high 850 and the often mentioned 1000$/oz target,I think the paper Gold market is toast.

GoldiloxThe Hammer!#1506671/3/07; 10:41:22

Obviously, someone felt the $640+ was a little high for comfort, as the Comix 11:00-Noon onslaught has demonstrated!

A number have analysts have remarked that $650 seems to be a "line in the sand", and I don't doubt it. When we bust $650, it's quite possible that we'll be off and running to last May's 700+ figure rather quickly!

FlatlinerPrinciples based regulation?#1506681/3/07; 11:17:12

This is a little follow up from my posting yesterday (#150646). After looking a little more into that Transparency Directive, I started following "MiFID". Unfortunately, the documents that are spewed all over the net are less than useful, but the pod cast here:, gives a pretty good overview. Unfortunately it's 33 minutes long.

The most interesting part here is that the "Principles Based Regulation" that they talk about seems to hint towards what some key figures in the US talked about no to long ago. I wonder if they are related in any way?

The weird take away from the "MP001 - Introduction to MiFID" podcast is that there is much yet To Be Determined yet the law takes effect this month.

Does this relate to gold or market manipulation? I do wonder. There is a Know Your Client provision in the rules and you must prove Best Execution. Thus, I would guess that if these rules carry over into the commodities markets, much more information will be exposed with regards to WHO trades in the commodities markets. Or, better yet, the information will be traceable for legal research.

I would think that GATA would be all over this!

mikal@Goldilox#1506691/3/07; 11:52:23

Good to see you back. Re: "The hammer" and "$650 seems to be the line in the sand"
Your guess is as good as mine but I am in shock and awe today ;).
J.Sinclair thinks we will see
exceptional POG action starting Jan. 15 and frequently hedges that by saying it could occur sooner, or it could start between 1/15 and 1/30- his latest. Repeated often
enough to make me cringe, like other predictions that were less than accurate unfortunately.
I see the Japanese are still on holiday and thin trading and light volumes are not expected to return to normal until next week or the week after. This is important but many other factors apply. MK thinks Chinese buying and world central bank policies will work in our favor. Various signals have been sent regarding the dollar, gold and interest rates as well that he and others discussed.
Geopolitics too, and the situation in oil could easily boomerang(intentionally or accidentally) to provide an excuse for price inflation that comes mainly from competitive currency devaluation/"reflation" injections, teetering as we are on full hyperinflationary recognition and then economic crisis. No intermediate "recession" or "stagflation" this time. The situation today is so disordered that the market action shows desperation and extreme fragility. Anything could happen at any time, and I will not go into the Homeland Security predictions of an inevitable attack or similar ones by other countries including Saudi Arabia.

FlatlinerFuture stories#1506701/3/07; 12:04:45

We've all heard the stories where some big trader buys a truck load of metal on the futures markets and then shows up on delivery day only to find that he's turned away because the gold has be loaned out. Thus, to the big trader, the futures markets are a scam and even if they already hold the commodity in question, it doesn't reflect the true supply and demand fundamentals that would exist if it were known that the metal could not be delivered.

My question is, will the Best Execution and Transparency Laws allow big trader legal recourse with regards to this failure to deliver issue? If so, this market would allow big traders a playground in which to fetch metals.

It is clear to me that the systems built around the US Dollar have escape clauses that allow settlement in dollars rather than the actual commodity. This, in my opinion, allows for abuse in the system where big traders can take a loss in one market and offset it with a gain in another – both measured in dollars rather than the commodity itself.

mikal@Flatliner#1506711/3/07; 13:05:21

Thank you for the links and comments on MiFID yesterday and today. It appears part of the rules go into effect this month and part by Nov 1, 2007.
It applies only to equity exchanges in Europe such as Euronext(#1 European equity exchange in transactions and turnover), London Stock Exchange, Deutsche Borse, Borsa Italiana, OMX, BME, and the remainder.
Still it is fascinating the implications, yes?
From the euronext site, these ideals speak for themselves, and like the concise info at your links, pretty straightforward:

"Markets in Financial Instruments Directive (MiFID), which will be implemented by November 2007, opens competition by introducing a level playing-field between all execution venues in the European Union and reconfigures the trading value chain across intermediaries, brokers, data vendors and investors...
main objective is to create a single market in financial services within the European Union and to provide the marketplace and investors with a higher and more consistent level of transparency whilst ensuring a high quality of execution... Our model has allowed us to build the most liquid marketplace in Europe enabling investors to further develop their domestic as well as their cross-border business in a highly cost-efficient way and ensuring very high market quality, benefiting both issuers and investors."

mikalRapid world change#1506721/3/07; 13:23:39

Just posted by J. Sinclair at his site, this short article is actually a must read IMO for saavy gold investors keying in to geopolitics and energy:

Crude Oil and Natural Gas reserves divided between two superpower blocks - third world war over underwater reserves? | Balaji Reddy | India Daily | January 2, 2007
Excerpt: "It is interesting to note that US reliance on Opec highest in the last twenty years. America imports close to 40% of OPEC production. The strategic interests of America lies in protecting these energy reserves.

At the same time India, China and Bazil have quadrupled energy consumption. These economies are growing very fast. Interestingly, only 10% of OPEC output is consumed by these rapidly growing developing countries."

Federal_Reserves$5 Million Nickel Doesn't Fetch A Cent#1506731/3/07; 14:11:54

ORLANDO, Fla. -- The $5 million nickel isn't worth one red cent. At least not at auction.

A rare 1913 Liberty Head nickel was put on the block at New York-based Stack's Rare Coin Galleries. The nickel was struck secretly at the Philadelphia mint after its design was retired.

Pre-auction estimates pegged the nickel about $5 million. But when bidding started a $4.5 million there were no takers.

GoldiloxToday's attack#1506741/3/07; 14:12:59

@ mikal,

Of course, if JS' timing is not too far off, one can hardly expect it to come off without a pre-launch attack from the short community, can one?

mikalCan Democrats make a difference?#1506751/3/07; 14:15:53,20867,21009439-1702,00.html

Bush Seeks Backing for US Budget, Iraq
By Steve Holland in Washington | Reuters | January 04, 2007
Excerpt: "WITH Democrats poised to take over Congress, President George W. Bush today used a Rose Garden ceremony and a newspaper opinion piece to try to salvage his domestic agenda and win support for an Iraq policy he has yet to announce.
Speaking at a ceremony after a Cabinet meeting, Mr Bush used the White House stage to draw attention to his domestic agenda by announcing a plan to balance the US budget by 2012. He also wrote a rare opinion article in The Wall Street Journal promoting his new strategy for Iraq.
Mr Bush called upon Democrats to set aside politics, but Democrats, who are preparing to flex their muscle with a legislative push when they take command of Congress tomorrow, responded cautiously. "We hope that when the president says compromise, it means more than 'do it my way,' which is what he's meant in the past," said New York Democratic Senator Charles Schumer."

Mikal-- Politics make strange bedfellows. That is as true in the days when Schumer was just another Congressman as it is now in his leadership position on the floor. Though today Bush announced he will present next month a 5 yr plan for balancing the budget, can anyone take this seriously?
The Democrats could relent in opposition to Bush and the republicans, as they are scarcely a majority in the outset of several rigged midterm elections and have been "bedfellows" as long as there's been Democrats.
But circumstances will be such that both parties wishes will likely be superseded and minimized due to necessity and global orderings.

mikal@Goldilox#1506761/3/07; 15:07:29

Not to worry. 'Tis easily explained! Energy and some other commodities down and volatile. Dollar and stocks up. "Liquidity" issues.
The power elite, er MEDIA are in unanimous agreement! ;)

UPDATE 5- Gold falls, erases early gains, as dollar rallies
Wed Jan 3, 2007 9:13 PM GMT
By Frank Tang and Atul Prakash
NEW YORK/LONDON, Jan 3 (Reuters) --Excerpts: "Gold erased early gains and was quoted lower on the first trading day of the year, as the dollar rallied after a survey showed the U.S. factory sector expanded in December and energy prices fell sharply on Wednesday...
The market's early gain could be attributed to gold buying by a European central bank last month, a period which saw selling of the metal by other central banks in the region under an agreement that limits gold sales.
The European Central Bank said in a statement last week that figures to the week ended Dec. 22 reflected the selling of gold by one European central bank and "a net purchase by another Eurosystem central bank." It gave no further details.
Looking forward, dealers said the market was expected to remain choppy in the coming days.
"Typically market liquidity only properly returns in the second week of January, and a new trading year brings fresh budgets for investors to act on underlying convictions," said Robin Bhar, analyst at UBS Investment Bank.""

USAGOLD - Centennial Precious Metals, Inc.Has the latest USAGOLD NewsGroup reached YOUR e-mail inbox?#1506771/3/07; 15:32:43

Do you know...

Who's likening the U.S. to a "banana republic", and more importantly, WHY? ? ?

How has the recent Paulson-Bernanke mission to China given added credibility to this view of a sea change in international fortunes?

Some would say the Fed has become immaterial in the support for and fate of the U.S. dollar. While lower interest rates may be the likely prescription to bolster the slowing sectors (such as housing) of the internal economy, externally, however, John Tamny rightly reminds readers that "if the underlying monetary policy is not credible, there exists no fed funds rate that will shore up the dollar's value. If high rates were somehow a cure, then Brazil, Venezuela, and Lebanon would consistently possess stronger currencies than the rest of the world."

Which brings us to Argentina and the fallout of "banana currency" policies...

Were you aware that a recent Supreme Court decision had savers protesting angrily outside with signs saying "Corrupt, thieves, give us back our savings" and "Remember: the banks robbed you and they'll do it again" ?


You'll have already discovered these items (and more) if you've signed up for the USAGOLD NewsGroup -- the latest issue having been sent this morning.


What do you do when you don't have time to filter and process a world of endless news items?

Our NewsGroup attempts to help sort through the the overburden for the few nuggets relevant to your golden portfolio!

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This time around, we were especially surprised and pleased by the phone calls we've already received today with compliments on this morning's mailing. We certainly appreciate your expressions of gratitude as well as your continuing patronage!

TownCrierUS single biggest recipient of petrodollars -study#1506781/3/07; 16:53:47

NEW YORK, Jan 3 (Reuters) - The United States was the single biggest recipient of investments from oil exporters between 2003-2006, according to a Federal Reserve Bank of New York study released on Wednesday.

With oil revenues, or so-called petrodollars, expected to have reached about $968 billion in 2006 from around $300 billion in 2002, NY Fed analysts Matthew Higgins, Thomas Klitgaard, and Robert Lerman said investments by oil exporters in U.S. assets likely totaled about $314 billion between 2003-2006.

The $314 billion invested in the United States represented less than one-fourth of the more than $1.3 trillion oil exporters invested globally over the three-year period, the largest investment so far.

...The NY Fed study also indicated that most petrodollar investments found their way into the United States indirectly, as countries like Japan, which had received investments from oil exporters, funneled such inflows back to the United States through the purchase of U.S. securities.

On the trade side, oil exporters purchased more goods and services from the euro zone and China, which offset both regions' crude oil imports, the study said.

In the case of China, 60 cents of each $1 in oil purchases sent overseas returned to purchase Chinese goods.

By contrast, just 20 cents of each $1 imported by the United States came back for the purchase of American goods.

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

The headline seems to paint an overly bright picture given the undelying reality.

And getting to that point about the leven of indirect investments, naturally, once created, a goodly share of those excess dollars sent abroad are going to keep swirling around the international scene as a transactional element until they finally land in New York in search of an interest bearing acknowledgement of our indebtedness (i.e., a bond).

This is hardly a hallmark of a sound financial and economic ordering of affairs.

In all of this can you foresee the new role for gold in the future leveling of the playing field? Take a walk on "The Gold Trail".


PalInt'l Forecaster Midweek Reading#1506791/3/07; 18:38:01


"Had the Fed allowed the economy to be purged via recession in the early 1990s, we would have never had the stock market collapse of 2000 and 2001 and the real estate collapse of 2005-2009. Now we are also facing a credit collapse that should hit once the stock market heads down again. Once the demand for excessive credit ceases that will signal the bursting of a third bubble, all occurring within ten years. The segment to be hit hard during the coming credit collapse will be the financial and services industries. The Fed believes, or would have you believe, that deflation and depression can be avoided by continually increasing money and credit. Not in their wildest dreams. At some point the desire to borrow by business and financial sources will end or there will be some unexpected event, such as a derivatives failure or a hedge fund collapse and the ability to employ this credit will end. When that occurs you will have six months to a year to exit "all" investments except gold bullion coins. While all the foregoing is taking place inflation will rage and gold and silver will rise in spectacular fashion. The fed may be able to print endless supplies of money and credit, but people have to be induced to spend and borrow."
"The next two years will be absolutely giant for gold. You will make money you never dreamed of making. This is what betting parlance calls the lock – the-can't-lose bet. The two biggest recipients will be gold and silver shares and numismatic coins, following by silver numismatics, and gold and silver bullion and bullion coins. Share multiples will go ballistic - $850 and $25 will be broken in 2007 and we may well see $1,700 and $100."

"The big physical buyers will buy even more: India, China and the Middle East. All those under 50 years old will finally discover the significance gold and silver and their relevance to inflation and to the deflation flight to quality. Canada, the US and Europe will finally get involved in gold and silver related assets."


Bob Chapman gives a good summary of where we are economically and argues that we should seek physical gold and silver ownership.


MKAnyone?#1506801/3/07; 19:24:04

Does anyone remember a story about City of London bonuses being paid in French Napoleons? I remember reading but can't find the reference. Would be greatly appreciated.
Sierra MadreWHAT do the Gold Cartel and Walmart have in common?#1506811/3/07; 19:32:36

They both have the same slogans:



Sierra MadreMK: About bonuses in gold...#1506821/3/07; 19:41:22

Back in the sixties, one Christmas I offered to pay the higher executives of my company their bonus in gold.

They DECLINED. They could not save their bonuses, they had too many pressing needs that required cash. The gold would have made a nice pile, at $35/oz.

But, they never forgot the remarkable gesture which impressed them to no end, especially as they saw how things turned out some years later. One of them still lives.

Once a goldbug, always a goldbug!

Want to become a legend in your lifetime? Buy gold!


USAGOLD Daily Market ReportPage Update!#1506871/3/07; 20:27:50">
The Daily Gold Market Report has been updated.

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

WEDNESDAY Market Excerpts

The February contract closed down $8.20 at $629.80 on the New York Mercantile Exchange, marking its lowest closing level since Dec. 26. The contract reached a high of $647.20 earlier in the session, the contract's strongest intraday level since Dec. 5.

On Tuesday, the contract gained in electronic trading. The Nymex remained closed following New Year's to observe a day of mourning for former president Gerald Ford.

There's a "feeding frenzy of fear in paper equities" that's "drawing traders away from gold and silver" Wednesday, said Ned Schmidt, editor of the Value View Gold Report. "Funds are simply totally afraid of not being fully invested in the first week of the new year."

But "gold beat U.S. paper equities by a significant margin last year, and 2007 will be no different" he said.

Gold futures scored a 23% gain over the course of 2006.

"Dollar movements will be closely watched in the coming sessions," said James Moore, an analyst at, in a note to clients.

He said gold remains vulnerable in the short term to selling after having moved up on limited volumes over the Christmas period.

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

Chris PowellKitco's Nadler can only sneer at Blanchard report, not answer it#1506881/3/07; 22:46:54

12:35a ET Thursday, January 4, 2007

Dear Friend of GATA and Gold:

Resource Investor's Jon A. Nones has gotten a bit of a debate going between Blanchard & Co.'s research director, Neal R. Ryan, author of the recent critique of the secrecy of central bank gold lending, and Jon Nadler, an analyst for Nadler has been doing a lot of sneering at the Blanchard report, which Ryan has considered unfair. So Resource Investor has given them a chance to elaborate.

Nadler seems to have backed off a bit from his declaration that the gold market couldn't possibly be manipulated by the central banks. He tells Resource Investor: "We are not saying we are right, but would naturally prefer to be proven wrong by hard facts, accurate figures, and solid proof."

This is a strange formulation. If you're not saying you're right, why make the assertion in the first place? And again Nadler gives no indication of having examined the facts and figures that often have been offered to him, including the several public-record CONFESSIONS of central bank manipulation of the gold market:

Instead Nadler now seems to be saying he has been convinced that there is no central bank scheme against gold because he has possession of "pictures of all the gold in Fort Knox." Nadler is not quoted as to where he got those pictures, when they were taken, how much gold they show, and whether the gold shown is encumbered in any way by gold leasing, swaps, or other agreements or understandings among central banks. But since Nadler is so persuaded by pictures, GATA would like to show him one of a piece of property we're selling cheap:

The Blanchard study of the secrecy around gold lending and its potential for market manipulation and private profit from the abuse of public resources raises compelling questions, and Resource Investor's new report signifies as much. You can find it here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

CalidorHopefully Nadler's "pictures of all the gold in Fort Knox" ....#1506891/3/07; 23:55:38

.... don't have 007 fighting Odd Job in the foreground.

Best wishes to all for a healthy, happy, and prosperous New Year.


UsulFrench Napoleons#1506901/4/07; 01:03:18,,1962454,00.html

"...the Treasury has won legal victories that prevent City firms paying bonuses in antique coins to their bankers and traders in order to reduce their VAT bills..."
UsulFrench Napoleons#1506911/4/07; 01:04:36

This edition’s tax news relates to a recent case involving a scheme that attempted to avoid employer’s National Insurance Contributions on payments to the directors of a company. The bare bones of the scheme were that rather than bonuses, the directors received gold Napoleon coins..."

TopazThe third "leg"..#1506921/4/07; 02:26:35

"Had manipulation been successful, do you think we would have $600 gold? I certainly do not." ...Nadler.

There appears to be, in all these "expert" commentaries, the universal opinion that the method of measuring itself is rock-solid.
If we look at weights and measures, the lengths the world goes to to standardise Lbs, Kilos, Pints, Litres, Gallons, Feet, Meters etc. are incredible.
Why are we, here in the 21st Century complacent enough to accept this whimsical notion of "value" as expressed in fluctuating Dollars, Euros, Yen etc.

It's quite clear to me that the very essence of measuring value via Fiat currency is dependent upon Gold price manipulation ...above ALL else ..full stop!

UsulIs gold at $2000 yet?#1506931/4/07; 02:27:46

Bob Chapman says:

"The next two years will be absolutely giant for gold. You will make money you never dreamed of making. This is what betting parlance calls the lock - the-can't-lose bet."

I have been reading these types of claims for nearly a decade now. Gold should be regarded as a safe store of value and an insurance in case the fiat currency system goes haywire, as it did in Argentina; gold is no-one's obligation. If you hold gold, such as bullion coins purchased from USAGOLD, the value is right there in the metal and no-one can default on it. But claims like Chapman's are no better than the claims of stock market shills writing books about the Dow going to 48,000 or 100,000. If you bought gold 4 years ago, its dollar value is up 82%. There's a pretty good long-term trend in place, just as there is a long term shrinking of the value of fiat money. But if you bought gold on May 11, 2006, at $720.1, you'd still be underwater by 13%. A "can't lose bet?" If you were fortunate enough in picking stocks, you could recently have made 63.3% in Repros Therapeutics Inc. in one week, despite its being about 70% below its high of October 1997. But that is the reward part of the risk-reward combination. A 2000 study by the North American Securities Administrators Association, quoted in Forbes, found that 77 percent of day traders lose money -

James Turk is on record, in May 2006, as saying gold could hit $2000 in "six to twelve months" (See link).

If you bought gold on May 11, 2006, at $720.1 and read Turk, you might have thought you were on to a "can't lose bet". But at the end of May, 2006, gold was at $650.8. It's currently around $627. So in 7 months it's actually dropped, let alone hitting $2000. But we still have five months to go. If gold hits $2000 by the end of May I will be delighted.

Always do your own due diligence, and remember that you are ultimately responsible for your own investment decisons; people that highlight the advantages (or disadvantages) of particular investments may have a vested interest in them (or their contrary investments).

MKThanks, Usul#1506941/4/07; 05:57:55

The Guardian article was the one I had read. There is still one other reference I came across in a general article on end of year bonuses which I haven't been able to find. I found this observation useful: "The Gold Napoleon scheme's removal will disappoint some City stars, who already face a decline in the real value of their bonuses, which are usually dollar-denominated, because of the US currency's slide in value against the pound." They should also be thinking about the erosion of the pound's purchasing power in these times.

Do you happen to know why they are paid in dollars instead of pounds?

By the way, congrats to the City which has found a way to strategically place itself as a financial hub between the continent, the Gulf and the United States -- a stroke of genius which will continue to pay dividends for years to come (and benefit the gold market).

MineroWanta Case#1506951/4/07; 06:05:16

Last evening on their short wave radio broadcast, both Bob Chapman and Pat Kiley spoke of the Wanta case. They both claim that Sec. Paulson is under arrest in Germany, by order of a "World Court". They say that the story is only being poorly reported by the European media; however, they claim there is much discussion of the scandle on European talk radio.

Pat Kiley states that by noon today he will post complete details of his findings. Listening to his one hour broadcast, I didn't learn anything that I hadn't already read on the net.

LacklusterPaying Wages w/Gold Coin#1506961/4/07; 06:09:54

MK, your posts reminded me of something I read some time ago at another site:


The way the IRS looks at it, they will access the 'value' of the coin no matter what the 'face value' is.

It's called "Unequal Weights and Measures". It's the same if an employer paid you in 'silver coin' and you state you made only "$100.00 (in silver coin) for the week. The way the IRS looks at it, you really made 1500.00 FRN's and tax you on that amount. However, should you want to pay the tax in 'silver coin', they accept it only at 'face value' of $1.00. So, at a 25% tax bracket, they would tax you 375.00 FRN's. Bottom line, you make $100.00 in silver coin, you would need to pay $375.00 in silver coin for the tax.

There is a case here in Nevada, right now, that is dealing with this issue. A company paid their employees in $50.00 American Eagle Gold Coins. (To the tune of $120,000,000 worth!). Of course, the issue is "What is a dollar?"

I have spoken to the attorney who is handling this case and they will take this all the way to Supreme Court. Should they win, the implications are enormous! If you make 50,000.00 FRN's per year, if you got paid, instead, in 'silver coin' you would only be making $3,333.00 in equivalent 'silver coin'.

Would anyone need to pay taxes on $3,333.00? NO! Would you even have to file a 1040 on $3,333.00? NO!

This case is too detailed to go into here but I really want them to win. I don't believe there is anything on the internet about this case as yet. It is here in the Nevada US District Court. The case is United States vs. Alexander Loglia. Case No. CR-S-05-0121-RCJ-(RJJ).

I do have a copy of the case (sorry, I can't give it out) and it has quotes from Edwin Vieira, Jr. and others that point out the unequal 'weights and measures' issue. In other words, the Treasury Dept. is SUPPOSED to have "Equal Weights and Measures" with our monetary system. The FRN is NOT the definition of a "Dollar". In fact, neither the IRS, Treasury Dept, The Federal Reserve or the US Mint have any definition of a dollar! The only definition of a dollar is in the original Coin Act of 1792 which is a coin with 371.25 grains of silver.

If anyone has any questions on this case, I will be glad to answer them the best that I can.;topicseen#new


I don't know if anything about this, just throwing it on the table.

GoldiloxSM Claims#1506971/4/07; 06:24:03

@ Usul,

"But claims like Chapman's are no better than the claims of stock market shills writing books about the Dow going to 48,000 or 100,000."

Didn't we say the same thing in the 1980's about predictions of DOW 12000?

Given the "silent inflation", these guys are more right than wrong - only their timing is in error.

Thoreauly@ Lackluster re: the FRN vs. the constitutional dollar#1506981/4/07; 06:28:26

If the FRN vs. the constitutional dollar is ever argued in the Supreme Court, I'd have to bet that the court would find a way to rule on behalf of the former, as the welfare (and warfare) colossus of which the Supreme Court is very much a part rests entirely on the corruption of money that the FRN represents.

That is, the court would find a way to rule in favor of that which the Fed's previous chairman, before he sold out to the powers that be, argued so eloquently against (see link).

What fun it would be to follow the proceedings, however.

Lackluster@thoreauly#1506991/4/07; 06:43:36

I suspect such a case would never make it to the supreme court. They don't hear all the cases submitted to them, rather, don't they pick and choose?
TooliePaulson under arrest?#1507001/4/07; 06:47:34

Paulson was at Ford's services a couple days back, and will be on the Nightly Business Report tonight.

Of course it could be a shape shifting lizard filling his shoes.

9684 January 2007 - Consolidated financial statement of the Eurosystem as at 29 December 2006#1507011/4/07; 07:05:40

In the week ending 29 December 2006, the increase of EUR 2.8 billion in gold and gold receivables (asset item 1) mainly reflected quarterly revaluation adjustments. Other movements during the week resulted in a net increase of EUR 36 million. This was due mainly to the refining by a Eurosystem central bank of its holdings of gold coin with lower fine gold content into fine gold bullion, which resulted in an accounting movement between this asset item and other assets (asset item 9). This accounting movement more than offset the selling of the equivalent of EUR 19 million of gold by another Eurosystem central bank (consistent with the Central Bank Gold Agreement of 27 September 2004).

The net position of the Eurosystem in foreign currency (asset items 2 and 3 minus liability items 7, 8 and 9) decreased by EUR 4.8 billion to EUR 147.4 billion owing mainly to the effects of the quarterly revaluation of assets and liabilities. Customer and portfolio transactions in the period under review resulted in a decrease of EUR 0.1 billion.
I hope Towncrier is so kind to give us his thoughts on this statement.

Thoreauly@ Lackluster re: the FRN vs. the constitutional dollar#1507021/4/07; 07:17:13

You're probably right, of course, in the same way that Jefferson Davis was never tried for treason. That is, the government realized that it couldn't argue against the very principle upon which the nation was founded -- the right of secession -- never mind that generations of Americans have since been brainwashed into believing that ours is now and "indivisible" nation.

And so with the constitutional dollar, as the 1792 Coinage Act remains the law of the land, no matter what the powers that be might argue to the contrary.

tejbearGold at $2,000#1507031/4/07; 08:04:48

I, for one, enjoy Bob Chapman's musings. For the most part; I feel this guy is spot on. When he suggests that gold could explode to $2,000, I believe him. Let's face it; the constant manipulation of the precious metals markets by the central banks is obvious to those who monitor the markets closely. Just look at yesterday. Shortly after the NY trading opened, gold and silver dropped dramatically, and the value of the dollar increased. Score another one for the Central Banks.

But even with their constant manipulation, despite ups and downs, both gold and silver have increased nicely over the last year. This increase in value is a reflection of the "loss of control" by the central bankers. With more and more people and countries expressing dissatisfaction with the dollar, the future of the dollars is dim. We are approaching the end of this game and Charles Ponzi would be proud. The numbers of people who will lose their assets/savings in this game are in the billions. Like any Ponzi game, there are a number of loose ends or "dominos", i.e., derivatives, baby boomers, oil, global warming, shift in power to Asia, terrorists, etc. Does anyone who reads this forum believe that the dollar index will be above 85 in ten years? Five years? One year?

The Mogambo Guru believes that if we have an "uncontrolled collapse", the event will be over in one month. Think of the chaos that would soon follow… Is this scenario possible: yes? Probable, given current vacuum in the US leadership, I believe it is possible.

On the other hand, the Central Banks of the various governments "may" effectively control a slow reduction in the value of the dollar, avoiding tipping over dominos, and resulting in the US eventually having a lower standard of living.

It could go either way.

I tend to be prepared. I have spare tires for my cars. I have life insurance in order to take care of my wife and kids incase of an early end of my life. I avoid that "bad" parts of town in LA. I minimize my drinking and driving. My point here is that if you aren't ready for the possible "uncontrolled collapse", and if it happens, you will be "shit out of luck".

Since the Central Banks current game plan is unsustainable, I have followed George Soros advice and I have bet against it. As a result, the last 12 months have been very profitable. If the dominos start to fall "hard", those who concur with Bob Chapman will be happy to have gold, silver, FOOD & guns to protect to it. Although I am hoping for the best, either way, I will be ready.

The Bear

Paper Avalanche@ Lackluster#1507041/4/07; 08:16:34

Is this is a 9th circuit federal case in federal district court or is it being heard by an administrative judge for a federal agency?


Cometosecabal#1507051/4/07; 08:39:49

I've been pondering off shore Caribean trading partners of the Fed ....

I've been pondering the Fed policy to repeal reporting of

I've been pondering a Derivitive Bubble that keeps looming and growing larger and larger......

in the context of a WORLD GONE CRAZY where people of authority and position have been given charge over RACKING MANIPULATIONS in MARKETS at the WHIM OF WHO .....

Who was it that said Mayer Rothschild ......I don't care who runs a country (political power) .....Let me have control of the money...
{(perhaps indicated here is the fact if you control the money , you can control enough politicos to get your coveted prize; Money is power) See Bush Re: WANTA See BUSH RE: GOLD backed bonds issued by SECURITIES firm at WTC based on STOLEN TRUST DOCUMENTS which were DUE 9/12/2001 See BUSH RE: STOLEN GOLD CIA ACCOUNTS SOUTH AMERICA ...See missing Gold WTC BASEMENT}

HE was a banker and what he referred to may be witnessed now in it's farthest reaches ...of out of control, insanity.

For the purpose of protecting the STATUS QUO riding on top of ALMIGHTY DOLLAR........


THE ALMIGHTY DOLLAR IS TARNISHED by the men who are SMEARING THE LEGACY THE USA IS and the FLAG in the DIRT of their VILE CORRUPTIONS... to pursue the prizes of their GREED LUST AND POWER....

THe laws of physics are being applied to the markets using paper printing power as a lever to affect measures of counterbalance.

Since the practices being used are in VIOLATION OF standards of ECONOMIC TRUTH ...a payment will be made ......

I can only assume that all of these things are a part of a PLAN .....

Its a plan that doesn't require fiscal restraint on the part of politicians ....
It's a plan that doesn't require fiscal restraint on the part of bankers......... ( who both seem to be engaged in an experiment perhaps based on some merit derivitive to some PAPER and academician wrote on NEW WORLD ORDER GLOBAL CONTROL and MANAGEMENT MANIPULATION ETC)

It's a plan one might refer to as APPLIED CHAOS THEORY.

It looks like from contemporary standpoint that these policies are pursued to preserve the status quo as long as possible .....Those acquainted with cycles believe that these management techniques necessarily end in EXTREMES REVERT...

If the goal is to feign attempting to manage and control to preserve the status quo ....the actual end goal must be a bust ........WHy would they do that .....because the BANKERS CLEAN UP on those that they duped afterward....Engineering such a feat over the course of 15 years very subtle and makes their purposes and means undetectable....

THe rest of the world watches and laughs . I think it would be sad if the rest of the world decided that they had to teach AMERICAN BANKERS AND POLITICIANS a Lesson

GET RID OF BRIBERY (aka LOBBYING ) in washington and you won't have a bunch of whores running our country ....who will bend the constitution for whatever whim BUSH has up his SLEEVE. THEY'VE BENT MANY THINGS.... In 1st Samuel 8: 3 That Samuel when he was old appointed his sons Joel and Abiah judges in Israel " And his sons walked not in his ways , but turned aside after lucre, and took bribes, and perverted judgment"

That's what the practice of lobbying does " IT PERVERTS JUDGMENT "

It also attracts WHORES TO GO to TAKE in WASHINGTON ...anything that they can get for SELLING SOMETHING TO SOMEBODY...

THE BIBLE ALSO SAYS THE LOVE OF MONEY IS THE ROOT OF ALL EVIL. It produces sons of belial who now run your country
in networks. Networks of Pigs at the PIGS TROUGH and they are all getting greased down ....

The politicians and the bankers didn't get the message when they were told in NOVEMBER to get out of IRAQ....

THEY are the same arrogant terds they were before.....

Sometimes , when you do things in a WORLD that you believe is CENTRIC to you , you get the ire of the rest of the GLOBE . They say they are going to diversify out of dollars in RESERVES......that will not solve our problem,
if we don't get rid of the bankers and the politicians that are the cause of our unsound currency ..

LET YOUR NEW YEARS RESOLUTION BE THIS : SEND them a message ...................CLEAN YOUR OWN HOUSE by sending the bankers and politicians (who are ravaging the currency ) a message ( ultimately to preserve your future and your assets you have no choice)


Lackluster@ P. Avalanche#1507061/4/07; 08:52:15

I really know nothing about that case, it may even be fiction. As I said, I read that at another site, and cut and pasted it here. Searching the web for information on it turned up nothing. Even if fictitous, it provides some food for thought. Sorry I can't be of more help.
slingshotCometose#1507071/4/07; 08:53:20

Got Tar and Feathers?

CometoseSlingshot#1507091/4/07; 09:33:40

Who needs tar and feathers; SEE Dick Cheney /hunting /SHOT GUN. SEE DICK SHOOT. Make them all go hunting together. Maybe , they should all suit up and be deployed to IRAQ with substandard gear ( spelled VESTS) and substandard hummers. THEY all agreed that we should be there, maybe they should put their FLESH WHERE THERE MOUTH IS . PRESIDENT BUSH can LEAD THEM INTO BATTLE. and we can make his PAPPY come out of retirement and let him give the ground troops(congress and fed bankers) air support. He Can use a CARLYLE LEAR JET to drop DEPLETED URANIUM bombs on the IRAQUI men women and children . THE jet can have a caption on the side that says :" YOU CAN'T CATCH ME , I'm TOO SLICK FOR YOU Earthling FODDER UNITS "
SurvivorCould It Be? #1507101/4/07; 09:34:44

Gold nuggets falling from the sky above :)

- S

mikalWorld Court news#1507111/4/07; 09:46:19

A reader at rumormillnews has reported at their forum, they have found confirmation of H.P.'s arrest at the web site of the World Criminal Court aka World Court aka (UN or United Nations) International Court of Justice, for what it's worth.
Flatliner@World Court news ?#1507121/4/07; 10:13:10

If others can verify information, those of us in the forum should be able to also. Unfortunately, the only link that I can find to the "World Court" is: Through this site, I cannot find any access to records of any type other than a few press releases. Also, I only visited the English side of the site so I'm not sure if the other side is a mirror or not (it looks like it).

There is another report at: Which states: "I found proof of what you are writing in the records of the World Court. It was listed under criminal investigations and police reports. I typed in Henry Paulson, using no titles, and listed NY as his home. Search of Jan 3rd, came up with Henry M. Paulson; there were two arrests listings." Again, unfortunately I could not find where the information is listed. I have email out to the author of this website in order to validate this claim.

Mikal, is there a reference link, or trail of links, that will lead to verification from Rumormillnews?

KnallgoldMore commodity ETF's#1507131/4/07; 10:48:34

They are clearly trying to kill the whole commodity sector.
"We are returning to balance",well,it seems the banks don't listen.

Anyone think a blow off in derivatives can only end in a derivative melt down?No controlled burn scenario on the agenda it seems.

Flatlinerout with the old, in with the ...#1507141/4/07; 11:01:21

By Gabriel Madway
Last Update: 12:50 PM ET Jan 4, 2007

SAN FRANCISCO (MarketWatch) -- Harriet Miers on Thursday submitted her resignation as White House counsel, according to media reports. The White House said Miers' resignation takes effect Jan. 31, and a search for her successor is under way, the Associated Press reported. Bush nominated Miers in October of 2005 to replace retiring Supreme Court Justice Sandra Day O'Connor, but she met with resistance from conservatives who questioned her qualifications. The White House eventually withdrew the nomination. :END

Flatliner – We also see that Negroponte's changing jobs. A snip reads "Will it create more problems than it solves? That's the question Washington is pondering in the wake of a personnel whipsaw at the top of the Bush administration. As the nation faces growing concern about its Iraq policy and the need for clear intelligence to counter terrorist threats, Director of Intelligence John Negroponte will resign, U.S. officials have confirmed, to take an appointment as the No. 2 official at the State Dept and deputy to Condeleezza Rice." (Link,8599,1574029,00.html).

I wonder how many other changes we'll see in the next couple days?

Flatliner@Knallgold#1507151/4/07; 11:06:10

You state "They are clearly trying to kill the whole commodity sector." Yet, from your link we read "The ETFs will use commodity futures positions and will also generate yield on the cash and Treasury bonds they use as collateral, the companies said Thursday." To me, this means that they will not ‘own’ the commodities, but rather ‘own’ the derivative of the commodities.

Until the world understands the difference between derivatives and physical possession, let the games continue!

FlatlinerFirst gold bank would tune local market to global trade#1507161/4/07; 12:05:06

The Vietnam Gold Trading Association has proposed the central bank set up a gold bank, a crucial step to keep the country's gold market in tune with the international bullion business.
The association also proposed the central bank permit gold to be traded as a financial instrument rather than a precious metal.

Federal_ReservesDemocracy in Action#1507171/4/07; 12:51:52

With Social Security facing projections of insolvency, a Bush Administration plan would hasten that crisis by sending hundreds of millions of dollars in Social Security payments to Mexican citizens living in Mexico—including those who have worked illegally in the United States.

Under current law, an alien who worked illegally in the U.S. can only become eligible for Social Security benefits by becoming a legal U.S. resident. But officials at the State Department and Social Security Administration (SSA) are preparing a plan that would pay benefits to illegal aliens who have returned to Mexico.

The Bush Administration is negotiating an agreement with Mexico that Mexico has been seeking since the first such agreements were concluded more than twenty years ago. It would gain greater U.S. Social Security benefits for Mexicans who have worked in the United States, including those who worked illegally, and for their family members.[2] The agreement has not been signed yet, but the idea has already raised a firestorm of concern that may forestall it. If it were signed, it would be submitted to Congress, which would then have 60 days for either house to reject it, or it automatically would go into effect as an executive agreement.

>> Nobody who is a US citizen would support this.
>> And look at how it is voted in - with no vote.
>> What kind of snakes do we have in our government?
>> Outrageous!

UsulFederal Reserves,#1507181/4/07; 14:03:26

What date is that article? It says "Updated 11/03" at the bottom.
mikalFOMC UPdate#1507191/4/07; 14:29:47

Federal Reserve Bank of NY - Temporary Open Market Operations - January 4, 2006: REPOs nearly $24Billion
mikalAnother abandons good ship S.S. SorryState#1507201/4/07; 14:40:44,2145,12215_pg_10,00.html

News | 04.01.2007 | 21:00
Bush's legal counsel resigns
US President George W Bush's top legal advisor has resigned. White House spokesman Tony Snow said Harriet Miers submitted a letter to Bush announcing her intention to leave the job at the end of the month. She has held the position for the past six years. Bush's nominated the 61-year-old Miers to the Supreme Court in 2005. Her nomination was withdrawn after members of his own Republican Party raised questions about her conservative and judicial credentials.

GoldiloxSSI#1507211/4/07; 15:05:59

@ Federal_Reserves,

SSI is calculated based on what was paid in. Illegal, under-the-counter wages are not tracked for SSI, nor are they "credited" to "earnings".

If they're gonna withhold from earnings, it's only fair to give it back, as prescribed by the program. Otherwise, all non-citizens should get a pass on SSI withholding, whcih they DON'T.

I'm a lot more PO'd by spending SSI revenues to fatten Halliburton B&R in Iraq than sending payments to workers who earned them, no matter where they live.

USAGOLD Daily Market ReportPage Update!#1507221/4/07; 15:39:50">
The Daily Gold Market Report has been updated.

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

THURSDAY Market Excerpts

January 4 (DowJones) -- February gold futures contracts Thursday fell $3.60 to $626.20 on the Comex division of the New York Mercantile Exchange.

"It's fairly obvious why gold is down," said Dan Vaught, futures analyst with A.G. Edwards. "You're seeing the same thing you saw (during a gold sell-off) yesterday - a strong U.S. dollar and weak crude-oil markets."

As the gold pit was closing, the euro had fallen to $1.3094 from $1.3171 late Wednesday, and the Nybot U.S. dollar index was up 39 ticks to 84.31.

February crude oil was down $2.37 to $55.95 a barrel.

"With oil coming off, gold attempted a five-month uptrend line," said Paul McLeod, vice president for precious metals at Commerzbank. "It could test for a couple of days, just to make sure the support is solid there."

The Comex futures were slightly above this just ahead of the pit close, said McLeod.

"We're definitely testing the bottom part of the up channel," he said. "It tested it first yesterday, bounced back and closed a few dollars above. It tested it again today."

If this area continues to hold, it could help the market bounce next week, added McLeod.

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

mikalDigital disorder?#1507231/4/07; 16:26:30,_i_rssPage=73adc504-2ffa-11da-ba9f-00000e2511c8.html

Digital Gold and a Flawed Global Order
By Benn Steil
Published: January 4 2007 21:44 | Last updated: January 4 2007 21:44

It is remarkable how the world's short history of floating exchange rates has affected popular thinking about what is eternally normal and proper in the economic system. Recently, China-bashing US Senators Charles Schumer and Lindsey Graham wrote matter-of-factly that: "One of the fundamental tenets of free trade is that currencies should float."

Such a "tenet" would have been considered monstrous by most of the economics profession up until the last three decades of the 20th century, prior to which money accepted across borders had generally been gold, or claims on gold, for about 2,500 years. Even John Maynard Keynes, the arch-slayer of the last remnants of commodity money, was an adamant supporter of fixed exchange rates.

The rest of this article is for subscribers only

TownCrierDigital gold and a flawed global order#1507241/4/07; 16:33:56,_i_rssPage=73adc504-2ffa-11da-ba9f-00000e2511c8.html

January 4 2007 (Financial Times) -- It is remarkable how the world's short history of floating exchange rates has affected popular thinking about what is eternally normal and proper in the economic system. Recently, China-bashing US Senators Charles Schumer and Lindsey Graham wrote matter-of-factly that: "One of the fundamental tenets of free trade is that currencies should float."

Such a "tenet" would have been considered monstrous by most of the economics profession up until the last three decades of the 20th century, prior to which money accepted across borders had generally been gold, or claims on gold, for about 2,500 years. Even John Maynard Keynes, the arch-slayer of the last remnants of commodity money, was an adamant supporter of fixed exchange rates.

The rest of this article is for subscribers only...

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

Probably just as well, as it did not look to be off to a very illuminating start, despite the very promising headline.

The further you get into your monetary studies the more you realize that the nature of money, strictly speaking, is not the problem as it is largely everywhere and always the same thing.

The thing that IS the problem, however, is people's misunderstandings of that very same nature of money. And again, here I am referring to money in the strictly proper sense, not loosely as a catch-all term for what passes as currency, savings, wealth, etc.

Like a dialect of a spoken language itself, once you wrap your mind around it and understand the nuances, it is easy to understand the fundamental and IMPORTANT differences between the conveyance of information (via the spoken sound "kold" and the written word "C-O-L-D") or even via a picture or drawing of an iceburg versus the tangible iceburgs of the world. The mere association between the tangible item and the related information "kold" <spoken> or "c-o-l-d" <written>, although vital and convenient, does not in any way, shape, or form result in putting our system of language on a "Cold" standard.

People inherently know that when they want ice in their scotch, it takes physical ice -- all the incantations in the world, even if you're promised a million "cold" on paper, is not quite the same thing. Nor is or was it ever meant to be.

Why, then, do so many people remain in a state of confustion regarding the system (informational language) of MONEY?

It's because some people of low character have found that they can benefit from fostering and maintaining the confusion of others. That, of course, is greatly facilitated by the general intellectual laziness of these others.

Be a light in the darkness. Choose physical gold as the consolidation (secure, tangible wealth/savings) of your monetary income, and help educate others that mere INFORMATION (such as MONEY) can change and become worthless in the blink of an eye, whereas gold, being TANGIBLE wealth, is more secure -- it maintains its integrity and validity through the passage of time and changing geopolitical climates.


FlatlinerDigging back in the Archives#1507251/4/07; 16:53:10

Flatliner (11/14/06; 13:46:04MT - msg#: 149348)
@yesterday's The Invisible Hand posting that read
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 – Is time working towards this goal? One has to wonder.

One still has to wonder if such a move would be economically viable. Could it be? We have seen that some oil states have come out and said that they structure contracts in a way that allows them to settle in the currency of their choice. Thus, as the world moves to settle more contracts in currencies other than dollars, those left selling their oil for dollars will find their profits dropping – if – the central bank goal of lowering the dollar price of gold works.

Can oil be loaned? Can oil be swapped? Can big traders take up short positions that they never close? Some have claimed similar behavior in the gold market.

mikalDigital gold to da moon??#1507261/4/07; 17:07:57

Gold hits one-week low
Rising dollar and falling oil prices pressure the metal; jobs data awaited.
January 4 2007: 5:38 PM EST
NEW YORK (Reuters) --Snippittses: "Gold fell to a one-week low in late trading Thursday, hurt by lackluster oil prices and a dollar rally, as investors awaited Friday's U.S. jobs data, which should set direction for the dollar."
By 3:28 p.m. EST, spot gold fell to $621.50/622.50, against $627.70/628.70 in New York late on Wednesday. It hit a low of $622.50, last seen on Dec. 26."
Mikal-- We've waded into one of these where we're underestimated rudely, just what we like for a quick knockout. "Hurt" and at a "low" they say and that's just for starters.
But we're not playing around...

"Benchmark gold for February delivery on the COMEX metals trading division of the New York Mercantile Exchange was down $3.60 at $626.20 an ounce, traded in a tight range between $625.70 and $632.80 an ounce.
The dollar climbed for a second straight day, gaining support from a recent run of upbeat economic data that has lowered expectations the Federal Reserve may cut interest rates in coming months."
Mikal-- Now the aggressor pulls out his fancy, customary repertoire of offensive rationalizations. Little does he know they've become so ineffective and obvious they
make our work at humiliating him SO much easier. And that's not going to change because he has the home ring advantage. Come to Papa...

"The latest round of U.S. economic data - including Thursday's pending home sales and the Institute for Supply Management's report on the services sector - supported the view that although the economy is slowing, there are no signs of a sharp slowdown on the horizon.
"The move lower we have seen in the past couple of days has been more dollar-related than anything else. We might see some more weakness short-term, but gold will be well supported and I don't think we are going to dip below $600," said James Moore, precious metals analyst at"
Mikal-- James Moore, one of the few veteran pundits in the gold bull tournament, that is MARKET so far, delivers one of his masterful feints to put us off balance. But we're not buying it...

"Oil plunged another 5 percent on Thursday, adding to a 4 percent drop the previous session, as U.S. fuel stocks showed a big build amid unusually mild weather in the world's top energy consumer.
Gold prices tend to fall when energy prices drop, as the yellow metal is generally seen as a hedge against oil-led inflation."
Mikal-- To make things interesting, the opponent will occasionally attempt to distract and entertain by shaking
off a visible shower of sweat and body oil..

"It's just a consolidation phase. I think we will see gold higher later in the year, but short-term sentiment is little damaged," a European precious metals trader said."
Mikal-- I thought he was saying "is a little damaged", but he(she?) came close. We won't be dissillusioned by silly subliminal wordplay, especially from anonymous sources...

"The metal ended 2006 on a high note, rising 23 percent on an influx of funds diversifying their investments into markets with the potential for higher returns than stocks. It spiked to a 26-year high of $730 an ounce on May 12, 2006."
Mikal-- Neither will we fall prey to sentimental reminiscing...

""Falls in energy prices and other commodities, such as copper and other base metals, are worrying, but gold will continue to draw a lot of safe-haven demand with the situation in Iran unresolved and continuing tension in the Middle East," said Hisaaki Tasaka, a market analyst at Ace Koeki Co. Ltd.
Copper futures on the London Metal Exchange fell to a new nine-month low on expectations of a supply glut this year. Other base metals also declined, while oil extended losses.
Dealers said key U.S. economic data this week might provide cues about the dollar outlook and set direction for the precious metals market."
Mikal-- Parroting the obvious and trivializing the fundamentals does not ruffle our feathers...

""The markets are waiting for the number tomorrow," said Leonard Kaplan, president of Prospector Asset Management, referring to the U.S. nonfarm payrolls report, due at 8:30 a.m. EST (1330 GMT) on Friday.
A weak reading on job data would likely strengthen the view the U.S. Federal Reserve may start cutting interest rates in coming months to shore up a slowing economy."
Mikal-- We are delighted this fight features ANOTHER veteran pundit sizing up our market and giving us the TRUE agenda...

""There is a fair bit of key economic data in the U.S. over coming days, and that really is going to determine the fate of the greenback and where gold prices are likely to trend," Craig James, chief economist at Commonwealth Securities in Sydney, said."
Mikal-- Craig James! A triple header tag team of veteran
spin artists in one night! I've said it before and I'll say it again- it doesn't get any better than this.

mikal@TC#1507271/4/07; 17:54:43

Thanks, you have a way with words. Good posts are like good currency to the mind. Do you save all your "money" essays in one "digital" place? ;) Would make it easier for anyone to make "good" on them IMHO.
FlatlinerGold reserves measured in Euros rather than dollars.#1507281/4/07; 18:24:26

Romania's international reserves at 22.93 billion euros

Romania's international reserves stood at 22.93 billion euros (one euro now stands at about 1.31 U. S. dollars) on Dec. 31, 2006, the 104.7 tons of gold worth of 1. 625 billion euros included, the National Bank of Romania informed on Thursday.

The foreign currency reserve grew 84.2 million euros in December. Receipts of 509 million euros were registered in December, representing revenues from international reserve management, change in the foreign-exchange required reserves deposited by commercial banks and transfers to official foreign exchange reserves.

Outflows reached 428.8 million euros, representing principal payments and interest payments on the external public debt, direct and bearing the guarantee of the Ministry of Public Finance.

The gold stock stood flat at 104.7 tons, but following the developments in the world price of gold its value fell to 1,625 billion euros.

silvesterTC post 150724 Digital Gold #1507291/4/07; 19:54:48

Great post Town Crier. If one could change anything it would be the Charles Schumer and Lindsey Graham written statement about floating currencies.

It should have said " One of the fundamental tenets of free trade is that gold should float."

David LinkleyOil's drop#1507301/4/07; 20:46:11

Word reached me today that another hedge fund in trouble may be the reason for oil's severe drop over the past several days. I have not been able to confirm but it makes alot of sense.
mikalThe high stakes allocated to world oil reserves#1507311/4/07; 20:59:54

The "Demonization" of Muslims and the Battle for Oil
Michel Chossudovsky | Global Research | January 4, 2007
Apart from politics, religion, and any built in bias,
this short essay, like it's maps and charts,
offers a glimpse of economic dimensions of world energy resources/supplies.
It's also not hard to associate certain distortions and dislocations or other implications to the environment, society and world markets, with
the experimental, overextended duration of petro dominance
and exploitation.
Neither can the devastating characteristics of many natural disasters ever seem enough to dissuade rulers from
unecessary and unsustainable practices until the calamity is epic (irrefutably impressive).

contrarianDollar Collapse?#1507321/4/07; 22:54:09

Tejbear--Just my two cents (or is that 2.6 cents?) I think if there's any dollar collapse, it will happen quickly, not gradually over a period of years. This is how nature behaves, for example, as you can see last week, how they discovered 40 or so square miles of ice detaching from the Arctic. It happened in an hour. A critical state of instability is reached--a tipping point, as it were--and then all it needs is one little, seemingly insignificant catalyst, a little push, for it to all come crashing down. There are hidden faults of instability, such as in the earth's crust, whose energy is suddenly released in a destructive way.

Nature does not behave perfectly in a continuum. Also, look at state changes in matter. Water suddenly freezes to ice at 0 Celsius--it's not a gradual thing. So maybe Mogambo Guru is right and the whole thing could happen in a month. Certainly the Euro 2020 people envision such a crisis over this year, leading to a new monetary structure.

GOLD FINGERWhat will happen to GOLD when we out law oil?#1507331/5/07; 00:39:06

Greetings friends and fellow gold bugs,

Consider for a moment when we finally get to a point we no longer need OIL that produces CO emissions or other pollutions.

Consider the idea that we would no longer send billions to oil producing countries. Consider a world with out oil.

What would happen?

How would this effect the POG?

I bet we could go on for ever about this one. My idea is that irregardless of the oil and the effects on the earth's warming it will happen anyway!

So we set laws and make things more GREEN and eventually don't need oil in huge demands? When oil drops so invariably dose the POG. They are intertwined.

No oil, would mean COLDER north pole for the polar bears?

No oil will cheapen GOLD?

No oil might make the bears safe, but we humans might freeze?

Is this all hype or Fact....I wonder....


melda laurePOG in a world without oil. Gold in a world without credit.#1507341/5/07; 01:27:27

It is both simple and complex. We know how a world economy operates on a free fiat credit system: it operates badly! The question is how does it operate on a free energy system? A question I have asked, and which is not easy to answer.

Very difficult to see. Perhaps this new "freedom" can be controlled just like credit? In that case we will have a tyranny beyond imagining.

If not, then our work here will be at an end (or the beginning of the end) and the trail of men will merge with that of elves and perhaps surpass it quickly- the great hope of the Valar at which peril they tremble in fear.

When oil was "dirt cheap" it was necessary for a Standard Oil to consolidate it to control its power. Since the comming of hubbert's peak in north america, a worldwide re-consolidation effort has been underway, now in overdrive.

If the effort fails- THEY WILL TRY PLAN B. A more detailed statement is beyond me.

melda laureWhither POG when we outlaw government?#1507351/5/07; 01:49:34

It is perhaps a better question. Gold will achieve its greatest value when we are finally free to value it ourselves, absent the coercion of its "substitutes"

There was, after all, an age before oil. There will be an age after oil.

KnallgoldFlatliner#1507361/5/07; 05:05:03

""The ETFs will use commodity futures positions and will also generate yield on the cash and Treasury bonds they use as collateral, the companies said Thursday." FL:-To me, this means that they will not ‘own’ the commodities, but rather ‘own’ the derivative of the commodities.- "

They own the (writing of) derivatives of the commodities,the more they derivatise,the more they own.Its all about CONTROL!

KnallgoldTouche!#1507371/5/07; 05:40:53

"the center of the universe is the U.S. dollar, and it's dead -- only no one has officially told it yet," Grandich said. "
Lacklusterre gold no oil#1507381/5/07; 05:47:53

Well, the world got along without oil for many years before its discovery and utilization (approximately 99% of recorded history.)

Gold was valuable then, too.

KnallgoldNo oil = lower Gold price?#1507391/5/07; 06:07:51

The oil profits have to be stored somehow-it won't be paper $'s in the hot gulf desert,they are catching fire too easily...
tejbearContrarian msg#: 150732#1507401/5/07; 08:10:05

Unfortunately, I agree with you. In an email, the Mogambo advised that when people are dumping the dollar, they will not "stop" when the index is at fifty. Everyone will be running for the "exits" trying to minimize their losses. Also, ~six years ago, when the Argentinean Peso collapsed, the amount of time it took was roughly one month. Sadly, during that time, the government declared a "banking holiday", and limited the Argentineans to one ATM withdrawal per day. One month later, after most Argentineans lost all of their savings, riots and demonstrations lasted several months resulting in several deaths.

If the US government declares a " bank holiday", it is doubtful that anyone who isn't already "holding" gold, silver, guns and food will be able to do anything to save their assets because the banks will be closed. I have already had problems making a ten thousand dollar withdrawal from my bank, and we are not in a crisis mode. Besides, which bullion and coin store would want to be open during the crisis? My guess is that most people will lose just about all of their savings.

And of course, it can get worse. Since US business now use "efficient" material handling procedures, most companies have adopted the "Just in Time" methods for handling inventory. This results in companies having significantly lower amounts of inventory,and the associated carrying costs. BUT IT ALSO ELIMINATES THE STOCK PILES OF FOOD AND SUPPLIES NEEDED TO KEEP THINGS GOING SMOOTHLY IN TIMES OF EMERGENCY. So, it is likely that when the dollar's collapse happens, the "flow" of materials will stop, until some time later when some type of stability occurs. What two or three months? If Katrina is an indicator, is that two or three years? My understanding is that there is only a 3-day supply of gasoline in the LA area… It would be interesting to know how much food stockpiles are available here in LA.

Could these potentially catastrophe shortages be the real reason why the "moron" and the rest of Congress have enacted so many draconian police state laws? One can only surmise that something "else" is going on...

The Bear

CometosePOG /POS#1507411/5/07; 08:40:55

The COT numbers have been positive( The commercials in the gold and silver market seem to be net long for the past 5 out of 6 weeks reducing their shorts or increasing their longs ) for weeks . I believe we are getting a marked bottom in here .....

It's been choppy for a while ........the oil seems to be taking it's tole and we may have to wait a little longer than expected for lift off or we may get lots of traders acting early and gradually in anticipation of the next bad news ........or hurricane season. On the other hand , it may be that WINTER DESCENDS LIKE NIGHT FALL on the EAST COAST SOON .........that might cause things to spike in reversal in short order.

BoilermakerOil Sinking Hedge Fund(s)?#1507421/5/07; 08:43:18

Follow-up to David Linkley's Message 150730

"HedgeCo.Net (New York) - The recent drop in oil prices has raised market speculation that hedge funds might be taking large losses in oil position investments. A lot like the big natural gas bet that sank the multi-billion dollar Amaranth fund in 2006.
Oil prices stayed under $56 on Friday after an almost 9% drop over the past two days to its lowest close in 18 months. Investors are worried about growing U.S. fuel stocks and mild weather. The hefty losses in oil as well as in other commodities also may have been triggered by funds switching into other assets, it was reported in the Scotsman."

Chris PowellMineWeb: Central bank 'gold purchase' was just bookkeeping adjustment#1507431/5/07; 08:48:56

By Lawrence Williams
Friday, January 5, 2007

LONDON -- The recently reported ‘gold purchase’ by an ECB Central Bank does not appear to be a purchase per se, but only an adjustment relating to the refining of gold coins which had previously only been recorded under ‘other assets’ in the Central Bank in question's accounts. ...

contrarianReason for POG Down?, Plus Dollar Collapse Scenario#1507441/5/07; 09:12:10

I remember sometime last year, a large drop in POG was associated with the failure of a hedge fund--was it Amaranth? With today's rumors about a possible hedge fund collapse, plus the drop in the oil price, could the same scenario be happening. Very similar. I also remember with Amaranth, their downfall was natural gas futures, as they had expected another Katrina-like hurricane season.

Tejbear--could not agree with you more, in everything you say. Yes, the dollar collapse will happen, if not overnight (and perhaps the weekend, so banks will have time to shutdown and close on Monday), then over a month or so.

I, too, have food and water stockpiles, and was thinking why do I have these, but thank you for reminding me. 12 gallons of water, 30 or 40 cans of tuna, rice, beans, soups, etc. It is well to be prepared for what the government within the government may well have in store for us.

ThoreaulyPOG down $40 in two days!#1507451/5/07; 09:46:03

It is said that this kind of volatility is to be expected at this stage of the game, so I guess if you can't buy a dip like this, at least hang on and don't panic.

And if you've got your Precious in a "safe" deposit box, now might be the time to take it out -- and stockpile it with your other survival necessities.

USAGOLD / Centennial Precious Metals, Inc.Click link for latest NewsGroup (now added to the archive), and consider signing-up for timely e-mail distribution!#1507461/5/07; 09:49:42">join the newsgroup
BillinOregonPrice of gold dropping#1507471/5/07; 10:11:03

Just before gold made its run up to $800 in the early eighty's. It dropped over fifty dollars.

This could be an indicator of a rise in the near future.

Thoreauly@ BillinOregon re Price of gold dropping#1507481/5/07; 10:45:44

"Just before gold made its run up to $800 in the early eighty's. It dropped over fifty dollars."

Followed by a far more precipitous decline, except that the fundamentals are so vastly different today. For if Bernanke were to raise interest rates anything like Volker did, he would collapse the housing market, which in turn would collapse the economy. Yet to leave interest rates low, or to lower them even further, would only hasten the dollar's decline, prompting foreign central banks (especially the PBOC) to diversify out of it and precipitating a bond market collapse that would do the same thing.

Thus, over and over and over again, we need to remind ourselves that sooner or later the global fiat Ponzi must collapse and that the longer the collapse is delayed, the worse it will be.

Paper AvalancheQuestion About Gold Confiscation During Argentina Peso Collapse#1507491/5/07; 11:25:13

Does anyone know if gold was confiscated out of safe deposit boxes by the government in Argentina when the peso collapsed and the banking holiday was declared? Was it outlawed? Is it now legal to own gold in Argentina today?

Much thanks in advance to anyone who might know.


TitanRe: Price of gold dropping#1507501/5/07; 11:26:51

When we talk about the price dropping before it goes up, I am hopeful that's what will happen here too. It's kind of scary seeing such a drastic drop as we've seen this week. But I am reminded by people that know more than I do about what is involved in gold prices that this isn't just happenstance. There are people manipulating these prices for their own (or their organization's or entity's) benefit. And the little guy like you or me isn't really a concern of theirs.

I would love to see the price soar to what I think is its appropriate level sooner than later. But I've come to accept that these crazy and seemingly nonsensical drops in POG are just the result of more powerful folks wanting to discourage others from getting into their stash. I'll be holding my own as long as necessary, and hopefully I won't need to convert any of it when it's down. But I think it's more likely when I really need it will be when it has gone UP. The only thing I'm not sure of is to whom I will sell it at that point, and how.

Interesting times ahead, no doubt!

Thoreauly@ Titan#1507511/5/07; 11:44:45

Ideally, you won't ever have to sell it but will only spend it as needed, your horde fully monetized in a New World Order of freegold.
FlatlinerTaking away the bullets.#1507521/5/07; 11:59:17

Here is one article ( that states that "It [The Sanctions] also froze the assets of 10 Iranian companies and 12 individuals."

Here is another ( that names names. Snip: "Levey noted that the resolution cited three people as off limits to outside commercial transactions, and, in another section, prohibited transactions with agencies "owned or controlled" by them. The three, he said, are Maj. Gen. Yahya Rahim Safavi, commander of the Iranian Revolutionary Guard Corps; Gen. Hosein Salimi, who is in charge of the air force branch of the corps; and Ahmad Vahid Dastjerdi, who runs the Aerospace Industries Organization."

There sure seems to be a ‘surging’ demand for US Dollars right now. I wonder why...

TopazSystemic Death Rattles.#1507531/5/07; 12:00:34

At least it's good to know not only Gold types are caught in this downdraft ...all asset classes with the exception of $Cash got creamed today. With no Physical delivery issues to temper a PM selloff, PaperGold got trashed along with PaperBond, PaperStocks etc. The composite Bond/Dollar held up well though it must!
Flatliner@Systemic Death Rattles#1507541/5/07; 12:13:53

With all this movement going on, it would be interesting to hear from those selling physical gold to see if the phones have been busy.

Also, I would half expect to hear the Fed state that "a strong dollar is in the interest of the US" in the immediate future. If Federal Reserve Notes are not openly exchanged for commodities in a "strong" way, why would anyone hold one very long?

One thing to note: when all prices drop, those that choose the item that drops the least comes out on top. As we watch, it will be interesting to see what drops the least. My guess will be physical gold.

Flatliner@Oil Sinking Hedge Fund(s)?#1507551/5/07; 12:27:11

Boilermaker, As we've seen before, anyone that deals with financial derivatives that gets in trouble will be gobbled up by those that control financial derivatives.

The real situation comes with the underlying commodities. At the link you reference, it states: "A top Iranian oil official said they were hoping to keep markets balanced until the 12-member group meets on March 15, but OPEC was keeping an eye on hedge fund activity in the markets, "We have to see whether the funds overreact... If that's the case, we may have to consider meeting (before March)," said Iran's OPEC Governor Hossein Kazempour Ardebili."

To me, this is a clear indication that OPEC watches the actual consumption of oil in the marketplace, probably to prevent delivery default, most likely in support of the Dollar. At the same time, if they want more ‘value’ for their oil, they may have to look at selling it in Another currency.

But, I could be completely wrong. It just seems curious to me.

mikalEmployment numbers#1507561/5/07; 12:38:21

Good post at GE forum:
(robby) Jan 05, 11:59

ending in seven as in 2007 have a better than 95% chance of being a down year when speaking of the stock market. i believe that we reached a breaking point today. if the fed does not ease with abandon, that is money supply and rate cuts, the market gets killed. it's funny how the markets are paying more attention to a pie in the sky employment report as opposed to the factual adp report which came out on wednesday. the two reports are at the complete opposite end of the spectrums. i have to wonder how much more pain main street america can take from the bs that washington and wall street pump out."
Appearances are deceiving.

TopazFriday arvo early mark ...every week!#1507571/5/07; 13:04:34

Theres a lot to be said for being a Bug, not the least of which is every Friday @ 1330 we repair to the Drawing Room, kick back and pop the Champagne corks, get the cigar box out and clink to our proverbial brilliance ...or on some rare occasions (as today) taking on a more sombre countenance and restrict our tippling to Cognac or a nice Scotch.

The others meanwhile are busily sweating bullets right up to 1600 as they watch in abject horror as their preferred asset class withers further then ultimately drops from the vine.

Can someone pass that bladder 'o moonshine?

mikal@Contrarian, PaperAvalanche, Tejbear#1507581/5/07; 13:38:54

Re: Banks and systemic risks- I agree one never knows
how extensive a "systemic crisis", would be in severity and duration. Or whether we have already had the "trigger" per se in the shape of a hedge fund or funds, Fannie Mae or Freddie Mac, gold purchases by certain large and/or Asian CB's etc. Or is there to be a trigger from left field such as an eruption of Mt. Rainier or this:

Cash 'at Risk in Flu Pandemic' | Times Online | Breaking News | Jan 5

"More work needs to be done to ensure banks and cash machines stay open during a major flu outbreak, a City report has warned. The Financial Services Authority (FSA), Treasury and Bank of England said it was looking at ways of making cash distribution "more resilient" to a pandemic. It came after an exercise to test the financial industry's ability to deal with a pandemic found that the lack of available workers could lead to the closure of businesses such as banks."

melda laurePredicting oil consumption#1507591/5/07; 13:41:41

"Rules change in the reaches." or the fat tail events: SNOW, south of the border, not unheard of but not common either.

Be prepared before the storm closes the mall.

The HoopleMikal#1507601/5/07; 13:55:10

The employment report conflicts with all reality let alone the manufacturing and ADP reports. They must have really juiced the "birth/death model"to get these phony job numbers. One example, the employment report showed only a 3,000 decline in construction jobs, yet in just one county alone in my state nearly twice that amount got laid off. It is impossible to have 30-40% declines in both housing and domestic automobile production and not have more dire employment consequences.

We now have totally managed government information and financial markets. I'm sure one day unemployment will be closer to 25% and they will still be claiming 6.5%. I'm also sure when gold is 4 or 5 digits pundits like Nadler, Kaplan and Christian will attach gold's ascent to "speculator and hedge-driven". Like all managed information it's too dangerous to assert the truth.

tejbearPaper Avalanche #: 150749#1507611/5/07; 13:59:12

I wrote a paper on the Argentina collapse a few years ago. During my research, I don't recall any mention of gold being confiscated. Nor do I remember anyone losing anything stored in their safe deposit boxes at the bank. However, the vast majority of Argentineans lost their shirts by having their fiat money deposits become worthless during a government mandated "bank holiday". It was pretty much over in less than one month.

Best described as ugly…

The Bear

mikal Pandemic or bird-flu?#1507621/5/07; 14:02:04

Some are looking at the historical record when they expect a major outbreak. But over and over they say bird flu and pandemic are not necessarily both going to happen. It seems some sort of influenza could more readily infect those with uniquely compromised immune systems- the overweight, stressed, overworked or junk-food consumers.

Don't Count Out the Bird Flu, Although it's Been Quiet Lately by Bob Priddy | Missourinet / January 2, 2007

It's been a while since we've heard fears voiced of a bird flu pandemic but that does not mean it has gone away. The Bird Flu is still out there. A couple of cases recently showed up in Egypt. And health officials worldwide maintain a bird-flu watch. The Emerging Infections Coordinator at the state health department, Eddie Headrick, says there's a difference between the Bird Flu and a pandemic....He says a pandemic happens every 35 to 40 years, and we're due. It might be the bird flu...or it might be something else. He says pandemics happen about three times a century and there hasn't been one since 1968. Headrick says there has been "a lot of activity" in recent years with viruses jumping from birds to humans. He says the H5N virus, known as the bird flu, was spotted in 1997. Since then two other strains have developed and have made the jumps.l Headrick says it's hard to predict which strain will mutate. He says the health department has to be prepared to fight a pandemic, regardless of the breed of flu that constitutes it. He says his job is to try to stay ahead of the mutations. He says an elaborate international watch program reports anything happening in any country within 24 hours. But Headrick says we're due and it's likely a pandemic of some kind will hit in the near future.

mikal@Hoople#1507631/5/07; 14:08:32

Right on. Here is what Douglas Herman had to say about it a
few days ago:
"...True believers of the 911 fraud always ask me: What proof do I have? The proof is in the signature of the event. Not ONE US Intel group stepped forward to stop or slow the attack but assisted it at every step of the way. True believers, good and decent Americans for the most part, thus fail to acknowledge the overwhelming agenda by the US government, a government composed of liars, profiteers, conspirators and murderers.

Not to mention a US mainstream media as guilty of fraud and disinformation as the old Soviet state-sanctioned propaganda organs, Pravda and Tass. Long ago, in programs such as Operation Mockingbird, the CIA covertly put major publishing, newspaper, and media outlets, as well as thousands of individual reporters under direct agency control, from where they have mostly remained.

Understandably no one in the US media dare call 911 an inside job, a joint operating agreement..."

ThoreaulyEmployment report#1507641/5/07; 14:13:37

I only caught the tail end of it, but an analyst on CNBC earlier today referred to the report as a "lagging indicator" that is accordingly behind the curve so far as where the economy's heading. Hence its conflict with leading indicators like the NAHB Index --

In any case, better to take government reports with a grain of salt and look to intrepid economist John Williams (see link) for "Analysis Behind and Beyond Government Economic Reporting"

tejbearmikal #: 150758#1507651/5/07; 14:17:23

Frankly, given the small amount of money banks now keep on hand, any "slight" run on a bank would cause the bank's doors to quickly close. I have had Bank of America tell me a couple of times that I have to give them "notice" before I withdrew $10,000. I pressed them, and they eventually relented and gave me the cash. But I am bothered by the fact I had to "press" the tellers to get my money on a "normal business day".

If the "shit really hits the fan", a $10,000 withdrawal would be chump change. At that point, I don't really expect the ATMs to work either.

Sorry to be so grim.

The Bear

Lackluster@Tejbear#1507661/5/07; 14:23:53

Bear, that has been my experience at my small local bank. Sometimes I will want to withdraw five or six large for an auction or something, and they act like it's the end of the world, I have to give them a few days notice, etc. Admittedly, it's a small town branch of a small county bank, but still, c'mon. If six thousand breaks the bank, I can't imagine what would happen in a panic.
tejbearmikal #: 150763#1507671/5/07; 14:26:10

Did you like the AP poll of Americans a few days ago that asked who was the biggest villain in the world during the last year? Is was reviewed on MSNBC.

Bush received the most votes by garnering 25% of the vote. Bin Laden only received 8%, and Satan received 1%.

Even though the majority of Americans are "good folk", to bad they are so easily herded.

The Bear

SurvivorCash At The Counter#1507681/5/07; 14:55:02

@Tejbear, Lackluster

You are spot-on about available cash at a bank branch. The cash on hand would not last 15 minutes in a panic. The ATM would be off because it is empty.

There are contingency plans in place in the event of a cash shortage. These plans were exercised prior to year 2000. Even if TPTB intended to backfill a cash shortage (not a given) it would take some time, however.

Remember this from BB's mantra: "Keep enough cash on hand to last several months."

- S

TitanCash on hand, etc.#1507691/5/07; 15:26:21

If the banks won't be able to give us some of the money they are "holding" for us, can someone explain exactly how having some shiny yellow metal coins is going to get us by in such a crisis time? Is it advisable to have a stockpile of cash, along with food and whatever other items would be hard to acquire? Who would be able to give me a thousand dollars or so for my Gold Eagle when I need something spendable? Interesting questions to ponder!
Paper Avalanche@ tejbear - Thanks for the info#1507701/5/07; 15:58:49

I find it difficult to go along with the prevailing thought that in the event of a financial meltdown that the government is going to drill open every safe deposit box in the country to try and find privately held gold. It did not happen in Argentina, I believe, due to the seemingly impossible logistics of such an effort along with the potential legal implications of government seizure of common law property that would drag out ad infinitum in court.

So will the gubmint make gold illegal again as a work around to actual seizure at your local bank? Only if you believe that the internet is going away any time soon and the government, as part of making the possession of physical gold illegal, intends to prevent Citizens from buying gold over the internet from providers outside the country. That too, while not impossible, would be logistically unmanageable. I cannot foresee any situation where it is legal to own gold in China and every other country in the world only to be illegal in the states united. It would not work IMO.

My point in all of this is simply that while we grow ever closer each day to a derivatives meltdown or some other financial calamity, in all likelihood if you stay on the DL (for a few months if neccessary) and don't go ape shit when the banks close, that whatever is in your safe deposit box today will be safely waiting for you when the banks re-open and you are able to start an Amero savings account.

I may be wrong, but I have a hunch that a) I 'm right and b) we may know the answer to the question sooner rather than later.

Taking all comers on this one.....


SurvivorPractical Matters#1507711/5/07; 16:34:54

The primary purpose for holding gold is as a store of wealth that is independent of paper or electronic entries. Precious metals for this purpose will have value before, during, and after major shifts in the fiat money landscape.

During a major shift or meltdown, should such a thing happen, the emphasis is on surviving the days, weeks, or months until some semblance of order is restored. We don't like to think about this, but it does happen. Sometimes it is simply mother nature that puts us into survival mode for a time.

If order is absent and banks are on "holiday", then YES you should have enough fiat to last until order is restored or replacement currency becomes available. Some food, water, and fuel are also likely to provide you with a better quality of life.

In a meltdown, precious metals will certainly provide an advantage if you need to trade for necessities. Full ounce bullion coins will not be very useful unless you must trade for something of commensurate value. Your program of acquisition should provide for this. Contemporary gold coins are available in 0.5, 0.25, and 0.1 ounce sizes, and collector coins come in a range of small sizes. When 0.1 ounce of gold is still too big, there are "junk silver" coins in dollar, half-dollar, quarter, and dime sizes. Today junk silver coins trade for around 8 - 9 times face value so a quarter should be worth about a loaf of bread. It will be up to the individual to know values when it is time to trade.

FWIW, I've always heard that a few cases of whiskey would be great trading stock during chaos.

Plan for the worst and hope for the best.

- S

Flatliner@Cash on hand, etc.#1507721/5/07; 16:48:38

Titan, you made me laugh - "when I need something spendable?" lol! "Is it advisable..." "If the banks won't be able to give us some ..." I'm sure there are a number of smiles lurking.

Ponder I will. I hope you don't mind me doing it out loud.

I treat gold as savings. It represents a surplus today that can be redeemed on some future day. Gold is a real property, like a car or house with which I own the ‘title’ free and clear. Even though it is property, it is uniquely, and historically, money. Thinking big, it is what the central banks of the world use as their reserve and it is no one else's obligation! In other words, it is not debt and it is not a contractual agreement. Every coin that I own represents, to me, an exchange value (or it has worth) – much like it does to people in Vietnam that value their houses in Teal. A quick calculation shows that I should be able to get a ‘reasonable’ brand new car for 50-55 coins. In the future, I would expect something similar – if the conversion remains stable. But, it turns out that I do not need a new car today – thus, the reason why that purchasing power sits in gold.

What is advisable? To me, it is advisable to not have your position forced! Margin calls are dangerous. Art liquidations pummel the artists. In situations get tight, being prepared means that you are not forced to tap into your savings. Thus, in critical times, you would not want to ‘spend’ your gold. During critical times, you would want to defend your property and everything else that it entails.


On the flip side of the coin, it's hard to imagine the banks closing their doors. Why? Because of digital currencies and wire transfers. The reason why there are no reserves in the banks is because they don't need them. The debit card that you carry with you will always get you to your FRNs as long as the Federal Reserve is around to create currency on behalf of the US Treasury. It's Fiat. By rule of law, more can be created and distributed as needed.

A crisis in the banking system will only lead to more currency in circulation – rather than less.

