USAGOLD Discussion - August 2002

All times are U.S. Mountain Time

Black Blade
(08/01/2002; 03:12:28 MDT - Msg ID: 82005)
Koizumi says no retreat on Japan bank deposit plan
http://biz.yahoo.com/rf/020801/economy_japan_koizumi_1.html
Snippit:

TOKYO, Aug 1 (Reuters) - Japanese Prime Minister Junichiro Koizumi promised on Thursday to forge ahead with his reforms, including plans to end full state protection of bank deposits, but hinted again that there was some room for retreat. "This is when the Koizumi cabinet's reforms will really get on track," he told a news conference, responding to critics who say he has failed to match bold reform words with deeds. The government aims to lift its full guarantee on savings accounts next April in what analysts see as an important step in bringing the nation's financial system up to international standards.


Black Blade: It appears that the next April Fools Day Surprise is still on the table. There have been mixed signals that the guarantee would remain in place. The confusion had helped to dent the POG in Japan earlier this morning.

Black Blade
(08/01/2002; 03:26:58 MDT - Msg ID: 82006)
Former WorldCon Executives Arrested

Former WorldCon CFO Scott Sullivan and Controller David Myers are to be arrested today. Looks like another "Perp Walk" before the cameras this morning. No word on former CEO Bernie Ebbers. Looks like a lot of "entertainment" on tap for today.

- Black Blade
Black Blade
(08/01/2002; 03:40:08 MDT - Msg ID: 82007)
Gold Drops, USD rises, and Market Index Futures Tank
http://www.mrci.com/qpnight.asp
Wow!!! With all the horrible news including renewed terrorist activity, slumping markets, corporate scandals, deepening recession, war preparations, etc. and what happens? Gold sinks below $300 an ounce. Looks like a bargain. Petroleum prices are static though more rumors abound that the natural gas storage numbers are being questioned again. The USD is stronger and no one really seems to know why except that foreign currencies are crap. The US market futures are sinking lower though if there is a lot worse economic news then the stock markets will probably rocket higher - at least that appears to be the new paradigm - or the Gomez Addams approach to investing. "Intersting Times"

- Black Blade
misetich
(08/01/2002; 05:12:29 MDT - Msg ID: 82008)
Ifo cuts German forecasts as recovery doubts mount
http://www.forbes.com/newswire/2002/08/01/rtr683251.htmlSnip:

Ifo, which publishes the monthly Ifo business climate index seen as the best leading indicator for Europe's largest economy, lowered its forecast to 0.7 percent this year from the 0.9 percent it and Germany's five other top economic institutes predicted in April.

It cut its projection for 2003 growth to 2.3 percent from 2.4 percent. The recovery from last year's downturn was still underway, but was very fragile and at risk from financial market turbulence caused by accounting scandals in the United States, Ifo said.

Misetich

From Continent to Continent we are witnessing ANOTHER global economy slowdown

How will these slowdowns affect derivatives? Credit? Debt? Banks?

Got gold?



misetich
(08/01/2002; 05:34:25 MDT - Msg ID: 82009)
Questions on Halliburton Deal Under Cheney
http://www.nytimes.com/2002/08/01/business/01HALL.htmlSnip:

By JEFF GERTH and RICHARD W. STEVENSON

WASHINGTON, July 31 � With Washington focused on corporate responsibility, Vice President Dick Cheney's tenure as chief executive of Halliburton is under scrutiny from government investigators and his political opponents.

Most of the attention has been focused on a Securities and Exchange Commission investigation into changes made by the company in its accounting practices for construction projects while Mr. Cheney led Halliburton.

But the company and its shareholders have also suffered from the hidden costs from a deal that was, at the time, the high point of Mr. Cheney's five-year Halliburton career: his acquisition in 1998 of Dresser Industries. The deal, which Mr. Cheney hailed as a "win-win" merger, ended up saddling the company with the growing costs of legal claims from people who say they were injured by or are at risk from asbestos in products made by Dresser and a former Dresser subsidiary that was spun off in 1992.
............
At issue now is whether Halliburton under Mr. Cheney was aggressive enough in investigating the asbestos liabilities it was taking on in acquiring Dresser, and whether it adequately informed shareholders of the risks at the time they were asked to approve the deal.

Previously undisclosed court documents show Dresser was notified a month before the merger that it might face greater asbestos liability from its former subsidiary than it had disclosed. Halliburton said it was kept in the dark by Dresser about the greater risks until after the merger was completed.

Halliburton's stock price has fallen sharply as the extent of the asbestos problem has become clear since Mr. Cheney left the company to join the Republican presidential ticket in August 2000.

Mr. Cheney sold nearly $40 million in Halliburton stock about the time he left the company at prices above $50 a share. He had said he would sell his Halliburton stock if the Republican ticket prevailed in the fall. The stock closed today at $13.20.

*************

Misetich

We wait patiently as the corporate governance laws are applied. Nobody is above the law right?

Got gold?

misetich
(08/01/2002; 05:50:16 MDT - Msg ID: 82010)
Economic Crisis Swells in S. America-Argentina's Neighbors Swept Up in Turmoil as Some Investors Flee
http://www.washingtonpost.com/wp-dyn/articles/A28776-2002Jul31.htmlSnip:

By Anthony Faiola
Washington Post Foreign Service
Thursday, August 1, 2002; Page A01


MONTEVIDEO, Uruguay, July 31 -- Several additional South American countries have been swept up in what is becoming the region's worst economic crisis in two decades, igniting fears of a replay of the Latin American financial collapses of the early 1980s.

The crisis, which analysts had hoped would be contained to Argentina's financial meltdown six months ago, has now spread to its neighbors Brazil, Uruguay and Paraguay. It has threatened to engulf other politically unstable economies in the region as well, including Bolivia and Venezuela, where analysts predict deep recessions for this year.

But this week, investor flight has particularly hit Argentina's immediate neighbors. In Brazil, Latin America's largest economy, government bonds have fallen to half their face value in recent weeks because of fears of a government default. The Brazilian real, in a tailspin that has lowered its value against the dollar by 19 percent this month, today touched its lowest point since going into circulation as the national currency in 1994.

Paraguay has come face-to-face with the prospect of a banking collapse and a deepening recession. Here in tiny Uruguay, dubbed the "Switzerland of Latin America" for its rock-solid financial system, government officials trying to stave off a debt default are seeking an immediate loan from the International Monetary Fund, the U.S. Treasury and other major foreign lenders.

.............
To ease the pressure, the Uruguayan government was forced to close banks Tuesday for the first time in 20 years
...........

************

Misetich

From continent to continent Global economic slowdown is accelarating
Latin America is a big market for US products - US bank exposure is much larger in Brazil than it was in Argentina

Got gold?
misetich
(08/01/2002; 06:04:34 MDT - Msg ID: 82011)
Allianz May Cut 3,000 More Dresdner Jobs After Loss (Update6)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APUkYuRQCQWxsaWFuSnip:

Munich, Aug. 1 (Bloomberg) -- Allianz AG, Europe's largest insurer, may shed 3,000 more jobs at Dresdner Bank AG, 6 percent of the unit's workforce, after a surprise second-quarter loss.
...........
Industry Slump

Since the end of 2000, European banks have announced almost 83,000 job cuts as slumping equity markets and a rising number of corporate bankruptcies eat into earnings. Deutsche Bank AG, Europe's No. 1 bank, has so far said it's shedding 13,000 jobs.

Dresdner has eliminated 5,000 of the 8,000 positions it planned to cut, Fahrholz told reporters in Frankfurt today.

************

Misetich

Banks, insurers, earnings, portfolios deteriorating - Will they improve as the Global economy slowdowns further?

Got gold?
misetich
(08/01/2002; 06:08:21 MDT - Msg ID: 82012)
Deutsche Bank, BNP, Barclays Expect No Profit Rebound (Update3)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APUkOeBVqRGV1dHNjSnip:

By Silje Skogstad

London, Aug. 1 (Bloomberg) -- Deutsche Bank AG, BNP Paribas SA and Barclays Plc, three of Europe's biggest lenders, reported lower earnings and said they see no signs of improvement.

Banks are reporting shrinking net income as corporate defaults drive up loan losses. Slumping stock markets also are battering profits because Deutsche Bank, BNP Paribas and Barclays depend on revenue from investment banking.

``The current market environment is a challenge for all of us,'' Deutsche Bank Chief Executive Officer Josef Ackermann said in a letter to shareholders. ``Going forward, we take a cautious view on the world's financial markets and major economies.''

Frankfurt-based Deutsche Bank posted a 76 percent slump in second-quarter net income after more than doubling provisions for bad loans to 588 million euros ($575 million).

BNP Paribas, France's No. 1 bank, said its second-quarter profit dropped 13 percent and Barclays of the U.K. said its first- half earnings fell more than expected.

``It's quite difficult for banks at the moment,'' said Carsten Gerlinger, who helps manage about 800 million euros at DZ International in Luxembourg, which holds Deutsche Bank shares. ``Perhaps, we will still see some more bad news.''

Slashing Jobs

Deutsche Bank, Europe's largest lender, said second-quarter net income fell to 204 million euros, or 32 cents a share, from 834 million euros, or 1.67 euros, in the year-earlier period. The company is slashing costs, including the elimination of more than 14,000 jobs, and shedding assets to try to bolster earnings.

***************
Misetich

Will corporate defaults increase as the world economies slowdown?

Got gold?

Rock
(08/01/2002; 08:23:34 MDT - Msg ID: 82013)
Waverider
Thanks for the encouragement my friend. I know this is a business setting but let me get personal for a moment. You know Waverider when I listen (or read) some of the conversations here at the round table I observe human compassion displayed that totally intrigues me. That's one of the reasons why I chime in on rare occassion after all I've been a guest here at the castle since 1999 and I've probaby only posted ten messages or so in all that time.

What I have noticed is when someone is hurting, others are there to offer support and incouragement and sometimes that can make the whole difference in a persons day or even life. Words are very powerful, we all know that.

For example when Robotguy got the pink slip I felt that my story may give him a little bit of encouragement even if from an unknown such as myself. In my brief existence here on this great planet earth one of the great discoveries I have made about people in general is that they carry to much emotional luggage around with them. If you could see those emotions with your naked eye some of us would be carrying 200 pound backpacs around with us everywhere we went.

At a few points in my life I felt like I too was carrying that 200 pound pac as I would guess many others have felt on occasion. Thats why so many Americans as well as other countries have to take every thing from valium to xanex or whatever just to deal with everyday happenings. The greatest waste of life are the things we worry over.

I just take this day that I have and even if it seems mundane at times I count it worthy of my best attitude and disposition. Its in mundane moments that you may think nothing you say or do can make a difference in somebody's life because you don't witness the outcome but I learned "after the fact" that many times what I said or did in one of those moments actually did make a difference. I just had to quit dwelling on me me me and redirect my attention to whoever was hurting, the process brought healing and comfort to me.

Never give up hope because hope is the fuel of the future. I try to get a hold of my emotions and don't let them run free because its so easy to just let those emotions have their way. I learned to fix my attention on the objective not the obstacles. Its character I'm after not comfort, you won't read that in Peoples Magazine. It isn't easy, practical or swift advise but well worth the effort. As our fine Nobel Sir Mr. Gresham said the other day in so many words, knowledge without application is useless.

A few things they didn't teach me in school is that life isn't fair and the world won't care about your self-esteem. For encouragement I read books about some of the great individuals that has influenced my life such as Sir Winston Chruchill for example. He over came such great odds not only with his health and personal life but in his political career and with WWII to boot all working in harmony like the perfect storm in his life yet he overcame his obstacles. As BlackBlade said in simple terms, making lemonaid out of lemons.

When I compare some of the obstacles that I have over come or am faced with next to some of the challanges that others have gone through and are going through, my problems dissipate to nothing in comparison. A quick walk in your local hospital offers some shocking perspective adjustments thats for sure. Moving along here, I don't want to sound like I'm preaching to the choir.

Hey PH in LA I enjoyed msg 81991 well put and straight forward. I just love this forum. There are so many comments I could make to so many great nobles and nobletts here at the castle but time does not privledge me to do so and on that note.

Have a great day to all,

Rock.
sector
(08/01/2002; 08:50:39 MDT - Msg ID: 82014)
S&P 500 index sweats through 8% loss in July
http://www.usatoday.com/money/markets/us/2002-07-31-mart_usat_x.htmBy Adam Shell, USA TODAY
NEW YORK � Investors may welcome the dog days of August after the bite their portfolios took in July.

Pct. change
2002 -7.9%
1974 -7.8%
1975 -6.8%
1969 -6.0%
1986 -5.9%
Source: Sam Stovall of Standard & Poor's

Despite two rallies in the past six sessions that raised hopes stocks had finally hit bottom, the Standard & Poor's 500 fell 7.9% last month, its steepest July drop in more than a half-century.

Still, investors were heartened by the ability of the broad market gauge to rise Wednesday, despite a spate of fresh economic data that suggest the budding recovery is slowing.

Indeed, a government report that the economy grew half as much as expected in the second quarter didn't prevent the S&P 500 from clawing its way to a 1% gain to 912. But for the month, all 10 of the S&P's industry sectors finished in the red.

Skeptics say more weak economic numbers like Wednesday's could place renewed pressure on stocks.
+++++++++++++++++++++++++++++++

It's tough propping all those 500 stocks at once.
sector
(08/01/2002; 09:10:10 MDT - Msg ID: 82015)
Japan's July New-Car Sales Slid 5.8% in 11th Straight Tumble
It's the "Strong" Yen Stupid!Business - Dow Jones Business News
Thu Aug 1, 2:45 AM ET

TOKYO -- Japan 's sales of new cars, trucks and buses, as measured by registrations, fell on year in July for the eleventh straight month as lingering economic weakness kept consumer sentiment under pressure.

Sales in July totaled 367,902 units, down 5.8% from the same month a year earlier, the Japan Automobile Dealers' Association said Thursday.

The on-year percentage fall, however, is relatively limited compared with the 8.9% decline in the June.

+++++++++++++++++

This is the reason that the Yen must fall back to the 133-135 area soon, thus the dollar will fall too as the Japanese authorities will stop buying dollars and start selling yen.

Their largest industrial giants are in trouble�it getting close to "Every man for himself" time.

So...as the yen moves back to 133 the Japanese gold bugs will come out again. It's as easy to predict as snow on the top of Mount Fuji.

mdgc
(08/01/2002; 09:41:11 MDT - Msg ID: 82016)
today's dive in the dollar
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=swhat triggered the drop in the dollar and the spike in gold?
Waverider
(08/01/2002; 10:00:00 MDT - Msg ID: 82017)
mdgc: Spike
http://www.kitco.com/charts/livegold.htmlNot sure...maybe Exon's 41% slide in earnings in the last quarter, the slow pace of expansion in U.S. manufacturing, Worldcom former CFO arrested by the FBI...delayed reaction to yesterdays GDP revisions...PPT has gone fishing today...Spike is scary when he growls and instills fear...hmmmm maybe panick when he's let loose....

The dollar does look likes it's in freefall mode though. Cheers,
Waverider
TownCrier
(08/01/2002; 10:14:23 MDT - Msg ID: 82018)
With luck, you will never personally know how CLOSE we are to the brink...
http://biz.yahoo.com/rf/020801/economy_bush_lunch_1.htmlHere are two that know.

HEADLINE: Bush, Greenspan to review economy over lunch

WASHINGTON, Aug 1 (Reuters) - U.S. President George W. Bush on Thursday will host Federal Reserve Chairman Alan Greenspan for lunch to review the U.S. economic outlook following a second-quarter growth slowdown, the White House said.

...White House spokesman Ari Fleischer said the lunch was one in a series of "periodic" meetings Bush holds with Greenspan.
-------------

Study the past two years of monetary events in South America, gathering momentum.

R.
Bush, joined by Treasury Secretary Paul O'Neill, would meet Greenspan to review the "status of the economy, to listen to Chairman Greenspan's thoughts and ideas ... listening to the chairman's thoughts about the future of the economy," Fleischer said.
USAGOLD / Centennial Precious Metals, Inc.
(08/01/2002; 10:24:18 MDT - Msg ID: 82019)
Currency, Stocks, Bonds, Futures, Options... Don't be at the mercy of these various inflatable representations of wealth
http://www.usagold.com/ProductsPage.html

gold sovereigns
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In the final analysis -- in times of stress -- paper is only paper.

How solid is your portfolio?

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Mr Gresham
(08/01/2002; 10:26:35 MDT - Msg ID: 82020)
"Wait till your father gets home!"
Woke up this morning with an outline of the attitude behind controlling gold -- the whole $1-$2 limit up allowed per day, then the jumps which then consolidate and volatility nearly disappears short-term once more. This time "they allowed" the 310-320 range for awhile, then suddenly it gets "spanked" back down toward $300 (Dad must have been delayed on the subway), but then stabilizes there.

Buyers and sellers are all interested in only these $3-$5 moves, day after day? 1% up, 1$ down. WHO is making a living doing this, if it were a normal market. It is hardly even the shadow of gold market moves pre-1995, is it?

The word "orchestrated" seems too mild to describe the continual suppression of volatility, and the quick containment of occasional outbursts. Now, however, the time intervals between volatility outbursts are getting shorter and shorter. The dealer's "tell".

This whole battle -- being fought out in the 270-320 range -- FOR YEARS! How will the history of markets assess this? Does this look like the normal action of any market, in any era?
Canuck Gold
(08/01/2002; 10:55:32 MDT - Msg ID: 82021)
Euro equivalent gold price
In light of this morning's action in gold, I was mulling over the recent movements in the price, trying to rationalise what was going on and figure out where it might be headed, when it occurred to me that maybe I should be looking at the price in terms of euros instead of US dollars. Through most of the end of last year, gold was trading around US$280, give or take, and the euro was around US$0.89, give or take. So an ounce of gold was around 314/315 euros. Since then the world has gone to Hell in a hand basket and in euro terms, gold right now is at 309. So, even though we're supposed to have been in a period of gold resurgence, in euro terms the price has dropped. Even when gold was holding at US$323 and the euro was at par, you couldn't really say that gold had taken off in euro terms.

I don't see how the US dollar can go anywhere but down from here based on the current economic climate, so in euro terms the price has to go up just to stay even. I can understand why institutional investment managers may have unloaded gold shares last week to take profits in gold and avoid the realisation of losses elsewhere. But if what we have witnessed over the past few days in the stock markets has been a bear market bounce, gold and gold shares will have been passed from weak to stronger hands, and the next leg up will be greater than the last one.

That's the view from here.

CG
Boxman
(08/01/2002; 10:59:47 MDT - Msg ID: 82022)
James Glassman (co-author of Dow $36,000.00) on CNBC
He is still sticking to his guns. He said that when the book was written, that stocks were under valued, and even more undervalued today. He said that he thought that by the end of the decade, the dow would be at $36,000.00. Buy and hold is his mantra. It would be nice to be privey their personnal stock history to see how they adhere to this buy and hold gibberish.

When people like him, Abby, and the too many to mention shills are no longer invited to speak on the markets, is one indicater that we have reached the bottom.
sector
(08/01/2002; 11:12:26 MDT - Msg ID: 82023)
Mr. "G" We are on a Forced Gold Standard
Where Interest Rates are Also Controlled so.......inflation [The general price level] is also be controlled.

All this was stipulated by Lawrence Summers and Robert Barsky in "Gibson's Paradox and the Gold Standard" in the 1988 Journal of Political Economy.

See...the good Professor Summers discovered that in a gold standard regime, interest rates and the "General price level" varied inversely. He and his partner studied data way back and therefore had found a formula for what we now know to have been the "Goldilocks" economy...a kind of economic utopia.

This Master Plan was put into place for good in the month of June 1996 when the cabal [Assembled by the Fed] succeeded by their concerted selling, in breaking the 200 day moving average of the price of gold to the downside. Thus they had demonstrated a full control of the price of gold.

Having grasped the utopian goal of no inflation through a manipulated gold price, the Fed and it's acolytes began to figuratively rape and pillage the investment landscape.

Interest rate derivatives exploded 225% at JPMorgan Chase that quarter because there now was no threat of higher interest rates because the last remaining force that might move the dollar down, rising gold, had been vanquished. GSEs through Fannie Mae and Freddie Mac exploded for the same reasons...it was a sure thing, once higher interest rates were out of the picture.

These neo-alchemists forgot to tell their Master of the Universe one little thing.

They forgot that it would be necessary to sell tonnes and tonnes of a limited physical gold resource in order to keep this whole ponzi scheme afloat. So the IMF wrote rules to double count the central bank gold reserves in order to "Inflate " the actual metal deposits [IMF Statistical Accounting Seminar October 1999 Santiago, Chile].

That's not the only cockroach between the Boston and the Cr�me Pie.

The gold derivative "assets" [$41 Billion worth] on JPMs books aren't really assets at all since they came from a loan from the US Treasury and Fed. They must according to GAAP rules be called a liability [The conflict between IMF and GAAP meets HERE].

So Mr. Harrison, JPMs CEO, faces a dilemma on August 14, 2002. Does he certify that the gold derivatives are assets or liabilities. He could go to jail if he chooses the wrong accounting "door".

The web gets more tangled by the day...losing more gold...facing more heat from the inexorable diffusion of the truth.

It is the truth, in the end, that smashes corruption. The truth uttered sometimes from the lips of children.

So we are on a gold standard...that is sagging under the weight of gold loss and the growing, relentless, unstoppable assult of the truth.

The Fed's main thug, JPM is also sagging under the latest 10K report that says they have a $22 Billion "Goodwill" charge leaving them with only $800 Million in cash. Their derivatives house of cards is tilting steeply with a rumored $20 dollar per share contract trigger point. Enron's was $50 per share.

Financial Armageddon below a JPM $20 close. All the counter parties to all those gold [$41 Billion] and interest rate [$16 Trillion] derivatives...charred toast. It might even be a Fed- ending apocalypse.

So...there are many ways to envision the death throes of Summers "Goldilocks Economy".

sector
(08/01/2002; 11:25:09 MDT - Msg ID: 82024)
Latin American Financial Chaos
http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2002/08/01/national1127EDT0574.DTL
The Bush administration and the International Monetary Fund scrambled on Thursday to find ways to stabilize a worsening economic situation across Latin America.

The International Monetary Fund was conducting simultaneous negotiations with Brazil, Argentina and Uruguay in an effort to reach agreements to supply the countries with billions of dollars in additional loans to stabilize choatic financial markets.

Meanwhile, Treasury Secretary Paul O'Neill was seeking to undo the damage from remarks on "Fox News Sunday" that the administratin would oppose any new financial aid to Latin American without assurances that the money wouldn't simply "go out of the country to Swiss bank accounts."
+++++++++++++++++++++++++++++++++++++

Guess which big Fed bank has $3 Billion in Brazilian loan exposure?

JP Morgan Chase...Can we all say "Hello $20 per share"?
Operative
(08/01/2002; 11:54:01 MDT - Msg ID: 82025)
CNBC Asking, Do You Think You Will See 36,000Dow In Your Lifetime?
Here we have again the clueless media asking the wrong question. The question should be...Do You Expect To See
$36,000 Gold In Your Lifetime ?

However, in all fairness CNBC did offer up my vote for qoute of the day. It came from Arthur Cashin when asked about why the markets were struggling today. ( I assume in context on thier way to 36,0000.) Arthur quipped in his answer that with all the governments revisions on figures it appears one of the large accountanting firms has been doing the government books.

Operative
(08/01/2002; 12:17:38 MDT - Msg ID: 82026)
@ sector
So Mr. Harrison, JPMs CEO, faces a dilemma on August 14, 2002. Does he certify that the
gold derivatives are assets or liabilities. He could go to jail if he chooses the wrong accounting
"door".

After reading your post I went over to the huge calender on my wall, flipped it over to August and took my yellow highlighter and circled the 14th. I then took my red marker and drew a "smily face" inside the circle. I drew a J for one eye, a P for the other eye, and M for the mouth. Its quite ugly really, but is bringing a smile to heart and soul today.

Your post has stirred a desire to pick up the phone and call a buyer at Brooks Brothers to suggest a new product line for the fall season. Something in orange with white pin stripes.

Paper Avalanche
(08/01/2002; 12:17:47 MDT - Msg ID: 82027)
@ sector
Man, you are good. That is an incredible assessment of the current situation. Could you please elaborate what you meant by:

"Their derivatives house of cards is tilting steeply with a rumored $20 dollar per share contract trigger point. Enron's was $50 per share."

I think that I know what you are saying, but the quickest way for me to be wrong is to assume that I am right. If you have a chance to expand on this thought for this slow poke it would very much appreciated.

Take care and thanks for all you contribute to this forum.

Paper Avalanche
Belgian
(08/01/2002; 12:29:35 MDT - Msg ID: 82028)
@ Gresham
Making money in the 270$ - 320$ zone ! Yes, good Sir, *they* generate a lot of money out of this 20% range.
When you have quasi unlimited fiat-resources at your disposal and you are the "mover" of the price...no-one can beat you. Good old monopolist theories. Who dares to interfere with protected monopolists and within such a very narrow "trendless" price range ? cfr. Microsoft. The ultimate mega protected monopolist who doesn't even pay any dividend.

In the given circumstances, Gold cannot be cornered by any would be pirate. Permanent Accumulation of Physical is only adding pressure and forcing the monopolists to throw more fiat at the Gold derivatives. It is them who keep Gold's weight very inconveniently heavy for its price ! Smile Ari !
And indeed again Sir Gresham : Keeping things within a very well defined (price)range does serve a higher cause ! Hope you can profit from it and relax with your knowledge of the underlying. And that ridicule "range" already 3 years of age is reason that when POG moves 2 - 3 or 6 $ per ounce..."they" call it *spikes*. Let us have a good healthy laugh, shall we.

But the price "range" you mentioned is much older than the recent 3 years. In fact it is a 21+ number of years (since the 1980 ATH). Gold has been "ranged" after it went parabolic (1971 > 1980) and was in the process of radically imposing itself as THE FREE STANDARD ! And the super "price-ranging" of the past 7 years was necessary because of stealth accumulation pressure of the scarcing Physical ! The Anglo Saxon Gold barrons and their vazals do have to ridicule the above (my personal intuitive conclusions).
Gold commentary from the koelie-media are already boring for quite some time now. The many inconsistancies infiltrated on purpose are there to divert any serious attention on Gold's underlying fundamentals. The mantra that "there is no interest in Gold" is another lie added to all other blatant lies that is petfood for historians .

In other words : I do like very visible and time-extended price ranges. The best indication that something big is in store.


Mr Gresham
(08/01/2002; 12:53:07 MDT - Msg ID: 82029)
sector, Belgian
sector: I agree with Paper Avalanche -- you get better and better in your writings that marshal our available data into a few paragraphs. I was thinking about "G's Paradox", thinking about writing one with my name on it, and having something to do with interest rates (they'll stay down -- until they uncontrollably spike up!), but then we had a tooth-bashing tumble downstairs and I'm on a short fuse from here on out. Saving brain resources for the next emergency of the day...

Beligian: Yes, the trading range has been for paper only, a high-volume casino on top of a rigged "commodity" as sector said (or as miner49er has suggested, it is for international currency balancings?). And I have not cared really whether it has been 20 above 300, or 20 below. For my few ounces, not much of a difference, really.

Playing for the long ball, and time is more the concern. 1 year? 5 years? 10?

I don't really care WHAT path it takes to $2,000+, as long as it gets there in MY lifetime. Meanwhile, the present risk/reward looks unmatched by anything else. 300 level is supposed to bring up the chart goblins of "200", but in physical reality, how could this happen? And to do it in paper, would be such a confession of desperation, that the signals by now (thanks to sites such as ours) would be read clearly by so many more than in years before this.

And now to hit the "Shut Down" buttons, and clear this 'puter's memory for some heavy work output -- yeesh, it takes a lot to pull away from stimulating minds and head for the doldrums of drudgery... ;)
Belgian
(08/01/2002; 13:32:04 MDT - Msg ID: 82030)
BRAVO TO SECTOR # 82023
Allow me to join Paper Avalanche and Operative in congrats to you ! Thanks for that *brilliant* synopsis of the fundamentals.

- Goldilocks >>> formula !!!
- The cabal >>> assembled by the FED !!!
- ...it "was" a sure thing !!!
- *neo* alchimists !!!
- Gold standard, sagging under the weight of Gold loss AND GROWING RELENTLESS !!!

Personally I'm not betting the (Gold)farm on August 14.
Another (fiat)prince will be found for JPM/C. My bet goes rather to the (slowly)awakening general public that will realise that their nest eggs are under water. They will suddenly try to evacuate and exchange (rotten)eggs for cash.
This struggle of the general public (Trillions of savings)wanting to get out of the funds and the FED wanting to keep them in...is recipe for panic.

Canuck Gold and euro-POG : If we combine the high probability of the euro/Gold/Oil concept and the FED's Gold manipulation (sector's synopsis), with the 1996 - 1999 (euro-intro)timing...
Could we say that the euro-builders have been facilitating (encouraging) the POG situation for the many reasons mentioned earlier (TG/FOA/A) ? The FED and ECB playing cat and mouse with gold-derivatives ? The cat residing in Bazel and the mouse in New York ?

And is the recent dollar-boost against the euro not the result of Brazilian flight into the dollar, not to be countered, immediately, with euro Gold-action ? Me just wandering.
Belgian
(08/01/2002; 14:19:46 MDT - Msg ID: 82031)
@ Gresham
Timing of Gold setting itself FREE !? ***Major*** events never receive any timing. Otherwise it weren't "major" events by definition. cfr. The collapse of USSR-communism or Berlin wall...Iraq invasion..., etc...
Gold can break Free any day when the opposing forces decide to let it Free, today or tomorrow. Gold will break Free when opposing forces are exhausted or lose grip for God knows what unexpected reason. Will the world collapse when POG revalues into the thousands ? Defenitely NO ! Herein lays some timing-answer. The ongoing Permanent Currency Depreciations MUST and WILL be faced rather soon than later.
Economic utopia (sector) is a cyclic show and there will be no reason anymore to cap the price of Gold, once the show has run its full course. Economic utopia ends with paper fires. The past and present *Gold Intervention* was ment to make paper fire-proof ! ALL PAPER. Yes, neo-alchimy. The only thing in wich those neo alchimist succeeded was to make the general public believe that GOLD has been changed into paper ! No Paper has ever been made fire-proof.
Almost zero interest rates are the right ignition temperature for that final fire. The dollar paper is almost there. Do you think that rising interest rates in the given circumstances, will remain controllable ? Do you think that an orderly retreat in lockstep to the financial exit can be organized ? Are you answering your timing question here ?
1 year, possibly...3 years, very unlikely...10 years, NO WAY ! And on top of this Sir...a 7% yearly IR doubles your input within 10 years. POG=600$ in 2012 ? Cappice ?

The past 20 years of stockmarket explosion was the perfect "canalization" of the underlying inflala. This will shift to real goods and services and leave those stock-paper for what it is really worth. The present generation (general public) will never touch any stock again when all is settled and done. Back to the basics, where all cycles find peace and tranquility at their appropiate bottom.
Then their is no reason anymore to oppose against Gold to set itself Free. That's why the ECB decided and stated that their Goldreserves will remain important...very important indeed. We never heard such statements from the dollarblock with the exception of Hashimoto from Japan and the historical statement from A.G. that CB stand ready...

Can you agree that we are getting closer and closer or do you see another obstacle that can't be overcome ?
Black Blade
(08/01/2002; 14:26:35 MDT - Msg ID: 82032)
Double-Dip Alert by Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20020801-thu.html#anchor0

Snippit:

Washington statisticians have once again redefined the economic landscape. Courtesy of the so-called benchmark revision of the national income and product accounts, the recent performance of the US economy has been cast in a very different light. The direction of this annual revision was hardly a shocker. The incoming monthly flow data had tipped us off to expect a weaker picture than the previous data had painted (see my 27 June dispatch, "House of Mirrors"). But there is more to this revision than statistical noise. In my opinion, the new data now place the US economy right on the brink of another recessionary relapse -- the dreaded double dip.

Black Blade: Interesting assessment of the US economy. Roach does present a fairly good study of the recession.

Griffon5
(08/01/2002; 14:30:45 MDT - Msg ID: 82033)
Just a Matter of Time
First let me say, I have been an observer for the past four years. I am a Vice President in an international company. I have the opportunity to travel all over the world. Many of the end users of our products are well known to each of you, be they Cisco systems to John Deere tractors. The reason for this post is, an observation that is probably understood by many of you. The current economic climate, despite the rosy projections of our nations economist, are what BLACK BLADE would term, grim. Not only is the situation grim here, Europe is starting to feel it, as is China and the Pacific Rim. After all if the American consumer pulls back, ( this is just a matter of time ) the game is up.
While I am not a conspiracy buff, it appears the government is trying with all their might to manage the flow of information the public receives, to prevent any hint of a rout in the markets. Obviously, there are some days where they are more successful than others. What prompted this was seeing a news snippit where the President and Alan Greenspan are having lunch to discuss the current economic conditions. What???? They don't know?
The fact is they do know, however, they also know they have it barely under control. What to do??????????
From my perspective, now more than at other time is for good people to move in to hard assets. From my view we still have a little time before the the game is completely up. Let me conclude with this, We do business in South America, We have distributors in Argentina. One day they woke up, and found that their currency which use to exchange at a one for one ratio, was now worth 25% against the dollar. On top of that they could only with draw $250.00 per week. Now before they did this, they didn't take an AD out in the local paper, they just enacted tit over night. This is now being replayed in Uruguay, and coming soon to Brazil. That is of course, unless the IMF delays the day of reckoning. The point is, when things get to that point in this country, and I think it will, there will be no warning, they will do this in the dead of night and you will wake to the new order of things. So when I read, where the prez and Greenspan are getting together, its for one reason, damage control.

Black Blade
(08/01/2002; 14:35:05 MDT - Msg ID: 82034)
Accounting board may tweak expensing rules
http://www.boston.com/dailyglobe2/213/business/Accounting_board_may_tweak_expensing_rules+.shtml

Snippit:

NEW YORK - In a move that could wipe out billions of dollars in corporate profit, the board that sets the nation's accounting standards may consider tweaking rules on how companies that volunteer to expense employee stock options switch to the new accounting method. Under current rules, companies that opt to record stock options as an expense on their income statement don't have to grandfather in previously issued options. Instead, only awards granted after the beginning of the fiscal year in which a company chooses to expense its stock options are subtracted from a company's income statement.


Black Blade: This is long past due. Options should be expensed. If they were companies such as Cisco and Microsoft would have no earnings. The average hit on earnings across the board would be about 10% lower. This is compensation and should be treated as such.

Rock
(08/01/2002; 14:48:00 MDT - Msg ID: 82035)
CNBC and the quest for the truth?
Operative & BoxmanI've heard of taking a bullish stance but that James Glassman interview by CNBC was a joke. I've watched that guy before the bubble, during the breaking of the bubble and currently and he still cherps the same tune.

All I can say is if the Dow hits 36,000 can you imagine the inflation? The Dow will soon spit up all its gains from that one day suckers rally last week.

Mr. "G" I hope your right when you say when gold goes up to $20,000 an ounce that you don't expect a state of chaos in the US. I'm of the opinion when Gold goes up that high goods and services will also go through the roof and many people will have suffered great loss and I think there will be public outrage and maybe even riots in different places.

Because I think when gold blows through to that level the world economy including the US will be in a state of depression. The question I guess is how do you anticipate the masses reaction to living through the greatest stock market crash and depression in history?

Cheers,

Rock

Black Blade
(08/01/2002; 14:55:07 MDT - Msg ID: 82036)
US Takes Out Debt Consolidation Loan
http://theonion.com/onion3827/debt-consolidation_loan.html

Snippit:

WASHINGTON, DC�Plagued by late fees, high interest rates, and harassing creditors, the U.S. took out a debt-consolidation loan Monday, combining the nation's $6.1 trillion debt into a single, easy monthly payment. "My fellow Americans, we have just taken the first step toward regaining control of our finances," said President Bush at a press conference. "Thanks to a joint arrangement between the Treasury Department, the Federal Reserve, and E-Z Debt Services of Baltimore, we are finally on our way to freedom from debt." As of press time, the national debt stands at $6,144,393,982,061.52.

Under the terms of the consolidation, E-Z Debt Services will repay the nation's estimated 45,000 creditors, a majority of whom are foreign investors, insurance companies, banks, and other privately held entities. In return, the U.S will make a single monthly payment of $9.26 billion, adjusted for inflation, to E-Z Debt every month for the next 70 years. "We are proud to enter into this arrangement with the federal government," E-Z Debt spokesman Phil Rizzo told reporters. "We know how hard it is when you're buried under a mountain of bills with seemingly no way to get out. When you don't know where else to turn, E-Z Debt is there to help get you back on your feet."

The government first became aware of E-Z Debt Services on July 10, when Sen. Max Baucus (D-MT) happened to see a commercial for the company while watching late-night television. Two days later, President Bush saw the same ad during a 3 a.m. M*A*S*H rerun. According to White House press secretary Ari Fleischer, Bush was sitting at his desk clutching a fistful of past-due notices when he saw the ad. "He was holding all these unpaid bills, and tons more were piled high on his desk, including a three-month-old bill from Lockheed-Martin for $5.3 billion worth of jet fighters," said Fleischer, who was in the Oval Office working late at the time. "He raised the handfuls of bills above his head and shouted, 'I can't take it anymore!' That's when the ad came on."


"I was definitely skeptical about E-Z Debt, as were many of my colleagues," Senate Majority Leader Tom Daschle (D-SD) said. "I'd heard horror stories about those debt services. England used one to get out of a recession in the late '80s, and they're still paying for it." "But E-Z Debt is different," Daschle continued. "Jim [Smoller], our E-Z Debt representative, sat down with me and the other senators and really convinced us that debt consolidation was the way to go. He was extremely helpful, taking the time to patiently answer all our questions. He even gave us a free quote."

Opponents of the plan charge that it unnecessarily endangers the numerous national assets offered as collateral. Among the valuable properties being put up are Yellowstone National Park, NASA, and the state of Alaska. "In the end, everybody came to see that E-Z Debt isn't just another loan. It's a way to get out of debt without declaring bankruptcy," Daschle said. "Thanks, E-Z Debt. We couldn't have done it without you."


Black Blade: Sorry about that, I know it's a joke, but it probably isn't that far off the mark. All American from the consumer to the corporation to government are buried under crushing debt and there is no way out. Bankruptcies are at all time records and with the new bankruptcy laws we should see a lot more pain.


Anyway, off to the gym � healthy body �health mind (OK � healthy body anyway)

Pizz
(08/01/2002; 15:05:00 MDT - Msg ID: 82037)
Sector, Great Post
Probably one of the best short and to the point posts I've read. Keep it up.

To All:

We talk about the bone pile, layoffs, Argentina, etc., but yesterday I personally and face to face, had to lay off 4 good employees. All with families, all with debt, and one single mother who I thought was near suicidal as she left.

For nearly twenty years in management capacity I have not lost to much sleep over terminations, since there was a job market, an expanding economy, and the bulk of the terminations were justified for non-performance, etc. Now it is extremely different.

I didn't sleep well last nite, but one thing I do know, before this depression is over, and if I have anything to do with any part of the recovery, a good portion of my time will be spent doing what I can to help get what's left of this country back to, as Trapper sometimes says, "live simple" or at least something sustainable for all.

After watching both a CFO and a Controller in cuffs today, I at least have some satisfaction that the two times I've been associated with situations similiar, I have resigned for cause and walked. But I still work for and help very aggressive organizations. Both my professional and political orientations are recieivng a thorough mental revaluation.

My more immediate concern is that it's probably going to get a lot worse. I always did envy Spock with his "emotionless" life. The lows for the last 10 years have totally overwhelmed what few highs there have been in the rat race we have created. Also gettin kind of hard rootin' gold higher knowing some of the misery the higher prices portend.

A not to happy with himself,

Pizz
sector
(08/01/2002; 15:09:26 MDT - Msg ID: 82038)
PaperAv - About the JPM Stock Price Trigger
Their derivativers are strongly [Everywhere on Wall Street] rumored to......have a stipulation that if there is a close of JPM below $20 then the contract becomes callable at prevailing spreads in interest rates or bullion strike levels.

This means that JPM would have to pay a mountainous sum to ALL of the counter Parties who elect to call their derivatives contracts. In the gold derivatives JPM would be required to return the borrowed gold [By purchasing or somehow obtaining metal from some source] to a long list of borrowers...some of whom are terrorist nations [Libya, Syria].

JPM does not HAVE the cash to satisfy even a tiny portion of those contingent liabilities...let alone the "Insurance". They barely have $800 Million.

It is reasonable to assume, as our newest poster Griffon5 has perceptively done, that today's Greenspan/Bush lunch meeting has something to so with JPM and the precarious stae of US, World stock and currency markets. Moreover, the President cannot be ignorant of the rising tide of complaints of manipulated and corrupt markets.

It's a guess that the future manipulation timeline was not a very long one...probably measured in months.
misetich
(08/01/2002; 15:12:47 MDT - Msg ID: 82039)
Citigroup's Weill, Rubin Working to Limit Brazil Risk
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APUmZzhYeQ2l0aWdySnip:

Boston, Aug. 1 (Bloomberg) -- Citigroup Inc. Chairman Sanford Weill is meeting with Robert Rubin and other top bank officials to ensure the company limits its risk in Brazil after losing $2.2 billion in neighboring Argentina, a bank executive said.

............
Citigroup, which has 53 branches in Brazil as well as an asset management business and credit-card operation, increased commitments in South America's largest economy to almost $13 billion at the end of March, based on filings with the U.S. Securities and Exchange Commission. The bank has declined to provide more recent figures.

...............

``I would like the bank to come out and say this is our exposure in Brazil,'' said Michael Stead, who manages the $700 million in assets, including Citigroup shares, in the Wells Fargo SIFE Specialized Financial Services Fund in San Francisco.

************

Misetich

Lets stay on this HOT TRAIL shall we!

Got gold?
misetich
(08/01/2002; 15:20:16 MDT - Msg ID: 82040)
U.S. July Auto Sales Rise 8.2%, Led by General Motors (Update6)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APUmaXxQRVS5TLiBKSnip:
By Bill Koenig and Jeff Green


Detroit, Aug. 1 (Bloomberg) -- U.S. auto sales rose 8.2 percent in July, spurred by a 24 percent gain at General Motors Corp. after the largest automaker revived no-interest loans. Sales rose 1.5 percent at Ford Motor Co., the second-largest automaker's first increase this year.

Automakers sold 1.52 million cars and light trucks and July's annual sales rate hit 18.1 million vehicles, the highest pace since October, according to Autodata Corp. The General Motors surge helped U.S.-based makers take almost a full point of market share, to 62.1 percent, from overseas-rivals such as Toyota Motor Corp. and Honda Motor Co.

U.S. automakers used discounts to clear out 2002 models as the stock market slumped and consumer confidence marked its biggest monthly decline in nine months. General Motors benefited most because it had both the financial strength to act first and some desirable cars and trucks to back it up, analysts said.

``What's driving it is incentives at General Motors,'' said George Magliano, director of automotive industry research-Americas at DRI-WEFA. ``While overall confidence is shaken by the stock market, people will still buy if there's a deal.''
............

Misetich

The housing and automotive industry are red hot - YET the US economy is barely nudging forward

Low interest rates are fuelling this two industries - the auto and part manufacturers, are major employers -

How long can this pace keep up?

One can imagine what would happen to the US economy and the unemployment if the debt ridden consumer slows down a little

Got gold?

TownCrier
(08/01/2002; 15:46:51 MDT - Msg ID: 82041)
Griffon5 -- superb comments (msg#: 82033)
I was on the phone perhaps two hours ago with MK and told him in no uncertain terms and without need for exaggeration that my view of the situation at hand is that we are on the brink of the most significant financial crisis faced by the likes of modern man.

Not only are we on the backside of a U.S. equities bubble, but there is a South American contagion growing apace, all at a time when the euro project has grown legs to challenge the dollar's stronghold as THE reserve asset by offering a "love it or leave it" alternative, along with mark-to-market gold.

Given the scope of this transitional threshold coming not smoothly but at a time of incredible financial instability, the Eurolanders have got to me thanking their lucky stars that Maastricht was implemented not a moment too late, and yet they are surely wringing their hands with worry over impending global systemic calamity.

Anyone who knows me well knows that it wasn't lightly that I posted the following concluding comment on Monday about how bad the situation currently is:

"Even rivals [i.e., dollar and euro factions] W/R/T the end-game may pull together at intermediate times to fend off mutually assured destruction, yes, things being that bad."

It remains my hope that this may pass, somehow, to the everlasting benefit of all, the public kept largely unaware if necessary -- to avoid the alternative of widespread social upheaval.

With or without social awareness and upheaval, there is no doubt that with the passing of this time there will be with it a fundamental transition in the structure of the financial power base. Those with physical gold will emerge with their wealth none the worse for the wear. An understatement. Both a nominal and a real revaluation of the noble metal would factor large in the outcome.

It seems that many people simply fail to appreciate the recent history (and the calm surficial illusions possible) of such things as the collapse of LTCM. Life went calmly on for most people in the Fall of 1998, but the banking/financial powers of the world were living through a very bleak and hellish reality steeped in the actual awareness of the financial seizure at hand during and shortly after that October '98 annual gathering of the IMF/WB and associated parties.

Even when Greenspan & Co. frankly admitted afterwards that we were at that time in fact poised on the brink of collapse of the international monetary system, it still strikes me that the revelation made seemingly very little impression on the daily concerns of the general public. To be sure, it could not be thought of as a one-off event as there have not been significant structural changes (but for the worse) as far as stabiltiy goes. Bailing wire, twine and duct tape, and on we go from there.

Not this time. This time we get a new machine out of the old wreckage. Now the question remains, will it come rolling in smoothly to save the day, or will it fall out of the sky, crushing many in its arrival?

Randy

misetich
(08/01/2002; 15:50:46 MDT - Msg ID: 82042)
US Current Account Deficit % SOARS with GDP revisions
http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0Snip:

I continue to believe that there is a deeper meaning to all this. Like it or not, the post-bubble excesses of the US economy remain largely intact. That's the unfortunate outcome of a still mild recession -- it doesn't result in a major purging of long-standing imbalances. That's especially true of America's gaping current-account deficit. The current-account gap widened to 4.3% of GDP in 1Q02, and based on the import surge just reported for 2Q02 (+23.5% in real terms) undoubtedly expanded further in the period just ended. However, the benchmark revisions will make the current-account gap look far more onerous as a share of GDP. That's largely because the level of nominal GDP was lowered by 1.2% in 2001; but it also reflects the likely impacts of downwardly revised exports (1.6% lower in 2001) and upwardly revised imports (+0.2% higher in 2001). The net result is that the current-account deficit as a share of GDP could easily be one percentage point larger than we had previously thought -- surpassing the 5% threshold that typically triggers a current-account adjustment. Needless to say, that has important implications for capital inflows into the US and for the dollar -- requiring more of the former and implying more downward pressure on the latter.

*****************
Misetich
"
as a share of GDP could easily be one percentage point larger than we had previously thought -- surpassing the 5% threshold that typically triggers a current-account adjustment."

Typically a country would see their currency devaluated to the tune of 30-40%

Since this particular currency- US $- is supposed to be the "world reserve currency" the bastion of all fiat (please refrain from laughing outloud)allowances are being made -

Clearly this is unsustainable! Will the US $ crash! Perhaps we should have a contest - When and by how much

Got gold?




misetich
(08/01/2002; 15:56:05 MDT - Msg ID: 82043)
Cisco Falls on Rumors, Economic Concerns
http://story.news.yahoo.com/news?tmpl=story2&cid=580&ncid=580&e=9&u=/nm/20020801/bs_nm/tech_cisco_stocks_dc_6Snip:

SANTA CLARA (Reuters) - Shares of Cisco Systems Inc. closed down more than 8 percent on Thursday amid rumors, swiftly denied by the company, that Cisco President and Chief Executive John Chambers would resign.
............
Cisco, the No. 1 maker of equipment that directs Internet traffic, also said there was no truth to another rumor that Chief Financial Officer Larry Carter would resign soon.
............
Cisco reports its fourth quarter and fiscal 2002 financial results on Aug. 6.
*************8

Misetich

If stock options expenses changes are made - Cisco is in deep trouble, earning wise

Got gold?
steady
(08/01/2002; 16:02:40 MDT - Msg ID: 82044)
"BANG ..... BANG ... ", on the castle door. SOMEONE ANSWER >PLEASE. PLEASE
RE: ROCK RE: WAVE RIDER>
ahhhhhhh someone answed, sir/mama, for i cant tell which gender you are due to the golden glare coming from behind you and your long white cape. Are you a Wizzard? I come here seeking refuge. Ive been peering in thru the cracks, listening to the conversations that occur over at that roundtable over yonder. Occasionally i throw a message over the heavily fortified walls here. NO sand under this castles foundation i can see. But today it struck me I had to get inside here,As our fine Nobel Sir Mr. Gresham said the other day in so many words, knowledge without application is useless. My knowledged gained from the outside makes it imperative that i seek SHELTER NOW in this golden castle! Im just a lil inquisitve, hobbit, a burrowing one at that i may add,who in the past 18 months has been ridiculed, laughed at'scorned,and even shuned by the local populace for trying to expalin exactly what was going to happen.Which as you know is unraveling before us daily. Ive had the pleasure of conversing in person with one Mr Murphy. You know of him dont you! I even handed him one of my stickers, you rember it,as i threw it over the wall once, and respected the kings wishes, not to show it (adveritse) it round here.I have coresponded with a Few of the other nobel knights. But it is here where i come to find out the truth, to get to the core so i can learn more in order to shear the wool away from the sheeples eyes with the knowledge, the insights and most importanly the Facts that are presented here. Pluss i want to stake out my lil corner,cause i see many are starting to follow in the footstep os the giants as ANOTHER and friend of another suggested, and i have a feeling there will be many many more following me shortly. So I humbly ask can this lil hobbit come in? I dont need a seat at the roundtable, i just need to be close enough to soak up the ambiance, the warmth and the golden brotherhood that destoys all barriers,all nationalities, and that unites us as ONE ARMY THAT CANNOT BE STOPPED,Nor SHALL WE STOP TILL WE ACHIEVE OUR GOAL!!!! "FREE GOLD." Which in turn should bring about the return of justice ,fairness, transperency and an honest monetray system to this wonderful place we call home! Can i come in please?

misetich
(08/01/2002; 16:33:05 MDT - Msg ID: 82045)
Housing: Is It a Bubble If It Doesn't Pop?Home prices are rising at an unsustainably torrid rate
http://www.businessweek.com/bwdaily/dnflash/jul2002/nf20020731_4273.htmSnip:

In it, they applauded Federal Reserve Board Chairman Alan Greenspan for telling Congress in recent testimony that the answer to the infamous "bubble question" is that "it is most unlikely."

Greenspan's wisdom aside, the truth is somewhere in between. If you define a real estate bubble as a period in which home prices are rising at unsustainable rates, then it's pretty clear we're in one now. On a national level, home prices climbed 8.1% in the first quarter this year over last year. That's pretty steep.

RECORD SALES. And in the fastest growing markets, such as metropolitan New York and Washington, D.C., prices grew 20% over the first quarter of last year. Home prices historically rise at the rate of inflation, now under 2%, plus a percentage point or two.
............
VICIOUS CYCLES. Given the mixed economic outlook, it's possible that the economy could go into a double dip while the housing market races on. That could lead to a rather vicious cycle in certain local real estate markets -- experienced last by homeowners in the Sun Belt in the mid-'80s and in the Northeast in the late '80s. In those regions, property prices plummeted along with local job markets, leaving newly unemployed homeowners stuck with houses worth a lot less than they owed the bank. That led to a crisis for banks and consumer confidence that took years to fix.

Most experts think that's unlikely to happen on a national level, however. Some bearish investors are worrying now about Japanese-style deflation in America's future. But that's about as pessimistic as it gets.

***********

Greenspan says its not a bubble- who are we to question the Maestro?

Got gold?
misetich
(08/01/2002; 16:53:13 MDT - Msg ID: 82046)
The rationale for owning gold and gold stocks remains firmly in place
http://www.safehaven.ca/Editorials/Chapman/Chapman080102.htmSnip:

In the Kondratieff winter, gold has clearly outperformed. The rationale for owning gold and gold stocks remains firmly in place. We summarize:

Demand - While Gold demand abated as we went over $300 yearly demand/supply shortfalls are still 1500 tonnes per year or more. Some of this is made up by Central Bank Supply but with no new mines coming on stream and companies needing more time to reopen closed mines there is no foreseeable turnaround to annual shortages. Silver inventory supplies in the United States have run out and there has been no new production coming on stream in years. Silver demand remains very firm with a plethora of industrial uses.
Short positions - The conservative estimated gold short position is in excess of 5000 tonnes and the more probable realistic short position ranges from 10000 to 15000 tonnes. Silver short positions are also quite large.
War risk - The war on terrorism is an open ended long lasting affair. There remains a serious risk of a broader war in the Israel/Palestine conflict, or an outbreak between India/Pakistan and the probable invasion of Iraq and possibly even Iran.
Country Debt collapse - Argentina collapsed and there is further risk in Brazil and having the contagion spread to other Latin American countries. Many African countries are perpetually bankrupt.
Corporate corruption - Enron, Global Crossing, Tyco, WorldCom, Aldelphia, America Online and more. The sight of the arrest of the Rigas (Aldelphia) father and sons seemed to help the market on July 24. So where were the shackles and the orange jump suits? Now that would have left an impression. The SEC has decreed that over 900 companies CEO's and CFO's must certify their most recent filings by August 14, 2002 or risk jail terms. Failure for numerous companies to comply could abort any rally underway. There are also investigations into J.P. Morgan, Citigroup and Merrill Lynch over their dealings with Enron. J.P. Morgan is the $24 trillion derivative bank. The problems at Enron concerned the hiding of derivative deals. Even Bush and Cheney are under investigation for their nefarious dealings at Harken Energy and Halliburton. The White House is trying to stonewall the investigation and a lawsuit against Cheney. Something is rotten in America and to think they used to criticize Japan for effectively the same thing.
Oil - We are running out of oil. Long-term shortages should begin to show up by the end of this decade. We have contended that the War on Terrorism and the probable invasion of Iraq is more about the oil then it is about terror or weapons of mass destruction. The USA consumes 25% of the world's oil and worldwide supplies are not secure. There has been no major find in years. Commencement of war with Iraq could spike oil prices over $40 and higher.
Trade wars - America calls itself a free trader. You would never know it with the trade wars developing over lumber, steel and farm products. Trade wars, through the Smoot-Hawley Act of 1930 was a major contributor to the Great Depression.
Trade deficit - The US trade deficit that recently hit record levels of $35 billion/ month and is more than 4% of GDP is clearly unsustainable and cannot be financed from non-existent US savings.
Debt - This is the real Achilles heel and we are only beginning to see its potential deflationary effects as corporations go bankrupt. Consumer bankruptcies are on a record pace and will rise as any recession or worse gets underway.

steady
(08/01/2002; 16:57:17 MDT - Msg ID: 82047)
greenspans and bush lunch menu
Fried "golden"trout, pickled lemmings,and upside down cake!
Socrates964
(08/01/2002; 16:58:55 MDT - Msg ID: 82048)
Brazil et al.
Firstly, congrats Sector - excellent post.

Secondly, on Brazil, my view is this:

Currency turbulence of last few days is due to exporters/multinationals scrambling for dollars as unable to roll over debt, rather than wholesale capital flight.

Key to this is the fact that the parallel exchange rate moved to a 10-15% discount to commercial rate, and a huge spread opened up between the bid/ask on commercial.

http://br.biz.yahoo.com/cma/dollar.html

Today's fall back to 3.13 seems to be anticipating rumours of a $10-20bn package agreement with the IMF.

The head of the Brazilian CB, Arminio Fraga, is an extremely sharp trader and knows when to act.

The problem is the presidential elections:

The fairy-tale scenario would be Cardoso (FHC) electing Jos� Serra. The problem is that the PFL and the Northeastern elites have already decided that with Serra they will have to take their hands out of the till and have shifted to Ciro Gomes, who is far more charismatic, but is a 'loose cannon' - volatile, impulsive and capable of just about any kind of deal with anyone. Anyone who knows anything about Brazilian politics can see what kind of an animal Gomes is by seeing who is backing him - all the oligarchs from the Northeast like ACM and Bornhausen, as well as the politicians who fought tooth and nail to stop Collor from being impeached in 1992. The likelihood of a slide into populism and corruption under Gomes is thus high, particularly since he does not have a well-defined power base.

Polls suggest that Gomes could beat Lula and that he is now 13 points ahead of Serra, who seems to be failing to capture the imagination of the electorate. This may turn around in September as Serra has far more air time than the other candidates, but right now, his campaign appears to be in trouble.

My take on it is thus that FHC will pull all the strings to get Serra elected, but he may not succeed - if at any point it becomes clear that Serra is out of the race, FHC's agenda changes and rather than keeping things afloat, he won't be sad to see the opposition candidate inherit a crisis. Also, Fraga's resignation as head of the BCB would be an extremely negative sign, although it is possible that any government might invite him to stay on.

As such, I wouldn't expect Brazil to fall apart for at least another month or two, but this is merely because Cardoso is buying time in the hope that he can elect his successor - which currently seems an uphill struggle.

Correct me if I'm wrong, but international press coverage of Brazil seems to have grasped the wrong end of the stick completely.
Gandalf the White
(08/01/2002; 17:04:46 MDT - Msg ID: 82049)
Sir Steady
ENTER, and go forth STEADY(ly)!!!
<;-)
PS: The Hobbits loved your "Luncheon Menu" !
misetich
(08/01/2002; 17:05:25 MDT - Msg ID: 82050)
Corporate whistleblowers who approached individual legislators with evidence of fraud may not be protected
http://smh.com.au/articles/2002/08/01/1028157814498.htmlSnip:

In another development on Wednesday, members of Congress accused Mr Bush of undermining a corporate reform law by rolling back protections for company whistleblowers who provide evidence of fraud.

Hours after Mr Bush signed the law on Tuesday, the White House quietly issued a statement outlining its interpretation of the law. It said whistleblowers who provided information to congressional committees conducting investigations would be protected, but not necessarily corporate whistleblowers who approached individual legislators with evidence of fraud.

***********

It sounds like the corporate lobby group sneaked one by

Is it a sellout?

Got gold
Socrates964
(08/01/2002; 17:08:37 MDT - Msg ID: 82051)
Sector, anyone...
Just one question - if JPM is already de facto under control of the Fed/some US government authority - couldn�t the latter evoke extraordinary measures to prevent the other side collecting on its contracts if JPM's share price slid under $20?
Cavan Man
(08/01/2002; 17:13:31 MDT - Msg ID: 82053)
Socrates964
I'm sure the answer to that is YES.
Cavan Man
(08/01/2002; 17:14:48 MDT - Msg ID: 82054)
Loser
First, I'd change your nom de guerre. Second, I'd buy only physical gold (and maybe a good CA jr. with gambling $$).
Mr Gresham
(08/01/2002; 17:15:25 MDT - Msg ID: 82055)
Pizz, BB
Black Blade -- Thanks for "The Onion" humor! That one was just waiting to be written, and you caught it for us.

Pizz: That's a sad one. I hope you can take some comfort in companionship here (especially if the bone pile beckons your way), and also consider conducting your own special "exit interviews" with those worthy individuals. Give them the larger context, the possibilities of some "hard savings", and the addresses to some good sites to read.

The background of it is: As long as we are all (well, 91% anyway) wage slaves, we will live on the edge of the bone pile. The self-employed can hunt for themselves (and not even very well at that, at times). I know that such a blanket statement has holes in it, but it is the attitude I want people to consider. The price of "security", in this era, is chains. And no significant reduction in anxiety.
Cavan Man
(08/01/2002; 17:19:01 MDT - Msg ID: 82056)
Hey Randy .....
That was a teriffic and very accurate appraisal of the situation (not normanl). Best2U...CM
tommy
(08/01/2002; 17:20:12 MDT - Msg ID: 82057)
Just in from Jim Sinclair
He's been there and done it in gold once already during a time when I really had no insight whatsoever about the gold market [1977-1980]




::Dear Tommy:

::I agree with your analysis that nothing can stop this bull ::market in gold I know of. It can be delayed but not ::reversed.

::Regards,
::Jim

-----------------------------------------------------------

/ /_
/ / /
/ From the Tan Range Interactive Web Site
/_________/ /
/_________/

============================================================
S E N D A M E S S A G E
============================================================
TO: Tan Range Exploration Corporation

Date: Tue Jul 30, 2002 at 7:18:21 PM Pacific Time
============================================================
FROM: []

============================================================

Messages, Questions and Comments:
:
: For Jim Sinclair:

: A short note, Jim, to thank you for your
: eloquent analysis of the gold market, the international
: financial situation, the condition of the Dollar and the
: condition of JP Morgan/Chase.
:
: I listened to your interview with Jim Puplava from
: 7/20 and have recommended it to a few others.

: I've been waiting for this gold bull for 20 years.
: Some proprietary research I had developed over that
: period indicated a long term gold bull mkt. opportunity
: window to open up in June of 2001.

: I do agree that the elements are in place for gold to
: put in the new high, no matter what, and, although I
: fully understand that this is inevitable, your expert
: commentary and experience I hold in high regard.
Cavan Man
(08/01/2002; 17:24:11 MDT - Msg ID: 82058)
Griffon5
Welcome Sir. The industry I rely on for my daily bread is rather strong (corrugated packaging aka, "empty boxes"). We were down last year (tonnage) almost 6%. This year, we've just put a price increase thru successfully and quickly and many of our 67 plants are very, very busy. Typically we lag the downturns and turnrounds by 6 months. I will be reporting from time to time on this.

A report from N. colorado where I know a number of people is "nothing is moving". The economy is at a standstill here. This region has been one of the fastest growing in the country.
Paper Avalanche
(08/01/2002; 17:35:19 MDT - Msg ID: 82059)
@ sector - thanks - eom
danke scheon
Rock
(08/01/2002; 17:44:46 MDT - Msg ID: 82060)
steady.......knock and the door shall be open!
steady you sound like you need a little refuge from said elements. If I can be of any assistance in furthering your pursue of peace, tranquility and truth I'd be glad to. Wizard I'm not but I do tend to swim much deeper than the average Joe Sixpac. What's your email address and we can continue the dialog if its off subject. I have a block on everyone except aol users to cut down on the spam or I'd give you mine.

Sector what a post! Bravo my friend.

Sir Rock
Paper Avalanche
(08/01/2002; 18:40:37 MDT - Msg ID: 82061)
@ LOSER
Greetings. Welcome to this highly esteemed forum. I would recommend that you walk the golden trail so as never to have to pronounce yourself as an "idiot" to other posters on this site. Few, if any, true contributors to this site preface their posting with a diatribe that would likely reflect the circumstances of those who may be lurking here for the first time so as to create an emotional bond whereby anyone following said post would think to his or her self "you know, I am in the same boat."

I would suggest that you strongly consider THAT which physical gold imposes on all who seek the liberty that is inherent in it's ownership: responsibility for one's own education and decisions.

I know that I may offend some by being adversarial to those who appear to be hapless newbies on this site, but I truly treasure the exchange of ideas and information on this forum so much that I have taken it upon myself, albeit without the request of any other poster or the gracious host of this site, to directly engage those who appear to have the same typical questions or MO that I have found on other sites.

If I have offended anyone, as I have said before, please note that I do not care.

Paper Avalanche
sector
(08/01/2002; 19:06:04 MDT - Msg ID: 82062)
socrates964 The cabal will defend JPMs $20 share price to the death...
...because it is THEIR death too!They are interconnected through counter party incestuous relationships...like the Borg Hive made famous in Star Trek. So if one is infected and dies they ALL get infected and die.

The most likely scenario is that there will be an increasing divergence between a falling DOW and a strangely levitated JPM. Thus attracting even more attention to the rig job.

As Gretchen Morgensen [The crack NYT financial reporter] said this week after a SOXX futures Goldman Sachs rig, "Wall Street Cannot Afford Any More Coincidences".

The Fed's propping JPM will only draw more attention from the un-corruptible Moody's and S&P ratings agencies. All they need to do is issue even more downgrades and voila... the millions of JPM shares still held by funds will pop onto the market.

The Fed may own All the JPM stock in the end. At that point, everybody will know, especially the JPM derivatives counter parties who then may sue, alleging fraud in setting up the derivatives under false pretenses in the first instance.

The Enron litigation, potential litigation from counter parties, Latin American loan losses...take you pick and pick your 2002 week for the JPM dead man to stop "walking".
USAGOLD
(08/01/2002; 19:24:21 MDT - Msg ID: 82063)
A Presentiment of Financial Evil??
Tonight's headlines:


US-Brazil trade group calls O'Neill uninformed - Reuters Market News - 8:12 pm
Uruguayans loot, strike amid spiralling crisis - Reuters Market News - 7:02 pm
O'Neill says no 'magic bullet' for Latam woes - Reuters Market News - 7:00 pm
Brazil's real stages big comeback on IMF hopes - Reuters Company News - 6:30 pm
Argentine peso posts strong gains, shares dip - Reuters Company News - 6:26 pm
GLOBAL MARKETS-Global stocks slump on weak US data, bonds gain - Reuters Market News - 6:00 pm
Mexico stocks down 4.41 at year-low on economy woes - Reuters Company News - 5:48 pm
Dour manufacturing data spark rally in Treasuries - Reuters Market News - 5:38 pm
Revlon reports wider second-quarter loss - Reuters Company News - 4:52 pm
Fed had no large 1-day net misses in reserve projections - Reuters Market News - 4:34 pm
U.S. M-2 money supply up $15.4 bln July 22 week - Reuters Market News - 4:33 pm
Bush, Greenspan review economy over lunch - Reuters Company News - 4:27 pm
COMEX gold bounces to end above 4-month lows - Reuters Market News - 4:22 pm

Brilliant post, Randy (I feel privileged to have heard you speak it!). The most important point has to do with the South American crisis. In talking to a Wall Street friend yesterday he said to me: "Mike, we're right back in 1997-98 and I don't know if this group in Washington can handle it." (He's a Republican.) All the while, the press concentrates on the small pox vaccine, the Pope's travels and whether or not there are enough handcuffs to go around for all the corporate executives going to jail. Today, one of the talking heads at CNBC echoed a point I made here some time ago. "We can't believe corporate America's numbers," she said, "and we can't believe the government's numbers. It's all very disconcerting." Now, that's a worthwhile observation. Apparently, the revised numbers (I didn't catch the details) were better than five iron from the initial numbers. So the stock market tanked. . . . Observation: This is the difference between a Republican and a Democrat in the White House. She never would have said something like that during the Clinton years even though his administration wrote the book on phony numbers. Republicans are fair game as far as the press is concerned. Democrats are holy ground. The only good to come out of it is that the public is going to finally find out about things discussed here on an on-going basis. Watch out for Hillary -- the fifth Horseman?? In the meantime, get some gold. If you've got gold, try to figure out a way to add more. If you don't have it and you're thinking about it, don't wait for Larry Kudlow to give the buy signal.
Gandalf the White
(08/01/2002; 19:40:25 MDT - Msg ID: 82064)
WELCOME Sir Loser -- Please see my message below !
LOSER (08/01/02; 17:10:04MT - usagold.com msg#: 82052)
Hello esteemed and knowledgeable members of the group --
===
Happy to see you here, and my suggestion is that positive thinking is a better mode to assist your wealth recouping than negative thinking. In our lives, WE have all been a LOSER at one point, or another. At times, some of us (LIKE ME) have been BIGTIME losers !!

After you have had an opportunity to review the "Hall of FAME" messages and reviewed the present GREAT postings of many here at the FORUM, you have the opportunity to make the correct decision, -- ONE that fits your lifestyle.
REMEMBER, that you too can "follow in the FOOTSTEPS of GIANTS"!
sector
(08/01/2002; 19:40:28 MDT - Msg ID: 82065)
Investors pull $47bn out of equity mutual funds [Largest Redemtion in History]
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185353918&p=1012571727088By Julie Earle in New York
Published: August 1 2002 22:00 | Last Updated: August 1 2002 22:00

Investors continued to flee a grim US stock market in July, with early industry estimates suggesting that some $47bn was pulled out of equity mutual funds - the largest net monthly outflow in history, according to new data. The forecasts have raised concerns that investors are losing faith in equities and could further upset an already volatile market.

Wall Street received another setback on Thursday after downbeat reports on reports on manufacturing data and unemployment benefits cast doubt on US economic recovery. By mid session yesterday, the Dow Jones Industrial Average was down 200.06 to 8,536.53, while the broader S&P 500 index gave up 23.83 to 887.79.

Investors already pulled $18bn from equity mutual funds in June as the stock market lurched lower, compared with a $5bn net inflow in May, according to the Investment Company Institute (ICI), the mutual funds trade group. The second straight month of big equity fund outflows in July, would be the fifth monthly outflow in 12 years.
+++++++++++++
It's even worse that stated above because the vast majority of fund holders have yet to receive their July statements. August might break July's outflow record.

That may begin to show up next week as unrelenting DOW pressure and volatility that accelerates into and through theLabor Day weekend.

It will be "The Economy Stupid" times ten. George Bush now cannot avoid the "Herbert Hoover" epithet.
misetich
(08/01/2002; 19:53:57 MDT - Msg ID: 82066)
Investment bankers and off-balance sheet items
http://www.euromoney.com/index.htmlSnip:
Seasoned international bankers believe that changes are now necessary in the area of off-balance-sheet financing � an activity that has exploded out of all recognition in the past decade or two. "Deregulation started 20 years ago and has gone way too far," says Minos Zombanakis, a well-known former Euromarket banker who is now an international financial consultant. "To allow off-balance-sheet financing of such enormous amounts is ridiculous. Banks use off-balance-sheet structures all the time to avoid capital adequacy." He adds: "The whole idea of off balance sheet is wrong. Consolidation is a necessity. You can use any kinds of structures during the year that you want, for administrative purposes or whatever, but when it comes to reporting, you must consolidate. That is the only way to protect the investor."

............

Investment bankers may need to change their focus as regulators and accountants catch up with them. But no-one doubts that they will find ways to keep innovation alive and their fee-earning power high. A Wall Street lawyer adds: "Investment banks will carry on regardless until someone puts a gun to their heads and says: �Stop. Now.� It is most unlikely they will stop doing anything until they are told to do so. And even if you do put down a dam, like water they will always find a way around it."

***********

Black Blade
(08/01/2002; 20:02:01 MDT - Msg ID: 82067)
S&P 500 index sweats through 8% loss in July
http://www.usatoday.com/money/markets/us/2002-07-31-mart_usat_x.htm

Snippit:

NEW YORK � Investors may welcome the dog days of August after the bite their portfolios took in July.

S&P 500's worst Julys
Pct. change
2002 -7.9%
1974 -7.8%
1975 -6.8%
1969 -6.0%
1986 -5.9%
Source: Sam Stovall of Standard & Poor's

Despite two rallies in the past six sessions that raised hopes stocks had finally hit bottom, the Standard & Poor's 500 fell 7.9% last month, its steepest July drop in more than a half-century.

Black Blade: Sure we saw a couple of suckers rallies last month, however, the economy is slipping off into the abyss. Yesterday it was the horror of the GDP numbers and even worse revisions, today it is the ISM data that suggests a very weak economy and more surprising is the 2.2% drop in construction for July!!! July is the middle of the construction boom � this could be a signal that the real estate bubble is beginning to deflate. The "Bone Pile" continues to grow daily � with more added today according to BLS data (even accounting for "seasonality" and those who don't count for numerous reasons). Tomorrow we get the "Bone Pile" numbers for last month and the revisions. Whatever the outcome, the "Bone Pile" continues to grow as many who were cut loose have not found jobs and many others have only found lower paying jobs. The US economy is falling off into oblivion and now that the lights have been turned on and the cockroaches have scattered, we are only now able to assess the damage even as the primates on CNBC and CNNfn attempt to cover it up and spin some ludicrous story. As always, get out of debt as soon as possible (and stay out of debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance to transport wealth across these and coming trouble times, and most definitely store several months worth of nonperishable food and basic necessities for when that income check no longer arrives.

R Powell
(08/01/2002; 20:02:53 MDT - Msg ID: 82068)
Buy signal from whom??
Michael, did you mention Larry Kudlow and a gold buy signal in one breath? Physical is probably not for selling at all but I've often thought that a buy recommendation from a Kudlow or Cramer would alert us traders that it's time to sell some paper gold assets. From Rukeyser, sell some more!
As much as we may wish otherwise, I believe you are spot on in stating that the press and general public do not see those things which makes me wonder how the system can last much longer.
From your unique viewpoint, can you tell us what you see concerning the availability of both gold and silver supply? Also, the Comex is not reflecting much more than the beginnings of a bull market, has demand for physical shown otherwise?
Thanks,
Rich
Cavan Man
(08/01/2002; 20:04:46 MDT - Msg ID: 82069)
sector
RE: Nikkei; when to expect "official" intervention IYHO?
misetich
(08/01/2002; 20:09:54 MDT - Msg ID: 82070)
US swap spreads suffer on weak data, credit fears-Worries about liquidity problems at JP Morgan and Citigroup
http://www.forbes.com/newswire/2002/08/01/rtr684538.htmlSnip:

"People don't want credit risk," said one head trader at a
European investment bank. "Big portfolios have gotten burned
owning spreads and betting on spreads coming in. People are
scared and want to be in five-year Treasuries and 10-year
Treasuries."
...............
Traders have noted many investors paying fixed rates in
swaps against losses in other issues, like mortgage-backed
securities, agencies or corporate bonds since the sharp move
wider began last week on worries about liquidity problems at
J.P. Morgan Chase and Citigroup.
***************
Misetich

Lets stay on the JP Morgan and Citi HOT TRAIL!

Got gold?
Black Blade
(08/01/2002; 20:22:53 MDT - Msg ID: 82072)
Lieberman willing to subpoena Rubin
http://www.washtimes.com/national/20020731-980104.htm

Snippit:

Democratic Sen. Joseph I. Lieberman yesterday backtracked to say he will subpoena former Treasury Secretary Robert E. Rubin "in a minute" if he determines that Mr. Rubin can shed light on the Enron collapse. "If Mr. Rubin would add something, I don't have any hesitation to call him," said Mr. Lieberman, chairman of the Governmental Affairs Committee. "So we'll see." Democrats have tried to blame recent corporate scandals on Republican policies, and Republicans say calling Mr. Rubin on the carpet would undercut their political strategy. Mr. Lieberman, Connecticut Democrat, told The Washington Times last week that he had no plans to call Mr. Rubin, a Citigroup official who asked the Bush administration to intervene with Wall Street credit-rating agencies on behalf of Enron when those agencies were about to downgrade Enron's ratings.

Committee Republicans who have debated pressuring Mr. Lieberman to call Mr. Rubin as a witness say they doubt he would do so. "I don't think if we insisted on calling Robert Rubin that the chairman would do it," said Sen. Jim Bunning, Kentucky Republican. "I know Joe Lieberman." "I've been looking at some of the documents we got from Citicorp to try to determine his involvement," said Sen. Susan Collins, Maine Republican. "There's some documents on which there's 'R. Rubin.' But I'm not sure it's the same Rubin. So we've still got some work to do on that." Mr. Bunning said Mr. Rubin has shown an ability to talk at length in congressional hearings without really answering the questions posed by lawmakers. "He would take one question and filibuster the answer," Mr. Bunning said. "He does that all the time when he appears before committees. I call it obnoxious rather than smooth."

"It's outrageous that they go around beating up all of these corporate fat cats, and one of the biggest fat cats, Robert Rubin, is now clearly implicated, or Citibank is clearly implicated in some of the corporate accounting scandals when he was there," Rick Santorum (R-PA) said. "Not to have him come and account as they have made other folks come and account is purely political. If this was a former Republican secretary of the Treasury, I guarantee you that he would have been called up here a long time ago." He said it would take great political courage for Mr. Lieberman to subpoena Mr. Rubin.


Black Blade: Can you just see it? Robert Rubin in cuffs doing the "Perp Walk". I'm not holding my breath though. But there are some tough questions that Rubin should answer and it could be an embarrassment to the Democrats as Clinton and Gore were recipients of big Enron money. It appears that Rubin may have got his position by providing political favors when he was Secretary of the Treasury. Can you say "Teapot Dome Scandal"? I knew you could.

Black Blade
(08/01/2002; 20:34:44 MDT - Msg ID: 82073)
Economic Crisis Swells in S. America
http://www.washingtonpost.com/wp-dyn/articles/A28776-2002Jul31.html
Argentina's Neighbors Swept Up in Turmoil as Some Investors Flee

Snippit:

MONTEVIDEO, Uruguay, July 31 -- Several additional South American countries have been swept up in what is becoming the region's worst economic crisis in two decades, igniting fears of a replay of the Latin American financial collapses of the early 1980s.

The crisis, which analysts had hoped would be contained to Argentina's financial meltdown six months ago, has now spread to its neighbors Brazil, Uruguay and Paraguay. It has threatened to engulf other politically unstable economies in the region as well, including Bolivia and Venezuela, where analysts predict deep recessions for this year.

But this week, investor flight has particularly hit Argentina's immediate neighbors. In Brazil, Latin America's largest economy, government bonds have fallen to half their face value in recent weeks because of fears of a government default. The Brazilian real, in a tailspin that has lowered its value against the dollar by 19 percent this month, today touched its lowest point since going into circulation as the national currency in 1994.

Paraguay has come face-to-face with the prospect of a banking collapse and a deepening recession. Here in tiny Uruguay, dubbed the "Switzerland of Latin America" for its rock-solid financial system, government officials trying to stave off a debt default are seeking an immediate loan from the International Monetary Fund, the U.S. Treasury and other major foreign lenders.

To ease the pressure, the Uruguayan government was forced to close banks Tuesday for the first time in 20 years. It decided today to extend the banking holiday until Monday. The closure left many Uruguayans lining up in front of ATMs.


Black Blade: One should not forget the financial crisis in Colombia either. Chile casts a wary eye to the east as well. The people had better get prepared because this is like a plague that has Buenos Aires as ground zero and is spreading outward. Even Mexico is concerned about the impact to its economy. I have some gold Uruguayan pesos, however, USAGOLD has offered several Gold coins from south of the border (Argentine, Uruguayan, and Brazilian). Unfortunately these Latam people are going to suffer badly and only those who have prepared will come through this without too much difficulty. When this mess shows up on our doorstep in the north (Mexico, US, and Canada) it is sure to spill across our borders.

Cavan Man
(08/01/2002; 20:38:43 MDT - Msg ID: 82074)
USD/Yen: timing of re-design....Coincidence?
I smell devaluation and/or default.Friday, August 2, 2002 9:44 a.m. JST

Govt To Redesign Bank Notes For 1st Time In 20 Years

TOKYO (Nikkei)--The government and the Bank of Japan decided Thursday to redesign the 1,000 yen, 5,000 yen and 10,000 yen bills, with circulation planned to begin in fiscal 2004. _Read More...
Black Blade
(08/01/2002; 20:45:57 MDT - Msg ID: 82075)
The Glory of Gold by Jonathan Hoenig
http://smartmoney.com/tradecraft/index.cfm?story=20020724

Snippit:

PERHAPS IT'S TAKEN the evaporation of trillions of dollars of stock-market wealth and several of the biggest corporate bankruptcies in history to get us thinking, finally, about the risks associated with paper assets. While some of you might think hard assets like gold bullion are owned only by Montana Militia types, I've found owning gold to be a satisfying, prudent and (lately) profitable endeavor. And with U.S. equities and the dollar in virtual free-fall these days, my interest in the precious metals has become something of a fetish. Whether we're talking Eagles, Maples, Kruggurands or gold bars, the only way I can describe the experience of holding even a single ounce of gold is to say that it feels like wealth. And these days, wealth feels really, really good. Gold's recent strength has been attributed solely to weakness in the U.S. dollar and a skittish stock market. But I'm of the belief that gold is just plain undervalued � especially relative to more traditional investments (read: equities).

Black Blade: Jonathan Hoenig is also known as the "Capitalist Pig" (portfolio manager of Capitalist Pig Asset Management - a hedge fund) and is a frequent guest on FOX's "Cashin In" where he always pushes Gold as an asset class even when ridiculed by the other guests (who incidently have lost their shirts over the last couple of years). In the article he takes another view of the Gold/DOW ratio as a measure of value.

silvester
(08/01/2002; 20:47:46 MDT - Msg ID: 82076)
Griffon5 message

The Griffon5 message came across very clear today. We need more folks to come to the realization that the times are as bad or worse than most understand. Almost daily I try to bring the conversation to gold with friends. It is very difficult to deliver the message without feeling awkward. Why is it so hard for most to understand we have so little time left to salvage our wealth? We are a very strong society recently based(few decades) on a very weak paper system but the idea that we need to back our investments with gold is foriegn to most folks I know.

This country will need strong people with gold to kick start the next economy. Awkward or not, this message must reach more people. Gata keep trying. You guys(and gals) are great.
turkey hunter
(08/01/2002; 20:58:31 MDT - Msg ID: 82077)
Joan Veon Interview
Joan Veon interviewed William R White, BIS Economic Adviser and Head of Monetary and Economic Department a few weeks back. The Bank that deals in gold!

Veon: With regard to gold............

White: With regard to gold, there are a number of combinations to explain its rise. One is that gold prices were very low for a long period of time. The flow demand for gold is significantly higher than the flow supply, in part because flow supply is down reflecting the low prices and the cost to open up or reopen mines. Flow demand is rising and could rise sharply for structural reasons. China and India are doing very well with opening up the middle classes and gold particularly in India and in China is considered a symbol of status such as jewelry. I would think that as they become more liberalized that it will change the price of gold, simply because there are people whose culture tells them to buy it......
________________
Joan Veon is a reporter and financial advisor who has been following the changes that are taking place on the world financial scene.

Another --- "Can you not follow in the footsteps of Giants. I tell you it is an easy path to follow"

Black Blade
(08/01/2002; 21:00:34 MDT - Msg ID: 82078)
Market Wrap Up � Puplava
http://www.financialsense.com/Market/wrapup.htm
Snippit:

Just about everywhere you go these days, Wall Street and the financial press are doing their best to discredit the metal. Why? The reason is that gold is a barometer on government and the financial markets. It is unloved, talked down, and discredited by Washington and Wall Street. They know the rise in gold calls into question the expansion of money and credit. Like a barometer signaling an approaching storm, gold is the one true barometer of the financial system and on government itself. It is the reason gold is hated in Washington and on Wall Street.

Alan Greenspan, writing in Gold and Economic Freedom in 1966 said, "In the absence of the gold standard, there is no way to protect savings through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done, in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and therefore declined to accept checks as payments for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves." That is why Washington and Wall Street wage a war against gold.

The talk in financial circles that gold is an archaic relic of the past will prove to be shallow as it continues to rise against one currency after another around the globe. If you were a citizen in Argentina, Brazil, or Uruguay, where would you rather have your money -- in paper or gold? Gold or silver would have been the only life preserver that would have enabled you to protect your capital in times of crisis as your nation's financial system imploded and your banking system was shut down. This is what Japanese savers are now doing after 12 years of deflation and repeated recessions. It is also starting to happen here in America. In a CNBC poll of its viewers, 22% of all those polled now believe gold will produce the highest returns in the next 12 months.


Black Blade: A good article � check it out. Comments? No need, Puplava nails it.

Siochaina
(08/01/2002; 21:02:33 MDT - Msg ID: 82079)
Back in Town
Maybe the Forum should put together a nice little gold present (hint MK) so I can get away more...market seems to do well...though hopefully it will do better yet in next few days. I am still concerned that we may have to wait till October for real break-thru though today looked good

Saw three Companies....two are very well known ....and there is NO recovery in sight ...people are scared at all levels and wonder how long their jobs will be there and more importantly what next...I have never seen this degree of fear... not quite panic but getting closer.

Also I had a long talk with an executive from Europe...he is shocked at the coverage of US News....so very little economic facts...so much happy days are coming etc...yet lots about when we are going to war...as he said...you Americans are living in Country wide Disney World of make believe...what a shock when you find out what is really out there!

Sad commentary!

Black Blade
(08/01/2002; 21:16:19 MDT - Msg ID: 82080)
EU hit by accounting allegations
http://news.bbc.co.uk/2/hi/business/2165767.stm

Snippit:

The 98bn euro (�62bn; $95bn) budget of the European Union is an accountant's nightmare, riddled with mistakes and full of loopholes, according to one of its own former auditors. In an interview with the BBC, Marta Andreasen - who was ditched from her post as chief accountant at the European Commission in May - says the Commission's numbers fail even to meet minimum accounting standards. Officials can change numbers without leaving any kind of electronic trail, offering a standing temptation to fiddle the figures, Ms Andreasen said. The charges come at an embarrassing time, just as the world is trying to tighten the rules after a spate of accounting irregularities committed by large private corporations.

Ms Andreasen told the BBC's Today programme that the systems at the Commission made accurate record-keeping impossible. "The effect of all this is that the accounts do not present a true and fair view of the situation at the commission," she said. "The computer system on which the transactions are processed is incoherent, insecure and allows no audit trail." The lack of security, she warned, "gives big room for fraud" - and makes tracking it almost impossible. Ms Andreasen was moved to a job with few responsibilities on her old 125,000-euro salary in May after refusing to sign off on the Commission's 2001 accounts. She had been pressured to do so by senior officials, she said, and is now facing disciplinary action initiated by Neil Kinnock, former UK Labour Party leader and now Commission vice-president in charge of administration.


Black Blade: And it gets worse. It appears from leaked documents that the EU is rife with corruption and fraud. It appears that some one has a lot of explaining to do. I suspect that we could see Euro markets take a big hit at the open of trading. Do they do "Perp Walks" in Europe? Hmmm...

Black Blade
(08/01/2002; 21:22:52 MDT - Msg ID: 82081)
Asia Starts Off Ugly
http://quote.yahoo.com/m2?u
Asian markets have resumed the big slide into oblivion. Looks ugly tonight. The data from the US over the last couple of days is certainly not inspiring to the world markets. Even the "Currency War" is turning out to be a losing proposition. Euro markets should be hammered at the open as well. It should be an "entertaining" night as we watch the world markets.

- Black Blade
Siochaina
(08/01/2002; 21:27:47 MDT - Msg ID: 82082)
@ BB
"Leaked document"....hmmmn....certainly timely for the $ ...if it gets wide spread publicity

Gee I never use to be a conspiracy theory person...but the more I see/read ...the more I wonder when things come out like this

Though no doubt US has same or worse problems.
longj
(08/01/2002; 21:35:39 MDT - Msg ID: 82083)
This is a graph of the U.S Merchandise trade deficit
http://www.kitcomm.com/comments/gold/userimages/whack.jpgI took trade deficit numbers and yearly POG data. I graphed the amount of time that the US gold stockpile could finance the balance of trade shortfall. This looks like a recipe for currency trouble.

And it looks like gold is pretty cheap, and that it is miniscule in availability when compared to the current account....you want money that is real or a promise to pay from a broke bank?

No GOLD, no guts, no GLORY!!!

Pizz
(08/01/2002; 21:42:47 MDT - Msg ID: 82084)
Mr G.,Griffin5, Cavan Man, All
Mr. Gresham: Thanks for the supporting words. It's a tough nut when in today's corporate world and condition it's in, one has to have a suit of armor over his/her humanity to do what has to be done (???). I thank God I still have some feelings left.

Griffin5: Welcome and don't just lurk, I'd (and probably quite a few others) prefer to hear more of your thinking rather than try to fathom the depth of your post - it was a damn good one. Greenspan & Bush lunch? I'll add a thought - how bout a luncheon update? "Where are you withregards to the timetable" and/or "how much time do we have left??" Probably the latter.

Cavan Man: I never have believed in coincidences. The two largest economies in the world just happen to overhaul their currencies at about the same time - and both with major banking problems?? Right - I vote for DEFAULT.


Now, about war and elections. Has anyone ever given any thought to the fact that assuming our enemies just might be waging a bit of a financial war against us, if the markets really crashed before elections, I would think the Democrats might just gain control of Congress, in a big way.
Might put a crimp in the Iraq plans. And on that basis, now that their spining the Iraq idea off til next year . . . what a twisted web is being woven.

Pizz
sector
(08/01/2002; 21:53:35 MDT - Msg ID: 82085)
CavenMan When will BOJ "Intervene"? The Changing Currency "Designs" of Japan and the US
They propped the Nkk225 back up to 10,000 in December 2001...for the end-of-year mark-to-market drill. This to save their insurance industry and massive pension funds.

Will they do it again? Don't know.

The Bigger question relates to the story about a currency redesign due in 2004.

Get this STRAIGHT. The new currencies of Japan and the US will NOT be introduced in 2004!

They will be issued long before 2004 and they will represent, synchronous massive devaluations of both nations currencies. Canada and Mexico will be "Assimilated" by the Federal Reserve's plan.

There can no other explanation for both US and Japanese currency paper design changes at this juncture.

What will happen to gold holders? They will keep their wealth...maybe surreptitiously...but they will still HAVE it.

What about gold shares? They go to the moon....in "New" dollar units because "Old" dollars will not trade on electronic stock markets [Just a wild guess].

The goal of the Fed will be to introduce so much confusion about the "New" money's conversion factors that people will not understand they have been swindled by their government...that their "Social Security" payments will be reduced by a factor of 10X.
THX-1138
(08/01/2002; 23:18:57 MDT - Msg ID: 82086)
My thoughts on States Rights, personnal property, and real money.
I have been thinking lately (after lurking here and at the ?other place?) more and more about how the individual States could reaffirm their 10th Amendment Rights again and uphold the US Constitution even if Congress refuses to abide by it.

The biggest obstacles I see are the Fed Notes.

Article 1, Section 8 of the US Constitution requires the money to be coined and the States can?t print their own. Since Congress seems to have deferred its right to declare what is money and set the value to the private Federal Reserve Bank, they have violated their duty and the Constitution.

Now in Article 1, Section 10, it says that the States can only make gold and silver coin as payment of debt.

If I was the Governor of my State I would be in a quandary as to how to abide by, and uphold the Law of the United States Constitution and that of my State Constitution.

The Fed Notes are what the Federal Government has declared to be legal tender to pay all public and private debts. Are these supposed to be the public and private debts payable to the States or only to the Federal Government? If they are to be used for paying State debts then this is a violation of Article 1, Section 10. That section has never been changed to my knowledge.

So, here is where my brain told me it had an idea.

What if, as Governor, I declared (or was to sign some newly passed legislation) that six months from now all tax money delivered to the State Treasurer would have to be in the form of gold or silver coins. Along with the declaration would be a pronouncement that every State funded project currently being funded would cease until enough revenue was collected to pay the State?s bills (e.g. State employees and any private contractors). However, the Fed Notes still held in the State Treasury and in private hands would still be used to pay off the Federal Income taxes and any Federal taxes owed which had been collected within the State (i.e. gas, phone and other Federal fees).

This could help to get rid of all the paper money, or at least Fed Notes, but would make a problem with having to pay everything with coin. (I haven?t figured out yet how to get rid of the base metal coinage. Still working on that issue.)

One proposal I would want to implement as the Governor would be the laws on property taxes. If you are paying a mortgage or property taxes you are not a free person. I would have to get a law passed somehow to prevent the Federal Government from ever being able to cease someone?s property if the land and house was fully paid for. I would also have to get a law passed that would abolish any property taxes on property that the owner has full title on. Now the way I see things regarding mortgages is the bank owns the land and house. A bank is not a person, but an entity. A person shouldn?t be taxed. The bank can be taxed. If you have a mortgage then the property belongs to the bank and can be taxed. Once a person was to fully pay off the mortgage the land/house/property becomes theirs and all property taxes would stop and the land would be freely transferable to all heirs of the estate. I think this would get people to pay off those 30-year mortgages quickly as it would help them save money in the long run. However, if someone was to re-mortgage the house/land/property, then property taxes would again take effect.

Now the States cannot print money, but can they issue gold and silver certificates on coins in storage. If a State set up a system of 100% backed certificates off of the gold and silver coins collected, would it be legal?

I haven?t figured everything out yet, but I thought I would present some of my thoughts to my fellow knights to comment on.


Signing off for the night,

THX-1138
Waverider
(08/01/2002; 23:55:16 MDT - Msg ID: 82087)
Tidbits
Slingshot/Gandalf - seems that the Siege Engine is moving forward in full force...maybe others will join in too...it's fun!

Rock - my pleasure - there's such an awesome group of people at this Round Table and it's a total privilege to participate and learn. I love it here too for many of the same reasons.

Steady - I see that Gandalf and Rock have opened the door and invited you in...I saw a seat around this Noble Table that has your name on it...reserved just for you - I hope that you found it.

Black Blade - the Onion Humor was the joke of the week, great find.

Pizz - hang in there. I think that in one way or another we're likely all going to be faced with others suffering and unfortunate circumstances before this is over. I wish I had an answer for you but I haven't.

Welcome to all the new posters...and a BIG thank you to each and every Knight and Lady who participates here - you're an awesome group!

Cheers,
Waverider
Waverider
(08/01/2002; 23:58:14 MDT - Msg ID: 82088)
Leigh
We haven't heard from you in a while...hope you have the time to join us again soon. Cheers,
Waverider
Black Blade
(08/03/2002; 00:38:21 MDT - Msg ID: 82162)
Munk must 'wake up' to new corporate world
http://www.nationalpost.com/utilities/story.html?id={BBC0F9C9-DFC2-45B9-B50F-ECDBD28D1799}
Analyst blames Trizec chairman for company woes

Snippit:

A routine conference call turned ugly yesterday for Trizec Properties Inc. after frustrated analysts assailed the real estate company for missing its second-quarter profit targets and accused chairman Peter Munk of hurting shareholders by basing his business decisions on self-interest. Jon Litt, an analyst with Salomon Smith Barney in New York, pinned the company's financial performance squarely on the shoulders of Mr. Munk, who he criticized repeatedly in a pair of scathing outbursts.


Black Blade: It appears that Munky Man is not only sticking it Mega-Hedger Barrick shareholders, but also to those who have the misfortune of being Trizec shareholders too. Barrick has grossly under performed against its peers as has Trizec. Time for the shareholders to vote with their feet and dollars.
Topaz
(08/03/2002; 01:55:58 MDT - Msg ID: 82163)
Belgian
Hey Belgian, you wrote:
...What relief can a POG back to 270$ bring to this gigantic mess ???
A sub$300 PoG is imperative if further rate cuts are intended...the logic being "the Currency - @ 1% - is as good as gold, and look! POG is proving it"....as the Bond yield charts show, (as posted previously) another rate cut (or three) are inevitable imho.
....Or what good effect could possibly come, from a Dow back above 10.000 ???
No GOOD effect other than to forestall the chaos in Bonds if Yields sink too much lower.
...Both events result in a stronger US$ making the growing debtload as heavy as Gold ???
Yup, thats the plan, all thats gone before is discounted, we're talking global Systemic support for the $US...spotfires will be extinguished as they flare but the System WILL be supported.....until...one fine day...at a time of their choosing...it'll all be over!
...Massive defaults or Hyperinflation are the only choices left. IMVHO, it will be both.
Yes Sir, agreed. In the mean time we'll trade it.
Belgian
(08/03/2002; 03:05:40 MDT - Msg ID: 82164)
USAGOLD postings #82155 #82157 Many thanks !
The numbers game (gold-derivatives + physical uptake) remain at zero transparancy (remember that the BOE goldsales were ment to bring "more" transparancy-humhum). It is only the insignificant numbers that are happely exposed. Is it a co-incidence that the *rate of attrition*
(depositors demanding their metal) goes in lockstep with the pre-meditated decline in interest rates, already at 40 (fourty) years lows ? Premeditated : 1 yr US-IR 1,75% >> 1%.

In simple words : What is the difference in holding US$ at 1%/yr and holding Physical Gold in Possession or leasing Gold at 1%/yr ? And why isn't the euro following those dollar-interest rates declines (reaching towards zero) ?
With the euro quarterly marking to market and the dollar not. Here I'm at a complete loss. Can the CBs force the bullion banks into the market for ever larger quantities of physical, with the pressure of declining IRs ? This, of course (as you mentioned) to block all attemps to escape currency detoriation (depreciation).

Can you please elaborate on that big picture of : Systematic Declining interest rates + contradictional currency depreciation and low (lower) POG ? The mechanism of who is pushing (squeezing) who (central bankers versus undisciplined bankers).
I think it is in the very interest of all Gold students (including myself) to understand the exhorbitant contradictions, manifested today : Interest rates still declining after already having reached 40 yrs lows and at the same time an underlying *proliferating* reserve currency (US$) refusing to detoriate plus the Gold manager's capability to limit POG's volatility, almost perfect. The Gibson paradox isn't (strong) enough for me to explain the magnitude of what's happening.

How long can bullion bank's POG-operations, function, to cap POG for protection of the massive gold loans...with a projected interest rate of 1% (from 1,75%), probably by the end of this year, if SMs dip consistantly below 9/11 valuations ? Is there another magical trick possible ???
(euro-assistance < compromised mark to market> and pitty for the dollar out of pure selfinterest-?). We must not forget that a US-SM crash, affects us ALL.

Many thanks for your patience and goodwill. Regards, Belgian.
Belgian
(08/03/2002; 03:40:39 MDT - Msg ID: 82165)
@ Topaz
Our postings crossed whilst writing to USAGOLD.

To execute what you are suggesting (POG > sub 300$), I think the US (FED) needs Euroland (ECB) co-operation (mark to market), as suggested in usagold posting. The western hemisphere working, temporary, together for orderly unwinding of the luring financial market's crash (US-seats at BIS-?). I have my doubts about the ECB's co-operation, because of not showing signs to lower Euroland's IRs as well (FOA mentioned that before).

But what do we gain from postponing the final day of reckoning and hoping that buying, time, might bring salvation...if we have the Japanese (failing) experiment (of zero IR for years now) as an example ? Japan residing into the dollar-block.
Interest Rates must stop somewhere and reverse the more dramatically at their zero floor. Yeah, I know...all a bit too logical and therefore out of reality.

Question : Do you still dare to *trade* without your Golden Physical in Possession-parachute...so close to mother earth's surface !?

We saw what Japanese housewifes did to Gold, once they understood/percepted (fully or not) what is happening. They hoarded Physical by the kilograms, rather than holding yens/dollars at 0,zero IR. The Gold rush peithered out when the price trend discouraged them. Will the same thing happen with americans when reaching 0,zero IR ? Where will the fresh Physical come from to discourage them ? Answer : it is all in those unknown numbers...ppffftttt. Nice weekend to you Topaz.
Boilermaker
(08/03/2002; 04:58:27 MDT - Msg ID: 82166)
O'niell to the rescue
http://biz.yahoo.com/rb/020803/economy_oneill_1.htmlReuters Business Report
O'Neill Says U.S. Gov't Mending Economy

WASHINGTON (Reuters) - U.S. Treasury Secretary Paul O'Neill on Saturday sought to reassure investors who have seen their retirement accounts shrink after a wave of corporate scandals that the government is making the repairs it needs to ensure the economy remains sound.

In an opinion piece published in The Washington Post, O'Neill said the U.S. economy remains fundamentally strong despite the recent sharp drop in stock prices.

"We have had two straight quarters of solid growth. Consumer spending has stayed strong and business investment is picking up. As our economy continues to grow at a healthy pace, Americans will see their incomes and their retirement accounts grow as well," he said.

comment
The country faces a systemic economic meltdown and Paul says "take two aspirin and wait till next year". Wouldn't it be nice to have some leaders who could tell it like it is? This country has come a long way (down) from the vision of its fathers.
misetich
(08/03/2002; 06:07:54 MDT - Msg ID: 82167)
Falling Share Prices Pose Capital, Reputation Risks for Japanese Banks
http://www1.standardandpoors.com/Forum/RatingsCommentaries/FinancialInstitutions/Articles/073102_stockforjbank.htmlSnip:

Impact on Capital
Since September 2001, unrealized losses in "other securities", including cross- held shares, have been deducted from Japanese bank's Tier 1 capital. For the 13 major banks, these unrealized losses totaled �1.3 trillion at March 2002, which further damaged their already weak capitalization.

In fiscal 2002, stock prices have continued their downward trend, with the TOPIX index dropping by 11% between the end of March 2002 and its lowest mark on July 26, 2002. Given that the beta or responsiveness of the major bank's stock portfolios to the TOPIX index is around 0.6, the value of the major bank's stock portfolios is estimated to have fallen 6.6% over this period. Assuming no change in the composition of banks' stock portfolios since March, a 6.6% reduction corresponds to �1.7 trillion (�25 trillion x 6.6%) in real terms. To account for the loss, the banks would have to deduct �1 trillion after calculating tax benefits (�1.7 trillion x 60%) from their capital. This figure represents 5.7% of the major banks' Tier 1 capital as of March 2002.

Furthermore, the impact on capital may be greater than this estimation, as the ability of the major banks to utilize tax benefits has almost reached its ceiling. As a result of the continued use of tax accounting provisions since fiscal 1998 (ended March 1999), the major banks have increased the amount of deferred tax assets on their balance sheets. Currently, deferred tax credits account for about 50% of Tier 1 capital at the major Japanese banks. Deferred tax assets can in principle be included in capital in an amount equal to the bank's projected taxable income for the following five years, multiplied by the corporate tax rate. If the banks are unable to use this tax provision, the amount to be deducted from their capital would be 100% of unrealized losses, not 60%. In other words, the impact would be 1.7 times greater, or 9.7% of the major banks' Tier 1 capital.
............
Since the introduction of limits on deposit insurance from April 2002, depositors have shifted funds from term deposits, which are no longer fully protected, to liquid deposits, which remain fully protected until March 2003. These liquid deposits could potentially be withdrawn immediately in the event of any negative market rumors surrounding a bank. This situation could trigger a downgrade of the affected bank.

Japanese banks have been increasing their disposal of stockholdings, particularly in light of the planned introduction of new regulations slated for September 2004 that would limit banks' stock holdings to 100% of Tier 1 capital. In fiscal 2001, the major banks sold �5.2 trillion in stocks. However, simply reducing stock holdings from the current level of about 140% of Tier 1 capital to meet the regulatory target will not be enough to ameliorate equity holding-related risks for Japanese banks. Internationally, major banks typically hold stocks equivalent to just 20%-30% of their Tier 1 capital. Furthermore, the quality of the Japanese banks' capital is fragile and thus their risk tolerance is much lower than that of their overseas peers.

***********

Misetich

From continent to continent Banking woes continue to accelerate -

The setback of US economy numbers revisions this past week- does not augur well for US markets and stock markets worldwide -

Got gold?
misetich
(08/03/2002; 06:19:03 MDT - Msg ID: 82168)
Market Conditions Take Their Toll on U.S. Life Insurance Industry
http://www1.standardandpoors.com/Forum/RatingsCommentaries/Insurance/Articles/073102_market.htmlSnip:

Investment returns are so crucial to the income flows and capital levels of insurance companies�especially life insurers�that recent developments in both the equity and debt markets are likely to create problems for the sector.

The life insurance industry at large still has a number of fundamental strengths working in its favor, including extremely strong capital, a very strong business position, strong operating performance, high-quality investment portfolios, and the general stability of protection-based products. In addition, the industry has responded well to capital pressures, with companies improving their capital deployment through use of reinsurance. At the same time, many companies are improving earnings through the use of technology and better distribution techniques.

However, many of these fundamental strengths are now being eroded by the numerous challenges facing the industry, including continued deterioration in asset quality, increased corporate defaults, earnings pressures on spread- based businesses, and the impact of poor equity market performance. Although Standard & Poor's generally does not react in its ratings to short-term market shifts, the duration and magnitude of these challenges has shifted the balance toward an overall negative outlook on the industry.

Standard & Poor's revised its outlook on the U.S. life insurance sector to negative from stable, in tandem with a slew of ratings actions on individual groups (see Tables 1 and 2) on July 30, 2002. About one-third of the U.S. life insurers that Standard & Poor's rates interactively either have a negative outlook or are on CreditWatch with negative implications. (Being on CreditWatch with negative implications puts a company under increased surveillance for a possible downgrade in the short term, whereas a negative outlook indicates the likely direction of a rating over a one- to three-year time horizon.)
.............
Falling stock values affect life insurers both directly and indirectly. There is direct exposure through investment portfolios, while for writers of variable annuity products, there is a decline in fee income. With the S&P 500 dropping by 27% from Jan. 1, 2002, to July 30, 2002, many insurers with large equity portfolios will experience substantial hits to their earnings and capital bases. In addition, because of lower projected profitability in this product line, insurers are expected to accelerate the pace of their amortization of deferred acquisition costs, which will further pressure overall earnings performance.

Under a volatile equity market, in addition to a declining fee income stream, statutory earnings will continue to be affected by minimum death-benefit guarantees reserve increases on variable annuity products. Following years of aggressive marketing that locked in higher guarantees for policyholders, insurers are now needing to bolster reserves to support the business on their books and to meet statutory accounting requirements.

A more indirect impact of sustained downturns in stocks is reduced demand for variable products. When an individual buys a variable annuity policy, the payout he or she receives at retirement depends on the value of an underlying pool of assets held by the insurer in a separate account, and separate accounts are generally heavily weighted toward equity investments.
............
Conclusion
Downgrades in 2002 are expected to continue to be driven by a decline in earnings and capital becasue of asset-quality issues.

Well-positioned companies for the remainder of 2002 will have:

Strong fundamental earnings from diversified sources.
Sustainable competitive advantages through product or distribution.
Multiple franchises or a protected niche in selected markets.
Operational efficiency.

Vulnerable companies for the remainder of 2002 will have:

A higher-than-average level of investment risk.
An overdependence on equity markets.
A concentration on revenues and earnings in a single product line.

************

Misetich

From banks, to life insurance corporations - recession in Japan, little growth in US, slowdown in Europe, Argentina's contagion in Latin America -

Central bankers have their hands full - in inspiring confidence - come to think of it - weren't these same Central Bankers cheerleading with the new found economy, the new paradigm?

The business cycle is alive and well and Central Banks planners are being thumbed down!

Got gold?

misetich
(08/03/2002; 06:37:46 MDT - Msg ID: 82169)
Employment Data Raise Questions About Economic Recovery
http://www.nytimes.com/2002/08/03/business/03ECON.htmlSnip:

"The real question I have is whether the labor market is beginning to turn around or whether the stock market will short-circuit that process," said William Dudley, director of domestic research at Goldman Sachs. "Alongside the net hiring in July, there were more than enough signs that were disturbing."
.................
Employers cut the average workweek by an unusually large three-tenths of an hour, to a flat 34 hours. Not since the Labor Department began to track the average workweek in 1964 has it been as short, except in two unusual months: January of 1996 when a blizzard struck the East Coast, and October of last year, in the aftermath of Sept. 11.
.............
Many economists see the meager job growth since April as evidence of the determination of employers to hold down labor costs. More evidence came in the rise of 191,000 part-time workers in July who sought full-time hours and could not get them.

Such data does not offer a good omen for the third quarter, says Peter Hooper, chief domestic economist for Deutsche Bank North America. "Total hours worked in July were less than the average worked in the second quarter," he said. "We started the third quarter at a lower level than the weak second quarter.

************

Misetich

US economic recovery which has been trumpted by Bush, O'Neil, Greenspan and Wall Street economists is anemic -

The US has been in recession since the 1st qtr 2001 except for the "rebound" in Q1 -2002 more as a result of inventory liquidation than production- Estimates for Q2 2002 were reported as 1.1% - subject to being revised


Eleven rate cuts have not done the job
Tax cuts have not done the job
Government spending has not done the job

Little if any excess capacity has been reduced -

Got gold?

misetich
(08/03/2002; 06:55:23 MDT - Msg ID: 82170)
Investors Keep Pulling Out of Mutual Funds-Early Estimates Suggest July Drop Was Biggest Ever
http://www.washingtonpost.com/wp-dyn/articles/A38003-2002Aug2.htmlSnip:

By Caroline E. Mayer
Washington Post Staff Writer
Saturday, August 3, 2002; Page E01

As the stock market continued to drop last month, investors of stock mutual funds remained on their rapidly retreating course, selling off the largest amount of holdings in equity funds ever recorded in a single month.

Preliminary estimates indicate that perhaps as much as $55 billion flowed out of equity mutual funds in July -- almost double the $30 billion outflow posted in September after the terrorist attacks.
...........
Misetich

Most investors had flocked to "premium" nifty 30 Dow stocks -and must have felt comfortable as the Dow had resisted most onslaughts - as time and time again it rebounded -

The shock must have been seeing the Dow tank below 8,000 level -

With economic conditions worldwide being what they are - and little hope in the near term - stocks are destined to go lower at which point we can expect further mutual fund redemptions,

Lets not forget the effect on pension plans, banks, life insurance companies of lower stock market values

Got gold?

misetich
(08/03/2002; 07:03:48 MDT - Msg ID: 82171)
O'Neill Says U.S. Gov't Mending Economy
http://www.washingtonpost.com/wp-dyn/articles/A38736-2002Aug3.htmlSnip:

Reuters
Saturday, August 3, 2002; 1:22 AM

WASHINGTON (Reuters) - U.S. Treasury Secretary Paul O'Neill on Saturday sought to reassure investors who have seen their retirement accounts shrink after a wave of corporate scandals that the government is making the repairs it needs to ensure the economy remains sound.
............
"We have had two straight quarters of solid growth. Consumer spending has stayed strong and business investment is picking up. As our economy continues to grow at a healthy pace, Americans will see their incomes and their retirement accounts grow as well," he said.
............
Misetich

O'Neil must be on drugs - if he considers 1.1% estimated GDP growth in 2nd Qtr 2002 "solid growth"

The following passage in the article is 'very interesting' to say the least
Quote
In an opinion piece published in The Washington Post, O'Neill said the U.S. economy remains fundamentally strong despite the recent sharp drop in stock prices.
End of quote

Now they are beginning to qualify their statements - is he speaking "personally" or as Treasury?

Got gold?
misetich
(08/03/2002; 07:17:24 MDT - Msg ID: 82172)
Shell faces South Africa apartheid lawsuits-will be added to the list, which already includes IBM, the computer company, Deutsche Bank, Dresdner Bank, CommerzBank, UBS, Credit Suisse and Citicorp.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185386202&p=1012571727108Snip:

By Nicol Degli Innocenti in Johannesburg
Published: August 2 2002 17:41 | Last Updated: August 2 2002 17:41
Royal Dutch/Shell, the oil company, is to be cited in a multi- billion-dollar class action lawsuit brought by a team of lawyers on behalf of the victims of South Africa's apartheid regime, a lawyer said on Friday.

"We have filed against seven companies and corporations so far and in the next few weeks, probably before August 9, we will file against another two or three including Royal Dutch/ Shell," said John Ngcebetsha of the Apartheid Claims Taskforce.

Shell, which is accused of supplying the white minority regime with oil in violation of an anti-apartheid embargo, will be added to the list, which already includes IBM, the computer company, Deutsche Bank, Dresdner Bank, CommerzBank, UBS, Credit Suisse and Citicorp.

A total of 35 companies and banks, including Honeywell, Exxon Mobil, Barclays and Natwest, have so far been identified by the task force. Letters were sent to them in July to propose voluntary settlement talks, and those that have not responded will be taken to court in an effort to force them to pay reparations to the victims of the apartheid regime.

The first hearing is scheduled for August 9 in New York. The team of lawyers bringing the class action lawsuit is headed by Edward Fagan, the US lawyer who in 1998 forced Swiss banks into a $1.25bn settlement for victims of the Holocaust.

Mr Fagan claims reparations of up to $100bn could be won for the victims of apartheid and says the case will finish in two to three years.
*************

Misetich

Lawyers are certainly being kept busy...
What are the effects of all these lawsuits, investigations, inquiries on Corporate Executives and their staff - A vast amount of resources and time must be given-
Valuable time and effort is being spend unproductive

Got gold?

misetich
(08/03/2002; 07:24:27 MDT - Msg ID: 82173)
Friday's U.S. employment report might be the final nail in the U.S. economy's coffin.
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1028309160000&sn=1&banner=mainwireSnip:

By Isobel Kennedy

NEW YORK, Aug. 2 (MktNews) - The economic data releases were horrid
all week, and Friday's U.S. employment report might be the final nail in
the U.S. economy's coffin.
..............
Though July average-hourly-earning were up 0.3%, the year-over-year
rate slipped back to +3.2%, and hours worked fell.

The U.S. Bureau of Labor Statistics tried to gave this a good spin,
saying the data represented a "steady" labor market.

In fact, however, the data suggest no economic growth and slippage
in production and incomes that are more consistent with a double-dip in
growth, economists said.
...........
Economists generally called the report poor and some said they were
revising their gross domestic product forecasts down for the second
half.

They said the figures are a bad start for the third quarter and
point to lower industrial production and housing starts.
...........
The totally unsubstantiated rumors centered around European
institutions in possible trouble, coordinated rate cuts from central
bankers and hastily called meetings at insurance companies.
..............
Some buyside accounts have been saying they don't want to buy any
corporate names that have not gone through the SEC certification
process. The SEC confirmed receipt of Golden West's letters late
Thursday or early Friday.
*************

Misetich

Lets repeat that again
Quote
The totally unsubstantiated rumors centered around European
institutions in possible trouble, coordinated rate cuts from central
bankers and hastily called meetings at insurance companies.
End of quote

Got gold?
misetich
(08/03/2002; 07:32:36 MDT - Msg ID: 82174)
Bush Puts Positive Spin on Jobs Data, Notes Unch Jobless Rate Aug 2 / 12:37 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1028306220000&sn=1&banner=mainwireSnip:

WASHINGTON (MktNews) - President Bush ignored the weaker details of
Friday's employment report, focusing on an unchanged unemployment rate
for the month of July in brief remarks to reporters at the White House.

"Today the statistics are out that show that the unemployment is
holding steady," Bush said, referring to a Labor Department report
indicating that the jobless rate remained unchanged at 5.9% last month.
............

Misetich

Bush was ambushed by the GDP revisions- Was it a setup? or did the President intervene in the last few weeks to 'save" the markets? even though HE MUST HAVE KNOWN of the GDP revisions!

Why would Bush and the his whole economic team spin the solid economic growth in the last couple of weeks - when reported numbers say otherwise?

November elections are a few months away - but that's ANOTHER story..

Got gold?

misetich
(08/03/2002; 07:40:58 MDT - Msg ID: 82175)
Portfolios: Putnam Scaling Back On US Corps, Short-Term Tsys Aug 2 / 10:46 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1028299560000&sn=1&banner=mainwireSnip:
By Ann Meyer
CHICAGO, Aug. 2 (MktNews) - Portfolio managers with Putnam Income
Fund (PINCX) recently told MarketNews International that they have
scaled back on U.S. corporate bond and short-term Treasury holdings and
are now emphasizing U.S. mortgage-backed securities.

"There has obviously been a tremendous amount of market volatility,
particularly over the last two months," said Kevin Cronin, Putman's
chief investment officer for fixed income.
............
"The corporate bond
market has been challenging," Cronin said. "You need a very diversified
portfolio of corporate bonds to mitigate the effect of a blow up."
...........
At the same time, bank and finance paper and old-line economies
like autos, rails and defense issues have continued to perform well.
"That has produced disequilibrium in the marketplace," Cronin said.
"Either the weak sectors will come on or the strong ones will fall off."

As a result, Putnam has been cutting back on old-economy
transportation issues, in anticipation they may fall. "What's next is
the pension liability that old economy companies have," Cronin said.
While so-called new economy companies tend to have younger workers and
401Ks for retirement funds, old-line companies like automakers and
defense have defined-benefit pension plans.

"The correction in the equity market, coupled with the aggressive
return targets of those pension plans, have caused many to go to
under-funded status. That's the next shoe to drop," he said.

Cronin notes that the corporate bond market has become less liquid
than it used to be.

"There's a contagion effect in the investment grade corporate
market that is contributing to a constrained liquidity. People will sell
WorldCom until there is no more bid for WorldCom, then it goes on to
Sprint and AT&T," he said, even if they don't have the same issues that
surround WorldCom.

The result is a market that's unreliable. For example, Cronin said,
"We don't think Qwest is going away. That being said, the debt is
trading at 50 on the dollar," so as a practical matter, it's not a good
holding.
.............
******************
Misetich

"Either the weak sectors will come on or the strong ones will fall off."

The bet is on the latter-

Got gold?
misetich
(08/03/2002; 07:54:28 MDT - Msg ID: 82176)
Dubious Doings Down Under-As a nasty Aussie financial scandal picks up steam, it is sucking in Berkshire Hathaway, Goldman Sachs and a stock tout for the New York mob.
http://www.forbes.com/home/free_forbes/2002/0812/068.htmlSnip:
Benjamin Fulford and Neil Weinberg , 08.12.02
Rodney Adler is the kind of guy a friend labeled a "spoilt brat." He was born into wealth in Sydney, Australia. In 1988, at age 29, he inherited a 30% stake, worth about $300 million, in commercial insurer FAI Ltd. when his father died suddenly. As FAI's chief executive over the next decade, Adler struggled to keep the firm afloat while its stock sank. The American Depositary Receipts fell from a peak of $73 to $5. He bailed out in 1998, selling FAI to HIH Insurance Ltd., another Australian insurer, for $180 million. Three years later HIH declared bankruptcy with $3.2 billion in debts, ranking as one of the largest failures in Australian history. (Figures have been translated from Australian into U.S. dollars.)

Turns out that Adler pulled off the sale with help from some very fishy reinsurance contracts. Supplying one of the policies was Ajit Jain, who runs Berkshire Hathaway's National Indemnity reinsurance arm and has been described by Warren Buffett as the "guiding genius" of the firm's major-catastrophe line.

Investment bank Goldman Sachs, it also turns out, had looked hard at buying into FAI, only to turn up its nose. Then it emerged as the financial adviser in its sale. The firm has faced questioning by the Australian government for knowing about FAI's financial artifices but saying nothing.

To top it off, Adler was all the while scheming to pump up the stock of FAI--whose assets included the troubled Hotel St. Moritz on Central Park South--by hyping its U.S.-listed ADRs. His partner was a stock tout who, it later turned out, was working for the New York mob.

Australia set up a Royal Commission, akin to a congressional investigative committee, last year to look into the scandal. It has uncovered evidence that Berkshire's Jain worked out a contract "designed to enable FAI to book a net profit on the transaction" in the year it was up for sale, according to Geoffrey Bromley, executive vice president for Guy Carpenter & Co., the Marsh & McLennan subsidiary that acted as middleman for the reinsurance. At no time was Adler interested in insuring against risk, Bromley conceded in testimony to the panel.

Instead, Jain negotiated to "develop a structure that would pass muster" with regulators, Bromley said. It included at least the appearance that FAI was transferring risk to National Indemnity. Then, when National Indemnity paid a large "claims recovery" back to FAI in the first year of the deal, the policy's status as reinsurance enabled FAI to book the money as a profit. When the deal was done, the parties backdated a cover note almost one year, possibly to give the appearance of a forward- looking policy. A commission attorney has labeled the Berkshire policy a "sham."

FAI's final chapter began on Christmas Eve in 1997, as Malcolm Turnbull, then head of Goldman Sachs' Australian unit, met with Adler. Goldman's U.S. private equity arm wanted to expand in Australia and figured it might do well taking FAI private, whipping it into shape and selling out. Adler was keenly interested. Over the previous three years FAI had lost a cumulative $38 million on $2.6 billion in revenues. The prospect of a big payday apparently convinced Adler to take extreme measures to pretty up FAI. In May 1998 he hosted New Yorker Jeffrey Pokross and his wife in Sydney, wining and dining them at swank nightspots.

Back home Pokross ran DMN Capital and worked with Bobby Lino, a.k.a. Robert L. Little, a member of New York's Bonanno crime family. Pokross had been charged with a "pump-and-dump" stock-ramping scheme the previous January by the National Association of Securities Dealers. He returned from the Sydney trip promising to "support the [FAI] stock."

In mid-June 1998 FAI's fiscal year was winding down and Adler faced a loss of as much as $30 million on $600 million in revenues. One week before his book closing he began negotiating to buy reinsurance--a product through which one insurer is supposed to assume another's risk. FAI's policies were from National Indemnity, a unit of Omaha-based Berkshire Hathaway, and GeneralCologne Re, which Berkshire bought in late 1998. National Indemnity sold FAI a policy costing $33 million over five years. FAI had to pay only $3.3 million in fiscal 1998 but received $24 million in an unusual claims recovery that, as a reinsurance buyer, it could book as profit. The real bill would come due over the next four years via $7.4 million annual premiums. The coverage ostensibly had to do with earthquake damage in Sydney. There were no earthquakes, but the claims-recovery gambit made for the quick payback.

Meanwhile, FAI promised to pay GeneralCologne Re $55 million for $52 million in coverage. Geoffrey Barnum, general manager for GeneralCologne in Australia, was asked by a commission attorney if he could "think of any benefit that FAI might have derived from the transaction, except a perceived advantage to its reported results, if it accounted for the contract as one of reinsurance?" Replied Barnum: "I can't think of any other advantage, no." Testifying under oath, Barnum admitted the apparent transfer of risk that qualified the policy as reinsurance in the contract was actually overridden in separate private documents. If they had been disclosed, the policies would not have been approved by regulators, he said.

***********

Misetich

Got gold?
USAGOLD / Centennial Precious Metals, Inc.
(08/03/2002; 09:40:07 MDT - Msg ID: 82177)
Common sense investing for common and uncommon times...
http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

ABCs of Gold by MK"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

Please Remember: It is your purchase from USAGOLD / Centennial Precious Metals that nourishes these pages.

Mr Gresham
(08/03/2002; 09:45:37 MDT - Msg ID: 82178)
Back Room Deals
http://www.bearforum.com/cgi-bin/bbs42.pl?read=246419Out of great crisis comes great opportunity -- for new owners.

I woke up this morning thinking about the Polaroid bk and its "purchase for a song" ($255m for hastily written-down assets several times that) by an arm of Bank One, as the template for what's likely to happen for most of the telecom sector. All that fiber, and cable, and wireless -- up for grabs! People are still going to make calls...and watch cable...

And guess what? It won't be you or me there buying the assets at Filene's Basement grabrack prices!

Equity -- on-paper equity -- whether in corporations or your house, is just the froth on the wave over the oceans of debt. (the TRUE eventual owners, in many current cases, after a token "haircut") Run the equities up, run 'em down, re-arrange the stock certificates, or issue new ones.

Ma Bell's widows 'n' orphans? Who needs 'em! Time for a change!

Just as in the 80's, the sharks like KKR & others took companies private in LBOs, with lots of debt, betting that the trend toward an equity boom would multiply their small investments, so now the new owners will take over via private arrangements. And we will awake to new masters collecting our utility bills (well, really the same ol', but with new "XYZ Corp." names) after our brief "ownership" fantasy has crumbled into penurious old age.

(My guideline lately is turning into: "Whatever it takes to converge the U.S. into a Third World society/economy with the large 'slave' labor class most nations of the world already have.")

Oh yeah, same goes for the gold -- new institutions, new owners. Why, there's some offshore Bermuda shell at this very moment doing what Goldmem... - er, ah -- Goldfinger couldn't accomplish at Ft. Knox.

Thus "capitalism" ends -- Where the people are not vigilant, ANY system turns into ancient "grabbing and looting" -- piracy. The theoretical possibilities of capitalism will remain the "unknown ideal" until people are trusting only in the correct situations, and not merely of "experts" crowned so by the media.

The key resource of a nation -- ask the Pharaohs on their Pyramid Mall Grand Opening Day! -- is the labor of its people. It can be appropriated in many, many ways.

Oil comes in a close second, in recent decades at least. And gold -- well, that's an accounting device, which you always need -- but it will just sit there without the other two.

Getting the people to drive an hour to work every morning for that green stuff to fund those 401k'd "early retirements" -- now THAT'S resource extraction!
USAGOLD / Centennial Precious Metals, Inc.
(08/03/2002; 10:05:34 MDT - Msg ID: 82179)
The pride and security of ownership


"There is nothing on earth
that can be all things to all people.
Gold comes damned close."

-- R. Strauss

White Rose
(08/03/2002; 10:36:22 MDT - Msg ID: 82180)
In the event of a lock up of financial liquidity
OK, here is a scenerio that I find plausible, but hope does not come to pass. I hope someone will tell me why this will not happen.

---------------

One image I carry with me is of 100,000 laptop computers located around the world. Each one is pre-programmed to "rush to the exits" with a single keystroke. When it is clear that game is up, all the laptops will start their "doomsday" program. Of course, one mutual fund or one hedge fund can always cash out. But when they all try at once, the system will lock up.

At that point, it counts what you have on hand. Do you have documentation for that savings account. If you cashed your last paycheck, you are ahead of the guy that used direct deposit. All the credit card accounts are frozen.

The federal reserve will start at the top of the pyramid, and offer unlimited liquidity to its favorite players. These players, in turn, may choose to pay their favorite stocks. Certain issues (not just gold stocks) may soar. Many players who are not as well connected will go belly up fast for lack of liquidity. Their carcasses will be bought and sold by the inner circle.

I suspect that there will be some unusual games designed to hide how expensive physical gold is. I do not think that ownership of gold will be forbidden. But there will be complex regulations on the purchase and sale which will hide the true price from the public.

I suspect that a massive number of assets will transfer to a small number of players. Individual wealth will be wiped out (except for those who have taken Black Blade's advice).

What will gold be worth? The real question is what you plan to do now to avoid being without gold when the system locks up. The question of "worth" in dollars may not have much meaning.
USAGOLD
(08/03/2002; 10:40:30 MDT - Msg ID: 82181)
Belgian: Of Currency Rates, the Price of Gold and Japanese Housewives
Practicality and experience tells me that interest rates (the cost of money), currency depreciation (the cost of holding money), and gold prices (the cost of holding an alternative asset) are not correlated at all. Instead they are "independent variables" impacting the individual investment portfolio. As such, the investor must make choices, and that's precisely what anyone managing their portfolio must do -- make choices. And in this manner, money flowing in either direction can impact prices, cost of money, etc. But all of that is after the fact. Which fact? Investors' decisions as to how they are going to employ their capital.

Now. . . .I wouldn't emply capital based upon some unproven correlation like interest rates going down means gold is going to go up or vice versa, or that gold going down means interest rates are going down. I see this as incorrect thinking. Better to say to yourself: "Interest rates (an independent variable) are going down. The nations of the world are deeply immersed in competitive devaluation schemes (another independent variable). My savings now yield 3% (another independent variable.) I believe that gold has a better than 50-50 chance of going up at least $9 over the next year, and the possibility of doing even better under the circumstances. Therefore, I will convert some of my savings to gold." Simplistic, I know, but that's how I think and most investors think. And my apologies if I am stating the obvious. . . .

Now with respect to the economic question on gold and dollar/euro interest rates, we need a starting point and I think the starting point needs to be that economically we live under a fiat money regime (as opposed to a gold based economy). The Fed along with market demand for the dollar dictate interest rates with both playing primary roles. So the Fed can print money via the debt monetization tool, or a flood of dollars can repatriate from overseas, or any one of a number of additional variables -- and of course those dictate the price of money. Gold is a separate venue. It too succumbs -- as FOA pointed out copiously day after day, month after month, year after year -- to the supply of cheap paper that has nothing to do with currency rates. With respect to you question about the relationship between gold lease rates and currency yields, I reference what I wrote in 1997 in "The ABCs of Gold Investing":

"The central banks actually take gold out of their
holdings and loan it to the mines at interest rates that
ranged in 1995 from .5 percent to 6 percent. Private
gold bullion banks like Morgan Stanley (correction 2002: J.P. Morgan) and Republic
National in New York act as intermediaries, or brokers
to these transactions. The mines then sell the gold on
the open market through the bullion banks to raise
capital for their mining operations through the bullion
banks. This obviously has a depressing effect on the
price. As more and more pressure mounts on the existing
gold reserves at the central banks, the lease rate rises. Whenever it reaches the domestic currency lending
rate, the incentive is to curtail borrowing gold and
instead borrow the currency, or curtail borrowing entirely."

Note: If I were to rewrite that today, I would adds speculators like the hedge funds to the mix. They face the same analysis.

As you correctly point out, that is what is happening today. It is perfectly conceivable to see in the mind's eye a financial world where interest rates are dictated under one set of circumstances and rules, and gold paper under another. Is it necessary to put the two together separated by an "equal" sign? I could see that under a gold standard regime like the Bretton Woods arrangement where a currency gold price has to be defended, but I don't see it under a fiat regime.

As for how long can the bullion banks hold out?

As I see it, at some point, as dictated by the market, their internal management committees or (now) related law enforcement efforts (including elevated accounting standards), the bullion banks will be forced to reform internally. What we have had since the Washington Agreement is a systematic unwinding on gold derivative positions. This trend, as I mentioned, is reflected in the LBMA numbers, the closing of institutional gold trading departments, etc. The scandals have to be pushing this unwinding process forward on a faster timeline -- and we have had hints of that as reported by GATA and various press stories. Ultimately, physical demand will be the coup de grace, but no one cannot predict where that will come from. In the 1960s/early 1970s that came from DeGaulle, Adenauer and finally Great Britain ( oddly enough America's ally in the London Gold Pool.) Those in Europe who follow in the Gaullist tradition might lead Europe to force gold higher to make their own currency stronger. That is the significance of the resurgence of the right in both France and Germany (Florian, was correct, the conservative candidate in Germany is running well.) and the upcoming Trichet ECB chairmanship. It will be interesting to see how the central bank will operate under French leadership. (The Bank of France has been decidedly pro-gold even going so far as to say that they do not, have not and will not be a gold lender because of the deleterious effect to its own reserves.) But then again, official sector demand could come from across the Pacific where huge dollar reserves have been built up, and where the lessons of gold's value gained during the Asian contagion were not lost on the various societies or its politicians. The situation in Japan remains interesting. Koizumi recently stated that he will not deter the move away from insured savings. This has pushed Japanese investors into gold (under the same interest rate analysis you allude to). What better way to move gold from the West to the East without causing a stir? How can the United States government complain about the Japanese housewife's desire to protect her savings with universal money?

Now, I know your question was leading Belgian, and I thank you for the opportunity.

- - - - - - - - -
"Indeed there can no other criterion, no other standard than gold. Yes, gold which never changes, which can be shaped into ingots, bars, coins, which has no nationality and which is eternally and universally acccepted as the unalterable fiduciary value par excellence. " Charles de Gaulle

- - - - - -- - -

As nation states watch the developments within the United States -- the engine of the world economy -- does the thought framed so well by DeGaulle pass even fleetingly through their minds? My guess is that it does, and that ultimately, in the interest of self-preservation they will be forced to act upon it. In that respect, encouraging domestic demand among individual investors could turn out to be a model strategy -- an interesting and perhaps encouraging turn of events for physical holders the world over.
USAGOLD
(08/03/2002; 10:53:48 MDT - Msg ID: 82182)
Belgian. . .
I deleted this paragraph to put at the end of the post, but then forgot to do it:

Now, I know your question was leading, Belgian, and I thank you for the opportunity. You must be thinking about something along these lines and I think you might be looking for an opportunity to speak your mind. So, my friend. . . . .What's on your mind?
Old Yeller
(08/03/2002; 12:01:15 MDT - Msg ID: 82183)
Someone has a bridge to sell
http://www.upi.com/view.cfm?StoryID=20020802-100315-8253r
A S&L bubble fix redux,typical re-telling of the sorry old saga,the last paragraph really caught my eye,

"It(the S&L crisis)was managed by the autonomous,able, utterly professional,largely apolitical Federal Reserve.The political class provided the professionals with the tools they needed to do the job.This mode of collaboration may well be the most important lesson of the S&L crisis."

Maybe this author,after turning off the effusive,gushing praise valve,could inform us what the most important lesson of the imploding asset bubble created by said professionals of the Federal Reserve is?
PH in LA
(08/03/2002; 12:22:59 MDT - Msg ID: 82184)
Belgian & MK... Looking at the same scene, painting different pictures
"We saw what Japanese housewifes did to Gold, once they understood/percepted (fully or not) what is happening. They hoarded Physical by the kilograms, rather than holding yens/dollars at 0,zero IR. The Gold rush peithered out when the price trend discouraged them."

Belgian:
Your words above give the impression that you perhaps believe that it was somehow the Japanese housewives that caused the POG to rise to its present level over $300/ounce. In my view, this was merely the impression pitched by the media to explain the unthinkable in recognizeable, traditional supply/demand terms so that the broad concept of a "market" can be preserved, including the fiction that the paper markets and gold metal itself are one and the same thing. Admitting that the value of the dollar and and the POG were being "managed" to new levels is an idea that must never be hinted at by the talking media-heads or government officials. Yet, almost any thinking observer must be reaching that conclusion somewhere in his subconcious mind. I like your thoughts concerning the coming zero-percent interest rate climate coming soon. With such writing already on the wall, a new concept POG is also on the same wall. Of course, if the ECB caves in by lowering interest rates also, it will smear the writing on the wall a little bit, right?

Michael K's interpretation of how investors think is another facet of the same reality. It's all the same reality... just depends on how one tries to put that reality into words/thoughts. Either explanation works. Lots of others, too. "How about astrology?" you might ask? Maybe that's stretching the thought processes a bit too much, right? Ha, Ha!
Boilermaker
(08/03/2002; 15:55:56 MDT - Msg ID: 82185)
Yet another sign of impending inflation
http://biz.yahoo.com/rb/020803/wkndcolumn_assets_2.htmlReuters Business Report
Tiffany Glass Smashes Auction Records
By Richard Chang

NEW YORK (Reuters) - Tiffany stained and blown glass is in vogue again, a century after its creator illuminated homes with his trademark lamps, windows, bowls and vases during the Art Nouveau movement.
While Louis Comfort Tiffany's works were always pricey, many of them are now worth the price of a house, or at least the down payment.

"An 18-inch Peony lamp in 1980 would have cost $20,000 to $25,000. Today, it's $125,000 to $175,000," said Arlie Sulka, managing director of Lillian Nassau Ltd., a New York gallery that has specialized in Tiffany lamps and glass since the 1950s (http://www.lilliannassau.com).

"I don't like to tell people to buy for investment but clearly Tiffany has a following and prices have been secure," she noted.

comment;
My great grandfather was the head watch repairman at Tiffany's in Manhatten during the late 1800's and early 1900's. He recieved a signed cartoon by Thomas Nast, a drawing of Father Time that says "for keeping Nast on time".

Look for more evidence of "collectables" prices reflecting safe harbor inflation.
Rock
(08/03/2002; 16:27:14 MDT - Msg ID: 82186)
Larry Kudlow gives gold a plug!
Hi all, I couldn't believe my eyes and ears the other day when I heard Larry Kudlow of all people say that he thinks gold has to get up to at least $350.00. Well thats a beginning Larry! He was one of the worst bashers of gold for years so to hear him make those comments yesterday on his new program with James Kramer confirms to me that he's begining to see the bright glare light of gold shining through the cracks of all that confeti Even his side kick James Kramer promonted gold stocks as one of his picks, he admits taking a turn of opinion regardiing gold. At least Kramer humble enough to admit it he was wrong.

LOSER: I saw that commercial where the guy had LOSER stamped in large back letters across his head that pretty was funny.

Cherrs,

Brave Heart
Black Blade
(08/03/2002; 18:25:32 MDT - Msg ID: 82187)
South America's dominoes
http://www.economist.com/agenda/displayStory.cfm?story_id=1265006
Snippit:

America's treasury secretary, Paul O�Neill, is about to visit three Latin American countries which face economic disruption or meltdown. The problems of Brazil, Argentina and Uruguay may differ in many respects, but American and international help is crucial to resolving all of them.

Black Blade: This is just the beginning. The US will likely give US taxpayer cash to bail out these countries, however, they are not the only ones in trouble.

Cavan Man
(08/03/2002; 18:27:14 MDT - Msg ID: 82188)
Black Blade
That's a page from the "Creature From Jekyl Island".
Black Blade
(08/03/2002; 18:34:02 MDT - Msg ID: 82189)
Handwriting is on the Street's wall
http://www.msnbc.com/news/789126.asp
Snippit:

Aug. 2 � This week the stock market once again showed its true colors: grim shades of gray. Sure the Dow Jones industrial average rallied more than 1,000 points in the last days of July before tumbling 400 points Thursday and Friday. And to be sure, there will be many more rallies in the weeks and months ahead, as history teaches pretty clearly. But this week the handwriting was scrawled on the wall all over again: The stock market is headed lower.

Black Blade: Just like the last Great Depression, the market had suckers rallies, and this one will be no different.

Black Blade
(08/03/2002; 18:48:17 MDT - Msg ID: 82190)
Once-Shuttered Mutuals Seek New Investors
http://biz.yahoo.com/rb/020803/bizfunds_1.html
Snippit:

NEW YORK (Reuters) - Mutual funds that slammed their doors to new investors during flush times are laying out the welcome mat again. Beaten up by the depressed stock market and investor withdrawals, fund firms are rethinking moves to shutter fast-growing portfolios -- particularly once-hot small company funds -- to new shareholders. Funds are reopening at a time when mutual fund companies are trying to hang onto trampled investors, not turn them away.


Black Blade: A sign of sheer desperation. With fund investors running for the hills, previously closed funds are going begging and will likely continue to go begging for new sheep to shear. Investors are bailing out and taking their cash with them. This is not likely to change because some previously closed funds are falling on hard times. BTW, outflows from mutual funds last month exceeded $47 billion � a record.

Black Blade
(08/03/2002; 18:56:24 MDT - Msg ID: 82191)
Gore criticizes Bush, cites unrestrained greed
http://biz.yahoo.com/rf/020803/politics_gore_1.html

Snippit:

WASHINGTON, Aug 3 (Reuters) - Al Gore criticized President George W. Bush's policies and defended his populist positions in the 2000 campaign, saying power and greed have hurt millions of Americans with a string of recent corporate scandals.


Black Blade: Forrest Gump in a case of the pot calling the kettle black. Maybe he should look in the mirror if he wants to look for those to blame for the economic mess today. It was Clinton-Gore policies that were in play when the recession started. What a duffus.
Belgian
(08/03/2002; 18:59:37 MDT - Msg ID: 82192)
@ PH in LA and @ USAGOLD tomorrow morning.
About Japanese housewifes and Kilograms of Gold : Yes, I did then and still do "relativate" today, the event. These housewifes did not "MOVE" POG but were a nice example of what is most probably to come. I did exactly the same in the 1980 POG runup : Bought Physical Gold in Possession with my very humble savings. And it was not because of zero interest rates but exactly for the opposite reason > ATH IRs !!! Isn't that funny and confusing ? No it isn't. I sold that Physical when IRs started to decline together with POG. Never touched Physical again until I landed on this site and studied TG/A/FOA. More on this later as RE to USAGOLD's posting.

>>> Interpretations of how different investors think is another facet of the same reality ...>>> Either explanation works. I am not trying to find an explanation, per se, for what is happening with POG. I want to look into Gold's future. Trying to understand to what extend our economic/financial situation has detoriated and speculating (not gambling- !!!! ) on Gold's chances to play a very important role as a solution to the e/f deadlock. I'll remain a Gold student for ever.

The extreme situation, reflected in ATH interest rates in the eighties, is finding its *contrary* analog in the making today (ATL - IRs). Add the roller coaster US$ exchange rate within this period and we have enough stuff to strecth our thought processes, don't we ?

More tomorrow, because I went to another one of those heavenly barbeques with some nice people and its bedtime.
Sierra Madre
(08/03/2002; 19:17:15 MDT - Msg ID: 82193)
Will someone please help?

I see the news that "$47 billion was pulled out of Equity Mutual Funds in July...."

Just how is that done? If the Mutual Funds handed over $47 billion to one group of folks, they must have got the $47 bil from another group that put their money INTO equity mutual funds?

Just how does anyone know that money is "going out" of equity mutual funds? Of course, we can know that the price is going down, or going up. But about "puling out"...that's not clear at all.

Maybe the $47 bil refers to a fall in the value of the total assets of those equity mutual funds. But, a reduction in the value, due to fall in price, is not the same as "pulling $47 billion out".

Am I right or just very mixed up?

Sierra

cyberbat
(08/03/2002; 19:25:50 MDT - Msg ID: 82194)
Dark Vision
It is now the close of 2002. The stock market has been moving sideways between 6000-8000 with no relief in sight. Gold has broke thru the hedge boys schemes and is beginning to soar at 450.00 /oz. troy and Greenspan is on the ropes. The once flush fund headed by the PPT is low and Greenspan knows if he starts the presses, gold will go even higher. The Euro is at 1.2 $US and now the tidal wave of redemptions of U.S. Treasuries is draining the Washington D.C. trough dry. Strife and rebellion is running rampant in at least 9 countries and the Saudis are asking for payment of oil in physical gold.
Congress is fired up at the currency traders and like other 3rd world dictators, they are convened to study the idea of outlawing currency trading in the U.S. As this is taking place Bush ambushes gold horders at the proverbial pass and ask for emergency legislation to outlaw physical gold and all foreign currency inside U.S. borders. As tax rates begin to rise in an effort to sop up dollars and keep the government going, bartering and secret gold trading goes on a rampage.
People are taking to the streets now as their retirement dreams and daily subsistance is down to bare essentials.
Does anyone want to take it from here? I want a continuation--------
Cyberbat
Blackjack
(08/03/2002; 19:58:29 MDT - Msg ID: 82195)
Re : Mutual Fund redemptions
http://members.shaw.ca/valueinvestor/Weekly_Money_Flows.htmlSierra....It means investors called their brokers and sold
their holdings in stock mutual funds. When the mutual funds
sold and sent funds back to mutual fund investors...it was $47 Billion pulled out of stock mutual funds. That means investors
got money back....with losses. Say a person bought a mutual fund at 10 and sold at 6. They put in 100,000 and got back 60,000.What has me a bit puzzled is why more of that money does not go into PM funds. I have a feeling we will soon see a powerful run in PM.
Here is a site I came across that is updated weekly.
Has good charts and commentary. Click on link above.
TownCrier
(08/03/2002; 20:17:16 MDT - Msg ID: 82196)
Sierra Madre -- $47 billion pulled out of Equity Mutual Funds
You ask, "Just how is that done? If the Mutual Funds handed over $47 billion to one group of folks, they must have got the $47 bil from another group that put their money INTO equity mutual funds?"

No. You're (improperly) assuming that all equities are assets under mutual fund management, and you assume that the only avenue for these equites to be sold by MF Management is if they are bought via other MF Management.

I'm sure the source of your temporary confusion has now dawned crystal clear -- with the awareness that not all equities are bought and held under professional MF management.

$47 billion sold to Ma and Pa bottom fishers and free agents?

Hope this helps.

R.
Blackjack
(08/03/2002; 20:24:57 MDT - Msg ID: 82197)
More risk management problems?
BOSTON (AP) -- A high-level shake-up at FleetBoston Financial Corp. has cost some top executives in its risk-management division their jobs as the company tries to work through bad loans, many to the telecoms sector.

Among the departures are John Mastromarino, executive vice president for risk management and Ed Bayone, chief of global risk. Fleet spokeswoman Allison Gibbs confirmed Friday that those two and three unnamed executives had left the company, though she did not say how many were actually fired.

Gibbs said the departures were part of a company realignment.

"That division as well as the whole company is looking at reorganizing to better fit the risk management area with the wholesale banking division that it serves," she said.
Blackjack
(08/03/2002; 20:52:35 MDT - Msg ID: 82198)
War Clouds getting Darker
http://www.observer.co.uk/international/story/0,6903,769064,00.htmlPresident George W. Bush will announce within weeks that he intends to depose Iraq's ruler, Saddam Hussein, by force, setting the stage for a war in the Gulf this winter.

Amid signs of active preparations for a war within six months, senior officials on both sides of the Atlantic have said that war against Iraq is now inevitable.
----
Senior officials, however, anticipate that Bush will bring an end to the debate by ordering the Pentagon to prepare for war. Most in the administration expect a fairly swift victory.

'I'm absolutely convinced the President will settle on a war plan that brings about regime change,' a senior Republican foreign policy specialist told the Washington Post last week.
bob leppo
(08/03/2002; 21:28:30 MDT - Msg ID: 82199)
mutual fund redemptions
Sierra

every week the mutual funds report (Barron's reports the figures for the entrie mutual fund industry which is where I read it...) how much new money their shareholders invested in the fund and how much money investors took out (redeemed). In July there was redemptions (net) of $ billions . The reason that drives the stock market down is that fund managers have to provide the cash to pay off the redeeming investors. But most funds have almost all their cash invested in stocks with perhaps only 5-10% in cash. So when they see net redemption coming in for more than a few days (and it has been going on for several weeks now) they are forced to sell stock out of the fund portfolio to come up with the cash for the redeeming shareholders.

HTH
Nomad
(08/03/2002; 21:35:02 MDT - Msg ID: 82200)
@ Sierra

A mutual fund is nothing more than a small business which accepts money from investors, then turns around and invests that money in the stock (or bond) markets. Usually the fund has some vaguely defined investment plan and this is the way that you, as an investor choose between them. For example a lot of the funds are 'index' funds in that they track a particular basket of stocks found in an index, such as the S&P 500 or the NASDAQ.

The & $ 47 B figure is from a company called trimtabs ( http://www.trimtabs.com ) who track the flow of money into and out of the biggest mutual funds.

The way this money is returned to the investor is that when an individual calls the fund to request a redemption (or return of their money) the fund will either dip into their cash reserves (some funds are not 100 percent invested all the time) or more likely, the fund will SELL an equivalent amount of stocks in the particular sectors or indexes that they track. For example, if you requested a redemption of $ 100,000 and the fund tracked the DOW, then most likely SELL orders for $ 100,000 of DOW stocks would be placed and executed.

This of course, exacerbates the already precipitous decline in the market to date ... i.e. the market falls, people request redemptions from mutual funds, they execute sell orders for stocks causing the market to fall and the whole vicious cycle repeats. The reverse situation is responsible for the huge gains in the stock market over the last 10 years.


BTW On of the funniest and most interesting theories I have seen about the rise and subsequent lack of capitulation in the stock market begins with the fact that the use of prescription mood altering drugs, anti-depressants ,lithium, XANAX, etc are at an all-time high over the last decade. In other words people are half-stoned into a blissful state which allows them to pump up the stock market to dizzying heights in the 90's and at the same time, refuse to change their strategies when the market tanks. There are still so many sticking to the 'buy and hold' strategy.

Interesting concept (and in my opinion, definitely true to a certain extent) that the whole thing was and IS drug-induced :)
Siochaina
(08/03/2002; 22:08:01 MDT - Msg ID: 82201)
War Clouds
Wonder what would happen if Saudi Arabia falls first to an Al Qaeda or extremist faction ....certainly getting dicey there

Could it be possible that Bush wants Iraq as a counter to Saudi?

They are certainly beating those drums of war despite rest of world being against for most part and that even military supposedly has reservations ,,,,,US will bear tremendous cost burden as well as risk...but that lovely black gold is singing siren song to certain special interests

Us in Iraq oil fields ...and staying long term to establish new regime and support change....while rest of Middle East boils....and our ally Turkey has problems.



mikal
(08/03/2002; 22:47:16 MDT - Msg ID: 82202)
Re: Iraq attack
There are those who believe Bush's tenure in office will be short-lived due to scandal or worse. This would play into the hands of the top Pentagon brass, who are opposed to an invasion. Believing Saddam has been contained, a 9-11 repeat (on 9-11-02 or other dates) could be blamed on Al-Quada, the Palestinians, Moammar Khadhaffi, North Korea, or other convenient scapegoat. Irregardless of the evidence, in the manner of the Oklahoma City bombing, WTC bombing, and other cover-ups. Practically speaking, Iraq is a low probability for actual invasion, unless WWIII is someone's goal- an unintended outcome of WWIII has only miraculously been avoided so far, given the constant global conflict and bloodletting.
mikal
(08/03/2002; 23:05:55 MDT - Msg ID: 82203)
Re: US overseas troop presence
In well over 100 countries , US troops are deployed, in various roles such as in Japan, to protect multinational banana, drug, or coffee plantations, oil wells, refineries, and drilling rigs, as "peacekeepers", for "regional stability and democracy", etc. At what point are our foreign committments overextended? When our National Guard is no longer focused within the nation? When our "allies" are no longer wartime allies? When our leaders are no longer role models, but disgraced and scandalized? When our "Homeland Security" must be patched toether out of the FBI, CIA, and other alphabet soup travesties? When illegal immigration annually exceeds 5 million? We have been sold out too many times to let them pull a fast one AGAIN. Peace.
mikal
(08/04/2002; 00:03:02 MDT - Msg ID: 82204)
US alphabet soup primer
Just a brief addition on collaboration with Tom Ridge and other public servants in the new Homeland Security behemoth, besides the CIA (Central Intelligence Auction) and FBI (Federal Bureau of Incestuation)... INS (Immigration and Neutralization Service), BATF (Bureau of Addicts, Theives, and Frauds), NSA (National Security Attorneys), and NASA?, and...
Black Blade
(08/04/2002; 00:53:45 MDT - Msg ID: 82205)
Re: mikal - NASA

After the space shuttle Challenger exploded it was said that NASA stood for "Need Another Seven Astronauts". Hmmm...
Black Blade
(08/04/2002; 02:26:02 MDT - Msg ID: 82206)
Japan's gold rush may be on hold
http://money.cnn.com/2002/08/02/news/international/japan_gold.reut/index.htm

Expected gold purchases may be curtailed as government backs away from plan to end loan guarantees.

Snippit:

TOKYO (Reuters) - A week ago it seemed so simple: Japan scraps full state protection of bank deposits, investors panic, bullion houses sell a lot of gold. That formula sent gold prices soaring in February as the first stage of a plan to end deposit guarantees prompted investors to pile money into traditional safe-haven assets. It was supposed to happen again as the fiscal year-end approaches next March, when the government is due to finish the job. But signs this week that Tokyo could be backtracking on bank reforms have put Japan's expected gold rush in question -- and given bullion houses pause as they prepare sales campaigns reminiscent of last year's media blitz.

Lawmakers in Japan's ruling party this week called for an end to the plan to limit protection of all deposits to 10 million yen ($83,890) per customer per bank from April -- a move analysts call crucial to bringing the financial system up to scratch. Prime Minister Junichiro Koizumi has vowed to forge ahead with his reforms, but hinted that there was room for compromise. Analysts say that as long as the main plan to scrap protection on savings accounts remains in place, gold prices can expect to rally at the year's end. "Most important are private, normal accounts," said Yukuji Sonoda, precious metals analyst at Daiichi Commodities. "At the moment, Japan's basic policy is restricted only to companies' accounts. That won't have so big an effect on future demand for gold." Sonoda forecast investor gold demand reaching a hefty 30 tons between December and March, helping to push the price of bullion up to $350 an ounce on the spot market.


Black Blade: The rumor is that the plan is still slated to go forward. Regardless, the Japanese banking system is insolvent and bank deposit guarantees are uncertain even before the April Fools Day Surprise.

Black Blade
(08/04/2002; 04:08:38 MDT - Msg ID: 82207)
Another Bombing In Israel

This time a bomb exploded on an Israeli bus. There are 9 dead so far, and 49 injured. It appears that many are Israeli soldiers returning from weekend passes. Hamas claims revenge for the Israeli attack in Gaza. It appears that nothing has changed. There is also a shooting in east Jerusalem with 3 dead near Damacus Gate. Israel vows revenge. The Middle East is on edge once again. If these attacks occurred during market trading it is possible that the reaction would be apparent on the stock market indices. "Interesting Times"

- Black Blade
Belgian
(08/04/2002; 04:12:51 MDT - Msg ID: 82208)
USAGOLD's posting # 82181
Entire libraries could be written with serious analyses on the extra-ordinary fact of 22 years (twenty two) interest rates (IR) declines, from ATHs to almost zero % levels.
During this 22 yrs of almost linear decline, there were many different (changing) reasons (explanations) and effects for those IR to decline and decline further. I would like to come to final conclusions on this and make projections...NOT with discussions on statistical validy on correct correlations, but rather on the underlying fundamentals of these LT and very LT perpetual moves.

Enlarge the chart of IRs and go back to 1940 up to 1980.
The most beautifull picture of a rising parabola, broken in 1980 and steady decline with no floor (stop and reverse) in sight.

No consistant correlation possible between this IR perfect (smooth) pattern and POG ! No correlation with the 60 years of linear decline in purchasing power (depreciation) for the world's reserve currency US$.

But does this mean that IRs / US$ / POG are independant variables ? No Sir, they are NOT ! IRs/US$/POG are MANAGED with an unimaginable overwhelming Force. These variables are not "independant" on their own and not FREE to correlate or become inter-dependant. These variables are SQUEEZED into an outlined TREND, wich has to run its course up until the bitter end. The small, confusing, vibrations one sees within those LT established (managed) trends are futile efforts to correlate or become interdependant.

Main reason for all this, is the before's and after's of the fatidique 1971 date (your GOLD/DOLLAR standard regime). The Gold window pr� and post.
The zigzags within those giant trends of IRs/US$/POG are small abberations where some very minor capital flows, tried to protest. As some fish (Japanese housewifes) manage to swim for a given period against the mainstream.

We would be foolish (rebellion) to emply capital "AGAINST" unproven (unvisible) correlations or swim against the MAJOR TRENDS at our own peril. Long Term (LT-50/60 yrs) "trends" are there to be seen for each and everyone of us, having his screen on the net. The ensemble (whole) of those variables do feed our intuitions to correlate (interrelate) them with the sole purpose of projecting "new" trends, LT trends for the future. No big boring theories but simply taking an eagle's point of vieuw and painting the BIG picture.

Do the same for a 100 years of Dow Jones index (finance not economy) and see how this pattern is divided into 3 main parts :
1/ 1900 > 1930 : average return of 3,1% yearly.
2/ 1930 > 1980 : " " " 9,2% "
3/ 1930 > 2000 : " " " 13,6% "
Overwhelming, structured, systemic, managing forces !!!
Correct statistical correlation zero, but not possible without an ever depreciating fiat currency and/or very LT trends in IRs.

I'll try to be less boring, more practical, better readable in part II.
Topaz
(08/04/2002; 04:34:28 MDT - Msg ID: 82209)
Belgian
I've noticed over the last few Yr's that most drop-dead, logical trades fail in favor of the "House" - interest rates are a prime example, logic dictates when a currency's rate is lowered, an across the board devaluation would (should) be forthcoming...rarely if ever has this been the case (lately)...so a kind of warped logic, centred around "House interests" comes to the fore.
The Treasury Bond Market is another example...what's been going on there defies belief...and then there's Gold - if ever Gold was going to rocket, it should have during these last couple of Mth's ...it hasn't.
OK, where to from here (warped):-
Gold lower, IR's lower, Bonds flatline, DOW steady then UP!...(other indices follow in concert)
The dip in POG lately should have frightened the "longs" into submission and bought much needed Physical to Market...if it didn't....the next dip WILL! (off warped)

No Sir, I'm still 100% Physical (no intention of changing) and the conclusion of each trade is converted ASAP.

...and Yes, I am enjoying the W-end...Boatshow this am and Man of La-mancha in the A-noon....B-show indicates wealth effect alive and kicking here in OZ, and "The Man" is to be highly recommended.
We Goldbugs share an affinity with Don Quixote eh! (wink)
Topaz
(08/04/2002; 05:07:15 MDT - Msg ID: 82210)
Belgian
http://550.org.il/44/75.htmThis blokes theory may be of interest to you Belgian - keep up the effort, eagerly awaiting Part II.
Belgian
(08/04/2002; 05:25:47 MDT - Msg ID: 82211)
part II
It is easy to chart (picture) 100 years of history for DOW and IR or even the (different) purchasing power(s) of the US$. These pictures (facts) speak loudly and clearly and easely lead to commenly accepted conclusions.LT rising/flat/decline. Massive Confusion comes in when everybody starts trying to "explain" the WHY's/WHO's and WHATFOR's.

The 31 years POG chart is not only 3 times shorter than 100 yrs, but quite a different animal. An Hybride or idendity in the process of mutation. And therefore not possible to be correlated consistantly. Reason for this :

We, our globe in all its diversity, ARE STILL PONDERING ABOUT THE ****** IMPORTANCE ****** OF GOLD !!!!! Pauze...


I'm interested in finding a window, through wich, we can see how this pondering about Gold's importance is evolving.
I'll bet you do the same, daily, for more than 20 years now.
How important or un-important is GOLD today ? Same questions on IRs and currency detoriation.
And how do we (can we) quantify the processes ? My answer : *** charts >>> patterns >>>behavior *** !-?
De Gaulle or Japanese housewifes are post factum explanations. The picture of a chart, the factual results of decisions, and the the behavioral pattern(s) ...must be and are interpreted as nakedly as possible. Naked, without confusing explanations. But framed into an intuif evolving correlation with related (independant or not) variables (IRs and currency depreciation or even financial compensating overvaluation-say Dow hysterical canalization)

Regardless of any fundamental having a *temporary* impact on Gold...Gold will be sollicited for its importance by the widiest possible diversity on this globe all together.

Theoretically, the permanent detoriation of the US$-fiat-standard and the accompagning long trends in managed IRs, might bring all Gold sollicitors into a lockstep behavioral pattern. Housewifes, Belgians, Chineze and more Russians, might start acting on Gold as to invite more Americans and SA to join a disciplined Gold march. I commented on POG's 30 yrs chart (behavioral pattern) before. Impossible to visit each and every Gold participant and have a chat with them, informing about their thoughts about Gold's importance, ,now and into the future. The end result is reflected and to be interpreted from the not so old POG chart in mutation.

Gold's fundamentals will never change, as you stated without any hesitation, Sir. That's what I've learned here.
But Gold's *importance* does alter as does valuable water in different circumstances and environments.

Rockbottom IRs for the dollarblock plus further surrounding detoriation, will result in an inevitable "change", constant/prolonged change, for another trendy (managed) period. Gold's **behavior** during the past 30 yrs, still very strongly suggests to me that it "gradually" will take off in *importance* for revaluation on a very a high importance-level. Stop/reverse and rising IRs will trigger unforeseen measures other than the past
*package* devaluations of currencies.

Packaged offers will no longer be accepted. Packages are mixed bags with Trojan horses in it. We want the real stuff to be set FREE ! Thank you Sir Kosares and forumers, please forgive me my poor English resulting in confusing nuancing.
Belgian
(08/04/2002; 06:12:42 MDT - Msg ID: 82212)
@ Topaz : Thanks Aussi-Bro (I have a real bro in Perth)
You : ...logical trades fail in favor of the House !
You nailed it right between the eys. AMAZING it is and makes one speechless against this overwhelming forces, constantly falsifying our (Western) EXTENDED period of prosperity.

GOLD is still into its "accumulation" phase for the past 21 years ! Accumulation whilst pondering about its future "importance". But accumulating it is, with or without degrees of "doubt". Those ever declining IRs are the almost perfect cover for the un-imaginable currency depreciation, already installed under the skin but not yet outbursting ! Not an explanation for POG's behavior (performance) but the understanding of how "The Houses" operate. The "houses" being the assembly of colluding well-do-ers, false servants of the collectivty's temporary prosperity. Colluding politics and financial brotherhoods.
A gigantic web with a handfull of big spiders driven by a consensus.

Where to from here...

Continued hyper-focus on stockmarket valuations. Unwinding proces : denial > acceptance > capitulation and panic > Change ! As classic as can be.
Let a balanced mixture of 10 yrs plus charts of Stocks (and/or macro-econ. statistics/resources), parade on your screen and tell us what you are feeling ! Financial paradise lost ? Thanks confrator Don Quichote.
misetich
(08/04/2002; 06:16:55 MDT - Msg ID: 82213)
Defying China, Taiwan's Leader Backs a Vote on Sovereignty
http://www.nytimes.com/2002/08/04/international/asia/04TAIW.htmlSnip:

By KEITH BRADSHER


HONG KONG, Aug. 3 � President Chen Shui-bian of Taiwan said today that separate countries now exist on either side of the Taiwan Strait and voiced support for legislation authorizing a referendum to declare Taiwan independent of China, positions that are certain to anger Beijing.

****************

Misetich

Will US and China tension rise?

Got gold?

misetich
(08/04/2002; 06:35:52 MDT - Msg ID: 82214)
Brazil Teeters. Will It Be Contagious?
http://www.nytimes.com/2002/08/04/business/yourmoney/04BRAZ.htmlSnip:

By TONY SMITH

S�O PAULO, Brazil
WHEN a giant falls, the noise is loud and the collateral damage wide. Fear of such a prospect is gripping Latin America.
...............
"There is no doubt that a Brazilian collapse would contribute to the drag on the global economy," said Christian Stracke, head of emerging-markets debt strategy at CreditSights, a Wall Street firm that analyzes credit risk. "The question is whether a greater cascade effect would develop from losses at large companies and banks working their way through the larger economy."

................
BRAZIL'S Latin trading partners, as well as the multinational companies that have poured money into the country at a torrid pace in recent years, can only hope that he is right. The central bank estimates that American companies had about 170.5 billion reals in assets, or about $55.3 billion at current exchange rates, tied up in Brazil as of 2000, far more than any other country's corporate investors, with General Motors, the troubled telecommunications company WorldCom and the electric utility AES among the most heavily exposed.
.................
Some economists agree with Mr. Fraga that anxiety over a Brazilian default is misguided and overblown. But they are concerned that international banks and large multinational companies, many of them stung by losses in Argentina and the bankruptcies of companies like Enron and WorldCom, are limiting the availability of credit to Brazilian corporations.

................
Besides worsening the indebtedness of Brazilian companies with foreign loans, the real's decline has deeply hurt Brazilian companies that must import raw materials. Lawrence Pih, president of Moinho Pacifico, a large Brazilian flour mill, said the cost of producing flour has doubled for him because of higher prices for imported wheat. And if he needs to borrow money, domestic banks will lend at 42 percent interest.

..................
Misetich

Global defaults, market nervousness is not a plus for the Brazilian economy - The IMF has poured over $28 billion in the last couple of years and is set to add at least ANOTHER 20 billions in the next year or so

With the "world consuming engine" - US - showing anemic growth and world economic growth decelarating once again - Brazil might/will get caught in the squeeze.

Lets stay on this HOT TRAIL

Got gold?
misetich
(08/04/2002; 07:16:53 MDT - Msg ID: 82215)
I.P.O. Plums for Titans of Telecom
http://www.nytimes.com/2002/08/04/business/yourmoney/04WATC.htmlSnip:

By GRETCHEN MORGENSON


he regulators investigating Wall Street firms' allocation of hot initial public offerings are likely to discover some juicy material. As they examine the records, they will find that many top executives of telecommunications companies, including Bernard J. Ebbers, founder of WorldCom, and Joseph P. Nacchio, former chief executive of Qwest Communications, received I.P.O. shares of upstart companies � like Juniper Networks � that had won, or later would win, contracts to sell equipment or services to the big telecom concerns.

At Salomon Smith Barney, Jack B. Grubman, its embattled telecommunications analyst, decided which executives received the shares his firm was underwriting, according to David Chacon, a former broker in the firm's Los Angeles office, and another former Salomon employee with firsthand knowledge of the arrangements. Philip L. Spartis, a former broker who handled the WorldCom employees' stock option plan in Salomon's Atlanta office, also said Salomon had offered sweetheart allocations to several titans of telecom.

...............
But the former employee said the telecom executives had routinely been among the top recipients of the stock in each Salomon offering. They received shares that Salomon held back from other clients, this person said, adding that the allocations had been made to executives when Salomon wanted to build relationships with the executives' companies or keep existing relationships strong. These executives were, in effect, part of an exclusive, very prosperous club, and membership was controlled by Mr. Grubman.
.............
The former Salomon employee with knowledge of I.P.O. allocations said: "If you were an insider back then, you had a pretty good life. There was a lot of money made, and they shared it between themselves. What bothers me the most is that some people made out so well and so many other people lost everything."


****************

Wall Street "cozy" arrangements robbed US and foreign investors
It appears that the "bad apples" are not just a few- How many IPO's have been "tainted" with infectious greed?
How many transactions have been created by investment bankers to increase their fees, with the intend of assisting their clients, though being accomplices in perpetrated deception and fraud by their cients to investors?

How many stock analysts, researchers, talking heads trumpted values of stock - most of which they had a personal position in - at the expense of investors

How many government officials, SEC, CFTC etc KNEW of these scams - and did very little to STOP IT - Yes they're pretending to do it now - closing the barns gate after the chickens have flow the coupe-

There are more rotten apples than the "few" that the Bush Economic Administration and Wall Street wants us to believe

...and it is thanks to them that millions of investors have and will lose the majority of their hard earned savings -

Gold has been suppressed by a consurtium, to facilitate the scam on these unsuspectful investors

Gold shines in turbulent times, where the dark side of excesses and malinvestments - brought upon us by the above noted perpetrators - bring on the general public and astute investors in protecting their assets and adding PHYSICAL GOLD TO THEIR PORTFOLIOS

Looking ahead to the next 10 - 15 years horizon, with baby boomers reaching retirement age - the social security system worlwide will be severely tested, if not bankrupt - government debt will skyrocket in the tens of trillions- global population will increase as will consumption of gold, - gold production is diminishing due to the damage perpetrated to the mining industry in recent years- and Central Bankers will have disposed of most of their reserves by then-

Gold is money-always was- always will be

Got gold?




Belgian
(08/04/2002; 08:04:25 MDT - Msg ID: 82216)
Guy Quaden, Belgian Finance - CB banker.
Today : Euroland can live (feeling comfortable) with the ongoing/evolving, US$/� exchange rate ! Is Guy a Frenchy, following the Gaullist tradition ?
And is Euroland forcing Gold higher to make their own currency stronger ? Not visible with a frog perspective on POG chart but being concluded with a much higher eagle's vieuw. And is Guy another tiny step (evidence) in USAGOLD's conclusion that ultimately, physical demand will be THE COUP DE GRACE ?

Oh yeah...where will the Physical Demand come from (small detail) ? Answer : From those who hold piles of US$ and need time to discover that young fullblood euro, hiding to some extend (temporary) that it is Gold's best friend !!! The idendities of those dollar-holders ? Just about anyone or group thinkable. But first, the Houses want as much dollars as possible in the condemned debt-papers for having witching feasts and fires. Do they succeed in luring enough paper into bonds, rising in price with declining IRs ? You bet they do. Another 5 Trillion of confetti, retreating, out of the SMs into the sweet honey US$ DEBT PAPER BONDS. Hummm, jammy, jammy. Once this rich flows do stop...IRs, FLY HIGH, HIGHER, HIGHEST ! Paper burn, burn burn.

Many see it, feel it but are paralysed and shaved for the umptieth time, big and small alike. Because those houses (the hyperconcentrating colluders) have a very long tradition on managing those ventures. 40 years (1940 >1980) of rising IRs followed by already 22 years of declining IRs. The houses make the winds, tides and seasons, artificially, at their conveniece. Better NOT to fight the BIG trends and venture some trading-luck on the small ones.

Have a look at some Long Wave charts at Bronson Capital Markets Research. 70 years of declining stock market dividend yields quite close to exhaustive bottoming-zone. Note the long periodical correlation with IRs .

A "profitless" economy upon a "fabricated" financial bubble within a gigantic falsified frame...leads to FREE GOLD.
MO VER MEG
(08/04/2002; 08:42:46 MDT - Msg ID: 82217)
(No Subject)
How long will Israel put up with these attacks? I find their restraint surprising. It is like they are waiting for some event (planned or otherwise) to happen. If it is bad enough, sentiment will temporarily suppot Israel's actions.

Maybe the plan (Bush's plan) is for Israel to then launch an attack on Iraq. Then we can lend support. Same bombs, different return address. Allies not needed (as badly).

I think this is a real and imminent possibility. As a result, oil will go front and center, leading gold and silver through resistance levels.

USAGOLD
(08/04/2002; 10:13:49 MDT - Msg ID: 82218)
All. . .Belgian. . . .Currency Thoughts (Avoiding the Interest Rate Discussion for Now. . .Kevin Phillips on the Financialization of America; Attalithe Fall of the British Pound
The Belgian finance minister should be satisfied with the naturally evolving euro/dollar exchange rate, since the primary reason for euro introduction was to free itself from the economic policies of other nation states -- primarily the United States. If the wisdom of such a move becomes reflected in the euro/dollar exchange rate then that's direct validation of the euro's founding fathers.

Supply-demand imbalances -- our economics text tells us -- eventually find equilibrium in the price. But what happens when the price is controlled on the paper markets? Those interested in holding the price down must find willing sellers at the restrained levels -- a machination that stands apart from ordinary economic action and a free economy and asks the seller to take a bullet for for the cause. In the past finding that supply of gold has been accomplished through various quid pro quos -- those quid pro quos as I have pointed in other posts -- have now hit the wall via the Washington Agreement and a growing sense among gold depositors that their deposits could be in systemic jeopardy. Only an explosion in the price will settle the true supply/demand imbalances that exist NOW -- let alone those that will exist as the dollar tanks. And that spells hyper-danger for the bullion banks.

Free gold? Indeeed. . . .End what Kevin Phillips calls the "financialization" of the American (and world) economy. The tail (paper) has wagged the dog (real wealth) for too long. And I include not just gold here, but all commodities, and the corporations which produce our manufactured goods. We need to get back to meat and potatoes economics -- make a product or service and sell it to customers. When General Electric is found to have made a transgender change from manufacturer to paper manipulator/quasi-financial firm, I would say its board of directors has lost its sense of direction. Make a profit honestly and legitimately -- not through some slick trading operation. This nonsense of creating profits through every machination imaginable (mostly dreamed up by paper traders dealing in obscure financial arrangements) must come to an end. That's how we got to where we are, and that's what we have to scrap in order to make a new start. What's extraordinary about the American financial scandals is not that they occurred. We have always had individuals (usually small time operators) tyring to rape the public through one snake-oil scheme or another. What is extraordinary about the present situation is the enormity of the attack on some of America's largest corporations. Nachio, Ebbers, Lay - - Barabarians at the Gate? No more, but barbarians within the City (!!) -- looting, pillaging, burning as they move along. As Randy pointed out end of last week, this is not just an ordinary crisis. Instead it is perhaps the greatest crisis of most of our lifetimes. Whether or not the barabarian allusion can be carried to the Fall of the Empire (a la Rome) remains to be seen. I hope not, but things do not look all that hopeful. We cringe as one scandal after another surfaces and one business after another ends up in bankruptcy court. Confidence reaches to the depths no matter how many business executives are led off in handcufs. In the meantime, gold will play its time-tested role as arbitrageur of economic and financial problems that come at cycles' end -- whether that cycle be Magnitude One or some subcycle on the historical continuum.

Speaking of which. . .

I was reading Jacquest Attali's extraordinary book (A Man of Influence: The Extraordinary Career of S.G. Warburg, 1985) the other night, when I came across a reference to the fall of the British Pound which Attali puts at 1949-1950. The British were already reeling from the dollar making inroads into replacing the pound as the world's reserve currency post World War II. India (the Jewel of the Empire) and Pakistan declared independence in 1947 -- an event which many historians note as the final blow to the empire. A scheme to restore international confidence in the pound by making it convertible to gold introduced in 1947 collapsed in a one month period of time. Gold was leaving the British treasury at an unprecedented rate due to an intractable trade deficit despite the Commonwealth and Empire. Clement Attlee threw in the towell in September 1949 devaluing the pound from $4.03 to $2.85. Winston Churchill at 77 years old came back to power along with the Conservative Party. Attali -- who writes the book strictly from financial perspective -- attributes the fall of the pound to a relatively obscure event: the Cairo government's denunciation of the Ango-Egyptian canal treaty and the Sudanese condominium agreement which allowed for the stationing of British troops on Egyptian soil. "So began events, " says Attali, "that would end in the disappearance of the international role of the British pound." Britain, in a very short period of time, had gone from 475 million subjects to 75 million seemingly overnight. (An American fall will not be measured by the same standard, but probably more a loss of market for the dollar itself.)

Sometimes the events which define great historical changes are obscure to their contemporaries -- even those shaping or attempting to shape events. So it will happen with the euro. . .and the dollar. We won't know which even will be the culminating even in either the dollar or gold. . .We'll just see it happen, though I'm sure the events will be debated and discussed here and we'll have a better understanding than the public at large.

Time to play a little defense, my fellow Americans. . . . . .Though the culminating events for the pound could not have been defined as such by investors at the time, the trends were obvious, and they had to do primarily with Britain's eroding trade balance and debt problems.
USAGOLD / Centennial Precious Metals, Inc.
(08/04/2002; 10:31:35 MDT - Msg ID: 82219)
Common sense investing for common and uncommon times...
http://www.usagold.com/cpm/abcs.html

ABCs of Au by MK

The ABCs of Gold Investing

"Gold will play a critically important role in American investment portfolios in the years to come. This book provides investors a basic education on private gold ownership from one of the nation's top experts." --Rep. Ron Paul, Texas, U.S. House of Representatives

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

Belgian
(08/04/2002; 11:46:05 MDT - Msg ID: 82220)
LIQUIDITY TRAP (Topaz's link)
What is a liquidity trap (possibly in Gold): For the bullion banks, to be able, unwinding their Gold positions...there must be a big and liquid enough "market".
Are further declining (ST) IR and relative stable dollar exchange rates, favouring/providing enough liquidity for/into the Gold market ? A decline in paper-gold-trade (LBMA-Comex-Tocom) could set the market to dry for adequate price adjustment and impossibility (delays) for unwinding the gold derivatives. Nobody (outsiders) is ready to buy or sell. The product (paper gold contract) has no sufficient market anymore. Not finding sufficient counterparties, drives the premiums up, out of proportion. And Gold ready for an explosive break out ? Any more insights on this path ? TIA.

USAGOLD : If a similar Sterling Empire fall would happen to the dollar...it would probably come out of the Arabian oil corner. Saudi Arabia going solo ?

Rock
(08/04/2002; 11:51:08 MDT - Msg ID: 82221)
Sir Nomad & Cyberbat
Hi good Sir Nomad you noted in your post msg 82200 that prescriptions are at all time highs on XANEX and other anxiety drugs. Were you aware that the drug business is already built in the banking system, if you were to remove all the drug money in the global bank they would collapse.

Cyberbat I read your story "Dark Vision" I sure hope it doesn't turn out like that but I believe the way It does turn out will be in a way that no one expected or planned for.

Many times I have thought that the president with the stroke of his pen could re-enact the old FDR 1993 law. But there are limitations as to what they can do especially if you read that book Investing in Gold by the king of this castle. Its all about good "intell" and then acting on that intell.

There are two type of people, those who snorkle and those who scuba dive, I'm the ladder. Thanks again for all the inspiring words. A proven motivator will make it to the top faster than a proven genius, Never underestimate the power of inspiration!

Peace,

Brave Heart
cyberbat
(08/04/2002; 12:25:06 MDT - Msg ID: 82222)
Rumors of Rate cut
Well, they are at it again. The local newspaper says Greenspan is thinking about a 50-75 basis point rate cut. We all should have known at this forum that it was going to be the chinese water torture plan. Now watch for foreign paper repatriation by the zillions. But if one thinks about it, it had to be that way; why; because the government offered a ponzi scheme a while back called INFLATION PROOF BONDS. People actually thought that they would be rewarded a premium on those bonds when inflation rose. Only one small hitch---real inflation to you is not real inflation to the Fed. Therefore, anyone buying these bonds, bought in to a ponzi scheme. But hey, it's the new age of corruption by those in high places; only difference is if yo government boy, no prison time. If yo not government boy, maybe some prison time for the token public consumption.
Hang tough folks; when the corruption dams break, you will see a golden demon out of control. Remember "The best laid plans of mice and men often go awry."
It will be called "Revenge of the gold bugs"!!
American by birth; Southern by the grace of God!!
Cyberbat
Sierra Madre
(08/04/2002; 12:51:41 MDT - Msg ID: 82223)
Cyberbat...some Southern blues, up to date...

"Mah mama done tol' me
When ah was a knee-pants
A brokers a two-faced,
A trubblesome thing
Will leave ya ta sing
DA BLUES, IN DA NITE!"

Don't get the blues, get gold!

Sierra
slingshot
(08/04/2002; 13:36:44 MDT - Msg ID: 82224)
And the Band Played On.
*****************************Unemployment figures. No problem.
Credit Card Debt. No problem.
Real Estate Bubble. No Problem.
Bankruptcies. No problem.
National Debt. No Problem.
M3 money. No Problem.
Low Personal Savings. No Problem.
Stock Market. No Problem.

On And On It Goes!
What will it take for the public to wake up?
Plenty of sour notes is what I am hearing.
Slingshot----------------<>
cyberbat
(08/04/2002; 13:48:14 MDT - Msg ID: 82225)
Excuse me please.
Sir Slingshot,
Would you be kind enough to get someone to re-arrange my deck chair. I've got another boat to catch, so I'll be going off the side in to a golden sunrise!!
The good ship "Golden Warrior" beckons me now. Hope no one notices or everyone will eventually want to abandon the band and the ship.
Capt'n cyberbat
misetich
(08/04/2002; 16:11:51 MDT - Msg ID: 82228)
Bill Gross-Let's just hope the pinball analogy doesn't apply to the economy itself and that we soon aren't forced to declare "Game Over." Greenspan's almost out of quarters.
http://www.pimcofunds.com/PIMCO?op=www&mainsection=bond_center⊂section=commentary&request=investment_outlook&content_id=38434Snip:

Last week, the corporate bond market pond was nearly frozen solid. It has thawed somewhat in recent days, but there's still ice visible on the surface. Take a look at the charts below as an indication of the lockup and lockout of risk capital in recent months.
..............
Still, while many of our corporate bond holdings (and those of other Big Seven managers) will undoubtedly do well in future weeks and months, the dominant determinants of corporate bond underperfomance will be with us for the next few years at a minimum.
............
If PIMCO's belief that (1) technological change and (2) the reversal in bank lending attitudes are key to the pricing of the corporate debt market over the next several years, it remains unclear where appropriate spreads to Treasuries should eventually rest. While many corporate bonds are trading (if at all) by dollar sign as opposed to yield, suggesting the potential for huge gains or huge losses, there is no J.P. Morgan of the 21st century willing to step up to the plate and "save" the market. Some would suggest Greenspan is that man. The Fed's staff has for instance in the past year or so done academic studies on the potential for the Fed to buy either corporate bonds or stocks in an emergency situation. Preliminary indications seem to indicate that they believe the Fed can do anything it is not specifically prohibited to do, and therefore the support of corporate bonds would be fair game. Our "close to the Fed" sources, however, suggest that while Greenspan might have the authority to act, he is in no way disposed to. We understand that he is well pleased with the off-loading of credit risk from the banks to the Big Seven and insurance companies alike. To his mind, the moving of risk from a levered sector (the banks) to an unlevered sector (investment managers and insurance companies) is just what the doctor ordered to stabilize the economy in an emergency environment. Perhaps. But let me alert you, Mr. Greenspan. The corporate market at the moment is close to full tilt, half frozen, trading on price�not yield. While you perhaps contently rest on the historical laurels of near zero percent real Fed funds, its stimulation to the housing market, and your hopes for an eventual robust recovery, the cost of capital for corporations is nowhere near 13/4% or even that 6% level available to first time borrowers in the mortgage market. The cost of capital for Baa and lower corporations is in double digits. Aa and A companies can barely come to market. You sir, have a problem. If the cost of corporate capital skyrockets, the markets move the other way, and then of course, the economy follows.
And oh, for skeptics who will claim that this is an attempt to get the Fed to bail PIMCO out of its lousy corporate positions�forget it. I like my Sprint bonds even though I bought them at 95 cents on the dollar instead of the current level of 60. Anyway, despite my assertions that Fed staff have researched the possibility, I do not believe they will or even should do so. We're corporate light, even though in this case one Lite beer is one too many. We have only benefited from the naivet� of the "corporate tilters" that went too far. We're in the catbird seat, such as it is, or better yet the Captain's chair on that tuna boat sailing on the high seas. It's just fair warning that with a tilting corporate bond market, the economy itself may not be far behind. Let's just hope the pinball analogy doesn't apply to the economy itself and that we soon aren't forced to declare "Game Over." Greenspan's almost out of quarters.

***************

Misetich
Here's ANOTHER interesting passage from the article
Quote
Warren Buffett, or perhaps his sidekick Charlie Munger, is fond of saying that if you look around the poker table and you can't identify the fish, then you be the fish. Managers using corporate tilts may have thought they were the skippers of their own ocean-faring tuna boats, but as it turns out, they had gills and are now sucking for oxygen in a local trout farm located in a city near you. They be the fish.

End of quote

Got gold?
misetich
(08/04/2002; 16:19:29 MDT - Msg ID: 82230)
Market stress pressures U.S. economy and Fed
http://www.forbes.com/newswire/2002/08/04/rtr685657.htmlSnip:

By Eric Burroughs

NEW YORK, Aug 4 (Reuters) - Severe stress in global markets has nerve-wracked investors fearful that one big shock could jam the gears of the financial system -- much like the crisis days of 1998.

"People feel like gasoline has been dumped on the floor and it wouldn't take much to ignite it," said James Glassman, senior U.S. economist at J.P. Morgan Chase.
..........
MONEY HARD TO GET

Interest rates charged on high-quality corporate debt right now stand at near-record levels -- 2.2 percentage points above risk-free Treasuries, up more than half a percentage point since early June.

Investors, scared they cannot trust corporate balance sheets, have proven reluctant to lend money. Corporate bond issuance by investment grade companies sank in July to $22 billion, down 63 percent from its January to June average. Last week investment grade debt suffered its worst week since at least 1997, and junk bonds are set for their worst year ever.

Funding through the short-term commercial paper market also has become very difficult, with total outstanding issuance for nonfinancial and financial firms falling a hefty $93 billion this year. Banks have turned skittish about lending. Initial public offerings have dried up.

"The way the events are unfolding right now for the near term, dealing with these many financial constraints is going to impinge and impinge and impinge on economic activity," said prominent Wall Street economist Henry Kauffman, who has argued the Fed should cut interest rates.
............

The current pain in capital markets has yet to reach those extreme levels of distress, said J.P. Morgan's Glassman. But he said the market sees conditions as deteriorating to the point where a crisis could happen "at any moment."

************
Misetich

Greenspan is hoping to get help from the "growing economy" -aiding ANOTHER bubble (housing) and spreading the risk around - from banks to insurance corporations etc -

Lobby groups want to be "rescued" - suggesting Fed should buy stock and bonds and lower interest rates

On the other hand Captain Greenspan has been alerted of an incoming GOLDBERG ahead - too late for him to steer away from -

Got gold?
TownCrier
(08/04/2002; 16:50:06 MDT - Msg ID: 82233)
Don't mind me...
Just strolling through a near-perfect golden garden, nipping the viney thorny things in the bud.

You can thank me now, or thank me later, or just ignore that I was ever here bustin' my hump to keep this a "clean, well-lit place" for sharing the latest thoughts and news on gold.

R.
goldquest
(08/04/2002; 16:54:58 MDT - Msg ID: 82234)
@TownCrier
Thanks!
Mr Gresham
(08/04/2002; 16:55:46 MDT - Msg ID: 82235)
Big Ooops! JPM forgets to report gold derivs to SEC?
http://www.lemetropolecafe.com/pfv.cfm?PfvID=2405GATA reports letter from Mike Bolser to JPM Chairman:

"The following three current documents indicate that JP Morgan Chase has reported to the Office of the Comptroller of the Currency $45,234 Billion in total gold derivatives as assets under the control and use of JP Morgan Chase however they have not accounted for these gold derivative assets in either their SEC form 10Q March, 31, 2002 or their 2001 Annual Report. This finding implies that JPM shareholders have far greater risk than previously disclosed by the company. "

Way to go, Randy -- your housecleaning techniques DO inspire confidence...
misetich
(08/04/2002; 16:56:16 MDT - Msg ID: 82236)
Brazil presidential candidates pass the IMF buck
http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n01135375&feed=reu&date=20020802&cat=USMARKETSnip:


By Katherine Baldwin

BRASILIA, Brazil, Aug 2 (Reuters) - With a preelection bailout for Brazil's sinking economy all but inevitable, presidential candidates face the challenge of helping secure international aid without appearing to sleep with the enemy.

The International Monetary Fund wants an "understanding" from leading candidates in the October race on basic economic policies before extending Brazil's current loan deal through 2003. For the candidates, it is all about passing the IMF buck, analysts say.

Acquiescing to IMF-penned policies does not mesh well with opposition candidates' offer of change after eight years under President Fernando Henrique Cardoso, who brought macroeconomic stability but failed to combat poverty and unemployment.



But refusing to collaborate with an "understanding" on policy may hamper Cardoso's ability to secure funds. That could exacerbate the economic chaos eroding salaries and increase the chances of the victorious candidate having to run to the IMF on his first day at work.

"The opposition has an interest in putting all the onus of an IMF accord on the government," said Ricardo Caldas, an analyst at the University of Brasilia. "The opposition will carry the burden of having to agree to something, but the onus is less than signing an accord in their own government."

............
While it is improbable the fund will demand anything in writing from the candidates -- nor would they be likely to sign -- the opposition may have to formalize pledges of low inflation, fiscal austerity and respect for contracts in an accord with Cardoso's government, analysts say.

In terms of their proposed policies, little changes. But candidates will be walking a tightrope between appearing to help stem the crisis and endorsing policies that many of the 40 million Brazilians who live in poverty dislike.

"They (opposition candidates) will try to remain ambiguous, saying they favor the IMF as long as there is no sacrifice for the country, that this is absurd but it's a last resort," said political analyst Luciano Dias at Goes consultancy.

............
Eventually, though, the burden of an agreement with the IMF for those voters who oppose it could be shared. Brazilian officials and economists have suggested the IMF could draft a two-part deal, giving some funds to Cardoso but conditioning a second round of cash to the president-elect subscribing to a deal.

In the meantime, candidates must juggle pledges of jobs and better wages with the reality of an economy in crisis and under the reins of the IMF.

"This is a dangerous political game for all of them," said Dias.

********************

Misetich

Lets stay tuned to this HOT TRAIL - JP Morgan and Citi have huge exposure

It appears that "they" haven't sounded the panic button yet - underestimating the deceleration of global economic growth just ahead -

Got gold?




Got gold?
USAGOLD / Centennial Precious Metals, Inc.
(08/04/2002; 17:06:27 MDT - Msg ID: 82237)
Random coincidence? Collective idle fancy? Hardly.

Golden Goal




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

-- R. Strauss

misetich
(08/04/2002; 17:08:42 MDT - Msg ID: 82238)
Double-Dip Recession Unlikely-Fed's Poole -But he warned of some potential clouds on the horizon that could lead to instability in financial markets, zeroing in on the heavy debt load of mortgage market giants Fannie Mae (FNM) and Freddie Mac (FRE).
http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=202&feed=bus§ion=news≠ws_id=bus-n04347060&date=20020804&alias=/alias/money/cm/nwSnip:

"My own view is that the odds of a double dip recession are very, very small," Poole said in answer to a question after addressing a group of Southern state legislators.

"The overall national picture is that the national economy is going to be recovering," he said, pointing to strength in home and auto sales, and the resilience of household spending.

............
STOCK MARKET BLUES

In his speech, Poole noted that stock prices impact both business and consumer spending.

However, he cautioned that it is the level of total household wealth, including the value of bonds and real estate, that is important when evaluating the so-called wealth effect -- that is, the degree to which asset prices might impact consumer spending.

Federal Reserve Chairman Alan Greenspan has said rising home values had to a good degree offset the dampening impact of falling stocks.

Poole also said the wealth effect appears to be spread out over time and is small relative to the effect of household income, which has been rising.

............
CAUSES FOR CONCERN

But he warned of some potential clouds on the horizon that could lead to instability in financial markets, zeroing in on the heavy debt load of mortgage market giants Fannie Mae (FNM) and Freddie Mac (FRE).

The two so-called government-sponsored enterprises, or GSEs, had $1.3 trillion in debt outstanding at the end of last year and, according to Poole, had guaranteed another $1.8 trillion of mortgage-backed securities.

"In the case of the GSEs, the massive scale of their liabilities could create a massive problem in the credit markets," Poole said. "If the market value of GSE debt were to fall sharply ... what would happen? I do not know, and neither does anyone else," he said.

Fannie Mae and Freddie Mac, while shareholder-owned companies, were chartered by Congress to provide a deep and even flow of funds to mortgage markets, which they do by buying mortgages and repackaging them as securities for investors.

Under their charters, the firms have credit lines with the U.S. Treasury, which -- although never tapped -- many think have contributed to a view in the market that the government would stand behind their massive debts.

"I do not see any immediate risk of a GSE debt problem, but am not willing to assume that in different conditions in the future one could not occur," the St. Louis Fed chief said.

Poole said the credit lines the GSEs have with the Treasury Department should be withdrawn, adding that they could be replaced by credit lines at commercial banks.

In addition, he said the companies over a period of years should add to the amount of capital they hold. He said both Fannie Mae and Freddie Mac hold a level of capital "well below" what is required of banks.


�2002 Reuters Limited.

***********
Misetich

Poole "own opinion" grasping at straws - red hot housing and auto have thus far contributed to little over 1% GDP growth in Q2-

Oh the GSE's he must have finally got Doug Noland's alerts- He knows that unsustainability - will sooner later - be reckoned with

Got gold?
Cavan Man
(08/04/2002; 17:51:42 MDT - Msg ID: 82239)
@misetich
OK Lads, let's fire it up!...........Mr. Poole has made comments unbecoming a clear thinker before.
Black Blade
(08/04/2002; 18:37:30 MDT - Msg ID: 82240)
Share investors brace for rocky ride
http://news.bbc.co.uk/1/hi/business/2167553.stm

Snippit:

Investors will be bracing themselves on Monday for another rough ride on the world's stock markets. Last week was marked by turbulent trading as renewed fears over the health of US economy sent stocks plunging. The downwards trajectory also dashed hopes early last week that the stock markets were attempting a recovery. "I can't see the market staging a huge recovery next week," said Jeremy Batstone, head of research at NatWest Stockbrokers. Meanwhile, stocks in Tokyo are expected to approach 18-year lows again this week, as volatility on Wall Street shakes investor confidence.

Fears are rising about the state of the US economy after disappointing growth figures were released on Wednesday, increasing the threat of a double-dip recession. It's a potential landmine and there is nothing to do but wait and see whether it blows up. The bad news continued with some poor corporate results and weak unemployment figures. On Friday, Goldman Sachs investment bank predicted the US Central Bank would cut interest rates to 1% before the end of the year, increasing the feeling that the US economy recovery would be fragile.


Black Blade: In short, prepare for another Great depression. Earnings are falling faster than share prices leading to grossly overvalued stock prices. A rate cut now would be an admission that Greenspan and the Fed are absolute failures and it would be another big sell signal. The same thing happened in Japan and it will happen here also. The looming August 14th deadline will expose many more companies as having lied about their financial health. As more companies expense options, earnings will fall. The new S&P accounting standards that eliminate bogus "operating earnings" will lower earnings as well. The light is about to be focused on Wall Street's cockroaches.

Black Blade
(08/04/2002; 18:48:29 MDT - Msg ID: 82241)
Slumping Economy May Prompt Investor Exit: U.S. Stocks Outlook
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APUvy_BZoU2x1bXBp
Snippit:

New York, Aug. 3 (Bloomberg) -- The U.S. stock rally that fizzled this week may set a pattern for coming months, as some investors take advantage of any surge to sell shares amid concern the economy is slipping back into recession. ``You are probably going to have a lot of selling as the market tries to go up,'' said Jim Luke, who helps oversee about $10 billion at BB&T Asset Management in Raleigh, North Carolina. ``The guy who bought Cisco at $20 says, `If that stock gets back to $16, I am going to sell.''' Cisco Systems Inc. shares closed at $11.89 Friday.


Black Blade: Individual investors have been bailing out. Of course investors will sell into the rallies because there is no choice. The only ones left are the institutional investors who continue to tout the "recovery" story with complicity of the financial media. The jig is up and there are fewer sheep left for shearing. The people are wising up while the Wall Street Pied Pipers continue to desperately scream "all is well" against a background to economic collapse. It just doesn't sell anymore. The global economy is toast. In a word � "Grim".

Chris Powell
(08/04/2002; 18:48:34 MDT - Msg ID: 82242)
Fed, Treasury statements only evade questions about gold policy
http://groups.yahoo.com/group/gata/message/1200James Turk, editor of the Freemarket Gold and Money
Report, examines statements issued by the Federal
Reserve and Treasury Department and finds that they
only evade the pointed questions posed about U.S.
policy toward gold:

http://groups.yahoo.com/group/gata/message/1200

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Black Blade
(08/04/2002; 19:01:32 MDT - Msg ID: 82243)
U.S. gives $1.5 bln loan to Uruguay
http://cbs.marketwatch.com/news/story.asp?guid=%7BB99198D3%2D4E97%2D4185%2DB693%2D9156F7E48EAF%7D&siteid=mktw

Snippit:

WASHINGTON (AP) -- The Bush administration will provide an emergency $1.5 billion loan to Uruguay to help the country deal with an economic crisis that forced its banks to close last week, officials said Sunday. The U.S. assistance will come in the form of a loan to be repaid in a matter of days once the South American nation receives a new loan package from the International Monetary Fund, said the officials, speaking on condition of anonymity.

Treasury Secretary Paul O'Neill left Sunday for Brazil, and later will visit Uruguay and Argentina. The administration took office pledging to oppose the type of direct financial assistance and big bailouts the Clinton administration used during the 1997-98 Asian currency crisis. But the deepening economic woes in Latin America have forced the Bush administration to reconsider that stance.


Black Blade: In other words, US taxpayers are footing the bill for Uruguayan mismanagement. Even the lion's share of the IMF funding is US taxpayer cash. The taxpayer will soon be bailing out Brazil, Venezuela, and Colombia as well. This disaster will not show up in the growing US deficit as it is "off the books" so to speak. Meanwhile the "official" US government debt grows daily.

Speedy
(08/04/2002; 19:06:53 MDT - Msg ID: 82244)
economy
I'm just curious,how many people have read Darrin Perkins analist reports in the last 28 months? I have off and on and I am amazed how one voice has so much compasion and concern for what is taking place now and the months ahead!I've been saying prepare for this crisis for 6 years now,and at one time my wife wanted to strangle me something fearce! GOT GOLD......
mikal
(08/04/2002; 19:09:15 MDT - Msg ID: 82245)
@Town Crier
Thanks. It's an honor to see the continuous results of your efforts and postings. Looking forward to the years ahead, Michael B. (mikal)
Cavan Man
(08/04/2002; 19:11:43 MDT - Msg ID: 82246)
Black Blade
RE: Uruguay LoanDoes this require Congressional oversight? What was the scale of the package offered to Mexico? TIA...CM
sector
(08/04/2002; 20:19:45 MDT - Msg ID: 82247)
CavenMan The Mex "Loan" was $40 Billion
It used the IMF's gold which was "Loaned" then sold with the ...proceeds going to Mexico to reliquify their banks.
Black Blade
(08/04/2002; 20:35:41 MDT - Msg ID: 82248)
Re: Cavan Man

I am not sure what say Congress has over such loans, owever, considering that the Congress is on vacation and the Uruguay events came to a head rather quickly, I would be inclined that this was done without Congressional approval.

- Black Blade
Blackjack
(08/04/2002; 20:56:26 MDT - Msg ID: 82249)
JPM has a really big decision to make by Aug 14
http://www.gold-eagle.com/gold_digest_02/chapman080502.htmlJP Morgan Chase on August 14 has to make a choice. They either certify that their gold derivatives are assets or liabilities. It will be interesting to see what choice they make. We are watching and if they play Mickey Mouse they' ll end up in jail.
_____
Gold Digest Report
goldquest
(08/04/2002; 21:23:10 MDT - Msg ID: 82250)
Uruguay Loan
http://www.imf.org/external/np/sec/nb/2002/nb0283.htmLet me see. The U S is going to loan Uruguay $1.5 billion, to be paid back in just a few days, with $800 million loaned to Uruguay by the IMF! I never was real good at math, but it appears that Uruguay could be a mite short on the payback. May be that O'Neill is going to make up the difference out of his own pocket!
Black Blade
(08/04/2002; 21:58:05 MDT - Msg ID: 82251)
Saudi Arabia: A Time Bomb Poised to Detonate
http://news.ncmonline.com/news/view_article.html?article_id=831

Snippit:

According to European political observers and Middle Eastern analysts, Saudi Arabia may be on the verge of collapse, which could place it at risk of falling into the hands of al-Qaeda. According to reports published in the British newspaper The Observer, al-Qaeda counts sympathizers not only among the general Saudi population but also within the House of Saud, the royal family itself. Here Prince Abdullah, the current regent and designer of the recently failed Saudi peace plan for Palestine, has locked horns with Defense Minister Prince Sultan, whose views for Saudi Arabia's future are markedly pro-Islam and very close to those of the radical Sunni Salafia movement.

As recently as last March, unrest in the Saudi kingdom was expressed in a series of street protests that started in the eastern part of the country and rapidly spread throughout the nation. Thousands of pro-Palestinian, anti-American protesters were brutally repressed by Saudi security forces.

Saudi Arabia is not only home to a fourth of the world's oil reserves, but is also the location of the sacred Islamic cities of Mecca and Medina. The country is no newcomer to religiously inspired popular uprisings. In 1979 a group of rebels, mostly Sunni but representing a wide spectrum of the Saudi population, seized the Grand Mosque in Mecca. The resulting stand-off between Saudi security forces and the rebels lasted three weeks and ended in a blood bath when the rebels were forced out of the mosque by a task force of Saudi troops, Jordanian militia, and French counter terrorism operatives. Sixty-three rebels survived the assault and were later publicly executed.


Black Blade: Quite an interesting article. If the Saudi oil is kept from the west, the whole global economy is dead. Oil is the life blood of the economy and Saudi controls the bulk of ME oil.

Gandalf the White
(08/04/2002; 22:50:44 MDT - Msg ID: 82252)
Looking for an UPDATE from Miss "Sweet 16".
SWEET 16 (07/30/02; 10:15:50MT - usagold.com msg#: 81855)
Goldentrill & Gandalf
Hi Guys,
Sure is hot and dry in South Dakota. How are you doing? My car is being painted pink this week, I am so excited!
===
How does the PINK Car pink look ?
Perhaps you can have the next one painted GOLDEN !
<;-)
Waverider
(08/04/2002; 22:52:33 MDT - Msg ID: 82253)
Asian Stocks: Taiwan Slides as Hon Hai Plunges
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU3xpBXCQXNpYW4gSnippit:
"Taiwan stocks tumbled after President Chen Shui-bian described the island as a separate nation from mainland China, prompting a rebuke from Beijing. The TWSE Index plunged 5.2 percent to 4666.04 as of 11:29 a.m. in Taipei. That's the biggest drop since Sept. 13, Taiwan's first trading day after the terrorist attacks in the U.S. All but 13 of the 564 shares in the index declined.

``I'm not expecting a war, but the market fall is going to reflect the increased anxiety of the mood of the people,'' said James Chen, who helps manage more than $2.9 billion in stocks at Fu Hwa Investment Trust Co."

Waverider: Actually Taiwan is down about 6% at the moment.
Black Blade
(08/04/2002; 23:05:44 MDT - Msg ID: 82254)
Re: Gandy - Gold Car?
http://bigtexas.com/dmc/gold/
Will this one do? (see link)

- Black Blade
Black Blade
(08/04/2002; 23:07:49 MDT - Msg ID: 82255)
Re: Gandy - Gold Car? or How About This One?
http://bigtexas.com/dmc/
Leave it to a Texan to have a car plated in 24K gold.

- Black Blade
Sierra Madre
(08/04/2002; 23:24:57 MDT - Msg ID: 82256)
More about "money flows"...

Yesterday I posted a query about "money flows" out of Equity Mutual Funds, which were reported to be $47 billion in July, a record.

The answers I got did not satisfy me entirely.

Let's see, the Mutual Funds have some cash, I hear some of them have less than 5% of assets in cash.

Now, if $47 bil of holdings in the Mutual Funds are redeemed by the owners, some of the $47 might come from the Mutual Funds own cash. However, that is not likely; at most, the outflow from the Mutual Funds would be only temporary, for these Funds would have to replenish their cash holdings.

How would they replenish their cash? By selling stock to new Mutual Fund investors, at lower prices, of course. So, the $47 bil really comes from OTHER INVESTORS coming in with $47 bil of Equity Mutual Fund holdings, at lower prices.

The flow OUT is compensated by the flow IN.

If there are no NEW BUYERS, then, the only recourse is to SELL TO THE FED, in exchange for cash. The FED becomes the new owner of stock in the Equity Mutual Funds, to the extent that it comes in to provide cash for redemptions.

If the FED adopts of policy of supporting the Equity Mutual Funds, to avoid a complete meltdown of prices, then it will be MONETIZING stocks - turning stocks into MONEY. Enough of that, and there will be enormous amounts of money sloshing around. That's called "inflation"; eventually it will show up in prices as the holders of the money use it.

For the time being, it seems that those large amounts presently being redeemed out of the Equity Mutual Funds, are being re-invested in Bonds and short-terms Gov't Securities. Prices of these go up (and the related interest rates go down).

This is Japan all over again.

As prices of stocks decline, which it appears will be happening, then it will take larger and larger quantities of blocks of stock liquidation, to make similar dollar quantities. In other words, if prices decline by 1/3, it will take 50% more units of stocks sold, to obtain the same dollars.

....

Are any posters at this Forum, getting more respect from their families these days, for holding outlandish ideas about gold? I know I have one stock-bull friend, who is VERY quiet these days! Out of mercy, as a gold-bug I don't jeer at my stock-cockroach friends. "Go, and sin no more!"

Sierra
Gandalf the White
(08/04/2002; 23:28:37 MDT - Msg ID: 82257)
Thanks Black Blade -- BUT
I purchased the one from "Back to the FUTURE" and had it gold plated !
<;-)
Chris Powell
(08/04/2002; 23:33:24 MDT - Msg ID: 82258)
Morgan fails to report gold derivatives to SEC, shareholders
http://groups.yahoo.com/group/gata/message/1201J.P. Morgan Chase has failed to report to the
Securities and Exchange Commission and to
its own shareholders the firm's $42 billion
in gold-related derivatives:

http://groups.yahoo.com/group/gata/message/1201

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

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Yellow Metal
(08/04/2002; 23:51:52 MDT - Msg ID: 82259)
Hard to be a contrarian now.
http://www.forbes.com/2002/08/02/0802adviser.html?partner=yahoo&referrer=now on Forbes they're talking it up.

snip:

Talk about a crash course in crashing markets. Curtis Hesler earned his broker's license in 1973, the very day the stock market peaked before an ugly two-year slide. Now editor of Professional Timing Service, the Missoula, Mont., native said he appreciates the lessons of that bearish period--specifically, how to navigate the commodities markets when stocks go south. . . .
Forbes: This has been a horrible year for timers. The stock market has been oscillating so unpredictably. Have you been able to benefit from the rise and falls?

Hesler: The only significant signals have been on the short side. The only real buy-side action we've had has been in the metals.
. . . . .
You're predicting in your recent letter that the dollar will get bailed out of its current slump, causing gold to weaken. Is this a dip to buy on? Do you see another gold high ahead?

Absolutely. This is definitely a dip to buy on. We bought in late December and sold June 7. Our sell point was extraordinarily good, netting us over 41%. And since we sold, the Philadelphia Gold and Silver Index [the XAU] has fallen from 78.75 to below 60.

Interview by Missy Sullivan

At some point I suppose it's not of value to be a contrarian but to recognize that a contrarian viewpoint will be obviated for the short term.


Waverider
(08/05/2002; 00:00:26 MDT - Msg ID: 82260)
AngloGold Goes to Patagonia as Pickings Get Slimmer
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU3kAxVnQW5nbG9HSnippit:
"After more than $9 billion of takeovers in the world gold mining industry in the past year, AngloGold Ltd. Chief Executive Bobby Godsell -- like his rivals -- is running out of acquisition targets.

Almost half of the 36 companies in BNP Paribas's index of the biggest gold companies in 2000 have been swallowed up in mergers and acquisitions. That's forcing producers like AngloGold to buy small mines like Cerro Vanguardia in Patagonia rather than organize corporate takeovers in Toronto and Johannesburg."
Black Blade
(08/05/2002; 00:03:34 MDT - Msg ID: 82261)
Market Stress Pressures Economy, Fed
http://biz.yahoo.com/rb/020804/markets_crisis_2.html
Snippit:

NEW YORK (Reuters) - Severe stress in global markets has nerve-wracked investors fearful that one big shock could jam the gears of the financial system -- much like the crisis days of 1998. "People feel like gasoline has been dumped on the floor and it wouldn't take much to ignite it," said James Glassman, senior U.S. economist at J.P. Morgan Chase. Plunging stocks and multibillion dollar bankruptcies the past month have investors assessing the widespread damage to banks and insurers. If more scandals or failures come to light further straining capital markets, it could force central banks to jump to the rescue, pumping money into the system through lower interest rates.

Fear is starting to hurt economies as well. The financial market squeeze in both the United States and Europe is depriving businesses of crucial capital and sharply increasing their cost of borrowing at a time when global growth, led by the $10 trillion U.S. economy, appears to be losing steam. "The Fed has to get concerned about the capital markets effectively tightening for the Fed at a time when it wants policy to remain accommodative," said Brad Stone, chief U.S. market strategist at Barclays Capital. "The Fed may need to lean against that. Some weeks ago that looked like a very low risk. Now it's definitely a real risk," he added.

Swap spreads -- a measure of banking sector risk that signaled the systemic distress in 1998 -- popped out last week on the credit anxiety about J.P. Morgan before stabilizing. Investors are even raising risk premiums on assets usually considered very safe like mortgage-backed securities. With markets so stretched, harried traders are looking anxiously for the one trigger that could set off an explosion. Rattled markets showed their heightened state of anxiety on Friday when rumors of an emergency central bank meeting in Europe to help a failing bank or insurance company swept through trading desks, sparking selling of stocks and powering gains in safe-haven short-term Treasuries. Banking trouble fears hit a fever pitch on July 24 when rumors spread of liquidity problems at J.P. Morgan Chase -- the largest U.S. bank-- and Citigroup after congressional revelations of their dealings with failed energy trader Enron Corp. The impact across credit markets was harsh and swift.


Black Blade: Maybe the Fed will cut rates and fire up the printing presses 24/7 to stimulate a bit of inflation. It appears that life will get to be quite "interesting" in the coming weeks. The global economy is on very shakey ground as one country after another implodes and the western markets crash. Should be quite "entertaining" tomorrow.

Chris Powell
(08/05/2002; 00:24:57 MDT - Msg ID: 82262)
Morgan fails to report gold derivatives to SEC and shareholders
http://groups.yahoo.com/group/gata/message/1201J.P. Morgan Chase has failed to report to the
Securities and Exchange Commission and to
its own shareholders the firm's $42 billion
in gold-related derivatives:

http://groups.yahoo.com/group/gata/message/1201

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@yahoogroups.com
Black Blade
(08/05/2002; 03:29:44 MDT - Msg ID: 82263)
Looks A Little Grim In The Global Markets
http://quote.yahoo.com/m2?u
Asian and Euro markets look a bit red today. Meanwhile Gold holds up well. The horrible economic data has not been good for investor confidence. All the "happy talk" about the markets have worn thin and investors are running for the hills.

- Black Blade
Black Blade
(08/05/2002; 03:40:10 MDT - Msg ID: 82264)
Economic Double-Dip Fears Rising
http://biz.yahoo.com/rb/020804/economy_2.html

Snippit:

WASHINGTON (Reuters) - The U.S. recovery seemed a sure bet only a few months ago but a relentless stock market slide and a batch of gloomy data have raised fears a second recession could emerge before the first has faded into memory. Most economists are hopeful the world's richest economy can avoid falling victim to a so-called double-dip recession, in which the economy suffers a renewed contraction after several months of recovery from a downturn.


Black Blade: We here at the forum were not fooled by the sweet lies of the analysts and media spin doctors. The facts are quite clear. How can the economy run full bore when the government, corporations, and consumers are accumulating record levels of debt by mortgaging everything they have to keep spending? The fact is � they can't. The bill eventually arrives and the piper must be paid. The party is over and the hangover must be treated. With corporate accounting scandals, job losses piling up, debt growing, corporate earnings not materializing, etc. it is going to get very ugly very fast.

Black Blade
(08/05/2002; 03:52:42 MDT - Msg ID: 82265)
Stocks do not attract 80% of Japanese
http://straitstimes.asia1.com.sg/money/story/0,1870,135613,00.html?
Survey findings are a setback to Tokyo's push to get households investing moreof their $20.7 trillion savings in stocks

Snippit:

TOKYO - Four Japanese in five have never bought stocks, bonds or other securities and never intend to, a survey showed, dealing a blow to a government push to get households to put more of their US$11.8 trillion (S$20.7 trillion) savings into stocks. GOLD has been a beneficiary of the tidal wave of liquidity in Japan. Japanese gold purchases during the January-March period this year were 3.5 times higher than their level a year earlier, according to the World Gold Council. Purchases of gold bullion amounted to 45 tonnes, worth 65 billion yen (S$962 million) in total, during the period. However, Prime Minister Junichiro Koizumi wants people to buy more shares to stem a decade-long stock market decline that is draining banks' shareholdings and making it harder for them to dispose of bad loans.


Black Blade: Of course Japanese are not buying into the crashing Nikkei and instead opt for Gold or savings. I believe it was Abraham Lincoln who said: "You can fool most of the people some of the time, but you can't fool all the people all the time". Hmmm�

Black Blade
(08/05/2002; 04:02:40 MDT - Msg ID: 82266)
South African mining changes increase risk-Newmont
http://sg.biz.yahoo.com/reuters/nsyd11651.html

Snippit:

KALGOORLIE, Australia, Aug 5 (Reuters) - U.S.-based gold producer Newmont Mining Corp said on Monday concerns that South Africa could soon nationalise some of its gold mines made the country a high risk for explorers. "We have no intention of going into South Africa," Newmont president Pierre Lassonde told reporters. The document proposes that control of the mining industry must be in the hands of black business within 10 years. Mining licenses for existing operations must have a black empowerment partner with at least 30 percent equity. For new operations, the figure is 51 percent, thereby ensuring control for the empowerment entity. South Africa's largest gold miner, AngloGold Ltd has attacked parts of the draft as "unacceptable."


Black Blade: I saw the same thing happen with ME oil concessions and Chilean copper. I don't blame foreign business for avoiding SA like the plague. I sold off all my GFI (mostly due to a proposed 20% dilution of shares) and HGMCY holdings and readjusted into GG, MDG, and GLG. Hopefully the management of these SA companies will expand rapidly outside SA for when the inevitable happens. It's too bad that Marxist buffoons will slit their own throats like that.

Belgian
(08/05/2002; 04:07:32 MDT - Msg ID: 82267)
GOLD and BONDS
Central Banks (China) and big hedge funds will move out of short term US-Bonds, gradually, and buy Bullion (derivatives). This, when the stock market stabilizes on its downturn and the accompagning decline in IRs is at its lowest. The declining (weaker) dollar adds to the argument. This will most probably happen before yearend (2002) and POG might be allowed to maneuver up to 400$ (???) NIA !
Black Blade
(08/05/2002; 04:17:33 MDT - Msg ID: 82268)
Damage may be irreversible
http://www.bday.co.za/bday/content/direct/1,3523,1145373-6094-0,00.html
Snippit:

Months of uncertainty in mining likely to continue until charter is finalised. More than a week since the draft of the empowerment charter for SA's mining industry was leaked, many companies are struggling to make up the lost ground. The damage done to investor confidence is not likely to go away and sentiment will continue shaky until a final version of the draft is made public. Many analysts now believe that the knock to investor sentiment created by the leak may be irreversible. It is not just the mining sector which is going to feel the fallout from the leaked draft, but the interpretation of the political sentiment, rightly or wrongly, may also have its negative consequences on other SA sectors.

Black Blade: It is unfortunate that racism that was supposed to end with apartheid has been replaced with racism under the black ANC Marxist regime. In the end, it will take away from investment in SA and likely divert it to western based gold producers and to physical as confidence is lost in stocks.

Wall Street does not want to hear words like confiscation and nationalization. People who invest in mining shares remember what happened when Salvador Allende nationalized Anaconda's copper mines and the losses to the major western oil companies when the ME countries confiscated the oil concessions. It is no wonder that investors are bailing out of SA investment.

Black Blade
(08/05/2002; 04:40:55 MDT - Msg ID: 82269)
Newmont eyes quick end to Normandy gold hedges
http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-syd296426&feed=reu&date=20020804&cat=USMARKET

Snippit:

KALGOORLIE, Australia, Aug 5 (Reuters) - Newmont Mining Corp (NEM), the world's largest gold miner, said on Monday it would look at ways to accelerate the unravelling of millions of ounces of gold pre-sold at fixed prices. The mining house has already extinguished some two million ounces of a total 10 million ounces inherited with the takeover of Australia's Normandy Mining in February, but has vowed to rid itself of the entire positions as soon as possible.

Black Blade: Pierre Lassonde said that he expects the POG to rise to $350 an ounce in the next year or two and that the bull market in gold to last at least 4 years. What a pessimist. Anyway, he says that as the hedge books of gold miners are unwound and closed out the POG will rise relentlessly.

Golden Bear
(08/05/2002; 04:51:00 MDT - Msg ID: 82270)
Belgian (msg#: 82267) GOLD and BONDS
Sir Belgian,

I agree, ...watch for a blow off in bonds as the bull market ends with the Fed's last gasp attempt to revive a dying carcass stock market (IR's at 1%). As the US$ keeps falling precipitously, then the Fed will have to come to its rescue with higher interest rates, crushing real estate, and the PM's will soar....

On the other hand, the PPT may abandon trying to support the dollar - a losing game - and capital flight from USA will accelerate, crushing SM's and real estate, and PM's will again soar...

The hedge funds will just ride the long term trends, as always...

I guess we could say that the Fed is caught in between a giant rock and a mighty hard place....

Cheers.
Spartacus
(08/05/2002; 05:16:57 MDT - Msg ID: 82271)
Bush Bluff?
http://www.gold-eagle.com/cgi-bin/gn/get/forum.html?date=2002%3A08%3A04%3A23%3A00%3A00
Back from vacation. Stumbled on this post on gold-eagle while surfing on the net.

------------

Defeat by Default
(DavidJenkins) Aug 05, 03:25

"Last week there was much discussion about the possibility of the US invading Iraq and you may have wondered how that would affect you.
The discussion about such an event can be linked to a meeting in Germany on the 27.05.2002.
Between Bush and certain Central Bankers.
Those of you familiar with my postings may have noted my assertion that President Bush was summoned to Germany to face the Central Bankers on the 27.05 2002. �Memorial Day Weekend� and I have reasoned with you that the Bankers have told Bush to get his house in order. In a later post titled "Bankers being Bankers"
I discussed with you the possibility of the Central Bankers in the meantime, ahead of the rest of the world, in the knowledge that the US is unable to meet the demands made of it, have been quitting huge amounts of US funds and securities.
Now you ask what has that got to do with the US invading Iraq?
Bush, given such an ultimatum from the Central Bankers and faced with �defeat by default� of his country, could, and would blow up Iraq, and unsettle the oil flow to Europe and Japan.
At the same time it is possible that China would take that opportunity to move on Taiwan.
If the Central bankers call the great �Bush Bluff� and allow gold to rise and the dollar collapse and I say the US has been given six months from 27.05.2002 or sooner, the US may as well invade Iraq and go to the defence of Taiwan as it would have nothing to lose and everything to gain.
The invasion and declaration of war would allow it to suspend its Constitution, close it Banks, close Wall Street and generally renege on all payments, and, do anything and everything it wants to, all in the name of freedom from the fabricated terrorists.
Greenspan and his colleagues have a lot to answer for."


Slowman
(08/05/2002; 07:03:12 MDT - Msg ID: 82272)
Ted Butler
Just got a 5 page answer from the SEC on Manipulation. Does anyone have Butlers land address so I can forward to him for review???
THANKS.
barnacle bill
(08/05/2002; 07:40:37 MDT - Msg ID: 82273)
Slowman - SEC on Manipulation
So what was the bottom-line? Let me guess: they looked carefully, and found no evidence of manipulation.
steady
(08/05/2002; 08:33:33 MDT - Msg ID: 82274)
reaching butler
http://www.silver-investor.com/slowman reach him thru that link. call/email him!
Belgian
(08/05/2002; 08:35:48 MDT - Msg ID: 82275)
WAR Propaganda....
I thought for a moment that there would be no war-games (or at least a postponement) for the time being, as to give the financial markets some time to stabilize and consolidate. Think I have it wrong. I pull this conclusion out of CNN's, sudden, changing tone in its news coverages and President Bush opstinate responses on Israel.
The US for Iraq, whilst China is agitated/provoked at the same time with a declaration of independance. Not the slightiest sign to start any form of conciliation in Israel and (faible) war-opposition within the US congres.

So, war will be, regardless of economics. Or better, war is needed because of the economics.

Again the China factor in all this. As a major dollar-reserve holder and an Official Gold friend. Bottoming Bonds, a declining dollar, the US empire at war (a long war) and a growing arch rival, China, knowing that a decline in exports to the US (and dollar exchange rate), needs to be compensated for. So much positives for Gold, accumulating and coming closer.
SWEET 16
(08/05/2002; 09:01:27 MDT - Msg ID: 82276)
Gandalf the White
Thanks for asking. The Firebird is beautiful pink. I just love it. Dad says I have to be extra good cuz everyone in town knows it is my car. It rained last night so I have the day free. My friend and I had a garage sale Saturday. It was kind of fun. Now I am going to buy some school things and a little silver bar.

I have written several letters but no one has written back yet. I hope I am helping. I think there must be someone who knows about the bad things being done. I just wished they would help us.

Hi Goldentrill, R Powell, Sector, Graefin, YGM and Mr. Murphy. I hope I didn't miss someone.

Sweet 16
Pizz
(08/05/2002; 09:20:53 MDT - Msg ID: 82277)
@Belgian
Re: China/Taiwon

Am I just naive, or has Taiwon lost what little collective sense they may have had.

I can't see one positive to their announcement from their standpoint. To start throwing rocks at China while big brother is up to his rear end in the Middle East doesn't make sense.

China card looks like it may come into play sooner than at least I was thinking. thoughts???

Pizz
steady
(08/05/2002; 09:39:58 MDT - Msg ID: 82278)
blackblade throw dis on dat dem der growin bone pile
08/05/2002
Dow Jones News Services
(Copyright � 2002 Dow Jones & Company, Inc.)


WASHINGTON (Dow Jones)--Third Millennium Telecommunications Inc. (TMTME) ceased operations, because sales contracts with a WorldCom Inc. (WCOEQ) subsidiary and Globalstar USA Inc. have ended, meaning it can no longer earn enough income to continue profitable operations or pay its debts.

An 8K filed early Monday with the Securities and Exchange Commission didn't say what the company's intentions are for future operations or the disposition of assets.

Waverider
(08/05/2002; 09:41:25 MDT - Msg ID: 82279)
Taiwan shoots itself in the foot
http://www.atimes.com/atimes/China/DH06Ad03.htmlPizz, this is an interesting article....

"Recent comments by Taiwanese President Chen Shui-bian warning that Taiwan will follow "its own Taiwanese road" and recommending an islandwide referendum on independence will undoubtedly add to the tensions across the Taiwan Strait. Naturally the more alarmist voices in Beijing and elsewhere will argue that Chen's comments are part of a movement toward Taiwan independence. But the real worry for Taipei is not Beijing. It is Washington.

Chen's real motivations are probably not quite as nefarious as Beijing fears. Chen's comments are most likely bargaining tactics. Though they are in a weak position, Chen and the ruling Democratic Progressive Party (DPP) may believe they can force Beijing to moderate its conditions for direct talks by taking an ultra-hard line. What is more important, however, is how Chen's comments could affect Washington's policies toward Taipei. Taiwan's political elite is ignorant of how rash rhetoric by its leadership may undermine its own base of support in the United States, even among the most ardent Taiwan supporters."
Pizz
(08/05/2002; 10:02:08 MDT - Msg ID: 82280)
Waverider
Thanks.

Not only do I think we are more informed than about 99.99999% of the population, I'm beginning to realize that we may be more REALISTICALLY informed than a very large percentage of politicians world wide. At least we make economic sense, but I guess that may not be the political agenda.

Lie, spin, and who or what to believe now is the game, when they need to be looking at basics. Politicians have been, and I guess they will continue their basic natures until just before the long drop from a short rope, or as the blade starts to move quickly to their outstretched necks.

Pizz

steady
(08/05/2002; 10:06:18 MDT - Msg ID: 82281)
Noble knights is this important? dominoes continued?
http://www.ipab.org.mx Mexican Financial Regulators Shut Down Local Bank Anahuac

08/05/2002

MEXICO CITY (Dow Jones)--Mexico's federal deposit insurance agency will shut down seized local bank Anahuac after the Finance Ministry revoked its banking license.

The agency said in a press release late Sunday that the capital deficit of the small financial institution totals $69 million. The amount to be injected by IPAB for Anahuac's cleanup could be higher, as the agency still has to review the company's books.

The cleanup funds will come from IPAB's deposit insurance fees charged to banks operating in the country.

Financial regulators took over the tiny bank in late 1996, a move that prevented Amado Carrillo Fuentes, then head of the Juarez drug cartel, from purchasing a controlling stake in the company.

canamami
(08/05/2002; 10:09:47 MDT - Msg ID: 82282)
Disordered Love of Gold
I agree that the suppression of gold, and the corresponding evils inflicted on gold-holders (and everyone else), is wrong. However, it is even more wrong to side with the enemies of the West, democracy and Western values simply because gold might become more valuable if those enemies make a move.

We must use our freedoms and democratic capacities to stop the use of official sector gold (and other market interventions) to suppress the POG.

WE MUST NOT cheer on tyrants, be they Islamo-fascists, or the governing clique of the Chinese mainland.

Sierra Madre
(08/05/2002; 10:17:33 MDT - Msg ID: 82283)
Canamami, no more talk about "Islamo"-fascists, please....

Because,

"What's sauce for the goose, is sauce for the gander"

And we want to steer clear of political denunciations or thunderations. Right?

Siberia is cold. I've been there.

STICK TO THE TOPIC: gold.
USAGOLD / Centennial Precious Metals, Inc.
(08/05/2002; 10:21:59 MDT - Msg ID: 82284)
Put a Foundation Under Your Portfolio
http://www.usagold.com/ProductsPage.html

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call Centennial for Arrangements
1-800-869-5115

misetich
(08/05/2002; 10:22:31 MDT - Msg ID: 82285)
Staying on HOT TRAILS - JP Morgan, Citi,
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU6eTBQmVS5TLiBTU.S. Stocks Fall; J.P. Morgan Chase, Citigroup, Cisco Decline

``Everyone is worried about where the market's headed'' as an economic recovery falters, said Scott Schermerhorn, who helps oversee $160 billion at FleetBoston Financial Corp.'s Columbia Management Group.

Citigroup Inc. led the declines after Lehman Brothers Inc. lowered its rating on the world's biggest financial-services company. Telephone shares tumbled as SBC Communications Inc. said it understated its level of short-term debt.
............
Citigroup led financial shares lower, dropping $1.53 to $29.35. J.P. Morgan Chase & Co., the second-biggest U.S. bank, lost $1.34 to $22.51.

Both had their ratings lowered to ``equal weight'' from ``strong buy'' by Lehman analyst Brock Vandervliet. He said the shares are ``likely to underperform near-term due to the implications of a very tough operating environment, economic uncertainty and significant headline risk.''

************

Misetich

The "Banking TRAIL is getting HOTTER by the minute - Lets stay on this one and see where it may lead

Got gold?

misetich
(08/05/2002; 10:29:30 MDT - Msg ID: 82286)
U.S. Economy: Growth in Service Industries Slowed During July
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU6dShXgVS5TLiBFSnip:

By Carlos Torres


Washington, Aug. 5 (Bloomberg) -- The largest part of the U.S. economy slowed in July for a second month, adding to evidence the recovery is losing momentum.

The Institute for Supply Management's index of retail, financial, construction and other non-manufacturing enterprises fell to 53.1 last month from 57.2 in June. The gauge, covering about 85 percent of the economy, hasn't been lower since it fell in January to less than 50, the threshold for contraction.

``Sentiment is getting very sour,'' said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. in St. Louis. The recovery is ``going to be modest.''

............
Misetich

The much hoped "solid economic recovery" has been post-poned for ANOTHER year

In the meantime malinvestiments are growing in the US and global economy

Sooner or later the US $ needs to reflect reality and depreciate 30 to 40%

Got gold?

steady
(08/05/2002; 10:33:51 MDT - Msg ID: 82287)
scandle of the day candidate/ blackblade or someone else usually comes up with the real scandle but this may do.
NEW YORK (Dow Jones)--Yet another energy trader is coming under the government microscope, as Mirant Corp. (MIR) announced Monday that it's the subject of an informal Securities and Exchange Commission investigation into its accounting.

Mirant stated in its announcement that it had expected the inquiry since it had discovered three accounting issues during an internal review of its 2001 financial statements. The three accounting issues relate to unrelated overstatements.

While the company may have expected the inquiry, the news upset holders of its securities. Its stock was recently quoted at $3, down 0.49 cents. Mirant's 10-year benchmark bonds were quoted about five points lower on a price basis, at 51 bid, following the announcement, said traders.

The overstatements are "something of a clerical error," said Robert Willens, an accounting expert at Lehman Brothers. The numbers seem so random that they don't seem to be an effort to "manipulate earnings," he said.

The Atlanta-based company says that it's cooperating with the SEC and its request for information about the accounting issues.

The SEC has also requested additional information from Mirant about recently disclosed shareholder litigation, any round-trip trades entered into by or on behalf of the company, and the Federal Energy and Regulatory Commission's investigation into energy trading practices in the western U.S.

Round-trip trades refer to offsetting deals to buy and sell energy.

Mirant is one of 150 companies under investigation by FERC for possible market manipulation during the California energy crisis of 2000-2001.

Meanwhile, Houston-based Dynegy Inc. (DYN) is attempting to negotiate a settlement with the SEC regarding its accounting practices.

The SEC has been reviewing round trip trades that appear to have boosted Dynegy's trading volume last year, according to Monday's Asian Wall Street Journal.

And XCEL Energy Inc. (XEL) is also among those being investigated by the SEC and the Commodity Futures Trading Commission about round trip energy trades, according to an article in The Wall Street Journal last week.

ummm u mean there are 150 of them out there being investigated
dang. u best have gold! for get got gold?
misetich
(08/05/2002; 10:40:37 MDT - Msg ID: 82288)
BRAZIL - Bradesco's Cypriano Seeks to Cushion Bank From Market (Update3)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU6Y1xYUQnJhZGVzSnip:

By Charles Penty


Sao Paulo, Aug. 5 (Bloomberg) -- Marcio Laurelli Cypriano's efforts to shield Bradesco SA from Brazil's economic woes may fail to protect the biggest bank in the country not controlled by the government from a sovereign debt default.

As Brazil's currency lost a quarter of its value since April, the 58-year-old president moved foreign exchange gains from his overseas businesses to help cover losses on credit extended in reais, analysts said. He also cut loans to industries that analysts say have suffered most.

Some investors say that may not be good enough. With more than a quarter of Bradesco's assets in state debt, the bank is in danger should South America's largest economy default, some investors said. U.S. Treasury Secretary Paul O'Neill arrived in Brazil today to discuss a proposal for the International Monetary Fund to extend a credit agreement to the country.

``We didn't like the level of risk we were seeing,'' said Mead Welles, who manages about $160 million in emerging market debt for Octagon Asset Management LLC. He finished selling all his Brazilian sovereign and bank bond holdings a month ago.

................
Debt Holdings

Bradesco's government debt holdings, which totaled 31.9 billion reais at the end of March, were almost three times those of Banco Itau SA, which after Bradesco is the largest Brazilian bank not controlled by the state. Itau had a total of 11.3 billion reais of state bonds, representing about 14 percent of assets.

Bradesco's government bonds are valued at about 3.2 times its shareholder's equity, or total assets minus liabilities, compared with 1.4 times shareholders equity for Itau.

A debt renegotiation that reduced the value of Brazilian bonds 50 percent would cut Bradesco's shareholder's equity by 92 percent and Itau's by 41 percent. A 30 percent reduction would cut Bradesco's capital by 55 percent compared with 24 percent for Itau, Bruno Pereira, a banking analyst at UBS Warburg in Rio de Janeiro, said in a report.

............
Bradesco, whose foreign currency borrowings totaled 6.31 billion reais at the end of 2001, has tried to make the best of the falling markets, analysts said.

The currency's depreciation has fueled about 500 million reais in foreign exchange gains on the bank's $1 billion of dollar assets, such as accounts in the U.S. currency and overseas property, said Pereira of UBS Warburg.

(***********

Misetich

The Real devaluation is hurting the Brazilians economy more than is being reported - Multi-nationals have invested heavily in Brazil in recent years - most debts are being carried in US $

Lets stay on thie HOT TRAIL shall we !

Got gold?
Pizz
(08/05/2002; 10:44:04 MDT - Msg ID: 82289)
JPM
Thought I saw somewhere this morning that Maria and CNBC are going to interview a JPM exec tonite. Can anyone confirm? Can't find anything on their web site.

Europe, S&P, Dow, all look technically very weak for next few days, while Gold seems ready to pop. Just one man's opinion, but if so, holding JPM over 20 might just be next to impossible without some pretty blatant intervention.

Trotting out a JPM exec on bubble vision would IMHO, be a desperation play.

Bank stocks may be this weeks crisis.

Pizz
Gandalf the White
(08/05/2002; 10:46:27 MDT - Msg ID: 82290)
Looking GOOD, SPOT !
See if you can BITE $310 !
<;-)
goldquest
(08/05/2002; 11:52:41 MDT - Msg ID: 82291)
JPM CEO is
supposed to be on "After Hours With Maria Bartiromo." 9pm Eastern.
Waverider
(08/05/2002; 13:15:56 MDT - Msg ID: 82292)
J.P. Morgan Executives Buy $2.7 Mln in Shares to Meet Pledge
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU66PxPNSi5QLiBNSnippit:
"J.P. Morgan Chase & Co.'s top executives purchased $2.7 million of the bank's shares in late July, keeping a promise to buy after the stock fell to a six-year low, Securities and Exchange Commission documents show. The second-biggest U.S. bank's shares plunged as much as 19 percent on July 23 after J.P. Morgan and Citigroup Inc. bankers disputed during Capitol Hill hearings that they helped Enron Corp. hide debt. The next day, Chief Executive William Harrison told investors the bank's finances are sound and said senior managers would support the stock."

Waverider: ~Pizz, no doubt they're sweating bullets...there aren't many people in this world whom I wouldn't throw a lifebuoy to, but I'd be quite happy to see these slimes go TU!
irish reporter
(08/05/2002; 13:16:30 MDT - Msg ID: 82293)
ATTENTION SLOWMAN
EMAIL ME THE SEC RESPONSE AND I WILL ENSURE THAT TED BUTLER GETS IT
Operative
(08/05/2002; 13:18:02 MDT - Msg ID: 82294)
Bush Building Up Petroleum Reserves
http://library.northernlight.com/FB20020804410000012.html?cb=0&dx=1006≻=0#docPreperations for coming war ? The attached link asks one critical question. How long do we intend to stay once Iraq is invaded. My guess, like Afgan, until the oil fields run dry.
Pizz
(08/05/2002; 13:35:59 MDT - Msg ID: 82296)
@Waverider
Re: JPM

Ever catch a wave wrong and nose in at high speed? (or is that possible surfing?) I don't surf, but I've done it more than once on water skis. Only nice thing about sudden miscalculations, you don't immediately feel the pain, but you sure as heck realize real quick that something major is wrong.

Don't watch too much CNBC, but if JPM's Ceo is on tonite, it should be good for a laugh or two.

HUI got hammered back to support, must need a bit more fuel for the 120 assalt. Looks like there were a few players that didn't want to see gold close above 310 today either.

Pizz
Waverider
(08/05/2002; 14:19:31 MDT - Msg ID: 82297)
Uruguay gets $1.5-billion (U.S.) emergency loan (but there's a catch....)
http://globeandmail.com/servlet/ArticleNews/business/RTGAM/20020805/wurug/Business/businessBN/breakingnews-businessSnippit:
"Uruguay received an electronic transfer Monday of $1.5 billion from the U.S. Federal Reserve as embattled banks began reopening, nearly a week after they closed amid panicked withdrawals by depositors.

U.S. Treasury Secretary Paul O'Neill, who arrived in Brazil on Sunday for a regional tour, said the $1.5-billion (U.S.) temporary loan was in recognition of the strong economic program Uruguay was putting in place. All but the weakest financial institutions were to reopen Monday.

The lynchpin of the Uruguayan plan is a law passed on Sunday to block depositors' access to $2.2-billion in long-term deposits in the country's two state banks for the next three years. Niver Rocha, a 56-year-old merchant, said he was still coming to grips with the fact that his fixed deposit was frozen in a government bank. "I never imagine the state bank would do this to me," he said, adding he had planned to use his savings to buy a store."

Waverider: Once again people suddenly and unexpectedly have their assets frozen overnight!

Pizz ~ I hear ya - once you're in that situation there's no way to backtrack... I see the Dow's down >3% at the moment - we might see it break below 8000 today. Cheers!
Black Blade
(08/05/2002; 15:00:18 MDT - Msg ID: 82298)
Signs suggest stocks could drop more
http://www.usatoday.com/money/markets/us/2002-08-04-mart_x.htm

Snippit:

NEW YORK � Investors burned by past fake-out rallies are again wondering whether the market's recent low was truly the bottom. Renewed economic worries sent the Dow Jones industrials down more than 400 points the past two sessions, wiping out virtually all of last Monday's 448-point rally and giving investors a feeling of d�j� vu.


Black Blade: The pros thought that the bottom was reached several times so far. Also, notice that all the earnings releases tonight are the "Pro Forma" kind. The people are not fooled by the so-called "beat estimates" anymore. The share prices continue to fall in after hours.

Black Blade
(08/05/2002; 15:06:22 MDT - Msg ID: 82299)
Lehman Rates JP Morgan and Citigroup � Sell
http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?dateid=37473.2911921296-800451515&siteid=mktw
Snippit:

Lehman said: "There continue to be a number of operational challenges at JPM, as well as those in the operating environment including legal and regulatory risk that dictate a cautious outlook." As for Citigroup, the broker said: "There is a confluence of negative trends and a high level of headline risk particularly for the largest institutions including Citigroup that dictates a cautious outlook in the near-term"

Black Blade: The translation to a "Sell" rating is obvious. No wonder insiders were ordered to buy shares at JPMC.

Off to the gym!

Belgian
(08/05/2002; 15:17:13 MDT - Msg ID: 82300)
@ Pizz/Waverider :Taiwan / China / US
Enemies...conflicts...threats...wars, and so forth, are most of the time artificially created/constructed. People (governments-leaders) do need adversaries/opponents as a mean to establish their leadership. Religion...land/water...resources...ideologies...etc.

Before the WAT escalation, a US/China, conflict-building was in progress. Russia and communism had their time and couldn't be used anymore.
It is in this context that I see the Taiwan/independance-declaration as an event (out of the blue) to increase tension between China and US (Big Brother) and much less between China and Taiwan.
And indeed Pizz, we the lilliputans will always remain so naive as to believe that "things" just happen to happen without premeditation from any inducer (agitator).
After all, this world never was a rose garden. It already started in Eve's paradise garden (smile).

The timing and the impact of (news) events are controlling the degree of tension or detente. Most of the time, many conflicts can be avoided or quickly resolved. Only mankind has the privilege of creating conflicts *� la carte*.

Today's Taiwan event is just another step in the increase of tension. It even doesn't matter who induced it. We just note the tension-degree as unbiased as possible and get on.

Important to us is that China (and the US) has something with Gold and the dollar currency. And more important, China is not part of the Western financial brotherhood and therefore not a disciplined follower/vazal. And consequently not off topic or a political discussion.
China is the second biggest economy in line with Japan. And is not going to give up on this position. End.

Isn't it remarquable that already for two consecutive days on CNN ticker, it is mentioned that Japanse (housewifes) will change their mind about further accumulation of Gold, because Koizumi backs off about the deposit ensurance and even goes Welteke with his encouragement to buy Japanese stocks !? Why should one mention this as a "news" event out of any Gold context ? Answer : Gold scarcety and fear off...! Those lovely housewifes took 54 tonnes of Physical off the market and stashed it under the matrasses. Only politicians are allowed to push/promote shares without a disclaimer. One moment I thought that the Japanese would/could break loose from their cemented dollar-block. Wrong, they can't and wan't. So the Nikkei will decimate as well : 40.000 (1990) >>> 4.000. Just like Nassie. China will take over.

Black Blade, can you update us on China's situation on Crude Oil ? Projections of how much their consumption might grow and where they are going to get it from ? TIA.


Pizz
(08/05/2002; 15:37:48 MDT - Msg ID: 82301)
Counter Party Risk and Derivatives
Disjointed markets and knee-JERK reactions in the markets. How can or could anyone make any type of investment (other than the shiny stuff) when were faced with banks, hedgefunds, and mainline corporations all with derivatives exposure.

Corporation A has a long to short term interest rate swap, Bank A brokers this side, Corporation B has a short to long term swap, Bank B brokers this side, Insurance company A writes a risk policy for Bank A for Company A, Insurance company B does the same for Corporation B and Bank B, Reinsurer D covers both the insurance companies.

Confusing enough? Now take the same type of reasoning and distribute the rest of the alphabet, but don't forget that they all can trade with each other, or better yet, some stuff can be sydicated thru numerous bank, companies, insurers.

What's the risk? Who knows, cause they all probably have pushed books and off shore partnerships also. How solvent are the insurance companies? A lot less than two years ago that's for sure. Now pull a Tyco and/or an Enron out of the mix (or a few private hedge funds that may already be under). It's just like you or me going out and writing 100 S&P puts @850 and buying 100 puts @855. Our exposure is only 50,000 on the spread, but what happens if you lift the long side and then try to cover the puts you're short and there is no one willing to sell them to you - AND THEN WHEN YOU TRY TO PUT THE SPREAD BACK ON, NO ONE WILL SELL YOU THE 855'S EITHER - (BUT FOR A HEFTY FEE THEY MIGHT SELL YOU 900'S???)

Same works for gold, silver, energy, etc. This is going to take years (decades??) to figure out, but the August 14 deadline for sign off on public statements IMHO is not just to regain confidence in the markets, but more for the government, SEC, and Fed to figure out who may survive, who may get bailed out, and who are bankrupt, but just haven't figured it out (or reported it) yet.

What may happen??

If you haven't reconciled you check book for a couple years, and need to know how much money you really have, in a hurry, you don't try to reconcile it, YOU QUIT WRITING CHECKS AND WAIT FOR EVERYTHING TO CLEAR, OR YOU CLOSE THE ACCOUNT AND START FRESH - especially if you think your running on float with no way to cover - Now, just when do those new banckrupsy laws take effect? You know, the ones that have the derivitive net-out provisions and the credit card modified rules? We've got new money coming, and I've always used the "close the account" and start over option - it's easier to control - especially when you've got the money.

Stock holders and consumers are about to get the short end of the staff again. . . .and the term "negotiated default" may just be on the horizon.

Pizz




Pizz
(08/05/2002; 15:54:18 MDT - Msg ID: 82302)
@Belgian
Thanks for your take on the China/Taiwan situation. I completely agree with your macro viewpoint/ but still in my opinion, I'll equate the adjective phrase "stupid beyond belief" to Taiwan's declaration.

They're playing badmitton on a rugby court and about to be either smashed by one side, abandoned by the other/ or both.

Pizz
Cavan Man
(08/05/2002; 16:01:16 MDT - Msg ID: 82303)
@ Pizz and Belgian
Excellent thoughts and likely accurate speculation. Pearls of wisdom for your enjoyment here each day fence sitters.

Call Centennial (Mike Kosares--not a bad guy for a Greek) today!.....CM (a verys satisfied customer)
Cavan Man
(08/05/2002; 16:09:30 MDT - Msg ID: 82304)
@ USAGOLD.com newbies
Hopefully you are enjoying the "tango" here each day. This is an excellent venue to learn priceless and timeless lessons.

"When a man learns to dance, the piper pays him.....'Ya gotta know the territory".

From: "The Music Man"
Pizz
(08/05/2002; 16:17:56 MDT - Msg ID: 82305)
Correction to my post 82301
For any option traders out there, my example will make more technical sense if you substitute 845 for 855 for the strike on the long put, and 800 for 900 in the example.

I shouldn't try to do three things at the same time, but hopefully some will get my drift.

Pizz
Mr Gresham
(08/05/2002; 16:19:49 MDT - Msg ID: 82306)
Pizz, Waverider (Uruguay)
Oo-oo boy! I see below here a Pizz post on Derivs & Counterparty risk! Gonna heat up some lunch, pop a cold 'un and sit back and enjoy reading that.

"still coming to grips with the fact that his fixed deposit was frozen in a government bank. 'I never imagine the state bank would do this to me,' he said, "

Don't want your assets frozen? Gotta stay below the frost line...
Rockgrabber
(08/05/2002; 16:45:54 MDT - Msg ID: 82307)
Belgian: Where China will get its oil from
I believe China will get their oil from many Mid-East countries when they embargo the U.S. Even if they almost give it to them, it will create another market for their product. People may say, but they cant embargo the U.S., the U.S. is their big source of money. Well they had better rethink if they think that. They have used the U.S. policy of dollar hegemony for their own benifit of collecting real gold. Anyways the real players already have what they want for their oil they have the gold. Who cares now. They dont need the America as a customer anymore, might as well give their oil to China and embargo America. I could see it maybe.
misetich
(08/05/2002; 16:52:04 MDT - Msg ID: 82308)
IMF warns that US economy could slow
http://news.bbc.co.uk/1/hi/business/2174961.stmSnip:

The International Monetary Fund has issued a gloomy prognosis on the US economy, warning that it may cut its growth forecast in September.
The chances that the economic recovery will be weaker than expected have been increased by the ongoing slump in the stock markets and a string of accounting scandals, the Fund said on Monday.

It also said it was concerned about the uncertain outlook for corporate profits.

In an apparent swipe at the White House, the IMF also said that economic forecasts by President George W Bush's administration were overly "optimistic".

The comments were made in the IMF's annual review of the world's richest economy.

.............

Originally, the IMF had predicted that the US economy would grow by 2.5% this year and by 3.25% in 2003.

"However, recent data releases and other developments, including the sharp decline in equity prices in recent weeks, have exacerbated the downside risks to the outlook for both personal consumption and business investment," the IMF said.

"The likelihood, therefore, is that downward revisions to the growth projections would be made in the... forthcoming World Economic Outlook."

.........
Mr O'Neill said he expected the economy to grow at 3% to 3.5% during 2002.

The IMF urged the Bush administration to focus economic policies on budget discipline and reforming corporate governance.
************

Misetich

We can expect further downgrades - not only the US - but global - as the "consuming engine" anemic growth may go into negative growth again!
Too many countries (if not continents) are US consumer dependent - As economies get weaker - Latin America, South East Asia, Japan - deflation winds will hit North America hard -
Europe (the turtle) economy will also be slowdown - however-the effects will be diminished comparatively to the rest of the world - as 65% of their trades occur within the European Union

Central Bankers tasks will get harder and harder - eventually hitting the oncoming GOLDBERG!

Got gold?



TownCrier
(08/05/2002; 16:56:26 MDT - Msg ID: 82309)
2002 dollar chart
http://www.usagold.com/wgc.htmlLast Monday (or has it been two weeks now?) I mused that the recent behavior of the dollar was reminiscent of a time-compressed (into only five months) span of Plaza and Louvre agreements.

When you visit this week's WGC weekly gold market summary (link above) have a look at the accompanying chart, and bear in mind the essence of that old post:
========
TownCrier (7/29/02; 14:00:37MT - usagold.com msg#: 81776)

"The pace of change in today's economy is much faster than in earlier decades." -- Dr Olarn Chaipravat, a senior Finance Ministry adviser

Beside me, is anyone else struck by the performance of the dollar as resembling a blast from the past?

Athough it may be too early to render a final verdict, specifically, what we have witnessed over the course of just these five recent months seems to be a condensed replay of the September 1985 Plaza agreement to address an overvalued dollar, and the February 1987 Louvre agreement to help steady it again.

A good recollection of comments by public officials during this time (and the recent revival of the "strong dollar mantra) would seem to support coordinated efforts to this effect. And honestly, have we come to expect it any other way?

But to all gold advocates I hasten to say, take heart -- soundly based on the very same principle that saw gold break free from the very concerted official designs of $35 per ounce. Thus, it will not linger at $300 for overlong. Call Centennial to make your arrangements for delivery to your door the independent wealth of kings.
R.
======

PS. This week's report gives an overview of the 1933 St. Gauden's gold coin auction. For $7.59 million paid out, would you truly be happiest with this one coin, or would you rather have the better part of one tonne of gold sovereigns and other assorted uncirculated old world gold coins? Call the folks at Centennial tomorrow bright and early to get your personal accumulation underway.

R.
Pizz
(08/05/2002; 17:06:04 MDT - Msg ID: 82310)
Surprise, Surprise, Surprise
Hate to steal a quote from the old TV show "Andy of Maybury", but in this case it fits.

Just scanned a few intra-day stock charts and from about 1:00 on, the Dow lost 145 points plus or minus with JPM flat, plus or minus a quarter (After the 1.50 drop in the morning.)

Of course, the daily chart will show JPM off worse than the Dow in percentages for the day, and the prop job for JPM in the last two hours gets slightly obscured since they both closed at or near the lows of the day.

Wonder how the JPM employees' 401K's are doing. Are the bankers smarter than Enron employees - even with a crystal ball?

Pizz
misetich
(08/05/2002; 17:12:38 MDT - Msg ID: 82311)
Detroit fights back-For Detroit's carmakers - General Motors, Ford and Chrysler - times are tough. All three have watched this year as the Japanese have relentlessly gained market share in North America, the world's biggest car market.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185527917&p=1012571727108Snip:

By Jeremy Grant
Published: August 5 2002 20:56 | Last Updated: August 5 2002 20:56
As the elite of the car industry meets for an annual summit in Traverse City, Michigan, US executives may prefer to face their Japanese rivals on the resort's famous golf courses rather than in vehicle showrooms. For Detroit's carmakers - General Motors, Ford and Chrysler - times are tough. All three have watched this year as the Japanese have relentlessly gained market share in North America, the world's biggest car market.

The response of the "Big Three" has been to throw an array of financing incentives at consumers, from interest-free loans to generous cash-back deals. These offers have helped sustain sales at a time of growing fears about consumer spending - but at a cost of eroding already wafer-thin margins. Worse, they have not helped the US carmakers build a sustainable increase in market share. The Japanese, by contrast, are increasing market share with minimal use of incentives.

The Big Three's plight is uncomfortably reminiscent of a decade ago. Then, Lee Iacocca, former Chrysler chairman, famously admitted that his company had brought its troubles on itself by selling "some crap" to customers, who turned to better-quality Japanese products instead.

This time it is Dieter Zetsche, Chrysler's chief executive, who is speaking out. Chrysler, he declared last week, would "fight back" by tackling the Japanese head on in the passenger car market and by adopting similar flexible manufacturing systems.

If anything, the threat today is greater than it was in Mr Iacocca's time. Japanese manufacturers account for about half of all sales of passenger cars in the US, as US carmakers concentrate efforts on the higher-margin light truck sector. Monthly sales data released last week underline the scale of the Big Three's problem. Toyota, Honda and Nissan managed on average to sell 5.7 per cent more vehicles in July than the previous year, mostly at full price.

*************

Misetich

What is the price of Rubins and O'Neil - US strong $ policy? The manufacturing base in the US has eroded in the last 7 years - Such debasement brought short term gains and long term pain

Auto industry is still America's employment engine - yet at the height of a 'red hot auto market' US manufacturers are losing market share!!!!!!

The Bush economic team keeps on getting slammed by the market - each time they open their mouth - and use the 'sound fundamentals- etc. lip service -

The US $ is overvalued and needs a downward correction - however malinvestments and other misalignments make it impossible for the administration to lower the $ -

As Rubin said, the US is in uncharted territory - but other say that the territory is really not so uncharted - they warn of a GOLDBERG AHEAD!

Got gold?
Pizz
(08/05/2002; 17:19:55 MDT - Msg ID: 82312)
Correction to my last post
Substitude "Gomer Pyle" for the TV show.

(Is the mind and memory the first or last thing to go as you get older and more cynical????)

Pizz
Siochaina
(08/05/2002; 17:28:37 MDT - Msg ID: 82313)
Iraq & Saudi Arabia
http://www.debka.com/body_index.htmlUS Preparations for Iraq Offensive
From DEBKA-Net-Weekly August 2
5 August: In total hush, the US has embarked on advance preparations deep inside Iraq for the coming offensive against Baghdad. In northern Iraq, these preparations are in the form of crash engineering projects.
According to DEBKA-Net-Weekly's military sources, US army engineers and equipment are working round the clock in the Kurdish regions of northern Iraq to throw up a series of six to eight small airfields that will cater to the main body of American and Turkish forces when they cross over into Iraq. The new fields, some of which are no more than widened landing strips, will also serve the fighter planes and helicopters providing a vanguard of special forces with air cover. The airfields are strung along three strategic axes..."

Note: I still believe that a second reason Bush has for going into Iraq is to secure oil in light of serious internal problems in Saudi Arabia
misetich
(08/05/2002; 18:16:18 MDT - Msg ID: 82314)
Job cut announcements fall 15%-CHICAGO (CBS.MW) - Corporate layoffs dropped about 15 percent in July to a 14-month low of 80,966, according to a monthly tally released Monday by outplacement firm Challenger, Gray & Christmas.
http://cbs.marketwatch.com/news/story.asp?guid=%7B5731653B%2D774C%2D4A81%2D8660%2D38F5C7A56DDF%7D&siteid=mktwSnip:

So far in 2002, corporations have announced 816,493 job cuts, down 17 percent from 983,337 after seven months in 2001. In all of 2001, 1.96 million job cuts were announced.

..............
"While it is a positive sign that job cuts have slowed so significantly, the news is weakened by the fact that the economy seems to be in a no-growth state," said John A. Challenger, CEO of the outplacement firm.

"Combined with the fact that wages are at a virtual stand still, the economy is in a dangerous state, one that is ripe for a significant slowdown in consumer spending and at high risk of dipping back into recession," he said.

Once again, telecommunications firms announced the most job cuts in July: 20,196. Computer companies announced 11,040 cuts.

