USAGOLD Gold Discussion Forum Archive

Electronic reproduction sourced from
mikal(No Subject)#1546375/1/07; 00:14:07

U.S. Targets China, Russia, 10 Others for Piracy
Associated Press | Seattle Times Newspaper | 04-30-07
Very brief summary of US action taken Monday- shows how our friends need to take care lest they meet with reprisals or reciprocal looting of advanced and developing assets.
A withdrawal of troops with closing of bases would be more cost effective and sustainable than a free-for-all brawl of protectionism and pirate sorties.

PalOn Lifestyle Change...#1546385/1/07; 00:14:21

Sir Slingshot,
While I can't say that my lifestyle has changed drastically because of inflation I have chosen to make adjustments where necessary. Of course getting out of debt was the first major item to check off the list, then next item was what to do with savings. Instead of piling savings into the stock market I decided to invest in 'tangibles.' I've learned so much here the last couple of years that I've developed a bit of distrust over things I don't personally control. I look around everyday and it is a rare thing to find someone who really cares about seeing things done right(even if they're paid to). So, I purchased Pre-33's from our host(always a great experience). Then I rolled over my wife's Roth IRA into a precious metals IRA with the assistance of George Cooper. The more I learned about our banking system the more concerned I've become about the possibility of a 'bank holiday' lasting for a few days or weeks. So, we pulled some cash out of the bank to hold for a rainy day and I called George looking for a little bit of 'barter money'-a little bit of bullion silver and gold to use if things go badly. Of course a bit of extra food to get through shortages was on the list as well. One way our everyday lives changed is that we don't make nearly as many trips to the grocery store anymore. My wife remarked to me recently how nice it was to find new recipes and check to see if she has the necessary ingredients and we almost always do. Couple that with milk and egg home delivery from a local source because fresh items will most likely be the first to run out. We were the only ones with milk on my block during the snowstorm that hit Denver last December. The just-in-time system broke down and the eight milk cabinets at the local Wal-Mart sat empty for a week afterwards, but my milkman still made his delivery on my unplowed street. At first it might seem strange to have a pantry and freezer full of food but once you get used to it I can't imagine it any other way. We save time, money, and stress. Also, instead of buying toys for the kids from the store my wife finds great deals on craigslist and garage sales. It amazes me the items she finds that are in literally new condition and never used and she pays peanuts for it. That is an eye opener about our society to me. The sheer volume of people that attach no value to items once they leave a retail store is shocking. Not only that but my wife refuses to pay the asking price on anything and she always offers a lower price... and she gets it. Sometimes, people tell her to just take it. It makes you wonder why they ever bought it in the first place. You gotta love the unstoppable US consumer. We consume for the sake of consuming.
I also have a deeper appreciation now for history and those who came before me. I hold a gold sovereign in my hand from the late 1800's and I can't help but think of the history of that coin and where it traveled to and whose hands it passed through before eventually making it to me. It has a lifetime many times my own and will continue to exist far past mine own. I think of the long list of survivors that came before me that I owe my gratitude towards. I am here because they made the necessary decisions that allowed them to survive. The least I can do to repay them is to use my capacities as a rational human being to attempt to survive as well.
Now some are of the opinion that when things fall apart there is no point in preparing because everything will turn to chaos and the world will pretty much cave in on itself. I don't buy it. I've spent a bit of time going back through history and the constant I've found that pertains to the subject at hand is this... economy happens. Sure, things get crazy from time to time but people are always buying and selling. I like to think of it as 'transition periods' where we go from one system to another. My goal is to survive and stay solvent through the transition. I'm preparing at a general level but there is no way I can plan for all contingencies so I buy gold because it gives me 'options.'


Sierra MadrePal: about your post...#1546395/1/07; 01:23:07

Excellent! Good for you!


ToolieVenezuela Pulling Out of IMF, World Bank#1546405/1/07; 06:25:31

Snip: "We will no longer have to go to Washington nor to the IMF nor to the World Bank, not to anyone," said the leftist leader, who has long railed against the Washington-based lending institutions.
Chavez said he wanted to formalize Venezuela's exit from the two bodies "tonight and ask them to return what they owe us." (end snip)

My quick search yielded no results on the amount of gold held by the IMF on behalf of Venezuela.

MineroLifestyle Change#1546415/1/07; 07:29:59

I have definatly made some likestyle changes similar to thoose of Sir Pal. We can easily eat well for more than a year on the food in the attick. I purchased a hand pump a necesary piping to put an old hand dug water well back in action that we were fortunat enough to have on the property. I purchased all four of the kerosine lamps that our local Wall Mart had in stock. I found extra wicks on Ebay. I am now driving a Diesel Rabbit that I spent about a year working over in my spare moments. That old 1970's
technology yields 50 MPG at 55 MPH, or 43 MPG at 70 MPH. Those old vehicles are so simple and easy to work. I think I am done with new high tech vehicles. I realize that not everyone can do that; however, my sister tells me that her new VW Beatle Diesel gives the same milage.

GoldiloxPulling out of IMF/WB#1546425/1/07; 10:19:54

@ Toolie,

This has been a goal of every third-world and resource-rich nation that could dream of it, since the Argentina collapse in '98.

The IMF not only strangles them with unrepayable loans, whose proceeds go mostly to western contractors anyway, but links "private" ownership of their resources to the loan repayment. On top of that, they smash their currencies in the FOREX, to guarantee the inability to repay.

This is even more damaging than the forward hedges for gold miners, and resource countries are getting wise to the tactics of these "economic hitmen".

When you consider that the main architect of the Iraq boondoggle sits in the top chair at the WB, I sure I would not want him as my banker/loan shark, either. Breaking a few knee caps for late payments is tame, by comparison.

Federal_ReservesDon't like gold right now#1546435/1/07; 11:16:02

Acting to much in concert with the stock market which is propped up by the credit bubble and ready to flush. I would wait for the stock market to flush out before adding to gold positions.
ThoreaulyDon't like gold right now#1546445/1/07; 11:39:40

@ Federal_Reserves,

Upon reading Christopher Laird's piece this morning over at Financial Sence University -- "Stock Crashes to Lead to Serious Recession" (see link) -- I emailed him to ask if he agreed that the recession would be hyper-inflationary, as the Fed would slash interest rates in a vain attempt to prevent the housing collapse from taking the entire economy down. And if so, then wouldn't precious metals break out of the commidity category as real money.

He responded as follows:

"Yes I think so, after the first [stock] market falls.

So to me, there's no time like to present to load up on shiny, as any declines in the near term will be lost in the noise of gold's upward thrust.

GoldendomeDollar pegging threatens Chinese economy#1546455/1/07; 12:05:10 0427b.html

Anyone who thinks that China is holding all of the cards better think again. The Cronies are simply selling them old maids (dollars) by the freighterload, and China's economy has now crossed into the extreme bubble danger zone. The recycling of USD back into their market is overheating the Chinese economy. Their stock market has risen 100% in the last 6 months and is on par to do it again! It has begun to go parabolic and the Chinese CB has lost control of the hot money speculators. Baby step rate hikes will have no effect. Paradoxically, the more the US slows, the more China could overheat until it goes dollar nuclear. All due to private equity inflows and China's ludicrous currency peg. The only way they can stop a melt-up is to drop the peg, and if they drop the peg, the US immediately goes into hyperinflation or at least very bad inflation and rates will skyrocket due to consumer goods pegging off the chart. Here's a good synopsis of what is currently happening in China.
GoldendomeLet's try the link again.#1546465/1/07; 12:18:10

Maybe, this one works.
mikal(No Subject)#1546475/1/07; 12:30:09

Investing in a fool's paradise
By Jephraim P Gundzik, Asia Times - May 1 - Snippits:

"The rapid slowing of America's economy has been shrugged off by stock markets worldwide, which continue to vault higher on the increasingly misplaced notion that corporate profits will grow perpetually.
In sharp contrast, currency markets have grasped the idea that the US economy is falling into recession, punishing the dollar...

Adjusting these statistics for the impact of incentives like free swimming pools, landscaping, custom kitchens and even new cars would show that actual new home prices fell sharply in 2006, an event unprecedented in the US since 1970. As the housing market collapse unfolded in 2006, it was joined by collapsing private investment...

While stock markets have come to view economic recession as benign, the same is not true for currency markets, which pushed the value of the dollar down against most currencies beginning in late 2006. Dollar weakness has accelerated in the first four months of 2007. The dollar has plummeted to 25-year lows against sterling and has reached record lows against the euro recently.
More broadly, the trade weighted value of the dollar is also falling off a cliff. The Federal Reserve's Trade Weighted Currency Index dropped to a record low last week, indicating that dollar weakness has become pervasive. Economic statistics showing the US economy weakened further in the first quarter of 2007 were the principal factor prompting renewed downward pressure on the dollar.

From silver to lead lining
Like equity investors, most economists refuse to believe that growing weakness in the economy portends economic recession later in 2007. As of early April, the consensus forecast for US economic growth in 2007 among leading economists was 2.3%-plus. At the same time, less than 25% of economists surveyed expected the economy to fall into recession. Such bewildering optimism has inspired the world's financial media and fueled stock market advances...

Commerce Department statistics on durable goods orders, which showed a rebound of 3.4% in March, impressed investors, prompting a stock market rally. Somehow these investors ignored the fact that this rebound was entirely driven by unusually large orders for aircraft. Unnoticed within these statistics was data showing that business capital spending orders went into freefall, contracting at an annualized rate of over 15% in the first quarter."

mikalBlack Swan- 'rogue' wave?#1546485/1/07; 13:22:20,,2068696,00.html

Markets will never spot the black swan
Dangers such as tension over Iran and a flagging US economy are being ignored
Larry Elliott, economics editor - The Guardian - 4-30-07
"These are curious times. In the middle of last week, the Dow Jones Industrial Average (DJIA) powered through the 13,000 level for the first time. At just about the same time, the dollar's value against a basket of global currencies was at its lowest since the demise of the Bretton Woods fixed exchange system.
In the UK, the Bank of England expressed concern about the increased risk-taking in the City and the exposure of heavily borrowed private equity groups, in the week that a titanic struggle began for control of the Dutch bank ABN Amro. The Royal Bank of Scotland, in cahoots with its Belgian and Spanish partners, is mounting a £49bn hostile bid for ABN to prevent it falling into the hands of Barclays. That's an awful lot of money to pay for any company, although not quite as much as AOL agreed to pay for Time Warner in January 2000.

In retrospect, the Time Warner/AOL hook-up was seen as the moment the boom of the late 1990s over-reached itself. It was, according to those with 20-20 hindsight, a moment of hubris. Anybody with a brain in their head could see that the only way for the stock market at the turn of the millennium was down. The intriguing question now is whether the battle for ABN marks a similar high watermark for the current boom. As the Bank noted in its Financial Stability review, the reward for taking on risk is currently at very low levels, for the simple reason that investors perceive little risk. "That has increased the vulnerability of the system as a whole to an abrupt change in conditions," the Bank said."

USAGOLD Daily Market ReportPage Update!#1546495/1/07; 15:40:03">
The Daily Gold Market Report has been updated.

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

May 1 (DowJones) -- June gold futures fell $6.20 to $677.30 on the Comex division of the New York Mercantile Exchange. Shortly after it closed, the June contract at the Chicago Board of Trade was down $5.90 to $677.50.

The moves may have been in part due to thin global trading conditions, with many countries observing holidays, reported Jim Steel, metals analyst with HSBC.

China has begun a week-long holiday, Japan is in the midst of the Golden Week holidays and many nations are closed for May Day.

"Also, we have seen a marked relaxation in crude prices, which is also playing an important role," said Steel. Furthermore, the euro sagged against the dollar, which tends to undermine gold.

A floor trader blamed the declines in both metals on a lack of buyers more-so than any other features. "There were very few sellers, but zero buyers," he said. "So (traders with) small orders were able to push the market, in both gold and silver, wherever they wanted. As soon that selling stopped, the market just miraculously turned around."

Many of the potential large speculators appear to be on the sidelines at the moment, the floor trader said. "I think if you get gold above $700, you'll see some real big buying come in," he said.

Steel commented that the gold market may need a "pronounced reason" to poke above the $700 level. "Until that happens, we're likely to drift," he said. "That drift will lend to some profit-taking."

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

MKThe latest USAGOLD NewsGroup. . . . . .#1546505/1/07; 15:50:18 Here are some riddles for you:

1. When is 13,000 not really 13000?

2. How do you keep a dragon happy who is hungry for two to three thousand tonnes of gold?

3. We all know helicopter Ben can print dollars, but can he print Chinese yuan?

4. What do you do with a nickel that costs a dime?


1. When it's the Dow at 13000.

2. You don't.

3. Yes. Red hot helicopters are in the air in China.

4. Hint: You don't buy a dime with it.

If you like riddles, you will like the latest USAGOLD NewsGroup. Fun and games for the investor who is wondering about the value of his or her savings and portfolio in these most puzzling of times.

We dig up the best golden nuggets; weigh each on a five star scale; and melt them down to size with some pertinent commentary of our own.

All for free. . . . . . All delivered to your e-mail box regularly!


Join the best informed gold owners in the world.
We invite you to join the USAGOLD NewsGroup at the link above.

TownCrierBernanke on trade, U.S. interest rates...#1546515/1/07; 17:41:02

Excerpts of Speech At the Montana Economic Development Summit 2007, Butte, Montana
(May 1, 2007)

Trade is as old as humanity, or nearly so. Archaeological sites demonstrate that ancient peoples traded objects such as rare stones and shells across fairly long distances even in prehistoric times. Over the centuries, with stops and starts, the volume of trade has expanded exponentially, driven in large part by advances in transportation and communication technologies. Steamships replaced sailing ships; railroads succeeded canal barges; the telegraph supplanted the Pony Express. Today, in a world of container ships, jumbo jets, and the Internet, goods and many services are delivered faster and more cheaply (in inflation-adjusted terms) than ever before.

...At the most basic level, trade is beneficial because it allows people to specialize in the goods and services they produce best and most efficiently. For example, we could conceivably all grow our own food and provide our own medical care. But because farming and medicine require special knowledge and skills, a far more efficient arrangement is for the farmer to specialize in growing food and for the doctor to specialize in treating patients. Through the specialization made possible by trade, the farmer can benefit from the doctor's medical knowledge and the doctor can enjoy lunch. The opportunity to trade allows everyone to play to his or her own strengths while benefiting from the productive skills of the whole community. Indeed, economists have demonstrated that trade between two people can be beneficial even if one of them is more skilled than the other at every task, so long as the more-skilled person specializes in those tasks at which he or she is relatively more productive.

What applies to individuals applies to nations as well.

...A telling confirmation of Ricardo's insight is that, when nations go to war, their first order of business is often to try to block the other's access to trade. In the American Civil War, the North won in large part because its blockade of Southern ports prevented the Confederacy from exporting its cotton. In the twentieth century, the fact that Great Britain and its allies were able to disrupt German trade more successfully than Germany could impede the flow of goods into and out of Great Britain bore importantly on the ultimate outcomes of both world wars.

Patterns of trade are determined by variations in a number of factors, including climate, the location of natural resources, and the skills and knowledge of the population. I suppose that one could grow roses commercially here in Montana for Valentine's Day, but it would likely require climate-controlled greenhouses complete with artificial lighting--very expensive. A much less costly solution is for Montanans to grow and sell wheat, then use the proceeds to buy roses from localities where the weather is balmy in February.

This is all standard textbook material, and it may well leave you unconvinced of the importance of international trade. After all, the United States is a big country, and we can certainly achieve many of the benefits of specialization by trading within our own borders. How important is it for the health of our economy to trade actively with other countries? As best we can measure, it is critically important....

Exports are important, but so are imports. Without trade, some goods would be extremely expensive or not available at all, such as the Valentine's Day roses of my earlier example or out-of-season fruits and vegetables. Trade also makes goods available in more brands and varieties; examples include automobiles, consumer electronics, garments and footwear, wines, and cheeses. One of the great attractions of globalization is that it brings to consumers the best of many cultures. And of course, global trade allows many types of goods, especially consumer goods, to be purchased at lower prices. Lower prices help all consumers but may be especially helpful to those with tight budgets. Indeed, a number of the large, import-intensive retail chains in the United States are focused on low- and moderate-income consumers, who benefit from being able to buy a wide variety of lower-priced goods.

Another substantial benefit of trade is the effect it tends to have on the productivity of domestic firms and on the quality of their output. By creating a global market, trade enhances competition, which weeds out the most inefficient firms and induces others to improve their products and to produce more efficiently....

Trade and finance are closely linked and mutually supporting, and in recent decades international financial flows have grown even more quickly than trade volumes. The globalization of finance plays to the strengths of U.S. financial institutions and financial markets. The United States has a large surplus in trade in financial services, and U.S. firms are leaders in providing banking, investment, and insurance services to the world....

If trade is so beneficial, why do we sometimes see political resistance to freer, more open trade?

As consumers, nearly all of us benefit from trade by gaining access to a broader range of goods and services. But some of us, such as workers in industries facing new competition from imports, are made at least temporarily worse off when trade expands. Because the benefits of trade are widely diffused and often indirect, those who lose from trade are often easier to identify than those who gain, a visibility that may influence public perceptions and the political process. That said, the job losses and worker displacement sometimes associated with expanded trade are a legitimate economic and social issue.

In the remainder of my remarks, I will focus on the impact of trade on U.S. jobs--both positive and negative--and discuss some possible policy responses....

Restricting trade by imposing tariffs, quotas, or other barriers is exactly the wrong thing to do. Such solutions might temporarily slow job loss in affected industries, but the benefits would be outweighed, typically many times over, by the costs, which would include higher prices for consumers and increased costs (and thus reduced competitiveness) for U.S. firms.

Indeed, studies of the effects of protectionist policies almost invariably find that the costs to the rest of society far exceed the benefits to the protected industry. In the long run, economic isolationism and retreat from international competition would inexorably lead to lower productivity for U.S. firms and lower living standards for U.S. consumers.

^___(see url for full text of prepared remarks)___^

In reporting on this speech, Reuters indicated that Bernanke also shared some of his cautionary thoughts on interest rates.


BUTTE, Montana (Reuters) - High savings overseas have held down U.S. interest rates, but the United States needs to raise its saving because that force will not last forever, Federal Reserve Chairman Ben Bernanke said on Tuesday.

"Around the world, there's a lot of extra saving being generated by countries which are cutting back their domestic consumption in order to focus on exports, and that saving is sloshing around the world ... looking for return," he said in response to questions after speaking to an economic development conference.

"One piece of evidence for that is that real interest rates, despite the fact that there are issues of budget deficits and so on...remain very, very low, and that's the force of the savings that's coming into the country, pushing down real interest rates. We won't always have that, and that's why it's important for us to work on increasing our own savings rate," he added.


In other words, in that final paragraph he is saying that foreigners have been buying bonds as a means to employ the excess dollars earned in the balance of trade for goods and services, and when that international support for our bond/debt market inevitably starts to fade, it will be up to us to pull ourselves up by our own bootstraps.

However, as you strive for meaningful savings, does it seem prudent to you accumulate that in the tenuous form of interest-bearing IOUs (i.e., bonds), or would you rather have it in a more substantial form of tangible, fully-owned wealth? Unlike bonds, real wealth such as gold metal is not vulnerable to counterparty default. Also, default is not the only thing that can ruin the value of your bonds -- depreciation of the currency can wreak havoc, too.

Think about it. Choose independent gold.


KiloWhat do you do with a nickel that costs a dime?#1546525/1/07; 18:03:01

You don't buy a dime with it ?

Sure you do. Then you trade it for two more nickels. At least as long as you can convince the dumb kid on the block that the nickel is worth more than the dime because it is "bigger".

MKOh kilo#1546545/1/07; 18:45:45

You are twice clever. . . .and with two nickels to rub together, now maybe you can convince someone to paint your fence. . . . . .(smile)
KiloOf fence paint and gold.........#1546555/1/07; 20:17:40

Sir MK,

Paint my fence indeed ! Or I could continue trading my nickels in and out of dimes for 30 days or so and then trade it all for King George V Sovereigns. Let's see, that would come, click, click, think, think, think..........

WOAH ! That's a bunch of gold !

(big grin)

Paper AvalancheTruth in investing law#1546565/1/07; 20:41:10

I was reading Schiff's article that MK included in the news group and thought that the following would be an intersting law to have passed:

Require all financial planners to have clients identify the top ten things that they intend to spend their savings on upon retirement (or whatever the client's timeframe is for using the saved funds). Then benchmark the cost of the said ten items at the outset of the client's saving program (401k, IRA, etc.). Then have the financial advisor be required to report to the client how the fund / account performed relative to the price increase of what is being saved for after taxes and management fees.

I wonder how many people (sheeple) would continue to plow the fruits of their labor into the paper ponzi scheme if this were to be a requirement. Had this been a requirement seven years ago, I think that the investing public may catch on to how they have been hosed despite the daily rah rah on CNBC that the DOW is now barely over 13,000.

Not that it is news to anyone on this forum, but I would think that flows into mutual funds would dry up in less than 24 months if this were a requirement.

Anyone have Ron Paul's number?

Food for thought. Start your own benchmark for what you are saving for to play at home.


riggsyU.S. interest rates. the effect...#1546575/1/07; 20:54:47

keeping interest rates artificially low, in fact, is eventually the same as that of keeping any other price below the natural market. it increases demand and reduces supply. it increases the demand for capital and reduces the supply of real capital. it creates economic distortions. no doubt, that an artificial reduction in the interest rate encourages increased borrowing. it tends, to encourage highly speculative ventures that cannot continue except under the artificial conditions that gave them birth. on the supply side, the artificial reduction of interest rates discourages normal thrift, savings and investment. it reduces the accumulation of capital.
riggsywhat a world...#1546585/2/07; 08:45:43
mikalIs it solid, liquid or... a gas?#1546595/2/07; 08:49:03

Mr. Pesek, I hope you're not in hot water now. If only you'd seen William Shakespeare's caution "Bubble, bubble, toil and trouble. Fire burn and cauldron bubble" before you wrote this:

Dick Cheney's Banker Grantham Sees World Bubble by William Pesek | Opinion | Bloomberg | May 2, 2007

mikalConspicuous consumption #1546605/2/07; 09:02:07 The Race for the Tallest Skyscraper by Brian Bremner
Business Week - 05-02-07

Clink!Not to belabor Mikal's point .....#1546615/2/07; 09:25:29

..but there was another race to the top in 1930 which was only surpassed 40 years later.

flow5NY Open market Desk sets each day is the one-day repo rate on Treasuries, that is, the one-day cost-of-carry on government bonds.#1546625/2/07; 10:07:08

Richard Fisher, November 2, 2006:
"In retrospect [because of faulty data] the real funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer than it should have been. In this case, poor data led to policy action that amplified speculative activity in housing and other markets. The point is that we need to continue to develop and work with better data"

mikalFlood of warnings cresting?#1546635/2/07; 12:12:45

UPDATE 1-Hedge fund risks worst since '98 crisis, Fed says
May 2, 2007 11:40am ET - Pedro Nicolaci da Costa
NEW YORK, May 2 (Reuters) - Snippits:
"Hedge funds may now pose the biggest risk of a crisis since 1998, when the implosion of Long-Term Capital Management threatened the global financial system, the New York Federal Reserve said on Wednesday.
The statement represented the bank's sternest warning to date over the possible fate of the $1.4 trillion industry.
"Recent high correlations among hedge fund returns could suggest concentrations of risk comparable to those preceding the hedge fund crisis of 1998," according to a paper written by Tobias Adrian, capital markets economist at the central bank...

Hedge funds borrow large sums of money in order to take aggressive bets on financial markets. Many operate heavily in the derivatives market, estimated at around $17 trillion, raising fears about possible future shocks."

Federal_ReservesGot to laugh about the Fed's Hedge Fund Warning#1546645/2/07; 12:39:35

Kinda like the guy that deliberately over seeded the clouds and when it started raining he immediately started issuing flood warnings....oh've been warned.
flow5Bubbles#1546655/2/07; 16:03:33

Interest rates were rising as stocks rose in 1999-2000. That presaged a top. In this rally interest rates, both long-term and short-term, are falling.
However, this country is simultaneously experiencing rampant speculation that is so excessive, that it has produced the "boom and bust" characteristics of all past speculative orgies.
We have 3 different bubbles to deflate: (1) the stock market, (2) the real estate market, and (3) the debt market.

Chris PowellBarrick joins Lihir in huge gold hedge buyback#1546665/2/07; 16:08:30

9:55p ET Tuesday, May 1, 2007

Dear Friend of GATA and Gold:

Between Barrick Gold's announcement today, appended here, and Lihir Gold's announcement two weeks ago (, the two companies have just taken almost US$1.1 billion in gold out of the market.

Maybe that explains the recent acceleration of central bank gold dishoarding (, since otherwise the gold price would explode and regular central bank money and bonds would start looking even more sickly.

In any case that Barrick would accept its first quarterly loss in five years so that it might spend more than half a billion dollars to cancel all the gold hedging done for its operating mines suggests that even the company that has proclaimed itself to be the agent of the central banks in the gold market ( is expecting gold to rise to uncomfortable levels.

Barrick's mines in development still support huge gold hedging positions, but the company says it plans to reduce hedging even more.

All this repurchased gold probably will continue to come out of the vaults of the Western central banks, likely underwritten by pledges of gold from the U.S. Treasury Department (aka "deep storage gold," gold yet to be mined), so the impact on the gold price may not be immediate. But until the secretary of the treasury goes to the corner of Broad and Wall streets in New York and declares that the United States can save its currency only by returning to something like the gold standard, Barrick's announcement today probably will be as close as you'll get to an engraved invitation to the last Great Bullion Sale.

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

* * *

Barrick Has First
Quarterly Loss
Since 2001 on Hedges

By Choy Leng Yeong
Bloomberg News Service
Tuesday, May 1, 2007

Barrick Gold Corp., the world's largest gold producer, reported its first quarterly loss in more than five years as the company incurred $557 million in costs to exit sales contracts at below-market prices.

The first-quarter net loss was $159 million, or 18 cents a share, compared with net income of $224 million, or 29 cents, a year earlier, Toronto-based Barrick said today in a statement. Excluding the cost to exit the contracts, profit was $398 million, or 45 a share, topping analysts' estimates.

Chief Executive Officer Gregory C. Wilkins, betting prices will keep rising, exited contracts to sell 2 million ounces of gold at fixed prices that were 41 percent below bullion on spot markets. Gold has more than doubled in the past five years, and rose 17 percent on average during the quarter.

"I wish they had done it earlier," said Frank Holmes, chief investment officer at San Antonio-based U.S. Global Investors Inc., which manages almost $5 billion including Barrick shares. "We like stocks that are unhedged. Operations outside the non-cash charge were better than what the street expected."

Excluding the hedges, the company was expected to earn about 39 cents, based on the mean estimate of nine analysts surveyed by Bloomberg. The last time the company reported a net loss was the fourth quarter of 2001.

Barrick said it sold gold at an average price of $386 an ounce in the quarter, 28 percent lower than a year ago, as it exited forward contracts at below-market prices. Lower prices led to an 8.3 percent drop in sales to $1.09 billion, even as production rose.

"It was cost containment that enabled them to deliver better-than-expected results," excluding the hedging costs, said Victor Flores, a New York-based analyst at HSBC Securities USA Inc. He has estimated profit excluding hedging costs of 40 cents a share and doesn't own any Barrick shares.

Shares of Barrick were unchanged at C$31.15 at 4:25 p.m. in Toronto Stock Exchange trading, giving the company a market value of C$26.9 billion ($24.2 billion). The shares have fallen 9.6 percent in the past year.

Barrick cut hedges by 9.4 million ounces in 2006, mainly those inherited from its $10 billion acquisition of Placer Dome Inc. The company exited more contracts than any other last year, accounting for 62 percent of the world's total, London-based researcher GFMS Ltd. estimates.

Barrick has said it will incur $65 million in costs this quarter by exiting another 500,000 ounces of contracts.

"Going forward, our operating mines are completely un- hedged, able to sell production at spot prices and thereby enjoy expanded margins in this strong gold-price environment," Wilkins said in the statement.

The company still has 9.5 million ounces of gold hedged in forward contracts to help finance its Pascua-Lama mine project on the border of Chile and Argentina and the Pueblo Viejo mine development in the Dominican Republic. Barrick sought to build the $1.5 billion Pascua-Lama project in December 2004 after gold prices rallied.

Gold futures in New York averaged $652.79 during the quarter, up 17 percent from $557.40 a year earlier. Prices reached a 26-year high of $732 on May 12, 2006.

Most producers increased forward sales when gold touched a 20-year low in 1999 to hedge against further declines in prices. Mining companies have been unwinding those contracts during a rally in gold that is entering its seventh year.

Cia. de Minas Buenaventura SA, the world's seventh-biggest gold miner, posted a 71 percent drop in first-quarter earnings partly on costs related to cutting its gold hedges by a quarter.

The Lima-based company said on April 27 it plans to reduce its hedge book further to take advantage of surging gold prices.

Output in the fourth quarter rose to 3.7 percent to 2.03 million ounces as Barrick added mines in Nevada, Australia and Tanzania from its Placer acquisition and built new mines. The cash cost to produce an ounce of gold rose to $313 from $285.

Barrick kept its February cost forecast unchanged at $335 to $350 an ounce, up from $282 in 2006. The company in November forecast an increase of 15 percent to 18 percent because of lower-grade ores and inflation. The company also kept its production forecast at 8.1 million to 8.4 million ounces, down from 8.6 million ounces in 2006.

Newmont Mining Corp., the world's second-biggest gold producer, posted a 67 percent plunge in first-quarter profit to $68 million as output slumped and mining costs rose. The company on April 26 raised its forecast for the costs of mining and selling gold this year by 32 percent to $400 an ounce, up from its September forecast of an increase of 25 percent.

Newmont said the cost of mining and selling gold jumped 53 percent to $421 an ounce as a weaker dollar boosted spending in Australia and the company struggled to bring new mines in Nevada into full production.

Chris PowellEuropean junk bond supply grows dramatically#1546675/2/07; 18:24:02

By David Oakley and Saskia Scholtes
Financial Times, London
Wednesday, May 2, 2007

The European junk bond market grew dramatically in the first quarter of this year in a powerful sign that the world economy is in robust health.

Only two months after stock markets fell sharply round the globe, the big jump in high-yield bonds suggests the economy rode the storm, according to the European High Yield Association.

It said new issuance in the first quarter of this year jumped 78.9 percent, compared with the same period last year, on the back of mergers and acquisitions, private equity-led leveraged buyouts, and strong econ­omic fundamentals.

Gilbey Strub, executive director of the EHYA, said: "The European macro-economic environment continues to be favourable due to very low interest rates while issuance levels are being driven by mergers and acquisitions and leveraged buyout transactions."

New issuance in the European junk-grade market in the first quarter stood at E12.7 billion ($17.28 billion) compared with E7.1 billion in the same period last year, the EHYA said. This suggests that fears the market had peaked after the selloff at the end of February, as investors switched out of relatively risky asset classes such as high-yield bonds to safer havens of government debt and high-grade investment paper, were unfounded.

A number of high-yield bond issues were delayed or scrapped in Europe at the time because of the volatility although the US high-yield debt markets proved more resilient.

Diane Vazza, head of global fixed income research at Standard & Poor's, said: "If February brought on a sneeze, March did not result in a cold. The US high-yield bond market steadied its balance after an ungainly month."

Having begun March with a lurch, she added, volatility subsided into April in spite of concerns over problems in the sub-prime mortgage industry. Default rates and credit rating downgrades remained low as equity markets rebounded.

In the US, new issuance levels in both high-yield and leveraged loan markets were buoyant in the first quarter, also largely driven by M&A activity and other shareholder-friendly corporate actions.

A record total of $224 billion in high-yield debt was brought to market in the first quarter, 80 percent of which was leveraged loans, according to S&P.

"Risk appetite reappeared, with the credit markets continuing to offer cheap funds for myriad uses, including leveraged acquisitions and dividend recapitalisations -- strategies that may be ultimately unhelpful for its own health," said Ms Vazza.

Ms Strub said M&A activity and private equity were big factors behind growth in the high-yield and leveraged loan space.

Globally, M&A activity topped $1,000 billion in the first quarter, making it the busiest, most lucrative first quarter on record -- a boom driven by record private equity deals, according to data provider Dealogic.

USAGOLD Daily Market ReportPage Update!#1546685/2/07; 19:17:02">
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.

WEDNESDAY Market Excerpts

May 2 (Reuters, DowJones) -- Selling based on technical indicators and contract rollover drove U.S. gold futures to a lower finish for a second straight day on Wednesday, and analysts said further declines were possible in the short term. Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled down $2.20 at $675.10, traded from $670.00 to $677.90.

George Gero, vice president of RBC Capital Markets Global Futures, said that investors were taking a breather as sell-stops pushed prices down to the $670 level.

"The rollover is going to begin, and you have got a very large June position," said Gero, referring to investors' switching of the benchmark June contract to August futures beginning in May. Contract rollover added volatility to the market because of the interaction of different trading strategies as investors mulled whether to switch their futures to the next most-active month as the first-notice day approaches.

Greg Weldon, chief executive of, said in a note that gold prices were hurt by credit risk -- deteriorating credit conditions in the economy as debtors default their contracts and will not repay.

The entire precious metals sector continued to decline because of a heightened risk of the credit-driven liquidity boom, which had helped reflate all asset classes from stocks to metals, Weldon said.

"All during this sell-off from $698 on down, I have seen good physical interest out of both Asia and Europe," said Bill O'Neill, one of the principals with LOGIC Advisors.

"While the speculative liquidation is taking place, there is still some good physical accumulation going on." Global tensions still exist, but probably at the same level as was previously the case, and thus have been "fully discounted" by the market, he said, adding that eventually he looks for the uptrend to resume.

"Some of the (global) problems that now seem benign will reassert themselves."

In mining news, Barrick Gold Corp, the world's biggest gold producer, posted a first-quarter loss as it took a $557 million charge to exit hedge positions and take advantage of strong gold prices.

