USAGOLD Discussion

Gandalf the White

(06/02/2003; 13:59:38 MDT - Msg ID: 103963)

TA TA TAAAAAAAAAAA --- We have ESSAY CONTEST WINNERS !!!

This is a LONG POST !! and shall also be posted in the "HALL of FAME"The Essay Contest TOP PRIZE WINNER of the Dutch King Willem 10 Guilder GOLD coin is Sir John the Jute !!!

And the Two Essays selected as "Honorable Mention" WINNERS which will each be awarded a SILVER one-ounce Canadian Maple Leaf are: Sir Sundeck and Sir Goldendome !!

Will the three prize WINNERS, Please provide Marie your REAL name and snailmail address for posting the PRIZES. She can be reached at marie@usagold.com

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ALSO -- Two Essays were granted "Mention" recognition status as they were very close to prize winners. These Two Essays are by: Sir Boilermaker and The Hopple !!

CONGRATULATIONS to ALL the ESSAY CONTEST WINNERS !
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These COMPLETE Essays are setforth below:
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John the Jute (5/30/03; 10:42:24MT - usagold.com msg#: 103801)
$$$$ ESSAY CONTEST ENTRY $$$$
What do you think will be the price of gold by traditional summers-end -- Labor Day, midnight, September 1, 2003? And why?

"And what, pray, is so fascinating about the price of gold?"

I came back from my day-dreaming with a start. "I beg your pardon, Holmes?" I said.

"Well, Watson, you stopped reading those papers in front of you some while ago, and have been in a reverie since then, thinking about the price of gold. I was just wondering why?"

"But how on Earth could you have known what I was thinking?"

"You know my methods, Watson. Apply them."

"But how? I can't imagine what you can have noticed. It's not as though I had taken a sovereign out of my pocket and was studying it."

"I didn't 'notice' anything: I observed. When you first lowered the papers to your lap, you gazed at the photograph on the wall which you took when you lived in Australia in your youth."

"So I did."

"And then you transferred your gaze to that stain on your hand which has resulted from your use of the wet collodion process for printing your photographs. You were thinking either of photography or of something from your days in 'Oz', as I think they call it."

"Please don't call Australia 'Oz', Holmes. Oz is quite a different story."

"No matter. The next subject of your gaze was the teapot. What, I asked myself, does a teapot have in common with the wet collodion process? The answer is obvious: silver.

"But the mines you knew in Australia were the gold mines of Ballarat in Victoria. Was the teapot just a tangent into precious metals in general? I watched carefully, and observed you feeling with your tongue at that large gold filling you have recently had in a tooth. And then you shook your head in just the same way as you did when you lamented the cost of that filling. Ergo, the price of gold."

"Wonderful," I said.

"Elementary," Holmes replied. "What is in those papers that started your chain of day-dreaming?"

"These are really very strange. Mr. H G Wells says that they came back to him in his Time Machine from 108 years in the future. They come from something called the "Inter Net" and relate to a contest in which people attempt to predict the future price of gold."

"And is this 'Inter Net' a sort of cloth netting used in place of a shroud, to wrap corpses before they are interred?"

"I'm not sure, Holmes. Wells is not at all clear."

"Hmmm. I suspect Wells's fertile imagination rather than a real example of time travel. But the problem is interesting enough. From the very nature of the question, I presume that the gold standard has not lasted until this year 2003."

"Clearly not. Which seems strange to me. The gold standard seems to be spreading all over the World. Even India, that bastion of silver coinage, adopted a gold standard two years ago. The United States is the only great power still using both silver and gold standards."

"Quite so. And unless Mr. William Jennings Bryan has his way, they too will adopt a gold standard soon. But a major war could blow that asunder. At least, it could if John Keynes is right."

"I'm sorry, Holmes. Who is John Keynes?"

"John Keynes is a schoolboy. A quite astonishingly precocious schoolboy."

"I see," I said chuckling. "Well, have a look at these letters from the Inter Net and see what you make of it all."

"Why not? I'll just light a pipe before I read."

"Ah, that's another thing. Wells tells me that in this future time, people are not allowed to smoke in public."

"Ridiculous! You'll be telling me that they have banned cocaine next."

I forbore from entering into that issue, one of our few major disagreements, and watched while Holmes scanned the Inter Net letters at great speed.

At last, he put his pipe down, and looked at me. "A strange world, this 2003. There would seem to be two major factors that will affect the price of gold that summer. One is War and the other is Politics. Supply is stable and well-known, so that won't have an impact in such a short time. And the Economies of the great powers appear to be in a mess, so the gold price is rising steadily as that mess becomes more and more apparent. But War and Politics could change everything in a period of three months.

"War in country A is bad for the economy of country A but can be good for the economy of country B. Take the United States for instance, since so many of the letters come from people living there. The War Between the States -- or whatever we are now supposed to call it -- was disastrous for the economy, particularly of the Confederacy. But the perennial squabbles in the Balkans have done wonders for the sale of Mr. Winchester's rifles."

"Oh, Holmes!" I cried. "That's far too hard-hearted a way of looking at things! The real disaster of the War Between the States was the death of so many brave young men."

"I am sorry, Watson," he replied. "I should have said that better. Yes, indeed, the human cost is the greatest cost. But we cannot ignore the economic results. Particularly when there are people who exploit them.

"During a war, the antagonists spend freely on the materials of war and, after the war, they spend as much as they have left on the materials of reconstruction. A country whose industries are undamaged -- and particularly a country like the United States, which is geared to responding to needs in the marketplace -- will benefit from that. And I'm not thinking of war profiteering. Quite ordinary industries, making weighing scales, or gas mantles, or telegraph machines, will receive a boost to their sales -- a boost which will trickle down to the rest of the economy.

"If the economies of the great powers benefit from such reconstruction in the summer of 2003, then the pressure on the gold price will ease.

"And there is also the effect of Politics. Elected politicians, such as the President of the United States, and our own Prime Minister, want their voters to feel that the economy is doing well. Partly of course, they want the economy to be doing well in actual fact -- that's why they went into politics -- but little more than a twelvemonth before a US presidential election, there will be a focus on the perception as well. Which again will ease the pressure on the gold price."

"So what do you think the gold price will be in September 2003?"

"It isn't so much a price as a probability distribution."

"What does that mean?"

"It means that the price of gold will be between 70 and 90 pounds. If you must have a single number, then let it be 80 pounds."

"The contest requires a value in US dollars. What rate should I use for the conversion?"

"The traditional one, as first calculated by Sir Isaac Newton, of one dollar to four shillings and sixpence ha'penny."

"Hmmm. A pound is 240 pence; four shillings and sixpence ha'penny is 54.5 pence. So eighty pounds is (19200 divided by 54.5) dollars."

I scribbled on a scrap of paper for a minute or so, wishing that someone would invent a pocket machine for long division.

"$352.30. That's a rather bearish view."

"Perhaps it is. Maybe I am giving more credence to market manipulation than to market forces. But my experience of crime leads me that way."

"Is this what you meant when you spoke of those who exploit the economic results of war?"

"It is indeed. Some of the greatest criminals in London, far worse than the late Professor Moriarty, are those who not only exploit war but even foster war so that they can exploit it. And these criminals are all too often welcomed into our highest society because of their wealth. But we mustn't get dragged into depression by Wells's little game."

"So you doubt whether the papers are genuine?"

"The nature of the prizes is significant, I think. One is a 10 guilder coin from the present Dutch Queen, Wilhelmina, and the other is a 10 guilder coin from the late King Willem III. Why should a contest in the early 21st century use money from the late 19th century? Have they no reliable money of their own?"
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SECOND PLACE WINNER of the SILVER !

Sundeck (5/29/03; 05:57:52MT - usagold.com msg#: 103715)
$$$$$$$ Essay Contest Entry $$$$$$$
What price Gold on September 1, 2003 and why? That is the question?

Technical Approach
------------------

From a simple technical standpoint, one can apply (at least) two approaches:

1. Extrapolate the primary up-trend in POG that has endured for the last two years. This yields a value of $374 plus or minus about $30 on 1 Sept. 03.

2. Extrapolate the primary down-trend in the USDX and convert to POG using the line-of-best-fit derived from the strong inverse correlation over the last few years between POG and the USDX. Using an extrapolated value of USDX = 90 on 1 Sept. 03 and evaluating the equation,

POG = - 4.35 USDX + 782

yields POG = $390.50. The uncertainty in this result is about plus or minus $40.

Halving the difference in these two results yields a POG around $382 plus or minus about $35.

How much faith can one put in this result? That boils down to how much faith one can put into the durability of the primary trends in the POG and the USDX.