*************

Misetich

The Bone Pile is 15% off the 2001 pace wherein 1.96millon job cuts occurred -

The unemployement number of 5.9% reported last week must be questioned in view that almost 2.7 million have been laid-off in the last 19 months and few jobs have been created.

The real story - can be found in local, state and federal govenrment tax revenues shortfall - and we've only seen the tip of the iceberg of economic stress at the state level

For all intensive purposes the recession is here - already - unless you want to quibble that 1% growth is "strong economic growth" as O'Neil keeps on reminding us - With trillions of equity value wiped out in the last few weeks - consumers will hard pressed to keep up the present spending momentum -

It is in difficult, critical times such as those upcoming - that gold shines the most. Get Physical - Get gold!

Got gold?



sector
(08/05/2002; 18:24:06 MDT - Msg ID: 82315)
Japan's Deposit Insurance Mess Gets Messier
MNew Definitions...Checking vs. Savings...Have The Depositers Been Good?New financial safety net mulled

Yomiuri Shimbun

The government intends to restructure the deposit insurance system, whose main purpose has been to protect depositors, as a new financial safety net also for protecting settlement systems--the foundation of economic activity, sources said Thursday.

The plan to overhaul the main purpose of the deposit guarantee system--the protection of depositors--follows an instruction issued by Prime Minister Junichiro Koizumi to study reform measures for ensuring the stability of financial institutions' settlement systems before the imposition in April of a 10 million yen cap on refunds of liquid deposits at failed banks.

The government aims not only to prevent confusion due to the imposition of the refund cap but also to ensure the safety of settlements so that the stability of the financial system would be achieved.

For such purposes, the government is likely to stipulate that certain liquid deposits be excluded as targets of the refund cap and be fully protected. The Financial System Council, an advisory panel on financial affairs to the prime minister, is likely to hammer out concrete measures including:

-- Strictly redefining the liquid deposits to be fully protected even after the imposition of the refund cap.

-- Making the protection of such liquid deposits a permanent measure without using public funds to protect such depositors' interests in the event of a bank failure.

-- Allowing the refund cap to be applied as planned earlier to ordinary deposits in addition to time deposits, for which the refund cap has been in effect from April this year.

Koizumi on Tuesday told Hakuo Yanagisawa, state minister in charge of financial policy, that although imposition of the refund cap should be implemented as currently planned, the settlements system should not be put thrown into an unstable situation.

Following the instruction, the government decided not only to review the system by excluding liquid deposits from the refund cap but also to take into consideration a drastic revision of the deposit insurance law.

The deposit insurance system aimed to maintain the stability of financial systems by protecting depositors of 10 million yen or less as principal. By introducing a system to protect liquid deposits widely used by companies, in addition to the existing scheme to protect small-amount depositors, the government aims to establish a wider financial safety net.

Concretely, the government intends to redefine liquid deposits as deposits to be used for no-interest bearing settlements. Such deposits will likely be distinguished from deposits for investment or savings. Checking accounts, mainly used by companies for business settlements, will be the target of the liquid deposits. But the government also plans to study the creation of a new type of no-interest bearing liquid deposit for individuals and making it subject to full protection.

After taking measures to secure the settlement functions, the refund cap will be imposed from April on ordinary deposits, the sources said.

The government also intends to study measures to strengthen functions for checking and overseeing companies' management of computer systems for settlements, to improve Bank of Japan settlement systems and to shorten the terms for dealing with collapsed financial institutions.

+++++++++++++++++

Any Questions?
slingshot
(08/05/2002; 18:27:36 MDT - Msg ID: 82316)
Siege Engine
Gold Above $300.00Three lines of Goldbugs could clearly be seen. An impressive sight. Men stepping side by side formed three dark ribbons which moved like ocean waves on a sea of green as they crossed the rolling field. They have come to fulfill their quest and avenge the fallen messenger'struck down under a flag of truce. Their conviction now solidified.
Those who stood in front of the toppled tower looked up to where the arrow had come. Only to stare into the face of the Lord of the Castle. They turned back to the rolling tide before them.
It was a long walk and time slowed down in the crossing. The Goldbugs talked to each other in the ranks. Small matters. Mostly about family, what they did in life or where they lived.
Reaching the point in the field where the messenger lay in care of Lady Waverider, a tremendous yell was given by all.
One that curdled the blood of any man and those who faced them knew what it meant. The sun drew high in the sky.
When the first line came close enough the defenders could see their opponents eyes were like firey coals. But most extraordinary was they carried their weapons in their weak hands.
They soon found out as a hail of stones, thrown by angry men
came down. Very few escaped this barrage.
The line clashed with awful sounds. Two armies on a chess board were now intermixed in battle.
Clanging swords and axes as if ten thousand blacksmiths at work. Sounds of mortal combat. One could not tell between the victor or the vancquish. Shields and maces. Swords and pikes waved about in hellish tempo.
The second line of Goldbugs joined the first.
At the Main Entrance the Goldbugs had found the gate heavily fortified. They had to break through. The battle plan depended on it. Arrows rained down and a slaughter was taking place.
It was then from out of nowhere, Gandalf the White, appeared with the men. Tapping his staff three times on the stone bridge and reciting an incantation in Latin.
A aura encompasses the figure and arrows fail to penetrate the light. Seeing this the Goldbugs move away from the gate.
Gandalf the White raises his staff with both hands a fireball is discharged with a flash and hits the gate. Engulfing it in a blue haze. And like the thunderclap of the storm, the gate explodes into slinters and they way is cleared.
The Goldbugs with renewed vigor enter the castle.

Seeing the Wizard on the Bridge, Lady Waverider entrusts Lady Sweet Sixteen, with the care of the messenger.Joined by Ladies Goldentrill and Siochain they mount their horses and rush to the aid of the Wizard. Only to find an open gate and into battle they ride. Pushing the defenders back into the courtyard.

Sirs Canuck,Boilermaker, YGM, Pizz, Nomad and Misetich move into the stairways to dispatch the archers and end the death from above. They swarmed the ramparts before the archers notice and the high ground was theirs.

On the ground,Sir Black Blade rallied the men and the Goldbugs slowly beat back the enemy. Advancing up the ramp and into the Castle.

Reaching the summit, Sir Black Blade looked down into the courtyard. All was silent. Goldbugs now looked at him and raise their swords. The smell of blood was heavy and bodies littered the ground.

To the far end of the courtyard was the entrance to the main hall.

It was the The Lord of the Castles, last stronghold.
sector
(08/05/2002; 18:29:49 MDT - Msg ID: 82317)
Bad loans continue to mount at banks
Could There be a Connection between these two Posts?Bad loans continue to mount at banks

Yomiuri Shimbun

The Financial Services Agency announced Friday that private financial institutions' bad loans increased by 9.46 trillion yen on a year-on-year basis to 52.44 trillion yen as of the end of March, the largest amount since March 1993 when authorities began disclosing the amount of bad loans.

In addition to poor performances by borrowers due to the economic slump, the agency's special inspections, which began last autumn, and more severe self-assessment of assets by financial institutions contributed to the inflation of bad loan figures, agency officials said.

Bad loans by major commercial banks, long-term credit banks and trust banks increased by 8.38 trillion yen to 28.39 trillion yen partly due to the agency's stricter assessment of the financial strength of large borrowers faced with falling stock prices and credit ratings, the officials said.

Regional banks and second-tier regional banks' nonperforming loans surged by 1.2 trillion yen to 14.82 trillion yen, the officials said.

With the number of financial institutions dropping due to bankruptcies, credit unions' bad loans dipped by 120 billion yen to 9.24 trillion yen, the officials said.

An analysis of the bad loans shows that because financial institutions toughened their assessment criteria, outstanding loans requiring special attention such as those more than three months in arrears and those needing a reduction in interest soared by 5.84 trillion yen to 19.13 trillion yen, the officials said.

Loans thought to have a high probability of becoming uncollectible because of poor performance of borrowers surged by 4.29 trillion yen to 22.91 trillion yen, the officials said.

Debts owed by bankrupt firms and those with no prospects for rebuilding dropped by 665 billion yen to 10.4 trillion yen.

The ratio of loans which became non-performing at the 13 major commercial banks deteriorated from 5.3 percent in March last year to 8.4 percent, the officials said.

However, the agency said that there will not be as many bad loans in the future because of the severe assessment of assets carried out to check all loans.

++++++++++++++

Any MORE questions? Oh yeah...the US and Japan are redesigning their currency...adding pretty colors.

Three guesses as to what that's all about and when it will all go down.
sector
(08/05/2002; 18:35:56 MDT - Msg ID: 82318)
Bills to get facelift to counter forgeries
Just in Case You Guys Were Thinking I Make This Stuff UpBills to get facelift to counter forgeries

Yomiuri Shimbun

The government and the Bank of Japan announced Friday that fiscal 2004 would see the issuance of new counterfeit-proof 1,000 yen, 5,000 yen and 10,000 yen bills.

This would mark the first change in the bills' designs since 1984.

"Preventing counterfeits is the main purpose of these changes," Finance Minister Masajuro Shiokawa said at a press conference Friday.

"Issuing the new bills will create a more upbeat atmosphere and promote upgrades to vending machines and automated teller machines," he said, in an indication of how the new bills were expected to stimulate the economy.

Shiokawa also said the government had been looking into issuing new bills since the end of last year.

The new 10,000 yen bill will continue to feature scholar and educator Yukichi Fukuzawa (1835-1901), but the current pair of pheasants on the back will be replaced with a pair of phoenix statues at Byodoin temple in Kyoto Prefecture.

The face of scholar Inazo Nitobe (1862-1933) on the 5,000 yen bill will be replaced by that of novelist Ichiyo Higuchi (1872-1896). Mt. Fuji will be replaced on the reverse side by the calligraphic work "Kakitsubata-zu" by Ogata Korin (1658-1716).

The new 1,000 yen bill will replace the image of novelist Soseki Natsume (1867-1916) with that of bacteriologist Hideyo Noguchi (1876-1928), and the reverse side will feature Mt. Fuji and cherry blossoms instead of Japanese cranes.

Higuchi worked during the Meiji era (1868-1912), and her major works include "Takekurabe" and "Nigorie." Noguchi was primarily active during the Taisho era (1912-1926) and studied yellow fever on the African and other continents.

The changes will require the government to amend an ordinance that governs the types and other details of bills.

As of the end of June, the central bank had printed 6.21 billion 10,000 yen bills, 420 million 5,000 yen bills and 3.19 billion 1,000 yen bills. The government and central bank plan to replace the 10 billion bills currently in circulation with the new ones over a two-year period beginning in fiscal 2004.

The new bills will be created using new technologies such as holographic imaging--which enables users to tell at a glance whether a bill is genuine--and colored watermarks, which aim to make the bills harder to copy.

Similar technologies were used in creating the euro bills issued in January.

The bills also will have relief patterns to allow the visually impaired to distinguish between the different denominations.

According to the government and the central bank, the most sophisticated anticounterfeiting technologies in the world wil be used to make the new bills.

Katsusada Akiyama, director of the central bank's Currency Issue Department, said at the press conference that he was unable to provide more information on the technologies to be used, citing counterfeiting concerns.
TownCrier
(08/05/2002; 18:59:41 MDT - Msg ID: 82319)
Japanese insured savings, deposits
In crafting new legislation a government will ultimately work things around to its OWN advantage within the available latitude.

Therefore, let Mother Nature insure the safety and stability of your most liquid wealth. Hold your excess funds in the form of gold.

This advice is applicable regardless of geography. Take note, North and South America, etc.

R.
Pizz
(08/05/2002; 19:01:31 MDT - Msg ID: 82320)
(No Subject)
Time to refill my gin and tonic, Maria is on with JPM's Harrison. (Probably best get a barf bag too.

Pizz
silvercollector
(08/05/2002; 19:09:44 MDT - Msg ID: 82321)
Towncrier
I am but a pup and have not read into the Plaza accords but as a technician I see strength in the dollar, at least short and mid-term, with the erupting currency crisis ('s) in South America.

Would this explain the radical upward reversal in the dollar and the 2 gold smackings of late?

It appears to me, at least in technical terms, that the dollar is not yet the weakest link. If you concur, when do you see the second rolling over for the greenback? Discussions now seem to point to fall/early winter.

(Anyone else w/ thoughts on the dollar)


Thanks,

silvercollector
silvercollector
(08/05/2002; 19:27:52 MDT - Msg ID: 82322)
Pizz
Just watched 10 or so minutes of Harrison and Maria, the conversation is a 'shell game', I turned the channel to watch tree frogs change color, more entertaining.

This is really sad, billions of dollars on the hook, waiting for the PTB to make a call on. There are back room whealings and dealings going on to sort this out. 'Everyone' is going to take a piece of the 'hit' so this charade can be buried.

Do we really think that JPM is going to take the full hit, for integrity and morality's sake?

silvercollector
(08/05/2002; 19:34:37 MDT - Msg ID: 82323)
Addition to post for Towncrier re:dollar
Gold has behaved like a commodity in the last couple weeks, inversely proportional to the dollar.

Euro has fallen off a bit, commodity currencies in Canada and Australia taking a hit, dollar strengthening with economic weakness in the cards and South American ruckus.

When/why does the dollar turn over again?
Black Blade
(08/05/2002; 19:35:42 MDT - Msg ID: 82324)
Re: silvercollector � Dollar Strength

In the current economic environment, I would think that there should be a disconnect between the US dollar and gold. The reason being that all currencies are falling flat and therefore there is now only "relative strength" pitting national currencies against one another. At some point gold will have to break loose to find its own value against the diminishing value of the basket of world currencies (including the over-valued US dollar). From my point of view the economic collapse of the global economy is already set in stone as no one country has the political will to do what is necessary and therefore the markets will drive the correction regardless of government actions. In other words � we live in "Interesting Times".

- Black Blade
Cavan Man
(08/05/2002; 19:44:43 MDT - Msg ID: 82325)
sector
Agree with your take. What is your opinion on AU seeking safe haven abroad? Might it be necessary?

It is hard for me to see how AU can win in NA and SA when the kitty(s) is empty and the regimes are assuredly fiat both now and forevermore.

Wait a minute....or, will the FRD buy gold mines????
Pizz
(08/05/2002; 19:44:57 MDT - Msg ID: 82326)
Notes on JPM interview with Maria
Notes are not verbatim, and my comments follow the dashes.


92% of Fortune 500 companies do business with JPM

---------that's a comforting statement.

They financed a lot of gas (deals) with Enron.

--------- I'll buy that.

Thousands of special purpose vehicles out there.

---------I'm really getting comfortable now


Legally correct????

---------OK, if you say so.

Misdleading vs. financial solutions

--------- Trying to imply that everyone but them is ignorant
--------- and complex transactions are normal business.


The hiding of funded debt e-mail - can always find a few e-mails inappropriately written - dropping ball back to the accountants (thanks)

---------more beancounters going to jail.

Internal investigation? absolutely, and he's comfortable and transparent. Just complex, but it was only financing.

-------- right!

We are in the risk business.

-------- is this a bank or a hedge fund?

Due dilligence? We've done the best we can.

-------- that's why auditing, compliance, and internal
--------control staffs are cut first.

They were comfortable extending credit to Enron. We got burned too and lost a lot of money.

--------Their fees must have been gigantic.

How much will it cost JPM (Enron). Don't think they have any bond liability. Most worried about surety bonds on prepaid contracts.

---------I'd be worried too.

Always risk in jury trials (used the "we are transparant" again).

---------guiotine, guiontine

Is a rating downgrade coming? thinks AA rating will hold

---------I'll take the other side of that bet.

50 billion net derivitives position. 85% is extended to investment grade companies.

---------based upon whose accounting? Enron's??? Net is the key word there, and my gut tells me he's got the gold deriviatives netted in that figure. If he doesn't he's in trouble.


Chase capital partners - overinvested in telecommunications, but still in top tier and he used 15 year example for returns. Reducing capital 5% in this sector.

--------heck, was there a telecommunications industry 15 years ago (smile). Everything starts close to zero.

JPM played within the rules (Enron).

--------rules need changing or clarification.

Regrets - wishes they weren't getting the publicity, but still sleeps well - and another reminder that they are in the risk business.

---------psycopathic hedge fund managers sleep well too.


Won't cut dividend, but won't make future predictions either, but we're ok now.

---------double speak.

Will re-regulation hurt them? Say's they have integrated model and investors like it. (investment brokerage vs. financing)

--------checked your stock price lately Mr. Harrison? Oh, you must mean your private clients who don't own yor stock.


And gee, no gold derivative questions.



Pizz














Cavan Man
(08/05/2002; 19:45:26 MDT - Msg ID: 82327)
sector
That's FED.
Camel
(08/05/2002; 19:48:30 MDT - Msg ID: 82328)
China


Even down here at the low end of the food chain I got word from a friend of a friend,that the fix was in, that the Financial Brotherhood was going to make a major effort to run up the stock market , but with the world drowning in debt ,war brewing in Iraq, and more terrorist attacks on the way this does not seem to be a good time to jump in .At the end all they will will have is a roomful of dead cats.

At least we dont have to listen to anyone lecture about how great things would be if we could just get the government off the backs of Enron, Arthor Anderson, WorldCon , J.P Morgan and the like.

If there is a serious disruption of the world economy countries such as China would be doubly impacted as so much of their economy is dependant on exports to the west . It has always been said that China must maintain a 7% growth rate or else unemployment would reach crises proportions with potentially hundreds of thousands of unemployed roaming the countryside.

The students still recall Tienanmen Square and long for western freedoms , the religious majority wants to reclaim its ancient heritage ,the Tibetans want their homeland returned, the Moslem minorites in the west are restive , the peasents and workers need to feed their families, Tiawan wants its independance.Chaos will reign.

While some might believe that Confucius is not relevant to modern China , much of the popular wisdom, sayings ,and folklore of China derive from the Confucian schools much in the same way that parables and sayings from the Bible permeate thought in this country .It is the foundation to which they have returned again and again .


For those not familiar with the story, Confucius prepared his entire life for a position of publc service and at age 51 became an advisor and judge for the rulers of one of the feudal states at the time. His fairness and wisdom in settling disputes was so celebrated that the rulers of some of the neighboring states became fearful that his influence would spread and paid a bribe of 8o concubines and 150 horses and Confucius was removed from office and spent the rest of his life of wandering the countryside.

A poem atributed to Confucius from that period illustrates the more meloncholy world view of his latter years.

********

Through the valley howls the blast
Drizzling rain falls thick and fast
Homeward goes the youthful bride.
Over the hills crowds by her side.
How is it oh azure heaven
That from my home I thus am driven
Through the world my way to trace
With no certain dwelling place
Dark ,dark the hearts of men
Worth in vein comes to their kin
Hastens on my course of years
Old age desolate appears.

*******

Confucius has never been thought of as the founder of a religion but more of a social reformer and moralist, more like Socrates , and his work more "statecraft"' , emphasizing such things as the just and uniform application of law, and the importance of cultivating character through education . He .founded a school taking students from all levals of society and training them for government office which became the model for the Mandarin system which prevailed in China for 2000 years


The Confucians also shared a more mystical bent along with their Taoest brethern amd the ancient sages of the distant past, the belief that "all things were ruled by virtue". If only the leaders posesed enough virtue a mysterious force would be generated that lept from person to person and would permeate society and finally create a just and peaceful world.

Eventually the system became ridged and insular and unable to adapt and China fell victem to a series foreign conquests; the Mongols in the 12th centuty and the Manchus in the 15th century. In the 1840s the western powers began the partition of China and in 1860 the British and French burned the ancient capitol of Peking.The Japanese invaded in 1895 and again during the 1930s.

Little wonder that the Chinese might employ extreme measures to reclaim their country .

Perhaps the current Chinese leaders are attempting to make good faith reforms allowing more economic, political and religious freedoms. Perhaps one day the state will " wither away " but the spiritual heritage of China will endure because it is embeded in the language, even in the vocabulary, and like some terrible computer virus it seems to reappear in each succeeding generation.

Here is another quote from Confucius from the 6th century BC.
***********
Do not do to others what you would not desire them to do to you.( Analects 15:23)

********

Kind of a catchy little phrase. Maybe if it could be polished up a litlle you might really have something.

goldquest
(08/05/2002; 19:50:05 MDT - Msg ID: 82329)
Harrison of JPM
Pizz was right! Good for a few laughs. Too bad Maria didn't have the guts to ask about JPMs involvment with gold. My take is that Harrison is being thrown to the "wolves" to salvage JPM. He and O'Neill should both be looking for gainful employment by the end of the month. JPM stock should hit the magic $20.00 by Friday. Better gitcher gold while the gittin' is good!
Black Blade
(08/05/2002; 19:56:15 MDT - Msg ID: 82330)
Belgian � China and Oil

I don't recall all the info on the Chinese petroleum situation and the paperwork is piled high here at Black Blade Central. I seem to recall that China had made some arrangement for Iranian oil and is engaged in a massive exploration and production effort in western China as well as in the contentious Yellow Sea region. They also have made a deal with Japan for a NG pipeline from the mainland to Japan. China may find itself in a bind for petroleum energy as the country advances economically and as the people begin to gain in personal wealth. If I find more info I will post it. Cheers!

- Black Blade
R Powell
(08/05/2002; 20:02:07 MDT - Msg ID: 82331)
CNBC interview with Harrison
Maria interviewed JPMC's CEO Harrison who stated everything was within the rules, just very complicated. Both he and Maria seemed extremely nervous. She appeared uneasy at having to ask the tough questions and he gave me the impression that he knew his answers weren't going to be accepted. I can't remember seeing as much tension in an interview in a long time. Harrison will never make it in politics, he can't evade direct questions smoothly while lying, smiling and exuding confidence. I'm guessing that even those that don't fully understand "prepays" saw that something wasn't right. It will be interesting to watch the price of JPMC stock tomorrow.

I'm not completely sure of them myself but I believe JMPC paid in full (to Enron) for gas that was to be delivered in the future. Enron probably held the gas in futures contracts which it could hold with a small (margin) downpayment. With Enron now toast, JPMC's "prepay" is money (a loan) that the bank can now enter in the loss column.
Have I got this right? Apparently JPMC set up this whole situation. Why not just loan Enron the $$$ and call it a loan? Probably because it was designed so that Enron could hid the debt from its shareholders and analysts. Will this intent, designed by the bank, become apparent to those interested. How many more companies are hiding debt in derivatives?
Rich

Black Blade
(08/05/2002; 20:13:01 MDT - Msg ID: 82332)
JP Morgan Chase Interview


Earlier, Heckel and Jeckel (Kudlow and Cramer) had a guest on where they discussed the nasty "rumors" about JP Morgan Chase and how the SEC should do something. So much for these clowns who emphasize "buy the rumor and sell the news". Then comes Maria who asks a brief question about the derivatives and is brushed off by CEO Harrison. She conveniently neglects to follow up and drive for an answer, let alone drill him over the $23 Trillion notional value of the derivatives. This was nothing but an orchestrated white wash on back-to-back CNBC shows. Nothing substantive was to be expected, only a bit of light jazz and pillow talk for Maria. Makes one long for an "ambush interview" by Stone Phillips or Mike Wallace.

- Black Blade
mdgc
(08/05/2002; 20:14:20 MDT - Msg ID: 82333)
Black Blade: China and oil
It is the Pratley Islands in the South China Sea that are contentious, not the older oil producing areas in the Yellow Sea off Manchuria and Shandong in Northern China.

China has recently signed a deal (I believe with BP) to build a pipeline from the oil and gas producing province of Xinjiang east to Shanghai.

I don't think that China is likely to face a petroleum problem any time soon.
R Powell
(08/05/2002; 20:18:29 MDT - Msg ID: 82334)
Pizz
I also noticed Harrison's answer to total derivative exposure being about $50 billion. Does this mean that, if all open positions were covered (closed) tomorrow, the cash account would approximate $50 billion? I can't think of any other way to interpret this. Am I right?
Thanks
Rich
Siochaina
(08/05/2002; 20:22:53 MDT - Msg ID: 82335)
Cavan Man
I am asking myself the same questions as every day goes by .....will we be able to maintain PM here...especially if there is anything to the idea of NA hegemony in the future....Mexico for cheap labor...Canada for resources

The question arises, will anyplace be safe haven?
a nation of one
(08/05/2002; 20:22:55 MDT - Msg ID: 82336)
stating what is obvious to some and obscure to others
It seems to me that the main present investing generation has been encouraged to behave in ways that no previous generation has. I have to credit for this a certain well known Television personality (who recently changed channels). For more than thirty years, he instilled into the minds of his listeners the notion that certain investing strategies, with regard to stock markets, were to be rigorously adhered to. These listeners are the ones now heavily invested in the markets. His advice not to trade frequently but to hold stocks long term, in my view, has had the effect of motivating millions of individuals to act on this adopted belief of theirs, that the stock market will always recover, and that what matters is not short term losses but long term gains. These people are not noticeably aware of the history of markets; specifically, that notorious declines do not experience recoveries for decades. It seems clear to me that this is having a result in present market events, particularly in the depth of lack of awareness on the part of these investors, of the need to get out of a bad thing while the getting is good. Throughout the 1990s I thought it clear that the subject advice in these matters would turn out to be more in the interest of stock market professionals than in the interest of working class investors. Ancillary to this is the type of activity we are seeing right now in the stock markets, namely that the working class public is being extremely slow to recognize the vulnerable position they are in, and are reluctant when it comes to taking wise action, which of course would have been to sell at least by this time last year, if not a year earlier. Two factors seem to me apparent in this: an unwillingness (or an inability) to spend time and exert energy in learing what the facts are, and trusting some other person to do that for them, such as a familiar TV personality. One thing that has consistently surprised me in this current bubble, going as far back as 1997 or thereabouts, is how slowly events are transpiring. I thought the bubble would burst much sooner than it did. I thought the public would panic a long time before now. Instead we see that the forces are very large, that they are enormously strong, and that the scale of the potential catastrophe is enormous. 'Protections' that have been built into the system are not only having the effect of delaying, but also of exacerbating, prolonging, and making more potent that which will happen. If circumstances were normal, by this I mean as they were in previous times, we should expect to see the public panic at some point in the very near future. But with the strategies that they have been taught in recent decades, I wonder whether the real danger for them is not that they will panic, but that they will not panic, will do nothing at all, and thereby follow the downward slide all the way, inch by inch, never getting out, not even at the bottom. This might prevent an outright collapse, where great hoardes are all trying to sell at once, while other, even greater hoardes are adamantly refusing to consider buying anything at all at any price. But even if such a panic were to happen, those teachings will have affected it, I perceive, so that in either case there will be an even greater transfer of wealth out of the hands of the working class, and into the hands of the thinkers.

I write this neither in approval nor in disapproval but merely in a sense of cold, objective observation.
Pizz
(08/05/2002; 20:23:11 MDT - Msg ID: 82337)
R Powell - JPM Enron Comments
How many companies hiding debt? Let's hope it's not a large chunk of the 92% of Fortune 1000 companies they do business with, but I'm more worried about the "thousands" of special purpose entities out there.

Ever put together a kid's toy without taking time to read the instructions? Seems like the finished product never quite looks right, and I usually have parts left over. I remember installing some of those "unremovable, smash on wheel locks" before I was supposed to, and had to junk the whole thing.

Let's hope derivatives aren't defined as my wheel locks.



Pizz
Black Blade
(08/05/2002; 20:29:45 MDT - Msg ID: 82338)
Re: mdgc

Thanks, I meant South China Sea. China, Vietnam, and the Philipines are scrapping over rights. Some concessions are overlapping and it is a real mess. Where one rock sticking out of the water can shift boundaries several mile miles, there is a lot of accusations and claims of ownership. However, at some point in the future there will be a severe energy shortage in China if they continue to develop economically. As a large population as that in China gains in individual wealth they will naturally spend on energy consuming items in there homes, in energy consuming factories, and more transportation. At the very least hydrocarbon exploration and production will expand greatly in coming years. Cheers!

- Black Blade
R Powell
(08/05/2002; 20:31:20 MDT - Msg ID: 82339)
notional value// BB or anyone ?
Can someone give me a definition of "notional value of derivatives"? I understand futures and options positions but many of these have unlimited or, at least, hugely unpredictable future value. A held (bought) option may expire worthless or may attain many thousands of dollars in value. Options sold many produce the sale price or cost the writer anywhere from a few to "unlimited" dollars. Futures bought or sold may gain or lose.
How does one determine the value as in JPMC's $23 trillion? This I don't understand.
Thanks
Rich
Pizz
(08/05/2002; 20:34:26 MDT - Msg ID: 82340)
Rich
The net derivatives position - thats the way I understood it too, and there were too many comments about "we're in the risk business" to make me think otherwise.

Let's see, 50 billion net exposure (and that's not notional value) with about 40 billion in capital. You or I couldn't get a prepaid Visa Card with 120% of our net worth invested in futures or options (assuming we were transparent with the lender), and they're going to maintain their AA rating??

This guy's gotta be related to O'Neil somewhere back down the line. I'll be watching the daily action in JPM tomorrow. The prop job is going to be expensive - real expensive, and about twice as much as befor he opened his mouth, IMO (don't feel real humble today).

Pizz
Black Blade
(08/05/2002; 20:43:28 MDT - Msg ID: 82341)
Analysts expect weak economic growth
http://www.usatoday.com/money/economy/2002-08-04-slowdown_x.htm
Snippit:

The odds still favor continued, but weak, economic growth for the rest of the year, despite a sharp escalation in fear that the fragile U.S. economy is slipping back into recession, analysts say. Last week, data on manufacturing, confidence and economic growth suggested the recovery is barely inching ahead. Moods soured further Friday when the government said only a handful of jobs were added in July, leaving 8.3 million Americans unemployed. Such data has led economists to conclude the dramatic drop in stock prices is having a measurable impact on the broad economy. That, in turn, is raising concerns that the USA is heading into a so-called "double dip," when a recession is followed by a brief period of growth, only to be followed by contraction again. Talk also is growing that Federal Reserve Chairman Alan Greenspan might soon take out his interest rate-cutting ax.


Black Blade: Yeah right. These analysts have such a stellar record too. They completely missed the recession and even denied there ever was one. Guess what? The data slapped them down hard. Dianne Swonk of Bank One was one such charlatan who was continuously trotted out on CNBC and who made such ridiculous claims. Now they are eating crow. Yet here they are again talking up how the economy will grow. This economy has lost more investor wealth (even adjusted for inflation) than the period of 1929 to 1932 � yep, more than the Great Depression!!! And it isn't anywhere near over yet. Just wait until the credit and real estate bubbles implode. Few corporations and investors are likely to fair well when it comes to dealing with record debt. Enron, WorldCon, Arthur Andersen, Global Crossing, Kmart, etc. are just the tip of the iceberg. Hey weren't these companies part of Harrison's elite 85% top tier companies that are holding JPMC derivative debt? Hmmm�

USAGOLD
(08/05/2002; 20:43:45 MDT - Msg ID: 82342)
Rich, Pizz. . .
This just came to me by e-mail from Bill Murphy/Mike Bolser. If you remember, Enron hit the wall when Moody's downgraded its credit rating. Certain contractual arrangements go to margin (loan) call automatically when the credit rating drops below a certain level specified in those various contracts. I don't know if this is the case with JPM/Chase but it could be. If I remember correctly, when Rubin went to the Administration for help on Enron, it was to see if someone could get a hold of Moody's and get them to stand pat on the credit rating. Maybe the nervous reaction was warranted. . . . .

-------------------

Maria: We're back with JP Morgan Chase CEO & Chairman,
Bill Harrison. Bill, we've been talking about the
potential liabilities to JP Morgan regarding Enron. The
bond market has seemed to have made up its mind. JP
Morgan bonds are trading as if your company was a single
"A" rated company when, in fact, you're a double
"A" rated. Now, is it a dead give away when your bonds
are trading like you're about to get down graded by the
ratings agencies?

William Harrison: I don't think so. I can't speak for
the rating agencies. But, the fundamentals of the
company in terms of capital, liquidity and our strategic potential in terms of earnings uh, are very clear. So,
we hope that we'll be able to maintain our ability
ratings and I think we will.
Pizz
(08/05/2002; 20:46:52 MDT - Msg ID: 82343)
Rich
Notional value is the equivalent of the strike price times the number of contracts. 10 JPM calls at 20 have a notional value of 10x100x20 or $20,000. If you have to exercise, you have to come up with the $20K. Where notional value comes into play is if you have to cover (exercise) and don't have the underlying stock to deliver.

The problem with JPM is that they offset with different instraments. Like long calls on JPM and short calls on Enron (using options as an example). If you have to cover face amount on one, and can't liquidated a dissimilar hedge (that the models say work in tandem - unliquidated) you've got to come up with the face or nominal amount.

Enron's can't deliver on their side of the hedges, and the JPM's of the world might have to cover.

If you're short gold via derivatives, and get called, your hedge with the miner for gold in the ground won't do you a lot of good, and cash settlement will break the bank - literally.

Hope this is clear, cause it's a bit complex.

Pizz
Rockgrabber
(08/05/2002; 20:52:21 MDT - Msg ID: 82344)
Maria's interview with CEO Harrison
With comments like "there are thousands of special purpose vehicles", and "We did nothing wrong," and "this is what our capitalistic system was built on", should not go over well. The fact they have interests in 92% of the fortune 500 companies and find nothing wrong with this practice of deception, makes you realize this has a long way to play out. I loved the way he just so casually brushed off the fact nothing wrong had been done. The best part is he may be right, deceptive yes, illigal no. Better term for this might be "legal fleecing" or something.
silvester
(08/05/2002; 20:57:03 MDT - Msg ID: 82345)
@A Nation of One


I agree completely with your observation. Looking back, it clearly appears there has been a long term concerted effort in training the entire herd to run right over the edge of the upcoming cliff. Unbelievable, but clearly happening.

The training so complete that yes they will follow the downward slide all the way. I speak with people who are deadset in their thinking that the only way is ride it out. So sad.

How many more 911's would we need to start a real panic? That one did'nt work. The training has been so effective.
goldquest
(08/05/2002; 20:59:01 MDT - Msg ID: 82346)
The Federal Reserve Stealing
http://www.skolnicksreport.com/bigsec.htmlfrom the crooks? How dare they!
Black Blade
(08/05/2002; 20:59:58 MDT - Msg ID: 82347)
Remarks by Chairman Alan Greenspan - Financial derivatives

Before the Futures Industry Association, Boca Raton, Florida - March 19, 1999

By far the most significant event in finance during the past decade has been the extraordinary development and expansion of financial derivatives. This morning I should like to evaluate the scope of these markets, the nature of the risks they entail, and some of the difficulties we encounter in managing those risks.

At year-end, U.S. commercial banks, the leading players in global derivatives markets, reported outstanding derivatives contracts with a notional value of $33 trillion, a measure that has been growing at a compound annual rate of around 20 percent since 1990.

Of the $33 trillion outstanding at year-end, only $4 trillion were exchange-traded derivatives; the remainder were off-exchange or over-the-counter (OTC) derivatives. The greater use of OTC derivatives doubtless reflects the attractiveness of customized over standardized products. But regulation is also a factor; the largest banks, in particular, seem to regard the regulation of exchange-traded derivatives, especially in the United States, as creating more burdens than benefits. As I have noted previously, the fact that the OTC markets function quite effectively without the benefits of the Commodity Exchange Act provides a strong argument for development of a less burdensome regime for exchange-traded financial derivatives.

Of course, notional values are not meaningful measures of the risks associated with derivatives. Indeed, it makes no sense to talk about the market risk of derivatives; such risk can be measured meaningfully only on an overall portfolio basis, taking into account both derivatives and cash market positions, and the offsets between them.

Clearly, the degree of counterparty credit risk on derivatives depends critically on the extent to which netting and margining procedures are employed to mitigate the risks. In the case of exchange-traded contracts, of course, daily variation settlements by clearing houses strictly limit, if not totally eliminate, such counterparty risks.

In the case of OTC derivatives, counterparty credit exposures are far larger, though still a very small fraction of the notional amounts. On a loan equivalent basis, a reasonably good measure of such credit exposures, U.S. banks' counterparty exposures on such contracts are estimated to have totaled about $325 billion last December. This amounted to less than 6 percent of banks' total assets. Still, these credit exposures have been growing rapidly, more or less in line with the growth of the notional amounts.

The leading role played by U.S. commercial and investment banks in the global OTC derivatives markets is documented in a Bank of International Settlements survey for last June. This survey estimated that size of the global OTC market at an aggregate notional value of $70 trillion, a figure that doubtless is closer to $80 trillion today. Once allowance is made for the double-counting of transactions between dealers, U.S. commercial banks' share of this global market was about 25 percent, and U.S. investment banks accounted for another 15 percent. While U.S. firms' 40 percent share exceeded that of dealers from any other country, the OTC markets are truly global markets, with significant market shares held by dealers in Canada, France, Germany, Japan, Switzerland, and the United Kingdom.

Despite the world financial trauma of the past eighteen months, there is as yet no evidence of an overall slowdown in the pre-crisis derivative growth rates, either on or off exchanges. Indeed, the notional value of derivatives contracts outstanding at U.S. commercial banks grew more than 30 percent last year, the most rapid annual growth since 1994. Although episodes of extreme volatility have produced declines in the most highly leveraged contracts, the growth of the more "plain vanilla" products has continued apace or even accelerated.

The reason that growth has continued despite adversity, or perhaps because of it, is that these new financial instruments are an increasingly important vehicle for unbundling risks. These instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it. This unbundling improves the ability of the market to engender a set of product and asset prices far more calibrated to the value preferences of consumers than was possible before derivative markets were developed. The product and asset price signals enable entrepreneurs to finely allocate real capital facilities to produce those goods and services most valued by consumers, a process that has undoubtedly improved national productivity growth and standards of living.

Nonbank, as well as bank, users of these new financial instruments have increasingly embraced them as an integral part of their capital risk allocation and profit maximization. It should come as no surprise that the profitability of derivative products has been a major factor in the dramatic rise in large banks' noninterest earnings and doubtless is a factor in the significant gain in the overall finance industry's share of American corporate output during the past decade. In short, the value added of derivatives themselves derives from their ability to enhance the process of wealth creation.

While the value of risk unbundling has been known for decades, the ability to create sophisticated instruments that could be effective in a dynamic market had to await the last decade's development of computer and telecommunications technologies. The ability to create and employ sophisticated financial products also galvanized the academic community to develop increasingly complex models of risk management. While recent history suggests that such models are useful, they are doubtless in need of much improvement--an issue to which I will return shortly.

Yet beneath all of the evidence of the value of derivatives to a market economy, there remains a deep seated fear that while individual risks seem clearly to have been reduced through derivative facilitated diversification, systemic risk has become enlarged, as a consequence. Without question, derivatives facilitate the implementation of leveraged trading strategies, though the very technology that has made derivatives feasible has also improved the ability to leverage without derivatives. Nonetheless, the possibility of increased systemic risk does appear to be an issue that requires fuller understanding.

We should point out, first, the obvious. Overall, derivatives are mainly a zero sum game: one counterparty's market loss is the other counterparty's market gain. Counterparty credit exposures on OTC derivatives are a different issue and the source of much of the systemic concerns. Such losses rose to record levels in the third quarter of 1998. Nonetheless, the rate of loss remained well below that on banks' loan portfolios. Moreover, the counterparty credit losses in the third quarter can be traced primarily to the extraordinary events in Russia, which produced many defaults on ruble forward contracts. In the fourth quarter such losses dropped sharply, albeit not to the very low pre-crisis rate.

The bulk of the losses reported by the major derivative houses for the financially turbulent third quarter of last year reflected declines in the market values of their underlying trading positions, especially in equities, commodities, and emerging market debt. Derivative instruments were bystanders. They may well have intensified the losses in underlying markets, but they were scarcely the major players.

Yet, through the past decades' phenomenal growth of the derivative market, there has not been a significant downturn in the economy overall that has tested the resilience of derivative markets. (I operate on the premise that neither human nature nor the business cycle has been rendered obsolete.)

While nothing short of a major economic adjustment is likely to test the underlying robustness of the derivative markets, there are reasons to believe that there are some fundamental strengths in these markets. First, despite the growing use of more exotic over-the-counter instruments, the vast majority of trades are relatively straightforward interest rate and currency swaps. The market risk on such swaps is presumably less daunting to individual counterparties than their underlying exposures, or presumably the swaps would never have been initiated. Moreover, the credit risks are increasingly subject to comprehensive netting and margin requirements that, although they do not fully remove the risk, significantly ameliorate it. And so far as banks are concerned, capital requirements are applied to such risks as they are to loans that create credit risks quite similar to those of derivatives.

Hence, although one may harbor concerns about the overall capital adequacy of banks and their degree of leverage, there is little to distinguish such concerns between risk adjusted on- and off-balance sheet claims.

The one area of risk that needs more thought is so-called potential future exposure. At any particular point in time only a small fraction of the notional value of derivative contracts are in the money--that is, have a positive market value. Because prices will doubtless change in the future, those contracts with negative or even positive values have the potential of larger positive values and, hence, a potential credit loss on default.

That future potential for loss upon counterparty default will differ by the nature of the contract. For purposes of supervisory risk-based capital requirements, potential future exposure (over and above the current market value of derivatives, if positive) is currently estimated by separating derivatives into categories based on the underlying instrument (interest rate, exchange rate, commodity, equity, etc.) and the remaining maturity. The capital requirement is then derived by applying fixed factors to each category that reflect differences in the price volatilities of the instruments and the structure of the contracts. Interest rate swaps (70 percent of the notional value of OTC derivatives) have limited long-term loss potential, primarily because the contracts do not provide for an exchange of principal and the exposure is effectively amortized as interest payments are exchanged over the life of the contract. Foreign exchange, commodity, and equity derivatives, of course, entail far greater exposures, either because principal amounts are exchanged or because the underlying's price is more volatile.

This approach to regulatory capital requirements is not altogether satisfactory. The most sophisticated derivative dealers parse their derivatives book in more detail. And certainly a single point estimate cannot capture the range of losses that might reasonably be experienced. Hence, in evaluating derivatives risk, far more stress testing of the lower probability outcomes is a necessity. Even a one in 500 occurrence does happen once every 500 times, and if that occurrence could threaten the franchise value of the derivatives counterparty it is an important concern for risk aversion.

But we have to be careful of how we view these ostensibly low probability events. They are low probability only if we presume that the reality from which these events derive is best represented by a single bell-shaped probability distribution, be it a normal distribution or even a fat-tailed one.

Modern quantitative approaches to risk measurement and risk management take as their starting point historical experience with market price fluctuations, which is statistically summarized in probability distributions. We live in what is mostly a stable economic system in which market imbalances give rise to continuous and inevitable moves toward equilibrium resolutions. However, the violence of the responses to what seemed to be relatively mild imbalances in southeast Asia in 1997 and throughout the global economy in August and September of 1998 have raised the possibility of a discontinuous adjustment process.

Almost all the time investors adopt strategies that seek profit only in a relatively long- term context, fostering the propensity for convergence toward equilibrium that ordinarily characterizes financial markets. But from time to time (and quite possibly with increasing frequency) the resulting propensity toward convergent equilibrium has given way as investors suffer an abrupt collapse of comprehension of, and confidence in, future economic events. Risk aversion accordingly rises dramatically and deliberative trading strategies are replaced by rising fear-induced disengagement. Yield spreads on relatively risky assets widen dramatically. In the more extreme manifestation, the inability to differentiate among degrees of risk drives trading strategies to ever more liquid instruments. Strategies become so tentative that traders want the capacity to reverse decisions at minimum cost. As a consequence, even among riskless assets, illiquidity premiums rise dramatically as investors seek the heavily traded "on-the-run" issues.

History tells us that sharp reversals in confidence happen abruptly, most often with little advance notice. They are self-reinforcing processes that can compress into a very short time period. Panic market reactions are characterized by a dramatic shift to maximize short term value, and are an extension of human behavior that manifests itself in all forms of human interaction--a set of responses that does not seem to have changed over the generations. I defy anyone to distinguish a speculative price pattern for 1999 from one for 1899 if the charts specify neither the dates nor the levels of the prices.

If this paradigm turns out to be the appropriate representation of the way our economy and our financial markets will work in the future, it has significant implications for risk management. Probability distributions estimated largely, or exclusively, over cycles excluding periods of panic will underestimate the probability of extreme price movements because they fail to capture a secondary peak at the extreme negative tail that reflects the probability of occurrence of a panic. Furthermore, joint distributions estimated over panicless periods will underestimate the degree of correlation between asset returns during panics when fear and disengagement by investors results in simultaneous declines (or, in rare instances, increases) in values as investors no longer adequately differentiate among degrees of risk and liquidity. Consequently, the benefits of portfolio diversification will tend to be significantly overestimated by current models.

Such a view of the world would also have important implications for approaches to the prudential oversight of capital adequacy for banks and other financial institutions. Regulatory minimum capital requirements for banks' trading portfolios are now based on the banks' own internal risk measurement models. Furthermore, regulators are exploring the potential for using an internal models approach to credit risk in the banking book.

Some may now argue that the periodic emergence of financial panics implies a need to abandon models-based approaches to regulatory capital and to return to traditional approaches based on regulatory risk measurement schemes. In my view, however, this would be a major mistake. Regulatory risk measurement schemes are simpler and much less accurate than banks' risk measurement models. Consequently, they provide banks with the motive and the opportunity to engage in regulatory arbitrage that seriously undermines the regulatory standard and frustrates the underlying safety and soundness objective. Specifically, they induce banks to reduce holdings of assets where risks and regulatory capital are overestimated by regulators and increase holdings of assets where risks are underestimated by regulators.

It would be far better to provide incentives for banks to enhance their risk modeling procedures by taking account of the potential existence and implications of discontinuous episodes. Scenario analysis can highlight vulnerabilities to the kind of flights to quality and flights to liquidity that seem increasingly frequent. Stress testing of correlation assumptions can reveal the disappearance of apparent diversification benefits in such scenarios.

Stress testing requirements already are part of the internal models approach to capital requirements for market risks in bank trading accounts. Stress testing of estimates of counterparty credit risks should also be required. The logic is the same as for market risk. The factors that are used to determine supervisory capital requirements for counterparty credit exposures are based on statistical analyses of non-panic periods. Moreover, during panic periods the usual assumption that potential future exposures are uncorrelated with default probabilities becomes invalid. For example, the collapse of emerging market currencies can greatly increase the probability of defaults by residents of those countries at the same time that exposures on swaps in which those residents are obligated to pay foreign currency are increasing dramatically.

Supervisors should avoid any temptation to increase the supervisory factors for potential future exposure to address these crisis scenarios, which have vastly different implications for different combinations of contracts and counterparties. But they can and should review the requirements relating to the scenarios to be simulated by the bank and the incorporation of stress test results into the policies and limits set by the bank's management and board of directors.

As we approach the twenty-first century, both banks and nonbanks will need to continually reassess whether their risk management practices have kept pace with their own evolving activities and with changes in financial market dynamics and readjust accordingly. Should they succeed I am quite confident that market participants will continue to increase their reliance on derivatives to unbundle risks and thereby enhance the process of wealth creation.



Black Blade: As this is not copy righted I presented it in whole. When Alan gave this speech in 1999 the notional value of the risk for the banks was only $33 Trillion, and now 3 years later it is $47 Trillion and growing). We saw the risk when Orange County derivatives blew up and then later as Long Term Capital Management threatened to take down the entire US economy with only a minor position but with extraordinary leverage (just like JP Morgan Chase, Bank of America and Citigroup). In other words � hang on for the wild ride if many of the counter parties to these banks blow up. It's going to get very ugly.
R Powell
(08/05/2002; 21:00:59 MDT - Msg ID: 82348)
a nation of one
I've often thought exactly the same about how "slowly events are transpiring." It brings to mind Livermore's statement that waiting was what brought him the really big profits. Of course, he knew which side of the trade to take and usually knew when to take it before he waited.

I'm often amazed at how the events of recent years have followed so precisely the predictions of some analysts while disproving others entirely. I have become more and more a contrarian (and cynic). Again, as you say, often very slowly. I've been told and observed that currency trends move extremely slowly and often last for years so, if one believes POG is the direct inverse of dollar strength, it follows that the POG bull may be a gradual and multi-year affair.
However, perhaps dollar strength is only one of a great many influences on POG. Slowly or no?
Rich
Pizz
(08/05/2002; 21:01:04 MDT - Msg ID: 82349)
USA Gold
MK, we won't know for sure, unless JPM does get downgraded, but even if some contracts don't "mature" on a downgrade, the downgrade will greatly increase JPM's cost of funds with a subsequent drop in earnings, in an already falling investment, loan, etc. business.

Now, if that happens, how does the FED help? Well, now we may know why everyone's anticipating a rate cut. JPM is and probably has been a big customer at the FED discount window lately, and they probably need the extra spread even without a downgrade. I have to think that big smart money has been and will continue to move out of JPM.

I'd sure like to see some good numbers on their liquidity. My gut says if Harrison had been Pinnochio while commenting on their liquidity, Maria would have been a shiskabob.

Pizz
steady
(08/05/2002; 21:08:13 MDT - Msg ID: 82350)
china/oil
this lil co has ties with producing oil in china UPL
they report tomorrow. and no i dont own shares, not now not tomorrow, not next week. not next month. i just happeen to know.
Pizz
(08/05/2002; 21:17:01 MDT - Msg ID: 82351)
Rockgrabber
Kind of gives you a real warm fuzzy feeling doesn't it.

Think I'll dig out that good bottle of scotch I've got hidden for special occassions, and fondle a few maples.

Good scotch and warm gold, I feel better already.

Pizz
TownCrier
(08/05/2002; 21:25:01 MDT - Msg ID: 82352)
silvercollector, post-"Louvre"
Other than a concerted official effort to jawbone some stability back into the sliding thing, I don't see anything *legimate* coming down the pike that will fundamentally give the dollar any substantial leg up (exchange-rate-wise).

And when the world's reserve currency has thus become a card-carrying member of the Weak Sister Society, it is not long before the foreign contributions at jawboning turn into less than hollow words as trading commences inevitably to the contrary for benefit of the home team.

This leaves the Bush administration in the unenviable position of largely going it alone, thereby being put into an uneviable position of being the "unfriendly administration" with respect to calling for an end to business-as-usual among Big Corporate America. Previously, who would have ever thought it would be a Republican administration that would be the one cracking down on America, Inc.?

They simply have to. We can think about it for a minute. How else does an admistration go about projecting SOMETHING to back the re-emergence (after a five month hiatus) of the empty rhetoric of a "strong dollar" while at the same time running budget deficits in a sagging economy with a Fed that will keep its foot on the dollar accelerator with low or lower interest rates (this all seeming very paradoxical -- as far as a "strong dollar" would actually be affected to the public onlookers).

Something like this. President Bush (hypothetical) to the world. "Look at our strong dollar! Built on the back of a national corporate structure that, prior to this new legislation, has never before been held to such a high standard of account!" What you won't here him say is that even now Alan Greenspan is comfortably positioned in the back room for printing up more of these "strong dollars" than the world could possibly choke down.

God bless them all, how they do try! But as far as your comments about gold being "smacked down" of late, I don't see it that way. I've got a rather odd, yet comfortable viewpoint that allows for the very real possiblity that a financial crisis could errupt PUBLICALLY (if it stays private it don't exactly count (cf. LTCM)) at any given day, while at the same time I appreciate the inevitable unfolding of the long-term economic trends that render the day to day details meaningless. Meaningless, that is, unless you are caught unprepared or leveraged against them.

As such, the recent "smack down" was nothing at all and scarcely worthy of comment, likewise as was the recent "smack up" close to $330. But since we're all here (you and I both) trying to enjoy a lively and stimulating conversation, let's keep watching and talking about these details, even as we are prepared (through physical gold ownership) for the long-term trending play of affairs.

I recommend a careful reading of Belgian -- particularly over the last couple of days in this regard. If I can lay claim to possessing any certain knowledge at all, it is this one thing: I am certain that, of all the great many economic, research and policy analysis I've filtered through, the generous economic musings offered by Belgian ring true to the ear. Something I enjoyed before in the tradition of FOA and ANOTHER before him.

Anticipate the short term, live for the long term. Gold will see you through. On a personal note, that's why I'm HERE rather than elsewhere in the wide world. I assume the same is true for many of the persons that gather here at the forum and particularly those that are personally businesswise known to MK and the rest of his crew at USAGOLD-Centennial. I couldn't imagine conducting gold business elsewhere.

Randy
R Powell
(08/05/2002; 21:52:43 MDT - Msg ID: 82353)
Pizz
Using your example of 10 JMP calls:

If JPM sold these calls with a strike of 20, then anytime before expiration the buyer can exercise them (buy JPM stock) at 20 per share. So, if JPM shares are trading at, say 50, then the call holder buys 10 x 100 x 50 or $50,000 worth of stock for whatever premium was paid for the 10 contracts. If JPM shares are trading at $150 per share, the options are worth 10 x 100 x 150 or $150,000. The option holder can buy $150,000 worth of stock for whatever premium was paid for the 10 contracts. Selling call options involves unlimited risk as the seller must produce the shares at the "strike" price. I once bought a 625 silver call for $175. This premium was cheap as silver was trading around $5.25 but then word leaked out of Buffett's buying and I sold the option for $5500 when silver spiked up to $7.25. Someone collected my $175 and then had to pay $5500! What if silver had gone to $20.00? What is the notional value of any derivative position if not the immediate offset price? If so, then how can anyone determine anyone's exposure except at the present price of the underlying commodity or share price or whatever the price that the derivative derives its value from? Buying or selling futures positions hold the same risk unless somehow hedged.
Are all JPMC's positions somehow hedged? If I buy gold at $300/ounce and sell calls at $350/ounce to collect the premium, then I've limited my gains to $50/ounce even if POG goes to $1000/ounce because it will be "called" from me at $350. Some positions are hedged to limit losses rather than gains. Unless, all of JPMC's positions are similarly backed or hedged, the notional value can not be determined, no?

If risk is limited by some kind of spread, like buying soybean oil while selling soybean meal, the position, while hedged, still has a notional value that changes with every up or down tick in price of either commodity. This is one reason why I can not understand the so-called derivative melt down price of $354/ounce gold. What am I missing in Chapman's argument?
Rich
R Powell
(08/05/2002; 22:08:27 MDT - Msg ID: 82354)
Usagold
I think I may understand this downgrade threat.
If an individual buys a futures position, margin (cash) is required so that some downpayment is holding the position. If the price of a commodity falls by an amount egual to greater than that margin, then more funds must be committed to hold the position. Each commodity has its own minimum margin requirements.

Are you saying that big companies and/or banks use the value or worth of their companies (as determined by share price and bond ratings) as margin instead of cash??
If so, this would explain much to me. This would be another domino or falling knife capable of severe damage to the house of cards. Is this analogy correct? Did Enron's bankruptcy result from too little margin (margin determined by shares held x share price) instead of too little cash deposit??
Thanks
Rich
All Black
(08/05/2002; 22:16:58 MDT - Msg ID: 82355)
test
test
Black Blade
(08/05/2002; 22:17:39 MDT - Msg ID: 82356)
Stocks to pay price for 'snap-backs'
http://cbs.marketwatch.com/news/story.asp?column=Thom+Calandra's+StockWatch&siteid=mktw
Sharp rallies now point to intense selling later

Snippit:

SAN FRANCISCO (CBS.MW) - A noted market researcher expects a series of massive red-ink days in the U.S. stock market -- sooner rather than later. The selling is destined to follow what Paul F. Desmond calls an "upside blow-off" that lifted the battered Dow Jones Industrial Average more than 400 points a week ago. Desmond's research suggests strongly the stock market is far from a healing stage that will mark a return to better days.

"Our 70-year history shows that 90 percent up days that are not preceded by 90 percent down days usually turn out to be upside blow-offs that are quickly followed by new lows," Desmond said. His NYSE-based study earlier this year showed the bear-market washout - a classic capitulation by every investor and their mother-in-law - comes after a series of these 90-90 down days, followed inevitably by furious buying. Desmond, using Lowry's Reports internal measures of supply and demand, says the one-day rally staged a week ago, "was accompanied by a significant increase in downside volume, showing that sellers were aggressively dumping stocks into the rally." "We are still expecting an eventual series of 90 percent down days at significantly lower prices," Desmond told me Monday.


Black Blade: Yep, it's 1929 all over again. The suckers rallies certainly did not hold up. I heard Bob Pisani of CNBC say that floor traders were complaining that it wasn't a matter of selling, rather that nobody was buying. Just wait until the next blow off when everyone wants out and they start to run for the exits en masse. It should be quite "entertaining".

Black Blade
(08/05/2002; 22:23:13 MDT - Msg ID: 82357)
Taiwan to bail out banks with problem loans
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185496385&p=1012571727195
Snippit:

Taiwan's finance ministry is preparing a package of reforms designed dramatically to increase the state-owned Financial Reconstruction Fund's role in dealing with the problem loans burdening the banking sector. The remodelling of the fund, which was established only last year, is a tacit acknowledgement that bailing out the banking system will demand more state money than previously reckoned.


Black Blade: Following in the footsteps of Japan. Hmmm�

Golden Bear
(08/05/2002; 22:27:14 MDT - Msg ID: 82358)
a nation of one (msg#: 82336)
Bill Bonner adds to your thoughts...In Greenspan We Trusted

The Daily Reckoning

Baltimore, Maryland

Monday, 5 August 2002

* * * * * * * * * * * * * * * * * * * * * * *

*** Help is on the way...what every investor wished he
knew...

*** Stocks fall on Friday...temperatures rise... some
preposterously large losses...

*** Are consumers getting desperate? Why do rich people by
designer brands? And more questions!


* * * * * * * * * * * * * * * * * * * * * * *

Help is on the way, dear reader.

MONEY magazine to the rescue. "What Every Investor Needs
Now....Answers to all your questions," promises the Special
Issue for September. We have a lot of questions, so we
decided to have a look...

"How bad is it?" was a decent first question.

"We have a crisis of confidence," say the Money folks.

"The economy is basically sound," writes Amy Feldman as if
she had a clue, so "why is the stock market sinking
relentlessly? And what will it take to turn things around?"

MONEY has no idea. "We think there are at least two
important reasons for the market's latest woes," writes
Feldman, "fear and valuations." But she doesn't mean that
stocks are still much too expensive for a bear market
bottom, but that investors have lost confidence in earnings
reports. "For the market to begin to rebound, investors
will need to get comfortable with investing again," she
writes.

What will it take to make investors comfortable?

"Clear signs that the market's continuing problems won't
end up leading the economy into a double-dip recessions..."
and "signs from regulators, legislators and prosecutors
that serious reforms will be put into place..."

Heh...heh...keep 'em hoping...keep 'em believing... that's
what MONEY and the rest of the financial press seems to be
doing. Do these people really think a few new regulations
and a few show trials can end a bear market?

"When will the bear market end?...Are stocks cheap now?
...Is our financial system broken?..." the MONEY team has
an answer for everything. And on almost every page is
another photo - a smiling couple from Cincinnati, a retired
man in Virginia, a family in St. Louis - all of the poor
hapless patsies sure that stocks won't let them down. "Be
reasonable," the magazine seems to say. "Be patient."

"Keep a diversified portfolio, stay in stocks for the long
run, and you'll be fine."

But nowhere in this entire Special Issue do they raise the
questions we most wanted answered: What is really caused
the boom....and what is behind the worldwide falloff in
equities? And our favorite: Is America following Japan into
a long, soft, slow depression? Finding no answer in MONEY,
we'll have to answer it ourselves... more below...

Meanwhile, Eric Fry is taking a few days off....so the
latest financial news from Addison Wiggin, in Paris....

*******

Addison Wiggin in the City of Light...

- In two days last week - Thursday and Friday - the Dow
gave back more than 400 points and all but wiped out last
Monday's wild rally gains. Nor did the Nasdaq or the S&P
500 fare any better. They shed 32 and 20 respectively on
Friday...

- If the twentieth century provides us with any guidance,
we can expect to see these kind of wild rallies in both
stock prices and hope... but we can also expect the bear
market to take us back to a point lower than from whence
the bull market began.

- For example, from 1923 to 1929 the Dow surged up nearly
450%. It started it's bull run at about 85, climaxed at 381
in September of 1929, then began it's descent. Despite
rallies in 1930 and 1931 that boosted the market as much as
35%, the Dow reached a low point of 41 in July of 1932...
less than half of the level it began 9 years before.

- "Our modern American bull market," writes
CBSMarketWatch's Thom Calandra, "began in 1990 with the Dow
at 2,365. When the 10-year rally began to unravel in
January 2000, the Dow was almost 12,000. A total gain of
almost 500%."

- The similarities are a bit eery, aren't they? If the
trend continues you might expect the Dow to drop to... half
of where it began... or, 1,185. Frankly, I had to check the
math a couple of times. A drop that far is simply too
preposterous to consider. Or is it?

- Well, just for the sake of being preposterous... that
would mean the Dow, which opened today at 8,313 would have
to lose another 7,128 points. And investors would lose
another $7 trillion or so. Of course, that's just a back-
of-the-envelope calculation... but it would take years for
that kind of carnage to works its through the economy.

- Friend and fellow scribbler John Forde (that's Forde with
an 'e') tells me that, among other things, if you spent a
dollar per second, 24 hours a day, it would take 242,904
years and 2 months before you spent your wad... $7.7
trillion in pennies would weigh about 23.7 million tons and
fill the entire Chicago Sears Tower... three times...(7.7
trillion is, in fact, exactly 39 times the total number of
hamburgers ever REALLY sold by McDonald's.)

- During the late great Tokyo bubble of '89 things were
even more out of hand. The Nikkei 225 exploded after
achieving the mind-numbing height of 39,000... a point at
which it was trading at 100 times earnings. "Once again,"
offers Calandra, "[after the collapse began] numerous
rallies ensued. The Nikkei rose almost 20 percent months
after the December 1989 zenith. About a year later Japan's
benchmark index rose by more than a third in a five-month
span, into the spring of 1991.

- "As we know, the Nikkei hasn't stopped skidding,"
Calandra continues, "It's been as low as 9,420 in the past
year... the number to remember, though, is where the Nikkei
started it's amazing run - 6,850 in 1984 - before reaching
its pinnacle 39,000."

- Investors are now beginning to feel like maybe "10 years
ago in Japan" was a) not all that long ago and b) not that
far away.

- As we reported in the Daily Reckoning late last week,
Stephen Roach has cautiously gone on record warning Morgan
Stanley's clients that a double-dip recession is, perhaps,
imminent. Folks in the farm belt, might be thinking
something like: "well, duh." In fact, one Daily Reckoning
reader writes:

"The corn crop is 88% destroyed and other crops are not
doing well either. Drought. The farmers say they are in a
depression, not a recession. 113 degrees almost every day.
Hardly ANY rain for almost 3 years. Grasshoppers everywhere
and they are HUGE. We've had a beautiful 15 room Victorian
house for sale for almost 3 years - can't sell it although
the price is $35,000 under appraised value, and can't even
rent it at $650 a month!

"Everything seems just like my grandfather told me about -
the depressions he lived through. He was born in 1869 and
died in 1952 and lived through several.

"Denial and greed seem to be the strongest emotions in the
human being. People who prefer to live in reality are NOT
liked (like me!). Some tell me, 'I don't want to hear it
ANYMORE,' and their money is still disappearing."

*******

Back in Baltimore...

*** Whew, it is hot. Yesterday, in France, we were wearing
sweaters outside. Here in Baltimore, we can barely go out
at all.

*** Catching up on family news, I discovered a cousin who
had lost his job and was forced to move in with his wife's
parents. Hard cheese for them. We can't help but wonder how
many people are nearing the same desperate straits... "In
the typical household," writes the Mogambo Guru, "both
adults are working, both adults have tapped out their
credit cares, both adults have borrowed against all the
equity in their home, and now they simply have run out of
money and fresh sources of credit to go shopping. Or even
pay the bills."

*** Vanity, vanity...all is vanity.

"The world is as it should be," said a friend at dinner
last night. He was referring to the habit of many wealthy
people to buy brand-name designer products at preposterous
prices.

"I was just in Europe with friends," he explained. "There
were people on the streets selling what looked like Gucci
bags for $25. They were such good knock-offs you couldn't
tell the difference. Logically, rich people should buy
them. Because they don't have anything to prove. People
would assume they were real, anyway. Only poor people
should buy the real ones - and get some sort of proof of
authenticity that they could show off to their friends."
"I asked one of my rich friends why she didn't buy the
cheap ones. 'I wouldn't be caught dead with a knock-off,'
she told me."


* * * * * * * * * * * * * * * * * * * * * * *

IN GREENSPAN WE TRUSTED
by Bill Bonner

"The mildness and brevity of the downturn are a testament
to the notable improvement in the resilience and the
flexibility of the economy," said Alan Greenspan to a
congressional committee recently.

"The fundamentals are in place," he continued....as the
stock market rose...."for a return to sustained healthy
growth: imbalances in inventories and capital goods appear
largely to have been worked off; inflation is quite low and
is expected to remain so; and productivity growth has been
remarkably strong, implying considerable underlying support
to household and business spending as well as potential
relief from cost and price pressures."

Mr. Greenspan spoke with no smile on his face. Nor were his
fingers crossed. He said what he said as though he meant
it.....as though he believed it himself.

Certainly, his listeners seemed to believe it. They looked
grave when the cameras turned in their direction. They
posed silly questions prepared for them by earnest
staffers. And laughed at their own dull jokes as if they
had botched lobotomies. None seemed to have the slightest
idea of how ridiculous and pathetically insipid the whole
show really was.

The spectacle seemed designed for the editors of MONEY
magazine...to reassure the Shareholder Nation that it faced
nothing more troubling than a temporary 'failure of
confidence' on the part of skittish investors...and that as
soon as a few miscreants were behind bars the whole nasty
episode would soon be forgotten. No one was rude enough to
point out that it was the star witness, Mr. Greenspan
himself, who bore much of the blame for the bubble and its
aftermath. Nor did anyone seem to wonder how the nation's
central banker could correct his mistake.

Stock market crashes produce more noise than light. After
the crash of '29, for example, similar hearings were held
by similar groups of Washington hacks. That was before the
days of air-conditioning, though. And few matters were
important enough to sweat through a summer in the nation's
capital. But when the weather softened, the pols turned up
the heat for the benefit of the rubes and patsies in the
home districts.

Albert Wiggin, head of Chase National Bank, no relation to
our own Addison Wiggin, was discovered to have shorted his
own shares and made million. Sam Insull presided over the
Worldcom of the '20s - Commonwealth Edison - a $3 billion
utility whose books were audited by Arthur Andersen. He
fled the country when the cops came looking for him. And
poor Richard Whitney, who had once headed the New York
Stock Exchange, went to prison for embezzling as much as
$30 million from the NYSE pension fund.

Mr. Greenspan, by contrast, is still greeted in
congressional hearing rooms as though he knew what he was
doing. The politicians - and MONEY magazine readers - are
still counting on him to save the world as we know it. If
only he could...

But what can he do? He can raise the fed funds rate. Or he
can lower it. He can loosen credit...or tighten it. Raising
rates is hard work for a central banker. In recent years,
only Paul Volcker seemed to have the stamina for it. At the
time - in the early '80s - people were so upset that they
burned the fed chief in effigy. Senators fulminated against
him as if he were old Beelzebub himself. But Volcker held
the patient down and gave him the medicine he needed
anyway.

Greenspan had a much lighter time of it. Every occasion
seemed to call for easier money...and the nation soon
became used to it. The credit-fed boom became as tedious as
the San Diego weather forecasts. Is it any wonder consumers
stopped saving for a rainy day? Even after last year's 9-
month recession consumers still did not get out their
umbrellas.

A recession is supposed to lower consumer spending and
increase savings levels. But, it did not. Instead,
consumers borrowed and spent more than ever before,
confident of clear skies tomorrow. Instead of being
alarmed, Mr. Greenspan told Congress that this reckless
behavior was "an important stabilizing force for the
overall economy." No one was heard to guffaw or laugh.
But consumers are now nearly as helpless and desperate as
the central bank. Paul Kasriel of Northern Trust points out
that for the first time since WWII, the average net worth
of Americans is going down. It rose by about $3,700 per
year in the last few years of the '90s. But in the last 2
years, it has fallen by about $1,000. The stock market has
wiped out between $5 trillion and $7 trillion.

Only real estate prices seem to defy the general
deflationary trend....the latest headlines from Denver and
other cities suggest that that bubble may finally have
found its pin too.

"As consumers finally begin to realize that a continuous
plunge of the stock market is burning what they considered
their reserves for retirement," writes Dr. Kurt
Richebacher, "they will return to saving from their current
income...It will be the final fatal blow for the recovery
and economic growth."

And what of Mr. Greenspan; can he not save the
situation...by lowering the fed funds rate
again....loosening credit even more...or maybe even
printing more dollars?

He can do nothing else. Raising rates would kill the
mortgage refinance business - and stop consumer spending
abruptly. The consumer is the last man standing in the U.S.
economy. Greenspan must do all he can to hold him upright -
even if he is already dead. "The Fed ...is stuck in a
policy that requires its figurative printing presses to
work 24/7" explains Grant's Interest Rate Observer.

Making a long story very short, the Fed's is increasing the
money supply of dollars at more than 11% per year. Its
major competitor - the European Central Bank - is going in
the opposite direction; the ECB's balance sheet is
shrinking by nearly the same number.

But making more credit available to people who are already
deeply in debt is like offering a tuna sandwich to a
drowning man; it is not the right moment.

"Within the next few months, it will become the general
recognition that the U.S. economy is on the verge of
sliding into a prolonged, severe recession," concludes Dr.
Richebacher in his latest letter. "This spells
unprecedented havoc to U.S. stocks, bonds and the dollar.
Under these circumstances, there is but one highly
lucrative investment for dollar-based investors: German and
French government bonds."

Bill Bonner
Horatio
(08/05/2002; 22:40:05 MDT - Msg ID: 82359)
Ron Insana.....and the give it up or go broke policy
When he was asked a question today.Is U.S. going the way of Japan? Ron replied ...the Fed still has some room to move,they can take interest to "zero" and after that "they can print money".....how comforting.....
How does that mesh with a strooooong Dollar policy?
My question is in order to get exports moving do we devalue ?
If thats to be an advantage ,we must devalue against another currency that trades with us ,no?That begs the question which currency is going to allow the Dollar to depreciate against it?
except for the Yen? IT ain't gonna happin baby...
Its a race to the bottom..Only those economys that are resource based will go up.Australia,Canada,Russia is a maybe.
They can all depreciate against gold,but there is no trade advantage.We are doomed if the economy slides.What neighbor will we beggar?The worlds resources are priced in Dollars ,we cannot export food,coal,gold at an advantage.Our final choice will be ...give up being the worlds reserve currency or go broke !!!!
sector
(08/05/2002; 22:47:38 MDT - Msg ID: 82360)
Harrison's Headache
Has to do with rigged notional valuationsJPM carries $23 Trillion in various flavors, interest rate, commodities, debt etc.

They boast they have a better model with hubris similar to those who led the internet "Revolution". Their model simply understates their risk.

Like General Motors banking a 10% pension fund performance, JPM banks that gold can't rise more than ten dollars from here and the dollar will always be where it is today.

A good part of their model is based solely on a rigged gold price...in fact the model was created ON:Y with pog under their thumbs.

Like LTCM they will never see the 4 standard deviation blindside. Like all crooks they have forgotten a variable or two.

The massive, unrelenting mutual fund liquidation trend has only now begun to accelerate. The bubbles added armies of government salaries which the politicians don't have the courage to fire so state budgets are shot.

Everybody knows it. That's their 4 standard deviation event. The Steve Forbes, CNN interview Sunday, party-line "Tax Cuts" bluster went over like a dead albatross on a white linen table cloth.

Everybody knows what's ahead...in their hearts... if not their minds.


Pizz
(08/05/2002; 22:50:07 MDT - Msg ID: 82361)
R. POWELL
RE: Derivatives

I'll tackle your post (or at least attempt to) in the am.

Little bit too mellow right now (smile).

Pizz
Black Blade
(08/06/2002; 00:23:50 MDT - Msg ID: 82362)
U.S. Says Countries Should Expand Strategic Oil Reserves
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad_topright_energy&refer=topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_all&bt=ad_position1_energy&tag=energy∣dle=ad_frame2_energy&s=APU6m3xQoVS5TLiBT
Snippit:

London, Aug. 5 (Bloomberg) -- U.S. Energy Secretary Spencer Abraham said he's encouraging other oil-consuming countries to expand petroleum reserves as a buffer against disruptions to crude oil imports. Consuming nations should examine their policies as part of an overall energy security rather than in relation to any ``specific matter,'' Abraham told reporters. The U.S. uses a quarter of the world's oil and imports about half its supply. President George W. Bush said last month the U.S. will ``use all the tools at its disposal'' to remove Iraq's leader Saddam Hussein from office. Any military action in the Persian Gulf is likely to disrupt shipments of oil from a region that supplies a third of the world's oil. ``We have suggested that as we are moving to fill our reserve, others should consider making sure that their reserves are adequate,'' Abraham said during a briefing at the International Petroleum Exchange in London.


Black Blade: It sounds like war preparation to me. The word is out to get prepared because the US is making no promises. Clinton dipped into US strategic reserves putting the country at risk in a treasonous act in order to help the electoral chances of Forest Gump (aka Al Gore). The advice is good though � get prepared as the global economy is toast. Get out of debt, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

Black Blade
(08/06/2002; 00:34:37 MDT - Msg ID: 82363)
Asia Starts Off Ugly
http://quote.yahoo.com/m2?u
It appears that we will soon be talking about Hang Seng and Nikkei 225 going sub 9,000. Asian markets are tanking hard tonight. There is nothing, absolutely nothing positive in the markets that can encourage a positive finish. It has been quite "entertaining" so far. I expect much more "entertainment" in the coming months.

- Black Blade
Spartacus
(08/06/2002; 01:21:07 MDT - Msg ID: 82364)
Saudi Arabia
http://www.washingtonpost.com/wp-dyn/articles/A47913-2002Aug5.html
By Thomas E. Ricks
Washington Post Staff Writer
Tuesday, August 6, 2002

--A briefing given last month to a top Pentagon advisory board described Saudi Arabia as an enemy of the United States, and recommended that U.S. officials give it an ultimatum to stop backing terrorism or face seizure of its oil fields and its financial assets invested in the United States.--

Around The Corner
(08/06/2002; 01:40:51 MDT - Msg ID: 82365)
RE: U.S. Says Countries Should Expand Strategic Oil Reserves
Black Blade:

Thanks for the link! I can always count on you to post the best of the best. Now if only we could somehow prevent Dubya from escalating the "war on terra" into a full-blown WWIII. Doesn't look possible considering that the crony capitalist system Dubya champions is crashing down upon all of our heads and there's little if anything he can do to stop it.

With the US and world economy implosions taking place on his watch, Dubya's only chance at re-election in 2004 is to make sure the US is so deep in war that the electorate would be too scared to change horses in mid-stream. Therefore, I'll boldly predict that the US will be deep in the middle of a major war during the 2004 election cycle.

My only questions are:
1) Which country/person is history going to blame for starting it?
2) Will the US be loved, honored, feared, held in contempt, or hated by the rest of the world after it's over?
steady
(08/06/2002; 01:57:11 MDT - Msg ID: 82366)
future reference!
http://www.imf.org/external/np/sta/ir/usa/eng/curusa.htmahem um sir KNOBLE NIGHTS could this be of use?
Golden Bear
(08/06/2002; 02:58:26 MDT - Msg ID: 82367)
Bank of America secret bailout request rumour....
http://www.fromthewilderness.com/free/ww3/073002_cbs_story.html"... Last week, FTW received information from three credible and experienced sources that the Bank of America had made an urgent and secret appeal to the Federal Reserve for an emergency bailout. We are watching all of these developments closely and will have updated reports in the near future...."

--------------------
One to watch.....
Black Blade
(08/06/2002; 03:01:58 MDT - Msg ID: 82368)
Market Indicators
http://www.mrci.com/qpnight.asp
The euro is crashing. I never did think that the euro was viable. How could 15 or so different countries with different systems (political and financial) ever agree on much of anything. The collapse of the euro is inevitable in my opinion. It was a stupid idea anyway.

Meanwhile gold pulls back, US market index futures are positive, the USD is charging higher and oil is falling. In other words, quite "entertaining".

- Black Blade
Belgian
(08/06/2002; 03:28:39 MDT - Msg ID: 82369)
WHAT A DIFFERENCE AN HOUR (not a day) MAKES......
Sir Towncrier Plaza/Louvre reposting # 82309 was *perfectly* timed !!! Bravo !
POG stopped at exactly 310$ and ...we have euphoria here in Euroland with big smiling / shouting financial reporting. Big percentage gains on crucial (!!!) stock-valuations.
Dow futures up 100 plus points...POO down(sub 25$ resistance)...US$ up and targetting the �/$ > 0,95 (?).
Whoehaaa.

Thanks for yesterday's responses and many great postings (and compliment).
Made a print out because it's to much for digesting it in one day. Thanks.

Today's action...Flash in the pan or something more...? W'll assess that somewhat later.
Black Blade
(08/06/2002; 03:30:13 MDT - Msg ID: 82370)
Jerky Futures Buying
http://www.mrci.com/qpnight.asp
The trading bizarre patterns on the US market futures indicate a single or perhaps very few traders are taking humongous bets on the market open in NY this morning. There is no news so this suggests either one big gamble or some insider trading. Of course there is that other possibility that the President's Working Group on Financial Markets are up to their old tricks again. About an hour and half ago futures were decidedly negative and now have gone soaring to the positive and yet there is no news. Hmmm...

- Black Blade
Black Blade
(08/06/2002; 04:05:47 MDT - Msg ID: 82371)
IMF Sees Gloomier Economic Outlook
http://biz.yahoo.com/rb/020805/economy_usa_imf_4.html
Snippit:

WASHINGTON (Reuters) - The slump in equity markets, a host of accounting scandals and an uncertain outlook for business profits have increased the chances the U.S. economic recovery will be weaker than expected, the International Monetary Fund said on Monday. In its annual review of the world's richest economy, the Washington-based lender gave a fairly gloomy assessment, noting shaken confidence, a much bleaker budget picture, overly optimistic Bush administration economic forecasts and trade decisions that were counterproductive. In preparing the report, the IMF said it had envisaged the U.S. economy would expand by 2.5 percent this year and by 3.25 percent in 2003 after a tepid 1.2 percent advance in 2001, when the economy tipped into mild recession. "However, recent data releases and other developments, including the sharp decline in equity prices in recent weeks, have exacerbated the downside risks to the outlook for both personal consumption and business investment," the IMF said. "The likelihood, therefore, is that downward revisions to the growth projections would be made in the ... forthcoming World Economic Outlook," the lender said, referring to its next round of global forecasts, to be published in late September.


Black Blade: The IMF also suggests that the US government raise taxes. Nevertheless, the US economy is on the ropes and the markets should continue to plunge even though the futures suggest a strong opening. The die is cast and the IMF can make all the stupid suggestions they want.

Old Yeller
(08/06/2002; 04:06:29 MDT - Msg ID: 82372)
King Dollar

Leaps out of his deathbed and rockets through the 50dma.

Belgian,many thanks for the great posts of late.
Black Blade
(08/06/2002; 04:45:47 MDT - Msg ID: 82373)
Gold Drops

Gold drops $2.50 an ounce on soaring US dollar - actually crashing foriegn currencies. After all, all currencies are weakening, though the US dollar is holding up somewhat better. Also the rocketing US market futures are drawing some institutional interest away from gold and other asset classes.

- Black Blade
Belgian
(08/06/2002; 05:10:45 MDT - Msg ID: 82374)
The Bond Gods and their Trillions.....
US$ bonds are "heavely" priced >>> overpriced in rate cut anticipation >>> at a Top ?
With M. Kosares "Financialization" in the back of the head...How will all these Trillions leave the Top (in progress) in bond valuation ? Cash ? > stocks ? > Gold ? or roll over to other bonds (longer maturities) ? or another currency ?

Bond Gods (holders) only have two things to worry about :
1/ Depreciation of the currency in wich their bonds are denominated.
2/ Default of the bond issuers. Declining capacities to pay back (redeem).

And here we are in the financialization-trap. A global economy, totally overshadowed, by the evils of financial greed and falsification.
The road to Gold, firmly blocked. Currency battles wich are totally un-related to economical fundamentals. Concerted IRs manipulation beyond reality. A "GIGANTIC" cover up of 1/permanent depreciation 2/virtual defaults.

Confetti might shift massively out of bonds into stocks ? What a releaving prospect. But how many times can one shave an already shaved sheap. Catapulting stocks >>> rise interest rates >>> shift back from hyper valued stocks back into higher yielding (declining) bonds ??? Wouldn't this be nice ? Financialization merry go round. The music is believed it will never stop. We keep on dancing with no economic chairs left. And more and more dancers (derivatives) are joining the feast.
That's my interpretation of today's umpthiet event. But !!!!
more and more confetti fractions, slide stealthly into Physical Gold.

All fiscal and monetary tools are only at financialization's services. Debt holes are to be filled with other debt holes. That's the financial brotherhood's job. Keep on servicing the system with more and more derivatives. Manage the virtual valuations of all paper collateral at your convenience !!!! Create more derivatives against that virtual paper collateral and "arrange" the convertibility at maturity or roll over time. Yes indeed Sir Kosares > Financialization in absolute hyper-form!!!

Stock prices (JPM/C) Bond prices and exchange rates are sub-ordinated in function of the maturity dates of their derivatives (dogs and dog's tails). Crazy volatilities might even go to double digit percentages. Absolutely not related to any part of the real economy anymore. But look at Gold's extreme "stability" within this chaos !!! DON'T MESS WITH GOLD !!! A warning ???

Financial institutions are in urgent need of more and intenser volatility as to financialize their precarious condition. New *fantasia* financial products are created with "convertabilty" against unknown future valuations of the collateral, for the buyers/consumers of these products.
Very complicated, over engineered financial products where even the inventor of it is uncertain of what will happen with it. Uncertain about the final outcome (succes) of the engineering.

ONLY, easy to understand, Physical Gold, can be accumulated further, quietly and serene. It is this obscene financialization that will cause the interrupting, crash-fall of globus economicus .
As TG/FOA so aptly corrected...not speculation but gambling ! Today, I'm convinced w're even further than gambling. That's why I used the word "obscene".

How many papers increased dramatically in virtual valuation, only hours after a serious (???) downgrading ? Who is fooling who here ? Siemens is this morning's example.
DAX up 3% plus within an hour.

What difference an hour makes....
Pizz
(08/06/2002; 07:06:19 MDT - Msg ID: 82375)
R Powell - Notional Values of Derivatives
Notional value does change with the underlying change in value of instrament, assuming there is a market for it. If not, contract or strike prices (extimates??) may be used - something is.

If you have dissimilar hedges it is possible to have extreme exposure, expecially with illiquid markets. I'd be willing to bet that when some of this stuff is marked to market, if it is, convienient estimates of notional values may have been used. Who knows? JPM is very selectively transparent.

As far the 354 gold derivative meltdown price, I'd venture a guess that this may be someone's estimate of the price that some of the risk control models say gold has to be purchased to mitigate risk in the position, which if bought works against the position, triggering more short covering, etc.

Without full disclosure, we will never know for sure.

--------------------

Market's are just a bit volitile???? Scary, cause my read is that they are getting very thin also. Crash time? Money looks like a herd of scarred rodents all trying to get into the same holes and the same time, and then finding dead ends and then trying to get out and find a different hole.

Pizz
Siochaina
(08/06/2002; 07:31:29 MDT - Msg ID: 82376)
Saudis now our enemies
http://www.washingtonpost.com/wp-dyn/articles/A47913-2002Aug5.htmlPartial:
Briefing Depicted Saudis as Enemies
Ultimatum Urged To Pentagon Board


By Thomas E. Ricks
Washington Post Staff Writer
Tuesday, August 6, 2002; Page A01


A briefing given last month to a top Pentagon advisory board described Saudi Arabia as an enemy of the United States, and recommended that U.S. officials give it an ultimatum to stop backing terrorism or face seizure of its oil fields and its financial assets invested in the United States.

"The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot-soldier, from ideologist to cheerleader," stated the explosive briefing. It was presented on July 10 to the Defense Policy Board, a group of prominent intellectuals and former senior officials that advises the Pentagon on defense policy.

"Saudi Arabia supports our enemies and attacks our allies," said the briefing prepared by Laurent Murawiec, a Rand Corp. analyst. A talking point attached to the last of 24 briefing slides went even further, describing Saudi Arabia as "the kernel of evil, the prime mover, the most dangerous opponent" in the Middle East.

The briefing did not represent the views of the board or official government policy, and in fact runs counter to the present stance of the U.S. government that Saudi Arabia is a major ally in the region. Yet it also represents a point of view that has growing currency within the Bush administration -- especially on the staff of Vice President Cheney and in the Pentagon's civilian leadership -- and among neoconservative writers and thinkers closely allied with administration policymakers..."

Note: Just what we need ...more declared enemies....is this a warning shot to Saudis ...or plain idiocy...or both

I still hold that Iraq oil fields are what Bush & Co are after ...if Saudis fall (and we can push as we did Shah of Iran) then we will "have to protect" our national interests...get Sadam & oil in one shot...of course Saudi oil fields would be good too but it appears the populace of Iraq would likely be more pro American than the strong fundamentalists in Saudi Arabia
Paper Avalanche
(08/06/2002; 07:49:20 MDT - Msg ID: 82377)
SM this morning
They are "popping the clutch" this morning with the predictable short covering rally.

400 up one day
700 donw the next five

So it goes.

Paper Avalanche
a nation of one
(08/06/2002; 07:56:23 MDT - Msg ID: 82378)
82377
If it was predictable, why didn't someone predict it?
USAGOLD
(08/06/2002; 07:59:56 MDT - Msg ID: 82379)
National, or is that Notional, Crisis
RP: "Are you saying that big companies and/or banks use the value or worth of their companies (as determined by share price and bond ratings) as margin instead of cash??"

MK: This is a house of cards built on credit ratings. I didn't know about it until the Enron affair, but there are automatic loan call provisions within the various counterparty, or bank loan, agreements. What struck me in the Baritoromo interview is that this is an issue with JP Morgan. Until I saw that interview, I was unaware that JP Morgan's credit rating was in direct jeopardy. THIS IS A BIG ISSUE!! If JP Morgan is forced to make principle payments through loan trigger clauses, liquidations of primary assets will follow. This may be what already happened in the drop of gold from $325 to $305. It could have been JP Morgan liquidating gold accounts in the London market to cover loan calls based on their credit rating dropping. And if its happening its just a start. As we saw with Enron, this is a slippery slope which might lead to eventual bankruptcy. I'm more than one analyst is concerned about the very same thing. The question becomes to what extent the Fed is willing to play lender of last resort if someone like JP Morgan goes to the wall. We are not talking about a sacrifical lamb like Enron here. We're talking about the entire banking system and one of its flagships. What we are seeing is a 21st century version of the Rollover Threat where you have one entity, Enron, causing the weakening of a second entity JP Morgan (and possibly Citibank), who in turn get downgraded by Moody's, etcetera, on down the line. . . . . . . .The question is can the Fed stop it. There's no question it will try in that this -- and not managing the interest rate -- was the real reason for establishing the Fed in the first place.

One of the issues Kevin Phillips brought up in the Russert interview was the lack of oversight and regulation in the financialization process. It was his contention that these things cycle, and we pay the price eventually for the excesses in the way of a gut-wrenching correction, which leads to a new host of regulations, and the whole nine yards. I believe that the greatest mistake that Greenspan made in his otherwise stellar Fed chairmanship was turning a blind eye to the growth of the derivatives' markets both here and overseas. His public position was that such regulation was an intrusion on the free market for financial instruments. In reality, the over-use of derivatives turns out to have been an imposition on the free market -- in fact diminishing the free market. He (and we) will pay the price for this overight (if not blunder). Some will say that it was not his responsibility to carry the standard for derviatives' regulation, but in my mind, he was the only individual capable of pulling it off. Therefore, I view it as his personal responsibility. Greenspan is much too shrewd to have missed the significance and dangers. After all, he recognized the dangers of excesses in the stock market long before most on Wall Street and stated so publicly with his "irrational exhuberance" declaration. If he had been in the private sector, I believe he would have broken ground on the issue -- because he truly does believe in the free market. Unfortunately, the free market is now going to have its retribution and the dangers to the system as a whole are much worse than if financial leaders had acted against the derivatives' cancer much earlier. It was the use of derivatives that shaded the financial world and made it possible to pursue the balance sheet excesses we all know about at this juncture -- including the ones now threatening the larger banking institutions. Rumors spread that JPM, Citibank and BankAmerica are all in trouble. . . .and maybe that's why Fed chairmen and Presidents decide to have a power breakfasts.

I'll ask the question Wall Street is afraid to ask: What will be the national policy on the building financial crisis? Or are we just going to let it happen and pretend that the mid-term elections and Iraq are proper preoccupations?
USAGOLD
(08/06/2002; 08:17:34 MDT - Msg ID: 82380)
Correction:
"I'm more than one analyst is concerned about the very same thing."

Should read:

"I'm certain more than one analyst is concerned about the very same thing."
steady
(08/06/2002; 08:20:22 MDT - Msg ID: 82381)
waviers
yesterday pg&e was given waviers from the credit calls that where due, due to its stock price and credit downgrades. so they can and will make the rules up as they go along. look for more waviers as things unravel.
by the way today we mourn the use of the nuclear bomb in /on japan!
R Powell
(08/06/2002; 08:31:23 MDT - Msg ID: 82382)
Notional value
From Black Blades post of yesterday, quoting the Greenman, thanks BB.


Of course, notional values are not meaningful measures of the risks associated with derivatives. Indeed, it makes no sense to talk about the market risk of derivatives; such risk can be measured meaningfully only on an overall portfolio basis, taking into account both derivatives and cash market positions, and the offsets between them.

I'm just back from finishing yesterday's readings and see more here addressed to me. Thanks. I'm already tardy in doing today's chores and have to go. Please allow me to catch up when life's daily necessary work is done.
Rich
steady
(08/06/2002; 08:32:55 MDT - Msg ID: 82383)
question regarding bonds/debt in chile.
www.emol.com Chilean Government Studies Issuing New Bonds


SANTIAGO (Dow Jones)--The Chilean government is studying the possibility of issuing new sovereign bonds, El Mercurio reports, citing Finance Minister Nicolas Eyzaguirre. Chile might need to issue fresh debt to finance a probable budget deficit in 2003, Eyzaguirre was quoted as saying.

this lil hobits question is would issuing new debt at this point be an attempt to forestall the domino effect that other countries currencys might be having in chile?
or if they truely have a budget deficit why not just cut services? see thats the problem, living large off of borrowed money! when will the world wake up and live within its means? live small get your house in order and be sure to operate below the frost line. : i liked that line. got gold?
Belgian
(08/06/2002; 08:49:38 MDT - Msg ID: 82384)
Standard....What standard ?
Are we since 1971 still on a standard or on no standard at all ? A standard being a Universal accepted "reference". If we accept and act on a paper dollar standard, the dollar-paper still needs to be referenced to something tangible. Crude Oil is supposed to have replaced Gold. And we have wars in the process against or for those two references, Gold and Oil. Both manifesting a very different price volatility. POO more volatile than the relative stable POG.
A standard or reference is imo, rather stabilizing than volatile. Why is the US$ more volatile against the oil-reference in function, rather than volatile against Gold, *supposedly* out of function ? HEHE !

Third possibility : We are on no standard at all and create an ongoing financial standard at the ruler's convenience ?
And is it here we have to frame the coming ME-wars into ?

Remembering Ari's "personel standard"...I'll keep on accumulating when succesfull in generating more standardless confetti. If nobody cares about a standard anymore, w'll create our own. Ask the latinam's, why it's better to be prepared.
Belgian
(08/06/2002; 09:18:33 MDT - Msg ID: 82385)
USAGOLD : Notional > National > INTERNATIONAL CRISIS!! #82379
US and Euroland's financial stock values (banks/insurances/funds) were (still are) imploding AND artificially resussitated/oxygenated, today. They went under the frost line (goodie). JPM/C bookvalue at 21$ as Deutche bank quoting at 54� with bookvalue 50�. It is not JPM/C alone that is freezing and risks to be re-rated.
Not only the FED, but also the ECB is urged to play its role as lender of last resort. FED plus ECB are trying to stop it "together" and therefore have an armistice on their currency war (temporary though).

Greenspan can't hide behind the excuse of non intervention into the (false) Free Market. He is only the front of the financial brotherhood. A brotherhood it is. In analogy with the alliances against the ME. Stop and sorry for my brusk intervention!
sector
(08/06/2002; 09:42:52 MDT - Msg ID: 82386)
@USAGOLD What Did Greenspan Know...
...and When did he know it?Below, you wrote:

"I believe that the greatest mistake that Greenspan made in his otherwise stellar Fed chairmanship was turning a blind eye to the growth of the derivatives' markets both here and overseas."

Credible evidence will be presented in the coming weeks that Mr. Greenspan not only turned a blind eye but KNEW derivatives would expand to gargantuan dimensions because he was one of a few that CAUSED them to grow as part of a "Master [of the Universe] Plan".
Belgian
(08/06/2002; 11:33:04 MDT - Msg ID: 82387)
@ RP > The POG 354$ question
An attempt for contributing to the answer on this question.
Banks and other financial institutions are creating derivatives on underlying papers of wich they have a great degree of certainty, where and in what price-zone they will be at the maturing of the derivatives. Imagine CPM having a telephone line, telling him where POG will be at what date.
Banks (and corporations) are doing this with their own shareprice. Now, what happens when those left to make free choices, spoil the whole, almost certain, set ups ? The derivatives are in danger and the creators (sellers) of those derivatives have the positions turned against them.

354$/ounce is a critical point where the free participants in the less free market get strong buy signals, and could therefore disturb the managed POG and the underlying derivative masses. We started to realize that much of this derivative action is played into the unreported dark boiler-rooms. Not the slightiest idea of the REAL magnitude of these derivatives. Only that 354$/ounce is a major trigger point for unwelcome Gold guests/buyers. The hyperconcentration of so much confetti in brotherhood's hands, made this market more and more un-free. One day, enough free marketers wan't play anymore and leave. This is happening now imo. Liquidity will dry up and all towels are to be thrown into the ring. Schultze and Sinclair, certainly have more details on the outstanding derivatives (mine forward sales) and confirms this 354$ critical POG point with the chartist's opinion/interpretation.

As an aside : For what exactly is aid-money used in Latinam ? Has Turkey already turned things around after its latest debacle and massive aid ? The fraud is systemic and on a bigger and bigger scale as if there were no tomorrow.
iosdan
(08/06/2002; 11:48:27 MDT - Msg ID: 82388)
Golden Bear - B of A Post
Speaking of B of A, I have my 401K thru them and their web page for referencing one's account data has been inaccessable since Thursday, August 1 ????????

One other note...Since no one has mentioned it here today, I heard a CBSmktWATCH commentator yesterday on KCBS (San Fran) being interviewed. He said he has word that the Fed is going to lower interest rates again, possibly (3) ea 1/4 point increments thru the end of this year, with the first being announced next week. My take is that the dollar and the SM going ballistic due to this (as yet) unannounced news. Seems they want to keep the housing bubble going and risk foreign investment pull-out.

IOSDAN
USAGOLD / Centennial Precious Metals, Inc.
(08/06/2002; 12:02:35 MDT - Msg ID: 82389)
Gold: When it absolutely positively must be there (and still have value) overnight

Golden Goal




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

-- R. Strauss

Socrates964
(08/06/2002; 12:22:40 MDT - Msg ID: 82390)
Comments
Iosdan - why should another rate cut push up the stock market, except temporarily - Greenspan has already cut 400bp, we've had our 12-month lag for these to start working - and how much good has it done equity prices?

On Brazil rescue package - as I mentioned before, the interesting thing has been the commercial market rate moving to a 10% premium to the black market rate (it normally trades at a 5-10% discount) - this suggests corporates trying to withdraw funds/pay down dollar debt that they cannot renew. It wouldn't surprise me either if US banks with big exposure here (C/JPM/Boston) are sending cash home from their Brazilian subsidiaries. Presumably the IMF package is going to help cover the banks' asses rather than (as O'Neill suggested) go straight to the Swiss bank accounts of corrupt politicians (I wonder about him, he doesn't seem to understand how corruption works).

In any case, I wonder whether such repatriation isn't behind the rally in the US$ - if so, it might be close to the end.

Gandalf the White
(08/06/2002; 12:25:00 MDT - Msg ID: 82391)
INACCESSABLE !
iosdan (8/6/02; 11:48:27MT - usagold.com msg#: 82388)
Golden Bear - B of A Post
Speaking of B of A, I have my 401K thru them and their web page for referencing one's account data has been inaccessable since Thursday, August 1 ????????
===
Makes one happy to be able to HOLD your YELLOW in your OWN hands -- YES ?
<;-)
sector
(08/06/2002; 12:31:17 MDT - Msg ID: 82392)
Govt eyes settlement [checking] accounts
More on the removal of savings deposit insurance in JapanYomiuri Shimbun

The government may require financial institutions to set up settlement accounts for individual customers, Financial Services Agency Commissioner Shokichi Takagi said in an interview with The Yomiuri Shimbun on Monday.

The plan is part of an effort to stabilize the transaction-settlement system before the freeze on the so-called payoff system is completely lifted in April, he said.

Takagi defined a settlement deposit as a fund to be used to settle transactions by transfer, bills or checks. The basic example of such an account is a current deposit account with no interest, he added.

His remarks likely will spark an outcry from financial institutions as many of them, especially major banks, insist they should be free to choose to introduce such accounts.

The remarks follow the government's recent decision to postpone lifting the freeze on the deposit payoff system.

Following the lifting of the freeze, the deposit protection scheme would only guarantee each depositor up to 10 million yen, plus accumulated interest, in the event that a financial institution fails.

The freeze of the payoff system on time and saving deposits already was lifted in April. Full protection of liquid deposits--ordinary and checking-account deposits--was scheduled to end next April. But the government plans to continue protecting settlement accounts of corporations.

"Financial institutions' business settlements are a significant part of economic infrastructure," Takagi said. "It's in the public interest that the process is protected by all means."

Takagi said the government wanted to study the introduction of personal settlement accounts to avoid confusion over individuals' settlement.

However, he said the deposit insurance system would be the basic financial source used to fully protect those deposits. "Public funds will never be used," he stressed.

"These new accounts won't have any interest rate," he said. "So I have doubts about a plan to charge holders of such accounts handling charges, because it doesn't seem compatible in the age of financial liberalization."

"A bill to revise the deposit insurance law has to be submitted at an extraordinary Diet session scheduled to open in October," he said. "We have to make preparations as quickly as possible."
+++++++++++++++++++++++++++++++++++++++++++

Hmmm, new bills in their currency, no more deposit insurance, favored deposit insurance for treatment for corporations...will the little guy in Japan get the shaft?

Only if he has failed to replace his/her paper with metallic assets.
sector
(08/06/2002; 12:43:15 MDT - Msg ID: 82393)
Pretty Block Trades in MDG
5,000 to 15,000 share blocksThis week someone is nibbling. Maybe they know something.

Whatever they may or may not know I have made an aggressive plea to the senior management there to hedge their $124 million cash position with repurchase of metal or their own stock.

The dollar is volatile and a conservative upper mgmt will sit back and recognize they have corporate risk in holding dollars.

Like us all.
sector
(08/06/2002; 12:53:53 MDT - Msg ID: 82394)
New Jersey Prepares to Sue Companies Over Pension Fund Losses
Bloomberg08/06 13:03

By Andrew Pratt

Trenton, New Jersey, Aug. 6 (Bloomberg) -- New Jersey Attorney General David Samson will hire outside counsel to pursue lawsuits against companies over losses in the state's $73 billion pension funds.

The state has identified at least $1 billion in pension losses that may be due to mismanagement or misleading information provided by companies whose stock was held by the funds, said Peter Aseltine, spokesman for the attorney general's office.

Outside counsel will determine if the state can sue to recover some of those losses and will be asked to concentrate on companies that are already the targets of class-action suits over mismanagement or malfeasance, Aseltine said. The state has identified 26 companies that are the subject of such suits and have caused the state at least $10 million each in investment losses, Aseltine said.

He would not name the companies the state is targeting. One company alone cost the state $250 million in investment losses, he said.

``The state has incurred huge losses that can be attributed in many instances to corporate mismanagement, misconduct or greed,'' Samson said in a statement.

Samson ordered an audit of state pension investments last month. Aseltine didn't say which attorneys the state would hire as outside counsel.
+++++++++++++++++++++++
My, my, my! Those Attorneys General...isn't politics GREAT!

Unfortunatly, Wall Street has yet to see the begining of their troubles. The average 401K holder is just now getting their July statements.

How will we know the "Bottom" has arrived? When the following names are history:

CNBC
Merrill Lynch
Goildman Sachs
JP Morgan
CitiBank
iosdan
(08/06/2002; 12:54:43 MDT - Msg ID: 82395)
Sir So Crates:Lower interest rates..." What good will it do?"
None, except short term "soma" fix for the herd. You answered my premise yourself...it's only temporary. I was pointing out the action...not the re-action/result. That silver-tongued devil Jim Puplava laid it out much more succintly and eloquently than I can in his Monday column:

***********************************************

Double Dipping

<<<<<
Consider this--for some time now it has been the belief of many that when the Fed cuts rates the markets will rebound. Will that happen this time around? With rates currently at 1.75%, what effect is lowering it going to have? The markets could very well react positively to a rate cut. Surely the media is going to pump it up and convince everyone that what the Fed is doing is right for your portfolios. What they won't tell you is that by cutting rates further, they are running the risk of further alienating foreign investors in the U.S. markets. Without foreign investment dollars the market is unable to support itself. Henceforth, the rally will, no doubt, be brief and many people will just use it as an opportunity to eliminate positions and the market will continue in the general trend downward.>>>>>>

iosdan
Mr Gresham
(08/06/2002; 12:58:06 MDT - Msg ID: 82396)
Obvious, or Oblivious?
People around the world stripped of their assets -- their SAVINGS. Americans think it's MEANT to happen to others, and of course, "It can't happen here." Borrow and play on, dudes. Some serious karma there.

(Oh, BTW, I'm seriously stuck in many/most aspects of the U.S. paper/B.S. world, too. LOTS to work on! Trying to use my "knowledge" of what lies ahead to pull myself up out of old habits. As per our discussion of Winston with Rock last week, the battle is always INSIDE yourself. Be firm, be gentle, make a bit of progress each day. It's coming, but not as fast as you fear. You won't ever be completely "ready", but a healthy state of mind will get you the last mile...)

Should I change my name to "Jeremiah"? (One of my favorite OT guys.)
Graefin
(08/06/2002; 13:29:31 MDT - Msg ID: 82397)
GAG ALERT!!!!!
Just heard on CNBC that Greenie just got crowned "Sir" by the United Kingdom! GAG!
Peace!
- Gr�fin
steady
(08/06/2002; 13:31:02 MDT - Msg ID: 82398)
greenspans controllers reward him.
*DJ Fed: Greenspan Pleased At Honorary Knighthood From UK
Black Blade
(08/06/2002; 13:36:21 MDT - Msg ID: 82399)
Knighthood For Greenspan?

It is really no big deal. The Brits hand those titles out like candy at Halloween. Heck, I think just about every Brit rock star has that title. It has become so common that there is really no great special honor to the title anymore. I think that other Brit titles (ie. Earl, Duke, etc.) can actually be purchased. Greenspan a knight - that is funny though.

- Black Blade
mikal
(08/06/2002; 13:43:24 MDT - Msg ID: 82400)
@Spartacus, Siochaina
Thanks for posting that "Saudi's are our enemy" story link, snippits, and comments. Do wonders ever cease? Watch for this to become political/military rhetoric and to grow and grow. Now this is getting interesting, because we have conflicting accounts as to US plans towards Iraq, that now seem clearer. After the next major terrorist strike, which officials like Rumsfeld assert to be inevitable, Al-Quada in Saudi Arabia could be targeted. Oil prices will rise here, especially if war, terrorism, blockades, and/or embargoes escalate.
steady
(08/06/2002; 13:52:48 MDT - Msg ID: 82401)
bears watching.......... another domino in s.america?
Moody's Changes Belize's Outlook To Neg
Following is a press release from Moody's Investors Service:
New York, August 06, 2002 -- Moody's changed its ratings outlook to negative for Belize's Ba2 foreign-currency ceiling for bonds and notes, and for the Ba3 foreign-currency ceiling for bank deposits.
The rating agency noted that the change of outlook reflects the significant increase reported in Belize's foreign currency debt in recent years, as well as indications that the external debt indicators are likely to continue to deteriorate for at least one more year.
Additional financial pressures are also expected to arise from the government's decision to increase external borrowing at commercial terms, in contrast with Belize's longstanding practice of relying on official financing at concessional terms.
Moody's noted that while Belize's external debt remains manageable, an upward trend in the external debt burden poses additional credit risks and could eventually raise concerns about medium-term sustainability, if corrective measures are not implemented.
Since budget imbalances have become an important factor behind Belize's increased external indebtedness, restoring the conditions that validate a stable outlook will require resolute government actions over an extended period of time in order to strengthen the fiscal accounts, Moody's said.

mikal
(08/06/2002; 13:55:12 MDT - Msg ID: 82402)
@BlackBlade
That is funny and true. The title seems like the honorary US university degrees given away to the chosen worthies. Perhaps their purpose with Greenspan was to, for once, make him speechless.
Aristotle
(08/06/2002; 14:12:14 MDT - Msg ID: 82403)
Find the exits. Stock Market. Sell the rallies.
Bond Market. From the perspective of the principle invested this is surely close enough call it THE top. You gonna just stand there and what, admire the view? Pack up your profits and climb down before the mountain comes down with you caught in it.

Gold. Get you some.

Philosophy. Don't just think life. Do life. Keep it real.

On that note, it's been great to see all the good economic analysis coming from the forum's heavy hitters these past days. I hope the many readers will see it for the fine socio-political assessment that it is and join me in a solid course of action. Again,,,

Gold. Get you some. --- Aristotle
Siochaina
(08/06/2002; 14:17:54 MDT - Msg ID: 82404)
AG "Knighted"
Well he could never be a Sir on this forum ...though I think we could arrange to crown him...and grant the honorary title of scullion
darkhorse
(08/06/2002; 14:31:16 MDT - Msg ID: 82405)
Sir Alan...
He must be the Lord of the Castle in slingshot's story. I think he needs to change his handle before somebody recognizes him and goes to find a treasure chest to dump on his head!
Mr Gresham
(08/06/2002; 14:39:16 MDT - Msg ID: 82406)
Heavy Lifting
It's really amazing to think, that so much of our nation's financial dealings and commitments are decided upon the lifting of a telephone, or the click of a computer mouse.

How many people bagging groceries at Safeway, instead of playing golf or visiting grandchildren, will be plagued the rest of their lives with the thought "All I had to do was lift the phone -- why didn't I?"

Most of the world's people, and many hard-working Americans, have no trouble distinguishing real labor from artificial financial gains. The paralysis that comes with a life of relative ease.

It's hard to take money (stored future labor) off the table, because it's hard to shift the framework of thinking that quickly.

(Let's admit it -- us, too -- you and I have probably been excessive bears most of our lives, right? By seeing through the artificialities around us, we thought that they could not continue for long, right? We underestimated at every inflection point the power of human self-delusion, because we did not want to believe that others could be so very different from ourselves.) N'est-ce pas?
Black Blade
(08/06/2002; 14:39:52 MDT - Msg ID: 82407)
Big Boom, Weak Profits
http://www.businessweek.com/magazine/content/02_32/b3795039.htm

Snippit:

Corporate profits were much weaker than first believed. They've been revised down a total of $143 billion, or 6%, for the three years from 1999 to 2001. While the revisions were concentrated in telecom, utilities, and business services, the problem went well beyond a few bad apples such as Enron Corp. and WorldCom Inc. Profits, rather than peaking in 2000 as everyone thought, actually hit their high point in the third quarter of 1997, and have been bumping lower since, especially outside the financial sector. Instead of going towards profits, the benefits of faster productivity growth flowed out the door to workers and managers as higher wages and lucrative stock options.

Black Blade: As the August 14th deadline approaches, more corporations have been revising downward. Even forward looking guidance has been pathetic. It should get "interesting" to see who has to surprise with ugly earnings.

Carl H
(08/06/2002; 14:54:41 MDT - Msg ID: 82408)
Greenspan's Knighthood
I guess we will have to be more respectful of him now and refer to him as Sir Greenie...
Black Blade
(08/06/2002; 14:55:44 MDT - Msg ID: 82409)
Dancing To The Street's Limbo Beat
http://www.businessweek.com/bwdaily/dnflash/aug2002/nf2002086_5288.htm

Snippit:

Fundamentally, there are plenty of reasons to explain why the rally may be flaming out. Even as the market was spiking in late July, weak economic news was pouring in. First came reports of slipping consumer confidence, then durable goods orders fell and an index of manufacturing activity disappointed, indicating that capital spending could be stalling.

A preliminary reading of gross domestic product (GDP) growth for the second quarter came in on Aug. 1 at a bleak 1.1%, as earlier quarters' growth was revised down. A weak employment report on Aug. 2 put a final exclamation point on the week of discouraging news. Good grief!

Bernie Schaeffer, chairman of Schaeffer's Investment Research, says a combination of bearish technical indicators, weakening fundamental measures, and hopeful investor sentiment indicate that the bear market is far from over. "The possibility of major additional damage before the ultimate bottom is far from remote," he wrote to clients in August.


Black Blade: Personally I think that there's a lot of "entertainment" in store with plunging markets, corporate bankruptcies, scandals, declining earnings, "bone Pile" growth, lost consumer confidence and crashing currencies.

BTW, the XAU moved solidly higher today even though Gold sank a bit lower. Don't despair, as Gold shares tend to lead the physical. This is good news. Also be sure to check out the positive view of the Gold market on the Daily Gold Market Report. Gold is going remarkably well for this time of year and soon we could see a lot of renewed interest.

Off to the gym!!!

Siochaina
(08/06/2002; 14:56:59 MDT - Msg ID: 82410)
Twilight Hour
Late NY Access Market (or "Twilight hour") is moving UP nicely ...now 308 with a few small spikes above...more often than not, market follows the trend set here....just maybe $310+ tomorow? !!
Socrates964
(08/06/2002; 14:58:08 MDT - Msg ID: 82411)
(No Subject)
Indeed, though it's usually Sir Alan of somewhere or other -has this location been revealed, or is this a classified state secret.
Cavan Man
(08/06/2002; 15:01:10 MDT - Msg ID: 82412)
Mr. Gresham
Are "they" different or, are we different? There is a difference. Which perspective is right or wrong? Can either find contentment in absolutist thinking however (un) clear?
R Powell
(08/06/2002; 15:12:07 MDT - Msg ID: 82413)
USAGOLD // notional derivatives value
Thanks for the thoughts in 82379.

In 82382 I quoted from Alan Greenspan concerning the value or notional value of any derivatives position. I believe Mr. Greenspan is saying exactly what I had been thinking, namely that derivatives' value is constantly changing and must be marked-to-market whenever their "worth" or risk is determined. Many of these positions are hedges for other such positions and, in the case of held options (bought in full when purchased), these may sometimes be viewed as insurance. Fire insurance on a home is similar in that no one really wants to collect for damage. As an example, if one bought (one time premium payment- with no further risk) a December silver 460 Put, then the December silver future could be bought at $4.60 or lower and with the right to sell at 460 insured by the Put, there is no downside risk on the future's position. Obviously, the holder would prefer the POS to climb to make a profit on the sale of the Dec. silver while the Put expires worthless. So, if POS falls to $4.00 is the future position down $3,000? Yes, but it is covered by the Put which may have cost much less. Stating that JPMC's derivative position has X number of dollars of risk would be an enormous undertaking to determine. The final number would be correct for only that instant in time.

I also wonder about the notion of notional risk having a breaking point simply because they are derivatives. If, indeed, the real risk is the lowering of credit ratings or bond ratings that trigger margin or loan calls that can not be made, then this is a risk that could cause default on any obligation whether derivative in nature or not. As you mentioned with Enron, this clearly, combined with the interrelatedness of different banks, corporations and perhaps national currencies, creates great risk. Corporate bankruptcies posing systemic risk before just before the return of "bigfloat"? I believe we have a fairly good reason to insure with something impervious to this risk.

One last thought. As Greenspan mentioned in BB's quote, most of this is OTC, non-transparent risk as opposed to the regulated, open futures' markets. Settlements for actual delivery of the underlying commodity may be substituted by a fiat settlement but I don't foresee default even if the OTC contracts are lost. However, certainty mentions death and taxes, no investments of any kind are guaranteed. Such is life.
Rich

Operative
(08/06/2002; 15:12:50 MDT - Msg ID: 82414)
See For Yourself...US Buildup For Iraq Attack
http://WWW.GLOBALSECURITY.ORG/military/facility/al-udeid-imagery2.htmWhat an age we live in! Sat Pics of the buildup for the coming war. You used to have to be a highly placed person with all levels of national security to see this kind of intel, not anymore. The handwriting is on the wall, and pictured on the ground. Sadam has been weighed and found wanting. Iraq soon to be the 51st state. How about an oil rig crossed by two missles as thier new state flag? (Trying to make light of a soon coming event that God only knows where this trail will lead our country and the world.)

Hear Ye ! Hear Ye !!
To all those who read from this website!
Listen well to the wisdom offered within. Dare to begin to think that reality is not to be found on bubblevision. Act to protect your and yours. Blackblade sums it up often with his exortation to prepare.

Oh yeah, one more thing. Got Gold?
Operative
(08/06/2002; 15:32:33 MDT - Msg ID: 82415)
Government Telling Insiders, But Not The Public
http://www.msnbc.com/news/790453.asp?0si=-&cp1=1Let's see, I trust,
Big banks of Wall St to act responsible and ethically.
Wall Street Brokers to keep me informed with honest information and advice.
CEO's of large corporations to faithfully administer correct and true accounting of the ledgers.
Sir Knight Greenspan to apply judicial amounts of restraint to the dollar printing press.
US Government to protect my well being and bank account.
OJ Simpson to take my daughter on a date.

It's sad, but I have to check the box, None of Above.
Socrates964
(08/06/2002; 15:34:29 MDT - Msg ID: 82416)
Rate cuts
Sir Iosdan,

I'm not even sure we get the temporary bounce you are talking about, since a) the relationship between rate cuts and new money flows to the corporate sector is a tenuous one, particularly when the latter's credit rating is rotten, b) a rate cut after so many others will be taken as a confirmation of a double dip - unless you believe that the rest of the world is as hopeless as the American Indians selling their lands for firewater, and can't do without their fix of paper dollars (I would forgive if you did, but I don't), I would expect them to stay out of US assets. After all, when the Euro was trading in the mid-80s, a slump in the currency was always blamed on weak European economic growth, I presume the same logic applies to the US.

Obviously, I may be wrong and we may get the 14th 'Buy the semiconductors, cyclicals lead the recovery, etc.' call (actually I've lost count) from Wall Street, together with CNBC's exclusive showing of 'The Mummy Returns Yet Again' starring Abby Joseph Cohen.

PS - these may be famous last words, but gold seems to be doing quite a good job of holding its own against a strengthening dollar. Fingers crossed...
Boilermaker
(08/06/2002; 15:54:37 MDT - Msg ID: 82417)
Maybe there is a plan
Bush knows the economy and financial sector are going down. He's buying time with market interventions that create an economic circus atmosphere like the Roman games of yore. He's created awareness of an "Evil Axis" to lay groundwork for military intervention. He's building Congressional bi-partisan support for military intervention. Now it seems that he's building a case for adding Saudi Arabia to the Evil Axis. It looks like a plan.

I suppose its just coincidence that the "Evil Axis" has the oil and the gold that will needed to extricate the US from its decades long spending binge.
slingshot
(08/06/2002; 16:00:57 MDT - Msg ID: 82418)
Darkhorse
Lord of the CastleAlan Greenspan is the Lord of the Castle, in my story Siege Engine. Alan is now in the Great Hall. Trapped. How will it end for him?

Who Is The King with No Name?
Slingshot------------------<>
Jon
(08/06/2002; 16:21:19 MDT - Msg ID: 82419)
Aragorn and GWB comments
Aragorn, you had previously commented on unpresidential behavior for GWB to discuss punishment for corporate crime. Now, by golly, he's talking about child molestors!!! Comments?
Paper Avalanche
(08/06/2002; 17:23:59 MDT - Msg ID: 82420)
Get while the gettin's good
For a 230+ day for the DJIA, someone is sure concerned about Freddie Mac and Fannie Mae. Both closed down enough to take note on about double daily volume for them both.

When the real estate bubble bursts and serves as the encore to the equity market deflation where will people turn to ensure that they are able to preserve thier savings?

The metal of kings - gold.

Paper Avalnche
misetich
(08/06/2002; 17:52:20 MDT - Msg ID: 82421)
Venezuela central bank warns on forex collusion -The resolution covers currency and gold trading, the bank said.
http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n06365348&feed=reu&date=20020806&cat=USMARKETSnip:

Tuesday August 6, 5:06 PM EDT

CARACAS, Venezuela, Aug 6 (Reuters) - Venezuela's Central Bank on Tuesday moved to crack down on currency traders trying to manipulate the price of the dollar in the local market, a measure analysts said would be difficult to enforce.

In its resolution the central bank prohibited traders from participating in collusion, auctions or deals that deliberately distort the market or the pricing process, according to an official government newsletter.

Central Bank officials can sanction those who fail to comply with the resolution with fines. The resolution covers currency and gold trading, the bank said.

"There are different sanctions; the principal ones are financial sanctions, that is a fine which can be equal to the amount of the participation of the trader in the currency market," Central Bank director Domingo Maza said.



Maza told local Union Radio that the measure aimed to stop traders forming illegal deals to manipulate the price of the dollar in the local market.

The resolution comes amid government attempts to stabilize the exchange rate as Venezuela struggles with spiraling inflation and a steep devaluation of its bolivar currency.

According to Reuters calculations, the bolivar has lost about 44 percent of its value against the dollar so far this year. The bolivar closed Tuesday trading at 1,348.75 to the dollar.

Some traders said they believe the measure would be difficult to enforce while other traders said the move could prove dangerous as it appeared ill-defined.

*************

Misetich

Venezuela's Chavez has been a thorn for the US

Got gold?
misetich
(08/06/2002; 18:09:52 MDT - Msg ID: 82422)
U.S. Treasury Secretary sees economic crises in Brazil, Uruguay and Argentina
http://digitalmass.boston.com/news/wire_story.html?uri=/dailynews/218/economy/U_S_Treasury_Secretary_sees_ec:.shtmlSnip:

By Bill Cormier, Associated Press, 8/6/2002 19:32
BUENOS AIRES, Argentina (AP) U.S. Treasury Secretary Paul O'Neill met with President Eduardo Duhalde and business executives Tuesday to discuss the general unraveling of Argentina's economy, including its debt default, currency devaluation and 22 percent unemployment rate.

As O'Neill arrived from Uruguay where he praised that country's medicine for its banking crisis about 1,500 demonstrators marched through the Argentine capital, Buenos Aires, holding signs saying, ''Yankees, get out of Latin America!'', and burning an American flag.

.............
''We resent O'Neill and we resent the politicians of the United States and the world coming to our country,'' unemployed 22-year-old Patricia Vergara said while holding a sign reading, ''O'Neill go home!''.

She added, ''They are responsible for the repression of our people. Capitalism needs to go.''

Others, however, blame corruption and government bungling for Argentina's worst recession on record.

..............
During their 35-minute meeting, Duhalde told O'Neill that Argentina needs international financial aid as soon as possible, Duhalde spokesman Eduardo Amadeo said, adding that O'Neill ''had a cordial response.''

O'Neill's four-day South American trip reflects Washington's concern about the region's widening economic troubles. He opened the trip on Sunday in Brazil and spent three hours in Uruguay on Tuesday before arriving here just before sundown.

The angry chants of Argentine demonstrators differed from the reception O'Neill received in Uruguay. There, President Jorge Batlle thanked him for Monday's $1.5 billion emergency U.S. loan that rescued Uruguay's banking system from a run on deposits.

On June 30, Uruguay shut its banks for four days, reopening them Monday after the U.S. Federal Reserve wired the loan. The country's reserves plunged from about $3 billion in January to $655 million in July after massive withdrawals by depositors.

The Uruguay loan was the first time the Bush administration has provided direct economic support to a country in financial crisis.

Asked in Montevideo why Uruguay qualified for a loan and neighbors like Argentina did not, O'Neill responded: ''Why Uruguay? Because Uruguay is a country that has followed very sound economic policies.''

He added, ''Even countries that are close by each other are very different and, therefore, we think the circumstances of each country have to be evaluated differently.''

Alberto Bernal, a Latin America expert at the IdeaGlobal think tank in New York, said the Bush administration went out of its way to help Uruguay for fear that Argentina's economic calamity could spread.

But he said the Bush administration remains adverse to even short-term loans like the one to Uruguay which must be repaid, with interest, after International Monetary Fund assistance comes through within days.

''O'Neill is very uncomfortable about this whole trip but he has to do it anyway,'' Bernal said. ''He's uncomfortable because his philosophy of the future of capital markets, his basic view, is that bailouts are not efficient.''

While in Brazil Tuesday, O'Neill called South America's largest economy a good place to invest, bidding to boost its jittery markets and sagging currency.

''I have thought for a long time, since I have direct responsibility for investing billions of dollars, Brazil is a good place to invest,'' O'Neill said Tuesday morning in Brazil.

But analysts said that vague praise was unlikely to assure investors
***********

Misetich

IMF "assistance" has not helped Turkey, Argentina etc. - it will not help Latin America either -

Lets stay on the Latin America HOT TRAIL

Got gold?
misetich
(08/06/2002; 18:32:17 MDT - Msg ID: 82423)
Will Congress Investigate US Agencies' Enron Ties?-Congressional Hearings May Force Public Agencies to ''Step Up''
http://www.corpwatch.org/issues/PID.jsp?articleid=3328Snip:

By Jim Vallette
Special to CorpWatch
August 1, 2002



WASHINGTON -- Senators continue to grill private financial institutions over their roles in Enron's rise and fall. However, the investigation could soon spill from the private to the public sector, where U.S. taxpayer-financed institutions engage in a dangerous tango with Enron's overseas ambitions. These public financial institutions have doled out over $7 billion towards Enron-related projects since 1992. And some who have examined the scope and structure of Enron's overseas operations say that federal agencies, and even the World Bank, could soon face the congressional inquisitors.
.........
Enron "the future way that American companies would be run" was the ultimate expression of the global economic model that the U.S. government, and later, the World Bank, has been pushing since the dawn of Reaganomics in the early 1980's. Enron's rise accompanied heavy-handed efforts by U.S. and World Bank officials to pry open developing countries' energy sectors to foreign corporate control.

...............
Misetich

Enron "the future way that American companies would be run" -

What a scary thought ! How many more Enrons are out there?

Got gold?


Mr Gresham
(08/06/2002; 18:47:42 MDT - Msg ID: 82424)
Cavan Man: Timing, and being Early
Good question -- the crowd, like a good Ponzi, is the ultimate self-validator. All reality is made relative -- to the whim of the crowd. It makes itself right, until it runs into some physical or mathematical impossibility. And then its unanimity vanishes in panic.

Most people feel comfortable in that company, and they get along just fine, for most of the time. They just don't look outside, to the referents that will smack the crowd upside the head tomorrow, or the next day.

We, I suspect, don't feel comfortable running with the crowds, because we've already seen what those external limits are (Dow 36,000 ridiculous; not enough youngers with enough money to even buy it all from us at 10,000). But our bearish sense of time is telescoped, such that we (I, in this instance) fail to take advantage of the tides of human psychology.

I include in this my buying into gold "too soon", despite FOA's reassurances about "giants" patiently accumulating as far back as 1997. It appears that the overall financial meltdown is proceeding (so far) along more predictable avenues -- i.e., stocks going down, dollar starting down, corporate bankruptcies, etc.

The gold market did not get out of hand before this point (probably at great cost in "deep storage" bullion), but in A/FOA's defense, it was a possibility at any point, IMO, since the LTCM collapse in late '98. Merely political juggling and decisionmaking determining the spike point.

(And LTCM -- about which there's been time to write books -- was my confirmation of systemic risk. How they've warded off a second instance this long will be the subject of even more fascinating books.)

I'm glad to have been insured for this interval -- that's worth something -- but I have missed opportunities because of my excessive bearishness on the system. That said, it is not time to reverse our positions, but the window of waiting has shortened. (Of course, it has ALWAYS looke short to me ;) )
Black Blade
(08/06/2002; 19:27:32 MDT - Msg ID: 82425)
College Graduates Face a Shrinking Job Market
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APU.j3RRvVS5TLiBF
Snippit:

Thousands of college graduates this year entered a job market in which U.S. companies planned to hire 36.4 percent fewer than in 2001, the National Association of Colleges and Employers found in a survey. Unemployment had risen to the highest level since 1994, and salaries fell. It was the second year in a row that college hiring declined, and the outlook for the recruiting season that starts this September hasn't improved. ``The job market is much tougher to break into than two years ago,'' said Patricia Rose, director of career services at Penn, one of the eight Ivy League institutions. ``Fewer companies are recruiting on campus, fewer companies are coming on campus to make presentations, and there are fewer postings for jobs.'' U.S. companies have eliminated 1.71 million jobs since the recession began in March 2001, and job creation hasn't picked up as the economy slowly recovers. ``Companies have to pay off debt before we see an increase in hiring,'' said Christopher Low, chief economist at FTN Financial, an arm of First Tennessee National Corp. in New York.


Black Blade: As long as you can say "would you like fries with that", there will always be a job according to the BLS. Health care and government appear to be the only growth industries left. Meanwhile the "Bone Pile" grows in spite of bogus BLS statistical massage. Even those who have found new jobs are often paid much less or are laid off again as the economy continues to retract � the only difference is that this time they do not qualify for benefits and therefore are not considered unemployed by the BLS. "Interesting Times"

Black Blade
(08/06/2002; 19:34:49 MDT - Msg ID: 82426)
"CONSPIRACY THEORY" GAINS NEW CREDIBILITY
http://www.nationalinvestor.com/leaked_gold_report_reveals_troub.htm

Snippit:

You didn't hear about this on the national news, CNBC, or in your local newspaper. After all, most of these controlled/scripted sources of "news" are still trying to keep us all believing that all is well with the world, even as the stock market and economy show new cracks. For all its obvious faults, "the system"�i.e, the fractional reserve monetary system administered by the Federal Reserve�is still sound, according to these pundits. Thus, and in spite of the rally in gold and gold stocks in 2002, the press will usually go out of its way to dismiss gold as either a viable investment alternative or as having any relevance to today's financial and monetary structure.


Black Blade: If you want to read the entire report by John Embry to the Royal Bank of Canada, then click on the link (report is about half way down the page).

Cavan Man
(08/06/2002; 19:56:00 MDT - Msg ID: 82427)
Mr. Gresham
Me too.
Black Blade
(08/06/2002; 19:58:13 MDT - Msg ID: 82428)
Illusory bottom lures hopeful investors
http://cbs.marketwatch.com/news/story.asp?guid=%7B1D8F89AF%2DFF0C%2D42AC%2DB481%2D2A2273A8EFB2%7D&siteid=mktw
Fate of stock market is this summer's central drama

Snippit:

SAN FRANCISCO (CBS.MW) -- "I lost a Mercedes-Benz playing this market, and I've never even owned a Mercedes," the cab driver was saying. That's what happens when $8 trillion of wealth heads for the hills. The U.S. stock market is showing all the signs of a false bottom. Coupled with the illusion of a market turnaround are powerful one-day rallies that move hopeful investors to throw good money after bad. The fate of the stock market this summer is bigger drama than any baseball race or Hollywood movie. Professionals on Wall Street are more confused than ever - and more cynical than ever -- about which way the ailing stock market will turn come autumn. Most of the professional traders, technical analysts and strategists, and the folks they serve on Main Street, are enduring their worst summer vacation since the hedge-fund and Russia blow-ups of the late '90s.


Black Blade: Hope against hope, the sheep are being whip-sawed as some are lured in by the suckers rallies and they soon find themselves on the kill floor to be cut up into mutton chops. This is a brutal market where trying to catch falling knives is a fools game.

Black Blade
(08/06/2002; 20:06:06 MDT - Msg ID: 82429)
Stocks Rally as Rate Cut Hopes Mount
http://www.reuters.com/news_article.jhtml;jsessionid=HAETKOSWIMVGGCRBAELCFFA?type=businessnews&StoryID=1297868

Snippit:

NEW YORK (Reuters) - Stocks scored hefty gains at midday on Tuesday as investors swept into the market after days of declines on hopes the Federal Reserve will fire off another interest-rate cut to pump up the economy. "We are getting some talk of further rate cuts by the Fed, and that is certainly helping the market," said Owen Fitzpatrick, head of the U.S. equity group at Deutsche Bank Private Banking, which oversees $7 billion. "People are hoping additional rate cuts are going to help the economy and save us from going into another recession."


Black Blade: Why anyone would want to jump back into these shark infested waters because of a rumored Fed rate cut is beyond me. The 11 previous rate cuts did absolutely nothing to help the stock markets though they did stimulate a growing real estate bubble. There will be a lot of disappointed investors if they think that a couple of quarter point cuts will do much � just look at Japan.

sector
(08/06/2002; 20:08:22 MDT - Msg ID: 82430)
@RPowell You can say THAT again
When it come to JPM's Derivatives, The Shells are Whirling Very Fast as Mr. Harrison Pleads on CNBC "We're No Crooks" "We didn't Do Anything Wrong"You wrote below:

"Stating that JPMC's derivative position has X number of dollars of risk would be an enormous undertaking to determine. The final number would be correct for only that instant in time."

Using industry norms to assess JPM's derivatives is a losing effort because their derivatives aren't what they seem. Using their 2001 Annual Report one finds that they have achieved a .21% derivative receivable to notional ratio...10 times better that other players in the field. There are two possibilities to explain this wide disparity (1) JPM has discovered a kind of "Holy Grail" of derivatives science...a "New Modeling Technique or (2) JPM is engaged in out right fraud with possible hidden taxpayer backing from the Fed.

Given that JPM is a two-time loser in the fraud department [Hamanaka, Sumitomo copper 1993 and Enron's Mahonia and Yosemite], one would not be out of line with the assumption that number two is closer to the truth.

BTW Harrison's "We're no crooks" speech last night was eerily like that of Richard Nixon's.
Black Blade
(08/06/2002; 20:17:28 MDT - Msg ID: 82431)
"Scandal Of The Day" - Aide Was Reportedly Ordered to Warn Stewart on Stock Sales
http://www.nytimes.com/2002/08/06/business/06DRUG.html?ex=1029297600&en=7078ef86454d1c7f&ei=5006∂ner=ALTAVISTA
Snippit:

Martha Stewart's stockbroker ordered his assistant to tell her that the founder of ImClone Systems was selling large amounts of stock in late December, the assistant, Douglas Faneuil, has told prosecutors, according to a person briefed on the situation. Mr. Faneuil has told prosecutors that he objected to the order but that the stockbroker, Peter E. Bacanovic, insisted. In addition, he told prosecutors that an explanation for Ms. Stewart's sale of nearly 4,000 ImClone shares on Dec. 27 was concocted after the fact, this person said. A phone log from Ms. Stewart's office, however, shows a call from Mr. Bacanovic that day alerting her that the price of ImClone was likely to drop.


Black Blade: It appears that there is someone ready to cut loose and is already talking to prosecutors. Looks like Martha will be decorating prison cells for a while.

Also, tonight we learn that Disney is likely to be downgraded by Moody's. Disney shares are already down to about $14 a share, and a downgrade will put more pressure on the shares. CEO Michael Eisner is one of those grossly overpaid corporate executives that has caught the eye of irate investors.


Black Blade
(08/06/2002; 20:45:29 MDT - Msg ID: 82432)
The dollar rebounds, but for how long?
http://www.iht.com/articles/66930.html
For many investors, U.S. currency still holds allure of safety

Snippit:

LONDON The dollar, in retreat for much of this year, is making a tentative comeback, helped by its allure as a bulwark of safety in turbulent times. Though analysts say the danger of a renewed recession in the United States is growing, potential political and financial hazards outside America are piling up even faster. That is giving nervous American investors cold feet about their international exposure. As a result, the U.S. currency, which fell nearly 15 percent against the euro from January through mid-July, has bounced back roughly 5 percent since then, with a big jump Tuesday as U.S. stocks rose sharply. "For the time being, the dollar's enjoying a certain reprieve," said Neil McKinnon, chief economist at ECU Group, a London-based currency debt management group. "There's a much higher degree of risk aversion in the marketplace."
.
Analysts warn that the rebound in the dollar could quickly fizzle if Brazil manages to avoid a default on its debt or the tension over Iraq eases. By most estimates, the U.S. currency is still overvalued, despite its decline in the first half of the year. In that case, currency markets might shift their focus back to the factors that undermined the strong dollar earlier this year: concerns about the strength of the U.S. economy and the bulging current-account deficit. Those worries have grown in recent days, as a series of reports suggest the economy is in a delicate balance between a slow but steady recovery and a "double-dip" recession.
.
That does not mean the dollar has to weaken immediately, however. The European economy shows signs of flagging as well, with weak employment numbers reported Tuesday, for instance. And Asia, in particular, is highly dependent on exports to the United States, demonstrating the important linkages that could turn an American double dip into a renewed global downturn. "It's not as if the economic data coming out of those two areas have been anything to write home about," McKinnon said. Analysts say the capital flows into the U.S. that are fueling the current dollar rebound are driven more by U.S. investors pulling back from positions abroad than by any renewed optimism in the U.S. economy from foreign investors. That means the dollar rally could be short-lived.
.

Black Blade: I agree that the grossly overvalued US dollar will fall much further. However, it is uncertain whether the dramatic rise is so much as investor bring dollars home to America. I still think that other currencies are just crap and everyone knows it. I still remain unconvinced of the viability of the euro which I think was a stupid idea to begin with, and the yen is �. well �.. the yen. The yen has always been a joke on par with the old Mexican peso. It just may be more of a situation where all currencies are weak and the difference is only "relative strength". At some point the price of Gold could break loose of currency restraints and soar higher due to its internal intrinsic value.

Blackjack
(08/06/2002; 20:58:34 MDT - Msg ID: 82433)
My feelings exactly...USG accounting worse than business
ANNANDALE, Va. (CBS.MW) -- Have our politicians in Washington no shame? Given the shenanigans they employ to manipulate the federal budget, they should be among the last to criticize corporate America's accounting methods.

Perhaps our elected representatives are hoping that if they divert our attention to how corporations are cooking their books, we might not notice what a mess they've made of the federal government's books.

According to Bill Frenzel, who himself served in Congress between 1971 and 1991 and who now is a guest scholar at the Brookings Institution, one of the only differences between the accounting methods used by some corporations and the Federal government is that criminal sanctions do not apply in the latter case.

This situation has led a number of investment newsletter editors to throw up their hands in disgust.

This past Friday, after the stock market was driven down even further by yet more evidence of malfeasance on the part of both corporations and the federal government, Sy Harding of Sy Harding's Street Smart Report pleaded: "Will someone please give investors a break?"

Imagine, if you will, how the Feds would react to a publicly traded company that:

* Does not employ accrual accounting
* Frequently changes the definitions used to classify revenue and expense
* Regularly places expenses "off budget," while nevertheless declaring as current income any associated revenues
* Rarely, if ever, accounts for any of the insurance that it underwrites or guarantees

Our politicians would fall over themselves in righteous indignation. Yet these are just a few of the methods that for years they themselves have been employing to make the federal budget look better than it really is.

The government's budget mess is not the only federal government offense that upsets Harding. He also is shocked by the poor quality of economic data released by the government. The latest example is the Labor Department's monthly reporting of the unemployment data, which he concludes is "almost unbelievable."

Here is Harding's opening statement for the prosecution:

"In early March the Labor Department reported that 66,000 new jobs were created in February, a surprising reversal of the long stretch of monthly declines in jobs creation. It was taken as a sure sign the economy was growing again, and the stock market rallied strongly.

"A month later came more good news, that 58,000 new jobs were created in March. But whoops -- the numbers reported the previous month for February were wrong. Instead of 66,000 new jobs being created as previously reported, there had actually been a loss of 2,000 jobs. So apparently the turnaround in the employment picture did not begin in February as investors had been told -- but at least it had begun in March.

"The following month came the good news that 43,000 new jobs were created in April, - but whoops -- the numbers reported the previous month for March were wrong. Instead of 58,000 new jobs created in March as previously reported, there were actually 21,000 more jobs lost."

Tongue firmly in cheek, Harding muses: "I'd hate to think it's the same kind of self-serving on the part of Washington that Wall Street firms and corporations have been guilty of, trying to make investors (and voters) think that everything is better than it actually is."

Harding concludes: "Rather than dragging more CEOs off to jail right now for previous problems, Washington might do investors a bigger favor by investigating why the government itself is misleading investors with incorrect information."
Gimli_
(08/06/2002; 21:10:22 MDT - Msg ID: 82435)
Steven Jon Kaplan just turned BULLISH
http://www.goldminingoutlook.com/"SUMMARY: My current outlook for gold and gold mining shares has improved substantially to MODESTLY BULLISH."
Horatio
(08/06/2002; 21:23:15 MDT - Msg ID: 82436)
N.J. Pension Fund Losses
So the state is going to sue,ha ha what are they going to do if the corruption leads them to thier own Senator Corzine !!!
former head of Goldman Sucks.hehe
Gandalf the White
(08/06/2002; 22:19:57 MDT - Msg ID: 82437)
"Tomorrows" News from Hong Kong
South China Morning Post Publishers Ltd
Retail sales slump by 7.7pc
The value of Hong Kong retail sales plunged by a worse-than-expected 7.7 per cent year on year in June, adding to the economic gloom caused by record unemployment and a faltering global recovery.
===
AT LEAST, they are honest in reporting numbers !
<;-)
Black Blade
(08/06/2002; 22:33:08 MDT - Msg ID: 82438)
Re: Gimli

You may have noticed that he missed the entire rally in gold (up 18% year to date). Did you happen to notice his investment portfolio? He must have been slaughtered. Anyway, I do not see focusing on the COT positions as being necessarily all encompassing for precious metals investment considering the wide range of variables that cannot be accounted for by a limited feature of technical analysis. It certainly did not work out as a predictive indicator for the last two and a half year advance in gold prices. Oh well.

Of course I did jump in and out of some minor gold share positions taking advantage of the volatility and reallocating shares over concerns of stock dilution and the SA mining charter draft even though the outlook for precious metals remains strong. Still I am glad to have a nice accumulation of phyical precious metals as insurance. The rest is just a game.

- Black Blade
Black Blade
(08/06/2002; 22:50:43 MDT - Msg ID: 82439)
Monkey See Monkey Do In Asia
http://quote.yahoo.com/m2?u
On the heels of the US suckers rally, the Asian markets are blindly following along. Earnings announcemnets in US markets have been nothing to crow about. Even Cisco has a 19 cent loss after options are expensed, though they won't admit it publicly. The USD is higher though. The yen continues to be a joke of a currency and now the governmnet plans to redesign the yen for - get this - to stimulate the business of upgrading vending machines. OK, so they did say something about making the yen counterfit proof as if anyone would want to. Meanwhile the Nikkei 225, Nikkei, and Taiwan Weighted are rockin and rollin tonight. Gold is actually improving against the higher USD and dubious stock market strength. Should continue to be "entertaining" tonight.

- Black Blade
Black Blade
(08/06/2002; 23:11:21 MDT - Msg ID: 82440)
Tyco Spent Millions for Benefit of Its Former CEO Kozlowski
http://biz.yahoo.com/djus/020807/200208070035000027_2.html

Snippit:

Tyco International Ltd. (TYC) may have spent over $135 million to benefit L. Dennis Kozlowski, the former CEO who resigned in June before being charged with tax evasion, Wednesday's Wall Street Journal reported. Tyco secretly wiped clean $25 million in loans in 1999. In 1998, Mr. Kozlowski moved into a new home in Boca Raton, Fla.: a 15,000- square-foot, Mediterranean-style, waterfront mansion complete with pool, tennis court and fountain. Although Mr. Kozlowski was one of America's best-paid corporate executives, he didn't have to reach into his own pocket to finance the lavish spread. Instead, he paid for it with a $19 million, no-interest loan from Tyco. Two years ago, Tyco quietly forgave the entire loan as part of a "special bonus" program, according to people familiar with the company. To cover Mr. Kozlowski's income taxes on the forgiven loan, these people say, the company kicked in an extra $13 million. Not a penny of these deals was disclosed to Tyco shareholders.


Black Blade: So where was the board of directors during the pillage and plunder? They are the ones who should be looking out for the shareholders interests. Unfortunately boards of directors across the nation have been negligent. Consider the board of directors at Enron. Perhaps legislation to hold these charlatans accountable is needed as well.

Black Blade
(08/06/2002; 23:44:14 MDT - Msg ID: 82441)
WORLD ON WAR ALERT
http://www.dailyrecord.co.uk/news/page.cfm?objectid=12093543&method=full&siteid=89488
Defence exercise signals Iraq move

Snippit:

THE world edged closer to war yesterday as Britain sent the aircraft carrier Ark Royal to the Med. Officially, the 1000-crew vessel is on exercises, but defence analysts believe it will be preparing to join a US strike against Iraq. And in America, George Bush's government added to speculation that they were gearing up for an invasion by announcing they were building up oil reserves. Iraqi dictator Saddam Hussein was also said to be preparing for conflict - by buying off his deadly enemies the Kurds with bribes to stay out of the coming fight. In London yesterday, US Energy Secretary Spencer Abraham urged oil-consuming countries to review their plans to ensure energy supplies, although he denied it was directly linked to Iraq.

Defence experts in Washington are also concerned at the reports from spies in Iraq that Saddam is bribing the Kurds. Iraq's four million Kurds hate Saddam and the US was counting on their whole- hearted support to help overthrow him. But they have been badly let down twice by the west when they asked for help. The first time was in the 1980s when Saddam's forces killed thousands of Kurds with poison gas after they made a doomed bid for independence. They renewed their appeal in 1991 after the Gulf War, but no help came. Despite Britain and the US maintaining no-fly zones in northern Iraq to protect Kurds, Saddam's forces invaded their region in 1996 and executed scores of opposition leaders. CIA agents operating in Iraq fear the letdowns mean the US cannot now count on their support.


Black Blade: Yet another prediction of war. Of course the article is correct about the Kurds, the US did abandon them in their time of need. That is a common theme of American politics. It also happened when the US made promises to the Montonyards in Vietnam and then promptly reneged on promises by abandoning them as well. It is no wonder that the US has few friends left. I don't blame the Kurds one bit for giving the US the one finger salute.

steady
(08/06/2002; 23:46:56 MDT - Msg ID: 82442)
a barabaric rellic?
http://www.businessreport.co.za/html/busrep/br_frame_decider.php?click_id=335&art_id=ct20020806203045454P360869&set_id=60Are gold bars worth prison bars?
Is $14.9 million in gold bars, coins and other property worth more than two years in prison? For Martin Armstrong, once one of the world's largest silver traders with an office overlooking Tokyo's Imperial Palace, it is money he says he just doesn't have.
Bloomberg reports that Armstrong, the ex-chairman of Princeton Economics
International, is accused of an $800 million swindle and has been behind bars since January 2000 for refusing to surrender the $14.9 million.



steady
(08/06/2002; 23:59:36 MDT - Msg ID: 82443)
what is this about? anyone else here of it?
http://www.minesite.com/archives/features_archive/2002/Aug-2002/diggers060802.htmHe then pre-empted his friend Chris Thompson by announcing that Newmont is working with the new boss of the WGC to produce a new gold instrument which would take anything from 500 to 1000 tonnes of gold off the market each year. Thompson is actually visiting London this week and may well have been planning to combine a comment on this with the announcement of his new CEO who will be someone very well known, but from outside the gold industry. The fact that Lassonde and Thompson are working together on this certainly means that some fireworks can be expected at the World Gold Council in the next few months.
Black Blade
(08/07/2002; 01:16:52 MDT - Msg ID: 82444)
Could Latin America's economic turmoil be a replay of the Asian crisis?
http://biz.yahoo.com/ap/020807/south_america_asia_replay_1.html
Snippit:

WASHINGTON (AP) -- The conventional wisdom has been that South America 2002 is not Asia 1997-98 when financial crises spread like wildfire from country to country, toppling 40 percent of the global economy into recession. "Let's face it. The dominoes are falling again," said David Wyss, chief economist at Standard & Poor's in New York. "Before we thought Latin America would not be a replay of Asia and now we are hoping it is only Asia in 1997-98 and not something worse."


Black Blade: This mess will sweep throughout South and Central America in a replay of the Mexican Peso Crisis and the Asian Contagion. The effects will probably spread north into Mexico and the US. Already major US banks have taken a big hit in Argentina. Just wait until Brazil goes under. The US taxpayer will subsidize several bailouts in the process.

Black Blade
(08/07/2002; 02:05:21 MDT - Msg ID: 82445)
Markets Have Bottomed?
http://www.mrci.com/qpnight.asp
The US market futures are soaring high this morning with the DOW at 105, Nasdaq at 20, and the S&P at 13. Some analysts are trumpeting the end of the bear market. It appears that some are even willing to put up cash behind the market index futures this morning. Yet no one can explain why the markets should have bottomed except that all hopes are on a quarter point Fed rate cut, so this could get rather interesting after the markets open on Wall Street. Meanwhile Gold is higher by about a buck, petroleum prices are falling fast, and the USD index is pulling back.

- Black Blade
Black Blade
(08/07/2002; 02:11:42 MDT - Msg ID: 82446)
German jobless total tops 4 million mark in July
http://biz.yahoo.com/ap/020807/germany_jobless_1.html

Snippit:

BERLIN (AP) -- The number of Germans out of work climbed above the politically sensitive 4 million mark in July, according to official figures released Wednesday, less than seven weeks before elections in which the government's economic record is a key issue. The rate moved up to 9.7 percent from 9.5 percent.


Black Blade: The German "Bone Pile" is rising. It looks like they need the BLS to massage the data so the unemployment rate will fall. No recovery in Germany either. In a word � "Grim".

Spartacus
(08/07/2002; 03:34:23 MDT - Msg ID: 82447)
Gold
http://www.mises.org/journals/scholar/shostak.PDF
A working paper about our present fiat paper standard system by Frank Shostak.
Black Blade
(08/07/2002; 03:41:54 MDT - Msg ID: 82448)
Spot Gold Bounces

Spot gold is up $2.70 this morning just about $308 an ounce. I wonder how it will do in NY. Hmmm...

- Black Blade
MO VER MEG
(08/07/2002; 04:47:12 MDT - Msg ID: 82449)
Blackblade
Are you headed to Sturgis this year?

Black Blade
(08/07/2002; 04:51:14 MDT - Msg ID: 82450)
AngloGold Panics

It appears that AngloGold is still smarting with underwater hedge books and are scared sh##less of gold's current strength. At the Diggers and Dealers mining conference in Kalgoorlie in Australia this week, AngloGold executive Steve Lenahan told the conference there was little evidence to support a rising bullion market. Lenahan said suggestions that gold prices would trade higher were "overoptimistic". At the same time, AngloGold, the world's third largest gold producer, is in agreement with others producers in strategy, trying to reduce its hedge book to give it more exposure to higher gold prices. Many of you remember the battle between mega-hedger AngloGold and Newmont-Franco over Aussie producer Normandy. It was a critical turning point for AngloGold which they lost. Now in the mad scramble to unwind losing hedge positions the company is working to talk down gold even though most every other producer has a bright outlook for the precious metal. They are obviously trying to buy more time and with the leaked mining charter draft they are even in a deeper quagmire. The day of the hedger is over.

- Black Blade
Black Blade
(08/07/2002; 05:04:31 MDT - Msg ID: 82451)
Re: MO VER MEG

I don't think that I will be going this year. My friends are not coming out this time so I will just kick back, consume some cold ones and slay some fish. I have seen a lot of bikers heading in that direction though. Then who knows, I just might get as far as Hullett for the "Ham and Slam" if I can get away. But it isn't likely this year. Cheers!

- Black Blade
Black Blade
(08/07/2002; 05:34:55 MDT - Msg ID: 82452)
"The Barbarous Relic Files" - Diver waits for ruling on 'Nazi' gold
http://www.guardian.co.uk/international/story/0,3604,770197,00.html
Snippit:

Officials are trying to decide who owns a solid gold cauldron found in a lake that is believed to have been made for the Nazis, Bavarian finance ministry spokesman Bernd Schreiber said yesterday. The cauldron, which weighs 10.5kg (23lb) and contains gold worth around �100,000 (�63,000), was recovered last year by a diver from Chiemsee lake in Bavaria.

Archaeologists have been examining it and officials are considering whether the 50cm (20in) cauldron is "discovered treasure", which would give the diver equal ownership rights with the state government, Mr Schreiber said. But the diver would have no claim if it can be established that it belonged to the Nazis, as all such items are considered state property, he added.


Black Blade: What's to decide if it's only a barbarous relic? Hmmm�

Black Blade
(08/07/2002; 05:42:23 MDT - Msg ID: 82453)
Are gold bars worth prison bars?
http://www.businessreport.co.za/html/busrep/br_frame_decider.php?click_id=345&art_id=ct20020806203045454P360869&set_id=60

Snippit:

Is $14.9 million in gold bars, coins and other property worth more than two years in prison? For Martin Armstrong, once one of the world's largest silver traders with an office overlooking Tokyo's Imperial Palace, it is money he says he just doesn't have. Bloomberg reports that Armstrong, the ex-chairman of Princeton Economics
International, is accused of an $800 million swindle and has been behind bars since January 2000 for refusing to surrender the $14.9 million.

His lawyer says he has spent more days in prison for contempt than anyone in a white collar fraud case. Judge Richard Owen, presiding over the government's civil suit, can keep him in jail indefinitely on the contempt holding. The missing gold bars and coins are sought by federal officials to help offset what they say are proceeds of his fraud.


Black Blade: I guess the judge doesn't buy into the "barbarous relic defense". Hmmm� Indefinitely incarcerated without benefit of a trial eh? Interesting.

BTW, Gold is now up $3.50 an ounce before the NY open.

Operative
(08/07/2002; 05:46:12 MDT - Msg ID: 82454)
Morgan Stanley Confident or Watching the Spin Machine In Action
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Stock%20Market%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_stocks&s=APVCeUBRaTW9yZ2FuThe big boys have implemented the full court press in the media. Buy Stocks NOW !! With only one cup of coffee down this morning I can only think of one word to respond. Perverted. Will the public buy the spin?
Black Blade
(08/07/2002; 05:46:52 MDT - Msg ID: 82455)
Newmont CEO On CNBC Squawk Box

Newmont CEO is scheduled to be on CNBC's Squawk Box this morning. Hey, maybe they will actually talk about Gold. Hmmm...

- Black Blade
misetich
(08/07/2002; 05:53:25 MDT - Msg ID: 82456)
Investigators Widen Enron Probe - WSJ
http://story.news.yahoo.com/news?tmpl=story2&cid=568&ncid=749&e=3&u=/nm/20020807/bs_nm/energy_enron_report_dc_1Snip:
NEW YORK (Reuters) - Federal investigators appear to have widened an inquiry into U.S. energy trader Enron Corp, probing whether the company or its executives committed accounting fraud by borrowing $1 billion in a last-minute bid to stave off bankruptcy, the Wall Street Journal reported.
..............
The paper said the investigators were trying to determine if Enron improperly used two of its publicly-regulated pipeline subsidiaries to secure the loans and then transfer the money to Enron's accounts, with no plans to repay the companies.

An Enron spokesman defended the transactions to the Journal as "common" and "an acceptable practice," and said they were fully disclosed at the time. He declined to discuss the loans or their accounting treatment in detail.

***************
Misetich

Common and acceptable practice - common yes, acceptable by whom? Were this practices disclosed to shareholders? would be shareholders? would be bond holders?

Common and acceptable translates - most of the apples are rotten

Got gold?






misetich
(08/07/2002; 06:04:22 MDT - Msg ID: 82457)
NatWest Three could be key to Enron case
http://story.news.yahoo.com/news?tmpl=story2&cid=1106&ncid=1106&e=5&u=/ft/20020806/bs_ft/1028185560935Snip:
According to e-mails and other documents cited by the Federal Bureau of Investigation, Mr Fastow's involvement in the scheme was seen as essential by the bankers from the beginning.

............
A Fastow-led partnership named Southampton, in which the three NatWest bankers had a financial interest, would buy the shares and quickly sell them again at a true market price, enabling the bankers to pocket $7.3m. "Between approximately March 2000 and July 2000, Mulgrew, Darby and Bermingham executed a scheme to purchase and then profit hugely from the lion's share of what should have been NatWest's beneficial interest," said testimony from FBI ( news - web sites) special agent Deanne Simpson.
****************

Misetich

Investment bankers - probably some more common and acceptable practice -

Got gold?
misetich
(08/07/2002; 06:04:22 MDT - Msg ID: 82458)
NatWest Three could be key to Enron case
http://story.news.yahoo.com/news?tmpl=story2&cid=1106&ncid=1106&e=5&u=/ft/20020806/bs_ft/1028185560935Snip:
According to e-mails and other documents cited by the Federal Bureau of Investigation, Mr Fastow's involvement in the scheme was seen as essential by the bankers from the beginning.

............
A Fastow-led partnership named Southampton, in which the three NatWest bankers had a financial interest, would buy the shares and quickly sell them again at a true market price, enabling the bankers to pocket $7.3m. "Between approximately March 2000 and July 2000, Mulgrew, Darby and Bermingham executed a scheme to purchase and then profit hugely from the lion's share of what should have been NatWest's beneficial interest," said testimony from FBI ( news - web sites) special agent Deanne Simpson.
****************

Misetich

Investment bankers - probably some more common and acceptable practice -

Got gold?
misetich
(08/07/2002; 06:28:04 MDT - Msg ID: 82459)
Americans file record mortgage requests last week
http://www.forbes.com/newswire/2002/08/07/rtr688462.htmlSnip:

NEW YORK, Aug 7 (Reuters) - Americans, enticed by
historically low mortgage interest rates, filed a record number
of mortgage applications last week for refinancing and home
purchases, a U.S. industry trade group reported on Wednesday.
..........
The Mortgage Bankers Association of America (MBA) said its
weekly barometer of mortgage application activities rose to a
record high of 1,066.9 for the week ended Aug 2, up 6.2 percent
from the prior week. The latest reading surpassed the previous
high of 1,055.5 set the week ended Nov. 9, 2001.

The group's seasonally adjusted mortgage refinancing index
rose to 5,097.3 last week, up 7.3 percent from the prior week.
This was fourth highest level of the refinancing index and the
first time this year that it broke the 5,000 threshold.
************
Misetich

More refinancing to come as interest rates head lower - it will be fun to watch this in a few years

Got gold?
misetich
(08/07/2002; 06:43:17 MDT - Msg ID: 82460)
Dancing to the Street's Limbo Beat-Investors can bend over backwards looking for a bullish sign, and yes, they'll find a few. But the pros feel the bar still has a ways to drop
http://www.businessweek.com/bwdaily/dnflash/aug2002/nf2002086_5288.htmSnip:

Hill says it is now pretty much inevitable that analysts will have to lower earnings forecasts for the third quarter and fourth quarter of 2002. Analysts predict third-quarter earnings will be up 12% (already sharply lower than their July 1 consensus of 16%), but Hill thinks the actual growth will be more like 5% to 8%. "It's hard for the market to go up when analysts are slashing their numbers," he says.
............

Misetich

It will be much worse than expected.

Got gold?
misetich
(08/07/2002; 06:53:00 MDT - Msg ID: 82461)
Warning: Credit Crunch -Accounting regulators want $1 trillion or more of hidden corporate debt moved into plain view. The reform could pull the rug from under the credit-driven economy.
http://www.forbes.com/forbes/2002/0812/062.htmlSnip:

Securitization describes a form of financing in which a bank or other lender wraps up a package of assets--car loans, for example, or mortgages or credit card receivables--and issues securities against that package. (The securities are traded as bonds; hence the "securitizing.") Investors such as money market funds and pension plans buy those securities. That provides cash that lenders can recycle in another round of car loans, mortgages and credit card charges.

Such financial alchemy keeps America's buy-now-pay-later consumers swimming in credit. It helps explain why, despite two years of layoffs and 401(k) disasters, people are buying cars and houses at a furious pace. Securitized lending has its antecedents in Ginnie Mae, created in 1968 to package home mortgages. In the past decade it took off, having climbed to a staggering total of $6 trillion, most of it to finance consumers. For comparison, all household debt in the U.S. totals $7.7 trillion.

With the right attention to detail, the lender securitizing its book of car loans or credit card balances gets both the stream of income from assets (that is, the consumer loans) and virtually all the liabilities (the securities issued to investors) off its balance sheet. The investors are thrilled with the arrangement. They can look to a predictable stream of consumer loan repayments to back up the debt securities they have purchased; if the lender gets into trouble, they get first dibs on that cash stream. For lenders, keeping these assets and liabilities buried in footnotes rather than on the balance sheet is vital. Consolidate them and some lenders would look dangerously leveraged.

Securitization is a big business for some finance companies. Citigroup (nyse: C - news - people ) has $204 billion of asset-backed debt outstanding, J.P. Morgan Chase (nyse: JPM - news - people ) $75 billion. Credit-card issuer MBNA (nyse: KRB - news - people ), a master of the art, has $73 billion--compared to on-balance-sheet assets of $45.4 billion and a comparative sliver of shareholders' equity, $7.8 billion. Ford Motor Credit (nyse: F - news - people ) was able to save several hundred million dollars over the past 18 months using off-balance-sheet financing. GMAC is another big player. Without securitization you might not see as many 0% car loans.

What could stop this happy arrangement? Enron-wary reformers are agitating to have some or all of that $6 trillion consolidated on the balance sheets of lenders. Some lenders are fighting this tooth and nail. It would force a lot of them to raise the price of consumer credit or drastically cut back on it. It could, if you believe the people lobbying against the reform proposal, stop the economic recovery in its tracks.
...............
Andrew Smithers, chairman of Smithers &Co., economic consultants in London, warns, "If they have to put the debt back on their balance sheets, it will violate the debt covenants of leading banks." If banks' balance sheets lard up with the extra debt, "banks will have less propensity to lend in similar size and pricing. It will diminish the return on equity," says Michael Malter, head of asset-backed securities at J.P. Morgan Chase.

The Financial Accounting Standards Board, which is set to decide on the rule change in the fourth quarter, dismisses all the hand-wringing. "We're trying to increase transparency and disclosure on the financial statements. If the markets or regulators think that consolidating all the debt is being overleveraged, I can't control that," says Edward Trott, a member of the seven-person board.

*****************
Misetich

Off balance sheet items - what a scam ! Lets stay on this TRAIL - as to whether or not FASB rule change passes (doubtful) the risks increase nevertheless and will hit sooner than later

Got gold?

Waverider
(08/07/2002; 06:54:53 MDT - Msg ID: 82462)
Spike
http://www.kitco.com/charts/livegold.htmlSpot jumping up $6.00 at the moment.
koala bear
(08/07/2002; 06:57:42 MDT - Msg ID: 82463)
Mr Lips & Mr Greenspan
There has been some great discussion these past few days! Thanks guys for all your work and thanks MK. With all the fuss about Greenspan being a knight I though I would like to point out something that some folks here might of missed in the book. �Gold Wars� by Ferdinand Lips. In the notes on page 226 note #76 Ferdinand Lips describes the encounter that he had with Allan Greenspan:

"I had my own particular encounter with Mr. Greenspan. It happened when I was a managing director of the Rothschild Bank AG, Zurich, and Mr. Greenspan was still with his consulting firm of Townsend-Greenspan. I was so fascinated with his essay "Gold and Economic Freedom" that I showed it to all my clients. For one of them, a very wealthy German industrialist, who did not speak English, I translated it into German. Some time later, a U.S. brokerage firm sponsored a speech by Mr. Greenspan in Zurich. At the prestigious Hotel Baur au Lac, he spoke on the U.S. economy to the Zurich financial community. A representative of the U.S. brokerage firm and a friend of mine, introduced me to Mr. Greenspan in the hope he would be pleased to hear that a Swiss banker had taken the time to translate his essay into German. To our surprise Mr. Greenspan did not seem happy. He grimaced, turned his back on us abruptly and briskly walked away without saying a word."

Classic example of what happens when light meets darkness. The darkness walks away. I wonder how history will remember Mr.Greenspan? It is honest bankers like Mr. Ferdinand Lips who deserve the recognition and praise for their work, not a turncoat like Alan Greenback. Perhaps Sir Slingshot's story could finish with the chairman in handcuffs? Or at least the lot of them running around with their asses on fire?

The book �Gold Wars� is such a good read, even the notes are great! You can purchase a copy from amazon.com. Do it now.

Russell
misetich
(08/07/2002; 07:03:55 MDT - Msg ID: 82464)
Global: Rearranging the Deck Chairs -Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20020807-wed.html#anchor0Snip:

In my post-bubble vision of the US economy, a purging of the excesses of the 1990s is vital before America can resume a more sustainable and vigorous economic expansion. The consumer is the key sticking point in that regard. With record debt loads, low saving rates, steep losses in equity portfolios, and looming retirement obligations, I continue to believe that a long overdue retrenchment of the American consumer is a necessary ingredient of the post-bubble purging process that lies ahead.
............
But the real sticking point for a post-bubble US economy is that this government-sponsored increase in personal saving does little to advance the purging process that America so desperately needs in order to clear the decks for a sustainable and vigorous expansion. To the contrary, the recent massive swing in the federal government's fiscal balance -- from surpluses of nearly 2% of GDP in 2000 to an estimated 1.5% deficit this year -- underscores the price that may eventually have to be paid in order to reliquefy the American consumer. Barring a spontaneous reduction in the US consumer's marginal propensity to spend, it may well be that the federal budget deficit would have to rise into the 3% to 5% range in order to inject enough income to restore personal saving to its historic norms. Yet that would be the height of folly -- in effect, swapping one imbalance for another. Sadly, such an outcome would not be unlike the post-bubble experience of Japan, where the budget deficit and public sector borrowing have expanded dramatically in recent years.

All this underscores the obvious. The only way out for the post-bubble US economy is a long overdue purging of the excesses of the American consumer. The personal saving rate is one metric that can be used to gauge progress on that count. But any improvement in this gauge cannot be built on a path of fiscal profligacy. That "fixes" one problem at the risk of compounding another -- in effect, doing nothing more than rearranging the deck chairs. Instead, there must be a legitimate increase in the preference for national saving. Until that happens, I fear America will find it exceedingly difficult to extricate itself from this post-bubble quagmire.

***********
Misetich

US current budget deficit for example is projected at $165 billions is understated by 40 to 60 billions - add off-budget items, interest costs being omitted etc - and you get to over $500 billions annually

Got gold?
misetich
(08/07/2002; 07:09:42 MDT - Msg ID: 82465)
Sales at Chain Stores Were Weak in July
http://www.latimes.com/business/la-fi-rup7.1aug07.story?coll=la%2Dheadlines%2DbusinessSnip:

Sales at U.S. chain stores slipped 0.4% in the four weeks ended Saturday compared with the same period in the previous month, Instinet Research said.

A separate measure by Bank of Tokyo-Mitsubishi and UBS Warburg showed a 0.1% rise for the week ended Saturday after a 0.4% decline the preceding week.

***********
Misetich

The SM correction occurred in the last week of July - Consumers appear to being tapped out.

Got gold?
misetich
(08/07/2002; 07:16:31 MDT - Msg ID: 82466)
Spreads widen on US motor company debt
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185568210&p=1012571727204Snip:

By Jenny Wiggins in New York and Aline van Duyn in London
Published: August 7 2002 5:00 | Last Updated: August 7 2002 5:00

New fears that the US may be teetering on the edge ofa "double-dip" recession that may hurt the sales of manufacturers have led some investors to sell the debt securities of vehicle makers Ford and General Motors.

Spreads on Ford Motor Credit's 10-year bonds have widened more than 70 basis points since August 1 to be bid yesterday at 395bp over Treasuries. Similar maturity bonds of General Motors Acceptance Corp (GMAC) have widened by around 35bp to be bid at 295bp over.

The widening in spreads occurs as worry mounts over the failure of the US economy to bounce back from the downturn. Last week's disappointing second-quarter GDP report, in which growth was just 1.1 per cent, as well as declining consumer confidence have prompted many economists to call for a further cut in interest rates.

*************
Misetich

and lets not forget unfunded pension plans - ouch!

Got gold?

Cometose
(08/07/2002; 07:31:34 MDT - Msg ID: 82467)
INO.gold ticker
If they are live quotes at the ino.com site....for several minutes while I was observing, Spot was at 314 and all the futures prices corresponding at that time were well below the spot price.... from 308 for august to 313 for Dec. Perhaps this was a glitch in time .....or maybe it is a sign .... Aug 14 rapidly approaches
Cometose
(08/07/2002; 07:37:22 MDT - Msg ID: 82468)
INO.com ticker
It's doing it a gain ...SPOT IS HIGHER NOW ON AN ONGOING BASIS THAN THE FUTURES MARKETS>>>>>THIS SHOULD SET OFF A WAVE OF PHYSICAL BUYING>>>>>I think FOA has tipped us off to what this scenario is indicating
steady
(08/07/2002; 07:50:41 MDT - Msg ID: 82469)
what a waste of infrastructure.
Saudi Arabia Won't Let US Use Saudi Soil In Iraq Attack

JIDDAH, Saudi Arabia (AP)--Saudi Arabia has made clear to Washington - publicly and privately - that the U.S. military will not be allowed to use the kingdom's soil in any way for an attack on Iraq, Foreign Minister Prince Saud said Wednesday.
Saudi Arabia, a longtime ally of Washington whose contribution to the U.S. war on terrorism has been praised and sharply criticized by Americans, has no objections to the U.S. continuing its decade-old monitoring of Iraqi skies from the U.S. air control center in the kingdom, Saud said.
But as to using the center or any Saudi soil to attack Iraq, he said in an interview with The Associated Press: "We have told them we don't (want) them to use Saudi grounds."
"We are against any attack on Iraq because we believe it is not needed, especially now that Iraq is moving to implement United Nations resolutions," Saud said. "... For the government of Iraq, the leadership of Iraq, any change that happens there has to come from the Iraqi people. This is our attitude."
Under U.N. Security Council resolutions, sanctions imposed after Iraq's 1990 invasion of Kuwait, which led to the Gulf War, cannot be lifted until U.N. inspectors certify that its biological, chemical, and nuclear weapons have been destroyed along with the long-range missiles to deliver them.
Last week, Iraq invited U.N. chief weapons inspector Hans Blix to Baghdad for technical discussions that could lead to a resumption of the inspections, more than 3 1/2 years after inspectors left Iraq and were barred from returning. U.S. President George W. Bush has said he is committed to a regime change in Iraq and war rhetoric is running high. Washington has dismissed the Blix invitation as a ploy.

Saudi Arabia invited U.S. troops to the country for the 1991 Gulf War to help defend the oil-rich nation against Saddam Hussein's forces. As speculation has grown Iraq would become the next U.S. target in its war on terrorism, reports have said the Saudis were saying one thing in public, but privately telling U.S. officials they would support a strike on Iraq.
Saud, speaking in English, denied that the private line to Washington was any different than the public remarks: "We couldn't have made our position more clear, our leaders have said this and everybody responsible in the kingdom has said this."
(END) DOW JONES NEWS 08-07-02

Pizz
(08/07/2002; 08:01:51 MDT - Msg ID: 82470)
Picture This
JPM and all the other boys, being just a tad bit short on paper gold, running frantically from office to office gathering rings, watches, and any other golden trinkets.

Where are those darn wheelbarrows anyway???

Big Smile.

Pizz
The CoinGuy
(08/07/2002; 08:09:09 MDT - Msg ID: 82471)
Pizz
As short as they are, probably should just head to Ft. Knox. Hope it's not empty. Might want to bring along MWD from what I hear.

The rumor mills are whirling this morning...

The(physical)CoinGuy
Pizz
(08/07/2002; 08:35:08 MDT - Msg ID: 82472)
Newmont
When the President of Newmont was grilled by Mark Haines on CNBC this am, he was hit with the statement that wasn't all gold that was ever mined above ground and available?

Too bad he wasn't a little quicker (obvious that he wasn't prepped for the question, since Haines was getting his questions over the earpiece). I would have loved to hear him comment, "well, yes and no, cause it seems that the US has put all their's in deep storage, and we haven't figured out just why, but they must have a good reason, and that in itself is bullish going forward."

CoinGuy: I'll bet the rumors are flying, since the mainline news seems verrrrrry quiet this morning. Almost as if the govmint boys are running around with rolls of duct tape. Makes you knid of wonder if maybe we warmed up a few too many jet engines in the ME at the same time.

Whatever it was, somebody lost a wad trying to push the markets up this am. Gold stocks are almost all right below major resistance, and I'd have to believe there are a few buy stops right above the current market.

Interesting day ahead.

Pizz
Tommy P
(08/07/2002; 08:56:16 MDT - Msg ID: 82473)
todays high
http://www.futuresource.com/news/news.asp?story=i4276833466435436864But not good enough!
JA
(08/07/2002; 09:08:49 MDT - Msg ID: 82474)
There are those out there that still hate gold
In searching the Web trying to get some idea of what caused the spike in gold this morning, I came across this comment from another site. It sounds like someone's feathers have been successfully ruffled.


Date: Wed Aug 07 2002 10:21
TheFatMan (GOLDEN CHEESEHEAD @ Kudlow & Cramer) ID#374435:
Copyright � 2002 TheFatMan/Kitco Inc. All rights reserved
hey GC, with 15-20 minutes to go in their show last Monday, which was followed by the disappointing interview of JPM's CEO Harrison by Maria, Larry Kudlow said, "I like rumors....one rumor coming out of the chat sites is that JPM has made a bad bet on gold." Cramer followed with a scurrlious attack on USAGOLD by saying something to the effect, "they're a cesspool." I was outraged. Call Burrelle's 1-800-777-8398 for tape. 43 bucks! no transcripts for this show

goldfool
(08/07/2002; 09:25:46 MDT - Msg ID: 82475)
JA - Turd Wars - Kramer calling USAGold a cesspool
Kind of like the septic tank calling the cesspool stinky, eh?
a nation of one
(08/07/2002; 09:26:08 MDT - Msg ID: 82476)
gold higher
Saudi Arabia's action of denying the U.S. access to its land for launching an attack against Iraq could be seen as substantiating the view that they are an enemy of the U.S. That might increase the probablility that such concept could became an official policy of the U.S. government, in which case the chances of a larger war would be likely.
steady
(08/07/2002; 09:26:27 MDT - Msg ID: 82477)
mr.lepraCON where is the pot of gold at the end of the rainbow?
IMF Warns Ireland About Deteriorating Fiscal Outlook
WASHINGTON (Dow Jones)--The International Monetary Fund warned Wednesday that Ireland's flagging medium-term fiscal outlook could endanger the country's economy after a decade of rapid growth.
IMF directors expressed concern over "the marked deterioration in the medium-term fiscal outlook, which, unless checked, could risk Ireland's growth prospects." They recommended the government target a balanced budget over the medium term, rather than current projected deficits of about 1% of GDP.
In its "Article IV" assessment, a nearly annual report on individual member countries, the IMF praised the Irish government for sound economic policies and an investor-friendly environment that supported average real GDP growth of more than 7% annually during the 1991-2001 period.
The IMF is projecting real GDP growth will fall to 3.2% this year from 5.9% in 2001, in the wake of the global economic slowdown and the bursting of the high-tech bubble. It said growth over the medium term is likely to trend down owing to a limited labor force and moderating foreign direct investment.
IMF Web site: http://www.imf.org

Carl H
(08/07/2002; 09:29:42 MDT - Msg ID: 82478)
@JA - Cesspool
We should give credit where credit is due -- Charlie Munger, co-chairman of Bershire Hathaway said at their shareholders meeting "Calling wall street a sewer is an insult to sewage." I agree -- and it includes the talking head cheerleaders.

steady
(08/07/2002; 09:34:50 MDT - Msg ID: 82479)
more jobs lost worldwide.
Flextronics Announces 527 Job Cuts At Five Swedish Plants
STOCKHOLM (AP)--Electronics company Flextronics International Ltd. (FLEX) said Wednesday that it will lay off 527 employees at five manufacturing plants in Sweden due to weak demand in the telecommunications sector
Belgian
(08/07/2002; 09:35:31 MDT - Msg ID: 82480)
Crude Oil....Gold.
OPEC and Russia do get along very well as to determine together what the "ideal" price is for their (the) crude.
Norwege and Mexico are on the same frequency. Crude Oil has *** Pricing Power ***. A very exceptional privilege these days. The POO and the threat against Iraq are a nice excercise in geopolitical balance. It is clear by now that the "barril" dictates, how much $ confetti it must generate and not the other way around. If the US$ should use excessive force and pressure the barril's pricing power...crude oil could counter-threathen with euro for oil ! All this as the bottomline above or regardless off, official declarations of friendship. If the love affair between the US and Saudi Arabia should break up...it would mean an acceleration of the above possible process.

A two day close above 26$ for POO, means staccato up. POG = 16 x POO as a normal balanced proportion : 25$ x 16 = 400$ per ounce ?
POO has a high volatility :
1999/2001 : 10$ > 34$ > 340%
2001 : 34$ > 17$ > 50%
2001/2002 : 17$ > 26$ > 53%
POG's volatility non existant '99 > '02 : 253$ > 330$ = 30%. And a $/� exchange rate volatility of 30% so far.
All this in comparaison with a USTB-10 yrs yielding 4,20% at the 9/11 bottom - vol. 30%.
Is this evidence for crude's importance and ongoing struggle ? I think it is.
These wildly fluctuating variables are a strong indication for global increasing in-stability. A result of the financialization and de-economization. One day we will be forced to create and agree on a new * stabilizing * standard. The euro can probably serve as a blueprint.

Euroland (Germany) will encounter budged deficits (unemployment). POG will benefit. Another attempt to 317$ > 330$ and...354$ ?
Pizz
(08/07/2002; 09:52:35 MDT - Msg ID: 82481)
Hey Cramer!
Why don't you call a couple of your friends over at JPM, you know, those are the guys that like to throw around the term "transparent", and have them open up their derivitives book?

What, are they afraid someone might steal their business model and lose all that business? Right now, I'd venture to say that they'd probably do somewhat, no, a lot better than just giving away their gold derivatives.

Make a few calls, I'm sure you can find a few takers for a few billion naked gold shorts.

Pizz
Leigh
(08/07/2002; 10:26:50 MDT - Msg ID: 82483)
"Red Gold Rising" and Lawrence Kudlow
http://www.shopnetdaily.com/store/item.asp?ITEM_ID=851Here's more of the description of the video "Red Gold Rising" that I mentioned the other day. Lawrence Kudlow is a commentator in the video!

"Red Gold Rising"

"A fascinating story about how Red China is using Swiss banks to launder gold just like Nazi Germany did before World War II, and for a similar purpose...to generate laundered money to corrupt the American political system and thus assist their planned imperialism....

"In America, however, this story is being suppressed, the most reasonable explanation being the political allegiance of our journalists. See the story they do not want you to find out about. American Investigator follows the money and gold trail, and reveals which politicians in America are benefitting. Filled with information on how both the Nazi and Red Chinese gold operations work. Includes interviews with Wall Street expert Lawrence Kudlow, who sees significant danger to our financial markets in this scandal.

"Not only is Red China using money to corrupt American politicians as the Nazis did before World War II, they are also using Wall Street to assist this operation. Famed Nazi-hunter Marty Mendelson is interviewed. He is mainly responsible for the recent scandal over Nazi gold by proving that the Swiss still had $2 billion worth of Nazi gold stolen from Jews. He also tells how he got some of it back to the victims."
Boilermaker
(08/07/2002; 11:34:55 MDT - Msg ID: 82484)
O'Neill paying ransom to get out of Argentina alive..
http://biz.yahoo.com/rc/020807/economy_argentina_o_neill_2.htmlO'Neill urges fast Argentine IMF deal in U-turn
By Simon Gardner and Anna Willard

(Updates with details of soup kitchen visit in paragraphs 14-16)

BUENOS AIRES, Argentina, Aug 7 (Reuters) - U.S. Treasury Secretary Paul O'Neill on Wednesday urged a speedy IMF pact for Argentina in an abrupt U-turn after suggesting just 10 days ago that fresh aid to the region could wind up in Swiss bank accounts.

On the last stop of a four-day tour to assess troubled Argentina, Brazil and Uruguay, O'Neill said he supported moving "as quickly as possible" to an IMF deal Argentina desperately needs to clamber out of its worst ever economic crisis.

The International Monetary Fund, in which Washington has the biggest vote, cut off aid to Argentina last December and months of tortuous talks have failed to restart aid.

As O'Neill spoke at the heavily guarded economy ministry, crowds outside waved banners with anti-O'Neill slogans. His arrival on Tuesday met protests by thousands of unemployed and leftists who blame Washington and the IMF for helping to sink the economy through ill-advised policies.

They burned a U.S. flag and photos and an effigy of O'Neill whose visit to a local plant of U.S. carmaker Ford (NYSE:F - News) was called off for what a company spokesman called "security and schedule reasons" -- after workers threatened to walk out in protest.

comment;
Argentinians just can't get enough of our guy, O'Neill. Too bad they can't.
steady
(08/07/2002; 11:40:17 MDT - Msg ID: 82485)
bank credit
sir gandalph and other noble knignts. my intention isnt to bombard and spam, rather my intention are to post relevant facts concerning the financial world and there possible combustability to the allready burning paper.
as a lil hobit ill know when ive overstepped my bounds when my posts are taken off. and i wont be hurt ill just know the limit. but i think they are important cause we dont always get to see some of these headlines in the local fishwraps.
Moody's Puts Dresdner Bank On Review for Downgrade
08-07-02 01:27 Pm
PRESS RELEASE: Moody's: Dresdner Bank On Review-Downgrade

Following is a press release from Moody's Investors Service:

London, 07 August 2002 -- Moody's Investors Service placed on review for possible downgrade the Aa2 long-term debt and deposit ratings of Dresdner Bank AG and of its rated subsidiaries as well as the bank's B- financial strength rating (FSR). Dresdner Bank's Prime-1 short-term ratings were confirmed.

Moody's said that the review of Dresdner's Aa2 long-term ratings is initiated in conjunction with the review of Allianz's Aaa ratings (Moody's commented under a separate press release about the rating review for Allianz), which is the owner of Dresdner Bank. Moody's said that one result of the review may be a tighter alignment of Dresdner's and Allianz's ratings to reflect the advanced integration of Dresdner in the Allianz group, especially in asset management and financial services for retail customers.

Moody's said that earlier this year it had downgraded Dresdner's FSR to B- from B. However, further problems in Dresdner's loan portfolio adds pressure on its financial fundamentals. In this context, Allianz's rating review was triggered by the difficulties of Dresdner's performance as a member of the group. Dresdner's performance was especially affected by the downturn in the capital markets and by the weight on its credit portfolio of a limited number of large-scale insolvencies in Germany and ongoing difficulties in Latin America. The review of Dresdner's B- financial strength will focus on the appropriateness of existing loan loss provisioning, addressing also the challenges of Dresdner in improving its modest profitability by additional cost cutting and restructuring initiatives.

The following ratings are being reviewed for possible downgrade:

Dresdner Bank AG: Aa2 long-term deposit and debt ratings; Aa2 MTN programme; Aa3 subordinated debt ratings; B- FSR.

Dresdner Bank AG, New York Branch:Aa3 subordinated debt ratings.

Dresdner Bank Luxembourg SA:Aa3 long-term deposit and debt ratings; A1 subordinated debt rating.

Dresdner Finance NV:Aa2 guaranteed long-term debt rating; Aa2 guaranteed long-term notes under their MTN programme.

Dresdner International Finance plc: Aa2 guaranteed long-term debt rating.

Dresdner Funding Trusts:A1 preferred stock ratings.

Dresdner Bank Ireland: Aa3 deposit ratings.

The following ratings are being confirmed:

Dresdner Bank AG:Prime-1 short-term deposit and debt ratings

Dresdner Bank Ireland: Prime-1 deposit and debt ratings and C- FSR.
Dresdner Bank Luxembourg SA:Prime-1 short-term deposit rating and C+ FSR.
Dresdner Finance NV:Prime-1 guaranteed short-term notes under their MTN programme
Dresdner US Finance Inc: P-1 short term debt rating.
Headquartered in Frankfurt, Dresdner Bank had total consolidated assets of around EUR500 billion as of 31 December 2001.





USAGOLD / Centennial Precious Metals, Inc.
(08/07/2002; 11:58:56 MDT - Msg ID: 82486)
Put a Foundation Under Your Portfolio
http://www.usagold.com/ProductsPage.html

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call Centennial for Arrangements
1-800-869-5115

Gandalf the White
(08/07/2002; 12:00:34 MDT - Msg ID: 82487)
Sir Steady --- I know of your "good" intentions !
steady (08/07/02; 11:40:17MT - usagold.com msg#: 82485)
bank credit
sir gandalph and other noble knignts. my intention isnt to bombard and spam, rather my intention are to post relevant facts concerning the financial world and there possible combustability to the allready burning paper.
===
You are saving all SURFING time.
Thanks
<;-)
TownCrier
(08/07/2002; 12:08:27 MDT - Msg ID: 82488)
Bond market woes begin?
http://biz.yahoo.com/rf/020807/markets_bonds_auction_1.htmlNEW YORK, Aug 7 (Reuters) - U.S. Treasury yields spiked higher on Wednesday after a record $18 billion auction of 10-year notes drew a disappointing reception from investors.

The sale achieved a bid-to-cover ratio of just 1.29, meaning investors bid for just 1.29 times the amount of bonds on offer, a decade low and far beneath the 2.15 seen in the last auction in May. The notes went at a high yield of 4.39 percent, well above expectations....
---------------

What's this? People are not eager to buy a huge boatload of treasuries at the top (i.e., at low yield)???

Call Centennial to understand what a REAL diversification is all about -- gold -- hard assets with supreme liquidity at your command and control.

R.
YGM
(08/07/2002; 12:13:16 MDT - Msg ID: 82489)
Leigh...Red Gold Rising.....
http://www.whatreallyhappened.com/ifiwere2.htmlHere's another paper along similar lines and thanks for the link and info..."RED WHITE AND BLUE STORM RISING"

"Go GATA"

PS: now lets see if POG can hold over Fri close...somehow I doubt it, unless all the Gold press of late and GATA work is finally starting to cause a squeeze....Seems like another Gold Bull trap by the Cabal as per usual....YGM.
Gandalf the White
(08/07/2002; 12:17:38 MDT - Msg ID: 82490)
Nice move today, SPOT !
But, the Crystal Ball shows that we may be "APPROACHING" the time of "Lightning in the Night" as portended by KING Aragorn III !!!
<;-)
Pizz
(08/07/2002; 12:25:00 MDT - Msg ID: 82491)
JPM, Derivatives, and Gibson's Paradox
http://www.gata.org/gibson_s_paradox.htmlHere's a little speculation and some idle thoughts regarding gold derivatives.

I just reread quite a bit on Gibson's paradox (and it deserves a reread every once in a while). If you study the chart of inverse gold vs. real interest rates at the above link, I find it rather interesting that the current diversion, attributed by some to Summers, begins right about the time of LTCM's problems. (and if someone else has made this correlation, I apologise, but I haven't seen or read one).

Now, I have to make a few assumptions, but I don't think they are in any way outlandish. I don't think it takes too much of of an imagination to assume that LTCM may have been involved in the gold carry trade. Even though the Russian default is creditied for the crisis, if LTCM had a short gold position via derivatives, what happened to the portfolio? As LTCM was bailed out by the FED, etc. would it be too much to assume that maybe JPM agreed to take over some gold derivatives as a kind of caretaker/consignment agreement?

It would also not take too much of a stretch of the imagination, since we now know that corporate profits really peaked around 1997, that maybe JPM kind of got into the "short gold" business about the same time?

Recently we've had a few other things happen. The head of JPM's gold trading department being reassigned, rumors (for lack of transparancey on JPM's part) that they reported to the comptroller of the currency a gold deriviatives position but no one can find it on their books (caretaker/consignment????), and the casual comment by Greenspan a few months back that they might even consider buying a gold mine.

Now there are rumors of JPM being in a bit of trouble and rumors the FED may just lower interest rates (a boon to the banks with a lower cost of funds, but a negative for short gold and long dollars).

Now, if I kind of piece all this together, If I were the FED and kind of got a short gold derivatives hedgebook thrown back at me (seems JPM doesn't need quite as large a staff in the precious metals department), or knew I was going to a few months back, and if it had a five year time spread like the report I read that went to the comptrollers office (sorry, can't remember where I read that, but it was recent), I'd be in the market for a mine too, even a partially hedged one.

Now, going back to Gibson's paradox, I really believe that if we could modify back the headonistic CPI numbers used for Gibson's paradox, the real interest rate graph might look a bit more like 78 -80. With the witch hunt going on for creative numbers, my feelings are that the government might just start reporting a little better regarding the CPI, and we probably could use a little bit of inflation news to cure the deflation paranoia, so guess what I think is about to happen to gold?

Up rather dramatically without a huge, armaggeddon spike due to derivatives covering and a major bank going TU.

I like it, hope I'm even partially correct.

Pizz

Pizz
(08/07/2002; 12:44:18 MDT - Msg ID: 82492)
Town Crier
Thanks for the Treasury auction news.

Now lets see how quick the rumors dry up about a rate cut (and the timing was just coincedental - right!). The bid to cover ratio is pathetic, but then when you consider what you're getting for your money . . . .

If we used the same marketing tactics to sell cars as the boys on Wall Street do to sell paper, we'd be in jail.

Pizz

TownCrier
(08/07/2002; 13:58:53 MDT - Msg ID: 82493)
HEADLINE: NY gold ends up as investors dodge jittery dlr, Dow
http://biz.yahoo.com/rf/020807/markets_precious_5.htmlExcerpts:

NEW YORK, Aug 7 (Reuters) - Bulls stampeded back into COMEX gold Wednesday, lifting it to a 15-day high as the dollar slid and the specter of a double-dip recession raised speculation that U.S. interest rates would be lowered again.

As a safe but low-yielding hard asset, gold remains a favorite alternative for investors nervous about U.S. economic growth, accounting scandals, a potential war with Iraq and fears of a repeat terror attack on the United States.

"A lot of buying is coming out of institutional fund managers and they are already looking forward to the possibility of a 1/4-point rate cut, which makes gold cheaper to hold," said George Gero, a veteran trader and director of the International Precious Metals Institute.

With the dollar weak and the stock market plumbing five-year lows, gold was sturdy until a shakeout late last month erased the stale longs held by speculators.

"We cleaned out all the longs, now we've cleaned out all the shorts. That's the way the market works," said Leonard Kaplan, president of Prospector Asset Management. "Now that the specs aren't there we can go higher."

----------(click url for more)----------

A great quote, Lenny. A keeper. All the more reason to go the less stressful and direct route of physical ownership.

Speaking of physical, have another look at the article's opening comment -- "a safe but low-yielding hard asset, gold remains a favorite alternative for investors".

That's a precious change in presentation. It wasn't long ago that the mainstream media would (bogusly) refer to gold as a "risky and sterile (no-yielding) financial asset" -- if indeed they were even willing to give it the benefit of calling it an "asset" at all. It would seem the media is relearning what we've known and said here all along.

Now, the thing to do -- being ahead of the curve -- is further examine and prepare your portfolio for the rest of the wider public to wake up to the benefits of gold ownership. You'll want to have the precious stuff cheaply now against the public wanting to have it in days ahead.

R.
jlfletc
(08/07/2002; 14:08:23 MDT - Msg ID: 82494)
(No Subject)
How typical lately, the gold shares give back more than half their gains today, even with the bullion holding on to it's impressive gain. It's almost embarassing to watch the weak hands sell out near the close just to lock in a wee bit of profit. What a bunch of losers.......
Black Blade
(08/07/2002; 14:08:43 MDT - Msg ID: 82495)
Stocks Manipulated In Late Trade

According to Bob Pisani, the stock market was manipulated higher by institutional traders buying futures to further the idea that the market has bottomed and hopefully to attract more investors. The idea that they are trying to push is that the volatility is part of a "bottoming process". Of course the traders are the ones creating the volatility. It appears that this head fake rally may draw in a few more people to be taken to the cleaners. Oh well, the August 14th deadline approaches and then the possible flurry of earnings revisions. It could get very "entertaining".

- Black Blade
sector
(08/07/2002; 14:22:59 MDT - Msg ID: 82496)
@JLFLetc It's Not Weak Hands Selling the Hui and XAU
Examine the big volume trades of the mainstream HUI stocks and one......finds pretty big 5,000 and 10,000 block trades that produce a drop in share price shortly thereafter. These are big sales. Most likely by insider funds trading a wave pattern set up by the rising COMEX pog. They sell the rallys.

In other words the bigger funds know about manipulation holding gold in a range so they buy the metal at its lows and quickly sell the shares as the cabal releases pog back up to the top of the "Cabal Approved range".

It's a kind of mini carry trade.
Siochaina
(08/07/2002; 14:25:56 MDT - Msg ID: 82497)
Twilight Hour
As if we couldn't predict....late NY Access trade is down

Interesting how the big movers of PM Stock seem to "know" aftermarket ...I guess just coincidence that PM stocks fell late today and access market comes thru down...and vice versa yesterday...they were grabbing every share they could especially late in day... and then 4PM EDT access gold moved way up setting stage for further climb and of course opportunity to sell yesterday's buys at great opening price this morning!

Black Blade
(08/07/2002; 15:09:12 MDT - Msg ID: 82498)
New Rate Cut Won't Help
http://www.safemoneyreport.com/home/daily.asp
Snippit:

An extra quarter-percent cut won't persuade companies to borrow more money -- they're already under heaps of debt as it is! In fact, many of them are too worried about paying off existing debts and staving off bankruptcy than to take on another loan.

Black Blade: It should be "interesting" when reality kicks in on Wall Street. The recent rallies have no fundamental basis. Debt is soaring, earnings are down or nonexistent, there are scandals galore, etc. It should be quite "entertaining" to watch the coming carnage.

- Black Blade

Off to the gym!!!

steady
(08/07/2002; 15:15:38 MDT - Msg ID: 82499)
dangerous dominos here, of a different sort.
Explosions/Colombia -2: During Uribe's Inauguration

BOGOTA (AP)--Explosions rocked downtown Bogota during the inauguration Wednesday of hardline President Alvaro Uribe, killing at least 10 people, witnesses said.
Three thunderous blasts shook the area around the parliament building minutes before Uribe took the oath of office from Senate leader Luis Alfredo Ramos. Arturo Robles, a cameraman for Associated Press Television News, rushed to the scene and saw at least 10 bodies, barely five blocks from parliament.
The corpses lay in the street and in a heavily damaged house in the poor Cartucho neighborhood, Robles said.


Moody's:Most Financial Institutions Have Rating Triggers

08/07/2002
Dow Jones News Services
(Copyright � 2002 Dow Jones & Company, Inc.)



By Christine Richard
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)-Ratings triggers are a common feature among financial institutions, though they do not pose imminent financial consequences for any issuers, Moody's Investors Service said Wednesday.

That could change, however, for a few institutions with notable triggers if business conditions were to worsen, Moody's said.

"If such rating triggers were activated, it is likely that the institution would experience additional rating stress beyond the original cause of the downgrade," said Laura Levenstein, group managing director for financial institutions at Moody's.

The rating agency's conclusions were the result of a survey of 438 U.S. financial institutions that asked them to privately disclose triggers in financial and operational contracts.

Levenstein declined to cite specific examples of financial institutions that could face downgrade pressure in more adverse business situation due to rating triggers, citing confidentiality agreements.

Moody's does not reference in its reports triggers that have not been publicly disclosed by a company.

It is best practice for companies to disclose the existence of triggers but not a requirement, Levenstein said.


(MORE) DOW JONES NEWS 08-07-02

03:03 PM

=DJ Moody's/Triggers-2: Most Banks Don't Reveal Key Triggers


There weren't any surprises in the types of triggers employed by financial institutions, but "I think the pervasiveness of triggers is surprising for everyone," Levenstein said.

Among U.S. banks, Moody's found that 29% had material triggers which, if activated, could have further negative rating consequences. Yet, 73% of these banks do not publicly disclose their rating trigger information, Moody's said.

Triggers at banks generally were related to derivative contracts, securitizations, asset-backed commercial paper programs, municipal depository agreements, backup liquidity lines, mortgage warehouse facilities, and Federal Home Loan Bank advances, Moody's said.

Among finance companies, Moody's says explicit rating triggers are less common.

At the same time, moderately high credit ratings are critical to competitive funding access and long-term viability of independent finance companies, creating implicit triggers, the rating agency said.

Moody's did uncover one finance company with consequential rating triggers related to asset-backed conduit facilities, but the company had language regarding the triggers changed, eliminating material risk related to the deal. The name of the company was not disclosed.


(MORE) DOW JONES NEWS 08-07-02

03:42 PM

=DJ Moody's Triggers-3: GSEs Have Implicit Below-AAA Trigger


Among real estate finance companies, there are few material rating triggers, Moody's said.

Yet, companies are vulnerable to downgrades because of the impact such rating cuts could have on their ability to act as a counterparty or an intermediary, according to the report.

For instance, the government-sponsored enterprises, including Fannie Mae (FNM) and Freddie Mac (FRE), depend "implicitly on their Aaa ratings, in that they are thereby enabled to intermediate between lower rated institutions and transactions, using their Aaa status to give credit support or to invest," the Moody's report said.

Moody's noted that while this implied rating requirement is well known among market participants, the agencies do not disclose or discuss the issue in their financial statements.

For the property and casualty insurance and reinsurance businesses, Moody's said rating triggers are common but pose no significant or imminent financial consequences to issuers.

The rating agency noted, however, that the industry faces exceptionally tough conditions, which means triggers need to be closely monitored.

Around 70% of companies have exposure to some type of rating trigger, with 16% of the triggers seen as material, or likely to have an impact on ratings in more difficult business conditions or if the company's ratings were at lower levels.


(MORE) DOW JONES NEWS 08-07-02
04:07 PM
=DJ Moody's/Triggers-4:Says Securities Firms Lack Disclosure
In the securities and asset management industries, triggers turned up in contracts including liquidity lines, swaps and other derivatives, asset-backed commercial paper programs and other securitization liquidity support, hybrid securities and warehouse facilities.
Moody's didn't express major concerns with these triggers though it faulted the industry generally for poor public disclosure of the triggers.
Among the financial guarantors, rating triggers don't pose major concerns, according to Moody's, which noted primary insurers face an implicit trigger on a drop below a triple-A rating as the loss of a top credit rating would put these companies at a significant competitive disadvantage.
Levenstein said she expected the greater attention on triggers generally to lead to some renegotiation of existing triggers. While such triggers have allowed companies to borrow at a lower cost in the short-term, they have raised risk to companies in the longer term.
Therefore, attempts to cut back on the use of triggers is seen as positive.
"In this environment of confidence sensitivity and volatility, it's not a negative but a positive change from a rating perspective," Levenstein said.

personally i think these are what many on the inside of the industry fear, and will do whatever it takes to prevent from happening, once it starts it will be hard to controll.> stay above the frost line. hahahahah



Mr Gresham
(08/07/2002; 15:31:50 MDT - Msg ID: 82500)
(No Subject)
Excellent detective work, Pizz! Is that a new technical chart formation, "TU"? ;) (Believe me, BB's vocab is seeping into daily thinking -- I can just hear JPM's floor traders yelling across the pit now "We just went T.U.!"

BB: "Off to the gym" is not a remark missed hereabouts -- just have that equipment to bolt together now -- one o' these days. If "Spike" would just settle down (maybe they can have a special GoldHearts Treadmill with the INO display?)

Gandalf: It may not be today -- but it will start like today. Just a wiggle upward, that doesn't stop.

steady -- you and all the other news reporters, thanks! -- well, if the media is not reading this site, they're not doing their jobs. But you know lots of them are -- maybe in their PJs late at night. Knowing we're largely right -- somewhere down the road -- and they want to be ready to report the developments. Any other cogent explanations out there?

That TV mention -- Cramer's had more than his 15 minutes of fame -- he's jealous of getting bumped offstage by a story he can't ride for another couple years? -- by contrast gold's time pushed OFFSTAGE (out of 3000 years history) will seem like a mere 15 minutes of "no respect".

Honest money. Honest banking. Honest accounting. Can't move forward without it. The sooner we get started, the better.
sector
(08/07/2002; 15:46:01 MDT - Msg ID: 82501)
pizz and Gibson's Paradox...the launch date...an exit strategy?
I Don't want to get too deep but......It was June 1996 when the long-standing inverse relationship between interest rates and gold was buried by Clinton, Summers, Rubin and continues through today by their successors. The divergence is sharp and unmistakable.

It was then that all the mutated bubbles were born and then fed steroids. It was then that gold's 200 day moving average was reversed to the downside. It was only a few weeks later that Chase Manhattan Bank launched a 225% interest rate derivative growth spurt so Chase was in on the rig from its inception.

LTCM most likely DID trade in gold and the rumored amount they were short was 400 tonnes...tonnage that had to be paid back from Fed sources. In the LTCM bailout: "Not a penny of taxpayer money was used"...Alan Greenspan 1998. But he didn't say anything about 400 tonnes of taxpayer gold did he?

The architect of the "New Economy" was Lawrence Summers. His discovery that there are only three variables involved in achieving economic equilibrium: Interest rates, the general price level and the price of gold must have been secretly hailed in the Oval Office and the Federal Reserve. The Fed already controlled interest rates�if they could somehow manage to control gold too...then they could ALSO control the general price level [Inflation]. And we all could live happily ever after...except for the nations that produce gold...oh well!

Instead of implementing an era of stability with this new macroeconomic finding, they gorged and kept gorging.

Now there seems to be no exit strategy save a devaluation to save the big banks and reduce the crushing debt the greedy bankers have created. Worse, they still face the massive resultant government growth structure that can no longer be serviced because the stock market's cap gains tax revenue is gone forever.

The Japanese have almost the same problem with moribund banks and a looming devaluation either through gradual inflation or a sudden deval.

Since BOTH country's economies are joined at the hip, a gradual simultaneous inflation strategy seems out of the picture. How, exactly, could Tokyo and Washington print together?

A sudden joint devaluation does fit the timing requirements in this suggested rescue strategy.

What about gold? No matter WHAT the Fed does, the shares and the metal will reflect appropriate historical value.

It must gall the Fed to realize that gold bugs may be the only winners in their crime.
misetich
(08/07/2002; 16:04:56 MDT - Msg ID: 82502)
JP Morgan - Citi - Enron - Enron's $1 Bln in Loans From Subsidiaries Probed, People Say
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVGF.RSWRW5yb24nSnip:

Citigroup Inc. loaned Transwestern Pipeline Co. $550 million and J.P. Morgan Chase & Co. provided Northern Natural Gas Co. $450 million, money the subsidiaries passed along to their Houston- based parent, according to an audit by the Federal Energy Regulatory Commission.

...............
The probes into the loans, which haven't been repaid, open a new front in the investigation of Enron and its former Chairman and Chief Executive Officer Kenneth Lay. Federal officials have been focusing on off-balance-sheet partnerships that an internal Enron investigation said hid $1 billion in losses and contributed to the company's bankruptcy filing on Dec. 2.

``The belief that (the money) wouldn't be paid back is tantamount to looting the subsidiary,'' said Mark. E. Robinson, a former deputy attorney general in the Reagan administration and now a partner with the Boston-based law firm Bingham McCutchen. ``That's fraud under a raft of federal statutes.''

The Wall Street Journal reported earlier today that the Justice Department and SEC are investigating the loans. Part of the money was used to pay off an earlier unsecured $250 million loan Enron got from Citigroup, the newspaper said, citing lawyers close to the case.

...............
Possible Fraud

``If the bank was complicit in a transaction designed to transfer some of its debt from unsecured to secured, with the understanding that Enron was going into bankruptcy, then you have conspiracy to commit bankruptcy fraud,'' said Mike Simons, a former federal prosecutor in New York specializing in corporate crime.

Under federal sentencing guidelines, Simons said, Enron and the banks may be fined as much as $4 billion, or four times the amount of the loan.

...............
*************

Misetich

Lets stay on the JP Morgan and Citi HOT TRAIL -

Got gold?
Pizz
(08/07/2002; 16:09:32 MDT - Msg ID: 82503)
Mr. G.
Through Unheardoffinancialdistressastheirstockpricedropsbelowtherealrateofreturn.

It's easier to abreviate.

Pizz

PS - Sector -thanks for a bit more backround on Gibson's Paradox.
misetich
(08/07/2002; 16:20:07 MDT - Msg ID: 82504)
Brazil to Get $30 Billion IMF Aid to Stem Market Drop -Investors said the new aid alone won't resolve the country's cash-flow problems
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVGVXhRbQnJhemlsSnip:

Since early May, Brazil's borrowing costs have surged as its currency, the real, has lost a fifth of its value and the benchmark bond has fallen more than 30 percent.

With half its obligations tied to the dollar, Brazil's interest payments rise $1.4 billion for every 1-percentage-point decline in its currency.

Investors are concerned that once in office the leading candidate in October presidential elections, Luiz Inacio Lula da Silva, would increase government spending and condone a default on Brazil's 1 trillion reais ($329 billion) in debt. Lula said in June he would honor Brazil's obligations.

Cash Flow

Investors said the new aid alone won't resolve the country's cash-flow problems and boost its sagging financial markets. The government has 11.4 billion reais in debt coming due today, and faces almost 100 billion reais in maturing Treasury bills by year- end.

``We are not optimistic in the short term,'' said Vanessa Barata, who helps manage about 1 billion euros ($969.4 million) in bonds for Esaf-Espirito Santos Fundos in Lisbon. ``There are some pressures in the market -- the country's debt load, the political scenario -- that dragged on the real and that hurt bonds, too.''

Brazil has borrowed $14 billion of a $15 billion credit line the IMF approved in September. The government plans to draw down the remaining funds by 2003, when it must begin making $11 billion in IMF payments. Its current IMF agreement expires in December.

............
The loan from the IMF is its third to Brazil in four years. The government by 2003 faces payments on almost 100 billion reais in maturing Treasury bills
...............
Of its total debt, Brazil owes the IMF $14 billion, including $11 billion due in 2003. The new accord is intended to reassure investors the lender of last resort for many emerging economies hasn't abandoned the country as its markets fall prior to the presidential election.

************
Misetich
Lets stay tuned - and watch it unfold - we'll find out IMF's attached strings in the next little while- Just a thought though, what happened to the IMF's September bailout? and what happened to the other 2 IMF's bailouts of Brazil?

Got gold?



misetich
(08/07/2002; 16:28:24 MDT - Msg ID: 82505)
S&P: JPMorgan Faces Downgrade On Additional Adverse News Aug 7 / 14:19 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1028744340000&sn=2&banner=mainwireSnip:

By Mark T. Kuiper

NEW YORK (MktNews) - Corporate bond analysts at Standard & Poor's
Corp. said Wednesday they expect to downgrade JPMorgan Chase debt
ratings should additional adverse news about the beleaguered company
come to light.

"It won't take much more bad news for us to downgrade" the
company's debt rating, maintained Tanya Azarchs, a senior bond analyst
with Standard & Poor's during a teleconference call Wednesday on U.S.
Banks' second quarter operating performance.

"JPMorgan Chase's liquidity is intact ... their (financial)
performance has been mediocre but stable over the last quarter. We
expect that to continue," she added.

The rating agency revised the investment banking institution's
outlook in January to negative from stable, citing rising loan losses
from a string of high profile bankruptcies such as Enron and K-Mart.

Moody's Investors Service changed its outlook on the long-term
ratings of JPMorgan Chase to negative from stable only just this past
month, reflecting Moody's concern about asset quality within its
wholesale banking portfolio.

Of note, the Moody's action came just one day after a JPMorgan
Chase investor conference call, where senior executives expressed strong
confidence that there were no pending adverse rating actions.

"There has been no fundamental impact on our business and the
rating agencies remain unchanged," said William B. Harrison, Jr.,
Chairman and Chief Executive Officer on the conference call on July 24.

Senior bank officials also denied any wrongdoing during the call of
allegations that they hide Enron's debt and looked to increase the
bankrupt energy trader's cash flows

The firm's ability to pay future dividends, also will not be
impacted by its current below book value stock price, as capital ratios
remain "well above targets," Harrison told investors.

The S&P analysts went on to say that they remain uncertain as to
the potential adverse fallout pending Enron-related lawsuits might have
on JPMorgan Chase, as well as the entire investment banking sector.

Thomas Foley of Standard & Poor's Financial Ratings Group,
explained that any adverse impact from Enron-related litigation would
most likely affect the bank's business reputation. Court ordered
financial settlements would be easily absorbed by the banking behemoth,
he said.

Looking at the U.S. banking industry as a whole, the analysts said
that second quarter performance has been flat, and despite widespread
corporate malfeasance, which has roiled credit and stock markets
recently, U.S. bank ratings have remained reasonably stable.

The analysts, however, said they maintain a cautious outlook going
forward as fears of more corporate bankruptcies build and signs the
economic rebound may not be very strong after all.

Overall, and despite the cautious industry outlook, U.S. banking
institutions have cash reserve levels that "more than cover" non
performing assets. The industry has particularly benefitted 40-year low
interest rates and accompanying strong residential mortgage and home
equity loan originations this past quarter.

"Residential mortgage volume will continue strong through the end
of this year," said analyst Victoria Wagner on the call. Mortgage
refinancings, meanwhile, are a tad off their highs of November 2001, she
added.

Wagner cautioned that while the residential market is doing well,
the commercial real estate market has been experiencing high vacancy
rates in all metropolitan areas this year, which will likely negatively
impact the industry going forward.
************
Misetich

Lets stay on this JP MORGAN HOT TRAIL! Who knows where it may lead?

Got gold?
Reprinted in its entirity for fair use and educational purposes

Bound Spirit
(08/07/2002; 16:31:11 MDT - Msg ID: 82506)
August 14th deadline
Black Blade:

You've mentioned the August 14th date a few times now - so I'm assuming you place some significance on CEO's having to certify financial statements. You may very well be right, but its significance will really depends upon the language contained in or required by the certification. For the CEO's with something to hide, any permitable language that suggests their right to ignorance (e.g. "to the best of my knowledge") will be used without hesitation.

My question is simple and somewhat rhetorical: Do you think our best and brightest in Washington will be able to limit any certification wiggle room; how will they police CEO compliance; and have they thought about the litigation consequences?

Thanks for all your work - you have certainly earned my respect.
misetich
(08/07/2002; 16:37:17 MDT - Msg ID: 82507)
ANOTHER scandal - Aon Corp (AOC) U.S. Securities and Exchange Commission had requested changes in the way it reports certain items in its accounts.
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1028743440000&sn=1&banner=mainwireSnip:

The market got the jitters just as Aon Corp. (AOC), the world's No.
2 insurance broker, announced it broke even for the second quarter, as
it took charges for writing down bad investments. However, the kicker
was that the U.S. Securities and Exchange Commission had requested
changes in the way it reports certain items in its accounts.
..............
Aon, second only to Marsh & McLennan Cos. Inc. (MMC) in the
insurance brokerage industry, said the Securities and Exchange
Commission questioned it on several items in its accounts, including
unstated investment losses, questionable timing of some costs and a
reinsurance recoverable items, and the decision not to consolidate
certain special purpose vehicles.
************
Misetich

Insurance companies are under severe stress - as their stock and bonds portfolio have taken a kicking and the worst is not over yet-

Got gold?

Pizz
(08/07/2002; 16:45:52 MDT - Msg ID: 82508)
Misetich - Brazil Bailout
Let's see, US Treasury funds IMF, IMF loans the money to Brazil, then Brazil pays the multinational banks (interest only of course)including JPM, Citi, etc.

Hmmm. . . .

(Is it a loan if you are aware that there is no intention of repayment ((principle of course)), or default fraud since countries can't go bankrupt yet).

Starting to figure out where the Enron boys learned their trade.

Pizz
misetich
(08/07/2002; 17:04:29 MDT - Msg ID: 82509)
US June consumer credit up 8.4 bln usd vs 9.5 bln rise in May
http://www.afxpress.com/afxpress2/afx/bn221255.xml.htmlSnip:
WASHINGTON (AFX) - Consumer credit rose a seasonally-adjusted 8.4 bln usd in June from the previous month, the Federal Reserve said.


Consumer credit has risen every month since Jan 1998.

The rise was slightly below expectations. The consensus forecast of Wall Street economists was for consumer credit to rise 7.8 bln usd in June.

Consumer credit rose 9.5 bln usd in May, unrevised from the initial reading.

The Fed said credit for revolving loans -- such as credit card loans -- rose 3.8 bln usd in June, after rising 2.4 bln the previous month.

Non-revolving credit, including auto loans and all other loans not secured by real estate, rose 4.5 bln usd, following a 7.1 bln increase in May.
***********
Misetich

Job losses are continuing - stock and market losses are continuing - yet consumers are borrowing more -
Credit card interest rates are high - wouldn't surprise if additional credit is used to pay existing loans interest costs and monthly minimums

The higher consumer/corporate debt rises the more the odds of a severe credit crunch - and the US $ bubble will burst

Got gold?





Got gold?



steady
(08/07/2002; 17:06:18 MDT - Msg ID: 82510)
arming for protection?or arming to protect?
Security Climate In Asia Changing
08/07/2002
Dow Jones News Services
Japan's build-up is believed to be the major reason behind the expansion of South Korea's submarine fleet. The German government last year approved the transfer of about $600 million in equipment so that Hyundai can begin building three new HDW Type 214 submarines at its shipyard in Ulsan. The South Korean navy late last year deployed its ninth HDW-designed submarine.
Similar rivalry with a neighbour was widely believed to be a factor in Malaysia's decision on June 5 to sign a contract with France's DCN and Spain's IZAR to take delivery of two Scorpene class submarines by 2008. Kuala Lumpur has also ordered an ex-French navy Agosta submarine for training. The three-submarine deal is reported to be worth over $1 billion.

In March, Singapore took delivery of its second ex-Swedish navy, Sjoormen-class submarine. Another two are on order. However, Malaysian officials have rejected suggestions that an arms race is under way with its tiny but militarily strong neighbour. With Singapore and Malaysia in the submarine club, Thailand is also considering its underwater options. The Thai navy has held talks about the possibility of buying three used Israeli submarines but most regional defence analysts doubt the deal will go through.
When all of these submarines on order come into service, Asia's key waterways could again become as crowded below the surface as they were at the height of the Cold War. "The security climate is changing rapidly as regional governments seek to boost their maritime influence," says Horobin, a veteran of deep-sea hide-and-seek with the Soviets. "It's really quite startling."
(See related sidebar: "The Region -- Malaysia -- Wanna Buy A Sub?" -- FEER Aug. 15, 2002)

Operative
(08/07/2002; 17:27:22 MDT - Msg ID: 82511)
@ Pizz
"(Is it a loan if you are aware that there is no intention of repayment ((principle of course)), or
default fraud since countries can't go bankrupt yet)."

These "loans" are(?) held by some type of collatoral???
Would love to see one of these IMF agreements in total. Maybe someone here knows more about this.

Your "intention of repayment" or lack thereof reminds me of one of personal home loans where it is interest only. In effect, the loan company/bank will hold/own the title forever and the home "owner" is nothing more than a glorified renter. Actually, worse off than a renter who can simply walk away with a 30 notice in most cases.

Just thinking aloud, my point being the banks will soon hold title to everything from homes to entire countries while they reap huge payments for infinity. Not a bad deal. Following the trend in automobiles, most will have one or more payments for life because of the constant trading in for new models.

The sad thing is most will never own anything. Monthly payments forever. Cell phones, phone lines, cable/sat TV, cars, houses, insurance, etc. I am amazed at the rent to own stores that have popped up everywhere. Obviously many even rent the sofa they sit upon and the fridge that keeps their beer cool. Nation of debtors, YOU BET! Which leads me to a final point. We have probably seen the last generation in this country that will be handed down anything of value from the previous generation. There will no longer be estates consisting of property, homes, land that will be passed to the next generation. I suppose there is hope that profits in the stock market (casino) will leave something for those who follow behind. Good Luck on that one.

Perhaps one of the reasons why those in Control wish ill to Gold. The average person, if aware, can purchase Gold Eagles or like products, and actually leave something of value behind.
misetich
(08/07/2002; 17:39:36 MDT - Msg ID: 82512)
Pizz
************
Let's see, US Treasury funds IMF, IMF loans the money to Brazil, then Brazil pays the multinational banks (interest only of course)including JPM, Citi, etc
***************

When you factor the country's currency devaluation - the debt increases in real terms - which adds additional burden and obligations - servant for life







Rock
(08/07/2002; 17:44:35 MDT - Msg ID: 82513)
Another Rate cut by Greenie! Can if really do the trick? (NOT)
Hi all, the way I see it one rate cut to any degree isn't going to change the absoute abuse, scandalous and just about every minipulation on you name just to name a few that this economy had to endure. In fact another rate cut will show how desperate the Fed is and its all coming out in the laundry. That which was done is secret for none observe will soon be revaled in the light for all to see. Droppig the interet rate is like trying to put a bandade on a motal womb. It ain't happenng, its not going to work! Meanwhile stay tuned for more sucker rallys and big spikes on prescious metals. The Volcano is getting reay to bust loose so be ready, get gold.

Great Heart
Pizz
(08/07/2002; 18:19:49 MDT - Msg ID: 82514)
Operative - Loans to Brazil
Hope their collateral is better than "the full faith of. . ." that we have on our FRN's. (Went to grab one out of my wallet to get the exact wording, but my last 3 singles and some change went for my morning Mocha).

Let's see, 1 greenback buys about 27% of my morning drive thru coffee fix, but with value added, CPI increased cafeen content, along with the chocolate, plus the better quality reinforced double cup, we may be actually able to show that the equivalent 20oz cup of java that I could buy five years ago for .49 has actually decreased in price. . . . . .

And while I'm on a roll, I think I figured out how to account for loans with negative interest rates. The bank loans us money then pays us interest every month to improve our cash flow, and since the present value of a loan with negative interest is actually higher than the original principle, the bank should be able to book a capital gain on the appreciation, then do an interest rate swap in exchange for a forward, preferred, deferred for an optional 15 years gold contract that is properly hedged with a lease from the Seventh National Bank of Rio de Brazil, who holds the reverse SDR from the IMF . . . gee, I think I just found our collateral.

Simple enough? Think I'll buy some more gold shortly.

Pizz

steady
(08/07/2002; 18:30:27 MDT - Msg ID: 82515)
one entity buying?
http://finance.yahoo.com/q?s=@^dji&d=c&k=c1&t=1d&a=v&p=s&l=on&z=m&q=l Notice this!!
This page shows all the 1 day charts for the 30 dow components. Isn't it interesting that so many of them have the same pattern - especially around close? Its as if one entity is buying.

sector
(08/07/2002; 19:05:34 MDT - Msg ID: 82516)
@Bound Spirit With only 25 of 1000 CEOs Recertifying their 10 - Q Reports...
...as of Friday, we might guess......that these guys are thinking long and hard about the consequences of a misstatement.

I tend to think that if there were wiggle room many more would have already availed themselves and signed early.

The absolute disaster situation for the Administration, Congress and the economy happens if the bulk of CEO's refuse to sign on Constitutional Fifth Amendment grounds.

Should such a thing occur, it would only confirm shareholder's worst fears... that a majority of the top 1000 US corporations have something to hide.

One can only imagine the impact on already stressed mutual fund redemptions!
Waverider
(08/07/2002; 19:12:37 MDT - Msg ID: 82517)
Siege Engine continues....
When Lady Waverider and the messenger reached base camp in the forest, Sirs Powell and Gresham were waiting for them. They assisted the messenger off the horse and laid him by the fire. The arrow head had penetrated deeply into the muscle but had not punctured the lung or other vital organs - he had been very lucky. She drew her instruments from their wrapping, and had her assistant, Lady Sweet Sixteen heat the scalpel over the fire. It would be used to extract the arrow head and to cauterize the vessels. Sir Gresham provided a flask of brandy to the messenger to numb the pain, and then placed a piece of saddle leather between his teeth and lay him on his stomach. The two secured the messenger with the full weight of their bodies. The arrow was snapped short and once the knife was hot, it was used to release the arrow head...intact...at that very moment the messenger let out a cry of anguish and collapsed into unconsciousness.

Then she heard it...the distant sound of war drums...she listened...she knew that familiar beat and she knew what it meant. She left the cleansing and bandaging of the wound to Lady Sweet Sixteen - an eager and competent assistant with a thirst for learning. She gathered Ladies Siochaina, Goldentrill, and Leigh and they mounted their horses and headed back toward the battle field. They arrived at the side of Sir Gandalf the White while the brilliant aura still offered a wall of protection. They stood captivated at the scene in front of them and when the aura slowly faded it was apparent that the Knights had secured control of the inner courtyard. The Goldbugs looked to Sir Black Blade for direction and he knew instinctively that the timing was not right to advance upon the last stronghold. The men had fought hard and needed food, rest, recuperation, and the strategy needed to be determined...carefully, methodically, artistically, but most importantly without opportunity for failure.

Lady Siochaina approached Lady Waverider and reported on the number of wounded while Ladies Goldentrill and Leigh attended to the most critical. There would be enough supplies to tend to all of them, but the problem was not with the wounded Goldbugs, it was with the wounded enemy. Suddenly a deep voice echoed through the silence of the moment. Lady Waverider flashed her green eyes to the castle and saw Sir Black Blade sitting high on his horse in the open gate..."Kill them NOW, all the wounded, all the enemy who are still alive" he boomed. One of the enemy was at the foot of Sir Rock's horse and he threw his arms in the air and begged for mercy. No one moved...only the west wind in the trees and the steady swishing of a horses tail could be heard...

Sir Rock dismounted his horse and placed himself between the fallen enemy soldier and Sir Black Blade. He spoke slowly but clearly for all to hear..."This man asks for mercy - he deserves to live." Sir Black Blade responded immediately, "The man is nothing more than a grasshopper...he deserves to die!" "He asks for bread and you would give him a stone?" Sir Rock asked. "He serves The Lord of the Castle...there is no mercy, he deserves to die!" The noon sun sweltered down and Lady Waverider blinked away a dropplet of persperation that had fallen onto her dark eyelash for she dared not move. This was the first time there was confrontation within the rank and the world stood still, and the silence was deafening. Then, with deliberation and authority Sir Gandalf the White spoke...all knew that his word was Law. "THIS is what shall be done with the enemy......
steady
(08/07/2002; 19:27:45 MDT - Msg ID: 82518)
imf loan/slavery/
http://www.gold-eagle.com/research/salinasndx.htmli read in the imf by laws that in order to part of the imf u cant go to a gold standard! i wonder why that had to be included in the terms, however as victor hugo salinas states a silver standard might do the trick to break the yoke of the imf over its fiefdom in s.america.got gold....give it a silver lining!
misetich
(08/07/2002; 19:33:38 MDT - Msg ID: 82519)
36 US states see personal income tax revenues fall
http://www.forbes.com/newswire/2002/08/07/rtr689562.htmlSnip:

NEW YORK (Reuters) - Thirty-six states saw their personal income tax collections fall in the second quarter, hurt by the weak economy and the bear market that sliced tax revenues from capital gains.

Total personal income tax collections for the 36 states fell by 23 percent in the second quarter from the year-earlier period, according to a new survey of the 36 states that provided the Nelson A. Rockefeller Institute of Government with data. The Institute's report was issued on Thursday.

California, which faces a $23.6 billion budget deficit, suffered the biggest blow, with tax collections down 24.7 percent in the second quarter, according to the new survey.

New York saw tax collections dive 19.4 percent. New York, whose economy suffered a blow after the airplane attacks last September, faces a budget gap estimated at as high as $6 billion.
...........
It's really been a horrible fiscal year for revenue collections in most states," Senior Analyst Nicholas Jenny, who wrote the Institute's report, said in a statement.

***************

Misetich

So much for the much heralded US ecomonic recovery we've been hearing from the Bush Economic Team

States need to adjust their budgets accordingly - how?
Lower spending
Cut programs benefits
Increase taxes

Got gold?


Black Blade
(08/07/2002; 19:41:29 MDT - Msg ID: 82520)
Order Requiring the Filing of Sworn Statements
http://www.sec.gov/rules/extra/ceocfo.htm

UNITED STATES OF AMERICA
BEFORE THE SECURITIES AND EXCHANGE COMMISSION
File No. 4-460: Order Requiring the Filing of Sworn Statements Pursuant to Section 21(a)(1) of the Securities Exchange Act of 1934
The Commission has commenced an investigation to ascertain facts, conditions, practices and other matters relating to the financial statements and accounting practices of certain large publicly traded companies.

In light of recent reports of accounting irregularities at public companies, including some large and seemingly well-regarded companies, the purpose of the Commission's investigation is to provide greater assurance to the Commission and to investors that persons have not violated, or are not currently violating, the provisions of the federal securities laws governing corporate issuers' financial reporting and accounting practices, and to aid the Commission in assessing whether it is necessary or appropriate in the public interest or for the protection of investors for the Commission to adopt or amend rules and regulations governing corporate issuers' reporting and accounting practices and/or for the Commission to recommend legislation to Congress concerning these matters.

As part of this investigation, the Commission believes it necessary to require written statements, under oath, from senior officers of certain publicly traded companies, identified in the list attached hereto (the "Companies"), with revenues during their last fiscal year of greater than $1.2 billion, that file reports with the Commission pursuant to the Securities Exchange Act of 1934, regarding the accuracy of their Companies' financial statements and their consultation with the Companies' audit committees.

Accordingly, pursuant to Section 21(a) of the Securities Exchange Act, it is:

ORDERED, that the principal executive officer and principal financial officer of each of the Companies shall either (a) file a statement in writing, under oath, in the form of Exhibit A hereto, or (b) file a statement in writing, under oath, describing the facts and circumstances that would make such a statement incorrect. In either case, such statement shall further declare in writing, under oath, whether or not the contents of the statement have been reviewed with the Company's audit committee, or in the absence of an audit committee, the independent members of the Company's board of directors. Such sworn statement shall be delivered for publication in written form to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549 by the close of business on the first date that a Form 10-K or Form 10-Q of such Company is required to be filed with the Commission on or after August 14, 2002.

By the Commission.

June 27, 2002

Jonathan G. Katz
Secretary



Exhibit A
(Corrected) OMB Number: 3235-0569
Expires: January 31, 2003

Statement Under Oath of Principal Executive Officer and Principal Financial Officer Regarding Facts and Circumstances Relating to Exchange Act Filings
I, [Name of principal executive officer or principal financial officer], state and attest that:

(1) To the best of my knowledge, based upon a review of the covered reports of [company name], and, except as corrected or supplemented in a subsequent covered report:

no covered report contained an untrue statement of a material fact as of the end of the period covered by such report (or in the case of a report on Form 8-K or definitive proxy materials, as of the date on which it was filed); and

no covered report omitted to state a material fact necessary to make the statements in the covered report, in light of the circumstances under which they were made, not misleading as of the end of the period covered by such report (or in the case of a report on Form 8-K or definitive proxy materials, as of the date on which it was filed).
(2) I [have/have not] reviewed the contents of this statement with [the Company's audit committee] [in the absence of an audit committee, the independent members of the Company's board of directors].

(3) In this statement under oath, each of the following, if filed on or before the date of this statement, is a "covered report":

[identify most recent Annual Report on Form 10-K filed with the Commission] of [company name];

all reports on Form 10-Q, all reports on Form 8-K and all definitive proxy materials of [company name] filed with the Commission subsequent to the filing of the Form 10-K identified above; and

any amendments to any of the foregoing.
[Signature*]
[Name]
[Date] Subscribed and sworn to
before me this ____ day of
___________ 2002.

/s/_______________________
Notary Public

My Commission Expires:


[* Separate statements to be signed by each of the Principal Executive Officer and the Principal Financial Officer.]


Black Blade: There may be some "wiggle room" involved, however, any misstatements will likely invite a lot of unwanted attention and of course anything that is strikingly out of the ordinary will certainly invite an investigation by the SEC. That alone could raise concerns affecting the share price and even lead to litigation and possibly very costly civil lawsuits. With the new accounting regulations and the law recently signed by George W. Bush, we consequences for knowingly lying on these sworn affidavits will likely result in prison time. Obviously nearly every CEO is being very careful these days and consulting with attorneys and in house accountants. As the books are checked and rechecked it is likely that we will see several revisions. So far nearly all earnings and revenue revisions have been lowered. Wall Street so far seems to be somewhat unaffected by the lowered earnings and gloomier outlook as the media and Wall Street analysts/strategists suggest that the market has already "bottomed". It should be quite "interesting" and provide us with what may prove to be a lot of amusing "entertainment" if improved earnings do not materialize.

So far 80 companies have submitted forms and 31 have sworn to the statements in the exhibit A form. Soon after the deadline the SEC is supposed to comb through the financial sheets and compare notes. Meanwhile, the FBI has set up a hotline for any potential "whistle blowers". In fact several investigations are reportly underway and others are planned.

Trapper
(08/07/2002; 19:48:28 MDT - Msg ID: 82521)
Sir Sector
5thWhat do you think if all of us refused to sign our April 15th book keeping on the 5th?
Live small.
RJ
Black Blade
(08/07/2002; 20:02:41 MDT - Msg ID: 82522)
Crude Oil Falls as Report Signals Weakening Demand in U.S.
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVFQZRQHQ3J1ZGUg
Snippit:

New York, Aug. 7 (Bloomberg) -- Crude oil fell after the American Petroleum Institute reported the biggest weekly decline in U.S. refining since early March, signaling reduced demand for oil to make fuels such as gasoline and diesel. U.S. refineries cut processing last week to 93.3 percent of their capacity, down 1.9 percentage points from the week before. Gasoline inventories rose, the report said. The summer vacation season, when gasoline demand rises to an annual peak, will end with the Labor Day holiday early next month. ``Refineries will continue to diminish output,'' said David Becker, manager of energy derivatives trading at Citibank NA in New York. ``Gasoline demand is set to fall soon and there is a lot of heating oil here and plenty in storage in Asia and Europe.''


Black Blade: Obviously the claims of the much touted economic recovery appear to be a bit premature. Declining oil demand suggests that the economy is contracting even more. Actually that is fortunate as there have been few if any preparations for an increase in petroleum supply. Thankfully the US in locked into a deepening recession and that takes the pressure off of the limited energy supply.
Golden Bear
(08/07/2002; 20:03:49 MDT - Msg ID: 82523)
THE MANDRAKE MECHANISM...What is it? Money from nothing, usury, inflation and boom-bust cycles...
http://www.bankindex.com/read.asp?ID=1111Excellent description of money and how it's created and destroyed...

Perfect argument for gold bullion in possession.
Black Blade
(08/07/2002; 20:16:16 MDT - Msg ID: 82524)
A Veteran Goes Long on Gloom
http://www.businessweek.com/bwdaily/dnflash/aug2002/nf2002086_1441.htm
Ignore the rallies, warns Nelson Peltz, who says war and corporate scandals will continue to make the market "the place not to be"

Snippit:

With the Dow Jones industrial average surging about 304 to 8384 points as of the middle of the Aug. 6 trading day, the bulls are back on center stage. After three consecutive sessions of pummeling, stocks rebounded: The Standard & Poor's 500-stock index was up about 4%, to 867, and the Nasdaq composite index had risen 4.5% to 1264. Some of the bulls are suggesting that the market is gaining renewed ground based on the Street's growing belief that the Federal Reserve Board will cut interest rates to boost the faltering economic recovery.

The bears, however, are not buying that idea. Whether or not the Fed cuts rates would be immaterial, some of them assert. They believe the market will continue to head south for some time (see BW Online, 8/6/02, "Dancing to the Street's Limbo Beat"). One unrelenting bear is Nelson Peltz, a savvy investor and a prominent dealmaker, who has witnessed and participated in all the big bull and bear markets.


Black Blade: There are just too many negatives to say that the worst is over. The recent runs on the markets appear to be more of reallocation by funds switching out of gains from bonds and into stocks. The thinking is that the run for bonds may be coming to an end and the stock market may have hit bottom or at least will trade sideways for a while. However, mom and pop investors continue to sit this one out as they are not convinced. Neither are most professionals who have lived through past recessions. Many of those jumping in now are those who were talking about "capitulation" not long ago. Too much hope is placed on a Fed rate cut as if the 11 previous cuts did any good. Sentiment can easily go sour as new scandals emerge, earnings have proven to be utterly pathetic, consumers cut back spending and record debt levels are rising (and not likely to ever be repaid in many instances). The resulting carnage should be quite "entertaining".

Black Blade
(08/07/2002; 20:26:16 MDT - Msg ID: 82525)
US Mint prepares plan to buy silver for Eagle coin
http://www.forbes.com/markets/newswire/2002/08/07/rtr689249.html
Snippit:

WASHINGTON (Reuters) - The U.S. Mint said Wednesday it is preparing a final plan to buy several million ounces of silver annually to manufacture a collectable silver eagle coin. President Bush two weeks ago signed into law a program allowing the U.S. Mint to buy silver supplies, now that its stockpile is nearly depleted. The law will benefit silver mines in Idaho and Nevada, which are eager to sell the metal to make the Silver Eagle Bullion coin. The industry expects the Mint to begin buying silver early in 2003. "It's a win-win for the silver industry," said Mike DiRienzo, a spokesman for the Silver Institute. "This could provide a boost to the market once the Mint starts purchasing from the open market." The new law also requires the Treasury Department to study the impact on the U.S. silver market and prepare a report for the Senate and House banking committees.


Black Blade: Old news, yet it is finally making its way into the mainstream media.

sector
(08/07/2002; 20:31:58 MDT - Msg ID: 82526)
Trapper On Taking the 5th on April 15th
my income is so low that there can't be anything there to incriminateso I might as well show the IRS mopes how small it is.

On living small:

Finding ways not to spend money has become an obsession Darwin would have applauded.
Trapper
(08/07/2002; 20:40:47 MDT - Msg ID: 82527)
Sector
You used a word that I was not aquainted with "income" so I looked it up...yah me neither. Live small.
RJ
Black Blade
(08/07/2002; 20:42:56 MDT - Msg ID: 82528)
Americans hike their borrowing in June, despite dampened confidence in economy
http://www.boston.com/dailynews/219/wash/Americans_hike_their_borrowing:.shtml
Snippit:

WASHINGTON (AP) Americans shrugged off worries about the economy's health and the recent stock market slide and increased their borrowing in June at a brisk pace. The Federal Reserve reported Wednesday that consumer credit rose by a seasonally adjusted $8.4 billion, or at a 5.9 percent annual rate, in June from the previous month. The increase, bigger than the $7.8 billion advance many analysts were forecasting, left consumer borrowing at $1.71 trillion. Economists said that low interest rates, rising home values and extra cash from the refinancing boom are supporting consumer spending. This, in turn, is helping to offset some negative factors, such the volatile stock market, Americans' eroding confidence in the economy, and their shattered trust in corporate leaders following a wave of accounting scandals.


Black Blade: Digging a deeper hole all the time. This certainly not the time to get sucked in to get deeper in debt. Thankfully I am debt free, I am beholding to no man or corporation. Then again refinancing a mortgage if rates go lower and locking in might not be a bad idea if it allows the debt to be paid off sooner. No debt is better than any debt. As always get out of debt, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. Freedom is much better than slavery.

Trapper
(08/07/2002; 20:46:06 MDT - Msg ID: 82529)
Sir AJ
KramerI did not see Kramer...seldom do, but did he really mention USA Gold by name. I hope so now we will all be famous. Oh I better get an agent before all of you folks get all the good ones. Live small.
RJ
Black Blade
(08/07/2002; 20:58:29 MDT - Msg ID: 82530)
Re:Trapper

Cramer only said that chat rooms were "cess pools". He did not mention any particular one. Some one is pulling your leg. Cheers!

- Black Blade
Golden Bear
(08/07/2002; 20:58:44 MDT - Msg ID: 82531)
Argentinian nightmare continues... Bank tellers beware!
http://www.msnbc.com/news/791018.aspSnippit:

"...As Argentina endures a horrific economic crisis, bank lobbies have turned into high-risk workplaces. Just ask Francisco Bidetti, an account executive at a Bank of Nova Scotia branch here.

IN May, Mr. Bidetti was posted at the door to give customers bad news. The bank's Canadian parent company was halting most operations in Argentina. Since December, depositors had access to just a small portion of their savings. Throughout the banking system, the government has limited weekly withdrawals by individual depositors to just 300 pesos, about $85.
One agitated bank client threatened to get a gun unless Bank of Nova Scotia returned the $40,000 he had on deposit, Mr. Bidetti and other bank workers say. Then the depositor pulled out a syringe and stabbed Mr. Bidetti twice in the arm with the needle. Mr. Bidetti says the depositor told him the syringe contained HIV.
Mr. Bidetti has now twice tested negative for the AIDS virus, but he is still shaken. "I understand his problems, but it's just not my fault," says Mr. Bidetti.
These days in Argentina, once Latin America's wealthiest nation but now an economic disaster, bankers� hours are full of woe. Unable to vent their wrath over the deposit freeze on the five Argentine presidents who have served since December, bank customers are reaching out and throttling the neighborhood teller. In April, an enraged customer at a branch of Credicoop bank hurled a 10-inch glass vase that hit operations manager Gustavo Labitzke just above the left eyebrow. The cut required four stitches...."
Horatio
(08/07/2002; 21:04:33 MDT - Msg ID: 82532)
Barrick
By GAVIN MAGUIRE
OsterDowJones Commodity News


NEW YORK -- Gold futures soared Wednesday on rumors that Barrick Gold Corp. was buying gold to cancel forward sales. A weaker U.S. dollar also spurred the precious metal's rise.

The most active December gold contract on the Commodity Exchange division of the New York Mercantile Exchange climbed $8.80, or 2.9%, to $316.10 a troy ounce.

Dealers said rumors circulated early that Barrick, a Canadian mining company, had opted to buy back part of its forward-sales agreements through two large U.S. investment banks, which duly bought heavily.

A Barrick spokesman said he wouldn't comment on the rumor, but referred to the company's recent announcement that it would be reducing its hedge book by a further one million ounces by the end of this year.

As a result of the rumor, many players held off selling into the resulting strength until clarification came as to the origin of the buying interest.

The rising prices then prompted increased levels of trade interest, as various U.S. commission houses either covered short positions established within the past two weeks, buying futures to negate previous sales, or bought futures outright. Indeed, one investment bank was said by traders to have bought around 2,000 contracts within the first hour of trading alone, which coincided with the majority of the price move seen Wednesday morning.

John Johnston, vice president at Refco LLC, said, "basically, the rumors were of a quality name making a buyback, and that caused the sellers to hold off and drew in a drag of buyers."

He and others said that actual volumes were still relatively light -- estimated at 42,000 lots versus 25,000 Tuesday -- and that the movement was accentuated by the prevailing thin conditions during the slow summer months.

Adding to the upside momentum was a weaker dollar against other major currencies, which rendered gold slightly cheaper to non-U.S. consumers, and statements from giant gold miner Newmont Mining Corp. that declining gold production would help prices over the coming five years.

"When we look at the fundamentals for this industry over the next three, four, five years, we see production declining 2% to 4% a year," said Newmont Chief Executive Officer Wayne Murdy on a conference call discussing the company's second-quarter results released Wednesday. "We think that bodes very well for gold prices," he said.

Bound Spirit
(08/07/2002; 21:08:19 MDT - Msg ID: 82533)
Aug 14 revisited
Beautiful coverage of the 8/14 issue BB, where DOOOO you find things so quickly?

However, I think there's a lot of wiggle room. We shouldn't sell these CEO's/politicians short. After experiencing the likes of Clinton, OJ attorney Johnny Cochran and the Gore election team, there's no limit I place on humans ability to lie, cheat, steal and bribe for their own salvation and benefit. If there's one constant in this world, it's the endless creative supply of survival machinations.

As far as I'm concerned the legal profession (i.e. who CEO's are now consulting) will employ delay, misdirection and obfuscation tactics to erode the SEC resolve and available funding. That's what I would do if I was a crook and had something to hide. What's the alternative? Come clean? If you want to hide something that is currently hidden, think about how easy it would be to complicate the significance, intent and transference of data that these ignoble CEO's will base their certifications on - especially when accounting is a judgemental science and no one understands it anymore anyway.

In our current legal system, once real complications are introduced � uncertainty is usually the result and the outcome will be, at worst, a crap shoot, and at best � acquittal (ie Clinton).

Now you may have a point about how the common shareholder may perceive any "confusion". But if the confusion appears widespread, its possible the media will start siding with their sponsors and turn the certification into a witch hunt. Just a thought.

Also, look at the data restatements made 7/31/02. Three quarters in recession instead of one? I guess that's just page 10 news to the common investor. If 8/14 comes and goes and some time elapses before irregularities are made public � I bet that will be page 10 news too � at least for the common investor. IMHO, the only way to get these guys is when they get themselves � eg Enron.

Sector:

There's no way they'll take the 5th. We'll now let me take that back. They might if all they're thinking about is themselves and have no concern for their company's stock values, pension plans, employees, etc.; which is a distinct possibility. But if they're trying to have their cake and eat it, they know the common investor isn't THAT stupid.

I think we'll all be amazed how CEO's will spin their way through this come 8/14.

Thanks for the input!
Cavan Man
(08/07/2002; 21:12:05 MDT - Msg ID: 82534)
ah, sector ........
You're too modest. You'd pay the piper to play 18 at a nice track wouldn't you?
Gimli_
(08/07/2002; 21:19:38 MDT - Msg ID: 82535)
Royal Bank of Canada's Leaked Gold Report Reveals Trouble Ahead. . .
So the question obviously is: "Will the gold rally ever begin?" The following arguments emphatically suggest that it will more than rally; it will explode to the upside."So the question obviously is: "Will the gold rally ever begin?" The following arguments emphatically suggest that it will more than rally; it will explode to the upside."

This report was posted here a couple days ago, but I thought the link was worth posting again....
Gimli_
(08/07/2002; 21:21:09 MDT - Msg ID: 82536)
Royal Bank of Canada's Leaked Gold Report Reveals Trouble Ahead. . .
http://www.nationalinvestor.com/leaked_gold_report_reveals_troub.htmOoops.... This time with the LINK above.

"So the question obviously is: "Will the gold rally ever begin?" The following arguments emphatically suggest that it will more than rally; it will explode to the upside."

This report was posted here a couple days ago, but I thought the link was worth posting again....
sector
(08/07/2002; 21:40:19 MDT - Msg ID: 82537)
Any time you are ready Caver...my "Never Go Left" Swing correction is INTACT...for now.
So come on down buddy! It's $40 with a cart at World Woods, Pine Barrens in Brooksville Florida...the highest PGA rated course in the state. Tiger practices there with Mark O'Meara. They zoom about the course with their own ranger running interference.

Been scheming all Summer. The courses are perfect and practically empty.

One catch...by the time you tie your shoes you are drenched in sweat and fumbling for an umbrella...we have had a ton of rain this Summer.
Black Blade
(08/07/2002; 23:03:21 MDT - Msg ID: 82538)
Barrick Unwinding Hedges

For those who follow the afternoon Gold Market Report here at USAGOLD, it appears that Barrick is the company doing the buying. Yesterday I brought up AngloGold is bying for time to unwind as well. Newmont has accelerated the unwinding of their hegdes inherited from the Normandy acquisition. The consensus among gold producers is that prices will be going much higher and that nothing can stop it. Counterparty bankers are hurting from a number of bad bets and rumored liquidity problems and the gold derivatives are just one sword hanging over their heads. The surprise buying caught many traders off guard, however, it is likely that this buying will continue for some time to come. Many of these hedge positions are already seriously underwater and gold producers want to get out in one piece. Also, shareholders are reportly screaming bloody murder after seeing the stellar performance of unhedged gold producers and the relatively muted performance of mega-hedger shares. It truth the day of the hedger is over and everyone now is willing to acknowledge that fact.

- Black Blade
Gandalf the White
(08/08/2002; 00:03:30 MDT - Msg ID: 82539)
The Gauntlet ! <;-)
Careful there Lady Waverider --- I almost had a heart attack when I reached the end of your GREAT "Seige Engine" message ! Then I could not stop laughing for ten minutes !!
<;-)
Gandalf the White
(08/08/2002; 00:10:41 MDT - Msg ID: 82540)
Siege Engine continues....
The Old Wizard's voice rang out clearly within the courtyard, so that even the defenders within the Castle could easily hear his words. "THIS is what shall be done with the enemy." "They shall be treated as Prisoners of War and assisted with medical aid as if they were your brethren !" "These combatants fought bravely ONLY because they had pledged their services to our enemy, The Lord of the Castle, Sir Greenie." "I shall wager a gold piece, that most did not have the choice of NOT making THAT pledge, as they were not given the chance that we Goldhearts have, TRUE PERSONAL FREEDOM to make our own destiny!" "Ask each and everyone of these injured combatants to give their pledge to either withdraw from this War, OR, when able, to join our cause to FREE GOLD and assist Sir Black Blade in our quest." "Some too, no doubt, have secret information that will assist us in our final attempts to bring The Lord of the Castle and his lapdog The King with No Name, to their knees !"
"Hear, Hear !" shouted Sir Rock and Sir Steady in unison.
<;-)
Mr Gresham
(08/08/2002; 00:32:46 MDT - Msg ID: 82541)
Pizz, sector, Gandalf, Waverider
Gandalf: Well said!

Lady W: This IS golden company, indeed! I say, spare their lives, but make them return the property they gouged from the serfs, and make them work with their hands in the fields helping those they took advantage of before. No million dollar mansions exempted in bankruptcy filings.

Pizz, sector: Does the undoing of Gibson's Paradox mean the opposite shall follow? Higher interest rates, higher gold? Or should it revert to the norm, where higher rates would indicate lower gold?

I don't know enough about it, but does it matter that it is a time when an unbacked currency may be separating from a metal challenging it for credibility? Higher rates reflecting that loss of reserve currency status? And higher gold for the same reasons.

I can see where they wanted both ends of the deal, when they stuck a fuse in the Gibson's fusebox. Does this mean that they cannot now prevent the two opposites coming crashing in, even if usually incompatible? And just _who_ is this Larry Summers, anyway? ;)
Black Blade
(08/08/2002; 00:34:59 MDT - Msg ID: 82542)
Re: Siege Engine


Well we did not start this war, but at least we have a good shot at finishing it. ;-)

- Black Blade
Waverider
(08/08/2002; 00:53:24 MDT - Msg ID: 82543)
Siege engine....
You guys really are the greatest! Gandalf - a glass of red wine is very medicinal - excellent for the coronaries - the reds from Tuscany are my favorite. And please, may you live to read another episode....and BTW very well spoken! Hear, hear...Good Night everyone!
Waverider
Black Blade
(08/08/2002; 02:12:33 MDT - Msg ID: 82544)
IMF Approves Brazil Bailout, Largest Ever
http://biz.yahoo.com/rb/020807/economy_brazil_imf_6.html
Snippit:

WASHINGTON/BRASILIA (Reuters) - The International Monetary Fund threw a $30 billion cash lifeline to Brazil on Wednesday, the fund's biggest bailout ever, seeking to shore up an economy that has been pummeled by investor angst ahead of presidential elections.

The package, which by far surpassed analysts' expectations, also allows Brazil to spend an additional $10 billion of its net foreign currency reserves to protect the local currency from a crisis of investor confidence over the October vote. The 15-month deal effectively gives Brazil $40 billion of extra cash to help avert a financial meltdown, sparked by worries that the next administration will shatter macroeconomic stability and default on a $250 billion net public debt load. The size of the deal was a sign that the United States, the IMF's largest shareholder, would avert at all costs a meltdown of Latin America's biggest economy, which would send shock waves across the hemisphere, to Europe and beyond, economists said.


Black Blade: Asia was not impressed with Wall Street's gains yesterday, however, the news of the IMF bailout (mostly funded by the US taxpayer) came a little late to influence those markets. Meanwhile Euro markets are soaring on the news and US market index futures are higher too. The point that is being missed is that this will be a liability for the US (although off the books). This comes on the heels of another bailout for Uruguay ($1.5 Billion initial payment) and Turkey ($30 Billion), and Argentina is reported to have been given the green light for a few tens of $billion as well. It looks like quite a few Swiss bank accounts will get fattened up in coming weeks.

Black Blade
(08/08/2002; 02:20:51 MDT - Msg ID: 82545)
Ex-ImClone CEO Indicted for Fraud
http://biz.yahoo.com/rb/020807/crime_waksal_10.html
Snippit:

NEW YORK (Reuters) - ImClone Systems former Chief Executive Samuel Waksal, already charged with insider trading, was indicted on Wednesday for obstruction of justice and bank fraud in a case that has rocked investors' confidence. A 13-count grand jury indictment of Waksal, 54, who was first charged in an insider trading complaint in June, expands the case to include the new charges and more extensive allegations of securities crimes. If convicted on the bank fraud count alone, he could face up to 30 years in prison. The case, which has enveloped homemaking guru Martha Stewart, is one of several scandals that have sapped investor confidence in corporate America and helped fuel a bear market on Wall Street this year.

Black Blade: 30 years in the joint? Not bloody likely. Rob at the point of a gun and maybe get 30 years. Rob at the point of a pen and it's a stretch in one gets 30 days.

Belgian
(08/08/2002; 02:27:29 MDT - Msg ID: 82546)
Morning,
If (!!!) it is correct that ABX is forced to buy Physical as to neutralise part of its forward sales...we have sound evidence of continued Gold accumulation and strength. After all, they, do try to "unwind" things, orderly (Indeed Sir Kosares). Intra-day POG behavior is a very cautious one.
The gap in POG's rise, yesterday, was a bit more brutal as usual and if this (little) gap can be filled again (decline to 309$)...they still manage to unwind orderly. Same is done with the stock valuations of the financials...but with more vigor of course.

But I still have my doubts about forward sellers, buying physical ? POG's move started in Euroland right after the London fix and I'm inclined to think that it is euro-defense against dollar strength, with the POG tool. This as to not let them crash the 0,95 �/$ defense line.

Not all bond-profits (profit taking) go into stocks. Part of might shift to Gold (anticipative of coming rising IRs) and another part might be lured back into the euro.

Gold-pressure, any pressure, will do for us. And pressure there is. Controlled, though, for the time being. Can we fastening this up ? Yes we can by calling...Marie, I want some more !
Black Blade
(08/08/2002; 02:36:14 MDT - Msg ID: 82547)
USD Index Strengthens Again
http://www.mrci.com/qpnight.asp
The USD is higher, Gold is lower, market index futures higher, and petroleum slightly lower.
Aragorn III
(08/08/2002; 02:38:24 MDT - Msg ID: 82548)
Various bailouts happening now
FOA might call this a throwing of the (dollar) ball of twine.

Your next course of action requires no thought. It has been decided for you, creatures of fate or free will. Will you know your ground? The test is simple.

got gold?
Black Blade
(08/08/2002; 02:57:37 MDT - Msg ID: 82549)
Australia Rejects Native Title Claim to Resources
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Mining%20News&tp=ad_mine&T=au_storypage99.ht&s=APVILWBUoQXVzdHJh
Snippit:

Canberra, Aug. 8 (Bloomberg) -- Australia's High Court ruled indigenous Australians don't have rights to claim the nation's mineral or energy resources under so-called native title laws aimed at protecting their rights to land and water. ``The court has held that the evidence establishes no native title right to or interest in any mineral or petroleum,'' the court said in a four-page summary of the ruling. Some mining companies have blamed native title claims for a drop in exploration by Australia's minerals and energy industry, which is expected to have exports of almost A$60 billion ($32 billion this year. In Western Australia alone there are 11,800 mining applications being held up by native title claims, the state's Department of Minerals & Petroleum Resources said.

Black Blade: Maybe there will be some exploration activity in OZ.

misetich
(08/08/2002; 05:20:16 MDT - Msg ID: 82550)
Japan govt turns more cautious on economic outlook
http://www.forbes.com/newswire/2002/08/08/rtr689805.htmlSnip:

"Going forward, it is hoped that the economy will move towards recovery as the effect of a big increase in exports and a recovery in industrial output spreads to broader areas," the report said.

"On the other hand, a further slide in global stock prices and the dollar has further increased uncertainty over the global economy and raises the concern that final demand in Japan will come under pressure."

The reference to a "further" slide in stocks and the dollar and a "further" rise in uncertainty represented a more cautious stance than the July report, said Cabinet Office official Jun Saito.

"It expresses the view that there is a rising risk in the future," Saito told reporters.
************
Misetich
Japan's jobless economic recovery is being post-poned for the 13th consecutive year

In the meantime Yen, printing presses are ready to produce "more colorful" notes

Got gold?
misetich
(08/08/2002; 05:43:42 MDT - Msg ID: 82551)
Ugly America? Commentary: Corporate greed has cost more than money
http://cbs.marketwatch.com/news/story.asp?guid=%7B677E958B%2D026F%2D4B9D%2DAA00%2DDA3CC01B0586%7D&siteid=mktwSnip:

What has gone unnoticed is the effects it is having on America's image abroad.

German Chancellor Gerhardt Schr�der in a speech in Hannover this week put it very bluntly.

"The time has come to reexamine whether the way America runs its economy should continue to serve as a model for the rest of the world."

His answer to that question is quite clear. "The plundering of the "little people" in the United States by a manager class which is shamelessly enriching itself is not the German way."
.............
************
Misetich

Got gold?
misetich
(08/08/2002; 06:03:03 MDT - Msg ID: 82552)
Financial Armaggedon Is Unfolding
http://www.larouchepub.com/other/2002/2930ibero_bust.htmlSnip:

by Gretchen Small
How big is the Brazilian foreign debt bubble? $500 billion big. That is largest foreign debt in the world. It is dwarfed, however, by the United States' $32 trillion in combined public and private debt. This U.S. debt, along with the world derivatives bubble, is by far and away the world's greatest financial bomb.

The Brazil developments caused panic on Wall Street. Top executives of the already-bankrupt Citigroup announced on Aug. 1 that they would now meet regularly to calculate how to "mitigate losses" in Brazil. Citigroup lost $2.2 billion in Argentina, but had, as of March 2002, nearly $13 billion to lose in Brazil. European exposure is even greater than American in Brazil, with Spanish interests guaranteed to go down when Brazil goes, because of enormous exposures in energy, telecommunications, and above all, banking.