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

flow5The DIDMCA of March 31st 1980 Created all the Bubbles#1546695/2/07; 22:06:43

The DIDMCA became law on March 31st, 1980. Considering the paucity and nature of the comments in the financial press, the revolution and disastrous implications of this Act clearly are not recognized. The Act created the legal framework for the addition of 38,000 more commercial banks to the 14,000 we already had, and in the process, the abolition of 38,000 intermediary financial institutions. The intermediary financial institutions effected were the nation's savings and loan associations, mutual savings banks, and credit unions. Trust companies and stock savings banks have been commercial banks for many years.
Commercial banks, as contrasted to intermediaries, are credit and money creating institutions. The intermediaries are credit transmitters. Savers (contrary to the premise underlying the DICMCA in which CBs are assumed to be intermediaries and in competition with S&L’s, etc.), never transfer their savings out of the commercial banking system (unless they are hoarding currency). This applies to all investments made directly, or indirectly through intermediaries. Shifts from time deposits (TDs) to DDs within the CBs, and the transfer of the ownership of these DDs to the S&Ls, involves a shift in the form of bank liabilities (from TDs to DDs), and a shift in the ownership of DDs (from savers to S&Ls, et al). The utilization of these DDs by the S&Ls has no effect on the volume of DDs held by the CBs or the volume of their earning assets. The reverse process, which is called "disintermediation", has the opposite effect: the intermediaries shrink in size, but the size of the CBs remains the same.
In the context of the commercial banking system lending operations it is only possible to reduce bank assets and DDs by retiring bank-held loans. The saver-holder might use his funds for the payment of a bank loan, interest on a bank loan for the payment of a bank service, or for the purchase from their banks of any type of CB security obligations, e.g., bank stocks, debentures, etc.; or an increase in CB capital accounts through the retention of profits; or by the nonblank public increasing its holdings of currency; or by transferring DDs into (TDs).
Lending by commercial banks is inflationary. Lending by intermediaries is non-inflationary. The lending capacity of the intermediaries is limited by the volume of actual voluntary savings put at their disposal. In contrast, the lending capacity of the member commercial banks of the Federal Reserve System is limited by the volume of legal reserves put at their disposal by the Federal Reserve Banks in conjunction with the reserve ratios applicable to their deposit liabilities as fixed by the Board of Governors of the Federal Reserve System. For the nonmember banks the lending capacity at any given time is limited by the rate of expansion of member bank credit since the member banks still hold the major volume of commercial bank assets.
Commercial banks do not loan out existing deposits (saved or otherwise), or the owners equity or any liability item. When commercial banks grant loans to, or buy securities from, the non-bank public, (which includes every institution and every person except the commercial and the reserve banks), they acquire title to earning assets by the creation of NEW money (demand deposits) somewhere in the banking system.
From the standpoint of the individual commercial banker, his institution is an intermediary. An inflow of deposits increases his bank's clearing balances, and probably its legal reserves - and thereby it's lending capacity. But all such inflows involve a decrease in the lending capacity of other banks, unless the inflow results from a return flow of currency to the banking system, or is a consequence of an expansion of Reserve Bank credit.
The source of time deposits to the commercial banking system is demand deposits, directly or indirectly via the currency route or through the banks undivided profits accounts. The financial intermediaries are the customers of the commercial banks. Money flowing to the intermediaries actually never leaves the commercial banking system as anyone who has applied double entry booking on a national scale should know. And why, from a systems standpoint, should the banks pay for something they already have. I.e., Interest on deposits? From the standpoint of the commercial banking system, CBs would be more profitable, if our legislators got the commercial bankers out of the savings business. The effect of allowing CBs to "compete" with MMFs and other intermediaries has been, and will be, to reduce the size of the intermediaries – reduce the supply of loan-funds (available savings), increase the proportion, and the total costs of CB time deposits.
CB disintermediation is not, and has not been, predicted on interest rate ceilings. Disintermediation for the CBs can only exist in a situation in which there is both a massive loss of faith in the credit of the banks and an inability on the part of the Federal Reserve to prevent bank credit contraction, as a consequence of currency withdrawals. The last period of disintermediation for the CBs occurred during the Great Depression, which had its most force in March 1933. Ever since 1933, the Federal Reserve has had the capacity to take unified action, through its "open market power", to prevent any outflow of currency from the banking system.
Disintermediation for the intermediaries-S&L, MSB, CUs, MMMFs, etc., is predicated on their loan inventory (and thus can be induced by the rates paid by the commercial banks); earning assets with historically lower rate and longer term structures. In other words competition among CBs for time deposits has: 1) increased the costs and diminished the profits of commercial banks; 2) induced disintermediation among the "thrifts" with devastating effects on housing and other areas of the economy; and 3) forced individual banks to pay higher and higher rates to acquire, or hold, funds.
The monetary authorities of the Federal Reserve System, through their control over the volume of Reserve Bank credit, and the reserve ratios applicable to member bank demand and time deposits (and Eurodollar borrowings) can control the size and rate of expansion of the nonmember banks – as long as the member banks hold a substantial majority of all commercial banks assets. Since 1942, money creation is a system process. No bank, or minority group of banks (from an asset standpoint) can expand credit (create money) significantly faster than the majority banks expand.
Under the Act the legal reserves of the member banks remain the same, namely, balances in the Federal Reserve banks plus vault cash. Nonmember banks, S&Ls, MSB, and CUs ultimately (after eight years) were subject to uniform reserve ratios as these pertain to size of institution and type of deposit. But there is this important difference in reserve asset requirements: The nonmember banks can hold a part of their legal reserves in the form of interbank demand deposits (IBDDs) in correspondent member banks; the S&Ls, as IBDDs in the Federal Home Loan Banks; and the Credit Unions, as IBDDs in the National Credit Union Administration Central Liquidity Facility. Presumably in order to prevent the pyramiding of reserves, the Act requires all institutions holding these particular IBDDs to redeposit the funds in Federal Reserve Banks. Unfortunately, pyramiding will not be eliminated unless the Fed imposes a 100 per cent reserve ratio on these accounts. But the Act specifically exempts all except correspondent member banks from any reserve requirements.
There is no possible way for the Fed to get a "handle" on the money supply unless it has (and properly exercises) direct control over the volume of legal reserves, and the reserve ratios, of all money creating institutions. This the Act does not provide. The legal reserves of all money creating institutions should consist of directly held balances in the Federal Reserve banks – that and that alone. This was the original definition of the legal reserves of member banks in the Federal Reserve Act of Dec. 23, 1913 – (Owens Glass Act) and it is still the only viable definition (pre-1959 requirements pertaining to assets).
In due course, under this Act, our means-of-payment money supply (now designated as M1A by the Board of Governors) will approximate M-3.
Does this imply a disastrous inflation, perhaps high double-digit or even triple-digit, is knocking at our door? Hardly. At least not immediately. But in due course the public will think of CU share accounts as money, the customers of S&Ls and MSBs will regard their balances in these institutions as money, and the managers of these institutions will discover savings deposits need not precede loans. They will, as commercial bankers now do, simply credit the account of the borrower. The mangers of the erstwhile intermediaries will then have discovered the joys of "fractional reserve banking". This assumes the commercial banking system, as a whole, is expanding and that the intermediaries on balance, have excess inflows of funds and not outflows of funds (disintermediation). No individual institution, acting alone at any given time, can create credit (and money) by a multiple – but it can over a period of time if other banks are expanding. Multiple credit and money creation is a system process. Consequently if this act is not revised so that the Fed can get a direct grip on the volume of legal reserves of all of these institutions, then this country will experience a truly disastrous inflation.
Note: We should have learned the falsity of the assumptions underlying the DICMCA. It was an identical replay of 1966, when Reg Q ceilings were raised to 5.5 per cent in order to bail out certain large New York commercial banks. All the while, the thrifts did not have interest rate ceilings then, and the intermediaries suffered disintermediation, and there was a housing crisis.
One of the principal purposes of the Act was to provide the housing industry with a reliable source of funds. That may be achieved through various governmental and quasi-governmental corporations. But the role of the S&Ls in housing finance will probably diminish significantly. By becoming commercial banks and having a larger spectrum of loans to choose from, the S&Ls will act like banks and whenever possible eschew "borrowing short and lending long". Sources of mortgage funds will shift from the subsidized rates heretofore provided by the small saver to "bond-backed" sources which will reflect the higher interest rates prevailing in the loan-funds markets. These factors combined with higher trend rates of inflation should result in a pronounced upward trend in mortgage financing costs.

mikalChina "elephant in the room"#1546705/3/07; 08:35:04 Asia Draws on $2.7 Trillion of Reserves to Safeguard Currencies - Shamin Adam - Bloomberg | May 3, 07
GoldiloxInflation masks the dollar demise, or is there a more important reason?#1546715/3/07; 09:19:51

George Ure talks about inflation as the driving factor for far more than just "treating dollar ailments" in his piece today.

He also notes the disappearance of a mirrored website, just at the point where they listed 64 failing mortgage lenders.

Lots of food for thought for "inquiring minds".

LebiequeAbby#1546725/3/07; 09:31:56

who has forgotten Abby "the soothsayer" Cohen at the turn of the millennium? The NASDAQ had more than doubled in less than four months and the DOW not far behind. There she was, waxing lyrically about how this was only the beginning of milk and honey for all. Don't worry be happy, the stockmarket is for everybody, come hold my hand, we'll all get stinking rich together. Since then there has been an ominous silence from Abby whilst the DOW agin went from strength to strength. Newbies, since that fatefully controlled crash, have not even heard about here and are mostly blissfully ignorant of her existence. Until today that is.

The Daily Reckoning is quoting press reports which mention Abbey Cohen again.

With hindsight, this has to be THE most surefire sign of imminent tops.

riggsysayings...#1546735/3/07; 12:01:24

Truth, like gold, is to be obtained not by its growth, but by washing away from it all that is not gold.
Leo Tolstoy (1828 - 1910)

For all the gold and silver stolen and shipped to Spain did not make the Spanish people richer. It gave their kings an edge in the balance of power for a time, a chance to hire more mercenary soldiers for their wars. They ended up losing those wars anyway, and all that was left was a deadly inflation, a starving population, the rich richer, the poor poorer, and a ruined peasant class.
Hans Konig

A man that hoards up riches and enjoys them not, is like an ass that carries gold and eats thistles.
Richard Burton

Hay is more acceptable to an ass than gold.
Latin Proverb

MarkeTalkCopper Prices Up Strongly; Gold Prices to Follow#1546745/3/07; 13:19:10

I don't know if our posters and lurkers have noticed the action in the copper market over the past week. From the weekly charts, it appears that copper is at its highest price in over one year. Today it climbed 8.70 points to 371.55 (May basis). And I thought China was raising interest rates to cool down its economy and thus dampen the demand for copper! At least that was the "cover story" a month or so ago, which caused the price to swoon. Sounds to me like it was another deliberate manipulation to buy the stuff cheaper.

The point behind talking about copper is that it is indicative of the base metals market and the underlying inflation in the world economy. Gold and silver responded nicely today after taking a holiday since last week's options expiration and the May Day (May 1st) celebration. I expect gold and silver to push higher tomorrow and into next week, with the slate of economic numbers being released. The old target of $730/oz. is in clear view and it would not surprise me to see gold clear that hurdle by the middle of May.

Finally, my earlier post about clients transferring their assets from 401(k) plans and IRAs to self-directed, gold-backed IRAs seems to have generated a lot of interest. My phone here at Centennial has been ringing constantly about that topic. I seem to be getting more business now than I did in the first three months when people usually think about IRAs. By the way, one of my predictions of higher coin premiums is also coming to pass. Just this past week the premium on the 1 oz. Canadian Gold Maple Leaf coin (older dates) has risen $4.00/coin. This premium increase is reflecting higher demand and tighter supply of coins minted before 2007. I expect the same to occur with the 1 oz. Austrian Philharmonic coins before long. For IRA purposes, only modern gold bullion coins can be used, and I usually choose the Canadian Maple Leafs and the Austrian Philharmonics because they are cheaper than the US Gold Eagles and Gold Buffalos.


KiloAaaaah, very wise Grasshoppa !#1546755/3/07; 14:02:34

"....A man that hoards up riches and enjoys them not, is like an ass that carries gold and eats thistles"....
Richard Burton

Speaking of enjoying riches, perhaps some of us obtain our "enjoyment" in terms that outside "non-PM observers" might not completely understand.

Case in point. I have a "pocket piece" in the form of a large Alaskan natural gold nugget from the area of Ganes Creek that weighs in at 11+ troy ounces. The "enjoyment" I get from carrying, fondling, showing, and talking about that nugget to others far outweighs any enjoyment I can think of that might come from selling it and using the proceeds for any other form of "enjoyment". Most of us feel this way about our most prized possessions, whatever their form. Even to those with a working familiarity to gold in the form of bullion, coins, numismatics, jewelry, etc., the priceless expressions encountered when someone else is handed that big nugget, almost instinctively understanding the rarity of the object and the experience itself, far outweighs a pile of paper or digits in the local bank. You can almost see and feel the stir of emotion and creation of the gold bug spirit right before your eyes as they handle the real thing in it's most basic and raw form. Still, there are very few occasions when it requires any explanation. "They just know......." ;)


TownCrierHey Gordo, be careful where you stand... or a clever photographer will seize the opportunity for social commentary.#1546765/3/07; 16:08:20

Some gold bugs will get a chuckle if they visit this collection of Reuters pics and scroll to the second-to-last item, picture 23 of 24, in which Chancellor of the Exchequer Gordon Brown is speaking outside the Scottish Office in Edinburgh, Scotland.



P.S. If you can't quite find it, the isolated image is here:

USAGOLD Daily Market ReportPage Update!#1546785/3/07; 18:56:17">
The Daily Gold Market Report has been updated.

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

THURSDAY Market Excerpts

May 3 (DowJones) -- The futures markets today in essence shook off a stronger dollar and weaker crude oil, factors that are often bearish for the metals. The dollar may well take center stage again Friday morning, however, when the government releases the monthly U.S. employment report.

The COMEX June gold contract rose $9.30 to $684.40.

"It's fresh buying by funds," said Leonard Kaplan, president of Prospector Asset Management. The strength began in the London Metal Exchange base metals and spread to precious metals and even other markets, he said.

"Look at the grains," he commented. Corn, in particular, was sharply higher.

George Gero, vice president with RBC Capital Markets Global Futures, also cited fund buying, with "100-lot orders one after the other."

Funds were also buying silver, he said. "There was brisk volume," Gero said. "It started with copper, which was moving first. Then the gold caught on. It has nothing to do with the euro and doesn't seem to have anything to do with energy."

A New York trader also commented that the bounce occurred around the time London trading was closing, although he attributed this largely to short covering.

Also, he said, there were reports of an Asian bank making a large purchase on the London market.

On the Comex, some of the strength is simply because selling of futures contracts abated after the market ran sell stops on Wednesday, Gero said. Also, he said, U.S. economic data may have been viewed as slightly inflationary. Gero also commented that strikes and strike threats [in Peru] may be having some impact on the price action.

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

TownCrierCentral banks determined to achieve 2010 deadline#1546795/3/07; 19:13:11

(Bahrain Tribune) -- The GCC central banks are determined to achieve the 2010 GCC single currency deadline. The central banks during the upcoming meeting in September will review the progress on some major issues, a top official at the Central Bank of Bahrain said.

The CBB Governor, Rasheed Al Maraj said that there was no decision about any delay or postponement of the 2010 deadline.

"I think that reaching a unified Gulf currency in 2010 will be a big challenge. We can achieve the currency in the coming period but all of that is subject to the speed at which decisions are made. There is no doubt in our minds that the time remaining is short and there is a big matter to achieve. So far we have not received any official nod to postpone the unified Gulf currency."

"The GCC central banks are carefully examining the details of the EU model as this was the only model available for us but the institutional set up for is totally different from that of EU. The issue of the unified central bank has certain prerequisites prior to reach on any definite form of an institution or to meet the deadline."

"All parties have a realisation about the difficulties and challenges in this regard and we are determined to exhaust all possible time to achieve the deadline for GCC common currency."

"The central banks are keen to develop internationally acceptable standards..."

^___(from url)___^

Amid all the international monetary system-related restructuring, of which this is just a part, it remains an unspoken "given" that the U.S. bond shall be deemphasized from its old role as the primary reserve asset in favor of the steadfast neutrality and security of gold.

Are you loading up on the cheap in the time available to you?


Sierra MadreImpending smack-down...#1546805/3/07; 21:51:01

I can feel it in my bones...

Every time you see gold rise nicely - like today - and then level off (presently at $680.80) you can expect to see this momentary stability smashed; as if, when the market is "catching its breath" so to speak, TPTB takes advantage of the lull in the rise to smack the price down.

How about a close at $672 tomorrow?

We shall win this war on gold, not a shadow of a doubt. But TPTB are striving mightily and will continue to strive so, as long as they possibly can. The paper money scam is SO PROFITABLE, they will defend it until they run out of gold - or "something else" happens.

That "something else" may come out of the blue at any time, without warning. Every passing day makes it more likely.


Silver FoxSierra Madre #: 154680#1546815/3/07; 22:57:19

Impending smack-down...

Sierra; you have to admit it is almost humorous to watch those "people" who intervene and drive down the POG & POS is a DESPARATE effort to shore up the dollar. Whether they are "naked short selling" or bullion selling or paper bullion selling, you can easily imagine them with their nervous twitching, beady eyes and a pathetic look of a loser because they know they hold a losing hand. They will claim some type of patriotic oath, but the bottom line is that they are rigging the world's economic "game".

Their actions in the long term don't matter as the game is being driven by economic fundamentals. The US is on its last legs and the menacing dollar hegemony is coming to an end. (It has been nice as one who was on the receiving end). Something that is more-funny is that all of the countries who are receiving dollars KNOW they are being screwed, but their fate is tied to the US and the paper dollar. The world's macro-economic flow is currently with the dollar, therefore, so goes the US dollar, so goes their "dollar based" economies.

Bob Chapman recently reported that one of his spies obtained a Carlyle Group report that indicates that all of the "players" will be able to keep this "game" afloat for another 2 to 2 1/2 years. I would imagine that at that time, the people who keep "smack downing" the POG & the POS will become overwhelmed.

Good luck to you Sierra Madre. I always enjoy reading your posts.


SundeckSierra's smack-down#1546825/3/07; 23:51:53

Ahhh....Sierra...I have quite a different judgement is that gold is going to head higher over the coming days and weeks...even as the US dollar "strengthens" against yen and euro...monetisation by CBs to avoid an index fall below 80...

Just a feeling in my bones...DEFINITELY NOT investment advice and I may be well-and-truly wrong...


GOLD FINGERGoing Green?#1546835/4/07; 02:31:51

When we do get there...what next?

No more oil?

Peak oil now to make up for it all when we grow less dependent?

I think we will never actually run out of oil.

There is plenty.

Greed it what keeps it scarce.

What keeps gold scarce? I think 50 trillion dollars!!


Demand will always keep gold up!

smiles45Sierra Madre-smack down#1546845/4/07; 05:39:17

Sierra, You have the correct feeling IMHO. The Cartel has for years manipulated G & S to keep eyes away from their fiat Ponzi scheme. I read an interesting article on silver(my point is about gold not silver-read on) which quoted the rises in energy and base metals and then compares silver's rather meger rise. The rise in gold has been an even less impressive with a scant 166% rise from $275(2001-2007), but amazingly from 1973-1980 gold rose 3,000%-30 fold ($35-$875).
So to the skeptics of rigged markets please ponder those numbers when saying the markets decide for themselves their own prices. COT is net short as of last Tuesday with 180,000 futures & options. There is no way POG go will have a sustained rally here under that weight when also factoring in current POG mediocre chart indicators.
If a rally is sustained over $700 COT will continue to hammer the futures. Remember these banks are basically today the commodity Plunge Protection Team(PPT) with vitually unlimited fiat resources.
So bottom line is that futures are and will remain only a paper game until the dollar becomes Weimar worthless. ALL posters here and the MGT have it all correct. Physical bullion is the ONLY way to go and go quickly is my advice. Physical markets have had a record year with 241,000,000 oz bought by private investors.
When the actual physical supply dries up it's "AIRTIME" for the POG. Limit up with no trading, G & S futures settled in worthless fiat, and legitimate long hedgers are met with exchange "force majeure" rules of NO delivery only cash settlement. Snip on Energy & base metals:
Silver's Underperformance and Price History
Silver remains historically undervalued. Despite the incredibly bullish fundamentals outlined silver has so far underperformed nearly all the other commodities. Silver has gone from below $5 to some $14 and is up some 190% in the last 7 years.

This seems like a lot, but when compared to other commodities and metals it is very little:
Oil is up from $10 to $63 or 600% and more than 6 fold.
Zinc from $.35 to a high of $2.00,. now $1.50/lb or nearly 5 fold.
Copper, from $.75 to a high of $4.00, now $3.58/lb or nearly 5 fold.
Lead from $.20 to $.90/lb or nearly 5 fold.
Nickel from $3 to $22/lb or more than 7 fold.
Indium, Molybdenum, Selenium, Cobalt are all up 1000% or 10 fold and more.
Uranium is up a phenomenal 1300% or 13 fold.

Many commodities are up between 5 and 13 fold. Silver is not even up 3 fold. If silver were to catch up with these other less rare and less precious metals, it would have to increase in value by some 500%. From the bottom at some $5/oz in 2001, that would result in silver being valued $25.

smiles45POG rally may still be on, but.................#1546855/4/07; 06:17:16

My previous failed to mention one salient issue. As bubbles burst and they are bursting. Real Estate for the most part are weak with the US the worst with sub prime motgage contagion. The next bubble likely to pop is the stock market either Shanghei or the Dow either in tandum or individually. We also can't forget the huge bond bubble that China or Japan call start a massive selloff at anytime.
Forget the reasons that affect the various bubbles they do exist. Yet when stocks deflate our huge pension and mutual funds will bail out en masse. Unlike hedge funds they cannot go short and so must buy some assets (similar to China's cash reserve quandry at present). I think PM metals, energy issues and natural resource stocks and/or physicals bullion (via EFTs) will be swamped with buy orders from those funds. The hedge funds are momomentum players and they will by and large be buyers as well./Peter

johminusDrudge poll results on last night's debate#1546865/4/07; 06:29:03

Happily, Ron Paul came out well. Tancredo didn't do too well.
riggsypayrolls...#1546875/4/07; 09:11:46

The government added 25K to the payrolls. we must have needed some part time tax season employeees.

There is a great deal of wishful thinking in such cases; it is the easiest thing of all to deceive one's self.

Sierra MadreSmiles 45: quite agree with your post#1546885/4/07; 12:27:37

Well, I was wrong - happy to say that - about the "smack down" for today.

But, the Cartel is not going away, by any means. They will be back to harass and detain the gold price, and they will go on doing this as long as they possibly can.

The final result will be revealed when there is simply not enough gold available to keep the price of PHYSICAL down. This final barrier is inevitable and all the might of the Paper Cartel Boyz is powerless when it becomes a fact. So, the high and mighty are in a predetermined LOSING GAME; the gold owners and buyers are on the predetermined WINNING SIDE.

The final outcome will be hastened by 1. the now rapidly increasing amount of fictitious money sloshing around the world and 2. FEAR (that is barely raising its head right now) with regard to paper assets. The huge deflating bubbles will, pretty soon now, begin to alarm the more perceptive investors with regard to the possible evaporation of value of those paper assets.

The first ones to bail out will do so in panic; but the remaining herd will mill around helplessly, unable to do anything to rescue their property from decimation.

Good week-end, everyone!


TopazPoG.#1546895/4/07; 14:33:55

The Bond yield Chart (linked) is looking, for all money to revisit low 4's here during May at least. This doesn't augur well for PoG ...and makes the current uptick look a bit sus for mine.
Anyone who witnessed the complete and utter reversal of Yen/PoG at May OpEx last month will ALSO be aware that ANYTHING can happen at this current juncture.

I personally like the PoG analogy with an Appolo Rocket as she sits untethered on the LaunchPad, the countdown has finished, restraints disconnected, thrust rockets roaring supporting it's massive weight and the thing i - n - c - h - ing skyward.

God bless the PoG rocket ...and all that fly in her!

Topaz...speaking of Yen/PoG.#1546905/4/07; 14:48:52

We're near as damnit to Another multi-year high on Y/Au as I type.
Third time lucky? ..will we NOW resume Stage 2 of the rampant Gold Bull?

If so be the case, no amount of TA, FA or any other A will serve to explain/quantify it ...thats for sure.

flow5Sopping up the Foreign-Dollar Market#1546915/4/07; 15:53:02

Modern Money Mechanics:

(1) "The key point to remember, however, is that the Federal Reserve routinely offsets any undesired change in U.S. bank reserves resulting from foreign-related transactions (see quote # 2). As a result, such transactions do not affect money and credit growth in the United States."

(2) China has continued to invest a large part of its huge reserves in US bonds and assets. It held $262.6 billion in US government treasury bonds at the end of January, making it the largest single investor after Japan. By pumping up demand for treasuries, China's buying of the bonds has helped to drive down market interest rates in the American economy."

Reserve requirements are no longer "binding". Just think, Chinese purchases of domestic dollar denominated assets increase the U.S. money supply (show up in M3) and are NOT "sopped up" by the "trading desk" because most commercial bank liabilities are no longer reservable. Doesn't this make sense?

Central banking catechisms and gullibility.

TopazExpanding on the Apollo (sic) analogy. #1546925/4/07; 16:06:56

Of course, in the current state of suspended animation, our Rocket is at it's "most" accident prone and vulnerable from a systemic "accident" pov, ie: it MAY simply explode on the LaunchPad ...God forbid!
Town CrierMore price- and purchase- related commentary#1546935/4/07; 17:14:10

Last Thursday at the Forum I posted a chart which depicted that day's sudden decline in gold price from roughtly $685 down to $670.

In my brief commentary at the time I essentially waived it off, saying that there was no cause for alarm -- the price action gold was "very likely making just another one of its signature dashes toward trend support as it's done so many times before."

Upon seeing my chart at the forum, however, I suddenly realized a potential problem. My chart demonstrated such a compelling history and trendline that it would surely inspire a few newbies to try to be clever and time their next purchase -- waiting for "inevitable" dip to the trend's (then) $660 support level.

Therefore, I quickly put forth a follow-up post cautioning against such attempts, lest they be left on the sidelines. I indicated that just because the price had dropped halfway, waiting for a full drop to the trendline was a fool's errand as there was no guarantee that history would repeat itself. After all, the market has a miraculous way of keeping most people on the sidelines. Only those few with a solid understanding actually have the resolve to act in such a way that time shall prove to have been in their benefit.

And sure enough, this subsequent week has borne this out, and old hopes for the $660 pricing may be very very hard to come by. Heck, even the $670 level may have just become a rare prize, too.

The lesson here is to stop trying to be overly clever, or else you may simply end up goldless. Instead, take a deep breath, and put your resolve to the test. Call the fine folks at USAGOLD-Centennial and get that purchase done while we're still on the cheap side of $1,000.

-- Randy
one year gold price chart

R PowellSmiles 45#1546945/4/07; 17:47:00

Your comments from an earlier post......

"So to the skeptics of rigged markets please ponder those numbers when saying the markets decide for themselves their own prices. COT is net short as of last Tuesday with 180,000 futures & options. There is no way POG go will have a sustained rally here under that weight when also factoring in current POG mediocre chart indicators."

I'll not try to disagree with your conspiracy theory...that there exists an evil cartel whose only purpose in life is to surpress the POG. I have been asked many times in the past not to dampen the party of those who love to hate the evil gold haters.

But, in the interest of accuracy, not to mention some semblance of truth, I will mention that the COT contract numbers, long versus shorts, ALWAYS are equal in every exchange traded commodity in every exchange in the world, gold included! For every contract sold there is one bought. It's simply impossible to sell anything into a void. And you'll find buying is also impossible unless someone sells.

Don't believe me? Simply goggle "commitment of traders", pick any commodity and read the totals of contracts sold and compare to total of contracts bought. Either of these IDENTICAL numbers will also equal the total open interest. Every commodity, every exchange, every simgle day!

Again, sorry for having to disagree but the cheering of any information, whether true or not, just to add pro-gold noise to the parade is one of the main reasons why intellectual validity + a great many terrific posters are no longer here.
happy weekend....

USAGOLD Daily Market ReportPage Update!#1546955/4/07; 19:44:24">
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

May 4 (DowJones) -- A softer U.S. dollar following a weaker-than-forecast jobs report Friday provided the fuel for gold to continue its rally, as fund and chart-based buying continued, analysts said. The COMEX June gold contract rose $5.30 to $689.70.

"This is very much a dollar story," said Bart Melek, global commodities strategist with BMO Capital Markets.

Currency analysts, in turn, have blamed the dollar's weaker tone on news that U.S. employment last month grew at the slowest pace since November 2004. Non-farm payrolls rose 88,000 during April, when expectations had been for an increase of 110,000. The unemployment rate rose to 4.5% from 4.4%, as most economists had expected.

"The market is again entertaining the idea after today's (data) release that once employment markets weaken a little bit, that will reduce consumer spending and essentially reduce the inflationary pressures in the United States, allowing the Fed to ease monetary policy," Melek said.

That could mean further selling pressure on the dollar, which in turn tends to support gold and other metals, he explained.

Several traders reported fund buying.

"We are seeing a return of the investor, particularly the fund community, who are driven by the technicals," said Paul McLeod, vice president of precious metals with Commerzbank. "As we had a breakout yesterday, it was a strong signal that the consolidation had run its course."

"People are now looking for a return to the rally. Everyone next week will have $700 on their radar screens."

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

R PowellCOT link#1546965/4/07; 20:15:24

Click on Commodity Exchange Inc, short form + scroll down to find gold numbers. I use the straight futures only numbers, but the futures plus options numbers are also listed. Deciphering much from the mixture of both contracts plus options may be a hopeless task, considering the unlimited amounts of speculative strategies the combination allows.

Fwiw, my old brain did recall my posting number even after some time in my parents phone number from decades ago when I was still in short pants, my student #, SS #, and a few others that shouldn't be mentioned.

Also, fwiw, I suspect that the next meaningful upswing in silver + gold may well be a doubling in dollar price although I haven't a clue as to when. Once it starts in earnest, it may happen fairly quickly. Perhaps it will come after the current prices are seen as cheap. Do you remember silver at $4.01 and gold at $252. Seems like yesterday.
happy weekend

OvSTesting.#1546975/5/07; 13:30:04

OvSGold & Silver#1546985/5/07; 13:42:59

I'll have to re-read my
history. It was Aldrich
the senator from Mass.
that prior to the creation
of the Fed was instrumental
in defeating the Silver
Republicans and made gold
supreme. This was a pure
old money vs. new money
war. Of course, the Federal
Reserve creation cemented
the Euro-Anglo-American
elite's dominance.
While I wait for the Gold/
Silver story to unfold it
might be entertaining to
understand where it evolved
from. Anything interesting
I'll be digging up, I shall
report. OvS

USAGOLD / Centennial Precious Metals, Inc.SECOND EDITION -- Written for Today's Market#1546995/5/07; 16:46:18">Gold Investing - Second Edition
Topaz@Rich.#1547005/5/07; 16:58:12

Yes Sir R it has been a while ...and whilst I share your outlook on the whole manipulation "noise", the same arguments are not valid when considering validity and appropriateness of futures pricing mechanisms as they relate to Gold ...and Silver.
The pricing of Gold as has evolved these last several years is a fabrication of the paper market whereby the "function" of Gold within the System has been negated.
PoG "should" be sub 200 based on the pricing mechanism ...and it stands as a testament to "management" adroitness that we're at or about $700.
The basic flaw as I see it is that financially we are living our present in terms dictated by the future ...Golds "present, here and now, in your face" value function has been usurped and reduced to the status of derived future paper Rich, when it(GOLD)clearly is not.

To accept that Gold is "valued" via the current mechanism completely discounts the REAL function of Gold per se IMHO.

riggsysing it...#1547015/5/07; 17:04:22
smiles45R Powell (5/4/07; 17:47:00MT - msg#: 154694)#1547055/5/07; 18:44:59

Hi Chris for not disagreeing with me you sure build a powerful case that are markets pristine and untouched.
First let me say I love Gata and all it has exposed and the number of people it has illuciated on the subject of gold. I thank you for your efforts and inputs.
Now to the point. Being a commodity broker since the late 1960s I am fully aware that all futures transactions requires an equal amount of buyers for sellers either in number of specuators or in quantity of contracts. That adds NO light on the subject of manipulation.
Second, I do not cheerlead statistics ever as 95% of gold bulls do. I am completely neutral to those numbers whether real or imaginary. I will say it has aided me in trading and making a living for my family since acquiring MS in 1983.
As to futures and options when figuring overall net positions of the trade. First off it matters not how many alternatives there are in factoring in options (I assume you allude to offseting physical, derivative plays or writing or simply buying or selling said options). It matters not as an option is a contract to buy and sell the commodity at a set time and price with a lessening time frame. In this case POG is 100oz the same as the futures contract.It too must be offset or expire worthless.
Often times the buying or selling of key month active months pressages to traders (locals & otherwise) the direction the futures will trade in. Annoncement by floor brokers prior to the opening also provides key to the direction of market.
The ke is the amount of futures are not manipulated it is the price. This is accomplished by feeding off the momentum hedge funds and specs as hey trigger key chart points of support or reisitance. The commercials are aware which funds and what size positions they carry. They also are very familar with how and why they buy or sell.
The point in my post was this: the large specs have limited or finite capital, the govt sponsored bullion banks (trade, Cartel call what you like) have no such restrictions. There objective is to slow the rise of POG as they know they cannot stop it from rising. he COT boys buy time and make huge profit on trading, but in the last years from 2003 have suffered losses on their overall position.
The patterns of subterfuge remain with 11:30am raids on the market, low prits on the close and gunning stops at key chart points. There are many others which are more technical in nature and do not add to this discusion.
The PPT in SM doesn't dally by simply buying the DOW 30 they storm the options markets buying several key issue options. This creates a buying attitude in the general public of players.
In years past and especially during the 1997 Asian Crisis BTW, I live in Asia) the HK govt stood as the only buyers in a dropping Hang Seng. They bought and bought for days even weeks. The Japanese did the same on numerous occasions by buying the Nikkei Dow. It took years even decades for the Jap. govt to recoup anywhere near what they spent. HK was more fortunate, but still took and American SM bubble to get them back to equal
Govt interference in market is well known, but in the last years they have learned to utilize the key players in the market for their owns ends. Henry Paulson is a prime example of an insider turned govt lackey, the trade in gold is utilizing the best trade houses and floor brokers to snooker the hedge funds and in PM stocks the govt is using Barrick & others for their prior indescriminate selling of forward hedge selling.(1998-2003). This is ending now and contributes to the increased worldwide buying pressure I mentioned.
I am no conspiratorist Chris, I am a realist. As a floor broker I witnessed how the trade in Sugar, Cotton, Cocoa, Potatoes and the PM metals operated. The strategies were slighly different; yet the purpose was always the same: fleece and trick the traders and speculators. Get him to be on the opposite side thru diversipn and drain him.
Well enough said Chris and we can agree to disagree or just let it pass. In the ultimate picture you are a bull and so am I.Sorry I am a one hand tper, LOL Regards/Peter

smiles45R Powell (5/4/07; 20:15:24MT - msg#: 154696)#1547065/5/07; 20:18:10

One important point that I did not cover. True as you say contracts must be offset, but no necessarily a the same time or contract month. As in delivery months are usually rolled into the next active trading month (about 2 months hence); however, the more directed contracts are also rolled forward ad infinitum without a current offestting bu. That keeps the trade continually short huge quantities of future based shorts (without the attendent buying pressure of short covering).
If I can find the link, I saw a posting of all low and high trade short and spec long positions dating back may years. It was illuminating as the shorts rarely dipped below 90,000 lots. That indicates that those are either legtimate short hedges of miners or contracts they just could not find offsetting sellers for.
Normally, a short squeezed with such a large position has real margin problems especially with such huge one way losses.
Back to my original point that these govt. sponsored and backed shorts will in all liklihood never be consumated except in FRN notes after failure to deliver the contracted. This unlimited financing affords the trade to sell without any current rebuying.
Again please accept my apologees for my mistyping on the last post./Peter

Sierra Madresmiles 45: illuminating posts!#1547075/5/07; 21:53:14

Hello Smiles45!