Let's look first at the "scree slope" of the USDX. " �Scree slope� you say? Isn't a scree slope the gradient of the accumulated loose rocks at the base of an eroding mesa?" Yes it is, and it has a characteristic slope that is a function of the force of gravity and the physical properties of the loose rocks and other materials involved; as well as other factors, like whether its base is being eaten away on one side by a river, or is periodically shaken by earth-quakes. Pretty complex, heh? Sure, but a well-defined and enduring slope results nonetheless! The principal "emergent property" from piling up rocks and sand. Fascinating! So it is with the US dollar. It is too high and it is eroding� and the forces and properties at play are like those in a scree slope. They are impossible to measure or predict individually, but a stunning property emerges - a characteristic down-trend in the USDX, that persists for as long as the basic ingredients stay the same. I am assuming that the basic ingredients stay the same until September 1. I am reassured because major "scree slopes" in the USDX over the past 30 years have persisted for several years and this one has only been going for a year-and-a-half and looks like being a beauty!

How about the up-trend in the POG? Pretty much the same deal. Unless there is a major seismic shift between now and September we can expect the trend to continue. But you never know and it is impossible to predict.

Fundamental Approach
--------------------

Much more complex � akin to measuring the shapes, as well as the physical properties, of all the rocks, stones and grains of sand in the scree slope and also knowing when the river at the base is going to flood, and how high and how fast the water will go; as well as the timing and magnitude of the earth-quakes, and the interplay between the S and P components, and a whole lot more ... you can see why many people prefer technical analysis! But let's have a go anyway.

What does one regard as "fundamental" in pricing gold? Well, since it is priced in $US, I suppose the "value" of the $US is fundamental. Now the value of the $US is declining in giant steps. The rate of descent might be slowed, but not substantially reversed � unless the EU enters the market as a major buyer. Likely? I think not. The decline in the dollar is probably pretty well locked in. It might be moderated a little by the EU and other countries lowering interest rates before September, but that is likely to be offset by another cut in US rates. Hence the slide is on for quite a while. The US rate cut will probably be 50 basis points and that will encourage another round of house refinancings and ensure that the big bond bull is kept alive for at least the next three months. Some money may even flow back into shares, but the historical sequence of equity market corrections augurs strongly for a major sell-off before September. Also, while a rate cut will encourage US nationals to stay in the housing and bond markets, it will have the opposite effect on international traders who are already seeing their profits from bonds turn strongly negative from low interest rates and foreign exchange losses. Their interest in the housing sector may remain, but they would be concerned about its teetering top-heaviness and liquidity concerns should it fail. So ... the prognosis for the dollar is down at the same rate to a level of about 90 for the USDX. That's about a 5% drop from here and equates to a 5% increase in price for gold, or about $18. this would put gold at about $382 come Labor Day. (Well, look at that � the same answer as the TA provided!)

But wait! We haven't mentioned other "fundamentals", like supply and demand.

Take supply first, and that is relatively easy (I think). New mine production will go on much the same and there probably will not be any dramatic change in the current trends by miners to reduce forward sales and close out some of their hedged positions. The Washington Agreement is still in effect. Activity outside that accord will probably continue to see net acquisition, rather than net disbursement of gold reserves. No surprises there. The US position on gold is as unclear as ever, but the bias will continue to be away from leasing and more towards covering exposed positions. Recycling of scrap will probably go on as normal.

Demand? Well, that is where the uncertainty lies. Few would deny that gold as an investment and preserve of wealth has received increasing publicity in the last twelve months. Accessibility to gold investments of one form or another is increasing. Gold is probably entering portfolios with renewed confidence and the talk amongst "people in the know" is of a sustained, long-term bull market in gold. Bull markets being what they are, one would expect some "irrational exuberance" along the way, but how much of this will occur before 1 September? I think it is still too early for the glitter to appeal to Jack and Jill Ordinary � and they still have a bad taste in their mouths from the slumping equity markets. Also, "fear" has not set in yet in the equity markets and the "Greenspan put" will probably stave off that phenomenon for a while yet. Demand will continue to ramp up in China. In India, although the wedding season will be ending by September, many dealers may be wary of a runaway in the price of gold before next year. I therefore suspect that seasonal demand may not slacken as much as normal.

What about "demand shocks"? China revaluing or floating its currency? Mmmm ... don't know. Terrorist attack in the US? Maybe, but God forbid. The effect from 9/11 was a step in the gold price of about 8% for about a month. A similar event might see gold above $400 on September 1, but that is unlikely. Major bank failures in Japan? � could see a surge in Japanese buying, but probably not more than a few percent on the price. What else? Major US bullion bank caught short? Not much talk of that lately, but the risk is probably still there. Were they protected by the increase in COMEX margins back in February? Perhaps they were. Might COMEX increase margins still further? Well�it's a crooked game with some large asses swinging on the chairs. And then there is the Barrick / Blanchard law suite. If dismissed � gold may fall a few percent; if upheld � gold may go up a few percent. Derivatives failure � Buffett's weapons of financial mass destruction � they too are out there for gold and for just about everything else that can be gambled upon; and that could be a Puplava 10 sigma event, but probably not before September. War with Iran? Very real possibility if Mr. Bush and his colleagues cannot get the economy moving in time. The "Iran re-election contingency plan" is definitely on the cynics table � and they have oil too, and they need liberating just like Iraq, and they may be harbouring terrorists, and developing WMD... Yes, some premium might appear in the gold price from that contingency before September, but probably not much.

Whew! Where does that leave us on the fundamentals? I'd still say $382 plus or minus $35, but with a strong upside bias. Better than Fed-speak, but still not very clear. Oh well�we will just have to wait and see�

FWIW and DYODD

:-)

Sundeck
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THIRD PLACE WINNER of the SILVER

Goldendome (5/24/03; 13:32:32MT - usagold.com msg#: 103426)
$$$$$$$$$$$$$ ESSAY CONTEST ENTRY $$$$$$$$$$$$$$$

DOOMSDAY-DEJAVU

On Tuesday, June 17th, 2003, after repeated denials, North Korea admitted that it was re-processing spent nuclear fuel, that they have found they have enough plutonium for several nuclear weapons, and that they have possessed more nuclear weapons than first estimated. Secretary of State Colin Powell condemns the news and says, "The North Koreans are on a path of recklessness." On the news, Gold moves up $6.10 to $386.40, sparked by heavy buying in Asian markets. The dollar also rises to its highest level in four months against the Yen. The Dow Jones sheds 181 points on the troubling news to 8338; Kudlow and Cramer claim the market will surge back once the true nature of the "bluster" is understood.

The last two weeks of June saw a choppy but steady rise in the gold price as the dollar continued its swoon against foreign currencies. The USDI fell to 87.65 by month's end. Rumors of problems developing in the financial markets with currency and interest rate spreads moving to adverse extremes against several large unnamed financial institutions, but rumored to be located in New York, Germany, and Japan. Of further Note: Several large short players and hedgers in the gold market were making aggressive moves on gold price dips, to exit unfavorable positions, as the gold price moved significantly into the $400 range as the month closed. New buyers entered the market when the Federal Reserve abruptly cut short-term interest rates to 3/4% in mid-June. Banks were reportedly paying as little as 1/10 of a percent interest on savings accounts. Gold had now gained a full 25% in the previous year alone!

By July 4th, several congressional, as well as United Nations' meetings had taken place to discuss the Korean situation. All agreed on one thing--Now was the time for talk. President Bush also chose this historic occasion to talk (by television) to the American people. Telling us all again, how we have always stood in times of trouble to defend freedom, whenever it was threatened. "We now face such a time; the North Koreans WILL NOT be allowed to keep their nuclear arsenal!"...(Well, that was clear enough). He continued, "We must first sit down with the North Koreans, in an attempt to voice our concern. Therefore, the United States will open dialog with representatives of the North Korean government as soon a possible [something we had previously said we would not do unilaterally] to bring lasting Peace and Stability to the region."

Monday, July 7th, the stock market opened up 136 points on the "good news of impending talks." Gold dipped $3.70, to $414.60. Later in the week the first estimate of second quarter growth was released showing a GDP up-tick of 2.3%; the Dow Jones tacked on another 91 points, and Gold closed at $416.10. At about this time, (no one knows for sure but the decision maker) Alan Greenspan, stepping out of character, decided to make a guest appearance on "Larry King Live". Don't ask me why, only he knows that answer. Although publicly supported for re-appointment by the President, some said it was the first stop on Al's "farewell tour".

Anyway, the guest appearance was on Thursday, July 24th. A record audience tuned in to see "The Maestro" and fellow market crooner, Louis Rukyser exchange notes with "Mr. Suspenders". The audience that night saw their beloved Chairman, Mr. Greenspan, "live" as never before; he was witty; he was even comically engaging, exchanging clips with "Rukey", and acting almost giddy at the economies recently reported performance. At a point near the show's end. "Rukey" offered that were it not for Alan Greenspan, that he [Rukyser] would not be were he is tonight. King looked perplexed, pondering the comments meaning, as if thinking and wishing to say: "Hey Bozo, who do you think gave you the invite here, anyway?" King then turned his head and asked Greenspan in his most sympathetic manner, "Alan, when do you see the economy returning us to real prosperity?" Greenspan, in rare historical based glibness responded, "Larry, prosperity is just around the corner."