.............
The Brazilian private sector, which owes over $150 billion in foreign debt, has found that it can no longer roll over its loans. Between January and May 2002, only 58% of private foreign obligations were rolled over, whereas 96.5% were renewed in 2001. In June, the figure dropped to 22%, which means that Brazilian companies have only the option of raising the cash to pay off three-quarters of their loans�or default.

This is no small thing. The estimate is that Brazilian private firms have $10.6 billion in foreign debts coming due by Dec. 31. And, because every devaluation of Brazil's real makes paying off dollar debts more expensive, by late July companies began panic-buying of dollars, to try to pre-pay debts before the currency dropped lower. The panic accelerated the devaluation, as the dollar's value soared because of the scarcity.

Worse, Brazil has found that its trade credits are being cut off, usually the last thing to go in a crisis. Since March, international credit lines available to Brazil for imports and exports, have dropped by almost half, from $10.8 billion, to $5.7 billion.

The even more explosive charge lying under the Brazil debt bubble, however, is the government's domestic debt�the 1 trillion reals worth of government bonds, of which around 150 billion come due by the end of 2002. This government debt has quintupled since 1994, when President Fernando Henrique Cardoso came into office. It has been paid by the same "bicycle" principle as the private sector, but as investors became more nervous about the mounting debt, the financial team running the show enticed investors to keep "pedaling," by offering dollar-indexed domestic bonds, and floating interest-rate bonds.

The "solution" of yesterday's crisis, has become the nightmare of today's. Some 40% of Brazil's trillion-dollar domestic public debt is now dollarized. That means that every time the real devalues, Brazil's debt increases. By Bloomberg News Service's calculation, every percentage point devaluation increases Brazil's government debt by $1.4 billion. To see the absurdity of the situation, consider that on July 29 alone, the run on the real due to panic about Brazil's ability to pay its debt, increased Brazil's debt by a whopping $7.56 billion, without the country receiving a single loan.

...............
************

Misetich

Lets stay on the Brazil's HOT TRAIL - (though we may have to wait a little as the 'fire' has been tried to be smothered by PAPER)

Got gold?
misetich
(08/08/2002; 06:14:22 MDT - Msg ID: 82553)
Bush: 'Shady' Companies Let Down America
http://www.reuters.com/news_article.jhtml;jsessionid=XGRFPDDYHXTXOCRBAEKSFEY?type=topnews&StoryID=1303636Snip:

By Arshad Mohammed

MADISON, Miss. (Reuters) - President Bush said companies with "shady" practices had let down the people of Mississippi and the nation as he campaigned on Wednesday for a Republican congressman near bankrupt WorldCom Inc's hometown.

With his own corporate behavior and that of some top advisers -- including Vice President Dick Cheney -- under scrutiny, Bush railed against accounting scandals that have undermined faith in the U.S. economy and said his administration was "investigating, arresting and prosecuting" errant executives.

.........
"They lost their jobs and a good portion of their retirement funds because there was corporate malfeasance .... cooking the books," Bush said, without mentioning WorldCom by name. "People who dedicate their lives to building a company that hired them deserve better."
*****************
Misetich

Bush had a chance to clean up Rubin's and Clinton's mess in the beginning and failed to do so

'Few Bad Apples'

Literally thousands of dot.coms have disappeared along with investors cash, telecom debt is in the trillions, evaporating investors cash, investment bankers accomplices in fruadlent activites (Enron) Talking heads pumping and dumping techniques lured innoncent investors in the rigged casino, tech corporations, with SEC, other goverment agencies tacit approval of Pro-Forma, non expensing stock options - lured investors in the land of make believe.

The global financial system is under severe stress thanks to the bubblemania of Japan and US - and these politicians think they can build investor's confidence with a a few meaningless changes

Get real - get physical gold!

Got gold?

Black Blade
(08/08/2002; 06:34:29 MDT - Msg ID: 82554)
Spot Dives
http://www.kitco.com/charts/livegoldnewyork.html
Not a good start as PPI is down 0.2 and unemployment claims down 15,000. Market futures are rocketing and the USD is charging higher. Meanwhile Gold drops 2 bucks outta the gate. With last nights giveaway of several tens of billions to Brazil, Uruguay, and Argentina has boosted the markets as well. Looks like a wild ride ahead for Wall Street and maybe a bad day for Gold. It's looking like a very volatile day ahead.

- Black Blade
steady
(08/08/2002; 06:45:35 MDT - Msg ID: 82555)
copying someones work here? look at the wording!
US State, Local Revenue Outlook "Grim" -Goldman Economist
WASHINGTON (Dow Jones)--The outlook for state and local government revenues "remains grim" and tax increases of a general nature could be in the offing in the next year or so if revenue growth doesn't resume, according to economist Ed McKelvey of Goldman Sachs & Co.
"If revenue growth remains sluggish as it has become recently, which seems highly likely in our view, then all options will be on the table for coming fiscal years," McKelvey said in a market comment Thursday.
"All options means tax increases as well as spending cuts," he said. "In fact, several state officials indicate that they have very little flexibility on the spending side."
McKelvey said last week's GDP revisions "reveal that fiscal finances are more precarious than previously indicated in official data, especially at the state and local level."



Boilermaker
(08/08/2002; 06:50:15 MDT - Msg ID: 82556)
8/14/02 Sworn Statements, Black Blade @ 82520
When I read the following sentence in the SEC Order Requiring the Filing of Sworn Statements I see the date of 8/14/02 as being the beginning of the process;

"Such sworn statement shall be delivered for publication in written form to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, DC 20549 by the close of business on the first date that a Form 10-K or Form 10-Q of such Company is required to be filed with the Commission on or after August 14, 2002."

10-K's are the annual reports submitted to the SEC within 90 days of the end of the fiscal year which for most companies corresponds to the calandar year. The 10-Q is a quarterly report to be filed within 45 days of the end of each fiscal quarter. If this is the case doesn't it mean that the signoffs will occur in November this year as the third quarter 10-Q's are filed? Maybe one of our trusty beancounters can help me with this.
a nation of one
(08/08/2002; 08:10:23 MDT - Msg ID: 82557)
misetich message 82553
What remedies, specifically, do you see as having had the potential of cleaning up "Rubin's and Clinton's mess"? The present quality of my knowledge, which is far from complete, contains nothing -that I am aware of- that could have accomplished that. I would be very interested to know what could have achieved it.
Socrates964
(08/08/2002; 08:17:52 MDT - Msg ID: 82558)
Brazil package
Before we get carried away here, note that Brazil only gets $6bn of the $30bn package this year (about enough for JPM/C to cover their asses). Presumably there is still a major chance that an incoming government (that looks less and less likely to be a successor to the incumbent one) will violate some clauses and fail to collect the balance.
Mr Gresham
(08/08/2002; 08:43:28 MDT - Msg ID: 82559)
A 'ery 'ain'ul 'ost -- 'orry, I' got 'otton in 'y 'outh
Adding to my holdings today, only I doubt I'll be clinkin'. More likely "Aa-a-r-rhr-ggh--owwwwww!" "Plink!"

The receptionist answered my question about keeping it: "Yes, you can. They usually recycle them, for about $20."

Well, with a ten-bagger coming, that oughta just about pay for the whole operation, eh?

Well, to paraphrase Black Blade: "Off to the Chair!"

"Throw out your gold teeth and see how they roll
The answer they reveal, life is unreal.

Who are these strangers
Who pass through the door
Who cover your action
And go you one more
If you're feeling lucky
You best not refuse
It's your game the rules
Are your own win or lose"

-- Steely Dan, Gold Teeth II
Mr Gresham
(08/08/2002; 08:50:03 MDT - Msg ID: 82560)
Clearing windows for shutdown
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=14271Article originally from May, covers some ideas on leasing ...
Mr Gresham
(08/08/2002; 08:50:48 MDT - Msg ID: 82561)
The Mandrake Mechanism
http://www.bankindex.com/read.asp?ID=1111"Money from nothing"
Mr Gresham
(08/08/2002; 08:52:12 MDT - Msg ID: 82562)
North American Producers
http://www.yorkton.com/webapp/v3w3/getdoc.jsp?i=95651739Those .pdf's sure take up a lot of memory.
Mr Gresham
(08/08/2002; 08:54:38 MDT - Msg ID: 82563)
Why the present monetary system cannot be reformed
http://www.mises.org/journals/scholar/shostak.PDFFrank Shostak
Mr Gresham
(08/08/2002; 09:12:46 MDT - Msg ID: 82564)
Mutual Fund redemptions
http://moneycentral.msn.com/content/P27492.asp?special=turmoil"What happens if we ask for our $3 trillion back?"
USAGOLD / Centennial Precious Metals, Inc.
(08/08/2002; 09:21:20 MDT - Msg ID: 82565)
Diversify today, sleep better tonight.
http://www.usagold.com/ProductsPage.html

GOLD

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Siochaina
(08/08/2002; 09:33:10 MDT - Msg ID: 82566)
USAGold
Neat Ad ..."Angels for Hire"....and they are....sure does make me sleep better
a nation of one
(08/08/2002; 09:50:45 MDT - Msg ID: 82569)
scruting keynes
"...It was a paradox because contemporary monetary theory, largely associated with Irving Fisher, suggested that interest rates should move with the rate of change in prices, i.e., the inflation rate or expected inflation rate, rather than the price level itself." (From the article at http://www.gata.org/gibson_s_paradox.html)
To state this less vaguely: Monetary theory in the 1930s seemed to indicate that interest rates should move with the rate of change in prices; in other words, with the inflation rate or expected inflation rate, rather than with the price level itself.
The described expectation, together with its subsequently cited and supposedly unexpected reality, does not constitute a scientific paradox. This is important to recognize because Keynes, who came up with the term 'Gibson's Paradox,' typically is thought of as having been involved in the science of economics. But the word 'paradox,' in this sense, is merely conversational, not scientific, and is not the best choice for a description. "Apparent contradiction" would describe 'Gibson's Paradox' more accurately, and more fully.
From this, one may reason that Keynes either did not understand what a paradox is, did not comprehend what is really going on in these particular aspects of economics, or that he did know but chose not to divulge what he knew, choosing to refer to it obliquely, using the term 'paradox', when, in fact, the term 'mischief' would also have been more accurate.
Here's why.
In rather plain English the assumption is stated, that whatever the speed may be, at which prices are changing, or are expected to change, when expressed as a percentage, that is what the interest rate should be.
What exactly is meant by the phrase, 'should move with the rate of change in prices'? That the economic theory presumed that nature itself requires that it do so? That can't be realistic, because interest rates are not determined by nature, generally speaking, but by human individuals, who, although they may be aspects of nature, can act in an infinite variety of ways not contained in the theory. I think that what it means is that the overall quality of an economic system operates best -most to the benefit of the people within it- if interest rates are set in accordance with the perceived ongoing rate of change in prices generally. At least this makes sense. If the inflation rate is 2%, the interest rate should be 2%, and so on. I don't agree that this would be best for people in such an economic system, however, so I must suspect either 1) that I don't know what I am talking about, or, 2) that Keynes did not know what he was talking about. Is it possible that Keynes did not know what he was talking about? Of course. If you could have asked him a question outside of his field of knowledge, say, for instance, what the exact weight of my truck is, he would be unable to answer correctly. He could guess, but chances are he would be wrong. Or better yet, ask him what the top speed is on my truck's odometer, and have him explain how that is related to the number of trucks on the street in my town. To this he could give numerous answers, all of which could be made to seem correct. These analogies seem ridiculous, but they are not. For even in a man's field of expertise, there are aspects which he does not know. But that doesn't mean they are not known by someone. Given the tendency which we know that 'Lords' have, of planting their feet more securely on their reputations and political power than on sublime but vulnerable descriptions of true reality, I smell a long dead fish whenever someone spouts drivel in the form of pretentious posturing, which is what I suspect that Gibson's Paradox is.
I should not have to remind you that Keynes was a member of exactly the same social class which, in America today, works to deprive people of their earned wealth, in order to possess it for themselves, and that unquestioning confidence and trust, sometimes even in the form of a devoted respect for those whose knowledge you take for granted as being better than yours, is one of the mechanisms by which such swindling takes effect.
What is missing from Gibson's Paradox is the disclosure of the fact that the reason interest rates do not beneficially coincide with what is assumed by economic theory, is that those who are in control of interest rates do not want them to.
Oh. I almost forgot. There's one more thing:
Could Keynes be right I be wrong?
Aside from our respective habits in choosing words, and our possible political motives, I believe that he and I are both right.
TownCrier
(08/08/2002; 10:22:24 MDT - Msg ID: 82571)
Signaling? Fed pushes down fed funds rate in day's trade
http://biz.yahoo.com/rf/020808/markets_fed_openmarket_3.htmlWith today's market in fed funds trading nicely at the FOMC target of 1.75 percent, the Fed's trading desk never the less saw fit to enter the market to add reserves to the nation's banking system, working the cost of funds well down on the longer-dated repos.

The Fed took offered up $3 billion for repurchace agreements of 28 day term secured in large part by Treasuries, these taken at only 1.66 percent.

Another $5.25 billion was added through overnight repos, in which the Fed accepted Treasury securities at 1.74.

The longer term might be a clue toward direction of FOMC rate decisions on August 13 or September 24.

R.
steady
(08/08/2002; 10:38:36 MDT - Msg ID: 82572)
question what is perpetual debt? seriously i never heard of it before!
NEW YORK (Dow Jones)--Abbey National priced $500 million of perpetual subordinated debt securities through lead manager Morgan Stanley, according to MCM CorporateWatch. Terms were as follows:
Amount: $500 million
Maturity: Perpetual
Dividend: 7.375%
Issue Price: $25 per debt security
Settlement: Aug. 15, 2002 (flat)
Call: Noncallable for five years
Ratings: A1 (Moody's Investors Service)
A (Standard & Poor's)

TownCrier
(08/08/2002; 10:55:28 MDT - Msg ID: 82573)
steady -- a perpetual bond
It's what you think it is. Not 90 day paper, not 3-month, not 12-month, not 5-year, not 10, not 30...

Basically, the issuer wants $500 million to use today for an indeterminate period of time, for which it will annually pay 7.375% for the privilege -- until such time as it either defaults or finally calls in the notes for redemption.

R.
Pizz
(08/08/2002; 11:44:44 MDT - Msg ID: 82574)
A nation of one, Mr. Gresham,
More thoughts on Gibson's Paradox


Keep in mind that real rates are the net of actual rates minus inflation. The FED has had a habbit of being ahead of the curve going down, and behind the curve going up. Gold didn't go bearinsh in the early 80's until Volkner(spelling) slammed real rates up to slam both the economy and inflation.

Gold is supposed to go down when real rates are going up due to it's non interest bearing form, carrying charges, and the fact it's competing with short term paper with increasing rates. But if inflation is rising, or the perception of it is rising faster than rates are keeping up, then real rates are actually dropping and gold is supposed to rise.

This has been the formula for cyclical, inflationary recessions, but for a secular deflationary depression, we have to go back to the 30's, and when all paper starts to burn as debt implodes, gold goes up, but probably not as fast as in an inflationary environment (less money and ability to buy in a depression).

The one big kicker we have is that in the 30's the US was a creditor nation (we had assets that could be liquidated). Now we have the cyclical depression debt problem with us being a debtor nation. How do we spend our way out of this and even if we do, WITH WHAT????. We are in uncharted waters with some big, big sharks.

Now, using 20-20 hindsight, I believe gold has been kept in range in anticipation of rate hikes to support the strong dollar policy. This would mean that real rates rise and the chart variance on Gibson's Paradox would close with lower gold and higher real rates. Hence all the forcasts for 200 - 250 gold. What was not taken into consideration was the very rapid implosion of South America due to the strong dollar. Now rate cuts must be done to save these countries and the banks. The gold deriviatives problem is going to take back seat for the present IMHO - probably with a FED or government bailout.

I expect, thru knee jerk ups aned downs, that gold is going to seek equilibrium over the next 6 to 9 months around 500.

More thoughts later.

Pizz

Mr. G: sounds like you havd a dental appointment also. I had a root canal at 7:00 am. No fun, even with nitrus.

As a footnote, for those of you who prepare for the worst, don't forget to get your teeth in good shape. and if you have insurance, use it while you got it!

Pizz
CoBra(too)
(08/08/2002; 11:53:22 MDT - Msg ID: 82575)
IMF Record Bailout of Brazil -
Whom does it really help? ...

Brazil? -as it won't ever be able to pay back the (paper) loans, nor the interest from here on ... Or the Banks who stand to lose more than they can hide, tide or bide ...

cb2 (great discussions lately - trying to catch up between two hospitalisations - though hoping to back cured by late Sept.)


Blackjack
(08/08/2002; 12:29:21 MDT - Msg ID: 82576)
Consumer Confidence Crumbles in Asia....BBC report
With joblessness on the rise and investments worth less and less, consumers in Asia are increasingly unwilling to spend, a survey has suggested.

Shoppers in Australia, New Zealand, Taiwan and particularly Hong Kong are becoming markedly more gloomy about their prospects, market research firm ACNielsen said.

The firm said 99% of the 8,000 people in 13 Asian countries it interviewed said they felt in the grip of a global recession, up from 85% in its last survey six months ago.
Mr Gresham
(08/08/2002; 12:48:01 MDT - Msg ID: 82577)
CoBra(too), Pizz, nationOFone
Welcome home, CoBra -- hope you're recovering splendidly!

Yes, Pizz -- that was it. An "extraction" of wealth (call it "high-grading" if you will) that even our host could not help me with. Though my kid offered the use of her pillow in contacting the Tooth Fairy, but I told her I was thinking more like the Krugerrand Fairy on this one.

I agree with your reco on preventive care -- I've had so little health crisis in my life, that little ones like this have to serve as my reminders to get all in order while I may.

That Gibson's stuff will have to wait on a clearer head (though not sure if it ever clears up THAT much). I would think that its concerns dwell in the realm of parallel, interacting markets -- some of which are very large tails wagging temporarily smaller (yellow) dogs. Overlay that with political agendas, multiple nations, and manipulations by officialdom or finance industry cartels, and I'm not sure ANY formula will count for much.

Was just perusing Bloomberg Personal Finance in the car, and Money magazine on the newsstand. Boy, have I avoided reading a lot of crap over these past few years! I kept wanting to say "Yes, fine, all well and good advice, within the current parameter ranges, BUT! There's this 2-sigma currency and credit market Event lying in wait on a near horizon."

Now, to get out into some good sunny hammock time, with perhaps a relaxing tonic or two while the pain is in visitation...be well!
Socrates964
(08/08/2002; 12:58:56 MDT - Msg ID: 82578)
Brazil/Real Estate
CoBra - I refer you to my comment. Presidential candidates will make non-committal noises about respecting IMF agreements, but whether the new President plays by the IMF rules is anyone's guess. It thus appears to be a big package, but is really a small package - and my take on this is that O'Neill not only pissed off the Brazilians with his idiotic comments about sending the money to Switzerland, but also pissed off the US multinationals with interests in Brazil who want things to hold together until they get their money out.

Hence he offers $6bn of real money upfront and the 'definite maybe' money sometime in the future. Brazil spent most of the 1980s signing IMF agreements that it never collected on as it couldn't stick to the rules on fiscal policy.

Real Estate - my take is this: I remember the 1988-92 London property market recession. Prime real estate was always saleable. Sub-prime prices didn't go down very much but the properties in question remained unsaleable for anything up to a decade. The crisis came in the sub-prime overleveraged market, where buyers on 100% mortgages simply handed in their keys as they didn't have much equity, leaving the banks and building societies with a relatively huge pool of properties that overhung the market for years.

It strikes me that while US real estate prices may not fall anything like as much as stocks, the marginal effect of a slowdown on the economy will be much greater as FRE/FNM are operating on such ludicrously small capital bases and have been financing so many 100% mortgages that even if 90% of the property market remains intact, the hit on their equity from subprime borrowers handing in their keys will be terminal. In addition, at the time, the practice of taking out loans against real estate to finance present consumption was not very widespread in the UK. This is another complicating factor in the US.
Graefin
(08/08/2002; 13:47:43 MDT - Msg ID: 82579)
Controlling Gold with Paper - or - "Gold�get you some!"
http://www.goldismoney.com/goldpaper.htmGood read below. Follow the link to get the whole!

Snippit:

On Tuesday, June 4th, the spot price of gold plunged from $329/oz. to $325/oz. during after market hours, and over the course of the next day, declined further to $321/oz. Less than 24 hours later, it was quickly reported by www.theminingweb.com and GATA that this was a result of a large sale of paper futures contracts of a relatively illiquid date in a relatively illiquid market because of the odd time, which pushed down the price.

It's tricky to see how the price of gold is, and has been, manipulated downward with paper contracts. The question is raised, "How can they knock down the gold price if they are not selling any gold?" I'll do my best to try and simplify and explain this con game and cover the major factors that are so bullish for the gold market right now and are causing this current bull market in gold. This essay might also help you to convince your friends, relatives and loved ones, who don't read gold-eagle, of the benefits of gold investing.

End snip
Peace!
- Gr�fin
Black Blade
(08/08/2002; 13:57:30 MDT - Msg ID: 82580)
NBER - Not Yet Ready to Say Recession Over
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020807/bs_nm/economy_nber_dc_4

Snippit:

WASHINGTON (Reuters) - The National Bureau of Economic Research said on Wednesday it was not yet ready to make a formal call that the U.S. recession has ended, saying it will first need to rule out the possibility of a "hypothetical" second leg to the economic downturn. The NBER's Business Cycle Dating Committee, the arbiter of U.S. business cycles, said it did see signs of "small increases" in economic activity. But it added it would need more data to reach a conclusion about whether that adds up to a recovery.


Black Blade: The NBER came under a lot of criticism by Wall Street pundits for declaring a recession. Yet the recent release of the revised GDP data vindicated their position. Touts such as Dianne Swonk of Bank One and Abby Joseph Cohen of Goldman Sachs even went as far as to say that there was no recession. There are a lot of people dining on crow these days.

Pizz
(08/08/2002; 14:11:05 MDT - Msg ID: 82581)
Socrates964
The beautiful thing about this forum is the synergy of the many minds working.

As we watch the parabolic demise of SA in time frames measured in months as to years in the past (weeks in the future as things heat up even more), the breaths of relief as reflected in the stock prices of the major banks, many hope that all is well cause the US has come to the rescue.

How long will it last, and why was it done? To save Brazil - no way, all it did was buy time for the banks, the SM thru future lowering of rates (they have to do it) and what you so aply stated and I repeat, cause it needs to be a headline on the WSJ . . . (maybe reworded a bit, (smile)

"but also pissed off the US multinationals with interests in Brazil who want things to hold together until they get their money out."

I really wonder, now with some afterthought, just actually how much of the Swiss bank account statement was really a gaff. When the money leaves, and it will, I wonder who the public will blame? After your astute and rather profound comment, I think any and all of us now can figure out who the billions will benefit, and my take is that the money will indeed leave the country, but indirectly and with US/European multinational ownership. (what do you think, .10 to .15 on the dollar if they can somewhat control it??)

Brazil, IMO, is large enough to take the entire system down.
With elections in the air, I can't think of any reason anyone will want capital in Brazil.

Thanks Socrates964. The slope is getting steeper and more slippery, and it'll take golden chains for traction to hold our own.

Pizz





Black Blade
(08/08/2002; 14:17:44 MDT - Msg ID: 82582)
CNBC Viewership Falls
http://www.nydailynews.com/business/story/9202p-8663c.html
Viewership falls 25% in latest quarter

Snippit:

CNBC has canned its business news boss following a disappointing ratings slide at the financial news channel. The General Electric-owned network said yesterday that Bruno Cohen - who pushed CNBC upward during the bull market but has lately watched the network sputter - is taking a "sabbatical" and "will be exploring his next senior management position at NBC." Cohen appears to have taken the fall for CNBC's shrinking audience, which fell 25% from April through June despite a flood of scandal-ridden business news stories. The network, ranked No. 1 among all cable news channels in 2000, has now fallen to No. 5 - behind CNN Headline News. "This sounds to me like one more unfortunate casualty of the bear market," said money manager Michael Holland, a frequent CNBC guest. CNBC has declined as the business shows on the general news channels - Fox News Channel's "Your World With Neil Cavuto," and CNN's "Lou Dobbs Moneyline" - have rallied because of their focus on both world news and the markets.


Black Blade: Many viewers simply did not want to be reminded that their retirements have evaporated so they simply tune out.

BTW, the rally on Wall Street appears to be more a matter of very thin trading conditions. There are fewer traders on the floor and fewer trades. A few trades have the potential to push the markets higher and that has helped to rally the markets over the last few days. There have been some "interesting" revelations today. WorldCon's losses due to fraud appears to be much greater than previously reported. Qwest also reports massive losses for the quarter as does energy trader/utility Aquila (formerly Utilicorp). Retailers released earning today with mixed results, however, nothing spectacular. This suggests that consumer spending may be starting to wane. Bargain discount retailers like Wal-Mart and Target have benefited at the expense of specialty and apparel retailers like Sears, Best Buy, and GAP. The US economy is far from being out of the woods. In a word - "Grim".

Off to the gym!!!

misetich
(08/08/2002; 14:24:06 MDT - Msg ID: 82583)
$2 Billion More in WorldCom Errors - CNBC
http://story.news.yahoo.com/news?tmpl=story&ncid=580&e=2&cid=580&u=/nm/20020808/bs_nm/worldcom_fraud_dc_2Snip:
CNBC said WorldCom had used an accounting trick in which most of the $2 billion was reversed from reserves for bad debts into operating income. It said the additional fraud was found by WorldCom's auditors poring over its financial statements in 1999 and 2000.

WorldCom filed bankruptcy earlier this month, buckling under $40 billion in debt and a $3.85 billion accounting scandal. The $3.85 billion was found in its statements for 2001 and the first half of 2002.

*********
Misetich

Got gold?
misetich
(08/08/2002; 14:30:05 MDT - Msg ID: 82584)
EIA: World Oil Demand Up 500,000 B/D Or 0.7% In 2002
http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=4&u=/dowjones/20020808/bs_dowjones/200208081236000797Snip:

WASHINGTON -(Dow Jones)- U.S. crude oil prices are likely to rise sharply to $ 30 a barrel next year as world oil inventories drop amid this year's sharp supply deficit, the U.S. government's top energy-market forecaster said Thursday.

*********

Misetich

Got gold?
Rock
(08/08/2002; 14:35:59 MDT - Msg ID: 82585)
A Few Words from Great Heart
Good day to all the esteemed kignts and ladies who took the time to adorned yourselves with the best of atire on this lovely day, please take your places. As you know the stock market and economy in general will continue to spirial downward until it crashes, I notice no one is suprised because we have spoken in great detail on this subject.

My mission statement and the comission for which I have vowved both there and abroad has been to sound the trumpet of truth concerning the stock market crash despite the reproach I have had to endure, although it isn't as bad as it was a few years ago but the dense flack is still there.

You may hate the neighbors kid for whining every time you begin make love you your wife but you'll be the first to pull the child out of an on coming car.

I have been observing this crazy stock market like the rest of you for about 4 years now. Many of you have followed it long ago and have seen first hand the effects of 1929 and 1987. I come to the table with very little in terms of full market understanding however I learned a lot from watching CBNC, reading the journal, watching the "mummy" and others, picking up books concerning this financial topic or that and of course the extended edcuation courses I receive here at USA GOLD where the unlearned become the learned, all this has helped me immeasurably.

As far as the Wall Street nerves are concerned and those who has funds locked in with risky money managers and such I've not had to bite my finger nails worrying about which way the market goes. I believe and have believed since 1998 that gold will once day and in the very near future (depending on a variety of different sceniros ie terrorism, huge deficits, ect)

As I reflect and marvel at how the laws of economics are not even lining up correctly and hard core vets who have been at this for years walk away scratching their heads in bewilderment.

Our economy went through hell due to all the fraud and manipulation and as a result of all these things happening in unisons we have the unique ingredients for the THE PERFECT STORM. Stay tuned because everyone willsee this thriller whether they want to or not. Remember what the Blade says, he's a wise knight, he says to prepare for the unexpected, it could happen sooner than you think. Get Physical!

Great Heart
Socrates964
(08/08/2002; 14:39:21 MDT - Msg ID: 82586)
Pizz
Without wishing to sound like the Brazilian tourist board, for those of you who don't know Brazil, it's difficult to convey of impression of how everything works in spite of itself and how much of the economy is submerged/purely domestic and how resilient it is. It's also extremely cheap. I'm almost tempted to set up an agency to assist gringo traders who want to get away from Homeland Security, live and trade on a similar time zone to NY in a place that's sunny all year round, 60% cheaper than the US and where you can pay 10% income tax if you're smart. A million of you living on $30K per year would donate an IMF package every year. Any takers?

Seriously though, in 1990, no-one would lend money to Brazil and it had hyperinflation and a full-scale confiscation. It took 18 months to get back on its feet. This is a huge difference from Argentina. There everyone thinks about how to get their money out of the country. While there is evidently plenty of Brazilian flight capital - here most people think about how to get other people's assets for peanuts.

In addition, local interest rates are so high, that there are thousands of companies that wouldn't touch a bank loan with a 10-foot pole.

Brazil is not going to grow at 8% a year, but I'm reasonably confident that it can weather the coming storm and come out in one piece.

If the Real goes to six against the dollar, I for one will be buying 120m2 3-bed apartments in Copacabana for $30,000. Even if I have to keep it locked up for 2 years, it will still be worth it.
misetich
(08/08/2002; 14:42:42 MDT - Msg ID: 82587)
IMF: Considerable Downside Risks Remain For Japan Econ
http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=6&u=/dowjones/20020808/bs_dowjones/200208081215000775Snip:

By Takeshi Takeuchi, Of DOW JONES NEWSWIRES

In particular, the IMF pointed to the need for speeding up disposal of Japanese banks' bad loans and suggested setting a deadline for all banks to get rid of such loans.

"Most directors urged that the strategy (of bad-loan disposal) announced by the authorities last year be strengthened to accelerate the process of bank restructuring," the IMF said, adding that "all deposit-taking institutions - rather than just major banks at present - should face a timetable for the disposal of non-performing loans."
..........
********

Misetich

From continent to continent - Global economic deceleration continues

Got gold?
Operative
(08/08/2002; 14:56:39 MDT - Msg ID: 82588)
CNBC - What's Next? Bikini Babes Holding UP Dow Charts??
Entire CNBC Cheerleading Crew, smiling and
waving pom-poms.
misetich
(08/08/2002; 15:23:53 MDT - Msg ID: 82589)
Credit constrained, but no "crunch" yet - Merrill
http://www2.marketwatch.com/news/newsfinder/pulseone.asp?dateid=37476.4380324074-800492362&siteID=mktw≻id=0&doctype=806∝erty=&value=&categories=&Snip:

Credit constrained, but no "crunch" yet - Merrill (MER) By Greg Morcroft
A moribund junk bond market and falling institutional and bank lending are anecdotal signs of tightening credit conditions, but don't yet constitute a credit crunch, according to Merrill Lynch's Martin Fridson. He said Merrill's market sources do not yet perceive a credit problem as severe as the U.S. experienced in 1991-1992. "Lending has not come to a halt," Fridson told Merrill clients in a research note. Fridson concluded that curtailing of credit implies a slowdown in future economic growth, but rather than represent a credit crunch, instead likely reflects an expected drop in returns and increased investment risk. "No alarm bells ought to ring unless there are clear signs of a market failure whereby credit and capital cease to flow to borrowers that institutions deem worthy under prevailing economic conditions," Fridson said.

*********
Misetich
Quote
Fridson concluded that curtailing of credit implies a slowdown in future economic growth
End of quote

Lets see US economy grew at 1% in Q2 and things will slowdown - uhhhmm

Double dip? or continuing recession - take your choice

Got gold?







Socrates964
(08/08/2002; 15:27:11 MDT - Msg ID: 82590)
CNBC
...or a pornography channel for former investment bankers sitting at home all day. At least the ratings would stay up.
misetich
(08/08/2002; 15:32:54 MDT - Msg ID: 82591)
Qwest in talks on credit lines
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185612305&p=1012571727108Snip:
Qwest Communications, the US telecommunications group being investigated by the Securities and Exchange Commission, is renegotiating its credit facilities in an effort to ease fears that it will breach its banking covenants.

Richard Notebaert, who took over from former chief executive Joe Nacchio in June, said the company has been in discussions with Bank of America about restructuring a $4bn back-up credit facility.
.........
Qwest has been in talks negotiations to sell its telephone directories business, QwestDex, in a bid to attempt to reduce debt. However, the sale, which could raise as much as $8bn, has been held up by regulatory concerns and worries about the impact of the SEC inquiry.

As a result of the SEC investigation, the company said it would be unable to file a full quarterly report as required by the US regulator. In a provisional second-quarter results statement, Qwest reported a net loss of $1.14bn, or $0.68 a share, compared with a loss of $3.31bn, or $1.99 a share, in the same period last year.

********
Misetich

Lets stay on the Telecom Debt Trail

Got gold?
Pizz
(08/08/2002; 15:34:55 MDT - Msg ID: 82592)
Socrates964
Re: Brazil's ability to rebound.

Some countries more than others, and from the way you're talking, I'm going to do a bit of homework myself. Your info sounds first hand, do you or have you lived there if you don't mind my asking? the 120m2 appartment/condo's for 30k interest me - sincerely. At 500 gold and a bit of luck, I could ride out a depression down there pretty easily. Is the language Spanish or Portugese?

I have faith in the ability of most peoples, it's the government and banks that worry me. Time will tell, but if you've ever watched an hour glass, as you get towards the end, even when you know the sand is still flowing at the same rate, the balance yet to fall appears to diminish at an ever increasing rate.

thanks,

Pizz
misetich
(08/08/2002; 15:51:43 MDT - Msg ID: 82593)
S&P affirms Brazil ratings after IMF loan package-ffirmed Brazil's sovereign debt rating and negative outlook
http://www.forbes.com/markets/newswire/2002/08/08/rtr690847.htmlSnip:

NEW YORK, Aug 8 (Reuters) - Ratings agency Standard & Poor's on Thursday affirmed Brazil's sovereign debt rating and negative outlook, one day after the nation secured $30 billion in IMF aid to help cushion it from the turmoil wrought by October's presidential election.

S&P said it affirmed Brazil's B-plus long-term foreign currency rating -- four notches into speculative territory - - as well as its BB long-term local rating. The outlook on the ratings remains negative, it said.

The ratings agency said the International Monetary Fund support will give Brazil substantial potential liquidity through December 2003, cash that will likely ease the rocky markets in the near term. But S&P said doubts linger about the future of the economy.

"Brazil's ratings could come under downward pressure if there is slippage in budgetary performance; if the commitment to a tight fiscal stance and structural reform falters; or if policy responses to changing economic conditions prove to be inadequate," said S&P analyst Lisa Schineller.

Brazil's markets have been battered in recent months as investors worry that two leftist front-runners, Luiz Inacio Lula da Silva and Ciro Gomes, could mismanage the economy and push the country toward a default on its $250 billion debt load. Wall Street prefers the government candidate, Jose Serra.
**********
Misetich

Wall Street celebrated today IMF bailout of Brazil - wonder why?
Quote
The fact that the Brazilian bailout also gave a big boost to Citigroup and FleetBoston -- which, combined, had close to $20 billion at risk in Brazil -- will hardly go unnoticed when it comes time to raise campaign funds among the Wall Street elite.
End of quote

http://cbs.marketwatch.com/news/story.asp?guid=%7BC1CBADFC%2DBBCB%2D48F6%2DB72A%2D3D544D2A28D0%7D&siteid=mktw

You got to like the ""Brazil's ratings could come under downward pressure if there is slippage in budgetary performance; if the commitment to a tight fiscal stance and structural reform falters; or if policy responses to changing economic conditions prove to be inadequate," said S&P analyst Lisa Schineller."

In other words it post-poned a catastrophe - Lets stay tuned on this Hot Trail -

Got gold?

Socrates964
(08/08/2002; 16:04:04 MDT - Msg ID: 82594)
OT - Brazil
Yes, I live in S�o Paulo. The difficult part is getting a permanent visa because you need that to stay. The easiest way is to marry a Brazilian/have a Brazilian child. The other ways are a) to set up a Brazilian company. You need a Brazilian to front it for 6 months until your investor visa comes through, and you need to put in some capital (was $200k) - but you can then withdraw it discreetly (or buy gold down here) - best way is to set up an offshore company, loan the capital to that company and then trade through it (doesn't pay tax in Brazil), b) get a foreign journalist or missionary visa (not sure I'd recommend this route).

It probably costs $3-4K in lawyers' fees to get your company set up, but you then appoint yourself CEO for life and you're set up.

You then pay yourself a small salary (say $2-300 per month) and expense everything through the company. A good accountant charges about $200-300 per month.

I'm not a US citizen so I don't know about the tax implications there, but I imagine if your offshore company had bearer shares then it could set up a trading account in the US or Canada.

The other good thing is that Oct-Mar, Wall Street opens at 12.30pm and 10.30 am Mar-Oct, so it's ideal for late risers.

It's a shame Centennial don't have offices down here -I'm sure it would be a good business for them.
TownCrier
(08/08/2002; 16:10:30 MDT - Msg ID: 82595)
Swimming in it
http://biz.yahoo.com/rf/020808/economy_fed_moneysupply_table_1.htmlReuters reports on the Fed's latest money supply figures for the week ended July 29th. Up across-the-board of measurement aggregates.

These were the changes over the course of the week:

M-1 up $12,600 million to $1,213.4 billion.

M-2 up $28,400 million to $5,667.1 billion.

M-3 up $44,300 million to $8,263.4 billion.
Socrates964
(08/08/2002; 16:12:51 MDT - Msg ID: 82596)
OT-Brazil
You have to learn to speak Portuguese fluently but if you're good at languages it takes 2-3 months. Despite the fact that everyone seems to take English lessons it's quite rare to find a really good English speaker and in company everyone prefers to speak Portuguese. (Unlike in Portugal where almost all the people I met spoke very good English).

I've only ever met one gringo who failed to speak it fluently after a year (A Canadian girl who was totally inhibited about speaking a foreign language - then she fell for a Brazilian guy and 3 months later she insisted on speaking Portuguese whenever I met her).
steady
(08/08/2002; 17:21:22 MDT - Msg ID: 82597)
a start at least. will they follow thru> i doubt it!cause we know where it leads to ........gold cartel riging king pin
GOP Rep Asks SEC To Probe Ex-Tsy Rubin's Role In Enron
08/08/2002
Dow Jones News Services
WASHINGTON (AP)--A Republican lawmaker has asked the Securities and Exchange Commission to investigate former Treasury Secretary Robert Rubin's request last year that the Bush administration intervene to help now-bankrupt Enron Corp. (ENRNQ).
Rep. Mark Foley of Florida, one of the House Republican leaders, has sent a letter Thursday to SEC Chairman Harvey Pitt asking for an investigation.
Rubin, who left the Clinton administration in mid-1999, is chairman of the executive committee of Citigroup Inc. (C), one of the banks that lent hundreds of millions of dollars to Enron. As Enron spiraled toward collapse, Rubin called the Treasury Department's undersecretary for domestic finance, Peter Fisher, Nov. 8 to seek his intervention on Enron's behalf. At the time, Wall Street credit-rating agencies were poised to downgrade their assessment of the financial status of Enron.
The Treasury Department did not intervene.
A number of Enron officials were making calls to various administration officials at that time seeking help for the Houston-based company.
"Apart from the questionable propriety of a former Treasury secretary trying to solicit financial favors from former colleagues at a department he once led, I would ask that you investigate all (Enron stock) trades submitted by Citigroup and/or its subsidiaries and their clients in the two weeks preceding Mr. Rubin's call to Mr. Fisher as well as the two weeks following the call," Foley told Pitt in the letter.

"Credit reports are viewed by investors in order to determine the financial soundness of a company before investing capital in that company's equity stock," Foley wrote. "It is imperative that we know what the consequences were on stock actions by Mr. Rubin's apparent attempt at interfering on behalf of Enron - a company that Citigroup had, and has, a financial interest in."
On Nov. 28, Moody's Investors Service downgraded Enron's bonds to junk status. Enron filed for bankruptcy protection from creditors four days later.
A Rubin spokesman has said he "had prefaced the call (to Fisher) by saying, `This may not be the best idea,' and in the end agreed with Fisher that it wasn't a good idea."


Joepmbull
(08/08/2002; 17:34:16 MDT - Msg ID: 82598)
there is no inflation
If you take out housing and food and health care and drugs and college and insurance and gold and cigs, there is no inflation
BillinOregon
(08/08/2002; 18:06:03 MDT - Msg ID: 82599)
Roger Bently Arnold's comments
I am finally home. I will start posting Roger's comments again.

Hope you find them as interesting as I do.

BillinOregon




General Comments

What we are experiencing right now in the US economy, and reflected in the US equity and bond markets, is an attempt by the FED, Treasury, GSE's and soon the Whitehouse to convince the CEO's of corporate America that they have successfully stopped the traditional bottom of an economic cycle which has always occurred when the consumer capitulates.

The CEO's have so far not bought into this new economic system and the longer they wait to increase capital borrowing, spending and investing the more likely it is that it will fail.

It is like watching a show down between the lenders and the borrowers. The key borrowers necessary to make this economy grow, corporate America, aren't borrowing even though the consumers are.

Capital spending and investing typically only represents about 20%-30% of US economic activity but that is what creates the jobs. And, those jobs then drive the other 70%-80% of consumer spending.

Unless capital spending increases jobs are not created and unemployment rises as the pool of available workers continues to grow from kids coming out of school.

Further, companies are not stagnant. If capital spending does not increase neither do revenues and earnings. And that forces stock prices down and borrowing costs up. Which in turn forces further reductions and unemployment as CEO's attempt to reduce costs to maintain profitability.

So, why aren't CEO's borrowing?

The CEO's first job is risk mitigation, not reward creation. In other words their first job is to not lose money. Making money is secondary.

These CEO's know that every economic cycle contraction, not caused by the FED since the creation of the FED in 1913, has ended with a consumer capitulation. Because they know this they also know that increasing capital borrowing, spending, and investing until this occurs is speculative and dangerous regardless of how cheap the FED makes money.

They also know that every other CEO knows this which is what makes business and economic cycles self fulfilling and reinforcing.

Since September 11th however, the FED, Treasury, and GSE's have been attempting to prove to the CEO's and corporate America that they can stop this cycle.

This is an awesome task and if successful will cause the WORLD to enter a new economic phase of expansion and rate of expansion the likes of which we can not even imagine today.

The risks however are gargantuan. By not allowing the traditional cycle to complete its course and by attempting to mitigate it the US Fed, Treasury and GSE's are running the risk of a world wide systemic financial, economic, political and social collapse worse than the 1930's.

This is the economic equivalent of changing the course of the Mississippi River and the entire world is watching the US to see if we are successful. The longer we go without success the less probable success is.

The FED controls the supply of and cost of money in the US economy to the banking system and has an internal portfolio of about 700 billion dollars. Using open market operations they use this money to either inject money into the banking system or remove money from the banking system.

The GSE's, Fannie Mae, Freddie Mac and the Federal Home Loan Banks control the supply of money to the housing market and the ease with which it may be accessed. They control a portfolio of about 6 trillion dollars; almost 10 times the size of the FED. Because of this they actually have a much larger impact on economic viability than the FED does. There is a saying: As goes housing, so goes the economy. It is usually very true. They do not however control the cost of money to the housing sector.

That is controlled by the US treasury through the issuance of US treasury notes and bonds, which is what mortgage rates are tied to, and by the bond markets appetite for them, which determines their price and yield. The treasury has a portfolio of about 4 trillion dollars of debt which they control.

The last piece in the puzzle to be added is fiscal stimulus which is controlled by the Whitehouse and congress through both government spending and tax cuts.

The FED has done most of what it can reasonably do to drive short term rates down through monetary policy in an attempt to compel companies to increase borrowing and spending. So far it is has failed to compel companies to borrow even though consumers continue to spend. Compounding this for the US FED now is that going lower further without a corresponding reduction in rates by the ECB could actually result in the exact opposite of what is intended; i.e. it could drive money out of the dollar and US economy in preference for the higher returns in Europe.

The US Treasury has done most of what it can reasonably do through treasury issuance and the cancellation of the 30 year US treasury bond in an attempt to drive long term rates down and keep mortgage money cheap. So far this has failed to reduce corporate borrowing costs as speculative grade credit spreads and thus the cost of long term borrowing to companies are rising rather than falling. It has succeeded in reducing the cost of mortgages to consumers.

The GSE's have done all of what they can do to keep consumers buying houses by making mortgage qualifications as easy as possible. They have even made them imprudently easy to access, which will cause problems in the future and is the subject for another day.

Fiscal Stimulus

Fiscal stimulus in the form of tax cuts rather than government spending is the last tool available and there is no guarantee we will get it soon. However, no matter when we get it, if it doesn't work the world economy will begin to fail.

With an election coming up in November and the Democrats smelling blood in the water it is impossible for fiscal stimulus by way of tax cuts to be implemented before the election.

The Republicans have done such a poor job of explaining to the American people why tax cuts are necessary that I am left wondering whether or not there is any intelligence in the party or the Whitehouse at this point. I do not say this jokingly. Tax cuts are our last hope to make this new economic cycle real and avoid a world wide economic collapse.

So, why are the Democrats opposed to tax cuts?

Because it would inevitably lead to an initial BOOM in stock prices and perhaps make the new economic cycle real. If that were to occur under Republican leadership and guidance it could literally be the cause of the beginning of the end of the Democratic party as a viable political institution in the US.

Additionally, they have their own agenda on what direction to take the new economy and the relationship between the political and economic states. Their agenda is to increase governments roll in economic activity rather than decrease it. They are using this volatility to grab for political power and they appear to be doing a better job of winning their case with the American media and people than the republicans are.

But why would the Democrats be willing to sacrifice the economy simply to win power and why haven't the republicans been able to explain something so obvious? I don't know.

What I do know is that the agenda to end this crisis laid out by the Democrats, increasing taxes and government spending will destroy the US and world markets and economies over night. One of the primary drivers of the markets right is concern on the part of investors that the Democrats will win the elections in Congress this year and perhaps take control of both houses. That would kill any chance at tax cuts and doom the economy; and that is what investors are beginning to fear.

So, with so much at stake for both political parties as well as the US and world economy why are our public and quasi-public leaders at the FED, Treasury, Whitehouse and GSE's taking this risk?

Globalization demands it. If the US and western civilization is going to fully convert the world to our economic and political systems we must be able to prove to the world that our systems are absolutely controllable. In other words that we can make depressions non-existent.

And the only way to do that is to face down a depression with all the tools we have and successfully stop it from occurring.

Will it happen?

I don't know but I am not willing to bet my financial capacity and future on it.

This is clearly the only story we have. Each day I write is another chapter in the continuing saga. I earnestly hope you are getting something out of this.

US rates 'could hit 1930s levels'

By George Trefgarne, Economics Editor (Filed: 07/08/2002)

Wall Street rallied dramatically yesterday on hopes that the US Federal Reserve will deliver a shot in the arm to the American economy next week with an interest rate cut.

The Dow Jones index finished the day up 230 points at 8,274. In London, the FTSE 100 index of leading shares also rallied, closing up 134.6 at 4131.0. Major US investment banks are queuing up to forecast cuts in US interest rates.

Lehman Brothers said yesterday it had seen "enough economic and financial pain" and was changing its forecast. "The precise dimensions of such a move are hard to pinpoint, but our main scenario is a quarter point cut at the September, November and December meetings, pushing the funds rate down to 1pc," said Lehman.

That would leave US rates at their lowest since the Depression era of the 1930s. Goldman Sachs also believes US rates could be cut next Tuesday, when the US Federal Reserve's open market committee meets.

However, at 1.75pc, US interest rates are already at a 40-year low and Peter Dixon, an economist at Commerzbank, said some traders were guilty of wishful thinking yesterday. "There could be another cut in US rates," he said, "but I am not expecting one until October. You must remember that this is August and markets are very thin."

Mr Dixon cited the US Federal Funds Futures contract, which is traded at the Chicago Board of Trade. The contract for September was trading at 98.33 yesterday, indicating that no change is expected by a market that watches the Fed's moves very closely. However, the October contract is forecasting a cut.

The dollar also had a strong day against most major currencies as funds flowed into the US stock market. The dollar's strength struck a blow against the pound, which dropped sharply against the US currency in its worst day's trading for more than five years.

By the close in London the pound had fallen 3 cents against the dollar, to end at $1.5383. The dive came the day after National Statistics said that manufacturing output had plunged in June at its fastest rate since 1979.

Some currency analysts said that although there is a growing view that the US economy will suffer a so-called "double-dip" recession, it could recover faster than the UK as the US authorities have taken swifter action.

"Today's situation is because of the dollar and interest rates," said Ryan Shea of Bank One. "The US recovery will be quicker than in the UK economy." The International Monetary Fund produced its latest forecast for the US economy yesterday and said it expected growth to accelerate from 2.5pc this year to 3.25pc next year.

However the trade-weighted index, which measures the pound against a basket of currencies, showed it almost unmoved, dropping from 106.8 to 106.7, as it gained slightly against the euro to 62.69p. The euro was also weak against the dollar, slipping more than two cents to 96.43.

Today, the Bank of England releases its quarterly inflation report. The minutes for this month's meeting of the monetary policy committee, when rates were left at 4pc, will also be published.

Economists will be watching to see if Mervyn King, deputy governor of the Bank, repeated his lone stance of July when he voted for a rate rise.

Real Estate

Feel free to call me or send me an e-mail about your situation and we can figure out if it is viable and advantageous for you to refinance. I can be reached at 1 800 658 2813 or roger@myhomelender.com

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PAR Mortgage Rates

Mortgage Rates at PAR Par means the average base cost of money when quoted. Par is also referred to as "zero points, zero closing costs". In order to get the PAR rate a mortgage borrower must pay a 1% origination fee plus about 1% in their local regulatory fees but no discount points. These rates are not a commitment to lend. From these baseline levels rates may be decreased through the use of discount points or increased to reduce transaction costs.

Conforming Jumbo
Secondary Market $300,700 or less $300,701 or more

30 Year Fixed 6.250% 6.500%
15 Year Fixed 5.750% 6.000%
10 / 1 Hybrid Arm 6.500% 6.625%
7 / 1 Hybrid Arm 5.500% 6.000%
5 / 1 Hybrid Arm 5.125% 5.375%
3 / 1 Hybrid Arm 4.875% 5.000%
1 Year ARM 4.125% 4.250%

Primary Market

COFI Start / Accrue 2.950% / 5.9%

MyHomeLender.com


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Golden Bear
(08/08/2002; 18:27:41 MDT - Msg ID: 82600)
Greenspan-san, can you give me another hit?...
http://www.mises.org/fullstory.asp?control=1022Snippit:

"....Somehow, someway, it always comes back to the central bank. With economic anxiety growing, trouble in Latin America, frustration at the length of the recession, suspicions that matters are going to get worse before they are better, and, above all, terror that stock prices could fall ever further, Alan Greenspan is letting it be known that rate cuts are not out of the question. One percent is the target being tossed around. The hint alone sent the financial markets soaring.

To inject more money and credit into the system at this stage is extremely dangerous. That point might seem obvious to those in the know. It was excess credit that created the boom of the late 1990s and led to the bust which caused the Nasdaq, for example, to fall by 80 percent. Is the bust over? Either it is, in which case loose Fed credit can only distort what might otherwise be a sound recovery, or it is not, in which case loose credit can only turn the bust into something worse than it is already.

What an illusion, to believe that more money is the answer! And yet this is precisely the prevailing ethos in financial markets and politics. If the market soars on the prospect of more Fed credit creation, it is seen as a vote of confidence in the Fed's idea. The financial markets have become like crowds in Brave New World demanding more Soma, the calming, happiness pill distributed by the government. Everyone pretends there is no downside...."

----------------------------------------------
GB: Greenspan is about to send the USA down the path of Japan's failed beaurocratic attempts to stop the deflationary tsunami that has swept it's economy into a perpetual depression for a decade...

Gold: never misallocated in your possession...

Boilermaker
(08/08/2002; 18:40:01 MDT - Msg ID: 82601)
China's oil
http://www.eia.doe.gov/cabs/china.htmlI happened to run across this site and recalled Belgian's question about China's oil situation. It appears that China, currently importing about 1.5 million bpd, will be taking a much greater share of the world's oil. The production chart suggests they are reaching a plateau while the consumption chart is parabolic.

snip;
OIL
China currently is the world's third largest oil consumer, behind the United States and Japan. Consumption of petroleum products totalled 4.78 million barrels per day (bbl/d) in 2000, up from 4.36 million bbl/d in 1999. China is expected to surpass Japan as the second largest world oil consumer within the next decade and reach a consumption level of 10.5 million bbl/d by 2020, making it a major factor in the world oil market.


silvercollector
(08/08/2002; 18:49:45 MDT - Msg ID: 82602)
Clip form BillinOregon below
"Since September 11th however, the FED, Treasury, and GSE's have been attempting to prove to the CEO's and corporate America that they can stop this cycle.

This is an awesome task and if successful will cause the WORLD to enter a new economic phase of expansion and rate of expansion the likes of which we can not even imagine today.

The risks however are gargantuan. By not allowing the traditional cycle to complete its course and by attempting to mitigate it the US Fed, Treasury and GSE's are running the risk of a world wide systemic financial, economic, political and social collapse worse than the 1930's."

I invite everyone to read the above 3 paragraphs a hundred times. It explains the volatility, it explains why the Dow can bounce around -150, +150, -500, +500 in the last few weeks. It explains why gold has attempted 330 (3) times before failing and the latest swoon.

It implies that the next major leg up or down will be decisive. I have spent the last year reading inflation/deflation books. Inflation once harnessed and controlled in the 1-3% range is a good thing. People don't 'notice' the subtle changes in the price of goods and love the pay increase, it makes them feel like they are getting ahead. All the while, debt gets smaller so they borrow more. It's a controlled burn, it is physcologically pleasing. Deflation on the other hand is alarming, assets shrink, the paycheck shrinks, and debt grows. Who cares if eggs are $1.20 this week and $1.10 next. Deflation is alarming.

The point here is that scads and scads of money are on the sideline. It will be deployed when J6P finally sees the opening, when it is clear. When money flows it will be breath taking. We should know soon enough.

As the above quote notes we will see 36,000 Dow or we will see disaster, I see nothing in between.

slingshot
(08/08/2002; 19:27:23 MDT - Msg ID: 82603)
Gandalf The White Msg# 82540
******************************My jaw just bounced off the keyboard. I said to myself, Oh Boy! How am I going to weave this one. Thank you, Good Wizard.
No better words could have been spoken.
Lady Waverider sure put a twist in the story. :0)
Slingshot---------------<>
Cometose
(08/08/2002; 19:47:00 MDT - Msg ID: 82604)
#82601/ #82602
To view the future , look at the past ; specifically look at the NIKKEI chart for the last 15 years and we might gain a glimpse at what might be in store.... When one looks at these two market collapses , one past and one coming,,,makes one wonder at the possible engineering that goes into one of these events....Wonder who was behind the pump and dump in the Japanese markets last time.....
I thought I read something here the other day about the pe ratio on Japanese stocks being 100 at the peak.....
what earnings prospects lurk or economic miracle is in our future which is going to cure what ails us and usher in this " NEW AGE " .....HAHAHAHAHAHAHHAHAHHAHAHAHAHHAHAHAHAHHAHAHAHAHAHHAHAHAHaHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

False hope (Lies: black is white/ I didn't sleep with that woman, New economy companies don't need to make earnings..ad nauseum ) is the tonic that is used to buoy these markets and suck more money in as the big boys pump on the way up and dump on the way down.....using the media to do their counter intel .

I don't want to leave out the terrorist chess match ......
Sadaam and Osama are going to lay down their arms and have tea with George Bush and Margaret Thatcher at Buckingham Palace with the Queen....and Christopher Robin and Winnie the Pooh are also going to be there....I'm getting a warm fuzzie feeling already....

....back on a more serious note...a key piece in the M E equation may have been left out..... aside from the fact that it's going to(hint) interrupt oil flows.....I wonder if there isn't someone else out there with an agenda to fill that hasn't weighed in yet.... or been accounted for ??????????????????????????????????????????????????????????????????????????????????????????????????????????????????????

Out of all of my observations and learning here....one thing has become apparent .... a nation can float a lot of ideas on its currency when it is the reserve currency of the world...... as long as the world percieves the currency to be worthwile ... ; it is very important what ideas are being floated globally..(another cost of losing in financial war/ for which SIR ALAN may also be held accountable...

the danger i percieve and which is beginning to concern me more and more relates to who is holding whose markers and

my growing perception of Banker's being whores /in finance without regard to who the bidder is
silvester
(08/08/2002; 20:12:17 MDT - Msg ID: 82605)
Message #82599 Roger Bently Arnold's comments
As usual, we are continuing to recieve facinating information at this site. I hope for and look forward to hearing the thoughts of the analysts who share here in regards to the Roger Bently Arnold message posted by BillinOregon.

Specifically, do most here believe that America has really bet the farm?
mikal
(08/08/2002; 20:36:26 MDT - Msg ID: 82606)
The Putin Project: Final Phase!
http://www.themoscowtimes.com/stories/2002/08/09/006.html"Any excuse will serve a tyrant"-Aesop, The Wolf and the Lamb..... " If central banks have their way, nationalizing mines will be as commonplace as fresh fiat stock repurchases.

Friday, Aug. 9, 2002. Page 8
The Putin Project: Final Phase
By Boris Berezovsky
...snippit.....At the end of July, Dmitry Kozak, the deputy head of the presidential administration, proposed an amendment to the law on subsoil resources which, if passed, would fundamentally alter the economic system that is taking shape in Russia. What we are talking about is the nationalization of oil, gas and all other natural resource companies. The essence of the amendment can be summed up very simply: to convert existing natural resource production licenses into concessions. In other words, going over to the form of relations between capitalists and the state that Vladimir Lenin bequeathed to us ("A concession is an agreement between the state and the capitalist. The latter becomes a leaseholder rather than owner").
Just about everyone with the slightest understanding of how a market economy works immediately started commenting..... End snippit
....."There is not a truth existing which I fear, or would wish unknown to the whole world."-Thomas Jefferson, letter to Henry Lee, 1826
a nation of one
(08/08/2002; 20:37:23 MDT - Msg ID: 82607)
Pizz msg#: 82574
Pizz (08/08/02; 11:44:44MT - usagold.com msg#: 82574)
You reply: "Keep in mind that real rates are the net of actual rates minus inflation."

Fair enough. But for a large national economic system such as the U.S., the inflation rate is itself hypothetical. Even the margin of error cannot be measured in reliable terms. It can be claimed to be. It can be rationalized as being. It can be published as if it were. Government operations can be based on it and carried out as though it were. But that is not proof that it is. And in fact, no attempt has ever been made to measure all prices in every locale. Without that, any announced 'Inflation Rate' necessarily contains within it a profoundly substantial extent of uncertainty. I rather suspect that official inflation rate estimations are only attempted because it would be nice to know what they are, than that they are accurately determined, then known, and then announced. Such numbers, when used in calculations, show more about the nature of mathematics, than they do about economics. And the proof of this is to be found in the fact that different human individuals in charge of economic factors do not tend to take identical actions in like circumstances.
Trurl
(08/08/2002; 20:50:05 MDT - Msg ID: 82608)
Question for Black Blade
A question for Black Blade --

Since you are our oil biz guy, where does the USA currently import most of its oil from? Isn't it largely from Mexico/South America?

So why is the US in the mid-east, other than CONTROL?

If we control/manage SA and/or Iraq's fields, we have something to say to Europe, yes? Asia, too?

Also thanks for your updates here, from a nominal lurker.

Trurl

a nation of one
(08/08/2002; 21:27:59 MDT - Msg ID: 82609)
of interest
The IMF bailout of Brazil is not being done to help Brazil. Ultimately, Brazil will be worse off, not better off. The bailout is to increase the wealth of the lending banks. Much of what will be paid by Brazil -on the new loans- will be interest. And it is the receipt of interest payments that increases the wealth of lending banks. Lending is how these banks make their money. Their loan to Brazil is just another aspect of their business. What happens to Brazil is of no concern to them.
Horatio
(08/08/2002; 21:28:21 MDT - Msg ID: 82610)
currency & Brazil
A strong Dollar makes paying back debt to the U.S.or IMF impossible.If the REAL devalues or Dollar gets stronger its the same thing for debtors.Why doesen't Brazil take the 30 billion and hedge its currency debt,then default on the loan which will collapse the REAL and bring enormus profits to the hedge.Reduce its interest rates below U.S.rates to improve exports.This will cause JPM and Citi enormus problems ,cause the Dollar to collapse.Then Brazil can take its hedging profits and pay back all its debt at very favorable exchange rates.
Its very simple,its just the opposite of what the bankers do to them.
Gandalf the White
(08/08/2002; 21:32:55 MDT - Msg ID: 82611)
Sir Slingshot's Message # 82603
slingshot (08/08/02; 19:27:23MT - usagold.com msg#: 82603)
Gandalf The White Msg# 82540
******************************
My jaw just bounced off the keyboard. ------
===
I almost like you, could only laugh when I was thrown that tricky Waverider "Curveball" from far Left Field ! --- It took a lot of thought to not just send YOUR Serial down the drain ! Like I could have said -- "OFF with their HEADS!" -- and that would have caused the demise. I really did try to give you lots of possibilities ! Please note that the "Seige Engine Serial" now begins to appear as being "Non-fictional", as the REAL WORLD is looking daily, more like a Fairy Tale. I believe that Waverider is testing your spontanious reaction writing ability ! Like one of those games where each person, in order, continues the telling of a tale until it ends with the last person. (Or am I just dreaming again ?)
<;-)
mikal
(08/08/2002; 21:35:30 MDT - Msg ID: 82612)
IMF, Financial Sector, PPI, FED surprises- standard operating procedure masks substandard economic performance
Stock markets rally on word of a positive outlook for the financial sector due to a record IMF loan. And PPI numbers lower than expected. And another little surprise- the Fed is reported to be "leaning in the direction of a rate hike". That is reported today to be one of the factors rallying US markets for the 3rd day in 4. True, but you won't hear them say that the markets have discounted a rate cut the last several such Fed moves, falling on the day, or just after. Now the Fed is milking the issue, "leaning", not yet cutting. A new bias signals Fed resolve. New ammunition for stock promotion, plus a 1/4 pt. cut in a couple weeks hence, another series of "rumors", another pathetic cut, etc., the final remedy.
Horatio
(08/08/2002; 21:52:32 MDT - Msg ID: 82613)
Brazil
Follow up on Brazil..After all debts are paid back Brazil should issue new currency,remove all taxes on foreigh investment.Disavow all tax reporting agreements with the U.S.
Give 15 year tax prohibitions for all new company investment.
In short become an offshore "tax haven" of major proportions.This will force the other countries to lower taxes of all sorts and create a worldwide boom that would include Argentina and other neighbors of Brazil.
This will bust up the Banksters grip on the world with thier debt ..debt and more debt.
sector
(08/08/2002; 21:56:24 MDT - Msg ID: 82614)
'Govt should bail out [Japanese] banks'
Can You Say "Nationalize"Yomiuri Shimbun - August 7, 2002

The government should quickly inject a substantial amount of public money into the banking system to clean up nonperforming loans held by financial institutions and restore confidence in the system, Paul Sheard, Lehman Brothers' chief economist for Asia, said Thursday.

Speaking of the cap on deposit refund guarantees, he said, "The government cannot remove the guarantee while there is no end to the NPL (nonperforming loan) resolution in sight, without triggering a run on the banking system."

Sheard, speaking to reporters at Lehman Brothers Japan Inc., added, "The only way to roll back the guarantee without triggering an escalation of financial instability is to remove the underlying source of instability--this huge amount of NPLs--and thereby restore confidence in the banking system."

The Tokyo-based economist urged that the government inject a substantial amount of public money into the banking system, financed mostly by the Bank of Japan, as part of deflation-countering monetary quantitative easing.

However, Sheard was not confident such a bold step actually would be taken anytime soon. "The framework exists to do this, but the policy coordination and political will are lacking," he said.

Recalling that Prime Minister Junichiro Koizumi initially was given a strong voter mandate, he said, "The tragedy for Japan is that it missed the opportunity (to resolve the bad debt issue) last year when Koizumi was enjoying 80 percent popularity."

Sheard said the government was "watering down" the deposit insurance cap proposal by extending the guarantee on settlement deposits--which amounts to 35.4 trillion yen or 7.1 percent of total deposits. "The government is creating a loophole in the deposit insurance cap by moving to fully guarantee settlement deposits," he said.

He concluded, "This slows down reform and serves to prolong Japan's economic malaise."
+++++++++++++++++++++
The obvious trial balloon here is a huge nationalization of the "Problem banks" and that is almost all of them.

Hapless Japanese who still have savings in a deposit account in April 2003 will lose everything. The checking account [Settlment account] stuff is noise to try and keep some deposits. Half have already flown the coop...probably into the mattress.

What you see in Japan is coming to a country near you. They are marvelous stalking horses because they aren't skilled in the art of the lie. The ham-fisted handling of all this Japanese savings deposit nonesense shows us that gold is EXACTLY the medium in which to secure your wealth.

Accept NO substitutes.
mikal
(08/08/2002; 21:59:33 MDT - Msg ID: 82615)
Bloomberg and other media outlets
...reported today, the recent strength in equities is attributed, at least in part, to expectations that the Fed next week, will signal a change in bias, leaning towards cutting rates. Have the big traders already discounted the news? Probably, but the rate cut snake oil remedy has been locked away for so long, inexperienced fund managers and average stockholders will welcome this like before, for a short while. The banks will benefit as loan repayment is made easier and defaults postponed and from broker fees, liquidity, and easier credit offers.
Operative
(08/08/2002; 22:58:46 MDT - Msg ID: 82616)
August Is Not a Good Month for Stocks
http://quote.bloomberg.com/fgcgi.cgi?T=money_nstory.ht&s=APVLZ2hPrQXVndXN0A historical look at the month of August
Operative
(08/08/2002; 23:05:27 MDT - Msg ID: 82617)
California to bail out PG&E
http://ap.tbo.com/ap/breaking/MGA1D3XGN4D.htmlSnip:
SAN FRANCISCO (AP) - The Public Utilities Commission has approved the use of state funds in the forming of a partnership to get California's largest utility out of bankruptcy.
The commission funds can be used to pay expenses for investment banker UBS Warburg while the PUC plans how to handle the bankruptcy finances of Pacific Gas & Electric Co
Sierra Madre
(08/08/2002; 23:18:09 MDT - Msg ID: 82618)
a nation of one - your comments @message 82607

Pizz said in his message 82574:

"keep in mind that real rates are the net of actual rates minus inflation"

This is one of those falsities that are repeated so often that it becomes next to useless to combat them.

First place, inflation is NOT a percentage of rise in prices.That's what everyone calls inflation, but calling a rise in prices inflation does not make it so. Inflation is an increase in the supply of money, period. Mostly this increase is accompanied by a rise in prices, but sometimes is not. Is a viral infection a fever? No, fever is a symptom of a viral infection.

If we say, "real rates are the net of actual rates minus the rise in prices", we can begin to see that this is all nonsense. There is no entity on this earth that is qualified to produce an index that will objectively, scientifically reflect a phenomenon such as a rise in prices. Any such index is utterly partial and biased.

"Real apples are the net of actual apples minus the general preference for chocolates." Does that make sense?

What about "Real apples are actual apples are actual apples are actual apples"? Sounds better to me, anyway.

This netting of actual interest rates by some figment of someone's imagination - that's what a calculation of a rise in prices is - is total nonsense and you hear it every day from people who have Ph D's and supposedly got an education.
It is mixing in utterly an impermissible fashion, two concepts.

It is balderdash for public consumption and pacification. It just goes to show how stupid the public has become in the handling of money.

Crazy world!

Sierra
Operative
(08/08/2002; 23:25:09 MDT - Msg ID: 82619)
(No Subject)
http://www.usnewswire.com/topnews/prime/0807-106.htmlSnip:

News Advisory:

New Jersey citizens are blowing the cover on an exclusive,
invitation-only private gala for corporate lobbyists. Only days
after Congress adjourned promising to crack down on corporate
crime, fraud and abuse, prominent Senators are set to party at an
elaborate fundraiser.

On Thursday, Aug. 8, leading Democratic Senators will have a
golf tournament and soiree at Jasna Polana, the former mansion of
Johnson & Johnson magnate J. Seward Johnson and now one of the most
exclusive clubs in the country.


Let's think about this for just a second. Elections coming up in November. Dem's NEED dollars badly. Meeting with those who have lots of dollars. Willing to trade dollars for
help in creative accounting for thier bookeeping dept.,reduce jail time for CEO's, future Presidential Pardons even. Yes sir, a marriage of convience if ever I did see one.

Black Blade
(08/08/2002; 23:41:07 MDT - Msg ID: 82620)
Re: Trurl - Oil

The US gets a large measure of its oil from Venezuela, however, there is some imported from the Middle East. You will have to excuse me as I have been out most of the night touching base at a big get together with a number of natural gas land men and geologists. There were copious quantities of adult beverages so my thinking is a little hazy right now.

Oil is an international commodity with various grades and quality. So any shortfall in production will affect all oil consuming countries. This painful fact came to light in 1973 with the Arab oil embargo when a mere 10% cut in oil production impacted all oil consuming economies. One result was the creation of the Energy Information Agency that was originally an agency to make sure that all economies received equal allotments of oil. However, the embargo did reveal that everyone was vulnerable to the "oil weapon". The "Oil weapon" also showed the world that no matter what the reasoning for the embargo, oil was an international commodity. The result was that nearly all western economies suffered inflationary recessionary pressures. The 1979 Iranian revolution coupled with the Russian invasion of Afghanistan had the same result.

I guess the point is that if oil is withheld from the market, all economies are at risk. If the major oil producers such as Saudi, Kuwait, or Venezuela were at risk as a result of invasion or political reversal (such as a coup or change of government), there is no doubt at some point the US and possibly the allies would resort to war in order to secure the free flow of oil. After all, we did go to war with Iraq because of the Iraqi invasion of Kuwait over oil. We surely would do again if the oil supply were to be at risk. Oil is the life blood of the economy, and simply put, without oil there is no economy. In our modern society oil is as important as food, water and air.

That makes the Iraqi question and the possibility of upheaval in the Saudi royal order of succession so important. The Saudi oil constitutes over 25% of all ME oil. If the Wahabbi or Al Qaeda factions were to gain control, there is absolutely no doubt that the US would go to war. Saudi oil is referred to as "The Prize" in terms of world oil. In fact there is a very good book entitled "The Prize" by Daniel Yergin that is well worth reading if you should get a chance to read it. We commonly say that "he who has the gold rules", however, he that has the oil controls those who rule.

Simply put, oil is that important to life and society as we know it. We fought wars over oil and wars have been won by those who had access to it. The reason Japan went to war was because they had no oil (or any natural resources) and Nazi Germany lost (or at least lost more quickly) because they had insufficient fuel to carry the fight against the well supplied Allies. The west is no longer self sufficient in terms of energy and we will use whatever means at our disposal to obtain it. As the number one military power we would even fight our own allies for oil if it came down to it.

The problem that really irks many is that we failed in the Persian Gulf conflict. We did not finish the job and now our allies are a little sketical about going back for seconds. General Norman Schwarzkof had also made this very point before the general staff before he retired (resigned?). I think that we will fight again, however, we may have to go it alone as no one trusts us anymore.

- Black Blade
Black Blade
(08/09/2002; 00:09:22 MDT - Msg ID: 82621)
Bush says he inherited recession
http://money.cnn.com/2002/08/07/news/economy/bush_cheney/index.htm
Bush, Cheney take advantage of revised GDP data to say economy a mess when they took office.

Snippit:

NEW YORK (CNN/Money) - Although last week's revision of U.S. gross domestic product data for 2001 may have been old news for the economy, it was something of a stroke of luck for President Bush, who has since used it as evidence that he inherited an economic mess when he took office.

Black Blade: No kidding.

Black Blade
(08/09/2002; 00:15:14 MDT - Msg ID: 82622)
American borrowing rose sharply in June
http://www.kansascity.com/mld/kansascitystar/business/3819528.htm
Borrowing more

Snippit:

Americans shrugged off worries about the economy and the recent stock market slide and borrowed a seasonally adjusted $8.4 billion more in June than they had in May. That was bigger than the $7.8 billion advance many analysts were forecasting and left consumer borrowing at $1.71 trillion. Economists said low interest rates, rising home values and extra cash from the refinancing boom were supporting consumer spending.


Black Blade: People are digging themselves into a deeper hole. At some point the piper must be paid.

Black Blade
(08/09/2002; 00:23:23 MDT - Msg ID: 82623)
A Latin crisis to rival Asia?
http://www.iht.com/articles/67101.html
Snippit:

WASHINGTON The conventional wisdom has been that South America in 2002 is not the same as Asia in 1997 and 1998, when financial crises spread from country to country, toppling 40 percent of the global economy into recession. But in view of the recent turmoil in Uruguay and Brazil following Argentina's record debt default last year, some economists are worried that the conventional wisdom may be wrong. "Let's face it: The dominoes are falling again," said David Wyss, chief economist at Standard Poor's Corp. in New York. "Before, we thought Latin America would not be a replay of Asia, and now we are hoping it is only Asia in 1997-98 and not something worse." Financial markets in several South American countries have been in turmoil in recent weeks, with interest rates soaring and currency levels plunging. The situation is beginning to resemble the Asian crisis, in which troubles in Thailand in 1997 quickly spread throughout the region and then to Russia.
.
The scary thing, some economists say, is that this time around the situation could be more dire. The Asian crisis occurred when the U.S. economy was soaring. After the Fed cut rates and market stability returned, American consumers went on spending, helping serve as a growth engine for the rest of the world. But now the United States is struggling to emerge from a recession and the worst bear market on Wall Street since the mid-1970s.


Black Blade: The situation in South America is as dire as that in Asia of 1998. Actually it could be worse and it could ripple throughout South and Central America until it lands on US shores as US banks take a big hit. At least the IMF loans will buy time for a lot of interests such as counter party banks unload and bailout leaving some one (US taxpayers?) burdened with the final bill.

Spartacus
(08/09/2002; 00:57:14 MDT - Msg ID: 82624)
The case against Alan Greenspan
http://money.cnn.com/2002/08/06/news/economy/greenspan_case/index.htm
NEW YORK (CNN/Money) - There's a growing list of shamed corporate executives, Wall Street analysts and inept government officials being blamed for the current misery in the economy and the stock market, and many of those names are obvious.

steady
(08/09/2002; 01:07:52 MDT - Msg ID: 82625)
interesting story
http://www.pbs.org/wgbh/commandingheights/lo/ideas/vid_essaylist.htmlvideo of the development of the global economy as aired by pbs, u can view some/most over the net. use the above link then use the sitemap to find more.
steady
(08/09/2002; 01:28:26 MDT - Msg ID: 82626)
s.american dominoes
hey did he steal my line? i think i posted that here a week or so ago! i should have copyrighted it and used the profits to support our host and add to my portfolio insurance!
i think maybe we should watch mexico,and venz currencies as they will be next? Chile is taking preempive stategy,to avoid it. can they? hmmm not as deep as alot of others here but its easy to follow the storyline and the script, unravel the sweater (usa/imf) start at the bottom (argentina) and work your way up,( mexico)rember many of the usa manufacturing jobs were exported to mexico,and with the durable good orders surprsingly down -3% u can bet your bottom gram/grain of gold that factories in mexico will soon be laying off workers. the unemploymnet spiral and workers/serf/slaves ability to prop the system up will deteriorate untill..... well heck we see free gold, and u best have as much as your understanding allows u to posses.
Belgian
(08/09/2002; 03:02:38 MDT - Msg ID: 82627)
Remarkable !?
Since june up to now, USTB-10 yrs, gained 7% whilst POG declined 7% for the same period !? Thoughts very welcomed. TIA.
barnacle bill
(08/09/2002; 03:51:54 MDT - Msg ID: 82628)
Game Show Jobs
There was a program on the PBS station last nite on Argentina, it's economy, and how the people are coping with it.
One of the more interesting aspects was a game-show with a prize of a job. I remember a Russian game-show years ago with prizes like, toasters, tv's, etc.

I wonder how it will play out when it's our turn; most American homes are already filled with toaster-ovens, etc. There will always be work, but how are you going to get paid? That's the real question.
Operative
(08/09/2002; 04:10:40 MDT - Msg ID: 82629)
Gold Supply Figures
http://www.goldinstitute.org/supply/Something for the early risers.
misetich
(08/09/2002; 05:41:01 MDT - Msg ID: 82630)
Remember Fiscal Discipline? Federal budget near ABYSS
http://www.washingtonpost.com/wp-dyn/articles/A61778-2002Aug8.htmlSnip:

And a pricey prescription drug plan still looms. If it passes and the president's tax cut is extended, Robert Reischauer, a former director of the Congressional Budget Office, predicts annual deficits of $200 billion "as far as the eye can see."

"We are on the edge of an abyss, and one step more and we're going to commit fiscal suicide," said Sen. George V. Voinovich (R-Ohio).

On three proposals alone, the tax cut, the farm bill and the drug plan, Landrieu and 11 other Senate Democrats cast votes that would cost the Treasury nearly $2.7 trillion over the next decade, more than $3 trillion if added interest costs from a rising federal debt are included. During this session of Congress, 21 House Democrats voted for the tax cut, the farm bill and their own prescription drug proposal. Total price tag: $2.89 trillion over 10 years.
...............

*********

Misetich

The $ printing presses are set increase multi-fold - these politicians believe their own words - what a phallacy-
Can you imagine the shock when the US $ devalues 30-40%

Got gold?

misetich
(08/09/2002; 05:47:11 MDT - Msg ID: 82631)
Big Winged Parking Lots
http://www.economy.com/dismal/Snip:

Aug 8 2002 12:00PM

A massive inventory of commercial aircraft means that even in the unlikely event of a rapid recovery in the airline industry, it would still be a long wait before aircraft manufacturers could increase production.

Orders Are Down and Still Falling Nondefense aircraft & parts, 3 mo MA, $ bil

************
Misetich

PPT manipulates the stock market upwards - IMF bailsout "Brazil, Uraguay, Turkey,"
In the meantime global economies are going nowhere but decelarating

Sooner rather than later, the PPT, in the US, Europe and Japan will be overwhelmed by reality

Got gold?
Spartacus
(08/09/2002; 05:56:40 MDT - Msg ID: 82632)
Alan Greenspan
http://www.lewrockwell.com/corrigan/corrigan14.html
�Arise, Sir Alan!� by Sean Corrigan


misetich
(08/09/2002; 06:01:51 MDT - Msg ID: 82633)
CareFirst May Hike Premiums 20 Percent Increased Medical, Drug Costs Blamed
http://www.washingtonpost.com/wp-dyn/articles/A61606-2002Aug8.htmlSnip:

By Bill Brubaker
Washington Post Staff Writer
Friday, August 9, 2002; Page E01


CareFirst BlueCross BlueShield, the Washington area's largest health insurer, is likely to raise premiums next year by about 20 percent, on average, because of higher medical and prescription-drug costs, a CareFirst spokesman said yesterday.
.............
The survey cited by Day of CareFirst said HMOs predict that nationally they will raise rates by an average of 17 percent next year -- 2 percentage points lower than in the Washington area. The survey by benefits consultant Milliman USA Inc. did not cover less restrictive preferred provider organization (PPO) plans.

A 17 percent rate hike would be the highest in the 11-year history of the Milliman survey.
************
Misetich

Health Costs are SOARING - property taxes are SOARING - energy prices are stubbornly HIGH -
Will these stop the consumer? Of course not - as long as they can refinance, refinance, refinance - their mortgages

What about those that don't own homes?

Got gold?
misetich
(08/09/2002; 06:09:27 MDT - Msg ID: 82634)
WRAPUP 2-Japan's central bank unmoved by IMF deflation plea
http://www.forbes.com/newswire/2002/08/09/rtr691290.htmlSnip:

In a review issued on Thursday, the IMF said Japan's economy would contract 0.5 percent this year and urged the central bank to implement a policy that would put an end to deflation.

Falling prices discourage consumer spending -- the biggest chunk of the economy at 55 percent of gross domestic product -- because buyers expect prices to be cheaper in the future.

At the same time, the real cost of huge corporate debt increases, squeezing companies who are also unable to raise prices or cut wages enough to offset pressure on profit margins.
************

Stock Markets worlwide are "rallying" as economies growth(?!) go downwards

What is wrong with this picture?

Got gold?
misetich
(08/09/2002; 06:16:17 MDT - Msg ID: 82635)
Intl Bonds-Ford yields soar on downgrade rumour
http://www.forbes.com/newswire/2002/08/09/rtr691270.htmlSnip:
LONDON, Aug 9 (Reuters) - Rumours of an imminent downgrade for U.S. auto giant Ford (nyse: F - news - people) pushed yields on its euro bonds to record highs on Friday, despite a denial from Moody's Investors Service that it was contemplating a rating cut.
...........
Moody's issued a statement late on Thursday after rumours swirled about a potential credit rating downgrade for the world's second largest automaker, pushing the price of its shares and bonds sharply lower.
************

Misetich

Much anticipated - yet ANOTHER big hit to bond holders- stress will increase for insurance companies etc

Got gold?
misetich
(08/09/2002; 06:21:57 MDT - Msg ID: 82636)
Telecom industry woes continue -
http://www.forbes.com/newswire/2002/08/09/rtr691270.htmlSnip:

In the telecoms sector, Europe's biggest wireless network operator Vodafone has postponed the sale of third generation mobile phones outside Japan this year because of a shortage of suitable handsets, the Financial Times reported on Friday.

European telecoms operators, which have spent over 100 billion euros on high-speed, third-generation mobile licences, have been retreating from initial promises of service launches, blaming in part a lack of availability of appropriate handsets
..............
"On one hand it's bad news for Vodafone because their revenue growth is going to be less than expected. On the other hand, this will also mean that they will delay capital expenditure," said a trader at a European bank. "If anything it will be worse news for companies like Ericsson and Alcatel."

Europe's telecom equipment suppliers have been downgraded to "junk" territory recently, hit hard by dwindling demand for their products.
***************
Misetich

From continent to continent the downward spiral continues, corporate bondholders are being hit from all sides - banks have been "temporarily bailout" -

Things will get worse as the global economies spiral downwards-

Got gold?
misetich
(08/09/2002; 06:50:40 MDT - Msg ID: 82637)
WITHHOLDING PLUNGES 11.2% MID-JULY. CORPORATE GAINS 1ST TIME SINCE JAN. 2001.
http://www.trimtabs.com/news/liquidity/latest.htmlSnip:

There was both good news and bad news in comparing recent Daily Treasury Statement collections with that of the same year ago period. The bad news, withheld income and employment taxes were down a huge 11.2% over the week ended July 18 vs. the same year ago five days. What's more going back over the past month, the drop is 4.3%. Since current tax rates are about 3% less than a year ago, a 4.3% drop means after tax wages and salaries are down year over year. That reverses a string of around 0%, after adjusting for lower rates, year over year change in wages. Does the drop in withholding mean that summertime hours are being cut or is this drop just noise? We will be watching and reporting.

The good news is that the mid July corporate tax payment rose 12.8% from the prior year. That's the first time since January 2001 that corporate tax payments rose. We were not able to reach any of our Washington sources who actually follow daily tax collections to check if indeed this means that corporate income has stopped dropping. The Bureau of Economic Analysis has been saying that corporate income had been rising during both the 1Q and 2Q of this year. For that to have happened, the BEA must be ignoring corporate tax payments. Yes, corporate taxes after refunds are up, but then refunds are from prior periods.
************
Misetich
Quote
Since current tax rates are about 3% less than a year ago, a 4.3% drop means after tax wages and salaries are down year over year.
End of quote

Oh oh - does that mean that "spending income" increase being reported is nothing else but a transfer of "savings" from the Treasury to the consumer?

No wonder the budget deficit is SOARING out of control -
Got gold?
steady
(08/09/2002; 07:03:53 MDT - Msg ID: 82638)
more bombs
Bomb/Spanish -2: No Injuries Reported
LONDON (Dow Jones)--An explosion damaged a restaurant Friday in the Spanish resort of Torrevieja after a telephoned bomb warning on behalf of the outlawed Basque separatist group ETA, the BBC reported.
There were no injuries following the evacuation of the restaurant, Interior Ministry official Francisco Camps told the national news agency Efe, The Associated Press later reported.
Spanish radio said the targeted establishment was a burger restaurant.
An anonymous caller to the Gara newspaper in the northern Basque region had warned more than an hour earlier that explosive devices were set to detonate in Torrevieja and 25 kilometers away in Santa Pola.
There was no report of an explosion in Santa Pola, although police evacuated beach areas in both towns.
Last Sunday, two people - including a 6-year-old girl - were killed when a car bomb exploded in front of a military police barracks in Santa Pola.
ETA, which stands for Basque Homeland and Freedom, has waged a 34-year campaign for independence of the region of 2 million inhabitants in northern Spain. Some 800 people have been killed.

they call ahead at least!
Operative
(08/09/2002; 07:14:40 MDT - Msg ID: 82639)
JPM has it's work cut out today.

. . J.P. MORGAN CHASE & CO (JPM) . CITIGROUP INC. (C) . BEAR STEARNS COS (BSC) .Morgan leads the list of Worldcom Corp.'s (WCOEQ) unsecured .creditors with $26.8 billion in debt, according to USA .Today; confirmed Friday that it found an additional $3.3 .billion of improperly booked EBITDA, and said it is likely .to write off $50.6 billion of goodwill and other intangible .assets. Citigroup has about $3.3 billion in unsecured loans .and Bear Stearns has $2.7 billion. . J.P. MORGAN CHASE & CO .
JPM, Worth watching today.
steady
(08/09/2002; 07:16:21 MDT - Msg ID: 82640)
looks like someone doesnt want the infrastructure in place to build the pipleline
http://story.news.yahoo.com/news?tmpl=story&cid=514&u=/ap/20020809/ap_on_re_as/afghan_explosion_11Blast Kills 10 in E. Afghanistan
Fri Aug 9, 8:54 AM ET
Top Stories - AP

Blast Kills 10 in E. Afghanistan
Fri Aug 9, 8:54 AM ET
By AMIR SHAH, Associated Press Writer

KABUL, Afghanistan (AP) - A powerful explosion ripped through an Afghan construction firm's building in the eastern city of Jalalabad on Friday, killing at least 10 people and injuring at least 25 others, the Jalalabad police chief said.
Hazrat Ali, a local military official, initially reported 12 dead and 85 injured.
The thunderous blast also damaged 50 surrounding homes, some as far as 500 yards away, Ali said.
The explosion occurred just 200 yards from a hydroelectric dam, and damaged the dam's electrical works, along with the power system for nearby Jalalabad University and the surrounding district, police chief Shah said. The building was still burning two hours after the blast, Ali said.

hmmmm perpetual war for perpetul peace......yea right
Socrates964
(08/09/2002; 07:23:28 MDT - Msg ID: 82641)
R. B. ARNOLD REVISITED
Not sure I buy RBA's 'All or nothing' scenario.

Firstly, it requires foreign capital to buy into the 'new boom' story - and I'm not sure foreign capital wants to or needs to play ball with Dubya, nor is the average European/Asian up to his or her neck in short-term debt/very long of equities.

Secondly, US mutual fund cash positions in June were down to 4.6% of assets - almost at the historic low of 4% at the March 2000 top.

The only scenario I can see for Dow 36,000 is with real hyperinflation in the greenback - and if Brazil is anything to go by, hyperinflation massacres both private investment (because no-one can project long-term project returns) and public sector spending programmes (because the lag in getting congressional approval shrinks the real value of the funds when they are finally released.
Black Blade
(08/09/2002; 07:58:57 MDT - Msg ID: 82642)
Real Estate Can Be The Next Bubble
http://www.philly.com/mld/philly/business/columnists/andrew_cassel/3829561.htm
Snippit:

Keep in mind, also, that most people don't invest in stocks by putting 10 percent down and borrowing the rest. A 10 percent drop in your stock portfolio can be unpleasant, but a 10 percent drop in home prices can wipe out your entire investment. It's not hard to imagine an eager buyer jumping into a hot real estate market and later discovering not only that she overpaid, but that she is trapped - unable to sell the property for as much as she borrowed to buy it. Such stories were fairly common in parts of California and Massachusetts 10 years ago, and it could happen again.


Black Blade: Of course how many houses are needed before the market becomes saturated? Many are buying real estate believing it is a safe haven. They may find themselves trapped and burdened with debt when the bubble pops.

Black Blade
(08/09/2002; 08:07:11 MDT - Msg ID: 82643)
Corporate greed has cost more than money
http://cbs.marketwatch.com/news/story.asp?guid=%7B677E958B%2D026F%2D4B9D%2DAA00%2DDA3CC01B0586%7D&siteid=mktw

Snippit:

German Chancellor Gerhardt Schr�der in a speech in Hannover this week put it very bluntly. "The time has come to reexamine whether the way America runs its economy should continue to serve as a model for the rest of the world." His answer to that question is quite clear. "The plundering of the "little people" in the United States by a manager class which is shamelessly enriching itself is not the German way."

Black Blade: Wall Street has been after Europe to use the same accounting standards as the US for years. I don't think that Wall Street has a leg to stand on now.

steady
(08/09/2002; 08:15:51 MDT - Msg ID: 82644)
didnt take long to see through the smoke and mirrosr.
hey brazil is so far in debt lets loan them more and get them deeper in debt, yea yea thats the ticket the peole will belive that more debt is good, heck it will even make the market go up and we can get more of there money into our hands.

unfortunatly sites like this EXPLAIN the game to those interested,and then those people can and do go spread the word, the charades do not last as long in the internet age. please please keep up the good work and lets continue tio use the medium of the net to put for object facts to let individuals make wise decisions on there own and not be caught up in the bankers farce of more debt is good debt.

SAO PAULO (Dow Jones)--Brazilian shares are lower early Friday, as political uncertainty is already creeping back into investors' minds just two days after the International Monetary Fund unveiled a $30 billion package.
By 1345 GMT, the main Sao Paulo index was 1.4% lower at 10168 on volume of 39 million reals ($1=BRR2.975).
Traders said selling in New York wasn't helping the mood, but they largely attributed the decline to an influential presidential election poll by the Ibope institute.
Despite efforts to bolster his image and increase attacks on his rivals, government-backed candidate Jose Serra is falling further in the polls. He is now tied for third place with former Rio de Janeiro governor Anthony Garotinho.
Serra fell to 11% from 14%. That's bad for investors who want Serra to win, as he's considered more market friendly in the polls.
Meanwhile, arch rival and second-place leftist Ciro Gomes continues to rise in the polls to 27% from 25%, making it harder for Serra to mount a comeback.
Investors were also worried about Gomes' comments late Thursday. He labeled the IMF's $30 billion aid package a disaster but admitted that the Brazilian real would have tanked without the accord.
One analyst said it makes it hard to see whether Gomes supports the accord, which is dependent on the backing of Brazil's two main opposition candidates for it to work, as it runs through 2003. The Workers' Party candidate has both supported and criticized the accord.
The poll and Gomes' comments also eroded Thursday's currency gains. The real is now at BRL2.975 after closing at BRL2.910 Thursday.
Among stocks, telecoms were at the sharp end of selling, with bellwether Telemar down 3% at BRL25.20, and long-distance carrier Embratel down 4% to BRL1.69.
Elsewhere, oil giant Petrobras was 0.9% lower at BRL43.71.
Brazil's second-largest retail bank Bradesco was 3.1% lower at BRL10.15.
All quotes refer to companies' preferred share prices.



Gandalf the White
(08/09/2002; 08:17:09 MDT - Msg ID: 82645)
Jump SPOT, JUMP !
<;-)
Black Blade
(08/09/2002; 08:19:11 MDT - Msg ID: 82646)
Sinking Stocks Leave Investors Paralyzed
http://www.ctnow.com/business/hc-kristof0808.artaug08.story?coll=hc%2Dheadlines%2Dbusiness

Snippit:

What to do now? As stocks continue to plummet, many individual investors say they're paralyzed, unwilling to stomach stepping out of the stock market for fear it will turn soon, but also unwilling to put new money to work.

"I can't buy because I feel that there is nothing I can trust at the moment," said Charlene Hyde, a Pacific Palisades, Calif., speech pathologist. "But I can't sell because I've been told over and over that when things go down is when it's time to buy. I just pray for better times and hope I can maintain my sanity."

"I am like a deer with headlights blaring in my face," Friedrich said. "There are so many negative things. But I have grown up with the idea of never selling. I don't know what to do."

"Every day I hope that the market has hit bottom, and it seems to keep going down," said Marilyn Barrett, a Los Angeles tax attorney. "We are all just paralyzed, not knowing what to do and just hoping that things will get better on Monday."


Black Blade: The fear factor � people are afraid as they watch their hopes and dreams vaporize. The lack of preparation with adequate diversification for hot and cold markets, banking and currency crises, etc. will devastate many. Some financial managers are slowly beginning to recommend a small position in Gold as portfolio insurance. Just a few months ago they would not even touch Gold. Times are changing.

sector
(08/09/2002; 08:19:39 MDT - Msg ID: 82647)
Banks [Citi Bnak, JPM] face US$6b claims
Uhmmm....what about NEXT year's Litigation Costs.August 9, 2002
World Watch

(NEW YORK) Citigroup Inc, JP Morgan Chase & Co and Merrill Lynch & Co may pay as much as US$6 billion this year to settle claims that they helped Enron Corp hide debt and wrote misleading stock research, Morgan Stanley analyst Henry McVey said in a report on Wednesday. Enron investors and employees have filed US$36 billion in legal claims against Citigroup and JP Morgan. - Bloomberg
+++++++++++++++++++
Can you say "It's the JURY stupid?" What jury will pass up a chance to "Send a message" to the "Regulators" in Washington that crime should pay. The $36 Billion in claims is just an opener.
Black Blade
(08/09/2002; 08:27:56 MDT - Msg ID: 82648)
"Greenspan Is Highly Overrated"
http://businessweek.com/bwdaily/dnflash/aug2002/nf2002089_8289.htm

BusinessWeek economist Bill Wolman says the Fed chairman was right to warn of "irrational exuberance" -- and dead wrong to ignore it

Snippit:

If the U.S. were a weak South American country, the International Monetary Fund "would be here beating us over the head and recommending that nobody lend us any money until we cut our government deficit." And Federal Reserve Chairman Alan Greenspan is "highly overrated."

Those are two of the more provocative statements from William Wolman, longtime economist for BusinessWeek. Wolman worries about the impact of both the federal budget and trade deficits on the economy and the markets -- especially in view of the out-year tax cuts in the Bush tax bill. And he thinks that Greenspan is at fault for not doing something to control the market bubble after his warning of "irrational exuberance" in 1998.

I think Greenspan is highly overrated. The dumbest thing he ever did -- and there's lots of competition -- was not to follow up on the "irrational exuberance" warning that he stole from Shiller in 1998, when the Dow was at 6400.


Black Blade: Just a few interesting comments by Bill Wolman. I don't agree with much of his take on economic matters, however, I agree that Greenspan is "highly overrated".

sector
(08/09/2002; 08:42:38 MDT - Msg ID: 82649)
@misetich "We are on the edge of an abyss, and one step more and we're going to commit fiscal suicide," said Sen. George V. Voinovich (R-Ohio)
The Good Senator Voinovich Doesn't Appreciate that Mr. Rubin, Summers, Clinton and Messers. Bush et, al...
..."committed suicide" for them when they foolishly agreed to open Pandora's [Gibson's] Box by manipulating the gold price for fun and profit. After the golden eggs from the "New Economy" golden goose is now coming the plague of a deflating set of bubbles. All of the current and future pain will be born for the most part by people who didn't save the golden eggs when they had a chance.

But the biggest losers are the taxpayers since budget deficits are skyrocketing because the steroids of capital gains tax revenues allowed government to expand to gargantuan sizes. Now the screams of government clerks fill the airways.

California has decided to borrow it's way [Via bond issuance] to fiscal stability...sound familiar?

Voinovish speaks of an abyss...funny...that is the same word used by Sir Eddie George of the Bank of England as he watched the price of gold soar to $338 in September 1999. "We were staring into the abyss..."

True gold bugs are set for the abyss...


steady
(08/09/2002; 08:50:54 MDT - Msg ID: 82651)
propaganda/ real deal?
Morgan Stanley Says Fed To Ease 50 BPS At Tuesday FOMC
NEW YORK (Dow Jones)--The Federal Reserve will cut interest rates by half a percentage point at the conclusion of next Tuesday's policy meeting, Morgan Stanley economists Richard Berner and David Greenlaw said Friday in a research note.
Morgan Stanley's prediction joins that of a small but growing pool of investment banks that see some course of central bank rate cutting heading into the remainder of the year. Morgan, much like the other banks, cited signs of faltering economic activity in making the call that the Fed's overnight target interest rate will be lowered to 1.25% next week.
"Either evidence of a faltering economy or capital market dislocations that could jeopardize economic activity would be sufficient grounds for ease. Both have emerged as clear threats in recent weeks," the research note said. On balance, the Fed will be seeking to ensure that the economy will not fall into a so-called double dip recession, the economists wrote.

with so much info out there nobel knights and fair maidens i try not to become a mouth piece for the enemy backed into the corner of the castle, i try to filter what messages the other hobbits bring me. As u sit at the round table trying to piece this matrixical maze together i hope i can help u locate a piece here and a piece there.

Black Blade
(08/09/2002; 09:02:21 MDT - Msg ID: 82652)
Central Bank to Offer $13,000 Gold Coins
http://www.themoscowtimes.com/stories/2002/08/09/044.html

Snippit:

Reuters New Russians, extravagant businessmen famed for their love of gold and deep pockets, might now have to start thinking about getting wide ones too. The Central Bank will next week put into circulation gold coins aimed at the larger wallet -- each one about the size of a compact disc and weighing one kilogram. "The coins are legal tender in the Russian Federation and at face value must be accepted for settlements without restrictions," the Central Bank said in a statement on Thursday. The giant coins are still unlikely to enter the Guinness Book of Records. To celebrate the new millennium, the People's Bank of China in 2000 issued gold coins weighing 10 kilograms each.


Black Blade: The Russian Central Bank reduced to selling 1 kilo barbarous relics. Hmmm� Interesting though. I could use a few of those.

steady
(08/09/2002; 09:19:11 MDT - Msg ID: 82653)
variety pack hahaha!
can centenial get some of those coins?

battle lines being drawn!

Russia Defense Min Calls Georgia "Nest Of Intl Terroris
MOSCOW (AP)--Russia's defense minister said Friday that Georgia has evolved into the world's second major "nest of international terrorism" after Afghanistan.
"The international community has just crushed the nest of international terrorism in Afghanistan," Defense Minister Sergei Ivanov said while attending a Russian military exercise on the Caspian Sea, Interfax reported. "We must not forget about Georgia nearby, where a similar nest has recently begun to emerge."
Russia has long accused Georgia of harboring Chechen rebels who are holed up in its lawless Pankisi Gorge near the border with Chechnya, and demanded that the Georgian authorities let in Russian troops to flush them out.
The tensions have intensified in recent weeks after Russia accused Georgia of letting a group of 60 rebels cross into Chechnya July 27.
Georgian officials have dismissed the accusations and said that Russia itself has equal responsibility for guarding the mountainous frontier. They have detained 14 alleged rebels who crossed back into Georgia Saturday and Monday, but rejected Moscow's demand to extradite them quickly, saying they wanted proof of criminal activities before considering extradition.
A group of Russian prosecutors arrived in Tbilisi Friday to press again for the rebels' extradition.
While turning down Russia's demand to allow its troops to launch raids in the Pankisi Gorge, Georgia has invited U.S. military instructors to train its troops for missions against armed groups in Pankisi, whom the U.S. says may have links to the al-Qaida network.
Adding to tension in Russian-Georgian relations, a Russian army colonel was found dead on the outskirts of Tbilisi earlier this week. Russia said the murder occurred because of an anti-Russian campaign waged by the Georgian authorities. Georgian Foreign Ministry spokesman Kakha Sikharulidze on Friday dismissed the Russian claim as "irresponsible and unfounded."

um doesnt gold do well in times of war? its (war) on every continent, save antartica eventually it will get there just wait a yr or so.
Sri Lanka Pres Says Rebels Setting Up Own Administration

08/09/2002
Dow Jones News Services
(Copyright � 2002 Dow Jones & Company, Inc.)


COLOMBO, Sri Lanka (AP)--Behind the backs of Sri Lanka's government, Tamil Tiger guerrillas are using an ongoing cease-fire to set up their own courts, banks and prisons, smuggling arms and forcibly recruiting children, the nation's president said Friday.
Chandrika Kumaratunga said this threatened the sovereignty of Sri Lanka, and vowed to use her executive powers to abrogate any peace accord that divided her island nation on ethnic lines. However, she rejected fears that she was planning to dissolve the Parliament and order new elections.
"I affirm to the people of this country that I will not hesitate for a moment to exercise the executive powers vested in me to prevent the dismemberment of this country and to avert any serious dangers that the country may be called upon to face," Kumaratunga said in an address to the nation.
Kumaratunga, who is the head of the state, is currently engaged in a face-off with Prime Minister Ranil Wickremesinghe. She was elected separately and can remain in office until 2005.
Wickremesinghe, whose United National Front won the Dec. 5 parliamentary elections defeating her Peoples' Alliance, has signed a cease-fire agreement with the Liberation Tigers of Tamileelam. Peace talks are likely in September.
"I have reliable reports that while the cease-fire agreement is in force, the LTTE is engaged in establishing its own law courts and legal systems, police stations, prisons, banks and various other institutions in the north and east," Kumaratunga said.
"They are also involved in arms smuggling and the conscription of children. I have drawn the attention of the prime minister, defense minister and the Security Council and given advice with regard to these incidents," she said.
Under the Feb. 22 cease-fire mediated by Norwegian negotiators, the government has lowered its guard in the north and east, where most of Sri Lanka's 3.2 million Tamils live. There have been instances when rebels have tried to smuggle in arms, authorities say.
Kumaratunga said she would endorse the peace process only if it guaranteed the unity of Sri Lanka, a small island of 18.6 million people off India's southern coast.
"The peace we all strive for, should be attained within a framework that would ensure equal rights and protect democratic freedoms for all communities living in this country," Kumaratunga said.
The rebels have agreed to the cease-fire and direct peace talks. But they have not given up their main demand that the Tamils should have a separate state away from the domination of the 14 million Sinhalese.
In her speech, Kumaratunga also attempted to ease political tensions between her and the prime minister by pledging to work with the government and dismissing fears that she could dissolve the Parliament and order new elections.
"I am not prepared to aggravate the state of political confusion prevailing today by holding another election ... I have no intention to dissolve Parliament at this point of time," Kumaratunga said in her recorded address.
Kumaratunga has wide executive powers that allow her to disband the legislative body after completing one year in office. Her rivals fear she might exercise that power pleading that there was a threat to the unity of the country.


the world is desperatly trying to stop the tetering dominoes in s.america, rember a few days ago argentina got a big euro loan from the ecb.
i think there slogan is whatever it takes..... in more debt to stop there debt default hahahthey b so screwed....
World Bk OKs $303M Loans For Uruguay To Back IMF, US Aid
WASHINGTON (Dow Jones)--The World Bank approved Thursday $303 million in loans to supplement emergency lending from the International Monetary Fund and the U.S.
The World Bank loans of $151.5 million each build on new lending or credit this week from the IMF and U.S. of nearly $2 billion to counter the effects on Uruguay of the economic crisis in its much-larger neighbor, Argentina.
Two-thirds of the new World Bank loans were available immediately. The loans have a 15-year maturity and three-to-five-year grace period.





steady
(08/09/2002; 09:37:17 MDT - Msg ID: 82654)
staying on the s.american domino trail
question! what benefit does this do for belize and why are they doing it? anyone offer an explanation!

Belize Details $125M Debt Offering With US SEC
WASHINGTON (Dow Jones)--The government of Belize has filed to offer $125 million of debt securities, according to a registration statement released by the Securities and Exchange Commission Friday.
This will be the country's first international bond offering, and is being underwritten by Bear Stearns Cos. (BSC). Bear Stearns on Wednesday announced Belize's intention to make the debt offering.
The debt securities will consist of notes due 2012 and are unsecured and general obligations of Belize.
Net proceeds will be used for the repayment of existing external government debt. The country said in the filing it expects to repay about $117 million of outstanding debt - consisting of 31 loans, with an average outstanding balance of about $3.8 million each and maturity dates ranging from 2002 to 2012 - from banks, multilateral organizations and vendors.
Belize indicated that it will save between $45 million to $55 million from both interest savings and extending principal payments on short-term debt as a result of the sale of the notes and repayment of existing debt.



Siochaina
(08/09/2002; 09:50:20 MDT - Msg ID: 82655)
LeMet Bulletin
The Morgans, both Chase and Stanley, were aggressive
buyers in the gold pits early in the Comex session.
This is further confirmation of my suspicions about the
cabal, covered in the last two Midas commentaries.

In addition, the specs that went short on the move down
from $327 were stunned by the dramatic move up on
Wednesday and are now trying to figure out an exit plan
from those short positions, according to the Comex floor.


Zhisheng
(08/09/2002; 10:10:01 MDT - Msg ID: 82656)
30 Billion Brazil Loan
Jim Sinclair has just posted a message in LeMetropole Cafe that the IMF loan to Brazil is just for reserves, and cannot be used.
Pizz
(08/09/2002; 10:21:43 MDT - Msg ID: 82657)
Steady
Countries do tend to act a bit like people, since they are run by the same.

If you can refi @ lower rates, extend the terms, and lower you monthly cash outlays, your ahead of the game.

Is it better to refinance now, with low rates, or have to do it right in the middle of what appears to be the mother of all depressions?

It's a smart move on their part, and it is also another indicator that smart people are very optimistic about the next 10 years.

Pizz
steady
(08/09/2002; 10:27:59 MDT - Msg ID: 82658)
can they do this? naw...... well maybe......... hmmm
http://www.rense.com/general28/techspy.htmFeds Open 'Total' Tech
Spy System On US Citizens
Excerpts:
1) "Under the Combating Terrorism Act, prosecutors could authorize surveillance for 48-hour periods *without a judge's approval.*
Warrantless surveillance appears to be limited to:

a) the addresses of websites your visited,

b) the names and addresses of your e-mail correspondents, and so on

The legislation would cover URLs, which include information such as:

c) what Web pages you're visiting and

d) what terms you type in when visiting search engines."

(source article http://www.wired.com/news/conflict/0,2100,54342,00.html )

2) "Senate OK's FBI Net Spying" 'FBI agents soon may be able to spy on Internet users legally without a court order.'

(source article http://www.wired.com/news/politics/0,1283,46852,00.html )

3) Constitution of the United States of America - Supreme Law of the Land:

Article [IV.] "The right of the people to be secure in their persons,

houses, papers, and effects, **against unreasonable searches and seizures,

shall not be violated** and no Warrants shall issue, but upon probable cause,

supported by Oath or affirmation, and particularly describing the place to

be searched, and the persons or things to be seized."

Conclusion:
1) The present government (Congress, Judiciary, President) is out-of-control....totally. They are violating Law; are ignoring the Law; are violating their Oath of Office, they are committing treason against the American People - The Sovereigns.
2) The intended 'check's and balances' on our system of government are NOT working.
- the three branches of government (blackmailed / bribed)
- the media (corporate owned - disinformation, misinformation, non-information)
- fully informed jury (destroyed; obscured)
- principles and maxims of Common Law ("Show me the damaged party...")
- state (sovereign) Citizenship (destroyed; obscured)
- Right to Privacy (Article 4) - ignored and 'technologically' destroyed; systemic malfeasance
'Malfeasance': 1) Illegal or unethical conduct; wrongdoing beyond simple negligence, especially on the part of governmental officials. 2) Failure to perform, or complete neglect of, a required legal or contractual duty. 3) Negligence, incompetence, or the improper performance of a legal act.
3) There appears to have been a "silent-coup" - from the deliberate set-up, enticement, entrapment and subsequent blackmailing of key US government officials.
(see: Senator John DeCamp's "The Franklin Cover-up" and "Transformation of America")
Franklin Cover-up "...a minefield of information that cannot and must not be ignored."
http://www.geminiwalker-ink.net/HellFranklin.html
also Google search on: "Trance-Formation of America"
4) Our Constitution - the system of checks and balances are being ignored...not only by all branches of the government (individuals who swore an Oath of Office to defend and uphold the Constitution and Rights Of The People) and they have individually and collectively violated that sacred oath. i.e. 'treason'

freedom an illusion just like the new economy............
5) More importantly - the American Public themselves have been traumatized, numbed-out, or dumbed down - (TV/flouride/chemtrails/?) into a state of sheer apathy, powerlessness and/or forgetfullness.
Very dangerous.
How ironic: visit http://www.house.gov/Declaration.html
(Declaration of Independence) at the House of Representatives website - and 'see for yourself.'
How many American Citizen's see...much less care....about what's happening before our eyes? Or what this is leading to for our Children and future generations.



Siochaina
(08/09/2002; 10:29:34 MDT - Msg ID: 82659)
Zhisheng
That news is interesting "Brazil cannot use the funds for any purpose other than as non-fungible deposit to simply count as a reserve. These funds are not exchangeable for anything."

So just hocus pocus to shore up JPM & C and make Brazil appear stronger and market go up ....things are getting more transparent and shakey every day...Have gold!!!_
Pizz
(08/09/2002; 10:30:12 MDT - Msg ID: 82660)
Correction to last post
Last sentence shoul read 'people are NOT very optimistic. . . ."

Must be wishful thinking. . . . .

Pizz
Siochaina
(08/09/2002; 10:39:14 MDT - Msg ID: 82661)
XAU
XAU has taken out a key resistance...should get interesting!!!
Waverider
(08/09/2002; 10:46:29 MDT - Msg ID: 82662)
Australia venture wins $14bn China gas deal
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185611806&p=1012571727313Belgian - this one's for you...

Snippit:
"China granted an Australian consortium a contract of up to $14bn on Thursday to supply the first liquefied natural gas to the country, a move that underscores its growing diversification of energy sources. LNG is super-cooled gas that can be transported in ships. China, which has long relied on coal for up to 85 per cent of its power needs, is keen to increase LNG imports - in part because of its strategy to reduce greenhouse gas emissions."
Waverider
(08/09/2002; 10:48:05 MDT - Msg ID: 82663)
Slingshot, Gandalf
It's fun - yes? One thing's for sure, life is NEVER boring! Have a great day!
Waverider
Pizz
(08/09/2002; 10:50:34 MDT - Msg ID: 82664)
Siochaina-Brazil
There go the reserve requirements.

Resrictions on capital outflows should happen in about a week or so (probably won't make the news, but anyone other than the big boys will probably run into more red tape than trying to get an insurance claim paid).. My gut tells me this "loan" is not going to buy the time required for "whatever" they are stalling for, whether it's something big, or whether it's just to get thru the next week or so, and probably the latter.

Right now I can think of two terms from the sixty's that fit very well. . . .

A note on inflation. Yesterday I was crusing thru DVD's at a local outlet and ran across a dolby remastered Elvis concert from 1973 from Honolulu. It was done for charity, and he commented that their goal was to raise 25,000, but he was very happy that they raised 75,000. Big money then,
chump change now.

Pizz
steady
(08/09/2002; 10:54:05 MDT - Msg ID: 82665)
another question. are there any free markets anymore?
thanks for answering the last question
everywhere u look govt intervention, japan does it, usa , does it, now brazil, hmmmm im confused and need to go think. at one point in my life i seriously thought there where free markets tough to deal with when i realize they have lied, there are no free markets.....
unless relevant info is out here how can those who know gold is money demonstrate that fact to others. come on its so sad they have to intervien daily to prop up there ponzi scheme pretty soon everyone will know, and then the rush to real money will begin in ernest.


Brazil Ctrl Bk Sells $50M Repo Due Oct 2 At BRL3.025/Dlr
08/09/2002
SAO PAULO (Dow Jones)--Brazil's central bank sold $50 million in repurchase agreements Friday as it works to provide liquidity to the foreign exchange market and stabilize its currency, the real.
Banks that bought the contracts have the right to sell dollars back to the monetary authority Oct. 2 at a rate of BRL3.025 a dollar.
Thursday, Central Bank Governor Arminio Fraga said that as part of the country's new $30 billion support package from the International Monetary Fund, he would stop holding daily interventions on the spot market of $50 million.
Instead, he said he would make unscheduled interventions, possibly in large volumes, depending on liquidity in the market.
After the sale, the real was trading at BRL2.975, down from its weakest point Thursday of BRL3.000 but weaker than BRL2.910 at Thursday's close.




Mexican
(08/09/2002; 11:01:52 MDT - Msg ID: 82666)
Beware
There surely are thousands of nervous CEO's and pension fund managers hoping and praying for a swift rebound in the stock market. Since the majority of pension fund assets are currently in equities, stock market action is the single most important indicator of pension fund performance.

With large losses now in place for the third year in a row, pension fund values are in a severe long-term decline. Yet, because of one of those now infamous accounting quirks, corporations don't have to report those losses. The only thing that the government requires is an assumption of what the plan will return annually. For most corporations, the pension fund administrators assume they'll earn around 10% annually.

Here is what has taken place. For the past two years and now going on the third year, corporations have been reporting those 10% assumed gains, while, in fact, their pension funds have been losing 10% to 20% annually. That's quite a difference between the reported activity and what's really happening. Sooner or later, this disconnect between reported earnings and actual earnings will have to be reflected in stock prices. When that happens, the expanding level of corporate distrust will intensify. On top of that, corporations will actually have to come up with the cash to replenish their under-funded pension plans � thus intensifying cash flow problems.

Other than crushing debt burdens, for most major US corporations under-funded pension plans will cause more financial pain than any other liability.

MX
Pizz
(08/09/2002; 11:05:49 MDT - Msg ID: 82667)
Steady
No, but then again it might depend on who's defining "free".

Rush to gold? It WILL happen, but unfortunately the supply of the real stuff will be nonexistant for the average person, and the price will be just a tad higher than most can afford, say $4,685 an ounce more than they'll want to pay (IMVHO).

Not a bad time to add to your stash, I am.

Pizz
Siochaina
(08/09/2002; 11:13:08 MDT - Msg ID: 82668)
Pizz
I sure hope your gut is right ....they still have some more chewing gum and string to hold things together ...though I agree that any real news will be kept out of US media

Yes...this is fine time to add to physical ....though I've decided to add some more silver now along with a little bit of gold ....by the way what about platinum...I've don't hold any and wonder if it is good investment versus gold/silver

Physical PM sure is comforting in these times!
Pizz
(08/09/2002; 11:14:36 MDT - Msg ID: 82669)
Siochaina
What's your read on what looks like a pending breakout on both the XAU and HUI?

My gut say's it's a short term bear trap. I don't like the small spike up in gold lease rates today, along with the very light volume in the PM stocks.

Pizz
Pizz
(08/09/2002; 11:20:03 MDT - Msg ID: 82670)
Siochaina
Re: Platinum?

I'm not real high on thinly traded markets that have the automotive industry as major users.

Horses don't require catalitic convertors or platinum tipped spark plugs.

Want to talk about oats????

Pizz
The CoinGuy
(08/09/2002; 11:25:03 MDT - Msg ID: 82671)
Pizz, All
I have to agree, the premium paid over paper will crop up rather quickly, better to purchase in advance, than be left behind. I'm currently in the process of making my largest purchase to date.

As a side note, the deflationists are looking for these rate cuts, MWD and Sachs seem to be pushing for the Fed to act sooner, rather than later(looking desperate in the process?). Even M1 is steadily expanding. This smells like a head fake here, and I'm taking the other side of the trade. Thats where I believe they are. The (Corporate)Bond market looks downright ugly.

My guess is, no rate cut, higher overnight lending rate by the end of the year. If we do go lower, repatriation from foreigners,(war)expanding deficits, and currency printing will crush the dollar sooner, rather than later.

At any rate, this cocktail is a lethal mix

The(physical)CoinGuy
Siochaina
(08/09/2002; 11:27:13 MDT - Msg ID: 82672)
Pizz
A friend has been investing in platinum coins and saying he sees it as good play plus confiscation protection...I listen but have not felt comfortable so am trying to do some research

As to Oats...may be good investment ...as commodity as well as to eat both for family and the horse ...though I guess I need a horse too
Socrates964
(08/09/2002; 11:32:41 MDT - Msg ID: 82673)
(No Subject)
Hmmm! I never expected the Brazilians to get a free lunch, but if this is true, then even JPM/C are still going hungry.

$30 Billion dollar IMF loan to Brazil
is
Total "Spin City Smoke & Mirrors".
Major Operation was in place to Squeeze Equity Shorts
and to
Rally Securities market
in order to
SAVE major derivative dealers facing potential credit worthiness
DOWNGRADES.

by James Sinclair


When the IMF so distorts the truth as to actually LIE about a $30,000,000,000 international loan, how can you publicly condemn corporate crooked bookkeeping and not the IMF as well? The IMF did not lend to Brazil $30 billion US Dollars as advertised to markets. The funds that are to be forwarded to Brazil, in 2002 & 2003 are referred to as "Museum Funds" in the international lending circles. These funds gain this title because under the terms of the loan Brazil cannot use the funds for any purpose other than as non-fungible deposit to simply count as a reserve. These funds are not exchangeable for anything. That means that Brazil cannot touch the $6 billion they will receive in 2002, or the $24 billion they will receive in 2003. This is what might be called in a police sting operation "Show Money". Yet the media headlines and the announcement by the IMF would have the equities, dollar and gold market believe that they had just laid on Brazil $30 Billions dollars which could be applied in anyway Brazil wants, most especially the demands of their short term debt so threatening to all of South America's half dead economies and half dead US money center banks appearing to be alive. A collapse of South America would severely injure major US money center banks like JPM already being rocked by other non functioning loans and quietly by totally insane, immense, irrational derivative positions.

As the equity market wilted the Federal Reserve pumped out liquidity in terms of monetary aggregates at record rates. This grease on the wheels of the market was falling flat on its face. The powers that be, seeing this, knowing a derivative disaster is nearing and seeing the dollar at a threatening level to US treasuries moved to squeeze the shorts.

The combination of the use of options and futures on equity indices and certain over shorted Dow Jones component stocks, and the reported trump card Spin City Brazil Loan, these "powers" accomplished a stampede of the short sellers thereby creating a 675-point rally. Will the general equities market see through this charade? Maybe, but I can assure you that it is my opinion that gold already has. The dollar will soon and thereafter the equities, except those that are totally bombed out and oversold (like some techs), will too.
Pizz
(08/09/2002; 11:53:54 MDT - Msg ID: 82674)
Socrates964
Free Lunch?

Let's say you own a bank and have 10% good (unrestricted reserves) that you hold. Now you can replace these good reserves with the IMF restricted (that means it can't be liquidated) reserves.

Now, what do you think is going to happen to the good reserves (cash & cash equivalents?). It's nothing more than a high tech, white collar bank heist at about .10 on the dollar.

Butch Cassidy and Sundance ride again, no that was Boliva wasn't it?

Pizz
Gandalf the White
(08/09/2002; 11:56:49 MDT - Msg ID: 82675)
Lady Siochaina's Research <;-)
Siochaina (8/9/02; 11:27:13MT - usagold.com msg#: 82672)
--A friend has been investing in platinum coins and saying he sees it as good play plus confiscation protection...I listen but have not felt comfortable so am trying to do some research--
===
Think about the answers to these questions: 1) How many Central Banks stock Platinum instead of GOLD? 2) How "liquid" is Pt compared to Au ? 3) Do you think that Mr. Joe Sixpack can tell the difference between a Silver and Platinum coin ? (even if it is writen on the coin!) 4) Are the U.S. Platinum bullion coins LEGAL Tender ? 5) Do you think that ANOTHER and/or FOA are interested in Pt ?
<;-)
Socrates964
(08/09/2002; 12:03:16 MDT - Msg ID: 82676)
Pizz
Ah! Not an expert on IMF loans - but if I've understood you correctly, these funds will be available to JPM/C, right?
Shapur
(08/09/2002; 12:39:52 MDT - Msg ID: 82677)
Life Insurance
Life Insurance denominated in dollars!


Just think about that for awhile--any light bulbs starting to glow. Does anyone know of a way to get life insurance denominated in gold or at least euro?

tia
Pizz
(08/09/2002; 13:02:57 MDT - Msg ID: 82678)
Socrates964
I'm not an expert on IMF loans either, but here is how I'm reading it.

Assume you were an investment advisor( Brazilian bank) and had 100,000 dollars of investor's cash (reserves), but you wanted to use the cash to pay off your bookie (money center bank) for for personal losses incurred (their loans to you). Now your bookie cuts a deal with the mob (IMF) and gets you a mob check for 100,000, but it's restricted - you can't cash it. If your investors audit you, you have what appears to be a good liquid asset (the check), but in reality their cash is gone and replaced by a worthless piece of paper.

Restricted reserves are not reserves. It's a blatant smoke screen to free up cash, and without restrictions on capital outflows, the big boys are going to suck every dollar of the depositors money out of the country, while the depositors breath a sigh of relief because the country just got 30B in more loans.

If I had money in a Brazilian Bank, I'd have been one of the first in line for withdrawals this morning.

Pizz
steady
(08/09/2002; 13:10:03 MDT - Msg ID: 82679)
The first of many !
Mass State Employees Pension Fund Managers Fired
BOSTON (AP)--The Massachusetts public employees' pension fund has fired three money managers as state Treasurer Shannon O'Brien's office reported the fund lost more than $1 billion in the first six months of 2002.
The 3.75% half-year drop is part of a 6.5% fall in value since July 1, 2001. In all, the fund has lost $4 billion since it peaked at over $31 billion during the high-tech bubble of the late 1990s.
However, the fund performed better than the leading stock market indices. In the 12 months ending July 1, the Dow Jones Industrial Average fell 13% and the Nasdaq Composite Index fell 35%.
"It's very important to remember that this is not a short-term fund," said spokesman Jon Tapper. "Over the long term, the record of the fund has been strong."
Still, the Pension Reserves Investment Management (PRIM) board, which is chaired by O'Brien, fired three firms Thursday that manage some of its investments: Schroder Capital Management, MFS, and Turner Investment Partners.
The PRIM invests the pension funds of state employees and teachers.
The pension fund has drawn attention in recent months as it lost nearly $50 million in shares of Enron (ENRNQ) and WorldCom (X.WCM), two of the corporate giants embroiled in accounting scandals.
O'Brien and Attorney General Tom Reilly have disagreed over how aggressively Massachusetts should pursue a lawsuit against Enron to recoup some of the losses, but the two have agreed on a plan to pursue the next case, said Ann Donlan, a Reilly spokeswoman.

hey i love the last sentence spoken like true sheep well we will get the next one who wrongs us. hahahah dummys get the first one and there wont be a second one, or maybe they know where going after enron will endup exposing rubin and the gold cap.
Socrates964
(08/09/2002; 13:10:16 MDT - Msg ID: 82680)
Pizz
Got you! Great comment!

On Brazil, looks like honeymoon is over - Real went to R$3.60 last month, got back to R$2.85 when package was announced, and now R$3.03 - I think that things will hold until 1st round of presidential elections (Oct 3), but if Serra (government candidate) is knocked out, leaving a run off between Ciro and Lula, there is a month of uncertainty until the 2nd round, probably coinciding with huge turbulence on Wall Street. If I had to put a date on a banking crisis down here, I think it has a good chance of happening during this month.
Aristotle
(08/09/2002; 13:13:00 MDT - Msg ID: 82681)
Bill Wolman needs to get his facts straight
Black Blade, I read the article you linked to at #82648. I think Bill is just climbing on a soapbox to throw stones, twisting the facts to suit his aim. Therefore, I would tend to take much of what he says with a wary eye, and you are right to do so.

To wit, he said, "I think Greenspan is highly overrated. The dumbest thing he ever did ... was not to follow up on the "irrational exuberance" warning that he stole from Shiller in 1998, when the Dow was at 6400."

Earlier he had explained, "Professor Robert Shiller of Yale, author of Irrational Exuberance and the guy who's really gotten the market right, thinks that 6000 is where the market is going."

One thing is for certain -- in 1998, the DOW was already well over 7000, and Greenspan's warning was by then a distant memory over a year old.

It was not 1998, but rather December 5th, 1996 (in a Washington speech for the American Enterprise Institute for Public Policy Research) that our illustrious Fed Chairman uttered the immortal words, "how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

It was an all-around fine speech on a topic of utmost significance to every thinking person gathered at this forum: "The Challenge of Central Banking in a Democratic Society. " I don't think it's beyond the reach of the bright minds of anyone here to read it and absorb the relevance.

Anyway, Shiller published his book in 2000 to address the issues of this maket investment phenomenon as suggested by Greenspan's remarks. Bill Wolman is certainly guilty of making light of arguably the most capable central banking head the US has ever had.

I think most people have no idea how much worse things could truly be right now under the direction of someone with less competence and less grasp for the nuances of the task at hand. To say nothing more of the cumulonimbus of asset monetization the Fed can bring to task as lender of last resort, under more normal circumstances, the Fed has little more than a feather with which to coax a charging rhino into other paths less harmful to all parties involved, including the rhino (market) itself.

Gold is the high ground. Get you some -- because feathers fail as arguments for rhinos, and then the monetization flood will surely come. --- Aristotle, Master of the Mixed-Metaphor
Gandalf the White
(08/09/2002; 13:19:59 MDT - Msg ID: 82682)
LOVE IT ! <;-)
Pizz (8/9/02; 13:02:57MT - usagold.com msg#: 82678)
I'm not an expert on IMF loans either, but here is how I'm reading it.
===
THANKS Sir Pizz ! It is so nice to have things explained in terms that I and the Hobbits can relate to ! (<== notice the dangling participle !)
ALSO, as I was educated LONG AGO as an Engineer, some things like trying to understand high finance, or compose NON-Techincal "Seige Engine" stories are very taxing on the remaining limited brainpower!
NOW, if I was young and could compose like either Sir Slingshot and Lady Waverider, pehaps I would head for HOLLYWOOD and ---
<;-)
Pizz
(08/09/2002; 13:47:25 MDT - Msg ID: 82683)
Gandalf
Thanks, I'll try to post more in laymans terms from now on. Besides, it'll be more fun, and believe me, right now I need all the distractions from real life that I can get.

But I also promise I'll keep it at least a couple levels higher (and cleaner) than I use with car dealers and used car sales managers - we might have a few chimps lurking and I'd hate to insult their intellegence.

Dangling what????

HUI just broke 120, but is having trouble holding. Volume just isn't there.

Pizz
Mr Gresham
(08/09/2002; 13:52:26 MDT - Msg ID: 82684)
Ari, Gandalf, Socrates
Socrates: It's great to have someone from Brazil here, and as astute as you, here at this time! I have some catching up to do in reading your posts, but I've savored a few glances into them. Wouldn't it also be great to have someone from Argentina here? Can you suggest a way we might make such an introduction, or a board where there are some English-writing posters from South America giving their views?

Gandalf: I'm sure you'd be first in line as a script consultant when Hollywood gets on to this story. Why, even Austin Powers (Mike Myers) seems to have taken a recent interest in Gold. Let's see if we can "get a meeting."

Aristotle: Good words about Greenspan -- our tendency to personalize everything in the visage of one token individual, who is usually dealing with (and the product of) institutional forces way beyond his control. (Greenspan, more than any, shows the possibility of standing outside of his formative institutional training. For some reason, I still have a hopeful thought for Volcker, as well.)

"Nuance" is the word, and his writings and speeches show his grasp of Economics, classical and modern. To put a moral cast on him for not "saving" a system that is flawed at its root is foolish. Now -- what we don't know is whether he intends to step in at some crisis low with a proposal based upon much of what we here believe we have come to understand about Monetary systems. If he does, he may be, as you suggest, the right man in the right place at the right time. You know us, however -- we here are the impatient ones.
USAGOLD
(08/09/2002; 13:52:56 MDT - Msg ID: 82685)
Pizz. . .Brazil's Savers. . .
If you weren't among the first in line to withdraw your money from the bank, you learned nothing from the shellacking the banking industry and politicians handed your brethren to the south. It would be a major error in judgement to believe that things might go differently in Brazil. Nothing in recent history could justify such a sentiment. I would say that the same level of concern should prevail among Brazil's North American neighbors -- particularly Americans.


Ari: Though I agree with you on Wolman's assessment of Greenspan, I agree with him on how the IMF would view the U.S. government's books if it were any country but the United States.
misetich
(08/09/2002; 14:00:29 MDT - Msg ID: 82686)
Clean-book pledge may be difficult for some energy traders-Expect a flood of filings in the coming days -- just 11 percent of companies have certified so far, ratings agency Fitch said on Friday morning
http://www.forbes.com/newswire/2002/08/09/rtr691864.htmlSnip:

NEW YORK, (Reuters) - It was one last piece of bad news Alan Wright wanted to share with investors before he left embattled power company CMS Energy Corp.

After more than a decade as chief financial officer, he couldn't vouch for the accuracy of the company's financial statements.

"Under these circumstances, we feel it imprudent to certify (the books) at this time," Wright told investors last Wednesday. Wright, who will leave CMS later this month for a job outside the energy business, then thanked his listeners for their years of support
...........
But don't expect the deadline to be met by every company in the energy sector -- scene of the Enron Corp. debacle and home to some the most notorious cases of misleading financial statements.

CMS Energy doesn't plan to sign off until it can restate two years of results to account for more than $4 billion worth of sham trades. The power company is among the hundreds of corporations that have not yet attested to the accuracy of their books ahead of an Aug. 14 deadline set by regulators.

Two other prominent trading firms, Dynegy Inc. and Mirant Corp., also have expressed doubts they can certify their books on time. AS a result, there could be still more of an erosion of investor confidence in the battered power trading industry.

"Any company that didn't work overtime to meet that deadline is a fool," said Duane Grubert, a financial analyst at Bernstein who covers utilities.
............
Energy companies that can't resolve their problems before next week stand to lose whatever credibility they have in an industry already under a microscope.
***********
Misetich

Only 11% have "certified" - 3 working days left!

Got gold?
Black Blade
(08/09/2002; 14:02:50 MDT - Msg ID: 82687)
Re: Aristotle

I agree. I very rarely agree with Bill Wolman. He is a rabid Keynesian who is opposed to gold as an asset class. I have seen him get overly excited and actually spit while deriding gold. However, I do think that Alan Greenspan is "highly overrated". It is also quite a reversal for Wolman as he used to sing praises about Greenspan's performance. If you ever seen this guy in some round table discussions with other economists he is quite amusing as he get quite animated and can barely sit still. I guess it could be argued that Bill Wolman is also "highly overrated". Cheers!

- Black Blade
misetich
(08/09/2002; 14:09:44 MDT - Msg ID: 82688)
How the Fed burst the bubble
http://www.nationalpost.com/financialpost/story.html?id=FE268218-1290-4C7A-808C-9E4793E42FE3Snip:

The reality is less sensational. The U.S. Federal Reserve set interest rates artificially low in the late 1990s. The resulting boom led to a profusion of misallocated investments that inevitably had to be liquidated
...........
While the central bank can delay this outcome by continuing to pump more liquidity into the financial system, it would only trigger more malinvestment, making the necessary correction all the more painful once the central bank is forced to raise interest rates to counter the threat of inflation. Best for government officials to do nothing and let the restructuring proceed to its resolution.
...........
Also consistent with the Austrian view, government meddling since the bear market took hold has only drawn out the damage, with an aggressive 475-basis-point cut in rates during 2001 merely delaying the necessary liquidation of bad investments, instead of inciting the market recovery that has been continuously predicted by Keynesian-minded traders and analysts chanting the motto "Don't fight the Fed". The situation bears a disturbing analogy to Japan, where the government's unwillingness to let banks fail and write off their bad investments has prevented its economy, and hence its stock market, from recovering, despite having moved interest rates close to zero.

Just as U.S. president Herbert Hoover worsened the market's drop in the early 1930s by constantly berating the stock market and calling for investigations, President Bush has insinuated that poor corporate ethics is a systemic problem while his Justice Department and securities regulators embark on a zealous crackdown. Granted, the media claims that the market has been hurt by accounting scandals and not the ensuing regulatory assault, yet two weeks after the WorldCom story broke, the S&P 500 index was little changed. Only beginning July 10 did the index decisively break through the lows set after Sept. 11, once it appeared more and more likely that the White House and House of Representatives were moving in the direction of a tough Senate corporate reform bill. As long as the government sets interest rates and insists on intervening in the marketplace, boom and bust sequences like the one we've just experienced will repeat themselves, regardless of what laws pass to promote corporate virtue.
**********
Misetich

Down with government intervening in the marketplace - free markets is what investors need - free gold markets! the more they meddle the worse it gets

Got gold?
Black Blade
(08/09/2002; 14:10:33 MDT - Msg ID: 82689)
Bull Run For Hard Assets
http://www.forbes.com/2002/08/09/0809adviser.html

Snippit:

First, because of the weakening U.S. dollar and federal debt. Commodity prices worldwide are measured in U.S. dollars. As the greenback slides, as it did in the 1970s, the prices of commodities rise. In recent months, the dollar has been fading. Why? For one reason, the government has been printing money like crazy, making it worth less. Last June the adjusted monetary base was $66 billion. Three months later, it was $87 billion. And a weak dollar is just one of the fundamental factors I see setting the stage for a runup in commodities. There are trillions of dollars jumping out of the stock market, looking for new opportunities, feeding a growing demand for real, hard assets. We have plenty of mineral stocks in our portfolio, but for people who are nervous about the stock slide also pulling down gold stocks, I really like physical, hold-it-in-your-hands gold. I'd say put 5%-10% of your investment assets into one-ounce coins: either the Canadian Maple Leaf or the American Eagle coin.

Black Blade: Sounds good to me.

misetich
(08/09/2002; 14:19:38 MDT - Msg ID: 82690)
Champion cuts 1,500 workers
http://www.freep.com/money/business/champ9_20020809.htmSnip:

Champion Enterprises Inc. announced the layoff of 1,500 more employees Thursday as the largest maker of manufactured homes continued to feel the effects of an industry slump.

The company employed about 10,000 before the latest round of job cuts. Champion laid off about 200 workers in June.



Misetich

Significant addition to the bone pile

The jobless recovery continues unabated
Black Blade
(08/09/2002; 14:20:12 MDT - Msg ID: 82691)
Quiet Markets

It appears that the activity on Wall Street this week has been based on rather thin trading. It has even been difficult to get a good grip on the Gold market as a couple of my contacts have been cutting out early and didn't even come in the office today. This is "vacation time" for these guys after all. I suspect that may be the case for many on Wall Street, which makes the strength in equities and precious metals somewhat surprising. It may be that there is growing support for Gold and a much stronger base built up (especially for precious metals). It looks as if the precious metals market could be poised for strong upward movement as we approach the end of summer.

- Black Blade
misetich
(08/09/2002; 14:23:43 MDT - Msg ID: 82692)
Brazil's markets nosedive as election fears simmer
http://www.forbes.com/newswire/2002/08/09/rtr691860.htmlSnip:

SAO PAULO, Brazil, Aug 9 (Reuters) - Brazilian financial markets fell sharply late on Friday, battered by renewed investor concerns that the market's top pick for president is languishing a distant third in election polls.

Brazil's beleaguered currency, the real , sank 5.8 percent to 3.09 per U.S. dollar minutes before the closing bell, while the Sao Paulo Stock Exchange's benchmark Bovespa <.BVSP> index slid 3.24 percent at 9,981 points, dragged down by heavy losses across the board.
*********
Misetich

As Gomes, a front runner in this year election said succintly -(paraphrasing) we are rejoicing the fact Brazil went into further debt by $30 billion

Got gold?
Aristotle
(08/09/2002; 14:34:42 MDT - Msg ID: 82693)
MK -- IMF and the US
That part's right for sure!!!

Were it not for the U.S. being, among all nations, in the unique position of having (in the ecomonic vernacular) a "competitive advantage" (to put it mildly) in the issue of the unit of account (the dollar), the IMF (assuming it were also impartial) would almost surely throw the towel in on us as a basket case.

As I know you know, I am using this glorious period of official double standards to acquire as much Gold as my prosperity allows, getting it cheaply and for as long as the phenomenon lasts.

I can't figure out why so many posters seem eager to push the doomsday button. Personally, I much prefer general stability and widespread propserity -- "good" times.

As with everything else in my life, I'd much rather own and be comforted by my Gold in good times than in bad times. And since we can't control the times in which we live, we take what we get, planning and living accordingly to improve our position throughout.

Gold. For the good times and the bad. --- Aristotle
CoBra(too)
(08/09/2002; 14:43:45 MDT - Msg ID: 82694)
Recap ...
OK - 30 billion $ to bail out Brazil by the IMF - and as some refer to it as museum funds, which are non-fungible, though should add to the perception of strong reserves ...

The whole concept of the IMF is heading towards a museum of comical funding, seemingly. SDR's - the special drawing rights of the lender of last resort have - apparently, been outdated by Certificates of the same - payable in equivalent of real gold? ... Do I know?

- Was it only a couple of years ago, since the IMF tried to deploy its 'forbidden' reserve - gold - openly, while shunning the same as official reserves for all members? -

... Anyway, there seems to be some "money" - even if only perceived - to bail out Brazil - or is it JPMC, Citi and/or any other entity to prolong the mimicri of a "sound" system of monetary harakiri.

... while "Sir" AG is contemplating the Japanese way - and he may claim Alzheimer before the last bubble - is it credit or RE - bursts.

Though not sure if he was over-or under-rated, as this may constitute the ultimate perception of the ultimate fraud of a total fiat designed monetary system - the very system AG was condemning in the 60's - the only rating deservedly would be degene-rate!

Maybe - true? cb2





misetich
(08/09/2002; 14:46:43 MDT - Msg ID: 82695)
U.S. Economy: 2nd-Qtr Productivity Rose at 1.1% Rate (Update2)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVQbCBQrVS5TLiBFSnip:

The Labor Department's measure of how much work a person performs in one hour grew at a 1.1 percent annual rate in the quarter, double the pace economists had expected. In the first three months of the year, productivity surged 8.6 percent, the most since 1983.
.............
Productivity grew a revised 1.1 percent last year, down from a previously estimated 1.8 percent. The government also revised 2000 productivity to a 2.9 percent gain from 3.3 percent. The statistics reflect revisions in gross domestic product announced last week.

From 1996 to 2001, productivity rose an average of 2.3 percent a year. That compares with the 1.4 percent average of the previous 25 years.

Productivity at U.S. manufacturers rose at a 4.9 percent annual rate in the second quarter after rising at a 9.7 percent rate. Productivity at non-financial corporations, a measure watched by the Fed, rose at a 5.1 percent pace in the first quarter. That number lags the other productivity data by a quarter.
********
Misetich
Much ado about nothing - if you take out the hedonic adjustments you are left with little or no gain at all. and lets not forget they are also massaging the CPI inflation numbers by taking out basics such as food, energy and housing

What a scam!

Got gold?

misetich
(08/09/2002; 14:52:19 MDT - Msg ID: 82696)
Brazilian Borrowers Forced to Repay as Overseas Banks Balk
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVM_nBUdQnJhemlsSnip:

By Charles Penty


Sao Paulo, Aug. 9 (Bloomberg) -- International banks are refusing to renew loans to Brazilian borrowers, triggering sales of the nation's currency that may not let up before the October presidential election.

Bank of America Corp., Citigroup Inc. and rival lenders have reduced Brazilian financing to limit their risk in the face of the financial turmoil that has gripped South America's largest economy. Bankers said the International Monetary Fund's announcement this week of a $30 billion loan package to help Brazil avert a debt default isn't sufficient to persuade them to loosen their purse strings.

``You want to minimize your hits,'' Wachovia Corp. Chief Financial Officer Robert Kelly said in an interview. The fourth- largest U.S. bank isn't renewing loans as they mature and plans to reduce by half the $720 million in trade financing it has outstanding in Brazil.

The cutback in lending contributed to the Brazilian currency's 20 percent decline in July. At least $1.1 billion was transferred out of the country in the first three weeks of July, about double the amount in June, Brazilian central bank figures show.

The outflows may grow before the election as banks force companies to repay debt, bankers and economists said.

``Short-term credit lines are not being renewed,'' said John Welch, chief Latin American economist for WestLB AG in New York. ``We expect that to reverse after the election is over.''

Market Turmoil

Investor concern that the government may default on its obligations has fueled a four-month rout in Brazil's currency and bond markets. The nation's bonds, currency and benchmark stock index rose yesterday after the frontrunner, Luiz Inacio Lula da Silva, said he would comply with the IMF's budget restrictions and other terms of the loan accord.

``We will do everything we can to prevent this crisis from worsening,'' Workers' Party candidate Lula said at a press conference.

Many Brazilian companies remain concerned.

Eucatex SA, which makes tiles and boards out of Brazilian eucalyptus trees, repaid $2.5 million of loans in June and July after its banks including Italy's Banca Nazionale del Lavoro SpA declined to renew trading financing. When the IMF announced its loan pledge, Eucatex Finance Supervisor Solange Marques began telephoning the company's bankers in search of dollar financing.

``We don't expect miracles,'' Marques said after taking a call from state-owned Banco do Brasil SA, which said it couldn't provide foreign currency loans to the company. ``We hope the foreign banks will start to look more favorably at Brazil but the long-term future is still cloudy.''

Brazilian Banks

Typically, international banks provide financing in Brazil by lending to banks in the country that then make the loans to the final borrowers.

Uniao de Bancos Brasileiros SA, Brazil's sixth-biggest bank, had lending cut from international banks by at least 50 percent in July, said Carlos Catraio, its director of syndicated finance.

Before the IMF accord, Catraio expected the banks to renew as little as 20 percent of loans this month; now he's counting on the banks to restore as much as 80 percent of their international finance by September.

FleetBoston Financial Corp.'s Brazilian unit has seen its overseas lenders reduce financing by as much as half in the past two months, restricting its ability to lend to companies, said Geraldo Carbone, president of the unit, BankBoston.

Citigroup

Citigroup, which has a branch network in Brazil, cut loans and other commitments in the country by $2.1 billion to $9.3 billion at the end of June from the first quarter, regulatory filings show. Sir Deryck Maughan, who heads the largest U.S. bank's international operations, and Jorge Bermudez, chief executive officer for Latin America, declined requests for interviews.

Bank of America, the third-largest U.S. bank, has stopped new lending in Brazil, Chief Executive Officer Kenneth Lewis said in an interview. The bank has about $1.8 billion at risk in the country.

``We did become concerned and did not think it would be prudent to be putting new money into the country at this time,'' Lewis said. ``Once we get the political uncertainty and this fear of the unknown behind us, you'll see banks -- as we have been -- focused on Brazil as a country that you want to do business in.''

J.P. Morgan, the second-largest U.S. bank, reduced loans and other commitments in Brazil to $2.1 billion at the end of June from $2.8 billion a year earlier. The bank hasn't decided when it might revive financing.

*********
Misetich

The Brazilian economy will get worse- US interests in Brazil is huge

Got gold?
White Rose
(08/09/2002; 15:04:07 MDT - Msg ID: 82697)
Analysts Warn That Conseco May Seek Bankruptcy Protection
Analysts Warn That Conseco May Seek Bankruptcy Protection
By THE ASSOCIATED PRESS


Filed at 2:42 p.m. ET


CARMEL, Ind. (AP) -- Conseco Inc. announced plans Friday for a ``radical change'' in its capital structure but did not address reports that it was considering bankruptcy.

The company said Friday it would be meeting with regulators, rating agencies and other stakeholders to discuss restructuring plans. Conseco officials also said the company was exercising a 30-day grace period on upcoming bond payments.

In response to the statement on bonds, Fitch Ratings downgraded the holding company to C, which indicates imminent default. Standard & Poor's revised its counterparty credit ratings to SD, for selective default.

Chairman and chief executive Gary Wendt said in a statement that gradual restructuring of the troubled company would not work.

``Our judgment is that the continued gradual financial restructuring that was the goal of the turnaround plan is no longer the best course,'' he said. ``Rather, 'radical change in the company's capital structure' -- as one rating agency called for last week -- is required.''

He added: ``We cannot emphasize strongly enough our continued belief that the insurance and finance businesses that comprise Conseco are profitable businesses that serve important markets. ... The problem with Conseco has been the over-leveraged capital structure of the parent.''

Conseco's shares did not trade Friday on the New York Stock Exchange. They had closed at 34 cents on Thursday.

The Indianapolis Star reported Friday that top executives at Conseco had raised with employees the possibility of a bankruptcy filing.

In internal memos obtained by the newspaper, the head of Conseco Insurance Group told workers that bankruptcy was one option that Conseco's officers and board of directors were considering as part of a new plan to right the insurance-finance company.

Conseco officials did not return telephone calls seeking comment on the memos Friday.

The newspaper quoted a July 29 memo in which Conseco Insurance president Liz Georgakopoulos suggested that the effects of bankruptcy ``would be minimal, perhaps even positive'' for employees of Carmel-based Conseco's subsidiaries, yet have a ``big impact'' on owners, lenders and investors.

``What some argue that bankruptcy would do is accomplish the goals of the turnaround in a lightning-fast way,'' she wrote. ``For us as a business, this road would be faster and ... perhaps easier.''

Her counterpart at Conseco's finance division in St. Paul, Minn., agreed that a restructuring effort, ``regardless of outcome,'' would have little effect on Conseco's subsidiaries.

Although Conseco Finance president Chuck Cremens downplayed the likelihood of bankruptcy in Conseco's future, he did not rule it out.

Many shareholders are angry that they have not been kep informed.

Until Friday's statement, Conseco had issued no news releases since July 19 and the ``investor forum'' on its Internet site has been silent since July 9.

Some analysts and experts believe much of the bankruptcy talk simply is posturing to get a group of banks to modify the repayment terms of loans made to former directors and officers of Conseco.

Conseco warned its banks two weeks ago that unless they extend the loans, two optional bank payments totaling $500 million may not be paid as scheduled. So far, the banks have not budged, forcing Conseco to delay filing its quarterly earnings statement until Wednesday -- the last day it can do so without regulatory sanctions.

misetich
(08/09/2002; 15:15:42 MDT - Msg ID: 82698)
U.S. life insurers exposed to troubled cos-Moodys
http://www.forbes.com/newswire/2002/08/09/rtr691978.htmlSnip:

NEW YORK, Aug 9 (Reuters) - U.S. life insurers are facing about $23 billion in investment exposures to troubled companies that have recently defaulted or are having credit problems, Moody's Investors Service said on Friday.

"Investment losses stemming from these credits have already begun to affect many life insurance companies' creditworthiness and could lead to near-term rating or outlook changes," Moody's said
Insurers are among the largest investors in U.S. corporate bonds, which have been battered by one of the worst years ever for debt defaults and large bankruptcies.

Moody's reviewed the 82 leading U.S. life insurance groups that it rates and evaluated their exposure to WorldCom, Qwest, Enron, Williams Companies, Tyco, Dynegy, Global Crossing, Adelphia, Kmart and Xerox.

Life insurance groups with the largest exposures are AIG, Metlife, Aegon USA and Prudential Financial, Moody's said. Moody's said its study is the first to evaluate credit exposures of different insurers on a comprehensive basis.
***************
Misetich

Telecom and energy industry debt - almost worthless bonds - the dominos are falling and Greenspan, O'Neil etc are almost out of the game -

What can they do that they haven't done already? Tax cuts, interest rate cuts, ballooning government spending -

Oh yes they do have one more piece of ammunition in their arsenal - prick ANOTHER bubble - the US $!!!!!!!!!

Got gold?

PS According to a newswire story earlier today there's little movement of US arms toward the middle east - at this rate any attack on Iraq wouldn't take place until Feb/Mar 2003

sector
(08/09/2002; 16:12:14 MDT - Msg ID: 82699)
Au Contraire! The "Reality is FAR MORE Sensational...WHY Would the Fed Set Interest Rates "Artifically" Low?
The Truth is FAR More Interesting - They Thought They Had Discovered a Sure Thingmisetich (08/09/02; 14:09:44MT - usagold.com msg#: 82688)
http://www.nationalpost.com/financialpost/story.html?id=FE268218-1290-4C7A-808C-9E4793E42FE3

Snip:

The reality is less sensational. The U.S. Federal Reserve set interest rates artificially low in the late 1990s. The resulting boom led to a profusion of misallocated investments that inevitably had to be liquidated.
+++++++++++++++++++++++

The "Artificial" part was the manipulation of the gold price which first began on a date certain in July 1994 with a 3-plus standard deviation preemptive selling episode [This correlates exactly with AG taking two BIS board seats the same month...he needed the BIS gold to do round-trip swaps].

The truth is the Fed would NEVER have launched such a hair-brained scheme of absurdly low interest rates leading to a "New Economy" unless they already had a cap on gold.

AG's "Irrational exuberance" comment can therefore be seen as an admission that the scheme had overheated at that point.

Operative
(08/09/2002; 16:49:47 MDT - Msg ID: 82700)
TGIF
http://science.nasa.gov/headlines/y2002/19jul_perseids.htmMy goodness, another week has expired here at the 24 hour
learning academy for the investors who actually think.
I will need the weekend just to catch up on all the notes taken, to peak down some new trails discovered by this elite forum, and attempt to gain furthur insights into the secrets of what lies ahead. Thank you. Thanks to all who take the time to share insights and wisdom.

Wishing all a great weekend. As a reward for all our hard work the skies are putting on a show for us this weekend.
It's the annual Summer Perseides Meteor Show. Grab the lovely lady of your castle, a bottle of wine, and if your lucky you may even see a few golden ones light up the evening sky. Link is posted if you would like to check it out.



TownCrier
(08/09/2002; 17:09:36 MDT - Msg ID: 82701)
Aristotle (msg#: 82681)
http://www.usagold.com/goldenchalkboard/gc_CBdemocracy.htmlFor access to Chairman Greenspan's speech "The Challenge of Central Banking in a Democratic Society" simply visit the URL above to this page within The Golden Chalkboard.

It's a long hike, so be sure to take a friend along for the trip.

R.
R Powell
(08/09/2002; 17:21:12 MDT - Msg ID: 82702)
Impotent reserves
Something in the idea of IMF sponsored loans for reserves for Brazil being restricted for reserve use only but, at the same time, not capable of being used as reserves
does not feel right. Perhaps it's my construction oriented view of viewing problems through transition from start to finish that is causing this uneasiness.

If reserves hold value as insurance or a backup store of supply, doesn't that condition necessitate (and imply) that they are present and available for use when needed? Hopefully, liquidity or any other emergency won't require their use but they are there to be used, if necessary. They are there to be used if necessary. That is their function. How can they fulfill this role if they can not be used?
In the panic of 1907, word reached J.P. Morgan that there was not enough margin money available at the exchange margin post for end-of-day settlement for brokers. Morgan rallied the bankers to loan money to all to avoid default even though the bankers protested that they were all out of capital except for reserves. Morgan replied by asking what were the reserves for if not for use in an emergency. How can reserves be reserves if they are not available? Money has no value as a monetary means of exchange if it can not be exchanged.

How is holding impotent reserves any different than holding no reserves? Can collateral for a loan be given with an indisputable condition in place that the collateral given can not be taken in the event of default? Will Brazil's banking system function with "valueless" reserves?
Thought?
Hey kids, what day is it?
That's right- Happy weekend!!!!
Rich
misetich
(08/09/2002; 17:32:18 MDT - Msg ID: 82703)
sector -Au Contraire! The "Reality is FAR MORE Sensational...WHY Would the Fed Set Interest Rates "Artifically" Low?
If my memory serves me correct - US HAD to lower interest rates - they made the switch to lower interest payments on the debt - from long term to short term - thus the manipulation and suppression of gold

Debt to the penny is in excess of 6.1 trillion - it would be substantially higher had they not made the switch - so I suppose there's logic to the madness - however - it did not solve the real problem - of financing the debt - new trade frontiers are needed to keep the game going - China was a possible card - however they botched that up - as they have been unable to penetrate China market with any significant volume - China seems to be interested in advanced technology- while exporting cheap goods -

They have tried many gambits such as the internet - time after time they have invented new wrinkles, productivity, new paradigm, new economy etc - each time they have failed and with each failure - things got worse- and the same will happen with golds suppression scheme- not because they want to but because they will be overwhelmed

Europe has seen this coming and are trying to insulate themselves -

US $ is being challenged as the reserve currency by the Euro and ultimately gold -

Sooner rather than later gold will assume its righful title to the throne -

Got gold?

Mr Gresham
(08/09/2002; 18:10:28 MDT - Msg ID: 82704)
BB, White Rose
http://www.epinions.com/fddk-Beers-By_Name-All-Negra_ModeloWhew -- I think I over-limed that last NM, but that's what summer's all about! Maybe someday we can have our "Golden Brewski" ("Dark Brewings"?) essay contest, but then we're not Famous yet, and I'm sure the beer world can wait a little bit longer for the USAGold Goldheart's Seal of Endorsement on their label.

White Rose -- thanks for the tip. I've gotta hustle, I guess, and rescue a l'il ol' lady client from the clutches of Conseco. Or just go pay a "visit" to the guy that sold it to her...
Gandalf the White
(08/09/2002; 18:32:31 MDT - Msg ID: 82705)
Thank You, JILL of USAGOLD !
The "BRINKS" Truck arrived!
AND, the Hobbits LOVE those five OLD "BU" clinks.
They are FANTASTICALLY BEAUTIFUL !
Custom Order --WELL DONE !!
--- ay Sir Henri ---
CLINK CLINK CLINK CLINK CLINK
<;-)
a nation of one
(08/09/2002; 19:59:33 MDT - Msg ID: 82706)
US Constitution
From Article 1., Section 10.:

"No state shall ... make any thing but gold and silver coin a tender in payment of debts; ...."

It has to be the case therefore, that the US Constitution assumes that the individual states will make their own gold and silver coinage.

Maybe someone should establish a political movement having the purpose of initiating gold and silver coinage within some state.

Assuming of course that the laws of our nation actually are based on the US Constitution.
Black Blade
(08/09/2002; 20:02:39 MDT - Msg ID: 82707)
Fed Unlikely To Cut Rates, Regardless Of Rumors
http://www.washingtonpost.com/wp-dyn/articles/A61529-2002Aug8.html
Snippit:

Wall Street yesterday was again awash with rumors that the Federal Reserve will cut interest rates, perhaps at a policymaking meeting Tuesday, to spur faster economic growth, and, by extension, help put a floor under stock prices. The rumors may be the product of wishful thinking.

Only three weeks ago, Chairman Alan Greenspan, speaking on behalf of the entire Fed board, told Congress that the central bank expects solid economic growth in the second half of this year and gave no hint that he had a rate cut in mind.


Black Blade: The recent rally had the rumored Federal Reserve Rate Cut in mind. If the rate cut does not materialize, then there could be a very negative reaction on Wall Street. If there is a rate cut then the "Gold Carry Trade" gets another nail in its coffin. Neither decision will be a problem for Gold prices.

Black Blade
(08/09/2002; 20:09:33 MDT - Msg ID: 82708)
Decision time for Greenspan
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/08/08/BU93517.DTL&type=business
Tepid economy may force Federal Reserve to cut rates again soon, experts say

Snippit:

With the stock market in a swoon and the economy once again perilously close to recession, the Federal Reserve is getting ready to resume last year's campaign to cut interest rates, some forecasters now say. Most Fed watchers still expect Chairman Alan Greenspan and his colleagues to hold rates steady for the rest of 2002. But a growing number of experts predict that new threats to the economy will force the central bank chieftain to wield his shears again.

What changed the outlook was a summer that has been nothing short of dreadful, with stocks plunging and data showing the much-heralded economic recovery all but stalled out. Most shocking was the federal government's estimate that the economy grew at a feeble 1.1 percent pace from April through June, down from 5 percent in the first quarter, a sharp slowdown that raises the possibility of a renewed dip into negative territory in the months ahead. "When you look at all the figures, you start to get pretty worried," said Joseph LaVorgna, an economist with Germany's Deutsche Bank in New York. "The only saving grace will be more Fed cuts."


Black Blade: It could be "interesting" no matter what the Fed decides.

Black Blade
(08/09/2002; 20:17:34 MDT - Msg ID: 82709)
Fed Faces A Delicate Balancing Act
http://www.msnbc.com/news/791851.asp?0si
Snippit:

THE FED�S meeting Tuesday will be one of the most closely watched this year. Just five months ago, expectations were high that the bank would be steadily raising rates by this point to stem a resurgence of inflationary pressure. The stock market's plunge during the past month along with a run of weak economic reports turned those expectations upside down. Thursday, futures markets were forecasting the Fed would lower its target for the federal-funds rate to 1.5% by November, from its current 40-year low of 1.75%.


Black Blade: And yet another take on the Fed rate cut dilemma. Damned if they do, and damned if the don't.

Black Blade
(08/09/2002; 20:32:57 MDT - Msg ID: 82710)
Japan Recession Deepening, IMF Says
http://www.msnbc.com/news/791703.asp?0si
Snippit:

THE IMF FORECAST prices will drop 1.0 percent this year, after a 0.7 percent decline in 2001, a situation with no end in sight as wholesale prices remained flat for the fifth consecutive month in July. Consumer spending was also stagnant and imports remained cheap. The world's second richest economy is in its third recession in a decade � its worst in a generation. While the fund welcomed recent improvements, such as higher private consumption and business investment in the first quarter, it said "considerable downside risks" remained in Japan. The IMF called on the Bank of Japan to implement monetary policy that would put an early end to deflation, which has plagued its economy since 1999. The BoJ's current expansionary monetary policy was unlikely to stop prices from tumbling, the IMF said.


Black Blade: Meanwhile Japan continues forward with the "Currency Wars" as they have no choice. They throw away $billions of Japanese taxpayer yen in a desperate attempt to weaken their currency to gain a competitive edge in the global market. It isn't working � in fact it did not have a prayer of working in the first place. They are caught between a rock and a hard place. The insolvent Japanese banking system is collapsing (a reason why the Japanese government wants to eliminate deposit guarantees). Japanese is nothing more than a factory on a couple of islands that imports raw materials and parts, and assembles trinkets for export and sale. Unfortunately for Japan, they have no natural resources. The real estate bubble continues to deflate as well. The forward looking Japanese are taking this to heart by preparing for the inevitable by accumulate precious metals (primarily Gold and Platinum) and seeking other perceived safe haven investments. "Interesting Times"

Black Blade
(08/09/2002; 21:34:21 MDT - Msg ID: 82711)
The Coming Water Crisis
http://story.news.yahoo.com/news?tmpl=story2&u=/usnews/20020803/ts_usnews/the_coming_water_crisis&e=3

Snippit:

In a nation where abundant, clear, and cheap drinking water has been taken for granted for generations, it is hard to imagine residents of a major city adjusting to life without it. But Atlanta's water woes won't seem so unusual in the years ahead. Across the country, long-neglected mains and pipes, many more than a century old, are reaching the end of their life span. When pipes fail, pressure drops and sucks dirt, debris, and often bacteria and other pathogens into the huge underground arteries that deliver water. Officials handle each isolated incident by flushing out contaminants and upping the chlorine dose (Atlanta says its water meets health standards despite its sometimes unappetizing appearance), but no one sees this as a long-term solution. America's aging water infrastructure needs huge new investment, and soon.


Black Blade: Just like the problems of the energy infrastructure, water is a concern that has been neglected as well. As always, get out of debt, stash enough cash for expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities (including water).

a nation of one
(08/09/2002; 22:01:47 MDT - Msg ID: 82712)
tops
"how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

1. When everyone who is going to get into the market is in the market.
2. When the historically typical fundamentals are said to be no longer applicable.
3. When market levels are explained by unreal descriptions.
4. When unusual measures -including obvious lies- are attempted in trying to manipulate stock prices so they will stay high or not fall too rapidly.
5. When the Fed tries to motivate people to move capital out of securities, and other instruments, into stocks, by lowering interest rates, and by other means, thus making stocks ostensibly more attractive.
6. When the smell of rot fills the air.

Horatio
(08/09/2002; 23:04:12 MDT - Msg ID: 82713)
Greenscam
Getting knighted is the British equivelant of getting your puss on the cover of TIME magazine.Man of the year of some such thing.It usually preceeds your demise by about two months.
Greenscam getting Knighted for "stability"will probility mean all hell is going to break loose in two months.
I think its a "British thing",but the signal is accurate.
Its the Banksters way of signaling to each other .....
Horatio
(08/09/2002; 23:11:22 MDT - Msg ID: 82714)
Water
Don't worry about water projects,the Gumment will start another WPA project to "get America moving again"'soon as unemployment reaches 12 %.
Belgian
(08/10/2002; 03:57:20 MDT - Msg ID: 82715)
Re's :
@ Lady Waverider : Thanks for the China info. China will definitely playing a bigger and bigger role in the future pricing of Crude Oil. Not only on the normal economical way but the more on the "political" pricing of the crude. China will choose its oil-partners very carefully. Read, as least US as possible. China might even change gradually its stance towards Russia as there is a strong possibility of Caspian oil/gas, to be pipelined to this growing oil consumer. Thanks.

@ Horatio # 82713 : Very correct Sir. Promoting the *Sir* Allan away pour finir en beaut� (finish in beauty) and being recognissant for provided favors to the Queen's purse.
I had LOL.

@ a nation of one # 82712 : Great and correct syntax Sir !

@ Sector # 82699 : Yes indeed, That very, very culminating year ***1994*** !!! A sudden sharp rise in IRs (8%), out of the blue, with no explanation at all ! Exactly at a moment that stock markets were supposed to top at the then prevailing, historical hights. Fundamentalists sounded the alarmbells at that particular moment. Fiancial reporting had some (minimum minimorum) freedom and intellectual honesty left in those days. And Sir Allan, respesenting the financial brotherhood, changed all this very abruptly and purposely. Very few investors/speculators/gamblers, left the SMs for AAA Bonds and things happened exactly as was planned. The great IRs fraud ! As there were so many fundamental factors , culminating at that time. The *euro* not being the least of them. Oh the irony of the *Sir* Allan.

BTW : When looking at numberless stock charts having retreated, already, to 1994 (1996), valuations, is adding evidence on the importance of that year 1994. As if we are compiling, here, history on the future already.

On friday's CNBC-Europ, Gold-Talk...they (the brotherhood's servants), couldn't understand why a growing group of so many different people are orienting towards Gold, when there is NO (apparent) inflation !!!!???? HAHAAAAAA
And yes, there is *daily* Gold-Talk on CNBC ! They are smelling the inevitable. The POG-numbers 330$ and 350$ are repeated monotoniously and kind of self-fulfilling.
Gold Standard
(08/10/2002; 05:39:17 MDT - Msg ID: 82716)
Scattered thoughts on Bear Market rallies
Having reviewed numerous recent and not so recent essays on various goldbug sites regarding Bear Market rallies and volatility issues, I can't help but wonder whether present (and historical) Bear Market rallies (BMR) are as a direct result of market manipulation by TPTB, rather than a groundswell of market hopefuls all contemporaneously picking a market "bottom", and investing their hard-earned dollars accordingly.

I cannot, for the life of me, see how a BMR can actually commence for the average shell-shocked investor. I know that mutual funds administrators dance to a different tune, but any BMR must rely on the average investor for its impetus, unless the movement of funds is heavily in favour of the mutual funds.

There is, quite frankly, very little that could excite an input into a BMR for the average investor, given the readily available market data, and the current loss of capital.

While we are nowhere near the point of "capitulation" that marks a true market "bottom", the talking heads are shifting the deck chairs on a daily or weekly basis, by calling "The Bottom".

Your average investor (assuming that such an animal has sufficient cash reserves or leverage available after 2 1/2 years of carnage) is simply not going to risk life and limb by getting back into the markets, unless there is positive upside potential.

My theory is simply this: the BMR is nothing but EVIDENCE of broad-based market manipulation by TPTB; this is true right now, and is historically true.

If one of the golden-haired boys of the financial elite are having a hard time coping with the Bear, the unwritten rule seems to be that every member of "The Club" (a.k.a "The Cabal") is required to fill up the pot until that member can for the moment overcome their particular crisis.

The BMR episodes that we are experiencing in the Second Great Depression are uncannily similar to those of post October 30, 1929.

I theorise that the similarites are as a direct result of the self-same market interests, and similar manipulation.

If the choice to re-invest in a lousy market was up to the individual investor, even on mass they would not suddenly and irrevocably commit further funds to go down the gurgler, in the light of poor market fundamentals.

No, a BMR must be as a result of high-powered manipulation. There is sufficient "leakage" of the proposed manipulation to favoured clients or friends, that creates a self-fulfilling prophesy.

I would be very interested to see whether there have been any similar Bear Market rallies in bear markets prior to 1929-33. In my view, a BMR has the effect of (1) saving a member of "The Club", and (2) being an opportunity for "friends" of TPTB to make a quick killing.

In 1929-33, dissemination of information (newspapers, telegraph, radio etc) was far, far greater than at any time prior to that. Today, we have cable and the Internet as well.

However, in bear markets prior to 1929-33, there was no easy means of rapid deployment of information - and I'll bet that there was no similar structure of Bear Market rallies!

This would then constitute strong evidence that Bear Market rallies are an artifact of large scale market manipulations by TPTB, and not an indicator of investor confidence.

Cheers!

Belgian
(08/10/2002; 07:03:02 MDT - Msg ID: 82717)
@ Gold Standard > BMR
Before and after 1929, the average financial participant, is relatively *intelligent*. Intelligent as an *individual* that is. But once this individual embarks on the ever existing, financial "train"...he/she, becomes less intelligent and comes into the ban of the growing mass(herds)-movements. Free to less-free. Independant/neutral/rational to un-rational and perceptive. A mechanism as natural and old as the streets.

The financial (or any other) "train" has been the same as ever in nature but not in magnitude. Today, the instincts of the herds are guided/manipulated/engineered, on a gigantic scale. W've come to less than universal oneliners : patriotic for US, social for Euroland and *political correct* for all of us on this globe. Same nature, much different scale (gigantic).

I stopped looking for evidence on this phenomenon. Only wanted to check if it was also true for the Gold drama. It is !

But the reverse of the above described mechanism is also true. Mass delusion creates/gives birth, to renewed individual, intelligent thinking AND ACTING in crescendo.
We are very busy, daily, with this proces, here at the Gold source, CPM. Many jump the delusional train, recover from their bruses and step quietly but decisevely towards a rational, intelligent, individual, opinion/decision...into the direction of...another train. The Gold train !
Those voices of the herds, still on the crawded old financial train, calling, COME BACK...coooomme back, are slowly fading.

And since we ALL like to be in a growing and pleasant company, it is a very lonely Gold trail, we will walk for, God knows, how much more time. But more hikers are on the horizon and yes even in front of us. W're not that lonely anymore. The Gold train is in sight.
This is Elliott Waves and Fibonacci is all about : mass behavior, quantizised as probably as possible. Interpretational mistakes are very frequent.
Regards to you Sir God Standard.

timbervision
(08/10/2002; 09:01:07 MDT - Msg ID: 82718)
Gold Standard
Your point about the bear market rallies being a manipulation seems born out by so many things, not the least of which are the huge uptics in all the three US indices starting at the same time, often late in the trading day.

What I have wondered is do these manipulated rallies begin when TPTB see that the short positions have reached some critical level where they know a short squeeze can be initiated? I'm sure they know by experience how shorts will react to the fear of rising prices.
Belgian
(08/10/2002; 09:51:39 MDT - Msg ID: 82719)
@ Timbervision
Imagine you are the owner (and major shareholder) in a public quoted company at the market-mercy of the people's valuation, second by second. How would you handle all different sorts of situations, bearing in mind the question "why" you went public with your company in the first place (humhum)!
Than answering those "intervention" questions are relatif simple, isn't it ?
This gigantic financal web is what we all helped creating. Not cathetrals or castles. Not a renaissance or industrial revolution but an empty financial fiction with very little content.

States do intervene to manage *their* currency at best. Financial intermediairies, produce nothing and only speculate. We are eager to pinpoint those interventionists with the underlying idea to profit from it with more speculation/gambling. Some interventions are loudly made public (CBs) others are well hidden and need to remain so.

If tomorrow you discover a very small capitalized stock that is very thinly traded, you might even start thinking of managing its price-evolution yourself, without actually being the owner of the company ? Capitalism ! Socialists are born interventionists. They can't live and rule without it.
timbervision
(08/10/2002; 10:51:44 MDT - Msg ID: 82720)
Belgian
Thanks again for your insights. I have another question that's been on my mind and I wonder what your thoughts would be. Most at this forum have been buying as much physical gold "as (their) understanding" permits. Other actions taken in this secular bear market have been to exit the stock market and get into a more liquid cash position. I even know some who have recently sold their house to get out of a big mortgage debt and have now a fairly large cash balance. A significant amount of that cash should now be put into gold bullion. However, and this is my question, if someone sell's their house, which had already been mortgage free, and they have not fully grasped the need to buy gold bullion, are they not now exposing their cash to the pending currency inflationary devaluation, and thus would be better off staying in their house. Similarily, in this pending currency collapse, would owning shares in companies which will survive the bear market and currency collapse, be better than being in cash? For example, were Germans who owned Mercedes Benz shares before the Weimar republic currency destruction, still part owners of Mercedes when the economy recovered, and so better off than people who had converted everything to cash? Obviously timing is important. It is still better to be out of a falling market. But is sitting in cash, which isn't a real asset at all, the biggest folly?
Best regards,
Mr Gresham
(08/10/2002; 11:17:17 MDT - Msg ID: 82721)
Belgian, timbervision
Belgian -- Better & better -- I find myself wondering, are you a writer in your other life?

timbervision -- cash is a very fragile little boat to ferry you -- temporarily & quickly -- from one riverbank (house equity) to the other (PM & "hard" assets). Observe which bank is already overcrowded, overhunted, overleveraged, and flee to the other.

I think it was Horatio, however, who gave a very specific example of when liquid cash was a lifesaver in the 1987 crash. I would think it would also serve when banks froze up, and you could still make a mortgage payment.

You could also shop while others were lining up for their "$80 a week" allotment from the bank.

Of course, vital supplies stocked up now would keep you from being a too visible cash spender at a time when others were short of it, and it was not yet a time to convert metals to cash.

Diversification the key -- only not the usual "stocks-bonds-money market paper" mix, but assets-in-hand in a time when the Great Deception is revealed to all...
USAGOLD
(08/10/2002; 11:27:24 MDT - Msg ID: 82722)
Manifesto
In reflecting on the post here during the week (reposted from Kitco) that USAGOLD received mention on CNBC's Kudlow-Cramer Report in a deleterious fashion (a mention we believe to be a figment of the Kitco poster's fertile imagination), I pondered for a moment what it is we have to say through this portal to the public-at-large and how much of an impact we are having. Immediately that morning, we had phone calls from clients -- some saying they hadn't seen the purported mention and others saying that gold's opponents are finally beginning to feel the sting from the Gold Network -- those internet sites where gold advocates and owners congregate -- primarily Le Metropole Cafe/GATA, Kitco, Gold Eagle and, of course, USAGOLD.

Along these lines, Aristotle posted something that struck a chord with me. Few understand the real intent of USAGOLD / Centennial Precious Metals with respect to its gold brokerage and information dissemination. We are not here to overturn the current monetary regime. Our aims are not political, but financial and economic. We are not so much interested in changing the economic and financial world as we are in fleshing out its problems and weaknesses as they affect the average investment portfolio. As a matter of fact, I would go so far as saying that the course has been set and that there is precious little we can do at the moment to alter the course of the larger society and its rendevouz with destiny. We are Toltoyan in that regard. What we can do is something for ourselves and our families. We "can" protect what we've managed to gain. We can insulate ourselves to some degree from the mistakes and blunders which might victimize all of us -- know it or not, like it or not.

Here is what Aristotle said:

"As I know you know, I am using this glorious period of official double standards to acquire as much Gold as my prosperity allows, getting it cheaply and for as long as the phenomenon lasts. I can't figure out why so many posters seem eager to push the doomsday button. Personally, I much prefer general stability and widespread propserity -- "good" times. As with everything else in my life, I'd much rather own and be comforted by my Gold in good times than in bad times. And since we can't control the times in which we live, we take what we get, planning and living accordingly to improve our position throughout. Gold. For the good times and the bad."

Agreed wholeheartedly, Ari. And thanks for making USAGOLD / Centennial Precious Metals your gold brokerage. It is you who nourishes these pages with your purchases.

As Aristotle implies, that's not to say that the ills besetting our worldwide economy should be swept under the rug. At the same time, just because I've prepared for a worst case scenario, it doesn't mean that I welcome it -- and I do not think I am alone in voicing that sentiment. The one thing I find particularly gratifying about the group seated at this esteemed table is that by and large it isn't sitting around cheering the unravelling of Wall Street and Washington -- even though many predicted it, in fact acted upon it with their gold diversifications. It simply recognizes that the unravelling is occuring. It understands that this unravelling is far from over. The USAGOLD group predicted these events -- sometimes with uncanny accuracy and pretty much sequentially. It has yet to gloat about its foreknowledge and understanding even though each and every one of us has our own particular "I-told-you-so" story to tell with respect to friends and family.

Yes, Ari, this is a very good point you make. We do wish for some portfolio comfort in good times and bad, yet it is the bad which motivate gold acquisition. When viewed on a historical continuum, the unravelling of Washington and Wall Street has occurred so quickly over so short a span of time -- a pixel perhaps -- that it would have been difficult for anyone to have predicted its timing and velocity. To be sure, it could have been much worse, and those unprepared could have joined there brethrens in Argentina, Uruguay, Brazil and other contagion states in a blink. Before they even realized what had happened, they could have been separated from their savings & capital, and victimized by prowling state and banking system attempting to save itself -- save itself at the expense of the individual citizen and, more importantly, saver. That's why your advice is well taken: Prepare for the worst and hope for the best.

The real position of USAGOLD -- as I said earlier is not political -- but economic and financial. We believe that ALL portfolios should be diversified with gold, but we know only a small segment of the population will understand the connection between gold, wealth-earned and wealth-saved. Only the few will understand how important it is to insulate the portfolio against the ravages of the unrestricted statist expansionism. Only the few will take our advice to diversify their portfolios and go on with their lives, the rest of their financial undertakings, their political endeavors, etc. But it is that one simple act -- buying gold as a vehicle for asset preservation -- which will set you free psychologically as so many have attested to on these pages.

So our message in the end is very simple: We take the old Swiss approach. Gold should comprise 10% to 30% of every portfolio. The degree of ownership depends upon each individual's take of the economic and financial situation in which we find ourselves. Any investor who fails to diversify out of his or her national currency runs the risk of being victimized at some point by the state in which they live. That is the nature of fiat money economies. This warning is not hyperbole. It results from a reading of history -- and I'm not talking about the 18th or 19th century history, but last week's. And if Kudlow and Cramer see fit to publicize our involvement, we can only hope they would do so with the understandings just outlined. We do not see gold ownership as destructive of the economy and financial health of the nation, but precisely the opposite -- it's saving grace. Quite to the contrary, we see portfolios vested only in paper and its antecedents as destructive of the system -- a point that should be well taken given the circumstances with we find ourselves confronted these days.

Note: Those who early on, took our advice and diversified 10% to 30% have done very well. Now what began as a 10% holding has become 15% and 20% in some cases as the stock portion of the portfolio plummeted precipitously and gold rose moderately. This is what wealth preservation is all about. Do I think its over? No. I think we have only just begun. Any purchase of gold below $500 will turn out to be the saving grace for today's portfolio planners. There's not fiction with gold. It is what it is. No financial statment. No reliance on a self-serving management team. Oh, and by the way, you don't have to pay it a eight to nine figure salary to get it to work for you. The same argument made in the paragraphs above in a much more direct fashion. Nachio, Ebbers, Kolokowski, Lay et al. . . .or gold. The choice is yours.
timbervision
(08/10/2002; 13:43:23 MDT - Msg ID: 82723)
Mr. Gresham, USA Gold
Thank you for the wisdom in your posts. I think I'll send both of these posts to all my gold reluctant relatives.

USAGOLD / Centennial Precious Metals, Inc.
(08/10/2002; 13:47:26 MDT - Msg ID: 82724)
Common sense investing for common and uncommon times...
http://www.usagold.com/cpm/abcs.html

ABCs of Au by MK

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

Mr Gresham
(08/10/2002; 13:58:13 MDT - Msg ID: 82725)
Want to read a very good poster?
http://www.prudentbear.com/bearschat/bbs_search.aspGo to the link above and enter "mannfm11" in the "posted by" field. You can select the past day, week, month, or up to 6 months (a 20-page printout I took out to enjoy in the hammock). The man has a wonderful mind, and delves deep into the markets situation around us. Crisp clear thinking (other people's, if I can't muster up my own) is what keeps me going, most days.

And now, off to read Michael below...
Mr Gresham
(08/10/2002; 14:22:47 MDT - Msg ID: 82726)
Wisdom
"We are not so much interested in changing the economic and financial world as we are in fleshing out its problems and weaknesses as they affect the average investment portfolio. As a matter of fact, I would go so far as saying that the course has been set and that there is precious little we can do at the moment to alter the course of the larger society and its rendezvous with destiny."

Michael: Sounds like wisdom from another avenue of life:

Grant me the
SERENITY
to accept the things
I cannot change ~
COURAGE
to change the
things I can;
and the
WISDOM
to know the difference.

In fact, as Bubble-era Americans realize that they have been on a drunken rampage through an era of wild credit expansion, they may adopt a similar prayer with regard to allowing their lives to return to economic basics.

"The one thing I find particularly gratifying about the group seated at this esteemed table is that by and large it isn't sitting around cheering the unravelling of Wall Street and Washington."

Yes, gloating would be-token people who are hoping to gain advantage, and advance in economic status over others, in a time of misery. While there can be a very realist component of recognizing that this might happen to one in such a scenario, the overall tone of our communications here shows our wish to remain prosperous WITHIN the community around us, rather than apart from it or above it. The fact that others have driven us to these extremes of choice and calculation elicits frustration in our voices, but not gloating.

Also, at the basic level, you are also more likely to survive, and live a healthy life, within a Prospering society, IF you can modulate its unhealthy aspects -- both medically and psychologically -- for yourself. The difficulty of doing this balancing, however, brings out a voice of frustration in many, and in occasional grumpy moments (PMS = "Precious Metal Syndrome"?) it sounds like we wish it would all topple over already, and start over in more simple, understandable terms.

Unfortunately, it might start all over minus a few of us middle-aged, marginally-fit, and marginally-skilled (but very strong opinioned! -- Try eating that!) American guys.

With that, "Off to the treadmill", as BB would counsel...
a nation of one
(08/10/2002; 14:49:25 MDT - Msg ID: 82727)
Re: Manifesto
I expect that I am probably one of your worst offenders. I will try and temper my postings in future. The unfortunate fact is, perhaps, that I have already been trying to temper them. (This has to do with the fact that I am one of those people, one of many, who languish during times of peace, but excell in turmoil. And I like everything to be right, and if it isn't, I think it should fall down. I suspect that most men are like this but don't know it.) Please don't kick me off yet. For I make a touchdown now and then.
USAGOLD
(08/10/2002; 15:16:43 MDT - Msg ID: 82728)
a nation of one. . .
My post was not meant to get anyone to change anything that they are doing here, and I hope it didn't come off that way. My apologies, if it did. . . .. I like your posting style. Please don't alter it based on my last post because it was not my intended message, but more a statement of philosopy and mission. . . .
R Powell
(08/10/2002; 15:45:00 MDT - Msg ID: 82729)
USAGOLD
May I ask a question that has been asked before but whose answer changes with the passage of time? Your mention of internet sites where gold advocates and owners congregate has me wondering once more about the size of our viewing audience. Those sites that rely on advertising for their upkeep use the number of visits to the site to justify and promote their advertising costs. Vronsky even has a separate page that lists the different countries and organizations that visit there.

I ask about the viewing traffic as I believe this is a significant indicator of investor sentiment. Such a small percentage of investment capital is needed to move small markets. I'm always interested in supply and volume of offtake but don't wish to pry into business affairs. If my question concerning the number of site "hits" is inappropriate, just say so. If not, I am curious.
Happy weekend
Rich

MO VER MEG
(08/10/2002; 16:10:23 MDT - Msg ID: 82730)
(No Subject)
Perhaps the weakest link in our fiat dollar financial system is SILVER.

Just one buyer of physical silver (buying as little as half of the Buffet/Munger total) would light up runway beacons worldwide drawing extreme attention to the present physical shortage. Silver would then be on the radar. Gold would follow. The Cabal would be illuminated, exposing their dirty little backroom tricks. The CFTC would get religion and fervently begin praying for forgiveness. They would all be hollering, "Katie, bar the door".

Who could this buyer be? Oh, take your pick of any country with a falling currency (very long list) or entity with an ax to grind with the USA (list growing longer every day).

Talk about exposure!

MOVERMEG

ps. I am so happy that my daughter has taken up the cause and is writing in support our cause (plus she no longer catagorizes my diatribes as "out of control"). She is learning something that will never be taught in school. I urge everyone to keep writing and keep copies.

Belgian
(08/10/2002; 17:07:59 MDT - Msg ID: 82731)
@ timbervision
Your question of selling one's house (one's castle) is not to be answered with the necessary heavy nuances. How much of the house is already *your* property (fully paid for)...the future of real estate under wich your property will be classified (high/low value - ?). And so forth !
Each and every individual situation is so completely different. What form will the supposed hyperinflation, take ?

We do try to have a glimpse into the nearby future by analysing, for instance, to what extend, global intervention has been responsible for the "dept" and "developmentspeed" of the prosperity ! How much of this acquired prosperity (taken for granted) must be given back in order to overcome, sufficient part, of the anomalies (read debt), created ? Hohow, what a problem when individual problems are added to the latter.

Sir Allan was knighted because he symbolises (personification) the broad consensus on "intervention". Be happy, because we will (always and massively) intervene and "the" market will not be the market you think it is. In other words : systemic, generally accepted/demanded/needed, plain vanilla intervention. Not for temporary, "corrective" reasons but for more "distorting" purposes/reasons. Read, deep and fast prosperity. Alas false and misleading, unwillingly, percepted by Goldadvocates.

It is against this background that all savers/investors have to make their very difficult decisions. We (them)managed to create enormous financial surplusses, together with un-over-seeable, debts, at the same time. What shall we do with all these masses of rapid growing confetti, earned or borrowed ? Answer : create more of the same. More illusionary financial paper profits with more real debts.
As idiotic as it may sound, but we aren't producing enough "real" things, proportionate to the confetti that is produced minus the confetti that never was (6 trillion SM-paper, gone)

Making decisions in "the" market that isn't a ***market*** anymore is lunatic. All interventionism is favoring the privileged (the nomenclatura). This for a greater variety of reasons. The real "free" market for real goods/services has sclerosed. Oh yes, we are all free to participate into this monopoly game. Yep, even free to buy as much Gold as we desire, during this temporary evolvement of super-interventionist-control. What a luxury ?
All financial participants are fully reliant on this interventionist adventure (Thanks Sir Greenspan). 100% complacency and optimistic selfconfidence. The X-thieth financial Reich. That's exactly what worries me the most !
Getting out of touch with normality. Normality to be re-defined ad nauseum.

I found security and refuge, for the coming unknown, in Physical Gold. My house is my property and Gold savings are ment to keep my modest standard of living, no matter what happens.
Selling one's house to "gamble" on Gold, seems very unwise to me. As is gambling, anyway. Gamblers, are honoured as smarties, these days.
*Speculating* (is respectful) that Gold will have a very important place, well into the future of our lifetime...isn't that foolish as many do want to make us (me) believe. Don't know what kind of place/function, Gold will/might have . But it hasn't been discarded and will be called back in function. Called by mom and pop or Giants or Officially. But called it will ! Hope of having answered your question, more or less, indirectly, though.

Sir Gresham: Thanks for the compliment but I'm not a writer at all. I do enjoy, tremendously, the discovery, of how this world, realy works. Fascinating for a small shrimp to *understand* it evolving ! Boy, have I been "financially", stupid/ignorant, all those years.
This forum is more like an open University. And being a student here AT CPM, is percepted to me, as an privilege.
The real Sir's name is rather Kosares and Co.


Operative
(08/10/2002; 17:18:45 MDT - Msg ID: 82732)
America At The Crossroads

"The one thing I find particularly gratifying about the group seated at this esteemed table is
that by and large it isn't sitting around cheering the unravelling of Wall Street and
Washington."

There needs to be a great unravelling in this country. The tentacles of greed and corruption have wrapped tightly around our political and financial power centers and it appears the victim will soon enough enter the stages of final expiration. Members of this board have already begun to make public, and note, the evidence of tremors in parts of the extremities. How to accomplish this unravelling is beyond the capacity of this lil hobbit.

Were it that the battle for survival consisted only on a monetary plane. A simple return to the gold standard might avail much. This modern age of massive/excessive consumption/debt
could readily stand for some moderation. However, the larger struggle appears to be more about this great country and the freedoms we once had. It was not our richness nor bank accounts that made us great. There have been other lands who acquired great wealth but sorely lacked the freedom/justice that only America could provide. It was through freedom that we have prevailed for 200 years through both good and bad economic times. Today, our country's path is intersecting financial, moral, and constitutional crossroads.

Most days I do feel like I am just "sitting round" the table here. Try as I might I lack the mental ability to do much else except provide for the homefront and try to discuss the current events with a few close friends, in hopes they too can prepare for the coming storm. I agree with the synopsis that the tides/events are well underway, and short of a miracle, they will carry us all into the final closing scene. (Hope never gives up)

It would be nice to cheer, if there was a victory. If integrity was once again instilled in our leaders or if honesty was to prevail over treachery and secrets of closed door meetings among the movers and shakers of this land. To simply cheer because of the fall of the mighty, would be an empty cheer. Any temptation to cheer is quickly diminished by also understanding a basic law of physics that there can be no vacuam. Which brings us to the question of what will replace the fallen? A more open and honest entity? Or something far more sinister in nature?

Mr. Gresham's posting of the Senerity Prayer offers sound advice to all of us struggling with these changing winds.
I would like to add to this the Creed for Optimists:

* Be so strong that nothing can disturb your peace of mind.
* Talk health, happiness, and prosperity to every person
you meet.
* Make all your friends feel there is something in them.
* Look at the sunny side of everything.
* Be as enthusiastic about the success of others as you are
about your own.
* Forget the mistakes of the past and press on to the
greater achievements of the future.
* Give everyone a smile.
* Spend so much time improving yourself that you have no
time left to critize others.
* Be too big for worry and too noble for anger.

For those like me who have trouble remembering they have shortened this to : Dont worry be happy.

The future will require both "great minds" and Rock's "great heart" in all of us. Thankfully there is an abundance of both to be found within the halls of the USAGOLD castle.
Belgian
(08/10/2002; 17:56:49 MDT - Msg ID: 82733)
@ MO VER MEG and the Silver-Affair ?
This is indeed very tuff to place (inter-relate)(silver) into the Gold drama. Looking at this? from all different angles...I can only come up with a theory that is a derivative of "interventionism". Silver must be (!!!) capped in price as to cover the Gold-Interventions. And so far, not a "mission impossible". Illustrates the power of the interventionists. Or rather the general "acceptance" (reliance on) of intervention.

POS management out of fear that the general public should become silver-oriented as by intuition or instigation. The de-coupling of POS, endangering the Gold cap(s) ?
Avoiding the "if you can do it with silver, you can do it with...Gold" ? Do what ? Attrackt the general public's (or Giants) attention to an inexplicable anomaly.

But in order to keep this silver market under control, physical silver is needed in sufficient amounts. FROM WHAT SOURCE ? And more important...why doesn't this silver source (China suspected) wants to admit it is providing (selling) its silver at historical lows ? For Gold we have the CB selling stories and Gold forward sales + derivative figures/estimates. But very, very little official statements on this for silver. No cries for silver transparancy (UK Gold sales) or a silver WA. Why does the industrial metal silver, behaves as Gold, pricewise ? Silver isn't an official reserve as Gold is and confirmed ? Strange situation (co-incidence). Palladium/Rhodium and Platinum do behave as industrial metals even where platinum was long considered almost as precious as Gold. Silver must have a temporary, special status as a Gold coveror.

Once silver is not needed anymore as a dampener on POG, market fundamentals (industrial metal) will be de-interventionized (set free-?) ? When intervention is able to show 100% perfect results...it can easely deny (ridicule)its existance. For this to continue, the general public must not be alarmed, in any subtle or less subtle, way. This theory is only to be taken into consideration, if silver fundamentals are correctly publicized. If it is true that massive quantities of old (obsolete) silver reserve stashes have been brought to the market...POS anomaly has little to do with covering Gold Intervention. I must admit that I'm very confused about this silver situation and don't have the courage/time to study it more in dept. Where is the black hole, here, MO VER MEG ?
darkhorse
(08/10/2002; 18:26:21 MDT - Msg ID: 82734)
re: silver
If...and I find it a big if...silver is coming from some "official" sales source, then why has the US Gov't had to draft legislation to buy silver for the Mint on the open market? If silver isn't coming from such a source, then who in the world could have that much to sell without anyone else knowing about it? If Mr. Buffet (or other big time holder) is selling, I believe we'd hear about it, just as we'd see lease rates move up if he were "only" leasing. I don't have any answers to the silver question either, but in light of all the unknowns, I can't see low silver prices for much longer. I really believe we're going to wake up one of these mornings, in the not real distant future, to a world much more different than what our comfort zones will allow...and that for those of us who have mentally prepared for such things to happen. God help those that are living in denial...they can/will make things much harder on the rest of us.
Sierra Madre
(08/10/2002; 18:30:40 MDT - Msg ID: 82735)
What will move silver?

Silver will go to $100 US/oz as soon as one country decides to adopt free coinage of silver as an end to its woes.

The mass of the people of that country would then become buyers, nothing could stop them. They would want the PHYSICAL in their hands.

This is not happening due to a spiritual problem: there is no leader today, with the stature required to ACT. Action is the implementation of thought, and leaders do not think, today - unfortunately, it is the problem of our age.

But, there may be an awakening, someday.

Sierra
Paper Avalanche
(08/10/2002; 18:56:54 MDT - Msg ID: 82736)
Sinclair nails it
http://www.safehaven.com/Editorials/Sinclair/Sinclair080902.htmTerrific analysis and interpretation of this week's shenanigans.

This guy is a razor in a world of butter knives.

Paper Avalanche
silvercollector
(08/10/2002; 19:11:43 MDT - Msg ID: 82737)
Not doubting Sinclair's stellar news but...........
how can we confirm the arrangements of the IMF loan(s)?
Black Blade
(08/10/2002; 19:46:35 MDT - Msg ID: 82738)
Big Risk if Bear Market Ends with Bang
http://biz.yahoo.com/rb/020810/column_stocks_week_1.html

Snippit:

NEW YORK (Reuters) - Be careful what you wish for. You may get it. A much-hyped "capitulation" or "selling climax" is widely expected to herald a stock-market recovery, but it could do just the opposite. After more than 2-1/2 years of slow-motion wealth destruction, investors are getting fed up and want to see the end of this horrific bear market in stocks. Some are hoping for a snappy, V-shaped plunge followed by a spiffy rally. While bear-market routs have been known to end with a bang, a bone-jarring finale to the current blood-letting would probably be a disaster. "There is just too much stock in the hands of the public for this to occur," says Ray DeVoe, publisher of the DeVoe Letter. "There is over $4 trillion in stock mutual funds and the question about a V-shaped climax and recovery, if the public does decide to dump stocks, would run into the classic, 'sell to whom?"'

Black Blade: Considering the risks in these markets it make sense to set aside some funds in precious metals. The economy is still on shaky ground. The recent downward GDP revisions have shaken many on Wall Street. We live in a global economy with nations fighting over shrinking markets and so far we have seen the "Currency War" escalate between the US and Japan, and now Europe. The Latin American economies (with few exceptions) are basket cases and those problems threaten to ripple northward. Asian countries that are still weakened from the effects of the Asian Contagion are also at risk should Japan's problems ripple outward. The insolvent banking system in Japan has yet to be resolved as more and more bad problem loans come to light. In the US the "Bone Pile" continues to grow even though many are not counted as unemployed or under employed (off the books?). Consumers and corporations are drowning in record levels of debt and many consumers are still adding debt with additional mortgages and consumption paid for with plastic. Consumer confidence has fallen sharply and just this week discount retailers have made good gains while mid tier and high end retailers have suffered losses. There is growing concern about deflation. If that is so, then producers and manufacturers will have very little pricing power. The result could be a death spiral like that of the Great Depression. So far the outlook is somewhat "grim". This is the time to get out of debt and to stay out of debt, stash enough cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. Be prepared, at least you will sleep easier.

Black Blade
(08/10/2002; 19:58:20 MDT - Msg ID: 82739)
Brazilian Borrowers Forced to Repay as Overseas Banks Balk
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVM_nBUdQnJhemls

Snippit:

Sao Paulo, Aug. 9 (Bloomberg) -- International banks are refusing to renew loans to Brazilian borrowers, triggering sales of the nation's currency that may not let up before the October presidential election. Bank of America Corp., Citigroup Inc. and rival lenders have reduced Brazilian financing to limit their risk in the face of the financial turmoil that has gripped South America's largest economy. Bankers said the International Monetary Fund's announcement this week of a $30 billion loan package to help Brazil avert a debt default isn't sufficient to persuade them to loosen their purse strings.

``You want to minimize your hits,'' Wachovia Corp. Chief Financial Officer Robert Kelly said in an interview. The fourth- largest U.S. bank isn't renewing loans as they mature and plans to reduce by half the $720 million in trade financing it has outstanding in Brazil.

The cutback in lending contributed to the Brazilian currency's 20 percent decline in July. At least $1.1 billion was transferred out of the country in the first three weeks of July, about double the amount in June, Brazilian central bank figures show. The outflows may grow before the election as banks force companies to repay debt, bankers and economists said.


Black Blade: Brazil is far from being out of the woods yet. We still have to see what austerity programs will be demanded from the IMF and here is where the IMF has a poor record. The $30 billion loan is far from sufficient. On Friday the Brazilian currency and markets began to decline once again. In a word � "Grim".

steady
(08/10/2002; 20:00:12 MDT - Msg ID: 82740)
coming soon to your town?
http://www.washingtonpost.com/wp-dyn/articles/A2514-2002Aug10.htmlCalif. City Shuts Down
TULELAKE, Calif. �� You can't fight city hall in this tiny town on the California-Oregon border � because you can't get in.
Officials in Tulelake have locked it up tight after losing their liability coverage because of post-Sept. 11 fallout in the insurance industry.
The city has been told insurers are unwilling to provide coverage because the state won't allow them to exclude acts of terrorism.

read the rest.. tic tic tic ti....got gold?
Black Blade
(08/10/2002; 20:11:12 MDT - Msg ID: 82741)
"The Barbarous Relic Files" - $200,000 Gold Sword With Ties to the U.S. Presidency in the 1840's Discovered At Charlotte Stop of Chubb's Antiques Roadshow
http://www.businesswire.com/cgi-bin/f_headline.cgi?day0/222222010&ticker=
Snippit:

The item is Among Most Valuable Finds in Show's 7-Year History. A rare gold sword that traces back to the United States Presidency from the 1840's and appraised at $200,000 was discovered Saturday at the Charlotte stop of the 2002 Chubb's Antiques Roadshow at the Charlotte Convention Center. The sword is among the most valuable items uncovered in the Roadshow's 7-year history. The sword was brought to the show by a Louisville, KY, resident, whose relative had been presented with it for military recognition in 1848 by then U.S. President James Polk. The sword was complete with a case and sleeve, and its hilt and scabbard were made of solid gold. "This is the most significant item ever to come to the military table at the Chubb's Antiques Roadshow in history and value," said appraiser Christopher Mitchell of Point Clear, AL. "During the 1840's, the sword was a mark of honor. To be presented with a sword of solid gold by the President was the biggest honor to be paid to a military officer at the time."

Black Blade: How would you like to find that among you Great Grand Dads effects in the attic?

steady
(08/10/2002; 21:08:11 MDT - Msg ID: 82742)
blacblade re the gold sword
thats it..... thats the sword to decapitate the cabal!
mikal
(08/10/2002; 21:44:01 MDT - Msg ID: 82743)
Living with gold in our world crisis
There is a world revolution going on that will change the financial system. A great crisis, such as never before in America, because the emphasis now is on spending and taxation. When the false prosperity collapses, conditions will change in a way most cannot imagine now. Unless they make drastic changes in living habits now, a rude awakening will come... Gold is the preeminent international medium of exchange. Everything employed for exchange for thousands of years had to have some value. Gold was most highly treasured because of it's qualities, it's scarcity and it's beauty. The present generation has tired of gold. We've gone off the gold and silver standard entirely, printing bills of credit instead. A defacto barter system through the medium of certificates issued by the banksters. (We here know the FED is privately owned and the FED is payed for these certificates by the Treasury Dept.) But these will not be acceptable in trade with the rest of the world... We still have security, food and clothing, even luxuries, that people in other nations do not. So it is best to accustom ourselves to simple living. A dwelling place that is adequate, but not larger than needed, and if possible in an area where taxes and other living expenses are reasonable. Growing food and herbs for medicine and canning if possible. Making clothes, learning basic, practical skills for yourself and others. Real and natural living and pleasures versus false and shallow. There is much in creation's hidden nature to fascinate and occupy anyone. An uncomplicated life with fewer worries and waste. People, especially non-Americans, must learn to save in every way possible, with fewer luxuries, setting aside gold regularly, and essentials. Like Helen and Scott Nearing's "The Good Life".
sector
(08/10/2002; 21:47:36 MDT - Msg ID: 82744)
@Darkhorse The Falling LBMA Silver Volume
There's a clue to the timeing in the regression lineThe .77 R^2 regression line intersects zero in the first quarter of 2003.

That would mark be the end of the sub-six dollar window of accumulation.

The monetary authorities will not advertize their currency devaluation intentions beforehand.
R Powell
(08/10/2002; 22:51:12 MDT - Msg ID: 82745)
Silver
As darkhorse mentioned, the silver purchase bill has been signed so that the government can buy silver for the Philly mint. During the time this news became public (did anyone other than us notice?) the POS was declining from over $5.00 to about $4.60. It does not appear that the market is now nor has it been trading (pricing silver) with any consideration of any supply and demand fundamentals. Industrial and photographic silver use amounts to approximately 80% of total use. Most of this silver probably moves from producers (mostly by-product production) to users without passing through Comex or any other price fixing markets, I believe. Can anyone offer any insight here?

If this supposition is correct, then silver prices as reflected in Comex price discovery are the result of mostly technical, speculative trading. The anomaly is, of course, that with users obtaining what they need, the POS is oblivious to the ever decreasing available supply.

"Why does industrial silver behave as Gold, pricewise". Probably as both ignore the yearly production deficit and still trade somewhat together as precious metals even though silver is much more an industrial one in terms of use. Gold still has the stigma of that which there is plenty of, with ready sellers should the price rise. Silver seems to be viewed the same even though the numbers state otherwise. Are there unknown stores of silver? I find this theory hard to believe. Selling from China last year may have been recycled photographic waste re-entering the market once again in silver form and noted as an export from China. It may be that since the world has been using stores that took thousands of years to accumulate that the idea of "not enough" strikes people as inconceivable, like running out of air or water. There were stores of silver long, long before anyone (GFMS or anyone else) thought to figure out exactly how much there is and I guess no one knows how much is left or who holds it. We can say that best guesstimates are that we may actually see demand exceed supply sometime soon. I'd say this might happen and then still have to become known to the market makers before POS really rises. Until then, we can hope that other perceived economic forces will tempt the market upward or, as suggested, some country or countries decides that silver might make good money. I certainly think so, pretty and durable.
Rich
R Powell
(08/10/2002; 22:55:17 MDT - Msg ID: 82746)
sector
What is the .77 R^2 regression line?? It sounds technical, can you explain it so a non-technician like myself can understand?
Thanks
Rich
Sierra Madre
(08/10/2002; 23:09:03 MDT - Msg ID: 82747)
A touchy suggestion regarding gold...
These suggestions may raise some hackles.

The fact that most people do not use gold and above all, that they do not appreciate it or value it, reflects not only on their governments, but on individuals themselves.

Question: Do people reject gold because they are unworthy of it or FEEL UNWORTHY of it? Does this deep-seated rejection evince a moral degeneration which impels people to reject something of eternal worth?

The rejection of anciently recognized virtues is a fact today. We see massive immorality pervading the population. Is this linked to the rejection of a symbol of virtue, gold?

Just an idle question.

Sierra

mikal
(08/10/2002; 23:37:36 MDT - Msg ID: 82748)
"The wheel is come full circle"- Shakespeare, King Lear, V, iii
@Sierra Madre - Will everyone look at gold differently when it's suddenly popularized on the tele and in print? Of course, but how or why? You can see, most will value it for different reasons than you and I. ... @R. Powell- Excellent silver analysis. The rumbling rocket is easy to spot now. We'll need your 20-20 vision to spot her when she's airborne.
silvercollector
(08/11/2002; 06:23:57 MDT - Msg ID: 82749)
Futures
Question:

There are theories galore regarding the manipulation of silver and gold through derivative products. If it is true that the POS & POG can be controlled through this mechanism then why can't oil be controlled?
silvercollector
(08/11/2002; 06:25:49 MDT - Msg ID: 82750)
Iraq
Question:

Does anyone have any credible links regarding the possibility of war with Iraq?
misetich
(08/11/2002; 07:35:14 MDT - Msg ID: 82751)
Stagnant Wages Pose Added Risks to Weak Economy
http://www.nytimes.com/2002/08/11/business/11WAGE.htmlSnip:

By LOUIS UCHITELLE


Although the recession has ended, the wages of more than 100 million workers are still stagnant, endangering the consumer spending that sustains the fragile recovery.

The stagnation in total wages paid to the nation's employees outside of government is now a year old, according to newly revised government data, which paints a bleak picture of the economy. The rising cost of company-sponsored health insurance is also taking a bite out of take-home pay. Rather than pay the premium increases themselves, companies are deducting much of the additional cost from employee paychecks.

..............
says Richard T. Curtin, director of the University of Michigan's Surveys of Consumer Sentiment. "People are telling us about smaller paychecks," he said. Meager raises or no raises at all are a problem for them, he added, "but what they are really noticing is the loss of overtime hours, which effectively lowers their income. And they are beginning to cut back on spending."
............
Not everyone accepts the new wage revisions published by the Commerce Department as proof of stagnation. A broader measure of personal income, one that includes items like Social Security benefits and unemployment insurance as well as wages, has risen recently.
..............
But there is an obstacle to optimism. The personal income numbers, while broader than wages, do not include capital gains from the sale of stock. This huge source of income in the late 1990's has shrunk considerably since early last year, judging from the shortfall in expected tax payments last April 15, economists at the Congressional Budget Office say.

............
"What we have is a grinding slowdown in the incomes that people have available to spend, from whatever the source," said Lee Price, chief economist for the Senate Budget Committee
.............
But wages and salaries are not the only measure of how income is doing. The Commerce Department's Bureau of Economic Analysis publishes a broader indicator called "personal income." Wages and salaries are the largest single item, of course. But personal income also includes unemployment payments, Social Security benefits, income from self-employment, rental payments to landlords, interest earned from savings accounts and bonds, and employer payments for health insurance and pensions. Although this last outlay does not go directly to employees, the government counts it as income to them on the ground that it is made by their employers on their behalf.

.............
Viewed so broadly, personal income surged in June, the latest month for which numbers are available. Gains in many of the nonwage items have more than offset the stagnation in wages and salaries
............
There is guesswork, however, in some of the calculations of the Bureau of Economic Analysis. For example, bonus payments, which companies have increasingly used in lieu of raises, are included in personal income, although the bureau learns the size of the actual payouts only late in the year. In the interim, it makes assumptions.

"We assume that the growth pattern of irregular pay is the same as regular pay," said Carol Moylan, chief of the bureau's personal income division. "If it is not, and it sometimes is not, we have a problem."

...........
although capital gains added greatly to income in the boom years but much less over the last 18 months, judging from the sharp fall in tax payments last April.

Only about half of the $150 billion in tax payments expected that month actually arrived. The shortfall suggests to economists at the Congressional Budget Office that the stock market sell-off wiped out capital gains and the tax revenue they generate. Canceled or shrunken bonuses and worthless stock options might also be factors, they said. Whatever the explanation, the tax payment shortfall indicates a loss in personal income of $200 billion or more, most of it among wealthy Americans.

Just how much they lost is not known yet. Many wealthy people ask for and get postponements in filing their tax returns. But the advance billing is not good. "We have arrived, on balance, at income stagnation," Mr. Bernstein said, "and that is a problem for the economy."

***************
Misetich

Excellent article - a must read! Greenspan, O'Neil, Lindsay, Wall Street "optimistic economists" can spin, spin and spin - the sad reality of their policies and those of their predecessors such as Rubin created a boom and bust cycle of major proportions.

It is "them" that have accelarated the risks of financial systemic crash!

It is the charlatans on CNBC, and other well known media outlets that have "spread the message" alluring, millions and millions of investors in the rigged casino.

The sad part is that the "mild recession" has not purged any excess - any attempt to stop the cycle will fail miserably - given time -

Global economies are decelarting downwards - making it difficult for the market interventionists, manipulators to succeed

Investors would be prudent to have 10-25% of physical gold in their portfolios as insurance to the risks posed

Got gold?




misetich
(08/11/2002; 07:49:09 MDT - Msg ID: 82752)
Brazilians Find a Political Cost for I.M.F. Help
http://www.nytimes.com/2002/08/11/international/americas/11LATI.htmlSnip:

By LARRY ROHTER


RIO DE JANEIRO, Aug. 10 � Brazil and other Latin American governments have followed Washington down the free-market path, only to find they are now losing control over their economies.

The immediate consequences are most visible here in Brazil, which is in the midst of an important national election. Brazil, Latin America's largest country, has just engaged a $30 billion lifeline from the International Monetary Fund, but one that imposes strict policies on the next government. There is a strong chance that it will be a left-leaning one that promises to improve the lives of the poor who were left behind in the economic experimentation.
..........
But Brazil's comes with unusual strings, and it thrusts the lending agency into the uncomfortable position of being in the middle of Brazil's democratic decisions.

That is because $24 billion of the loan would be delivered next year only if the new government met certain budgetary targets.

"This agreement is an extremely shrewd and subtle piece of political engineering," said Gilberto Dupas, director of the international studies program at the University of S�o Paulo. "No candidate is going to want to be responsible for a brutal reversal of expectations" that would come from not receiving financing from the fund.

...........
Brazil's new money is to be doled out over 15 months and requires whatever government takes power on Jan. 1 to maintain a budget surplus of 3.75 percent through 2005.

But both of the leading candidates are chafing at what they perceive as an intrusion on Brazil's sovereignty and on their ability to fulfill campaign promises. Guido Mantega, Mr. da Silva's chief economic adviser, complained that the I.M.F. was trying to confine a Workers' Party government "in a plaster cast."

"This limits the capacity for social investment we plan to make," Mr. Mantega said. "If we reduce interest rates and the primary surplus is maintained until 2005, the effort to reheat the economy will be in vain."

The penalties for noncompliance are equally clear. Brazilians need only look next door at Argentina, which has been bogged down for months in futile negotiations to restore its line of credit with the fund.

"When it comes time for the rest of the money to be dispersed in Brazil, because they have quarterly targets and reviews, the first time that Lula misses they can tell him he's not getting any more money," said Walter Molano, a market analyst with BCP Securities. "That's what they did to Argentina last year, saying there would be no waiver, and they will do the same to the next administration in Brazil."

As goes Brazil, so goes the rest of the continent. The slide of the currency here, which lost nearly 20 percent of its value last month, was reflected in similar dips in Colombia and Chile and helped fuel a banking crisis in Uruguay. That was resolved only when the Bush administration agreed to an emergency $1.5 billion bridge loan last weekend.

The standard advice of the fund to clients facing crises has been to insist on increased austerity, arguing that fiscal discipline is a necessary precondition to prosperity. But that translates into enormous suffering for millions of people, strengthens the appeal of left-wing critics of free-market economies and weakens governments that have made the changes Washington is urging.

"It's easy at the top to say cut back on expenditures, but it is hard when you are a politician and the unemployment rate is 18 percent," said Joseph E. Stiglitz, winner of the Nobel Prize in Economics in 2001.

*************
Misetich
IMF intervention is an exercise in futility - it will fail just as the other two previous interventions in the last 4 years -
Lets stay on this TRAIL

Got gold?



a nation of one
(08/11/2002; 07:52:41 MDT - Msg ID: 82753)
silvercollector msg#: 82750
Try http://www.arabnews.com/Article.asp?ID=17648
misetich
(08/11/2002; 08:03:24 MDT - Msg ID: 82754)
Are Accounts Still Safe If Banks or Funds Fail?
http://www.nytimes.com/2002/08/11/business/yourmoney/11SAFE.htmlSnip:
By RIVA D. ATLAS


Since the stock market began its decline in early 2000, many investors have avoided Wall Street and put more of their money into what they considered to be the safe havens of savings accounts and certificates of deposit.

But with Merrill Lynch, J. P. Morgan Chase, Citigroup and some of the nation's other large financial services companies linked in the news to potentially criminal misdeeds involving companies like Enron and WorldCom, some people are wondering whether their assets are safe anywhere. What if their bank, mutual fund company or brokerage firm is indicted � or fails?

**************

Misetich

Investors will be "reassurred" by stock promotores such as mutual funds sales, investment bankers that there's no panic- that there is little danger of banks/brokers/investment banks going out of business - however investors that have listened to these charlatans over the last 2 years have seen their savings evaporate - The domino has now reached insurance companies, investment banks- a steady and unrelenting current hitting and hitting at their foundation on a daily basis
Are world economies growing, stagnating, or decelarating?

It is time for these investors to add some insurance to their portfolio - GOLD - PHYSICAL GOLD

Got gold?





MO VER MEG
(08/11/2002; 08:13:24 MDT - Msg ID: 82755)
Belgian
You are correct, silver is capped because of its long monetary history. I just love how they secretly treat it as a precious metal, but publically tattoo it as "industrial". The supply used to control the price of silver is not very deep (see recent lease spikes) and probably mined since the 1980's spoon and chandelier melting days. Fortunately, the cappers have not had the time to build supplies like they have in gold.

The reason I wrote yesterday is because I believe there is someone, somewhere reading this site that has the wherewithal to make a silver buy (or demand physical delivery) that will put silver on the radar screen. Such a buy needs to be public (get the horse out of the barn before they can shut the door) so it cannot be buried. I believe this buyer knows how to execute this buy in a fashion that will insulate themselves from unwanted government pressure. Tomorrow seems like a good day for them to pull the trigger.

As an individual, I buy for my family (talk about being early to the party) knowing the small investor will not change the market until silver hits the radar screen. Then the field will become level once again.

Belgian, thanks for sharing your thoughts.

MOVERMEG
misetich
(08/11/2002; 08:17:57 MDT - Msg ID: 82756)
European Investors Seek Out Debt Maturing in 10 Years and More
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVYfaBXURXVyb3BlSnip:

By John Beresford-Peirse
London, Aug. 11 (Bloomberg) -- European investors are buying government debt maturing in 10 years and more on signs a global economic recovery is sputtering.
............
``Data in Europe has been bad and could get worse,'' said Guillaume Sciard
.............
European consumers became more pessimistic in July and business confidence stayed at a three-month low as the Dow Jones Stoxx 50 Index has tumbled 28 percent this year. Orders at German factories fell in June.

In the U.S. -- the world's biggest economy -- growth slowed to an annual 1.1 percent in the second quarter, from 5 percent in the first three months of the year.

************
Misetich

Part of the cycle - first investors flock to stock for high returs, then the flight to corporate bonds - third "secure" government bonds and last - to GOLD - the ultimate flight to real safety

Stock markets boom has turned to bust- in Japan, Europe and US
Corporate bonds market has turned to bust - just ask the insurance companies
We are now in the flight to "secure" safety those of government bond - how secure are those? ask Argentinians,
The ULTIMATE FLIGHT IS TO GOLD - Coming Next -

Lets stay on the GOLD TRAIL

Got gold?

Trurl
(08/11/2002; 08:50:12 MDT - Msg ID: 82757)
Ideal storage place...
http://cryptome.org/usbd-eyeball.htm...for US gold after it is mined^h^h^h^h^htaken from deep storage
misetich
(08/11/2002; 08:57:49 MDT - Msg ID: 82758)
Credit Bubble Bulletin, by Doug Noland-Two Economic Postulates
http://www.prudentbear.com/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=14405Snip:
On a whim, I'll throw out Two Economic Postulates for the next 12 months: First, the U.S. economy cannot live on mortgage Credit alone. Second, economic Growth emanates in the Credit trenches with the availability of finance for the marginal borrower (telecom 1998 to 2000, lower- tiered consumer/mortgage borrower 2000 through first-half 2002). While we don't believe the economic community appreciates either, they are definitely missing the point that the marginal borrower is such a significant player. They, furthermore, seem absolutely oblivious to the reality that the Credit well is quickly running dry. The marginal corporate borrower is today out of luck, and the marginal consumer borrower may not be far behind.

We have often highlighted the role of asset-backed securities in financing economic growth, especially over the past year with the faltering U.S. corporate bond market. Recall that there were $1.1 trillion of asset-backed securities outstanding at the end of 1997. This amount then doubled to almost $2.2 trillion by the end of this year's first quarter. ABS were issued at a record annualized rate of $371 billion during the first quarter, and we expect similar numbers from the second quarter. Last week, the unfolding crisis hit the ABS market, with unconvincing signs of stabilization this week despite the stock market rally. Clearly, the list of impaired issuers is growing by the week: Conseco, Providian, Metris, and Capital One, to name a few. Household Finance and AmeriCredit and others looked poised to follow. To appreciate the acute vulnerability of the U.S. consumer sector, one should recognize the enormous role this list of aggressive lenders has played in fostering the Great Credit Bubble.

***************
Misetich

Greenspan has testified he's not worried about consumer debt- he should be

Got gold?
misetich
(08/11/2002; 09:08:20 MDT - Msg ID: 82759)
Big Risk if Bear Market Ends with Bang
http://www.reuters.com/news_article.jhtml;jsessionid=VFHSP5JLHSDTSCRBAEOCFFA?type=businessnews&StoryID=1314456Snip:
By Pierre Belec

NEW YORK (Reuters) - Be careful what you wish for. You may get it.

A much-hyped "capitulation" or "selling climax" is widely expected to herald a stock-market recovery, but it could do just the opposite.

After more than 2-1/2 years of slow-motion wealth destruction, investors are getting fed up and want to see the end of this horrific bear market in stocks. Some are hoping for a snappy, V-shaped plunge followed by a spiffy rally.

While bear-market routs have been known to end with a bang, a bone-jarring finale to the current blood-letting would probably be a disaster.
.............
"There is just too much stock in the hands of the public for this to occur," says Ray DeVoe, publisher of the DeVoe Letter. "There is over $4 trillion in stock mutual funds and the question about a V-shaped climax and recovery, if the public does decide to dump stocks, would run into the classic, 'sell to whom?"'

So the best thing that could happen in today's nasty investment environment is for the market to continue its long, drawn-out decline, interrupted by sharp rallies, until it finally develops a sustainable bottom. In other words, the worst thing that could happen is for investors to panic and throw in the towel. END WITH A WHIMPER
*******************
Misetich

"Sell to whom" - may be correct - on the other hand where are the buyers?

Got gold?


Paper Avalanche
(08/11/2002; 09:14:52 MDT - Msg ID: 82760)
@ silvercollector - re: iraq invasion
www.debka.comsnip -

US Iraq Campaign Has Its First Engagement
DEBKAfileSpecial Military Analysis
10 August: America's offensive against Saddam Hussein's regime in Iraq has begun as an exercise in gradualism rather than a D-Day drama. DEBKAfile 's military sources report that tens of thousands of US, British, French, Netherlands, Australian troops may take part in the campaign, openly or covertly, but not in massive waves that fling themselves telegenically on Baghdad.
The fact of the matter is that American military concentrations are already unobtrusively present in northern and southern Iraq. The US campaign to oust Saddam is therefore unfolding already, albeit in salami-fashion, slice by slice, under clouds of disinformation and diversionary ruses � like the latest statements by President George W. Bush (No date set yet for the offensive) and British premier Tony Blair (Plenty of time before the war begins), or the grave reservations issuing from the Russian, French and German leaders. The peasoup of deception is further thickened by utterances in the last 48 hours from Turkish prime minister Bulent Ecevit, King Abdullah of Jordan, President Hosni Mubarak of Egypt and the Saudi crown prince Abdullah. They warn Washington that attacking Iraq would be a terrible mistake, one which they want no part of.
DEBKAfile's military sources attempt here to pierce some of the thickets of confusion with a few facts on the ground:
A. Special US forces entered the Kurdish regions of north Iraq towards the end of March nearly four months ago, to set up local Kurdish militias and train them for battle.
B. At around the same time, Turkish special forces went into northern Iraq in waves that continued through April, fetching up in Turkmen regions around the big oil towns of Mosul and Kirkuk.
C. Meanwhile, the Americans threw a ring of bases � using existing facilities and adding new ones � around Iraq. They have since been pouring into those bases US armored ground units, tanks, air, navy and missile forces, as well as combat medical units and special contingents for anti-nuclear, biological and chemical warfare. According to our sources, the noose around Iraq extends from Georgia and Turkey in the north, Israel, Egypt and Jordan to the west, Eritrea and Kenya in the southwest, and Saudi Arabia, Kuwait, Oman, Qatar and Bahrain to the south.
Furthermore, a large US armada, including aircraft carriers, has assembled at three points: the eastern Mediterranean, the Red Sea and the Persian Gulf.
D. Since June, American and Turkish construction engineers have been working in northern Iraq, building and expanding airfields and air strips to make them fit for military use.

Comment:

"It" is apparently underway. This web site is good to put in your favorites if you want to keep tabs on the "second layer" of news wrt Iraq and developments in the middle east.

BTW, silver is the fuse that will set off the explosion in gold prices IMHO.

Take care.

Paper Avalanche
misetich
(08/11/2002; 09:23:02 MDT - Msg ID: 82761)
Asia-Pacific Economies To Recover In 2003 - BIS Report
http://biz.yahoo.com/djus/020811/200208111016000015_1.htmlSnip:

"Strong internal demand in most of the major Asian economies will sustain activity until an upturn in export demand from the U.S. and Europe comes through in 2003," the report said.

BIS Shrapnel senior economist Nigel Hatcher said the economies of all 14 major economies in the region are closely tied to the U.S.

"However, renewed weakness in the U.S. will have only a short-lived impact," Hatcher said.
............
"The key is investment spending, which has been through a boom and a bust in the U.S. The cycle is showing signs of bottoming, and the upturn, when it eventually comes, will provide a strong boost to Asia's electronics-dependent economies," he added.

However, the report also warned that economies depending excessively on electronics will face long-term problems, and that "a day of reckoning will arrive for banking systems exposed as flawed by the 1997 crisis and 2001 downturn."

"Major problems exposed in 1997 and 2001 remain unaddressed," Hatcher said.

"The banking systems of many countries remain weak and bank lending growth is still negative in most cases. Judgment day when the bad debt position must be realistically addressed may have been postponed, but it will come," he said.
.............
*************
Misetich

An optimistic report from the BIS re: 2003 recovery - they assume that the current global economic downturn will not create further havoc
Murphy's law says otherwise

Got gold?
misetich
(08/11/2002; 09:34:06 MDT - Msg ID: 82762)
The Plucky Buck Bucks the Trend -The greenback has bounced back from its big dip. But don't expect the newfound strength to last long, warn some traders
http://www.businessweek.com/bwdaily/dnflash/aug2002/nf2002089_2129.htmSnip:

Why the turnabout? The dollar, analysts say, is benefiting from a number of short-term effects. Once those fade, say some traders, watch out. "We think the dollar downtrend is still in place," says Stephen Hull, currency strategist at Goldman, Sachs & Co. in London.
...........
Japanese intervention has also boosted the greenback, sending it from around 116 yen to about 121 over a two-week period. At the same time, U.S. investors, worried about everything from possible war with Iraq to global growth prospects, are bringing money home, leading to big dollar purchases. And hope has surged that Federal Reserve Chairman Alan Greenspan will cut rates on Aug. 14, giving a boost to U.S. equities and the economy. "Investors think the cavalry is coming to save the day," says Rebecca Patterson, currency strategist at J.P. Morgan Chase & Co. in London. A Fed-led recovery would provide little reason to bet on the yen or euro.

How long will the dollar's strength last? Some traders are betting it will surge to 93 cents to the euro. Others are skeptical. Goldman Sachs, for instance, forecasts that record trade deficits will drive the dollar down again, to $1.08 to the euro, within six months. This wild ride isn't over.
************
Misetich
The "cavalry" did not save investors from trillions and trillions of sharemarket valuation and savings being wiped out - each time the line of defence is drawn deeper and deeper in the abyss-

Markets are inherently unstable says Soros - boom and bust cycle have to complete -
The US $ is overvalued by any standard relative to the anemic growth/recession of the last 2 years.

Japan is a financial mess - as is Latin America

Got gold?

misetich
(08/11/2002; 09:43:12 MDT - Msg ID: 82763)
Italy's government defends economic policy after weak growth report
http://biz.yahoo.com/ap/020810/italy_economy_2.htmlSnip:

ROME (AP) -- Despite weak economic growth figures, the government of Premier Silvio Berlusconi defended its running of the economy Saturday, saying that any trouble faced in Italy was only typical of Europe as a whole.
************
Misetich

From continent to continent we are witnessing a relapse in global economic growth -
The level of risk varies from continent to continent - Europe appears to be in the best shape of G3

Nevertheless it doesn't appear Europe is willing to be the engine growth that Japan and US wished to assist both of those countries out of their financial messes

Media controlled propoganda is prone to attack its opposition to put them in the 'same basket' as their own - however astute investors know otherwise -

Got gold?
misetich
(08/11/2002; 09:55:37 MDT - Msg ID: 82764)
It's the George and Alan Show!President Bush, Alan Greenspan and a cast of hundreds set to talk economics on Tuesday.
http://money.cnn.com/2002/08/09/news/economy/fed_bush/index.htmSnip:

NEW YORK (CNN/Money) - If you're worried about the U.S. economy, perhaps it will comfort you to know that more than 250 people, including President Bush and Federal Reserve Chairman Alan Greenspan, are going to be very earnestly talking about it on Tuesday.
*********
Misetich

Yep an old fashioned pep rally - reminiscent of Jimmy Carter fireplace (Not) chats during his tenure - energy crisis

Will it work? will it convince foreigners -read Europeans, who have abondoned US markets to continue and finance US debt needs?

Doubt it - though it shouldn't surprise if a "pep-rally" market ensues - as reporting season is over - and this provides a "window of opportunity" to prop up the markets-

If the anticipated "pep-rally" fails - lookout

Got gold?
misetich
(08/11/2002; 10:02:27 MDT - Msg ID: 82765)
Sir Alan and the fools -Bad timing for our noble Fed chief and our elected representatives.
http://money.cnn.com/2002/08/07/commentary/wastler/column_wastler/index.htmSnip:

NEW YORK (CNN/Money) - Now that Queen Elizabeth II has decided to knight Alan Greenspan, does he get to wear armor? Maybe carry a sword?

He needs something out of the deal. Because other than a chuckle, he doesn't seem to be getting much. Americans can attain only a sort of second-class knighthood, so the Fed chairman won't be called "sir." That's a shame. Imagine the fun at congressional hearings.

"About the latest economic data, Mr. Greenspan, ..."

"Sir Alan, if you please, Congressman ..."

But all knighthood confers upon Greenspan is the right to put "KBE" after his name. If you are going to be a Knight of the British Empire, you should at least get some armor and a sword.

They could come in handy. Greenspan's critics -- yes, there are some -- are becoming more vocal. In the grand American tradition of Monday Morning quarterbacking, some say he and his Fed cronies let the economy reach its currently sorry state by mismanaging the investment bubble that popped two years ago.
.........
Without the armor and sword, though, Greenspan's knighthood could just make him look like a pinky-raised, tea-drinking aristocrat out of touch with the common man.

Which is why this knighthood thing is badly timed. Our current economic problems are Greenspan's last test. (He's 76.) Giving him the knighthood now is awarding the trophy before he has finished the race. It is also pretty presumptuous of the British. Sure, their economy may cringe in his shadow as well, but he is OUR red-blooded American bank chief. Are they trying to cherry- pick?

Appearances can mean a lot. And the timing of this knighthood just looks bad.
***************
Misetich

Click on the URL if you're interesting in getting a laugh - Sir Alan in his knighthood suit

He's going to need it

Got gold?
misetich
(08/11/2002; 10:07:47 MDT - Msg ID: 82766)
Jack Grubman, the Salomon Smith Barney cheerleader analyst in the middle of the WorldCom scandal, suffers from bad timing too. A $100,000 donation to the Democratic Senatorial Campaign Committee two days before a high-profile Senate committee hearing into WorldCom's troubles?
http://money.cnn.com/2002/08/07/commentary/wastler/column_wastler/index.htmSnip:

Jack Grubman, the Salomon Smith Barney cheerleader analyst in the middle of the WorldCom scandal, suffers from bad timing too. A $100,000 donation to the Democratic Senatorial Campaign Committee two days before a high-profile Senate committee hearing into WorldCom's troubles? C'mon, we know what was going on. Yes, he got a grilling at the hearing, but think about how much worse it would have been if he hadn't greased the majority party's hand.

Of course, Grubman has every right to donate money. And senators need to be able to raise cash for campaigns. The big problem is that people should know about the relationships while events are taking place. Not weeks later.
**********
Misetich

Lets not forget Citi has "certified" their statements - Big Deal is their corrupt actions/intend that needs certification - Bribery? accomplice in clients falsifying their financial statements - through what they consider legal manuverous - which has lead to FRAUD of investors retirement funds

Got gold?




silvercollector
(08/11/2002; 10:54:15 MDT - Msg ID: 82767)
Paper Avalanche
I have been watching Debka.com thanks. Some have mentioned that Debka is sensationalist, sometimes difficult to believe.

Do you much credence in their reports? Do you have other sources?

TIA
silvercollector
(08/11/2002; 11:27:08 MDT - Msg ID: 82768)
Paper Avalanche, POG, POS, POO & Iraq.
Just noticed your comment on silver, "BTW, silver is the fuse that will set off the explosion in gold prices IMHO."

When I was a full blown 'silvercollector' (about 3 years ago) I was hooked on the 'silver is consumed' argument but in the recent year or so I have changed my tune somewhat. I am now the 'goldcollector'.

When silver was used in coinage it made sense that the US, for example, would hoard billions of oz's for that purpose, however since the late '60's as you know that has stopped. Over the last couple decades the US hoard has been depleted and now there is none. So what does that mean? I think it means nothing to be quite frank.

Sure, silver is consumed more readily than gold but it also much more plentiful. I now see silver as a pure commodity play, sorry. The silver price is probably kept in check
because of it's monetary association (as a precious metal) with gold.

Ask yourself a question, is the term precious mutually exclusive with monetary? Please note that Plat/Pall have no monetary aspects.

So as mentioned on this forum a few times in the past, "I collect silver as a hedge, I collect gold in case I am wrong about silver and I collect guns in case I am wrong about a) and b)". I must admit I do not collect guns because I feel at that stage nukes and missiles will be flying overhead so what use will a gun be?

I now am moving into POO as a hedge on POS & POG. I have read entensively into the Hubbert's peak theories and although I think the timing and outcome's are exaggerated
it stands to reason that future wars will come as a result of past encounters (Kuwait). I think this entire Afganistan thing is Caspian Sea related. Question: As a result of 911, why would the US 'smoke' a band of holligans in the middle of nowhere, blasting the heck out of mountains? Surely the US has larger 'fish to fry'? Who (ie:what country/countries) organized and financed the horrible operation? I am positive it was handled exclusively by a bunch of deranged mountain goat farmers turned militia in Afganistan. Who is Mr. Big?

Looking at Hussein's admission a couple months ago that he is indeed endorsing suicide bombers in Israel one has to wonder why someone (Israel?) hasn't already 'removed' him from his disgusting pedestal. Many fingers are pointing at Hussein. One last thing about him, why does the press refer to him as 'Saddam', we don't call Tony Blair, Tony?

I won't get started on the press.
misetich
(08/11/2002; 11:31:35 MDT - Msg ID: 82769)
Lawmaker seeks to subpoena Citigroup
http://money.cnn.com/2002/08/09/news/citigroup_worldcom.reut/index.htmSnip:

WASHINGTON (Reuters) - U.S. House Financial Services Committee Chairman Rep. Michael Oxley said Friday that he plans to subpoena documents from Citigroup Inc. regarding shares sold in initial public offerings that may have been bought by executives at now bankrupt WorldCom Inc.

The response to a July 23 request for documents was incomplete and Oxley wants information on how Citigroup's securities unit, Salomon Smith Barney, or its telecommunications analyst, Jack Grubman, allocated IPO shares. The panel also wants to know if Grubman's clients were given special treatment with access to IPOs, it said in a statement.
...........
he congressional committee has been probing the $7.1 billion accounting scandal at WorldCom and Grubman, who had "buy" ratings on the telecommunications firm's stock long after its financial position had begun to decline.

Grubman is under investigation by the regulatory arm of the National Association of Securities Dealers for maintaining his "buy" rating on another bankrupt telecommunications carrier, Winstar Communications, despite its deteriorating finances.

The panel had demanded records about Grubman's work, his compensation package and information about who may have purchased shares in IPOs underwritten by the financial services firm.
***********
Misetich
Citigroup thinks they can get away with all their alleged wrongdoings, conflict of interest etc. Investors in the US and worlwide have been swindled by the likes of Grubman - and its employers ought to be held responsible for his/her actions.

$36 billion lawsuits filed against Citi and JP Morgan say otherwise.

No matter the spin - investors are upset and want justice- and the REAL CROOKS behind bars

Got gold?
silvercollector
(08/11/2002; 11:38:39 MDT - Msg ID: 82770)
Mo Ver Meg
You mentioned,

"I believe there is someone, somewhere reading this site that has the wherewithal to make a silver buy (or demand physical delivery) that will put silver on the radar screen. Such a buy needs to be public (get the horse out of the barn before they can shut the door) so it cannot be buried. I believe this buyer knows how to execute this buy in a fashion that will insulate themselves from unwanted government pressure"

There was an article some years ago (possible Hamilton; see G-E archives) that Buffett, Soro's, Gates type(s) could end this whole thing with huge sustained buying. I have often wondered why this has never happened, it really bothers me on 2 counts, one is big smart money into PM's and secondly I can't think of a quicker way to get a bullet in the head than by buying massively and then boasting about it.
silvercollector
(08/11/2002; 11:49:10 MDT - Msg ID: 82771)
Mo Ver Meg
Just had a sudden thought, may warrant more thought.

Why wouldn't gold rich countries like South Africa, Russia, Australia and Canada precipitate the squeeze?
MO VER MEG
(08/11/2002; 12:41:19 MDT - Msg ID: 82772)
Silvercollector
The best play (as I see it) would be for a series of strategic silver buys that would not raise immediate suspicion, but would dry up physical supply so that regular orders would/could not be filled. The trick is to get the light shined somewhere else.

Any country indebted to the USA or holding large amounts of dollars won't likely be the buyer. It will be someone with less exposure to our control and wanting to pay us back for garbage we shoveled on them - you know what they say about paybacks.

On a personal note, I believe now more than ever, get your hands on some physical. Every ounce counts. It won't be nearly so heavy when it is worth $15.00.

MOVERMEG
USAGOLD / Centennial Precious Metals, Inc.
(08/11/2002; 14:16:20 MDT - Msg ID: 82773)
Retails in fine bookstores for $14.95 (plus tax). Order direct and save! Only only $5.95 each.
http://www.usagold.com/cpm/abcs.html

ABCs of Au by MK

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Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

timbervision
(08/11/2002; 14:18:45 MDT - Msg ID: 82774)
Belgian
Thanks again for your insightful reply. The people I was referring to have already sold their house, not to buy gold, but anticipating that we're in a housing bubble. I can see too that that is a gamble, or speculation because no one has any idea as to how long this housing bubble can be expanded. The stock markets between 1998 and 2000 are an example of how big a bubble can get. These same people bought their house in 1988 and it took them until this year to just get back to their purchase price. My concern for them is their being in cash and I've been encouraging them to get some gold.

In the end everything remains a question mark because of the problem of timing. For example could the alleged housing bubble burst before the financial house comes unglued, and allow them the chance to get back into a house at a lessor price. Is one better in gold while waiting for this eventuality? How close is Canada to Argentina? How fast would it come? Could we wake up one day without any warning to be told that the banks are closed?

I'm just musing.
slingshot
(08/11/2002; 14:20:22 MDT - Msg ID: 82775)
Siege Engine
Gold above $300.00Two days have passed. The wounded attended to and the dead placed into the earth. A strong guard placed at the entrance to the Main Hall. The words of Gandalf the White, managed to sooth the angry hearts,but he knew once inside the Main Hall amnesty may not hold.
The changing of the guard was without incident. No sounds or movement. One could believe the hall only had ghosts to defend it. The POW's were seeing the Goldbug for what he really was and not how he was protrayed. Did they not remember the arrow hitting the messenger under a flag of truce? How could one mans words hold back an avenging army?
A call to arms and the Goldbugs assembled in the courtyard. Swords drawn and shields held up as they approached the halls doors.
They pushed on the heavy doors and with ease they opened wide letting in some sunlight. They were not barred and as they looked inside could see a man seated on a throne, guarded by many Knights. Reporting this information to Sir Howe, he sent in the first group with orders not to engage the enemy unless he does first. More and more Goldbugs entered the hall. Soon a Goldbug came with a message asking Sir Howe to come inside the hall.
There was council against this. Never the less they have come this far and a few more steps may change everything.
Sir Howe entered the hall with Gandalf and Sir Black Blade at his sides.
They could see the figure seated on the throne. While they walked all thought if an archers arrow was pointed at them.

Come in, Come In, Sir Howe. A voice was heard with a slight echoe.

Steadily and cautiously the three moved forward and halted in front of the Knights positioned on the steps.

Clearly the Lord of the Castle and Sir Howe could see each other.
The Lord of the Castle stood up and spoke.


I have heard alot about you, Sir Howe. It's good to put a face with the great deeds of one man. Remarkable! You have taken my castle from me, But I assure you it is not enough to fullfil you wishes. There are many castles which you will have to overcome. Some with defenses stronger than mine.
You may be willing to do this , but will others? You could overturn every stone in this castle and you would still have to win the hearts of those who follow our cause to win.
Which I believe you do not have the will to accomplish this task. You have come to Free Gold. I invite you all to search my castle. You will find none. It is Gone.All your trouble for nothing.The Gold was moved long ago. Where? I do not know.Ask The King with No Name. He should have the answer.
Tell me Sir Howe, Do we control what we think we control?

The Lord of the Castle ordered his Knights to put down their swords.

The Lord of the Castle again asked, To the Gallows, Sir Howe?


Sir Howe spoke. Afford these Knights the same terms as the others. Put this one in irons and under heavy guard. Let no man harm him.

The Lord of the Castle was taken and placed in irons. His castle was in the hands of the Goldbugs.

That night around the campfire Sir Howe, Gandalf the White,Black Blade, Another and FOA thought about what the Lord of the Castle said to them inside the hall.It would be a long night.
Blackjack
(08/11/2002; 14:52:17 MDT - Msg ID: 82776)
"We feel it imprudent to certify the books at this time!"
NEW YORK (Reuters) - It was one last piece of bad news Alan Wright wanted to share with investors before he left embattled power company CMS Energy Corp. CMS.N

After more than a decade as chief financial officer, he couldn't vouch for the accuracy of the company's financial statements.

"Under these circumstances, we feel it imprudent to certify (the books) at this time," Wright told investors last Wednesday. Wright, who will leave CMS later this month for a job outside the energy business, then thanked his listeners for their years of support.

The government, in a bid to restore investor confidence after months of financial scandal, has mandated that top executives from nearly 1,000 major companies sign a statement attesting to the accuracy of their results. Expect a flood of filings in the coming days -- just 11 percent of companies have certified so far, ratings agency Fitch said on Friday morning.

But don't expect the deadline to be met by every company in the energy sector -- scene of the Enron Corp. ENRNQ.PK debacle and home to some the most notorious cases of misleading financial statements.

CMS Energy doesn't plan to sign off until it can restate two years of results to account for more than $4 billion worth of sham trades. The power company is among the hundreds of corporations that have not yet attested to the accuracy of their books ahead of an Aug. 14 deadline set by regulators.

Two other prominent trading firms, Dynegy Inc. DYN.N and Mirant Corp. MIR.N , also have expressed doubts they can certify their books on time. AS a result, there could be still more of an erosion of investor confidence in the battered power trading industry.

"Any company that didn't work overtime to meet that deadline is a fool," said Duane Grubert, a financial analyst at Bernstein who covers utilities.
__________

Still can't certify books? huh? Its been many moons since
Enron broke and......what have they been doing? Maybe the books
are so bad they just can't tell the truth. Period. Corporate
America is looking pathetic. If they can't certify books after
a year of heat.....these companies should not be listed on any
reputable stock exchange.
Paper Avalanche
(08/11/2002; 15:34:58 MDT - Msg ID: 82777)
@ silvercollector - re: silver as commodity or money
Greetings silvercollector. I too have shifted my focus from accumulation of silver to gold. I still have a sizeable position in silver and have not liquidated any of my silver for gold, however I have endlessly wrestled with the issue of silver as a viable safehaven during impending hyperinflation. I have closely examined the arguments postulated by both FOA/A/TG and Ted Butler. After much thought, I believe that the mistake that I made in my personal analysis of the issue was in trying to apply the same "monetary vs. commodity use" argument to both gold and silver in equal fashion. To that end, I believe that while both PM's are manipulated in much the same way by TPTB on the COMEX and other exchnages, the investment potential for silver still remains. I think that different factors will affect each metal differently:

Gold - an alternative to the hegemony of the dollar
Silver - supply and demand

I agree with FOA/A/TG that silver is not the quintessential store of wealth as gold. However, I cannot remove from my analysis the quote from Alan Greenspan that "the laws of supply and demand cannot be conned." Given that there literally exists (based on what information I can obtain) roughly ten times the amount of above ground physical gold in the world as there is silver, then I am further inclined to believe that when gold does reach stratospheric levels in the near future that silver will once again reach a sort of natural relationship of 15:1 with gold. A $5,000 price of gold would then imply a $330 price for silver in such a relationship. I further realize that my folly potential lies in denomiating such prices in FRN's. I believe that the US and Japan will have new currencies in the not too distant future once the world decides that the dollar hegemony is no longer viable in light of competition from other currencies or PM's. I do not think that the revamping of the US currency notes is coincidental. I am still trying to figure out what will become of that. I am tempted to believe that we may one day wake up and be back on a gold standard of suchs, the implication for the personal ownership of gold or silver unknown.

If we are to beleive, as I do, that the day is quickly approaching when all paper will burn, I would think that the world may embrace a bi-mettalic currency system of digital gold and silver. I cannot envision a scenario where gold approaches $1,000 and silver sinks to $3.00 or remains unaffected.

If the price of silver, whether in current FRN's or some new currency issued by the US, is simply a function of it's commodity value, then I am comforted by the numbers that I have discovered regarding the true scarcity of the metal as described by Ted Butler et al.

I would think that silver may be the best vehicle for future physical gold accumulation if gold goes to $1,000 and silver simply goes to $50 per ounce (both prices reflecting the inclusion of a premium for physical over the paper contract price). In such a case, I anticipate being able to convert my silver to gold at a "conversion profit" in as much as silver will appreciate relative to gold more quickly than FRN's. IE, in the above scenario, I would then be able to exchnage a ten fold gain in silver for a three fold gain in gold.

I do not know if this line of thinking is reasonable or may provide me with the gains that I anticipate. I am but a hobbit who owes to this fine forum a debt of gratitude that can never be repayed for an eductaion that could not have been obtained any place else. I hope that my ramblings are somewhat cohesive and have some semblance of sense. I continue to wrestle with this question every day. Until the future reveals itself, I will contune to accumulate physical gold to add to my PM stash of silver. I look for both metals to serve me well as we embark upon the darkest of the winter months during the Kondratieff cycle.

Please let me know what you think. I lurk and occassionally particpate on this board because I do not have the answers to these questions.

Take care.

Paper Avalanche
Gandalf the White
(08/11/2002; 15:35:45 MDT - Msg ID: 82778)
Sir Slingshot's "Seige Engine Serial"
slingshot (08/11/02; 14:20:22MT - usagold.com msg#: 82775)
Siege Engine
===
WELL DONE, Sir Slingshot !
We await your deep thinking of the next Serial effort.
Perhaps the Ladies will have a PLAN !
Ay Lady Waverider ?
<;-)
Paper Avalanche
(08/11/2002; 15:55:28 MDT - Msg ID: 82779)
@ silvercollector - re: debka.com
Off topic, I also agree with you that Debka is often sensational in it's presentation of the news from the middle east. I try to be mindful of the fact that it is an extremely pro-Isreal website and, as a result, may present facts or news stories in such a way that may be biased. Do you know of any other sites that offer comparable and possibly more objective news content wrt the middle east? I have been too lazy to dedicate too much time to such analysis, but I try to relate the POO issue back to gold from time to time and find myslef cheking the debka site for lack of an alternative.

TIA

Paper Avalanche
Aristotle
(08/11/2002; 16:29:08 MDT - Msg ID: 82780)
Nuclear reality
Hello Sir Paper Avalanche!

I've greatly enjoyed a great many of your posts, so all the more reason for me to chime in on this latest one, just to ensure that you don't run into a reef instead of sailing smoothly along.

A number of very vocal silver buffs have unloaded some of their garbage on the world, and I'm somewhat distressed to see that you've taken some of home with you. You said:

"Given that there literally exists (based on what information I can obtain) roughly ten times the amount of above ground physical gold in the world as there is silver..."


In the interest of literal and technical accuracy, let's review the following.

It is a fact that silver is more abundant than Gold in the elemental makeup of the earth's crust, and as a simple consequence, it has been extracted in greater quantity throughout the course of our mining history.

It is also a fact that atoms (iron, copper, silver, Gold, or whatnot) cannot actually be destroyed short of nuclear reactions -- and they haven't been packing tonnes of silver in the Big Ones for testing purposes.

As you might well imagine as a consequence of all that, there is definintely more above-ground silver than there is Gold. As with any particular form of atom regarding commercial availability, its just a matter of logistics to gather and mobilize the stuff as it exists in is various places and forms to feed it into the auction block.

To be sure, there's not nearly as much above-ground Gold as there is silver. Rumors to the contrary need to be rebuffed as the disinformation it is.

Gold. Get you some. --- Aristotle
mikal
(08/11/2002; 16:30:45 MDT - Msg ID: 82781)
@Paper Avalanche
Here are a few that are reasonably balanced, IMHO. There are many more I have not accessed. -www.arabworldnews.com -www.uaenews.com -www.arabnews.com -www.gulfnews.com
Aristotle
(08/11/2002; 16:52:28 MDT - Msg ID: 82782)
birds of a different feather
More for Paper Avalanche. You said:

"I cannot envision a scenario where gold approaches $1,000 and silver sinks to $3.00 or remains unaffected."

Put yourself into the shoes of Father Time -- been every where, seen every thing.

There was a day long ago when you said, "I cannot envision a scenario where a barrel of black and stinky crude oil approaches $30 and horse blankets are mothballed, buggy whips useless."

I think if you try a bit harder on that first account, you can indeed envision it.

You see, the world is just not very likely to pay a premium for a redundant asset. Gold above $1,000 carries with it a certain economic implication in which silver would simply be seen as a fish out of water if it tried to tag along at the same game. Silver is fundamentally more at home keeping company with copper, aluminum, tantalum, germanium.

To be sure, supply and demand will drive them all (Gold included) but the key point to focus on (for anticipatory investment reasons) is the REASON behind the demand in each of them. This is where my comment on redundancy plays its part.

Gold. The right tool for the right job. --- Aristotle
Paper Avalanche
(08/11/2002; 16:53:49 MDT - Msg ID: 82783)
@ Aristotle - good points
Greetings Sir Aristotle!

Your points are well made. I must agree with you that there does exist a proportionately greater amount of silver in existence in the universe than gold. I would further expand upon your points that those who hold silver must recognize profit opportunity vs. wealth storage. The two are similar yet different IMO and those of us who have made the decision to accumulate both need to understand the subtlety of such a difference. Gold is the ultimate storage of wealth. I have accepted such as reality. However, this fact does not unilaterally remove the potential for profit from any other vehicle save gold. I have accumulated silver in anticipation of profit once the manipulation of silver has been broken in concert with gold. I purchased silver to sell at a future date. I purchased gold to be the ultimate store of the fruits of my labor. I do agree with the conflicting arguments of both FOA/A/TG and Ted Butler. IMHO, silver will provide an intermediate profit as the world embraces a new golden reality and I, being a creature seeking to continually improve my situation in life, am not above trying to make a profit in something other than gold.

BTW, I would welcome any specific reference of silver buffs who are dumping this trash. I would further invite you to provide any verifiable statistics of the plethora of such trash being so readily available for delivery as to short circuit the laws of supply and demand.

Best regards,
Paper Avalanche
Paper Avalanche
(08/11/2002; 17:06:59 MDT - Msg ID: 82784)
Taking it a step further
OK, lets assume that all paper burns by the close of business tomorrow and gold is now the chosen money of commerce worldwide. The fact that gold has unseated fiat paper does not preclude the market forces that drive the price of any commodity, silver, oats, oil, etc. These commodities will command a price, in whatever monetary denomination, whether FRN's or grams of gold, proportionate to their relative scarcity and demand for use, even if such use is industrial in nature and not moentary. To that end, if we find ourselves trading goods and services in grams of gold in a few months, the scarcity of any commodity will increase it's price in that new money.

Again, I believe that the argument that gold will be the new money in the future does not mean that the forces of supply and demand are solely remnants of the old fiat system. The forces will be the same, only the denominations of the money used to purchase said commodities will change. Silver could have zero monetary roll when paper burns, but it's scarcity will remain until market forces make it economically viable to increase the mining of silver. At the moment it is an uneconomical venture to mine silver at these prices, albeit in dollars.

IMHO.

Paper Avalanche
Aristotle
(08/11/2002; 17:15:35 MDT - Msg ID: 82785)
PA
Regarding your "BTW" it would seem you misinterpreted my remarks. The "garbage dumping" I was referring to was not of the metal but of the misinformation about silver existing in smaller amounts than Gold above ground. It was by repeating it that you "brought some of it home" with you.

Gold. etc. --- Ari
Blackjack
(08/11/2002; 17:16:15 MDT - Msg ID: 82786)
US Airways files Chapter 11
ARLINGTON, Virginia (Reuters) - Struggling US Airways Group Inc. U.N on Sunday said it filed for Chapter 11 bankruptcy protection, allowing the sixth-largest U.S. airline to complete a restructuring plan and continue to run flights without interruption.

The Arlington, Virginia-based carrier, which filed for bankruptcy protection in U.S. Bankruptcy Court for the Eastern District of Virginia, listed assets of $7.81 billion and liabilities of $7.83 billion, and said it aimed to emerge from bankruptcy in the first quarter of 2003.
Operative
(08/11/2002; 17:18:18 MDT - Msg ID: 82787)
@ Paper Avalanche
http://www.csis.org/Worth adding to your research links.
Blackjack
(08/11/2002; 17:40:07 MDT - Msg ID: 82788)
Troubling times for Saudi Arabia
http://news.bbc.co.uk/1/hi/world/middle_east/2187300.stmKing Fahd's health is failing, the economy faces massive problems, al-Qaeda is stirring inside the country, the Americans want a war with Iraq next door.

And now, Saudi Arabia has been described by a respected US think thank as "a sponsor of terror at all levels" - could things get any worse?

Unfortunately for the Saudis, they probably will.

The country's biggest problem is the economy - there simply are not enough jobs to go around.

A huge portion of the national budget is swallowed up by civil service salaries, often for people who put in two hours work a day in token jobs that contribute little to the economy.

Meanwhile, oil revenues are shrinking in real terms, while the population is growing at nearly 4% a year.

Power struggle

Against this backdrop, there is a hidden power struggle going on between the senior ruling princes.

And the country as a whole is being pulled in opposite directions.

Liberal-minded professionals want to see it open up more to the rest of the world, but many religious conservatives would like it to shut its door to the West.

In recent weeks, the Islamists have grown bolder, openly voicing their hatred of America and its policies.

For the ruling al-Saud dynasty that must contend with all these problems, there is one consolation: they have no obvious rivals for power.

As much as people grumble about the extravagance and corruption of some of the thousands of princes, there does not appear to be any coherent plan to overthrow them.

But in the absence of any serious reform, that could change in the future.
____________
Like a few princes died just recently in mysterious circumstances.

The backlash against the US in Saudi is growing after the latest
news scandal. It is reported in the ME that the US is considering
breaking Saudi in two....taking the oil fields in the East and leaving
the western part with Mecca and Medina. It is reported that this
was discussed at a US security conference. The oil fields in the East have a majority Shiite population. The West,including Mecca
and Medina are Sunni areas. There is a spreading boycott of US
goods in the ME, growing hostility to US and the West. Not looking good for future US relations with Saudi after King Fahd dies.
Paper Avalanche
(08/11/2002; 17:41:15 MDT - Msg ID: 82789)
Sir Aristotle
My apologies for having mis-interpreted your remarks. I do enjoy having spirited debates with you!

PA : )
Belgian
(08/11/2002; 17:50:31 MDT - Msg ID: 82790)
@ Sierra Madre # 82747.......A NOT so touchy suggestion regarding Gold.
Don't you worry Sir : PEOPLE HAVE NEVER EVER REJECTED GOLD !!! They are dis-oriented. That's all.
More Gold is consumed (hoarded) than newly mined. Germany issued, recently (2000-?), a Gold coin and 11 tonnes was sold within hours. W've gone through this before, but let us attempt to do some finetuning on this issue.

The major bulk of the individual savings/investments is capped (encapseled) into the 1001 different "funds".
Fund to be defined as a "confetti-pool". Funds, creating that virtual perception of safety, for the confetti-providers, through diversity. The average modal investors and the selfproclaimed, sophisticated, biggies are trapped into the downwards spiral of the fund's valuations. Funds financially, dared to do what the average investor would never have ventured. Create and participate into a never ending paper-bubble with systemic hyper over-valuations. Funds, exponentially, growing in numbers and confetti-power, marched in "lockstep" on knight Allan's irrational IRs dirigism. IRs, declining to 4% (USTB-10 yrs) and probably lower, to remain there for as long as possible...are only possible UNDER THAT OLD GOLD STANDARD PRINCIPLE !!! And we are supposed not being on a goldstandard.