Well, bad typing or not, the truth shines through in your posts. Thank you!

I'm not into the ins-and-outs of futures trading, options or stocks, or other paper concoctions. Gold is only an "in your hand" thing for me.

I have, in a print-out, a study by an author whose name I cannot recall at this moment. He showed that the group of Traders in futures in silver that are classified as "Commercials", were, as a group, NET SHORT FOR SOME FIFTEEN YEARS (I cannot vouch at the moment for the accuracy of the years as I do not have the study at hand; perhaps it was longer)

NOT ONCE in all those years, where the "commercial traders" net long at any time!

A comparison was made by the author of the study, showing that this group of "commercial traders" held net positions that were long or short at different times through the years. BUT NOT SILVER! Silver was always and only, NET SHORT, day after day, month after month, year after year.

Why could that be? My opinion: silver is closely related to gold through the Gold/silver ratio. Silver's price MUST be held back, as a high (market) price for silver would push up the price of gold. This would be death for paper currencies.

Thanks for reading


Sierra MadreCorrection!#1547085/5/07; 21:55:43

POst should read:

"commercial traders" held positions IN OTHER COMMODITIES that were net long or net short...etc."

Sierra MadreManipulation of the Silver Price#1547095/5/07; 23:13:10

This email address is being protected from spambots. You need JavaScript enabled to view it.

The study to which I have referred in the previous post is by Mark J. Lundeen, and bearS the title: "A New Look at the Commercial Traders - Commitment of Traders Charts for 10 Futures Contracts".

The information analysed is for 11 years, 1994-2005.

Mr. Lundeen may be reached at the link provided.


melda laureIt's like shooting fish in a barrel - with dynamite#1547105/5/07; 23:18:49

Zzzzzzzz.. Zzzzzzz.. Zzzzzzz sskkXXX! What's thtat? CB sales? Splendor of Heaven, man, pick up the phone!!


Anyone wondering why gold has not made new highs during a time when the USDollar is teetering need only look to the official Euro Central Bank gold sales. ...the ECB sold a whopping 76 tonnes of gold bullion in the five weeks ending April 24-th, ... They clearly waited for a time when the USDollar was exceptionally weak to dump gold. ...

In the spring of 2006, when the ECB last dumped a tremendous volume of gold bullion on the market, the gold price fell from $730 to $550. ... In the same cited five week time span during the most recent ECB gold dump, gold actually rose from $640 to $690, ... When official ECB gold sales abate, look for gold to easily surpass the $700 mark

melda laureNecessary and Sufficient#1547115/6/07; 00:13:59

The future looks dim.

There are two sets of cowards in Washington. One set is afraid to end the mess by cutting off funding OVERTLY (option "A"). The other camp of cowards refuses to admit that they need to raise sufficent forces via conscription to have any HOPE of success (option "B"). As neither option is politically feasible, we will choose option "C" : more of the same.

What then of the future? Within 1 to 4 years we will reach the point of critical exhaustion where the situation will no longer permit further delay. However, the realities will be unchanged, neither option A or B is feasible, and once time runs out on option C we will be in crisis.

It is a matter of manpower, not of money.

Therefore we will soon have option D: An EVENT that will provide the necessary and sufficient political will for the nation to be sold on option B. Needless to say, it will be bad for all asset clases, paper in particular.

That, I fear, is the reality- devoid of wishes and false hopes. Indeed, it has been the reality all along. For what it is worth, we have all feared that the next event would take place on US soil, however it might as easily happen elsewhere.

The era of resolving matters via flows of capital is over.

Caradoc@ melda laure#1547125/6/07; 05:28:51

I'm afraid you're right. There's even the possibility that the event will be (staged as?) so big and so sudden that, with our existing divisions deployed around the world, in addition to domestic conscription of troops, it will be necessary to "temporarily" deploy NATO troops to implement martial law within the US. An in-between stage -- as seen already in New Orleans after Katrina -- would be using contracted mercenaries like those from Blackwater. (See link above for CNN reporting Blackwater's view of things.)
I'd rather see gold move to its proper valuation for other reasons, but nasty events on the worldwide stage will certainly make it happen.


smiles45Sierra Madre (5/5/07; 23:13:10MT - msg#: 154709)#1547135/6/07; 06:21:07

Sierra, A shame your URL doesn't come up, I had hoped it was the one I had referred to in an earlier post.
While on the floor as a silver phone clerk I received a buy order for 1,000 contracts. I was flabergasted as they usually ranged from 1 to 10 rarely 25 or 50. It was a scale down buy for 100 contracts 1 every cent down from an unchanged previous price down to 10 cent maximum down limit. The market traded higher for several hours, but later afternoon selling swamped the trading pit. My order was being filled slowly every 1 cent down in the pit. All brokers check their buy/sell tickets to doublecheck after trades on quantity, price etc. At the same time you are given the opposite clearing house which in this case was a metals trade house.As a novice then I always wondered where our original buy order emananted from (only the pricipals knew for sure & some back office key people. I was particularly curious how on an up day (maybe 3 or 4 cents) did anyone know limit down was even coming? In those days 20,000 contracts was an avg. trading day.
Silver & copper mysteriously & deliberately enters and disappears from wharehouses confusing the statisticians.
On delivery days there would be huge deliveries 10-15,000 contracts issued and maybe only 3 or 4 stoppers (takers of delivery) month in and month out( were they the same interests?). I used type those deilvery notices myself as we seemed to issue or stop many as a clearing firm. What I had witnessed was a simple display of selling the market down and buy big volume from wire and commission houses.
Point is the methods never change, the same brokers selling the lightly traded outer months to gradually add weakness on the opening (metals open spot to last month each at a time). When strength is needed the reverse is done.
If a bullish report was due and it was known by the trade to be bogus statistics they would let the buyers in gradually selling them scale up and then sell volume when buying dried up covering their shorts.
The weather markets are worse as the trade knows the everything including actual weather on the ground & plant development (in the fields) from their men in Africa, Asia and So. America.
I would like to tell the forum of this week's COT.Remember POG was hit end last week and this monday & Tuesday. The trade bought over 19,600 futures and options. Wed-Fri POG was up $20 low to high. This week's (meaning Friday 5-11 report) will conclusively show if the trade bought these 19,600 lots to resell under $700 or in defence of that number. This week a combination of big & little specs supplied their volume. I find $700 a key number and I think most would agree it's virtually virgin except once briefly last May.
IMHO, the stops will come out this week by the Treasury and all out war will occur. If stocks falter, POG goes with them (at least temporarily), the technically oversold USD$ will not just be given up as hegemony is the prize. A short but sharp USD$ could occur especially in face of the French elections on Sunday. If the Euro gets hit it will buoy the US$.
Frankly the USD$ is dying we all know it, but wounded tigers are dangerous. When that ocean liner is slowed then stopped the reversal will then be unchangeable no what the artificial means.
Gold will first regain its inflation adjusted price(2,300+) and from there will travel at a minimum of 30x it's starting point of $275 reaching $6,000+. Michael K. it will be your time in the sun then and the real true addition you have made to the gold community will be recognized. Bless you gentlemen.
This a generational bull cycle, they can not be traded as a normal market. They become logrithmic and all counts,all vital points and targets are useless.I have a hand made chart of the 1974-80 POG bull( it is unfortunately linked only in an email). It has literally every single bullish chart pattern and formation.The gaps come unexpectedly and sell offs fade out and turn around. Limit days up make traders afraid to buy back in; yet it always seemed to work out ok to do.
I will be away until Thurs so I can not answer any replies if there are any.Regards/Peter

mikal(No Subject)#1547155/6/07; 07:51:05

Prudent Bear's Tice Says the Plunge Is Coming by Brett Arends, Mutual Funds Columnist | | Friday, May 4, 2007 10:40AM EST
MKDollar/Gold/Bulls/Bears#1547165/6/07; 09:03:22

Some experts offer the argument that the dollar is about to turn up and that gold naturally will turn down. First of all I'm not convinced that the dollar is about to start back up for reasons I've outlined here and elsewhere in detail. But even if it were to turn up against other currrencies, it might not turn up against gold.In a world where the chief objective of our primary trading partners is to match U.S. attempts to devalue with devaluations of their own, the dollar and gold could rise together.

Here's why:

Many of the old relationships (quid pro quos) are breaking down, and the one between the dollar and gold is among them. Just look at the performance of the euro as opposed to gold in the 2000s. Gold has outperformed the euro by far when measured in dollars. When some say the dollar is going to go up, I'm assuming they mean against other currencies and not goods and services. And if so, those that make the assumption must ascertain which -- and none of the chief currencies will allow much of an appreciation.

This is a case where technical indicators and old saws (like contrary opinion) can be misleading. The nation states, with the notable exception of the United States, have the power to devalue their currencies at will -- a power they exercise unabated and with impugnity. Global inflation is the result, and to close the circle, gold becomes an object of international interest to the holders of ALL currencies.

One man's opinion. . . .In the pyramid of currencies, gold sits atop, the dollar second and all others stretch out below. That is the contrary opinion the dollar bulls/gold bears should entertain. Gold's ascension to the top is recent (over the last five years). And that is the fact of modern economic life likely to dominate the contemporary investment portfolio globally for the forseeable future. In the end the value of any currency, or for that matter any portfolio, is determined by what it can buy TODAY as opposed to what it might buy TOMORROW. In a world where the underlying institutional movement is toward the debasement of all currencies, it is not a great leap of logic to go with the one detached from that process -- gold. And, increasingly, that is the way people around the world appear to be going.

By the way, when you see what the mining companies are doing these days in terms of retiring their hedges and what the central banks are doing in terms of holding onto their gold, it seems they agree with respect to gold's future demand.

Side point: Julian Phillips writes to tell us that Sarkozy has a history of being anti-gold despite opposition to sales from the French central bank. Look for France -- the current big seller -- to step up sales and the ECB to continue filling any gaps to meet the monthly 50 tonne requirement. At the same time, these constant references to "large" sales by the ECB should be put in perspective. The tonnages provided still fall short of tonnages required and that's on a stop-gap basis. The problem in the gold market on the instiutional level remains one of supply. If the ECB were to make twice, or three times, as much gold available, twice or three times as much would quickly disappear.

mikal(No Subject)#1547175/6/07; 09:12:46 Asia's real currency worries may be dollar - Reuters
Kyoto, Japan - Sunday, May 6, 2007 7:09 PM

R PowellTopaz#1547185/6/07; 09:13:59

Hello again.

From 154700, you opined that the function of gold has been negated. I haven't much to offer here as I see the "value" of gold as the same as the "function" of gold, exactly the same, namely as a convenient storage of wealth, nothing more (isn't that enough?). As such, fair market value (dollar terms) is quite simply whatever a buyer + seller agree to. This may vary from person to person, day to day, etc.

Again your words....
"Golds "present, here and now, in your face" value function has been usurped and reduced to the status of derived future paper Rich, when it(GOLD)clearly is not."

I guess we've beaten this one to death over the years. I maintain that arbitrage and/or any opportunity to profit simply by buying + reselling OR selling + then rebuying will bring forth those who will do so. This contains the "fair" market price of any item within a somewhat narrow range, maybe even occasionally hitting what some refer to as "intrinsic" value, which I have come to believe, can never be determined at any point in time (other than perhaps between two people at the moment of a sale). (G). I see this constantly in every item whose price is determined by the markets. And, yes, gold is a physical metal, not the market which is a means for price discovery + a means of connecting buyer + sellers.

Now I know you do not agree with this, choosing instead to believe there exists a great conspiracy to surpress the POG. I have pondered this but reject it as I don't see the POG as a greater threat to the purchasing power of the fiat buck than say, the price of oil, corn, houses, cars, Christmas trees or insurance. All fiat usually depreciates, especially when mismanaged (abused as budget deficits will do). But, the mere fact that the government even hold gold stores supports the great conspiracy theory. Though I do not agree, I can't refute your position.
happy weekend

R PowellSmiles45#1547195/6/07; 09:58:30

Your words here........

"The key is the amount of futures are not manipulated it is the price. This is accomplished by feeding off the momentum hedge funds and specs as hey trigger key chart points of support or reisitance. The commercials are aware which funds and what size positions they carry. They also are very familar with how and why they buy or sell.

The point in my post was this: the large specs have limited or finite capital, the govt sponsored bullion banks (trade, Cartel call what you like) have no such restrictions. There objective is to slow the rise of POG as they know they cannot stop it from rising. he COT boys buy time and make huge profit on trading, but in the last years from 2003 have suffered losses on their overall position.

The patterns of subterfuge remain with 11:30am raids on the market, low prits on the close and gunning stops at key chart points. There are many others which are more technical in nature and do not add to this discusion.
The PPT in SM doesn't dally by simply buying the DOW 30 they storm the options markets buying several key issue options. This creates a buying attitude in the general public of players."

Ist paragraph...of course, but all this is just short term market noise. We might add the positions of "long" only commodity funds as well. Options expiration, contract rolls, short covering, all factors of technical these determine the price of anything for any length of time? No! Supply and demand do. Fundamental factors trump technical trading over any reasonable length of time EVEN THOUGH most of daily volumne of trading is based on technically generated systems. The latest "hot" system is a computer generated "pattern" recognition. None of these, in the long term, disolves the order of supply + demand. There is always a spot market not connected to the futures. If corn were selling at $4.00/bushel in spot, and $3.00/bushel on paper, do you believe arbitragers would not buy corn enough to bring the price back toward spot's $4.00? Short term market noise is NOT stronger than supply + demand.

Second paragraph..You have assumed that the so-called commercial category of the COT is "government sponsored bullion banks". There are some true hedgers in that category, who offset risk by buying physical while selling paper. They do not seek to profit, just stabilize their raw material price. What is jeweler A buys silver for $15.00/ounce while jeweler B buys for $10.00/ounce. Which do you think will sell more jewelry? So, jeweler A buys at $15.00 + sells an equivalent amount on paper. When jeweler B buys at $10.00, jeweler A has a five dollar profit on his paper position to make up for buying physical at 15.00.
But, lets assume that bullion banks have been selling gold as you opine. I'd have to disagree that they've been losing since 2003. I'd say they have been losing since about year 2000. Are these guys still solvent?
As to your reference to the "COT boys", I'm not sure who you mean. Everyone invested is accounted for there, divided loosely into three categories.

Third paragraph....Most markets have a preopen price, open outcry opening, + then the daily pit session. The ICO + other electronic overnight markets are also changing daily price patterns. As to that 11:30 price swing, I'd check to see what time morning coffee break ends in New York (G).
The use of futures + options in the index numbers has many uses, not the least of which is a form of hedging stock positions. These numbers can be temporarily pushed into huge swings by market events and/or market "noise". Again, technical trading notwithstanding, I believe the upward pressure of buying is balance by the downward pressure of selling enough so that the "price" whether DOW or POG, is contained in a somewhat narrow range. Hey, who knows, maybe "intrinsic value" is also contained within that range. The carnival barkers on CNBC probably create more of a positive buying attitude than any workings of the market. It also comes out in the wash, every now + then.
happy weekend...!

KnallgoldBanks a charity#1547205/6/07; 10:43:19

If futures trading are a simple zero sum game,why did the banks invent it in the first place??
flow5Hyperinflation#1547215/6/07; 11:09:32

Summary and Conclusions

This article has examined the extent to which Eurodollar transactions can affect the U.S. money stock in two ways. First, regardless of the chosen definition of money, Eurodollar flows may affect the U.S. money stock indirectly through their impact on the portfolio composition of U.S. banks’ liabilities. Changes in this portfolio composition, whether due to Eurodollar flows or simply domestic asset shifts, may affect the money supply through differential reserve requirements.

Second, Eurodollar flows may affect foreign commercial bank demand deposits at U.S. banks. To the extent that these deposits serve as reserves for the Eurodollar system, they will vary directly with flows between the U.S. Eurodollar and the U.S. money markets. Because these deposits are excluded from the new definitions of money, but not from the old Ml definition, Eurodollar flows will affect the various transactions-based definitions differently.

Analysis based on the multiplier model indicated that old Ml would be slightly more sensitive to Eurodollar flows than either M1A or M1B. Since Eurodollar transactions have some impact on Since Eurodollar transactions have some impact on narrowly defined money, the question of whether such transactions impair the monetary authorities’ control of monetary aggregates merits investigation. The multiplier framework presented in this paper was used to examine systematically Euro-dollar-induced effects on the money stock. Based on estimates over the period for 1973-79 — a period of rapid growth in the Eurodollar market— Eurodollar flows were shown to have only minor effects on the U.S. money stock. This evidence warrants the conclusion that the Eurodollar market does not pose a serious threat to the ability of the Federal Reserve to control the money supply. ANATOL B. BALBACH and DAVID H. RESLER Eurodollars and the U.S. Money Supply

Reserve requirements are no longer binding.


R PowellSmiles45#1547225/6/07; 13:20:55

From post 154706...

"Back to my original point that these govt. sponsored and backed shorts will in all liklihood never be consumated except in FRN notes after failure to deliver the contracted. This unlimited financing affords the trade to sell without any current rebuying.
Again please accept my apologees for my mistyping on the last post./Peter"

As a broker you know that both contracts + options have a limited lifespan. You also understand contango, which roughly equates to the cost of carry. This might be storage costs in grains designated for future delivery but probably more closely relates to the interest charges that have to be paid to "hold" future metals' contracts. Anyway, as a broker, how well have the shorts done over the last seven years rolling their contracts forward? Every time they close the current contract (over the last seven years, probably at a huge loss) + buy a future month they are charged the difference (contango), plus commish!

As for settlement in dollars, of course yes, most all futures are settled as such. Other than miners who really has physical to deliver? Other than end users who will buy the physical? And yes, in any market the actual physical transactions are minute compared to total open interest. Without speculation, there is not enough liquidity. Speculation is the grease that lubes the markets so that the actual transactions of physical product CAN proceed at all times. If every farmer had to sell only physical at harvest, the price would always be so low at that time that there would not be any profitable food producers left. And there are open contracts for more grain than exists, just as is the case with silver.

I shouldn't worry about default as the markets are designed to settle with cash. This has been so for centuries, although, as with copper this last few years, short squeezes do happen + are a sight to behold...but still the market balances again with price rationing.

Don't worry about mistyping, your concepts + thoughts are being conveyed just fine. Thanks for the discussion!

R PowellKnallgold#1547235/6/07; 14:00:18

"If futures trading are a simple zero sum game,why did the banks invent it in the first place??"


They didn't. The beginnings of the futures markets were started by the Phoenicians.
Reference: "The Futures Game" Teweles and Jones

apollo's golden chariotSMILES45: COULD YOU EXPLAIN YOUR CALCULUS#1547245/6/07; 14:20:37

Smiles, your message 154173 detailed the direction and magnitude of gold prices. can you say anything about timing? can you please explain why 30 x the 275 low seems in your view the minimun upward move? TIA
smiles45R Powell (5/6/07; 13:20:55MT - msg#: 154722#1547255/6/07; 14:50:28

Hi Chris, I must make this quick as it is 4:30am & I catch a flight soon to visit a dr. What this discussion has been is a discussion about the basics & mechanics of futures trading. Issues of contango, backwardation, liquidity, hedging (long & short) are all givens. You & I know that.
What I have tried to convey has been the consistant uniform and guided downward pressure on gold by govt. Who benefits mostly from such trading? The printers of fiat currency.
Correct all these things are noise as you say and when economically wrong no one can change the ultimate direction of a market. That point I made several times.
My refernce to Cot boys is an interchangeable term for commercials, the trade or bullion banks which I know (not guess) collusively attempt to drive POG down to buy time or stall he inevitable, just a Paulson does when he travels to China endlessly or Rice on a political level in the mideast. Nothing is accomplished.
The bottom line question is when will POG really or finally take off on the upside. It is my thoughts and that is only a technical one that POG is first in for a surprise that will drive it lower than gold bugs think possible. Wher is that? maybe $635-$620. The alternative is a choppy market that will correct or even out technical indicators over time(3-4 months maybe).The final goal is $833-$865 this year by my counts (trad chating, P&F and Gann studies)
Getting back to my initial point about the markets ultimately settled in worthless FRN notes. You are right in saying most trades are settled in cash. I am not referring to those future expiration contracts. I referring to the contracts that are needed or wanted by speculators and users that can not be filled or in essence reniged on. This event takes place when the USD$ ultimately becomes unhinged.The fact that the govt can afford to sell violently now simply means they are aware of the worthlessness of their money and presents no risk to them.
So again enough of this discussion I feel govt HAS affected the markets greatly since 1999(2003? what was I thinking, LOL)an you believe that even if they are it doesnt really matter. So be it.Regards/Peter

smiles45apollo's golden chariot (5/6/07; 14:20:37MT - msg#: 154724)#1547265/6/07; 15:38:32

Apollo G S, The figure I mentioned was 25x $275=$6,875/oz Not $6,200 as I mentioned before. This is merely a very rough extrapolation from the previous bull market of $35 low going to $875 high = 25 not 30fold as mentioned bfeore from a different article. These figures are estimates only so do not fixate on any postulated highs from anyone. I was simply saying nickel, copper, lead etc registered 5x increase as of late, silver 3x and POG 1.66x fold. this hardly seems reasonable as gold is money and demand outstrips supply as in the base metals. Even an adjusted rated from 1980 USD$ would simply give a $2,300 reading to be at par today. Again these are all rough guesses. Other guesses include use of M3 figures money supply figures, National debt figures and or notional derivative values, but these are assumptions are all based figuring a return to a gold standard of some sort or percentage gold backing. I do not believe this is possible today with the values of present day economies. My fear is a cashless society. Where does one sell and for what currency does he convert to. Will govt windfall profit tax away our profit on PM miners or nationalize them and convert them to paper as in futures as I mentioned. I do not believe TPTBe will simply drop back and let maybe 1% of the populace enjoy PM profits while it is strapped for revenue. Confiscation I believe is not an issue, but it could be as pm purchases are recorded and filed with paper trails.Let's hope cmmon sense will eventually succeed over the hairbrain economics of today.Regards til Thurs/peter
Sierra MadreThere will be a "learning process", smiles45....#1547275/6/07; 18:02:10

When TSHTF, a lot of people in the US are going to have to learn some very tough lessons. The more "backward" nations of the world will provide some useful examples of how conduct will change.

Those who will "get ahead", that is, those who decide not to turn over their work, savings and property to officials of whatever stripe will certainly NOT be filling out forms!

Forget about the regimentation, the custom of following "Federal Law". Gold in the thousands means that Federal Law is now worth beans.

Don't worry about how you will sell your gold. You will find out in all good time, what to do and what not to do. You will find that filling out papers is not necessary, nor convenient. Don't worry about that, lots and lots of people will have things they want to sell to you, because -they want GOLD. That's called "sitting in the cat-bird seat".


mikal(No Subject)#1547285/6/07; 20:54:31

Opinion: Irrational exuberance in China by William Pesek
Bloomberg - May 5, 07

USAGOLD / Centennial Precious Metals, Inc.Inflation-adjusted prices give a starting hint at gold's potential...#1547295/7/07; 00:07:05">gold price potential
GoldiloxElemental Transmutation as an Energy Source#1547305/7/07; 04:58:14

A very interesting interview with Michael McDonnough of BetaVoltaic Energies on both the research and "accidental" discoveries around elemental transmutation and the potential for harnessing energy from the process.

i.e. One nuclear reactor firm found it was losing fuel, not to pilferers, but to transmutation.

This has great potential, not only in the area of reprocessing nuclear fuel, but also in the idea of "nuclear" batteries.

Then again, it also lends credence to the ancient alchemists' dreams of transmuting Mercury into Gold through controlled nuclear decay, without the need for a large nuclear reactor.

AdvocatusElemental Transmutation as an Energy Source#1547315/7/07; 06:57:29

Indeed, odd things have been discovered when it comes to nuclear transmutations. The mainstream theory cannot explain them. Cold fusion, for example, was supposedly debunked. In reality, the field of research never died and has turned up many surprising transmutation phenomena. The suppression is not surprising, given the trillions of dollars at stake in the energy industry.

See the link for an overview of the field. In at least one kind of experiment, the transmutations have yielded gold. Specifically, tungsten was turned into gold. It's modern-day alchemy.

TownCrierPlatinum ETFs Have Some Crying Foul#1547325/7/07; 07:05:26

(; 5/4/2007) -- here is a platinum cloud hanging over the precious metals market, and it may not have a silver lining.

London-based ETF Securities last week launched the Physical Platinum Fund, the first exchange-traded fund to invest in and accumulate the precious metal. And so far, it has attracted about $8 million worth of investment, equal to just over 6,000 ounces.

While that might not be a blistering pace, it's not too shabby either. But it does have some people concerned that it could be the beginning of the end of the platinum market.

Unlike gold or silver, platinum is not a metal used to accumulate wealth. Its utility is mainly in its industrial purposes, particularly in making car components.

If the platinum needed for catalytic converters and spark plugs starts being hoarded by ETF investors, automakers could end up feeling the pinch. And so could car buyers.

Anglo Platinum Ltd., the world's largest platinum producer, is opposed to the very idea of a platinum ETF. Last month, the company said it would not supply the metal to ETFs out of concerns that it would exacerbate already tight supplies and inflate prices.

^___(see whole article at url)___^

The full depth of this oddity is truly profound.


TownCrierOn responsible wealth accumulation (gold) versus socially unacceptible "hording"...#1547335/7/07; 07:17:20

My previous article, despite its several oddities providing ample fodder for further discussion, lends itself also especially well to one particular train of thought that I have previously addressed with a republication of some very keen insights elegantly stated long ago by John Locke.

Here they are again -- for the newcomers to the Forum.

There is a logical rationale in the choice of gold that runs deeper than many will ever fully appreciate.


CometoseCOT#1547345/7/07; 07:25:26

Commercials this week in
Silver were net long 5000 contracts

Copper were net short 1500 contracts

Gold were net short 600 contracts....

and the real GOLD was that one of my sons graduated from college this weekend ....

mikalThe dangerous, but "attractive" prostitute economy#1547355/7/07; 07:26:32

Trichet Says Some Investors May be Underpricing Risk by Gabi Thesing - Bloomberg - May 7, 2007
Familiar comments by Trichet and China's Zhou
on underpriced risks and premiums and on stock markets
heavily slathered with glossy and rosy forecasts.

riggsywelcome to ponzi world...#1547365/7/07; 08:36:06
Gandalf the WhiteCONGRATULATIONS Sir Cometose !#1547375/7/07; 09:59:27

THAT is real GOLD !

slingshotSilver and gold eagles#1547385/7/07; 10:04:19

A funny thought came to me last night and as I expect the POG/POS to rise, took a look at the mintage. It appears they are curtailing the amounts for 2007. I am waiting for the US MINT to stop production of each.

GoldiloxIs IBM Planning Huge Layoffs?#1547395/7/07; 10:44:12


It's a rumor floating around the Internet … and it sounds outrageous … however, in this age of globalization and outsourcing, it wouldn't surprise me. Although I've seen it in more than a few places, the start of the rumor was a Robert Cringley column at It certers around an IBM project called LEAN that, as the name sorta implies, is meant to turn the corporation into a lean, mean profit-making machine that will … short-term … be really good for the stock.


Workers? We don need no stinkin' workers!

Sierra MadreVery peculiar activity today...#1547405/7/07; 11:35:23

As we head into the close today, spot reported at the other site is $688.

But, the activity presents a very peculiar graph, really odd! Up, down, up, down etc since opening this morning. A jagged saw-like graph.

I have to remark on the graph because I have never seen such a close fight between sellers and buyers. The sellers, those who want to keep gold down - (Yes, I do believe that such sellers exist!) - must be very worried; they have thrown everything possible at the price, to break it. They don't want to risk it getting out of hand and evidently, they know it WILL NOT TAKE MUCH, at this point, for the price to get entirely out of hand.


slingshotGoldilox#1547415/7/07; 12:16:37

I went through a LEAN and have nothing to say good about it. Lots of flow charts and B.S. What looks good on paper does not always work on the assembly line. There will be plenty of people who know nothing about the job telling others how to do it. BIG PROMOTIONS and New positions.

GoldiloxMassive layoffs#1547425/7/07; 14:01:24

I went through a couple in my career. What surprised me was how many "HR" experts were there to tell me how to get another job. Those alone must have cost 100 worker salaries, and the only job they really knew how to get was telling other people how to get one. They knew nothing about the requirements and benchmarks of engineering that actually impress anyone looking for an engineer.
TopazGold:DX#1547435/7/07; 14:08:52

Despite a bit of give and take from Buck today, PoG chose to mimic Bond action again which is consistent with the "future" nature of PaperGold pricing during an off-delivery month.
Poor-mans Gold, Tonic, Balm and cure-all - Silver, should be acting a little more ornery though ...she will, EVENTUALLY!

USAGOLD Daily Market ReportPage Update!#1547445/7/07; 17:21:58">
The Daily Gold Market Report has been updated.

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

MONDAY Market Excerpts

May 7 (DowJones) -- Platinum futures set a record high in New York on Monday on fund buying on a day when global activity was lighter than usual due to a holiday in London, traders and analysts said.

Gold and silver ticked upward but held in narrow ranges, helped by the continuing softer tone in the U.S. dollar, traders said. With no trading or fixes in London, all of the activity was concentrated in New York and was thin, said Paul McLeod, vice president for precious metals at Commerzbank.

June gold rose 70 cents to $690.40 on the Comex division of Nymex.

"We were seeing a fairly quiet day with London closed. But the expectation for the metals this week is positive," said McLeod.

"We had a little quiet consolidation today but will see what happens the markets are fully back and operating tomorrow."

McLeod said the fundamentals are constructive, including the supply situation and recent news of de-hedging by producers.

"The investor community is seeing good technical signs," he said, but adding that a key will be whether spot gold can break above its recent highs near $694.

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

slingshotIs Gold Finally Ready?#1547455/7/07; 19:55:40

I know I am.

slingshotFlorida Gold Bugs Heads up on storm#1547465/7/07; 20:15:30

Pulled from drudge.

slingshotDerivatives#1547475/7/07; 20:27:05

Just keep popping up.

968Liquidity boom and looming crisis#1547485/8/07; 06:09:11


"Economic growth in the US slowed to 1.3% in the first quarter (Q1) of 2007, the worst performance in four years of an overextended debt bubble. Yet the Dow Jones Industrial Average (DJIA) rose to an all-time intra-day high of 13,284.53 to close at 13,264.62 last Friday, rising more than 1,000 points or 9% in the same period."

"The DJIA is now 82% higher than its low of 7,286.27 on October 9, 2002, during which US gross domestic product (GDP) grew only 38%."

"The 30% US market crash of 1987, in which investors lost 10% of 1987 GDP, was set off by the 1985 Plaza Accord to push down the Japanese yen with an aim of reducing the growing US trade deficit with Japan. The 1987 crash was followed 10 years later by the Asian financial crisis of July 2, 1997, with all Asian economies going broke, and some stock markets such as Thailand's losing 75% of their value, and Hong Kong having to raise its overnight deposit rate to 500%, trying to defend the fixed exchange rates of their currencies.

In South Korea, Daewoo Motors, facing bankruptcy, was forced to be taken over on the cheap by General Motors. In Indonesia, the Suharto government fell because of social instability arising from the financial crisis. A wave of deflation spread over all of Asia from which Japan, already in recession since 1987, has yet to fully recover two decades later. In the United States, the DJIA dropped 7.2% on October 27, 1997, and the New York Stock Exchange had to suspend trading briefly to break the free fall.

Now in 2007, a looming debt-driven financial crisis threatens to put an end to the decade-long liquidity boom that has been generated by the circular flow of trade deficits back into capital-account surpluses through the conduit of US dollar hegemony.

While the specific details of these recurring financial crises are not congruent, the fundamental causality is similar. Highly leveraged short-term borrowing of low-interest currencies was used to finance high-return long-term investments in high-interest currencies through "carry trade" and currency arbitrage, with projected future cash flow booked as current profit to push up share prices.

In all these cases, a point was reached where the scale tipped to reverse the irrational rise in asset prices beyond market fundamentals. Market analysts call such reversals "paradigm shifts". One such shift was a steady fall in the exchange value of the US dollar, the main reserve currency in international trade and finance, to cause a sudden market meltdown that quickly spread across national borders through contagion with selling in strong markets to try to save hopeless positions in distressed markets.

There are ominous signs that such a point is now again imminent, in fact overdue, in globalized markets around the world."


Absolutely worth a read !

Clink!@ Slingshot#1547495/8/07; 06:13:32

Thanks for the warning - it'll be smack overhead here on Friday according to that projection. Coming from an unusual direction, too. We could really use the rain here - the whole of the Tampa Bay area is covered today in smoke from the fires in Georgia that have been burning for at least three weeks now, as I recall. My morning commute takes me directly towards the sunrise - usually that's a real pain, but today I could look directly at the red orb even without sunglasses. It must be a heck of a lot worse where you are, Sir S, as you're at half the distance. Actually, that storm system is probably responsible for blowing the smoke south, come to think of it.
According to one of my colleagues who heard it on the radio (nothing like 1st hand news !!) there are only a couple of counties in the whole of Florida that aren't currently experiencing some sort of wildfire. It's gonna be a fun summer ....


Paper AvalancheYet Another All Time Closing Record#1547505/8/07; 06:24:06

We continue to break all of the old closing records from 1980. As of yesterday, POG closed above $675 for the 19th day this year. In 1980 it closed above $675 on eighteen occassions (and just ten times in 2006).

It's a whole new world and once POG $700 is comfortably in the rear view mirror (which will not be too much longer IMO), 1980 will appear to have been just a stepping stone in the long-term evolution of gold's new role as the ultimate store of wealth.


KiloPA - We have a long way to go.......#1547515/8/07; 07:24:23

Not to be contrary of your record high comments, but if we figure in the "real numbers"......i.e. inflation factors since 1980, spreads, taxes, opportunity costs, etc., we are still a long way from any "record" levels in the PM markets. But that can be a good thing, as it provides an even better basis for real (and real time) profits, at least if you are keeping tabs in terms of dollars.



Federal_ReservesHousehold Labor Results#1547525/8/07; 14:07:17

Last month, according to the Labor Survey Household Results the country lost nearly 468,000 jobs and the size of the workforce shrank by nearly 392,000 people. A staggering poor performance.