The crisis that we need to really look out for is the loss of function of FRNs. Basically, if no one is willing to accept them, they are no good. When you think about who might not accept them, you might want to think about people outside the countries that use this currency as its legal tender. In other words, if there is a derivative crisis that forces a bailout that significantly increases the amount of FRNs in circulation, those that do not need to collect them for taxes may choose to collect some other currency instead. This will cause a commodity shortage in the US – which will make "food and whatever other items" very valuable. Thus, investment tip – buy those other items. Think of it as a diversification plan – one that saves your life so you can enjoy your life savings!

USAGOLD Daily Market ReportPage Update!#1507731/5/07; 17:05:39">
The Daily Gold Market Report has been updated.

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

FRIDAY Market Excerpts

January 5 (DowJones, MarketWatch) -- A strong U.S. jobs report Friday scaled back market expectations for potential U.S. interest-rate cuts, sending the dollar to its highest levels since Thanksgiving and putting the precious metals under heavy pressure, analysts said. Stop-loss activity and selling by managed-money accounts were reported.

The metals were ticking slightly lower in the early minutes of open-outcry trading, but the selling pressure quickly accelerated after the Labor Department said non-farm payrolls rose by 167,000 in December, topping the consensus forecast of 115,000. Furthermore, jobs growth in November and October were both revised higher.

The dollar skyrocketed, with the Nybot dollar index climbing as high as 84.81, its strongest level since Nov. 22. The euro dipped below $1.30 for the first time since Nov. 24. In response, Comex February gold fell as far as $603 at one point, its weakest level since Oct. 27.

"It's purely, purely a dollar phenomenon," said Bart Melek, senior economist who tracks metals for BMO Capital Markets. He later added, "Nobody really thinks the Fed is as ready to ease monetary policy as we might have thought a few days ago."

The COMEX February gold contract settled down $19.30 to $606.90.

"Much of the selling was believed to be liquidation in nature, probably managed-money in nature," said Jim Quinn, commodity floor analyst with A.G. Edwards. "It accelerated right when the jobs data came out. And when the jobs data came out, the dollar went from lower to higher rather aggressively."

February crude at Nymex was near steady as the Comex metals pits were closing, but nevertheless earlier in the day were as soft as $54.90, a decline of roughly 10% from the end-of-2006 price.

"It essentially means less inflationary pressures," said Melek. "Combined with a lower euro and higher dollar, that translates into selling pressure for gold."

Ned Schmidt, editor of the Value View Gold Report, pointed out that the higher employment means that the FOMC will not likely lower interest rates any time soon, and "in the Street's mind, that means the dollar will remains strong."

But "that thinking ignores the real fundamentals: trade deficit, dollar over-owned, central banks diversifying away from the dollar," he said.

"That all means this sell-off is way over done," he said, adding: "do not panic when the Street is panicking."

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

FlatlinerDigital gold and a flawed global order#1507741/5/07; 17:30:25

TownCrier, Look, the Council On Foreign Relations has duplicated the article that you referenced yesterday. At the end of that article:

"What is to be done? Realistically, sauve qui peut must be the message for nations whose currencies are not wanted by foreigners. Dollarization—abandonment of parochial currencies in favor of the dollar, euro or other internationally accepted money—is, in a world of fiat currencies, unsupported by gold or silver, the only way to globalize safely.

Of course, the status of internationally accepted money is not heaven-bestowed and there is no way effectively to insure against the unwinding of "global imbalances" should China, with nearly $1,000bn (€755bn) of reserves, and other reserve-rich central banks come to fear the unbearable lightness of their fiat holdings. Digitized commodity money may then be in store for us. Gold banks already exist that allow clients to make and receive digital gold payments—a form of electronic money, backed by gold in storage—around the globe. The business has grown significantly in recent years, in tandem with the dollar's decline.

As radical and implausible as it may sound, digitizing the earth's 2,500-year experiment with commodity money may ultimately prove far more sustainable than our recent 35-year experiment with monetary sovereignty."

I'm having a hard time understanding the intent of the last sentence in the first paragraph.

At the same time, the infrastructure is in place to digitize gold. Silver would just be a technicality. The last sentence seems to hint at more than gold and silver but other commodities as well.

Hum… Fractional reserve commodities; this is what bank runs is made of!

TownCrierFlatliner, on this notion of "fractional reserve commodities" -- aka "gold as money"...#1507751/5/07; 17:41:53

My only comment is, "Why on earth would anyone want to jam us back into (the illusion of) a convertible monetary/currency system that funnels us toward the economic and social disaster of 1933???"

Physical gold, gathered as is and with no attached financial frills, makes for SOUND SAVINGS which can reside safely outside of the monetary system, no matter how "unsound" that system may from time to time become.

Keeping it simple.



Flatliner@Fractional reserve commodities#1507761/5/07; 17:58:39

I completely agree. On the cover, this digitizing idea seems reasonable. But, the problem with it is that history shows that gold in a vault held as a base for currency will be over committed.

The only reason why I can think that something like this might be considered is if some key player doesn't have gold but everyone believes that they do. Or, if a key player has swapped all their gold for gold in the ground, they would not be able to make good on it today, but they could still claim to have it so that it could back the monetary system.

The concept stinks.

I agree that gold is "SOUND SAVINGS" and, if given the chance, it will function honorably as the worlds reserve currency with no strings attached.

tejbearFlatliner msg#: 150772#1507771/5/07; 18:13:41

Sorry, but I have to disagree with one of your points: "On the flip side of the coin, it's hard to imagine the banks closing their doors. Why? Because of digital currencies and wire transfers."

I don't think you correctly estimate how quickly a fiat currency can become valueless. If the dollar collapses as fast as the Mogambo predicts, then everyone will be trying to get all of their "cash" out of the banks and spend it on something, anything, whatever they can buy in order to protect their assets/savings by reducing their "holdings" of dollars. To that end, there will simply not be enough cash on hand at the banks to meet the needs of the customers. Remember, the key is they will want ALL OF THEIR MONEY out of the banks, right now. Helicopter Ben will crank up the presses, but I can't imagine how Ben will be able to keep up the demand.

If this unfurls as the Mogambo predicts, it will be a very scary month. Especially when the Jack Boots start patrolling the streets and "enforcing" Bush's marshal law.

The Bear

mikal@tejbear#1507781/5/07; 18:54:54

Re: "Did you like the AP poll of Americans a few days ago..." I just returned to the computer. Thanks for that, I hadn't seen it.
Tonight everybody is posting great output.

mikal@Flatliner#1507791/5/07; 19:34:26

Re: Your post and link "Digital Gold and A Flawed Global Order" posted at the Council on Foreign Relation's (CFR's)site was a pleasant surprise. Thank you.
Thought I'd never see the rest of that story after I posted it's FT preview yesterday, nor at the site of a "secret society" everyone knows is publicly operating as an independent, nonprofit think tank.
Their monthly(or is it bimonthly?) magazine "Foreign Affairs" is available at Borders, Barnes and Noble, etc. as a thick paperbound volume of essays and analysis said by many to predict the future course of the world. That's a stretch, if it were so easy they would quickly shut it down.
But this web site posting by the author: "The global monetary order that has emerged since the 1970's is now globalization's greatest source of vulnerability." and more, specific accusations followed by the proposed digital gold standard "solution" isn't going to crater gold another 31 bucks next week, but it sure tickles my sensitive little antennae!

mikal@Paper Avalanche, tejbear, Survivor, contrarian, Flatliner, Titan, TC#1507801/5/07; 20:27:11

This is far from my area of expertise, but the events
during and after Hurricane Hugo and then Katrina close behind, are considered many to be precedent setting in many ways.
We all know there is lingering suffering, bitterness and political skirmishes to this day. But the use of debit cards, the military and police and FEMA (and the operation of other local, state and federal gov't agencies and contractors) appeared as much premeditated and "lawful" as intrisically flawed and untested.
These emergency plans met with "unexpected" hardships
though many people donated weeks or months of time and hardship(or supplies, money or vehicles) to the rescue and cleanup.
Failure of emergency plans included "debit cards", post-disaster security, water, food and shelter etc.
The cost of this "efficiency" is actually the cost of the assumptions by and tragic, stifling dependence upon, overbearing, unaccountable and bloated central bureaucracies.
The ensuing contractor fraud and some survivors' and inmates' arson, burglary etc has the same man-made origin as instigated, financed wars, riots or insurrections. Lawyers, insurance companies and tax collectors always somehow seem to survive as much as the planned expansions of government infrastructure, staffing and "merit" raises.

GOLD FINGERIs it money or memory?#1507811/5/07; 20:30:10

Hello Friends,

The age of paper and other physical means of trade in my view will continue to be on a fast track to extinction.

The ability to get your funds or even spend them is not an easy task (referring to a few posts here). The other challenge is I went into a DOLLAR store where I happen to shop frequently to by goods mostly from china and my friend who owns the store still had a challenge accepting my 50.00 bill.
She even had to test it to see if it was real. Now, I did not take offence as I know she is just being a good business woman. However, it's little things like this along with tightened security issues such as: Passports now being required for international destinations, lead me to believe that the DOLLAR conversion will be simple and it will be digital in the future.

Physical will become rare and gold will soon be to outrageous to buy. To avoid economic disasters and even collapse I think we will all be moving to "digital tokens". A perfect way to keep track of what and who is spending. I mean I think we are very shy of this any way. I also think that it will be implemented rather easily. My belief is that all we need is another terrorist attack to justify and change in our so called "Fiat" system.

Now, with all the counterfeiting going on could this be a justified terrorist attack?

I was at the health food store the other day and a sign read.....NO MORE 100.00 DOLLAR BILLS..... Wow, I asked why and she said that several counterfeit bills had been passed and that when she went to the bank that the bank teller refused them. Now someone sure must be feeling dumb here or are the crooks getting smarter?

When all is said and done, it would not surprise me that a new form or medium and or exchange would be completely non physical!!

The luxury of GOLD!!

mikalCorrections to ommisions#1507821/5/07; 20:31:43

Meant ".. considered BY many to be unprecedented in many ways."
And let us not forget no-bid contractors and moneychangers in our list of "survivors"...

GoldiloxGood Question, indeed#1507831/5/07; 20:58:23


"Why on earth would anyone want to jam us back into (the illusion of) a convertible monetary/currency system that funnels us toward the economic and social disaster of 1933???"

Gold in hand represents: independent wealth
FIAT debt/credit represents: DEPENDENT wealth

What ruler in history preferred his subjects to own independent wealth when the alternative is to keep the citizenry "fat and happy", but totally dependent on his "grace" for wealth and security?

Just as Fannie and Freddie represent the "derivitization" of US RE wealth, with the side benefit of massive inflation to fatten the RE tax coffers, the "ownership society" so proudly touted by Bush and other NWO advocates delineates that ownership at the "grace of the state".

How long until some enterprising NWO bureacrat decides that in the interest of "national security", only state-blessed RFID embedded gold can be owned, to prevent its use as a "terrorist" instrument.

Someone who values security over freedom might suggest that this level of control is a good thing, or at least necessary, but with an admin who bypasses judicial oversight to monitor phone calls and emails, opens US mail, and even places the opposition party candidates on "no fly" lists, one can hardly say that the opportunity for political abuse is "not realistic".

Only when we can answer why the banksters ignored, nay fueled, the same conditions in Weimar Germany, will we be able to answer your original question.

Henry Ford's most widely disseminated volume was entitled "The International Jew, the World's Foremost Problem" - hint: the book was not about religion nor anti-semitic, but already in 1920, he was warning about the dangers of rule by the international banking cartels.

GoldendomeFriends--do not despair the commodities selloff.#1507841/5/07; 23:57:08

Take this opportunity; bolster your gold savings. We can be nearly assured (IMO) that our President and his administration are likely to do something this year that will be incredibly stupid (again) in the Middle East. That event will favorably effect commodities, as oil supplies tighten and dollars are sold for gold. I don't think that we should ever underestimate the ability of this administration to further isolate our nation politically and to negatively affect the U.S. population economically.
GoldiloxDigital vs. Paper money#1507851/6/07; 00:08:14

@ Gold Finger,

I went to Best Buy, a national chain, to pick up some electronic goodies during the holidays, and was told that I needed to get in a "special" line to pay in cash, because most of the registers were set up for "cards only".

TownCrierUgh... #1507861/6/07; 02:06:32

What kind of grubby wad were you flashing to be herded thusly?


GoldiloxGrubby wad . . .#1507871/6/07; 07:01:29

Would you believe $20 for a new video cable and $29 for a CD set for my old man? This was no big screen TV or new 'puter purchase.

They made that decision without even looking at my items - they just said, "All cash transactions must go to register X, the others (about a dozen) are for card transactions only".

BoilermakerBankers Supporting Our Troops#1507881/6/07; 07:39:16

WASHINGTON, Jan 5 (Reuters) - Banking trade groups want the Pentagon to narrowly apply a law that caps interest rates and fees on military personnel to payday loans only and not to other credit services, according to a letter obtained by Reuters on Friday.
Congress recently passed legislation that imposes a 36- percent cap on annual interest rates and fees that lenders can charge on credit cards and other loans provided to U.S. military personnel. The law, passed last year, was tucked into a Defense Department authorization bill.
"Our primary concern is that a broad application of the legislation could have the unfortunate impact of ... harming servicemen and women and their spouses and dependents by limiting their access to credit or increasing their credit costs," the letter said.

Wow! God bless the bankers. The poor devils just can't survive on 36% interest. Maybe they're trying to own the military in case of homeland rebellion.

LacklusterHigher Interest for US$ vs Other Currencies!#1507891/6/07; 07:55:10

From a website selling South American real estate (thanks, uranian.)


Q: May I finance my Lot purchase?

A: You may finance your Lot purchase.

1. Payoff period may be either 60 months (five years) or 120 months (ten years) your choice.

2. The minimum down payment is 10% of the purchase price, is the total amount required as a down payment for the lot of your choice.

3. The interest rate is fixed at 13.99% per year (fixed rate) for ten year loans and 10.00% per year on five year loans. These interest rates are based on payments being made in U.S. Dollars. If you will pay in a more stable currency, such as the Euro or the Brazilian Real, the interest rate would be about half the above rates, specifically 7% on ten year loans and 5% on five years loans. The U.S. Dollar has been rapidly devaluating in recent years and is projected to continue to devaluate. If you wish to finance and make payments in any other currency other than those mentioned above, please specify the currency you will make payments with and we will fix the interest rate based on the projected value of that currency for the length of the loan.



KnallgoldOil/POG#1507901/6/07; 10:16:27

I've awaited something from the oil guys,if POG and oil$ are dropping heavily at the same time they are getting unease.

"To me, this is a clear indication that OPEC watches the actual consumption of oil in the marketplace, probably to prevent delivery default, most likely in support of the Dollar. At the same time, if they want more ‘value’ for their oil, they may have to look at selling it in Another currency. "

Alternatively,they will get a higher POG for the pain.I'm on watch if the "promised" 1000$/oz. on the Comix are indeed coming,otherwise the case for $ support has lost its magic.Maybe the current drop is a V for Vendetta...

mikalMore on "jobs" reporting contradictions#1507911/6/07; 14:53:38

Posted On: Friday, January 05, 2007, 8:30:00 PM EST
Jim's Mailbox
Author: Jim Sinclair
Dan Norcini's Commentary

"My view on these jobs reports is that the data is so unreliable as to be comical. There was not a single player expecting a number of the magnitude we got this morning simply because of extrapolations from the various ISM surveys and Challenger, Grey reports as well as the other private firms issuing numbers. These firms get paid by their subscribers to produce data that is accurate and reliable so as to provide those clients with information to use in financial planning and strategy. How these private firms whose businesses rely on accuracy could be so far off the mark is something that few seem to stop and think about before blindly accepting the wild numbers from the same Feds who have so cooked the CPI that it has become meaningless and a waste of the trees that go into making up all the pencils used to create and scribble it.

How many of these jobs are given to us compliments of the "birth/death" model which is about as trustworthy as the rental equivalency of the CPI inputs?

The hedgies are blindly puking out just about everything that remotely resembles a commodity this week. Crude oil mauled, heating oil mauled, gasoline mauled, copper mauled, silver mauled, gold mauled, cocoa mauled, wheat mauled, beans and corn down, sugar down… this kind of selling is completely computer-model driven and is ferocious but it also runs its course very swiftly since there is no finesse or trading skill involved in attempting to exit positions in an orderly and disciplined matter but rather a wholesale rush to the exits to execute the sell order commanded by the COMPUTER KING given to its mindless, servile minions also known as hedge fund managers."
Mikal-- This fits in well with all the comments yesterday on this thread. Nothing else needs to be said except that some are saying foreigners will look at any service sector jobs creation, real or imagined, as causing even more negative marks against el bucko- due to
less support to their $'s as less US deficit alleviation and sound structural trends are indicated by Friday's 'stats'.

ArmageddonISRAEL NUKE STRIKE COMMING!!!#1507921/6/07; 15:54:14

From the Drudge Report:

Israel has drawn up secret plans to destroy Iran's uranium enrichment facilities with tactical nuclear weapons, the SUNDAY TIMES of London is planning to report, British media sources tell DRUDGE... MORE...



I had a feeling the sudden drop in the price of Gold and oil was to make it cheaper for those in the know to load up on gold and oil. :) You have to think like a crimminal to make money in the markets today. :)

GoldiloxFORBIDDEN RESEARCH#1507931/6/07; 17:32:34


Pilfering Savings and Capital Accounts
In view of the fact that there was no bond and foreign-exchange speculation under the gold standard, to the uninitiated this might appear as a pointless exercise. Whatever else it may be, pointless it is not. It epitomizes the metamorphosis of bonds under the regime of irredeemable currency. Bonds are no longer an instrument of savings. They are an instrument of exploitation. Bond speculators speculate and win big risk-free on the coattails of central bank open market operations. In doing so they pilfer the savers and plunder the producers. Here is how.

Bond speculation generates a long-wave interest-rate cycle linked to the price cycle (subject to leads and lags), known as the Kondratieff cycle. When in the rising mode, wealth is being siphoned off from the savings accounts of the savers; when in the falling mode, it is being siphoned off from the capital accounts of the producers, as explained above under (3). In either case, it is an irreversible process. Reversal of the trend will not put siphoned-off funds back into the account from which they have been pilfered.

While the pilfering of savings under the regime of irredeemable currency is fairly well understood, the plundering of capital is not. Yet the latter is the raw material of which deflations and depressions are made, as their chief characteristic is the destruction of productive capital. This highlights the urgency of research into the vulnerability of capital under irredeemable currency.

Producers are not aware that they are being victimized. They have been brain-washed into thinking that their losses are due to cosmic factors such as continental drift, to which monetary inflation is often likened, disingenuously, by mainstream economists. Producers are not even looking for the causes of growing deficiency in their capital accounts. If truth be told, the losses of producers are due to the threat that interest rates may be driven further down, while the losses of savers to the threat that they may be driven further up.

If truth be told, the losses of savers and producers are the gains of the multinational bankers and their lackeys, the corrupt politicians. They are the only beneficiaries of the regime of irredeemable currency that allows them to tap into the savings and capital accounts of society clandestinely. They will not stop until they will have squeezed the last drop of blood out of the savings accounts of the savers and the capital accounts of the producers by chasing bond prices up and down, effectively enslaving the entire population of the Earth.


Go to the URL for a list of 12 topics Antal Fekete feels are too "hot" for general dissemination.

USAGOLD / Centennial Precious Metals, Inc.Especially designed for those who are taking their first step...#1507941/6/07; 17:54:33">gold ownership starter kit
Chris PowellMarkets misread 'strong dollar' policy, Harvard economist says#1507951/6/07; 20:24:01

From Reuters
Saturday, January 6, 2006

CHICAGO -- A misunderstanding by financial markets of the so-called "strong dollar" mantra preached by U.S. officials is helping keep the U.S. currency overpriced and contributing to bloated external deficits, Harvard University economist Martin Feldstein said on Saturday.

Speaking on a panel on the U.S. current account deficit at the Allied Social Sciences Conventions, Feldstein outlined several factors that are holding the dollar at an overly high, and unsustainable, level.

Repeated statements by U.S. officials in support of a strong dollar "are a nice slogan, but that's all it is," said Feldstein, who is also head of the private National Bureau of Economic Research.

Feldstein said a correct interpretation is that "we would like to have a strong U.S. dollar at home (helped by low inflation rates) and a competitive dollar in the world."

Financial markets are "misled" if they think there would be government intervention or a shift in the Federal Reserve's monetary policy to protect the dollar's value, he said.

"The Treasury should not advocate a decline in the dollar, but it should not mislead the markets to think there is some hidden support there for the currency," he said.

Feldstein said the sense that foreign investment will keep flowing to the United States because it is still the healthiest economy is another "error of understanding."

Most of the money now coming into the country is for debt purchases by foreign governments, not from equity investors attracted by fundamental strength in the U.S. economy, as was more the case in the 1990s, he said.

Speaking on the same panel, Michael Mussa, senior fellow at the Peterson Institute of International Economics, a leading think-tank, said the dollar will need to depreciate substantially, in real effective terms, probably by at least another 20 percent over the next decade to help cut the U.S. current account deficit in half.

The dollar has fallen in the past five years by about 15 percent on a trade-weighted basis against an index of major trading partners. Nonetheless, Feldstein and others say it is still overvalued.

The current account is the net flow of transactions, including goods, services and interest payments, between countries. The U.S. deficit most recently was running at about $900 billion a year, almost 7 percent of U.S. gross domestic product or roughly double the peak deficit of a share of GDP reached in the 1980s.

Many economists regard that level as unsustainable, but the timing, trajectory and impact of any adjustment process remains subject to vigorous debate.

Mussa said opinions on issue are typically split between the Alfred E. Newman "What Me Worry?" school, and the Chicken Little "The Sky is Falling" contingent.

Slashing the deficit with a weaker currency "will not be completely smooth" but the risk of a disruptive dollar crash is not particularly great, Mussa said.

At the same time, China's currency, the yuan, needs to adjust more rapidly than the nominal changes made over the past 18 months, he said.

"The need for substantial appreciation of the yuan against the dollar over the medium term is unmistakable," he said.

China, in contrast to the United States, runs a huge current account surplus. In addition, it runs a large trade surplus with the United States. In October, Washington reported a record $24.4 billion trade deficit with China, 40 percent of the total U.S. trade deficit.

Feldstein said both an increase in U.S. domestic savings, now running at a negative rate, and a dollar decline were necessary to wrestle the current account deficit to the mat.

"An increase in the savings rate is necessary but not sufficient to bring about an adjustment," he said.

donnemuirGoldilox # 150793 #1507961/6/07; 20:53:52

A great book for an historical perspective on many of Antal Fekete's "12".....The Money Men: Capitalism, Democracy, and the Hundred Year's War Over the American Dollar...H.W. Brands, author.
mikalPosting?#1507971/7/07; 00:18:36

mikalChina- the old, the new and the unknown#1507981/7/07; 00:22:47,,1984044,00.html

New China, New Crisis-
How China's economic reforms create seismic tensions within the state | Will Hutton | Observer | Sunday, January 7, 2006
Size limits on posts only way to post

mikalRetry#1507991/7/07; 00:26:00

Edited excerpts from sweeping China book set for release this month.
The author provides an abundane of surprises(I learned a LOT) and humility(read towards the end where he capitulates and admits his and...(see next post)

mikal(No Subject)#1508001/7/07; 00:32:31

... our western "hypocrisy" and double standards toward "western" institutions, "values", "accountability" etc.).
This abridged "review" seems consise because it's easy to read and a quick read.
There are reminders and new info here. Should result in most of us looking at China and the world in a different way, even if you select just a part of it.
Thank you.

mikal(No Subject)#1508011/7/07; 00:48:29§ion=0&article=90698&d=7&m=1&y=2007

DSF Gold Sales Skyrocket
Arab News | Sunday, January 7, 2006
Gold sales in Dubai exceeded expectations and the
thing's just getting started.

mikal(No Subject)#1508021/7/07; 01:10:33,,8211-2534224,00.html

Why Bullion is Heading For an All-Time High
John Waples - Agenda | 01/07/07
Ignore the part about the Gold Council. You'll read it
and LOL.
Oh, and they're being VERY conservative and tight-lipped. But you knew that already. ;)

LacklusterGold Council ?#1508031/7/07; 07:24:23

Mikal, from your link:


"If the Gold Council ever found a way for retail investors to gain exposure to the metal â€" other than by physically buying it â€" then the price would really fly.



mikal@Lackluster#1508041/7/07; 08:03:33

Re: "Gold Council" nonsense.
Seems to me the author intimates that gold miners
have never had a single forward sales contract and that the
(World) Gold Council should remedy that straightaway.
and along the way invent derivatives,mine shares and ETF's!
In the same sentence, he implies that the Council is the only entity capable of this feat!
I keep saying "it doesn't get any better than this",
but it DOES, LOL!

mikalInflation and gold#1508051/7/07; 08:36:50,0,3275889.story?coll=hc-headlines-business,0,3275889.story?coll=hc-headlines-business Inflation: Ford Had It Right | Andrew Leckey | The Leckey File - January 7, 2007
In this short trip back to the Ford era, gold is acknowledged as "the only" hedge against inflation.
Fittingly, though without admitting the real rate of inflation, this short column then recalls some of the past Fed chairman as it's way of warning that inflation still
preoccupies the Fed, Wall Street and many others.

mikal(No Subject)#1508061/7/07; 08:53:01 The Bond Yield Curve as an Economic Crystal Ball - SeekingAlpha - Richard Shaw - 1-07-07
Short comment on the yield curve and on Bill Gross's
latest take on same.

mikalWhat's YOUR "personal inflation"?#1508071/7/07; 09:19:50 Savings Game: Statistics don't cover 'personal inflation'
Salt Lake Tribune | Humberto Cruz | Jan 6
What's up with inflation...

Chris PowellAdrian Ash: Quantum Finance and the scramble for gold#1508081/7/07; 10:12:48

By Adrian Ash
The Market Oracle
Saturday, January 6, 2007

Only in finance do the losers get to write history. The government then prints their memoirs in the statute books, while a new volume of folly and greed is begun.

Witness Barnard's Act of 1734. It sought "to prevent the infamous practice of stock-jobbing" that had peaked and exploded with the South Sea Bubble of 1720. Investors had long since fled Change Alley, however, and gone back to trading government bonds instead.

Come 1934, and the Securities Exchange Act tried to protect US investors from the Great Crash of five years before. It guaranteed liquidity to investors who were already broke. And in 2002, Sarbannes-Oxley set new standards for US corporate accounting, stock options and boardroom ethics.

Enron and Worldcom could never happen again, not least because they had already happened. But the US government started fighting the last war regardless, banning cavalry charges and fixed bayonets as the arms race went nuclear.

By the time Ebbers and Lay were trying to raise bail, Wall Street and the City had already moved on, massing asset-backed bonds and deploying collateralized debt obligations. Production of interest-rate swaps went into over-drive, and crack squads of investment bankers began planning leveraged buy-out deals to make Iwo Jiwa look like a picnic.

Let's call it "Quantum Finance" for now, with a nod and a wink to Quantum Physics of course. No doubt the historians will come up with a better name in good time. But the financial science is just as complex as theoretical physics, based on the fact that "energy is not continuous but comes in small and discrete units," as one definition puts it. "The movement of these particles is inherently random. It is physically impossible to know both the position and the momentum of a particle at the same time...[and] the atomic world is nothing like the world we live in."

Just like today's financial markets, in other words -- a random, unknowable and unreal world of atom-sized yields.

Quantum Finance -- the science of making money appear out of nowhere -- is too complex for all but the very brightest young guns to grasp. Yet it underpins the entire financial universe today. The very fabric of money, mortgages and markets has come to rely on concepts and con-tricks not even the sales desks can follow. And Quantum Finance in its higher forms remains unregulated of course, which is just as it should be. For by the time the SEC and FSA get round to hiring the PhDs they need to make sense of the mess, the smart money will have already moved on, selling out as their Lear Jets get cleared for take-off.

What about the dumb money, you may wonder. Well, if you can't spot the patsy, then it must be you. And only two questions sit between us and the next raft of "last war" regulations today: Where will the bubble explode, and what should private investors do for a helmet?

First up, the bubble â€" or bubbles ...

"The number of [corporate] defaults will rise even in the absence of an economic downturn or interest rate increases," said Wilbur L.Ross, the 'King of Bankruptcy,' to a conference in London late last month. Chairman of W.L.Ross & Co. in New York, he says default rates will rise to around 7% of all companies in 2007. The rate is just 1% now.

"There will be some tragedies," Ross warned the conference by videolink. "When you pay higher multiples, you have less margin of error." The average leverage in European corporate deals today stands at 8.2 times EBITDA. In 2001 it was just 5.2 times.

Fitch Ratings say there's also trouble ahead in emerging markets. "With the carry trade fuelled by ample global liquidity and record financial market flows to emerging markets," it said this week, "big shifts in interest rate expectations and a further weakening of the US dollar would test those emerging markets with fragile policy credibility and large external and fiscal financing needs."

But perhaps the AAA-rated bond market will implode first. Bill Gross, head of Pimco, says we've reached a peak in making money from nowhere. Leverage on complex bond trades simply cannot get any higher, he believes, citing "a new derivative credit product retailed to institutional buyers under the sticker known as a CPDO or 'constant proportion debt obligation'."

"These multibillion-dollar instruments lever investment grade indices up to 15 times the amount invested," says Gross, "and offer or have offered a spread of 200 basis points over LIBOR with a AAA rating. Hard to pass up I suppose. ...

"But this AAA rating is subject to numerous (more numerous than usual) subjective assumptions," he goes on. "Increasing multiples of leverage beyond 15x near current yield spreads cannot maintain either a AAA rating and/or the 200 basis points in yield spread that have made this derivative so attractive. ...The increasing use of leverage, in other words, at least as applied to this particular area, appears to have run out of its magical ability to increase returns."

The problem is one of momentum. For if leveraging cannot increase, then it's apt to shrink back, rather than stick. And the most likely cause of leverage recoiling, if all previous bubbles are a guide, will come with a bang, not a whimper.

Then there's the asset-backed bond market, most especially mortgage-backed securities (MBS). This draws the heavy-gun shelling away from Manhattan and onto consumers -- first in the way their home loans are funded, and then in the investments made by their pension and insurance fund managers. It brings Quantum Finance right into your home!

The United States had $6.2 trillion in these mortgage-backed securities (MBS) at last count, nearly a quarter of the entire US bond market and 50% larger than the US government's own Treasury debt issue. Appetite amongst professional investors in Europe is so great, Sampo and ABN both flooded their MBS into the market in the very same week last year. Britain is late to the party, but it got $9.4 billion from one lender last month, plus another $15 billion from HSBC, the world's third largest bank.

And why ever not? Selling a bond backed by mortgage debt means the banks can lend that much money again, doubling their assets per dollar of deposits. In Britain alone, this little scheme helped the major banks lend nearly $1 trillion more than they took in from savers between 2002 and 2005. Money from nowhere means money for nothing, and the banks have always loved that!

But "mortgage-related debt differs from most other categories of debt," notes a 2003 paper for the US Federal Reserve, "in that it is subject to the risk of prepayment." You might think the risk of early repayment hardly worth fretting about. Not compared with, say, the risk of never getting your money back at all. But when interest rates slip, homeowners refinance. So the MBS backed by the first loan now gets repaid ... and that leaves MBS buyers holding cash instead of income.

What's a pension fund manager to do in the scramble for yield? Buy bonds, of course, preferably long-dated Treasuries ... thus pushing all bond prices higher ... sending bond yields lower ... and causing more mortgage re-fi that then repays more MBS!

"The market rallies, mortgages prepay, and all of a sudden people have to buy," says one MBS strategist. "It can turn into something that snowballs and causes the [bond] market to rally for a significant period."

The MBS market seeps into the wider financial universe via another leaky pipe too. "When mortgages, or other debt instruments, are chopped up for securitisation," explains John Dizard in the Financial Times, "the more risky slices may go to high yield mutual funds and people who think they're sophisticated investors. The 'residual risk,' 'first loss,' or 'equity' slices go either to hedge funds or are retained by the dealers or banks who package the securitisations."

These dealers and banks don't use the Treasury market to offset the prepayment risk of MBS bonds, says Dizard. They go instead to the market for interest-rate swaps, where they can exchange one stream of income for another stream of yield, tweaking their earnings without selling their assets. As of June, interest-rate swaps -- in nominal outstanding value -- were worth $65 trillion.

"It's big, invisible plumbing," says Dizard, "like water mains, of little interest most of the time until there's a gurgling and nothing comes out of the pipe."

A gulp of air glugged out of the pipe last month. On Dec.7, the day that sub-prime US mortgage lender Ownit went bust, the spread on 10-year interest-rate swaps in the dollar jumped 2.5 basis points. That might not sound like a lot, but it's five times the market's standard deviation. "A five standard deviation move in the Dow Jones Industrial Average would be a decline of 350 points," Dizard points out, "or a 40-point drop in the S&P500. That would have got your attention."

Remember, the interest-rate swaps market is worth five times the United States' annual economy. And maybe those cheap swaps between bankers -- their little-seen deals that pump credit from the mortgage market into the bond market into the profits of banks, insurance managers, and hedge funds -- are about to get pricey.

"Ownit may have been the canary in the coal mine," says one MBS fund manager. Hell, he's so worried, he's switched to buying AAA-rated debt from Fannie Mae -- which finally filed its 10k accounts for 2004 only this month -- and the other government-backed agencies in the crumbling US mortgage market.

The money's got to go somewhere, remember. Professional investors abhor cash. But "there are not enough quality assets to go round, so people are buying up the rubbish, closing their eyes to the risk and hoping that nothing will go wrong," as Anthony Hilton put it in the London Evening Standard, also on Dec.7 for some reason.

"This is the case whether they are buying 20-year bonds issued by the current Iraqi government, sub-prime mortgages on slum property in Baltimore, or a parcel of 130% mortgages issued to unemployed people in Wigan," Hilton went on. "The world's financial markets have forgotten the meaning of risk."

Not even Quantum Finance will stop the markets rediscovering risk in 2007, we guess. Cheap money could only ever get cheaper in this bubble, just as in all other bubbles. Higher rates would unwind the leverage, yet the leverage has now gone as high as it can with dollar rates at just 5.25%. And the search for yield, when it blows up, will become a scramble for settlement ... a rush into anything offering simple ownership over complexity, real value instead of gearing.

If that sounds a little like gold to you, you might be advised to pick up some more at today's firesale prices.


Adrian Ash is research director of, a correspondent for, and a contributor to MoneyWeek magazine.

Chris PowellBond market derivatives now offer profit without risk#1508091/7/07; 10:14:20

A Billion-Dollar Game

By John Dizard
Financial Times, London
Monday, October 23, 2006

Free money. Profit -- profit on billions of dollars of capital -- without risk. Too good to be true, right? Tell it to the people putting on "negative basis trades."

Over the past few months, professional managers of US dollar bond portfolios have been buying corporate bonds, then buying the credit default swaps (CDSs) that allow them to cover the default risk on the bonds. That shouldn't be profitable, but it is. Usually, the cost of complete CDS protection will be greater than the coupon on the bonds; the difference is called the "basis".

Now, though, thanks to a bizarre anomaly in the financial markets, the cost of protection using the CDS market is less than the interest yield on the bonds. So we have "negative basis". You are being paid for taking the risk of owning corporate credit, but you don't have to take the risk.

How much are you being paid? That depends on the bond. Of the 150 most frequently traded corporate names in the US bond world, about 50, or a third, have negative basis spreads available that are more than 10 basis points. There are five or ten names with more than 30 basis points. That may not sound like a lot, but on billions of dollars, it adds up.

The bond manager, can, without difficulty, buy 10 bond positions of $10 million each, buy the corresponding CDS protection, and collect $100,000 a year of risk-free money.

For a short morning's work, the trader's own cut of the profits should buy him two weeks or a month's rent on a summer house in the Hamptons, depending on whether he wants to be on the north side (less fashionable) or the south side (close to the beach) of Highway 27. And again, the credit and interest rate risk have been hedged away.

Of course, the forthcoming congressional elections are being fought over other master plans that entailed no risk.

So the more thoughtful are picking up this trade and shaking it to see what parts come out, if, for example, credit spreads widen dramatically in a more nervous environment. Mike Mutti, co-head of corporate credit strategy and managing director of Bear Stearns, says: "Such a position -- that is, buying bonds and buying CDS -- would likely perform well, since CDS typically widens much more than bonds when spreads widen."

There were two forces that created the negative basis trade opportunities. One was the demand for "synthetic" collateralised debt obligations (CDOs), comprised of portfolios of CDS contracts that could be sliced into convenient high- and low-risk components. The other was a favourable interest rate swaps curve.

As Mr. Mutti says: "Typically, negative basis trades are not very common. However, strong demand for synthetic CDOs over the summer contributed to tighter CDS spreads, while bond spreads underperformed due to higher financing and hedging costs.

"Consequently, when the bulk of investors returned from the summer, they found numerous opportunities to buy bonds and buy protection on the same name and have positive carry."

In order to eliminate the interest rate risk on the bonds, they have to have their cash flows swapped into Libor, which is done through the swaps market. David Goldman, the fixed-income strategist at Cantor Fitzgerald, says: "The interest rate swap curve has traded within a very narrow range for the last two months. By far the biggest influence on the swaps market is the yield curve and mortgage duration." These have kept swap spreads tight, which lowers the cost of the negative basis trades. "In a very volatile market," Mr Goldman adds, "you can get a flight to quality, as we did in May," which reduces the value of the negative basis trades.

There are other pitfalls. Another credit manager says: "Look at News America bonds. They're trading at a negative basis of 30 basis points, which is wide. But the dollar price of the bonds is 117.

"If the bonds were to default, the CDS you bought to hedge away their risk would only pay you par for the bonds, so you would have 17 percentage points of potential loss against only 30 basis points of gain. But there are people who say the chance of default is low, so they will take that risk."

Another driver of the negative basis trades is the prospect of leveraged buyouts. In the event of a buyout, the CDS will widen out on the risk imposed by the higher leverage in the company.

So the bond trader would profit on that leg of the position. But because corporate bonds often have restrictive covenants in them, the LBO sponsors will buy them back, frequently at a premium to the previous market price. The trader would profit on that leg as well.

This game is going on thanks to the excess liquidity in the world, which is still there even after the central banks have supposedly "tightened" their policies. Chris Whalen of Institutional Risk Analysics says: "It's kind of sad. People are running out of ways to deploy their capital intelligently, so they turn to this kind of financial masturbation, trying to get their performance far enough inside the herd so they don't have to deal with redemptions."

Chris PowellDigital gold and a flawed world economic order#1508101/7/07; 10:30:48

By Benn Steil
Financial Times, London
Friday, January 5, 2007

It is remarkable how the world's short history of floating exchange rates has affected popular thinking about what is eternally normal and proper in the economic system. Recently, China-bashing U.S. Sens. Charles Schumer and Lindsey Graham wrote matter-of-factly that "one of the fundamental tenets of free trade is that currencies should float."

Such a "tenet" would have been considered monstrous by most of the economics profession up until the last three decades of the 20th century, prior to which money accepted across borders had generally been gold, or claims on gold, for about 2,500 years. Even John Maynard Keynes, the arch-slayer of the last remnants of commodity money, was an adamant supporter of fixed exchange rates.

Floating exchange rates have proved a source of tremendous periodic instability, yielding repeated currency crises in countries whose currencies are not acceptable for international transactions but which build up imbalances in their national balance sheets through their imports of dollar capital.

The fundamental difference between capital flows under indelibly fixed and flexible exchange rates was well known generations ago, decades before the modern era of globalisation. As Friedrich Hayek noted in a 1937 lecture, under fixed rates "the effect of short-term capital movements will be on the whole to reduce the amplitude of the actual fluctuations. ... If exchanges, however, are variable, the capital movements will tend to work in the same direction as the original cause and thereby to intensify it."

This logic was mirrored precisely by the radical change in capital flow behaviour that accompanied the crumbling of a credible international monetary anchor, gold, between the first and second world wars.

Monetary nationalists, who believe it natural that every country should have its own paper currency and not waste resources hoarding gold or hard-currency reserves, must eventually demand capital controls -- as the most noted economist critic of globalisation, Joseph Stiglitz, has done -- in order to stop the people from disturbing the government's control of national credit conditions. But the government cannot stop there, Hayek reasoned, as "exchange control designed to prevent effectively the outflow of capital would really have to involve a complete control of foreign trade, since of course any variation in the terms of credit on exports or imports means an international capital movement."

Indeed, this is precisely the path the Argentine government has been following since abandoning its dollar currency board in 2002. Since writing off $80 billion worth, or 75 percent in nominal terms, of its debts, the government has been resorting to ever-more intrusive means in order to counteract the ability of its citizens to protect what remains of their savings and to buy from or sell to foreigners.

In 2003 the Argentine government introduced capital and domestic price controls, the aim being to keep the exchange rate down while containing the inflation that policy was giving rise to. In 2004 energy sector controls were extended to include export taxes and partial export bans on oil and gas. In 2005 rules were imposed forcing companies to convert most foreign proceeds into pesos and limiting the amount of foreign currency that individuals could acquire to invest abroad. In 2006, in an effort to stop the rise of inflation beyond 1 percent per month, President Nestor Kirchner demanded "voluntary" price freezes on about 300 products, targeting component products of the official consumer price index, and extended export bans to beef and other products.

Argentina could not be a more fitting fulfilment of Hayek's fears that the spread of monetary nationalism could lead only to ever greater international economic and political conflict. Since the 2002 devaluation the Argentine government has been in continuous conflict with its European counterparts over the expropriations imposed on the latter's bondholders and corporate direct investors, and the population has turned viscerally anti-American, anti-International Monetary Fund, and anti-globalisation.

It was well understood before the Bretton Woods era that monetary nationalism would fundamentally change the way capital flows naturally operate, making of a benign economic force one that would necessarily wreak havoc with flexible exchange rates. The global monetary order that has emerged since the 1970s is now globalisation's greatest source of vulnerability.

What is to be done? Realistically, sauve qui peut must be the message for nations whose currencies are not wanted by foreigners. Dollarisation -- abandonment of parochial currencies in favour of the dollar, euro, or other internationally accepted money -- is, in a world of fiat currencies, currencies unsupported by gold or silver, the only way to globalise safely.

Of course, the status of internationally accepted money is not heaven-bestowed and there is no way effectively to insure against the unwinding of "global imbalances" should China, with nearly $1,000 billion (£509 billion) of reserves, and other reserve-rich central banks come to fear the unbearable lightness of their fiat holdings. Digitised commodity money may then be in store for us. Gold banks already exist that allow clients to make and receive digital gold payments -- a form of electronic money, backed by gold in storage -- around the globe. The business has grown significantly in recent years, in tandem with the dollar's decline.

As radical and implausible as it may sound, digitising the earth's 2,500-year experiment with commodity money may ultimately prove far more sustainable than our recent 35-year experiment with monetary sovereignty.


The writer is director of international economics at the Council on Foreign Relations and co-author of "Financial Statecraft."

Thoreauly@ Chris Powell re digital gold#1508111/7/07; 11:06:41

"Technological advances in electronic banking and commerce threaten to all
but replace the existing system of paper currency. They ultimately will revolutionize the manner in which monetary exchange transactions are conducted by individuals and financial institutions. And, consequently, they will enhance privatization at the expense of governmental financial and tax systems." (see link)

Hence the fight to the death that monetary nationalists will wage to stop digital gold in its tracks, this being but one of the battle lines being drawn to see whether Time's Person of the Year will establish a New World Order or the Old Order will prevail.

Guess who my money's on and what form it's in.

Chris PowellBolivia reported ready to raise mining taxes 600%#1508121/7/07; 12:12:24

Bolivia reported ready to increase mining taxes 600%

From Reuters
Sunday, January 7, 2007

LA PAZ, Bolivia -- Bolivia plans to raise the taxes paid by mining companies six-fold in a shake-up of the industry set to be announced in the coming weeks, a newspaper reported on Sunday, citing the country's mining minister.

Mining Minister Guillermo Dalence was quoted as telling the daily La Razon that the leftist government of President Evo Morales had received $45 million in tax revenue on mining exports of $1 billion in 2006.

"That's a ludicrous amount taking into account that these are not renewable resources. If in 2007 we were to export $1 billion worth of minerals again, the state should receive at least $300 million," Dalence was quoted as saying.

That would represent an increase of more than 600 percent on the mining industry tax take he described for 2006.

"That should be the aim of the new taxing system," he added, according to the report.

The tax increase is part of a new mining policy Dalence is due to announce before the end of January, La Razon said.

Morales nationalized Bolivia's energy industry in May 2006, and officials have repeatedly said they wanted to reform the mining industry and were considering tax rises.

In late October Morales appeared to back away from a similar nationalization for the dilapidated mining sector, postponing major reforms until 2007 due to a lack of funds.

The government has organized several workshops and seminars in January so officials from state-owned mining company COMIBOL, representatives of mining cooperatives, and experts can take part in shaping the new mining policy.

The plan aims to revitalize COMIBOL and modernize Bolivia's dilapidated mining industry, which has significant deposits of tin, zinc, wolfram, lead, silver, and gold.

Late last year Dalence said the reforms would not include expropriations and would not constitute a nationalization.

U.S.-based mining companies Apex Silver Mines Ltd. and Coeur d'Alene Mines Corp. are expected to start production in two multimillion-dollar mining projects in the poor South American country this year.

mikal@Thoreauly#1508131/7/07; 13:06:51

Ditto. My money's where yours is at.
Several of us commented on that story on the 4th and 5th- myself, TC, Flatliner.

Thoreauly@ Mikal#1508141/7/07; 13:26:47

No wonder it looked familiar!

Anyway, Rahn's piece seemed appropriate in response to it, as it seems perfectly logical for gold to merge with advanced technology to return to its rightful place in the scheme of things.

As for Fekete on "Forbidden Knowledge," it's worth noting that for all his defense of gold, he doesn't believe in a 100% gold standard and keeps pushing the Real Bills Doctrine instead. I emailed him to express my concerns and will post his reply if I receive one.

USAGOLD / Centennial Precious Metals, Inc.Three doorways, one safe and beautiful world of gold...#1508151/7/07; 14:14:28

shop for gold coins
mikalDollar "slip" may trigger cascading defaults#1508161/7/07; 14:54:43

This is another article in favor of the "strong dollar policy" IMO. There's no mention of inflation and the dollar's overvalued status as world reserve currency and commodities denominaire. No mention of the true nature of the US economy. Instead of a sound dollar, fragility is suggested such that propping by competitive currency devaluations could not suffice to slow it's descent and that of the world economy.
Now every means possible is in place to unnaturally
paint the chart and stabilize it. That is, they may need a strong dollar until it becomes clear the dollar is exhausted and/or the Fed cannot raise, lower or maintain rates in the next few months or so before summer, and in the face of slowing foreign demand and mounting derivatives pressure, housing, equities, consumption and debt imbalances etc.

The Dollar Could Slip Some More | Washington Post | CURRENCY
Sunday, January 7, 2007; Page F04

The dollar fell more than 11 percent last year compared with the euro and rose slightly against the yen. A lower dollar helps boost U.S. exports, by making them relatively cheaper in overseas markets, and attracts more foreign tourists to the United States.
Many economists think the dollar will slip a bit lower this year for the same reasons it slid last year: the huge U.S. trade deficit, slower U.S. economic growth and robust growth abroad. Many analysts think the Federal Reserve will cut interest rates by midyear, while other governments are raising borrowing costs, which tends to diminish the demand for dollars.
Other analysts, however, forecast that the dollar will stabilize this year. They generally bet that the Fed will hold interest rates steady because of moderate U.S. economic growth as economies overseas lose momentum. The Blue Chip consensus also predicts that the U.S. trade deficit will shrink slightly, as Americans import less and export more.
Also, one major prop under the dollar has not shifted significantly. The Chinese government, and many others, are running big trade surpluses with the United States and plowing their profits into U.S. investments, such as Treasury securities, stocks and other assets. That keeps demand for the dollar solid.

Chris PowellHedging hangs in the balance#1508171/7/07; 16:29:23,21985,21023721-664,00.html

By Mandi Zonneveldt
Herald-Sun, Melbourne, Australia
Monday, January 8, 2007

Market master Warren Buffett famously said: "A group of lemmings looks like a pack of individualists compared with Wall Street when it gets a concept in its teeth." The same anecdote has been used to describe the Australian resource industry's approach to hedging -- a risk minimisation strategy.

Although they remain relatively healthy, metal prices fell sharply last week and the promise of blue sky has darkened. But hedging is still a dirty word.

Companies not fully exposed to the upside of the resources boom are being called to task over their hedging policies and many have rushed to reduce their hedge books.

Three quarters of gold mining companies with price protection in place reduced their forward sales, options and other hedge positions in the September quarter, according to The Hedge Book, compiled by Virtual Metals and Halliburton Mineral Services.

Sean Russo, director of Sydney-based risk advisory and funds management firm Noah's Rule, said the trend was not surprising.

"When the markets are going up, companies are almost embarrassed by their hedging," he said.

"It's like hemlines. The fashion is to be unhedged."

Hedging is a form of insurance used to manage the risk of fluctuating currencies and commodity prices.

In its most basic guise, hedging involves selling something that hasn't yet been produced, at a fixed price, for delivery on an agreed date.

However, Australian resource producers have been instrumental in developing some of the more complex price protection mechanisms.

As well as forward sales, there are put options, call options, deferred contracts, collars, caps, floors and swaps, making hedging a mind-boggling maze that can confuse even the most sophisticated investor.

Jim Pollock, a long-time practitioner with the Financial Services Institute of Australasia and statistician for consultants Surbiton Associates, said hedging was a complex subject that very few people understood.

"I bet if you went to the board of a large or even medium-sized gold producer and said can you individually explain to me how to calculate the mark-to-market value of your hedge book, I'd be very surprised if many of them could do it," he said.

"I think in many areas it's a dirty word, but I also wonder whether those who regard it as a dirty word really understand what it's all about."

The trend against hedging has been most noticeable among gold producers.

The hedge impact of the global book -- the measure used by The Hedge Book -- has fallen from 52.6 million ounces to 41 million ounces in the past nine months. At the same time, the gold price has doubled.

Australian producer Newcrest announced in November that it had deferred the sale of 1.6 million ounces of gold into set-price contracts, giving it more exposure to the soaring spot price.

Smaller miners, including Kingsgate Consolidated and Lihir Gold, have also made inroads.

Newcrest chief executive Ian Smith said recently people bought shares in gold companies to gain as much exposure as possible to the gold price.

"I don't think, as a normal part of business, you want to be playing the role of pre-supposing ... that you can play the position on gold better than the average investor," he said.

There is no doubt soaring commodities prices have turned the tide against hedging, but Mr Russo said companies were also under pressure from large institutional shareholders who were playing the metals markets themselves.

"We're really seeing a fashion where the big investors are putting pressure on companies to be totally unhedged, which is not in the interest, necessarily, of all stakeholders," he said.

"The big hedge fund managers and the big investors, they have the financial sophistication to be able to hedge the metal prices separately," he said.

"Some of the stakeholders, the mum and dad investors, can't go out and hedge their exposure to the zinc price if they want to hang on to Zinifex for a takeover premium."

Hedging has also received a bad rap in recent years due to the spectacular crashes it has been associated with.

Pasminco's $3 billion collapse in 2001 was the result of a failed currency hedging strategy that left the company hundreds of millions of dollars out of the money. It's successor, Zinifex, does not hedge commodity prices.

Sons of Gwalia came undone in 2004 because it sold more gold than it could produce and gold miner Croesus called in administrators earlier this year after difficulties meeting its hedging commitments.

But Mr Russo argues that hedging is often the innocent victim when companies collapse.

Those companies "were speculating, they weren't hedging," he said.

"It's easy to blame the hedging ... but at the end of the day there's very few companies that have actually failed from doing sensible hedging."

Mr Pollock agrees. He takes exception to suggestions from some corners that hedging is akin to gambling.

"It is considered good business practice for companies to insure their plant against damage and calamity. They insure stocks of raw materials that they've got at a mine site. They even insure the lives of their senior executives," he said.

"I think for shareholders and institutions to say ... it's bad to insure against a fall in the price of the commodity you're producing is just illogical."

Meanwhile, unhedged producers are crowing from the rafters.

Zinifex's billion dollar-plus profit was largely the result of its unhedged exposure to the sky-rocketing zinc price and Oxiana has not been shy about the benefits that being unhedged have bestowed on its bottom line.

Even the world's largest miner BHP Billiton is singing its own praises.

Asked this year to reflect on the key decisions that had led to the company's success, BHP chief Chip Goodyear said emphatically: "Stop hedging."

melda laure"Fair Trade" dollars are coming.#1508181/7/07; 17:16:02

The first two machines have been installed, one in a slum area close to Mumbai's financial centre. It is hoped that some of the 700 million low-income Indians (out of a population of over 1 billion) who don't have bank accounts at present will be encouraged to establish a relationship with the bank rather than keeping their meagre savings under their beds. Citigroup also plans to "target the poor in big emerging market countries such as Brazil and Indonesia."

Schemes are even being developed to bring banking services to illiterate farmers in remote areas via biometric cards and portable devices in an effort to circumvent the lack of electricity in these regions.

It appears that some of the world's most sophisticated financial institutions see an opportunity where they can tap a new market while at the same time claiming they will help the underprivileged, illiterate poor in these developing countries by giving them an opportunity to improve their lot in life… and that this will be done by teaching them how to go into debt before teaching them how to read or write.

Sometimes you can hear the gods laughing... I read the sunday bulletin and find that someone has decided to serve "fair trade" coffee on the patio for some deluded moral reason that can only be described as clueless. I wonder now if the Castle will be selling "fair trade" gold? What, I must be delusional! Who could afford it?! Well, maybe if they paid us in "fair trade" dollars.

If citibank is serious, then the gig is up: there's no one left worth looting. Better stock up on unfair-trade gold while you still can.

slingshotGreat Day to be a Goldbug#1508191/7/07; 18:13:35

As always I want to thank those Ladies and Knights of the Table Round for all their contributions to the Forum. To USAGOLD for Hanging Tough by working through the disruptions instead of closing down the site. I find hat my time here is about 5 years and is but a vapor in this story of gold, contributing so little while gaining so much. Why so long? If I may be so bold to say that I am looking for the truth in this feces sandwich the Bankers and Governments are trying to feed us. Yet my fellow Knights and Ladies, there has been little change in my circles in reguard to Gold. I would have thought by now with gold rising from $254 and a 20% average gain per year there would be Gang Busters for Gold. Another point with USAGOLD having 10,000 passes to this site,why do we have just afew steady posters. I am a small time investor (STINT) and I'm still here! I am waiting for Another and Friend of Another to enter the Castle and be seated at the " Oaken Table of Yore".

Hail, Gandalf the White (GOLD). Seahawks had TUNA last night.
Lady Waverider, Hope you are O.K.
Sir Belgian, Yes I seen your post. Good to hear from you.

Gold Bugs, Lurkers, Lend me your posts.
I do not come to bury Gold, But to make it Shine!

slingshotShed some light#1508201/7/07; 18:41:42

Just Observations.

Dollar 84.63
Gold 608.5
Silver 12.15

Gold Eagles- Did not check price
Silver Eagles A wopping $18.00 still at coin shop. 2006
Silver Dollar 90% $14.75 common dates

What is the price of 2007 tube (20) silver Eagles in your area?

MineroSlingshot----where are they?#1508211/7/07; 18:43:02

Why are there so few steady posters? A very good question!
My guess is that of the 10,000 hits that this site received, about 9,990 were lemmings in search of a hot tip that they could use to extract a dollar from a derivitive market. I have completly stopped speaking about gold to anyone. Just the mention of PM ownership puts most people on the offensive or defensive. Normal citizens just don't own gold! It is that simple.

slingshotMinero#1508221/7/07; 18:57:56

Don't Give Up! I too have been looked at with slanted eyes, but if you really care for you friends , continue just pointing out news on the network. I'm the DOOM and GLOOMER of all ages. Tell them this. I want you to look at your retirement. Me ( Slingshot Retired). I want you to join me as soon as possible. I have good friends. Minero, I just have a HS education but always been able to tell when somebody is B.Sing me. A small gift yet a good one.

slingshotMinero#1508231/7/07; 19:08:18

I was just thinking.
Does education mean more in the acquistion of gold or is it more tradition (India example). Or as the world sees it and not Bankers.

MKSlingshot. . .#1508241/7/07; 19:12:28

I vote tradition because gold represents tradition.
slingshotTradition#1508251/7/07; 19:18:49

If tradition is the driving force then why have the bankers control of setting Spot and not the people who transact with the metal in physical form?
Truly a turn away from a fiat system.

Can of Worms?

slingshotSir M.K.#1508261/7/07; 19:30:56

There is something (reaction) in holding a gold or silver coin, in contrast to alloy coins. This tradition/ reaction is in countries considered third world. While the most educated deal with fiat and digital accounting.
Something to be said of the third world.

Gandalf the WhiteYES, Sir Slingshot --- HERE is to a GOLDEN 2007 !!!#1508271/7/07; 19:32:45

The Seahawks had TUNA (ha ha) Saturday Night, and is now on the hot STOVE ! Did you see that NEW BALL used especially for THAT snap ? MAGIC !!!<;-)
I too hope that the old posters will often return to visit us all at THE OAKEN TABLEROUND to continue the golden tale.


slingshotMagic#1508281/7/07; 19:41:08

Got to have it!

slingshotGold Represents Tradition#1508291/7/07; 19:48:28

Ponder that for a moment. Gold repesents tradition. We all give our loved ones gold rings , bracelets and so forth but of 10k and 14k. How much of a jump is it to 22k 24k.
Tradition or how much can they afford. We are taking US and Not India or China.

slingshotTake off the Gloves#1508301/7/07; 20:00:46

This Christmas the only jewelry shop in town that had 18k/24k jewelry was a Vietnamese shop. Then went to the Mall to see 10k /14k gold. No 18k for it cost tooo much.
Makes you wonder.

slingshotTime Zone#1508311/7/07; 20:26:23

HEY! Is the rest of the World Asleep or am I in a Dead Zone?

slingshotO.K. Just for Giggles#1508321/7/07; 21:26:47

You know just about everyone here visits other castles but I have to tell you that the one I enjoy the most is the Mogambo Guru. Have to hand it to him in his usage of acronyms. Yet he has a way of getting you thinking. His style of writting has an symbionic relationship in his military jargon with me but I know he has a wonderful family to the contrary of his off color remarks. If he is truly "The Angriest Man in Economics", Then I am not far behind him.

melda laure10kt gold is really 14kt copper.#1508331/7/07; 21:32:07

It reminds me of "Kona Blend". What's next I wonder, 8kt? (I think I've actually seen that somewhere- the horror!).

Of course there's always zero-kt fiat which you can get at any local bank. Someday it will all fade like a bad dream.

slingshotAm I just a Freak?#1508341/7/07; 21:52:26

I have to admit I stumbled upon this site long ago. Was accepted for what I am, and the rest is History. If even 10,000 were even to look at this site, what is that in comparison to the total population of the world. What has that to say for the imminent explosion of the gold price. I'm saying to myself that the bankers have no idea or at least denying, what will happen when the repudiation of paper money comes to fruition. If I know this would it be that the only thing that holds this self gratification, materialistic world together is the ability to afford it. Or at least finance it.

GoldiloxLonely Posts#1508351/7/07; 22:03:59

@ Slingshot,

You're not alone, although it may feel like it. The other day I watched 13 hours go by with no Forum posts.

slingshotGoldilox#1508361/7/07; 22:07:02

Just hang on I'm Just Getting started. ;0)
Feel free to comment.

slingshotGold#1508371/7/07; 22:15:29

Now I never thought gold would obtain a height and stay there. One must use it to their advantage. Let me tell you. I FIRMLY believe I will get 20 acres at a cost well below the current ridiculous price. Out in nowhere where I belong. To you Knights and Ladies is to pick your dream. Make it affordable. Something you will enjoy without the intrusions of stupid people. And make it defendable for there will be many who will try to take it away from you and your family.

melda laurePass the 409, the crystal ball is foggy.#1508381/7/07; 22:32:35

You remember the blackout of 2003?...

Think we'll see it happen again? I think we will. Over the past five years, we've had several significant blackouts. Those are portents and signs, reader. We'll have more.

Why? Because America and Canada have neglected their power grids.... The North American grid is the largest in the world. Much of it was built in the first half of the 20th century. Despite its age, from 1975-1998, investment in North America's power grid declined every year.

That's a 23-year stretch of declining investment in maintenance and upgrades.

I always have second thoughts. Why is the oil inventory so low? Why no new refineries? Presumably because there isn't the spare supply and because there isn't the resource base to justify the equipment on a long term basis.


What if the other consideration is that the US is headed for a 20 year recession? Looking at the next article on the list by J. Little, (on uranium) what if there isn't any great build out of conventional nuke reactors on the horizon? What if, (like a good mining company looking at limited reserves) the "developers" have decided to conserve their resources rather than try to produce them faster?

Already the US has had an enormous credit expansion with hardly any real capital expansion domestically. China is booming, china is consuming. The US is tapped out.

If Edison knew that the 20 year future involved distributed power generation, vacume driven motor generators and so on, why invest in an expensive nuke plant stateside? At the least, nobody is going to invest into the teeth of the Mother of All Recessions.

I was rather floored by Feteke's point that DTCC cleared 1,000 trillion in derivatives trade last year on a 40T world economy (I would have thought it was closer to 1o,ooo by now.) Does this high figure imply over-exhuberance? Or does it imply the "desparation" of the bankers as you (slingshot) suggest?

Using improper terminology to put it quantitatively: the world economy is 4 basis points worth of DTCC's trade (and I'm sure that doesn't include all the european ticket houses).

Surely the future of POG is upwards by several orders of magnitude, (and that is in flaflation-adjusted dollars)

GoldiloxTerminator III#1508391/7/07; 22:36:10

Watched T3 last night, after renting "V for Vendetta" last week. While the premise of both movies is a bit simplistic, it's interesting to see what the directors and special effects guys come up with to describe apocalypse and/or major rebellion.

This seems to be a growing theme in "entertainment" that reminds me of the '60s with "Tommy" and "Blows Against the Empire" by the original Jefferson Starship.

I think that about the time the US electorate wakesup and realizes that their mandate in the mid-term elections is being ignored in Washington, there will be a lot more "unrest" than we've seen in a generation or two.

While that doesn't necessarily mean "total" collapse, there may very well be some major market disruptions.

I'm not so sure which I'd call the "chicken" and which I'd call the "egg".

slingshotThoughts, Melda Laure#1508401/7/07; 22:47:03

Thank you for your reference to me. It only goes to prove to all that lurk have something to express but are afraid to do so. That is to say, all that is expressed is valuable but every once in awhile a true Gold nugget is exposed taking this forum to new heights of information.

slingshotTommy#1508411/7/07; 22:57:04

How do you think he does it?
I don't know.
What makes him so good?


melda laureWhen the pigs have been fattened it's time for "market"#1508421/7/07; 23:02:55

. "A service sector can only exist so long as
. it is supported by a vibrant manufacturing
. sector. ..."

In reference to Schiff's concerns noted above, it is not the decline in manufacturing jobs that bothers me. Not at all. That is natural, expected and highly efficient and progressive. Where I continue to have concern is of course with the "bloated service sector" and the consumer economy that continues to float ever higher on an ill wind of helium

Put another way,

40Trillion world economy growing at... say 3%/year.
1000T derivatives growing at 20%

Soon the VOLATILITY on this inverted pyramid will exceed the real economy.

Soon, the INDIVIDUAL TRADES will exceed the real economy.

Look also at the ratio of Derivatives volume versus US trade deficit. Think of this as a containment "bias voltage". We are fast approaching the "hard saturation" region where the servo motor has no more to give no matter how hard the controls are jammed.

Fast approaching.... really fast...
Really sooon.... eventually.... sooner or later.... or later... "I call all times soon" (roar)

Use well the days as you enjoy the extended gold harvest. Alas, sir Slingshot, the things I desire cannot be purchased with money, neither green nor yellow.

White HillsGold Jewelry#1508431/7/07; 23:03:26

Sir Slingshot, your post that mentioned 22Kt and 24 KT jewelry hit a hot spot with me. This year I have taken to making gold jewelry which I call investment jewelry and emergency jewelry. I make what they call Spanish Chain. Each link of the chain is approximately 1gram of gold wire or 1 gram of sterling silver wire. A 31 link chain is about 1oz. You can wear it as a necklace or bracelet or incorporated in a belt or other article of clothing.The chain is made so that you can take one or more links from the chain as needed in any kind of transaction. In the old days when money was needed a link was taken from the chain to buy what you needed. There was no paper money in those days so carrying any kind of money with you created a problem. The Spanish Chain solved many of these problems because it was easy to carry and conceal or keep safe. It is what I call get out of town money. The gold wire can be in 14, 18, 22 and 24 kt depending on your pocket book. One thing is that it probabily would never be confiscated because it would be Jewelry not coins or bullion. White Hills
slingshotMelda Laure#1508441/7/07; 23:08:31

To Thyne ownself be true.

GoldiloxUnbridled "growth"#1508451/7/07; 23:17:36

@ melda laure,

"Look also at the ratio of Derivatives volume versus US trade deficit. Think of this as a containment "bias voltage". We are fast approaching the "hard saturation" region where the servo motor has no more to give no matter how hard the controls are jammed."

A better description of the mechanism of hyperinflation, I have never seen. One need only look at the curves of government, coporate, and personal debt growth to cement the image in one's mind.

From a medical perspective, one might call derivative growth cancerous, as like a tumor, it massively outgrows the host body until it interferes with life support functions and causes death.

slingshotSpanish chain, White Hills#1508461/7/07; 23:21:04

What a wonderful way of doing monetary tranactions. Let me say I enjoy your commentary.

TopazFavourite Gold Coin.#1508471/7/07; 23:23:21

The simple act of toying with a gold coin in the hand is enough to make you realise just WHY Gold is squirrelled away in Dungeons.
IT'S DANGEROUS! ...It (they) really DO have a presence and impart a wonderful feeling of ??? well,, hard to describe!.
My fav is a 1980 50FF Hercules.
Roughly 2" round, 3/16 thick and weighing 3ozt +or-.

I'd thought recently how much "premium" I'd be lookin at to part with this monster (2xSpot, 5xSpot?)on ebay ...and concluded that, no matter WHAT the bid, I'd end up defaulting on the sale.

It's just like that!

Link to Wanta latest for those interested.

GoldiloxSpanish Chain#1508481/7/07; 23:23:42

@ White Hills,

What a clever idea. I wonder how far back it goes? Sounds like it may transend the collapse of more than one economy/empire.

31g per ounce . . . about 20 of today's dollars per link in 24 karat weight. What a coincidence that it reflects the "fixed" value of gold in the pre-FED world.

melda laure1001 uses for wire#1508491/7/07; 23:25:32

I have a small quantity of that size wire for colloidal gold production. (of course it is 24kt).

After a couple of days in the reaction chamber the wire turns red as though it were an enameled copper magnet wire.
(hint: use ozonated de-ionized water)

"once in awhile a true Gold nugget is exposed"

From you Sir Slinghshot, that is high praise, as I would have rated it at best a 6kt (which only proves that nuggets are still worthwhile with 75% dross)

GoldiloxFavorite Coin#1508501/7/07; 23:27:51

@ Topaz,

My favorite is the 2 oz. ROO! Big enough that I can enjoy the engraving even with these tired old eyes.

Haven't held a Panda in my hand though. I'm sure it would be a delight!

slingshotMelda Laure, Volatility#1508511/7/07; 23:27:58

Let the Games begin!

Flipin gold down to $605
Silver to $12.12
Has anything change?

The BULL will not shake me off. Grab it by the horns!

GoldiloxLet the Games begin, indeed!#1508521/7/07; 23:33:07

My favorite view from the peanut gallery - tick by tick!
Black BladeGoldilox - Film#1508531/7/07; 23:34:08

I think you would appreciate "Children of Men" just out in theatres. Interesting film if you liked the two you mentioned. It portrays a bleak-grim picture of the future.

- Black Blade

GoldiloxFilms#1508541/7/07; 23:43:41

@ BB,

Thanks. I will check it out. By the way, for older releases, the public library is much more reasonably priced than the commercial rentals!

I got a new 27" LCD-TV over the holidays that doubles as a computer monitor. The prices finally fell below the one ounce level, so I treated myself.

As a result, I am catching up on my movie viewing, especially 16 x 9 wide aspect ratio releases.

My laptop makes a great DVD source.

slingshotMelda laure#1508551/7/07; 23:48:04

Lord have Mercy.
I want to expose some dangers. especially with silver.
not to mention gold. Both metals have their beneficial properties but if exceeded can be toxic! Silver I believe is about 5 ppm. I do not have the solution equiuvalent for gold. The parameters are different for external use. (skin)
I am very uneducated in external absorbsion.
Take care.

slingshotSir Black Blade#1508561/7/07; 23:52:24

Hail, Sir Knight.
Please be seated at the "Table Round"


Black BladeSlingshot#1508571/7/07; 23:57:07

I should be back in more often, however, I have been busy with field and office work. I expect to gave the work load lighten up after this month.


- Black Blade

Black BladeTypo#1508581/7/07; 23:59:01

That should be "have the workload lighten up". ;-0
GOLD FINGERTime tell's the story on gold....#1508591/8/07; 00:11:28

Happy Day to everyone,

Gold may find a bumpy road on occasion and fall. However, the gains are real from year to year. The path is up ward and steady. I feel safe here. Like on a cold, cold night my shinny gold and silver coins radiate from my treasure chest.

I know where they are at. Here with me. I know their value will continue to grow.

Why perhaps as the uncommon becomes more common? Because the markets are always unstable and to put it bluntly, I do not trust the banks and I will put my faith in gold. I am converting all liquid assets to gold this year and pulling all my assist from paper. Why? The past speaks to me.

The stock market is way over valued. The rush to buy...for what to make the stock brokers richer...they are the one's who ultimately get filthy rich from everyone investing...not the small investor. GOLD offers hope....

Buy some today while it is on the will not be for long!


slingshotSir Black Blade#1508601/8/07; 00:12:38

It is always a pleasure to read your post as they are most informative. Yet the job takes precedence and you have been foremost in the warnings in the energy field and to the impact upon financial markets. provide for you own and we at this forum will be grateful for what you can dispence.

KnallgoldFrom the worldreports link#1508611/8/07; 00:18:31

"J. Edgar Hoover: 'The individual is handicapped coming face to face with a conspiracy so monstrous, he cannot believe it exists'. [As with the Holocaust]. "

The Holocaust a conspiracy???Its the same crap like Skolnick.

melda laureI belive the technical term is "malignant"#1508621/8/07; 00:25:51

@ Sir 'Lox
"one might call derivative growth cancerous"

The financial corpse is now 2500% tumor. Or perhaps it is more of a virtual tumor- a neurosis perhaps?

Perhaps the castle can hand out snippits of silver wire as promo's instead of silver eagles (they're getting much too expensive now I'd imagine). Colloidal gold, yes a bit dangerous for the ignorant.

Children of men? 'Atanatarion'; sounds too much like Morgoth who lusted after the eldar, and corrupted them into the foul race of (well, let's leave it at that, no discourse on Enoch etc.)

But to go back to your earlier question sir Slingshot, the question of tradition or education is perhaps better posed as a matter of mere perspective: "Eustace had read only the wrong sorts of books, long on imports and exports, but rather short on dragons." Or to quote one of CS Lewis later works, "Studdock's education had been neither scientific nor classical, but merely modern."

It is a curious species of ignorance is it not? And this hall a most curious kind of university. It hardly matters if it is knowledge or wisdom, ignorance or folly that moves us to act. And do not discount instinct and other sub-conscious factors and premonitions. Seeds do not bloom in the winter.

May the bull not shake thee, nor the gold bear disturb your sleep!

slingshotmelda laure#1508631/8/07; 00:38:55

Damn! I have to think this over but I will repond.

slingshotmelda laure#1508641/8/07; 00:45:34

Your whole post is fantastic except for one word. Perspective. That my friend can be a multitude of sins.

slingshotNot to leave anybody out#1508651/8/07; 00:55:39

Knallgold. What about the Holocaust?

slingshotWorld#1508661/8/07; 01:12:13

farthest point from Jacksonville fl. USA Eastern standard time.

968Experts Suggest the CIA, Not Kim Jong-il, is Counterfeiting Dollars#1508671/8/07; 01:23:29

"The American secret service, the CIA, could be responsible for manufacturing the nearly-perfect counterfeit 50 and 100-dollar-notes that Washington pins on the terror regime of North Korea. The charge comes after an extensive investigation in Europe and Asia by the Sunday edition of the Frankfurter Allgemeinen Sonntagszeitung of Frankfurt, and after interviews with counterfeit money experts and leading representatives of the high-security publishing industry."

"The sources, which do not wish to be identified, allege that the CIA prints the falsified "Supernotes" at a secret facility near Washington to fund covert operations without Congressional oversight."

slingshotPaper money#1508681/8/07; 01:38:06

In my area there are Fake Dollar/ Five/10 and 100 dollar bills. My neighbor had a $100 note issued to him at THE BANK.

968Complete German version of the counterfeiting #1508691/8/07; 01:39:04

See link ^^^^^^
slingshot968#1508701/8/07; 01:45:34

Das es Good. No spekeze duetsh

slingshot968#1508711/8/07; 01:57:38

Is there an english version?

slingshotlast post for the night#1508721/8/07; 02:34:06

We at this forum have conversed with those around the globe only to speak in english. I asked that those other than english give us a few words in their language. foremost;
Thank you.
How are You?
Well 968. English is not the only langage in the world.

Knallgoldslingshot#1508731/8/07; 05:08:23

The site calls the Holocaust a conspiracy-that makes the site highly questionable.

There used to be Another site,Skolnick,which has the same neverending and confuse conspiracy BS,everything was written to the last detail to sound truthful.In fact,it was just plain disinformation.

I suggest we skip this site,just more of the "Paulson arrested" scam.

Better read the story posted by 968,the FAZ is a credible paper.I think a famous article surrounding BuBa Gold sales way back was also in the Frankfurter Allgemeien Zeitung.

968@ Slingshot#1508741/8/07; 05:24:44

Sorry Slingshot, I don't find an English version of it...
Paper Avalanche@ Gold Finger#1508751/8/07; 06:15:27

This morning's post was a little bit over the top, even for you.

But that's your job.


KnallgoldInteresting post on the ECB "Gold refining" story#1508761/8/07; 08:21:10

(kcamyar) Jan 08, 09:38

Hmmmm,that raises more questions than it answers.

1)Who said that an ECB Bank had bought gold,the daily telegraph I presume.But what was their source of information?

2)Who supplied the information that it was a paper transaction,and merely the refining of gold coins?.

3)Why were the gold coins refined?.A 1 oz gold coin is 1 oz of gold,and is valued at 1 oz of gold.Why incurr the cost of refining when it can simply be counted as 1 oz of gold,and transferred from "other" to "Gold held"

4)For this to be significant we must be talking about a large amount of gold.How much? 1 tonne-32,000 coins,
5 tonnes=160,000 coins,hardly significant in terms of an ECB Bank holding (although a large No of coins).
So really to catch the eye you would need to be in the order of 25 to 50 tonnes (800,000 to 1,600,000 coins)

5)And of course for this to be valid you would need to see a corresponding reduction in the book value of "other" assets

This has all the hallmarks of a damage limitation exercise.

HenriKnallgold...#1508771/8/07; 09:00:05

Hmmm... I seem to recall something about the germans being approached to facilitate a "Swap" ...perhaps it was a stash of coin...but these are NOT 0.999 pure usually 22k for wear resistance. I think only .999 bars are tradable on an exchange and suitable for logging into "reserve status"
I may be wrong but there may be something to this. It means the cb's are running out...

TownCrierHenri#1508781/8/07; 09:24:37

You suggested, "I think only .999 bars are tradable on an exchange and suitable for logging into "reserve status"..."

But, let's not so quickly forget that the U.S. has made reserve use of its tonnage of .900 fineness 'coin melt' bars resulting from the 1933 recall and melting of the nation's gold coinage.

Also, just to cover the bases, LGD bars can have a fineness starting at .995 to be suitable for trade/exchange.

Hope this helps.

BTW, I actually wrote a rather long piece on this whole European refinement affair. Unfortunately, it's not directly suitable for posting at the forum.