Low IR stability with an "interventionist" SUBSTITUTE for Gold standard (POG-cap) is a nice piece of artistry. This, in an economical environment where "meritocracy" (to merrit) has almost completely disappeared.!?

The, in lockstep, confetti pools, are trying to unwind all those bubbles that were so easely created for the average (consumer) and sophisticated (the rich hedgefund poolers), financial participant. Their dis-orientation (from Gold) was succesful and numerical rewarding (financial profits).
Now, the "unwinding" is under management. And that's another onion to peel. Climbing is much easier and relatif safer than coming back down. Try it yourself. The risk of an accidental sharp fall is highly probable (inevitable). The IR cushion is installed, but is rather a trap than a safety net. Because IRs can't stay low in a global contracting real economy and the ever increasing debt-problems (repeated ad nauseum). The gigantic confetti pools of different plumage, are...trapped.

Funds are not allowed to take physical Gold in their portfolio. Fiat money must leave those funds for bullion investment uptake. Funds will never play the japanese housewife's role. Reason why is another story.

Therefore, Fund's money must go back to those who provided that money in the first place. And here it is that the relatif intelligent/independant, investor/saver, might shift to the Physical (not in lockstep). Gold-Funds might initiate the rising POG attraction (thanks !). The previous lockstep cadans will be broken and make place for refuge reflexes. The game-over and TINA effect (there is no alternative). No dollar/IR/SM/cah/bonds, or any other alternatif but Gold. I do remember the eighties as if it were yesterday. Those were the days that rapid rising IRs, indicated, hyperinflation and fiat destruction. Nobody wanted those bonds yielding 15% for the next 10 years. Everybody scrambled for the precious physical in possession (x 25). There it was already decided to sideway the hyperinflation into that enormous financial bubble (paper asset inflation), called stock market. The derivative industry proliferated as to boost (turbo) the momentum. This resulted in the rise (and fall) of the CISCO's still valued (billions,with -b- of shares), today, at 46 times earnings (and what kind of earnings-?).

Who wants to take his money *AKA LOSES* out of the SMs, with no alternatif at hand and Gold dis-oriented !?
A very painful, psychological, proces indeed for all those who continue to lose. They unfortunately will retreat (take their loses) at the ultimate bottom of the unwinding bubble. The only ones who profited from the whole bubble affair are the issuers of the paper and the bubble organizers. The rest is sheer illusion.

The past irrational exhuberance cannot be restarted or orderly unwinded up until it has bottomed for real. It is in this evolving proces that you will see that people will always recognize Gold's integrity, value and quality.
Thanks for bringing it up (again) Sierra Madre.
Aristotle
(08/11/2002; 17:57:16 MDT - Msg ID: 82791)
PapAva (#: 82784)
The "Gold as money" nature of your response has me a bit worried that you've assumed this to be the end scenario on which I'm trying to justify my remarks about a coming separation in the fate of Gold and silver.

Let me set the record straight, if necessary. I am not making any manner of argument that Gold will somehow, someday return to function as money in replacement of our notional system.

People will demand Gold due to the nature of money being all papery and weak like it is and always will be to greater or lesser degree through time. The Gold price will be dictated by this physical demand and by the market's marginal opinion (or need) for the currency being quoted in the price.

Silver in this reserve asset (savings) capacity would be largely redundant, as would use of any other additional physical asset class. That isn't to say some people won't try to make a go of it. That's why they call it a learning "curve" and not a learning "wall."

Best of all, this isn't something that anyone has to take on my say so. The evidence is in the world at large, the history, and the times we are living through. All that is needed is an unbiased eye through which to have a look 'round.

Gold. G.Y.S. --- A.
R Powell
(08/11/2002; 18:05:48 MDT - Msg ID: 82792)
Aristotle // PA // silver supply
Perhaps I might add some information to clarify the gold versus silver supply question. Those stating that there is more (many times more) gold available than silver are speaking of metal in market acceptable, deliverable form. Certainly there is more silver than gold if one counts all the knives, forks, spoons and tea sets in the world. However, if an industrial user orders silver, they won't be very happy receiving silverware. GFMS estimated between 300 and 500 million ounces of silver as the total available world supply at the end of last year in deliverable form. I would guess the tally of existing gold is also limited to verifiable supply in an acceptable form. These numbers do not include jewelry, coins or secret stashes.

The existing supply of any saleable item includes that which is ready for market, to be handed over to a buyer. This supply does not include that which once was, that which might be or that which is in another form. Yes, there is metal of all kinds in other forms. It is not a market force (available to satisfy market demand) until the metal price reaches a point where collection and reshaping (melting, refining and repouring) become profitable. I believe most of those silver analysts who have stated that there is more silver than gold available now have been very responsible in stating that this refers to deliverable form. This is not disinformation.
Rich
Blackjack
(08/11/2002; 18:14:42 MDT - Msg ID: 82793)
More on Saudi instability
http://www.sbpost.ie/story.jsp?bottomadvert=/common/adverts/bottom/null.jsp&rightadverts=PersonalStandard&rightnav=/common/navs/right/sponsorsnav.jsp≤ftadverts=&advert=/common/adverts/top/homepage.htm&title=Front+Page&story=WCContent;id-53303&list=While presenting himself to the West as a bulwark against extreme Arab factions in the region, Fahd increasingly ceded control of the country's schools, mosques and daily life to the Ulema and the mutawa'een (religious police).

In return, the Ulema ignored the excessive lifestyles of the royals, infamous for their drinking, gambling, spending and use of prostitutes.

The al-Saud family felt obliged to pump billions of dollars into fundamentalist schools and academies or madrasses in Saudi and Pakistan. That investment might ultimately prove the downfall of the regime.

Hotbeds of anti-American, anti-Semitic and anti-Western philosophy, the madrassas produced thousands of Koranic specialists, with no other skills, who were prime recruits for fundamentalist experiments such as al-Qaeda. These disenfranchised youths, angered by pro-American Saudi foreign policy, are now regarded as the biggest threat to the House of Saud.
_____________
Please click on link and read the entire article. Its a great article
on whats happening in Saudi Arabia. Its a bit lengthy to post as some may not be interested. Also.....someone posted on another board that they just got their new edition of Smart Investor and it has a picture of a gold bullion bar on the cover....
can anybody confirm this?
R Powell
(08/11/2002; 18:20:41 MDT - Msg ID: 82794)
sector
Hey, guy, can I ask you if you can explain what the .77^2 regression line is that you mentioned yesterday (82744). It sounds technical. Can you tell me what it is and what it means in terms I can understand? I'll try to grasp it, honest!
Thanks
Rich
Aristotle
(08/11/2002; 18:26:59 MDT - Msg ID: 82795)
RPowell -- disinformation
I premptively tried to address the gist of your comments in my earlier post where I said, "As with any particular form of atom regarding commercial availability, its just a matter of logistics to gather and mobilize the stuff as it exists in is various places and forms to feed it into the auction block."

A person will ignore a knife (or spoon, fork) at their own peril.

Rare Gold. Get you some. --- Aristotle
Boilermaker
(08/11/2002; 18:32:34 MDT - Msg ID: 82796)
MK's Manifesto
I feel compelled to toss my two cents into the excellent set of postings that was stimulated yesterday by our host's "Manifesto". Mike has a terrific sense of sorting out what's important and CPM's mission, ie.,
"The real position of USAGOLD -- as I said earlier is not political -- but economic and financial. We believe that ALL portfolios should be diversified with gold, but we know only a small segment of the population will understand the connection between gold, wealth-earned and wealth-saved."

I agree that MK's business of CPM would be treading on dangerous turf if it were to espouse a political line that would be immediately perceived as anti-American by TPTB. However, As a US citizen, I am firmly convinced that my freedom is more valuable than my wealth. This forces me to make political judgements. The entrenched financial/economic powers that are corrupting our economy and our savings will be inclined to corrupt our freedom and confiscate our wealth when their plans go astray. The morality of both political parties vis-a-vis the Constitution will fall below the threshold of what I believe is needed to maintain the viability of this nation.

I expect that a historian could cite the litany of events over the past 200 years that have brought us to this moment at the edge of the cliff. The herd is thundering towards the cliff and most are blinded by the dust or not even looking. Goldbugs have seen the abyss and have pulled aside. Perhaps this is the proverbial "thinning of the herd". We goldbugs will be survivors and we should be prepared to promote the process of restoring the nation's
heritige spelled out in the Constitution. If there's any truth to the saying "they who have the gold will make (or influence) the rules" then we must be ready to become political and let our voices be heard. We must support organizations such as GATA and encourage them to step into the political arena. If we don't then our wealth will always be a knock (or boot) on the door from confiscation.

Operative said it very nicely in his "America at the Threshhold" post #82732 "Were it that the battle for survival consisted only on a monetary plane. A simple return to the gold standard might avail much. This modern age of massive/excessive consumption/debt
could readily stand for some moderation. However, the larger struggle appears to be more about this great country and the freedoms we once had. It was not our richness nor bank accounts that made us great. There have been other lands who acquired great wealth but sorely lacked the freedom/justice that only America could provide. It was through freedom that we have prevailed for 200 years through both good and bad economic times. Today, our country's path is intersecting financial, moral, and constitutional crossroads".
amen brother

Finally, after all that said, this is not the forum to become political in deference to our host's expressed request.
Blackjack
(08/11/2002; 18:51:13 MDT - Msg ID: 82797)
Dollar has biggest drop in more than 2 weeks
Tokyo, Aug. 12 (Bloomberg) -- The dollar weakened for a second day against the yen on speculation Federal Reserve policy makers will leave interest rates unchanged, disappointing some who are calling for a rate cut to boost the economic recovery.

The dollar fell to 119.71 yen at 8:45 a.m. Tokyo time from 120.16 in late New York trading Friday, when it had its biggest loss in more than two weeks.

``People bet on the dollar's rise on expectations a rate reduction will help U.S. stocks,'' said Noboru Hayakawa, a foreign exchange manager at Mitsubishi Trust & Banking Corp. ``Waning anticipation of a rate cut will hurt the currency.''

Analysts said gains in the dollar and the Standard & Poor's 500 stock index last week were fueled in part by speculation the Fed will lower interest rates soon.

The dollar fell Friday, paring its weekly gain, as expectations slipped for a rate cut by September. Only one of the 22 Wall Street firms that trade with the Fed predicts central bankers will cut its target lending rate from 1.75 percent when they meet tomorrow.
_______________
They don't have a clue.


Leigh
(08/11/2002; 19:03:14 MDT - Msg ID: 82798)
Aristotle
Appreciate your imaginative sign-offs. How about a "mate" for "Gold. G.Y.S.??"

Gold. G.A.L.S. Get a lot swiftly.

Best wishes to you, Aristotle.
R Powell
(08/11/2002; 19:23:08 MDT - Msg ID: 82799)
Aristotle // silver versus gold supply
Concerning silver's availability being "just a matter of logistics to gather and mobilize the stuff as it exists in various places and forms to feed it into the auction block." This is true of anything if money is no object. Anything that exists from gravel to caviar can be gathered, processed and fed into a market but cost and time are usually considerations involved with the process. I would add money to your list of necessities to bring silver to market. This will not happen at current prices.

That silver which now exists as silverware or jewelry will become available only at a much higher POS and even then will require time to be transformed into deliverable form. A great deal of silver was thus reintroduced into the market during the 1979-1980 period of high POS. It is now gone. How high prices need to go and how long the process will take remain to be seen. It will not happen quickly enough to detract from extreme price rationing if yearly demand continues greater than yearly supply. Yearly supply numbers do include recycled silver mostly from photographic waste. There is still a shortfall as has been the case for the past 12 years.

The normal forces of supply and demand cause reduced production and low prices when supply is greater than demand. Demand greater than supply causes higher prices and stimulates production. Supply of a mined product takes years to increase as opposed to most manufactured goods or grown commodities which can be increased in a year or less.

For whatever reasons or intentions, silver like gold has not responded to these normal market forces. When the yearly demand for silver simply exceeds ALL existing supply available AT THAT TIME, then the POS must rise to ration out whatever supply remains. In this sense (market available silver) is at a severe premium. Also, in this sense, there now exists a far greater supply of gold than there is silver. Herein lies, imho, the biggest difference between silver and any other product or commodity in the world. Existing supply available at current low prices is almost gone! Immediate need is never satisfied with promises of delayed delivery. Total worldly amounts mean nothing when there is none now available. What cares the drowning man how much oxygen there is in the world when he is ten feet under water without air?
Rich

DOWNUNDER
(08/11/2002; 19:57:59 MDT - Msg ID: 82800)
GOLD & SILVER - - BOTH PRECIOUS METALS !
http://www.financialsense.com/editorials/morgan052902.htmANYONE who has not yet read : "The Smartest Money" & who is interested in statistics on Silver & Gold supplies should get to the above link for a very worth while read.IMHO
-----------------------------------------------------------
After reading the earlier posts today my own two bobs worth is that both silver & gold are going to have rocket rides. It's just the timing that's not clear!

No one can state with accuracy that silver will not follow gold --or vise versa.Centuries of history say that the 2 metals have a definate correlation & egg on face may be the result of divining othewise.

I don't know what the outcome of the present manipulation of both metals will bring.However it seems a low risk play to be invested in both, as it's hard to see much downside. This is especially true if one invests in the physical & can sit out the manipulations.The recent rocket ride in the silver stocks suggests that others feel the same way.I invest in both gold & silver based on extensive reading which suggests that both are a great place to be in these troubled times. Go gold --- Go silver!
silvercollector
(08/11/2002; 20:04:24 MDT - Msg ID: 82801)
Paper Avalanche
For a moment I thought I was thinking aloud as I read your post, hmmmm.

Your post is eerily a relection of my actions and thoughts.

From yours:

"Gold - an alternative to the hegemony of the dollar
Silver - supply and demand"

I add a third, possibly you have ventured into this arena?

PM stocks: an avenue to leverage fiat so as to accumulate more of 1) and 2) above. (physical)

It is most interesting to witness the calm yet vigorous debate of gold vs. silver when I believe that the two, based on fundamentals are not all that related. Sure there are parallels but the debate can be stretched to precious and base metals if one was most ambitious, yes?

I love the debate of silver in the earth at a ratio of 20:1 (w/ gold) and the estimates of historical accounts of the gold/silver ratio at 16:1. Then it carries to supply/demand and available supply and 'deliverable' supply' and yadda, yadda, yadda.

I am not a mathematician but I see spot gold/silver at some 60:1 at this moment in time, one could argue this blue in the face couldn't they. Silver is undervalued, silver is history, pick your poison. Kind of like the S&P, bull or bear? Ha, ha. S&P in 6 months, 600 or 1000, place your bets.

You see if I knew, I wouldn't be here! Neither would the others.

So let's say I have 100k in each of POO, POG and POS. Let's imagine I lose all in 2 or 3 of my bets and the third is a 10-bagger, I win and I take my bat and ball and go home. The singleton MUST be bang on or he goes home empty handed.

I like the POO, POS, POG 'hedged' bet. Economy strengthens, war, paper-burn, inflation etc. The only caveat might be continuing deflation/stagflation. Might not be a winner of any sort in that enviroment.

Good luck!




Black Blade
(08/11/2002; 20:21:40 MDT - Msg ID: 82802)
Re: Blackjack msg. #82797

Just another salvo in the "Currency War" maybe? The Yen and Euro have fallen on a lot of selling foriegn currencies and and buying of the US dollar. Yet the recents losses on Wall Street and the low interest rates on US bonds have foreigners running for the exits. The recent 4 day rally in the stock market and rise in the dollar are expectations of a rate cut (especially after the Lehman report). Suddenly that rug could be pulled out from under those grand expectations. The markets could lose confidence if the rate cut does not materialize and the markets (and dollar) could tumble even more. This will lead some funds to seek out safe havens such as precious metals. If the rate cut does materializes then say goodbye to the last vestiges of the "Gold Carry Trade" leading to yet another plus for Gold. It's a "win-win" situation for Gold. In other words "Check Mate".

- Black Blade
sector
(08/11/2002; 20:33:51 MDT - Msg ID: 82803)
@R(ich)Powell on the .77R^2 Regression Trend Line for LBMA Silver
It isn't "Technical Analysis"...I PromiseLBMA Silver volume is falling. LBMA Gold is too.

Some months fall more than others so over a long period of time a straight line can be drawn that is equally distant from all the points on a chart...the "Best fit" linear regression trend line. If the points are all very close to the line then the R^2 value is very close to 1. If the points are all over the chart then the R^2 value is close to zero. In order for a regression to be meaningful, to indicate a correlation, the R^2 value must be at least over .5 and even better if it is over .75.

[The regression line is NOT a "Channel" between high and low points on the chart...the so-called "Support and "Resistance" lines.]

Linear regression is a fundamental platform of all statistical science. Cosmology [The age of the universe], birth rates of nine toed frogs etc.

Forecasts can be made from linear regression trends IF the underlying dynamics have not changed...a BIG IF in the case of a manipulated market in precious metals. The forecast is a simple extension of the linear trend line forward in time. If howevr, a mountain of silver appears out of the blue from some massive European stash hereto fore not tapped, then the dynamics will have changed and speculating gets tough.

So, the linear regression for LBMA silver has an R^2 value of .77 (A pretty good value but .9 would be better) and the extended linear regression trend line intersects zero in the first quarter of 2003. This means the selling source of silver used to supply the LBMA will be exhausted in Q1 2003 IF there is no change to the underlying market pricing dynamics...in other words the pos doesn't rise appreciably to lure more silver sellers.

Of course, markets are VERY good at smelling trouble and launching speculative attacks so the demand side of such an attack is likely to PRE detect the approaching exhaustion and a slight upward move in volume may occur...this may be the "Last gasp" for cheap silver.

Obsfeldt, a muckety-muck at UC Berkeley Economics and the NBER [National Bureau of Economic Research] and a published gold luminary, warns that at the moment of final exhaustion of a limited resource thereafter a new "Equilibrium price" will prevail. What he means by this is there will be NO TIME to make your mind up about buying gold or silver or peanuts or any other exhaustible resource during a speculative attack. The trading pattern will move gradually down then pop up in a big way, in an instant. "ALL the remaining stocks of the resource will be acquired in an instant" is a quote from Obsfeldt's study of Currency Crises and the outcomes of their defenses.

The coincidence of currency redesigns in the US, Japan and the pending exhaustion of LBMA silver is too pretty to pass by. The "Dots" are dancing.


Horatio
(08/11/2002; 20:58:14 MDT - Msg ID: 82804)
Silver
Don't count on there being a lot of silver around to melt down when the price rises.Those silverware and candelabras
were produced in an era when it was fashionable.The last silver price explosion drew much of that out of weak hands and some of it from strong hands by thievery.Since then I doubt it has been replaced by demand for silverware or ornimental objects made of silver.I just don't see it.The next explosion in silver will not have a reserve of supply from untapped sources like the last one.
Black Blade
(08/11/2002; 21:10:36 MDT - Msg ID: 82805)
If Fed doesn't trim rate, market may be disappointed
http://www.boston.com/dailyglobe2/223/business/If_Fed_doesn_t_trim_rate_market_may_be_disappointed+.shtml
Many analysts, however, expect committee to make no change

Snippit:

NEW YORK - All eyes will be on the Federal Reserve this week to see if it delivers a much-debated interest rate cut after anticipation of a move sparked rate-cut fever and a blazing rally on Wall Street. Investors will likely be treading carefully in coming days amid a slew of potential minefields and nagging worries about corporate corruption, all of which could make the market ripe for a pullback after some stellar gains. ''It's been a pretty impressive rally,'' said Rich Nash, chief market strategist at Victory Capital Management. ''We're going to have to give some of this back.''

Black Blade: Yep, looks like an "interesting" and "entertaining" week ahead.

Waverider
(08/11/2002; 21:15:13 MDT - Msg ID: 82806)
Gandalf the White
Lady Waverider returns from the mountains to find that the The Great Wizard seeks a plan from the Ladies of the Court. Most certainly - but the Ladies require some time to strategize...to consult the wisdom and military genius of Sun Tzu...it shall be forthcoming Sir Gandalf and most certainly to your and Sir Slingshots satisfaction...
Blackjack
(08/11/2002; 21:19:14 MDT - Msg ID: 82807)
Does look like a win-win situation for PM
RE : Black Blade message #: 82802Last week the market seemed to be factoring in a rate cut.
If the Fed cuts....its good for PM. If the Fed doesn't cut...
it will depress the market more and weaken the dollar.
Over the weekend the spin seemed to change. Now the spin
is the Fed won't cut. I get the feeling that the financial media
is slowly leading the herd to take a closer look at PMs. I think the
Fed will cut again....but later this year. This will be very positive
for PMs in the coming months. Not to mention growing tensions
in the ME and South Asia. King Fahd is going to kick the bucket soon.
What that could precipitate is anybodys guess.
Black Blade
(08/11/2002; 21:22:11 MDT - Msg ID: 82808)
The ministry of funny numbers
http://www.upi.com/view.cfm?StoryID=20020809-044047-1253r
Snippit:

WASHINGTON, Aug. 9 (UPI) -- Trying to draw economic conclusions from the productivity statistics produced by the U.S. Bureau of Labor Statistics is rather like choreographing a ballet using the staff of Monty Python's Ministry of Silly Walks. The erratic nature of the statistics, and their tendency to be hugely revised several years after the event, make economic prognostications very difficult. The BLS is not the only Ministry of Funny Numbers, of course; there's also the Bureau of Economic Analysis.


Black Blade: This article attacks the BLS and BEA for exactly the same reason that I have driving home for the last few years. Finally some one is beginning to take notice. The clowns have been massing the economic and unemployment data and now they are being exposed for the lying charlatans that they are. The article still does not address the methods of statistical massage.

misetich
(08/11/2002; 21:22:53 MDT - Msg ID: 82809)
Insurance industry faces fight for its life
http://www.business.scotsman.com/banking.cfm?id=877522002Snip:

John Stones


A BELEAGUERED life insurance industry is busy pulling up the drawbridge - after Royal & Sun Alliance shares fell by 22 per cent on Thursday.

Three consecutive years of decline in the stock markets have left many insurers in precarious financial health and eager to stop consumers withdrawing their money.

Nowhere is this more apparent than in with-profits, a uniquely British mainstay of the industry, which accounts for some �350 billion of funds.

With-profits is the traditional investment offered by life companies that allows policyholders to share in the overall investment performance of the company through bonuses and also have returns smoothed to insulate them from market volatility. So the recent decision by Norwich Union, one of the country's largest life companies, to slash by 5 per cent the amount it was paying out to its 3.5 million with-profits policyholders understandably made headlines.

Norwich Union's justification was that the stock market has lost about one-quarter of its value this year. Friends Provident agreed and followed suit. At the end of June, Axa Sun Life summarily cut its with-profits payouts by between 3 per cent and 5 per cent. A month later, on 29 July, Axa's scythe was out again and owners of with-profits investments saw their savings further devalued by 5 per cent and 11 per cent.

.............

Misetich

One domino after the other - when is it going to stop?

Got gold?
misetich
(08/11/2002; 21:34:49 MDT - Msg ID: 82810)
Are bonds really safe?
http://www.theglobeandmail.com/servlet/ArticleNews/business/RTGAM/20020811/wxmain/Business/businessBN/breakingnews-businessSnip:

By DAVE EBNER
From Saturday's Globe and Mail


Scarred and scared by the brutal stock market, many investors have fled for the perceived safety of U.S. Treasury bonds � yet some observers suggest the so-called safe haven is far riskier than many believe.

"Chasing U.S. government bonds now could be akin to chasing tech stocks in March, 2000," said Tobias Levkovich, a strategist at Salomon Smith Barney Inc. in New York. "What I'm seeing is people rushing to an asset class after it's already moved, chasing performance."

Bond prices have soared since January, 2000, climbing more than 50 per cent, driving the yield on benchmark 10-year Treasuries down to 4.22 per cent � the lowest in 37 years.

The race to bonds from stocks in July was truly remarkable. According to Thomas McManus of Banc of America Securities LLC, Americans yanked $40-billion (U.S.) from their domestic stock funds and put around half that � about $20-billion � in domestic bond funds.

.............
If the economy actually deflated, buying bonds today would be the wise choice. However, given the glaring risk of falling prices � a condition currently crippling the Japanese economy � the Fed appears fully committed to reinflating the wounded U.S. economy by keeping its key Fed funds rate � presently 1.75 per cent � at or near a four-decade low. Some investment banks, including Goldman Sachs & Co., have recently predicted the Fed may cut the fund rates again after slashing it 11 times last year.

In June, the central bank published a 62-page paper entitled Preventing Deflation, concluding Japan's mistake in the early 1990s was raising rates too early in the wake of its burst stock and real estate bubbles, an error observers believe the U.S. will avoid.

"Governments and central banks, alarmed by the threat of global deflation, will employ fiscal/monetary stimulus to restore corporate pricing power," Pacific Investment Management told its clients in a recent report. Pimco said the disinflation of the 1980s and 1990s is nearly over. The Newport Beach, Calif.-based firm predicted U.S. inflation, as early as 2005, could reach 4 per cent, a pace not seen since 1991 when 10-year Treasuries yielded around 8 per cent.
*************

Misetich

Stocks are not safe. Bonds are not safe. Can you thinks of a wiser investment than physical gold in these uncertain times? and we are in uncharted territory.. who knows how/when the financial titanic hits the goldberg!

Will it be inflation or deflation gold wins in both cases - gold is a wise investment in any portfolio

Got gold?
misetich
(08/11/2002; 21:41:48 MDT - Msg ID: 82811)
Bond Funds Are Not Exactly Safe Shelters
http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=202&feed=bus§ion=news≠ws_id=bus-n10110747&date=20020810&alias=/alias/money/cm/nwSnip:

Saturday August 10, 1:29 PM EDT

By Linda Stern

WASHINGTON (Reuters) - If you think a bond mutual fund is a nice safe place to tuck away money while you wait for the stock market to settle, it may be wise to think it through a bit before writing that check.

There's a world of difference between individual bonds and the mutual funds that buy them. Investors who put money in bond funds thinking they are safe alternatives to stocks can learn that the hard way.

Bonds are really loans. When you buy a bond, you lend money to a company or government for a set amount of time. You earn interest, and at the end of that set amount of time, you get your loan back.

************
Misetich

When the South East Asian economies were in distress - investors, banks etc were able to use timeless store of wealth value - gold - in meeting their obligations- a liquid and willing market existed

In time of distress which investment provides that security - stocks, bonds or gold?

Government bonds are perceived safe - until - ???? ask Argentinians for an example

US $ - the reserve currency - is backed by debt - and more debt- can investors feel secure?

Got gold?


Blackjack
(08/11/2002; 21:56:38 MDT - Msg ID: 82812)
Gold opens higher in Hong Kong
HONG KONG (AP) -- Gold opened at U.S. $314.05 an ounce on Monday in Hong Kong, up $4.60 from Friday's close of $309.45.
steady
(08/11/2002; 22:49:05 MDT - Msg ID: 82813)
reg howes latest
http://www.gold-eagle.com/editorials_02/howe081302.htmlMy hero!
hero n 1)person admired for bravery ,great deeds, or nobel qualities: Reg how is one of Americas great heros. 2) person admired for contributing to a particular field 3) THE MOST IMPORTANT PERSON IN A STORY,PLAY OR POEM{
Black Blade
Sands shift under House of Saud
http://www.sbpost.ie/story.jsp?bottomadvert=/common/adverts/bottom/null.jsp&rightadverts=PersonalStandard&rightnav=/common/navs/right/sponsorsnav.jsp≤ftadverts=&advert=/common/adverts/top/homepage.htm&title=Front+Page&story=WCContent;id-53303&list=
Snippit:

The Saudi Royal family

Age: King Fahd: 80; Crown Prince Abdullah: 78


The United States is facing the potential nightmare that Saudi Arabia, its pivotal long-time ally in the Middle East, may not support an attack on Saddam Hussein. Last Wednesday Saudi foreign minister Prince Saud al-Faisal went further and told the United States its forces would not be allowed to use its territory as a base in the event of such a military campaign. Meanwhile, the US had distanced itself from a leaked think-tank recommendation that the United States `target' Saudi oilfields and financial assets if the Arab kingdom doesn't do more to fight terrorism. The suggestion was made in a briefing to the Defense Policy Board, a group of intellectuals and former senior officials which advises the Pentagon. "Saudi Arabia supports our enemies and attacks our allies," the briefing said, describing Saudi as "the kernel of evil, the prime mover, the most dangerous opponent" in the Middle East. Not only has all of this focused international attention on the Kingdom of Saudi Arabia and the ruling Saudi elite, but it has also highlighted the previously unanticipated scale and severity of domestic unrest, and the fragility of the royal House of Saud.


Black Blade: "Plans within plans" and allies that are enemies. Quite a run down on the Saudi royals and internal unrest in Saudi. With over 25% of the "Free World Oil" at stake, this unfolding story is important enough to keep an eye on. What happens in Saudi alone can determine the fate of the global economy.

Black Blade
US Airways Files Chapter 11
http://biz.yahoo.com/rb/020811/airlines_usairways_7.html
Snippit:

WASHINGTON/NEW YORK (Reuters) - US Airways Group Inc. sought Chapter 11 bankruptcy protection on Sunday, the first such filing by a major carrier since the Sept. 11 attacks triggered a financial crisis in the airline industry.

Black Blade: "And another one bites the dust".

Blackjack
State of Emergency declared in Columbia
BOGOTA, Colombia (Reuters) - Colombia's new President Alvaro Uribe declared a state of emergency Monday to fight what the government described as a "regime of terror" following a surge of war violence.

Uribe, who took office Wednesday accompanied by a salvo of leftist rebel mortar shells in Bogota that killed 20 civilians, also decreed an emergency tax to allow the government raise $778.5 million to fund a military build-up.

"The government has decided tonight to declare the state of emergency," Interior and Justice Minister Fernando Londono told reporters during a news conference in the capital Bogota. Londono did not give specifics about what the state of emergency would entail.
____________
Another South American country with growing problems. US military is in Columbia fighting drug cartel armies.
Black Blade
Japan's central bank warns global doubts weaken chances for recovery
http://biz.yahoo.com/ap/020812/japan_economy_1.html
Snippit:

TOKYO (AP) -- Prospects for Japan's economic recovery remain uncertain amid looming questions about a global recovery at a time when exports are critical for this nation's growth, the central bank said Monday. Although the Bank of Japan kept its assessment unchanged in August from last month that the economy "overall had stopped declining," the report warned that tough employment conditions and volatility in global stock markets will make any momentum for recovery weak for some time. Last week, the government Cabinet Office released a report that noted some signs of recovery while warning that the stock decline around the world as well as the diving dollar may spell trouble for Japan's export-driven rebound.

Black Blade: No kidding.

Black Blade
Stock Slide Dims Outlook for Economy, Blue Chip Says
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Economy%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_economy&s=APVUIjxVtU3RvY2sg

Snippit:

Washington, Aug. 10 (Bloomberg) -- Expectations for U.S. economic growth this year and next dimmed in the last month as the slide in stock prices led to reduced consumer and business spending, the Blue Chip Economic Indicators forecast shows. ``A sharp July sell-off in equity prices and troubles in the corporate bond market, combined with the release of several weaker- than-expected economic reports over the past month, acted to further undermine expectations about the pace of activity going forward,'' the report said.

Black Blade: So much for the second half recovery.

Black Blade
Global Markets Weaken
http://quote.yahoo.com/m2?u
The global markets are off this morning on a weaker US dollar and waning prospects for a Fed rate cut. Gold is bouncing along slightly over $315 so far.

- Black Blade
steady
wow ! US Firms May Be Inflating Earnings By $60 Bln
LONDON (Dow Jones)--U.S. companies may be inflating earnings by up to $60 billion a year by using questionable assumptions on pension funds, according to research by Dresdner Kleinwort Wasserstein, The Times reports.

The suspicion centers on the top 250 U.S. companies that offer defined benefit schemes, which guarantee employees a predefined income at retirement.

On average, these companies are assuming their pension funds will earn a 9.3% return each year, substantially above historic rates of return on major asset classes, the newspaper reports.
Newspaper Web site:http://www.the-times.co.uk

Black Blade
Grand Jury Impaneled in Kmart Probe
http://biz.yahoo.com/rb/020811/retail_kmart_3.html

Snippit:

NEW YORK (Reuters) - The U.S. Attorney's Office has impaneled a federal grand jury in Detroit and more than 20 subpoenas have been issued for witnesses as part of a probe into bankrupt Kmart Corp., the Detroit News reported on Sunday. The newspaper reported that federal investigators are zeroing in on the personal finances and compensation deals struck between the Troy, Michigan-based retail giant and former executives such as Chairman Charles Conaway, and President Mark Schwartz, in the months leading up to the company's bankruptcy filing in January.

Black Blade: Yep, more corporate executives caught with their hands in the cookie jar. This is going beyond ridiculous. With all these execs using corporate funds (the shareholders money) as their own personal piggy banks, its no wonder that investors are running like the blazes for the nearest exit.

Belgian
US-air !
US-air on chapter 11...BUT WILL KEEP FLYING up until it finds a solution to its problems !!! - ???
The X-tieth example and evidence on the "gravity" of the present state of affairs. Thy shall not default at any cost!
The drunken sailor's economy or Titanic passengers in the icecold water hanging on the lifeboats...and ultimately capsizing the whole boat. So be it.
Black Blade
Gold Jumps Higher

As the Euro market go into a tailspin and the dollar weakens, Gold pops over $317 an ounce. Looks like a lotta "entertainment" on tap this morning. Also the rumor is that Citigroup is hurting again as they attempt to bail out of Brazilian loans. Then there is the August 14th deadline for CEOs and CFOs to sign off on their financials. Then the long drawn out process as the SEC follows up on questionable balance sheets. We could see a lot of revisions.

- Black Blade
Black Blade
Colombia declares emergency, tax to combat violence
http://biz.yahoo.com/rf/020812/colombia_emergency_2.html

Snippit:

BOGOTA, Colombia, Aug 12 (Reuters) - Colombia's new president, Alvaro Uribe, declared a limited state of emergency on Monday to fight what the government described as a "regime of terror" following an upsurge of violence that has left 100 people dead since he took office.

Black Blade: This morning El Presidente Uribe is now saying that it's a "state of NEAR emergency" � whew! I'm glad that he cleared that up.

Golden Bear
The Roller Coaster Ride To Hell
www.dailyreckoning.comSnippit:
"....The stock market in the US was rising, for one thing, because the panicked citizens of brain-dead countries, like those in South America, are getting their cash the hell out of the country and into someplace "safe" like the USA. Ha! If they only knew!

But this huge temporary inflow of cash from abroad is not investment. It is, they hope, the modern equivalent of putting the money under a mattress, and one day all that money is going to be taken back. Too bad for them that the amount of money they will take back will probably be substantially less than they put into the mattress..."
Topaz
misetich, Golden Bear.
http://www.futuresource.com/charts/multicharts.asp?symbols=TNXY%2CTYXY%2CFVXY%2Cgcu02.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=10&go.y=11Bond yields keep grinding downward into the Abyss - The word goes out "Don't buy Treasuries". GWB can't hit Saddam from here without upsetting the Applecart completely, meanwhile POFoolsgold looks like a run at sub$300 is on again.....it's getting CLOSE!
silvercollector
Just saw on the headline news.......
Golden Gate on 'superheightened' alert.
silvercollector
BB, anyone
A couple of folks mentioned over the week-end that the FED is "caught between a rock and a hard place" with their decision tomorrow. I understand that the bond markets have a cut 'priced in'.

I think I see that with the SM's, no cut will bring about bloodshed but I have mixed thoughts w/ gold. With a cut the markets will see inflation threats and lower 'real interest rates' & less currency (USD) support thus gold should take off. Without a rate cut, we should see SM's getting hammered, will this include the commodity aspects of gold as well or will investors flock to the yellow?

What are we hopeing for?

Thanks.
Belgian
Fresh winds at the WGC ?
Has the WGC, finally, decided that Physical Bullion in Possession is an eternal glow ? Let us hope so.
Is Sir Chris Thompson, serious, about working towards, educating/promoting, Physical Gold, as an "investment" for individuals AND (pension) FUNDS as well ? Will he be allowed to become succesful with this fresh re-orientation ?
A rhetoric but heavy loaded question.

WGC could maneuver itself into a position, where a steadely rising, re-valuating POG, could be "managed" (negociated). An ideal long term, prospect, for all candidate Gold Investors. A Gold Standard WITH Free (freer) Gold !?

Let us hope we see more signs of progress at the WGC.
silvercollector
How to get gold to rise to the moon..........
......get rid of the manipulators.

I hope everyone has a chance to see the post at 16:02 (Aug. 11) at the neighbouring castle.

"How does a person force the price of Gold up? Buy Silver."


Silver, at an outrageous 66:1 ratio presently with gold is a steal. If there were unprecented physical buying forcing a squeeze the manipulators would be toast, badly burned toast. Once burnt, gold would be free to run.

Shall we precipitate the squeeze?

Thoughts?
silvercollector
Belgian
Chris Thompson has been knighted???

;)
Golden Bear
Topaz (msg#: 82826)
"...meanwhile POFoolsgold looks like a run at sub$300 is on again.....it's getting CLOSE!..."

Topaz, the only fools are those not having physical in possession to anchor them against the gail force financial winds which are lashing the current economic landscape. This landscape has been eroding since 1913, and has been scorched in the last decade, possibly leaving barren wastelands for a long time to come....

Gold, never misallocated in your possession.
Belgian
@ Silvercollector
To cut or not to cut (IRs)...is NOT the question, anymore.
How long can/will, these low rates been maintained is rather a reason for worrying ? A, pressuring, rising POG will certainly raise more and more suspicion on the underlying dollar currency, for all, better and better to see !
Billboarding deflation whilst POG rising very discretely!!! Haha, what a contradiction. Is it Gold that wants to tell us what is really happening ? I'll bet it is ! What a difference is a next cut going to make against the stealth force of Gold ? Am waiting for the next attack against Gold, if any is dared ? Where's the goldhammer folks ?

317$ intraday tick is in. How much longer can the gapping-zone 330$ ~~ 354$ be avoided ? Boring Gold...? Noooohhhh, never !
Boxman
DOWNUNDER post #82800
DOWNUNDER posted the following:

"No one can state with accuracy that silver will not follow gold --or vise versa.Centuries of history say that the 2 metals have a definate correlation & egg on face may be the result of divining othewise."

I have been wondering, during this recent discussion as to the future of silver, if centuries of history tell us that gold has always been a store of wealth, and indeed the only true money, and silver has mirrored gold to a large degree, then why would this not hold true today?

I am sure that I am missing something here, but history has led me to accumulate both metals in the best interests of protecting my family. I may hold more gold than silver at this moment, but that is only because that when I buy, I buy only one of them at a time. Silver will be my next acquistion.
steady
change in the air over at the WGC
New CEO and New Mandates for World Gold Council
Business Wire - August 12, 2002 10:48
NEW YORK--(BUSINESS WIRE)--Aug. 12, 2002--The Executive Committee of the World Gold Council is pleased to announce the appointment of James E Burton as the new Chief Executive Officer of the World Gold Council with effect from October 1, 2002. The World Gold Council was founded in 1987 by the world's leading gold mining companies for the purpose of stimulating the demand for gold by consumers as well as investors.

"I am delighted that we have been able to attract someone of the calibre of Mr Burton to run the Gold Council," said Mr Chris Thompson, Chairman of the Executive Committee. "The World Gold Council has always had the potential to be a major influence in gold's traditional markets. What we need now is Mr Burton's extensive experience in the investment arena and his demonstrated management discipline to make the Council more effective. With the fundamentals of the gold market outlook improving and some fresh new investment product ideas for gold in the pipeline, the future for gold is as bright as I have seen it for some time."

Mr Burton is the former CEO of the California Public Employees Retirement System (Calpers), which position he held from 1994 through to September 2002. Prior to working for Calpers he was Deputy State Controller for the State of California, preceded by a series of other career steps in the California State Government. Calpers is the leading and the largest public pension system in the USA with $140 billion in assets and 1.2 million participants. During Burton's era Calpers pioneered a more activist approach to institutional investing, emphasising corporate governance issues and insisting on management and board accountability to shareholders. Burton designed and implemented a transformation of Calpers to an innovative, service-oriented, value added organization widely respected in the business community and seen as a global leader in pension investment. Calpers achieved superior returns during his era and went from being significantly underfunded in 1995 to comfortably overfunded post 2000.

The Executive Committee, after an extensive review by Bain & Co of the Council's functions, has provided Mr Burton with a specific mandate to reinvigorate the Council. The Council will focus equally on jewellery and investment demand, as well as cutting costs on sub marginal programs. By year's end Mr Burton will present a detailed and cost-effective overall strategy for the promotion of gold. More details will be released in due course.

"I am thrilled with the opportunity to help bring gold to the greater attention of the world's markets," said Mr Burton. "I have spent a tremendous amount of time during the past several months examining how I can be most valuable to the investment community in this next phase of my career. I am convinced that the Council's new focus offers me that opportunity."



Sierra Madre
What a lot of baloney!!

"Fresh new investment product ideas for gold..." (New C.E.O. for W.G.C.)

Burtie, have I got a "product" for you!

One THOSE types for the W.G.C. - nothing changes. When someone in banking and finance starts offering you a "PRODUCT", make sure your wallet is still in your pocket and run.

What a lot of c***. The W.G.C. is owned and operated by Rothschild and it won't talk of gold as an investment, until Rothschild is good and ready.

Cut the c*** Burton. Gold is gold and there is nothing new you or any other human can possibly invent for it. (technology aside).

Sulky Sierra
Sierra Madre
A bagful of bright new silver ounces...

For a trip to Europe I put some bright, uncirculated silver "Libertad" one ounce coins in a bag, they are worth only about six bucks apiece and make excellent tips for concierge, maitre d's, etc.

You know what? I looked at them, and they were too beautiful. I just put them back in the safe. Glad I did so, and plan to buy more a.s.a.p.; at 66 times to POG, this is absolutely a giveaway.

Sierra Madre (Mother Sierra)
steady
are they talking directly to me?

ODJ NY Precious Metals Midday: Gold Off Early Highs, Steady

08/12/2002
Dow Jones News Services
(Copyright � 2002 Dow Jones & Company, Inc.)
lol
Tommy P
Crude light...Last: 27.90 Change: +1.04
Anyone know anything????
Rock
Boxman compelled by Silver too!
First I want to say greetings to everyone here at the castle, its a fine day isn't it knights and ladies? It is an absolute pleasure to be heard by those attending these meetings here at the round table where the unlearned become the learned.

Boxman I agree with your post 82834. Per weight my silver out weights my gold but per price my gold out cost my silver. I have some beautiful untouched silver maple leafs but i also have a lot of those old silver dollars and kennedy halfs normally called junk silver. Hey anyone here at the table is junk silver ok or should i start tipping the coinsure like mother serria?

I think a balance of both precious metals is really prudent that way you have twice the chance of one or the other breaking out first or even doubling on both taking off at the same time. Remember this isn't a normal market we're dealing with here. I watch it everyday not knowinh what the hell is going to happening next because its not following the proper economic laws of monetary policy.

Thats why the metal in the hand is always worth its weight with no threat of fraud , and not to be minipulated or told by the CB we can't redeem your gold certificate because its still in the ground but once we get it out you'll be the first to know.

A great quote by an Entrepreneur in 1967....."Figure out what your purpose is in life, what you really and truly want to do with your time and your life then be willing to sacrifice everythng and then some to achieve it. If your not willling to make the sacrifice, then keep searching.

Peace,

Great Heart
steady
could this, like the s.american banking crisis, be the begining of the s.american bond crisis?
Argentina Tierra Del Fuego To Default On Bonds Next Month
08/12/2002
BUENOS AIRES (Dow Jones)--Tierra del Fuego, underscoring the dimming fortunes of once natural gas-rich provinces in Argentina, said Monday it will halt payments in September on about $13 million in bonds owned mainly by U.S. investors.
"Servicing the bonds is increasingly difficult," Deputy Vice Governor Daniel Gallo said in a telephone interview. "We've got (hungry mouths) to feed in the province and other social commitments to meet."
Tierra del Fuego, a sparsely populated island located on the southernmost tip of Latin America, holds some of the region's largest reserves of natural gas.
The province's tax intake from oil and natural-gas production has plummeted to roughly $12 million per annum from $50 million a year ago, Gallo said.
The government ordered contracts in Argentina to be paid in pesos ($1=ARS3.625) after it ended the currency's 11-year-old peg to the U.S. dollar at a 1:1 parity in January.
Gallo said that the provinces' cash problems mean that it won't be able to make a $2.7 million payment on the bonds in September.


steady
question>>>> what does this mean
as i progress in my limited understanding of world finances and its relationship to all paper fiat currency/and real money...,gold ....what the heck does this mean. could someone translate into hobbitan talk for this lil hobbit!

Brazil/Forex Swaps -2: To Refund Dlr-Linked Debt Due Thu

SAO PAULO (Dow Jones)--The Central Bank of Brazil on Monday sold $601 million of short-term currency swaps(what is a currency swap and what are they swapping?) as part of an effort to roll over a hefty batch of public dollar-linked securities later this week.

The monetary authority sold 8,000 swap contracts due Sept. 9; 3,000 more carrying a Sept. 20 maturity; and 1,320 swaps due Nov. 29. The respective linear rates on each contract were 24.87%, 28.48% and 32.00%. (what is a llinear rate as compared to a nonlinear rate,and who makes this stuff up?)

Demand for the Sept. 9 maturity was 21,655 contracts, while demand was 5,850 for the Sept. 20 swap. Only the longest maturity was undersubscribed, as the central bank was seeking to place as many as 2,100 contracts.

Monday's sale of forex swap contracts marks the first central bank action this week to roll over a $2.5 billion lot of dollar-linked debt due Thursday.

Market players don't expect the monetary authority to be able to fully roll over the maturing debt,(if they cant roll over the debt then they have to pay it off is that a fair assumption?) as the rates on the swaps are abnormally high at the moment amid mounting political jitters ahead of the October presidential election. Some traders expect the central bank likely will replace some of the debt with sales of dollars on the spot market or dollar-repurchase agreements. (what effect will sales of dollars have on the dollar? does selling of the dollar by a foreign govt cause the value of the dollar to go down or up, as i know that is directly related to the pog) In any case, volatility in the forex market is expected throughout the week, said traders.

At around 1825 GMT, the real was sharply weaker at BRL3.125 to the dollar, compared with Friday's close of BRL3.020.

steady
(No Subject)
http://www.innercitypress.org/crreport.html Such a Pity about Citi

August 12, 2002

http://www.innercitypress.org/crreport.html


On a hot issue of this long hot summer -- the examination of CitiFinancial that the Federal Reserve promised in July 2001 -- the Fed last week denied Inner City Press access to fully "eight linear feet of documents" concerning the exam. ICP has requested the documents in a Freedom of Information Act request in July, citing to evidence that CitiFinancial employees have be directed to destroy evidence before examiners arrive. The Fed nonetheless withheld all records about the exam. ICP has appealed.

The documents that the Fed did release provide some insight into the Fed's processing of Citigroup's contested application to acquire Golden State Bancorp. The Fed's partial response to ICP's FOIA requests of July 1 and 11, received last week, provides some insight into the Fed's processing of Citigroup's contested application to acquire Golden State Bancorp. From June 3 onwards, ICP and other requested a hearing on Citigroup's application. The Fed has now released a redacted copy of a memorandum that its staff presented to Fed general counsel Virgil Mattingly on June 26. The memo recites that the Office of Thrift Supervision had received more requests for a hearing on the transaction that the Fed had, as of June 26. The Fed staffers note that "Citigroup has indicated its willingness to participate in the OTS meeting;" a full paragraph of the memo is then whited-out. But Citigroup had no choice: the OTS had ordered the formal meeting, under its regulations, and Citigroup had to attend. The Fed staffers go on: "The commenters' justification for a hearing relate primarily to the subprime lending and related credit insurance activities of CitiFinancial, Inc., a nonbanking subsidiary of Citigroup that is not regulated by the OTS." After that, pages 4 through 7 of the memo are withheld.

keep the trail hot!
misetich
Brazil Currency, Bonds Slide on Government Refinancing Concern
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVgBEBbQQnJhemlsSnip:

By Michael Smith


Rio de Janeiro, Aug. 12 (Bloomberg) -- Brazil's currency and bonds slid on concern investors may balk at buying debt, forcing the government to spend its reserves to repay 7.2 billion reais ($2.3 billion) in loans due this week.

``The greatest pressure on the real this week is the government dollar-linked debt that is due,'' said Caio Augusto Bastos Lucchesi, a director at Fair Corretora de Cambio e Valores Ltda. brokerage in Sao Paulo. ``If the central bank doesn't roll it over, investors will buy dollars, pushing the real down.''

............
``The prevailing, and it seems majority, view is that without Serra, a default is pretty much certain,'' said Tony Volpon, an economist at Vortex Partners Ltda. in Sao Paulo.
.............
Brazil's next president will be forced to cut pensions, government wages and aid to the poor, which account for 80 percent of spending, said Raul Velloso, an economic consultant in Brasilia.

``They all will have to make some hard choices if they really plan to meet the IMF's demands,'' said Velloso, who tracks government spending.
***********
Misetich

ANOTHER austerity program by the IMF for the Brazilian pueblo as foreign banks are "rescued" by the IMF - Latin America is a hot potato - clashing cultures make it difficult - The IMF will try to strangle - Brazil is too important for "US interests" to let them go Argentina's way - and Brazilians know it

Lets stay on the HOT TRAIL

Got gold?

Blackjack
CRB index up big, inflation in food prices coming?
Chicago, Aug. 12 (Bloomberg) -- Corn surged to a 4 1/2-year high and soybeans rallied after the Agriculture Department said U.S. farmers will harvest the smallest crops since the mid-1990s because of a drought in the Midwest and Great Plains.

The government cut its forecast for the corn harvest by 9.2 percent from its July estimate, and reduced the soybean forecast by 8.1 percent. Higher prices may boost costs for animal feed and corn-based soft-drink sweeteners, and allow the government to cut crop subsidies by 40 percent, analysts and economists said.

``This run-up in prices caught the end-users by surprise,'' said Tom Hurd, director of the grain division at Sheridan, Indiana- based United Feeds Inc., the second-largest U.S. producer of hog feed. Domestic processors ``are bidding up train loads coming out of the Midwest so they won't pass them by'' and go to export terminals along the Gulf of Mexico.

Corn for delivery in December, after the harvest, rose 10.75 cents, or 4.1 percent, to $2.7225 a bushel on the Chicago Board of Trade, the highest closing price since March 18, 1998. Corn prices have climbed 34 percent since May 1 as hot, dry weather stunted plant growth in the Midwest and Plains.

Soybeans for November delivery rose 27.5 cents, or 5.2 percent, to $5.5275 a bushel on the Chicago exchange, the biggest one-day gain since May 1, 2000. Soybean prices have gained 31 percent this year.

Parts of Nebraska, the third-largest corn-growing state, are having their worst drought in 97 years of record-keeping, meteorologists said. Eight states that produced 72 percent of last year's $19.2 billion corn crop are experiencing drought conditions, according to the National Drought Mitigation Center in Lincoln, Nebraska.

Unsold inventories held in U.S. warehouses will decline as domestic processors tap stockpiles to keep mills supplied. The U.S. is the biggest exporter of corn and soybeans.

Lower Reserves

Farmers will probably gather 8.886 billion bushels of corn this year, down 6.5 percent from last year's harvest and the smallest crop since 1995, the Agriculture Department said. Analysts in a Bloomberg survey expected a crop of 8.981 million bushels.

Reserves of unsold corn will fall to 767 million bushels by Aug. 31, 2003, before next year's harvest, the lowest pre-harvest estimate since 1996, the department said.
Black Blade
The World Is Tilting by Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20020812-mon.html#anchor0

Snippit:

A US-centric global economy has hit an unmistakable rough spot this summer. As a result, we are making significant cuts to our forecast of world GDP growth in both 2002 and 2003. Our revised numbers, however, stop well short of building in a double-dip recession -- either in the US economy or in the world at large. To the extent such a possibility is still likely -- and that remains my personal preference -- then the risks remain very much on the downside of our weaker global growth scenario.

Black Blade: The outlook for the global economy is still "grim". Earnings growth has stalled. South America continues to have problems in spite of massive IMF bailouts. I saw a segment with economist Jimmy Rodgers where he made a very good case for the abolition of the IMF. He further stated that the bailout will have little if any effect on heading off a collapse of the SA economies. Japan continues to suffer as the export driven economy continues to attempt a weakening of the yen to no avail. The ripple effects could easily lead to another Asian Contagion as other Asian countries will have to follow by weakening their currencies. Europe continues to deal with growing concerns of a weaker global economy as well. Meanwhile each region will continue the "Currency War" as they end up in a fight for shrinking global markets.

Blackjack
Saudi has advanced Chinese long range missiles
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28559According to the report, both U.S. and Israeli intelligence have been aware of the Saudi missiles for years. The Saudis reportedly told the Americans the missiles were needed to defend themselves from Iran and that their purchase was arranged after the U.S. refused to sell Riyadh F15 fighters in 1985. King Fahd reportedly promised the U.S that the Saudis would not place chemical or nuclear warheads on the missiles and would never use them in a first strike. He also reportedly promised Saudi Arabia would not take part in the development of nuclear warheads, but it has bankrolled Pakistan's "Islamic bomb" project.

The report claims the Saudis have refused to allow U.S. inspectors in to see the Al-Solayil site.
____________
Interesting article at above link. Saudis won't let us see site?
This could be a big problem if instability hits kingdom.
Boilermaker
HUI Index
http://finance.yahoo.com/q?s=^HUI&d=c&t=1d&l=on&z=b&q=lChecking the HUI daily chart today I noticed that the last point on the chart @ 3:59PM was unchanged at about 119.50 but the index actually closed at 188.39 @ 4:28PM, down 1.11
Can anyone tell me if this reflects aftermarket trades or what?
Black Blade
South America's fiscal storm has echoes of Asia crisis
http://seattletimes.nwsource.com/html/businesstechnology/134510688_asiareplay11.html

Snippit:

WASHINGTON � The conventional wisdom has been South America 2002 is not Asia 1997-98 when financial crises spread like wildfire, toppling 40 percent of the global economy into recession. But with the turmoil in Uruguay and Brazil, after Argentina's record debt default last year, some economists worry conventional wisdom may be wrong. "Let's face it. The dominoes are falling again," said David Wyss, chief economist at Standard & Poor's in New York. "Before we thought Latin America would not be a replay of Asia, and now we are hoping it is only Asia in 1997-98 and not something worse."

Financial markets in a number of South American countries have been in turmoil, with interest rates soaring and currency levels plunging. The situation is beginning to look eerily like the Asian crisis, in which troubles in Thailand in 1997 quickly spread throughout the region and then jumped to Russia. Russia's bond default and botched devaluation of the ruble in the summer of 1998 sent shock waves through Wall Street, triggering steep declines in stocks and the near collapse of a huge U.S. hedge fund.

The scary thing, some economists say, is this time the situation could be more dire. The Asian crisis occurred when the U.S. economy was soaring. After the Fed rate cuts and the return of market stability, U.S. consumers kept on spending, helping serve as a growth engine for the rest of the world. But now the United States is struggling to emerge from a recession and the worst bear market since the mid-1970s.


Black Blade: I have stated before that the South American collapse could sweep across the borders of SA and head north ending up on US shores much like the Asian Contagion. Others too are taking notice. Only this time we are more vulnerable. Therefore we see the sudden change in US concern with an emergency trip by Secretary Paul O�Neill rushing off to South America with a blank check. In a word � "GRIM".

Off to the gym!!!

goldquest
JPMs CEO and CFO
supposedly signed and filed their sworn statement with the SEC, according to CNBC. I hope that we will be able to see how they listed their gold dealings.
Blackjack
US may seize Arab airports by FORCE!
BEIRUT, Aug. 12 (Xinhua)--Lebanon received a report from diplomatic sources saying that the United States would seize by force several airports in Arab states when it launches a war against Iraq, the An Nahar newspaper reported on Monday.
The report said that US President George W. Bush would unleash the military offensive in January 2003 as he has to wait the outcome of the midterm elections of the Congress in November. ``Bush prefers to have Arab support for his war to remove Iraqi president Saddam Hussein and the US forces would have facilities in several neighboring Arab airports,'' the report said.
''At any rate,'' it stressed, ``once zero hour comes, Bush will give the orders to use Arab airports by force for the military operation against Iraq if the need arises.'' Bush argued that without the US interference, the Arab countries, the Arab League and the UN Security Council would not have been able to oust the invading Iraqi troops from Kuwait in the 1991 Gulf War.
Meanwhile, the report revealed that the Bush administration has allowed Israel to strike back in the upcoming confrontation against Iraq if the Arab country fires Scud missiles at Israel like it did in 1991.
The report suggested that the Arab world should take the US war preparations against Iraq ``very seriously'' and recommended a diplomatic offensive by Lebanon to consolidate Pan-Arab camp.
_____________
This is going to get a lot of people in the ME upset even if it is a bogus report!
Socrates964
Steady'
Not an expert on currency swaps, but I think it means this:

The Brazilian federal govt has a chronic financing need and can issue securities of various kinds to finance, ranging from plain vanilla fixed rate bonds to bonds whose return is the change in the $/Real exchange rate plus an interest spread.

In order to prevent its interest bill going to the moon as the devaluation of the Real is built into the coupon, it retires this paper by getting holders to exchange for plain vanilla T-bills, which holders will do provided that the plain vanilla coupon is sufficiently attractive.

The point about Brazil that you have to be aware of to understand this is that there is a symbiotic relationship between the government and the financial sector to the point where the private sector has been completely crouded out of the credit market.

As such the private banks hate lending to private borrowers and will only do so at usurious rates. It is much more comfortable for them to soak up government paper. Hence, if, for some reason, the government were ever to get its financial house in order so that it didn't need all this expensive money, the financial sector would freak out as it would be left with vast amounts of liquidity and nowhere to apply it.

It's as if the private banks are drug dealers and there's only one really rich junkie in the market, who buys a ton of heroin at a time. The dealers don't want the hassle of maintaining a huge distribution network to sell drugs on the streets in 50g lots as the risk of not getting paid back/hassle factor goes up.

Btw, the way the IMF package has been structured ($6bn upfront) suggests much more of a Vietnam-style withdrawal from Brazil - i.e. you get airlifted out if you're standing on the roof of the US embassy in Saigon.

Looking at the polls, I'm starting to think that Lula might win, although given the poor representation of his party in Congress, he will be forced to make alliances. In this way, Brazil could get a centre-left coalition government like the Olive Tree in Italy - which would, IMHO, be much better than a Brazilian Al Gore leading a band of 'rapers and pillagers'.
Gandalf the White
Sir Boilermaker's Question !
Boilermaker (08/12/02; 14:39:14MT - usagold.com msg#: 82848)
HUI Index
==
NOT an expert in this, BUT, UNLESS you have a REAL-Time charting service, the data may have a time delay. The Index is madeup of many small Cap mining firms and the Runoff after the bell may also have a delay built into the later adjustment of the Index.
==
<;-)
John Doe
@Boilermaker
I noticed that too. Very fishy.

Checking the components, GG and GLG were gapped down at the last minute on negligible volume. Stinks on ice...seems someone didn't want HUI positive at the close, whatever reason.

You can see the manipulation on the 1 day charts on bigcharts:

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=gg&sid=0&o_symb=gg&freq=9&time=1

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=gg&sid=0&o_symb=gg&freq=9&time=1

GG recouped most of it's loss after-hours.
Operative
@ goldquest Re: JPM
Shooting from the hip on this one but if memory has not failed me completely it seems I recall JPM moved its metal trading operations to London about a year ago. In any event I am sure they have found creative accounting methods via offshore entities to hide any factual information relating to thier gold holdings, leases, etc. I hold no hope of any information of value being released for public consumption, even if they have to "misstate" on the record. Remember JPM offical line when Enron first broke. JPM stated openly via the press that they had very little exposure to the Enron debacle. I think they mentioned the figure to be 30 million or so. It was later proven to be the billions.
Boilermaker
HUI Index- Sirs Gandalf and Doe
Thanks for the responses. Today's last trades for GLG and GG were remarkable. Clearly a move to manipulate the stocks and/or the index but for what purpose?
Operative
@ goldquest - JPM Story Link
http://www.ask.com/main/metaAnswer.asp?t=ai&s=a&MetaEngine=directhit&en=te&eo=1&o=0&frames=true&url=http%3A%2F%2Fask%2Edirecthit%2Ecom%2Ffcgi%2Dbin%2Fredirurl%2Efcg%3Furl%3Dhttp%3A%2F%2Fwww%2Egold%2Deagle%2Ecom%2Feditorials%5F00%2Fhathaway051600%2Ehtml%26qry%3Djpm%2Bmetal%2Btrading%26rnk%3D6%26cz%3D83907e06f8f88216%26src%3DDH%5FASK%5FSRCH%26u%3D∾=9&adcat=fin&pt=JP+Morgan+To+The+Rescue&dm=http%3A%2F%2Fwww%2Egold%2Deagle%2Ecom%2Feditorials%5F00%2Fhathaway051600%2Ehtml&io=16&qid=1A4A590B3853FB4DA269042681B1217B&back=&ask=JPM+Metal+tradingLink to story about JPM moving its metal trading to london. Story is a good read and is helpful in understanding what is happening in todays gold market. Article by John Hathaway.
Standby for more, I think I have found link to JPM misstating the Enron Event that I mentioned earlier.

Shot from the hip on the earlier post, thought I would check a few things out to see if I provided accurate information to you and the forum.

R Powell
sector
Appreciate the response 82803 !!
Will you let us know when you see that volume spike that may signal the squeeze??
Many thanks
Rich
Operative
@ goldquest - JPM Loses more the double previously stated
http://www.ask.com/main/metaAnswer.asp?t=ai&s=ai&MetaEngine=directhit&en=te&eo=2&o=7039&frames=True&url=http%3A%2F%2Fask%2Edirecthit%2Ecom%2Ffcgi%2Dbin%2Fredirurl%2Efcg%3Furl%3Dhttp%3A%2F%2Fmoney%2Ecnn%2Ecom%2F2001%2F12%2F20%2Fcompanies%2Fenron%5Fjpm%2Findex%2Ehtm%26qry%3Djpm%2Benron%26rnk%3D2%26cz%3D6f4bddf254ae5d8f%26src%3DDH%5FASK%5FSRCH%26uid%3D05da846ed64eb45d3%26sid%3D3429c6a0b429c6a0b%26u%3D∾=22&adcat=news&pt=J%2EP%2E+Morgan+ups+Enron+exposure+%2D+Dec%2E+20%2C+2001&dm=http%3A%2F%2Fmoney%2Ecnn%2Ecom%2F2001%2F12%2F20%2Fcompanies%2Fenron%5Fjpm%2Findex%2Ehtm&io=1&qid=B5F3BEE7740FDC4DACB2C99A7FAD393C&back=origin%3D7039%26ask%3DJPM%2BEnron%26search%3DJPM%2BEnron&ask=JPM+Enron&dt=020812175859&amt=Link to story where JPM admits that loses are more than double the previous stated exposure. Way off my recollection of 30 million. It appears JPM had stated in the 400,000 million range initially. My bad, glad I took the time to look up the facts. Either way, I dont think it was an honest mistake the first time JPM stated thier loses. I would question anything JPM comes out with as to the crediblity of thier statements or advice.

UH OH, here I go again. But was not JPM recommending to its clients that they BUY Enron stock up to within a week of the Enron Failure? Dont have any more time tonight to look up the facts on that statement. Will just leave it out as another shoot from the hip statement by me.
R Powell
Blackjack
CRB index Thanks for the info (82845).
The information in the monthly WASDE reports is usually gathered by the end of the month before release. The reports usually become public around the 10-12th of each month. The last two weeks (not included in today's August report) have not improved conditions. Shallow roots from planting in the early wet spring will stress crops even more. It's now too late for rain to help corn yields. Much of China's crop is flooded (in Northeast China).
Many other factors both domestic and worldwide will support higher prices for all grown crops. This will support a higher CRB which makes it difficult for the government to claim that price inflation is under control. Many think the dollar's strength is or should be based on a basket full of commodities.
Perhaps we'll see paper asset deflation while consumer goods (commodities) rise in price (inflation) as some have predicted. A rising CRB may tend to lift all commodities much like irrational stock buying lifted all stock sectors. Many cyclical analysts say that commodity prices have an inverse relationship with stock market prices. A weaker dollar will also support the CRB. This should lend support to both gold and silver.
I guess I'm thinking that the POG is connected to the CRB. Strange, there isn't much monetarily or politically that doesn't relate to gold.
Rich
goldquest
@Operative
I appreciate your input and observations concerning JPM. I am sure they feel they have CTA'es with the latest developments, but these are not ordinary times and there is a real threat of some of these people going to jail. We know that the blame is usually placed on the underlings. This could be their downfall! Some of the underlings will squeal real loud if it looks like they may take the fall.
I think that JPM, GS, ML and a few more are standing on their toes, up to their lower lip, in the doo-doo lagoon, praying that no one tosses a pebble to make a wave. Hopefully, someone, (GATA?) or such, is standing by with a one ton boulder!
Black Blade
Re: Boilermaker, John Doe, Gandy, etc.
http://htmlgritch.island.com/SERVICE/QUOTE?STOCK=gg
You may find the link useful. After hours tardes for the gold shares suggest that the last minute trades are merely a quick move to take profits as after hours those shares bounced back. Obviously there is no sudden reversal in sentiment toward gold by the investing public. Cheers!

- Black Blade
Black Blade
Dollar, Little Changed, May Fall on Fading Rate Cut Speculation
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVhD0RX5RG9sbGFy
Snippit:

Tokyo, Aug. 13 (Bloomberg) -- The dollar, little changed, may fall for a third day as speculation ebbed that the Federal Reserve will cut its benchmark interest rate later today to revive the world's biggest economy. ``As confidence of a rate cut diminishes, we cannot get rid of general concern for the dollar,'' said Takashi Toyahara, foreign exchange manager at Nomura Securities Co.

Black Blade: It could get "interesting" in the next few days.


BTW, for anyone interested in why oil prices moved higher today, the US miliatry apparently is on the prowl to contract private transport ships to move equipment (ie helicopters, etc.) to ME staging areas. This raises the spector of war preparations for action against Iraq. Therefore the POO moved higher on rising probabilities of future oil disruption.
Black Blade
Scandal Of The Day" - Vivendi 'to wipe out billions'
http://europe.cnn.com/2002/BUSINESS/08/12/vivendi/index.html
Snippit:

PARIS, France -- Vivendi Universal, the world's second-biggest media company, may slash the value of assets by several billion euros when it reports first-half earnings on Wednesday, according to a report. "Half-year accounts cannot be presented without putting the clock back to zero for certain holdings, all the more so since the value of its assets as a whole has declined," French newspaper La Tribune quoted a source close to one of Vivendi's board members as saying.


Black Blade: Now this is interesting. A new financial scandal breaking in Europe.

sector
@R(ich)Powell You will know it when you see it.
Before Easter for sure.Might be a good time to get a few more golden "Eggs"
Waverider
Brazil's Country Ceiling Rating Cut to B2 by Moody's
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVhj8xUXQnJhemlsSnippit:
"Brazil's credit rating was cut one level by Moody's Investors Service on expectation the country may fail to control its debt under the terms of a $30 billion International Monetary Fund loan agreement. Moody's downgraded the country ceiling for foreign currency bonds and notes to B2, or five levels below investment grade, from B1. Brazil's debt rating is now on par with that of Nicaragua and Honduras. Brazil's debt more than tripled in the last eight years to 1 trillion reals ($318 billion).

Brazil will have trouble stopping its debt from rising further without raising its primary surplus, or excess of revenue over expenses before interest payments on debt, to as much as 5 percent of gross domestic product, or about 67 billion reals a year. The current IMF target is 3.75 percent of GDP, the report said."

Waverider: The pain will be as bad as Argentina's once the leaks in the dike are too numerous to be plugged contemperaneously....eventually the dam bursts.
Siochaina
Aqaba & Gold
http://www.debka.com/body_index.html rHeadline "Around 4,000 US Troops Land in Aqaba
Monday for Joint Maneuvers with Jordanian Army"

Sort of ironic if you saw AMC's Cable run of "Laurence of Arabia" over the week-end

In it, Aqaba is a vital linchpin that had to be taken....Laurence talks a fiery tribal leader, Auda Abu Tayi into helping take the city ...indicating the Turks held a large box of gold

Well they took Aqaba ...and there was a wonderful scene when Auda Abu Tayi opens the strongbox to find nothing but paper currency ...he throws it aside indicating it was trash ... that gold was the only measure/thing of real value ...that paper was nothing!

Would that more learn that wisdom today
sector
@R(ich)Powell...About the coming COMEX Default
Several things are clear...(1) the COMEX silver short contract holders can/will never purchase enough metal on any open market to cover their massive current positions. There simply isn't enough silver above ground to do this as Ted Butler has tirelessly reported.
(2) The gold shorts may nor cover either. It would not be in the best interests of the US to further stress its two largest FEDERAL RESERVE banks CitiBank and JPMorgan Chase...IF they both are still solvent by Q1 2003, the end of the default window.
(3) The LBMA will ALSO simultaneously default as a major precious metals market maker. The monetary authorities in the UK and the US prefer that metal NOT circulate in ANY form so they will make it difficult to obtain.
(4) The main price discovery market for both gold and silver will shift to another locale.
(5) A new black market for gold in the US will be born.
(6) A new crime of money laundering (gold) will be reborn from the 1930's...no one will care. No one will enforce it.
(7) Coin shops will hire lots of security guards and install bigger safes.
(8) Political types will get the message in November 2002 loud and clear...CEOs of ANY flavor are like Kryptonite.
(9) The elitist bankers of the FED and BIS will learn to play new roles...with a bit less power and a lot less gold in their vaults.
(10) Someone in Congress will emerge to lead the US or we will be Balkanized.

The issue of asset-based money replacing a baseless money is far more than it would appear. Destroy a nation's money and you have destroyed the nation.

Don't make too many long-term plans just yet.
Siochaina
Quote
I think this fits the many on this forum:

All men dream, but not equally.

Those who dream by night in the dusty recesses of their minds wake in the day to find that it was vanity:

but the dreamers of the day are dangerous men, for they may act their dream with open eyes, to make it possible.
�T. E. Lawrence from "The Seven Pillars of Wisdom"

Operative
Gold IS NOT a Commodity, Banks legally treat as currency.
http://risk.ifci.ch/140850.htmInteresting read for someone here I suppose. I have no clue to all it states. I got what I was looking for, banks must treat gold derivates by the same rules as currency. They treat it much differant than commodities. So much for those who continue to call it barbaric, useless, or a simple commodity. It is a foreign currency. Puts that question to bed at least for me.
Operative
A Must Print and Read
http://www.bis.org/review/r020326c.pdfRight out of the BIS website.
Operative
Relationship Between Currencies and Gold
http://www.bis.org/review/r001201b.pdfAnother Print Job.
Perhaps it is just me, but these links are bringing "life"
to a lot of Another's Trail Postings. Or maybe I just need to get a life, outside gold that is.
Operative
Bubbles, Inflation/deflation, or Where In The World Are We?
http://www.bis.org/publ/work114.pdf#xml=http://search.atomz.com/search/pdfhelper.tk?sp-o=25,100000,0Want a chance to get inside Greenspan's head or at least see what he is/will have to deal with? Then this link is for you. A long read, but a quick review brings up many of the topics often discussed at the castle.

Ok, no more of this tonight, promise. I will go sit quietly in my corner. Really. Have my word on it.
Black Blade
Dehedging supports gold price
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B248256C130046DE95?OpenDocument

Snippit:

One of the fundamental differences in the gold market recovery this year compared with the most recent short-lived rallies has been producer dehedging. "Producer dehedging, which we define as reductions in producer hedge books (largely due to delivery into existing positions without renewal, as distinct from an actual buyback), has of course been one of the major changes in the gold market this year," said Macquarie Bank analyst Kamal Naqvi. He believed the strategic running down of hedge books was inspired by: lower interest rates lessening the attractiveness of forward selling; the downward trend in gold prices appearing to be over; and shareholders and market sentiment pressuring gold producers to reduce and simplify hedge books, partly due to a positive outlook for gold prices, but also because of Enron-type concerns about transparency and predictability of earnings related to derivatives.

Also buttressing gold was the strong indication the US Federal Reserve could cut interest rates again. "Another cut � may well assist further reductions in gold producer hedge books," Naqvi said, suggesting lower interest rates would probably cause gold contangos to fall even lower and therefore take the premium out of forward selling. "In fact, if forecasts of a 50-75 basis cut in US interest rates occur, we could well see the lowest sustained contango levels ever."


Black Blade: This is the argument that others and I (including Farfel) have been making for quite some time. Forward selling has done a lot of damage to the Gold industry over the years. Now the low interest rates and the prospect of even lower rates going forward are driving a stake through the heart of the hedging vampires. The "Gold Carry Trade" is just too risky as the outlook for the price of Gold has improved. As the global economy spirals downward as evidenced by the recent huge US GDP revisions, lower consumer and corporate spending, and falling equities markets, alternative investments such as precious metals are looking more attractive. Those producers that insist on selling forward could get caught with hedge books deep under water. The impetus is on many of those producers to unwind in short order. Newmont has already stepped up to the plate by announcing that they will accelerate the unwinding of their inherited hedge book. It appears that several others and notably many of the Aussie producers are ready to follow suit. In a rising Gold price environment, shareholders of unhegded producers will continue to benefit to a much greater degree. We also wait to see the Gold short hedge funds and bankers squirm and look for a way out. They too could enter the market to begin the long painful process to extricate themselves from this trap of their own making.

Spartacus
Friedman warns against US rate cut while inflation risk remains
http://news.independent.co.uk/business/news/story.jsp?story=323884
---The US Federal Reserve Board slashed interest rates too far last year, said Milton Friedman, one of the world's most famous economists.

In remarks that will be seen as a warning to the Fed not to cut them again today, Professor Friedman said the bank was storing up inflationary pressure.

The Nobel Prize-winning economist said the impact of last year's cuts from 6.5 to 1.75 per cent had not yet flowed fully into the economy.

"The Fed was too expansive during the late 1990s and it may have gone too far again at the end of the year," he told Central Banking magazine. ---

Black Blade
Ex-Enron Execs Seek Millions in Severance
http://biz.yahoo.com/rb/020812/enron_bankruptcy_2.html

Snippit:

HOUSTON (Reuters) - Several former Enron Corp. insiders who earned a combined $25 million in the year before the company crashed are asking for millions more in severance pay, a question a bankruptcy judge on Monday said he will answer later this month.

Black Blade: Sure takes a lot of gall to do this. And they probably will get it too. Hmmm�

Black Blade
BOJ's Hayami says banks must help themselves
http://biz.yahoo.com/rc/020813/economy_japan_hayami_1.html
Snippit:

TOKYO, Aug 13 (Reuters) - Bank of Japan Governor Masaru Hayami said on Tuesday the ailing banking sector must help itself survive the planned end of government guarantees on bank deposits, a plan likely to hurt the industry's weaker players. The government plans to end full guarantees on bank deposits next April in the last of a two-step move aimed at making the banking system less dependent on state support. Some are worried that the end of guarantees could cause turmoil by sparking a major shift of funds out of weaker regional banks, as happened when the first phase of the plan went into effect in April. "To require government guarantees for deposits is a highly abnormal thing," Hayami told a news conference when asked about such worries. "Banks ought to earn the trust of its depositors, and that should be the basis for competition."


Black Blade: It appears that the "April Fools Day Surprise" is still a go. If so, we should expect a new wave of Japanese lugging gold kilo bars home.

Black Blade
American Airlines to Eliminate 7,000 Jobs, Overhaul `Hub' System
http://biz.yahoo.com/djus/020813/200208130400000158_1.html
Snippit:

FORT WORTH, Texas -- American Airlines, struggling to end its huge losses, will undertake a sweeping overhaul, including large layoffs, grounding additional jets and fundamentally changing the way it connects passengers at its hub airports, Tuesday's Wall Street Journal reported.


Black Blade: That's 7,000 more nonessential "Bones" off to the growing "Bone Pile".

Black Blade
Many Wonder If United Airlines Will File for Bankruptcy
http://biz.yahoo.com/djus/020813/200208130341000137_1.html
Snippit:

CHICAGO -- With US Airways (NYSE:U - News) now in bankruptcy, many are wondering if United Airlines might be next. United has implemented a financial recovery plan to stem losses from the Sept. 11 terrorist attacks, but the nation's No. 2 carrier faces several obstacles along its road to recovery, including high labor costs and losses of more than $ 1 million a day. Analysts said United could still file for bankruptcy by the end of the year without significant changes that would almost certainly include rolling back some of the hefty raises it negotiated recently. Like US Airways, the majority employee-owned airline would likely continue to operate while reorganizing its operations. United officials have declined to discuss the prospects of a Chapter 11 filing. But interim CEO Jack Creighton told United employees Sunday that the government appears likely to reject the company's application for a $1.8 billion loan guarantee, which it considers key to its ability to compete in a struggling market.


Black Blade: It appears that another will "bite the dust". They have about 2 months worth of operating cash left. There go my frequent flyer miles. It looks like my wings got clipped.

Blackjack
NASDAQ Japan Inc may go BUST
http://www.marketwatch.com/news/yhoo/story.asp?guid=%7BB18F393F-B4BE-4413-BFAF-C50E7394927F%7D&siteid=myyahoo&dist=myyahooTOKYO (CBS.MW) -- Companies can disappear, and so can entire markets.

The bursting of the global tech-and-dotcom bubble has driven many enterprises, new and not-so-new, out of business, and now seems on the verge of claiming as victim the Nasdaq Japan stock market.

At the time of its launch two years ago, Nasdaq Japan Inc. executives were boasting that the market, which operates as a section of the Osaka Securities Exchange (OSE), would sign up 100 listed companies a year.

But it's only managed to attract 98 companies in all, and in the last several days management of the joint venture between the U.S. Nasdaq Stock Market and Japanese Internet investor Softbank (JP:9984: news, chart, profile) has had the unpleasant task of explaining to them the mostly unfavorable scenarios facing the fledgling bourse -- including closure.
___________
I guess entire markets can go under, not just companies.
This global bear is just downright mean.
___________
Black Blade thanks for the post on the BOJ.
misetich
BOJ's Hayami says dollar unlikely to fall further
http://www.forbes.com/newswire/2002/08/13/rtr693561.htmlSnip:

TOKYO, Aug 13 (Reuters) - Bank of Japan Governor Masaru Hayami said on Tuesday he thought the dollar was unlikely to weaken further against other major currencies.

"Unlike in the 1970s and 1980s, the dollar is the most important key currency and everyone wants to use it," Hayami told a news conference.

"If the dollar weakens to a certain level, that becomes a limit and it moves back. That's the kind of movement we are seeing now," he added.

Hayami had said last week that the dollar's weak trend may be changing slightly. The dollar struggled against the yen and euro in Asia on Tuesday as sentiment was depressed again by a weak performance on Wall Street and fading expectations of a Federal Reserve interest rate cut.

The greenback fell to a one-week low of 118.74 yen in the morning, and was quoted at 118.86/89 yen as of 0658 GMT.
*************
Misetich

There you have it- the Japanese Wizard who has done little for Japan in improving their economics and financial mess reassuring the world on the soundness of the US $

He changes his tune from week to week - day to day - not the type of Central Banker that inspires confidence

His veiled threat, "If the dollar weakens to a certain level, that becomes a limit and it moves back. That's the kind of movement we are seeing now," he added.

say it all - Translation - Japan will buy US $ with cheap printed yens

Once upon time it appeared that the currency needed to be backed by economic performance - Mr.Hayami should know what happens to bubbles bursts and the US $ is a bubble

Got gold?



misetich
Seeing Long Trading Slump, Schwab Sets More Cutbacks
http://www.nytimes.com/2002/08/13/business/13BROK.htmlSnip:

Executives at Schwab, based in San Francisco, said they saw little reason to hope that customers would regain enough confidence in financial markets to return in force. They said they would cut an undetermined number of additional jobs, in addition to about 7,500 eliminated in the last 18 months.

"As we thought long and hard about the current environment, we did not have conviction that things were going to rebound quickly," said Christopher Dodds, Schwab's chief financial officer. "Too much wealth has been lost, too much sentiment has been damaged for there to be a quick and painless recovery."

..............
"This is a realization that the market isn't going to come back any time soon for the retail investor," said Richard Repetto, an analyst with Putnam Lovell Securities.
***************
Misetich
No sharp V recovery - no small v recovery - its a small h recovery

The Stock Bear is licking its chops

Got gold?

misetich
Chain Store Sales Fell in Aug. 10 Week
http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1322000Snip:

NEW YORK (Reuters) - Sales at U.S. chain stores fell during the first retail week of August, a report on Tuesday showed, as consumers shopped cautiously amid fears that the nation's economic recovery is sputtering.

U.S. chain store sales slipped 0.5 percent in the week ended Aug 10 after a 0.1 percent rise in the previous week, the Bank of Tokyo-Mitsubishi and UBS Warburg reported in their Weekly Chain Store Sales Snapshot.

"Sales were generally on-to-below plan for retailers," BTM said in its report.

***********
Misetich

Things are going from bad to worse. As consumers spending slows - the economy tanks. We are in the beginning of ANOTHER down global down cycle -

Lets stay on this Global economic slowdown TRAIL and see what happens to the othter TRAILS we have been following - JP Morgan, Citi, Brazil, US $, etc, etc.

Got gold?
misetich
Brazil's Country Ceiling Rating Cut to B2 by Moody's
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVhj8xUXQnJhemlsSnip:
By Jeb Blount
New York, Aug. 12 (Bloomberg) -- Brazil's credit rating was cut one level by Moody's Investors Service on expectation the country may fail to control its debt under the terms of a $30 billion International Monetary Fund loan agreement.
..............

``No matter which candidate wins this fall's presidential election, the new administration will face growing fiscal pressures,'' Moody's said in a statement. ``The next administration will face challenges in meeting IMF targets on a sustained basis.''

************
Misetich

JP Morgan, Citi, multi-nationals have tremendous exposure in Brazil

Lets stay on this HOT TRAIL - as the jugglers (market interventionists) appear to have more "balls and curves" thrown at them each passing day

Got gold?
misetich
Was 3G the Greatest Investment Disaster of All?: Matthew Lynn
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=blk&bt=blk&s=APVfEGhWTV2FzIDNHSnip:

By Matthew Lynn


London, Aug. 12 (Bloomberg) -- Over the distance of centuries, great investment disasters become cliches. What were they hoping to do in the South Sea exactly? What was so great about tulips? Who was Charles Ponzi and what was he selling? Nobody quite recalls. Yet, though the details are forgotten, the words enter the language as shorthand for stupidity, blindness and greed.

The initials 3G may soon join them. Decades after people have forgotten what exactly the mobile Internet was meant to do, the phrase will live on as shorthand for what happens when governments stoke speculative madness.

For, as the miserable saga unfolds, it is obvious that Europe's third generation mobile phone network is set to become one of the great investment disasters. Never in financial history will so much money have been wasted for so little return. Nor will governments have so recklessly and pointlessly destroyed a whole industry.

...............
Led by the U.K. and Germany, they raised huge sums -- 100 billion euros ($97.3 billion) across Europe. Analysts expect as much as a further 100 billion euros may be spent building the networks so expensively acquired. Sending men to the moon was a cheap experiment in new technology by comparison. It is now clear that around 200 billion euros (roughly 570 euros for every citizen of the European Union) is being wasted.
...............
Instead, we have this disaster, for which we can thank the U.K. Chancellor Gordon Brown. Not content with the slow-burn destruction of the British economy, Brown can also take credit for the 3G fiasco.

Brown is a man who is seldom content unless he is thinking up new corporate taxes or fiddling with the free market. Brown came up with the system of auctioning of licenses in the middle of a telecom bubble that was successfully copied by Germany. Other countries imposed stiff fees for the licenses after seeing how much the British and Germans were making.
............
All Europe's governments have achieved is the destruction of value among what were once the continent's most-coveted stocks. They have made the stock market collapse much worse in Europe than in the U.S., damaging their own economies. Instead of just gradually dropping plans to build 3G networks, at least one telecom executive should stand up and tell them so -- and take those governments to court to get their money back.
************
Misetich

From continent to continent - Ponzi schemes are alive and well - Japan, US, Europe

Physical gold - get some!

Got gold?


sector
[Federal Reserve's Two Biggest] Banks on the Hot Seat
http://www.fortune.com/indext.jhtml?channel=print_article.jhtml&doc_id=209054
FEATURE

With their involvement with Enron, WorldCom, and others, J.P. Morgan Chase and Citigroup have sullied their reputations.
FORTUNE
Monday, September 2, 2002
By Julie Creswell


Citigroup chairman Sanford I. Weill hasn't had much to say about Enron since the scandal broke. But in late July he made a remark that pretty well summed up his feelings: "I wish I'd never heard of Enron." In fact, Weill would probably love to erase WorldCom, Adelphia, Tyco, Qwest, and a number of other financial train wrecks from his short-term memory too.
++++++++++++++++++++++++++++++
Pretty good read but leaves out the real dirt on JPM. The Hamanaka Sumitomo copper fraud conviction of 1993, the tiny little fact that JPM carries derivatives with ten-fold less capital requirements than any other bank and doesn't have to say why.

Then there's the risk control programs that Jim Sinclair has brought to our attention. The tiny little glitch of a sub-twenty dollar JPM closing stock price destroying the US financial system�Oh�That!

Well�It's always something.
Belgian
And the ~GOOD~ news is........
Interest rates are further coming down as to service debt with...more, easy debt-confetti. Therefore, professors, central bankers, financial analysts, captains of inustry and presidents...must keep talking around the empty pots.

Trapped into the artificial, sucking, deflationary spiral, whilst money creation has no limits. Very nice scenario for a sustained Gold-Revaluation, well into the future. NO OTHER WAY OUT OF THIS !
BillinOregon
Roger Bently Arnold's Comments
Sorry to have violated the rule on advertising. It was an oversight on my part. BillinOregon


The FED

The FED meets today. Although I continue to believe the FOMC will lower the FED funds and FED discount rates by 50 basis points each this sentiment is clearly not shared by too many other FED watchers.

The dichotomy and diversity of opinions being voiced by FED watchers is an indication of just how far away from the FED's SOP they have gotten in the past year.

The biggest issue being dealt with today is not whether or not rates should be lowered but whether or not the FED will do it at this time. There is almost universal agreement now that the economy is approaching another recession, the double dip, that will require the FED at some time to go lower again.

So, why is there such diversity of opinion?

For the 9 years leading up to the events of September 11th the FED had an increasingly easy to understand transparency of SOP. We could usually determine what the most probable outcome of an FOMC meeting would be by the time we were half way between meetings.

The FOMC meets about every 6 weeks. So, usually within 3 weeks even without FED commentary we could determine what the FED would do.

One of those transparency issues was being behind the economic cycle as determined by empirical evidence when lowering rates.

Post September 11th the FED violated this policy and aggressively moved rates lower based on the anecdotal evidence that the events of September 11th would lead to deep economic contraction.

In other words the FED made the conscious decision to get in front of the cycle. I am not saying this is a bad thing. They had no choice.

But this decision clearly makes determining the FED's new policy decision much less transparent.

The call on the FED move today because of this is the most difficult to determine and requires a much deeper understanding of the individual members of the FOMC as Dr. Greenspans personal views.

With that in mind.

The pivotal decision today is whether or not to stay ahead of the empirical evidence of where the economy is now and assume that the economic reports will validate the slow down. In other words rely on the overwhelming anecdotal evidence of continued corporate slow down.

Or,

Create transparency again by standing fast on rates today and letting the economy continue to slow.

It's a brutal decision.

If the FOMC holds rates today it should be understood as an attempt to get behind the cycle again. In other words an acknowledgment that the post September 11th FED easing failed to attract corporate borrowers and failed to mitigate the economic cycle and that continuing to attempt to do this would then lead to future and probably deeper failures.

With the FED funds at 1.75% this wouldn't be a bad choice.

However, if they do this and the economy continues to slow into a new recession with an election just 3 months away Dr. Greenspan also risks helping the democrats win both houses of the congress in November and creating a lame duck presidency.

If that were to occur the democrats would surely stop fiscal stimulus by way of tax cuts and suffocate the economy into the next presidential election. In other words failure to move now or by September 4th, when the ECB meets Dr. Greenspan risks causing the loss of the ability to use fiscal policy where monetary policy has failed.

If he were to do this and the markets were to sell off and the double dip were to occur as an immediate result he would not be able to successfully separate himself from the cause of the double dip and would likely go down in history as a failure as Chairman.

Do you think he wants that?

The next FOMC meeting is September 24th. That meeting is within 6 weeks of the election. The FED has an unofficial and unstated but understood policy of not wanting to interfere with elections and attempts to maintain monetary policy going into an election.

Moving rates September 24th would therefore be out of character as well. But because this is clearly Dr. Greenspans last hoorah as Chairman maybe that wouldn't bother him.

Retail Sales

Contrary to popular belief there is little correlation between the FOMC and retail sales this morning. If the sales were well below estimates it could have validated a FED cut but good sales do not validate holding rates.

Why?

The FED is not targeting the consumer because the consumer is not the problem. The FED is targeting corporate borrowers. The strong consumer is what has allowed the FED to maintain FED Funds at 1.75% so far this year and not lowering it. Regardless of how strong the report was the FED would not be increasing rates. The best case that can be made for a strong consumer report is that it eases up the pressure on the FED but only slightly.

Corporations are already suffocating under the strain of increasing costs of capital and the reduction in their ability to gain access.

So, the bottom line for today's decision is very simple. Do they hold policy where it is and allow the economy to continue to slow running the risk not only of a double dip but a downward market shock at some point between now and the November elections or do they stay in front of the cycle.

Predicting the results of this FED meeting reminds me of the first Star Wars movie wherein Luke was blind folded and had to rely on the force in learning where the target was.

None of my comments here should be viewed as an indication I believe the FED should go lower. These comments are about what I believe the FED, the FOMC and Dr. Greenspan will consider today and why and what the outcome of that is.





Global policies will need to be eased if economic activity slows further, since the threat of deflation would increase
Roger's comments:

After being very bullish on the US economy since September 11th the Bank Credit Analyst has awoken to the risks posed to the US economy within the past month and turned 180 degrees from what the consideration was then. That is an abrupt change of opinion but one which I believe is accurate.

The 20-year uptrend in inflation during the 1960s-70s gave way to 20 years of disinflation in most countries. Japan was the exception of the major economies as it slipped into deflation in the 1990s, triggering severe economic and financial problems. This week's BCA Global Investment Strategy bulletin highlights that inflation is now close to zero in the U.S. and Europe and it is worrisome that the global economy is showing signs of stumbling, undermined by the excesses of the late-1990s and the resulting meltdown in equity and corporate bond prices. The lesson from Japan (and the 1930s) is to avoid deflation at all costs, underscoring that policies will soon need to relax if economic activity continues to slow.


http://www.bankcreditanalyst.com/public/highlights.asp?pre=PRE-20020812.GIF



Preventing Deflation: Lessons from Japan's Experience in the 1990s

Roger's comments:

This is an abstract of the FED paper published in June analyzing the similarities between Japan of the last 12 years and the US of the last 2. The highlighted section in the abstract offers a hint that the FED is clearly considering being proactive on deflation and staying ahead of the economic cycle as the probability of bad deflation or a downward cascading cycle increases. As inflation in the US is close to zero now the probability that the FED will adopt this policy shift very soon, perhaps today, is increasing.

Abstract: This paper examines Japan's experience in the first half of the 1990s to shed some light on several issues that arise as inflation declines toward zero. Is it possible to recognize when an economy is moving into a phase of sustained deflation? How quickly should monetary policy respond to sharp declines in inflation? Are there factors that inhibit the monetary transmission mechanism as interest rates approach zero? What is the role for fiscal policy in warding off a deflationary episode? We conclude that Japan's sustained deflationary slump was very much unanticipated by Japanese policymakers and observers alike, and that this was a key factor in the authorities� failure to provide sufficient stimulus to maintain growth and positive inflation. Once inflation turned negative and short-term interest rates approached the zero-lower-bound, it became much more difficult for monetary policy to reactivate the economy. We found little compelling evidence that in the lead up to deflation in the first half of the 1990s, the ability of either monetary or fiscal policy to help support the economy fell off significantly. Based on all these considerations, we draw the general lesson from Japan's experience that when inflation and interest rates have fallen close to zero, and the risk of deflation is high, stimulus, both monetary and fiscal, should go beyond the levels conventionally implied by baseline forecasts of future inflation and economic activity.
http://www.federalreserve.gov/pubs/ifdp/2002/729/ifdp729.pdf



Alarm bells ringing over US life insurers
By Jenny Wiggins in New York

Roger's comments:

Life Insurance companies are the back bone of the corporate bond market. As their costs of capital increases as their losses on existing bonds increase spreads are forced wider and an increasing number of companies will be forced out of the capital markets. Companies that can not access the capital markets because the cost of borrowing are prohibitive go out of business, period.

Alarm bells are starting to ring over the creditworthiness of US life insurers as the extent of their exposure to many troubled companies becomes clear.

Life insurance companies seemed until recently to be coping well with the economic downturn and the volatility in the US equity and credit markets. Their bonds had closely tracked the bonds of regional banks. But in recent weeks, their bonds have drifted wider than those of banks, indicating that investors are demanding a bigger premium in return for reduced financial flexibility.

http://biz.yahoo.com/ft/020811/1028185674936_1.html



American Airlines to Cut 7,000 Jobs, Cut Capacity 9%

Mass layoffs will not be isolated to the airline sector

By Andrea Rothman
Fort Worth, Texas, Aug. 13 (Bloomberg) -- AMR Corp.'s American Airlines, the world's biggest airline, plans to eliminate about 7,000 jobs, or 5.6 percent of the workforce, by March and trim its fleet following record losses since the Sept. 11 attacks.
Operative
Brazil Letter of Intent
http://www.imf.org/External/NP/LOI/2002/bra/02/index.htm
According to this document Brazil's economy was all great guns just 60 days ago. So why the recent emergency field trips by O'Niel and the 30 billion in IMF loans ????
steady
(No Subject)
EU Could Slap $4B In Tariffs On US Products In Tax Row
08/13/2002
BRUSSELS (Dow Jones)--The European Union could soon slap up to $4 billion in trade sanctions on U.S. products in a long-running dispute over U.S. tax breaks on exports.
The World Trade Organization says it will decide in the next week the exact amount of sanctions the E.U. could attach to U.S. exports. The E.U. expects the decision by Friday, while the U.S. says it won't come until next week.
The tax dispute centers on a U.S. program called "Foreign Sales Corporations," which helped scores of U.S. companies gain tax breaks on exports.
The WTO ruled last year that the system violates international trade rules. But it still must fix the penalties. The E.U. has demanded $4.04 billion. The U.S. believes it should pay only $956 million.
The E.U. doesn't have to retaliate after the WTO decision. But Europeans' frustration with what they view as U.S. foot-dragging in changing its tax laws could lead to punishing sanctions.
U.S. Trade Representative Robert Zoellick said last year trade retaliation would be like setting off a nuclear bomb in transatlantic trade relations. The two sides are already embroiled in a heated dispute over U.S. tariffs on steel imports.
Zoellick and his European counterpart, Pascal Lamy, have tried to reduce tensions. Lamy has indicated the E.U. won't retaliate as long as "progress and good faith" are shown, and if Congress appears committed to enacting a new law next year.
But deep divisions have emerged on how to revamp the law. Major U.S. companies, such as Boeing Co. (BA) and Caterpillar Inc. (CAT), recently warned Congress that thousands of layoffs and steeply lower stock prices could result from the loss of a trade tax break.
Max Baucus, D-Mont., chairman of the powerful Senate finance committee, said the administration of President George W. Bush has been "a little derelict" in expecting Congress to craft a replacement law on its own. He warned it could take "several years" to repeal the subsidy.
If the U.S. doesn't eliminate the subsidy, it could face E.U. trade sanctions.
So far, the WTO has delayed announcing the sanctions amount three times. A decision was initially expected in April. But the delays didn't worry U.S. or E.U. officials. They were happy to avoid the tax break conflict at the height of the steel dispute.
The E.U. also didn't want to antagonize U.S. lawmakers, who were about to vote on so-called trade promotion authority giving Bush a freer hand to negotiate trade deals. The measure limits Congress to a no-amendments, up-or-down vote on any trade pact. It's crucial for the launch of new global tariff-cutting talks, called the Doha round. These talks are aimed at lowering trade barriers on farm and industrial products.

Operative
An Army of ONE
http://washingtontimes.com/world/20020813-660018.htmThe slogan for Army recruitment may be much more than a catchy phrase if the EU gets it wishes. Parents of U.S. soldiers may soon get to see thier sons/daughters thrown in front of an International Criminal Court. Alone, the new Army of One will have to pay to defend itself against an international tribunal force. Will basic training add new courses for the recruits in basic legal defense ?
Best parents begin to buy a whole lot of Gold, it may be needed to pay to get your children out of some foreign jail or at least get some of the charges dropped. First we put our American sons and daughters under the control of the United Nations, now it looks like we will allow them to be handcuffed and tried by International Courts.
Operative
@ steady
" Major U.S. companies, such as
Boeing Co. (BA) and Caterpillar Inc. (CAT), recently warned Congress that thousands of
layoffs and steeply lower stock prices could result from the loss of a trade tax break."

steady, is this the Boeing that sent aircraft and American lives to bomb the german tanks not so long ago? Is this the Caterpillar that then shoved the german tanks into the ditch so American GI's could save the land of the European?
Tell me it ain't so.

I am beginning to think we might want to make a few stops on the way to visit Saddam.

I know I am off topic at the castle. Going to the corner blackboard now. Thou Shalt Not Write Off Topic Notes, Thou Shalt Not Write Off Topic Notes,......


Gandalf the White
Seige Engine (Continued)
Gold STILL above US$300.The Wiz Gandalf comes away from the meeting of the Council with a grimace on his face. He has an assignment that only he can perform, even so, it shall be almost impossible. He summons his horse Shadowfax, and with encouragement to the Goldhearts, chants the words of "FREE GOLD" as he departs from the captured Castle in hast. He shall be gone on this "Operation" for a short period, BUT, shall return !
<;-)
Old Yeller
The Economics of a Global Empire
http://www.atimes.com/atimes/Global_Economy/DH14Dj01.html
"The result of this distortion driven by the monetary system is a decline in real living standards of producers in all of of the exporting and indebted world and in the US.Indeed,reward has been divorced from real effort and reassigned to manipulators.There have been enormous strides in productivity around the globe but few of them came from the US.It has been the seigniorage of the dollar reserve system granted to the US without economic discipline that allowed the import of productivity from abroad and the superficial appearance of prosperity in the US economy."

To paraphrase FOA,as long as your rich,bullying neighbor does not lose his job,you will not lose all your money.

It's just too bad that his job is built upon a foundation of deception,manipulation and abuse of power.
Waverider
Sir Gandalf
As Lady Waverider plans and strategizes, she awaits Sir Gandalf's return from his secret mission. May you and Shadowfax go in speed with a shield of protection and an army of Golden Angels watching over you!
steady
stocks,bonds bahhhhhhhhhhhh gold yaaaaaaaa!
London, 13 August 2002 -- Moody's today placed the Ba1 ratings of the GBP 200 million and USD 302.4 million AES Drax Holdings Ltd senior secured bonds and the GBP 905 million senior secured InPower Ltd bank debt on review for downgrade. The ratings of the GBP 135 million and USD 200 million notes of AES Drax Energy Ltd have also been put on review for downgrade.

The rating actions reflect Moody's concerns about the prospects for UK electricity market prices and a number of uncertainties including the hedging contract with TXU Europe, the insurance waiver for units 3 and 4, and the receipt of sufficient cash at AES Drax Energy in time to ensure that the next interest payment due at the end of the month is met in full.

Drax is a 3960MW coal-fired power station in the north of England. It is the largest power station in the UK, with revenues in 2001 totalling approximately GBP 586 million.

didnt we see a argentia energy company yesterday have bond problems? hmmmm how come we never see anyone who is holding gold have default problems?
steady
who can ya trust?
yesterday they say no we are not. today well..........

US Seeking Bids For Red Sea Military-Cargo Delivery

08/13/2002

WASHINGTON (Dow Jones)--The U.S. military is trying to charter a commercial ship to carry military hardware to the Red Sea, contrary to indications Monday it wasn't, a Navy spokesman said Tuesday.

According to a summary of the solicitation, the Department of Defense has requested a U.S. or foreign-flagged roll-on/roll-off vessel with about 48,000 square feet of cargo space to carry hardware from the U.S. Southeast coast to a Red Sea port, discharging Sep. 15-21.

The cargo would include helicopters, rolling stock, breakbulk cargo and ammunition, the summary says.

A spokesman for U.S. Central Command declined to specify the Red Sea port where the delivery would be made and described the delivery as "routine in nature."

On Monday, a Pentagon spokesman initially denied media reports the U.S. Navy was trying to charter a large ship to carry military hardware to Red Sea ports. The reported solicitation had stoked speculation the U.S. is preparing for a military strike against Iraq and helped lift front-month New York Mercantile crude oil futures about $1 a barrel to $28/barrel, their highest level in three weeks. Nymex crude was at $27.93/bbl Tuesday afternoon, up 7 cents during the day.

Last week, the Navy's Military Sealift Command awarded Maersk Line Ltd. of Norfolk, Va., a five-year contract to operate eight large roll-on/roll-off ships to "strategically preposition" Army equipment in the Indian Ocean near Diego Garcia.

best get your gold while its still heavy for the price!
cyberbat
What are the odds
Can anyone in this august body tell me what the odds would be on gold closing in NY today at the identical sme price the day before. Do they really have the power, money, and know how to pull a feat like that off? If so, we are all in the wrong metals and need to start gathering up aluminum cans for recycling!! This manipulation is unbelieveable!!
Cyberbat
Waverider
Cyberbat
Actually it's 3 days running now - August 9th, 12th, 13th all close at $314.10 hmmm....
Socrates964
(No Subject)
Who are 'they'? - could be the bears, could be the bulls. Gold is showing a regular pattern of higher lows, which is bullish, particularly against the background of rising DJI/QQQ.

If I were in the shoes of the cabal, I would give a demonstration of strength by breaking down the rising trend. This looks more like a demonstration of weakness on their part.

Note Jim Sinclair's view from last week that JPM over $26 would bash gold down to $288-90. He called the bottom on gold to within $3, yet this prediction is way out, pointing to underlying strength in the bullion market.
Tate
Greedy US bankers
There is a message written in POG closing price of the last 3 trading days.
Simply it is not random free market event.
Federal Reserve, Government of USA and their so called prime commercial banks want every body to see POG is manipulated and under their control.

Problem is , dr. Greenspoon, you printed too much of green colored paper you call USA dollars. It is time to officially devalue them let say 1:100 against real money - gold, which you can not counterfeit and mass-produce.
Dr. Grennspoon , you have another way: follow your predecessors and directly rob you innocent citizens of USA of their gold.

Not too many choices left. Either way, History will remember you as biggest robber and confiscator of peoples wealth.
darkhorse
lady waverider; cyberbat
Let's go one better; it's actually been four days out of the last five...it closed at $314.10 last Wednesday also, but somebody didn't get the word last Thursday.
Black Blade
Backlash in Saudi Arabia
http://www.csmonitor.com/2002/0812/p09s02-coop.html
Snippit:

LONDON � As revealed in a recent front-page story in The Washington Post, "Briefing Depicted Saudis as Enemies," neoconservatives in the US are gaining a wider audience for their attempts to demonize Saudi Arabia. Such jingoistic talk runs counter to the position of the Bush administration, which recognizes Saudi Arabia as a vital ally. Still, the talk is fanning resentment in the kingdom and making it more difficult for the royal family to cooperate with the US on a range of initiatives, such as regional peace, economic development, and maintaining stability in the oil markets.

Saudis see a growing animosity in American government and media. A string of editorials and analyses in major US publications harshly criticize the kingdom for its perceived role in the 9/11 attacks � namely, that Saudi Arabia supports, finances, and politically backs terror groups around the world � claims that are unsubstantiated. Pundits such as Bill Kristol, editor of the influential Weekly Standard, have advocated the removal of the Saudi royal family.

But more than 50 years of cooperation with the United States should provide impetus to work with, not alienate, this vital US ally. As the world's largest exporter of petroleum, Saudi Arabia has played a stabilizing role in global energy markets for decades, guaranteeing America reasonable oil prices.


Black Blade: Of course the Saudis have denied access to Saudi for military operations against Iraq and the radical Wahabbi clerics and sympathizers of Al Qaeda are gaining influence. There is also a deep divide between the pro-west and Islamic radical sides of the Saudi royal family. This is a big concern as King Fahd has one foot in the grave and several royals are jockeying for position before the king kicks the bucket. Meanwhile the POO is rising on ME concerns.

Black Blade
Dollar Falls After Fed Says Economic Weakness Is Bigger Threat
http://quote.bloomberg.com/pgcgi.cgi?T=markets_newsfeat99.ht=&ptitle=EMU%20Top%20Stories&touch=1&s=APVlX1RXzRG9sbGFy
Snippit:

New York, Aug. 13 (Bloomberg) -- The dollar fell against the euro for a third day as the Federal Reserve said weak growth is a greater risk than inflation, fueling concern that the recovery in the world's biggest economy may falter.


Black Blade: As outlined in today's Daily Gold Market Report. Meanwhile the equities markets are getting hammered on the Fed decision. As I said previously � no matter what the decision, this was a "win-win" for Gold.

Black Blade
Saudi King Fahd's Health Failing, Diplomats Say
http://www.reuters.com/news_article.jhtml?type=search&StoryID=1324258#

Snippit:

DUBAI (Reuters) - The health of Saudi Arabia's King Fahd is deteriorating despite his recent recovery from eye surgery, diplomats and a Saudi opposition group said Tuesday. The 79-year-old king officially runs the world's largest oil-exporting country, but his half-brother Crown Prince Abdullah has actually been the kingdom's de facto ruler since King Fahd suffered a stroke in 1995. On its Web site, the London-based opposition Movement for Islamic Reform in Arabia (MIRA) said the king was not as strong as before and his mental health had deteriorated to the point where he no longer recognized some of his children. But like most other leaders in the secretive and conservative Gulf, Abdullah has done little to reform Saudi Arabia's archaic political system despite complaints from some Saudi intellectuals and opposition groups.


Black Blade: This could get "interesting" as Abdullah has few allies within the family and when the free world oil supply is at risk, it could be of vital concern to the world's economies what happens when King Fahd drops over. Abdullah will have to play a very delicate balancing act.

Jon
NYSE applauds close
Always get a kick out of those on the dias applauding over 200 point drop on the dow. Sure looks like betting on rise in POG is a hopeless venture. Shouldn't be, but we're dealing with out and out thieves.
Gandalf the White
WOWSERS
LOOK where SPIKE is Now !
The NY ACCESS MARKET !
Jump SPIKE, JUMP !
<;-)
Operative
Three Cheers for the Manipulators
I wish "they" would get serious about this oscillating gold price and knock it really down. It is tiresome watching that silly "spot" continue in its attempt to jump over the fence. I wish he would break a leg and just lie down like a good doggy. Until I have filled every nook and cranny, every hiding place at my abode, I want the price for the 100% Genuine, hold its shiny solid in my hand, weighs too much for its price, I want the price DOWN.
I know its difficult for the manipulators. Like trying to keep the pounds off I know the battle they wage. But I cheer them on, I encourage them to triple thier efforts, pull out all the plugs, get tougher when the going gets tough, expend thier all in this fight to keep the price of Gold low. Do it for the 'gipper", get a tatto: "I did it for mom", do it even though you know in the end you will lose go out fighting, be like Nike and Just do. Rest not, sleep not, the entire world fiat system is at stake here. Clear out the vaults, leave not a single coin or bar behind in your efforts to drive the price down. Here, look at this one year chart. Do you like what you see? Do you like getting your tail kicked? Can anyone of you say you have been giving this your best? Look at the scoreboard, are any of you happy to see that 314!?? Does 314 feel good ?? Do you think your girlfriends are going to kiss you after this performance ? No they are not!! They will probably dump you for one of the band members or one of the CNBC Cheerleaders !! Now get back in the game and lets see some serious down OK? !!
(Geesh, what a bunch of whimps)
Black Blade
Gold Higher

Spot is rocking and rolling higher +$1.60 an ounce so far, now at $315.70 an ounce. The disappointment on rate cuts has hammered the equities markets and the US dollar is falling. Looks like it should be quite "entertaining" tonight.

- Black Blade
Operative
GW, dont you know there are leash laws...tie that dog up.
Would someone PLEeeaase get Gandalf a fat, lazy, really old cat. No wonder the Fearsome Manipulators team is having so much trouble, they got some dog nipping at thier heels all the time. Not to mention the complaints I get from the teams trainer about cleaning the cleats after the game.
Blackjack
CRB Index breaking out to new highs
With the CRB Index , commodities, rising and the dollar
falling, PMs should do well. Interest rate cuts in the coming
months will help PMs as well.

Black Blade you beat me to that post on King Fahd's health.
That is an important story!
Gandalf the White
Sir Operative
The Hobbits still LOVE YA !
<;-)
Black Blade
Drought Hits Midwest Crops

I haven't pulled down this stroy yet, however, the reports are that this year will be especially bad for US crops as a long drought is taking a severe toll. It appears that food prices will be rising this fall with the exception of meat as ranchers will cull herds as feed becomes more expensive. The coming glut of livestock to slaughter houses will be a bargain for consumers, however, grains and other consumables will become more expensive. Later in the year all food prices could rise significantly. As always, get out of debt, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program for nonperishable food and basic necessities.

- Black Blade

Off to the gym!!!
da2g
314.10 Gold Close
Often, closing unchanged is a harbinger of a large move, or at least a dramatic change in price direction (at least with commodities). How this plays out with gold is anyone's guess.
misetich
Boeing, Parts Makers Fall as Airline Industry Slumps
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVlu_RXPQm9laW5nSnip:

By Rachel Layne


Chicago, Aug. 13 (Bloomberg) -- Shares of planemaker Boeing Co. and equipment makers such as Honeywell International Inc. had their biggest drop since the Sept. 11 attacks on concern airlines will pare fleets further after American Airlines announced cost cuts and US Airways Group Inc. filed for bankruptcy protection.
...............

``The big question right now is `how deep does the cyclical trough in aerospace get?''' said Mark Demos, an analyst at Fifth Third Investment Advisors, which holds shares of United Technologies and other aerospace-equipment makers among its $34 billion in assets. ``Airlines are getting their houses in order and are making the hard decisions to be profitable.''
***********

Misetich

The news report doesn't mention concersn of Accounts Receivables with plagued airliners

How many part manufacturers are hurt by Boeing slowdown? Travel industry? Entertainment industry (theme parks)?

Got gold?


Belgian
An amateur on economics ?
Fiscal and monetary policy-makers have made one BIG mistake in their managements : They wanted general prosperity to grow *to fast* and *to deep* ! This is a self-feeding proces, where the ritme has to be increased, permanently.
This leads inevitably to more and more irresponsible decisions at crucial phases in the development. Mistakes in policies are not given enough time to correct themselves. And therefore it becomes a pyramid of mistakes on rotten fundamentals. If there is grosso modo as much debt as GDP (40 trillion $) per year...everything goes off limits.
There is no way back or any possibility to slow this down and re-direct the global economy. So many relations are distorted and far out of balance.

Inevitable result is massive defaults plus hyperinflation.
Exactly what is happening, *silently* and without much media-coverage, in Argentina. Any policy from now on can only decide on wich will cause what : hyperinflation leading to massive default or vice versa ? Impossible to manage the mixture of a little bit of inflation and some defaults. I do think it is exactly that, what those policymakers are trying to do at present ? Can it be succesful ...again ? Gold will decide this for them...us !
Isn't that reason enough (total collapse) to keep on trying to cap POG ? Why do they hate Gold ? The above amateur-economics, might be a possible answer or at least part of it.
Operative
Sppsssttt ! Hey Gandalf, come hear a sec will ya?
Look Gandy, I luv ya too man allright? But heres the deal. We probably got some scouts from the big leagues checking this game out. Least thats the latest rumour goin round. I just dont think any sort of PDA ...thats Public Display of Affection is a good idea out here on the field. Thats one of the reasons why the players stopped slapping each other on the butt. Know what I mean? It just doesnt project the tough guy image we try to create with the Fearless Manipulators and all. Now....hang on a sec...someone give me that bullhorn. "Hey Greenspan!! Do you remember ANY of the plays we went through last week??!!%#$@" (mumbles huh!...more like fumbles! Why cant he be like that Goldbug QB Blackblade, that kid is always working out and got his stuff together.)
Looks like the Goldbugs put a few more on the board, great.
Almost halftime, Phew!! Hey, somebody bring me my horse.
(opps, wrong storyline )
misetich
Citigroup Subpoenaed on Grubman IPO Sales to WorldCom Officials
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVlvjBbfQ2l0aWdySnip:

By Neil Roland


Washington, Aug. 13 (Bloomberg) -- Citigroup Inc. received a congressional subpoena for documents related to stock analyst Jack Grubman's sale of initial public offering shares to WorldCom Inc. executives.

The House Financial Services Committee, which issued the subpoena, is investigating whether Grubman allotted IPOs to favored executives in return for investment-banking business for Citigroup's Salomon Smith Barney Inc. unit. Lawmakers also have accused Grubman of urging investors to buy WorldCom stock because of his ties to former WorldCom chairman Bernard Ebbers.

The subpoena, which gives Citigroup until Aug. 23 to respond, follows the largest financial services company's failure to respond adequately to a voluntary request for information sent last month, a committee spokeswoman said.

``Citigroup's response was incomplete, so we are subpoenaing more information,'' said Peggy Peterson, a spokeswoman for the panel and its chairman, Ohio Republican Mike Oxley.
............
The House committee also has asked WorldCom, which made the largest bankruptcy filing in U.S. history, for records related to its executives' purchases of IPO shares from Salomon. WorldCom's response has been incomplete, ``But we're satisfied they're responding in good faith,'' said Peterson, Oxley's spokeswoman.
***********
Misetich

Stonewalling, delaying, frustrating tactics by a "few rotten apples" Greenspan classified it as infectious greed- others would call it FRAUD!

Trillions of investor wealth has vanished - and probably we will see trillions more evaporate as the downward economics make it impossible for corporate misdoers to hide their dirty accounting tricks

In this uncertain envioronment one investment glows above the rest - PHYSICAL GOLD - it has withstood the test of time! What are other money/currency can make that claim?

Got gold?



TownCrier
FOMC Press Release -- standing by with the grease
August 13, 2002

The Federal Open Market Committee decided today to keep its target for the federal funds rate unchanged at 1 3/4 percent.

The softening in the growth of aggregate demand that emerged this spring has been prolonged in large measure by weakness in financial markets and heightened uncertainty related to problems in corporate reporting and governance.

The current accommodative stance of monetary policy, coupled with still-robust underlying growth in productivity, should be sufficient to foster an improving business climate over time.

Nonetheless, the Committee recognizes that, for the foreseeable future, against the background of its long run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness.

Voting for the FOMC monetary policy action were Alan Greenspan, Chairman; William J. McDonough, Vice Chairman; Ben S. Bernanke, Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jerry L. Jordan; Donald L. Kohn, Robert D. McTeer, Jr.; Mark W. Olson; Anthony M. Santomero, and Gary H. Stern.
sector
@da2g About the $314 POG Close(s)...
...Setting Up Low Implied Volatility......to be as close to zero as the manipulators can get their options purchases to be really cheap. They let pog run to a channel high of...say...$315 or $316 in the after hours "Overseas" markets, then smash it back down by the close.

This was also seen during the run up to the Washington Agreement...weeks at a time with $.50 daily ranges.

Today however the totality of the various indicators seems to be suggesting Ominous Portends.

We here focus on the precious metals but it is now likely that a banking accident will trip the wires and risk control programs of the big Fed banks and the "Domino Effect" will carry into the PMs and then wreck the whole US financial system.
+++++++++++++++++++

BTW: I Heard today that the WSJ mentioned Dinsa Mehta [Their former derivatives Ghuru] in a negative report on JPM. Don't have the link. Maybe someone could post the story?
+++++++++++++++++++++++++

I had lunch with a senior editorial page editor at a major Republican South East newspaper today. Gave him the Board Room presentation over a really good veggie soup. He is now a gold-bug convert complete with anti- hedging, and especially physical knowledge. The big question is whether the paper's out-of-town owners have the courage to commit a "Revolutionary Act". Probably not�at least this early.

To wit: "In a world of universal deceit, telling the truth is a revolutionary act", George Orwell, "1984".


Blackjack
Saudi has a budget deficit?
Saudi Arabia's budget deficit for 2002 could reach five billion dollars, forecasted the Saudi American Bank. The Saudi government's estimation is significantly higher at $12 billion, based on a $17 price per barrel of oil. The Economist Intelligence Unit predicts that the Kingdom's deficit will reach $6.6 billion.

Saudi Arabia's numerous years of budget deficits have led to a national debt approaching SR 638 billion ($170 billion), almost equal to the country's gross domestic product (GDP). As a result, debt servicing, which exceeds SR 15 billion (four billion dollars) per year, seriously erodes the budget. � (menareport.com)
__________
This has got to be a world record. All that oil and they are in debt?
Good Grief. Those Princes must surely be burning through a lot
of cash with the jet set lifestyle. King Fahd travels with
200 TONS of luggage, furniture,limos,etc.
Cometose
(No Subject)
checkmate
Pete W
Changing the colour of US & Japanese 'money'.
Good Morning. I've heard that both the USA and Japan have, or will, change the colour of their bank notes. Also read somewhere on the net that this has implications for personal freedom and the use/possession of gold (but it didn't explain why this could be the case).

Just wondering if this subject has been mentioned on this forum, and if anyone can explain what the ramifications could be of such a change.
Thanks.
Pete
Blackjack
NY Post: Fed knows inflation ticking up slowly
http://www.nypost.com/business/54580.htmAlso, the Central Bank is being told that inflation is on the rise even as the economy is crawling along. Industrial commodity prices are rising quickly, although off their recent highs.

And housing costs are moving up rapidly as people take their money out of the financial markets and buy real estate.

The best guess: the Fed today will express concern about the economy. Later in the year, if the economy doesn't start improving, it will flood the nation's money supply with even more liquidity in hopes that banks can pass the dough on to anyone who wants to expand.

If the Fed really wants to get aggressive it could eventually allow banks to reduce the reserves they hold against loans. That would boost bank profits as well as free up money for lending.

But a move like that would definitely signal panic.

Let's say I'm wrong and rates are cut. Should investors be happy?

The first 11 rate cuts did not keep the market from sinking. Why would the next reduction be so special?

In fact, a cut today might raise substantial fear that the Fed knows something the rest of us don't.

And since tomorrow is the deadline for corporate executives to publicly verify their corporate books, any action by Fed Chairman Alan Greenspan this week might lead people to think some nasty corporate surprise is brewing.

The Fed is boxed in: damned if it does, damned if it doesn't - and unable to do anything anyway.
___________

More liquidity? Oh my.
Dollar falling and commodity prices rising. Nat Gas prices will
rise after storage numbers come down. Positive for PMs going forward.
___________

The change in the color of currency is about counterfitting.
misetich
ABC/Money-US consumer confidence lowest since 1996
http://www.forbes.com/newswire/2002/08/13/rtr694727.htmlSnip:

NEW YORK, Aug 13 (Reuters) - The confidence of U.S. consumers in the economy deteriorated to its lowest level in more than six years last week as Americans grew wary of the nation's financial prospects, a poll released on Tuesday showed.

The ABC News/Money magazine Consumer Comfort Index fell to -15 in the week ended Aug. 11 -- the lowest since April 1996 -- from -13 the previous week.

The faith of Americans in the economy has waned in recent months as corporate scandals, a swooning stock market and lackluster economic news take a collective toll on confidence
*********

Misetich

Will this manifest itself in lower consumer spending? more unemployment? lower earnings? lower stock market values?

Got gold?
Blackjack
Inflation jumps in UK
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&c=StoryFT&cid=1028185715982&p=1012571727201The UK's underlying rate of inflation rose sharply last month to 2.0 per cent, after falling to a 27 year low of 1.5 per cent in June. The rise was above expectations but still below the Bank of England's target rate of 2.5 per cent..

Changes in food prices had the largest upward effect on the annual rate, The Office for National Statistics�said, with�a smaller fall in seasonal food prices than last year.� The impact of this year's summer sales�was also less marked than usual, with�less stringent discounting by clothes and household goods retailers.
______________
Worldwide drought is driving up food costs.
We could see a jump in food and energy here, if the feds
don't cook the numbers.
Operative
@ misetich, Well Put & Well Said Sir!
"Misetich

Stonewalling, delaying, frustrating tactics by a "few rotten apples" Greenspan classified it as
infectious greed- others would call it FRAUD!"

It appears temperatures are rising on the Hill. I had a few beers with a friend who works for a Congressman and is well acquainted with the Beltway Bunch. He says Congressional folks are dragging thier feet to a large degree with the corporate scandel issue. His opinion was there were lots of skeletons in the closet so its business as usual. They have tried to hype a few major points and sell the idea to the sheeple that progress is being made but at the same time trying to decide how to handle some of the really dirty laundry in private. However, he says mail is increasing and most of it reads negative. People are wanting the truth, now, and the "perp walks" are not appeasing them in thier desire for heads to roll. With nearby elections on the horizon, look for additional news stories painting your local rep as working hard to get the bottom. I asked him what he thought about GATA/Gold. He was basically clueless. We need to do a better job of getting the message out.
Blackjack
Crude Oil jumps on API report, inventories DOWN big
New York, Aug. 13 (Bloomberg) -- Crude oil rose after the American Petroleum Institute reported the biggest decline in U.S. inventories in more than a year.

The drop of 9.5 million barrels, or 3.1 percent, to 295.6 million barrels in the week ended Friday left U.S. supplies at a 1 1/2-year low. Analysts surveyed by Bloomberg had expected the report to show little change in inventory levels. Prices already were at a 12-week high on concern that the U.S. is readying a military attack on Iraq.

``Prices jumped very quickly on the figures,'' said Jim Steel, director of commodity research at Refco Inc. in New York. The inventory decline comes ``on top of concerns about a war with Iraq.''

Crude oil for September delivery rose 40 cents, or 1.4 percent, to $28.30 a barrel as of 6:00 p.m. in electronic trading on the New York Mercantile Exchange. Prices rose as high as $28.49 in the minutes after the report was released, the highest intraday price since May 20.

``There is a technical element as well,'' Steel said. ``Prices got a boost from decisively breaking a previous high of $28.18'' for the September contract.

The inventory decline was the biggest since the week ended June 8, 2001, and pushed supplies to their lowest level since March 2001. Most of the decline, 6.1 million barrels, occurred on the U.S. Gulf Coast, the nation's refining and importing heartland.
_________
Lets get ready tooooo ruuuuumble!
slingshot
Siege Engine
Gold above $300.00Gandalf the White and Shadowfax galloped into the countryside and south they rode. It was a fair ways to where they were going but a safe one till they find the ones they seek. This mission for Gandalf the White was for him alone, for he seeks his own kind. Men of science and nature. Men that hold secrets and share the knowledge only between themselves. They have been driven to a place, away from all.
Surrounded by stories to keep prying eyes out.
Gandalf will have to convince them to help him.
They seek The Valley of Clouds. Sometimes short trips turn into long ones.
misetich
American Airlines to Cut 7,000 Jobs
http://abcnews.go.com/wire/Business/ap20020813_1599.htmlSnip:

D A L L A S, Aug. 13 � Seeking to stem 18 months of heavy losses, American Airlines said Tuesday it would cut 7,000 jobs and trim more flights as it tries to slim down and compete better with low-cost carriers.
**********
Misetich

The airline industry is in DEEP trouble - prices are being slashed (deflation) - costs are rising (oil) - business travel is plunging
When will this end?
When excesses are purged out. It won't be pretty.
How will this affect gold?
Lets wait for JP Morgan, Citi, Duetshbank etc. gold derivatives blowup to give us the answer!

Got gold?
misetich
BREAKING NEWS: IBM to Cut Over 15,000 Employees
http://abcnews.go.com/wire/Business/ap20020813_1604.htmlSnip:

IBM Corp. Confirms Plans to Cut Over 15,600 Jobs Due to 'Recent Decline in Coporate Spending on Tech Services'
N E W Y O R K, Aug. 13 � After months of surreptitious layoff notices, technology giant IBM Corp. revealed that it's in the process of cutting more than 15,600 jobs, or 5 percent of its work force.

The total layoff figures, which IBM never announced publicly, appeared in a Tuesday filing with the federal Securities and Exchange Commission. Employees losing their jobs were notified in several batches during the second quarter, which ended June 30.
...........
"The work force reductions are intended to drive productivity and efficiency throughout the company," said IBM spokeswoman Carol Makovich.

IBM blamed the cuts on "the recent decline in corporate spending on technology services."

By Sept. 30, when most of the laid-off workers are expected to have departed, IBM's work force will have been cut from 320,000 to around 305,000, Makovich said.

Among the sites losing employees are IBM plants in Burlington, Vt., Endicott and East Fishkill, N.Y.; Lowell, Mass.; Raleigh, N.C.; Austin, Texas, and Encinitas, Calif.

*************
Misetich

Adios to ANOTHER stalwart - Big blue balance sheet has been deteriorating for years though they "managed" to beat expected earnings continuosly -
Most fund managers have taken refuge under the Dow nifty 30 ala 1974 - and the Big Bad Bear has been coming at them for the last month!

Got gold?



misetich
Cardoso Seeks Backing for IMF Accord-The second-placed candidate, former Finance Minister Ciro Gomes, said Brazilians were "being tricked into thinking that (they) are being saved by international money."
http://abcnews.go.com/wire/Business/ap20020813_1565.htmlSnip:

BRASILIA, Brazil Aug. 13 � President Fernando Henrique Cardoso asked the country's leading presidential candidates to meet for talks next week in an attempt to firm up support for a new accord with the International Monetary Fund.

The $30 billion agreement is geared to help Brazil better weather financial jitters during the transition period between the Oct. 6 election and Jan. 1, 2003, when Cardoso's successor takes office.

The deal last week produced a short-lived euphoria in the nation's financial markets, but Brazilian stocks and currency fell when candidates pledged only lukewarm support for the agreement.

The real fell Tuesday for a third consecutive session, closing 0.5 percent lower at 3.165 to the dollar, while the main Bovespa stock index was down 2.8 percent.

The front-runner in opinion polls, Luiz Inacio Lula da Silva of the leftist Workers Party, said the IMF agreement was necessary but criticized the fund for "orthodox and recessive concepts."
***********
Misetich

IMF Brazilian "rescue" is more Hot Air than substance - "strings attached" are typical of IMF suffocating throat hold-
Could it be the IMF is underestimating Brazilians culture and way of thinking?

Lets stay on this HOT TRAIL

Got gold?

R Powell
misetich
Oh no, not Big Blue! This addition to the bone pile may provoke a reaction. Some may think that if the biggest member of the DOW is not doing well, how well can the economy be recovering? I guess we'll see tomorrow.
Rich
Siochaina
PM Gyrations
Unusual activity so far tonight ...all metals showing up ...and also some spiking back and forth ....not the standard for the Far East....curious!
misetich
Moody's: Brazil Country Debt Ratings Cut To B2 From B1 Aug 13 / 8:34 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029242040000&sn=1&banner=mainwireSnip:

NEW YORK (MktNews) - Moody's Investors Service downgraded Brazil's
country ceiling for foreign currency bonds and notes to B2 from B1, and
the country ceiling for foreign currency bank deposits to B3 from B2.

Moody's said that no matter which candidate wins this fall's
presidential election, the new administration will face growing fiscal
pressures that could translate into risks in the external sector,
especially as currency depreciation increases the burden on dollar
borrowers.
.............
Moody's noted that although the government has many tools at its
disposal to deal with the country's debt dynamics, a number of these
might heighten inflationary expectations. Although inflation in the
short-run might have a salutary effect on government revenues, given the
familiarity of the Brazilian populace with inflation, any near-term
benefits of "money illusion" might prove short-lived. This scenario
would likely result in pressure on the exchange rate or interest rates.
*******************
Misetich

Benefits of "money illusion" might prove short-lived. Oh oh the emperor has no clothes!

We haven't heard the last of this - hello JP Morgan and Citigroup

Got gold?
USAGOLD
News & Views: Forecasts, Commentary & Analysis on the Economy & Precious Metals
http://www.usagold.com/Order_Form.htmlJust a short note to our clientele to say that News & Views is on its way by snail mail -- some of you may have already received it. Because our mailing list has grown substantially, we were forced to make News & Views a Client Only letter. However, those of you requesting information packets (link above) will receive one issue gratis as part of your introduction to the firm. We welcome your inquiry.

If you do not receive a copy in the next few days and you are a client -- defined as an individual who has made a purchase at the firm -- please let Jill know (jill@usagold.com or call the office) We are trying to complete our client mailing list and want to be certain we haven't left anyone out.

Snippet from the September issue:

Welcoming Remarks

Well, my fellow goldmeisters, we have come full circle. At one time (not so long ago), this newsletter was our most direct and only form of communication with our clientele. Then along came the internet and our USAGOLD web site -- a media which became so popular that we temporarily suspended publication of this hard copy letter in order to think through its usefulness. Thereafter, the information flowed at our website like water over Niagara Falls -- so copious and overwhelming in volume that it became difficult for many readers to distinguish what was truly important and what wasn't.

So now, in this parched summer of our discontent, with fires burning in the hills as well as the financial marketplace and gold decidedly showing its better side, we emerge to introduce a new role for News & Views -- sifting through the avalanche of information being published these days and organizing it into something reader-friendly for our busy clientele. We hope you enjoy and gain from this first issue of our resurrected monthly offering. May you welcome it like the return of an old friend.




darkhorse
ladies and gentlemen, your thoughts please...
I've been thinking lately (and yeah, sometimes that gets me into trouble)...how do different people store/stash/hide their PM's? We, of this mindset, don't have a lot of company to compare notes with, not from family and friends/co-workers anyway. This question arose from different angles of thought; it has to be kept safe/secure from thieves, it needs to be "readily mobile" should the need arise to grab and run, everyday "portability" (more useful than travelers checks?), transparency should the more, uh, "sophisticated" thieves want it back (confiscation?), etc. I'm not wanting to invade anyone's privacy and I'll be the first one to discourage "state secrets" shared publicly, so Randy, if anybody asks for my e-mail address please forward it to them. TIA for any and all help.
silvercollector
Best FED article I have seen
http://www.washingtonpost.com/wp-dyn/articles/A10183-2002Aug12.htmlsnip;

"The third error was the Fed's belated attempt in early 2000 to get some control over frenzied events -- an error because it did so by hammering the real economy with interest-rate increases, rather than restraining the financial system directly. Greenspan claimed to detect a phantom price inflation in goods and services. Actually, the only price inflation was in the stock market. The obvious injustice was punishing the many for the excesses of a relative few, driving the broad economy into recession in order to calm down the out-of-control financial system."
Black Blade
WHY GREENSPAN AND FED CAN'T CUT INTEREST RATES
http://www.nypost.com/business/54580.htm

Snippit:

THE Federal Reserve would love to cut interest rates tomorrow. But it can't, so it won't. You've read a lot lately about whether the Fed will decide to cut rates for the 12th time in this recession. But here's the truth: The Central Bank has gotten itself into a box that could cause it to be inactive for months to come - even if the wise thing right now would be to reduce borrowing costs so that the economy doesn't slip further. Just weeks ago, Wall Street thought a rate hike was likely. Soon after, it was convinced and thrilled that the Federal Reserve would move its discount rate down from 13/4 percent either this week or in the months ahead.


Black Blade: Interesting article, though the Fed does not have much wiggle room. There is only a 1 3/4 % rate left to slice from. As I have been saying, it's a "win-win" for gold. Cut rates and a stake is driven through what's left of the "Gold Carry Trade" monster. Leave rates alone and disappoint the stock market and send the US dollar lower. Raise rates and invite disaster for any supposed economic recovery. Greenspan and the Fed are caught between a rock and a hard place. Check Mate!

Black Blade
Money down a rat-hole?
http://www.upi.com/view.cfm?StoryID=20020812-051156-3609r
Snippit:

WASHINGTON, Aug. 12 (UPI) -- Clearly, the International Monetary Fund's $30 billion bailout of Brazil will cost Western taxpayers money. The only question is whether it will do more harm than good to Brazil itself. The "moral hazard" of such bailouts is only modestly to the Western banks that have lent money to the country, but far more perniciously to the political power structure within the country, which is able to finance its destructive policies unchecked.

The $30 billion bailout of Brazil last week bears strong similarities to the final $8 billion bailout of Argentina at the same time last year. In both cases, there was a strong emotional appeal from the international aid community to rescue a country that had "obeyed" the IMF's dictates. In neither case was there any evidence that the bailout would work, in the sense of not requiring yet another bailout within months, or a year at most. In both cases, the country's gigantic level of foreign debt, and its feeble level of exports, suggested that its overall problems might be wholly intractable without a debt default.


Black Blade: Interesting article and I agree � it is a case of shoving $30 billion down a rat hole. These SA economies are basket cases and the only way out is default. The loans are engineered to bailout the US banks (and possibly some foreign ones too). And yes, you and I and all western (mostly US) taxpayers will foot the bill.

silvercollector
Darkhorse
Interesting question. I am going to post on the forum as opposed to private email in case others feel the same need.

Two little things of interest. I have an old, old life long friend who I have been desparately trying to sway into PM's. I have sent him plenty of literature and a few gifts in the last 2 or 3 years. I think the guy would be into buying except he doesn't have a plug nickle to his name. Which brings about my point. There are a handful of people that I discuss PM's with, a couple friends, a couple co-workers and a couple relatives; they know I buy gold and silver and I have made a point of telling them I stash EVERYTHING in a safety deposit box, NOTHING is in the house.

I do keep my pre-1933 coins in a safety deposit box but my 999 bullion is stashed and buried, perhaps a note for another day. On the week-end I purchased some silver and went to go to the bank yesterday when I discovered my safety deposit box keys missing. I began to panic and as paranoria took over I envisioned one of above persons had stolen my keys, went to the bank, forged my signature, thus gaining access to my box and stole the entire loot.

I was sweating bullets. I rushed to the bank with my spare set of keys and when I lifted the heavy box from its opening I was some kind of RELIEVED. I asked the teller a question, "Can I ask that I.D. is required to open the box?"
She looked startled so I asked her if that was an unusual request. She said in the 32 years in the business she had never heard of this request. I briefly told her of my problem (without the details of the contents), she lectured me about the keys of course but understood my concern. I realize this is a complicated, bizarre scenario but what if?
At the second bank I told the teller the same story. She offered that once in her career did a spouse attempt to enter the husband's deposit box and she was denied, apparently it was not a 'joint' box. I wonder what the wife had up her sleeve?

Anyway.....my boxes have a notation (in yellow highlighter that I conveniently brought along) that "Photo ID is required to open this box".

Overdone?
goldquest
@BB Ref: Money Down a Rat-hole?
I am sure the money will never leave the states. It will be quietly transferred to Citigroup and JPMs accounts.
silvercollector
Darkhorse
P.S.:

I found the keys today and laughed at my stupity but am still glad about the 'ID' idea.
Black Blade
Consumer sentiment down again
http://money.cnn.com/2002/08/13/news/economy/abc_money/index.htm
ABC News/Money Consumer Comfort index loses ground for the fifth week in a row.

Snippit:

NEW YORK (CNN/Money) - In an unhappy coincidence with President Bush's economic forum, consumer confidence is at its worst level since April 1996, according to an ABC News/Money magazine poll. The ABC News/Money magazine Consumer Comfort index, based on gauges of current economic conditions, slipped below the lows it hit early this year to its worst level in more six years.

Black Blade: We see that consumers are now doing more of their shopping at discount retailers as opposed to other retailers. The trading on Wall Street is dismal as volumes lately have been low and apparently among institutional investors. Ma and Pa Kettle are sitting this one out while Joe and Jane Six Pack are burying their heads in a tall cold one hoping that it will all "just go away". In a word � "Grim".

Chris Powell
GATA delegation to attend New Orleans Investment Conference
http://groups.yahoo.com/group/gata/message/1207GATA delegation to attend New Orleans Investment
Conference. Join us!

http://groups.yahoo.com/group/gata/message/1207

To subscribe to GATA's dispatches
by email and get them immediately so
you don't have to go look for them,
send an email to:

gata-subscribe@yahoogroups.com
Black Blade
Re: Darkhorse

I have seen a lot of innovative ways to hide things. I saw one where a rubber plant could be lifted out of the pot revealing a stash box at the bottom. One old friend years ago had a fake water heater in a closet that opened up into a safe. There are other methods of course such as false wall sockets, false walls, opening book cases, safe rooms behind false wall, burial in large buckets of grain, in capped PVC pipe buried in the garden, buried in attic insulation, hidden wall safes, false drawers in furniture, cemented safes embedded in the floor covered by false flooring and carpet, etc. The possibilities are limitless. I know those who have large gun safes that act as a diversion so that potential thieves would waste their time focusing on the safe while the "goods" were hidden elsewhere. One could get quite creative. Where do I keep mine? I'm not telling.

- Black Blade

Oh yeah, if that day comes: "Gee officer what gold? I used to have some but It was stolen long ago. What's that? Why didn't I report it? What would you have done anyway - take a report? Besides you were probably busy hassling some kid, writing a traffic ticket, or eating donuts."
silvercollector
Putting the boots to the 'Knight'
Black Blade
NYSE Suspends Trading in Conseco, Inc. Moves to Remove from the List
http://www.nyse.com/press/NT004FE32E.html
Snippit:

The Exchange's action is being taken in view of the Aug. 9, 2002 announcement regarding the status of payment of interest on its two senior note issues, in addition to its broader ongoing financial restructuring efforts. In addition, the Exchange noted the abnormally low selling price of the Company's common stock, which closed at $0.34 on August 8, 2002.

Black Blade: The rumor is that this company will soon "bite the dust".

slingshot
Misplaced Keys
*************************I have enough keys on my keyring that a jailer would be proud of.
Yepper, I misplaced them a time or two.
The thing I have a real problem with is forgetting my Personal Identification Number or Password.
Like physical gold I like the keys in hand better even if I have to figure out which lock they fit.
Slingshot-------------------<>
mikal
@darkhorse
Re: "where to keep it" I too, avail myself of a bank's vault and safe deposit box. Actually two boxes in two banks. I keep one set of keys on my person and another hidden. When I am inside the vault, I do not open my box until I get inside the private room they provide for customers. The box rental rates vary quite widely, from one institution to the next. So, if this is up your alley, price shop, call and compare. Not all sizes may be available; they have a waiting list for that. If you think your confiscation risk is just too much, weigh that against your other risks, such as fire, tornado, riot, etc. And read the forum here daily. I will empty my boxes BEFORE D-Day, even if my banks will stay open and solvent. Another option is in the car or truck, in panels, recesses, or glove box. A house provides an absolute wealth of unconventional and secure holds, especially if you are good with a hammer and nails!
sector
The Dollar Index is sliding below 106.5 at the Moment
http://quotes.ino.com/chart/chart.cgi?s=NYBOT_DXY0&t=f&w=1&a=1&v=sIt has shown a steady downward tilt since 10AM or so. This is a bit different from the last three weeks of high intra-day volatility.

I suppose tomorrow's headlines will be the 15,600 IBM layoffs and the consumer confidence acting as a cabbage thrown at the President's Economic Waco Dog and Pony Show stage.

What the Prez doesn't appreciate is that he already has the keys to begin the turn around of the "Rotten Apple CEO Problem". His advisors don't seem have the gumption to tell him...arrest Ken Lay, Fastow, Skilling and the other twenty or so bad guys, hold them incommunicado in Guantanamo Bay under the Patriot Act provisions, seize and promptly auction all their personal assets, bank accounts and real estate. Treat them as if they were Columbian drug kingpins.

But IF that were to happen Gold Gate would be blown wide open since these boys were integral players...they "Have something" on the last two Administrations. They were Gold Gate's bagmen. Mahonia and Yosemite were funded by gold "Loans". The $500 Million JPM/Enron tranche doesn't appear on JPM's balance sheet. A kind of white collar blackmail "Opportunity".

Moreover, to prosecute Enron baddies, Justice would necessarily have to go after the originators of the fraud...JPM and C. That isn't in the cards so we will keep having these 1930's style, Herbert Hoover "What Recession" events...each one more pathetic than the last, until the President is put out of his misery by the final public opinion poll that shows Hillary...in the lead.
Black Blade
U.S. Navy Retracts Denial of Arms Shipment to Gulf
http://news.yahoo.com/news?tmpl=story2&cid=578&ncid=578&e=15&u=/nm/20020813/ts_nm/usa_mideast_shipping_dc_2
Snippit:

LONDON (Reuters) - The U.S. Navy confirmed on Tuesday it was seeking a large ship to carry helicopters and arms from the United States to the Red Sea, a day after denying it had placed such an order. The request, following a recent order for a vessel to carry military hardware from Europe to the Middle East, has heightened speculation that the United States is pre-positioning equipment for a possible strike on Iraq.


Black Blade: As I had reported yesterday. The price of oil is bouncing along at $28 a barrel on war rumors and a sharp decline in inventories. Looks like it is getting "interesting". There is still speculation that Bush could attempt some action before the November elections, however, I think that unlikely for a number of reasons. Not that he would like to.

Black Blade
4,000 U.S. troops arriving in Jordan for major exercises
http://www.worldtribune.com/worldtribune/breaking_1.html
Snippit:

AMMAN � Jordan is preparing for the arrival of thousands of U.S. troops for a large-scale military exercise later this month. Jordanian officials said the 4,000 U.S. soldiers are sailing through the Red Sea toward the Hashemite kingdom. They said the first U.S. soldiers arrived on Monday, Middle East Newsline reported.


Black Blade: Then again�. Hmmm�

Pizz
@sector
Re: The Enron gang

Where are Woodward & Bernstein when you need them? Problem is when the stakes are this high, well. . . . .

This administration is playing the game as if there were no "long term", or "tomorrow".

It's either sheer desperation, or one big wild card out there. I'm leaning a bit towards both.

Can't see a downside to gold or silver over the next 9 months.

Keep calling them like you see them, right now I don't think we need glasses.

Pizz
Black Blade
Hang Seng and Nikkei Go Red
http://quote.yahoo.com/m2?u
The Hang Seng and the Nikkei 225 are going negative tonight. Apparently they are not impressed with the Fed decision and falling USD. Still a lot of time for the markets to get really "entertaining".

- Black Blade
Black Blade
Corporate US Faces CEO, CFO Oaths Deadline
http://biz.yahoo.com/rb/020814/accounting_certification_sec_3.html
Snippit:

WASHINGTON (Reuters) - The top brass of hundreds of America's largest corporations must swear by their financial statements on Wednesday under a government order meant to help end a deep crisis in confidence that has shaken Wall Street. Chief executives and chief financial officers of about 700 of the 947 companies covered by the sweeping U.S. Securities and Exchange Commission order must certify their companies' latest results in writing and electronically by day's end. Certifications were expected to pour into the SEC throughout Wednesday, as nervous markets watched for companies that failed to comply. Only about 300 filings had been posted as received on an SEC Web site as of late Tuesday evening.


Black Blade: Tomorrow is the day. Then comes the long drawn out process of follow up by SEC investigators and accountants. You can almost here the shedding machines churning away tonight.

Black Blade
Japan July bankruptcies up, deflation toll mounts
http://biz.yahoo.com/rf/020814/economy_japan_bankruptcies_1.html

Snippit:

TOKYO, Aug 14 (Reuters) - The number of bankruptcies in Japan rose in July to the highest this year as deflation took a toll on struggling firms, and worse can be expected given the glum outlook for global economies, a research firm said on Wednesday.

Black Blade: It just goes from bad to worse in Japan. Just yesterday the top man at the BOJ said that the US dollar would not fall again. Hmmm�

Horatio
Cash Cost
Why would a gold mine CEO buy gold at over $300.00 above ground to remove a hedge when he could buy gold in the ground that has a cash cost of less than 200.00 and in some cases less than 150.00/oz
especially when its found in Argentina ,Brazil ,Peru where labor costs are 10% of U.S. labor costs.In many cases the government will pay for mine development costs such as road building,electric power transmission etc.?Besides the gold is located far from tax collectors if push comes to shove.
Investment goes where its welcomed.If I were a gold mine CEO I would go to Brazil or Argentina and get some of that "rescue" money the U.S. is sending over there and develope a "gold mine" with it,employ local workers and be a local hero for bringing jobs there.
Black Blade
Gold Jumps Higher
http://www.mrci.com/qpnight.asp
Gold is up over $3 an ounce. The USD is falling, the US market indices are off sharply, and petroleum prices are up sharply. Looks like a lotta "entertainment" tonight.

- Black Blade
timbervision
darkhorse
Because PM's are metal, someone with a metal detector could simply walk around the house, yard, etc. looking for a strong reading. This would suggest that they should be hidden where there is metal already. I've been thinking of installing a dummy 2" copper drain pipe in the basement and filling it with coins and ounce bars. Perhaps the back of a clothes dryer, washing machine, etc. might work too.

Operative
Pat Buchanan is Not a Rubin Fan...
http://www.worldnetdaily.com/news/seeitnow.asp?ARTICLE_ID=28606Pretty good summary of probably why Brazil got the 30 Billion from IMF. (Read US Taxpayers)
Spartacus
O'Neill says Bush team to present forum's policy recommendations within wks
http://www.ananova.com/business/story/sm_649826.html?menu=business.economy
---In coming weeks, the Bush administration's economic team will assemble a package of policy recommendations from today's economic forum to the President for consideration, Treasury Secretary Paul O'Neill said.

"We'll do pro and con analysis...and we'll see" what results "in a few weeks," he said in an interview on CNN.

He did not specify what possible steps the administration could still endorse to help strengthen the recovery, but said the policy suggestions will not include rolling back last year's tax cuts.

Separately, O'Neill said trends in the underlying economy are stronger than the 1.1% second quarter GDP growth suggested, and that the US is not headed towards a second period of GDP contraction.

"I don't think so," he said in an interview on Fox television when asked if the US is headed for a double-dip recession.

O'Neill also dismissed the idea that his job includes trying to talk up US financial markets.

"I wish it were possible to say something as simple as gurgle like a baby to make the markets feel better," he said.

Even former President Franklin Roosevelt, whose communication skills were legendary, was unable to apply public relations talent to a depressed US economy in the 1930s, he said, noting that a recovery did not materialise until 1941.---

Black Blade
European Markets Start Off Negative
http://quote.yahoo.com/m2?u
The Euro markets are trending lower after Wall Street's decline yesterday.
Blackjack
Saudi Arabia increases security for Oil fields
Dhahran, Aug. 14 (Bloomberg) -- Saudi Arabia's state oil company, which pumps 10 percent of the world's oil, plans to boost its security staff to over 5,000 by the end of the year to protect its rigs, refineries and other equipment and offices.

The world's largest oil company uses helicopters and patrol boats to protect installations that could be viewed as targets by anyone wishing to attack the country. More than 50 oil fields, 20,000 kilometers of pipelines and dozens of related plants cross a country larger than Mexico. Iraq fired missiles at Saudi Aramco facilities during the 1991 Gulf War, though none were on target.

``It's a huge, critical job that continues 24 hours a day, seven days a week,'' said Mohammed al-Omair, manager of Aramco's security operations, the company's internal newsletter reported. The report didn't specify the current security staff, and Samer Badawi, an official in Aramco's press office, declined to comment.
Black Blade
U.S. Steeply Cuts Grain, Soybean Harvest Forecasts Amid Midwest Drought
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20020813/bs_dowjones/200208130144000055
Snippit:

CHICAGO -- A rapidly spreading Midwest drought forced the U.S. Department of Agriculture to slash its harvest forecasts by an unexpectedly large amount, rocking markets and signaling higher food costs next year for consumers, Tuesday's Wall Street Journal reported. The revisions are the biggest since the droughts of the 1980s. USDA economists in Washington yesterday cut their one-month-old harvest forecast of the nation's most valuable crop, corn, by a staggering 9.2%, or 904 million bushels -- an amount roughly equal to the annual production of Indiana. Grain analysts were expecting a downward revision, but only of 8%, and markets reacted to the potential tightening of supply by driving futures prices higher. The agency said it now expects U.S. farmers to harvest 8.89 billion bushels, down 7% from last year, and the smallest crop since 1995, which is when corn prices last exploded. The government also cut its one-month-old estimate of America's No. 2 crop, soybeans, by 8.1%. Based on farmer surveys, the government said it expects farmers to harvest 2.63 billion bushels, which would be the smallest crop since 1996. Grain analysts had been expecting the government to announce a revised forecast of 2.7 billion bushels for the soybean harvest.


Black Blade: At least short term mammal flesh will be cheap as ranchers and farmers cull livestock due to higher feed costs. As always, get out of debt (and stay out of debt), stash enough cash for several months� expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. Food prices could be rising soon enough. Stay prepared � at least you will sleep easier.

Belgian
@ Pete W # 82923
Replacing old banknotes with colored new ones isn't that spectacular on itself. But....
The dollar-block might have (most probably has) an additional agenda with this colorful change ?
Repositioning of the exchange rate (against the euro/other currencies) of the $ and or changing its purchasing power (cost of living), dramatically. This surely will happen by complete surprise and overnight. A fait accompli.

At present there are $38 Trillion in domestic and international debt securities in existance. The uptake of bullion for INVESTMENT is an average of 1 tonne a day (300 tonnes /year). Now consider that 38 Trillion $ volume, serviced with low/lower interest rates, declining in exchange rate and very soon losing (massive) purchasing power...against a modest > strong > ,rise in bullion demand for INVESTMENT !!!! If only a tiny little fraction of that 38 Trillion should find its way to add to this 1 tonne /day, within a Gold disastrous supply/demand-situation....?

Second part of your question if new notes will affect Gold ? Who can possibly know Pete ? But any leglisative measure taken, "against", Gold, will have an enormous effect on POG.

Today, 38 Trillion $ in Bonds are still rising in price (lower IRs) plus the US$ exch. rate declining versus euro plus POG and POO creaping steadily up ! What difference is another color on the greenback going to make ? Have a nice day Pete.
Blackjack
Dollar has biggest fall in 5 weeks
London, Aug. 14 (Bloomberg) -- The dollar had its biggest decline in five weeks against the yen and slid against the euro after Federal Reserve policy makers suggested U.S. economic growth may falter.

``We're going to see other currencies strengthen against the dollar,'' said Adam Myers, a currency strategist at Westpac Banking Corp. Investors will be ``jumping on the speculative bandwagon against'' the currency.

The U.S. currency dropped as low as 116.87 yen, its weakest level since July 26. It traded at 117.11 at 7:20 a.m. London time, down from 118.96 late yesterday. The euro rose to 98.73 U.S. cents from 98.06. The dollar is down 10 percent against the euro and 11 percent against the yen this year.

Fed rate setters yesterday left the target for overnight bank lending at a 41-year low of 1.75 percent. The dollar extended its drop after policy makers said ``weakness in financial markets and heightened uncertainty related to problems in corporate reporting and governance'' is hurting the world's biggest economy.

``The downtrend in the dollar hasn't been reversed yet,'' said Tay Soo How, a Singapore-based investor for Citigroup Asset Management, which oversees $455 billion. ``There's no doubt U.S. economic growth is weakening.''
Black Blade
Devastating Drought Brings Despair to Much of U.S.
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020809/ts_nm/weather_drought_dc_1

Snippit:

Drought has taken a grip on more than half of the United States, experts calculate. Twenty-six states are suffering severe drought conditions and "exceptional drought" -- the worst level of drought measured -- has blanketed thirteen states, including New Mexico, Arizona, Colorado and Utah. In a typical year, drought hits 10 percent to 12 percent of the country. "It is pretty dire," said Mark Svoboda, climatologist for the National Drought Mitigation Center. "We're seeing agricultural impacts...We have a lot of hydrological problems with wells and reservoirs and streams going dry. This is going to total billions of dollars when it is all said and done." "The drought has been knocking a hole in our economics," he said. "We don't have enough water."

Crops wither in heat-baked fields, and ranchers have sold off herds rather than let them starve for lack of pasture. "I have never seen it like this and I'm 60 years old," said Richard Traylor, who owns 37,000 acres in Texas and New Mexico but has sold off much of his cattle herd. Tourism has also been hit as the drought turned state and national parks into kindling. So far this year, wildfires have scorched more than 4.6 million acres, twice the average acreage burned in the previous decade. There is a scramble for new water sources as town and city residents are urged to stop watering lawns and washing cars. The conditions are near those seen during the country's most devastating drought in the 1930s -- the "dust bowl" years, when some 60 percent of the United States was affected.


Black Blade: This is a "heads up". Fore warned is to be fore armed. It is shaping up to be a bad year and food costs are likely to soar in coming months. America's (North, Central, and South) breadbasket from Argentina to Canada is getting hit hard. While Europe and Eurasia is drowning in flood waters, the western hemisphere is drying out and crop failures are expected to be severe. Another heat wave is coming across from the west coast this week as if only to add insult to injury. Now is the time to get prepared if nyou aren't already. There isn't any relief in sight. Much of the news including the global economy is sounding more like the Great Depression along with the Dust Bowl. In a word � "Grim"

Then again, on the bright side, since rising food and energy prices are not calculated in the "core rate" the financial media pundits will say that there is no threat of inflation. Hmmm...

Spartacus
Credit Suisse Posts Loss, Cuts Dividend as Insurance Unit Needs More Cash
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVoGSxXxQ3JlZGl0
Zurich, Aug. 14 (Bloomberg) -- Credit Suisse Group posted a greater-than-expected second-quarter loss, plans to pump more money into its insurance business and cut its dividend for the first time ever, forecasting a ``challenging'' second half.

Black Blade
Drought Shrivels Crops, Stampedes Prices
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020812/bs_nm/food_crops_dc_1

Snippit:

WASHINGTON (Reuters) - Brutal drought in the American Grain Belt, part of a downturn in crops worldwide, will bring the smallest U.S. corn and soybean harvest since the mid-1990s, the government said on Monday, whipping a price stampede that could run far into next year. U.S. crops might shrivel more without relief from a drought that gripped one-third of the nation. The Agriculture Department reported crop losses on every continent, ending a remarkable five-year run of large crops globally. Surpluses amassed in U.S. warehouses during the global grain glut could be depleted virtually overnight. "We're on a knife's edge," said agricultural economist Daryll Ray of the University of Tennessee, pointing to shrinking global stockpiles. "Basically, we've had seven weeks of no rain -- and hot," said Steve Launius of Nashville, in southern Illinois. "It's a third to a half of a (corn) crop."


Black Blade: It is amazing that the media has not been picking up on this. I guess food and water are just taken for granted. All we need now are hordes of locusts and various other pestilences.

Blackjack
Goldman Sachs : Software sector future BLEAK
NEW YORK (CBS.MW) - Rick Sherlund isn't very optimistic about the outlook for the software sector.

While sector estimates for 2002 may already have been lowered enough, the Goldman Sachs analyst warned clients Tuesday that further cuts are probably needed for 2003 given the protracted slowdown in information technology spending.

Seibel (SEBL: news, chart, profile) shares took the biggest hit on the heels of Sherlund's comments, plunging $1.11, or 13 percent to $7.59 while Oracle (ORCL: news, chart, profile) dropped 64 cents, or 6.6 percent, to $9.09 and Microsoft (MSFT: news, chart, profile) shed $1.42, or 2.9 percent, to $47.05.

"We believe it likely that the anemic economic growth expected for 2003 will require estimate reductions for the broader software sector," Sherlund said, adding that longer-term growth rates for technology companies in general may also need to be revised downward.
___________
With huge debt overhang corporations will not be borrowing and
investing in infrastructure anytime soon, like years.
Belgian
Remarkable ?
As soon as the London am fix is in, POG starts to vibrate and changes direction (intra-day). It gives me the impression that from than on, POG adjustments are made for $/� exch.rates, by Euroland ? A stronger euro wants to attrackt its share of the dollarflight ? Not all dollars should seek refuge in Gold, temporary though ? Could this make sense, anyone ? TIA.

Dow futures trying to take off with some technical rebounce within this slow and thin month of august, waiting for the september bleues.
Black Blade
Crime Surges In Argentina Amid Economic Meltdown
http://biz.yahoo.com/djus/020814/200208140416000223_1.html

Snippit:

Argentine criminals are kidnapping their countrymen at an alarming rate, increasingly desperate for cash as rising unemployment and poverty engulf what was once South America's safest capital. The allure is the ransom criminals negotiate with the victims' loved ones. Those that last a few hours have been dubbed "Express Kidnaps," for the amount of time it takes a family to collect the right amount of cash. Others last weeks as ransoms rise into the hundreds of thousands of dollars. In recent weeks, those abducted have included prominent businessmen and sports stars, along with hundreds of ordinary Argentines like Peralta, a schoolboy kidnapped on his way to class last month.


Black Blade: A new growth industry? How will Americans act when the economic crisis comes to US shores? Even countries once known for safety and rule of law like Argentina are not immune.

Black Blade
"Oath" Deadline Today
http://www.sec.gov/rules/extra/ceocfo.htm
So far most companies have not signed. Apparently there is no penalty if the CEOs and CFOs do not sign off. However, if they do and they are wrong they face penalties. The site is very slow to access this morning. Several fund managers are expected to be watching who signs and who do not. There could be wholesale sell offs of shares of companies that do not sign off. Meanwhile there is some buying of market index futures this morning (The President's Working Group on Financial Markets maybe?). Gold is being pushed lower in London from highs in Asia. Someone is working hard to suppress the gold price. Meanwhile the USD continues to be under severe pressure. This should get "interesting".

- Black Blade
Black Blade
Canadian miner bets on gold ahead of cash
http://www.miningweekly.co.za/?show=25975

Snippit:

Canada's Goldcorp, a profitable mid-size producer possessing one of the mining world's best cash cows, is unabashedly bullish on bullion and literally putting its money where its mouth is, the company's top executive has revealed. CEO Robert McEwen said Goldcorp is holding back some of its 600 000 ounces of annual production in inventory, and went into the market in the second quarter to buy extra gold in lieu of operating cash it keeps on hand. "Right now it's a short-term placement for funds that I think has better upside than cash," McEwen said. "We believe in the product, we believe it's going up, and we're blessed with what is considered the richest gold deposit in the world," he said. "I believe we're going to see a day similar to what we saw in 1999, when gold spikes up $70 to $80 and it gets outside the bands that were constructed around these hedge positions, and counterparties come back and say 'margin call' and that is gong to start a squeeze," McEwen said. "It's all about how do we build share value here, and how do I take a chunk of money that I have in there and make it worth more," McEwen added.

Black Blade: It is good to see a gold producer that believes in its product to the point of buying physical to add to existing physical inventory as an investment. Setting a good example for the rest of the industry and everyone else.

MO VER MEG
(No Subject)

May I suggest that today is a great day for writing to the CFTC and stirring the pot. If everyone wrote Newsome (in their own words) letting him know he is not doing his job......... it is called PRESSURE.

He knows what he is doing is wrong - he needs to realize many, many other people know it too. Let's hold him accountable! Be sure to keep copies.

Mr. James Newsome
Three Lafayette Center
1155 21st Street, NW
Washington, DC 20581

Fax 202-418-5533

MOVERMEG

Black Blade
Bankruptcies by Public Firms Set a Record
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020813/bs_nm/economy_bankruptcies_dc_1
Snippit:

NEW YORK (Reuters) - U.S. corporations set a record for bankruptcies this year after US Airways Group Inc. sought protection from its creditors on Sunday. Assets of publicly traded companies filing for bankruptcy have reached $267.6 billion this year, according to BankruptcyData.com, as accounting scandals and crippling debt toppled some of America's biggest firms.

Black Blade: And many more are likely to follow. So many companies are drowning in record level debt and many will never be able to pay up, especially in a weak economy.

misetich
Agere to cut 4,000 jobs, exit optoelectronics
http://biz.yahoo.com/rc/020814/tech_agere_1.htmlSnip:
ALLENTOWN, Pa., Aug 14 (Reuters) - Agere Systems Inc. (NYSE:AGRa - News) on Wednesday said it plans to cut 4,000 jobs, or more than a third of its work force, and exit the optoelectronics business, which represents 10 percent of its sales.
*********
Misetich

Significant additions to the Bone Pile - It appears ANOTHER shakeout downward as layoff announcements in the last week has picked up speed.

Will we see lower consumer spending, lower earnings, higher unemployment - and higher government deficits (payouts)- lower stock market values?

Got gold?



Paper Avalanche
Adding to the bone pile in a big way - IBM
http://news.yahoo.com/fc?tmpl=fc&cid=34∈=business&cat=downsizing_and_layoffsI'm sure that none of these 15,600 employees may have just refinanced with Ditech for a debt consolidation loan / second mortgage.

As Doug Noland would say, the credit bubble appears to be very fragile at this point. There is no way that real estate prices (or the price of any asset with attendant debt) can continue to increase as defaults become more prevalant (sp?).

Any way, I believe that the POG is beginning to behave in much the same way that it did during the spring when the dollar was weakening. I am looking for a big increase in POG during the last couple of trading hours on Friday. Back to the Friday afternoon rallies!!!!! I could be wrong. I often am.

Take care.

Paper Avalanche
misetich
ANALYSIS-Bond buying by US,Japan banks skews monetary policy
http://biz.yahoo.com/rc/020814/financial_japan_usa_policy_1.htmlSnip:

CORPORATE BONDS OUT OF FAVOUR

To make matters worse for companies, and the economy, worried investors have also turned their backs on corporate bond markets in both Japan and the United States.

"Corporate bond issuance is falling sharply and fund availability for companies is getting tight despite past credit easings by the Fed," said Kichikawa.

At least U.S. six big corporate bond sales were shelved in July as investors grew concerned that they could become stuck with bonds that were virtually impossible to trade.

Issues have also slowed in Japan, where the government has been trying to boost the corporate bond market as an alternative to bank lending.

Some analysts argue that fiscal spending is needed to make up for the disappointing results of monetary policy.

Mizuno at Deutsche Securities, for instance, said Washington had room to spend more on social security.

But he also said a big boost in spending could push up long-term interest rates and undermine housing investment, a key locomotive for the economy.

Japan too has little room to move on the fiscal front.

The government's finances have been battered by years of excessive spending, leaving Japan with a public debt of 140 percent of GDP -- the highest among industrialised countries.

The alternative is to wait.

"Conventional wisdom suggests that banks will sooner or later become tired of holding so much government paper, so they will resume corporate lending that offers better returns," said Kichikawa.

************

Misetich

Corporate bonds holders are being burned - corporations are shelving new issues - refinancing requires being done at higher risk premiums -

All in all - this does not augur well for corporate balance sheets, earnings, spending - and above employment

It is a vicious circle as investors and banks are Risk averse -

"conventional wisdom" should say that things will get worse for corporate shareholders and bondholders before they get better and who knows what other dominos will fall

"conventional wisdom" may be right in " suggests that banks will sooner or later become tired of holding so much government paper"

however the flight would be to PHYSICAL GOLD! the ultimate storage of value

Got gold?

Paper Avalanche
@ timbervision
I would think that if there are those who intend to search property for PM's, they have taken into consideration the posssibility of PM owners trying to conceal their stash along side or within other metal fixtures. I would imagine that whatever devices might be used will look for not only metal, but also the density of such metal (so that if a copper pipe under your sink is sufficiently dense it would cause closer examination). Remember that gold is the most malliable (sp?) metal. To that end, and if we do get to that point where it becomes necessary to keep gold completely out of sight, you might want to consider rolling your gold into sheets so that it can be better concealed within other metal objects without causing an abnormally high reading realtive to the expected density of the metal object in which you intend to conceal it. This would likely only work with .999 bullion.

Just thinking out loud.

PA
Belgian
Gold and Interest Rates (IR) :
Creditors raise IRs for the following reasons :
1/ High demand for credit.
2/ Risky debtors (solvency).
3/ Currency losing purchasing power.

Since 1994 (pivot year)(see E.W. essay at GE):
1/ Plenty of liquidity, regardless of demand for credit.
2/ No defaults permitted.
3/ US$-hegemony consolidates purchasing power.
Result : Declining IRs.

According to WGC : Quote : Traditional wisdom has it that Gold moves in the opposite direction to IRs, because of the dual implications with respect to inflation and opportunity cost ??? - !!!

I'll abstain here, from any comment and leave this to the forum's judgement.
misetich
Corporate bankruptcies in Japan jumped 16 percent in July
http://biz.yahoo.com/ap/020814/japan_bankruptcies_2.htmlSnip:

TOKYO (AP) -- Corporate bankruptcies in Japan jumped nearly 16 percent in July over the previous year, a private research agency said Wednesday, underlining how persistent deflation and a weak economy have undercut the nation's companies.
.............


Bankruptcies have been on the rise in recent years as deflation eats into corporate earnings and raises the real value of debt to be paid off.

Teikoku Databank said that debt left behind by insolvent companies surged 61.1 percent in July from the same month last year to 1.2 trillion yen ( $10 billion).

The trend is likely to accelerate, it added.

"Deflation and pressures to reduce credit are near the limits of endurance, causing corporate earnings to deteriorate further and making it more difficult for companies to raise funds," Teikoku said.

*************

Misetich

From continent to continent we read corporate bankruptcies SOARING

Deflation is a contagious financial disease with no apparent cure - The easterly deflation winds are hitting US shores unabated- hitting corporate earnings - and eventually stock market values

A little portfolio insurance - PHYSICAL GOLD - is a must in this treachereous financial times

Got gold?


misetich
Certification: It's all fine, we promise
http://cbs.marketwatch.com/news/story.asp?guid=%7BA096D281%2DF41C%2D4217%2D9FE3%2D17D4A6CE120F%7D&siteid=mktwSnip:
ANNANDALE, Va. (CBS.MW) -- Today is shaping up as a non-event.

Today, of course, is the day by which the CEOs of the 947 largest publicly traded companies must certify the accuracy of their companies' financial statements. Many a commentator has argued that the bull market will now be able to take off in earnest, since the CEOs' word allows us to invest with confidence.

Don't bet on it, say a surprising number of investment newsletter editors.
............
Tobin Smith of Changewave explains why: "Check out the wording of the statement at the SEC Web site... The fine print ensures that many CEOs won't have to sign anything for many weeks to come. And since accounting has become so complex, we won't learn about all the toxic waste on the books for many months yet!"

Another reason that many editors are skeptical of this certification process: Many of the misleading accounting practices that are widely used either are entirely legal or in a sufficiently gray area that any decent lawyer could easily beat any allegations of wrongdoing.

As Band sees it, "For every case of out-and-out fraud, there's at least a dozen more where investors got skewered by misleading, but perfectly legal, accounting practices." Needless to say, today's certification deadline will have no impact on them.

In fact, many newsletter editors see the entire certification process as little more than a cynical attempt by our politicians to manipulate us into thinking that all is well again.

As Smith puts it, "August 14th is NOT some magical turning point."

*************

Misetich

The danger - failure of the "new and improved" financial reporting is being underestimated by politicos-

It is difficult for accounting wizards to hide in a deflationary spiral - as debt implodes

Got gold?




Pizz
Hiding your stash
I use a three prong approach. A little silver and gold on display in a China cabinet, about 5%, mostly silver, hidden but not too well, and deep storage on the bulk.

When push ever comes to shove, I'm willing to give up the first two.

Pizz
Leigh
Hiding Gold
I imagine when the confiscation agent comes a-calling, he'll already know we're gold owners. He'll know all our secret hiding tricks. I want to be able to look a C.A. in the eye and tell him there is no gold on my property.

That's why I think hiding gold in one's own house and yard is a mistake. It's easy to ask a friend or relative to store a small pile of stuff for you. The gold could be well hidden inside, and the person never has to know what's contained in your "junk." Another option is burying the gold on someone else's property, preferably again that of a relative or close friend. If you're discrete, the person never has to be burdened with the knowledge. Your property is FAR more likely to be searched than a non-PM-owning friend.

Sure, it's possible your relative could get nosy and snoop around, but such a scenario is not as scary as having thugs (government ones or otherwise) show up at your doorstep. In the first case, you might have to "buy off" the friend's silence. In the second, you could lose it all as well as your life.

Just my opinion, and not necessarily investment advice!!
steady
bonepile getting humongous dang.................
blackblade can u toss this onto the bone pile its so big this lil hobbit cant throw that high.

Ames Will Liquidate Inventory, Shut All Stores

NEW YORK (Dow Jones)--After a yearlong struggle to emerge from bankruptcy protection, Ames Department Stores Inc. (AMESQ), threw in the towel Wednesday.

The discount retail chain said it will liquidate and close all of its 327 store locations. Ames management and board of directors determined that its creditors would best be served and assets values "can best be maximized ... by terminating operating losses and winding down the business," the company said in a prepared statement.

The Rocky Hill, Conn., discounter's move came after its creditors' committee sought permission to liquidate the company's entire inventory and its warehouse distribution centers in a motion filed in bankruptcy court in the Southern District of New York on Tuesday. The petition, which was to go before Judge Robert E. Gerber of the U.S. Bankruptcy Court in Manhattan, also stipulated that the inventory liquidation be followed by a disposition of the company's store and real-estate leases.

Starved for cash, Ames agreed to sell and lease back a number of stores to its debtor-in-possession lenders in June in exchange for $25 million. But people familiar with the company's finances said Ames had been attempting to find additional funding in recent weeks. It needed the extra cash to purchase new merchandise for the pivotal back-to-school and holiday selling periods.

"This was a wrenching decision, but the right course to take," Ames Chairman and Chief Executive Joseph R. Ettore said Wednesday. "Continued softness in sales, combined with tightening terms and slower shipments from our suppliers, have reduced our funds availability below critical levels,"

When it filed for bankruptcy protection last August, Ames was granted $755 million in DIP financing from the GE Capital Corp. division of General Electric Co. (GE) and Kimco Funding LLC, an affiliate of Kimco Realty Corp. (KIM). But it had depleted those funds.

The Chapter 11 filing last year was the second in a decade for Ames, which characterized itself as the last surviving regional discounter. Three of its other Northeastern rivals -- Ann & Hope, Bradlees Inc. and Caldor Inc. -- had all shut their doors in the past three years, as two industry titans, Wal-Mart Stores Inc. (WMT) and Target Corp. (TGT) began setting up shop in the area.

To turn itself around, Ames needed to keep its old customers and draw in new shoppers, analysts said. The situation grew more dire in recent months as Wal-Mart, in a move to battle the recession, began to slash prices.

The creditors' committee asked that the court bring in Gordon Brothers Group LLC, a Boston liquidator, to conduct the going-out-of business operation.


Waverider
Lessons in economics from Latin America
http://www.iht.com/articles/67541.htmlSnippit:
"The collapse of the Argentine economy in December was not supposed to be contagious. Washington was telling us that most Latin American countries had liberalized their markets, improved their public finances, straightened out their banking systems and freed their exchange rates. But now good old-fashioned contagion is under way throughout Latin America, and it is probably too late to avoid it, despite the International Monetary Fund's $30 billion bailout for Brazil.

One lesson is for Washington. Economic and financial liberalization is good, in the long run. In the short run, it is mightily dangerous. It exposes the million weaknesses of any country to the hasty judgment of often poorly informed markets. It drastically reduces the government's margin for maneuver. It often blinds the IMF and other observers who like market-friendly measures so much that they fail to see the ugly problems looming in the background. The truth is that it takes decades to build up the key economic and legal institutions needed for the smooth operation of a free-market economy. It takes even more time for the political system to adjust to this brave new world. The emerging market countries still have a long way to go. Asking that they mimic American institutions and American ways of running an economy is not just unrealistic, it is criminal.

The second lesson is for local policymakers searching for the holy grail of the right exchange-rate regime.
For a while exchange rates were pegged. They were meant to be the anchor that provides the right incentive towards the kind of monetary and fiscal discipline preached in Washington. A few crises later, it has been realized that discipline is elusive in most countries. Exchange rate stability would be better served by stabilizing regional exchange rates directly vis-�-vis each other. The dollar standard is a very roundabout way of trying to achieve that.

It is high time for the Latin Americans to outgrow their gringo complex and look for a regional solution. They only need to look at what the Europeans have done over the last three decades. The European Monetary System has fostered increasing monetary cooperation, complete with mutual support and peer pressure aimed at enhancing discipline and the development of increasingly deeper regional financial links, bypassing the dollar. Maybe one day Latin America will also have its own common currency, removing for good the specter of bruising regional exchange market disruptions."

Waverider: He nails it - interesting that it's from the IHT - I think it would be unlikely to find this in the American news. When we had an essay competition a while back on lessons learned from Argentina, I don't recall anyone proposing a common currency for South America...thoughts?
steady
imf fingers in everyones pie.
IMF Urges Austria To Stick With Public Spending Curbs
08/14/2002
WASHINGTON (Dow Jones)--Austria's government should strictly adhere to plans for public spending reductions, to create room for lowering taxes and prepare for the ever-increasing pension costs of an aging population, the International Monetary Fund said Wednesday.

"Any relaxation of the fiscal stance in the coming years would be undesirable," the IMF said in its annual "Article IV" review of Austria's economy. "Noting the role of fiscal policy in stabilizing the economy, some (IMF) directors stressed that fiscal surpluses would be in order in periods when economic activity is strong."

In light of Austria's high tax burden, the bulk of the fiscal adjustment must come from spending cuts, the IMF said. The IMF endorsed the government's goal of reducing taxes, but cautioned that tax relief must come in hand with spending cuts so as not to increase deficits.

The government should also make a greater effort to educate the public about the consequences of an aging population for the budget. "Pension reforms aimed at extending the period of working life and containing benefits are needed urgently to avoid a worsening of the public pension system finances over the longer run," the IMF said.

Pizz
Waverider
Common currency for SA? Silver.

Pizz
Paper Avalanche
@ Leigh
My greatest fear concerning my decision to put the fruits of my labor into PM's instead of paper assets is the possibility that my accumulation of wealth may be taken at gun point. I am not certain that I am willing to surrender my life / freedom to circumvent whatever edict is handed down from TPTB to confiscate PM's, however illegal and unconstitutional such edicts may be.

I still cannot shake from my memory a quote by Ron Insana (is that Italian for "insane") on CNBC that "if gold is ever needed in a time of financial chaos that it will be made illegal anyway." That is why I have recently switched all my gold to pre-1933 coins. However, there is always the possibility that the implied protections to be found in pre-1933 gold may not survive a complete confiscation if TPTB want to steal PM's from citizens at any cost. Old rules may simply be replaced by new and improved rules.

I strongly recommend reading the document supplied by our gracious host reagrding the safety of pre-1933 coins vs. bullion.

Thanks!

Paper Avalanche
NEMO me impune lacessit
Would like a comment - how much to trust this info ?? TIA
Socrates964
Gold confiscation/LatAm
1. Rather than burying your gold, why not buy it in Luxembourg/Switzerland. Out of curiosity, is Singapore a good place to buy.

2. LatAm - a common currency for Mercosul was discussed but was regarded as unworkable while Argentina had a rigid currency board and Brazil a crawling peg regime that was transformed into a more or less free float.

If anything, formal regional integration is being used as a canard by G7 to avoid free trade deals with S Am countries. The new EU trade commissioner (a bald Frenchman whose name I forget) admitted openly that the EU wouldn't make any concessions to Mercosul exports until it integrated - which with Argentina in its current state is not going to happen. It's obvious why - the EU's geopolitical project is the integration of E Europe and this probably involves flooding W Europe with Polish/Hungarian/Romanian food products.

The irony of this can be seen from Argentina, where hundreds of thousands of people are leaving for Italy and Spain, of which they are full citizens with full rights to welfare benefits. If Brazil goes under (it probably won't but it would be worth threatening the EU into some sort of intelligent behaviour) then Italy adn Spain can expect several million more lost sons and daughters who will probably deliver the coup de grace to their welfare systems. But then, under globalisation, better to fill up your country with exploitable immigrants from completely disparate cultures than your own flesh and blood that you might have to treat in a civilised way.

It would be thus more intelligent to help Brazil and Argentina onto their feet by giving them better market access, but Western Europe wants its Lebensraum (or perhaps one should say Verkaufensraum).

Sorry, couldn't resist the rant, but the reality is that Brazil produces corn/soybean fed chicken at $400/t and Europe produces fish-meal fed chicken at $1,000/t and the European taxpayer forks out a $600/t subsidy.

Against this, SAm regional integration is actually occurring on a commercial basis - particularly in the area of energy resources. Note Petrobr�s' take over of Perez Companc, the Brazil-Bolivia gas pipeline, cross-border transmission lines.





CoBra(too)
@ Steady's Post - Re IMF admonishing Austria -
This is not only absurd, in view of Austria's almost zero
budget deficit. While it is true that the demographics are as adverse as almost everywhere in the post industrial western world and Austria was trying to correct some excesses of the past social-democratic led coalitions. The overall debt burden is still substantial - though better than Germany, France and the UK amongst a host of smaller countries in the EU.

The timing of the IMF admonition is just the most cynical monstrosity ever the IMF blundered into. Austria, Bavaria Saxony in Germany and Czechia are victimized by probably the worst floods ever in their respective histories.

In Austria alone 10 - 15.000 homes and businesses were damaged to totally lost. Roads, railways, bridges and other important infrastructure damages will cost billions of euros to replace. Apart from 9 victims losing their lives while helping to rescue thousands from rapidly approaching the floods and the suffering of up to 100.000 people directly affected in Austria alone - I'm totally disgusted by these mega crooks feasting off the carcasses of productive societies for too long.
As I've asked before, why Brazil and not Argentina - is it JPMC and C are caught up in Brazil, while some more obscure EU bankers in Argentina?

It's time the IMF and its puppet masters are found out and its schemes, including the SDR idiocy - are disbanded - as it is time to return to honest money, weights and measures and fundamental morals and ethics. Not the ethics, which are politically called for in the US of A, today - yes today Aug.14 2002 - what a farce!

Regards cb2 - still adding reality ...

Socrates964
(No Subject)
Yawn! yet another bear raid. Seems nevertheless to be subject to law of diminishing returns. Now what's the betting that we close 314.10-60 as the free market adjusts gold to its equilibrium price?
steady
South Africa
JOHANNESBURG (Dow Jones)--The South African government stressed Wednesday that it has no policy to nationalize any part of the country's mining industry.

Executives from Anglo American PLC (AAUK) and its diamond subsidiary, De Beers SA, earlier Wednesday met with senior government ministers to discuss a recently leaked draft Mining Charter which said the government was aiming for black control of all new mining within 10 years.

The leaked Charter has caused almost all of South Africa's mining share prices to tumble as investors feared a nationalization plan was being prepared.

Anglo American has a large exposure to South Africa, with more than 70% of its assets by value located in the country.

South Africa's main economic ministers were present at the meeting. They included Minerals and Energy Minister Phumzile Mlambo-Ngcuka, Trade and Industry Minister Alec Erwin and Finance Minister Trevor Manuel.

In a joint statement with the government, Anglo American and De Beers said: "The ministers stressed that the leaked draft Charter was intended for discussion and all its aspects are negotiable. Progress ... will not be measured by a single percentage target."

It added that "there was not, and never has been, (any government) policy to nationalize the industry or any part of it."

The companies said they fully supported any program to widen black ownership in the country's mining industry.

They said the government had assured them that any sale or transfer of ownership would take place in a transparent manner and for fair market value.

Cometose
(No Subject)
backwardation showing up in the NY Mini Gold Index during a down session:
Sept trading a 306 down 7
Oct trading at 3ll down 3.3
Dec trading at 313 down 1

Aug trading at 314

Looks like the mice are playing today , on the Maalox
treadmill.....they are probably having to chase that Maalox with Imodium .....

Meanwhile , gold on the launchpad ....looking steady ...
and rumbling ......
Aristotle
Sir sector -- about confiscation
I'm not so sure I'd be as hasty or cavalier about what a government may or may not do under the pinch of any given economic crisis. You said a government would have "bigger fish" to fry than to concern itself with the citizens' holdings.

Are suggesting that everyone gamble with their wealth and totally ignore the current South American experience -- Argentina for example, where the government effectively seized the citizens' peso and non-peso accounts? If a government can show such an interest in the "small fish" of their citizens' various dollar accounts, it seems to me that very little imagination is required to see a similar occurance among citizens' bullion Gold accounts -- bullion in interest or non-interest bearing Unallocated accounts or pools.

In other words, with an appreciation of what's at stake, I'd strongly caution you to not let your own cavalier attitude toward the real word give other people a false sense of security about the "impossibility" of confiscation. Wisdom and prudence would dictate that another assessment be done to account for real world experience -- happening right now in the modern world, not just a faded memory of 1933.

Old Gold. Got me some AND LOVIN' IT! --- Aristotle
Rock
Paper Avalanche. Always pays to do the research!
Hey Paper guy I agree with you on all points. I picked up some of the pre-1933 coins at basically the same premiums of American bullion. I only really have a few ounces of American Bullion but the majority of my holdings are the pre-1933 european gold coins and I also hold some coins that would be considered religious which would also be exempt from confiscation if they reinacted the exact same law without adding any ammendments

Sure they could rewrite the law and take the gold challaces from the Pope and melt it down but my gut feeling is if they did pull that same stunt again as FDR did in 1933 my guess would be the law would be left the same. Thats my take. One must always have a plan of action either way that's why its good to deversify.

What really burns my butt pardon the grammar is that when the Nasdaq was going through the roof and individuals like that democrate guy Terry McGullen or something like that can turn one hundred thousand bucks into eighteen million and no one confiscates any of it or questions its validity.

But when gold breaks through and its our turn to reap the fruits of our honest labor we have that cloud hanging over us wondering if they would have the &^%$ to do it again.
That's the kind of topic that gets my blood boiling.
At any rate,

Have a good day all,

Rock aka Great Heart

USAGOLD / Centennial Precious Metals, Inc.
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http://www.usagold.com/ProductsPage.html

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Siochaina
Sinclair via LeMet

Gold Dealers Bomb US Gold Market


Price drops from $318.50 in Asia to $311 in the USA
By
James Sinclair



Gold investor/traders were shocked this morning by the drop in gold prices under relentless gold lease conversion dealer selling in the US. I have said, time after time, that this is a Battle of the Titans devoid of any public between the gold dealer's derivative cartel versus Asian bullish interest. Once again you see this war being fought as if it was a last ditch attempt at survival. Well, it is!

This is not a war to prevent a melt down in the $300,000,000,000 gold derivative pyramid but a war to prevent a crack in dike of $72,000,000,000,000 total notional value of all derivatives granted on all trading items. It is a market axiom that if one form of an item fails, pressure builds gradiently on all other forms of the same item i.e. derivatives. That means if the gold derivative fails then you can be sure you will have significant pressure on equity derivatives, thence interest sensitive derivatives, thence last risk bond derivatives and so on. Because of this fact, you can expect that this war will be raged every day for the foreseeable future with the forces of the short gold derivatives facing off the forces of the Asian longs that have been buying all the sold gold for the last five years. The hope of the gold dealer derivative short is that if they can fight the good fight each day than in time everything in the world of markets will come right for them. Will it? My answer is absolutely, NO! This Bear market in equities is not short term. It may well be sold out in certain sectors, but probabilities do not support a significant economic recovery starting before mid 2004. There is no chance, IMO (in my opinion), that the gold cartel can keep up their efforts to sell as much gold as they have been selling every day for the next two years. What is being forgotten is the Asian Bull Interest is the answer to the question, "Who bought all the gold sold by all the gold producer hedgers, the gold cartel and every gold bear for the past 5 years." Gold fundamentals, as I have outlined to you are, IMO, improving daily. Look at the commodity market to see the birth of the long-term bull market in the making. In my opinion, bonds will top out in November. The dollar is having another heart attack. JPM just broke down from it up wedge which I believe indicates a test of the recent low. I know this comes at a hard time for public gold bulls, as Bob Prechter is advertising his deflationist - gold bear thesis, which I don't support as correct. If it were correct, why has Japan been the largest consumer of physical gold over the past two years whilst in an undeniable and continuing deflation period? I believe we are in a gold bull market that is both long term and headed for substantially higher prices, regardless of the life or death play being made now by the gold dealers cartel. The gold Cartel is fighting a brave fight but is going down.
BillinOregon
Roger Bently Arnold's Comments
General Comments

And so it begins....

The 10 year treasury yield is below 4% at an ALL TIME RECORD LOW as I write this. This is the bond market indicating that the entire world economy is in its death throws. I do not say this lightly or spectacularly. Although there are many, a majority of analysts, telling everyone that the US markets and economy are OK, they are not. The US and world economies are in the process of imploding now.
The CRB is continuing to spike as commodities rise on a flight to hard assets and necessities.

Gold is beginning to increase but is not increasing at the rate it should given the FED;s decision yesterday. I believe it will soon.

Spreads are widening and at an increasing rate. Also, they surged following the FED's decision yesterday. AAA credit quality spreads are now at almost 2.5% above treasuries. This simply can not be sustained. In other words loan rates are rising for companies indicating the anticipation in risk in existing loans and expectations that they will default. In order to balance these risks and offset the increasing future risks lenders are increasing new loan rates. This of course becomes a self actualizing market. As rates increase the probability that borrowers can not afford the payments increases driving the rate higher again to compensate the lender for the increased risk which drives the payments higher, etc. and so on and so on. Get it?

If you are self-employed and have not refinanced into a COFI loan you are assuming far too much risk in this economy. You should additionally be consolidating or paying off all other debt and getting liquid. Self-employed borrowers should have 2 years worth of gross income in liquid reserves.

And so it begins....

IBM Is Cutting More Than 15,600 Jobs
Tuesday August 13, 8:13 PM EDT

NEW YORK (Reuters) - International Business Machines Corp. is cutting more than 15,600 jobs -- above what had been expected -- in its computer-services and microelectronics businesses, according to a regulatory filing made public on Tuesday.

http://money.iwon.com/ht/nw/bus/20020813/hl_bus-n13340955.html?alias=/alias/money/cm/nw

Agere to Cut 4,000 Jobs, Exit Optical Parts Business
By Holly M. Sanders

Allentown, Pennsylvania, Aug. 14 (Bloomberg) -- Agere Systems Inc., the communications chipmaker spun off from Lucent Technologies Inc., will eliminate 4,000 jobs and exit the fiber- optics parts business after the company forecast a sales decline.

The workforce will be reduced by 36 percent to 7,200 by 2004 from 11,200, Agere said in a statement. The cuts will include management and factory workers, said spokeswoman Vibha Agrawal. Agere had already announced plans to eliminate 7,300 jobs.


Paper Avalanche
Thoughts on Sinclair piece
This may be too simplistic a tangent from the Sinclair piece below, but is it not a possibility that TPTB realize that the gold scam is in the last days and we are going to seize the oil in the ME to sell to the Asian nations in exchange for the gold that we sold them over the last 5 years? You have to have either gold or oil to sell. We have sold the all the gold. I guess we will have the 51st state in a few months to sell all the oil.
Rock
Timbervison,, one suggestion to burying gold
Timbervison,
I was told by an old friend if you chose to bury gold say on your property get a bunch of old alternators and bury them throughout the property, that way when they see all they are hitting are old alternators maybe the robber or even a gov't agent may disregard and move on to some other reputable citizen.

Great Heart
Blackjack
DOW chart looks like a double top
DOW looks like its forming a double top. Lets see if this
continues to rise, if not, could signal another swoon in the
DOW starting soon.
CoBra(too)
Uh, Oh ... Seems I've come back ...
to a different board ...

Well, anyway sorry for intruding - will be going my way
off the trail - sometimes - and wish you all success and what's more perseverance ... cb2
misetich
Group accuses US Justice official of securities fraud
http://www.forbes.com/newswire/2002/08/14/rtr695767.htmlSnip:

DALLAS (Reuters) - The U.S. Justice Department official in charge of cracking down on corporate corruption was sued Wednesday for alleged securities fraud.

Legal watchdog group Judicial Watch said it filed a suit in federal court in San Francisco charging Deputy Attorney General Larry Thompson of conducting misleading accounting practices and insider trading when he was on the board of Providian Financial Corp .
...........
"The Providian scandal points to the current Washington culture where politicians, business leaders, accounting firms and lawyers are all in bed with each other," Larry Klayman, Judicial Watch's chairman, told a press conference.
************
Misetich

Klayman does not mince words.

Got gold?
Belgian
James Sinclair
Mister Gold, correctly states that the 38 Trillion US$ bond-market is rushing to its ATH's and soon topping. Euroland's bonds are rising as well. Using the ~deflation~ word for this ongoing proces is nonsense and confusing. The hyperinflation monster is growing, though in its box, for the time being. POG remaining higher than its '99 low (253$) with IR's setting ATLs, is evidence for *anticipatif* Gold accumulation ! Platinum 560$ is exactly at its major resistance line. POO (Brent) also. Palladium rests at its LT support line and the silver chart looks ugly (to me).

Anticipation on bond's tops (Sinclair-november elections) and IRs decline-stop and reverse (rise) is done by those early birds
with gold-paper-contract, longs. There will surely be a lot of hedges, straddles, butterflys on IRs and POG. This with continued, subtle accumulation of the Physical. The GOLDRUSH hasn't started yet ! We need the POG gapping where the major trend will be nailed !

The FED, leaving the door wide open for later rate cuts is a magnificent play on the existing, declining, IR-trend, since 1994. Bond traders can push bondprices higher in expectation of the unknown quantity of the coming (or not) rate cut. Sell your rising bonds in strength on the rumor.

Who wants to hold bonds (hot patato) yielding less than 4% for the coming decade of hyperinflation ? Hyperinflation not necessary coming from an economic restart but rather from the rehabilitation of the pricing power for those enterprises that managed to survive !

The runaway from the melting stock market opportunities to bonds is a trap. More and more (SM)money is trapped into these low yielding bonds, the longer that IRs can be kept low. Kind of a gigantic confetti fire : Trillions vaporized through SM implosion and Trillions trapped in bonds, declining in price when IRs stop and reverse ! Money destruction. Fiat that never was. Burned ! Can one burn Physical ?

SM paper + Bond paper + cash confetti will be decimated (in volume or purchasing power) when all is done. Please, don't ask POG to signal this outcome, loud and clearly, now !

Laying one's hand on Arabian oil pits, would be a disaster.
OBL had a POO=144$ in mind. 1,2 billion moslims would be outraged if their POO should come under full western control. A guarantee for much more suicidal terror.

POO has imo taken over, temporary, from Gold's signal function. Note that the WGC almost never brings in the crude factor related to Gold ! The Rothshields are arbitraging Oil/Gold in their trades.

Now let us wait and see if the republicans are managing things in function of the november elections ? Is a significant, SM, technical rebound possible around that period, together with lower IRs and contained POG, together with the Iraqi offensive ? Waw. Never, ever underestimate, the power of those PTB.
mikal
@BlackBlade, All
http://www.usagold.com/DailyQuotes.htmlExcellent daily report today, especially your comments.
misetich
Broker sets the rule on resources-Lifelong contrarian sees boom days for gold, water
http://cbs.marketwatch.com/news/story.asp?guid=%7B71E45CC9%2DDF22%2D4E39%2DB8D2%2D3C92D63AF5AD%7D&siteid=mktwSnip:

This broker is also a gold believer. The precious metal, shaking off a miserable summer, is approaching $315 an ounce in the spot market -- about $14 below its high for the year.

"I am very much of the view that the 20-year bear market in gold coincides with the 20-year bull market in the dollar," he says from his Carlsbad, Calif., office. "Gold will come to supersede the dollar as the reserve currency of choice among central banks."

.............
Rule sees central banks, long sellers of bullion as they replaced their gold reserves with paper assets, giving gold its day in the sun. "I am of the belief that if the dollar continues to soften and gold continues to strengthen, most central bankers, who are anti-contrarian, will go out and buy gold," he says.
*************

Misetich

It is a question of when not if!

Today's market pep rally has to be viewed as a bear sucker rally - "the new and improved" financial reporting will be tested by the next (3rd quarter) earnings season

The stock market bull is over - the next phase of the Big Bad Bear is going to maul optimistic investors

Got gold?



misetich
Reality Check: US Comm'l Aircraft Mfrs: 'Worst Downturn Ever' Aug 14 / 9:11 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=62&banner=mainwire_featuresSnip:

By Gary Rosenberger

NEW YORK, Aug. 14 (MktNews) - Commercial aircraft manufacturers are
in the midst of the worst downturn ever, prompted by heavy revenue
losses from airlines, and prospects for an upturn in orders and
deliveries are at least two years away, U.S. industry officials say.

Airlines are moving to reduce capacity - there are over 2,000
airplanes parked in Southwest deserts - and those airplanes that are
still being flown are flying less, they say.

Not helping matters are two developments this week: U.S. Airways'
bankruptcy filing and American Airlines' move to cut 7,000 jobs by March
2003 and retire 74 aircraft.

Furthermore, as airlines increase debt to stay in business, they
will likely choose to pay it off before ordering new aircraft when
traffic and profitability rebound, they add.

In short, the airline industry is tarnished by severe overcapacity,
and assuming that passenger loads return to normal next year, no upturn
in commercial aircraft orders or production is foreseen by anyone until
2004 or later.

"Right now passenger traffic is holding steady at 10% below
year-ago levels, which were already depressed," said David Swierenga,
chief economist for the Air Transport Association, representing U.S.
airlines.

"Fares are down and revenues are down on the order of 15% to 20%,"
he continued. "A lot of airplanes are parked, and many that are still
flying are doing so at reduced utilization levels. Therefore the need
for new capacity is nil."

************
Misetich

Outlook for the airline industry and aircraft manufacturers is "Grim"

Excess capacity is emblematic of the bubble. The Feds are trying to resolve this issues through monetary means and thus far they have failed miserably. Excesses need to be purged - at a dear cost to the economy and the financial system - post-poning the inevitable creates more harm

Got gold?

Black Blade
Is a CEO's oath going to fix things? No
http://www.globeinvestor.com/servlet/ArticleNews/story/RTGAM/20020813/wmath13
Snippit:

Seldom has a deadline that seemed so important meant so little. Wednesday marks the date for top executives of more than 700 prominent U.S.-traded companies to swear on a stack of Bibles that their financial accounts � to the best of their knowledge � represent the truth. And any investor who is comforted by that also probably stays up late on Easter weekend to try and get a glimpse of the rabbit with the candy.

Black Blade: Looks like the media spin has taken the edge off of the "oath" hoopla today. Meanwhile, UAL is expected to file bankruptcy in a couple of months, several companies refuse to sign the "oath", and unemployment announcements are back in the news. It should get "interesting".

mikal � thanks, there is a lot of curious trades in the precious metals arena today beyond what could be described as "normal" given current economic conditions. From those whom I have talked to today, everyone is somewhat bewildered about the so called fund and bank selling in this market. It does not pass the "smell test".

Off to the gym!!!

misetich
Can Brazil Be Saved?
http://www.washingtonpost.com/wp-dyn/articles/A15032-2002Aug13.htmlSnip:

By Robert J. Samuelson
Wednesday, August 14, 2002; Page A29


With more than 170 million people and an expanding middle class, Brazil now ranks as the world's ninth-largest economy, just behind China (seventh) and Canada (eighth). For Brazil to default on its government debt would be a national tragedy and a big problem for the rest of the world
............
Though the odds of success aren't good -- no better than 50-50 -- the loan is a justifiable gamble precisely because Brazil is so important.
............

A default would jeopardize all these gains. It would also hurt the rest of Latin America -- already reeling from Argentina's default and turmoil in Colombia and Venezuela -- and damage the fragile global economic recovery. Because Brazil is the region's largest economy, regional trade would suffer. In 2001 Brazil imported about $13 billion from other Latin countries, including almost $7.5 billion from Argentina and about $1 billion each from Venezuela, Chile and Mexico. Global investors would incur losses not only from depreciated government debt but also, quite probably, from a wave of private bankruptcies. At the end of 2001, all foreign banks had $142 billion in cross-border loans to Brazil, says the Bank for International Settlements.
............
But whether the IMF can prevent a default is unclear. Morris Goldstein of the Institute for International Economics (IIE), a Washington think tank, doubts it. Within the next 18 months, Brazil will have to write down its debt by 30 percent to 40 percent, he predicts. John Williamson, another IIE economist, disagrees. Under favorable -- but plausible -- conditions, Brazil can handle its debt and resume faster economic growth, he says.

The problem is less the debt's size than its continual growth. According to Williamson, Brazil's net government debt is now about $290 billion. About 80 percent of that is domestic debt, mainly in Brazil's own currency, the real. (This debt was converted to dollars at an exchange rate of $1 equals 2.92 reals.) The rest of the debt is foreign, mostly in dollars. The total debt equals about two-thirds of Brazil's gross domestic product. Although this isn't low, many other countries have higher debt ratios.

The trouble is that Brazil's debt has expanded rapidly. In 1994 it was 30 percent of GDP. Runaway spending is no longer the main culprit. In 2000, Brazil's Congress passed a law effectively limiting spending by the national, state and local governments. Taxes have also increased. As a result, Brazil now has what economists call a primary budget surplus. This includes all spending except payments on the debt. The primary surplus is now 3.75 percent of GDP. Unfortunately, interest payments on the debt have exploded to more than 9 percent of GDP, says the Institute of International Finance. The result is an overall budget deficit exceeding 5 percent of GDP.
............
If Brazil's real depreciates against the dollar, the government's debt payments automatically rise. Since early 2000, the real has lost about 40 percent of its value. More than half of that has occurred since February. This has been devastating.
............
Williamson is probably right: If Brazil's exchange rate and interest rates improved, the debt would be bearable. The danger is a self-fulfilling prophecy. As investors abandon Brazil's real, the debt burden grows -- prompting more investors to flee the currency. The $30 billion IMF loan tries to break this cycle by providing Brazil with dollars to halt the drop of its currency and to prod the leftist presidential candidates into supporting a large primary budget surplus. This ought to cheer market psychology.

But it hasn't yet. Despite endorsing a primary budget surplus, the leftist candidates criticize the policies that have produced it. Investors remain wary. The exchange rate and the stock market have weakened. One reason is that foreign commercial banks are reportedly reducing dollar loans to Brazilian companies, neutralizing the IMF loan.

Critics argue that the IMF is rescuing private investors more than Brazil. Perhaps. But if Brazil defaults, the shock waves will spread far and wide. Then the IMF and the U.S. Treasury will wonder whether they could have done more or were simply swept along by forces that no one could control.
****************
Misetich

Lets stay on this HOT TRAIL -
US multi-nationals and banks have tremendous risk expsure in samba territory
The trend is your friend they say - and the trend is downwards for the Real -
With Latin America countries in economic disarray and global economic downward spiral it is difficult to imagine how Brazil's present/future situation can me amiliorated - Add the upcoming election and upset in the making and the dynamics of a default are higher and higher

Brazil is gold country - well at least - their soccer team likes to collect those beatiful shining medals!

Got gold?






Operative
Hidden Treasures
I had no idea we had such a brain trust of sneaky minds here at the forum. LOL. Giving credit to those with some creative thinking on how to hide things. Suppose the hide "it" in the freezer under the frozen chili is passe. I have a differant type of problem. I can never remember where I hide things.
The wife was requesting I donate some older suits to charity so in order to keep my goddess happy I took the chore to task the other day. Lo and behold I found a couple hundred bucks (shhh...Im not telling her) in a suit pocket that I had stashed years ago and forgotten about. But just in case I forget I want all of you to remind me: the gold is stashed in the old riding lawnmower next to the barn. (No, I am not that dumb. You know where it is, but are you willing to fight 1000 very tempermental hornets, a dozen wasp nests, and a condo of fire ants to get it?) Did I mention the snakes in the waist high grass?
Yeah, its a real eye sore, oh well. One man's junk is another man's treasure yes?

IF the government was to ever decide to take our gold, (Figure that odds are good on that one at some point), I guess I will point out towards the barn and let them have it. Here's why: I think the gov agent will first be polite enough to ask If I have any gold before searching all over my property. I will then be asked to sign a paper stating that I have no gold or (fill in the blank) in my possession or on the premises. The paper will have printed in red ink just above the space to sign that "misrepresenting" will lead to confiscation of all my possessions and property, jail time for all family members and public execution on the first tuesday on each month. (or something similar)

If I say no, and sign thier paper I would expect one or more of the following things to happen:
* According to a friend of a friend or your brother in law's
co-worker we have a signed statement that you may have
a gold stash. (Reward for tipsters dont ya know) Soooo
we are going to search your property, bank box, and old
suits.
* Well, according to video tape of the survelliance camera
from Joe's Coin shop...that is you purchasing those coins
right?...we are going to search....
* Gee, according to these shipping records obtained from the
shipping agent you received a box from a coin dealer last
MM/DD/YY. "IT WAS ONLY A BROCHURE!!" Sure, yeah, take him
away boys.

There is a point to all this. Live Very small and have a friend who owns a small business.

"Hey bob the lawnmower repair man, I need a part for a JX Penny 1973 lawnmower. Think You might have it? Well maybe I can find on internet." " Hey bob, found it, ok if I have them ship the lawnmower part to you, Im going to be out of town for a couple days? Thanks see you in a few."



misetich
Brazil markets battered by ongoing election concerns
http://www.forbes.com/newswire/2002/08/14/rtr695965.htmlSnip:

By Todd Benson

SAO PAULO, Brazil, (Reuters) - Brazilian financial markets took another beating Wednesday as two new opinion polls heightened investor jitters ahead of the country's October presidential race.

Brazil's currency, the real, fell 1.2 percent to 3.205 per dollar in volatile trade, coming under heavy pressure late in the session after investors snubbed a Central Bank attempt to roll over dollar-linked debt coming due Thursday until after the election. The bank also sold dollars at least twice to stop the currency's slide, traders said.
............
Once again, political uncertainty weighed heavily on Brazil's troubled markets. Two new opinion polls released in the past 24 hours showed the market's favorite presidential candidate, Jose Serra, still languishing in third place behind two left-of-center opponents.
.........
"The market has almost given up on Serra by now," said Marcelo Carvalho, chief economist at Bank of America in Sao Paulo. "And that probably means we're in store for more volatility from here until election day."

Wall Street fears Lula or Gomes might unravel eight years of free-market reforms under President Fernando Henrique Cardoso and push Latin America's largest economy toward a default on its $250 billion public debt, an event that could send shock waves through other emerging market economies.

While most analysts believe last week's $30 billion loan from the International Monetary Fund will help Brazil stave off a debt crisis before the end of the year, they are less certain about the country's ability to do so in the long term.
..........
Election worries also soured a Central Bank attempt Wednesday to sell debt in the local market, adding pressure on the already beleaguered real. In an auction, the bank was only able to roll over $27.5 million in dollar-linked notes maturing on Oct. 1, before the presidential election.

Investors scoffed at the remaining $852.5 million in government paper, due after the October presidential vote, demanding interest rates the Central Bank was unwilling to pay. Now the bank will have to use savings to repay that debt.
*************
Misetich

Seven weeks to go - and the markets are getting nervous each passing day - self-fulfilling prophecy - making things worse

Lets stay on the Brazil Hot Trail keeping an eye on JP Morgan and Citigroup

FWIW - a rumour surfaced - Leahman - concerns on JP Morgan dividend

Got gold?
Paper Avalanche
Anyone want to hear an interesting off-topic prediction?
???
Cometose
PAPER AVALANCHE
Sure , why not ....... I have one myself .....Big brother is going to discipline us misguided and indulgent self serving serfs who brought all these problems on ourselves by wrong living and wrong attitudes .....They are going to take away our tabacco and alchohol .....(save medicare and keep the crime rate down ) they are also going to try to take our guns away as well....
Paper Avalanche
OK - here goes - setting the stage by TPTB
My wife and I were talking in the car about the recent rash of new stories about children being abducted, kidnapped and killed recently. We knew that thousands of little ones are subject to these horrors each and every year and wondered why now is there the big spot light on this "crisis." We began to think that a stage was being set and came up with the following answer:

ANSWER: TPTB are ready to chip the slaves. That's right! With Digital Angel perfected they are now ready to implant into our young-uns a harmless little chip that will provide the little rug rat with ultimate safety through the wonders of GPS so that if your ankle biter ever gets taken away from you (or needs to be located by your good friends in the government) simply track little johnny down with the modern marvels that technology now affords us. Not only that, if little johnny gets sick all of his medical history can be scanned from the nice little chip in his arm. Not only THAT, by the time little johnny grows up he won't have to bother with pesky cash or unwieldy credit cards - a simple swipe of the wrist will take care of any and all transactions.

Anyone who does not beleive that we will not see stories such as this emerge in the next 12-24 months please let me know. I am willing to bet physical gold on it.

I may be wrong.

BTW, I figure that if TPTB have concentration camps in the works that I am so far gone per what I have posted on the internet in the last few years that it wouldn't hurt to bring this to the attention of the fine folks on this forum.

The ever-conspiratorial Paper Avalanche
misetich
Mirant May Have $1.1 Bln in Errors on Balance Sheet -Fuller certified the accuracy of Mirant's 2001 filings and its 2002 first-quarter report to the SEC.
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVrk.hPcTWlyYW50Snip:

Atlanta, Aug. 14 (Bloomberg) -- Mirant Corp., the biggest North American natural-gas trader, said an accounting review turned up mistakes that may have inflated its balance sheet by as much as $1.1 billion.

Straightening out the errors may reduce Mirant's $22.8 billion in assets and liabilities as of year-end 2001 by less than 5 percent, the company said in a statement. Mirant said it doesn't expect the mistakes to change operating results, revenue, expenses, net income, liquidity or cash flow. The company didn't provide details on items.
...........
``We're hard at work resolving these remaining issues,'' Chief Executive Marce Fuller said in the statement. ``These were honest mistakes.''

Fuller certified the accuracy of Mirant's 2001 filings and its 2002 first-quarter report to the SEC.

Mirant can't complete and certify its second-quarter results until KPMG International, which became its auditor in May, completes a review in 30 days to 60 days, the statement said.

The SEC and federal energy regulators are investigating so- called round-trip trades. Companies simultaneously bought and sold power or natural gas at the same price and quantity, sometimes to inflate revenue or trading volumes. California officials blame energy traders for soaring electricity prices during an energy crisis in late 2000 and 2001.

**********
Misetich

Sleep tight investors - CEO's and CFO's have certified - we will get good clean numbers -

Got gold?

slingshot
No See'ems
Coming to a town near you.Well you can see them coming for your tobacco, guns , beer and gold. You can even see the chip on the way. Here is one for you might not see.

Imagine this? You wake up to a knock on the door early in the morning.
You answer the door.
Mr. Slingshot?
Yes.
We have found out you have a Botswanian Condor nesting in a tree on your property.
So?

You are going to have to move cause it is an endangered species and can not be disturbed.

?????????????????????????????????????????????????????????

Now you have been living in this home for 25 years and some bird comes along and has homesteading rights on your property.
Yeah, Right!
Slingshot------------------------<>
misetich
AOL Time Warner Says It May Have Misstated Ad Revenue -Parsons and Chief Financial Officer Wayne Pace certified the accuracy of the New York-based company's financial statements today, meeting the SEC's deadline for such guarantees.
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVrllBU1QU9MIFRpSnip:

By Aimee Picchi


New York, Aug. 14 (Bloomberg) -- AOL Time Warner Inc. said $49 million in revenue from three transactions at America Online may have been improperly recognized, and the world's biggest media company has started a review of ad deals at its Internet unit.

The company learned of the transactions, which were made in the fourth quarter of 2000 through the first quarter of 2002, in the past 10 days, AOL Time Warner spokesman Ed Adler said. They represented ``an insignificant portion'' of the company's total revenue during those periods, a company statement said.

The U.S. Securities and Exchange Commission and the U.S. Justice Department are investigating America Online's accounting for ad transactions. Those probes were sparked by a Washington Post report last month that said America Online boosted sales by about $270 million from July 2000 to March 2002 with ``unconventional'' transactions.
...............

The company uncovered the transactions during the course of an internal review, Adler said. He declined to comment on when the review began.

The company hopes to finish its review of online advertising accounting by the end of the third quarter, Parsons wrote in the e- mail. America Online will put ``some enhanced controls in place'' at the division, he wrote.
**********
Misetich

ANOTHER honest mistake. - CEO and CFO certified - sleep tight AOL investors

Got gold?

misetich
Tyco says SEC reviewing financial statements
http://www.forbes.com/newswire/2002/08/14/rtr696187.htmlSnip:

BOSTON, Aug 14 (Reuters) - Tyco International Ltd., whose accounting has been under fire all year, on Wednesday said U.S. securities regulators are performing a "full review" of its most recently filed financial statements while its new chief executive orders an in-depth look at the conglomerate's accounting dating to 1999.

Tyco made the disclosures after the market closed on Wednesday in its quarterly filing with the U.S. Securities and Exchange Commission.
**********

Misetich

ANOTHER Tyco investigation - this Dennis Kozlowski - must have angered somebody - unlike Enron CEO -Ken Lay- who allegedly is the biggest crook of them all - and little attempt is being made to bring him to justice- must have friends in high places (wink, wink)

Got gold?


misetich
Flextronics cuts 5,261 jobs under restructuring plan
http://www.afxpress.com/afxpress2/afx/story_43495.xml.htmlSnip:

NEW YORK (AFX) - Flextronics International Ltd said it is cutting 5,261 jobs under a restructuring plan and has recorded 76.9 mln usd in costs related to these staff reductions.

Of the total, 856 employees have left to date, and the remaining 4,405 are to leave once the factory closures are completed, the company said.

***********
Misetich

More addition to the Bone Pile - Yep the jobless recovery continues unabated-

Got gold?
Socrates964
JIM SINCLAIR
Jim,

I noted that you stated that the $ 354.00 has disappeared as the resistance line,
but no explanation was given for this. I posted your email and got lots of questions
why this was the case, that the major resistance line has moved up.

Could you elaborate a little bit? $354 is a most interesting number for gold. It is a mathematical calculation of that level at which gold derivatives arrive at total real value from notional value as a product of risk control software. It also had coincided with an area of moving overhead resistance. I have always looked at support & resistance according to a proprietary method of rating probabilities. Right now $354 is there but the probability of it actually functioning as resistance has declined in probability terms, remarkably. My only conclusion is that a close above $329.94 takes gold into the $370-$380 area with no real resistance at $354. They fanatical actions of the gold cartel at the $317- $318 area also leads credence to the probability that a close above $329.94 ends the Cartel's activity forever.

misetich
The Outlook for U.S. Credit Losses: Spent Out?
http://www1.standardandpoors.com/Forum/RatingsCommentaries/StructuredFinance/Articles/081402_creditcards.htmlSnip:

However, consumers are tapped out. With household debt at a record 104% of household income and the saving rate at 4.1% in June, there is little room for spending to outpace incomes. Consumer spending can no longer lead GDP.

Housing remains extremely strong but seems unlikely to go higher, despite the lowest mortgage rates since 1970. Normally the most cyclical sector of the economy, housing ignored the 2001 recession. The preemptive cuts in interest rates made housing very affordable, pushing up home ownership in spite of the recession. Despite the pundits, there seems to be no sign of a housing bubble; however, starts will drop as mortgage rates rise next year.

Federal spending is a major stimulant. Thanks to spending on defense and national security, the tax cuts, and congressional opening of the pork barrel, the federal budget has swung from a $255 billion surplus in fiscal 2000 to a $175 billion deficit this year. That $430 billion swing is fuel for the expansion, but in the long run the move to deficits will raise bond yields.

The soft spot in the economy is business spending. Business cut back on capital spending as sales slowed, and the high levels of excess capacity will delay a rebound. Equipment spending will lag, although the recent orders data are somewhat encouraging. Nonresidential construction expenditures are dropping in response to the rising office vacancy rates, in turn caused by lower employment.

.............
Will Consumers Continue to Borrow?
Consumers recovered quickly from the terror. Consumer spending bounced back sharply in the fourth quarter, boosted by zero-rate auto financing. The tax cut, which became effective Jan. 1, boosted incomes, allowing even more spending. But the weak stock market has hurt incomes and sapped consumer confidence. Consumers will continue to spend, but the saving rate will level out and spending growth will slow to a pace near the overall growth rate of the economy.
A slowdown in consumer spending will mean a lower supply of newly originated loans for securitization. Still, asset-backed securities' (ABS) new issuance volume is expected to increase in 2002. Relative to the cost of securitization, the cost of unsecured funds for finance companies has been on the rise and the ABS market has become a more attractive source of funding. In addition, revolving asset pools�including credit cards�that are maturing in 2002 will need to be refinanced. Securitization is once again increasing as a share of credit card balances, after stabilizing in the late 1990s.

Household debt is reaching new records. The average American household now owes 106% of its annual disposable income. Although most of the recent increase has been in mortgage debt, which in large part reflects the rise in home ownership to a record 68% of households, installment debt is a record 23.3% of after-tax income. Continued consumer spending will translate into continued borrowing, although in recent months that has concentrated on car loans rather than credit cards. Consumer installment credit growth will keep pace with that of income.
............
Debt-service costs fell in the early 1990s as interest rates dropped. More recently, however, costs have risen as a share of income because higher debt has offset lower interest rates. Debt-service costs have dropped from the high of 14.2% set last spring to 13.8% in the third quarter. Consumer debt service (excluding mortgages) has risen to 7.7% of income, while monthly mortgage payments are 6.1%. At the 1986 peak, consumer debt service was 8.5% of income, and mortgage debt, 5.9%. Standard & Poor's expects debt service to hold near 14% of income, staying just below the record 14.4% of 1986.
..............
Bankruptcies and Charge-offs
Bankruptcies continued to soar in early 2002, to 369,000 from 303,000 two years earlier. The surge is in part due to the slowing economy but also reflects reaction to the threatened change in U.S. bankruptcy law.
...........
Risk of Renewed Recession
These forecasts assume that the economy is beginning to recover from the recession. How much worse will losses be in the event of a double-dip? To examine this, Standard & Poor's looked at a likely second drop, based on a Middle East disruption sending oil prices above $50 per barrel, double their current price.
The scenario implies an average recession, with a peak-to-trough decline in real GDP of 2.5% and a rise in the unemployment rate to a 7.3% peak. The Fed responds by lowering interest rates, carrying the federal funds rate down to 1%. Inflation is slightly lower in this scenario as well.

The weaker labor market raises bankruptcies and charge-offs. Charge-offs rise to 7.6% in 2002 and 7.5% in 2003, compared with 7.2% and 6.8%, respectively, in our baseline projection.
***********
Misetich

Got gold?

Black Blade
Ames to Go Out of Business, Eliminate 21,500 Jobs
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVpnwBL0QW1lcyB0

Snippit:

Rocky Hill, Connecticut, Aug. 14 (Bloomberg) -- Ames Department Stores Inc. will close all 327 stores and fire about 21,500 employees as the discount retailer goes out of business a year after seeking bankruptcy protection from creditors.

Black Blade: Some economic recovery. Let's see here, so far this week 21,500 fired added to 7,000 at American Air, 15,400 at IBM, and 4,000 at Agere. The "Bone Pile" is growing fast this week. And it's only Tuesday. Hmmm�


Black Blade
Oops! Make that Wednesday

Time flies when you're having fun. Anyway, the "Bone Pile" is growing very fast again.
kramrich
SILVER HITS ITS 3RD LEVEL FIB RETRACEMENT.
Almost on que the monthly chart on silver hit its 62% retracement today. Two days ago when Sept. silver was in the 465 range I called my commodties broker and told him to buy Dec. silver on my account if Sept. silver hits 444.50. Today Sept. silver went to 445.00 and I told my broker to buy now. We will see if it turns up at this point. No other reason for silver's drop today except that we got close enough for the large traders to hit the third level Fib target of 444.50.

Fibonacci numbers and Elliott wave trading are easily programed into computers and I think traders tend to seek these points. They become self-fullfilling prophesies.
Black Blade
Nicor CEO can't certify
http://money.cnn.com/2002/08/14/news/companies/nicor.reut/index.htm Energy company cites uncertainties about the gas distribution unit; will restate 1Q results.

Snippit:

NAPERVILLE, Ill. (Reuters) - Nicor Inc. said Wednesday that its chief executive officer and chief financial officer cannot certify its 2002 interim financial results as required by the U.S. Securities and Exchange Commission. Nicor cited uncertainties about its gas distribution unit's results. The energy holding company also said it will restate its first-quarter 2002 financial results to reflect certain items that were originally reported in its second-quarter results.

Black Blade: One more company that has questionable accounting. So far there are a little over 400 certifications out of the 947 listed companies. However, a lot of that is a matter of scanning in today's deluge of paper. There are likely to several that will not certify or have a couple of months to do so. About 18 have restated so far. Still, it could get "interesting".

Black Blade
Asset bubbles as harmful as inflation: BIS
http://business-times.asia1.com.sg/news/story/0,2276,54272,00.html

Central banks must rethink monetary policy, says study

Snippit:

(FRANKFURT) With implicit criticism of the US Federal Reserve, the Bank for International Settlements says it is time to rethink monetary policy and recognise that asset price bubbles can do as much harm as the old enemy of high inflation. As the Fed weighs another rate cut to shelter the economy from falling stock markets, a BIS working paper traces booming asset prices back over 100 years and finds that they nearly always end in a financial crisis which does lasting damage.

Black Blade: Tulips anyone? Think real estate.

Trapper
Sir Operative
Condors....they taste like spotted owls don't they.
Live small...eat well.
RJ
steady
returning to the shire
noble knights, fair ladys i need to return to ths shire for about 187 working days.....some one has to guide the lambs to think for themselvs so as they dont become sheep. i will be leaving immeadiatly and will drop off no more messages during the daylight hours... I hope my corner is still available in june ill be back..........
goldquest
CEO CFO Statements
http://www.sec.gov/rules/extra/ceocfo.htmA lot of blank spaces yet! Of course the SEC is already allowing extensions!
darkhorse
@steady
From us older hobbits, thanx for taking care of our younger hobbits while they're in your care and we're away "slaying the dragons"...they're our most treasured asset, so much more valuable than any of the bright and shiny! I stand and salute you, sir....
turkey hunter
BIS Balance Sheet
http://www.bis.org/banking/balsheet.htmTalking about balance sheets. The BIS has a lot of gold francs. 192 tonnes of gold. The link is a commentary for the balance sheet.
Ole Man
SILVER
Technically, silver is in a massive head and shoulder top.
This spans from April 16th to today.
This is also a double bottom. Which indicator is the likely one of choice, aside from hindsite of course?


Brett Woods
@ CoBra (too)
Hope you're feeling better cb2. Good to see you back after the Op you mentioned.
Black Blade
Flextronics to Cut 5,261 Jobs

Snippit:

LOS ANGELES (Reuters) - Contract manufacturer Flextronics International Ltd. plans to cut 5,261 jobs as part of a long-term restructuring, the company said in a filing with U.S. regulators on Wednesday.


Black Blade: OK, add another 5,261 nonessential "Bones" to the "Bone Pile".
Black Blade
Conseco Warns Of Possible Bankruptcy Filing
http://biz.yahoo.com/djus/020814/200208141850000972_1.html
Snippit:

WASHINGTON -(Dow Jones)- Conseco Inc. said it "will be forced to petition for relief under the U.S. Bankruptcy Code" if a consensual restructuring with holders of its debt is unsuccessful.

Black Blade: "Another one bites the dust". It looks like yesterday's rumor is true.

Horatio
Brazil,Argentina,Venezuela
It seems to me ,for Brazil and the rest of S.America not to default on debt the U.S. must devalue fairly rapidly .The Dollar must decline buy 30% in my opinion.Its just not possible for Brazil to repay debts denominated in Dollars.The IMF and U.S. are causing massive deflation in Brazil.It would also help if commodity prices would rise as they are commodity based economies.Coffee is selling at prices not seen since 1970.
In order to prevent collapse its time for either U.S. to devalue
and commodity prices to rise ,and soon.
Hold Silver,Gold,go long on Commodities and keep cash in Euro.(u-owes)then sit tight and wait for things to happin.
When it happins it will be with a BANG ,you won't have time to think about it.Put yourself in place and it will come to you.The forces of nature ,drought,war,pestulance will make you rich.No need to feel guilt about it,just prepare for the future.Only a fool remains fat,happy and ignorant.
DOWNUNDER
LOOSE LIPS SINK SHIPS - - WHERE TO STASH THE P.Ms !
I haven't read todays offerings as yet but yesterday there was a discussion initiated by Darkhorse as to how different people store'stash or hide their precious metals.As others have pointed out there are numerous places around a home both inside & outside where precious metals could be hidden.

What is most imperitive is that NO ONE else is told & that especially applies to junior family members.It is a huge ask to expect children to keep secrets --so DON'T burden them with the knowledge. Once planted leave it there & don't discuss it with ANYONE --except your spouse if you feel right about that.For security a sealed letter with the location could be left in a safe deposit box or with your will at the solicitors office.

For what it's worth I don't like the idea of keeping anything precious in a "safe" deposit box apart from documents.My reasons are that precious metals are very heavy & a dead giveaway to the bank staff who put away your box.Even if you want to disclose the contents the Bank will
NOT insure the contents SO if anything happens you cannot prove what was in there! Like most Bank deals this does not impress --- What if renegade Bank Staff decide to do a sting? They could be living well in foreign parts by the time you discover that it aint there!! Not as if you visit a safe deposit box on a regular basis! Also for Americans the fear of Govt confiscation is always a wild card OR the Bank going belly up.

Maybe I'm just paranoid but - - - - - -
MarkeTalk
Explosive Rise in Gold Straight Ahead--Arch Crawford, Wall Street Underground
As many of my clients here at Centennial already know, I don't get a chance to post as often as I would like. The press of phone calls, consultations and taking orders makes it virtually impossible to cogitate during the daylight hours. Thus, I am relegated to the wee hours of the night to collect my thoughts and share them with clients and readers of this noble forum.

This week our office received two of our many financial newsletters--Arch Crawford's Crawford Perspectives and Nick Guarino's Wall Street Underground. Next to Adrian Van Eck's Money Forecast, The Steve Puetz Letter and James Grant's Interest Rate Observer, I look forward to reading these two market analysts. Both of them write controversial stuff (to say the least) and come to startling--even shocking--conclusions. Arch Crawford uses the methodology of astrology with which I don't agree, but he gets results. He is ranked #1 out of 518 managed investment programs for the last six months. So he has a hot hand at the moment.

When I read such newsletters, I look for facts and figures which corroborate or negate conclusions I have drawn based on other indepedent sources. For example, both analysts are forecasting a skyrocketing gold market between now and Christmas. More specifically, Arch Crawford states that an "excruciating rise in the price of GOLD" should begin no later than September 11th. (Hmmm. There is THAT date again. Deja vu a la Ossama bin Laden or maybe Saddam Hussein?) According to Crawford, the price should rise last until September 24th. And all of the foregoing should get going NO LATER than the when the new moon appears on September 6th.

Referring back to my methodology, I am an avid believer in anniversary dates and seasonal factors. Legendary market analyst and trader, W. D. Gann, also stated that anniversary dates were key to deciphering market turning points. Even Solomon said "that which has been will be again, and there is nothing new under the sun". Seasonally speaking, it is also no secret that the stock market usually turns down in late August, crashes into September and October, and then recovers in November. At least, this has been the pattern of the past five or so years. And remember, this pattern repeated when stocks were in a bull market. When it comes to gold, gold's seasonal low is in AUGUST and it rises into the fall and winter months!

What I am specifically looking at is the onset of the Jewish fall festivals, beginning with Rosh HaShanah on the eve of September 6th, then Yom Kippur on September 16th, and finally the Feast of Tabernacles on September 24th. Very interesting how these dates which are biblical line up with secular astrological data offered by Arch Crawford. I could offer my own speculation, but I don't know if there is any connection or if it is merely coincidence. I am reminded of how gold skyrocketed $84/ounce in September 1999 right in the middle of the fall festivals. Back then, it just so happened that the Washington Agreement was signed during that time of year, which limited central bank sales of gold until 2004.

In conclusion, it is my learned opinion that NOW is the time to prepare for the coming price explosion of gold which looks more and more certain by the day. You can name any upcoming fundamental news event as the trigger--from the SEC deadline of August 14th for certifying financial statements, to the imminent US invasion of Iraq resulting in Iraqi suicide bombers against mainland USA, to the likely default of Brazil. I won't argue about which one will occur or if all converge at once. It is the season for stocks to collapse and for gold to rise. Enough said.

So I issue, once again, an appeal to all of my past and present clients--who are thinking and rationally minded individuals--to review their financial holdings NOW (not next week) and to call me if they need to buy gold or add to their already existing holdings. Just an an aside: My wealthy clients who hire independent financial consultants have told me that they are advised to place between 10% and 20% as a minimum into precious metals. One client told me today he has 50% of his assets in gold. Why? Because gold plays the same role as life insurance has in years past. Gold is really economic insurance--insurance on one's savings and against unforeseen future events and disasters. So if you need to call me before the next crisis strikes, my extension here at the office is 102.

George
Blackjack
Saudi's no longer our allies?
http://www.timesonline.co.uk/article/0,,3-384443,00.htmlsnippets:

RELATIONS between the United States and Saudi Arabia have deteriorated so far that the Saudi Arabians are no longer considered allies, senior diplomatic sources said yesterday.

Saudi Arabia, once the indispensable cornerstone of US policy in the Arab world, has refused to co-operate with the war on terrorism or support President Bush's plans to overthrow President Saddam Hussein. According to the sources, it has handed over no Intelligence of any value about the al-Qaeda terrorist organisation, which has roots in Saudi Arabia.

The final "stab in the back" for Washington was the decision to ban American bombers from attacking Iraq from Saudi airbases. That has soured relations to such an extent that the country from which America launched its 1991 invasion of Iraq is now being excluded from discussions about a post-Saddam era.
----

British diplomatic sources said that the Saudi ruling elite was immersed in a "dynastic battle" and was so concerned about survival that the key figures were afraid of taking any decision that would be interpreted by the people as being pro-Western and anti-Arab. It had become increasingly difficult to find anyone with sufficient clout and influence in Riyadh "to talk about anything".

King Fahd, 79, is said by Gulf-based diplomats to be suffering increasing ill health, giving rise to speculation about his successor. He left Geneva for his holiday home in Spain yesterday after undergoing eye surgery.
Belgian
The consensus on IRs.....
The markets are confident and do loudly express that confidence, through the media, that IRs will be kept low/lower for an extended period ! Another 8 months !
Blackjack
US Industrial Production stalled?
Washington, Aug. 15 (Bloomberg) -- U.S. industrial production probably stalled in July, the first time this year that manufacturing has failed to increase, economists said in advance of today's report.

Production at factories, mines and utilities was probably unchanged in July after a 0.8 percent increase in June, according to the median of 60 forecasts in a Bloomberg News survey. Industrial production has increased every month since a 0.4 percent drop in December.
Black Blade
In Uncertain Times Gold Beckons
http://www.usatoday.com/money/markets/2002-08-14-gold_x.htm
Snippit:

Fervent gold investors believe the government is desperately trying to squash gold prices and prop up the stock market. "The last thing they need is a gold rush," says Doug Casey, editor of International Speculator, a gold-oriented newsletter. He thinks gold will win out. "Gold is like a coiled spring," he says. He predicts it will top $1,000 an ounce. Gold is a direct bet against the monetary system: Gold investors figure an ounce of gold is always worth something, even if the government is in shambles and currency is worthless. For two decades, the powerful U.S. economy kept the dollar strong and gold prices low. But lack of confidence in the financial system and the specter of more terror attacks are pushing gold prices up -- and individuals back into the gold market.

Gold dealers report that business hasn't been better since, well, December 1999, when Y2K fears were at their height and gold popped to $318 an ounce. Most gold transactions are private, so there's no way to tell exactly how much gold has changed hands this year. Privacy is a big reason people buy gold. Cash purchases greater than $10,000 have to be reported to the government, but you can buy an unlimited amount by check. Once purchased, gold can't be tracked by anyone, including the Internal Revenue Service.

Clark Peterson, 54, was a public relations officer for a military recruiting office in the Murrah Federal Office Building in Oklahoma City in April 1995, when a bomb ripped into it, killing 168. "I'm a survivor," he says. He has been buying gold for a couple of years. And the collapse of Enron deepened his suspicion of corporate accounting. "When I see big boys like that go kerplunk, all I can say is that a lot of others have been dishonest with the books," he says. Gold coins have solid value, he says. "With a stock, I'm not in control of how a firm handles itself," Peterson says.

Why has gold fallen? Some say the Federal Reserve and other central banks have deliberately pushed down the price to maintain faith in paper currency. "Government intervention in the gold market was at the heart of the Clinton administration's strong-dollar policy," says J. Taylor, editor of J. Taylor's Gold and Technology Stocks newsletter. To newsletter editor Casey, it's inevitable that gold will triumph in the end. "The dollar is an unsecured liability of the U.S. government, and the government is bankrupt," he says. "It's an IOU of nothing." To Casey, gold is the answer because it's always worth something -- and it can't default. His prediction: Gold isn't going through the roof -- it's going to the moon.


Black Blade: This is quite a good article with lots of interesting examples, though there are a couple of glaring misconceptions. We know that gold is also portfolio insurance whereas some view it solely as an investment vehicle for example. Gold has benefits that are simply lost on the uneducated ignorant investor. When they argue that gold fell from $850 an ounce at one time one would have to ask if they think Enron, WorldCom, Tyco, Pets.com, Dr. Koop.com, "rip-me-off.com", etc. etc. etc. were better choices? Still, it is quite a good article worth reading.

Operative
@ MarkeTalk - Jewish Holidays
"What I am specifically looking at is the onset of the Jewish fall festivals, beginning with Rosh
HaShanah on the eve of September 6th, then Yom Kippur on September 16th, and finally
the Feast of Tabernacles on September 24th. Very interesting how these dates which are
biblical line up with secular astrological data offered by Arch Crawford. "

I believe there is another important date during this general time frame you have outlined. Fast of Gedaliah remembering
The slaying of Gehaliah appointed by the Babylonians as governor of Judah after the capture of Jersualem in approximately 586 B.C. Putting nothing past Iraq I wonder if Saddam would chose this date for an attack on Israel? I have also heard, but so far unable to confirm, that Saddam has spent billions rebuilding the city of Babylon located about 40 miles outside of Bagdad. Supposedly he has rebuilt an exact replica of the famed temple where the "handwriting on the wall" took place and has used this as a place to hold several state meetings. Maybe I can move that topic from the back burner since you have pointed out some other interesting dates coming up. Many thanks. Oh as a note of interest, Babylon is credited with formulating the basic
astrological data that is used today.

Operative
@ MarkeTalk - Yet Another September Date.
http://hope-of-israel.org/saddam.htmThe link is an interesting read concerning Saddam's Rebuilding of Babylon. The First Annual Babylon Festival was held, you guessed it, September 1987. We might do well to watch events a little more closely as the next month approaches.
misetich
Clueless in Crawford-the Bush administration will try to convince the country that everything is under control -- that the economy is mending, that "shady" business practices are no longer a problem
http://www.nytimes.com/2002/08/13/opinion/13KRUG.htmlSnip:

In short, people thought about Cisco the same way they thought about Enron.

That's not a strained comparison. Even when Cisco was riding high, an analysis in Barron's dubbed it the "New Economy Creative Accounting Exemplar." The company's specialty was using its own overvalued stock as currency -- paying its employees with stock options, acquiring other companies by issuing more stock. Thanks to loopholes in the accounting rules -- loopholes defended with intense lobbying -- these transactions allowed executives to progressively dilute the stake of their original shareholders, without ever declaring this dilution as a business cost.

The resulting illusion of profitability sustained the stock price, making more questionable deals possible. Some analysts flatly called Cisco a pyramid scheme.

When Enron's financial house of cards collapsed, $80 billion of market value vanished. Cisco hasn't collapsed, but its market capitalization has fallen by more than $400 billion. Nobody from Cisco management -- ranked No. 13 in Fortune's "greedy bunch" -- has been arrested. But then neither has anyone from Enron.

Some cynics attribute the continuing absence of Enron indictments to the Bush family's loyalty code. But the alternative explanation is both innocent and chilling: Enron executives may have deluded and defrauded their shareholders without actually breaking the law. What Cisco did was definitely legal.
...............

Now the administration is sounding the all clear -- we've passed a bill, we've arrested five people, it's all over. But the work of reconstructing corporate America has barely begun.

The next step, surely, is dealing with stock options. It's not just that companies overstate their profits by failing to count options as an expense. Huge grants of options also give executives an incentive to do whatever it takes to produce a short-term bump in the stock price -- if one year of illusory success can net you $157 million, who cares what happens later?

Byron Wien of Morgan Stanley recently told a group of security analysts that "stock options malevolence" is at the root of corporate scandal, and that "anyone who says that stock options aren't an expense destroys his credibility on all other issues." Well, Mr. Chambers's company still refuses to count stock options as an expense. The administration has said that it opposes rules that would require Cisco to change its accounting, and the choice of Mr. Chambers as a speaker seems to be a reaffirmation of that position.

As I said, they just don't get it.

****************
Misetich

Cisco's is only one example of the various pyramid, ponzi schemes that are STILL perfectly legal-

The danger of accepting these ponzi schemes is threatning not only the markets but also the economic system

and nobody has the guts to change anything until its too late

Got gold?

misetich
O'Neill: Sees Growth, Zero Inflation
http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&feed=bus&src=202§ion=news≠ws_id=bus-n15149835&date=20020815&alias=/alias/money/cm/nwSnip:

By Reed Stevenson

SEATTLE (Reuters) - U.S. Treasury Secretary Paul O'Neill said on Wednesday that the U.S. economy was set to exit 2002 in good shape with inflation benign, but exhorted corporate executives to help revitalize the economy by setting an example of honesty and integrity.

"If we go back to a balance (of exports and imports) in the third quarter we can expect growth in the three percent range... It's a rate that I think will leave us with zero inflation," O'Neill told business leaders in Seattle on the second leg of tour that will also take him through Denver.

*************
Misetich

Uh? Paul, wake Paul, we're in Kansas now! balance of exports/imports - only exists in the land of make believe!

Surprised O'Neil is managing to stay employed at the Treasury-

Got gold?


misetich
Pink slips proliferate in Bay Area
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/08/14/BU244727.DTL&type=businessSnip:

As the nation remains mired in an economic funk, several more Bay Area companies are slashing their payrolls to cut costs.

Silicon Graphics Inc., a Mountain View computer-maker, said it is cutting 7 percent of its workforce, or about 315 jobs. Just under a third of the cuts, effective Aug. 25, will occur at the company's headquarters.

..........
Other layoffs include:

-- Flextronics International, a Singaporean contract manufacturer run largely out of San Jose, told California government officials it plans to cut 400 workers on Aug. 30 in the Silicon Valley city.
............
-- Bay View Capital Corp., which signed a deal last month to sell its retail banking arm to U.S. Bancorp, told The Chronicle it plans to cut 130 jobs at its San Mateo corporate headquarters on Oct. 1.
..........
-- ACT Manufacturing, a bankrupt electronics manufacturing firm, notified the state Economic Development Department it plans to close its San Jose manufacturing plant and let 106 workers go on Sunday.
..........
-- ITT Industries, an electronics powerhouse, notified the state it plans to let go of 166 workers from its systems division in Sunnyvale on Sept. 30 after losing an Air Force contract.
*************
Misetich

O'Neil keeps on dreaming -3 -3 1/2% growth - as the unemployment roll and bone pile swell

The SM are in for a surprise in the next few months

Got gold?

Waverider
Indians desert gold market
http://news.bbc.co.uk/2/hi/business/2195201.stmSnippit:
"India, the world's largest consumer of gold, has cut imports of the precious metal by nearly half because of the sharp rise in global prices in recent months. People are exchanging their jewellery rather than buying with cash and they are coming to buy only what's absolutely necessary, maybe for a wedding or a gift, not like normal times when they would walk in and just buy jewellery."

World gold prices have risen almost 15% this year as investors choose to bank on the precious metal because of continuing weakness in the US economy and the slide in global equity markets. The peak demand for gold is the wedding season, which runs from December to May, but this year sales fell by about 40%."
USAGOLD / Centennial Precious Metals, Inc.
Hard assets... Easy access!
http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

Call USAGOLD - Centennial Precious Metals
(800) 869-5115

Horatio
Cycles
In 1938 a study was done buy Dr. William Peterson .He determined that the PH level (acid-alkali)of the blood followed a pattern that coincided with the stock market prices for that year.A peak in stock prices occured August followed by crash in sept-oct period followed exactly by PH levels in the blood.
Food for thought......The Ph was effected by weather and barometric pressure 'sun flares etc.It was determined that a percent change in weather was followed by a similar percent change in stock prices measured by the deviation from the norm.
Drought and Hurricanes have coincided by changes in stock prices as measured by % deviation from the norm.
Waverider
S.Africa says will not nationalise mine industry
http://www.reuters.com/news_article.jhtml?type=search&StoryID=1328878Snippit:
"The South African government said on Wednesday it would not nationalise any part of the mining industry, after three hours of talks with global mining giant Anglo American and its diamond and gold subsidiaries.

It also said it would not target any percentages for ownership by blacks in the mining industry, which is still dominated by whites. It is vital as we aim to transform our industry that it continues to offer investors complete security and competitive returns," the statement from the mine executives and four senior government ministers said."

Waverider: I don't know how believable this is...maybe one of our South African Goldbugs would comment? TIA!
Horatio
Cycles
The decennial cycle indicated that the year ending in two as in 2002 has a 80 % positive factor in stock prices for mar-apr period
also for apr-may,a 100 % posive factor for jul-Aug,followed by a 80 % positive factor for Aug-Sept .This is followed by a 100 % NEGATIVE factor in Oct-Nov period and 80 % NEG factor for Nov-Dec turning positive for Dec-Jan by 80 %.
This was followed by NEGATIVE factors for 2003 all the way from Jan to Nov-Dec.In other words a peak will occur in Aug of 2002 followed by very Negative forces for almost all of 2003 for stock prices..
If stock prices are contrary to Gold ,the bottom should be this month August followed by a BIG Bull market for almost a whole year.Stay the coarse.................
Horatio
Israel ,Jordan,Iraq
It appears the U.S. is preparing troops and equipment for movement to Jordan.I predict Israel will strike Iraq with support from U.S. forces stationed in Jordan.Due to lack of support from Europe and Saudi Arabia, this looks like the most likely outcome ,probably in Oct-Nov period. This most likely will trigger gold prices.
Sierra Madre
Operative: STAY ON TOPIC!

STAY ON TOPIC.

Thanks.

Sierra
mikal
@Waverider
Re: Your msg. #83053. Good story, but it fails to mention that a large number of Indians have switched to buying gold in offshore markets, at a much lower cost.
Socrates964
Brazil
Interesting profile of presidential contender - looks like elite is swinging behind Lula. Ciro has also made noises about confiscating domestic savings.

From today's Estado de S"o Paulo (my translation) -- 8/15/2002 p. A12

�Damn the Market. I'll do what's in my manifesto'

Ciro becomes irritated at questions and a dinner with executives and bankers ends in an argument.

SONIA RACY

Before some 30 executives and bankers gathered at a private dinner in a house in the Jardins suburb in S"o Paulo, on Tuesday night, the presidential candidate Ciro Gomes made another of his grand campaign statements: �Damn the Market. I'll do what's in my manifesto, that's on my website. I repurchased the debt of the state of Cear� at a discount to face value and never defaulted'.

The house belonged to the executive, Ricardo Steinbruch of the Vicunha group. The statement, uttered at the end of the meeting left the guests perplexed. Ciro was giving a reply to a question from one of the attendees, "What would be required to calm the market".

The candidate's short fuse triggered complaints and discussions throughout the room, while Patricia Pillar [NB a famous actress and Ciro's wife] sitting next to Ciro, tried to calm him saying �Listen! Listen!�. To no avail. Ciro felt offended and added "I'll cut off my hand before I sign any deal with the bankers". It was at this point that the guests fell silent. And according to many of those present, decided that between Ciro and Lula, they prefer Lula.

�He's aggressive, it's in his blood. It's only after he's struck that he tries to tone things down', said one of the guests, according to whom, Ciro showed no restraint in his statements and didn't explain how he plans to implement his economic plan in the light of Brazil's current situation.

sector
Global: A Deflationary Mosaic
http://www.morganstanley.com/GEFdata/digests/20020815-thu.html#anchor0Stephen Roach (New York) Morgan Stanley

I continue to believe that the balance of risks on the price front has shifted away from inflation to deflation. The evidence, in fact, is building that more than a casual whiff of deflation is already in the air in the United Sates. Unfortunately, that's exactly what the model of the post-bubble economy would predict -- an overhang of excess supply that could lead increasingly to widespread price destruction. How serious is this risk?
+++++++++++++++++++++++++++++++
Roach paints the deflationary picture. A post-bubble(s) predicament that features a declining general price level.

Gibson's Paradox stipulates [Recall we are now in a six-year forced gold standard due to manipulation] that real interest rates and the general price level vary inversely while on a gold standard.

IF, as Roach indicates, we are headed for deflation and a declining general price level, then EITHER real interest rates OR gold MUST rise to compensate.

Real interest rates are plummeting and the FED simply cannot raise the Fed Funds rate without devastating the stock, credit and mortgage markets... which is the US and World economy. Wait longer and see real rates fall further and further. In reality there is no bottom to the rate fall until the only other countervailing force is applied.

That leaves gold to rise. But it can't be allowed to rise without destroying the Fed's second largest bank JPM due to its outlandish gold derivatives position. The BIS is far worse off with 27, 000 tonnes of gold derivatives hanging.

The Fed is trying to fight hundreds of years of economic data that supports Gibson's Paradox. The Master of the Universe finds himself in a no-win situation:

(1) Raise gold to re-establish Gibson's economic equilibrium and wreck JPM, the BIS and severely damage the FED itself... or

(2) Raise real interest rates and wreck the US and World economy.

Greenspan's fatal personality flaw has always been an inability to make timely decisions. LTCM proved this as he mistook the DEFERRAL of a solution to BE a solution. Now he has come face to face with a decision that cannot be pushed aside.

Do we have a year? A Quarter? A Month? A week?

The answer regarding timing is found instead by asking how much damage caused by falling real interest rates can be accepted. Money will and IS flowing to the historic safe harbors of gold and other hard assets... in spite of the manipulation of corrupt United States cronies. That flow of money can only accelerate.

The above is true if Roach is correct an deflation envelopes the US.




Sierra Madre
Here's an interesting LETTER FROM ARGENTINA

"Is what Brazil got, assistance? Is it possible to live under a debt load such as Brazil's? I am not saying LIVING OUTSIDE THE IMF, but each passing day I like more the idea of developing a country on the basis of its OWN capacities and possibilities.
"Take note that at this time, nobody is too much interested in COUNTRY RISK and yet we are still alive. The lesson was violent and traumatic, but it did us no harm and who is to say that THANKS TO THE IMF, Argentina may not find its true destiny, its road ahead independent of financial needs.
"A little help doesn't kill, but to live indebted is deadly. I'm already hearing of several industrialists who were liquidated, talking again about reactivating their small or medium industry. Today I heard about a businessman, who makes blades for working leather, say that he was looking for a larger shop space and personnel, in view of the increased demand. What do you think?
"The problem is large projects, access to technology, medicines that we don't have and thinks of that sort, but, importing lettuce from Taiwan, fruit from Australia, cheese from Ecuador, always seemed crazy to me. What if we learn to live ON OUR OWN (as Aldo Ferrer wrote?
"As L�pez Murphy said: "for some time, ten years, we are going to have a HIGH DOLLAR", so trips to Miami to buy T.V.s or cameras is OVER.
"What will it be like to live without debts? How will it be to LIVE OFF OF OUR OWN?
"Luis
"Buenos Aires"

Translator's note: Notice that what happened to Argentina may be showing the future for the U.S. and how its trade balance will be corrected eventually, as well as HOW PEOPLE IN THE US WILL BE PUT BACK TO WORK AGAIN: BY GETTING THE US DOLLAR OFF ITS HIGH HORSE OF RESERVE CURRENCY OF THE WORLD. In other words: going back to GOLD!

Sierra
Mr Gresham
CoBra(too)
"different board" -- not sure what you read, as I've only had limited time to read and none to post -- but if anything seemed dis-inviting to you, please remember all that goes said, and unsaid, read, and unread in the spaces between posts. The Forum is an impossible vehicle for the perfect communication we all desire, so we must make allowances, and give many benefits of many doubts, mustn't we?

We are all in the room together, we just can't see each others' faces...so I will still see -- ALWAYS! -- a great chair at the Table marked with the name "CoBra(too)"
TownCrier
Central Bank Insider update!
http://www.usagold.com/centralbank/current.htmlFederal Reserve Board of Governors now fully staffed...

Alan Greenspan KBE...

Classic tension between finance ministries and central banks...

Football after banking...

Japanese banknote redesign...

Rudi Dornbusch passes. "When they (Brazil) call 1-800-BAILOUT, just let it ring. Say our operators are busy." [Dornbusch in opposition to the IMF's 1998 bailout of Brazil.]

Click the URL for all the details.
NEMO me impune lacessit
JEEZZ !!!
Five minutes ago an TA-analyst on CNBC said that gold could
go to $400.

NEMO
BillinOregon
Roger Bently Arnold's Comments
General Comments

Spreads

Even as the equity indices increased yesterday credit spreads continued to widen for speculative and investment grade debt. Most speculative grade debt is now being priced in anticipation of default resulting in bankruptcy. What this means is that they are being valued at what the anticipated equity particpation would be for the bond holders when the company goes under rather than if the company goes under.

On May 15th, 3 months ago, speculative grade credit spreads were at 875 basis points.

On July 23rd, the start of the near term equity run, or bear market bounce, they stood at 1205 basis points.

Yesterday they increased again to 1385. During this same time frame investment grade spreads have increased from 202 to 258.

The marginal cost of borrowing for the 80% of US companies that fall in speculative grade has increased by 250% in just the last 3 months and that assumes they can still access the capital, which of course they can't.

The 20% of companies falling within investment grade have experienced an increase in their costs to a lesser degree but they already have too much debt and aren't borrowing any more.

Companies are being suffocated. The only option left for many of them is to begin firing people and shutting down.

If consumers don't have jobs or income it doesn't matter how cheap mortgage rates or car loans get.

And when the ones that do have jobs catch on they won't spend either.

How long is it going to be before the equity traders realize that the bond traders already decided what the outcome of this is going to be and start racing for the doors like someone just shouted fire in a crowded theater?

The probability of a debt bubble implosion is 100% according to these numbers. The most probable result being a defaltionary spiral.

Could the bond traders be wrong? Absolutley.

But, buying or trading equities while the bond markets are sending this signal is like playing russian roulette with your money.

At the very least equity buyers and traders had better understand what the bond markets are signalling about equities. They are getting ready to foreclose.

Date Index Value* (Credit Spread Level/Divisor) Credit Spread Level(bps) Divisor Duration (years)
08/14 1385.3 922.6 0.66599 4.0
08/13 1378.2 920.2 0.66771 4.0
08/12 1358.6 907.1 0.66771 4.0
08/09 1343.6 923.6 0.68742 4.0
08/08 1315.9 904.6 0.68742 4.0

http://www.spglobal.com/indexmaincredit.html

Bankruptcies by Public Firms Set a Record
By Dena Aubin

NEW YORK (Reuters) - U.S. corporations set a record for bankruptcies this year after US Airways Group Inc. sought protection from its creditors on Sunday.

Assets of publicly traded companies filing for bankruptcy have reached $267.6 billion this year, according to BankruptcyData.com, as accounting scandals and crippling debt toppled some of America's biggest firms.

Assets in bankruptcy year-to-date have now surpassed the previous record, of $258.6 billion for all of last year, BankruptcyData.com said.

Three of the 10 largest bankruptcies ever came this year. Phone giant WorldCom Inc. , with $103.9 billion in assets when it filed last month, was the largest bankruptcy ever, smashing the record set last year by energy trader Enron Corp. , which had $63.3 billion in assets

U.S. 2nd-Qtr Personal Bankruptcies Rose to Record
By Siobhan Hughes

Washington, Aug. 14 (Bloomberg) -- Americans filed for personal bankruptcy at a record pace in the second quarter, figures from the Administrative Office of the U.S. Courts show.

Personal bankruptcies totaled 390,991 between April and June, a 5.9 percent increase from the previous three months and the most for any quarter, the courts office said. That brought the number of such filings over the previous 12 months to an all-time high of 1.47 million.

Americans had a record $7.9 trillion in personal debt, including credit card loans and home mortgages, at the start of the second quarter after borrowing to purchase cars, clothing, and other goods at a breakneck pace in the second half of the 1990s. The repayments are coming due as unemployment is rising amid a slow recovery from recession.

"This is the debt hangover from the 1990s," said Sam Gerdano, executive director of the American Bankruptcy Institute, a research group whose members include lawyers, accountants, and consumer advocates. "At some point you have to pay the bill and if that comes during a period when the economy is softening, it makes it that much harder."
TownCrier
Missing the obvious
As reported in today's WGC Daily Gold Market Commentary:

The meeting held yesterday between Anglo American and De Beers with South African government leaders was followed by a statement to the effect that the government would not nationalise any part of the mining industry, nor would it specify target levels for black ownership in the mining industry.

This is a more pragmatic stance than some observers had initially feared when the proposed mining charter was leaked to the press a few weeks ago -- although the government had made clear that it was merely a starting point for negotiation.

The joint press release from the government and the mining companies refers to the need to transform the industry, but equally that it is important "to offer investors complete security and competitive returns".

---end excerpt-----

If it were TRULY "complete security" and "competitive returns" that they desired to offer investors, then they would be cooperatively emphasizing investments in the PRODUCT (gold) itself and not in the COMPANY that merely mines for it among the world's depleting reserves. Think about it.

No, really. Think about it.

Give yourself credit for seeing through the standard haze of the corporate finance machine and governance as usual. Call USAGOLD - Centennial for the kind of assistance and square dealing that you deserve.

Randy
barnaclebob
USA Today: In uncertain times, gold beckons again
http://www.usatoday.com/money/markets/2002-08-14-gold_x.htm

Violence in the Middle East. A drop in the value of the U.S. dollar on world currency markets. The worst bear market since the Great Depression.