The Establishment survey said we gained 88,000 jobs but that was the worst performance in a long time.

mikalMaking fortune in cookies?#1547535/8/07; 16:47:19

Chinese investors shrug off ‘bubble’ fears
By Jamil Anderlini in Hong Kong and Richard McGregor in Beijing
Published: May 8 2007 17:43 | Last updated: May 8 2007 17:43
"China's stock market brushed off a central bank warning about the danger of an asset bubble on Tuesday and rose to another record high in a sign of the government's waning ability to control share prices.
At least three state-run newspapers ran prominent stories about the warning from Zhou Xiaochuan, governor of the People's Bank of China, in Basle on Sunday. When Mr Zhou was asked if he was worried about a bubble forming in the stock market, he said he was...

In the current bull market, however, with new stock trading accounts being opened at the rate of more than 1m a week, the admonitions of senior officials suddenly seem impotent.
"No one believes [Mr Zhou] can do anything to affect the market," said Fraser Howie, the author of a book on Chinese stocks. "There are a lot of gamblers with a whole pile of money who are prepared to continue punting."
The Shanghai composite index rose by 130 per cent last year, and is up by just 50 per cent so far in 2007."

mikalOgling "the juggernaut"#1547545/8/07; 17:26:20

Walls of money poised, but beware the juggernaut
By Tom Stevenson
Last Updated: 1:31am BST 08/05/2007
"History may tell us to sell in May and go away but the unmistakable whiff of testosterone in the City and Canary Wharf argues otherwise. This is a time to be sitting in the passenger seat of the merger juggernaut not standing in front of it.
Rarely can a week have begun with such anticipation. Last Friday's extraordinary catalogue of deals, mooted and actual, has altered the focus of the debate. It is no longer "why" or "how" but "who's next?".

If that sounds ominous, it assuredly is. Surges in animal spirits like this end not with a whimper but a bang. But the crash will come much further down the track than the pessimists fear. Momentum and money are powerful forces.
The numbers being bandied about are breathtaking but still tiny compared to the wall of money that is poised on the sidelines of the merger market...

The technological revolution, for which the boom was just a dress-rehearsal, is about more than just the media. As change accelerates, the progression from start-up to dominant force to next year's has-been becomes ever quicker for companies such as Microsoft and more frightening for management and shareholders alike.

This combination of fear and easily available money is a potent one. The prospect of a quick and affordable fix to imminent commercial eclipse is what lies behind much of today's feverish takeover activity. For the bankers preying on that anxiety, 2007 is certain to be a gloriously profitable year."

Clink!Negative interest rate#1547555/8/07; 17:27:34

This was mentioned at the Cafe this evening. The 1 month silver interest is now standing at -0.01%. THAT IS NOT A TYPO - IT REALLY IS NEGATIVE !!!

devil's advocatereality check for you silver lovers#1547565/8/07; 17:56:06

Gold is perceived as "worth its weight in gold" by all, especially in trying times.
But silver is ignored by (almost) all.

-I recognize that silver has risen more than gold in the past couple of years BUT the reason SILVER will crash in a crisis is because demand from jewelers and industry will crash and (almost) NO ONE BUT YOU CARES

I have read through this blog's archives and observe that most of you are in love with the fantasy of the BIG CRISIS shooting silver to the stars. Feel like spitting on your computer screen at me so far? You don't like to be separated from your groupthink fantasy.

I observe your second fantasy is that we have a silver shortage. Why has silver gone from $4 up to $13plus?
Maybe demand for silver jewelry increased enough to push up the price and the supply is tight? I am not sure;
India bought 13% less silver for jewelry last year.
China bought more silver to finish and export. How much did this push up silver? -Did worldwide silver jewelry increase? -by how much?

Two silver producers - Pan American and Silver Standard- have about TWO BILLION ounces of silver resource. There is no shortage in sight.
I don't see enough hard data in your archive. This is why I name your belief a wish or fantasy.

Best Regards

TownCrierd's a . . .#1547575/8/07; 18:21:57

I'm a bit puzzled as I ponder over your intended audience. This is, by and large, a GOLD discussion forum.

To be sure, a cross-section of ANY group will contain representatives of all stripes and colors, and this group is certainly populated with a very small minority who from time to time proselytize from their silver soapboxes, but for the most part our discussions tend toward examinations of the likely fate of the dollar and associated countermeasures. To that end, gold dominates the discussion due to its position in both the personal and international gameplan. Silver, as you've likely observed, isn't even in the game on the international scene.


USAGOLD Daily Market ReportPage Update!#1547585/8/07; 18:47:39">
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.

TUESDAY Market Excerpts

May 8 (MarketWatch) -- Gold futures fell Tuesday, marking their first loss in four sessions, as traders opted for caution before the Federal Reserve's decision on interest rates tomorrow.

The COMEX June contract closed down $3.00 at $687.40.

"With the U.S. dollar rebounding from support and gold not capable of adding onto last week's momentum while trading just below a major breakout level, nervous traders booked profits, and thus the pullback," said Peter Spina, an analyst at

It's "nothing major -- just more testing of the resistance," he said. And "one of them will result in a breakout, which will bring in waves of buying."

For now, "we will see the market bounce around under $700 until it finds the momentum to take out the barrier above," he said.

The Federal Reserve is meeting on Wednesday, and though it is widely expected to keep the target on overnight rates at 5.25%, there is some question as to whether the accompanying policy statement will be changed. For now, "the gold price continues to battle resistance in the $690 area," said Julian Phillips, an analyst at

Still, "the bottoms of the gold price are getting higher, while the tops were getting higher too," he said in e-mailed comments.

"The big battle comes when the lows are high enough to take on the resistance at just below $700. When the assault on higher levels comes is impossible to define, currently."

"While the rebound at the end of last week has left gold in a more positive mood, the metal still has to clear significant chart resistance at $694 before $700 can be challenged," said James Moore, analyst at "While we remain bullish, we do expect further institutional sales that could potentially cause another stalled rally and trigger a larger correction," Moore said.

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

R PowellTownie // Devil's advocate#1547595/8/07; 18:57:37

Randy, I'm glad to see you do not differentiate between pro and anti silver posts. (G)

Devil's advocate, silver consumption by the jewelry market in the Western world (culture) is not large. But I might add that as gold becomes more + more expensive, some jewelry buyers may turn to silver as an alternative.

But, by and large, on a worldwide basis, most silver jewelry is purchased by Asians who do not consider jewelry to be a luxery but rather an investment or store of money, much the same as Westerners consider savings in bank accounts.

And yes, silver, as you mentioned is no longer $4.00/ounce but $13.00 plus. But I do know a guy who was a very enthusiastic buyer between $4-5.00, in both the physical + leveraged markets, just as there are goldbugs who bought when the POG was under $300.00. Neither has been a bad investment.

Finally, as to that figure of billions of silver ounces, how many are available right now to supply demand? Is the price of oil or copper low because there are billions of barrels of oil in the ground + billions of ounces of copper estimated as reserves? Why then did copper jump in price from well under a dollar to just under $4.00/ounce? When the world needs metals, and purchasing agents call for the metal, they are not satisfied with replies that their supplier has billions of ounces but they're still in the ground!!!!!

R PowellDevil's advocate#1547605/8/07; 19:13:14

Your words........

"I don't see enough hard data in your archive. This is why I name your belief a wish or fantasy."

Man, are you blind or have the archives been deleted? I'm not sure where you are looking but if you start about seven years ago and run through the daily posts, you'll find plenty of info. I'm sure there are many hundreds of pages with my name alone that offer facts as well as opinion on silver. There once was a good sized group of silver enthusiasts here, the daily forum archives contain probably thousands of posts concerning the metal of the moon. However, silver discussion is now discouraged and those past market analysts are gone. If your real purpose is to gain information, I believe it's just a matter of looking. Gold info is here too, although it is more centered on gold's role in the world's monetary system than it is on the gold "market". Good luck.

KiloI sometimes wonder.........#1547615/8/07; 20:07:33 silver "the poor man's gold", or the rich man's diversion of the masses ?


mikalHistory repeating on 'full-automatic'#1547625/9/07; 03:55:22

Contrarian gold-market analysis
Where are the gold bugs? | Mark Hulbert | Marketwatch

Speaking of "divergences", sudden, rapid reversals of "sentiment" go with the territory of financial "shock and awe" that in modern terms means that without Au bullion,
prepare to submit to "updated" technology and ponzi machinations and private/public profitmaking.

mikal(No Subject)#1547635/9/07; 04:11:42

Gold May Rise as Investment Funds Buy Back Metal, Silver Falls | Claudia Carpenter | Commodities
mikal(No Subject)#1547645/9/07; 04:26:44 Questions and Answers About Investing | Why is gold considered valuable? | | May 9, 2007

These two short paragraphs in the morning paper seem 'made to order' for readership 'on-the-run' and
looking for quick or unimposing news.

mikalCheaper by the dozen#1547655/9/07; 05:35:10 Don't Fool Yourself: It's a Cheap-Money Economy by Jim Jubak - MSN Money Markets Editor | Wednesday, May 9, 2007
Paper Avalanche@ Kilo#1547665/9/07; 05:46:19

Sir Kilo, I completely agree that the nominal price of gold is irrelevant when adjusted for inflation. Given that we both realize that it should be well above $2,000 / oz. to equate to the 1980 records, it is my opinion that there are two key factors that have TPTB pulling every stop to keep it at or below $700:

First, think back to 1980. Gold is skyrocketing past $800 and the dollar based IMS is threatened. Whoever sold however much gold was neccessary to arest the rise and reverse the course (money center banks JPM, GS et al?) probably had to borrow an untold number of tons to do so. A theory of mine (that has no evidence to support it) is that the gold that was borrowed in 1980 by these entities has never been paid back and that the borrowed gold still represents a liability of mammoth proportions to these institutions. I believe that these gold loans have been rolled over every month (or year) since 1980 at some rate of interest that was more desirable to pay than to release the dollar's grip on the POG. If you believe that, one must also realize / assume that in 1980 literally hundreds of tons of gold were borrowed and sold at $850 and then $840 and then $830 all the way down to where we are today. If this is the case, every step back up the POG ladder represents a substantial loss if not closed out. I believe that most of these positions are too big to close out at once and may actually threaten the institution if gold rises too quickly. However, this theory is also good news. The reason for this is that if true, there is only market resistence above the $850 level once these loans have been called / closed out and gold will likely go parabolic beyond that point.

Second, and assuming that my hypothesis is completely incorrect, the other main reason for keeping POG below $700 is that JSP (Joe Six Pack) can only comprehend nominal numbers (i.e. DOW 13,000 when in fact it has lost purchasing power against everything since it was last at 12,500 in 2000). TPTB know this and keeping POG sub $700 is as much about controlling market psychology as anything else.

I may be wrong. I often am.


KiloPA - Comprehension#1547675/9/07; 07:14:56

....."JSP (Joe Six Pack) can only comprehend nominal numbers ".....

I absolutely agree. And this is why "taxation by inflation" works so well.

"Yeah, everything is getting more expensive, but I'm making so much more money than I use to....." The classic wealth illusion of taking one step forward, two steps back while moving to and fro on a conveyor belt. The general public can never be allowed to fully comprehend where they are, which way they are going, or pemitted to have a steadfast basis in true wealth or value.

I'm convinced there is good reason why there are no true "economics" courses taught to our high-school aged kids. If they understood the money system at such a young age, they would be much less willing victims of it throughout their lifetimes.

Thanks for your thoughts, much appreciated.


Silver Foxdevil's advocate #: 154756#1547685/9/07; 08:09:11

"reality check for you silver lovers"

First, I appreciate you sincerity, but as one who is invested in both silver and gold, I don't love either.

Second, as an investor who is trying to secure the best returns and security for my fiat money, silver has been on a tear and has been out performing gold the last couple of years.

Third, if you own silver, you can make change for gold. Try buying a loaf of bread with only gold. Silver is great for trading for the small essential stuff of life and making change for gold.

Fourth, with the forth coming collapse of the dollar, most economists that I respect expect silver to continue to outperform gold. However, they also expect silver to plunge in value much faster as we slide from a hyperinflationary economy into a deflationary economy. At that time, these gentlemen recommend switching bulk holdings of silver to gold because the anticipated drop in the value of gold will be far less that silver.

Fifth, since the world's economic house of cards could come down tomorrow due to a variety of reasons, you also better be holding gold today.

Finally, the two billion ounces of silver you mentioned under estimate the actual quantities of readily available for silver which I have heard is closer to 6 billion ounces. But that is still only one ounce of silver per person given today's population. And let's face it, people who own silver, own it in the thousands of ounces, and the rich own it in the millions of ounces. Therefore, even six billion ounces isn't really that much and significantly increasing the quantities of silver available by mining will take 3 to 7 years.

Prior to 2005, I didn't own any gold or silver, but times have changed and so has my investment outlook. Sadly, I missed the bottom for gold back in 2000. Sometime in the future I would imagine there will be a time when owning gold and silver will again only be for the occasional odd investor. But I think that time will be many years in the future.

Hope this helps.


riggsyhey silver fox...#1547695/9/07; 09:56:25

silver fox said "Fifth, since the world's economic house of cards could come down tomorrow due to a variety of reasons, you also better be holding gold today."

not so fast. the old buckerooney is still king.

Silver Foxriggsy #: 154769#1547705/9/07; 10:16:27

"the old buckerooney is still king"

True. But you are aware that the derivative market is now roughly ½ of a quadrillion dollars and if sub-prime/alt A start collapsing, where will the dollar be? There are half dozen different scenarios that could take down the dollar tomorrow. Improbable, yes, but possible and growing more probable day by day.

Now I do appreciate that the world's central banks, businesses and governments work in locked step together to prevent an "un-orderly" drop in the value of the dollar. Just look at the drop in the POG verses dollar index today, but shit still happens. The longer the dollar's devaluation is postponed, the bigger it's fall.

The "old buckerooney is still king", but it is very long in the tooth, and the dollar hegemony is coming to a close.


GoldiloxKingship#1547715/9/07; 10:28:59


Are you suggesting that one SHOULDN'T be holding gold?

That will take a lot more support than your quick remark adds to justify.

riggsystill learning...#1547725/9/07; 11:10:46

goldilox and silver fox, just trying to learn from others. remember when a man with experience meets a man with money, the man with experience gets the money and the man with money get some experience.
mikalSurprise! No change, all is well, you are feeling very sleepy...#1547735/9/07; 12:57:19

Warning: Reading the following "news" may cause drowsiness and impaired coordination in motor vehicles and around machinery:
Fed Keeps Rate at 5.25%, Says Inflation is 'Predominant' Risk | Bloomberg - May 9
Actually I've placed so much trust in these profiteering
Musketeers that I'd be panic-stricken had the dollar not got wind of an inflation-inspired rate increase. MY HEROES!

Federal_ReservesFED main concern in inflation?#1547745/9/07; 13:13:28

LOL! Then why are they expanding the money supply so fast - its up to 15% annualized last 4 weeks. If they are concerned about inflation they certainly aren't doing anything to correct the problem. In fact, quite the opposite.

Everyone on CNBS is commenting on how much liquidity is in the market driving up asset prices (stocks, bonds, commodities). The FED is a fraud - just a division of the NYSE global banks who plans to take over China. The FED is a lackey organization and takes instructions from the big boys in the towers.

Paper AvalancheAn Idea.......#1547755/9/07; 15:20:26

If you are looking for a paper savings vehicle (in case you run out of room for all of your gold) it may make more sense to invest your money in the forever stamps. They will be forever increasing in value and, if this most recent price increase in postage to take effect Monday is indicative of future rate hikes, you should enjoy 5%+ returns on your money depending on the frequency with which future rate hikes are implemented.

Food for thought.

I still think that the FOREVER stamp is indicative of the quickly approaching global inflation that will cause "all paper to burn" as presaged on the trail.


flow5Growth of Money Supply - MZM#1547765/9/07; 15:30:53

MZM just turned down on 4/16
Paper Avalanche@ flow....#1547775/9/07; 16:10:42

M3 appears to still be increasing around 12% annualized (see link)


Paper AvalancheMZM Rate of Change#1547785/9/07; 16:21:00

flow, here is the link to the St. Louis Fed's MZM numbers (not seasonally adjusted.

It appears that the rate of change in the YOY annual MZM supply has been increasing since May 2005 when it was at 0.764%. Per the March 2007 data, it is now increasing at a rate of 6.762% (as compared to the March 2006 supply of money in the system). It has been acclerating during that interval at a rate of about 0.27% per month even with four instances of the YOY change slowing relative to the prior month.

Is that waht happened last month? The ROC simply slowed down a bit? Do you have a link?


mikalCaught between a rock and hard placer#1547795/9/07; 17:04:33

After today's magic act, few will be content to see the same performance at the Fed's next OMC meeting.
How many will suspend judgement if the next act is stale, or wait to see? What will it take to chase them out of the theater if their 'tricks' are understood?
Dave Chapman sees some things coming which places not just the Fed between a rock and a hard place. Of course, because history tends to repeat like a full-auto these days, we could be overtaken by events before we could even say nine one one!

International Forecaster MidWeek Reading - Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
-- Posted Wednesday, 9 May 2007 | Excerpts:
US debt is at least $70 trillion, which is about six times GDP. That far exceeds debt levels seen in the Great Depression...

Inflation is already out of control and the lies of our government, the Fed, Wall Street, corporate America and our media are not fooling anyone. The only response is to create more money and credit and of course, the day will come when that is no longer possible...

As we said two years ago, stagflation is already in place, and the public is slowly awakening to it. They are starting to realize that inflation is killing them. Wages are falling far behind income and inflation and we are starting to see a modern day Weimar in Zimbabwe. Zim is just the beginning. There are lots of Zimbabwe's in our future.
Generally speaking Asia is no longer buying US Treasury debt. If this continues, and it may well do so, the result could be massive US liquidity problems. We believe diversification has already begun into energy, other commodities, and other currencies such as the euro and in gold. Were it not for Middle East oil producers and hedge funds the dollar would be much lower in value if not in a Zimbabwe like scenario, which we do not discount in the future. You can just imagine what would happen if oil prices fell to $40 a barrel. The Middle East is a war zone and dollar and Treasury support from this sector could falter.

We saw a geopolitical shift in power in the early 1990s. At that time we wrote that if remedial action had been taken then with a deep recession the US monetary problem could have been managed. The elitists had other ideas. We are now at the point where the US can only stay financially alive by having perpetual war, which we also predicted in 2000. The one ace in the hole is tariffs on goods and services. It won't avoid a deep recession, but it could well stave off depression. Creditors know they have been cheating the US these many years by degrading their currencies or subsidizing their products. They realize, at least for the immediate future, they will have to suffer along with all other cheating exporters to the US. They will take 35% to 50% losses on dollar assets, but look at the market share and penetration they have made. The liquidity over the past six years has been supplied by the Fed, some other central banks; the yen and Swiss franc carry trades, derivative and hedge funds. Those exports keep on flowing because of this sea of liquidity. In addition, the world's savings have been used to prop up the US economy and financial system. When we first were introduced to computers and software in the early 1960s the saying was garbage in and garbage out. We are being lied to about monetary inflation. The nonsense we hear and read, especially from CNBC, is ridiculous. Debt is manageable, but excessive debt is a killer. We are told free trade and globalization is good for us as more than five million Americans lose their jobs. How dumb is that? We can understand why the public doesn't understand, they have never been trained in these matters, but business and Wall Street have no excuses. The Fed has turned the economy into a giant hedge fund."

Chapman continues the article very bullish on gold, short term and long. There is also good interventional analysis and some discussion of CB sales and COT's dwindling influence.

devil's advocatefact or fiction?#1547805/9/07; 18:17:48

Mikal mentions that Bob Chapman's "International Forecaster" says:
"Asia is no longer buying US Treasury debt."

I read through the passage-
What data/source does Bob have to substantiate this?
None is presented.

devil's advocategold or silver?#1547815/9/07; 18:41:32

Hello Silver Fox
Can you picture someone digging up his bags of coins and heavy bars to exchange them? (silver to gold or vice versa)
And digging to rebury his treasure?
His poor back.

Hyper-or de-flation: People get scared and run to gold.
If deflation:
75% of silver is a byproduct from base metal mines such as copper, zinc and lead. These would close down, drastically reducing silver production. Some silver would still be needed by industry and may actually rise in price,
since the drastically reduced production may not fill the reduced demand and the Central Banks may not wish to sell their


TownCrierFOMC statement for May 9, 2007#1547825/9/07; 18:42:35

Press Release:

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.

Economic growth slowed in the first part of this year and the adjustment in the housing sector is ongoing. Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters.

Core inflation remains somewhat elevated. Although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures.

In these circumstances, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected. Future policy adjustments will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Timothy F. Geithner, Vice Chairman; Thomas M. Hoenig; Donald L. Kohn; Randall S. Kroszner; Cathy E. Minehan; Frederic S. Mishkin; Michael H. Moskow; William Poole; and Kevin M. Warsh.

^___(from url)___^

Key phrase:

"the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."

Got gold?


USAGOLD Daily Market ReportPage Update!#1547835/9/07; 19:17:41">
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.

WEDNESDAY Market Excerpts

May 9 (MarketWatch) -- Gold futures closed lower Wednesday, as crude-oil prices plunged, dragging metals prices down along with them. Before the Federal Reserve announced that it kept rates on hold as expected, gold for June delivery ended down $4.90 at $682.50 on the New York Mercantile Exchange.

After the close of metals trading on Nymex, the Federal Reserve held short-term interest rates unchanged at 5.25% in line with market expectations.

In its policy statement, the Fed repeated the key statement that it could choose to move rates in either direction depending on the data even though inflation risks remain the paramount concern. The Fed made only a few changes from its March 21 statement. In a nod to the weak first-quarter growth rate, the Fed said growth had slowed, and adjustments in housing were ongoing.

"The latest Fed decision should have little or no impact on the secular bull market in gold past a few hours or days," said Peter Grandich, editor of the Grandich Letter.

"There's no way the Fed can raise rates, especially after they noted the housing decline is still 'on-going.' This means little help for the terminally ill U.S. dollar, other than short-covering rallies and profit-taking," Grandich said.

The Fed made no changes to its inflation outlook, saying that core inflation remains "somewhat elevated" and "although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures."

"With the Fed telling the market they are keeping a close eye on inflation caused by huge amount of liquidity in the system places them in a difficult position," said Peter Spina, analyst at

"A weakening economy and inflationary problems leave them with two options: sacrifice the dollar or the economy," Spina said.

"The market appears to agree that the US dollar will be a victim of the situation, which will result in taking gold to much higher levels."

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

Kilodevil's advocate ..................#1547845/9/07; 19:42:18

How many central banks are you aware of that hold silver in reserve ? Just curious.


Silver Foxdevil's advocate #: 154781#1547855/9/07; 22:29:55

Gold or silver?

Yes, a deflationary spiral would reduce the production of silver. However, as we are now in a hyperinflationary spiral, the reverse is true.

As for me, I prefer to own both. And yes, I can imagine someone exchanging one for the other. Long ago, silver was sold at a premium to gold. As usual, the only thing consistent is change.

It seems to me that you want to base your assessment on the manipulated values of silver for the last ~ 100 years. I tend to take a longer view.

My assessment is that POS has been much more manipulated into a lower value than the POG. (I suggest you watch the Money Masters). A result of this manipulation has resulted in a "more depressed" value of silver. A buying opportunity…

Another thing to think about when assessing the value of silver is that the dollar is defined in the Constitution as 371.25 grains of silver, not gold. Also, Jesus was sold out for 30 pieces of silver, not gold. The history of silver is long and strong.

But don't confuse me for a silver lover. I am just a simple investor who takes a long view and looks into the minutia.

To me, your denigration of silver is a reflection of ignorance. Sorry if that sounds cold. Clearly, your participation in this forum puts you above the majority. But I would recommend that you do more research before casting dispersions on those who believe in BOTH silver and gold.

One last piece of humor: the US government's strategic stockpile of silver, which was 3 billion ounces, IS GONE. That is, what the Constitution defines as money has been pissed away. Think about that.

Good luck to you sir.


otish mountain"An absurdity...Supported only by Faith"#1547865/9/07; 23:04:08

An interesting analysist on a recent artical published in the Foreign Affairs, the journal for the Council on Foreign Relations
otish mountainThe End of National Currency#1547875/9/07; 23:06:32

Here is the original article published in the Foreign Affairs journal
flow5MZM#1547885/10/07; 00:04:11

I was looking at a weekly graph (not monthly), & I used the custom graph (changed the date range to 1/1/2007 - present. It reflects a seasonal pattern.

flow5Stop-out down to 5.09#1547895/10/07; 00:24:44

Deal Date: Wednesday, May 09, 2007
Delivery Date: Wednesday, May 09, 2007
Maturity Date: Thursday, May 10, 2007
Type of Operation1: Repo
Settlement: Same Day
Term of Operation2: 1 Day
Operation Close Time: 09:40 AM

Results Amount ($B) Rate (%)
Collateral Type Submitted Accepted Stop-Out3 Weighted
Average4 High Low
Treasury 11.200




Agency 11.100




Mortgage-Backed 2.350




Total 24.650

smiles45Sierra Madre (5/6/07; 18:02:10MT - msg#: 154727)#1547905/10/07; 05:48:51

Quite right Sierra there will be black markets and barter systems popping up when then need arises in extreme depressions. In less severe, but prolonged recessions will make people sell their tools, clothes and even wedding rings if necessary. That is the picture of the ways were in the past.
The future presents all new problems due to technological advances n just the last 5 years. My post referred to extreme conditions that threaten us today. The city or large population centers in particular, but everyone ultimately. A cashless society that includes National ID Cards with all personal data( financial, travel, health, ethnicity, religion, race to name a few) and locatable RFIDS chips (now in nano versions complete with nano batteries certainly offers society much less choices.You an be tracked to your supermarket, barber,barbacues, bank, overseas, at a coindealer etc, etc.You name it they will be there. Look at London almost completely 100% on videeo and sound being added this year. Frankly, I wish I had so many secrets as the govts think I have,LOL
There are other obstacles which I will not burden everyone with now as I was looking for different approaches as to how our above avg intelligent forum will personally respon. A search to my original post other intusive methods here or on the horizon. A debate is not what I seek just common sense answers to difficult issues. Man can always choose to defy the law outright, but that is a desparate appraoch, IMHO. Regards/Peter A short snip I sent to my daughter in an email:

Lies, lies, lies! A single digital card for each individual without an alternative paper currency in circulation means total Big Brother control, dictatorship and slavery for everybody.
People will not be able to spend one single cent without the Merchant of Debt knowing where it was spent, for what it was spent and how much it amounted to. People will not be able any longer to buy gold, silver or foreign currencies freely, as the Merchant of Debt will keep such unpatriotic electronic transactions blocked on his computers in the national interest, his interest! People will not be able to do anything, travel anywhere, transact anything etc without the Merchant's consent. In the same way business will be allotted dedicated electronic financial channels for all transactions. Every action will be registered and controlled.
Sure, one might be allowed to sell gold and silver to a precious metal dealer, or foreign paper currency to a currency dealer, but what one will get in return will be fully controllable virtual digi-gold units. And once in the general digi-pool one's "money" will never be able to escape the pool anymore. And if one would ever try to buy gold or silver, or foreign exchange, then in all probability, one's digi-card will not allow the transaction under suspicion of money laundering, even terrorism.
Only on risky black markets at home or in off-shore financial countries one will still be able to transact freely, to make payments for goods and services or exchange gold, silver and foreign exchange. Electronic gold movements done from within the home country, using an out-of-the-country digital card, or through the web, will immediately be detected by automatic reporting by the search engines.
Taking gold, silver or foreign exchange over borders will become difficult in future when border detectors will become tuned to precious metals. Some foreign currencies do have already magnetic strips printed into the bills that show up under electronic scrutiny.
Still far away you might say? It is all there already! Just combine all the data from the banks, credit card companies, identity banks, medical and social security data banks, the FBI and CIA etc into one card and declare all paper money in circulation null and void and Big Brother will be ready to register you as a digitonian or "declassify" you as socially and financially dead!

devil's advocatelogic#1547915/10/07; 07:23:36

Hello Silver Fox
Silver and gold have risen together for the past couple of years - why?
The Silver Institute data shows the silver "deficit" shrinking from 310 million ounces (1996) down to 225 million ounces (2005).
The head of the Silver Institute told me that this deficit is covered by government selling. "Government"
(central banks) is manipulating the price of silver up.
They make sure to sell only enough to squeeze the supply to demand.
(ditto for gold)
Best Regards

Silver Foxdevil's advocate #: 154791#1547925/10/07; 08:01:44


Agree with you there. A quick look at today's dollar index indicates its movement up -- at the same time both the POG & POS are moving down. It seems to me that this is how the Corporatocracy folks push what smiles45 just referred to as a "single debit card". I believe that the real reason why we are told that gold and silver are "historical relics", over and over, is that they undermine the "sheep's" acceptance of this new "single debit card" agenda?

It must be working. A recent article indicated that only 1% of Americans own gold.

Stay healthy,


geEurope under US control - First Merkel, then Sarkozy#1547935/10/07; 09:01:20

Sarkozy is one of the few European politicians who were in favor of US attack on Iraq. Same is true for Merkel who even published a courageous article in the Washington Post in which she rejected the Chirac-Schröder doctrine of European independence, affirmed her gratitude and friendship for "America" and supported the war.

The Sarkozy Revolution: Five Recommendations for the New French President

The 4th recommendation from the Heritage foundation is basically a declaration that Euro should not be a petro-currency. Namely, "France should support U.S. and British calls for European Union countries to end their export guarantees for trade with Tehran and cease investment in the country. Iran derives 35 percent of its total imports from the European Union, and European exports to Iran are worth over 12 billion euros a year."

I am curious to know how this change was engineered? Did the gunboat diplomacy of US (thru its nuking threats) had any effect? What were the threats? What were the offers? What was the resulting deal?

Sierra Madresmiles45: Comments on your thoughts today...#1547945/10/07; 11:03:16

I notice that you sent your daughter a message with a very gloomy content. I wonder how she takes this gloom on your part. Don't take this as criticism, but - this is my feeling - young or younger people who have a longer path in life before them, desperately require some HOPE.

I do believe there is hope; there is always hope. This is not simply wishful thinking, I believe. For bad and anti-human policies produce bad effects which act to limit the extent of evil.

The powers that be, surely do have the most depraved intentions with respect to humanity at large. But, their evil intentions cannot produce success.

You paint a picture of totalitarian triumph of the financial caste over humanity. This triumph will not take place, in spite of all the technological instrumentation on which it rests.

For one thing, the technological enslavement of mankind will require enormous amounts of CAPITAL, which is currently being squandered; this orgy of squander will come up against a scarcity of real capital pretty soon now. All the "money" in the world cannot replace real capital. I see that journalists today talk about "capital flows" around the world. This is a fiction. Flows of fictitious money are not capital flows. Capital is always tangible - tools are always tangible. And, it will run out if not carefully conserved, which is not being done around the world.

Besides, technological enslavement through information on what everyone is doing, requires humans to analyze the information, and the information is too vast! Who is going to analyze the information and pass it on to the rulers?

The rulers themselves are confused by their own lies! They have become incapable of understanding what is going on. So, the totalitarian aims of the financial caste will end in great confusion and revolution, inevitably.

As long as things are relatively comfortable, people do not care to ask questions and just go with the flow and enjoy the day. But, when things get difficult the population of the US is going to get very, very feisty. Even those in charge of applying repression, will hesistate, for they will also be uncomfortable.

So, there is hope. Evil cannot achieve the triumph it desires. Human nature rebels!

Enough of my thoughts. Cheer up your daughter; tell it like it is, but - remember to point out that eventually, things will straighen out, because human nature is unchanging.


GoldiloxOT - Children of Men#1547955/10/07; 11:18:37

@ Silver Fox, Sierra Madre, Smiles45,

I rented "Children of Men" last night at the video store. While not addressing the financial issues of social collapse directly, it is a very interesting "Kubrick-esque" view of a planetary future that suffers social collapse. It reminded me of "Clockwork Orange", Stanley's own future statement, with a little MadMax mayhem built-in.

phil288Sierra Madre#1547965/10/07; 11:19:52

Thank you for a most refreshing and optimistic post.
Sierra MadreThoughts about Dollar UP, Gold DOWN.#1547975/10/07; 11:22:06


1. Dollar UP. you suppose there is a rash of debt liquidation taking place, which requires buying dollars to pay for the liquidation? Margin calls, maybe?

When a market begins to crash - and the Dow is down rather emphatically today - margin calls go out. Are they goin out now in any substantial quantity? I don't know, just asking.

When the economy turns down, and debt begins to hurt, there is an attempt to liquidate debt. SELLING of assets takes place, including the very best ones, like GOLD.

Those who are selling are hoping to save their hides. If there is a really huge downturn, in HINDSIGHT, they would later say to themselveves, "Why did I sell my best assets in a useless attempt to stabilize my ship? It was going to go down anyway, I SHOULD HAVE HELD ON TO MY BEST ASSETS."

So in a great general downturn, gold will first follow the stock market down.

Later, when the gravity of the situation is seen more clearly, FEAR sets in and those in paper assets will bail out and buy REAL assets, like gold. There will be little thought given to foreign stocks or foreign paper, for all will be falling rapidly - remember what happened a short time ago, when the Chinese market spread a stock market fall around the world. That was just a rehearsal of the real thing.

2. Gold down. Stock market weakness may be affecting gold - just my hunch. Of course, the Cartel takes advantage of the situation and hammers gold so that it does not look like a suitable refuge for those selling stocks.

3. Fed kept interest rates unchanged. This might be the signal, to those who realize the gravity of the Real Estate Bubble collapse, that there will be no lower interest rates to save the situation. This might have triggered the stock market retraction today?

For those in the fortunate situation of having some liquid funds, this is an excellent opportunity to buy some more physical gold, in my opinion.


flow5Financial Services Regulatory Relief Act of 2006#1547985/10/07; 11:31:06

In contradistinction to the conventional wisdom, the FOMC creates "FREE' legal reserves through their open market operations. That is, from a systems context, legal reserves are not "sterile" nor a "tax", and not a "regulatory burden", as the American Banker's Association, the Fed's research staff, or Congress maintain. It is the relationship between free legal reserves and the money multiplier that determines the volume of commercial bank credit, not the liabilities of the commercial banks – not their deposits. The commercial banks could continue to lend even if the public ceased to save altogether.

In order to make commercial banks more competitive and efficient, Congressional objectives, e.g, (1) to reduce the costs and increase the profits of the commercial banks, and internationally, (2) to reduce the cost of capital relative to both the LIBOR rate (London Inter-bank Offered Rate), or a Lombard rate (discount window operations of other countries); then Congress should eliminate time deposit banking from the structure of our commercial banking system. This would benefit all parties, commercial banks, financial intermediaries, and depositors.

Instead, we've been regressing. What should Congress do? Congress should repeal both (1) the payment of interest by the Federal Reserve to the commercial banks, and (2) prohibit the payment of interest by the banks on its deposits or to its customers. This would facilitate the orderly flow of savings into investment, a lower rate of inflation, and a higher rate of growth in real gdp.