KnallgoldHenri#1508791/8/07; 09:31:29

I wouldn't have read much into it if POG didn't got smashed 20$ on the same day of the announcement.
Survivor@White Hills#1508801/8/07; 09:50:22

White Hills wrote: "This year I have taken to making gold jewelry which I call investment jewelry and emergency jewelry. I make what they call Spanish Chain. Each link of the chain is approximately 1 gram of gold wire or 1 gram of sterling silver wire. A 31 link chain is about 1oz."

I suggested this on the forum a year or two ago. Now you are making the exact item that I imagined. We do have a great group around this table.

Craft on. . .

- S

PS: This is a type of gold jewelery CPM/USA should make available.

TownCrierKnallgold -- the coincidental price-smashing#1508821/8/07; 10:57:18

The professional market players probably assumed something like the following:

"Hey, if the European banks are refining their old hoards of coins into bars of Good Delivery status, then, obviously, they're preparing to throw every last ounce into the market."


Subsequently, the "professionals" apparently sold a bit more of their paper on this premise of newfound and forthcoming liquidity -- thus suppressing the market price, however unjustified the premise may actually be.

I will go so far (in muted agreement) as to say liquidity is AN issue here, but it certainly isn't THE issue. There are much deeper currents at work here.

My commentary goes into more depth on the various angles involved, but the bottom line to the typical, private gold owner is that this operation, and any subsequent repetitions should give cause for expectations that the pre-1933 coin market remains well-supported (with rising premiums over spot) as the available supply is thus reduced through destruction -- amounting to 3.5 tonnes of history in this particular event.


FlatlinerNow Oil flow#1508831/8/07; 11:24:39

Not getting Ruble? Didn't someone say something about gold and oil flow once a long time ago?
White HillsSpanish chain#1508841/8/07; 11:52:41

Goldilox, Slingshot Survivor, A little more info on the
Spanish chain. It is also called the Money Chain and the Loop-in-Loop. In one form or another it was found in ancient cultures such as Egyptian, Hellenistic, Etruscan, Roman and Chinese plus many others. The fact that so many cultures used this method of payment and savings and Americans literaly know nothing about it is the sign of the times and fiat currency. Just for fun here is the site that will show you how really easy they are to make. -- White Hills

Flatliner@Spanish chain.#1508851/8/07; 12:10:34

How do you clasp this chain? This idea might come in handy if we're put into a situation where we have to draw our own 18 gage wire. Then again, if we get to that point, we may find that a will be pretty valuable. In any case, real gold can take many different forms and still represent wealth.
mikalNippon returns tonight from voyage#1508861/8/07; 12:21:42

UPDATE 3-Gold Regains Strength; Physicals Lend Support
Mon Jan 8, 2007 1:29am ET By Lewa Pardomuan
SINGAPORE, Jan 8 (Reuters) - Snippitus:
"Purchases from jewellers and investors lifted the price of gold on Monday, but dealers said trade was cautious after the metal tumbled more than 2 percent in New York on fund selling.
Japanese investors were out of action due to a public holiday.
Spot gold <XAU=> hit a low of $606.20 an ounce before rebounding to hit an intraday high of $609.30 an ounce. It was quoted at $608.75/609.50 an ounce by 0622 GMT.
Gold was last quoted at $606.70/607.70 in New York on Friday, when the metal fell to its lowest level in more than two months at $601.70 after the dollar surged on a surprisingly strong U.S. jobs report.
Friday's fall was gold's biggest one-day percentage drop in three months.
"There's a little bit of buying because of the lower price. On the whole, there is some interest in Asia," said Leon Lee, a dealing officer at the Bank of China in Hong Kong."
[Ahoy there Royterz! Gold tis getting "SOME INTEREST"
in Asia, yea? Methinks ye ought to remember it's always been thus!
Har! Batten down the hatches...]

White HillsFlatliner#1508871/8/07; 12:33:17

Many different clasps are available and are easy to put on or take off, a matter of bending the part of the clasp that connects to the chain. Clasps can be goldfilled, gold plated, 14 Kt, 18, 22 or 24. Prices are as low as 2 or 3 dollars. The beauty of the Spanish Chain is that you could start with a necklace and end up with a bracelet or watch bob.From one to another ending up with the last link. A interesting part of history for get out of town money would also be gold foil which was used by many refugees after the Vietnam war. They wrapped the gold foil around there waists and legs and left town. I remember in California people were upset because they thought the government was loaning the refugees money to start a business. In reality much of the capital they used came with them in the form of Gold Foil. White Hills
mikal@White Hills#1508881/8/07; 12:44:04

Congratulations on your hobby/art.
You pieces remind that physical simplicity helps avoid
misunderstanding in certain circumstances:
Monday, January 08, 2007 -
Staff Reports - Free-Market News Network - Excerpts:

"China is looking forward to hosting the 2008 Summer Olympics, but knows there is much work to be done before then in preparation for the influx of foreign visitors. According to a Cox News Service story, a major part of that process is cleaning up the "Chinglish" terminology currently in place around the country's capitol city, Beijing.
The piece notes the presence of such mistranslations and typos as "Racist Park," the fish-based delicacy "Crap in the Grass" or the Starbucks delicacy "Christmas Bland" coffee...

As part of the campaign, some 48,000 taxi drivers will be getting crash courses on common English phrases, restaurant menus and public signage will be edited and standardized, and misread idioms will be monitored and corrected, to avoid such current faux pas efforts as "The Slippery Are Very Crafty" (a wet-floor warning in a shopping center) and "Deformed Man Toilet" (a wheelchair-accessible stall in a restroom). - ST"

mikalSome fear new "inflation calculator" will raise awareness...and wages!#1508891/8/07; 12:51:17

Inflation is Worse Than Reported | Staff reports | 01-08
Short take on recent reports from England's the Telegraph and Independent.

Chris PowellThank Goldman Sachs, not weather, for oil price plunge#1508901/8/07; 13:30:42

Investment House
Slashed Energy
in Commodity Index

By Michael Norman
New York Post
Monday, January 8, 2007

It might be a better idea to thank Goldman Sachs, not the weather, for the recent plunge in oil prices.

While recent balmy temperatures have certainly played a role in last week's dip in oil prices, a lesser known but equally powerful move by Goldman at the start of the year might bear some responsibility as well.

Goldman cut the energy portion by as much as 50 percent in some of the sub-indexes that comprise the widely followed Goldman Sachs Commodity Index, tamping down moves to buy them by large investment funds that mimic Goldman's index.

The changes took effect this month and apply for all of 2007, a Goldman spokesman said.

Crude oil futures plunged 9 percent Wednesday and Thursday to $55 a barrel, before settling Friday at $56.31. The two-day decline was the sharpest since December 2004.

The GSCI is influential because large institutional investors like pension funds and endowments invest according to its allocation model.

"If Goldman's model tells them to cut their energy exposure by half, they do it," says Warren Mosler, president and chief investment strategist of Valence Corp., a multi-billion-dollar hedge fund.

Mosler said cutting crude allocations by more than half will help to reduce inventories in the medium term and once those surplus inventories are liquidated prices will begin to rise again.

Last August, Goldman reconfigured its index by removing a Nymex unleaded gasoline contract that was being phased out.

The move triggered a huge selloff in gasoline almost immediately.

Prices eventually stabilized when a new contract was added, but the change produced huge losses at many hedge funds.

mikalBonds, bubbles and bankruptcies vs serenity of gold#1508911/8/07; 13:39:37

The Bear's Lair, by Martin Hutchinson | B stands for Bubble – and for Bankruptcy! | January 8, 2007 | Martin Hutchinson is the author of "Great Conservatives" (Academica Press, 2005) -- details can be found on the Web site -- Snippits:

"The Wall Street Journal Thursday reported that no less than 71% of companies with Standard and Poor's credit ratings had junk-quality ratings – BB and below—in 2006, up from 32% in 1980. An astounding 42% of companies with credit ratings were rated single B, the lowest possible credit rating that isn't vulnerable to immediate default. Only 7% of rated companies were single B in 1980. So does B stand for Bankruptcy – or just for harmless, profitable Bubble?"
Hutchinson's expertise focuses on junk bonds with a
precision and intensity. He shows how just this aspect of the hyper-leveraged, debt-fueled economy alone can bring down the house and admits he expects as much.
If not, one can clearly see how today, a number of other
bubbles, financial and geopolitical risks and uncertainties
ranging from a possible influenza pandemic to an asassination, would have similar effects(and because
all investments are interrelated, a vast, unknown degree
of reforms will no doubt ensue over many years).
"As the junk bond market exploded in the 1980s, it was expected to lead to an enormous number of defaults, which would in turn lead to a retreat from the market and a rebalancing of credit appetite by investors. In 1990-91 and again in 2000-01 there were a lot of defaults (the latter concentrated primarily in telecoms) but not the level that had been anticipated. There were two reasons for this...

I'm not sure how you work an international economic system which rewards the most dishonest and spendthrift while penalizing those who play by the rules. Probably you can't, and so following a mass emerging market debt default international trade will go into a period of autarky similar to the 1930s.
We can send a gunboat to Buenos Aires or Guyaquil (though not Quito) but how do you get a gunboat to Moscow?"

mikalGold, oil seen higher#1508921/8/07; 13:58:56

Global Markets Face `Severe Correction,' Faber Says (Update4) | Last Updated: January 8, 2007 10:58 EST
By Ian C. Sayson and Pimm Fox

Jan. 8 (Bloomberg) --Snippits:
"Marc Faber, who predicted the U.S. stock market crash in 1987, said global assets are poised for a ``severe correction'' and it's time to sell. ``In the next few months, we could get a severe correction in all asset markets,'' Faber said in an interview with Bloomberg Television in New York. ``In a selling panic you should buy, but in the buying mania that we have now the wisest course of action is to liquidate.'' Faber, founder and managing director of Hong Kong-based Marc Faber Ltd., advised investors to buy gold in 2001, which has since more than doubled. His company manages about $300 million in assets."
Mikal-- Not too much we here haven't seen, but a good,
basic round of suggestions and cautions for the general public and fund managers who should know better.

"Gold, Oil

Faber said gold should rally further on expectations that supply of the precious metal will decline and demand for it will increase to hedge against inflation. Gold climbed 23 percent last year, its sixth year of gains. ``The price of gold will continue to go up and probably very substantially,'' Faber said. ``In the long run, it's very clear that central banks are basically increasing the supply of money and the supply of gold is obviously very limited.''
Oil prices are also tipped to rise as political instability in the Middle East and other petroleum-producing areas threatens supply and global demand increases. Crude oil in New York added less than 0.1 percent to $61.05 a barrel in 2006, after tripling in the previous four years. ``Everyday the world is burning more oil than new reserves are added,'' Faber said. ``You wont see $12 dollars again'' for every barrel of oil. ``The trend is likely more to be upside because demand in Asia is going to double over time.''"

Mikal-- I wouldn't recommend oil investments, but gold
to help protect against the costs energy takes out of your pocket.

Chris PowellThailand won't lift capital controls#1508931/8/07; 14:18:07

From The Associated Press
Monday, January 8, 2007

Thailand has no immediate plans to lift remaining capital controls imposed last month to curb the baht's appreciation, the central bank governor said Monday amid growing calls from foreign brokers to ease the restrictions.

Bank Gov. Tarisa Watanagase told reporters that the bank was considering revisions of "minor" measures but that the baht's relative stability since controls were imposed Dec. 19 shows that the much-criticized move was effective and necessary for the time being.

Thai shares plunged nearly 15 percent Dec. 19 after the central bank announced regulations restricting foreign capital inflows to stem the baht's surge, which was hurting exporters. Authorities quickly lifted the controls on foreign stock investments but retained those on bonds and other debt instruments, prompting the benchmark stock index to bounce back 11 percent the next day.

The controls require banks to lock up 30 percent of new foreign-currency deposits intended to buy bonds and to impose penalties on those held for less than a year. The bank governor has said the rules are expected to stay in place at least three to six months.

"We are not considering revoking or easing the 30 percent withholding," Tarisa told reporters, adding that the central bank "may soon decide to give up some minor unnecessary measures."

Separately, the Federation of Thai Capital Market Organizations, or Fetco, said it will urge authorities to ease or entirely remove the 30-percent rule.

The measure makes it difficult for Thai companies to raise capital because it discourages foreign investment, Fetco Chairman Kongkiat Opaswongkarn told reporters after a meeting with 10 foreign brokers.

Marco Sucharitkul, president of JPMorgan Securities (Thailand), said foreign investors viewed the 30 percent withholding requirement as an obstacle to entering Thai markets, and they hope the central bank will cancel the measure.

Tarisa said that capital flows have been limited since the withholding rule was introduced, resulting in more stability for the baht. She said the baht is starting to move back in line with regional currencies after surging 14 percent against the dollar last year.

The U.S. dollar ended trading Monday in Bangkok at 35.92 baht, little changed from 35.97 Friday. Last month, the dollar hit a nine-year low of 35.09 baht.

The Stock Exchange of Thailand index increased 0.9 percent Monday, closing at 633.82 points, on rumors that the Bank of Thailand would ease the withholding requirement.

mikal(No Subject)#1508941/8/07; 14:33:59

ECB, Fed may have to hike rates again: IMF's Rato
Reuters - Business News - Jan 8, 2007 5:31am ET - "MADRID (Reuters) - The European Central Bank and the U.S. Federal Reserve may have to raise interest rates once more to keep inflation in check, International Monetary Fund Managing Director Rodrigo Rato was quoted on Monday as saying.
"It is possible they should introduce new increases to keep inflation in line with objectives but this will have to be done after evaluating the pace of the economy," he told Spanish newspaper La Razon.
He added some risks existed for the U.S. economy if the deceleration of the housing market started to have a greater impact on spending by U.S. consumers."
Mikal-- Gold supportive statements- automatic, so expedient and unimaginative from the IMF and the central and money center(commercial) banks' policy politburos. They still pay lip service to certain monetary policies and thoeries out of habit, as
the object of their failed affection(and devotion) lies in state. Time will reveal new companions.

MatthewDigital gold and a flawed global order#1508951/8/07; 14:43:56

From the fringe to the FT!
Clink!From Mikal's link in #150889#1508961/8/07; 15:19:46

An interesting exercise in Doublethink. Let's see if I have this straight (I can't hope to imitate the Mogambo, but just imagine that there are flecks of spittle beginning to fly from the corners of my mouth). The British Government have been screwing around with the CPI so blatantly that not only has it been noticed by the consumer (who, after all is a pretty fair judge of the real CONSUMER Price Index), but the officials are so embarrassed themselves that they feel the need to put out another (hedonically adjusted ?) figure. One can only assume that the adjustment, coming from people already admitting that they are cooking the books, does not reflect the full reality either - anyone who is asking to be trusted has got to be suspect. And now economists and officials are concerned that there might be demands for wage increases (which, after all, are driven by the inflation perceived by the workers) based on this new calculation. And the original CPI was invented for what purpose, hmmm ?

USAGOLD Daily Market ReportPage Update!#1508971/8/07; 16:08:42">
The Daily Gold Market Report has been updated.

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

MONDAY Market Excerpts

January 8 (Reuters) -- U.S. gold futures finished higher in choppy trade on Monday, rebounding from a two-month low in the previous session, as oil moderated its decline and the dollar fell.

Analysts expected robust physical demand and dip-buying to extend support to the market and hold prices above $600 an ounce.

The benchmark February contract on the COMEX metals trading division of the New York Mercantile Exchange settled up $2.50 at $609.40, traded in a tight range between $605.0 and $611.10 an ounce.

James Steel, analyst at HSBC, said that gold climbed in an "extremely volatile" session, because oil had pared its losses and the dollar had reversed its earlier gains to trade lower by early afternoon.

"We've seen fairly good physical buying throughout the weekend," said Steel. "I think we are going to see a lot of support over $600 an ounce."

The dollar fell from six-week peaks against major European currencies as profit taking set in the following last week's rally on the back of robust U.S. employment data.

"On Friday, we saw very heavy physical demand in the face of fund liquidation. Today, we have seen continuation of some physical demand," said Andy Montano at bullion dealer ScotiaMocatta.

"But certainly there has been nothing to drive the market one way or the other. So we have remained fairly quiet trading conditions," he said.

Montano said he expected gold to take cues from economic indicators due later this week, including U.S. trade deficit on Wednesday, weekly initial jobless claims as well as interest-rate decisions by the European Central Bank and Bank of England on Thursday.

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

ThoreaulyA delightful exchange going on . . .#1508981/8/07; 16:16:41

. . . over at between "Glaucus" and "Arthur" (see link and click on Talk Back), as the latter is presumably none other than Arthur Laffer of "The Laffer Curve" fame and a regular guest on CNBC's Kudlow and Company. He and Peter Schiff ocassionally get to square off there, so note the reference to Schiff's latest piece "More Consumption Less Production" (and the Talk Back there as well).
TownCrierGold to get greater glitter (and greater weight for the price) in January 2008#1508991/8/07; 16:38:39

(excerpts, New De) -- The decision to make hallmarking mandatory has been taken by Union Consumer Affairs Ministry after a survey by Bureau of Indian Standards (BIS) found that a large number of unscrupulous traders took consumers for a rough ride.

"Hallmarking of gold jewellery would be made mandatory next year. Initiatives are being undertaken to protect consumers and boost gold trade," Y S Bhave, Secretary in the Ministry of Consumer Affairs told Deccan Herald.

A market survey of non-hallmarked jewellery conducted in 2006 across 16 cities found 90 per cent of the samples below prescribed standards of purity.

Rampant trading of poor quality of jewellery burns the pockets of Indian consumers by Rs 6000 crore annually.

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

The Indian consumer has been paying fair, "full-bodied" prices to accumulate gold (a trend that shall continue) but have been notoriously shortchanged insofar as they have been receiving "weak-bodied" alloys of metal in return for their purchase price.

Two points:

1) This program of hallmarking should marginally increase the consumer's confidence, and thus perhaps give rise to greater participation/purchases by consumers. And,

2) This program will help ensure that the full amount of metal being paid for is actually delivered to the customer.

Both points, either independently or in conjunction with each other, should ultimately help INCREASE the total tonnage of gold offtake in India.In other words, this is a program that works in OPPOSITE effect to that of paper gold.


PaddingtonReason for recent oil & gold pounding (IMO)#1509001/8/07; 16:45:56

Goldman Sachs robbed the price of oil & gold recently to provide cover for the newspaper article "Israel plans nuclear strike"

The US responded with the phrase "Ill informed". Does this mean that the ill man (ITO) in Iran has now been informed ?

Those who think they can rule the world with double speak and word play should not forget that the more languages you can speak the better. Lekker is maar een finger lang !

........ meanwhile George can hardly string an english sentence together so he has to use his hands:

Shouldered and Armed

FlatlinerSilver Trust (SLV)#1509011/8/07; 17:55:20

Added another 29 tonnes overnight.
RAP968 re. 150874#1509021/8/07; 18:51:50

This is the google translation
MKLooking for a reason. . .#1509031/8/07; 18:58:12,,2-2537540,00.html

For gold's surge in the aftermarket:

The Times
January 09, 2007

Russians turn off Europe's oil supply

Europe's oil supplies from Russia were being held to ransom last night as the Kremlin fell into bitter dispute with a former Soviet satellite state.

Moscow abruptly halted millions of barrels of oil destined for the EU via Belarus in an increasingly hostile wrangle with its neighbour.

Chris PowellChavez socializes Venezuela, shuts opposition TV, promises 'permanent revolution'#1509041/8/07; 19:34:52

Chavez Will Nationalize Power, Telecoms

By Ian James
Associated Press
Monday, January 8, 2006

President Hugo Chavez announced plans Monday to nationalize Venezuela's electrical and telecommunications companies, pledging to create a socialist state in a bold move with echoes of Fidel Castro's revolution in Cuba.

Chavez, who will be sworn in Wednesday to a third term that runs until 2013, also said he wanted a constitutional amendment to eliminate the autonomy of the Central Bank and would soon ask the National Assembly, solidly controlled by his allies, to give him greater powers to legislate by presidential decree.

"We're moving toward a socialist republic of Venezuela, and that requires a deep reform of our national constitution," Chavez said in a televised address after swearing in his new Cabinet. "We're heading toward socialism, and nothing and no one can prevent it."

Before Chavez was re-elected by a wide margin last month, he promised to take a more radical turn toward socialism. His critics have voiced concern that he would use his sweeping victory to consolidate more power in his own hands.

Cuba, one of Chavez's closest allies in the region, nationalized major industries shortly after Castro came to power in 1959. Bolivia's Evo Morales, another Chavez ally, moved to nationalize key sectors after taking office last year.

"The nation should recover its ownership of strategic sectors," Chavez said. "All of that which was privatized, let it be nationalized," he added, referring to "all of those sectors in an area so important and strategic for all of us as is electricity."

The nationalization appeared likely to affect Electricidad de Caracas, owned by Arlington, Virginia-based AES Corp., and C.A. Nacional Telefonos de Venezuela, known as CANTV, the country's largest publicly traded company.

Chavez said lucrative oil projects in the Orinoco River basin involving foreign oil companies should be under national ownership. He did not spell out whether that meant a complete nationalization, but said any vestiges of private control over the energy sector should be undone.

"I'm referring to how international companies have control and power over all those processes of improving the heavy crudes of the Orinoco belt -- no -- that should become the property of the nation," Chavez said.

Chavez did not appear to rule out all private investment in the oil sector. Since last year, his government has sought to form state-controlled "mixed companies" with British Petroleum PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., Total SA, and Statoil ASA to upgrade heavy crude in the Orinoco. Such joint ventures have already been formed in other parts of the country.

The United States remains the top buyer of Venezuelan oil, which provides Chavez with billions of dollars for social programs aimed at helping Venezuela's poor as well as aid for countries around the region.

Chavez threatened last August to nationalize CANTV, a Caracas-based former state firm that was privatized in 1991, unless it fully complied with a court ruling and adjusted its pension payments to current minimum-wage levels, which have been repeatedly increased by his government.

CANTV is the dominant provider of fixed-line telephone service in Venezuela, and also has large shares of the mobile phone and Internet markets.

Electricidad de Caracas is the largest private electricity firm in Venezuela. U.S.-based AES, a global power company that today has businesses in 26 countries, bought a majority stake of Electricidad de Caracas in a hostile takeover in 2000.

After Chavez's announcement, American Depositary Receipts of CANTV -- the only Venezuelan company traded on the New York Stock Exchange -- immediately plunged 14.2 percent to $16.84 before the NYSE halted trading. An NYSE spokesman said it was not known when trading might resume.

Investors with sizable holdings in CANTV's ADRs include some well-known names on Wall Street, including Deutsche Bank Securities Inc., UBS Securities LLC and Morgan Stanley & Co. But the biggest shareholder, according to Thomson Financial, appears to be Brandes Investment Partners LP, an investment advisory company in California. Also holding a noteworthy stake is Julius Baer Investment Management LLC, a Swiss investment manager.

CANTV said it was aware of Chavez's remarks but added in a statement: "No government representatives have communicated with the company, and the company has no other information."

Chavez cited the communist ideals of Karl Marx and Vladimir Lenin at other points in his speech.

"I'm very much of (Leon) Trotsky's line — the permanent revolution," he said.

In the fiery address, the president also used a vulgar word roughly meaning "idiot" to refer to Organization of American States Secretary-General Jose Miguel Insulza. He lashed out at Insulza for questioning his government's decision not to renew the license of an opposition-aligned TV station.

Golden LionheartLanguage#1509051/8/07; 20:11:07

Here is some Greek for you:-
How are you.........Ti kanis
Please...............Para kalo
Yes......Nai or Malista
Good Moning......Kali mera
Give me a kiss.....Dosemai ena fili
A greeting...........Gia sou (yassu)
Hope that helps.

Gold at $613.20 here in Australia at this moment.

Golden LionheartSorry............#1509061/8/07; 20:13:01

My post should have been addressed to Slingshot.
FlatlinerOil, gas and metals#1509071/8/07; 20:53:22

"Starting from January 1, Norilsk Nickel, the single largest exporter of palladium in the world, is unable to obtain the government export quotas it requires to ship abroad platinum, palladium, or rhodium. The only source of Russian palladium that may reach the market for the time being is the metal which the state stockpile agency Gokhran has been holding for years now in a bank vault in Zurich."

Flatliner – At the end of the year, we saw the new energy giant force concisions in the gas market. Referenced below, we see that they are now playing the oil market. Now, we see that there is something going on in the metals market. Why would they not allow exports in the PGMs?

The mystery depends, or it could be business as usual. Maybe.

FlatlinerDefine: "Immaterial gold"#1509081/8/07; 21:11:49

Flatliner – I wonder how long it will take before "Immaterial Gold" shows up in the Wikipedia?

I wonder if there is any symbolism in the picture posted with this article?

Today is very puzzling. Tomorrow, probably even more so.

FlatlinerWeirdest thing#1509091/8/07; 21:19:43

No matter how many times I tried, every time I tied to post the paragraph that contained "Immaterial gold" from the previous link, it was rejected. Is there a rule somewhere that I overlooked? Or, could this be a technical glitch? Overall, just weird.
Flatliner@ Looking for a reason#1509101/8/07; 21:34:48

U.S. airstrike targets al-Qaida in Somalia

MK, I too, went looking for a reason for the jump after the market's closed today and found the breaking news of a new air strike. I put 2 & 2 together that more war would mean higher gold prices. But, maybe not.

mikal@Flatliner- "The mystery deepens"#1509111/8/07; 22:36:48

U.S. said expected to sanction Iranian bank - Yahoo! News - Reuters | 01/09/06
The profits from funding both side of any escalation are donated by the sheeple everywhere. Iran's "ruler"
is always under the thumb of the banking/intelligence establishment IMO.

mikalFlatliner- Not enough bloodshed?#1509121/8/07; 22:51:40

Video apparently showingHussein wounds emerges -
The media here seems to have discovered how
old wounds can be used to open old wounds.
Less "news" than sensationalist, lurid, exploitative provocation.

mikal(No Subject)#1509131/8/07; 23:29:17

Hedge Fund Borrowing Examined by Fed, SEC, European Regulators - Bloomberg - 010907
mikalRe: last post#1509141/8/07; 23:35:47

Some topics- LTCM, over the counter derivatives,
excessive loans to hedge funds and inadequate margins
The quote by the Fed's Geithner
at the very end is where the whole message becomes clear-
"We did what we could but we knew nothing for the most part. Have a good day."

GOLD FINGERWhat would Zen say?#1509151/9/07; 00:27:12

Flip the channel's another golden day!!

Not so long ago I made a point to learn about a way of life that many practice in the Far East. You see I was always fascinated with a country that has over one billion people and that is not overtly capitalistic in nature...well, it might be now, however, they are a remarkably well behaved people and seem to know more about the universal ways than most.

I have heard that one of the world's richest people lives in Asia and deals in paper cardboards and container products.

They also seem to live longer and get along better in cramped places. Perhaps this article has more to it than meets the eye. I was rather shocked to see MSN place it in the main stream news. Fascinating!


By Reuters
Forget fund flows and profit predictions -- 2007 is about "fire sitting on water." Buy oil, avoid metals, and don't get your fingers burned.

Feng shui experts steeped in the ancient Chinese knowledge of geomancy, or natural energies, see a turbulent year ahead for the markets and for mankind.

"The elements -- they are in conflict," said Raymond Lo, a practitioner for more than 10 years, whose office close to Hong Kong's Victoria Harbor is considered a repository of positive feng shui energies in the Asian hotbed of capitalism.

"Because it's fire and water, and they're not in harmony. So therefore next year in January, it's not so peaceful."

Lo expects a stock-market boom in the first half of the year, with Hong Kong's Hang Seng index likely to soar over 20,000 points, creating an "illusion of optimism" before a steep drop. The Hong Kong market is up 30% this year and, along with other Asian exchanges, has struck record highs in 2006.

Hard information on the accuracy of feng shui forecasts and their performance against analysts' predictions is hard to come by, but Hong Kongers devour books by the city's celebrity feng shui masters.

"I believe in it a lot," says retail investor Monica Tam, who reckons that in auspicious periods she can buy stocks "with her eyes closed" and still make money. "Before I didn't, but with each year's experience and by seeing feng shui masters, I changed my mind." ........ more in URL

TownCrierFlatliner -- weirdest thing...#1509161/9/07; 00:29:09

"... every time I tied to post the paragraph that contained "Immaterial gold" from the previous link, it was rejected."

On two occasions over the past two days I've also encountered an opening sentenence or paragraph that was utterly "toxic" to the posting routine.

And it looks like mikal may have had a similar experience first thing yesterday morning.

I'm at a loss to explain it, other than some weird "hidden character" or newfangled ascii code that is copy and pasteable from another source but isn't recognized by our posting routine and thus causes a hangup in the "submit message" process.

It's a mystery. Buy gold. Be happy.


TopazBehind the curtain stuff ...Adrian Ash.#1509171/9/07; 02:30:19

via Jesse tks.
Thoreauly@ Flatliner & TC re weirdest thing#1509181/9/07; 06:22:11

I've had trouble posting as well, just for the record.
slingshotGolden Lionheart#1509191/9/07; 08:12:54


Now to memorise them. Then pass them on to my friends.


Flatliner@weirdest thing#1509201/9/07; 10:03:06

Ok, let's try again after cutting & pasting in a slightly different way - from viewing the source information at the link. Yes, There is html in the middle of the text, but I have removed that for this attempt.


That is just bazaar! Knowing that there are no 'special' characters in this posting at the time of submission, it must be translated somewhere along the way.

Good advice to not worry. I think I'll refocus with the idea of aligning my spiritual center under the glow of a golden sunshine yellow. A couple Maples should serve well for inspiration.

no worry... be happy... clink clink...
no worry... be happy... clink clink...

FlatlinerBelarussian gold#1509211/9/07; 10:14:23

"MINSK. Jan 9 (Interfax) - Belarussian gold and foreign-exchange reserves grew 6.7% or by $86.4 million in 2006 to $1.383 billion, the Statistics & Analysis Ministry told Interfax.

The reserves grew 0.9% in December and 7.1% in November.

Deposits with nonresidents fell 3.5% to $1.067 billion in the year, however, monetary gold deposited in foreign banks increased by 65.5% to the equivalent of $314.4 million. Other reserves totaled $1.3 million.

Gold and forex reserves calculated according to the national definition rose 9.6% or by $154.3 million in 2006 to $1.753 billion. They grew 0.6% in December and 3.5% in November."

Flatliner – "monetary gold deposited in foreign banks increased by 65.5%" Are they saying that they sold gold here? Or that they simply moved the gold that they normally hold in their own bank into foreign banks because they like the fact that the gold is out of their control and in someone else's? Seems like a ‘weird’ statement to make. At the same time, looks like it's denominated in dollars. There is still some dollar support out there.

Federal_ReservesIncredible how much POWER Goldman Sachs has...#1509221/9/07; 11:21:27

they made a few adjustment to the weightings of crude oil in their commodity indexes and all the funds that track it were "FORCED" into sell mode and that tanked the crude oil price. All of this was done without forewarning or without explanation. This re-weighting impacts the dynamics of the whole economy, knowing of course that a slide in crude oil may help consumers but hurt profits of energy producers and suppliers to the energy producers. GS runs the Treasury as if it was a division of their company, and manipulates markets for its own good. I think it is time for a government investigation.
USAGOLD / Centennial Precious Metals, Inc.Proven Reliability, Longevity, Quality and Professionalism ---- Invest with Confidence!!#1509231/9/07; 11:30:55

mikal@Flatliner#1509241/9/07; 11:53:54

That IS "a weird statement to make" by Belorussia. Did a quick rough calculation of how much gold that would be.
6 to 7 tons.
Maybe their people own more than that. Per capita, many Asian countries have such impressive reserves.
But South Koreans gave much of it to their government a few years back.

GoldiloxGovernment "investigation" of GS#1509251/9/07; 11:54:19

@ Federal_Reserves,

A goobermint investigation? You mean it's time for the fox to take inventory in the hen house?

While we're at it, let's have CONgress investigate their own members' corruption and reform the lucrative lobbyist system that they line up to participate in upon losing re-election.

In the immortal words of the Mogambo, HAHAHAHAHA!

Or as an old girlfriend used to chide me, "Oh, that's going to happen!"

Flatliner@mikal#1509261/9/07; 12:21:09

Maybe, gold and ‘oil’ are not flowing the same direction. I wonder if Russia is now holding that gold for them? But, that would just be a wild guess. Maybe they've swapped their physical for something that will get delivered later?

When I see reports like this, it makes me wonder if those that visit this forum hold more gold than many central banks. One would expect that ‘he who holds the gold makes the rules’ is something that should play out. It may not be long before those that hold physical ‘organize’ using the net in order to make their demands heard.

Could you imagine such a move? I wonder how that might be pulled off? … Hum, should political and possibly the fuel for a great headache.

TownCrierRE: Flatliner's msg#: 150909#1509271/9/07; 13:41:19

VietNamNet Bridge -- The Vietnam Gold Business Association (GBA) predicts that the demand for bar gold will increase, and the gold price will rise continuously in 2007.


First the intro. More (maybe(?)) to follow...


TownCrierMore on Vietnam gold market in 2007#1509281/9/07; 13:44:37

(more excerpts) -- The demand for bar gold increased in 2006 as a result of the increased gold price in the international and domestic markets, which has prompted people to speculate and hoard money in gold.

In 2001, the gold price was at $300/oz only, while it hit $640/oz in 2006.

In 2003, the world produced 2,500 tonnes of gold, while it was 2,000 tonnes only in 2006.

Meanwhile, the greenback, the hard foreign currency which people like saving, lost its value by 12% against the euro in 2006, and 6-10% against other foreign currencies.

People have shifted to save gold instead of dollars. A lot of nations have also decided to increase their reserves in gold.


The troubleshooting experiment continues...


TownCrierGold savings/reserves in 2007...#1509291/9/07; 13:57:35

(more excerpts) -- Russia, for example, has decided to raise the gold reserve from 5% to 10%.

Meanwhile, the higher crude oil price has led to higher US$ reserve funds of the countries in the Middle East, which has prompted the countries to buy gold for saving.

According to Tran Quoc Quynh, Senior Advisor to GBA, the forecasts about the gold market all said that the world's prices will continuously increase in 2007.

The gold price may hit the $700/oz level, as the gold output will not increase, while the demand for gold for reserve is increasing from China and Japan.

China's reserve in gold just accounts for 2% of the total foreign currency reserves, while the Japan's figure is just 1%.

Once the world's gold price increases, it will lead to the price increases in the domestic market and the high demand for bar gold. It is estimated that in 2007, Vietnam will need some 60 tonnes of gold, 60% of which are bar gold.


So far, so good. With gold, every would-be saver in the world -- regardless of their particular domestic paper currency -- has a solid avenue to achieve secure and reliable savings.

It's been said many times by a few of us quiet ones, and someday will be understood by the louder and less-studied gold advocates:

"The shrill cries for 'sound money' is an utter waste of time and energy (given the political realities), especially when the alternative of 'sound SAVINGS' is far more important to your financial well-being and which is already readily attainable through physical gold ownership."


Next, to attempt the toublesome paragraph...


TownCrierIn India they call this scheme "dematerialized gold" (or "demat" for short)#1509301/9/07; 14:38:23

[Conclusion of experiment. The cut and paste of the paragraph in question was not recognized as a valid block of text -- meaning, it wasn't accepted or processed by the forum posting rountine. Nor was a hand typed version of it! Weird.]

Here is the paragraph in paraphrased form:

################## - begin
Mr Bang said that the high proportion use of gold bars wasn't good for the national economy because, according to him, it constrained the mobilization of "idle capital among the public". He said it also created risk for speculators. [Apparently he is choosing to forget about the higher participation of speculators involved not in the physical market but rather in the derivative market -- but then again, maybe that's the group of speculators that he's trying to protect!!!]

He continues on to say that Vietnam ought to draw people to trade "immaterial gold" (i.e., trading gold on account), and to do so, the Gov't ought to formulate the enabling legal framework to pave the way for trading gold on account.
################# - end

"Immaterial gold (trading on account)" is a well-tested scheme by which VERY small-minded agents would have the citizenry at large abandon the safety of tangible "sound savings" and instead would have them convert their solid foundation of wealth into an inflatable papery form (immaterial gold account) which itself would be no better, and basically no different, than the assortment of international papery currencies from which they are all trying to insulate themselves to provide for future well-being.

The foundation and stability of civil society rests on the backs and shoulders of these toiling masses. And yet, there remains a collection of these few small-minded greedy meddlers who would foist upon them all a cancerous system that routinely knocks the legs out from under them. If there ever was a cause worth fighting for, education about and prevention of these various "immaterial gold" schemes certainly ranks large among them.


TownCrierFull paragraph, final word abbreiviated#1509391/9/07; 15:03:29

According to Mr Bang, the high proportion of bar gold is not good to the national economy as this would constrain the mobilizing of idle capital among the public, and create high risks for speculators.

Vietnam should take actions to draw people to trade immaterial gold (trading gold on account). In order to reach that end, the Government should lay down the legal framework to pave the way for trading gold on acct.

mikalSnow jobber jacks off#1509421/9/07; 16:43:01

Ex-US Treasury's Snow expects hedge fund monitoring
Tue Jan 9, 2007 4:33pm ET
BERLIN, Jan 9 (Reuters) --Excerpt: "Former U.S. Treasury Secretary John Snow said on Tuesday he expected the leaders of the global economy would try to find a way to monitor hedge funds without imposing heavy-handed regulation on them.
"The issue here is finding the right balance," he said in a lecture at the American Academy in Berlin.
Germany wants to promote hedge fund transparency during its presidency of the Group of Eight this year, and finance ministers from the Group of Seven leading industrial countries are expected to address the issue at a Feb. 9-10 meeting.
Snow, who served as treasury secretary from early 2003 until June 2006 and is now chairman of a private investment firm, said private equity was a positive force in the global economy.
"On hedge funds, private equity funds, I think there the leaders of the global economy are going to continue to look and monitor and try and figure out some sensible way to keep track of what's going on without imposing regulatory schemes that defeat the clear advantages that private equity bring to global markets," he said.
"Heavy-handed regulation in this area -- things like imposing capital standards, things like imposing prior disclosure on investment strategies and so on -- would defeat the very nature of private equity," he added.
Snow's comments on hedge funds and private equity were roughly in line with remarks put forward by his successor at the U.S. Treasury, Henry Paulson."
Mikal-> Snow drones out the party line of Paulstutter, Greenspeal, Bernonsense. Praising "private equity" plusses
and parrotting derivative drivel while it's still politically palatable. In time, this fetish won't be fashionable and Snow can slither out of his investment firm
if things go against it. Golden parachutes and sovereign immunity for all!

FlatlinerSanctions, oil and gold.#1509431/9/07; 16:46:12

A couple weeks ago, we all learned that N. Korea was(is) able to take advantage of a loophole in the sanctions imposed against it by resorting to loosening up its gold exports to raise currency capital. I'm curious if there is such a loophole for Iran? Does anyone know? (I'm sure we'll find out if there is in no time at all.)

Over the last year, we have all heard time and again that Iran looks at economic sanctions as an act of war. At least, that's what they seem to say over and over again. With a key bank being cut off from the financial world, one has to wonder how they will react. Will they withhold oil or may they simply ask for a different currency in exchange for oil?

I remember reading in the archives here that the trump card is that oil can bid for oil in gold. Does Iran hold that card? Can anyone speculate here with regards to this? Is Iran strong enough to make such a call for gold? Or, better yet, what might happen – today - if Oil where to call out Gold? In the light of sanctions on currency flow, would defaulting to using Gold as currency keep things working for them?

I know it might seem laughable, but it might be nice to hear the opinions of a few old-timers with regards to this.

Where are the hounds? Where is that trail?

USAGOLD Daily Market ReportPage Update!#1509441/9/07; 17:08:02">
The Daily Gold Market Report has been updated.

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

TUESDAY Market Excerpts

Jan 9th (Reuters, MarketWatch) -- Gold futures finished higher after it seesawed early on Tuesday, recovering some of last week's five-percent drop, as the precious metal closely tracked volatile oil prices which had plunged to a 1-1/2 year low before paring losses.

The COMEX February gold contract settled up $5.60 at $615.00, trading in a range of $607.00 and $617.40. Gold climbed in overnight sessions, trading as high as $615.40.

The February contract changed directions several times during open outcry before finally turning higher as oil recovered.

"The gold market took a hammering last week, primarily on U.S. fund selling, which appeared after the Asian and European hours of business on Friday," said Julian Phillips, an analyst at GoldForecaster.

"But in Asian and European hours the gold price started to bob back like a cork released under water," he said in e-mailed commentary. "Demand from physical and investment sources will continue to do this while the funds are following the dollar and oil prices," he said.

Stephen Platt, analyst at Archer Financials, said that the precious metals markets were taking cues from crude oil. Oil prices tumbled as much as $2 a barrel earlier in the session on mild winter weather in the United States and waning interest from big investors in commodities indices.

On Tuesday U.S. crude fell as low as $53.88 during electronic trading before it cut losses and ended down 45 cents at $55.64 a barrel.

"We are seeing some physical support on the dips," said Paul McLeod, vice president-precious metals at Commerzbank. "We are building a base here from which we can attempt to recover the losses from the first week of the year."

Gold is finding some support from safe-haven demand triggered by U.S. air strikes in Somalia, said Moore. The U.S. has carried out at least two strikes against targets in the east African country, targeting Islamist fighters that it believes include members of an al-Qaida cell, the BBC reported.

The Somali transitional government said many people were killed, according to the BBC. Parts of southern Somalia have been under the control of Islamists that the U.S. believes have links to al-Qaida, an accusation that the Islamists deny.

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

TownCrierBankk using the lure of gold to raise cash deposits#1509451/9/07; 17:17:35

January 10 2007 -- Ambank, in a bid to grow retail deposits by up to 20 per cent this fiscal year, is offering a kilogramme of pure gold to the grand prize winner in a three-month campaign to woo depositors.

This prize is worth around RM92,000 based on the current gold price of RM92 per gramme, or enough to buy a 1.8 litre Japanese sedan car.

Describing it as a "do nothing" contest, managing director for retail banking Mohamed Azmi Mahmood said customers need only to deposit and maintain a minimum of RM2,000 in their savings or current account and fill in a simple contest slip to take part.

No slogan writing is required for the so-called "Mad Gold Rush Contest" that will last from January through March, he told reporters when launching the campaign in Kuala Lumpur yesterday.

Apart from the grand prize, depositors also stand to win nine consolation prizes of 20gm of gold each, and 100 monthly prizes of 2.5gm of gold each.

The bank is hoping that the campaign will raise up to RM300 million in deposits...

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

Almost ironic... when cash managers want to raise more cash deposits, they offer a chance for gold for a few lucky winners. But gold managers do the opposite -- they offer the promise of (leveraged) cash to all-comers.


mikal@Flatliner#1509461/9/07; 17:18:02

I don't think gold is held in such quantities as to make
more than a tiny dent in it's daily cash needs. Here is some background on expenditures Iran has been struggling to meet. Also, at the start of the longish article,
how they were exceeding Opec quotas lately in search of revenue: What's Behind the Crash in Crude Oil?
By Gary Dorsch, Editor, Global Money Trends newsletter,
January 9, 2007 | Excerpt: "Is it enough to point the finger of blame for the latest crash in crude oil on the arrival of global warming? Unusually warm weather in Russia, Europe, and the United States, with temperatures reaching the upper 60's in New York's financial district, weakened global demand for heating oil by 23% below normal last week, and a 30% drop in heating oil demand is also expected in the days ahead...
Non-OPEC oil output rose to 51.7 million barrels in the fourth quarter, or 3% higher than a year earlier. OPEC-10 said it would address the net increase in global oil supply in 2007, by lowering its oil output by 1.2 million barrels per day (bpd) to 26.3 million bpd in November, and then lower oil output again in February by an additional 500,000 bpd to 25.8 mil bpd. "OPEC's reduction of 500,000 bpd has been scheduled to come into effect during the winter demand period, while addressing looming market imbalances for 2007," the cartel said on December 14th.
On January 5th, US crude oil prices had already plunged 10% over three days and touched a low of $55 per barrel, on news available to insiders, but not yet known by the public at large. OPEC was cheating on its pledge to cut its oil production to 26.3 million bpd in December. Instead, the cartel pumped 27 million bpd or 700,000 bpd above it's agreed upon quotas.
Ironically, the two biggest cheaters in OPEC were the two most vociferous price hawks, Iran and Venezuela. After pledging to cut its oil output by 176,000 bpd in December, Tehran left its oil output unchanged at 3.83 million bpd, while Caracas actually increased its oil output by 20,000 bpd last month, after pledging to reduce output by 138,000 bpd. Riyadh cheated by 80,000 bpd last month. It's hard to believe OPEC will meet its pledge to cut oil output by 500,000 bpd in February, when the December agreements have not been fully kept."

Lackluster@Mikal, Flatliner#1509471/9/07; 17:49:13


"I don't think gold is held in such quantities as to make
more than a tiny dent in it's daily cash needs."

At least not at todays valuations. Maybe it needs ro be revalued, up?

CometoseStage II and Junior deployment .........#1509481/9/07; 17:51:25

Since last weeks rain / deluge........of oil dumping as if from Virtual Tankers .......oil digits as they were.......

and its collateral damage in associated markets ,,,, it would appear that some money began pouring into the junior sector ...........

and in comparison , some of the stalwarts are sitting on their bottoms ..........interesting to see the laggards lead and leave the former leaders lagging .....

an apparent crossover of sorts .............
It's a wonder to me .................of the proving hours

CometoseLast weeks COT #1509491/9/07; 18:09:49

Commercials postions (futures and options) for the week in


Were net short 1800 contract

Copper were net short about 200 contracts and

GOld were net short 9100 contracts

Placer GoldMy One Gold Coin#1509501/9/07; 18:13:15

I'm new to posting on this forum but I've lurked here for a year. I think I can have a small voice here now by virtue of my acquisition late last year of my first gold coin - a 2006 Gold Buffalo, still in the US Mint plastic protector.

What does Gold mean to me? I think it's a way to store real wealth in a small space. How much value does Gold have? I think Gold's value remains constant over time. It gets diluted by new gold being mined from the earth but it gets supported by more people being born than die each year.

To me Gold is not an investment. It is static wealth. If we want to invest or even speculate we are better off putting our currency in a bank account or in the stock market where money is (hopefully) put to work in a productive manner. A company like Microsoft can increase wealth by creating more and more useful products and services. A Gold coin can not grow at all. On the other hand, a Gold coin can not fail or go bankrupt.

Sometimes the price in fiat money to purchase Gold becomes detached from the fundamental rule that money seeks value. Right now, I think Gold is comparatively cheap (in dollar terms) by 50% even though it has risen substantially in the past few years. Thus, it's a very fine time to buy Gold if you are able, especially if it appears to you that the prospects for economic growth in the world of investments are not worth the risk. Gold carries no economic risk.

One Gold Coin and Counting!


Flatliner@Placer Gold#1509511/9/07; 18:23:45

Bold move. We follow in the steps of giants.
TownCrierPlacerGold, welcome!#1509521/9/07; 18:24:15

At one gold coin (and counting), you are better positioned than a great many others who stand at zero.



FlatlinerIf it hasn't been referenced millions of times#1509531/9/07; 18:44:11

There are a number of links, found across the top of this page, that lead to hours of fascinating reading from posters gone by. Most is very relevant and quite thought provoking. Please share what you discover!
melda laureAll they need is a REALLY big boat.#1509541/9/07; 19:47:35

Sir Flatliner, sanctions ARE and act of war. So is a naval blockade. And that is so, regardless of what some diplomats at the UN decide. It is one thing to say "I wont trade with you" and quite another to say "I wont let you trade with anyone else."

In any case, if Iran wants to ship oil for gold via their northern border into russia, there is little that the US can do to stop it.

melda laureOld Speculations. Iran's remaining swiss deposits. (if any)#1509551/9/07; 19:58:31

I previously speculated that if Iran wanted its swiss deposits back they could always sell their deposits to the Russians in exchange for physical delivery via the caspian sea route, or air mail.

I suppose the question is how much of russian gold production is available for re-directed export, and how much is already destined for sale on specific exchanges and western markets?

An analogous situation: Iran cannot just turn aournd and sell all it's oil to china- not without stirring the pot!

Sierra MadreMy evaluation of precious metals "market" moves, FWIW#1509561/9/07; 21:52:17

I compare the foreign policy of the US Gov't and its corresponding actions in the Middle East with what is going on in the "markets" for precious metals. (I put markets in quotation marks because the world does not have true markets in precious metals at this time. A managed or manipulated market is not a market at all.)

In foreign policy we see the US Gov't resorting to pushing and shoving and pre-emptive strikes, senseless bombings, etc. In other words, diplomacy, the skilfull accomodation of national interests with the interest of others, to obtain agreements which all can live with, though not to their entire satisfaction, is the normal activity of foreign policy. This has been OUT as far as US foreign policy is concerned, and reliance on inflicting pain to those who do not bow their heads is IN.

This self-centered foreign policy has been operative conspicuously during the Bush Jr. years, and has devastated the prestige of the USA around the world.

It denotes, in reality, not strength but weakness. A truly strong man does not need or want to bully others.

Now turning to the precious metals markets, such as they are, we can see similar attitudes prevailing. The manipulation of the markets is now blatant, there is no pretense about it. FEAR is to be instilled in the participants. Prices of gold and silver are to be bashed when they get uppity. The management of the gold price is indeed violent and to be carried out by means of FORCE.

This attitude towards gold and silver are going to go - NOWHERE. Just like the foreign policy of the US in the MIddle East is going to go NOWHERE. Violence will get you nowhere in the long run. There must be a semblance of reason, and that has been abandoned. A truly stong dollar has no need of such violence to the markets.

So, the present policy towards gold and silver will lead to no lasting advantage to the US. It's a losing war against the interests of the rest of the world and against the interests of Americans too, into the bargain.

Time will show that this is the case. Violent measures of blatant intervention will produce no lasting effect; the "war" on gold is already lost. All this bluster and slamming of the prices of the precious metals will fail to achieve anything lasting for the enemies of gold, and only demonstrate their desperation and refusal to acknowledge that reality has defeated them.

Same situation as in the present foreign policy. The war in the M.E. is lost, but - more troops will be called for.

All to no avail.



968Banks ordered 162 tonnes of gold from producers in 2006#1509571/10/07; 05:32:48

MOSCOW. Jan 10 (Interfax) - A total of 42 commercial banks signed contracts to buy 161.9 tonnes of gold from producers in 2006, a source at the Gokhran or precious metals and gemstones repository told Interfax.

Not all of the gold will have been delivered by the end of last year, so there could be some discrepancy between the amount of gold ordered and actually received, the source said.

A total of 43 commercial banks signed contracts to buy 176.6 tonnes of gold from producers in 2005. Russia produced 168 tonnes of gold in 2005.

The Russian Gold Producers' Union has said it expected Russia to produce 165 tonnes of gold in 2006.

The Gokhran source said that 18 banks had so far ordered 56.3 tonnes of gold for 2007. "Some banks are already signing contracts for 2011," the source said.

Russia's biggest gold buyers are Vneshtorgbank (RTS: VTBR), Sberbank (RTS: SBER), Rosbank, Zenit, UralSib, Gazprombank, Nomos Bank, Soyuz, Expobank, Lanta Bank and Khanty-Mansiisk Bank. pr

Thoreauly"The End of Money"#1509581/10/07; 06:09:18

A more appropriate title would be "The Corruption of Money and Its Consequences, but in any case, it's a compelling read. For example:

"It took us from 1620 until 1974 to create the first $1 trillion of US money stock. Every road, factory, bridge, school, factory, and house built, every unit of economic transaction that ever took place over those first 350 years required the creation of $1 trillion in money stock. But it only took 10 months to create the most recent $1 trillion and I don't recall seeing an entire continent's worth of factories, schools or bridges built during that time."


"A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus."

Americans have a negative savings rate for the first time since the Great Depression and a current account deficit last year of nearly $900 billion.

You do the math.

KnallgoldCB's to diversify into Stocks,yeah#1509591/10/07; 07:36:08

I would have a hard time writing 4 pages about this issue without mentioning Gold...
TownCrierPsssst...#1509601/10/07; 10:01:24

The latest Buyers' Group is now underway! All are invited to participate. On top of the traditional volume discounts through these offers, there is also a raffle to win a two-centuries-old gold Louis XVIII coin (1814-1824).

Jump right in!


Federal_ReservesUS trade deficit with China reaches record #1509611/10/07; 10:22:25

US trade deficit with China reaches record $214bn

All Financial Times News

The US trade deficit with China has reached an all-time high, according to figures published on Wednesday, which will fuel calls in Washington for Beijing to revalue its currency.

The politically-sensitive trade gap with China reached $214bn in November, shattering the 2005 annual record of $202bn and putting the total on track to exceed $230bn.

Flatliner@CB's to diversify #1509621/10/07; 10:26:24

Knallgold, it wasn't long ago that we all heard a key banker in China say that they where eyeing many different types of financial instruments as a means of diversifying. When I read that, I couldn't help but think of their current policy of holding shares in local companies. I also wonder if there is any real benefit from doing so?

We are all aware that the act of recycling surplus dollars into bonds has driven yields down which has worked to keep the cash flowing as Jane and Joe go further into debt to acquire that easy money (thanks Usul). While all this happens, J&J have placed their future standard of living in their 401k program – which – depends 100% on the well being of the stock market. Effectively, bank savings has gone below zero because J&J are on margin expecting capital appreciation of their stock savings account to outperform their debt. But, for the last few years, J&J have continued to feel good about the economy because they could extract capital from their home and buy cheap goods imported from China (or find function in their strong dollar).

If refinancing your debt no longer fuels the fire, what will? Back in the 90's, we saw that a rising stock market, one where key stocks doubled over and over again fueled a new set of millionaires that drove the economy. It seemed that you couldn't do wrong by jumping in. It was an emotional ride that many will never forget. Would Central Banks want to rekindle that emotion with the idea that it will trigger loose handling of purchases by J&J? In other words, drive J&J's 401k ‘value’ higher in order to make them feel like they are getting rich.

The only problem here, that I would expect Goldilox to jump all over, is that there is a fixed number of certificates in the world. Certificates are expanded through splits, but the market cap that is measured by it just goes up. More certificates can be created, but they can only be created based on a new business going public. Thus, any move to diversify into certificates will be much like buying gold, it will be a run on ‘assets’ much like the euphoria phase of a hyperinflation period. In order for a host country to defend against this, they will have to find a way to expand and contract the certificate supply in order to maintain control. In our current system, it would most likely be driven through Failures To Deliver or Naked Shorts. In other words, certificates will go even further into being fractional in order for the local central bank to defend against hyperinflation.

On top of that, a key thing that is often overlooked is that a central bank is not out to maximize returns, but it's job is to maintain confidence in it's local currency. Right now, people have confidence in China because of its export business – not because of it's trillion in the bank. As long as they can keep control of the export business they will maintain that confidence. Even if the value of the reserves that they hold drops, as long as exports continue, people will continue to work and feel good about their situation (generally).

Taking the stand that the idea of maintaining confidence is key, I would expect that the bank of china will continue to ‘spend’ their reserves on instruments that help maintain their export business AND empower their corporations with loans that go towards securing resources that are essential building blocks in their economy. As long as dollars are strong, and they can be used in international markets for things like oil and oil exploration contracts, we should expect them to continue to use them in this manner.

The more I think about foreign reserves, the more I lean towards the idea that central banks will hold dollars up to the point where the dollar looses function in international trade. In other words, they don't care if it loses purchasing power, they only care that it functions. If it functions, there is confidence in it which implies that they are doing their job.

Thus, I watch for private contracts to see if world commodities trade in US dollars. What I'm seeing is that less and less delivery is done through the Open Public Markets, thus the function of the dollar is moving more towards being a speculative currency rather than a functional currency.

Thus, my move to gold. I want something that functions.

Sierra MadreKnallgold: some thoughts regarding CB's and stocks...#1509631/10/07; 10:39:50

Well, Knallgold, the thought comes to me that if the C.B.s of this world could buy up all the gold in the world somehow, THEN they would not care about suppressing the price through surreptitious collaboration.

It's just because they cannot own all the gold, that they feel they must keep the price down. Gold is too widely distributed and its appeal is too ingrained and widespread to permit the total accumulation of it, in the hands of C.B.s. Therein lies the key to the freedom that gold gives to its owner.

Another thought: since at the present time all C.B.s are joined at the hip with, or actually run their respective governments, does it make any substantial difference if the C.B.s buy up stocks or if Government buys up stocks? Of course, if the Government buys up stocks we call it Socialism, in which case, we have a Socialism which may, at least, be suppposed to respond to the public interest.

If the C.B.s buy up stocks, it seems to me that this is simply a more despotic Socialism, as C.B.s are supposedly autonomous and not subject to any sort of control, as per the most recent formulas of "Central Bank Independence" i.e. Sovereinty.

The world got rid of Kings with their Divine Right to rule, but we only jumped out of the frying pan into the fire, with Sovereign (that is, Kingly) C.B.s who are beyond popular or governmental control and do not have to respond to God for their actions, as the Kings did.

"The more things change, the worse they get", a variation on an old proverb.

Ah, well! Socialism - whoever runs it makes no difference - is unworkable and all will come to grief in due course. Gold will remain the refuge against all this madness, for centuries to come.


USAGOLD / Centennial Precious Metals, Inc.Hard assets, EASY access!#1509651/10/07; 11:50:13">Napoleon III gold coins
Topazalt currency PoG.#1509661/10/07; 11:59:23

Having - generally - held itself together during Dec, cracks are again appearing in the "Gold is Currency" mantra.
It's interesting to maintain a detatched watching brief as this all evolves (devolves). Clearly opposing factions want PoG to either push buck up or drag it down whilst BOTH groups wanting not to risk aggrivating a declining confidence in Fiat.

mikalBloody expensive adventure#1509671/10/07; 12:48:47

War on terror raiding world's gold treasure
Warren G. Olson | January 09. 2007 12:00AM
Sarasota Herald Tribune - Opinion (Subscription site)
"First, consider the cost of the war in Iraq in terms of the lives of U.S. and Iraqi citizens. Next, consider that the war on terror is costing $2.5 billion each week and a total of $350 billion to date...
Let's put it in the context of gold. At the current rate of gold -- about $618 per ounce, the Iraq war is costing the U.S. 126.6 metric tons of gold each week. So the cost of the war to date is equal to 17,724 metric tons or 12 percent of all the gold ever mined in the whole world. Imagine what this lost treasure might have contributed toward health care, Social Security, the environment, alternative energy, real homeland security, etc."
Mikal-- Costs can be measured with different yardsticks.
The one's we take seriously are not casually tossed
about to rot or be forgotten, as they are always
quickly rediscovered by someone and put to their highest use.

Ringwind9/11#1509681/10/07; 13:03:21

Google Search: The FBI uses polygraphs to eliminate suspects
Chris PowellNadler refuses gold manipulation debate but releases Fort Knox photos#1509691/10/07; 13:04:58

2:52p ET Wednesday, January 10, 2007

Dear Friend of GATA and Gold:

Kitco market analyst Jon Nadler, perhaps the most notorious of the deniers of the central bank gold price manipulation scheme, has refused an invitation to debate the manipulation issue with GATA Chairman Bill Murphy and other speakers at the Vancouver Resource Investment Conference this month. So the conference will hold a panel discussion on the issue featuring Murphy, GoldMoney founder and GATA consultant James Turk, Long Wave Analyst newsletter editor Ian Gordon, and another conference speaker or two.

But Nadler HAS produced his "proof" that there is no gold price suppression scheme, the "pictures of all the gold in Fort Knox," which he claimed to have in his possession when he was interviewed last week by Resource Investor:

Nadler has not identified the people shown in the Fort Knox photos but maybe you'll recognize them. You can find them here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

mikalSocial insecurity#1509701/10/07; 13:15:06

Wednesday, January 10, 2007 -
The Wisconsin Department of Revenue has inadvertently distributed 170,000 tax forms bearing the Social Security number of the intended recipient on the mailing label. - Web CPA

Click Here For The Full Story

Flatliner@Ringwind#1509711/10/07; 13:29:39

The curious in the audience would like to get a better understanding with regards to your ‘tip.’ As you see, Google uncovers much and its leads many astray. Also, if I understand it correctly, many here have a keen interest in gold and its emotional influence on the world's inhabitants. Is it too much to ask what your thoughts are on this matter and how it pertains to gold?
FlatlinerBlack market trading?#1509721/10/07; 13:59:43,,16849-2539704,00.html

Venezuela's stock market tumbled almost 19 per cent and its currency lost a third of its value in unofficial trading as investors took fright at President Chávez's plans to nationalise utilities as part of his "Socialist revolution".

Flatliner – the infomine link doesn't confirm this yet.

Chris PowellRussian commercial banks can't get enough gold#1509731/10/07; 14:33:24

From Interfax News Service
Monday, January 10, 2006

MOSCOW -- A total of 42 commercial banks signed contracts to buy 161.9 tonnes of gold from producers in 2006, a source at the Gokhran precious metals and gemstones repository told Interfax.

Not all of the gold will have been delivered by the end of last year, so there could be some discrepancy between the amount of gold ordered and actually received, the source said.

A total of 43 commercial banks signed contracts to buy 176.6 tonnes of gold from producers in 2005. Russia produced 168 tonnes of gold in 2005.

The Russian Gold Producers' Union has said it expected Russia to produce 165 tonnes of gold in 2006.

The Gokhran source said that 18 banks had so far ordered 56.3 tonnes of gold for 2007. "Some banks are already signing contracts for 2011," the source said.

Russia's biggest gold buyers are Vneshtorgbank, Sberbank, Rosbank, Zenit, UralSib, Gazprombank, Nomos Bank, Soyuz, Expobank, Lanta Bank, and Khanty-Mansiisk Bank.

mikalGoldman Sacks plunders on#1509741/10/07; 14:34:00,,5-2539699,00.html#cid=OTC-RSS&attr=Business

Surprise at Goldmans manoeuvre to hamper bid rivals
Tom Bawden and Siobhan Kennedy | Timesonline | 01-10-07
Snippits: "Goldman Sachs, one of the biggest participants in consortium buyout deals, risked controversy last night after it restricted private equity firms’ scope for teaming up to bid on the $10 billion (£5.2 billion) auction that it is running for General Electric's plastics unit.
The investment bank, whose private equity unit rarely bids alone, to avoid alienating the buyout firms that pay it lucrative deal advisory fees, has sent out a one-page "teaser" on General Electric's plastics unit to potentially interested parties.
Goldman Sachs is understood to have imposed restrictions on the bidding process, which would make it very difficult for leading buyout firms to create their ideal consortiums...

Goldman Sachs is thought to have one eye on a US Justice Department inquiry into alleged cartel practices among leading American buyout firms such as Kohlberg Kravis Roberts (KKR) and Silver Lake Partners. The inquiry, which came to light in October, is thought to centre on the possibility of collusion between private equity firms seeking to reduce the price that they pay for a company by teaming up for "club" deals.
Bankers and private equity practitioners expressed surprise that Goldman Sachs should try a tactic that it has not adhered to traditionally.
Goldman Sachs's private equity unit participated in two of the ten biggest buyouts of 2006 — Kinder Morgan, the American gas pipeline company, and Biomet, the American medical devices group. It also led the consortium that acquired Associated British Ports. Last year, Goldman Sachs was the top advisor on mergers and acquisitions worldwide."

Mikal-- More on the continuing saga of one of the higher-profile government-sponsored, government approved training grounds for "creative accounting" and mega-deals
of all calibers. "Executive privilige" is little brother to the concept of bureaucratic megalomania, uprooting old assumptions of inertia, efficiency, order and stability in world markets and affairs.
At this point, the entire world economy
is a "weapon of mass financial destruction" greater than
derivatives as Warren Buffet described them.

LacklusterMethinks...#1509751/10/07; 14:41:53

Nadler protests too much!
Chris PowellGold ETFs expected to start in India within month#1509761/10/07; 14:51:48

From Press Trust of India
Monday, January 10, 2007

MUMBAI -- Traditional household investment in gold will soon have a new option with the much awaited gold exchange-traded funds (GETFs) expected to be launched within a month.

"The GETF hopefully should be launched within a month," Association of Mutual Funds in India Chairman A.P. Kurian told reporters.

As per reports three mutual funds, Benchmark Mutual Fund, UTI Mutual Fund, and Kotak Mutual Funds have already filed offer documents for gold funds with the market regulator.

"Some of these funds will be launched positively before end of this financial year," he said.

Through GETF people can inveset in gold in small amounts over a period of time. And when they want to sell, they can either get gold or simply sell the units, he said.

A minimum of one gram of gold can be bought or sold through the schemes, enabling even the poor to buy the precious metal and plan their future needs, like buying wedding jewelleries.

The new fund will track international gold prices like the one prevailing on London Metal Exchange, Kurian said. SEBI has directed mutual funds to outsource services of a custodian for storage of physical gold from a third party since fund houses have no practical experience in storing the precious metal -- usually a custodian bank's job, he said.

In fact, Kotak Mutual Fund has already designated Deutsche Bank AG and Standard Chartered Bank as custodians for the proposed GETF scheme.

The appointed custodians will buy and sell gold as investors look at positions in the ETF.

Such a move will enable any household to buy and sell gold in units for as little as 1,000 rupees and these units could be traded in the same manner as mutual fund units, he said.

In UTI's proposed fund the units issued will be referred to as UTI Goldshare.

Investors who want a cost-effective and convenient way to invest in gold can get an instantaneous exposure to the physical asset.

Its units can be traded like a share and one can buy and sell them quickly at ruling market price, unlike physical gold, which can be sold only for a discount and by a cumbersome process.

Chris PowellBrer Fox, don't throw me in the briar patch!#1509771/10/07; 15:04:58

Last European bank will stop
handling dollars for Iran

* * *

Iran Begins to Feels
the Financial Squeeze

By Michael Connolly
The Wall Street Journal
Wednesday, January 10, 2007

Evidence appears to be growing that Iranian firms are feeling the pinch of the U.S.-led drive to have banks curtail transactions with Iran's state-controlled banks. Iranian banks and companies, for instance, are now having to put up large deposits -- as high as 100% -- in foreign banks to get them to issue letters of credit for foreign transactions.

The U.S. government's attempt to isolate Iran's economy will get a significant boost this month when the last European bank known to be clearing large volumes of dollar transactions for Iran in the U.S. halts the practice. Commerzbank AG, Germany's second-largest bank, said it will stop handling dollar transactions for Iran at its New York branch by Jan. 31. Choking off Iran's financial ties to Europe is key to Washington's effort to isolate the country, as Glenn R. Simpson in Brussels and David Crawford in Berlin report. The European Union is Iran's largest trading partner by far. Trade between the two topped $25 billion last year, but trade growth is stagnating, largely because of U.S. pressure.

During the past year, most European banks with longstanding relationships with Iran have bowed to U.S. pressure and sharply curtailed transactions with Iran's state-controlled banks, which the U.S. says support terrorism. The U.S. is also seeking to financially quarantine Iran because of Tehran's vows to press ahead with its nuclear program in defiance of international will. In a related move, the U.S. Treasury Department on Tuesday named Iran's fifth-largest state-owned bank, Bank Sepah, and its subsidiaries as weapons proliferators and barred banks operating in the U.S. from handling any transactions on their behalf.

At present, Commerzbank handles both dollar and euro transactions for Iran's state-owned banks. Like several other European banks, it will cease handling only dollar transactions. That is likely to limit the economic damage to Iran, enabling the country's banks to continue paying suppliers who will accept euros or other currencies. But it's also likely to subject Commerzbank and its peers to further U.S. pressure.

Flatliner@Russian commercial banks can't get enough gold#1509781/10/07; 15:19:09

Anyone have any real idea what this means?
USAGOLD Daily Market ReportPage Update!#1509791/10/07; 16:05:07">
The Daily Gold Market Report has been updated.

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

WEDNESDAY Market Excerpts

January 10 (DowJones, Reuters, MarketWatch) -- Gold futures were pressured by a muscular U.S. dollar and weak crude oil much of Wednesday, yet managed to pare their losses into the close due to a combination of chart-based buying as support held, plus good physical demand lately, analysts said.

The COMEX February gold contract fell $1.60 to $613.40.

"There were some technical considerations," said Dave Meger, senior metals analyst with Alaron Trading, about the comeback.

"Down around that $606 to $607 level, we got a little oversold from a technical perspective. That drew in some buying." Furthermore, good physical demand has been occurring in the spot market around the $600 area, said Meger.

"It seems like every time we get close to the $600 level, basis spot, there has been some significant physical demand that has been enough to hold these prices from going lower," he continued.

He and others blamed the initial weakness in the metals on the strong U.S. dollar and weaker crude oil. February crude oil fell as far as $53.80, the weakest level for a front-month contract since June 2005. The main culprit was a weekly jump of 5.4 million barrels in U.S. distillates, which include heating oil and gasoline, according to a Department of Energy report. This outweighed a 5-million-barrel decline in crude supplies, energy analysts said.

Meanwhile, the euro hit a six-week low of $1.2932 against the dollar after trade data from the Commerce Department.

Gold initially fell almost as much as $9.00 after the dollar was lifted by news that the trade deficit shrank in November, making this the narrowest reading since July 2005, and the third consecutive contraction of the deficit.

Bill O'Neill at LOGIC advisors said that it was a nice recovery for gold, given that oil prices fell and the dollar was firm. O'Neill said that he saw some evidence of investment interest in the market out of Europe and Asia, and some buying by dealers.

"Gold is trying to make a stand here around $600. And so far it has been successful. There are a number of funds shorts in the market. We're seeing some covering coming from them," said O'Neill.

"Perhaps we are coming toward the close of the blitz of selling on the metals. Some of the speculative pressure, which has been heavy for a while, may be easing as well," said O'Neill.

"Gold's ability to hold above $600 over the past couple of days has improved the metals technical outlook, with the metal now in the process of establishing a base at $605," said James Moore, an analyst at TheBullionDesk.

Following last week's 5% price drop, Dennis Gartman said in his Gartman Letter the fact that spot prices fell to $605 on Tuesday but then held firm and rallied back to the $616 level made it look "as if the selling was done and had perhaps been overdone. ... If spot gold can hold at or near the $610-$612 level for several more hours...even perhaps for a day or two...we'll be far more certain that the lows have been seen; that the liquidation has run its course and that the worst is behind us."

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

FlatlinerWhat does Bhatt mean?#1509801/10/07; 16:07:42

"Referring to the finance minister P Chidambaram's proposal to utilise part of foreign exchange reserves for infrastructure, he added, it was a good idea, but banks would have to wait for the fine print of the government's policy in this regard.

The finance ministry has set up an expert committee headed by finance secretary Ashok Jha to work out a road-map for the utilisation of forex reserves for the infrastructure sector. The government has been maintaining that the country's infrastructure sector requires over $320 billion investment over a period of five years.

Bhatt also said that the government could utilise the funds blocked in gold stocks. "At present, out of 800-900 tonne annual gold imports, about 500 tonne of gold is imported through banking channels," he said, adding, these funds could be freed for infrastructure investment as well."

Flatliner – If I'm reading this correctly, he's saying that money normally spent on importing gold, 500 tonnes a year, may be used for infrastructure projects instead? What doesn't seem to add up here is that he seems to state that the 500 tonnes imported is held as foreign reserves or is gold imported through the banking channels. But, I have not seen any supporting documents where India is claiming to be growing its gold reserves at all. The reports say that gold reserves are steady (unchanged).

Oh well, it could be nothing. They probably meant to say 500g or something like that. That would be more in line with what the official reports claim.

Thoreauly"Wave phone, buy stuff"#1509811/10/07; 16:12:54,72462-0.html?

And why not, then, with digital gold accounts, where your gold is stored with a bank that credits and debits your accordingly?
FlatlinerBolivia's Evo Morales says he will nationalize mining industry this year#1509821/10/07; 16:17:31

MANAGUA, Nicaragua: Bolivian President Evo Morales on Wednesday renewed his pledge to nationalize his country's mining industry, saying he would complete the task this year.

In comments after his arrival for Daniel Ortega's inauguration as Nicaragua's president, Morales said the mining industry was the next privatization he wanted to reverse.

"Last year we nationalized hydrocarbons," he said. "This year it will be mining."

Flatliner – another reason metal in hand is better than metal in the ground. Would you call this stuff "deep storage"?

MKFlatliner#1509831/10/07; 17:21:28

As we move through the beginning stages of 2007, there are two developments which I think have been under attended in investor/Wall Street circles including the gold community.

One is the trend in Latin America toward leftist/socialist regimes.

Chavez, Morales, Ortega are all in the mold of Castro. China would like to get a logistical foothold on Venezuelan oil and I've heard rumors involving the Panama Canal, or the possibility of a pipeline to Ecuador. While the Bush White House concentrates on Iraq, Latin America is slipping into the hands of people less than friendly to the United States, yet you don't hear much about this dangerous progression from Wall Street analysts/commentators, including with a gold bent.

At the same time, the strategic importance of Latin America to the United States has been altered profoundly by the rise in oil imports from that part of the world. Roughly 13% of U.S. oil imports come from Venezuela. Another 16% comes from Mexico. If you think, the staunching of oil flows from Iraq or Iran will hurt the world economy, wait until 30% of the oil closest to the United States becomes threatened, or begins to be siphoned elsewhere. Chavez seems to be entrenched in Venezuela and solidifying his power, (Yesterday he moved to allow an unlimited term for V.'s president) and Mexico seems to be tilting dangerously in the wind. As the dominoes fall around it, Mexico is the ripe plum that the socialist left would like to have fall in its hand.

Another (and my Democratic friends aren't going to like this comment) is the threat imposed by the Pelosi government operating out of Congress.

As George Bush further digs himself into the seemingly bottomless hole in Iraq, some of the most radical left legislators ever to hold the reins of power in Congress have just been sworn into office. It is difficult to imagine what this radical Democratic Congress will mean in terms of taxes and spending (they are sure to raise both). Once again, in my view, investors have not really come to grips with how this Congress might effect fiscal, monetary and foreign policy.

I don't expect them for example to put a damper on spending plans, but instead throw more wood on the fire. The Bush administration wants to increase means testing threhsolds for Medicare spending for example NOT to take the pressure off the Medicare capital fund, but to provide a new pool of capital that can be borrowed to keep the deficits down! Unbelievably, this is an important part of the Bush administration's plan to balance the budget. Normally, you would hope that a Republican administration would use its veto power to keep spending in check, but with the way things are going (and remembering how his father dealt with a Democratic Congress), things could get out of control quickly. The Federal Reserve meanwhile will be pushed hard on both interest rates and debt monetization by the Democrats (something which looms ever larger in the scheme of things). Bernanke will face a hostile Congress and find a rather warm seat waiting for him at committee hearings. It will be interesting to see how he reacts to it, but I would very surprised to see interest rates rise anytime soon.

And as for foreign policy. . . .well there's a whole new can of worms we won't even venture into in this short post. All in all, we should all be concerned about the fight now brewing between Congress and the White House. It is not going to be pretty.


Somehow, these two very important issues have been shuffled off to the dark corners of investor thinking, but I believe it won't be too long until they move to the forefront. The net effect will be to fan the flames of gold ownership. Many long-time gold owners and advocates will begin to get that feeling of deja vu -- and they won't have trouble identifying where it's coming from. The troubles far away may be quickly exacerbated by problems closer to home.

MKMore on Latin America#1509841/10/07; 17:32:31

At present we have leftist and/or left leaning governments in


GoldiloxCONgress#1509851/10/07; 18:18:30

@ MK,

Got a kick out of your Demo CONgress slam. While so many "life-long" Repubs are bailing on the Bushistas, I, as a life long Demo, am every bit as disgusted with the "bought and paid for" idiots on both sides of the aisle in Washington AC-DC.

I got a Pay-go poll from yesterday, asking me if they should institute a "new taxes for new expenditures" policy in the House. However, no mention of how they plan to pay for the pork that has already bankrupted us!

As usual, too little, too late.

MKGoldilox#1509861/10/07; 19:21:15

I am with you in that sentiment. . .Goldi. At this point in time, I do not think that the answer for America lies in either political party as their leadership is presently structured. By the way, this problem is not peculiar to the United States alone.
Flatliner@MK#1509871/10/07; 21:04:28

Short of voting, and being subject to the law, the most involvement that I have had in politics has been acquiring gold. Funny how that is. What I had originally thought was a pure financial decision (years ago) has turned out to be one of my biggest political moves ever. It has become very clear to me that politics determines the local currency value and gold stands to protect individual wealth against the onslaught of policy.