In short, it's a glorious time for the gold market -- the best since 1999, when a computer glitch threatened to leave the world living on bartered corn and rainwater. The worst brings out the best in the precious metal:

Gold has spiked to $314 an ounce, from a three-year low of $256 in April 2000.
Mutual funds that invest in gold-mining stocks have soared 37% the past 12 months, vs. a 23% loss for the Standard & Poor's 500-stock index. Investors have poured $650 million into gold funds this year -- so much that some funds, such as Vanguard Precious Metals, have closed their doors to new investors.
The gains have sparked a new gold rush. The U.S. mint sold 48,000 gold Eagles in July, 60,500 ounces in all, up 20.6% from a year earlier.
"July sales were up 50%," says Michael Byrd, president of Austin Rare Coins, which sells gold bullion as well as collectible coins. "We're having a Y2K kind of year."

Fervent gold investors believe the government is desperately trying to squash gold prices and prop up the stock market. "The last thing they need is a gold rush," says Doug Casey, editor of International Speculator, a gold-oriented newsletter. He thinks gold will win out. "Gold is like a coiled spring," he says. He predicts it will top $1,000 an ounce.

Gold is a direct bet against the monetary system: Gold investors figure an ounce of gold is always worth something, even if the government is in shambles and currency is worthless. For two decades, the powerful U.S. economy kept the dollar strong and gold prices low. But lack of confidence in the financial system and the specter of more terror attacks are pushing gold prices up -- and individuals back into the gold market.

Gold dealers report that business hasn't been better since, well, December 1999, when Y2K fears were at their height and gold popped to $318 an ounce.

"Through June of this year, we've sold as much gold as we did in 2001," says Carl Wright, president of International Precious Metals in Brookeland, Texas.

"We've had retail customers buying 200, 300 ounces every other week," says Michael Kramer, head gold trader at Manfra Tordella & Brookes in New York City. "Every few days, we do a couple of large trades -- couple thousand ounces. I don't remember the last time it was this busy."

But most gold transactions are private, so there's no way to tell exactly how much gold has changed hands this year. Privacy is a big reason people buy gold. Cash purchases greater than $10,000 have to be reported to the government, but you can buy an unlimited amount by check. Once purchased, gold can't be tracked by anyone, including the Internal Revenue Service. "Many of my clients' wives don't even know about their purchases," says Kevin Boulais, president of Atlantic Rare Coins in Mason, N.H.

Why are investors racing for gold?

Shaken trust. Clark Peterson, 54, was a public relations officer for a military recruiting office in the Murrah Federal Office Building in Oklahoma City in April 1995, when a bomb ripped into it, killing 168.
"I'm a survivor," he says. He has been buying gold for a couple of years. And the collapse of Enron deepened his suspicion of corporate accounting. "When I see big boys like that go kerplunk, all I can say is that a lot of others have been dishonest with the books," he says. Gold coins have solid value, he says. "With a stock, I'm not in control of how a firm handles itself," Peterson says.

Shaken dollar. For many years, foreign investors rushed to dollar-denominated investments, such as U.S. Treasury bills, when war or bad economic news made the world seem dangerous. But this year, a falling U.S. economy and an open-ended war on terror has forced the dollar lower on world markets, prompting many investors, including foreign buyers, to purchase gold instead.
Shaken savers. Many gold buyers are simply looking for an alternative to the stock market, or the 2% to 5% they could earn in money market mutual funds, bank CDs and bonds. "We've seen a lot of new buyers come in, including my stockbroker and my sister," says Marc Watts of Gaithersburg (Md.) Coin Exchange.
But many newcomers to gold investing run the risk of doing the same thing they did in the stock market: buying just because the price is rising. "It's a funny thing -- they don't want to buy gold when it's at $250 an ounce," says Leon Hendrickson, a gold dealer in Winchester, Ind.

Some think the rise in gold prices comes from a fall in confidence in the entire monetary system, not just the stock market and corporate accounting.

The government recalled and melted its gold coins in 1933. The dollar has been backed only by the government's good word since 1973, when the country came off the gold standard. The value of the dollar today is a reflection of the world's belief in the U.S. economy. When confidence in the dollar is low, people start buying gold. To gold fans, the fall of the dollar and the rise of gold is a long-awaited -- and frequently predicted -- vindication of the gold standard.

Economists and politicians have debated the wisdom of taking the U.S. off the gold standard for decades.

"It was a mistake," says Jack Kemp, a former New York congressman and secretary of Housing and Urban Development. A floating-rate currency system has led to disasters in Latin America and other developing nations, he says. "We need to get a distinguished group together to rebuild the monetary system."

Rep. Ron Paul, R-Texas, says the legacy of leaving the gold standard has been a 30-year bout of inflation manifested in different ways, such as increased debt. "The Federal Reserve is inflating like crazy," he says. His solution -- which he has no illusions about becoming law -- is to legalize gold as an alternative currency.

Few mainstream economists agree with the idea of returning to the gold standard. "It's a stupid idea," says David Wyss, economist for Standard & Poor's. A currency tied to gold means the government can't stimulate the economy in a recession. And just as floating-rate currencies tend toward inflation, gold-based currencies tend toward deflation.

But some deeply distrust the government's ability to manage the economy. To them, gold's ability to protect against inflation has become an item of faith. In theory, gold prices will rise along with inflation. But the price of gold has fallen from $875 in 1980, while inflation has risen an average 3.8% a year.

"Gold languished for so long that it looked like soggy cereal," says Mark Bass, a financial planner in Lubbock, Texas.

Why has gold fallen? Some say the Federal Reserve and other central banks have deliberately pushed down the price to maintain faith in paper currency.

"Government intervention in the gold market was at the heart of the Clinton administration's strong-dollar policy," says J. Taylor, editor of J. Taylor's Gold and Technology Stocks newsletter.

Adds Paul: "There has been a concerted effort by the government to discredit gold."

To newsletter editor Casey, it's inevitable that gold will triumph in the end. "The dollar is an unsecured liability of the U.S. government, and the government is bankrupt," he says. "It's an IOU of nothing." To Casey, gold is the answer because it's always worth something -- and it can't default. His prediction: Gold isn't going through the roof -- it's going to the moon.

Gold fans argue that the yellow metal is good in any situation, even if the economy sinks into a period of falling prices, as it did during the Great Depression.

"Gold is best looked at as a crisis hedge," Casey says. "If your bank won't let you get your money out, it's best to have something of value in your hand."

But gold fans have argued for a monetary collapse ever since the country went off the gold standard. It hasn't happened yet. There's an element of apocalypse in hard-core gold literature. Buy gold, it implies, and the world can fall apart -- but you'll still have your money.

Those looking to gold as a cure for all the world's financial ills should remember that gold can be every bit as risky as stocks. Plenty of people who bought gold at $800 an ounce are still down by 60% -- and even more when you consider what they could have earned in a bank CD in the meantime. Central banks are still selling gold and can push the price down sharply. And when gold prices get high enough, mining companies can reopen mines that were unprofitable when gold was at $260 an ounce, but quite profitable at $350.

Even ardent gold supporters recommend it be used in moderation as a kind of insurance against utter catastrophe.

For example, Taylor predicts the Dow Jones industrial average will plunge to 5,000, and that real estate prices will collapse, too. It would be a disaster on nearly every level -- except for gold. Taylor is selling his house and investing 10% to 20% in gold bullion coins. A financial catastrophe would push up the price of gold enough to offset losses elsewhere.

Nearly all advisers say that gold is best used as disaster insurance, not as your sole portfolio holding. Owning gold does involve special problems -- like what to do with it once you own it, particularly if you value your privacy. In a small town, you can't walk into the bank with a bag of cold coins "without everyone knowing what you have," rare coin dealer Byrd says.

And what if you think your bank will be out of business when you need it most? "Some people bury it," says coin shop owner Watts. "It's kind of weird, to work hard to accumulate wealth and then hide it."

If you hide gold, you have to worry about someone finding it or stealing it. Even if you put it in a safe-deposit box, the cost of storage and insurance will eat away at your gains.

Most coin dealers say that if you buy rare coins, buy them for their intrinsic beauty and collectible value first. Gold investor Peterson acknowledges that his gold bet is more than a little speculation. "If you look at the history of coins, they do shoot up at times," he says. "When they get to the point where they just go wild, you have to get out."

Investors have felt gold's allure for centuries. These days, the allure is its store of value, if only in comparison with the stock market. "I've had farmers, businesspeople, people from all walks of life" as customers, says gold dealer Hendrickson. They might not be able to sell real estate or stocks quickly, but they can call Hendrickson and turn gold into cash. "It's always worth something."

From USA Today no less: The Bull shall lift off in earnest very shortly........
MarkeTalk
Operative--September date for Gehaliah?
I am not familiar with the story of Gehaliah. Do you know exactly on which day in September 586 B.C. he was slain? By the way, you mentioned the rebuilding of ancient Babylon. This is a fact which I have seen in various publications. Saddam has spent millions of dollars doing this. Why? Because he fancies himself to be the modern reincarnation of Nebuchanezzar, the famous Babylonian king who took the Jews captive. We get our Bible story of Daniel in the lion's den from this period in history.

And I have heard it rumored that Saddam has some strange, life-threatening illness and that he wants to leave this life in a "blaze of glory". What better way than to attack Israel with Scud missiles. We could be looking at a repeat of the 1973 Yom Kippur War when the Arab nations attacked Israel on its holiest day. Another possibility is that Hamas and Hezbollah (with the backing of Saddam and our Saudi "friends") will unleash multiple suicide bombers on several Israeli cities all at once, thereby creating mass confusion and panic. All in all, I just don't have a good feeling about Middle East events for the month of September. Gold should be a big beneficiary of all this chaos.
pinetree
From pension fund to gold
As reported in the Sacramento Bee on August 12....

James E Burton, the head of the nation's largest public pension fund, has accepted a position as chief excutive of the World Gold Council in London.
The decision follows Burton's announcement in May that he planned to leave this year as head of the California Public Retirement System.
He wll leave his current post on Aug. 23 and report to work in London on Oct. 1.
Burton belives that the timing is ripe for gold to become much more prominent in the investment world.

Pinetree....Burton did a bang-up job with the California Public Retirement System(CalPERS). He was the CEO of
CalPERS for the last seven plus yrears.
Blackjack
Switzerland heading down the road to Deflation?
http://www.bloomberg.com/feature/feature1029334376.htmlLondon, Aug. 14 (Bloomberg) -- I've often thought that if the world fell apart, I could always retreat to Zurich. Now I'm reconsidering.

Swiss retailers had their worst month in one and half years in June, with sales dropping by three percent compared with June 2001.

Consumer prices fell in July at the fastest annual rate in more than three years. The consumer price index declined at an annual rate of 0.1 percent from July 2001, the first drop over a year since the 12 months ending in December 1998, according to the Federal Statistics Office.

The Swiss Purchasing Managers Index fell this month for the third month in a row, suggesting most companies expect output to decline further.

The country I once regarded as the world's ultimate safe haven may be following Japan down the road to deflation.

The Swiss corporate sector reinforces this impression. Swissair Group has already gone bust. The engineering giant ABB Ltd. is in crisis.

Swiss pharmaceuticals companies have been performing poorly. Roche Holding AG said this morning that its first half profit dropped 28 percent as the drugmaker paid higher taxes and earned less from investments.

Swiss banks are in trouble. Credit Suisse Group posted a greater-than-expected second-quarter loss this morning, and proposed cutting its dividend for the first time ever.
mikal
@Downunder
Re: msg.# 83042 last night. You made some good points last night about PM storage: "Loose lips sink ships" and the "wild cards" of bank safe deposit boxes, possible confiscation or bank closure. These are the reasons I will empty my boxes if there are any rumors, serious war, state of emergency, or martial law. Of course, this could happen overnight, especially if there's another major act of terrorism. According to the law, bank closure cannot interfere with reasonable public access to safe boxes. And I know that lawyers, police officers, prominent businessmen, etc. use them. As for your concern that a "renegade employee" might dissappear with the goods- my banks have no access to my box without my keys, or a blowtorch. Each box has two keyholes, one key stays with the bank at all times. I remove the box after the box door is opened, and carry it to a private room, FWIW.
Black Blade
A Deflationary Mosaic by Stephen Roach (New York)
http://www.morganstanley.com/GEFdata/digests/20020815-thu.html#anchor0

Snippit:

I continue to believe that the balance of risks on the price front has shifted away from inflation to deflation. The evidence, in fact, is building that more than a casual whiff of deflation is already in the air in the United Sates. Unfortunately, that's exactly what the model of the post-bubble economy would predict -- an overhang of excess supply that could lead increasingly to widespread price destruction. How serious is this risk?


Black Blade: Interesting article where Stephen Roach states his case for deflation. The markets today are rather confused. After the Philly Fed gave a gloomy picture of the economy, stocks fell -- but only for a little while, then turned higher. Is this rational? There is no other news to even suggest any improvement in the US (or global) economy. Earnings are at best flat though there are some who claim that earnings are improving. I am however, referring to real actual earnings and they are referring to phantom earnings such as "pro forma" or "operating" earnings. The recent August 14th deadline for certification did not reveal much but then there were no extraordinary penalties and so it appears now that the whole event was a publicity stunt engineered by the SEC. It is already illegal to knowingly misstate earnings. Those who are misstating earnings are not likely to suddenly come out and say: "gee I guess I was lying before". We could see some wild volatile trading sessions ahead. Meanwhile the Middle East question is coming to the forefront again as US air strikes in Iraq's "No Fly Zone" have resumed. As a result oil and natural gas prices spiked higher. Also, the drought in the American breadbasket is taking a huge toll on grain production. That's OK though as unimportant items like food and energy aren't including in the "core rate" of inflation. Hmmm... The debate about "inflation" vs. "deflation" will still have to be resolved as events play out.

It's a virtual minefield with a weak US dollar, corporate scandals, rising geopolitical tensions, record level debt, etc. Note: Henry Kissinger will be on CNBC's "Capital Report" tonight to discuss the possibility of another US-Iraq war. You may have noticed the rise in petroleum prices lately coupled with sharply declining inventories.

Off to the gym!!!

Mr Gresham
BillinOregon
So much news is posted here, I'll bet most of us don't have to go very far to get what we need to read, so I'm grateful to those who regularly bring us pieces from outside.

Roger Arnold's writing keeps hitting home in the sharpest way. With a credit crunch happening, he says, small business is going to be frozen out almost simultaneously around the country.

"How long is it going to be before the equity traders realize that the bond traders already decided what the outcome of this is going to be and start racing for the doors like someone just shouted fire in a crowded theater?"

That means that, while everyone working at a struggling small business, or just laid off, assumes that their case is unique, and that business is going on as usual elsewhere, the recognition may soon flash across the vision of them all nearly simultaneously that it's all crunching in parallel.

That is really a set-up for a very sharp panic and freeze-up of nearly every part to the finance system, beyond even the Fed's ability to re-liquefy. And that's what their consequence will be for plugging up every little leak -- monetary and statistical -- so efficiently, as each of them first appeared on the horizon. (Kudos for masterful Economic Management! Boos & hisses for forgetting about larger Economic Reality!)

Gold, of course, is one of their "little leaks" BOTH monetary and a statistical indicator, so it's had more than its fair share of "attention paid to it."

As in Dresden, it's always us civilians who are the "collateral damage." "So it goes."

Thanks, Bill!

Operative
@ Sierra Madre
STAY ON TOPIC, Your point is noted and I thank you for the reminder. I realize that my attempts to inject a little humour here with a post may not be appreciated by the audience at large. I will curtail the storytelling. My goal is to add what little information, understanding, current world events that may impact on financial aspects, especially gold, to others here at this table. I am gratefull for all the information that this forum has provided. I have spent several years trying to catch up and increase my knowledge of finance and have found this organized manipulation of gold to be of great interest. So many parts of the puzzle have been placed together by reading, studying, and trying to understand what greater minds have offered here. My posting is an effort/attempt to repay, as best I can, the debt owed to all who share. Even if sometimes all I can do is add a smile or chuckle.

I have no hidden agenda but I am a seeker of ideas and truth.

I can be somewhat dense at times. Slow to pick up in the readings between the lines as Mr. Gresham(?) points out.
Not sure if its a mental defect on my part or just going in so many differant directions that I bump into the trees on my way to the forest. If in the future when anyone feels I have left the fold I would consider it a great kindness if someone would point out exactly where I have left the golden trail. (yes, I really can at times be that dense)

The stability/depth found here at USAGOLD is the main reason why I hope to participate. It truly is a gentleman's place of gathering as compared to some of the other web sites that I have seen/monitored. I am wise enough to value this fact.
However, may I humbly request that some of you great minds give us hobbits a little running room here to explore the side trails but to also understand when we have gotten lost in our thoughts and help us to return. Soon, perhaps very soon, there are going to be hundreds/thousands of lost and confused hobbits searching for the answers provided by this great group. Having had thier life's savings decimated, tired of the lies from the media and the trumped up government statistics, they will come in search for the truth. Might I suggest that USAGOLD begin preparations of "aid packages" to be handed out in masse to the coming flood of refugees who will seek solace within these walls.

STAY ON TOPIC, I really am trying.
misetich
JP Morgan, Merrill, Morgan Stanley Ratings May Be Cut by S&P
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVwRLxPGTWVycmlsSnip:

By Emma Moody


New York, Aug. 15 (Bloomberg) -- Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Chase & Co., suffering from slumping investment banking revenue, may have their credit ratings cut by Standard & Poor's.

Goldman Sachs Group Inc.'s short-term ratings also may be reduced by the largest ratings company and Lehman Brothers Holdings Inc.'s ratings now carry a negative outlook, meaning the rating is more likely to be lowered than raised.

An expected gain in business hasn't materialized, S&P analyst Tom Foley said and Wall Street firms are having the steepest drop in profits in 10 years. Stock sales and mergers are at their slowest pace in five years and losses from bankruptcies of corporate customers are mounting.

"We're not seeing an improvement," said Foley in an interview. "We're taking a dimmer view of their operations."

............
Merrill, Morgan Stanley and J.P. Morgan all have AA-long-term ratings at S&P, the fourth-highest on the 22-level scale. Their A1+ short-term ratings are the highest for debt that matures in nine months or less. S&P's review, which likely will be completed next month, probably won't result in downgrades of more than one level, Foley said.

The firms rely on high credit ratings to keep down their cost of borrowing. A rating downgrade could cost the firms as investors demand higher returns to compensate for increased risk.

For a bank such as J.P. Morgan, which sold $4.5 billion of bonds this year, a downgrade could cost an extra $800,000 in interest a year for $1 billion of borrowing.
...............
J.P. Morgan's 6 5/8 percent notes maturing in 2012 dropped to $1,057 per $1,000 of face value from $1,060, pushing up the yield to 5.84 percent from 5.79 percent. The spread was 7 basis points wider at 167 basis points.
............
While all firms are likely to remain profitable, the lower earnings make firms increasingly vulnerable to "shocks" such as bankruptcies of large clients, Foley said.

More downgrades might be warranted for the banks, which are increasingly using derivative products to bolster revenue, said David Hendler, an analyst at CreditSights Inc., an independent research firm.
.............
As well, J.P. Morgan, Merrill and others are accused of helping energy trader Enron hide debts before the company filed for bankruptcy protection last year. The firms are also facing probes over analysts' conflicts of interest.

"Of concern to me are any surprises that may come on the regulatory and legal front," said Touchstone's Policinski.

Moody's has a stable outlook on Morgan Stanley's Aa3 rating and negative outlooks the Aa3 ratings of Merrill and J.P. Morgan. A negative outlook indicates a firms' rating is more likely than not to be lowered, though a reduction isn't necessarily imminent.

S&P has those ratings on Creditwatch negative, meaning it is actively considering a downgrade in coming months.
.............
*************
Misetich
No mention of JP Morgan's dividend. Yet it seems reasonable to conclude that their dividend will be reviewed (cut) as earnings deteriorate.
FARFEL once said, lets see which bank flinches first - and turn the knives on each other- and it is at that point that gold will free lose
We wait patiently to see which bank(s)volture smelling blood, goes after the other vulnerable banks.

Got gold?
misetich
Brazil markets slide, shrugging off CenBank moves
http://www.forbes.com/newswire/2002/08/15/rtr697342.htmlSnip:

By Todd Benson

SAO PAULO, Brazil, Aug 15 (Reuters) - Brazil's battered financial markets fell on Thursday for the fifth straight session as investors shrugged off new Central Bank measures aimed at stemming capital flight from the country's troubled mutual funds.

Hoping to head off a rout in financial markets that threatens to spill across borders, the Central Bank unveiled plans late on Wednesday to buy back domestic debt and increase bank reserve requirements. It also reversed a prior change in accounting rules that had required mutual funds to mark asset values to daily market
...........
Encouraged by the Central Bank measures, Brazil's currency, the real , jumped more than 2 percent after the opening bell, but the rally didn't hold. In a see-saw session, the embattled currency ended the day at 3.210 per dollar, a shade weaker than Wednesday's close of 3.205.

The Central Bank confirmed that it sold dollars to stop the real from sliding further.
..........
"Only an improvement in the political outlook, with either Serra moving up dramatically in the polls or Ciro Gomes and Lula adopting a firm commitment to measures aimed at guaranteeing Brazil's solvency, or a return of international bank credit lines would sustainably reverse the current crisis," Ricardo Amorim, head of Latin American research at IDEAglobal in New York, said in a research note.

"None of those events seem likely until the end of next week," he added.
************
Misetich
Brazil (Latin America) is reminiscent of SouthEast's Asia a few years ago - at that time gold got dumped (July week-end) on the "announcement" of Australia's CB selling- If my memory serves me correct gold broke from the $335 to 315 -320 over the week-end.
The flight to safe haven (US $) ensued - things appear different this time - the US and not Japan is the "wheel" in the middle this time as Latin America is a major trading partner and big importer of US goods and services
We all know how badly Japanese banks got hurt during the SouthEast contagion -

Could the same thing happen to US interests in Latin America's contagion?

Got gold?

misetich
Star telecoms analyst Grubman resigns from Salomon
http://www.forbes.com/newswire/2002/08/15/rtr697445.htmlSnip:

NEW YORK, Aug 15 (Reuters) - Jack Grubman, the well-known Wall Street analyst under fire for his dogged support of disgraced telecoms giant WorldCom Inc. , resigned on Thursday, a spokeswoman for Salomon Smith Barney said.

The news is the latest twist in an ongoing saga that has tarnished Salomon's reputation and highlighted perceptions of treachery on Wall Street.

Grubman, widely acknowledged as a guru of the once high-flying telecoms sector, is at the center of Congressional probes into conflicts of interest at the nation's top securities firms.
***********
Misetich

ANOTHER - joining the ranks of "more time with my family" and probably ANOTHER ploy by Salmon (Citi)

Got gold?
Belgian
Crude Oil
POO (Brent-London) went through its (important) resistance line and all momentum indicators, when technically interpreted, show upwards potential.
Since 1971, the US$ left (officially) the gold standard and found it more opportune to adhere to an oil-standard. Being in friendly control of the vast Arabian, cheap, oil reserves. It stays my opinion that crude oil will dictate what the past and future US$ will be worth. Oil has the intention of valuing the dollar-reserve and the management of it. That's what's WAT is for.

Will the US, as the US$ manager, succeed in getting those cheap Arabian oil reserves under its (hostile) control ?
Will other oil consumers (Euroland and China), ally with the US, in order to co-operate on this new (?) oil control, this time implemented by force ? Or will the euro-Gold-oil concept come into application, when the US fails to regain control of the whole ME oil region as such ?

Desert storm (1990) was aborted to avoid the widespread ME anger against the west and as to not shock US allies of that period. But it didn't turn out that way and the crusade between cheap oil and oil consumers is on its way to full deployment.

No matter what the outcome on the ME might be, the US$ will be forced to unhook from the oil standard and ultimately show its true worth. Russia favors the euro above the dollar, as does China, the fastest grower in oil consumption ! The US might all of a sudden stand it whole alone at a critical moment. How will this play out and what are the odds ?
Operative
@MarkeTalk
Last year the Fast of Gedaliah was on September 20 (Tishri 3) I do not have the 2002 Hebrew Calender handy at the moment. Hope this is of some help. The slaying of Gedaliah can be found in Jeremiah 41:1-2, IIKings 25:25.

What's this got to do with gold?
One of the trigger events that may set loose the bondage of gold is a war in the Middle East. Saddam is currently at the forefront of this war. It is my personal opinion that Saddam is highly unlikely to play this second round as he did during Desert Storm. The buildup/preparation of his military force (once 4th largest in the world) was destroyed as his forces were bombed into oblivion. The 100 hour ground war that followed was mostly a mop up operation. Not that Saddam is the most reasoning of men, but I feel even he has had to rethink his posture for the next battle. Perhaps a first strike instead of waiting for the sounds of U.S. Aircraft overhead. Saddam has rebuilt a great city of past reknown. He is openly comparing himself to a great leader who long ago invaded and conquered Israel. Thats the short version to explain why September may be of interest to not only Goldbugs, but for the world at large. Is it a stretch? Yes.
Am I setting dates? No. Is it something to be aware of? From the potential it has to explode the price of gold...you bet.
Perhaps another important question is, with the sounds of clashing sabbers in the air, have you got enough gold?
misetich
US Stocks Post Meager Gains; Philly Fed Surprises To Downside Aug 15 / 13:45 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029433500000&sn=1&banner=mainwireSnip:

CHICAGO (MktNews) - U.S. stock market indices held only modest
gains Thursday even as regional manufacturing area data fell into
negative territory for the first time this year.
...........
Indicators used to monitor Philadelphia area manufacturing activity
fell in August, with the general business conditions index falling to
its lowest level this year at -3.1 versus 6.6 in July, according to
Federal Reserve Bank of Philadelphia economist Mike Trebing Thursday.

Speaking to reporters following the release of the survey, Trebing
said that the survey's indices indicate a general overall weakness in
the regional manufacturing economy.

"For the first time this year, manufacturing firms' responses from
the Business Outlook Survey indicate a slight decrease in activity.
Indicators of general activity, new orders, and shipments recorded
negative readings for the first time since December 2001," Trebing said.

Trebing explained that few of the firms polled this month expect
general business activity to decline further going forward.
**********

Misetich

Yep, O'Neil's economic recovery - GDP growth of 3 to 3.5% in the 2nd half is on target....well maybe...then maybe he was misquoted on which year.

Hopefully investors will not be taken in by O'Neil positive spin and make their plans in accordance with economic reality -

The 3rd quarter is 2/3 gone and things appear to be getting worse than the anemic 1.1 GDP reported growth in the 2nd quarter

Layoff notices have picked up considerable speed and S&P warning of investment bankers future possible downgrades, airlines industry woes, slower retail sales growth with higher inventory levesl, lower corporate spending does not add up to an expansionary economy.

Investors would be prudent to initiate/add to their defensive positions through PHYSICAL GOLD

Got gold?
Blackjack
Saudi Princes don't want democracy in Iraq?
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=28629Intelligence sources believe that Saudi Arabia is quietly helping the establishment of al-Qaida in northern Iraq and nearby Syria, according to Geostrategy-Direct, the global intelligence news service.

Saudi princes are desperate to ensure the status quo and that means keeping Saddam in power, Geostrategy said.

The key Saudi fear is that the United States will create a democratic, pro-Western Iraq. Such a state would win tens of billions of dollars in foreign investment while its neighbors are ignored. At that point, why would Washington need Saudi Arabia?

The sources believe the leak of the Pentagon briefing last month on the future of Saudi Arabia was the clearest U.S. signal to the royal family that Washington is the only real friend Riyadh has. Take away U.S. protection and Saudi Arabia will be eaten by the wolves.

The sources point to another Pentagon briefing -- by Max Singer, a longtime consultant to the Pentagon on the Soviet Union. Singer is considered a quiet and taciturn man who brought some cutting-edge strategic thinking to Washington on the post-Cold War era.

Singer's message to the Pentagon was that the United States should support a Shi'ite separatist movement in eastern Saudi Arabia. There, the Shi'ites already comprise a majority of the region, which contains most of the kingdom's oil and natural gas reserves. The Wahabis can keep the empty desert in the west.

This is likely why the Saudis have blocked a decision on the development of natural gas reserves in southeastern Saudi Arabia. Abdullah wants to launch the $30 billion project to explore and produce gas as well as build infrastructure. But the other Saudi princes are concerned that they will never ever see the results of such a gas project should Washington target the royal family.
Operative
@ Belgian
"It stays
my opinion that crude oil will dictate what the past and future US$ will be worth. Oil has the
intention of valuing the dollar-reserve and the management of it. That's what's WAT is for."

As each day passes I am beginning to think that Bush's War on Terrorism has actually very little to do with the terrorists. Bin Laden has provided an opportunity for Bush to plough into the Middle East and right through the heart of OPEC. Want to control the price of oil, break up OPEC.
Afghan down, Iraq next, and when political infrastructure of Saudi breaks down, go for the brass ring. Sounds like a plan to me.? Kuwait is for all practical purpose in "our camp".
Iran, which is Persian, not Arabic in attitude (thats why the long standing trouble/wars between Iraq/Iran) will enter into a new age of "friendship" with its old ally USofA. It's possible the oil man from Texas will be the next Oil Czar of the world.
Blackjack
We are entering a historically strong season for PMs
http://www.321gold.com/charts/seasonal_gold.htmlCheck the seasonality chart for Gold and Silver.
Waverider
Operative
Please don't curtail anything - I enjoy your posts! And thank you for your answer to MarkeTalk's question - it's very interesting. I saw the connection to Gold (and I suspect most here did) but thanks anyway for spelling it out for anyone who needed it! Cheers, and keep up the great contributions here!
Waverider
Black Blade
Merrill, Morgan Stanley, J.P. Morgan May Be Cut
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVvCABKsTWVycmls

Snippit:

New York, Aug. 15 (Bloomberg) -- Credit ratings of Merrill Lynch & Co., Morgan Stanley and J.P. Morgan Chase & Co. may be cut by Standard & Poor's Corp.


Black Blade: The rumored concerns about liquidity problems don't help much either.

cyberbat
Help Anybody
I need someone's info. After watching the gold charts, it is plainly visible that the short boys are really active right at the opening whistle every morning on the comex. Their pattern seems to be to let gold take it's upward movement from Hong Kong right up thru the London opening and then smash it down on the Comex opening. That being their modus-operundi,

I want to trade long during that time and then short with them on the Comex all during the same day. I will sell the long's on a day trade during London hours and then go short with the hedge boys during their comex activity.
Can anyone tell me how I can conduct commodies trading in Hong Kong from the U.S.and still be able to close my trades in dollars U.S. there?
If I am going to have to contend with this mass of paper trading, then I shall keep my physicals, keep my gold shares, and piggy back the hedge boys with their shorting until it finally stops or they run out of money. I'm getting tired of the same old crap every day and if everyone else does it, then they may eventually cease operations or at least move to another time zone.
Any thoughts ?
Black Blade
Mirant May Have $1.1 Bln in Errors on Balance Sheet
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVrk.hPcTWlyYW50

Snippit:

Atlanta, Aug. 14 (Bloomberg) -- Mirant Corp., the biggest North American natural-gas trader, said an accounting review turned up mistakes that may have inflated its balance sheet by as much as $1.1 billion.

Black Blade: Here we go again.

Ray Patten
Cyberat....
http://www.mrci.com/qpnight.aspMost commodity brokerage companies have a night trading desk that will allow you to trade in the Comex ACCESS market. It trades for 4PM New York time to 6 AM. All Gold trades are in US$. No stop loss orders are allowed so it is very dangerous.

Click on the above link to watch the ACCESS market all night long. Good Luck.
Trapper
Sir Operative
Sept datesI have seen some here pan on you about your choice of methods by which you attempt to asertain movements in the price of gold etc. Pay them no mind, as anything that might have a reference to God, the Bible, or any sacred texts give them a problem. As for me I'm of the historical/spirtual persuasion in my eschatology and this would be of no value to me. Gold is a funny thing. Controlled by some worshiped by some, and rejected by many. Hang in there it WILL go up and big. The biggest problem is thinking in a straight line in a life that has a cycle. Live small.
RJ
Trurl
Have you ever tried to sell a diamond?
http://www.theatlantic.com/issues/82feb/8202diamond1.htmA very interesting and relevant link. This article is about diamonds, but it could be about stocks, bonds, or numismatic coins. There is nothing wrong with any of them, iff ( if and only if ) you know what you're doing.

The point is that they create a market and sell what they have to unload.

snippit:
DeBeers devised the "eternity ring," made up of as many as twenty-five tiny Soviet diamonds, which could be sold to an entirely new market of older married women. The advertising campaign was based on the theme of recaptured love. Again, sentiments were born out of necessity: older American women received a ring of miniature diamonds because of the needs of a South African corporation to accommodate the Soviet Union.

end snippit.

On the other hand, I have sold gold. So far the only reason I have sold is to buy real estate. But I do know it is a viable round-trip value storage.
cyberbat
@ Ray Patten
Thanks for the info Ray. If what your telling me about stop loss orders is right, then I would just have to watch it all night and close the trade myself. Right ?
Thanks much!!
Cyberbat
sector
Kurd chief shuns talks on deposing Saddam.....Absence of Barzani is blow to the U.S.
http://www.iht.com/articles/67849.htmlPatrick E. Tyler The New York Times
Friday, August 16, 2002


WASHINGTON The most powerful Kurdish chieftain in northern Iraq, Massoud Barzani, refused an invitation from the administration of President George W. Bush to attend the meeting of Iraqi opposition figures at the White House last week, Kurdish and administration officials said.

The absence of Barzani, whose father, Mustafa Barzani, led the largest Kurdish rebellion of the last century and died in exile in the United States, was a blow to Bush administration officials who had orchestrated the meeting in part to demonstrate that Iraqi opposition forces were unified behind a new campaign to depose Saddam Hussein.
+++++++++++++++++++++
Looks a bit dicey for the Northern Iraqi Invasion boys. The Kurds aren't all on the same page and without those guys... well... the US will have to round up a whole new army of donkey-riding mercenaries up there. Shouldn't be too tough though... a suitcase full of nude Brittany Spears photographs and a thousand assorted MTV Videos will do the trick. Might have to throw in a truckload of Winstons.

Nation building... wow... it's harder than one might think.

When any Administration changes the subject from a crashing economy to...fill in the blank...it is time for everyone to take defensive action with personal assets. Start with gold.

Name another asset [Besides silver] that, because it is manipulated, has a near zero downside potential. That is the definition of a good investment.
DOWNUNDER
@MIKAL Re PRECIOUS METAL STORAGE (post 83073)
Thank you for your reply and thoughts re Bank Safe Deposit
Boxes.From what you have said it is obvious that various Banks operate differently: ie --some bring the box to a private room & others let the client carry it. I would certainly favour the latter!

I guess the btm line is that I don't trust Banks period.I rang 3 Banks here in Australia & not one would store Gold & acknowledge its safekeeping ---nor do they sell gold.As Gold
is the ultimate "reserve" currency I deduct that banks must see gold as a threat & that indeed they are the enemy.Nor will they allow "gold holdings" to be used as collateral!

Why then give them the uninsured real metal to guard? In a real crunch locked doors may stand between the owner & his stash-- It is a big problem but goldbugs are used to adversity & I'm sure alternative plans are in place--such as your own. Keeping ones mouth shut is by far the most important security device --cause no one will come looking if lips haven't been flapping! Cheers
Ray Patten
Cyberat....
I forgot to tell you that any overnight trade can be off-set on the Comex. So you can sell at 6 AM and cover at 7:30 or 8 AM and make nothing but money every day. Again, good luck.
sector
Companies not in date filing compliance with the SEC demand for re-certification of financial reports.
http://www.sec.gov/rules/extra/ceocfo.htmI have taken some time to extract this listing of non-compliers for your review:

Coca-Cola Enterprises Inc. [Not to be confused with Coca-cola, Co.]
Comdisco Inc.
Consolidated Freightways Corp.
DST Systems, Inc.
Exide Technologies
Foamex International Inc.
Gentek Inc.
Hercules Inc.
Hub Group Inc.
IT Group Inc.
Jones Apparel Group Inc.
Mariner Health Care Inc.
Qwest Communications Intl Inc.
U.S. Industries Inc.
US Airways Group Inc.
Weatherford International Inc.
Zions Bancorporation
++++++++++++++++++++
This list was compiled by sorting the sec website list first by due date [August 14, 2002], then by actual filing date. The above corporations had no filing date thus they have not filed.

There are many other corporations that are due to file later in the year.
darkhorse
@sector
Your quote:

"The Kurds aren't all on the same page and without those guys... well... the US will have to round up a whole new army of donkey-riding mercenaries up there. Shouldn't be too tough though... a suitcase full of nude Brittany Spears photographs and a thousand assorted MTV Videos will do the trick. Might have to throw in a truckload of Winstons."

Attitudes like this are why the US doesn't have any more friends around the world than we do. Let me state for the record I have no connection/allegiance/like or dislike towards whom you speak. I'm willing to bet you don't know a single thing about these people that was learned from personal experience, but you're so quick at degrading their intelligence and capabilities. What an arrogant lot we can be! Our own intelligence should come under scrutiny when we have to ask why so many people carry the attitudes they do against us. I love my country, there's no better place I'd rather be, but I'm not blind to our faults, either.
Horatio
fees
Many brokerages have instituted maintenance fees this year where they didn't have any before,like $50.00 per year and IN- activity fees $50.00 per year,custodial fees $50.00(IRA) and transfer fees of $100.00.
There are still some that don't have any fees... be aware of the fine print....
Don't let them steal your money.
Horatio
Options
I heard of a study today that said 30 % of the S&P corporations would not show a profit if they had to expense options.A Senator quipped "why would anybody buy a stock where management took ALL of the profits".An interesting point....
By the way Cisco even paid thier Rents and Leases of buildings with options.Can you imagine? no expense for Real Estate Leases!!Its a Virtual Company !!It only exists if you believe it exists ,as soon as it enters the real world where there are expenses it disappears!!!!
Belgian
@ Operative
Your guess is that the USof A will remain (or become) the oil-CSAR !? That means automatically that the US$ as a reserve currency, will not be challenged by oil or another currency ? Right ? Therefore, 250 million people (americans) will keep on dictating 6 BILLION people on this globe what is the dollar's exact valuation to them at any time ? The dollar Reich (emperium) with oil ? Sounds good but will it, shall it ? Especially that there is an alternative, NOW ! Thanks for replying.
Blackjack
NASDAQ Japan goes BUST
New York, Aug. 16 (Bloomberg) -- Nasdaq Stock Market Inc. is ending its Nasdaq Japan joint venture because it has been losing money for two years and the U.S. exchange doesn't expect it to stop in the next few years.

The 98 companies listed on Nasdaq Japan will switch to the Osaka Securities Exchange, which provides the venture with floor space and technology, said John Hilley, chief executive of Nasdaq International, in an interview. The alliance will end on Oct. 15, and Nasdaq will withdraw the use of its name by the end of the year, the Osaka Exchange said in a release.

The decision to end the three-year-old partnership with Softbank Corp. comes after the second-largest U.S. stock market wrote off its $20 million investment last month. A bear market has killed investor appetite for young companies going public. Between June 2000 and December 2001, Nasdaq Japan attracted 82 new companies. Since then, it has only attracted 16 more.

``When we made the decision to start Nasdaq Japan in the midst of the biggest bull market the U.S. has ever known. We walked into a three-year correction just as we got started,'' said Hilley. ``The end is not in sight.''

Nasdaq Japan's board met at 10 p.m. yesterday New York time to vote on the decision, said Hilley. Nasdaq and Softbank, Japan's largest investor in Internet companies, each own 43 percent of Nasdaq Japan, with the remaining 14 percent owned by 13 U.S. and Japanese brokerage firms, including Nomura Holdings Inc. and Goldman Sachs Group Inc.
Spartacus
Bush vows "whatever it takes" to boost US economy
http://www.ananova.com/business/story/sm_650524.html?menu=business.economy
MILWAUKEE, WI (AFX) - President George Bush vowed to do "whatever it takes" to help the limping US economy -


Spartacus
The Middle East
http://www.guardian.co.uk/Iraq/Story/0,2763,775532,00.html
- One of the Republican party's most respected foreign policy gurus yesterday appealed for President Bush to halt his plans to invade Iraq -
Operative
@ Belgian
The U.S. just invaded and overthrew a hostile "government" known as the Taliban. We have thousands of young men dressed in battle fatigues now building fortified bases at strategic locations. In spite of the dog & pony show out of Washington, I really cant believe we are there to make sure the Afghan women have a right to obtain a drivers license or that democracy be inparted to that region of the world. I do think that oil/gas and a pipeline or two has significant value. My guess holds the same for Iraq/Saddam. If this is really what is happening behind the scenes and will it work?
I would think that China would be very concerned about the U.S. controlling such a large map of oil fields.

As to what would happen to the dollar if America somehow ended up controlling say, 70% of the worlds energy supply, I defer to your expertise on that subject. There have been so many of the darn things printed in the last decade that I am surprised they are of any use at all. Which is why gold is looking so attractive to me and a few others.

In simplistic terms, 5 billion people will wake up today and look outside thier bedroom window. Figuratively of course. They will see a large group of warships equipped with nuclear weapons and flying the stars and stripes. Dont let me mislead you ...but until they can obtain similar positions of strength, then yes, they will to some degree be subject to at least a few whims of the mighty. There is that 1 billion in China that may soon have the where with all to begin to impose thier whims as well. Such is the struggle for power for most of recorded history.

Spartacus
Dollar may not benefit from war against Iraq - Morgan Stanley
http://www.afxpress.com/afxpress2/afx/bn228557.xml.html
LONDON (AFX) - A war against Iraq may not help the dollar as much as it did during the 1990-91 Gulf Crisis, according to research published this morning by Morgan Stanley.

Blackjack
Saudi's buying Gold
JEDDAH, August 16 (PNS): Saudi Arabia has reported a rise in gold demand, which exceeded 228 tons in 2001, making the Kingdom a top world market in terms of consumption, according to a report released by the World Gold Council (WGC).

This represents three percent annual growth in demand in Saudi Arabia whereas demand for the yellow metal increased by seven percent in the UAE. "In Saudi Arabia, the final quarter demand rose strongly to 58.8 tons, which is 16 percent higher than a year earlier," said the WGC report, adding that the demand, however, followed an erratic pattern in the first three quarters of the year. There was also a swing to investment in gold in the Kingdom as in the rest of the Gulf region, said the report.

Referring to the growth of local gold market, the report said the market has shown upward trends in terms of consumption. A substantial number of nearly seven million foreigners working in Saudi Arabia have been traditional buyers of gold. Also, a survey conducted by the Riyadh-based Saudi Gold Factory reveals that on average a Saudi lady possesses one kilogram of gold, which can be considered one of the main indicators of the booming gold business in the Kingdom.

There are more than 40 modern jewellery factories and workshops operating in the Kingdom besides 32,000 jewellery shops. This is in addition to thousands of cosmetics and fashion outlets, which sell gold jewelleries. The Saudi gold market has been expanding with a steady growth in population.
Black Blade
Pro-Forma Earnings Reporting Persists
http://biz.yahoo.com/ap/020816/corporate_earnings_pro_forma_1.html
Snippit:

NEW YORK (AP) -- While many on Wall Street are calling for an end to pro forma financial reporting given widespread jitters over corporate clarity, it's clear from second-quarter reports that the accounting practice is a hard habit to break. An ever-increasing number of companies in recent years has taken to also reporting earnings on a pro forma -- or "as if" -- basis under which they exclude various costs. Companies defend the practice, saying the inclusion of one-time events don't accurately reflect true performance. There is no universal agreement on which expenses should be omitted from pro forma results, but pro forma figures typically boost results.

"It's disappointing that at this stage we haven't seen more companies make the switch to GAAP earnings from pro forma," said Chuck Hill, director of research at Thomson First Call. While few companies have switched to GAAP from pro forma, there are many companies that have been reporting under GAAP all along. For the reporting season thus far, 471 companies, or 94 percent of the S&P 500, have reported, with 214 companies reporting GAAP earnings, 37 companies reporting on a pro forma basis and 220 corporations reporting operating earnings.

Now, the difference between operating earnings and pro forma earnings is where it can get a little sticky. Operating profit (or loss) is the difference between revenue and expenses associated with the normal, ongoing operations of a business. It excludes one-time extraordinary items such as an acquisition of another company or a write-off of a division. The practice of pro forma, however, can exclude items such as restructuring charges which are supposed to be non-recurring, but often do recur quarter after quarter and thus should be included as part of a company's normal expenses. The SEC warned that pro forma statements can be misleading, particularly if they change a loss to a profit or hide a significant expense that could put a more positive spin on a company's earnings.


Black Blade: Unfortunately the cockroaches will continue to use these deceptive accounting practices as long as it is legal to do so. The investor has to go through financial statements with a microscope to find all the warts and even then they may not be made apparent. Lousy companies with questionable earnings are still misleading investors and the financial media trolls on CNBC, CNNfn, and Bloomberg do a disservice by not pointing this out. Other problems arise as many companies such as Cisco refuse to expense options and account for synthetic leasing (among other crooked strategies) which would result in losses or sharply lowered earnings. Many others and I have hammered on these issues in the past. Still these practices should be illegal. It is disgusting how these corporations deceive the investing public.

Belgian
@ Operative
We seem to agree on the "increasing" struggle for power, with the US$ and oil, still, at the epicentre. If we can agree on, Gold, becoming a very probable arbiter into all this ....
Then all our different visions will ultimately confluent into that big, main, Gold stream. Unfortunately, so many innocent people will, eventually, have to suffer for nothing less but a lower POO and a US$-reserve currency, continuing to dominate, global trade flows and (im)balances.
But terror-atrocities, evidenced, that an overwhelming military might, has limits. And so far, there isn't 1 inche of pipeline on Afghani (eurasian) soil. In the eighties, Europ, had its waves of terror and stopped it without counterforce. Ireland/Baskenland will ultimately halt their violence and settle in compromise. Euroland (and UK) never considered the option of wiping out, those directly or indirectly responsible for the (appaling) violence.
It is the completely different approach on terror between Euroland and the US, that has something to do with Gold.
Than I refer again to the euro/gold/oil-concept, solliciting those who might be interested in joining it.
Will see how it works out ?
steady
no confidence
Tokyo Governor: May Move Funds To Foreign Bks
08/16/2002

TOKYO (Dow Jones)--Sending a strong message to Japanese banks to clean up their act, Tokyo Governor Shintaro Ishihara warned Friday he was considering shifting some of the city's Y1.7 trillion in deposits into foreign banks.

"Whether it's a foreign bank or a Japanese bank, if it's reliable, safe and the interest rates are high, anyone would deposit their savings there," Ishihara told Dow Jones Newswires in an interview.

Asked if he was considering moving some of Tokyo's deposits into foreign banks, Ishihara said, "I am thinking about it."

The remarks show that Ishihara, a long-time critic of Japanese banks, is willing to put the city's money where his mouth is. The threat to pull some of Tokyo's money out of suspect banks and deposit the funds in sounder foreign banks will likely spook many Japanese bankers.

The warning marks another round in his ongoing fight with Japanese banks, which he claims are inefficient, weak and lack of sense of urgency in cleaning up their books. The governor started attacking banks more than two years ago when he declared Tokyo would tax banks based on their assets, rather than net income - a move which would force money-losing banks to pay taxes.

Ishihara's remarks highlight widespread concerns about the health of Japan's financial system, which faced a severe crisis in 1998 and remains weak. Banks were saddled with loads of bad loans when Japan's asset price bubble burst more than a decade ago. Years of dithering by bankers and slack regulatory supervision, compounded by economic stagnation, have left banks sicker than ever.

Fed up with foot-dragging by bankers and the central government, Ishihara has thrown down the gauntlet by proclaiming that the metropolis will safeguard its assets on its own. He claims the central government is in cahoots with the banks and needs a wake-up call to tackle the financial-sector problems once and for all.

"Scheming together with bureaucrats, they try to hide anything negative," the outspoken governor said.

Speaking at a press conference later, Ishihara said Tokyo will also consider regional banks to take its deposits. The metropolitan government will take into account the quality of banks' capital and the extent of the banks' bad loans in its decisions, he said.

Making a thorough and stringent assessment is all the more important ahead of April 1, when the central government ends blanket guarantees on demand deposits, he added.


(MORE) DOW JONES NEWS 08-16-02

06:08 AM

=DJ INTERVIEW: Tokyo Governor-2:Mizuho Deposits Went To JGBs



Due to concerns over bank safety, depositors are pulling their money out of smaller regional banks, and shifting funds to demand deposits from term deposits. The government capped deposit insurance on term deposits at Y10 million per account last April.

Tokyo's worries were also exacerbated by the settlement systems and ATM fiascos at megabank Mizuho Holdings Inc. (J.MZO or 8305) in April, Ishihara said. Tokyo is the largest depositor at Mizuho.

Ishihara said Tokyo will consider pulling its money out of Mizuho or punishing the bank in some way if it isn't satisfied with reports the financial institution is to give to the metropolitan government in October and March on efforts to fix the computer problems.

Tokyo has already shifted some funds from Mizuho Bank to Japanese government bonds, Ishihara said.

The metropolitan government had to threaten to stop doing business with Mizuho before the institution allowed Tokyo to check on the banks' operations, the governor said.

"Even now, they haven't taken true steps to improve things because it would cost quite a bit of money. They basically want to get by each situation when something comes up," he said. "It was all messed up."

Ishihara said Tokyo found things the Financial Services Agency didn't know, such as the amount of Mizuho's deposits, whether they had fallen or increased in the wake of its systems problems, and what those were. Ishihara declined to elaborate further.

"I don't intend to trigger a financial crisis centered on Tokyo," he said.

After inspecting Mizuho, the FSA punished the bank in June by ordering it to improve its operations - basically a slap on the wrist.

Ishihara said he told Financial Services Minister Hakuo Yanagisawa to get his act together.

The far-right Ishihara regularly ranks high on the list of potential candidates that voters would like to see as prime minister partly because of his blunt style.

While Ishihara's idea to tax banks more severely two and half years ago proved to be popular with voters fed up with fatcat bankers, the Tokyo District Court ruled against the Tokyo government in March.

The levy squeezed Y72.4 billion from 18 banks last fiscal year. But the court said Tokyo unfairly singled out the banks and ordered the city to return the money, along with a Y1.83 billion penalty. The same month, Ishihara's administration filed an appeal to the Tokyo appellate court.

Ishihara said it would take a long time for a final decision, adding that he expected the case to go to the Supreme Court.

Two years ago, he told Dow Jones Newswires he didn't even expect the banks to file a suit, saying that public opinion was against them. "It would be like spitting on themselves," he said then.

The current prefectural corporate tax is based on net income alone so companies in the red aren't taxed. But Ishihara said this was unfair because banks benefit from public services.

Major urban areas like Tokyo and Osaka have seen corporate tax revenues plunge from their peak at the end of the asset-inflation bubble. That has forced the local governments to scramble to cut costs and try to find new sources of revenue.


Topaz
Yield curve approaches vertical, Gold....lower?
http://www.futuresource.com/charts/multicharts.asp?symbols=TNXY%2CTYXY%2CFVXY%2Cgcu02.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=6What a predicament....Financial Market Gridlock dead ahead and Gold $300ish.
It's going to be hard to convince the average Joe our Sovs, Maples etc are worth the fabled $30K from here!
In such a circumstance the Ace in the Hole may well be what A/FoA alluded to - Oil will be priced at any 'ol fiat number "PLUS" a smidgen of Bullion.
The "havent's" don't want what the "have's" have any more.
Boilermaker
Economic Pep Rallies and Sabre Rattling
The Bush admin. is showing two major themes, economic pep rallies and Iraqi war threats. I, like Operative and others at the forum, believe that there is a connection. Clearly by now Bush has gotten the message that the economy has no clothes. He and his minions are staging a circus to keep the silent/stupid majority convinced that happy times are just over the horizon. Behind the curtain he's got a cast of agents putting lipstick and pink tutus on various overweight financial pigs. The financial media remains in complicity probably out of a sense of self preservation.

The greatest weaknesses of the US are its fragile economy and need for foreign oil. This leads to an obvious solution, Overthrow the evil powers that threaten the US and snap up a pair of major oil credit cards at the same time.

The case for war against Saddam is being built domestically and offshore with allies even as the WAT continues. Saudi Arabia is gradually being demonized (it appears with good reason). The US has not built a wholly convincing case even though we can be nearly certain that Saddam and the next Saudi regime have evil intentions. Saddam is trying to keep a low profile and get along with his neighbors. Bush would like to have a smoking gun such as a terrorist act with Iraqi fingerprints on it. But whatever, the war will likely start whenever the financial markets spell meltdown.

Topaz
Eyeball to Eyeball - Cash and Gold.
Under a meltdown scenario, Greshams Law comes into play - GOLD and cash.
Gold - 6000yr history, no baggage, recent (15yr) performance visa-vis cash, pathetic.
Cash - ummm...mass of humanity (2 generations) experience with Fiat gives it the edge (initially)...Japanese MoH "only" moved to GOLD when threatened with LOSS of Fiat.

IMHO it won't be Gold, Silver, Oil or whatever causing the forthcoming crisis.....it'll be those old favourites, Greed/Fear.

We "Bugs" could do well to heed BB's advice and hold some "CASH".....to scoop up WELL priced Au in a monetary meltdown.
Boilermaker
Pig in tutu graphic
Waverider
Iraq: In all but name, the war's on
http://www.atimes.com/atimes/Middle_East/DH17Ak03.htmlSnippit:
"How do you tell a war has begun? This is not the 17th or 18th century. There are no highfalutin' declarations. Troops don't line up in eyesight of each other. There are no drum rolls and bugle calls, no calls of "Chaaa...rge!". When did the Vietnam War begin? When, for that matter, World War I? When mobilizations were ordered setting in motion irreversible chains of events or at the time of the formal declarations of war?

The lines of battle and the timelines to overt battle and full-scale combat have become fluid. Consider this: At the beginning of this year, when US President George W Bush started talking ever more in earnest about taking out Saddam Hussein and signed an intelligence order directing the CIA to undertake a comprehensive, covert program to topple the Iraqi president, including authority to use lethal force to capture him, the US and putative ally Britain had approximately 50,000 troops deployed in the region around Iraq. By now, this number has grown to over 100,000, not counting soldiers of and on naval units in the vicinity. It's been a build-up without much fanfare, accelerating since March and accelerating further since June.They are gradually closing in and rattling Saddam's cage. In effect, the war has begun.

Waverider: Interesting perspective from the Asia Times that in fact, the war with Iraq is already on.
BillinOregon
Roger Bently Arnold's Comments
In southern Oregon the fires are still going, lots of smoke in our little valley hopefully, the fires will die down and the smoke will clear up in the next few days.

Now Rogers General Comments

from the Federal Reserve Bank of Philadelphia

Business Outlook Survey August 2002
Roger's comments:

The bottom line on this report is that manufacturing in the Philadelphia Fed district is one again waning. This is not consistent with secular optimism in the economy and is an indication that the tremendous increase in equity values over the past month has been driven by speculators and traders rather than by investors and is a cyclical as well as technical event. In other words be careful. Although not overtly stated here these numbers were well below expectations and moved in negative territory rather than positive. A positive response was expected.

For the first time this year, manufacturing firms� responses from the Business Outlook Survey indicate a slight decrease in activity. Indicators of general activity, new orders, and shipments recorded negative readings for the first time since December 2001. Overall employment among firms is lower again this month, and the declines were larger than in recent months. Expectations for growth also diminished in August, although manufacturing executives continue to be optimistic about conditions for the next six months.

Current Indicators Turn Negative This Month

After reaching a four-year high in June, the diffusion index of current general activity decreased to 6.6 in July and to -3.1 this month, its first negative reading this year.

Other indicators also turned negative this month.

The new orders index declined from 6.6 in July to -2.7 in August, and the shipments index fell from 4.6 to -3.3.

Backlogs of unfilled orders dropped notably: the current unfilled orders index fell from -6.2 in July to -19.6.

The delivery times index remained negative, although it edged higher from -13.3 to -5.1.

The current inventories index increased from -14.1 to 8.1-its first positive reading in 22 months.

The demand for labor continues to be weak, and consistent with the weakness in activity, employment losses increased this month. The current employment index decreased from -6.8 to-13.4, its lowest reading since February.

The average workweek index also fell, from -6.9 to -8.3.

Summary

Responses from the Business Outlook Survey over the last two months suggest some slowing of activity in the region's manufacturing sector. For the first time in eight months, the percentage of firms reporting declines in activity was greater than the percentage reporting increases. Most of the survey's broad indicators fell this month. Nevertheless, firms remain optimistic about growth in manufacturing activity over the next six months, even though expectations dampened in August. Only a small percentage of firms expect further declines in business.

http://www.phil.frb.org/files/bos/bos0802.html

Spreads

Spreads feel yesterday. Be careful though, one day does not a trend make.

Recent comments from Tony Crescenzi at www.bondtalk.com

Speculative-grade credit spreads rose to a new high for the year on Friday. At 1385.3 basis points over Treasuries, the S&P speculative-grade credit index reached its highest level since record-keeping began in January 1999, eclipsing the previous high of 1378.2 set the previous day and the 2001 high of 1,269.8 basis points. The current level is much higher than the 2002 low of 850.3 basis points.
http://www.bondtalk.com/global.cfm?S=marcom&SS=intraday_market_talk_5_days&daysago=1#16624

The poor performance of the corporate bond market highlights one of the most important arguments in favor of a Fed rate cut. Since early July, the credit market has become partly dysfunctional. Credit spreads (the yield spread between corporate bonds, agency bonds, mortgage securities and the like compared to U.S. Treasuries) have widened dramatically and new issuance has slowed to a crawl. In short, very little money is being generated in the credit markets these days. As one of the few spigots still open, the bond market's recent problems are alarming. In many ways, it is likely that the Fed is more concerned about developments in the bond market than they are about the stock market's recent slide.

http://www.bondtalk.com/global.cfm?S=marcom&SS=intraday_market_talk_5_days&daysago=2


Date Index Value* (Credit Spread Level/Divisor) Credit Spread Level(bps) Divisor Duration (years)
08/15 1370.9 896.1 0.65365 4.0
08/14 1385.3 922.6 0.66599 4.0
08/13 1378.2 920.2 0.66771 4.0
08/12 1358.6 907.1 0.66771 4.0
08/09 1343.6 923.6 0.68742 4.0

http://www.spglobal.com/indexmaincredit.html

Spreads continued

Market Risk--Dismal Times For Junk Bonds
Roger's comments:

This articles addresses the concerns over junk bond spreads we have been discussing recently. As spreads are at all time highs there is speculation that they are indicating a bottoming process for the equity markets UNLESS they continue to increase. And that is the real concern. There is no room for them to increase. In order for the equity markets to continue to increase and for economic activity to expand capital borrowing must increase which means spreads must fall. Some very bold managers are speculating that this will occur naturally and advising clients to consider buying junk. Be careful. If they are right huge rewards will be awarded the bold investors that buy now. If they are wrong the bond investors will get cashed out following bankruptcy by the underlying firm. From a speculative play on bankruptcy however there are some fantastic opportunities here. You should speak with a Junk bond specialist that understands this before investing.

Junks bonds are facing dismal times. Investors are fueling the carnage by marching out of the sector, adding to pressure on portfolio managers to sell.
"History will tell us the market is oversold," said Arthur Calavritinos, who runs the $750 million John Hancock High-Yield Bond Fund in Boston . "Redemptions take place at market bottoms, and inflows come in at market tops. It's human nature."
A gut-wrenching stock plunge, fear of economic recession, the fall from grace of such energy traders as Dynegy Inc. and Williams Cos. and the bankruptcies of phone company WorldCom Inc., cable TV operator Adelphia Communications Corp. and others still sour investors on junk, or high-yield, bonds, rated "Ba1" or lower by Moody's Investors Service and "BB-plus" or lower by Standard & Poor's.

US junk bonds have in 2002 tumbled 8.38 percent, on pace for a 14 percent full-year decline, Merrill Lynch & Co. said. Their worst prior year was 2000, when they lost 5.12 percent, it said. Not even in 1998, when Russia defaulted on its debt, or 1990, when Iraq invaded Kuwait , have the bonds fared so badly. They now yield 13.27 percent, a fat 9.4 percentage points more than US Treasuries.

http://www.garp.com//newsfeed.asp?Category=6&MyFile=2002-08-16-5300.html
Aristotle
Thanks, Belgian. Lending support
When the central bank of a nation opts to hold among its reserves assets that are denominated in a foreign currency, that nation is tacitly lending its support to the political regime of the foreign governments whose bonds and currencies it holds beyond any immediate need for int'l trading purposes with those nations. U.S. citizens might often overlook this, thinking naively that the whole world sees Uncle Sam as among the cowboys wearing a white hat, and that the dollar's fate might therefore rest solely on economic factors.

With a multi-national euro and with mark-to-market Gold as alternatives, the U.S. economy wouldn't actually have to be at risk of falling out of bed for the dollar to suffer under movements of repatriation. That could come about if the international community at large were themselves to be awakened and annoyed by our political snorings.

Even in the euro zone where the central banking structure has adopted the fine practice of marking Gold reserves to market values (in contrast to the ficticious U.S. model,) it should remain somewhat intuitive that a person should not expect his central bank to hold Gold significantly beyond reasonable anticipations of forex interventions. After all, the central banks are ultimately more concerned with preserving their currencies' purchasing power than in fabulous institutional enrichment by a bull market in Gold. The demand for a currency (and with it, its purchasing power) comes from a healthy base of ever-expanding currency-denominated borrowings which must be repaid over term.

The need for and delicacy of this balancing act (management of monetary policy to expand yet not to excess) is often underappreciated (particularly by Goldbugs and monetarists) while their celebration of the "automatic adjustment mechanism" of the pre-WWI Gold-Standard system distinctly fails to recognize the historic context and modern democratic limitations to its viability as an ongoing enterprise.

One man, one vote.

For every multi-millionaire, there are more than one welfare cases, and others waiting ready and willing to knock on charity's door. Perhaps it shall ever be the curse of democracies that the industrious will always have the invisible hand of inflation reaching like a modern-day Robin Hood into his wallet.

The general concensus of experience is that an "independent" central bank will not be so notoriously inflationary as any government would be with a similar powers to emit the national money supply. Yet even with the degree of indepence that we see vested in the many central banks of the world, it would be foolish for private parties, individuals and companies, to imagine that the cuffs are thereby so easily put on this powerful creature of democracy -- Robin Hood with his invisible hand. You've surely felt its groping fingers: Economic stimulus package, Too-big-too-fail, Bail-out, Budget deficit. INFLATION.

For as long as we peoples of the world employ both money AND representative governments, we will have need for private Gold ownership to protect our savings from ourselves (our voting neighbors) and the invisible hand. With turns on the printing press, it can reach and carry off purchasing power of accounts and currencies however carefully hidden, but it can't carry away the ultimate value of your physical Gold -- interim attempts at inflation of paper Gold notwithstanding.

It would be nice to see a dismantling of paper Gold as the flip-side of the same coin that paid the Gold Standard's grave digger.

Real Gold. For real life. Get you some. --- Aristotle
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sector
Tyco, Others Face $60 Bln in Payments on Convertibles (Update1)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVzIgxVPVHljbywgTop Financial News
08/16 05:40

By John Glover

London, Aug. 16 (Bloomberg) -- Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year.

That's the amount of convertible bonds they may be forced to redeem because tumbling share prices eliminated investors' incentive to exchange the debt for stock. Tyco investors can force the company to pay them $2.3 billion in February because its bonds can only be converted into stock at or above $115.05. The shares closed yesterday at $13.26.

``For any company in this situation the fact that markets are going down is not good news,'' said Pierre Sellier, treasurer of Lagardere SCA, France's second-largest media company, which may have to repay 768 million euros ($748 million) of convertible bonds in December 2003.
+++++++++++++++++++++++++++++++++++++++
My, my, my! ANOTHER $60Billion. I wonder who will eventually eat these convertable bond payments? Could their bankers be left holding the bags?

Can you say ANOTHER S&P downgrade of the already strapped banks? Jeeze! JPM and C face $36 Billion in Enron litigation awards. Who knows how high the claims could grow?
da2g
Oil for Dollars, Iraq, and Saudi Arabia
I find the current U.S. posturing towards Iraq to be interesting in light of the rumblings of a change in Saudi leadership, and an implied subsequent change in Saudi and U.S. relations. I wonder how much of the Iraqi initiative is catalyzed by the need to keep the flow of Saudi oil denominated in dollars? Wouldn't it be quite convenient for the U.S. to be in control of Iraqi oil fields, with a large military force in the region, should the current House of Saud crumble, or at least have its allegiances change?

I do recall FOA touching on the privilege of supplying defense to Saudi Arabia, in exchange for having one's currency as the denomination of oil exchange. If I recall correctly, he more or less implied that the EU would certainly not mind supplying Saudi Arabia with defense expertise should oil be traded in Euros. I do not recall, however, the line of reasoning to encompass defending Saudi Arabia against the threat from the nation whose currency oil is currently traded in, namely, the U.S.. I would be most curious to receive any insight in this matter (FOA- hint, hint!).

Oh, what a glorious chess game that must be going on behind the scenes! To only be privy to each move in person. I don't think that the dollar is going down without a whimper.
sector
CitiGroup's Grubman Gets $32 Million Severance
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVyztBZrQ2l0aWdy
Top Financial News

08/16 04:11
Citigroup Faces Probes Following Grubman's Departure (Update1)
By Rob Urban
New York, Aug. 16 (Bloomberg) -- Jack Grubman, the star telecommunications analyst at Citigroup Inc., resigned under pressure amid allegations he misled investors by issuing favorable stock ratings to win investment banking work. The legal challenges against his former employer his actions instigated remain.

Citigroup faces criminal probes, a congressional subpoena, regulatory investigations and more than two dozen lawsuits over allegations that Grubman violated rules by functioning as an investment banker while he was employed as an analyst at the firm's Salomon Smith Barney unit.

Grubman's resignation ``isn't going to change any liability that Salomon may have,'' said John Coffee, a securities law professor at Columbia University. ``No organization can avoid liability for conduct of their agents when they were in office by later seeing them resign.''

Investors allege Grubman published flattering research on companies such as WorldCom Inc. to win business for Salomon Smith Barney arranging stock sales and advising on mergers. Lawmakers also want to determine if he sought to curry favor with executives by allocating them shares in initial public offerings.

Citigroup, the largest financial services firm, said Thursday Grubman resigned by mutual agreement. He was given a $32.2 million severance package, including forgiveness of a $19 million loan he received in 1998, plus interest, and $12 million in restricted stock and options he received as previous compensation, people familiar with the matter said.
+++++++++++++++++++++++++++++++++++++
Grubman gets a $32 Million dollar severance. That says a great deal about the sweet relationship between Grubman and the senior management at CitiGroup [Robert Rubin].

Maybe Grubman knows something that must be kept hidden so he gets bought off?
Sierra Madre
A few facts on Cisco (CSCO)
I gleaned a few facts about CISCO from http://money.cnn.com and from the www.ino.com site.
It's selling at 57 times earnings.
Earnings are 25 cents per share.
Outstanding shares are 7.3 billion approx.
Its price when I checked a couple of days ago: $14.48 US
Highest price reached, in the Spring of 2000: $80.00 US
The market cap at that time (supposing the same 7.3 billion shares, which might not be the case): $584 billion
Present market cap: $106 billion.
Notwithstanding the loss in market cap of $478 billion (!) it STILL sells for 57 times earnings.
In "normal" times, a price of 15 times earnings has prevailed, which would give a "normal" price of $3.75 US (15 x .25cts).
An attractive "buy" price would be at a P/E of 8, which would give: $2.00

That is, supposing earnings of .25 cents per share hold up. Rather doubtful. A 50% fall in earnings would mean a "normal" price of $1.90, and a "buy" price of...$1.00

If cost of stock options is taken into account, which is not the case presently, I understand, there might be NO earnings. So perhaps even $1.00 is expensive.

So much for CISCO. Say a prayer for the chumps holding CISCO. (And buy GOLD!)

Sierra
Old Yeller
dag2g,oil for euros

All I can say is,I sure miss the postings of FOA and Oro
on this matter of critical importance.

In the meantime,I just read the archives.There is a wealth of prescient information in there that is so relevant today,
given the moves on the big chessboard we're seeing.
Black Blade
Wall Street bank ratings may be cut
http://www.chron.com/cs/CDA/story.hts/business/1536596
Snippit:

NEW YORK -- Standard & Poor's said Thursday it may cut credit ratings of several Wall Street banking giants, including J.P. Morgan Chase & Co., Merrill Lynch & Co. and Morgan Stanley, because their investment banking revenue is falling.

Black Blade: Interesting

Black Blade
Credit Suisse execs fined over IPO abuses
http://www.usatoday.com/money/industries/brokerage/2002-08-15-credit-suisse-execs-fined_x.htm
Snippit:

NEW YORK � Securities regulators fined and suspended two senior executives at Credit Suisse First Boston for offering shares in hot Internet companies to large investors in exchange for millions of dollars of kickbacks in the form of excessive commissions. The National Association of Securities Dealers (NASD) also fined and suspended four former CSFB brokers for their part in the trading abuses.


Black Blade: It reminds me of that Schwab commercial: "let's put some lipstick on this pig".

Off to the gym!!!
JCTex
Old Yeller (08/16/02; 13:04:41MT - usagold.com msg#: 83124)
Me, too.
sector
Tokyo to put over 100 bil. yen in Citibank
It's Only about a $USD Billion but still...Yomiuri Shimbun August 15, 2002

The Tokyo metropolitan government has decided to deposit more than 100 billion yen in public funds in Citibank, a U.S. bank, this fiscal year, to diversify risks, government sources said Saturday.

The metropolitan government, which currently deposits public funds only in major domestic banks, will be the first local government to keep its public funds in a foreign bank, the sources said.

It also plans to deposit for the first time several billion yen in Jonan Shinkin Bank, a major credit association, the sources said.

To diversify risks, 50 percent of the public funds--mostly kept in deposits until now--will be invested in bonds and debentures, the sources said.

If Citibank and Jonan Shinkin Bank are deemed safer institutions, the government will deposit public funds in institutions that it has not dealt with before, including foreign and shinkin banks, as they will be seen as a highly safe way to diversify risks, the sources said.

After the lifting in April of the freeze on the so-called payoff system in which account holders are guaranteed a maximum refund of 10 million yen in deposits initially accepted by a bank and interest on the principal if the bank fails, local governments' time deposits are also guaranteed a refund of only up to 10 million yen and interest.

The metropolitan government transferred most of about 1.28 trillion yen in time deposits in the 15 major banks to ordinary accounts. Ordinary accounts will also be subject to the payoff system in the next fiscal year.
+++++++++++++++++++++++++++++++++++++
One reason for a dollar that seems to be levitated these days. With more yen on deposit, lots of FOREX games can be played by the Master Rigger Rubin.
Operative
@ Belgian
I have long agreed with not only your theories on $/oil/Gold but also with the writings of Another, Foa, and host of others. I agree in that, to the best of my ability to wrap my mind around this complex international exchange system, there are some here who appear to have a firm grasp on where it is headed and some of the implications thereof.

My original post concerning my own observation of current events now transpiring in the Middle East was not meant to be argumentative, nor was I questioning your theories. If inadvertently the Bush campaign forging into the heart of the oil fields has created a new fluid and dynamic change in your flow charts that is something only you can address since those issues are far beyond this hobbitt. Friends?
I hope so, I admire most of your writings even though oft I have to step on the stool in order to reach new levels of understanding.

Now, I am going to take you to task on part of your last post because of some dear friends of mine. You write:
"Euroland (and UK) never considered the option of wiping out, those directly or indirectly responsible for the (appaling) violence. It is the completely different approach on terror between Euroland and the US, that has something to do with Gold."

I happened to be in that neck of the woods (UK) and the middle east during much of the 1980's. I had the distinct privilege to work with some of the best counter-terrorism guys in the business. I can tell you first hand they would NOT agree with your statement, "never considered the option..." and indeed where activating some rather forcefull options of thier own. I am speaking of some remarkable men who only drank large copious amounts of heavy dark ale that members of the S.A.S forces hold so dear. They also sadly bemoan, being the highly motivated group that such training inspires, your other statement: "It is a completely different approach on terror between Euroland and the US, that has something to do with Gold."

The shortened version of thier story goes a little like this. Terrorism was alive and well in Europe with some of the more radical movements taking upon themselves to "terrorize". The problem for Europe was a bit more complex than what we have so far experienced in the US. In that, for decades the terrorists had lived and operated among a rather large muslim population that Europe had so openly extended thier arms to. This was problem one. Two was that Europe did not have the large pond seperating them from nearby Arabic countries that the US enjoys. According to my friends, who had every resource at thier hand and a "working" knowledge the UK decided that the best plan of action was to strike an agreement with the terrorist leadership. It went something like this. In accepting compensation (some of which you allude to in the form of gold?) you will discourage your radical brethern from blowing up things/people in our country. You will be allowed to have offices here, go about your business here, but will not cause havoc. Now of course the men sitting around my living room in Lebanon were not very happy with this "arrangement" and felt it would at best be a short term solution. It also left them wondering where else they might apply thier job skills? The years have shown it to have been a managable solution and at the time, was the only viable course of action that would leave the UK mostly unscathed. And it offered an advantage of being able to better track terrorist movements, agents, and gather intel on thier operations. Your statement implied that Europe had somehow found a magic wand to dismiss the terrorism threat. It boiled down to a simple "business deal". I doubt that it was even thought up by the UK, as other countries such as Italy and France and previously reached similar accords that had achieved promising results.
Yet even to this day it is no wonder why UK offers a token of of resistance forces to combat a growing problem. Is it because they are afraid of upsetting the deal made with the business partner? They appear to continually ride the fence. Publicly decree that the US should back off (appease the terrorist)
and send a token force to help the US fight the war.

You said it better than I, "Will see how it works out?"

The thin line of gold is weaved throughout all of man's history. Gold is niether good nor bad. It is not worthy of worship nor should it be thought of as a forgotten barbaric metal. It is what it is, Gold. And Gold has always and forever more have value. This Sir Belgian is something we both see eye to eye on.


mikal
Gold lease rates
Major up moves today all across the board. Jim Sinclair believes an up move in the 1 yr. rate will signal real problems for the gold short-positioned major investment banks.
misetich
US cities' financial picture darkens amid recession
http://www.forbes.com/newswire/2002/08/16/rtr698391.htmlSnip:

WASHINGTON, Aug 16 (Reuters) - Most U.S. cities were worse off financially in their 2002 fiscal year than in the previous period, the first time in a decade they have fared so poorly, the National League of Cities reported on Friday.

The group, which represents 1,800 cities and towns, said that municipal tax revenue growth was expected to sink to 1.2 percent by the end of 2002 compared to six percent in 2001.

"Two-thirds of city officials believe that their city will be less able to address financial needs in fiscal year 2003," the report, which surveyed 308 municipalities, added. Fiscal 2002 ends for most cities between June 30 and September 30.

At the same time, healthcare costs and new security and infrastructure needs in the wake of the Sept. 11 attacks would push spending growth to 5.6 percent compared to just over 5 percent in 2001.

More than half of city finance chiefs who responded to the survey said that their metropolis was less able to meet its financial needs than it was the year before, the report said.

Cities have been hit by the same national economic recession that has hurt state and other local government budgets.

But the report said most cities had ended the fiscal year with good-sized reserves as a buffer for expected bad times ahead, and noted that most cities relied heavily on property tax revenues which were less volatile than other kinds.
**************
Misetich

Real estate bubble has assisted cities in raising revenues -through higher property taxes -however there's no doubt spending cuts have been made- thus prolonging the nation's economic slump
Also their investment portfolio has taken a huge hit.

Got gold?



Belgian
Gold / US$ / euro / Oil
Aristotle # 83118 : What a fine syntax you made ! Bravo Sir ! If only more responsible individuals / institutions / fiat funds, could understand what is the essence. The US$ was able to create almost total inter-dependance and destroyed that healthy amount of necessary in-dependance.
A return to Gold's fundamentals and total recognition will make one *FREE* again.

Euroland will use its infamous experiences of two WWs as to promote a massive decline in global building of "hostility", counterproductive for balanced prosperity.
Euroland doesn't want a WWIII for whatever reason ! And Yes indeed, Waverider...war has already been installed and in a complete different manner. But if the globe's declining properity will be blamed on an increasing degree of hostility...camps will be divided more than ever before.
Not "against" a US$ hegemony, but "pro" stability and growth. It isn't an unfortunate co-incidence that Duisenberg's wife, provoked a row, about having expressed, explicitely, a pro-palestinian stance. Right or wrong is not the discussion here, but the fact that it is a semi-official act, does illustrate the fundamental difference in approaching "the" problem(s).

Sure, that young euro, hasn't yet a US$ track record. And it is not the euro-currency, as such, but rather the cargo it is covering, that is important to all of us. And as Ari pointed so well...it is not always a pure economical reason why a certain currency is preferred above another. Both currencies ($/�) have a very different philosophy and socio/economic orientation. And it must be seen against this background if the euro will make a chance to replace the dollar for oil. We simply can all live in peace if we want to and isolate, all together, those who remain evil for no reason !

Let the whole world trade with the whole Middle East, for an appropiate POO ! A POO that can be obtained for the same effort (regardless of currency) everywhere ! Euroland's expansion is an an equal euro-currency basis !!! Lady Waverider will never see a latin american common (dollar) currency !

Another war will expose the dollar in its reserve function, again, more and more critically. If half the globe must be bailed out again and again...something will snap. Again and again the IMF/Worldbank and other pro dollar-block official institutions will be criticized, repetitively. The euro will attrack more and more attention as a possible, suitable, alternative. And euro for oil will be a major step in this proces and make it irreversable.

Concentrating oneself on the military might associated with the dollar, might lead to un-flexibility and more hostility.
That's why the UK has so much difficulties in chosing camp.
A/FOA are surely watching, together with us, how things are working out. In the mean time, a direct assault of Gold, must never be excluded.

Apologize for not being able to put the correct nuances into the above text, due to language problems. Mothertongue is Dutch. Am confident that Ari will finetune and correct these mistakes. Thanks.
Operative
@ waverider Re: War in Name
One of the greatest assests of this forum is formulating an environment producing thought. Before any action can be taken first a thought must appear. ANOTHER'S "Thoughts" have been the springboard for pausing, reflecting, and beginning to develop plans of action for most of us here. Part of this thought process has been attempting to see things for what they are. Money, not the name of, but what is it? We have learned to redefine value, wealth, security, in terms other
than what the word is associated with upon first glance. Is there anyone here who believes the Gold Eagle is worth $50.00? That is the "face" value is it not?

War is a word that has become outdated, perhaps overused. For most of my studies I have replaced war with objective.
Objectives usually remain steady. War, and the use of the word can conjur up differant meanings at differant times for each indiviual. Is America at war? Some say yes, others reply saying we have not legally declared such. We want to think of beginings and endings to wars. Even the "war with gold" we want there to be a beginning and at some point when gold has reached XXX value we want to say Gold is free at last. Objectives are easier for me to deal in. There is an obvious objective to Iraq. It probably began covertly some years back, had a flare up during Desert Storm, (at which point many thought the "war" was over) but I beg to say the first leg of the objective had been successfully reached. After the media's version of Desert Storm and ended, we sliced off no fly zones north and south in Iraq. We kept a small contingency to enforce/deny Saddam use of these areas for some purposes. Phase two of objective completed. It appears that soon another phase will begin and once again the media will throw the word war around, probably declare the war has started...and at some point write, the war has ended. I say, another part of the objective has been completed.

We have learned to view things differantly in regards to the gold issue. There are probably some other words/ideas/ that we should review and see things in a differant light and like gold, redefine our thoughts and language to reflect a greater understanding.

Thanks for the post yesterday you brought up something that I had not given thought to.(Told you I was dense at times)
Your mention of my use of God, Bible, etc. I have been thinking about that and what amount of wieght to give it. Thanks for pointing it out though. My first response was thinking that the minds allocated around this table are too big to get hung up on those terms. The bible tends to speak to the spiritual wanderer in all of us. It also happens to provide one of the best historical documents of mans adventures on this planet. And when one delves into its pages there is a good track record of predicting certain events yet to come. I have spent a good part of my life travelling this world and meeting its varied peoples. I have learned to appreciate varied taste in food, language, culture and "religion". I have studied far and middle east thoughts, read the Koran, and in more recent times studied some of the Hopi indians teachings. I have found all have some measure of truth or insight. I would hope I could use any of these terms without eliciting some sort of knee jerk reaction, in attempting to share my own thoughts of the many sides and complexities to the gold issue. Narrow minds here at the forum? I hope not. I take my posting here as as it is given by the host, a courtesy. I have reread the 11 Points as outlined on this site's pages and intend to do my best to adhere to all of them and to add to, not subtract from, not only the spirit of this group, but the flow thoughts.
fang
Moody's
It appears that they are the only ones reporting anything resembling the truth. Each time they downgrade a company it seems to get a fair amount of press and clout, which is beneficial to our cause, specifically the JPM 'concerns'. If I remember correctly, once it was rumoured they were going to dg Enron, there were some 'questionable' calls made to high gov officials to try and avoid the dg. My question is this: Are they the last bastion of truth or are they suceptible to the manipulation crowd's control too? If they can be 'touched', then why haven't they been brought in line already?
misetich
Junk bonds in distress surpass post-Sept. 11 peak
http://www.forbes.com/newswire/2002/08/16/rtr698338.htmlSnip:

NEW YORK, Aug 16 (Reuters) - The percentage of junk bonds in "distress" has surged past the level immediately after the Sept. 11 attacks on the U.S. and is near an 11-year high, Merrill Lynch & Co. said on Friday.

Martin Fridson, Merrill Lynch's chief high-yield strategist, said in a report that the "distressed" percentage rose to 29.7 percent in August from 25.5 percent in July. The ratio is now just above the 29.6 percent level reached in September 2001 and not far from its recent 32.8 percent peak set in December 2000.

Junk, or high-yield, bonds carry lower credit ratings and higher yields because of their risks. Many analysts consider a bond "distressed" if it yields at least 10 percentage points more than U.S. Treasuries, which carry no credit risk.

Fridson said the jump in distressed debt is bad news for investors counting on a decline to put the brakes on what has been the worst year for high-yield bonds since Merrill Lynch started tracking them in 1986. He told Reuters this week that he saw no definitive evidence that investors are gaining appetite for the risky bonds.

"Investors must abandon any illusions that the rise in distress represents a mere statistical quirk related to fallen angels or some other such aberration," he said in a report. "Fallen angels" are companies such as WorldCom Inc. whose bonds fall to junk status from investment-grade.

Fridson said the distress ratio often foreshadows changes in the high-yield bond default rate, which has fallen far more slowly this year than analysts expected.

"Investors will have to reconcile themselves to a continuation of the painfully slow pace of decline" in Moody's Investors Service's 12-month default rate, he said. The rate is now 10.3 percent and peaked at 10.7 percent in January. Moody's expects it to fall to 8.8 percent by year end.
**********
Misetich

Moody's expected the rate to fall in the first half of 2002 and it didn't - and it appears that the economy is slumping once again in the negative or barely in the positive (if government numbers can be trusted)

More pain ahead for bond holders. Who's the next Worldcom? Enron?
Lets rembember that most of the accounting shenanigans (hiding debt) of Enron are believed to be legally correct by investment bankers.

Got gold?
mikal
Gold Derivatives peeking out of the closet
http://www.financialsense.com/editorials/sinclair/081602.htmJames E. Sinclair, www.tanrange.com
Chairman & CEO of Tan Range Exploration Corp
Downgrade Counterparty Risk: What's That?
by James Sinclair
August 16, 2002

There appears to be a forbidden word in established financial circles and the general media. The use of this name is such a blasphemy that it is comparable to the misuse of the name of God in the Old Testament. The utterance of this name in such a financial circle is so politically incorrect that it makes punishment by death almost is too kind for the transgressor. This horrible word is DERIVATIVES.
How many articles have you read in the Wall Street Journal or New York Times concerning the $72,000,000,000,000 of these items categorized by Buffett as "Sewage"? What talking head on financial TV stations has quoted the publicly available figures on total derivatives outstanding or any similar topic? The answer is ZERO. Can you image ZERO discussion in major media of the largest single item ever in world finance? Can you believe, ZERO discussion of the largest mountain of credit ever existing on this planet? Can you imagine, no significant discussion whatsoever in major media of the blatant market manipulation of gold to benefit the private interest of a group of dealers resulting in huge losses to the public?
So what is this Counterparty downgrade announced yesterday for major international investment banks? You got it. The forbidden word was not used. Yes, the downgrade of creditworthiness was referring to these international investment banker's obligations on DERIVATIVES. It certainly was not focusing on the banker's signature on the auto leases.
The same investment banks mentioned in the Downgrade as to Creditworthiness seems to be COUNTERPARTY on the majority of gold producer derivatives as well as the unnamed 89% of the $300,000,000,000 so-called Carry Trade derivative parties. In my opinion, that 89% so-called carry trade is nothing more than a bunch of Wise Guys, preferred clients of the international investment banks who got a rotten plum handed to them. These wise guys found (thanks to the gold dealer's cartel) a way to borrow the cheapest money ever lent to anyone, anywhere.
There is only one little problem. The "wise guys," as a result of this cheap money scheme, are short more gold than can be mined in the next twenty years, and more gold than is held in all the central banks on Earth. Central Banks will hear this downgrade of creditworthiness loud and clear. Watch the Gold Lease rate for a tip off on when this reaction in gold is going to turn into a slaughter of the gold bears and new highs in the gold price.
The Gold Lease rate, among other things, measures the supply and demand for gold leases. When the gold lease rate rises this time, it will be due to the central banks' reluctance to extend leasing and reluctance to renew already outstanding leases. The increase in the rate will be a product of reduced supply.
This is the KEY to the meltdown of the $300,000,000,000 in gold derivatives and may well be one of the reasons that the downgrade in credit worthiness was issued against the KINGS of the GOLD DERIVATIVES yesterday. WATCH THE ONE YEAR LEASE RATE to signal the demise of the investment bank parents of the "Mother of All Shorts," the $300,000,000,000 in gold derivatives that the gold dealer's cartel has been violently and publicly manipulating the gold market to protect.
misetich
LatAm-dedicated funds data suggest sense of panic among US investors - Merrill
http://www.afxpress.com/afxpress2/afx/story_43570.xml.htmlSnip:

LONDON (AFX) - Merrill Lynch said data on Latin America-dedicated mutual funds for the last four weeks suggest that for the first time, there is a sense of panic regarding investments in Latin American assets among US retail investors.

In the week ending Aug 14, Merrill Lynch said it "saw a significant deterioration in redemptions across all asset classes that we follow, with the worst pattern seen for Latin America dedicated funds."

Latin American fund net redemptions amounted to 23.8 mln usd, or 2.6 pct of assets, in the week ending Aug 14, while international Funds saw net redemptions in the past week amounting to 774.0 mln usd, or 0.7 pct of assets -- which was the largest redemption level for this asset class since May.

*********
Misetich

Investors seem unable to find places to hide. One investment - that has outpaced most investments and kept its value in the last little while is PHYSICAL GOLD - and it appears that the "bad times" are just ahead of us - which augments the reason to add 5- 20% PHYSICAL GOLD to any portfolio - as prudent portfolio insurance -

Got gold?
Belgian
@ Operative
Right you are Sir ! I do know about those subtilities you are referring to. But we have to keep our postings readable and stick to Gold as close as possible. And indeed I do make mistakes with a lot of one-liners that could easely be mis-interpreted. Not an excuse but must be said nevertheless.
If we go along, all together, around a major teneur...I'm a happy student. After all, w're only balancing things, constantly. This to find out how close we are to the point that enough people do see Gold "as it is" and for "what" it is as it is. Some timing can do no harm.

Thanks for your attention and time spend. Bedtime for me.

misetich
Vivendi Shares Plunge for Third Straight Day
http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=13&u=/dowjones/20020816/bs_dowjones/200208161259000394Snip:

ARIS -- Vivendi Universal (NYSE: V - News) SA's shares plunged Friday for a third straight session in a selling spree sparked by the embattled French media and utility conglomerate's huge first-half loss.


Vivendi's shares closed down 12% in Paris at 9.30 euros ($9.13), after losing more than 30% of their value in the prior two sessions. Since the start of the year, the stock has fallen 85%.
.............
With the sale of Houghton Mifflin and other businesses, Vivendi said it aims to raise five billion euros over the next nine months. But S&P said it doubts that would be enough to avert a cash crunch, noting that Vivendi faces 5.6 billion euros in loan- refinancing requirements by March. S&P has cut its rating on Vivendi's debt to below investment grade, while Moody's, which also lowered its rating on Vivendi to junk last month, cut it three more notches this week to single-B1. Both agencies warned further downgrades were in store if Vivendi didn't raise cash quickly.
***********
Misetich

Vivendi shareholders and bondholders wish they had bought PHYSICAL GOLD
Vivendi is ANOTHER example of the paper ponzi scheme - much ado about nothing just like Enron

Who's the next Vivendi? Who are Vivendi's shareholder's, bondholders?

Got gold?
Operative
To Each and Everyone Here
The glowing lights of this mass of equipment here at my hobbit lodge are growing dim one by one. Silence invades the spaced carved out to be my office as the whirring of cooling fans fades away. It must be friday! (oh no, chores to take care of around the farm...)

I would call this week a win for gold. Taking some of the more pronounced blows that I can remember in recent weeks she continues to stand and in fact grown a little stronger for all the efforts.

If during this week I have offended anyone within the ranks I apologize. It was never meant to nor anything said in an ill tone. There may be times you have to overlook my stumblings on the trail as I have my days of rambling, disjointed, thought processes. Hopefully, I can improve with each posting.

I raise an ice covered cold one on high, (opps, getting water all over the papers) and I toast each and everyone who enters this place of mental nourishment and understanding.
Have a great weekend to all!!~
misetich
Can You Trust Your Fund Company?First it was the accountants, then the analysts and investment bankers. Is the mutual-fund industry rife with conflicts of interest, too?
http://story.news.yahoo.com/news?tmpl=story2&cid=66&ncid=66&e=4&u=/bw/20020815/bs_bw/nf20020887528Snip:

That's the central charge of a campaign by the AFL-CIO, which is demanding reforms in the name of union members who are shareholders because of the billions of dollars invested through their retirement and other benefit plans. Labor argues that because mutual funds compete for companies' benefit business, including 401[k] plans, the funds kowtow to management while failing to vote proxies in the best interests of the millions of shareholders they represent.
.........
Plenty of experts don't buy these arguments. They say the mutual funds routinely vote with management -- a point Fidelity's general counsel recently confirmed in testimony before a New York Stock Exchange ( news - web sites) committee. And the woes of the stock market have heightened the potential for conflict. Like many large mutual funds, Fidelity has been trying to cut its dependence on money earned for managing individuals' investments, which fluctuates with stock prices, and concentrate more on such fee-based services as helping companies run 401[k]s and other benefit plans.

STOCK OPTIONS -- AGAIN. For example, Fidelity earned $2 million in 1999 [the last data available from Labor Dept. filings], for helping Tyco run $2.8 billion worth of 401[k] and other benefit funds. Fidelity is also the troubled company's second- largest institutional investor, owning 5.3% of Tyco's stock. "It's quite clear that [mutual] funds have to be very cautious in voting against their own [401[k]] clients," says John Bogle, founder of rival Vanguard Group.

A growth area for Fidelity is administering stock-option plans -- the same plans Roiter says Fidelity will vote against if they're too dilutive to shareholders. That means Fidelity could find itself voting against a plan it gets paid to administer.

Fidelity has large contracts to handle employee programs for companies such as Philip Morris, Ford, General Motors, and Shell. Overall, more than half of Fidelity's $9.8 billion in operating revenues last year came from such fee-based services, according to its current annual report. These fees, of course, are paid by the companies -- which could be ones in which Fidelity is a shareholder on behalf of its mutual-fund investors.

**********
Misetich

Conflicts of interests everywhere - and these managers get their fat bonuses at the expense of investors

There is a "few more rotten apples" that the Bush economic team admits -

The sham of certification is just that - ANOTHER scam!

Got gold?

R Powell
Operative
Yes, indeedy, it is Friday!

Let me think,....no, neither you nor anyone has offended me this week except for that one lousy client who claims that my payment (for work nicely done) was mailed last week and simply can't understand why I haven't yet received it.
But it is Friday so Happy Weekend to all
Rich
Mr Gresham
Sir Operative
Well said! We all have our stumblings, and mostly, we make our comebacks. This whole era is one of Psychology -- cynically keeping the flock moving toward the shearing, then the slaughterhouse.

As we watch this tragedy unfold, we must forgive ourselves for veering into the realm of emotionality on occasion, with all its pitfalls, for that is close to where our hearts are as well, and they are filled more with good will than with fear, and nary a hint of hatred here, that I can detect.

Keep on with your good presence, which I appreciate greatly.
R Powell
COT numbers
http://www.cftc.gov/dea/futures/deacmxsf.htm Usually the Commercials and Non-commercials hold opposing positions as these two groups are the big boys in the game. So, if one group is long, the other will be short and vice-versa. It's not too often that both groups hold net short positions but that's the case now with the so-called Non-reportables (small speculative players) holding a net long position of approximately 30,000 contracts. This group is composed of those whose position is under the required limit for reporting. The totals of the Commercials and Large specs are

Combined longs = 103,538
shorts = 133,446

Subtracting these numbers from the total open interest gives the small players numbers. So, the producers, users and big fund managers are aligned on the short side with a vast number of small investors taking the opposite side. The numbers were reported as of 8/13/02.

What does this mean? I don't know other than that the stage might be set for a nice short covering rally.
Any thoughts?
Rich
misetich
Warnings of rising pension liabilities continued this week
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029529800000&sn=1&banner=mainwireSnip:

Warnings of rising pension liabilities continued this week, a
result of the stock market's dramatic decline this year. Caterpillar
confirmed Thursday what it had previously warned, that pension costs
would cut after-tax income by $650 million. Analysts stress that pension
funding may prove to be a temporary problem, provided that the stock
market moves no lower.
**********

Misetich

Certification by all CEO, and CFO's is a total scam! Underfunded pension plans, off - balance sheet items - stock options (tech)

Nothing has changed - Investor Fraud Continues - but somehow it feels even worse as the SEC and US government have convinced the marketplace (the unsuspecting) to trust corporations

Got gold?

R Powell
Silver numbers
The same link I just put up also gives the numbers for silver. After the recent 60 cent drop in the POS I had expected to see that the big specs had reduced their long positions by much more than the numbers show. Again, these are totals through 8/13/02.
It appears that the silver market has become even more thinly traded so that even a little buying or selling (little in terms of % of contracts) can drastically move prices. There is silver being bought and sold in this world, I just don't think much of it moves through Comex. Many analysts (Butler and Morgan) have given the opinion that the silver market may use up all available supply before the shortage of silver is priced into the supply/demand equation. I find this extraordinary but quite probably true.

Had the silver market already priced in the fact that the government would soon become a large market buyer? The news gave no price support.
Did the presidential signing of the silver purchasing bill go completely unnoticed by the market? How long has the market ignored the declining remaining stores?
What is determining the POS? Is it simply the trend following speculative computer models? When was the last time any reason for a rise or fall in POS was given other than that POS was following gold or moved by technical trading? Actually, this is possibly the logical result of a market that has had a huge available (and always present) supply (5,000 years worth) for as long as anyone can remember. How else would it trade? Certainly not like corn or soybeans which have appreciated in price 25% very quickly on the threat of a possible 10% reduction (WASDE numbers) to this current year's supply. Imho, the beautiful white metal trades in a very lightly traded market, totally oblivious of supply and demand considerations, a fundamental information vacuum. This is volatile, dangerous, potentially profitable and great fun.
Any thoughts, news or opinions??
Happy weekend!
Rich
R Powell
Cousin Chris
What news of GATA?
slingshot
Siege Engine
Gold above $300.00Gandalf the White was drawing closer to the Valley of Clouds,leaving the Council at the castle in deep thought as to the meaning of the the Lord of the Castles words.
He had played his game of chess well. Although his Castle had fallen,he had checked their advance. He had dealt a blow to the mind of the Goldbugs. He made sure more and more entered the hall until he had a large audience and when his hall was filled invited his prey inside for the kill. Despair was his weapon. He knew depair could destroy any army better than axe or sword. That is why he chosed not to die in battle. So sure was he that he knew he would live eventhough asking Sir Howe for the Gallows.

The Council debated on The King with No Name.Who was he? How did he manage to fill the land with his castles and become powerful. Amass an army of willing followers and steal the wealth of his own people. The Council sent Gandalf the White to the Valley of Clouds. Hopefully to find answers to questions that had dulled their victory.


Gandalf the White was now entering the valley. Shadowfax pulled back and stopped. A loving pat to the side of his neck and Shadowfax stepped forward.


The Lord of the Castle'seated at a table, looked up at his guards and smiled.
Blackjack
Major Saudi paper calls for change in US relations
http://news.bbc.co.uk/2/hi/middle_east/2198156.stmA Saudi newspaper close to the government has called for a review of the kingdom's long-standing and close relationship with the United States.

"We must question those who think that America is our strategic option that cannot be substituted "...

Al-Riyadh A front-page editorial in Al-Riyadh newspaper says there is a need to revise Saudi Arabia's international strategic relations.

The article comes only a day after relatives of victims of the 11 September attacks launched a big lawsuit against people they accuse of helping finance the al-Qaeda network, including members of the Saudi royal family.
Blackjack
Gold bar sales surge around the world
http://www.smh.com.au/articles/2002/08/16/1029114011350.htmlThe gold bugs are back. But the rush isn't just for gold coins or mining stocks. It is also for the hardcore gold bar, which can weigh as much as a concrete block and can cost as much as a small house.

"I bought the big brick-like things, doorstop size," says Crispin Odey, a London money manager who acquired a few 400-ounce gold bars (roughly 12.5 kilos) for himself about 18months ago.

Odey, who likes to feel the �125,000 ($225,000) gold bars in his hands, adds, "My wife hates them because she thinks they are ghastly and wonders why it can't be jewellery."

For years, gold buyers have been scorned as investment Neanderthals, and buying the bulky bars - more associated with central banks than with personal investment accounts - may be the most old-fashioned way to do it. Odey, 43, says that when he asked his private banker to purchase the gold bars for him, it was the first time the bank had bought any for 10 years.

But Odey isn't alone. Banks and gold refineries say gold-bar sales surged as stockmarkets tumbled. Overall sales of gold for investment rose 36 per cent during the first quarter from a year earlier in North America, Europe and Asia, according to the World Gold Council.
R Powell
Blackjack
I see Adam Hamilton's name as a gold advocate in the article you just mentioned. His weekly essays are always interesting.
Blackjack
Good article on PMs
http://www.goldseek.com/cgi-bin/news/Zealllc/1029534535.shtmlSpeculators in the general US equity markets are not the only ones who have been entertained by an uncharacteristically wild summer this year. Gold and especially gold stocks have performed just about every kind of wild gyration imaginable during recent months.
While the volatile summer has certainly been emotionally challenging for all playing the markets, it was really a blessing for speculators. For those who are able to harness and suppress the inherent human greed and fear dwelling within their own hearts, this year has proven to be very profitable across the whole gold arena.
It has been about 4 months now since I hammered out my GoldTrends 2 essay, so this week felt like a good opportunity to take another look at the gold charts. We built some new graphs with current data in order to attempt to once again command the strategic perspective in the sometimes chaotic gold and gold stock action.
As daily volatility hammers investors and speculators alike and challenges worldviews and perceptions, it is incredibly easy to become mired down in the tactical daily market noise. Just as a good military general craves a satellite-level big-picture strategic overview of any unfolding campaign in war, gold speculators and investors can benefit tremendously by stepping back, ignoring the countless tactical day-to-day distractions, and focusing intently on the strategic big picture.
Gold's strategic fundamental picture is well known. It is believed that around 140,000 metric tonnes of gold have been mined in all of world history. Today about 30,000 of these tonnes are believed to be held by various central banks around the world. Most of the rest is in private hands, either in the form of pure investment gold like coins and bars or worn as jewelry.
Each year all the world's mines only manage to painstakingly chisel 2,500 tonnes of fresh gold out of the bowels of the earth. This number divided by the total gold supply yields an average annual gold "inflation" rate of about 1.8%, right in line with centuries-old historical averages. As long as fiat currency supplies around the world including the dollar are generally inflating faster than the total global gold supply, each ounce of gold will ultimately grow more valuable in currency terms.
Case in point, mega-inflationist Alan Greenspan has ballooned the US MZM money supply by an absolute 12.9% in the last 12 months. This hugely inflationary environment is fantastic for gold! Relatively more dollars chasing relatively fewer ounces of gold each year yields higher gold prices. Unfortunately, since sycophantic bureaucrats who hate freedom are running central banks all over the world, they too are inflating rapidly and intentionally destroying the savings of their people. Gold thrives in such environments of socialist government-sponsored theft through inflation.
As an added bonus, gold is also running a gaping natural annual supply and demand deficit. Today worldwide gold demand is believed to exceed 4,000 tonnes. Marginal new investment demand for gold, crucial for its price, is almost certain to continue increasing as the brutal supercycle Great Bear market in US equities continues to pour out its wrath upon the markets.
As more and more investors worldwide grow weary of their relentless general equity losses and they witness the magnificent gains the gold investors are reaping, a deluge of fresh capital is almost certain to flood into the very small and lightly-capitalized gold and gold stock markets.
Fundamentally, the gold market looks like an outstanding investment and speculation opportunity in coming years any way you slice it.
sector
@R(ich)Powell About the Silver Thing
The Users are Getting What they need...for nowBut not much longer.

The LBMA seems to be where the volume deliveries arise.

There is a growing problem in silver at the LBMA. The volume is falling at a very predictable rate R^2 regression of .77 [0 is no predictive value and 1 is perfect predictive value]. July's volume was the second lowest since 1995.

The volume regression line falls to zero in the first quarter of 2003. That means the available silver will be exhausted at current price levels. In order to gain certainty we must see in the next few months a continued below the regression line fall. Such a pattern would almost guarantee a looming exhaustion [At current prices] event in early 2003.

The price will not just go up a little after exhaustion in so far as the holders will exact a heavy toll for the years of privation under manipulation.

The manipulators cannot be happy with the falling volume in both silver and gold. They know full well that speculators have already been drawn to the arena and are licking their chops waiting patiently to launch their attacks.

I have said several times here that those who wish to buy physical metal need to do so well ahead of the coming LBMA resource exhaution events. There will sinply be not time to arrange one's finances and then place orders.

Maurie Obstfelt is an macroeconomic expert [UC Berkeley] in currency and resource speculative attacks and his models show that ALL the available resource or currency at the manipulated price is consumed IN AN INSTANT.

In short, by the time you get to the phone it's too late for the "Old" prices. One MUST be positioned before the launch.

One's decision should not strain budgets or in any way sequester needed funds. If you want more in metal, find unused assets and convert them into metal but you need to act in your own comfort zone.
R Powell
Lease rates for gold
Much, much higher or, another Kitco glitch?

Our own link works but has no numbers yet for today. The folks next door are also wondering about this. Has anyone seen the higher rates confirmed elsewhere?

Sector, thanks again. Your conclusion of volume trading declining fits nicely with my theory of the same (conclusion arrived at through different means) with the actual business of buying and selling being done off Comex. With available supply declining, we should see market convulsions at some point as long as someone needs the metal whether obtained through an exchange or not, ??
Rich
Horatio
Newmont vs Barrick
RESEARCH ALERT-CSFB starts Newmont and Barrick coverage

NEW YORK, Aug 15 (Reuters) - Credit Suisse First Boston said on Thursday it started coverage of Newmont Mining Corp. with a "hold" rating and Barrick Gold Corp. with a "buy" rating.

CSFB analyst David Christensen said in a research note he began covering Newmont with a 12-month price target of $23.50.

Christensen said he set Barrick's year price target at $19. On wednesday, Newmont closed at $26.25 and Barrick at $15.50 in U.S. trading.

((Sinead Carew, New York news desk 1 646 223 6186))
Black Blade
AOL, Charter Communications, and Others Face SEC Probes
http://www.cfo.com/article/1,5309,7567,00.html

Snippit:

The Securities and Exchange Commission has expanded its investigation into AOL Time Warner's accounting practices, turning it into one of the largest corporate investigations, according to the Financial Times. Charter Communications officials acknowledged on Friday that it has received a grand jury subpoena requesting documents relating to the company's past and present customers as well as its policies and procedures relating to the accounting of various costs. More than two dozen companies failed to certify fully or asked for postponements. The certification requirement affected only companies that operate on calendar years. Altogether 947 of the largest companies must meet the SEC's onetime order by December 2. Of course, by the end of the year, all 14,000 companies overseen by the SEC�including foreign issuers of debt and equity�must certify their financials, under provisions of the recently signed Sarbanes-Oxley Act, which will become effective by August 29. The SEC's requirement that 947 companies certify the accuracy of their financial statements is independent of the provision from the Sarbanes-Oxley Act and is a one-shot deal.

Black Blade: The current spate of accounting and corporate malfeasance scandals is just the tip of the iceberg. As corporate executives were cooking the books to reflect phantom earnings, they were also selling stock options while the suckers were left holding the bag when it all came undone. It is doubtful that all the cockroaches have been found. It is rumored that AOL is under the microscope now and it does not look very good. They are cutting their losses with a major management shakeup. This could be the next Enron.

Nomad
Gold Manipulation Gets Mainstream Press ...
http://cbs.marketwatch.com/news/story.asp?guid=%7BCBA46288%2D845B%2D48F4%2DAA9F%2D65D467F9C7F4%7D&siteid=mktw
Nomad : I can't believe you guys missed this :) A few months
ago it would have been ALL over this site ...

Gold Meddling !

Big banks may face big problems, including how they manage the gold market, writes Thom Calandra.

Bill Murphy, a gold advocate, has long warned his subscribers about the dangers of a massive bank default tied to tricky interest-rate and bullion derivatives. J.P. Morgan Chase is the largest issuer of gold-linked derivatives in this country. The contracts are designed to help gold companies, central banks and others manage -- and some say mismanage -- the market for gold.

"The S&P credit counter-party downgrade of J.P. Morgan Chase is significant," Murphy, editor of pro-gold publisher LeMetropoleCafe, tells me. Murphy is also chairman of the Gold Anti-Trust Action Committee, a nonprofit group that believes investment banks and government agencies, including the U.S. Treasury Department, have been depressing the price of gold for years in an effort to keep interest rates low and currencies sound. The banks and agencies also profit from gold-lending practices that benefited for years from sub-$300 gold prices, Murphy and his growing number of followers charge.



"Not only do the banks have potentially huge gold derivative problems, but that could set off an interest-rate derivative problem," Murphy said Friday. "Morgan has something like $23 trillion in derivative positions on their books, according to the Office of the Comptroller of the Currency. It is the norm to account for 2 percent of those derivatives to be at risk. That is a mighty big number."



Black Blade
Citigroup Faces Probes Following Grubman's Departure
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVyztBZrQ2l0aWdy

Snippit:

New York, Aug. 16 (Bloomberg) -- Jack Grubman, the star telecommunications analyst at Citigroup Inc., resigned under pressure amid allegations he misled investors by issuing favorable stock ratings to win investment banking work. The legal challenges against his former employer his actions instigated remain.

Citigroup faces criminal probes, a congressional subpoena, regulatory investigations and more than two dozen lawsuits over allegations that Grubman violated rules by functioning as an investment banker while he was employed as an analyst at the firm's Salomon Smith Barney unit.

Grubman's resignation ``isn't going to change any liability that Salomon may have,'' said John Coffee, a securities law professor at Columbia University. ``No organization can avoid liability for conduct of their agents when they were in office by later seeing them resign.''


Black Blade: I see shareholder lawsuits in their future. Thankfully they unloaded this charlatan, however, it cost the shareholders $32.2 million more. The big boss, former Secretary of the Treasury Robert Rubin still has questions to answer about his role in the Enron scandal.


Black Blade
Tyco, Others Face $60 Bln in Payments on Convertibles
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APVzIgxVPVHljbywg

Snippit:

London, Aug. 16 (Bloomberg) -- Tyco International Ltd., Vivendi Universal SA and more than 50 other companies around the world may have at least $60 billion in unexpected cash payments due by the end of next year. That's the amount of convertible bonds they may be forced to redeem because tumbling share prices eliminated investors' incentive to exchange the debt for stock. Tyco investors can force the company to pay them $2.3 billion in February because its bonds can only be converted into stock at or above $115.05. The shares closed yesterday at $13.26.

Black Blade: This should get "interesting".

Blackjack
US economy in dire state
Tokyo, Aug. 17 (Bloomberg) -- The end of the Japanese summer holiday next week may boost stock trading from a 7 1/2-month low. It probably won't help stock prices.

A strengthening yen and a slowing U.S. economic recovery may hamper gains of exporters such as Sony Corp. The yen rose 9 percent against the dollar in the past three months, denting the value of exporters' overseas earnings. A U.S. index of leading indicators probably declined in July.

``There are concerns about the currency, and there is no catalyst that will convince investors to look at exporters,'' said Makoto Sakuma, who manages $850 million at Asahi Life Asset Management Co. ``It's becoming clear that the U.S. economy is in a dire state and may fall into recession next year, hurting exporters.''

Black Blade
Liberty writes off $5.1bn from investments
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185784043&p=1012571727183

Snippit:

Liberty Media, the investment company controlled by John Malone, continued to suffer from the collapse in media stocks, as it revealed a total $5.1bn in write-downs of investments in the first half of 2002. Sharp falls in the value of its stakes in AOL Time Warner, News Corp and Sprint PCS pushed Liberty into an overall loss of $4.6bn for the six months to the end of June. This compares with a loss of $2.3bn in the same period in 2001.

Black Blade: A little hard to hide unless they use "pro forma" accounting. With all these $billions vaporized daily the media and investors are becoming numbed to such reports. Ah well, what's a few $billion here and there anymore?


Black Blade
Why Bush is Eyeing 'Rogue State' Oil
http://allafrica.com/stories/200208160086.html

Snippit:

With both oil-rich Central Asia, the Middle East riddled with conflict and US voters' continued distaste for new domestic oil exploitation, Washington is getting serious about changing its policy toward Africa. The Bush administration is looking for oil in former "rogue" nations Libya and the Sudan. The reason for this policy shift is that most of the world's major oil sources - the Middle East, Central Asia and the Andean nations - are now riddled with violent conflicts.

September 11 changed everything - even in the world of oil. Mr George Bush Sr thought that the collapse of the Soviet Union had increased the chances of obtaining a new ocean of oil and natural gas in Central Asia. But with his son's war on terrorism, the Central Asian option is now up in the air. The only chances left anywhere in the world are in Africa. American oil companies are clearly envisaging an African substitute for their lost Central Asia. That region would begin in the Persian Gulf and extend through a vast African expanse, deep into Nigeria.


Black Blade: How things change. It is all about oil. Former enemies become friends and former friends become enemies over the most crucial commodity of all � oil. We could see some strange alliances and even war over oil. Meanwhile, the US continues to gear up for the inevitable war with Iraq even though we are likely to anger other ME oil producers.

Black Blade
Saudis 'should reconsider US ties'
http://news.bbc.co.uk/2/hi/middle_east/2198156.stm

Snippit:

A Saudi newspaper close to the government has called for a review of the kingdom's long-standing and close relationship with the United States. We must question those who think that America is our strategic option that cannot be substituted

Al-Riyadh

A front-page editorial in Al-Riyadh newspaper says there is a need to revise Saudi Arabia's international strategic relations. The article comes only a day after relatives of victims of the 11 September attacks launched a big lawsuit against people they accuse of helping finance the al-Qaeda network, including members of the Saudi royal family. Although the paper does not refer to this, it does mention a recent Pentagon briefing during which oil-rich Saudi Arabia was accused of being a supporter of terrorism and an enemy of the US. The Pentagon subsequently tried to distance itself from the briefing given to one of its advisory groups, and Saudi Arabia dismissed reports of tension in its relations with the US. Saudi Foreign Minister Prince Saud al-Faisal played down the incident, blaming elements within the Bush administration who "unfortunately" sought to shake the traditional strong ties between the two countries.

'Blackmail

"We must question those who think that America is our strategic option that cannot be substituted. Those will put us in a narrow space, and their [belief] is not supported by objective justification," the Al-Riyadh editorial said on Friday. According to French news agency AFP, only two out of nearly a dozen Saudi dailies carried details of the lawsuit filed in Washington on Thursday. One of those which did carry the story, Okaz, branded the suit as "the largest operation of blackmail plotted by secret hands". The lawsuit alleged that Saudi money has "for years been funnelled to encourage radical anti-Americanism as well as to fund the al-Qaeda terrorists".


Black Blade: So what if they counter sue in Saudi for the same amount. Do the awards offset? Or do the Saudis just set higher oil prices as punishment? After all they control about 25% of the world oil supply. Short of war with Saudi I don't see any way to enforce a successful suit. Hmmm�

Nomad
Humor ...
http://www.satirewire.com/news/aug02/oaths.shtml
INVESTORS QUESTION "ELVIS," "DONALD DUCK,"
"TUPAC" SIGNATURES ON CORPORATE OATHS

CEOs Blame Rush to File for Accidentally Signing Wrong Names

New York, N.Y. (SatireWire.com) � While the SEC and President Bush lauded corporate executives for certifying their financial statements, investor groups poring over the pledges since the Wednesday deadline said they couldn't help but notice that nearly half the CEOs and CFOs did not appear to have signed their own names.


Among the nearly 700 oaths filed so far are those signed by General Motors' CEO "Elvis," energy firm Nucor's "Troilus" and "Cressida," and Merrill Lynch's chief executive "Clifford the Big Red Dog."

"Maybe the executives didn't understand, but the idea was that whoever's signature was on the certification would be personally liable if the company books turned out to be false," said investor advocate Jeremy Toft. "If they don't sign their own names, it kind of defeats the purpose."

"Oh damn," responded AOL Time Warner CEO Richard Parsons, who said he must have "accidentally" signed "Yoda" in his rush to get the forms in.

"Typo," added Citigroup CEO Sanford Weill, who confirmed that no one named "Capt. Jean Luc Picard" actually works for the company. Citigroup CFO "Jane Austen" could not be reached for comment.


While consumer advocates were skeptical of the signatures, SEC Chairman Harvey Pitt defended the submissions he has seen so far. "I've only looked at a couple of the filings, but I see here that according to WorldCom, it's run by Donald Duck and Sponge Bob. That sounds right to me."

However, Sen. Paul Sarbanes, who co-sponsored the bill requiring the certifications, was livid. "So if, for instance, Amgen's financials turn out to be false, shareholders are supposed to sue Cotton Mather"? he asked. "If that's the case, we'd be better off eliminating the oaths and going back to the old way."

"Will you sign a pledge to that effect?" replied Interpublic Group CEO John "Led Zeppelin" Dooner.
Black Blade
Sting Operation Could Be Tip of Iceberg
http://biz.yahoo.com/rb/020816/financial_stockfraud_1.html
Snippit:

NEW YORK (Reuters) - A two-year federal sting operation led to a mass indictment this week of 58 stockbrokers and corporate executives on charges of stock fraud and money-laundering. It's just the tip of the iceberg, lawyers say.

Black Blade: Tip of the iceberg indeed.

Belgian
The "TRILLION" dance.
38 TRILLION US$ Bonds, relatively easy, to obtain that correct figure, by simply adding up all the existing $-bonds in circulation. This 38 Trillion do carry an average interest rate of let's say 6%. 6% on 38 Trillion = 2,28 Trillion US$ added to the already existing pile of dollar-confetti.
how much is 2,28 trillion $ ? Well, almost, twice as much money than the present worth of all Gold ever mined !!!
140.000 tonnes of Gold x 10.000 $/Kg = 1,4 trillion dollars ! (1 tonne =1.000 Kg) : Proportions !!!
US national debt is (officially) 6 Trillion US$ or 4 times the present worth of all the Gold ever mined !

Total euro debt is "much" less than the 6 Trillion US debt and has 50% more Gold to mark to market, behind it !(8.000 US-tonnes - 12.000 Euro-tonnes). Proportions !!!

Is the above, sufficient, to suggest that Gold-Management is related to the struggle between the aging dollar and the coming euro !? Is this sufficient to explain the un-explicable behavior of JPM/C/GS/DB on Gold derivatives, set on track with the help of some central banks ?
Or more to the point : Isn't it because of the *euro* that the US$ had to find a way to extend its lifetime ?
This is never mentioned when gold-authorities discuss the derivative situation at JPM/C and Co. Or in other words : If the euro would have been a death born child...the massive Gold intervention would, probably, never have existed ? Hereout follows the logical question if Gold-Intervention only dates from the late ninethies or existed already from 1980 onwards, in different intensity of course ?

There never was a danger of having US-citizens, leaving the dollar for euro. But there are more dollars outside the US than inside. Consequently, the outside dollar piles needed even *more* Gold intervention than the inside pile. Also knowing that when the dollar's purchasing power would decline...US citizens would flight into Gold rather than any other possible currency (euro). Euroland's central banks *forcing* the biggest US private banks (?) to slowly fall into the Gold (derivative) trap !? As A/FOA, tried to make us understand that to get rid of the paper gold contract market...a "gigantic" trap must be set to finish this non physical trade once and for all. Gold is in my opinion, the only tangible not ment for substantial volumes of paper contract trades. And all the blablablah about Gold being a death asset is nonsense. The idiocy of putting life into Physical Gold with paper-contracts, is promoted with a well targetted purpose.

There must already be a plan for bailing out JPM/C and eventually others who were so cooperative. A covered nationalisation � la Japan ? Or a more simple deus ex machina, unknown to us ? Such as a massive, in one go, overnight, devaluation of the US$ IN ORDER TO DECIMATE ALL DEBT AT ONCE ?
De Ronin
Lawsuit against the Saudis for 9/11
Although the viability of the huge lawsuit against the Saudis for 9/11 might be tenuous at best, wouldn't it serve as an impetus for them to withdraw funds from direct investment into the US equity and bond markets? Inconjunction with the prospects of a weakening dollar, and toppy stock and bond market, why would any Mideast investors want to leave funds and accounts here for potential confiscation? Recent lawsuits against tobacco firms and such have set the big buck precedents. Any judgement with the plantiffs could establish another precedent on attaching to foreign wealth invested here.

If I was that one Saudi Royal family prince who has been such a high profile investor here, I'd be nervous as hell.

The true undereported story of the year is the adverse shift in US/Saudi relations. I don't think people realize how much Saudi pro-western oil production policy has contributed to our last 2 decades of prosperity. If there's a pending clash of cultures, we are energy vulnerable.
misetich
President Moves to Spur Investors -
http://www.washingtonpost.com/wp-dyn/articles/A28067-2002Aug16.htmlSnip:

"I am going to analyze and think about some of the suggestions so that when I announce them, it will be well thought out, it will be a part of a long-term plan. . . . We're thinking about all options," the president said.
.........
Bush referred to the measure in the shorthand of the market cognoscenti, saying he was looking at "expensing losses, increasing expenses of losses, accelerating the 401(k) contribution limits -- in other words, making it easier for people to put more money in their 401(k)s quicker."
...........
The official said the ideas Bush mentioned have long been under consideration, but the forum in Waco "gave us a chance to bring those issues to the forefront." Aides said they feel strongly that the corporate responsibility bill Bush signed last month will reassure investors, making this an ideal time for new incentives
...........
A Treasury official confirmed that tax analysts are working up proposals designed to lure investors back into the stock market, as well as to ease the pain of those burned by Wall Street's slide. All of the proposals were floated publicly by discount brokerage magnate Charles Schwab at the president's economic forum.
............
Misetich
"Lure investors back into the stock market" interesting comment - insatiable greed - as trillions and trillions of investors hard earned $ have evaporated

Somebody should advise Bush and Co. that the Stock Market is overvalued - and that the nation's economic growth is anemic - if any at all- and that Greenspan is out of bullets, as is the Treasury- as 11 interest rates cuts and tax cuts have not done the trick

A few months ago Bush & Co wanted to invest Social Security into the stock markets

A lot of Waco's ideas (pardon the pun)

Got gold?





misetich
Russia, Iraq Plan Deal to Bolster Ties -Economic Pact May Complicate U.S. Action Against Baghdad
http://www.washingtonpost.com/wp-dyn/articles/A28520-2002Aug16.htmlSnip:

By Peter Baker
Washington Post Foreign Service
Saturday, August 17, 2002; Page A01


MOSCOW, Aug. 16 -- Russia and Iraq plan to sign a new five-year economic cooperation agreement worth $40 billion, reinforcing Moscow's close ties to Baghdad even as the United States weighs a military attack to drive Iraqi President Saddam Hussein from power, Iraqi and Russian officials said today.

Russia's apparent refusal to abandon its longtime ally, despite vigorous U.S. efforts to isolate Iraq, could make it even more difficult for the United States to rally Russian and other skeptical world leaders behind any invasion.
The five-year agreement will deal with cooperation in a variety of fields -- foremost oil, but also electrical energy, chemical products, irrigation, railroad construction and transportation, according to officials here. Soviet or Russian specialists built much of the infrastructure in Iraq, and so Baghdad wants Russian expertise to help repair or upgrade it.

Russia has continued to strengthen ties with all three of the countries branded the "axis of evil" by President Bush: Iran, Iraq and North Korea. Despite President Vladimir Putin's friendship with Bush and support for the war on terrorism, Moscow last month released a separate plan calling for increased nuclear cooperation with Iran and this week invited North Korea's leader to visit Russia.
............
"Without question, there will be a big ceremony," said Khalaf, the Iraqi ambassador. "Just recently, they informed me that it will be at the end of August." Iraqi officials want to hold it in Baghdad, he added, as a way for the Russians to show "moral support."

The disclosure of the economic agreement with Iraq follows the release of a Russian blueprint for expanding ties with neighboring Iran as well. That document, signed by Kasyanov, envisioned Russia building five additional civilian nuclear reactors in Iran in addition to the one already under construction at Bushehr. Top Bush aides complained to Russian officials that such cooperation could help Iran develop nuclear weapons.

**************
Misetich

Self serving Ruskies - complicate matters

Got gold?
JCTex
Belgian--debt/dollar/gold....who?
Good post. Let's add a little more to the soup:

Who is going to amortize all of that U.S. debt?

Forget "per capita", "per capita" doesn't pay taxes; taxpayers do.

In 1999, there were a total of 126,009,000 tax returns filed; of those, 1,260,000 [top 1%] paid 36.2% of the total taxes, 6,300,000 [top 5%] paid 55.5% of the total taxes, 12,601,000 [top 10%] paid 66.5% of the total taxes, 31,502,000 [top 25%] paid 83.5% of the total taxes, and 63,004 [top 50%] paid 96.0% of the total taxes.

One other thing, that $6 trillion debt number is the "play-like" debt; you know, the one with the "off-budget" numbers. Yeah right, let's "play-like" we aren't going to pay those gray panthers their social security. I want a picture of the politicians that come up with that one.

For those of you that want to play with these numbers, I pulled them off of www.taxfoundation.org.

I am not at my desk and don't have a calculator, but when you amortize those debt numbers and divide them up among the bill-payers [taxpayers] of this country, you come up with some really sad stuff.
misetich
Survey: 17% of CFOs Have Been Pressured
http://www.cfo.com/article/1,5309,7502,00.htmlSnip:

However, the survey also suggests that many companies must do much more. Over half (54 percent) of the 141 respondents say they report pro forma results in quarterly earnings releases, but 18 percent of those that use pro forma don't reconcile those results to U.S. generally accepted accounting principles (GAAP), even though the Securities and Exchange Commission has advised companies to do so. Even more troubling, 17 percent of all respondents report being pressured to misrepresent their results by their companies' CEOs during the past five years
...............
Misetich

The article does not identify which companies have been surveyed - however - it should not surprise that accountants are being pressured by their senior managers to misrepresent their results.

Accountants, CFO and other financial executives either lose their jobs or do whatever they're told or perhaps "convinced and persuaded" to fudge numbers - aided by crooked auditors and lawyers who "legalize" the felonious transactions

The last 7-8 years has seen a tremendous increase in creative accounting measures - as rules, laws, are being stretched and stretched to the maximum bringing the whole economic systems and financial system into disarray

The fallacy of attempting to "save the markets" without the necessary reforms will make things worse - as the whole moral, ethical foundation has been corrupted.

Attempts to jawbone to add "confidence" to a ponzi scheme- is irresponsible and doomed to fail

A little insurance - PHYSICAL GOLD- to a investment portfolio's is a prudent strategy

Got gold?





misetich
Brazil Fails to Get U.S., IMF Help in Keeping Bankers Lending
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APVx__BRMQnJhemlsSnip:


Washington, Aug. 16 (Bloomberg) -- In November 1998, Stanley Fischer, then second-in-charge at the International Monetary Fund, had lunch at Manhattan's Links Club with executives of the largest U.S. banks and urged them to keep lending to Brazil.

The IMF had just announced a $42 billion aid package to bolster the country's reserves after Russia's debt default, and the fund needed the bankers' support.

``People were impressed and the prospects looked pretty clear and so the banks were asked not to make the situation worse,'' said Ernest Stern, former J.P. Morgan Chase & Co. managing director who attended the lunch. The IMF thought ``the government would be helped if people didn't head for the exits.''

The IMF isn't asking banks to make the same sacrifice now. After unveiling a $30 billion pledge last week to help Brazil avert a debt default, the fund and the U.S. Treasury haven't pressured banks to keep financing Brazilian borrowers.

............
``The IMF has given Brazilians, foreign banks and speculators a $16 billion exit visa to take money out of the country,'' said Adam Lerrick, who helped write a U.S. congressional report two years ago that argued against multibillion-dollar IMF bailouts.

The fund pledged $6 billion this year and allowed the central bank to tap $10 billion more of its reserves to buy its currency. Brazil will have access to $24 billion next year if it meets economic targets.

............
As a result, Brazil's benchmark bond and currency are worth less than they were when the IMF aid was announced last week. The currency has lost a fifth of its value since May; bonds have fallen 30 percent.

U.S. banks, including Citigroup and J.P. Morgan Chase had $27.5 billion of exposure in Brazil as of the end of March.
.............
Brazilian exporters are so squeezed by the lack of financing that the trade minister Wednesday pledged that the central bank and state development bank will provide as much as $2 billion in export loans this year.

That amount is dwarfed by what private lenders are pulling out. The central bank said lenders transferred $1.25 billion out of the country for non-residents and multinational companies in July, twice what they had a month earlier.

Citigroup, which has a branch network in Brazil, cut loans and other commitments in the country by $2.1 billion to $9.3 billion at the end of June from the first quarter, regulatory filings show.

Bank of Nova Scotia, the first international bank to abandon Argentina, is now only renewing about 30 percent of Brazilian trade-finance contracts, according to Eduardo Klurfan, who runs the bank's Brazil operations.

J.P. Morgan's Stern said the situation in Brazil is different from four years ago. ``The confidence is not there and capital is leaking out,'' he said.
.................
Before coming into office, President George W. Bush accused the IMF of acting as a welfare agency for banks.

``I don't want to see the IMF out there as a way to say to world bankers, `If you make a bad loan, we'll bail you out,''' Bush said in a presidential debate in October 2000.
*****************
Misetich
Quote
``The IMF has given Brazilians, foreign banks and speculators a $16 billion exit visa to take money out of the country,'' said Adam Lerrick, who helped write a U.S. congressional report two years ago that argued against multibillion-dollar IMF bailouts.
End of quote

It is a question of when not if - Brazil's debt default-

Got gold?



misetich
Bond Outlook [by bridport & cie, August 14th 2002]
http://www.bridport.ch/BridPublic/news.htmlSnip:

It is also hardly rational economic leadership when the best the US President can do is go on television to state that he "believes in America". Imagine for a moment if any European politician came out with "I believe in the UK (or France, or Germany or whatever)" as an argument to boost the stock markets. Unthinkable, thank goodness, is it not?
.............
Corporate bond markets are not just showing volatility, but reflecting the growing unwillingness to lend, the emerging credit crunch and the absence of new issues as spreads balloon. It is a sign, if any more were needed, that financial market readjustment to reality is far from over.

One fine day, perhaps, playing games will cease and the USA will get on with what it is so good at: being: a dynamic, entrepreneurial and wealth creating society, where earning rather than "making" money predominates. The current trend to call in the old guard to replace flamboyant (and often devious) CEOs is heartily to be welcomed.
.............
Harvard economist, Ricardo Hausman, shares with us a belief that if Paul O'Neill is involved, a problem cannot be far away. Hausman rightly points out that if, first you say that handouts create moral hazard and the cash goes to Switzerland anyway (just how out-of-date can a man's views be?), and then you say that a country, in this case, Brazil, is really deserving of an IMF rescue, you just might make markets more confused than ever. Could it be that Mr. O'Neill is less interested in saving Brazil than in helping US banks rid themselves of Brazilian debt at the most favourable terms?

Our earlier warnings about the dangers of deflation remain valid, and leave us in no doubt that long-maturity Government bonds are the place to be.
*********
Misetich

I wonder which government bonds the writer is suggesting - Argentina, Brazil, Turkey, Columbia, Chile, Venenzuela, Paraguay, Uraguay, South East Asia, Japan, Russia?

PHYSICAL GOLD in time of crisis - get some

Got gold?
misetich
Al-Watan: intellectuals stress Saudi Arabia's unity, condemns US intervention
http://www.arabicnews.com/ansub/Daily/Day/020816/2002081601.htmlSnip:

Several intellectuals in Saudi Arabia are embarking on collecting signatures of a draft statement under the title "together in the trench of honored," in which they reject all forms of intervention in the internal affairs of any country in the world, calling on all "honest people" to "unmask and condemn what have been there in the American administration of thoughts on interfering in the Kingdom's affairs under titles and justifications like drying the springs of terrorism and human rights issues."

The Saudi daily al-Watan said on Wednesday that the statement's draft stresses "commitment to the Kingdom's unity and sovereignty and resisting all forms of interference in our affairs." However, Saudi- American relations increasing in tension last week after the Washington Post spoke of a report submitted to the Pentagon which described the Kingdom as an "enemy" state and a supporter of terrorism. The American administration, later, denied this report.
.............
The statement's draft condemned the "policy of power and arrogance and the double- standard policy practiced by the American government against people, and their results in flagrant violations of principles of right and justice at the economic, political, cultural and security levels." The statement indicated the US rejection to ratify several international agreements like Durban and Kyoto agreements besides its rejection to take part in the membership of the "International Criminal Court."

The statement draft also supports the statements made by German intellectuals and the message of the American citizens to their friends in Europe and others, all rejecting the alleged moral justifications concerning the war which has been launched under the titles of fighting terrorism in several areas of the world.
*************
Misetich

War of words is heating up. Perhaps cooler heads will prevail.
Iran, Iraq, SaudiArabia, Venezuela are all major oil producers at odds with US administration - in various degrees

How long before oil is priced in Euros?

Got gold?
Golden Bear
The Collapse of the Inverse Pyramids
http://www.prudentbear.com/archive_comm_article.asp?category=Guest+Commentary&content_idx=14623Snippit:

"..... Since its demise four years ago, Long Term Capital Management has become a lightening rod for debate over the use of derivatives and the general stability of the U.S. financial system.� This discussion has been focused almost entirely on the use of leveraged trading instruments, liquidity and the implications of counter-party risk.� It is understandable that most of the debate has been centered on financial system issues, given the scope of what occurred.� However, the big picture has been almost entirely missed.� LTCM?s capital structure and corporate strategy have been treated as unique and a fascinating anomaly.� Nothing could be farther from the truth.� LTCM was merely an advanced model of the newly designed U.S. corporation.� This design is the byproduct of a long revolution in academic theory and business practice that treasures belief in the supremacy of debt-financing and efficient market theory.� LTCM, Enron and Worldcom have to this point been treated as industry-specific or corruption-related stories.� This analysis misses the most important point: all these companies shared the same capital structure and finance philosophy; and this approach that is now dominant throughout corporate America is doomed to fail massively....."
----------------------------
GB: Excellent analysis of why the Bear market has only just begun....companies using massive debt to chase business opportunities that were vanishing...�
Waverider
DeRonin: Saudi
I was reading on some of the Arab newssites that the suit seeks ''in excess of $100 trillion''. The Globe and Mail reported one trillion. The lead attorney said the money would likely come from assets held by the defendants in the United States. I agree - regardless of the merits of the lawsuit, if it were me named as a defendent I would be repatriating my assets ASAP. Meanwhile, the suit will act to further erode ME-US relations. Cheers,
Waverider
misetich
Stock plunges a sign of worse to come - Investment banks face derivatives nightmare, says critic
http://cbs.marketwatch.com/news/story.asp?guid=%7BCBA46288%2D845B%2D48F4%2DAA9F%2D65D467F9C7F4%7D&siteid=mktwSnip:

SAN FRANCISCO (CBS.MW) -- Where there's red ink in a stock price, there's trouble -- and that bodes ill for the largest U.S. investment banks.

There is overwhelming evidence this year that a company's plunging equity is almost always a sign of worse to come. Shares of Tyco (TYC: news, chart, profile) dropped precipitously, to levels no one thought possible, earlier this year. Only to keep falling, again and again, on repeated rounds of horrible charges leveled against the company's accountants and its top executive.

.............
The big question for most of us is when other shoes will drop on companies whose shares are reflecting deep trouble. This applies, of course, to Vivendi and other media companies that face a cash-flow crisis, always a red flag to banks and bond holders.

The world's largest investment banks are almost surely next on the hit list of endlessly falling equities. Standard & Poor's Ratings Services just said it may cut credit ratings on Merrill Lynch, Morgan Stanley (MWD: news, chart, profile) and J.P. Morgan Chase (JPM: news, chart, profile). See story.

S&P's credit analyst pointed to "the deteriorating environment for the profitability of the investment banking industry." Other banks, Goldman Sachs Group (GS: news, chart, profile) and Lehman Bros. (LEH: news, chart, profile), also face downgrades in S&P's review of these big banks' short-term credit ratings.
............

J.P. Morgan Chase and other large banks have suffered rapid losses in the value of their common stocks. J.P. Morgan has been hit especially hard, with its shares off as much as 40 percent since July 1 as the specter of derivatives-related losses haunts the halls of the New York institution.

***********

Misetich

JP Morgan will be hard pressed in the next several months. Debt provisions will rise, as earnings will undoubtedly shrink - dividend cut on the horizon -

JP Morgan the Feds worst nightmare

Got gold?
USAGOLD / Centennial Precious Metals, Inc.
Put a foundation under your portfolio diversification decisions
http://www.usagold.com/cpm/abcs.html

ABCs of Au by MK

The ABCs of Gold Investing

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barnaclebob
The Axis of Corporate Evil
http://www.hereinreality.com/news/axis.html#5

In what appears to be an attempted corporate takeover of America, the same names keep coming up time and again. Click on the numbers or scroll down to see the connections.

Note: This chart does not touch on campaign spending. Bush/Cheney represent the State Department. Many of the seeds of this evil axis were sown during the Bush, Sr. and Clinton administrations.

Ouch! Got Gold?

mikal
@misetich
"JPM the Feds worst nightmare" I would agree with that statement were it not for the opportunities it presents them. As Belgian has said today, a recourse could involve nationalization or currency devaluation. Perhaps they've thought of doing all this, and more just for starters.
Belgian
Re :
@ JCTEX : Indeed Sir, no-one, taxpayer or not, will ever pay back any fraction of debt. Interesting to know how taxpaying is divided percentage wise. Thanks.

@ Misetech : Y're doing a great job here with your research, delivered on our plates. Thanks !
The US's rejection of its membership of the "International Criminal Court", is some more, strong, evidence of how the dollar-block is drifting away from the international community (euro-symphatizers). Israel + Afghanistan bombing would come as first cases. Idem dito for Russia strengthening ties with everyone except the US !

How far will the US go in isolating itself, politically/economically ? How must the dollar go to hide its mis-management and oil (standard) dependance ? All this, only 50 years after the allied forces landed on D-day ! TG/A/FOA : The dollar is at the end of its lifetime !?
Black Blade
Investors Not Biting on Bullish Bait
http://biz.yahoo.com/rb/020817/column_stocks_week_1.html

Snippit:

NEW YORK (Reuters) - "Come back in, the water's fine," say Wall Street experts. But investors have gotten wiser, and they're not biting on this bullish bait from analysts who have been collectively wrong for so long. Investors have been scorched many times by the stock market and a whopping $7 trillion of their wealth has gone up in smoke since early 2000. With people intensely risk averse, a new conservatism is developing among investors. Many are convinced the market is not the smart place for their money, and they're ignoring the warning that they may miss out on the next great bull market.

"Repairing of damaged portfolios and rebuilding net worth is the story of upcoming months," says Asha Bangalore, economist for Northern Trust Co. "The extravagant years belong to the past." Indeed, investors flirting with retirement and even those in their mid-50s are preserving what's left of their shriveled 401(k) money. It will take years, with any luck, for some people to rebuild the wealth lost during the 2 1/2-year bear market. A tornado of fund redemptions -- Wall Street lingo for selling of mutual funds -- has fueled the steepest and most severe market slump in two generations. There was an outflow from stock funds of $1.9 billion through the week of Aug. 7 and nearly $41 billion ran out in July, the biggest monthly drain since AMG Data Services started collecting the data in 1992. The exodus of money will restrict the ability of fund managers to buy more stocks, which could throw a wet blanket on the market's recovery for a long time. Feeling betrayed, investors may be reluctant to again risk their retirement money. Many have been fooled too many times by head-fake rallies since the crash began in March 2000.


Black Blade: Indeed, consumer spending is slowing and that has several Wall Street commentators worried. Corporations have already stopped spending. Wall Streeters are now debating whether this market recovery "has legs". Meanwhile outflows from funds are still strongly outpacing inflows. Most days trading volume on Wall Street has been pathetic. Until corporate "actual" real earnings materialize, there is unlikely to be much of a recovery. So far most of the activity appears to be confined to investment institutions. This is not blanket buying by the general public. As investors watch their remaining wealth vaporize the outflows from funds will continue and consumers will spend less. The large unemployment announcements will also dampen consumer spending as fear sets in. In a word � "Grim"

Black Blade
Iran Mulls Dropping Dollar As Currency Of Oil Sales
http://biz.yahoo.com/djus/020817/200208170829000004_1.html
Snippit:

TEHRAN -(Dow Jones)- Iran is considering whether to change the currency basis of its crude oil sale from the U.S. dollar to the euro to avert losses from the declining value of the dollar against major world currencies, managing director of the National Iranian Oil Co., Seyyed Mehdi Mir-Moezzi, said in remarks published Saturday. "Decision making in connection to the continuation of transactions in dollars is being considered in a committee set up at the Central bank of Iran," the local daily Hamshahri quoted Mir-Moezzi as saying.


Black Blade: This isn't completely unexpected. Other ME oil producers are considering doing the same. It is partly the falling dollar and also the growing antagonism between the US and the Middle Eastern countries. The dollar has lost its status as a "premier" currency and is likely to be only considered as part of a "basket" of currencies in foreign reserves.

steady
(No Subject)
Sierra Madre
So-called "outflows" of funds from Stock Mutual Funds...

Black blade: allow me again to question this concept of "funds" outflowing from the Mutual Funds through redemptions. Excusa me, but you see...

The "outflows" of funds MUST be the same as the "inflow" of funds. The "outflows" CANNOT be greater; or at least, the limit by which they can be greater, is the cash position of the Mutual Fund(s). When the cash position is gone, there is NO WAY more cash can come from redemptions, than is going IN from new purchases.

So, some more intelligent people are getting out, and other less intelligent people are making their exodus possible.

As for volume being low: all it takes to vaporize the value of a stock, is a tiny amount of stock selling for next to nothing, because THERE ARE NO BUYERS. In that case, there was a collapse in the value and there was, practically speaking, NO EXODUS of funds.

The whole Mutual Fund edifice can crash in value, when no buyers turn up with the cash, to allow the scared holders to get out.

I think there is a great confusion between the amounts of stock trading hands at progressively lower prices, with "funds outflow". As I say, no "inflow", then no "outflow". Price is another thing, requires only a scarcity of buyers to produce a collapse in value.

Your thoughts?

Sierra




Sierra Madre
Belgian: Comments on US self-isolation
Sir Belgian:

Derivatives don't only occur in finance. They occur in politics as well...

A certain group of people have had for a very long time, a policy of "Us against the World".

This same group has enormous power in the U.S., and the U.S. attitude of "U.S.A. against the World" is a derivative of the Master Group psychology.

Capish? What does this have to do with gold? USA wins: gold is suppressed for a few more years. USA loses: gold to the moon.

Sierra
Black Blade
Greenspan's judgement is questioned as US recovery falters
http://www.examiner.ie/pport/web/business/Full_Story/did-sgcM5letzyIGU.asp

FEDERAL US chairman Alan Greenspan has backed himself into a corner.

Snippit:

For the past 18 months he has been hailed as a genius, but the recovery he looked to have engineered looks to have blown up in his face. If true then watch out for further carnage on global stock markets in the near future. By slashing US interest rates to 40 year lows, at 1.75% over the past 18 months, he kept the US consumer buying and prevented the economy from going into serious recession. To date that seems to have been the case, but the cracks are beginning to appear yet again. Critics argue the cracks never disappeared. They point out that the citizens of the US have moved from being net savers to net borrowers. And they fear that when US interest rates start to move back up that millions of people will be over extended. Concern also is growing that the much vaunted recovery in the US is not emerging. Just a month back he told Congress that the recovery was underway. Earlier this week he said the total opposite and said the prospects of another cut in interest rates had increased.


Black Blade: The economy has been afloat on cheaper rates as consumers mortgaged to the hilt and burying themselves under record levels of debt that they will never likely be able to pay off. This time when the markets sink and consumer spending subsides, we should see the US experience the same problems as Japan or even worse � remember the Great Depression? Most likely not. But it is a growing possibility.

Off to slay some more fish!!!

Black Blade
Re: Sierra Madre

The current flow of cash into funds has decreased, while the flows out of funds are forcing redemptions of current stock/bond holdings. The funds are shrinking. Fidelity Magellan (the largest fund) has had large redemptions that have made the news over the last few months. The cash reserves in several funds have been depleted and now shares must be sold to meet redemptions.

- Black Blade
Sierra Madre
Thanks Black Blade, for responding...
In other words, I am right? After cash position at Mutual Fund is gone, only way to redeem (pay out cash) is to sell Mutual Fund stock to someone else, who puts up the money that is going out. If no one puts up the money, no cash goes out in redemption, because the stock has turned worthless.

Hmmm...

Mutual Funds....not a good place to be.

Sierra
darkhorse
@Sierra
This might just be too simple of an example, or maybe even my own stupidity, but consider this:

I invest in a mutual fund with (pick a number) other people. We all invest the same amount...same stocks, same number, same value. After a series of serious pullbacks in the SM I decide the wheat is more of a golden shade (ok, admittedly I'm really reaching to include our favorites here) elsewhere. If everybody else in that fund wants to stay and ride things out but I pull what's left of my money out of that fund, that is a fund redemption. Nobody else has to take my spot. Loss of value from shrinking stock prices is one thing...people pulling their money out and fewer/nobody else putting their money in is net redemptions.
Sierra Madre
More comments on the Mutual Fund situation:

Yes, the Mutual Fund industry must be shrinking, a way of saying that they are "net sellers" of stocks. The public handed over billions to the Funds, they bought stocks and forced the prices up. Now, the public wants its money back. So, the Funds have to sell. Selling forces prices down, so the money being returned to the public is going to be less than was invested. Hmmm
And buying and selling are not symmetric. When the Funds were buying they bought from each other, splendidly, profusely. Up went prices.
Now, they are in "selling mode"; but, while the Funds were so chummny on the way up, they are certainly NOT going to be good friends helping out, on the way down! Every man for himself!
And, ff not other Funds, who is going to buy the massive amounts of stock that is going to be dumped shortly?
The Fed?
Interesting, or as you would say, BB, "Grim".
Sierra
Black Blade
Re: Sierra Madre

Actually the stock may not be "worthless" but could be sold at a lower price. That is if the fund sells their "losers". At some lower price someone may consider the stock reasonably priced at lower levels. This selling will in turn put downward pressure on share prices.

Now I really got to go to slay some fish before the late afternoon winds pick up. Cheers!

- Black Blade
TownCrier
Sierra Madre #83185 -- fund cash flows
When you first raised this point a week ago, I tried to clear up your confusion but failed. So here's another go at it, in different words.

You are mistaken when you say. "The "outflows" of funds MUST be the same as the "inflow" of funds. ... there is NO WAY more cash can come from redemptions, than is going IN from new purchases."

It seems that you are assuming -- incorrectly -- that funds can only sell their assets to other funds.

The latter half of the excerpted phrase is true enough, but you must look at the whole body of the stock market and its participants, not just the fraction involving the funds.

If a citizen wants to exit his position in a mutual fund, (and for simplicity we'll assume that fund's sole holdings is IBM) then to provide the cash the fund might sell some of its IBM stock to the wide participants on the stock exchange. A net outflow of money from mutual funds would mean that the IBM stock was bought by someone other than another mutual fund.

Was I successful in being clearer this time? If not, show me where I've failed and either I'll chip away at to your advantage or else you'll succeed in teaching me the error of my thoughts.

R.
misetich
mikal
"Perhaps they've thought of doing all this, and more just for starters."
*******

No question they will pounce on the opportunity and do their thing. However, there appears to be dark clouds on the horizon - the timing of event - is of one question - perhaps "all the preparation" has been laid out - and contingency plans are in place -
Is it the Feds agenda or "someonelse"? Guessing the latter

Got gold?



TownCrier
Looks like I need to learn to type faster.
R.
Belgian
@ Sierra Madre
You : If the US wins, Gold will be capped/managed for some more time.
I have my doubts about this logic.
A winning US means : the dollar remains unchallenged and keeps it purchasing power !? Your logic started from the premisse that it is only the US that is (has been) managing POG !!! I am afraid you have it wrong here and that other than US Gold Giants, will take care of POG, regardless if the US (the dollar) is winning. It is my opinion that today it is the POO which is challenging (provoking) the dollar's worth. If oil should fail...Gold will take over the job ?

Goldwar is the last war to be fought and therefore decisive.
It only suffice one Western Central Bank (BIS or outside BIS-candidate Eurolander) to announce it will officially buy (not sell) GOLD and the pressure is on even before one ounce is even purchased. That's what the mark to market is for !
IMVHO, a big fraction of this globe is after the dollar with increasing conviction. From who did China purchased Gold ? Why is Russia (central bank) accumulating its own mined Gold ? Why is China investing in Gold mining on its territory to substitute imports ?

As I've tried many times to do some simple math on how easy it is to corner the present paper gold trade for good...the dollar is given some extended lifetime for opportunistic, pragmatic reasons. A Gold buying panic is as easely managed as a Gold des-orientation. But one does not engage in such an enterprise on an "experimental" basis. The next BIG Gold-Act will be a relative transparent one and not the secret shufflings of the past.

Different Central Banks offered Gold reserves for forward sales. What if some of them decide, this management has come to its end ? The low POG was Good for the US$ and a strong US$ "WAS" good for other nation's prosperity. Do expect the reverse being organized when appropiate.

The history of Gold gives evidence that Gold has always been much more as what is officially (commonly) stated, that it is. Gold is POWER ! For a japanese or Saudi housewife and central banks as well.

It is my strongiest conviction that the US$ is encircled.
Geo-Politically, economically and monetary. The dollar has been the winner for the past 70 years. So *was* communism up until it suddenly crashed with the speed of light !
Gold's management needed a Berlin Wall and got one builded/constructed by ***temporary*** mutual interests.
That wall of shame was eradicated without one single shot fired. Same will happen to Gold. It will be set FREE with or without another period of victory for the US$!

Many researchers here on the forum do provide evidence of this evolution. The many Gold authorities, don't seem to see things "this" way. Find this very strange !
As if FREE GOLD seems to frighten them. Nevertheless, Sir Hamilton, in his recent essay, does mention 5.000$ per ounce as a starter for Free Gold's ultimate revaluation.

Please do remember sept. '99 as the WA -Gold spike ! How can we possibly make any time-guessing on such a big change ? Who possibly could have imagined the WTC-atrocity. And who could have dreamed of the US doing succesfully in Afghanistan what the Russians weren't able to do during 10 long years of fierce fighting. There are answers behind these paradoxes. The same goes for Gold's nearby future.

There are a lot of veryt good Gold essayists out there who can bring this message to the general public in a very easy to understand language. But they do hesitate. POG's future isn't beyond their 400$ > 600$ > 1.000$ horizon (to da moon). Why hasn't A/FOA projection of a POG 30.000$ never been questioned or even ridiculed ??? He made me think...think very deeply and search for understanding and evidence.

Oh yes, the US$ can win another race. Gold will win the whole contest. Thanks Sierra !
Sierra Madre
Towncrier...thanks for clarifying what we are talking about....
So many confusions arise from imprecise statements!

I was talking about "A" mutual fund. Cash coming into a fund must be equal to cash going out, unless the cash position is drawn down.

If we take ALL the Mutual Funds together, then "outflows" balance "inflows" IF they are selling to each other. Net "Outflows" will be present if some of the Mutual Fund sales are back to the public, where the cash came from in the first place. In this case, the Mutual Fund industry is shrinking, for two reasons: One, the stocks they are holding are presssured downward in value, due to selling into the general market (not to each other) and Two, they are returning money to the public. Have I got it right this time?

When all the Mutual Funds find themselves pressured to return CASH to the public, it's going to be an ugly picture.
As I said, the process of going UP is very different from the process of going DOWN. Buyers disappear.

That brings up the question of the Fed. It seems to me the Fed would extend very ample credit to the Mutual Funds, to enable them to return money to the public, WITHOUT having to sell stock. Maybe already doing this? This would delay a collapse. But in the long run, the Fed would be stuck with a pile of highly overvalued stock given in collateral by the Mutual Funds. (I don't suppose the Fed cares much, one way or the other.)

The way things are these days, that's what I suppose will have to happen.

Thanks for the patience, Towncrier

Sierra
TownCrier
Sierra Madre...
BINGO!

R.
AllanC
Sierra Madre's Question
@TownCrier

I was actually thinking along the same lines, the entity taking the other side of the trade is someone other than a mutual fund. That means it would probably be "a big fish" ie company itself, another company, major sockholders in a company, rich entrepreneur a la Soros, a bank, people who want a controlling interest in a company, PPT?...these are the types of investors who don't put money in mutual funds.And they are needed to keep the markets liquid. If liquidity were to dry up, then even a small fund redemption would send the market into a tailspin.

And just because these "big fish" are taking the other side of the trade does'nt mean they will be successful. Usually the majority of these types like to get in when stocks are fundamentally undervalued.

AllanC
Belgian
Iranian oil for euro (BB) !
Is it co-incidence that this x-thieth trial ballon is lounged when Iran and Russia (second to OPEC) openly advertise their co-operation !!!-??? No it isn't ! Russia wants to have its finger in the pudding as it comes to co-balancing this globe's rapport de forces. First it was the NATO discussion. Now it is on the economic (monetary) front that Russia doesn't want to be denigrated (insulted/ridiculed). Who could imagine this oil for euro a couple of years ago ? It was A/FOA who teached us this !
First Iraq, then Iran and soon Saudi Arabia (BIS MEMBER !!!)
might announce the oil for euro, shocking phrase. Next is Russia. Then North sea oil and African oil might follow soon. Same oil for two different currencies during another transition period ? Or maybe better : cheap oil for euro and expensive oil for US$ (plus Gold) ? US$/euro temporary period of parity to facilitate the transition ?
Sierra Madre
Belgian - mcuh obliged for your thoughts!
This is the second time you devote considerable time to a query of mine. Thanks very much, indeed, for your kind attention.

Well, you may be quite right. I suppose it all boils down to just how "omnipotent" we feel the U.S.A. is. It's a question of perceptions, since we don't have access to the facts - if any human does have such access.

I ask my intuition to tell me what is the correct thinking in this matter, but my intuition has its cellular disconnected, apparently. No answer.

We shall just have to wait and see.

Here's another question: what if ONE country decided to allow free coinage of silver? It seems to me that might prick the dollar balloon as well. Argentina? Venezuela?

On a fun note: in one of your replies to me, you mentioned the "cadans" of debt. I understood perfectly; since I am a Spanish speaker, I related the word to "cadenas", meaning "chains". I had to smile! You write English vastly better than I could write French, so keep up the great, interesting posts!

Sierra
Aristotle
Sir Belgian, it's great to find you so active today!
Let me put a HUGE echo on a comment from your first post today:


"As A/FOA, tried to make us understand that to get rid of the paper gold contract market...a "gigantic" trap must be set to finish this non physical trade once and for all. Gold is in my opinion, the only tangible not ment for substantial volumes of paper contract trades."


Beautifully said. If players get their fingers burnt SOOO BADLY on Gold papers that they thought would be a Sure Thing (as a leveraged investment), then the details would take care of themselves. Heck, it wouldn't even require an act of Congress to eliminate "counterfeit" (i.e. paper/contract/derivative) Gold -- the burnt hand teaches best the course of future action: =avoidance.

Of course, Congress will want to take some credit for "cleaning up the corruption" and will likely make de jure what has become de facto -- curbs on the trade of artificial Gold.

As you probably agree, nobody today *knows* what the proper price is for the value of Gold, because the vast impurities of paper Gold give us an impure price measurement of its value. Only at such a time that the impurities are "refined" away will we see what price the market assigns to the value of the little bit of real Gold that remains.

How many times have we had this drilled into our heads here, essentially -- "Only the Metal can provide the benefits of Gold. Paper is only paper."

This was the premise of my old post on the proper role of Gold in an imperfect world, and for emphasis, let me join in that view again to repeat your succinct remark:

"Gold is in my opinion, the only tangible not ment for substantial volumes of paper contract trades."

The sooner more people grasp the significance of this simple notion, the sooner the race will be on between two horses -- DeJure and DeFacto! We'll know that DeJure has won if we get the official "Lightning in the Night."

As the world turns, it is a wonderful ride to be on!

Gold. Get you some. --- Aristotle
Mr Gresham
Where is EscapeTheMatrix lately?
Also GauntletRunner2?

For we are characters inside a great financial video (/pinball?) game, inside someone's screen, running about trying to find our escape.

(Spent this A.M. going over another l'il ol' lady's JPM trust statements, and trying to figure just where her money is, is a puzzlement indeed! To be disappeared with a mere mouseclick, I'm sure...)
Mr Gresham
What keeps people from rising up against Wall Street?
(Reflections on 84-year-old women put into tech mutual funds -- sheesh!)

The utter passivity of them -- I'm seeing clearly the "insiders'" view of the investing public as sheep to be sheared, then slaughtered in due time.

What keeps people from marching on Wall Street's plunderers with torches lit, and tar and feathers?

I think it is the shame that they could be looked at so callously; after all, this is their "LIFE'S SAVINGS" they've entrusted to these young men in suits! Their hard-earned dollars deserve respect, and so, those fine prospectuses reassure them (except for all the warnings, glanced over), they will receive same.

The idea that others could simply pillage them (well, 2% fees a year, anyway -- on NO earnings) and expect them to keep in line for it, would be too SHAMING for them to acknowledge at this time. It would be a violation at the deep level of challenging their love of country, and family, and work ethic that brought them to this time of wealth accumulated.

When their statement reads "$200,000" this year, instead of last year's "$280,000", they throw up their hands, "Oh well, that's the way it goes." Some greedy young man in a cheap suit just bought himself a new Porsche...
MO VER MEG
(No Subject)
A beautiful evening for each of us to take a moment and write a short note to our Congresspersons about CFTC complicity with the criminal derivative-producers. Be sure to keep copies. I told Chairman Newsome that I looked forward to sharing my correspondences with the upcoming Congressional investigation of the CFTC's involvement in this theft.

I also urge each reader this week to overcome procrastination with respect to picking up basic essentials (metals, fuel, food, tp, medicine, etc.). I topped off the barrels today and will do the pantry tomorrow. As Mad Mac said, "Be sure to add lead to your precious metals portfolio". I think the time is quite short.

Commitment conquers complacency.

MOVERMEG
cyberbat
Mutual Funds
I'm just wondering if the mutual fund industry would embezzel funds from their money market fund to pay for redemptions like the fed does with the s/s fund. Hmmmm, it may be time to get out of that too!!
Mo ver meg, lead was the first thing to go into my portfolio. You could call it a long term investment; very long. It will be the last to be drawn down upon, but I will not hesitate to do so in order to protect my other investments.
silvester
No Subject
Often I wish we like thinkers lived closer together. Sometimes feel we are spread too thin.
Waverider
MoVerMeg, Cyberbat
Lead? Why lead to ones investment portfolio? This is the first I've heard of it. TIA!

BTW, I've 50 lbs. of fresh wild salmon at the smokehouse and next weekend is set aside for home canning - time to reap the harvest from the summer and store up for the winter - it may be a long one! Cheers,
Waverider
Black Blade
Preparation - Food Storage

Considering the drought conditions in the western hemisphere (and parts of Asia) and reduced grain supply over the last couple of years and the draw down on supply, a good food storage program is worth looking into. Food prices are probably going to increase. I see that meat prices are going lower as feed prices are increasing and grazing lands are getting parched. Ranchers and farmers are culling herds now. I went by the local supermarket and I see sales on beef and pork, though I have plenty of game in the freezer. Another point to keep in mind is that as petroleum prices increase, so too will commercial pesticides and herbicides that will increase costs.

I keep a good stock of grains, dry goods and canned goods on hand that I get in bulk or by the case when on sale. It sure has been nice to not have to go to the store while sitting on the "Bone Pile". There are other items you can get to add to storage as well. Of course you can add a few of the more exotic items that keep well. I have a friend from the Azores who occasionally sets me up with a good supply of bacalao (salt cod) for my storage, though it requires a good soak to remove most the salt before preparation.

A recent report that I don't have on hand right now, discusses the current problems with fresh water supply in the states. Storing some water would not be a bad idea either. It is easy and not costly right now. No matter how it pans out, it isn't that difficult to take precautions. Anyway, it is just a part of an overall plan to be prepared just as we (or most of us anyway) prepare by accumulating precious metals as another layer of security.

Now to broil a couple of trout and make some saffron rice for dinner and a couple of cups of yerba mat�.

- Black Blade
steady
gold
i was strolling by a magazine rack when the cover of sept smart money caught my eye.... it was gold... gold bars on the cover nonetheless dang the public is being awoken to golds investment value, mainstream magazines featuring gold on the cover.... am i dreaming... no i didnt read the magazine they probably are here reading this site to get the info to put in the magazine!
steady
hidden debt of the usa.
How Big Is the Government's Debt?

If we use the most common definition -- the sum total of all outstanding bonds held by the public -- the federal government debt stood at $3.3 trillion at the end of 2001. That amounts to $11,657 for each American. However, this explicit debt measure does not reflect the full magnitude of what the government owes. Looming just over the horizon -- and wholly ignored by current measures -- are the accumulated obligations to pay Medicare and Social Security benefits to the baby boom generation and other current program participants. Although not officially reported as debts, these implicit commitments dwarf the debt held by the public.

As of 2001, the accumulated entitlement obligations owed to all people (including all current workers) who have earned Social Security and Medicare benefits is $12.9 trillion for Social Security and $16.9 trillion for Medicare. [See Figure I.]
When these obligations are combined with the debt held by the public, the total burden equals $33.1 trillion, or 10 times the official debt measure.
This "total debt" is more than three times the size of the nation's total output in 2001, and amounts to $116,381 for every man, woman and child in America.

read the rest.........
Black Blade
Tokyo govt to deposit Y100 bln in Citibank
http://biz.yahoo.com/rc/020817/financial_tokyo_banks_1.html

Snippit:

TOKYO, Aug 17 (Reuters) - The Tokyo metropolitan government, which now has deposits only with Japanese banks, plans to deposit more than 100 billion yen, or $852 million, with major U.S. bank Citibank to diversify risk, the Yomiuri Shimbun said on Saturday. The report comes after Japan lifted last April a blanket deposit guarantee on time deposits, and ahead of the removal of a similar guarantee on ordinary savings accounts next April. The move, expected during the current fiscal year to next March, would make the Tokyo metropolitan government the first municipal government in Japan to deposit public funds with a foreign bank, the paper said, citing Tokyo government sources.

Black Blade: The Japanese government doesn't even trust its own banks. How the hell do they expect the Japanese people to have any confidence in the banking system if they themselves have no confidence and are bailing out before the next "April Fools Day Surprise"? No wonder the government wants to reduce deposit insurance for those foolish enough not to take the hint. I expect to see another "Japanese Gold Rush" as the deadline approaches.

Belgian
@ Sierra Madre @ Aristotle
SM : ...free coinage of silver...to prick the dollar balloon ? I don't see silver having that "omnipotence" as Gold does. Liked that word "omnipotence" you were using last night. Silver is not an official monetary reserve and comes second (to Gold) as a tangible for people's selfdefense against currency detoriations.
Silver could be inflamed by initiatives as those presented by Hugo Salinas (Mexico). IMO, silver is too isolated in contrast to the UNIVERSAL Gold. The signal function of silver is as good as the CRB-index. Silver will follow, not lead. Can silver unchain (cadenas) itself from its industrial constraints and act as a precious metal like in the good old days of the bi-mettalic standard ? I doubt it ?

Ari : ...An act of Congress to eleminate "counterfeit"...
A setting Free of Gold can come from so many different angles. Do you remember Hashimoto (1997) and his threat to the US about using Gold to discipline their monetary policies ?
The alpha and omega about Gold is not a US exclusivity and the chances that the US congress, acts, are imvho, very slim. At best it will be some postfactum clearing and covering for the past wrongdoings.

The Big Gold-Surprise can come from anywhere, anytime. Thanks Ari.
Blackjack
Headed into Depression?
http://www.gold-eagle.com/gold_digest_02/chapman081902.htmlOne of the best prognosticators on Wall Street, Stephen Roach, of Morgan Stanley said, "I continue to believe that the balance of risks on the price front has shifted away from inflation to deflation. The evidence, in fact, is building that more than a casual whiff of deflation is already in the air in the US. Unfortunately, that's exactly what the model of the post-bubble economy would predict - an overhead of excess supply that could lead increasingly to widespread price destruction."

We finally have someone on Wall Street that agrees with us. We can imagine how the Lone Ranger felt. We now expect gold to rise to compensate for losses. It's called a flight to quality. We also expect that once it is obvious that we are headed into depression interest rates will move back upward as few want to lend due to the systemic problems in the financial system.

The financial system will freeze up. As gold moves up the derivative bubble will collapse taking a number of major world banks with it. Banks such as JP Morgan Chase, BofA, Citicorp and Goldman Sachs.

This will be an irretrievable blow to the elitist financial conspiracy and finally all their evil machinations will be laid bare for the whole world to see. They will no longer be the masters of the universe; we will have defeated them in spite of their enormous power.
________________
The US mint sold 48,000 gold Eagles in July or 60,500 ounces up 20.6% from a year earlier.
Black Blade
Rally May Fade Until Earnings Rise: Stocks Outlook
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topsum&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APV5nVxUyUmFsbHkg

Snippit:

New York, Aug. 17 (Bloomberg) -- The four-week rally in U.S. stocks may fade as investors temper their expectations for a rebound in corporate profits. A decline in earnings forecasts and a rise in stocks have made equities more expensive. The Standard & Poor's 500 Index traded for as little as 14 times estimates last month. The index now sells at 18 times forecasts. ``I am not overly optimistic,'' said Bill Turner, manager of the $1.4 billion One Group Mid Cap Value Fund. ``The earnings revisions continue to go down, and the economic indicators are benign at best and not signaling a robust recovery.''

Investor withdrawals from mutual funds may also limit gains. Stock funds reported outflows of $4.6 billion in the latest week, according to AMG Data Services. Equity funds lost more than $40 billion in July the largest monthly outflow since September 2001, AMG said. ``We are still selling into strength because people want their money back,'' said David Briggs, head equity trader at Federated Investors Inc., which manages about $185 billion in Pittsburgh. He said the firm's mutual funds were forced to sell $17 million of shares the past five days to repay investors pulling out. ``We have had a summer rally but it's not so safe to go back in,'' said Briggs. ``I see a lot of risk.''


Black Blade: The "real" earnings are much lower as the S&P measures what are essentially "operating earnings", though they now refer to these earnings as "core earnings". The stock index last traded at about 39 to 42 times earnings early last month. Meanwhile, investors just want out while the investment houses are propping up the indices for now. The question is how long they can keep it up as fund redemptions continue. Could get quite "interesting" in coming weeks.

Black Blade
Hungry Emus Invade Australia Farms as Drought Worsens
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Latest%20Columns&touch=1&s1=blk&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APVykxBaWSHVuZ3J5

Snippit:

Orroroo, Australia, Aug. 16 (Bloomberg) -- About 300 hungry emus trek across Steven and Zeila Teague's farm in Australia each day, leaving behind a trail of chewed and trampled wheat stalks. Drought in Australia, the world's second-biggest wheat exporter, is forcing native animals off parched pastoral land and on to farms in search of food. Thousands of kangaroos and the ostrich-like emus have swarmed on to 300 farms near the Teague's property in the past month. ``There's no point in harvesting this year because there's only a quarter of the crop left,'' said Zeila Teague, who expects a A$50,000 ($27,000) drop in income this year from the farm at Orroroo, 300 kilometers (186 miles) north of Adelaide, in South Australia.

The El Nino-induced drought may cost A$1 billion in lost grain production and slow an economy that grew at more than 4 percent in the first quarter. It's already slashed cattle prices by 30 percent and cut sugar and cotton output. Companies, which sell farm equipment, such as Wesfarmers Ltd., said it may dent their sales. Australia ships about 15 percent of global trade in wheat, adding A$4.7 billion to the nation's export income in the year ended June 30. The current crop, to be harvested between October and February, is expected to be the smallest in seven years.


Black Blade: I hear emus are quite tasty though. However, a drought in OZ adds more pressure to the world grain supply. Enjoy a few good "cheap" barbeques in the meantime as ranchers sell off and flood the market with mammal flesh. Next year food prices could go through the roof as stored supply will be depleted and if the drought extends into next year and beyond it will be an absolute disaster. As always, get out of debt, stash enough cash for several months� expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. It appears to be shaping up to be a difficult year ahead. Then again if you're in OZ a few emu and roo burgers might be OK.

Black Blade
The $64,000 Question on Natural Gas
http://www.renewwisconsin.org/cheapo/mv63002.html

Snippit:

The natural gas market has been unusually if not eerily quiet this year. After shooting up to $10/MMBtu in December 2000 and then tumbling below $3/MMBtu in early 2002, prices have remained relatively stable throughout this spring, hovering slightly above the $3 mark. Between a nearly 20% drop in industrial usage�a reaction to the price spike--and an exceptionally warm winter, natural gas storage levels are now double what they were a year ago. U.S. demand is expected to rebound to over 22 trillion cubic feet (Tcf) this year, and may even eclipse the 22.5 Tcf mark recorded in 2000. So is the coast clear? Is it safe for us to consign that nasty price spike to the dusty archives of academe and get after the Mirants, PG&Es and Calpines of the world to start building the merchant gas-fired generating capacity that they have permits for? About as safe as sleepwalking across an interstate highway during the afternoon rush hour.

Their current position represents a complete reversal of fortune from where things stood in January 2000, when IPPs, along with other "New Economy" high-flyers like the telecom industry and Internet start-ups, rode tall in the saddle as the bull market ascended to new highs. But all financial binges must come to an end, and when the revelers go home, someone has to come along and assess the mess left behind. As the speculative excesses of the late 1990's gave way to the proverbial morning after, investors woke up to the realization that economic slowdowns invariably dampen demand for electricity. Yet, according to EIA projections, demand is creeping up to 2000 levels, indicating that unless new sources of natural gas are tapped into and brought to market in the next six to nine months, we will experience another round of price volatility.

The deeper one digs into the natural gas supply picture, however, the darker it gets. Despite the fact that gas drillers operating in the U.S. completed 30% more wells last year than in 2000, setting an all-time record, output increased by a paltry 1.8%. With spot market prices too low to sustain the drilling boom that peaked last July, gas well completions are expected to sink to about 13,000 this year, a decline of more than 40% from last year's record total. Company president Matthew Simmons said: "Our firm (Simmons and Company) has just completed an incredibly intensive supply analysis on 53 counties in the state of Texas. These 53 counties represent 66% of Texas� gas supply. Texas represents 31% of total U.S. daily gas supply. Based on this study, I fear that U.S. natural gas supplies could fall as much as 10% in as little as six months from now. The drop could be close to double that amount by the time it bottoms."

Even if the expected dip in this year's output is no greater than 5%, "there is a good chance that the industry will not be able to get supplies back to the flat levels we enjoyed for the past eight years," Simmons said. In the course of exploiting domestic deposits of natural gas, energy companies tapped into the largest and most accessible fields first, then moved on to tighter and deeper pockets as depletion set in at the bigger fields. As we all know, the smaller and more inaccessible the deposit, the higher the cost of extraction on a per cubic foot basis. Another price shock in 2003 is a virtual certainty. What's not certain is whether the U.S. economy can grow at the price needed to keep natural gas supplies from contracting. So, the $64,000 question is this: can the natural gas industry ever again settle into a price range that can stabilize supplies without causing an economic train wreck? Unless and until that question is answered in the affirmative, it is not possible to lend any credence to official projections that call for increased supplies of natural gas, many more gas-fired power plants, and vigorous growth in GDP along the lines of the previous decade's expansion.


Black Blade: The deepening economic recession and warm weather are the main culprits in lower NG prices and large supply. However, drilling activity is very low and more recent reports indicate that production will fall off by 6% and with less production coming online we should see price spikes in a few months as I have suggested in the past. Injection rates have fallen off as well. If the economy is in "recovery" then that "recovery" is in serious doubt if NG energy prices increase.

Blackjack
Marconi bites the Dust, Bone Pile Mountain grows higher
http://news.bbc.co.uk/2/hi/business/2201089.stmMarconi shareholders are braced to see the value of their stock become almost worthless when a survival deal is signed later this week, reports say.

The troubled telecoms equipment firm is set to announce how it will restructure its crippling �4bn ($6.1bn) debt mountain.

Some newspaper reports suggest that Marconi will hand over all but 1% of the firm to its banks and creditors, while the Sunday Telegraph says it will go into "voluntary liquidation".

Either way, such a deal signals the end of the road for Marconi, once a champion of the new economy set to reap huge gains as telecoms systems were expanded and upgraded.

Following the collapse of the dot.com bubble, Marconi was left unable to pay debts run up during an ambitious international expansion programme in the late 1990s.
__________________________

Zurich, Aug. 18 (Bloomberg) -- Swiss Life may post a first- half loss of up to 3 billion Swiss francs ($2 billion) because of a slump in investments, SonntagsZeitung said, without citing anyone. Its first-half 2001 net income was 253 million francs.

Switzerland's largest life insurer may have lost 2.5 billion francs in investments, mainly on stock markets, in the first six months of the year, the newspaper said. The company wasn't immediately available to comment. Ruedi Bodenmann, head of risk management, wouldn't comment, the Swiss paper said.
__________________________
Buddy can you spare a Billion?
Black Blade
The China Factor
http://www.oil-gasoline.com/default.asp?id=645
Snippit:

The Problem is China's Rapidly Emerging Economy

China's emerging economy is in the process of changing the entire oil supply-demand picture. Until now, the US was the country that provided the marginal demand in the crude oil market. But that was when China produced enough oil to satisfy it's relatively meager demand. Recently, things have changed in China. China is building refineries at a rapid rate. It's production was keeping up until 1999, when refining capacity exceeded production by just over a million barrels per day.


Demand for Gasoline will Grow with Introduction of Cars

The US Trade Agreement with China will benefit the automotive industry. But it will also hasten the demand for gasoline in China as technology and production move to the huge China market. Under the agreement, auto parts tariffs will be cut. General Motors/Shanghai Motors have already begun a joint venture. They are building Buicks at General Motors China. Production was to increase from 20,000 units in 1999 to 55,000 in 2000, to 100,000 in 2001. This agreement represents only a small fraction of China's potential demand for vehicles. The sale of vehicles could easily double each year for several years. In China, each new car sold probably represents a new car being driven every day (compared to the US, where an additional car in the family may only be driven when another one is not driven). Demand for gasoline will increase directly with auto sales -- and, for now, so will the demand for light, sweet crude oil on the world market.


Black Blade: Oil is depleting around the world and peak production could occur within the next 10 years. Third world countries like China will demand their share of oil resources as they continue to industrialize and the economy grows. Everything (economics, power, and money) revolves around "cheap" petroleum.

Blackjack
College Grads face "bleak" job market
Oklahoma, Aug. 17 (Bloomberg) -- For three years, Doug Carpenter studied finance at the University of Oklahoma with the goal of working in the energy industry as a financial analyst. Job cuts and trading losses at companies such as Dynegy Inc. and Williams Cos. derailed those plans.

``I gave up looking for a job in April,'' said Carpenter, 22. He graduated in May with no employment lined up.

Energy traders, once the biggest recruiters at universities in Texas and Oklahoma, are canceling hiring programs this year, forcing thousands of college students to switch career plans or take lower-paying jobs. Dynegy, Williams, Enron Corp. and Reliant Energy Co. stopped hiring on campuses after a 70 percent tumble in energy trading volume this year wiped out profits.

The energy industry's hiring freeze comes as graduates face fewer prospects in fields from computer services to finance. U.S. unemployment rose to an eight-year high in April, and U.S. companies have cut 1.71 million jobs since March 2001. About half of college graduates find jobs by the time they leave school, down from 65 percent a year ago, according to CollegeGrad.com, an Internet site specializing in entry-level jobs.

``A year ago, energy companies were hiring many folks out of college,'' said Bernard Weinstein, director of the Center for Economic Development at the University of North Texas. ``With the economy and no new jobs, it's going to be difficult for the next 12 to 18 months.''

Fewer Recruiters

Nationwide, the number of companies hiring at colleges and universities fell 36 percent last year, according to the National Association of Colleges and Employers. At some schools, the decline has been more than 40 percent, the association said.

In the energy industry, the outlook is bleak.
________________
Buddy can you spare a Billion?
Blackjack
Worst Credit stress since Great Depression
http://www.denverpost.com/Stories/0,1413,36%257E33%257E801767%257E,00.htmlSunday, August 18, 2002 - U.S. corporate debt nearly doubled in the past five years - to $3.9 trillion by the month of May.

U.S. consumers spent that same amount on all services - from haircuts to dog grooming - during 2001.

The burden, already buckling many companies under the load, threatens to send the nation into a prolonged recession.

"We're looking at an economic heart attack in front of us," said John Riley, president of Cornerstone Investment Services, a money management firm in Providence, R.I. "We're faced with owning up to the excesses of the late 1990s."

In 1997, U.S. corporate debt - which includes bonds issued by companies to finance their activities as well as bank loans - was $2 trillion, according to the Bond Market Association.

Moody's Investor Research now says the nation is in the worst credit stress since the Great Depression of the 1930s.
misetich
Deutsche Telekom to post highest ever loss in H1 - report
http://www.ananova.com/business/story/sm_652672.html?menu=Snip:

Deutsche Telekom AG will post its highest ever loss in the first half of 2002, reported Focus magazine, citing no sources.

The loss will be higher than the full-year net loss of 3.5 billion euro in 2001, said the magazine, citing two reasons.

The consolidation of VoiceStream has led to a loss of 3 billion euro, while Telekom has also had to revalue its stake in France Telecom SA to the tune of 600 million euro, the magazine said in an article to be published tomorrow.

Telekom will report first-half results on Wednesday.

**********
Misetich

The telecom debacle - How far reaching are the effects of this multi trillion fallout? Stockholders, bondholders, investment banks - the domino continues as earnings and cashflow wanes for these corporations and debt renewals, debt service revolve daily

Got gold?
misetich
Saudis Cry Foul over U.S. Sept. 11 Lawsuit-"This is an act to extort Saudi money deposited in the United States and a way of meddling in the region," an official at Al Rajhi Investment and Development Corp, one of several Saudi banks named in the lawsuit, told Reuters by telephone.
http://abcnews.go.com/wire/US/reuters20020818_62.htmlSnip:

Aug. 18
� By Fahd al-Frayyan

RIYADH (Reuters) - Several Saudi banks and Islamic charities named in a lawsuit by families of Sept. 11 victims vehemently denied Sunday any role in funding terrorism and blasted the case as an attempt to extort Saudi wealth abroad.

The suit has sparked rare calls by commentators and newspapers in the kingdom to review traditionally strong Saudi-U.S. ties. Saudi Arabia has yet to comment officially.

Offended that the lawsuit named members of the royal family, including Defense Minister Prince Sultan -- the third highest official in the kingdom -- many Saudis accused Washington of putting pressure on the Gulf Arab state to make it conform with U.S. policies on Iraq and the Middle East.

In a civil suit filed in a Washington court Thursday, relatives of some 900 people killed in the attacks by hijacked jets accused three senior Saudi princes, several Saudi and other foreign banks and Sudan's government of funding Osama bin Laden, the prime U.S. suspect in the attacks.

The lawsuit seeks damages of over $100 trillion.

"This is an act to extort Saudi money deposited in the United States and a way of meddling in the region," an official at Al Rajhi Investment and Development Corp, one of several Saudi banks named in the lawsuit, told Reuters by telephone.

................
Some commentators in Saudi newspapers, which reflect government thinking, blasted the lawsuit as part of a wider campaign against the kingdom and called for a review of ties.

Khaled al-Dakheel, writing in London-based al-Hayat daily, seconded a call by al-Riyadh daily "that Saudi-U.S. strategic relations are at the forefront of ties that need reviewing."
.............
Al-Haramain Islamic Foundation General Manager Aqeel al-Aqeel said the campaign was aimed at the Muslim world. "They hope by doing this that they will pressure the Islamic world into accepting an attack on Iraq," he told Reuters.

He said Muslim charities named in the lawsuit planned to hold a meeting soon in Cairo to discuss a plan of action.
.............
"Naming Prince Sultan is the equivalent of saying J. Edgar Hoover was a communist spy," said economist Bishr Bakheet. "It is unacceptable for Saudis that such individuals be probed."

"Assuming the court proceeds with this lawsuit, the Saudi investment community, already in shock, will start withdrawing their money," he said. "People are really going to walk out."

Saudi investments in the United States are put at $750 billion
******************
Misetich

Its heating up - as the salvos are being fired by both sides-
Will the Saudis succumb to this tactic? Does this tactic (s) push Saudis toward hostility - closing their ties with Iran and Iraq
Can the US economy survive an Oil embargo from Iran, Iraq, and the Saudis? Will Venezuela's Chavez co-operate with US in that event?
Can the Ruskies be counted upon by the US to supplant Middle East Oil? and why should they?
Will Oil be priced in Euros? When?
Will Middle East money (US $) be converted to Euros - Gold?

Troubling questions -

Got gold?






misetich
Goldman Charged With Conflict Of Interest By Investment Banking Client Exec.
http://www.corporatefinancingweek.com/current+news/goldman+charged+with+conflict+of+interest+by+investment+banking+client+exec.aspSnip:
--Mia-Margaret Laabs


The former chief development officer of NorthPoint Communications, a company Goldman Sachs took public, is charging the firm with mishandling his personal account at least in part because the firm's private bankers were influenced by its investment bankers, according to today's edition of Private Asset Management, a CFW sister publication. Herman "Whitey" Bluestein, who claims his assets fell from $35 million to less than $100,000 during 18 months of management, has filed a complaint with the National Association of Securities Dealers alleging that Goldman provided bad advice by not properly diversifying his concentrated stock position. Additionally, he claims what he described as Goldman's leveraged buy-and-hold strategy resulted in substantial losses and unfunded tax liabilities. Bluestein also claims Goldman had an inherent conflict of interest by having its private banking arm oversee his portfolio as he believes the investment bank did not want company insiders to sell their stock. "Cross marketing translated into English is conflict of interest," Bluestein said.

In a separate letter to the Securities Exchange Commission, Bluestein is asking for an investigation into cross-marketing abuses between investment banking and private clients.
*********
Misetich
One suit after ANOTHER against investment bankers - There are more than a "few rotten apples" -

Got gold?
MO VER MEG
Waverider
To answer your question, please read the following:

http://www.gold-eagle.com/gold_digest_02/mcintosh072202.html

The salmon sounds great! Here in South Dakota we are stocking up on beef.

MOVERMEG
SWEET 16
(No Subject)
Good morning everyone.

Are you all writing letters? I hope so.

I just read the letters between Mr. Butler and Mr. Wolkoff at Mr. Cook's site. After talking it all over with Dad, boy am I steamed. I just sent Mr. Wolkoff the letter below and want to share it with everyone. I hope it isn't too long.


Mr. Neal Wolkoff, Executive Vice President

NYMEX/COMEX



Dear Mr. Wolkoff,



I am 15 years old and an investor (with my savings) in gold and silver mining companies. My Dad helped me start this account when I was born. I don't have a lot of money in it, but I add to it whenever I make money working (I mow grass every summer and baby-sit during the school year).



For the past 2 years I have been trying to learn how to study markets and make investment decisions. I use the internet to find interesting information. This morning, I read some information about letters between you and Mr. Ted Butler. I find this upsetting and sad. I think Mr. Butler's questions are fair and need to be answered. What seems interesting is that Mr. Butler asks some simple questions which could be answered easily, but no one will answer them. Does this mean you don't want him to know? If it is not bad, you shouldn't be afraid to answer. I worry that someone is forcing you to not do what is proper.



Mr. Wolkoff, I am an investor and have watched my account fall to less than half of where it was 2 years ago (30,000 down to 15,000), even though I keep putting some money in it when I can. Because I own this stock, does it mean I should not be writing to you? How else can I learn what is going on? I am not looking for inside information. I don't want to be in trouble like Martha Stewart.



I found an energy article where you said (please tell me if this is wrong), that large investors should not be allowed to influence the markets. Is this what is happening in the gold and silver markets? Mr. Wolkoff, you are a smart man and have an important job to do. Please help us out.





Yours Truly,

Sweet 16
(See, I am catching on Mr. Gandalf)




ps. I have pasted and underlined some of the article I was talking about below.





Statement of Neal L. Wolkoff, Executive Vice President
New York Mercantile Exchange
Before a Joint Hearing of the New York State
Senate Energy and Consumer Protection Committees
February 1, 2000


EX Market Oversight

At the Exchange, there are systems in place to ensure that, despite the fundamental forces in operation at a given time, artificial factors or manipulation cannot drive the prices of futures contracts. Our market surveillance and financial surveillance systems ensured orderly markets, including the most recent period of rapid price changes in the case of the heating oil and gasoline contracts.

Speculative position limits. Speculative position limits, or a limit on the number of contracts any one participant can hold in a single month or aggregated over all months, are an important facet of market oversight. The limits protect the market from the potential influence of large participants or concentration of positions.
R Powell
Lease rates
Good Sunday morning.
Kitco is still posting higher gold lease rates on its home page. A quick click on that gives previous daily lease fixes up to August 15 but not for the 16th. Our own link to the London Bullion Market gives daily rates through last Thursday but does not give Friday's number. Other sources offer no help as many refer back to Kitco.

I'm quessing this is another Kitco error of which we have seen many but it needs watching, especially as silver lease rates did rise nicely on Thursday.
Hopefully silver is about finished "retracting" from the gains she made after finally breaking through the 475-480 level which I then thought would hold as support on the way down. Wrong again. I do think gold has based (good Hamilton article this week on this) and is still safely bullish. This should add to the probability that silver has bottomed at about 445-450.
As mentioned before, I believe silver is now trading on technical factors often somewhat reflected in the COT. The long term trend of is now upward perhaps implying the fact that one day, in the not too distant future, supply and demand factors will assert themselves. When that happens, they will totally overwhelm technical considerations.

If anyone has any lease rate info that confirms or denys Kitco's numbers, please let us know.
The Indian prophet is talking of major price advances beginning next month for both metals. I have no knowledge of his methods for fortunetelling. Does he study the heavens or perhaps read entrails? Indian prophets, my foot! What do they know of the ancient art of reading the entrails of a freshly sacrificed Rhode Island Red under a new moon at midnight? Have they ever fought off coyotes or wolves, attracted by the sacrifical blood, during a dark, wind sweep night while the wind howls and clouds obscure the moonlight?

If buy-the-dips is the game plan, for physical and paper investments, this may be the time. Then again, maybe not, but my two cents goes to short term silver options on Monday. Physical is a much safer bet but mine is safely stored while the gambling game proceeds. Certainty? Only death and taxes that I know of.
Thoughts?
Rich
Boilermaker
Mutual Fund Redemptions
http://personalmko.fidelity.com/gen/mflfid/3/316184100.htmlThe Fidelity Magellan Fund is the largest (I think) of all the mutual funds. Here is the Fidelity Magellan Fund's prospectus part that speaks to redemptions (selling of ones shares in the fund).
You will note that the next to last sentence below says "Redemption proceeds may be paid in securities or other property rather than in cash if FMR determines it is in the best interests of the fund". I believe nearly all funds have this feature. It means that when the music stops and there are no bids for the stocks which the fund holds, you will get envelope containing the worthless shares and/or a used piece of equipment from their office.

Snip;
Selling Shares
The price to sell one share of the fund is the fund's NAV.

Your shares will be sold at the next NAV calculated after your order is received in proper form.

Certain requests must include a signature guarantee. It is designed to protect you and Fidelity from fraud. If you hold your shares in a Fidelity mutual fund account, your request must be made in writing and include a signature guarantee if any of the following situations apply:

� You wish to sell more than $100,000 worth of shares;

� The address on your account (record address) has changed within the last 15 or 30 days, depending on your account, and you wish to sell $10,000 or more of shares;

� You are requesting that a check be mailed to a different address than the record address;

� You are requesting that redemption proceeds be paid to someone other than the account owner; or

� The redemption proceeds are being transferred to a Fidelity mutual fund account with a different registration.

You should be able to obtain a signature guarantee from a bank, broker (including Fidelity Investor Centers), dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee.

When you place an order to sell shares, note the following:

� If you are selling some but not all of your shares, keep your fund balance above $2,000 to keep your fund position open ($500 for fund balances in retirement accounts), except fund positions not subject to balance minimums.

� Normally, redemptions will be processed by the next business day, but may take up to seven days to be processed if making immediate payment would adversely affect the fund.

� Redemption proceeds (other than exchanges) may be delayed until money from prior purchases sufficient to cover your redemption has been received and collected. This can take up to seven business days after a purchase.

� Remember to keep shares in your fund position to be eligible to purchase additional shares of the fund.

� Redemptions may be suspended or payment dates postponed when the NYSE is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC.

� Redemption proceeds may be paid in securities or other property rather than in cash if FMR determines it is in the best interests of the fund.

� You will not receive interest on amounts represented by uncashed redemption checks.



USAGOLD / Centennial Precious Metals, Inc.
The acquisition of knowledge is a man's gift to himself.
http://www.usagold.com/cpm/abcs.html

ABCs of Au by MK

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

shades
coincidence
I wonder if there is anything to go by when kitcos and london bullion market lease rates are only current to thursday and Jim Sinclairs response to an email that " Monday will tell "?
Waverider
Siege Engine
Gold above $300.00As the Great Wizard was in The Valley of the Clouds and The Council was deep in thought, a new plan was in process...but of course it would need the approval of The Council. It seemed there were now two major challenges...the first was overcoming the despair that had infiltrated the hearts of the Knights. Strengthening their hearts would be the responsibility of The Council - they would reiterate The Moral Law of the Goldbugs which would renew and compel them to be in complete accord with Sir Howe, so that they would follow regardless of their lives, and be undismayed by any danger or obstacles. The Council would review with their Knights the following key deliberations: (1) Which of the two sovereigns is imbued with the Moral law? (2) Which of the two generals has the most ability? (3) With whom lie the advantages derived from Heaven and Earth? (4) On which side is discipline most rigorously enforced? (5) Which army is stronger? (6) On which side are officers and men more highly trained? The Council inherently knew the True answers to all of these questions, but they also knew the Knights needed renewed nourishment with this knowledge.

The second challenge was to develop a strategy for taking the remaining castles. Lady Waverider contemplated the options and set forth to present two strategies to The Council. They would dissect the plan in microscopic detail for the quality of their decision was liken to the well-timed swoop of a falcon which enables it to strike and destroy its victim. As per the great military strategist Sun Tze, there are not more than two methods of attack in battle - the direct and the indirect; yet these two in combination give rise to an endless series of maneuvers. Her strategy combined both - she would suggest the use of spies to penetrate the enemy. Two types would be employed...first converted spies - some of the captured enemy who had valuable knowledge had capitulated and joined the army of Goldbugs - they would be used to acquire further information and would plant local spies in many of the castles. Lady Waverider would also offer herself to be a spy to infiltrate the enemy castles and to bring back what news she could from the enemy's camp. Her plan was still subject to approval, and despite it seeming flawless, it was terribly dangerous. She belonged to the local dance entourage which performed in various castles during celebratory events. Because of her political affiliation she had not joined in the castle performances. She would dance in the next to celebrate the autumn harvest on the 3rd full moon and, along with the other dancers, intoxicate the army with their music, their movements, and with wine. Then...she would administer the true toxin - tincture of hemlock to the gate guards! The timing must be perfect so she could leave the castle with the dance ensemble before anyone was aware of the deadly poison. A predetermined sign, the cry of a night owl, would indicate that her mission had been accomplished and would signal the Knights to commence their siege of the castle...
Waverider
MoVerMeg
Got it!!! Thanks!
Aristotle
Exploration of Sierra Madre
I noted your comment yesterday, and acknowledge that this has been a regular theme with you. Somehow I've never gotten around to chatting with you about it in the detail it deserves. I think the topic and outcome would be instructive for all Gold advocates, even thought the topic is silver. The parallel with Gold should be obvious. You wrote:


"what if ONE country decided to allow free coinage of silver?"


My first question: Realistically, why would any thoughtful and civilized country want to follow through with such a thing? Sure, superficially there may be some attractive inflation-busting notions among hyperinflation-prone countries, but that would be like putting someone in a small jail cell as a cure for a sprained ankle. Sure, the ankle will heal with the restrictions on mobility, but at what greater sacrifice?

Argentina tried to do a similar thing but with dollars in place of silver, and yet just look at the very predictable consequences (economic recession and a systemic collapse of the banking system) as the price they paid for arresting their inflationary tendencies through this ill-advised scheme. The money supply (and the attendant pricing) was ultimately too restricting for the patient to thrive.

My view, shared by many others who have given serious consideration to such things, is that it's a sad waste of useful resources to employ such things as silver in the manufacture of national currencies which merely symbolize the monetary unit and give it portability without losing its monetary pedigree while passing through the hands and pockets of any NON-banking entities. (By contrast, bank-to-bank transfers of money don't require this special physical quality assurance because the pedigree is never under question if the money doesn't actually leave the house.)

I realize that last bit was an ear full (and a mind full) but please give it some thought until you grasp it. At this point, I'm not so adamant that you agree with it (yet) but rather that you merely comprehend the meaning of what is being set forth.

If you'll then recognize and accept the fact that vastly more money exists in the form of "in house" digital/ledger bank money than as physical currency money, then the folly of tying up valuable resources in the manufacture of currency presents itself as an argument better than any other I could possibly make on the point.

To mix up a physical commodity (Gold, silver, or whatnot) in the monetary realm is only to cheapen the nature of that physical thing. Through the normal and "innocent" banking process, the commodity is effectively INFLATED in supply and at the same time SOLD SHORT by everyone who takes out a loan of money to buy something.

Simply put, to have Gold or silver be employed as monetary currency is to ask the world to join en masse as short sellers in conjuring an inflated supply (through a feeble delusion that aggregate loan contracts to deliver future is as reliable wealth as physical already in hand.)

Do you think I'm missing the boat? Before you answer, please bear in mind that this is a discussion about the real world as it is, not about our own petty desires about it *could* be if only we sat upon God's throne all powerful to "make it so."

Gold. Get you some physical Property. --- Aristotle
slingshot
Waverider
Siege EngineYepper, the story is heating up. Wine, women and song. Deadly combination for any soldier. :0)

Slingshot--------------<>
Siochaina
Off for Vacation
Well the last few business trips I took....gold went up nicely....so I am hoping my vacation in Vermont mountains leads to same

And for good luck...just added some more gold!!!
Mr Gresham
Fleck
http://money.msn.com/content/p28324.aspEnjoying his bully pulpit, on Cognex' CEO candor (good), Glassman (bad) and the general view as things deteriorate.

Did anyone put up a Mauldin link on Japan-style deflation? I'll put that here next; it was in this window before, then another click took me out of there somehow...
Mr Gresham
Mauldin on US/Japan
http://www.2000wave.com/article.asp?id=mwo081602Looks good, but I gotta get outside in the sun! (NM in the hammock, after completing half of day's exercise -- BB needs a live "fish cam" so we can watch the whole of his exemplary lifestyle ;)

Lady Siochaina -- enjoy Vermont! I'm on the verge of probably declining an invite there for next week, so I'll expect a full report when you're back ;)

I've read incompletely here since 8/9 -- frustrating! -- all the Saudi news, and Belgian's been hot, too -- even the return of -- shock! -- DIALOGUE! (Thanks, Ari)

I learned of the demise (heart disease) this week of an acquaintance (via e-mail exchange) whose work I greatly respect. Two months older than I. Needless to say, aside from sadness, health has been on my mind. Walking the paths of my old summer camp last month, in my now-quite-middle-aged body, has set me wondering just what goals are achievable. (As usual, I will probably over-do some things. But this is a fight for survival, and I face the opposition in the mirror each morning.)

LIVE!!! -- to enjoy ALL of your Golden blessings...
MarkeTalk
Mahendra Speaks! But Does Anyone Listen??
www.mahendraprophecy.comOn Friday, a client of mine from New York (yes, there are gold bugs in New York City, believe it or not) told me about an Indian guru/mystic named Mahendra Sharma. He also told me he has been making some interesting predictions about the markets and world events. In particular, Mahendra is saying the prices of gold and silver (especially silver) will take off after September 2, 2002 and never look back. He gives no explanation other than the stars. While I don't believe in astrology, in my last post (message #83043) I gave other reasons why I believe the upcoming month of September will contain more than a few "upsets" in markets and world politics, thus pushing gold (and silver) way up.

Question: Does anyone know what this guy's track record is? If he is right for whatever reason, then we have just 14 days to find out. Finally, another gold buyer called me on Friday and he lives in New Jersey. He is an Orthodox Jew who told me to watch the price of gold beginning on August 31st, saying that a geopolitical event could take place in the Middle East. He had his own methodology of arriving at this date. Needless to say, all methodologies aside, I believe we are standing at the forefront of moumental global events which, in hindsight, will shock us.

Got gold? If not (or not enough), don't wait for world events to compel you to act! Call me here at Centennial on extension 102.

GC
mikal
@MarketTalk
It's good to hear from you. I have observed the predictions of the self-proclaimed Indian "astrologer and prophet", who is not in a "guru/mystic" in any traditional sense. From the postings on various gold forums and the man's own website, I have seen great discepancies. For example, since last year, at least, he has called for any specific and general metals price movements, that were not right even in a general time frame. This summer, he repeatedly revised his price predictions, and missed almost every time. Another area he touches, in an even more vague and general way, is the stock markets, again dismal, IMHO. His website is where he sells his books and fails to show the needed educational background in India, (an absolute minimum requirement).
R Powell
Mahendra
I mentioned and questioned Ma(hen)dra's prophesies and methods earlier today (83227).
I haven't verified his track record but have heard his name mentioned repeatedly in different places. Some claim he has been correct in past predictions but, if you give me enough questions, and a choice of only two opposing answers (like up or down), I'll bet I can get close to half of them right! Then if I constantly remind everyone of my correct predictions while refusing to ever even acknowledge the existence of my wrong answers, well. Actually, the fine art of entrail reading, when properly conducted, is close to infallible but I can reveal no more.

His prophesy, your predictions, technical projections, seasonal probabilities and long term cyclicals along with the basic fundamentals which usually support precious metal prices are all indicating higher. Sometimes patience is not easy to maintain but as much as I seek, I can find no reason why POS and POG will not become more precious. Hopefully Mahendra is a true sage!
Rich
R Powell
Prediction
While on the subject of prediction, I'll venture out on a limb and make some.

I'll portend that the POG will be higher than the price of palladium before the end of this month. I'll also predict that the Kitco lease rates for gold as shown on their home page this weekend are not correct. However, if they are correct, then I'll prophesize $350 pog by month's end.
Please remember only those predictions which prove to be correct! Thanks,
Rich
Slowman
Gold and Silver
Just another comment about Early Sept. It looks to me like on or about Sept. 9 we will invade Irac. Been following ships being sent to fight terrorism about 3 weeks ago, the U.S.A. getting a ship recently to transport tanks, amo etc. to be dumped there no later than Aug. 31. Its comming together rapidly and should sky rocket metals shortly. Maybe these other fellows are looking at what I see in short future!!!!
Trapper
Sir Aristotle
silver moneyYour exchange on the suggestion that sivler should be used as money was interesting. Do you know who was responsible for art.1 sec 10 of the US constitution? I thing the booklet he did says it all, but in out post constitutional America no one seems to care. Just let me get mine. God save the
republic because we don't have the stomach for it anymore.
Live small.
RJ
goldquest
Get Your Gold
http://www.almartinraw.com/column67.htmlbefore the politicians buy it all up and send it offshore!
silvercollector
Hope everyone had a great week-end.
I spent some time with my brother-in-law, the only man that I know who will tolerate more than 5 minutes of my PM 'speech'.

We had gone fishing in the morning, got back to the cottage around noon, immediately got into the brew-skies and naturally into the discussion of investing. Three hours into it he threw up his hands and proclaimed that I was a 'precious metal quack'. I asked in bewilderment what that was and he informed he it was an investor long in PM's for eternity.

I quickly responded , "I'm long right now, just in time for the bull".

He laughed, "I was long in 'tech' in the late '90's, long real estate for the last 2 years and now am climbing aboard oil & gold, where have you been?"

"I've been in T-bills, cash; waiting for things to clear"

He laughed again, "You're full of it John, you've been long gold since '87. The problem with you gold bugs is it's T-bills or gold, nothing in between. You guys are waiting to quintruple your money and I have already!"

I felt pretty beat up by then and suddenly the right answer slapped me, "Well I am glad for you Derrick, now the trick is to hold your wealth through the upcoming storm."

"You and your storms", he wailed.

"Well, you stay long your paper and I'll hold the gold and we shall see who crosses the finish line first, you're the hare and I'm the turtle, okay?"

We laughed together, the bet is on!!
cyberbat
an old nursery ryme
I also predict that:
Robber Rubin stood so tall;
But Robber Rubin had a great fall;
All the bank's money and all of his friends,
Couldn't put Rubin back together again.
mid-2003 or before
slingshot
Silvercollector
****************************Precious metal quack! ROFLMAO.

Quack, Quack, Quack. LOL :0)
Slingshot---------------Quack.
steady
Mahendra Speaks!
whether right or wrong i dont think he cares as long as his predictions get ink and his books get sold.
maybe he is somehow conected with dr.no and hung fat!
Rember this the usa is in the business of disinformation as well as information and if u have noticed the amout being spewed forth re iraq, who can really tell now whats real and whats fake> many times i feel as if im being used by them when i post info they have put out. whos aim am i serving? theres or mine? as an astute poster here said rely on your intuition even if it is a bit clouded righ t now it will never let you down. Try not to get caught up in there lil propaganda machine. Think for yourself and get as much gold as your own understanding allows you to to!
shades
ted butlers response to neil woltkoff
I cant beleive the utter pomposity where an honest taxpayer can ask legitimate questions to a civil servant, and that said civil serpent (sic) demands no further correspondence from his true employer. What a sham time ,to get mad people
goldquest
Neal Wolkoff
http://www.ite.poly.edu/htmls/bio_neal.htmNot a Civil Servant, just an Uncivil A$$hole!
goldquest
Wolkoff Believes In Transparency
Sierra Madre
Aristotle, with regard to your post 83233, address to me:

Thanks for the thoughts! I cannot reply unless I first clearly grasp what you are saying.

Your level of communication, may I say, is rather cryptic; I find I have to try to figure out what you are trying to say. Excuse this statement, it is not a criticism; to speak more clearly, your level of communication presupposes in me, a level of comprehension which allows for the omission of what to an informed reader, is superflous - but that is not my case.

I am sure you have something valuable to say, and I thank you for the message. Will work on your statements and reply sometime later.

Sierra
Sierra Madre
Aristotle - Sierra here again.

Sir:

If you care to, please restate your views in such terms as can be clearly understood by a fairly intelligent teenager.

Thank you

Sierra
Blackjack
Time is running out for Japan
Tokyo, Aug. 19 (Bloomberg) -- Japanese Prime Minister Junichiro Koizumi is backtracking on pledges to cut public-works spending and cap state insurance on bank deposits, leaving the country vulnerable to a further credit-rating cut, Standard and Poor's said.

S&P cut Japan's local-currency rating one grade to a fourth- ranking AA- in April, saying the government wasn't acting fast enough to reduce national debt or force banks to dispose of bad loans.

``A string of policy decisions recently announced by the Japanese government appear to backtrack on reforms,'' S&P said in a report. ``Further delays in implementing structural reforms could adversely affect the ratings.''

Regulators said last month they may exempt some bank deposits from a plan to cap deposit insurance next April at 10 million yen ($84,807) per customer. Takahira Ogawa, S&P's director of Asian sovereign ratings, said that may signal Japan is reneging on a promise to force banks to dispose of bad loans within two years.

``Japan has no concrete plan to deal with the non-performing loan problem,'' Ogawa said in a phone interview. ``If there is further slipping of the pace of structural reform, we might have to downgrade our expectations of the government.''

The yen fell for a second day, trading at 117.88 to the dollar at 1:36 p.m. in Tokyo compared with 117.65 in New York Friday. The yen also weakened as the Nikkei 225 stock average shed 2.6 percent, reducing demand for the currency to buy shares.

Bad Loans

Japan's 704 lending institutions had 52.4 trillion yen in bad loans at the end of March, 22 percent more than a year earlier, the Financial Services Agency estimates. Bad loans are slowing an economic recovery by discouraging banks from extending credit to businesses. Bank lending hasn't risen since October 1996.

Japan's decision to exempt some bank deposits from the insurance cap ``is a bit of a setback,'' Ogawa said. ``They have to tackle structural problems in the banking sector rather than easing incentives.''

The U.S. rating company cut its rating on Japan's yen- denominated bonds for a third time in 14 months in April, putting the rating on par with the Czech Republic and Israel.

Japan's national debt will rise to 693 trillion yen by March, the government forecasts. That's equal to 140 percent of gross domestic product and would be the highest debt burden among industrialized nations.

Time Running Out

Other recent policy decisions also show Koizumi is backing down, Ogawa said in the report. Japan's cabinet earlier this month approved a 3 percent cut in spending on roads, dams and other public works for the year starting April 1, 2003, less than this year's 10 percent reduction.

Koizumi's plan to open the postal system to private competition met such fierce opposition from fellow Liberal Democratic Party members that bills passed last month include tight restrictions on potential entrants to the mail-delivery market. Yamato Transport Co. Ltd. and other trucking companies have abandoned plans to compete with the government.

Koizumi defended the plan, saying it's a first step toward further reforms. Ogawa said he doubted whether more meaningful changes would follow.

``Even if they say this is a strategic handling, whether the time is left (to carry out reforms) is another matter,'' Ogawa said. ``Time will not wait for this government.''
__________
Japan debt 140% of GDP, US is about 60%, would Moody's downgrade
uncle sam? Deflation in the air.
Blackjack
Nikkei under 9,500 very bad for bank portfolios
TOKYO (Reuters) - Tokyo's Nikkei average was fighting to keep above 9,500 in early afternoon trade on Monday, with NTT DoCoMo Inc and other large-cap issues under pressure from selling in the futures market in thin trade.

The Nikkei was down 261.30 points or 2.67 percent at 9,526.83 as of 0412 GMT.

The Nikkei earlier fell as low as 9,499.51, breaking below the psychologically important 9,500 level for the first time since August 6.
_______________
Black Blade
Should Japan be rated below Botswana?
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020819a1.htm
Snippit:

The downgrading of Japan's sovereign credit rating in May to below Botswana and other less-developed countries embarrassed the Finance Ministry into demanding detailed explanations from Standard & Poor's, Moody's Investor Services and Fitch IBCA -- the three major international credit rating agencies that dumped Japan. In response, Moody's representatives testified in the Diet. S&P sent a detailed reply, and Fitch took its case public.

Did the world's second-largest economy deserve to be cut to this level?

Black Blade: Yes!

Black Blade
Yen Falls as S&P Says Japan Reform Delay May Hurt Credit Rating
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWB4RxWJWWVuIEZh
Snippit:

Tokyo, Aug. 19 (Bloomberg) -- The yen fell for a second day against the dollar and a third versus the euro after Standard & Poor's Corp. suggested it may cut Japan's credit rating, citing concern about delays in financial and fiscal reforms. ``The S&P report caused some yen selling,'' said Hirokazu Note, chief trader at Sumitomo Mitsui Banking Corp. ``A bad credit rating is bad for the yen.'' ``A string of policy decisions recently announced by the Japanese government appear to backtrack on reforms,'' S&P said in a report released today. ``Further delays in implementing structural reforms could adversely affect the ratings.'' ``Japanese stocks are at a horrible level,'' said Minoru Shioiri, foreign exchange manager at Kokusai Securities Co. ``Japan's economy is getting hurt by the U.S. slowdown, and combined with dropping stocks, the market focus may shift from bad U.S. news to bad Japanese news.''

Black Blade: Japan is a basket case. The yen is garbage, the stock market is in full retreat, the banking system is insolvent, etc. and they have the gall to ask if the country's debt should be downgraded? They are following on the heels of Argentina for chrisakes! Hmmm�

Black Blade
US investment banks take more risks
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185843808&p=1012571727183
Snippit:

Many of the largest US investment banks are taking bigger trading risks to boost their profits, according to the latest round of quarterly filings to US regulators. Value at risk (VAR), which estimates the maximum amount a bank would stand to lose in a particular period under certain assumptions, increased last quarter at Merrill Lynch, Morgan Stanley, Goldman Sachs and Citigroup, the companies told the Securities and Exchange Commission in their 10-Q filings. Last week, ratings agency Standard & Poor's warned that it may lower the AA- ratings of JP Morgan, Merrill Lynch and Morgan Stanley. The warning could lead to higher borrowing costs for the banks as investors become concerned about their prospects. It also suggests that the downturn in the investment banking business will continue.

Black Blade: Then there are is the derivative exposure risk that has gone largely ignored. I notice that banks are raising fees and charges on customers as well. Thankfully I don't use banks.

Black Blade
Corporate debt saps nation - Credit stress hits Depression level
http://www.denverpost.com/Stories/0,1413,36%257E33%257E801767%257E,00.html
Snippit:

Sunday, August 18, 2002 - U.S. corporate debt nearly doubled in the past five years - to $3.9 trillion by the month of May. U.S. consumers spent that same amount on all services - from haircuts to dog grooming - during 2001. The burden, already buckling many companies under the load, threatens to send the nation into a prolonged recession. "We're looking at an economic heart attack in front of us," said John Riley, president of Cornerstone Investment Services, a money management firm in Providence, R.I. "We're faced with owning up to the excesses of the late 1990s." Moody's Investor Research now says the nation is in the worst credit stress since the Great Depression of the 1930s. The result, thus far: Forty-two companies defaulted on $46 billion in loans during the second quarter, breaking the record in dollars, according to a July report by Moody's. The tally was double the volume during the same time last year. For the first half of this year, companies failed to pay $76.6 billion in loans, a 64 percent increase over the first half of 2001.

Yet as those defaults keep coming, the economy will continue to feel the pain, quashing investor and lender confidence and slowing hiring, expansion and new investment elsewhere. The fallout could even lead to higher monthly premiums on the average person's life, car or home insurance policy, said Mac Clouse, director of the University of Denver's Reiman School of Finance. The companies that don't default and struggle to pay down their debt may still do harm to the economy with cutbacks. Experts say more layoffs, fewer services and little new hiring will result as companies preserve cash for debt payments. "It's a bunch of dominoes that could collapse," said Mike Gasior, president of American Financial Service, which trains and consults for institutional investors. "All that money is going to have to be paid back."


Black Blade: As I have been hammering away at for quite some time now. It will get much worse before it gets better. As always, get out of debt, stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. Then hope for the best.

Blackjack
da Silva election in Brazil could be a major disaster
http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=2126U.S. Treasury secretary Paul O'Neill recently drew attention to the economic risks inherent in Brazil's more than $250 billion dollar international debt and caused great concern in the financial community when he said that "throwing the U.S. taxpayer's money at a political uncertainty in Brazil doesn't seem brilliant to me. . . . The situation there is driven by politics, . . . not . . . by economic conditions." A da Silva presidency would likely mean Brazil's default on its debts, which, combined with the crisis in Argentina, could cause immense economic problems in all of Latin America. But worse than the economic downturn would be the effect on the Brazilian people of a radical regime moving toward dictatorship and the risk of destabilization in the region from a Castro-da Silva-Chavez axis.

A da Silva regime in Brazil could soon be followed by the success of the Communist guerrillas in Colombia and the establishment of anti-American regimes in Bolivia, Peru, and Ecuador (where in January 2000 radicals toppled the government in a few days, with help from military officers recruited by Chavez, though their success was short-lived). Thus, by the end of 2003, the United States might be faced with anti-American regimes in most of South America.

If those regimes recruited only one tenth of one percent of military-aged males for terrorist attacks on the United States, this could mean 30,000 terrorists coming from the south. In addition, many Middle Eastern terrorist organizations, including the PLO, have long collaborated with Castro against the United States and its allies; they and the Iranian-backed terrorists of Hezbollah have hidden among the sizable Middle Eastern communities in Brazil and Venezuela.

Already Chavez is probably contributing millions, if not tens of millions, of dollars covertly to da Silva out of the estimated $70 billion in oil revenues that Venezuela has obtained since he became president. It is virtually certain that Castro is committing hundreds, perhaps thousands, of his skilled political and intelligence operatives to help da Silva win, and thereby achieve one of Castro's highest strategic priorities.
________________
Latin America is more than an economic disaster, it could be
a major security threat. Great article. All of South America
could soon be controlled by anti-American dictatorships.
When economies fail, people turn to desperate leaders with
desperate solutions. I think Brazil will default on debt
after the October election.
Belgian
Good Morning :
1/ Th Kissinger/Eagleburger-clan, do let us know, they don't agree on the Iraqi invasion. This to add more "confusion" to the embroglio/intrige. Matter of keeping more options, fully, open.

2/ The US' refusal to join the International Criminal Court has been enforced with (US) threats, to 150 US-allies, as to not come to their defence-assistance, when attacked .
IOW : don't force us to join the ICC or... (with or against us-ultimata). Polarization !

3/ Miningweb on WGC ??? Oh dear !
55 million $ glowed away. 2000 Gold demand was 4.000 tonnes and it was the intention to glow this demand up to 6.000 tonnes in 2005 !!! WAW a 50% demand-increase in just 5 years (10%/year) ???
The offer/demand gap of 1.500 tonnes (4.000 t - 2.500 t) was filled with 500 tonnes WA Gold + 500 tonnes scrap + 500 unknown tonnes (!!!). What would the shortage be in the glowing year 2005 with a supposed demand of 6.000 tonnes and unknown figure for offered, newly mined, Gold ? What a mess !!!
Chris Thompson :A desire to do more to promote gold investment. However (and here it comes-!) "investment" had to be looked at on a project by project basis rather than be subjected to a steady and prolonged push like jewellery.
There is much more dept behind this "compromise" than meets the eyes or ears !!! My intuition only says it in that single word : compromise !
Blackjack
Latest Brazil poll : da Silva leads all candidates
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020818/wl_nm/brazil_elections_poll_dc_1Serra is seen by Wall Street as best able to continue outgoing President Fernando Henrique Cardoso's free market reforms that attracted bumper foreign investment and brought economic stability to Latin America's largest country.

However the Vox poll showed center-leftist, former finance minister Gomes jumping three percentage points to 32 percent.

Front-running Luiz Inacio Lula da Silva, leader of the left-wing Workers' Party, also gained one point from the previous Vox poll to score 35 percent.

Support for former governor of Rio de Janeiro state Anthony Garotinho was unchanged at 9 percent.

The strong showing of the two left-leaning candidates so far in the election campaign has raised investor fears of a possible default on the country's $250 billion debt.

The sharp depreciation of Brazil's real currency, down nearly 30 percent against the dollar since the start of the year, is making it increasingly difficult to service the debt.

A recent $30 billion bailout loan by the International Monetary Fund ( news - web sites) provided only a brief reprieve from speculative selling of the Brazilian currency.

In a bid to ensure a smooth handover of power in January and calm markets, Cardoso is meeting all the leading presidential candidates on Tuesday to discuss the economic and financial situation.
____________
Brazil situation is looking to turn out really bad. Default looks
to be in the cards.
Belgian
@ Black Blade
Euroland's banks (AND insurances) are raising fees and charges on customers as well ! In Brussels you pay 2 � for a cup of coffee or tea (doubled in 5 years time)! Brent costing 27$/barril...etc ! But there is NO inflation, Madame de la Marquise...there is only deflation because IRs say so, Basta !
Now it becomes very visible in Euroland as well that there is a growing "offer" in real estate...no demand for higher pricerange categories.

Rumors (suggestions) for a possible U-V turn on oil-sanctions against Iraq ? Flood the market with Iraqi oil and take the wind out of the Russian resources sails (pricing power) ? All options are open as to maximise confusion. (any thoughts on this one BB ?)

Blackjack, will you please continue to update us on Brazil ?
Thanks.
Many banks are in trouble. Some are in very deep trouble indeed. Global Financial management (interventions) do all they can to avoid a (the) disaster.
Tangible property still very inconveniently heavy for its price ! Liked that "property", word, Aristotle !
Blackjack
Record Gold sales in Asia in July
HONG KONG (August 17 2002) : For the first time in 20 years conditions are right for individuals to invest in gold and investors around the world are buying the precious metal again, led by the Japanese, a senior bullion trader in Hong Kong said.
And maybe more importantly, fewer are selling it.



"For the first time in 20 years, for the first time ever, I would recommend gold as an investment," said Tony Dobra, director of Scotia Capital, told Reuters in an interview on Friday.
"Gold is liquid and flexible just ask any of those guys out there in Vietnam who want to buy a piece of land," Dobra said.
One could debate the issue in terms of developed and developing economic systems, but certainly gold is used and hoarded in many countries in Asia.



And it has no national allegiances.
"It is not tied to one country's fortunes," Dobra said.
Dobra is one of a growing number of gold bulls and conservative investors seeking investment security and capital preservation with traditional investment vehicles.



Kilobars are the favoured gold product in Asia, including Australasia, and a bar now sells for about US $10,000.
In recent years, 80 percent of gold offtake has been for jewellery manufacturing, with most of the rest used in industry.
Scotia Capital, part of the London-based Scotia Mocatta Group of precious metal dealers and Canada's Bank of Nova Scotia, had a record sales week in third week of July.



"We sold 20,000 kilobars around the region," Dobra said.
"That particular week, all of sudden, everybody wanted gold all at once," he said.



Buyers included jewellery manufacturers in the bank's markets in North Asia, Hong Kong and south-east Asia, including Japan and excluding Indonesia.



Sales have slowed in August. July thus represented a peak in a trend which started in December and marked a significant change in the Asian market for physical gold.



"It all started in Japan when the Japanese started buying gold as an investment. That changed the market," he said.
In advance of a revision of Japan's banking laws on April 1, 2002, which cut the amount of bank savings guaranteed in the event of a bank's failure, Japanese bought physical gold with a small portion of their savings.



Gold's safe haven status was also given a boost by "pictures of the Argentineans hammering on bank doors trying to get their money," Dobra said.



"There was definitely a huge increase in investor demand for gold which has spread to other areas of Asia and the rest of the world as a matter of fact," he said.



The rest of world has chosen to invest not in physical gold, but in gold shares and in hedge funds that are now buying rather than selling gold futures, he said.

Blackjack
Asian banks could increase Gold reserves
SINGAPORE (Reuters) - Asia's reserve-rich central banks are potential buyers of gold to diversify their reserve assets, even as European central banks cut their holdings, a senior official of the World Gold Council said on Monday.

"Gold is back on the radar screens," said Ralston Thiedeman, head of the council's Asia-Pacific official sector, told reporters at the start of a five-day seminar on reserves management, which the council is co-hosting.

"In the last six to 12 months, central banks in Asia have become far more receptive to talk about gold than they were say a couple of years back," he said.

Asia holds over half of the world's near $2.0 trillion of foreign exchange reserves -- and it is mostly held in low-yield U.S. dollar assets, and generally less than five percent in gold.
Black Blade
Asia Central Banks Could be Gold Buyers
http://biz.yahoo.com/rb/020819/asia_gold_reserves_1.html

Snippit:

SINGAPORE (Reuters) - Asia's reserve-rich central banks are potential buyers of gold to diversify their reserve assets, even as European central banks cut their holdings, a senior official of the World Gold Council said on Monday. "Gold is back on the radar screens," said Ralston Thiedeman, head of the council's Asia-Pacific official sector, told reporters at the start of a five-day seminar on reserves management, which the council is co-hosting. "In the last six to 12 months, central banks in Asia have become far more receptive to talk about gold than they were say a couple of years back," he said.


Black Blade: As discussed here in the past. It only makes sense that Asian banks would increase gold reserves given the slo-mo collapse of Japan and their banking system. Many Asian countries still have fresh memories of the Asian Contagion, a weaker global economy and the extreme failure of Japan's economy should give pause to other countries throughout Asia. Increasing gold reserves is only common sense.

Socrates964
Disinformation on Brazil
http://br.news.yahoo.com//020818/16/7pih.html

Segundo o Datafolha, Lula tem 37 por cento das inten��es de voto, contra 27 por cento de Ciro Gomes. Serra aparece com 13 por cento e Garotinho, com 12. A margem de erro � de dois pontos percentuais.

Interesting that Voxpopuli showing surge in rating for Ciro Gomes that is not substantiated by other polls. Folha de S�o Paulo latest actually showed Ciro down from 28 to 27 and Lula up from 33 to 37%.

Seems that the US press is serving up the usual fare of Lula as Communist bogeyman. The truth, that can be gleaned from reading any of the main Brazilian newspapers, is that no president governs without the support of Congress and the Workers' Party doesn't have enough seats. As such, the Southeastern business elite has already decided that Lula is far less of a threat than Ciro, who is genuinely volatile and backed by the corrupt Northeastern elites who are far less likely than a PT-coalition to stick to any kind of fiscal rectitude and far more likely to plug any holes in their budgets by taxing the corporate sector even more. This point was made by Olavo Setubal, head of Ita�, Brazil�s 2nd largest (and probably the best-managed) banking group.

If anything, Brazil under Lula would probably resemble Italy under the Olive Branch allliance of the PDS and the left of the former Christian Democrats. The left wing of the PT would no doubt be a pain in the ass, but would have little input on the important decisions.

The idea of a red tide creeping over LatAm is a 1950s Macarthyite fantasy, although admittedly, these seem to be back in fashion up there.
Black Blade
Re: Belgian � Oil


Just a couple of quick thoughts. First, Iraq has about $8 billion in Soviet ear debt to repay to Russia. They also just signed a $40 billion economic agreement with Russia this past week. Why not repay the debt with oil? They have found ways around the UN sanctions before. Second, they still send truckloads of oil through Jordan despite the UN sanctions. Also in spite of disputes with the Syrian's the Iraqis are likely to send oil through that border as well. Russia has already reached peaked production in 1988 and has yet to come close to those previous record levels. Even so, the Iraqi oil flooding the global market is not likely as the infrastructure is antiquated and falling apart. Finally, there is simply no serious demand growth for oil now as the global recession deepens. That makes it difficult for any ME oil production expansion right now.

However, both Russian and Iraqi heavy sour crude is of lower quality than the lighter Saudi crudes. The lifting costs in Saudi are also much lower (about $2/bbl vs.$8/bbl). It should be noted that Saudi has been OPEC's swing producer over the years and they have more room to expand production than other producers. What is interesting now is what will happen if the recent lawsuit against Saudi royals, businesses, banks, and charities is allowed to proceed, it could trigger a mass exodus of not just Saudi investment in the west, but all ME investment as well. Some of those repatriated funds could go to physical gold and back home or into Swiss/Liechtenstein/Austrian vaults. "Interesting" times are ahead. Should the Saudis get punished the royals could be in a weak position and the country could fall to the Wahabbi radicals who really don't care about modern conveniences or wealth. The west could find that the country that holds about 25% of the world's oil supply suddenly withholds that oil from market and then either accelerate a world depression or begin the next world war for oil. I would think that the western peoples (particularly in the US) would demand war when they price of gasoline rises over $3/gallon. Anyway, those are my thoughts on most recent events. Cheers!

- Black Blade
Belgian
Corporate DEBTS ! Do the *** BILLION*** dance
If you owe your bank a few millions and things aren't going that smooth...YOU have a small problem ! But...if you owe the bank a few Billions...and profits aren't simply there...THE BANK has a major problem. Explained this morning to the public shareholders of Vivendi (and tutti quanti). Vivendi has to repay 4 BILLION euro by 2003 and isn't making any profit !! Aloha.
4 Billion euro = 400 TONNES of Gold !
For us, knowing the main figures (proxies) for Gold, we can place this 400 Tonnes into perspective. 4 Billion euro is much more difficult to comprehend. Anyway, the banks have serious problems and have to engage in massive rescue operations, DEBT ROLL OVER, to avoid panic. Banks and insurances are propping up their share valuations for this reason. But the realities of future declining profits will cause further (inevitable) detoriation. Defaults, massive defaults are luming on the horizon. This pessimistic outlook is already reflected in what is called "corporate culture". This state of mind, follows, after the period of plundering.

Corporate debts and a contracting economy are very dangerous for the general public's "confidence" in banks.
The negative spiral is in place. There is still a lot of "hope" for recovery left. False hope ? Make Physical Gold "your property" ! Much safer than any debt-loaded-paper. Billions of $/� tango-dancing with hundreds of Tonnes Gold as a partner.
Black Blade
JEWELRY IS CHINA'S THIRD LARGEST CONSUMPTION ITEM
http://www.zawya.com/Story.cfm?id=231u9236&Section=Markets&page=Commodities&channel=Precious%20Metals%20News&objectid=C9D5E773-8F38-11D4-867000D0B74A0D7C

Snippit:

BEIJING, Aug 19, 2002 (AsiaPulse via COMTEX) -- As the Chinese economy keeps growing and people's consumption increases, jewelry has become the third largest consumption item in China, after housing and automobiles. Meanwhile, China's WTO membership, lowering of tariffs, trade liberalization and pegging of Chinese jewelry market to the international one will forcefully prop up China's image as the world's jewelry processing and consumption center by 2010.

Official statistics show that China's jewelry industry grew rapidly in recent years and the total sales volume exceeded 80 billion yuan in 2001. Annual sales of gold jewelry increased from 0.7 tons 20 years ago to 207.5 tons in 2001, and China now ranks fourth in the world in gold consumption by jewelry production. The country's proportion of sales of platinum among the world's total has increased from 1 per cent to 52 per cent, reaching 1.3 million ounces; and the proportion of sales of diamond jewelry has increased from 0.5 per cent to 1.8 per cent, and the annual amount sold exceeds one million pieces.

Moreover, China's annual sales of ruby, sapphire, jadeite, pearl, and medium and low-grade gem jewelries have topped 20 billion yuan. It is expected that by 2010, the sales volume of jewelry in China will exceed 180 billion yuan, accounting for over 10 per cent of the world's total sales. Moreover, moderate opening-up of gold sector is inevitable. Sooner or later, the certificate system will be replaced by approval system; gold products retail chain stores will be established; and gold products retail enterprises will be allowed to open branches. Establishment of the Shanghai Gold Exchange symbolizes that China has made a key step on the road toward overall opening up of its gold market.


Black Blade: Once the Chinese quit stalling and finally open up free trade in gold, we should see a huge increase in gold buying among Chinese that could easily surpass that of India.

Black Blade
Malaysia Plans to Lead Usage of Gold Dinar for Trade Settlement
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Currency%20World&tp=ad_uknews&T=news_storypage99.ht&ad=world_currency&s=APWB4HRZiTWFsYXlz
Snippit:

Kuala Lumpur, Aug. 19 (Bloomberg) -- Malaysia plans to lead a push among Islamic nations to use the gold dinar to pay for external trade, so as to reduce reliance on the U.S. dollar, the economic adviser to Prime Minister Mahathir Mohamad said. Malaysia has proposed using the gold dinar -- which will not exist in physical form initially and will be defined in terms of an equivalent value in gold -- and that the difference in trade value between two Islamic countries be netted off by the transfer of gold. ``We are ready and would like to anchor this, and have already spoken to a few Islamic countries,'' Nor Mohamed Yakcop told reporters. ``We expect to start this by the middle of next year.'' He declined to identify the names of the countries Malaysia has had discussions with.


Black Blade: The Islamic world is showing us the way by returning to the "gold standard". This could put a new wrinkle on international trade and encourage the purchase of official sector gold in and out of the alliance for settlement. This would be especially "interesting" if it applies to oil sales. There is simply not enough gold in the world at current prices. Hmmm�

Belgian
Thanks BB
BB: Lawsuit against Saudis: Misetech posted the figure of 100 Trillion (with T) damage payment ??? This, when Saudi (official) money in the US is only 690 Billion (with B) ???
First the holocaust victims, now those who claim to be descendants of slaves and WTC victims, claiming huge damages. What's going on ? Creation of more and more "debt" obligations.
Thanks BB for the insights.

Socrates964 : What is your speculation on the Brazilian final outcome and its consequences for the Americas ? TIA.
Socrates964
(No Subject)
Looks to me that Lula will win and form a coalition government with the PMDB (Itamar and Garotinho are campaigning for him, so he will probably carry Minas and Rio as well as Rio Grande do Sul). PSDB will probably split down middle into pro- and anti-Lula camps like in 1990, with Serra and FHC endorsing Lula and the grass roots migrating to Ciro. Such a government may be less corrupt than its predecessors (this may be naively optimistic). The army is pretty much a toothless beast these days and has received lots of toys from FHC to keep it happy, with the exception of a few conspirators who would never see the light of day if it weren't for Lyndon LaRouche.

Such an outcome would probably not be a bad thing for Brazil (unlike Ciro), but the US will hate it, although W's policy towards Brazil has been singularly inept. At the same time, you have to remember 2 things:

-Brazil is a relatively closed economy. Imports + Exports only about 12% of GDP - with exports to US only about 3% of GDP. Take, for example, the Brazilian fruit export industry - Brazil could probably have 20-30% of the world market, but its exports are non-existent unlike Chile and Equador, simply because it is so much easier to sell internally.

-a hostile stance by the US is unlikely to achieve anything other than to push Brazil into the arms of other trading partners -even if I doubt that they will get much change out of the Europeans on agriculture, who are preoccupied with integrating E Europe. Brazil nevertheless has growing markets for primary commodities in Asia (notably China). Brazil has always had strong links with Japan (1m ethnic Japanese in S�o Paulo) and the Chinese and Koreans have taken over whole districts of the city. The Malaysians are also big investors in logging.

Brazil has a major problem with $15bn of negative invisibles, but I imagine it will impose exchange controls of some kind if the IMF refuses a hearing.

What will be the overall impact - probably some mini-debt crisis, IMF taps turned off and low GDP growth for a year or two. I have no doubt, however, that Brazil will come out of this, probably in a stronger relative position because it has a large internal economy. I also see the US having so many problems at home that Brazil will probably become a side-show.

Lula is up in the polls because the Southeastern elite (including the bankers) feel that they can cut a deal with him, unlike Ciro who just shouts them down. Everyone seems to have more or less given up on Serra.

I would add that I expect Lula to win because for the first time, the media (Globo) is not supporting the right-wing candidate (Ciro Gomes). This probably has a great deal to do with the fact that Globo is in dire financial straights and only staved off bankruptcy with government money (BNDES loan), the quid pro quo was no support for Ciro.


This is a major change since the 1980s, the main difference IMHO, being that the private sector has invested real money in the economy, unlike the 1980s when they couldn't plan ahead due to hyperinflation and just turned out crappy products using 1950s plant.

If you recall the 1990 elections, Collor claimed that Lula would impose a major confiscation and then did precisely that himself. After the election, Lula admitted that he hadn't even dreamt of doing anything as radical. Brazilians haven't forgotten this.

I foresee a similar situation to Russia 1998 - in that when the ruble was at 6, you could hardly find any domestic products. The devaluation to 25 was actually very positive in that it provided an immense incentive to Russian entrepreneurs to start producing (similar logic applies to Argentina although its private sector is far less dynamic). I don't think the real will fall by anything like as much (perhaps to 5), since things are already seriously cheap here (probably 30-40% of the cost in Europe/US).

The other point is that the interests of the multinationals have diverged from the US. A lot of them have built state-of-the-art plants down here (and have avoided other LatAm countries like Argentina as Brazil was smart enough to offer tax incentives) - are they going to shut down and go home with Brazilian skilled labour costs going through the floor?

Black Blade
Gold In Free Fall
http://www.kitco.com/charts/livegoldnewyork.html
Gold is plunging at the open - now down $4.00. Hopefully this will shake out the speculators and shift more wealth to Asia tonight as they are likely to scoop up gold on the dips. The more rapidly gold can be ripped loose from the weak hands the better so a more sustainable base of support can be established. We still have a full day of trading ahead and anything can happen (ie dollar drops, stock markets sinks, fear ahead of tomorrow's trade data, etc.). Looks "interesting" so far.

- Black Blade
misetich
WRAPUP 1-Eurozone rebound gets another nasty German surprise
http://www.forbes.com/newswire/2002/08/19/rtr698885.htmlSnip:
By Alister Bull, European Economics Correspondent

FRANKFURT, Aug 19 (Reuters) - Fears for the euro zone's recovery mounted on Monday after the German central bank warned that the region's largest economy was still stuck in first gear.

A monthly Bundesbank report followed news from Italy and the Netherlands that had already highlighted the fragile state of the upturn, backing views the European Central Bank may need to go on the offensive and cut interest rates again this year.

"There is no doubt that the second quarter has been consistently surprising on the downside," said Julian Callow, chief euro zone economist at CSFB in London
.............
Revisions to U.S. growth and a much weaker than expected performance of 1.1 percent annualised in its second quarter had raised the alarm on both sides of the Atlantic.
***********
Misetich

From continent to continent global recessionary winds pick up speed

Got gold?
MO VER MEG
Belgian
Everywhere I look, I see compelling reasons for major gold accumulation.

The latest (after Japan and South America) is the huge Saudi law suit. What an opportunity for them to begin dumping USA holdings (AND DOLLARS). When they pack their tent and go home, it will be with tons of our gold in their camel caravans.

MOVERMEG
Aristotle
Sierra Madre, I apologize for the communication gap
You suggested to me, "please restate your views in such terms as can be clearly understood by a fairly intelligent teenager."

I'm not able to convince myself that I have the skill to more simply convey the essence of my monetary points. I guess there is a good reason that most central bankers are grey or balding!!!

Let me take another approach entirely. We'll just put my comments from yesterday on hold, and maybe come back to them when the time is right. For now, let me get the ball moving forward with an simply but vital question for you on this issue.

What purpose(s) would be served by a country deciding "to allow free coinage of silver?"

--- Ari
Au-some
Gold Education
http://www.aci.net/kalliste/gold_index.htmAm currently reading this work in progress. Some of you out there may also find this useful.
Cavan Man
MO VER MEG
Hello. Been gone awhile. Could you please elaborate on the Saudi lawsuit?
TownCrier
Multiple-currency relative price graph for gold during 2002
http://www.usagold.com/wgc.htmlThe US dollar has clearly emerged as the weak sister, as you'll see in this latest weekly update from the WGC.

R.
USAGOLD / Centennial Precious Metals, Inc.
Put a Foundation Under Your Portfolio
http://www.usagold.com/ProductsPage.html

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

...Delivered to Your Door.

Call USAGOLD - Centennial for Arrangements
1-800-869-5115

MO VER MEG
Cavan Man
Welcome back.

Please read:

Misetich #83223 for a little background.

One day soon I would like to ask you about "The Old Sod".

We visited a few years ago, Tipperary (my mom's relatives, 5 generations removed) and Ballyferriter (my dad's relatives, also 5 generations removed). Where is your domain?

MOVERMEG
Blackjack
Gold Bullion risk manager at JPM quits job
New York, Aug 19, 2002 (ODJ Select via COMTEX) -- (OsterDowJones) - Don Eckert, gold bullion risk manager at JP Morgan Chase in New York is leaving the company, he told OsterDowJones Monday. Eckert's last day is Monday.

Eckert said that his departure comes with mutual consent and fits in with the bank's downsizing initiative enacted in response to the slowing business levels in the gold division in the wake of the reduction in producer hedging.

"We've basically lost a good portion of our business through the greatly reduced producer hedging levels out there, and so the bank is cutting back personnel in the area," Eckert said.

"We're still offering the same services as before, there's just no need for the same amount of people anymore," he said.

The gold bullion risk outfit will now be headed by Neil Clift out of the bank's London offices, according to Eckert.
The CoinGuy
BlackJack
You've come up with several articles I've missed in the last few days. Some with pertinent Headlines. Wanted to thank you for keeping your nose to the ground.

ALL: Been hearing quite a bit of scuttlebutt about the WGC stepping into the physical market in the next few months to setup an easy way for Investors(Institutional, pension fund, IRA) to invest in the physical metal itself. From what I heard it sounds like a CEF type fund, but that is pure speculation. FWIW, could be some heavy physical buying. Keep your ears open.

The CoinGuy
TownCrier
RE: WGC initiative for easier gold investing
What could possibly be easier than making a toll free phone call and asking to speak with MK, George, Marie, or Jon?

United States 1-800-869-5115
Canada 1-800-294-9462
European Union 00-800-2760-2760
Australia 0011-800-2760-2760

For three decades thousands of investors have been satisfied. Give it a try!

R.
sector
Banks to link all ATMs in natl network
Yomiuri Shimbun August 19, 2002
The banking industry plans to integrate all automated teller machine and cash dispenser networks--which are currently operated independently by groups of major commercial banks and other financial institutions--into a single nationwide online system as early as January 2004, banking sources said Saturday.

Currently, major commercial banks with branches in major cities link their ATM and cash dispenser networks to enable customers to deposit and withdraw cash at any branch of the banks in the group.

Likewise, regional banks, headquartered in prefectural capitals, and second-tier regional banks--which used to be known as mutual banks--have their own networks of ATMs and cash dispensers.

The planned industrywide integration of online networks will provide customers of five bank groups with fee-based round-the-clock online services to withdraw or deposit cash and remit money to other financial institution in the groups, the banking sources said.

The five groups, including commercial banks, regional banks, second-tier banks, trust banks, long-term credit banks and the Shoko Chukin Bank (the central cooperative bank for commerce and industry), have agreed to join hands to develop a system that will make their respective online networks compatible with one another.

The industrywide system will also upgrade 24-hour ATM operations at convenience stores, allowing customers of a greater number of commercial, regional and second-tier regional banks to access retail banking services through such outlets.

The national federations of shinkin banks (credit associations), credit unions, labor credit associations and agricultural cooperatives are considering participating in the ongoing joint development project of the five bank groups, the banking sources said.

The banking industry shortly will begin a joint project to work out details of the planned industrywide 24-hour online system.

ATM systems are already linked between commercial banks and regional banks, but group-to-group online services are limited to the period from 8 a.m. to 9 p.m., even on weekdays.

Once the new round-the-clock online system is launched, customers of any group of financial institutions will be able to use ATMs anywhere in the country, regardless of the type of bank. Similar systems are already in place in the United States and other countries.

For their part, financial institutions that will be linked to the new industrywide system can expect lower costs for the maintenance and operation of their systems.
+++++++++++++++++++++++++++

Another dot in the picture of a complete nationalization of all Japanese banks.
Such a nationalization will include a significant devaluation in order to rescue the banks from crushing debt. The newly designed currency has already been announced as a protection against counter-fitting...yeah...RIGHT.

The US, Canade and Mexicao will harmonize their currencies in tandem.

This is the hard-to -believe conclusion from connecting the various dots.

IF there is a non-zero probability of the above happening, then one is obligated to acquire physical metal as a rational protection.

TownCrier
The CoinGuy, WGC initiative for "easy" gold investment
http://www.usagold.com/ProductsPage.htmlIn other words, let's hope the WGC doesn't waste a lot of their own precious time and resources trying to reinvent the wheel. It just doesn't get any rounder than this (i.e., calling Centennial toll free). Know what I mean? Real gold, real easy.

R.
Belgian
Frustration !
How "frustrating" it must be for goldminers to see evidence of increasing Gold Accumulation by various groups of smart, hoarders of the Physical Gold, while the derivative Gods are holding the price of their underground product in the derivative-fist ! Goldminers already producing 1.500 Tonnes of Gold/year, in *deficit* to the demand (4.000 -2.500). This when their precious product (GOLD) is to be distributed, globally, for almost nothing and therefore almost profitless for most miners . But we don't hear these miners complaining !!! Funny isn't it.

POG minus 2% and IRs rebounding from their lows. Derivative relationship.

Socrates 964, thanks for the comprehensive vieuw on Brazil.
Henri
No No Spot!
I said jump! Not Roll over...aaarrggghhh!
Bad dog!
Aristotle
Hey Belgian, how about if I add to the miners' "frustration"
I can deposit my physical Gold in an account to earn interest!!! Ha ha ha... it's that same old Money Game.

My best to you!

Gold Property. Own you some. --- Ari
JCTex
Black Blade (8/19/02; 06:42:01MT - usagold.com msg#: 83274)
weak hands in the gold marketThere is an old Will Rogers saying [I can only hope to come close] that reminds me of folks trying to buck this tide in the paper price of gold:

There are three kinds of people
[1] Those that can learn by reading.
[2] Those that can learn by observing.
and
[3] Those that just have to pee on the electric fence.
misetich
Yen Falls After S&P Suggests It May Cut Japan's Credit Rating
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWFSIhTCWWVuIEZhSnip:

Japanese regulators last month said they may exempt some bank deposits from a plan to cap deposit insurance. The move would do less to discourage bad loans, which rose to 52.4 trillion yen in March, up 22 percent from a year earlier, and are weighing on Japan's recovery from its third recession in a decade, analysts said.

Japan ``needs to quicken changes to the banking system to get the economy moving there,'' said Murray Gunn, who helps manage $120 billion at Standard Life Investments in Edinburgh, Scotland. ``This is a reminder to the market'' and is hurting the currency.

`Further Warning'

S&P cut the rating on Japan's yen-denominated bonds a third time in 14 months in April. A cut by one level from the current AA- rating would put Japan on a par with Botswana and Kuwait.

Japan's national debt will rise to 693 trillion yen by March, the government forecast. That's equal to 140 percent of gross domestic product and would be the highest debt burden among industrialized nations.

...........
``We still think that the U.S. dollar is on a pause before its next leg down,'' said David Mozina, a market strategist at Bank of America Corp. ``We still look for weakness in the course of this quarter.''
*********
Misetich

What a dilemma - Japan's Central Bank wants a weaker Yen supposedly to protect trade - though if your main asset was in US $ you would want to protect that by printing yens and supporting the $ -
Central Bankers are fighting the market - they can't win -

Got gold?



Black Blade
Re: JCTex

It is "interesting" to see the speculators get shaken out. This is really not much different from what we have seen before. They sell and the POG drops while Asian investors come in and scoop up gold. We were here in this same position a couple of weeks ago. Some of these speculators switch between sectors trying to catch the next trend. It is sort of like a dog chasing its own tail. Funny thing is corporate profits are down, unemployment is still high, consumers are spending less, SEC probes are in high grear, etc. There are plenty of reasons to keep a good position in gold during these times of uncertainty. I think a lot of people could get sucked into the markets - like you said - "pissing on an electric fence". Cheers!

- Black Blade
Paper Avalanche
@ sector & the round table
Anyone want to bet that we will have in the US a new currency to replace the dollar in 18-24 months and, get this, it will be tied to the price of gold much the same way the Euro is?

I think that the world at large will move to a gold backed currency standardization the way that it was at the turn of the century. A country's currency will be relative to a standard measure of gold (i.e. $20 = 0.9675 oz. gold).

I open myself up to ridicule. Take your best shot.

Paper Avalanche

misetich
Saudis want to withdraw investments from US
http://www.arabicnews.com/ansub/Daily/Day/020819/2002081910.htmlSnip:

Saudi Arabia-USA, Economics, 8/19/2002

Saudi businessmen have called for withdrawing the Saudi investments from the US in case the US will continue and allows judicial lawsuits proposed by some US lawyers against Saudi banks and charity societies, stressing that this case is deliberate and stands against all Saudi interests.

News reports said on August 16 that the case which will be filed by families and relatives of victims of September 11 attacks in the US targets 99 Saudi establishments, organizations, and individuals.

The director of "Bekheit " center for the Saudi financial consultation said in statements issued on Sunday by the Saudi daily al-Watan that the acceptance of the American courts of the filed lawsuits asking for compensations estimated at 300 billion dollars to the families of the American victims of the attacks of September 11, will push all Saudi investors in particular and the Arab investors in general to get their sums out of the American banks, so as to avoid risks of these trial cases.

The Saudi Arab monetary fund establishment "Mu'assat al-Naqd al-Arabi al-Saudi" is to reconsider investments of the retirement and social insurance establishments in the USA, and to invest them in local or European markets which are more secure.

The chairman of the Saudi- German company, Suleiman al-Sayarri, stressed the need of withdrawing all Saudi investments because of the fact that the US markets have lost transparency, and because of the fears in the Saudi investor, besides the change in the position of foreign investors in the world towards the American stances which are not attractive international investors.
**********
Misetich

The salvos are continuing . Lets stay on this TRAIL - in the meantime Oil prices are soaring - Opec standing firm including Kuwait
Sell US $ assets and buying Euro's -
Oil priced in Euros?

Thanks ANOTHER and FAO for your guide - light years ahead of the pack- though we do miss the TRAIL chats

Got gold?

Belgian
OK Ari....
Let's put our stashes of physical Gold together, issue some more derivatives on it, only for those who still feel the urge to pee on electric fences with much higher voltage !

More, off ledger, papergold contracts together with more demand/uptake for physical Gold, getting cheaper with overvalued fiat that intrinsically depreciates, invisibly. Paper losses are rolled over or booked as expenses or simply not accounted for, in order to keep the boats floating. Arrangements for loss-compensations are not excluded and eventual big profits are simply to be considered as rewards for loyal co-operation with interventionists. How dare I even to suggest that this might be happening ?

A rhetoric question : How much "un-accounted" Gold is sold and circulating ? WGC and GFMS are to revieuw their statistics, together (resource-pooling) !
WGC: However,anti-trust legislation prevents the Council from talking about gold production and, of course, the gold price. So it cannot give a full picture of the gold market and there are some doubts whether, in the circumstances, this excercise is worth continuing. Oh dear.

And finally the last comment on The Council's "round wheel" kind of logic logic : WGC (insider) :It's investment that drives the gold price and the Council has to find a way of getting more fund managers interested in buying it.
It was *** ONE *** insider who pointed this out ! ONE real "glower" !

A mining industry scared to death of its own precious product ! Paranoia ? No, not exactly.
Aristotle
Paper Avalanche -- Thank you, your item is related
I won't take a shot, but I will ask you a question, especially if you are supportive of the move you've described, that is, "the world at large will move to a gold backed currency standardization the way that it was at the turn of the century."

At what specific price level would you be happy to see our government dictate the new "permanent" price of Gold to us?

And further, under this new fiat Gold Price Standard -- price decreed by Congress -- where then shall we run for wealth-preserving shelter when the growth of the money supply continues unabated as experience shows us it will?

Thanks in advance for your insight.

Gold. Getting some more as a simple advocate for the continuing trend toward a free market. --- Aristotle
Paper Avalanche
@ ari.... exactly!!
There is no law that can be passed that sets an effective and enforceable conversion rate between paper money and gold. I believe that we will go back to each country re-establishing a specific wieght of gold as an equivilant to a unit of monetary measure, not paper currency itself.
Aristotle
Whoo-hoo! Belgian, that is "PRICELESS" ! ! !
I never before gave it a thought that the WGC would be on thin ice over anti-trust waters. HA ha ha ah ah ahha hha ha ha!!

Someday I hope to shake hands with that ONE insider. About the only thing I relish more than seeing Gold's progress toward its market-reorientation (and physical-based revaluation) is to have these additional days to acquire it cheaply.

I'm quite sure of it... Derivatives are man's best friend, and I'm a Golden Retriever!!!

Cheers to ya!

Portable Property. Get you some. --- Ari
Belgian
NO, no, nohhhh Sir Paperavalanche....
Your suggestion is NOT at all that ridicule ! Remember "Gold Wars" by Ferdinand Lips ! But don't try any guess on eventual timing.

The combination of "absolute" silence on monetary fundamentals and the complete irrational behavior (virtual gold standard) of Gold for such a long period is strongly suggesting something "BIG". Not the slightiest indication of "what" that eventual big thing might be. That's exactly what makes it so plausable. Perhaps a strange reasoning...but it is all intuition coming from the observation of such a strong abnormal outlook/behavior, on Gold as such. We strongly focus on the mechanism of, quasi permanent, Gold interventions, but often forget to elaborate extensively on the underlying variety of reasons, WHY it is happening the way it is.

The controlling derivative leverage on financials as a whole, still proves to function impeccable. There is much complacency about the perfectness of this derivative management (interventionist) tool(s). But as we all know...all tools wore out and finally break down. Maybe, there already is a replacement under the carpet as a safety net. Strongly Gold connected ? Free, free-er Gold ?
Never, ever exclude the unexpected. Emperor dollar to be dethroned by oil, or deliberately stepping down (lack of further support) and leaving the empire (NWGoldO-?) to Lady FreeGold ? Who knows ?
Goodnight from Euroland.
Aristotle
PapAva, Congressional weights and measures
Thanks for the reply. Would you then envision Citibank and the like be restricted to the practice of Narrow Banking (100% cash reserves of deposits, lending only stockholders' subscribed capital,) or would we still have the banking business as usual -- fractional reserve lending?

This might be the single most important point to consider in any overall scheme to return to a VIABLE Gold Standard, so consider it well, my friend.

Gold. You know it's Propery. Anything else is a "stretch." (Get it? A s-t-r-e-t-c-h? As in, "inflation"?) --- Aristotle
Belgian
Goooolden retriever....
You forgot to add ~~~HEAVY~~~ on portable property. Let them keep throwing those heavy Golden bones...for us all Gold retrievers.
Aristotle
Heavy!
To lug around at three ounces per $1,000 it is quite inconveniently heavy.

Oh well, I guess we gotta take the good with the bad.



Wheels. Gonna hafta get me a dang ol' cart someday. --- Ari
steady
golden retriever!
i to saw todays action and made a beeline to retrieve some more portable property today, they where giving it away for alot less than its worth>
USAGOLD
Aristotle. . .
Your quote:

"I'm quite sure of it... Derivatives are man's best friend, and I'm a Golden Retriever!!!"

MK: You and alot of other people. We had a MAJOR day and the phones continue to ring as we head past the 5 o'clock hour. Gold clearinghouses (for the physical) are reporting strong business all day. I would not be surprised to see Hong Kong and Japan jump on this dollar price.
CoBra(too)
What's the Use of a Noose - Without a Neck?
Or what da Heck is the IMF trying to prove - except bailing out the doomed system and their main usur(pato)ers.

... It has been years now that our country - also known as the Latin American Switzerland - Uruguay, tried not to be one. A country - as we've been a bank with great beaches (something the Swiss don't really have - it is you're taken in by the Lac Leman and other li'l ole lacs).

Our banks are bankrupt, while our bankers are getting richer. Our government is governed - even while it pretends to govern.

GWB is sincerely shaken by the Uruguayan Drama, even if there are clear signs he can't point out the place on any map. Never the less financial bail is on its way - the destiny of the dolares is not really importante as the museum funds from the IMF are only meant to bail out our creditors.

As we are used to pay 4 dolares for every one dolar we receive through the IMF by way of JPMC & C, we multiply our debt like rabbits and seem to breed, work and even breathe for the benefit of being accepted in a globalised world - as serfs. Return the funds to the museum where they emanated from and get a life ...

We used to be a productive country. We now are reduced to only produce beggars, policemenn and emigrants. Our youth is looking to emigrate to countries, where several generations ago our great grandparents migrated from. Full circle ... Talking about tiny Uruguay ... the Switzerland of Lat Am - won't take this kind of debasement of their own productivity forever - (lightly and losely translated from Eduardo Galeano, Montevideo - a place no one in DC has ever heard of in reality)- and why should it?
Brazil, Argentina, Peru - Venezuela and Columbia for oil not drugs and even Chile on copper and all together now on steaks are lil' ol' chips in the dolares (some feel dolores) power play ... of the globalized crazed bankers - trying to prolong the utility of a dollarized in-equilibrium - of a crashing imperium.

Is it EU, Opec or even Nafta going against their $-masters as the countervalue is found out as paper weights vs real products - in the end who cares about a system of IOU's based on the premise of hollow promises of future taxation of a society, bankrupted by their own government and their federal reserve system.

Globalization in this context may become the ultimate obliterate surrogate for, you know - Take care of yourself - because nobody else will! ... some gold may help - see u - cb2

PS: Thanks G-Man

CoBra(too)
Bugles, for Beagles, Labradors and never King C's Cavaliers -
But forever Aris's ..."I'm a Golden Retriever!!!"

Brilliant -
Cheers cb2
- and forget derivatives - we're thoroughbred ...

silvercollector
Ed Bugos replies to Mark Lewis ('Fool's Gold)
http://www.safehaven.com/GoldenBar/GBR081802.htmExcellent review of gold's history, a must read for the novice.

Three questions arise from reading this article:

" At least two major devaluations in the dollar occurred in the 20th century; one occurred from 1933-1949, as you can see in the chart; and the other occurred from 1971 to 1980. In both cases, the dollar turned out to be worth less at the end of the period in terms of both gold & commodities than it was at the beginning.

As you can see in one of my favorite charts (above) of the historical progression of the dollar's value in the 20th century (assuming the rising raw materials prices over the long term imply falling dollar values), there are long periods of time when paper assets became worth more than commodities and real assets, or in other words, where raw materials prices fell in dollar terms."