Ted Turner, owner-or former owner of CNN, later commented about the show. "I thought I was going to throw up. Here are those three, yucking it up, like a bunch of drunken frat brothers at a fifty-year reunion. They should have shown a little more concern for the poor folks that lost all their money in the Markets." Ted failed to father mention, that he too, was now one of these much poorer folk.

The following day

Gandalf the White

(06/02/2003; 14:04:01 MDT - Msg ID: 103964)

THE REST of my last POST ! ESSAY CONTEST WINNERS

The following day, the markets gave their assessment of "The Maestro's" performance--Two thumbs down! Shedding nearly all of the post 4th of July rally and ending at 8351 on the Dow. News of a new record trade deficit, and a record slump in auto sales helped to push down the Chairman's scores. Gold surged ahead to $426.50 (a new high for the move) as both U.S. and Chinese efforts to organize talks with North Korea had come to nothing.

Outside of the USA Gold Forum's vigilant membership, few were aware that the Comptroller of the Currency, in a highly unusual move, had swooped in to examine both of New York's largest banks simultaneously. Obviously though, some gold traders had also taken note.

At the end of the day, Greenspan said that he used a poor choice of words, when referring to "prosperity," but had felt a little light-headed at the time. Both Rookies and King said they couldn't explain it either, but both said they had felt almost "high" during the television broadcast. After reviewing tape of the show, all three, it was noticed, were drinking much more liberally than would normally be expected, from their French bottled waters. The bottles were located and sure enough, tested positive for a mild hallucinogenic drug. Tom Ridge declared it, "An act of financial terrorism." Ordered a full investigation and promised, "total justice to the guilty." The French ambassador immediately denied any French involvement.

The poor Dow, NASDAQ, and S&P continued to sag into August as did the weary countenance, jowls, and eyes of the forlorn, Sir Alan.

On August 4th, (The one-month anniversary of the President's "Let's sit down with the North Koreans speech," They abruptly said all talks were off...They did not trust the United States...They were armed and well prepared for war...They as a sovereign nation would decide their future...They welcomed support in the name of freedom from any country willing to stand against the United States. They also now admitted to having over a dozen nuclear weapons and stated that those weapons would be used WITHOUT DISCRETION to defend themselves.

The following day Iran and Syria both issued support for North Korea and admitted having nuclear weaponry--nothing more than that. Within a day, Israel sealed its borders and declared that any provocation was a act of war.

Russia's Vladimir Putin spoke in Paris. "The World is poised for War...Only the United States can prevent it."

You can imagine what was going on in the markets.. Gold futures lock-limited up three consecutive days. After that, the COMEX was closed. A spokes man said, "because of computer tampering and the necessity to protect traders from the unscrupulousness of speculators." At the same time, spot rose to $500, then 6, then 7. Stocks? I wasn't watching them that much, but they crashed to about 6,000 on the Dow within days, and kept heading South.

The news of financial insolvencies and the inability of market makers and banks to meet obligations now were causing the public to "run" from the markets and banks. The FDIC had joined in the New York bank investigations and stated that a congressional "pay out" might be needed to meet legal mandates in certain situations.

Rumsfeld must have seen his face reflected in the new foreign enemies and blinked. He demanded, "The United Nations must act!" What!(?) This from the new town Marshall, who only months before had been looking for new gunslingers to blast? The world froze for two weeks. The USDI plummeted to 53.

Then at 8 A.M. in the morning, on Sunday, August 24th, one day after the traditional Dragon Boat Festival in Hawaii, a nuclear device was detonated a few hundred yards offshore of Waikiki Beach at Honolulu. The device, believed to be aboard one of the many luxury yachts in the area, leveled the beachfront Hotel Strip and immediately killed and estimated 300,000 people.

The following day, Monday, none of the markets opened-nor did they open for the remainder of the month. I visited the local trader in my small town. He figured physical gold at somewhere around a thousand dollars and ounce, but he didn't know for sure--didn't seem to care. Nothing seemed to matter now. "What were you thinking of doing?" He asked. "You DON'T want to sell it now. I don't even know if you'd get your money. And even if you did, you might not want it after a while. Because gold's probably just going to keep going up...for a while anyway."

By September 1st, --Labor Day-- Physical Gold Stood at $1787.35 per ounce and was still climbing, as the United States considered retaliation--but against whom?

Respectfully submitted by:

-------Goldendome 5-24-03
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AND because of the CLOSE RANKING, the Judges are making RECOGNITION of two additional entries as
"HONORABLE MENTIONS" !!

as FOURTH PLACE "Honorable Mention"

Boilermaker (5/29/03; 15:37:33MT - usagold.com msg#: 103744)
Essay Entry
Whistle Blower Blues

We celebrate Labor Day as the hot dry summer drags on. But this is not a time for celebration with the markets in disarray. The Administration and all of Washington is in full panic deployment. No one could have predicted the financial devastation and fallout that began when the former head of security at the Fort Knox Gold Repository revealed that "large quantities of gold bars" had been shipped out of the facility over the past several years to unknown destinations. This former employee who was under oath to maintain secrecy about all aspects of the depository had become intrigued with several of the internet gold sites where the buzz in recent years has been about the alleged manipulation and suppression of the price of gold to create the illusion of a "strong dollar". It was June 16th when Robert Smith, a 30-year government employee of several different agencies wrote to his Congressman, Ron Paul of Texas, and revealed the ongoing reduction of the gold in our largest National Gold Repository. Miller suggested that it was part of the effort to subdue gold and brace the dollar. Interviewed on several financial news outlets, Miller made a convincing case for the allegations and got the attention of investors around the world.

Congressman Paul, himself a gold advocate, demanded an audit by Treasury that would be overseen by a congressional delegation. At first the Administration dug in their heels, denied the charges and refused the audit. But like Watergate, the denials only brought more criticism and pressure to reveal the truth. The media, at first not much interested in the story, became fully involved as the financial markets began to react violently to the allegations. The Administration, seeing the futility of further denials, finally confirmed on July 25th that shipments of gold from Fort Knox had occurred as part of a long-term program to reduce the US gold reserve. This reduction was "in keeping with the objective of stabilizing and strengthening the US$ and in recognition of the diminishing role of gold as a reserve asset".

The financial community was caught off guard by this sudden revelation and there was instant chaos in the gold markets that quickly spread to currencies, commodities, stocks, derivatives and even interest rates. As we celebrate Labor Day the financial landscape is littered with the confetti of worthless paper and firms that had so recently been given great value. Now the term "precious metal" has been given a renewed meaning to a humbled nation.

Gold has suddenly become the standard by which other assets are valued. With the closing of the COMEX and other official gold exchanges there is no market that establishes an official price. The value of physical gold can be measured only by comparison with what people are willing to offer for it from day to day. For instance, auto dealers are accepting gold at a ratio of $2250 per ounce and real estate brokers are advertising even higher exchange rates.

The government is in a frantic effort to reconfigure the dollar and is threatening to make gold illegal as they did in 1933. This has only served to strengthen gold and make the Euro the currency of choice with US producers and consumers. The most recent rumor is that the US is negotiating to become a member of the Euro system because OPEC will no longer accept the dollar.

This Labor Day is the painful turning point for Americans used to the special status of the dollar. Call it "The Night They Tore Old Dollar Down".
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and FIFTH PLACE "Honorable Mention"

The Hoople (5/29/03; 13:27:47MT - usagold.com msg#: 103735)
$$$$ ESSAY CONTEST ENTRY $$$$
The POG on labor Day is an appropriate thought. It is labor that toils to mine, extract, refine, and ship gold. It is labor that builds wealth and fortunes. It is then bankers that cheat laborers out of their wealth by all the tried and true sleight of hand methods. How? By issuing worthless fiat that can never be a store of value but rather a depreciating asset. By confiscating gold 70 years ago and using it as a weapon against laborers. By publicly deriding gold as a "barbarous relic" while secretly knowing it is their only salvation. By devising paper instruments to manipulate and control the POG. There are many other schemes to mention that would be too lengthy for a simple essay, suffice it to say all schemes eventually fail.

One thought rarely mentioned about the big "scheme" is how the reported CPI/PPI numbers not only understate the real rate of inflation(a scheme itself), they are going the wrong way to actually reflect it. Hedonic deflators, quality improvements and superior technology are trumpeted as deflation adjustments but nowhere does cheapened product, smaller portions, and inferior service get any consideration. Whether it is a home, car, or pair of jeans products are cheaper and poorer service is the norm. This is another hidden wealth destroyer.