Some may argue that gold is a controlled commodity, thus it doesn't provide the support against the political situation that one might think. Some shun gold specifically for this reason. The interesting problem here though is that when policy wins over gold, the metal is held down near its commercial use making it stable and functional - cheap. When policy is wildly out of control and strength is lost in the currency, it will show in the exchange for gold. Currency that no one wants will not find function buying gold.

Where are the politicians driving our currency? And, more importantly, do I want to support it? It is my choice whether I play the game with their currency. Sure, it would be virtually impossible to avoid it, but I don't need to build, or invest, where I can calculate a losing long term position. If the tax burden becomes too large, how will a business in a heavy policy area compete with a business in an environment where the taxes are low? Likewise, why would I build a business today that I know will be nationalized in the future? That just doesn't make sense.

Gold is moveable capital. It is how one stores his wealth until the economic environment falls in balance for ‘the capitalist.’

As the work environment degrades, many more will find the value of gold storage and its functional portability. As we watch things swing socialistic in South America, you have to wonder if local companies are targets of the socialization or benefactors? I would guess that they would be benefactors. From the looks of it, the globalistic companies are finding the laws changing to their detriment thus making them rethink their business arrangements. This is bad and good. It depends on how you look at it.

How the new congress works in this changing environment will be most interesting to watch. Change may prove to be the most important issue. It's not so much that there is a policy one way of the other, but the fact that it changes will cause pain to those that have not been able to complete their plans. In some cases, the plans have spanned a lifetime. At this point, looking at how things are moving in the south, one has to wonder how that emotion will manifest itself in the states. What changes are in store for us and how might the business world adapt?

I'm half curious, would you include California in the collection of states that are moving socialistic?

People have become complacent in the grip of the strong dollar policy. Not just Americans, but all those in the world that have found function in those dollars. But, if the tipping point is met, and they no longer settle world transactions, how will those dollars be greeted? And how will international trade be settled?

Or, the puzzle for he who holds gold might be, in what way will the typical politician fight this loss of functionality? After all, it is people's willingness to take currency that gives it power.

mikalSanctimonious megalomaniacs and meddling micromanagers- Dante's phantasmagoria phase#1509881/10/07; 21:34:39

America Has Never Been A Free Country by Cody Phillips
The Chattanoogan | January 9, 2007
"With talk of the upcoming presidential election I believe Tennesseans, and Americans as a whole, need to realize that regardless of who enters office, he or she will continue to steer this country into a new world order as their predecessors have done throughout history.
Whether you vote Democrat or Republican, you are voting for one shadowy, governing body of elite, who play both sides of the aisle. America seems to be in a gray haze: disillusioned by the war, yet striving to hold onto thoughts of democracy. The truth of the matter is that America has never been a free country. America has always been in the hands of the international bankers, organizations such as the Trilateral Commission and Council on Foreign Relations, both controlled mainly by the Rockefeller family, and the web of secret societies, such as Skull and Bones and the Bohemian Grove.
In 1954, Senator William Jenner stated, "Today the path of total dictatorship in the United States can be laid by strictly legal means, unseen and unheard by the Congress, the President, or the people. Outwardly we have a Constitutional government. We have operating within our government and political system, another body representing another form of government - a bureaucratic elite."
The new world order is ruthless, and will eliminate nation states, religions, and borders. "In the next century, nations as we know it will be obsolete; all states will recognize a single, global authority. National sovereignty wasn't such a great idea after all." That was the prediction of Strobe Talbot, Clinton's Deputy Secretary of State, as quoted in 'Time', July 20th, 1992. The elite have carefully manufactured major events..."
Mikal-- Very nice overview of some of the concerns we have today as gold advocates and as global citizens under constant surveillance, suspicion and supervision. (=++=)
Undoubtedly this op-ed's been heavily edited for content and/or brevity.
But hey, it's not every day they're entertained by
an extremist conspiracy nut's (undocumented) fringe lunacies! }8:P

mikalPossible disasters ahead#1509891/10/07; 23:16:21 Telegraph | Business | Forum urges increased readiness for disaster | Edmund Conway, Economics Editor | 01/11/07
Short piece discusses economic risks such as global housing, clmate change, the US$ and more.

mikalWorld Economic Forum#1509901/10/07; 23:31:25

Full List of Economic Risks - Telegraph | Business 01-11-07
"Forum urges increased readiness for disaster"
23 risks are ranked in 3 categories of importance

GoldendomeSince the question has been raised regarding Democratic control of Congress...#1509911/11/07; 00:10:38

To any other recovering Republicans:

Two decades have passed since being a Republican meant much anything more than spending more money than Democrats. I used to think Republican control of Government would mean more Fiscal responsibility (man were we wrong on that accord.) I would rather have the Billions of dollars thrown around this country than thrown to the four winds overseas. The Bush administration is spending 800 million dollars for an embasy in Iraq for Christ's sake! At long last, have they no shame? Do we realize how many schools we could build in this country for that amount of money? or hospitals? or perscription drugs for the needy? We could save a lot of money by closing down many of our foreign military bases that have become dark holes for spending. But no, we spend our money in foreign coutries supporting military and political fantacies that went outdated twenty to fifty years ago. Eisenhower warned of the Military industrial, (congressional) complex as he was leaving office. Too bad that today everyone with a few thousand bucks in his pocket, his own medical care, and
retirement...says "screw 'em" to the less fortunate who for one reason or another haven't had the hand up the ladder. (They want a job and medical care? Let'em sign up and go to Iraq. But my son and daughter aren't going to go...They don't need to.)

I for one have no problem with saying "let's see how Pelosi and the Demo's do." The Republicans deserved everything that they received in November and then some. I don't mind seeing the minimum wage raised...I don't mind medicare being allowed to negotiate drug prices like all other big providers...I don't mind if ear-marks are tightened...I don't mind if lobyist access to the floor of congress is limited...I don't mind scrutiny over whats been going on at the Federal Gov't level. I also think that if we were being asked to pay for this war in taxes, that we would have much less of it--war! But no! we have guns and butter better than Lyndon Johnson could conceive. Tax cuts and war...what a combination. This nation as a whole should be ashamed of itself; I know I am.

None of us believes that spending will decline...that deficits will be reduced, no matter who holds the reins. We don't doubt that Democrats will want to spend money; but after the wastefullness of the past four years, just throwing some money in a different direction away from Bush's war will be welcome. Our fates will be decided by the other CB counterfeiters monetizing our debt as we export inflation. Gold will be good. Bush has been good for gold (and will continue to be). Maybe the Democrats will pile on and be even better for Gold. We know the Story! But me, I'd just as soon have the borrowed confetti, counterfeited dollars being spent to buy things in this country that people need--not squandered in foreign countries. A jobs bill for Iraq? Get real.

MineroCapitalism, Socialism, Globalism#1509921/11/07; 06:34:49

There is much talk these days about the trend toward socialism that is now sweeping across Latinamerica. Now, we should ask ourselves: is this a good or bad thing? Having lived and worked in Central America, I see it as the best available alternative for a bad situation.

The Central American local economies are generally non- monopolized, free, and capitalistic. A better description might be: Dog eat dog. This is a good thing, as those who like to eat tend to get out of bed early and get it. This also tends to sharpen ones wits and keep thep buisy.

Local international business ventures, the Globalistic portion of their economies, are the "Maquilas". These foreign owned sweat shops are looked upon with much disdain by the locals. The wages are often even lower than local prevailing wages, and the work in grueling at best. The turn-over rates are very high as the workers burn-out rapidly. But fortunatly for the "Capitalists" there is always a fresh crop ow workers.

Modern capitalism is doing little for these people, and look at what it is doing for us.

slingshotmikal#1509931/11/07; 07:38:23

Whacha gonna do?
Whacha gonna do when they come for you?
Bad Boyz, Bad Boyz

Nothing will happen till they tell us to hand in our guns.
They will make their laws. Even shut down the banks.

Crime I think will be the factor. When the housing drops and there are less jobs compounded by the Mexican Invasion, crime will rise as competition becomes vital to putting food in their mouths or send home to family.
Then watch the police state rise!

GoldiloxMoney borrowed and squandered#1509941/11/07; 07:49:15

@ Goldendome,

Your analysis carries over well into the corporate world, as well. During my heyday in that environment, the R&D budget was one of the most revered measures of a company's growth. Today it's all about security and loan portfolios.

GM, Ford, and GE are the perfect examples. Once the hallmark of US industrial strength, they are now naught but globalist banks with manufacturing subsidiaries that make up less than 10% of their business.

All the noise about "alt energy" is no more than hot air when one day's "adventure" securing oil in Iraq completely dwarfs our entire annual budget for energy R&D. Most of the advanced physics research is locked up in black ops, never to see the light of day in non-military application.

Even NASA blacks out the SOHO camera feeds whenever there is evidence that might challenge the "established solar axioms". All the data bought and paid for with taxpayer funding is sold to the highest bidding campaign contributor, as lobby fodder.

How does this relate to gold? When the entire economy is reduced to a political playground, gold is one of the few remaining refuges for those not in the lobbyist "game".

Need more evidence? Even Disney, that hallmark of broadcast virtue, has become the "official" POKER channel!

GoldiloxMarc Faber - He "Gets It"#1509951/11/07; 07:58:43


Several readers have written in telling me to check out what Dr. Marc Faber is saying lately. Not just because of what he has predicted in the past, but what he sees in our economic future. As Lew Rockwell headlines it, he sees "Irreparable Cracks in the Financial System." All of which explains why the time monks at are wondering "What does it means when the global financial system doesn't show up in linguistic modelspace in a meaningful way after this year?

Oh it gets even better (or worse, depending on whether your investment plans are similar to ours, or not). A number of readers wrote in something to the effect "Did you see the Pimm Fox interview on Bloomberg with Faber on Bloomberg? Farmland is his #1 investment choice! Holy smokes! You've been saying that for two years!" Well, sure. Bright minds, same data should equal similar conclusions, right? Don't be so surprised. And yes, we were early, but when there's a runaway train coming at you, better a few years early than a second too late. Besides, since our strategic retreat to East Texas, we've had plenty of time to transition from corporately to famerly living and thinking - and a great supply of self-sufficiency goods abound.

Better than our plans and Faber's outlook? The Amish got there ahead of all of us, I note with much respect.


Maybe those who opine the land value of their gold holdings are seeing more clearly than others.

arbyhYou just woke up late.#1509961/11/07; 08:07:43

@ Goldendome

You just woke up late. Most educated Republicans, that were not heartless to begin with, woke up and rethought their political convictions somewhere during the debt increases, and the lack of Middle American concern of the Reagan administration.
The greed and disregard for country and average citizen has progressively gotten worse from that point. It had to become blatant and ugly for Republicans to rethink what they stood for. Tom Delay's systemic power brokering and lobby money funneling is all too clear in its pervasiveness and abuse.
The Republican Party no longer has anything for me. It is transparent that they are tool of corporate and banking interest. This (North, South, and Central) American Union hustle being done is not in America's interests, any more than NAFTA was.
There is a triangle of personnel transfer from industry / banking and military to government and the seats are still warm for their return with kudos. It is a closed system of power brokering and most everything else is eye wash. Middle American patriotism is taken for granted, played upon, and bought and sold wholesale by those that could care less about Middle America.

MKThe problem with socialist paradise#1509971/11/07; 09:43:32

My post had more to do with how the sweeping socialist revolution in Latin America will affect the economy and, by extension, the financial markets. My hope was to have a discussion along those lines. So I was surprised to see some of the socialist textbook recitals that followed.

But let's take a look at what the Chavez socialist revolution has thus far produced in Venezuela:

1. He closed down the nation's largest television station because it opposed his policies.

2. He wants to nationalize the rest of the press to make sure it doesn't undermine his socialist revolution.

3. Not wanting Morales, et al, to outdo him, he wants to nationalize the productive industries starting with oil. Mining, I should probably assume, is not far behind. He has also nationalized the utility industry (Can't have those leftist constituents complaining about the utility bill, can we?).

4. He is running enormous government deficits to support his social programs which have translated to massive inflation which affects everyone including most the constituents he purports to represent.

5. He has imposed exchange and price controls which have generated a black market in Venezuela he cannot hope to control

6. He has set the stage for a mass exodus of the Venezuelan productive sector for whom the biggest question has become "How soon can we get out of here?" Once the productive sector flees, who will be left to tax in support of Chavez's socialist paradise?

Is this the sort of society we should wish for? Is this what Latin America needs?

I do not normally involve myself in the political discussions here at the forum, but I've seen enough photos of the Last Great Communist, Fidel Castro, bear-hugging Chavez and Morales to put a scare in me. It is surprising how little has come out opposing and exposing this move to the collective, but when you consider that it was not that long ago that Castro was the toast of Manhattan, we shouldn't be surprised.

Socialists is that they tend to bite hard on the promises of the coming paradise on earth based on social and income equality without really peeping around the corner to see what that might mean. I could see it in some of the posts which followed mine last night. Socialism is always seen as the solution without regard to socialism as THE problem.

I have been asked many times about the socialist wave gripping, not just Latin America, but much of the world. What is the source of it? How did it get started?

In my view, we have always had the socialists with us; since the cave they have been whispering in ears -- and here is what they say: "Join with me. Give me the power by virture of our alliance to take some of the wealth of that overly successful hunter or farmer over there and distribute it among the rest of us. Give me the power and I will make justice. We will all benefit." In the end, it is this politician who benefits most and does nothing to achieve it but politic effectively. Nice work. Easy work. Beats the stuffing out of a day behind the plow. And it pays well. With benefits. (Like complete days off to watch two hour football games.) There are ramifications however.

The probem is that producers, who have to give up a large portion of their income to provide the paradise, might not have the same view of it as the beneficiaries. In the end, what happens is that the society ends up with a long and growing list of what we might call "paradise beneficiaries" and ever shrinking list of what we might call "paradise producers." At some point the society tips into social anarchy and collapse (with the Soviet Union serving as the best modern example) simply because the best of any given generation is either long gone, compromised, discouraged and/or marginalized.

The beneficiaries go hungry while the producers move their talents and abilities to friendlier climes. Unless of course, all avenues of escape are closed down for the producers. (Isn't that what the Berlin Wall was all about?) Then you have what amounts to another form of the maquila -- only this time it is the entire society which is the maquila with no hope of personal attainment -- a forced participation in the incipient collapse. That, my friends. in a nustshell is the road to serfdom (tyrrany) Frederich von Hayek famously described. I can predict with confidence that this will be the likely outcome in Venezuela -- the list of tyrannies above is just the warm-up for the headline act.

By the way, I recommend von Hayek's book. The Road to Serfdom, which is dedicated "To socialists everywhere." Another good book on this subject is Ayn Rand's "Atlas Shrugged" which still carries water though it celebrates its 50th anniversary this year. If you can only read one of the two, I would recommend Ayn Rand's book. It goes over the top at times -- exaggerates to make a point in the tradition of instructive literature -- but, it has changed many lives.

What does all this have to do with gold? Very simply, gold is the talisman for those who believe that the producers are losing, or might lose in their own society. It is the way for producers to save wealth and coalesce it for future use. This is why I believe gold to be the thinking man or woman's portfolio inclusion. I need not expand on that since it has been done here with great care and precision over a number of years by some very good posters.

GoldiloxSocialism vs Crony Capitalism#1509981/11/07; 11:17:21

@ MK,

I won't quibble with any of your systemic political fears, but let me suggest that the very same excesses as they continue in Crony capitalism are the fuel that ignites the fires of socialism.

Yes, Chavez shut down the alternative press, but how many alternative viewpoints were left by the Powell FCC's push to eliminate alternative viewpoint responsibilities and majority ownership rules regarding "public" broadcasting airwaves? For the last 30 years, middle-of-the-roadies have been labeled left-wing kooks by those who own the media - even while their bosses re-instituted Corporate Socialism (formerly called Facism) throughout the world.

How much "public" money was funneled off from public recovery funds in New Orleans just to feed the political Crony trough (the OMB says about 85%), not to mention the $400M MNF-clinton-Bush fund that has still not reached a single "refugee". We need not even talk about "earmarking" and lobbying, those Great CONgressional troughs. Or the ENRON funding of the PPT's Caribbean accounts, directed right from the White House in Ken Lay's many visits there, or the rebirth of the world's largest opium cartel in Afghanistan the moment that Ollie and the CIA boyz showed up to unseat the Taliban.

Chavez' rise power was fueled by resource contracts that paid Venezuela 1% royalties on their oil resources., leaving 99% of the revenues in the hands of the Globalist contractors. Venezuelans were not happy with that division when they saw that the Royal Dictators in Saudi Arabia get a full 15% of oil revenues as "royalties", not even counting all the "free" military aid to enhance their non-democratic leadership. It's not at all unlike Castro's rise, fueled by the US and Italian Mob takeover of Cuban tourism, sugar, and tobacco industries, which imported Haitian and Dominican labor and left the Cubans unemployed and starving.

Perhaps without the abuse of half a century of IMF "economic hitmen", and Oil Czars with their own police "contractors" to kidnap and torture dissidents, socialists would not gain the power that they do? People tend to gravitate toward any change they can perceive in a vaccuum of opportunity.

As I see it, the question is not about producers vs. beneficiaries, but more who controls political power and natural resources. As long as we continue to play the "Right of Kings" game in the capitalist world, we suffer the same abuses of serfdom that the socialists endure, and keep pointing fingers at each other instead of the bankster architects of both systems, who are the only real beneficiaries. Methinks that is essentially their plan.

Haven't seen any Aristotilian "benevolent Princes" on either side of the political fence, to tell the truth.

As McCanney quips, the greatest failure of our civilization is the inability to "control our leaders", and enforce reasonable principles of "stewardship", whether the system be democratic, socialist, totalitarian, religious monarchy - you name it.

GoldendomeFine-- Let's have the discussion. Politics mixes with Gold.#1509991/11/07; 11:19:24

As we can appreciate, there are subtle crossover points where philosophies cross or mix.
A government policy that purports to favor the many with benefits is viewed as Socialism and bad. A government policy that enables the few to benefit enormously --often because of social position, or with the assistance of the government-- is good? Independent initiative is certainly a good thing; government stealing the saved and earned purchasing power of the population through ever increasing debt directed toward favored (lobbying and influence buying) industry is not. Why is it worse to partially fill many pockets with a little, than to give all to a few well placed pockets?

As for "Atlas Shrugged"—I read it. Possibly written with appreciated influences of Fredrich Nietzhe's 1891 book "Thus Spake Zarathustra"; that became a handbook for many Germans after World War 1. – In particular, Adolf Hitler.

One thing impressive in both works: The heartless individualism promoted. With little or no regard as to the effects on others.

There are many sides to economic philosophy. Socialism can become communism; Capitalism can become Fascism, and blendings of all.

Probably, that is one reason why so many of us hold significant amounts of gold and silver, to stay, somewhat, away from governmental money, that we've grown skeptical of, along with the governments themselves.

GoldendomeBravo, Sir Goldilox#1510001/11/07; 12:23:23

Your discussion of Socialism vs. Crony Capitalism is a wonderful analysis. We are of one mind on these matters; I concur completely with your breakdown and the comparisons made on these issues.
USAGOLD / Centennial Precious Metals, Inc.Prudent investing... with a dash of excitement!#1510011/11/07; 12:30:58">Napoleon III gold coins
Federal_ReservesThe Plutocrats ignore public opinion#1510021/11/07; 12:34:25

The public wants out of IRAQ, wants an end to illegal immigration, and wants FAIR trade rather than the one-sided system we have now. Yet the congress and the administration do nothing. In fact they are doing the opposite, more troops to IRAQ, more illegals each day, and more one-sided trade agreements.

We live in an Orwellian dictatorship - plain and simple.

"The Ministry of Truth"

tejbearFederal_Reserves msg#: 151002#1510031/11/07; 12:42:09

You speak the truth.

"The Ministry of Truth"

Just ask any politician…

But just like in the book, stand up, ask questions, and you end up in a correction camp. Can this "situation" ever be fixed without bloodshed?

The Bear

mikalGold suppressed, oversold far enough to boomerang?#1510041/11/07; 12:59:26

You know that I am a big believer in market sentiment, when you can find reliable indicators. It has been much more predictive than the lines-only chartists and the pseudo-scientific Elliott Wave analysis which have myriads of interpretations. The real proof of Elliott's ineffectiveness can be summed up in its greatest practitioner and advocate whose initials are R.P. Enough said.
But all during the bull move, the most effective method, especially on the bottoms, have been the sentiment figures. In addition to the classic Midas sentiment one, there are three that have been very good. One is the Rydex PM which measures the inflow and ouflow of money in the share sector. Another is one I look at, the TFC Commodity percentage (this is very informal and unofficial, but effective) and what I consider the best, the Hulbert survey that measures the attitude of the Gold advisory letters.
Currently, all three are flashing extremely strong bullish signals. The Rydex continues to liquidate on an almost daily basis. The TFC is at its lowest amount of bulls since I have been following it over the past four years, and the latest Hulbert numbers were 25% exposure although my guess is that it is even lower now. Mix these three together and I believe that we are about to witness a real panic into the precious metals area but especially in the smaller exploration companies. Chuck"
Mikal-- I couldn't agree more, but that's only one small negative in this sometimes volatile market.
And that's why I try to post as many diverse opinions from the world and web as I can find. At Bill Murphy's (subscription) Lemetropolecafe site, this daily Midas Report has true variety as well. A representative of the best gold news, analysis and opinion as can be found.

Liberty HeadHeartless Individualism?#1510051/11/07; 13:21:12

Only a socialist would use a phrase like that!

Best Wishes

mikal"Coalitions" of the chilling #1510061/11/07; 13:48:27

Warning on higher risk of oil price shock By Gillian Tett in London | Wed Jan 10, 6:15 PM ET | Snippit: "There is no doubt that the long-term trend [in climate patterns] is dire...we cannot put our heads in the sand. We have a responsibility to act now," Mr Aigrain said. His comments came as Swiss Re, Citigroup, Marsh & McLennan and the World Economic Forum, which holds the annual Davos conference, launched an annual report on the risks confronting the global economy.
The report concludes that of the 23 core risks confronting the world identified by the team in previous years, 12 had increased during the past year. These include the danger of an oil price shock, a dollar slump, a credit bubble collapse, a Chinese hard economic landing, water shortages, natural catastrophes, terrorism, Middle East instability and the proliferation of weapons of mass destruction. Six other risks in the list - including elements such as earthquake risk - are perceived to be unchanged.
None of the risks had reduced in scale, the group said, although there was disagreement among analysts about the direction of dangers such as the chance of chronic disease in the developed world. This rising risk profile suggested, the group argued, that there was now an urgent need for governments and businesses to develop more co-ordinated and proactive tools for handling risks, and the issue is set to be a key theme for the WEF meeting in Davos this month.

One way to do this, the group suggested, would be for governments to create "country risk officers", or officials who are charged with analysing risks across a broad spectrum in the national interest. However, another key step would be to create flexible "coalitions of the willing", formed between countries around specific global risk issues.""
Mikal-- Did they leave anything off the list? There is certainly a witches brew of choices they can have.
Many risky imbalances were left off the list associated with payoff schemes, certain mostly unregulated derivatives and criminal consortiums, the stuff of which risks are born to begin with. And now their "cure" to make things better?

USAGOLD Daily Market ReportPage Update!#1510071/11/07; 14:32:41">
The Daily Gold Market Report has been updated.

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

THURSDAY Market Excerpts

January 11 (DowJones) -- Gold futures gave up early gains to finish near steady Thursday, backing down when oil sagged and the dollar recovered after the metals wereninitially underpinned by a weaker U.S. currency, analysts said.

The COMEX February gold contract rose 50 cents to settle at $613.90.

"There were several things going on," said Dan Vaught, futures analyst with A.G. Edwards. "There was some talk that President Bush's speech last night, in which he kind of warned Iran and Syria to quit interfering in Iraq, may have brought in some safe-haven buying, although that was probably not a really big factor."

More significantly, the metals were initially bolstered when the dollar fell against the British pound and euro after a surprise 25-basis-point rate hike by the Bank of England, taking the official bank rate to 5.25%, said Vaught and George Gero, vice president with RBC Capital Markets Global Futures.

The dollar later pared its gains after the European Central Bank left its interest rates unchanged and U.S. weekly jobless claims fell more than forecast, currency analysts said. The metals managed to hold up for a while despite this, as the energy markets pared early losses, said Vaught.

"The energies again turned lower, and that with the persistent firmness in the dollar, dragged gold down toward the end of the day," said Vaught. "In gold, it seems like you're seeing a real fight between bulls and bears," said Vaught. "The bulls are defending support in the $600 to $605 range, whereas the bears are defending the $615 to $620 range. It may mean we get stuck in a trading range."

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

GoldendomeSocialist#1510081/11/07; 14:36:09

Socialist? Gosh! Now? Possibly so. If so- I will accept it (not in your cynical note) but rather, in a spirit that has matured during the years of a growing cabal of corporate and government selfish self-interests. (No reflection upon you meant). I for one have reached a point where the worthiness of the act is often measured by its consequences for the entire group and not only for the particular agent involved. Possibly sir, if you are driven by your rights-bearing individualism without neither regard nor beneficence toward your fellow citizens you are jingoisticly a "compassionate conservative."
MKGoldendome#1510101/11/07; 14:41:46

Adolph Hitler was a socialist -- on the left of the political spectrum. Would you consider him more or less heartless than Ayn Rand? (Smile)
Goldendome(No Subject)#1510111/11/07; 15:00:59

Certainly more. There is no comparison.
Chris PowellGulf Arabs reconsider their currency pegs to the dollar#1510121/11/07; 15:03:36

By Will Rasmussen
Thursday, January 11, 2007

ABU DHABI -- Gulf Arab oil producers are reviewing currency pegs to the falling dollar and could decide as early as March whether to keep or change their exchange rate regime, the United Arab Emirates central bank said on Thursday.

Governors of the six Gulf central banks will meet in March in Saudi Arabia and may agree to switch to another currency or currency basket, Governor Sultan Nasser al-Suweidi said. They may decide leave the pegs as they are and any changes would have to be approved by Gulf Arab rulers, he said.

"We might come up with a decision that says we are OK and stick to the same (regime), or we could come to the conclusion that we need to change," Suweidi told Reuters in an interview.

It was the first acknowledgement that the Gulf might not stand by a currency regime designed to prepare for monetary union in 2010, although markets began speculating about a revaluation last year as the dollar fell around 10 percent against the euro.

However, achieving consensus will not be easy in a region that is squabbling over how and when to adopt a single currency. Oman dismissed any suggestion of a Gulf-wide revaluation.

"Oman has no intention of changing its peg, no intention of revaluing its currency," Central Bank Executive President Hamood Sangour al-Zadjali told Reuters by telephone from Muscat.

Suweidi's comments pushed up currencies across the world's top oil exporting region with the UAE dirham hitting a two-week high of 3.6720.

"It removes the assumption most of the market has held, that this (revaluation) couldn't happen before a single currency," said Steve Brice, regional head of research at Standard Chartered.

The six members of the Gulf Cooperation Council (GCC) -- UAE, Saudi Arabia, Kuwait, Qatar, Oman and Bahrain -- are working toward monetary union, although Oman plunged the project into crisis last month, saying it would not join in 2010.

"Changing the peg is a GCC decision. We went into it together. We will go out of it together," Suweidi said.

Suweidi said the governors could opt for more flexible exchange rates, instead of the fixed pegs now maintained by all states except Kuwait, which revalued its currency last year.

They may decide to peg to another currency or basket of currencies, he said, declining to comment on what currencies were being considered.

"Whether it should be fixed or fluctuating is one issue. Another is issue to change the currency of the peg," he said.

The dollar's slide last year is driving up the cost of imports in the region, where some countries, such as Kuwait, pay for half their imports in euros and yen.

"The main factor is (currency) values. You have to adjust sometimes in a fixed peg. Your (currency) could be overpriced or underpriced," said Suweidi, whose country will have highest inflation rate in the Gulf this year, according to a Reuters survey last month.

Kuwait, which allows its dinar to trade in a 3.5 percent band around a reference rate set in 2003, revalued the currency in May for the first time in 17 months, allowing a 1 percent appreciation against the dollar.

The move sparked a currency rally across the Gulf, as investors bet other countries, especially Saudi Arabia, would follow suit.

The Saudis moved to quash market speculation about a revaluation twice last year.

"But before this (Suweidi's) statement becomes credible. ... You will need to have some confirmation from other regional central banks, especially from the Saudis, that they are willing to abandon the dollar peg," Calyon economist Koceila Maames said in London.

Saudi Arabia accounts for about half the GCC's gross domestic product and 58 percent of oil production.

Sierra MadreMy two cents worth, since this is politics day at; 15:16:54

I think it's OK to allow political discussion here once in a while - not all the time, but once in a while can do no harm.

One of the big issues that the Globalists push is "open markets and privatization".

That is probably all for the best - when money is real money! As it is, we have to take into account that the world's money machine is largely the US Fed.

So, "open markets" with a fiat US dollar means countries are to buy stuff and pay with dollars, which they can only get by selling something to the world, for dollars, because only the US can create them, out of nothing.

So, "open markets" does not mean the same thing, at all, for the rest of the world, as it does for the US. Everyone else has to pay for the stuff that comes in through "open markets", with stuff that they must sell, for dollars, which are nothings.

The US on the other hand, gets stuff through "open markets" by handing over US dollar-nothings in payment.

Capitalism, based on a fiat money produced by one nation, cannot exist without real money. The money of Capitalism is REAL MONEY, not fiat. It wasn't the merchants that invented fiat, it was the bankers.

PRIVATIZATION. The US economic establishment urges nations everywhere, to PRIVATIZE, to pass productive enterprises from the control of government, to private hands. All well and good, in theory. Governments are lousy administrators, granted.

In practice, a privatization of a government enterprise requires enormous amount of dollars. Individuals who are citizens do not have these enormous amounts of dollars available. So - they FINANCE the deal through N.Y. through the likes of Goldman Sachs. A few clicks of the computer and Voila! - There's the newly created credit (i.e. money) to facilitate the privatization, created in minutes in NY.
No sweat!

End result: the government enterprise has passed out of government hands, into hands of local citizens who are citizens of the country where the privatization is taking place. BUT, these new owners are up to their ears in debt to the NY Bankers or a syndicate formed by them.

So who do you think now calls the shots? The new "owners" or the syndicate holding the debt?

The elementary common-sense rules of Capitalism do not apply when money is FIAT. Everything becomes a sort of Alice-in-Wonderland game, when money has no substance.

Keep that always in mind, all who favor Capitalism, because Capitalism is dead and gone as long as fiat is the world's money.


TownCrierSierra Madre, a question for clarification (and edification?)#1510141/11/07; 15:38:59

When you speak of the use of "real money", is BARTER transactions the scope of your meaning?



MineroThanks to Sierra for the Clarity#1510151/11/07; 15:46:22

My simple mind is only capable of seeing when a system is terrably flawed. I think that there was a time when TPTB still had a bit of integrity. They have always taken the golden egg from the goose, but they did not attempt to kill the goose. What we are seeing now is a mass extinction of the geese.
spikedogSocialism, Capitalism, Ayn Rand#1510161/11/07; 16:03:18

It seems as though some would welcome Socialism with open arms as a counterpoint to the "failed Capitalism experiment". This is despite the fact that Socialism in EVERY attempted mode has been an abject failure. And the reason that it consistently fails is that it purports to be charity for those who have less and is enforced at the point of a gun.

First off, the premise of a "failed Capitalism experiment" is incorrect. What passes for Capitalism in this day and age is anything but. Too much of success now depends on who you know and how much "pull" you have with your "Washington Man". Today, industries don't necessarily succeed because of superior ideas, effort or know how. And, conversely, industries do not now necessarily fail for lack of those qualities. This is NOT the paradigm of Capitalism. It may be Cronyism or Fascism perhaps, but not Capitalism.

There may be very few people on the face of this Earth who know what true Capitalism is. Very little commerce during the entire history of the world would fall into the Capitalism category. ANY time there are regulations for one business model or regulations against another business model, you do not have a free market and you do not have Capitalism. Elements in the Tax Codes, treaties, trade agreements, employment laws, et cetera ALL prevent pure Capitalism from existing. In fact, you would be hard pressed to find anyone currently alive is practicing pure Capitalism. That is, if they were not involved in a venture of a questionable nature (as most "civilized" people view it).

Second, Ayn Rand did NOT propose "heartless" individualism. What she did propose is "my best effort in exchange for your best effort". Nothing more, nothing less. You see, in Ayn's view of the world, the best, brightest, and hardest working SHOULD rise to the top by virtue of their effort. They should not be FORCED to share what they have earned. Now, if you choose not to share the fruits of your labors, then that calls into question your humanity – BUT that is a different subject. You cannot legislate the decency of a human being.

Third, what does this discussion have to do with gold? Like Ayn's proposition of equal exchange of effort, gold ensures that you cannot be cheated by the machinations of those outside the scope of your business dealings. As many have so eloquently stated on this forum, gold in physical form is nobody's obligation and as such, cannot be manipulated by those who wish to have all of benefits of success without being bothered to put forth the effort. Gold is money's best effort.

You cannot be a little bit socialist; it is like being a little bit pregnant. The only question is when is the due date.

GoldendomeFiat is not inherent with capitalism#1510171/11/07; 16:12:32

Sierra: You make good points and expand upon some that we have been kicking around today. Your point about capitalism co-existing with a fiat currency and its effects is most apropos. Under original conditions, capitalism took place under fully competitive conditions. A fiat currency created out of thin air at will, has critically changed that premise. Fiat currency has empowered unfairly those closest to government and the source of the counterfeiting, while penalizing those downstream. Little wonder that governments and people around the world (myself included) are getting fed up with this situation. Thank you for pointing that out.
GoldendomeSocialism--It's not just for people anymore.#1510181/11/07; 16:55:20

For a moment, think of U.S. business enterprises as individuals. There is a myriad of industries, companies, individuals, corporations, partnerships, etc. in this country. Thousands upon thousands of different entities all struggling for individual survival. Is it less socialistic for government to favor with easy or free money some of those business entities than to favor individual people? We can not think of socialism strictly as a relationship between the government and it's people. Socialism in a world of fiat dollars is also a relationship between the government and it's business entities.
mikalSubliminal tv entertainment#1510191/11/07; 17:13:46

New 24 Season Showcases Mass Terror, Concentration Camps
Propaganda Keeps Being Pushed by FOX
Steve Watson - - Tuesday, January 9, 2007
"The new season of 24, that is to air this coming weekend, is to prepare the American people for the idea of concentration camps, detention centers and the rounding up of people in times of crisis.
The opener depicts an America besieged by mass terrorist attacks and public paranoia, with 11 cities, including New York, Atlanta, San Antonio and L.A., having been attacked in the space of a few weeks. Watch it...

A Fox news broadcast pumps out on street corners and at bus stops from TV screens as the terrified public are urged to report anyone they consider suspicious.
A brown skinned man is refused entry onto a bus as the people around him look at him as if he is some kind of space alien.
Cut to the Oval Office were there is an argument going on between the National Security Advisor and the President's aides about the morality and constitutional implications of using concentration camps/detention centers in America.
The National Security Advisor, who the President's aides are surprised to find is opposed to this, states "These places that you keep building, they are nothing more than concentration camps."
Note how the Security Advisor states that camps are already built and keep being built. She goes on to state that a "revised plan" on behalf of the White House "justifies locking up every American who prays towards Mecca."
As she continues to argue against locking up innocent Americans, the high ranking official played by Peter MacNicol (perhaps the head of Homeland Security, it is unclear from the clip) abruptly stops her and yells "security has its price." The aides, including the Attorney General then attempt to persuade the dubious President that in a "time of war" it is legal to suspend Habeas Corpus.
The second clip features a private conversation between the Security Advisor and MacNicol's character in which he tells her that he has "second guessed" the President by not rescinding an earlier secret order for the National Guard to prepare to set up detention facilities at sports arenas in L.A., Detroit and Philadelphia. Watch it...

The Security Advisor questions "what happens when innocent people get caught up in this net?" To which MacNicol's character states "Like I said before, security has its price, just get used to it."
Although 24 has routinely depicted scenes of detainee torture, this latest plot-line is the first time that it has broached the issue of the detention of American citizens in a time of crisis.
At a time when legislation such as The Military Commissions Act is setting the precedent for the detention of American citizens, 24 serves as the perfect dose of fear-mongering propaganda to get the people to accept such attacks upon the fabric of freedom and to "just get used to it".
Thus when real attacks are carried out some will not be alarmed to see detention camps being used because they have already witnessed the scenario played out before their very eyes.
Laura Ingraham has previously stated that the average American's love of the show is a referendum for such tough tactics against anyone considered to be with "Al Qaeda" whether they be American citizens or not. Watch it...

Following the news first given wide attention by this website, that Halliburton subsidiary Kellogg, Brown and Root had been awarded a $385 million dollar contract by Homeland Security to construct the very detention and processing facilities referred to in this episode of 24, the Alternet website put together an alarming report that collated all the latest information on plans to initiate internment of political subversives and Muslims after the next major terror attack in the U.S.
Yesterday we reported one such detention camp in Taylor Texas that currently holds hundreds of rebuffed asylum seekers who legally entered the country, half of which are children swept up in midnight raids. These things are all over the country and are prime locations for the enforced transfer of American citizens during a time of national emergency.
Furthermore, one of the last acts of Congress before Christmas was to send President Bush a bill that establishes a $38 million program of National Park Service grants to preserve Japanese POW internment camps in Hawaii, California, Arizona, Arkansas, Colorado, Wyoming, Utah and Idaho."

AllanC(No Subject)#1510201/11/07; 17:27:06


Nothing like a good political discussion to get me on my keyboard.

Your words:

"You see, in Ayn's view of the world, the best, brightest, and hardest working SHOULD rise to the top by virtue of their effort."


"my best effort in exchange for your best effort"

That's something of a non sequitur, don't you think? Is it really a fair exchange?

The brightest are not necessarily the most hard working. I think the main disagreement between the capitalists and socialists is this point. Does the fact that one is the brightest warrant the accumulation of immense wealth for an individual and his progeny? Will the accumulation this wealth ($billions) in a few hands really benefit mankind, or will it be squandered by future generations.

How do you quantify what benefits should accrue to the most gifted of us? Let the markets determine that? And what if those markets are rigged to begin with? US bankers who create fiat money at will are the ultimate deciders of how the world's resources are allocated. When these conditions no longer persist, then perhaps the markets will be able to perform as they were meant to. A world currency not subject to the whims of any small group of individuals, perhaps gold? A novel idea. In order for true capitalism and markets to function, the appearance of inequalities in access to capital must forever be banished.

Thank you

spikedogAllanC#1510211/11/07; 18:29:11

Thank you for your reply. Some points for clarification as I do not believe we are miles apart on this.

Point 1: The best, brightest and hardest working are NOT necessarily the same group of people and are often three distinct groups of people. I agree, Ms. brightest may not work as hard as Mr. hardest working or Ms. best; and Ms. best may not be as bright as Ms. brightest. So, Mr. hardest working's best effort CAN be exchanged for Ms. brightest's best effort and so on. Will some people fall short on this scale in one or all areas? The key here is effort – there ain't no such thing as a free lunch. Will someone's best effort be worth more than someone else's best effort – most likely, which leads us to…..

Point 2: For pure Capitalism to work, the exchange of best effort for best effort MUST take place in the free market. Everyone must be free to decide what something is or isn't worth. In this atmosphere, even gold becomes subject to market forces (eg, the man in the desert dying of thirst does not think gold is very valuable compared to a jug of water). If the market is controlled or influenced in any way, then pure Capitalism cannot work and one or all of our heroes will not be compensated appropriately and that takes us to……

Point 3: Is there a possibility that in a purely free market environment that some few people will wind up with all the marbles? Yes, but I do not believe it is the probability as we have in our current environment. Because in a free market, someone will usually come up with a way to do "IT" cheaper, or make improvements to "IT", or make "IT" altogether obsolete, thereby knocking Mr. Bigshot off of his pedestal. Only protectionist legislation can keep Mr. Bigshot from these balancing forces – see "Washington Man".

Lastly, your words:

"In order for true capitalism and markets to function, the appearance of inequalities in access to capital must forever be banished."

I wonder, banished by whom? We cannot have governments do this – they have a long and storied past of manipulation. I do not know if pure Capitalism is possible in our world at present. It seems that too few are willing to "take up arms" in the free market arena or better yet, walk away from this madness to Galt's Gulch and wait for whole mess to cave in upon itself. Sometimes I wonder if many of our best, brightest and hardest working have not already done that.

Thoreauly@ Sierra Madre re: globalization and money#1510221/11/07; 18:43:09

I heartily agree with you that without real money, globalization is a fraud, as it turns free trade into managed trade, the benefits of which are at best ephemeral.

Bottom line: You cannot have free trade, properly speaking, without free trade in the goods that have conventionally been used as media of exchange (most notably gold), and the sooner the corruption of this trade ends, the better.

Conversely, the longer it lasts, the worse it will be (again, see link).

GeneSpikedog#1510231/11/07; 19:01:13

Hear,hear! Anyone who thinks this country is still a capitalist republic is pretty blind &/or doesn't know what socialism is. We've degenerated into a country of degenerates who believe that, anyone & everyone who has achieved a modicum of success,owes them a handout. The work ethic is lost amongst the inner city minorities. They believe they cannot achieve success in anything because the socialist, liberal democrats have told them for years that they cannot, and must depend on the gov't for support.
Now, if you object to the redistribution of wealth, you are accused of being a bigot. well, where from here???

GoldiloxHitler a leftist?#1510241/11/07; 19:55:27

@ MK,

I have to disagree with this statement, as does most of official history. Hitler and Mussolini were the antithesis of leftist thought, although quite socialist.

The leftist communists were Hitler's greatest fear, as they mandated the elimination of the corporate/banking/cronyism that was the very foundation of the Fascist states.

Not to suggest that either the Communist ultra-left or the Fascist ultra-right was a particularly successful experiment.

Perhaps the lesson to take from those experiments is that Big Government itself is not a healthy development, whether it leans to the left or to the right, as it continually bleeds the populace just to sustain itself. Worse yet, when it leans one direction or the other by the virtue its own political girth, it tends to look for external solutions to internal problems - i.e. wars of conquest and subjugation. When even those solutions are not effective, internal subjugation is typically the next step.

The result is that an institution founded for the "good of the citizens" oversteps that mandate and at some point expects the people to be sacrificed for the "good of the government".

Those who understand that gold ownership represents "independent wealth" should expect that the proponents of statism (left or right) will denigrate PM ownership as long as they can get away with it.

ToolieGene, my friend...#1510251/11/07; 20:08:03

I've a different take on "wealth redistribution". You see from my point of view the pottery barn rule applies; you break it, you buy it.

As long as the government takes it upon itself to regulate the economy by raising interest rates, flooding the labor market with immigrants or other means, whenever the economy runs the risk of "overheating", don't those on the receiving end of the fed's medicine have a claim based on the damages done to them?

One of the suggestions that I heard in the Presidents speech last night was that ALL Iraqis will be issued shares in the countries’ oil. It's an idea that makes sense to me. Maybe we should apply the same logic here in the states. Iraq's chief export is oil, in the US our chief export is dollars. It seems to me that dollar is as much the property (curse) of the American people as oil is the property of the Iraqi people. It follows that if it's a good thing to give Iraqis a shares of oil, then it's a good thing to give Americans shares of dollars.

Of course that is only a partial payment for the animating contest of freedom that has been stolen from so many in this country, inner city minorities included.

Liberty HeadGoldendome#1510261/11/07; 20:43:43

" I for one have reached a point where the worthiness of the act is often measured by its consequences for the entire group... "

Except for self-defense, acts that include fraud or the use of force can only have a net negative consequence for the "entire group"!
Most every act of gov't is based on fraud, the use of force and has nothing to do with true self-defense.

When the beliefs of the "entire group" are at odds with this truism, it is a good time to accumulate gold.

Best Wishes

GonlyoldFiat has some good#1510271/11/07; 20:49:40

Contrary to the general flow of opinions against fiat money, I dare offer an opposing opinion. I can see a public good, albeit naively purest, for fiat money.

If a country had to ensure the protection of the people from an attack by the hordes, I would want a money system that allowed the fastest way possible to finance the build up of war machinery. Printing fiat money, as far as I know, is the only method of quickly "raising" cash. Waiting for the people to dig up gold would not be acceptable. Waiting to sell natural resources would not be acceptable.

Does that mean that I support the banks? No, because large countries, like the USA, can have their own fiat money (hint: greenbacks). So far as I understand the issue, I support US notes. Responsibly used, US fiat money can be an advantage for the people.

Does this mean that if we had US fiat money, our leaders would have such purest intentions as to protect the people? Idealistically yes. However, I suspect that riding along with those purist intentions, would be so much corrupt baggage that it would overwhelm the good. The challenge would be to be able to separate the corrupt from the good but that's another post.

Another issue is to prevent against control of the money by any one group or agency. Presently, the banks control the fiat. I believe that they also control the gold. But it would be difficult for an outside group or agency to control a country's fiat money, like US notes. And what would happen if every country had their own fiat? Hm-m-m...
Now I think that that would be a new world order but not in the sense that most people use those words.

Awaiting your rocks or roses.

David LinkleyGonlyold#1510281/11/07; 20:54:31

Your exception is no different than the road paved to hell with good intentions. Study history and then try and defend fiat in any way shape or form.
GonlyoldHistory?#1510291/11/07; 21:16:12

When I look at history, I see a country' physical coins/money as fiat.
jiNegative capitalism#1510301/11/07; 21:27:07

Since the medium of exchange is created from debt you can call it negative capitalism. When things don't add up, check your premise.
jiThe Law#1510311/11/07; 21:41:16

The Law by Frederick Bastiat When a reviewer wishes to give special recognition to a book, he predicts that it will still be read "a hundred years from now." The Law, first published as a pamphlet in June, 1850, is already more than a hundred years old. And because its truths are eternal, it will still be read when another century has passed.

Frederic Bastiat (1801-1850) was a French economist, statesman, and author. He did most of his writing during the years just before - and immediately following -- the Revolution of February 1848. This was the period when France was rapidly turning to complete socialism. As a Deputy to the Legislative Assembly, Mr. Bastiat was studying and explaining each socialist fallacy as it appeared. And he explained how socialism must inevitably degenerate into communism. But most of his countrymen chose to ignore his logic.

The Law is here presented again because the same situation exists in America today as in the France of 1848. The same socialist-communist ideas and plans that were then adopted in France are now sweeping America. The explanations and arguments then advanced against socialism by Mr. Bastiat are -- word for word -- equally valid today. His ideas deserve a serious hearing.

Chris PowellA favorite quotation from Bastiat#1510321/11/07; 21:49:03

"Government is the great fiction by which everybody tries to live at the expense of everybody else."
Flatliner@Paradise Producers & Beneficiaries#1510331/11/07; 21:52:53

MK, It is good to inquire on this topic even though it stirs the emotions of those that follow. The simple of it is - emotion leads to action – the recent posts attest to this.

Is there a line to be drawn, or do we just flow with the currents only to be left bruised and beaten by the rocks?

It seems to me that politics, regardless to whether it's democratic, republican, socialistic, capitalistic or whatever, politics is all about lawmaking. Those in the position to influence the laws, will play out their objectives. We, as individuals, can scream bloody murder or sing the most glorious praise based on how the laws may benefit or limit our quality of life. But, ultimately, one way or another, we will be subject to laws and all the implications contained therein.

Thus, it is more than reasonable to think like an investor and enquire as to how the changing legal system in South America will affect our markets and finances. I too wonder and expect the changing dynamics in South America will spread north. And with changes, I'm leaning more towards activism more then socialism. I'm looking for the new congress to take advantage of this activism, but I'm unsure how it will all play out with regards to the laws that they push through.

Your reference to Paradise Producers and Paradise Beneficiaries is probably square on the money. There is clearly a discrepancy and the world sees it.

As an investor and a detective of the gold trail, I am expecting worldwide nationalization of key performing resources. I'm expecting nations will use these key resources to give strength to their currencies rather than simply taking the profit. I would also expect that once the resources are nationalized, there will be a stronger push to make those resources available in the world markets in order for them to reap the benefits. There may even be a push to sell more into the markets in order to reap the benefit – today - rather than waiting for the actual real physical product to come to market. It's more debt, but of a different obligation.

The conclusion "gold is the talisman for those who believe that the producers are losing, or might lose in their own society. It is the way for producers to save wealth and coalesce it for future use. This is why I believe gold to be the thinking man or woman's portfolio inclusion." I am in agreement with these words, yet wonder about time. When one saves wealth, it is purposely to span time. How much time will it take? How long will we have to wait before putting that capital back to work in an environment that will allow for building a long-term business?

mikal@Gonylgold, Slingshot#1510341/11/07; 21:54:26

@Gonylgold- Bravo! Excellent thoughts. You note that among your concerns with fiat are the controlling monopolies inside and outside national borders. This is precisely why gold stands in opposition to the cheap statists' secret as Greenspan said. Bankers themselves are not averse these days to some choice criticisms of the system, especially in light of their responsibility to cover their arse(CYA) as best you can!
I agree much can be said for notes and a national bank as constitutionally mandated, Congressionally authorized and Treasury issued etc. Where we are today is probably much closer to a world bank because of the majority foreign owership of the Federal Reserve Bank and the vulnerable situation they have managed to place the US and it's allies and by extension, the entire world. (Foreign ownership of central banks and plans for world domination preceded the formation of the Fed by several centuries. Bill Clinton's mentor and professor Carroll Quigley wrote a book on this Tragedy and Hope). The Tavistock Institute, MK Ultra, NSA, FBI and the CIA are some of the primary tools of enforcement in the war against freedom.
Gold reserves are being built up in advance of and in preperation for something, we don't know exactly what, but we have an excellent(easily recognizable) rough outline based upon the work of Mike Kosares, Trail Guide, Randy(TC), Marketalk, Chris Powell and posters such as yourself.
Slingshot-- Thanks for your comments last night.
Reinforces the case for gold and personal security!

mikalA single common denominator...#1510351/11/07; 22:48:19

identifies the common Tavistock strategy- the use of drugs. The infamous MK Ultra program of the CIA...resulted in several deaths."
-Eustace Mullins from The World Order - Our Secret Rulers
On communism:
"The Communist Party, The Party of the Peasants and Workers, exterminated the peasants and enslaved the workers...Because of this need for capital, the farmer is especially vulnerable to the World Order's manipulation of interest rates, which is bankrupting him. Just as in the Soviet Union, in the early 1930's, when Stalin ordered the kulaks to give up their small plots of land tolive and work on the collective farms, the American small farmer faces the same type of extermination- being forced to give up his small plot of land to become a hired hand for the big agricultural soviets or trusts. The Brookings Institution and other foundations[tax exempt]originated the monetary programs implemented by the Federal Reserve System to destroy the American farmer, a replay of the Soviet tragedy in Russia, with the one proviso that the farmer will be allowed to survive if he becomes a slave worker of the giant trusts.
Once the citizen becomes aware of the true role of the foundations, he can understand the high interest rates, high taxes, the destruction of the family, the degradation of the churches into forums for revolution, the subversion of the universities into CIA cesspools of drug addiction, and the halls of government into sewers of international espionage and intrigue. The American citizen can now understand why every agent of the federal government is against him; the alphabet agencies, the FBI, IRS, CIA and BATF must make war on the citizen in order to carry out the programs of the foundations.
We have seen the close interlocking of the foundations with international banks and corporations, all stemming from the Peabody Fud of 1865, and the War Industries Board of Bernard Baruch in World War I. The founadtions are in direct violation of their charters, which commit them to do "charitable" work, because they make no grants which are not part of a political goal...
Not only is this tax fraud, because the foundations are granted tax exemption solely to do charitable work, but it is criminal syndicalism, conspiracy to commit offenses against the United States of America, Constitutional Law 213, Corpus Juris Secundum 16."

mikalCorrection to typo#1510361/11/07; 22:55:10

Peabody Fud of 1865 = Peabody Fund of 1865
GonlyoldThe Law by Frederick Bastiat#1510371/11/07; 23:02:22

One thing F.B. cautioned against is the supposed almightyness of government leaders. Leaders try to convince the public that their leadership is indispensable to the people' general welfare. I submit that if our leaders took an extended vacation to South America, the people would have put in place another administration better than the one that left.
GonlyoldBravo#1510381/11/07; 23:06:07

Yeeaaa Eustace! Hip hip hurray for Eustace!
Sierra MadreTOWNCRIER: you asked me what I mean by "real money".#1510391/11/07; 23:19:04

Sorry to answer you so late - I only now saw your message.

By real money I mean money that is either precious metal, or a claim to precious metal. Obviously, a "claim" that is generally recognized as valid and effective!

Trade using real money can be considered as an extension or more efficient form of barter, yes. In barter, we deal with exchanging many different things for many different things. An unwieldy process. With money, the barter process exchanges one thing (or two things) for many things, by common agreement. The one or two standard things used for exchange were gold and silver coins, or claims on gold and silver. But it was in essence, I consider, a form of barter.

I should mention that in international trade in the 19th Century, little gold really moved between countries. Imports were paid, to a very great extent, by Exports. Gold was only used to even up imbalances, which had, necessarily, to be minimal.

Antal Fekete insists - and I agree with him - that an economy working EXCLUSIVELY with gold and silver coins or claims against such coins, would be very severely hampered. Commerce for centuries used Bills of Exchange as a temporary and self-extinguishing means of exchange, with no ill effects. There is a LOT of debate on this because Von Mises, Fekete says, did not comprehend the function of Bills of Exchange and deplored them. (Among a couple of other errors in Von Mises's thinking. A great man but, we are all subject to making mistakes.)

Frankly, I do not wish to argue about Bills of Exchange, which gets some theorists hot under the collar. I'd rather debate whether Martians have three eyes or two!

I consider real money as part of the material (not spiritual!) foundation of industrial civilization or Capitalism, and since we have no real money in the world, and no prospect of ever again having such real money, then industrial civilization, its foundation gone, is only running on momentum and is going to - fall apart.

"Nothing so sharpens the mind, as the prospect of imminent death." Samuel Johnson. (Or words to that effect, anyway.)

Good night, all!


GeneToolie#1510401/11/07; 23:26:30

Sorry, I was not refering to Iraq.I was just lamenting about the loss of character in our young people due to the need of instant gratification instilled by our television & hollywood networks. I have the opinion that if Hollywood persevers at the current rate, we can kiss our country goodbye.Of course, they won't like it when it comes, but it will be too late for them, also!
GeneGoldilox 151024#1510411/11/07; 23:47:11

Your paragraphs #4&5: I couldn't agree with you more. Where do you think we are at this point? Current world developments are not too encouraging.
GoldiloxWhere are we now?#1510421/12/07; 00:09:53

@ Gene,

I'm not a fatalist that believes all is fore-planned, but there is so much evidence that certain factions seem to prefer chaos to cement their positions of power, that it cannot be totally discounted.

The PTB infrastructure is beginning to feel the backlash of their cold-war strategy of "destablization". For decades they have been arming "revolutionary" factions in third-world locations, but we're seeing those gubmint trained "freedom fighters", as Reagan called them, start to figure out who most impedes their freedom.

As Will Smith's character said in Independence Day, "OOPS!"

I think Sinclair sees a similar risk on the economic front. All the currency traders that learned how to kick a third-world currency when they're down, are licking their chops at the weakness of the world's reserve currency!

When I look at put-call margins, I see some serious bets on the potential for the sawbuck to receive an old-fashioned country butt-whooppin'.

Paulson's Pirates will hold them off for a while, but even he can't stop the tide.

TopazBond:Dollar..#1510431/12/07; 07:54:07

..will bear watching today imo as that little down-tell on the Dollar chart might get magnified.
The composite Bond Dollar has been behaving up to date but double softness could see the beginnings of a rout.

A Dollar held in Bulk (Bond) must either appreciate via the Bond "price" OR DX to maintain it's purchasing power parity. If it doesn't do a OR b, ...??

GoldiloxTexas congressman seeks presidency#1510441/12/07; 08:03:00


HOUSTON - Rep. Ron Paul (news, bio, voting record), the iconoclastic, nine-term lawmaker from southeast Texas, took the first step Thursday toward a second, quixotic presidential bid -- this time as a Republican.

Paul filed papers in Texas to create a presidential exploratory committee that will allow him to raise money. In 1988, Paul was the Libertarian nominee for president and received more than 400,000 votes.

Kent Snyder, the chairman of Paul's exploratory committee and a former staffer on Paul's Libertarian campaign, said the congressman knows he's a long shot.

"There's no question that it's an uphill battle, and that Dr. Paul is an underdog," Snyder said. "But we think it's well worth doing and we'll let the voters decide."

Paul limits his view of the role of the federal government to those duties laid out in the Constitution. As a result, he sometimes casts votes at odds with his constituents and other Republicans.

He was one of a handful of Republicans to vote in 2002 against giving President Bush the authority to use military force in Iraq, contending that only Congress had the power to declare war. At times, he has voted against funds for the military.

Paul bills himself as "The Taxpayers' Best Friend," and is routinely ranked either first or second in the House by the National Taxpayers Union, a national group advocating low taxes and limited government.


The last "real" conservative!

Thoreauly"Laser-induced explosion of gold nanoparticles"#1510451/12/07; 08:59:09

Aims: This article explores the laser-induced explosion of absorbing nanoparticles in selective nanophotothermolysis of cancer. Methods: This is realized through fast overheating of a strongly absorbing target during the time of a short laser pulse when the influence of heat diffusion is minimal. Results: On the basis of simple energy balance, it is found that the threshold laser fluence for thermal explosion of different gold nanoparticles is in the range of 25–40 mJ/cm2. Conclusion: Explosion of nanoparticles may be accompanied by optical plasma, generation of shock waves with supersonic expansion and particle fragmentation with fragments of high kinetic energy, all of which can contribute to the killing of cancer cells.
Peculium AurumLegal Tender or Not#1510461/12/07; 09:00:31

Ever think of doing something this like this? I have.
I though about paying for a car this way and wondering,
what should I base my tax on.
1. The Face value of a Gold coin.
2. The USA official price $42 a ounce.
3. The price I paid for a coin.
4. The going rate for a coin on E-BAY.
5. The spot price of gold.
6. The future price of gold.

Alleged Tax Evaders Allowed to Present Evidence on Gold Coin Usage

A U.S. district court has allowed two individuals charged with tax evasion to present evidence that they used gold coins at their face value to reduce taxes believing they were not violating the law, but won't allow them to argue that their belief was correct or that they had a right to exclude the coins' fair market value from income.
Citations: United States v. Alexander Loglia et al.; No. 2:05-cr-00121
Date: Jan. 5, 2007




This matter comes before the Court on the Government's Motion in Limine to Preclude Defense Based Upon Payment in Gold & Silver. (#488.) The Court has considered the Motion, the pleadings on file, and oral arguments on behalf of the parties. IT IS HEREBY ORDERED that the Government's Motion is granted in part and denied in part.


On May 29, 2003, Internal Revenue Service ("IRS") agents executed search warrants at various business locations used by Defendant David Kahre ("Kahre"). As a result of that search, a federal grand jury returned an indictment against multiple individuals, including Kahre. The Government charged Kahre with two counts of attempting to Evade or Defeat Tax in violation of 26 U.S.C. § 7201, and one count of Conspiracy to Attempt to Evade or Defeat Tax. On April 4, 2006, the United States issued a superseding indictment charging Kahre with additional counts and crimes. Defendant Alexander Loglia ("Loglia") has also been charged in this case. Although Loglia's and Kahre's cases are on separate dockets (05-cr-00121 and 05-cr-00120), Loglia has filed a Notice of Joinder in Kahre's opposition to the Government's currently pending motion in limine. The following chart summarizes the counts against Loglia and Kahre (collectively "Defendants"):
Defendant Counts Charge
Kahre 1-2, 10-13 26 USC § 7201 -- Attempt to
Evade or Defeat Tax

3 18 USC § 371 -- Conspiracy to
Attempt to Evade or Defeat Tax

7 18 USC § 1343 -- Wire Fraud
Loglia 147-150, 152-156 26 USC § 7201 -- Attempt to
Evade or Defeat Tax

151 26 USC § 7206(1) -- Filing a
False Tax Return

187 18 USC § 371 -- Conspiracy to
Attempt to Evade or Defeat Tax

The Government alleges that Kahre wilfully attempted to evade paying $524,374 in taxes by concealing and attempting to conceal assets from the IRS, and that Laglia wilfully attempted to evade paying over $100,000 in taxes. The Government also claims that Defendants failed to file tax returns for several years. Specifically, the Government argues that Defendants used gold and silver coins to evade paying taxes. According to Defendants, they used the coins to conduct business in conjunction with their "boycott of the Federal Reserve System." (#83, 2.) Defendants used these coins to transact all business. The coins' fair market value exceeds their face value. Defendants paid and received wages in gold and silver in exchange for goods and services. Based on the coins' face value, the compensation received is below the dollar threshold requirement to withhold and/or pay income taxes. Defendants reported all income and transactions at the face value amount, failing to report the difference as income, which reduced their respective tax liabilities. Ninth Circuit precedent clearly requires a taxpayer to report the coins' face value as income. Although Defendants admit they used gold and silver coins to lower or reduce their tax liability, they argue that "using and contracting to use gold and silver coins at face value as a medium of exchange is a lawful exercise of a statutory right." Id. Defendants plan to argue at trial that they were not guilty because they honestly thought they were entitled to report income at the coins' lower face value, and that the law supports such a belief.


The Government has filed a motion in limine asking the Court to preclude Defendants from using any defense or evidence based upon a theory that using gold and silver coins allows Defendants to report only the coins' face value as income. For the reasons discussed below, the Court grants in part and denies in part the Government's motion.

I. Defendants' "Good Faith Belief"

The Government asks the Court to exclude any "defense based upon payment in gold and silver" because the Ninth Circuit has repeatedly held that the amount realized in a transaction using gold and silver coins is the fair market value, and not the coins' face value. See, e.g., Cordner v. United States, 671 F.2d 367, 368- 69 (9th Cir. 1982) (holding that when gold coins have a fair market value in excess of face value, taxpayers must report income at the fair market value); see also Cal. Federal Life Ins. Co. v. Comm'r, 680 F.2d 85, 86-87 (9th Cir. 1982) (same). Although the Government correctly argues that such income is taxable, to convict Defendants for the crimes alleged, the Government must establish that Defendants "willfully" failed to pay the required taxes. As discussed below, the Court will not allow Defendants to present any arguments that the law allows them to exclude from income the coins' fair market values or to otherwise argue what the relevant tax law holds. Defendants may only present a good faith defense that they believed they could report the income as they did for the limited purpose of negating the relevant mens rea requirement, but Defendants cannot argue that their belief was actually correct.

A. Willfulness

Tax evasion and failure to file tax returns require that the offender act "willfully." I.R.C. §§ 7201-07. The Government must establish willfulness to support a conviction under 26 U.S.C. § 7201. United States v. Bishop, 291 F.3d 1100, 1106 (9th Cir. 2002) (citing United States v. Bishop, 412 U.S. 346, 361 (1973)). Willfulness is also an element of conspiracy to defraud the United States. Id. (quoting United States v. Crooks, 804 F.2d 1441, 1448 (9th Cir. 1986)).

In Cheek v. United States, which involved a prosecution under sections 7201 and 7203, the Supreme Court held that "[w]illfulness, as construed by our prior decisions in criminal tax cases, requires the Government to prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty." 498 U.S. 192, 201 (1991)). Cheek also held that a taxpayer who violates the tax law based on good faith ignorance of the law or an erroneous belief that he was not violating the tax code does not act "willfully," even if the taxpayer's belief is objectively unreasonable:

f the Government proves actual knowledge of the pertinent legal duty, the prosecution, without more, has satisfied the knowledge component of the willfulness requirement. But carrying this burden requires negating a defendant's claim of ignorance of the law or a claim that because of a misunderstanding of the law, he had a good-faith belief that he was not violating any of the provisions of the tax laws. This is so because one cannot be aware that the law imposes a duty upon him and yet be ignorant of it, misunderstand the law, or believe that the duty does not exist. In the end, the issue is whether, based on all the evidence, the Government has proved that the defendant was aware of the duty at issue, which cannot be true if the jury credits a good-faith misunderstanding and belief submission, whether or not the claimed belief or misunderstanding is objectively reasonable.

Id. at 202. Thus, after Cheek, a defendant can no longer be convicted of tax fraud if the factfinder believes the defendant's ignorance surrounding the tax law, even if the defendant's beliefs are unreasonable. The Supreme Court further reasoned that ignorance to the law could be a defense in the criminal tax context "largely due to the complexity of the tax laws" where "[t]he proliferation of statutes and regulations has sometimes made it difficult for the average citizen to know and comprehend the extent of the duties and obligations imposed by the tax laws." Id. at 199-200. However, although a defendant may raise a good faith belief or mistake defense to a jury, he may not argue that the income tax law is unconstitutional or that the tax law supports his erroneous beliefs. Id. at 206. In Cheek the Supreme Court stated: "We thus hold that in a case like this, a defendant's views about the validity of the tax statutes are irrelevant to the issue of willfulness, need not be heard by the jury, and if they are, an instruction to disregard them would be proper." Id.
In the present case, Defendants' claims may not be objectively reasonable; nonetheless, pursuant to the above analysis, Defendants may argue that they violated the tax law based on a good faith ignorance of the law or an erroneous belief that the law did not require Defendants to include as income the coins' fair market value. However, because the law clearly holds that the coins' fair market value was reportable income, they cannot argue that the law did not require them to report the difference between the coins' face and fair market values or that the tax law is somehow unconstitutional. Accordingly, the Court will not allow Defendants to present any arguments that the law allows them to exclude from income the coins' fair market values or to otherwise argue what the relevant tax law holds. Defendants may only present a good faith defense that they believed they could report the income as they did for the limited purpose of negating the relevant mens rea requirement, but Defendants cannot argue that their belief was actually correct.


The Court will allow Defendants to introduce evidence that they used gold coins to reduce taxes only to the extent such evidence relates to their good faith belief that they were not violating the law. The Court will not allow Defendants to argue or present evidence that their belief is legally correct or that Defendants had a legal right to exclude the coins' value from income. The Government will have the opportunity to present evidence that Defendants' belief was not in good faith. The Government need not adduce direct proof of willfulness -- the jury may infer intent from the defendants' acts. United States v. Spinelli, 443 F.2d 2, 2-3 (9th Cir. 1971) (citing Norwitt v. United States, 195 F.2d 127, 132-133 (9th Cir. 1952)). Therefore, IT IS HEREBY ORDERED that the Government's Motion in Limine (#488) is granted in part and denied in part.

DATED this 5th day of January, 2007.
Robert C. Jones
united States District Judge

ThoreaulyWhy Ron Paul doesn't stand a chance#1510471/12/07; 09:03:32

It's because the world consists mostly of "ordinary people."
MKThoreauly - Wakefield article#1510481/12/07; 10:01:39

Excellent article.

Most of the gold investors I know do process the information and remain rational - difficult as that might be. And that makes all the difference. I am in a unique position in that I can pass along that insight about many gold investors based on direct experience. You also see it here at the forum where posters deal with complex information and reasoning regularly. Wakefield and Dorn's observations are part of what I was driving at yesterday when I said that gold was the "thinking man or woman's" portfolio inclusion.

GoldiloxInteresting PoG action today#1510491/12/07; 10:32:21

Running up into the weekend close . . .
KnallgoldCommodities#1510501/12/07; 10:41:11

Commodities are still in crash mode-in that light,I declare Gold has decoupled from commodities as well!I do think this is quite relevant.
Federal_ReservesMany New Yorkers' choice: Food or rent?#1510511/12/07; 10:55:32

Wall Street's multimillion-dollar year-end bonuses shine an unflattering light on the city's wealth gap.

Food or rent? That is the daily choice faced by about 1.2 million of New York's 8.2 million people. Faced with that choice, most pay rent and rely on emergency or charity food to survive, poverty activists say.

"It's a struggle," said 53-year-old Pierre Simmons, who has a part-time job, as he wrapped up a bagel from his soup kitchen lunch for later. "I have a job, but the cost of living is so high it makes it hard to buy food."

Hunger is not unique to New York. More than 12 million U.S. households -- or 35 million Americans -- struggled with hunger in 2005, according to the federal government.

But of all places in the United States, New York has perhaps the most visible income gap.

While the city's Wall Street bankers are due to collect nearly $24 billion in bonuses this year, more than one-fifth of New Yorkers are battling to make ends meet below the national poverty line of about $10,000 a year for an individual.

Only the top tier is making it in the USA, the lower and middle class are enslaved by the upper class. "There's class warfare, all right," Mr. Buffett said, "but it's my class, the rich class, that's making war, and we're winning." ...This is an impressive crowd - the haves and the have-mores," quipped the George Bush. "Some people call you the elites; I call you my base." ...

GoldiloxFood lines?#1510521/12/07; 11:12:36

@ Federal_Reserves,

We see long food lines in California, as well, another high-rent district.

That may lend a new twist to the idea that the social battle is producers vs. beneficiaries.

I suspect there are more "producers" in the food lines than Wall St. paper "beneficiaries".

Perhaps that describes the problem. The "beneficiaries" of Crony Capitalism are the banksters and paper gamblers, while "producers" are being driven off-shore. Once the "producers" in foreign locales see the inequity of how their resources and labor are being exploited, they turn to over-simplified solutions like Chavez offers.

Wall St is probably Chavez' greatest political ally, despite PTB alleged assassination attempts and manipulation of their elections.

968Timothy F Geithner: Developments in the global economy and implications for the United States#1510531/12/07; 11:23:48

Remarks by Mr Timothy F Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, at the Council on Foreign Relations' C Peter McColough Roundtable Series on International Economics, New York, 11 January 2007.

"One final note on the financial system. The global financial system is in the process of very dramatic change. The changes of even just the last five years are extraordinary, in terms of the size, and strength, and scope of the major global firms, the role of private leveraged funds, the extent of risk transfer and the increase in the size of the derivatives market, the change in the structure of the credit market, the increase in and changes in the pattern of cross border financial flows.
These changes, and others, seem likely to have made the financial system both more effective in moving capital to its most productive use and more stable and resilient over time. But they do not, of course, mean the end of systemic risk in financial markets. They could in some circumstances work to magnify rather than mitigate stress. Central banks, supervisors and those running the major private financial institutions need to continue to work to ensure that what Jerry Corrigan calls the "shock absorbers" in the financial system - capital and liquidity and the operational infrastructure - are sufficiently strong and robust to withstand economic and financial conditions more adverse than we have seen in the recent past."

mikalGoldman stacks#1510541/12/07; 11:25:06

Goldman Sachs: The Most Powerful Investment Bank in the World - Goldman Sachs: Too Big? Too Powerful? Too Bad! by Neil Weinberg - Forbes - 1/12/07
"Risky? Quite apart from the risk that some crisis in a currency or stock or credit swap market could cause a meltdown on Wall Street, there is the risk that the public could turn against securities firms, especially those that so visibly wear multiple hats. Suppose a crack in the market jolts a few million investors. Might some ambitious politician or a pack of plaintiff attorneys go after financial institutions? Then what had been seen as seamless synergy could look more like seamy self-dealing. Contemplate the fall from grace of superstar analyst Jack Grubman of Salomon Smith Barney or the rise of just-elected New York Governor Eliot Spitzer.

Goldman boasts that managing conflicts of interest is one of its skills, but some backlash has erupted."

Mikal- Part of a multi-media special on the firm, this long article can be summarized in by heading - Too big? Too powerful? Too Bad! Still, intrigue combines with self-aggrandizement as the firm's history is woven with quotes from the chairman and some financial teasers such a sthe snippit above. Will the limelight make a difference or is this just CYA time for Forbes?

geGold - Oil Ratio Breakout#1510551/12/07; 11:31:05$gold:$wtic,uu[h,a]wallyyay[pb52][vc60][iua12,26,9!la60,130,45]

The chart formation (inverse head & shoulders) suggests the minimum price objective as 14-15. At an oil price of 50, this would indicate a gold price of 750.
mikal"Notoriously opaque" CDO's#1510561/12/07; 11:31:12

Collateralised debt issuance jumps By Gillian Tett and Paul J Davies in London - Financial Times
Published: January 11 2007 22:14 | Last updated: January 11 2007 22:14
The issuance of securities linked to debt portfolio funds, known as collateralised debt obligations, swelled dramatically last year – a trend that could be helping to prolong the easy conditions in credit markets.
Some estimates of activity in this notoriously opaque sector suggest that more than $2,500bn of were issued last year. That was six times higher than in 2004, according to the Bank for International Settlements.

The rest of this article is for subscribers only

Flatliner@968#1510571/12/07; 11:38:46

Who would have thought that the economy might need ‘shock absorbers’?

Wow. Does the price action of the last hour represent discoverable liquidity? ... I wonder what we'll find in the news over the next 48 hours.

Thoreauly@ MK#1510581/12/07; 11:55:45

Yes, I certainly see the connection and would make a distinction between the ordinary mind and the "gold mind" accordingly, as an understanding of what real money is and why definitely separates the latter from the herd.

It also helps one avoid "The Madness of Crowds" (see link)

Sierra MadreWAR premium, again?#1510591/12/07; 12:23:08

Has President Bush's speech revitalized the fears of an expanding war and thus moved the gold price so strongly today?
968@ Flatliner#1510601/12/07; 12:26:17

Here is a nice read.
Author is Jacques Rueff, the man who shipped UST-gold to France.

Flatliner@968#1510611/12/07; 12:39:05

Mises is never a coffee break read. But, as winter settles in, a comfortable read may be in order for the cool weekend.
GoldendomeSierra, Possibly so. We would think someone would notice.#1510621/12/07; 12:39:58

The entire situation regarding Gold and Oil price has been curious.
The way that Oil has been falling would make us think that oil is once again plentiful and that tensions have eased in the Middle East. Gold and Silver had accompanied Oil down in price until recently when gold leveled off and has stubbornly held above $600, while oil continued to fall.

Many of the articles that have been appearing recently, have ignored the fact that the U.S. has moved a second naval air craft carrier task force into the Persian Gulf area, despite the fact that we haven't been fully utilizing the first. Possibly, as you point out Sierra, the markets are noticing the buildup along with the more strident language directed at Syria and Iran, and the on the perimeter actions now being taken to irritate the Iranians.

CamelFood lines#1510631/12/07; 12:57:35

Next time anyone is up at 5:30 AM swing by your local
Manpower office and take a look at all the parasites begging for a job.You might even go inside, sit next to them . Won't hurt for a day.

GoldendomeJim Willy sees upturn again for Gold in 2007#1510641/12/07; 13:12:52

In a recent article Jim Willy makes the point that despite government statistics that suggest that the U.S. economy is perking along just fine, in reality, it is not. Jim's belief is that the Fed will be forced to cut rates sometime in 2007, as the decline in the housing bubble finance economy becomes increasingly evident, and spills over into declines in other areas of our consumer driven economy. Willy believes that the Fed will stay too long at too high of rates and thus be forced to cut deeper than desired, in their attempt to revitalize the fast flagging economy. The reason for the delay--to bolster the dollar and to promote sales of the U.S. government's major retail item--the bond. Jim sees that when the economy noticeably begins to retreat, the dollar will once again continue on its downward chart anticipating the rate cuts. He feels the Fed will then begin cutting rates, but as late as possible in an attempt to keep the dollar from falling even faster and to continue peddling their number one product...bonds. (Goldendome: I think that we will have to wait and see. Would the Fed sacrifice the economy to save the dollar? Even raising rates? Probably not, their bosses--congress--would be applying the enormous pressure they would in turn be receiving from constituents.) Willy believes that if the dollar fades, bonds fall, and rates are cut, gold will rise significantly in price, probably in the second half of 2007. (Goldendome: And this doesn't even include what may happen in the oil and war patch...the Middle East.)
Clint HCamel msg#: 151063)#1510651/12/07; 13:31:14

Camel says, Food lines
Next time anyone is up at 5:30 AM swing by your local
Manpower office and take a look at all the parasites begging for a job.

Clint - Anyone who has the drive to be at a location at 5:30 Am on the hopes of getting some work is not a parasite.
It's the ones that sit at home in front of the TV and wait for someone to send the check who are parasites.

I may have missed your point.