Mr. Bugos graph depicts two periods in time where 'raw materials' went through great inflation, 1933-1949 and 1971-1980. Does someone know if gold followed a similiar pattern; obviously gold had it's major pop in 1979/80 but I guess the more accurate question is did gold track the 'raw materials' index during this time?

"From 1982 to 1997 gold prices stabilized between $300 - $500. From 1980 to 1985 it was a recovery in the dollar that explained gold's $500 point decline. The dollar index nearly doubled during that time. But when the dollar again lost a third of its value from 1986-1987 gold prices almost doubled, from just under $300 to just over $500. While it didn't decline much further after 1987, the dollar continued to hover near its trough until 1993/1994, when gold began its trek from about $330 to over $400 as fear grew for the dollar's inevitable demise."

While the 'strong dollar' policy has been in place since '95 gold has slid to 20 year lows. In the last 6 months the dollar has had a small decline and in keeping with the above the POG has had a sizeable gain. If it safe to say that gold inversely tracks the dollar's performance to a 'T'?

"If the message isn't clear, try this: gold should not go up in terms of the dollar simply because there are problems in Argentina, Corporate America, or the Middle East unless those problems undermine the value of the dollar. "

Excellent point; if the above holds water then the price of gold is simply (nothing is simple!) an (inverse) proxy to the value of a dollar. An article in the Globe and Mail today described the possible, if not probable fleeing of Brazilian capital to US treasuries. So the last question is if everyone around the US is 'blowing up' how does the US dollar fall? Further to this, how, when and why does the USD fall when it is the 'last man' standing?

Thanks.
mikal
US Dollar Index treading water
Oil closed at a not so crude price, just shy of $30! Will this week's inventory numbers come in high enough to bring this down? If so, dollars will be sold, rather than bought to buy oil. Dollars were certainly bought to lift banking and other shares, adding to those shifted out of gold positions and shares. And dollars were bought to buy US bonds again, further advancing the US$ Index. In the summer trading season, thin markets are also affected noticeably by pronouncements of peace-i.e. the Israeli withdrawal and voices of protest against Iraq attacks. Of course Saudis and Middle Easterners are not SUDDENLY going to sell US assets, they've been doing it for months, except that now, like the Japanese and others, they have much greater incentives, domestic and foreign. Where will the Dollar Index and oil osscillate, amidst the coming maelstrom of news and rumors, including anniversaries like Sept. 11th and Jewish holidays?
Black Blade
Market Wrap Up � Puplava
http://www.financialsense.com/Market/wrapup.htm

Snippit:

In a Recession

The leading economic indicators tell a story that many people already know: the U.S. economy is heading back towards recession. In fact, we may already be there. The latest government figures show that the economy grew at a 1.1% annual rate during the second quarter. That translates to a quarterly growth rate of a little over 0.25%. Given the propensity for revisions that always come later, and for the most part are less favorable, we probably are already in another recession. As we found out last month when the government revised GDP numbers for 1999-2001, the last recession was much longer and much worse than originally thought. The recession ended after the third quarter of last year. The final quarter of 2001 and the first quarter of this year showed robust economic growth as a result of two sectors: government and consumer spending. Increased defense expenditures, strong automobile spending, and a robust housing market were what led the economy out of recession. The combination of lower interest rates allowed consumers to refinance mortgages, extracting equity in the process, which helped to fuel additional consumption. Now that may be coming to an end.

Unless mortgage rates go significantly lower and housing prices continue to climb, allowing further equity extraction, the consumer may be tapped out. What policy makers don't know at this time is if the recent data on the economy represents a one-of-a-kind event or the beginning of a new trend. Job layoffs are still rising while hours worked in the economy are at new lows. Deflation in the economy may now be the Fed's greatest fear. Everywhere you look there are signs of deflation. In the manufacturing sector companies can't raise prices as global competition, especially from China, is a growing source of competitive pressure. In the financial markets the drop in equity values ($5 trillion) and the $525 billion in bond defaults over the last 18 months is a deflationary event in itself.

Possible Rogue Waves

The energy market is certainly one of these rogue waves. The oil and gas markets keep rising with the price of crude now approaching $30 a barrel. Natural gas prices are also over $3.25. With lower prices for natural gas over the last twelve months, gas well completions are expected to decline by 40% this year. The deceleration in drilling activity will get worse in the third and fourth quarter of this year. Even last year the peak in gas drilling output increased by less then 2%. The U.S. Energy Agency and the IEA estimate that demand for oil and gas are still growing, especially in Asia. With the energy markets so unstable producers have been unwilling to take on the risk of expanding the supply with the outlook for prices so uncertain. Even with higher prices there are many experts in energy that believe natural gas production in the U.S. has already peaked and is now heading into irreversible decline, similar to oil output in the U.S. which peaked in 1970. Fortunately for the U.S., a recession and a mild winter have helped the U.S. out of an energy crisis. Weather, more than economic factors, has been key in pulling us out of an energy crisis. But as the floods in Europe, the drought in the U.S. point to another irregular weather cycle. If the weather is mild this winter as it was last year, we may be able to get by one more season. However, add the uncertainty of war and the vagaries of weather and it is clear the U.S. is only one step away from its next energy crisis.


Black Blade: Oil prices are bouncing along just shy of $30/bbl and now with recent events and unfriendly statements in the US that are antagonizing our ME oil suppliers, it is very likely that OPEC will not increase production anytime soon. The higher costs of energy will impact the corporate bottom line. I just talked with some people in the petroleum side of the business and they say that drilling activity is falling off again and that new production of natural gas and domestic oil are going to fall off rapidly. I have discussed this before in the past and the possibility of a real shortage is looming perhaps late this winter to early spring. Meanwhile new economic data suggests that all is not well with the economy, and yet the stock market indices roared back to life. People should be very careful in these markets. It appears to be yet another setup as unsuspecting novices are drawn in only to be clipped. If you wish to be in the stock markets now, be very picky and keep an eye toward safety.

Black Blade
Credit-Card Scrutiny Hits Lenders And Threatens to Damp Spending
http://story.news.yahoo.com/news?tmpl=story2&cid=808&ncid=808&e=19&u=/dowjones/20020819/bs_dowjones/200208190006000003
Snippit:

A federal crackdown on credit-card lending is squeezing some lenders even before proposed guidelines take effect, and threatens to pinch consumer spending, The Wall Street Journal reported Monday. The new scrutiny is aimed at reducing a rapid rise in consumer debt and defaults. It tests the so-called subprime credit-card business that caters to customers with poor credit or low income, which grew quickly during the booming 1990s and is seeing its first economic downturn. Already, the government's attention has pushed some credit-card companies specializing in the subprime market -- estimated by one credit bureau at as much as 37% of credit-card loans -- to move toward increasing their reserve funds and change accounting and lending practices.


Black Blade: Cutting down more consumer spending eh? Also, retailers are reporting slower sales so it appears that the consumer is reigning in spending along with capital expenditures of corporations. That makes the recent "suckers rally" in the stock market that much more curious. Now those living on plastic should be getting a bit more nervous, especially since the new laws limit their ability to declare bankruptcy on credit card debt. As always, get out of debt, stash enough cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. And hope or the best.


sector
@Paper Av - The New American Dollar
It Will Be as you declare......convertible to gold at "n" percentage, likely 15%...as the euro.

The price? $NUSD35 per ounce [New US Dollars]. No gold for the "Old" $USD which have been devalued by 90% as the yen.

What will be the outside the US gold price? 3,500 old $USD.

As I have posted here before, the conversion will be a very complicated and propagandized affaire designed to obfuscate and confuse. Smuggling gold in or out of the US will be added to the money laundering statutes.

Two remedies present themselves (1) Make close friends with people near a gold market outside the US and (2) Move some gold to a state place there.

Recall that the cabal are ruthless people and have wreaked havoc on the innocents of the Third World in order to perpetrate their monetary hegemony. Mr. Greenspan has twisted the language: "I don't know what money is". They will institute a might-makes-right policy with impunity.

You must think bigger and badder than you have ever thought possible. Only then will you be prepared.


sector
Replace the word "State" with "Safe"
eom
Black Blade
Leading indicators fall
http://money.cnn.com/2002/08/19/news/economy/lei/index.htm
A group of forward-looking measures of economic health posts biggest drop in July since Sept. 2001.

Snippit:

NEW YORK (CNN/Money) - A basket of leading U.S. economic indicators was lower in July, a research group said Monday, as the economy continued to struggle to recover from a recession that began in early 2001. It was the biggest drop for the index, which measures how the economy will look in three-to-six months, since a decline of 0.6 percent in September 2001, a month that included the Sept. 11 terrorist attacks.

Six of the 10 leading indicators fell, including stock prices, average weekly manufacturing hours, consumer expectations, interest rate spread, vendor performance, and building permits. Some economists have begun to worry that the recent weakness in the stock market has sapped consumer confidence and caused businesses to be more cautious with their spending. If this persists, they fear the economy could fall back into a recession that some economists believe began in March 2001 -- the dreaded "double-dip" recession.


Black Blade: Some economists are blowing off this recent data though. Of course they absolutely missed the recession and even declared that there was no recession � at least until the revised GDP data came out and made them look like a bunch of monkeys. It doesn't take a rocket scientist to realize that the global economy is falling flat.

Just last week (and it was a slow one) data revealed lower consumer/investor confidence, lower housing starts, and unemployment is still rising. I don't see any economic recovery.

USAGOLD
CB2. . .
Good to see you back in the game, CB. . . .

It wasn't that long ago that GB2 (as differentiated from CB2) made the off-hand comment during one of the presidential debates that the IMF needs to be look at. Since then, we've gone from "Why send money to Brazil only to see it show up in someone's Swiss bank account" to "How much do you need? We'll get it there in the morning." So much for a new role for the vaunted IMF. Meanwhile, the man we were told was "different" looks more and more like Wall Street's child, and despite advice from the hinterlands (yours and mine), he's managed to let Hillary back in the race, and Robert Rubin busily raises money in her behalf. And you and I (both with our connections to the Bushes) can only throw up our arms wondering how the Bush family could be so close, yet so far away. ( Many of you know what I'm talking about. ) If only he could get himself to say that it is the function of goverment to insure "free and fair" markets. But it seems he cannot. So we have Hillary and derivatives. . . .and if only I could make this all rhyme, I would be CB2. . . . ..

My best, good friend. . . .The Autumn will be better for you, me, gold, but probably not GB2. . ..CB2.

It's parched here and your part of the world very wet. . . Let's split the difference. What's the word on ski season there? We're being told to forget it. . . .. C'mon El Nino. . . . .
Black Blade
Drought Worsens
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWErAhWyVS5TLiBE

Snippit:

Corn prices have surged 37 percent since May 1 as drought and heat waves in 25 states slashed production of the nation's most- valuable crops. After four years of excess grain production and depressed prices, profits are poised to rise for farmers who got rain. For many others, the slump worsens. Weather patterns kept most of the rain in the northern part of the Midwest Corn Belt this summer, ensuring bumper crops in Minnesota, Iowa and Wisconsin. In Nebraska, the third-largest corn grower, conditions were the driest on record and the hottest since 1936, the worst year of the Dust Bowl decade. Drought conditions had been spreading in Illinois, Nebraska, Indiana and Ohio, according to the National Drought Mitigation Center in Lincoln, Nebraska. The four states accounted for 43 percent of last year's $19.2 billion corn crop and 40 percent of the $12.4 billion soybean harvest.

Black Blade: Some locales are doing very well and will harvest big gains with higher prices, however, the overall picture is "grim". Meanwhile enjoy the temporary low meat prices as ranchers cull herds due to high feed costs. Food costs are likely to increase for at the very least several months going forward. If the drought works into next year as supply decreases, the problem will get much worse.

Pizz
Paper Avalanche, Sector
I'm in agreement on the New Dollar, just that my numbers feel a bit different.

New Dollar gold price $50.00 oz.
Backing = 10%
Old Greenback 5000/0z non convertable.


Sector: Nothing wrong with your numbers, and you could be right. I think we'll have free gold. I just feel that the EU just might have to inflate a bit and have to account for a little bit (smile) of leased gold that just ain't comin' home. 5% feels about right. 15-5=10. I also think gold will hit 500 or so within 6 months, which is close to the equilibrium price some have calculated.

Plus the US is going to have to default/devalue about 90%, and the numbers again feel right as the Eu gold in reserve of 10% appreciates 10 fold to compensate.

Moving a decimal point one place would be preferable, plus why would you want a whole bunch of Gold Eagles out there with the wrong conversion rate on them? It's the quarter ounce ones that will be numismatic.

Oh to be a FED or EU accountant during the conversion. You can't imagine the multitude of sins that could be washed away, including a bit of leased gold and any other "debit" that needed to be absorbed. That's the main reason for my 500, 5000, and 50 figures - the PTB's of the world need the slack, similar to a "restructuring" charge that will have everything including our kitchen sinks thrown in.

Idle specualtion on our parts, but both possible and probable. . . .

__________________________________

Twenty years ago if someone with the investment clout of Saudi Arabia started sabre rattling about reverse repatriating of our debt, markets would have crashed. Are we getting that "conditioned"?????


Pizz
Waverider
Saudi investors 'could withdraw US funds'
http://news.bbc.co.uk/2/hi/business/2202781.stmSnippit:
"Saudi investors have threatened to withdraw some of the $750bn (�487bn; 766bn euros) they have invested in the US after families of 11 September victims filed a lawsuit against Saudi banks and charities for damages.

"This is an act to extort Saudi money deposited in the US and a way of meddling in the region," an official at Al-Rajhi Investment and Development Corp, one of the Saudi banks named in the lawsuit, told the Reuters news agency. "Naming Prince Sultan is the equivalent of saying J. Edgar Hoover was a communist spy," said economist Bishr Bakheet of the Bakheet Financial Consultancy.

"Assuming the court proceeds with this lawsuit, the Saudi investment community, already in shock, will start withdrawing their money. People are really going to walk out," he said. The lawsuit originally sought $100 trillion in damages but the lawyer for the victims late on Friday amend the suit to $1 trillion.

Waverider: I can't imagine this lawsuit being allowed to proceed given the damage it will wreak on ME-US relations and the US economy. I would think that it would be nipped in the bud rather shortly! Unfortunately damage has already been done and once the defendents get over their shock I suspect they'll react whether or not the suit is dropped.
misetich
Banks Tighten Up on Loan Approvals-Banks Report Tightening Up on Lending in Wake of Accounting Scandals-However, three large U.S. banks reported loans to companies facing accounting problems represented more than 5 percent of their total business loans. The Fed survey did not name the institutions.
http://abcnews.go.com/wire/Business/ap20020819_1382.htmlSnip:

WASHINGTON Copyright 2002 The Associated Press. All rights reserved. Aug. 19 �
In the wake of the accounting scandals that have rocked corporate America, the nation's banks have tightened up on their loan approval procedures, the Federal Reserve reported Monday.

In a survey of 56 large U.S. banks and 20 foreign banks with U.S. operations, the Fed found that the majority of the institutions had moved to tighten standards for making loans and had also increased the frequency for monitoring existing loans.

The Fed's quarterly loan officer survey found that banks' exposure to companies with accounting problems was generally low with 58 percent of those surveyed saying such loans represented less than 1 percent of their business loans.

However, three large U.S. banks reported loans to companies facing accounting problems represented more than 5 percent of their total business loans. The Fed survey did not name the institutions.

............
The Fed survey found that 5.4 percent of the banks reported a "notable increase" over the past year in the number of firms submitting erroneous or misleading financial statements in the loan approval process, while 12.5 percent of banks reported "some increase" in misleading statements. The large majority of banks surveyed, 80.4 percent, reported no change in the frequency of erroneous or misleading statements.

In response to the accounting problems, banks reported they were taking a variety of actions.

"Most banks reported that they had begun requesting additional financial detail during the approval process, had increased the frequency or intensity of monitoring and were enforcing loan covenants more strictly," the Fed said.
*************
Misetich

Exactly what the doctor ordered - NOT -
Banks, bondholders are Risk averse - though it has not resulted in a credit squeeze thus far - there is no question that business is not as usual and the long awaited economic recovery is being post-poned indefinetely - until the excesses are purged from the system

Will a global economic decelaration occurring - wouldn't surprise if the Europeans jump on the cut interest rates bandwagon "as inflation is muted" -

Will they be able to cope with debt deflation?


Got gold?


Cavan Man
sector: I don't get it.....
There is not room enough in our monetary universe for old and new USD. No way. So, I am missing your point though it sounds similar to an old friend who was posting here for a long time. What is the point of $3500 old USD when the NEW USD is the game that everyone is playing; the only game in town? What am I going to do with $3500 old USD eh?

When/if the scenario you and a certain "essayist" envision occurs, I think the global economic applecart will be turned over and POG will soar in old and new or used and freshly printed (not minted) legal tender of all sorts. At some point certain you sell a good hunk as the equilibrium or, SNAFU will reassert itself. That's the time honored and surest reason to own gold and the Europeans know this; it will get thee to the other side.

Cavan Man
Sir PIZZ
Could you comment on my post to sector as I value your insight.
Cavan Man
sector
You are implying eurodollar default yes? Sorry to state the obvious.
misetich
Saudi banks, charities reject terrorism charge - "This is an act to extort Saudi money deposited in the United States and a way of meddling in the region."
http://paknews.com/main.php?id=10&date1=2002-08-20Snip:

RIYADH, August 20 (PNS): More Islamic charities and Saudi banks named in a lawsuit by families of September 11 victims denied Monday any role in funding terrorism and blasted the case as an attempt to extort Saudi wealth abroad, Arab News reported.

In a civil suit filed in a Washington court on Thursday, relatives of some 400 people killed in the attacks sought damages of over $100 trillion.

An official at Al Rajhi Investment and Development Corp., one of several Saudi banks named in the lawsuit, said: "This is an act to extort Saudi money deposited in the United States and a way of meddling in the region."

Officials at the banks involved said they were pondering a response but would not act or issue statements before consulting with government authorities in the Kingdom.

............
He said Muslim charities named in the lawsuit planned to hold a meeting soon in Cairo to discuss a plan of action.

Meanwhile, there have been calls for the withdrawal of Saudi investments worth $750 billion in the United States in the wake of the lawsuit filed against the Saudi banks and organizations.

"The lawsuit will force Arab and Saudi investors to withdraw their investments in the US fearing the risks involved," Bashar Bakheet, director of Bakheet Financial Consultancy firm, told Al-Watan newspaper. He put the total Arab investments in the US at more than $1.3 trillion.

Dr. Abdul Rahman Al-Zamil, chairman of Al-Zamil Group, urged Saudi investors to repatriate their funds to the Kingdom. He pointed out that European investors had withdrawn $70 billion in investments from US after the September 11 attacks


Saudis for boycotting US products
Calls for boycotting US products in the Kingdom and elsewhere in the Middle East are growing as many Muslims believe that it is an effective weapon to change America's pro-Israeli policies.

"We should not ignore the calls for boycott of US products. It has proved effective," Ihsan Bouhaleega, a Shoura member and an economic analyst, told Arab News.

He believed that the boycott movement in the long run would force the US government to change its policies, despite the strength of its economy.

"It may not be affected in the short run even if all Arab and Islamic countries decide to boycott American products, because it's a strong economy," he pointed out.
*************
Misetich

Retaliation - and further retaliation - How will this end?
The US $ is vulnerable and enemies know it - and allies are getting nervous - Will there panic selling and US $ crash?

Lets stay on this tumoltous TRAIL

Got gold?





misetich
Asian central banks 'take a shine to gold'
http://straitstimes.asia1.com.sg/money/story/0,1870,138515,00.html?Snip:

By Simon Wilcox

GOLD is regaining its lustre in the eyes of Asian central banks and the regulatory authorities, according to the World Gold Council (WGC).

'Central bankers in Asia have become far more receptive to talking about gold than they were a couple of years ago,' Mr Ralston Thiedeman, head of the Asia-Pacific and Indian subcontinent sector of the WGC, said yesterday. 'Gold is back on their radar screens.'

He said interest in gold reserves has risen among central banks because of the current uncertain environment created by the slowdown in the United States economy and the weakening US dollar; volatile equity markets; and geo-political instability.

.............
The seminar, opened by IPS director Tommy Koh yesterday, is being attended by delegates from 29 central banks, government agencies or regulatory authorities from 13 Asian countries.

Asian central banks have traditionally held only 1 to 5 per cent of their foreign exchange reserves in gold, while European central banks hold about 30 to 40 per cent and the US holds more than 55 per cent.

'With so little yield now from US Treasury bills, I am asking whether it is time for Asian central bankers to increase their gold ratios,' Mr Thiedeman said.

He made these comments on the same day that Malaysia said it planned to lead a push among Islamic nations to use the gold dinar - defined in terms of an equivalent value in gold - to pay for external trade, so as to reduce reliance on the US dollar.

***************
Misetich

With economic recovery post-poned, yet for ANOTHER year - risks are increasing worldwide for US $ holders

Got gold?
misetich
Tokyo govt to deposit cash in foreign banks -Unprecedented move mirrors public fears that Japan's banks may not be best 'safe haven' for deposits
http://straitstimes.asia1.com.sg/money/story/0,1870,138512,00.html?Snip:

TOKYO - In a virtual vote of declining confidence in Japan's banking system, the Tokyo metropolitan government plans to put part of its cashpile of one trillion yen (S$15 billion) in foreign banks in Japan.

The unprecedented decision by the city government, headed by outspoken nationalist governor Shintaro Ishihara, comes at a time when faith in Japan's bad debt-burdened banks is crumbling.

Until now, no other major Japanese government has opened up its deposit business to non-Japanese financial institutions.

'We reviewed our portfolio allocation and decided to expand our bank partners to those with good credit ratings, including some second-tier regional banks and foreign banks,' Mr Takemi Noguchi, an official at the city government's comptroller office, said yesterday. He said the city is in talks with Citibank, the world's largest financial services firm and the biggest foreign bank operating in Japan, as well as other foreign banks.
************
Misetich

Gold investment purchases will increase multi-fold as the US $ crumbles down and "foreign banks" will not be deemed a safe haven

Got gold?

Black Blade
Saudis want to withdraw investments from US
http://www.arabicnews.com/ansub/Daily/Day/020819/2002081910.html
Snippit:

Saudi businessmen have called for withdrawing the Saudi investments from the US in case the US will continue and allows judicial lawsuits proposed by some US lawyers against Saudi banks and charity societies, stressing that this case is deliberate and stands against all Saudi interests. News reports said on August 16 that the case which will be filed by families and relatives of victims of September 11 attacks in the US targets 99 Saudi establishments, organizations, and individuals.

The director of "Bekheit " center for the Saudi financial consultation said in statements issued on Sunday by the Saudi daily al-Watan that the acceptance of the American courts of the filed lawsuits asking for compensations estimated at 300 billion dollars to the families of the American victims of the attacks of September 11, will push all Saudi investors in particular and the Arab investors in general to get their sums out of the American banks, so as to avoid risks of these trial cases. The Saudi Arab monetary fund establishment "Mu'assat al-Naqd al-Arabi al-Saudi" is to reconsider investments of the retirement and social insurance establishments in the USA, and to invest them in local or European markets which are more secure.


Black Blade: If the Saudis do want to bail out of US markets, they had better work fast as the US courts could freeze assets. First the Saudis bail, and then the other ME investors will follow.
misetich
Brazil may meet New York banks next week-official - Brazilian central bank and finance ministry officials could not confirm the talks but the Fed said it had been asked to host the meeting.
http://money.iwon.com/jsp/nw/nwdt_ge.jsp?section=news≠ws_id=reu-n19129421&feed=reu&date=20020819&cat=USMARKETSnip:

Monday August 19, 3:04 PM EDT

By Anna Willard and Susan Schneider

WASHINGTON, Aug 19 (Reuters) - Brazilian finance officials may travel to New York next week to meet with Wall Street bankers to discuss the credit lines banks have with private companies, a Brazilian official said on Monday.

Brazilian firms have found it harder to get credit lines from private banks as the country's financial markets have plunged into turmoil because of investor nervousness over the consequences of the presidential election in October.

The official said no date has yet been set for the meetings but that there have been phone conversations between Marcos DePaiva, secretary for international affairs at Brazil's finance ministry, and several banks in the United States.



The New York Federal Reserve has been involved in the discussions but only in a marginal way, acting as a "facilitator" for the conversations, the official stressed. The Fed confirmed it will host the meetings.

"There are conversations between the parties, there may be a meeting next week but we have not yet got confirmation of the participants or the times of such a meeting," the Brazilian official, who did not want to be identified, told Reuters. "There have just been conversations of a possible meeting."

...........
Brazilian central bank and finance ministry officials could not confirm the talks but the Fed said it had been asked to host the meeting.

"The Brazilians have asked us if they could hold the meeting here and we will be pleased to host them," said Peter Bakstansky, senior vice president and spokesman at the New York Federal Reserve.

The Brazilian official said the subject of the meetings would be "credit for Brazilian private companies."

A string of international banks have heavy exposure in Latin America's largest economy.

Citigroup Inc. (C), the largest U.S. financial services company and a key player in emerging markets, and FleetBoston Financial Corp. (FBF) together have about $24 billion at stake in Brazil, making market woes there of keen interest.

"The parties are looking for a joint statement into the markets to install confidence, because confidence is what it (Brazil) lacks at this moment," said another source familiar with the telephone discussions.

Brazil's bonds and the real currency have both shed some 30 percent of their value so far this year as investors fret over the wide advantage held by two leftish candidates, Luiz Inacio Lula da Silva and Ciro Gomes, in the polls.

Wall Street worries a left-leaning president might bungle economic policy and push Brazil toward a default on its $250 billion net public debt.
**************
Misetich

US economy growth is flat to negative
Oil prices are soaring
Trade deficit increasing
Budget deficit soaring
Accounting scandals - legal lawsuits - senate investigations
Europe economy is decelerating
Japan is in recession
Japanese banks are deep doodoo

and US Fed is being asked to put out ANOTHER fire in Latin America - Brazil

Central bankers are fighting a losing cause as they have lost all creditability - they're fighting the markets instead of the markets fighting the Feds

Got gold?






sector
@CavenMan Speaking of Monetary Universes...
...and other manipulationsThe "Old" dollar is the dollar that will be devalued by 90% partly in order to repudiate debt and save weakened banks here. The "New" dollar with colors prettier than green and black will be worth 90% more.

USD$ Cash holders will be wrecked. Savings certificate holders will similarly be robbed but they WILL get 8% on their deposits as a consolation. All this is easy to predict...it is the only way to escape debt other than more of the pure monetary inflation currently featured by the Fed.

Because Japan and the US have closely knit economies there can't be the required equal inflation since the money flows aren't really predictable in both cultures. In other words, there needs to be a stable unit of effective inflation...there is none so a simultaneous $USD/yen devaluation fits the bill.

The colorful currencies planned by the Japanese and US authorities have absolutely nothing whatsoever to do with preventing counter-fitting. They are the new currencies.

Do not be lulled into complacency and think that folks on this or any board will give you a heads up. it will happen in the dead of night. The spin scripts pre-written for the following day.

"A new bill has been introduced to thwart Al Quaeda counter-fitters today. It will be backed by 15% gold. All holders of old USD must turn them in at an FDIC listed bank ...etc., etc."

The Saudis and Japanese elders alone have over $USD 1.3 Trillion in assets some of which will certainly be converted to gold as the geopolitical turbulence roils on towards a war in the ME. 10% of that total converts to 13,478 tonnes of gold at $300 per ounce.

This figure is far above the US Reserves and begins to reach the level of BIS cartel capitulation.

Continuing on the current track of a slow bleed of physical from the BIS would be acceptable if it were not for the huge and fatal [To the cartel's bullion] uncertainties inherent in today's macroeconomic headlines...so there must be a devaluation plan BEFORE things get out of hand and the monied Saudis and Japanese get their gold buying train rolling.

A devaluation in the $USD reduces gold buyer's ability to buy gold by 90%...thus the cartel's bullion would be that much safer, the debts of the major at-risk Fed banks would be similarly reduced.
misetich
IMF Bailout for Brazil is Windfall to Banks, Disaster for US Taxpayers Says Sanders-Congressman Calls on Congress for Investigation
http://www.corpwatch.org/bulletins/PBD.jsp?articleid=3548Snip:

Source: U.S. Congressman Bernie Sanders
Posted: August 15, 2002



For Immediate Release

Contact: Congressman Bernie Sanders
Joel Barkin 202-225-4115

BURLINGTON, VERMONT - August 15 - Congressman Bernard Sanders (I-VT), the Ranking Member of the International Monetary Policy and Trade Subcommittee, today called for an immediate Congressional investigation of the recent $30 billion International Monetary Fund (IMF) bailout of Brazil.

Sanders, who is strongly opposed to the bailout and considers it corporate welfare, wants Congress to find out why U.S. taxpayers are being asked to provide billions of dollars to Brazil and how much of this money will be funneled to U.S. banks such as Citigroup, FleetBoston and J.P. Morgan Chase. These banks have about $25.6 billion in outstanding loans to Brazilian borrowers. U.S. taxpayers currently fund the IMF through a $37 billion line of credit.

Sanders said, "At a time when we have a $6 trillion national debt, a growing federal deficit, and an increasing number of unmet social needs for our veterans, seniors, and children, it is unacceptable that billions of U.S. taxpayer dollars are being sent to the IMF to bailout Brazil."

"This money is not going to significantly help the poor people of that country. The real winners in this situation are the large, profitable U.S. banks such as Citigroup that have made billions of dollars in risky investments in Brazil and now want to make sure their investments are repaid. This bailout represents an egregious form of corporate welfare that must be put to an end. Interestingly, these banks have made substantial campaign contributions to both political parties," the Congressman added.

**********
Misetich

Telling like it is -

Got gold?
misetich
Insurers hung out to dry over flooding -The German industry is already in the throes of a crisis. It is feared that a number of life companies will be unable to meet the minimum interest rates promised to policyholders, so they have decided to band together to create a "pool" to cover any gaps.
http://www.business.scotsman.com/banking.cfm?id=912782002Snip:

Eric Culp and Christopher Condon


THE German, Australian and Czech governments face huge bills from the worst floods in central Europe in more than a century; but the disaster will also put further pressure on the profits of continental insurers already battered by terrorist attacks and falling equity markets.

As the flood waters started to threaten lives, property and crops in Germany after tearing through Czech and Austrian cities last week, insurers were making tentative estimates of their exposure even before the waterlogged areas resurfaced.

The total amount of damage is staggering: initial estimates put the combined cost at 8.5 billion (�5.4 billion) at least and could rise as water levels fall.
.............
************
Misetich

From continent to continent - insurance companies are under severe stress -

Got gold?
steady
question?re 83328 sector
sector suppose for a second you are correct
The "Old" dollar is the dollar that will be devalued by 90% partly in order to repudiate debt and save weakened banks here. The "New" dollar with colors prettier than green and black will be worth 90% more.
and A devaluation in the $USD reduces gold buyer's ability to buy gold by 90%...thus the cartel's bullion would be that much safer, the debts of the major at-risk Fed banks would be similarly reduced.

if the old money is devalued by 90% what happens to the price of gold since it isnt backed by anything at all, does it stay constant. lets assume i go to bed and gold is trading for 300 in old us dollars, in the middle of the night they make the announcement u are refering to, does the price of gold stay at 300 in new 90% devalued dollars?
im almost get it but not quite sure am i on the right track?
misetich
US investment banks take more risks- Many of the largest US investment banks are taking bigger trading risks to boost their profits, according to the latest round of quarterly filings to US regulators.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185843808&p=1012571727183Snip:

Value at risk (VAR), which estimates the maximum amount a bank would stand to lose in a particular period under certain assumptions, increased last quarter at Merrill Lynch, Morgan Stanley, Goldman Sachs and Citigroup, the companies told the Securities and Exchange Commission in their 10-Q filings.

Analysts said such trading strategies were predictable, given the relatively low levels of short-term interest rates, which often trigger more fixed-income activity.

"In a fixed-income environment, you're going to see trading houses grow their balance sheets and take a little bit more market risk," said Brad Hintz of Sanford Bernstein. "The general position [among investors] is long corporate bonds and short treasuries. They were positioned for the spreads."

The upturn in risk exposure marks a reversal from recent quarters, when many banks made an effort to avoid risk and lower their VAR ratios.

Last quarter, Goldman Sachs' VAR rose to $51m from $49m in the first quarter while Morgan Stanley's climbed from $41m to $66m. Merrill's rose to $62m from $56m at the end of last year and Citigroup's increased by $10m to $64m in the same period.

A few banks bucked the trend. JP Morgan Chase's VAR plunged to $110.9m from $148.1m in the first quarter. The VAR ratios of two leading players in the mortgage-backed and municipal bond markets - Lehman Brothers and Bear Stearns - also fell.
*************
Misetich
Trying to thread water - investment bankers earnings are slipping - loan provision losses increasing - potential liability soaring - and the financial markets are volatile

Many were counting on a "quick US economic recovery" - unfortunately for them it hasn't materialized - and darker clouds are on the horizon

It wouldn't take much for one of them to be down for the count- and they're fighting Murphy's Law

Got gold?









misetich
US investment banks take more risks- Many of the largest US investment banks are taking bigger trading risks to boost their profits, according to the latest round of quarterly filings to US regulators.
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185843808&p=1012571727183Snip:

Value at risk (VAR), which estimates the maximum amount a bank would stand to lose in a particular period under certain assumptions, increased last quarter at Merrill Lynch, Morgan Stanley, Goldman Sachs and Citigroup, the companies told the Securities and Exchange Commission in their 10-Q filings.

Analysts said such trading strategies were predictable, given the relatively low levels of short-term interest rates, which often trigger more fixed-income activity.

"In a fixed-income environment, you're going to see trading houses grow their balance sheets and take a little bit more market risk," said Brad Hintz of Sanford Bernstein. "The general position [among investors] is long corporate bonds and short treasuries. They were positioned for the spreads."

The upturn in risk exposure marks a reversal from recent quarters, when many banks made an effort to avoid risk and lower their VAR ratios.

Last quarter, Goldman Sachs' VAR rose to $51m from $49m in the first quarter while Morgan Stanley's climbed from $41m to $66m. Merrill's rose to $62m from $56m at the end of last year and Citigroup's increased by $10m to $64m in the same period.

A few banks bucked the trend. JP Morgan Chase's VAR plunged to $110.9m from $148.1m in the first quarter. The VAR ratios of two leading players in the mortgage-backed and municipal bond markets - Lehman Brothers and Bear Stearns - also fell.
*************
Misetich
Trying to thread water - investment bankers earnings are slipping - loan provision losses increasing - potential liability soaring - and the financial markets are volatile

Many were counting on a "quick US economic recovery" - unfortunately for them it hasn't materialized - and darker clouds are on the horizon

It wouldn't take much for one of them to be down for the count- and they're fighting Murphy's Law

Got gold?









sector
C and CSFB are at Risk for $USD 24 Billion...Ominous
Debt losses at this level are unsupportable by these banks when other losses......and potential ENRON litigation losses are added.

IMF Congressional leaders calling for investigations.

Staggering flood insurance losses in Europe further burdening that industry.

An ME war all but started.

...Pretty soon gold will be at $250.
misetich
Fire, flood and the equity markets- Insurance companies are more important to Britain than they are to any other country's economy, which is why their troubles have such wide repercussions
http://www.economist.com/world/europe/displayStory.cfm?story_id=1284312Snip:

IT IS unusual for the insurance industry to feel the hot glare of television cameras; but then these are unusual times in the insurance industry. On August 8th Royal & Sun Alliance (RSA), one of Britain's biggest insurers, was all over the news when it announced poor half-year profits, the closure of its life funds to new business and more than 1,000 job cuts; and on the same day Moody's, a rating agency, confirmed its "negative" outlook�the worst it ever gives�on British life insurers. And Ace, a Bermudan insurer and one of the most prominent underwriters at Lloyd's, the insurance market, announced plans to cut its business at Lloyd's by a third.

Shareholders and policy-holders are feeling the immediate consequences. Those who own shares in this reputedly "safe" sector have seen the value of their holdings fall by 54%, on average, since the beginning of the year. Non-life insurers have seen their average share price fall by almost two-thirds since January.

Rates for some property-and-casualty insurance are rocketing. Employers' liability insurance, for instance, which covers employers over claims for workplace injuries, has increased as much as six-fold for many businesses.
**********
Misetich

The insurance industry is being hit from all sides - and the repurcassions are being underestimated

Got gold?

misetich
Refinancing Surge Could Hit Some Bonds- Investing: A rush for lower interest rates may hurt mutual funds that hold mortgage issues.
http://www.latimes.com/business/la-fi-mortgage19aug19.story?coll=la%2Dheadlines%2DbusinessSnip:

It's uncertain how long rates will remain at such levels. Interest rates have been highly volatile since last fall, and many analysts were saying last week that yields had fallen so low that investors would be induced to pull money out of the bond market and invest it in stocks instead. That could fuel further rises in Treasury yields.

But if mortgage rates remain depressed long enough for home buyers to refinance--some for the second or third time in a year--mutual funds that hold mortgage bonds probably would see their returns slip.
.........
Another risk is that when interest rates eventually go back up, the value of the mortgage securities paying lower interest will decline--and they'll stay on the books because they won't be refinanced. The only time since 1981 that the total return on the Vanguard GNMA Fund posted a negative annual return was in 1994, when the Federal Reserve raised interest rates six times, Berry said.

Such a reversal seems unlikely these days, given the worrisome weakness in the U.S. economy and the fragile nature of the equity markets, which would be further spooked by a Fed-inspired spike in interest rates. But many mortgage bond investors aren't fully aware of how badly they could be whipsawed if rates rise, said Jeffrey E. Gundlach, a senior fixed-income strategist at the TCW mutual fund group.

"I still think mortgage securities represent a good place to be," he said. "But sadly, the effect of lower rates is to make it a less attractive place than it was."
***********

Misetich

Gone are the good old days of fat returns - yet the risks are increasing

The US is in uncharted territory -

Got gold?
misetich
Brazil's Bonds Decline After Serra Opinion Poll Support Weakens
http://quote.bloomberg.com/fgcgi.cgi?touch=1&btitle=Top%20News&T=sa_content.ht&s=APWDJpBbVQnJhemlsSnip:

By James Craig

Sao Paulo, Aug. 19 (Bloomberg) -- Brazilian bonds declined after the ruling coalition's presidential candidate lost support in nationwide opinion polls, eroding hope he can win the October election and allay concern of default.

Polls released over the weekend by Datafolha Institute and Vox Populi Institute showed Jose Serra, a former health minister, falling deeper into third place behind Luiz Inacio Lula da Silva and Ciro Gomes, who appear likely to face one another in an Oct. 27 run-off vote. Brazilian asset prices rallied Friday on speculation Serra would stage a comeback in the weekend's polls.

``The frustration of this expectation will be reflected in prices,'' said Daniel Vairo, who helps manage about 1.5 billion reais in debt and equities at Opportunity Asset Management Ltda. in Rio de Janeiro.

Brazil's benchmark 8 percent bond maturing in 2014 lost 1.1 cent on the dollar to 53.15, raising the yield to 23.25 percent at 6:22 a.m. New York time from 22.67 percent on Friday.

***********
Misetich

Fire, fire, fire at Central Bankers doors and backdoors everywhere

Got gold?
Horatio
Physical gold
Owning physical has its own dangers,I understand the reasons why physical vs paper is advocated ,but it carrys its own risks.Whats to stop the Gumment from declaring physical ownership is contrary to U.S. interests and supports Muslim advocates for the "gold dinar" and therefore a law should be passed declaring the holders of physical to be in support of "terriorists" and thier accounts should be confiscated in the name of "security" and national interests.When it comes to my gold,I don't trust Bush or any Democrat.Buy your physical ,but keep your mouth shut.Foreign banks might be just as bad,they could confiscate and say "who are you going to complain to ?.Do coin sellers keep records of the buyers that might be turned over to Gumment by court order?
IMHO we all need to be flexable as events evolve,increase your knowledge of owning physical and how to store it ,how to move it if necessary and how to convert it as needed.How to convert it may be the most important aspect in order to avoid confiscation and I would like to see some conversation on that subject.thanks in advance.......
Golden Bear
Barton Biggs: Weekend Gold Worm
http://www.gold-eagle.com/editorials_02/howe081302.htmlSnippit:

"...In this context, Barton Biggs' July 16 clarion call to investors to consider the merits of gold could not have come at a worse time for the gold price fixing cabal. Gold prices were rising again toward $330 while JPM's stock price was falling into the mid-20's from the high 30's as recently as late May. Royal Bank of Canada, one of that country's leading financial institutions, was still wiping golden egg from its face after publicly disassociating itself from an improvidently published internal report by one its senior officials endorsing point-by-point the principal evidentiary allegations of the gold price fixing case. See "'Conspiracy Theory' Gains New Credibility at www.nationalinvestor.com/leaked_gold_report_reveals_troub.htm; see also http://groups.yahoo.com/group/gata/message/1149; http://groups.yahoo.com/ group/gata/message/1153..."
----------------------------------------------------------

Excellent commentary by Sir Reg regarding Biggs, Gibson's Paradox and the recent events regarding the POG...

Sorry, if already posted, but I hadn't seen it.

Cheers.
Black Blade
Layoffs Looming at UBS Warburg Energy
http://biz.yahoo.com/rb/020819/energy_ubs_layoffs_1.html
Snippit:

NEW YORK (Reuters) - Wall Street firm UBS Warburg is expected to lay off some of its 600 energy traders soon following a sharp downturn in power and gas deal making since last year's collapse of Enron Corp.

Black Blade: More nonessential "Bones" are cast upon the growing "Bone Pile".

Pizz
Cavan Man
I agree with Sector. Especially his response on dollar holders vs dollar debtors.

It'll be a default, as in any bankrupsy, and the debtors win.

The debt has to go away, one way or the other. The trick is to pull it off and survive, hence the new money - and it will have to be backed by something tangible, with a long history. . . .be kind of shiney, . . . . .

Pizz
Waverider
Seven fallacies of US plans to invade Iraq
http://www.atimes.com/atimes/Middle_East/DH20Ak01.htmlCONTENTS

1. A war against Iraq would be illegal
2. Regional allies widely oppose a US attack
3. There is no evidence of Iraqi links to al-Qaeda or other anti-American terrorists
4. There is no proof that Iraq is developing weapons of mass destruction
5. Iraq is no longer a significant military threat to its neighbors
6. There are still nonmilitary options available
7. Defeating Iraq would be militarily difficult
Conclusion

This policy report attempts to encourage popular debate by raising a number of concerns that challenge some of the key rationales and assumptions behind such a military action.

Waverider: An interesting read but we know it's all about oil.
Blackjack
Brazilian interest rates 18%, like junk bonds
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20World&tp=ad_uknews&T=news_storypage99.ht&ad=worldtop&s=APWHCVxYAQnJhemlsBrazil's currency and bonds are tumbling ahead of presidential elections in October, raising doubts about its ability to keep making payments on its $355 billion debt. That doesn't appear to be troubling Brazilians, who are showing their abiding faith in the country's banks by pouring money into savings accounts and term deposits.

Brazil's bank deposits rose 9.3 percent between the end of May and the end of June, according to the central bank, up from just 0.07 percent a year ago. The surge is fueled by far more than fidelity. Investors are being drawn by bank interest rates as high as 18 percent and a determination to stem mutual fund losses they've suffered since the central bank ordered fund managers to price investments daily, causing a plunge in prices.

The increase has also come even though Brazilian banks are flush with government debt, much like their counterparts were in Argentina. A crisis in confidence in the country's debt-ridden financial system caused a run on Argentina's banks and pushed the country into its $132 billion default in December.
_________________
The Brazilians are getting sucked in by junk bond level interest
rates. Too bad.
Black Blade
Malaysia expects to use gold dinar by mid-2003
http://biz.thestar.com.my/news/story.asp?file=/2002/8/20/business/bsgold1&sec=business
Snippit:

MALAYSIA expects to use the gold dinar for external trade with participating Islamic countries by the middle of next year, according to the prime minister's special adviser (economics) Tan Sri Nor Mohamed Yakcop. He said that the mechanics for using the gold dinar were being put in place and Malaysia was ready to move ahead to implement it. "We have talked to other Islamic countries," Nor Mohamed said when asked which other Islamic country would use the gold dinar as a mode of payment for goods and services.


Black Blade: This story keeps hitting the wires. Should be interesting when this gold standard is implemented.

Blackjack
Turkey to default on $195 Billion?
Istanbul, Aug. 20 (Bloomberg) -- Every time investors see a flicker of hope in Turkey, something throws the country off its course toward a Western-style economy.

In 1999, an earthquake leveled three industrialized cities: Izmit, Adapazari and Bolu. In 2000, several banks ran out of money, and overnight lending rates shot up to 1,900 percent. A year later, President Ahmet Necdet Sezer and Prime Minister Bulent Ecevit quarreled over anticorruption efforts, triggering a 52 percent devaluation of the lira.

This year, as the economy started to recover from its worst recession since World War II, Ecevit, 77, suffered a broken rib and other ailments and stayed away from work for 10 weeks. His absence exacerbated differences within the coalition government and prompted defections from his Democratic Left Party, costing the government its majority in parliament. Opponents won their call for November election -- 18 months ahead of schedule.

Now, investors worry that Turkey's instability may push it back into recession and cloud its ability to repay its $195 billion debt. Compounding the concern: The Islamic- oriented Justice and Development Party leads opinion polls, making it likely that its members will play a role in the new government.

Two powerful influences on Turkey are suspicious of the Islamists: The military, which has toppled four governments in the past four decades, backs a secular regime. And the U.S., Turkey's closest military and economic ally, has grown warier of Islamic governments after last year's terrorist attacks in the U.S.

``The Islamists are a big question mark, and when there's doubt, people tend to sell,'' says Paul McNamara, who helps manage $300 million of emerging-market bonds at Julius Baer Investment Management in London. ``This isn't a good time to test an untested party.''

On the Brink

Investors worry that Turkey doesn't have the leeway to try out the Islamists because each failed effort at fixing the economy has brought the country closer to bankruptcy. The government's debt reached 78 percent of gross national product at the end of 2001; the ratio almost doubled in seven years. Turkey now pays a premium of more than 30 percent to borrow, meaning that every year, it's adding almost a third more to its debt level.

As Ecevit's government unraveled this year, interest rates rose to 75 percent from 55 percent and the lira fell 19 percent to 1.67 million per US dollar. Higher interest rates and a slumping currency will further slow a recovery, the International Monetary Fund said in July. The Turkish economy grew by just 0.7 percent in the first quarter of this year after contracting by 9.4 percent in 2001.

``Political uncertainty threatens the government's ability to roll over its debt,'' says Meltem Citci, a fund manager at Is Invest in Istanbul. ``It's hard to continue with such high yields.''
Blackjack
Dutch telecom KPN post $9.2 Billion loss
Clearly we face deflation and depression scenario. Fed will
choose to burn dollar to get stagflation instead. Don't want
to repeat Japan situation since 1989. Rally is discounting
Fed cuts coming up. Entire situation is very bullish for PMs
in the years going forward. Funds have gone net short PMs
for the first time since 2001. Money moving to short term rally
which is bogus, light volume. Sept should see PMs come back.
In any case, more Fed cuts mean desperation to avoid Japan
type scenario, we should see stagflation instead for many years.
PMs are the place to be for at least the next 3 years. There is
not going to be a V type bottom, it will take many moons to
form and test a real bottom to this disaster. Sir John Templeton
thinks before this many year bear market is over we could see
DOW 4,000.
Blackjack
Asia buying Gold on weakness from bogus rally
HONG KONG, Aug 20 (Reuters) - Spot gold, pummelled in overnight trading, clung to the US$307 level in light trade on Tuesday while downward pressure from a strengthening U.S. dollar was expected to clear out more weak longs, dealers said.

"With the dollar-yen coming back off its high, I wouldn't be surprised if it could touch a little lower later on in the day," said Peter Tse, dealer at Scotia Mocatta in Hong Kong. Spot gold was trading at US$307.30/7.80 an ounce at 0615 GMT, higher than the open in Hong Kong at US$307.20/7.70 and New York's last quoted US$306.30/6.80.

Spot gold tumbled in overnight trading in New York on Monday, due chiefly to a stronger greenback, boosted by better Wall Street sentiment, and a lack of faith in higher physical gold demand in the coming holiday season.

The dollar strengthened against the Japanese yen in active trade in Asia on Tuesday, boosting activity on the Tokyo Commodity Exchange (TOCOM) and encouraging arbitrage trading between spot gold and TOCOM gold futures.

At 0615 GMT, the dollar was trading at 119.02/9.07 yen.

"We saw mainly Japanese buying today," Tse said, refering to spot bullion.

Technically, spot gold appeared to completing a correction phase begun after hitting a near-term high of US$330 in early June.

Momentum indicators on both the daily and weekly charts were all turning down, suggesting a longer period of consolidation with downside to US$300 possible by mid-September, traders said.

Trade in gold futures on the Tokyo Commodity Exchange (TOCOM) was very active throughout the day.
Blackjack
Siemens cutting thousands more jobs
(20/08/02) Siemens AG's loss-making IC Networks unit will cut 2,300 jobs at its factory in Munich, says the Financial Times Deutschland.

The paper said the cuts are part of plans to cut 4,000 across ICN.
Some 16,500 jobs have already been cut by ICN as it battles against the slump in telecomms spending, the paper said.
_________
Achtung Farfenugen Crashundum
Blackjack
Turkey gets ready for WAR
DIYARBAKIR, Turkey (Reuters) - Turkey is ready to set up refugee camps inside northern Iraq to shelter and feed thousands who may flee any U.S. military strike against neighboring Iraq, a Turkish Red Crescent official said.

Turkey, a close U.S. ally likely to play a role in any strike on Iraq, is determined to avoid the international humiliation and scorn it suffered after the 1991 Gulf War when one million Kurdish refugees, starving and exhausted, crossed over the region's mountains into Turkey.

Turkish troops initially tried to hold the exodus inside Iraq but were rapidly overwhelmed by sheer numbers of refugees who soon exhausted meager local provisions. The pictures of chaos and suffering in the makeshift camps inside Turkey were broadcast internationally. "The priority is to set up a buffer zone 10 miles inside Iraq to provide for any Iraqis who may cross the border," Muzaffer Karadede, chief of the Red Crescent in the city of Diyarbakir, told reporters late on Monday.

There was also provision for handling refugees inside Turkey, a country suffering its worst recession since 1945.
LeSin
By How Much Will USA Devalue/ReValue it's New Currency?

Sir MK this may become your next contest.

In One BIG Giant Step:

Old US$100.00 = New US$1.00

and then:

Gold @ Old US$30,000 per oz

Like a Flash in the night-

A new Game

What happens to the EURO in this case

Cheers "S"
Spartacus
Systemic upheaval - Time for a renaissance

Spartacus: A rather off-topic Kitco post, but could not resist. Beautifully written. Thanks to this unknown writer.
----------

Date: Tue Aug 20 2002 02:17
moa (Systemic upheaval) ID#281175:
Copyright � 2002 moa/Kitco Inc. All rights reserved

Maybe a good way to describe the current dislocations, imbalances and collapses in markets and other rules based societal endeavours. This may take a while and undoubtedly some ( perhaps millions ) will get crushed in the process but inevitably the individuals, concepts and systems that make it through will be better than the ones in place at present.

60 years of relative peace, a sexual "revolution" whereby the millenia-old basic structure of the family has been subverted such that the government has more influence over a child's developing mind than its mother ( who now works 45 hours/week ) , a creeping paralysis of increasing laws and lawyers yielding less justice but more courts and prisons per capita than ever before, all this and much more is taking their toll on the productive capacity of the few remaining who still believe an honest living can be made ... systemic upheaval as Atlas Shrugs.

This is not going to be like a "recession", or an economic downturn of the 1980's, say, or even a depression like the 1930's. This is the BIG Kahunna, unlike anything ever before, the size of the preceeding bubble is as sure sign as any that this is the case. The world reserve currency is in the process of defaulting on its promises. The US dollar has survived relatively intact perhaps longer than any other national currency in history. First as the unshakeable pillar of a gold standard and then for the last 70 years it has been frittered away under the wanton, reckless destruction of the Federal Reserve. It is admirable that it lasted this long. But the magnitude of the economic imbalances and drastic changes that will be necessary are finally beginning to be made apparent, see Argentina, Indonesia, etc for details. It should not be underestimated how even the smallest corner of our lives will be affected by the casting out of an entire global monetary reserve system.

Whether or not their will be return to more traditional values and societal structures and moral standards remains to be seen. You can be sure though that everything now that you take for granted will questioned. Ask these questions for yourselves, first.

Time for a renaissance.


Black Blade
Still Bullish On Gold
http://cbs.marketwatch.com/news/story.asp?guid=%7BC5FEFDD5%2D89AC%2D4D7C%2D876D%2DA4899E483FA6%7D&siteid=mktw
Gold timers still showing some skepticism - that's good

Snippit:

Contrarians would be worried about the health of the gold market only if market timers were reacting to gold's weakness by becoming even more bullish. That truly would represent irrational exuberance, and is more typically seen at or near market tops. But that is not how the average gold-timing newsletter currently is reacting. In fact, the average timer has been skeptical of gold almost from the beginning of this rally earlier this year. While skepticism in the face of an uptrending market would be noteworthy -- and bullish -- at any time, it is particularly so now because it is so much at odds with the gold timers' behavior on virtually every other occasion in recent memory on which gold has even approached the $300 level. On those prior occasions, the majority of gold timers have almost fallen over themselves trying to climb on the bullish bandwagon.


Black Blade: Contrarians typically outperform the market, and it is no different for the gold market. As speculators bail out of gold and sentiment turns sour, gold is resilient and bounces back. So contrarians should take heart when these specs bail and market timers turn bearish.

misetich
SEC Swaps Rule May Force Companies to Restate Profits (Update1)-``This is significant,'' said Scott Cleland, chief executive officer of the Washington-based Precursor Group, a research firm that focuses on telecommunications issues. ``Global Crossing and Qwest didn't just swap with themselves, they were involved with many others.''
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWHPcxXdU0VDIFN3Snip:

Companies use the swaps to trade use of their cables. Some have been recognizing revenue on the transactions, a practice that came to light in SEC investigations into the accounting at Global Crossing Ltd. and Qwest Communications International Inc. The SEC staff said some capacity swaps should be treated as asset exchanges, and companies can't record revenue from them, accountants said.

Qwest and Global Crossing have said capacity sales accounted for at least $2.6 billion in revenue in 2000 and 2001. Qwest said it may have to restate earnings related to such transactions and Global Crossing is reviewing the way it recorded them. Other companies may be affected as well, accountants and analysts said.

``This is significant,'' said Scott Cleland, chief executive officer of the Washington-based Precursor Group, a research firm that focuses on telecommunications issues. ``Global Crossing and Qwest didn't just swap with themselves, they were involved with many others.''

...........
``The SEC has indicated that it expects public companies to make the change by retroactive restatement,'' Hartig said in an interview.
................
Some energy trading firms also sold the swaps, known as IRUs or Indefeasible Rights to Use, analysts said.

The practice ``is utterly unregulated; there is no government entity that has any knowledge about how these companies have done this,'' said Reed Hundt, a former chairman of the Federal Communications Commission and now a telecommunications consultant.
...............
Misetich

Swaps, off-balance sheet, stock options, unfunded pension liabilities and other creative accounting methods - used to create the illusion - and defraud investors

Got gold?



misetich
Brazil Depositors Keep Faith in Banks Exposed to Default Risk
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWHCVxYAQnJhemlsSnip:

Brazil's currency and bonds are tumbling ahead of presidential elections in October, raising doubts about its ability to keep making payments on its $355 billion debt. That doesn't appear to be troubling Brazilians, who are showing their abiding faith in the country's banks by pouring money into savings accounts and term deposits.
............

The increase has also come even though Brazilian banks are flush with government debt, much like their counterparts were in Argentina. A crisis in confidence in the country's debt-ridden financial system caused a run on Argentina's banks and pushed the country into its $132 billion default in December.

Brazil's 20 biggest banks have nearly 220 billion reais ($70 billion) in securities holdings, according to the central bank, and the majority of those are in government debt, analysts say.

Debt Exposure

Banks like Banco Bradesco SA, Brazil's biggest non-state- owned bank, have more than a quarter of their assets held in government securities. Uniao de Bancos Brasileiros SA has 25 percent of its 63.3 billion reais assets held in government debt.

Several bank executives said they don't think Brazil will default on its debt because it would be too costly for the government to do so. Government officials are also loath to go down the same path as President Fernando Collor de Mello, who froze Brazilians' deposits in 1990 to head off inflation, they say.

``We don't believe in a default scenario,'' said Geraldo Travaglia, investor relations director at Unibanco. No government would risk the cost of devastating the savings of voters in pension and mutual funds, said Henrique de Campos Meirelles, FleetBoston Financial Corp.'s former head of Latin America business
***************
Misetich
Investors lured by greed (high interest rates)should blame nobody but themselves for not acting timely - pull out and go to a safe haven - PHYSICAL GOLD

Got gold?
misetich
US chain store sales fell in Aug 17 week-BTM/UBSW
http://www.forbes.com/newswire/2002/08/20/rtr699896.htmlSnip:

NEW YORK, Aug 20 (Reuters) - Sales at U.S. chain stores fell last week, a report on Tuesday showed, as consumers, worried that the economy could take time to return to solid growth, held off on major purchases.

U.S. chain store sales slipped 0.8 percent in the week ended Aug. 17 after a 0.5 percent decline in the previous week, the Bank of Tokyo-Mitsubishi and UBS Warburg reported in their Weekly Chain Store Sales Snapshot.

"Sales were generally below plan for retailers," the report said, citing weak demand for back-to-school merchandise and fall clothing.
***********
Misetich
Economic growth in the US if either flat or negative - O'Neil expects GDP growth 3 to 3.5% in the second half -


Got gold?
Cavan Man
Good morning sector....
Appreciate your thoughts on the matter. Thanks. What of old USD deposits including MM funds in US accounts? These are not threatened like "cash holders"? Also, where does the AU come from to support the "new" USD?

Three years ago I stopped being complacent and began to ask a lot of questions of everybody. I do the DD and "filtering". Your comments in particular ring true. Best...CM

PS: Been hitting greens with #5 woods lately--must be on to something.
misetich
Kuwait says OPEC can boost output if Iraq attacked-
http://www.forbes.com/newswire/2002/08/20/rtr699790.htmlSnip:

"Kuwait's quota inside OPEC is 1.7 million barrels per day (bpd), but we can export more, up to two million bpd. Many others are also able to increase production, including Saudi Arabia, Iran, Algeria and the United Arab Emirates," Ahmad al-Fahd al-Sabah, in Moscow on a three-day visit, said.

He said Kuwait would not support a military strike on Iraq, but said no decision had been taken on whether or not to allow U.S. forces to use Kuwaiti bases.

"The Americans have bases in Qatar, Bahrain, Jordan and Turkey. Why does everybody pay so much attention to Kuwait? And the Americans can easily do without land bases because they have aircraft carriers," Ahmad al-Fahd al-Sabah, who is also Kuwait's acting information minister, said.
*********
Misetich

Oil prices will soar! and world financial system is fragile

Got gold?
Spartacus
The Euro
http://www.scotlandonsunday.com/business.cfm?id=906302002

--The Nobel prize-winning economist Milton Friedman argues that the UK should not join the single currency and surrender control of its own monetary policy.--
misetich
Va. Faces New Cuts As Deficit Deepens - Warner Outlines A 'Daunting' Gap Of $1.5 Billion
http://www.washingtonpost.com/wp-dyn/articles/A37751-2002Aug19.htmlSnip:

RICHMOND, Aug. 19 -- Democratic Gov. Mark R. Warner urged the Republican-led General Assembly today to join him in making "aggressive" spending cuts to offset a $1.5 billion budget shortfall, which many GOP leaders said was an invitation to slash the size of state government.
********
Misetich

A sample of the problems many cities and states face - as BB would say - "GRIM"

Got gold?
misetich
Trade Deficit Remains Near Record
http://www.washingtonpost.com/wp-dyn/articles/A39092-2002Aug20.htmlSnip:

WASHINGTON �� The U.S. trade deficit narrowed only slightly in June to $37.2 billion, still the second biggest deficit on record, as an improving economy pushed demand for imports to the highest level in 15 months.

The Commerce Department reported that the June imbalance between what America sells abroad and what the country imports was down a tiny 1.8 percent from the record high of $37.8 billion set in May.

Even with the small improvement, the trade deficit for the entire year is running at an annual rate of $412 billion, which would be a new record if current trends hold.

� 2002 The Associated Press

*********
Misetich

Imbalances continue unabated

Got gold?
Belgian
Crude Oil will break the US$.
Invading Iraq, succesfully, is peanuts. Occupying its territory and installing a West-friendly regime is impossible. Confiscating and protecting Iraqi oil will turn out to be a nightmare. Russia is positioned to profit immensely from this future situation. The Middle East will NOT rest before they obtain a "much" higher price for their oil(100$).
It is 1974 all over but now up to the finish.

Global economy and its debts cannot survive a SUSTAINED POO above 40$. Remember the recent POO-spike above 40$ as the test. 3 scenarios :
1/ War and/or terror up until POO >>> 100$.
2/ US$ devaluates >>> global Hyperinflation.
3/ Status Quo >>> impossible.

The Arabian oil-offensive during the period of desert storm was aborted. The US knew that Iraq was going to invade Kuwait and only came to "liberate" INSTEAD of pre-emptive defense !!! That was a master move (timing) to extend, temporary, the dollar's grip on oil and its price. This time there's less chance it will end as succesfull. (Reread what TG said about the Gulf war).

More and more debt cannot be serviced anymore in this contracting economy. Now there is even talk about bringing USTB-yrs-10, gradually down to 2% in order to roll over un-servicable debts. A US$ devaluation will soon impose itself.
Will it be a progressive devaluation or a one step total crackdown ? All depends on how oil's pressure is building timewise.
Pizz
Gold Dinar
http://biz.thestar.com.my/news/story.asp?file=/2002/8/20/business/bsgold1&sec=businessOld news, but it's the timing that is more than just interesting.

About the same time as our new rainbow currency. Kind of convenient.

Sector, Paper Avalanche: If we assume some type of major devaluation (default) to get rid of selective external debt, several things may need to happen.

A war would be convenient, since if your not with us, your against us (haven't heard that statement for a while since the list of those not with us seems to be growing in the wrong areas). Why pay off our debt to the enemy?

A war would be convienient, since we have to have oil, and we'd be on a hard currency basis for payment, so occupying Iraq would seem to be advantageous.

More time would be convenient to continue to rebuild our manufacturing infrastructure (steel, etc.) and to have a few trillion of derivatives expire, and for more cheap gold redistribution to offset the dollar collapse.

But now our enemies are smelling a rat, and the timeline must be moved ahead.

Big game of musical chairs now in progress. Who sneezes first? Seems some are looking for a good reason to pull the dollar plug (Saudi's??) and others just don't seem to want to give the US a reason to proceed - they aren't with us.

Where's the A-team when you need them. Their plans always seemed to come together.

Pizz

Blackjack
Wedding Season coming in India
London, Aug. 20 (OsterDowJones) - Physical buying at the lows has helped
pull spot gold higher for the fix in London Tuesday morning but further
direction will likely be dictated by movements on the currency and equity
markets.
These two factors were said to be responsible for the fall down to the two-
week low at $304.65 a troy ounce Monday, as the dollar strengthened sharply
against the euro and the stock markets posted another day of solid gains, but
an early fall for the FTSE 100 has offered light support Tuesday morning.
Speculators have joined physical buyers and helped lift the market through
$308/oz in early trade but resistance below $310/oz is preventing further
gains while a steady morning for the dollar has kept some players on the
sidelines.
Sources said the seasonally thin trading volumes have led to extremely
illiquid conditions which have been responsible for the sharp price
fluctuations over the last few days and they expected this to last until early
September.
"When one of the bigger banks decides it wants to sell a bit (of gold)
when it is so quiet, it is easy to drive the price down $5 or more," said one
dealer. "We could easily see prices back up to $318/oz again if someone takes
a favorable view."
Another dealer said players seem reticent to sell the market down toward
$300/oz given the risk of a sudden upside move, caused either by currency or
renewed jitters in the equity markets.
Some are less positive and believe the potential for large funds to move
out of gold and back into equities will cap any upside move in the near future.
Countering this is the fact physical buying ahead of the Indian wedding
season is expected to pick up in the weeks ahead, as is fabrication demand
across Europe.
a nation of one
Gold hot
Gold's daily trading range has recently been increasing. I believe that indicates that the intensity of traders' interest in it is growing.
sector
@CavenMan - MM Funds and any Other $USD Denominated...
...Asset will be devalued against goldThe exception is unhedged gold producers that will adjust upward.

The UK maintained a two-tier gold price for years early in the century. Lower internal and higher external pricing, 100 kilo bars as the only trading unit...stuff like that designed to keep citizens from buying gold and protecting their wealth.

The markings are on the wall regarding the likelihood of a deval. At the top of the list is the ruthlessness of the cabal and it's defacto leader Robert Rubin. He has visited Japan in the last quarter, no doubt to set up details of what I think will be a simultaneous deval. What other mechanism is available to rescue the Japanese banks?

Slow inflation through a falling yen? This method will certainly launch gold as it did in January. The US will inflate too but the two nations can't synchronize their inflations. So the piper has to be paid either through inflation and a rising gold price or a deval and an overnight gold price "Adjustment". The latter is more controllable in that authorities can attempt to have a two tier gold price as the UK did. They don't want citizens buying gold so we can expect barriers to be erected. Moreover, the disparity between the Canadian dollar and the Mexican Peso can be addressed by a deval and "Harmonization".

The bottom line is upon us today. Buy gold. Adjust your portfolio now. Eurodollars are eurodollars dollars�gold is gold.

++++++++++++++++
About the five wood. I just got a custom narrow faced beauty that flies 190 like a laser...declared war on my go-left swing faults...even bought Harvey Penick's "Little Red Book". Very nice. I was violating just about all the basics. Little changes matter. Enjoy... my friend.
sector
SEC Swaps Rule May Force Companies to Restate Profits
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWIy.hXeU0VDIFN3
08/20 08:15
By Robert Schmidt

Washington, Aug. 20 (Bloomberg) -- Some telecommunications companies may be forced to restate earnings after the Securities and Exchange Commission this month prohibited carriers from accounting for swaps of fiber-optic cable capacity as revenue, accountants say.

Companies use the swaps to trade use of their cables. Some have been recognizing revenue on the transactions, a practice that came to light in SEC investigations into accounting at Global Crossing Ltd. and Qwest Communications International Inc. The SEC staff said some capacity swaps should be treated as asset exchanges, and companies can't record revenue from them, accountants said.

Qwest and Global Crossing have said capacity sales accounted for at least $2.6 billion in revenue in 2000 and 2001. Qwest, which today agreed to sell its directories unit for $7.05 billion, said it may have to restate earnings related to capacity swaps transactions. Global Crossing is reviewing the way it recorded them, and other companies may be affected as well, accountants and analysts said.

``This is significant,'' said Scott Cleland, chief executive officer of the Washington-based Precursor Group, a research firm that focuses on telecommunications issues. ``Global Crossing and Qwest didn't just swap with themselves, they were involved with many others.''

Retroactive

The SEC notified companies of the new policy in a phone call to the American Institute of Certified Public Accountants, not through a public announcement, said Jay Hartig, a partner at PricewaterhouseCoopers LLP in Florham Park, New Jersey, and chairman of the SEC regulations committee at the AICPA, a trade organization.

``The SEC has indicated that it expects public companies to make the change by retroactive restatement,'' Hartig said in an interview.
++++++++++++++++++++++++++++++

Swapping Restatements � Telcos will issue many more accounting restatements and the investor will get even madder because he erroneously thinks the CEOs already vouched for the financials on August 14th.

A boiling cauldron of injured investor hatred...and the election is right around the corner. I can't imagine a candidate of either party actually showing up at a "Town Meeting".
darkhorse
just for us rookies...
I thought I was doing ok with all the financial/economic issues (although the bit about the gold swaps/related material got me a bit confused). I understand the basics about devaluations, but how it ties into life AFTER THE FACT has me confused, especially with the two-tiered pricing of gold. Could somebody take some time to explain what we could expect if such an event happens? How will it affect the price/purchasing power of my shiny insurance? What happens to prices of everyday things compared to my income? Will holders of gold be in a better position to walk away from this mess they've created (even with the two-tiered pricing thing)? Can you tell I'm a bit off the beaten trail here?
darkhorse
btw...
"...this mess they've created..." refers to TPTB, not us gold holders. Sorry for any confusion.
Sierra Madre
I predict a new term...
"Financial terrorism". I've got dibs on this term.

So useful! "You want your $10, $20, $50, $100 billion? Why, that's FINANCIAL TERRORISM, that's what it is!"

"Yes, you hateful people, kernel of evil, now you want to make our financial system crash just like you made our Twin Towers Crash! Financial terrorists! That's what you are!"

"Well, you listen here! You're not getting your filthy billions because we are not going to let you destroy our financial system with your TERRORISM!"

Too late, too late, The Walrus and the Carpenter are going to dine on oysters, and the oysters are the Saudis.

Sierra

Horatio
Germany Iraq Embassy
As I see it............. Looks to me like the Mossad has just handed Dubya the ammunition he was looking for to invade Iraq.This serves the interests of Israel.I expect they will find "evidence" of Iraq
participation in 911, planted or otherwise.IMHO
After the invasion will Russia help to run Iraq and assure U.S. oil supplies or will they resort to thier old Skull duggery and go back to being "Masters of Deceit " as Hoover used to call them.We shall see..............Buy Gold
Horatio
Dubya
What is he thinking?.Do we really need a Homeland Defence Secretary ,whose only function seems to be abolition of the "Bill of Rights".What the hell does the "Secretary of Defence" get paid to do ?He used to be called the "Secretary of War".It seems to me this "War" we are in falls in his jurisdiction .Doesen't he have the credentials to be a "Secretary of Defence"?
I suspect something else other than Defence is afoot.
Socrates964
Dubya's war on tourism goes into first gear
http://www.stratfor.com/fib/topStory_view.php?ID=205803

Washington Retreating on Iraq
19 August 2002

Summary

The Bush administration has begun to back down from plans for a near-term attack on Iraq. The controversial plan was shredding the coalition against al Qaeda, which Washington needs in battling the group. But the Bush administration's retreat from Iraq, although necessary, forces it to manage a political and psychological defeat.

Analysis

The Bush administration in the past few days has begun backing down from its single-minded commitment to attacking Iraq. This was forced in part by broad opposition in the Middle East and Europe to such a plan and dissension at home.

The White House's wavering reflects the tortuous political and military complexity of containing a war on Iraq and its aftermath. But the Bush administration, unilateralist chest-thumping aside, also realizes that it needs the assistance of many countries if it is to keep al Qaeda and its sympathizers in check.

A reversal of policy on Iraq was necessary in terms of both long-term U.S. anti-terrorism goals and short-term preparedness for new al Qaeda attacks. However, the retreat is a strategic psychological defeat for the administration, particularly in the Middle East. Washington inadvertently stumbled into exactly the trap al Qaeda hoped to set for it.

Its Iraq policy united the Muslim Middle East across border, racial and sectarian lines against the United States. And that opposition appears to have thwarted a major U.S. attack in the region. Washington will need to exercise damage control in its relations with individual Muslim countries, and despite the drawdown on Iraq, could face increased resistance in the region in the near future.

U.S. National Security Adviser Condoleezza Rice began the administration's message-tempering last week. In an interview with the BBC, she continued to lambaste Iraqi President Saddam Hussein as an evil man and argued that the case for regime change was very powerful. However, she also acknowledged that President George W. Bush had not yet chosen the method for Hussein's ouster.

Presidential communications director Dan Bartlett highlighted the ambiguity of the White House's Iraq policy on Aug. 18, when he announced that Bush had not yet decided what to do in Iraq but would articulate a plan when he had one and would certainly receive the support of Americans and their allies.

Washington already has begun searching for alternative strategies. The London-based Sunday Times reported Aug. 18 that the Pentagon would for the first time begin funding covert operations by Iraqi opposition groups. The State Department reportedly also is freeing up money earmarked for the Iraqi opposition that had been tied up until now.

Support for an attack -- which was never particularly strong to begin with -- has been crumbling at home and abroad.

For instance, Saudi Foreign Minister Saud al-Faisal announced Aug. 7 that Riyadh would not allow the United States to launch an attack on Iraq from Saudi territory. Egypt, Syria, Jordan and Oman have all stated their opposition to an attack on Iraq.

Two more countries joined the opposition Aug. 18. After a meeting with Iranian supreme leader Ayatollah Ali Khamenei, King Hamad bin Isa al Khalifa of Bahrain -- where the U.S. Navy's 5th Fleet is based -- said his country opposes unilateral U.S. military action against Iraq. The same day, after a meeting in Jeddah with Saudi Crown Prince Abdullah, Yemeni President Ali Abdullah Saleh declared his opposition to a war as well.

There is also little enthusiasm for an Iraq campaign in Europe, including in countries with bases and forces needed for a major campaign. German Chancellor Gerhard Schroeder has openly rejected participation by his country, which was a key staging area for operations Desert Shield and Desert Storm. Even British Prime Minister Tony Blair, one of the few supporters of an attack, is facing major opposition from within his own party over the plan.

Taking it one step further, the European Union reportedly is pressuring Turkey -- a critical ally in any attack plan -- to help thwart Washington's goals.

At home, congressional Republicans have begun breaking ranks, arguing that the administration has failed to prove that an attack is needed at this time or even to provide a coherent plan. Brent Scowcroft, national security adviser to former President George Bush during Operation Desert Storm, recently warned in the Wall Street Journal that an attack on Iraq could destroy the global anti-terrorism coalition. And within the administration, Secretary of State Colin Powell felt confident enough to go against the administration openly and meet with Henry Kissinger to discuss options other than war for dealing with Iraq.

The administration's about-face indicates that it recognizes the grim reality on three counts. First, despite the increasingly strident assertions by unilateralists within the administration that the United States could attack Iraq without the support of a coalition, the need for friendly bases in the Middle East argued otherwise. The United States literally was running out of room to maneuver. Second, given its battlefield constraints, Washington could not be sure it could contain a war on Iraq within that country's borders or manage the war's aftermath.

Finally, the administration accepted that Iraq is peripheral to its primary strategic concern: al Qaeda. And while the United States may have the firepower to defeat the Iraqi army, it needs intelligence as much as rifles to defeat al Qaeda. That intelligence comes from allies in the Middle East, and the United States cannot afford for it to dry up.

Aside from some small skirmishes in Afghanistan and a few thwarted solo efforts, al Qaeda has been inert since Sept. 11. With elections approaching and the market psychology uneasy in the United States, now would be an opportune time from its standpoint for an attack.

Moreover, al Qaeda has placed itself under pressure to demonstrate that it remains intact and effective, after a spokesman announced in June that the group would strike again soon. And as Al Qaeda cannot afford the perception that it was crushed by the United States, Washington cannot afford to be expending all its political capital on a war with Iraq, only to be blindsided by an al Qaeda attack in the United States.

While there may have been a logic behind the Iraq campaign, it failed when it came at the expense of the war on al Qaeda. The question is not whether Washington can back down from its Iraq policy. It must. The question is how can it manage the political retreat?

This shouldn't be too difficult at home. CNN's broadcast over the weekend of al Qaeda's video library -- showing chemical gas experiments and explosives-making -- is perfectly timed to help begin refocusing the American public. The Democrats will have to think twice before adopting a pro-war stance as a campaign issue while Republicans will find it easy to again rally around the anti-al Qaeda campaign.

There may be some squabbling within the administration itself, as the unilateralists attempt to defend their positions against Powell and the resurgent coalitionists, but nothing too drastic will emerge.

Overall, a policy reversal should play well for domestic politics. It should not pose much of a problem for U.S. relations with its European allies either, as they will see this as a rare case of Washington knocked to its senses by reality.

However, for those who hope to challenge U.S. hegemony, Washington's retreat on Iraq will be seen as a major victory. Al Qaeda's strategic goal was to pit the United States against all of Islam, in the process giving the Islamic world a common enemy against which to unite. Washington stumbled into that trap with its Iraq policy, with Arabs and Persians, Sunnis and Shiites uniting against the campaign and thwarting U.S. intentions.

Washington must now counteract this precedent in its relations with individual Muslim states. Though the Iraq issue may subside temporarily, Washington should expect increased resistance on other issues from countries across the region emboldened by their success. A series of confrontations over the next few months -- like the recent and as-yet unexplained dispute between Washington and Cairo that led to a withholding of future U.S. aid to Egypt -- can be expected.
USAGOLD / Centennial Precious Metals, Inc.
Hard assets, easy access -- real gold, real easy. Just a phone call away.
http://www.usagold.com/ProductsPage.html

gold sovereigns
Gold Today!

Because you never know what tomorrow will bring.

In this global marketplace, a single event on the far side of the world can suddenly and adversely affect the performance and credibility value of the commercial positions within your investment portfolio.

Gold has no employees, no overhead, and no financial statement to balance. It cannot go bankrupt. Gold is wealth itself. It is valued worldwide on the basis of its uniquely reliable form and function -- a steadfast financial commodity which is immune to the contagious collapses to which all financial paper is prone.

In the final analysis -- in times of stress -- paper is only paper.

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Operative
@ Horatio
"I suspect something else other than Defence is afoot."

Dear Horatio, Did you not sit and watch the video played over and over again this weekend? How those evil ones used poison gas to kill those poor, innocent, want to cuddle in my arms, puppy dogs? It is obvious to me that you require additional education to correct your thinking. For if you had responded as the players of said video had hoped, as your properly adjusted mental state should have, you would have phoned the White House demanding the attack on Iraq begin immediately! I suppose you also think there has/is some type of conspiracy to keep gold prices down as well.
Soon enough there will be help for people like you. The camps are a little behind schedule so please try to hang in there, help will soon be on the way. In the meantime, you want to get rid of any gold in your home, a new scientific report soon to be released after being discovered buried in the desert for a year next to the doggy video, shows that gold has an electromagnetic effect on the brain and leads to an unhealthy process called individual thought pattern.
Wishing you a full recovery soon.
Best, Operative.
Belgian
@ Sector : $USD-Devaluation
Very interesting post #83365. Thanks !
You :They don't want citizens (US citizens-?) buying Gold so we can expect barriers to be erected (two tier gold price-UK).
In other words, present UNfree Gold >>> a bit less UNfree ?
This might be the case when looked at it from the dollarblock's standpoint as radically opposed to Gold for the people. But there is a euro now ! An alternatif (concept) that never existed during the past Gold interventions.
All dollar-holders outside the dollarblock (Americas/Japan/even UK) must have the possibility to escape or compensate for the $USD devaluation. Only two main choices : euro or Gold.
So I don't see a high probability of barriers to be erected, outside the dollarblock. On the contrary ! A dollar-debacle with a flight to Gold would benefit to those suffering from this devaluation.

Maybe US citizens might not experience, rightout, confiscation, again, but what if Goldsales/trade should become highly regulated with heavy taxing as an desencouragement ? And as an alternatif to the outdated two tier gold price barrier.
While in the rest of the world, goldtrade and prices flourish much more or absolutely freely. Kind of a, selferected, Berlin wall, around the inside-US$ ? It was Nixon who abondened the dollar's convertibility and the rest of the world who took the Gold !?

Correct me, please, if my conclusion is wrong :
American citizens and US-block locked up dollars will have to pay much more for Gold (in devalued $) than the outside float of also devalued dollars ? Gold still UNFREE in the dollarblock and FREE in the rest of the world ? Thanks Sector.
davefinger
Devaluation beyond unlikely
http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&oe=UTF-8&threadm=Pine.3.88.9407151034.A9863-0100000%40athena.csdco.com&rnum=6⪯v=/groups%3Fhl%3Den%26lr%3D%26ie%3DUTF-8%26oe%3DUTF-8%26q%3Dcounterfeiting%2Bstatistics%26sa%3DN%26tab%3DwgIf the US Dollar is devalued, my single-celled brain tells me that all of the following are likely to occur:

1 - foreign countries USD reserves blown away
2 - US citizens dollar assets blown away
3 - severe damage to the US Gov ability to borrow
4 - the USD losing world reserve currency status

Now that one cell isn't terribly powerful, so please someone, point out how/why any of the above could be prevented. And really it seems that unless _all_ could be prevented, it ain't gonna happen, because they are still really nasty individually.

Is it only a limited number of asset classes held by just the CB's that need to be revalued or what? Now I could see the powers-that-be wanting to try if they could get away with it...

In general, I see no reason to immediately pre-suppose a nefarious purpose behind everything the gov does. When they say they are changing the format of the currency to stem counterfeiting, they may just really mean it. I've been a collector for years, and for years I've heard rumblings about how easy it is to copy our money, how ugly our money is, how other materials just perform better than our cotton-paper hybrid, how computers are making it even easier still to dupe our money, etc. And it's that last one that I think has finally forced a move. No, the measures they want to implement will probably do nothing more than inconvenience the real hard-core criminals. But if they can knock out 80% of the small-timers created in the last few years due to color laser printers, etc., hell even just 50%, it's worth it from a purely reductionist POV of their case-load.

The link at the top is to a Google cache of a Usenet posting from 1994(!) with the testimony of the then head of the Bureau of Engraving and Printing to the House Banking Committee concerning the urgent need for a change in our paper money to stem counterfeiting. He appears genuinely concerned over how this could be done and the impact it would have, and that's _without_ the additional wierdness of a deval happening simultaneously.
davefinger
My bad - linked article mis-attributed
It was the head of the ANA that was testifying, there was simply a quote from the head of the BEP near the top of it. No wonder he sounded go genuinely concerned for the collector/dealer! :) Sorry about that.
Aristotle
Specific investment advice for anybody and everybody
Get a very little box. A size like a little matchbox or what engagement rings come in. Preferably a nicely crafted wooden one; it adds to the charm.

Fill it with Gold coins. It won't take much to reach the overflow point. Depending on your box, anywhere from 4 to 10 coins ought to do the trick.

Success! You've now become so wealthy in REAL terms that you need to remodel and expand the size of your Treasury's storeroom.

Replace your very small box with one that is a little larger, maybe the size of those nice little wooden boxes that some brands of tea are packaged in.

Continue to apply your skills and talents in the wide world. Pursue your passions and your career to addto your savings. In short order you will fill this box with Gold to overflowing. When you can no longer get the lid on, success! You must expand once again.

Get a bigger box. Maybe a cigar box. Enjoy your life and keep adding to your Treasury.

Someday... someday, you may find yourself struggling to fit the lid on a nice wooden wine case long after the memory of the original bottled contents has left your palate. On that day you are surely your own master and wise in the ways of the world. You have my respect and admiration and I'll buy you a pint of what-you-like when we meet and share friendship as chance may allow.

All great fortune starts with humble beginnings. Set a goal for yourself and then DON'T STOP when you reach it, for it's onward and upward for you!

Gold. Get you some. --- Aristotle
Belgian
@ Socrates964 #83372
Great summary and imo very Gold related. Thanks.
Allow me to reflect on it.
The Kissinger way is : Make friends and manipulate through (NWO) economical commitments. This in contrast with WB's confrontation(s) and overmight.
Sorry for the repetition, but Arabian oil wants (and desperately needs) much higher prices as main objective.
The present 25$/barril is OK with the defacto purchasing power of the present US$. But they (we/all) know that the US$ is way overvalued and that this is unsustainable.
It is in this framework that the choices on the equilibrum- POO and a dollar-devaluation must been seen. A very difficult job/choice. A political retreat might give the owners of the cheap Arabian oil-reserves, the "advantage" on that dollar/oil choice. To dethrone or abdicate ? Not funny alternatives.

Euroland pressuring Turkey with "tourism" favors. Abu Nidal, killed in Bagdad. Israel forces, retreating.Iraqi embassy in Germany. Evidence of rising tensions on what is at stake. And the (eventual) war's aftermath will have the final impact on the oil/dollar matter.

Will the POO moderate when Washington, changes its tunes ?
Yes, the POO will show some goodwill and give some breathing space...very temporary, though !

Question : Is Euroland's ME-sidetaking (sympathy), evidence of the euro/gold/oil concept ? I'm inclined to answer : Yes ! And you ?
Belgian
Hello Ari
Is your "wealth" box, still, easely "portable" ? Yeah, know...it's a bit indiscrete...but the future holders of those wealth boxes will experience very little discomfort, whilst carrying them. They had to fill much smaller (match)boxes with the exchange of devalued confetti for featherweight Gold. Your opinion on the devaluation is...? Much appreciated and TIA.
Socrates964
Euro/oil/gold
My views are as follows:

-Europeans are terrified by Dubya acting unilaterally, because they can see the consequences of such actions on their own countries which are a) oil dependent, b) much closer to the ME, c) have large Muslim populations.

-I wonder about the Europeans' wish to see a large revaluation of the Euro, which is a necessary consequence of putting forward your currency as a reserve currency. It was one thing for the DM to revalue after 1971, another for the Euro to revalue given that politically important sections of the economy depend on exports/tourism - even if you can argue that a lot of such trade flows are internal to the EU, and that the political donwside of a strong euro must have been thought through a long time ago.

-I thus presume that it comes down to Another's hypothesis that the US pays for its oil in a mixture of dollars and bullion. A priori, if the bullion part goes up in value due to an appreciation of POG, then the de facto oil price received by ME producers goes up, even if the $ price need not do so. If I have understood his ideas correctly, there is no direct exchange of bullion, it is more like transfer pricing in that the ME create a false market in which oil trades well below its true value, and the US reciprocates by creating a false market in gold that lets the ME producers buy it well below its true value.

-Another then seems to suggest that oil producers distinguish between the Euro as a gold-backed currency and the dollar as pure paper. If this is true, then the Euro should move in line with gold. Clearly, the relationship is not linear, since even if the euro is 15% backed by gold, you have to ask about the other 85% - which presumably, like the dollar, is composed of promises, hot air, claims on future tax receipts, etc. The euro is also complicated by the unresolved question of whether the ECB has automatic access to the national reserves of individual countries.

In my view, therefore, and assuming Another's oil-bullion-$ link, the best scenario for gold bugs is that the weakness of the US$ is worked out through a rising gold price, in so far as the US government perceives that it is necessary to let the JPMs of this world fall into the abyss of their own making in order to keep cheap oil flowing.

With regard to the euro, on the other hand, it is probably politically expedient for the ECB for it to underperform POG by a significant margin - this will avoid the political fall out from overvaluation relative to other currencies and give it an expanding reserve base (gold) in real terms.
Shapur
War
It seems that with the recent media focus against a move on Iraq--allies backing off, republican party splits, etc., Bush needs more acceptable reasons for his move.

We are seeing more of that now--videos, embassy, etc. It would also appear to me that if the EURO/OIL/DOLLAR switch is on--Iran trial balloon as of last Sunday--Iraq mentioned it about 9 months ago --That BUSH would Want the Switch to happen before he moved on Iraq. Why let high oil prices due to dumped dollars be a symptom of a Bush strike? Let it be a reason TO STRIKE!

So push em into it--push the lawsuits, push the fighting words---let the war be a just one, save the gasoline price from the price gouging axis of evil.

mikal
@Socrates
"Clearly the relationship is not linear, because since the euro is 15% backed by gold, you have to ask about the other 85%." The euro's value is marketed to the market price of gold ("marked to market") So, theoretically and practically speaking, at each quarterly, (or more frequent) revaluation of the euro, you get a greater percentage gold backing as gold rises in price!
Socrates964
Mikal
Agreed, but is this an explicit design feature? (Not aware of any explicit gold backing for the euro, but this may be ignorance on my part). My point was that the Euro is like a portfolio of paper and gold. The weighting of gold in the basket could rise due to rising POG, but the overall value of the portfolio in another currency - e.g. US$ would go down due to perceptions of the market value of the paper.
mikal
@Socrates964
Sorry for the confused rush job. I was at a library internet terminal. Posting just as my time ran out. Now you are exactly right about the portfolio of currencies. But since gold forms a large part of the ECB's reserve assets, each mark to market revaluation brings the reserves higher, not the euro per se directly. The value and strength of euros rise internationally, as the gold reserves approach higher and higher percentages of the total, (as POG rises).
Sierra Madre
Aristotle: regarding your investment advice

May I add that gold is the substance with the lowest declining marginal utility, as quantity increases, of any substance on earth?

What this means, in plain English, is:

MORE is ALWAYS better!

Sierra
Black Blade
Gloomy Words From Stephen Roach
http://www.morganstanley.com/GEFdata/digests/20020819-mon.html#anchor0
Snippit:

I must confess that it's particularly difficult to disengage in the summer of 2002. The debate has been more intense than I can remember in a long time. Yet I must also confess that the tedium of bearishness has started to get to me as well. Who wouldn't want to get up in the morning and see the glass as more than half full? Yet I've long been taught to stay with your discipline. After all, what else do we really have? At this point in time, the lens of my post-bubble analytics continues to see rough times ahead for the US economy � a greater risk of multiple dips than a mere double, and a higher probability of deflation than inflation. Needless to say, for a US-centric global economy, those are not encouraging words. Lacking a growth engine, America's dip could easily be the world's dip.


Black Blade: This is not encouraging news for stock market bulls. However, those who are in a defensive posture now should fare well as the global economy falters. There are a lot of cracks in the system and it is looking like the stock market rally is about to run out of steam. There is not much in terms of economic data this week and that more than anything else has contributed to the latest "suckers rally".

Sierra Madre
Euro and its reserves
The Euro is NOT backed by reserves of 15% in gold. That would be an enormous reserve.

It is backed by a relatively small percentage of reserves, OF WHICH 15% is in gold, the rest is junk.

Repeat: "15% OF THE RESERVES are in gold". Only a small amount. If gold goes up enormously, the gold reserve would be meaningful. Not at present prices.

Sierra

Belgian
Thanks Socrates964
Cheap oil flow from ME in exchange for cheap Gold flow to ME. Nice peacefull deal.

What happens when physical Gold becomes scarce and hardly available for flow to ME ? The ME cannot accumulate enough cheap Gold, whithout forcing POG higher themselves and have no other choice than to raise POO to be exchanged for endagered US$. The oil/Gold flows become disproportionate and not conform to the deal anymore ? More income from higher POO, makes it possible to pay a higher price for the same amount of physical Gold, wanted to be accumulated by the oil producers. This provokes more pressure on the already tapped available Goldreserves, be it private / official or mine forward sales.

Higher POO and constant uptake of physical Gold is a positive price-spiral for both oil and Gold. With both precious tangibles under positive price pressure...the dollar's real value comes under scrutiny and add, finally, also to higher oil/Gold pricing ! Then the gold-derivative house of cards, suddenly collapses, because low Gold prices cannot possibly be paper-"engineered" anymore ?

Will lower oil prices signal that new available physical has been found to satisfy the flows ? Or will the golden euro, stop the past oil/Gold flow deal ? This when the dollar has given up ?

Any RELIABLE statistics available on the evolution of ME Gold stashes ? Could be a nice piece of evidence for the theory. Any Gold Sherlocks out there ?

Black Blade
Is it really the heat?
http://money.cnn.com/2002/08/19/news/retail/index.htm
Retail sales are drying up, and companies are blaming the weather. Is that the only problem?

Snippit:

NEW YORK (CNN/Money) - It was too dry. It was too wet. The snowstorm kept customers away. The thaw cut into Flexible Flyer sales. Blaming the weather is one of the great traditions of America's retailers. Now it's the heat that's stifled sales, of course. Despite strong quarterly results on Monday from home-improvement retailer Lowe's, there are signs that with the mercury rising, customers' desire for new merchandise has evaporated. In its weekly sales call Monday, Wal-Mart (WMT), the nation's largest retailer, said that back-to-school-sales were "off to a slow start as warm weather has affected apparel sales," and that overall sales were near the low end of its expected range. (Fun fact: Wal-Mart accounted for over 9 percent of U.S. non-auto sales last year.)

Let's hope that it really is the heat that's got sales wilting. If not, the sharp slowing the economy saw in July may have been something worse than an air pocket in the ascent to recovery. With business spending still flagging, a slowdown in consumer spending could send the economy back into recession.


Black Blade: Yeah, right. I remember Abby Jo of Goldman Sachs and Dana Telsey of Bear Stearns saying last year that is was too cold. It is sounding more like "Goldilocks and the Three Bears" story. No, it is simply that consumers are tapped out. They see their friends and relatives being tossed upon the growing "Bone Pile", their stock and retirement accounts under water, and are unable to draw upon anymore plastic debt or add a third (or more) mortgage to finance spending. It's the end of the road for many. The only heat is that which is being applied by the creditors. Besides, cars are air conditioned and malls are air conditioned. What a lame excuse � can people really be that lazy? Hmmm�

Remooz
Insider purchases of JPM stock
Long-time lurker;first-time poster.Thread much appreciated.

According to my source ("Vickers Weekly Insider"---www.vickers-stock.com August 7 issue) ten different J P Morgan Chase insiders BOUGHT a total of over 100,000 company shares in late July.

IMHO,unless this is terminal stupidity or a collective psychosis on their part, it does not coincide with a company presumably in dire straits as regards gold derivatives
or any other serious difficulties. As a long-time gold devotee I find this somewhat disquieting. Any thoughts?
Socrates964
Sierra
Sierra -I stand corrected -was merely arguing theoretically from Another's discussion.
mikal
@Remooz
Welcome to the forum! I would be surprised if the ten insiders would make such purchases with their own money.
Black Blade
Cingular to cut 3,000 jobs
http://money.cnn.com/2002/08/20/news/companies/cingular_layoffs/index.htm

Snippit:

NEW YORK (CNN/Money) - Cingular Wireless said Tuesday it will cut as many as 3,000 jobs, or 7.5 percent of its work force, as the No 2 wireless provider, facing a tough time for the telecom business, tries to cuts costs and streamline operations.

Black Blade: The "Bone Pile" is set to grow some more.

Socrates964
Remooz
a) When were the purchases done (surely not at the 7/24 low, surely not)?

b) Only $2m or so between 10 people - not exactly a huge amount.

c) Did JPM lend them the money (public relations exercise - look our top execs are really confident about our derivatives biz) or did they know that their stock was about to hit the critical $20 level and bounce (surely not?)? Or did they just read Citibank research and decide that JPM was a great fundamental investment (most likely IMHO ;))?

Sierra Madre
Belgian, regarding Cheap Oil for Cheap Gold.

"Entre nous", I don't think that any such arrangement would be likely, notwithstanding the arguments of venerable posters at this Forum.

Gold cannot be used to "pay for oil", even in part, because there is not enough of it, even at cheap present prices.

Gold was, in the past, used for settling small amounts in trade balances, not for payment of goods, for the same reason.

The oil exporters have taken dollars, period. Thought they were excellent and loved getting them. "Invested" in Gov't securities, shares of Western companies, interest-bearing deposits, also direct investments. Yachts. Planes.

For the most part, as handlers of large amounts of money, they have behaved like their Western counterparts. Dumb!

That's my feeling, FWIW

Sierra
sector
Egypt will not let US warships pass through Suez Canal
What will Iran do?IRAQ:
Att.Editors: The following item is from the Qatar News Agency (QNA)

AMMAN, Aug. 17 (IPS) - Dr. Oasma Al Baz, political advisor to the Egyptian president, said Egypt will not allow passage through the Suez Canal of US ships headed to strike Iraq.

In statements published here Saturday he added Egypt rejects any military operation against Iraq, its territorial unity, independence and safety of Iraqi people, adding any military attack on Iraq represents a vary dangerous step endangering the security of the region.

Dr. Al Baz said the question of UN weapons inspectors is an issue which concerns the UN and the Security Council and not Washington and the US has no right to take any military action against Iraq nor has the right to interfere in the internal affairs of another country and impose a set-up of new leadership on its people. (QNA)
= 08171520 ORP011 NNNN
(END/2002)
++++++++++++++++

When one thinks about Iraqi War ripple effects, this is only one.

@Belgian - When strangers pop up here to quickly sooth everyone's fevered brow about a possible devaluation, you know that somebody at a .gov domain is watching and worrying that the cat may be out of the bag.

The top two Fed banks [C, JPM] are hanging by a thread, waiting for the litigation death sentence to be delivered and everybody on the street knows it. JPM's $29 Trillion derivatives book doesn't pass the smell test with a .2% capital to notional value ratio where the industry standards are 2%. That means that the industry buys $100 worth of derivatives for $2 while JPM slips gets the same derivatives for twenty cents. The smoke is billowing out of their headquarters.

Is a deval possible? In the last 68 years the US has already had two. The 1934 Gold Reserve Act and Richard Nixon's 1971 repudiation of gold debt. Nixon's was a ten X devaluation of the dollar in relation to the months later equilibrium price level of gold.

The list of pure bearish macroeconomic facts is so long that one tires of reading it. At the end of the day the debt has risen to unsupportable levels in Japan AND the US. Can anybody imagine the reaction to a tax INCREASE proposal in these times?

The UK once tried to hold a two-tier gold system. It will fail in today's internet world.

If the US cannot afford to inspect incoming container shipments for terror weapons they cannot afford to inspect incoming gold shipments either.

The key is to accept the premise that the government is not out to help its citizens. It is out to aide the banking cronies on Wall Street and the Congressional cronies in Washington. The latest IMF/ Brazil flap is the most noticeable corruption. Mr. Rubin is once again at the core of the scandal.

Black Blade
Egypt will not let US warships pass through Suez Canal
http://www.ipsnews.net/interna.asp?idnews=11683

Snippit:

AMMAN, Aug. 17 (IPS) - Dr. Oasma Al Baz, political advisor to the Egyptian president, said Egypt will not allow passage through the Suez Canal of US ships headed to strike Iraq. In statements published here Saturday he added Egypt rejects any military operation against Iraq, its territorial unity, independence and safety of Iraqi people, adding any military attack on Iraq represents a vary dangerous step endangering the security of the region.

Black Blade: The stakes are rising in the Middle East.

BTW, oil inventory rose 6.6 million barrels last week and the POO is falling back tonight.

Belgian
Re :
@ Sierra Madre: ECB issued : 642 billion � notes + 15,7 billion � coins = 657,7 billion �.
The EMU-12 have 12.000 Tonnes of Goldreserves in the CB's vaults � 10.000 � / Kg = 120 billion � on Goldreserves for a total of 657,7 billion � issued = 18 % Gold reserves on the total notes/coins in circulation for the EMU-12.
Can you do the same for total dollar notes and coins in circulation ? TIA

@ Remooz : Hi Sir. When JPM, recently, was valued lower than its bookvalue (21$)...there was an exceptional huge volume under the 20$. Now 27$. All theories are open here. But a valuation of JPM under bookvalue is claimed to be extremely dangerous for their financial health. We will never know who was behind these 100.000 shares buys ? But the reasons why so much shares were bought on that particular value, seem obvious.
Remooz
Reply to Socrates
Dates of JPM Insider purchases were July 24,25,26. Thanks for your comments!
sector
@remooz The JPM "Buys" were on the day that the stock...
...barely held $20, closing at $20.08The insiders were "Encouraged" to buy shares by senior management since a failure to do so would have led to quick bankruptcy as their derivatives are reliably reported to be linked to a $20 JPM closing price. In other words, if the stock had closed at $19.99 their derivatives with that risk stipulation would have become callable. JPM doesn't have the cash to pay those "Derivative calls". Such a state is equivalent to a bond default. The contribution amount was about $27 million.

Welcome aboard!
Sierra Madre
Touch�, Belgian! I am hit!
BUT, if you would be so kind, tell us the total M1 of Euros: that means, coins, bills, plus checking accounts and other demand deposits. I don't think the percentage would look so impressive against that total.

This, apart from the fact that reserves are for the moment, only "window dressing" as there is not any sign of a commitment to redeemability, which is the purpose of reserves after all.

IF gold should rise very strongly, then the redeemability might come into being. For the moment, it is out of the question.

Sorry, I have no data for the U.S.- Irrelevant in any case!

Saludos

Sierra
Belgian
@ SM : cheap oil/cheap Gold
OK Sir, let us leave the eventual agreement(s) on the Gold/oil flows, open and neutral up until evidence of it pops up.
But...Australia's second biggest export/product/volume = GOLD TO THE EMIRATES !!! This Gold must be paid for with oil profits and they have bottomless boxes to fill with the precious portable. Their appetite for Gold isn't declining, regardless of whatever degree of modernization. Gold they want and Gold they must get. As much Gold as there is oil-reserve under their sand. Replacing the depleting black precious for the eternal yellow one, at increasing pace.
Aussie Gold export figures are evidence. Dubai Gold Bazars are bathing in bullion. Agreement or not, oil and Gold are related anyhow. D'accordo amigo ?
Waverider
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.htmlBest Gold Market Report on the Web....
Blackjack
Saudi money leaving US
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185908113&p=1012571727088Disgruntled Saudis have pulled tens of billions of dollars out of the US, signalling a deep alienation from America.

One analyst said the total funds withdrawn by individual investors amount to $200bn. Other bankers put the figure nearer to $100bn.

The US-Saudi alliance was put under severe strain after September 11, when 15 of the aeroplanes' 19 hijackers were Saudi nationals.

Accusations that Saudi Arabia's austere brand of Islam breeds terrorism and its charities finance Osama bin Laden's al-Qaeda network have been perceived in the kingdom as attacks on Saudi society and its religion.

An analyst from the Rand Corporation said at a Pentagon briefing this month that Saudi Arabia was the "kernel of evil", exacerbating concerns among the country's elite that they have become demonised in the US and their money is no longer safe there.

As part of the fight against terrorism, the US and Saudi authorities have been monitoring the accounts of dozens of Saudi companies and individuals, a move that alarmed Saudi merchants. Youssef Ibrahim, a senior fellow at the Council on Foreign Relations working on a project re-examining US-Saudi relations, said Saudis had withdrawn at least $200bn from the US in recent months. He said the move has been driven by hawkish US commentators' calls for the freezing of Saudi assets.

The trend, he added, can be expected to accelerate with last week's trillion-dollar lawsuit by relative of the victims of September 11. The lawsuit accuses several Saudi institutions and charities and three members of the royal family, including the defence minister, of financing terrorism.

Details of Saudi investments in the US are sketchy but financial analysts believe they range between $400bn and $600bn. The funds are invested in private equity, the stock and bond markets and real estate. The figures include investments by members of the royal family.

Investors are not thought to be closing down their US accounts. Instead they are moving money into European accounts. Bankers in London said the largest established Saudi investors did not yet seem to be following the trend.

One said: "I'm sceptical about a mass exodus. But there was a lot of Saudi money with American banks that was not diversified, now they [the Saudis] are spreading their wings. Perhaps 30 per cent to 50 per cent of the money that was with US banks is seeking diversification."

The Saudi money shifts may have contributed to the recent downward pressure on the dollar.

"People no longer have any confidence in the US economy or in US foreign policy," said Bishr Bakheet, a financial consultant in Riyadh.

"And if the latest lawsuit is not thrown out in court, it will mean no more Saudi money in the US."
__________________
The saudi's are angry over a huge lawsuit filed against the entire
Saudi nation. This lawsuit was designed to create more friction
between the US and Saudi. The US media is trying to provoke a war
between the US and several moslem nations. I can't think of worse
news for the US. This could lead to the end of the US dollar as
the world benchmark currency. US occupation of millions of square
miles of the middle east is the fantasy of madmen.
Boilermaker
Bush Plan "B" for ME?
With an Iraqi pre-emptive strike dropping from favor why not find a new target? A target with strong al Queda presence, with lots of oil and maybe lots of gold. Hey! That sounds like Saudi Arabia.

Now, how can we make it look legit?

Maybe we can create a crisis. Yes! Let's whack the king and put some aQ fingerprints on it. Everyone knows the royal family is up for grabs and the radicals are gaining. Let's just accelerate the process to create a "window of opportunity" to intervene and "stabilize" this long time ally. After all, we already have bases there and don't need an invasion to take control. We install some "friendly" Princes and "guide" their governance to our benefit. Now we have secure oil and the base we need to keep the pressure on Saddam.

Sounds like a plan.
Sierra Madre
Oui, M. Belgian!
Et, apres tout, le denouement est tres, tres claire.
L'or vaincra, sans dout aucune. Question du temps, seulment.
Laissons jouer les petits enfants.

Sierra
Gandalf the White
WELCOME Sir Remooz !! Here is my thought on JPM Ex "Gifts"
Remooz (08/20/02; 15:06:09MT - usagold.com msg#: 83391)
Insider purchases of JPM stock
===
The story that the Hobbits heard, was that the "Execs" planned a "show of FAITH" in their company by the purchase of stock ! OF COURSE they did this on-camera and fully understanding that new Stock Purchase Offer agreements were around the corner for all that joined the party ! BUT, we here all know like Sir Black Blade says, "Putting lipstick on PIGS, is the Game" !!
++
AND, yes all -- MY operation was a success and the Wiz is WHITE again, BUT operating in only first gear !
<;-)
Belgian
@ SM
Right you are amigo. Notes and coins in circulation are only a ***VERY*** tiny fraction of the total confetti piles !!! But our excercises on Gold and Goldreserves are relative ones, as on the comparaisons between two competing currencies (total management) with reserve-ambitions (euro and dollar). Don't forget that 38 TRILLION US$-Bond (debt)figure. Or 4 times the dollar issuer's (US) GDP ! This is certainly not the case for total euro debt in the same proportions.

Wich total debt on dollar or euro is still servicable/managable ? And to wich currency will a revaluing POG be at the most help ? 12.000 tonnes of Euroland Goldreserves or 8.000 tonnes US Goldreserves ?
Why do you think that M. Friedman is advising the UK not to join EMU ? Ignoring the euro is at the dollar's peril, sooner or later. And the euro is still ignored, stubbornly and purposely by the dollarblock. The geopolitical situation would have been much simplier if the dollar's supremacy was left unchallenged. See you tomorrow.
misetich
U.S. Budget in July Shows $29.2 Billion Deficit
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWKxfBJEVS5TLiBCSnip:

By Brendan Murray


Washington, Aug. 20 (Bloomberg) -- The U.S. government budget deficit in July was the widest for that month since 1994, as a slow economy limited tax revenue and spending increased to boost growth and wage the war against terrorism.

Last month's $29.2 billion deficit compared with a $2.8 billion surplus in July 2001, the Treasury Department said. It was the biggest for July since a $33.2 billion shortfall eight years ago.
.............
``One of the foundations of the strong economic performance of the 1990s was perception that the U.S. had its fiscal house in order,'' said Louis Crandall, chief economist at Wrightson Associates, a New York research firm. ``With many of the other elements of the strong economy having disappeared, it would be a further blow to confidence if that pillar were taken away.''

Ten months into the current fiscal year, the deficit is $147.2 billion, a $319 billion swing from a surplus of $171.8 billion for the same period a year ago. The government recorded surpluses for the past four years, the longest string since 1920- 30, before the Great Depression.
************
Misetich

Perception is not reality - though it can con a lot of people and it did -
Enron typifies this "illusion, perception" - at the end it was an empty shell -

However the ponzi scheme is falling apart -

Got gold?
misetich
Oil's Rally to $30 Poses Limited Threat to Growth
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWK0TBPJT2lsJ3MgSnip:

By Stephen Voss

New York, Aug. 20 (Bloomberg) -- Crude oil's rally above $30 a barrel for the first time in 15 months will raise costs for importers and consumers without derailing a U.S. economic recovery, economists and analysts said
............
The increase in oil prices of about $9 a barrel this year will take time to be reflected in the economy, said Gemma Wright, director of research at Barclays Capital Inc. in New York.

``We use a rule that for every $10 jump in the oil price it slows the economy by about 0.3 percentage point of GDP annual growth, with a six-to-twelve-month lag,'' she said.
*********
Misetich

I guess $29.99 won't do it for this "economists and analysts"

Shipping costs, etc will increase corporate costs - reducing earnings- reducing stock market value, increasing defaults etc etc etc

Got gold?

misetich
GM says pension obligations "manageable" - Feldstein also said that, under accounting rules, GM is not required to make any contributions to its pension until late 2006.
http://www.forbes.com/newswire/2002/08/20/rtr700746.htmlSnip:

By Michael Ellis

DETROIT, Aug 20 (Reuters) - General Motors Corp. (nyse: GM - news - people) Treasurer Eric Feldstein said on Tuesday that the company's hefty U.S. pension obligations are manageable, and the company is still targeting earnings of $10 per share by mid-decade.

"GM's funding obligations appear quite manageable," Feldstein told analysts and reporters on Tuesday. "GM continues to target its $10 (earnings per share) by mid-decade," he said.
.............
Due to the sharp sell-off of the stock market, GM's U.S. pension fund has lost three percent on its investment during the first six months this year. GM's $67 billion pension plan covering more than 630,000 active and retired U.S. workers began the year underfunded by $9 billion.

But the pension plan is very sensitive to interest rates, Feldstein said, and a rise in rates could dramatically improve the funded status of the plan.

Feldstein said expenses for the pension plan will likely rise this year, but will be offset by further cost cutting and more contributions to the plan. GM has already contributed $2.2 billion to the plan this year.
............
Depending upon the return of its pension investments, GM could expect to have to contribute, before taxes, between $6 billion to $12 billion to the plan through 2007, GM officials said
***********
Misetich

GM is hoping for a return of the good times rather than a "recovery Japanese style"

Got gold?
Graham
Depression/Recession - What it means to me.
I've quit believing in the 36,000 Dow. I'm definitely a gold convert, though not a buy and hold gold stocks fan with the wild moves lately. I'm getting to know more about finance and the economy than I ever thought I would.

But, I do not really understand what a severe recession/depression would mean to me. As a no-debt fixed income retiree, inflation has been more of my long term concern. What can I expect from the alternative?

Graham
misetich
Bill Gates says expensing options won't hurt techs-But Gates, co-founder of the world's largest software maker and one of the world's richest men, reiterated Microsoft's stance that it has no plans to join the growing ranks of companies that have begun expensing options in a bid to improve investor confidence.
http://www.forbes.com/newswire/2002/08/20/rtr700729.htmlSnip:

By Jeffrey Hodgson

TORONTO, Aug 20 (Reuters) - Microsoft Corp. (nasdaq: MSFT - news - people) Chairman Bill Gates said on Tuesday there would be little impact on technological innovation if hi-tech firms began accounting for employee stock options as an expense.

But Gates, co-founder of the world's largest software maker and one of the world's richest men, reiterated Microsoft's stance that it has no plans to join the growing ranks of companies that have begun expensing options in a bid to improve investor confidence.

"I don't think a change in the way the accounts are done would have some major impact on technology. The numbers are there in every quarterly report. There's full disclosure. So it's hard to think: would that make some dramatic change in behavior?" Gates told a news conference in Toronto.
...........
In its latest earnings statement, Microsoft said fourth quarter net income would have been $903 million instead of $1.53 billion if it had to expense stock options. Microsoft said last month it would stick with the tech sector's practice of not listing employee options.
*********
Misetich

There you have it - "leadership" of the new and improved corporate governance and reporting
and no wonder, here's why
Quote
"Some industry watchers have said small tech companies in particular could see their bottom lines pushed deep into the red by the policy"
End of quote

Business lobby groups are powerful - they won't change their ways - but economic reality will

Got gold?
misetich
Junk bond default rate edges down in July-Moody's- In terms of dollar default volumes, July hit a record, surpassing the $19.1 billion in April, Moody's said.
http://www.forbes.com/newswire/2002/08/20/rtr700682.htmlSnip:
NEW YORK, Aug 20 (Reuters) - The global junk bond default rate edged down for a second straight month in July but remained above 10 percent as soft economic conditions kept credit quality in a slump, Moody's Investors Service said on Tuesday.

Worldwide, 16 issuers defaulted on a total of $33.4 billion of debt in July, rating agency Moody's said. The global junk bond default rate, which is based on the number of issuers defaulting, fell to 10.1 percent in July from 10.3 percent in June, Moody's said.
***********
Misetich

Telecom debt is in the trillions and the industry isn't going anywhere but down - defaults will keep on being dragged out

Got gold?


misetich
Talk From The Trenches: Wall Street Journal where an article entitled "The Global Economic Outlook Appears Shaky for Rest of Year
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1029854700000&sn=1&banner=mainwireSnip:

Meanwhile, folks are not getting any reassurance from the Wall
Street Journal where an article entitled "The Global Economic Outlook
Appears Shaky for Rest of Year" is getting noticed. The story warns that
the outlook is deteriorating amid fading optimism. It cites losses in
U.S. leading indicators, the weak outlook issued by Germany's Bundesbank
and lower private growth forecasts. And it has former Fed Governor
Meyer, a most respected forecaster, saying we are in a "vicious cycle"
where no country has taken on responsibility for growth leadership.
..............
A number of economists commented on the Fed's Senior Loan Officers'
survey released Monday. They say current financial market problems are
related to credit. Economists at Goldman, Sachs say the survey indicates
banks tightened their standards at a slower rate but "in contrast, bond
markets remain very reluctant to extend credit to lower-rated firms."
They find there is no full-blown credit crunch. Economists at Salomon
Smith Barney say they were surprised the Fed study improved from April.
But "the latest few quarters of data appear very similar to the lending
thaw evident in the first few quarters of the last recovery," SSB says.
**************
Misetich

Wall Street Journal Reporters must be reading the BEST FORUM IN THE WORLD

Thank you - USA GOLD and all the staff

Got gold?
misetich
Reality Check: US Cargo Execs See Wicked Trade Deficits Ahead Aug 19 / 8:57 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=62&banner=mainwire_featuresSnip:

Reality Check: US Cargo Execs See Wicked Trade Deficits Ahead Aug 19 / 8:57 EDT

By Gary Rosenberger

NEW YORK, Aug. 19 (MktNews) - The record-breaking import tide of
the past few months abated briefly in early July before roaring back by
mid-month and into early August, say U.S. cargo and port executives.

Wickedly huge trade deficits are expected for both June and July,
most officials say.

One driver of inbound flows had been nervousness ahead of a West
Coast longshoremen's contract that expired at the end of June. But the
deadline came and went without a contract renewal and, more importantly,
without incident, and steamships continue to come in heavily laden,
officials say.

June is almost certain to set another trade deficit record, and
July, August and beyond are likely to remain at around June's elevated
levels as imports surge and exports decline, cargo officials predict.

A lull in July was anticipated, but it proved transitory. The
renewed import wave suggests retailers are betting on the consumers'
version of the economy, rather than the stock market's reading of it.

Byron Miller, a spokesman for the Port of Charleston, foresees
startling trade deficit data ahead for June and July.

"I think we're going to see some incredible trade deficit numbers
based on the import growth we've seen and the total lack of movement on
exports," Miller said.

"July blows me away, not only for the pitiful amount of exports
going out through Charleston -- the worst we had in six years -- but
also the volume of outgoing empty containers, which was just
tremendous," he said.

Outgoing empties reflect the gap between imports and exports, and
often anticipate the quantity of inbound volumes to come. Over June and
July, outgoing empties were above 26,000, versus previous benchmarks of
12,000 to 17,000 "with highs in the low 20s," Miller said.

"Conversely, inbound empties are at record lows, which is not
favorable to an export position," he said.

"The chain stores are still bringing in heavily," said Guy Fox, an
executive vice president of customs services at Global Transportation
Service, a division of Stonepath Logistics Group, in Los Angeles.

"What's happening is they're paying more attention to what
consumers want than what the stock market is doing," he said. Based on
the amount of cargo he's handling, Fox expects stores to fully stock up
for back-to-school, Halloween, Thanksgiving and Christmas.

"July will be very strong," Fox said. "We had some of the biggest
weeks we ever had since we've been in business." Global Transportation
saw inbound volumes rise 20% from last July and about 5% over the prior
month.

"Retailers will have a lot of stock on their shelves this
Christmas, no matter what. That I can tell you," Fox said.

Jitters over potential dockworker slowdowns, lockouts and strikes
that never materialized did push back the peak shipping season this
summer as steamship companies and their customers brought in goods ahead
of the June 30 expiration of the West Coast longshoremen's contract.

"Unions and employers all whine and rattle their sabers, but so far
there's been no work slowdown and no strike, even though the bargaining
committee has strike approval," Fox said. Nor has there been a lockout
despite repeated threats by employers.

Fox is connected to both the longshoremen and the Pacific Maritime
Association, which represents steamships and ports, and he sees neither
seem bent on a course of mutually assured destruction.

"I know the longshoremen don't want to strike and the PMA is
willing to delay some technology issues until the next negotiation five
years from now," he said.

Meanwhile, early August imports "seem to be holding up," Fox
continued. "There is a steady flow of documentation coming in, and I
think volumes will hold at current levels until October or November."

The only bottleneck he sees at this juncture is airfreight, which
is particularly tight. "Payload space is shrinking as airlines reduce
fleets and international flight schedules," Fox said.

Art Wong, a spokesman for the Port of Long Beach, described a surge
in June inbound cargos, up 16% from the year prior, which he attributed
in part to pre-shipping ahead of the expiration of the longshoremen's
contract.

July is a tougher call because it started out slow but then quickly
bounced back to around June's levels. Wong had no preliminary data for
July at this writing.

Wong sees no connection between the tribulations of the stock
market and the amount of consumer goods being brought in. "We're still
hopeful of growth" during the peak season, he said.

But he also suggests retailers this fall would quickly respond to
any evidence of a drop in consumer confidence. "They might be a little
more cautious going into the fall," he said. "Imports might not be as
strong as they were in May and June, and things could level off until
retailers see better signs that the economy will bounce back."

July data at the Port of Los Angeles, the nation's largest, is
ambiguous. On the one hand inbound container volumes eased 11% from a
record-shattering June, but rose 9% versus last July.

Outbound volumes declined 4% versus a year ago.

Theresa Adams Lopez, a port spokeswoman, said the downturn from
June could be attributed to heavy pre-shipping ahead of the contract
talks, while the upturn from a year ago suggests continuing strength in
the consumer economy -- especially for merchandise related to a robust
housing market.

A steamship company official saw a drifting off in inbound cargos
early in July that soon after came steamrolling back.

"Right now the prognosis is that it will continue. Wal-Mart and
Target are bringing in a staggering amount of cargo," said the official,
who spoke on condition of anonymity.

Part of the reason is "cheap freight," he said. But steamship
companies are hoping to profit from the demand for freight, with a move
afoot to increase rates from their current bottoms. A general rate
increase set for Aug. 19 will raise the cost of a 40-foot container from
Hong Kong to Los Angeles to $1,200 from $900, a 33% increase, should it
stick.

"I can also tell you that no one makes money shipping for Wal-Mart.
They drive a hard bargain," he said.

He credited the strong imports to inventory building ahead of the
holiday retail season on top of a need to replenish inventories that
were depleted earlier this year.

The U.S. Commerce Department is scheduled to release international
trade data for June on Tuesday at 8:30 a.m. EDT. May's trade deficit was
a record-breaking $37.6 billion. The above commentary referred to June,
July and early August.

Editor's Note: Reality Check stories survey sentiment among
business people and their trade associations. They are intended to
complement and anticipate economic data and to provide a sounding into
specific sectors of the U.S. economy.

[TOPICS: MAURC$,M$U$$$]

************
Misetich

Reprinted in full for educational and fair use only -

Trade deficit is going to get worse - Retail sales growth is falling - inventories are rising -

Got gold?






goldquest
@Gandalf the White
Best wishes for a speedy recovery and a smooth shift into high gear! Good to see you posting. goldquest
sector
@Graham - How Inflation/Deflation Effects Fixed Income Folks
It All Depends At What Interest RateYour Income Has Been "Fixed"AND What vehicles that "Fixed" income derives from.

AAA Corporate bonds are fine...for now. Even in severe deflation those corps will survive and their bonds will have trustworthy yields.

With inflation your AAA income coupons will be severely eroded. Their face value stays the same everything else that matters goes up in price.

The risk of a massive credit accident in the US grows and the only way to survive that will be through precious metals or its unhedged, debt-free shares. Mind you there are very few precious metals miners in THAT category. The example of Argentina should not be dismissed. Depositors lost 75% of their life savings practically over night. They trusted their government...their elected officials.

With the recession looking like a multi-year phenomenon, the stress on non-AAA rated bonds will be rising and their survival can be called into question.
Max Rabbitz
Sounds like Sweet 16 made the NY Post
http://www.nypost.com/business/55072.htmEVEN 15-YEAR-OLD KID IS MAD AT WALL ST. FAT CATS By JOHN CRUDELE

Of course this letter was before the birthday and pink car. She is no longer just a kid but a young lady and a few steps ahead of her class.
Black Blade
Market Wrap Up � Puplava
http://www.financialsense.com/Market/wrapup.htm

Snippit:

What is even more disconcerting for Wall Street and Washington is the upcoming September/October reporting season. This is traditionally one of the worst periods of the year to be invested in stocks, and this year will be even worse. If I was a betting man, I believe that we are more likely to get a full-blown market crash, triggered by an unseen event, either geo-political or financial, that could send the markets into the abyss. Add to this all of the upcoming disappointments heading our way in the form of profit shortfalls and another recession, and it isn't hard to see the next leg or turn in the markets is going to be "hard down;" in other words, a stock market crash. This crash should be strong, fast and deep enough to shake the very core of the markets and shake the remaining apples from the trees. The next leg is going to be a seminal event. If investors haven't realized that we are in a bear market, they will certainly realize it after the next leg down. That is when the real fear factor comes into play. Up to this point, investors have been hanging on in the belief that the markets would recover and another bull market would develop. Most investors, even though the Nasdaq has lost over 70% and the S&P 500 over 40%, have viewed the first leg down as a correction and not a bear market. Everyone still believes that better times are ahead.

Most people can't remember what a real bear market is like. We've had only two major bear cycles in the last century; one in the 30's and the other one in the 70's. Most experts and investors feel what happened in the 30's and the 70's in the US, and the 90's in Japan, can't happen here again. They are about to get a painful history lesson. This one will be more painful than the bear markets in the 30's and the 70's in that there are more Americans invested in stocks today than in any other period of history in the markets. Instead of facing these realities, most investors are in a state of denial. The WSJ and CNN recently did a story on why investors are phased by the downturn. Most are complacent and have stopped looking at statements, refusing to deal with reality. That is why the next leg down, which I believe starts this fall, will be a powerful one because it will be driven by fear. Fear has been one of the missing ingredients in this bear market. Years of rising markets and financial advertising have done their job. They have left investors in stocks while insiders have fled the markets. They know more than anybody else what is happening to their companies, which is why they have exited the markets.


Black Blade: I agree. There is absolutely nothing to give any hope short of a massive intervention. Now we have Congress and the SEC thumping their chests in a big "dog and pony show" designed to show that "they care". Crooked corporate executives are being trotted out for the weekly "perp walk" while most of America ignores the weakness in the global economy. We see booming bankruptcy filings, record levels of corporate and consumer debt. Everyone is on the verge of being tapped out and the real estate bubble is already showing some cracks as income levels simply cannot keep up with the rapid rise in real estate values. Today I watched a report on "interest only mortgages". This is where only interest is paid but not the principal so there is no equity buildup. After a few years the loans are readjusted with accompanying "balloon payments". That is a recipe for disaster � it is also in sane! However, this also puts lenders on the hook for when the bubble bursts and these "renters" walk away from overvalued homes. As always, get out of debt now (or as soon as possible), stash enough cash for several months expenses, get Gold and Silver portfolio insurance (before investments completely implode), and start a storage program of nonperishable food (given the worsening drought and declining grain supply) and get stores of basic necessities. It could get very ugly, even more so than I thought possible a few months ago.

Black Blade
Trade Deficit Remains Near Record
http://www.washingtonpost.com/wp-dyn/articles/A39092-2002Aug20.html

Snippit:

WASHINGTON �� The U.S. trade deficit narrowed only slightly in June to $37.2 billion, still the second biggest deficit on record, as an improving economy pushed demand for imports to the highest level in 15 months. The Commerce Department reported that the June imbalance between what America sells abroad and what the country imports was down a tiny 1.8 percent from the record high of $37.8 billion set in May.


Black Blade: The deficit is still running at an all time record pace. Why not more? Attribute that to the ongoing "Currency War". The global economy is in trouble � not just a few isolated countries.

Waverider
Lady Sweet Sixteen
Way to go!!! You are both an example and an inspiration. Never let anyone tell you that your voice doesn't matter - it DOES! Hmmm...I sense true leadership qualities in you - Wall Street had better watch out! :)
Lady Waverider
slingshot
Gandalf the White
*****************************Well you slid one by me Gandalf the White. I thought this "Operation" was part of the story. Was even more confused by Waveriders, "Golden Angels". Said to myself, Alright where do we go from here. Never claimed to be the sharpest knife in the kitchen. Glad to see you are alright and wish you a speedy recovery.
Slingshot-----------------<>
Blackjack
Germany will NOT sell Gold to help with flood damage
BERLIN, Aug 20 (Reuters) - German Finance Minister Hans Eichel said on Tuesday he was ruling out any suggestion of selling Bundesbank gold reserves to help finance government efforts to help the victims of devastating floods.

Eichel also reiterated to journalists after a budget committee meeting in Berlin that Germany would fulfill the European Union budget deficit criteria despite the financial burdens from the worst-ever floods that hit have the eastern region in the last week.

"This would violate international agreements and moreover it would lead to a fall of gold prices which is not in the interests of the government," Eichel said.

The Bundesbank has about 3,500 tonnes of gold worth about 39 billion euros. The Bundesbank is the world's second-largest official holder of bullion after the United States.
__________________
My ,my ,my Gold Bugs in der bundasbank?
Usually governments and banks are senile.
I wonder how many banks wish they had not sold all that gold
back in the roaring tuliptech days?
Can't wait for the Gold Dinar next year.
Real money free of debt liabilities of bankrupt,lying,thieving
politicians who make an art of mortgaging nations futures so
they can get their stinking butts re-elected today.
silvercollector
What does this mean.............bullish/bearish (for gold)
Quote:

"Hedge funds and other large speculators have sold more gold futures contracts than they have bought for the first time since the beginning of the year, a commodity Futures Trading Commission report showed.

The "short" position amassed by large speculators outnumbered their "long" positons by 476 contracts as of Tuesday, making it the first net-short position since January 1, the weekly report showed.

Speculators' gold futures purchases had contributed to a surge in prices to a 2 1/2 year high of #331.50 an ounce on June 4, two weeks after their net-long position peaked at 46,914 contracts. Gold traded at #315.40 yesterday on the Comex division of the New York Mercantile Exchange. Bloomberg "
sector
@BlackJack The German Finance Minister Mr. Hans Eichel...
...opposes the sale of Bundesbank gold to possibly aid flood-ravaged regions. He said "For the good of the German people".

There is another reason for him to oppose the sale of German gold...
It has ALREADY BEEN SOLD.

In the Washington Agreement pog run-up to $338 and subsequent knockdown.

No wonder the good minister is so frugal with the German people's gold.

Fix in your mind the political situation IF the news of that supposition were released to the public in the wake of Europe's devastating 2002 floods.
slingshot
Sweet Sixteen
******************Outstanding!
Slingshot------------------<><><>
misetich
Investors head for bonds as US trade gap widens
http://www.guardian.co.uk/usa/story/0,12271,778014,00.htmlSnip:

Investors scurried for the safe haven of government bonds yesterday, unsettled by official figures underlining the size of America's gaping trade deficit.
The US is on course to notch up a $400bn (�262bn) shortfall between exports and imports this year, with the June deficit of $37.2bn only slightly lower than the record of $37.8bn set in May, according to figures published by the commerce department.

Wall Street fell 130 points on the news, and the gloomy mood infected share trading in London. The FTSE 100 index of leading shares closed 57.9 points, or 1.3%, lower at 4,368.9, its first loss in four trading days.

"Investors are still very hesitant to enter the market," said Diane Garnick, global investment strategist, State Street Global Advisors.

"What we're seeing is almost no new dollars being invested in the market, and, at the same time, lots of dollars leaving the market."

Some analysts suggested increases in both exports and imports in June could be a sign of a recovering American and world economy.

"The trade deficit may be outrageously wide, but the rise in both exports and imports point to continued economic growth both in the United States and around the world," said Joel Naroff, head of an economic forecasting firm in Pennsylvania.

But with the US having notched up its three largest ever deficits between April and June, most economists be lieve the dollar is set for a renewed fall against the currencies of its trading partners.

"US treasury secretary O'Neill is banking on stronger trade to give third quarter growth a lift," said David Brown, chief economist at Bear Stearns in London.

"This seems a forlorn hope as the US economy's recent nosedive has spread abroad. As long as this happens US trade will not improve; the only way it will improve is if the dollar slides."
***********
Misetich

Worth repeating

"What we're seeing is almost no new dollars being invested in the market, and, at the same time, lots of dollars leaving the market."

Got gold?
Waverider
Sirs Gandalf / Slingshot
Yes - best wishes for a speedy recovery Sir Gandalf! Good to see you back. Slingshot - "Golden Angels" must have been an inspired blessing and I only the messenger - I too thought it was part of the story! Gotta run - off to prepare for a dance (really!) Cheers,
Waverider
mikal
@Blackjack
"...an art of mortgaging nation's futures so they can get their stinking butts reelected today." Well said, and for campaign contributions, they will do that and more. With upcoming congressional elections, corporate fraud will be treated lightly, as any bad news under their watch impacts faith in the political process. Unless there are plans for a world government this year, to what extent will vested interests go to paper over losses, whitewash scandal, and postpone rebuilding?
misetich
Should Old Folks Be Concerned About the New CPI?: Caroline Baum
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Caroline%20Baum&touch=1&s1=baum&tp=ad_topright_bbco&T=markets_fgcgi_content99.ht&s2=ad_right1_bbco&bt=ad_bottom_bbco&s=APWKBExVyU2hvdWxkSnip:


New York, Aug. 20 (Bloomberg) -- With little fanfare, the Bureau of Labor Statistics introduced an alternative consumer price index last Friday, along with the old CPI we have come to know and love. While the CPI rose 1.5 percent in the 12 months ended July, the new ``chained'' CPI for all urban consumers, or C- CPI-U, registered a smaller 1.1 percent increase.

When one considers that some 30 percent of all government expenditures have a cost-of-living adjustment attached to them, the 0.4 percentage point difference between the two indexes starts to be a big deal.

In case you missed its subdued debut, the C-CPI-U ``will employ a Tornqvist formula and utilize expenditure data in adjacent time periods in order to reflect the effect of any substitution that consumers make across item categories in response to changes in relative prices,'' according to the BLS. (Clear? I had a hell of a time with chain weighting; you're on your own with Tornqvist.)
...........
``There's a long history of that,'' says Pete Davis, president of Davis Capital Investment Ideas in Washington, citing the Boskin Commission and earlier changes to the CPI, such as a shift to rental equivalency measures instead of home prices in the early 1980s.

Another downshift in cost-of-living adjustments would be a blow to the old folks, who don't spend heavily on ever-cheaper computers but instead devote a good portion of their income to expensive health-care services and medications.

``A product based cost-of-living index doesn't reflect the cost of living for health care,'' Davis says. ``That's why a lot of senators are finding out they can't go home without passing a prescription drug benefit.''

As it happens, the BLS maintains a consumer price index for the elderly, defined as those 62 years of age or older. ``It began in 1982 when Congress was interested in generating the index,'' says Pat Jackman, an economist at the BLS.
...........
Congress lost interest; the BLS kept the index up. Despite the greater weighting on services for the elderly, the old-folks CPI typically runs just 0.2 or 0.3 percentage points higher than the regular CPI on a 12-month basis, Jackman says.

For the year ended July, the OF-CPI-U was up 1.7 percent versus 1.5 percent for the CPI.
*********
Misetich

Amazing how the US reduces "inflation" as the money supply keeps on getting bigger and bigger

Lies, deceit, and fraudlent reporting and manipulation - who's better at it - Governments or Corporations

Got gold?
Horatio
The New World Odor
Is it true the Brits are preparing a government in exile for Iraq ? Was that get together in Waco with the Russians a plan for Russian control over Iraq Oil 'something they wanted for years and we prevented.Now that Dubya has looked into his ole blue eyes and sees a new friend in Russia will we give them that control and hope they will use thier military to control the Muslims and sell Iraq oil to us at reasonable prices ,after thier cut of course.
The question is can we trust the Russians and can we trust Dubya to restore our civil freedoms and dismantle the office of Homeland Security after oil supplies are secured.
Security could have been achieved simply by control of our borders and kicking ass at the INS,but no, the Democrats woulden't have that ,cause most immigrants vote liberal at least until they acquire some assets and don't want them taxed away. Republicans and Democrats have chosen to take more power from the American people in the name of "Security".Why not kill two birds with one stone ,give the illusion of security and grab more power at the same time?.
Its easy to take "rights" away from the people ,all you have to do is "scare 'em",then "Save 'em" by convincing them giving up thier civil rights are required.
Restoring those rights will require nothing less than a revolution.
And what will become of our "friends" the Saudi's ?. Will they be redefined as terriorists and justify confiscation
of thier financial assets ? Thats one way of balancing the budget. ....Just an observation....I don't advocate anything
misetich
Brazil's leftist Lula increases lead in poll
http://www.forbes.com/newswire/2002/08/20/rtr700774.htmlSnip:
RIO DE JANEIRO, Brazil, Aug 20 (Reuters) - Brazil's latest presidential poll showed front runner Luiz Inacio da Silva, leader of the Workers' Party, increasing his lead, Ibope pollsters said on Tuesday.

The survey carried out for local Globo Television showed Lula gaining one percentage point to 35 percent of voters support.

Second placed populist Ciro Gomes slipped one point to 26 percent and government backed candidate and market favorite Jose Serra also eased one point to 11 percent of the vote.
*********
Misetich

Lets wait for the markets reaction - (hint- its not what they wanted to hear)

Got gold?
Graham
A currency backed by oil and wheat?
http://www.agriculture.com/worldwide/IDS/2002-08-20T034058Z_01_SP67065_RTRIDST_0_FINANCIAL-MALAYSIA-LIETAER.htmlINTERVIEW-Belgian currency ideas man puts faith in commodities


2002-08-20 03:40:58 GMT (Reuters)

By Jalil Hamid

KUALA LUMPUR, Aug 20 (Reuters) - Dr. Bernard Lietaer says he thinks he has found a better answer to the instability of the world's financial markets -- a new global currency fully backed by a basket of physical commodities such as crude oil or wheat.

Lietaer, who helped create the single European currency when working for the Belgian central bank, says his Terra currency is inflation-proof, more stable and can be created either by nation states or by an alliance of big corporations.

The 60-year-old author of the best-selling book "The Future of Money" said the Terra could be developed much faster than the 23 years it took to come up with the European Currency Unit (ECU) -- the precursor of the euro.

"It took us 23 years from the design of the ECU to the euro implementation," he told Reuters in an interview. "I think we are going to be faster on this (the Terra) because the time is less flexible. I think the pressures are higher."

Lietaer, who is now a fellow at the Center for Sustainable Resources at the University of California at Berkeley, is in Malaysia this week for a conference on the viability of Islamic gold dinar as trade payments system.

Once named "the world's top currency trader" by Business Week, Lietaer's speciality is monetary innovations which he elaborated upon in the book, already published in English, German and Japanese.

Lietaer said the current world monetary system has several systemic flaws, such as the lack of an international standard of value, and the pro-cyclical money creation by the banking system.
-----------------

sector - thanks for earlier response - Graham
Horatio
Newmont vs Barrick
I noticed one analyst advocated buying Barrick and holding Newmont, expecting Newmont to go down and Barrick to go up in the near term.
I also noticed Tocqueville Gold fund has included Barrick as no 5 in its list of major holdings.
All this from a fund that don?t believe in holding hedgers !
Vanguards gold fund has Barrick as its no 1 holding.
What?s going on? Has Hedging found new converts?
Galerider
NEW MEMBER
Greetings to All,
I'm new to the discussion forum and am impressed by the ideas and thoughts you all bring to the table. My frustration came to a peak with the recent market activities which are very contrary to indicators (and every day observations seen here in Japan) of reality that you all exploit in your postings. Been riding the storm for years in the financial markets and have had enough. Cold hard cash and now, hard assets (Gold coins, silver coins, bars) are my portfolio. Have savings bonds but am thinking of cashing those in. Looking forward to viewing your postings daily and will try to keep you posted on gleanings from Japanese press items. Will the Japanese people wake up to their government's manipulations to allay the few or is daily suffering part of their accepted pysche? Still trying to figure my neighbors out over here.
Black Blade
Top Performing Gold Fund
http://www.quicken.com/investments/holdings/?symbol=SGGDX
The top performing gold fund FIRST EAGLE SOGEN GOLD outperforms, and Barrick is nowhere to be seen. Hmmm...
MO VER MEG
(No Subject)
Does anyone know what ever happened to the old boy (Von something or the other) that bought a huge amount of Homestake a couple of years ago? Just wondering what happened to him.
White Hills
Black Blade#83421
Black Blade, I also watched the report about no interest Mortgages. I think you may have come upon the financial event that sends the stock market crashing. Why would lenders even mess with such a loan? Like no interest car loans they are given to boost sales and to allow people who otherwise couldn't afford the down payment or the monthly payment to buy. The real estate market in California has inflated to the point that there are not enough buyers at current price levels that can really afford such a high payment. All sellers no buyers a receipt for disaster in the high flying housing markets. You think the Savings and Loan scandal of a few years back was bad? Wait until this baby crashes. White Hills
goldquest
@ MO VER MEG
http://www.isyours.com/E/FA/IND/fink.htmAt one time, August Von Fink owned 13% of Homestake.
Black Blade
Re: White Hills


Oh yeah, I know what you mean. I have a friend in California (Bay Area) who along with his wife recently took out a mortgage on their house. Get this � the house was paid off and they had very little debt. So what do they do? They mortgage the house and go on a spending spree. It's people like these who are propping up this market. When the cash is gone and only the bills are left we are likely to see some real pain. When the real estate bubble bursts then what are these people going to do? Will they simply walk away from overvalued real estate leaving the banks with bad loans and property they can't sell for anything close to covering the mortgage debt? There is only one way that this will play out and that is a disaster that will make the economic collapse in Japan look like a picnic. Remember Texas in the 1980's when the S&L crisis hit and oil prices fell? Can you say Argentina? I knew you could. Cheers!

- Black Blade
MO VER MEG
Goldquest
Thanks. I hope he is doing well in Switzerland and that the heirs didn't take away his checkbook for buying a gold mining company.

MOVERMEG
Mr Gresham
Galerider
Welcome! Each of our international posters takes me on a 2-minute trip to that country, and I walk those streets and try to see through the eyes of other peoples of the world, and see what actions they might take that will affect me and my family here. Please, give us your most personalized, street-level views of economic life in a place I and most others have never been. Be our eyes and ears -- Arigato!
Blackjack
Saudis sue US governemnt, lawyers counter-attack, lawyer heaven
RIYADH, 21 August - A Saudi lawyer is planning to file more than 15 lawsuits against the US government and other parties for causing physical and psychological damages to his clients, preventing them from completing their studies and damaging their reputation through the media.

Katib Fahd Al-Shammary, the lawyer, told Arab News that he had collected powers of attorney from Saudi victims and that he would file the suits within two months, seeking damages.

He spelled out the reasons that delayed the filing of suits, saying there was lack of clarity about procedures at US courts and prisons, disappearance of certain evidence and confiscation of the victims' IDs.

"Another important reason is lack of money to follow up court proceedings," Shammary said and called upon Saudi authorities and charities to support the plan.

"We need money to appoint American lawyers to defend our cases and ensure good media coverage to influence US public opinion," he added.

Shammary's clients include Saudi students who have been prevented from continuing their studies in the United States and jailed in US prisons for different durations without leveling any charges against them.

He said he would file lawsuits on behalf of those Saudis whose names and pictures were published in US media as suspects in the Sept. 11 terror attacks while they were outside the US at the time of attacks.

Shammary said the compensations to be sought through the lawsuits would be realistic.

"We have been contacting law offices in the Kingdom, Qatar, Kuwait and even in the US to make use of their expertise in support of the case," he explained.

Shammary is a member of the committee of lawyers appointed to defend Arab prisoners in Guantanamo. The committee, which is chaired by Najeeb Al-Nuaimi, a Qatari, plans to file 80 lawsuits next month.

The Saudi lawsuits come in the wake of a lawsuit filed by relatives of the victims of Sept. 11 attacks against Saudi charities and foreign organizations and individuals seeking trillions of dollars in damages.

"This is yet another part of a series of accusations which started after Sept. 11 against Islamic charities," Secretary-General of the International Islamic Relief Organization (IIRO) Adnan Basha said about the US lawsuit.

IIRO, one of several Islamic organizations charged in the lawsuit filed on Thursday, says it is active in the field of charity and relief works mostly for orphans in about 95 countries.

"Our work is official. Our financial records are well monitored and audited by international auditors and in cooperation with governments," Basha added.

Last year, IIRO spent some $33 million on 2,800 projects and more than 44,000 orphans. It maintains offices in many countries, mostly in Africa and Asia.
_________
This is getting rediculous, lawyers will feast!
Also,I understand bankruptcy law is the booming field these days.
Lawyers coming out of retirement to make extra $cash$.
To Mikal: yes lets see what happens AFTER the elections.
Especially in Brazil. That ones in October. October surprise?
Gandalf the White
WELCOME Sir Galerider !!
Trying to understand the Oriental Mind is SUCH a challenge!
Please advise of progress OFTEN !
<;-)
Blackjack
European economic confidence falls
Munich, Aug. 21 (Bloomberg) -- Economic confidence in the dozen countries sharing the euro worsened in July compared with three months ago, the Ifo economic institute said, suggesting growth this year will be weaker than expected.

The institute's growth index fell to 94.9 in July from 101.7 in April, the first decline since the fourth quarter of last year. The results are based on the answers of 257 ``economic experts,'' Ifo said.

``The decline of the Ifo euro-area indicator results exclusively from somewhat less favorable expectations for the economic situation,'' said Ifo President Hans-Werner Sinn in a faxed statement. Worsening expectations ``point to a continuation of the economic recovery in the euro area, though at a slower pace than thought some months ago.''

The European Commission earlier this month said the euro economy will expand between 0.6 percent and 0.9 percent in the third quarter, shaving a 10th of a percentage point off a previous estimate. The German economy, Europe's largest, barely grew in the second quarter, the Bundesbank said yesterday.

Rising unemployment has been damping consumer spending. The European unemployment rate rose to its highest level in two years in June as companies including Fiat SpA and Siemens AG have shed more than a quarter of a million jobs this year, according to Credit Suisse First Boston.
Blackjack
Trade War growing with Cina
BEIJING -(Dow Jones)- China's General Administration of Customs imposed retaliatory tariffs on imports of ordinary wire rod and hot-rolled ordinary steel plate of 15% and 26% respectively on Friday, after they exceeded their quotas.

The administration also applied retaliatory tariffs on imports of galvanized zinc plate and cold-rolled steel of 23% and 18% respectively, a statement on the administration's Web site said.

China imposed the new 180-day tariff regime on May 24 in retaliation against the U.S.'s March decision to impose steep tariffs on most steel products.

The retaliatory tariff regime imposes tariffs of 7% to 26% on steel products once those products exceed a designated quantity within the 180-day period.

China's imports of galvanized tin plate and colored steel plate from May 24 to Sunday exhausted 83% and 97% respectively of retaliatory steel quotas, the statement said.

China has joined other steel producers in protesting U.S. tariffs of up to 30% to the World Trade Organization.

China has also demanded U.S. compensation for damage to China's steel industry and threatened retaliatory tariffs of 24% on U.S. exports of waste paper, bean oil and electric compressors.
_________________
This is what happens in a deflation depression scenario.
Remember Taft Hartley? Countries try to protect their
dwindling job market. Expect more of this in coming years.
Gold, get you some.
Spartacus
Brazil woos nervous US banks
http://news.bbc.co.uk/1/hi/business/2205899.stm
---Brazil's top financial officials are pressing for a meeting with major American banks to ask them to continue to roll over loans to Brazilian firms.
Brazil's economy is suffering because overseas banks are cutting off loans or tightening their credit terms due to fears that Brazil may default on its foreign debts after the October presidential election.

"There's a lot of pressure because banks are reluctant to finance exports because they're losing money," said President Fernando Henrique Cardoso.

He said the delegation to New York would be led by Brazil's finance minister, Pedro Malan, and Arminio Fraga, president of the country's central bank.
------------
The mission to American banks, which is likely to take place next week, will be hosted by the US Federal Reserve.

US banks with significant exposure to Brazil include Citigroup, JP Morgan Chase and FleetBoston Financial.---


Blackjack
Dollar falls on Saudi selling concern
London, Aug. 21 (Bloomberg) -- The dollar declined against the yen, snapping a four-day gain, on concern Saudi Arabian investors may sell U.S. assets in coming months.

The dollar fell to 117.91 against the yen at 7:55 a.m. in London, from 118.83 late yesterday. Against the euro, it fell to 98.33 from 97.82. The dollar is down 10 percent against both currencies this year.

Investors from oil-producing Persian Gulf monarchies hold about $1.2 trillion overseas, excluding property, according to Saudi American Bank. Mideast investors sold up to $200 billion of U.S. assets after some American commentators called for a freeze on Saudi assets, the Financial Times newspaper reported yesterday, citing Youssef Ibrahim, a senior fellow at the Council on Foreign Relations.

``Undoubtedly the fear that this is happening is having an effect on the markets'' and is hurting the dollar, said Steve Englander, senior currency strategist at Citigroup Inc. In coming weeks the dollar could weaken to $1.03 per euro, as investors weigh up the prospects for U.S. growth, he said.

A lawsuit against Arab banks, individuals and Islamic charities filed on behalf of the families of those killed in the Sept. 11 attacks asked the courts in Washington to freeze U.S.- based assets of the defendants, including Saudi Arabia's biggest bank, National Commercial Bank, and Saudi Defense Minister Prince Sultan bin Abdulaziz al-Saud, a brother of Saudi Arabia's King Fahd.
Spartacus
Gold
http://www.dailyreckoning.com
A COLOSSAL DECEPTION
By Dr. Mark Faber

----Concerning the health of the financial system, I came across a comment by Len Williams about the hedging techniques of Barrick Gold. Len is the head of fixed-income and commodity research at Durlacher. His work highlights the risk inherent in the derivatives market.

According to Williams, trouble may arise in the gold market if gold prices rise to $400 and above. Such a rise could prove very bad for any big-name banks caught on the wrong side of this price move. He writes that the phenomenon revolves around a highly unusual form of gold derivatives, a market in which Citibank, Goldman Sachs, and JP Morgan are the major players. The particular form of derivative is a type of hedging pioneered by Barrick, one of the world's largest gold producers and a leader in innovative hedges.

Ordinarily, a hedge protects a producer or investor from the downside. Other things being equal, it does so by limiting their upside. Barrick, whose hedge book had assets of $5.5 billion at the end of 2001, however, has managed to construct a hedge that allows it considerable upside if gold rises. And one big bank could be caught very short. Apparently, Barrick has hedged part of its production through a spot deferred forward sale contract. Barrick makes a forward contract with a bank to deliver (unmined) gold at a certain price at a certain date. But what makes these contracts different, and also dangerous, for counter-parties is that Barrick has the right to defer the delivery of the gold for periods ranging from five to 10 years.

More recently, Barrick seems to have entered into contracts that allow it to defer delivery for 15 years. We don't know this for sure, but we do know that the total U.S. notional derivatives position of U.S. banks and trusts exceeds a staggering $44 trillion (GDP is $10.2 trillion) and that JP Morgan Chase controls over $26 trillion, or close to 60%, of that market with assets that only amount to 13% of total U.S. banking assets!

Somewhere, sometime, an accident in the financial system is bound to happen. It is unlikely that such huge positions can be constantly rebalanced without anyone taking a huge hit. ----
Galerider
REGIONAL FEDERAL RESERVE BANKERS AND DOLLAR
Read your posting on the dollar slide over concerns with Saudi withdrawing investment funds in U.S., Blackjack. Also interested in what regional FEDS (i.e. Phil, Chicago) will say about the chances of economic recovery. If they call it true, could add to the dollar slide. Got gold, will buy more.
Blackjack
Deutsche Telekom cuts 22,000 jobs, capital spending
Bonn, Aug. 21 (Bloomberg) -- Deutsche Telekom AG, Europe's biggest phone company, posted a 3.9 billion-euro ($3.8 billion) loss in the first half because of costs tied to acquisitions.

The loss includes extraordinary gains and charges. Excluding one-time items, Deutsche Telekom had a loss of 3.1 billion euros compared with a loss of 1.3 billion euros a year earlier, said Chief Financial Officer Karl-Gerhard Eick at a press conference.

Chief Executive Officer Helmut Sihler said he plans to cut costs by 2.5 billion euros by reducing capital expenditure, eliminating 22,000 jobs and by slashing debt. Former CEO Ron Sommer was ousted last month after his expansion strategy failed.

``We are under pressure, but we mustn't allow ourselves to get nervous,'' Sihler said at the press conference in Bonn.
______________
Capital spending cuts, desperate to stay alive, service its debt.
This is why no recovery in Tech. No capital spending by big
telecoms, they are loaded with debt. It will take some time,
maybe years to work out from under that debt. In the mean time,
back at the ranch, many will fold. Like Worldcom. Bernie had the
biggest ranch in Canada. He is Canadian eh. They say he will lose
the ranch. These days they are coming after the CEOs LOL.
Blackjack
Rolls warns of Bleak Outlook
Rolls-Royce will warn this week that it could be badly hit by the slump in civil aviation.
This warning comes after US Airways sought bankruptcy protection last week.
The company will warn of a bleak outlook when it publishes its interim results on Thursday. Rolls has already cut 5,000 jobs since September 11 to reduce costs.
The firm had a long-term engine maintenance contract with US Airways worth hundreds of millions of dollars.
_______________
Ripple effect from US Airways bankruptcy.
Civil Aviation business in a world of hurt.
Literally.
Blackjack
UK housing market may have peaked
London, Aug. 21 (Bloomberg) -- Home prices in England and Wales rose at the slowest pace in five months in the quarter through July, a survey showed, suggesting the housing market may have peaked.

House prices, which gained 43 percent in the decade to 2001, have encouraged consumers to boost spending, helping prevent the U.K. from sinking into recession last year. The slide in stocks this year is leading some people to postpone purchases.

``People have their eye on the stock market,'' said Noel Flint, a surveyor at Knight Frank Grubb & Ellis, a real estate agent that oversees about 10 billion pounds ($15.3 billion) in sales a year. ``Many are hesitant to buy. The housing market is taking a breather.''

In a survey of 338 property appraisers by the Royal Institution of Chartered Surveyors, the balance of those reporting higher prices fell to 53 percent, from 63 percent in the three months to June.

The benchmark FTSE 100 Index has declined 15 percent this year and shed 9 percent in July. Stocks and pensions account for about 45 percent of household wealth in the U.K., about the same as the value of houses, according to HSBC Bank Plc.

Slowing property price growth gives the central bank another reason to keep its benchmark interest rate at 4 percent, the lowest level in 38 years. In June, Bank of England Governor Sir Edward George suggested policy makers would raise borrowing costs and said house prices were ``unsustainable.''

Manufacturing, which accounts for about a fifth of the economy, declined at the fastest pace in more than two decades in June. Higher borrowing costs may further damp spending and erode confidence.
Galerider
Welcome
Mr Gresham, Gandalf The White,
Thank you for your welcoming words and will do my best to provide as much information as possible with regards to Japan and Asia.
Black Blade
Western World Would Be Unwise To Ignore Proposal For Gold Dinar Currency Among Islamic Countries.
http://www.minesite.com/archives/features_archive/2002/Aug-2002/dinar210802.htm
Snippit:

Just before the Organisation of Islamic Conference which is due to take place in Kuala Lumpur in October 2003 a number of Muslim countries, led by Malaysia, propose to introduce an electronic unit of value called a gold dinar to settle bilateral trade among themselves. The plan will be rubbished by members of the Bush administration who were brought up from birth to believe in the power of the almighty dollar, but the White House should reflect on the fact that there are 1.3 billion Muslims in the world and very few of them share America's view of the dollar. Moreover Asia was developing as an economic power house in its own right until the financial crisis of 1997/8 and many leaders in these countries believe that they were destabilised by an overly strong dollar.


Black Blade: Leading to an eventual gold standard and then to a gold and silver trading unit? Very possible owing to recent events. A very interesting article worth reading.

Black Blade
Buba Welteke Mulling Gold Sales To Set Up Disaster Fund
http://www.futuresource.com/news/news.asp?story=i4280739775839731776

Snippit:

FRANKFURT (Dow Jones)--Deutsche Bundesbank President Ernst Welteke is proposing that the German central bank sell some of its gold reserves in the long term, to help victims of natural disasters, a Bundesbank spokesman said Wednesday.

Black Blade: It appears that the old Reich's Marshal is at it again. Yesterday Finance Minister Hans Eichel said "nein!" to such a ridiculous plan. Welteke has long been known to despise gold as most socialists and communists of days past. However, with a new government likely to come to power his days are probably numbered. Soon he will be crying in his beer with his old stasi friends.

misetich
Dollar Falls vs Yen Amid Speculation Saudis Selling U.S. Assets
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWNukBY1RG9sbGFySnip:

London, Aug. 21 (Bloomberg) -- The dollar declined against the yen, snapping a four-day gain, on concern Saudi Arabian investors may sell more U.S. assets in coming months.
...........
Investors from oil-producing Persian Gulf countries hold about $1.2 trillion overseas, excluding property, according to Saudi American Bank. Middle East investors have sold as much as $200 billion of U.S. assets, the Financial Times newspaper reported, citing Youssef Ibrahim, a senior fellow at the Council on Foreign Relations.

``The concern is that Middle East investors could continue to sell,'' said Martin Bayntun, who helps oversee about 15 billion pounds ($23 billion) at Gartmore Investment Management. The dollar will also be ``vulnerable'' in coming months on concern U.S. economic ``growth will be below par,'' he added.
...........
``Undoubtedly the fear that this is happening is having an effect on the markets'' and is hurting the dollar, said Steve Englander, senior currency strategist at Citigroup Inc. In coming weeks, the dollar could weaken to $1.03 per euro, as investors weigh up the prospects for U.S. growth, he said.
.............
***********
Misetich

and this from Aug. 20 Financial Times article

""People no longer have any confidence in the US economy or in US foreign policy," said Bishr Bakheet, a financial consultant in Riyadh.

"And if the latest lawsuit is not thrown out in court, it will mean no more Saudi money in the US."

US foreign policy is under fire - Iran, Iraq, Saudi Arabia, Venezuela, China - (Four major oil producing countries, and China a major oil importing country- who just last month had a peak month in oil imports)

Got gold?


Black Blade
Americans file mortgage requests in record numbers
http://biz.yahoo.com/rf/020821/financial_mortgages_2.html

Snippit:

NEW YORK, Aug 21 (Reuters) - Americans flooded banks and mortgage lenders with a record number of home loan applications last week to lock in some of the lowest mortgage interest rates ever to refinance or to buy a home, a U.S. industry trade group reported on Wednesday.

Black Blade: Taking on more debt to keep on spending. Hmmm�

misetich
Subtracting capital sent abroad from the United States, the net inflow into the country fell 83 percent, or $16.4 billion, in the first quarter compared with figures in the period a year earlier.
http://www.nytimes.com/2002/08/21/business/21DOLL.htmlSnip:

Yet foreign investment in the United States does appear to have suffered. Subtracting capital sent abroad from the United States, the net inflow into the country fell 83 percent, or $16.4 billion, in the first quarter compared with figures in the period a year earlier. Switzerland alone invested $11.1 billion in the United States in the first quarter of 2001; in the first quarter of this year, it withdrew $154 million worth of capital.
***********
Misetich
Poor personal savings rate in US - relying on foreigners to support the growing deficit

Each passing day for one reason or ANOTHER - foreigners including Europeans have less and less confidence in the US financial system

US Treasury O'Neil creditability is under scrutiny - here's a quote from the same article

"With the dollar having lost about 12 percent of its value against the euro and the yen since February, many politicians, most recently Treasury Secretary Paul H. O'Neill, have cheerily forecast a more drastic shift in trade favoring exports over imports."

O'Neil is proving to be a buffoon -

Got gold?
misetich
Fears That Lending to Brazil May Dry Up
http://www.nytimes.com/2002/08/21/business/worldbusiness/21BAIL.htmlSnip:

By EDMUND L. ANDREWS
WASHINGTON, Aug. 20 � Nearly two weeks after the Bush administration threw its support behind a $30 billion loan to rescue the Brazilian government from financial collapse, American officials and the International Monetary Fund are worried about whether big international banks will keep lending to Brazilian private industry.

The president of Brazil's central bank, Arminio Fraga, is flying to New York for a meeting next week with some of the country's biggest creditors, including Citigroup, J. P. Morgan Chase and FleetBoston.
...........
Administration officials estimate that Brazilian companies have about $10 billion in loans and credit lines that come due before the end of this year. Much of that credit is being used to finance exports, which in turn are crucial in getting Brazil's overall financial condition back in balance.

Today, Brazil's central bank said it would try to fill the gap by providing up to $2 billion in loans to the country's exporters. But that strategy will force the government to use up precious foreign exchange reserves, which in turn will weaken its ability to defend the beleaguered currency, the real, from another downward spiral.
...........
"The numbers don't say the situation is necessarily hopeless," Mr. Mussa said today. "But if creditors think the risk is great enough that it is better to get out than to stay in, that becomes a self-fulfilling prophecy."
.............
***********
Misetich

Bush and Co have their hands full - US interests in Brazil are high

Got gold?
misetich
Mind the Gap - The U.S. stock bubble in the second half of the 1990's was just as big as Japan's bubble in the second half of the 1980's. Will our two-year funk turn into a five-year or ten-year funk, the way Japan's did?
http://www.nytimes.com/2002/08/16/opinion/16KRUG.htmlBy PAUL KRUGMAN
How much has Japan's economy shrunk since its bubble burst? It's a trick question; Japan's economy hasn't shrunk. It had only two down years over the past decade, and on average it grew 1 percent per year.
.............
Now the non-trick question: What would a similar analysis say about the United States?

The U.S. economy's "potential output" � what it could produce at full employment � has lately been growing at about 3.5 percent per year, thanks to the productivity surge that began in the mid-1990's. But according to the revised figures released a couple of weeks ago, actual growth has fallen short of potential for seven of the last eight quarters.
............
Some readers have already guessed where I'm going with this. The U.S. stock bubble in the second half of the 1990's was just as big as Japan's bubble in the second half of the 1980's. Will our two-year funk turn into a five-year or ten-year funk, the way Japan's did?

A loud chorus is already shouting "We're not Japan!" Half the time, depending on what I had for breakfast (rice and pickles?), I'm part of that chorus. But let me share some disquieting thoughts.

Back when I first got professionally obsessed with Japan's problems, around four years ago, I made myself a mental checklist of reasons that Japan's decade of stagnation could not happen to the United States. It went like this:

1. The Fed has plenty of room to cut interest rates, which should be enough to deal with any eventuality.

2. The U.S. long-term budget position is very strong, so there's plenty of room for fiscal stimulus in the unlikely event interest rate cuts aren't enough.

3. We don't have to worry about an Asian-style loss of confidence in our business sector, because we have excellent corporate governance.

4. We may have a stock bubble, but we don't have a real estate bubble.

I've now had to strike the first three items off my list, and I'm getting worried about the fourth.
.........
House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.

If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort.
.............
Last year some economists began privately referring to the Fed chairman as "Greenspan-san." The joke faded out as optimism about recovery became conventional wisdom. But maybe it's not a bad nickname after all.
************
Misetich
Krugman made a great call on South East Asia several years before the bubble burst - he's getting agitated on the US economic direction

Got gold?

misetich
Area Recovery Shows New Signs of Stalling
http://www.washingtonpost.com/wp-dyn/articles/A41941-2002Aug20.htmlSnip:
Maryland and Virginia lost large numbers of jobs in July, according to employment numbers released by the department. Many analysts thought the Washington area would be among the fastest to emerge from last year's recession. But the new data suggest that not only has the recovery stalled, but the local economy is getting worse.

"This is bad news," said Anirban Basu, chief economist of Towson University's Regional Economic Studies Institute. "All the data are starting to point in the same direction, which is that the economy is actually losing momentum rather than picking it up."
********
Misetich

Double dip or continuous recession?

Got gold?
sector
Ex-Enron Executive Kopper to Plead Guilty
http://biz.yahoo.com/rb/020821/enron_plea_3.html
Wednesday August 21, 5:50 am Eastern Time

Reuters Business Report

By Deborah Charles and C. Bryson Hull

WASHINGTON/HOUSTON (Reuters) - Former Enron Corp. executive Michael Kopper is to set to plead guilty on Wednesday and become the first employee to admit a criminal role in the energy giant's failure, sources close to the investigation said on Tuesday.

Kopper, the chief lieutenant to disgraced former Chief Financial Officer Andrew Fastow, will plead guilty to two charges of conspiring to commit wire fraud and money laundering and surrender $12 million in "criminally derived" assets, the sources said.

The 37-year-old Kopper will cooperate with prosecutors, the sources said. With his plea, federal prosecutors leading the sprawling investigation into Houston-based Enron have snared a high-ranking insider in a position to testify against Fastow and possibly other executives above him.

The plea may also alleviate public and congressional pressure to produce results in the long-running investigation. Although U.S. investigators have made several high-profile arrests of top executives of other companies accused of corporate wrongdoing, they had yet to charge anyone connected to Enron, which collapsed into bankruptcy on Dec. 2.

The deal marks a major shift in the strength of the government's case, said former federal prosecutor Robert Mintz.

"Here the government is taking the traditional route of applying tremendous pressure to individuals and striking deals with carefully selected insiders who will lead them through the Byzantine transactions," said Mintz, who now leads the white-collar criminal defense practice at the law firm of McCarter & English in Newark, New Jersey.
++++++++++++++++++++++++++++
My, My! Perhaps the trail to GoldGate just heated up.
Kopper must have been a bagman for Fastow and as such he would have known about energy/gold swaps.

It will be fun to see exactly when the President cuts off the prosecution "For the good of the country".
USAGOLD / Centennial Precious Metals, Inc.
A good treasure never goes out of style
http://www.usagold.com/ProductsPage.html

Golden Goal




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

-- R. Strauss

TownCrier
HEADLINE: IMF cuts Kyrgyz GDP outlook on gold mine accident
http://www.forbes.com/markets/newswire/2002/08/21/rtr701213.htmlBISHKEK, Aug 21 (Reuters) - Kyrgyzstan's economy will grow by just 1.5 percent this year against an original forecast of 4.5 percent following an accident at the country's biggest firm, a gold mine ... Kumtor, a gold venture with Canada's Cameco Corp ... had to halt its work due to a gigantic landslide at its mine in the Tien Shan mountains.

"We have revised the real GDP forecast for this year because of the impact of the landslide in the Kumtor mine," Tapio Saavalainen, head of a visiting IMF mission.

Official data shows GDP shrank by 4.9 percent in the first half of this year, compared with the same period of 2001.

Kumtor accounts for some 40 percent of Kyrgyzstan's industrial output, and its gold comprises around half of all exports...

----------(click URL for full text)---------

As should be obvious from this report, gold can provide benefits reaching beyond the individual. Here is a case where an entire nation's economic health hinges on the export of newly mined gold.

It should also be obvious that the landslides did nothing to harm the value of anybody's investments in the gold that had been previously mined and shipped out, but investments in the mining company (Cameco) are down nearly 25% since the July 8th mine mishap -- a pit wall failure (200 meters in height). Take care where you stand, mate.

R.
Socrates964
Enron
Let's hope they go after JPM while they're at it. If the $20 close on 7/24 was the trigger for a meltdown and a) this knowledge was not in the public domain, b) the top people knew that intervention was forthcoming to lift the stock above the fatal level, then what is the status of these purchases? No marks for guessing.
Sierra Madre
Welteke of the Bundesbank keeps wanting to sell CB gold...
There he goes again! Welteke wants to sell gold, to help "disaster victims". Yes, of course, we understand:

Weltie old boy, you vant to sell gold to get ze Cherman banks off ze hook, zey sold ze golt und now zey need it beck. Jah? Zeez are ze WICTIMS, (of their own foolishness and perversity).

Sierra Mutter
Galerider
FED SPEAKS
Greetings,
Told everyone when I joined, the markets are frustrating. That the regional FEDS would hold the party line and talk of tame inflation, reasonable economic growth, yada, yada, yada......what puppets!
Cavan Man
Looks like war (ongoing tug-o-war in admin)
washingtonpost.com
Bush: Iraq Change in World Interest


By Jennifer Loven
Associated Press Writer
Wednesday, August 21, 2002; 12:56 PM

CRAWFORD, Texas �� President Bush promised Wednesday to consult allies before any military action against Iraq and asserted that an end to Saddam Hussein's regime "is in the interest of the world."

"How we achieve that is a matter of consultation and deliberation," Bush told reporters.

Even so, Bush said the subject of a possible military strike on Iraq did not come up at a meeting on his ranch with his top military advisers. Instead, he said, long-range Pentagon issues were discussed.


� 2002 The Associated Press
R Powell
That strange cyberworld of POG changes
Kitco has added a new feature to their daily gold and silver charts. The bottom of each chart gives an indicator showing when the different exchanges are open. To the usual Sydney, Hong Kong, London and Comex markets, the New York access market has been added. This is an electronic (Globex) market, thinly traded, where prices may vary drastically.
If the day comes when a large, market moving amount of money is invested in silver or gold, this may be the place for driving the POG or POS upward. It is also a dangerous place where prices are vulnerable to attack. I believe Lips' "Gold Wars" explains that one large bank, through massive buying, once started a gold rush. This market access did not exist at that time. Perhaps we'll see another large institution break from the ranks one fine day. I'm ready!
Rich
Black Blade
Corporate debt saps nation
http://www.denverpost.com/Stories/0,1413,36%257E33%257E801767,00.html?search=filter
Credit stress hits Depression level

Snippit:

Sunday, August 18, 2002 - U.S. corporate debt nearly doubled in the past five years - to $3.9 trillion by the month of May. The burden, already buckling many companies under the load, threatens to send the nation into a prolonged recession. "We're looking at an economic heart attack in front of us," said John Riley, president of Cornerstone Investment Services, a money management firm in Providence, R.I. "We're faced with owning up to the excesses of the late 1990s."

Black Blade: Corporate debt is at all time record highs and it is unlikely to ever be paid. Looks like the banks have a problem. In a word �"Grim".

Carl H
@Black Blade: Debt
You should have also pointed out that Personal debt loads are very high and the US Government debt just keeps growing and growing and growing...

I recall reading somehwere in the past year that historically, far more soverign debt has been repudiated or inflated away than has ever been paid back. Kinda makes you wonder about "risk free investments" like US treasuries.

Got Gold?
Cavan Man
RPowell
Only massive buying or conversely, massive selling will set AU free. I hope for the former
A Canadian
J.P. MORGAN TAKES ANOTHER SLAP
This time from Moody's.....this will eventually become the weakest link...goodbye!
Blackjack
US Budget Deficit on track to worst in 6 years
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028185910197&p=1012571727204The federal budget deficit is on track to be the worst in at least six years, according to the latest official figures showing an ongoing erosion of tax revenue and ever-higher public spending in July.

The US Treasury reported on Tuesday that tax revenue fell short of government spending for the second time in three months, leading to a deficit of $29.2bn in July - in-line with expectations.

It leaves this year's deficit on-track to be the largest since the mid-1990's. From January to July, it amounts to a cumulative $110bn - the highest since the $119.7bn deficit of the January-to-July period of 1993.

For the first ten months of the fiscal year which ends in September, the federal government ran a budget deficit of $147bn compared to a $172bn surplus over the same period last year.

Aggravated by the economic slump, tax cuts, anti-terrorism and medical-care-related spending, the deficit threatens to complicate the Bush Administration's consideration of a new economic stimulus plan.
DOWNUNDER
US DOLLAR HEGEMONY HAS GOT TO GO - -
http://www.atimes.com/global-econ/DD11Dj01.htmlHegemony -(Dictionary defination)-"Leadership or predominant
influence exercised by ONE state over others.This article dated April 11th 2002 cuts right to the chase & gives an excellent overview, with clarity, as to why American domination of the whole world economy must cease. It's not a long read but it covers the history -and more importantly spells out reasons for the discerning reader as to why the USA Govt is loathed by so many nations.

SNIP- -
World trade is now a game in which the US produces dollars and the rest of the world produces things that dollars can buy. The world's interlinked economies no longer trade to capture a comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies. To prevent speculative and manipulative attacks on their currencies, the world's central banks must acquire and hold dollar reserves in corresponding amounts to their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces the world's central banks to acquire and hold more dollar reserves, making it stronger. This phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973.
Waverider
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.htmlFor anyone who otherwise may have missed it...the best on the web...
misetich
J.P. Morgan Chase Ratings May Be Cut
http://abcnews.go.com/wire/Business/reuters20020821_524.htmlSnip:

Aug. 21
� By Jonathan Stempel

NEW YORK (Reuters) - Moody's Investors Service on Wednesday threatened to cut J.P. Morgan Chase & Co.'s long-term ratings, expressing concern about the Wall Street bank's profits and the degree to which Enron Corp.'s bankruptcy may hurt J.P. Morgan's reputation

The warning affects $42.4 billion of debt at the No. 2 U.S. bank holding company, formed in December 2000 from the merger of Chase Manhattan and J.P. Morgan, and follows a similar action last Thursday by Standard & Poor's Ratings Services.

Moody's said it may cut J.P. Morgan Chase's "Aa3" senior unsecured debt, its fourth highest grade. It affirmed J.P. Morgan's "Prime-1" short-term ratings. Downgrades often boost borrowing costs.

"The review is much more directly tied to financial performance and fundamental issues," said Peter Nerby, a Moody's senior vice president, in an interview. "The company has suffered from a profitability point of view over the last few quarters since the nerger, and that may continue."

Nerby added that "some of the reputational hits that J.P. Morgan has suffered could affect fundamental financial performance going forward, although that's very, very hard to quantify."
...............
Moody's said J.P. Morgan's strategy to combine commercial and investment banking "has met mixed success," and that its Enron ties might subject it to more regulatory scrutiny and expensive litigation.
*********
Misetich

JP Morgan - ANOTHER warning - preparing the markets for the inevitable -

Got gold?





misetich
Oil Price Hike Won't Spark Inflation: Fed
http://abcnews.go.com/wire/Business/reuters20020821_482.htmlSnip:

� EMERYVILLE, Calif. (Reuters) - San Francisco Federal Reserve Bank President Robert Parry said on Wednesday he was not worried the recent spike in oil prices above $30 a barrel would stoke now dormant inflation.

............
Parry, who in an earlier speech said that the current level of interest rates is appropriate and quite stimulative, told reporters later he was comfortable with growth in the second half of the year of 3 percent or slightly under.

"If it didn't grow at a 3 percent rate, I'd be disappointed," he said, adding that such a growth rate should help improve the labor market.

***********
Misetich
OK we won't have "inflation" as defined by the Feds - I guess they mean CPI, etc but not the increase in money supply

Doubted if the economic growth will not be affected by an increase in energy costs with firms unable to pass on the increased costs -

Jawboning is the only thing Feds got left - no ammo left- game over

Got gold?



Gold Hill
Black Blade
I've been lurking for quite a while, remember you mentioning Silverado and their clean coal process. I see that Silverado has applied for a $10 mil grant from DOE to help fund their progress. Any comments?
BTW (Disclaimer), I did buy Silverado and it has been very good to me. Off to see the Prez tomorrow, southern Oregon is going to get some press!!
misetich
U.S. Auto Sales Look Strong-But a number of observers are beginning to question how long new vehicle sales, a linchpin that accounts for roughly 10 percent of the U.S. economy, can thrive amid America's tepid economic recovery. A sudden drop in the automotive industry's strength could signal that the wheels of the economy have stopped moving.
http://abcnews.go.com/wire/Business/reuters20020821_523.htmlSnip:

DETROIT (Reuters) - Automakers and auto industry experts see August shaping up as another hot month for U.S. vehicle sales, thanks to interest-free loans and other hefty rebates.

But a number of observers are beginning to question how long new vehicle sales, a linchpin that accounts for roughly 10 percent of the U.S. economy, can thrive amid America's tepid economic recovery. A sudden drop in the automotive industry's strength could signal that the wheels of the economy have stopped moving.

Analysts expect auto sales in August to run roughly 7 percent to 9 percent higher than last year, at a seasonally adjusted annual rate of about 17.6 million vehicles -- off from July's blockbuster pace of 18.1 million, but well ahead of the 16.4 million rate in August 2001.

The decline from July's pace would come as Detroit's Big Three automakers start to run low on the 2002 model year vehicles carrying the zero-percent loans and large rebates. Earlier this month, all three began offering far less generous rebates on the 2003 models just beginning to hit dealerships.

...........
Much of that has been thanks to incentives that averaged almost $2,900 on vehicles from Detroit's Big Three in July. But a number of other economic factors, including interest rates at 40-year lows, growing personal incomes and rising home values, may have also help prop up sales.
.............
"AUTOS, CRUISE MISSILES AND HOUSES"

"With the exception of autos, cruise missiles and houses ... it seems to me the economy is kind of stalling out," said Paul Kasriel, chief economist with Northern Trust securities.

"Corporations are still under tremendous pressure to improve their profits, the only way they're seeing to do it is through cutting costs, and the biggest part of their costs are people," he said. "I don't expect to see much hiring and maybe more firings."
...........
And the last income report from the U.S. Commerce Department found Americans boosted their savings rate in June to 4.2 percent of their income from 3 percent a year earlier, suggesting their bias against spending was strong.

"People are trying to save more after they finally realize they're poorer, their wealth has taken some substantial hits in past 2.5 years," Kasriel said. "They probably feel the need now to increase their net worth the old-fashioned way, by saving more."

************
Misetich
The auto, housing, government spending is red hot - yet the economy is not going anywhere - how long can this go on? Budget deficit is expected in excess of $200 billion and with "normalization" including off-budget items and interest costs the deficit is near $500 billion

Consumer debt, both housing and auto is staggering - and will only get worse if they continue on borrowing

They hope for a transitional leap from these industries to others however in most post-recessions it was the housing industry to spring out from the depths of the abyss -

Got gold?

Got gold?


Cometose
POST 83480/ JPMORGAN CHASE RATINGS MAY BE CUT
Synopsis:

JPMORGAN CHASE ..........." hard to quantify "
Carl H
@Black Blade: SPR Numbers
Black Blade: Do you believe the Strategic Petrol. Res. numbers?

Black Blade
Re: Gold Hill and CarlH

Gold Hill � I am not too familiar with Silverado's process. I know that Syntroleum is another company pursuing a synthetic substitute as well. They had a venture with Texaco a couple of years ago. The South African company Sasol is another player in the syn-fuel business. These companies may be involved in a hydrogenated coal fuel program. But I haven't followed up on any of them lately.

CarlH � I have no reason to doubt the SPR data. Supposedly the SPR has been refilled with about 500 million barrels (so far) and has a capacity of about 750 million barrels. The plan has been to refill the SPR to capacity this year, perhaps for war preparations. Clinton sold off some of the SPR oil to give Gore a boost during the presidential campaign when the US was suffering from the most recent energy crisis. I believe that oil was supposed to be replaced and additional oil contributed as partial payment. I am not sure if that oil has been replaced, but I believe a few of the "mom and pop" buyers went out of business since then.

Cheers!

- Black Blade
Belgian
Frontal Confrontation !
It must be clear by now that the almighty US$ wants to break the only CARTEL that has been tolerated for soooo long : OPEC !
OPEC has "served" the US$ well for the past 30 years. The cartel has becomed an embarresment to further authocratic ambitions of the dollar-reserve. OPEC must be desintegrated !
The invasion/occupation of Afghanistan and many other states, north of it, plus the intention (will) to do the same with Iraq, are more than enough evidence. Saudi Arabia is slowly but surely pressed as to force it to decide in wich camp it (SA) wants to retire. And last but certainly not least is the confrontation in Israel as "the" fulcrum.

The US$ has been dictating the "worth" of almost everything.
Oil and Gold lost that power gradually, but are in the process of rising up against the almighty dollar. That's the struggle we are "all" living, today. Faites vos jeux, messieurs, dames ! (make your bets ladies and gentlemen)
Galerider
FROM THE STREETS OF JAPAN
.....My job here requires me to be in the office by six thirty each morning. I usually arrive at the train station by around five fifteen. Armed with coffee and the newspaper,
I stand on the platform to await the train. At that time of the morning, there is on average fifteen other people. It is almost to the point that we know each other's names and engage in small talk about the weather, economy, etc. But all this week, more than fifty people have been catching the train at that time. Normally you see that number at around seven a.m. as people make the trip to be in the office by nine. The last time I saw this number on the platform in what we know as the early hours (five), a round of layoffs came to past with some major corps in Tokyo (NEC for one). No one is talking. With regards to comparisons between Japan and the U.S. economy, I would have gone with the scenario that like the Japanese population, the U.S. people would soon learn to accept the slow, painfull economic situation that Japan has been in the last ten years. Learn to live with a bit less, work longer than anticipated for retirement, etc. But when the real estate haven in the U.S. breaks down, the pain will be swift.
ski
60 Forces for higher Silver prices

On 3/25/2002 post #72139 I put up a list of 44 approaching forces for higher silver prices. The list has now grown to 60 entries. To qualify for the list, entries must have two qualifiers: FAIRLY LARGE IN SCOPE and STILL YET TO COME.

45. Because of the ongoing silver supply deficit, known silver stockpiles are low and are well on their way to zero. Between now and "zero-stockpile-day", SOMEONE-SOMEWHERE WILL ATTEMPT TO BUY AS MUCH AS POSSIBLE OF THE REMAINING STOCK. Wealthy individuals, hedge funds, political entities and un-named countries are all possible candidates. This "accident waiting to happen" will come unannounced and as a surprise.

46. The historically common practice of stockpiling silver by the big money crowd is not currently in vogue. Worldwide rebuilding of government strategic stockpiles, central banker vaults and Swiss custodial bank accounts will come back into fashion by TPTB.

47. Because silver has been profitless for so long, when the price finally rises and mining companies deide to gear up, one of their "discoveries" will be A SHORTAGE OF EXPERIENCED WORKERS. Who is left that still has the technical knowledge, experience and gumption to get the job done?

48. When INFLATIONARY FORCES once again sweep the land, SILVER and other PM's will shine as usual. Why? PM's have always been one of the vehicles of choice during inflationary periods.

49. INVESTMENT DEMAND ... JAPAN. The world's most successful savers are being pushed to the edge of a financial cliff. Precious metal investment represents their only viable means of escape & PROFIT. With an average nest egg of $115k AND $5 silver, the entire 100 million ounce COMEX stockpile could theoreticaly be bought by 4,348 Japanese families. DESIRE, NEED & ABILITY are all in place for this activity to begin.

50. If GOLD FUND MANAGERS only agree that silver will make appreciably larger percentage moves than gold, then we can conclude that even the GOLD FUNDS (who can own silver shares and physical), ARE UNDERWEIGHTED in silver. Once they begin listing multiple silver mining companies among their "largest holdings", we will know that they finally got the proper message.

51. NEW USES ... Special case. Traditional SOLDERING MATERIALS have primarily contained a tin-lead alloy. In Japan, environmental concerns have prompted regulations calling for the complete phasing out of lead in consumer and electronics products sold there by 2005. A tin-silver alloy containing about 3.5% silver has proven to be the best of the alternative alloys.

52. Due to the growing need for government revenue and mass computerization, a rapid DETERRIORIATION OF PERSONAL FREEDOM & PRIVACY is underway. Many will conclude that rather than opening an offshore trust, secret Swiss account of the like, most of the same benefits can be had by simply selling those dollars locally and purchasing non-countrfeitable assets like PM's, gemstones, collectibles and the like. These holdings represent pure distilled freedom & privacy. Assuming that they are properly concealed, they are pure wealth that can never ever be taken away from you, taxed or litigated away.

53. The present public perception says that "BECAUSE SILVER IS SO CHEAP, IT CAN'T BE VALUABLE!" A Ted Butler essay said it this way, "PEOPLE DON'T LIKE SILVER BECAUSE YOU GET TOO MUCH FOR YOUR MONEY." What can we conclude? After silver gets high priced, people will then recognize that silver IS VALUABLE and will then want it!

54. As a civilization advances, the per capita usage of silver increases by an disproportionately wider margin. Much of the third world population, particularly in Asia, is rapidly advancing toward the ranks of the developed world. This APPROACHING MASS OF HUMANITY will want to take their share of family pictures and connect their new refrigerators, TV's, washing machines, cell phones and air conditioners to the electric/electronic, silver-consuming gid just like you and I.

55. The industrial demand for silver significantly exceeds the supply from mines and recycling. When above ground inventories run out, mines and recycling will not be able to gear up to fill all of the demand. SOME SILVER USERS MUST NECESSARILY BE DENIED SILVER. Who will they be? If the macro users (jewelry, flatware & coin makers) were the biggest buyers, rising prices could shut them out of the market and market equilibrium would be quickly reached. However, this is not the case. It is the micro users (companies that use tiny amounts of silver per product) that are the largest silver consumers ... Kodak & DuPont. The message is that equilibrium will occur, but only at prices that are extreme.

56. For both the little and big people in the distant corners of the world, squirreling away US dollars has been one of the preferred methods of saving. It is estimated that two-thirds of the US currency in existence is in circulation in other countries. The USS Titanic has already struck a few icebergs but still larger, unavoidable ones are directly ahead. Once it finally becomes apparent that the ship is lost, THESE FOREIGNERS WILL SHED THEIR DOLLAR BILL LIFEJACKETS and successfully escape in seaworthy gold, silver and platinum lifeboats.

57. During falling equity markets, invesotrs have always rushed to high dividend paying enterprises. To pay high dividends, a company needs to be lean n' mean and and be positioned in a profitable sector. While silver mining companies are currently unprofitable and pay no dividends, these companies can be expected to be wildly proitable and have more cash than they know what to do with. HIGH DIVIDENDS from silver mining companies are therefore inevitable.

58. Unlike real estate, farmers, banker, doctors, labor unions, and even the homeless, silver has NO POLITICAL ADVOCATES and enjoys NO LEGALIZED PRIVILEDGES that everyone else seems to enjoy. Silver presently gets "no respect" and it shares the dog house with only gold, uranium and tobacco. (It even earns negative respect from the Silver Users Association who's mission seems to be to depress silver prices to their own benefit.) Once stockpiles go to zero, an immense appreciation for the unloved metal will emerge and special financial favors will follow.

59. Gold is ACCUMULATED but silver is LOST due to micro-usage-depletion. Consequently, silver has less total quantity in existence every single day. As hard as this is to believe, reliable estimates indicate that there is currently 10 times more gold than silver in above ground stocks! While this phenomenon has been going on for some time and is not a new force, THIS OBSCURE STATISTIC IS NOT WIDLY KNOWN and clearly has not been priced into the commodity.

60. History reveals that year over year silver production has increased for as far back as the eye can see. A new era will begin in 2002 as YEAR OVER YEAR SILVER PROUCTION IS PROJECTED TO DECREASE. This produciton decrease will aggravate the current supply/demand imbalance.

What a fantastic story silver will make!!!
Blackjack
Swiss cut grow estimate 2002 by 50%
Bern, Aug. 22 (Bloomberg) -- Switzerland's economy this year will grow at half the pace the government expected six months ago because of a slump in exports, which account for 45 percent of the economy.

Gross domestic product in Europe's seventh-largest economy will expand 0.5 percent as exports decline 0.3 percent, the Department for Economic Affairs said in a faxed statement. The government had expected exports to rise.

``The economic recovery will be delayed by two or three quarters,'' the department said in the statement. ``The slow global economic recovery is the main reason.''

Companies said today that they've felt the pinch. Specialty chemical maker Clariant AG's first-half sales fell 5 percent. Bucher Holding AG, the world's biggest maker of machinery that produces fireproofing materials, said full-year operating profit will decline along with revenue. Tamedia AG, the second-biggest Swiss publisher, said first-half sales dropped 16 percent.

The government said equipment spending will fall 8 percent this year, four times the rate it forecast half a year ago. Swisscom AG, the country's dominant phone company, said today it's cutting 400 jobs at its phone-equipment business, a quarter of the unit's workforce, as clients hold back on spending.

The Swiss National Bank moved to stimulate economic activity in July by cutting its key lending rate, citing ``increasing signs from Switzerland and abroad pointing to a delay in economic recovery.''

Policy makers said growth in Europe's seventh-biggest economy this year will be ``considerably short'' of their previous 1 percent forecast. Exports account for about 45 percent of the Swiss economy.
Blackjack
Gold purchases in Japan zoom higher
TOKYO (Dow Jones)--Japan's imports of gold more than doubled in volume in July from the same month a year earlier, the Ministry of Finance said Thursday.


The 105.5% jump followed a 282.1% surge in June. Many Japanese have looked to gold in recent months as a safer investment than the country's shaky banking system.
_______________
Shaky LOL
Black Blade
Saudi lawyer sues over 11 September
http://news.bbc.co.uk/2/hi/middle_east/2208082.stm

Many Saudis see the US lawsuit as politically motivated

Snippit:

A lawyer in Saudi Arabia is planning to launch legal action against the US Government in connection with the 11 September attacks, claiming unspecified damages. It comes less than a week after US lawyers started proceedings for massive damages from members of the Saudi royal family and charities in the kingdom, accusing them of helping to finance al-Qaeda and its leader Osama Bin Laden - the man accused of organising last year's suicide hijackings. The Saudi lawyer, Qatib al-Shamri, says he is acting on behalf of people who were wrongly tied to al-Qaeda by the US authorities. Among his clients are several students who say they were wrongly detained without charge by the US authorities and prevented from continuing their studies there. Others are Saudis whose names and pictures were published in US newspapers as potential al-Qaeda suspects. Some expect other Saudis with similar claims to join the action. Already it is being seen as a response to last week's much larger lawsuit on behalf of 500 people who lost relatives in the New York and Washington attacks, which al-Shamri described as "bogus and politicised".


Black Blade: Quid Pro Quo? I thought that this response was a possibility. The Saudis could also set a higher minimum price for oil as punishment against the west in retaliation. "Interesting Times"

Blackjack
CSFB : "Looks like a Bear Market Rally"
Frankfurt, Aug. 22 (Bloomberg) -- Credit Suisse First Boston advised investors to reduce their holdings of global stocks after benchmark indexes in the U.S. and Europe rallied from five-year lows set last month.

Fund managers should hold 62 percent of their assets in equities, down from 65 percent previously, according to Stuart Doole, an equity strategist at CSFB. Investors should increase their cash holdings to 7 percent from 4 percent and keep their bond holdings unchanged at 31 percent.

``More uncertainty about economic data prompted us to take some money off the table,'' Doole said in an interview. ``This looks like a bear market rally.''

The U.S. Standard & Poor's 500 Index and Europe's Dow Jones Stoxx 600 Index have gained more than 15 percent in the past four weeks. Signs that an economic recovery in the U.S. and Europe is faltering may mean that shares are now expensive, CSFB said.

The Swiss government today said its economy will grow at half the pace it expected six months ago and the chief executive officer of Rio Tinto Plc, the world's No. 3 mining company, said he's concerned about the strength of a U.S. economic recovery.

Oil, Media, Phone Equipment

The S&P 500 trades at almost 19 times its members' forecast earnings, 24 percent higher than in July, when the price-to- earnings ratio fell to the lowest in at least three-years. Stoxx 600 companies change hands at an average of 19 times projected profit, about 40 percent higher than in September last year.

To reduce their equity holdings, investors should sell oil, media and phone-equipment shares, the brokerage arm of Switzerland's second-largest bank said.
_____________
They forgot to add : Get You Some Gold and Silver %^)
Black Blade
TO HEDGE OR NOT TO HEDGE?
http://free.financialmail.co.za/02/0816/companies/dcomp.htm
Snippit:

Certainly, in the June quarter the nonhedgers had it right. Hedging meant that AngloGold's average realised price was US7/oz less than the spot price, and Avgold's hedge is almost R1bn in the red. AngloGold claims its hedging operations have brought profits of more than $1,2bn in the past decade, and says that in a multimine, developing company hedging is necessary to bring some revenue certainty. That has always been Avgold's justification, too. Gold Fields MD Ian Cockerill, on the other hand, has suggested that gold projects depending on hedging for success may not be worth doing. And Harmony CEO Bernard Swanepoel has said he prefers to focus on what he can control, like costs. He says investors are showing a preference for unhedged gold stocks, indicated by comparing recent price performance of AngloGold and Gold Fields.


Black Blade: Forward selling in the gold industry has contributed to lower gold prices. From the point of view on Wall Street, forward sold gold production is viewed as physical gold already in the supply pipeline and that skews the supply-demand dynamics. Of course this is ridiculous as the gold has not yet been mined, but that is how Wall Street looks at it. When large producers sell forward years of production it does affect the gold market. When companies unwind these hedges, Wall Street has taken notice and in recent times the POG has risen along with that company's share price. During this gold bull the non-hedgers have outperformed the hedgers � as it should be. The day of the hedger is over.

Belgian
TA / TI .... VOODO >>> FWIW !
Stockmarket's Elliot Wave ~~~ABC~~~ pattern, as technical rebound, in the gigantic bear market, is pettering out. Nicely corresponding with the corresponding pattern of our beloved precious yellow (ABC-decline in early stages of the coming gigantic bull market). Watch Palladium/Coffee/Nickel. And see what cocoa has already done. Long Term momentum-indicators (TRIX/PHASE) on commodity indexes, leave us with no other choice than high probabilities for positive interpretation, soon to be seen more explicitly. POO might consolidate for a while and then take a deap breath for the runner up to the 40$ target.
etc...etc...

NIA and dramatic changes could un-expectly, reverse these long term (10 years) momentum-interpretations, in no time. For instance a 180� turn in US geopolitical attitude or other major events (imponderabile).

Disclaimer / Writer is Holding Physical Gold .
Spartacus
Mideast investors turn sour on U.S. holdings
http://www.iht.com/articles/68431.html
Eric Pfanner
International Herald Tribune
Thursday, August 22, 2002

"Middle Eastern investors, worried about rising tensions with the United States and the health of the American economy, are growing increasingly wary about holding vast U.S. assets, analysts say. But the analysts warned that there was no evidence of a stampede out of dollar assets.

The dollar retreated briefly against the euro on Wednesday after the Financial Times reported that Saudi investors had pulled assets totaling hundreds of billions of dollars out of the United States since Sept. 11. But the currency later recovered, and the euro was trading little changed at 98 U.S. cents.

Evidence for such withdrawals remains sketchy. Signs do exist that individuals and governments throughout the region may be looking intensively for alternatives to the dollar and dollar-denominated investments.
-------------
Where the money is going is unclear. Economists said they had seen few signs of a mass repatriation of Middle Eastern assets, though the relatively closed, illiquid stock markets in Saudi Arabia and Kuwait have risen by 9 percent and 24 percent this year, respectively.

Because oil is traded in dollars, many Middle Eastern investors with a presence in that business may simply prefer to shift their U.S. assets to dollar accounts in European banks.

Some big oil exporters have long sought an alternative to the dollar, but efforts have not gone far. Iraq several years ago did switch over to pricing oil in euros, however, and a Tehran-based newspaper, the Iran Daily, reported Wednesday that that country had shifted more than half of its $7 billion in foreign currency reserves out of dollars and into euros.

"Given the superiority of the dollar against other hard currencies, the U.S. monopolizes global trade," the paper quoted a lawmaker as saying. "With the entry of euro in international commerce, global trade would become more legitimized," he added.
Spartacus
Iran Converts Half of Foreign Reserves Into Euros
http://quote.bloomberg.com/pgcgi.cgi?ptitle=Global%20Currencies&touch=1&T=markets_bbcofeat99.ht&s=APWNBhhXTSXJhbiBD
Tehran, Aug. 21 (Bloomberg) -- Iran has converted ``more than half'' of the country's $7 billion foreign reserves into euros to help boost trade with the European Union, the Iran Daily newspaper reported, citing a member of parliament.

The European currency's more than 10 percent rise this year against the dollar will give oil exporters ``a chance to usher in a new chapter in ties'' with European states, said Mohammad Abasspour, a member of the Iranian parliament's development committee, the newspaper reported. The lawmaker said he hoped a strong euro would weaken the U.S. ``monopoly'' of global trade.

The Middle East's second-largest oil producer recorded 6.5 billion euros in exports to the European Union last year, of which oil and its derivatives accounted for 80 percent. A rise in the euro will make Iran's exports cheaper for European customers.

Waverider
Gold Is Regaining Its Luster for Asian Central Banks
http://www.tehrantimes.com/Description.asp?Da=8/21/02&Cat=9Νm=12Snippit:
"Central bankers in Asia have become far more receptive to talking about gold than they were a couple of years ago," said Ralston Thiedeman, head of the Asia-Pacific and Indian subcontinent sector of the World Gold Council (WGC). Interest in gold reserves has risen among central banks because of the uncertain environment created by the slowdown in the U.S. economy and geo-political instability, he noted."
misetich
J.P. MORGAN CHASE (Aa3) on downgrade review amid concerns about profitability, earnings volatility
http://www.moodys.com/cust/loadHighLight.asp?documentID=1501600000003560∨iginal=1Snip:

Approximately $42.4 Billion of Debt Securities Affected

New York, August 21, 2002 -- Moody's Investors Service placed the long-term ratings of J.P. Morgan Chase & Co. (senior unsecured at Aa3) and its subsidiaries on review for possible downgrade.

Moody's said that the review reflects concern about J.P. Morgan's current and prospective profitability, as well as earnings volatility relative to other major banks. Declining activity in capital markets, restructuring expenses, and rising credit losses have all contributed to weak profitability since the merger of J.P. Morgan and Chase Manhattan. Weak operating margins and rising credit losses may exacerbate profitability pressures in the future.

The rating agency said that J.P. Morgan Chase's strategy to combine commercial and investment banking has met mixed success so far. The bank is an industry leader in loan syndication and fixed income underwriting and trading. Nonetheless Moody's thinks that growing J.P. Morgan's market share in equities underwriting and trading may be time consuming and expensive. Moreover the bank's role in the Enron affair may damage its reputation, subject it to greater regulatory scrutiny, and expose it to expensive litigation. All of these factors, and a weak market environment, suggest heightened execution risk for J.P. Morgan's investment banking strategy over the medium term.

Moody's notes that J.P. Morgan Chase's other businesses - retail, investment management, and securities processing - provide diversification and help cushion the volatility of earnings from investment banking and venture capital. Accordingly, the firm is expected to stay soundly profitable through the credit and market cycle. The bank maintains a substantial base of common equity, and its Tier One capital ratio currently stands at a strong 8.7%.

The rating agency said that J.P. Morgan Chase has ample liquidity at its operating subsidiaries as well as the holding company, and that the credit, market, and liquidity risks of its profitable derivative franchise are well controlled.

Moody's said the review will focus on the medium-term outlook for the bank's profitability and asset quality including commercial loan exposures, industry concentrations, and credit portfolio management. J.P. Morgan Chase's venture capital portfolio will also be reviewed.
***********
Misetich
" industry concentrations" - could it be gold derivatives?

Got gold?
Spartacus
Inside The Secret War Council
http://www.time.com/time/nation/article/0%2C8599%2C338628%2C00.html
Time magazine
BY MARK THOMPSON
Thursday, August 22, 2002

--How an unpaid conservative board that holds private meetings and puts nothing in writing gets heard at the Pentagon--

misetich
Could Productivity Become Even Less Miraculous Than Its Been?
http://www.ntrs.com/library/econ_research/daily/us/020819.htmlSnip:
Upon reflection, the BEA and BLS have decided that the "new economy" productivity miracle was somewhat less miraculous than it was thought to be. To control for the pro-cyclical nature of productivity growth, it is best to look at its behavior over complete cycles. The table below shows the compound annual rate of growth of nonfarm productivity from peak-to-peak in nonfarm business real output in the postwar period. Although at 1.96%, productivity growth in the last cycle was higher than it was in the previous two cycles (73:Q2 - 80:Q1 and 80:Q1 - 90:Q2), it was less than the productivity growth in the five cycles starting in 48:Q3 and running through 70:Q3. Moreover, the 1.96% productivity growth in the last cycle compares unfavorably with the 2.25% growth from the cycle peak of 48:Q3 to the cycle peak of 90:Q2. In sum, some were perhaps a bit premature in proclaiming a productivity miracle.

.............
But that's water under the bridge. What is more important is the future course of productivity growth. Will it continue along its unspectacular path of almost 2% of the last cycle or will it slip lower? The chart below shows that real private nonresidential investment as a percent of real gross domestic purchases is headed south. And we don't know how much of this lower percentage reflects simply replacing worn out plant and equipment rather than a net addition to the capital stock. If record absolute and relative amounts of business investment could not give us anything but less-than-"average" productivity growth, how are more motor vehicles, bigger houses, and cruise missiles going to keep productivity from slipping even more? If the Fed keeps printing money at the 11-1/4% annualized pace it has in the past 13 weeks, we might just end up with some stagflation.
***************
Misetich

The productivity con job - a Greenspan scam

Got gold?
Blackjack
Ciena sales fall 89%
Linthicum, Maryland, Aug. 22 (Bloomberg) -- Ciena Corp., the third-biggest U.S. maker of fiber-optic equipment, had a third- quarter net loss as sales tumbled 89 percent.

The loss in the period ended July 31 was $160 million, or 42 cents a share, compared with net income of $5.7 million, or 2 cents, a year earlier. Sales slid to $50 million from $458.1 million, the Linthicum, Maryland-based company said in a statement.

Ciena predicted that revenue would be unchanged or rise slightly this quarter from the third period.

Orders for Ciena's equipment, which moves and directs information across fiber-optic networks, plummeted in the past year as demand for phone and data services waned.

Ciena shares fell 24 cents, or 5.3 percent, to $4.25 at 7:27 a.m. New York time in Instinet trading. They had declined 74 percent in the past year.
________________
The news wire stories this morning give me an erie feeling
of a sense of impending doom in the markets. Weird feeling.
Blackjack
Jobless Claims higher than expected
Washington, Aug. 22 (Bloomberg) - A higher-than-expected number of people filed new claims for unemployment benefits last week, more evidence of a slow recovery from recession.

States received 389,000 initial applications, after a revised reading of 391,000 the prior week, the Labor Department said. Economists had expected claims to fall to 385,000 from a previously reported 388,000.

The four-week moving average of claims, a less volatile measure, rose to the highest level in more than a month. Companies such as Cingular Wireless and American Airlines have announced firings this month in an effort to cut costs.

``I don't know if we have seen the bottom in the jobs market,'' said William Sullivan, an economist at Morgan Stanley in Jersey City, New Jersey, before the report. ``There's just no hiring going on.''

BillinOregon
Roger Bently Arnonold
General Comments

This is going to be the last DO for a week or two. Unless something very important happens I'm going to take some time off (sometimes reality is draining and recoup time is necessary) as well as focus some time on the mortgage business.

This was not planned but seems like a good time to do so. It's a slow news time of year. The path to double dip recession is on track and in my opinion we are already in it. With the exception of the breadth and length of the equity run of the past five weeks, which has certainly been both interesting and bizarre, all of the fundamentals world wide are signaling a rapid deceleration of economic activity.

During the interim keep an eye on Iran and North Korea and do not be distracted by the talk of war with Iraq. Although Saddam Hussein is a problem Jim Jong Ill is insane and there are far more terrorist training camps in Iran than in Iraq. I believe the talk about Iraq is less about Saddam Hussein and more about getting him out of the way so that we can then launch into Iran from Iraq.

CoBra(too)
Bad Deflation and other Matters ....
All over Europe economic growth forecasts are being dramatically revised, stating that the US engine is sputtering.
EU's Germany and small Austria will be postponing a much needed tax reform to stimulate capital expenditures under the pretext, or excuse that hard hit flood areas must have priority.
While the devastation of the severe floods will cost tens of billions of euros - it still will be only probably 0.1 to .3% of GDP. A tax reform may bring real growth back to at least a full percentage point above any expectation.

Dan Denning has the following to say:
....What we have is a cycle of perversity. Falling prices are good for the consumer but not for corporate profits. And
if, in an effort to stay competitive, firms fire workers to
keep margins high, what's good for the firm is now suddenly
bad for the fired worker, who suddenly has a lot less money
to consume. Consumers drive prices, not producers. And it
leads to what I call "bad deflation."

Bad deflation is not supply-side driven. Supply-side
deflation is caused by excess supply of goods and services.
It usually happens after a technology boom, where either
the boom makes production more efficient and floods the
market with goods or the new products are actually new
technologies, like cars, radios, T.V. sets, or computers,
DVD players, and cell phones. Excess supply can be worked
off simply by selling off inventories and lowering
production. If prices are low because there's too much
stuff and not enough demand, then firms make fewer goods.
Prices eventually rise until supply meets demand.

But in demand-side deflation, where there's insufficient
demand, consumers EXPECT lower prices and withhold spending
money. Firms can only induce more spending by lowering
prices further. It's the formation of what my friend Greg
Weldon calls the consumer "cocoon." Greg cites Japan as the
foremost example of how a collective change in consumer
psychology--the expectation of falling prices--leads to the
reality of lower spending, higher saving, lower corporate
profits, and eventually...lower stock prices.

I believe we're in the midst of a growing demand-side
deflation. Again, it's a strange irony. It's great for
consumers to see falling prices. It's bad for firms to see
falling profits. Such is capitalism...which serves
consumers and puts enormous demands on firms to remain
solvent.

But What About Debt?

Demand-side deflation gets even more poisonous for the
economy when you throw in debt. During deflation, cash
gains in purchasing power. Great for those who hold cash.
Not so great for those who hold debt. And there are a lot
of Americans--corporations and individuals--holding a lot
of debt.

Moody's reports that corporate debt doubled in the last
five years to $3.9 trillion. Firms--either to expand
capacity or borrow money cheap and invest it in the stock
market at a higher return--went on a borrowing binge. As
long as the return on capital exceeds the cost of the
capital, you're fine. You can borrow from Alan Greenspan at
1.75% and invest in the stock market and make 20%--not a
bad trade at all, IF the stock market holds up its part of
the bargain.

Trouble is, the stock market has not been cooperating. And
as a result, the debt--and the cost of servicing it--remain
on the balance sheet while the profits from investing the
borrowed money are all but gone. The result? Moody's calls
it the "worst credit stress since the Great Depression of
the 1930s." I call it debt-deflation.

Moody's reports that 42 companies defaulted on $46 billion
in loans in the second quarter. For the entire first half
of the calendar year companies failed to pay $76 billion in
loans--that's up 64% from the first half of 2001. What's
going on? Corporate America is unable to pay its debts
because profits are falling and so is the stock market. The
assets have fallen in value. The debts remain. And the cost
of paying those debts goes up as dollars get more valuable.

That's the cruel nature of debt-deflation. You pay back
borrowed money in more valuable dollars. Debtors love
inflation, where they can pay back loans with money that's
worth less. And now you know why the Federal Reserve is
doing everything in its power to cause at least some
inflation. If it doesn't debt deflation will quickly lead
to more bankruptcies, both personal and corporate. It's a
truly dismal and frightening economic scenario which has
only struck the American economy once before...in the
1930s.
.....

Looks like Japan Inc. revisited to me. Financial assets deflating at an accelerating pace - this may include real estate as it was used more as a financial asset or say collateral in refinancing private consumption.

- Real hard assets will be the only and ultimate place to store your wealth - and it may well be a long and trying process ahead of us until a final capitulation. Or what's more to restore confidence and equilibrium in markets, politics, justice and ethics.
...Got gold? cb2

PS: MK, hello my friend, thanks for your comments recently. GB2 has surely and squarely inherited all the pent up problems since Ronald Reagan, introducing supply side economics, which were carried onwards by (now Sir) Allan in since (Oct.) 1987 in, it seems a way, which would have John Maynard K., look like a debutante of his own thesis.

PPS: Will have to undergo some more treatment in Sept. - all the best FRR.



sector
Ex-Enron Official Admits Payments to Finance Chief
http://www.nytimes.com/2002/08/22/business/22ENRO.htmlBy KURT EICHENWALD

"The conspirators created an array of companies designed to disguise Enron's vulnerability to risk and losses, and to benefit the conspirators at the expense of Enron's shareholders," the deputy attorney general, Larry D. Thompson, said at a news conference in Washington.

+++++++++++++++++++++

Since Enron was funded in part by JP Morgan's, off balance sheet, off shore Mahonia and Yosemite, it too must be considered as Enron co-conspirators. The JPM funding was at least $500 Million.

Getting pretty close to GoldGate.
Socrates964
POG
Not doing too badly, IMHO, given drag of strong dollar/strength of Naz/bank shares. May even get a relief rally back to $315 or so.
Pizz
Commodities
Just heard a floor trader explain the rise in commodities prices as anticipating world wide economic recovery.

I wonder if anyone publicly can figure out that world wide anticipation of currency collapses will have the same effect.

We've already learned the hard way that 2 + 2 does not equal 5 (or 15 if you're Enron). We're about to learn the hard way again that the world wide stock markets are a leading indicator 9 to 12 months out, and unless my charts are all upside down, they are forcasting major economic contraction. And for those who want real time cash information on a global basis, all they have to do is look at the shape of Argentina, Uraguay, Brazil, Japan, or the US multinationals that are being downgraded.

The public has a cannon aimed at their collective backsides and the PTB is trying to make darn sure everyone's heads are buried very deeply in the sands (of the ME????).

Enough of a rant as I head for my third meeting with our major investor in three days and again try to convice him that 2+2 does not equal whatever number he has in mind, cause it sure ain't 4.

In my next life I'm going to try to do something simple for an occupation, like turning lead into gold.

Bottom line for those who are impatient, we're real close to the SHTF. Get your gold while you still can.

Pizz
Waverider
Silver lease rates
http://www.kitco.com/charts/s_leaserates.htmlHeads up - big jump today in the one-year lease rate.
USAGOLD / Centennial Precious Metals, Inc.
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http://www.usagold.com/ProductsPage.html

Swiss Gold Francs

Get the Legendary SECURITY of a Swiss Account...

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Call USAGOLD - Centennial for Arrangements
1-800-869-5115

sector
Top 99 Current Bond Issuers
Only Three Are AAA Rated...A Clue to the Economy's StatusInvestment Grade Bond Issuer [S&P]____Coupon__Maturity____Rating
Merck & Co. Inc.____________________ 6.40____03/01/28____AAA
Mobil Corp.________________________ 8.63____08/15/21____AAA
Warner-Lambert Co.__________________6.00____01/15/08____AAA
Atlantic Richfield Co._________________ 5.90____04/15/09_____AA+
Abbott Laboratories Inc._______________ 5.63____07/01/06____AA
Bristol-Myers Squibb Co._____________ 6.80____11/15/26_____AA
Kimberly-Clark Corp._________________ 6.25____07/15/18____AA
Lilly (Eli) & Co.______________________ 7.13____06/01/25____AA
Wal-Mart Stores Inc._________________ 6.88____08/10/09_____AA
DuPont (E.I.) De Nemours & Co._______ 6.88____10/15/09_____AA-
Illinois Tool Works Inc._______________ 5.75____03/01/09_____AA-
Procter & Gamble Co._______________ 6.88____09/15/09_____AA-
Alcoa Inc._________________________ 7.38____08/01/10_____A+
Anheuser-Busch Cos. Inc.____________ 6.80____01/15/31_____A+
Archer Daniels Midland Co.___________ 8.38____04/15/17_____A+
Caterpillar Inc.______________________ 8.00____02/15/23____A+
Cingular Wireless LLC_______________ 7.13____12/15/31_____A+
Electronic Data Systems Corp._________ 7.13____10/15/09_____A+
International Business Machines Corp.___5.38____02/01/09_____A+
Loews Corp._______________________ 7.00____10/15/23_____A+
McDonnell Douglas Corp.____________ 9.75____04/01/12_____A+
Sara Lee Corp._____________________ 6.25____09/15/11____A+
Target Corp._______________________ 7.50____02/15/05_____A+
United Technologies Corp.____________ 8.88____11/15/19_____A+
Campbell Soup Co._________________ 6.90____10/15/06_____A
Cintas Corporation No. 2_____________ 6.00____06/01/12_____A
Coca-Cola Enterprises Inc.____________ 6.95____11/15/26_____A
Dow Chemical Co. (The)_____________ 7.38____11/01/29______A
Emerson Electric Co.________________ 5.00____10/15/08______A
Fortune Brands Inc._________________ 6.25____04/01/08_____A
Gannett Co._______________________ 6.38____04/01/12_____A
Heinz (H.J.) Co.____________________6.38____07/15/28_____A
Honeywell International Inc.___________7.50____03/01/10_____A
Lowe's Cos. Inc.____________________ 8.25___06/01/10_____A
May Department Stores Co.___________ 6.70___09/15/28_____A
Rockwell Automation, Inc.____________ 6.15____01/15/08_____A
Times Mirror Co.___________________ 6.61____09/15/27_____A
Vodafone Americas Asia Inc.__________ 6.35____06/01/05_____A
Apache Corp.______________________ 6.25____04/15/12_____A-
Deere & Co._______________________ 6.55____10/01/28_____A-
Disney (Walt) Co.___________________ 6.75____03/30/06_____A-
Halliburton Co._____________________ 6.00____08/01/06_____A-
Hewlett-Packard Co._________________ 7.15____06/15/05_____A-
Kraft Foods Inc.____________________ 5.63____11/01/11_____A-
Pepsi Bottling Group Inc. (The)_________7.00____03/01/29_____A-
Rohm and Haas Co.________________ 7.85____07/15/29_____A-
Sears Roebuck & Co.________________9.38____11/01/11_____A-
Viacom Inc.________________________7.75____06/01/05_____A-
Marathon Oil Co.____________________6.80____03/15/32____BBB+
Tosco Corp._______________________ 8.13____02/15/30___BBB+
Albertson's Inc. ____________________ 7.45____08/01/29____BBB+
Time Warner Inc.___________________ 6.63____05/15/29____BBB+
Conoco Inc._______________________ 6.95____04/15/29____BBB+
Anadarko Petroleum Corp.___________ 7.20____03/15/29____BBB+
Union Oil Co. of California____________7.50____02/15/29____BBB+
Ford Motor Co._____________________ 6.38____02/01/29___BBB+
General Motors Corp.________________ 6.75____05/01/28___BBB+
Dell Computer Corp._________________7.10____04/15/28____BBB+
Ingersoll-Rand Co.__________________9.00____08/15/21____BBB+
Masco Corp._______________________7.13____08/15/13____BBB+
General Mills Inc.___________________ 6.00____02/15/12____BBB+
Federated Department Stores Inc.______ 6.63____04/01/11____BBB+
ConAgra Foods Inc._________________ 6.00____09/15/06____BBB+
Sun Microsystems Inc.______________-_7.50____08/15/06_____BBB+
Olsten Corp._______________________ 7.00___03/15/06____BBB+
Burlington Northern Santa Fe Corp.____ 6.38____12/15/05____BBB+
TCI Communications Inc._____________ 8.00____08/01/05____BBB+
Amerada Hess Corp.________________ 7.88____10/01/29____BBB
Delphi Corp._______________________ 7.13____05/01/29____BBB
Neiman Marcus Group, Inc. (The)_______ 7.13____06/01/28____BBB
Occidental Petroleum Corp.___________ 7.20____04/01/28____BBB
Cooper Tire & Rubber Co.____________ 7.63____03/15/27____BBB
Westvaco Corp.____________________ 7.65____03/15/27____BBB
International Paper Co._______________ 6.88____11/01/23____BBB
Consolidated Rail Corp.______________ 9.75____06/15/20____BBB
Norfolk Southern Corp.______________ 7.70____05/15/17____BBB
Weyerhaeuser Co.__________________ 7.25____07/01/13____BBB
Visteon Corp.______________________ 8.25____08/01/10____BBB
Lockheed Martin Corp._______________ 8.20____12/01/09____BBB
Safeway Inc._______________________ 6.50____11/15/08____BBB
CSX Corp.________________________ 6.25____10/15/08____BBB
Union Pacific Corp.__________________ 6.63____02/01/08____BBB
Comcast Cable Communications Inc.____ 7.63____01/02/08____BBB
Kerr-McGee Corp.___________________ 6.63____10/15/07____BBB
TRW Inc.__________________________ 8.75____05/15/06____BBB
Motorola Inc.______________________ 6.75____02/01/06____BBB
Cox Communications Inc.____________ 6.88____06/15/05____BBB
Valero Energy Corp.________________ 8.38____06/15/05____BBB
SuperValu Inc._____________________ 7.63____09/15/04____BBB
Cendant Corp._____________________ 7.75____12/01/03____BBB
Northrop Grumman Corp.____________ 7.75____02/15/31____BBB-
News America Inc.__________________ 7.13____04/08/28____BBB-
Kroger Co.________________________ 8.05____02/01/10____BBB-
Liberty Media Corp._________________ 7.88____07/15/09____BBB-
NCR Corp._______________________ 7.13____06/15/09____BBB-
Raytheon Co._____________________ 6.75____08/15/07____BBB-
Centex Corp._____________________ 8.75____03/01/07____BBB-
Clear Channel Communications Inc.___ 7.88____06/15/05____BBB-
International Speedway Corp.________ 7.88____10/15/04____BBB-
sector
Allen Meyerson, New York Times Business Editor Leaps to His Death
Covered Enron, Had Psychological Breakdown in Front of Co-Workers TodayThis ensures even more Enron coverage for the foreseeable future.

Now we have a real mystery.
Operative
Back To The Future
In the past, on any given day the oceans where filled with large wooden ships either in route from or to Spain. Over the years hundreds of vessels would not endure the treacherous journey and today some still seek their whereabouts. Along with valued items such as spice, coffee, this armada was mainly built, existed for, the gathering of gold/silver. Rarely was the gathering of such done with any concern for those who had done the hard work of extricating the product. Indeed, it was often with thier blood that they gave up the metal.

Still with me here? Hang in just another minute as I have something to ponder over the weekend and on days like today when little is going on in the marketplace.

Fiat currencies, all of them, have limited function and all have a shelf life. The creators of such paper have known this all along. It has been the users of such who have always been left holding the empty bag in the end. So shall it ever be as long as "paper" exists. I am preaching to the choir here so what is my point?

The map of the world is in the state of being redrawn. The battle will not be over fiat money systems. It will be, must be, over resources. Fiat can be created out of thin air, can be easily manipulated, exchanged or allowed to simply fade away and replaced. Resources on the other hand are finite and limited and with a growing world population will gain in value as supplies are used. Knowing this what would be your personal choice to store value? And if your choice is a good one (example gold), what about a government or nation's choice? The recent bail out of Brazil, was it to save a fiat system? Maybe, short term goal. Or is it to preserve, hold foot over, gain advantage to, their resources? Hmmm...? Lets jump to another part of the map, Iraq. The headlines decry, attempt to paint, Saddam as someone who is in need of replacement. Is this what is really happening or is it more to do with a resource? To those who frequent this room credit is given to understanding such things. Yet, what audience was targeted with the poison gas doggy show? Tugging at the heartstrings in order to build up an emotion that they would be willing to send sons/daughters into harms way so as to do away with this evil axis empire. Have we as a nation/world become that ignorant? The powers that be must think so, of at least the masses.

Warships today are now ploughing the waters of the world, and like the Spanish fleet of long ago, are in search of resources. It is my belief, my humble opinion, that a map of the world will look radically different 10-20 years from now. In order to get an idea of what this map may then look like a little exercise is in order. Obtain a map of the world, a large roll of clear plastic, and some colored markers. Begin to plot the world's resources. Water, most of the commodities, mining operations of all types, areas where food is/may be easily grown,oil, make your own list. As one begins to overlay the various maps it will show that 1/3 of this planet is usefull, needed, has something of value. Some of the resources are extremely limited in where they may be obtained, example is cocoa/coffee which has a very limited band around this earth where they can be grown.

Fiat will almost certainly forever be part of the economic system. But those who control the resources will be the one's who control much of the power in the decades to come. There are major forces now positioning in order to gain control. Some objectives will be accomplished via political means, some through economic controls, and some at the end of a weapon, or threat of it's use. The game is on. To the winner will go the spoils also read as resources, also known as wealth. Grasping this future map will allow one to understand the headlines today. It will explain why the "world" has allowed the famine, disease, explosive growth of aids and political instablility that Africa is experiencing.
Someone, is soon to go after thier resources.

Some may ask, what of people? They have rights, freedoms,entitlements, etc. They are in fact a resource. Yes, in large degree a renewable one. A resource that is usefull in producing in order to pay off debt. However recent events should shed light on those that think people are so important. Take those of Enron, who faithfully toiled at thier jobs to find thier life savings have been stolen. Who is offering to bail out those people from a crisis? 30 Billion for the banksters of Brazil, no problem, done deal. Who is going to save the life savings of Enron employees...?
Yes, people are important, but in a limited way, just ask the Inca's.

Gold, a resource of great value.

Carl H
@sector: Bond Ratings
I am somewhat puzzled -- I would expect to Berkshire Hathaway on this list and it is not?
Aquarian
interesting coincidence
http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020821/ap_on_go_ot/sept_11_plane_exercise_2wonder how this coincidence happened. or i just must be crazy.
MO VER MEG
Waverider
Thanks for the heads up - much appreciated. Kind of like having eyes in the back of my head.

Lady Waverider, thanks for the kind words to my daughter. I had better be careful or I might lose my mowing partner to bigger and better things.

MOVERMEG
misetich
IMF Cuts Outlook for Most Major Economies
http://abcnews.go.com/wire/Business/reuters20020822_260.htmlSnip:

� FRANKFURT (Reuters) - The International Monetary Fund in its World Economic Outlook cut its growth forecasts for most major global economies, a newspaper reported on Thursday.

Germany's Handelsblatt said the Fund cut its growth outlook for the U.S. economy for this year by 0.1 percentage point to 2.2 percent and by 0.8 percentage point to 2.6 percent for 2003.

Handelsblatt said the figures were based on a copy of the IMF's World Economic Outlook which is due to be released late in September.

The IMF kept its outlook for the global economy unchanged at 2.8 percent growth this year, but lowered the outlook for 2003 by 0.3 percentage point to 3.7 percent.

It also lowered the outlook for the euro zone economy for this year to 1.1 percent and 2.5 percent for next year, but raised the outlook for Japan this year by 0.5 percentage point to a 0.5 percent contraction.

**********
A "leaked" report from the IMF - confirms the global decelaration -

Got gold?
misetich
Toronto-Dominion Has 1st Quarterly Loss in 15 Years (Update7)
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWVD4hUpVG9yb250Snip:
Toronto, Aug. 22 (Bloomberg) -- Toronto-Dominion Bank had its first quarterly loss in 15 years, as Canada's second-biggest bank set aside C$1.25 billion ($801 million) to cover bad loans.

The net loss in the fiscal third quarter ended July 31 was C$428 million, or 67 cents a share, compared with year-earlier net income of C$321 million, or 51 cents. Revenue dropped 7.9 percent to C$2.47 billion. Results reflect preferred dividends.

Toronto-Dominion, Canada's largest lender to telecommunications companies and one of the 10 biggest in North America, has raised reserves for loan losses three times this year, most recently to C$2.15 billion. The bank's clients included XO Communications Inc. and BCE Inc.'s Teleglobe, which went bust after building underused phone networks.

``The real question is why are banks continually seduced by the lure of corporate investing when the risks are so high,'' said Gavin Graham, director of investments for Guardian Group of Funds in Toronto, which manages about C$2.3 billion in assets, including Toronto-Dominion shares.

**********
Misetich
Gavin Graham is going to be "surprised" on the risks that banks have taken -

Got gold?
misetich
Weak economy costs Calif 115,000 manufacturer jobs
http://www.forbes.com/newswire/2002/08/22/rtr702833.htmlSnip:

LOS ANGELES (Reuters) - A slow economy and the high cost of doing business prompted the loss of 115,000 manufacturing jobs, or about 5 percent of the total force, in California since last May, according to a report published Thursday.
*************
Misetich

The Feds and O'Neil keep on re-assuring of growth ahead whilst the unemployment carnage continues

Got gold?
Socrates964
Help required
Trying to think this one through - why is the dollar strengthening - also to different degrees against other currencies - e.g. 2c drop in Swiss Franc, while Canadian $ appreciates.

All this amid headlines that Saudis are gradually pulling out cash from US (probably not just them). Evidently inflows currently stronger than the outflows.

My hunch, based on what I'm seeing in the various Brazilian FX markets (most corporates worth their sale have huge hidden reserves - famous Caixa Dois), is that US money is returning home, but why? - because the Dow is so wonderful? because execs need to line up an apparently unrelated buyer for their stocks so that they can cash in stock options? to plug the holes in their domestic operations?

Are they breaking open all their offshore piggy banks? And when does the cash run out? The only bit that's obvious is what happens when it does.

All musings appreciated!

Socrates.


Operative
Allen R Myerson
A quick tour through the internet provides a brief glance at the works of Allen Myerson formerly of the New York Times.
In the past several years he as written about rip offs in Health care, covered/exposed price gouging in the energy business, had a couple nice shots at the tobacco industry, and brought to the forefront a story of gene manipulation by Monsanto and why it cost cotton farmers millions in lost crops. He has authored a book, "The House That Greed Built".

In short, it appears another voice in the wilderness crying out against misdeeds in the corporate arena has been silenced.
sector
@Socrates About the Great Saudi Financial "Exodus"
They are simply changing brokers......in order to eliminate their account's freezability potential. The Channel Islands for one [A non-OEDC domain].

Their accounts remain largely intact with all the usual DOW/NASDAQ garbage so the dollar really isn't involved...yet.

I do expect the Suadis to begin a steady move of, say, 10% of their assets to physical metal. It may have already begun.

Such a move would add volatility to the controlled gold market...just what we have seen the last few months.
Belgian
@ Socrates964 : Why is the US$ strengthening ?
Let me give it a try to answer your question.
US$ Bonds are 10 x the volume of the stockmarket. Declining interest rates make bonds rise in value AND ALSO THE CURRENCY ! A decline in IR on a given currency, signals the confidence that this currency will keep its purchasing power. A decline in IR signals "confidence", that the debtor will be repaid ( his issued bonds). We know that all this is as false as can be, but these oceans of confetti have no alternative ! Cash / Bonds / stocks / Tangibles, that's all there is.
Cash = 1,60 % (less netto)
Stocks (and derivatives) = only trading no investment.
Tangibles = Real estate (land) and Gold.
Bonds = almost 100% insurance of further declining rates with rising bond value and underlying currency.

So in the supposition you are drawning in an ocean of dollar-confetti...what are you going to do with it, at present ? No debt will ever be paid for the simple reason that there is not enough confetti to repay or even service (IR) the colossal debts. That's why there is a fatalistic state of mind wich results in plain "plunder" and sauve qui peut (save yourself as you can). Kind of a financial deluge.
The dollar running uphill knowing very well that it approaches the abyss. Just like massive joint suicidale stampedes of lemmings. These animals do this when their food runs out and intuitively know they will starve.(grass less than 1 cm).

IRRATIONALITY is on the order of the day and increasing. Sorry, but can't come up with a very rational explanation that fits all what is happening now. Am afraid this financial idiocy will not go away before it has collapsed in its almost totality. Japan not showing any sign of structural improvement or other disaster areas giving us an example as how to restore orderly growth and stability. On the contrary ! The isolated catastrophies are contagious and affecting the globe, our village.
Cavan Man
Mr. Myerson
May his soul rest in peace. Timing is too wierd. I've been here too long. Wow!
Belgian
Saudi Petro-dollars.....
....are trapped into the infernal financial spiral as all other dollar-holdings are ! The past proliferation of all kinds (sorts) of "funds" that found masses of confetti to move it around and score multiples of it, are an inferno dance. All this confetti that refuses to pay back debt, only proliferates with more debt and gambles (derivatives).
Only 2% (maybe even less now) of all currency flows is involved in REAL economic trades. We are all so arrogantly convinced that this mad circus will and shall go round for ever ! Cheers.
I left this bachanal and sit quietly down with my Golden coins. Am enjoying it harmoniously and serenly. Good night to all of you.
misetich
Betting Against a Housing Bust
http://www.msnbc.com/news/795720.asp?cp1=1Snip:

AN EXTRA $1.3 TRILLION
Toll isn't the only one with a lot of chips riding on today's hot housing market. Across the country, home prices seem to have escaped the confines of gravity. In the past two years rising home values have added $1.3 trillion to Americans� net worth, and that's helped buoy the stagnant economy and offset plummeting stock portfolios. Last week came more good news: mortgage rates hit 30-year lows, which makes even more Americans willing to spend ever-bigger sums on homes that look better suited for MTV's "Cribs" than a typical suburb.
But as prices keep going up, some observers wonder how long it can last. Two years after the dot-com meltdown, is real estate the new bubble? Most economists (including Alan Greenspan) argue that the price increases rest on a sturdy foundation: low interest rates, strong demographics and a tight supply of homes.
..............
Still, other experts say housing has nowhere to go but down. More stock declines, rising layoffs or higher mortgage rates could bring this party to an end, they say. And some of them are trying to profit by betting on stocks like Toll Brothers to fall. Says hedge-fund manager Doug Kass of Seabreeze Partners: "Build-ers have adopted a mantra��If we build it, buyers will come��but I think it's going to burn them."
..............
************
Misetich

Greenspan on the run - bubbling away - hoping it won't burst before he retires

Got gold?
Golden Bear
Operative (msg#: 83523) - Allen R Myerson
http://www.gordonthomas.ie/162.html"....Over the years Eric Olson turned up many clues, real or coincidental. There was, for example, the assassination manual that the CIA declassified in connection with its Guatemala activities. The manual, created in the early 1950s, identified "the contrived accident'' as "the most effective technique'' of secret assassination.

"The most efficient accident, in simple assassination, is a fall of 75 feet or more onto a hard surface,'' the manual stated. "It was exactly what happened to my father," said Eric Olson...."
=============================
GB: Take alook at the two prominent names mentioned as being involved in the article...fascinating!

Cheers.
Black Blade
Hissing the 'H' Word at Bush
http://www.upi.com/view.cfm?StoryID=20020821-114449-8157r
Snippit:

WASHINGTON, Aug. 22 (UPI) -- It is time to discuss those two dreaded "H'-words. Is George W. Bush going to be Herbert Hoover? Martin Hutchinson, our Economics Editor and Bear's Lair business columnist thinks he may. And he may be right. But there is still a chance to hope otherwise.

The conclusion that Bush's economic and political record could be as catastrophic -- at least -- as that of Herbert Hoover, the hapless president who endured three and half years of the Great Depression without being able to do anything useful about it, rests on, unfortunately, on much more than the parallels between the Great Wall Street Crash of October 1929, and the one now fitfully unfolding before our eyes, although that is the obvious place to start.

As Hutchinson and our Chief Economics Correspondent Ian Campbell have been noting with alarming regularity in recent weeks, Bush has already fallen deeply into the classic Herbert Hoover groove of blindly and mindlessly repeating his mantra that business conditions an economic fundamentals are sound when it is clear to all that they are far from sound. And any freshman student of Economics 101 could tell you why --even if they didn't have the benefit of Yale and Harvard Business School degrees, as Bush does.


Black Blade: The possibility of a rejuvenated bear exists. The economy is in a desperate situation. Nothing has been done to address the most serious threats to the economy and yet Wall Street is distracted by the "dog and pony show" of disgraced corporate executives paraded in the weekly "perp walk" before hordes of media cameramen. Corporate earnings (not the "pro forma" kind) and more importantly corporate spending are almost nonexistent and corporate and consumer debt is at all time record highs. The trade deficit and government-spending deficit continues to grow. This does not bode well for an economic recovery that is supposed to be in progress. Meanwhile layoffs are still rising every week and layoff announcements have picked up once again. The real estate bubble may be the next casualty though it has held up only because of record low interest rates. However, Alan Greenspan and the Fed are quickly running out of bullets. The crises in South America and various other parts of the world are likely to sweep across borders. Japan's economy is on the verge of complete collapse as that country's banking system is for all purposes insolvent and held up by periodic government intervention. A global economic depression is building and soon the economic problems of the west are likely to get very much worse. I have stated even before George Bush was elected that he could become known as this generation's Herbert Hoover and I still stand by that.

Blackjack
Paper Flood
http://www.nypost.com/business/55304.htmAugust 22, 2002 -- THE next big blow for corporations: underfunded pensions.

Here's what happened: Companies were just as stupid as everyone else during the stock market bubble and they became dependent on abnormally large investment gains to keep pension tills full.

But that trick isn't working anymore. And, according to an important new Merrill Lynch & Co. report, of the 346 companies in the S&P 500 index that have old-fashioned retirement plans, 82 percent were overfunded by just $1.1 billion at the end of last year.

That's an incredible drop from the $215 billion overfunding level at the end of 2000.

And, you guessed it, there may be no pension surplus at all after the woeful performance of the stock market this year.

Worse, the 346 companies were actually underfunded by an aggregate $245 billion at the end of 2001 when health care benefits to retirees were included in the calculations.

Health care and other post-retirement plans are not required by the government to be funded.

Merrill Lynch also calculated that earnings for the Standard & Poor's 500 companies would have been 6.1 percent lower in 2001 if the impact of pension funds, including interest costs and expected asset returns, were not included.

(Fed deficit would be $400 Billion if Soc Sec not counted)
__________________

So instead, the Fed's next move could very well be to further liquefy the banking system. This is delicate stuff, because the financial markets here and abroad could be bothered if Greenspan looks as if he is not even paying lip service to inflation.

And with the Fed's pool of money already growing at a strong 8 percent a year, letting the presses at the mint run overtime is a problem.

The Fed repurchases government securities all the time as part of its regular operations. What the pros will be looking for are repurchases over and above those needed to keep interest rates where the Fed wants them.
_________________
Rollin Rollin Rollin , keep them presses Rollin




Black Blade
Can the US Economy avoid a Japanese-style Stagnation?
http://www.smithers.co.uk/newsdyn.php?pgtype=news&pgnm=article&pgmime=&pgndx=18
Snippit:

Wall Street today looks like the Kabutocho ten years ago. Fears are therefore rife that the US economy might follow a similar path over the next ten years to that experienced by Japan since 1990. If America were to experience similar economic problems the consequences for the world would be even more serious for two reasons. The first is that the US economy is twice the size of Japan, the other was that Japan's problems, bad as they were, were mitigated by the US boom of the 1990s. There is, however, no sign that either Japan or Europe is ready to take over as the engine of the world's growth.

The Federal Reserve acknowledges the similarities and has issued a paper designed to allay the fears. The publication shows that the Fed is aware of the risks run by post-bubble economies. But this raises an immediate concern. If the Fed recognises the risks, why did it not seek to forestall them before they became so serious?

It follows that the falling interest rates may have been powerless to support the economy. Both US experience in the 1930s and Japan's in the 1990s shows that this is not without well known precedents. The US also suffers, like Japan, from excess debt. Borrowing ballooned during the bubble and was both a necessary condition of the stock market's madness and a damaging consequence. The need now is to reduce the debt overhang, which is all the worse for being so often hidden "off balance sheet". Reducing interest rates does not reduce debt, it only postpones the problem by making debt payments easier to bear. But this only works, as Japan's experience shows, while interest rates remain low in real as well as nominal terms.

Once a debt explosion has been allowed to occur, it is extremely difficult to unwind without damage to the economy. In the US today there is a major short term risk of deflation and, in the medium term, there is a major risk that the steps needed either to prevent recession, or to recover from it, will set off a renewed bout of inflation. Americans are much poorer than they were two years ago. If they continue their recent trend to spend less and save more, then a further tax cut will probably be needed to prevent another recession. In theory, this would not be required if there were an investment boom, or a sharp improvement in US foreign trade. While the latter is likely in due course, in response to the fall in the dollar, it is unlikely to happen quickly while the rest of the world is quiescent rather than booming. Investment is more likely to fall than rise and thus aggravate rather than alleviate the problem of weak demand caused by a rise in savings.


Black Blade: A very interesting article. It covers some valid points worth considering. I however, I think that we in the west are beyond the point of no return. There appears to be very little political will or much else that can be done to stave off the deepening economic problems.

Blackjack
Spending Slowing, Inflation rising in UK = stagflation
http://news.bbc.co.uk/2/hi/business/2209292.stmSpending in the UK's shops has grown at its slowest rate for 18 months.

Sales had been expected to make more of a recovery in July.

We expect to see the slowdown continuing

George Buckley, Deutsche Bank But figures from the Office for National Statistics (ONS) showed that retail sales were 0.3% higher in July than in June.

They were 4.5% higher than they were a year before.

That rate of increase is the slowest since January 2001, when sales increased by 3.9%.

And the three-monthly figures grew at their slowest rate for two years.

The data will add to fears that the UK High Street boom, credited with saving the economy from the worst effects of last year's economic downturn, could be reaching an end.

If true, the effects of the slowdown would be felt throughout the economy.

Strong property market

George Buckley at Deutsche Bank said: "This does indicate to us that the slowdown in consumer spending is genuine.

"This is not just due to holiday effects which would have depressed June numbers, not July.

"We expect to see the slowdown continuing," he added.

Jeremy Batstone at NatWest Stockbrokers said: "Certainly, if consumer spending does begin to drop, then the authorities will have to take note."

He said spending had been buoyed to some extent by the strong property market.
______________
Inflation also ticked up a bit. I trust UK reporting more than US.
German economy growing? Yeah Right. More like drowning.
Flood damage will increase Guv spending, inflationary.
US employment numbers will be revised again, you watch.
We aren't getting the real stats. Who the hell is buying the
market? It looks like someone is trying to suck the poor investor
in so they can be completely fleeced. I bet the stops are tight.
Black Blade
Group wants options treated as expenses
http://www.boston.com/dailyglobe2/234/business/Group_wants_options_treated_as_expenses+.shtml
Snippit:

he trade group that represents the US mutual fund industry yesterday weighed in on the stock-option expense debate, urging the nation's accounting standards board to require options to be treated as expenses.


Black Blade: They join Warren Buffett, Alan Greenspan, and many others.

Black Blade
J.P. Morgan Chase Credit Rating May Be Cut by Moody's
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWQQSBSbSi5QLiBN

Snippit:

New York, Aug. 21 (Bloomberg) -- J.P. Morgan Chase & Co. may have its credit rating cut by Moody's Investors Service, which cited problems merging lending and underwriting businesses two years after the $32 billion combination that built the second-largest U.S. bank. The review of the bank's Aa3 unsecured rating affects about $42.4 billion of debt, and is prompted by concerns related to the bank's transactions with Enron Corp., rising loan losses and waning investment banking revenue, the ratings company said.

Moody's said it may downgrade J.P. Morgan a week after Standard & Poor's Corp. took a similar action. A stock market slump has made it difficult for the bank to integrate after the December 2000 merger of Chase Manhattan Corp. and J.P. Morgan & Co., Moody's said. The world's biggest arranger of syndicated loans also faces probes related to financing Enron, and losses have piled up because of bad loans in the telecommunications industry and Latin America.

``Whenever there's a corporate name in the news in a negative light, they seem to be involved,'' said Bob Truesdell, who holds J.P. Morgan bonds among the $4 billion of fixed-income assets he helps manage at M&T Capital Advisors Group. ``The concern that Moody's and S&P are showing is probably fair.''


Black Blade: Interesting.

Blackjack
US will delay attack on Iraq at its Peril
http://www.atimes.com/atimes/Middle_East/DH23Ak01.htmlEver since the US-led attack on Afghanistan, the Arab world has become increasingly concerned about US plans in the region. These fears were further fueled by Washington lumping Iran and Iraq into a so-called axis of evil, along with North Korea, and the view is now that Washington will attempt to install a pro-American government in Iraq and establish a strong base in the country from which a new order in the Middle East will be established to ensure the implementation of the American vision of peace.

To counter this, backroom maneuvering has intensified to try to draw together those opposed to the US into an effective grouping. It is envisaged that once this social contract is cemented, a clear divide would emerge between the Arab world and the US. And unlike the initially muted response to the attacks on Afghanistan, the US and expect a far more vociferous, and even physical, reply to moves against Iraq, especially the longer it delays.
___________
Arab world turning against US, especially Saudi. Iran selling
missiles to other arab countries its rumored. Iran has tested
medium range missile.
a nation of one
Operative (8/22/02; 12:58:11MT - usagold.com msg#: 83513)
I believe you are right.
USAGOLD
Deutsche chief economist not for gold investment
http://asia.news.yahoo.com/020822/reuters/nt58378.htmlHONG KONG, Aug 22 (Reuters) - Deutsche Bank chief economist Nobert Walter said on Thursday he would not recommend investing in gold . . . .

Comment: Yea, I wouldn't recommend gold either if I was short a couple hundred tonnes. . . . . "Herr Welteke," says Nobert Walter, "Where are you? Why can't you get this done for us?" If this modus operandi has the ring of familiarity, it's because the British Exchequer's Gordon Brown and the British bullion banks were exhitbiting precisely the same insecurities just before the British auction sales were announced. Do you remember? First Brown wanted the continental central banks to sell -- even went on tour to try to get it done. Then he started putting pressure on the IMF to sell its gold -- pressures rebuffed by the U.S. Congress. Desperation set in. The Bank of England made mention of a visit to the edge of the abyss -- a peering into it's nether depths. Then the announcement came. . . . .The British would sell most of the rest of their reserves. Is the behavior of Welteke in recent months and Walter any different??

Alas for the German Gold Bears, there is a BIG DIFFERENCE, i.e., the Washington Agreement has capped the amount of gold that can come out of the central banks annually. Though Mr. Walter doesn't like the idea of investors buying gold, perhaps he has a different attitude about Deutschbank getting their hands on some gold. After all, what the investors leave on the table, and what can't be extorted from the mining companies and smaller central banks, the bullion banks have to get out of the market itself -- not an easy task. And you can be sure that behind the scenes, Deutsche will have no qualms about securing it. Even if its from there own central bank. . . . . .Now what is interesting about this whole scenario is that probably it is not even Deutsche's fault that they find themselves in this pickle. It is possible that this all dates back to the Banker's Trust merger. They wanted a retail presence in the United States. What they got instead was a big gold carry trade book. . . . . . . . .And now you know the rest of the story.

The Abyss Revisited. And maybe that's why gold is having problems at the $325 level.
steady
state budgit deficits
california has a 24 billion deficit and is thinking of raising cigartete taxes 3 bucks to help raise money.
texas defict was announced at 6 billion tues revised to 7 billion on wed and today firther revised to 8 billion.
got gold?
sector
The Illogical Iraqi War...or IS IT?
The Best Fit TheoryWe are all perplexed at the Administration's Iraqi War footing.

Rumsfeld has said this week "We should be prepared for 100,000 to 200,000 casualties her at home from a terror attack". The president is rapidly re-stocking the Strategic Petroleum Reserve to maximum levels. C. Rice is way out front in the media demonizing Saddam while the President plays coy in Waco at a military pow-wow. Thousands of US soldiers reported in Jordan with dozens of cargo jets on a newly minted airbase tarmac in Quatar photographed by satellite in June.

The reasons not to invade a sovereign nation fill a not-so-small book on military tactics. In this case, Saddam no doubt will try and recreate Mogadishu in 1993 replete with shot down helos and trapped street fights. US precision guided weapons would be useless.

Perhaps Peter Arnet can be summoned from "Retirement" to broadcast CNN live from downtown Bagdad during the obligatory months-long artillery siege. Can you see it now?

"There's another children's hospital blown up by Bush's poison gas laden artillery shells"...This is Peter Arnet reporting...LIVE!

Of course the President knows all this. Rumsfeld [Nobody's fool] wouldn't let his boss get too far off course.

If oil to sooth a wrecked US economy was the only reason to do Iraq then why are we spending money to restock the SPR and running the price pf oil up to $30? Doesn't fit. We can simply drop a few brigades in the south and start pumping away while the Bagdad fight roils.

The Saudi plumb doesn't fit for the same reason. Sure they have gold but that stuff is years, if not decades away from real production. Only 1 in ten gold resources ever make it to mine status anyway.

The idea that this is a war to pull a Clinton "Change the subject off a lousy economy" move doesn't fit with the frenetic pace for war preparations. These guys seem to be on full throttle for some kind of launch in the fall. Why launch a war before the election? Nor does the reason that they need a gold capitulation excuse. The subject just can't be brought up even behind closed Administration doors.

There is only one reason so far to explain the Administration's apparently illogical Iraqi War plans:

The President already HAS tangible evidence of a September 11, 2002 terrorist WMD attack on the US and is pre-positioning retaliatory forces. He can't warn the population of the effected city. He has cried wolf too many times. Besides a warning would delay what he really wants...a clear provacation from Iraq and Saudi Arabia.

So Mr. Rumsfeld, in his own way, is telling the US to prepare for what he already knows will happen.
R Powell
Some thoughts on silver
Here's some thoughts on silver from another forum.
Rich


Netking, you beat me to it and with a nice looking chart for added color.
It's just the one year rate and may just be market noise but then again, maybe not. It has been noticed at Usagold and G-E but there's no other news. The last run up in rates was rumored to have been alleviated by a 12 million ounce delivery to the London market to ease the shortage. This unconfirmed report was the only info I ever saw from that January lease rate spike.
Ted may rant and rave about the huge naked short positions but until someone big takes a liking to buying or industrial use (demand) can no longer find delivery off Comex, this paper game will probably continue. I don't believe many, if any, of these Comex commercials or funds have strong opinions based on any fundamental supply/demand information. The final signing for passage of government silver buying, without any positive market effect, has further convinced me of this. I just don't think that photographic or industrial needs are purchased through Comex or any other price fixing exchanges. The users buy direct from sellers who are mostly by-product producers selling whatever they have at-the-market price. This income is then used to lower the unit production price of copper or whatever their main product is.
As hard as it may seem to believe, and perhaps because there has been 5000 years of accumulation to exhaust, no one thinks, supposes or will consider that the supply of silver can or will ever run out! There just aren't that many of us and Lord knows we haven't the resourses to move the market. Unless we are wrong and there is unknown silver in huge amounts somewhere, the realisation that there is no more will be spectacular. I'm constantly torn between the suspicion that something has been overlooked and what an outrageous anomaly the fundamental facts versus the POS presents. Either we're wrong (and I don't think so) or the price of silver may very well one day (as Ski suggests) be listed as higher than gold.
I'm a relative newcomer (about six years of obsession) to silver watching but I'm ready for some excitement. Remember, Buffett managed to buy 89 million ounces over about a six month time period before a lawsuit against Philbro brokerage forced him to disclose his buying. Before that no one knew he was even there! No one really knows what's going on with silver. The silly fools may very well use it all before the price goes up. Then we'll see some short covering that will cause dancing in the streets! It will still be a paper game but I, for one, will be very happy to settle for whatever fiat is currently in fashion. Truckloads of it, if necessary.
We'll watch the rates closely!
steady
historical reading anyone? John Locke, Consequences of the Lowering of Interest, and Raising the Value of Money (1691);
http://socserv2.socsci.mcmaster.ca/~econ/ugcm/3ll3/locke/consid.txtSir,
These Notions, concerning Coinage, having for the main, as you
know, been put into Writing above Twelve Months since; as those
other concerning Interest, a great deal above to many Years: I
put them now again into your Hands with a Liberty (since you will
have it so) to communicate them further, as you please. If, upon
a Review, you continue your favourable Opinion of them, and
nothing less than Publishing will satisfie you, I must desire you
to remember, That you must be answerable to the World for the
Stile; which is such as a man writes carelesly to his Friend,
when he seeks Truth, not Ornament; and studies only to be right,
and to be understood. I have since you saw them last Year, met
with some new Objections in Print, which I have endeavoured to
remove; and particularly, I have taken into Consideration a
Printed Sheet, entituled, Remarks upon a Paper given in to the
Lords, &c. Because one may naturally suppose, That he that was so
much a Patron of that Cause would omit nothing that could be said
in favour of it. To this I must here add, That I am just now told
from Holland, That the States, finding themselves abused by
Coining a vast quatity of their base [Schillings] Money, made of
their own Ducatoons, and other finer Silver, melted down; have
put a stop to the Minting of any but fine Silver Coin, till they
should settle their Mint upon a new Foot.


book mark it for the long cold winter night ahead of us...
and many other of locks works here..........
http://www.cpm.ehime-u.ac.jp/AkamacHomePage/Akamac_E-text_Links/Locke.html
Golden Bear
Now for a little humour....
Dubya just declared that laws should be changed to allow the logging industry to thin out the forests, so as to protect americans from devastating bushfires, of course.

It's the forest's fault, they're too thick...

Bush calling the forest thick.... could not stop laughing when I heard that one.

Is anyone expecting this clown to get America out of its death spiral? Really???

Sorry everyone, with all the gloomy news around, I felt compelled to post....

Cheers.
JCTex
Golden Bear (08/22/02; 21:41:29MT - usagold.com msg#: 83544)
Gee whiz, I guess we would be soooo much better off with the mental giant from Tennessee, or maybe QueenHillary would be better. Gee whiz, I may puke all over my keyboard.
Black Blade
Natural Gas Surges as Report Shows Slowing U.S. Supply Growth
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Energy%20News&s1=blk&tp=ad_topright_energy&refer=topsum&T=markets_bfgcgi_content99.ht&s2=ad_right1_all&bt=ad_position1_energy&tag=energy∣dle=ad_frame2_energy&s=APWT.9RXeTmF0dXJh
Snippit:

New York, Aug. 22 (Bloomberg) -- Natural-gas futures jumped 6 percent after the U.S. Energy Department reported a slowdown in growth of inventories, signaling increased use of the fuel to produce electricity as heat stokes air-conditioner use. U.S. supplies of gas in underground storage rose by 37 billion cubic feet, or 1.4 percent, to 2.657 trillion cubic feet last week, the department said. The supply increase was the second- smallest since April. Analysts polled by Bloomberg expected a gain of 44 billion cubic feet.

High temperatures and humidity across much of the U.S. this month have prompted utilities to buy more gas to produce electricity to run air conditioners, analysts said. That demand also helped limit the amount of gas put into storage. Natural gas is used to produce about 17 percent of the nation's electricity, government figures show. Inventories soared to 3.254 trillion cubic feet on Nov. 30, the highest level in eight years of record-keeping, government figures showed. A recession reduced industrial demand for the fuel.


Black Blade: As I have pointed out before, the injection rates of NG to storage as falling fast as drilling and exploration have fallen off. This could lead to fast depleting inventory due to lack of production in spite of current large storage supply. If this winter is a normally cold one supply will fast faster as production declines going into the winter months. Any economic recovery could be quashed with rising energy costs. We should keep our eyes on the rising energy costs as the financial media, analysts and strategists tout the "economic recovery" story.

JCTex
Black Blade (08/22/02; 19:27:31MT - usagold.com msg#: 83533)
You are right. Doesn't look like there is much they can do with anything. Way too much damage done from year's past. My guess is that they will print the green stuff until the press burns up.

Smartest money is sitting on a pile of gold in Colorado, fishing everyday, and observing the surroundings.

If you see a bald-headed old coot dragging a little-bitty, but heavy sack up the road, give him a drink of water and a biscuit would you?

Black Blade
Ongoing supply concerns pressure oil prices
http://www.chron.com/cs/CDA/story.hts/business/energy/1544182

Snippit:

NEW YORK -- Crude oil and products rallied Wednesday on continuing supply concerns despite a surprise build in U.S. petroleum reserves. Wednesday's gains were fueled by continuing war fears and positive technicals, with the major moving averages set at "buy," thanks to the rally of the last two weeks, according to Mike Fitzpatrick, an analyst at Fimat USA.


Black Blade: Oil is the lifeblood of the economy (domestic and global). If oil supply becomes an issue, the US will likely whatever means necessary to obtain it.

Black Blade
Re: JCTex

No problem. I tend to give a helping hand whenever I can. I have an old neighbor (Korean vet) that I and a friend keep an eye on. We make sure that he eats properly and get him to his VA hospital visits. It's the least that we can do. Cheers!

- Black Blade
Golden Bear
JCTex (msg#: 83545)
Hey JCTex,

don't get all partisan on me now... being from downunder, I don't have any party affiliations to your two main parties; they're as bad as each other..

The thought of either of those criminals you mentioned becoming president makes me ill also...

Things are no better down here, both main parties are filled with idiots...

Now if only the average Joe Six Pack could awaken, and vote for someone like Ron Paul, I would have a little more faith in politics.

Cheers.
RobotGuy
Old JCTex,.. gotta love ya brother!
Been awhile since I've posted, but It's good so see some personalities don't change!

It's been a fairly melodramatic few weeks for me as I am still looking for a reasonable source of full time employment.

I see the markets have been just as exciting as my life lately. Old DOW faking another comeback for the lemmings I see.

Just for the record JCTex,.. I still believe Hillary would have been a more entertaining choice!!

All in good fun!

Cheers all!

RobotGuy.
Horatio
S.Africa
Is a 5 % dividend a good reason to buy Anglo? It seems to me for S. Africa mines that traditionally have high costs ,not low as some would have us believe is a better investment than American and Canadian mines.The only way they became profitable was to devalue the Rand ,that is indisputable. The high return is just a symptom of the high risk involved ,just as a high interest rate on a bond is indicative of high risk.
The other risk is political ,just look at Zimbabwe and thier Racist Dictator. Don?t expect U.S Liberals to Champion the cause of anti Racist factions in this case. The government kicked out the White farmers just because they were white without a peep from the U.S..They used to export food ,now they will face Famine very shortly. The Zimbabwe government causes the Famine and what does the U.S. government do ?Why we send them food of coarse!.
I contend you can?t ignore the risk to S.Africa with this going on next door ,Famine has a way of becoming everybodys problem.
I?m not trying to rain on anybodys parade about S.Africa ,but before I risk my hard earned money I tend to look at both sides like a jury trial. Make the case for ,then make the case against ,then like a juror try to determine the truth. IMHO
Belgian
Morning
As a Deutsche Bank client, all my (insistent and repetitive) questions on their possible Gold situation, remain simply unanswered. Not even a blablablah formality as to get rid of an annoying customer. Significant or not ?
DB has running a confetti collection program, where savers are offered much higher interest rates for a period of six months. Sort of an emergency recapitalization (?) to add to reserves (solvability) ?
The consensus that the $/� exchange rate will consolidate around parity, might be the result of US/Euroland, temporary agreements on POG ? A drama at Deutshe Bank, because of Gold, would be very, very unwellcome, economically/financially and political (coming-elections) !

Available Gold getting scarce, very scarce indeed.