The old axiom about an ounce of gold being able to buy a fine men's tailored suit is still true. I recently bought a fine tailored suit at Nordstrom's for about $1,200.00. It still isn't as fine tailored as suits were years ago. The service while good by today's standard is still inferior to back then. I can only speculate that to replicate a fine tailored suit by those yesteryear standards would require up to $2,000.00. To me that represents the true value of gold. So what I submit as the POG on Labor Day are 2 prices: The real one ($2,000.00) and the banker scheme POG to defraud laborers everywhere- $392.00. By the time Labor Day rolls around we will have printed another 150 billion of FRN's. Our Gross Public Debt should have increased by a similar amount. Frightening possibilities for all holders of paper wealth.
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THANKS to ALL that did spend the time, thought and effort to enter the ESSAY CONTEST !
These entries were all TRULY GOLDEN and very difficult to judge between.
===
<;-)

Black Blade

(06/02/2003; 14:11:29 MDT - Msg ID: 103965)

Dollar Barely Up as Data Erodes Gains

http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=202&feed=bus§ion=news≠ws_id=bus-n02242377&date=20030602&alias=/alias/money/cm/nw
Snippit:

NEW YORK (Reuters) - The dollar held a small advantage against the euro on Monday as last week's upbeat tone for the U.S. economy was squelched by fresh and generally weak U.S. data coinciding with a slew of world leaders' comments on the U.S. currency. The battered U.S. manufacturing sector slowed its rate of decline in May by more than economists had expected, while U.S. construction spending fell in April instead of rising as forecast. "Even with some decent components within it, the overall ISM (Institute for Supply Management) headline threw cold water on the dollar rally, easing it back a bit," said Michael McGuinness, head of North American sales at American Express Bank in New York.

According to a Canadian official, Bush also said the value of the dollar was not up to him. "As far as the value of the U.S. dollar is concerned, Bush said he was not the one who decides. It is (Federal Reserve chief) Mr. (Alan) Greenspan," the Canadian official told reporters in Evian. The Federal Reserve determines interest rates, while the Treasury typically comments on the dollar. "It seems stupid on the face of it but it is really not if Bush was trying to say interest rates as a fundamental are more important than official speak in terms of setting the medium to long-term value of the dollar," said Greg Anderson, senior foreign exchange strategist at ABN AMRO in Chicago. "Maybe he is trying to tell other officials, especially Europe, that if the currency is bothering you, call your central bank president, don't call me," said Anderson.

Black Blade: Agreed, the president's moronic comments at the G8 conference were not exactly surprising but defied the reality of the situation. The direction of the dollar is out of his hands. Treasury Secretary John Snow jumped in with "me too" comments this afternoon. Perhaps he got a nasty phone call from France, who knows. But neither of them have any real control over Fed Chairman Alan Greenspan or the market. If Mr. Bush wants the dollar to be "strong" then he had better reverse the soaring budget, trade, and current account deficits as well as pay off the soaring national debt. Somehow I don't see that ever happening.

Belgian

(06/02/2003; 14:26:44 MDT - Msg ID: 103966)

@ Gonly(g)old...

I know and do understand how enormously difficult it is to "understand" the new, coming Gold ! It also took me a lot of efforts to reach some level of understanding and Gold-insights. But Gold's complete picture is to be found here at usagold's ARCHIVES ! Study A/FOA, again, again AND AGAIN ! Yes, fellow goldmeisters, FOA is very...VERY heavy stuff and written in a cryptic language. And I remain surprised that there is nobody out there who even attempted to re-write this whole thing.

Answering your questions would take quite some hours of concentration as to be complete. Certainly because of my poor English.

The euro is NOT and does NOT intend to be "backed" by Gold !!! The euro wants to take Gold out of its "money" association ! Free Physical Gold is a *wealth-reserve-asset* and NOT money or a derivative of money. The purpose of Free Physical Gold is to become a tangible representative of all the wealth this globe is producing.
Not a contained unprecious metal that is forced to walk in line with a currency/fiat. Free Gold is un-manipulated...un-engineered, Gold. A wealth-reserve-asset that evolves with all the wealth of the world and not with one particular fiat that wishes to claim reserve status. Gold is the only "REAL" reserve.

Gold is NOT a derivative of dollar-fiat-paper. Those trillions of dollar-reserves are NOT representing the globe's wealth. And it is the dollar-system that contains Gold from doing so (representing wealth). Gold is ment for storing your surplusses and function as a transferable wealth tangible. Fiat is not suitable for doing this because of its permanent depreciation. That's why Gold must be contained. The euro project wants to promote Gold as a permanent appreciating wealth reserve. That's why the ECB has introduced the marking to market of its goldreserves in anticipation of Free Gold that evolves, valuewise, with the total, wealth that we are producing and wish to consolidate in something tangible for all seasons and times.

A surviving dollar, dollar-reserve-system, will NEVER let Gold Free !!! The dollar or any other currency can never, ever compete, permanently, with Free Gold !

The present dollar-standard has evolved into a debtmeter !
The dollar must contain Gold from setting Free as to not signal how bad/accidented, this dollar-standard, really is.
Lost 70% of its purchasing power in 30 years and will soon lose its purchasing power at a dramatic speed, when the past confetti inflation translates into price-inflation !

The euro as an alternative fiat is will become as worthless as the dollar over time if the euro-system should copy the dollar-system with unfree, contained Gold !!! But this will NOT be the case ! The ECB has made its intentions, for Freeing Gold, very clear with openly exposing its goldreserves to the present dollar-paper-gold-market pricing. The ECB wants to set Gold Free from this dollar-system with the installment of an euro-PHYSICAL goldmarket !

The amount of Goldreserves in the ECB and National vaults is of no importance !!! Even one gram of Gold could theorethically revalue as to represent a bigger and bigger amount of wealth on the only condition that one has a free Physical goldmarket.

The dollar hates Gold, wich you all agree. The euro loves Gold...not because it has an arbitrary cover of 15%, but because the euro wants a Free "appreciating" Gold-Value as wealth-reserve, instead of the dollar fiat, artificially embedded in a percepted dollar-standard !

OK guys, for the last time...the euro-currency is a fiat with another system (than the dollar) behind it. The euro wants to become associated with a Free euro-Gold market that trades Physically and NOT dollar-paperly . The WAG was NOT a dollar initiative but an euro-measure !
Euroland's financial media have never, ever bashed Gold in private possession ! On the contrary, all our banks do sell Gold, everywhere, anytime...and will continue to do so !

It was Euroland who demanded US-Goldreserves (Gold-Wealth) for their excess earned fiat-dollars (worthless paper)before Nixon closed the Gold window !

Any fiat-digit-system, for trade settlement, that tries to imitate some new form of gold-backing will always remain unworkable, managed, frauded, flawed !
Yes, we need enough political will to take that step to Free Gold ! This political will will reach enough critical mass when the dollar-system calf is drowning...as is in the process of happening. Fixing a new reference-POG is non-sense. It is another attempt to keep the dollar-system alive. It is NOT a matter of choice between the dollar or the euro but only a matter of Free Physical Goldtrade that runs parallel with the currency/digit that is used for trade settlement. Free Gold, the Wealth-Standard, regardless of any currency/digit. Free-Gold that is everyones instrument to control all those who desire to control you !

That's why the dollar-system hates the euro-project, wich is perfectly understandable.

Cheers !

Black Blade

(06/02/2003; 14:43:15 MDT - Msg ID: 103967)

Canadian Natural Gas Drilling Cut by Bad Weather and Labor Woes

http://quote.bloomberg.com/apps/news?pid=10001099&sid=aCi4ls_9fr6c&refer=energy
Snippit:

June 2 (Bloomberg) -- Bad weather and labor shortages are forcing Canadian companies such as Precision Drilling Corp. to sink fewer natural gas wells, worsening the shortage that has caused the price of the fuel to surge. ``We had 70 rigs ready to go to work two weeks ago'' and no place to send them because of the weather, said Hank Swartout, chief executive officer of Calgary, Alberta-based Precision, which has a total of 227 rigs. Output from western Canada, a region that supplies 20 percent of U.S. needs, may fall for the first time in 17 years and may lag behind forecasts made as recently as a few months ago. That could mean even higher prices next winter, forcing some industrial users to switch to other fuels or curtail production. About three-quarters of the growth in U.S. natural gas demand has been met by increases in Canadian production since the mid- 1980s, according to Kenneth Vollman, chairman of Canada's National Energy Board. In the last few years, Canada's output appears to be ``flattening out,'' he said.

Setbacks due to weather have been compounded by a shortage of crews, drillers said. Construction of the oil sands facility in Fort McMurray, Alberta, is drawing away skilled labor, as are projects in other countries. ``A lot of rigs only had two crews and some rigs didn't get out of the yard because they had no crews,'' said Zane Reiter, manager of corporate development at the Petroleum Services Association. Lack of labor ``probably shaved quite a few wells'' off the first quarter tally. Without enough skilled operators, drilling rigs can't be run safely, Precision's Swartout said.

Black Blade: No surprise as I have hammered away at this before. Worse yet is that drill rig activity is actually up in Canada over last year but no real production gains while storage lags at critical levels. The US is not much better off either as drill rig counts are woefully low in the face of the crisis. Today oil and gas prices are ticking higher but no substantial increase in rig activity. This will obviously hurt an already crippled US economy with higher energy costs.