TopazGold.#1510661/12/07; 14:40:15

Confirmation again today that Gold is NOT a commodity, and Gold is NOT a currency ...whereby it reacted to the double softness in Bond/Dollar (see previous) AND creamed the alts to boot (see link).
Interestingly, Euro and Swissie have been softening in Gold markedly of late ...Eurozone stress? Maybe.

CometoseCOT#1510671/12/07; 15:01:00

THe latest numbers on Commercial activity re Futures positions

Silver Net long for the week 1450 contracts

Copper commercials were net short 900 contracts

Gold commercials were net long 30,000 contracts ......

GoldendomeJob seekers...Then..Ta, ta ......1955#1510681/12/07; 15:05:05

Yeah, Clint, showing up at manpower, 5:30 in the morning would on its surface, show some initiative toward getting a job. Camel doesn't really explain the full context of what was irritating him regarding the situation, unless he felt they just showed up for the free donuts and coffee. However, as you imply, it's good to show a little compassion -- who knows, someday you may even need some yourself.

Ok--Time for a little trip down memory lane, with a short economics film from 1955.
(See the posted URL)
Remember? Gold was $35/oz; it was illegal for U.S. citizens to own any in the United States.
We were still in the Bretton Woods agreement with the gold exchange standard (I believe that's what it was called.) Usually, only one member of the family had to work to make a decent living for the family. Bras were pointy…headlights were round. The U.S. was the vast industrial power of the world. As you will see in the film, we were deathly afraid of those devil socialists and communists…This was of course when we still operated on a capitalistic system ourselves, before we chucked gold from any relationship to the dollar and joined the socialist camp as an operational mode.

Keep in mind please, that today, 6% of households earn roughly 1/3 of all income. How large a share of all income did the top earners garner in 1955? See what income level put one into that top 6% in 1955. Think about what kind of income level today would put one into the top 6%. Also note, the seemingly miniscule difference between the top 6% and everyone else.

The film is black and white, so the kids may get bored. The facilities, automobiles, and furnishing are hopelessly outdated. But in terms of economic progress, where do we stand today in relation to 1955?

contrarianParasites?#1510691/12/07; 16:23:54

Camel--please explain--how are people waiting in line at 5:30 am looking for a job parasites? (unless you mean illegal aliens, that is).
Thoreauly@ Goldendome#1510701/12/07; 16:27:38

Great video. As I said in an email to some friends:

Along with being incredibly quaint (a sign of those Leave-It-To-Beaver times), this short video speaks volumes about the effects of the final corruption of money that was to come sixteen years later, when Nixon cravenly "closed the gold window." For on account of that closure -- i.e., on account of money being completely detached from its millennia-old connection to goods used as a media of exchange -- the financial economy now dwarfs the productive economy that it was supposed to serve, with the result that a relative few are making vast fortunes "out of nothing," while the multitudes are being robbed blind by the inflation upon which the financial economy depends.

TopazGold:Silver.#1510711/12/07; 16:52:54

It's a rare occurrence where we see such a lack of action in the ratio ...the RSI is slowly working lower however and methinks a defining positive Silver move re: Gold is but a few days away.

We'll see!

White HillsCamel#1510721/12/07; 17:45:03

Couldn't agree more. Also go by your local Home Depot, Lowes and you will see people standing on street corners trying to get work. I expect we will see more as the economy worsens. You can't believe any of the Government statistics on unemployment at 4.5% as it is much higher. I don't really have an answer for it but it could be better if you took all the illegals out of the work force. The people who always seem to know everything will say that is impossible but that is not backed up by history and facts. In the depression years President Hoover did it(1935) and in 1954 President Eisenhower did it. In both instances it was to make room for American workers. No matter which side you are on it is tough to see people who want to work not be able to get a job that can allow them to make a living. White Hills
USAGOLD Daily Market ReportPage Update!#1510731/12/07; 19:11:00">
The Daily Gold Market Report has been updated.

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

FRIDAY Market Excerpts

January 12 (Reuters, MarketWatch, DowJones) -- U.S. gold futures rallied to end up more than 2 percent on Friday as the dollar fell and oil rebounded, more than recovered from last week's decline, helped by buying by funds and short covering before the U.S. Martin Luther King Day holiday.

The benchmark February COMEX gold contract was up $13.00 at $626.90, traded in a wide range of $610.70 to $628.80.

"The metals in general have been able to move higher this week despite further weakness in energy and a stronger dollar," said David Rinehimer, director of commodities research at Citigroup Global Markets. Rinehimer said precious metals had been gaining momentum throughout the week, as prices moved above levels that triggered technical buying. "We've seen some improvement of demand, particularly in the gold market, as some lower prices appeared to attract stronger buying interest," said Rinehimer.

George Gero, senior vice president at RBC Capital Markets, attributed gold's surge to fund buying, buy-stops and short covering before a long weekend. New short positions from the past two weeks and a good open interest were also helping the markets, Gero added.

Oil prices bounced back from a 19-month low on worries that producer group OPEC would deepen its supply cuts to stem a 15 percent slide since the start of the year. U.S. crude oil futures ended more than a dollar higher on Friday, ending a string of four straight losing sessions.

Gold is generally seen as a hedge against oil-led inflation, and it usually moves in the opposite direction of the dollar.

New York precious metals markets will be closed on Monday for Martin Luther King Jr.'s birthday. Trading will resume as usual on Tuesday.

Gold futures climbed as traders scrambled to make their moves ahead of a three-day holiday weekend.

"What we are witnessing, with the strong advance today in gold, is similar to what we have seen each time the U.S. market is closing: two world views on gold," said Ned Schmidt, editor of the Value View Gold Report.

"U.S. traders are in 'la-la land' and are bearish on gold and bullish on paper," he said.

By contrast, the "rest of the world, which is bigger than U.S., is bullish on gold and bearish on the U.S. dollar," he said, adding that "the entire world knows that the dollar is going down in value, oil is long-term short [in] supply and that gold should rise in value."

During the course of the day, several analysts also cited the stronger tone in grains and commodities generally as spilling over into gold and silver. Corn has been limit-up after a bullish monthly report from the U.S. Dept of Agriculture.

"We're higher in the energies and much higher in the grains - two inflationary indicators," said Patrick Lafferty, CTA with Fox Investments, a division of Man Financial.

The strength in grains has helped prompt more buying interest in commodities generally, said Stephen Platt, analyst with Archer Financial Services.

"Everyone was talking about the CRB and commodities being out of favor (lately)," he said. "But with this grain report, it's brought in some renewed interest, with corn the driver. Gold and silver, in particular, are being helped now."

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

GoldiloxStreetside labor#1510741/12/07; 19:35:52

@ White Hills,

Maybe it's a geographic anomaly, but I have yet to see any non-Latinos (black or white) lining up at the home improvement stores looking for grunt work. That doesn't necessarily mean we won't ever see that, but for now, it still pays less than flipping burgers and requires substantially better physical fitness.

A quick check of the B(L)S numbers supports your suspicion - just read the addendum on "underutilized workers" and those"no longer seeking employment". Adding these to the official total brings it well into the double digit range.

The bean-counters have NO clue whether these folks have really ceased looking for employment. It's a classification bucket that one enters automatically when Unemployment Insurance runs dry.

CamelBlood for gas#1510751/12/07; 19:47:15

If you can't find work as a temporary , the next stop is the blood bank. No coffee and donuts Thats a delightful experiance, strapped down on a table with 100 other people having a machine suck your blood. Gold for oil ...... blood for gas.Things haven't changed much in 40 years. They are all still packed and overflowing. Was in a bar the other evening and a snippy bartender with a chip on her shoulder was giving me a hard time...... have sold more blood that she has scotch.
GoldiloxZimbabwe: Gold Mining Falls to 'Pathetic Levels'#1510761/12/07; 20:07:46


T is no secret that the Zimbabwean mining industry has been shrinking over the past six years and has not witnessed any significant new investment other than in the platinum and diamonds sectors. The gold industry has been particularly affected with production having fallen from a high of 29 tonnes per annum at its peak to the current 12 tonnes expected to have been produced in 2006.

Why has the gold sector contracted so dramatically when the platinum sector has been expanding? Recent press and company market briefings indicate that the two current platinum producers, Zimplats and Mimosa, have systematically increased production and new investments over the past six years and will continue to do so in the near future. A third producer, Unki Platinum, under Anglo has committed and started its capital investment to bring another mine into production in the next few years. This is in direct contrast to the Zimbabwean mining industry in general and the mining sector in particular.

The answer is very simple. The platinum industry enjoys a fiscal and monetary regime far superior to any other sector of the Zimbabwe economy. The platinum industry is allowed to retain 100% of its foreign currency earnings offshore, and only liquidates into the Zimbabwe dollar as and when it so wishes.

The mining industry is a capital-intensive industry and typically it takes a long time before any profits can be realised. Most of the capital required in this industry is forex-based as most of the items are imported. In addition, most of the consumables in the industry are imported and typically, up to 75% of a mine's input costs including capital are imported.

It is a known fact that although gold producers operate in an environment of high capital requirements, long lead times to production, high recurring foreign exchange requirements, they have been subjected to the worst monetary regime of any other exporter in the country.

Indeed, the anomaly whereby gold producers enjoyed only 40% retention of their earnings in US dollar, whilst the majority of others enjoy 70%, whilst simultaneously requiring high foreign exchange retentions to sustain and grow operations, has contributed to the fall of production and new investment in the gold industry.

Until August 2006, gold producers were required to surrender 60% of their forex earnings to the government at a sub-economic exchange rate. The 40% forex retention was hardly enough to take care of working capital requirements, leaving virtually nothing for critical capital such as exploration, equipment, etc.

What is the typical cost of mining gold in Zimbabwe? No two mines have the same cost profile. For simplicity, one can take two typical examples which are an open pit, shallow to medium depth ore body, heap leach operation (category one) and an underground deep, narrow ore body with a long strike that uses standard crushing, milling and leaching technology (category two). These costs have also been exaggerated because of the overvalued currency to some extent, but essentially represents the typical costs of a gold miner in Zimbabwe. Table I shows data for the two typical example.

One may ask, if the costs of gold production are so high, how gold mines have survived over the years when gold prices have been below US$400 per ounce. The answer is simple; when prices are high, most mines undertake their long-term capital investment and when prices are low, capital expenditure is brought to a minimum.

Based on the above figures, one can easily determine the forex retention level required by gold producers to maintain and grow operations at different gold prices and table II shows the retention levels required.

Therefore, based on these numbers, the operational retention as a percent of revenue needs to be between 51% and 68% for category one and between 46% and 61% for category 2. The capital retention as a percent of revenue needs to be between 19% and 25% for category one and between 25% and 32% for category 2.

The total retention to ensure the continued operation and increased exploration and development of the mines is thus between 70% and 93 % for both categories of mines. Therefore even at the higher gold prices, a retention of at least 70% is required. These figures include a percent for return on capital and management fees of between 4% and 5%.

Over the years when gold producers have been allowed to retain only 40% of their forex earnings, it stands to reason that no capital expenditure has taken place. No new exploration, development ramp up and equipment have been done by gold miners. They have been preoccupied with just survival to worry about replacement let alone expansion capital.

What the authorities do not realise is that whatever capital a miner does not do today, he will have to do it in future. You cannot reap where you did not sow. In order to maintain production, a miner must replace what he mines today through exploration and development and equipment has to be renewed at appropriate times. To increase production, a miner must carry out additional exploration and investment in new equipment.

In October last year, gold producers were summoned to a meeting with the governor of the RBZ and the Minister of Mines. The governor berated gold producers for not having increased production despite the retention having been increased from 40% to 75% (and then down to 67,5% later) since August 2006. The miners responded that it was impossible to see the effects of the increased retention in such a short period of time as policy changes in the mining industry take a minimum of 24 months to take effect.


As much as the West decries the growth of South American taxation and more restrictve ownership rules, they are far from the burden described here. Oh, what trouble a failing currency brings with it.

TopazLT PoG.#1510771/13/07; 06:26:23

Rummaging through a few old bookmarks, came across this Long-Term alt PoG Chart (with the Currency missing) and began reflecting over the last several years.
Remember Y2K? Those who bought Gold (for many different reasons) during the run-up to the millennium (sp?) roll-over surely couldn't have guessed what lay in store for PoG ...not caused by any Date bug but through global fundamental awareness.
I hope those who bought and held back then are now smugly sitting back with that "I told you so" look smeared right across their faces.
Not that it was all beer and skittles during 2001 as PoG continued to languish sub-300, but vindication was ours ...and continues to be.
The other thing that leaps out of the chart is our current rangebound predicament.
I suppose if we took a linear approach we'd conclude this holding pattern might last for (say) 18 more mth's.
Not gonna happen imo. Iap, my 17in screen, given the chart perameters, will scarcely contain the next leg up.
We'll see!

frosty 1Mike hoy nails it...#1510781/13/07; 08:05:30

After reading Mikes latest,(why we do what we do),I believe this man is dead on.
The only part that I think he is miscalculating, is the part about interest rates.
When the buck starts slipping in earnest,as the fed lops full half points in succesion,to revive the economy via the housing sector, I believe there is no way that this will play out over years.
This I believe will happen in months ...3 or so, before stabilizing the buck with 20% rates.At that time,you are an owner of property,or you are a renter for the next 20 to 30 years.This time the ability to lower the rates will not be in our hands,but the hands of our masters.
The hot money will fly to happier hunting grounds ,just as American businesses have betrayed the american people, by relocating manufacturing overseas,the wealthy will come to find the turnip(American consumer) wanting of juice.
You want to talk about Bennidict Arnolds ,these are the guys who should be labeled and scorned as the unpatriotics. Its about JOBS stupid!!
No good jobs...No more America,as we have known it.
Ah... the greed of the boomers strikes again.Voting in thier corrupt polititians to make thier sneeky trade ageements,to enrich themselves.This time they have screwed the very fabric of America and many future generations.
End rant..sorry

mikalNo bones about BOE and rates#1510791/13/07; 09:52:21,,5-2544596,00.html

Rates Panic Hits Borrowers and Lenders - Business - Times Online | Rebecca O'Conner
Stampede is on to secure fixed deals
Homebuyers will have to tighten belts
Mikal- This situation in England reflects the US (and other developed nations) housing and borrowing industries in
major ways.
The way it ties in with bond market and rate trends overall
is not merely symbolic but a symptom of chronic, lasting degeneration and dissipation.
The only thing "opaque" about the thickening smoke these days is just which fire is the hotter...

DruidMy fingers are crossed.....#1510801/13/07; 10:31:21

"House Contrarian Ron Paul Mulls White House Bid. Nearly two decades after he was the Libertarian Party's nominee for president, maverick Texas Republican Rep. Ron Paul is weighing another White House bid -- this time for the GOP nod in 2008.

Paul on Thursday filed paperwork with the Texas Secretary of State establishing a nonprofit corporation, the Ron Paul 2008 Presidential Exploratory Committee, which can accept funds Paul can use to "test the waters" for a full-fledged bid.

Should he decide to forge ahead with a campaign, Paul would file paperwork with the Federal Election Commission (FEC). Paul intends to elaborate on his intentions in a couple of weeks, said Kent Snyder, who is chairing Paul's exploratory effort.

Paul is well-known on Capitol Hill for his frequent lone "no" votes on many spending bills and other legislation, much of which wins overwhelming support among both Republicans and Democrats alike."

Druid: Finally, a real choice. A good way to affect public policy is to inform and educate. This Site's archive would be an incredible resource for informing the good Congressman on the "FreeGold" concept which could go a long way in adding to his various policy stands.

mikal@Druid#1510811/13/07; 12:22:47

That's a great idea. I wouldn't think he'd be
without gold but reading here should be a quick study
for him and compel him to buy more if he hasn't already.
I'm sure he doesn't expect to get very far with his campaign
other than to educate especially as a counterpoint
to so much phonyness and hypocrisy touted as "positions" on issues by other Republican(and Democrat) candidates.
And then he could even help stretch the dimensions of the
current "box" that limits the issues and reverses priorities.

mikal(No Subject)#1510821/13/07; 12:38:10

Housing market pain not revealed by stats
Home sellers are crying but the data doesn't seem to reflect their woes.
By Les Christie, staff writer
January 11 2007: 6:09 PM EST - Excerpts:
"But the main factor, she says, is that many consumers - and a high percentage of real estate agents, the majority of whom have been in the industry less than five years - got used to operating in a bubble. "Most agents and many sellers haven't seen a normal market," Branton says.
Expectations also come into play."

"Another factor may be problems with the statistics themselves. Some of it is just not very accurate, according to Jonathan Miller, co-founder of Miller Samuels, a leading real estate appraiser based in Manhattan.
For example: "A significant portion of the OFHEO index," he says, "is based on refinanced mortgages, not [solely] on actual market transactions." With a refi, the price recorded is an appraised value rather than an actual market price and could have been higher (or lower) than what the property would have brought if had it been sold...

The one area of the industry that has produced truly negative numbers was new home sales. From peak to trough, the number of new homes sold will drop 23 percent from their annualized rate of about 1.3 million that was attained in mid-2005. That's according to Dave Seiders, chief economist with the National Association of Home Builders (NAHB)."
Mikal-- This short piece contains some great insights
on the real state of the US RE market. But leaving out
Numerous statistics are left out here and the space
required to cover all aspects of the market would fill a small book.
You will notice too the common, optimistic outlook calling for a recovery this year, as if we're in a sort of holiday. And nowhere is mention made of the extent of real "pain" to come.

mikalCharts showing traders positions#1510831/13/07; 12:54:52

A few annotated charts from Dan Norcini on gold and US$
mikalGold used successfully in fuel cell#1510841/13/07; 13:07:00

Scientists Discover Gold Clusters Stabilize Platinum Electrocatalysts For Use in Fuel Cells | JAN 12 2007 | Snippits: "Platinum is the most efficient electrocatalyst for accelerating chemical reactions in fuel cells for electric vehicles. In reactions during the stop-and-go driving of an electric car, however, the platinum dissolves, which reduces its efficiency as a catalyst. This is a major impediment for vehicle-application of fuel cells. Now, scientists at the U.S. Department of Energy's Brookhaven National Laboratory have overcome this problem. Under lab conditions that imitate the environment of a fuel cell, the researchers added gold clusters to the platinum electrocatalyst, which kept it intact during an accelerated stability test. This test is conducted under conditions similar to those encountered in stop-and-go driving in an electric car. The research is reported in the January 12, 2007, edition of the journal Science.

Brookhaven's Chemistry Department researchers Junliang Zhang, Kotaro Sasaki, and Radoslav Adzic, along with Eli Sutter from Brookhaven's Center for Functional Nanomaterials, authored the research paper. "Fuel cells are expected to become a major source of clean energy, with particularly important applications in transportation," said coauthor Radoslav Adzic. "Despite many advances, however, existing fuel-cell technology still has drawbacks, including loss of platinum cathode electrocatalysts, which can be as much as 45 percent over five days, as shown in our accelerated stability test under potential cycling conditions. Using a new technique that we developed to deposit gold atoms on platinum, our team was able to show promise in helping to resolve this problem. The next step is to duplicate results in real fuel cells."

A hydrogen-oxygen fuel cell converts hydrogen and oxygen into water and, as part of the process, produces electricity. Platinum electrocatalysts speed up oxidation and reduction reactions. Hydrogen is oxidized when electrons are released and hydrogen ions are formed; the released electrons supply current for an electric motor. Oxygen is reduced by gaining electrons, and in reaction with hydrogen ions, water, the only byproduct of a fuel cell reaction, is produced...

In the Brookhaven experiment, the platinum electrocatalyst remained stable with potential cycling between 0.6 and 1.1 volts in over 30,000 oxidation-reduction cycles, imitating the conditions of stop-and-go driving. "The gold clusters protected the platinum from being oxidized," Adzic said. "Our team's research raises promising possibilities for synthesizing improved platinum-based catalysts and for stabilizing platinum and platinum-group metals under cycling oxidation/reduction conditions."

Mikal-- An excellent synopsis on one of the promising new technologies. Gold has many commercial applications shown
by the many Gold Institute posts we have made here, but
this can only scratch the surface of products imagination can forge.

mikalCongress kicks off the new year in jackboots?#1510851/13/07; 14:12:37

Saturday, January 13, 2007 -

"I well remember my father telling me, "A bird in a cage is safe, but it is not free." That proverb pretty much summarizes H.R. 1. When fully implemented, the new law will create a federal police leviathan that will place the American people into a giant bird cage." - Constitution Party
Click Here For The Full Story

mikalRon Paul part of growing message#1510861/13/07; 14:47:53

The classic band Rush had a song in which they entreated "Net boy, net girl, send your impulse round the world. Let your fingers walk and talk and set you free." This underscores the post I just made about the obvious value of Paul's political campaign to
bring a broad cross-section of benefits to society
and open new fields of inquiry:
Ron Paul: Next President Of The USA?
Texas Congressman enjoys support across political spectrum, anti-war pro-freedom hero represents America's last hope
Paul Joseph Watson & Alex Jones
Prison Planet | January 12, 2007 | Excerpt:
"Ron Paul's office has confirmed reports that the Texas Congressman is set to run for the 2008 Presidency. Paul unites opposition to the war and the police state at home across the entire political spectrum and in contrast to the current gaggle of criminals running the White House, represents everything that America truly stands for. A gargantuan effort in support of Ron Paul needs to be mobilized now to prevent Americans from being hoodwinked once again into electing a different puppet of the same dark establishment in 2008. Paul first ran for President as the Libertarian candidate in 1988, receiving a massive 400,000 votes. He now commands the support of those all across the political spectrum, from libertarians through anti-war Democrats to real paleoconservative Republicans.
Paul has been in and out of Congress since the 70's and is universally hated by the Republican elite, who routinely back Democrats against him just to try and get him out of office. The former Vietnam flight surgeon is the perfect candidate for President and activists from every corner of every political persuasion should mobilize now in an attempt to help Paul shatter the power monopoly of the Republican and Democrat establishment who have worked together for decades to slit America's throat in the interests of power, greed, and ego - all working towards the realization of a new world order.

The Texan represents a dying breed in Congress, those who actually cast their votes in accordance with the Constitution and not at the discretion of lobbyists or the fear that the elite will tarnish their political careers if they don't continually support the establishment. As a result Ron Paul is the elite's worse nightmare, simply having him on the ticket itself will be a massive public relations blow, and that's why media organs will probably be activated to try and discredit him before 2008.

Paul was one of only a handful of Republicans to vote against the illegal invasion of Iraq, contenting rightly that the Constitution clearly states that only Congress can declare war. In bucking a trend, Paul was anti-war long before the majority of the country came around to a similar way of thinking following the catastrophe of the occupation.
While Democrats soft-peddle and cozy up to Bush, creating phony arguments about the level of troop presence in Iraq and ignoring the majority will of the country to bring the troops home immediately, Ron Paul's opposition to unnecessary wars of intervention has remained steadfast throughout his entire political career.

If a gargantuan effort is made from now until the end of 2008 to heighten Paul's media profile and forward him as America's last hope, he truly has a significant chance of giving Jeb Bush, Rudy Giuliani or whichever elitist puppet the Republicans choose to put forward a real run for their money.
At the very least it's a chance to attract attention to some serious issues and hold the establishment's feet to the fire. But with the favor of the political landscape continually swinging away from the scam repeatedly run by the Republicrats and Democans, we should really start off on a positive footing and consider the fact that Ron Paul, though still an underdog, has a real chance of becoming the next President.

According to the Associated Press, "Paul bills himself as "The Taxpayers' Best Friend," and is routinely ranked either first or second in the House by the National Taxpayers Union, a national group advocating low taxes and limited government."
On every single issue of national importance - borders, the war, limited government, U.S. sovereignty, tax and the federal reserve - Ron Paul stands for populist ideals that the country is screaming out for after seven years of hell under Bush, preceded by eight years of disgrace under Bill Clinton. Ron Paul voted against the Patriot Act, opposes the draft, advocates the abolition of the income tax, urges the re-introduction of the gold standard, and stands against initiatives to strip the U.S. of its sovereignty such as CAFTA and the FTAA. From reforming Marijuana laws to supporting an unregulated Internet, to supporting the 2nd amendment, Ron Paul hits home with keystone populist issues across the board."

tejbearRon Paul for President.#1510871/13/07; 17:31:11

Go Ron Paul go.

You have my vote.

Although the crash cannot be averted, the US will need wise leadership to traverse the rough road ahead.

Ron: There is no other politician who has you "vision". Go for it and debate with passion.

The Bear

arbyhRon Paul's Texas Straight Talk #1510881/13/07; 18:17:05

Ron Paul's Texas Straight Talk is a weekly news eletter that you can request. I have been reading it for over a year now and he is truly a bold voice of reason. I suggest you ask to get your eletter.
Here is the last one I got about non-citizen's trying to get SS benefits.

USAGOLD / Centennial Precious Metals, Inc.Check out the Buyers' Group special offer currently in the European shop.#1510891/13/07; 18:48:05

shop for gold coins
GoldiloxRussia scraps quotas on precious metals exports#1510901/13/07; 22:17:21§ion=business&col=


MOSCOW - Russia has scrapped export quotas on precious metals and diamonds, the Kremlin's press service said on Saturday.

President Vladimir Putin has signed a decree allowing unlimited exports of most uncut diamonds, platinum group metals and other precious metals and ores.

Exports will still require a licence from the Ministry of Economic Development and Trade, the Kremlin said in a statement.

Previously, the Russian government set long-term quotas for exports of precious metals and uncut diamonds.

These were already large enough to accommodate exports from Russia's biggest palladium and platinum miner, Norilsk Nickel GMKN.RTS, and state diamond trader Almazyuvelirexport so analysts have said their removal is unlikely to have a major impact.

The statement said the decree would become effective from the day of signing. It did not say exactly when Putin signed the document.

GoldiloxTrade in gold jumps in China#1510911/13/07; 22:21:35


Chinese investors traded enthusiastically in gold last year, according to the latest figures from the Shanghai Gold Exchange.

Information from the exchange shows that in 2006 turnover in the precious metal reached 194.75 billion yuan (25 billion U.S. dollars), up 82 percent over 2005.

A total of 1,250 tons of gold were traded, up 38 percent year on year.

Higher gold prices have boosted trading volumes.

Against a background of increasing international prices, domestic gold price rose from 130 yuan per gram at the beginning of 2006 to over 150 yuan per gram currently. In the middle of the year, prices peaked at 200 yuan per gram.

Since the Shanghai Gold Exchange started operation in Oct. 2002, gold trading has become one of the preferred investment options of Chinese citizens together with foreign exchange, stocks and futures.


Up 38%? If that's for equivalent 12 month timeframes, it's definitely substantial.

mikal(No Subject)#1510921/13/07; 23:29:50 Chavez: Venezuela, Iran Support Opec Output Cuts
Xinhua - January 14, 2007
Some random comments on the oil market as it has impacted
a portion of investment sentiment, mainly among specs and hedge funds. This situation will likely change this year if gold accelerates like it did leading to May 2006(or better) but for now we can speculate:
OPEC doesn't seem especially concerned that POO falls
further as they intend to 'wait and see" how prices will react to planned cuts before scheduling an 'emergency meeting'.
Oil looks to have carved a bottom amid
ME concerns, cold weather returning, the exhaustion of speculator and fund selling and the trend of investment
capital into commodities, seeking higher returns or just exiting overbought markets.
Some say China is back refilling their strategic reserve and no doubt others will do the same at the lowest prices,
or with any anticipation of an embargo or supply interruption.
Analysts such as Monty Guild and Jim Rogers
see Asian and S. American demand momentum offsetting recessionary weakness affecting the west.
Grains are always an exciting market and one can almost smell the fermentation as TPTB have been stomping
them under great pressure just as the global supply/demand
situation is very bullish. Ditto base metals which have not corrected as sharply and occupy a smaller 'weighting'
in the ever-changing CRB headliner.
China's Year of the GOLDEN pig is a 600 year
event/observance under their lunar cycle, as opposed to just pig (absent the GOLDEN) astrological year(Begins sometime in Feb. this year).

GoldiloxVenezuela, Iran to finance opposition to U.S.#1510931/14/07; 08:01:04


CARACAS, Venezuela (AP) -- Venezuela's Hugo Chavez and Iran's Mahmoud Ahmadinejad -- fiery anti-American leaders whose moves to extend their influence have alarmed Washington -- said Saturday they would help finance investment projects in other countries seeking to thwart U.S. domination.

The two countries had previously revealed plans for a joint $2 billion fund to finance investments in Venezuela and Iran, but the leaders said Saturday the money would also be used for projects in friendly countries throughout the developing world.

"It will permit us to underpin investments ... above all in those countries whose governments are making efforts to liberate themselves from the [U.S.] imperialist yoke," Chavez said.

"This fund, my brother," the Venezuelan president said, referring affectionately to Ahmadinejad, "will become a mechanism for liberation."

"Death to U.S. imperialism!" Chavez said.

Ahmadinejad, who is starting a tour of left-leaning countries in the region, called it a "very important" decision that would help promote "joint cooperation in third countries," especially in Latin America and Africa.

Iran and Venezuela are members of the Organization of Petroleum Exporting Countries, and Chavez said Saturday that they had agreed to back a further oil production cut in the cartel to stem a recent fall in crude prices.

"We know today there is too much crude in the market," Chavez said. "We have agreed to join our forces within OPEC ... to support a production cut and save the price of oil."

OPEC reduced output by 1.2 million barrels a day in November, then announced an additional cut of 500,000 barrels a day, due to begin on February 1. Dow Jones Newswires reported Friday that OPEC is discussing holding an emergency meeting later this month to reduce output by another 500,000 barrels a day. Venezuela and Iran have been leading price hawks within OPEC.

Ahmadinejad's visit Saturday -- his second to Venezuela in less than four months -- comes as he seeks to break international isolation over his country's nuclear program and possibly line up new allies in Latin America. He is also expected to visit Nicaragua and Ecuador, which both recently elected leftist governments.

Increasingly united

Chavez and Ahmadinejad have been increasingly united by their deep-seated antagonism toward the Bush administration. Chavez has become a leading defender of Iran's nuclear ambitions, accusing the Washington of using the issue as a pretext to attack Tehran.

Ahmadinejad, meanwhile, has called Chavez "the champion of the struggle against imperialism."

U.S. officials have accused Chavez -- a close ally of Cuban leader Fidel Castro -- of authoritarian tendencies, and National Intelligence Director John Negroponte said recently in an annual review of global threats that Venezuela's democracy was at risk.

The U.S. also believes Iran is seeking to use its nuclear program to develop an atomic bomb. Tehran says its program is peaceful and geared toward the production of energy.

The increasingly close relationship between Chavez and Ahmadinejad has alarmed some Chavez critics, who accuse him of pursuing an alliance that does not serve Venezuela's interests and jeopardizes its ties with the United States, the country's top oil buyer. Venezuela is among the top five suppliers of crude to the U.S. market.

In a speech earlier Saturday, Chavez called for the U.S. government to accept "the new realities of Latin America," as he brushed aside restrictions that limit presidents to two consecutive terms. He vowed to stay in office beyond 2013, when his term expires, saying he would revise the constitution to get rid of presidential term limits.

But Chavez also said in his state of the nation address to government officials and legislators that he had personally expressed hope to a high-ranking U.S. official for better relations between their two countries.

Chavez said he spoke with Thomas Shannon, head of the U.S. State Department's Western Hemisphere affairs bureau, on the sidelines of Nicaraguan President Daniel Ortega's inauguration earlier this week.

"We shook hands and I told him: 'I hope that everything improves,"' Chavez said. "I'm not anyone's enemy."

Chavez prompted a crash in Venezuelan share prices this past week when he announced he would seek special powers from the legislature to push through "revolutionary" reforms, including a string of nationalizations and unspecified changes to business laws and the commerce code.

He also announced plans for the state to take control of the country's largest telecommunications company, its electricity and natural gas sectors and four heavy crude upgrading projects now controlled by some of the world's top oil companies.

He said Saturday, however, that private companies would be allowed to own minority stakes in the lucrative Orinoco River basin oil projects.

The government has already taken majority ownership of all other oil-producing operations in the country through joint ventures controlled by the state oil company. Most companies have shown a willingness to continue investing despite the tightening terms, which have also included tax and royalty increases.


The gauntlets are being thrown down on both sides. Once again, arrogant world "leaders" seem to be heading toward their traditional solution for excess resources, both material and human.

Chris PowellCentral banks may put more reserves into equities, less into bonds#1510941/14/07; 09:12:54

By Jamie McGeever
Tuesday, January 9, 2007

LONDON -- Central banks around the world are looking to invest more of their $4.75 trillion foreign exchange reserves in equities at the expense of bonds, but the implications for currencies are far from clear.

The issue of reserve diversification re-emerged late last year as the dollar fell against major currencies, hitting multi-year lows against the euro and sterling.

The International Monetary Fund also published its latest snapshot of global reserves at the end of December.

Of the $4.75 trillion total, the currency composition of $3.151 trillion is known. And of that, $2.07 trillion is in U.S. dollar-denominated assets.

Central banks are starting to behave more like yield-hungry, market-savvy institutional investors and many are setting aside chunks of their reserves for specific investment vehicles.

With the dollar share of reserves -- where currency allocation is known -- broadly steady at 65.6 percent, the focus for investors and central bank watchers has become the asset composition of these reserves as much as the currency breakdown.

David Bloom, head of global currency research and strategy at HSBC in London, notes that central banks are so flush with reserves that they barely know what to do with them. They are buying a wider range of currencies than ever and diversifying across a wider range of asset classes than ever before too.

"Everybody's at it -- they all want stability. It's a natural progression," Bloom said.

Yet the implication of this asset shift on currencies, particularly the dollar, is murky.

Stephen Jen, head of currency strategy at Morgan Stanley, said: "There are plenty variables ... and no set rule of thumb."

"But there should be some relationship between asset allocation and currency," he added, pointing to the global share of individual market capitalizations as a clue to how asset shifts could impact the foreign exchange universe.

For example, Jen reckons the U.S. accounts for around 40 percent of all the world's leading equity market cap values, the euro zone 18 percent, Japan 13 percent, and the UK 9 percent.

For leading global government bond market caps, the U.S. accounts for around 35 percent, Japan 27 percent, the euro zone 20 percent, and the UK barely 3 percent.

This suggests that a shift by central banks into equities, based purely on these market cap weightings, could benefit the dollar.

But, as Jen points out, Asian central banks seeking higher returns may be more likely to invest in regional emerging market equities than the United States.

Given Japan's relatively low share of global equity market cap, the yen could benefit from, say, the People's Bank of China setting aside investment destined for Japanese stocks, Jen said.

"I don't believe it is a dollar versus euro tug of war, but more a major versus minors and bonds versus equities story," he wrote in a recent note. "Though China has not begun to have exposure to equities, I suspect this may be the next step."

Jim O'Neill, chief global economist at Goldman Sachs, agrees that "the clearest implications" of central banks seeking higher returns on their ballooning stash of reserves is "good news for equities and risky assets at the expense of more liquid ones."

But he reckons the dollar could suffer as a result.

Although the implications for currencies aren't clear, "presumably it's not great for the dollar, as most of these (liquid) assets are in dollars," O'Neill said.

What analysts agree on is a broad shift in central bank behavior to reflect a more aggressive investment profile.

Norway's Government Pension Fund, which saves the country's oil wealth for future generations, grew to 1.712 trillion crowns in the third quarter, or about $265.6 billion.

Norges Bank, which manages the fund, has said it wants to shift the allocation of that money to 60 percent equities and increase exposure to property and private equity. The fund is currently invested 40 percent in stocks and 60 percent in bonds.

Russia has proposed expanding the list of sovereign bonds in which it can invest its $83 billion budget stabilisation fund to include not only AAA-rated debt but riskier and higher yielding A-rated paper. Russia's oil-driven reserves are $283 billion.

The monetary authorities of Singapore, South Korea, and the United Arab Emirates are also thought to be considering raising the risk profile of their existing investment vehicles.

"I know there's been talk going on for some time in these places, but it gets back to the question of why they haven't done this before. This is the nations' money, so they have to be sure they're doing the right thing," said O'Neill at Goldman.

This broad trend comes against the backdrop of key developments concerning the world's reserves behemoth: China.

Reserves held by the People's Bank of China have topped the staggering $1 trillion level. PBOC Governor Zhou Xiaochuan has said the bank is looking at diversifying that stash across currencies and asset classes.

The composition of China's reserves is unknown but many observers reckon around 70 percent is in dollars, almost all of that probably in Treasuries and T-bills.

With global reserves now at such massive levels, a few extra percentage points of return can mean billions for central banks.

For example, a 5 percent return on Asia's near $3 trillion reserves from holdings of top-rated government bonds swells these countries' coffers by around $150 billion a year. A return of 10 percent, say, from equity, property or private equity investments would yield around $300 billion a year.

Chris PowellBahrain rejects change in currency's dollar peg#1510951/14/07; 09:14:25§ion=business&col=

From Reuters
via Khaleej Times, Dubai
Sunday, January 14, 2007

MANAMA, Bahrain -- Bahrain will not change its policy on pegging the dinar currency to the US dollar, the central bank governor said on Sunday after the United Arab Emirates raised the prospect of a region-wide revaluation.

"I have said repeatedly that our policy is not going to change and our position still stands," Rasheed Al Maraj told reporters in Manama. "We have seen weakness in the dollar from time to time and it comes back."

UAE Central Bank Governor Sultan Nasser Al Suweidi told Reuters on Thursday that Gulf Arab oil producers were reviewing currency pegs to the falling dollar and could decide as early as March whether to keep or change their exchange rate regime.

It was the first acknowledgement the Gulf might not stand by a currency regime designed to prepare for monetary union in 2010, although markets began speculating about a revaluation last year as the dollar fell around 10 percent against the euro.

The rising cost of non-dollar imports was one reason Gulf Arab central bank governors were reviewing the pegs, Suweidi said.

In October, Al Maraj told Reuters import costs were raising inflationary pressure in the Gulf island state. He has repeatedly said Bahrain does not plan to revalue its currency.

Suweidi's comments on Thursday pushed up currencies across the world's top oil-exporting region, where the UAE, Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain are working toward monetary union.

Oman, which announced last month it would not join monetary union by 2010, also says it has no plans to revalue its rial currency.

Suweidi said the governors could opt for more flexible exchange rates, instead of the fixed pegs now maintained by all states except Kuwait, which revalued its currency last year.

They may decide to peg to another currency or basket of currencies, he said, declining to comment on what currencies were being considered.

Chris PowellMere celebrities get lots more gold in their medals than real heroes do#1510961/14/07; 09:16:02,1,572821.story?ctrack=1&cset=true

By Johanna Neuman
Los Angeles Times
Saturday, January 13, 2007

WASHINGTON -- One day after President Bush awarded the coveted Medal of Honor to the family of a Marine who died after throwing his helmet and his body on a grenade in Iraq, a California congressman introduced a bill to require the Pentagon to put more real gold in the medal.

"For those very few soldiers, sailors, airmen and Marines deemed worthy of our nation's highest military honor, surely we can afford more than a $30 medal," Rep. Joe Baca, D-Rialto, said.

Baca, a former Army paratrooper who served with the 101st and the 82nd Airborne divisions in the Vietnam era but never saw combat, has introduced the bill every year since he came to Congress in 2000.

Baca -- who opposed the Iraq war -- instructed his staff to find out how much gold was in the Medal of Honor, which has been awarded to only two service members in Iraq: Army Sgt. 1st Class Paul Ray Smith and Marine Cpl. Jason L. Dunham.

Baca's staff discovered that the medals, which vary in design, size, and composition, were made of brass and covered in gold.

The Army's version costs $29.98; the Air Force's more elaborate design costs $75.

Both versions pale next to the $30,000 Congressional Gold Medal. That award, which Congress gives with some frequency to celebrities and dignitaries, is 90 percent gold.

"The medal we gave to Frank Sinatra is worth a thousand times more than the ones we give our heroes in uniform," Baca said in a telephone interview as he flew home to California at the end of the Democrats' first full week in power. "Ain't that a shame?"

Baca's bill would require the military to make its Medal of Honor with the same percentage of gold as the congressional one.

The Pentagon opposes the idea, which Baca said would cost $2 million over the next five years, arguing that the Medal of Honor has a treasured design and storied history that transcends its composition.

"The true beauty of the Medal of Honor is reflected in both the detailed heraldic design and the quality of the manufacturing process," Pentagon spokesman Maj. Stewart T. Upton said in an e-mail. "Since its creation during the Civil War, the Medal of Honor has always been recognized by its rich dark bronze patina and distinct method of display on the neck of the recipient."

The metal used to make the medal, he added, "adds no value to the medal's prestige or historical significance."

Bizarro-GreenspanNo historical significance for gold...#1510971/14/07; 09:33:19

Other than the fact it's honest,always has been,always will be.
Chris PowellNationalization in Latin America may not be expropriation#1510981/14/07; 11:34:16

By Frank Bajak
Associated Press
Saturday, January 13, 2007

Hugo Chavez loves incendiary rhetoric and risk-averse investors understandably rushed to sell shares in Venezuela's biggest telecommunications and power companies after he announced this week that he would nationalize them.

But it later emerged that the Venezuelan president -- whose "21st-century socialism" has managed to co-exist with a vibrant private sector -- is disposed to pay fair market prices for the two utilities.

That would make these "nationalizations" much less radical than initially feared and not all that unusual for Latin America.

"Nationalization," White House press secretary Tony Snow said after Chavez's latest move, "has a long and inglorious history of failure around the world."

The directors of the Chilean copper-mining company Codelco might take issue. Theirs is a proud and extremely profitable ward of a state so committed to free markets that even its toll roads are privately run.

A decade after the region rushed to privatize state-run industries, even countries outside Chavez's populist camp have realized that private companies haven't always served the public's best interests, particularly when it comes utilities like water distribution that require major investment but don't reap much profit.

Several key privatizations have recently been reversed, and even in countries that bought into the "Washington consensus," some strategic industries were never sold off.

"Some nationalizations in Latin America are long-standing and exist for mainly national security and even symbolic reasons. They are also a measure of national pride," said Michael Shifter of the Inter-American Dialogue think tank.

Mexico's 1938 nationalization of its petroleum industry set the standard. Its state-run oil company Pemex has long served as both the government's cash cow and a model of inefficiency and patronage.

State-run oil is the norm in countries including Brazil, Colombia and Chile, despite the latter two being near orthodox free-marketeers. (Colombia is, however, poised to sell 20 percent of state-run Ecopetrol this year to help fund exploration).

State-owned enterprises continue to account for more than 10 percent of the region's gross domestic product and about 5 percent of formal employment, according to the World Bank.

Of course, the success of any nationalization depends on details specific to the industry and country.

Many analysts consider Chavez's planned takeover of CA Nacional Telefonos de Venezuela -- known as CANTV and partially owned by U.S.-based Verizon Communications Inc. -- to be destined for failure.

The world's most wired nation -- South Korea -- happens to have a very sophisticated state-run telecom. But turning a telecom over to civil servants in a developing country like Venezuela in the Internet age worries Venezuelans who remember CANTV in the 1990s, before it was sold off. It was so hard to obtain a dial tone at times that many companies had to hire multiple operators just to work the phones.

Residents of Venezuela's capital also worry about Electricidad de Caracas, the power company currently controlled by Arlington, Virginia-based AES Corp. in a sector that Chavez says he'll nationalize. While this company has always been private, other regions of Venezuela now served by government-run companies suffer frequent blackouts.

Chavez's nationalizations, announced as he began another six-year term, are "all about taking advantage of favorable conditions to tighten and consolidate political control," opined Shifter.

Gary Hufbauer of the non-partisan Institute for International Economics in Washington, D.C, cited three reasons to nationalize:

-- The ruling party wants the revenues, and this pertains mostly to oil and mineral enterprises.

-- They're a way to deliver patronage through bloated work forces.

-- The populace wants cheap or free services.

None provide a recipe for efficiency.

A 2004 World Bank study that looked at 181 state-run utilities in 15 Latin American and Caribbean countries that were privatized in the 1990s -- in fixed telecommunications, electricity and water distribution and sewers -- found that on the whole, labor productivity, efficiency and quality of service improved, especially in telecoms. Water and sewers tended to be problematic, however.

One of Latin America's most bullish privatizers, Carlos Menem of Argentina, sold off scores of state industries during his 1989-99 presidency. The selloffs helped modernize the country, yet critics complained the fortunes reaped were later squandered or illegally pocketed and that many buyers failed to make needed investments. Similar complaints tagged sweeping privatizations in Peru and Bolivia.

Today, Argentines often carp about creaky privatized rail lines, and in the capital of Buenos Aires last year, the government rescinded the 30-year contract of French water utility Suez S.A.'s local subsidiary, accusing it of failing to make promised improvements and neglecting outlying poor areas.

Similar complaints, expressed in violent street protests, helped bring down another big privatizer -- Bolivian president Gonzalo Sanchez de Lozada. He sold off a swath of Bolivian industry during his mid-1990s tenure and was driven from office in 2003 in a later term.

President Evo Morales gained power in Bolivia pledging to roll back those privatizations. He's had some success with natural gas and, last week, finished buying back water distribution from Suez in the capital of La Paz. Electricity and telephones could be next, he's suggested.

Among dirt-poor Indians in the chilly Andes, higher electrical bills can mean having to choose between food and heat.

That helps explain the 2002 riots by Peruvians objecting to then-President Alejandro Toledo's eventually scrapped bid to sell off two state-owned electrical utilities. Toledo was trying to raise money to cover budget needs, something alien to Chavez with his oil riches.

For that reason, Hufbauer says he'd be surprised if Latin America's nationalization wave extends much beyond Bolivia and Venezuela -- where Chavez allies say such strategic sectors as the steel industry could also become state-run.

"Only Venezuela has the cash to support the padded payrolls and financial losses that sweeping nationalization portends," Hufbauer said. "So my guess is that even Bolivia will slow down after the obvious oil and gas takeovers, and perhaps water and power."

mikalInternet grows and grows#1510991/14/07; 13:23:27

Net economy passes new milestone | Agence France Presse
Washington, January 14, 2007 | Excerpt:
""Americans spent over $100 billion shopping on the Internet in 2006, and growth in e-commerce is likely to extend its strong pace in the coming years, analysts say.
A report by research firm comScore Networks said online retail spending excluding travel reached $102.1 billion last year, a 24 per cent increase over 2005. A large chunk of that came in holiday season of November and December — $24.6 billion, up by 26 per cent.
"E-commerce is becoming more mainstream," said Jeffrey Grau, senior analyst at the research firm eMarketer. "A larger segment of the population is buying online, and people are buying more things than they have in the past." Investment firm Cow-en and Co calculated the 2006 sales figure at $108 billion and sees this growing to $225 billion by 2011. "We estimate that US e-commerce sales will grow by 20 per cent in 2007, driven by increasing adoption of broadband, lower prices in online channels, and the increased convenience of online shopping," the Cowen report stated.
This would mean e-commerce would account for 4.7 per cent of total US retail sales in five years, up from 2.7 per cent at the end of 2006. "Retailers have to take it seriously, if they don't they are really behind the boat," Grau said. "There doesn't seem to be any end in sight as to how large it will grow. It will continue to grow above the rate for offline retail.""
Mikal-- You can see from these numbers the importance
of effective modern communications and the web.
I would like to see these numbers grow much faster than predicted, as a way to reduce energy usage, even though
computers consume energy. Using less energy by minimizing travel benefits the environment, lowers vehicle upkeep costs, fuel costs and road maintenance and saves time and hassle.
As the spread of wireless palm computers, laptops and enhanced message capabilities for cells continues, more will be able to buy gold at a moments notice, if they feel the urge, or on a whim. ;) [Link to follow]

mikalLink#1511001/14/07; 13:24:38

Himalayan Times - Agence France Press
mikalLink#1511011/14/07; 13:25:06
mikal'Gold may rise' but gold is already on top#1511021/14/07; 13:40:00

Gold May Rise for 2nd Week as Investors Seek Dollar Alternative By Choy Leng Yeong | Snippits:
Jan. 15 (Bloomberg) -- Gold may rise for a second week on speculation that Russia and oil-producing nations in the Middle East will shift reserves away from the dollar, boosting the appeal of the precious metal as an alternative...

The Fed has left borrowing costs unchanged at 5.25 percent since August, after two years of rate increases. It will cut its overnight lending rate between banks by the end of the year to 4.75 percent, according to 16 of the 22 so-called primary dealers, including Citigroup Inc. and Deutsche Bank AG, that trade directly with the Fed.
The European Central Bank kept its benchmark interest rate at 3.5 percent last week after six increases over the past 13 months. Euribor interest rate futures indicate investors bet rates may rise to 4 percent this year.
``Interest-rate differentials are going to keep the dollar under pressure,'' said Patrick Chidley, an analyst at Barnard Jacobs Mellet (USA) LLC in Stamford, Connecticut. ``Gold remains well supported and is more likely to move back up from these levels.''

mikal"House of cards"#1511031/14/07; 14:05:26

Assessing Iraq war's impact on economy
Broad disagreement on importance; some see factor for the Fed on rates - Greg Robb, MarketWatch
Last Update: 2:32 PM ET Jan 14, 2007
WASHINGTON (MarketWatch) -- Excerpts: "In America's anguished debate over the Iraq war, the U.S. economic impact of the conflict is rarely discussed.
But this may change as its effect grows in importance and even could, on the margin, factor into the Federal Reserve's thinking about when to pause or end its cycle of tightening monetary policy, several analysts say.
'The longer this goes on ... the more closely it resembles the inflationary push that we saw in the latter part of the 1960s.'
— Diane Swonk, economist
Economists view the war as stimulating the economy because of the increased government spending. Maintaining the troop levels also affects the job market, as there's a higher demand for workers to replace reservists called up to serve in Iraq.
"If we could do the experiment where we don't spend $100 billion in Iraq and we don't spend it anywhere else, and we don't give it out in tax cuts, then, in fact, GDP would be going slower and the Fed would probably stop raising interest rates sooner," said Ann Owen, an economics professor at Hamilton College and in upstate New York and a former Fed staffer."
Mikal-- Many good points are made that make this article important. But it continues to promote certain fallacies
like inflation comes out of nowhere and that the economy is growing too fast when in fact it's shrinking (using honest or European GDP). Capacity utilization measures and the role of the Fed's rate-setting committee are also turned on their head here, never straying from censors or the discipline of familiar doctrines.

mikalMore on war costs link#1511041/14/07; 14:20:27

"Alfred Broaddus, the former president of the Richmond Federal Reserve Bank, said the size of the economy dwarfs the cost of the war.
"One of the reasons you don't hear a lot from the Federal Reserve about the war is that the impact is quantitatively not likely to be all that great," Broaddus said.
"From a narrow economic-policy standpoint ... I just don't think it is in the same ballpark" as the possible slowing of the housing market, he said.
Mikal-- There are those who cringe at quotes like this
but I agree. Good healthy debate and yes, the government DOES contribute much to GDP. Not just bureaucracy and pork and Iraq- Afghaninstan and all the bases and personnel around the world also should factor into any discussion of the global economy, even as the world cannot afford to finance their OWN contributions to foreign meddling let alone buying US and Japanese etc debt, hyperbolically magnified to make the economy seem larger.
Now that magnification is revealing some major disparities. Read about costs of Social Security, the budget deficit and
the price of risk taking:

"Alan Meltzer, a professor at Pittsburgh-based Carnegie Mellon who has written a history of the Fed, said that the spending on Iraq "is just a drop in the bucket" for the government.
"The economy wouldn't look much different if we didn't have the war," Meltzer said, adding that the topic of the war doesn't even come up in his conversations with Fed officials.
Telling numbers
So what exactly is the impact of the war?
A lot of difficulty in assessing the war comes from what academics call "counterfactuals" -- trying to decide what would have happened if the United States had never invaded Iraq. As a result, many economists think the government would have simply spent the money on something else, or in tax cuts.
Believing that the money would have been saved "is a pretty heroic assumption, given the unbelievable way the spendthrifts in Congress have thrown money at everything under the sun over the last six years," said James Smith, director of the Center for Business Forecasting at the University of North Carolina.
"If I were on the FOMC, I would pay no attention whatsoever," Smith said. "There is no indication that there is some particular concern that there is some inflationary impact coming down the road."
Economists say it's very difficult to get at the war's economic fallout. The most complicating factor is that the military is spending much of the money overseas, which doesn't benefit the U.S. economy, said Bob Parker, a former chief statistician for the Bureau of Economic Analysis.
Home front
He said he has no doubt that the war is simulative on the home front, but measuring it remains elusive.
Smith said the war impact is "highly concentrated in a few industries and few locations," especially around major military-staging areas like Fayetteville, N.C., Jacksonville Fla., and Norfolk Va.
Companies like Halliburton Co. and Bechtel Group Inc., the privately held construction firm, have also benefited, Smith said.
Some economists who oppose the war believe it's hurting the economy in insidious ways.
The government's growing issuance of debt underlying increased military spending ordinarily might have led to higher interest rates, but Chinese purchases of U.S. dollars has helped to keep rates low.
"The problem of the war was it was so easy to finance, if that is a problem," said Robert Brusca, chief economist at FAO Economics.
On a political level, the war has helped shove to the margins any debate on Social Security reform and longer-term fixes to so-called structural aspects of the federal budget deficit.
At the end of the day, economists are left scratching their heads about U.S. involvement in Iraq.
"We've got this sort of house of cards," said Swonk. "It is either a strong house of cards or the whole thing could implode on us. It could go either way.""

PalIran and Derivatives#1511051/14/07; 16:24:13

Sierra Madre,

Developments in the news this past week made me remember post #148606 you made back on October 21, 2006 that was from an email sent to you from a friend in NY.


"I met last night with xxxxxxx, the former xxxxxxxxxxxxxxxxx, and xxxxxxxx with the CIA for a short time according to my recollection, and if not the latter, sits on security committees with the CIA. He is informed and a very good fellow.??Now, the last time xxxxxxxx and I discussed world events he said that the Middle East was not overly important to the CIA then but rather the controversy between China and Japan as to who controls major offshore oil reserves and the worry of the CIA was that it could kindle conflict. The time before we discussed the ability of the United States to keep open the Straits of Hormuz, and he assured me based on the technology available to the Navy it was not a problem. That meeting was 18 months to 24 months ago.??I was, therefore, astonished to hear him say that the Russians and the Chinese had given the Iranians the most advanced missiles in the world, and that we could very possibly fail to keep the Straits open. There can be nothing more grave than this.??As I wrote before, Turkey is enraged at the Kurds in northern Iraq for the alleged support of terrorism in Turkey as the Kurds seek the creation of greater Kurdistan, and the United States and Israel support for the Kurds is straining relations with Turkey. As it is, the Turkish nation refused rights of transit for our forces to pass through Turkey during the conquest of Iraq. It was the United States goal to have a pincer action. A United States force would invade from Turkey and another through Kuwait. Turkey absolutely refused transit rights. If the Straits are closed, then the supply of the Army in Iraq through the bottleneck of Kuwait will be cut off. If Turkey will not allow transit of supplies, then an airlift would be the only solution to resupply. If Kuwait can hardly supply these forces by their ports, it is doubtful that an air supply might not end any different than the German attempt by Marshall Goering to resupply Stalingrad by air. It failed.??In addition, if the Uniited States were to get into a conflict with Iran, we could expect a much larger insurgency consisting of all Shia forces which may include the Iraqi Goverment forces turning on our forces, and our 140,000 troops could face hundreds of thousands of enemies with resupply rapidly diminishing. This enemy would have sophisticated anti-tank equipment and take over all of the cities which would become battlegrounds. We could easily lose Baghdad. The entire army could be encircled as the British were in Afghanistan in the nineteenth century.??If that were not enough, all of the financial markets would cascade into crashes as seventeen million barrels of oil are cut off unleashing liquidity crises at 1.4 trillion or more of hedge funds scrambling for liquidity owning as they do over 45% of the derivatives consisting of over two to three hundred trillion of nominal and real exposure that would rise with wild fluctuations, and for which these funds can often be counterparties."

End Snip

Sierra Madre,
Have you heard any more through this source?

Developments in the news...

On January 7th, 2007 the Sunday Times UK reported:
Revealed: Israel plans nuclear strike on Iran,,2089-2535310.html

On Friday January 12th, 2007 Jim Sinclair ( posted a report from ING Wholesale Banking titled:
"Attacking Iran The market impact of a surprise Israeli strike on its nuclear facilities"

And then George Ure ( on January 12, 2007 said,
"As we reported earlier this week, the neocon game now is to try and "tweak" the Iranians into doing something that could be used by the administration as a pretext to start a new fight with Iran. While we have a few strategically placed "Ides of March" bets, based on time-dimensioned linguistics for the start of real violence against Iran, the present strategy of "tweaking" seems to be the work-around since several senators have told the administration quite plainly to "Stay out of Iran."


World events seem to be moving us ever closer into conflict with Iran. George Ure has made comments about the web bot predictions concerning this March being bad for the paper markets. There have been discussions here in the past debating what the trigger could be for a derivatives collapse. The above scenario sure looks like it could kick it off. Sir Goldilox mentioned a quote from George Ure's site the other day when George said, "All of which explains why the time monks at are wondering "What does it means when the global financial system doesn't show up in linguistic modelspace in a meaningful way after this year?" If there were a derivatives collapse the statement by the bots above are what I would expect as an outcome, i.e. that global trade is diminished while the financial system works its way out of the mess it has created. The three page posting(below) goes into a summary of the derivatives mess for those who are not aware and still feel safe with their money in the bank:

Buy gold and hold on.


Chris PowellChavez says private firms can hold minority shares in Venezuelan oilfields#1511061/14/07; 18:29:11

By Natalie Obiko Pearson
Associated Press
Saturday, January 13, 2007

Venezuelan President Hugo Chavez said Saturday his government will allow private companies to own minority stakes in lucrative Orinoco River basin oil projects that Venezuela plans to nationalize.

Chavez announced plans earlier this week for the state to take control of the country's largest telecommunications company, its electricity and natural gas sectors and four heavy crude upgrading projects now controlled by some of the world's top oil companies.

It had not been clear whether Chavez intended for the state to have total control of the projects or a majority stake as his government had previously said.

In a speech to congress Saturday, Chavez said the private companies -- British Petroleum PLC, Exxon Mobil Corp., Chevron Corp., ConocoPhillips Co., Total SA, and Statoil ASA -- would be given the option to stay on as minority partners.

"He who wants to stay on as our partner, we'll leave open the possibility to him. He who doesn't want to stay on as a minority partner, hand over the (oil) field and, goodbye," he said.

"Goodbye, good luck and thank you very much," Chavez added in English.

Chavez's government has already taken majority ownership of all other oil-producing operations in the country through joint ventures controlled by the state oil company. Most companies have shown a willingness to continue investing despite the tightening terms, which have also included tax and royalty increases.

Chavez, who was giving his annual state of the nation address, said the joint ventures, which were formed last year, have saved the government some $6 billion in costs.

Venezuela, consistently among the top five suppliers of crude to the U.S., also increased royalties on the four Orinoco projects last year from 16.6 percent to 33.3 percent. Chavez said the move earned the government an extra $840 million in the second half of 2006.

The United States is the top buyer of Venezuelan oil.

Paper AvalancheDollar supply up, dollar demand down (replaced by Euro)#1511071/14/07; 19:16:36

Euro displaces dollar in bond markets
By David Oakley and Gillian Tett in London

Published: January 14 2007 22:08 | Last updated: January 14 2007 22:08

The euro has displaced the US dollar as the world's pre-eminent currency in international bond markets, having outstripped the dollar-denominated market for the second year in a row.

The data consolidate news last month that the value of euro notes in circulation had overtaken the dollar for the first time. Outstanding debt issued in the euro was worth the equivalent of $4,836bn at the end of 2006 compared with $3,892bn for the dollar, according to International Capital Market Association data.

Outstanding euro-denominated debt accounts for 45 per cent of the global market, compared with 37 per cent for the dollar. New issuance last year accounted for 49 per cent of the global total.


The dollar has effectively lost its role already as a store of wealth, now it appears that its role as the preferred means of transactions and debt issuance is also being eroded by a rival whose long term strategy can be summed up in three very simple words: mark to market.


mikal(No Subject)#1511081/14/07; 20:08:47

We May Be in for a Bumpy Ride as Rates Are Still to Peak -
Business Comment | Telegraph | Roger Bootle | JAN 14 07
An excellent op-ed on rates in the UK. Though limited in scope, it describes staglation and warns of risks to many traders, certain derivatives and those lulled by easy credit because of what must follow upon the BOE's
new hawkish tightening.

TitanRe: Congressional Gold Medal#1511091/14/07; 21:31:18

Sounds like a great idea to give servicemen a medal worth more than 30 bucks.

But how could the one for celebs cost $30K? If that's how much gold is in it, it weighs about 3 pounds! Do they wear these things around their necks?!

Sierra MadrePAL - in response to your query at post #151105 today....#1511101/14/07; 23:16:12

Here is a message today from my NY correspondent:

"....Bush is moving on with the plan to beat Iran. It is a highly dangerous time, and the New York Times came out today with a long editorial essentially supporting the Baker plan and demanding that Congress force the President to adhere to it. I think this will happen though the danger is that as this happens the President may order a strike on Iran to preempt it through a staged incident as the Gulf of Tonkin. Even men that I respected, such as Chairman of the Joint Chiefs Lyman Lemnitzer, head and soldiers above the officers we have today in moral character, advocated such staged incidents to overthrow Cuba. This is a gravely dangerous period and we may face a constitutional crisis in the United States though I think the president will back down. That is why Gates may be staying there to stop any irrational orders. Then, there is the question whether the military will obey such an order when it is clear there is no constitutional authority to attack Iran. Zbigniew Brezinski worries about an attack on Iran..

So, my correspondent thinks "the president will back down". Let us hope so! Sometimes the bravest and hardest thing and to do, is to chicken out and let reason prevail.


GoldiloxAfter gold's latest beating, relief may in sight#1511111/15/07; 00:22:21


NEW YORK (MarketWatch) -- Three weeks into 2007, but it's already been a long year for gold bulls. However, relief may be in sight.
The year started with so much promise that The Gartman Letter -- loudly self-proclaimed a non-gold bug but also regarded as one of the best gold buyers around -- went long at the first opportunity.

Theories about the sell-off range from economic slowdown to orchestrated shift in assets.

Gartman's courage was rewarded with a savage beating in the year's first week, which culminated in a drop of almost $20. But then gold edged up quietly, before staging a spectacular $13 rally last Friday, to close at $625.40.
Gold's action was of course accompanied by even more -- and earlier -- damage to commodity prices in general. Several of these also reversed on Friday, notably the grains. See Futures Movers.

What was going on? The standard Wall Street view: Commodity markets were recognizing the economic slowdown -- interest rates will be lower -- so go out and buy stocks!

For the most part, the chart-oriented newsletters were beaten into agreement. Comparing a chart of Natural Resource vs. Consumer Staple indices,'s Martin Pring in his mid-weekly report was talking of a "major deflationary head and shoulders top."

But the more fundamentally-oriented gold newsletters violently dissent. Australia's noted darkly that headlines in the Financial Times about rising inflation fears at the end of the year were immediately followed by a wide and massive commodities sell-off. Yet the Bank of England in fact surprised by raising rates, shocking many optimists.
Bill Murphy of lemetropolecafé was (as usual) more blunt. He sees the sell-off as an officially orchestrated attempt to shift market sentiment toward financial assets. In his favor: Evidence that recent action involved speculative short-selling rather than liquidation.

January could still turn out to be a banner month for Murphy and gold. He's particularly interested in India, the world's largest gold importer. All this past week, he has been reporting stories and signs of very heavy Indian importing, which usually happens at lows for the price of gold.

Murphy consequently expects a rally. (Full disclosure: Data on Indian gold pricing used to be provided to the lemetropolecafé.com by my brother.)
In moments like this, it's worth checking's massive long-term point-and-figure gold chart, congenially made available to the public for free on their site. Intentionally designed to factor out noise and focus on the long-term trend, this chart has changed direction twice in one week. That is very unusual. It is now bullish, and close to being very bullish.

Two more stray bullish facts: The Privateer's bi-monthly commentary, just published, notes that in December, for the first time, the value of euro bank notes in circulation surpassed that of the dollar. That sounds like an important milestone in a dollar-unfriendly road.

And other letters note that the Saudi stock market, which trades during the U.S. weekend, dropped 5% in the past two days, breaking support and closing at the lowest level since October 2004. Could the locals know that something nasty is going to happen in their region?

The Gartman Letter -- in a very unusual move -- overrode its $20 stop-loss, and after a white-knuckle week closed about flat on its gold. Could this well-informed observer also know -- or suspect -- something

USAGOLD / Centennial Precious Metals, Inc.New clients are always welcome to join these offers!#1511121/15/07; 01:45:41">Napoleon III gold coins
Thoreauly@ Sierra Madre re: Bush and Iran#1511131/15/07; 06:08:19

FWIW, I think it's clear that a pull-out of Iraq at this point would be an unmitigated disaster, as the country would quickly descend into all-out civil war and worse. And with the Bush presidency on the line accordingly, I simply don't the Bush cabal relenting. Instead, I fully expect something pre-emptive with regard to Iran (we've now got 14 military bases in Iraq; see link) in a last-ditch effort to turn things around. It would be an insane gamble, of course, but desperate times call for desperate measures. And since it's all about oil anyway . . .
Chris PowellUpward turning point for gold and silver?#1511141/15/07; 07:05:38

9a ET Monday, January 15, 2007

Dear Friend of GATA and Gold:

GoldMoney founder James Turk and Resource Investor's Gene Arensberg today offered technical analysis to suggest that gold and silver are resuming their climb.

Turk, editor of the Freemarket Gold & Money Report and consultant to power, titles his analysis "It's Looking More Like a Major Turning Point." It can be found in the "Founder's Commentary" box at the top left of the GoldMoney home page here:

Arensberg's analysis is his "Got Gold Report" and is titled "Comex Large Commercial Traders Dump Short Gold Positions." You can find it at Resource Investor here:

Maybe it's time for the Bank of England to announce the sale of Princess Diana's gold jewelry.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

mikal(No Subject)#1511151/15/07; 07:38:17

Dollar Mixed as Global Rate Decisions Eyed | Steve Goldstein | Marketwatch | 7:35AM EST, Jan 15, 2007
LacklusterBush Baker Iraq#1511161/15/07; 07:44:48

link to Tom Toles cartoon.
mikalNo staged incident please#1511171/15/07; 08:04:37

Rep. Dr. Ron Paul's plans to introduce legislation to ensure "dialogue and discussion" prevails is something
that the Senate and the House will perceive as the
growing voice of their constituency.
A black ops(operations) setup and mass hysteria ensuing is
best viewed as the worst possible choice, eevn if it means the fall of the Bush Presidency and the exposure of many DC insiders to criminal charges or accusations. That would appear to require a series of "distractions" at this point, so serious are the divisions and suspicions festering in the beltway.
The ultimate outcome is the one the world wills into being, consciously and otherwise. We reap what we sow in governance and foreign affairs.

Escalation in the Middle East by Ron Paul
While the president's announcement that an additional 20,000 troops would be sent to Iraq dominated the headlines last week, the real story was the president's sharp rhetoric towards Iran and Syria. And recent moves by the administration only serve to confirm the likelihood of a wider conflict in the Middle East.
The president stated last week that, "Succeeding in Iraq also requires defending its territorial integrity – and stabilizing the region in the face of the extremist challenge. This begins with addressing Iran and Syria." He also announced the deployment of an additional aircraft carrier battle group to the Persian Gulf, and the deployment of Patriot air missile defense systems to countries in the Middle East. Meanwhile, US troops stormed the Iranian consulate in Iraq and detained several Iranian diplomats. Taken together, the message was clear: the administration intends to move the US closer to a dangerous and ill-advised conflict with Iran.
As I said last week on the House floor, speculation in Washington focuses on when, not if, either Israel or the U.S. will bomb Iran – possibly with nuclear weapons. The accusation sounds very familiar: namely, that Iran possesses weapons of mass destruction. Iran has never been found in violation of the Nuclear Non-Proliferation Treaty, and our own Central Intelligence Agency says Iran is more than ten years away from producing any kind of nuclear weapon. Yet we are told we must act immediately while we still can!
This all sounds very familiar, but many of my colleagues don't seem to have learned much from the invasion of Iraq. House Democrats strongly criticized the Iraq troop surge after the president's announcement, but then praised the president's confrontational words condemning Iran. Many of those opposing a troop surge are not calling for a withdrawal of our troops from the Middle East, but rather for "redeployment." Redeployment to where? Iran?
We need to return to reality when it comes to our Middle East policy. We need to reject the increasingly shrill rhetoric coming from the same voices who urged the president to invade Iraq.
The truth is that Iran, like Iraq, is a third-world nation without a significant military. Nothing in history hints that she is likely to invade a neighboring country, let alone America or Israel. I am concerned, however, that a contrived Gulf of Tonkin-type incident may occur to gain popular support for an attack on Iran.
The best approach to Iran, and Syria for that matter, is to heed the advice of the Iraq Study Group Report, which states:
"… the United States should engage directly with Iran and Syria in order to try to obtain their commitment to constructive policies toward Iraq and other regional issues. In engaging with Syria and Iran, the United States should consider incentives, as well as disincentives, in seeking constructive results."
In coming weeks I plan to introduce legislation that urges the administration to heed the advice of the Iraq Study Group. Dialogue and discussion should replace inflammatory rhetoric and confrontation in our Middle East policy, if we truly seek to defeat violent extremism and terrorism.
January 15, 2007
Dr. Ron Paul is a Republican member of Congress from Texas.

mikal@Lackluster#1511181/15/07; 08:44:46 Good one. ROFL
The Collapse of the Bush Presidency PosesRisks by Glenn Greenwald - Jan 15, 07

mikalComplications, complications...#1511191/15/07; 09:09:10 Shortage of Coins Hits Gold Market by Pratap John
Gulf Times | Qatar | January 15, 2007

mikal(No Subject)#1511201/15/07; 09:36:07 High-Risk Debt Boom Sparks Fears | | Markets
Saskia Scholtes and Richard Beales in New York | 01-15/07

DruidSurge And Mirrors - What Bush Really Said#1511211/15/07; 09:51:19

Bush's "surge" speech is a hoax, but members of Congress and media commentators are discussing the surge as if it were real.

I invite the reader to examine the speech. The "surge" content consists of nonsensical propagandistic statements. The real content of the speech is toward the end where Bush mentions Iran and Syria.

"Bush makes it clear that success in Iraq does not depend on the surge. Rather, "Succeeding in Iraq . . . begins with addressing Iran and Syria."

Bush asserts that "these two regimes are allowing terrorists and insurgents to use their territory to move in and out of Iraq. Iran is providing material support for attacks on American troops."

Bush's assertions are propagandistic lies.

The Iraq insurgency is Sunni. Iran is Shi'ite. If Iran is supporting anyone in Iraq it is the Shi'ites, who have not been part of the insurgency. Indeed, the Sunni and Shi'ites are engaged in a civil war within Iraq.

Does any intelligent person really believe that Iranian Shi'ites are going to arm Iraqi Sunnis who are killing Iraqi Shi'ites allied with Iran? Does anyone really believe that Iranian Shi'ites are going to provide sanctuary for Iraqi Sunnis?

Bush can tell blatant propagandistic lies, because Congress and the American people don't know enough facts to realize the absurdity of Bush's assertions."

Druid: Pretty good read from a Reagan Republican.

GoldiloxShortage of coins hits gold market#1511221/15/07; 10:15:33


DISCERNING gold buyers have to make do without coins these days due to shortage in the local market, as the price of yellow metal again started increasing after a few days' stability.

Industry sources yesterday said there was a short supply of gold coins primarily due to their heavy demand in Dubai, the main regional source for gold.

The spurt in the demand of gold in Dubai is due to the ongoing Dubai Shopping Festival (DSF) during which jewellers offer special incentives and prizes to customers.

The manager of a leading Doha jewellery shop told the Gulf Times yesterday that gold coins were not available in most city outlets now.

"We have been facing a shortage in gold coins in the last few days. Normally, we get gold coins and other jewellery items from Dubai. But due to the DSF, there is no adequate supply from there," he said.

Sources said the greatest demand is for gold coins weighing 8gms or a sovereign. Gold coins of 2gm and 4gm are also available, mostly on demand.

They said another reason for the current shortage of gold coins was the long holidays due to Eid al-Adha.

"Imported gold needs to be certified by the municipal authorities before they can be sold in Qatar. The department did not function during Eid al-Adha. Hence whatever imports made could not be certified," an industry source pointed out.

Meanwhile, gold prices have again started climbing after a few days' stability.

Gold closed at QR70.50 for 22-carat and QR76.50 for 24-carat in the local market yesterday.

And for 10 tolas (116gm), the price was QR8580 yesterday. A few days ago, it was stuck at QR8,380.

Despite the rising prices the gold sales have been brisk as before, a jeweller said.

"Many see gold as a safe investment. And many customers think the gold prices are unlikely to fall, though they may not shoot up in the short to medium-term. Hence it is being considered a reasonably good investment," he said.

Industry sources said the business seen since mid-November was sort of "unprecedented".

Sales had gone up because of 15th Asian Games in Doha. Both visitors and residents seem to have contributed to this.

Jewellers said many visitors to the Games and athletes purchased gold during their shopping.

Expatriates who flew out on holidays taking advantage of schools closure during the Games had also purchased gold.

And towards the year-end, the gold sales have surged primarily because of Christmas, Eid al-Adha and the New Year, said A V Joju, an executive with Joy Alukkas Jewellery.

Joju said though there was no marked difference in gold price worldwide, many expatriates, particularly non-resident Indians, buy the yellow metal from the Gulf due to the "guarantee on quality".

Also, a wide range of designs was available in jewelleries across the Gulf.

A jeweller said the prices might not remain stable in the coming weeks due to the current fluctuation in crude oil price.

"The price of oil has a bearing on the gold price in the international market. So, the price of yellow metal will depend on how the crude price moves," he said.

In the last two years, prices in the international market have more than doubled, causing a sharp decline in the metal's retail business.

This was due to a combination of factors including skirmishes in many regions, declining bank interest rates and bearish run in capital markets worldwide.


The more instablility rears its ugly head, the more the locals tend to see the importance of "gold in hand". This could be a localized event, or perhaps, prognosis of things to come on a wider basis.

GoldiloxCommentary: Social Security is about math, not Mexicans#1511231/15/07; 14:01:48


SAN DIEGO, California (CNN) -- For more than a decade, I've written about the need to reform Social Security. And I've blamed older generations of Americans for not fixing a program they know is unsustainable into the future.

My bad. It turns out, if I wanted to get everyone up in arms, all I needed to do was blame illegal immigrants.

Ah, yes. The folks who, we are told, wrecked our schools, ruined our environment and lowered our wages are now poised to steal our Social Security.

Oh, there's some stealing going on all right, but it doesn't have anything to do with illegal immigrants.

Here's the drill: Social Security is an intergenerational shakedown. Every generation pays for the preceding one. Sixty-nine million baby boomers have no problem paying for the World War II generation because, well, there are 69 million of them. But imagine the burden on younger workers of having to keep legions of aging flower children in a comfy retirement.

In 1946, the cost of supporting one retiree was split between 42 workers. Now, we're approaching the point where two workers will support each retiree. The trouble begins in 2016 when -- according to experts -- more will be going out in benefits than will be coming in as payroll taxes.

This is what I worry about -- the math. But, for others, the worry is about something altogether different -- the Mexicans.

Immigration restrictionists are apoplectic over the news that the United States has entered into a "totalization" agreement with Mexico. Under these agreements, which the United States has with 21 other countries, workers who work in two countries during their careers can combine what they earned in both places to qualify for retirement benefits under one or both systems. The restrictionists insist that the U.S. government has conspired with Mexico to let illegal immigrants loot the Social Security system.

That would be quite a charge, if true. But these pacts apply only to people who are working legally.

The worry is that, if Congress passes guest-worker legislation that gives some number of illegal immigrants a "work-authorized" Social Security number, the worker might be in a position, if he met eligibility requirements, to apply for Social Security benefits, including those earned while in the country illegally.

Supporters of totalization point out that current U.S. law bans illegal immigrants from collecting Social Security benefits.

They're right about that. But there is no law prohibiting illegal immigrants with bogus Social Security numbers from paying into the system, something they and their employers do to the tune of more than $7 billion per year in payroll taxes.

That's money the illegal immigrants will never see again, and it has for years helped to keep the entitlement program afloat. So Social Security lives off ill-gotten goods -- the stolen taxes of millions of people, and the assumption that they'll never be claimed.