In the legislator's parlance, the banking sector is not in "competition to attract liquid funds with non-bank institutions and direct market investments made by businesses". Contrary to the miscreants, financial innovations and reserve-avoidance measures, e.g., retail sweep programs, are effectively countered by the monetarists doctrine of uniform reserve ratios, on all deposits, in all commercial banks. That is, treat the commercial banks like the money creating institutions that they are, the purveyors of fractional reserve banking.

flow5Thoughts about Dollar UP, Gold DOWN.#1547995/10/07; 12:18:32

When the "trading desk" drains reserves and follows a "tight" monetary policy, the rise in prices slows, stops, or reverses, depending upon the degree and duration of its repo operations. The Fed is "tight", and we are going through a "seasonal" decline. Both factors influence the price of gold.
contrarianLies#1548005/10/07; 12:30:50

Sierra Madre--I loke your comment: "The rulers themselves are confused by their own lies!"

It's akin to the idea that the Monetary Masters will be ultimately destroyed by their own lies: the Frankenstein Monster of Liquidity created and unleashed by them will rear up its hideous hulk and annihilate them at the end of the day....hopefully sooner than you think.

devil's advocatereality#1548015/10/07; 14:27:41

- the way things are -
we have 7%plus real inflation in the usa

the main reason real estate is falling is that most
people can't afford their groceries, gas etc. and
their mortgages - it's not just subprime people

oil price is controlled by events out of
everyone's control in Nigeria, Iran etc.

OIL UP = INFLATION = GOLD UP(and silver)

day-to-day noise from the financial markets/
news networks is a game of fiction
run by "Money Masters"
dollar up, gold down
DOW breaks record



flow5The look forward#1548025/10/07; 14:34:01

It's mathematically impossible to miss domestic economic forecasts. So too, I imagine that someday I will learn how to predict the exchange value of the dollar. It's all about fundamentals.
Silver Foxflow5 #: 154802#1548035/10/07; 17:13:45

The look forward

I agree with your statement "It's all about fundamentals." In the long run, the fundamentals will run their course. Up and coming countries like China and India have growing industrial base, positive cash flow and huge reserves. The US has an eroding industrial base and high cost labor and a third world reserve. Manufacturing, not service industries are the generators of wealth. The US government has freely given away the manufacturing base and now we are the largest currency beggars in the world.

The US government, which is controlled by who? Frankly, I don't know who controls the US government. Certainly, it is not the US citizens. It takes a self-educated thinking person to realize that ALL of the media is lying to the general public on a massive scale.

The "sheep" know inflation isn't 3%, so they are nervous and fidgety, but are pacified with the latest electronic toys and dumbed down by "highly respected" pundits spewing bullshit lies on the TV every day.

In the international economics arena: major events are slow moving. Nixon(?) had the US default on its currency when it would not exchange gold bullion for dollars with France. And yet, here it is 37 years later and the dollar is still king. Admittedly weak, but still a dominate player.

I am confident that the dollar will collapse, but when… I am not so sure. Bob Chapman reviewed a recent Carlyle Group report that estimated the dollar's collapse in two to three years. Personally, I would thought it was going to collapse back in the late eighties.

But with recent events, I sure don't want to be stuck "holding" dollars when its foundation collapses. The speed that the collapse occurs in is expected to be fast. The Mogambo Guru estimated that the collapse of the dollar will only take ONE MONTH! And one month isn't time to do anything, other than watch the shocked faces of the people around you and batten down the hatches.


smiles45Sierra Madre (5/10/07; 11:03:16MT - msg#: 154794)#1548045/10/07; 17:39:29

Hi Sierra, I like your post for its positive approach. Do not worry about my daughter as she is no stranger to hard reality type situations having lost her mother to cancer at age 7 and her father contracting MS at age 11. She is a graduate student who made her own way in the US while I remained in a more comfortable climate in Asia.
Back to the subject at hand. I would love to be as certain of the future as you seem to be. The thing is having a Jewish father who escaped from Nazi Germany with his clothes and nothing else, I am naturally sensitive to govt controls. My father lost his entire family in concentrations camps except 1 fourth cousin whom he adopted.
With Pat Acts I & II, The Military Act (reversing the posse commitatus law), the canceling of Habeus Corpus (ala Guantanmo)and various other bills passed and pending. The latest bill HR1192 makes "even thoughts" about hate crimes a major crime punishable by prison & fines (1984 sound familar). Now govt. always installs laws as temporary and then use them forever (Income Tax is a prime example). What is the need for these freedom restricting laws or Treaties (North American Act,signed Mar 05, 2005) signed without any Congressional debate or input. If they are not to be used to their benefit then why push for them? There are other way to handle terrorists. Another bill pending is tagging with insertable RFIDS chips in patients with memory disorders (Alheimers,dementia, memory loss) which sounds OK, but is that freedom? Do the families not know their own relatives? This is a precursor bill that which will make implants first mandatory on patients and later under a similar "good reason" for new borns and Nat'l ID holders. Any bill is easily amended as a rider on any other bill and passed in the wee hours.
My point is to help put into perspective threats to our forum members to ponder and resolve for discussion here. It cannot simply be blueskyed away. I am an enlisted vet in Nam. I am no alarmist. I understand how govt works. I cannot accept just a simple "Oh that will never happen" or you are so negative rebuttal.
So I ask you friend Sierra (as you are one my favorite posters)to re-access my thoughts and try to give some answer to my queries about a cashless society at al.
PLEASE DON'T KILL THIS MESSENGER, LOL I survived war and MS already, LOL

contrarian10-Year Cycle#1548055/10/07; 18:01:39

Silver Fox
When will the collapse happen? Don't forget the good ole 10-year cycle.

"The 10-year cycle of financial crises
The historical pattern of a 10-year rhythm of cyclical financial crises looms as a menacing storm cloud over the financial markets.

The 30% US market crash of 1987, in which investors lost 10% of 1987 GDP, was set off by the 1985 Plaza Accord to push down the Japanese yen with an aim of reducing the growing US trade deficit with Japan. The 1987 crash was followed 10 years later by the Asian financial crisis of July 2, 1997, with all Asian economies going broke, and some stock markets such as Thailand's losing 75% of their value, and Hong Kong having to raise its overnight deposit rate to 500%, trying to defend the fixed exchange rates of their currencies.

In South Korea, Daewoo Motors, facing bankruptcy, was forced to be taken over on the cheap by General Motors. In Indonesia, the Suharto government fell because of social instability arising from the financial crisis. A wave of deflation spread over all of Asia from which Japan, already in recession since 1987, has yet to fully recover two decades later. In the United States, the DJIA dropped 7.2% on October 27, 1997, and the New York Stock Exchange had to suspend trading briefly to break the free fall.

Now in 2007, a looming debt-driven financial crisis threatens to put an end to the decade-long liquidity boom that has been generated by the circular flow of trade deficits back into capital-account surpluses through the conduit of US dollar hegemony.

While the specific details of these recurring financial crises are not congruent, the fundamental causality is similar. Highly leveraged short-term borrowing of low-interest currencies was used to finance high-return long-term investments in high-interest currencies through "carry trade" and currency arbitrage, with projected future cash flow booked as current profit to push up share prices.

In all these cases, a point was reached where the scale tipped to reverse the irrational rise in asset prices beyond market fundamentals. Market analysts call such reversals "paradigm shifts". One such shift was a steady fall in the exchange value of the US dollar, the main reserve currency in international trade and finance, to cause a sudden market meltdown that quickly spread across national borders through contagion with selling in strong markets to try to save hopeless positions in distressed markets.

There are ominous signs that such a point is now again imminent, in fact overdue, in globalized markets around the world.

Weak economic data
US GDP growth of 1.3% for Q1 2007 announced by the Commerce Department on April 27 was weaker by almost half than the 2.5% growth rate logged in the fourth quarter (Q4) of 2006. The main culprit was a housing slump caused by a meltdown in the subprime mortgage sector.

US home-building dropped by 17% on an annualized basis and is expected to worsen. That happened after investment in home-building was slashed at an even deeper 19.8% pace in Q4 2006. There are no signs that the housing slump has hit bottom, or that its adverse impact on the economy and the financial market has been fully felt globally.

Deprived of expanding wealth effect by falling home prices, US consumer spending was up only 0.3% in April on a 0.7% rise in personal income, while core inflation was muted. Consensus estimates had been for a 0.5% rise in spending on a 0.6% gain in income. Adjusted for inflation, consumer spending was actually 0.2% lower month on month, its biggest drop since September 2005, suggesting that without additional cash-out refinancing on rising home values, high energy prices might have finally dampened consumer willingness and ability to spend on non-energy purchases.

GDP measures the value of all goods and services produced in a domestic economy. It is considered by economists and policymakers to be the best overall barometer of economic health. US economic performance in Q1 2007 was weaker by 0.5 percentage point than even the forecast low expectation of 1.8%.

US Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson both made obligatorily optimistic statements denying the likelihood of a recession this year, even though former Fed chief Alan Greenspan has openly put the odds at one in three.

Even though the US economy slowed in Q1 2007, inflation pressure continues to complicate Fed policy deliberation. Core prices, excluding food and energy, rose at a rate of 2.2% in Q1 2007, up from a 1.8% pace in Q4 2006. Overall prices jumped by 3.4% in Q1 2007, compared with a 1.0% decline on an annualized basis in Q4 2006.

The Fed's dilemma
While Federal Reserve policymakers traditionally view inflation as the main danger to the economy, they optimistically predict that inflation will moderate as the US central bank stays with a tight monetary policy.

Since last June 29, the Federal Reserve has not moved the Fed Funds Rate target, the interest rate at which depository institutions lend balances to each other overnight. Before that, it had lifted rates 17 times at a "measured pace" of 25 basis points over a 36-month period, for a total 425 basis points to ward off inflation. The current Fed Funds Rate target is 5.25%, from a low of 1% set on June 25, 2003. Many economists and money-market participants predict that the Fed will continue to leave rates unchanged at its next meeting this Wednesday.

The Fed's stated goal is to cool an overheated economy sufficiently to keep inflation in check by raising short-term interest rates, but not so much as to provoke a recession. Yet in this age of finance and credit derivatives, the Fed's interest-rate policy no longer holds dictatorial command over the supply of liquidity in the economy. Virtual money created by structured finance has reduced all central banks to the status of mere players rather than key conductors of financial markets. The Fed now finds itself in a difficult position of being between a rock and a hard place, facing a liquidity boom that decouples rising equity markets from a slowing underlying economy that can easily turn toward stagflation, with slow growth accompanied by high inflation."


Silver Foxcontrarian #: 154805#1548065/10/07; 18:58:44

10-Year Cycle

I take your posting to mean you believe "the event" will occur this year. I don't know. Yes, the ten-year cycles are problematic, but they look like large corrections to me. However, a "collapse" of the dollar will result in a global depression, which is far more onerous than a dip in a ten-year cycle. More worrisome, the pundits are calling for this depression to be worse than the '29 event.

To avoid a collapse, I think all of the "players" will work together and pull out the stops to postpone the event. But the bullshit behind the fiat money economics is getting way wacko. GM is a great example.

GM only makes money by its finance arm, not from its car and truck building. Recently, GM warned of reduced profits due to its holdings of sub-primes. But since GM was forced to sell half of its finance arm to raise cash roughly a year ago, it isn't losing as much money. My problem is that GM is trying to make money from bullshit finance games instead of manufacturing. What a loser. But it is a sign of the times.

With inflation roughly at 10 to 12%, people are buying bonds and fixed rate mortgages at 6.5%. THIS STUFF IS CRAZY!!! Business as I understand it pretty much a thing of the past. When this balloon pops, watch out.


slingshotSir Smiles45#1548075/10/07; 19:05:47

Welcome home Vet.

smiles45devil's advocate (5/8/07; 17:56:06MT - msg#: 154756)#1548085/10/07; 19:06:20

Devil's Advocate some very good points you made vs silver buying in relationship to gold buying.
You are quite right that Central Banks do not use silver as reserves.
Steve despite what our Constitution says re: silver grains per dollar forget that as they have bastardized everything connected with real money. The institution of the Federal Reserve,Roosevelt's gold confiscation and elimination of silver certicates in 1960s nailed the lid on silver.
Again you make a good point about PAAS & SSRI and their giant reserves. I think SSRI will make a play for MFN and CDE(Couer will be bought out as well). Really the point here is silver ounces above ground and deliverable are not comparable due to many factores. Silver in the ground is not the same at all. SSRI is considered a silver land bank, Vista a gold land bank and PAAS a combination. When multi millions of ozs. are extracted ore and then are poured as dore then and only then can use those figues.
The POS is is the most manipulated market (IMHO) of all. They have many tricks to deliver and scams to make the hedge funds dump. However, Silver has a much greater potential than gold at this point in that just a reversion to the mean would mean either come in at modern 33:1 or the classical or historical 16:1(time tested thru the ages).
I believe Silver Fox made a point of silver's dwindling supplies. That is very true and new uses and applications are being developed everyday using not just silver but, gold, platinum and the rare earths (which China virtually controls R.E.s).
The important thing to realize the Cartel has enough warehoused silver to cover several months of silver delivers;however, similar to nickel and copper it is at the boiling point. You haven't seen the extent of those rallies yet.
Central Banks do not use Silver as a reserve, but China for centuries used only silver as coinage and the West (Venice, Dutch and English and mostly the Spanish made a killing on the arbitrage between China & Europe between the two metals). Point is it is believed China may have huge past supplies in coin form, but have not sold an ounce in many years. Central banks do not use any base metals as a reserve and silver is part money and part base in actuality. Do not minimize it's potential though as it switches from one mask to the other.
One last comment. Silver because it is used as an industrial metal, in medical, health, space, cell phones, appliances and computer technology is highly sensitive to recessionary periods. That is for sure as I have followed silver closely since the 1960s. The main difference now our US debt has reached massive inflation proportions with, IMHO, a hyperinflation (ala Weimar or Zimbabwe) to follow. Silver will thrive in such an environment as the poor man's gold and as an alternative to high POG prices.
The critical thing to remember it is not to be held like Gold. Gold IS MONEY, Gold is ANTI Inflation and GOLD IS THE ANTITHESIS OF DEBT. Therefore, if after hyperflation we experience a depression as predicted by Kondratiev enthusists you must be out of silver. My advice is to average a selling program into the final parabolic phase which will occur. The net results will be a decent overall average selling price. Though it is way too early for that discussion. Gold is NOT the same and should be treated totally differently (for a later discussion from people like Chris Powell or Michael Kosares our host). Regards/Peter

USAGOLD Daily Market ReportPage Update!#1548095/10/07; 19:08:52">
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THURSDAY Market Excerpts

May 10 (MarketWatch) -- Gold futures dropped more than $15 an ounce Thursday to close at their lowest level in seven weeks, as mixed U.S. economic data and comments from the European Central Bank chief helped push the U.S. dollar to a one-month high against the euro. The COMEX June contract closed down $15.50 at $667. That was the contract's lowest closing level since March 23 though during the session, it fell to $666, an intraday level not seen since April 2.

"If gold is suffering from anything at this juncture, it is from investor distraction with equities and, after repeated failures at well under $700, from a growing lack of confidence about gold's ability to leap higher at least until the summer comes to a close," said Kitco's analyst Jon Nadler.

The "dollar looks stronger today, [so] the funds are pressing gold down to support levels," said Julian Phillips, an analyst at Still, Phillips said that the "fundamentals remain solid for gold longer term".

"The dollar is fighting hard not to fall, despite a fundamental picture that says it should. Once it gives us clear direction, gold will react too," he said.

On Thursday, the European Central Bank left its interest rates at 3.75% and signaled a rate increase in June. Comments from ECB President Jean-Claude Trichet indicated "that maybe the ECB's tightening campaign is a little bit closer to the completion than people had thought, and that has caused some of the change-over in sentiment," said David Watt, senior currency strategist at RBC Capital Markets.

Against this backdrop, the dollar touched two-month peak against the yen and a one-month high vs. the euro.

Meanwhile, the Bank of England implemented its fourth rate rise since August, raising base rates by a quarter-point to 5.5%.

The Federal Reserve decided Wednesday to hold short-term interest rates steady [5.25%] and said nothing that indicates it is prepared to move interest rates anytime soon.

Phillips pointed out that the "impression given is that it will react to higher inflation but will not preempt it. [So] the dangers of inflation with falling growth [stagflation] are now apparent," he said in e-mailed comments.

"This is gold-positive and dollar-negative as the trade deficit will continue at excessive levels in a climate that could discourage the investment of surplus dollars [Asian nations in particular] back into the States."

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

smiles45slingshot (5/10/07; 19:05:47MT - msg#: 154807)#1548105/10/07; 19:13:26

Slingshot thanks guy for that comment. When I returned from there, we were considered dirt or wild animals. To this day I never talk of those dark days as people would never believe the facts. That is why I said to Sierra please don't kill the messenger, as I am very familar to peoples instant reactions. Regards/Peter BTW, I will never comment here on subjects I have only a partial understading of or complete details on, the ones I do comment on were actually lived thru in the last bull 1974-80./P
FlaccusMama said (Oh well - Down $15; tomorrow up $5 (?) then some tracking***and back again)#1548115/10/07; 19:17:02

Let's sing! Altogether now______________

Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
(Mama said, mama said)
I went walking the other day,
Everything was going fine,
I met a little boy named Billy Joe
And then I almost lost my mind
Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
My eyes are wide open
But all that I can see is,
chapel bells are callin for everyone but-a me
but I don't worry cause
Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
And then she said someone will look at me
like I'm looking at you one day,
then I might find
I don't want it any old way,
so I don't worry cause
Mama said there'll be days like this,
There'll be days like this Mama said
(Mama said, mama said)
Mama said there'll be days like this,
There'll be days like this my Mama said
Mama said, mama said
Hey! Don't you worry,
Mama said mama said
Hey! Don't you worry now.
Mama said mama said,
Hey! Hey!

- The Shirelles

slingshotGreat Day to be a Goldbug#1548125/10/07; 19:56:01

We are taking another beating behind the woodshed. Won't be the first and not going to be the last. Pirates I say! Speaking of Pirates, they liked both gold and silver and whatever else. The first rule. Take everything. Give nothing back. The second, He who falls behind ,gets left behind. So get you gold and silver and never give it back. Don't wait too long, you may get left behind.

Yo ho , Yo ho, a pirates life for me.

GOLD FINGERCould you survive on Social Security?#1548135/10/07; 20:28:41

The above title was used in a recent msn article. My answer to this is find your wealth now with gold slightly lower.

Save!! Save and SAVE!!

Add some and stash some. In a few years this will not only supplement your income, but might even be your income. I do not think the SS will be intact as we now know it.


While you can~

Down times are always a buying opportunity!
Give thanks to the universe for this chance.

Silver Foxslingshot #: 154812#1548145/10/07; 22:56:29

Great Day to be a Goldbug

Ay ay, my mate. Tis always a good day to be a gold bug. They push the gold down. They push the silver down. HAHAHAHAHA. Fools. Grab the silver, grab the gold, grab all. Time is running short. I laugh at my mates who listen to the sirens song. The sirens leave more for you and I. And when the ship sinks, ay, let's clank a tanker of ale and laugh at the fools.


smiles45slingshot (5/10/07; 19:56:01MT - msg#: 154812)#1548155/10/07; 23:45:21

Slingshot I am sure you know this, but some here may not. For any market to rally the fundamentals alone are simply not the total answer. Fundamentals may be that caused to you be interested and involved; yet fundamentals simply cannot be timed.
It requires important combinations of technical indicators that make a market ready to move higher. POG is not ready as the technical indicators are not in oversold condition and the shortsellers (weekly COT #s) have not flushed out the weak holders (hedge Funds)as yet.
We here are the real strong hands in gold, the risk takers, the people that take insults for being correct and most importantly we JUST don't scare out. The trading TA analysts and there are many,continue to trade in and out with moderate degrees of success. It is the savvy investor who demands wealth protection will never sell his physical bullion.
Bottomline we need corrections! bone rattling, blood curdling scary sell offs. They are but a hard Spring shower that renews the market. The sellers have sold out and the short need much higher prices to sell into again if ever.
It is then and only then, can we have the rally most here expect to $800+ and soon (months) over $1,000. This is when the Muny Funds and Pensions Funds have no stocks left to buy. Then the market just goes into perpetual motion. That really is wonderous sight to watch, we had a very brief hint of that type of rally last May to POG $730.
When this generational bull market finally kicks in we throw away indicators as stocks stay overbought for weeks and months at a time. Bullion stays firm never letting the short side breathe.
Sit back and don't watch the wiggles everday they are unimportant./Peter

MarkeTalkGold Price Selloff Was Engineered#1548165/10/07; 23:54:52

The last two days of gold action smelled of massive intervention by the Working Group on Capital Markets aka Plunge Promotion Team (my name for them when it concerns the gold market). So I made a few phone calls and it was confirmed by my trusted and confidential sources that this gold selloff was engineered from top to bottom. Then I took a look at the daily and weekly gold price charts. Voila! There it was on the weekly price chart. The gold price was driven down to the lower uptrend channel line, hitting around $665/oz. Score one goal for the Wall Stree team now that all of the speculators have been roundly trounced and given black eyes to boot, i.e lost profits and huge margin calls for speculators who trade on razor-thin margins.

So where do we go from here? Further down? I doubt it seriously. I would expect the gold price to surge at least $5/oz. tomorrow. In fact, one of the earlier posts alluded to this fact. Nothing, absolutely nothing has changed on the financial landscape with regard to the US spending itself into a financial black hole. There was news today Tony Blair is stepping down on June 27th and his heir apparent, Gordon Brown, will take over the reigns of power in Britain. The old timers who have been following this unfolding gold saga will remember Gordon Brown as the architect of Britain's selloff of its gold in the mid-1990s at firesale prices.

A final note here. I find it more than curious how the gold price was smashed almost precisely one year to the day in May 2006 when gold hit its highest price in 26 years! I find it also suspicious that gold is smashed at the same time some bad economic numbers were released today, causing the Dow Jones Industrial Average to drop more than 100 points. As the Hoople is wont to say, the authorities need to make gold look bad when everything else looks bad. Could this engineered selloff be the prelude to a hugh upside move, beginning now and extending into the end of the year?


TownCrierPicking bones#1548175/11/07; 01:41:04

smiles45, I spotted your recent comment:


Probably the single thing that most fascinates me about the discussions that occur here is whenever someone tries to pin down Money as if it were a simple yellow butterfly that could be so easily added to a collection of things under glass.

That is to say, while a definitive consensus view remains elusive on a majority of economic, poitical, and social topics within any given group, the ONE thing around here that seems to to enjoy almost universal acceptance here is the tenet that "gold is money".

However, (and this is where the fascination sets in), almost to a man, when these same people continue onward to expound upon the topic and visit the monetary realm from other more or less familiar angles of approach, to my eye the very foundation of their "gold is money" precept begins to quake.

Any etymological assessment will reveal to us that the ancestral root of the word-equivalent for gold (as representing yellow metal in speech or pen) by far predates the first ancestral occurrance of the branch of terms mankind fashioned to represent whatever it is exactly that the word "money" was fashioned to represent. Does that tell us anything -- or are we to assume that we simply got bored with the single sound ("gold") and wanted for the same thing yet Another sound ("muny") to help enliven our subsequent poetry?

But back to my point. You said "gold is the antithesis of debt".

I'm not really buying into this at face value. But just to be agreeable, I'll go with the flow. However, wouldn't this then imply the reverse: Debt is the antithesis of gold?

To my unsophisticated mind, debt is the antithesis of credit.

Or, to put it the other way around so as to see if it stands well to tests of symmetry: credit is the antithesis of debt.

Yes, I believe that works. And knowing that the rigorous social accounting of credits and debts came along well after the human discovery and naming of gold, even though gold could be among the many things possibly lent (credited) to someone who now walks under debt to that social affair, we, like society before us, should have no great difficulty recognizing that resulting credit/debt contract is itself now something distinct and apart from the original tangible. Hence the subsequent creation and usage of this young upstart word, "money". Money is essentially the social SYNTHESIS of the antithetical duo of credit and debt.

So now I ask you, gentle soul, does THAT sound like a very nice thing to say about gold -- to say that gold is money is to say that gold the synthesis of credit and debt?

I think not.

Having taken this one approach, let's see what would happen if we were to revisit your antithesis comment (remember, you said "gold is the antithesis of debt"). But this time, we will not examine it with regard to the debt part, but rather with the gold part.

Gold is the antithesis of ____WHAT___?

The only thing I can thing of to fill in the blank is "NOT gold".

Gold is the antithesis of NOT-gold.

Not gold??? Does that mean NO gold? i.e., Nothing? i.e. Poverty? Is that it? Poverty??? Gold is the antithesis of poverty?

Again, I'm not entirely convinced. I think we need to turn it around to give it the symmetry test...

Poverty is the antithesis of gold. (?)

Would we ever say that? I don't quite think so. I think the more appropriate antithetical pairing with "poverty" would be the word "wealth".

Poverty is the antithesis of wealth.
Wealth is the antithesis of poverty.

Yes, I think we have something there that works both ways.

But that brings us back to pondering the meaning of "NOT gold" or "NO gold".

Bringing this wide ranging ramble back to home, I think it is fair to say that "poverty" and "NO gold" were not interchangeable because "poverty" is the more absolute, an all-encompassing word meaning that you have not only NO GOLD, but you have little or nothing of EVERYthing else, too.

Therefore, "NO gold" (i.e., the thing that gold is the antithesis of) is essentially a SUBSET of poverty, right along with "no food", "no shelter", "no clothes", "no medicine", "no fuel", "no bagaining power", etc, and nothing of EVERYthing else.

Similarly, but on the other side of the equation, we can acknowledge that "wealth" as compared to "gold" is the more absolute, all-encompassing term of the two, by which gold is a SUBSET of wealth.

And finally, just to make this interesting, we could try comparing the debt/credit synthesis called "money" with the either of the antithetical duo of poverty and wealth, but the answer isn't very instructive, except insofar as it hammers home the point that money in and of itself can't be EQUATED with either povery or wealth, nor with either of their subsets.

Why? Because, remember, money is the SYNTHESIS of credit AND debt. Money is the contract by which you find that you can define yourself on one side or the other -- either as a creditor or a debtor -- neither one of which accurately determines whether you are in fact wealthy (well-provisioned) or poverty stricken.

If you don't believe me, then think back to Gilligan's Island. It wasn't his status as a millionaire creditor to his bank back home that made Mr. & Mrs. Thurston Howell III the wealthiest people on the island. What made them wealthiest (and only marginally so) on the island is that they were the best-provisioned -- they had packed the most stuff into their oversized luggage.

And also, just for a moment, image that Gilligan was in debt up to his eyeballs when he signed on for that fateful voyage. And yet, this monetary condition did not render him poverty stricken, because for years he was just as reasonably well-provisioned as the Skipper and the rest of the gang, living in modest wealth off of the fat of the land. However, had they all landed on a barren, arid island, even though the aforementioned monetary conditions remained as stated, they all become reduced to bitter poverty. Yes, including the Howells, because even a change of clothing for every occasion is not enough to overcome lack of food, water, shelter and fuel in such a social setting devoid even of markets/trade.

That last example actually ended up bringing us to a point that I hadn't intended to visit, but since we've been so neatly delivered to this doorstep, we shall cross the threshold in the interest of completeness.

We've covered how credit and debt are antithetical pairings for which money is the synthesis.

We've also covered how wealth (and subset gold) is antithetically paired with poverty (and subset "no gold"), but we haven't explicitly addressed the SYNTHESIS of this dialectical pair.

You can infer the answer from the exercise of considering the general state of wealth as experienced by inhabitants on Gilligan's tropical island as versus the univeral and ultimate poverty that would have been their fate upon a bare and rocky island. Have you worked it out?

It is the very LIFE that you have. Therefore, it is better to lean toward, to strive for the goodness of a well-provisioned (wealthy) life (including the subset gold, which in a pinch is a universally tradable item wherever markets exist) than to remain unprovisioned under a faulty assumption that even large quantities of credit/debt money can deliver you the antithesis of poverty and privation.

Wealth is the antithesis of poverty.
Gold is the antithesis of no gold.

Choose your actions in such a way to align your quality of LIFE on the more comfortably survivable side of that little truism. (A fancy way of saying that, once you've earned it, your mere money should be spent whereas gold, the heart of wealth, should be accumulated.)


GoldiloxCredit and Debt#1548185/11/07; 02:05:00

"To my unsophisticated mind, debt is the antithesis of credit.

Or, to put it the other way around so as to see if it stands well to tests of symmetry: credit is the antithesis of debt."

Not at all, IMHO. Credit and debt are but the opposite signatories of IOUs, both of whch represent "debt", which is the antithesis of completed transactions.

In a barter, golden or otherwise, the transaction is truly done when the two parties exchange their wares.

In a debt based system, a zillion forms of "accounting" and "registration" are necessary to track the IOUs that are never quite "satified". That is how the banksters justify their control over all transactions. They decree that all transactions be accountable in their "script", and maintain that gold is but a commodity, and NOT money. It also simplifies their "silent tax - inflation", as their "bought and paid for" political representatives tax devaluation as "capital gains", when at best it is really only "capital preservation" in a continually dying (by design) currency.

Get your RFID now and avoid the rush!

KnallgoldBack at 666#1548195/11/07; 02:08:08

-MarkeTalk,no,you don't wanna convince RichPowell theres a conspiracy to hold down POG? :-)

-As for the Silver discussions,I remember that one of the oldtimers,pandagold,said that Silver is Another tool to manipulate the Goldprice.In my view this is quite logic for historical and psychological reasons,Kilos post nailed it in one sentence:
"I sometimes wonder......... is silver "the poor man's gold", or the rich man's diversion of the masses ?
so indirectly,its still on the international scene,to disagree slightly with TC.But I agree with him that this is mainly a Gold site and we shouldn't fall into the subtle distraptions.

-M3 in the euro zone is now growing with 10%,still in a rising trend.(Got Gold?And there are still those who believe rising IR's reduce inflation)

-the cartel knows they have to deliver new highs in the Goldprice or else it would signal the end of paperGold as we know it.So you can be confident to see 700 broken soon,on the way to 850 and maybe 1000,we'll see where the pain gets too high for those holding losses.But as the air is very thin here,POG's volatility has to be reduced.Small steps upwards,with hefty corrections to cut mosts speculators hair.

-to back up my bullishness:just seen my uncle again,and he really said that he will buy some Gold!Though just as a diversification,but this is big news.He is a retired UBS banker,was big into derivatives,a hardcore capitalist,always laughing at my Gold convictions.These bankers had all their dose of brainwash,I have seen the pattern repeatedly.He just didn't know what to do with "Gold",it simply was the past for him.No use anymore and overpriced.

On one of our family lunches about 2 years ago,I finally tried to explain him the FreeGold concept,boy we talked the whole lunch about it!Finally he got it,meaning he could repeat it in clear sentences,though when we left he again said "I just don't know what to do with Gold".

Somehow a sting must have been left,keeping him thinking.He now seriously questions the current (american) capitalism, seeing it as something sick and devastating,even rasing doubts about "the system"!

I always knew he will be one of the last "getting it",but being blessed with a good nose,he usually got his positions in time.Yes,a big Gold rally must be imminent!

mikal(No Subject)#1548205/11/07; 04:43:03

Report: Bankseye pan-Euro debit card - | Reuters
Friday, May 11, 2007
New rules have been adopted for a single, "pan-euro", (euro wide) payments system according to this article.
The timetable of adoption "before 2010" for this "unified" system to be in effect can be anytime now.
But other matters may need to be settled before it's implimented, like using a euro-based debit card vs Mastercard's Maestro- the focus of this article.
Goldi, RFID technology is IMO, too easily defeated to ever become a tool for reliable human tracking, and the use of bank cards, cell phones and internet is more easily tracked.
But with gold, and assets like commodities, arts, craftwork, and our abilities and intellectual activities, we are thwarting and relentlessly diminishing totalitarian institutions, influences, and barriers.

smiles45TownCrier (5/11/07; 01:41:04MT - msg#: 154817)#1548215/11/07; 05:58:02

TC you are correct just by definition. I stretched the use of the term antithesis, as the antithesis of gold IS no gold.
As far a modern day credit and debt is concerned. The debt is always paid by either the debtor or the creditor (if he is not paid he stands the loss of that debt).As in China & the US eventually.
The other point is that what I call oldtime credit as in the country store had it limits, but today thru Fed machinations there exist no definitive limits. Derivatives by themselves are supposed to be contractual, yet no one can unwind them to their original sources.These uncleared and unchecked grossly overleveraged contracts contain a huge domino effect imbedded therein.
The Gilligan Island references are good as it refers back to barterlike conditions. Something I dread as I live in a 4th world nation posing as a 3 world country. Most experiences you mentioned: the poverty, lack of basic resources, medicines and clothing are here for me to see daily. That said the dollar even loses in exchange rates by some 18.8% in the last 12 months.I guess we have better paper, LOL
Correct Gold is wealth or better put the only wealth real protection.
TC, I enjoyed that short lesson in logic and here I thought my posts were mostly never even read,LOL/Peter

Black BladeYen Carry Trade? Strong Dollar? The Planets Are In Alignment? #1548225/11/07; 06:07:15

"The Yen Carry Trade Is Over". Yes, that is the excuse for the selloff of the precious metals over the last couple of days. That is of course absurd as Asian countries must weaken their currencies to gain the competitive edge because they are primarily export driven economies but under pressure from importing nations. They also must continue to buy US debt because they are so buried with it now as their reserve currency and that China must "devalue" the Yuan under political pressure. We are also back to the silly excuse that the Japanese Yen is an "important" currency when in reality it is an "impotent" currency. Besides, the relative strength of the US dollar against other weak currencies is nothing more than being used as an excuse to bring the price of precious metals under control and give the illusion that national currencies have some mystical power over commodities and hard assets.

The facts as we know them are quite clear. The precious metals markets are demand driven and supply is falling short. First, demand for the precious metals has not really backed off much other than some seasonal demand from India region ahead of the usual harvest, marriage and festival seasons. If anything, demand will pick up dramatically toward mid to late Summer and especially so later in the year depending on the quality of crop harvests in India this year.

However, the emerging middle classes in China are making up for the usual late Spring to early Summer lull with growing demand from this new growing source of buyers in an increasingly liberalized market. One other overlooked source is the strong buying of precious metals in the Middle East. Middle Eastern investment in the west has lost much of its alure for the big money in the Middle East amid growing concerns that the western economies are overheated and are due for a serious correction for a number of reasons (including the bursting of the real estate bubble, extreme consumer debt and the soaring twin deficits).

Add to this Gold and Silver production has declined dramatically over the last few years as most miners struggle to recover from gutting the heart of their ore reserves just to survive during the "mega-hedger" years. Now we see that the mega-hedgers are either bankrupt and gone, acquired by other producers or have been rapidly buying out their hedgebooks as they see higher prices going forward. Note that Barrick Gold is undoing the damage done by former CEO Randall Oliphant to finally take advantage of the higher Gold prices tha last several years and are now cleaning up the hedgebook from the now defunct Placer Dome Gold. Even AngloGold is trying to get that millstone off from around its neck.