Black Blade

(06/02/2003; 15:00:07 MDT - Msg ID: 103968)

Buffett, Economists Say Current Account Deficit Threatens U.S.

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a4KLLLqY9gOw&refer=us
Snippit:

June 2 (Bloomberg) -- Economists such as Morgan Stanley & Co.'s Stephen Roach long have predicted that the rising U.S. current account deficit, the broadest measure of trade and net investment flows, would sour investors on U.S. assets. The widening gap would send the dollar into a tailspin and force the Federal Reserve to raise interest rates to keep capital coming into the U.S., Roach and others have said. With U.S. interest rates lower than those in Europe, and the dollar's 20 percent drop against the euro in the last year reducing the value of U.S. assets, investment from outside the U.S. has fallen. Berkshire Hathaway Inc. Chairman Warren Buffett and International Monetary Fund Chief Economist Kenneth Rogoff, also have warned that the record deficit is unsustainable. ``We are in a country that is buying more from the rest of the world than we're selling, and we're doing it on a big scale,'' Buffett told U.S. chief executive officers at a Microsoft Corp. gathering in May 21 in Redmond, Washington. ``Any other country in the world that did that on that scale would have seen greater currency depreciation already,'' he said. ``We have such a strong currency historically that there's been a delayed effect. But it's started to happen in the last year, and unless the underlying conditions change it's going to continue.''

Investment from abroad is key to financing that gap because the deficit can only be reduced by income from trade or capital flows. The U.S. needs to attract about $1.5 billion a day from abroad to finance the deficit, said Don Alexander, a currency strategist at Citigroup Private Bank in New York, with $166 billion in assets. Two-thirds of the increase in the current account gap last year stemmed from a rise in the U.S. trade deficit, which widened after exports sagged because of the weak world economy. At the same time, net investment income fell as receipts from abroad fell more rapidly than payments on foreign investments in the U.S. ``Our demand for foreign capital is increasing dramatically at a time when we can't provide the returns needed to attract more of it,'' Morgan Stanley's Roach said in an interview.

Black Blade: Moronic government officials aside, the dollar must weaken as there is absolutely nothing there to support it. Besides, to stimulate economic growth the Fed must provide massive liquidity and that translates into a weaker dollar and higher inflation. Something that the Fed does not want to do but must do. They have no other choice as they are out of bullets and they are surrounded on all sides.

Black Blade

(06/02/2003; 15:17:23 MDT - Msg ID: 103969)

Job searches now averaging 20 weeks

http://www.azcentral.com/arizonarepublic/business/articles/0602jobsearch02.html
Snippit:

PRINCETON, N.J. - It takes just a few minutes for the sheet of ledger paper to complete its trip around the circle, long enough for 28 pairs of hands to log months of frustration on its ruled blue lines. Unemployed workers, struggling for traction in a stagnant labor market, are slogging through some of the longest job searches in 20 years. The time the average jobless worker remains unemployed stretched to nearly 20 weeks in April. That is up from about 12 weeks in early 2001, and is the longest since late 1983, according to the federal Bureau of Labor Statistics. Many searches take even longer. Nearly 22 percent of unemployed workers, 2 million people, have been out of a job more than six months. That is double the number of two years ago. About 13 percent have been out for a year or more.

Black Blade: This Friday we get the unemployment data for May. If I have time and the motivation I may dig into the BLS data and crunch the numbers for the alternative rate which sits somewhere between 10-12%. Oh yeah, the BLS is changing their statistical approach for unemployment yet again. This should be amusing if not totally bogus.

Waverider

(06/02/2003; 15:56:51 MDT - Msg ID: 103970)

VIP: DAILY GOLD MARKET REPORT

http://www.usagold.com/DailyQuotes.htmlSnip:
"Gold appears to have not suffered any ill effects of the stronger U.S. dollar and a rallying equities market into the close of trading in the New York gold pit. Funds were seen buying into the close of the session as skepticism crept into the market about the president's "strong dollar policy" comments and less that stellar data from the ISM manufacturing index and rising oil (and natural gas) prices. Oil prices moved north of $30/bbl and natural gas prices stubbornly hold above $6/Mfc giving investors pause as higher energy costs tend to throw a "monkey wrench" into the economic growth engine."

Waverider: Thanks Black Blade, and congratulations to the essay contest winners!

misetich

(06/02/2003; 15:57:32 MDT - Msg ID: 103971)

Fed's Parry:Repeats,U.S. Economy Still'Mired' in 'Soft Patch' Jun 2 / 15:30 EDT

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1054582200000&sn=7&banner=mainwireSnip:

WASHINGTON (MktNews) - San Francisco Federal Reserve Bank President
Robert Parry, repeating Monday for the third time in a week his speech
about the U.S. economy still being in a "soft patch," chose to leave in
his comments that downside surprises would be more of a concern than
upside surprises.
.............
"So long as this remains a jobless
recovery, it can weigh on consumer confidence and lead people to pull
back on spending."
He added, "Frankly, the longer growth has to depend on the housing
and auto sectors, the riskier the situation becomes."
...........
"We're still likely to have a considerable amount of excess
capacity by the end of the year -- even with the generally anticipated
pickup in growth in the second half," he repeated. "That means the
already low inflation rate is likely to trend lower."
"With a lower inflation rate, it wouldn't take a very big standard
error of the forecast to come up with a small, but still worrisome,
possibility of deflation going forward," he said.
**********
Misetich

The auto industry is going through a "soft patch" and housing has began its descend -

The SM has raced up again - the Big Bad Bear waiting - as the 4th qtr priced in earnings will not materialize

All On Board The Gold Bull Express

misetich

(06/02/2003; 16:14:23 MDT - Msg ID: 103972)

Oil Surges Over $30 on Low Fuel Stocks

Snip:

NEW YORK (Reuters) - U.S. oil prices topped $30 a barrel for the first time in six weeks on Monday as the threat that the OPEC cartel will cut supplies again next week strengthened concern about low U.S. inventories
...........
Coming in the week leading up to the start of the summer driving season, when U.S. demand for motor fuel peaks, dealers feared a potential price spike.

"With global inventory still at extremely low levels and particular concern over low product and crude oil inventory in the U.S., there is little obvious sign of any significant weakness," said Barclays Capital analyst Kevin Norrish.

Signs the Organization of the Petroleum Exporting Countries could be preparing to announce an output cut at a meeting next week have bolstered the price strength.

Venezuelan Oil Minister Rafael Ramirez said last week that the cartel might cut its ceiling by up to one million bpd at the June 11 meeting, but any decision hinges on the extent and speed of recovery of Iraq's battered oil industry.
**************
Misetich

Will oil prices, natural gas, housing costs etc. going higher should please the Feds "deflation" worry

All On Board The Gold Bull Express

Black Blade

(06/02/2003; 16:18:41 MDT - Msg ID: 103973)

Newmont says half cash offer for hedges accepted

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=2863439
Snippit:

NEW YORK, June 2 (Reuters) - Newmont Mining Corp. NEM.N , the world's largest gold producer, said Monday that almost half of its offer to pay 50 cents on the dollar for outstanding unprofitable gold sales contracts with its Australian mining subsidiary had been accepted by the hedge counterparties.

Black Blade: Looks like Newmont stuck it to the bankers. In the current economic environment the bankers and investment houses are taking a beating as companies are backing those who bankrolled operations into a corner. This has been especially true of energy companies since the Enron fallout. I would not be surprised if other miners with mine specific hedges were to renegotiate some contracts down the road. As the old saying goes, "owe the bank a little and you're in trouble � owe the bank a lot and the bank is in trouble". Just wait as the "weapons of financial mass destruction" (aka derivatives) blow up. "Interesting Times"

BTW, only caught a couple of medium sized "bows" this morning as the weather turned bad. Of course the only thing attracting the fish were "gold" colored Kastmasters. Maybe a good sign. A little "golden" fried trout on a bed of "golden" safron rice with a "golden" ale for dinner tonight.

Off to the gym!

misetich

(06/02/2003; 16:21:49 MDT - Msg ID: 103974)

Low Rates Spur Average Home Prices Up

http://www.washingtonpost.com/wp-dyn/articles/A3157-2003Jun2.htmlSnip:

NEW YORK - The average price of a U.S. home during the first quarter was 6.48 percent higher than in the year-ago period, a government agency said on Monday, spurred by mortgage rates at 45-year lows.

However, the climb in home prices slowed to its weakest quarterly pace in five years, the Office of Federal Housing Enterprise Oversight said. The OFHEO is a unit of the Office of Housing and Urban Development.