How odd that the closed-border, closed-mind crowd isn't nearly as troubled by this part of the equation.

TownCrierBundesbank balances gold and growth#1511241/15/07; 14:19:32

A nice arrival in my IN BOX today.

Central Banking Publications reports the following:
August will see 50th anniversary of the venerable Bundesbank, that bastion of hard-money monetary policy and anchor of the country's post-war economic miracle.
Germany's central bank plans to celebrate by minting a special silver ten-euro coin, the obverse of which features a pair of scales balancing images of money (in the form of good old gold bars) and trade or industry, symbolising the central bank's outlook.

Good use of symbolism. Wise folks actually put this balance into practice on an individual basis -- accumulating a reserve of gold in accord with their personal productivity.


Chris PowellGoldman expects 'modest' fall in dollar, interest rate cuts#1511251/15/07; 14:27:22

By Jessica Mortimer
AFX News via
Monday, January 15, 2007

LONDON -- The dollar is set for modest declines in 2007 as US growth continues to slow, prompting the Federal Reserve to start cutting interest rates, according to Goldman Sachs.

"We see a modest decline in the dollar over 2007, which will be good for world markets rather than bad," Goldman's head of global economic research Jim O-Neill told a conference on global strategy here.

Goldman forecasts that the euro will rise to 1.32 against the dollar by the end of the year from just below 1.30 currently.

There are signs that some of the capital flows that had previously supported the dollar are starting to deteriorate, with the number of buyers of US bonds and equities from the rest of the world falling, he said.

Another potential negative factor for the currency is Goldman's forecast that slower growth and subdued inflation will prompt the Fed to start cutting interest rates this year.

The investment bank forecasts that US rate-setters will cut borrowing costs three times during the year, starting in the second quarter, taking the Fed Funds rate down to 4.50 percent from 5.25 currently, O'Neill said.

On the positive side, however, the US trade deficit is showing signs of significant improvement as export growth has begun to overtake growth in imports, helped by the weaker dollar. This should enable the current account deficit to start improving this year.

Meanwhile, other major economies are set to weather the US slowdown fairly comfortably as they become increasingly less dependent on the US.

"If ever there was a good time for the US to slow, this is it," he said.

China is showing "no sign of slowing," while more importantly there is growing evidence that Chinese corporate profitability is improving.

In Japan, companies are increasing their workforces and business confidence is spreading to non-manufacturing, a sign that domestic demand is recovering. Germany too is "way through the problems created by reunification."

"The improvement in Germany's competitive position has led to a significant improvement in business confidence, which will lead to stronger growth," O'Neill said.

GoldiloxThe lack of understanding about the real Iraq situation#1511261/15/07; 14:28:03

@ Druid,

Very few Americans, especially those who only get their "news" from Hi-Def TV, understand anything about the real Iraq issues, especially the centuries old divisions between Kurds, Sunnis, and Shi'ites, all of whom have been slopping at the CIA trough for decades.

The Western intel forces have played all sides against the middle for generations - think Lawrence of Arabia, Aramco, Rumsfeld, and Ollie North (during the Reagan admin) before the Bush generation of conflicts.

Those who say "Iraq will degenerate into an all-out civil war" if we pull out, are trading the uniting of traditional enemies against the invading "Coalition" for that civil strife. Is it better to let them shoot each other, or have them keep shooting at us?

The only way Saddam won the country in the first place is with complete arms and intel support from Rumsfeld at the same time Ollie was arming the Shi'ites with drugs for arms deals in Iran. We called it "balance of power".

No, Joe Sixpack would wet himself to understand that the "destablization policies" of US intel completely control the drugs that hit the streets in the US. Import illegal drugs and you're a national hero with diplomatic immunity. Buy them, and go to prison! Is the real beef against Chavez not really in the oil patch, but that he wants a bigger piece of the drug action, like Noriega did?

Even Afghanistan, whose religious Taliban had nearly wiped out poppy cultlivation, is again awash in the most lucrative opium trade ever. I ask, who's bringing such huge quantities to the Western "markets" with impunity? I doubt any of the traditional mob ties are that well connected to Al Queda, although they have been connected to the CIA since WWII and Lucky Luciano's assistance in the invasion of Sicily. Isn't it interesting how quickly the press was shooed away from returning heroes' body bags, once Hollywood started producing films about caskets laced with drugs?

Once again, follow the money, not the rhetoric.

GoldiloxGoldman "prediction"#1511291/15/07; 14:35:29

@ CP,

THe UK is raising rates, the ECB is holding fast. While the Euro has recently supplanted the dollar for the role of the largest tranasaction medium, GS thinks the FED will lower US rates - and the result will be a "modest dollar drop".

They must be smoking too much "happy weed"!

USAGOLD - Centennial Precious Metals, Inc.NewsGroup: The latest USAGOLD Client Update has been e-mailed.#1511351/15/07; 15:01:33

This time we feature my gold price predictions for 2007 and our take on what drove gold's "surge" last week...


"In a December 2004 interview with the Wall Street Journal, I predicted $525 for gold's high in 2005. It hit tht $525 the following December. For 2006, once again in a Wall Street Journal interview, I predicted a "breakout year" for gold with a top price of $760. Its actual breakout high came earlier in the year than I had anticipated (in May) and a bit lower than I had predicted -- in the $730 range (intraday Comex).

So. . .What about 2007?

"At a not-for-quotation pre-speech briefing on Jan. 10, George W. Bush and his top national security aides unnerved network anchors and other senior news executives with suggestions that a major confrontation with Iran is looming." -- Robert Parry,

There was much speculation floating the markets on Thursday and Friday as to why the gold price suddenly experienced a "surge" of its own. The usual suspects were trotted out including technical signals, dollar-related positioning and Far Eastern value buying, but there may be more to it than just that. We could be experiencing the first stages of a major rally based on a possible U.S. expansion of the Iraq conflict. I would recommend paying close attention to what's going on in the Persian Gulf, and the Mideast in general, as ominous developments there form a backdrop for trading in the financial markets, including gold. . . .

If you would like to join our popular gold NewsGroup, please go to the link above. We sift through the mountains of gold-related news to find the items we feel most pertinent to gold owners and clients of USAGOLD-Centennial Precious Metals. Articles, essays, etc are then rated on a five-star system.

We invite your participation at no charge. --MK

mikal(No Subject)#1511361/15/07; 15:02:15

A Tsunami Headed at Our Markets! Treason is What This is!
Bud Burrell - January 14, 2007
Short blog entry on an apparent forthcoming legal disclosure to shake the markets. At the rate things are going, you've gotta keep an open mind and prepare yourself

Thoreauly@ Goldilox re: Social Security math and Mexicans#1511371/15/07; 15:23:11

But as the math is all about how many workers it takes to support SS recipients, aren't 90 million Mexicans very much the issue -- i.e., forget about what they stand to receive down the road, as what matters to the US government is the here and now. And what better way to serve the here-and-now than to "naturalize" Mexico via a North American Union?
GoldendomeTrouble a'bubbling#1511381/15/07; 15:44:01

MK: Yours is an excellent article now posted in the USA newsgroup email.

Many here have speculated that the U.S. does not want to begin the hostilities with Iran but would rather illicit a reaction from Iran, brought on through our intrusions and irritations of them, that we can retaliate to.

One point—should hostilities begin, there is likely to be Suni and Shiite conflict in the area. It is reported that Saudi (Suni's) are attempting to hurt Iran financially by pumping more oil than their quota, and discounting it. If so, and an economic war is taking place against Iran, should we be surprised if Iran targeted Saudi facilities during hostilities?

One further note—any blocking of the Persian Gulf not only would limit oil getting out, but would also block, to some extent, supplies from getting into our troops in Iraq and elsewhere in the area.

The effects on financial markets, currencies, derivatives and the like would be negatives we think; it would be a good time to be holding our gold and silver against the fallout.

GoldiloxNationalization, SPP#1511391/15/07; 15:44:15

@ Thoreauly,

Nationalization and loss of the Constitution is very much the issue. I'm a lot more concerned when I see courts overturning state and local laws based on their alleged conflicts with NAFTA than I am about refunding SSI witholding to people who actually paid in.

Since no one can get SSI without paying in first, the issue of 90M Mexicans getting in line is moot unless the SSI admin is so bad thay can't tell who paid in and who didn't.

Besides, given the wide disparity between the current rate of inflation and the falsified core rate, those checks will not amount to a hill of beans very soon, and there will be a lot more Hell to pay from 20M seniors than from a few checks being mailed overseas.

The whole SSI ripoff of confiscating excess revenues for the general fund and never preparing for future adjustments to the base is crashing down upon our heads. A little education has taught leaders that capitalism "requires" inflation to foster growth (at least debt-based capitalism does), so they write every funding bill to ASSUME both population growth and monetary infation. One glitch, and we'll be hearing the infamous words of Will Smith piloting the Alien spacecraft in Independence Day - "OOPS".

mikal(No Subject)#1511401/15/07; 15:47:41

US Military Strike on Iran Seen By April '07
Arab Times - Information Clearing House - 01-15-07
Small article tells why, when, how they it'll happen

Sierra MadreGoldendome: from the video on "American Way of Life" which you posted... #1511411/15/07; 16:20:10

I did a little figuring with the data presented in the 1955 video extolling the "American Way of Life" back in 1955, to which a link was provided by Goldendome, in his post #151068 on Jan. 12.

This is what I came up with:

There were 50,500,000 families in the US in 1955. (Note: Today, "Families" is no longer a useful definition, the useful word now is simply "household" – though "a house is not a home" – since too many "families" have now been added to by single parents, or same sex partners, or simply single people living alone. Note also, that today the work of the father of the family is no longer sufficient to make ends meet (such as they are today) for a great many people.

The total income of these families, before taxes, was $272 billion dollars.

About 30% of families, some 15,000,000, had yearly income lower than $3,000. (Among these, we are told, were farmers who supplied many of their wants outside the money economy. Interesting for what is coming!)

About 40% of families, 20,000,000, had incomes between $3,000 and $6,000 dollars a year. Say between $60 and $120 dollars a week.

About 23% of families, some 11,500,000 families, had income between $6000 and $10,000 a year. Say between $120 and $200 dollars a week.

About 4% of families, some 2,000,000 families, had income between $10,000 and $15,000 a year. Say between $800 and $1,250 a month.

About 3% of families, some 1,500,000 families, had an income over $15,000 a year.

All of which shows at least one thing, how the dollar has shrunk dramatically in value in 50 years.

It would take pages and pages to list all the things without which we got along just fine, in 1955. Easier to list the negative things we did without: crushing consumer debt, for starters; and drugs; and cyber porn; and, and….


Sierra MadreGoldilox: the hidden motive of S.S. checks to Mexicans....#1511421/15/07; 16:33:41

Goldilox: the sending of Social Security checks to Mexican illegals who have returned to Mexico, has to do with creating "facts on the ground": it creates a dependency in the Mexican political base to receiving these funds from the USA and tends to turn that base to a favorable outlook regarding the absorption of Mexico into the US, according to the plan for the SPP (Security and Prosperity Plan), which also includes Canada.

This is also the deeper reason for NOT guarding the US Borders. "Facts on the ground", always.

The reason behind the creation of the new common currency which is planned - out with the Dollar and Peso and in with the Amero - is to have both countries use the same money (controlled of course, by the Fed) and allow US Banks to flood Mexico with unlimited amounts of credit to shore up US banks' now failing attempts to expand debt and keep the debt pyramid from collapsing. Thus enslaving the Mexican population for ever, in the same way as the US population has been enslaved to debt.

All that credit - read debt, of course - will be very hard for the Mexicans to resist. Making "Whoopee" will come first, the tears will come later.


melda laureWhat's next? Recruiting in Guangxi?#1511431/15/07; 16:50:51

There are not enough suckers to pay the social security ponzi scheme, the system is doomed sooner or later.

Given the SPP nonsense being implemented, what is so implausible with the government enticing a whole new generation of suckers? Certainly no one in congress will claim "we need more mexicans to pay in so we can keep the system afloat a bit longer before we stiff everybody."

Sometimes I wonder if the desperation in DC isn't just too laughably obvious on some days.

For those already on SSA, there is little room to maneuver. For those still in the earning years, there is still time to plan for the golden years.

GoldiloxSSI "gifts"#1511441/15/07; 17:56:08

@Sierra Madre,

Methinks you hit the nail on the head. Just like drugs and gambling, "the first one's free".

from Marketing 101, under "Trial Offers"

GoldiloxPyramid Scheme#1511451/15/07; 17:59:50

@ Melda Laure and Sierra Madre.

No self-repecting Pyramid scheme (an oxymoron is there ever was one) can continue to exist without new "prospects" to pay the way for the early adopters.

We should not expect SSI, 401K, etc. to be any different.

Goldendome1955 film on the distribution of wealth#1511461/15/07; 18:26:32

Yes, an eye opener! Tragic what the government has allowed happen to the dollar and the consequential income disparities.
melda laureFiat Money inflation in France#1511471/15/07; 19:15:50

"How it came, What it Brought, and How it Ended." Andrew dickston White.

Special Edition for Bank of New York & Trust Company est 1784

PDF file on the Mises site.

mikal(No Subject)#1511481/15/07; 20:14:52 Russian Says US to Strike Iran Targets - Mosnews
FMNN - 1-15-07

Chris PowellDollar's prestige falls among Russians#1511491/15/07; 20:53:00

By Yekaterina Dranitsyna
St. Petersburg (Russia) Times
Tuesday, January 16, 2007

Russians are increasingly losing confidence in the U.S. dollar, experts from the Public Opinion Foundation said last week as it published its report, "The Dollar in Russia."

"In recent years the dollar in Russia has lost significantly more in prestige than in real exchange value," POF's Grigory Kertman said.

In 2002 a poll showed that 35 percent of Russians trusted the dollar more than the ruble and the euro while 37 percent said they preferred the ruble. About 11 percent of respondents preferred euros.

"Since then the situation has changed dramatically. Today almost two-thirds of respondents -- 63 percent -- say they trust the ruble most of all, while only 5 percent trust the dollar and 15 percent the euro," Kertman said.

The data is based on a poll conducted at the end of December in 100 Russian cities with 1,500 respondents.

Elderly people demonstrated the highest loyalty to national currency. About 75 percent of respondents over 54 years old prefer the ruble, with only 2 percent preferring the dollar and 3 percent the euro.

Most young people (51 percent) trust the ruble with just 8 percent believing in the dollar and 26 percent backing the euro, the POF report said.

The decreasing value of the dollar against the ruble worries only 10 percent of respondents. Savings in dollars as a cause of nervousness was indicated by only 1 percent of people. About 1 percent of respondents said their current income depends on the dollar rate. Only 32 percent of respondents said they monitor the dollar exchange rate and 71 percent of people said they are definitely not worried by the dollar exchange rate -- mainly because they do not have dollars.

Seventy-seven percent of respondents said that a decrease in dollar value would not affect their welfare. Four percent said they benefit from the decreasing dollar rate while 8 percent claimed the opposite.

As for possible effects on the Russian economy, 51 percent of respondents were unclear. Seventeen percent of respondents denied any correlation between the dollar rate and the Russian economy, while 18 percent believe that decreasing the dollar's value could negatively affect Russian economy.

About 23 percent of Russians expect the dollar rate to remain relatively stable this year. Twenty-one percent expect it to keep decreasing, while 4 percent, on the contrary, expect the dollar to gain against the ruble. The rest refused to make any forecasts.

In everyday life dollars also are becoming increasingly rare. Sixty-six percent of Russians said they never used dollars. Two-thirds of people who had used dollars said that in the last two to three years they came across the greenback less often than before.

Only 4 percent of respondents said that they deal with dollars more frequently than before. Seven percent said that nothing has changed.

Denis Mukhin, analyst for banks and currency markets at BrokerCreditService, said that, considering currency market trends in 2006, ruble deposits were preferable to euro deposits and that these were preferable to dollar deposits.

However, he said, whatever the currency, all deposits provided negative real profitability. He estimated profitability of ruble deposits at about -0.1 percent, which is the best result among the ruble/euro/dollar group.

"Considering the economic environment in the United States and the eurozone and the Central Bank's activities, next year the dollar rate is likely to keep decreasing. Maybe not so fast as in 2006, but still it will decrease," Mukhin said.

Mukhin forecasted that the Central Bank will follow the same policy and the ruble will continue to strengthen.

"Although the profitability of ruble deposits could decrease still further, it would be most worthwhile to choose ruble deposits. I mean in terms of saving, not in terms of making profit," Mukhin said.

According to Interfax-TsEA, last week the dollar exchange rate increased by 24 kopeks to 26.59 rubles "due to positive macroeconomic data on the American labor market published on Jan. 5."

Employment level and average hourly wages in the U.S. increased faster than the experts expected while foreign trade deficit decreased to $58.2 billion.

This week Interfax-TsEA expects the dollar to continue its growth to 26.66 or 26.67 rubles, Interfax reported Monday.

TownCriermelda laure (msg#: 151147) "Fiat Money inflation in France"#1511501/15/07; 22:05:51

For those who don't want to walk so far on such a cold night, here's a version that's closer to home.


GoldendomeDollar head & shoulders breaking down#1511511/15/07; 23:12:17

Artificial Economics, the brainchild of the Master Planners, has focused on building an economy where debt - not income - pays for goods and services. The emphasis upon debt instead of income via hyper-inflating the money supply in stealth fashion, has destroyed the dreams of millions of Americans. Artificial Economics is a silent economic disease. A coming significant devaluation of the dollar is a likely and necessary consequence.
mikal@Goldendome#1511521/16/07; 00:36:03

"Government debt would be reduced as folks are required to pay taxes on the dollar-devaluing household-handout."

Your link is a good read. I liked this essay but thought it oversimplified things a great deal, as in the above quote, by leaving out much of the actual money supply created by derivatives, liquidity, interest rates and other
factors and decisions affecting the dollar and debt markets
including the global currency arbitrage (enabled by central bank competitive currency devaluations) , private debt issuance, equity and asset inflation such as housing, and hyper-growth of OTC derivatives.

I still see his scenario as possible, which is easy to say because:

*It's so vague on details such as how "gold-backing" would occur.

*The quote above appears to say a huge "handout" to every family must happen, and then new taxes on it are supposed to magically make the debt palatable to the world, and to the currency and bond markets etc.

*He doesn't show or even hint how the 50% cheaper buck "edict" will bring stability to inflation, spending and
to household, corporate and government balance sheets already poised precariously (and approaching debt saturation/limit of tolerance). The return of exported and outsourced jobs and creation of new ones apart from the finance, defense and service secters would go a long way to restoring integrity to families, communities and municipalities in many parts of the world besides the US.
Healthy, sustainable trade in goods and services need not be made so difficult that even defense, welfare and entitlement spending cannot remedy or alleviate the poverty, crime and mass migrations media won't acknowledge.
It seems gold may be more valuable as personal insurance against government and corporate schemes than as "backing"
for the latest notes.

GoldiloxGold, a new addition to RRSP#1511531/16/07; 00:46:22


Toronto , ON ( January 15, 2007) – Questrade Inc. and Kitco Metals Inc. will offer Canadians the opportunity to purchase gold to invest in registered savings accounts such as RRSPs and RESPs. Gold will be stored at the Royal Canadian Mint.


This new product marks the first time Canadians have direct access to buying, holding and trading physical gold within RRSPs. Questrade registered accounts, including RRSPs, RRIFs and RESPs, are not charged any annual administration fees.

Physical precious metals have only been eligible to be held within registered accounts since February 23, 2005, when the Canadian government amended investment regulations, tabled in the 2005 Federal Budget. Since the amendment, Canadians had access to RRSP-eligible gold only through individual shares, funds and certificates. Now they can own real gold as well as trade it within their registered plans.

"Holding actual commodities in a registered plan is significant for investors," says Edward Kholodenko, President and CEO of Questrade Inc. "Not only will the registered plan owner save on the management fees associated with funds, he or she will be able to buy, hold and trade real gold on the spot market. This means plan owners can take immediate advantage of market movement instead of waiting for the fund manager to do it."

Traditionally, gold ownership has appealed to investors hoping to safeguard at least part of their investments from currency instability and stock market volatility. Portfolio diversification is also a major reason for owning gold and other commodities in a Registered Savings Plan. Building a diverse portfolio can possibly balance the risk inherent in investing. Eligible gold products are investment grade bars and Royal Canadian Mint coins with a minimum purity of 99.5%.

Questrade Inc., Canada's fastest growing online broker, provides the self-directed registered accounts for investors. Kitco Metals Inc, a leading dealer of precious metals, will secure the gold products. The Royal Canadian Mint, with its world-class refinery and security protocols, produces and stores the gold.


Stored by the gubmint, that sounds "safe".

TownCrierCommodities rally is intact, says Deutsche Bank#1511541/16/07; 03:02:49

(Bloomberb) Jan 15: Deutsche Bank AG, Europe's biggest securities firm, said falling commodities prices in the past month don't indicate the end of a rally that began five years ago, in contrast to a forecast from rival ABN Amro Holding NV.

Commodities prices are undergoing a "recurrent correction in a continuing bull run," and could stay high for an extended period, the bank's Michael Lewis, Peter Richardson and other analysts said in a January 12 report. Prices of nickel, zinc, gold and grains could rise further this year, the bank said.

Gold prices should gain later in the year as Deutsche expects a weakening dollar will lead investors to find the precious metal more attractive as an alternative investment.

Jewellers and fabricators will also buy more of the metal, the bank said, predicting that gold prices will average $725 an ounce in 2007...

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

"...the bank said, predicting that gold prices will average $725 an ounce in 2007..."

That would be a hefty average... representing gains of 20 percent for all the folks who blindly bought their holdings throughout 2006 and thus achieved the year's average price of $604.

Twenty percent... Not likely, say you skeptics? Well, that "measly" average price of $604 for 2006 represented a 35.9 percent gain over the average price for 2005. And frankly, conventional wisdom makes a good argument that as the dollar falls out of international-reserve favor, the annual gains in gold quite justifiably ought to begin picking up speed with each passing year, easily outpacing its previous annual gains.

But hey, why be greedy? One might think the mere TANGIBLE SECURITY of gold holdings would justify its ownership -- even without such forecasts of potential 20+ percent gains in its market value...

Maybe you CAN have the best of both worlds -- world-class physical security and world-class capital gains.


Thoreauly@ Mikal & Goldendome#1511551/16/07; 06:30:04

McHugh's article can also be found on (see link), where "economist" Arthur Laffer is making a fool of himself (again) in his defense of the Fed in particular and the status quo in general. (Click on Talk Back at the end).
USAGOLD / Centennial Precious Metals, Inc.In business since 1973! Proven Reliability, Longevity, Quality and Professionalism -- Invest with Confidence!!#1511561/16/07; 07:40:38

TownCrierGold steadies but seen gaining in long term#1511571/16/07; 07:55:42

LONDON, Jan 16 (Reuters) - Gold steadied in Europe on Tuesday after trading in a tight band, and analysts said the metal was expected to gain in the near term on a dollar decline.

"It much depends on currencies and oil prices. The euro is up today and that supports precious metals to some extent. For the time being, gold seems to be trading in a range," said Wolfgang Wrzesniok-Rossbach, head of precious metals marketing at Germany's Heraeus.

"I am relatively cautious for the first quarter and then (see) a turnaround in the second quarter, and may be considerably higher prices towards the end of the year. A lot of fundamental factors speak for gold."

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

Hmmmm... Heraeus must have had a turnaround in its business model and/or derivative position to justify this switch in their public stance on gold from relatively bearish to bullish.


GoldendomeThoreauly:#1511581/16/07; 08:48:34

Enjoyed the discussion in the "talk-back" section that you noted.
Thoreauly@ Goldendome#1511591/16/07; 09:16:34

Yes, it's interesting to see how mainstream "economists" think, especially those who believe that they are "right on the money," as Arthur's pal Larry Kudlow is always saying. For even though he openly admits that we are in "a long-term bear market" and (on another thread) that gold and silver are therefore going to rise steadily for the foreseeable future, he doesn't understand that it's all about being "wrong on the money."

But that's the mainstream for you -- as shallow as it is wide.

TownCrierHong Kong ranked as the world's freest economy#1511601/16/07; 09:50:30

January 16 -- Hong Kong has been ranked as the world's freest economy ahead of rival Singapore in a report released by a right-wing American think-tank, The Heritage Foundation.

The ranking by the Washington-based organisation puts the former British colony at the top of its Index of Economic Freedom, for a 13th successive year, as it scores top marks in six of the 10 categories on the index.

The index ranks each economy according to 10 criteria including the level of government intervention, trade and monetary policy, property rights and regulations as well as labour freedom.

Saying Hong Kong is "clearly blazing a trial for others to follow" the foundation and co-sponsors, the Wall Street Journal, awarded the city's economy a score of 89.3 points, 1.6 points lower than last year.

"The way that Hong Kong (became) prosperous was simply through its free and fair playing field," said Mary Kissel, editorial page editor for the Journal.

Second-placed Singapore, which was lauded as "the top country in business freedom and labour freedom," scored 85.7 points, down 2.8 points from last year.

Tim Kane, the author of the index, said the biggest weakness in Singapore's economy was its banking system which has heavy state influence. If that improves, it could take over Hong Kong as the world's freest economy.

...Hong Kong's ranking comes despite criticism that its economy is dominated by a handful of powerful family-controlled monopolies and cartels, which not only control prices of particular goods but also block market access to competitors as there is currently no competition law in place.

"It's a very difficult project to valuate freedom," he said in Hong Kong, where citizens do not enjoy a full democracy and are denied rights to vote for a leader.

When asked whether political situations should also be taken into considerations, Edwin Feulner, Heritage Foundation president said "we are not here to measure all freedom."

"We are here to measure simply economic freedom"

After Hong Kong and Singapore, the Foundation ranked Australia as the world's third freest economy, followed by the United States, New Zealand and the United Kingdom.

It ranked North Korea as the world's most economically repressed country, with Cuba, Libya, Zimbabwe and Burma at the bottom of the chart.

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

How much economic freedom do you enjoy? Has your form of savings been adequately liberated from the statist- and corporate-dominated international financial regime?

Choose gold!


TownCrierHave you staked a claim in the up-coming gold coin raffle?#1511611/16/07; 10:49:22

Napoleons are nice... and only free gold could make this offer more nifty. And so it is.


Chris PowellIndia approves exchange-traded funds for gold#1511621/16/07; 11:55:57

From Press Trust of India
Tuesday, January 16, 2007

MUMBAI, Jan. 15 -- Market regulator SEBI today gave a go-ahead to mutual funds for floating gold exchange-traded funds (GETF), thus enabling the investors to trade in gold as shares in the stock market.

In a notification, SEBI said: "The gold held by a gold exchange-traded fund scheme shall be valued at the AM fixing price of London Bullion Market Association (LBMA) in US dollars per troy ounce for gold having a fineness of 995.0 parts per thousand." The Custodian of Securities Act has also been amended, enabling custodians of the proposed gold funds to outsource safekeeping of bullion to other agencies.

But SEBI made it clear the custodians would be responsible to its clients (mutual funds) for safekeeping of the gold kept with other person, including any risks.

"This is an encouraging development. Common investors will be able to buy and sell gold in small amount at leading bourses," Association of Mututal Funds of India (AMFI) Chairman A P Kurian.

This would help in diversifying investment and risk by the investors, he added.

UTI MF and Benchmark have already submitted draft offers for GETF and are awaiting SEBI's nod to launch these funds.

The GETF will track the price of gold. Its appointed custodians will buy and sell gold bullion as investors look at positions in the ETF.

mikal(No Subject)#1511631/16/07; 12:04:40

Top gold prophets call for 25-year high in 2007
By Ambrose Evans-Pritchard
Last Updated: 5:09pm GMT 16/01/2007 Excerpts:
"Predictions table, from [pdf file]"
Mikal- Link to table where the 29 "gurus" gave their forecasted high, low and avg. for 2007 in gold and silver:

"The majority of the world's top metal experts think gold will blast through to 25-year highs this year, surpassing the brief peak reached in the speculative surge last spring.
If the roaring bull market in gold is already past its sell-by-date, nobody told the 29 prophets polled by the London Bullion Market Association in its annual forecasting contest.
Ross Norman, director of and winner of the last year's prize (a gold bar), said gold would reach $850 an ounce, up from the current price of $628.
"We remain manifestly bullish for gold but this is the year that is going to separate the men from the boys because the old factors of supply demand we all used to look at are no longer the real drivers," he said.
"There's a tsunami of cash hitting the market and we're moving to a new realm of crowd psychology. What matters now is what the hedge funds are doing, or the pension funds, who are adding all the time.
"The central banks of countries like Russia, China, Vietnam, and are looking for alternatives to the dollar and are gradually buying gold," he said.
Fifteen of the 29 analysts said gold would reach $750 an ounce or more this year, triple the level five years ago when the Bank of England began selling off 60pc of Britain's reserves. The average prediction for 2007 was a high of $742...
One thing they almost all agree on: the price is going to shoot up and down as volatility makes a come-back, with an average price of $652. Perfect for traders."

mikal(No Subject)#1511641/16/07; 12:19:07

Gold to Edge Up in 2007 | Clare Black, Reuters | 01-16-07
GoldendomeWhere are the top of the page charts?#1511651/16/07; 13:01:32

The market chart service that has always appeared at the top of this discussion page is not showing today. Is that a technical problem?
mikalBanks withdraw fixed-rate mortgage offers!#1511661/16/07; 13:09:43;jsessionid=2DD4BEHHYMXQJQFIQMFSFFWAVCBQ0IV0?xml=/news/2007/01/16/nbanks16.xml

'Tis but a footnote. No make that an oddity, to be filed under "The Odd and Unusual". Read it if you've nothing better to do. ;)
After this Telegraph piece appropriately came out with other "Main" news, observant 'moa' was quick to append succinctly @ another board: "Trap door slams shut on the house loan trap
Banks have just ceased to lend on fixed rates mortgages ..... as mortgages are rolled over in the next 5 years only option will be 10-20% "floating rates"... the debt trap is sprung!"

mikal(No Subject)#1511671/16/07; 13:18:50

Yield Spread at crucial point. The buffer, the allowance for risk is gone. Must mean the same as "deficits don't matter".
GoldiloxIraq moving towards division, says bishop of Kirkuk#1511681/16/07; 13:39:15


Mgr Louis Sako voices his concerns over the growing split between Shiites, Sunnis and Kurds. A divided Iraq will not have peace but may confine Christians in their own ghetto.

Kirkuk (AsiaNews) – As the effects of Sunni-Shia clashes and Saddam Hussein's execution gather momentum, Iraq is moving towards a terrible division with the US doing nothing to stop it, says Mgr Louis Sako, Chaldean Archbishop of Kirkuk.
"Internet sites and papers are already publishing the new political maps with the Kurdish north, the Shia south and the Sunni centre," he said. The real problem lies in multiethnic areas like Kirkuk and the Church.
For Mgr Sako, natural gas-rich Kirkuk is a time-bomb, "a source of dangerous tensions".
For Christians there is the danger of ending up in a regional ghetto, when the best solution would be to guarantee freedom of religion to everyone in every part of the country.
Mgr Sako, what kind of Iraq do you see emerging this year?
Iraq is sliding towards division. Ongoing clashes show that and the Americans are doing nothing to stop that. The north is Kurdish (Kurdistan), the south is Shia (Shiastan), and the centre is occupied by Sunnis (Sunnistan). Internet sites and papers are already publishing the new political maps! This will have serious consequences for neighbouring countries like Turkey, Syria and Iran, where the local Kurdish population is demanding autonomy or independence but where local governments are opposed. The division of Iraq is not a solution and will not bring peace and stability.

What are the consequences for the country of Saddam's and his right-hand men's execution?
The tragic and disgraceful execution of former President Saddam Hussein has widened the Sunni-Shia divide. For Sunnis Shia Iran is the main cause of their marginalisation and for what is happening in Iraq. Shiites have taken power but the current government has failed to achieve the desired reconciliation or to ensure peace.

In 2007 a referendum in expected to be held that might result in Kirkuk joining either Kurdistan or a Sunni province. Some observers are of the opinion that this might a time-bomb…
Huge interests and dangerous tensions gravitate around Kirkul. The city is not homogeneous, nor ethnically uniform. Residents are Muslim, Christian, Kakai, Kurdish, Arab, Turkmen, Chaldeans, Assyrians and Armenians. Will it be an independent political and administrative entity? Annexed by Kurdistan? Or by the neighbouring Sunni province? Everyone is waiting for the referendum which won't be easy to pull off.
On January 13 rebels shot dead two businessmen and blew up a Shia mosque under construction in the Nida neighbourhood, on the city's east side. There are thieves or people who just demand money without carrying out kidnappings. Five Christian families have paid a ransom; others are planning to move to the north or to Syria. Things are going from bad to worse and the population is living in fear and uncertainty, not knowing where they will live!

What place will there be for Christians in Iraq?
Christians are confronted with increasing difficulties. For some time, some people have been thinking of gathering them in a specific area, the Nineveh plain. They would have their own territory, but to be viable the idea of a protected zone, a safe haven, which is viewed sympathetically by the Kurds and even the Americans, needs an end to the violence and remains in any event a dangerous plan. The Nineveh plain is largely surrounded by Arabs and Christians would serve as a useful and undefended buffer zone between Arabs and Kurds. In my opinion it would be preferable to work at the constitutional level and each area to guarantee religious freedom and equal rights for believers of all faiths throughout the land, including Christians who can be found everywhere.


"On a cold and dark Kirkuki mornin',
Another little baby boy is born
In the Ghetto . . . the Ghetto"

mikalDebt and destiny#1511691/16/07; 13:52:35

Should Atlas still shrug? The threat that lurks behind the growth of complex debt deals
By Gillian Tett | Published: January 15 2007 02:00 | Last updated: January 15 2007 02:00 -- Snippit:
"At a glitzy dinner in a Mayfair hotel in London last week, prizes were awarded to the best capital markets performers in 2006. Strikingly, the group that grabbed the tag "best financial borrower" - meaning, most creative in raising funds - was not a bulge-bracket Wall Street or City name.
Instead the honour went to Northern Rock, a lender to homebuyers, which is based in north-east England's gritty Newcastle and has become an enthusiastic issuer of mortgage-backed bonds.
The award points to a much bigger shift gathering pace in the financial world - one creating headaches forpolicy-makers as they try to guess where the next financial crisis might pop up or when to call the turn in the interest rate cycle.

Derivative financial instruments have existed for three decades and some US institutions have been repackaging mortgages into bonds since the 1980s. But what has changed this decade is that these products of so-called structured finance, the banking activity that devises them, have mushroomed in size and become vastly more complex (see charts). These days, that often involves not just the issuing of mortgage-backed bonds by lenders such as Northern Rock but also the use of these securities to create new instruments called collateralised debt obligations (CDOs).
In effect, that means one asset - such as a mortgage loan - is being used and reused many times over to create new trading and hedging opportunities. It is akin, in a sense, to how a small amount of sugar can be spun up into a huge cone of candy floss."
Mikal-- Loads of familiar stuff presented in an original way. This topic could fill volumes(why this piece is long. A lone voice in the wilderness here empathizes with Usagold on many aspects of derivatives, monetization and so forth.

USAGOLD Daily Market ReportPage Update!#1511701/16/07; 15:57:33">
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

January 16 (Reuters) -- U.S. gold futures ended slightly lower in choppy trade on Tuesday, following strong gains from the previous session, as a higher dollar and tumbling oil prices prompted investors to sell the precious metal.

The February contract on the COMEX metals trading division of the New York Mercantile Exchange settled down $1.00 at $625.90 and traded in a range between $623.20 and $629.00.

Gold seesawed and changed directions several times throughout Tuesday's session. Physical buying and a weaker dollar helped boost prices in early trading, but the yellow metal had later succumbed to plunging oil prices.

"It's a combination of the oil market and the dollar strength today, which put a damper on the gold price," said Bruce Dunn at Auramet Trading. Dunn pegged the February contract's near-term price forecast at a range from $615 to $630. "I believe that the range would definitely remain choppy. The two components that you have to look at are the dollar versus the euro, and the oil prices," Dunn said.

Oil prices plunged more than 4 percent to below $51 a barrel after Saudi Arabia said OPEC production cuts were working well and there was no need for an emergency meeting of the producer group.

The price of crude oil has fallen over 16 percent since the end of last year, in part due to warm weather in the U.S. Northeast, the world's top heating oil market.

"A choppy session has been seen in the U.S. today with initial gains being capped and swiftly reversed by falling oil prices," said James Moore, an analyst at TheBullionDesk.

The dollar was up across the board against major currencies by mid-afternoon, hitting a 13-month high against the Japanese yen, after it slipped against the euro.

Carlos Perez-Santalla at Hudson River Futures attributed gold's early weakness to its sharply higher finish last Friday, when the February contract spiked 2.1 percent on fund buying. "We are a little soft because we rallied too much on Friday."

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

FlatlinerA little sunshine on a winter's day#1511711/16/07; 16:29:00

Nuggests of freedom.
melda laureGold Oil and Lumber.... and now grain too.#1511721/16/07; 16:43:37

Distillery Demand for Grain to Fuel Cars Vastly Understated
World may be facing highest grain prices in history.
by Lester R. Brown, Earth Policy Institute

Note the side bar in this article:

"The policy goal should be to use just enough fuel ethanol to support corn prices and farm incomes but not so much that it disrupts the world food economy."

Now what chance that "gold for oil" becomes "grain for oil"? My best guess: ZERO of course. But in the meantime it is one more football for the interventionists to kick around. Suppression will not cause grain to magically appear, but starving out the 3rd world might- worked for oil in the asian crisis anyways.

TownCrierFinding Gold Online#1511731/16/07; 17:21:00

(excerpts) -- I recently put questions to Don Tapscott, the author of 10 books, including the recently published "Wikinomics: How Mass Collaboration Changes Everything".

MG: Don, the book opens with a story of a Canadian gold mining company named Goldcorp. Now, as a way of explaining this concept of Wikinomics, tell us about the story...

DT: It shows that the Web is moving beyond social networking to becoming the foundation of a new mode of production, basically.

The company Goldcorp was run by Rob McEwen. The reason I know this guy is he's my neighbor and he found himself taking over the company, but his geologist couldn't tell him if they had any gold or where it was.

He got quite frustrated, and he was ready to shut the whole thing down ... and he wondered, if my guys don't know, maybe somebody else knows.

He did a radical thing. He published his data on the Web and held a contest called the Goldcorp Challenge -- $500,000 for anybody who can find gold on the property.

He got 77 submissions ... and for his $500K, he found $3.4 billion worth of gold.

His market value went from about $100 million to $9 billion, and because he was the principle shareholder, I can tell you, he is a happy camper... he just renovated his house now that he's a billionaire.'s a powerful story because it really underlines a lot of the big changes that are underway right now and how you orchestrate capability to create value.

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

TownCrierMy comments on the previous Goldcorp/McEwan story...#1511741/16/07; 17:23:25

The CREATION of value is one thing, but CONSOLIDATING it is every bit as important. Among the Goldcorp shareholders, McEwan demonstrated some "Wealth Consolidation Know-How" by converting his paper's purchasing power into tangible addtions and improvements to his physical residence.

Exchanging paper for gold is yet Another tried-and-true method to consolidate -- that is, to ACTUALIZE -- your papery gains. Yet, how many people utterly fail to perform this vital safety measure on a regular basis?

Some people risk the entirety of their productive lifetime, swinging from one thin thread to the next, with no tangible net whatsoever. I wouldn't want to be that swingin' monkey when something suddenly snaps.

Find your own gold online........ Sign in for USAGOLD's free Info Packet on gold ownership and you'll bring yourself within very easy arm's reach of know-how and a reliable financial safety net.


MarkeTalkShortage of Gold Coins In Dubai#1511751/16/07; 18:30:22

It is not very often that I get time to post a message. Today I got an e-mail from an old client who brought this story to my attention. Apparently, the demand for gold coins in Dubai is so great that there is now a shortage. Could this be a harbinger of things to come on this side of the world? Are the Arabs more savvy financially than their American counterparts? My high-level sources around the globe tell me that the financial system is under the greatest amount of strain now than ever before. In one word, it is the derivatives bubble. You would not suspect anything is wrong if you were watching the talking heads on CNBC, which flashes in prominent orange color the fact that the Dow Jones Industrial Average is so many points above its previous record high closing price. It seems as if the powers that be are intentionally creating diversions so that the general public won't know what happened when the the whole thing caves in. More importantly, the general public is being lulled to sleep with a false sense of security, which includes their failure to buy gold at these prices. In my humble opinion, gold's sharp drop on January 5th to $606/oz. was engineered by our Wall Street friends. It also appears to be a higher bottom on the chart, which can act as a spring board for a move above the $730/oz. level seen in May 2006.

Along the same line of government intervention and/or suppression, how many of you heard the story told by Steve Quayle, when he was interviewed last week on "Coast to Coast AM", that the US government has now imposed a type of gag order on scientists (geologists, astronomers, physicists, etc.) who are reporting the increasing number of earth changes and the potential for earthquakes and volcanic eruptions? People at the top know what is going on and they don't want us to know until it is too late. I am sure they justify their actions by saying it is irresponsible to publish a story, which can cause a panic. The argument can be made that a panic will certainly ensue when a so-called geologic event occurs so why not allow people to prepare in advance. I think the answer boils down to one word: control.

Finally, for those clients of mine who have been watching the markets with great interest and who feel uneasy about the financial situation with the US Dollar, please give me a call here at the office so we can discuss if you have covered yourself with enough gold.


FlatlinerExpecting hedge fund failures?#1511761/16/07; 18:49:26

Logic would have it that if you read the news and subscribe to the peak oil concept, you might think that the price of oil would go up. But, if you read through the archives of this site, you might find that oil is a little more political than that. Politics seems to play a large role with regards to how oil is used and when we look today, we see Saudi Arabia working to make their oil very cheap. Could it be that they are trading oil for security? It looks like their neighbor Iran is doing the same thing – but just not in dollar denominated trade. The oil if flowing in great amounts, as we read about OPEC countries ‘cheating’ on their export quotas, but I question if this cheating is not planned. I also question if the dollar will find support if the security that is provided by the US is removed. As of late, I'm starting to think that Bush is a mercenary military more than anything else.

Last year, I was very confident that the use of nukes would not take place. This year, I'm not as confident and I, too, would move the hands of the doomsday clock closer to midnight. But, as long as the oil keeps flowing, I will continue to lean towards the outcome that we may still have a chance. At least, for a little while longer.

Meanwhile, as the price of oil drops, one would expect hedge funds to drop like flies. As they do, I'm sure the news will be downplayed and swept under the rug as more ‘bailouts’ occur. But, as they fold, the dollar weakens and we're one step closer to a total loss of function.

The number one rule right now is to save your life so you can enjoy your life savings of gold. When the hands of the doomsday clock once again move away from midnight, it will be time to convert that gold capital into useful productive enterprises that maintain a positive quality of life.

GoldiloxHR 6#1511771/17/07; 05:04:57

Just got a poll from the House of Representatives about HR 6, a bill to roll back subsidies and tax breaks for oil companies.

If passed, it will probably inspire a sizable bump in pump prices.

mikalEngaging gold or at least mentioned in passing#1511781/17/07; 08:34:05

Throughout all the diverse committments to gold, admissions of love are rarely made public. So to avoid embarrassment, those who call themselves devotees consistently profer a tepid or lukewarm reply only when polled about their sentiment.
Others are inclined to a strictly cursory and hearsay approach to estimating price, while still others have long since made up their minds, or had it made for them.
But don't let my little misgivings hinder your enjoyment of yet another "bullish" news story:
Top metals analysts bullish on bullion - Business - Sydney Morning Herald - 01-17-07

968OPEC is "concerned" about decline of US dollar#1511791/17/07; 10:03:09

by Julie Ziegler and Andy Critchlow

The Organization of Petroleum Exporting Countries is "concerned"' about the decline in the dollar and may price oil using a basket of currencies unless the US narrows its trade deficit, the group's head said.
"We recognize the weakness of the dollar at this time and we are naturally concerned about it,"' said OPEC President Edmund Daukoru. "We are not rushing out there to consider other currencies."

The purchasing power of OPEC nations that rely oil sales priced in dollars for the majority of their foreign exchange earnings has fallen as the dollar weakens, putting pressure on central bank governors to find alternatives. Daukoru said the group has looked into a mixture of yen, dollar, euro and sterling and for now has ruled against any immediate change.
A widening gap in the current account, the broadest measure of trade, means an increasing amount of dollars need to be converted into other currencies to pay for imports. The US current-account deficit was $ 218.4 bn in the second quarter, the second-biggest on record.

Against the euro, the dollar has declined 11 % this year, to $ 1.3153 on 14 December in New York. The Fed's index of the dollar compared with seven major currencies fell to 80.78 on Dec. 8 from the year's high of 85.96 in March. The gauge is within 2 % of the lowest since 1995.
Russia and members of the Organization of Petroleum Exporting Countries decreased their dollar holdings to a two-year low of 65 % of total holdings, from 67 % in the first quarter, the Basel, Switzerland-based BIS said in a report.

OPEC, the producer of 40 % of the world's oil, approved a 1.9 % production cut at the meeting in Abuja. Output will be reduced by 500,000 bpd as of Feb. 1.
The cut is in addition to the 1.2 mm bpd reduction agreed upon by the Organization of Petroleum Exporting Countries on Oct. 20 in Doha, Qatar.

Source: Bloomberg

968Venezuela directs growing share of oil profits into euro#1511801/17/07; 10:07:58

Venezuelan leader Hugo Chavez is directing a growing share of the country's oil profits into euro as the dollar and crude prices fall. The dollar, down 9.5 % against the euro this year, may face more pressure in 2007 because Venezuela and oil producers from the United Arab Emirates to Indonesia plan to funnel more money into the single European currency.
"The dollar has suffered a long process of deterioration," Domingo Maza Zavala, one of seven board members at the central bank of Venezuela, said on Dec. 14. "The diversification strategy started this year."

Banco Central de Venezuela has slashed the percentage of its $ 35.9 bn worth of reserves invested in dollars and gold to 80 % from 95 % a year ago, said Maza Zavala. The country, the world's fifth-largest oil supplier, has boosted its euro holdings to 15 %, from less than 5 % in the same period.
The dollar has slumped against the European currency in 2006 as growth in the euro region outpaced the US for the first time in five years. The dollar fell against the euro to $ 1.3094 in New York. The US currency is little changed versus the yen this year, and currently trading at 117.81 yen.

Bank Indonesia is boosting euro holdings, said Senior Deputy Governor Miranda S Goeltom on Dec. 13. Indonesia has $ 39.9 bn in reserves. Sultan Bin Nasser al-Suwaidi, the governor of the Central Bank of the UAE, in November said he was considering when to shift as much as 8 % of the nation's $ 24.9 bn in reserves into euros.
The central banks are changing policy because the oil price has come down a long way and the dollar has been declining, said Michael Derks, chief markets strategist at Arch Financial Products, a London-based hedge fund. "The euro stands to benefit."

The Organization of Petroleum Exporting Countries, which produces 40 % of the world's crude oil, said at a Dec. 14 meeting in Abuja, Nigeria, that it would cut output by 500,000 bpd to boost prices. Crude oil for January delivery fell 36 cents, or 0.6 %, to $ 63.07 a barrel in after-hours electronic trading on the New York Mercantile Exchange. Prices have fallen from a high of $ 78.40 in mid-July.
Crude is priced in dollars and the US is the biggest consumer, importing around $ 400 mm worth of the fuel a day in 2005, according to data from BP, Europe's second-biggest oil company.

The share of foreign-exchange deposits held in dollars by OPEC members and Russia, the largest non-OPEC oil exporter, fell to a two-year low of 65 % during the second quarter, from 67 % during the previous three months, Bank for International Settlements figures show.
Venezuela may also be motivated by animosity toward the US, said Rick Arney, chief currency strategist in San Francisco at Barclays Global Investors, which manages $ 1.7 tn in assets.
"There is a political overlay to all of this," said Arney. "Buying the dollar is not politically popular for some of these folks."

Chavez, re-elected as President for six years on Dec. 3, told the UN General Assembly on Sept. 20 that the US is "the greatest threat" to the planet, and has repeatedly described US President George W. Bush as "the devil." He also says Bush's administration is trying to have him killed.
Chavez called on OPEC to sell oil denominated in euros rather than dollars at a meeting of the group in Caracas on June 1, supporting a proposal made by Iran.

Some analysts said the shift by oil-producing nations into EUR is unlikely to weaken the dollar. OPEC nations reduced their dollar deposits by $ 5.3 bn in the second quarter, compared with holdings of $ 632 bn overall.
"It seems to be inconsequential in the large scheme of things," said Marc Chandler, global head of foreign-exchange strategy at Brown Brothers Harriman & Co. in New York. "If anything, we should be surprised how small the outflow is."

The euro climbed as much as 0.5 % on Dec. 11, the most in a more than a week, when former Federal Reserve Chairman Alan Greenspan said there are signs OPEC nations are switching their reserves out of dollars.
"A risingeuro is a source of capital gain for central banks and a source for offsetting the capital loss created by the dollar'' decline, said Bankim Chadha, Deutsche Bank AG's head of macro foreign-exchange in New York and a former International Monetary Fund official. This gives "an incentive to buy euros."

OPEC members and Russia increased the percentage of their foreign-exchange deposits held in EUR to 22 % in the second quarter from 20 %. By contrast, the global average is about a third, according to the Basel, Switzerland-based bank.
Oil states will probably buy the European currency at a faster rate to bring their reserves closer in line with other nations, according to David Durrant at Julius Baer Investment Management in New York.
"They've done very little diversification in the past," said Durrant, an investment strategist at Julius Baer, which oversees about $ 40 bn. "We're at the start."


FlatlinerConfused with a double ??#1511811/17/07; 10:47:33

Oh look, GATA's own Chris Powell is mentioned in the testimonials with regards to the Wanta crisis. This is exactly what I've been looking/waiting for and, wouldn't you know it, I can't rememeber seeing the ‘piece’ that was written. Does anyone have this ‘piece’? Or, better yet, would the forum member – Sr Chris Powell – be willing to confirm the truth in this statement? Is it true that a forum member has direct contact with people that believe the information posted by Christophor Story is ‘true and accurate’? Any details would be greatly appriciated – expecially if this testimonial sensationalizes GATA support.

From the link:

"As Chris Powell from GATA had written in his piece, he was having dinner with two very influential people. One a hedge fund manager and the other a fund manager, and BOTH agreed with your information and knew it to be true and accurate! Many people have taken notice and I can assure you many more will, as this greatest bank heist in human history continues to unfold" – Richard Brandeis, 02 January 2007, The Titan Group Ltd, USA.

FlatlinerFive minutes to midnight#1511821/17/07; 11:00:52

"This deteriorating state of global affairs leads the Board of Directors of the Bulletin of the Atomic Scientists--in consultation with a Board of Sponsors that includes 18 Nobel laureates--to move the minute hand of the "Doomsday Clock" from seven to five minutes to midnight."

This doesn't make for a good business environment.

GoldiloxLate "adjustment"#1511831/17/07; 11:15:03

Paulson's Pirates are trying to rein in Gold's morning stretch in the final COMIX half-hour, but it looks like buyers await them.
Paper AvalancheAwaiting Chris Powell's Response#1511841/17/07; 11:28:51

I have been checking the baord every five minutes to see Chris' response to the Wanta story per Flatliner below. If true, wow. If not true, then this would confirm my suspicion that this is an elaborate hoax / diversion. The attorney who has reportedly been corresponding with the Treas Dept (Thomas Henry) does not show up in the national attorney directories online. Wondering if he is fictitious as well. Take care. PA
Druid@Flatliner#1511851/17/07; 12:02:47

"If you have been keeping up with the Leo Wanta story regarding the $27.5 trillion in funds that were put into play to crash the Russian economy, there are some interesting developments.

Christopher Story is now blasting Greg Szymanski for making things up. Problem is Christopher Story seems to be making things up too and when questioned about it he has threatened to sue, called people names like "Useful Idiots" and otherwise refuse to explain why his stories now look like Szymanski's stories.

One of the problems I have with Szymanski is he will latch on to anything, including private emails and publish them in his attempts to grasp to be a "me too" type of reporter. In this one he put out an email that was between another person and I without my permission. That is a bad habit he has, that being running with a story without checking the facts of a story from at least two sources. That is professional investigative journalism; the other is a desperate attempt to again attention and notoriety.

I have yet to see that the Wanta money is recoverable and probably was diverted by Clinton and Bush many years ago to keep the lid on. Most of you recall that I am in Europe, where much of these Wanta funds are supposedly hidden away. I have excellent contacts with multiple governments and bankers and none of them can find accounts in the names I was provided by Wanta. If the account name and number does not exist it either never existed or it no longer exists, or someone is hiding from the reality of it.

I am not saying Leo Wanta is lying, I am just stating a simple fact that the funds (if ever) are not where they are supposed to be. That could be explained simply by the fact that GHWB, Clinton and the current Bush fiasco have had plenty of time to figure out how to get those funds directed elsewhere and not repatriated to the United States.

The US District Court order that addresses the Wanta v. United States matter reads clear but it does not assertively state that the funds were exactly where they were supposed to be. They directed Wanta to recover them and pay the taxes, none of which has happened to date since the April 15, 2003 date on that court order.

Both of their articles are full of holes, misstatement of fact and overall not very professional reporting on the issue. For example, the $4.5 trillion was wired (purportedly) to Bank of America, not Goldman Sachs. I got that directly from Leo Wanta, not Story or Szymanski. I have spoken to Leo Wanta many times and he is working with Morgan Stanley, not Goldman Sachs. They keep trying to make a leap to connect Secretary of Treasury Paulson (former Goldman Sachs CEO), Goldman Sachs and Israel. The facts in the chain of evidence I am aware of do not involve Goldman Sachs at all.

They have reported that Secretary Paulson was subpoenaed, arrested and convicted in like a single day, but when questions came up about why Paulson was at the Ford funeral and not in jail as they claimed out came the obfuscation by Christopher Story. I have seen no evidence that Paulson went to Israel, yet they keep spreading that like it is fact.

If anything, the funds are probably being used to artificially prop up our stock market, keep the petrodollar in play even while weakened due to our own excessive policies in Washington, DC and continuing to fund black ops and financial assaults on nations that are not playing along. The funds might also be what are covering some butts on the derivative positions of our banks and Wall Street firms to keep our economy from turning into a black hole.

When I was affiliated with one of the largest Wall Street firms in the early 1980s they used a term on the street "Green Wall". That was in reference to a huge sum of money (trillions in US dollars and other currencies) that was "flight money" and literally went around the globe every 24 hours, like from Tokyo to London to New York. It always stopped overnight and went on to avoid taxation or confiscation for legal or judicial reasons. It was only there when the Tax Man was asleep and much of it was stolen money, drug money, dark ops money, etc.

There may be one Hell of a bank workout in progress right now and undisclosed to the American public. I did a lot of commercial real estate workouts when the S&Ls and banks collapsed between 1985 through to 1992 from coast to coast. I know what a secretive workout looks like and smells like. I know to what extent the US government will go to cover things up so they look good and honorable and diligent when the truth is they are corrupt and sleazy.

Small example: I was shown a huge warehouse one time by a former high level FSLIC person who was the director of OLD, Office of Liquidation and Disposal. It was the size of an arena football field and tall file cabinets crammed into the space. The example the FSLIC director was making to me was how dismal the FSLIC and Resolution Trust Corporation work out would be. What he was showing me were the titles, deeds, bank records of the 1929-1933 Building and Thrift collapse and literally hundreds of billions of dollars worth of inner city property that the federal government took over and has sat on since the Great Depression.

He explained the problem our government has thusly: "They create a committee to study the problem and develop solutions. The goal is to engineer a camel into a horse so they make themselves look good. The problem is they always wind up engineering that camel into a rat and then still claiming they are good at what they do. They are in a word pathetic. They actually look at all of these files right here as assets of the federal government and will not let us sell any of it. Large parts of many inners cities have sat idle now for 60 years because some bureaucrat looks as these as his or her assets, the justification for his or her job."

Some are even suggesting that the Wanta funds are starting to smell like NESARA, or an easy fix to decades of fiscal irresponsibility in our national capital. There are no easy fixes to the problems our government has created nor are there any easy fixes to the massive amount of derivatives or you getting off scot-free on your home mortgage and credit card debts.

America is a nation that lives on debt and credit and has forgotten the simple rule of cash is king."

Druid: This author questions some assertions then provides his own spin.

TateInteresting diverse opinions about US of A from:#1511861/17/07; 12:11:02

Don't worry. Sudan IS an oil exporter, unfortunately for them, Iraq and Iran HAVE the largest reserves. That is why the energy industry-military industrial complex group will liberate Iraq first, then go after Iran, then to Nigeria, then to Sudan, then Venezuela and lastly Cuba which will resume to annex. U.S.A. liberating one oil rich country at a time. And like white pawn mentioned it, it's business that drives US policy, not humanitarianism.

Can they libarate us in CANADA?

GoldendomeThe investment community wants my money.#1511871/17/07; 12:22:16

A fellow from some investment company just left. He had come by to see me unannounced and uninvited. Being polite, I asked him in and we talked awhile.

One thing that had risen to the top of his talking points- was some sort of unified investment trust. I put my money in; it's pooled; and these "big guys", insurance co.'s etc., invest it mainly in the stock market. They guaranteed, he said, 5%/year as a minimum, all stock gains were mine, my initial capital never declined, I could begin, nearly immediately, withdrawing from the fund. (Too good to be true?)

I was skeptical. How can they keep this promise in the event of an extended falling market? The representative said they had done it ("bridged the decline") during the 2000 to 2002 decline. (In my mind, this was neither the deep nor the extended decline that I had in mind.)

I was non-committal to his program.

These "big guys" must do a lot of hedging. Possibly buying "puts" on individual stocks that they own, or puts on the indexes in general, or some other hedging that I can't imagine. To me, it shows the heady confidence now that is acting like a vacuum cleaner…sucking money into the equity markets at ever-higher prices. The company rep. said that "a lot of people" are doing this. Sounds like another aspect of the financial Ponzi scheme. Better to stay off from the top of this particular bubble, I think.

MatthewWanta stop laughing.#1511881/17/07; 12:22:32

This Wanta nonsense is the last desperate throw of the dice. As if anyone with half a brain would trust this character with trillions.
Dollar collapse expected, so:
1) Mysterious pile of cash turns up from nowhere, squares deficits, suddenly dollar perks up and the Magic Roundabout grinds into action again.
2) Possible 2000 tons of gold also appears out of nowhere, a la Cheshire Cat, which can be dumped on the market to flatten gold price - smiling all the way.

The Ambassador of Somalia for Switzerland AND Canada? Could be a neat way of moving large amounts of metal around, no customs as diplomatic immunity etc etc.
Does this heap of trillions of dollars already exist, or is it still a few clicks of the mouse away? Handy the Fed is not publishing M3, isn't it!

MatthewMore on Wanta#1511891/17/07; 12:24:12

Smart how they let the Internet anoraks dig this up.
mikal(No Subject)#1511901/17/07; 12:26:12

Foreign Long-Term Investment Down in Nov
Wednesday January 17, 10:56 am ET | AP
Foreigners Buy a Net $58B of Long-Term US Securities in November, Down 23 Percent

WASHINGTON (AP) -- Net foreign acquisition of long-maturity U.S. securities was $58 billion in November, down 23 percent from $74.9 billion in October, according to a U.S. Treasury Department report released Wednesday.
The monthly Treasury report has recently emphasized cross-border acquisitions of securities with maturities of more than one year, including non-market flows such as stock swaps and principal repayment on asset-backed securities.

Excluding such non-market flows, net buying of long-term U.S. securities would have totaled $68.4 billion in November, down 20 percent from $85.3 billion October, according to the monthly Treasury International Capital report, known by its acronym TIC.

The report's most comprehensive category, "monthly net TIC flows," includes non-market flows, short-term securities and changes in banks' dollar holdings. This measure of net foreign capital inflow was $74.9 billion in November, up 24 percent from $60.4 billion in October.
As for the long-term securities category, foreign net purchases of U.S. Treasury notes and bonds was $27.1 billion in November, compared with net buys of $26.3 billion the previous month.
Private foreign investors bought a net $25.4 billion in Treasury notes and bonds in November, after making net purchases of $8 billion the previous month. Foreign official institutions such as central banks bought a net $1 billion of these Treasurys, compared with net purchases of $18.5 billion the previous month.
Net foreign purchases of debt issued by U.S. government-sponsored agencies like Fannie Mae and Freddie Mac totaled $14.7 billion in November, down from $15.2 billion in net purchases in October.
For U.S. equities, net foreign purchases totaled $1.8 billion in November, down from $23.2 billion in net purchases the previous month.
For corporate bonds, net foreign purchases were $63.9 billion in November, up from $39.5 billion the previous month.
Net foreign equities and bonds purchased by U.S. residents -- which affects the overall net inflow figure -- were $39.1 billion in November, up from October's $18.9 billion.
Total foreign holdings of Treasury bills, notes and bonds was $2.2 trillion in November, up from $2.163 trillion in October. Foreign official holdings of Treasury bills, notes and bonds rose to $1.326 trillion in November from $1.317 trillion the month before.
Japan remained the largest holder of U.S. Treasury securities, with its holdings falling $2.2 billion in November to $637.4 billion.
China remained the second-largest holder of U.S. Treasurys, as its stake rose to $346.5 billion from $345.0 billion. The U.K. remained in third place with holdings up to $223.5 billion from $207.5 billion.
Treasury holdings in Caribbean banking centers, which are associated with investment funds, rose to $63.6 billion in November from $56.3 billion the month before.
Treasury holdings by "oil exporters" -- a category comprising mainly members of the Organization of Petroleum Exporting Countries -- fell to $97.1 billion from $97.9 billion. South Korea's Treasury holdings fell to $67.7 billion from $69.0 billion.

TopazGold:Bond#1511911/17/07; 12:28:34

Rather than a softer Dollar, it was a softer Bond giving it up for Gold today.
When I went to bed, electronic Bond was green 15bp and Gold was drooping fast. That changed from NY Open as the Bond reversed and Gold found it's legs.

Right on queue!

GoldiloxGold: a potential mania#1511921/17/07; 12:55:57


The Bank Credit Analyst (BCA) has identified four pillars cementing the case for a long-term bull market in gold bullion. Gold bugs will be relieved by the finding that the long-term uptrend in gold prices remains intact; the caveat is that investors should wait before buying.

BCA Research identifies as the first pillar global liquidity settings, which are likely to remain "plentiful because inflation will stay low". Inflation rate profiles differ across the world, but the latterly feared crude oil price shock appears to have receded. In the world's biggest economy, the US, the inflation profile could now even be on the path to returning to disinflation.

Core US consumer price inflation was static in November, reinforcing the likelihood that threats and worries over inflation are now on the backburner. The surge in inflation early in 2006 had completely lost momentum, not least on a slowing US economy. Retailing, which comprises around 50% of the US's CPI basket, is now experiencing severe disinflation, as retailers slash prices to prop up demand.

The second pillar identified by BCA Research is simply that investor demand for gold will rise in response to higher gold prices, after an extended bear market. While this may sound counterintuitive, the profile of the dollar gold price since early in 2002, when the latest bull market set in, closely shadows the progression of the dollar gold price during the 1970s, the previous gold bull market. The latter developed into a very big bull market indeed, one that many investors refuse to forget.

The third pillar is identified as central bank transactions in gold bullion; this "could take time to re-emerge after the wave of liquidation in recent years". Central banks, mindful of geopolitical risk and the persistent dollar bear market, have taken to increasing and diversifying foreign reserves. For a number of countries, gold is a natural choice as an additional or increased component of national foreign reserves.

The fourth pillar is seen as Chinese and Indian private sector gold demand; this should improve as the wealth and incomes of individuals in those countries continue to rise. Chinese and Indian private sector buyers have long been major private sector buyers of gold bullion.

A number of experts offer further factors in describing the possible forward profile of gold bullion prices. Stephen D. Walker, a director of global mining research at RBC Capital Markets, argues that crude oil prices remain "an important catalyst for gold, likely reflecting geopolitical risk rather than an inflation concern. We believe oil will remain a key driver although any weakness in gold price would be offset by strong physical demand from India, the Middle East and Asia".


The author goes on to list his favorite miners.

mikalTipping points#1511931/17/07; 13:57:44

The weak dollar does little to help correct America's trade imbalance - By Eduardo Porter and Mark Landler Published: January 16, 2007 - International Herald Tribune
Excerpts: "But the dollar's long and steep slide over the past five years against many of the world's major currencies — including the euro, the pound and the Canadian dollar — has not been anywhere near enough to right America's lopsided trade imbalance with the world, which hit $702 billion in the first 11 months of 2006, on track to easily outstrip the $717 billion of 2005 and hit a new record.
"My U.S. colleagues tend to believe that exchange rates alone can carry out this adjustment which I, looking from the outside, find hard to believe," said Thomas Mayer, chief European economist at Deutsche Bank in London. "You would need to have unrealistically large changes in exchange rates to overcome that gap."
There are several reasons why currency shifts alone are unlikely to do the trick."
Mikal-- Well researched and straightforward journalism on the dollar is hard to come by. Here the dollar's plight can be quickly understood so even beginners can begin to
see the ultimate impact on their finances, spending et al.

"The Chinese and other Asian central banks are beginning to diversify more into euros, which has helped fuel its recent appreciation. "That's really the main reason," said Ben Simpfendorfer, a currency strategist in the Hong Kong office of the Royal Bank of Scotland.
Such diversification, however, will have limited effect unless Asian countries buy a lot fewer Treasury bonds, slowing the flood of credit that has kept interest American interest rates low and supported consumer spending. And that would harm the Chinese as much, if not more, than it would Americans. "With China," said Waldman, the manufacturing economist, "the capacity for trade imbalances to adjust is minimal.""

USAGOLD / Centennial Precious Metals, Inc.Your participation is welcome...#1511941/17/07; 14:41:48">Napoleon III gold coins
mikalOptions maneuvers getting raspy breathing#1511951/17/07; 14:48:25"

The manipulation of gold has many reasons. Bill Murphy
is especially adroit, daily noting chicanery and the successes in the market that leave gold in good shape and always with more fundamental support.(Yesterday's Midas report was one of his best)
The greed/lust around options expiry is always in the back of my mind. While success at making options
expire "in the money" for the big bullion banks and trading houses is more elusive than ever, to a buy-and-hold, long term investor, fund, bank, or collector, the net effect is to greatly enlarge gold's prospects and underdog status/appeal.
At another forum, an old hand from Germany commented on NY options in a somewhat resigned way: "options expiration week
(Gold.Martin) Jan 17, 15:36
Next week will have more dynamic."

mikalTypo#1511961/17/07; 14:56:52

"While success at making options
expire "in the money" for the big bullion banks and trading houses is more elusive than ever..." to read:
"success... will become more elusive than ever..."

USAGOLD Daily Market ReportPage Update!#1511971/17/07; 16:26:29">
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

January 17 (MarketWatch) -- Gold futures finished above $630 an ounce on Wednesday, with the benchmark contract at its highest closing level in more than two weeks, supported by a weaker dollar and strength in oil, both of which tend to raise investment demand for the precious metal.

"Gold is rising because the U.S. dollar is falling because net foreign investment in the U.S. is down," said Sean Brodrick, a contributing editor at Foreigners bought a net $68.4 billion of U.S. securities in November -- that's down from $85.3 billion in October, and less than forecasts of $75 billion, he said.

The February gold contract closed with a gain of $7.40 at $633.30 on the New York Mercantile Exchange after reaching a high of $634.80.

"While gold's movements over the past few days have shown the metal's vulnerability to both oil weakness and dollar strength, the scale of physical buying has been impressive, and could be an early indication of gold's willingness to go it alone this year," said James Moore, an analyst at London-based TheBullionDesk.

"The willingness with which bullion is bouncing higher does give comfort to additional legions of potential buyers," said Kitco's Jon Nadler, an investment-products analyst. And "from what we can observe thus far this week, these are rather sober bets of a defensive nature, thus all the better for gold's longer-term prospects," he said.

Overall, gold has been demonstrating "excellent strength in the face of plummeting oil prices and a stable U.S. dollar," said Peter Grandich, editor of the Grandich Letter. "This tells me the surprises for gold should all be to the upside."

Indeed, "it is a definite show of strength, and once the negative pressures [that oil and the dollar] are providing on gold at the moment are lifted, gold may be poised for a more significant run for prior highs from early 2006," said Peter Spina, chief investment strategist at GoldSeek. "The price action speaks volumes; gold is poised to make a significant move higher once the proper environment provides it the opportunity to do so," he said.

So "if the dollar and oil stabilize or weaken/strengthen, respectively, gold will be carried forward too, but it seems that it is keen to push up without this help," said Julian Phillips, an analyst at GoldForecaster. The support level of just above $610-$615 "seems impenetrable," he said, with physical demand at that level strong.

Crude futures closed higher, recovering from a low of $50.60 a barrel. Meanwhile, the dollar fell, but pared losses after data showed producer-price inflation rose at a faster-than-expected clip in December.

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

mikalBank credit quality showing cracks#1511981/17/07; 17:44:35

Bank results show signs of credit deterioration
But problems with riskier mortgages may not spread, analysts say | Alistair Barr, MarketWatch
Last Update: 6:00 PM ET Jan 17, 2007
SAN FRANCISCO (MarketWatch) -Excerpts: "Fourth-quarter results from several banks suggest the benign credit environment of recent years has begun to deteriorate and could restrain future earnings, analysts said on Wednesday.
Still, credit problems are mostly restricted to subprime and other riskier mortgages right now and shouldn't spread to other areas of the lending industry, the analysts added.
IndyMac Bancorp Inc., which sells so-called Alt-A mortgages, said Tuesday that fourth-quarter earnings will come in well short of analyst expectations because of increased costs from loan losses and delinquencies. (Alt-A loans are for borrowers who don't have good enough credit to buy prime loans, but have enough standing to avoid tapping the subprime market.)...
"Credit has been tailwind for this industry for several years, but it's becoming a slight headwind now."
— -- James AckorRBC Capital Markets...
Past increases in subprime delinquencies have usually been accompanied by rising unemployment, RBC's Ackor noted. That hasn't happened this time, which suggests problems have been caused by deterioration in lending standards, he said.
"This is going to be a sizable speed bump, but it will only be an outright disaster if interest rates rise sharply or unemployment rises sharply," the analyst concluded."
Mikal-- Because real unemployment has been large and getting larger, many will be surprised when the effects finally take hold. Interest rates should also rise further but bank credit has already attracted dangerous foes.
Gold is the antithesis of financial bad dreams.

mikal@Goldilox#1511991/17/07; 17:52:07

Re: Your msg#151177. I agree, higher oil prices already seem conspicuous by their absence. Windfall profits taxes might be the next step after the tax break and subsidy rollback, if it passes the vote.
Paper AvalancheAnyone talk to Chris Powell reagrding the Wanta story?#1512001/17/07; 18:57:20

Surprised that CP hasn't set the record straight yet.

Chris, if you are in the middle of doing so, please excuse my lack of patience.


TownCrierYoung euro threatens dollar supremacy#1512011/17/07; 19:28:15

17January07 --

The U.S. dollar has been the world's dominant reserve currency since the Second World War. It now accounts for roughly 66 per cent of the nearly $5-trillion held in the coffers of the world's central banks. That's up from about 50 per cent at the end of the 1980s, but down slightly from an all-time peak of 70 per cent in the late 1970s...

And yet the U.S. currency is facing its first serious challenge in decades from the infant euro, now five years old.

At the end of last year, the euro quietly reached a key milestone. The value of all euro notes in circulation exceeded the value of all dollars for the first time — $828-billion (U.S.) to $753-billion.

"The euro is the first currency in 100 years that can really compete with the dollar on a global level," said Fred Bergsten, director of the Washington-based Peterson Institute for International Economics.

"The U.S. dollar has been the dominant currency because it's had no competition. The creation of the euro changes all that."

Within five or 10 years, half of all global finance could be conducted in euros, Mr. Bergsten predicted.

Meanwhile, a clutch of central banks have begun to cautiously shift some of their reserves into euros, including Russia, the United Arab Emirates, Qatar, Indonesia, Sweden, Venezuela and Iran.

The change in sentiment among central bankers is ... complex. But some of the reasons include last year's 11-per-cent fall in the dollar versus the euro, growing confidence in the stability of the euro and the maturity of European financial markets...

The wild card in all this is China. It holds 20 per cent of all foreign reserves, or roughly $1-trillion. And the bulk of that is believed to be in U.S. dollars.

Some Chinese banking officials have suggested they may want to diversify out of dollars.

"It's a brave new world for them and we don't know what will drive that decision making."

Bank of France governor Christian Noyer said in a recent speech... "We are neither encouraging, nor discouraging the process. But as a citizen, I cannot help but feel proud of having one of the two main currencies in the world."

...Peter Morici of the University of Maryland [said] "People talk a lot about it, but it hasn't happened."

"Over time, the United States has earned the confidence of people that it will manage their paper assets," he said. "The things people want, they can buy with U.S. dollars. It's a true store of value."

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

Hmmm... Mr. Morici's "true store of value" (ahem) somehow lost ten percent of its value against the 'sclerotic' euro, and lost even more against mighty gold.

Methinks he needs to reevaluate his intellectual premise on the very meaning of value storage.

But any way you slice it, the key point is the dollar has not faced the competition of a viable alternative for transactional use (i.e., the euro), nor has it at the same time faced a viable alternative for reserve usage -- that being gold in vital conjuction with Mark-to-Market accounting practices.

The outcome of the game is a foregone conclusion, but the players still go round and round. Use this time to realign your portfolio to take advantage of gold's inevitable revaluation to levels appropriate to it's transition in status and use.


Chris PowellA forgery in the Leo Wanta business#1512021/17/07; 19:43:33

Sorry to be late in responding to the promptings
here today about the Leo Wanta story, but I spent
the day and the evening at my real job ... for

Anyway, the comment second-handedly attributed
to me endorsing the Leo Wanta story is a
contrivance, a forgery of which I became
aware only this morning when someone e-mailed
it to me. The only things I've ever written
about the Wanta story have been e-mails
replying to individual inquiries asking for
my views on the story. I've told those people
that I think the Wanta business is utter
nonsense. Upon learning of the attribution
to me this morning, I sent a message to the
Internet site that purports to quote me,
asking that the reference to me be removed
because it is false.

That someone has to make up such
endorsements to advance the Wanta story
emphasizes its silliness.

Flatliner@A forgery#1512031/17/07; 21:55:47

Thank you kind sir. Your statement gives much support to "The Chief Brief" (aka. James B.) referenced in one of Story's postings. As your word emanates from this castle, Mr. Story will have to present facts or let time be his friend (foe).
mikal"Sweet liberty!"#1512041/17/07; 22:27:29

Germans Get By Without the Euro - Ambrose Evans Pritchard
Telegraph | Business | January 18, 2007
"There will soon be 65 regional currencies circulating alongside the Euro, but financial authorities aren't worried yet"
You'll like, no, love the way Pritchard frames this for the most part- he doesnt once mention gold, but this is peppered with reasons to own PM's and other tangible assets, gold advocate's jargon and some honest, practical economics with familiar inspirations and motives found
in the world's growing scrip(local specie) movement, and definitely in N. America.

GOLD FINGERDo all American's really want to "rule the world"? #1512051/17/07; 23:37:27

Cold days are lifted up with the shine from my gold coins. To me gold is hope. Once you have it you can look at it, feel it and know its yours.

Other investments seem to have commissions on buying, then on selling and then not to mention the pathetic capital gains tax. So who really made the money here?


Now, perhaps I am late on this comment, but after reading the various posts concerning some Latin countries and their leaders I have to offer this.

Currently, I am SICK!

Sick of the BS that is offered up in our congress. I am not going to bash the president. It's the law makers who are get nothing done types. Ever since 1994 all I have seen from our leaders is nothing but complete decline in the American life and even more decline in the middle class.

The rich will always be rich.

Socialistic or Capitalistic they will always be. The poor is gifted with entitlements from country to country. The middle class is taxed to death, beaten up and chewed up to no end. Families are being increasing over burdened. The divorce rate is at an all time high. The family is deteriorating and this is directly attributed to the over regulated laws and the USA in ability to build from with in.

Greed prevails!!