This may just be another opportunity to add to physical metal positions. As always, get out of debt and stay out of debt, stash enough emergency cash for several months' household expenses, accumulate Gold and Silver "portfolio insurance", and start a storage program of nonperishable food and basic necessities.

- Black Blade

Black BladeGoldilox - "Children of Men"#1548235/11/07; 06:15:23

I had recommended that film here a few months ago. It really did not get much exposure in theatres but had good press. The Brits do make some good films. What they lack in special effects and American-style overacting, they make up for with believable acting and good though perhaps some far-fetched story lines. It is quite an interesting commentary on our societies amid the growing turmoil around the world and the drastic actions that could possibly be taken to combat percieved threats. I liked the film myself but I am sure it will continue to be overlooked. Glad you enjoyed it.

- Black Blade

slingshotRocks and Shoals#1548245/11/07; 07:04:37

I finally remember the nautical term for a solution when two people use brute force to settle their disagreement.
Bankers and goldbugs settling the POG.
Anyhow. The link below provides a contained image of the world and what the news does not cover.

Silver Foxslingshot #: 154824#1548255/11/07; 07:21:02

"Rocks and Shoals"

Sweet! This will be fun to play with. Thanks.


slingshotKnallgold#1548265/11/07; 08:16:05

Wow! An uncle who is a retired UBS banker. Don't know what to do with gold? That is the beauty of it. Like a fire extinguisher. Here is a good one when I buy tools. What do you need that for?, My wife would ask. Just in case, I would answer. Having the right tool for the job is a blessing. So it goes with gold. It's there when I need it. I think goldbugs are their own worst enemies. We torture ourselves with each drop in price eventhough the fundamentals tell us different. An unsure world indeed. Maybe because of our age we just see the changes or have gone through a major change in life. What do you do? You do the best you can. And when it all goes down you can say you DID SOMETHING.

MKMay 2007 Buyers' Group - The Vittorio Emanuele 20 lira #1548275/11/07; 08:44:05

Take a look at this!

A rare opportunity to land some of the elusive Vittorio Emanuelle 20 lira coins. And in uncirculated condition!!

We purchased these in a European estate and now pass them along to our distinguished clientele via our May Buyers' Group.

Yesterday was Day One in the offer and, with the price of gold dropping, reservations were brisk, including my personal commitment. We expect with today's retracement even more will be reserved.

These items, as is always the case, will be sold on a first-come, first-served basis. In our many years of handling pre-1933 European gold coins, this is the first time we have found ourselves able to offer more than a few of these coins to any single buyer, and even then, rarely in uncirculated condition.

You will not want to let this one go by. . . .

slingshotPOO#1548285/11/07; 08:45:16

Tell me about it.

slingshotChina to overtake US#1548295/11/07; 08:53:02

Good Read.

KiloOf Profits and Imports.........#1548305/11/07; 09:05:13

My first and obvious reaction to the news that Wal Mart profits are down........

"Poor China!"

(big grin)

Knallgoldslingshot#1548315/11/07; 09:07:19 I hope he will get his stash (if he really tries),could become Another surprise-I've heard some funny stories about availabilities of certain coins,not even a 1 kilo supply on stock there.Confirming recent posts by Michael and George about rising premiums and longer delivery times.Thats a litmus test for the health of the paper Gold market,if it still can deliver the physical needed on its dictated price.I could see a gradual,almost undetectable separation with slowly rising premiums,a scenario making the least noise and none having to decree default.Opposite to the sudden imlosion with fanfare which though can still come as a final.But it would buy the most time.
adminPulled Posts/political agenda posting#1548385/11/07; 10:54:31

Pulled posts should serve as fair warning.

Lexx -- this does not apply to you. Yours was pulled because it wouldn't have made sense standing alone. We do thank you for pointing out to some that we have strict rules about political posting.

devil's advocatequestion#1548395/11/07; 11:28:48

to simplify:

question: when the ship sinks, grab the gold and sink

P.S. smiles45: I also read your posts.

mikalHeadline rundown#1548405/11/07; 13:04:07

Ward Cleaver never had this much debt -
Equity derivatives volumes surge in Europe - Financial Times
Rating agencies could be liable for losses - FT
Summer gas supply concerns are driving up energy prices - Boston Globe
Mining merger frenzy to continue - Reuters
Tough times may be ahead for retailers, analysts say - CBS Marketwatch
Rate Increases Seen as Likely Across Europe - Wall Street Journal
China Trade Surplus Widens Ahead of Paulson Summit -Bloomberg
India's Production Growth Unexpectedly Accelerates - Bloomberg
Prudent Bear's Tice Says the Plunge Is Coming -
15 Reasons Stocks Should Be Falling -
Latest fleet of credit products yet to encounter a serious storm - Financial Times

USAGOLD Daily Market ReportPage Update!#1548415/11/07; 13:12:23">
The Daily Gold Market Report has been updated.

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

FRIDAY Market Excerpts

May 11 (Reuters) -- U.S. gold futures rebounded to finish higher amid heavy volume on Friday after the previous session's sharp sell-off, helped by a reversal of the dollar's strength against the euro and physical buying at lower prices. Traders said that they still expected gold prices to consolidate and to move higher despite the correction in the past several weeks.

The COMEX June contract settled up $5.30 at $672.30, after prices hit a five-week low on Thursday. It traded in a range from $666.30 to $674.30.

Andy Montano, a director at bullion dealer ScotiaMocatta, said that a bounce was seen in gold because of buying by bargain hunters. "Yesterday, we certainly had some liquidation seen on the back of a stronger dollar. And this morning the euro has recovered somewhat on the weaker U.S. PPI figures, and there was some fairly decent physical buying on the marketplace."

Montano said that Thursday's sell-off did not hurt gold's up-trend. "I don't see that this is a reversal of anything. We have some consolidation to do before we can go higher."

Deutsche Bank said in a research note that it was maintaining its bullish outlook on gold despite the recent price correction.

"We believe the U.S. interest rate and exchange rate environment will conspire to push the (spot) gold price toward $750 an ounce over the coming year," Deutsche Bank said.

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

mikal"In the current one-way market, all problems are overlooked -- and rationalized"#1548425/11/07; 13:17:10

15 Reasons Stocks Should Be Falling by Doug Kass - 05-11-07
Quick, entertaining piece could have been written by a goldbug...

Federal_ReservesNew Outsourcing Firm - for programmers#1548435/11/07; 13:23:01

Primate Programming Inc.

Very low rates with high skills

Might give China and India a run for the money!

mikalShort and sweet #1548445/11/07; 13:27:45

The Return of Long-Term Capital Management?
By Mark DeCambre - Senior Writer
5/11/2007 7:17 AM EDT -- Excerpts:
"Wall Street has a remarkably short memory when it comes to money-management disasters.
Upended a hedge fund? No problem. Had a hand in a blowup that led to a Federal Reserve bailout? No sweat. Put it on your vitae.
Given all the money sloshing around, investors seem almost eager these days to bankroll portfolio managers with less-than-stellar track records...

Rosenfeld isn't the only fund manager turning the scarlet letter of investment missteps into a badge of honor...

Created hard-to-parse special purpose entities and named them after characters from George Lucas' Star Wars trilogy? That just means you're an innovator...

"The abuses that we have seen with Amaranth and LTCM could occur again," says Steven Weddle, director of alternative investments at ING Investment Management in New York, "if effective risk management is not used throughout the entire investment process.""

mikal@Federal_Reserves#1548455/11/07; 13:46:08

Nearly ROFLMAO! These critters play for keeps and manage to keep the peace at the same time...
flow5PPI#1548465/11/07; 13:48:04

The PPI is up 4% y-o-y.
mikalSwinging with the "wild", pretending to be 'free'#1548485/11/07; 23:03:51 Shanghai 'Stir-Fry' Frenzy Could be Recipe for Disaster
Mark Kleinman in Hong Kong and Richard Spencer in Beijing
Business | Money | Telegraph | 05-12-07
Given the many risks to the world's economic status quo like trade friction, natural disaster, exploitative
and reckless corporate, bank and gov't policies, accelerated arms, debt, drugs and spin manufacture, world
asset bubbles, imbalances & distortions,
indoctrination via media, entertainment, schools and foundations, and ponzi and unregulated derivatives leveraged to the hilt,
this Telegraph piece merely scratches the surface.
But it was a doom and gloom orgy to me as it swung like the ("Federal_Reserve") great apes did today, between seriousness and burlesque, with quotes from Jim Rogers, Goldman Sachs and many others. Good, clean fun!
Now moonshots have become so routine, when it's gold's turn that'll be nothing out of the ordinary as apathy, denial and/or ignorance is so widespread with respect to gold among westerners.
But much credit goes to those who write these many scary Sino stories of late, illuminating some of the fragility that few care and even fewer, dare to glimpse, and which surely must be an incomplete portrait in this developing, communist country!

riggsyaint that the truth...#1548495/11/07; 23:18:02

If a man is after money, he's money mad; if he keeps it, he's a capitalist; if he spends it, he's a playboy; if he doesn't get it, he's a ne'er-do-well; if he doesn't try to get it, he lacks ambition. If he gets it without working for it; he's a parasite; and if he accumulates it after a life time of hard work, people call him a fool who never got anything out of life.
Vic Oliver

mikal(No Subject)#1548505/12/07; 00:20:21 Winter (Economic & Market) Watch » Asian Stirring (A Wall Street Examiner Financial Market Blog) - May 11, 07

This one contains useful news and opinions on Asian currency and interest rate shifts. In most cases they'd be accelerated, if predictions and rumors I've seen for earthquakes next week in the U.S. turn out true.

smiles45devil's advocate (5/11/07; 11:28:48MT - msg#: 154839)#1548515/12/07; 06:39:28

Thanks Steve that makes two you readers now,LOL
Goldilocks I tried my best to find you film "Children of Men", but as with most things here they never heard of it. I wonder if it's available on the Net somehow, I could charge it. I enjoy futuristic movies that are well made.
MarketTalk-GC I would love gold to just rocket as you have described.
The COT figures thru Tuesday released this Friday makes that scenario dubious. Monday and Tuesday POG was higher in the mid to upper $680's. During those days the commercials added 8,088 new shorts of futures and options. Their total net position is now 185,166 shorts (very high). This indicates they are not thru adding new short positions.
I mentioned in one post recently, I view any period over the $700 mark would be extremely damaging to the govt's desparate situation. The USD$ will almost certainly breakdown and test 80.30 if it goes that low. That is the boiling point and $700 POG could be the trigger.
The USD$ from a technical standpoint is oversold and will have a short rally to just over 83.25 area.I do not see it holding, but it could take weeks of slow trading.
POG made a spike rally on Friday as you mentioned GC off a tertciary uptrend line at $665 area. The important uptrend line is the secondary line which occurs at the $655 area.
While tracking the daily volume on Commex it was apparent huge sales between $645-$655 occured on this current rally and again thru $670-685. A penetration at $655 line brings into question the primary uptrend line at $612 area. I think that line is almost inviolate for several reasons. First, the 200 EMA resistance is at $641.11 coincidental with Fib 38.2% resistance at $639.71.
My Fib #'s use the June/06 low at $542.27 and the recent high of $697.50 (June Contract).
Second, the 300EMA resistance at $620.08 is also coincident with the 50% Fib # resistance at
$621.11. Being an 11 month rally the usual correction occurs near or on the 50%Fib# resistance.
In theory, the primary could be touched on an intra-day low with a strong closing.
Add to the mix a very middle of the road indicator picture technically (some short term indicators CCI, W%R are oversold, but that does not signal a turn). The long term indicators RSI, Aroons, ADX are still needing decent corrections
Therefore, I do not see a near tern (days) turn around here. The longer term charts (weekly and especially the monthly virtually call a giant rally coming and rather soon.
So as usual, I think we must hunker down and factor in a prior correction before a major rally.
This is a perfect buying opportunity if my projected numbers are even close.
BTW, I neglected to mention in my last post. Back in the 1970's you could buy British Soverign weight size coins (.1862pure?)at 2% above spot bullion cost. The same for all the Dutch, French, Italian, Uraguyan, Russian, Mexican & scads more. Some these coins were near 30% premium above spot and the proofs much higher. American Eagles carried a 20+% premium for circulated Liberty's and 25+% for the Saint Gaudens. Now is the time when the premiums are small to buy bullion and get a numismatic play for very little extra premium.

Chris PowellDisinformation about gold from The Globe and Mail#1548525/12/07; 07:22:24

9:15a ET Saturday, May 12, 2007

Dear Friend of GATA and Gold:

Toronto's Globe and Mail today provides an example of the worst of journalism -- a story full of attitudinizing mockery that contains hints of its own contradiction but carefully avoids pursuing them or even allowing its targets to speak for themselves, concluding with an anonymous attack.

Gold advocates, the Globe and Mail's story says, are "frustrated that not enough is going wrong" -- as if gold advocates are rooting for economic disaster rather than striving to prevent it.

The Globe and Mail's story continues: "Who needs a safe haven that pays no interest or dividends (which is why Warren Buffett never touches the stuff), actually costs money to hold, and has historically been outperformed by most other asset classes, including stocks, bonds, real estate, and art?" And yet for more than five years both gold and gold mining stocks have spectacularly outperformed those other asset classes.

"Meanwhile," the story says, "the occasional geopolitical hiccup is driving no one to the safety of gold." Yes, the huge volume of gold purchases made outside the West in recent years signifies only a fascination with jewelry among people who are not bothered at all by the nearly infinite profusion of what has been passing as the world's reserve currency.

The Globe and Mail's story twice briefly acknowledges central bank intervention in markets -- first the currency markets and then the gold market itself -- without awakening the writer's curiosity about why things may not be enfolding in the world economy quite as quickly as might have been expected.

And then there's the anonymous attack:

"As one gold debunker says: 'This lunatic fringe has been out there at least since the U.S. dollar went off the gold standard. I seriously doubt that we will be going into an environment where we are all walking around with leather purses filled with gold coins instead of a debit card.'"

But as much as hard-money advocates may like going into their secret places and running their gold and silver coins through their fingers like Scrooge McDuck, even THEY don't expect or hope to be walking around someday with heavy metal jangling in their pockets. For even the Council on Foreign Relations and the Financial Times, not usually denounced by the establishment media as being part of the "lunatic fringe," have acknowledged that the Internet and digital gold already are fully capable of assuming the role of international reserve currency:

In short, what the Globe and Mail published today about gold wasn't journalism but active disinformation. It's appended to give you an idea of the work that still needs to be done.

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

* * *

Eruptions of Doom Spew
Steadily from the Gold Bugs

By Brian Milner
The Globe and Mail, Toronto
Saturday, May 12, 2007

Gold bugs must be a frustrated lot these days, because not enough is going wrong. Inflation remains well under control; investors are still pouring money into equities; and the U.S. dollar stubbornly refuses to collapse despite crippling U.S. budget and trade deficits, rising interest rates in Europe, and the latest obvious signs that the U.S. economy is slowing.

Meanwhile, the occasional geopolitical hiccup is driving no one to the safety of gold. And the outlook for the global economy is so good that no less an authority than former Fed chairman Alan Greenspan says it will be healthy enough to offset a U.S. slowdown.

So it should come as no surprise that gold has weakened in recent weeks. If global conditions are relatively benign for investors, who needs a safe haven that pays no interest or dividends (which is why Warren Buffett never touches the stuff), actually costs money to hold, and has historically been outperformed by most other asset classes, including stocks, bonds, real estate and art?

While bullion has softened recently, it has been a stellar performer compared with the companies that dig it out of the ground. But that may be about to change. Gold equities finally appear on the upswing after months in the doldrums, buoyed by stronger quarterly earnings. This divergence between bullion and gold stocks has occurred before. "It goes through cycles. But it's now at a point where, statistically, this is getting into a buy territory, provided the bullion price is rising," one analyst said.

Before gaining $5.50 (U.S.) yesterday to climb back to $670.60 an ounce, the metal had fallen to its lowest level in more than a month. But those who think the gold faithful have lowered their lofty expectations don't realize what a hardy breed this is. True gold believers never lose their rock-solid faith that their beloved yellow metal will one day soar into the stratosphere, once investors realize that it is the best refuge in a lunatic world of imploding equity markets, profligate central banks, and collapsing paper currencies.

"The economic numbers today should have been enough to sink the U.S. dollar. But they didn't," said an obviously disappointed David Chapman, an investment adviser and technical strategist with Union Securities Ltd. He was referring to an unexpected drop in retail sales last month, coming on the heels of more bad trade news, as the U.S. deficit widened by 10.4 percent in March to $63.9-billion.

Central bank intervention has been shoring up the currency, but its slide is inevitable, particularly if Asian central banks add gold to reduce their huge exposure to the greenback. "The bottom line is that the dollar is going lower and gold is going up -- through $700 to $800 and eventually $1,000 and even higher."

Martin Murenbeeld, chief economist with the Dundee Group of Companies, has a more modest forecast, and indeed is neutral on gold's near-term prospects. But he too is bullish in the long run. "I'm fundamentally not optimistic about the U.S. dollar. And so I am somewhat fundamentally optimistic about gold prices."

Besides a weaker U.S. currency, he cites such other influences as continuing healthy demand for gold, particularly in Asia, relatively flat mine output, and no expected increases in central bank sales. His forecast calls for a baseline average for the year of about $675 to $680, with a 45-per-cent probability that it will reach $730. "

That doesn't even come close to fulfilling the dreams of the gold bugs, who are perpetually optimistic that their pessimistic view of the future will eventually prove accurate.

As one gold debunker says: "This lunatic fringe has been out there at least since the U.S. dollar went off the gold standard. I seriously doubt that we will be going into an environment where we are all walking around with leather purses filled with gold coins instead of a debit card."

devil's advocatequestion #1548535/12/07; 07:31:56

G8 meeting is scheduled for june 6-8 in germany
what if 300,000 violent protesters composed of leftist and islamic radicals "demonstrate" with guns and molotov coctails?

google "G8 2007 terror" and you can see they have big plans

Germany has an official list of radicals with 100,000+ names
(the NY Times right after 9/11 stated that Germany listed 73,000 known radicals- I would assume this number has grown
since then)


Paper Avalanche@ Chris Powell#1548545/12/07; 08:11:53

I really like the shill's comment "actually costs money to hold."

This is one of the most blatant disinformation pieces I have seen recently.

You can keep $100,000 of gold in a safe deposit box that will run you $50 / year (or in a secret place in teh house for free). I bet that the author of the letter probably has $100,000 in a mutual fund that charges him 75 basis points every twelve months as a management / 12b-1 fee ($750 / year) which is standard with all mutual funds.

$750 or $50? Hmmmmmmmm.......

Those who make their living collecting these fees probably paid for the article to be written.


Paper AvalancheThe cost of a mutual fund#1548555/12/07; 08:23:04

If you put away $10,000 a year for thirty years in a mutual fund that grows at an average annual rate of 6% and you pay an annual management / 12b-1 fee of 75 basis points you will have paid the mutual fund industry $67,252 over that thirty year span.

Let me reapeat... $67,252

Which asset costs money to hold???????

Shills annoy me. Going to mow the yard now.


flow5Bubbles & the Exchange Value of the Dollar#1548565/12/07; 08:39:51

The Prudent Bear is not unique. But he "ID" the problem & the consequences better than most.
Our belief is in "rolling bubbles." We've gone from one bubble to the next bubble. There was the telecom bubble...before the housing bubble in 1998-99. Then we moved to the mortgage-finance bubble...Now we've moved on to crazy credit in corporate-finance areas, lending for M&A finance, LBOs and stock buybacks...At some point we're not going to control our own destiny because foreigners will call the shots.

Declining exchange value of the dollar married to rise in gold - passe'

The U.S. trade deficit is inexorably forcing the dollar down in terms of its foreign exchange value--and no consortium of central bankers, treasury secretaries, et al., can stop the process.

Under these circumstances, we can expect a long term deterioration in the standard of living of the vast majority of the people in this country.

From these unwanted events we can expect a vicious level of stagflation that will become an enduring feature of our economic landscape. And the United States will be forced into a high degree of economic isolation and perhaps into an increasingly totalitarian mold.

mikalBanking on chocolate#1548575/12/07; 12:24:49

Makers Want Diluted Chocolate - Health Truth Revealed - 05-12-07
Hard times hit the food industry? Not as long as they can pass the buck using misleading labels to eat away at food values and stealthily reduce package weights.

Chris PowellManagement fees#1548585/12/07; 12:37:54

Paper Avalanche, wonderful point about the management fees of the conventional assets. As someone said long ago, gold doesn't pay interest because IT DOESN'T HAVE TO! It alone is immune to corruption, malfeasance, and debasement -- which is exactly why the central banks strive so to deny us a free market in gold. For a free market in gold will destroy all markets that are dishonest.
Silver FoxChris Powell #: 154852#1548595/12/07; 12:53:59

"Disinformation about gold from The Globe and Mail"

Good post Sir Powell. I think you can believe that all mainstream media outlets have their reports and opinions tempered by the spin masters of the Corporatocracy. One simple example outside of the gold arena clearly illuminates their bias.

The mainstream media reports the core inflation rate around 3%. Cost of living allowances (COLA) are based on this core rate of inflation. As you are probably aware, the actual annual inflation rate is estimated by a variety of economists between 9% and 12%. As a consequence of this difference is that the retired Americans, my mom, your dad, is getting their retirement pension purchasing power reduced from 6% to 9% each year. Extrapolate that out 5 years, and their standard of living has been reduced substantially. THIS IS NOT BEING REPORTED.

None of the main steam media publications, PBS, television, magazine, newspapers, etc. is reporting on this issue. Yet, it is having a HUGE IMPACT on the standard of living for millions of Americans. And let’s face it; this information is not rocket science. The writers and editors "know" what the heck is going on, but they are either muzzled or fired. So I don’t bother reading most papers or watch the TV news. Given it’s pathetic bias, I don’t want my thinking tainted with anything they express. I will admit to liking a few like Bill Moyers, Jon Stewart (humor), Jack Cafferty, and like.

When you talk to friends (sheep) about how bad the American press has become, they sometimes get mad and accuse you of always talking about the negative things. Although their passion is righteous and strong, their views reflect their Orwellian "brain washing". As such, they basically believe that black is white, good is bad, ignorance is knowledge, (torture is OK, pre-emptive wars are OK, the Bill of Rights is doesn’t apply to all, the constitution can be put on hold in a time of war, the dollar will be strong forever and the world has unlimited oil resources).

It is along this distorted thinking that it is also necessary to denigrate gold and silver as obsolete sources of financial security. THE SHEEP MUST NOT KNOW THEIR FINANCIAL SECURITY IS IN GRAVE DANGER OF EVAPORATING. Hell, most of it already is gone. The sheep just don’t know it yet.

Clearly, things are beginning to slip out of the Corporatocracy’s control. When the dollars collapse occurs, as members of this forum all know, you better be holding gold and silver and GUNS. The sheep will be angry and looking for revenge. And our future, as depicted in the "Children of Men", is ugly.


Silver FoxChris Powell #: 154858#1548605/12/07; 13:11:08

Management fees

"which is exactly why the central banks strive so to deny us a free market in gold."

I do disagree with you on this point. I believe that the privately owned central banks are manipulated by unseen, outside people who work very hard at remaining unknown.

Bernanke is just a puppet. What are the names of the actual owners of the US’s privately owned Federal Reserve? If you can find out, I’d like to know. I would also like to know their real goals. If it is the destruction of the US dollar, they have just about completed their task.

Anonymous decisions, made out of the public eye are usually never good for the public. The sheep now seem a little nervous as they wander the halls of Wal-Mart & Costco buying their little electronic toys. Mean while, China wanders the US buying and moving corporation after corporation to Asia. Ain’t life grand?


MineroSilver Fox: A pair of good posts.#1548615/12/07; 13:59:17

I just thought I would put in my two cents about oil. There is much talk about "Peak Oil" these days. This is one area where I feel that I can speak with some special insight. I worked more than 25 years as a Petroleum Geologist. I have studied the geology and production data from all the major oil producing areas of the U.S. I have also tried to stay familiar with foreign production and potential.

I feel that there is quite a bit of disinformation about the worlds oil supply situation. Much of the info is simply a lack of true knowledge about the subject. There seems to be quite a bit of bad info coming out of US Governmental agencies such as the US Geological Survey. I don't think their info is outright lies, they simply don't have people who have have been involved in the real world of exploration & production. Their methodoligy of calculating reserves is very flawed. As with most burocrats they live in a fantisy land.

The world has definatly passed "Peak Oil". The US peaked out over three decades ago. Finding a new oil field in the continental US is about like winning the Lottery. I really don't see Alaska as being much better. There are undoubtably a few fields yet to be discovered in the deep waters of the Gulf of Mexico, but the costs of exploration and production will be tremendous.

The Middle East and Russia have the bulk of the oil left. They are far less efficient at producing their oil than we were. The situation is not good!!

mikal(No Subject)#1548625/12/07; 14:11:06

F.O.M.C. – The Prospects for the U.S. Interest Rates and the $
By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - | Posted Friday, 11 May 2007

"Rising to $63.9 billion the Trade deficit continues at $ undermining levels and should continue to do so for the foreseeable future. As Paulson advocates a strong $ at market rates [a contradiction in terms?] the $ showed initial strength rising above the danger zone between $1.35 - $1.37. Media attention concentrated on it rising above last month’s level and not on the amazing accumulation of the deficit over the year, on top of previous years.
To emphasize what we are saying, imagine it were twice the present level, a level to cause global $ indigestion, what would be the consequences? Clearly, a tumbling $. So the reality is that the deficit will continue at these levels in the future, so for it to go on for twice as long, would result in the same damage to the $. In other words, at some point in the future the deficit just will not be accepted and the $ will crash.
Imagine now a bank’s customer loaned persistently from the bank with no hope of repaying the debt, what would happen? Now imagine this customer is the only client of that bank or several banks, what would happen? Quite frankly it is in the interests of all parties to ensure that the myth of a steady $ exchange rate [held there by intervention by surplus holders] will be blown away someday...

So the prognosis on the Trade front is not good and the $ should reflect this. We believe intervention is currently preventing this, but against strong flows of ‘carry trade’ investments and the investment of surplus $’ back into the States.
This leave the question begging, "Just how long will the U.S. or anyone else, allow this?""

AllanCBrian Milner Article in Globe and Mail#1548635/12/07; 15:26:20

This guy obviously needs to be slapped around a little, then put on stool in the corner of the classroom.

I responded to his baseless put down of gold with a letter to the Editor...I hope they print it.


Dear Mr Milner:

Terrible article. You don't seem to appreciate the fact that gold investors are a cautious bunch, and they have seen monetary debasement since the dawn of history. Do you really expect us to believe it's different this time...(famous last words). Believers in hard assets know that monetary inflation eventually leads to price inflation, and they protect themselves accordingly.

You also need to be informed that gold does'nt need to pay interest or dividends because it carries no risk. Does real estate pay interest? Do commodities? An economist would say, "no, but they have utility". I would say "Yes, exactly, and so does gold" But you obviously haven't seen that.

You prefer to quote Buffet whom you and many in financial circles rever as a god-like figure, but you should do your own homework instead of relying on someone else. Even Buffet would have found a utility in gold during the German Weimar inflation. To believe this will never happen again is not unlike sticking your head in the sand and hoping the problem will go away.

Next year when gold breaks a thousand, you will have some explaining to do, I'm sure.

Get real and don't knock it unless you understand it.

Chris PowellThere's a lot of money floating around with nothing to do#1548645/12/07; 16:44:29

If its owners had any sense, they'd buy something real, shiny, and yellow.

* * *

Wall of Money Chasing Exotic Hedge Funds

By James Mackintosh
Financial Times, London
Saturday, May 12, 2007

As hedge funds move into the mainstream, managers are testing demand for ever-more exotic investments -- and finding backers willing to stump up millions of dollars for funds putting cash into everything from football players, wine and art to aircraft leasing and carbon credits.

Some bizarre funds have attracted money in the past year, promising sponsors -- often big institutions such as pension funds -- that their returns will not move in line with shares, bonds, and other traditional investments.

"There is a wall of money chasing every opportunity in the alternative scene so you really want to be targeting new niches where you still have a scarcity of capital and inefficiencies that can be exploited," says Dan Gore, co-founder of Orthogonal Partners, which is launching a fund dedicated to investing in exotic hedge funds.

Those new niches are getting ever more obscure. A sectorial fund specialising in sugar is raising money, while art and wine funds are successfully raising millions of pounds.

But some of the once-exotic fringes of hedge funds are moving firmly into the acceptable middle ground for investors.

Hedge funds have become major backers of Hollywood through film finance, while portfolios of unpaid credit card debts have shot up in price thanks to the proliferation of funds investing in them and then hiring debt collection agencies to recover the money.

So many carbon credit trading desks have sprung up at hedge funds that Gordon Brown, chancellor, changed the tax rules this year to ease investments in the sector.

Banking, too, is being contested by a plethora of hedge funds moving into direct lending, with the most famous example being the loan given by Citadel, Perry Capital and Och-Ziff to Malcolm Glazer to buy Manchester United.

Still, many investment ideas remain odd, to say the least. A series of football funds have raised money to buy the rights to promising young players, betting that they can profit from transfer fees if the players are a success -- with investors having to assess risks such as injury or drug abuse, rather than the market falls or interest rate rises they are used to dealing with.

Tracy Pearson, head of alternatives at London fund of hedge funds Forsyth Partners, says it is questionable how many of the exotic funds are really hedged.

"If it is offshore and they can charge 2 [percent a year] and 20 [percent of profits], it is a hedge fund," she says. "We get all sorts of stuff, usually sent from a Yahoo e-mail account."

Forsyth, like other fund of funds, rejects most of the exotic appeals for money on the grounds that they are hard to value and illiquid.

Sabby Mionis, director of CM Advisers, a fund of hedge fund manager, says he will not invest in anything he does not understand. "We are financial people, we understand loans but we don't understand art," he says.

Peter Lunzer, director of the Wine Investment Fund, says: "In five years' time wine will come off the exotic list and be firmly on the low-risk, reasonable return list," he says.

UHOOreply: smiles45#1548675/12/07; 17:38:55

The following might help your search. It is from a Netflix dust cover

Children of Men

"Alfonso Cuaron directs this film version of P>D> Jame"s classic dystopian novel....." Universal Studios

smiles45Great Posts today#1548695/12/07; 18:01:16

I have rarely seen a day with more well directed infomation posting coupled with excellent and knowledgeable private evaluations.
I am not surprised at the media. It was that way back 40 years ago. The same surety in paper assets, the same drone that gold pays no interest(why should it?) and a strong feeling the govt. can pull us out of any negative economice situation.
The distinguishing difference in today's media is as posted truly Orwellian. The govt stats then seemed not to be tampered with as today.
The similarities are there none the less. A weak US$, huge M&A activity, the race for the tallest structure (then it was World Trade Center)and uncontrollable costs of war (Vietnam). There are others, but what separates this market with 1970s is our national debts of budget, balance of trade and future domestic obligations.
Oh and yes the average guy never heard of gold back then until it passed $500. The wake up # today maybe more like $1,000+, but rest assured the media will come in featuring gold just about the time the first rally is over as they did before./Peter

smiles45UHOO (5/12/07; 17:38:55MT - msg#: 154867)#1548705/12/07; 18:10:54

Thanks guy for the credits. I think my daughter can get in the US and get it to me./Peter
Who is this AT poster??? Whatever he is selling he sure did a poor job of advertising. He sounds like Everbank, a hedge fund and Fannie Mae all rolled into one,LOL
On second I really dont want to know!/Peter

Clink!Who is a t ?#1548715/12/07; 18:17:56

A future ex-poster.

adminClink#1548725/12/07; 18:56:05

You are very right and at is very gone.
OrcaBrian Milner - Globe and Mail article#1548735/12/07; 19:36:37

I too meant to comment on the Brian Milner comment in the Globe and Mail, but I see that AllenC beat me to it.

My comment: I doubt that Milner reads these posts but if I could say anything to Milner, it would be somethingg like ... if you had no angst about gold, why would you make the comments you did? I think you are whistling in the dark... hoping it will make the goblins go away!!

FlaccusMilner#1548745/12/07; 19:48:00

I ran his biography. He's a SPORTS reporter coverted to the business page -- not doubt to give some life to a drab page. Think about your favorite sports columnist writing about the value of the dollar, gold, the markets and so on. Got it?? In short - he's out of his league, and would be better served by sticking to the Toronto Maple Leafs (not of the gold variety).
mikalCentral Bank takes a back seat to Indian tradition#1548755/12/07; 21:01:23

Rising Prices Not Lessening Indians' Love of Gold | Anjana Pasricha - Voice of America News | May 12, 2007
Clink!@ Sir Admin#1548765/12/07; 21:06:38

I may be lousy at predicting future gold prices ( I think my best contest guess was more than $5 out, and that was when the price and volatility were much less than today ! ) but I'm pretty good at knowing when the Grim Reaper of Forbidden Posts is going to make his scythe felt !!!
Don't think your work is thankless.

smiles45I skipped an important point#1548775/12/07; 21:08:58

In my post concerning today's market in a comparison with the 1970's markets, I left an essential point.
There was a gold community back then, but only an informal collection of people questioning the soundness of the USD$. We were for the most part isolated from each other except for some rather good market letters. Richard Russell, Harry Brown, Jim Sinclair, Howard Ruff, James Dines, Canada's original silver bull Vern Meyer (also an energy & oil man), Ian McAverity and a few others (forgive me for leaving out anyone). Of the lot the European writer Dr. Harry Schultz
(who moved to Switzerland back then & his service was expensive) was for me the best all round. Some letters concentrated more on pm stocks, Dow stocks, others were slightly survivalist in approach, some concentrated on Silver or Gold.
My point is we did not have an open exchange between individuals as we have via the Internet today. We were steeped in our own thoughts and intupretations of what each statistic or world event would cause to POG. I traveled from NJ to Conntt back then just to see some friends charts and discuss events. The community was never large; yet gold reached intraday high of $875/oz and silver an intraday high of $52.50/oz
Today the community has communications and thanks to our hosts foresight a forum to utilize. Availabily of actual coins were only from coin stores with small inventories and never had the variety offered here at USAgold. I know I sound like a shill, but I assure you I am NOT.
My postings have always related to the previous bull market and my 40yrs of technical analysis. As I would imagine many posters have little or no knowledge of those days. Some posters for sure do, but what level I do not know.
Gauging from the level of intelligence most posts here I would not rank very high and I enjoy the feedback. What I do have is history that will guide me this time around (I am 62 so there will be no next time, LOL).
The purpose of this ramble is this. The sheer amount of US & European investors (early ones) seems to dwarf the old days bull market. In those years the populace of mid east, India and China had -0- money. What little demand existed from there were small amounts of traditional jewelry (The big demand came from Arabs Petro dollars which the US bought off with there hegemony scheme). Today, Brazil, Russia, India & China <BRIC> are booming with millions of new investors. Those govts amongst others are dedicated to bullion purchases and the Euro counties are slackening off sales.
Where will supply emanate from? In 1970 Switzerland was literally loaded with US $20 pieces, London with Sovereigns, Krueger Rands from S.A., Italy, France & others also filled the tremendous investor demand, but prices went 25x their starting values (from $35 to 875).
This time I see a vacuum forming. A scenario I call "airtime". When the available supply is so limited that coins could literally disappear overnight. As a long time commodity trader this is not an uncommon event. Almost all commodities have experienced these limit up prices due to small available supplies. I am sure any dealer worth his salt knows this.
That is why owning bullion NOW before the mainstream investors get in after them the public makes a mockery of paper traded markets (senseless at the market buying).Even bullion experiences much larger bid/offer ranges and some coins develop large premiums. Look there will always be sellers at some price so there will be trading at much higher levels.
The US can no longer get a Volker type Fed govenor to raise rates to the sky. When Volker raised rates then the USD$ demand surged for years. We had little or manageable debt then.
Today the numbers of debt are atronomical. For people to sell their bullion there must be a viable alternative. This generation has anchored itself to fiat based debt, created sensitive interest rate derivatives and can no longer raise rates without destroying our stock markets or the USD$ hegemony.
It maybe that this time bullion should NOT be sold despite the price rise until a true, legitimate and liquid alternative based on POG appears. Any responses to my last point are appreciated./Peter

Clink!Some things are more important than gold#1548785/12/07; 21:22:51

Tomorrow is Mother's Day in the USA (as if you could forget, unless you haven't been to a store since Valentine's Day !). Brushing aside the rampant and usually distasteful commercialism, the most valuable thing you can give is an acknowledgment of gratitude for all the sacrifices - particularly in time, which is without price - that she has made for you.
Gold may hold us in its thrall - a store of wealth for 5,000 years, no less - but we aren't here for that long. We can be fascinated by the timelessness of the value of the metal, but we also need to live in the present.
Just a thought.