This could be an worrisome sign for the economy, which has relied on the housing sector for support while other areas, like manufacturing, have struggled.
..........
********
Misetich

Sir Greenspan does not see a housing bubble - No signs of "deflation " in housing, medical costs, either

All On Board The Gold Bull Express

R Powell

(06/02/2003; 16:24:17 MDT - Msg ID: 103975)

BIS news

I'm not sure if anyone is interested in downloading this type of information but thought maybe Belgian, Cobra, Randy, Michael or others might find some value here so I'll post them. As usual, they are in PDF form.
Rich

********************************************
Your current news on phrase "gold(any word)" at a glance:
***********************************************

2 new document(s) found since 27.05.2003:

1. Capital flows in East Asia since the 1997 crisis - BIS Quarterly Review, part 5, June 2003 (30.05.2003 16:51)
Part 5 of "International banking and financial market developments" (BIS Quarterly Review), June 2003, by Robert N McCauley
http://www.bis.org/publ/qtrpdf/r_qt0306e.pdf (PDF, 114967 bytes)

..and the Graduate School of International Studies at Seoul National University, 26?27 March. Triffin, Robert (1969): Gold and the dollar crisis, Yale University Press, New Haven. ... but there are risks to wider access to credit 56 B...

2. Derivatives markets - BIS Quarterly Review, part 4, June 2003 (30.05.2003 16:49)
Part 4 of "International banking and financial market developments" (BIS Quarterly Review), June 2003, by Serge Jeanneau
http://www.bis.org/publ/qtrpdf/r_qt0306d.pdf (PDF, 138895 bytes)

..364 49 58 62 61 Options 1,556 1,561 1,828 1,944 150 147 181 194 D. Commodity contracts3 590 598 777 923 83 75 78 85 Gold 203 231 279 315 21 20 28 28 Other 387 367 498 608 62 55 51 57 Forwards and swaps 229 217 290 402 ... ... ......

misetich

(06/02/2003; 16:44:05 MDT - Msg ID: 103976)

G8 - US $

http://www.forbes.com/newswire/2003/06/02/rtr988797.htmllSnip:

Bush and Chirac shook hands and had a courteous private meeting, but each stuck to his rival view of world order, and the U.S. leader left early without holding the customary news conference, leaving a sense of anticlimax among delegates.

In a surprise move, France announced late on Monday that all eight leaders had agreed, in response to the dollar's recent sharp fall, that currency stability was a key condition for growth and they would monitor market movements closely.

It appeared to be the strongest signal on currencies issued in the name of the G8 since central banks intervened jointly in September 2000 to support a weak euro.

But officials said the position on currencies, designed to calm market volatility after a 12 percent fall in the dollar against the euro this year, would not be put in writing.

Participants quoted Bush as saying he did not want a weak dollar and would not use the currency as an economic weapon.
*********
Misetich

Bush left a "day early" - interesting - and Chirac addresses US $ and currency instability -

The descent of the US will continue... gradually

All On Board The Gold Bull Express

Goldilox

(06/02/2003; 16:55:43 MDT - Msg ID: 103977)

"Repuchase Agreements and the DOW"

http://www.financialsense.com/editorials/bolser/2003/0602.htmAn interesting, if somewhat lengthy editorial on a perceived relationship between the FED Repos and the DOW over at Papluva's site. It starts with a description and some links to the FED to define RPs.

"Repuchase Agreements and the DOW", June 2,2003 by Michael Bolser

snippit:

Interest rates are low and the FOMC talks of going lower, repurchase agreements rising geometrically as the MCDI keeps falling far below its 200-day moving average, the DOW is barely able to stay above 8,000 even with large and increasing RP support. One can see great trouble ahead even without factoring in the Middle East turmoil, a burgeoning Euro-centric economic coalition, oil producer threats to re-price their crude in Euros or any of the other traditional economic indicators that we know to be badly deteriorating. Previously effective RP utilization seems no longer effective.

Intervention in otherwise free markets historically leads to scarcity and falling liquidity. One need only look to the price control regime of Richard Nixon for examples of this type of government interventional failure. The penultimate failure in then Fed Chairman Arthur Burn?s price control regime was the forced closing of the gold window. Today the Fed seems rapidly headed towards a similar event.

CoBra(too)

(06/02/2003; 16:57:02 MDT - Msg ID: 103978)

Newmonts Offer - re. Yandal

Already 48% accepted.

Considering the offer was for 50 Cents on the Dollar on Yandal's hedge position, doesn't it highlight the weak position these counterparties may find themselves entangled in? (As an aside, such things tend to happen, when the messianic message as Joe Gutnik claimed takes priority over common or business opr even ethical sense).

IMO, this tough take it or leave it stance of NEM might mark the beginning of the demise of gold hedging practises for both producers and bullion banks - while the de-hedging of producer forwards have been further accelerating in the first quarter.

Lastly the Dollar enjoyed only the briefest of all dead cat bounces - thanks to the briefest statements of GWB at the G8 Evian meetings ... and POO will be affordable at over 30 bucks again? Sure, against �' and au.

The call to arms, eh? GOLD becomes more distinct by the day - cb2

Goldilox

(06/02/2003; 17:06:25 MDT - Msg ID: 103979)

G-8 reporting (Forbes #103976 and BBC #103959)

@ misetich, et al:

Forbes offers a much less upbeat description of the meetings than BBC. I wonder if anything can be read into that.

i.e., the Brits might be a little more anxious for everyone to "get along" than the US audience, many of whom are still talking boycotting Peugeot and French wines.

R Powell

(06/02/2003; 17:20:44 MDT - Msg ID: 103980)

Socrates964

Dollar carry trade ? From 103951....

"One idea that interests me is 'dollar leasing'. Just as central banks purportedly lease out gold while keeping it on their books as an asset, I wonder if they could not do the same with dollars - i.e. keep dollars on their books as assets that have actually been sold into the market. This would be a covert way of getting rid of dollar holdings while maintaining appearances."

Rich: If the purchasing power of the dollar is declining, then wouldn't leasing or borrowing dollars to use immediately to purchase something that is appreciating in value make good sense? That something could be converted back into a currency in the future after the currency decline abates or when fiat is again needed to convert (immediately if the currency purchasing power is still declining) the purchasing power into another form, as when/if you wanted to convert gold into an equivalent value of silver. Why not call this a dollar-carry-trade? Question... if someone were to offer you a huge sum of money (currency) to borrow or "lease" for say 2%/year interest, would you take it ? (;>).
Rich

misetich

(06/02/2003; 17:24:04 MDT - Msg ID: 103981)

Dallas Fed eyes long-term debt in deflation

http://biz.yahoo.com/rf/030529/economy_fed_deflation_2.htmlSnip:

WASHINGTON, May 29 (Reuters) - Buying longer-term government debt could prove to be the Federal Reserve's best anti-deflation tool if it ran out of room to cut interest rates, but such a strategy is not without problems, researchers at the Dallas Federal Reserve Bank said.
..........
Because of the market stress a low overnight rate might cause, many economists on Wall Street think the Fed could turn to so-called unconventional policy tools once the rate reached 0.75 percentage point if further stimulus were needed.

Dallas Fed Research Director Harvey Rosenblum has said Fed policymakers would discuss "unconventional" tools at their next meeting on June 24-25.
...........
"In the event it must act alone, the Fed's best policy option is probably open-market purchases of longer-term government bonds," they said. The Fed currently conducts open market operations in short-term securities only.

They warn, however, that calibrating such operations could prove difficult.

"No one, we believe, has a good quantitative sense of the mechanics of this strategy -- that is, what size operations are needed to secure a given stimulus?" Koenig and Dolmas said.

"If standard policy options are exhausted, the Fed's quiver is by no means empty. But the arrows that remain are less familiar and, perhaps, not quite as straight as the ones that have already been fired."

One of the other measures they said the Fed could pursue would be to substantially weaken the dollar.

But they cautioned that a policy of foreign exchange intervention would, in effect, be conducting a monetary contraction in the economies of U.S. trading partners.

"If the foreign central bank was attempting to pursue a neutral or expansionary policy, the Fed's action might generate some consternation or even a policy response," they warned.
********
Misetich

"unconvential means" - uncharted territory - fasten your seatbelts - its going be a hot golden summer

Its desperation time at the Fed

All On Board The Gold Bull Express

R Powell

(06/02/2003; 17:33:53 MDT - Msg ID: 103982)

Belgian

My simple pragmatic, trader-type mind is not always fired up enough to fully comprehend all your words, although I often try. A total economic understanding or as near as I can get to that, is much more difficult than trading.

After reading your 103966, I found myself thinking or postulating from your thoughts that..?...?.. with Free Physical Gold ... the amount (say number of ounces or weight but NOT an amount in dollars) of gold held as a Euro reserve...does NOT need to be adjusted even if more Euros are created.
Am I catching on here or am I way off as usual?
Thanks
Rich

Cavan Man

(06/02/2003; 17:35:31 MDT - Msg ID: 103983)

That dog (french poodle) might hunt?

Excerpted from "The Straits Times"The French leader was more reserved, avoiding any such direct personal praise for Mr Bush, but expressing total support for his efforts to bring peace to the Middle East.

Their 25-minute meeting, which the White House billed as a 'courtesy call', was one of the most scrutinised encounters at this year's summit.