@ Sector : Am afraid Sir, I have to agree with your frightening and dramatic picture of another "terror-accident". It just doesn't make sense to increase (artificially) tensions, when we are in such an unfortunate economic environment. Rational irrationality !? Perfectly acted upon by US-media. All news events (?), need to be de-coded as to understand their real meaning. Far from being a "detente". A silent "positionning" before the storm.

But who cares when being able to capture another loan for house, car, holliday or whatever. Bread and games ! Keep on refinancing ! Inflate all the unburstable bubbles !
Blackjack
New Gold Fund in India
http://in.biz.yahoo.com/020822/77/1u5f6.htmlBanks are waiting for a formal nod from the Reserve Bank of India (RBI) to participate in an unique gold scheme to be launched by Benchmark Asset Management Company, reports The Times of India. Though the fund filed an offer document three months ago, the scheme is still not launched because it proposes to invest in gold receipts issued by bullion banks. Banks are wary of entering into a transaction with a fund house without proper clearances from the regulator.

Benchmark filed an offer document with the Securities and Exchange Board of India to launch a fund which would be denominated in gold where its net asset value will be always equal to one gram of gold. The fund has also asked for a nod from the RBI. The investments will be made in deposit papers issued by RBI-permitted bullion banks, whereby even the investments are directly related to actual gold prices.
_______________
More interest in PM developing
Blackjack
Debt and more Debt
ISLAMABAD (Reuters) - The United States signed a deal in Islamabad on Friday for the consolidation and restructuring of $3 billion in debt owed by military-ruled Pakistan, a key ally in its war against terror.

The debt agreement came two days after Pakistani leader General Pervez Musharraf made constitutional changes that critics said threatened the south Asian nation's return to democratic rule. President Bush on Thursday praised Musharraf as a stalwart ally in the war on terrorism.

The debt covered in the deal is the U.S. portion of $12.5 billion of bilateral debt the Paris Club group of donors agreed to reschedule last November after Pakistan abandoned its support for the former Taliban regime in neighboring Afghanistan.

The agreement was signed by U.S. Ambassador to Pakistan Nancy Powell and Pakistan's Finance Ministry.

It covers debt outstanding as of the end of November last year, arrears and accrued interest. The debt includes loans from USAID, the U.S. Eximbank and for agriculture and defense, a statement issued to reporters at the signing ceremony said.

In addition, it said, Pakistan would work closely with the U.S. administration to secure cancellation of $1 billion of U.S. debt under a commitment made by Bush to Musharraf in February.
___________________

ISTANBUL (Reuters) - Turkey will need continued support from the International Monetary Fund for the coming two or three years, former economy minister Kemal Dervis said late on Thursday.

Dervis was the architect of a three-year $16 billion loan deal signed with the fund in February 2002. He resigned from office earlier this month to pursue a political career and was expected to formally join a center-left party on Friday.

"Turkey needs IMF support for two or three years more," Dervis said in a television interview late on Thursday. It was not clear whether he was referring to the existing loan package or to a need for new lending.

Analysts say Turkey will probably need loans of some sort next year but a general election on November 3, the possibility of a war in neighboring Iraq and volatile domestic interest rates make it hard to say how much it will need and from where.

Dervis, who came to Turkey from the World Bank last year as an independent, has tied his electoral fortunes to the Republican People's Party, offering it as the standard-bearer for secular Turks who want to keep the IMF deal on the rails.

Dervis did not rule out a post-election coalition with the Justice and Development Party (AKP), a powerful conservative group suspected by some in the military of Islamist leanings.

The economist, however, stressed that Turkey's debt load and economic problems were so heavy that the only successful coalition would be one that shared the same "world view."

"Unless there is harmony in the government, I cannot take on responsibility for the economy," he said.

Financial markets would like to see Dervis return to the economy ministry. His prestige is seen as essential to good relations with international lenders and to bringing down the cost of running a domestic debt load of around $80 billion.
______________
Running the world is expensive
Saxulum^
@ Belgian
goede morgen beste buur,

I've noticed the same arrogance at DB.
Kind of like "The customer should be very greatfull that we allow him to talk to us" attitude...
There are however other places where I've experienced a complete opposite, service minded cooperation.

(Ik bespreek ze liever niet op deze plaats, maar aangezien we volgens mij volledig op een golflengte zitten, lijkt het me zinvol om eens direct contact te leggen. Ik stuur MK een berichtje dat hij wat mij betreft onze emails kan uitwisselen. Dan hoor ik wel of je daar ook voor voelt.)

Sorry for the Babylonic bla-bla
but a golden cheers anyway
Black Blade
Re: Blackjack � Gold Banking Schemes


Not long ago India attempted to float another scheme through the banks where people would deposit their gold and take receipts in exchange. It failed miserably as people in this part of the world are not very trusting of banks (and for good reason). I think that this scheme has been all but abandoned due to lack of interest. I don't know all the gory details about this scheme, however, this new scheme appears to be yet another variation on the same theme. It may float with the banks and institutions, but it would be very difficult to get the average person in India or elsewhere in Asia to participate.

I have worked and lived in that part of the world and the average to lower socio-economic classes still prefer gold over all else. I recall several occasions when in remote jungle regions in Myanmar (formerly Burma), Laos, and Thailand where people with little contact with the central government (let alone with the outside world) who would work all day under grueling conditions to mine a rice grain sized particle of gold. I have visited and lived with these people and after some trust is gained they would proudly show me their wealth in a few grams of gold. I would flash some local currency to see their reaction and they would laugh or in some more remote areas would even wonder what it was. They had little concept of currency, but they sure knew what gold was. These are wonderful people, but it would be a shame for a government or banking institution to take advantage of these people. I think that such schemes will be a tough sell even in India. Cheers!

- Black Blade
DOWNUNDER
@SAXULUM - - - CAN U ENGLISH SPAKUM ?
Just kidding -kind off - - - :)
Black Blade
HP staff face new 'Friday List' of job cuts
http://biz.yahoo.com/ft/020823/1028185977895_1.html

Snippit:

Staff at Hewlett-Packard are braced for another deep round of job cuts today as the US computer company takes its latest steps to meet promised cost reductions amid weakening demand across a wide range of technology products. Steve Milunovich, technology strategist at Merrill Lynch, said: "They need to [meet promised cost reductions] because the revenue side does not look good." The company refused to confirm today's expected job cuts. The latest redundancies at HP since the merger with Compaq - dubbed "the Friday List" by staff - are part of a division-by-division exercise to trim the headcount. HP said at the time of the deal's completion in the spring that it planned to cut 10,000 jobs by the end of its fiscal year in October, with another 5,000 earmarked for the following year. With no improvement since then in the outlook for the technology sector in general, Wall Street is now looking for HP to report considerable headway on this front when it reports earnings next week.


Black Blade: Looks like the "Bone Pile" is due for more growth. Several tech, telecom, and energy sector companies have announced and are preparing to announce additional job cuts. The "economic recovery" story is losing credibility.

Black Blade
Breaking News - Saudi Vows To Keep Oil Flowing

A Saudi official just announced that they will keep oil flowing and even increase production if the US goes to war with Iraq. This will pressure oil prices today and may give support to equities (though not the energy sector).

In other news, the government is moving to freeze assets of Enron executives before they can be liquidated and moved. Other assets of other executives in companies under investigation are also expected to be frozen. Meanwhile the SEC is expanding a probe of Citigroup. There are renewed calls for former Treasury Secretary Robert Rubin (now CEO of Citigroup) to testify before Congress under protest by committee chairman Sen. Joe Lieberman (D-CT).

A lot of interesting news this morning.

- Black Blade
Black Blade
(No Subject)
http://biz.yahoo.com/rb/020823/enron_fastow_report_2.htmlUS Seeks Freeze on Ex-Enron CFO Accounts

Snippit:

NEW YORK (Reuters) - Federal prosecutors investigating collapsed energy firm Enron Corp. (Other OTC:ENRNQ.PK) were meeting a judge late on Thursday in a bid to freeze the bank accounts of its former Chief Financial Officer Andrew Fastow, the Wall Street Journal reported on Friday. It wasn't clear whether the judge had approved the freezing of the accounts of Fastow and his family members, the Journal reported, citing unnamed sources.

Black Blade: You would think that they would at least wait until construction on his Florida mansion was completed.

BTW, I see that a protest in Oregon got out of hand as protestors went on a rampage and battled police. Police used water cannons, pepper spray and batons, while protestors threw various objects and threw punches. In Minneapolis another protest erupted after police shot a 10-year-old boy in another drug bust gone bad. Rioters torched a news van and battled police. Just imagine how bad things can get when the economy collapses. This may be a preview of things to come as these events demonstrate as well as from what we witnessed during the recent riots in Argentina and Uruguay. These "interesting times" are probably going to get even more "interesting".
Black Blade
Saudi, OPEC To Fill Any Iraqi War Oil Gap - Saudi Source
http://biz.yahoo.com/djus/020823/0553000217_1.html

LONDON -(Dow Jones)- Saudi Arabia and the Organization of Petroleum Exporting Countries will cover any shortfall in oil supplies that could follow a U.S. military action against Iraq, a Saudi oil source said Friday. "Using oil as a weapon does not accomplish anything," the source told Dow Jones Newswires. "Having moderate oil prices (around $25 a barrel), this is also in the Saudi interest."


Black Blade: Just a brief statement with no details yet. So far NY crude is off 26 cents. Apparently the Saudis are counting on a US-Iraq conflict if one were to read between the lines.

Black Blade
"Scandal Of The Day" - Former Citigroup CEO Sandy Wyell Next For The "Perp Walk"?

Breaking News - The former CEO of Citigroup may be the next high profile CEO to be arrested. The SEC probe has indicated that he had pressured analyst Jack Grubman (who recently "resigned") to give glowing reviews of telecom stocks. Citigroup had banking business and other business relationships with these companies. It is rumored that Grubman may "flip" and give testimony in exchange for immunity from prosecution. Citigroup (C) shares are taking a big hit this morning. This will also likely increase pressure on Congress to subpoena former Treasury Secretary and now Citigroup CEO Robert Rubin to testify. It also rumored that Rubin may have to answer for meddling in the Enron probe as well. This is yet another "BIG" developing scandal that could rip through Wall Street this morning. "Interesting Times"

- Black Blade
Belgian
Hoi Saxulum
No objection for e-mail-adress exchanges, neighbour Dutchman. But am leaving today for holidays without net-connection (on purpose). Drop your message(s) in my box.
Black Blade
Correction - Weill Probe

Sandy Weill is under investigation by the New York AG. This will likely expand the SEC and Congressional probes into Citigroup. This should be today's "big" story.

- Black Blade
Black Blade
New York Attorney General's Office Broadens Inquiry Into Salomon
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20020823/bs_dowjones/200208230401000143
Snippit:

The New York state attorney general's office, broadening its inquiry into research practices at Salomon Smith Barney, is examining how the Citigroup Inc. (NYSE: C) unit won a lucrative financing assignment from AT&T Corp. and what role Citigroup Chief Executive Sanford Weill may have played, people familiar with the matter told The Wall Street Journal. The assignment was controversial from the start. Salomon Smith Barney was selected as a lead underwriter only after Salomon telecom analyst Jack Grubman upgraded his rating on AT&T to a "buy." For years, Mr. Grubman had been bearish on AT&T stock, and Salomon often had been excluded from top spots in underwriting AT&T transactions. And, as reported in The Wall Street Journal at the time, the change by Mr. Grubman came after Mr. Weill, an AT&T board member, nudged the analyst to give AT&T a fresh hearing, people familiar with the deal said. AT&T Chairman C. Michael Armstrong regularly had asked Mr. Weill to urge Mr. Grubman to revisit the merits of AT&T's cable strategy, a person familiar with the matter says. Mr. Armstrong also was a Citigroup board member at the time.


Black Blade: The scandals on Wall Street are still coming to light. Investors had hoped that these scandals had run the course by now, however, these scandals now appear to be only the tip of the iceberg as the financial sector is the next target for criminal investigators. We should see more scandals come to light as the under staffed investigating agencies expand their probes.

Golden Bear
Enron's Kopper
Just got this via email newsletter...Ratto Uno
=========
In the war against corporate scoundrels, the good guys cornered their first and all-important rat - Ratto Uno - this week.

Ratto Uno means everything. In situations like Enron, Global Crossing, Adelphia, Tyco, and WorldCom, the crooks band together, 5th their way through the investigations, and become a wall no one can penetrate.

- - - - -

It is nearly twenty years since US authorities received that weird dyslexic letter from South America which accused two US brokers of insider trading. When the authorities followed the trail to a Swiss bank in the Bahamas, they accidentally stumbled upon Dennis Levine.

Once the good guys had Levine, they had Ivan Boesky; once they had Boesky, they had the King himself - Michael Milken.

Dennis Levine was Ratto Uno in the junk bond insider trading scandal. It's difficult to prove insider trading; the good guys amass all the materials they can, but these are often not enough.

To get a break a case like this, the good guys need Ratto Uno. Dennis Levine was Ratto Uno for the junk bond unraveling; Michael Kopper is Ratto Uno for the Enron one.

- - - - -

Kopper was chief lieutenant to Enron's CFO Andrew Fastow. Kopper pleaded to two counts, agreed to repay some $12 million, and agreed to rat on his boss Fastow.

The idea is to now pressure Fastow in the same way - to make him the next rat. And so forth and so on.

- - - - -

Kopper's testimony is already shedding new light on what really went on at Enron. While the motive for Enron's complex partnerships was assumed to have been to hide the company's debt, keep salaries high, and make its stock more valuable, Kopper now suggests whole deals were explicitly structured to allow the Enron execs to skim money.

Suspicions are growing that this iceberg is a game of 'chicken' - capitalise on an inflated market and dump at the very last minute.

Kopper has admitted to having created partnerships designed to enrich himself, his former boss Andrew S. Fastow, and others at Enron at the expense of the company and its shareholders.

He admitted to three partnership schemes designed to look like legitimate business deals. He said friends, selected Enron workers, and members of Fastow's family stepped up as investors, and, using loans from Fastow or Kopper, put up money to make the partnerships appear independent of Enron.

The partnerships then made deals with Enron that generated millions of dollars. Kopper kept some profits and generated massive fees for handling the deals. He also funneled money back to Fastow, Fastow's family, as well as the investors.

- - - - -

Sherron Watkins, an Enron executive who also worked for Fastow, warned Ken Lay about accounting problems. She also asked for, and was granted, a reassignment to another department, fearful that a vengeful Fastow would try to have her fired.

Her memo to Lay was released by Congress in January. It centred on entities other than the three partnerships on which prosecutors are now focusing.

- - - - -

Kopper was selected to run the schemes because he was not a senior officer like Fastow, and therefore not required to disclose his role in a proxy statement. However, it violated Enron's Code of Conduct because it was not approved by then-chief executive Kenneth Lay.

=======================================================

GB: The scandals continue unabated...
Blackjack
Re: Black Blade Gold Banking Schemes
Sounds like you've traveled quite a bit. Come to think
of it, I lived for a few years in Ghana. In colonial days
as a British Colony it was called the Gold Coast.
In fact I have some ashanti gold weights used in old
days to weigh Gold. The weights are in the shape of
tribal symbols. I should take them out and rub them
for luck LOL.



Blackjack
Germany plans to raise corporate taxes!
Rome, Aug. 23 (Bloomberg) -- Italy wants European finance ministers to exclude some infrastructure spending from annual budget calculations so they can spend more money to boost growth, said Vito Tanzi, a deputy finance minister.

``Tremonti has been trying to get people to accept more flexibility,'' Tanzi said in a telephone interview. Italian Finance Minister Giulio Tremonti is holding informal talks with ministers and the European Commission on the issue, he said.

To protect the single currency, the dozen countries that adopted the euro agreed to limit their deficits to less than 3 percent of gross domestic product, and to bring their budgets ``close to'' balance by 2004. Italy, France and Spain pledged to cut taxes next year to stimulate the stagnating economy, jeopardizing the integrity of the budget agreement.

After floods devastated the country, Germany abandoned its plan to reduce taxes next year. Instead, Chancellor Gerhard Schroeder announced yesterday he plans to raise corporate taxes to fund reconstruction work.
________________
Schroeder hasn't got a clue. I thought Japan was the worst
managed first world country. Germany is in the hunt!
Raising taxes now will be a killer for corporate growth just
when its weakening. Truly an amazing decision. To fund more
government spending! (inflation)
Blackjack
Pak claims India attacked army post along the LOC
ISLAMABAD (AFX-ASIA) - Indian troops suffered heavy casualties after they launched a "totally unprovoked attack" overnight on a Pakistani army post along the Line of Control, the de-facto border in Kashmir, Pakistan's military spokesman Major General Rashid Qureshi said.

Speaking at a press conference here, Qureshi also alleged that the Indian Air Force carried out up to five raids after Indian troops tried to attack the Gultari post on the LoC.

However, India immediately denied that there was any flare-up or that it engaged its airforce.

"Beyond mortar and artillery fire no such incident has happened as being alleged ... (such as) the use of air power etc," defence ministry spokesman PK Bandhopadhay told Agence France Presse in New Delhi.

"Incidents of firing in certain areas of the LoC is a frequent thing and fairly common," the official said.

Sources from the Indian Air Force also denied the launch of war planes from any military bases towards Kashmir on combat assignment in the past 24 hours.

Qureshi said the Indian toll was "in excess of double figures," while Pakistani soldiers suffered no casualties.

The Indian air force was then brought in and carried out up to five bombing raids on the post, Qureshi said.

"Unable to make any headway the Indians in their frustration resorted to highly escalatory act by bombing the area using the Indian Air Force."

"The very act of using the Indian air force is highly a irresponsible and escalatory act," Qureshi said.
sector
Top US general attacks hawks' strategy on Iraq
Friday 23 August 2002 By David Rennie in Washington and Anton La Guardia, Diplomatic Editor
(Filed: 23/08/2002)

One of America's most senior generals has condemned as "foolish" plans backed by leading Washington hawks to topple Saddam Hussein by using special forces in a repetition of the tactics that succeeded in Afghanistan.

Gen James L Jones, the four-star commander of the Marine Corps who will be taking over as Nato's supreme allied commander, was clearly addressing high-ranking conservatives in and around the Pentagon.

Some have demanded a short, sharp attack on Iraq involving local opposition forces backed by American special forces using high-tech weapons and air strikes.

Gen Jones told the Washington Times that it would not be enough to copy the Afghanistan tactics. He hinted that America would have to build up big conventional forces if it wanted to be certain of success.

"Afghanistan was Afghanistan; Iraq is Iraq," he said, "It would be foolish, if you were ever committed to going into Iraq, to think that the principles that were successful in Afghanistan would necessarily be successful in Iraq. In my opinion, they would not." He made his comments as Britain, America's only likely active ally in military operations, again distanced itself from President Bush's commitment to "regime change" in Baghdad.

Jack Straw, the Foreign Secretary, made clear that Britain's first priority was the return of United Nations arms inspectors.

He dropped repeated hints that Saddam would not be attacked if he complied with UN demands, saying that "plainly the case for military action recedes" if Iraq admitted monitors and allowed them to work freely.

Gen Jones is the latest in a succession of prominent American military and political figures to issue warnings about the dangers of rushing headlong into war.

He predicted that defeating Iraqi troops would be "hard stuff", because they would be cornered in their homeland, with nowhere to run. Special operations troops could have "a great mission in Iraq", he said. But they should not be the only option.

"You better have Plan B in your hip pocket, because when you attack someone who has any kind of well-trained army on their homeland they are going to fight differently than if they engage you, say, in Kuwait.

"The defence of a homeland is hard stuff because they are not going anywhere." Hawkish civilians who favour the special forces approach argue that most of Saddam's forces will surrender in the face of American firepower, like the Taliban in Afghanistan.

The debate is as much ideological as strategic. High-profile conservative civilians, led by the defence secretary, Donald Rumsfeld, see it as their mission to wean the top brass from their love of huge armies and heavy weaponry.

Diplomatic limitations also play their part: any plan involving large numbers of conventional forces could run into the opposition of wary allies, from Turkey to friendly Arab nations such as Qatar and Bahrain, which would be needed as launchpads and assembly grounds for planes and supplies.

But senior generals - Vietnam veterans with a horror of risking American casualties - have proved far more cautious, pushing for an overwhelming force of hundreds of thousands of troops in an operation akin to the 1991 Gulf war.

The Pentagon's key figure on Iraq, Gen Tommy Franks, is reported to have come up with a compromise battle plan. This could involve some 80,000 troops, backed by high-tech weapons and air strikes.

Amid signs of growing misgivings in America, the White House has been at pains in recent days to indicate that final decisions on military action have not been taken. Deriding the media for "churning" in a frenzy over Iraq, the president described himself this week as "a patient man" and promised to consult allies and members of Congress before taking action.

Mr Straw said on Radio Four's Today programme that it was "jumping the gun" to talk of war in Iraq.

"If Saddam Hussein allows weapons inspectors back without conditions, without restriction on them, so they are able to do their job properly, then circumstances will change."

He insisted that America "would obviously much prefer this to be resolved in a peaceful manner".

But despite Foreign Office assurances that there is no split with Washington, Mr Straw's comments were at odds with America's public commitment to topple Saddam whether UN inspectors return or not.
++++++++++++++++++++++++++++++++++++

The Iraqi War seems militarily and geopolitically illogical on its face. Look for a hidden agenda.

The only one that seems to fit is that the US knows of a 9/11/2002 terrorist attack and is preparing retaliation.
Operative
Sneek A Peek, or A Behind The Scenes Look At the Next War In Iraq
http://www.memri.org/bin/latestnews.cgi?ID=IA10602It will be a differant war this time. This article gives a great look into what to expect. Those naysayers that have been speaking out are doing so to provide fluff or misintell for the uninformed. This writing provides valuable insight how the next war in Iraq will play out. (my humble opinion of course) Dont rush through the article, take time to let the concepts develop. Pay close attention to names, you will see more of the same soon. With just a little reading inbetween the lines you will have a very accurate idea on how the next objective is to be accomplished. Hint, we dont need the fall of Saddam or the capital city to win. Nice but we can wait on those two issues if need be. But his successor is already waiting in the wings. If Saddam wants to put up a fight, he needs to make his moves now.
Socrates964
Curioser and curioser...
Just gets weirder - gold stocks now appear to be diverging bullishly from POG. Someone is nibbling...

Evidently, the idea that gold stocks move inversely to the Dow/DJI presumes that you have a single pool of investors who are always overweight one asset class and underweight the other.

But, if in fact, you had one class of investor buying one class of share and another buying the other, then the inverse relationship would break down.

Gold stock volumes still very low, but I sense that the pendulum is now swinging back from fear to greed.

USAGOLD / Centennial Precious Metals, Inc.
Real gold, real easy. Delivered to your door.
http://www.usagold.com/ProductsPage.html

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Because you never know what tomorrow will bring.

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(800) 869-5115

Operative
Some Weekend Reading Material, Who Owns the Water?
http://www.thenation.com/doc.mhtml?i=20020902&s=barlowThis article ties in with my post concerning the gathering of resources. An off topic subject I confess, but I think it is important to understand the battle not only over gold, but other resources as well. Gold, a must have in your possession item, will only carry you so far.

I have a personal interest in watching the water issue since a friend of mine owns a very successful scuba diving business in the middle of florida. About 30 years ago he purchased a large spring (flow of millions of gallons per day) in the middle of nowhere. He spent a small fortune to clean up the land around, build some cabins, and advertise to the diving community to attract business. It is a an amazing place to camp, scuba dive, and enjoy a relaxing weekend. Several years ago the state of Florida decided they wanted the access to water. They offered him less than he had paid for the land to begin with. A polite no was his response. Since then, the state has been trying to take his land with no compensation. Example, a few months ago the state sent an environmental inspector to visit, found a battery that he had removed from a tractor a day earlier sitting on the ground. They wrote him up for improper disposal and a stiff fine. Florida will continue to do this until the state takes over the property. As a footnote, his property looks better than most state/federal parks that I have visited. Exceptionally clean, well kept, and very well maintained. His public restrooms/showers are one of a few that my wife will use. (She is a doctor, and yes, long road trips are a real pain. )

I beg your indulgence on this post, but if you must, flame away.
sector
Vanguard's Bogle Says Thousands of U.S. Stock Funds May Close
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWXD4xUuVmFuZ3VhBy Joel Dreyfuss and Ed Leefeldt


New York, Aug. 23 (Bloomberg) -- The loss is staggering: From March 2000 to July 2002, the value of the U.S. stock market plunged by $3.7 trillion.

The bear grip will squeeze out the excesses in the U.S. mutual fund industry, says John Bogle, founder of Vanguard Group, the second-largest U.S. mutual fund manager, with $570 billion in assets. After a 28-month, 41 percent plunge in the Standard & Poor 500 Index, the $6.6 trillion fund industry is poised for a shakeout that could claim half of its 4,800 equity funds, he says.
+++++++++++++++++++++++++++++

Does the word "Close" mean one gets what's left of his/her money back?

Or are the mutual fund "Closures" carrying "Fees" and "Slight Delays" before one can claim the remainder of their funds?
sector
Lucent Denies Report of 15,000 Job Cuts
http://news.moneycentral.msn.com/breaking/breakingnewsarticle.asp?feed=OBR&Date=20020823&ID=1879311August 23, 2002 11:51:00 AM ET


CHICAGO (Reuters) - Lucent Technologies Inc. (LU) is planning another round of job cuts that could reduce the telecommunications equipment maker's work force by as much as 15,000 jobs, or 33 percent below previous targets, a financial news Web site said on Friday, but Lucent denied the report.

The Murray Hill, New Jersey-based company's Chief Executive Patricia Russo is pushing another round of restructuring as it pushes to return to profits in a market where large telephone companies are still curtailing spending, TheStreet.com said, citing people close to the company.

Lucent is preparing to drop product lines and cut its total work force, eventually bringing employment to between 30,000 and 35,000 people, the Web site said.

Lucent spokeswoman Michelle Davidson denied the report.
++++++++++++++++++++++++++++++++++++++++++++

Nothing is confirmed until it is officially denied.

More "fue" to feed the recession.

The DOW should rocket up 200 points with news like this.
Operative
(No Subject)
@ Belgian, wishing you a relaxing and enjoyable holiday!
You have earned it. Already miss your postings so look forward to your return.

@ Black Blade, Hope you still have both legs after the Burma trip. Met a few Karen and found them to be a great people.
Seen a few mines over there myself in the boonies, but not the kind you dig for gold. You are a good man, buy that Korean vet a cold one and put on my tab. Take care, get some bug repellant (avon skin so soft lol) cause it looks like the Nile Virus is heading your direction.

@ sector, thanks for the fund story link. Printing out some copies to hand out to a few "got thier heads in the sand" friends.
sector
Koizumi sets stage for U-turn in bank policy
Does this mean we can put our money back in Japanese banks?...NOPE!
By David Ibison in Tokyo
Published: August 22 2002 18:36 | Last Updated: August 22 2002 21:23

The administration of Junichiro Koizumi, Japan's prime minister, on Thursday set the stage for one of the most significant policy U-turns in its 16-month rule by indicating that it may keep in place full government guarantees on ordinary bank accounts.

Full deposit guarantees were introduced in June 1996 to shore up confidence in the banks after a series of collapses. Their scheduled removal next April and replacement with a �10m ($83,500) cap was supposed to signal that the banks were strong enough to stand alone.

The Financial Services Agency, the main regulator, said on Thursday that the maintenance of full guarantees on ordinary accounts that paid no interest was under consideration but cautioned that it was a proposal and not yet policy.

"If it goes ahead it would be a big step backward and call into question the government's sincerity and the reform process under Mr Koizumi," said Brian Waterhouse, banks analyst at HSBC Securities.

There are fears that, as the deadline for the introduction of the �10m cap approaches, depositors will shift accounts from weaker banks to stronger banks, potentially triggering a run on certain institutions and forcing them into insolvency.

Richard Jerram, economist at ING, said several institutions might not survive the changes to the insurance scheme next April. "The government would be taking a significant risk if it allowed deposit insurance reform to go ahead as planned unless there was confidence in the health of the financial system."

The Tokyo metropolitan government confirmed this week that it is to start moving its funds to banks it has determined are financially strong and away from banks it deems to be under pressure.

Individual depositors have also started shifting funds to banks that they have deemed "too big to fail", such as the large city banks, putting pressure on regional lenders that is set to increase as the April deadline approaches.

Mr Koizumi's political style has been characterised by bold reform policies subsequently watered down in order to get them implemented. The prime minister in July approved a vastly diluted bill for the reform of the postal services - an issue on which he had said he was inflexible.

Mr Jerram summarised the problems with his policy of compromise. "If you are going to impose limits on deposit insurance then you need to have a healthy banking system that enjoys the confidence of depositors. Alternatively, if you are going to persist with unlimited deposit insurance, then there is less pressure to create a sound banking system."
+++++++++++++++++++++++++++++++++

It looks as if the Japanese have bitten off more than they can chew. The savings of the elderly Japanese have flown the coop already.

They already hated the LDP and Koizumi after he sacked their darling Foreign minister last year. When the mopes decided to yank deposit insurance they bolted and are unlikely to ever return. Lots of the $620 Billion is in mattresses and setting up again this to move into gold kilo bars in an increasing flow.

The Japanese alone can smash the cabal and the BIS. Then there's the Saudis.
It is only a matter of time before the cabal has it's back broken.
The Hoople
Operative
The diminishing fresh-water reserves of this planet could only lead me to conclude, much like oil, wars will be fought over water. I live in a county that just gave a utility (probably getting acquired by a German utility) unlimited access to our below-ground aquifers for a paltry $500,000 a year. Our water tables have been declining for decades yet this short sighted decision prevailed. Gold and water- get you some.
TownCrier
Short & (not so) Sweet
http://biz.yahoo.com/rb/020823/financial_citigroup_probe_2.htmlHEADLINE: Citi Research Probe to Include AT&T Deal
Fri 11:17am�ET
A probe into the integrity of Citigroup Inc.'s stock research has widened to include a lucrative AT&T Corp. deal the firm's investment banking division won in 1999.

Citigroup is vulnerable to "headline risk," analysts have noted, as it is also being investigated for its role in the Enron collapse. It also means executives like Michael Carpenter, Salomon's CEO, are spending more time dealing with regulatory issues rather than trying to improve the business.

"Clearly, the outstanding issues linked to Enron, WorldCom, and the Spitzer investigations are taking their toll on management's time at Citigroup," Morgan Stanley analyst Henry McVey said.

--------------
Sometimes you've just got to recongnize the roughness of the seas and stop trying to trade your capital in and out of peril. Buy gold and simply let your wealth be wealth -- accumulated for the days when you might need to draw upon it.

On your behalf the staff of brokers at USAGOLD - Centennial can take the difficulty out of the task of locating the gold you need and getting it into your hands. Give them a call.

R.
glennh10
Fresh Water Problems
Why is de-salinization of ocean water never discussed or considered?
TownCrier
More Short & (not so) Sweet -- AOL Time Warner Falls 8%
http://biz.yahoo.com/rf/020823/aol_stocks_5.htmlHEADLINE: AOL Time Warner Falls on Probe Fears
Fri 12:10pm�ET
NEW YORK (Reuters) - Shares of AOL Time Warner Inc. tumbled almost 8 percent in early Friday trading on concerns the world's largest media company may take another huge write-down of its assets and following reports regulators may widen their probe of the company's finances.

The company took a $54 billion charge in the first quarter -- the largest ever -- to write down the value of America Online's acquisition of Time Warner.

The company attributed the first-quarter write-down to the decline in stock value of Time Warner....

"If the stock price was the cause of the last write-down, the market is asking, is it judicious to assume that there will be another one?" said Gerard Klauer Mattison analyst Jeffrey Logsdon. "It's not unreasonable to make that assumption, if you apply the same logic....."
-----------------

It's YOUR portfolio. Are the managers of your companies working FOR you or AGAINST you? How about the business cycle?

Pick up your feet and buy gold. It's time to stop struggling against the tide.

R.
Gandalf the White
Sir Glennh's Question <;-)
glennh10 (08/23/02; 11:48:03MT - usagold.com msg#: 83583)
Fresh Water Problems
Why is de-salinization of ocean water never discussed or considered?
===
IT IS often considered and many times utilized !
Got REAL MONIES to spend for it ?
Taking a small amount of material from seawater or brackish water, to produce a Potable Water is not an easy or cheap procedure ! YES, lots of cheap methods like solar evaporation --- BUT think of the areas and volumes needed.
The RICHER portions of the world do have such systems.
Ever been to Saudi Arabia and seen theirs ?
<;-)
Carl H
US natgas groups fear manipulation of weekly data
http://biz.yahoo.com/rc/020823/utilities_natgas_eia_1.htmlI have been saying here since March that the EIA data since January 2001 is fake.

It isn't the companies -- it is the EIA itself. The gas industry is being cheated out of much of the value of it's resource.
Black Blade
Re: Carl H, Glennh10, Gandy, and Operative

Carl H � I have been saying the same thing about NG data for a long time. During the IEA comment period I submitted my comments that also included requiring all 110 NG producers to submit data. I was critical of the AGA and IEA methodology and data collection for years. I was worried that a government agency would be worse, however, I had hoped for the best.

Glennh10 and Gandalf � Yes, desalination is an expensive and energy intensive business. Though there is a desalination facility in Marin County, California. We may have to consider using more solutions like this in coming years. The Saudis are fortunate enough to have ready access to abundant energy supply for desalination.

Operative � I mostly have worked with Shan and Hechein people in the northern regions of Burma. Many times I have turned a corner on an trail or walked over grass covered areas and almost fell into a hand-dug shaft. They just stop anywhere and dig a shaft and eventually abandon the spot. It can be quite a surprise and dangerous. Yikes!

Cheers!

- Black Blade
Operative
@ Hoople
Might I make a not so minor change to your post on water.

"The diminishing fresh-water reserves of this planet could only lead me to conclude, much
like oil, wars will be fought over water."

My proposed change is moving your statement from a future tense to the present. are being fought. This as noted in your post that "someone" is grabbing up your precious water source already. They will determine how much you are to recieve and what price you will pay.

War, the kind with bullets and bombs is a last measure/resort by those attempting to control resources.
It is more cost effective, requires less human resources, and leaves the targeted object/area unharmed, to simply bribe officials who will then steal with a swipe of the pen.

Recent months have added to my thought that I have less to fear from terrorists or Saddam but I should watch more carefully those in power either in government or corporate boardrooms.
Operative
Today Is...
As the Dow slowly sinks into the sunset (-192.00) on this friday afternoon, I want to bid all here a great weekend.
Gold still strongly above 300 in what is suppose to be the "weak season". Not bad, not bad at all.

Before I could even type this message the Dow hits -203 and the curbs kick in. (Really Big Smile)

Off to wash the ole pickemup truck, maybe give myself a hose rinse and then taking the goddess out to dinner.

CHEERS!!
The Hoople
Operative
Agreed. I still have no doubt although wars are last resort they will eventually be required. If wealth was measured in fresh water our Canadian neighbors would be wealthy indeed! What better way for NWO to control populations- water and food rationing. Maybe gold control will ultimately determine water control?
USAGOLD / Centennial Precious Metals, Inc.
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Belgian. .
With respect to the DB situation and your post on parity as it may or may not relate to the gold price: Your thought immediately registered the response that "No, it cannot be because the natural follow-up is that gold would change hands. No need to invent a price for gold unless one wanted to resolve the currency equation you mention."

At the same time, I have wondered for some time what happens when banks merge across international borders and one of them brings with it a gold loan book on which they could default, or in which major counterparties register concerns about the same -- at the central bank level. At that point, if the bullion bank is unable to perform, which nation's central bank should be called upon as gold lender of last resort??

And what are the economic and political implications of such a turn of events. Sticking with the DB example, why should Bundesbank be responsible for shaky gold loans brought across the water from New York?

Aside: That assumes of course that central banks have been acting as lender of last resort and disguised the operations as "auctions" and "sales" as a means to an end (other than the lame excuses given publicly . These meanderings are still theoretical by and large, though the words and actions of both Brown and Welteke seem eerily similar.

And lastly, for all you scenario builders, this calls to question what role the U.S. Federal Reserve might be forced to play if a major U.S. bullion bank visited THE ABYSS.

Your thoughts?

Any and all views welcome.

Black Blade
Vanguard's Bogle Says Thousands of U.S. Stock Funds May Close
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWXD4xUuVmFuZ3Vh
Snippit:

New York, Aug. 23 (Bloomberg) -- The loss is staggering: From March 2000 to July 2002, the value of the U.S. stock market plunged by $3.7 trillion. The bear grip will squeeze out the excesses in the U.S. mutual fund industry, says John Bogle, founder of Vanguard Group, the second-largest U.S. mutual fund manager, with $570 billion in assets. After a 28-month, 41 percent plunge in the Standard & Poor 500 Index, the $6.6 trillion fund industry is poised for a shakeout that could claim half of its 4,800 equity funds, he says.

``This is a seminal moment for the industry,'' Bogle says. Many of the funds that sprang up during the bull market -- much like the dot-com companies they invested in -- have never made much money for investors, says Russel Kinnel, director of fund analysis at Morningstar Inc., a Chicago-based research company. Billionaire Warren Buffett says companies need to curb unrealistic assumptions about their fund returns. Ford Motor Co., SBC Communications Inc. and Verizon Communications Inc. have said in SEC filings this year that they expect their funds to generate returns of 9 percent or better in 2002. Buffett called such forecasts ``wildly optimistic'' in a July 24 op-ed article in the New York Times.


Black Blade: This looks interesting.



Black Blade
GLOOMY OUTLOOK FACING BIG BANKS
http://www.nypost.com/business/46746.htm

Snippit:

August 23, 2002 -- Call it bawl street, not Wall Street.
The big investment banking firms, hurting after 30 straight months of down markets and a slow- or no-growth economy, do not seem to be joining the market and economic recovery. Instead, they continue to wander through a drought in both the lucrative initial public offering market and the mergers and acquisitions game. As a result, pros expect more profit shortfalls and yet another round of cost-cutting, including layoffs.

Such puny expectations are bad news not only for the Street, but also for New York City, which is already facing a potential budget deficit because of Wall Street's faltering fortunes. And property brokers are quaking with fear that another round of layoffs among high-paid Wall Streeters could be the pin that pops the real estate bubble. "We've turned more negative on the industry," said Tanya Azarchs, managing director of financial institutions research at S&P. "We do see that it may be turning worse. We are not trying to say that we expect a meltdown in the industry." Azarchs said the legal issues, congressional and Justice Department investigations and civil lawsuits have created "unquantifiable" risk around the big Wall Street houses.


Black Blade: A potential crash for financial instutions and a real estate bubble crash to boot. Hmmm�

Black Blade
Uruguay Says GDP to Fall Through 2003; May Shut Banks
http://www.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWVW8hSPVXJ1Z3Vh

Snippit:

Washington, Aug. 22 (Bloomberg) -- Uruguay has told Washington lenders that its economy, which has been undercut by neighboring Argentina's default, will tumble by 11 percent this year and 4.5 percent in 2003. In a document sent to the International Monetary Fund, Uruguay also said its inflation will reach 40 percent this year compared to 11 percent inflation it predicted in June. ``Uruguay is facing the worst economic crisis in its history,'' the World Bank said in an internal report on its $252 million loan for the nation, part of a $3.8 billion support package cobbled together by the IMF early this month.

In exchange for that aid, Uruguay pledged to shut down insolvent private banks, including two of its three largest, Banco de Montevideo SA and Banco Comercial SA, if they aren't recapitalized by investors. Depositors in Banco Comercial say they already have come up with a plan to save that bank. Critics have also questioned whether the IMF and World Bank's emphasis on lower government salaries, a new tax on pensions and efforts to induce government workers to retire will allow the country's economy to rebound. Uruguay has suffered more than any other country from Argentina's $95 billion debt default in December. Its other neighbor, Brazil, has also been suffering higher borrowing costs and little access to credit as investors have bet that it too won't be able to pay its bills, furthering complicating its hopes.


Black Blade: Going from bad to worse on IMF sanctions. The people will suffer as the IMF strips the people of their assets. Former senator Jack Kemp has been critical of IMF meddling for years. It would be interesting to hear what he has to say on this. If the people only had gold to protect themselves. I still got my gold Uruguayan pesos.

Boilermaker
Water and other resources
Resouces such as water, food, energy, and minerals are the guts of today's economies. Take any one of them away or price it beyond the average consumer's ability to pay and you will reduce that economy to scavenger status. There is another commodity, money, that is a "resource" because of its role as a store of value. It is like a combination of all the other resources, one that is more easy to store. For instance Argentina had no lack of marketable physical resources but their people got caught up in a false sense of wealth and blew the country's currency into oblivion. US dollar hegemony will do the same for the US.

Here's a biological metaphore. Consumption (aka tuberculosis) creates debt (wastage) and soon the economy (body) declines. Sick economies and TB patients can be cured but the illness must be diagnosed and treated, not denied and exacerbated.

The great minds of this forum have chosen gold and silver as their store of wealth. They instinctively know that the "paper will burn" or will be redenominated to oblivion.

I have become more appreciative of water the past few years because my well yield has delined to only 1 gallon/minute recently. Our horses' water comes from the barn roof and I am going to install a cistern for backup storage. It's no fun running out of water in the shower when all soaped up.

I have become more appreciative of gold and silver the past 15 years as I witness the consumptive disease that has created a debt bubble that will destroy the dollar.

Many, many thanks to the individual and collective wisdom that graces this forum every day. I only wish that we could meet face to face periodically to have the pleasure of being in company with kindred souls. Perhaps Michael will host a goldbug jamboree some day when the time is right.
Leigh
Boilermaker
As I read your post, I was reminded of the Depression and World War II years, when people grew gardens, saved string and foil, captured rainwater (like you're doing), and cut down on meat and butter. Don't you feel that people today can re-learn those skills? Even if some businesses close and the country isn't thriving, citizens can survive.

It angers me that the government isn't doing all it can to foster a spirit of conservation and resourcefulness in all of us. You'd think they don't want us to survive or something....
MO VER MEG
Leigh
I believe they want to make us dependent and controllable.

MOVERMEG
Sierra Madre
An abnormal world
Perhaps I am beating a dead horse, but still I should like to express my opinion regarding the state in which this world finds itself.
We are living in an abnormal world. The world has never before in recorded history lived in such an unrealistic fashion. The psychological condition of our world is pathological, that is to say, sick. We are living in mentally deranged societies, and I refer especially to those with the most industrialized economies. I think that perhaps inhabitants of remote islands such as the Cape Verde Islands or the Galapagos or other very isolated islands, may still retain sanity, because their scarce resources and small populations do not allow the most influential or powerful in those places, to indulge in fantasies based on credit and false money. The economy there is chickens, hens, pigs, coconuts and fish plus the other usual items found in "underdeveloped" societies. These societies have managed to escape the "bite of the tarantula" of development, as Julius Evola put it. They may be "underdeveloped" but, they are sane.
It has been money substitutes that have destroyed normality in our Western World (and in the Westernized world).
Our pathological condition does not allow a to return to normality - it would be too much of a shock. We know we are sick, but we are afraid of returning to health, because our illusions will vanish with returning health.
Take the case of a young man who told me the other day, that he is returning to Germany to take a job promoting exports from the region of Saxony. I asked him what did Saxony have to export. He answered, "Chips, for one thing". I didn't have the heart to tell him he was in for a very hard time promoting chips. Then he proudly told me about a VW plant producing an ultra luxury car, going to cost $100 thousand each, twelve cylinders. Surpasses Mercedes and BMW. Put together in a plant with parquet floors and glass walls. The customer gets to see the car he is buying, even can participate in "building" part of it.
This illustrates the pathology of our times. That plant is doomed, a perfect malinvestment. Credit, the enabler.
The survivors in this abnormal world may well be people such as the Indians in the remote jungles of the Amazon.
Funny money has driven the world mad. Part of the reason for buying gold, is that you can sit back and think for a while. It may go up in paper money, or it may go down, but it will always be there and be valuable. Gold is the route to personal normality. The antidote to the "tarantula bite".
I hope you all have more gold that you did last week! And have a happy, normal weekend with family and friends!

Sierra
Blackjack
US and Europe face stagnation like Japan in 90's
http://www.marketwatch.com/news/story.asp?dist=dhtml&siteid=yhoo&guid=%7B93CAB426%2D3755%2D4FFD%2D93A1%2D374E07AF179C%7DSAN FRANCISCO (CBS.MW) -- Paul Krugman, the New York Times columnist and Princeton professor of economics, has been concerned lately that the post-bubble United States is about to enter an extended period of stagnation.

The U.S. situation in the first decade of this millennium, he fears, could be similar to that of Japan in the final decade of the previous millennium, following the bursting of its bubbles.
mikal
@Leigh
"...the government isn't doing all it can to foster a spirit of conservation and resourcefulness." I agree. Self-preservation means we must all anticipate the actions of the Feds to be one step ahead. Discovering the extent they will go to preserve faith in the political process and a dysfunctional plutocracy, for example. Each individual is inherently resourceful, whether or not his own government presents obstacles to his happiness and self-fulfillment. The strategy of obtaining food and shelter from nature can be gleaned from many places, including nature herself- positive, constructive, and creative on earth and in the heavens. Those who manifest this type of uncompromising, concientious, constructive energy in the image of Creation, will illuminate for others, clear pathways towards a truly peaceful, productive, and achieved world.
Black Blade
Re: Mo Ver Meg and Leigh

That's exactly the point! The more dependent that we become on government the more secure and powerful they become. In this way politicians and government bureaucrats can justify their existence. Politicians would have us believe that they are actually useful or important. This greed and power lust is a psychological disease. Over the last century there has been an urbanization of America. During the Great Depression many Americans were living in rural America and were able to grow their own food and raise livestock. Those days are gone as the family farmer/rancher is all but disappeared. In the next Great Depression we should see similar events as in Argentina and Uruguay play out in the U.S. Many of us have seen the banks close, food riots, scavenging for food in dumpsters and landfills (even the eating of road kill, pets, toads and rodents), skyrocketing unemployment and even elderly women resorting to prostitution for survival in South America.

You say that it can't happen here? Yes it can! People do desperate things in bad times to survive. Realize that Argentina was the breadbasket of South America and at one time the most prosperous country in the world. Also, realize that Uruguay was (until recently) considered the Switzerland of South America because of the reputed safety of their banks. How times have changed. Venezuela with all its natural resources and dominance of energy in the western hemisphere struggles with ballooning debt and massive social programs (not to mention a quasi-Marxist president). Colombia is falling apart as leftist guerillas and right-wing paramilitaries rule the countryside. Bolivia is so far somewhat stable, but here too there are cracks beginning to appear with rising inflation and a developing currency crisis. Then there is Brazil that threatens to elect a left-wing socialist who has actually advocated defaulting on the country's debt and now is experiencing another bout of rising inflation. Mexico's finance minister has openly worried that South America's problems will spread north. Mexico is still burdened with a deteriorating nationalized energy and basic services industry while the country's infrastructure in caving in.

We can watch these events develop south of the border as a possible test case of what will happen in the U.S. in coming years (or months?). Americans are simply not prepared and are incapable of fending for themselves. This may be partly design by power hungry politicians who promote dependence of the citizenry on government solutions. The best defense for those of us who see world events unfolding before our eyes is to take precautions for ourselves and our families and unfortunately to leave others to their own survival. After all, most of us know friends and family members who view our position on self-reliance and preparation as foolhardy. It is the sad old Aesop fable "The Ant and the Grasshopper" scenario being played out before us.

- Black Blade
Waverider
USAGold
Michael, I just received the Lucky French Angel and....WOOOWSEEERS - it's beautiful! It has a permanent place on my gold necklace - with my dark colouring it is oh...sooooo...pretty - NEVER to be traded or sold for anything! I think that it has already brought me luck as I also just received tremendous news regarding the US/European distribution and sales of the home-health care product for which I've patents! Too much for one day - time to celebrate (before spending the weekend home-canning Leah)! Thank you again Michael! Cheers,
Waverider
Waverider
OOPS.....
Leigh...sorry...
Graham
Water and Desalination
http://www.water-technology.net/projects/tampa/For those of you interested in water and desalination plants, check the link. This covers some of the basics for a new desalination plant being built here in Tampa Bay.

Given Florida's drought for the last few years (but raining right now) the need for a new water supply was high.

The plan is getting some environmental flack. Basically, a desalination plant returns extra salty water back to the source, Tampa Bay. In this case it is being built at a power station that uses large volumes of cooling water already. This dilutes the returned water to a reasonable level for return to the bay.

Graham
Black Blade
Yen Near Two-Week Low; Shiokawa Says He Wants Weaker Currency
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWY8GRVtWWVuIE5l
Snippit:

New York, Aug. 23 (Bloomberg) -- The yen headed toward its fourth week of decline against the dollar in five weeks after Japan's finance minister said he wanted his country's currency to lose value. ``I hope it will weaken a bit more,'' Masajuro Shiokawa said in Osaka, Japan. With the yen down 1.8 percent this week, ``the currency is moving in the direction we hope to see.'' Japan's trade surplus shrank more than expected in July as the yen's 9 percent rise against the dollar this year hurt exports. The currency's gains reduced the value of computer-part and car shipments from the world's second-largest economy, pushing exports down 0.5 percent from June. The smaller surplus ``is still a concern, so these comments will continue, even as the yen weakens,'' said Nobuaki Kubo, foreign-exchange manager at Daiwa Bank in Tokyo. ``The ministry is still trying to help the dollar.''

Black Blade: And so the "Currency Wars" continue. It is quite the tread mill with the Japanese economy still losing traction � Japan weakens the yen and supports the dollar for an ever shrinking global economic pie, while the US corporations and consumers are spending less. It is no wonder that Japanese citizens are buying gold.

sector
Dittos on the Depressive Forecast
Black BladeAdd to your analysis regarding the virtual absence of self-reliance, the likely anarchy.

Today's national resolve has been split into the "Reds" and the "Blues"...the last Presidential electoral map. The press is utterly polarized into ideological camps. The population cannot possibly endure the coming hardships as an intact union. The social strife which will attend Weimar Republic inflation will crumble our infrastructure, wreck our institutions.

Joseph Conrad wrote one of his best essays "Know them when they are hungry". America will be tested as never before in the near future. I am afraid the hungrey will flourish in anarchy. Our citizens will evolve as a cancer patient. First, denial [Where they are today], then anger [We may see the beginning of this in the November elections] and then finally, acceptance that their way of life is over, their future - altered.

Social Security? Ask the Argentineans about theirs. Examine the economic morass in Japan. Now, imagine Japan without it's largest trading partner. We really don't "Trade" with Japan and haven't for decades. They hold our unbacked paper...for now.

My next-door neighbor is a senior executive at a manufactured home firm. He came over this evening and said they just had their worst month in the company's 25-year history. The good news is he will refinance his home at 5.8% with no fees. He knows it's a form of welfare.

Washington's mutated World-view gets more twisted each day. What distinguishes the dictator Castro who is our enemy, from the dictator Musharref who is our friend? They are dictators. They both are an anathema to democracy.

Self sufficiency is all-important.


Blackjack
No rebound in capital spending
Kansas City, Missouri, Aug. 23 (Bloomberg) -- John Holland is reducing equipment purchases this year at Butler Manufacturing Co., the century-old maker of pre-fabricated buildings, and lower interest rates would do little to change his mind.

Some economists and investors have urged the Federal Reserve to reduce its benchmark lending rate a 12th time since the start of last year. That wouldn't ``make any difference in our decisions to hire or invest,'' said Holland, the company's chief executive officer. ``The problem isn't high interest rates. More important for us is capacity use, which is still pretty low,'' the result of weak demand. Butler plans to slash capital spending by up to half.

Companies added twice as much to factories and equipment during the economy's record 10-year expansion from March 1991 to March 2001 as they had in the previous decade. When the recession started, they were left with excess capacity. Increased business spending is necessary for the economy's recovery to gather momentum, Fed officials say. Manufacturing accounts for a sixth of the economy.

``Capital spending clearly has a long way to go before the level of activity returns to where it was prior to the recession,'' said Michael Moskow, president of the Federal Reserve Bank of Chicago, in a speech Wednesday in Wisconsin.
DOWNUNDER
@BLACKJACK - - RE MESSAGE 83600 --US and Europe face stagnation like Japan in 90's
http://www.marketwatch.com/news/story.asp?dist=dhtml&siteid=yhoo&guid=%7B93CAB426%2D3755%2D4FFD%2D93A1%2D374E07AF179C%7DSAN FRANCISCO (CBS.MW) -- Paul Krugman, the New York Times columnist and Princeton professor of economics, has been concerned lately that the post-bubble United States is about to enter an extended period of stagnation.

The U.S. situation in the first decade of this millennium, he fears, could be similar to that of Japan in the final decade of the previous millennium, following the bursting of its bubbles.
---------------------------------------------------------
I was glad you posted a link to this "story" as the author of the CBS Market Watch article(Paul Erdman) then went on to deny the above applying to the USA. In fact the story head line was :
"WHY EUROPE IS SICK AT ITS CORE".

A slam dunk of a story aimed at Switzerland in particular. what a ramp job --trying to shift focus away from the rotten to the core US administration.May work for some readers.
SNIP: (Following on from "bubbles" above) - -

"Krugman is right to worry. But he's worried about the wrong continent.His concerns should be centered on Europe, not America. And the poster boy for the economic malaise that is increasingly enveloping Europe is its former star performer, Switzerland.
The pillars of that country's unique post-World War II prosperity are today crumbling, one after another. What that country may end up with is a socialist state devoid of entrepreneurship, behind the curve in technology, burdened with an aging population and declining educational standards. As if this were not bad enough, as a result of revelations of Swiss cooperation with the Nazis during World War II, and its continuing practice of using bank secrecy to attract dirty money from every crooked corner of the world, it is a nation that is also increasingly regarded as amoral, a pariah.
Taken together, all this represents a recipe for economic stagnation"

And on it goes - - - - - -A wortwhile enough read but ovious for what it was - a slam job!
-----------------------------------------------------------
Downunder- - - when I see posts at USA Gold or elsewhere that I find interesting I often send them to Media outlets.Usually these stories will be about Gold or Economic facts that never see the light of day in our so called "Free Press". It's not a very rewarding task BUT I feel better knowing that they know, that I know, the stories "they" run are mainly crap!

To have any credibility ALL stories posted should have a link to the source. If thats not possible then it should be noted.IMHO.



Blackjack
More job cuts
SPRINGFIELD, Ohio (AP) � The decision to end production of heavy-duty trucks at the International Truck and Engine Corp. plant in this western Ohio city will result in the loss of 750 to 800 jobs, the company said Friday.

International spokesman Kyle Rose said most of the job cuts, which amount to nearly one-quarter of the plant's work force, will occur Sept. 6. The rest will come in the following weeks.
_______________
Unemployment Rate 5.9%? hmm
Blackjack
Lucent cuts more jobs
http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1367191 CHICAGO (Reuters) - Lucent Technologies Inc. LU.N plans to cut more jobs to reduce expenses, but it said on Friday that any layoffs would be on a smaller scale than the 15,000 job cuts reported by a financial news Web site.

TheStreet.com reported that Lucent is planning another round of job cuts that could reduce the telecommunications equipment maker's work force by as much as 15,000 jobs, bringing its total employment to between 30,000 and 35,000.

Lucent, which currently employs about 50,000, previously had said it aimed to reduce its work force to about 45,000 employees by the end of the calendar year.


Blackjack
Boeing workers to go on strike soon?
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWaohhWQQm9laW5nSeattle, Aug. 23 (Bloomberg) -- Boeing Co.'s largest union, the International Association of Machinists, said the company's proposal to boost wages and pensions ``misses by a mile'' and threatened to strike when a three-year contract expires Sept. 1.

Boeing offered to increase the machinists' average annual wages by 8.5 percent over three years to $66,250 and pensions by 12 percent. The union, which wants a doubling in pensions, called the offer ``third-rate'' in a statement.

A strike by the union's 25,000 machinists would shut airliner production at the world's biggest planemaker. The workers, based primarily in the Puget Sound region around Seattle, account for about a third of the workforce in Boeing's airliner unit.

``Right now, it looks like we're going to be on strike,'' said Deborah Byrd, a machinist who works at a plant in Kent, Washington. ``The pension is not enough to live on.''
mikal
@DOWNUNDER
Re: That "slam job" on Switzerland in your posted CBS Marketwatch story- They can't get much more hypocritical than that can they, the pot calling the kettle black? Now were Switzerland to join the Euro group, would they say: "we can be friends without all this unnecessary squibbling"?
silvester
@Leigh
I too share the thoughts you describe. I am confident we can cope. Maybe our leaders are too.

Is it possible we continue a gradual descent? The time would allow old skills to become popular again.

mikal
Terrorism "shield" takes shape
http://www.reuters.com/news_article.jhtml?type=topnews&StoryID=1366978 (snippit) Officials Ask Florida Residents to Watch Waterways
August 23, 2002 04:57 PM ET By Kristin Roberts
MIAMI BEACH, Fla. (Reuters) - The U.S. Coast Guard asked marina workers and private boaters on Friday to monitor South Florida's waterways, tracking suspicious activity and reporting to law enforcement in the name of homeland defense.
Coast Guard Capt. James Watson compared the effort to a call during World War II for civilians to watch the coast line for German U-boats.
......Law enforcement officials in Miami shied away from detailing what activity would be considered unusual.
Instead, the Coast Guard said that in general, behavior to monitor on the water includes suspicious people photographing or sketching along the waterfront, loitering for long periods, asking detailed questions and renting watercraft......
While the program, dubbed "Operation On Guard," is specific to Florida rather than national in scope, the FBI said Miami was not being fingered by officials as a more likely entry point for would-be attackers than any other port.
"We are not at any more risk," said Kelly Darden, assistant FBI special agent in charge of South Florida.
"But we have to look at our ports. We have to focus on them especially because they are the gateway for Central and South America," he told Reuters....more at link. Gold and BB's preparations making more sense daily.
a nation of one
blurb
Just the idea of government is itself already a corruption.
Knallgold
Swiss bashing
It came en vogue in 1996 when the "Nazi-Gold (sic!)" and "nameless accounts" affair was started by the WJC,Anglosaxion banking interests and its clintonite servants.

It proved to be a lot of hot air as the Volcker commission found only a few thousand accounts with about 50 million sFr. (not billions as accused) and most of it not related to the holocaust.Contrary to the US who "nationalizes" dormant accounts after 5(?) years,Switzerland keeps them as property of the original holder.

The bashers were terribly embarrassed as the cost of Volckers and other (so called "historians") commisions far exceeded the 50millions.For some reason the Swiss banks payed 1.5billions to the WJC,but again,the bashers are embarrased as they can't find enough people for this sum-its still on an account of a Jewish organisation.How many times did we hear the stories of the old'soon dying holocaust victims,just to force the banks further into moral offside?

The big shame is,everything was allowed to happen by the spineless Swiss gov.,oh did our leftists enjoy participating in the bashing...

And the damage is done.

This affair/blackmailing culminated in the announcement of Goldsales by the SNB,using the proceeds for a Solidarity Foundation to help all the minorities of the whole world (it remaines still so vague).

Conservative circles then had enough and launched an initiative which wants to direct the proceeds in the social security system,getting at least the money back to the people as the Gold is already lost.Well,this September we will vote about this initiative-its not surprising the Swissbashing resumes,the socialistic establishment wants that money and likes to talk the people into a bad conscience.It has worked before.

"What that country may end up with is a socialist state"
I see that danger and this is sharply observed by the Author,in fact we are marching faster than the other nations (ie debt doubling! between 1990-2000).Though the current malaise is increasingly associated with the left establishment.

"using bank secrecy to attract dirty money from every crooked corner of the world" - crooked corner,did the author mean the US? Sorry,I couldn't resist.
Usul
The second great depression will not be televised
http://www.depression2.tv/2001/twilight.html"The "Asian Contagion" - a series of market crashes, competitive currency devaluations, and economic malaise that began in 1997, loomed like a specter over the apparent good fortune of the U.S. economy. It hung dark and menacing on the horizon, like a storm that could either blow in and wreak havoc or disperse harmlessly to sea. The "Contagion's" threat to the U.S. economy was deemed vague and too distant, and after 2 years with no discernible effect, were all but dismissed. As always, what you don't know can't hurt you. Until it does..."

Usul
Hegemony, international debt, etc.
http://www.people.virginia.edu/~hms2f/hegemony.html"...Abandonment of pre-war gold parities for fiduciary currencies caused differential rates of inflation and dislocated exchange rates. The major (and many minor) combatants borrowed heavily to finance the enormous costs of war production. This decreased the ability of the major pre-war creditor countries, Britain, France and Germany, to continue relatively high and stable patterns of long term lending to developing and (almost the same thing) primary product exporting areas..."

"...When the 1929 stock market crash was aggravated by bank failures and tight domestic monetary policy, little capital was left for investment overseas. Absent a last resort lender, international trade collapsed under the weight of competitive currency devaluations, trade restrictions and bilateral deals, falling from $2.9 billion in 1929 to $1.1 billion in 1932..."


Boilermaker
Leigh re resources and self sufficiency
Sorry for the delayed response to your post 83597......

"As I read your post, I was reminded of the Depression and World War II years, when people grew gardens, saved string and foil, captured rainwater (like you're doing), and cut down on meat and butter. Don't you feel that people today can re-learn those skills? Even if some businesses close and the country isn't thriving, citizens can survive."

Of course there will be many folks who will survive and even thrive in the depression era to come. One group that comes to mind is the Amish. I live not far from a large Amish community and use Amish contractors and purchase their produce and products. There are also many marginally employed people in the labor force who will manage to scrounge a living much as they do today by being willing to do whatever work comes along and by ditching whatever luxury life styles they may have become accustomed to.

Another group who will prosper are those who will design and manufacture all those goods that we now import. The US economy will go through a transition from a financial ponzi scheme to a more sustainable "make or pay for what you consume". Gasoline prices may relegate SUV's to becoming homeless shelters or fishing reefs. Energy independence can be won when gasoline hits $5.00/gallon as it surely will. Domestic O&G will have a revival of investment.

I see the greatest threat is to those at the top of the financial pyramid who are dependent on high salaries in businesses that will all but disappear. These folks have tremendous exposure to financial risk and will find it difficult to downsize their personal empires fast enough to avoid bankruptcy or to stoop low enough to support themselves in a ruthless job market.

Another group that will face extreme hardship will be the elderly who are dependent on private and/or government pensions. Fortunately they have enough collective political clout to insure some measure of relief.

During WWII when there was no lack of jobs but there was a definite lack of resources we did not have a car. My father commuted to NYC every day by riding his bike to the train station. No doubt bikes, busses and trains will be more popular than SUV's. We also had a vacant lot next door that we and several other families used for "Victory" gardens.

I have secured some measure of resource independence by living on a farm with its own water and natural gas supply. I don't produce crops other than pasture for horses. We have a generator for emergency power and a gasoline storage tank for cars and tractors. There's deer, turkeys and rabbits out back and lots of apple trees. Lots of roadkill for the taking.

I believe that many of today's families will respond in a positive manner once they understand what was perpetrated on the US economy by the financial and political elite. After the "lynchings" they will get back to work. The key to having this positive response from the people is purging the system of its systemic disease and installing honest leadership. Only time will tell if that will happen.

In the meantime the most important "resource" to store is the one that will be the means to obtain all the others, gold and silver.
Paper Avalanche
good article on evolution of paper money from gold standard
darkhorse
@Boilermaker
You stated:

"...the most important "resource" to store is the one that will be the means to obtain all the others, gold and silver."

I humbly disagree, and choose to go with the advice of my favorite bestseller (sorry, I don't remember Ch/verse) to choose wisdom and knowledge over silver and gold. I pray for the former, and devote as much income as I can to the latter. The former is priceless, the latter is a tool.
Boilermaker
Darkhorse
I must agree with you, ie., a fool and his gold are soon parted.
Pete
Gann, Elliot and beyond
http://www.dprins.demon.nl/convergence/research1.htmlHow would you like to predict the gold market, stock market or any market into the future exactly by price and date to within 1% +/-? That's exactly the claim of Bradley Cowan. Brad brings the Elliot wave and Gann to a new dimension in his books. It's not cheap by any means.

I purchased his course recently and found his discoveries of price-time-vectors and ellipses surrounding them amazing. To understand his concepts you should be proficient in math; be prepared to spend time and then some conceptualizing and studying. If you've ever studied analytic and descriptive geometry you'll know what I mean.

I thought I would share this information with anyone who would be willing to venture into the twilight zone. ;)

www.cycle-trader.com/author.htm

Using the link supplied Scroll down to:

THAT'S RIGHT� THE STOCK MARKET!

Snip:

A MASONIC SCHOLAR USES "ATLANTEAN KNOWLEDGE" TO REVEAL THE HIDDEN
STRUCTURE OF THE MARKET

We are about to show that a member of the Masonic secret society known as W.D. Gann made some outrageous "discoveries" of the geometric patterns of time that will emerge in the stock market. As we have written in Convergence and the Enterprise Mission has extensively investigated as well, there is a great deal of evidence to suggest that the true knowledge of this octave-based system of hyperdimensional geometry that we are now discussing has been secretly known all along. The society of Freemasons is one current guise of this "secret society" that has preserved this knowledge, which Gann used to make his "findings."

For most readers, the idea that an apparently random phenomenon such as the movement of a stock's
price value in time could occur in specific, ordered intervals and vectors seems far, far too simple to be
true. However, Gann proved his case with extensive documentation beyond any shadow of a doubt. And thus, even though you can find Gann's books in the library, many traders are still selling copies of Gann's Master Course for Stocks, a huge compilation of Gann's writings and lectures over many years, for absurdly expensive prices. And people will buy them, just because of the promises of profit that are hidden within them, if they can keep and study the books long enough to understand how to do it. And here, we are really only describing the absolute basics of this enormously complicated body of information.

And now, enter Bradley Cowan, who may eventually be known on a very widespread public level as the man who silently turned the entire field of stock market analysis on its end at a very young age, and also made a significant breakthrough in hyperdimensional physics. Little is known about Cowan, as he refuses to give interviews, lectures or public appearances, seeking rather to allow his books to speak for
themselves. There are two basic sets of books that Cowan has produced, namely "Four-Dimensional Stock Market Structures and Cycles" and "Market Science." This author has not purchased either of these sets of books yet, as the complete collection is about five hundred dollars. And thus, our knowledge of the specifics of Cowan's information comes from interviewing approximately twelve different clients of Cowan's, each of which are actively using these principles to play the stock market.

goldquest
Predictions
in a free and open market might work. But with all of the skulduggery going on in the world, I don't believe anyone except the thieves and manipulators can predict the direction of the markets.
See Skolnicks latest article. He really flames JPM.
pdeep
The Basic Laws of Human Stupidity
http://www.ecotopia.com/webpress/stupidity/I came across this gem in Whole Earth Review back in the Spring of 1987, and it is probably more relevant now at some levels. I thought the ladies and gents here might enjoy it. Written by an economist, Carlo M. Cipolla, who was at UC Berkeley. Humor or trenchant analysis? You decide. An excerpt, the last two paragrpahs of the piece:

"Whether one considers classical, or medieval, or modern or contemporary times one is impressed by the
fact that any country moving uphill has its unavoidable s fraction of stupid people who manage to keep
the s fraction at bay and at the same time produce enough gains for themselves and the other members
of the community to make progress a certainty.

In a country which is moving downhill, the fraction of stupid people is still equal to s; however in the
remaining population one notices among those in power an alarming proliferation of the bandits with
overtones of stupidity (sub-are B2 of quadrant B in figure 3) and among those not in power an equally
alarming growth in the number of helpless individuals (are H in basic graph, fig. 1). Such change in the
composition of the non-stupid population inevitably strengthens the destructive power of the s fraction
and makes decline a certainty. And the country goes to Hell."

Helpless = goldless?
Black Blade
Grubman personifies what stinks
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1026144521015&call_page=TS_Business&call_pageid=968350072197&call_pagepath=Business/News&col=969048863851

Snippit:

SINGLE-HANDEDLY, a fleshy faced amateur-boxer-turned-securities-analyst named Jack Grubman has taken his entire profession on the road to perdition. Somebody was bound to do it. Who better than the man Business Week dubbed the Michael Jordan of analysts? Who better than the guy who consistently and persistently blurred the lines between objective stock analysis � the job he was supposed to be doing for Salomon Smith Barney � and investment-banking wheeling and dealing that brought mega-millions to Salomon and many millions to himself? (A reported $20 million U.S. in 1999 alone.) Who better than the man who stood shoulder to shoulder with the likes of former WorldCom Inc. chief executive Bernie Ebbers, transforming the telecom industry, or "sculpting" it, as he liked to say. Into dust. Let Jack Grubman, who parted company with Salomon last week, stand as the personification of everything that stink, stank, stunk about the analysts' game in the past decade. Look at what he rot. (Yes, I'm using that word intentionally.)


Black Blade: The games that are played on Wall Street. The little guy doesn't have a chance against the insiders who fix the markets. Grubman is typical of Wall Street analysts. They are not interested in objective analysis, but rather in the business they attract for their employers and the resulting bonuses. Wall Street has evolved from a den of thieves into one huge boiler room and "bucket shop". If you want to play the stock market game, you have to do your own research and be extremely careful � even that is no guarantee as many companies won't tell the truth either. Case in point � Enron, WorldCon, Global Crossing, Qwest, Tyco, Kmart, etc. etc. etc. Now is the time to be on the defense.

Black Blade
Ex-Enron CFO Kin's Funds Said Frozen
http://biz.yahoo.com/ap/020824/enron_fastow_accounts_4.html

U.S. Judge Freezes Accounts Belonging to Family Members of Ex-Enron CFO Fastow, Source Says

Snippit:

HOUSTON (AP) -- Prosecutors have drawn closer to Enron's former chief financial officer, freezing brokerage accounts belonging to his family members a day after a trusted aide pleaded guilty, a person familiar with the case said.The accounts were frozen by a federal judge after Andrew Fastow's brother, Peter Fastow, tried to move several million dollars from one account to another as part of an unrelated civil case, according to the source, who spoke on condition of anonymity. U.S. Magistrate Calvin Botley signed several warrants Thursday and sealed both the warrants and the sealing order, Botley's case manager Paul Yebernetsky said Friday. He declined to discuss the contents of the warrants.


Black Blade: Time to pay the piper. On Thursday lawyers representing Enron and WorldCon employees met to discuss asset seizures for their clients claims. I imagine they will have to look at "secret" accounts in the Cayman's and Switzerland too.

Black Blade
Bankruptcies hit small firms
http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_1342879,00.html

Snippit:

Colorado small-business owners felt the recession's pinch last year, with 25 percent more of them filing for bankruptcy in 2001 than in 2000. A total of 467 small businesses (fewer than 500 employees) in Colorado filed for bankruptcy last year, compared with 373 in 2000 and 347 in 1999, according to a U.S. Small Business Administration survey released Thursday. Nationally, 39,719 small businesses filed for bankruptcy in 2001, up 12.8 percent from 35,225 in 2000.

Economists don't see the economic picture for small-business owners brightening in the near term. The Vectra Bank Colorado Small Business Index published earlier this month dropped to its lowest point of the year - to 71.2 in July from 75.1 in June. The index weighs different economic factors, such as unemployment, to create monthly comparisons. Essentially, the lower the number, the more difficult it is for small businesses to succeed.


Black Blade: Some "economic recovery".

Boilermaker
Carl H - EIA gas storage numbers
I'm pretty sure that the EIA gas storage numbers are phony. I'm not sure the EIA people are manipulating the numbers because I can come up with a better motive for the people that report the numbers. The motive is "buy low, sell high".

Gas storage guys are middlemen, net buyers during the summer and net sellers during the winter. Over-report summer storage numbers to hold prices down when you're a net buyer and then report the "revised" numbers when you are starting into the net sell season. The foxes are in charge of the chicken coop in the NG market.
Carl H
@Boilermaker: EIA Numbers
I am inclined to disagree regarding the primary motivation of the manipulation of the EIA data.

Since what you propose is probably the simplest explanation, Occam's Razor puts the burden of proof on me.

I see the NG data manipulations as simply one more cog in the strong dollar policy (or as someone here called it "the weak commodity policy"). The things that make me think this include:

1. Plot the EIA NG price data since 1975. On this plot mark the point in time where the President's Working Group on Financial Markets was formed. Observe the very marked difference in the behavior of the price of natural gas before and after this point in time. Before that point, the curve is smooth slowly varying. After that point, the price is rapidly varying and looks like a sawtooth capped at $2.00 for the next ~10 years. It looks to me like a covert price control.

2. We know of other government statistics that are manipulated to support the strong dollar policy. The the CPI for instance. If you have not read the paper "The Fuzzy CPI", you should. In addition to the questionable formulas used, it is always announced, and then revised -- usually for the worse. I personally doubt that this one is manipulated just for personal profit motives simply because it is so integral to the strong dollar policy.

3. We know that other commodites are manipulated in support of the strong dollar policy. I don't think you would find any argument here that gold and silver are manipulated in persuit of the strong dollar policy. Although this has not really been mentioned on this forum, I will point out the HUGE increases in farm subsidies in the past few years. This is a way causing over production which keeep prices of farm goods in the toilet. Given these examples, and the importance of NG, it is not a stretch to imagine TPTB wanting to control the price of it.

4. The manipulation of the drilling results from the EIA apppeared to be the optomistc direction. While you might want to manipulate them in this direction for personal profit, you would certainly want to manipulate them in this direction for the strong dollar policy.

Thoughts?

Boilermaker
@Carl H - EIA Numbers
Clearly you have studied this subject in far greater detail than have I. Your theory has a valid supporting motive, strong dollar/weak commodities, and is based on long term and short term patterns. My observations and interpretations are mainly based on the annual market cycles and not so much on volatilty of the numbers.

If the motives of both players, the EIA and the NG marketers, are for lower overall NG prices then it can be reasoned that they are both cooking the numbers to support their purpose. The EIA probably has a longer term goal in mind while the marketers like to play the annual swings.

However, there are some new factors that should be affecting the annual price swings, ie., the increase in the summertime demand for NG fired electric generation and the reduction of NG used by the manufacturing sector. NG for electric generation has a seasonal pattern while industrial usage is relatively steady.

I would like to hear your take on that and also any thoughts on potential pipeline capacity and deliverability problems. Disclaimer, I'm a NG producer so I'm rooting for higher prices.
Black Blade
Slow Morning

It looks like a slow morning, ahead of a slow week as many traders are expected to be on vacation. With that note - I'm off to slay some fish!

- Black Blade
misetich
In Detroit, Steady Hands Are Steadying Nerves
http://www.nytimes.com/2002/08/25/business/yourmoney/25CFOS.htmlSnip:

Now, both face urgent fiscal challenges. Despite G.M.'s modest recovery in market share and its profitability from strong sales of its trucks, Mr. Devine is wrestling with G.M.'s unfunded future pension liability, which has mushroomed to nearly $10 billion. The same issue dogs Mr. Gilmour, who also faces the even bigger hurdle of accelerating cost cuts and streamlining to revive Ford's profitability. Last quarter, Ford earned a paltry $38 on each car and truck sold in North America, versus $804 at G.M., according to Mr. Girsky's calculations.

"Each is dealing with damaged goods," said Peter J. Pestillo, chief executive at the parts supplier Visteon, and a former vice chairman at Ford, where he worked with both men. "John's got a pension problem. Allan's got a cost problem."

***********
Lately, the focus is on G.M.'s pension fund, which totaled $80 billion two years ago but has dropped to $67 billion. Although the company's current pension payouts are not exceeding pension fund earnings, the market's volatility has destroyed G.M.'s assumption that it would earn a net return of 10 percent a year on the fund assets. Mr. Devine said G.M. was ready to transfer cash to fund some of the future liability at year-end, but he contends that cannot be done all at once without endangering G.M.'s product spending. Yet until the shortfall for future liability is funded, he acknowledged, the issue will not go away.

"It doesn't get off the table until it gets off the table," he said.

Future pension liability is also on Mr. Gilmour's priority list at Ford, which faces a $6.5 billion shortfall in its fund this year, according to Prudential Securities. But that is just one issue facing him. Analysts are concerned about Ford's ability to compete with G.M. as well as DaimlerChrysler, Toyota, Honda and Hyundai, which are continually rolling out new vehicles at a time when Ford's product pipeline seems to have run dry. Ford, too, faces problems trying to raise employee morale, even as the company needs to continue to cut jobs.
..............
Misetich
Both Ford & GM face difficult problems - and it is doubtful that the situation will improve any time soon - though with time it will get worse as GM profitability will be challenged by declining sales once the fickle consumer tires of established models - opting out for new and improved imports and GM market share diminishes - GM will be forced to introduce new models at higher costs

Ford is going, going ...gone - serious restructiring will be necessary

US foundation being rocked?

Got gold?


misetich
Cost-Cutting Can Start a Ruinous Circle
http://www.nytimes.com/2002/08/25/business/yourmoney/25VIEW.htmlSnip:

In Alice in Wonderland fashion, we talk of expansion and ignore the contraction all around us. We convince ourselves that out of cost-cutting will come prosperity. But while cost-cutting can lift a single company or two, when practiced widely enough it can pull down an economy. And that is happening today.

Few economists acknowledge this dynamic. Corporate cost-cutting and labor-saving layoffs appear in the forecasts as the golden road to greater productivity and rising profits. Never mind that we have just fired the workers and extinguished the salaries that would have been spent on the merchandise and services to fatten the profits. With sales revenue failing to rise, we cut costs more. The process feeds on itself � until there are not enough workers and salaries left to generate sales and profits.
There is hyperbole in this description, but not much. As a nation, we are caught in the strangest and perhaps most perilous recovery since the Depression � featuring a dynamic that William Dudley, chief domestic economist at Goldman Sachs, characterizes as "the corporate paradox of thrift."

"If everyone tries to cut costs and save more, no one saves more," he said. "If you and everyone else cut costs, costs do indeed go down, but revenue also goes down, so profits eventually go down, too. Collectively, we can't cut our way to prosperity."

...........

Why isn't that danger uppermost in everyone's mind? Why are forecasters like James Glassman, a senior economist at J. P. Morgan Chase, so optimistic? In a nutshell, they expect an infusion of demand from somewhere that will reverse the cost-cutting and persuade companies to expand investment, production and hiring. Their main hopes are more tax cuts, more growth in federal spending and more interest rate cuts by the Federal Reserve. They also count on people to finance consumption by continuing to extract equity from their homes, which are still rising in value.

Mainly, though, it is stimulus from Washington that for Mr. Glassman will save the day. "If Washington cannot get us moving toward full employment within a year," he said, "then there will be more federal stimulus. We have learned a lot since the Depression about how to fix the economy."
...........
In the current cycle, however, consumption � particularly for cars, housing and appliances � never tapered off from very high levels during the nine-month recession that started in January of last year. It has still not tapered off, but it is not rising, either, and that is a problem. Recovery requires increased consumption and business investment to make the economy grow. The danger today is that demand will decline instead, and recession will return � or there will be prolonged stagnation. Unfortunately, Mr. Dudley's "corporate paradox of thrift" is pushing hard in that direction.
*********
Misetich

It is difficult to envision a stronger housing market - yet housing markets have led an economic recovery in the past -
The US $ will crash sooner than later if Mr. Dudley is right - and thus far (last 2 years at least) is right on

Got gold?




mikal
@Misetich
"The US dollar will crash sooner than later if Mr. Dudley is right and so far..." Yes, it's true the $ trend continues down implying higher interest rates- anathema for the automakers as consumption and new product lines then decline. I see a patriotic shift to US cars over imports after a ME war. With a declining dollar, imports become more expensive vs domestic. And nationalizing an automaker or two would be easier than a Chrysler style bailout in this environment? Maybe the trucks division for it's military output. And the biggest vans and SUV's for the oil industry.
misetich
Too Much Supply, Too Little Demand - Businesses Have Few Incentives to Expand or Hire, Economists Say
http://www.washingtonpost.com/wp-dyn/articles/A58181-2002Aug24.htmlSnip:

By Steven Pearlstein
Washington Post Staff Writer
Sunday, August 25, 2002; Page A01


To understand why the U.S. economy can't seem to muster a stronger recovery, it helps to look for clues in Victorville, Calif., where 500 unused and unwanted passenger jets -- some of them brand new -- sit wingtip to wingtip in the desert.

Or in Detroit, where the Big Three continue to churn out large numbers of passenger cars that they sell at little or no profit, just to keep their factories busy.

Or in nearly every major metropolitan area, where office vacancy rates are still rising after 18 months, and have reached 25 percent in Dallas, 24 percent in Raleigh-Durham, N.C., and 18 percent in San Francisco.

But perhaps the best explanation can be found in those falling prices shoppers find for clothing, televisions, hotel rooms and cellular phone service. While the bargains are great for American consumers, they are being paid in the form of continued corporate layoffs, lackluster stock prices and a sky-high trade deficit -- in short, an economy that's having trouble building up a head of steam.
............
The degree of excess capacity in the economy is difficult to measure.

In the manufacturing sector, where reliable data is available, the Federal Reserve calculates plants were operating at 74.4 percent of capacity last month. That's closer to the low point of 73 percent last December than the 81 percent average of recent decades.

To David Wyss, chief economist at Standard & Poor's Corp., this stubbornly low utilization rate suggests that it could be six months or more before manufacturers begin to think about investing in new plant and equipment or hiring new workers. And that's one big reason that he and other economists have lowered their economic growth forecasts for the rest of this year.

Recently, one bright spot for the economy has been the auto industry, which has posted near-record sales for cars and light trucks. But according to industry executives and analysts, such encouraging numbers obscure the fact that domestic auto manufacturers still suffer from a serious overcapacity that will require painful restructuring, beginning around this time next year.
........
Sean McAlinden of the automotive research center estimates that the Big Three are likely to eliminate at least 1.5 million units of automaking over the next few years -- the equivalent of seven assembly plants employing roughly 15,000 workers. And with each job lost at a final assembly plant, McAlinden said, nearly four others are likely to be lost at nearby parts suppliers -- hardly the stuff of a robust economic recovery.

A similar dynamic is already at work in the troubled airline industry, which has only recently come to the conclusion that a modest economic recovery won't be enough to return it to profitability.
............
Along with the airlines, the hotel industry is lowering its expectations for the next year. Although the industry began to slow construction of new hotel rooms beginning back in 1998, excess capacity in most major cities has now forced down room rates to levels that discourage the building of any new hotels.
..................
"Although there has been overcapacity in retail for the past 15 years, I'd say it's now as bad as it's ever been," said Ira Kalish, chief economist at Retail Forward, a consulting firm in Los Angeles. "The end result has been a high level of bankruptcies, a lot of consolidation and a lot of retail space performing badly."

According to Kalish and other experts, the recent bankruptcies of Kmart, Ames, Bradlees and Caldor is but the first wave of closures that will be necessary to right-size the retail sector. The closing of these "anchor" stores, in turn, now threatens the viability of many malls and strip centers where smaller merchants relied on the traffic the big outlets generated.
.............
Nowhere is the plague of overcapacity more evident than in the once high-flying telecommunications sector. The unprecedented overbuilding there has now created a vicious downward cycle in which price wars beget bankruptcies and bankruptcies beget more price wars, dragging down weak and strong companies alike.
*************
Misetich
Not a rosy scenario - It has become evident that the US economic problems cannot be resolved through monetary means such as interest rates cuts, tax cuts - Greenspan's productivity miracle, O'Neil jawboning of an economic recovery is fading as has the new paradigm, new economy - excess capacity and other malinvestments and misalignments need to be purged

It will get worse before it gets better

Got gold?

sector
The Saudi Government is Officially Implicated in 9/11
A Secret Deal with Al QaedaSAUDIS PAID BIN LADEN HUNDREDS OF MILLIONS
Sun Aug 25 2002 10:26:26 ET Drudge Report

Senior members of the Saudi royal family paid "protection money" totaling at least $300 million to Osama bin-Laden and the Taliban to prevent them from attacking targets in Saudi Arabia, the London Sunday Times reported yesterday.

The revelation, based on extensive investigations, was contained in papers filed in a $3,000 billion US lawsuit by lawyers representing the families of Sept. 11 victims.

According to the documents, the deal was struck after two secret meetings involving members of the Saudi royal family and al-Qaida leaders, including bin-Laden.

The cash enabled al-Qaida to fund training camps in Afghanistan that are said to have been attended by the Sept. 11 bombers.

The court documents reveal that the agreement committed bin- Laden not to use his forces to subvert the Saudi government, while the Saudis agreed to ensure that requests to extradite al- Qaida members and demands to close al-Qaida training camps were not carried out.

In addition, the Saudis agreed to supply oil and financial assistance to both the Taliban and Pakistan which, the documents report, was worth "several hundred millions" of dollars.

The revelations resulting from the investigation are likely to exacerbate already tense relations between the US and Saudi Arabia, which one analyst at the Washington-based Rand think-tank recently described at a Pentagon briefing as the "kernel of evil."

The document names the Saudi royals involved in the deal and provides details about the network of charities and businesses through which bin- Laden raised money.

The documents say the Saudi princes were informed about attacks by Islamic fundamentalists on American servicemen at a US army training facility in Riyadh in November 1995 and at the Khobar Towers barracks in June 1996, in which 19 US airmen died.

The princes decided to strike a deal with bin-Laden because they feared that al-Qaida, which opposed the presence of US troops in Saudi Arabia, would show its displeasure by attempting to destabilize the kingdom.

The documents say Saudi Arabia's secret service, the Istakhbarat, had decided in late 1995 to fund the Taliban and the initial decision to pay bin-Laden "protection money" was agreed at a meeting of the Saudi princes in 1996.

A further meeting in the Afghan city of Kandahar in July 1998 led to the deal between Saudi Arabia and the Taliban.

According to the documents, those present included Prince Turki al-Faisal al-Saud, then chief of the Istakhbarat, Taliban leaders, senior officers from Pakistan's secret service and bin- Laden.

Turki was said to have known bin-Laden well through family connections and also because he had hand-picked bin-Laden in the early 1980s to organize Arab volunteers who were fighting Soviet troops in Afghanistan.

The lawsuit also alleges that the Saudi royal family supported charities with close ties to bin-Laden, including a $6 million gift from Saudi Defense Minister Prince Sultan, to the International Islamic Relief Organization, al-Haramain, the Muslim World League and the World Assembly of Muslim Youth.
END
+++++++++++++++++++++++++++
It now appears that the Saudis played a pivotal role in 9/11 by funding the Taliban and Al Qaeda. One can only guess at how many of the United/AA short contracts of 9/10 belonged to Saudis.

One would be safe in assuming that (1) Massive concessions will be extracted from the Saudis and/or (2) The US will permanently annex what it needs from their oil fields during the Iraqi war. A kind of Guantanamo Bay in the desert.

In any event, the oil price is staying high in anticipation of turmoil therefore the price of gold should rise by a similar percentage in order to try and maintain the oil/gold ratio.

It will be difficult to keep oil down as indicated by the rapid SPR buildup so perhaps the government has already geared up for a gold break out during the coming conflict.
+++++++++++++++++

BTW Edmund Stoiber the German challenger may actually beat Gerhard Schroeder. In such a case, Stoiber may not wish to continue the gold scam.

These two gold-manipulation stressing events are poised to happen about the same time - The Fall of 2002.
USAGOLD / Centennial Precious Metals, Inc.
In bookstores for $14.95 (plus tax). Get it here for ONLY $5.95 ($3 postage)!
http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

ABCs of Gold by MK"Without waxing philosophical, a few words are helpful concerning the mind-set with which you pursue your interest in gold ownership. Some enter the gold market to make a profit, others to hedge disaster, some to accomplish both. No matter into which category you fit, make sure you understand why you are going into the gold market. Convey that understanding to the individual with whom you are structuring your gold portfolio. The whys have quite a bit to do with what you end up owning.

"Frequently investors will say that any kind of gold will do because after all gold is gold, isn't it? This type of attitude has helped a great many coin shop owners unload unwanted inventory they hadn't been able to get rid of for years. This is probably a good deal for the coin dealer, but it could spell disaster for you. In the same vein, I have talked to hundreds, probably thousands, of investors in nearly a quarter century in the business. Quite often, potential investors have no more reason for buying gold than 'everybody else is doing it.'

"In Chapter 16 on portfolio planning, you will find some details on this important subject. For now, consider the inscription over the entrance to the temple of the ancient Delphic Oracle: 'Know Thyself.' Study. Read. Learn what's going on around you. Call a few gold firms and ask questions. There's nothing like conversation to stimulate thinking. Take time to lay a little groundwork. Then make your move. The political and economic situation being what it is, there is no better time to start than now. Know thyself -- your goals and needs -- and you will be a more confident, happier gold investor." (more)

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

Boilermaker
Sector; can you provide a link to the Drudge Report
If accurate, the reported direct Saudi support of al-Qaida
changes the complexion of the entire ME situation and the oil and gold markets. I will be very interested to see how this information gets treated by the Bush Administration and by the US Press. My gut feel is to believe the report simply because the Saudi royal family is probably more corrupt than our people in Washington. There is no honor among theives.
Mr Gresham
Sinclair Q&A
http://www.financialsense.com/editorials/sinclair/Q/0819_082502.htmLots of up-to-date insight into the POG market forces...
Waverider
Fixing Japan's banks: A task too tall?
http://www.iht.com/articles/68636.htmlSnippit:
"It has been an inauspicious beginning for Shokichi Takagi, the new commissioner of the Financial Services Agency. In the six weeks since he was promoted to the post at Japan's chief financial regulator, stock prices have tumbled to near 18-year lows, nonperforming loans have hit record highs and Prime Minister Junichiro Koizumi has backed down on a key part of a banking reform effort. As concerns about the financial industry grow, how Takagi navigates this perilous path will have a profound effect on Japan. As the agency's top bureaucrat, he is the man most intimately involved in Japan's handling of its banks and financial markets. While his boss, Financial Services Minister Hakuo Yanagisawa, is a politician and rarely works on daily details, Takagi has spent most of his career at the Finance Ministry where, out of the limelight, he helped shape some of Japan's most significant financial policies.

The bank situation is "getting worse, and it will continually and progressively get worse until the government decides to address the proper mobilizing of public funds" to bail out the banks. But analysts say that political pressure and institutional habit will ultimately force him to patch together short-term solutions to reassure jittery investors rather than solve the more complex problems plaguing the banks."

Waverider: Quiet day here today - back to the kitchen and the next batch of crabapple jelly!
Zhisheng
Sinclair's Q and A
Mr. GreshamThanks for the excellent link. Very good stuff.

Sinclair alludes to very wealthy Asian buyers, taking the side opposite to the "cartel" banks. And Bill Murphy from GATA has made similar allusions in the past.

Does anyone have any imformed opinions who these people are?
Cavan Man
Hello sector
Could you expand on your comment about the SPR buildup in your prior post? TIA...CM
mikal
@Mr. Gresham
Thank you very much for posting that link!
Leigh
Waverider
The kids and I are with you in spirit as you cook the crabapple jelly! Probably some of our other posters are too!
Gandalf the White
Sir Shisheng's Question
Zhisheng (8/25/02; 16:27:50MT - usagold.com msg#: 83644)
Sinclair alludes to very wealthy Asian buyers, taking the side opposite to the "cartel" banks. And Bill Murphy from GATA has made similar allusions in the past.
Does anyone have any imformed opinions who these people are?
=====
Do you mean that it is NOT yourself ?
The Hobbits thought it was !
SHHHHHHH Dr. No !
<;-)
Gandalf the White
oops -- that should be "Zir Zhisheng's" Question
<;-(
Black Blade
Why Do Saudis Hate Americans?
http://www.pbs.org/wgbh/pages/frontline/shows/saudi/analyses/wahhabism.html

A few excerpts:

For more than two centuries, Wahhabism has been Saudi Arabia's dominant faith. It is an austere form of Islam that insists on a literal interpretation of the Koran. Strict Wahhabis believe that all those who don't practice their form of Islam are heathens and enemies. Critics say that Wahhabism's rigidity has led it to misinterpret and distort Islam, pointing to extremists such as Osama bin Laden and the Taliban.

The religious curriculum in Saudi Arabia teaches you that people are basically two sides: Salafis [Wahhabis], who are the winners, the chosen ones, who will go to heaven, and the rest. The rest are Muslims and Christians and Jews and others. They are either kafirs, who are deniers of God, or mushrak, putting gods next to God, or enervators, that's the lightest one. The enervators of religion who are they call the Sunni Muslims who ... for instance, celebrate Prophet Mohammed's birthday, and do some stuff that is not accepted by Salafis. And all of these people are not accepted by Salafi as Muslims. As I said, "claimant to Islam." And all of these people are supposed to be hated, to be persecuted, even killed. And we have several clergy -- not one Salafi clergy -- who have said that against the Shi'a and against the other Muslims. And they have done it in Algeria, in Afghanistan. This is the same ideology. They just have the same opportunity. They did it in Algeria and Afghanistan, and now New York. ...

But the Saudi government has condemned what happened on September 11....... Yes, Prince Nayif condemned bin Laden, and other princes... Prince Turki condemned bin Laden. They did not condemn that message. They condemned bin Laden. ... Bin Laden learned this in Saudi Arabia. He didn't learn it in the moon. That message that Bin Laden received, it still is taught in Saudi Arabia. And if bin Laden dies, and this policy or curriculum stays, we will have other bin Ladens....

Can you show me an example of what the [religious teaching is in the schools? Well, here, this is a book, hadif, for ninth grade. Hadif is a statement of Prophet Mohammed. This is a book that start for ninth graders. This is talking about the victory of Muslims over Jews. This is a hadif that I truly believe it's not true, as a Muslim: "The day of judgment will not arrive until Muslims fight Jews, and Muslim will kill Jews until the Jew hides behind a tree or a stone. Then the tree and the stone will say, 'Oh Muslim, oh, servant of God, this is a Jew behind me. Come and kill him.' Except one type of a tree, which is a Jew tree. That will not say that." This is taught for 14-year-old boys in Saudi Arabia.

Wahhabism is sort of an extreme orthodoxy that historically has not been shared by a majority of Muslims, particularly nobody outside of the Arabian Peninsula. Is there a connection between the fundamentalism of the Taliban and the fundamentalism of the Wahhabi? The connection has been growing very, very strong in the past 20 years, and particularly in the past ten years. The dominant school of Islam with which the Taliban associate -- which is known as the Deobandi school -- is very prominent in Afghanistan and also in wide areas of Pakistan. Northern India has increasingly gravitated toward Wahhabi teaching, and has very, very strong organizational ties with various Wahhabi religious leaders.

And the Wahhabis dominate in Saudi Arabia? The Wahhabis dominate in Saudi Arabia, with also significant influence and presence in United Arab Emirates, Oman, Kuwait.... Saudis, by the way, never say, "We are Wahhabis." They say, "We are just Muslims." But they follow the teachings, and the major booklets taught in all schools are the books of Muhammed bin Abd al-Wahhab. Anyone who's subscribing to someone else is not very much welcomed.


Black Blade: I have discussed this before here at the forum. Saudis and even Kuwaitis despise Americans. They hate us and everone who does not believe the same way they do. They (the Wahhabis) teach that that we must be killed. That is the sacred duty of "true" Muslims. It is no surprise that 15 of the September 11 hijackers were Saudis. I am only surprised that none were Kuwaitis. And here's a thought � Kuwait is the only Arab democratic republic in the Middle East and the Islamic fundamentalist party is the fastest growing party there. Especially after the U.S. saved their bacon (sorry about the reference to pork). The point is, they hate us and they want to kill us. The recent build up for war against Iraq and the growing anxiety over the recent $1 trillion plus lawsuit filed against the Saudi royals, businessmen, banks, and charities means that we are walking on a precarious tightrope. After all they have 25% of the worlds oil (more if the Kuwaitis are included) and they will use the oil weapon if pushed as they are perfectly willing to suspend social programs if it is for "the cause" of (Wahhabi) Islam. I find it quite foolish that many continue to say that they will not use the "oil weapon" as they need the cash. Don't be fooled, believe me - they don't care. Anyone who really knows these people are quite convinced. I have known Saudis, Kuwaitis, and others and have discussed such things over the years. They really do not care about money. They are indoctrinated to Wahhabism. They are mostly committed to giving up everything including money, wealth, and their lives if need be. September 11 was just a wake up call.

slingshot
Siege Engine
Gold above $300.00Gandalf the White and Shadowfax have traveled deep into the Valley of Clouds without seeing a soul. Nightfall would soon come and Gandalf made camp alongside a stream. He gathered firewood and lit a small fire to warm himself against the night air. He then boiled water to make a cup of tea. Pouring himself some he could hardly believe the world was in such turmoil as he was in a peaceful setting. Gandalf gave Shadowfax some oats and talked to him kindly as old friends would do. Soon it would be time for sleep and an early rise to continue his search. That would not come to pass as a stirring in the brush and the movement of small stones anounced the arrival of a stranger. Both Shadowfax and Gandalf strained to see into the darkness when suddenly a man appeared in light of the firelight.

Hello. May I join you and enjoy the warmth of your fire'said the man. He was dressed like a traveler. His face well weathered and his clothes shown the wear of many a mile.
You may, said Gandalf and offered him a cup of tea.

The two men sat down at the edge of the fire, drinking their tea.

Do you know this valley? asked Gandalf. I have been through it many times, replied the traveler.

What is your name if I may ask? said the traveler. Gandalf the White and yours. Bonfir, in a steady voice and his attention was on Gandalfs reactions.

What do you seek Gandalf the White, for this is a rarely traveled place. In a momment the atmosphere became charged from the tone of his voice.

I seek those of the Valley of Clouds and will ask for their help. My quest is to remove the darkness that covers this land, replied Gandalf.

There was a pause and Bonfir spoke. If I take you to those you seek and they refuse, what then?

I would have done what I set out to do and my quest will take longer. I fear many more will be hurt without their help, said Gandalf.

Bonfir smiled. I will take you to them tomorrow wizard and they will have as many questions for you as you have for them.

Gandalf thought, I never mention the word wizard.

Lady Waverider was forming her plan and wished Gandalf would return soon.
Black Blade
Maybe it's good the Saudis are taking their cash from the U.S.
http://www.globeandmail.com/servlet/ArticleNews/PEstory/TGAM/20020823/RWASH/Headlines/headdex/headdexBusiness_temp/40/40/86/
Snippit:

Think for a moment about the U.S.-Saudi Arabian relationship. There is perhaps no partnership anywhere on the planet that is so rooted in naked economic self-interest. The Saudis, who sit atop the largest reserves of oil in the world, keep prices and supplies relatively steady, while letting foreign producers tap their resources. U.S. military might, in turn, shields the Saudi regime and its ever-expanding oil wealth from the clutches of rival powers in a perilous region. Now, however, this stark and fragile deal -- sometimes called a "special" relationship by U.S. diplomats -- appears to be on the rocks.

A report this week in the Financial Times says rich Saudi investors have yanked about $200-billion (U.S.) out of the United States in recent months to protest growing anti-Saudi sentiment. Even discounting the enormous political implications of the trend, the economic fallout would be powerful. If true, the report suggests that assets equal to nearly half the entire U.S. current account deficit have fled the country. And much of that money may have been swapped into non-U.S.-dollar-denominated securities, such as euros, or repatriated to Saudi Arabia. Saudi investors are believed to have $800-billion socked away in various assets around the world. Before the apparent repatriation began, experts estimated that as much as 70 per cent, or nearly $600-billion, was in U.S. stocks, bonds and real estate.

Many Saudis are said to be miffed about a growing wave of anti-Saudi comments, from inside and outside the Bush administration. The Financial Times pointed, for example, to Saudi anger over a recent Pentagon-sponsored briefing at which Rand Corp. analyst Laurent Murawiec lashed out at the Saudi regime. "In the Arab world, violence is not a continuation of politics by other means," Mr. Murawiec bluntly told U.S. officials. "Violence is politics, politics is violence. . . . The Saudis are active at every level of the terror chain, from planners to financiers, from cadre to foot soldier, from ideologist to cheerleader. Saudi Arabia supports our enemies and attacks our allies." The Saudis' nervous tension turned to outright fear earlier this month, however, when hundreds of families of victims of the Sept. 11 terrorist attacks filed a $1-trillion lawsuit, naming three members of the Saudi royal family and the country's largest bank as defendants. The suit accuses them and others of financing the al-Qaeda terrorist network.



Black Blade: Not that there is no hard evidence that the exodus of Saudi cash has yet begun though the Financial Times (of London) has claimed that there has been a withdrawal of over $200 billion so far. Saudi billionaire Prince Alwaleed bin Talal has denied that any members of the royal family are exiting the United States, noting that he's actually bulking up on U.S. assets. However, that could change. Those who are named in the lawsuit are likely very nervous about the loss of their wealth. Islam looks at Gold as money (much like many other religions including Christians and Jews). A large withdrawal of Arab funds or price increases for oil will absolutely cream the US dollar and the stock markets.

Gandalf the White
HE could tell by my Pointie HAT ! <;-)
Gold STILL above US$300.slingshot (8/25/02; 18:23:59MT - usagold.com msg#: 83651)
Siege Engine
===
GREAT continuation there, Sir Slingshot !
Looks as if I will not be up to TOTAL capacities for a while, as the prognosis ten days ago, was 5 to 6 WEEKS !
NAW !! Give me ANOTHER couple weeks and then --
-
While Lady Waverider stirs the Crabapple Jelly, she is PLANNING ---
=
"FREE GOLD"
<;-)
Sierra Madre
More "Wag the Dog"
Just MVHO, but this whole "US Lawsuit by lawyers representing the families of 9-11 victims" is a slick operation to intimidate or corral the Saudis. Smells to me of more extortion like that brought to bear so skillfully on the Swiss banks, alleging Jewish money.

I don't believe anything any more, on face value. (Just show me the gold, please).

Media and show business and politics are so perfectly utilized to mold opinion. What we see on T.V. MUST be the truth, right?

This whole Lawsuit against the Saudis stinks of being an operation run by the secret agencies of the U.S. Gov't.
Cameras running all the time required, all out. Repeatedly on the news hours. That doesn't happen by accident!

Sierra
The Invisible Hand
Confirmation of sector's msg#: 83541 of 08/22/02?
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020825/wl_nm/russia_usa_dc_6
Sector argued that there is only one reason so far to explain the Administration's apparently illogical Iraqi War plans:
The President already HAS tangible evidence of a September
11, 2002 terrorist WMD attack on the US and is pre-positioning
retaliatory forces. He can't warn the population of the effected city.
He has cried wolf too many times. Besides a warning would delay
what he really wants...a clear provacation from Iraq and Saudi Arabia.

So the Administration is trying to create more enemies:

U.S. Rebukes Russia over Georgia Bombing
Sun Aug 25, 4:57 AM ET
By Adam Entous
Snip:
LAS CRUCES, New Mexico (Reuters) - The United States rebuked Russia Saturday for alleged indiscriminate bombing in north Georgia, saying attacks violated Georgian sovereignty and could escalate tensions in the Caucasus.


CAVAN MAN
Here's sector's URL
http://www.drudgereport.com/flash.htm
hurry, it will expire, here's the date it was created
SAUDIS PAID BIN LADEN HUNDREDS OF MILLIONS
Sun Aug 25 2002 10:26:26 ET

SIEGE ENGINE
Can anybody please explain me what that means?
Flaccus
Meditation
Honor flees
when empire reaches its height.
And while there is a lesson in all things
the one found here
remains lost on trusting souls
who cast their lot with the wind,
and count profits in empty hands.

Exegi monumentum aere perrenius.
Sierra Madre
Hmmmm...do you and I have a country?


I found this line by following a link provided at a neighboring forum:
"As a general principle, I should put it that a man's country is where the things he loves are most respected."
- "Albert Jay Nock, Forgotten Man of the Right", essay by Jeffrey A. Tucker.

Maybe on some other planet?

Sierra
slingshot
The Invisible Hand
Siege EngineHello Invisible Hand.

Siege Engine is the name of the story to Free Gold.
A siege engine was a primative devise use in an attack on a castle. Catapults, rolling towers, battering rams and trebuchets were some of that eras machines. The story itself was suppose to be a short one but has now evolved into something complex. May it provide some entertainment to everyone.
Slingshot----------------<>
Black Blade
Rift With The Saudis
http://www.chron.com/cs/CDA/story.hts/editorial/outlook/1545043

Snippit:

Matters are perhaps coming to a head because we are approaching the first anniversary of the heinous acts that took place on Sept. 11, perpetrated by 19 terrorists, 15 of whom were Saudi Arabians and all of whom were guided in their actions by another former Saudi Arabian, Osama bin Laden. The government of Saudi Arabia has apologized repeatedly and expressed its profound sorrow both for what happened and for the fact that so many Saudis were involved. But endless analysis of such criminal madness can only lead us to conclude that Bin Laden involved other Saudi Arabians in order to engineer exactly the consequences that we are now witnessing: a growing rift between our two countries that could soon, and entirely unnecessarily, develop into enmity. Bin Laden himself stated that his avowed intent was to orchestrate not just attacks on the United States but also the overthrow of the Saudi government.


Black Blade: An interesting take by Hassan Yassin, a Saudi Arabia businessman and oil consultant. The Wahhabis have a stranglehold on Saudi education and the majority of the people. Unfortunately the Saudi royals have done nothing to reign in these Wahhabi clerics and to take over the "alleged" educational system (madrassas). As a result we will see a growing rift between the US and Saudi, as well as more terrorist acts that will include Saudi adherents of Wahhabism. Arab businessmen would be fools to keep their investments in the United States under current circumstances. The US has frozen the investment accounts of other Middle Eastern investors, institutions, and foreign countries in the past. They will do so again. The smartest thing that these people can do is bail out of the US and seek safety elsewhere (including precious metals).

Zhisheng
Celestial Denial
Gandalf the White "Do you mean that it is NOT yourself?", says a surprised Gandalf.
You have caused me to lose much face! Nevertheless I WILL extend to you two guesses of my own:
(1) Vielleicht die Weltkommunismus lauert dahinter?
(2) Keneng mai jin de shi wode taitai zhu zai dalu de hao ji nian iqian li hun de lao zhangfu.




TownCrier
Stepping toward "free gold"...
http://www.thewest.com.au/20020826/business/tw-business-home-sto69226.htmlHEADLINE: Gold miners cut back hedge book

(The West Australian) -- AMID falling mine output, Australia's gold miners have made a concerted effort to sustain bullion prices above the crucial $US300 an ounce barrier, closing out $1 billion in hedging contracts during the June quarter.

According to Australian Gold Council data released at the weekend, hedging by Australian gold miners fell by 1.75 million ounces to 22.6 million ounces in the quarter, a fall of nearly 8 per cent over the March period, representing the sixth consecutive quarterly reduction in hedging. ...the ninth reduction in local hedging out of the past 10 quarters.

...the practice [i.e., hedging], which artificially inflates supply, is often blamed for keeping a lid on gold prices by sending a negative impression about producer sentiment.

-----(click url for more)-----

Meanwhile, mine output is reported to have fallen by 8% over the past year. As a stock investor, what will you have to show for your "ownership"? Dwindling mine life, or will potential profits/dividends be foregone in the desperate attempt to extend corporate life though exploration for new reserves?

Physical gold is your bird in the hand. Give the fine folks at Centennial a call when the markets open tomorrow.

R.
Black Blade
Schroeder Fails to Win TV Debate as Stoiber Shines
http://story.news.yahoo.com/news?tmpl=story2&u=/nm/20020825/wl_nm/germany_election_dc_3&e=5
Snippit:

BERLIN (Reuters) - Chancellor Gerhard Schroeder was knocked into the defensive in Germany's first U.S.-style TV election debate Sunday as rival Edmund Stoiber performed better than expected in a battle commentators declared a draw. Schroeder, often described as the most telegenic politician Germany has ever had, failed to throw the knock-out punch he had been seeking against the media-shy Stoiber, who surprised many with a string of aggressive, fluently delivered attacks. The chancellor adopted a statesmanlike calm, smiling disdainfully as Stoiber accused him of "irresponsible" foreign policies. Stoiber assailed Schroeder for the "national disaster" of high unemployment which lowered Germans' living standards. Schroeder appeared tense at times and displayed none of his usual wit in the contest against the Bavarian state premier, a dour master of facts and figures.


Black Blade: Ernst Welteke, president of Germany's central bank, the Bundesbank may be out of a job soon. The anti-gold socialist/communist may be removed after his boss Chancellor Gerhard Schroeder is tossed out of office in a couple of months. The wildly popular Stoiber is extending his lead in the polls as the German people are becoming ever more disgusted with the socialist Schroeder. This also means that the vaguely coherent mumblings of Welteke about selling the peoples Gold will also come to an end when he is thrown out on the street as the Stoiber administration takes over.

TownCrier
Building a future
http://www.tehrantimes.com/Description.asp?Da=8/26/02&Cat=9Νm=11HEADLINE: � Iran, India to Expand Economic Ties

TEHRAN -- Indian Deputy Foreign Minister for Economic Affairs Rajiv Sikri on Sunday referred to his talks with Iran's officials on transfer of gas to his country as 'positive'.

In his meeting with Kamal Kharrazi, Sikri noted that Iran and India can utilize their vast economic resources to boost mutual ties.

He said New Delhi attaches great importance to its cooperation with Tehran.

-------(more at url)-----

Terms of payment on balance of trade between these two will forever be... DOLLARS, anyone??? Don't hold your breath on that one.

R.
TownCrier
Well written perspective on the UK-euro decision, worth a read
http://politics.guardian.co.uk/euro/comment/0,9236,778725,00.htmlHEADLINE: If Brown wants to take over, he'll have to back the euro -- The longer Britain stays outside the eurozone, the greater the penalties


Key point (please read the article to gain the proper context):

"...Brown sees his own fortunes as being inextricably bound to those of the British economy. It would benefit him very little to take a decision that precipitated Blair's early exit if it also meant sacrificing his carefully cultivated reputation for economic competence."

---( see url)----

No further comment needed.

R.
BILLYG
Good Interview With Carl Swenlin (DecisionPoint.com)
http://www.decisionpoint.com/interviews/020823_iossif.htmlThis interview with Carl Swenlin, founder of DecisionPoint.com, was conducted by Ike Iossif of AegeanCapital, Inc.

Very Good, Well worth the time. BillyG
mikal
Re: Foreign language use on forum
Is this acceptable decorum now?
sector
Caven Man - More on the Saudi Funding of Al Qaeda
http://www.drudgereport.com/flash.htmIt wasn't featured on this evening's NBC Nightly News...just a rerun of a post 9/11 DateLine NBC Story on Saudi potentates at Ground Zero [Many months old].

The Drudge Piece is quoted in full below in my original post here.

The SPR is being restocked feverishly, perhaps in the realization that we must go it alone in a military engagement.

As for the significance of the Saudi funding connection to Al Qaeda, complete with meetings in Khandahar between top Saudis and the Taliban, it remains to be seen next week.

I am more interested in what the Administration does with this information and when they do it. If they issue statements tomorrow AM then we can be sure that the document releases in the 9/11 litigation were part of an orchestrated anti-Saudi propaganda plan that includes an ME war. If the Admin ignores this release they probably weren't involved in its release.

After former SECSTATE James Baker added his voice to the "Give Iraqi WMD Inspectors a Chance" choir, there are now only TWO possible outcomes to the Bush Iraq war preparations:

(1) The President is a complete dunce for allowing the war talk and plans to progress to the brink without even an INTERNAL ideological consensus...OR

(2) Mr. Bush knows a BIG something that all those learned academics and foreign policy experts who oppose him don't know.

The Saudi funding of Al Qaeda is only a small part of that putative knowledge. Alone it isn't big enough. See, the thing that the President would reveal needs to be so big that all these critics and go-slowers fall back and utter..."Wow! I didn't know that! Why we have NO ALTERNATIVE but to attack Saddam now that THIS [Fill in the blank knowledge] has been revealed!"

Such a thing if big enough, would erase all opposition and unite the internal support for an Iraq war. What that something IS, I am afraid, is a known attack plan on a major population center with a crude WMD. They can't admit such a thing without seeming completely impotent or creating a total panic.

I really hope that I'm dead wrong on this and the President is just a fool and an idiot for letting things progress so far. Rumsfeld would join him with a big, white cone perpetually on his head also.
TownCrier
Black Blade, a moment of your time, please?
Ive seen a few of your recent suggestions (as in your #83662) to Buba president Welteke getting the "vaudeville cane" in conjunction with a political change in the German government.

Can you recall the last time the election of a new German administration coincided politically with just such a changing of the guard in the top spot at the proudly independent Bundesbank? I ask simply because, for the life of me, I cannot.

TIA

Randy
sector
Is This Big Enough to march off to war? Bin Laden in Baghdad?
http://www.newsmax.comSunday Aug. 25, 2002; 9:41 p.m. EDT

Bin Laden in Baghdad?

A report that senior members of Osama bin Laden's al Qaeda terrorist network have sought refuge in Iraq gave rise Sunday to speculation that bin Laden himself may have been granted sanctuary by Saddam Hussein.

"You've seen an anonymous defense official quoted in the Washington Post indicating that what's going on inside Iraq includes possibly names of al Qaeda officials that you would recognize," said "Fox News Sunday" commentator Juan Williams.

"I guess that might mean bin Laden is hiding in Iraq," he added.

A report in Wednesday editions of the Post quoted several unnamed Pentagon officials saying that a number of high ranking al Qaeda members have been mentioned in recent classified intelligence reports as being in Iraq.

"There are some names you'd recognize," one defense official told the paper.

Defense Secretary Donald Rumsfeld declined to debunk the story during a press conference last week, where he maintained, "There are al Qaeda in a number of locations in Iraq."

Rumsfeld, however, declined to elaborate, explaining cryptically, "I suppose that, at some moment, it may make sense to discuss that publicly. It doesn't today."

On Friday, Senate Minority Leader Trent Lott hinted that he had seen evidence that Hussein was sheltering al Qaeda members.

"I'm not going to say that I have information to that effect right now, but I have reason to believe that's probably true," he told nationally syndicated radio host Sean Hannity.
++++++++++++++++++++++

A necessary siege of Baghdad complete with round-the-clock, weeks long artillery barrages into civilian centers is not something that the world will easily accept...especially with sattelite television camera crews on the receiving end beaming up the devastation in real-time.

The military tactics of such an adventure are fraught with danger and brimming with unintended consequences...as all wars are. There had better be a really BIG reason for such an adventure.

The longer the Admin stalls on providing it, the riskier things get for the American CEO.
Black Blade
Re: Towncrier

You ask: "Can you recall the last time the election of a new German administration coincided politically with just such a changing of the guard in the top spot at the proudly independent Bundesbank?"

That's a good question. Shroeder almost makes one long for the days of Willi Brandt (yikes!). I believe that Stoiber is the most or for that matter the only "real" conservative German politician to have a shot at taking over as Chancellor. If he does and he builds a coalition of support we could see a change at the Bundesbank. At the very least any talk of gold sales would be quashed from the top and at best Welteke would be under pressure to leave and perhaps actually face the prospect of being ejected by those higher up. Remember that this is the first time that a "real" change appears to be in the works since the end of the second world war � all the rest were simply variations of the same theme. This could be the real test of Bundesbank independence. At least that's my take on the situation. Perhaps "Cobra (too)" has a take on this as he is a bit closer to the action. Cheers!

- Black Blade
TownCrier
Question for anyone
I must be out of it altogether, just now doing a double-take on the INO quotes table that we run on some of our pages, including the forum.

When exactly did the Bridge CRB index become the Reuters CRB index???

Rhetorical: How long since the (college football) Orange Bowl was just the plain old Orange Bowl?

R.
Black Blade
Re: Towncrier - CRB Bridge Index
http://test.crbindex.com/crb/quotes_crbcomp.asp
Bridge went bankrupt last year and were up for sale. It appears that Rueters "bagged em and tagged em". When I don't know as frankly I did not notice. Anyway, it is an additional link I keep on hand for when the other gold price sites are down. Earlier this year several posters were looking for other backup sites and I mentioned this one. At the time Rueters was not part of the team. So the takeover must have been fairly recent. Cheers!

- Black Blade
TownCrier
miner49er, have a look at this as you contemplate the future of "free gold"
http://globetrotter.berkeley.edu/irforum/papers/morav-IIIC.htmlExcerpt (although, probably meaningless out of context):

"...the most prominent general theories of international cooperation rest on the notion that efficient interstate bargaining is costly. This is true not only of the application of coercive force; even within peaceful negotiations over international cooperation, commonly observed among OECD member countries, information and ideas are scarce and costly commodities, often asymmetrically distributed. Hence the transaction costs of negotiation -- the cost of locating efficient agreements and resolving distributional conflicts -- are high.

"...the informational costs of overcoming interstate bargaining problems are not necessarily as high as functional theories of international regimes and law or standard negotiation analysis assume.

[key point here] "...The costs of generating and distributing the information needed to identify and negotiate efficient interstate bargains are usually low enough (relative to the stakes) to assure that states are "naturally" well-informed and bargaining efficient. Gains are not, typically, "left on the table.""


And here's another pearl:

"...there is good reason to believe that the informational costs of efficient domestic bargaining (whether among individuals, politicians, firms, party factions, or interest groups) are many orders of magnitude higher than those incurred in conducting an interstate negotiation. Individuals are arguably more numerous, less well-endowed, more specialized, less transparent, and often less secure of property rights than states."

Thoughts that make you go, "Hmmmmm...."

R.
Waverider
Leigh
Thanks Leigh, you're a sweetheart! I have been reviewing some of the archives when I've time and see that you've participated here almost from the inception of the forum. When you have a moment - how did you become interested in Gold? I'm curious because I meet so few people (and women in particular) with an interest in Gold. At the Gold Conference in Vancouver in June, I could count the women there on one hand. Cheers,
Waverider
Black Blade
Too Much Supply, Too Little Demand
http://www.washingtonpost.com/wp-dyn/articles/A58181-2002Aug24.html
Businesses Have Few Incentives to Expand or Hire, Economists Say

Snippit:

To understand why the U.S. economy can't seem to muster a stronger recovery, it helps to look for clues in Victorville, Calif., where 500 unused and unwanted passenger jets -- some of them brand new -- sit wingtip to wingtip in the desert.

Or in Detroit, where the Big Three continue to churn out large numbers of passenger cars that they sell at little or no profit, just to keep their factories busy.

Or in nearly every major metropolitan area, where office vacancy rates are still rising after 18 months, and have reached 25 percent in Dallas, 24 percent in Raleigh-Durham, N.C., and 18 percent in San Francisco.

But perhaps the best explanation can be found in those falling prices shoppers find for clothing, televisions, hotel rooms and cellular phone service. While the bargains are great for American consumers, they are being paid in the form of continued corporate layoffs, lackluster stock prices and a sky-high trade deficit -- in short, an economy that's having trouble building up a head of steam.

Economists refer to this phenomenon as overcapacity, which is really nothing more than too much supply chasing too little demand. And it can be found these days across a wide swath: agriculture, autos, advertising, chemicals, computer hardware and software, consulting, financial services, forest products, furniture, mining, retail, steel, textiles, telecommunications, trucking, and electric generation, just to mention a few. In most every case, it is accompanied by prices that are flat or falling.


Black Blade: It is called "Recession". In fact next month the auto sector will end the zero finance option. Telecoms continue to go tits up, and banking institutions are facing liquidity demands. More layoffs are coming and both consumer and corporate spending will continue to slow. This article is quite good and worth reading.

Black Blade
Housing Market May Have Peaked
http://www.msnbc.com/news/798215.asp?0si=-&cp1=1
Snippit:

MONDAY�S REPORTS ARE EXPECTED to show that new and existing-home sales were relatively flat in July compared with June, although they remain at near-record levels. But the economy's weak growth after years of strong housing demand makes it likely that housing activity will taper off over the next year, especially as mortgage rates gradually rise, industry experts say. "We will gradually over time see a downshift in the overall level of housing activity, which has been absolutely phenomenal," said Frank Nothaft, chief economist of mortgage giant Freddie Mac. "We're going to see it decline to only very good." Although housing activity is expected to remain at historically strong levels, the likelihood that it will trend lower next year is one reason the nation's gross domestic product is unlikely to grow at the usual brisk rates seen after a recession. Housing directly and indirectly accounts for about 20 percent of GDP, Nothaft figures.

But while high-end homes may be searching for buyers, few analysts expect any decline in average home prices, which are expected to rise more than 6 percent this year, according to Nothaft. That's a step back from the average 8 percent of the past two years, but still makes housing a better bet than the tumbling stock market. That is a good thing too, as home equity is the one component of household net worth that has continued to rise over the past two years. Don Straszheim, of Straszheim Global Advisors, sees little evidence of a housing bubble except perhaps in a few local markets. "If we would see home prices crack, and homeowners would see the value of that asset shrivel, it would be a big deal and would be extraordinarily unpleasant," he said.


Black Blade: I think a lot of people are going to be very unpleasantly surprised in coming months. When the bubble bursts, there will be a lot of people left standing without a chair when the music stops. In other words, there are likely to be a lot of people left with houses declining in value while still left to pay off huge mortgages.

Gandalf the White
Sir Zhisheng's response !
Zhisheng (8/25/02; 20:02:03MT - usagold.com msg#: 83660)
Celestial Denial
--
"Do you mean that it is NOT yourself?", says a surprised Gandalf.
==
You have caused me to lose much face!
****** I truely hope that is NOT TRUE !
Shall I ready myself for "HARI KARI" ?

Nevertheless I WILL extend to you two guesses of my own:
(1) Vielleicht die Weltkommunismus lauert dahinter?

NOTE -- Translated for Sir Mikal ---
(1) Perhaps the World Communism lurks behind it?
NICHT!! Ich denke nicht, dass "sie" sind, schmerzt das!

(2) Keneng mai jin de shi wode taitai zhu zai dalu de hao ji nian iqian li hun de lao zhangfu.
My Hong Kong contacts are checking this one out as we speak!
My report will be forthcoming directly. (IF my Crystal Ball does not get "Clouds" in this Valley.)

Ni hao ma !
<;-)
Gandalf the White
Oh, IF I could spell this ENGLISH language !
TRULY rather than "truely" !
<;-)
Waverider
Gandalf
You truuuuuly are a delight!
Blackjack
Citigroup getting shaky
http://www.smh.com.au/articles/2002/08/26/1030053013005.htmlFirstly Citigroup is huge, the seventh biggest listed US company, with a market capitalisation of $US178 billion despite having shed $US84 billion of value in the market shakeout this year.

More importantly, it is the most powerful example of a global one-stop finance shop to have emerged since 1999, when America's Glass-Steagall Act was repealed and US banks and investment banks were allowed to merge for the first time since the Great Depression.
______________
Can Citigroup withstand scrutiny?

Blackjack
Gold production fell 8% in Oz despite higher prices
http://www.smh.com.au/articles/2002/08/26/1030053012564.htmlDeclining exploration in Australia's gold industry is continuing to hurt production, with gold output dropping a further 8 per cent in the year to June 30.

The latest survey, by industry statistics group Surbiton Associates, has revealed that Australian gold production fell to 272.5 tonnes last year, despite local producers receiving the strongest Australian dollar gold prices in many years.

"Gold production has continued to fall from its peak of 318 tonnes in 1997-98," Surbiton managing director Dr Sandra Close said. "The drop in exploration expenditure over the last five years has been a key factor in this downward trend."

Paradoxically, declining gold production comes at a time where the spot price continues to hold above $US300 an ounce.
Black Blade
Real estate theory repeating itself?
http://www.nationalpost.com/financialpost/story.html?id={C38619F9-E9CC-4A94-A79A-6514DEC3A586}Equities could be tracing path of '80s housing market

Snippit:

A senior Bay Street executive recently told a story that ought to send chills up the spine of anyone who makes his living from the stock market. His name must be withheld, because his shareholders would probably kill him. Call it the real estate theory. It's a well-known tale by now. In the mid-1980s, a family in Toronto could buy an average home for about $110,000. Within a few years, a speculative frenzy drove home prices up 150%, to almost $275,000 by the end of the decade. Then the bubble popped, and house prices began a torturous dive (falling an average of 27%). It destroyed some people financially, but its greatest impact was a psychological one. By the mid-1990s, the executive recalls, almost everyone on the streets of Canada's largest city would tell you it was impossible to make money from real estate. It took 13 years for home prices to recover.

The executive's theory is that what happened in real estate is repeating itself in equities: We are witnessing the birth of a new generation of people who believe it's impossible to make money from stocks. The numbers in the 2002 TSX shareowners' study seem to indicate he is right. The study shows declining levels of stock ownership, but brings especially bad news for the mutual fund industry. Thirty-one per cent of non-shareowners say they will "definitely not" buy funds in the next three years, up from 18%. Of shareowners, a majority say they don't plan to increase their investments in funds soon. It's easy enough to see their reasons. Why pay a professional 2.5% a year to burn through your savings when you can do it yourself for free?


Black Blade: This is quite an interesting theory. Real Estate cratered, then stocks cratered, and now the real estate looks to crater yet again.


Blackjack
Oz Gold companies closed out AU$1 Billion in hedges June quarter
http://www.thewest.com.au/20020826/business/tw-business-home-sto69226.htmlAMID falling mine output, Australia's gold miners have made a concerted effort to sustain bullion prices above the crucial $US300 an ounce barrier, closing out $1 billion in hedging contracts during the June quarter.
According to Australian Gold Council data released at the weekend, hedging by Australian gold miners fell by 1.75 million ounces to 22.6 million ounces in the quarter, a fall of nearly 8 per cent over the March period, representing the sixth consecutive quarterly reduction in hedging.
___________________
Bullish news
Zhisheng
Contrition
Sir Gandalf: do not worry. It is not given to the low of caste to indulge in hari kiri. Perhaps a leap from a New York office building?

Sir Mikal: sorry about the foreign language (though I note Latin seems to appear from time to time with impunity). In future posts (if any) I shall essay to "cut the drivel and can the drool."
Blackjack
German Consumer Spending Weakening
Frankfurt, Aug. 26 (Bloomberg) -- KarstadtQuelle AG, Germany's largest department store company, said profit this year won't grow because rising unemployment is discouraging consumers from spending.

Earnings before tax, amortization and one-time costs are expected to be unchanged at 382 million euros ($370.8 million) in 2002, KarstadtQuelle said in an e-mailed statement. Sales are expected to decline by 3 percent in the full year.

``It's a pretty cautious outlook and a very difficult background,'' said John Baillie, an analyst at SG Securities with a ``strong buy'' rating on the stock. ``The company needs to keep a very tight rein on costs.''

The $380 billion German retail industry is having one of the most difficult years since World War II, Hans-Joachim Koerber, chief executive officer of Germany's No. 1 retailer Metro AG, has said. The number of people without jobs rose to a three-year high in July.
_____________
Strong Buy rating on stock???
DOWNUNDER
@SIERRA MADRE - - - YOUR EARLIER POST -- SPOT ON !
Sierra Madre (8/25/02; 19:08:53MT - usagold.com msg#: 83654)
More "Wag the Dog"
Just MVHO, but this whole "US Lawsuit by lawyers representing the families of 9-11 victims" is a slick operation to intimidate or corral the Saudis. Smells to me of more extortion like that brought to bear so skillfully on the Swiss banks, alleging Jewish money.

I don't believe anything any more, on face value. (Just show me the gold, please).
Media and show business and politics are so perfectly utilized to mold opinion. What we see on T.V. MUST be the truth, right?
This whole Lawsuit against the Saudis stinks of being an operation run by the secret agencies of the U.S. Gov't.
Cameras running all the time required, all out. Repeatedly on the news hours. That doesn't happen by accident!
Sierra
------------------------------------------------------------
Downunder - -
I only hope that those of you who actually live in the USA are protesting this blatent bullcrap by whatever means you can.Here in OZ we are getting an earful of US propoganda every time one turns on a Radio or TV. If it wasn't so sick it would be laughable.

Now "they're" even running a story that Bin Laden is hiding out in Bagdad. The height challenged Oz prime minister & his cross dressing foreign minister ( both twits) have been extremely vocal about being ready to go to war with Saddam.
They pulled their heads in recently though when Iraq told them it would cancell wheat sales & they got flak from the general populance who do NOT support the US Govt stance.

When interviewed on Radio or TV the Govt ministers play a repeditive game.They use the words "Weapons of Mass Destruction" as many times as possible --even in the one sentance! I wonder if YOUR IDIOTS do the same?
Blackjack
World Banks won't like this
SAO PAULO, Brazil, Aug 25 (Reuters) - Brazil's front-running leftist presidential candidate said he would cancel contracts with foreign firms to build deep-sea oil platforms and fighter jets abroad if elected, a local paper reported on Sunday.

"I will call the president of Petrobras (Petroleo Brasileiro SA PETR4.SA PBR.N ) and say: stop this work," Luiz Inacio Lula da Silva told a crowd in Santarem on the Amazon River, according to the daily Estado de S. Paulo.

Lula, heading the Workers Party ticket, said last week that Petrobras favored international firms to build its new P-50 oil rig platform.

He said two more planned rigs would likely be awarded to foreign firms as well, thus sending 25,000 local jobs abroad.

"It's against good sense to keep seeking money from the IMF (International Monetary Fund) and spending this amount of resources to buy platforms (abroad)," Lula was quoted as saying in Santarem. "The money could be used to generate jobs in Brazil."
Black Blade
Frosty Job Market Looks Set to Chill Further in 4th Quarter
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20020826/bs_dowjones/200208260011000005

Snippit:

The percentage of employers expecting to add jobs in the fourth quarter fell slightly from the third quarter, according to a closely watched employment survey, The Wall Street Journal reported Monday. That suggests prospects for job seekers won't improve this year, said Manpower Inc. (NYSE: MAN), the temporary-staffing agency, which has
conducted the Employment Outlook Survey for 26 years.


Black Blade: No "recovery" seen here either. Looks "grim" as far as the "Bone Pile" is concerned. And to think that last year the pundits were saying that this quarter would be a strong rebound in jobs and earnings. Hmmm�

misetich
AT&T subpoenaed in Salomon case;Investigation of changed stock rating escalates
http://www.wirelessweek.com/index.asp?layout=story&articleId=LN46KJ-RFB0-0093-V1MD-00000-00|icalID=34|ical=Business+and+FinanceSnip:

New York -- The investigation into Salomon Smith Barney and Jack Grubman, its former star telecommunications analyst, escalated Friday when AT&T said that it had received a subpoena from the New York state attorney general for documents related to Salomon's selection in April 2000 as an underwriter for one of AT&T's largest stock offerings.
The request for information appears to be a way for the attorney general, Eliot Spitzer, who is conducting a broad investigation into Wall Street research practices, to determine whether Grubman changed his rating on AT&T shares from negative to positive to win a role in the $ 10.6 billion offering of shares that tracked the company's wireless business. Grubman, who had been negative on AT&T for years, upgraded his rating in November 1999. Although AT&T had not yet formally announced its plan to issue the tracking stock, the possibility of such an offering had been widely discussed among Wall Street firms.
..........
But by issuing the subpoena to AT&T, Spitzer may also be trying to determine whether the relationship between Sanford I. Weill, the chairman of Citigroup, which is Salomon's parent, and C. Michael Armstrong, AT&T's chief executive, played any role in Grubman's 1999 change of heart on AT&T shares.

Armstrong and Weill have had a close business relationship for at least nine years. In 1993, the Primerica Corp., headed by Weill, acquired the Travelers, on whose board Armstrong sat. As chairman and chief executive of the new Travelers Group Inc., Weill retained Armstrong as a director.

Armstrong returned the favor. Less than a year after Armstrong became chairman and chief executive of AT&T in 1997, Weill joined AT&T's board. Armstrong remains a director of Citigroup, which was formed when Travelers merged with Citicorp in 1998.

People close to the two men said Friday that Armstrong did not explicitly ask Weill to press Grubman to change his recommendation. But, these people said, Armstrong made clear to Weill his frustration and disappointment with Grubman's negative perspective on AT&T.
***********
Misetich

Accountants, lawyers, government officials and corporate executives all in bed with one ANOTHER- have managed to inflict irreparable damage to the US and world economy and financial system

Got gold?
misetich
United States: The Refi Boom - How Much Support for the Consumer?In my view, cautious consumers are using the proceeds from mortgage refinancing to boost saving and pay off higher-cost credit-card debt, but the refi cushion is a factor that makes consumer retrenchment unlikely.
http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor1Snip:
Richard Berner (New York)

The real refi story continues to center on rising home prices that create household wealth, and on so-called "cash-out" refis that enable consumers to monetize that equity buildup to sustain spending. So the real questions for consumer spending are not related to the cash flow benefits from refinancing activity alone. Rather, they are first, whether home prices will continue to rise and partly offset the losses sustained in the bear equity market of the past two and a half years, and second, whether consumers will turn more cautious in the face of economic uncertainty and further step up saving. In my view, home price increases are slowing significantly, thus limiting that wealth offset. But while consumers have turned more cautious, the extra cash from refis and still-growing real wage income suggests that retrenchment is unlikely.
...............
Ultimately, the impact of this refi boom on spending will hinge on consumer choices as much as on consumer wherewithal. Notwithstanding the July surge in vehicle sales, I believe that current spending behavior evinces consumer caution. Notably, discretionary spending on other big-ticket durables, such as furniture, appliances and electronic gear, has slowed. Recent reports from consumer electronics retailers have been especially soft, indicating a classic pattern of consumer restraint. In my view, cautious consumers are using the proceeds from mortgage refinancing to boost saving and pay off higher-cost credit-card debt, but the refi cushion is a factor that makes consumer retrenchment unlikely.
*********
Misetich
Slowing consumer spending and/or increased personal savings does not bode well for the US economy- we haven't seen the worse of the BIG BAD STOCK MARKET BEAR

Got gold?
misetich
Global: A Capital Embargo from the Middle East?
http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor1Snip:

Joe Quinlan/Rebecca McCaughrin (New York)

Because the US needs to import over $1 billion a day in foreign capital to fund its current account deficit, news that investors in Saudi Arabia were poised to pull billions of dollars out of the US has not gone over well. The chief fear is that if Middle East funds exit the US, the US dollar and other US financial assets will come under renewed pressure and compromise the US's ability to attract foreign capital.

We are sympathetic to these views. With US net portfolio inflows down nearly 30% in the first five months of this year from the same period a year ago, the last thing the US needs is for Saudi Arabia and other Middle East investors to pull capital from the US or place an embargo on US-bound flows. Nonetheless, even in that worst case scenario, we believe that a capital embargo and the ensuing effects on the US economy are not the same as an oil embargo.

Saudi Arabia and OPEC no doubt play a critical role in the global oil market, with OPEC accounting for nearly 41% of global oil production in 2001. In terms of oil reserves, the Middle East accounts for nearly two-thirds of the global total. Accounting for nearly 12% of world oil production last year, Saudi Arabia is OPEC's swing producer and can single-handedly move world oil prices. However, neither Saudi Arabia nor OPEC can directly move global capital markets the way they can move the oil market. OPEC's clout in global capital markets is minimized by the fact that oil-exporting nations accounted for just over 6% of global international reserves in May (the last month of available data). In effect, global reserves represent the pool of capital upon which the US depends for its own capital needs.
..............
Presently, Asia is the largest holder of international reserves, with Asia ex Japan alone accounting for nearly 40% of world reserves in 2001. Japan accounted for another 19%. Thus, when it comes to funding the US current account deficit and America's shortfall, it's more about recycling "tech-dollars," to borrow a phrase from our colleague Stephen Jen, than petrodollars.
..............
As a footnote, a Saudi editorial this week stated that roughly 60% ($450 billion) of the $750 billion Saudi's have invested abroad is invested in the US. Of the US total, roughly $160 billion is invested in US capital markets, with the remaining $290 billion mainly held in property. Assuming those figures are accurate, Saudi holdings accounted for just 4.9% of total foreign holdings of US assets at the end of 2001, with a significant share relatively illiquid.

Worst Case Scenario: Transferring Asia's Savings from the US to the Middle East

It is the steady deterioration in US-Saudi relations that worries us most over the near-term, since a rupture in relations could be a trigger for rising Mid-East tensions and higher world oil prices. Higher oil prices, in turn, would no doubt crimp growth in the US and fuel inflationary pressures. More importantly, the energy-dependent nations of developing Asia would be among the biggest losers of higher oil prices � the same nations the US is currently beholden to for capital. A higher import oil bill in Asia would reduce the region's reserves and redirect flows away from the US and toward the Middle East. This transfer of capital would have a direct impact on US capital flows and the dollar.
************
Misetich
The article writers make no mention of OPEC and Europe re: Oil priced in Euros - Asia is US consumer market dependent
and their economies are tied to those of the US and the US economy has stalled and in the negative for the last several quarters (except one)
The Asian "reserve currencies portfolio" have taken a severe beating and we haven't seen the last of this erosion.
Better alternatives exist than the overvalued US $

Got gold?


Black Blade
Israeli army under fire for looting
http://famulus.msnbc.com/FamulusIntl/reuters08-25-053414.asp?reg=MIDEAST

Snippit:

JERUSALEM, Aug. 25 � The Israeli army came under fire on Sunday after Israel Radio broadcast an investigative report which found that the looting of Palestinian property by Israeli troops was more widespread than previously thought. Lieutenant Colonel Ilan Katz, the deputy chief military prosecutor, told Israel Radio after its report was broadcast that seven soldiers had been convicted for looting offences and five others had been indicted and were awaiting trial. The army spokesman's office said its military police were investigating 35 reports of looting by Israeli troops. ''Danny,'' a recently discharged soldier interviewed under an assumed name, told Israel Radio that troops stole from Palestinian homes during the six-week-long sweep for militants launched after suicide bombings killed scores of Israelis. ''During each search, the head of the family was meant to accompany the soldiers to every room. What we would do is take the man to one room as the soldiers searched other rooms, and they would pocket things while out of his sight,'' he said. ''When it came to commanding officers, some knew about it and some were involved. When it came to squad leaders, all of them knew and were involved,'' Danny said.

Black Blade: Sounds like several US police officers I used to know. Including some narcotics officers in San Jose, CA in the 1970's and 1980's. Unfortunately it killed my interest in pursuing law enforcement as a career choice. Hmmm�

misetich
Ann-Louise Hittle of Cambridge Energy on oil and OPEC
http://www.boston.com/dailyglobe2/237/business/Ann_Louise_Hittle_of_Cambridge_Energy_on_oil_and_OPEC+.shtmlSnip:

Q. How much oil does the United States consume?

A. Depending on the season, about 19 million to 20 million barrels a day. Roughly half the oil we use is imported. About 5 million barrels a day comes from OPEC. The United States uses about 25 percent of the world's oil. Global consumption now averages about 77 million barrels a day.


Q. Why are prices going up?

A. There are several reasons. There's a recovery in demand compared to last year. OPEC is restraining production and holding spare capacity off the market in order to support prices. OPEC's production this year is down roughly 2 million barrels a day, versus 2001. And there is fear in the market that a US offensive against the Saddam Hussein regime could mean a loss of Iraq's oil. The market psychology is focused on a potential shortage, and that drives up prices.


Q. Did oil prices rise sharply during the Persian Gulf War?

A. They rose before the war. They actually collapsed a few hours after the war started. In anticipation of the offensive, prices went up on fears that Iraq would attack Saudi Arabia's oil production facilities. Remember all the talk there was about how powerful the Iraqi army was? Then people were shocked when they saw how quickly the Iraqi army collapsed. Given what's at stake, the oil market tends to anticipate the worst.

Q. Non-OPEC nations such as Russia are producing more oil. Why can't the United States turn to these sources and reduce its dependency on OPEC?

A. None of the non-OPEC nations has excess capacity. Only OPEC does.
...................
Misetich

As the price of oil rises the global economies growth decelates - as spending shifts away from the economy to pay increased prices -
Lets stay on this TRAIL for a little while longer

Got gold?
Knallgold
Dubai Gold Market: 'City of Gold' retains its glitter
http://www.gulfnews.com/Articles/specialreports.asp?ArticleID=61380For ages Dubai has been known as the 'City of Gold', where people from all corners of the globe could buy a wide variety of jewellery with confidence and trust. Has this consumer confidence been shaken following reports that 56 retailers were fined for violating carat specifications? Latheef Farook taps into an explosive issue...
Black Blade
PMs Rocket Higher
http://www.kitco.com/market/
Gold up a $1.10, Silver up 6 cents, Platinum up $2.00, and Palladium up $21.00 an ounce. Somethings up all right.

- Black Blade
MK
Black Blade. . .
I think the gold market must take into account that Saudi royalty is unlikely to leave capital in the United States where it can be easily garnished by the U.S. courts. Why should the gold market (particularly the shorts) be concerned? One would think that gold might be one of the better options for the Saudis, since they can take delivery anywhere in the world and hold without an attached promise to perform and beyond the clutches of the lawyers. The banks in the United States will cave without a second thought in this tense international environment, so we might see the "gold strategy" unfold. Unless the NY lawyers are throttled, look for gold demand to jump out of the box as big oil money looks for a place to go -- the euro, Swissie and Brit pound will be affected to a lesser degree (unless promises beyond the pale are given). It would be foolish for the big banks to believe that Saudi money will stay put under the circumstances. We all know the legal suit game, and that attorneys go for the deep pockets. Move the money, make it difficult for the plaintiffs, and they might be forced to give up the legal action. That would be a good strategy for the Saudis and bodes well for investment gold demand.

Waverider
A bounty of supply in America is paid for with lost jobs
http://www.iht.com/articles/68756.htmlSnippit:
"To understand why the U.S. economy cannot seem to muster a stronger recovery, it helps to look for clues in Victorville, California, where 500 unused and unwanted passenger jets - some of them brand new - sit wing tip to wing tip in the desert. Or in Detroit, where the Big Three continue to churn out large numbers of passenger cars that they sell at little or no profit just to keep their factories busy. Or in nearly every major metropolitan area, where office vacancy rates are still rising after 18 months and have reached 25 percent in Dallas and 18 percent in San Francisco.

Economists refer to this phenomenon as overcapacity, which is really nothing more than too much supply chasing too little demand. And it can be found these days across a wide swath: agriculture, autos, computer hardware and software, financial services, steel and telecommunications, just to mention a few. In almost every case, it is accompanied by prices that are flat or falling. Overcapacity is a feature of every recession. A slowdown in consumer spending and a decline in business investment suddenly leave too many companies with too many workers, underutilized plants and underperforming stores. In most cases, it is only after most of that excess is cut back, and supply and demand get back into some rough balance, that businesses begin hiring and investing again, laying the foundation for another period of economic expansion. This time, however, that process is turning out to be longer and more drawn out than in the past, making for a slower and weaker recovery than forecasters, executives and policymakers had expected."

Waverider: Good summary article from the IHT, but nothing that hasn't already been discussed here before.
Boxman
Another bubble, this one is an automotive bubble
http://www.nationalpost.com/financialpost/story.html?id={9E36BC64-9F19-4497-AE6C-4872E514A5EF}Snippet:

"The North American auto sector has seen sales grow so strongly, and for so long, that an "automotive bubble" has developed that could devastate the industry if it burst suddenly, a noted automotive analysts says."



Boxman: I just returned from vacation in the Berkshire Mountains, in upstate NY. If anyone is looking for a fall vacation, and has not made their decision, I would recommend this area. This is where I grew up, so I am biased, but it is extremely beautiful, with a multitude of crystal clear lakes, numerous mountain ranges (which should be wonderful if you can catch the fall foliage) and cool dry temperatures.

It looks like it is going to take a few days to read the posts from the past week and a half, however, I will perservere.
USAGOLD / Centennial Precious Metals, Inc.
Hard assets... Easy access!
http://www.usagold.com/ProductsPage.html

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sector
Record $50bn is pulled out of US equity funds
This monthly number will probably increase as the year progresses and folks continue to get hosed by Wall StreetBy Julie Earle in New York [FT.COM]
Published: August 25 2002 21:57 | Last Updated: August 25 2002 21:57

US investors reached breaking point last month and pulled a record $50bn out of US equity funds - the largest monthly net outflow in history, early data to be released by fund trackers this week will confirm.

The July exodus, amid a slew of corporate fraud scandals and bankruptcies, has raised concerns that disillusioned equity fund investors may stay on the sidelines.

The last time investors pulled out of equity funds at a record rate was in September after the terrorist attacks in New York and Washington. That month, investors pulled $30bn out of equity funds. In June, as the stock market sank lower, investors withdrew $18bn from equity funds.

Lipper, the fund tracker, said preliminary data showed equity fund outflows in July were "easily $45bn and as much as $50bn". The final data will be released today.

"There was a lot of pain in July and people couldn't stand it any more," said Don Cassidy, a senior research analyst at Lipper.

Mr Cassidy said "the fear factor", possibly after 401(k)pension plan investors opened their mid-year statements showing big losses, led to indiscriminate selling across all equity funds.

Many people were heavily invested in companies such as WorldCom, the troubled telecommunications group, in their plans and have lost their life savings, he said.

Indeed, as at May 2001 more than half of the estimated 105.5m US households owned stock and bond mutual funds, according to the Investment Company Institute, the mutual fund trade group.

The ICI estimates that at the low point in September, the value of US equity fund assets slumped 23 per cent to $2,600bn from December 2000.

Strategic Insight, a New York-based mutual fund research company, has confirmed that investors took $50bn from equity stock funds in July.

Avi Nachmany, director of research at Strategic Insight, said the $50bn outflow was only 1.6 per cent of the stock industry's fund assets. "July was a frightening month," he said. "Once normalcy returns, the historical patterns of redemptions suggest these withdrawals are shortlived."

Mr Nachmany said portfolio managers were serving as a buffer to selling pressure by investors.

This month Merrill Lynch, combining data from the ICI and data trackers TrimTabs and AMG Data Services warned that July equity fund outflows could be as much as $47bn.

Overall in July, investors sought refuge in bond funds and money market funds, adding a net $30bn and $60bn to each, respectively, according to Strategic Insight.

The ICI is due to release its official July data this week.
Waverider
Spot
Spot is frisky this morning - up $4.00 at the moment :)
WAC (Wide Awake Club)
@MK - Saudi Funds
Surely if the Saudis were to move funds out of US assets, they would presumably want to do this quietly. I have seen figures as high as $900 billion of Saudi funds in the US. Let us assume they only move 30% of this. If this is a game of chicken, how does Chicken Lickin quietly move $300 billion from the prying eyes of Foxy Loxy? Furthermore, what do they move it to. A $100 billion into gold would wreak havoc at this moment in time. �/Yen??

I think the Saudis are in between the proverbial rock and a hard place.
a nation of one
DOWNUNDER (8/26/02; 03:26:02MT - usagold.com msg#: 83686)
I highly resent the implication of your statements. The people in our government (the US) are not 'idiots.' They are crooks.
a nation of one
revision to previous message
Sorry. I should have said, "...They are not merely idiots. They are crooks."
Socrates964
(No Subject)
My futures broker just sent me this. Mass crunching sound from South of the Equator as Brazilian jaws drop - most notably among the business �lite.

If anything Cardoso is giving up on Serra and tacitly supporting Lula (front cover of IstoE magazine) - so presumably he is part of the Communist conspiracy too.

Ciro Gomes, who is backed by all the traditional oligarchs of the Northeast is described in the article as a 'communist'. Sort of like describing Al Gore as a communist.

If th WP wants to promote an anti-American nationalist backlash down here, this is a pretty good way of going about it. Rich Brazilians are going to love the idea that their assets in Florida can be seized on grounds of terrorism.

Voc� tem seu ouro? (Portuguese for 'got gold')

August 7, 2002

Blocking a new axis of evil

Constantine C. Menges

A new terrorist and nuclear weapons/ballistic missile threat may well come from an axis including Cuba's Fidel Castro, the Chavez regime in Venezuela and a newly elected radical president of Brazil, all with links to Iraq, Iran and China. Visiting Iran last year. Mr. Castro said: "Iran and Cuba can bring America to its knees," while Chavez expressed his admiration for Saddam Hussein during a visit to Iraq.
The new axis is still preventable, but if the pro-Castro candidate is elected president of Brazil, the results could include a radical regime in Brazil re-establishing its nuclear weapon and ballistic missile programs, developing close links to state sponsors of terrorism such as Cuba, Iraq and Iran, and participating in the destabilization of fragile neighboring democracies. This could lead to 300 million people in six countries coming under the control of radical anti-U.S. regimes and the possibility that thousands of newly indoctrinated terrorists might try to attack the United States from Latin America. Yet, the administration in Washington seems to be paying little attention.
Brazilians will hold presidential elections in October, and if current polling is any guide the winner could be a pro-Castro radical with extensive ties to international terrorism. His name is Luis Inacio da Silva, the presidential candidate of the Workers Party who is currently at about 40 percent in the polls. The Communist candidate is second with 25 percent and the pro-democratic contender is at about 14 percent.
Mr. da Silva makes no secret of his sympathies. He has been an ally of Mr. Castro for more than 25 years. With Mr. Castro's support, Mr.da Silva founded the Sao Paulo Forum in 1990 as an annual meeting of communist and other radical terrorist and political organizations from Latin America, Europe and the Middle East. This has been used to coordinate and plan terrorist and political activities around the world and against the United States. The last meeting was held in Havana, Cuba in December 2001. It involved terrorists from Latin America, Europe and the Middle East, and sharply condemned the Bush administration and its actions against international terrorism.
Like Mr. Castro, Mr. da Silva blames the United States and "neo-liberalism" for all the real social and economic problems still facing Brazil and Latin America. Mr. Da Silva has called the Free Trade Area of the Americas a plot by the United States to "annex" Brazil, and he has said that the international lenders who seek repayment of their $250 billion in loans are "economic terrorists." He has also said that those who are moving their money out of Brazil because they fear his regime are "economic terrorists." This gives a hint about the kind of "war against terrorism" his regime will conduct.
Brazil is a vast, richly endowed country, nearly the size of the United States with a population of about 180 million and the world's eighth largest economy (with a GDP of more than $1.1 trillion). It could soon become one of the world's nuclear armed powers as well. Between 1965 and 1994, the military actively worked to develop nuclear weapons, it successfully designed two atomic bombs and was reportedly on the verge of testing one nuclear device when a newly elected democratic government and a Brazilian congressional investigation caused the program to be shut down.
That investigation revealed, however, that the military had sold eight tons of uranium to Iraq in 1981. It is also reported that after Brazil's successful ballistic missile program was ended, the general and 24 of the scientists working on it went to work for Iraq. There are reports that with financing from Iraq, a nuclear weapons capability has been covertly maintained contrary to directives from the civilian democratic leaders.
Mr. da Silva has said Brazil should have nuclear weapons and move closer to China, which has been actively courting the Brazilian military. China has sold Brazil enriched uranium and has invested in the Brazilian aerospace industry, resulting in a joint imagery/reconnaissance satellite.
Brazil shares common borders with 10 other countries in South America. This would help da Silva to emulate � as he has said he would � the foreign policy of the pro-Castro and pro-Iraq Chavez regime in Venezuela, which has provided support to the communist narco-terrorist FARC in Colombia as well as other anti-democratic groups in other South American countries. Hugo Chavez worked with Mr. Castro to temporarily destabilize the fragile democracy in Ecuador two years ago. Now both support the radical socialist leader of the cocaine growers, Evo Morales, who hopes to become president of Bolivia this August.
Along with helping the communist guerrillas take power in the embattled democracy in Colombia, a da Silva regime in Brazil would be well situated to aide communists, narco-terrorists and other anti-democratic groups in destabilizing the fragile democracies of Bolivia, Ecuador and Peru, as well as to exploit the deep economic crisis in Argentina and Paraguay.
Further, a da Silva regime is likely to default on its debt, causing a sharp economic downturn in all of Latin America, thereby increasing the vulnerability of its democracies. This could also trigger a second phase of economic downturn in the United Staes as export markets contracted.
A Castro-Chavez-da Silva axis would mean linking 43 years of Fidel Castro's political warfare against the United States with the oil wealth of Venezuela and the nuclear weapons/ ballistic missile and economic potential of Brazil.
Come our own elections in November 2004, Americans may ask: Who lost South America? The United States was politically passive during the Clinton administration, when it ignored the pleas of Venezuela's democratic leaders for help in opposing the anti-constitutional and illegal actions of Mr. Chavez and also ignored his public alliances with state sponsors of terrorism. Why can't the Bush administration act before 20 years of democratic gains in Latin America were allowed to be reversed? Why can't anything be done before a vast new southern flank is opened up in the terrorist threat and our nation menaced by one more radical anti-American regime intent on acquiring nuclear weapons and ballistic missiles?
This disaster for U.S. national security and for the people of Latin America must and can be averted if our policy makers act quickly and decisively, but they must do so now. Timely political attention and actions by the United States and other democracies should include encouragement for the pro-democratic parties in Brazil to unify behind an honest, capable political leader who can represent the hopes of the majority of Brazilians for genuine democracy and who has the resources to mount an effective national campaign.

Constantine C. Menges, a senior fellow with the Hudson Institute, is a former National Security Council member.

Gandalf the White
MORE on Sir Zhisheng's response !
Continued --
Gandalf the White (8/25/02; 23:15:51MT - usagold.com msg#: 83677)
Sir Zhisheng's response !
Zhisheng (8/25/02; 20:02:03MT - usagold.com msg#: 83660)
Celestial Denial

Nevertheless I WILL extend to you two guesses of my own:
("SECOND GUESS")

NOTE -- Translated for Sir Mikal ---
(2) Keneng mai jin de shi wode taitai zhu zai dalu de hao ji nian iqian li hun de lao zhangfu.
---
"Possible the one who bought the Gold, was his wife's ex-husband (who is now in Mainland)"
===
Possible, BUT not likely ! The "WIFE" would be a better guess. <;-)
===

All us Goldhearts hope that "she" and YOU, will continue the buying and the CABAL will soon "see the light coming from the far end of the Tunnel is not just daylight, BUT an "GOLDEN EXPRESS TRAIN" headed directly toward them".

You and "My man in HK" should get together and TALK.
BTW, I never go above the first floor !
<;-)

sector
10,000 fewer flights take off, land at Kansai International Airport
Yomiuri Shimbun The number of takeoffs and landings at Kansai Airport in the year following the Sept. 11 terrorist attacks on the United States is expected to decline 10,000 from the previous year to about 115,000, sources said Saturday.

According to the sources, the operations figure for 2001-02 will be similar to that of the airport's second year of operation from September 1995 to August 1996. The decrease is attributed to the slump in international travel since the attacks.

It is the first time since the attacks that sources have revealed the number of flights to and from the airport for the current year. It is likely the figures will fuel debate over the opening of a second runway at the airport.

The airport reported 95,600 takeoffs and landings in its first year from September 1994. The number increased by 17.6 percent to 112,400 the following year and rose to more than 120,000 in the third year.

The number of flights decreased in the fifth year by 3.2 percent on a year-on-year basis and peaked at 125,700 in its seventh year.

The airport has been hit hard by the drop in demand for international travel following the terrorist attracts, and also by the opening in April of the second runway at Narita Airport in Chiba Prefecture.

Since April, the number of incoming and outgoing flights has dropped 10 percent each month from the same period a year earlier--the sharpest decline in the number of flights the airport has experienced.

According to the sources, the number likely will drop to about 110,000 between April 2002 and March 2003, further worsening the airport's finances.

In June, the Construction and Transport Ministry revised downward its estimation of the number of incoming and outgoing flights at the airport in fiscal 2007--when a second runway is scheduled to open--from 160,000 a year to 136,000.

Ministry officials said in an interim report issued earlier this month that the second runway project would be carried out as scheduled, but added that the number of flights at the airport and financial standing of the airport company should be monitored carefully.
+++++++++++++++++++++++++++++++++++
Things are just rosey in Japan.

That airport is something to behold. It floats. HDTVs everywhere. Not a crack or wrinkle of paint the morning of the Kobe earthquake [When I hi-tailed it out]. Come to think of it, my hotel didn't fall down either. I was on the 16th floor. One broken chandelier crystal. Six miles from the epicenter. Kobe looked like a B-29 raid had just hit. Fires everywhere.

Oh well! Let's play "Pretend Economic Recovery"...I get to be Alan Greenspan with tons of paper to... "Issue". You get to be the sucker who imagines there's no inflation OR deflation. It's sooo much fun.
Carl H
@Boilermaker: NG
I have not done that much looking at the NG pipelines. The reason for this is that in Canada they are a rate regulated business and I believe that the same is true here in the states as well. (Please correct me if that assumption is wrong.) Hence, the price would have to be "right" in order to make them worth investing in. My cursory evaluation of Trans-Canada showed it was not close to the "right" price.

Regarding NG by manufacturing, it is my understanding that a lot of this was shut down during the last price spike and the NG contracts sold off. What will happen is that the manufacturing will simply move to where there is NG and we will simply import the finished products instead. It is much easier to import finished aluminum or fertilizer than LNG. Of course, such decisions are, to a large extent, predicated on a strong dollar��.

Regarding the generation of electricity using NG � I believe that the projections on this point are worthless. First, as the economy continues to tank, the demand for electricity will not expand as fast as expected. Second, because of the lack of exploratory drilling, the price of NG will rise at some point and will make the people with plans for NG power plants reconsider (and probably cancel a lot of their orders for the equipment).

I'll also get on my soapbox for a moment � it is stupidity to use NG for generating electricity. NG has many other uses (home heating, cooking, chemical stock for fertilizer production, etc.) for which there are no good substitutes. For now, we should use nuclear and coal for electricity because they are not that useful for other purposes. Soapbox mode off.

MK: Sorry this is getting a bit off topic � Please provide Boilermaker my e-mail address so we can take this offline.

MK
Wide Awake. . .
NEED not GREED defines the course of action -- and NEED ultimately is the stronger motivator between the two. But you also have to look at from their point of view. The dominant motivation will be capital survival, store of value and so on. Is gold at $600, $800, $1000 a better bet than remaining a sitting duck in a New York bank? This is why I say that the shorts had better take notice. Once you break the bond that ties, things can unravel rather quickly -- let that serve as warning to those short the gold market (as well as those who sold forward cheap).
Zhisheng
Abject Mortification
A thousand pardons Good Gandalf! I mistakenly took your reference to hari kiri as kind intention to prevent commission of such by dishonorable self.


MK
Wide Awake. . .Add on --
Two problems with the yen (as a safe haven):

1. It is difficult to consider a currency a safe haven when its issuer is interested in devaluing it on a consistent basis against its trading partners' currencies. That's not crucial in this scenario, but one thing needs to be weighed against another, and there are better choices than the yen.

2. I believe that under international law yen deposits could be attached as well under bilateral trade agreements, (when terrorism is at issue), but perhaps one of the fine legal minds seated at this table could offer more reliable insight.
contrarian
nonsense from cbsmarketwatch.com
http://cbs.marketwatch.com/news/story.asp?guid=%7B0E89956C%2DA7FD%2D4F13%2DA90C%2DDF4C3B7C9730%7D&siteid=mktwI just saw this on cbsmarketwatch.com. Can you believe this nonsense! I'll bet it's possible to refute almost every point he makes!
here it is:


10 reasons to be bullish

By Marshall Loeb, CBS.MarketWatch.com
Last Update: 12:04 AM ET Aug. 26, 2002

SAN FRANCISCO (CBS.MW) -- Just about every investor is wondering when the stock market will touch bottom, but here is one professional who thinks she may know the answer down to the precise day.

The good news -- if she is right -- is that the worst is already behind us. Indeed, she figures that the market hit its bottom on Tuesday, July 23rd, when both the Dow Jones Industrials and the Standard & Poor's 500 Index plunged below their September 21 lows. Since then the Dow has come back 15 percent and the S&P 18 percent. (The Nasdaq, which reached its recent low on August 5, has since climbed 14 percent.)

"July 23 could turn out to be a very important day." So says Dr. Lynn Reaser, chief economist and senior market strategist of Banc of America Capital Management, which manages some $300 billion in assets for institutions and individuals.

Reaser backs up her conclusion with 10 reasons why the market should rise:

Interest rates obviously have come down dramatically, and that creates a much better outlook for stocks than before.
Beyond interest rates, the Federal Reserve is pursuing a very accommodative monetary policy. The nation's money supply, the so-called M2, in the past year has been growing at a fast annual rate of 8 percent, Reaser notes. This should make it relatively easy for business people to borrow money to create, build, expand and hire.
Using any economic model that factors in the outlook for profits, the current level of interest rates and the trend toward rising productivity in the U.S. leads to the conclusion that the stock market is not overvalued, but is generally undervalued.
Spurred by record low mortgage rates, large numbers of homeowners continue to refinance their houses. This reduces the amount of mortgage interest they have to pay every month and gives them more money to spend, bolstering the economy and the market.
There has been a decline lately in negative news. Reaser notes that there have been no massive new revelations of corporate fraud or huge accounting scandals.
Thanks to remarkably low inflation, wages are rising faster than prices. This gives consumers more incentive -- and wherewithal -- to continue buying at a strong rate.
The decline in the value of the dollar has helped many U.S. companies increase their export sales abroad.
The job market is at least stabilizing, and the worst of the layoffs are behind us. (But the unemployment rate is a lagging indicator, and it will be a while before the current 5.9 percent rate starts to decline.)
In the stock market, both the Dow and the S&P have shown a gain for five weeks straight now, despite Friday's decline. And many companies have announced buy-back programs for their own stock, including Genentech (DNA: news, chart, profile), Procter & Gamble (PG: news, chart, profile), Kellogg (K: news, chart, profile), and Bank One (ONE: news, chart, profile), among others. This additional demand should help buoy the stock and serve as a sign that the company's top management believes its shares are a sound investment.
"Profits," Reaser says, "have already turned the corner and should continue to advance in the coming year, following last year's deep declines. Although few companies will be able to raise prices significantly, productivity gains will help profit margins while a stronger economy will gradually help sales volumes."
Given all this, Reaser believes the market should have a fairly sharp upturn, showing perhaps a double-digit gain between now and Christmas. But for the longer term, say five to 10 years, she expects annual gains to average 7 to 8 percent, in line with her anticipated increases in corporate profits.

In this environment, she thinks it reasonable for people who are not quite yet ready for retirement to allocate about 60 percent of their portfolio to stocks, with an emphasis on quality.

.
.
.
RobotGuy
Howdy Folks!
Just wanted to drop by and say thank-you to USAGOLD/Centennial precious metals. I received a silver one ounce maple leaf in the mail on Friday from the "Dark Vision" contest. The maple sits on my stereo cabinet where it's relative once sat (I will not be giving this one away!)

Hope all is well! I've been working on a project (temporary freelance style) that has been occupying much of my time. I guess you could say that I am partially employed at the moment. This is good,.. as money is often required for survival!!

Cheers!

RobotGuy.
Sierra Madre
Fund outflows...again
Well, I see from Sector's post that Strategic Insight says that the outflow from equity mutual funds in July was about 1.6% of equity mutual fund assets.

I recall that equity mutual funds (EMFs)were holding, not long ago, about 4.6% or so of cash. Maybe 5%. So that's 5% of assets in cash.

The outflow of July would leave them with - 3.4% of assets in cash.

A couple more months like July, and the cash will be exhausted. But way before that happens, the EMFs will have to be SELLING assets to provide cash for redemptions. That's the moment when the big meltdown threatens, for who will be the buyers in a declining market? There will be NO BUYERS, in practical terms. So, The FED will have to buy. If it does so, it will monetize vast sums, turning stocks into cash. (This in fact may already be happening).

If the FED does not intervene, either buying the stocks or using them as collateral for huge loans to the EMFs, then the market will plunge into the abyss.

Not a pretty picture. You can fill in the dots.

Sierra
Cage Rattler
Saudi's and their funds
The point that many are missing is the issue of custodianship. They are not that particularly worried whether held in dollars, euros, etc. but rather WHERE the funds are located. And that is direct from some sources out of the mid-East.
Sierra Madre
Misetich: your post on a Capital Embargo from the M.E.

How about giving a "Cap'tal Embargo from the Middle East" a little spin, and turning it into "Financial Terrorism"?
Don't you like the sound of it..."Financial Terrorism"?
Sounds doable to me.

Sierra
Mr Gresham
Lease rates
I remember reading somewhere (Mises?) about the basic interest rate of 3% on lent capital as the classic requirement for the replacement of deferred consumption over a human lifetime. In other words, since you're going to die, and someone else wants to enjoy your saved money now, you're going to ask them to at least pay a reasonable price for the privilege of giving it back to you closer to the time you depart, when you may even possibly need it less than you do now, or perhaps be able to enjoy it less. It's a guesswork that balances off the variables of health, war & peace, desire, family, business prosperity, etc. etc. over the span of decades. That reasonable price, over the centuries, I've read, has hovered around 3%.

Long-term Treasury rates have in recent years priced in this rate, plus perhaps a 2% inflation rate. They have not priced in any increase in inflation rates (or gov default possibility) so IMO they are priced "to perfection" now.

So -- HOW can a lease rate -- FOR ANYTHING!!! -- be 1%, or under, without it being a clear indicia of non-economic subsidy or dealing (self- or related-party), of attempt at price manipulation, or just plain and pure STUPIDITY?

At 0%, someone is just holding something for you, giving you nothing for it. Maybe a bank robbing partner who would hold your share of the loot till you got out of prison might be doing you a favor with such a 0% offer -- ;) -- but it's not a deal you would make under normal business circumstances. Why -- you might as well just put your money into certain unmentionable metallic substances and secret it in some nearby geological crevice... (They ARE doing with the Dollar these days a pretty credible impersonation of the "worst" characteristics -- "nyahh nyahhh, it doesn't even pay any INTEREST!" -- of that ol' barbaric relic, aren't they? ;)

At 1%, it's pretty much the same thing. The equation of life's passing is running against you, pretty badly.

IF I could borrow gold at 1%, (not to sell, but to hold for insurance) I might do it. Because then I'd be protected against some elements of economic and societal collapse that might happen while I'm holding it. I can eat now in a famine -- or bribe my way out of torture prisons or across borders -- and worry about paying it back to the CB on December 31, can't I? (And they'd probably just let me roll it over, for another 1%. Cheap insurance.)

In fact, it would be stupid to sell it, except under those conditions, and especially stupid to sell it for mere Dollars, wouldn't it?

Except under two conditions: I had a medical prognosis of a short time to live -- then who cares if the CB sends its bill and it gets "Returned to Sender: Deceased"? Or, I anticipated my "Economic Decease" known as bankruptcy. And these days, in the absence of debtors' prisons, it just means I can't borrow money for awhile, but I can go on working at a new job or business. Not a bad bet, borrowing gold, if either of those two scenarios are on the horizon. 1% -- ver-r-r-r-y tempting!

(ST Dollar interest rates now can be 1.75% only under Fed manipulation, but what individuals would offer their real savings at this rate, without such "leadership" to compete with? Last year's drop in rates from 6% was one of the most profound Panic Alarms in Fed history! Any calm we observe around us now must be before a Storm, unless Savers have been truly lulled into "giving it all up for the Greater Good -- snarf, snarf!!! ;))

Time will out the larger story behind this, but I still find it baffling at this late date that the Euro CBs would participate in lending (losing) their gold for such paltry amounts. Unless, indeed, they were as panicked as the Fed about the Dollar's early demise. Unless, it was the Fed (via Bundesbank?) or IMF with the two large US-dominated gold hoards, writing the leases? Unless it's a total self-dealing manip by the GS's & JPMs of the system, realizing nobody but a few kooks like us would be watching while they (their managing partners, anyway) backed up the trucks and escaped with the loot.

The Euro CBs must be watching a very long time sweep on the horizon, and budgeting out a small portion of their overall (12,000? 14,000? tonnes) for the entrenchment period of the Euro. In a global downturn, flight to the Dollar is still the knee-jerk reaction, and they have yet to earn that "trusted" franchise, held hostage somewhat by the blitzkrieg timing of the Dollar's reckless progenitors. ("Nicht zo schnell!" "Pas aussi bientot!" "Non cosi presto!" Translation: "We'd like to have our jobs here at ECB/whereverCB awhile before we have to deal with some REAL crisis management!")

Oh well; such is life! Could be worse (I'm immersed in Prechter's book this week), and it probably will be! Off to the treadmill -- really, this time -- then Back to earning some "Pesos" and pay some bills...
Socrates964
Brazil
The mad anti-Brazilian article I posted by Menges actually appeared in the Washington Times and not the Post.
TownCrier
Contrarian, Jim Puplava provides good balance against cbsMarketWatch bullishness
http://www.usagold.com/gildedopinion/puplava/20020726.htmlFrom the recent Storm Watch commentary "Keep it Simple":

"...systemic risk exists everywhere. The world's monetary system based on the dollar is in the process of unraveling. The expansion of monetary policy in the 1990's and its concomitant explosion of credit fed into the financial system creating multiple bubbles in the economy and the financial system.

"The Fed's easy money policies created a massive credit bubble that inflated everything it touched....

"Now we are dealing with the after-effects. All of that debt will have to be cleansed from the financial system either voluntary or involuntary through bankruptcy. What you are now seeing is the unraveling of this credit. It began to unfold first in the stock market, which was the main recipient of much of the credit expansion of the 1990's. Inflation has two forms: money can go into things or it can go into paper." ---end excerpt---

Where I would depart from Jim a bit is to suggest that there need not necessarily be a purging of the system through (deflationary) bankruptcy as he suggests. Experience being what it is, it is much more likely that the "cleansing" workout will come in the form of hyperlubricant poured on the machine -- inflation and the monetization of not only long term financial assets but also monetization of less conventional assets.

As Jim suggests, some of this flood of money could flow into "paper" to inflate the general level of stock prices, but my caution to investors is this: under this massive *workout* scenario, any increase in stock prices would only represent a NOMINAL price increase -- NOT a REAL increase in value. Stocks would, in my estimation, actually register real declines against an extrasystemic asset such as gold.

I'll leave you with Jim's concluding statement, a good one.

"This is not the time to hesitate or the time to be without firm convictions or beliefs. If you don't have them, get into cash and be content with what you have left. For those of you that believe what the rise in gold and fall in the financial markets are telling you, it is time to take advantage of those who are subsidizing the price of gold and silver. It is the time of mice and men. It is a time when those who have convictions must stand by their beliefs because those who have none will eventually follow."

R.
Black Blade
Gold dollar coin finds few takers; mint scales back production for '02
http://denver.bizjournals.com/denver/stories/2002/08/26/story2.html
Snippit:

Denver-area consumers haven't embraced the new Sacagawea "golden dollar" coin in a big way, despite the U.S. Mint's multimillion-dollar marketing campaign that urges "It's money, so use it." There's so little demand for the coins right now that the mint decided not to make them for general circulation this year. The mint's Denver and Philadelphia branches manufacture the dollars.


Black Blade: Yep � a flop! Not really much of a surprise that this "bronze slug" failed.

TownCrier
Reuters gold report
http://biz.yahoo.com/rf/020826/markets_precious_2.htmlExcerpt:

Leonard Kaplan, president of Prospector Asset Management, said in his report Monday that when silver prices where last this low in February, gold was $25 cheaper than it is now.

"The gold/silver ratio is now near or at 70 to 1, historically extremely high. Such a ratio would scream that either silver is just stupid cheap at these prices or that gold will soon fall in value quickly," he wrote. "I greatly favor the first explanation."

------(more at url)------

Careful with that conviction, Lenny. Over two decades ago (when the ratio was even lower) Bunker Hunt thought it would/should decline to 5 to 1. Long story short, he lost a bit of money on the notion, and subsequently, the ratio has continued to move decisively in the opposite direction from his prediction (or gut feeling). Like it or not, there is no fundamental reason dictating that it must in fact reverse or otherwise abandon the current trend. A word to the wise.

R.
Ag Mountain
In Search of Fraud -----OR----- It takes one to know one
http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256C21005CB36C?OpenDocumentYou can almost hear the narrator for the Rocky and Bullwinkle Show on this.

NEW YORK -- Nine years ago, Gold Anti-Trust Action Committee chairman Bill Murphy and his two brothers had their Commodity Futures Trading Commission registrations permanently revoked and paid a massive fine to settle a Comex fraud case.
Black Blade
Analysts on list of top scammers
http://money.cnn.com/2002/08/26/news/scams/index.htm

State regulators say conflicts of interest by stock analysts join this year's list of top 10 scams.

Snippit:

NEW YORK (CNN/Money) - Stock analysts and unscrupulous brokers have joined the list of those engaged in top investor scams, according to an organization of state regulators released Monday. "Record-low interest rates and a bear market on Wall Street have created a bull market in fraud on Main Street," said Joseph Borg, president of the North American Securities Administrators Association, which includes the securities regulators from the 66 states, provinces and territories in the United States, Canada and Mexico.


Black Blade: Analysts eh? Considering the recent exposure of Jack Grubman, Henry Blodgett, Mary Meeker, etc. It does not surprise me.

Gym maintenance is over � so off to the gym!!!
goldquest
Bill Murphy
paid the fine, got banned and the case was closed. So is he suppose to hang again because someone found a new rope? I don't think so!
Waverider
DAILY GOLD MARKET REPORT
Gandalf the White
A FORWARD thinking GOLDHEART is Sir Black Blade !
http://www.usagold.com/DailyQuotes.htmlSoon to be correct on the US$330.50 SPOT price.
(I too find that "CUT and PASTE" can be dangerous.)
<;-)
Waverider
Gandalf
Too good to miss....and I missed it! :)
Blackjack
Reply to Towncrier msg#: 83721
I think some fundamentals for Silver have changed.

Two decades ago the Feds had a huge stockpile of Silver
and now that is gone. Starting early 2003 the Feds will be
net buyers of Silver to replentish the Defense Strategic Stockpile
and to mint Silver Eagles , the most popular coin minted. Sales
of Silver Eagles are going up nicely.

Silver is the most conductive metal, for heat and electricity.
Laws in Japan dictate that by 2005 all solder used in electronics
must be free of lead and the new solder will contain 3% Silver.

If tech sales increase in the future the demand for Silver
will continue to grow. Silver is used in new superconductive
cables to make the cables that move electricity much smaller
than present cables that have more resistance. Silver will be
used in superconductive applications.

Also with the stockpile gone, the Feds can't dump silver on
the market to drive down prices. Central Banks around the world
can't suddenly announce tons of Silver to be dumped into the
market, they don't have the Silver to dump, like they can sell tons
of Gold suddenly.

For Silver a few fundamentals have changed relative to two
decades ago. Perhaps the Gold Silver ratio will widen but there
seem to be at least a few reasons why Silver just might close
the gap a bit.
silvercollector
Request
Does anyone have credible oil 'links' that discuss the Iraq situation? Headline news revealed Sunday night a possible US/British bombing but I didn't hear much mention today.

Thanks,

silvercollector

P.S.: Junior golds rocked today......a sign?
Mr Gresham
Real estate blues: Insurance and deflation
http://www.prudentbear.com/bearschat/bbs_read.asp?mid=42191&tid=42191&fid=1☆t=1&sr=1&snsa=AFirst-person view of approaching crunchin rental properties.

Also, deflation happens at the margin, not to the averages property/asset. Then, the margin takes down the averages.

Conserve capital to buy at the bottom. Set-up of a lifetime coming...
Waverider
Silvercollector
http://www.arabworldnews.com/Try this..there is a lot here. Also, if you do a Google search of Arab/Iraq newsites, you'll likely find more. Not all are in english though. Hope this helps. Cheers,
Waverider
R Powell
TownCrier
Leonard Kaplan mentioned that the silver to gold price ratio is nearing 70/1. Speaking of this ratio you stated,

"Like it or not, there is no fundamental reason dictating that it must in fact reverse or otherwise abandon the current trend."

I don't know how much faith I'd place in any ratio between two metals whose value has in the past (and perhaps present) been "fixed" by governments and gold pools. There was once, I believe, a 16/1 ratio when both were used as currency. Have either enjoyed enough time in an entirely free market to determine their true market value? Have both been free at the same time and for long enough to determine not only a dollar value but also a ratio?

Your statement implies that you don't hold much hope for a lower ratio. Are you opining that the ratio has no fundamental reason to reverse because silver has no reason to appreciate? If so, would you please be kind enough to explain why, including any references you have to existing silver supplies. I've relied on the Silver Survey in the past but I have been seeking other sources of information for some time. There is another publication, by the same people, a 237 page affair, but its price is $3500! Yes, thirty five hundred dollars. There's one there for gold too, also $3500. I ordered the Silver Survey, cheap, only $155 with shipping and handling.
Whether the gold/silver price ratio has merit or not, you seem convinced that silver is not the place to invest. You even included a warning so this must be a strongly held view. May I inquire as to why? I've been looking for this very same information for a long time. What is there that holds the POS down?? Thanks,
Rich

sector
@blackjack Kodak and DuPont are the largest silver users...
...and they have yet to order their 2003 suppliesThus the market for cheap silver in quantity may be a tad thin these days.

Recall that these two big medical x-ray film producers dominate the silver use market. Fuji is right behind. The old saw that digital technology will obsolete x-ray film is bogus. The backbone of radiology is the 14" x 17" chest film. That won't change any time soon.

So there are tonnes of silver to be ordered soon...from somewhere.
Leigh
Waverider
Sorry to just be getting around to answering your question of last night. This year I have TWO kids to homeschool, so I'm much busier than before! (Yes, the 11 year old is not only willing, but eager, to be taught at home. We forfeited $17,000 of next year's tuition that we'd already paid at his private school, but we thought his well-being was worth it.)

You asked how I got interested in gold. I think it was living through the big inflation scare in the late Seventies. Every night I would watch the reports on the news about people buying gold and silver. Girls would look at each other's jewelry and wonder if they were "real" gold and silver. The thought of actually holding a gold coin or bar was beyond our imaginations. My aunt "made off" with my grandmother's beautiful collection of wedding silver (so extensive that it was stored in a large cabinet), and I remember wondering if people had lost their minds.

You know how some events in your life make a deep impression, and you are changed because of them? Well, I must have become a goldbug wannabe at that point. It was quite a while before I had the time and means to indulge that desire, though. It was finally during the Y2K scare that I began cashing in some of our stocks (which had appreciated nicely through the Nineties) and buying gold. And what a wonderful feeling it is to have it! No piece of paper in the world can equal the DEEP satisfaction of owning one's very own gold.

Thanks, Waverider, for making me think this through! I'd love to hear other people's stories, if anyone is willing to share.

Cavan Man
Anybody remember "Cuber"? (circa JFK)
Back then we were treated to photos and some EVIDENCE.Where's the beef or, where have all the flowers gone?


Cheney States Case for Pre-Emptive Strike on Iraq
Last Updated: August 26, 2002 03:59 PM ET
Print This Article

By Pat Harris

NASHVILLE, Tenn. (Reuters) - Vice President Dick Cheney on Monday laid out the White House's case for a pre-emptive strike on Iraq, citing mortal danger to the United States and labeling critics as guilty of "willful blindness."

Cheney used a gathering of the Veterans of Foreign Wars to reject fears, expressed publicly by some senior members of his own Republican Party and others, that pre-emptive military action would undermine the global U.S. war on terrorism and mark a radical new departure for American foreign policy.

Citing what he said was the danger that Iraqi weapons of mass destruction could fall into the hands of terrorists, Cheney said America could not afford to sit by idly. It would, if necessary, fight a war of liberation, not of conquest.

"The risk of inaction is far greater than the risk of action," he said, in remarks clearly designed to win over public opinion at home and address skepticism abroad over military action to oust Iraqi leader Saddam Hussein.

"And the entire world must know that we will take whatever action is necessary to defend our freedom and our security."

The vice president, who served as secretary of defense during the 1991 Gulf War, said Iraq's development of advanced weaponry, its refusal to allow U.N. inspectors to monitor its weapons programs and its general hostility had produced "an imperative for pre-emptive action."

MORTAL THREAT

"What we must not do is in the face of a mortal threat is to give in to wishful thinking or willful blindness. We will not simply look away, hope for the best and leave the matter for some future administration to resolve."

Cheney's remarks, a strong rebuke to recent words of caution several Republican Party luminaries in recent weeks, came as the administration asserted its legal authority to attack Iraq without advance approval from Congress.

Spokesman Ari Fleischer said White House lawyers had concluded President Bush had authority under the Constitution and subsequent acts of Congress to take military action against Iraq, without special congressional approval.

But he held out the possibility the president would consult Congress all the same. "The president, aware of this determination, if he makes a decision about the use of force, will make the decision about a congressional vote on more than legal factors alone," Fleischer said.

Officials have stressed Bush has made no decisions regarding a possible attack on Iraq, and that he would consult with Congress regarding future steps. The White House has also chastised the media for creating what Defense Secretary Donald Rumsfeld called "a frenzy" over a possible Iraq campaign.

"REGIME CHANGE"

Yet, senior administration figures have not been shy about their public demands for "regime change" in Baghdad. Bush, whose father was president during the war with Iraq, himself has talked about it at almost every public appearance.

Spokesman Fleischer, with the president at his ranch in Crawford, Texas, made it clear Cheney's tough talk reflected Bush administration policy.

Cheney said: "I am familiar with the arguments against taking action in the case of Saddam Hussein. Some concede that Saddam is evil, power hungry and a menace, but that until he crosses the threshold of actually possessing nuclear weapons we should rule out any preemptive action.

"That logic seems to me to be deeply flawed. The argument comes down to this: 'Yes, Saddam is as dangerous as we say he is, we just need to let him get stronger before we do anything about it,"' he said.

"Yet if we did wait until that moment, Saddam would simply be emboldened and it would become even harder for us to gather friends and allies to oppose him."

In Afghanistan, he said, "the world has seen that America acts not to conquer, but to liberate ... We would act in that same spirit after a regime change in Iraq.

"With our help, a liberated Iraq can be a great nation once again," he said.


Cavan Man
Hey sector....
One of those mentioned is a BIG customer. Conventional film in that segment is going away. Get digital baby!
mikal
"Quatar raises stakes over Iraq"
http://news.bbc.co.uk./1/hi/world/middle_east/2217946.snippit: "Quatar joins Saudi Arabia and Bahrain in denying use of their bases for any strike against Iraq."
TownCrier
Silver/gold ratio
Blackjack, everything you've said certainly contributes fundamentally toward the dynamic pricing (up and/or down) of silver by the market.

My point, however, was that in consideration specifically of the RATIO of silver price to gold price, there is fundamentally nothing that links them in such a way that a prudent man should be drawn into financial speculation upon expectations of predictable behavior with respect to this same ratio.

Just like any other pair of marketable goods having unique usage demand, each metal is independently subject to the market's dynamic pricing assessment. Fundamentally, no link exists to dictate one ratio or another. At best, we can merely observe their historical relationship.

And on that score, a use of history as a roadmap to the future may show two completely different things to two different people. They are inclined to see what they want to see. Where one person sees a lower average historical ratio to justify his bets on silver, another might see a prevailing trend and therefore bets on gold.

A final warning before you decide to place your bet one way or another based on this historical roadmap: just because something like this can be conveniently "linked" through a label and measurement (i.e., silver/gold ratio) does not mean that the two parties are in fact fundamentally linked.

We could probably chart out a SUV/DVD ratio, but it shoudl be intuitive that the mere creation of that comparison doesn't mean that the price behavior of one is now bound to the market behavior of the other. The chart will simply show what they HAVE done. To be sure, to the extent that we feel the items to be independent economic goods, even in this shoddy example it should appeal to most of us that, as a roadmap, the TREND would have more predictive value than the historic average. Why? Because through constant adjustments and innovations the marketplace is on the whole more an evolutionary thing than a static thing.

And if any reasonable conclusion may be drawn, it is that gold and silver as marketable goods are more independent than they ever have been before. Hence the leanings in my comment toward "trend" rather than "average".

That is basically the gist of what I was driving at with my earlier comment. Sorry for the failure through brevity.

R.
mikal
http://news.bbc.co.uk/1/hi/world/middle_east/2217946.
http://news.bbc.co.uk/1/hi/world/middle_east/2217946.For some reason, the line between middle and east is not posting, as it should appear above.
Socrates964
Light entertainment
Found this on the bSC board

Look at this ad!
by: mississippistockguy (48/M/Jackson) 08/26/02 05:15 pm
Msg: 33906 of 33907

Who woulda thunk it?

Six weeks ago I answered an ad in the Village Voice and now I am a $6000/week Message Board Investment Counselor. You can be too!!!

Don't snooze. An opportunity like this comes along but once in a lifetime........
________________________________________
DESPERATELY SEEKING SUSAN'S REPLACEMENT

Were you instrumental in supporting an orderly Insider Evacuation of a Total Joke Stock during the recent Investment Bubble?

If so, Magrino Agency wants to talk to you about an immediate hire. We are engaged in Message Board support of a high-prestige NYSE stock that recently traded near fifty times earnings

Unlimited earnings potential. Bankers hours. Work at home. Liberal spiffs paid out daily in MSO, KM, or IMCL Common Stock. Fringe benefits unmclude Vancouver Brokerage Account for dumping spiff proceeds routed directly to Caymans deposit box.

We want to see samples of your work and documented dumping of at least $70 Mil worth of a (now insolvent) NYSE or NASDAQ equity under your stewardship. Softbank, ideaLabs! and CMGI alumni encouraged to apply. Submit confidental resumes here;

allyn@magrino.com
misetich
Citigroup and Rival Banks to Maintain Brazil Loans
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWqWkBUzQ2l0aWdy&ao=22605449Snip:


New York, Aug. 26 (Bloomberg) -- Brazil said it persuaded Citigroup Inc., J.P. Morgan Chase & Co., Deutsche Bank AG and 13 other lenders that have cut lending to South America's biggest economy this year to maintain current levels of business.

After scaling back loans to the country by as much as 20 percent since the end of March, the banks pledged to keep financing trade and other operations in the country, said central bank President Arminio Fraga.

The lenders' commitment was ``the strongest possible signal that a bank could send,'' Fraga said at a press conference after a meeting with the banks at the New York Federal Reserve. ``The result of the meeting was better than we had expected.''
...........
The promise by the banks may help Brazil head off future demand for dollars,
...........
Concerns Remain

Details of new bank lending requirements to deal with greater risk in the country weren't disclosed. The bankers' group, which initially said it would talk to the media, didn't comment after the meeting.

Some investors, concerned that the government may default on its debts, said they remain skeptical.

Bank of America Corp. Chief Executive Officer Kenneth Lewis said in an interview earlier this month that banks probably will wait until after the October presidential election before deciding to increase lending in Brazil. The third-largest U.S. bank has about $1.8 billion at stake in the country.

``We are still in a delicate situation,'' said Paulo Rezende, who helps manage about 700 million reais ($226.2 million) in debt and equities for Maxima Asset Management in Rio de Janeiro. ``The best the government can expect now is to hold on to what wasn't being suspended yet.''
............
Fraga said the group didn't discuss whether the banks will try to guard against further weakening of the real. One step the banks can take is discouraging short sales in which investors make money when the price of the currency falls.
*************
Misetich
Lets watch what they do, rather than what they say. Global economics indicate a weaker Latin American economy and who wants to buy the real?
Got gold?




R Powell
sector
Can you add to the Kodak and DuPont buying information? Specifically, do they purchase a year's worth at one time? Do they buy directly from mine supply or do they buy off exchanges with delivery spread out over time?
Also, what do you know of recycled (reclaimed from waste) silver. I've seen reports that China has newly developed reclaimation factories and that this silver, re-entering the market, may have been that which was reported in year 2000 as national dishoarding from China.
Does Kodak usually buy silver near the end of the year? How will the government buy for the coin program, that is, from an exchange or from mine supply? The constitution says they're supposed to buy from domestic supply but that was when silver was currency. That was long ago before constitutional law was forgotten and relegated to folklore.
Any response will be appreciated whenever you can find time. Any and all information will help.
Rich
misetich
Saudis Says 'Terror Smear' Won't Harm Kingdom
http://abcnews.go.com/wire/World/reuters20020826_285.htmlSnip:

Aug. 26
� RIYADH (Reuters) - Saudi Arabia's cabinet accused some Western media on Monday of a "smear campaign" with allegations that royal family members had funded terrorism, and said it would not affect the kingdom.

The regular cabinet meeting discussed "the ill-intentioned smear campaign by some Western media that aim to present an image (of the kingdom) that is far from its moderate and balanced policies," the official Saudi Press Agency reported.

............
SPA quoted Crown Prince Abdullah, the country's de facto ruler, as saying at the Monday cabinet meeting: "Such allegations, whose aims and fomenters are well known, will not harm the kingdom or affect its positive role in achieving international peace, stability and prosperity."

The prince, who heads the government in the name of ailing King Fahd, did not say who he believed was behind the campaign.

But he said Riyadh would continue to "support and fortify international efforts to combat terrorism in the framework endorsed by the United Nations."
***************
Misetich
The battle of words rages on -

Got gold?
Noble1
ANOTHER new use for silver
With the advent of HDTV and progressive scan DVD, the desire for high quality component interconnects is increasing. Discriminating audiophiles may abandon copper and now purchase top of the line pure silver (not plated) coaxial cable from a company called (left out because I don't know if this could be promoting). A set of 3 (required for a RGB component video connection) cables 3.5 meters long sells for $199.95. Shorter sets are less. Most home theater owners would require more than one set. Hopefully a few ounces are consumed with each sale.

Noble-1

Black Blade
Re: Gandalf -oops!

Thanks for the heads up. yes the close in NY was $309.50 an ounce, up $3.30 from yesterday's close. The Daily Market Report is now corrected. I just got in from a good workout at the gym. Of course a rebound to $330 an ounce could occur soon. We already see some buying by Asian jewelers and dealers ahead of the festival season and that should pick up starting next week into the coming months and going forward, followed by western jewelers and dealers ahead of the holiday season. I guess I just jumped the gun. Thanks,

- Black Blade
Black Blade
Gold in Transition to Currency
http://www.financialsense.com/editorials/sinclair/082602.htm Reapplying The Gold Cover Clause
Q & A with Jim Sinclair

Snippit:

Dear Mr. Sinclair:

You said in one of your reports that gold was presently in a transition from a commodity back to its traditional role as a currency. I think that is impossible in the modern world of instant global trading and finance. It is my opinion that gold is anachronism that today is only a play toy of speculators, miners and derivative dealers as a commodity and destined to remain a commodity of specialized interest only.

Jim Sinclair answers:

Your opinion is what has been TAUGHT in business schools for the past three generations, so I am not surprised at all to your reaction. Yes, it is my opinion that gold bullion is in transition back to its traditional role as a currency. I will not glibly answer your position by saying that this transition is taking place as the "People's Choice" even though that is one of the important reasons why.

You have witnessed the US dollar decline on the USDX from a high of almost 122 to an intraday low of almost 104 with a recovery today to 108.22. The currency of all countries functions in the market place as "The Common Share" of the country it represents.


Black Blade: An interesting discussion by Sinclair � some food for thought. I just saw Jimmy Rogers on CNBC. He is into the Euro and down on the US dollar. Then he said that gold and silver are OK but he's not into them. This of course is strange as the euro will not survive � not more than 10 years according to Rogers. I would rather be into gold and silver as they will always be around and not be reliant on some vague promise of some government � which also may not be around. Hmmm�

misetich
US CBO Estimates Expected To Show Wider Budget Gap Aug 26 / 15:07 EDT
http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1030388820000&sn=2&banner=mainwireSnip:

By John Shaw

WASHINGTON (MktNews) - The Congressional Budget Office will publish
numbers Tuesday that no one wanted to see early, the updated deficit, spending
and revenue figures that finish the round of updated summer budget and
economic estimates -- and which are universally expected to be a lot
worse than the previous numbers.
............
Most analysts expect CBO's report to be significantly gloomier than
its last full report in January.

At that time, the CBO estimated the U.S. would have a $21 billion
deficit in fiscal 2002 and $14 billion deficit in FY 2003. The White
House budget office released its mid-year report on July 12th and it
predicted a $165 billion deficit in FY 2002 and then a $109 billion
deficit in FY 2003. Senate Budget Committee Chairman Kent Conrad
released last week budget estimates of the Democratic leadership that
show a $157 billion deficit in fiscal year 2002 and a $180 billion
deficit in FY 2003.
..............
**********
Misetich
"Budget surpluses" predicted and forecasted a year or so ago turned into deficit
Trillions of forecasted "surplus" has disappeared - poof - gone ..

Got gold?






DOWNUNDER
@TOWNCRIER ---- RE SILVER
From your posts re silver it seems that you have a "gut feel" to the negative towards silver--but certainly nothing substantive.

May I humbly suggest that a reappraisal of Ted Butlers work (and other expert analysts) could be a starting point to your understanding that silver is in the same manipulated position as gold.The crooks are blatent & there is a plethora of evidence.

Silver has shared a monetry value with gold from as far back as our history is known. In GOLD WARS-(A must read for all PM investors)Ferdinand Lips covers the subject in a chapter entitled "THE OTHER MONETARY METAL --SILVER". He goes into detail over several pages on the Gold/Silver Ratio which has varied from 100-1 to 15-1 over the past 200yrs.
SNIP-
Professor Antel Fekets analysis of Silver is also explored & his conclusions show that before the "Gold Wars" there were "Silver Wars". The following & later chapters demonstrate that they continue to this day.!!!!!

SNIP-
SILVER,THE RESTLESS METAL
This is also the title of a book by Professor Roy Jastram on
the history of Silver:
"Although Silver has become predominantly an industrial good
it has NOT left behind it the characteristics of a precious metals market.It is still bought by individuals & instutions as an INVESTMENT,as a protection against inflation and as a speculative object.

For what its worth I have investments in both GOLD & SILVER.
sector
@R(ich)Powell About Silver Recovery
There's much hidden supplyThe big buyers generally issue a press release describing their actions. Kodak did so last year in the Fall. They bought a year's worth. DuPont sometimes does also.

They have yet to announce this year.

The reclamation of medical x-ray film is quite efficient in the US. it works like this:

(1) the general processing of medical x-ray film occurs in a cabinet sized chemical processor. The silver laden fixer is run through an electrolytic unit with a multi-disc anode to attract unused silver...the "Clear parts" of the x-ray film. The anode is periodically scraped and collected and sold at market to wholesalers like Johnson Mathey.

(2) De-archived x-ray film [Film stored past legal requirements] is run through chemistry that "Strips" the black metallic silver and then anodizes it for collection. Jobbers do this kind of work and also send the product to silver wholesalers.

There is to my knowledge very little consumer film silver recovery.

The Chinese may have a good silver recovery channel but they have a long way to go building their x-ray film use. I believe they were the receivers of our defense silver stocks. Perhaps even offering their gold in trade.

It's clear that open market silver demand will grow and that the shorts are in precarious straights. They may however, be rescued by an official default on the COMEX so that they never have to repay the short silver metal...only the dollar contract "equivalent". Such an event will forever ruin th US commodities market's integrity...but who's watching anyway when the two largest Federal Reserve banks are just fronts for a criminal loan sharking enterprise?

The Fed has unfortunatly guided the United States down a one-way road of corruption and ruin.
Black Blade
Market Wrap Up � Puplava
http://www.financialsense.com/Market/wrapup.htm

Snippit:

The US now finds itself in a precarious situation. It is dependent on the willingness of foreigners to finance its trade and current account deficits, and financial institutions to finance its budget deficits. The remainder of the economy is dependent on rising housing prices and lower interest rates to maintain consumer spending which is dependent lower interest rates. It hasn't dawned on anyone yet that this is a prescription for disaster. In my 23 years in this business I have never seen such an absence of understanding of macroeconomics. We now have a recovery scenario that is based solely on a continuous pyramiding of debt. No one seems to contemplate what will happen when that debt spirals out of control.

I have seen many of the deflation arguments about what is in store for us. However, I don't buy the strict deflation argument. I believe my Perfect Storm thesis is what we are going to see. There will be deflation in credit related and luxury goods while we have severe inflation in key raw materials and in basic goods. The storm that is in front will be no ordinary textbook storm. The US economy today isn't the same US economy of the 1930's. We are no longer the world's largest creditor nation. Instead, we are now the world's largest debtor with our debt now growing exponentially. We are no longer self-sufficient in manufactured goods. Look at the labels of the consumer goods you buy and see where they were made: the US or overseas? The US is no longer self sufficient in energy. We now import over 60% of our oil and over 15% of our natural gas. In fact, the US is no longer self sufficient in many raw materials and that has broad implications, especially if foreign goods and raw material producers no longer want dollars for the goods they ship us.


Black Blade: We are at the mercy of the rest of the world. The Middle East could kill us financially and probably will if the 9-11 lawsuit is not dismissed. They will likely withdraw invested funds selling stocks and real estate, and probably set a higher base price for oil. If Europeans, Chinese and Japanese no longer want to buy our debt we are toast � that could happen if they decide that they have their own problems to deal with and the jettison those dollars. Gee, what will happen to the real estate bubble if the Fed does not lower rates next time around or God forbid they start to raise interest rates? Somehow I visualize the "running of the bulls" in Pamplona. Many will get gored and others trampled.

Trapper
Sir Blackjack
Your opinion on silver is shared by many here, but be aware that there is a great deal of predjuice on silver here also.
The coinage act of 1792 set the ratio of 20 silver dollars was equal to 1 gold dollar and stayed that way until 1964. Some of the geologist types say that silver is found in about 16-20oz to one 1oz of gold in nature for what thats worth. I say that because of the fixed markets we are dealing with. Silver really has no chearleaders like gold has, centeral bankes don't use widley for reserves like they do with gold. It is said and I belive it that almost all the gold ever mined is still here whereas the silver is gone. I think silver will have the biggest moves percentage wise once the things get going. The poor mans gold has much appeal to the masses too. The only porblem iis silver is bulky and it takes up lots of room for the dollar. Some buy it because they feel if a goverment call in happens silver will be passed over for gold. To each his own...pay yuor money and take your choice. Live small.
RJ
Black Blade
Record $50bn is pulled out of US equity funds
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186013818&p=1012571727088

Snippit:

US investors reached the breaking point last month and pulled a record $50bn out of US equity funds - the largest monthly net outflow in history, early data to be released by fund trackers this week will confirm. The July exodus, amid a slew of corporate fraud scandals and bankruptcies, has raised concerns that disillusioned equity fund investors may stay on the sidelines.

Black Blade: The recent bear market rally has been based on very light trading volume. August numbers may be better, however, not many are willing to jump back in as shares are still grossly overvalued.

misetich
AOL Time Warner declines to comment on report SEC to probe earnings forecasts
http://www.afxpress.com/afxpress2/afx/story_43799.xml.htmlSnip:

NEW YORK (AFX) - AOl Time Warner Inc declined on Friday to comment on a report the Securities and Exchange Commission is set to extend its probe into the company to include a series of upbeat forecasts made last year by executives of AOL Time Warner.

The Financial Times reported, without citing sources, that 15 senior executives and directors of AOL, including chairman Steve Case and chief executive officer Dick Parsons made profits totalling almost 500 mln usd by selling shares between February and June of last year while the company repeatedly insisted it would meet ambitious earnings projections laid out more than a year before.

............
There is no suggestion the directors did not believe forecasts could be met when they sold their shares, or that they were aware of improper accounting.

Nonetheless, the SEC is expected to look at the forecasts and the timing of the share sales as it widens its investigation into AOL's accounting practices, launched several weeks before the company disclosed the questionable revenues, according to the FT.
************
Misetich

It looks like the whole bushel is almost full of rotten apples not just a few

Got gold?
Black Blade
Cost-cutting can start a ruinous cycle
http://www.startribune.com/stories/535/3185859.html

Snippit:

In Alice in Wonderland fashion, we talk of expansion and ignore the contraction all around us. We convince ourselves that out of cost-cutting will come prosperity. But while cost-cutting can lift a single company or two, when practiced widely enough it can pull down an economy. And that is happening now.

Few economists acknowledge this dynamic. Corporate cost-cutting and labor-saving layoffs appear in the forecasts as the road to greater productivity and rising profits. But we have fired the workers and extinguished the salaries that would have been spent on the merchandise and services to fatten profits. With sales revenue failing to rise, we cut costs more. The process feeds on itself -- until there are not enough workers and salaries to generate sales and profits. There is hyperbole in this description, but not much. The nation is caught in the strangest recovery since the Depression -- featuring a dynamic that William Dudley, chief domestic economist at Goldman Sachs, characterizes as "the corporate paradox of thrift."

"If everyone tries to cut costs and save more, no one saves more," he said. "If you and everyone else cut costs, costs do indeed go down, but revenue also goes down, so profits eventually go down, too. Collectively, we can't cut our way to prosperity."


Black Blade: And yet the "Bone Pile" continues to grow and corporate and consumer spending have fallen off sharply. There is not much to suggest any "economic recovery". Interesting article.

R Powell
Downunder
Is the book you mentioned by Roy Jastram new? Could you give us the date of publication and the publisher? I've never run across it and wonder how much recent information it contains, also the publisher as I'll guess it will be a hard to find book. Thanks
Rich
misetich
Bubble talk grows with debt-Some fear pressure will prolong downturn
http://www.chicagotribune.com/business/chi-0208250020aug25.story?coll=chi%2Dbusiness%2DhedSnip:

Now, economists and stock market experts are floating the idea of a debt bubble, in which swelled levels of household and corporate borrowing force an already squishy economy into a longer-lasting, and more punishing, downturn.

Burgeoning household debt is a familiar story, closely watched by economists because they fear it will dampen consumer spending, which has been a vital bulwark against a deeper recession.

But as Federal Reserve Chairman Alan Greenspan and others point to revived business investment as a key to a sustained recovery, those growing corporate debt levels are receiving increased scrutiny: More money devoted to servicing debt means that much less for investment, and more debt overall means more skittish lenders.

"I've been saying there was a debt bubble for about two years," said Jane D'Arista, director of programs at the Fed-watching Financial Markets Center think tank outside Washington, who said the Fed has made the situation worse by fixating on inflation as debt swelled to unprecedented heights.

"The Fed has paid no attention to credit," she said. "This is as bad as having inflation, in terms of what it's doing to the economy."
There's no disputing that, in sheer dollar terms, debt has ballooned. Household debt, including mortgages, has more than doubled since 1991, reaching nearly $7.9 trillion at the end of the first quarter, according to the most recent Fed data. Corporate debt has mushroomed almost as fast, topping $4.8 trillion. Add in the debt from other businesses and nearly $10 trillion in debt from the financial sector, and the total exceeds $24 trillion.

That, of course, is more than twice the annual gross domestic product of roughly $10.3 trillion, and dwarfs the ever-popular federal debt, which checked in at a paltry $3.4 trillion at the end of the first quarter.
***************
Misetich

ANOTHER bubble - compliments of the biggest bubble maker - Sir Allan Greenspam - Debt, Debt and more Debt

Got gold?

misetich
New data may cast doubt on Japan recovery
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186028910&p=1012571727192Snip:

Japan may this week drastically scale back preliminary estimates for first-quarter growth, removing much of the gloss from what many had hopefully interpreted as a sharp rebound from the country's worst post-war recession.

An improvement in the methodology by which gross domestic product is calculated could see revised GDP numbers for the first three months, due to be published on Friday, fall to about half the initial estimate of 1.4 per cent. The original figure implied an annualised growth rate of an improbable 5.7 per cent.

"I think it is pretty much established that the new figures will show that GDP did not perform as well as originally stated because those initial figures were based on wildly exaggerated data," said Marshall Gittler, an economist at Bank of America in Tokyo.

A survey of seven leading think tanks compiled by the Nihon Keizei Shimbun daily newspaper showed a consensus forecast for the revised first-quarter figure of 0.6 per cent.

The same institutions expected second-quarter GDP figures, also to be released on Friday under the new methodology, to come in at a modest 0.2 per cent, underlining the fragility of the economic rebound.

*********
Misetich

Yep, ANOTHER economic recovery for Japan's economy has been post-poned again

From continent to continent -world economic growth is decelarating - Central Bankers management is being questioned daily as investors savings and portfolios vanish

Got gold?
misetich
Investors plan to shun markets
http://www.nationalpost.com/financialpost/story.html?id=0F26A76C-8234-45A5-BF38-23D8C0BC788ESnip:

Just 38% of 2,500 investors polled said they would buy more stocks during the next year, a sharp drop from the previous survey in 2000, when nearly half of respondents said they planned to add to their existing stock holdings.

More than half of investors -- 51% -- said they would probably maintain their current stock investment levels for the next year, compared with 39% of those surveyed in 2000.

...........
A scant 2% of 500 non-shareholding respondents surveyed between April and June, 2002, admitted they would "definitely" have an interest in buying stocks over the next three years -- half the amount who said they would enter the securities market in 2000.

**************
Misetich

51% are in the hold category - Hopefully Big Bad Bear will have pity on them -

Got gold?
R Powell
sector
Thanks, I guess we have to keep our eyes open for buyers announcements. I seem to remember that Kodak bought in December a few years back. I've often commented that I don't believe they buy through exchanges but this is just opinion. I'd love to know for sure.

Comex is more of a paper game than a bonifide supplier. They even have a clause concerning delivery in small print that seems to imply that delivery of more than 7.5 million ounces in one calandar month can trigger a monetary (rather than physical metal) delivery offset option for the seller. David Morgan alerted his readers to this and gave the quote. It is (intentionally?) not clear.
If it's physical that's wanted, metal exchanged for money works fine but I wouldn't count on Comex for delivery of any large order. There may come a day when this default happens but monetary settlement will continue and almost all Comex players are there only for the possible leveraged dollar gains.
Thanks again for the info. Keep it coming!
Rich
steady
leigh
i bought my first ounce of silver when i was 11... 28 years ago, no one told me to, no one directed me to it, i just wanted to buy silver..... i still rember coming back to my mom, who stayed in the car and let me do my own dealing, smiling and delighted, ... i still have that one ounce which led me on to the discovery of gold. i buy gold because when i do it becomes mine, no one else has a claim on it. thats my story!
DOWNUNDER
@R POWELL - - - RE BOOK
http://www.amazon.com/exec/obidos/search-handle-url/index=books&field-author=Jastram%2C%20Roy%20W./104-7367404-1613557Both snips I gave were from "GOLD WARS" where the author refers to & acknowleges other experts.
He says-- (pg 63)
"Silver,the Precious Metal" is also the title of a book by Professor Roy Jastram.---then goes on to give some quotes.

I haven't read the above book although I have just now gone to : Amazon.com
Textbook Binding: 224 pages
Publisher: John Wiley & Sons; ASIN: 0471039128; (June 1981)
Out of Print--Limited Availability

The link is to Amazon---hope this is of help.




silvercollector
HK with a little pop
310+
silvercollector
Silver
The geological ratio of silver/gold being 16-20:1 is about to be tested. Mr. Butler, and the recent reports of, IMHO, attest to the 'do or die' scenario of silver.

All the moaning/groaning, pro & con of silver will be revealed in its natural light within the half-year. I have advised my clients to be long, perhaps very long (as funds allow) for 90 days.

Are you long or are you short brother?

silvercollector
Gandalf the White
Sir Zhisheng
Zhisheng (08/26/02; 10:53:20MT - usagold.com msg#: 83710)
Abject Mortification
A thousand pardons Good Gandalf!
===
One pardon did the trick ! <;-)
AND "Mortification" is NOT allowed here.
BUT NOW, you may be "indebted" to post on a regular basis, so as to makeup for the "misreading of Western thought", BECAUSE I see that thou art NOT of that Eastern "lower caste" of which you speak !
Come Join us at the "USAGOLD" Forum TableRound, often and advise us of the GOLDEN thoughts in your area.
<;-)
silvercollector
Trapper
"The only porblem iis silver is bulky and it takes up lots of room for the dollar. "

So what, get a bigger safe.
Gandalf the White
SPOT is doing well in HK tonight !
Jump SPOT, JUMP !
<;-)
silvercollector
Downunder
Just received confirmation of delivery of my copy of 'Gold Wars" today. I will enjoy the labor day week-end and report as such. FIASCO is also on its way.
Black Blade
Oil prices threaten U.S. recovery
http://www.msnbc.com/news/799172.asp?cp1=1

OPEC is reluctant to raise production quotas

Snippit:

Aug. 26 � Oil prices hovering near $30 a barrel on fears of a U.S.-Iraq war are threatening to impede a U.S. economic recovery, even as Saudis and some other OPEC members said they would make up shortfalls if there's an attack.

OFFICIALS OF THE Organization of Petroleum Exporting Countries, concerned about avoiding a price collapse in the spring, raised doubts that the cartel would formally increase supply to reduce prices at its meeting Sept. 19 in Osaka, Japan. The high price of oil could squeeze both corporate profits and household incomes, and hurt the consumer spending that has been the economy's mainstay in the past year. It comes as growth forecasts already are being revised downward for the rest of the year.

The economic consequences of keeping the spigot turned down could be serious. Economists note that the last four U.S. recessions have coincided with � or been preceded by � $30-a-barrel oil. A return trip over that $30 threshold now wouldn't necessarily mean a renewed recession because the economy is less reliant on oil than in the past. But, says Jan Hatzius, an economist with Goldman Sachs, "it ranks as a big risk." Oil prices broke the $30 mark several times early in 2001 as OPEC sought to keep supplies tight. Fears over an Iraq-related shortfall now are exacerbated because OPEC's production limits are keeping global inventories from being built up; they normally act as cushions against supply-and-demand shocks. OPEC's strategy "opens the market up to momentary spikes," says Larry Goldstein, president of the New York-based Petroleum Industry Research Foundation.

Goldman Sachs estimates that every sustained dollar increase in oil prices amounts to a $5 billion transfer of income from American households to oil producers. Such a tax would come at a bad time for many household budgets, with the job market appearing to have stagnated and wage growth slowing. Rising oil prices also have the potential to hurt corporate profit margins � by increasing materials costs � at a time when companies are trying to recover from last year's historic profit collapse. Airlines are especially vulnerable, with jet-fuel costs up about 1% from a year ago, and up 4 percent from their December lows.


Black Blade: This recession has a long way to go before it's over. Middle Eastern businessmen, royals, bankers, and institutions are probably ready to cut and run after the 9-11 lawsuit is still in play, and after the Ingersol Rand Corporation sponsored a report for the Pentagon calling Saudi Arabia an enemy of the United States. The ME Arabs could decide that they owe us no favors and repatriate their investments before the courts freeze assets. Some of that cash could find a home in precious metals stashed in European, Caribbean, and ME vaults. The stampede of ME investors selling stock and real estate could bring down what's left of the US economy.

sector
Cheney States Case for Pre-Emptive Strike on Iraq
This Sure Sounds Like a De-facto Declaration of WarAugust 26, 2002 03:59 PM ET

By Pat Harris

NASHVILLE, Tenn. (Reuters) - Vice President Dick Cheney on Monday laid out the White House's case for a pre-emptive strike on Iraq, citing mortal danger to the United States and labeling critics as guilty of "willful blindness."

Cheney used a gathering of the Veterans of Foreign Wars to reject fears, expressed publicly by some senior members of his own Republican Party and others, that pre-emptive military action would undermine the global U.S. war on terrorism and mark a radical new departure for American foreign policy.

Citing what he said was the danger that Iraqi weapons of mass destruction could fall into the hands of terrorists, Cheney said America could not afford to sit by idly. It would, if necessary, fight a war of liberation, not of conquest.

"The risk of inaction is far greater than the risk of action," he said, in remarks clearly designed to win over public opinion at home and address skepticism abroad over military action to oust Iraqi leader Saddam Hussein.

"And the entire world must know that we will take whatever action is necessary to defend our freedom and our security."

The vice president, who served as secretary of defense during the 1991 Gulf War, said Iraq's development of advanced weaponry, its refusal to allow U.N. inspectors to monitor its weapons programs and its general hostility had produced "an imperative for pre-emptive action."

MORTAL THREAT

"What we must not do is in the face of a mortal threat is to give in to wishful thinking or willful blindness. We will not simply look away, hope for the best and leave the matter for some future administration to resolve."

Cheney's remarks, a strong rebuke to recent words of caution several Republican Party luminaries in recent weeks, came as the administration asserted its legal authority to attack Iraq without advance approval from Congress.

Spokesman Ari Fleischer said White House lawyers had concluded President Bush had authority under the Constitution and subsequent acts of Congress to take military action against Iraq, without special congressional approval.

But he held out the possibility the president would consult Congress all the same. "The president, aware of this determination, if he makes a decision about the use of force, will make the decision about a congressional vote on more than legal factors alone," Fleischer said.

Officials have stressed Bush has made no decisions regarding a possible attack on Iraq, and that he would consult with Congress regarding future steps. The White House has also chastised the media for creating what Defense Secretary Donald Rumsfeld called "a frenzy" over a possible Iraq campaign.

"REGIME CHANGE"

Yet, senior administration figures have not been shy about their public demands for "regime change" in Baghdad. Bush, whose father was president during the war with Iraq, himself has talked about it at almost every public appearance.

Spokesman Fleischer, with the president at his ranch in Crawford, Texas, made it clear Cheney's tough talk reflected Bush administration policy.

Cheney said: "I am familiar with the arguments against taking action in the case of Saddam Hussein. Some concede that Saddam is evil, power hungry and a menace, but that until he crosses the threshold of actually possessing nuclear weapons we should rule out any preemptive action.

"That logic seems to me to be deeply flawed. The argument comes down to this: 'Yes, Saddam is as dangerous as we say he is, we just need to let him get stronger before we do anything about it,"' he said.

"Yet if we did wait until that moment, Saddam would simply be emboldened and it would become even harder for us to gather friends and allies to oppose him."

In Afghanistan, he said, "the world has seen that America acts not to conquer, but to liberate ... We would act in that same spirit after a regime change in Iraq.

"With our help, a liberated Iraq can be a great nation once again," he said.
+++++++++++++++++++++++

Anyone holding out hopes that an Iraq war isn't coming in a few weeks needs to study these above words carefully. Mr. Bush is taking unbelievable risks here. He has thumbed his nose at a long list of foreign policy experts, his European partners AND the Congress, whose preogeratives he has usurped. They will be very quick to condemn him at the first untoward event.

Wars are MADE of untoward events.

He has no idea what Iran and the militants in Saudi Arabia will do when the shelling and slaughter starts.

The justification of WMD isn't washing with the Europeans who would just as soon see the US fail.

The real reason for the rush to war is most certainly hidden and probably involves gold and surely involves oil and may involve an already known WMD attack on a US city(s).

There won't be time to "Arrange ones finances for an unpredictable event". The time for gold is now. Right now.
Grubstaker
Asian Spot Gold ....
http://quotes.ino.com/chart/?s=FOREX_XAUUSDO&v=s&w=1&t=l&a=0this "after hours" movement in the Spot GOLD price is very encouraging...
Waverider
Leigh
Yikes...Leigh, you're brave...home schooling two kids - I'm amazed you have any time to post here at all! No doubt there's a Gold thread which permeates their studies - it fits in nicely with geography, history, and current events - yes?

Your story is interesting. I know many people who have lost $$ in tech stocks and still aren't ready to hear about Gold. On the other hand, I recently had dinner with a friend who wanted Gold investment information as she had just inherited some $$. She indicated that she remembered me speaking about Gold on a previous occassion - sometimes one plants a seed without even knowing it! I was fortunate in a way because my folks invested in Gold back in the 70's, so I had exposure at a fairly young age - and like the sea, it gets into your blood. But my background is not finance or economics and I still have sooooo... much to learn. People here are both kind and tolerant so it's a fantastic place to study. Cheers Leigh, and please share with us once in awhile the creative ways in which you teach your children about Gold - that's important!
Waverider
R Powell
Trapper
In your reply to Blackjack (83753) you wrote,

"Your opinion on silver is shared by many here, but be aware that there is a great deal of prejudice on silver here also."

Agreed. I sense that some regard gold as the only true metal with a claim to a monetary store of value and this seems to be the basis for that disdain toward silver. Silver is probably more widely regarded as an industrial metal than as money but, officially, neither are now recognized by the government as money. This is, of course, subject to change and, as with all government policy, not accepted by all citizens (thank God). Once both were money. I believe both still possess investment value and interest as a store of value.

Our host brokers both metals. MarkeTalk (CPM) has often spoken of silver and has sold silver to me more than once. The service was excellent, the price determined at the date of purchase from spot plus and imho reasonable. (Hint, silver is now cheap). I don't believe M.K. is displeased with any intelligent discussion of silver. By weight he has to sell more to keep the lights on here but I don't believe this is a problem. My job pays approximately $20.00 per ton of concrete poured and finished. I work hard but am well paid nonetheless.
Silver, more weight for your money. Or only 1/70th as good as gold?

As Trapper says, you pays your money and takes your choice!
Rich
mikal
@sector
"There is to my knowledge very little consumer film recovery." For your information, virtually every roll of film processed through Eastman Kodak and film from many developers/processers is reclaimed and recycled. I work as a long-term contractor at Kodak Park in Rochester, NY where I know first hand that at least one large, heavily guarded building serves this purpose.
R Powell
Downunder // silvercollector
Downunder- thanks

Silvercollector- Long brother, long!
Waverider
The Bush family's phony wars
http://www.atimes.com/atimes/Middle_East/DH27Ak01.htmlSnippit:
"With its vast military-industrial complex, the US needs constant conflict, ie, wars or near wars, to justify its staggering expenditure. The only superpower, with the most destructive power at its command in history, has pretensions to be an imperial power without the grace or obligations that go with it. After the stunning events of September 11, it is behaving like a raging bull...But the enemy al-Qaeda, with its tentacles around the world, remains free and hidden. Attacking Iraq would give the impression that the flagging "war on terror" is going somewhere...Moreover, an attack would distract attention from financial scandals which threaten to enmesh both president and vice president. To many, it seems that the US administration represents but narrow corporate interests, and already, in this respect, the impending war seems to be going rather well."

Waverider: Quite an interesting and creative commentary with an in-depth historical account of the Iraq/ME region.
R Powell
mikal
Are you at liberty to give us any information concerning when Kodak buys silver and from whom? Also, has the photography industry changed from stockpiling supply to the "just-in-time" delivery offered by the "new economy"?
I'm all ears for any information your unique position affords you. TIA
If you can't say much at least keep an eye open for any public announcements concerning silver. TIA
Rich
Blackjack
Thanks for all the Info on Silver!
I just want to mention I am LONG both Gold and Silver.

Spot seems to be perky tonight. I wonder if its the Asian
Central Banks, or maybe the Saudi's and the ME after Cheney's
remarks today? hmmm

mikal
Middle Eastern Arab prejudice
There is a bias in the US mainline media. Arabs are continuously reported to be planning an exodus from dollar denominated assets for fear of litigation and asset seizure and for spite, instead of the predominant reasons. Why would any foreigner want to retain a constantly devaluing $ subject to inflation, whether in overvalued real estate, equities, bonds or cash reserves or riskier US ventures as a major portion of their asset portfolio? What happened to diversification? As for the $30/barrel oil, is it their fault if they seek an inflation-adjusted increase in their oil incomes, as American workers do? Seems like another grossly undervalued commodity, doesn't it?
silvercollector
My take on Iraq
I've heard a dozen takes on the Iraq situation and agree with none (completely) so I'll throw my 'hat' into the ring.

It is without a doubt that the stark revelation that something was wrong occured on 9/11/01. The government immediately (30 days) responded by lashing out and defeating villians directly involved (Afganistan). The bone-jarring 'why' still remains.

From day 1, a high profile retalitory attack (revenge) was aimed and carried out against the direct perpetrators of the 911 attack. Meanwhile an exhaustive study has revealed
the co-conspirators at large. This is a mix of Iraq, Saudi and a collective handful of other nations, probably includes Iran.

I cannot believe for a moment that Bush is satified that Afganistan has been, or continues to be leveled. There is, let there be no doubt, a 'bigger fish' to fry. I believe Bush wishes to fry Husseins butt. While accomplishing this minor feat, the disgusting maggots will crawl out of the woodwork, identities will be known. Futhermore, allies will be forced to declare sides, Britain will be forced to ...........................

As the 'axis of evil' is surrounded, an ultimatum will be issued to Iraq, I expect this within 90 days. The 'UN has asked you, repeated and nicely, to inspect weapons according to laws A, B, C.............& W. You have not acted according to their simple requests. We (the US) now demand you to allow weapons inspections within 10 days or we begin to level your country'.

The world believes Hussein may have WMD, if he does not, then there is no need to hide anything. If he does then the question of his need for these weapons require immediate attention, perhaps circumvented by the evaporization of his country.

Nasty situation, nasty options.

Perhaps a 'trial ballon' (bomb) against Iraq will trigger the showing of hands in the M.E. Then we know where we stand.

This play has a short time to reveal itself.


Sierra Madre
Silvercollector: YOUR take on Iraq
Dear Sir:
If everyone on this Forum is going to put forth "his take on Iraq", this will degenerate into a free-for-all in short order.
There are as many "takes" on Iraq as there are posters here.
Let's steer away from this theme OK?
I propose that the only way to deal with this theme on this noble Forum, is to deal with the question:
Is there or is there not going to be a war on Iraq, or not, and if so, when? And I might add, what are the consequences?
That's all that is pertinent to the question:
Whither GOLD?

Sierra
Waverider
Black Blade
I read an article this morning in the Globe (unfortunately I didn't have time to post it, and it has since been removed) regarding a growing conflict between the oil producers and farmers on the prairies. The crux of the article was that the oil producers are using billions of gallons of water each year to recover oil and that the water table is being lowered, leaving the farmers "high and dry" as it were. The farmers are calling on the government to ban the use of water for this purpose. I skimmed Hubbert's Peak to find out more about the use of water to recover oil and saw a brief reference on p. 105. Is this a common method used to recover oil, or is it used only in Canada because we have an abundance of water? I watched the GlobalNational tonight and interstingly enough, a topic discussed was the upcoming world fresh water shortage - "the" topic of the 21st century. Apparently Canada has a quarter of the worlds fresh water supply, and only 0.5% of the worlds population. Is water being "wasted" as it were in oil recovery? What is the alternative? TIA and Cheers,
Waverider
Sierra Madre
Educating kids about GOLD
I have fifteen grandchildren and I can tell you from experience that the very best way to educate a child about gold, is to give him or her a GOLD COIN!

Just do it and watch! It's amazing!

Do that, and you will have done something that the child will never, ever forget in all his life.

Cheers, Sierra
Mr Gresham
Mikal
You: "Arabs are continuously reported to be planning an exodus from dollar denominated assets for fear of litigation and asset seizure and for spite, instead of the predominant reasons. Why would any foreigner want to retain a constantly devaluing $ "

Got me thinking (like a criminal, here) -- are they spreading a little disinfo around?

If the world at large is about to pull out of dollars on the next deval wave down, why not blame it on those pesky Ay-rabs! ("You wouldn't want to be like them terrorists, would ya kid?" and "Are ya with us -- or agin us?") OK -- Arabs are gone, write 'em off. Might hold the Europeans in awhile longer, though. Guilt by association, divide and cash in, or throw enough mud around and hope some of it sticks -- for just a little while longer.
Mr Gresham
Waverider, Sierra
http://www.hubbertpeak.comWaverider -- I spent some time at this link yesterday -- it's going to be the most important wall we've run into (since Vietnam?) in our lifetimes. It will just tear the guts out of our systems and force us into new channels. Meanwhile, lemmings over a cliff.

Sierra -- I envy your ability to perform that simple educational act with the grandchildren (congrats on such a full brood!) -- someday maybe the politics will be right for all of us to take that step, too. I hope!

Meanwhile we are able to speak the truth, or correct the falsehoods, in more or less abstract ways. But pulling out the shiny stuff -- that'll have to wait. Too many tales, carried too many places.

It's only when you've really grown up, that you can tell who the other grownups are, and who are the kids.

"Kids" -- or people who accept the role of "kids" -- aren't allowed to keep any real money of their own. Grownups take that right for themselves.

Ooops -- I'm gonna do my Social Security rant (half-remembered from while I was driving earlier today) -- h-e-e-e-ere it comes...
Mr Gresham
Any Social Security "Liberals" left out there?
You know -- you've hated just about everything the gov has done during your adult lifetime, but you still think "government can do some GOOD things, like, uh, Social Security! Yeah! That's it!"

I guess I could entitle this post-liberal rant "The Tyranny of Social Security" -- any Slate editors out there ready to take this on?

It is the natural order of things for Man to save for self-support in old age. Thousands of years, this was the thrust of wealth-building. Family, land, and gold.

Gov tried to set up a parallel system to cover those who failed at this basic goal. Well and good. At first.

But since Gov also mismanages the currency, and really Saves nothing anywhere for those it intends to support, it must foil the efforts of the independent savers, confiscate their holdings by various means, and force them all into dependence predominantly on its system. (Otherwise, its system looks bad compared to those who've done better saving outside of it.)

A Death Spiral for those who cannot escape its clutches. Those who can -- survival by any means...

A pretty likely surge for gold, when the next big wave of Social Security Demographic Disaster stories make the rounds of the media. 1945 Boomers hit 62 in 2007. And the race is on! -- to drain the fund before the others get there.
Sierra Madre
Sir Gresham: you fear the consequences...
of giving a child a gold coin?
That seems an understandable fear such as to be expected in the former Soviet Union, not a "Western" country where I presume you live.
I guess things are much worse than I imagined. And I am a great pessimist. Good Lord!
I say, give the child the gold, and explain WHY HE MUST KEEP QUIET ABOUT IT. You have gained a fellow "conspirator", he or she will always be WITH you. Kids NEED to understand the terrible world we live in. Too late when they are 25. That's education! But of course, you know best in your circumstances.
Sierra
Operative
Saudi Boycott of American Goods
http://www.worldtribune.com/worldtribune/front_2.htmlSnip:

"Sunday, August 25, 2002

ABU DHABI � Saudi Arabia's unofficial boycott on American products has significantly affected exports from the United States.

U.S. government data report that U.S. exports to the kingdom have reached their lowest level since 1990. Saudi sources cite the boycott that began in April 2002 for the reduced exports.
The boycott was encouraged by prominent Saudis and
advertised in newspapers, mosques, schools and over the Internet."
Black Blade
Re: Waverider � Oil and Water


Actually I think that the article may have been in reference to the Tar Sands projects in the Athabasca region. This oil is essentially an asphalt that is mined. There may be some that will be processed in situ, however, a lot of water and natural gas is used in the process of extracting the oil. Suncor Energy and Syncrude (actually a consortium of oil producers) are the main players along with several smaller companies. Natural gas is used to heat the water and the water in a simplistic description is used to stream the oil from the interlocking sand grains so that the oil can be mobilized and extracted. It is a potential conflict as the supply of natural gas is depleting rapidly and the issue of water rights remains an issue. Of course the tar sands hold nearly a trillion barrels worth of oil and Canada has the potential of becoming the OPEC of the north at a price. The quality of the oil is good but limited due to restricted natural gas and water supply. The farmers and ranchers are obviously concerned about their existing water rights and the growing demand for energy will put them at odds with the "miners". Right now most of these producers are recycling the water for reuse as one mitigating measure. The supply of natural gas may be met with new supply from the McKenzie Delta if the pipeline is built. However, the water issue remains the central issue. I don't know how this problem will be resolved as ground water certainly is no solution. Perhaps a pipeline for water from elsewhere of building several reservoirs for multiple use. Who knows, but the tar sands represent massive national wealth with employment opportunities for the region while the farmers and ranchers have a good reason to gripe.

- Black Blade
Golden Bear
silvercollector (msg#: 83781)
"...The world believes Hussein may have WMD, if he does not, then there is no need to hide anything. If he does then the question of his need for these weapons require immediate attention, perhaps circumvented by the evaporization of his country...."

Sir, the ultimate question has not been considered...WHERE did Saddam get his WMD's from? How conveniently the American media leaves these details out of its reports. Can you say CIA? Now that wasn't too hard was it?

And Americans wonder why their country is so reviled by the Arabs... your politicians have a lot to answer for....Oh, that's right, and it won't be their children that are shipped off to get killed in Iraq, it will be yours!

USA also has WMD's that were unleashed onto its own people(Anthrax)...should it be vaporized also?
Operative
Just for Fun
http://www.terrafly.com/Posted above link for those with insomnia. Type in your address and get a view from space of your house. Had to tinker with it for a few minutes, zoom in etc. but got it down to where I could pick out my house and barn. Thought some here might want to tinker while our brains are in neutral. Enjoy.
Mr Gresham
Sinclair Q&A
http://www.financialsense.com/editorials/sinclair/Q/0826_083102.htmAll my questions about leasing and markets, & more than I ever imagined I wanted to know -- I need repetition, I guess , to learn anything (and right now, it has ensured a good night's sleep)

Sierra -- yes, that is why I consort with the Grownups here. We live in a land of lawyers, in-laws, and layabouts -- hardly conducive to the quiet gathering of a lifetime's Wealth. Burdening a child with the defense against such would be asking the impossible.

Think of all the valuable parts of your education, and when they naturally occurred. (Yes, some seemed incredibly late -- same for me.) There is time. (I hope.)
Blackjack
Scandal Du Jour?
http://www.nytimes.com/2002/08/27/business/27WALL.html?ex=1031025600%26en=0e2929b33b46ada0%26ei=5035%26partner=MARKETWATCH&siteid=mktwOfficers and directors of WorldCom received thousands of shares of hot initial public offerings from Salomon Smith Barney in the late 1990's, according to documents delivered late yesterday by the firm to a Congressional committee investigating the collapse of WorldCom.

The documents submitted by Salomon, which were delivered in response to a subpoena, also indicated that Jack B. Grubman, the firm's former star telecommunications analyst, was part of the allocation process when shares of initial offerings were doled out to WorldCom executives.

The House Financial Services Committee issued a subpoena to Salomon on Aug. 13 seeking details on the firm's allocation of shares in initial offerings to WorldCom executives and directors during the boom for technology stocks. Such stocks often rocketed in their first day of trading, generating enormous profits to those lucky enough to buy them when they were issued and sell them before they fell. The committee was also interested in the role Mr. Grubman played in the allocation process. In his testimony before the committee in July, Mr. Grubman said he could not recall whether WorldCom executives received shares in hot initial offerings.
______________________
"could not recall"?
Scumbags, Crooks and Liars.


misetich
Intel Says Holiday PC Demand Rebound Questionable
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWswahTCSW50ZWwgSnip:

``There is always some anticipation of a holiday season up- tick in computer sales but whether that materializes or not is a question mark,'' Barrett said in an interview with Bloomberg Television.

Intel, the world's biggest computer-chip maker, will provide a revised forecast for third-quarter earnings on Sept. 5, Barrett said. The company earlier predicted third-quarter sales of $6.3 billion to $6.9 billion. Bear Stearns & Co. cut estimates on Friday for Intel's earnings in the third quarter, this year and 2003 on concern that demand for personal computers won't pick up during the rest of the year.

The semiconductor industry is emerging from the worst year in its 40-year history. Chip sales last year dropped by 32 percent to $155 billion, according to market researcher Dataquest Inc. Semiconductor makers expect the global market to grow slightly this year and forecast a rebound next year as customer inventories are depleted and orders pick up.

.............
``It's difficult, the computer sector is slow because of lack of corporate investments in IT infrastructure,'' Barrett said. ``Expecting someone to predict when the slowdown's going to end is probably a hopeless task at this stage. I can't tell you what the prospects are for the next three months.''

The Semiconductor Industry Association in June said it expects worldwide chip sales to rise 3.1 percent in 2002, missing earlier forecasts as an industrywide slump crimps demand. The industry group had earlier forecast 6 percent growth. It sees sales rising 23 percent in 2003.

...........
Personal-computer shipments slipped in the second quarter, as fewer consumers bought new machines and inventories became larger, research companies IDC Corp. and Dataquest Inc. said in July.
************
Misetich
Yep, US economic recovery is just "around the corner" -mind you this is a downward winding road in uncharted territory-

Those countries with huge US $ reserves must be sweating bullets looking over the abysss

Got gold?
silvercollector
Sierra, Golden Bear
Kuwait, first bombing of WTC, final bombing of WTC, paid suicide bombers in Israel, the list goes on.

Do we wait and see what Hussein 'blows up' next, is this really an option?

I did not say 'just nuke him'. Offer him the chance to prove himself, offer him the ultimatum for weapons inspections, it will be his choice 'to show or you gotta go'.

The build-up in the ME does not require a single shot if Hussein abids by the laws imposed from the Kuwaiti war.
misetich
Municipal Bond Investors Flee Stocks and Find Bigger Perils
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWr80RVYTXVuaWNpSnip:

By Darrell Preston and Loren Steffy


Phoenix, Aug. 27 (Bloomberg) -- Five years ago, Don Burns and his wife, Gerry, sank $160,000 of retirement money into municipal bonds sold to build the Oaks at Medina nursing home in Medina, Ohio. Three years later, the home defaulted, leaving the Burnses with $2,000 of their investment.

.........
With the Standard & Poor's 500 Index at a five-year low, investors are scooping up municipal bonds, attracted by steady payments of tax-exempt interest and the perception of low risk. Issuers sold a record $160.2 billion of munis in the first half of 2002.

Private investors owned $572.9 billion of the bonds at the end of March, a 33 percent rise in six years and a 7.5 percent rise from a year ago. Mutual funds hold $610.8 billion, a surge of 46 percent since 1996 and 8.9 percent in the past year. Banks, insurance companies, pension funds and securities brokers hold another $450 billion, according to the U.S. Federal Reserve Board.

Investors who view municipal bonds as a sanctuary from this year's 12 percent drop in the Dow Jones Industrial Average may instead find themselves in a dark corner of the U.S. financial markets, where the rules that govern equity investing don't apply.

Indadequate Disclosure

Unlike public companies, muni bond issuers -- typically states and city governments -- aren't required to file quarterly financial statements with the U.S. Securities and Exchange Commission or reveal information about their ability to make interest and principal payments.

About 40 percent of issuers provide inadequate disclosure, according to a May study by the National Federation of Municipal Analysts, which represents big institutional investors.

Pricing is largely at the discretion of the dealer that buys and sells the bonds. Some prices aren't published until a week after a trade. Regulation and enforcement efforts trail other markets.

``The municipal bond market is worse than the Wild West,'' says Kevin Olson, 41, founder of MunicipalBonds.com, one of the few Web sites that offer free price data to individual investors. ``There are laws and rules in the securities markets, but none seem to directly apply to the municipal bond market. There is no cavalry that will come to your rescue.''
*********
Misetich

Almost the whole barrel is full of rotten apples not just a few - as investors are being fleeced every which way they turn

Which investement/insurance - has stood up in this critical times? PHYSICAL GOLD - Get some

Got gold?

Golden Bear
silvercollector (msg#: 83796)
"...The build-up in the ME does not require a single shot if Hussein abids by the laws imposed from the Kuwaiti war..."

Agreed, however, be careful of supposed evidence put forward by US government where there really is none, just to achieve a personal agenda.

Cheers.
mas
Gold
You guys are really blowing your trumpets on Sadam. Great discussion on a gold forum, I guess he deserves everthing he gets. But why does it take ten (10) years to start it all over again, did we miss something on the way. Gee didn't some generals get side tracked because of their "furturisitc" opinions back then and now you want to do it all over again, ten years later. I smell a rat in here some where? All I can say is goodluck. Once it drag's out 2 far policy changes, correct?
sector
@misetich Only THREE out of 99 Current CUSIP Corperate Bonds...
...offered are AAA Rated by S&PA chilling statement on the weakened status of American investment grade bonds.

Exxon, Mobil and Warner Lambert are the only AAA rated bond issues available in the United States of America...the strongest economy on Earth.

Pretty soon we will see a revision of what AAA means...like the meaning of "is".

Tommy P
Sadam
The Only reason to enter Iraq is for the oil thats needed (along with Afganistan) and the NEW WORLD ORDER, Thats why Russia fought for 10 years in Afgan, and thats why U.S. is their now. The U.S. is losing its grips on the Saudi's therefore action must be taken to secure this black gold. You guys can hum and haw all you want but that's the bottom line. This 9/11 was predetermed just like the invasion of Kuwait along time ago. There's a battle of the titans out there between the governments vs banksters. To cripple the Saudi's they must freeze there assets. (Money talks no money no talk!) Anyways, imvho
sector
@Golden Bear How Saddam Got the "Bomb"...
...it wasn't the bumbling CIABill Gertz reveals in his new white-hot book just how foolish the CIA really is. Prosecuting its main ME spy, practically the only guy who could speak Farsi fluently. Gretz rightly fingers the CIA beltway bungling bureaucracy and politically correct stuffed blouses as truly blithering idiots.

So the CIA couldn't have been the ones who "Gave" Saddam the bomb. They are just too dim for that.

Saddam got the bomb from publicly available information. After all, it isn't rocket science.

The good news is he probably only has three of the things...and those are likely to be pretty unwieldy contraptions.
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sector
Saving depositors
It's not as easy as it seems in JapanPublished: August 26 2002 5:00 | Last Updated: August 26 2002 5:00
FT.COM

Most advanced industrial economies could debate changing the terms of guarantees on depositors' funds without sparking fears of a banking crisis. Japan cannot. That such a move is impossible shows just how far the country's financial system is from being in a healthy state.

Last week, in another example of backsliding on promised economic reforms, the government of Junichiro Koizumi admitted it was considering postponing the second stage of its plan to remove blanket guarantees for deposits. These guarantees were introduced successfully in 1996 to stop a run on the banks but have been a hindrance to market disciplines in the sector ever since.

Unlike most of the Japanese government's previous economic fudges, this one is not entirely misguided. Nor is it just driven by the vested interests in Mr Koizumi's political party. Lifting the guarantees would pose a serious threat to the banking system, which could further undermine Japan's fragile economy. Removing a safety net at a time of peril is unlikely to bolster confidence.

But that does not let Mr Koizumi off the hook. The point various governments have failed to grasp is that blanket deposit insurance is useful to buy valuable time to sort out a financial crisis. It does not allow you to forget the causes of the crisis.

Once stability is regained, financial supervisors must insist that solvent banks clean up their balance sheets. They must also be firm in identifying insolvent banks. The government should then temporarily nationalise them, clear out the failed managers and shareholders, provide public funds to recapitalise their balance sheets and finally put them back in the private sector.

On no account should the time be used to do almost nothing, allowing or even tacitly encouraging banks to continue propping up bust companies deemed "too big to fail". That merely ensures the big banks continue reckless lending in the knowledge that the government will bail out their depositors, and probably also their shareholders.

If the government's second thoughts on removing deposit insurance were backed by a cast-iron commitment to address the banks' fragility, it would be welcome. Japan's best hope of securing a robust financial system, a necessary condition for a sustained recovery, still rests on implementing these policies. But there is precious little to suggest the government will use another window of opportunity to pursue meaningful reform.

The best that can be said is that Mr Koizumi's policies have not exacerbated Japan's deep economic problems. That is hardly a great achievement for someone who promised so much.
++++++++++++++++++++++++++++++
One does not need "insurance" if one has gold in one's hands. Perhaps the Japanese will continue their moves to the yellow metal as World stability worsens.

Japan alone can smash the cabal with a big move to gold...the cabal knows this all too well. Thus, several visits to Tokyo by the good Mr. Robert Rubin in the last quarter.
a nation of one
re: richard's speech

Dependence, insufficiency, greed, aggression, theft, and depression are not the principles upon which our nation was founded; Independence, self-sufficiency, know-how and hard work, liberty, forthrightness, and prosperity were.

The American Republic is dead. And the Democracy has been allowed to rot. Any nation which -for whatever reason- engages in foreign adventurism is anathema to the peoples of the world. It will not be different for the United States. History teaches this: The eventual result will be national poverty and complete loss of power.

However much we may not wish that it were so, either our present form of government, therefore, must radically change (or else fall), or the authoritarian leaderships, perhaps through failure or disaster, but even perhaps through victory, must ultimately come to impotence and shame.

In any of these events, gold will still glister.
sector
LAWYER'S REPORT GIVES SOLOMON FITS
http://www.nypost.com/business/55676.htmBy BEN SILVERMAN
------------------------------------------------------------------------
August 26, 2002 --
DotcomScoop.com

A veteran securities attorney recently released a 107-page study all about WorldCom and Jack Grubman. And it's no surprise it has Salomon Smith Barney up in arms.

Stuart C. Goldberg, a former assistant U.S. attorney who has worked for both the Securities and Exchange Commission and the New York Stock Exchange, says WorldCom employees lost over $500 million on the company's own stock in retail brokerage accounts under Salomon's guidance. He issued the study last week on his Web site, PublicInvestorsAttorney.com.
+++++++++++++++++++++++++++++++++
More scandal for the Citi Bank subsidiary. Citi is the Federal Reserve's largest bank.

Grubman was paid a departing "Bonus" of $32 Million for his stellar performance in misleading shareholders and enriching insiders.
Operative
Do We Still Need The Saudis?
http://www.time.com/time/world/article/0,8599,331980,00.html?cnn=yesSnip:

"In the aftermath of Sept. 11, it's worth asking whether America truly still needs the Saudis. In economic and strategic terms, the U.S. can probably manage without them. Saudi Arabia today provides only 8% of the oil consumed by Americans. It accounts for 15% of the U.S.'s crude-oil imports, less than half the amount the U.S. imports from Canada, Mexico and Venezuela. That's a far cry from the 25% figure for 1973, when the Saudis, piqued by Israel's victory in that year's war,embargoed oil sales to the U.S. and prompted a 70% rise in crude prices. The Saudis' vast reserves give them the power to manage the worldwide price of oil, making them critical to the smooth running of the global economy. "
Tannehill
Operative @ msg# 83789 Saudi Boycott of American Goods
I suggest that Americans not buy any more gold that was mined, refined, or minted in Saudia Arabia, there that'll fix'em. :-)

That's all from Tannehill
Sierra Madre
Tommy P: about Iraq - your post 83801

I agree with you. This whole song and dance (of death) is about OIL. A "battle of titans" indeed. All these allegations about WMD and the "dangerous lunatic" Saddam are simple justifications for simple people who have to think in terms of a "just" war. The next war is not about "making the world safe from Saddam" but about controlling M.E. oil.

Gold should be smashed down soon, once again. Tomorrow? This afternoon in after-hours?

Sierra
Operative
More Not So Good News - Gov Sees More Years Of Running In The Red
http://ap.tbo.com/ap/breaking/MGAMHZH0E5D.htmlThe good news is, since government budgets are part of the GDP figures, maybe by running in the negative it will help the GDP remain positive. ?
Blackjack
What are these guys smokin'?
http://www.reuters.com/news_article.jhtml;jsessionid=ZUEJWFD3YLSFQCRBAELCFFA?type=topnews&StoryID=1377740WASHINGTON (Reuters) - The Congressional Budget Office on Tuesday slashed its forecasts of government budget surpluses over the next decade by 80 percent, in a report that underscored the recent slide in the U.S. fiscal position and provoked furious pre-election finger-pointing on Capitol Hill.

Congress' nonpartisan budget watchdog projected cumulative surpluses of just $336 billion from 2002 through 2011, down from the $1.7 trillion it last forecast in March. As recently as last year, the CBO was predicting 10-year surpluses of $5.6 trillion, a prospective windfall that has now evaporated.

The "vanishing surplus" has become a hot political issue ahead of November's high-stakes congressional elections, where small voting swings could shift party control of both the House of Representatives and the Senate.

The CBO also estimated the government would post a $145 billion deficit in fiscal year 2003 and confirmed its earlier forecast of a $157 billion deficit in fiscal year 2002, which ends on Sept. 30. The federal budget will not return to balance until 2006, it predicted.
______________
Long ago.....in a Galaxy Far, Far away.....there was a balanced
budget. With the baby boomers retiring in the coming years
there ain't a whoopin' holler of a chance of a balanced
anything,anytime soon. Surplus???? Its deficits (big-uns) as
far as your Jedi sword can swing. Check out state and local
budgets. Burn that dollar, and keep those presses, Rollin' Rollin' Rollin'.....GreenHide! (Sorry, I'm out of line, I know)
TownCrier
Weekly gold market commentary - charts
http://www.usagold.com/wgc.htmlI'm happy to announce the first half of the year has now been archived seperately, so this should load much faster for everyone using dialup internet service.

This week's report includes a moving average chart of the London PM gold fix showing year-to-date action at a glance.

Japanese gold buying for July was double last year's figures, and the latest revamp on Japanese deposit insurance is considering coverage to extend only to accounts that are not interest bearing -- still a positive element for gold any way you slice it.

Ms. O'Connell of WGC reports, "Professional activity was characterised by selling towards the highs early in the week as the $315/ounce level proved impenetrable, but subsequently tapered away ahead of the long week-end in the UK. The market is of the view that 'the funds' are now broadly flat in the gold market and that it is therefore in a period of true consolidation."

Gold from 2300 B.C. unearthed near Stonehenge. Click URL for more on that detail and others.

R.
Sierra Madre
Sir Gresham: thinking about education of children...
last night, I thought I might post a few more thoughts.

It seems to me that one of the problems parents face today is that they tend to lose a rapport with their children. Children today tend to follow the notions that prevail among their "peer group". This can be, and I think usually is today, highly dangerous.

Of course, I don't want to burden an eight-year-old with notions of a dangerous world out there! But, a twelve year old should definitely be "burdened" with that knowledge!

He or she must know that terrible times are coming, that he will need every cell in his or her brain to survive, and therefore must under no circumstances tamper with mind-altering stuff such as drugs.

A twelve year old must be given both gold, and knowledge of why it is important, and why it is important to keep his possession secret. Thus, he gains an identity. He is not the same as the others in his "peer group". He is special, he has and knows what his companions still do not. We certainly do not want our children to become simple "units". We want them to become individuals, sovereign individuals.

Children in the U.S. are kept in cocoons much too long. Some of them actually NEVER GROW UP. They are thirty-five and still playing games!

If we don't "tell it like it is" to a twelve-year-old, we are doing him a great disservice. We have to build our allies in the coming struggle, and the first and most important allies are our children.

A gift of gold is unforgettable, and when it goes with the profound reasons for the gift, is all the more significant.

Sierra
Blackjack
Liar, Liar, Pants on FIRE!
http://www.foxnews.com/story/0,2933,61409,00.htmlOrders for all transportation equipment soared 20.8 percent in July, more than erasing June's drop of 5.8 percent. Orders for cars, trucks and parts increased a strong 7.5 percent, following a 3 percent decline. And, orders for commercial planes and parts skyrocketed by 121.6 percent in July, a turnaround from the 46.6 percent decrease in June.
___________
This is truly BIZARRO!
Commercial aircraft orders up 121.6%????
Notice the .6% they threw in! WOW
Just yesterday I was reading about dozens of aircraft
lined up in desert parking lots....no buyers.
Airlines going belly up and.....presto....huge new orders!
Aristotle
Sir Sierra -- on children
Thanks for sharing this excellent bit of your view on the proper rearing of the next generation. Priceless and timeless advice.

--- Ari
Socrates964
Liar, liar...
unless the orders are from the military...
Operative
A Reminder to the Fearless Manipulators
Month end is at hand. It is time to sell your gold stocks, take the profit and pump that DOW up. Do It Now! The public is beginning to get a little worried about all the scandals, cover-ups, hedonic government figures, and LIES. They are starting to pull out billions, along with the Saudis, so don't delay. I have written a little ditty to help you accomplish your assignment, Hi Ho, Hi Ho, It's off to pump we go, A little here, A little there, and time to bop the gold.
Operative
Saudis Paid Protection Money
http://www.drudgereport.com/flash.htmHope the Rev Jesse Jackson does not read this, it may give him some new ideas on where/how to finance his love child, church, rainbow coalition, world travels, etc.
Operative
Do As I Say, Not As I Do
http://search.ft.com/search/article.html?id=020827000312&query=GRASSO&vsc_appId=totalSearch&state=FormRichard Grasso, head of the New York Stock Exchange failed to properly disclose some of his personal holdings. The leader calling for truth, transparency, etc is less than open in his own stock dealings. Anyone surprised? A few rotten apples? Yeah,...Right!
TownCrier
*POOF!* Just like that
http://biz.yahoo.com/rf/020827/markets_precious_3.htmlNEW YORK, Aug 27 (Reuters) - NYMEX palladium futures lead gains in the precious metals sector Tuesday, soaring more than 8 percent to a three-month high in a furious short squeeze with traders scratching their heads about the underlying reasons.

NYMEX September palladium settled $28 higher at $362.35 an ounce, striking its highest since May 21. Estimated volume was 1,408 contracts, frantic compared to many days when turnover in the illiquid palladium market barely exceeds 100.

"It's all been done just on the exchange," said a refinery dealer. "There are no fundamentals out there to suggest it should be higher. People were pretty short and the more the buying came in, the more it encouraged other buyers and as price moved up people had maybe bad positions on."

-----(see URL for story)-----

Similarities, differences.

R.
Mr Gresham
Sierra -- Sovereign individuals
Excellent! Your counsel is astute as always -- I think we're right on course for about age 12. Rapport is not a problem, and we are able to share so much of our minds already. As I said, what I have to watch out for is sharing TOO much detail, without first laying the educational foundation. But the child who is learning to be a "sovereign individual" will grasp the details quickly as you have outlined.

I will confess to you that in the dealings of parent/child confidences in a time of societal turmoil, two words pop into my head, probably from watching too many WWII movies: "Hitler Jugend" -- and I'll leave that thought be right there.

In yesterday morning's playing with counting of coins -- quarters down to pennies -- I was able to ask the "What is money" question, field a couple of answers, and respond with a couple of forward-looking thoughts. Anticipating the false views that have not even entered her mind, she will be learning two worlds at once, if I teach properly, and know the differences between them.

To have a sense of money, even as that sense changes for one and all of our "Western" view. Who knows, by the time she is 12, perhaps the false world will have revealed itself as such to even the childish adults.

Or, more fully, one cycle will have run its course, and she will live out most of her life under another cycle.

I was able to give my grown daughter "The Full Monty" -- or "Full Money"(?) conversation last month, and boy, did the words tumble out! I realized afterward that I was trying to make up for being at least two years remiss in keeping my fatherly counsel to myself. We'll see if she's located her likely coin dealer upon her next all-too-infrequent phone call.

In times when I ask myself WHY? did we have to get on board SO EARLY! it occurs to me (as it probably has to you) that one bonus is to bring the family members on board in a gradual and intelligent way, as well as the fuller education and preparations that we ourselves needed. You don't just BUY yourself a stateroom on the Gold Ark -- you have to learn how to crew it, to get your family somewhat acquainted with life onboard it, and even help with the finishing touches in building it.
Black Blade
Bears Not About To Hibernate Just Yet
http://www.timesonline.co.uk/article/0,,630-395745,00.html
Snippit:

It may seem hard to believe, given the share price bloodbath of the early summer, but most measures suggest that US stocks are still overpriced. Owners of American stock enjoyed an even greater bull run than investors this side of the Atlantic and the market has yet to unwind all of these gains. Market prices cannot run ahead of fair value for ever, as the experience of the past two years has shown only too well. And where Wall Street goes, the City follows, meaning that another bout of US stock market weakness can only hurt share prices here in the UK.

Black Blade: It is a real struggle for Wall Street as they lean on every scrap of data hoping to pump the markets on any good news. However, most of the news is horrible. The economy is in deep trouble and at risk of the "double-dip recession". Actually I am skeptical that the economy even emerged from recession with all the statistical massage so prevalent at the BLS and on Wall Street. Current data suggests that consumers are ready to call it quits and stop spending on "big ticket items".