Never in my life have I seen so many who are looking after for their own sake.

They talk a good talk. Hot air and yet as people loose their jobs and health benefits to out sourcing to other countries. Our wondrous bunch in DC eat up the tax revenues with perks and more perks.

They are all guilty.

I know. They get complete health care, fitness and other benefits. So I do not sound like I am bashing here I will get to the point.

SOCIALISM......I wonder why?? How can any politician be good or even worthy to be in office in our current capitalistic society. Most are millionaires and yet they have to pig up all for them. Now, when the people get sick of it I can see why many in other countries will change the rules.

Do you blame them?

In my view their is not much difference in Communism to Capitalism. All the top dogs get nothing but fat and bloated.

Personally, after living here I often wonder what it would be like if my great grandfather stayed in Denmark. Very socialistic and rated the happiest country on earth. I wonder.....

All I can say is they ( our leaders) will fight and hiss and pull each others hair out and to no avail, they will end up with a pay raise and still no term limits and/or campaign funding caps. Who's more corrupt? Chavez? or our own US diplomats??

More food for thought.~


KnallgoldChis/FL#1512061/17/07; 23:49:36

I posted awhile ago that this site is disinformational bullcrap and we better ignore it-this proves it now.
KnallgoldFor your amusement#1512071/17/07; 23:58:19

3 Things to Know Before You Buy Gold
968Re : "Sweet liberty" / Mikal#1512081/18/07; 01:12:48

Do you have any idea WHY Ambrose Evans Pritchard is such euro-basher ?
TopazGood strong Gold.#1512091/18/07; 03:12:20

This little uptick has the hallmarks of a decent old legup for mine.
What Gold has to do is rise equally in ALL currencies as it did in spectacular fashion in Sept '05.
We can see this currently from Jan 5 or thereabouts.
Buckle up!

TopazMotley fool. #1512101/18/07; 03:57:24

Surely both a foolish article and an equally foolish choice of Gold Supplier on whom to vent their papery spleen.
Implying as they do, the ridiculed "Firm" is representative of a reputable mainstream Gold Bullion Supplier...
...such as USAGold hereabouts.
Wouldn't be the first time both bagger and bagee were one and the same.

TopazFool?. #1512111/18/07; 03:58:19

Surely both a foolish article and an equally foolish choice of Gold Supplier on whom to vent their papery spleen.
Implying as they do, the ridiculed "Firm" is representative of a reputable mainstream Gold Bullion Supplier...
...such as USAGold hereabouts.
Wouldn't be the first time both bagger and bagee were one and the same.

GoldiloxCapitalist or Communist#1512121/18/07; 04:16:03

@ Gold Finger,

Politically speaking in today's world, the differentiation is about as clear as Democan vs. Republicrat.

I refer back to the "Money Masters" video for a simplistic explanation of "why" that might be.

Money Masters Part 1:

Money Masters Part 2:


Looking for the reference, I ran across some very profound discussions in the Feb 17-19 Forum archives. . . well worth perusing.

Thoreauly@ Knallgold re: The Motley Fool#1512131/18/07; 05:39:38

A lovely price suppression piece that those in the know should take full advantage of.
968@ Goldilox / On capitalism, communism and socialism ?#1512141/18/07; 07:24:48

Just tumbled into Micheal Hodges Grandfather economic report...

"Socialism (some call it 'collectivism') is considered by some a dirty word. Some would call socialism 'un-American'.

Many economists (such as Nobel Prize winners F.A. Hayek, Milton Friedman and others) claim advanced collectivist societies of socialism, communism and fascism are similar words to describe economies too much dominated by government - that, as a society becomes more government-dependent due to expansion of same faster than the general economy expands, the free-market sector & individual freedoms are compressed - - contrary to the intent of the founders of our Constitution.

If 10% of an economy's national income depends on government spending & control, then its economy can be called 10% 'socialistic' and 90% free-market. If government steadily expands its control over time faster than the economy, such that say 44% of the economy becomes socialistic (dependent on government spending), then only 56% of the economy is free. That's where we are today.

If such expansion is gradual over time, many do not recognize what is occurring. They may sense a steady degradation in quality of life and self-control of one's destiny, feel like they are running faster to keep even with more difficulty becoming debt-free themselves, but do not understand the cause.

Like a cancer, government steadily & stealthily spreads - step by step eroding citizen freedom and economics. At some point, if not reversed, the future well-being of citizens can become even more severely jeopardized - - as proven by history.

Over time more and more citizens have become so dependent on government spending (control) that, while they know major changes need to be made, they resist the very changes that are needed to restore the health of their freedom and economic future, and that of their children and grandchildren.

They have become so government-dependent (or, addicted) that they fear giving up that dependence. They have been 'captured' by socialism - - and, headed toward a result their founding forefathers never intended - - a road of increasing serfdom to the state.

America is more a socialistic nation, and less a free-market economy, then ever before in its history, because our total economy has become significantly more government-dominated and dependent.

Think of the total economy as a pie, divided into two economic slices (the government sector share and the pure private sector share), where the whole pie is the total national income. If the government share expands faster than the total economy, then the free-market private sector's share is compressed.

With 3 simple color pictures, we will view the relationship between these sectors at three different times in our history (prior 1930 and the New Deal, after World War II disarmament in 1947, and as it is today) - - and observe the march of socialization in America."

If we add to all this the fact that the US has the most socialistic monetary system on earth (helicopter money ad infinitum), one can ask the following question :
Just how socialistic is the United States of America ?

Paper AvalancheJust another predictable day unfolding#1512151/18/07; 08:31:57

I would expect the $10-$15 smack down of gold to commence within the next hour, around 10:30 or 11:00 EST (especially since Bernanke is speaking publicly today).


SurvivorHodges on American Socialism#1512161/18/07; 08:39:27

@968 - Bravo for finding and posting the Hodges piece on American socialism. I am constantly bemused by those in the U.S. and elsewhere who rail on Castro's cuba and other socialist-leaning states when in fact massive socialism is alive and well here in the homeland.

While even the most non-socialist state will employ a great deal of socialism (unless the population wants to build and maintain their own roads, put out their own structure fires and protect their borders with a hunting rifle instead of a military), it has gone much further than that here in the U.S. As a voting public, the owness is on ourselves to look inward before we point a condemning finger elsewhere.

In the meantime - got gold?

- S

TopazTake me back...#1512171/18/07; 10:50:34

Once the perennial Flatliner, the seismogram (sp) at Sth Dakota RSSD has been acting ornery of late ...bears watching imo.
Gold hanging tough against the double green Buck:Bond this am (here) ...Good!

Flatliner@Topaz's seismogram#1512181/18/07; 11:09:24

This next to an old gold mine that someone's opening back up? With all the new gold demand, one might think it would be profitable to mine again rather than simple investing in derivatives.
Flatliner@The forgery#1512191/18/07; 11:24:25

Looks like Chris's name has been cleared from the Wanta tail. This is good, yet the replacement paragraph goes a long way to show that Mr. Story is willing to use un-trusted sources for his data and that he is willing to rewrite his posted information as he sees fit. Shame on him! One might be lead to believe he's got a motive – like selling his publication or something.

The following paragraph replaces what I posted yesterday:

"Bravo, Mr Story! Keep up the wonderful job you have done and continue to do in exposing the rot and corruption of those whom the American people elected to do the people's business. They have betrayed our faith, eviscerated our Constitution and have created this sham against the American people and have lost credibility with countries around the world that will be very hard-pressed to believe in our leadership again. The detractors may have their current moment, but we the people will have the final say. Sincerely". – Richard Brandeis, Titan Group Limited, 07 January 2007, USA.

ThoreaulyHodges on American Socialism#1512201/18/07; 11:40:46

Listening to Bernanke's testimony before Congress this morning drives home the point that a financial system based on a government-issued fiat currency renders the entire economy collectivist -- i.e., you can't have a truly free market without a free market in money.

And let's not forget, "Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly" is item number five in Marx & Engels' Communist Manifesto.

GoldiloxSmackdown#1512211/18/07; 12:11:14

@ Paper Avalanche,

Right thought, wrong hour! They probably waited as long as possible in order to have maximum effect on the day before equity options expiry.

(:^) Goldilox

mikalGold and commodities early in bull market#1512221/18/07; 12:54:15

Rogers Says Oil Will Rise to $100 After `Correction' (Update6)
By Wendy Pugh and Yasumasa Song
Jan. 18 (Bloomberg) --Excerpt:
"Oil will resume its march toward $100 a barrel after a ``correction,'' said Jim Rogers, who predicted the start of the commodities rally in 1999.
``I'm just not smart enough to know how far down it will go and how long it will stay, but I do know that within the context of the bull market, oil will go over $100,'' Rogers said in a Tokyo interview. ``It will go over $150. Whether that is in 2009 or 2013, I don't have a clue, but I know it's going to happen.''"
>>Rogers on commodities and oil. No specific mention of gold, but commodities themselves.

TownCrierFor those who love the elusive gold U.S. Indian coinage...#1512231/18/07; 13:02:42

The $5 and $10 indian coins have been recently added to the U.S. page. These are real beauties.

There you'll also find that the graphs for the $20s have also been updated for January 2007.



TownCrierPsssst... speaking of 'new'#1512241/18/07; 13:30:12

There might . . . *MIGHT* . . . be some few Tunisian coins still available. The only way to know is to call your broker and ask. A few of these less common coins are always a nice way to spice up and round out one of your regular orders!

BTW... the allotment of Napoleons earmarked for the January Buyers' Group are over two-thirds sold out.



TownCrierHEADLINE: 'Lazy portfolios' win again, beat S&P 500!#1512251/18/07; 15:29:22

Excerpts from article

January 16 2007 (MarketWatch) -- Let's begin with that good old Wall Street adage: "You make your money in stocks, you keep it in bonds." Here's the modern version: "You make money in stocks, you keep it in a lazy portfolio!"

Why? Two reasons. Unless you're working full-time in the financial world, you don't have the skills, tools, information, time or interest in playing the market, especially the bond market.

And even if you do play the market, the odds are you'll lose because the more you trade the less you earn; transaction costs and taxes kill returns. So for 94 million out of America's 95 million investors, being a lazy investor is the best defensive strategy.

In fact, even the hotshots working full-time in the financial world follow the same strategy with the bulk of their assets. It's their biggest secret.

Mutual fund managers making an average $400,000-plus playing the market with your money, often lock away the bulk of their retirement assets in safe, untouchable portfolios using a variation of a lazy portfolio strategy.

Why not, they're no dummies, they've got families to protect, too.

But, unfortunately, Wall Street doesn't want you to use this Nobel Prize-winning strategy because it can't rake off enough in transactions fees from index funds.

...try this strategy, use your common sense and create your own portfolio ... But whatever you do, please forget about guessing economic cycles and playing the market; it's a no-win game, you're wasting your time, your retirement nest egg and your future.

^---(end excerpt, from url)---^

Comments to follow...


TownCrierMy comments on the previous "lazy portfolio" story#1512261/18/07; 15:29:37

Although the author dares not mention it by name, (quite likely for the same basic reason that Wall St. doesn't share its 'biggest secret',) it seems that many people do indeed need to be reminded to exercise their dormant powers of common sense. And to that end, it needs to be pointed out that GOLD is the ultimate asset in any WORTHWHILE lazy portfolio, period.

By the way, I do tend to think it somewhat an error to characterize holdings of physical gold as a "lazy" portfolio.

Why? Because having the security of gold that doesn't need to be actively managed does not imply laziness of the owner, but rather means that you, as the owner, can actually engage your time and energy getting on with the more meaningful and fulfilling aspects of life -- recreation, productivity, and socializing.

So raise as glass and "Cheers!" to your so-called "lazy" pile (portfolio) of gold coins, which lets you take your nose out of the Wall Street Journal and focus your time and talents instead on living a rich and enjoyable productive life.


Call USAGOLD-Centennial today.


FlatlinerIn Gold We Trust, Not U.S. Dollars#1512271/18/07; 16:52:46

Clean, refreshing, level headed report. From link:

United States Congressman Ron Paul of Texas
Before the U.S. House of Representatives


The number of dollars created by the Federal Reserve, and through the fractional reserve banking system, is crucial in determining how the market assesses the relationship of the dollar and gold. Though there's a strong correlation, it's not instantaneous or perfectly predictable. There are many variables to consider, but in the long term the dollar price of gold represents past inflation of the money supply. Equally important, it represents the anticipation of how much new money will be created in the future. This introduces the factor of trust and confidence in our monetary authorities and our politicians. And these days the American people are casting a vote of "no confidence" in this regard, and for good reasons.


The response in time will drive the dollar down, while driving interest rates and commodity prices up. Already we see this trend developing, which surely will accelerate in the not too distant future. Part of this reaction will be from those who seek a haven to protect their wealth - not invest - by treating gold and silver as universal and historic money. This means holding fewer dollars that are decreasing in value while holding gold as it increases in value.

A soaring gold price is a vote of "no confidence" in the central bank and the dollar.


USAGOLD Daily Market ReportPage Update!#1512281/18/07; 16:54:02">
The Daily Gold Market Report has been updated.

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

THURSDAY Market Excerpts

(MarketWatch) - The February contract closed down $5.20 at $628.10 on the New York Mercantile Exchange. Earlier, the contract reached a high of $637.20, its strongest intraday level since Jan. 3.

"On one side of the equation, you have the strong fundamentals underpinning the gold market supported by renewed nuclear concerns from North Korea and Iran," said Peter Spina, chief investment strategist at GoldSeek.

In reaction to a U.S. military buildup in the Gulf, the AP reported Iranian President Ahmadinejad said his country was prepared for any possible standoff with the West over its nuclear activities.

"On the other side of the equation, we have another sizable drop in oil as it searches for its bottom ... combined with positive U.S. economic data supporting a firm U.S. dollar."

From here, "look for some difficulty to extend gains under these circumstances," but overall, it appears that "a strong base [is] being built from which gold will propel higher ... once the right time arrives."

Futures prices for crude dropped as much as 4% on Thursday, and gold futures turned lower to reflect the weakness.

Looking ahead...

Precious-metals consultant GFMS said gold's price should head higher and aim for the $670s in the first half of the year.

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

mikal@Flatliner#1512291/18/07; 17:23:29

That's an excellent find that article.
I don't know what he means by "gold standard", because there's more than one way to impliment one, such as mark-to market IMO. But the rest of his message is clear to me.
If it's widely read, many more intelligent people will have the opportunity to consider issues they never saw or took seriously. Better yet, give it as a speech at the White House or at his banking committee etc.
One of the better parts IMO:
"The incentive for central bankers to create new money out of thin air is twofold. One is to practice central economic planning through the manipulation of interest rates. The second is to MONETIZE[my emphasis] the escalating federal debt politicians create and thrive on.

Today no one in Washington believes for a minute that runaway deficits are going to be curtailed. In March alone, the federal government created an historic $85 billion deficit. The current supplemental bill going through Congress has grown from $92 billion to over $106 billion, and everyone knows it will not draw President Bush's first veto. Most knowledgeable people therefore assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not yet been fully discounted, guarantees the further depreciation of the dollar in terms of gold."

mikal@Flatliner#1512301/18/07; 17:37:35

P.S. Considering the bold, fresh wording and outlook in that essay and recent speeches, one wonders what it is he
sees ahead. That is, beyond his (stated) acknowledgements and far-sighted perceptions on the economy, finance, fiscal and monetary policy etc., is he secretly struggling to contain his enthusiasm? He would not be the first one. :)
We will certainly hear more from Bernanke and the Fed officials(and overseas and private officials) who are relatively clear on what's coming down, in public,
versus previous reticence or opacity as Greenspan's speeches were often euphemistically branded.
Jim Sinclair seemd pleased by Bernanke's honesty today, contrasting it with various news spin.

Flatliner@mikal#1512311/18/07; 18:12:13

People conditioned to live only in the dollar world do not understand the MTM concept that supports the competing currency (Euro). I would assume that ‘gold standard’ in the context of this easy is used to indicate ‘gold exchange’ so as to limit currency inflation (as in gold backing through 1 to 1 receipt exchange). MTM does not address control of the currency supply that can only be done through political discipline.

I believe that there are relatively few in the world, plus those that visit this forum, that have a basic understanding of the MTM concept of gold as a reserve for a currency. Does this author? I don't know. The interviews that I've seen where he's talked about monetary policy never mention MTM.

Of all the news today, this seems like one of the shiny happy moments.

I believe pretty strongly in his comments about confidence. A person's move to gold is a clear vote of no confidence in the political situation with regards to money. As time goes on, I believe more and more people will cast their votes towards gold because of a couple simple reasons – the US Dollar management is out of control and the MTM concept of the Euro currency allows them to carefully manage the decline of the Euro. The Euro managers can allow for currency inflation while resting assured that if the public ever catches on, they can mop up excess through liquidating or tightening the amount of gold in circulation. Freegold today, only happens through a systemic breakdown. Freegold tomorrow only happens though millions of little votes of no confidence.

Change is on our doorstep. Hopefully, it will be good.

TownCrieriPod enters currency markets#1512321/18/07; 18:18:59

ANBERRA: Having already stormed world fashion, Apple's hip iPod music player is finally making its presence felt in global currency markets.

One of Australia's biggest banks, the Commonwealth Bank, has used the latest version of Apple's music player - the slimline Nano - to compare global currencies and purchasing power in 26 countries. Along the lines of the Big Mac index launched 20 years ago by The Economist magazine, the survey prices the 2GB Nano in US dollars and found Brazilians pay the most for an iPod, shelling out $327.71, well above above second-placed India at $222.27.

Canada was the cheapest place to buy a Nano at $144.20, while Australia ranked 19th at $172.36, cheaper than Germany ($192.46), France ($205.80), South Korea ($176.17) and China where the machine is manufactured. The US was fourth cheapest at $149.

"Interestingly, especially with freight costs close to zero, China is middle ranked in terms of global prices at $179.84," Craig James, the Chief Equities Economist at Commonwealth Bank, said.

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

Big Mac index... iPod index... seems a long circuitous route to replace or overcome information that international gold prices OUGHT to (and and yet fail to) convey.

Any eater of Big Macs, and any owner of an iPod fully understands that the utility being filled cannot be satisfied through derivative postions in paper BigMacs or paper iPods (futures and options and accounting swaps).

Why have the contemporary investors been so slow to come to the same realization about gold? Oh... that's right -- because the historical failures of the gold derivatives markets have been disguised (or rather, misunderstood) as failures of the then-prevailing gold standard currency systems. In other words, those gold-standard monetary systems were, in reality, merely relatively simplified financial ancestors of the much more elaborate gold derivatives systems which are active (and prone to failure) today.

Because it's largely the western marketplace in papergold items that determines what amounts to a dollar-derivative local price for transactions in real gold in the local markets of the world, the local price of gold therefore fails to convey the desired real-world info about local economies and currencies. Instead, for the most part it simply reflects the superficial ties at the upper levels of the forex market rather than the ground conditions of the underlying real economies.

The next time the gold derivatives market fails, however, this time it will be seen for exactly what it is because the worthless gold contracts won't (can't) be mistaken as the failure of anything other than the eternally recurring shortcomings of promisory gold.

A man of true wealth holds real property, including gold. A man of disappointment holds instead merely the (defaultible) contracts and (breakable) promises of property and gold.


mikal(No Subject)#1512331/18/07; 20:44:53 Brazil, Argentina to Drop Dollars in Bilateral Trade - Xinhua - January 19, 2007
Pursuing agreement with other Mercosur states

GoldiloxDon't Call It "Investing" #1512341/18/07; 21:35:28


It isn't investing. Not today. Not in this stock market. Not with all this crazy stuff going on within it. Not without any dividends. Not with these valuations. Not with this amount of overtrading. Not with all of this insider selling. Not without any insider buying. Not with all these hedge funds. Not with all of this shareholder dilution. Not with all this margin debt. Not with all the stock options. Not in this economy. Don't insult my intelligence. Don't call it investing. It is not investing – it is speculating.

Hold the valuation rationales for the US stock market. They don't hold water or pass mustard. You can't rely on Fed action saving most US stock portfolios forever. Sure, they can hold things up while the public is fooled into doing what they normally wouldn't do, presumably for the good of the short term economy. (Spend excessively and incur mountains of debt.) But know that this is not sustainable, although at times like this it may appear as though it is. But in the long term, valuations will prevail (they always do). When will valuations prevail? It will occur sometime between tomorrow and when the majority of the US Baby Boomers retire. Sorry, I cannot be more specific; but what do I know anyway? Cramer I'm not. (And not being Cramer will have its day in the sun as well.)

Small dividends, small value. Big dividends, big value. No rationale will ever change that; although at times like this, it is tempting to try to invent or buy into someone else's rationale. You get less than 2% yield for the S&P 500 and less most other places in the US market. So to buy it is to depend on another person or thing standing behind you to pay more than you did for your sub 2% yield. This is possible for a finite amount of time. This is even appropriate. If there's a good chart, buy it. Got a bad chart? Don't buy it. But for now, let's not kid ourselves. If you do this, you are not investing; you are speculating.

With every tick up, this market gains some more credibility with the public, it seems, and this is good for someone's business. With every tick up the rationales become a tick more palatable. Another contrarian joins the crowd. The market continues to be its own soothsayer. In turn it ticks up again, and then this feeds back again and again and again. It's working like a charm now as it seems that even one day of selling is met by "bargain hunters." Even the technicians can't find an acceptable entry point in the form of a pullback, so all they can do is chase. It's a lot of fun; but let's not kid ourselves because it isn't investing and shouldn't be called that. Call it chasing. Call it speculating. Call it playing the market. Call it herd behavior. But don't call it "investing."

And while were at calling things what they actually are, don't call it a private equity deal; call it corporate rape.


Marty Goldberg calls it as he sees it.

tejbearGoldilox #: 151234#1512351/18/07; 23:25:30

Geez, get a grip.

I am not arguing with any of your points. But, it is what it is.

Low lifes, who would chuckle at the chance of taking all of your assets, putting you on the street, raping your wife, and enslaving your children ARE IN CHARGE.

They hide behind a curtain, and get morons, (like Dubya), to do their bidding. Nobody votes for them, and most don't even know their names…

It has always been that way, it is that way, and with all I have read, I can't see how it will ever change.

These smucks have always worked at hiding below the surface. Sadly, the herd follows the pied piper's tunes played their minions on Fox News, or the others… Followers of this forum will probably do OK, but the herd will lose everything.

All you can do is plan for the worst, and then get on with a happy life.

And let's face it. When you talk to most herd members, they look at you as if you're an idiot.

Prediction: December 2007: Gold at $850 and Silver at $25.

Sadly, the members of the herd ignore even these types of ROI.

It is what it is…

The Bear.

melda laureEventually I wont even go to the casino for the buffet.#1512361/18/07; 23:59:41

The silliness is not in the long term interest of the US equities market.

When the casino ignores the players passing notes in class it is speculating (rumours, insider trading etc). Always has been, always will be.

When the police chief and the mayor are making out on the card table in the corner while roving thugs raid the cages and clowns are dealing the cards, THAT IS LOOTING.

And if they're welding the exits shut, stacking cordwood by the windows and soaking them in kerosesne, well, it's long past cashout time. The smart ones left for cuba a year too early. The unlucky got the crematoria.

Fuel for the fire?
got gold?

melda laureWhich is it? Even makes mistakes.#1512371/19/07; 00:01:22

Anyhow, I am amused by the question of how socialist our monetary system is (I was quite impressed by the socialism/communism/capitalism discussion here over the last weekend!) Is our monetary system socialist? Fascist? Neither?

Of course that's just it, we aren't supposed to know.

Some things really are great secrets. In other cases, otherwise knowledgeable people say the most idiotic things due to basic ignorance. For example, the illustrious has a link to an article saying "Abolish the FCC: auction off the spectrum." which of course is utter nonsense. They COULD abolish the FCC. But the "spectrum" can not be auctioned- any more than they could auction off the color blue, or the number Pi, or locations on the periodic table or A-flat concert pitch.

All Physical science aside, auctioning off spectrum means GOVERNMENT ENFORCMENT OF THOSE "RIGHTS".

Those looking for a new "gold standard" should think about that, and try to understand what "free gold" means and how it is different. If you can see the logical error, then you are probably capable of understanding Evan's free energy model, as well as fiat banking slavery.

If not, I' have some derivatives on the brooklyn bridge toll revenues I can sell you at a good price.

melda laureBother!#1512381/19/07; 00:28:59

I'll need Invisible Hand to explain that one now.
mikal@Goldilox#1512391/19/07; 08:06:43

That was a good one by Goldberg. Thanks.
That's what you call a ponzi scheme built around another ponzi scheme and another all supported by mass delusion and smug hypocrisy.

TateGuess which bana country is it?#1512401/19/07; 08:43:32

Guess which bana country is it?
The prime identifying characteristics are a spoiled political system, corrupt wealthy elite in power, control exerted by foreign entities, huge wealth inequities and a shrinking middle class, decayed infrastructure, urban wastelands with filthy pockets, primitive segments of the economy, low capital expenditures, capital flight externally, reliance upon foreign capital, heavy monetary inflation, outsized federal budget deficits, excessive import dependence, elite accounts in foreign locations, lowly paid common working class, large police and security forces, enormous prison population, proliferation of gambling casinos, and a weak currency.

mikal(No Subject)#1512411/19/07; 08:54:23 The Dollar to Fall? | FMNN | January 19, 2007
Short, diverse views of fiat currencies and US$
from Frank Barbera, Doug Casey and Bill Bonner.

mikalSmoke or fire?#1512421/19/07; 09:31:37 The unease bubbling in today's brave new financial world
Gillain Tett - Financial Times | January 19, 2007

GoldiloxEquity options expiry#1512431/19/07; 10:11:44

Pretty light smackdown so far, given equity options expiry. Maybe thay have already wrung all the fat they can out of the miners.
GoldiloxPentagon sees U.S. war cost in Iraq rising#1512441/19/07; 10:16:06


WASHINGTON (Reuters) - The steadily rising Iraq war price tag will reach about $8.4 billion a month this year, Pentagon spokesmen said on Thursday, as heavy replacement costs for lost, destroyed and aging equipment mount.

The Pentagon has been estimating last year's costs for the increasingly unpopular war at about $8 billion a month, having increased from a monthly "burn rate" of around $4.4 billion during the first year of fighting in fiscal 2003.

During testimony at a House Budget Committee hearing, Deputy Defense Secretary Gordon England said that nearly four years into the war, the Pentagon's war costs were rising because it was having to replace big-ticket items such as helicopters, airplanes and armored vehicles that are wearing out or were lost in combat.

"We have a backlog and are seeing an increase," England told the panel.

When factoring in U.S. combat costs in Afghanistan, the Pentagon will spend about $9.7 billion a month during the fiscal year that ends on Sept. 30, according to Pentagon spokesmen.

Early next month, the administration is expected to ask Congress for a further $100 billion in "emergency" war money, on top of the $70 billion already approved for this year. The request comes as President George W. Bush has sketched out an increase of 21,500 U.S. troops in Iraq that could cost about $5.6 billion.

House Budget Committee Chairman John Spratt, a South Carolina Democrat, said he hoped Congress could avoid recurring emergency funding bills for the war. "We would like to get a better grasp of the cost of the Iraq war and the global war on terrorism -- a way of accounting of costs to date and projecting costs to come."

Since fiscal 2001, Congress has approved $503 billion to pay for the wars in Iraq and Afghanistan and other aspects of the U.S. "global war on terrorism," according to Congressional Budget Office testimony. Of that, $344 billion has gone for military, diplomatic and other security costs in Iraq, the CBO said.

Most of the funds have been provided on an emergency basis, outside regular budget procedures. Critics say that obscures the true cost of the war and results in less congressional oversight.


Democrats won control of Congress in elections last November due largely to the Iraq war's unpopularity. England said the financial burden of the conflict would persist for some time.

He said even after the war ends, and he did not estimate when that would be, there would be two years of a "residual tail" of costs for rebuilding the military.

Democrats and Republicans on the budget panel grilled England on whether the Pentagon was slipping money for expensive, nonemergency projects into the emergency war funds requests.

Specifically, they inquired about reports Bush would ask for money to pay for two "Joint Strike Fighter" airplanes that are several years from being ready for combat, along with money for ballistic missiles and Navy aircraft repairs and procurement that is unrelated to Iraq combat.

England would not comment specifically on the upcoming request for emergency war money. But he said that when equipment was lost in Iraq, it was not replaced with "something old," but with new equipment.

Democrats have promised tougher oversight of defense spending, while challenging Bush's plans to broaden the American war effort in Iraq.


But of course, "deficits don't matter".

arbyhVenezuela's Chavez gets initial approval to approve laws by decree#1512451/19/07; 11:11:40


CARACAS, Venezuela (AP) — Venezuelan lawmakers gave initial approval to a bill granting President Hugo Chavez the power to rule by decree for 18 months so that he can impose sweeping economic, social and political change.

... "This process is unstoppable," lawmaker Juan Montenegro Nunez told the National Assembly Thursday. "This process is a historic necessity."

... He also called for an end to foreign ownership of lucrative crude oil refineries. Venezuela is the world's fifth oil producer and the fourth supplier to the United States, its top customer.

... The Venezuelan bill provides a broad "mother law" that would enable Chavez to enact laws by decree. The measure is expected to easily win final approval on its second reading in the assembly.

... "The president has asked for a year and a half, and he will have a year and a half to adapt all of these laws to the new political model," Flores said as the debate opened Thursday. The discussion lasted four hours, though there was no real opposition.

... Chavez has not spelled out what other changes he intends to make, but Venezuelan Foreign Minister Nicolas Maduro suggested nationalization also was on the horizon for the mining sector.

"The basic industries of minerals should be in the hands of the national state," he said at the Mercosur summit in Brazil.

Chavez last week designated Venezuela's main telecommunications company and the country's electricity and natural gas sectors as targets for nationalization.

end snip.

He is drawing a line and making it stick. He is talking to so many like minded fellows too.

GoldiloxUp into the close#1512461/19/07; 11:27:21

Gold Looking strong
TopazGold:Bond.#1512471/19/07; 11:38:27

Gold got it done today against dual Bond/Dollar softness ...and a look at the accompanying Charts will show how Bond (Yield) is impacting PoG far more than Buck is at present.
Will this pattern continue?
Will golds medium term fate be dictated to by relative strength/weakness in Bonds?
Has Oil found a mid-term bottom here? (as the Chart indicates)
You wouldn't be dead for quids ...would you?

mikalCyber "virtual" alert#1512481/19/07; 12:39:20

'Storm Worm' rages across the globe
Mass-mailed Trojan horse baits people with timely information about a deadly, real-life storm front in Europe.
By Dawn Kawamoto | Staff Writer, CNET
Published: January 19, 2007, 8:15 AM PST
Last modified: January 19, 2007, 10:00 AM PST
Excerpts: ""Storm Worm," one of the larger Trojan horse attacks in recent years, is baiting people with timely information about a deadly, real-life storm front, security researchers said Friday.
Over an eight-hour period Thursday, malicious e-mails were sent across the globe to hundreds of thousands of people, said Mikko Hypponen, chief research officer for F-Secure.
People who open the attachment then unknowingly become part of a botnet. A botnet serves as an army of commandeered computers, which are later used by attackers without their owners' knowledge.
Storm Worm carries the subject line "230 dead as storm batters Europe," Hypponen said, noting the unusual twist to the e-mail.
"The e-mail was started 15 hours ago, when the storm was peaking in Central Europe," Hypponen said. "This is unusual in that it was very timely."
Storm Worm is a Trojan horse with an executable file as an attachment. Cybercriminals took advantage of social engineering, using the news of the European storm to get people to open the attached malicious file, which promises more news on the weather emergency. The recipient must open the file for it to execute...
Other e-mail subject lines for it include "U.S. Secretary of State Condoleezza..." and "A killer at 11, he's free at 21 and...""

Mikal-- A reminder of how electronics has revolutionized
information management and investments, "opening the door" to scams and intrusions by individuals and government alike.
Renouncing "virtual" security for trusted, proven assets brings great peace of mind.

Federal_ReservesChinese Commies shoot down satellite#1512491/19/07; 14:08:37

Concern grows over China's satellite-killing missile test By Chris Buckley

BEIJING (Reuters) - Beijing insisted Friday it was opposed to an arms race in space after Japan and Britain joined a chorus of concern over a satellite-killing missile test by China -- the first known experiment of its type in more than 20 years.

The United States says China used a ground-based ballistic missile to shoot apart an aging weather satellite on January 11, scattering debris that could damage other satellites and raising risks of escalating military rivalry in outer space.

A Chinese Foreign Ministry spokesman declined to confirm or deny the incident, but said Beijing wanted no arms race in space.

"I can't say anything about the reports. I really don't know; I've only seen the foreign reports," Liu Jianchao told Reuters.

"What I can say is that, as a matter of principle, China advocates the peaceful use of space and opposes the weaponisation of space, and also opposes any form of arms race," he said.

mikalRR on gold#1512501/19/07; 14:46:02

The Dow Theory Newsletter guy must be glad for the chance to say "I told ya so", to what must be an army of detractors whenever gold 'corrects'. Yesterday's Richard Russell on Gold:
"Gold -- I've been watching gold with increasing interest, because the background for gold is turning increasingly bullish. World liquidity is enormous, and every day, it seems, we hear about another multi-billion dollar buy-out or merger. Furthermore, with the Fed intent on producing a "soft landing" in housing, we can expect the system to be flooding with liquidity (see further comments below). Gold, of course, is well aware of the liquidity-flood.
Gold has been trending higher, and looking at the weekly chart below it is immediately apparent that a major upside breakout would entail gold closing above 650. The 40-week moving average for gold stands at 625, and the 10-week MA at 628.50 -- has climbed above the 40-week MA, which is bullish.
This inflationary tide of liquidity should be bullish for all the precious metals. As I see it, the correction in gold and silver ended last October. Since then, gold has been building a huge base. I believe the base has been completed. I like the gold picture, both technically and fundamentally."

USAGOLD Daily Market ReportPage Update!#1512531/19/07; 16:20:33">
The Daily Gold Market Report has been updated.

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

FRIDAY Market Excerpts

January 19 (MarketWatch) -- Gold futures climbed more than 1% Friday, prompting the benchmark contract to score a gain of more than $9 an ounce for the week as the precious metal took its cue from higher energy prices.

The February gold contract closed up $8.30 at $636.40 on the New York Mercantile Exchange.

It closed at $626.90 a week ago, so it ended the latest week up $9.50, or 1.5%.

"The gold price is rallying higher with energy," said Peter Spina, chief investment strategist at GoldSeek. Also, Federal Reserve Chairman Ben Bernanke "brought some focus back to the deficit problems the United States is facing, and this is giving investors some renewed interest in the metal," he said.

One long-term positive for gold is the tone with which Bernanke spoke Thursday of the potential impact of the massive twin deficits on the U.S. economy in the coming years, said Kitco's Jon Nadler.

Bernanke urged the U.S. Congress to take "early and meaningful" action to put the budget on a sustainable path.

"It appears that the very debacle that gold's advocates have been pointing to for quite some time now is looming on the immediate horizon -- and it is not a mirage," said Nadler.

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

GoldiloxFannie Mae, Freddie Mac still have huge financial problems#1512541/19/07; 17:55:06


WASHINGTON — Fannie Mae and Freddie Mac have made progress toward correcting financial weaknesses, but tight government supervision is needed as the mortgage giants emerge from accounting scandals, a federal regulator said yesterday.

James B. Lockhart, director of the Office of Federal Housing Enterprise Oversight, also disclosed that Fannie Mae, which just last month announced a restatement of $6.3 billion in profit for 2001 through mid-2004, had a loss in the third quarter of 2006. He did not specify the amount of the loss.
"They unfortunately have very, very large problems," Lockhart said in a meeting with reporters, referring to the government-sponsored companies that are the two biggest financiers in the $8 trillion home-mortgage market in the United States. "They have a long way to go; there are still significant worries."

The problems "are massive and they're ongoing," he said.
Lockhart noted that the companies' financial results continue to be volatile from quarter to quarter, saying that both lost money in the July-September period last year. Freddie Mac, the smaller of the two, recently forecast a loss of about $550 million for the quarter due mainly to declines in interest rates, compared with a profit of $880 million in the third quarter of 2005.
Fannie Mae has not reported or forecast its results beyond June 2004. The company, which is the second-largest U.S. financial institution after Citigroup Inc., is not expected to return to timely financial reporting until early next year.

With the Democrats now in control of Congress, prospects have improved for compromise legislation tightening the government's reins on Fannie Mae and Freddie Mac. The accounting scandals that roiled both companies in recent years brought demands by Republicans in Congress and the Bush administration for cuts in their massive mortgage holdings — a move vehemently opposed by Fannie Mae and Freddie Mac.

Rep. Barney Frank, D-Mass., the new chairman of the House Financial Services Committee, is proposing legislation that wouldn't mandate such reductions but would give the OFHEO director discretion to limit or reduce the holdings.
Fannie Mae and Freddie Mac were created by Congress to pump money into the mortgage market by buying home loans from banks and other lenders, in order to keep interest rates low and make home ownership affordable for low- and moderate-income people. They bundle the mortgages into securities for sale on Wall Street.

Critics of the companies have pointed to the recent accounting breakdowns to bolster their case that the mortgage portfolios — totaling more than $1 trillion — are improperly managed and pose a risk to the financial system.
"We have to prevent these companies from growing out of control again,"

Lockhart said yesterday. He said legislation is definitely needed to bolster the supervisory authority and independence of OFHEO.
The agency in 2004 accused Washington-based Fannie Mae of serious accounting problems and earnings manipulation to meet Wall Street targets, and the Securities and Exchange Commission ordered the company to restate earnings back to 2001. Fannie Mae ousted top executives in 2004 and paid a record $400 million civil fine in a settlement with OFHEO and the SEC last May.

McLean, Va.-based Freddie Mac disclosed in June 2003 that it had misstated earnings — mostly underreported — by some $5 billion for 2000-2002 to smooth out volatility in profits and uphold its image on Wall Street as a steady performer.


Catherine Austin Fitts must find these guys pretty amusing.

GoldiloxFinancial Sense Newshour#1512551/19/07; 20:06:04

Marc Faber is Jim's second hour guest tomorrow.
Goldilox3,500 to go in Motorola jobs cull#1512561/19/07; 20:16:02


Motorola, the world's number two mobile phone maker, will shed 3,500 jobs in an effort to stem falling profits.
Chief Executive Ed Zander revealed the job cuts after profits at Motorola almost halved in the three months to the end of 2006.

Fourth quarter profits tumbled 48% to $624m (£316m; 482m euros) from $1.2bn at the same time last year.

The fall in profits reflects cuts in mobile phone prices and tougher competition among premium products.

Illinois-based Motorola has 23% of the global mobile phone market, but lags behind Finland's Nokia.


Dem bones, dem bones . . .

mikal(No Subject)#1512571/19/07; 22:27:13 A Stadium Name Bubble?
Citibank, Barclay helpheraldnaming rightsgold rush
Chris Isidore | CNN | January 19, 2007
"Maybe the curse isn't dead- maybe it's only in hibernation."
The last line refers to the similarity of today's corporate extravagance to the last stock market bear when sports' sponsors actually managed to underperform in spite of prominent advertising.

TownCrierHeadline telltales...#1512581/19/07; 22:38:11

Look at these few headlines collected from just the current listing of articles at our USAGOLD DMR newswire...

Inflation down - but far from conquered-- (Yahoo! US - Economy)

Official inflation masks reality for retirees-- (Chicago Tribune - Your Money)

Inflation a risk to economy -- (Gulf Daily News - Business)

Be a winner in the great inflation race -- ( - Personal Finance - Investments)

Prepare your finances for the growing threat of inflation -- (Independent - Invest & Save)

GCC inflation to remain high: Report-- (Bahrain Tribune)

SBP governor warns against threat of spiralling inflation -- (Khaleej Times - Business)

Bottom line: Inflation is global in scope, and so is the exodus out of depreciating paper currencies and into physical gold, just like my first trip down the mountain as a (head-over-heels) "snowboarder" -- gathering momentum, and picking up speed!

Are YOU in control of YOUR financial destiny?


Bulldogbeacons#1512591/20/07; 00:01:18

In the last 8 years since I got connected to the internet, there have been a few people that have shaped my direction.
For the y2k years from 98 to the obvious (00), there was Gary North. Long story how I got there, but needless to say, I embraced his ideas. There was very little to rebut the threat of computers going down, no one really knew the answers. What was the advice of North and others, even our own posters? They all recommended gold, grub, guns and God. I followed this advice to the T. I just could not see being looked after by the government in the event of a catastrophy. I bought a retreat for cash, all the necessities and there is no doubt that I would have survived the anticipated event. At the time of course, everyone I knew thought that I was having a nervous breakdown, but for me, I did so much due diligence on the problem that I had clearly looked after my whole family in the event of a systemic event. When it was a non event, I got to enjoy another 8 years at the "cabin" for about 70 days/year. When I sold it last September, it had tripled in value. Not a bad result of y2k! Moreover, my p.m.'s have likewise tripled in $ value. Furthermore, as a result of my continuing to save in P.M's. my young adult children are now at least buying silver.
Today, I read this site everyday, but the beacon that I start my day with is George Ure. George and I could be the best of buds. Another is Jim Sinclair. I think his perception is terrific. He obviously gets it. Jim Puplava offers a lovely Saturday morning summary of things. We are blessed with this medium to exchange ideas with kings and serfs. It is a wonderful education tool, the internet, but you still have to digest the thoughts to separate the wheat from the chaff.
With George Ure setting the example and urging us on, is it time to get "self sufficient" again? Lucky for him that he can still earn a living in east Texas. What about the rest of us? I need a couple of years to get organized again. Don't get me wrong, I probably have enough resources for the rest of my life, but at my age, I would like to pause and enjoy my paid off house for at least one season without going away for most of the summer, before I go and sell it all and head for the hills.
There will come a time when the shin(e)y will be sold. My hope is that I never need to sell it. I am hoping it will be a legacy to my children, to give them the same comfort that it has given me.
The beacons that I miss of course, are my favorite, Aristotle: as well as Another, FoA, Belgian and many others. Could it be that they have passed on or are they just satisfied where this is going? I definitely think that our big brother the U.S. wants to limit the use of the Internet for intellectual free expression.
I hope I live long enough to see free gold. When I think of all the saving I have done in P.M's the last 8 years, it pales in comparison to the gain in my personal residence. Randy asked why haven't investors gone to gold?
It has been easier to put very little down on real estate and realize large gains in short order. You don't need to digest the affairs of the world, you just need to follow the pack. There is no question that my P.M.'s beat the pants off the SM, but I don't think that they beat this housing market.
In 1984, we were saying in Alberta, "Please God, give me another oil boom, and I promise, I won't piss it away!" We are in another oil boom. Full employment, no place for people to live, coffee clerks being paid $14/hour. Our gasoline today is .76/litre. Mortgage rates are still reasonable. The U.S. wants us to expedite developing of the tar sands. Should we be anticipating a downturn? I don't think so. Energy drives this Province.
The world needs the energy. The problem is that as our population has grown from 300,000 in Calgary to 1,000,000 our quality of life has gone down. Infrastructure is choked. We have the highest $ construction permits of any city in Canada. The traffic snarls are horrendous. Today the N-S. Freeway was closed from 8AM to Noon due to a terrible accident. Growth, for what end result?
I have my own thoughts why I haven't posted here for a long time, but what of those erudite posters that I mentioned previously, why do you think they stopped posting? I would be very interested in your comments.

GOLD FINGERThe World#1512601/20/07; 01:22:50

Happy Days to everyone here in this shinny forum on earth!

Today there are more people on this earth than ever before. China alone has over 1.5 billion people. The energy needs are great in all countries and now the developing nations have money and want to buy up and build up.

The middle east is far from fixed. The greatest instability that the world will see will be caused from actions or inactions in this region of the world. Times have changed, they have not and do not want to. These people clearly want to have their oil and get the proper funds they feel they deserve. Kind of like Chavez.

Turbulence and unrest and wars and rumors of wars is what keeps gold on the hot plate.

If you think we have issues now in the Middle East, lets just imagine for one moment if we removed the us troops. It would spell chaos and then the oil would be disrupted and prices would sky rocket. To show how vulnaberal we are, when Katrina hit it dam near added a buck to the gallon of petroleum. Imagine if we left Iraq now?? IT isn't OVER and it's not going to be over soon. Even if we built more oil refineries.

Iran spells trouble and they are unafraid to give it. This puts more pressure on the region and the PRICE OF OIL.

I am laughing louder than a fat cow running in a field of green grass. Why? Because we had a chance to curb our oil thirst in the 70's. We had an opportunity to really make a difference in the world and foster alternative energies. When the 100 mile carburetor came along guess who paid them off? Now, why did our country some how make this illegal and maybe nationalize a carburetor to get over 100 miles a US gallon?


This takes me back to a post I made earlier about our leaders. For years now they HAD a chance to REALLY make a difference and set the stage for our country to be on a better road than we are now. It's my firm belief that as we witness all the so called political hashing that NOTHING has really changed. It's just more hot air.

We will be our own demise. I do not see it ever changing.

These other countries know how stupid we are here. They are gearing up for the slaughter. We are fat and lazy and sitting ducks. If you think 911 was bad I can hardly imagine what will be next.

My sincerest apologies if I am sounding sour. Normally, I am very up beat. However, as I put a few things together I am begging to see a bigger picture and it's not looking pretty.

So how do we turn the hands of time back? How do we reverse the damage of lack of preparation in the 70's? How do we bring back lost jobs? How can we curb greed? How can we become less dependent on forging oil? How will we be able to get our troops out of the Middle east? Just absolutely how??

I will tell you....we won't!! We are to late. The hands of time are irreversible. The world has deteriorated beyond repair. JUST LIKE OUR NATIONAL DEBT!!

I am sorry, but the facts speak and I am just presenting them.

Like I said before, my hope is......G O L D!


P.S. Just how sensitive are we to global warming?

If our planet was just a few inches closer to the sun we would FRY!
IF our planet was just a few inches further from the sun we would freeze!
Makes 93 million miles become really close!!

CometoseCOT#1512611/20/07; 07:08:19

The commercials for the week

in silver were net short 1000 contracts

in copper were net long 900 contracts

in gold were net short 13000 contracts

Lackluster@Cometose#1512631/20/07; 08:56:36

you state:

"It's funny he spoke up in the context of a new Democratic Congress ......... Is this a JOB for the DEMOCRATS."

Look at the M3 chart at the above URL ( scroll down, second chart. ) Notice the flat spot in M3 growth during Clinton's administration?

CometoseLackluster#1512641/20/07; 09:03:02

Looks like 1976 - 1980 Carter administration revisited...
RECESSION .........Market Collapse and RISE OF METALS
WHen one balloon pops ....the money has to go into something else....SMART MONEY been heading into metals for 6 years set the STAGE .......


LacklusterM3 Growth#1512651/20/07; 09:12:52

I dunno. When I see that M3 chart ( linked at my previous post ) I can't help but notice how it really is starting to take off, especially from the time M3 reporting has been discontinued. It makes the this editorial concerning exponential growth very relevant to me.

Snippit from URL:

"Bacteria grow by doubling. One bacterium divides to become two, the two divide to become 4, become 8, 16 and so on. Suppose we had bacteria that doubled in number this way every minute. Suppose we put one of these bacterium into an empty bottle at eleven in the morning, and then observe that the bottle is full at twelve noon. There's our case of just ordinary steady growth, it has a doubling time of one minuet, and it's in the finite environment of one bottle. I want to ask you three questions.

Number one; at which time was the bottle half full? Well, would you believe 11:59,one minute before 12, because they double in number every minute?

Second Question; if you were an average bacterium in that bottle at what time would you first realize that you were running out of space? Well let's just look at the last minute in the bottle. At 12 noon its full, one minute before its half full, 2 minutes before its ¼ full, then 1/8th, then a 1/16th. Let me ask you, at 5 minutes before 12 when the bottle is only 3% full and is 97% open space just yearning for development, how many of you would realize there's a problem?"

(my apologies if already linked)

GoldiloxLegacies#1512661/20/07; 09:13:55

@ Bulldog,

"There will come a time when the shin(e)y will be sold. My hope is that I never need to sell it. I am hoping it will be a legacy to my children, to give them the same comfort that it has given me."

Not meaning to point any personal fingers, I wonder if this isn't indicative of how much trouble our society is in? GeeDubya's "legacy" was a gift of Presidency from his father, perhaps the ultimate in "inheritance", but certainly not something he "earned" with personal successes.

My father, who grew up during the 1930's depression, worked hard to feed and educate his brood, but left his children not one farthing. As a result, we have made our own way with the tools provided and our own personal drive to succeed. In a society where education is again becoming the luxury of the rich, we are seeing class distinctions being rebuilt like new "Great Walls", as Presidents are son's of Presidents, and Congressmen are sons and daughters of Congressmen. Even Bill Gates, with his vision for the computer industry, started his multi-billion dollar empire with an endowment from Gates Tire and Rubber, while much of SIlicon Valley struggled in laboratory garages.

I remember a time when the greatest legacy we wanted to leave the next generation was a healthy planet, an inquisitive educational system, and a world of opportunity, but few seem to share that vision anymore. The depressions that mark a declining civilization seem so much more pervasive.

I, too, come to the forum for more sane views of our surroundings, and read Ure, Puplava, Faber, and McCanney voraciously, as these few seem to be the beacons of our current conundra - and the least infected by propaganda campaigns. Sadly, though, even they all seem to be more focused on "survival" than rebuilding the glory of our civilization.

While TPTB market the illusion that "all is well in their capable stewardship", more and more we see signs that "it just ain't so".

Signs of the times, indeed.

GoldiloxIgnoring hyperbolae#1512671/20/07; 09:27:08

@ Lackluster,

Not only bacteria, but all living organisms develop exponentially, as oocytes divide into stems cells, etc.

The IMS has been on a hyperbolic growth path since the inception of the FED, and perhaps earlier, and even the signs of hyperbolic demise on the periphery have not awakened most to the obvious. Inflation is a necessary part of the equasion when you realise that "interest" is built in to all growth plans, and interest IS inflationary by definition.

Debt-based capitalism MUST grow exponentially to survive, as the debt burden sucks off most of the resultant gains.

Having been involved in some entrepenurial interprises in the last decade, I'm still amazed that the "angels" who support such activity often demand 40-50% ownership in the entity before funding. That's quite a large interest penalty with which to begin financial life. Are they really "angels" or really the "demons" of debt-based capitalism?

Sierra MadreI shall be denounced for saying the following, no doubt:#1512681/20/07; 10:34:28

The idea that interest is basically wicked because "the debt is created, but not the money with which to pay the debt" is, in my view, totally false.

If the idea of PROFIT is a valid concept and refers to a reality, then interest may be seen as simply one way by means of which a lender of funds may obtain a part of the profit.

The (Western) bankers' sin is that they do not wish to recognize this fact, they want their "pound of flesh, irregardless".

Now, if profit is a reality, then sharing it by means of a contract in return for a loan, seems a reasonable undertaking - that share is simply called interest. If the profit is payable in cash, then a part of the profit can surely be paid in cash, and termed "interest".

If EVERYONE - all enterprises and individuals - wished to realize their profits completely and turn them into CASH, there certainly would not be enough cash with which to do that.

But that never does happen, of course, because the payout of all profits has never been simultaneous. The cash circulates in society, and thus the operation of paying out profits can be realized.

If interest is a part of profits, they by the same reasoning, not all debt is liquidated at the same time, nor all interest paid out at the same moment. Thus, the same cash circulating through society serves to effect the payment of interest consecutively, and not all at once.

Note that I am refering to a Capitalist system as it was, say in the 1800's in England. Not even then a perfect system, but far more rational and restrained than today's frenzied credit expansion, worldwide.

I hope I have made my idea clear. Perhaps it is of no interest to readers; if so, please excuse


pilgrimReserves#1512691/20/07; 10:35:23

I'm a longtime lurker, first-time poster. Please pardon my exteme and admitted ignorance, but could someone please enlighten me on the mechanics of a nation's acquisition and maintenance of its so-called foreign reserves?

How does a nation acquire reserves based on the import/export actitivites of private companies? All commentary I've heard or read seems to presume that each country is simply one big company and all import/export activity flows through to the account of that company -- thus the country/company acquires a deficit or surplus of reserves.

Also beyond my comprehension is how a coountry "stores" its reserves. At the risk of really being really simplistic, may I ask if there are pallets of dollars in warehouses in China and Japan? or simply bookkeeping entries in the federal reserve bank of New York?

And, finally, (not to try anyone's patience!) why is it that only the U.S. appears to be the only country not in need of reserves?

Thanks for your consideration!

Flatliner@Bulldog#1512701/20/07; 11:35:12

The archives are good for you. Do you remember writing: "It is surprising what you can easily give up to acquire just one maple/month." I can. At the same time, it is truly amazing observe what others do not give up in exchange for something that can improve the quality of life of loved ones many years from now.

Goldilox, I think I might interpret Bulldog's words slightly differently. I would not call it a legacy really, but an opportunity. The framework that should be referenced is the quality of life in resource restrictive societies. If half the population of a country lives in poverty and you are one of them, what chance do you think you'll have a rising above that given you have no resources other than you work ethic? The life that would be presented to you would be extremely challenging. Getting a formal education would be a daunting task. We see that it happens today where an entire village will sponsor one person with the hope that this one person will elevate the entire village.

My take on it is that passing stored capital on to children (and grandchildren) provides them with an opportunity to participate in intellectual pursuits rather than physical ones. By providing the means for the education you offer an opportunity of advancement that in many societies takes generations to accomplish. As our standard of living drops, this discrepancy will be clearer and clearer to people. The Bulldogs of the world that think ahead and understand this will clearly empower their bloodline with the best opportunities available – choices.

Hopefully, the people that are empowered through the inheritance of gold will have time to solve the big problems of the day or invent. It takes time to invent. Invent they will because they will not be serving coffee at 14 bucks an hour.

Bulldog, I would be willing to bet that much of the information left behind by "The beacons" that you mention was as expression of their learning. Like attending a great university and participating in class, they shared their words for all to see. As time passed and their understanding changed, so did their lives and the way that they have focused their energies. The one problem with posting anonymously in a forum is that once you graduate, you are ‘lost’. It would be most interesting to see, or participate in the fields that now grab their attention. Collaboration is powerful and having the time to do so is prized by everyone.

Thank you for sharing today. May you happily acquire many golden leaves!

spikedogNo understanding of the market#1512711/20/07; 12:03:55

I found this little tidbit linked at one of the other castles.

I believe this gentleman's math is a little deficient. He states that the going rate for 12.5 troy ounces of gold is $8500. With my cheapo calculator, that comes up to $680 an ounce. A little high by current market valuations and it has not been that high since May 2006. Now this spool of wire may be 99.99 pure, but it is not exactly in fungible form, aka coins or bars. So that would mean conversion by the potential buyer to bars. And why would you do that when you can get a more liquid form at a better price from our most gracious hosts?

(01-20) 02:21 PST Madison, Wis. (AP) --

Looking for a ball of gold thread leftover from a university space experiment? Apparently nobody else is either.

A Thursday night deadline passed with nobody bidding the minimum $8,500 for the shiny glob of pure gold leftover from equipment University of Wisconsin scientists made that traveled into space in 2005.

The school's Space Science and Engineering Center is auctioning off 12.5 troy ounces of 99.999 percent pure gold on a Web site where the university's surplus property — everything from dorm refrigerators to computers — is sold to the highest bidder.

Mark Mulligan, a project manager at the space center, said the $8,500 asking price, which reflects the going rate for gold, was probably too high. He said he would lower the price and put the gold back up for bid early next week.

Mulligan said he's convinced the gold will eventually sell. A handful of people inquired but were scared away by the price, he said.

"We just got to get the pricing right," Mulligan said. "It is gold. You can do with it what you would like."

University scientists bought the spool of gold thread to use in making a refrigerator that kept instruments on satellites on two Japanese-American rockets cool. A first rocket launched crashed into the Pacific Ocean in 2000, but a second in 2005 was successful and the equipment worked, Mulligan said.

Sierra MadrePilgrim: Ignorance is no fault!#1512721/20/07; 12:38:34

And your desire for information is praiseworthy!

I'll try to clarify some doubts of yours - and sure hope I am not leading you astray, I might be mistaken.

1. First of all, the total amount of Federal Reserve Notes, that is to say, paper money, that has been printed is about $760 billion dollars, last I recall, more or less. That is only a very tiny part of all the other dollars that exist, in the form of computer digits. No one really knows how much of that paper stuff is actually in the hands of Americans in the U.S. Perhaps more than half is in the hands of foreigners all over the world.

2. Those $760 billion, plus the total of checking accounts in banks, adds up to about $1,200 billion as of mid-2006 and it is called "M-1". (See graph at under Money supply). You should know that your balance in a checking account, is actually a DEBT to you, payable by your bank. It is only digits in a computer, somewhere.

3. Add to M-1, the amount of digits that have been transferred to "Money Market Accounts", which is about $7,000 billion, and you have M-2. The holders of balances in Money Market Accounts are really lending to companies that OWE that money. If enough companies that owe that money (digits) go broke, then the balances in Money Market Accounts that hold that debt, will be affected. The Money Market Account will then shrink and the depositors will
have LESS money (digits) if enough companies go broke.

4. Add to M-2, other Money Market accounts and accounts of other types, supposedly quite liquid, and you get M-3. M-3 has been growing so fast, that the Fed stopped reporting it early last year! Not a good sign. M-3 was up to about $10,500 billion in mid-2006.

So you see, that actual dollar bills in existence are only about 7% of all the "money" in existence - if digits can be said to have "existence".

When US based companies and individuals buy stuff outside the US, they pay through their banks. This puts digits in the hands of foreigners, for example, the Chinese.

The Chinese go to their banks and change their dollar digits for Chinese digits or Chinese notes, called Yuan.

So, the Chinese banking system collects a lot of balances of digits in the US banking system, and a part of these balances winds up in the Central Bank of China, which calls them "Dollar Reserves"

Since the Chinese sell more to the US and the rest of the world, than the US and the rest of the world sells to the Chinese, the Chinese are piling up Reserves of Dollar DIGITS. They accept the digits as payment, when it is really nothing of the sort: a dollar digit can be used for buying stuff, but it cannot constitute payment because it is not really something, only a number. This is an enormous FLAW in the world's monetary system. Dollar reserves in Central Banks around the world represent sales of goods that have not been really collected - Dollar reserves are in practice, uncollectible credit granted to the US:

There are certainly no "pallets of dollars" held by Central Banks. They may hold some, but actually very, very little in that form. Their Reserves are DIGITS in US computers, nothing else - whether they buy "bonds" or hold "cash" balances, they are still only digits.

The US has very small reserves of foreign currencies, unlike all the rest of the Central Banks of the world, because the US has the monopoly of creating dollar digits as well the monopoly of printing dollar bills. It relies on the fact that the dollar is universally accepted as payment. That is something that may change, and when it does - well, all Hell will break loose!

That is when GOLD will become the means of exchange AND of payment, real payment. Unless the Euro takes over from the Dollar, which would PERHAPS mean that the digit game can continue with the Euro instead of the Dollar.

Lastly, M-3 is growing like Topsy, some 12% a year, and that means that sooner or later, the dollar MUST lose purchasing power. That is the whole point of holding physical gold - it cannot be created out of nothing and will always be valuable, probably more and more valuable as time goes by.

I hope this helps! I stand ready to be corrected by other posters.


Topaz@Pilgrim.#1512751/20/07; 13:48:33

...just to add my tuppence worth on a fine sunday morn (here).
"Reserves" are best thought of not as Dollars but Dollar denominated T-Bonds ...and they're on acc with the Fed.
Most countries Central Banks accumulate their reserve pool through trade by their countrymen or by selling sterile Gold Bullion for interest bearing Bonds.
It then behooves the Fed fair means or foul, to "manage" the composite Bond:Dollar "value" as close to neutral as possible.
The Box above indicates two RED values for Bond and Dollar.
This if continued for too long would upset the applecart and have Both Bondholders AND Dollarholders scurrying for the exits. It "won't" happen until it does!

Hope this helps.

USAGOLD / Centennial Precious Metals, Inc.The final days (and coins) are approaching...#1512761/20/07; 15:04:57">Napoleon III gold coins
Clint HSierra Madre msg#: 151272)#1512771/20/07; 15:23:57

Thanks Sierra Madre, that answered a lot of questions that I had. Thanks for your work and time.
pilgrimreserves#1512781/20/07; 17:36:22

Many thanks Sierra Madre and Topaz for your prompt responses!! I'm chewing over them now and hope for complete digestion later!!
mikalBOE joins Fed between rock and unthinkable place#1512791/20/07; 19:02:20,,1994947,00.html

Booming Britain at Risk of Blow-Out | The Observer
Business | Richard Wachman | Sunday, January 21, 2007
Ernst and Young's Item Club weighs in on growth, rates

mikalGold bourse #1512801/20/07; 20:55:33

Gold and Jewelry Bourse to Open in Iran | January 21,
2007 - Iran Daily
Iran has extensive exploration efforts underway with many foreign investment partners. Working in 20 provinces, their efforts underscore a growing bullion and jewelry industry
slated for reforms, and modernized standards.

mikal(No Subject)#1512811/20/07; 21:18:19

China Announces Key Economic Reforms | Gulf Daily News
January 21, 2006
Completing a rare, two day conference that was only the third of it's kind since the Asian financial crisis of 1997, leaders announced broad reforms to be implimented in coming years. Among them is the stated commitment to open up uses of foreign reserves.
Xinhua and China Daily are reporting on the conference with special emphasis on the foreign reserves and revealing little so as to pacify markets, at the same time reiterating the "we go slow" approach.

mikal2007 not 2006#1512821/20/07; 21:20:31

Story below is dated 1-21-07
Chris PowellChinese govt. economist says yuan needs big revluation#1512831/21/07; 01:28:32

From Reuters
Sunday, January 21, 2007

BEIJING -- China's policy of allowing the yuan to gain a modest 3-5 percent a year is not sustainable as the cost of preventing a faster rise will crush the central bank, a Chinese economist said.

Zhong Wei, a professor at Beijing Normal University and an editor of a magazine run by the State Administration of Foreign Exchange, told a weekend forum in Beijing that China needed another revaluation to build up a properly functioning exchange rate system.

Advocates of a second administered revaluation are in a minority. Chinese leaders, including Premier Wen Jiabao, have consistently said there will be no repeat of the 2.1 percent revaluation of July 2005, when the yuan was depegged from the dollar and set free to float in managed bands.

The yuan has climbed a further 4.3 percent since then, with heavy central bank intervention preventing a sharper advance.

"My view is quite clear: the current course of modest yuan appreciation is not sustainable; only a big revaluation can solve the problem," Zhong said.

"In the coming five years, the policy of allowing the yuan to rise 3-5 percent a year won't be sustainable," he added.

Zhong argued that the central bank has to issue a huge quantity of bills every year to soak up foreign-exchange inflows.

Not only is this costly for the central bank, but it ties up commercial bank funds that could otherwise be lent out, he said.

Zhong said his pessimistic outlook assumed no change over the coming years to what he called China's ill-functioning currency market, where the yuan is allowed to rise or fall by no more than 0.3 percent a day against the dollar.

Zhang Yansheng, a trader researcher with a think-tank affiliated with the National Development and Reform Commission, said Zhong's views were unfounded.

The exchange rate issue was about more than monetary policy, Zhang said. China could take a series of measures in the areas of trade and investment to reduce its balance-of-payments surplus and so avoid Zhong's revaluation scenario.

Zuo Xiaolei, chief economist with Galaxy Securities, agreed that the yuan's exchange rate alone was not the answer to China's economic imbalances.

Chris PowellChina's reserves reach trillion; premier promises to start spending#1512841/21/07; 01:46:05

From Xinhua News Agency
via China Daily, Beijing
Sunday, January 21, 2007

Chinese Premier Wen Jiabao said that China would steadily push forward the foreign exchange rates reform and actively explore and expand the use of its US$1.06-trillion foreign exchange reserves.

China would strengthen operation and management of foreign exchange reserves and facilitate the balance of international payment, said Wen at the two-day Third National Financial Work Conference.

The closed-door meeting was designed to chart the course of China's financial sector.

On Monday, the People's Bank of China, or central bank, announced that its foreign reserves, already the world's largest, hit US$1.0663 trillion at the end of last year, up US$247.3 billion from the end of 2005.

China's foreign exchange reserves have been increasing rapidly on the back of a surging trade surplus and rising foreign direct investment.

Analysts claim that the US$1.06-trillion reserve could buy Microsoft, Citibank, and ExxonMobil Corp. as well as General Motors and Ford.

At present, the State Administration of Foreign Exchange is in charge of investing much of China's foreign exchange reserves, mainly in US treasury bonds and other high-quality assets.

The fast accumulation of foreign reserves is an indication of China's growing economic strength, but it has also put China under more pressure from trading partners to appreciate the yuan faster and face increase trade friction, said Prof Zhang Liqing with the Central University of Finance and Economics.

As foreign reserves rise, there are calls for using part of the money to purchase advanced technologies and equipment, to replenish social security fund, or to develop social undertakings of education, medical care, and environmental protection.

But such suggestions fail to understand the fact that China's foreign reserves keep increasing as the central bank buys massive amounts of dollars in the open market to only allow gradual yuan appreciation, analysts say.

"The foreign reserves are not treasury capital, but liabilities of the central bank, which means they cannot be used wishfully," said Prof. Zhao Xijun with the People's University.

China needs foreign exchanges to meet its payment requirement for import and export. Apart from that, the surplus should be best allocated and invested to achieve highest returns, said Lin Yifu, a renowned economist from Peking University's China Center for Economic Research.

He stressed that any use of foreign reserves have to be fully discussed and carried out in a very prudent way.

"To actively explore and expand channels of using foreign reserves will be a major point in future work," he said.

frosty 1James Willy.....#1512851/21/07; 07:31:17

In Mr.Willies latest,I get the mental picture of this man running around in circles screaming EEk!!...THE SKY IS FALLING!!!.....THE SKY IS FALLING!!!...
Now, the picture he paints(fully backed up by throngs of his facts)is grim indeed.Problem is,he has been writing this way for at least a decade.An alarmist? I say...Yes.
Without merit ..maybee, but not totally.Jim seems to have all the facts but that is about it.He blends the numbers into his Apocoliptic housing'stagflation.depression prediction,and year after year he is only partly correct.
Are we to think, his timing is just off a little and stay hidden under the blanket with Jim? I do not live that way.I believe in 5 years from now Jim will be saying similar things about how we are entering economic hell any moment.
Just my 2 cents.

GoldiloxPredictions#1512861/21/07; 07:50:22

@ frosty1,

While I tend to agree that most of the "alarmists" have been too severe too early, a continuation of the status quo means in five years we''ll be complaining that China and Japan hold say, 90% of US Treasury Debt, and most US utilities, corporations, and infrastructure will be foreign owned.

I'm not so sure I can envision that, either. There will come a time when "the piper needs to be paid".

With no real manufacturing base to support the dollar, it is reasonable to assume that the serious imbalances are leading us closer and closer to a "readjustment" that will quite likely be swift and painful. Envisioning what all that will entail is the hard part.

My greatest concern is the documented tendencies of TPTB to scapegoat and create diversions, in their efforts to maintain control "at all costs", as war seems to be their "traditional readjustment tool", and the drums are beating strongly as we speak.

frosty 1Goldi...#1512871/21/07; 08:08:04

Yes...but the $64,000. question?
will it be depression or hyperinflation?

mikalIs this the U.S. or... UK?#1512881/21/07; 08:24:06;jsessionid=3QA3LIQ3Y0UCBQFIQMGCFFWAVCBQUIV0?xml=/news/2007/01/21/nrbrown21.xml;jsessionid=3QA3LIQ3Y0UCBQFIQMGCFFWAVCBQUIV0?xml=/news/2007/01/21/nrbrown21.xml It's the Economy, Stupid | Liam Halligan | Telegraph | News
January 21, 2007

mikal(No Subject)#1512891/21/07; 08:57:36 The Unease Bubbling in Today's Brave New Financial World
Gillian Tett - Friday, January 19, 2007
There are fewer experts today with a pronounced, realistic view on derivatives than there are for other financial topics.
Most all are consistently conservative. This has been prudent no doubt, mixing caution with responsibility.
It conformed to the mood of the times where public
mood and official proclamations melded and the line between them blurred. Volatile issues have seldom made good dinner table subjects after all.
But for all the complexity of the world there is no limit to man's willingness to reduce issues to their most bare bones common denominators, and to find common ground.

GoldiloxInfla or Defla?#1512901/21/07; 10:53:35

@ frosty1,

War is usually quite hyper-inflationary, as needs become more immediate.

But after hostilities subside, what remains is the real question. If there is a serious blow to the ability to deliver sustenance, things get all whacked out.

Most "predictions" I have seen assume a peaceful transition, and I, for one, doubt that will happen with all the tender kegs about.

The US is unlikely to accept major oil and resource restrictions any more peaceably than Japan did in 1939.

GoldiloxFreedom and Global Slowing#1512911/21/07; 11:06:08


The inbox was overflowing yesterday with outrage over what seemed like an attempt by democorps in CONgress, who we note are turning out in practice to be nearly clones of republicorps, as a provision in Senate Bill #1 came to light. Essentially, it would have required that anyone who communicates with more than 500 people on the internet, would have to register as a grassroots lobbying organization if they promoted contact with members of the Senate, House, or White House of matters of public policy.

Sadly, the bill would have required churches and other groups (think pro-family) not only to register, but even turn over membership lists if required to verify how many people were in the group, according to some reports. Other reports read the bill another way, namely that it would not pose any threat to the discussion of performance of public officials on the internet without coming under onerous reporting requirements.

I took some time to read the bill and the now-stricken provisions that would have applied to grassroots lobbying. If I read it correctly, I could still point out what the "idiots on the Hill" are up to, but I would not need to report as long as it was an unpaid effort. On the other hand, broadly, the bill might have been interpreted to require that if I sent an email to our subscribers, because they pay to join, then I might have been required to file if the efforts passed certain expenditure thresholds.

When I sit back sit the first cup of coffee this morning, what comes into focus is that despite the democorps pledge to right republicorp wrongs, one of the main features of lobbying reform was gutted. The technique was classic created a red herring (threat to bloggers), drop the suggestion that Constitutional rights are under attack, and then sit back and relax and everyday folks become outraged - then use the outrage as an excuse gut ,well-intended provisions. Can you say "Hegelian Dialectic"?
Dumbing down of the public isn't confined to the Machiavellian legislative jockeys who maneuver the argument this way or that. In other countries, the approach is more direct. In Turkey, for example, we have the example of a journalist being gunned down in broad daylight.
Not that things are better than here in American anywhere else in the world, mind you. A report from "Freedom House" says Russia is doing a fine job of "marginalizing independent media, advocates for democracy, and regime critics generally."

The Freedom House report is really interesting from a socioeconomic standpoint (which is how I tend to view everything), because it says the relative amount of "freedom" in the world hasn't changed much in 10-years or so.

Here's something to ponder over the weekend. Suppose that corporate globalism - which got its big kick in el butto following the 1987 mini-crash, is now experiencing a major (several years long) peak, such as followers of corporatism have supposed. I'm thinking here of folks like Barry Lynn in "End of the Line"

When I go to the detail of the Freedom House report, and count up the number of "up arrows" (e.g. where freedom is increasing) I count six. On the other hand, the number of down arrows is seventeen. I may be wrong on this, but I don't see much prospect for freedom making gains over the coming year.
To me, the conflict that the world is heading toward is not so much between governments, although they are the obvious proxies, nor is it between "free", "partly free" or "not free" peoples. A thoughtful study of macroeconomics (big picture) over the past 50 years reveals that corporations embraced globalism only because they could make a buck at it. Why pay a worker $20 an hour or some livable wage in the USA when you can pay someone in Kenya $1.00 a day and pocket the difference?

If there's a flaw in global economics it is that there's no social accountability to making money. Thus, when we read that Motorola is cutting 3,500 jobs, we know the stock is bound to go up. More than half a point.
Fed boss Ben Bernanke warned this week in strong terms that Medicare and Social Security obligations could harm the future of the US economy. The only way for the present corporate banking/global labor rate arbitrage system to adapt will be to print money, which ensures continued inflation because there is no alternative. I like to call it Petri Dish economics which will continue to expand until all nutrients are consumed and we continue lurching toward a great Final War for the last bits of resource.

Chris PowellLeading Canadian banker recommends gold, denounces fiat system#1512921/21/07; 12:11:10

Just amazing for a speech like this
to come out of the financial

Thoreauly@ Goldilox re: Senate Bill #1#1512931/21/07; 12:13:38

It's all coming down to "The Internet vs. the State" (see link):

"In the Internet we see our greatest hope for freedom and for the continual progress of humanity. In the Internet we see the anachronistic and obsolete institutions of society being pushed aside for a new dawn of better things. In the Internet we see the key to diminishing the power and status of the state and liberating ourselves from its oppression and deception."

Thus, what we see in Senate Bill #1 is how profoundly threatened "representative democracy" is by market democracy, making it clear that the last thing our "representatives" want is to hear from their constituents.

And why should they? When the first Congress met in 1790, there was one representative for every 30,000 people. Since only property-holding white males could vote, that was close to Plato's ideal figure of around 5,000 voting citizens per state. By 1910, the US population was 90 million, and Congress capped representation in the House at 435, where it remains today.

Now, however, there are 300 million Americans, yielding a ratio of one representative for every 790,000 Americans. If we apply this ratio to 1790, there would have been only five members in the House of Representatives. Or, to put it another way, if the ratio of the 1790 Congress existed today, there would be over 9,000 members in the House. (Source, "Dismantling Leviathan" by Donald W. Livingston)

"Representative democracy" is a joke, in other words, and the Internet is exposing it as such.

mikalIran divided over governance, finances, nukes#1512941/21/07; 13:45:21,,176-2557946,00.html

Iran's strongman loses grip as ayatollah offers nuclear deal
Marie Colvin and Leila Asgharzadeh, Tehran | The Sunday Times | January 21, 2007 | Snippit:
"IRAN’S supreme leader is considering a change of policy on the country's nuclear programme in an effort to defuse growing tension with the West, according to senior sources in Tehran.
Alarmed by mounting US pressure and United Nations sanctions, officials close to Ayatollah Ali Khamenei favour the appointment of a more moderate team for international negotiations on the supervision of its nuclear facilities.
The move would be a snub to the bellicose president, Mahmoud Ahmadinejad, whose threats to destroy Israel have left Iran increasingly isolated and facing a serious economic downturn.
Tehran sources said the impetus for a policy switch was coming from Khamenei, who has ultimate power over Iran's foreign policy, security and armed forces.

Khamenei is said to believe that Washington's aim is not only to halt Iran's nuclear programme but to overthrow the regime. He also considers the national interest is being undermined by an inexperienced president whose rhetoric is unnecessarily inflammatory.

Under proposals now being debated, an international group made up of the permanent five members of the UN security council, plus Germany or a nuclear power such as India, would oversee and monitor Iran's nuclear programme.
Washington may judge this too little, too late. But European negotiators would be expected to regard such a move as a significant step towards reopening talks about the programme. Tehran insists it is for civilian power but the West believes it is aimed at creating nuclear weapons."
Mikal --> A thaw in tensions may boost UN prestige and lighten the burden of those seeking to cut back US ME committments.

Chris PowellChina's multi-billion-dollar question#1512951/21/07; 15:45:06

By Richard McGregor
Financial Times, London
Sunday, January 21, 2007

With a vaguely worded statement from Wen Jiabao, China's premier, at the close of a weekend meeting in Beijing on finance policy, the die has been cast for a momentous change in the management of the country's massive foreign exchange reserves.

Mr. Wen said the management of the reserves, the world's largest at more than a thousand billion dollars, should be improved and the channels through which they are invested diversified.

Such remarks might seem to be little more than common sense but, against the backdrop of an intense, year-long debate in China about how to use the money, Mr. Wen's remarks represent a decisive policy shift.

Everyone from senior leaders to local policy entrepreneurs has been floating ideas about how to use the money, ranging from funding education and health systems to buying foreign oil and stocks. Such policy proposals can now be put forward for possible adoption.

Once a plan has been implemented, in five to 10 years, Beijing could preside over one of the world's largest and most powerful investment agencies.

The debate thus far has irritated some economic policymakers who testily point out that the reserves cannot simply be spent as they represent assets on the central bank's balance sheet.