It followed on their brief exchanges on Sunday, characterised by a cool handshake, stock smiles for the press and a Bush gift of three books on Native American culture.

Despite the upbeat signs, many areas for disagreement remain - notably on trade, agriculture and managing the post-Cold War world.

Mr Chirac also champions a vision of 'a multipolar world', where US dominance is kept in check by Europe and emerging powers such as China and India.

Some observers believe that US-French ties may not recover fully until both leaders leave office.

'It would be very dangerous to believe that relations are back on track now,' said Mr Dominique Moisi of the French Institute for International Relations.

'What we are witnessing is not a return to friendly collaboration, but an attempt on both sides to behave in a correct manner.

'You do not recreate trust just like that. They were very close to divorce

Goldilox

(06/02/2003; 17:51:08 MDT - Msg ID: 103984)

FCC adopts Media ownership rules change

http://money.cnn.com/2003/06/02/news/companies/fcc_rules/index.htmsnippit:

NEW YORK (CNN/Money) - The Federal Communications Commission narrowly approved new media ownership rules Monday, allowing television broadcasters to expand their reach, despite fears the move may reduce the variety of viewpoints available to consumers.

The Republican-led government agency voted 3-2 to allow the broadcast networks to own television stations that reach a combined 45 percent of the national audience, up from 35 percent.

. . . "I have heard the concerns expressed by the public about excessive consolidation," FCC Chairman Michael Powell said ahead of the vote. "They have introduced a note of caution in the choices we have made."

"Keeping the rules exactly as they are, as some so stridently suggest, was not a viable option," Powell added. "Without today's surgery, the rules will assuredly meet a swift death."

Goldilox:

I wonder what he meant by "swift death"? That's a very strange way to talk about administering a public trust. Maybe two viewpoints in these troubled times is just one too many.

3-to-2, that sure seems like an awfully large committee to argue such a minor issue like this . . . probably two politicians, two "industry experts" and Colin Powell's kid casting the deciding vote. Hey, Rupert Murdoch did such a fine job disseminating war info and pretending to be an all-American, we should let him run the rest of the US media, as well. If you want public information, go to C-SPAN and take a nap.

"There are laws to protect the freedom of the press's speech, but none that are worth anything to protect the people from the press."
--Mark Twain

P.S. By the way, be extra grateful for this fine forum and our Hosts, as political dissent may soon find its outlets more and more difficult to obtain.

misetich

(06/02/2003; 17:51:37 MDT - Msg ID: 103985)

Goldilox (06/02/03; 17:06:25MT - usagold.com msg#: 103979)

You wrote
...........

Forbes offers a much less upbeat description of the meetings than BBC. I wonder if anything can be read into that.

i.e., the Brits might be a little more anxious for everyone to "get along" than the US audience, many of whom are still talking boycotting Peugeot and French wines.
...........

___________________
Misetich

Bush left a day earlier - very unusual - Chirac unprecendent comments on US $ seems to imply Europe is concerned US is using devaluation as a tool to 1) force Europe to cut IR and lure investments to US or at least stop the exodus as US investments would be rendered "attractive" due to currency flactuation

It will be interesting if ECB will cut IR at all - I would guess they will not give what markets expect (1/2%) and probably will cut 1/4 or not at all

The US vision is for Europe to toe the line and it won't happen - Bush has painted himself in the corner with his " you are with us or against us" syndrome

Gold investors will benefit from the oncoming caos

Goldilox

(06/02/2003; 18:01:34 MDT - Msg ID: 103986)

G-8 Press

@ misetich, (and Cavan Man):

Interesting observation. I'm also glad that Cavan Man found an even more diverse opinion from "the Straits Times". I don't pretend to know how the leaders are actually reacting, but I was intrigued by the different media slants on opposing sides of The Pond.

I'm a firm believer in the adage that one can tell a politician is lying based on the movement of his lips.

misetich

(06/02/2003; 18:17:35 MDT - Msg ID: 103987)

Mexico May Sell Euro Bonds Via Citigroup, Deutsche

http://quote.bloomberg.com/apps/news?pid=10000086&sid=aeNJ4CHdri9w&refer=news_indexSnip:

June 2 (Bloomberg) -- Mexico may sell its first euro- denominated bonds in more than two years as early as this week as the European currency's gain against the dollar spurs demand.

Mexico has approached investors about a sale of 10-year bonds through Citigroup Inc. and Deutsche Bank AG, said David Dowsett, who says he would buy some of the bonds for the $500 million emerging-market debt fund he helps manage at BlueBay Asset Management in London. The sale would be for about 1 billion euros ($1.2 billion), Dowsett said.

Demand among some European investors for euro-denominated assets has risen amid the common currency's 11.4 percent surge against the dollar this year. Mexico typically taps international capital markets in dollars and has sold $5.5 billion of bonds denominated in the U.S. currency in three sales so far this year.
**********
Misetich

Changing times

All On Board The Gold Bull Express

Aristotle

(06/02/2003; 18:21:33 MDT - Msg ID: 103988)

socrates964 in msg#103951

said:
"One idea that interests me is 'dollar leasing'. Just as central banks purportedly lease out gold while keeping it on their books as an asset, I wonder if they could not do the same with dollars - i.e. keep dollars on their books as assets that have actually been sold into the market. This would be a covert way of getting rid of dollar holdings while maintaining appearances."

Ho HOY my boy!! You're a good thinker and I am not, so let's see if we can pound this answer out, Ari-style!

Whaddaya think a foreign-held U.S. Treasury note represents? CBs hold a lotta them, yes? That's my contribution. I will purport to know nothing on this matter until you instruct me under your gentle whip.

Kidding.

In the meanwhile...

Gold. Get you some. --- Aristotle

Goldilox

(06/02/2003; 18:26:58 MDT - Msg ID: 103989)

Dollar Carry Trade

@ARI, Socrates

If they adopt the C.R.A.P. accounting practices outlined on Papluva's site, I guess anything can be carried on the books after "loaning out" by using "goodwill" as colateral.

Goldilox

(06/02/2003; 18:36:41 MDT - Msg ID: 103990)

Daily Chart Timing

Interestingly, today's Au rally preceded the SM selloff by about two hours. Any corelation?

Possible Trader scenarios:

1) Gold is going up again, so I better get me some Gold and take some profits from the wall paper investments.

2) GWB is adding no new confidence to the $$ by flapping his yap in Europe, so I expect the $$ to resume its Olympic downhill slope.

3) BB has pulled GWB's covers again so I better listen up and get me some Gold!

4. All of the above

Cavan Man

(06/02/2003; 18:56:06 MDT - Msg ID: 103991)

Warnings 2 + years ago (here I think)

Chickens will roost.IBM Says SEC Probing Its Accounting

Reuters
Monday, June 2, 2003; 6:50 PM

By Duncan Martell

SAN FRANCISCO (Reuters) - International Business Machines Corp. on Monday said that the U.S. Securities and Exchange Commission had begun a formal investigation of how the world's largest computer company accounted for some revenue in 2000 and 2001.

Armonk, New York-based IBM said in a statement that it "believes the investigation arose from a separate SEC investigation of a customer of IBM's Retail Store Solutions unit," which sells electronic cash registers and other point-of-sale products.

IBM shares fell almost 3 percent on electronic trading network Instinet after the announcement, which raised the specter of the accounting scandals of Enron, WorldCom and others that have undermined investor confidence.

"This is big news because it goes back to the old accounting scandals that have shaken investor confidence, starting with Enron," said Burton Schlichter, senior market analyst with Lind-Waldock & Co., a division of Refco LLC.

R Powell

(06/02/2003; 19:29:05 MDT - Msg ID: 103992)

IBM accounting

A plumber to comment on the electrical wiring? Thanks Cavan Man for the news (103991). It did not surprise me but what did surprise me was the comment below,

"This is big news because it goes back to the old accounting scandals that have shaken investor confidence, starting with Enron," said Burton Schlichter, senior market analyst with Lind-Waldock & Co., a division of Refco LLC."

I'm surprised that Reuters News quoted someone from Lind-Waldock instead of a stockbroker. Refco bought Lind-Waldock a few years ago (much to my chagrin) but both are commodities brokers, not stock brokers. ??
Rich

Aristotle

(06/02/2003; 19:34:53 MDT - Msg ID: 103993)

Goldilox assets

At the risk of offending Socrates with my premature comments, let me remind you of some standard banking ops.

VAULT CASH (i.e., "pocket money" if you will) is tallied on the asset side of a bank's ledger. If some of this cash is lent (or "leased") then the corresponding LOAN (mortgages, U.S. Treasury notes, etc.) resides in its place on the asset side of the ledger. Standard stuff.

Look at March for an illustrative sketch on the way the world has worked for many years -- the continuation of which in good faith is on borrowed time. The United States in March spent approximately $126.3 billion dollars to import goods and services while earning only a counterbalancing $82.8 billion on its exports. The difference being our monthly representative trade deficit of $43.5 billion.