Clink!@ Sir Smiles45#1548795/12/07; 21:37:19

Oops ! I hadn't seen your post before my #154878. Not trying to diss you !

mikal@Clink#1548805/12/07; 21:47:10

Re: "brushing aside the rampant and usually distasteful commercialism".
Now, now. Would you criticize our beloved Motherland, er Federal Government in theirs endeavor to stimulate the economy with the introduction of new holiday's at their discretion?
And 'Mothering Sunday' was March 18 in the UK, in case you missed it.
But back to Big Brother, I mean the Homeland, April 22nd was Earth Day and May 21 will be Victoria Day in Canada- God bless the queen, she'll be ours for the North American Union if not gracing our new Ameros!
And in closing May 28 is both Memorial Day in the US and Spring Holiday in the UK, a coincidence that brings special opportunities you can count on it.
The companion to Mother's Day in the Fatherland, er US? Father's Day, June 17, only 3 days after Flag Day so don't forget Big Brother!

riggsypretty smart guy...#1548815/12/07; 22:30:48

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."Thomas Jefferson (1743-1826), US Founding Father
devil's advocategelt#1548825/13/07; 06:58:22

Hello Smiles45
Robert Rubin, in an in-house Citibank interview about a year ago, said:
1. people expect the Government to handle any financial crisis; -but, Rubin says, the Government can't
2. Rubin says that he knows many national security people and they say a massive attack on usa is coming

I recommend "American the Vulnerable" by Stephen Flynn
Flynn has been involved at the highest level.

Flynn expects a massive hit on our economy: terrorists
blowing up chemical, oil refineries, poisoning our food and dirty bombs...
In this event, I expect:
Americans will want the military to take charge and protect us
our borders and airports will close
people flee our cities
our stock market closes
Will money and gold buy anything?

Steve Scroll down one dozen posts for the archives of May 14th.

slingshotSir Devil's Advocate#1548835/13/07; 08:39:37

"Will money and gold buy anything?" It don't buy Smarts!
Boy, what ticks me off is for every little thing they scream, "The government should do something" In some cases it may be already too late. Why are they content with .25% rate on their checking account and 1% on savings when the average for gold is 18%. Just how much will they need in the 401ks to retire as the dollar drops. Yes the government will help those who have ARM's and are in over their heads. Withdrawn equity and maxed out credit cards. Should they also bail out those poor credit card holders that pushed it to the max? Predatory credit card companies? I wish there would be more of the populace that prepares and I don't mean, "I have my two batterys, jug of water, can of tuna a flashlight" and that's it.

LebiequeMinero (5/12/07; 13:59:17MT - 154861)#1548845/13/07; 09:45:49

Why all this kicking? Remember the bad old days when inflation indices couldn't be fudged, when deflation was actually welcomed by the irresponsible consumer and, worst of all, when fuel showdowns were resolved by saving fuel instead of worrying about corporate profit projections and naked shorts. We certainly have a lot to be thankful for, what with the superior and insightful leadership of the day. Never forget what happened to gold when the damn fool Volker didn't know what he was doing when he previously saved the dollar by cutting the excesses, the public clean forgot all about gold..

Chris PowellIndia may join China in spending those dollar reserves#1548855/13/07; 18:35:07

India May Tap FX Reserves for Infrastructure Projects

By Joe Leahy
Financial Times, London
Sunday, May 13, 2007

MUMBAI -- India's growing currency reserves could be used to finance local infrastructure projects if a scheme being set up with 3i, the UK-based private equity group, receives central bank approval.

Last month, 3i announced a strategic partnership with the government's India Infrastructure Finance Company to invest together in projects on a case-by-case basis. The private equity house is set to begin pre-marketing for its $5 billion fund.

The government is now studying a proposal to use the IIFC to channel some of India's foreign currency reserves into infrastructure. If the scheme is approved by the central bank, the IIFC is likely to deploy some of the reserves to provide credit support for projects set up in co-operation with 3i and other partners.

The Indian government has forecast the country needs $320 billion in infrastructure investment in five years as rapid economic growth stretches India's long-neglected ports, roads, airports, and power utilities.

This has led to a high-level push to use the some of the country's burgeoning foreign reserves, which have increased 26 percent in the past year to $204 billion, for infrastructure investment as an alternative to raising new government debt offshore.

P. Chidambaram, finance minister, said in his budget speech in February that he was studying a proposal for the IIFC to set up two subsidiaries that would borrow the reserves from the Reserve Bank of India and use them to provide credit support to infrastructure projects.

The proposal could prove controversial. A Moody's Investors Service report said any plan to invest the reserves could face hurdles because the RBI may not fund government debt.

The partnership with 3i followed an earlier announcement that the IIFC is setting up a separate $5 billion fund with Citigroup, Blackstone, and another state-run organisation, the Infrastructure Development Finance Company.

3i will provide the equity for any project and the IIFC debt financing on commercial terms, probably as part of a syndicate of state-owned Indian banks and other institutions.

3i is expected to inject $500 billion into the infrastructure fund.

Anil Ahuja, its managing director and co-head of Asia, declined to comment on the fund, saying only that the group's strategic partnership with the IIFC was a "huge stamp of approval."

The IIFC and the RBI declined to comment, saying proposals on the reserves were still under consideration.

Chris PowellIndependent cooperatives fight nationalizing mines in Bolivia#1548865/13/07; 18:46:05;_ylt=Aj1ShMzZp7v1nqXwCvAOaGBu24cA

Independent Miners
Confronted in Bolivia

By Dan Keane
Associated Press
via Yahoo News
Sunday, May 13, 2007

POTOSI, Bolivia -- The silver, zinc, and other metals under Bolivian soil are fetching their highest prices in decades, and Evo Morales has dedicated his presidency to claiming a larger share of the money for his country's people.

But first he'll have to deal with miners like Marco Taboada.

Swinging a sledgehammer, a plug of coca leaves in his cheek, Taboada is a formidable sight and one of about 60,000 independent Bolivian miners organized into small cooperatives. These men mostly backed Morales' 2005 landslide election but are ready to fight the president's efforts to impose more state control over their industry.

"We're like a time bomb," Taboada said. "Throw it and you'll see."

Bolivia is the world's fourth largest tin producer and a significant source of silver and zinc but kept less than 5 percent of the profits from mining last year.

Morales aims to change that by raising taxes and seizing the occasional foreign-owned business, such as the smelter he took back from Swiss mining giant Glencore in February.

But going after foreign interests is an easier sell than challenging the independents, proud workers willing to risk their short, hard lives defending their piece of the mineral boom.

"We don't have much of a life. It's not like outside," Taboada, 23, said during an interview deep inside the Cerro Rico, a rust-colored peak looming over Bolivia's historic mining city of Potosi. "If we all went up there" -- to the capital of La Paz -- "all the miners, we could kill all the police with dynamite."

It's no empty threat.

In October miners from the cooperatives stormed the state-operated Huanuni mine demanding more access to its rich tin deposits. State-employed miners fought back, and the two sides exchanged gunfire and threw dynamite. Sixteen died before riot police restored order.

And when Morales announced a tax increase on mineral revenues in February, more than 20,000 cooperative miners converged on La Paz, hurling dynamite through the downtown streets.

The government quickly made peace, freezing taxes at current levels and pledging $20 million in badly needed new technology for the cooperatives.

Months later, Morales is still eyeing a tax hike -- and hoping the miners have outgrown their dynamite displays.

"They have to realize that sort of thing has its limits, not only with the government, but also with the people," mining minister Alberto Echazu told The Associated Press. "They have to realize that everyone has to pay their share."

Cooperatives produce roughly a third of the nation's mineral ore and employ more than 80 percent of its miners -- an immense bloc with a record of squeezing concessions from Bolivian leaders.

"Each administration thinks it can use the cooperatives to its own political ends, but it's the cooperatives who end up using the government," said mining analyst Jorge Lema Patino.

And mistrust of the government runs deep in the cooperatives, many of which formed after the state mining company Comibol laid off some 27,000 miners during a 1980s crash in global mineral prices. Determined to survive where the state failed, many banded together and returned to work the mines with their own rudimentary tools.

Though many miners are too young to remember it, the Comibol collapse still inspires their fierce pride in carrying the industry through its darkest hours -- and righteous indignation over the state's efforts to take it back.

"In Bolivia it has been demonstrated historically that the state is not a good administrator of its own property," said Antonio Pardo, Potosi security director for the National Federation of Mining Cooperatives. "If they want a fight, we'll give them a fight, because we're fighting for our livelihood, and they're fighting for fortune."

Though Morales repeatedly vows to "nationalize" mining, the entire industry has been at least nominally under state control since Bolivia's 1952 revolution. Both cooperatives and international companies operate under Comibol concessions.

Morales is seeking to regain control the government lost after the 1980s crash and a run of privatizations in the 1990s, while claiming a bigger share of mineral export revenues that soared from $547 million in 2005 to more than $1 billion last year, mostly because zinc prices doubled.

Despite the windfall, the government collected only $48 million in mineral taxes in 2006, and $14 million the year before.

Echazu, the mining minister, says the government is preparing a bill that would impose safety standards and fair labor practices on the cooperatives -- a move never dared by Morales' predecessors.

Traditions and methods have changed little in the nearly 500 years since Potosi's huge lode of silver made it, for a time, the richest city in the New World.

Working conditions in the cooperatives are often grim, with teenage miners chasing narrow veins through asbestos-choked wormholes in the rock. Most still work with hammer and chisel, and use wheelbarrows to haul the ore out to trucks.

Many cooperatives pay minimal wages and treat employees like slaves, Morales says. The salaries have jumped with today's high mineral prices, to between $9 and $20 per day.

But for all the inefficiency and danger -- no one keeps count of the injuries and deaths -- the cooperatives provide jobs that South America's poorest country can hardly replace.

Silver FoxMinero #: 154861#1548875/13/07; 19:14:05

"A pair of good posts."

Thank you.

As for you assessment on oil disinformation, I agree. Mexico, according to one expert on a "Financial Sense News Hour" interview, (see the attached website), is experiencing a drop in output of 20% per year. Evidently, they have over-produced to maximize their short-term profits. But as the oil revenues are the main source of foreign revenues, and in less than five years, Mexico will between in a really bad position.

Evidently, Saudi Arabia is also experiencing a reduction in output. It seems that all of the data coming from them appears bogus, but they could be experiencing reductions in production.

The only good thing is that "Financial Sense News Hour" seems to be a good source of information for the oil industry. It seems for the last couple of months they have had one oil expert after another reviewing the oil situation and like you said, it is not good.

One problem I was having with Internet newscasts is the amount of time you have to sit there in front of the computer listening to the interviews to get the "little" pearls of wisdom. But I found a solution buying an FM transmitter which when connected to my PC broadcasts to a small FM radio I can wear with ear-plugs (demanded by my wife) while I work in the shop or yard.

Stay well Minero,


Clink!@ Silver Fox#1548885/13/07; 19:37:23

Dang ! Personal wireless broadcasts. Isn't (some) technology wonderful ? In the house at one point this evening we had :-
1/ Mom, talking to her sister on the main phone with a headset while cooking dinner (noisy extractor fan over stove on)
2/ Adult son (visiting for Mother's Day) talking to girlfriend on his cellphone.
3/ Daughter talking to boyfriend on her cellphone.
4/ Younger son playing on GameBoy (with headphones)
5/ Dad, beating hasty retreat onto the patio, laptop in hand to continue surfing, knowing that I could, in fact, watch TV with the wireless headset.
6/ Dog yapping at raccoon in back yard.

How about that for efficacious utilization of space ?!


Clink!Personalization#1548895/13/07; 19:45:41

That last post was a little off-topic, but it did get me to thinking that in the same way that technology allows us to personalize our information streams, it also allows us, via the internet which brought us all here, to personalize our financial lifebuoys, golden and silver in color.

smiles45devil's advocate (5/13/07; 06:58:22MT - msg#: 154882)#1548905/13/07; 20:06:11

Before I attempt an opinion to that scenario, I wonder about a guy like Rubin. If you recall Rubin and Co were engineers of keeping gold down and the "strong dollar policy" under Clinton. What we got were permutations of PPI, employment(or cheap job replacement) and just about all economic stats. Those were the years when American capital & jobs went Fedex to Asia.
Why metion the obvious about history you say? Because I view Rubin as an ultimate insider(PTBe), I question every utterance from such individuals. I hang on every nuance to gleen the real evil intent. With his schoolboy smile and intelligent sounding comments he has ping ponged (as Paulson & many others) from industry to govt & back to corprate networks (true facism at work).
Ok to your query. The events mentioned are entirely likely. Fear is the thing that keeps govts in power. Massive global warming (not 25 yrs ago we were worried about a new ice age), Asian bird flu, Ebola, Sars epidemic (when the real danger lies in Cancer, Malayria and car crashes) .Huge Bee killoff(this a cycle and has happened before). The scenario brings to mind a recent letter I read from a highly respected intelligence writer from Europe. It it his assertion that a black op CIA agent who is on record predicting the planned demolition of the World Trade Towers one month before it occured. He has contact with the same out of favor and on the run agent(the agent is in Canada hiding now). It is his assertion that on Sep 2, 2008 in the Twin cities(St.Paul & Minneapolis)while during the Republican Convention a dual controlled atomic detonations will occur.
The reasoning being to ut Reps. above suspicion while Bush is still in command. I take these predictions with a grain of salt, but you must admit from timing, to the fear factor and the target everything seems plausible.
Govt's refusal to be honest has caused all these type conjectures in the thinking masses. Loss of emails, D of J doubletalk under oath, VPs with presidentlike powers, refusal to question 911 to open public query refusal by the Dem. majority to reverse our loss of Constitutional rights.
I am old and physically mangled with limited assets and I pose no direct threat to anyone: state or individual; yet by todays' definition I become a terorist or at least against national security. I voted 2x for President Bush what makes me different now? I still cannot walk, I still have limited funds and I am still -0- threat.What utter nonsense.
I saw a movie last night. The basic theme was just what I am discussing. You may know it "V" Vendetta. The acting is good it is British, yes far fetched but very germane. The British are more threatened than Americans at this point (Yes, I know that is very debateable and BTW my mother was English).
The picture you paint is of a prisonlike existence or being in a car doing 90mph without brakes. Would gold help you? No, but in prison cigarettes, food and drugs will. So let me modify your idea a bit to be less encarcerated, LOL.
My reading and knowledge leads me to believe that gold, silver will help in any situation. The denomination is the important thing at that time. If gold buys everyone and everything you cannot just handout 1oz K-Rands everytime you need a drink of water. So enter the all important small gold(Sovereigns, Angels, Roosters) and silver coins. Now it gets more plausible to buy items.
Let me tell you from background knowledge. Jews fleeing Europe bribed their way out thru borders with gold. There was a going black market rate. Jews were higher, but Nazi or not the rate remained.
In 1975, the fall of Saigon. A buddies' brother was a marine guard at the US embassey. Saigon was surrounded by NV and the only refuge & escape was there. Huey helicopters were limited and after all US embassey personnel were airlifted to safety, the flights back to the dangerous(unprotected) embassy continued. Why? Gold! Many SV were trapped with sure death without an escape. Hueys demanded one oz/gold for a seat. No exceptions of political status, rank or wealth just gold on the barrel head.
Therefore, knowing humans to be repetative in nature (Fear,Greed,Sex in that order). Fear is the #1 driver. Fear makes selloffs faster, quicker and more violent than rallies as the public always buy (and sells at the market). Why did the Hueys return? They didnt have to? Simple: Greed overcame Fear of death by RPG, mortor or machine gun. Where's the sex angle? The Gold of course. Ever been in Saigon, Bangkok or Manila and see stunning 17yr women selling themselves. A grunt (a ground soldier, all he wanted was the pain of war to stop and replace it with pleasure diversion) he was a king with a $100 bill, but with gold all doors opened). I never knew about that then, but those guys stayed and continued to make a fortune as drug smugglers and mercenaries.
Now back to Gold and the movie "V". In the beginning, as a trader it was so very difficult to manage my Fear in the gold market. I traded Forex & PM metals. I never did conquer Fear eaxactly, but what I did was limit it (less pain). How you might say? Thru reducing margin (less futures more outright stocks purchase & bullion with NO margin), less profitable, of course, but much less risky. Many posters may read my posts about the past history. I simply want to strengthen the gold community. Some posters might say who is this lame brain pontificating like "The old man and the sea". Do they really believe an old cripple living in a 3rd world country needs recognition of any kind?
So my answer to you is you must maintain your wealth in bullion and denominally. It will keep you in good stead or better stead for sure. Nothing will stop the planned teeth rattling, blood curdling sell offs, but like paid up home owners you really don't care about mortgage rates very much. The movie "V"s message is overcoming govt Fear is well worth the time./Peter TY for "American the Vulnerable" by Steven Flynn I will try to get it.

smiles45Chris Powell (5/13/07; 18:35:07MT - msg#: 154885)#1548915/13/07; 21:14:04

Hi Chris, I must compliment you on your tireless updating on domestic and international happenings. I would like if you have any insight you may provide on the following question. I read the India Infrastructure article, I have read similar essays concerning China's infrastructure and building a massive ETF utilizing reserves.
Now we all know not just China & India, but all nations are owed substantial amounts of USD$ reserves (mostly in the form of US 30yrBonds. Japan, Canada & UK have monster credits as well (forget the mysterious Caribbean as of late buying-that's a different matter).
How do you think these reserves will be utilized (redeemed)for infrastructure? Is not implicit that infra require massibe base metals, concrete etc, etc. The selling of USD$ to buy said materials would lead to USD$ selloff.
Remember the massive oil buyouts attempted by China that were rebuffed by the US itself(patently displaying our debt is virtually useless in buying anything substantive (of value assets). China has turned to Africa and other S.Am nations offering money for developing their assets(roads, ports, mines and mills).
The question is who will accept payment in US 30yr Bonds and if not that way, doesn't this imply monstrouos depreciating USD$ attendant Bond selling?
Do you think all these Paulsen trips are really about how to spend the USD$ reserves with the least havoc to USD$ Forex rates(lower USD$)?
Or do you imagine Paulsen's visit as more of the threatening nature: ie IF you do that and we will counter with this? So it's in both our interests to cooperate.
For me the lynchpin here is Japan. Japan sits silently back encouraging carry trade, destroying the Euro/Yen exchange damaging valued Euro exports. A simple raising by Japan of interest rates may have triggered the Feb27 Shanghai 7% selloff. Japan and China are now huge trading partners with Europe coming on as well.
How will these reserves or rather can these reserves be absorbed in your opinion? OR am I missing a complete angle here?/Peter
This is an open question and European Forum members might have a completely differently view.

Sierra MadreClink! - I like the dog in your family...#1548925/13/07; 21:15:36

He's the creature that is true to his nature, because he can't do otherwise.

Too much digitalization! Too much technology!

"Getting and spending we lay waste our powers; Litte we see in Nature that is ours..."

Nature has a way of collecting on debts, sooner or later.

No offense meant! This is the way our civilization is going.


smiles45devil's advocate (5/13/07; 06:58:22MT - msg#: 154882#1548935/13/07; 23:11:06

Steve, As a part of your safety via gold one must remember the insatiable appetites of govt.
Noting well the approaches in Venezuela, Bolvia and Peru one must understand their modus operandi. In less advanced nations, the govt simply nationalizes pm or base metals. Govt being totally ineficient running their present oil industries require the more & more income.
However, in the socalled advanced societies govts. will seek technological answers in curtailing people and their right to maintain their hard earned wealth.
So what at issue here? Gold! Ever notice that govt could care less if an individual goes out buys 4 gallons of Gin drinks it and dies of alcohol poinsong; yet if that same individual goes out and buy $50 of drugs they want to try him, ruin his public life and finally jail him. Now what's more dangerous to drink 4 gals. of Gin or smoke some pot? What's difference you ask? That gin is govt. controlled by heavy taxation which is just peachy for them, the pot is untaxed yet poses no physical harm, but the consequences are horrendous.
The same applies to gold. It's untaxed, uncontrollable and represents individual freedom. Consequently, no end of the lengths will be for govt to control it.
Now in response to your post concerning restricted travel,you hit some touchy issue maybe without realizing it.
I will post this web from the Free Market news below./Peter

Chris PowellChina's money supply rises 17%, exceeding target#1548945/13/07; 23:45:43

By Nipa Piboontanasawat and Helen Yuan
Bloomberg News Service
Saturday, May 13, 2007

China's money supply growth exceeded the government target for a third month and lending accelerated, adding pressure on the central bank to raise interest rates.

M2, which includes cash and all deposits, rose 17.1 percent in April from a year earlier, the People's Bank of China said on its Web site today, after gaining 17.3 percent in March. That beat the 17 percent median estimate of 19 economists surveyed by Bloomberg News and the central bank's 2007 target of 16 percent.

Outstanding yuan loans also rose more quickly last month than in March as tighter lending rules and higher borrowing costs failed to curb investments in factories and real estate. The People's Bank of China has raised interest rates three times since April 2006, as well as increasing the amount lenders must set aside as reserves seven times, in a bid to slow asset bubbles and accelerating inflation.

"Lending is still very strong and that sustains fixed-asset investment," said Dariusz Kowalczyk, chief investment strategist at CFC Seymour Ltd. in Hong Kong. "The central bank wants to reduce loan growth and make savings more attractive to cool the stock markets."

Kowalczyk expects the central bank to raise both lending and deposit rates in June. The one-year benchmark lending rate is at 6.39 percent.

Outstanding yuan loans climbed 16.5 percent in April from a year earlier, today's statement said, up from 16.3 percent in March. Banks extended 422 billion yuan of new loans last month, making the total for the first four months 1.8 trillion yuan, more than half the total for the whole of last year.

China's economy, the world's fourth-largest, grew 11.1 percent in the first quarter, accelerating from 10.4 percent in the previous three months. Fixed-asset investment in urban areas climbed 25.3 percent in the period, compared with 24.5 percent for the whole of last year.

The central bank will continue "stable" monetary policy, strengthen liquidity control and guide "adequate" loan growth, using reserve requirements and open market operations as tools, it said in a quarterly monetary policy report.

China's trade surplus swelled 88 percent in first four months from a year earlier to $63.3 billion, pumping more cash into the economy and complicating government effort to rein in money supply, lending and fixed-asset investments.

China's inflation accelerated to 3.3 percent in March, the highest in more than two years, and more than the central bank's target of 3 percent.

With the benchmark one-year deposit rate at 2.79 percent, Chinese households, concerned that they are losing money on savings held at banks, have rushed into the stock markets. The benchmark CSI 300 Index has jumped 81 percent since the start of this year.

Among Chinese 20,000 households surveyed by the central bank in February, a record high of 30.3 percent said they intend to invest their money in stocks and funds.

Investors in China opened 8.58 million new accounts at brokerages in the first quarter, up from 5.38 million for the whole of 2006, according to the China Securities Depository and Clearing Corp.

Outstanding yuan deposits rose 15.7 percent in April from a year earlier, today's statement said, down from 15.9 percent in March. M1, the narrower measure which includes cash and demand deposits, increased 20 percent, marking its fifth month of exceeding growth in M2.

Chris PowellReply to Smiles45 -- Coordinating the dishoarding of gold and the dollar alike#1548955/14/07; 00:00:53

Smiles45, thanks for the compliment about the posts of the news stories. They're only what a lot of Yahoo and Google news alerts will get you ... if you want to wade through a few hundred each day!

Yes, as you suggest, I've figured that the disposition of the Chinese, Indian, and other FX reserves has been important to us bugs for implying that U.S. government debt would be liquidated in favor of real things -- depressing the dollar, raising interest rates, and driving up the costs of real things, developments that could be only favorable for the precious metals.

But we also must recognize that the holders of U.S. dollars and U.S. debt are as much on the hook here as the United States itself is. U.S. creditors can't want to crash the value of their own reserves. Just as the central banks seem to have been undertaking a controlled retreat on the gold price, they are probably engineering what they sometimes call an orderly decline of the dollar -- coordinating both their gold dishoarding and their dollar dishoarding.

The big question may be simply whether the central banks can keep all the major players on board or whether one of them goes off to protect itself at the catastrophic expense of everyone else.

There are reasons why the meetings of the central banks and the international financial diplomats are not public and this is one of them. If the markets knew what the central banks and the financial diplomats were doing, they might realize that there really aren't any markets at all as commonly understood and that the main purpose of international financial diplomacy is precisely to prevent real markets from breaking out.

MarkeTalkWorldwide Money Supply Figures#1548965/14/07; 00:07:34

Working in the precious metals business these past 16 years has its benefits. One of those is never knowing who is going to be on the other end of the telephone call when my phone rings. In recent years, potential investors in gold have raised the option of buying foreign currencies, especially the Euro, instead of buying physical gold in order to hedge against a severe decline of the US Dollar.

Looking at a weekly and monthly chart of certain foreign currencies plotted against the US Dollar, one can see that such a strategy would have provided limited protection and thus profits. For example, the Euro hit a low of $0.84 sometime in 2000 after it was introduced at par in 1998, but it has subsequently risen to $1.37 at its peak two weeks ago. From low to high, that is only a gain of 63%. Now let's compare that performance to that of gold over the last six years. Gold hit its low in April 2001 at $252/oz. and has subsequently risen to $672/oz. as of last Friday. I am not counting last year's peak at $729/oz. which makes the numbers look even better. From low to high, that is a gain of 166%. The gain is 189% if you measure from $252/oz. to $729/oz. Now how can anyone seriously argue that foreign currencies, i.e. the Euro is a better store of value than gold? People delude themselves into thinking this nonsense until they look at the numbers.

Now let's consider what is happening in 2007 to these much-praised foreign currencies. One of my clients supplied me with the following source for the M3 money supply figures. In some cases, the only available figures were for M2 or M4. My client got them from Richard Daughty who frequently writes for "Safehaven" and "The Daily Reckoning". Apparently, Mr. Daughty got these figures from John Embry of Sprott Asset Management. These M3 numbers will cause you to do a double-take in disbelief.

Eurozone M3: up 10%
UK M4: up 13%
India M3: up 20.3%]
China M2: up 17.2%
Australia: up 12.7%
South Korea M3: up 11.3%
New Zealand M3: up 18%
Australia M3: up 13%
Japan M3: up 6%
Russia M2: up 49%

The US M3 figure is missing because the government stopped reporting it in March 2006. Some sources state it is running around 15%. As I have stated repeatedly on the telephone to my clients, ALL governments are involved in currency debasement. It is the nature of governments (conservative and liberal, democratic and communistic) to print paper money and to engage in make-work projects, transferring wealth from one part of society to another, etc. The one thing they cannot do is print gold or cornflakes or soybeans or any other commodity for that matter. That is why it is so vitally important to understand what is going on worldwide at the macroeconomic level.

The serious investor who truly grasps this concept will not hesitate for one moment to move assets from paper into physical metal. Deciding how much is up to each individual investor, but the general range varies from 10% to 30%. Some of my more agressive clients have put up to 50% of their assets into gold and silver, but they are the exception. In my educated and humble opinion, I don't think the gold price will stay down for very long. In fact, it would not surprise me to see a counter-seasonal rally in the metals from late spring through the summer months. After the $30 selloff of the last two weeks, my trusted and confidential sources (who live in Europe) told me once again to buy every dip in price and hold on for $1000/oz. because absolutely nothing has changed. Add to that advice the information about worldwide currency debasement and I rest my case for the purchase of physical gold and silver.


smiles45Chris Powell (5/14/07; 00:00:53MT - msg#: 154895#1548975/14/07; 00:40:51

A_STORE_OF_VALUE.doc Scan and Save to Computer

Chris- That compliment was knowing quite well the effort, the intensity and time consumming such effort. Being literally chained to my computer due to lack of mobility, I appreciate the effort needed. As secretary of Gata I am sure you contribute plenty more than recording meetings,LOL.
GC -Yours and Chris' post re: money supply increases in all countries just brings home the point even louder telling one and all that all Fiat is uncontrollable and the answer is gold possession.
I have an Internet aquaintaince the posters here may know. Dr. Aubie Baltin. He is an exclusive essayist on Gold Eagle. He sends to me & a probably many others his pre-edited reports that come out every two weeks on Mondays or Tuesdays. What I like a about him is two fold.
He has no ax to grind. He is not selling (no service, no letter, no charts and even discourages personal pm stock picking advice) anything except just his knowledge of history of the last bull. He is old and in ill health I believe, but his recollection of detail in history (mostly current) is incomparable.
Second what I enjoy the most is that he communicates not just proyseltize like most gold sites with letters, analyses or advice. He can take a complicated subject and make it simple in a few paragraphs.
Being computer illerate, I could not figure how to copy and paste from Word or Office (whatever he uses). So I have copied his attachment and will try to post it below.If I cannot do that he can be read this week on Goldeagle. I recommend poster take a peak at his archive as he explains the intricacies of many economic issues with ease. This week I found particularly interestin as he open with a comparison of having US$1,000 in the yr 1900 vs 2007 and what it is worth today. All years in between are calculated-truly an eye opener/Peter

Chris PowellCanada's National Post reports warnings given at CMRE meeting#1548985/14/07; 06:20:14

How to Spoil a Good Party

Jacqueline Thorpe
Financial Post (National Post), Toronto
Monday, May 14, 2007

NEW YORK -- On a sultry spring day in Manhattan, the contrarians -- bears and goldbugs -- are in on the prowl.

The 100 or so bankers, money managers, and investors gathered at the Union League Club in New York City last week to hear how today's highly leveraged, derivatives-entangled global financial system is about to come crashing down about their ears. Organized by the Committee for Monetary Research & Education, a nonprofit organization dedicated to educating the public about markets and "sound money," the evening would not be for the faint of heart.

The theme: "A time of Financial Fragility and Latent Instability."

Some may write off such a collection of downbeats as the financial equivalent of a loopy off-the-grid movement, preparing to work the land and create their own power when the oil runs out.

Many in the dark-panelled dining room see financial Armageddon around every corner. Many believe the financial system started on the road to ruin when the world went off the gold standard once and for all in 1970s, switched to fiat-based currencies, and started to inflate its way out of its problems.

They believe escalating debt will cause the U.S. dollar to crash, and they probably keep gold bars under their beds. Heck, some, such as Chris Powell of the Gold Anti-Trust Action Committee, believe central banks have been actively colluding to keep the gold price down.

And yet with every tick higher in global stock markets, with every newfangled CDO, CDS, or ABS that offloads risk ever further, their warnings about the folly of spiralling debt, paper money, and inflation provide a sobering view.

They are certainly well-educated and experienced money men. At the risk of spoiling a perfectly good party, here's what they have to say, beginning with the official historian for the Bank of England, Forrest Capie.

... FORREST CAPIE, official historian of the Bank of England, speaking in his own capacity.

Mr. Capie is currently on secondment from the bank, writing the next installment of its commissioned history. History has shown that when asset-backed money is abandoned for fiat-based money, inflation invariably follows, he says.

For close to two centuries and until the 19th century, gold was the basis of the world monetary system.

"The gold standard in its classical form provided price stability and allowed the economy to do what it could with uncertainty reduced to a minimum," Mr. Capie says.

By the 20th century, as the world abandoned the gold standard, inflation reared its ugly head. In the 1920s there were five cases of hyperinflation: Russia, Hungary, Austria, and Poland, and in Germany prices rose a billion-fold across 1923-24. In the 1940s, there was hyperinflation in China, Greece, and Hungary.

"Stories circulate of how in some department stores in Budapest a bell would ring and that would indicate that as of that moment, prices had doubled." he says. "In all these experiences, it was unbacked paper money of the kind we now have everywhere. A vast expansion of paper money preceded or accompanied all these inflations. What's also common to these inflations is there's large and growing fiscal deficits. Deficits of these kinds ultimately require monetizing."

In the second half of the 20th century, controlling the supply of money to control inflation fell out of favour. The trendy idea became wage and price controls. Inflation soared, peaking in the U.K. at 30 percent in the mid-1970s.

With the current targeting of inflation, price stability does seem to prevail Mr. Capie concedes.

"But it does allow considerable discretion in monetary policy -- and the use of discretion has come unstuck in the past," he says. "The great danger then is, if inflation should begin to edge up and if inflation expectations were to change, it may be difficult to contain the new inflation and take some time to alter expectations. Surely it's better at least to keep an eye on the monetary aggregates and prepare to see them as useful indicators of underlying inflationary pressures."

... JAMES TURK, founder and chairman of GoldMoney, a payment system where gold can be used as online currency, author of "The Coming Collapse of the Dollar."

No explanation required as to where Mr. Turk thinks the dollar is headed.

"When we talk about money, we talk about the supply of money," he says. "What we don't talk about and what in my mind is even more important is the demand for money. Currency crises start with a collapse in demand, he says. If people lose faith in the currency for whatever reasons -- either they don't trust the backing or there's not enough gold backing the currency, or they don't trust the government and its policy to maintain a stable purchasing power or to keep the currency strong so it can be used as an effective means for communicating value in everyday commerce -- they move away into other alternatives."

Mr. Turk says central banks almost daily talk about diversifying away from the dollar or creating their own currency zones. In a recent interview with a Russian journalist, the journalist said even Russians, which have long coveted greenbacks, are now beginning to question the supremacy of the U.S. dollar.