The government, or some agency under its control, would have to account for the funds in some fashion, perhaps through the issuance of bonds to the People's Bank of China.

But the PBoC has already used $60 billion (46 billion euros, 30 billion pounds) to recapitalise the big state banks through Central Huijin Investment, the holding company for state assets under its control. That bailout set a precedent that others are keen to follow.

Mr. Wen did not endorse any specific plan but has indicated the government will consider proposals on how to use some of the money -- now mostly locked up in US Treasury bonds -- more aggressively.

Initial projections for the amount of money that could be more actively managed are $200 billion to $300 billion but Mr. Wen shed no light on this.

"China will diversify the use of its reserves but, as to how it is actually done, there are still some different ideas," said Ha Jiming, an economist with China International Capital Corp., a local investment bank. "There will almost certainly be some outsourcing as a result -- it's difficult for the government to manage the reserves this way and invest abroad."

The government will take some time to sort through the bureaucratic competition developing round a plan to establish a state body to oversee any investment of the reserves.

Huijin has long been discussed as a potential vehicle but the Ministry of Finance, which sees the reserves as its to manage, is battling to establish a role for itself in any new agency.

Mr. Wen said at the meeting's close that China should take "various measures to improve the basic balance of international payments" -- a statement just as important as the issue of reserves management.

Beijing's reserves could double within four years based on current projections, driven mainly by an ever-expanding trade surplus.

As long as Beijing maintains its present posture of allowing only an incremental appreciation of its currency, the renminbi, and runs a large trade surplus, its reserves will continue to balloon.

Beijing's policy has long been to have its global trade basically balanced but announcements recommitting the country to such a path have reached a peak in recent weeks.

Such statements appear to reflect rising awareness in Beijing of growing impatience in Washington and Brussels, where perceptions that China is pursuing unfair trade policies are hardening.

Combined with suspicions about China's geopolitical ambitions, a failure to address such perceptions risks political confrontation between China and the US and Europe.

Such tensions could also have a practical impact on China's ambitions to put its reserves to better use and the West's efforts to bring Beijing closer into the prevailing global order.

In a hostile world, the US and Europe might not welcome Chinese investments, especially the purchase of assets such as raw materials.

That would propel China to look for more properties in countries such as Sudan and Iran -- a path that would raise tensions even further.

MKChris#1512961/21/07; 17:02:37

Is it just me or has this been one of the worst weekends for the United States, the dollar and financial markets, we've seen in some time? Ecuador announces its debt default -- something sure to cause more than average consternation on Wall Street. Venezuela installs Chavez officially as dictator to carry out radical economic and political programs -- with an implied threat to a major source of oil for the United States. China announces its decision to dump between $200 billion and $300 in U.S. Treasuries -- not to speak of the fact that it is unlikely to buy more U.S. debt. Congress is digging in for a major battle with the Bush administration. And, through it all, the lid is blowing off Iraq. It will be interesting to see how it all plays later tonight and tomorrow when the markets are in full operation.
GoldiloxWeekend#1512971/21/07; 17:11:58

@ MK,

Sure does seem like mucho caca is fanward bound. The China thing in itself is pretty major, but the eerie timing of all the events you mention MUST be eliciting some serious Maalox moments in AC-DC and Nueva York.

Do Paulson and his Pirates have enough fingers to plug all these holes in the dyke?

dkalenseCHINA & GOLD & USD.#1512981/21/07; 17:13:42

China & the US are in a relation which benefits both. Although we should expect China to diversify USD over time; they will not act imprudently and initiate a drastic decline in USD (it simply would not serve China's interest).
The Global Imbalances will be rectified over time.
USD will probably end 2007 around NYBOT 81 USDX. This will not be a bad thing; all that must happen is for the decline to be controlled.
Those who love Gold should be careful. The Markets do not move according to wishes, or what may seem obvious to some.
Kind Regards to all

LacklusterCinese Interests, what are they?#1512991/21/07; 17:17:15

"China & the US are in a relation which benefits both. Although we should expect China to diversify USD over time; they will not act imprudently and initiate a drastic decline in USD (it simply would not serve China's interest)."

What if Chinese interests aren't what you think they are?

GoldiloxDX and Yuan#1513001/21/07; 18:26:29

@ dkalense,

The Yuan is not in the USDX basket of currencies, and has no relationship to the DX.

You may be right that the DX will finish the year at 81, if the other member currencies rush to devalue equivalently to the US dollar, but that can only accelerate the PoG and all other resources as measures of REAL inflation.

Druiddkalense (1/21/07; 17:13:42MT - msg#: 151298)#1513011/21/07; 18:27:20

Druid: Given an order of magnitude difference in actual wage earners in China versus the U.S., how many Chinese labors, or throw India into the equation, does it take to equal the average U.S. Labor rate in terms of buying power or "consumption"? Really, work the arithmetic. You will begin to realize the American wage earner won't be missed at all as modern day mythology would suggest. Ford figured it out and thus the middle class in America evolved and flourished. As easy and quickly as it took Nixon to appear on TV and close the "Gold Window", it would take the Chinese President to appear on local national TV and decree a wage increase to the average Chinese laborer thus making the American consumer, once and for all, a non-entity in terms of consumption as the beat goes on....
AnotherAussieChinese Trillions#1513021/21/07; 18:34:50

For the last 7-8 years I have been reading the material on this site almost every day for that period. I would like to thank the posters for the effort in researching, commenting upon and presenting the material. For my part I have diligently reading. I (and no doubt most goldbugs) have been looking for information that confirms that the worlds'perception of the US dollar is changing to the negative. Looking beyond the the spin applied by US goverment and minions I can not see how the US can avoid problems wth the economy in near future. If economic and finacial pleb such as myself can see this, why has China allowed and continuing to allow the reserves of US dollars to get to such a high level without investing in something of substance in case of US dollar going down the sink? The only conclusion I can see is that they don't see this eventuality occurring. Can anyone enlighten me as to a reason?
dkalenseCHINESE INTERESTS.#1513031/21/07; 19:02:01

Hello to all.
I appreciate all the reactions to China & GOlD & USD.
True, the Yuan is not part of the USDX. However, if China divested USD holdings in masse... the USD would fall against the basket currencies which do comprise USDX. Of course, the Yuan remains pegged to USD because China at this time cannot risk its export market.
That is the Chinese interest which would not be served by USD collapse, its strong Export Economy.
Sometimes I think people fail to understand that although China is huge and important- US Economy dwarfs that of China- GDP 12trillion versus less than 3trillion. Chinese consumers are not yet ready to replace US consumers, and shall not be for some number of years.
regards, dkalense.

GoldiloxUS portion of China's exports#1513041/21/07; 19:22:09

Numbers I have seen place the proportion of Chinese exports to the US around 20-30 %.

If they were cut by 25%, that would mean only a 5-6 % readjustment for Chinese manufacturers. The global shippers would suffer more.

Those numbers may not totally reflect all products that end up in the US through OEM intermediaries, but they are truly indicative of the fact that China's export market is NOT a "one-trick pony".

mikal(No Subject)#1513051/21/07; 20:39:18 Summers, Trichet Warn Davos Party-Goers They Underestimate Risk | John Fraher | Jan 22 2007
Draw parallels to 1914

mikal(No Subject)#1513061/21/07; 20:49:23

OPEC Dumps Treasuries at Fastest Pace Since 2003 on Oil Slide - Bloomberg - January 22, 2007
melda laureHmm. could get interesting#1513071/21/07; 22:39:03

Lord Kosares you perhaps overlook the chinese missile test? They say little, and perhaps wave the big stick. The US resorts to "schtick" because they have no stick.
Sierra Madre"THE WORST WEEKEND...."#1513081/21/07; 23:42:41

I may be totally mistaken, but I think that this talk by China about "diversifying reserves" has now become not only a possible plan but a clear expression of policy.

This, in itself has serious adverse implications for the Dollar and favorable to GOLD. Let's see how the markets react tomorrow!

But, it is my personal feeling that this subject has now been brought forward more forthrightly, and not coincidentally, with the increasing probability of a US /Iraeli strike on Iran.

Might it not be a subtle way of warning the US about stepping on China's toes in going after Iran?

The fact is - I believe - that although both countries have been deriving what they consider to be mutual benefits from trade, the Chinese might just be willing to dump dollars en masse, no matter what the consequences to their own economy. China has suffered for centuries, so one more ordeal is not the end of the world for them. I don't think that those urging war on Iran should think they have China in their pocket. They may be very badly surprised.

I think China holds a much stronger hand, than the US.

Just my opinion, of course!


TownCrierChina Says Will Use Foreign Reserves to Buy Resources#1513091/22/07; 05:28:57

an. 22 (Bloomberg) -- China, the world's biggest consumer of coal and metals, will use its foreign exchange reserves to buy ``strategic'' resources, Vice Premier Zeng Peiyan said.

The government will increase the nation's purchases of resources for strategic stockpiling when there are ``plentiful'' reserves, Zeng said in a speech carried on the Ministry of Land and Resources Web site today.

China wants to improve the management of its $1 trillion reserves and will further advance the pace of change in its foreign exchange market, Premier Wen Jiabao said Jan. 20. The nation is building an emergency supply of crude oil and plans to expand that to metals to shield the world's fastest-growing major economy from supply disruptions.

China also wants to reorganize the mining and resources industry...

The government plans to increase resources taxes within three years to curb excessive mining and conserve supplies, he said.

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

In any talk of foreign exchange reserves, GOLD is among the most "strategic" resources of all; but, of course, with proper respect to political sensitivities, one dare not mention it by name in a news report such as this.

Also, make special note of the final excerpted passage. We've said it countless times -- the future conditions will not bode so well for the SHAREHOLDER of goldmining stock. Don't be a "sitting duck". Choose physical gold.


GoldiloxBut Seriously, Folks...#1513101/22/07; 06:56:01


It's hard to take the Eastern Media Establishment seriously when there is, what appears to me, to be a "bury the patriots" campaign going on. "What in the world is George grumbling about at this hour," you're asking? Ah. I just read the NY Times story about how a "Rush of entries gives '08 Race Early Intensity." Notice something missing? Hint #1: Tom Tancredo. Hint #2: Ron Paul. Not a mention that I caught, although admittedly, the coffee is still soaking in.

I'm not generally a media critic, but when a story mentions names of current and past runners & losers like Clinton, Richardson, McCain, Romney, Edwards, Brownback, Obama, Clark, Kerry, Bush, Gephardt, Bayh, and Warner, I'm maybe not surprised, just a little disappointed that Paul and Tancredo weren't at least mentioned..

Why not at least mention that Ron Paul is running for president, too? And so is that Colorado patriot Tom Tancredo.

It appears to me that border defending, Constitution supporting, hard money advocates aren't getting the same ink as folks like ex-presidential media royalty, a trial lawyer, and so on. Maybe I've misread something and don't understand the issues facing America. To my simplistic way of thinking, border defending, constitution supporting, and sound money ought be at the top of the list. I guess that's why I publish my own financial news and op-ed site, huh?


Can't expect Ruppert and CIA's "bought and paid for" media to all of a sudden care about "issues" in place of their "public interest stories". Nitwits like Nancy Grace and Catherine Crier love to sensationalize stories like the CIA agent's daughter who went missing when looking for "a good time" in the Aruba nightlife, but wouldn't dare point a single finger in the direction of their "corporate masters", who are robbing the citizenry blind.

GoldiloxCurrency Manipulation#1513111/22/07; 07:06:12

Notice how the admin continually admonishes China for "currency manipulation" because it maintains its peg, but never mentions the Yen, which is falling even faster than the Sawbuck to power Toyota, Nissan, Hitachi, Sony, Matsui, Fujitsu, and Mitsubishi in their complete takeover of formerly US industrial strongholds.

hmmmm . . . political?

tejbearAnotherAussie #: 151302#1513121/22/07; 08:19:11

I believe that China is well aware of the dollar's predicament. However, China's rise to an industrial power house has been fueled by the current trade arrangements, whose foundation is based on the Yuan being "pegged" or maintained at a fixed rate to the dollar.

For all of its new strengths, China still has many significant internal problems to solve. But China is working at reducing its dependency on the US trade. At some point in the future, China will move away from the dollar, and it will lose value. How much the correction for the dollar will be, no one knows. A talked about figure is 50%, but the Mogambo believes it will drop to being just about worthless.

Many of the pundits believe that the dollar correction will happen in a year or two. But it is difficult to say as most CBs, businesses & governments are working hard to prevent a dollar collapse as all players will get burned to some degree.

But if the moron or Israel get their war with Iran going in April, watch out.

The Bear

mikal(No Subject)#1513131/22/07; 08:30:00,+09:00+AM,+09:00+AM Blanchard Lauds IMF Central Bank Gold Lending Accounting Change as Industry Landmark - PRNewswire - January 22, 2007
Mikal- Says accounting change would increase transparency, improve market, though will take some time for IMF to impliment the change.

mikalDue to Tuesday's 'State of the Union Address'?#1513141/22/07; 08:36:32

U.S. Leading Economic Indicators Release Postponed - The Conference Board | PRNewswire | January 22, 2007
Delayed until tomorrow, perhaps this will be skewed higher by the warm December weather and 'adjustments'.

968OPEC Dumps $10.1 Billion of Treasuries as Oil Tumbles #1513151/22/07; 08:54:38

Exporters including Indonesia, Saudi Arabia and Venezuela, sold 9.4 percent, or $10.1 billion, of their U.S. government debt securities in the three months ended in November, according to Treasury Department data. Members of the Organization of Petroleum Exporting Countries last sold Treasuries for three straight months in June 2003.
Clink!@ The Bear - don't underestimate him !!#1513161/22/07; 09:35:39

If I might offer a small word of advice, I think it is a bad idea to use denigrating terms to describe the President. For better or worse, I think that he has always had this image of not being the sharpest knife in the drawer - that's how people were conned into voting for him in the first place. How dangerous could someone like that be ? To consider him stupid is not only to underestimate him personally, but to underestimate his backers. Ever since the beginning of this Administration, there has been a sequence of duplicitous action which seeks to augment the power of the White House - the latest seems to be to get rid of all the U.S. Attorneys who might be tempted to indicted politicians on corruption charges - at the expense of the rest of us, Congress included.
Now I would agree with you that, on the surface, the saber-rattling with Iran is being monstrously cavalier with the survival of everyone on this planet. After all, nuclear fallout has no effect on only the other parts of the Earth where there is no wind.
So let's assume he and/or his handlers are extremely shrewd people. And possibly totally callous as well. They are probably not the same power base as Daddy, or else the current course would be along the lines of the Baker report (unless that's a double bluff !!). Where are they trying to get to with this ? Remember, it's like a game of chess - it's not the current move that matters, but the one in about six turn's time ! What troubles me most is that the U.S., especially in Iraq and Iran over the last 50 years, has proved to be a less than mediocre strategist.

Thoreauly@ Clink!#1513171/22/07; 09:50:10

I agree, as it's not so much the Bush administration as it is the Bush-Cheney administration. And however dull a knife Bush may be, Cheney is a veritable meat cleaver.

Even so, they've managed to butcher things so badly in Iraq that even more butchering (so they think) is now called for. Thus will they "orchestrate a war with Iran and to initiate wider conflict in the Middle East before public and military pressure forces the Bush Regime to withdraw US troops from Iraq" (see link).

GoldiloxBush Backers?#1513181/22/07; 10:55:40

@ Clink,

While a few cabinet members (think PR men) have bolted the ranch, the "power base" of the Bush cabal remains pretty much the same, especially behind the scenes. . . oil and the IMF/WB, which is why "retired" cabinet members move to those organizations.

Cheney was a mover and shaker in Daddy's cabinet when Middle East power-jockeying was termed "Balance of Power" and the groundwork was laid for the current scenarios.

Rather than take them all on, as seems to be the current plan, Rummy was arming the Iraqis and Ollie was arming the Iranians, while we cavorted them to "have a go at each other."

It should not be surprising that when bin Laden started telling Muslims that the real enemy was the one cavorting them to kill each other off that they started listening. Bin Laden's message is not unlike the Champ telling Howard Cossell, "Howard, you just enjoy watching two black men beat on each other"."

mikalStop the monsters#1513191/22/07; 12:55:23

Monday, January 22, 2007 -

Dr. Ron Paul is now officially running for President in 2008, with his main issues focused on fiscal responsibility and the end of the war in Iraq. However, this does not mean he's going to be a limited critic of Bush administration policies.

According to a posting at the 9/11 Blogger, as reported at an Internet news site, Congressman Paul [R-TX] was recently on the Alex Jones Show. He responded to a caller's question regarding the need for an investigation into the alleged cover-ups surrounding the September 11th attacks, by noting that although he saw the likelihood as pretty slim, he would welcome such an investigation.

"I think we have to keep pushing for it," he was quoted as saying, "and like you and others, we see the investigations that have been done so far as more or less cover-up and no real explanation of what went on."

Chris PowellSummers, Trichet warn Davos party-goers they underestimate risk#1513201/22/07; 13:19:58

By John Fraher
Bloomberg News Service
Monday, January 22, 2007

BERLIN -- Lawrence Summers has a message for investors heading to the Swiss mountain resort of Davos this week to toast a year of booming returns and record bonuses.

"It's worth remembering that markets were very upbeat in the early summer of 1914," the former U.S. Treasury secretary observes.

While Summers isn't predicting the onset of another world war, he and European Central Bank President Jean-Claude Trichet are among those who are warning the more than 2,200 movers and shakers at the 37th annual meeting of the World Economic Forum that they've become too complacent about risks ranging from trade imbalances to terrorism.

A glut of cheap money and the strongest global economic growth in three decades have encouraged banks, private-equity firms and hedge funds to bet that the good times will keep rolling.

"It's too good to be true," says Vittorio Corbo, head of Chile's central bank, who will speak at a seminar in Davos about the dangers of derivatives. "Tomorrow the mood could change. We have to be prepared."

Davos attendees -- who are likely to include U.K. Prime Minister Tony Blair, U.S. Sen. and possible 2008 presidential candidate John McCain, Citigroup Inc. Chief Executive Officer Charles Prince and Carlyle Group Inc. co-founder David Rubinstein -- have heard the warnings about complacency before.

In fact, they heard them last year at Davos, when Summers, the former president of Harvard University, billionaire George Soros, and Bundesbank President Axel Weber cited the potential consequences of trade imbalances, budget deficits and the then- surging price of oil.

Since then, the rewards have just gotten better for investors. Prices of London's most expensive homes surged 29 percent last year, bonuses at the five largest U.S. investment firms rose 30 percent to $36 billion and the Dow Jones Industrial Average climbed to a record.

"We shouldn't pour cold water on everything," Deutsche Bank AG Chief Executive Officer Josef Ackermann, 58, said in a Jan. 16 interview. "We, the eight or nine players in global investment banking, have a very good future."

Profits are soaring, the value of takeovers last year rose to a record $3.6 trillion, and the Morgan Stanley Capital International World Index of global stocks climbed to a record on Jan. 3. Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein, another Davos attendee, last year earned a bonus of $53.4 million.

With banks tapping what Trichet calls an "ample" pool of liquidity, investor appetite for risk has never been greater.

Several measures show perception of risk is near historic lows. The gap between the yield demanded by investors to hold emerging-market and U.S. government bonds narrowed to a record on Jan. 17, according to JPMorgan Chase & Co., while the amount of debt used to finance European buyouts rose to 8.7 times earnings in the third quarter, the most ever.

Hedge funds in the U.S. are the most leveraged since 1998, the year that Long-Term Capital Management collapsed, according to Bridgewater Associates Inc., a Westport, Connecticut-based fund manager. Regulators from the U.S. Securities and Exchange Commission, the Federal Reserve Bank of New York and the U.K.'s Financial Services Authority, concerned that credit standards for hedge funds are too lax, are jointly probing whether lenders set strict enough limits on loans.

Meanwhile, one gauge of stock-market volatility -- the Chicago Board Options Exchange's VIX index -- shows that concern about a slump in equity prices is at a 13-year low.

Trichet, 64, who's scheduled to speak at a Davos seminar on the topic along with Israel central-bank chief Stanley Fischer, People's Bank of China Deputy Governor Wu Xiaoling and Harvard economist Kenneth Rogoff, said at a Jan. 11 news conference that "we continue to see, overall, a low level of risk appreciation, and a disorderly unwinding of this situation would be a risk that we have to be fully conscious of."

Willem Buiter, professor of European political economy at the London School of Economics, is considerably more blunt.

"Current risks are ludicrously underpriced," says Buiter, a former member of the Bank of England's Monetary Policy Committee. "At some point, someone is going to get an extremely nasty surprise."

Among things that might go wrong: a renewed surge in oil prices. Jim Rogers, chairman of New York-based Beeland Interests Inc. and co-founder with Soros of the Quantum hedge fund, says crude is likely to exceed $100 a barrel, almost double its current level.

"Within the context of the bull market, oil will go over $100," Rogers, who predicted the start of the commodities rally in 1999, said in a Jan. 18 interview in Tokyo. "It will go over $150. Whether that is in 2009 or 2013, I don't have a clue, but I know it's going to happen."

Higher interest rates might also topple exuberant markets. The Bank of England surprised investors this month with a quarter point increase in its benchmark rate. Trichet's ECB is raising borrowing costs to try to rein in soaring asset prices and credit growth.

The ECB, unlike other major central banks, explicitly uses money supply to gauge inflation. Growth of M3, the broadest measure of money supply and the bank's preferred measure, unexpectedly accelerated to the fastest pace in more than 16 years in November, climbing 9.3 percent.

Some investors have already been stung. Venezuela's Caracas Stock Exchange Index has lost more than a quarter of its value in the past three weeks after President Hugo Chavez pledged to nationalize industries. The prices of copper and other commodities have plunged partly on concern a slowing U.S. economy will cool demand.

"We've seen a taste of what's to come in the last few days," says Nouriel Roubini, a professor of economics at New York University who will attend the forum's opening seminar on the state of the global economy with Summers. "You'll see declines in equity prices, further falls in commodity prices."

Summers, 52, in an e-mail drawing his World War I parallel and expanding on a column he wrote in the Financial Times, says that "financial history demonstrates that the biggest liquidity problems always follow the moments of greatest confidence." The six months after the Sarajevo assassination of Archduke Franz Ferdinand, heir to the Austro-Hungarian throne, saw the Dow Jones Industrial Average lose a third of its value -- an object lesson in the perils of failing to adequately price risk.

"Complacency can be a self-denying prophecy," Summers says.

mikal(No Subject)#1513211/22/07; 13:34:45

Petrodollars Will Test Asia's Dollar Fixation: Andy Mukherjee

By Andy Mukherjee

Jan. 23 (Bloomberg) -- A glance at stock values suggests that lower energy prices are an unalloyed blessing for Asia. That may not be true.

Morgan Stanley Capital International's emerging-market equity index for Asia has risen 22 percent since oil began its descent in early August last year.

With crude-oil futures hovering at about $52 a barrel in New York compared with $77 on July 14, Asian consumers have reason to be optimistic about their household budgets.

The region's taxpayers, too, should be happy to see a sustained reversal in crude-oil prices, which more than quadrupled between January 2002 and July 2006.

Governments have subsidized pump prices from China and India to Indonesia and Vietnam.

If oil keeps plummeting -- because of global warming, the El Nino weather effect, slowing world economic growth, rising crude output, or whatever -- Asia may pay a big price as a financier of U.S. consumerism.

Last year, the Asian monetary authorities, together with the central banks and state investment agencies in oil-exporting countries, bought about $770 billion in foreign-currency assets.

These official purchases financed most of the estimated $870 billion U.S. current-account deficit in 2006, according to research by the Federal Reserve Bank of New York.

If the petrodollar surpluses dwindle, the job of sustaining U.S. consumption will fall squarely on the Asian central banks.

Should the monetary authorities in China, Japan, South Korea and India continue to feed the American spending habit or invest their surpluses elsewhere?

Asia's Dilemma

If they keep loading up on U.S. Treasuries, and the dollar eventually collapses, Asian central banks may have to sustain large losses on their balance sheets.

If they stop buying ``risk-free'' U.S. debt, the dollar might decline anyway. That's the dilemma.

Of course, it all depends on the extent of the slide in energy costs. Last year, oil-producing nations probably added about $600 billion in assets. ``Even with crude at $50 a barrel, oil sovereigns would still be channeling some $300 billion of savings annually into global financial markets,'' says Ramin Toloui, a fund manager at Newport Beach, California-based Pimco, a unit of Germany's Allianz SE.

Yet, Toloui's research shows that compared with Asian central banks' penchant for investing trade surpluses primarily in dollar-denominated ``conservative'' securities, petrodollars are more likely to have been invested in riskier assets, including emerging-market equities.

Oil as Spoiler

It stands to reason, then, that if oil-exporting countries from Russia and Venezuela to Saudi Arabia and Norway earn substantially less for their commodity this year, or if they get spooked by a fall in the dollar, they might be tempted to soup up their total returns by cutting back on U.S. Treasuries and shifting funds to higher-risk, emerging-market assets.

To the extent that such diversification may already be under way, the rise in emerging-market stock and property prices and the narrowing of bond spreads aren't surprising.

While investors in Asia won't complain about petrodollars chasing emerging-market assets, the monetary bosses in the region may not be particularly happy.

A shrinking appetite for dollar-denominated securities, if it leads to a precipitous decline in the U.S. currency, will dent the value of Asian central banks' foreign-currency reserves.

China's Challenge

China is most at risk. Analysts estimate that more than two- thirds of the country's $1 trillion foreign-currency reserves may be held in dollar-denominated securities.

There is a strong indication that China will soon set up an institution to invest part of the reserves in riskier assets. Stephen Green, a Standard Chartered Plc economist in Shanghai, estimates the size of this new investment agency at $200 billion.

The transfer of foreign exchange from the People's Bank of China to the new agency has to be gradual. Otherwise it may become another signal for other sovereign and private investors to diversify away from the dollar. As much as China would want to prepare for a weak dollar, it won't want to cause it.

Seeking returns outside the safety of U.S. government bonds is nothing new for countries in the Persian Gulf.

Back in 2005, state-owned Dubai International Capital LLC acquired Tussauds Group, owner of Madame Tussauds waxworks museums and the London Eye observation tower.

Married to Dollar

The monetary authorities in Asia can't diversify out of the dollar with the same degree of nonchalance as their counterparts in oil-exporting nations. Asia is married to a model of export- led growth whose continued success depends on a strong dollar.

Asia keeps its currencies undervalued in order to sell goods to the U.S. on the implicit understanding that it will also provide the financing -- through the purchase of U.S. Treasury and agency bonds -- to sustain the consumption.

If Pimco's Toloui is right and oil producers now hold a quarter of the world's sovereign assets, Asia and the U.S. may not be able to continue their private arrangement for long.

Think of it as a game of musical chairs between the U.S. and Asia. The oil exporters now control the music.

MarkeTalkIs January 2007 Deja Vu?#1513221/22/07; 13:38:38

For those hardy souls who watch charts and graphs and take a longer term view than most stock market players, today is the seven-year anniversary of the top of the Dow Jones. How appropriate that the Dow celebrates by dropping 100 points. We should all be cognizant of anniversary dates, according to legendary stock market trader W.D. Gann. It would not surprise me to see another top occur right now, albeit at a slightly higher level than in 2000, before another plunge. I find it interesting that all of this is also occurring just before the President's State of the Union address tomorrow night.

In conclusion, as stocks go down, gold usually does the opposite and goes up. Given the minfield of political debate over the war in Iraq, possible attack by the US or Israel on Iran's nuclear facilities, and the Democrats desire to repeal the Bush tax breaks, I don't see any real positives that should make stocks go higher. In fact, I believe just the opposite to be the case. For those clients of mine who have been procrastinating about buying their initial positions or even adding to existing ones, you will be kicking yourself if you wait any longer. Just pick up the phone and give me a call.


The CoinGuyThe DJIA...#1513231/22/07; 14:05:55

If I'm recalling correctly the top in the Dow was on January 14th. Taking Gann into consideration, what day was the '80 high on gold?



mikal'Free trade' futility#1513241/22/07; 14:40:59

US Free Trade Discussions Stumble
The US wants more access to Asian car markets
BBC - 01/22/07 -- Excerpt:
"Crucial negotiations between the US and two of its leading Asian trading partners about free trade agreements are in jeopardy.
Talks between US officials and their counterparts from South Korea and Malaysia have become bogged down in disputes over access to key markets.

Korea objects to removing barriers on rice imports while Malaysia wants to keep Malay-friendly procurement plans.

The US effectively has less than two months to try to secure agreements."

tejbearClink! #: 151316#1513251/22/07; 14:50:01

You might be right in as much as this website IS monitored by the Jack Boots. But I rather think that the government will go after activists, rather than a blogger. As a Vietnam Veteran, I have earned the right to express my opinion, and if the Jack Boots don't like it, tough.

As for why the government appears to be suicidal: have you ever heard of a gentleman named George Green? He has a video on the attached website location. Frankly, to me this guy seems a little bit over the edge, so I am not in a position to say how creditable he comments are. But he makes an argument that the masters behind the curtains are pushing the world towards WWIII with a goal of reducing the world's population by ~90+%, or goal of 500 million people. The result is that global warming issues are resolved, peak oil and other resources issues are brought under control. But he also talks about UFOs, talking to aliens, and other items that leave me with my head shaking.

Oh the other hand: why does it appear that the "masters behind the curtains" seem to want to drive the world into a ditch. This just doesn't make any sense either. On last week's interview, in the international news section, they mentioned how Russia wants all of their commercial and military ships away from the US's east coast this April with the stated reason was Russia expects the US to attack Iran. On the same newscast, they advised that the ING Bank was also expressing concerned about an impending attack on Iran in April.

If Iran is attacked, just how high do you expect the POG to go? $1,000, $2,000? If we end up in WWIII, will it matter?

If is right, the use of the term moron is a massive understatement. Even my ultra conservative friends are against the idea of attacking Iran. We are losing in Iraq, but attacking Iran just doesn't seem to be a problem for the moron.

Speaking of stupid, how about that Israel? Everything I read indicates that if the US doesn't attack Iran, Israel will. And of course, Iran just received over a billion $s worth of missiles from Russia that can easily reach Israel. Does Isreal think that Iran is just going to "lay down"? Given Israel's fiasco in Lebanon last summer, you would think that they would want to step back and rethink this attack & kill strategy that has never brought lasting peace to the Middle East. Unfortunately, even my Jewish buddy, who is a medical doctor, justifies that attack on Iran because "god gave Israel to us Jews", so they must protect it. How do you argue with logic like that?

As a species, is there any hope?

The Bear

R PowellTejbear#1513261/22/07; 15:11:33

Your question:.."As a species, is there any hope?"

Depends on your time frame, I guess. Given enough time, probably no hope. I wonder if the next dominent species will fare any better or if our innate undoing is not species specific.

Lackluster(No Subject)#1513271/22/07; 15:23:39

"As a Vietnam Veteran, I have earned the right to express my opinion..."

And here I thought that that right was unalienable.

Thoreauly@ R Powell#1513281/22/07; 15:26:49

Assuming we survive the near term, I believe that our "next dominant species" will be us, but without all the biological baggage (see link):

"An analysis of the history of technology shows that technological change is exponential, contrary to the common-sense 'intuitive linear' view. So we won't experience 100 years of progress in the 21st century—it will be more like 20,000 years of progress (at today's rate). The 'returns,' such as chip speed and cost-effectiveness, also increase exponentially. There's even exponential growth in the rate of exponential growth. Within a few decades, machine intelligence will surpass human intelligence, leading to the Singularity—technological change so rapid and profound it represents a rupture in the fabric of human history. The implications include the merger of biological and nonbiological intelligence, immortal software-based humans, and ultra-high levels of intelligence that expand outward in the universe at the speed of light."

If so, and if warring states don't destroy civilization as we know it, then those who own gold amid the transition from scarcity to abundance should prosper enormously.

MarkeTalkThe Coin Guy. DJIA Top. Top in Gold#1513291/22/07; 15:36:39

In answer to your question, gold reached its highest price about this time in January 1980. I don't have the exact date in front of me, but I remember it was right around President Reagan's inauguration. Paul Volcker, who was Reagan's Fed Chairman, proposed raising interest rates until there was no more inflation (which he did over the course of the following two years, causing the deepest recession since the Great Depression). Gold took notice and dropped about $200 in about two weeks. As I recall, all this occurred in the month of January 1980.
mikalFreedom of edict, land of opportunity#1513301/22/07; 15:51:29

Coin shortage could turn pennies to nickels
Mon Jan 22, 2007 4:34pm ET | By Kevin Plumberg -- Excerpt:

"NEW YORK, Jan 22 (Reuters) - Talk about pennies from heaven.
A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon, says an economist at the Federal Reserve Bank of Chicago.
Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of, increasing the risk that speculators could melt the coins and sell them for a profit.
Such a risk spurred the U.S. Mint last month to issue regulations limiting melting and exporting of the coins.

But Francois Velde, senior economist at the Chicago Fed, argued in a recent research note that prohibitions by the Mint would unlikely deter serious speculators who already have piled up the coinage.

The best solution, Velde said, would be to "rebase" the penny by making it worth five cents rather than one cent. Doing so would increase the amount of five-cent coins in circulation and do away with the almost worthless one cent coin."

Mikal-- Good reporting on the conundrum of the Mint
as commodities and inflation rise and employment falls.
Here is the potential for another far-reaching edict in the land of the free and the home of the intangible. Opportunity for profit? Who cares.

USAGOLD Daily Market ReportPage Update!#1513311/22/07; 16:19:33">
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 choppy, reacts to oil and dollar

January 22 (MarketWatch) -- Gold futures fell from an intraday high of more than $640 an ounce Monday to close lower for the session, reflecting oil's price retreat and finding further pressure from gains in the U.S. dollar.

In the energy market, oil prices retreated as February contracts expired, but natural-gas futures continued higher with colder-than-normal temperatures forecast for much of the U.S. in the coming days. The dollar started the week on a firmer note, touching a fresh four-year high against the yen, with the Japanese currency under pressure over skepticism that the Bank of Japan will raise interest rates in February.

"The movements of the energy market will remain influential to gold in the coming sessions," said James Moore, an analyst at London-based "The metal may garner some support as oil prices to appear to be forming a base above $50."

For now, "gold looks positive on the charts" but needs to clear what Moore called a "congestion area" that he pegged at $642 to $648 an ounce. If it breaks through, this would "enable gold to reach $676," he told clients.

The COMEX February gold contract closed down $2.30 at $634.10. The contract had tapped a high of $640.20 during the session -- its strongest intraday level since Jan. 3. On Friday, benchmark gold rose more than $8 and added 1.5% for the week.

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

CometosePUCKER BEN SPEECH#1513321/22/07; 16:52:01

Having had the weekend to think about a speech that may be known in the future as the BERNAKE PUCKER SPEECH.......

It seems that the trader's in the market have been given pause .......

It is contemplated that there is going to be a pause and it isn't going to be the pause that refreshes......

Paper AvalancheBubble insanity#1513331/22/07; 17:08:44

Looking for an affordable crib? You have to read this one to believe it. PA
Flatliner@ mikal's Land of opportunity#1513341/22/07; 17:29:41

"Rebase"! What a concept. Pennies with a purchasing power of 5 cents. I would love to see the common man(woman) come to grips with that idea. I can just see a future press release:

Mint buys down US dept
FoxWannaBe News 6/03/07

"’Pennies from heaven’, is what President Bush stated as he addressed the nation from the front steps of the Federal Reserve building yesterday. ‘With these eight bags of pennies,’ he declared holding up one of the burlap bags that contained eight thousand (8,000) freshly minted 3% copper 2007 pennies, ‘I proudly buy down the US dept and open the doors to a new era for American ingenuity.’ Economists and Wall Street had generally been expecting the move since last Tuesday after word leaked to the press that many banks across the country were once again preparing to open their doors and take advantage of this newfound capital through the new reserve system.

The head of the Federal Reserve, Ben Bernanke, was overhead shortly after the ceremony saying "The Federal Reserve system stands ready to maintain liquidity and vigorously defend our Pennie receipt system. It is in the interest of all nations to ensure the strength of the Pennie and the Federal Reserve will fully guarantee convertibility to all countries."

The rumor on Wall Street was that they could find no better system. "As it turns out," an anonymous trader said on the floor this morning, "the Federal Reserve has learned from its mistakes and with the Four (4) tonnes of confiscated pennies now on reserve, we expect that they will be able to maintain convertibility for centuries. It's a win-win situation."

When the Fed chairman was asked questioned about the gold used to support foreign currencies, he stated "We have found the penny to be superior with regards to liquidity because it is naturally rejected by humanity rather than horded. This characteristic will empower world trade on a scale that we have never seen." When pressed repeatedly about precious metals he said, "What is more precious than a Pennie?"

Flatliner – ‘Rebase’! lol. I can't wait to buy my next house with a handful of Pennies.

GoldiloxUsable link#1513351/22/07; 17:42:20

@ Paper Avalanche,

Here is your link in usable form. I bet the London wannabes are lining up for thei "opportunity".

TownCriermikal, a useful lesson on the ever-present subtlety of news-spin#1513371/22/07; 17:55:35

The prominent headline reads...

"Coin shortage could turn pennies to nickels"

...and the opening remarks indicate...

"A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon"

...whereas the actual, alarming, meat of the matter is given a chair in the second row...

"Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of"

The issue isn't really about "shortage" at all.

The bulk of the article does, in fact, deal with the Chicago Fed's senior economist's frank assessment of the problematic condition of the disconnect between the representational (face) value depreciating below the intrinsic (metallic) value of our currency's present construction. Therefore, the reader should find this article particularly instructive regarding the media's insidious tendency toward soft-pedaling bad news and propagandizing in general.

In other words, the main objective of the media is less about educating the population and more about guiding the public perceptions in spite of the news.

And just as surely, this isn't exactly a newsflash for many of our forum visitors.

Thanks for the article, which was indeed ultimately informative (chocolatey-goodness) beneath it's hard candy shell.


TownCrierFlatliner brilliance#1513381/22/07; 18:04:10

"We have found the penny to be superior with regards to liquidity because it is naturally rejected by humanity rather than horded. This characteristic will empower world trade on a scale that we have never seen."

Your entire post was cleverly instructive, and I found the passage above to be particularly inspired.



FlatlinerReal business opportunity#1513391/22/07; 18:24:38

From the link it reads:

"Convert English text to any of several comic dialects.

The Dialectizer takes text or other web pages and instantly creates parodies of them! Try it out by selecting a dialect, then entering a URL or English text below. If you have questions about what The Dialectizer does or how it does it, please see the "Information" section toward the bottom of this page."

Flatliner – I wonder of the MSM runs the real news through this type of translator before putting it in print? I would love to see a "dialect:" of "news spin" that could be used to re-interpret the articles.

Meanwhile, I'll drop some more zinc in the penny jar.

tejbearLackluster #: 151327#1513401/22/07; 19:40:26

"Unalienable" right? Which country do you live in? In the US, those who have argued against the war in Iraq have been labeled traitors. The list of character assassinations in the US over the last few years tells all. The joke is that this assault is lead by the VP, who didn't even have the balls to serve in the military.

Reporters, who strayed from the party line have been vilified, over and over, and left unemployed. Dan Rather was even taken out. Free speech? Do you live in Canada?

The Bear

TownCrierPensioners bear brunt of inflation woes#1513411/22/07; 19:45:19

LONDON (Reuters) - Pensioners are facing inflation 40 percent above the headline rate, due to the high cost of basic necessities and government policy.

Britain's over-75 population is being hit by soaring food and heating costs, as well as government pension and benefits rules, according to financial services provider Alliance Trust.

Despite a 30 percent surge in gas and electricity prices over the past 12 months, Chancellor Gordon Brown announced last month that this year's winter fuel payment would remain unchanged.

The over-60s receive the payment of between 100 and 300 pounds, depending on age and circumstances...

Retirement savers generally buy an annuity with their pension pot.

This income for life is calculated on the basis of how long the annuity provider thinks the pensioner will live...

...Assets left in the fund when the member dies will be subject to tax of up to 70 percent, potentially on top of any inheritance tax liability.

Hyman Wolanski, head of pensions at Alliance Trust, said: "The over-75s might reasonably ask themselves what the government has got against them.

"It costs the over-75s more than any other group to get by, but the government has not increased their winter fuel payment this year.

"It also allows them to take less income from their pension fund, and if they die with any money left in their pension fund they now face a massive tax grab."

He urged the government to "think again about the financial needs and wishes of the most vulnerable group in society and the negative impact this will have on those thinking about saving through pensions".

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

Once more... "Assets left in the fund when the member dies will be subject to tax of up to 70 percent, potentially on top of any inheritance tax liability."

Good grief. Why do folks insist on making thier lives so complicated and at the same time so vulnerable to government intrusion?

A simple lifelong savings strategy centered around physical gold should do nicely to insulate your purchasing power from the inflationary depreciations of your home (and foreign) currencies, and provides you and your family with a reassuring stockpile of discreet, portable property to help you flexibly and legally outpace and outmaneuver the tax man when it comes down to the dispostion of your assets and inheritances.

"Godspeed, my dear enlightened gold owners..."


Paper AvalancheThanks Goldi#1513421/22/07; 19:49:54

Still trying to figure out how to do everything on the new Treo. It sure makes reading the forum easier throughout the day. PA
GOLD FINGERGOLD HOLDS OWN!#1513431/22/07; 20:20:05

Greetings.....Gold on cold snowy days always warm my soul!

Despite weakening in the markets with many companies showing some kind of loss or down grading like Boeing, it's fascinating to me how gold is relatively steady. This show the continue demand for gold when it possibly should be dropping. Also oil is dropping FAST, yet gold is holding long? Hmmm.....


Oil prices have tumbled. Crude closed at $51.13 this afternoon, down more than 16% since the beginning of the year.

Paper AvalancheGold Finger#1513441/22/07; 20:30:03

You are an annoyance and I find your motives suspect.


RodZone(No Subject)#1513451/22/07; 20:34:10

First post, so greetings to you all. I put a large portion of my funds into gold and silver before reading all the opinions as I could see by the charts, in 2004, where precious metals were heading compared to low bank interest, inflation and taxes on interest income. I have only discovered all the great reasons for PM investment since. I suspect more will follow the same road as I did in the years to come. I did some research and concluded that my ounces were better held as unallocated in the State Mint, rather than at home, for reasons of security and resale.
When I read some of the direr predictions for the world I think about getting it as physical, at home. My other observation is that trading is a scary proposition as most times when you are out of a market, that's when it rises.

GOLD FINGERPlease do elaborate....#1513471/22/07; 20:44:32

REF:Paper Avalanche (1/22/07; 20:30:03MT - msg#: 151344)

Some day's my words are in others they me out....but I am sincere in what I post and continue to seek further light and knowledge here from all in the golden forum....



Paper AvalancheSince you say so...#1513481/22/07; 21:15:18

then you are just annoying. Were I to have more time to expand on how your open ended questions potentially serve to sew seeds of doubt amongst those who may be educating themselves here for the first time all under the guise of a hapless, over the top, gold nut then I would be happy to do so. However, I am content with simply pointing out such facts to counter what appears to be intentional misguidance. Maybe you really are an innocent idiot, but the pattern to your postings would suggest a more stealthy and deliberate intent.

I may be wrong, I often am.


GoldiloxFalling Empires and their Currencies#1513491/22/07; 23:32:48

Part I: From the Fall of Rome to the Fall of the British Empire

When empires fall, their currencies fall first. Even clearer is the rising debt of empires in decline, because in most cases their physical expansion is financed with debt.

In each case presented we have some useful statistical data to show the drama. Every case is different, but the common thing is that the currencies of each and every one of these falling empires lost dramatically in value.


The most revealing part is how Warburg, Rothschilds, and JP Morgan set up the FED as an agent to aid financing of Britain's commitment to retaining colonies at the onset of WWI. Other historians have unearthed the idea that the US only entered what was a European colonial dispute to save Morgan and Rothschilds from British loan default.


Well worth a read.

GOLD FINGERSurvey said.....#1513501/22/07; 23:43:22

It will have to remain a big guess then Sir Paper Avalanche.

That's part of the glory being in a forum with nick names, to keep everyone guessing!

Like Gold its self, no one really knows the true future of its price.

No one here has a magic crystal ball who can pinpoint the POG and how it will all lead.

We can only gather facts from what we read here and other places to make a wise decision about actually purchasing Gold.

Just when you would think the price of gold should be soaring it's utterly falling faster then imagined. Or I might point out how it rises when mysteriously it should be falling.

I am not here to confuse anyone. I am sure if someone really had the assets to purchase gold they would. It's not a matter of if or when. It's simply a matter of .......well I will leave that to be finished by whomever!


P.S. I keep it original. I try to ponder and ask questions. Stupid or not atleast I am not copying and paste everything I find from other places. Nor am I posting a mirage of political comments and other issues like the "war". I think there really is more to life than being caught up in all the BS. Perhaps someone here can offer me something that has NOT BEEN QUOTED IN THE NEWS!

Papa always said to fly low and out of range and have your cloaking devise activated.

Once again. GOLD is hope for me and I will buy A LOT more of it!! Happy 2007 the year of the PIG~

GoldiloxDepleted Uranium, Diabetes, Cancer And You#1513511/22/07; 23:51:50

DU - the gift that keeps on giving!

As long as we keep spreading it around the atmosphere, the nuclear waste issue is "solved", and U is the next best heavy metal investment.

Rather sobering discussion of the issue, but again, well worth the read.

GOLD FINGERThis I know for sure......#1513521/23/07; 00:12:43

Oh yes.....all my transactions with CENTENNIAL PRECIOUS METALS have been FLAWLESS! I buy from no other~
TopazO'nite going...#1513531/23/07; 03:30:15

...getting a bit tough for e-Bond here, to Golds (and Oils) benefit.
Will the Cavalry ride in to the rescue at daybreak a-la yesterday?

We'll know soon enough!

TopazGees there's a lot to like...#1513541/23/07; 03:50:28

...about Gold here.
Look at Yen Gold, and Canuck Gold. CHF and Euro Gold about trains about to leave the station ...TOOT, TOOT!

NOT, definitely NOT investment advice!!

frosty 1The market in 20 years...#1513551/23/07; 06:18:19

My much younger step sister, asked me the other day, if the $$$ she has invested in shares in the various markets would be there for her at HER retirement.
I have long tried to get her to invest in something other then her 401k.
She was wondering if the babyboom crowd would exit the market with thier wealth ,therefore pummeling the value of her account.She feels that S.S. is set up badly in that the people NOW should feel the burden of lower payments and a higher min.age to start benefits,rather then her generation.
I did not know what to tell her...

Clink!Welcome, Sir RodZone#1513561/23/07; 06:32:39

There's nothing more satisfying than being right for the wrong reasons - makes you look to the sky and maybe think someone up there really IS looking out for you !!

PS. If you are right for the right reasons, you can't crow about it too much without ticking off all the people around you who didn't listen. That's why online forums are popular !!!

Clink!@ tejbear#1513571/23/07; 07:36:53

That's quite an eclectic set of presentations there. I'll have to bookmark it for later perusal, though - I'm running about two months behind forum time in matters other than topical items.

One series which I am finding extremely interesting is the Wizards of Money (can't remember who brought them to the Table, but thank you). I'm only on the fourth session, but she has frequently referred to one of the weaknesses of the current world monetary system that there is now so much money available that most lending is no longer done by banks. The figure was around 80% as I recall. Long term, this must spell the end of the banks' cosy profit margins as they no longer have the luxury of fractional reserve lending, and they will have to compete head-to-head with lenders with cold hard cash. Incidentally, this gives the Fed an ever-increasingly difficult time in controlling the economy, because all they can affect is debt creation - they can't do much about the money that has already been created. Heck, even the IMF is in financial straits because there aren't enough third world countries to have been duped into taking their loans.

So what is banking to do ? Presumably, there is a huge desire to mop up all that "extra" cash, so how about instigating a worldwide property boom, where loads of people take out a mortgage. These are then bundled and resold to hedge funds (the ones with all the cash) as mortgage-backed securities. Then, when the property bubble bursts, these securities lose a significant percentage of their value, hedge funds go bust, and large quantities of cash disappear. (The banks, of course, make out like the bandits they are because of all the derivatives fees which they have charged the hedge funds, plus the fees for the bail-outs, and the fees for the company restructurings, etc, etc) The slate is wiped substantially cleaner.

But what if it has been calculated that the property boom can only take the banks so far, keeping the horsemen from the gates for only a few brief years ? Something more substantial is required. Looking back at some of the history behind the official story, we can see banking instigating most of the major conflicts of the past couple of hundred years. The sinking of the Lusitania is possibly the best known "staged" event, but there are a multitude of others. It is best to have a series of veiling reasons for war, and Iraq is a good example of how the official story for the reason for going there has shifted over the months and years. Now, many suspect that the real reason was the oil and that the Administration bungled the invasion. How plausible. The President and VP both ex-oilmen, secretive energy strategy meetings with leaked maps of Iraq from before 9/11, and now the Administration is getting desperate in the face of popular and Congressional opposition so needs to go for the fait accompli of Iran ; of course that's the real reason. Well, I, for one, won't be surprised if there aren't at least another couple of layers to this onion. And there's multinational banking ready to profit from it.

GoldiloxBitter medicine: Pfizer will cut 10,000 workers#1513581/23/07; 07:54:36,0,4391766.story?coll=chi-business-hed


NEW YORK -- Pfizer Inc. announced Monday that it will cut 10,000 jobs, or 10 percent of its global workforce, as the world's largest drugmaker seeks to slash its annual costs by as much as $2 billion by 2008 amid fierce competition from generic drugs.

The company said it will close three research sites in Michigan and two manufacturing plants in New York and Nebraska. It also might sell another manufacturing site in Germany and close research sites in Japan and France.

The sites in Michigan employ about 2,400 people. The Ann Arbor facility has about 2,100 employees, while there are approximately 250 workers in downtown Kalamazoo and 60 in western Wayne County's Plymouth Township. Pfizer said many of the Michigan workers will be offered jobs elsewhere in the company.

It's the second time in two years that Pfizer has announced a major cost-reduction plan to combat the loss of about $14 billion in revenue this year because of expiring patents on key drugs. The company is at risk of losing 41 percent of its sales to generic competition between 2010 and 2012, according to one analyst.

The latest layoffs include the elimination of 2,200 jobs from the U.S. sales force, which Pfizer announced late last year. The company said Monday that it will cut 20 percent of its European sales force.

Analysts are skeptical that Pfizer's crop of current and pipeline products can generate enough sales to compensate for the lost revenue. Pressure on Pfizer has intensified since safety issues forced it to halt development of the star drug in its pipeline, which was slated to replace Pfizer's best-selling product, cholesterol drug Lipitor, as it loses patent protection as early as 2010.

"You can't cost-cut your way to prosperity," said Les Funtleyder, an analyst at Miller Tabak & Co.


To paraphrase Everett Dirksen, "Ten thousand here and ten thousand there, and pretty soon you're talking 'real people'".

Goldendomeimparting knowledge#1513591/23/07; 08:46:24

Frosty's sister is catching on. Perhaps do to some subtle information that Frosty has imparted over the years; she has absorbed and ruminated on?
GoldiloxHoliday High Breached#1513601/23/07; 08:49:00

Jan 2 high of $644.78 breached. Can we close above it?

Currently quoting $646.20

Chris PowellGartman Letter patronizes GATA#1513611/23/07; 08:58:50

At least the name is spelled right.
GoldendomeGold rally?#1513621/23/07; 09:03:15

Goldi: We've had a number of significant up days in the past week or so. In your opinion, is there something going on that's different than before? Or, is this just the routine flow and ebb (base building?) that we've seen over recent months.
GoldiloxBase building#1513631/23/07; 09:13:48


I'm sure I know nothing more than anyone else here, but it has been encouraging to see PoG creep upward while other markets seem to be a bit queasy.

I think breaking through $650, as Sinclair opines, will likely be quite significant. The last reach to $650 brought us the $40 Jan correction.

Another DOW day like yesterday could be the admission ticket.

It will be interesting see if the "State of the Onion" leads us anywhere significant.

Sierra MadreComment on price of gold, today...#1513641/23/07; 09:27:43

This sudden interest in gold today, taking it to a bit over $645, might respond to some worries about impending war with Iran.

The PTB know quite well that they cannot hold gold down permanently. They are fighting a rear-guard battle of retreat. They know the price of gold will go up, up, up.

What they - perhaps - can maintain for a considerable period of time, is a running battle to "not let this gold thing get out of hand". The PTB are planning a slow and boring rise of gold, so that only a few notice what is going on. That's what has been happening, and I expect it to continue.

When the nukes start popping, that's a new situation.


GoldiloxWizards of Money#1513651/23/07; 09:35:54

@ Clink,

It was while perusing WoM that I found Smitty's reference to MLK's Atlanta HUD speech. It seems he was about ten years ahead of Catherine Austin Fitts in revealing HUD fraud techniques, coincidentally (or not) right before he was silenced.

While I thoroughly enjoyed the "Money Masters" vid, WoM cannot be beat for the pure depth of her research and reference material.

It's not surprising that she has gone back underground and the material has been "moved" and "sanitized" a few times since publication, as it paints a rather odiferous picture of our "esteemed" leaders.

If you're lucky enough to have the originals, you'll see what I mean.

GoldendomeOnly the Wizards can know.#1513661/23/07; 09:39:24

Goldi: Agreed, we little sand fleas of the gold market, can't really be "in the know." All we can know is what's going on and is continuing every day. But it's fun to speculate sometimes. Perhaps some big holders of dollars are converting some those dollars to physical gold, maybe. Or, maybe, the golden lemmings are just all-running uphill toward the cliff again. Time will tell.

One thing that is perplexing to me (and I believe you have also spoken of it) is how the crude oil price can fall so precipitously, at a time when military buildups, political unrest, and risk in the Middle East seem so great. The risk to oil production and flow (we can include Latin America also, as MK might add) is such that any perceived over-supply would appear ephemeral and perhaps abruptly temporary.

It appears to me that moving the often-mentioned naval battle groups to that area is in preparation for something. Not that we are going to start anything; just being prepared in case someone else starts something.

GoldiloxMisdirection#1513671/23/07; 10:15:23

@ Goldendome,

There are those, McCanney included, who suggest "peak oil" is a misdirection ploy, not unlike "greenhouse gasses" that lead the media far from reality, and grant the oil cartels massive manipulation powers over price and perception. Anyone who follows space science should remember that Sagan's "greenhouse gas" theories about Venus were pretty much debunked by the Venusian probes of the '80s, yet the pols and media are still touting them as "fact". Thus are the dangers of granting a theorist "Hollywood" celebrity.

Not sure how accurate the oil theories might be, but the chaplain of the North Slope project published his observation that 4/5's of the Alaska oil was capped for "future access", and stories abound about Montana and Wyoming discoveries undergoing the same "executive" cease and desist orders.

If true, my take on this is that the US has substantially under-reported oil reserves, and has been trying to pump the Mid-East dry before "miraculously" rediscovering them.

Chavez and Putin have certainly thrown monkey-wrenches into the price control fray, which may have a lot to do with current uneasiness in the oil patch.

The really crazy thing is all the "open mouth- closed wallet" attitudes toward alt energy and forward-looking scientific effort. An effort worthy of the "Inquisition" seems bent on suppression of progress, as it threatens the monopolies that pull the current strings of TPTB and their Pinocchio leadership.

Check the URL for a list of some very important discoveries that NO ONE else has ever "tested", but mobs of "scientists" have decried without the first laboratory investigation - sounds like DOGMA protection to me. If there is even the slightest repeatable laboratory results, these inventions should be heralded as ground breaking, rather than heresy.

MKGoldilox#1513681/23/07; 10:36:57

In the theory you forward, the production would remain relatively static while the volume of money increases. There are a great many, including myself, who believe our attachment to the MidEast has more to do with clean, cheap oil because the extraction and delivery system is largely paid for, than it is the only place to find it. I haven't really studied the peak oil concept, but if it means simply that production has peaked, then I don't buy it. Along the same fault line, I wouldn't say that the production of currency has peaked either. One thing that would cap the production of oil though would be de jure restrictions on its use and alternatives to oil/gas/gasoline, such as what Arnold S. is advocating in California.

Gideon Rachman claimed on FT's opinion page today that the battle was already over on global warming -- that whether or not it is fact or fiction no longer matters because the political system is already acting as if it were the reality. (It's a major subject at Davos this year [along with "international trade," [read currency problems]. The article was aimed at Thatcher/Reagan conservatives who I gathered he didn't have much use for. He did mention however that since the political left ["earnest men in cardigan sweaters and fierce women in sensible shoes," he calls them <smile>]) was wrong on just about everything else it has pushed over the past 25 years, why would anyone believe it was right on global warming?

At any rate interesting observations from Rachman on both scores. . . .

Gold shines brilliantly in this analysis as no one really wants to control the volume of currency only the use of oil/gas/gasoline.

Flatliner@Frosty 1's 20 year market#1513691/23/07; 10:38:54

"I did not know what to tell her..." but her questioning has led her to the right place – you. Investment advice is not something you can count on someone else for, but simple logic will most likely influence your stepsister more than anything.

I, too, asked myself similar questions not too many years ago. One of the most absurd conclusions that I came to was that YES, the Dollars that I invest today will most likely be there for me come retirement time (more or less) but the purchasing power of those dollars will have a higher probability of being worthless when compared to the nominal gain (I came to this conclusion assuming no major disruption event). The simple of it is to look at the historical decline of the purchasing power of the dollar and compare it to the historical costs of a rising stock market. When she considers the rise in the market, he must deduct the costs. Do not forget taxes, maintenance fees AND dependencies on others. The first two are easy to calculate, but what do you do if your account is with some second-rate bank and you get locked out? Risk is not easy to calculate, but should be considered. Ultimately, my conclusions lead me to believe that if I could find an Intel, Microsoft, Dell, AOL, or Google, the payoff would clearly outpace the depreciation and lead to capital accumulation. But, if I left my money to managers, ultimately, I would lose purchasing power. And, as we all know, it's not easy to pick one of the few successful stocks.

There are some good books available that talk about human demographics and how they affect the stock market. I would highly recommend you pick up a copy and lending it to your stepsister. Also, a little more research into pending obligations with regards to all social programs that are in the works will build a stronger argument for a ‘quickening’ rate of devaluation of the dollar in the coming years. A little research on hyperinflation will also broaden the foundation.

Most importantly – the derivative markets transfer so much wealth from hard working people to ‘advisers’ that she will most likely have a hard time finding honest advice in a world with so much conflict of interest. If I could give advice, it would be a close echo of a motto that I hear in this forum over and over again - get out of debt and acquire hard assets. If the hard assets are useful, they will improve the quality of your life on a daily basis. At the same time, debt makes your subject to ‘the business cycle’ which always catches people off guard or unprepared thus instigating hardship rather than freedom.

Gold plays a unique role with regards to savings. It is portable, unencumbered property. In hand, it is free of all other claims. One can lose their house (to say fire), car (accident), town (downturn in the economy) but with a few hundred gold coins, one can walk to a new location and reapply their capital. It's hard to carry, other, more bulky items. And, when you look at the trend in gold as an investor, it's once again going up on all major currencies.

Ultimately, tell your stepsister that she is welcome to view the world from a new perspective; through the use of this forum. As a lurker or participant, one can pick up many tips that may help her make decisions that she's comfortable with.

Flatliner@RodZone#1513701/23/07; 10:48:40

I, too, will extend a welcome.

Being half pessimistic and half optimistic, I am curious with regards to why someone would have someone else hold their gold? It will be interesting to know if your confidence changes over time. Please keep us informed if you change your mind with regards allowing someone else to hold your physical.

GoldiloxTheories#1513711/23/07; 10:57:42

@ MK,

That's why they're called "theories". Any attempt tp simplify the complex oil patch is likely to miss some very critical factors - be they political, logistical, or supply/demand.

In my 50+ years of study, I have always found that "more will be revealed later", as Bill Wilson used to quip, and I suspect we only get to see the surface motivations, if any at all. The greater underlying motivations are considered either "proprietary information" or "national sceurity secrets" more often than not.

Thus I find myself much better equipped for asking the questions than answering them, but that's a good start in a political atmosphere where allegiances often seem to trump the importance of the original question.

Again, I'll quote Bill, "principles before personalities" is a good way to frame an investigation.

This certainly plays itself out in the Gold and Currency markets, as the Jan 3 "correction" seemed to have no underlying motivation other than "someone" powerful enough to drive a market wanted Gold prices back at the $600 level.

Goldendome(No Subject)#1513721/23/07; 10:59:12

Some would argue that oil is Too cheap now. Lessening it's cost in a Too easily created currency, helps the situation none.
Flatliner@goldendome#1513731/23/07; 11:10:47

You asked, "how the crude oil price can fall so precipitously"? Maybe those that are selling the resource are trying to do so as fast as they can. Maybe, they fear that they will be locked in and not be able to export. Or, maybe they might think that if they liquidate the markets, the fight for control may not escalate. Or maybe the central banks are successful as they stated last November as to lowering the price of oil in the Open Public Markets. There are many reasons that are political that counter a standard supply and demand argument.

Maybe, the people that visit Wall Street know that there is so much oil in the world that it's just overpriced in dollars. We see weird behavior like this in many markets including the gold market. To me, the gas in the car is worth more, through function, than all the contracts I could hold on oil that might be delivered from the Middle East. I know it's simple thinking, but we live in complex times that seem to bring these things to light.

Goldendome(No Subject)#1513741/23/07; 11:19:45

Flatliner: Interesting idea. Hadn't thought of that. Shipping in front of a possible transport closure makes sense.
CoBra(too)Climate Change#1513751/23/07; 11:37:34

... And not necessarily "global" Warming may be a better way to express the ever faster evolving spikes in floods, storms and heat waves occurring in our latitudes in Europe. Some scientists feel that Europe is going into new ice age as the gulf stream is already diverted by 30% to Canada's East Coast ... Their Polar Bears are already feeling the change and are getting ready to become a rare species.

The reality is, my good friend MK, as we live on a pretty limited globe, now supporting 7 billion plus inhabitants - up from a billin a century ago - we run out of readyly available resources.

Peak Oil - That's a fact - and if you don't believe in King Hubbert - it may be time to re-read Matt Simmons, Ken Deffayes and some of their ilk to come to conclusions. At least it may be of intellectual value.

The Club of Rome after all those years of publishing their "End of Growth" had to say only - We've lost 35 years.

Personally, I guess that's a fact!

... And as some say gold holders will perish too - but only in the second row - I'll personally go to the last row and enjoy the show!

... Not really - though the show must on ... cb2

FlatlinerThe Stranglehold#1513761/23/07; 11:53:11

Figured today would be a good day to repost a review from month ago. The main idea here is that the author sets up an argument that oil may be a naturally occurring element that might be continually renewed. The argument challenges the modern media representation of the oil situation, thus it caught my attention and may catch yours.

Found at the link:

Flatliner (4/8/06; 14:47:20MT - msg#: 143094)
Book review as not seen on Amazon
Below, I've quoted a couple paragraphs from Black Gold Stranglehold. I found ideas presented in this work interesting and somewhat similar to works store[d] on this website. I have no association with the authors and found [that it] is worth the few bucks.

Page 40: "... Astronomers continue to confirm Gold's observations that hydrocarbons are amply available in space. In 1986 scientists had a rare chance to study the makeup of comets when Haley's Comet passed. Several probes flew close enough to obtain scientific readings on the chemical composition of the comet's core. What they found was that about 80 percent of the comet's nucleus was ice; some 15 percent of the remainder was frozen carbon monoxide; the remainder was frozen carbon dioxide, methane, and ammonia.

Methane is a hydrocarbon product. Were there dinosaurs in outer space? No credible scientist yet has come forward to suggest that the methane found in comets was produced as a result of decaying protoplasm. This is the light bulb that went off in astronomer Thomas Gold's mind."

GoldendomeOil only seems expensive because it is used in such volume.#1513771/23/07; 12:20:58

From a Jim Puplava interview with Matt Simmons:

..."every time I get into a discussion now about the future of oil I always get asked, "well, where will oil prices be?" And my response is, "I don't have any idea where they're going to be, other than the fact I think on a secular move, we are still at a very, very cheap level of oil prices." And that immediately gets a response, "Cheap?! Oil's at $60 a barrel!" And one of the things I've observed is that people don't really understand what a barrel is. They can kind of conceive what a barrel might look like. But when you put it in terms people can understand, I say "what $60 per barrel is, is 18 cents a pint."

And then I get a response, "How did you do that?!"

"Well, you divide 60 [dollars]by 42, to get a gallon [price]of oil, and you divide a gallon [price,$1.43) by 8 to get a pint of oil, and that just happens to be 18 cents a pint."

And then they say, " Oh, that's really cheap, isn't it?"

And obviously it's cheap. I don't know what's the next cheapest liquid we actually sell in any bulk is, that has any value. I suspect there are places around the United States where municipal water costs more than 18 cents a pint. And yet for some reason, we created a society that was built on a belief that oil prices in a normal range were some place in the $15-20 level. It turns out $15/barrel, which is the average price of oil – in 2004 dollars – it sold for, for the last 140 years, is less than 4 cents a pint. So we've basically used up the vast majority of the world's high flow rate, high quality sweet oil at prices that were effectively so cheap, you basically couldn't sustain an industry. And now we're left with lots of oil. But it's heavy, gunky, dirty, sour, contaminated with various things oil, it doesn't come out of the ground very fast, is very energy intensive to get out of the ground and we're going to pay a fortune for it."

GoldiloxFlybys vs. impact#1513781/23/07; 12:29:00

@ Flatliner,

While the 1986 Haley flyby may have "confirmed" its ice makeup, the Deep Impact mission last July measured less than 0.01 % water in comet Temple1.

Either some things about how they measure cometary makeup have "changed", or the makeup of comets varies much more considerably than originally suspected.

McCanney, suggesting a Velikovskian scenario, believes that the rain of fire and brimstone reported by the ancients was a tail-capture of just such non-terrestrial hydrocarbons as you mention during cometary NEO encounters. His cometary theory proposes that comet tails are not "off-gas" from the nucleus at all, but trailing space debris that is gathered by electrical attraction, an interesting corollary to his non-mainstream "electrical universe" theory published in 1980.

Are we due for a hydrocarbon rain from an NEO flyby of P1 McNaught or one its potential companions? Is that why there has been a rush to build telescopes in the southern hemisphere over the last decade?

It certainly questions the "rotting dinosaurs" theory of HC origin.

White HillsMan in the arena#1513791/23/07; 12:36:25

"It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better.The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcomings, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause: who, at the best, knows, in the end, the triumph of high achievement, and who at the worst, if he falls, at least he falls while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory or defeat." Theodore Roosevelt.
Goldilox, how do you measure up to this standard? How many of us measure up to this standard? I think President Bush does, you may not.

Tejbear, To answer you questions "how do you argue with logic like that? I would reply , how do you argue with Faith like that?
You ask "as a species, is there any hope "I would reply, maybe not for bears, but for humanity, Yes! White Hills

GoldendomeRUETERS NEWSFLASH:#1513801/23/07; 13:03:17

U.S. Treasury Secretary, Pat Paulson, has stated that President Bush will announce a 50% devaluation of the U.S. dollar in his annual State of the Union Address tonight. This pre-announcement has caused gold bullion markets to move higher in after hours trading, reminding some of the heady days of early 2006.
Flatliner@Flybys vs. impact#1513811/23/07; 13:17:43

Goldilox, Don't know if I'd take "a rush [by humans] to build telescopes" as a precursor to some "hydrocarbon rain". I don't see the correlation unless there is some metaphysical connection that I don't understand yet. But, I would agree that the possibility exists. On the other hand, I would buy a correlation between people running out to buy gold as being a precursor to some type of currency collapse. This correlation seems a little more probable and observable.

All bet that all types and combinations of matter are floating about in the vastness of space. The periodic table hints that we should find just about everything. Also, matter, interacting with energy (in all it's different forms) tends to form more complex arrangements of this matter. When I look at the tail of a comet, it hints to me that time may ‘burn off’ lighter compounds reducing a comet to something less then water and gas.

Humans have a lot to learn. Hopefully, enough of us will live long enough to maintain a society that offers time for intellectual pursuits. One of the reasons why I hold gold is to offer that possibility to my offspring. I see no better realistic path at this point.

Flatliner@Goldendome#1513821/23/07; 13:20:24

Don't see the link.
arbyhThe Warrior Teddy speaks of#1513831/23/07; 13:25:09

@ Whitehills

Hey good man, beg to differ.

GW was a glee club cheerleader, and he still is.
He didn't play football. He flew the planes that were not going anywhere. He dances the puppets dance.
The soft spoiled rich run their mouths as gutless wonders and send average Americans into battle to see the elephant and pay the price of admission to the show.

The Warrior Teddy speaks of....GW couldn't hold his jock. But I could share a beer with him and have a little to talk about.

Ned@ Goldendome#1513841/23/07; 13:48:51

mikalRussian gold coins#1513851/23/07; 13:49:23

Russian ruble was world's hardest currency in late 19th century | Pravda | January 17, 2007 -- Snippit:
"The gold ruble was introduced in Russia by decree of Russian Emperor Nicholas II on January 15, 1897. Russia's new gold coins – the imperial (worth 15 rubles from 1897 to 1917) and the half-imperial became freely convertible to any foreign currencies. It is noteworthy that that such a radical economic reform did not bring about any significant social disturbances. In fact, the reform put the Russian ruble on a Top Five list of the world's hardest currencies."

Flatliner@Ned#1513861/23/07; 14:00:35

Lol. Sometimes, a rumor takes years to debunk. In this case, we only have a few hours to wait.

In any case, it's just Fiat and that currency will only last as long as people are willing to take it. I have found that people question gold, but once you lay it in their hand the feeling is unmistakable and they will take it no questions asked.

QCentral Bank gold loans accounting change#1513871/23/07; 14:12:50

THE gold news for the year .... imho.

"The IMF has essentially stated that they believe the market should receive correct accounting on loan information. The final test will be the implementation of the new accounting rules," Ryan said at the time.

On Monday, New Orleans-based Blanchard announced that newly adopted IMF accounting changes mean that central banks will no longer include the amount of gold they have loaned and sold into the market as part of their reserve total assets," according to Blanchard Chairman and CEO Donald W. Doyle, Jr.

Ryan declared that the IMF action "changes the entire landscape of the gold market for the betterment of all participants involved, because there is now data available that has never previously been published. A transparent market is a healthy market, and the gold market just got a lot healthier." He added that it will take the IMF some time to institute the new accounting procedures.

tejbearWhite Hills #: 151379#1513881/23/07; 14:14:28

You stated: "I would reply, how do you argue with Faith like that?" "I would reply, maybe not for bears, but for humanity, Yes!"

Sorry, but I not much for faith based wars. History is over flowing with the righteous fighting the "other" righteous; meanwhile, innocent women and children continue to die. (How many innocent women and children have died in Iraq; one hundred or two hundred thousand dead so far?) Sadly, whose side "you" support is dependent on the cultural indoctrination you received as a child. If you were born and raised in a Moslem family, it is highly unlikely you would support the actions Israel or the US in Iraq. On the other hand, if you were born and raised in a Jewish family, it is quite likely you would support Israel's and the US's actions.

The point being faith based wars are wrong. Yet, now we are walking on the slippery slope that could take the world into WWIII. Where is the humanity in that?

mikalTbill - footloose and fancy-free#1513891/23/07; 14:18:02$IRX

As long as this condition persists, you may move(or carpool) along as there's nothing else to see :
GOLD FINGERI want to know.....#1513901/23/07; 15:37:06

what's your gut feeling with the gold rise?

War with Iran?

Lower oil prices?

Dollar collapse?

Just pure demand?

Someone knows something and they are not telling!!!

I want to KNOW~

Gold did surge when some would be betting it to be heading down......


GoldiloxMeasure UP?#1513911/23/07; 16:13:22

@ White Hills,

Of course, we need to look a little deeper at what Teddy was fighting for, as well - Was it "liberation from Spain" or the right of the Buckleys and United Fruit Co. to kick the Cubans off their land and work it with displaced labor from Haiti and the Dominican Republic.

And it's been pretty well documented that President Bush was AWOL when it was his turn in the fray, very likely coordinating the running of drugs and arms between the US and South American dictators (like his buddy, Noriega) with the Barry Seal and Mena AR gang. No dodging bullets in Nam like the rest of us peasants for him or Cheney!

It's really easy to author some ideological reason for genocide, especially whenthe closest you've ever come to "action" is a plush office in Neuva York or AC-DC. It's little tougher when you're the one manning the flame throwers that burn a peasant village and all its inhabitants for daring to oppose those who invade their homes, steal their resources, and poison their crops.

I really feel sorry for the guys in Iraq, who under the political guise of "liberating the Iraqis" (from themselves, as in Viet-Nam), are pretty much forced into commiting horrible attrocities that they not only have on their conscience for the rest of their lives, but may also face military tribunal for back home, since their "esteemed" leaders avow no knowledge of such tactical necessities. Take an afternoon away from your fortress of solitude and go visit the nearest VA alcohol and drug rehab program to see the effects first-hand. Visitors are welcome at AA "H&I" meetings (Hospitals and Institutions).

You can say "It's not like that" from your irory tower in the hills, but I am of the generation who returned from Nam, where IT WAS LIKE THAT, and I spend a lot of time riding motorcycles with returning Iraq vets young enough to be my grandsons who tell me to a man that it STILL IS. I live in a Marine Corps town, and I hang with them at every cafe, bike rally, and public event.

War really sucks for the common man, but his ideological bosses all seem to get filthy rich off his blood, and move on to plan their next war and sell the next generation of weapons at outrageous prices.

John Kerry's heroism may well have been exaggerated, but at least he didn't run and hide from the responsibility altogether like Clinton, Bush, and Cheney!

Becoming a patriot after evading your turn to serve is just plain BOGUS!

Sorry for the rant, but this is one subject that gets my dander up.

mikal@Goldfinger#1513921/23/07; 16:32:19

"Re: "I want to know....."
Yes, you do. Just ask:

"what's your gut feeling with the gold rise?"

I have a gut feeling with all
paper prices that they are sickeningly, tragicly ephemeral.

"War with Iran?

Lower oil prices?

Dollar collapse?

Just pure demand?

Someone knows something and they are not telling!!!

I want to KNOW~"
Yes of course. We all do.

"Gold did surge when some would be betting it to be heading down......"
Gold prices still hardly move compared to what's possible, especially what is intrinsic and what is really inevitable.
A new ball game some would say,
but you can still get in the gate, have a seat
and catch the best action without feeling left out.

As for a "right" short-term guess, "some would be betting", it's like a technical-based trade or horse race or card game inside the system of a rigged proprietary 'market'
that works with either inside information or skill.
This aspect of "betting" could best be used sparingly
and for long-term understanding and advantage. Thanks.

Chris PowellThe world financial system has cancer.#1513931/23/07; 16:33:43

A reply to Dennis Gartman's latest sneer.
melda laure"Gold is Dead"#1513941/23/07; 16:55:09

The oil market is no more free than the gold market, Sir goldendome, so perhaps the pressure is off (for the present, at the margin).

Peak oil will come- eventually. Peak gold has passed already (unless some new physics is developed).
The warming will happen, whatever men do, because it is NOT anthrogenic but rather in the cycle of things.

Thus it is only a matter of management, that is to say, a matter of political misdirection.

Of course it is useless to read scientific studies of any kind. One must eventually use their own judgement. How many of us have read studies claiming that gold is dead, that inflation no longer drives the price of gold and any of an number of other idiocies? It is no different in any other area of study- the details are in the fine print, or in the list of sponsors, or in the records of the researchers, or buried somewhere.

The photon has rest mass, there ARE magnetic monopoles, magnetic displacement current exists. There are "heresies" in many places. And as anyone can point out, the present theories are "good enough" as long as you dont count the future and "squint" at the results and are willfully ignorant of the new reality unfolding.

This is not a jury trial where both sides must tell the truth. In fact all sides are probably lying (call it spin) in some fashion or other. Time alone will tell who was right, by which time you will all be dead and too late for courts martial. Gold is dead for a hundred reasons that are immaterial to the investor, but of prime importance to the manipulator. Bearing the truth is an enormous burden where no amount of facts can dispel the observation that the crowd belives otherwise.

mikal(No Subject)#1513951/23/07; 16:58:13

U.S. economic strength feared on shaky gr