Mr Gresham
Sinclair Q&A
http://www.financialsense.com/editorials/sinclair/Q/0826_083102.htmSinclair seems to be filling up his weekly page, each day, reading from the top down (as our daily page goes).

His market experience puts him way ahead of me in solving the POG market riddles, and then I wonder what kind of correctives to apply to that -- he doesn't seem to know the CB people or ME people directly (who does? that would post on an Internet forum, anyway) -- but he does seem to know his way into the mining community and some of the BBs (?) and the types of moves they would and do make.

So he doesn't really fill us in on the A/FOA picture's accuracy (but, again, who could these days?) but he provides so much detail (in my inexperienced view), it gives me a chance to learn my way in to the fuller picture from another angle.

I guess I am still surprised, after all these years, that none of our excellent commentators throughout the PM world -- you know all the names -- have taken on at least a partial confirmation or dismissal of the A/FOA scenario, but really just left it alone way over here. Yes, it has not been essential to them to make their bullish case, so maybe they have not been interested in going further than what they already have. Or maybe a USD-centered view has kept anyone from exploring the Euro-trigger theory.

They are so good at probing and asking good questions -- as we here try to be in our amateur ways -- that I would think these would be prime material.

But so much of the A/FOA foundation and possibility in Euro/oil relations has moved to the foreground, I would think that one of these people would run with it, and make it their own ticket to enhanced future reputation. Is it still THAT far out for them to explore?
TownCrier
WARNING: This is a gold investment related item
http://custom.marketwatch.com/custom/iwon-com/news-story.asp?guid={66AC5E67-9656-4934-95BD-982079DC4433}http://custom.marketwatch.com/custom/iwon-com/news-story.asp?guid={66AC5E67-9656-4934-95BD-982079DC4433}SAN FRANCISCO (CBS.MW) -- The late 1990s rush into technology stocks sparked record-high attendance at investment conferences.

The tech boom also rewarded big, albeit fleeting, profits to those who showed to listen to frantic, sometimes addled presentations of top executives like WorldCom's Bernie Ebbers and Gemstar's Henry Yuen.

The heirs apparent in a new age of hard assets and old-line companies are those gatherings devoted to precious metals and alternative investment strategies. Organizers say they expect standing-room-only turnouts for a number of gold-related conferences this autumn.

The theme of these gatherings, which are populated by a loyal band of mining executives, newsletter writers and natural resources analysts, is us vs. them. "We no longer live in a world where investments can be made in sound securities," says James Sinclair, chair and chief executive of small Tan Range Exploration Co. "We live in a world that has transformed everything financial into a grand casino, which we are all gone crazy enough to consider normal."

...The surge in respect for gold comes amid a 2002 performance that has the precious metal's spot price up 14 percent -- better than stocks, most bonds and interest-bearing cash accounts.

Main Street folks, to be sure, are getting burned by gold mining stocks, just as they have with tech stocks. The bullion group's 100 percent-plus equity gains this year eroded in June, leaving many individuals with a loss.

--------(click url for full article)-------

Good ol' physical gold. Some people will come late to the table after distractions by glittery substitutes. The ones of good counsel are already enjoying the feast.

Pull up a chair. Contact one of the brokers on staff at USAGOLD-Centennial and place your order. Through their dedicated services and professional connections, the rigors of obtaining gold are thus made easy for you. A phone call away.

The last word goes to a quote in the article by Bob Bishop: "Gold remains far off the radar screens of most investors. Higher prices and developments that will make it easier to own gold will raise gold's profile and also help to raise the price."

When the world comes knocking, its good to already have your seat at the table.

R.
Black Blade
US housing--bubble, bubble
http://www.upi.com/view.cfm?StoryID=20020826-062447-3540r

Snippit:

"Bubble, bubble, toil and trouble," is not what Macbeth's witches said. It is, rather, the phrase that has entered the language. And now, after one bubble has caused rather a lot of trouble, another is bubbling up. "Double, double toil and trouble," was what the witches said. And that is what the U.S. economic cauldron is cooking: Double trouble as a second asset price bubble is allowed to boil.

What are we talking about? It is a question, we fear, our readers often ask. But take this August economic commentary from the Mortgage Bankers Association of America and our meaning may soon become clear. It is about asset price bubble No. 1, now an ex-bubble: "Stock prices were hammered sharply lower over the past month, widening the losses of consumer wealth, raising the cost of equity capital to businesses, and taking a substantial toll on business and consumer confidence."


Black Blade: Life will get very "interesting" when the housing bubble pops. Investors are running lemming-like toward the abyss. We saw the little guy get killed in techs, then the markets, and now we see the same thing with real estate. Home sales rose even higher according to latest data � up 6.7% for new homes and 4.5% for existing homes. Investors are bailing out of stocks and looking for hard assets (including homes). Unfortunately when this current mania collapses, these people who are now buying second, third, etc. homes are going to be stuck with overvalued real estate when the Fed inevitably raises rates in the future, or else we can look toward Japan for a view of our future. Under valued assets like precious metals are now just starting to attract some interest, even among professional money managers and small investors.

Black Blade
Federal government's bookkeeping needs fixing, too
http://www.startribune.com/stories/587/3191036.html

Snippit:

WASHINGTON, D.C. -- Concealing debt and operating costs. Flouting court orders by shredding documents. Failing to properly track assets and liabilities. These misdeeds have blackened corporate America's eye and prompted criminal investigations and the wrath of Congress and President Bush. Yet these same accounting failures and sleights of hand have for years been common practice in the federal government, fiscal experts say. "There's been a lot of sanctimonious finger-waving in Congress at corporate CEOs and much of it is hypocritical," said Pete Sepp, a spokesman for the National Taxpayers Union, which promotes lower federal taxes and spending. The financial statements of many federal agencies are in such dismal shape that the General Accounting Office (GAO) -- the investigative arm of Congress that audits federal accounts -- has been unable to provide an opinion on the government's finances for the past five years.

Paul Posner, GAO's managing director of budget and strategic issues, said many federal agencies are unable to even prepare a financial statement to be analyzed. "They don't have clear knowledge and valuation of all their assets, all their property; a lot of their transactions are still not properly accounted for," Posner said. "Key [agencies] simply don't have records in sufficiently good order for us to even audit and make an opinion."

Additionally, many federal agencies are fraught with waste, fraud and abuse, according to a financial management report issued by the Office of Management and Budget (OMB) in May. The report details several accounting weaknesses, including billions of dollars lost in erroneous payments, billions more lost in a sea of unaccounted transactions between departments, and a lack of clear guidelines to manage assets and liabilities. "The government has a really poor track record," said David Williams, vice president of policy for Citizens Against Government Waste, a watchdog group. Williams cited the more than 2,300 laptop computers misplaced by the Internal Revenue Service in recent years, as well as the Pentagon's admission that it was unable to account for several trillion dollars.


Black Blade: To ask for honesty and ethics in government is a very tall order. It will never happen. If these people did not find a home in government, I would think that most would be in prison. The system is broke of course and far beyond repair. We can just sit by and watch it collapse and "hopefully" it will rise out of the ashes cleansed by fire. But I doubt it. So the only thing left to do is to "look out for number one". Get your houses in order � get out of debt (and stay out of debt), stash cash for several months� expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

Operative
@Sierra - Teaching the Children
Your post of this am was well said and filled with good advice. I would change one item in that I don't think I would give a 12 year a gold coin. In order for them to truly appreciate its worth and value, I think I would conjur up some project around the house/farm. Painting the barn comes to mind for me. Yes, paint the barn, take a week to do it which would provide ample opportunity to lay the groundwork for payday. Once the job is completed, a gold coin rewarded for his toils and lessons learned.

I had breakfast a few days ago with a elementary principle.
It was educational to say the least. This country (USA) is in deep trouble. The future is bleaker than any economic picture could paint. I make such statements based on a fact I learned over coffee. That less than 20% of the children in his school lived in a normal family environment. Normal meaning the man was married to his mother, and the man was gainfully employed and supported the family. The conditions that many of us grew up with, took for granted, are no more to be found. I dont have national figures, but I live in what I suppose to me a fair representative of a smallto midsize town.

This next generation coming along will need to be taught values first and foremost. Simple, values. Truth, honesty, good character, self reliance, thrift, all the things that will truly make each one stand out and more fully enjoy the journey on the road to success.

Sierra, I propose that you open an academy to teach of these things to all the young ones. For few, sadly, will ever be taught at "home". And perhaps you should allow for some older students as well? I can think of a dozen or so names who were very successfulfor a short time in the coporate business world, but failed miserably on a personal level because they lacked certain character/values.

If not a school to teach many, then perhaps we all will pass on these lessons one at a time. Making a difference where and when we can yes? Like the small boy walking on the beach, finding a starfish and tossing it back into the water. An older man watches this for awhile and finally tells the young lad, "Why waste your time? You cant possibly save them all or make a difference?" The young lad responded by picking up another starfish and tossing it into the approaching wave and replied, "It made a differance to that one!"

Continue on Master Sierra, your students await you.
Blackjack
Commercial aircraft orders up 121.6%? From Boeing?
Seattle, Aug. 27 (Bloomberg) -- Boeing Co.'s machinists may strike Monday, halting airliner production at the world's biggest planemaker, after union leaders said the company's final proposal for a new three-year contract doesn't meet their demands.

Boeing offered to boost pension benefits 20 percent, more than its initial proposal of 12 percent, and to give workers a higher bonus if they approve the contract. Boeing also proposed new shop-floor rules that the union has said could send jobs to outside companies.

The offer ``appears to be unacceptable on every point,'' said Matt Bates, a spokesman for the International Association of Machinists, which represents 25,000 Boeing workers at plants in Washington state, Oregon and Kansas. A strike wouldn't cripple the company, some investors said.

``They've been through strikes before, and it's just part of the business,'' said Brian Eisenbarth, who owns 180,000 Boeing shares in his $220 million Davidson Large Cap Value Strategy Fund. ``The timing is not necessarily that bad, considering that deliveries are down.''

Many of Boeing's biggest airline customers, reeling with losses after the Sept. 11 terrorist attacks, have asked for delays in jetliner deliveries.

The machinists are scheduled to vote on Boeing's offer Thursday and would strike Monday if it's rejected. The current contract expires Sunday.
_______________
This article says deliveries are down and customers have asked for delays in deliveries. BUT....this morning the durable goods report
said commercial aircraft orders up 121.6%. Even if the gain is
because it comes up from a low base of orders....still...its a bit
deceptive...durable goods are not so hot as the numbers released
this morning would indicate. To: Socrates, It says commercial,
that excludes military. That was my first impression also,
but this report says commercial aircraft.
Waverider
DAILY GOLD MARKET REPORT
http://www.usagold.com/DailyQuotes.htmlAnother excellent read of cutting edge information!
sector
Saudi King Faisal near death in a European hospital...Who Succeeds Him?
...Another time sensitive driverA known 9/11/02 attack from Al Qaeda is one explanation for GWB's rush to war. He wants to get retaliatory forces in place.

Another time sensitive driver is the pending death of King Faisal. There is bad blood between the heirs which could lead to coup attempts and subsequent Saudi turmoil. Such turmoil would not be good for the steady flow of Saudi oil to the US and World.

So IF turmoil is to happen, the US needs to be present in force to "Lend a helping hand" to Crown Prince Abdullah...if he asks...which he most certainly will do in order to thwart the Saudi Al Qaeda factions vying for power there.

Thus we see another driver for a rapid push of men and material to our brand new Qatari air base.

Without a US friendly oil producer we are up a creek. But the Prez can't SAY such a thing...so he trumps up a WMD story that few accept.

Oil is the thing. It won't go away this week...or next. The knee-jerk Administration renewed ANWAR pitch two weeks ago was an early clue. They just couldn't say at the time that we are about to lose our ME supplier to internal strife. Once the true agenda is out ANWAR will again quickly surface.

Gold can only benefit from such prolonged ME uncertainty. It is obvious that the cabal cannot continue offering its gold vault holdings in an attempt to hold back a tidal wave of war-related buying.

They will inevitably come to the conclusion that resistance is futile.
Blackjack
Bombardier gets bombed
Montreal, Aug. 27 (Bloomberg) -- Bombardier Inc., the world's third-biggest maker of commercial aircraft, said second-quarter earnings fell 65 percent as an economic slowdown in the U.S. cut demand for Learjets and other corporate airplanes.

Net income in the period ended Jan. 31 fell to C$101.4 million ($65.3 million), or 7 cents a share, from C$288 million, or 20 cents, a year earlier. Revenue rose 16 percent to C$5.71 billion from C$4.91 billion.

Money-losing U.S. airlines, which make up two-thirds of Bombardier's jet customers, are buying fewer planes and the company expects to lose orders from US Airways Group Inc., which filed for bankruptcy protection earlier this month. Customer UAL Corp.'s United Airlines is also considering a bankruptcy filing.

Bombardier hasn't been able to make up the shortfall in jet sales elsewhere. Its rail unit is struggling with defects on high- speed trains built for Amtrak and lost a $2.36 billion New York subway contract.
Sierra Madre
Operative: thanks so much for your kind words!
Also Sir Gresham and Aristotle, thank you.

About conditioning the gift: that's OK with me. As a matter of fact, I have a standing offer to the grandkids: learn a poem and you'll get a gold coin. (A very small one.) But there are birthday gifts, no conditions attached.

Very sad news you give me, about the social conditions: so many children live in truncated homes with only one parent. Not good at all! Nothing we can do about it. That's truly more important than any financial bubble whatsoever. Strong character can withstand adversity of any kind. Kids who have had a bad deal in life to start with are at a terrible disadvantage.

I'll say no more. I am sure that all who gather here are men and women of good will and we all do what we can, for ourselves and our loved ones.

Sierra

Blackjack
More internet bubble crooks
http://quote.bloomberg.com/fgcgi.cgi?mnu=news&ptitle=Top%20Stories%20World&tp=ad_uknews&T=news_storypage99.ht&ad=worldtop&s=APWvqQBZiRXgtQ3JpSan Francisco, Aug. 27 (Bloomberg) -- Jonathan A. Beck and Kevin P. Clark, former sales executives at Critical Path Inc., were charged with insider trading stemming from attempts to inflate the maker of e-mail systems software's 2000 revenue.

Federal prosecutors in San Francisco said Beck and Clark sold shares of Critical Path stock in January 2001 before the company publicly disclosed that it would not meet sales forecasts and had improperly booked sales.

The charges were the latest to be brought against Critical Path executives as part of a government securities fraud investigation of a plan hatched by company managers to misrepresent financial results.

Both men sold shares ``when they were aware that the company was recording false revenues in an ultimately unsuccessful attempt to meet its publicly stated goal of profitability during the fourth quarter of 2000,'' the U.S. attorney's office in San Francisco said in a statement. Beck and Clark face a maximum of 10 years in prison and $1 million in fines.

In conjunction with charges brought today, Clark and William H. Rinehart, head of Critical Path's North and Latin American sales, settled civil fraud and insider trading charges with the Securities and Exchange Commission. Rinehart, who the SEC said directed his sales force to arrange phony transactions, agreed to pay $110,000 in penalties. Clark agreed to pay $379,000.
_______________
I remember reading an article in Forbes that ranked Critical Path
as one of the top 10 "ramp-up" companies for the future. The
Forbes article went on and on about what a profit machine this was
and it would be one of the biggest winners of all time. Profits
were going to go up several hundred percent etc. Recently
Forbes had an article "Buy Pork, Sell Gold".
Golden Bear
sector (msg#: 83802)
Greetings sector,

thanks for the information re Iraqi nukes, I was not aware that Saddam was in possession of them. My earlier post was in reference to biological WMD's such as weapons grade anthrax.

Makes the ME situation that little bit more interesting....

Cheers.
Operative
Stock Indexes Article
http://ap.tbo.com/ap/breaking/MGAS2ZOAE5D.htmlThe author tries to put a positive spin on what is happening, but the figures for 2002 at the bottom of the article point out the troubles on Fall Street.

Blackjack
Pension Plans in trouble, really scary and very sad
http://www.msnbc.com/news/797829.asp?0si=-Old-line industrial firms have shrunken profitability, yet relatively big populations of retirees, dating from the days decades ago when they were dominant. At U.S Steel, for example, there are six retirees� and dependents for every active worker on the payroll.

Two weeks ago U.S. Steel warned in its quarterly filing to the Securities and Exchange Commission that the decline in the value of the stock holdings in its pension plan "will likely have an impact on future funding needs" of the plan.

� � � �Hearing this, Goldman Sachs warned investors that "continued weakness in the equity (stock) markets" and the resulting pension underfunding "could require (U.S. Steel) to make significant cash contributions to its pension plan." And, of course, every dollar used to replenish its pension fund is a dollar that's not available for paying dividends or investing in new ventures.
____________
This is a really scary article. Pension plans for many workers
are under funded. Some might not be around at all.
Perhaps money should have been invested in PMs not equities?
I really feel bad for the honest working stiffs, and then you
look at the pump and dump billionaires. The crooks who
lied about earnings, sold at the top. It stinks. Really stinks.
Golden Bear
a nation of one (msg#: 83806)
Well said Sir!

Time for Americans to realize that they are MEMBERS of the global community, not masters of it... and the very few who pull the strings behind the scenes need to be exposed to the harsh glare of light for all to see and reject their idiocy in favour of a world built on mutual advancement and co-operation...

Cheers.
misetich
Judge rules against KPMG in Lernout & Hauspie case
http://www.forbes.com/newswire/2002/08/27/rtr706176.htmlSnip:
In a ruling which was dated Aug. 19 but not made available until Tuesday, U.S District Judge Patti Saris said various offices of KPMG in the U.S and Belgium were exposed to "an escalating pageant of red flags" in Lernout & Hauspie's financial statements but did nothing to stop it.
............
In particular, the judge said KPMG US acted with "recklessness or actual knowledge," on various occasions including the preparation of Lernout & Hauspie's annual 2000 financial filing for 1999 with the Securities and Exchange Commission.
*************
Misetich
More than a few rotten apples in the barrel -

Got gold?
misetich
Master market timer Desmond sees more woes
http://www.forbes.com/newswire/2002/08/27/rtr706149.htmlSnip:

By Haitham Haddadin

NEW YORK, Aug 27 (Reuters) - Master stock market timer Paul Desmond warned clients to get out of stocks ahead of the October 1987 crash. More recently he proclaimed, also correctly, that stocks would carve out new lows this year.

Market timing, as Wall Street lore goes, is a futile exercise for individual investors. But such prescient calls have earned a strong following for Desmond, president of the Florida- based Lowry's Reports Inc., the 64- year-old market timing service that boasts a top notch client list.

As a technical analyst, Desmond studies stock prices and trade volumes. But he looks beyond popular averages into sectors and the strength of advancing and declining stocks, churning out daily, weekly and monthly reports on when to buy and sell.

Now, answering the million-dollar question on Wall Street, the pundit argues that the bear market that began in early 2000 is yet to hit its lows, despite the already severe declines.

"We never saw the kind of climactic selling in July we typically see at major market bottoms," said Desmond, who keeps track of upside and downside volume statistics, points gained and lost, breadth and momentum before issuing recommendations.

Desmond went out on a limb this spring when he argued in a report that the autumn 2001 three- year lows carved out in the wake of the Sept. 11 terror attacks were not the bottom. Indeed, stocks plunged even lower in July as wilting corporate profits and news of accounting shenanigans took a toll.

But even before the plunge, the solid analysis "Identifying bear market bottoms and new bull markets" in May earned Desmond the "Charles Dow Award of 2002", for best research paper. The award is named for the journalist who created the Dow Jones industrial average in 1896 and co- founded Dow Jones & Co. (nyse: DJ - news - people), publisher of The Wall Street Journal and Barron's.
............

Investor Profile: Master market timer Desmond sees more woes
Reuters, 08.27.02, 4:45 PM ET

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By Haitham Haddadin

NEW YORK, Aug 27 (Reuters) - Master stock market timer Paul Desmond warned clients to get out of stocks ahead of the October 1987 crash. More recently he proclaimed, also correctly, that stocks would carve out new lows this year.

Market timing, as Wall Street lore goes, is a futile exercise for individual investors. But such prescient calls have earned a strong following for Desmond, president of the Florida- based Lowry's Reports Inc., the 64- year-old market timing service that boasts a top notch client list.

As a technical analyst, Desmond studies stock prices and trade volumes. But he looks beyond popular averages into sectors and the strength of advancing and declining stocks, churning out daily, weekly and monthly reports on when to buy and sell.

Now, answering the million-dollar question on Wall Street, the pundit argues that the bear market that began in early 2000 is yet to hit its lows, despite the already severe declines.

"We never saw the kind of climactic selling in July we typically see at major market bottoms," said Desmond, who keeps track of upside and downside volume statistics, points gained and lost, breadth and momentum before issuing recommendations.

Desmond went out on a limb this spring when he argued in a report that the autumn 2001 three- year lows carved out in the wake of the Sept. 11 terror attacks were not the bottom. Indeed, stocks plunged even lower in July as wilting corporate profits and news of accounting shenanigans took a toll.

But even before the plunge, the solid analysis "Identifying bear market bottoms and new bull markets" in May earned Desmond the "Charles Dow Award of 2002", for best research paper. The award is named for the journalist who created the Dow Jones industrial average in 1896 and co- founded Dow Jones & Co. (nyse: DJ - news - people), publisher of The Wall Street Journal and Barron's.

The award was presented at the annual gathering of the Market Technicians Association (MTA), the national grouping of technical analysts. Desmond headed MTA between 1997 and 1999.

"He has done very good work in differentiating between what we associate with the market, the popular averages, and what is really moving the market," said MTA treasurer Richard Dickson, chief technical strategist with Hilliard Lyons in Kentucky.

EARLY ENCOUNTERS OF THE GRIZZLY KIND

Desmond's conservative style has roots in a very early education in the ravages market grizzlies can inflict.

Years ago, when Desmond was a Florida State University senior studying finance, he suddenly found himself custodian of his family's multimillion-dollar portfolio. His father suffered a series of strokes, and Desmond was entrusted with the portfolio packed with blue chips such as the Radio Corporation of America (RCA) as a market downswing was underway in 1962.

The novice investor made no money, but saved the family fortune by staying out of the market until the bottom in 1966.

By then, Desmond was stock picker for an investment club of a dozen college buddies who put up $25,000 each. He made a killing with picks like computer firm Control Data Corp.

"When you have seen a number of bear markets and the destruction that can occur to portfolios, you are able to change your strategy as the market changes," says Desmond, now silver-haired and much wiser at 62. "It makes you aware that you simply cannot just 'buy and hold'."

Desmond joined Lowry's Reports in 1964 as an apprentice and was taught by company founder, the late L.M. Lowry, who is recognized as one of the masters of technical analysis.

Desmond still vividly recalls the first time he arrived at the impressive three-story colonial Miami villa surrounded by palm trees that once housed the Lowry's Reports business.

"I thought -- if I go in, I'll be arrested," he told Reuters. But he had nothing to fear. The legendary Lowry took him under his wing.

"I offered to work for him for nothing. I just wanted to learn," says Desmond, who in 1972 bought the firm now based in North Palm Beach. "He agreed to hire me, almost for nothing!"

Now Desmond charges individuals up to $425 a week for the reports disseminated by e-mail, fax and express mail while institutional clients dish out a hefty $12,000 a year.

The fees match the company's sterling reputation. Desmond beams at rave reviews such as one from Money Magazine that called it the "Rolls-Royce of timing services."

"Paul is one of the great long-time market observers," said Ken Tower, chief technician at Charles Schwab unit CyberTrader Inc, a long-time subscriber.

BOTTOM SIGNS MISSING

In 1987, Desmond told clients to get out of stocks days ahead of the Oct. 19 crash after seeing "a series of indicators showing failing demand and increasing supply," he said.

More recently, after the lows in September, he issued a buy signal, just as a powerful rally ensued. And, on May 10, 2002, he warned clients in his reports to "go into heavily defensive positions" ahead of the latest market plunge.

In March he warned investors not to rush into illiquid small and mid-cap stocks that were on a tear. The Russell 2000 index of small-cap stocks <.RUT> sank 30 percent to about 350.
............
Since the July lows, the Street regained some lost ground.

But hold the bubbly, cautions Desmond, who believes key ingredients that define a major bottom still are missing.

Two indicators he uses -- 90 percent Upside and 90 percent Downside Days -- still point to lack of a definite low.

On a 90 percent Upside Day, points gained equal 90 percent or more of points gained plus points lost, and upside volume equals 90 percent or more of the sum of upside plus downside volume. This is the "panic buying" out of which bull markets are born and the reverse of this is a 90 percent Downside Day, which means "panic selling".

The selling after Sept. 11 never reached the panic proportions needed to weed out sellers and pave the way for sustained demand. Not one 90 percent Down Day was recorded. The same applies for the latest plunge.

Desmond's data show there were 14 such 90 percent Down Days in the New York Stock Exchange during the severe 1973-74 bear market. In the current, he spotted only two, in the spring of 2001, while a typical bear market has 5 such days.

Also, Desmond says stocks still are overpriced by historical standards. The price-earnings ratio for the S&P stocks, at 21 times earnings in July, was almost twice as high as the ratio of 11 typically seen at major market bottoms.

"This tells you there is more downside," he says.
**********
Misetich

Buy the dips, are being turned into "long......term investors"

Got gold?
Blackjack
Consumer spending is faltering, uh oh
http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1378283 NEW YORK (Reuters) - Sales at U.S. chain stores fell last week as stock market losses and concerns over a shaky economic recovery prompted consumers to stash their money away, two reports published on Tuesday showed.

Retail sales tend to mirror broader patterns of consumer spending, which accounts for around two-thirds of U.S. economic activity, so analysts pay close attention to the industry's performance.

Sales at the nation's chain stores fell 0.3 percent in the week ended Aug. 24 -- the third straight weekly drop -- following a 0.8 percent decline in the prior week, according to a report published jointly by Bank of Tokyo-Mitsubishi and UBS Warburg.

Meanwhile, Instinet Research's gauge of sales performance, the Redbook Average, slipped a sharp 1.6 percent during the first three retail calendar weeks of August compared with the same period in July, the company said.
___________
If consumer spending goes, more trouble for markets ahead.
Its consumer spending that has kept economy afloat.
Dollar will take a big hit. Got Gold?
misetich
Retail Sales Slip as Rebound Looks Shaky
http://abcnews.go.com/wire/Business/reuters20020827_424.htmlSnip:

Aug. 27

� By Pedro Nicolaci da Costa

NEW YORK (Reuters) - Sales at U.S. chain stores fell last week as stock market losses and concerns over a shaky economic recovery prompted consumers to stash their money away, two reports published on Tuesday showed.

Retail sales tend to mirror broader patterns of consumer spending, which accounts for around two-thirds of U.S. economic activity, so analysts pay close attention to the industry's performance.

Sales at the nation's chain stores fell 0.3 percent in the week ended Aug. 24 -- the third straight weekly drop -- following a 0.8 percent decline in the prior week, according to a report published jointly by Bank of Tokyo-Mitsubishi and UBS Warburg.
********
Misetich
Sooner than later stock market valuations need to reflect reality - say a 20% correction
Sooner than later US $ valuation need to reflect reality - say a 30% correction
Sooner than later corporations need to fund unfunded pensions - say ANOTHER 10% correction
Sooner than later corporations need to expense stock options - say ANOTHER 10% correction
Sooner than later corporations need to disclose their off-balance sheet items - say ANOTHER 20% correction
Sooner than later the US $ needs to reflect the above - say ANOTHER 20% correction
Sooner than later investment banks derivatives are going to blow up
Sooner than later....you got to get some PHYSICAL GOLD

Got gold?

Blackjack
UK: Savers losing nest egg,inflation erodes savings accounts, low interest rates a killer
http://money.telegraph.co.uk/money/main.jhtml?grid=M3&menuId=244&menuItemId=2849&xml=%2Fmoney%2F2002%2F08%2F28%2Fcmsav28.xmlSavers are having their nest eggs eroded in real terms by rock-bottom rates. Paul Farrow names and shames the worst culprits

Billions of pounds is held in savings accounts paying such abysmal rates of interest that in real terms the holders are losing money on the deal.

Inflation is running at two per cent, excluding mortgage payments. Experts calculate that basic rate taxpayers need to receive interest of at least 2.5 per cent to protect the real value of their savings from the effects of inflation and tax. But hundreds of bank and building society accounts are paying below this level.

Many more pay less than the 3.33 per cent required by higher-rate taxpayers just to break even.

According to MoneyFacts, the financial analyst, the average rate paid on a �1,000 balance in an instant savings account is 0.46 per cent. The average rate paid on �10,000 is 0.56 per cent. Average rates on notice accounts are 2.57 per cent and 2.7 per cent on the same basis.
______________
Even with low inflation, interest rates are so low, savers
are seeing their nest egg erode. Rates go down further,
inflation rises. Rates go up, housing, debt bomb blows up.
Either way, PMs will preserve assets. BUT, so far, money has
not made a big move to PMs. Maybe soon? Who knows?

Blackjack
Nortel to cut 7,000 more jobs
Brampton, Ontario, Aug. 27 (Bloomberg) -- Nortel Networks Corp. will cut 7,000 more jobs by the end of the year and said third-quarter revenue will miss its forecast because of a decline in spending on equipment by U.S. telephone companies.

North America's second-biggest maker of telephone gear will reduce its workforce to 35,000, compared with a previous target of 42,000 by the end of September, spokeswoman Tina Warren said. Third-quarter sales will fall as much as 10 percent from the second quarter's $2.77 billion. Last month, Nortel said revenue would be about unchanged.

Sales are falling because some operators such as Global Crossing Ltd. have gone bankrupt, while survivors including Sprint Corp. are cutting spending to preserve cash. Nortel said in a statement the latest reductions will let the company return to profit, excluding certain expenses, with $2.6 billion in revenue, versus the earlier target of $3.2 billion.

Shares of Brampton, Ontario-based Nortel fell 6 cents to $1.23 at 6:42 p.m. in New York Stock Exchange composite trading. They've plunged 83 percent in the past year.
silvercollector
Sierra Madre
I think you are missing my point, I will try again.

The US/Iraq situation is definitely about oil, the control of (cheap) future supply. This has EVERYTHING to do with gold. Cheap oil means a thriving economy, if the US does not secure cheap oil the economy is baked. Black Blade has taught us well on this score.

The WMD 'card' is simply that, the US can and may use it as a reason to invade Iraq. It seems to me that military has secured Afganistan, next is Iraq and finally Saudi. Recall the 'reasoning' for attacking Iraq 11 years ago was the humanitarian salvation of Kuwait. We know oil was the ultimate reason.

The US must convince allies that the reasoning for an attack
is to stop madman Hussein (as I outlined previously) using the tactic that I outlined earlier.

I believe that behind closed doors the US is trying to sell the question of "Who do you want controlling the flow of Gulf oil, Saudi/Iran/Iraq 'axis of evil' countries or us, the USA?"

The US can acheive a multi-point victory with the elimination of the likes of Hussein. Oil flow to Europe, India and China will be secured, cheap oil will flow guaranteeing continued economic prosperity for the US and hey, as an added bonus 'axis of evil' thorns and their WMD, real or imagined, will be history. Of course the media will pump reason last as the primary objective.
sector
The Sign of Ultimate Stress - A Clue to cabal Capitulation
Intraday Volatility of Bid/Ask Range of $10As we all look for a capitulation indicator, it may present itself in the form of sharply higher intraday gold price volatility�which would give the cabal great indigestion.

The last time a gold "Pool" was broken [1970's] Dresdner Bank turned from seller to buyer...they switched allegiance. Such a move today would indeed cause a sharp increase in intraday volatility and raise the sellers stakes markedly. The ledgendary Hung Fat and Dr. No would also feature prominently.

The cabal knows that they can be smashed by even a small group of gold buyers. Japanese speculators alone can do the job. They just need to have a little more faith that yen paper assets are trending further downward from 119 towards 133 to the dollar. A group of US hedge funds can do it alone as well, possibly with help from some Fed repos [What sweet irony THAT would be].

However it starts, once the gold buying trend enters the high volatility phase of say...$8 bid/ask ranges things will get very dangerous for the big banks that are short gold [JPM, C]. If we get to $320 by this Friday a bid/ask of $8 will then stress the $330 level. The cabal needs to avoid a $330 close at all costs.

The war for $330 COMEX gold may be more interesting that the war to "Liberate" Iraq. If we only could get a mini-cam into the COMEX gold pits! I would pay to see the sweating faces of the sellers. Perhaps someone here could fashion a baseball cap with a special logo "Hung Fat/ Dr. No Commodities, Inc". The Goldman Sachs floor mopes would croak.

Come to think of it the Administration has so many rigs [Silver, interest rates, Fannie Mae, IMF Brazil, Enron, etc.] to maintain they must be eating Gelusil tablets for breakfast lunch and dinner.


Cavan Man
sector
This "Hung Fat and Dr. No" business; what in the heck is it all about?
Black Blade
Re: Cavan Man

Good question - isn't Dr. No the character from a James Bond book/flick? I never heard of Hung Fat though.

- Black Blade
Humble Pie
Hung Fat and Dr. No
Cavan man I think Another' Big Trader = Hung Fat and Dr. nO . jUST A THOUGHT
Waverider
Re: Hung Fat and Dr. No - Gold Mines Exposed
http://www.financialsense.com/editorials/sinclair/052902.htmSnippit:
"...We know who does know. We can only identify these people to you as Dr. No and Hung Fat. They are running the gold market now, not the cartel. The cartel thinks it has an upper hand but it is in a bear trap that has already snapped closed on their financial legs. The Gold Cartel is so fat, egotistic and ignorant, they don't yet know they are dead in the water."

Waverider: Try this editorial from FinancialSense by Sinclair and Schultz.
sector
Hung Fat and Dr. No
Mythical gold buyers / market cornerers of 007 movie fameNow made famous a second time around at lemetropolecafe.com
Black Blade
Oil & Gas Markets React to Words of War - Puplava
http://www.financialsense.com/Market/wrapup.htm
Snippit:

War with Iraq is back on the front pages today with Vice President Dick Cheney making the most forceful and comprehensive rationale for an attack on Iraq. Cheney made the case for what Saddam wants, which is time to develop his weapons of mass destruction. Cheney said, "The risk of inaction is far greater than the risk of action." The President will address the Iraq issue in a speech next month at the UN. In what was a very forceful speech, the VP laid out the reasons why a regime change in Baghdad is necessary. The long public campaign for war is now about to begin.

The question remains: How much in the rise in oil prices reflects a "war" premium? Estimates range from $3-7 dollars a barrel. Yet the rise in oil prices since the beginning of the year reflects more than just the simple anxieties of war. The price rise reflects demand and supply constraints that are now being borne out in the price of crude. Even though world economies have been afflicted by recession and slow growth, total demand is expected to rise to 78.2 million barrels a day in Q3 of this year. That will put demand in the US above the peak of the energy crisis in Q1 of 2001. Furthermore, OECD oil inventories at 2.6 billion barrels only covers 56 days of demand. The IEA reported a second quarter stock build of only 500,000 b/d. The current stock build is down well below an average over the last five years of 800,000 b/d.

Oil prices isn't the only thing rising; the price of natural gas has also gone up this year with the current futures prices at $3.483, up 40% from the beginning of the year, and up 83% from its January 28th low. In the case of North American natural gas, the supply/demand balance continues to deteriorate. Despite record drilling during the boom years of 1999-2001, natural gas supplies failed to increase materially. Currently it is estimated that gas supplies, which have fallen as much as 5% this year, could drop off by 10% by year-end. Add severe winter weather into the mix and the US could face another energy shock. Mild temperatures and a recession solved the last energy crisis. However, weather, and not the economy, is the most important variable when it comes to energy.

The simple fact is that none of the energy alternatives, such as wind, solar, hydrogen and other forms of alternative energy, can grow fast enough to meet future demand. In his testimony this summer before Congress, Matthew Simmons, President of Simmons International, stated that there was a possibility natural gas supplies could fall as much as 10% in the next six months. If that happens, it could impact the US economy far worse than the oil shock of 1973. As Simmons points out in his testimony before Congress, if the US can't grow its electricity demand through lack of natural gas supply, it won't be able to grow its economy. These are some of the more serious issues facing this country as it now contemplates war. The price of oil and natural gas may rise and fall as perceptions change over war and supply. However, the long-term trend is clear; this country will, at some point in the near future, face another energy crisis more severe than the one we faced in the 1970's. This time the country has fewer reserves, is more dependent on foreign oil, and has less of an infrastructure to deal with the impending crisis.



Black Blade: A good commentary tonight. The focus is on energy as is today's Daily Gold Market Report, for obvious reasons. The attack today in north and south Iraq, and the visit of Prince Bandar to Crawford, Texas to talk to Dubya, and the subsequent reiteration that the US can expect no help from the Saudis. The obvious concern is over "cheap" energy. The SPR supply is low as one treasonous former president tapped the emergency supply for political gain. However, lately it is suspected that the SPR is being refilled for the inevitable build up and attack on Iraq. The US will do whatever is necessary to secure "cheap" energy, even if it means war. We are very fortunate to be caught in the throes of a deepening recession. I know that sounds bizarre, however, if it weren't for a warm winter last year and economic weakness; we would be fighting an energy crisis. Yet we in the west have done nothing to prepare for an energy crisis so we are only postponing the inevitable. Consider that Warren Buffett, George Soros and Bill Gates are making huge acquisitions in the energy sector (not to mention silver). As a side note, the antiquated energy infrastructure is in complete disarray. Most of our transmission lines that carry power are more than a half-century-old and most of our power plants were built before 1972. Energy demand will still grow in spite of the recession � energy consumption is fastest growing in India and China, and this demand will grow if the world emerges out of recession. Also, the growth of Internet traffic along with exploding use of wireless communications. This adds more pressure to the energy grid. Consider that just one web server consumes as much energy as eight 40-story buildings, and soon we will need thousands more, even in this recession. Where is all this energy going to come from? Now you see why we will do whatever we must to secure "cheap energy" no matter what. War is inevitable, with or without European or Saudi help. It's a done deal.

mikal
Hung Fat and Dr. No
Based on the gold champion Bill Murphy's use of the names it seems, to me anyway, they are an Asian/Russian CARTEL of gold buyers opposed to the CABAL (including bank derivative shorts, certain central banks, bullion banks, hedgers) and committed to free gold. One or both names originated from a Bond book/flick featuring a Russian Dr. No.
goldfool
The Tong vs. The Cabal - One criminal society against another?
During dinner, Dr. No explains his background when he was in the Tong Society (a Chinese version of the Mafia), with a cold, calculating, and precise manner:


Dr. No: I was the unwanted child of a German missionary and a Chinese girl of good family. Yet I became treasurer of the most powerful criminal society in China.
Bond: It's rare for the Tongs to trust anyone who isn't completely Chinese.
Dr. No: I doubt they should do so again. I escaped to America with $10 million of their dollars in gold.
Bond: That's how you financed this operation. It was a good idea to use atomic power. I'm glad to see you can handle it properly...
Dr. No: My work has given me a unique knowledge of radioactivity. But not without costs, as you see.
Black Blade
Drop in Confidence Raises Spending Concerns
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWukbxQsVS5TLiBF

Snippit:

Washington, Aug. 27 (Bloomberg) -- Consumer confidence dropped in August to a nine-month low as slow job creation led Americans to scale back expectations for the pace of economic recovery. The confidence reading may elevate concerns about the strength of consumer spending, which accounts for two-thirds of the economy. It came one day after Wal-Mart Stores Inc. said August sales at stores open at least a year would be at the low end of forecasts. ``It's worrisome,'' said William Sullivan, an economist at Morgan Stanley in New York. ``It creates the potential for more cautious spending in the months to come.''

Black Blade: Scratch one "economic recovery". We have long heard from the alleged "experts" on CNBC, CNNfn, and Bloomberg that it is the consumer that is propping up the economy because companies have stopped spending. We await the new spin on why the economy should recover now that this excuse just blew up.

Gimli_
BlackBlade: Where did you get this 'fact'?? Sources please...
"Consider that just one web server consumes as much energy as eight 40-story buildings"
Black Blade
Housing sales strong; so are bubble worries
http://www.washtimes.com/business/20020827-10502284.htm
Snippit:

The unusual strength of housing, fed by the lowest interest rates in a generation, is a boon to homeowners but raises concern that a bubble in home prices will burst and drag down the economy. Reports released yesterday showed new-home sales surging by 6.7 percent to a record rate of more than 1 million last month, while sales of existing homes rebounded by 4.9 percent after two months of declines. When combined, sales are on track to hit a record of about 6.36 million this year. Those strong sales have stoked large gains in home prices in recent years. Existing-home prices were up by 7.3 percent nationwide in the past year and have soared by 20 percent to 30 percent in Washington, New York, San Francisco and other major cities.

"I think we're in the middle of a bubble" that could end badly, with home prices tumbling in 2003 or 2004, said Ed Yardeni, chief investment strategist with Prudential Securities. He noted that Americans boast about the jumps in their home values much like they talked about their big technology-stock gains during the 1990s, much of which have evaporated. But calling the housing bonanza a bubble is "controversial," he added, partly because the extravaganza, while it lasts, provides benefits to many people, including homeowners, banks, insurers and appliance-makers. "There's no way around it. This is the Garden of Eden for consumers," he said, and the growth of housing has helped keep the economy afloat this year and last, despite record bankruptcies and weakness in other sectors.

Home values ballooned to $6 trillion nationwide, even as the stock market imploded and lost $7 trillion of value in the past 2� years. That left most consumers better off, because two-thirds of Americans own homes, while only about half own stocks. Americans have turned their growth in home value into cash through cash-out refinancings and home-equity loans, aided by the lowest home mortgage rates since the 1960s. The average rate on a 30-year mortgage hovered near its record low of 6.3 percent this week. The amount of home equity turned into cash through second mortgages doubled in the past two years to $200 billion, enabling consumers to keep spending during the recession and fueling other big-ticket purchases such as automobiles, Mr. Yardeni said. But consumers and banks could suffer a setback if the housing market is hit with sharply higher interest rates or other developments that cause a sudden loss of buyers and send prices down � the classic bubble scenario.


Black Blade: I ditto that!!!! I saw Jimmy Rogers on FOX last night with Neil Cavuto. He is convinced that we are experiencing a "housing bubble". Many other also agree, yet you will rarely see or hear them on US financial media. It is wishful thinking that the real estate boom will continue without end, much the way they thought of the dot.com, tech and telecom bubbles. Greenspan and the Fed have only 7 bullets left (at 25 basis points each). When interest rates rise, look out!

Zhisheng
Observation and Question
Black Blade comment on housing bubble."I saw Jimmy Rogers on FOX last night with Neil Cavuto. He is convinced that we are experiencing a 'housing bubble'. Many other also agree, yet you will rarely see or hear them on US financial media," observes Black Blade.

Rogers also has publicly spoken about the stock market bubble, even back in the years when the average stock investor was showing annual paper profits of better than 25%. And, while most other "bears" have been denied public TV exposure, Rogers has enjoyed many appearances on CNBC and elsewhere. What makes Jimmy Rogers exceptional in this respect?

Black Blade
Re: gimli � "Server farms"

There are various sources of information, however, the only one I have handy is:

Power Hungry: Strategic Investing in Telecommunications, Utilities and Other Essential Services by Roger S. Conrad

Obviously I meant to say "web server farm". Oops! The "World Wide Web" is growing by leaps and bounds eating up ever more energy. Several so-called experts have referred to the excessive energy use needed for server farms. The average server farm has been described as using anywhere from as much electricity to power a small city to a number of large downtown office buildings. Of course server farms come in various sizes and the description must refer to an average. Server farms have been brought online at the rate of about one a week. One would also have to account for the energy use in terms of electricity used during time of computer use by clients and the energy for transmission. It adds up.

Cheers!

- Black Blade
Gimli_
BB re: Server Farm Power Consumption
-- That makes more sense. Thanks! :-))
Blackjack
To : Sector
The war for $330 COMEX gold may be more interesting that the war to "Liberate" Iraq.

If Bush attacks Iraq, it might be hard to hold $330.

They could work together, as a team, like Hung Fat and Dr No?

Enjoyed the post. LOL
Black Blade
Re: Zhisheng � Jimmy Rogers


Rogers was one of the most successful managers in the market. He stressed valuation when it was unpopular. I have seen him in action while teaching. He used to teach investment/finance and he would grill students mercilessly on why a particular investment that they reported on would be a good investment. It was quite an eye opener. He has called the market quite well. As I understand it he was not averse to investing in technology for example, though he would question the business plan and viability of such companies as Dr. Koop.com, Pets.com, etc. while he would question the then valuations of Amazon, Yahoo, and ebay. The last couple of years he has been taking time off with his new wife to drive around the world. He recently resumed his investment activities. I guess ya just gotta take time out to spend your gains and smell the roses. Cheers!

- Black Blade
Gandalf the White
Help -- Sir Black Blade !
Can you give the Hobbits a link to the Prince Bandar in Texas story ? He is the one Prince, that loves games of "chance", and is of the unflinching bet type, WHEN he holds the right CARDS ! The "game" is getting interesting!
<;-)
Black Blade
WorldCom tried to gag whistleblower
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186043509&p=1012571727183

Snippit:

A former WorldCom executive at the centre of the $7bn accounting fraud at the telecoms group told an accountant in the company's UK office to stop talking to external auditors after he raised questions about accounting practices. David Myers, WorldCom's former controller, told Steven Brabbs, an internal auditor at WorldCom's UK office who had questioned its accounting methods, to stop meeting with the company's auditor, Arthur Andersen. "Do not have any more meetings with [Arthur Andersen] for any reason," Mr Myers wrote last January. "I do not want to hear an excuse just stop . . . Don't make me ask you again."

Mr Brabbs rose to prominence earlier this year after it emerged that he challenged decisions made by Mr Myers and Mr Sullivan in mid-2000 to reclassify $33.6m of WorldCom's line costs as capital expenditure. Mr Brabbs later revealed that he had received an e-mail from Mr Myers "indicating he was not pleased this matter had been raised with Andersen without his knowledge".

Black Blade: "Interesting"

Black Blade
Re: Gandalf - USA-Saudi divide
http://story.news.yahoo.com/news?tmpl=story&u=/usatoday/20020827/cm_usatoday/4393997

Snippit:

When Saudi Arabia's Prince Bandar bin Sultan visits President Bush's Texas ranch today, he will join a small list of world statesmen to receive the coveted invitation reserved for good friends -- or, as now, sensitive diplomacy. Yet Bush will need more than charm and an intimate setting to reverse a downward spiral in U.S.-Saudi relations, which are key to U.S. interests in the Middle East and broader U.S. security. Bush's dilemma is that deep differences between the USA and Saudi Arabia have opened up since Sept. 11. While the rifts can be papered over for now, they require a major rethinking of a 60-year-old friendship of convenience between the world's leading power and the top oil exporter.

Many Americans, angry to learn that 15 of the 19 hijackers were Saudi citizens, question why the U.S. government still considers a fundamentalist Islamic nation ruled by a repressive monarchy to be a ''friend.'' Earlier this month, leaked reports of a private briefing to a Pentagon advisory panel gave voice to that feeling. A Rand Corp. analyst argued that the U.S. government should view Saudi Arabia as an enemy that supports terrorism, and consider seizing its oil fields. The Pentagon disavowed the report, which provoked Saudi protests.

But tensions have only piled on the mutual anger. Earlier this month, U.S. relatives of World Trade Center victims filed a $3 trillion lawsuit against Saudi royal family members on charges that their money helped finance the terrorist attacks. Now, the Saudis are hinting they won't let U.S. authorities question Saud A.S. al-Rasheed, a Saudi citizen who turned himself in to Saudi authorities last week after the FBI put out a worldwide alert for him. The reason: His photo turned up on a disk with pictures of the Sept. 11 hijackers. The Saudis' stance only deepened U.S. frustrations over the royal family's patchy cooperation in the war on terrorism. Still, the Bush administration and Saudi rulers are bound by mutual needs: The USA needs Saudi oil, and the Saudi royal family needs U.S. troops to prevent its ouster.


Black Blade: The results of the meeting are being discussed on the visual media. I haven't seen it in print, however, on both CNN and FOX are reporting that Saudi will not allow use of their land bases for operations against Iraq � though they will allow US planes to fly over Saudi territory.

Black Blade
Dubya and the Prince
http://story.news.yahoo.com/news?tmpl=story&u=/020828/170/24lck.html
A picture of Dubya and Bandar bin Sultan (at the link).
Black Blade
New data may cast doubt on Japan recovery
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186028910&p=1012571727192

Snippit:

Japan may this week drastically scale back preliminary estimates for first-quarter growth, removing much of the gloss from what many had hopefully interpreted as a sharp rebound from the country's worst post-war recession. An improvement in the methodology by which gross domestic product is calculated could see revised GDP numbers for the first three months, due to be published on Friday, fall to about half the initial estimate of 1.4 per cent. The original figure implied an annualised growth rate of an improbable 5.7 per cent. "I think it is pretty much established that the new figures will show that GDP did not perform as well as originally stated because those initial figures were based on wildly exaggerated data," said Marshall Gittler, an economist at Bank of America in Tokyo.


Black Blade: Sounds just like the US. They must use the same people we do at the BEA and BLS. Hmm�

DOWNUNDER
@ SILVERCOLLECTER - - - WELL THATS ALL RIGHT THEN --NOT (MSG 847)
I don't think Sierra Madre is missing the point at all.From your message 781 throught to 847 you seem to be saying that America has the power & the right to attack another soverign
nation.Also you want to say it both ways. The USA GOVT has had a past history of backing the most despicable despots & murderers on the planet SO LONG as it suits their interests! No need to elaborate.Oil & keep attention away from the economy!

No proof has been offered by your shrub,only hot air & then some.There is NO proof of Iraq having N weapons -NONE.There are other more worthy targets --like CHINA for example who has exported N know how to many countries & who exports arms of all description. BUT that wouldn't be a walk in the park -would it? Some here on this site are now suggesting that shrub "knows" about some coming attack but cant tell so is just being pre-emtive! If you believe that I have a bridge to sell.

Its one thing to be patriotic but blatent sabre waving & threats are being seen by the REST OF THE WORLD for what they are--The acts of an absolute BULLY who is determined to have their way.There is not even much risk as bombs & missiles will rain down with impunity --mainly killing civilians! Its up to the ordinary people of the USA to reign in the war mongers--I hope they do it soon but I think it's too late.

This will all blow up in America's face if the lunatics have their way. It will be a shame for the millions of decent citizens who want no part in this.

This is a subject that I would rather NOT comment on BUT it is hard to read posts like yours without responding.

Gandalf the White
Picture of "Dubya and the Prince"
The Hobbits are feeling MUCH BETTER NOW !
Looks by Dubya's hands, that they are only about
<=============================================>
that much apart !
Thanks BB
<;-)
Black Blade
'Gold supply won't dry up soon'
http://www.news24.com/News24/Finance/Markets/0,4186,2-8-21_1248259,00.html

Snippit:

London - Investors in gold who are counting on a sharp fall in mined bullion supplies to raise prices may be disillusioned, metals analyst Kamal Naqvi said on Tuesday.


Black Blade: I usually would not waste my time with this article, however, it is amazing how ignorance of the mining industry is displayed by those who should know better. Many mines have been gutted by high-grading and the lower grades would not likely be mined even at much higher prices. Some marginal deposits would be mined though the profit margin would be thin at best. To reengineer a worked mine to recover low grade ores would in most cases be too costly and prohibitive. Starting up a new mine from scratch on short notice is a mere fantasy given the political realities of the real world. To the author's credit he does concede the last point. One thing most "analysts" miss is that as production falls and the world population grows, there is less gold per person. The argument that gold is not mined but accumulated and therefore is in excess supply is fallacious at best and is a flimsy attempt to minimize gold as a form of investment insurance. In all it is an amusing article.

Sierra Madre
Silvercollector: Thanks for your interesting and realistic clarification!
Your post earlier today regarding the crucial importance of U.S. getting hold of M.E. oil is clear and I quite agree - so far as my agreement as a single individual can reflect the very obscure realities of geopolitics today. We can only guess at what is going on, using reason and some experience as a guide.
Now, a question: will control of M.E. oil, even if fully achieved, pull the U.S. out of the enormous financial hole into which it has dug itself?
Suppose U.S. acquires absolute world-wide power and holds undisputed sway over the M.E. Does that imply that its financial woes are over and its Blue Skies from Here On?
If that were so, gold would go to the pits, yes? The dollar almighty rules for who knows how much longer.
Or - is the U.S financial swamp going to remain an intractable problem? Trade deficits and exported inflation to the rest of the world, as far as the eye can see?
Does control of oil eliminate Budget Deficits looming?
What are other, better brains on this Forum thinking about this? I'd really like some opinions on this subject.

Sierra
Sierra Madre
Downunder - I agree with you too, but I must explain my previous post...

I agreed with silvercollector that what this "liberation of Iraq" is all about, is about OIL. Not that the war to get Saddam Hussein is "justified". It will certainly not be a "just" war! The US under Bush admin. wants the oil and proposes to get it by force. Rumsfeld sermonizing the troops and Cheney ranting is just "pep talks". "We want the oil and we are going to get it, no matter what" is what these men are really saying.
Just consider that the U.S. is seemingly preparing to bomb Iraq into the dust, "vaporize" it if necessary, BECAUSE SADDAM IS A MENACE TO PEACE! What kind of logic is that, please? "Make war to make peace" Orwell lives!!
I suppose Empires never have cared about justice. That's the way they are.

Sierra
Black Blade
Asia Awash In Red and Europe Starts Off Ugly
http://quote.yahoo.com/m2?u
Asian markets plunged and Euro markets are starting off in negative territory. The global economy is in deep trouble and everyone is looking to the US consumer to salvage what is left. Yesterday's plunge in consumer confidence and other weak data suggest that we are coming to the end game. Time to go defensive.

- Black Blade
Black Blade
"The Barbarous Relic Files" - Cambodian Workmen Unearth 27 Solid Gold Buddhas
http://www.reuters.com/news_article.jhtml;jsessionid=T4SP0I1XEELBICRBAEOCFFA?type=worldnews&StoryID=1378503
Snippit:

PHNOM PENH, Cambodia (Reuters) - Cambodian workmen have unearthed 27 solid gold Buddha statuettes, buried for hundreds of years beneath the foundations of a ruined pagoda hidden deep in the jungle, officials said Tuesday. The statues, about four inches high and each weighing around one pound, came to light at the weekend when builders started restoration work on the centuries-old pagoda destroyed by the Khmer Rouge in the 1970s. Four statues made of silver and bronze were also found beneath the sandstone pagoda, which is believed to be at least 200 years old, making the Buddhas even older.


Black Blade: Sure is a lot of excitement over a "barbarous relic". Hmmm�

Blackjack
Nigeria just defaulted on $33 Billion debt!
http://news.bbc.co.uk/2/hi/business/2220219.stmNigeria has said it can no longer afford to service its $33bn foreign debts because of plunging oil revenues and the failure of some of its privatisation plans.

Consequently, the country has suspended payments on its debts, said Central Bank governor Joseph Sanusi.

Last month Nigeria - one of the world's largest oil-producing nations - held foreign exchange reserves of only slightly more than $8bn, down about a fifth since December.

The external sector of the economy was under pressure during the period under review.

Mr Sanusi said he had decided to halt all debt repayments rather than to eat further into the reserves.

Most of Nigeria's debt is owed to foreign governments, members of the Paris Club of official creditors.

Earlier this year, Nigeria parted company with the International Monetary Fund about how best to achieve a turn-around in its economic fortunes.
______________
Thats about 10% of Brazil's debt. AND Nigeria has oil!
I wonder what "foreign" banks are left holding the bag?

Plunging oil revenues? Are they exporting less?

Prices are good for oil right now. Or, maybe they decided with
others doing it, they can get away with it. There may be a feeling
among debtor nations that once a few countries default on debt,
its easier for them to say...hey... hell....no, we won't make payments
either. It could turn into a tidal wave of defaults. Why should one
small debtor nation make payments when everybody else is
defaulting?

Got Gold?
Black Blade
Merrill Ordered to Pay Couple Millions
http://biz.yahoo.com/rb/020828/financial_merrill_report_1.html

Snippit:

NEW YORK (Reuters) - Merrill Lynch & Co. (NYSE:MER) was ordered to pay a Pennsylvania couple $7.7 million in one of the largest awards to individual investors by a securities firm, the Wall Street Journal reported in its Wednesday online edition. A private arbitration panel ruled that Merrill Lynch did not advise Douglas and Deborah Millar on strategies to protect the value of their investment in Internet highflier FreeMarkets Inc. and failed to execute an order they placed to sell half of their stake before the stock tanked, the Journal reported.


Black Blade: Here's a precedent that could ripple through the Wall Street. The plaintiffs had control over their investments and this outcome could encourage many others to seek redress. With over $7 Trillion in evaporated wealth over the last 2 and half years, I would expect lawsuits and more arbitration to come out of the woodwork. You are not likely to hear about this on CNBC.

Black Blade
More Bad News For Wall Street

Consumer spending is falling off a cliff. As it is the consumer who controls two thirds of the economy by spending, this is bad news indeed. Chain stores and discount retailers like Wal-Mart and Target report grim results during this "back to school sale" period, which is the second most important sales period of the year. Back to school sales are a barometer of what to expect for Christmas sales. It looks like a "Grinch Christmas" this time around. The "durable goods orders" report suggests that the only pick up was in airline parts along with items like autos and appliances on sale with zero percent finances and the real estate bubble that relies on very low interest rates. In a word � "Grim".

- Black Blade
Blackjack
Found this on JPM website
http://www.jpmorganchase.com/cm/cs?pagename=Chase/Href&urlname=jpmc/about/mktleader/ibJPM Investment Bank

* Awarded "Bank of the Year."

* Named "Loan House of the Year."

* Named "Emerging Market Bond House of the Year."

* No. 1 in global syndicated loans.

* Named "European Equity-Linked House of the Year."

* No. 1 in Latin American debt.

* No. 1 in European cross-border M&A, No. 2 European M&A, No. 2 Germany M&A and No. 1 Spain M&A (completed advisory).

* No. 2 in global bonds, global investment grade bonds, U.S. domestic bonds and Yankee bonds.

* Awarded "World's Best Debt House."

* Awarded "Derivatives House of the Year."

* Named "Best overall foreign currency provider."

* Top foreign exchange bank (market share pro forma.)

* No. 5 in global M&A (announced advisory).

* No. 2 Asia/Pacific advisory (announced and completed).

* 15 Institutional Investor-ranked "All America" equity research analysts.

* No. 3 in European convertible securities.
__________
Sounds like a David Letterman Top 10
I would not want to be JPM right now.

"Derivatives House of the Year!" Award? LOL

Got Gold?

To Downunder : I agree, since the Berlin wall came down we
have used our military a lot.
Blackjack
German business confidence falls, Spain economy slows
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APWyFixU2R2VybWFuFrankfurt, Aug. 28 (Bloomberg) -- German business confidence fell to the lowest level in six months in August, suggesting the recovery in Europe's largest economy is faltering.

The Ifo institute, which surveys about 7,000 companies, said its index of western German business confidence dropped to 88.8, from 89.9 in July. Economists had forecast a drop to 89.5.

Germany, which accounts for about a third of Europe's economy, is struggling to expand after last year's recession. Siemens AG is adding to the 4,600 job losses at its cell-phone division. KarstadtQuelle AG, the biggest owner of department stores in Germany, said demand may not recover until next year.

``The reluctance to spend is hitting us hard,'' said Walter Had, chief executive officer of Weru AG, Germany's biggest maker of doors and windows. The company last week cut its sales and earnings forecast.

The revival in the U.S. economy, destination of about a 10th of Germany's exports, is losing momentum. Consumer confidence fell in August to a nine-month low, figures yesterday showed. The world's largest economy grew an annual 1.1 percent in the second quarter, down from 5 percent in the first three months.
_____________
Madrid, Aug. 28 (Bloomberg) -- Spain's economic growth slowed in the second quarter, close to a nine-year low, because of a slump in tourism and a slowdown in consumer spending.

Gross domestic product expanded 0.4 percent, down from 0.5 percent in the first quarter, the government said in a faxed statement. The economy expanded 2 percent from a year ago.

Consumers in Europe's fifth-biggest economy aren't spending as much because they're worried about losing their jobs. A drop in tourist visits from the U.K. and Germany is also slowing economic growth. Iberia Lineas Aereas de Espana SA, Spain's biggest airline, said revenue fell 3 percent in the quarter.

``The current market environment is difficult,'' said Jaime Puig de la Bellacasa, a director of Sol Melia SA. Sol Melia, the largest hotel chain in the Spanish-speaking world, cut its 2002 profit forecast this month after posting an unexpected loss in the second quarter. Tourism is Spain's biggest industry, accounting for 12 percent of the economy.
DOWNUNDER
YA GATA READ THIS - - - "I C ALL IT TREASON" by Doug Mc Intosh
http://www.gold-eagle.com/gold_digest_02/mcintosh082902.htmlThings are hotting up - - -

SNIPS--
"The man is nothing but a common criminal of the white collar type. I openly and publicly call the FED chief a traitor, a coward and a common white collar criminal. The system is beyond accountability and I have a bad feeling this will end in blood."

"Mr. Magoo will eventually be allowed to crawl off and rot somewhere. Sir Greenspan the criminal has been recognized for his economic contributions to our age. Do they mean a culture of business and political corruption? Or how about the stock and housing bubbles? Perhaps they mean Mr. Magoo's manipulation of the stock and gold markets. Yeah, Mr. Magoo sure has made major contributions to our age. As for President Pretzel, he's in a class all by himself. Our very own wannabe f�hrer, along with his police state. The economy is going to hell rapidly. The retail sales show the sheeple have figured it out. It's wag the dog time. If Bush is stupid enough to actually invade Iraq, a chain reaction of events will bring the end of our age. All in the next five years or so. Enjoy yourself and live each day to the fullest."
Blackjack
Ya gotta luv this
Berlin, Aug. 28 (Bloomberg) -- Germany is lobbying the U.S. government to exempt companies whose shares are traded in the U.S. from rules requiring executives to vouch for their financial statements, Justice Minister Herta Daeubler-Gmelin said.

``We really have to do some straight talking to sort this problem out quickly,'' Daeubler-Gmelin said in an interview with Bloomberg Television. ``What disturbs us in Europe is that we're supposed to act as if the U.S. way is sacred.''

The BDI industry association said last week DaimlerChrysler AG and other German companies whose shares are traded in the U.S. are seeking an exemption to the new U.S. law requiring managers to vouch for their financial statements.
_______________
Globalization having problems?


Black Blade
Scandals Galore � Let's Make A Deal
http://www.washingtonpost.com/wp-dyn/articles/A62454-2002Aug26.html

Snippit:

Ever wonder what might have caused the telecom bubble to get so bloated before it popped? A contributing factor may have been executives at marquee telecom firms that boosted stock prices through some sweetheart deals, according to a The New York Times article that ran Sunday. Execs from big telecoms like WorldCom, Qwest Communications and Time Warner Telecom were rewarded with stock from start-up telecom equipment companies that their own firms cut deals with. Executives were then often able to flip the stock and make a fat profit, according to a number of deals the newspaper wrote about -- deals it said were not previously disclosed in SEC filings. "And because winning a contract from an established company was pretty much all an upstart company needed to become a stock market star, the transactions help explain why so many untested equipment makers were able to raise money from the public, only to collapse shortly thereafter," the article said.

Black Blade: More schemes and scams than you can shake a decimated brokerage statement at. The little guy does not have a chance against these crooks. I suspect that we will see many more "perp walks" and shareholder lawsuits in coming months.

Blackjack
Israel ready for War
http://www.atimes.com/atimes/Middle_East/DH28Ak01.htmlIn that event, Israel will strike back and with commensurate force and weapons selection. "If they hit us, we reserve the right of response," says Ben-Eliezer. And according to top military analyst Zeev Schiff, writing in the Haaretz daily, retaliation might well include a nuclear strike. Such commentary by an analyst with high-level military connections is, of course, in part penned for propaganda purposes and designed to reinforce deterrence. But, though Pentagon analysts assign it a very low probability, an Israeli nuclear counterstrike cannot be ruled out.

Israeli intelligence has formed the opinion that Saddam has been speeding up chemical and biological weapons production since late last year. It also confirms a January German foreign intelligence (BND) report saying that Iraq is within at most three years of acquiring a nuclear weapons capability. The BND estimate is based on human intelligence sources (humint) as well as close monitoring of deliveries to Iraq of machine tools and other equipment required in nuclear weapons production.

Under these circumstances, the Israeli government believes that the US should strike Iraq sooner rather than later. "Postponing the action to a later date would only enable Saddam to accelerate his weapons program and then he would pose a more formidable threat," said Ra'anan Gissin, a top aide to Prime Minister Ariel Sharon. Foreign Minister Shimon Peres also supports an early attack, telling CNN on August 16 that while the operation would be "quite dangerous ... postponing it would be more dangerous".


Black Blade
European Markets Look Ugly
http://quote.yahoo.com/m2?u
The Euro markets are all negative this morning. US market index futures are negative as well. It could become "entertaining" today.

- Black Blade
Golden Bear
Blackjack (msg#: 83885)
"...Under these circumstances, the Israeli government believes that the US should strike Iraq sooner rather than later. "Postponing the action to a later date would only enable Saddam to accelerate his weapons program and then he would pose a more formidable threat," said Ra'anan Gissin, a top aide to Prime Minister Ariel Sharon. Foreign Minister Shimon Peres also supports an early attack, telling CNN on August 16 that while the operation would be "quite dangerous ... postponing it would be more dangerous"..."

It is intereting that Israel should tell USA to attack Iraq, but nowhere do I see an offer for US forces to use Israeli bases for launching the attacks, especially since American taxpayers paid for the bases...
misetich
Ebbers Got Million Shares in Hot Deals
http://www.nytimes.com/2002/08/28/business/28WALL.htmlSnip:

By GRETCHEN MORGENSON

Bernard J. Ebbers, the former chairman of WorldCom, received almost one million shares of stock in hot initial public offerings from Salomon Smith Barney over four years, according to documents released by a Congressional committee investigating the collapse of WorldCom.

Six other WorldCom executives or directors received the opportunity to buy thousands of shares as well. Among them was Scott D. Sullivan, the chief financial officer who oversaw the company's books during the years when $7 billion in accounting misstatements were made.

The documents, submitted under subpoena Monday by Salomon to the House Financial Services Committee, show that Mr. Ebbers received 869,000 shares in 21 companies from 1996 to 2000. The largest allocation to Mr. Ebbers was 205,000 shares of Qwest Communications, a telecommunications company that went public in June 1997. Salomon led the group of brokerage firms that sold the company's shares.

In November 1999, Mr. Ebbers received 20,000 shares of KPNQwest, a European venture by Qwest. That allocation is remarkable because it represented 2 percent of the shares Salomon had set aside for all of the firm's individual clients. And the 10,000 shares of Juno Online Services that Mr. Ebbers received in May 1999 represented 1.1 percent of the shares the firm gave to its entire network of individual investor clients.
............
The Salomon documents indicate where big chunks of some of these offerings were going and therefore why it was hard for small investors to get in on the deals. It is unclear how much the WorldCom executives profited on the shares they received from Salomon because data surrounding their sales of these shares were not made available.

At issue is whether Salomon handed out such allocations to ensure that companies like WorldCom continued to give the firm investment banking business. "There's nothing wrong with favoring your best customers," said Lewis D. Lowenfels, an authority on securities law at Tolins & Lowenfels in New York. "But when you see a pattern of this coupled with the magnitude of it at the same time that the individual's company is paying substantial investment banking fees to the underwriter, it has to raise questions of whether there was a quid pro quo. If there was, then federal securities laws may well have been violated."

The violation would involve the failure to disclose to investors that significant numbers of shares were being allocated to executives of large clients.

When it released the documents Monday, Salomon said it was industry practice to give its best customers the largest allocations of initial public offerings. Salomon has denied that it gave Mr. Ebbers the shares to cement the firm's already close relationship with the executive and WorldCom.
...........
This confirms that Mr. Grubman was centrally involved in the initial public offering allocation process at the firm, as former employees of Salomon have said. In his testimony before Congress last month, Mr. Grubman said he could not recall whether WorldCom executives received allocations of initial offerings.

Typically, research analysts have nothing to do with determining who gets shares in an offering.
...........
"These documents certainly show that this was a farflung enterprise at Salomon connecting the research department, the underwriting area, the retail brokers and directly aggregating all the people who were in the so-called telecom mafia to be the beneficiaries," said Jeffrey L. Liddle, a lawyer at Liddle & Robinson in New York who is representing Mr. Spartis and David Chacon, a former broker at Salomon who worked with telecommunications executives in the firm's office in Los Angeles, in their cases against Salomon. "Now we need to get the testimony of these people."

Congress may soon oblige. Representative Paul E. Kanjorski, Democrat of Pennsylvania, said: "Now that Citigroup has disclosed to the committee that its subsidiary Salomon Smith Barney made questionable I.P.O. allocations to WorldCom executives and officials, the committee has all the more reason to investigate whether other major investment banks have been doing the same for executives or board members of their major clients."

Mr. Ebbers and others may also have received other still undisclosed shares through trusts, partnerships or limited liability corporations. The subpoena issued to the firm requested allocations given the executives themselves and may not have included other accounts from which they also benefited. Such accounts are considered to be institutional and details about them may not have been released.

"Many corporate officers had partnership accounts in different names," Mr. Chacon said. "You'd see multiple allocations to the same individual under different names." Mr. Chacon was fired from Salomon for violating corporate policy.
............
***********
Misetich

Just a few rotten apples, infectious greed - baloney - this is fraud
Investment bankers "industry practice" have left millions of investors broke

Got gold?



Black Blade
PGMs Rocket Higher
http://www.kitco.com/market/
Platinum and Palladium are rocketing higher on concerns that Russia will find it difficult to deliver again (gee what a surprise). It has been long known that the Russian stockpile is depleted and that current production is largely by-product from the Norilsk Nickel production. The rumor is that the stockpiles were depleted during the Russian Bond Default of 1998 when there was a mad scramble for hard currency. Since then PGM supply from Russia has been erratic at best even though Russia has made various excuses to explain the delivery problems. Meanwhile silver is slightly higher and gold is recovering from weakness in London trading to pull back within striking distance of yesterday's highs.

- Black Blade
Black Blade
OPEC Sees World Oil Demand Growing To 89 Million B/D By 2010
http://biz.yahoo.com/djus/020828/0859000293_1.html

STAVANGER, Norway -(Dow Jones)- The Organization of Petroleum Exporting Countries Wednesday forecast that world demand for oil products will grow to 89 million barrels a day by 2010, a 17% increase from current levels of just over 76 million b/d. The demand will rise further to 106 million b/d by 2020, Javad Yarjani, head of OPEC's petroleum market analysis department, said in a speech. He was speaking on the second day of the four-day Offshore Northern Seas conference here in Norway's coastal oil capital. "Two thirds of the increase in demand over that 20-year period will come from China and developing countries," he said.


Black Blade: It might even grow faster than that. Also we must consider that several producers have already reached "peak production" such as Russia, North Sea, Mexico, etc. The west will become ever more dependent on foreign oil while new markets compete for what's left.

Operative
No Power, No Communications, No Lights, But City and People Intact
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2002/08/26/wirq26.xml&sSheet=/news/2002/08/26/ixworld.htmlLink to article about a new weapon that will probably be used in Iraq at some point. Would knock out all power grids, phone lines, cell phones, probably anything with a chip inside since chips are not very good at handling high voltage spikes. In short, Saddam would be left sitting in the dark with no way to communicate with military. Like I stated a few days ago, if Saddam wants to put up any kind of resistence he best begin now.
Waverider
Fiddling, while Africa suffers
http://www.wdm.org.uk/action/G7Halifax.htmSnipit:
"What the G7 could do - At a minimum, the G7 Finance Ministers must meet the challenge set by the African leaders who have proposed a Debt Relief Initiative under the New Partnership for Africa's Development (NEPAD). This would limit debt service to an "affordable' proportion of their annual government revenues. Bills going through the US Congress and Senate would limit those payments to 5% of government revenues for HIPCs in a health crisis (such as HIV/AIDS) and 10% for other HIPCs. This would be an important step."

Waverider: ~ Blackjack - this article provides some interesting information on proposed debt relief for third world nations. If I remember correctly, NEPAD was to be top of the agenda at the recent G7 summit but got sidetracked with ME issues. Looks like this could be the first of a string of defaults!
sector
Gretchen Morgensen...Hell Hath No Fury
Wall Street Was WarnedThis lady warned the "Street" several weeks ago in an essay titled "Wall Street Can't Afford Any More Coincidences". She made it clear that too much fraud smoke was billowing from the major houses.

Now she has launched her attack [See Misetich's post below] on Salomon Smith Barney, telcom analyst Jack, "I got MY $32 Million Severance" Grubman and by association, Citi bank and Robert Rubin.

You can count on many more revalations about Wall Street insider criminal enterprises from this fine journalist.

It's a war.
Operative
Corruption Watchdog Group Calls for Reforms
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2002/08/26/wirq26.xml&sSheet=/news/2002/08/26/ixworld.htmlAppears the corruption is not isolated to the borders of America, but the world's financial systems at large have a lot of room for improvment. So, dear investor, where are you going to place your personal wealth? What better place than gold? PHysical, in your hand (control & saftey).
Operative
Think Accounting is Gettting Better Now That CEO's Sign Off ? Think Again!
http://www.businessweek.com/magazine/content/01_20/b3732001.htmQ. A simple question at that, How can investors know what a company's bottom line is?

A. In most instances, they cant!

Wall Street - A place to lay down your bets and hope you are very lucky.
Gold -A hard asset held in your hands and lets you get a good nights sleep.
sector
Dept store sales drop 5.5% / Bad weather sees reduced purchases of seasonal goods
Yomiuri ShimbunNationwide department store sales in July decreased 5.5 percent from a year ago to 792.4 billion yen, marking the fourth consecutive month of year-on-year decline, an industry association announced Monday.

Supermarket sales across the nation fell by 4.6 percent from a year ago to 1.23 trillion yen after edging up 0.1 percent in June, the industry association said.

The Japan Department Stores Association said the total sales at 292 stores operated by 113 member companies recorded a larger fall than in the previous month partly because two typhoons hit the nation in July.

Clothing sales fell 4.9 percent, compared with a 2 percent fall the previous month, because inventory clearance sales were held earlier than usual.

Sales of menswear plummeted 8.9 percent, marking the fourth straight month of decline, as sales of suits and other formal attire were sluggish, though some casual clothing sold well.

Sales of women's clothing also fell for the fourth month in a row, down 3.7 percent.

Sales of accessories, jewelry and other items recorded negative growth for the first time in 21 months, falling 3.2 percent, though accessories and some other items showed favorable sales.

Sales of household goods dived 13.9 percent because large-lot purchases continued to be sluggish, and furniture sales nosedived 22.4 percent.

Sales of home electrical appliances fell 14.8 percent and those of other household goods went down 6.6 percent, and no favorable movement seen in the category.

Food sales fell 5.7 percent, marking the first year-on-year decline in three months. The decrease was the largest since December 1998.

In six major cities--Tokyo, Osaka, Kyoto, Kobe, Nagoya and Yokohama--total sales declined 5.9 percent, the second largest fall since September 1999, when the figure fell 6.8 percent.

All eight regions--Hokkaido, Tohoku, Kanto, Chubu, Kinki, Chugoku, Shikoku and Kyushu--recorded decreases in July sales.

The Tohoku region saw the largest decline at 10.2 percent. All other regions recorded negative growth in sales of between 2 percent and 6.6 percent.

Meanwhile, the Japan Chain Stores Association said nationwide supermarket sales at 6,197 stores operated by 101 member companies fell because seasonal products sold poorly due to two typhoons and the extended rainy season.

Though sales of yukata--summer kimono--were brisk, especially among women, sales of swimming suits were sluggish until mid-July because of the inclement weather.

By product category, food sales edged down 0.1 percent to 679.4 billion yen, as perishable foods did not sell well also because of the typhoons.

Sales of clothing fell 9.1 percent to 191.3 billion yen because moves of midsummer seasonal products, such as swimming suits, were sluggish until the middle of the month due to bad weather.

Sales of household goods plummeted 10.3 percent to 248.4 billion yen, despite brisk sales of health products.

Though pillows and hair dryers that claim to release negative ions were popular, sales of air conditioners and swimming-related goods were sluggish, pushing down the overall figure.

Sales of services, such as travel coupons and tickets, increased 3.1 percent.
++++++++++++++++++++++++

No Japanese recovery.
Operative
How Does September 7 Sound?
No moon. Great time for aircraft to take to the skies. September 7 is a saturday. Sounds like a great weekend to start moving on Iraq. Is this the reason for all the increased hype out of Washington? Something else to ponder over the next few days.
TownCrier
More sovereign debt default
http://news.bbc.co.uk/2/hi/business/2220219.stm(BBC - 28 August 2002) -- Nigeria has said it can no longer afford to service its $33bn foreign debts because of plunging oil revenues and the failure of some of its privatisation plans.

Consequently, the country has suspended payments on its debts, said Central Bank governor Joseph Sanusi.

Last month Nigeria - one of the world's largest oil-producing nations - held foreign exchange reserves of only slightly more than $8bn, down about a fifth since December.

Mr Sanusi said he had decided to halt all debt repayments rather than to eat further into the reserves.

------(see url for more)-------

Remaining alone among the original international monetary "rules of the game" is that a nation may choose to abandon the rules.

Seeing things for what they are, would you truly want to trust such a system with your gold in the form of monetary accounts? You would surely be pinched and pilfered sooner or later. Even the bastion of freedom and democracy, America, took its turn doing the pinching to both residents and non-residents -- in 1933 and in 1971-73.

Gold privately held as a savings asset, however, is uncorruptible solid wealth, yours to hold or liquidate as YOU deem fit. Why invite government into your affairs when you have a viable ability not to?

Call Centennial to discuss your needs, and set your financial house in order.

R.
USAGOLD / Centennial Precious Metals, Inc.
A good decision never goes out of style
http://www.usagold.com/ProductsPage.html

Golden Goal




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

-- R. Strauss

Mr Gresham
Randy
In a time of mass thievery at every level, private savings are the only real savings.

Interesting that Nigeria is still hanging on to $8 billion. I wonder in what form it is held, and where. Surely out of reach of those pesky creditors?

And, I suppose we can expect a new round of those e-mail proposals to help some minor government offical or his relative get his money out of Nigeria, if we will only supply him with our bank account particulars. He can now claim he's got part of that $8 billion stashed somewhere. LOL!

I always assumed that everyone in the world took money, and its modern by-product, Survival, seriously. I certainly did, when it became important and available to me in young adult life, and again lately, when I've started to learn fascinating things about it and also to approach the third and final Act of life.

But I'm not so sure about the others now --- they seem to have so many other things on their minds than the careful preservation of the results of their labors, and the furtherance of their children's place in this material world.

Maybe it requires a certain grounding (thanks for those reminders, Sierra) to get ANY of this right in life, and so we should be grateful for what we received, and be sure to pass on our "Wealth" at ALL levels.
sector
Bin Laden already has several suitcase nuclear devices � and may already have one positioned in the U.S.
http://www.newsmax.comYossef Bodansky is the author of the New York Times #1 best seller Bin Laden: The Man Who Declared War on America.

He is arguably the world's foremost expert on al-Qaeda and Osama bin Laden, and he offers a stunning, confidential briefing to members of NewsMax's Off-the-Record Club.

Bodansky has been warning the United States and the West about the dangers of Islamic terrorists since the late 1980s.

He is now one of the most sought-after experts consulted by the U.S. government and governments worldwide.

Bodansky is the director of the Congressional Task Force on Terrorism and Unconventional Warfare. He is the author of eight books on international terrorism and global crises, and is a former senior consultant for the U.S. departments of Defense and State.

Now, for the first time, Yossef Bodansky gives NewsMax readers a special Off-the-Record briefing with noted host Barry Farber, just as he gives to top government leaders around the world.

In this stunning one-hour tape, Bodansky holds little back and offers ominous warnings.

Here are just some of the valuable information you'll hear on this exclusive "Off the Record with Yossef Bodansky" tape:

* Why the current war by terrorists is actually a "desperation" move by� the Islamic extremists, who believe that if they don't destroy the U.S., they will cease to exist

* His stunning revelation that "there is no such thing as al-Qaeda" �� and who is really behind bin Laden and his associates and why many in the media don't understand the real enemy

* The Islamic war is by no means over. Bodansky warns that this war will last a long time and will be "painful" to the U.S.

* The clear warning offered by the 1993 World Trade Center bombing and how U.S. intelligence agencies dropped the ball

* The anthrax attacks are not the result of domestic terrorism, as the FBI claims. Bodansky offers compelling evidence that a foreign terrorist nation is behind the attacks.

* The shocking revelation that bin Laden already has several suitcase nuclear devices � and may already have one positioned in the U.S. (Bodansky reveals why bin Laden hasn't used these weapons yet and the clues that he is preparing to do so in the near future)

* New evidence that the Iraqi have worked closely with bin Laden and even sent scientists to help prepare his nuclear devices

* Iraqi and Pakistani experts have even helped bin Laden's network weaponize chemical and biological weapons.

* The significant mistake the U.S. already has made in Afghanistan, and why he believes the U.S action there has not significantly disrupted terrorist plans that will occur in the near future

* His conclusion that the terrorists are actually stronger since 9-11

* The inside U.S. government knowledge that several thousand highly trained terrorist killers like those who conducted 9-11 are still within the borders of the U.S. � supported by 10 times the number of support agents

* What U.S. and Israelis know about bin Laden's latest whereabouts � including handwritten letters they have intercepted

* Why Bodansky believes that the terrorists could well strike at U.S. civilian airliners once again � and do so with great success.

* What war with Iraq will really mean and the possibility of a worldwide conflagration with other terror nations like North Korea or others attacking the U.S. at the same time
++++++++++++++++++
The above report may be the reason for all the war talk.
There may already BE a suitcase nuke positioned in the US.

These Russian portable bombs are known to be gun-type devices - especially dirty as they contain about 2 kilograms of plutonium. It would necessarily be detonated at ground level thus raising a large dust cloud. The radioactive half-life of Pu is about 24,000 years. Unlike Nagasaki, where an airburst was used, Manhattan [If it is to be the target] would be severely contaminated.

The central failure of the Bush Administration's war on terror has been the rescission of nuclear deterrence as an official anti-terrorist policy. This is because the core support for terrorism flows from the Wahabbist regions of Saudi Arabia and the tens of thousands of Madrassas in Pakistan. They have been made our allies for commercial reasons in the former and expiediency in the latter.

Cavan Man
sector
Don't take this wrong but in MHO, the source you cite is a bit sensationalist. They've been telling us about the Russian placements of nuclear devices (Shenadoah Valley) also (according to another "expert"). Why the ongoing debate in the media (as you've pointed out)? Perhaps it is to grease the PR skids for a nuke strike against a city (Baghdad) that is much like LA in retaliation. Not too sure about recission...CM
Beowulf
Online Gold Diggers Come Up Empty
http://www.wired.com/news/business/0,1367,54802,00.htmlIn the old days, gold thieves swooped down on stagecoaches in the high desert or spent months casing fortified banks; bloody shootouts and hair-raising getaways were par for the course.

Not anymore. Modern thieves can orchestrate gold heists from home with a few computer keystrokes.

That's exactly what happened to digital gold dealer Crowne Gold earlier this month when, using a keystroke logger to steal passwords, hackers seized control of the virtual vaults.
*********************

Like Black Blade says, "A lot of trouble for a barbarous relic".

-Beowulf
TownCrier
Mr. Gresham... savings
"In a time of mass thievery at every level, private savings are the only real savings."

That seems clear enough to steer everone into a prudent course of action in bad times.

What I've found as the real problem is that the true situation is subtle enough that most people are adrift during the relative good times, and hence all the more vulnerable to "thievery" in broad daylight.

It really hinges upon people's concept of "private savings".

If they think having domestic money in ANY of its forms -- either a box full stashed under their bed or else as an interest-bearing account -- qualifies as private savings, they are mistaken and vulnerable to loss. The "thievery" (too strong a term) comes naturally when the economy grows as entrepreneurs like you, me, and the next guy borrow money to pursue our ideas and bring into being new and vital products and services to improve the potential quality of life for ourselves and our fellow man.

Through our good intentions, we've inadvertently contributed the the undermining of any saver with an account or a box full of money because we've helped to inflate the effective money supply (and thus curb or erode its purchasing power that it might otherwise gain within the expanded real economy that we've contributed our products and services to).

Ideally, a form of savings should be immune to these artificial expansions (subtle "thievery") in good times, and also secure against outright theivery (or default) in bad (financial crisis) times. Thus, no form of monetary instrument can serve as secure "private savings" in both good times and bad.

There should be no wondering among the people here how or why the apparent value of gold (as reflected in its marke price) declined to remarkable lows during the good times of the late 1990s -- a time accompanied by the heady revival of the use of private gold property as though it were money, expanding its apparent supply through the brisk gold deposit/lending business of the bullion banking institutions.

To be sure, that artificial inflation was a subtle thievery of rightful purchasing power, inflicted upon every person who tried to use gold as a means of private savings. Seemingly unlimited "counterfeits" (in the ledger form of "bank gold") were being lawfully passed about as acceptible market equivalents to their own authentic private property.

To be sure, it still remained prudent to hold some gold during that period because one never can know for sure when a sudden shift in market confidence will shatter the derivative market. However, hindsight would show us now that perhaps the Mona Lisa would have served our private savings needs better -- liquidity issues aside.

Going forward, with an eye on avoiding unnecessary avenues of systemic risk, a coalition of central banks have shaken a finger of warning to the commercial markets, expressing expectations through the 1999 Central Bank Agreement on Gold as the first step in restoring gold to is rightful and more dignified role as uncorruptible private property -- perfectly suitable for private savings in good times and in bad. No artificial inflation (and subsequent erosion of purchasing power) through lending as the global real economy booms by degree, and also no threat of loss by default as the economy busts by degree.

Truly, governments don't run the world. People do. Small business men, farmers, bakers, cab drivers, oil execs, bankers, groundskeepers, bricklayers, authors, actors, factory workers, truck drivers, electricians, mechanics, etc. And the wiser central banks know that. Come what may to the economy, a government cannot long endure if the people themselves are ever rendered hopelessly bankrupt as the result of any imaginable financial collapse that thus leaves them utterly without independent wherewithal and optimism to carry forward.

Gold property may suffer its lumps in the short term in the process of getting from here to there (or maybe much of that is now behind us). to be sure, in the interim (if indeed we still are in the rocky interim) it is better to hold it than to be without it; while in the long term it will be such a no-brainer that we'll probably close the forum down for lack of anything to talk about. After all, how many forums are dedicated to discussion of the benefits of breathing in and out?

My two cents on it all, yours if you want them.

Randy
sector
@CavenMan You ask Why the media debate?
Well ...the President is all alone in front in his push for war.He has not offered a credible reason...yet...and the media are filpping.

Whatever the reason is for his war talk, one can be absolutely sure it is a very big reason. Otherwise GWB would not have gone against a long list of learned foreign policy and military experts. He would have avoided such win/lose risks.

His actions point to unreleased threat knowledge he has and his critics do not. That threat could be economic in the form of a pending fall of the Saudi Royal family or a similar event, but the urgency with which the Administration in general and the Pentagon in particular has moved suggests a more immediate problem with a response BEFORE an election.

As for NewsMax.com's OBL expert, he is what he is...another source.

I sincerely hope that our enemies do not have nukes here as this OBL source says but such a development would fit the extreme position the President has taken regards an imminent war with Iraq.

What other threats warrant such policy extremes?
Black Blade
Lower hedging revenue, gold sales drag Newcrest into red
http://www.platts.com/stories/pr1.html

Snippit:

Australian gold producer Newcrest Mining Wednesday reported a net loss of A$53.0-mil ($29.3-mil) for the year to Jun 30, 2002, compared with a profit of A$38.2-mil in the 2000-01 financial year. The company said net profit before an A$80.6-mil surplus foreign currency and gold contracts provision and a A$25.0-mil provision for hedging restructures was A$20.9-mil, compared with the year earlier A$45.6-mil.

Black Blade: "oops!"

Cavan Man
sector
I do believe you are correct.
Leigh
Cavan Man
Cavan Man, WHY would the Russians want to leave suitcase nukes around in the Shenandoah Valley?
Sierra Madre
Sector: your apologetics for Pres. Bush don't cut the mustard..
at least with me.

I understand your desire to be generous and give the Prez the benefit of the doubt.

You are SUPPOSING that Pres. Bush knows something that we don't, and is therefore in a position where he must take some hard decisions without being clearly understood by everybody, Scowcroft, Eagleburger and other prominent politicians included. That does not make sense, Sir Sector. If Bush knows something terrible, then he should come out with it AT ONCE.

As things are, Bush is only repeating that Saddam Hussein is in possession of WMD, etc. etc. That's not enough, to my mind, to justify the initiation of a war (to avoid a war!) with Saddam Hussein.

No, Sir Sector, Bush - whose intellect, I must day, does not impress me one tiny bit - and his cronies, Cheney who comes across like a nasty bully, and Rumsfeld, who is much less than impressive, and Ashcroft - well, skip Ashcroft - all this bunch does not strike me as being on the level.

No Sir Sector, Iraq is going to be the object of NAKED AGGRESSION, because Iraq is central to the M.E. and has the OIL. And in the second place, because it is a threat to the masters of the U.S.A. (by their own admission, be it said) who reside in - Jerusalem.

So, the USA is going after the oil and getting rid of Israel's enemy for them. That's the naked truth. I think that apologizing for Bush & Co. is uncalled for.

In the interests of this Forum, please stop apologizing for Bush! Let's discuss other subjects.

Sierra
Foreigner
Why Bush wants to fight Iraq-Reasons
Let me put forward main reasons why Bush is pressing for war:

-wag the dog issue (turning attention away from collapsing economy)
-blame "the terrorist" (for hiperinflationary destruction of a dollar value)
-enforce ani-terrorist laws (aka Patriot Act) to controll public riots in US (related to economy)
-support utility of the dollar as international currency by controlling Middle East OIL
-appease decisive in US politics Jewish lobby
-establish "friendly" (read-puppet) regimes in Middle East

In simple terms this is war is ABSOLUTELY NECESSARY for the US establishment to survive inevitable storm related to financial system collapse. All explanations about so called Weapons of Mass Destructions are totally phony, and the only countries who may gain short term from it are Israel an US establishment. Losers are Arab countries as well as Europe.
Sierra Madre
GOLD as Savings...
Randy and Sir Gresham, your comments on savings:

People today, the public and banking people, are all under the spell of "financialization". The public cannot bear to have savings that do not earn interest. To bankers it seems madness, quirky behavior, to have savings that do not earn interest.

But, why should savings earn interest? What's wrong with that? Are we all to participate in usury? (that's what it used to be called) Is that normal?
It is normal today, but for centuries it has NOT been normal to exact interest from savings. And when savings did earn interest - at some risk - they were placed into GOLD BONDS, paying interest and principal in gold.

If savings earn interest, they must also, necessarily, be at risk. Why must savings be subject to risk? Isn't getting rid of risk, the very purpose of savings?

So, gold is called a "dead asset". Translation: "the bankers can't get at it". The bankers are really enemies of our peace of mind and tranquility.

You have struggled with the world to produce a surplus in your income. You set apart some of your surplus, as savings. Why must you go on and on, demanding INTEREST from your savings? Isn't enough, enough? The bankers say, "No!".

Savings: put them into gold, and sleep nights!

Sierra
Cavan Man
Sierra Madre
Israel does not want peace. They want the money. Also, funny how so few people associate Jerusalem with Christianity.
Cavan Man
Leigh
Hello fair lady! That was written up in Newsmax about 1-2 years ago. Remember the former Soviet KGB "high ranking" blah, blah blah?? This was another NEWSMAX exclusive. Scary stories sell newspapers and advertising at web sites. WND and NM are less than credible and good IMHO.
silvercollector
Sierra
Given that we all seem to agree that there is fundamental 'oil issue/economic issue' that drives the need for war would it be safe to say that all we need is a spark.

From yours:

"As things are, Bush is only repeating that Saddam Hussein is in possession of WMD, etc. etc. That's not enough, to my mind, to justify the initiation of a war (to avoid a war!) with Saddam Hussein."

If Hussein is indeed in possession of WMD or is near to having them does it not seem logical, given his completely horrid history that our 'first strike' is paramount.

It then seems logical that we must PROVE if he has them, not that he will USE them. So given the underlying NEED for a war (paragraph 1, re-inforced by Foreigner) it then follows that weapons inspections are critical. If Hussein cannot prove, or is unwilling to prove such, the spark has been generated to start the war on the underlying reasons.

One, we get rid of a 'proven' madman and two, the (necessary??) oil war is on.

Todays paper was littered with editorials and comments regarding the possible outcome of a Iraq/US war. Arab neighbours seem to guarantee oppostion and the degree of this opposition is unknown. I cannot comment on any outcome at this time but I fear it will be grizzly.

This may be WW3 but does the US have an option given that 'they' struck first with 911, Hussein's potential & the economic woes?

slingshot
Sierra Madre MSG# 83910
Naked AggressionYour point is well taken and may be true. If Bush is set on releasing the Hounds of War is there anyone who can stop him? At this point will the U.N. Will China issue an altimatum? Russia will sit on the sideline and pick up the pieces. If there are suitcase bombs and they are already in the U.S there is nothing to do but wait and see if they use them. Chemical weapons are bulky and hard to disperse so unless they can deliver in large quanities it would not have
the punch desired. That leaves us with BIO weapons and we know what they can do. So there is really not much we can do about it. Yes this is a little off the Golden Trail. I would say IMHO which has been said many times before.
Prepare for the worst and hope for the best.

This is the best discussion forum. A cut above all others.

Buy Gold Now More Than Ever. You can bet your bottom dollar I AM.
Slingshot
Sierra Madre
Silvercollector, a brief reply...
(I too am a silvercollector, by the way)

You have an image of a "horrid history for Saddam Hussein".
Well, that may be true. There are a lot of people with horrid histories in this world, and there always have been.
But to think that someone is terrible, does not give a right to initiate a war against that person and his country.
Please look at your country objectively, if you can, and you will find that a great many people think that the U.S. behaves, and has behaved, horribly in this world. It's a fact. (Americans, like children, have a hard time imagining that anyone can not like the US.)
So because Saddam Hussein is a "bad guy", he must be wiped out and his country subjected to bombing on a scale we can only imagine? No sir, that is not right!
Has Saddam Hussein attacked the U.S.? He has not. He went against Kuwait for a longstanding reason, after the U.S. Ambassadress, on Presidential instructions, told him the U.S. really did not care what he did with Kuwait.
Was Saddam Hussein behind 9/11? No proof whatsoever. In fact, there are a great many people out there saying that Insiders in the U.S. did it to the U.S. to provoke a war of aggression for oil, and for the destruction of Israel's enemies. (Most Americans find this very hard to believe, again they are like children.)
Hussein is not a President wearing short pants. If he wants or does not want inspectors in his country, he is certainly within his rights. Is the U.S.A. the papa for the whole world? Bush seems to think so. Why should Hussein have to PROVE that he does not have WMD? Who says he should not have them? Did the U.S. ask permission from the world to have WMD?
Then you say, "we get rid of a 'proven' madman" It is modern psy-war operations, to destroy the reputation of your enemy first, so you can skin him alive and no one will object. So, he is turned into a "madman" by the Press and Media. Classic procedure! It's been done over and over in my lifetime.
So you ask, "does the US have an option given that 'they' struck first with 9/11?" I don't think they did strike;I guess the US has NO option, but not for all the reasons you give. "Foreigner" just gave the real reasons. This is just a naked aggression by an imperial power, the U.S., because the US wants the M.E. oil and has to obey orders from Jerusalem.

I promise I shall not say more on this tiresome subject. Say what you like.

Sierra
R Powell
Sierra Madre
Re. Hussein // initiating war It appears you have seen beyond the doublespeak.

The End never justifies the Means because the Means always alter the End.
sector
Senator: Iraq Action Needs Explaining
http://www.foxnews.com/story/0,2933,61555,00.html AP
Sen. John Warner, R-Va.Wednesday, August 28, 2002

WASHINGTON � The top Republican on the Senate Armed Services committee said Wednesday he wants Defense Secretary Donald H. Rumsfeld to appear before the panel to discuss how prepared U.S. forces are for a war against Iraq.

Sen. John Warner of Virginia is the latest GOP lawmaker to insist that Congress be heard in the debate on whether to invade Iraq -- even as the Bush administration says that congressional authorization isn't legally required.

"Congress, as a coequal branch of government, is, in my opinion, not going to sit on the sidelines," Warner said in a letter to committee chairman Sen. Carl Levin, D-Mich. The letter was dated Tuesday and released Wednesday.
+++++++++++++++++++++++++++++++++++++++

Warner is a hawk's hawk from Virginia. His support is heavily military so opposition from him shows that the president hasn't done his political groundwork or knows that he hopes that the senator will be swayed by a future event of some kind.

Such a tactic which ignores Congressional Republican leaders is risky gambling at best and executive lunacy at worst.

@Sierra M-

I have posted numerous times regarding the illogic of the administration's Iraq war policy. Far from apologizing for the president, I have described only the logical possibilities, none of which defend GWB.

He and his crony Lawrence Lindsay have continued the seven year, anti-free market, gold manipulation scam and surely you have gleaned that much from my posts of the last three years here. I am not a fan of GWB.
darkhorse
simply amazing...
how many geo-political experts we've got here. Seems most all of us "know" exactly what's going on, when it will likely happen and why. Amazing also is how many spins can (and have) come out of some baseline information which may or may not be true in the first place...where did we hear it from, anyway? Off our "Favorites" list? What is perceived to be a "hot" site for one may be sensational gibberish to another, but watch how both sides of the story get "defended". We pride ourselves in being CW contrarians (people that believe the Conventional Wisdom accept anything they see or hear on the nightly news, whichever channel it comes from), but we're oh so quick to accept, at face value, all the information being offered by our latest/hottest subscription site. I swear I've never seen a curriculum for this line of work from any university, but there's enough spin Dr.'s to make you believe there is. Maybe Sally Struthers....
silvercollector
Sierra
"Why should Hussein have to PROVE that he does not have WMD? Who says he should not have them?"

The planet said in 1991 that Hussein cannot be trusted so 'they' inacted it into law. Hussein continues to break the law and recently has been personally spoken out about paying suicide bombers.

What do you suggest we do with a man that pays people's families $25,000US to blow up innocent civilians? Do you suggest that we let him carry on, perhaps even trust him, perhaps even scrap the weapons inspections? Do you think he is not building a nuclear and/or bio-chemical arsenal? Since most people believe he is, what is the purpose of such? Why will he not let UN inspectors do their lawfully inacted course of action? Is he advancing the economic enviroment in Iraq or is he building up his military might? Since he is why? Why are his people broke, destitute and starving while he amasses such things? What could be his motive, given all of the above other than to 'smoke' the western world?

If Hussein could be trusted perhaps we could leave him alone for 2 minutes. Recall Sir the latest Arab summit whereby it was announced "that an attack on an Arab country would be perceived as an attack of ALL Arab counties."

Nice pickle is it not?

Cavan Man
Sierra Madre
There you go again; making assumptions and generalizing. Should read, "MANY Americans".
slingshot
Darkhorse
**************************Do you think we should set Condition Zebra and Circle William? :0)

Slingshot------------<>
silvercollector
Sierra, others
Sorry about the rant and rave about Iraq. I probably know less than you about this matter. All I know for sure is I don't like it.

My biggest gut feeling is that Bush is not done with 911. Pearl Harbor lead to 2 big bombs and the US government/military is not done with 'smoking' some mountain goat freaks in Afganistan. IHVHO, it hasn't even started.

Just read sector's Bodansky's post, very sobering, what happens if this guy is correct?

What happens if the 'extremists' have fully infiltrated the country and have issued the US the ultimatum?

EagleOne
Enough already
Now why don't you guys take your expert opinions and brused egos to a neutral corner and stay there until you are ready to discuss gold related topics again.

EagleOne
Leigh
Cavan Man
Thanks for the further info. Your mention of the S.V. intrigued me greatly, both because I have a personal interest in it and because I can't fathom anyone wanting to suitcase-nuke a wildlife area.

Cavan Man, if you wish to take this off-line, please feel free to contact me. I think you can get my e-mail address pretty readily from the usual sources.
goldquest
Hussein
Start WW3 over one man? Other ways to eliminate him. But, if you want what his country has, then that means an invasion. Been there, done that. Two years as a Vietnam combatant in the mid-sixtys, taught me that a lot of people, mostly innocents, will pay the ultimate price.
Americas war on terrorism will have to be fought the same way that the Israelis do it. Small operations, to cut the head off of the snakes. I see a day in the near future, that North Americans will not only need their gold to survive, but they will need to be armed to the teeth to protect their own. You won't be able to rely on governments to do it. Prepare for the worst. Listen to BB and the other sharp minds on this forum. "As a general rule, the most successful person in life is the one with the best information." Qoute by Benjamin Disraeli. Now, back to our favorite subject, GOLD!!
Blackjack
Moody's looking at life insurance downgrades
http://story.news.yahoo.com/news?tmpl=story2&cid=1106&ncid=1106&e=3&u=/ft/20020828/bs_ft/1028186044627The creditworthiness of the US life assurance industry, already under pressure from its exposure to troubled companies, has been further called into question by a new report that shows its capital base is deteriorating.

The capital adequacy of US insurers "clearly weakened" during 2001 while its liabilities rose, according to Moody's Investors Service.

"While we still believe the life assurance industry has adequate capital to support its risks, some downward rating pressure on the industry is likely to occur if recent trends persist," Moody's said.

The agency said that in 2001 there was a noticeable increase in the life assurance industry's "risk assets" for the first time in several years, as well as an increase in its underperforming assets. Risk assets include junk bonds and unaffiliated common stock.

Black Blade
Gold in The Forecast - Puplava
http://www.financialsense.com/Market/wrapup.htm
Snippit:

The rise in the price of gold may be signaling this seminal event reflecting, above all else, the loss of confidence in the financial system. Moreover, contrary to recent reports that show there will be no fall-off in production of gold, the precious metals markets are in the same condition as the energy markets. The industry is not expanding its reserve base while future production is heading towards decline. I read almost nowhere in any demand forecast the impact that a rise in investment demand will have on the gold and silver markets. Most demand forecasts for gold and silver treat them as commodities and not as real money. It is this transition from a commodity to its role as real money which will have its greatest impact in the price of the metals. This additional demand coming from the investment side is what is going to launch the metals into outer space.

At the moment, the price of metals is being determined like most commodity markets by derivatives. It is a market that is being manipulated by government for the benefit of government, which wants to keep confidence in paper strong with its voter constituency. The government more than anyone else knows that once confidence evaporates, it will be hard to bring back. That is why every effort is being made to keep confidence in paper high. All the tools at its disposal from monetary policy, fiscal policy to moral persuasion is being used to keep the public in paper, be that the dollar, or financial assets such as bonds or stocks.

This battle of confidence being waged between the forces of paper and gold is nearing its end. There are just too many extraneous events domestically and internationally for the forces of paper to contend with, much less overcome. In summary, there are too many holes in the dike to plug to keep the forces of gold contained. There is simply too much debt, too much paper, and too much fraud in the financial world to keep gold from transitioning back to its historical role as real money.


Black Blade: No argument here. The growing levels of consumer, corporate and government debt are unsustainable. Economies around the world are beginning to crack under the strain. Central banks in Asia may decide to diversify their reserves with precious metals in light of deteriorating markets and the declining US dollar (let alone "cartoonish" currencies like the yen and euro).

Blackjack
Housing Execs dump huge amounts of stock
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186102016&p=1012571727088Executives across the US home-building industry have been selling shares in their companies at a record pace this year, suggesting they believe the country's housing market has peaked.

Data compiled for the Financial Times show that corporate officers and board members in publicly traded US building companies sold a record $258m-worth of shares more than they bought in the second quarter.

It is the largest net sale of stock in the industry in quarterly records going back to 1996, and was done either by exercising options or directly cashing in stock grants. In many cases, corporate officers have sold more than 50 per cent of their holdings over the past year.
_____________
Housing Boom coming to an end soon?

Got Gold?
sector
Rumsfeld: Bush stance on Iraq "like Churchill's warnings on Hitler"
http://news.independent.co.uk/world/americas/story.jsp?story=32822528 August 2002

US Defence Secretary Donald Rumsfeld compared the White House's policy of seeking the removal of the Iraqi leader with Winston Churchill's warnings about Adolf Hitler before the Second World War.

Mr Rumsfeld told 3,000 US Marines at Camp Pendleton, near San Diego: "It was not until each country got attacked that they said 'Maybe Winston Churchill was right. Maybe that lone voice expressing concern about what was happening was right'."

Mr Rumsfeld, speaking yesterday, said President Bush's resolve would not be weakened by the apparent lack of support from allies for an invasion.
+++++++++++++++++++++++++++++

Churchill had an insider at the Foreign Office feeding him classified information about Nazi expansion plans. He was not clairvoyant. Like Churchill, the President knows things about the US threat he is not saying.

That threat is big. It HAS to be in order for him to stick his neck out so far.

It will move markets when it happens...IF the markets are able to stay open.

Then again, if one transfers a reasonable amount of their portfolios into physical gold then one need not worry whether a stock market is open or not or whether the FDIC has "Insured" one's life savings.

Black Blade
Collapse of stocks to propel deficits
http://www.washtimes.com/business/20020828-24484291.htm

Snippit:

The loss of surplus revenue from taxpayers hit by the stock market's $7 trillion collapse since 2000 will affect the federal budget for years, the Congressional Budget Office said yesterday. Deficits will linger for the next four years, and small surpluses will return by the end of the decade only if Congress holds the line against big new spending and tax cuts, the agency said in a forecast that for the first time projects massive losses of income and capital gains tax revenue from reduced stock earnings in the next decade. "Even if the economy recovers any time soon, the stock market hasn't," said Astrid Adolfson, senior economist at McCarthy Crisanti and Maffei.

Black Blade: The party's over � some one please turn out the lights. The stock markets are still grossly overvalued and have much further to fall. This will result in fewer capital gains taxes. The consumer is tapped out as spending is slowing. Unemployment is rising and that means less income tax. Corporate earnings are falling fast or in many cases nonexistent so less corporate income tax. In a word � "Grim".

Cavan Man
Leigh
I think the point was, if I remember correctly, the proximity to the District. As I am sometimes seen in H'burg, I wonder also. Kind and humble regards to you..CM
Black Blade
Retail sales fall sharply during last two months
http://www.cleveland.com/business/plaindealer/index.ssf?/xml/story.ssf/html_standard.xsl?/base/business/103052714228380.xml

Snippit:

- The critical back-to-school selling season isn't making the grade that merchants were hoping for, and Wall Street analysts are increasingly worried about consumer spending for the rest of the year. Retailers including Federated Department Stores Inc., May Department Stores Inc., Sears, Roebuck & Co. and Target Corp. are seeing August sales below forecasts. Wal-Mart Stores Inc., the world's largest retailer, said yesterday that overall company sales are tracking at the low end of projections. "Sales have deteriorated sharply since early July, almost as if someone turned off a switch," Daniel Barry, an analyst at Merrill Lynch & Co., said during a conference call with investors. "It appears that the consumer is rolling over," he added.


Black Blade: Simply put � scratch one economic recovery. It just ain't in the cards. Every time some bug-eyed economist on CNBC says that the economy is recovering I just think of that old Texas saying: "That dog won't hunt". In other words, that tired old excuse is wearing thin because no one really believes it anymore. People are getting scared and the reality that their retirements have vaporized and will never reappear is just beginning to settle in. A poor "Back To School Sales" season means a poor "Holiday Season" is on the way. Scratch one economic recovery indeed!

Blackjack
Obvious Manipulation in PGM's, "unidentified party" WOW
http://www.zawya.com/Story.cfm?id=1030550179nL28325781&Section=Markets&page=Commodities&channel=Precious%20Metals%20News&objectid=C9D5E773-8F38-11D4-867000D0B74A0D7CLONDON, Aug 28 (Reuters) - Gold bullion traded sideways in Europe on Wednesday afternoon, holding near the top end of a $305.00/312.00 band and keeping an eye on U.S./Iraq tensions, traders said.

The centre of attention, however, was the platinum group metals (PGMs) which were being supported by a technical squeeze in the NYMEX U.S. palladium futures market, although there were signs that this was relaxing slightly, they said.

"Gold is holding steady, really, around the top of that range -- if it goes through there it is looking at $315.00," a trader said.

The twice-daily fix sessions were not particularly active, with gold holding near its highs and fixing at $311.10 an ounce this afternoon.

"In light of the apparent increase in the U.S.-Iraq tension the metal looks to be supported by fears of conflict," said John Reade, metals analyst at UBS Warbrug.

U.S. President George W. Bush sought on Tuesday to ease Saudi opposition to a pre-emptive U.S. attack on Iraq, pledging to consult allied nations before taking any decision to launch military strikes.

Spot gold was at $311.10/311.60 an ounce by 1515 GMT when the European trading session concluded, down from the New York close of $312.25/312.60. Silver did little throughout the session, and continued to monitor gold. It was quoted at $4.52/4.54 an ounce, up from $4.50/4.52 at the New York close.

PGMS LOOK SKYWARDS

The PGMs, which are widely used in autocatalyts to cut down on harmful car emissions, were propelled higher by the strength of palladium. This metal was fixed in the afternoon at $365.00, up from the previous day's equivalent fixing of $342.00, to hit its highest fix since May 20.

"The market is defying gravity and lacklustre fundamentals...it's purely being driven by a short-term fund play," Ross Norman, metals analyst at TheBulliondesk.com, said.

Some traders said an unidentified party had placed massive buy orders on NYMEX, mainly on the illiquid December palladium contract, in a bid to jack up the price by triggering stop-loss buying.

Others noted that there had been rollover activity between September and December, but there were signs today that the pressure was being relaxed.

"We could see some selling (tomorrow) out of the Far East and the longs could take profits if (palladium) goes down through $360.00. Otherwise, we are looking towards $380.00 and $580.00 on platinum," a trader said.

Analysts also doubted how long the price rally could be sustained.

"With continued weak-looking fundamentals we expect that this rally (in palladium) will prove short-lived, and that these prices will not be sustained beyond a number of days or perhaps a couple of weeks," said UBS Warburg's Reade.

Spot palladium was at $361.00/373.00, up from $356/368 last indicated in New York. Spot platinum was at $563.00/571.00 at 1010 GMT, up from $554.80/562.80 in New York.

Earlier, platinum was fixed in London at $574.00 an ounce, its highest fix since June 2001, benefiting from palladium strength.
_________________

PGM's are used for auto pollution control and as the auto
market is going to go bust soon, obviously people were
anticipating this downturn in demand, and many shorted the
PGM's. Along comes "UNIDENTIFIED PARTY" and places huge
buy orders generating a short squeeze covering rally.
PGM prices zoom up, even though we all know demand for PGM's
will fall soon. Captalism at its worst.

Who the hell is this unidentified party? Soros? I'd love to know.
They are just playing games with markets. Market manipulation.
When people charge market manipulation, the media laughs about
market manipulation "conspiracy theories". The media demand to know "who" is this mysterious force manipulating markets?

OK.... So WHO IS THIS "Unidentified Party"?
This is a media story. Tell us who is this party!!!!

BTW Platinum usually leads gold in bull markets. Lets see
how all this crazziness works out.
Black Blade
Asian Markets In Retreat
http://quote.yahoo.com/m2?u
Asian markets are starting off in negative territory. Europe was utterly cratered yesterday, so it should be interesting to see how they fare tonight.

- Black Blade
Mr Gresham
goldquest
Thanks for bringing your thoughts as a veteran to us. I have always thought of the Vietnam vets as our best resource to bring us the first-hand warnings as well as best tactical views about future engagements.

Although I worked then to stop the war's escalation, I have made it my watchword ever since to: "Ask the man who went."

Anything else you add to discussions will have my full attention.
Operative
Rallys That Don't
http://www.investors.com/editorial/feature.asp?v=8/28The Stock Market rallys are getting weak(er).
While Gold continues to build a strong base above 300.00
Operative
More Gold News
http://biz.yahoo.com/opt/020828/711a9d501007e4526e22234281d33f55_1.htmlDoubt anyone here will learn a whole lot, but worth a quick review. At least gold continues to make the news. Maybe one more stock investor will come in from the cold.
mikal
@Blackjack
That platinum deal would have qualified for manipulation of the month just a few years ago. Now it might make heist of the week! At least those platinum coins feature something besides dead presidents. When the markets were all teetering on the brink on the first week of September, 2001, the economy was poised for a patriotic rebound thanks to micromanagement. Hillary Clinton's scheduler should have been envious.
Foreigner
On pure logic, political spin and conspiracies
I do not care about spin or conspiracies. I have learned long time ago to see the spin whenever it happens. I collect FACTS from reading US, Israel, Arab, Russian, German, and other sources. Each side has something to say, what other won't. I apply reason and logic to connect the "dots". I always ask myself the very basic question of WHY and WHO PROFITS. If answer stands up to Occam Razor test, that's what I believe is TRUE. If anyone can point to fallacy of my conclussion, I will repent.
steady
the disinformation/media blitz is working......
look at wehats happend on this board, think back before war talk with iraq, we were gold focused, now with the daily slew of info (disinfo) we have taken our eye off the ball ..... gold and are using our efforts to predict something we have no controll over.
however each one of us does have controll over gold our own purchase of that stuff.
i personally think the propaganda machine is using the internet and the internet posters to there objectives to create so much info that everyone has an opinion when no ones opinion really matters because they (the govt) will do what they want when they want to meet the objectives they have outlined.
im not saying dont post about iraq in not that dumb, but what i am saying os take a look at the big picture, look at how much info is diseminated on a daily basis and where are we now in relation to whaere we wehre 6 weeks ago. no where in the same spot guessing what the govt will do with alot of posts spreading the info they are putting out forthere own objective.

one last comment it looks libke people are waking up to what aristotle said about 3 months ago forget comex and the paper game its all about the physical now ie the spot price forget comex its all about physical and when the spot market heats up comex wont matter one bit, except for those who are hoping for delivery, and not a paper pay off.

DOWNUNDER
PATRIOT GAMES - - -American Journalism Post 9/ 11
http://www.abc.net.au/rn/talks/8.30/mediarpt/stories/s659555.htmPatriot Games --American Journalism & the War on Terror

This is a very interesting interview.The New York based Australian author, Peter Carey interviews USA "Gonzo" jounalist Hunter S. Thompson. Strong stuff!

The interview was broadcast on the Australian National Radio
network (Radio National)--"The Media Report" this morning 29th August. This interview would probably NOT be broadcast in the USA under the current climate of patriotism. A must listen for those with an enquiring & open mind.
SNIP - -
"frenzy of patriotism -media manipulation -shameful looting of the people & the treasury -current administration makes Nixon look like a Liberal!


Follow the link & click on the interview --35min



Galerider
IRAQ ATTACK
For the person who predicted 7 Sep as a good day to visit Saddam, won't happen. My job evolves around it. For the report on sluggish sales in Japan.....reminds me of the posting last week on the excuse for weak retail sales in the U.S. (weather) Both typhoons were very weak compared to systems in the past and people were still moving about going about business as usual. Not buying over here. The retail sales news here has been weak for some time. Nothing new. The way the U.S. is going, I've already been conditioned over here and ready for what the U.S. will experience in the years ahead.
DOWNUNDER
@SECTOR - - - Re SPIN & DISINFORMATION
In an earlier post you said :
"Like Churchill, the President knows things about the US threat he is not saying."
------------------------------------------------------
You said this with conviction BUT tell me -how the hell do you know thats a fact?

Consider: The team in the Whitehouse is a gang of thugs and thieves. They have shown their contempt for the people of the world & ALL OTHER AMERICAN CITIZENS.They have been looting the treasury of its gold (lent out) & protecting the swindlers. Millions of your ordinary citizens have lost 50% plus of their life savings already with a strong possibility of more pain to come.They will stop at nothing to retain Political Power & have imo PROVED THAT by ramming through the Patriot Act etc with unseemly haste & no discussion.A WAR will suit them down to the ground --it's hard to think about personal losses & the state of the economy if you're being told their's N.bombs ready to go off

If you trust this lot then good for you.I & many others don't for the above reasons & many others that are common knowledge.
Black Blade
US housing executives offload stock
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186102016&p=1012571727088

Snippit:

Executives across the US home-building industry have been selling shares in their companies at a record pace this year, suggesting they believe the country's housing market has peaked. The selling went on while home sales, home values and builders' stock prices were surging. In addition, most stock analysts were maintaining buy recommendations and economists were debating whether the industry was experiencing a bubble effect. Thomson Financial and The Washington Service, a consulting firm prepared the figures from corporate filings to the Securities and Exchange Commission. The data show that of the 16 homebuilders with the largest market capitalisation, seven had reduced their executive shareholdings by the largest amount seen in individual records going back two decades.

Black Blade: When the insiders sell off its time to take a good hard look at the investment. This is a real estate bubble. There are people who are buying multiple homes now just to ride this bubble. How many homes do people need? When interest rates are raised we will see the bubble pop and the mass foreclosures begin. "Interesting Times"

Blackjack
"Money will continue to leave US" : Mizuho Bank
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW2iJRZZRG9sbGFyTokyo, Aug. 29 (Bloomberg) -- The dollar fell for a second day in three against the yen on expectations reports tomorrow will show U.S. consumer confidence and manufacturing stagnated this month, damping demand for the nation's assets.

The U.S. currency dropped to 117.96 yen at 1:17 p.m. Tokyo time from 118.88 in New York yesterday. Against the euro, it weakened to 98.27 U.S. cents from 97.85. The dollar is headed for a losing month against both the yen and the euro.

``The U.S. economy seems quite bad,'' said Takashi Toyahara, foreign exchange manager at Nomura Securities Co. ``The bias is for a weaker dollar.''

A slide in the three key U.S. stock indexes yesterday, one of which left the Nasdaq Composite Index down almost 33 percent this year, also cut demand for the currency, traders said.

``We were beginning to expect the Dow to rebound last week, but with the Dow heading lower, our expectation is betrayed,'' said Hideyuki Tsukamoto, a foreign exchange manager at Mizuho Bank Ltd. ``The money will keep leaving the U.S.'' The U.S. currency may decline to as low as 113 against the yen in coming months, Tsukamoto said.
Operative
@ Galerider
September 7 was not a prediction as much as an observation.
Since it is a saturday I kind of thought it was a weak guess anyway since that is also the sabbath for muslims. What do you think about the early morning hours of the 8 instead?


Have you had the chance to visit any gold dealers in your area? Are sales of gold holding up? (if i remember you are in japan, correct?)

thanks, Operative
Blackjack
US attack can come at any time, forces in theatre
http://www.atimes.com/atimes/Middle_East/DH29Ak01.htmlBy infinite moonlight, US readies for war

By David Isenberg

Reasonable people might be forgiven for being confused by media coverage of the so-called debate about whether or not the US will invade Iraq. Much of the coverage has been based on two assumptions: first, that the administration has yet to make a decision to go to war with Iraq; second, that if it does decide in favor of war, there will be a measurable deployment of forces to the theater a la Desert Shield in 1990.
Both assumptions are wrong.
--------
Unlike the slow buildup of 1990, the US Central Command is now able to move at warp speed. It is able to deploy 10 tactical air wing equivalents within five days, and a minimum of two US Army divisions within two weeks. These forces would be followed by a five-division US Army Corps, Marine Expeditionary forces and supporting air wings in the weeks to follow.

A recent analysis by CDI notes that more than 1,000 war planners, logistics experts and support specialists are now at all of the command posts in the region. The command and control capabilities at the component commanders� headquarters throughout the southern Gulf states are continuing to be fine-tuned by the ongoing Operation Enduring Freedom in Afghanistan and in preparation for offensive action against Iraq. The video teleconferencing, satellite imagery and communications capabilities are fused by an extremely robust computer network that has enabled a level of operational situational awareness never before achieved for any commander-in-chief.

Although Jordan has publicly been very vocal that it is opposed to any military action against Iraq, currently the 22nd Marine Expeditionary Unit is exercising with Jordanian forces in a long-scheduled series of maneuvers. Some sources have reported that this exercise, Infinite Moonlight, is also a cover for prepositioning forces at well-sited forward staging posts. There are two airbases that could well be part of US contingency plans: Ruwayshid, on the road from Rutbah in Iraq to Turayf in Saudi Arabia, and Wadi al-Murbah further north. Both are very close to the Iraqi border, about 100 miles from the H3 complex of airfields that harbor several potential Iraqi missile launch points.
________________
Its a lengthy article, very detailed.
Likely date will be a night with new moon, darkness for stealth
aircraft to first take out command and control.
Blackjack
Debt problems starting to affect Manufacturing
http://news.bbc.co.uk/2/hi/business/2220601.stmDaewoo's car production has ground to a halt at three plants after running out of parts.

The South Korean firm, which has now been bought by the world's biggest car firm General Motors, is up to its ears in debt.

Its biggest supplier, Delphi Automotive Systems stopped delivering parts on Tuesday due to payment delays.
_______________

Companies that can't pay bills can't get supplies to keep going.
This problem could spread. Suppliers fearing losses may
demand more cash up front. No more credit.

As soon as the market realizes that the hope is gone, back to
recession, where can you go?

Nowhere to run, nowhere to hide, nowhere to put money...
except maybe...Gold?

Operative
@ Blackjack
Interesting read you posted by Isenberg. Will have to print that one out and go back to see how many force multipliers he has revealed in his article.

Would think any moonless night would be a very long night/weekend for anyone holding a bunch of gold shorts.
Blackjack
Labor problems mount, pushing US towards recession
http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=i NEW YORK (Reuters) - Mechanics at US Airways Group Inc rejected a proposal that would have cut their wages to help the bankrupt carrier win full approval of a $900 million government loan guarantee, their union said early Thursday.

US Airways, the sixth-largest U.S. airline, said it was extremely disappointed by the mechanics' vote.

"We now regrettably must pursue changes to the mechanics' contract through the bankruptcy court if we are unable to quickly reach a new agreement," David Siegel, US Airways chief executive, said in a prepared statement.

The carrier has said it needs hefty wage cuts and other sacrifices from its employees to speed its restructuring under bankruptcy and win government-backed financing.

"I'm not certain what the company's going to do," said Joseph Tiberi, a spokesman for The International Association of Machinists and Aerospace Workers (IAM). "But bankruptcy is a long process and we are prepared to vigorously defend our members in bankruptcy court."
___________________

Labor unions getting fiesty.
I was watching King 5 TV news out of Seattle. Boeing workers
don't care about wage offer, they know Boeing plans to move
jobs overseas. They want more retirement benefits.
Boeing doesn't want that cost. Looks like a strike soon.
Then Boeing can say OK, screw you, we shut Seattle, which is
what they want to do anyway. Workers screwed as I see it.

To Operative: I agree who wants to be short with a war coming?
Lets see, Boeing shuts Seattle, another force multiplier for
pushing economy into recession?
Blackjack
More problems for Boeing
http://www.reuters.com/news_article.jhtml?type=businessnews&StoryID=1385635Revisions to Boeing's satellite-products lineup come at a time when satellite orders are depressed world-wide and Boeing's commercial-satellite sales have been hit worse than certain competitors partly because some big satellite operators have shunned its 702 models due to nagging reliability concerns, the Journal reported.
Blackjack
US ranks 16th in corruption/honesty ratings
http://cbs.marketwatch.com/news/story.asp?guid=%7B58684EAA%2D5525%2D41D9%2DA8C2%2DFA4EFC6B85B3%7D&siteid=mktwBerlin, Aug. 29 (Bloomberg) -- Bangladesh and Nigeria are the world's most corrupt nations, according to the latest annual league table published by the Berlin-based anti-corruption lobby group Transparency International.

The 2002 table ranks 102 countries according to how open officials are to receiving backhanders. Finland, Denmark, New Zealand and Iceland head the table as the countries perceived as being least corrupt.

The U.K. is the tenth ``cleanest'' nation and the U.S. ranks 16th, according to Transparency International. Bangladesh and Nigeria are just below Paraguay, Madagascar and Angola at the foot of the table.

``Corrupt political elites in the developing world, working hand-in-hand with greedy business people and unscrupulous investors, are putting private gain before the welfare of citizens and the economic development of their countries,'' said Transparency International Chairman Peter Eigen in a statement.

The table is based on surveys of how corrupt countries are perceived to be by academics, business people and risk analysts. At least three survey were required for a country to be included.

Publication of the table comes as many companies are being criticized for the actions of their directors. Yesterday, former WorldCom Inc. Chief Financial Officer Scott D. Sullivan was indicted on charges that he orchestrated a multibillion-dollar accounting fraud. He is accused of making false filings to the U.S. Securities and Exchange Commission in an attempt to deceive investors and inflate earnings.
Black Blade
"The Barbarous relic Files" - Savings Turn to Gold and Realty
http://timesofindia.indiatimes.com/articleshow.asp?artid=20373969&sType=1
Snippit:

Indian households are parking less and less money in deposits, shares, bonds and other forms of financial assets. The share of total household savings in these instruments has touched a five-year low of 61.77 per cent. And going by the estimates for 2002-07, though financial assets will remain the mainstay, the figures are unlikely to claw back to the heady levels reached in the 90s. Clearly, the new flavours are physical assets like real estate and gold.


Black Blade: Barbarous Relics eh? There have been some releases by brokerages lately that are attempting to predict that Indians are abandoning gold. This is ridiculous of course, bit they have been saying this for years and Indians flock to gold like swallows returning to Capistrano.

Nomad
Vanguard

uh, Horatio ...

these are standard boilerplate agreements for getting real time quotes. granted, they probably do make you sign away your first born child, but ... unless there is something ELSE you are required to sign, this is not news (sorry :)
Black Blade
Euro Markets Extend Damage
http://quote.yahoo.com/m2?u
The Euro markets are following up yesterday's massive losses with yet more losses. Asia extended yesterday's losses as well. Meanwhile US stock market indices are all negative. Gold is up $1.30 an ounce on USD weakness. Looks like another day of "entertainment".

- Black Blade
misetich
Europe's recovery runs out of steam
http://www.timesonline.co.uk/article/0,,3-397791,00.htmlSnip:

By Lea Paterson, Christine Buckley and Roger Boyes

EUROPE's hesitant economic recovery is grinding to a halt, sending share prices tumbling and piling the pressure on the Continent's leaders to kickstart growth.
Fears of a "double dip" European downturn yesterday triggered one of the largest falls in London shares since September 11, while many businesses have been scrambling to cut back expansion plans in the face of crumbling economic prospects. In the City, a rash of disappointing economic figures from across the EU sent the FTSE-100 index tumbling by more than 175 points to end the day at 4,274.
............
Analysts said that the UK would not escape unscathed from the slowdown on the Continent, with Gordon Brown's optimistic prediction of 2 to 2.5 per cent growth this year looking increasingly unattainable. Stewart Robertson, of Lombard Street Research, said: "Even if growth revives in the next few months, a figure of only around 1.5 per cent looks more likely."
*************
Misetich
Front continent to continent the "economic recovery" is faltering -
It appears the financial system is headed toward ANOTHER stress test
Investors "perceived" savings, retirements have vanished thus far as trillions of stock market $ has plunged and we are headed for ANOTHER leg down - Ouch!

Investors, institution bondholders have seen ther portfolio's slashed significantly as bond defaults have soared and we are headed for ANOTHER shake out as corporate sales and earnings are dwindling

Municipal bondholders have been decimated by unscrupolous means -

Government bond holders, in many parts of the world have seen their portfolios vanish as specific country's currencies have plummeted

Who's next - which country has an overvalued currency that has defied gravity in the face of poor economic growth?

Which investors have done extremely well during this critical period? PHYISCAL GOLD INVESTORS OF COURSE!

Got gold?



misetich
Some global bks pressured by Brazil turbulence-S&P
http://www.forbes.com/newswire/2002/08/29/rtr707797.htmlSnip:

NEW YORK, Aug 28 - Although the exposure of most European and U.S. banks to Brazil is manageable and massive ratings actions across this group of banks are not expected, that country's turbulence adds negative ratings pressure to some financial institutions, said a new Standard & Poor's report released yesterday.

On top of the list are Banco Santander Central Hispano S.A. and ABN AMRO Bank N.V. in Europe and FleetBoston Financial Corp. (nyse: FBF - news - people) in the U.S.
............
"These three institutions run sizeable operations in Brazil and have committed substantial investments to Brazil, while their overall profitability and strategy rely more importantly than for other players on the contribution of their Brazilian operations, making them more sensitive to the evolution of Brazilian risk" said Elena Iparraguirre, credit analyst for Standard & Poor's Financial Services Group in Madrid.
............
The report, Brazil Turbulence Heightens Ratings Pressure On Some Global Banks, provides an analysis of the rating implications of developments in Brazil for leading U.S. and European banks.

The full report is available on RatingsDirect, Standard & Poor's online research database, at http:/ /www.ratingsdirect.com. It can also be found at http://www.standardandpoors.com/Forum under Ratings Commentary/Financial Institutions.
***************
Misetich
No mention of Citi and JP Morgan - in Reuters article - but we KNOW!
The tide has reached the banking foundation - and its beginning to sharke

Got gold?

Black Blade
Brazil: When an IMF Bailout Is Not Enough
http://www.businessweek.com/magazine/content/02_35/b3797071.htm

The loan guarantees help, but they won't rescue its economy

Snippit:

The news brought a surge of euphoria. On Aug. 7, the International Monetary Fund announced it was prepared to lend Brazil $30 billion--a record sum that was expected to calm the country's roiled markets. But the IMF package wasn't enough. After an initial boost, Brazil's stocks, bonds, and currency went right on falling. The real has lost a third of its value this year. The country's benchmark sovereign bond is trading at a 40% discount. Analysts say that there are two main explanations for Brazil's continuing malaise: debt and politics.

Black Blade: This has already been discussed, however, here it is in print. The economies of Brazil, Argentina, Uruguay, Paraguay, Colombia, and Venezuela are already toast. These economies are far past being salvaged. Those who prepared by accumulating precious metals will fare much better than those who are praying for a miracle. We have already seen that in Indonesia during the "Asian Contagion".

misetich
Labor News
http://www.washingtonpost.com/wp-dyn/articles/A9001-2002Aug28.htmlMechanics Vote Down US Airways Pay Offer
The 6,800 mechanics of bankrupt US Airways early today rejected a cost-cutting plan proposed by the airline, setting the stage for a court fight over whether to nullify the mechanics' union contract.
...........
Boeing Braces For Strike As Vote by Union Nears
Boeing Co. workers will vote today on whether to accept the airline manufacturer's final contract. Rejection would set the stage for a strike beginning Labor Day.

The leadership of the International Association of Machinists and Aerospace Workers, the largest union at the aircraft company, has urged the 26,000 IAM members at Boeing to turn down the contract proposal. Union officials said Boeing's proposal threatens members' long- term welfare by reducing job security.
********
Misetich

Costs are risings as service industry price inflation races ahead
Health costs, insurance are skyrocketing
Stock Market portfolios and retirement portfolios have been wiped out
Consumer debt service near all time high
Corporate reveneus and earnings are plummeting

Personal bankrupticies, unemployment rising

Things will get worse before it gets better

How long before an investment bank derivative blow up?

Got gold?





misetich
More Labor News - Economy may sink if strike shuts ports
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/08/28/BU88270.DTL&type=businessSnip:
Oakland -- With dockworkers and shippers locked in contract talks, businesses worry that a possible strike at Oakland and all other West Coast ports could devastate commerce here and throughout the nation.

An auto plant in Fremont that uses imported parts could be forced to shut down. Central Valley farmers who sell produce to Asia through Oakland would need to find alternate routes -- shipping through Canada, perhaps -- or risk seeing their vegetables go to waste.

Factories in the Midwest that ship through Oakland would face a scramble to find other ports for their products. And prices for imported consumer goods rerouted around the strike could rise.

One consultant pegged the estimated cost to the nation of a 10-day strike at $19.4 billion.

"It would certainly help push us toward a recession," said Stephen S. Cohen, a professor of regional planning at UC Berkeley.
***********
Misetich
Labor is being squeezed and are reacting - The impact of labor strife in the fragile economy cannot be underestimated

How long before consumer spending plunges?
How long before we see an investment bank derivatives blow up?

Got gold?

Cavan Man
Next stop: N. Korea
U.S. UNDERSECRETARY of State John Bolton called North Korea "an evil regime that is armed to the teeth, including with weapons of mass destruction and ballistic missiles."
"President Bush's use of the term �axis of evil� to describe Iran, Iraq and North Korea was more than a rhetorical flourish � it was factually correct," Bolton said in a speech to a a group of South Korean government officials and scholars.
"There is a hard connection between these regimes � an axis along which flow dangerous weapons and dangerous technology," he said.
The chief U.S. arms-control negotiator was in Seoul for a three-day visit that included talks with South Korean officials on the communist North's arms proliferation. He discussed the same topic with Japanese officials in Tokyo earlier this week.
His comments come at a sensitive time, as the two Koreas try to revive stalled reconciliation after months of tension. South Korea wants Washington to open dialogue with Pyongyang about the arms issue.
Advertisement


Bolton stressed that such overtures will depend on whether the North will stop developing and exporting missile parts and technology to "notable rogue state clients such as Syria, Libya and Iran."
He said North Korea is "the world's foremost peddler of ballistic missile-related equipment, components, materials, and technical expertise."
Bolton also warned that a 1994 deal to provide North Korea with two power-generating nuclear reactors will be "in serious doubt" unless North Korea quickly allows U.N. inspections of its suspected nuclear weapons program.
Despite its denial, the Central Intelligence Agency suspects that the North may have stockpiled enough plutonium to make one or two atomic bombs before freezing its nuclear program in 1994.
Bolton also said that there is "little doubt" that North Korea has an active chemical weapons program and has "one of the most robust offensive bioweapons programs on earth."

As Bolton spoke, economic officials of the two Koreas were meeting in Seoul to discuss a host of pending issues, including a cross-border railway. The talks were part of an agreement reached during Cabinet-level negotiations in Seoul earlier this month.
The revived inter-Korean dialogue has coincided with North Korea's moves to reach out to the rest of the world.
In July, North Korea agreed to accept a visit by a special U.S. envoy. It held normalization talks with Japan earlier this week.
Some analysts in Seoul were critical of Bolton's speech.
"Bolton's speech casts gloom over President Kim Dae-jung's policy of engaging the North," said, Kim Tae-woo, a research fellow at the government-funded Korea Institute for Defense Analyses. "It signals that a rough path is ahead in relations between Washington and Pyongyang."
The United States fought on South Korea's side in the 1950-53 Korean War. About 37,000 U.S. troops are stationed in South Korea as a deterrent against the North.

� 2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

misetich
CalPERS loses 5.9%, double its forecast-The drop from the prior year mirrors that of other large pension funds that are tied to the stock market.
http://www.ocregister.com/business/calpers28cci.shtmlSnip:

SACRAMENTO -- The California Public Employees' Retirement System, the nation's largest public pension fund, said it lost 5.9 percent in the year ended June 30, about twice as much as the fund had forecast.

CalPERS said it lost 16.8 percent in U.S. stocks, 10.2 percent in international stocks and 7.8 percent in private equity. It made money in real estate and domestic and international bonds. In a June 26 letter to California public agencies, the pension fund had estimated it would lose 3 percent for the fiscal year.

The results highlight the effect on pension funds as U.S. stocks decline. The Standard & Poor's 500 Index is down 19 percent before dividends year to date. Many pension funds have at least one-third of their total assets in domestic equities.
**************
Misetich
With global economic recovery faltering and the US flat or negative growth stock market investors are warned of further portfolio erosion and continued domino effect worldwide

How long before an investment bank derivative blow up?

Got gold?
misetich
PC sector unlikely to recover in 2003- Still-slow corporate spending is expected to delay upturn until '04
http://www.dallasnews.com/business/stories/082802dnbuspcearns.5ad17.htmlSnip:

By CRAYTON HARRISON / The Dallas Morning News

Waiting for a recovery in the computer industry? Better luck next year.

The PC sector was supposed to be improving right now, leading to a full- scale recovery in 2003. But lackluster corporate spending and a shaky consumer market have pushed expectations for a resurgence out to 2004.
...........
"It's a vicious circle," said Joseph Beaulieu, an analyst for Morningstar Inc. "Companies aren't going to want to start spending until the economy starts to turn around, and the economy is going to be at least partially held hostage to low corporate IT spending."
*********
Misetich
There goes ANOTHER myth out of the window - Sir Greenspan productiviy miracle

Is Sir Greenspan any different than Enron or Worldcom Excutives? Haven't all of them conspired to deceive investors, through lies, deceit, under the table deals and accounting tricks?

Got gold?
misetich
US Congress to probe other banks for Salomon-style IPO allocations - report
http://www.afxpress.com/afxpress2/afx/story_43964.xml.htmlSnip:

NEW YORK (AFX) - Salomon Smith Barney's practice of allocating sought-after IPO shares to banking clients is prompting Congress to consider expanding its corporate malfeasance probes to include the activities of other investment banks, the Wall Street Journal quoted lawmakers as saying.

In light of documents released this week detailing Salomon's allocations of IPOs to top WorldCom Inc executives, Democrats and Republicans on key congressional committees are calling for hearings to investigate actions taken by banks as they sought to woo business, and the role of stock analysts.

Officials at Citigroup Inc's Salomon unit have said they did nothing wrong.
*********
Misetich

Investment bankers claim they did nothing wrong - yet investors investments have vanished and this crooks own incomes have soared

How long before an investment bank derivative blow up?

Got gold?
misetich
Munich Re, Swiss Re See Profit Erased by Stock Slump
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW3.NxURTXVuaWNoSnip:


Munich, Aug. 29 (Bloomberg) -- Munich Re and Swiss Reinsurance Co. said earnings were wiped out by plunging stock markets. The world's biggest reinsurers, along with Germany's Allianz AG, also said they may face more than $1.1 billion of claims from floods in Central Europe.

Munich Re posted a second-quarter loss of $378 million after writing down the value of its equity holdings by $1.5 billion. Swiss Re's first-half profit plunged 91 percent to $79 million following $613 million of investment writedowns.
............
Reinsurers, which help cover liabilities for insurers, invest the income from their premiums in stocks and bonds to try to boost profits. Munich Re and Swiss Re, like Credit Suisse Group, are losing money from their decision to buy stocks rather than bonds as equity markets soared during the late 1990s.
***********
Misetich
How can so many intelligent(?!) fund managers be so wrong? Didn't Bush & Co suggest social security to be invested in stocks?

The tide has reached deep in the institutions foundations - and the force has picked up

Got gold?


misetich
Enron Probe of Ex-CEO Lay Centers on Pre-Bankruptcy Stock Sales
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW2fBRX6RW5yb24gSnip:

By John Rega


Washington, Aug. 29 (Bloomberg) -- U.S. investigators probing Enron Corp.'s collapse are examining founder Kenneth Lay's stock sales, a sign of interest in insider-trading or disclosure violations rather than accounting fraud.

Michael Ramsey, an attorney for Lay, said he had two meetings with officials of the Justice Department, Federal Bureau of Investigation and Securities and Exchange Commission. Their questions centered on Lay's sale of $70.1 million of stock back to Enron in 2001, in the months before the energy trader sought bankruptcy protection, Ramsey said.

An insider-trading case might be easier to prove than accounting fraud, some lawyers say. Lay, who marshaled Enron and its employees to become the top donors to George W. Bush's presidential campaign, giving $572,350, was chairman or chief executive when Michael Kopper and other Enron executives used off- the-books partnerships to hide $1 billion in losses from 1997 to 2001.

``Given the large sums involved, insider trading offers the most direct theory for a jury'' if the government pursues charges against Lay, said Jonathan Turley, a George Washington University Law School professor and criminal defense attorney.
...........
``Ken Lay held on to as much stock as he could, as long as he could,'' Ramsey said.

By returning the stock to the company -- rather than selling it to outsiders -- Lay postponed a legal requirement to disclose the sales to the public.
............
Spurred by investor outrage over Lay's disclosures, the SEC on Tuesday accelerated the deadline for reporting all executive stock trades to two business days.

During 2001, Lay also sold 491,674 shares, $29.9 million worth, in open-market stock trades under a program to sell a set number of shares each day. The SEC created these programs to let executives divest shares without exposure to insider-trading charges.

Lay terminated his program after July 2001 as Enron shares sank below $45.

The automated trading plan ``provides a substantial layer of insulation against a possible violation of insider trading,'' said Jacob Frenkel, formerly a federal prosecutor and SEC enforcement lawyer.
***********
Misetich

Lay claims he did nothing wrong - Investment bankers claim they did nothing wrong - industry practice, "legal" transactions - conducted to benefit them on the backs of the "real" shareholders -

The foundations are being rocked!

Got gold?

misetich
Alliance Loses $7.9 Bln on Enron, WorldCom, Qwest, Tyco, Dynegy
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW2trhT2QWxsaWFuSnip:

By Edward Robinson


New York, Aug. 29 (Bloomberg) -- When Enron Corp. fired Chief Financial Officer Andrew Fastow last Oct. 24 for allegedly hiding huge losses in off-balance-sheet partnerships, a sense of alarm gripped Trent Webster, a portfolio manager at the Florida State Board of Administration.

The Sunshine State's investment arm was sitting on 5.5 million Enron shares in an account run by one of its money managers, New York-based Alliance Capital Management LP. Enron's stock had plunged 62 percent since Aug. 14, when CEO Jeffrey Skilling abruptly resigned for ``personal reasons.''

Webster called Daniel Nordby, a senior vice president in Alliance's Minneapolis office, and asked him why the firm continued to buy so many Enron shares.

``Dan stated that they had made a research mistake,'' Webster wrote in an internal memorandum to Susan Schueren, chief of the domestic equities unit at the Florida board. ``Dan acknowledged Alliance's mistake, saying that Alliance had stepped on a land mine.''
.............
Alliance, which had begun buying Enron stock for the Florida fund at $79 a share on Nov. 6, 2000, sold its entire 7.6-million-share stake for 28 cents a share on Nov. 30, 2001.

``It was the grossest kind of speculation,'' says Thomas Herndon, the board's executive director until his retirement on June 28. ``What in the world motivated them to do this in the face of such clear and present danger?''

Alliance is the eighth-largest fund management firm in the world, with $389 billion in assets. The firm has 2,440 institutional clients and manages pension plans for government workers and employees of such companies as Ford Motor Co. and Pfizer Inc. Alliance also manages university endowments and 330 mutual funds in the U.S. and elsewhere.

Buying Spree

Alliance followed its Enron investments with a series of bad bets on other headline-making companies. After a buying spree that began in the first quarter, the firm is the largest institutional stakeholder in WorldCom Inc., which overstated earnings since 1999 by $7.18 billion and declared bankruptcy on July 20.

Alliance is also the biggest holder of Qwest Communications International Inc., which disclosed on July 28 that it had incorrectly booked about $1.16 billion in revenue from 1999 to 2001.

The fund manager is the largest shareholder in Dynegy Inc., a Houston-based energy trader under investigation by the U.S. Securities and Exchange Commission over whether it inflated revenue through sham natural gas trades.

In addition, Alliance is the No. 1 investor in Tyco International Ltd., a Bermuda-based manufacturer the SEC is investigating for possible misuse of company funds by former CEO Dennis Kozlowski.
..........
Alliance's losing streak has stunned officials in pension funds.

``Today, we see that regulators are failing, the boards of directors are failing and the accountants are failing,'' says Michael Musuraca, a trustee of the New York City Employees' Retirement System, a $35 billion pension fund that serves more than 350,000 city workers and retirees. ``And if, in fact, asset managers are also beginning to fail, where does that leave people to go? Alliance Capital has a great reputation; it is a giant in the industry. This really does make you say, `Where do I turn next?'''
...........
Misetich

This really does make you say, `Where do I turn next?'''

PHYSICAL GOLD! Get some!

The financial titanic - everybody believed - too big to fail- worse is yet to come

Got gold?
misetich
OPEC price hawks keep heat under oil price
http://www.forbes.com/newswire/2002/08/29/rtr707839.htmlSnip:

By Tom Ashby

LONDON, Aug 29 (Reuters) - OPEC price hawks kept the heat under world oil prices on Thursday as Iran and Indonesia joined a chorus of cartel members opposing any release of extra oil onto world markets this winter.
...........
Iran and Indonesia on Thursday joined fellow OPEC members Kuwait and Venezuela by arguing against any relaxation in output curbs when ministers meet to decide policy on September 19.

"Iran believes market fundamentals do not warrant a production increase. The price is high because of the war rhetoric," an OPEC delegate told Reuters.
.........
************
Misetich
The Saudis are keeping the Palestinian card on the table - does not augur well for those looking for cheaper energy prices

Got gold?
Blackjack
"Men wearing suits" ROB Central Bank in Daylight $3.8 Million
http://news.bbc.co.uk/2/hi/business/2223053.stmArmed robbers have raided the high-security central bank of Western Africa in Ivory Coast and stolen 2.6bn CFA francs ($3.8m).

The Central Bank of West African States (BCEAO), in Abidjan's busy business district, was robbed at around midday on Tuesday by men wearing suits.
_________________
Humor Break, true story, Ivory Coast in West Africa

Men in suits robbed us here too $7 Trillion

Just watching analyst on CNBC saying 9 of 10 sectors are
a great buy right now.
Knallgold
Are there 9 Gold sectors?
"Men wearing suits" ROB Central Bank in Daylight $3.8 Million"

Another way of putting that money away from banksters!?

BTW,Austrian J�rg Haider proposed to use CB monetary reserves to help flood victims.Officials said "no",claiming it to be incompatible with the law.It was unclear if Goldreserves were also meant with reserves.
Socrates964
Rats leave the sinking ship
US housing executives offload stock
By Peronet Despeignes in Washington
Published: August 28 2002 22:59 | Last Updated: August 28
2002 22:59

Executives across the US home-building industry have been
selling shares in their companies at a record pace this year,
suggesting they believe the country's housing market has
peaked.Data compiled for the Financial Times show that
corporate officers and board members in publicly traded US
building companies sold a record $258m-worth of shares more
than they bought in the second quarter.It is the largest net
sale of stock in the industry in quarterly records going back
to 1996, and was done either by exercising options or
directly cashing in stock grants. In many cases, corporate
officers have sold more than 50 per cent of their holdings
over the past year."This is an anomaly," said Lon Gerber, a
research director at Thomson Financial, the information
services group, adding that in many industries such selling
had fallen.The selling went on while home sales, home values
and builders' stock prices were surging. In addition, most
stock analysts were maintaining buy recommendations and
economists were debating whether the industry was
experiencing a bubble effect.Thomson Financial and The
Washington Service, a consulting firm prepared the figures
from corporate filings to the Securities and Exchange
Commission. The data show that of the 16 homebuilders with
the largest market capitalisation, seven had reduced their
executive shareholdings by the largest amount seen in
individual records going back two decades.Executives at
another three companies engaged in share selling well above
their average in the last 30 days, according to Bernard Fulk,
a senior analyst with The Washington Service.Debate has
intensified in recent months about whether the housing
market, a mainstay of growth for the US economy in the past
year, is a bubble that will gradually deflate or abruptly
pop.Policymakers such as Alan Greenspan, Federal Reserve
chairman, have dismissed the speculation, saying home values
are supported by low mortgage rates and land shortages.Some
analysts, however, fear home values may be increasingly
fuelled by excess credit, a subsequent deterioration in
lending standards and unsustainable expectations among
prospective home buyers for more double-digit percentage
gains. In some metropolitan areas, home prices have risen by
more than 20 per cent over the past year.David Seiders, chief
economist for the National Association of Home Builders, said
the group expected housing numbers "to top out sort of right
around now - housing isn't going to be the big engine of
growth forever - but we don't expect them to recede
much".Rise in the value of the average home by
metropolitanarea (per cent change from 2001-Q2 to 2002-Q2)
Source: National Association of Realtors
Nassau-Suffolk, NY 29.6
Bergen-Passaic, NJ 24.7
New York-North NJ-Long Island, NY 22.3
San Diego, CA 21.3
Monmouth-Ocean, NJ 21.0
Washington, DC/ MD / VA 20.8
Providence, RI 20.7
Los Angeles-Long Beach, CA 18.0
Miami-Hialeah, FL 17.0
Anaheim-Santa Ana, CA 16.6
Source: National Association of Realtors
There are various explanations for individual sales
of stock, including routine profit-taking.However, Mr Gerber
called the industry-wide trend disconcerting, adding
that "the insider signal is generally one to two quarters
ahead of turns in the stock price". He speculated that
executives may be worried about the risk of a slowdown, if
not a reversal, and were not waiting.Homebuilder share prices
have surged over the past year, outperforming most of the
stock market, as mortgage rates have slid towards 30-year
lows. But they have been volatile over the past few weeks,
declining sharply in June and July before recouping some of
their losses in August.




http://news.ft.com/servlet/ContentServer?
pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186102016&
p=1012571727088
goldquest
@Mr Gresham ref. msg#: 83937
Thanks for the kind words. Greatly appreciated!
Blackjack
Hizbullah fire missiles and mortars at Israel from Lebanon
http://www.jpost.com/servlet/Satellite?pagename=JPost/A/JPArticle/ShowFull&cid=1029920624407Three IDF soldiers were injured, one moderately and two lightly, when Hizbullah fired at their outpost in the Har Dov area Thursday afternoon. They were evacuated to hospital, Israel Radio repoirted.

The Hizbullah had been firing mortar shells and missiles at the IDF outposts in the area during the afternoon, in what was the first time in several months that Hizbullah fires at Israel.

Hizbullah stopped its fire at the outpost at around 18:30 local time, the report added.

Lebanese police were quoted in the report as saying said that IAF war planes bombed Hizbullah outposts in the Sheba'ah Farms area earlier Thursday.
USAGOLD / Centennial Precious Metals, Inc.
Long weekend coming up! Lock your price in with an order today.
http://www.usagold.com/ProductsPage.html

Gold Today!

Because you never know what tomorrow will bring.

Call USAGOLD - Centennial Precious Metals
(800) 869-5115

Horatio
Vanguard
Nomad Thanks Nomad for your comments,I needed to know if I was overreacting.Anytime someone gives me a take it or leave it ,I usually leave it.What pisses me off is they are denying me access to my account unless I agree to what they want.
I am on my way out the door to see an old friend,a retired broker and ask for his comments.My inclination is to change brokers and my first inclination is usually right .
I transferred a IRA account to Vanguard and it took 6 months ,I've been pissed about that..not being able to trade and locked in limbo.In the meantime the broker I was leaving instituted a new transfer fee and vanguards delay cost me $116 in unecessary fees.Then I haven't been able to get any Confirmations either "on line" or via snail mail since March in my other Vanguard account.
My statements are accurate and the execution of trades has been excellent since the transfer,but they undo thier good points with the bad.
Again thanks for your feedback.
sector
@Horatio What to do when someone presents clearly unacceptable terms...
...it's tough but...You must accept that they don't want your business, then:

(1) Contact an attorney [For demand letters they usually charge less than $750.
(2) Have the attorney do the talking for you
(3) Have him demand, via letter, an immediate transfer of all accounts through the included standard ACATS form issued to the attorney by your new broker [All brokers have this form - it's their ticket to new customers]. You need not deal with the Vanguard mopes again. It shouldn't take more than a couple of weeks.

You may have recourse [To get back some attorney's fees] against Vanguard for the original six months delay.
Sierra Madre
Cavan Man: interesting comments from Under Sec John Bolton...

Bolton refers to North Korea as a "rogue state".

Well, I sure am glad I don't live in N. Korea (or S. Korea for that matter) but - "rogue" state? Just because they do not want to be pushed around?

U.S. is going to be the only non-rogue state in the world, if this keeps up. "They're ALL madmen, except ME!"

Sierra
Gandalf the White
FINALLY !
SPOT jumped through the US$313. level on Access !!
Jump SPOT, JUMP !
<;-)
White Rose
Gold stocks jumped fast 3:45-4:00 -- what's up?
Some pretty fast gaining stocks there in the last few minutes of trading. Perhaps time to shift some of those gains into physical.
misetich
Placer Dome cuts gold hedging by 20 percent
http://www.forbes.com/newswire/2002/08/29/rtr708453.htmlSnip:

VANCOUVER, British Columbia, Aug 29 (Reuters) - Canadian gold miner Placer Dome Inc. said on Thursday it cut its gold hedging program by 20 percent in a bid to free more production to take advantage of current price levels.

Placer said its committed onces should go down by the end of December to 6.8 million ounces from 8.5 millions ounces with an expected realized gold price in excess of $400 per ounce.

Placer said the gold hedged, or sold under future contracts, will represent less than 40 percent of its expected production over the next five years.

It expects to have in excess of 90 percent of its production uncommitted in 2003.
********
Misetich

The mega hedgers are changing their tune -

The end of an era

Got gold?
Cavan Man
Sierra Madre
and me
Boilermaker
US exporting unemployment
http://biz.yahoo.com/rf/020829/economy_mexico_maquiladora_1.htmlReuters Market News
Mexico June maquiladora employment fell 10.8 pct
Thursday August 29, 6:38 pm ET

MEXICO CITY, Aug. 29 (Reuters) - Employment in Mexico's maquiladoras, or export assembly plants, fell 10.8 percent in June compared with the same month a year ago, the National Statistics Institute (INEGI) said on Thursday.

The drop in employment was less steep than in May and April when it was off 12.5 percent and 15.4 percent respectively. The sector saw steady job losses all last year, driven by lower demand for Mexican products from its main trading partner, the United States, which buys about 85 percent of Mexican exports.
mdgc
White Rose: Gold stocks jumped fast 3:45-4:00 -- what's up?
it portends an exciting Friday, gold up a few dollars before the long weekend, gold stocks and xau spike up

Galerider
RESPONSE TO OPERATIVE
The eigth wouldn't be bad.....the things I observe and logistics. It all needs ten days notice for me say here we go! There is one firm up in Tokyo that started up on the strategy of allowing people to purchase gold in order to have it manufactured and crafted in jewelry. Now it acts more as an accumulation account. No big jump there. Just steady purchases by mom and pop (the generation that knows hard times).
Galerider
RESPONSE TO OPERATIVE
The eigth wouldn't be bad.....the things I observe and logistics. It all needs ten days notice for me say here we go! There is one firm up in Tokyo that started up on the strategy of allowing people to purchase gold in order to have it manufactured and crafted in jewelry. Now it acts more as an accumulation account. No big jump there. Just steady purchases by mom and pop (the generation that knows hard times).
Waverider
Al-Qaeda Has Ample Money
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk&tp=ad_topright_topworld&T=markets_box.ht&s2=ad_right1_windex&bt=ad_position1_windex&box=ad_box_all&tag=worldnews∣dle=ad_frame2_windex&s=APW6AZRQRQWwtUWFlSnippit:
"Al-Qaeda is ``fit and well and poised to strike again at its leisure,'' in part because ample money still reaches its coffers, according to a United Nations report on attempts to weaken the terrorist operation.

After freezing $112 million in al-Qaeda assets, governments have found it ``exceedingly difficult'' to identify and block additional money, according to the report. The blocked funds represent ``only a small fraction'' of what is still available to al-Qaeda. Since the monitoring group was formed, only $10 million more has been frozen, the report said. ``Financial support continues to be available to al-Qaeda from Osama bin Laden's own personal inheritance and investments, from members and supporters of al-Qaeda and from contributions obtained or diverted from charitable organizations,'' the report said.

Al-Qaeda has shifted its assets into precious metals and gems and transferred money through an informal exchange network known as ``hawalas'' that is difficult to trace, the UN study said."

Waverider: An update on AlQaeda finances - they know the advantages of physical Gold ownership!

BTW - quiet here for a week day. Spot's frisky, up $1.50 to $314.20 at the moment! Thanks everyone for your contributions here - each is appreciated.
R Powell
Magnet testing
Gold +1.50 in the access and downunder markets
Silver +0.02

Silver closed on Comex at 4.52 for three days straight. An old trader's axiom is "Never sell a quiet market" What do old traders know? I don't know. I'm trying to sell puts. Options fade away over time like old soldiers and old traders, I'd like to have time on my side for a change.

There has been much talk of plated silver being sold as 925 sterling in a well known national chain discount store. Pure silver should not react to a magnet, although the hinges on silver jewelry may. Be careful!
One more day till Labor Day weekend.
Rich
Trapper
Sir Black Blade
As our resident oil man can you shed some light on this Iraq war thing. Lots of talk here about "the only real reason we are going to war is to get the oil". The problem I see is we have the oil. We give the Saudis paper and maybe some gold we get all we want. My question. Why would we upset our good thing? All this war will do is drive up oil, drive up gold and silver. The insiders had cheap oil and cheap gold what is really up here? Your thoughts please. Live small.
RJ
DOWNUNDER
WHAT A CROCK ! -- - - MANIPULATED MARKETS
I checked out some overnight US stock prices & couldn't help noticing that JPM , GS & IBM were ALL UP !

Considering the overall market performance this is surely a blatent & obvious RAMP. The criminals just dont give a damm!

There ---I'm glad I got that off my chest --felling better already. :) BTY what is the stock symbol for Citibank? TIA
Black Blade
Re: Trapper � Oil, War, and the Middle East


That is essentially the reason we will go to war. It is about oil. The talk of biological, chemical, and nuclear weaponry is just the sideshow for the masses. The problem is that no one outside the US is buying that story. Daddy Bush had his chance 11 years ago to put this all to rest. After the initial success of the allied military on the battlefield, the politicians got involved and as is typical mucked things up. In effect Saddam won the war because the real objective was not attained. Now Dubya is seeking revenge for dear old dad as well as securing a steady supply of oil. The locals (Kurds and Shiites) in Iraq were killed when they attempted to topple Saddam at the insistence of the US and with promises of military assistance. They will not be fooled again. Americans are simply liars and thieves as has been the case for many years. If I were a ME ruler and the US asked for my help against a more powerful neighbor I too would decline.

On the other hand, the Saudis (and Kuwaitis) are not our friends. They hate and despise us and everything that we stand for. The state religion (Wahhabism) controls the education system and teaches that all who do not believe exactly the way that they do are "enemies" that must be killed. They teach that if you die fighting jihad you'll die a martyr, a great honor with special afterlife rewards. The 15 Saudi hijackers on 9-11 were Wahhabi and they were carrying out this "holy" act.

This is the problem. The Saudi royals (and most all Middle East rulers) love the cash and the life of good liquor, fast money, fast cars, high-class hookers (male and female), etc. when they travel and live abroad. They payoff the Wahhabi clerics to keep a lid on things at home and to avoid civil war. They also paid off Osama Bin Laden to the tune of over $300 million. The royals are living in fear of a revolution that could topple the monarchy. The ranks of the royals are split between support for the perverted Wahhabi fanatics and the friendship of the west. So you see we must suck up to the Saudi royals for oil while cajoling them to crack down on the Wahhabi clerics. At the same time the Kuwaitis have some semblance of a democratic republic, but the largest political party is the Islamic Fundamentalist Party. They also hate America. If it should come down to it, we will attack and occupy the Middle East and take the oil. Without "cheap oil", the global economy is good as dead. When it comes down to dealing with these Middle Eastern governments it is a matter of "the devil you know versus the devil you don't know".

At least that's my take on it. But at least you're right; in the end it really is all about oil. Consider that the Saudis have about 25% of the world's oil reserves. Add to that the oil under Kuwait, Iraq, Iran, Oman Qatar, Bahrain, and the UAE. The world oil market is global � that is restriction of supply to punish one country will in the end punish all oil consumers. So a commodity as critical as oil in the ME will inevitably lead to warfare for many years to come.

- Black Blade
silvercollector
Black Blade
Glad to see the 'oil man' has offered a take on things. I agree on every phrase that you speak but I just don't see it as that plain.

So we go in and take the oil, because we need it? End of story?

Arabs have promised an alliance, "...an attack on an Arab state will be perceived as an attack on ALL Arabs..." Witness Eqypt blocking US convoys from entering the Suez canal last week.

This is not a walk-in-the-park. The terrorism and WMD 'card' has a role to play. Do you dismiss this concept?

Many have dismissed the oil/war/gold relationship during this discussion, many have openly refered to the lack of gold discussion during this debate. I see this as directly involving gold; it is the biggest gold topic ongoing IMHO.

Can you comment further?

Thanks.








Thanks.
Black Blade
Rate cuts said inflating real estate bubble
http://www.nationalpost.com/financialpost/story.html?id={60B04E23-A576-4A56-985A-14789F8B8002}
Goldman report says lower U.S. dollar key to global recovery

Snippit:

Waiting around for the U.S. Federal Reserve's interest rate cuts to finally pull the global economy out of its funk is going to achieve little more than replacing the equity market bubble with a housing bubble, a new report suggests.

Instead, as the spring recovery turns into a summer slump, policy makers need to get serious with a wide range of monetary and fiscal policies that will spread the burden for jump-starting growth away from the United States to the rest of the world, economists at Goldman Sachs said.

As Goldman sees it, U.S. interest rates of 1.75% are only fanning the flames of an unsustainable housing boom while doing little to recharge the battered corporate sector. "In fact, in some ways, the current policy prescriptions are worsening the underlying problem," Jim O'Neill, Goldman's chief economist based in London, and William Dudley, chief U.S. economist in New York, said in their report: The Global Economy Adrift: Time for a Fundamental Shift in Policy. "In essence, a mortgage debt bubble is being created to take the place of the equity market bubble that preceded it."


Black Blade: I did not expect to see a report like this from Goldman Sachs, but this is one of the few times I agree with their analysis. The US dollar must be weakened to stimulate the US economy and the real estate bubble is getting much worse while threatening to devastate the dreams of millions. Hello Japan, Hello Argentina, Hello Brazil, etc. As always, get out of debt (as soon as possible), stash enough cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. The stock, currency, and even real estate markets are facing a much more serious correction ahead.

darkhorse
Anybody have an ideas?
Ok, let's say our guys over there manage to take whatever the ultimate goal is for TPTB (for now, let's all agree it's the oil). Let's say we did this relatively quick and "easy". I get the feeling most people haven't thought about how many losses we'll take in doing all this, but for the sake of this post let's say we didn't do too bad. Nobody, in all their supposed wisdom of what's gonna happen, when and to whom, has thought about what the rest of the world is going to be doing during and after all this takes place. Seems to me there's an assumption that everybody else is going to mind their own business/look the other way while we do as we please in the ME. I'm no geopolitical expert myself, but with the biggest portion of the world's oil at stake, I'm pretty sure A LOT of other people are gonna have something to say about all of this!
Black Blade
Re: Silvercollector � Taking of Middle East Oil

We will take it (oil) because we must. Of course I think that we will use some other pretense and try to bring others into the fold. Alliances are easily undermined for a price anyway. We bought off Egypt once for $10 billion and I am sure that we could do it again. However, we are not likely to rush right in and openly declare that we are taking the oil. It would probably be done for "national security" reasons and with surrogates and accomplished with friends or "puppet" regimes under the guise of a "war on terrorism" or "stop the spread of weapons of mass destruction" for example. The boys at the State Dept. can be quite inventive I understand. No matter, when Americans are lined up at gas stations and paying over $2/gallon for gas, they will demand that something � anything be done to fix the energy crisis. The last thing a president wants is an energy crisis and rampant inflation on his watch.

On the other hand, it would make "environmentalist" and "environmentalism" dirty words as well. An environmentalist would be as welcome as a turd in a punch bowl during an energy crisis. We could expect an opening up of ANWR and off the coast of California to oil exploration under those circumstances. That is how nuclear energy and the north slope-Prudhoe Bay was finally accepted in the 1970's under environmental opposition. Considering that we are even more dependent on foreign oil now than we were then, I suspect that we would whatever means necessary, even to go to war to obtain "cheap energy". I have no doubt about that. The electorate and the very survival of the modern economy demand it. But then that's just my opinion as I only have some human nature and historical perspective to draw from while formulating these thoughts. It certainly is an interesting subject for debate though. I will have to think on this some more while I sip some yerba mate. Cheers!

- Black Blade
Boxman
Symbol for Citigroup
DOWNUNDER, the symbol for Citigroup is C.
Boxman
DOWNUNDER, a little more on Citigroup
Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Salomon Smith Barney, Banamex, and Travelers Life and Annuity. Additional information may be found at www.citigroup.com .
Black Blade
The Dow deserves to be toast
http://cbs.marketwatch.com/news/story.asp?guid=%7B35F430EE%2D2099%2D4449%2DB2A7%2D1A7AFBB13D01%7D&siteid=mktw
Bernie Schaeffer makes case against headline index

Snippit:

SAN FRANCISCO (CBS.MW) - Years from now, when the carnage in stocks is over, a handful of U.S. researchers will get passing grades for sticking to their guns about the overpriced market. Bernie Schaeffer belongs in that small group. Schaeffer's views at Schaeffer's Investment Research make him an easy target for the millions of Americans who are suffering deep portfolio losses in this, the third losing year for U.S. stocks. "Pessimist, fear-monger, anti-American, I hear it all," Schaeffer told me over breakfast in San Francisco. "But in 1994 they were calling me Bernie the Bull on CNBC."

Schaeffer at age 55 is just as direct over a meal as his regular written commentaries, which tell investors they are being way too forgiving of overvalued stock indexes. His main course these days is the Dow 30 stocks that likely will become chopped liver when the stock market falls off its perch. "I call the Dow the headline index," he says about the Dow Jones Industrial Average that is destined for toast. Schaeffer sees the Dow as a "stupid" product of a long-gone age, when a small group of industrial companies could somehow represent the entire American stock market. The New York University mathematics major puts a lot of faith in the idea of a full-scale retreat from stocks. In that regard, his expectation of a market washout, complete with tears, jangled nerves and tremendous point declines, is similar to those of several other pure technicians, including Paul Desmond at Lowry's Reports and his own senior quantitative analyst, Christopher Johnson in Cincinnati.

Does Schaeffer believe in market manipulation? "I'm not going to go as far as Bill Murphy and the gold folks about that subject," Schaeffer says, referring to the chairman of the Gold Anti-Trust Action Committee and a growing belief that commercial banks and governments work behind the scenes to inflate paper values and deflate hard assets, like gold. "But if you are going to manipulate an index, it would be the headline index." Schaeffer sees gold - and gold mining stocks -- as investments that will fare well in what inevitably will be turmoil in coming months or years for the stock market. "Whether it's a panic or a grind-'em-down bear market, it's going lower," he says.


Black Blade: Interesting article. I posted a slice about Paul Desmond earlier today (in the Daily Gold Market Report). It appears that Schaeffer does not necessarily buy the market manipulation theory (a la "President's Working Group on Financial Markets" aka the "Plunge Protection Team). However, he does recognize that the stock indices (the DOW in particular) are grossly overvalued. When the run for the exits in a wave of panic arrives, I would want to be in precious metals and maybe select energy holding (make that "very select"). We are about to see that once in a lifetime economic meltdown that most of us have only read about in the history books. It should be "interesting".

steady
response to any ideas from darkhorse
darkhorse watch the disinformation/information spewed forth about the terrorists in georgia the country bordering russia where usa has troops could be interesting.
Black Blade
Re: Boxman - Citigroup

Hi Boxman, good to see that you are not letting "retirement" keep you away from the forum. Today Citigroup announced the sale of their New York headquarters building. Perhaps this gives some credence to the rumors of a "liquidity problem" at Citigroup. Just a thought anyway. Cheers!

- Black Blade
Blackjack
Asian Central Banks buying Gold, China in Dec bought 105 tons
http://asia.news.yahoo.com/020829/5/hr6z.htmlSingapore, Aug. 29 (OsterDowJones) - Asian central banks will buy more gold as their economies expand post-Asian crisis and their foreign exchange reserves see a rapid buildup, an academic told OsterDowJones in an interview Wednesday.

Asian central banks' gold holdings in absolute amount will increase even as Asian central banks maintain a fixed percentage of gold in reserves, said Tan Khee Giap, an associate professor with Singapore's Nanyang Technological University, or NTU.

"Just the fact that the (reserve) base has gone up, even if they maintain the (gold) ratio, it would mean higher purchases of gold," Tan said.

"Should there be a shift in policy to say increase (gold) reserves because of uncertainties (in financial markets), of course the potential demand will be even higher," Tan said.

Tan heads the NTU's Central Banking Policies Research Unit and the ASEAN Economies Monitoring Unit.

Tan said he sees foreign exchange reserves of many of Asia's central banks to continue to build up quickly after the Asian crisis, and these countries will certainly buy more gold.

"Other rich countries that will continue to buy gold include Malaysia, Thailand, South Korea, Singapore, Taiwan, China and India," Tan said, adding India's foreign exchange reserves, like China, are going up very fast.

China's foreign exchange reserves stood at $246.5 billion at the end of July, an increase of $34.3 billion since the beginning of the year, a government official said in remarks reported by the Xinhua news agency.

"If you look at the rate of accumulation of reserves in the first half of 2002, (China's) gold holdings can be projected easily. You can even do it on the back of an envelope," Tan said.

According to figures from the International Monetary Fund's Web site, China's PBOC increased their gold holdings last December to 500.8 metric tons, up by 105 tons.
_____________
Good article from someone who should know.
Bullish news for Gold.
Blackjack
Help wanted index dropping
http://www.conferenceboard.org/economics/helpwanted.cfmThe Conference Board's Help-Wanted Advertising Index - a key barometer of America's job market - declined three points in July. The Index now stands at 44, down from 47 in June. It was 57 one year ago.

In the last three months, help-wanted advertising declined in seven of the nine regions of the U.S., and increased in two areas. Steepest declines occurred in the West South Central (-13.6%), Middle Atlantic (-11.6%), and South Atlantic (-5.7%) regions. Increases occurred in the New England (1.8%) and Pacific (1.0%) regions.

Says Conference Board Economist Ken Goldstein: "Job advertising stopped falling late in 2001. But since November, ad volume has remained essentially unchanged as layoffs moderated. The U.S. labor market is treading water, with the economy clearly growing too slowly to open up many new jobs (only a mere 6000 new jobs in July). With an economic recovery not yet strong enough to produce new jobs, businesses simply aren't increasing their recruitment efforts."

The Conference Board surveys help-wanted advertising volume in 51 major newspapers across the country every month. Because ad volume has proven to be sensitive to labor market conditions, this measure provides a gauge of change in the local, regional and national supply of jobs.
Blackjack
US considered "suicide missions to protect US" after 911
http://news.bbc.co.uk/2/hi/americas/2222205.stmUS Air Force commanders considered crashing fighter jets into hijacked planes on 11 September because of a lack of armed planes, a BBC investigation reveals.

In the immediate aftermath of the terror attacks US fighter planes took to the skies to defend America from any further attacks.

It was very possible that they [US pilots] would have been asked to give their lives themselves

Colonel Robert Marr Their mission was to protect President George W Bush and to intercept any hijacked aircraft heading to other targets in the US.

But, as a new BBC programme Clear The Skies reveals, the threat of an attack from within America had been considered so small that the entire US mainland was being defended by only 14 planes.

As a result unarmed planes were diverted from training missions in a desperate bid to increase the number of fighter planes patrolling American airspace.

Colonel Robert Marr was Commander of the North East Defence Sector and remembers the words that came over the secure phone "we will take lives in the air to preserve lives on the ground".

US military unprepared

However, at the time of the attacks the US had just four fighter pilots on alert covering the north eastern United States.


Colonel Marr: Too few planes to defend the US

US pilots were forced to take to the skies without any weapons and might have had to deliberately crash into a hijacked plane to prevent casualties on the ground.

"I had determined, of course, that with only four aircraft we cannot defend the whole north eastern United States," he said.

"Some of them would have just gotten in the air possibly without any armament onboard.

"If you had to stop an aircraft sometimes the only way to stop an aircraft is with your own aircraft if you don't have any weapons.

"It was very possible that they [the pilots] would have been asked to give their lives themselves to try to prevent further attacks if need be."

Colonel Marr said: "That was the sense of frustration, of I don't have the forces available to do anything about this, we've got everything up that we can get up and still can't do anything."

Two of the pilots patrolling north east America told the programme how they struggled to get to New York as fast as possible after the first plane had hit the World Trade Center.

Pilots "Duff" and "Nasty" recalled they were only minutes away when the second plane hit the towers.

Pilot Duff said: "For a long time I wondered what would have happened if we had been scrambled in time.

"We've been over the flight a thousand times in our minds and I don't know what we could have done to get there any quicker."
_______________

We have to get this from the BBC.
Never saw this on US media going on now a year.
Got Gold?



Sierra Madre
President of Mexico, Vincent Fox says....
Mexico�s dollar reserves of $45 billion are so enormous that "we don't really know what to do with them"

Don't you wish you could tell him? Let's see, $10 million buys one ton, $1 billion buys one hundred tons, $10 billion buys...a hundred tons, because the price just went up to $3130/oz.

Happy thoughts, everyone, and good night!

Sierra
Blackjack
Derivatives Business is BOOMING! Yipes!
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW6rSRZhQXMgV2FsLondon, Aug. 30 (Bloomberg) -- As Wall Street firms slash jobs at the fastest rate in a quarter century, some bankers are in more demand than ever: those who concoct, sell and trade contracts that protect against bond or loan defaults.

UBS Warburg LLC plans to increase its credit derivative staff 50 percent in the next 12 months after more than doubling the group to 56 people from 25 last year, said Sal Naro, global head of the business. Dresdner Kleinwort Wasserstein, whose parent Dresdner Bank AG is cutting 3,000 jobs, is adding people in credit derivatives, where annual revenue is doubling.

``There are definitely niches in fixed-income that are not just treading water but are hiring,'' said James Hogarth, a managing director at London-based recruitment firm Hogarth Davies Lloyd. Credit derivatives specialists ``should do OK this year.''

Bankruptcies of companies such as WorldCom Inc. and Enron Corp. have spurred interest in credit derivatives. In July alone, 16 companies defaulted on a record $33.4 billion of debt, according to Moody's Investors Service.

``People have realized that credit risk is not something you can put in your drawer and forget about, because it comes back to bite you,'' said Matteo Mazzocchi, global head of credit derivatives and securitization at Dresdner Kleinwort Wasserstein. ``Everyone has woken up to the fact that he has to better manage his credit risk.''

Insurance

The most common form of credit derivatives, called credit- default swaps, act like insurance policies. The bondholder or bank lender pays another investor or bank an annual fee in exchange for a guarantee the debt will be repaid if the borrower defaults.

Other credit derivatives let buyers insure a range of bonds, known as a basket-default swap, or pay investors the returns of an asset without having to own it, called a total-return swap. They're also used to bundle, slice and resell bonds and loans, in securities called collateralized debt obligations.

The credit-derivatives market grew more than sixfold between 1998 and 2001, according to the Bank for International Settlements. The face value of outstanding credit derivatives climbed to $695 billion in June last year, from $108 billion three years earlier.
_____________
Multiplier Effect coming?
Blackjack
Unemployment in Germany and France nears 10%
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW6oVxXmRnJlbmNoParis, Aug. 30 (Bloomberg) -- French unemployment probably climbed to the highest level in 21 months in July as companies scaled back production, economists said before the release of a government report today.

The number of registered jobseekers probably rose by 10,000 to 2.42 million, according to the median forecast of economists surveyed by Bloomberg News. The jobless rate probably remained at 9 percent, the analysts said.

Companies may pare more jobs in coming months as factories trim output. Manufacturers in Europe's third-largest economy were more pessimistic in July than at any time since March as orders declined. Total Fina Elf SA said this week it's shedding 1,086 jobs during the next three years at its chemicals unit Atofina.

``The economic outlook is bleak and we can expect a further deterioration in the jobs market,'' said Jacques Cailloux, an economist at Barclays Capital, who predicts the jobless rate may rise to 9.3 percent by the end of the year.

Unemployment in France has risen for every month except one since May last year. Alcatel SA, Valeo SA, Europe's largest publicly traded car parts maker, and Cap Gemini SA, the region's largest computer-services company, are among companies that have eliminated jobs.

HighWave Optical Technologies SA, a producer of optical communications equipment, said yesterday it will cut two-thirds of its workforce as it seeks to become profitable in 2003. The company will eliminate 109 jobs, reducing the number of workers to 58.

The government will release the unemployment figures at 8:45 a.m. Paris time.

`Difficult Environment'

In Germany, Europe's largest economy and France's biggest trading partner, the number of jobseekers rose 8,000 last month to 4.1 million, the highest in three years. The jobless rate rose to 9.9 percent.

``It's a very difficult environment,'' said Martine Aubert, chief economist at Credit Commercial de France SA. ``Things will get worse before they get better.''

The jobless rate for the dozen countries sharing the euro climbed in June to a two-year high of 8.4 percent. In the U.S., the rate rose to 5.9 percent in June from 5.8 percent in May.

French Prime Minister Jean-Pierre Raffarin's government forecasts economic growth this year of 1.5 percent, the slowest since 1996.

Mouvement des Enterprises de France, or Medef, the largest business lobby group, predicts growth to be between 2 percent and 2.5 percent next year.

Medef this week urged ministers to decree an immediate increase in the overtime limit imposed by the previous Socialist- led government as part of the 35-hour workweek. The law restricts employee overtime to 130 hours a year.
___________
Depression levels coming?

Golden Bear
Blackjack (msg#: 84007)
Hey Blackjack,

that BBC article is the biggest load of propagandist bullcrap out there. There are squadrons and squadrons of fighters on US soil, one base only 10km from the White House... why weren't these planes scrambled, and instead planes from a base 200 Km away were?

14 planes protecting the USA?!? Australia which has one of the smallest armed forces in the world has more planes protecting it, give me a break.

www.whatreallyhappened.com and www.copvcia.com for some REAL answers...

Cheers.
Blackjack
Japan in "uncharted waters"/ sounds like a reef up ahead
http://news.bbc.co.uk/2/hi/business/2017886.stm"The Japan government's current and anticipated economic policies will be insufficient to prevent continued deterioration in Japan's domestic problems," Moody's said.

The levels of debt the government has run up, after years of attempting to kick-start economic revival through large infrastructure projects, meant it was testing new economic frontiers, Friday's report said.

"Japan's general government indebtedness... will approach levels unprecedented in the post-war era in the developed world, and that as such Japan will be entering 'uncharted territory'."
______________________

Sounds like something downright awful is about to happen
in Japan, but "it" never happens. Dollar weaker in Japan
this morning.
pinetree
vanguard.......
Concerning vanguard gold fund, does anybody on this forum have a good reason why the vanguard people closed fund 53(gold)? The fund held tough over the bad years...now that we see some light, vanguard pulls the plug. I find this very peculiar.........
Blackjack
Pinetree concerning Vanguard
The speculation is that since Vanguard have so many funds
invested in other areas, they did not want money to flow
out of those funds into Gold. If you have an account with
Vanguard you can transfer money between funds very easily.

Vanguard claims they did it because there were not enough
companies in the Gold area that could absorb the capital.

Its just an attempt to keep investors from moving to gold,
within the Vanguard Family of funds.

My opinion
Blackjack
Texas' state budget shortfall may hit a nightmarish $12 billion
http://www.chron.com/cs/CDA/story.hts/front/1554345AP
"I think if I'm looking at this with rose-colored glasses, then I'm not being fair to the people," says state Sen. Chris Harris. AUSTIN -- Texas' state budget shortfall may hit a nightmarish $12 billion by early next year, according to a key Republican lawmaker.

"I think we could very easily be looking at $12 billion," Sen. Chris Harris of Arlington told the Houston Chronicle.

Harris, vice chairman of the Senate Finance Committee and a member of the Legislative Budget Board, warned that candidates are doing a disservice to the public by denying the depth of the problem.

On Thursday, in the face of growing budget problems, Gov. Rick Perry repeated his position that the state can avoid new taxes.

Likewise, a spokesman for his Democratic rival, Tony Sanchez, maintained that taxes are off the table.
______________
Raise taxes, kill economy, don't raise taxes, drown in debt.
Sales tax revenue from auto sales will drop off soon.
If consumers slow spending, tax revenues will fall even faster.
Not a pretty picture.
Black Blade
Asian Central Banks Will Increase Gold reserves
http://asia.news.yahoo.com/020829/5/hr6z.html

Snippit:

Singapore, Aug. 29 (OsterDowJones) - Asian central banks will buy more gold as their economies expand post-Asian crisis and their foreign exchange reserves see a rapid buildup, an academic told OsterDowJones in an interview Wednesday. Asian central banks' gold holdings in absolute amount will increase even as Asian central banks maintain a fixed percentage of gold in reserves, said Tan Khee Giap, an associate professor with Singapore's Nanyang Technological University, or NTU. "Just the fact that the (reserve) base has gone up, even if they maintain the (gold) ratio, it would mean higher purchases of gold," Tan said. "Should there be a shift in policy to say increase (gold) reserves because of uncertainties (in financial markets), of course the potential demand will be even higher," Tan said.

Tan said he sees foreign exchange reserves of many of Asia's central banks to continue to build up quickly after the Asian crisis, and these countries will certainly buy more gold. "Other rich countries that will continue to buy gold include Malaysia, Thailand, South Korea, Singapore, Taiwan, China and India," Tan said, adding India's foreign exchange reserves, like China, are going up very fast.

China's foreign exchange reserves stood at $246.5 billion at the end of July, an increase of $34.3 billion since the beginning of the year, a government official said in remarks reported by the Xinhua news agency. According to figures from the International Monetary Fund's Web site, China's PBOC increased their gold holdings last December to 500.8 metric tons, up by 105 tons. "China has reached a critical mass in terms of economic development...we'll continue to see the reserves piling up...even to maintain a fixed percentage ratio...it means (PBOC's) gold holdings in absolute terms will increase," Tan said. Asian central banks are also warming up to the idea of keeping a higher percentage of gold as part of their reserves, especially after the Asian Crisis of 1997-98, Tan said.

There hasn't been a "concrete international financial architecture" set up to deal with future crisis, Tan said. "What that means is so long as there's financial markets volatility and uncertainty...and no measures to overcome (crisis), gold is always looked upon as a store of value, safe haven and a hedge against risk," Tan said. Tan said he sensed a keener interest in gold among Asian central bankers as reflected during a closed door seminar last week on reserve management and portfolio diversification. "Certainly, they are asking questions trying to understand and yes, there's a renewed interest to look at gold," Tan said. Asian central banks should have a firm policy on holding gold as part of their reserves, Tan said. "Central banks hold gold for unexpected contingencies," Tan said. "In certain countries like Cambodia, Vietnam and Laos....sometimes you may have to rethink about the role of gold because these are countries where the central banks don't have strong monetary discipline," Tan said.


Black Blade: It stands to reason that Asian Central Banks try to keep up with the rest of world as their economies expand into the 20th century. China has been a buyer of South African gold production (a few tons a year from Harmony Gold I believe). Whenever the Shanghai Gold Exchange opens we could see gold gain prominence in the Chinese Central Bank.

Black Blade
Japanese fears still Key for Gold
http://www.mips1.net/mggold.nsf/Current/4225685F0043D1B248256C2400373F05?OpenDocument
Snippit:

It is hardly surprising that bullion sales are picking up again. Exports, the only growth point in an otherwise woeful Japanese economy, are beginning to look vulnerable again as US consumer spending starts showing signs of drying up and gross domestic product growth falters. The US is the biggest market for Japanese goods. "Japan's recovery as a whole has petered out," Frank Packer, an economist at Nikko Salomon Smith Barney told Bloomberg News. "Exports will slow and the economy will revert back to contraction in the fourth and first quarters," he said. While the rising Japanese bullion demand should provide a solid underpin for the gold market, bullion's failure to react strongly to the never-ending stream bad news which continues to hammer equities is puzzling.


Black Blade: Asian buying continues to outpace last year's figures. Even if Indian demand were to be muted by drought earlier this year, the pick up in demand in other parts of Asia are likely to more than make up for any short fall. However, the deterioration of stock markets and weaker economies has prodded many other Asian investors (who normally do not purchase gold) to buy precious metals as insurance. And that is without going into how much gold may be purchased when the gold market is "liberalized" starting with the opening of the Shanghai Gold Exchange.

Black Blade
Breaking News - WTO Allows Sanctions Against U.S.

Just across the wire - The World Trade Organization (WTO) just gave the OK to European markets to impose $billions in economic sanctions against the United States. Apparently this is in response to the US steel tariffs imposed earlier this year.

Tit for tat.

- Black Blade
Black Blade
WTO grants EU $4 billion in sanctions against U.S.
http://biz.yahoo.com/ap/020830/wto_us_eu_tax_breaks_5.html

Snippit:

GENEVA (AP) -- The World Trade Organization on Friday ruled that the European Union can impose trade sanctions of up to $4 billion against the United States in a dispute over U.S. corporate tax law, trade sources said. The result is a big victory for the EU, which had requested that amount. The United States claimed the award should be less than $1 billion. The WTO considered the EU request after ruling last year that a system of tax breaks for companies from the United States was an illegal subsidy and so violated international trade rules.

Black Blade: That's interesting � sanctions because the US does not tax enough on exports. Maybe a few more tariffs will be levied. A possible trade war brewing? Hmmm�

misetich
Local housing costs drain family budgets-20% of tenants spend at least half income on rent
http://www.signonsandiego.com/news/business/20020827-9999_1n27housing.htmlSnip:

The rising cost of housing hits hardest at renters, who make up nearly half of the households in the county. While 13 percent of homeowners spent at least half their income on their mortgage payments in 2000, 20 percent of renters were using up 50 percent or more of their wages on housing.

Those numbers have remained relatively unchanged in the past 10 years, according to the census data.

Though there seem to be few neighborhoods immune from high housing costs, working-class households typically face the greatest challenges making ends meet in a region where the average monthly rent climbed from $643 in 1990 to $1,043 earlier this year.
*************
Misetich
Property taxes, utilities bills, higher mortgage payments(!)
Of course Sir Greenspan says - no housing bubble- yet ratio of income to mortgages payments is at all time high

Got gold?
Black Blade
Back-to-School Season Gets an "F"
http://www.businessweek.com:/print/bwdaily/dnflash/aug2002/nf20020830_0302.htm?_new
So far, shoppers aren't fueling the second-half rebound that retailers need -- and were counting on.

Snippit:

Perhaps you've seen the television commercial for Staples (SPLS) office-supply stores. A smiling father dances though the aisles, plunking pencils and notebooks in a shopping cart as he gleefully anticipates sending the brats back to school. His kids trail glumly behind him. The commercial's theme music: "It's the Most Wonderful Time of the Year." Alas, if only it were so for the nation's retailers. Just a few months ago, many merchants were predicting a robust second half for 2002. But based on early results from the back-to-school season, the next six months could be more of a slog than a waltz. Excluding cars and gasoline, retail sales slipped 0.2% in July. And weekly surveys show that early August receipts are flagging as well--down as much as 1.6% from July.

For retailers, a consumer pullback during the crucial back-to-school period could mean a very unmerry Christmas. Because stores order goods up to a year in advance, it's hard to switch gears if demand slows. In recent months, retailers have been rebuilding inventories based on earlier predictions of a robust second half. In fact, in July, store inventories, excluding cars, were up for the third month in a row -- something that hasn't happened since mid-2000. But if demand doesn't accelerate for apparel, personal computers, and compact disks, retailers may find themselves with overcrowded shelves during the holiday season. Much will depend on the American consumer. For two years, shoppers have largely kept the economy going. But the combination of rising oil prices, surging personal debt, and growing fears that this will be a jobless recovery could finally convince consumers that it's prudent to pull back.


Black Blade: As I have been pointing out for some time now. The rising unemployment, rising debt, etc. are taking a toll on the economy. The predictions of a second half recovery are wildly optimistic as I have been saying - but for the bug-eyed economists hope springs eternal. In short � Scratch one economic recovery. Game Over!

Tate
Re: Rate cuts said inflating real estate bubble
Black Blade.
Re: Rate cuts said inflating real estate bubble
Fed already lowered interest rates in attempt to save US banking system. Lower rates should have bring US dollar down, but due to a economy mess around the globe and weakening world currencies, taking dollar down was not effective.
Bringing rates up (mortgage rates are up today in Canada) will kill financial market and economy. Fed is boxed with no way out.
Real estate bubble was unavoidable. We have to ride it through. Was it much different in
80's and yearly 90's.
Waverider
Greenspan: Bubble Could Not Have Been Prevented
http://www.washingtonpost.com/wp-dyn/articles/A15722-2002Aug30.htmlSnippit:
"Federal Reserve Chairman Alan Greenspan said Friday that Fed policy-makers could not have deflated the stock market bubble that emerged in the late 1990s without raising interest rates to such high levels that it would have pushed the country into a severe recession. "The notion that a well-timed incremental tightening could have been calibrated to prevent the late 1990s bubble is almost surely an illusion," Greenspan said."

Waverider: Hmmm...just like we should believe the current recession is an illusion?
CoBra(too)
Bubbles ....
- True - Lady Waverider -at some stage bubbles can't be averted - particularily the stage of their rapid deflation.

Sir Magoo, or is Count Bat of the Maggot, who has made the unprecedented credit - mother of all - bubbles, against his stated wisdom, possible in his idea of an almighty cure of new and unprecedented - though imaginary and virtual productivity growth.

A mirage even the recently be-(k)nighted chairman of the FED has not really subscribed to. Though, what ever happened to have an economist of originally Ayn Rand's niche, to come forward and renege on all his beliefs as soon as he took on the (ir)-responsibilities of a political, though still private Central Bank - FED? - spewing out liquidity - through all pores and keeping up the pretense of a "strong resereve" currency, while bleeding the world and its consumer of last resort - Count Dracula, should have gotten the Nobel Price.

... As a comical afterthought - Austrian Banks are in an unbelievable uproar - as our Minister (sec.) of finance had the atrocity to emit directly a T-Bill to savers - yielding a 1/4 % more than any bank would pay - for any maturity ... Talking about squaring circles ... Ha ... cb2


USAGOLD / Centennial Precious Metals, Inc.
Real gold, real easy. Delivered to your door.
http://www.usagold.com/gold/coins/pre1933.html

GOLD

Gold Today!

Because you never know what tomorrow will bring.

CoBra(too)
Not sure if it works - ....
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW_F6hX7R3JlZW5zThough AG says FED Policy can't stop SM Bubbles - ...

Pretty sure Sir Allan didn't respond to my latest rant - he'd need another day as he's spent his repo for today - anyway ...

Not fo' u cb2 ...
sector
Record 22,910 homes actually available; July report understated mark by 56%
http://www.rockymountainnews.com/drmn/real_estate/article/0,1299,DRMN_414_1354844,00.html'For sale' signs not adding up

By John Rebchook, Rocky Mountain News
August 29, 2002

If you think there are a lot more homes for sale in your neighborhood than reported, you're probably right.

A record 22,910 unsold single-family homes and townhomes are on the market this month. A computer glitch discovered this week revealed a whopping 56 percent discrepancy from the 14,717 unsold homes reported in July.

Because the glut of unsold homes is so much greater than previously believed, it could force sellers to lower the asking price of their homes. Combined with some of the lowest mortgage rates in nearly 40 years, falling prices on a huge inventory of unsold homes could make this an ideal time to buy.

"It is, if you have a stable income," said Byron Koste, head of the University of Colorado Real Estate Center at the Leeds School of Business. "If you don't, you're playing Russian roulette."

In July, 20,005 unsold homes and townhomes were actually on the market, according to a calculation by a veteran real estate agent, Norm Waugh.

A computer glitch at Metrolist Inc. - a real estate information service group owned by the six local boards of Realtors - has been undercounting the number of unsold homes on the Denver-area market since June 2000.

The summer of 2000 is when Metrolist introduced a Web-based system called MyMLS.com, which allowed agents to list their houses on the Internet.

As the Internet became more common, more and more agents started using it, instead of the older, more cumbersome dial-up phone system. But computer software failed to make a "statistical calculation" that included the MyMLS.com figures in the unsold homes on the market, an official at Metrolist confirmed.

The number of unsold homes is far greater than at any other time in Denver history, even when thousands of foreclosed homes bloated the market in the late '80s and early '90s, said Jerry McGuire, an agent with RE/MAX Professionals, who along with son Steve uncovered the error this week.
++++++++++++++++++++++++++
The Federal Reserve and BES have some company in their shuffling shell game, bogus GDP restatements. It seems that the grass-roots world of real estate sales mopes have figured it out too! It was a computer glitch...yeah...right.

My, My, My! It's already worse than the 80's real estate glut in Denver.

Picture the ghost towns of the old west�or Cape Canaveral in the 70's, that's Denver in the near future.

TownCrier
Greenspan's comments -- always expect good, frank talk at Jackson, WY
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topfin&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APW_F6hX7R3JlZW5z(Thanks for the Bloomberg article, CoBra(too). Among the many reports available on this item, this is a particularly good one.)

Excerpt:
---
After studying history and their options, Fed officials opted not to try to manage stock prices. Greenspan said he told Congress in 1999 that central bankers would instead focus on policies ``to mitigate the fallout when it occurs and, hopefully, ease the transition to the next expansion.''
---

Bottom line translation: An inflation tour de force!

R.
sector
Oil Trading over $29
The buyers of crude are telling us something......about the ME instability.

Gold seems to be staying up as well.

Virtually ALL the stock pundits see a DOW slip next week.

Can the cabal force gold down too nexrt week?

The best "Entertainment" there is...

...IF one has small boxes periodically delivered to your door that seem, to the delivery person, to be...well... "Heavy for their size".
Operative
A Few Thoughts
Another interesting week nearly behind us all.
* Gold has fought bravely once again and going into the next few months with promise.
* Millions of pages of new documents will be brought to light as the court rules in regards to the Enron debacle. The dark secrets of the banksters/manipulators are beginning to be laid out for the world to see. My guess is hundreds will forego the pleasures of a long weekend in order to run the shredders non stop.
* August was a month many investors had seen enough and began pulling our of the stocks. September should see a follow up on this no vote of confidence.
* Greenspan begins damage control by pleading a mea culpa and attempting to steer history writers that "there was nothing I could do...." I think his speech today will be the opening chapter of his "retirement book deal".
* The dow struggles this afternoon to close above 8737 in order to avoid the stigma of 5 consecutive months of being down. Something that last happened 20 years ago in 1981. In any event, the great recovery touted by bubblevision is nowhere in sight.
* Commodities continue upward trends. (What inflation?)
I wanted to add to the supplies at the farm this week and filled a pick up truck at Sam's Wharehouse. Get ready folks for some sticker price shocks on groceries. Most of the basics were up 20% or better since I last did my topping off about 4 months ago.

A drive by of the old courthouse and seeing the "old timers" still sitting around discussing politics and the like reminded me to say Thank You to our host for providing a modern equivilant of the "town square". To the knights and ladies of this forum, let it be known each is appreciated and your thoughts used as springboards for my continuing education.

Assuming one lives to see 70 years, take 70 subtract your current age and mulitply by 52. Thats how many weekends you have left to make the most of, on that note I wish each of you a Golden Weekend. (Looking out my window I see some of the leaves are turning a golden yellow. Was a good summer. I think it shall be an even better fall season.)

Enjoy the long weekend!
sector
SEC gets tough with NYSE-listed foreign firms
Masashi Amano Yomiuri Shimbun CorrespondentWASHINGTON--The U.S. Securities and Exchange Commission's decision to require not only domestic corporations but also foreign firms listed on the U.S. stock exchange to submit written oaths on the authenticity of their accounting reports reflects its desire to show that the United States is firmly determined to prevent another case of book-keeping fraud.

By doing so, the SEC is seeking to bolster investor confidence in a market tainted by a series of accounting scandals.

European corporations, however, have reacted angrily to the U.S. move, saying that it would discourage foreign firms from listing themselves on the U.S. market, which they say would not serve U.S. interests. The Federation of German Industries, a leading business organization, sent a note of protest to the U.S. watchdog body.

However, the SEC has turned a deaf ear to such objections. Its latest decision also requires U.S. corporations to file their annual financial statements 60 days after the end of the financial year, rather than within the previous 90-day limit.

In addition, it requires U.S. corporate executives to report their transactions involving stocks issued by their firms two days after the trades are completed, rather than within the previous 40-day limit.

These measures reflect the SEC's determination to dispel market distrust in corporate accounting, by making it extremely difficult for corporate executives to falsify book-keeping records or sell stocks issued by their companies.

An SEC official said that if foreign companies are exempted from the requirements and no appropriate measures are taken to check questionable in-house share transactions by corporate officials, the stock market may suffer in the future.

In fact, when the initial round of company oaths were filed by the Aug. 14 deadline, the SEC came under criticism from market analysts for being too soft on foreign companies.

"The lack of confidence in the market still remains (if results certifications are restricted solely to U.S. firms)," an analyst said.

Some Japanese firms have recently begun to agree with the SEC's strict attitude, on the basis that if they continue to oppose the move, investigators may suspect the firms of operating outside the law.

The trend has encouraged commission officers to mandate the compliance of foreign firms with standards identical to those applied to U.S. firms, which are considered some of the strictest business regulation standards in the world.

===

Japanese compliance no problem


Japanese companies currently listed on the New York Stock Exchange will be pressed to comply with the new SEC rules if they wish to operate in the United States according to analysts.

Many company representatives agree with this view.

"We have always reported our financial statements justly and accurately. Following the new SEC decision is just something we would have to do in addition to what we have always been doing," a Sony official said.

"The SEC can inspect our annual report according to the new rules," an official of Nomura Holdings, Inc., said

While companies have shown readiness to comply, Japanese firms listed in New York had not yet been officially informed of the new requirement as of Wednesday.

As companies rush to gather information on details such as the deadline for submission of documents, there has been some confusion. One Honda official said: "We don't know when we have to submit the documents. We haven't yet been officially informed by the SEC."
+++++++++++++++++++++++++++++

Foreign companies getting peeved.
TownCrier
Fed Chairmain Greenspan's speech in its entirety
http://www.federalreserve.gov/boarddocs/speeches/2002/20020830/default.htm
...we indicated in congressional testimony in July 1999, "... productivity acceleration does not ensure that equity prices are not overextended. There can be little doubt that if the nation's productivity growth has stepped up, the level of profits and their future potential would be elevated. That prospect has supported higher stock prices. The danger is that in these circumstances, an unwarranted, perhaps euphoric, extension of recent developments can drive equity prices to levels that are unsupportable even if risks in the future become relatively small. Such straying above fundamentals could create problems for our economy when the inevitable adjustment occurs."

...The consequent reversal in stock prices that has occurred over the past couple of years has been particularly pronounced in the high-tech sectors of the economy. The investment boom in the late 1990s, initially spurred by significant advances in information technology, ultimately produced an overhang of installed capacity. Even though demand for a number of high-tech products was doubling or tripling annually, in many cases new supply was coming on even faster. ... Returns on the securities of high-tech firms ultimately collapsed, as did capital investment.

...The struggle to understand developments in the economy and financial markets since the mid-1990s has been particularly challenging for monetary policymakers. We were confronted with forces that none of us had personally experienced. Aside from the then recent experience of Japan, only history books and musty archives gave us clues to the appropriate stance for policy.

...we noted in the previously cited mid-1999 congressional testimony the need to focus on policies "to mitigate the fallout when it occurs and, hopefully, ease the transition to the next expansion."

---(see url for full speech)---

The "great lubricant" (or economic "balm") is always the creation and application of more and more money to the problem areas. Hence the need to gold as a meaningful wealth (purchasing power) preserver.

R.
pinetree
Blackjack...vanguard
Thanks Blackjack...Your opinion concerning vanguard's policy on fund 53(gold) has merit.
R Powell
Naughty traders
While the cat is away, the mice will play. And, in the last half hour of a shortened, last trading day of the week before a long, holiday weekend the floor traders played (or somebody did) pulling POG down about a dollar and POS down 6 cents.
I would guess that many had already closed their books and snuck out the side door or never returned after the morning coffee break. Anyway, now notice day for the Sept. contract has passed as has the end of the month account rearranging (window dressing). The light summer trading volume and summer vacations should all fade away shortly into memories. Next week is September, with kids back to school and financial markets hopefully back to full time work. Maybe September and October will tell us whether gold and silver are going to excite us this year or not. I hope we get better results than the Boston baseball team provided this summer. Strike or no, their season is about over.
Happy holiday weekend
Rich
R Powell
Sierra Madre
Are you really going to spend the whole $45 billion on gold? Mexico produces a great deal of silver and, I would suggest, that a small allocation of about $2 billion spent on silver might greatly increase the profitability of the Mexican silver industry. By the way, that $2 billion should buy all the presently available silver on the planet. All, that is, if you can entice Buffett into selling his Berkshire Hathaway stash. I've figured in a 10% rise in price as I believe it may be hard to buy it all without raising the price a little.
Two billion buys it all. What a deal!
Rich
Black Blade
Unhappy Campers On CNBC

The stock market indices were lower today to finish the month in negative territory. CNBC floor reporter Bob Pisani was visibly uptight as he announced that the DOW finished lower for the month as the DOW went negative for the fifth straight month. The DOW has not had five straight months of negative returns since 1981 when the US was caught up in a crushing recession. Today trading was voltile on extremely light trading as players left the casino early for a long weekend to reflect on their futures (that's Tuesday for these people). Pisani came back on the air to announce that trading volume was the second lightest of the year. It may be interesting that some large investment banks were largely absent today.

- Black Blade
Waverider
New figures add to Japan's economic gloom
http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1028186143084&p=1012571727313Snip:
"The Japanese economy contracted marginally in the first quarter, instead of growing strongly as originally claimed, extending Japan's worst post-war recession to four straight quarters, according to revised figures released on Friday.
Although growth resumed at 0.5 per cent in the second quarter, the rise was due almost entirely to exports, with capital spending, housing starts and government investment all down. "This shows a new depth of ugliness in the recession," said Richard Jerram, chief economist at ING, who said the figures "made the total dependence on exports very stark".

Waverider: Hmmm...a "new depth of ugliness in the recession" makes Gold all the more beautiful!
Blackjack
CRB Index is rocketing higher
http://quotes.ino.com/chart/?s=NYBOT_CRY0&v=d12The CRB Index is on a tear. This shows there MUST be some
inflation in the pipeline with regards to commodities.
A recent article indicated that South Korea is considering
interest rate hikes because inflation jumped due to crop
failures. Worldwide drought will put pressure on food prices.
War tensions keeping oil high despite weak demand.

A rising CRB Index should be a strong support for PMs.
sector
Oil Finished Pretty Much at $29
http://quotes.ino.com/chart/chart.cgi?s=NYMEX_CLV2&v=i&w=15&t=f&a=1Not the sort of thing that the Fed and Administration wants to see, especially after a week's worth of Saudi "We will take up the OPEC crude production slack" jawboning.

Moreover, the SPR is basically full and available to hammer the crude price...but the big boys didn't do it today. Therefore, they are satisfied with $29 oil, for today.

This suggests that they expect much higher oil in the ME war likely future that will THEN require SPR sales to "Manage" the oil price back down to $30-ish per bbl.

Perhaps this is also why pog is still at $313 too? The cabal knows that it has a mighty fight just to hold $313 so why try to get it back to $300. But more and more speculative sharks are swimming the golden waters these days.

At some juncture this Fall the cabal may finally come to the appalling realization that their numerous financial market rigs have become intractable...that further resistance to the forces of the free market is...futile.

At that seismic moment in American history, nothing that follows will resemble anything that came before.
Blackjack
Gold starting to shine in China?
http://library.northernlight.com/FC20020830240000042.html?cb=242&dx=1006≻=0#docSHANGHAI, Aug 30, 2002 (AsiaPort via COMTEX) -- Hing Fund Group, one of the biggest gold processing and sales enterprises in Hong Kong, announced its plan to enter into mainland market in Shanghai on August 26.

Chen Fazhu, chairman of Hing Fung Group told reporter, Hing Fung Group has sign cooperation agreement with Hualian Group, one of the biggest commercial group in China. It plans to open 100 gold and jewelry chain stores in China within 2 years and to open 300 subsidiaries in middle-small cities afterwards.

According to international experience, the reasonable gold store distribution should be one store for every 7000 persons.According to this, China's existing number of about 8000 goldstores is far from market need.

Chen Fazhu revealed, Hing Fung Group will focus on goldprocessing, wholesale, and retailing in China mainland, which isdifferent from its role in Hong Kong as a provider of raw material.
Sierra Madre
Sector: I think you are quite right about gold...
"The cabal knows that it has a mighty fight just to hold $313 so why try to get it back to $300. But more and more speculative sharks are swimming the golden waters these days."

Some months ago I pointed out that this war against gold is rather like trench warfare. The first trench to hold was $270; then the cabal had to fall back to $290. (Remember the Deutsche Bank dictum: "Gold will not rise above $290?") Then they were overrun and the gold forces were taking out $330, but, the cabal rallied and threw their whole weight (of gold) against the gold forces and beat them back, to a hair under $300 (briefly). Now we are back, and have taken the $313 trench again.

Funny thing is, I rather like this war because every time we are "beaten", we have a chance to pick up cheap gold! That's a pleasant war! I'd sure hate to be on the other side.

Important, IMO, is that THE MOOD HAS CHANGED. How many gold bugs are getting laughed at they days? I don't know of any polls, but I can sense we are getting a lot more respect these days. That spells the end for the gold cabal.

Do I recall a song: "Our day will come!"?

Sierra
R Powell
Sierra
Ruby and the Romantics
a nation of one
(No Subject)
One reason the investing public can be taken advantage of to the extent that they can is the low esteem in which knowledge of truth is held. A friend said recently that denial works wonders, and he knowingly uses denial to an abnormal extent and often in highly polished ways. But he fails to see that because of this his views of himself and of reality are not dependable, cannot be relied on, and make him unable to predict normally predictable future events. I see clearly how it throws him into trouble, but I can't tell him that; he has a repertory of a million denials and is a virtuoso in making use of them. Stock hucksters commonly expend more time and effort in being able to sell stocks than in being able to understand the dynamics of the world the way it is. These also thereby cultivate in themselves a habit consisting of reliably failing to know reality and to predict oncoming events. Truth has a place. And that place is in our daily lives, not relegated to a shelf only to be taken down for special purposes, but as a tool ever present in our minds and hands. There may be a great appeal in being able to swindle great sums from ignorant masses, but happiness has more to do with knowing what to want, than with getting what you want. For one thing, if more people in our society were to develop a taste for being able to know and understand what a particular truth is, as it relates to their personal interests, markets would function less erratically, more healthfully, and more predictably. Of course this would mean that bubbles would tend not to come into existence. And right now gold would be higher than it is.
darkhorse
@ a nation of one
what you're talking about is commonly referred to as knowledge and wisdom; either of these alone would make for prosperous times for the one, but both of them together (in the case of a person like your friend) would make for prosperous times for many, if shared! If either/both of these are neglected/ignored, the only thing to be expected is a very temporary personal gain, followed by a longer period of personal PAIN! Your friend should be seeking wise(r) counsel these days (my favorite best seller provides nothing less), but I wouldn't be surprised to find there's nothing more than hostile arrogance.
darkhorse
a serious shortage at hand...
I find myself mimicking Johnny No. 5 in the movie "Short Circuit"...I need INPUT! Serious, verified INPUT! I thirst for knowledge, but it seems the summer doldrums aren't limited to the financial markets. This is the wealth of today...without it, we're nothing more than fodder for those that have it!
a nation of one
(No Subject)
In wanting to find out what is true, a man comes to a useful reality; in subordinating his mind to fulfilling his desires, he loses sight of what is real. Most brokers are salesmen. Extremely few merely broker. If more were to do so, markets would be more reliably prosperous than they are. And a national economy based on such principle, if its enemies were prevented from disenabling it, would be healtheir and would be more likely to endure.

Manipulation plays a destructive role in markets. The intentions are perhaps well, but the outcomes are not.
TownCrier
"...can you not follow in the footsteps of giants?"
http://www.usagold.com/GoldTrail/archives/ANOTHER1.htmlIt's time you rediscover an old friend.
a nation of one
my rider
to darkhorseThis morning a friend of my neighbor asked me to give him a lift. Usually I would refuse. But this time I was game. There was an indefinite factor which threatened yet peaked my interest. We talked a bit. It turned out that he works for a mortgage bank. On the way to his home odd things happened. When we got there, an African American, who was carrying a pistol, was going to shoot him for stealing twenty dollars from him. Texas. I defused the situation, told him to give the guy twenty dollars, which he did, and I
left in peace. Won't give him a lift again. He had said that he knew some things about the state of the economy but didn't want to depress me. So I told him some. He stayed silent. The house next door to mine has been for sale for more than a month. Only two people have looked at it. In a fast-selling neighborhood. Not overpriced. No other houses for sale around here. There is no noise at night now. Until recently there was always plenty, even in the small hours of the morning during the week. On a nearby big street, there is light traffic after eight o'clock. Previously you could hear the cars drive by all night, packed and thick. Of five large malls I take my walks in, only two are not failing. One grocery store (of ten) close by is selling at extremely distressed prices. Unusually good prices are available at seven of the others. In Central Texas grocery prices in some cases are fifty percent below these. Normally the difference is only a few cents. I know a ninety two year old woman who tells me that she thinks something awful is going to happen. She has all her money in bonds and CDs. Sold her stocks in September of 2000. Got out at the peak. My broker doesn't have a clue to anything. Won't say anything negative unless it soothes his pocket. Everybody's feet are still dancing, but their mouths are closed. And their eyes dart here and there. They say nothing, but their fingers are gripping their wallets. Is this verified enough?
darkhorse
@ a nation of one
Grass roots information, I love it! This is EXACTLY the kind of info needed, but unable to find except places like here. I really don't give a rats hind end about most info reporters dig up; what you've related is invaluable because it's reality! Ladies and gentlemen of the round table, if you don't see that this is the kind of information needed (from EVERYbody in their own locales) more than that of the paid press, I'd be more than willing to provide the funds for the next contest! To me, what's happening to the "guy on the street" is 10 times better than the latest national news from whomever is the hottest reporter/site at the moment. Anybody with a difference of opinion?
a nation of one
to darkhorse
Gotta go to bed now. Joints are starting to creak.
silvester
@ Darkhorse

I'm with you Darkhorse. Let's hear some fresh news from the people. All these bank stories just running together.

Real stuff straight from the homelands. Thats what we need.
Black Blade
The Conjoined Twins of Real Estate
http://www.financialsense.com/editorials/paulos083002.htm

Housing Bubble?

Snippit:

One of the most ballyhooed statistics in real estate is the percentage of homeownership among the eligible population. It currently stands at a record 68% of adult US population. This same statistic proves that most of the demand for owned housing has now been satisfied. One cannot assume that all of the remaining 32% will ever purchase a home. Many people prefer the mobility of rental, and many others will never qualify. This leaves the smallest percentage of the population ever as potential new homebuyers. Economically, this means little latent (unsatisfied) demand left in the market, another negative for home prices. Many of the demographic trends that have supported rising real estate prices are in danger of reversing. If even just one or two of them reverse, prices may decline. Demographic trends are getting weaker as a source of housing demand and will reduce upward pressure on home prices.

The perception of low risk in real estate has been cultivated from decades of almost uninterrupted inflation in home prices. General declines in home values don't happen very often, but they have occurred. Many of the long-term demographic trends that have driven home prices are now starting to flatten out. Therefore, it would be difficult to imagine double-digit price gains continuing into the distant future. No matter how low interest rates go, home prices cannot outpace income gains forever. The best possible scenario for buyers, sellers, owners, and lenders alike would be a flattening out of the market and a return to home price inflation that about equals the general inflation rate. With inflation and interest rates at 40-year lows, this would be a difficult equilibrium to maintain. If the inflation rate goes negative (deflation), the highly leveraged real estate market could easily shift into reverse. If interest rates tick up, real estate will be negatively affected. A flat real estate market in this environment would be sitting on a knife-edge.

The consequences of even a modest decline in average home prices would be serious. So many industries are dependent on real estate (construction, landscaping, remodeling, furniture, lumber, appliances, municipal governments, etc.) that a slowdown might become self-reinforcing and cause a widespread economic decline. A general home price decline will almost certainly lead to higher foreclosure rates. Most people would work hard to keep their homes, even if the market price declined below the purchase price. But there are many highly indebted homeowners with little or no equity who could be forced to sell into a weak market. If the home sells for less that they owe, these people would be liable for thousands of dollars at the closing table. Few people would pay to sell their homes, the only alternative being foreclosure.


Black Blade: A very good article that presents several scenarios and the very likely possibility of a weakening real estate market. Given the declining economy, rising layoffs, record level consumer debt, weaker consumer confidence, weaker consumer spending, etc. it is no wonder that the real estate bubble is in danger of popping. With 2/3 of American adults as homeowners it would appear that the market for new home owners is very limited. In a word � "Grim".

Black Blade
Jobless on Labor Day
http://money.cnn.com/2002/08/30/news/labor/index.htm

The holiday honors American workers, who might prefer something more substantial -- like a job.

Snippit:

NEW YORK (CNN/Money) - America honors its workers with the annual Labor Day holiday Monday, but parades and picnics won't do much to ease the pain a recession has caused the labor force -- and the unions that started Labor Day likely won't help much, either. The most obvious problem facing the work force is stagnant job growth. Since March 2001, when a recession in the broader U.S. economy began, nearly 1.7 million jobs have been lost, and more than 3.5 million people are drawing unemployment benefits.

"The job market is going to get worse -- this is a jobless recovery," said Anthony Chan, chief economist at Banc One Investment Advisors, who said he expected the unemployment rate to climb to at least 6.1 percent this year. And the NAM agreed, saying its survey of manufacturers -- who cut the most jobs during the recession -- found most planned to continue to gradually lower payrolls this year, helping keep the total unemployment rate near 6 percent until 2003. With jobs scarce and corporate profits suffering from a broader economic downturn, not only are the aggressive employee recruitment tactics of the late 1990s long gone, more basic employee perks such as raises and bonuses are also under pressure.


Black Blade: Unfortunately this is too optimistic. I would expect job losses maybe somewhere between 8% to 12% next year and who knows after that. The "Bone Pile" continues to grow as the economy weakens and companies cut costs. Companies cut costs by firing nonessential workers. As always get out of debt (and stay out of debt), stash enough cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

Black Blade
Slow School Shopping
http://www.reuters.com/news_article.jhtml;jsessionid=NOQSQNTLUAFRMCRBAELCFEY?type=businessnews&StoryID=1393269

Snippit:

Most retailers who reported positive earnings in their latest quarter cited inventory controls that offset slower sales. The back-to-school shopping season has started off slowly, and one concern is that a weak fall quarter could foreshadow stagnant holiday shopping. "Back to school and holiday are slightly separate, because one effects a certain segment of the population and holiday shopping is more widespread," said Korn Ferry's Remick. "But it'll be a simpler holiday. People will continue to shop but will be more conservative about what they purchase."


Black Blade: Scratch one economic recovery. "Interesting Times" ahead.


Black Blade
Bye bye, bull - Gold funds regain their luster
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B7BEC3C65%2DD497%2D488D%2D9673%2DA43AE49C56BF%7D

Snippit:

"With gold still viewed to some degree as a safe harbor, and with rhetoric about U.S. and Iraq ratcheting still higher, it's no wonder gold has found support above $300," observed Erik Gebhard, an analyst at Altavest.com.

Black Blade: Precious metals are important enough as portfolio insurance that anyone who does not prepare and suffers terrible losses in the equities markets probably deserve it. Some learn by experience and the more intelligent of the specie learn vicariously and through reason and logic.

Blackjack
Americas love affair with stocks is Over
http://cbs.marketwatch.com/news/story.asp?guid=%7BA0A1D57C%2DF879%2D44E7%2DA69E%2DBCB089B0621E%7D&siteid=mktwThe Main Street crowd, largely disgusted with the stock market and everything that corporate America represents, is near a turning point. As Elliott Wave theorist Robert Prechter Jr. points out in his new book, "Conquer the Crash," the leanings and opinions of ordinary folks set the directions for the stock market, not the other way around as most of us were taught in Economics 101.

Those leanings (Wall Street calls this investor and consumer sentiment) are bordering on lethal. "Not only is the market a ticking time bomb, but so is the global economy," says Jeff Morgan, whose main credentials are an e-mail account, a brain and the eyes to see what others can't. "I'm constantly amazed at how many people are in denial. And we sure don't need to dance with Iraq anytime soon. I don't want a self-fulfilling prophecy, but people had better get their finances in order real soon because the bottom is going to fall out just like a big sink hole."

As we enter the autumn season, America's love affair with stocks shows signs of ending -- after more than 20 years. The light bulbs are starting to burn bright as folks switch off their online brokerage accounts and switch on their common sense. Stock investors -- the ones who have lost half their savings these past 30 months -- are probing Bankrate.com and other services for the safest money-market and cash alternatives.

Plain-vanilla savings bonds, and gold, are in the running for best-performing investment classes. The Commodity Research Bureau's (XX:1864498: news, chart, profile) tally of hard assets -- agricultural, metal and so on -- is at its highest point since June 2001. Organizers says precious metals and contrarian investment conferences set for the autumn season -- in New York, Denver and New Orleans -- are already at overflow.

For the most part, the folks streaming to these fresh investment waves are you and me: our spouses, our fathers-in-law, our house painters, maybe the owner of that dry-cleaning shop down the block. Or your medical doctor, whose self-managed retirement funds and hopeless mutual funds are on death's door.

"As of today," individual investor Bruce Allen tells me, "I am again long the gold market. I don't know if I'll turn another quick 45 percent profit, but with all of the screwy stuff going on in the markets, I'll take my chances with gold."
Black Blade
Drought Is Seen Pushing Up Power Prices
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020826/bs_nm/utilities_drought_dc_1
Snippit:

NEW YORK (Reuters) - A severe drought that has gripped the Southeastern United States for four years is cutting into profits at the region's electric utilities, and may force rate hikes in a region known for its cheap power, industry officials warned. Low water levels have forced utilities in the Carolinas to severely cut back use of hydroelectric facilities -- their cheapest source of power. Meanwhile, cooling water is running low at nuclear, coal, oil and gas-fired plants. "If things don't improve over the course of the winter, if you don't see some of these lakes and ponds and rivers refill, then next year you are looking at a serious situation," said Garrick Francis, spokesman for Progress Energy Inc. subsidiary CP&L.

Other Duke Power fossil fuel plants have had to trim power output because heated water emptying from cooling systems would raise the temperatures of depleted streams and lakes to levels harmful to fish and other aquatic life. "We need a couple years of above average rainfall."


Black Blade: Drought may contribute to an energy crisis. I have been talking to some industry professionals today and tonight about the natural gas situation as well. We in the west have been told that the problem lies in the natural gas "pipeline bottleneck". There is only one major pipeline for natural gas extending from the Powder River Basin. It now appears that there is a growing consensus that the low price for this Wyoming NG (80 cents/Mcf vs. $3.50/Mcf) is a function of no competition between competing pipeline companies. Many companies are simply shutting down drilling and production. This will add to the fast decline of NG supply going into the winter months. If the drought contributes to declining energy production and higher costs from other sources we are looking at another energy crisis like we experienced last year and then the economy will go into a death spiral. "Interesting Times"

BTW, the NOAA is predicting a colder winter this year on account of El Nino.

Black Blade
Harvest of Tears in Drought-Ravaged Canadian West
http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020823/wl_canada_nm/canada_food_crops_col_3

Snippit:

WINNIPEG, Manitoba (Reuters) - Canada confirmed Prairie farmers' worst fears on Friday in a report that slashed crop production forecasts after one of worst growing seasons since the dust bowl of the 1930s. "Many producers believe that the conditions were the driest ever experienced in the west," Statistics Canada said in its first production estimates of the new 2002-03 crop year. The report, coming from one of the world's top grain and oilseed exporters, was a testament to a horrific season. First, farmers were plagued with a late planting season, followed by severe drought, soaring temperatures, grasshoppers and, most recently, fears of early frosts. The punishing conditions are repeated across the border, with many U.S. farmers facing the same grim outlook. Drought-ravaged U.S. wheat fields are expected to produce the smallest crop in 30 years.


Black Blade: Grain prices are rising fast and ranchers are culling herds. This could stretch into next year as well. Better stock up on beer as barley prices are going up. One point that I keep stressing is to start a nonperishable food storage program, though I tend to think in terms of the growing "Bone Pile", preparing for dwindling food stockpiles is another reason to prepare.

turkey hunter
@ Black Blade Olduvai Gorge Theory
http://dieoff.com/page224.htmHi BlackBlade. I came across this Olduvai Gorge theory this morning. The jest of the theory says that the Industrial Revolution will end in 2030 for lack of energy. Does the theory have merit or just a bunch of enviromentalism? Thanks . Turkey Hunter
Black Blade
Re: turkey hunter
http://www.msnbc.com/news/nw-futureenergy_front.asp?cp1=1
I used to get mailers for GSA symposiums, however, I haven't heard from them for years. It is a nice theory but anything can happen. We may develop other energy sources. However, oil will always be available at a price. Those industries that cannot exist at higher prices will use other sources or substitutes will be found. That does not mean that even though other energy sources may be used, oil has critical by-products aside from energy such as plastics, sythetics, herbicides, pesticides, and numerous other petrochemicals. The argument over oil isn't whether we will run out, but rather how much we are willing to pay for extraction (lifting costs) and refining (variable depending on quality).

For more on energy and alternatives see the link above. There are several interesting articles on the future of energy though a lot of speculation. Also, a good book that addresses your question would be: "Geodestinies" by Youngquist. It has a good section on precious metals as well. I don't necessarily agree with all the authors conclusions but he states his case well. Cheers!

- Black Blade
sector
Muslims Told to Withdraw U.S. Assets
By THE ASSOCIATED PRESSFiled at 5:56 a.m. ET

BEIRUT, Lebanon (AP) -- Muslims everywhere should withdraw their money from U.S. markets because those funds may be frozen or confiscated, Lebanon's top Shiite Muslim cleric said in a sermon.

Grand Ayatollah Mohammed Hussein Fadlallah also warned worshippers gathered for Friday prayers in a Beirut suburb that a possible U.S. attack on Iraq was designed to assert America's control of oil in the Middle East and elsewhere.

Fadlallah's sermon came days after a lawyer for 700 relatives of Sept. 11 victims filed a $1 trillion lawsuit against the Saudi and Sudanese governments, as well as members of Saudi royal family, banks and charities. It contends that they financed the plot in which some 3,000 people died.

``We must change our mentality in the political, economic and security dealings with America, especially by withdrawing Arab and Islamic investments in America because new laws there have started to represent dangers of freezing and confiscating under decisions resulting from Sept. 11,'' Fadlallah said.

The Financial Times reported earlier this month that Saudi investors have withdrawn $200 billion from U.S. financial markets in recent weeks. The report was denied by Saudi billionaire investor Prince Alwaleed bin Talal, a nephew of Saudi King Fahd, who said that withdrawing such an amount from American markets would have caused a shockwave in the United States.

Fadlallah, 67, is a senior Shiite religious authority and a harsh critic of U.S. policies in the Middle East, a region where many Arabs view America as being biased toward Israel in its conflict with the Palestinians.

On Aug. 12, Fadlallah issued a Fatwa, or religious edict, banning Muslims from assisting the United States and its allies if they attack Iraq.
+++++++++++++++++++++++++++++++++++++++++++++++++

If Muslims discover a trustworthy [To them] alternative to US assets, THAT will become their favored weapon of choice in the coming ME war. Gold could easily be the vehicle.

Thinking about it, there are so many unintended consequences to this Iraqi adventure that predictions of a "Victory" by the Administration are foolish.

The post "Victory" phase in Iraq [IF it gets to that point] will be a nightmare of terrorist attacks on what will necessarily be a huge American occupation force. Moreover, the Al Qaeda forces here will be emboldened to carry out the worst of their plans.


Blackjack
Saudi repatriated cash moving to Real Estate
http://www.arabnews.com/Article.asp?ID=18212JEDDAH, 31 August � The real estate market in the Kingdom is likely to witness a big boom over the coming months as a result of repatriation of funds from the United States.

Real estate dealers in Jeddah have told Arab News that a number of major deals have already been signed in the city for sale of land for construction purposes.

Khaled Sultan, head of a real estate company in Jeddah, said the situation in the market was "extremely satisfactory" as a result of growing demand.
__________________
It would be great if the repatriated cash went into Gold.
I'm sure some of it will, but it looks like another RE bubble
coming Saudi style. Hard assets getting popular.
sector
Doug Nolan's Credit Bubble Bulletin - Greenspan Ripped to Shreds
http://64.29.208.119/archive_comm_article.asp?category=Credit+Bubble+Bulletin&content_idx=15012
[�
It is clear that Dr. Greenspan is adept at crafting reasoning that deflects responsibility from him and Fed policies for the great hardship that has and will be suffered by so many. More troubling, he is determined to espouse only more outlandish disinformation and erroneous/dangerous analysis. To blame "investor psychology" for the U.S. Bubble is ridiculous.

Greenspan has developed into the grand master of spin and instantaneous historical revisionism. This is a great disservice to the public interest and is unacceptable from the Chairman of the Federal Reserve. We have in the past invoked the fable of the "Emperor with No Clothes." Well, it is past time to admit that Greenspan is a man of intellectual nakedness. Can the economic community please cease with the mindless kowtowing and instead commence with an open debate of these critical issues? Today's speech leaves no doubt that Dr. Greenspan is more interested in protecting his reputation than the pursuing the knowledge and analysis necessary to help protect the public welfare. Must we wait for some type of collapse or crisis to begin the learning process? The "Emperor" should step aside. But, regrettably, it is more a case of Greenspan as economic dictator. It is time for an intellectual "uprising" to cast aside the failed thinking and obfuscation from the Greenspan era and usher in a new period of analytical rigor, open-minded impartiality, and intellectual integrity. In this regard, we have an incredibly exciting opportunity. There is much work to be done. ]
+++++++++++++++++++++++++
Doug Nolan at his best.

He reveals specific repo numbers that are mind numbing. There can no doubt that these repurchase agreements are the method of stock market manipulation.

Greenspan's character flaw centers on a revulsion of criticism and therefore hurculean powers of denial coupled with a manic effort to hide and spin mistakes. This piece by Nolan strikes at the core of the Master of the Universe's weaknesses and as such is a beautiful dissection.

Financial Armageddon is an obvious consequence of the Fed's policy bungling�this essay should remove any lingering uncertainty.

USAGOLD / Centennial Precious Metals, Inc.
Your onramp to the highways and byways of portfolio diversification
http://www.usagold.com/cpm/abcs.html

ABCs of Au by MK

The ABCs of Gold Investing

"If you are looking for thorough guidelines for making good decisions about private gold ownership, The ABCs of Gold Investing has all the answers." --Money World Magazine

Please Remember: It is your purchase from USAGOLD - Centennial Precious Metals that nourishes these pages.

4gold
HELP!
I would like to get the book "Gold Wars". Does anybody know where it can be purchased.
Belgian
@ USAGOLD / Deutsche Bank's Troyan horse ?
Did DB knew about the gold derivative portfolio when they finalised the take over deal ? Both answers yes or no might have triggered different or finally some similar deal with "all" parties involved in the derivative package.
Who knows ?
My only reflection is the following : The ECB, a Bundesbank-copy, is an undemocratic institution (Maastricht Treaty !)
Undemocratic in the sense of autocratic and quasi independant (elitist � la BIS). Herein may or may not lay a German secretive agreeement with US-Goldreseves ? The ECB at DB's help (rescue) ?
Resulting in, not-German Goldreserves sales, but only sales of Gold originating from the US ? Imagine what a shock it would be if DB would shake investor's confidence !?

Worse, if JPM/C and DB would be exposed to the Gold mis-management, and linked to US/Euroland's central banks ?
Whoeeeeee ! They both (US/EURO) cannot let this happen...?
Why is it that the Suisse CB, suddenly, stopped selling their one tonne a day through BIS ? Was this official (transparant) announcement made during the DB take over ?

Are we speculating or rightout paranoia about those central banker's (Gold) plays ? We will soon find out if and when a Frenchmen will replace Wim D. I'm betting on intellectual heavyweight Pascal Lamy (EU commissionar for trade)(odds are 14/1) ? But what if Welteke gets the job (odds are 6/1)?

This week, Wim Duisenberg (ECB) demanded more accuracy in Euroland's economic statistics ! The euro is producing some inflationary pressure and this must be countered with a better euro > dollar exchange rate as to compensate for higher POO (and get infla. mildered). Euro up means dollar down with upwards pressure on POG ! And indeed Sir Gresham : NOT ONE (uno !!!) SINGLE REACTION ON OIL FOR EURO ! A_MA_ZING ! This, when it is now, as clear as crystal, that the US will have to go it alone into its desert-oil, adventure, dispite allusions made on Churchill/Hitler or Chamberlain or other moral threats (pressure)!

When reading the French press (Le Figaro) whilst on holidays, the whole week, there was strong debate (positioning) on the Middle East and war. A growing anti-americanism is surfacing, openly. This will translate in a stronger struggle between euro and dollar plus a, coming closer, to the "silent" euro/oil/gold concept. IMVHO, it is the ECB that is managing POG with or without the doctor No's !? Gold is not a God forgotten, obscure, reserve asset that fluctuates to the dollar's exchange rate caprices...but it is THE RESERVE that LEADS the floating confetti market (exchange rates). BBIIIGGGGGG difference !

compwiz4u
4Gold: Book Stores
http://www.bestwebbuys.com/books/index.html4Gold,

Use the above link to go to bestwebbuys.com which will get the lowest price for any book including shipping among 23 on-line bookstores.

The site also compares prices for music, videos, electronics and bikes.

I think you will be impressed and find it really saves you money.
silvercollector
4gold
I just picked up 'Gold Wars' last week, ordered through an agent of INDIGO. (MK, not promoting simply answering the question).

I am half through the book, given the cost I am not yet impressed. Lip's theories have all been discussed at great length on this forum.

If you are relatively new to the gold discussion it will be a quick catch-up though.

silvercollector
Gandalf the White
SUGGESTION to ALL "Lurkers" !!!! <;-)
NOW is the time to make the decision to OBTAIN and register your "handle" and get your password, SO that you can be ready to POST on the USAGOLD Forum !!! In the NEAR future, you will be happy that you have done it now, as Contest Deadlines approach rapidly and The Forum Staff is sometimes unable to process all the late requests ! "COME ON IN NOW", all you "Lurkers". BIG things forthcoming soon.
<;-)
Black Blade
Reduced Profit Forecasts May Spur Losses: U.S. Stocks Outlook
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk,&s2=ad_right1_topfin&tp=ad_topright_topfin&refer=topsum&T=markets_bfgcgi_content99.ht&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APXDLlRXGUmVkdWNl
Snippit:

New York, Aug. 31 (Bloomberg) -- The ratio of U.S. companies cutting third-quarter profit forecasts to those raising estimates is the highest in a year, suggesting that stocks may extend losses that snapped a five-week winning streak. ``The market is nervous about earnings for the remainder of this year and, more importantly, next year,'' said Mike Kayes, chief investment officer at Eastover Capital Management, which oversees $220 million in Charlotte. ``Will we see an earnings acceleration? If not, the market is not going anywhere.'' About 2.2 companies have lowered expectations for every one that has raised them, according to Ken Perkins, an analyst at Thomson First Call. Some 373 companies have reduced third-quarter earnings forecasts, compared with 285 at the same point last quarter.

``The natural adjustment from good economy to good profits isn't happening,'' said Kevin Jones, who helps manage $1.9 billion at ICM Asset Management Inc. in Spokane, Washington. For earnings, ``I'd like to see the bar set a little lower.'' The Nasdaq Composite Index declined 4.8 percent to 1314.85 for the week. Intel Corp.'s chief executive officer, Craig Barrett, said demand for personal computers and the semiconductors used to run them may not rebound during the year-end holiday season. Barrett's comments hurt other computer-related shares, which posted the biggest loss among the S&P 500's industry groups.


Black Blade: Earnings and more importantly "earnings quality" have deteriorated and looks to deteriorate more going forward. Everything suggests a global economy in decline. Debt is at all time record levels and growing, consumer spending is slowing, consumer confidence is weak, the U.S. dollar is weakening, global economies are vying for the same shrinking global markets, companies are losing pricing power and are cutting costs by adding to the growing "Bone Pile". It is up to each person to look out for number one. No one else will.

sector
White House: No division in the ranks over Iraq [Except maybe for the Secretary of State]
http://www.cnn.com/2002/US/08/30/powell.iraq/index.htmlAugust 30, 2002 Posted: 11:08 PM EDT (0308 GMT)

Powell doesn't back invasion of Iraq without support of 'key allies'

A person close to Colin Powell tells CNN the secretary of state's view is the United States should not go it alone.

From Andrea Koppel
CNN State Department Correspondent

CRAWFORD, Texas (CNN) -- The White House Friday downplayed any suggestion that there is a split in President Bush's national security team over Iraq, despite opposing views coming from top members of the Cabinet.

U.S. officials tell CNN that U.S. Secretary of State Colin Powell and other members of the team met earlier this week at the White House and discussed regional strategies, including those for Iraq.

"The view of the administration is united and one in the same," Scott McClellan, White House deputy press secretary, told reporters Friday in Crawford, Texas. "We are singing from the same songbook."

However, a person close to Powell within the administration says Powell does not believe the United States should invade Iraq without the support of "key allies."

This person, who asked not to be identified but is intimately familiar with Powell's thinking, said Thursday that Powell opposes any action in which the United States would "go it alone ... as if it doesn't give a damn" what other nations think.
+++++++++++++++++++++
The lack of Iraqi war top-level consensus implies that some Administration officials have yet to let in on the real reason for the invasion.

Thus we can be sure that the "Reason" is too big and too important to distribute...just yet. This is hardly the sign of a smooth-running White House.

IF there is a war, the internal support will erode fast without some really BIG reason to invade and occupy a sovereign nation.

Black Blade
Comparing the bubble and the crash
http://www.cleveland.com/business/plaindealer/index.ssf?/xml/story.ssf/html_standard.xsl?/base/business/1030786432133680.xml

Snippit:

Jeffrey C. Thomas is obsessed with studying the bubble in stock values that formed in the late 1990s and burst in March 2000. The bubble's pop likely began what Thomas has identified as a "secular bear market." Such markets tend to occur once every 20 or 30 years and are marked by persistent falls in stock prices, as well as by a severe economic recession, Thomas said. The nation's last secular bear occurred from 1929 to 1946, said the president of Alpha Asset Management in Akron. It began with a speculative stock bubble that burst in 1929 with the "crash" of the market. The Great Depression followed.

Some American stock market practices today are eerily similar to those in 1929, Thomas said. Among them:

The idea that stocks earn better returns than other asset classes over the long-term is widely held. In 1925, Edgar Lawrence Smith wrote "Common Stocks as Long-term Investments," likely the seminal work for this idea in the previous cycle, Thomas said. And in 1998, finance professor Jeremy Siegel wrote "Stocks for the Long Run."

"Wonderful prosperity" marks the economy, along with some form of new technology. In the 1920s, it was the roll-out of electricity and the birth of radio. Automobiles also were increasing their presence. In the 1990s, it was the roll-out of fiber optic and wireless communication systems and devices, and the birth of the Internet, Thomas said.

In the late 1920s, "people were sitting around in coffee houses trading stocks for the first time," Thomas said. "That's analogous to people today quitting their jobs to become day traders."

In the 1920s, the Fed acted to stop gold - then the backing for major world currencies - from flowing out of England, Thomas said. In 1998, the Fed acted to ward off the financial flu that caused currency devaluations and stock market plunges in parts of Asia. Given all this, the best-case scenario is stock value growth of about 5 percent in each of the next several years, Thomas said. The worst case is a significant bear market and a severe recession.


Black Blade: Interesting though discussed here before, it is worth revisiting. Much of this is why I refer to today's events as the beginnings of the "New Great Depression".

Black Blade
Treasuries May Gain on Expected Weak Job Growth: Bond Outlook
http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20Financial%20News&s1=blk&tp=ad_topright_topfin&T=markets_bfgcgi_content99.ht&s2=ad_right1_topfin&bt=ad_position1_topfin∣dle=ad_frame2_topfin&s=APXDVYhXEVHJlYXN1
Snippit:

New York, Aug. 31 (Bloomberg) -- Treasuries may rise next week as investors anticipate a government report will show job growth was limited in August, heightening speculation the Federal Reserve will keep interest rates at a 41-year low until 2003. Stagnant jobs growth is ``an indication that the economy is not going as strong as we'd like to see,'' and may boost Treasuries, said Alan Day, who helps oversee $8 billion at Banknorth Investment Management Group in Burlington, Vermont. He said he has been buying government notes maturing in two to four years.


Black Blade: We will see higher unemployment over the next several months. As always, get out of debt (and stay out of debt), stash enough cash for several months expenses, get Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

slingshot
Gandalf the White
Msg# 84071Contest? Looking forward to it. Hope your doing well. Working long hours at the Mill. Next part of the story to post soon.
Slingshot-----------------------<>
Golden Bear
Excellent piece by Bill Fleckenstein - Greenspan gets trashed further...
http://moneycentral.msn.com/content/P28699.asp?special=msnSnippit:

"....Actually, the minority view of the Fed's incompetence may now be set to encompass Main Street at large. That is suggested by a recent piece in The Washington Post called "Give Greenspan's Fed Its Share of the Blame" by William Greider. Some of the excerpts are just spectacular, so I absolutely must share them.

By now, everyone should have enough background for the article to really hit home. Greider begins:

"With New Economy icons falling all around, the next one may be the Federal Reserve and
its hallowed chairman, Alan Greenspan. When anxieties subside and people examine what caused this debacle, they may grasp that the Fed's policies and proclamations are centrally implicated. Notwithstanding his opaque manner, Greenspan became a cheerleader for the financial-market optimism and implicitly ratified its excesses. The chairman failed to take the timely actions that would have instilled more caution in investors, believing as he does that markets can work things out on their own. Well, they have.

"This is exactly what you don't want from a Federal Reserve chairman. Central bankers are not supposed to be either optimistic or popular. They are supposed to be the national scold - - the economic regulators who worry constantly over what might go wrong and impose restraints before public opinion or the markets see any problem. In that sense, the Federal Reserve went off the rails in the bubbling 1990s. Though still celebrated for wise stewardship, the Fed failed its core function as the disinterested governor.

"How does Greenspan feel, for instance, about the mega-conglomerates in banking that he helped midwife, now that Citigroup (C, news, msgs) and J.P. Morgan Chase (JPM, news, msgs) are in the crosshairs of criminal investigations? The Fed chairman personally approved Citigroup's creation even before Congress made it legal by repealing the Glass-Steagall Act. He approved the 'firewalls' that were supposed to prevent the kind of scandalous conflicts of interest recently revealed. And did the Fed's own bank examiners not notice the funny-money lending to Enron?"

Finally, here is Greider's conclusion:

"But Greenspan's second great error was joining the celebration himself. He suggested that
rising productivity had opened a glorious new era of ever-upward prosperity. His ebullient remarks sounded very similar to the self-congratulations expressed by the Federal Reserve in the late 1920s. Then and now, the Fed's happy talk excited stock-market plungers, large and small. . . . The point is, the nation pays a terrible price for allowing this cloistered governing institution to evade serious public scrutiny and tougher questioning. Financial markets always matter, but finance is supposed to serve the real economy, not the other way around. Until the Fed's distorted priorities are corrected, the U.S. economy will continue to experience deep troubles."...."
--------------------------------------------------------

GB: Wall Street pimps and whores shuffling the chairs on the deck of the titanic, and telling the band to keep playing music...
kasperjack
Freeport employed teachers shot up badly

Freeport-McMoRan Copper & Gold Inc. Makes
Statement On Shooting Incident in Papua
Saturday August 31, 5:56 pm ET

NEW ORLEANS--(BUSINESS WIRE)--Aug. 31, 2002--A shooting incident on a
remote section of a mountain road near the PT Freeport Indonesia mining facility
in the Indonesian province of Papua has left three people dead and ten others
injured.

At approximately 1:00pm on Saturday, August 31, unidentified assailants opened
fire on several vehicles transporting international schoolteachers and some
members of their families along the road between highlands and lowlands
communities. Two American teachers and an Indonesian national were killed. Ten
others, including eight expatriates and two Indonesian nationals, were injured.
The wounded individuals were airlifted to medical facilities in Australia and Jakarta
for treatment.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX - News) and PT Freeport
Indonesia deplore this senseless act of violence and express sincere
condolences to the family and friends of the victims. The schoolteachers were
employees of International School Systems. Several employees of KPI, an
Indonesian logistics contractor, were among the injured. Both companies are
contractors to the PT Freeport Indonesia mining operations in Papua.
_______________________________
Two point six million ounces of gold production is on the line.
Golden Bear
Greenspan the Evil Genie... Sean Corrigan spins a nice yarn.
http://www.lewrockwell.com/corrigan/corrigan15.htmlSnippit:

"...In this telling, as you are digging around under the thorn tree, you unearth a stoppered bottle, buried in the damp sand. Taking out the cork, you are amazed that a great cloud of smoke billows out and, before your unbelieving eyes, a turbaned figure materializes in the reek.

�Ah, Effendi, you have released me from the prison of a thousand years, whence I was confined by a White Magus from the land of Pannonia! I shall satisfy the most urgent of your desires, in gratitude for my much belated liberation.�

Setting aside your astonishment (though half believing this is a delirium brought on by the heat), you tell the Genie you want water � copious, nay, inexhaustible, amounts of fresh, cold water.

�So small a request for so great a service,� observes the Genie, chuckling. �It shall be as you say. Only show the Spirits of the Place that you desire water and they will furnish you with your Heart's Desire, for, O foolish Mortal, it has only been your own parsimony which has left you in dearth, rather than summoning forth the gratification of your wants by their very expression!�

Who are you to argue with a genie?

You do as he commands and you immediately guzzle the last few pints of your water reserve and hold out the containers in the expectation they will be magically refilled.

But, alas! You have sealed your doom, for this is no benevolent spirit which you have freed, but an Evil Djinn � a demiurge � who was bottled up by the wise old Austrian seer for the very good reason that it was his malice to lead trusting Men to ruin with his nostrums � and so there is no miracle to be had, whereby your waterskins are miraculously replenished.

�Foolish Man,� the Djinn cackles as he dissolves into the desert breeze once more. �To think that plenty arises spontaneously to repair waste and to gratify desire! How na�ve you Humans, truly are!�
---------------------------------------------------

GB: Too bad we didn't keep him bottled...
Waverider
Siege Engine
Gold > $300.00As the Knights rested, Sir Gandalf and Shadowfox journeyed into The Valley of the Clouds. Lady Waverider had a preliminary plan which she hoped the council would consider. She reviewed it again in her mind, examining it from every possible angle for a weakness, but could find none. And, yes...still the military strategy had to be determined. She was eager to communicate the plan with Sir Gandalf, and decided she would attempt to expedite transmission via Sir Gandalf's extraordinary powers of telepathy. Even in The Valley of Clouds Sir Gandalf could decipher her thoughts provided she focused and concentrated...she began...Sir Gandalf...the plan...see 8/18/02 # 83231..she focused...concentrated...yes...finally she knew in her spirit that Sir Gandalf had received the plan and now she would peacefully wait for his return, and for the Council's decision. Meanwhile, Sir Slingshot and the Knights continued with their military strategy...
steady
black blade question
black blade regarding the cash stash for a few months. I think a lil twist on that may be needed. there is concern , although it is small right now, about the new colored money that is in the pipeline will be issued to devalue the federal reserve notes, so why not have two hordes of gold. one that u dont want to tap into . and one that you can tap into and sell if and when the time is neccasary so lets say u have 6 months of cash why not put 1/3 of it into gold to avoid the problems that may arrise when they issue the new paper money. Im leaning towartds doing that myself> i need some feed back, what do u posters here think?

pl
Sierra Madre
Sector: it seems to me your are stretching your imagination too much
You say:"Thus we can be sure that the "Reason" is too big and too important to distribute...just yet. This is hardly the sign of a smooth-running White House."

You mean to say that Secretary of State Colin Powell does not know all the facts? That's a bit much, Sector! Not only much, but totally implausible!

Then you say: "IF there is a war, the internal support will erode fast without some really BIG reason to invade and occupy a sovereign nation."

If there is a war, once it gets started, there will be little looking back, and TPTB can always say, "We were under a TERRIBLE THREAT, Saddam was minutes away from releasing his WMD, we had absolutely no alternative." Who will be able to deny the story? And who will want to? What will be gained at that point?

If the war obtains the erasure of Saddam Hussein, with or without the evaporation of Iraq, and victory is obtained, who will care?

If the war goes badly, there will be so much savage hatred in the air, who will want to inquire whether it was all necessary? If the war goes badly, conditions may be very nasty, and the U.S. populace will only want to get the job over with, bar nothing.

Bottom line: if there is a war, Bush will have 100% support of the population.

JMO

Sierra
darkhorse
@Sierra
You stated:

"Bottom line: if there is a war, Bush will have 100% support of the population."

I don't lean much to sector's side, but I disagree with your position also (not that anybody designated me as a referee). There's a bunch of people that don't understand why we would attack Iraq, and even those that do don't like it. The mess we're most likely going to be stepping into in the next couple months is at least an order of magnitude worse than what GW's dad got us into in Somalia. That wasn't about disarming any warlords, it was the UN forces learning how to work with each other for future, more intense actions...wait and watch for coming attractions of it's sequel here !
Gandalf the White
Siege Engine
Gold STILL above US$300. !!Waverider (08/31/02; 20:17:27MT - usagold.com msg#: 84080)
Siege Engine (continued)
===
Gandalf, deep in The Valley of Clouds, awoke with a start!
He looked about in the dim glow of the dying campfire and saw only the forms of his loyal steed Shadowfax, and the soundly sleeping traveler Bonfir. Then he realized why he had awakened ! He had a migraine headache !! What was it that he had been dreaming about ? Oh yes, something about ANOTHER great military strategist named Sun Tzu, watching a "Dance of the Vails" OR, was I dreaming ?, thinks Gandalf to himself. NAW, it must be ALL these Clouds ! "I will think about this after my forthcoming meeting", he mutters to himself as falls back to sleep ......
<;-)
Black Blade
Re: steady � Cash Stash

The reason for keeping a stash of cash, whether in a checking, money market, or debit account is to meet normal expenses. Say for example you are laid off, then a supply of ready cash would be useful while seeking other work or source of income. Constantly dipping into another supply of precious metals may be a bit cumbersome for meeting what are likely to be fixed expenses. A supply of precious metals should be held through thick and thin as the ultimate financial insurance. This is just a common sense approach to hedge against bad times and part of a comprehensive program designed for safety. The same goes for the food and basic goods storage part of this plan. The consistent accumulation of precious metals are for protection against the overall economic, banking and currency collapse (and also possibly for value appreciation in a weakened economy). Staying out of debt is just common sense no matter what the prevailing economic conditions. At the very least try to limit your liabilities as far as debt is concerned.

Following a good game plan geared toward safety will set you apart from those who will suffer when the economy hits bottom (note Argentina, Uruguay, Paraguay, and Brazil as the most recent examples). Once you are set up with a good strong safety net, then you might wish to play the paper investment games or other investment alternatives. I have been on the "Bone Pile" for a time now, but then I am not concerned either as I have plenty of cash, food and other items, positive cash flow from investments, and most important � no debt. I know others who are out of work who are very concerned about the future and others who if they were to become unemployed would be in extreme financial difficulty. The secret is to never live beyond your means and develop basic survival skills, Anyway that is my take. Cheers!

- Black Blade
4gold
Thanks
compwiz4u and silvercollector
Black Blade
Re: steady

One more thing - I am not too concerned about colored currency as such. I also have put aside a lot of cash in coin in paper rolls as well. No need to be concerned about ink colors here. Every time I get coins change it just adds up and after a few years I had a few thousand dollars accumulated. So this along with my checking, savings, and money market accounts I have a ready cash stash. As far as precious metals, a good slow and steady accumulation over time can yield a nice "insurance" package. But PMs are just that - "insurance", or as even Alan Greenspan has said the "ultimate currency".

- Black Blade
steady
thanks
blackblade i have no debt, have a cash flow and started my non perishable food program. for fear i keep my cash stashed not even in the bank, why should i let them make money off me? and untill they get intrest rates above 1% whats the point anyway.
keep up the good work thanks for repsonding . once in a while let some of those fish go as u need a breeding population to sustain you !
Black Blade
Re: steady

Your welcome. It sounds like you got a good start. Using a "bank" is a matter of convenience, though I actually use a local credit union and never use a bank (yeah, there actually is a difference). My money market accounts are actually cash parked in short term US bonds. Other than that, there's nothing like the freedom of having no debt, though I have banks, credit card companies, brokers, finance companies, etc. constantly trying to barrage me with mailers, phone calls, etc.

I always get a kick out of haggling with a car salesman for example (or any salesman), settle on a price, then paying cash or check. They don't get the kick back from a finance company and I don't buy their "special" options and warranty's either. It is actually quite funny as you see they are a bit ticked off knowing that you could've paid more and you just ate into their commision. Hell, I even haggle at stores for goods (usually the managers) and various other places. I tend to get some very good deals. Most people don't know it, but store managers (and some sales people) do have room to cut prices. I probably shave a couple of thousand a year off my purchases. It has become a sport.

As far as the fishing, today was good. However, tomorrow is the start of elk season so no beer tonight, just a quick trout and rice dinner with a cup or two of mate.

Cheers!

- Black Blade
Waverider
Sir Gandalf
Touche! My turn to laugh for 10 minutes...a migraine?? Must've been the transmission - yes? And Gandalf....just how DID you know that the dance is called Dance of the Veils???? Now this IS getting EERIE!!!
Waverider
Black Blade
OPEC Majority Said to Oppose Quota Boost
http://biz.yahoo.com/rb/020831/energy_venezuela_opec_1.html

Snippit:

CARACAS, Venezuela (Reuters) - Venezuelan President Hugo Chavez said Saturday his country firmly opposed increasing OPEC oil output quotas, and he added the majority of the oil cartel's other members shared this view. Oil traders have been receiving mixed signals about whether the Organization of Oil Exporting Countries will increase production at its Sept. 19 meeting in Osaka, Japan. "The information that I have up to now is that the majority of (OPEC members) agree to maintain current production levels, including Saudi Arabia," Chavez told foreign reporters at a news conference. "That is the opinion of the majority and our own opinion on the matter is very firm," he said, speaking before flying out of Caracas to attend the Earth Summit in Johannesburg.


Black Blade: There was some confusion as some Saudi reps had indicated that they would increase oil production when the US attacked Iraq. Now oil prices appear to be touching $30/bbl again.

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