Investors too are beginning to shun it, with none other than Warren Buffett leading the pack.

"Look too at the stock market," he says. "The stock market is not going up because of economic fundamentals. People would rather own a million dollars of Exxon than have a million dollars in the bank. It's also true people would own a million dollars of copper than have a million dollars sitting in the bank. All these things cumulatively are suggesting to me we are probably on the final slippery slope for the dollar. I do think the next several months are going to be very, very tumultuous."

"We're buying from China," he says. "They're lending us back the money. It's unsustainable. It cannot go on forever because we're eroding our net worth. Just like individuals can have too much debt, companies can have too much debt, nations can have too much debt."

... PETER WARBURTON, director of Rhombus Research, author of "Debt and Delusion."

"You could say the central banks, particularly the Fed, have been killing us with kindness," Mr. Warburton says. "They've wanted to prevent bad things happening to us, but in the process they have made assurances and taken steps to help us misprice the risks in the system and emboldened us to take bigger risks."

As far back as the Mexican peso crisis of 1994, an asymmetrical bias began to creep into U.S. monetary policy, allowing equity rises to go uncorrected but sharp falls to be cushioned, he says.

There were powerful indications the decade-long credit cycle was close to exhaustion in 2000-01 with bond yields rising back up to their late-1990s peaks.

But it was arrested in 2002 by the U.S. Fed slashing rates and making policy statements that it had numerous tools at its disposal to fend off any deflation risk.

"The opportunity was missed for the system to correct," he says.

Instead the Fed helped create an ever-expanding risk universe, with derivatives, asset-backed instruments, insurance markets, credit protection securities and catastrophe bonds all pushing out the outer front of risk.

"This all works wonderfully well," he says. The risk universe expands by 20 percent per annum; credit by, say, 10 percent, the economy by 6 or 7 percent." But it all relies upon the credit staying good."

He sees an unwinding in any number of usual ways: a natural or man-made disaster; a spillover of inflation from asset markets into CPI that would prevent interest rate cuts; a grassroots credit tightening due to lower collection of debt, late settlements, or a postponement of capital expenditures.

Eventually, you could see foreclosures, capital losses, or a break in the hedge fund or derivatives market, as with LTCM in 1998.

"My concern is we have already entered the latter stages of this process," he says. "The price we may yet pay for the fix in 2002 is to have an extended period of underperformance."

... HENRY C.K. LIU, visiting professor at the University of Wisconsin and Asia Times online commentator, has provided unofficial advice to several Chinese governments.

"Today the dollar is the world's prime reserve currency. While depreciating against most assets, it continues to be really overvalued in terms of gold," he says.

To give an idea of how indebted the United States is, Mr. Liu outlines what the U.S. Treasury would require if the dollar was still backed by gold.

The U.S. treasury now owns 261 million ounces of gold. At its peak in in December 1941 it owned 650 million ounces.

As of March 12, 2007, the price of gold required to pay back the national debt was US$33,864 per ounce. The rise in the price of gold needed to keep up with the rise in U.S. national debt would be US$8.15 per ounce per day.

To back the U.S. monetary base with gold, which was about US$800 billion in February, the price of gold would have to be US$3,763 per ounce.

Unlike many at the dinner, Mr. Liu says gold does not have enough elasticity for a modern global economy.

[With that kind of debt, there may not be enough gold in the ground!]

He believes global financial markets have become completely detached from underlying economic fundamentals. "The old concerns of industrial capitalism, which is production, employment, and so on, have become byproducts," he says.

With trade becoming an increasingly key engine of the global economy, other aspects, such as domestic development, have been overlooked.

In a recent column, he said virtual money created by structured finance has reduced central bankers to the status of mere players rather than key conductors of financial markets.

As inflation picks up, the liquidity boom and asset inflation will draw to a close, leaving a hollowed-out economy devoid of substance.

Mr. Liu says with financial crises seeming to occur in a regular 10-year pattern -- the October 1987 crash, the Asian financial crisis starting in July 1997 -- the world is due a slump.

... KEVIN DUFFY, principal of Bearing Asset Management, which runs the Bearing Fund, a long-short macro hedge fund currently long gold, short financial stocks, and Japanese government bonds.

"We had the late-1980s bubble in Japan, the biotechnology bubble in 1991, we had the first LBO bubble of '89, of course the technology bubble of 2000, and more recently the housing bubble," Mr. Duffy says. "As you get these asset bubbles, it takes greater and greater doses of credit just to keep the game going. In doing so, you invite more and more borrowers or you extend greater credit to existing borrowers. This is what happened recently with the subprime problem."

Mr. Duffy likes to look for contrarian indicators in popular culture. In June 2005, one month from the top in homebuilding stocks, Time ran a cover about the real estate bonanza.

Another great contrarian indicator is stadium names. In 2000, tech companies had 12 stadium names; 10 of those companies are now bankrupt. Today 14 stadiums have bank names.

Beneath each bubble is a gargantuan credit bubble.

"What is making this credit cycle so terrifying is the amount of leverage that's being deployed, and Wall Street is applying a lot of that," he says.

Since 2001, the U.S. Federal Reserve's balance sheet has expanded US$300 billion, or 50 percent, the money supply has grown by 60 percent while the balance sheets of the top five banks on Wall Street have expanded 160 percent.

Money in venture capital peaked at US$90 billion in 2000. Some US$160 billion poured into private equity last year and that amount will probably double this year, he says.

The housing bubble has now been replaced by a professional speculator bubble: commercial real estate, hedge funds, and private equity, Mr. Duffy says.

But he says the same exotic mortgages are starting to be found in commercial real estate.

"All indicators of a massive top," he says.

Quoting James Stack, editor of InvestTech Research, he says: "Never confuse an economic miracle with a liquidity bubble."

Paper AvalancheHosing JSP With Nominal Numbers#1548995/14/07; 07:14:23

To continue my thought from my example Saturday. If JSP (Joe Six Pack) invests $10,000 / year for thirty years into a mutual fund that yields 6% on average, at the end of that 30 year period he will have $790,852.

JSP sees that and thinks that it is a no brainer. However, JSP doesn't take into account that the cost of everything that he wants to buy with those savings is also going up 6-10% annually (but reported at 2-3% by the government - JSP doesn't care, he is too busy watching NASCAR). To see how JSP fares in this real life scenario (and who benefits from JSP staying in the game) we need to tie JSP's investments and final number to a commodity that will best reflect the actual cost of goods / services reacting in price to an increasing money supply.

For this example, let's say that milk is a dollar in year one and that the money supply is expanding at 10% per annum. To be conservative, let's say that milk is increasing only 8% per annum in resposne to the increased supply of paper money. So in year one, with his $10,000 investment Joe would have been able to buy 10,000 gallons of milk, 9,259 in year two, 8,573 in year three, etc.

So how does Joe do? At the end of the 30 year period, Joe will have invested the equivilent of 121,584 gallons of milk. But the $790,582 that is in his account can now buy 84,851 gallons of milk at the year 30 price. Again, Joe effectively put 121,584 gallons in and can only buy 84,851 with his "savings."

But wait! There's more! The $790,582 is JSP's gross principal. From this we deduct $67,252 in management / 12b-1 fees and $73,587 in long term capital gains taxes. This makes JSP's net take $649,743. This equates to 69,715 gallons of milk.

121,584 in. 69,715 out.

Government and mutual fund winners.
JSP loser.

But the beauty of this con is that because this occurs over a 30 yaer period and JSP's purchasing power is eroded in such small incrmenets (and JSP is too busy watching NASCAR to care), JSP will never figure it out until he is at the aisle at Wal-Mart wondering why he can't buy as much milk.

The sheeple only comprehend nominal numbers.


devil's advocatequestion#1549005/14/07; 07:33:21

Chris Powell
I really appreciated your post. Warren Buffet saying "the next several months are going to be very, very tumultuous" may vastly understate what is coming at us.

I know a place that is third world but is really fourth world. It is called Florida.


Clink!@ smiles45#1549015/14/07; 07:38:35

If I might help .....

Silver FoxMarkeTalk #: 154896#1549025/14/07; 07:46:21

"Worldwide Money Supply Figures"…

"The serious investor who truly grasps this concept will not hesitate for one moment to move assets from paper into physical metal."

Couldn’t agree with you more… Unfortunately, the "average" investor has had so much BS financial information pushed via ALL of the main-stream media outlets that he is unfortunately clueless. I do not know about your experience, but when I broach this topic with friends and associates, they pretty much think I am crazy.

It will be a sad day when they finally realize how they have been mis-lead by the "masters behind the curtains / Corporatocracy".


ArcticfoxJapan's money supply number's#1549035/14/07; 08:21:12

Surprized that Japan is so low in light of the fact that they are supplying most of the global liquidity via the carry trade??
Gandalf the WhiteTHERE it is !! THE official BOTTOM !!! #1549045/14/07; 10:26:30

Gold has for the THIRD and LAST time --
BOUNCED off the $666. level !!!
Last chance to get the YELLOW at this gift price !!!

slingshotStore of value#1549055/14/07; 10:31:00

Good read.

The HoopleMarkeTalk's money figure IS the real inflation#1549065/14/07; 10:38:33

When reviewing MarkeTalk's money supply figures from around the world I am reminded how much investment income is truly required just to keep up with inflation. What the shills also ignore is paper-inflated investments being taxed as earnings. If inflation is running 8-12% a year it requires investments making 14-20% just to shake out that 8-12% (figuring 35% Federal, 5% state, or 18% capital gains like in my state). It's even worse when you consider more people are falling into the AMT and estate tax threshold trap. Then there's the host of consumer trickery created to give the illusion of less inflation like cheaper product, higher deductibles, smaller portions, and poorer service.

Like MarkeTalk said gold and silver is THE best protection from what will become the impoverishment through inflation. However it is sobering that as spectacular as the past 6 years has been for gold the gains barely covered my increased costs for health care, college tuition, gas, food, housing and much more. Think about JPS treading water with his Dow or S-P mutual fund basket. He's already becoming toast.

The HoopleAdditionally...#1549085/14/07; 11:38:09

The true inflation rate is also (IMO) a reason why I'm not wild about owning gold mining shares. Most mines are facing staggering increases in costs of operation while at the same time experiencing declining or flattening production. They too need healthy gains in the POG just to tread water. And that's just the unhedged mines; God help the hedgers who are in a no-win position. They need a higher POG to meet inflating operating expense, yet the higher the price of gold the more the hedge goes underwater.

I don't want to be betting on the profitability of a gold producer in a tough inflationary business environment; I want to own the real thing. When economies go sour many business plans become untenable. What would any business, let alone a mining company budget for $5.00 fuel, 15% annual health care and liability insurance bumps, plus increased R-D and exploration expense? Don't forget politically unstable regions and increasing environmental regulation fees. I doubt in 3 or 4 years that POG $700 will be break-even for many.

It seems much like subsistence farming the managed price of gold has produced subsistence mining. And who did the miners call when things got tough? Why none other than friendly loan officers like those down at JPM. When you're beholden to bankers it's tough to raise your voice about gold manipulation, even when it's YOUR bank doing it.

mikalCYA#1549095/14/07; 12:07:26

The covering of behinds involves high-level and professional warnings, hints, disclaimers, qualifying statements, policy and behavior changes and rule changes such as accounting which are so long overdue, too little too late and insufficiently transparent:

Profit as We Know It Could Be Lost With New Accounting Statements By David Reilly - Free Preview - Word Count: 1,639 | Companies Featured in This Article: General Electric
Pretty soon the bottom line may not be, well, the bottom line.

In coming months, accounting-rule makers are planning to unveil a draft plan to rework financial statements, the bedrock data that millions of investors use every day when deciding whether to buy or sell stocks, bonds and other financial instruments. One possible result: the elimination of what today is known as net income or net profit, the bottom-line figure showing what is left after expenses have been met and taxes paid.

It is the item many investors look to as a key gauge of corporate performance and one measure ..."

devil's advocategandalf#1549105/14/07; 12:29:17

Hello Gandalf the White
what are the odds - or what is your degree of confidence in the "official bottom" of $666 for gold? Does this have anything do do with devil worship?

devil's advocateHoople#1549115/14/07; 12:36:50

Hello The Hoople
Your post deserves A+ for a detailed thought through analysis.
By the way, historically gold mining stocks underperformed

Gandalf the WhiteHello Sir Devil's Advocate#1549125/14/07; 14:08:59

Sorry, tis only the charts that have defined the BOTTOM as 666 !! However, many others may well see something in THAT number. BUT, I have far more important things to think about the Devil.

GoldendomeThe end of National Currency#1549135/14/07; 15:26:17

A somewhat long but interesting article in Foreign Affairs Magazine -- Council of Foreign Relations

Snippet: Page 5
... "Four decades ago, the renowned French economist Jacques Rueff, writing just a few years before the collapse of the Bretton Woods dollar-based gold-exchange standard, argued that the system "attains such a degree of absurdity that no human brain having the power to reason can defend it." The precariousness of the dollar's position today is similar. The United States can run a chronic balance-of-payments deficit and never feel the effects. Dollars sent abroad immediately come home in the form of loans, as dollars are of no use abroad. "If I had an agreement with my tailor that whatever money I pay him he returns to me the very same day as a loan," Rueff explained by way of analogy, "I would have no objection at all to ordering more suits from him."

With the U.S. current account deficit running at an enormous 6.6 percent of GDP (about $2 billion a day must be imported to sustain it), the United States is in the fortunate position of the suit buyer with a Chinese tailor who instantaneously returns his payments in the form of loans -- generally, in the U.S. case, as purchases of U.S. Treasury bonds." ...

MarkeTalkItalian 20 Lire Vittorio Emmanuele Coins--Sold Out#1549145/14/07; 15:46:45

We are pleased to announce that our May Buyers' Group special offering on the Italian 20 Lire Vittorio Emmanuele gold coins is sold out. Congratulations to all our clients who participated in this offering. In the years to come you will be richly rewarded. As a reminder, we want all of our clients to know we have 500 Umberto 20 Lire still available. These make a great compliment to the Vittorio Emmanuele coins. Please contact our office and your representative here (if you have one) for pricing on these items.


Paper AvalancheInflation... the devil is in the details#1549155/14/07; 17:15:52

Just got back from the post office. While JSP may be aware that the first class stamp for a one ounce letter went up 5.1% today, he may be more surprised when he mails anything bigger than a first class envelope.

The mailer that I send out to prospects previously cost $1.35 to send USPS. Today it costs to mail $1.65 for the same letter. That is a 22% increase.


I hope I don't have to mail anything other than regular sized letters when I retire.


USAGOLD Daily Market ReportPage Update!#1549165/14/07; 17:31:13">
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

May 14 (Reuters) -- Chart-based sales and weak copper prices sent U.S. gold futures to a lower finish on Monday. Most-active gold for June delivery on the COMEX division of the New York Mercantile Exchange settled down $2.20 to $670.10, traded between $667.50 and $676.40.

Greg Weldon, chief executive of, said in a note that increased technical-selling pressure were building in the shorter term, with the potential for a medium-term downside break. Weldon said, however, he did not see cause for concern in the long run yet, as the macro-monetary trend remained supportive to bullion.

"The weakness in silver helped push gold down. But the euro is not affecting us. Crude is up, and we normally go with that too, but that's not happening," a gold broker said. A 3 percent sell-off in U.S. copper futures on Monday also weighed on precious metals.

Traders said they thought the selling was probably limited and expected last week's support to hold.

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

FreedomAll That Gold#1549175/14/07; 18:00:45

Have you ever wondered what silver and gold are used for?? I received an email (with a few pictures) from a Muslim friend of mine today. It's an explanation of the Kabalah Stone located in Mecca, Saudi Arabia; with one of the most interesting parts being the discription of the veil that covers the stone. I post it here:

"The House of ALLAH in Makkah. The Kaa'ba is covered by a black cloth known as 'Kiswa', which is produced & changed every year. Special factory designed for the making of Kiswa in Makkah. It costs approx. SR 17 million. The cloth is made of 670kgs of silver dyed black, about 120kgs of pure gold & 50kgs of silver used in writing the Qur'anic verses over the cloth. The total area of the cloth is 658sqr meter."

The KAABA is hollow, by the way, and there are three pillars inside. I was thinking that, with all that silver and gold covering the stone ~ it becomes a giant electrical condensor (capacitor that will hold a huge charge) ~ which must mean SOMETHING that I don't understand. I wish I knew how to post the pictures.

Spare Iraq,

mikalShanghai 'stir-fry' speculating frenzy could be recipe for disaster#1549185/14/07; 18:13:35

China changes rules on market bubble fears
By Emma Thelwell |
Last Updated: 3:40pm BST 14/05/2007 - Excerpts:

"Fears of a bubble in its booming domestic stock market has forced the Chinese government to relax investing rules.
The China Banking Regulatory Commission (CBRC) announced late on Friday that it would let Chinese financial institutions invest in overseas equities for the first time.
The news sent Asian stocks listed in Hong Kong, or "H-shares", soaring to record highs today, with analysts predicting further gains to come.
The Hang Seng China Enterprises Index, which tracks the performance of all the Hong Kong listed H-shares of China enterprises, closed at 10,948.72, up 5.36pc...

Dr Gong said: "This is generally a very positive story for emerging markets in Asia, and in particular for Hong Kong."
Investors can expect the new rules to drive the Hang Seng up more than 10pc this year, Dr Gong forecasts, to beyond the 22,000 level."

Mikal-- China chose a good time to let the air out, especially as it is only days or months at most IMO before the yen carry and cheap yuan begin major reversals.
China will buy western equities only if the price is right, at least as far as the smart money goes, and may not have to wait long to join bottomfeeding bankers. The average Chinese may not do as well. The savvy there at least so far are staying away from the most risky assets:

"Under the new rules, Chinese commercial banks can invest up to 50pc of the funds collected under QDII program (qualified domestic institutional investors program) in overseas equity and equity-linked products, but not hedge funds, commodity derivatives or securities rated lower than "BBB".
Investors will need a minimum of 300,000 yuan to buy these financial products.
In a report yesterday, Dr Gong and colleague Lan Deng said that the new rules were the "first step" to cool off the overheated market.
They said that the Chinese savings pool of more than US $4.6trillion has proven to be too big for the domestic stock market, and that more Chinese money from the expanded QDII and China's effort to diversify its US $1.2trillion (and still counting) official foreign exchange reserves would be there for global equities, not just resources, oil and commodities.
Emerging markets should benefit as most Chinese investors would want to have a natural hedge against renminbi appreciation, and Asian currencies are also likely to appreciate over the long run along with renminbi to provide the hedge."

mikalHedge funds boogie with CBsters in the eleventh hour#1549195/14/07; 18:45:30

Monday view: The secret world of hedge funds
Ambrose Evans- Pritchard | Last Updated: 3:06am BST 14/05/2007 --Excerpts:
"The world's top 25 hedge fund managers earned an average of $570m each last year, despite the crush of 8,000 funds all competing for a smidgeon of extra yield in the global marketplace. That much we know.

Dr James Simons, a maths PhD and former cryptanalyst for the Pentagon, netted $1.7bn at Renaissance Technologies Corp, followed by Citadel's Kenneth Griffin on $1.4bn.

Less known is how the stars operate, and how they view the world. For a glimpse into their clandestine affairs, try Steven Drobny's book, Inside The House Of Money, based on long lunches with 13 American, British and European fund managers, each a legend in their own sector, and each replete with tales of how they nearly "blew up" - hedge fund parlance for going bust."

Mikal-- Evans-Pritchard is among the chosen designates continuing to push back the boundaries of sanctioned discussion. Key to their acceptance is facile manipulation of trigger words and concepts to dutifully invoke their intended effect on opinions and the direction of financial and investment movers and shakers. I leave it to others to interpret the ensuing and final phantasmagoria!

"Hedge fund man is by nature a contrarian. He - rarely she - bucks consensus as a way of life, profiting whenever the price of any asset, derivative, or country, looks out of whack."
Mikal-- "Out of whack"! And to think we still get whacked for thinking things are whacko!

"No surprise that so many view the current blow-off rally in junk bonds and Chinese stocks with deep suspicion, a sign that the cycle is nearing a top."
Mikal-- This article is full of them- take "blow-off rally" for example- what nerve! ;)

"More unnerving is the number who fear something worse, afraid that governments may have upset the workings of capitalism by holding interest rates too low for too long - that is, by mispricing credit. The villain of this book is former Fed chief Alan "Easy Al" Greenspan."
Mikal-- Pritchard introduces his new boogieman- the CBsters!

"My gut feeling is that there will be a lot of pain because we still have to pay for the 1990s, and that worries me," said Christian Siva-Jothy, founder of SemperMacro."
Mikal-- There are more quotes in this article which will never see the light of the USA day outside of USAgold.

"Dr Wadhwani politely accused the Fed and old MPC colleagues of fatally ignoring property and asset inflation. "If you take your eye off the ball vis-à-vis asset price misalignments, then you are storing up trouble. What you've got now is huge asset market distortions and one of these days the chickens will come home to roost," he said.
"Alan Greenspan has always argued that it's better to deal with a bubble after it has burst than to worry about pre-empting the bubble. I take a different view," he said.
As for Britain, Mr Wadhwani said that the MPC should have tightened interest rates earlier to cool house prices, even if inflation fell below target.

Like others, Jim Leitner from Falcon Management is waiting pensively for the denouement. "Right now there are a lot of bad things lurking, but I'm just not sure when we're going to fall on the knife," he said.

Or take Scott Bessent, from Bessent Capital: "At some point, we will have the Big One. It's out there. I don't know whether it's financial asset depression, or a real depression. Financial assets can't keep doing what they're doing, with so many people rewarded for being imprudent," he said.

Or the anonymous currency guru in the last chapter: "When you look at the whole world and see what it's built on, it is totally, clearly not sustainable. I get so bearish that I think about buying a castle in Scotland and moving up there with a couple of loaded shotguns and a truckload of canned food," he said.
Regulators are now fretting, afraid that the funds have grown too big. They warn that speculators clustered on the same trades might lurch en masse across deck, capsizing the boat.
That is a self-serving critique. Hedge funds have multiplied in a sea of credit, and who is ultimately responsible for that excess credit? Central banks, of course...."

Chris PowellVisiting London, IMF director threatens gold market again#1549205/14/07; 18:52:33

IMF Still Eyeing
Gold Sales
to Fill Income Gap

From Reuters
Monday, May 14, 2007

LONDON -- The International Monetary Fund is still considering whether to sell 400 tons of its gold stocks to help plug a widening income shortfall, the head of the global lender, Rodrigo Rato, said on Monday.

The IMF announced on January 31 that it was considering recommendations by an independent panel, including the sale of gold, after demand for IMF financial assistance has almost dried up, prompting an income shortfall of $165 million for fiscal 2007.

The IMF forecast that income gap would widen further to about $224 million in the next fiscal year.

"If the fund is to remain effective and legitimate, it must be properly financed," Rato, the IMF's managing director, said in text prepared for a speech to British members of parliament.

"I will make specific proposals based on the report (of the panel) over the next few months," Rato said, listing gold sales among the measures under consideration.

The gold sale is one of several measures recommended by the committee that included former U.S. Federal Reserve Chairman Alan Greenspan.

The 400 tons of gold represents about one-eighth of the IMF's 3,217 tons (103.4 million ounces) of gold stocks, and it is worth about $68.4 billion at current market prices of around $669.00 an ounce.

DruidWhat an Idea...#1549215/14/07; 21:02:32

Council on Foreign Relations on U.S. Dollar: "An Absurdity… Supported Only by Faith"
May 9th, 2007

"So what about gold? A revived gold standard is out of the question. In the nineteenth century, governments spent less than ten percent of national income in a given year. Today, they routinely spend half or more, and so they would never subordinate spending to the stringent requirements of sustaining a commodity-based monetary system. But private gold banks already exist, allowing account holders to make international payments in the form of shares in actual gold bars. Although clearly a niche business at present, gold banking has grown dramatically in recent years, in tandem with the dollar’s decline. A new gold-based international monetary system surely sounds far-fetched. But so, in 1900, did a monetary system without gold. Modern technology makes a revival of gold money, through private gold banks, possible even without government support."

Druid: "Freegold" baby, that's what it means, with a few birthing pains along the way.

TownCrierFood for thought#1549225/14/07; 22:15:53

The quote from Druid's article:
"Modern technology makes a revival of gold money, through private gold banks, possible even without government support."

Insofar as gold owners are concerned, this is certainly nothing to be wishing for. If there is anything that might stop the present upward trend of gold dead in its tracks prior to it reaching to its heights of fair-market physical valuation against other goods and priced in the multi-thousand$, it is the rise/resurgence of gold banking. For that is precisely how the amount of gold contained in that grand ounce-sized American coinage from the previous century was able to be frozen for so long at a mere $20 tag in the marketplace.

A savings vehicle will lose its full usefulness if as a sort of accounting unit it is then put through the familiar banking procedures of deposits and loans and thereby inflated in like fashion to ALL currencies past and present.

As thinking men with an eye to our history, I should like to say we are not doomed to repeat the mistakes of our past. Do not support gold banking in any way, shape or form. Outright gold ownership (which includes holdings of unlent public reserves and private property) is the proper course for a thinking man on any scale of operation in this enlightened day and age.


ChallyContagion Sweeps Through "Other Castle" !! #1549235/14/07; 22:57:02 3

Whew! We are definetly not in Kansas any more.

While browsing through some posts at that other place, I ran across a video of an interview with K--co's John Nadler. The whole thing seemed so contrived and surreal, I had to wonder what the motivation for such an absurd piece could be.

I couldn't even imagine our gracious host spouting such trash, which would not only be contrary form a business standpoint, but also tries to trivialize the fundamental facts that underpin this gold bull.

Really unbelievable stuff........but judge for yourself.Just follow the link to the video.

smiles45E-gold solution#1549245/15/07; 01:09:30

Any comments?/P

US Government Forces E-gold Redemptions - Seizes Gold
This article is Copyright 2007. You may re-publish for free it if left intact and only if you give credit with weblink back to


In an unprecedented move on or just before Wednesday May 9th, 2007, the United States of America has forced Omnipay et al E-gold to redeem all the gold backing the 58 previously frozen accounts owned by e-gold, 1mdc, icegold and a handful of other exchangers and customers to be liquidated effective immediately to a us dollar account owned by the federal government.

According to the reduction in the gold bar list, the bar count
has dropped by 48 bars of approximately 400 oz each between May 3, and May 9.

This redemption totals USD $11.357 Million.

Date Gold Grams ($ Value)
03-05-07 3,489,436 77.015 Million
09-05-07 2,974,871 65.668 Milllion

Gold Bars value Sold: USD 11.357 Million

MoneyNetNews has learned from a reliable source that e-gold has been ordered
to hand over a fresh copy of the customer database when the redemption
is completed.

MoneyNetNews cannot confirm if all of the 48 bars redeemed account for
the forfeiture action of the United States. It is possible that a part
of this activity can be accounted for by increased volatility in e-gold's
general market.

Not only was E-gold / Omnipay ordered to convert gold (and silver) holdings
in the seized accounts into US Dollars, but that included their own
(Omnipay's, and E-gold's) frozen (seized) accounts. This will ultimately
result is great losses of value over time even if the victims of the seizures
are found to be innocent due to the in progress bull market in gold and bear
market in US Dollars.

The seizure order appears to be unrelated to the criminal case in progress
against E-gold and OmniPay in that the seizure of the accounts by the government
was done under a (separate) civil case, for which the Government has yet to file

By doing so, the government was able to seize accounts without having
to reveal anything to the owners of the accounts themselves. By law,
the government has 30, and possibly up to 90 days to file a complaint.

Until the government civil filing is done, none of the victims of the seizures
can possibly do anything to defend themselves, not even obtain information as
to why their accounts have been seized, or what they would have done wrong.

None of the victims of the account seizures have been advised of anything
officially at this time.

TownCrier"Any comments?" Sure.#1549255/15/07; 03:34:13

People across the nation in 1933 discovered that their gold, when held in the banking system, was not only vulnerable to unwelcome disappearance via the ever-dreaded RUN on a bank, but it also ultimately proved vulnerable to an actual confiscation by the government. It was truly a sitting duck that simply could not fly.

And this latest event should simply serve as a word to the wise -- a gentle reminder that you should first and foremost keep your gold out of banking accounts or payments systems.

Strive to keep your metallic property as uniquely under your own control as you would any other prized family heirloom.

(Note that I would hasten to differentiate that, for purposes of security, gold residing in a personal safe deposit box is NOT akin to gold more vulnerably held within a banking account or payment system. But ultimately, ones own comfort level with SD boxes is for each person to evaluate for himself in light of their range or limitation of viable alternatives.)


TownCrierA USAGOLD website administrative note#1549265/15/07; 03:57:45

According to our currently laid plans, later this morning Jeff and I shall endeavor to switch the website over to a newer server.

The primary nuisance, unavoidable in this process, is that most of us outside users may experience difficult if not impossible access to the site for a period of 12 up to possibly 72 hours as a result of IP caching issues.

On the up side, we'll have an improved forum with a new posting interface that has a very short learning curve. After your first or second post you'll have it mastered, and will likely agree that it is more robust and user-friendly that current/old one.

But on that same score, we're faced with the nearly daunting task of reassigning all of your handles and passwords to each of you. We'll try to identify the most prolific posters and automatically activate their handle/password pairs (note, to post on the new forum you must login with a case-sensitive entry of your current handle and password pair), but if you want to ensure your most timely assignment of posting privileges, simply resubmit the registration form at any such time as you see that the new forum is indeed operational.

I'll try to keep you posted of any pertinent developments.


White Roseregenerating user name/password combinations#1549275/15/07; 04:07:17

In my day job, I wrote some software to maintain a simple database of user name/password combinations. Every so often, I could issue a report about users missing from the database. The key trick is that my code could issue a batch file which, when run would insert all the user name/passwords on a new server. You know my e-mail address. Contact me to see if some of my tools might help you.
TownCrierThanks for the generous offer, White Rose#1549285/15/07; 04:28:15

The particular challenge in this case is that in addition to a radical change in forum application software from one server to the other, we are also significantly changing the OS platform from one to the other, thus making any automated transfer of handles and passwords a nearly insurmountable challenge -- to the point where it is simply easiest to reissue codes to those who are still active participants.

And no worries -- in the process we can at least assure you up front that nobody's well-worn handle will be reassigned to somebody else. (Although I must confess that I'm more than tempted to offer 'TownCrier' to somebody who might be able to put it to better use.)


devil's advocateANOTHER#1549295/15/07; 05:55:44

Hello Another
Your perspective is fascinating. I have begun to study your teachings.
American blue collar workers, I know, are saying that gasoline will go up from $3 to $4 within the next month or two.
Last year's 10% drop in the dollar will speed up if OPEC does not increase supply due to usa losing Nigeria's oil.
I speculate that Saudi Arabia is using oil to get usa to war on Iran.
If usa-iran war, then usa will be (massively-?) attacked at home. The markets would close, gold unbuyable and unsellable. Never mind confiscated.
Best Regards

Chris PowellLeave hedge funds alone, Bernanke says#1549305/15/07; 06:53:52

At least until they crash -- then bail their big creditors out?

* * *

Market Principles Should Top New Rules, Bernanke Says

From Reuters
Tuesday, May 15, 2007

WASHINGTON -- Federal Reserve Board Chairman Ben Bernanke on Tuesday argued in favor of developing a British-style, principles-based approach to U.S. financial market regulation rather than new rules for each new financial instrument or institution.

In remarks prepared for delivery via satellite to a financial markets conference sponsored by the Atlanta Federal Reserve Bank in Sea Island, Georgia, Bernanke did not address Fed monetary policy or the U.S. economic outlook. The text of his address was made available in Washington.

He said the rapid growth of the credit derivatives market and the increasing prominence of hedge funds did not warrant specific regulation to address possible risks that they pose.

"I will argue that central banks and other regulators should resist the temptation to devise ad hoc rules for each new type of financial instrument or institution," Bernanke said. "Rather, we should strive to develop common, principles-based policy responses that can be applied consistently across the financial sector to meet clearly defined objectives."

Bernanke said development of a principles-based approach is consistent with recent U.S. guidance on hedge funds, which did not call for any new regulations to mitigate potential risks that the massive pools of capital pose to the financial system and economy.

Instead the guidance, developed by the U.S. Treasury Department, the Fed, the Securities and Exchange Commission, and other regulators, suggested that those risks would be kept in check by market discipline, due diligence by hedge fund creditors, counterparties, and pension funds, and with adequate disclosures to sophisticated investors.

Bernanke said the hedge fund guidance makes clear that regulators and supervisors should adopt a principles-based approach similar to that used by Britain's Financial Services Authority, with a regulatory focus on the areas with the biggest potential risks.

He said the guidance emphasizes that "risks to financial stability are best addressed by focusing our attention on the large institutions at the core of the financial system." These firms also happen to be the leading dealers in credit derivatives markets and the principal counterparties and creditors of hedge funds, he noted.

The application of rules is consistent with a principles-based approach, Bernanke said, noting that the FSA has an 8,500-page rulebook to support its 11 main regulatory principles. In fact, rules can provide clarity or a "safe haven" from legal and regulatory risks, but they "should implement principles rather than develop in an ad hoc manner," he added.

Bernanke said a narrowly focused approach to regulation could provide incentives for "regulatory arbitrage," driving investors to less-regulated financial instruments if rules are not applied consistently to instruments or institutions that pose risks for policy objectives.

He said the biggest objectives should be ensuring financial stability, investor protection and preserving the integrity of the market.

Rapid financial innovation has presented challenges to these objectives, particularly with the complexity of contemporary instruments and trading strategies, the potential for market illiquidity to magnify the riskiness of such instruments and the greater use of leverage that they often entail.

A principles-based approach would be better than ad-hoc rules for addressing such risks and taking into account financial innovations.

"To avoid moral hazard and let market discipline work, investors must be allowed to bear the consequences of the decisions they make and the risks they accept. But investors are entitled to the information they need to make decisions appropriate to their personal circumstances," Bernanke said.

CometoseCOT#1549315/15/07; 08:51:57

I have been on journey but want to report the following for Commercial traders and their activities for last week

The commercials for Silver were net long 760 contracts

The commercials for Copper in combined futures and options trades were net short 860 contracts approximately

The commercials for Gold in combined futures and options positions were net short 6600 contracts

These figures come out on Friday noon but cover through mid week only .

mikalLBO's and "structural risk" fly, credit quality sinks#1549325/15/07; 09:08:46

Junk Bonds May Repeat Crash of 2002 on Increased Leveraged Buyout Credits | Bloomberg | 05-15-07
mikal"Data" releases#1549335/15/07; 09:23:20

At least 5 seperate "data" releases today, are covered in this article:
Monthly capital flows to U.S. fall back in March - MarketWatch - May 15, 2007

devil's advocateoil/gold speculation#1549345/15/07; 11:11:32

I speculate that oil will go higher, and gold, because saudi arabia wants usa-iran war or to purchase nuclear-tipped missle systems from usa

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