Foreigner companies, with the CBs representing the ultimate decision makers, can choose to hold this excess in dollars or perhaps more logically their native currency. To the extent that the foreign companies want local currency to pay their workers and domestic bills, these $43.5 billion in trade earnings will be exchanged for their own domestic currency.

Then, depending on its various motivations of price stability versus export advantage, a foreign central bank may choose to absorb these dollars into its pile of currency reserves (asset side of ledger) and newly emit a corresponding value of domestic national currency. In this circumstance, it is a subsequential no-brainer to turn these sterile dollar assets into interest bearing assets by lending them back to the United States Government as a loan represented in the form of U.S. Treasury notes.

Of course, the international governments and CBs of the world may adopt a policy shift whereby "enough is enough!" and they abandon their longtime support of U.S. "deficits without tears" by allowing those excess trade dollars to either bid directly for domestic currency on the forex markets of the world, or else bid for Gold in the event that the CBs would like to increase their own money supply while bolstering their reserves with non-national type assets.

We've all gotta get this through our heads. As we move to the euro-styled system, we are not in for merely *more of the same old same old* nationally dominated reserve structure. After all, what would be the point of that??? A lot of effort for no material improvement??? I don't think so! The direction is clear...

Gold. Catch the wave of the future. --- Aristotle

Ray Patten

(06/02/2003; 19:55:25 MDT - Msg ID: 103994)

Belgium...

You said, "all our banks do sell Gold everywhere, anytime.. and will continue to do so."

We have read on this site over the years that it is very hard to buy physical Gold in Europe. All you can buy is certificates.

Are you telling us that it just isn't so?

glennh10

(06/02/2003; 20:15:31 MDT - Msg ID: 103995)

Parasite and Host

The article referenced by Misetich (103939), "U.S. Debt in Asia Has Its Costs", began with an interesting quote from Keynes, "If you owe the bank 100 pounds, you're the one with the problem. But if you owe a million pounds, the bank's the one with the problem."

At the G8, GWB said that he supports a "strong dollar". The other leaders also prefer a strong dollar (as unrealistic as it is), insofar as a strong dollar protects their precious export market. Well, as the U.S. debt grows ever greater, the debt burden at some point shifts, as Keynes' quote states. As it expands further into the stratosphere, the debt owed by the U.S. changes from being a U.S. burden to being used as a threat or a weapon. At the G8, it seems, a plan involving "mutual advantage" is being sought between the debtor (U.S.) and the creditor (exporting nations), for the presumed benefit of both sides. This is the exact type of arrangement between debtor/creditor that follows from bankruptcy.
On the Financial Sense Newshour (5/31), Jim Puplava and David Morgan discussed the Fed's considering imposing a "carry tax" on dollars that are "held" rather than "spent". Morgan went on to describe how that's the type of spending behavior that follows with the loss of purchasing power. Years ago (sometime after 8/15/71), the U.S. was described as being bankrupt. Nobody at the G8 dared use that term. But if one connects the various dots that get uncovered from time to time, a not-so-wholesome economic picture emerges quite clearly. As it is so aptly said, "interesting times".

Goldilox

(06/02/2003; 20:23:35 MDT - Msg ID: 103996)

Another opinion on the FCC decision to relax media ownership limits

http://www.guardian.co.uk/comment/story/0,3604,968375,00.html"Now Dissent is Immoral", Gary Younge, The Guargian, 6/2/03

snippit:

Where America does differ (from the UK) is in the nature of [the media] industry and the war it is engaged in. The American media industry is dominated by just a few companies. AOL Time Warner, to name but one example, owns among many other things, Time magazine, Fortune, Life, Sports Illustrated, CNN, Comedy Central, Warner Brothers Pictures and Black Entertainment Television.

With the the Federal Communications Commission, under Michael Powell (son of Secretary of State Colin Powell), set to relax ownership rules later this month [today, in fact], this consolidation and the lack of choice that goes with it will get worse before it gets better. And with a war that is endless against a foe that is stateless (terror has no nationality), invisible (it could be anyone) and ubiquitous (they could be anywhere), the potential for these media distortions to become both pervasive and permanent is very real indeed.

Goldilox:

Certainly a more perilous warning about the media trend than the CNN post, but I would expect no less from the Guardian. However, if we allow dissent to be "demonized", gold ownership may come face-to-face with a desperate battle to save the FIAT currency. Anyone owning gold who is not on the "PTB A-Team" could be easily labeled "enemies of the $institution." I saw an article about Buffett and Soros last week entitled "Short Selling is not Treason". The idea that this even needs to be published is discomforting.

Perhaps I am sounding alarmist, but the latest erosions of the Bill of Rights also have some very strong historical analogues, some only a single generation past.

Gold, get you some and bury it deep!

Dollar Bill

(06/02/2003; 20:24:06 MDT - Msg ID: 103997)

*>*

Greetings Aristotle,
I have another post for you, but this one is about this comment in the post below.

"the international governments and CBs of the world may adopt a policy shift whereby "enough is enough!" and they abandon their longtime support of U.S. "deficits without tears" by allowing those excess trade dollars to either bid directly for domestic currency on the forex markets of the world, or else bid for Gold in the event that the CBs would like to increase their own money supply while bolstering their reserves with non-national type assets"

Isnt it a key issue for a country to work for a lower currency for trade reasons?
How to replace the US as deficeit nation? If the US does not play this role, how do all the various nations handle
thier imbalances? The asian idea floated here today sounds
minor league because the main trade beween those nations is with the US. I am looking for a bridge to another way, but
I cannot see it.
Taking down the US is not the answer, I am guessing that some joint CB agreement to share the ponzi scheme is the only way to avoid global depression.

Chirac is low on details on how to make this "multipolar world". MK has on his site a quote from DeGaulle, 1965.
Nice idea, but like Chirac, low on details on how to make it work.
No one here or elsewhere ever mentions that the strong dollar policy is not criticized when Bush mentions it now or earlier. The other nations prefer it.
They are happy that the US plays deficeit nation for the global benefit. They are ok that the US gets itself into
fantastic levels of debt. By that I mean that it has been to thier advantage also.
What is Chirac thinking? The US should play strong dollar till the EU can take over and stick it to the US?
And then the EU can run up thier own deficeits till the Chinese take over?
MK says he thinks the very top guys are cooperateing.
Above chirac/bush levels.
That would get me again thinking that the future path is
cooperative CB embrace of the infinite debt world where CB's will pour money as they see fit.

If not that, then a much uglier world system. A system that no one is articulating yet but they are trying. This multipolar mush.

just guessing.

Goldilox

(06/02/2003; 20:52:05 MDT - Msg ID: 103998)

Strong Dollar

@Dollar Bill and ARI:

I think I agree in principle with what you are saying. given the cross border nature of manufacturing trade (systems made of sub-systems, made of parts, made of componentry, etc.). A large manufactured article (like a vehicle) has origins in many countries. The more imbalanced (volatile) currency exchanges are, the greater the difficulty for both parties to conduct the many transactions necessary to complete the manufacture and sale of the finished goods. i.e., even a company as American as Harley-Davidson is buying engine technology from Porsche. There are few industries that are not multi-national in today's market
place.

It seems too simplistic to pick an outright winner in the manufacturing arena based on currency exchange. The oposite side of this is that customers face the reverse challenge of manufacturers in that they must buy goods at an inverse exchange imbalance to the sale. Countries exporting natural resources have a less complex algorithm of exchange to deal with, except that they often depend on customers for the technology to deliver the resource, so it is not completely unilateral.

In summary, currency exchange imbalances alone do not hinder trade as much as currency volitility, and trade imbalance eventually affects volitility, as we are currently witnessing. The biggest battle I see is not about exchange rates, but more about exchange reserves. The US dollar has been hugely proliferated as a result of being the world's reserve currency. Loss of that status means a glut of $$ in the marketplace as some international communities decide to change their preference for type of reserves. Herein lies a large impetus for more volitility.

Dollar Bill

(06/02/2003; 21:29:39 MDT - Msg ID: 103999)

*>*

Thanks for that sharp insight Goldilox.
I was thinking as I walked the dog, if the Euro actually had a decent gold backing, todays posts indicate otherwise,
The slogan on thier fiat could be "In Gold We Trust"

Wouldnt a more gold system quickly work to the advantage of China?

If the EU did go the route of a gold tie in, wouldnt those dollars awash in the system, includeing all the more that the fed could just print up electronically in a second, just make mincemeat out of that effort on day one?
Arent we stuck?
Married to the buck?
Till death do we........and all that?
Dreams of multipolar divorce court will just make us all poorer?
Arent the Arabs, and Persians, (iran), stuck also?
Their countries are big welfare states. A global depression will wack them hard.
The threat of disturbing the system will probably keep all the players in line.
mahathir and others bleating about whats "fair" or whats
"muslim" will be on the sidelines while the big players
basically get back in line.
Politicians in russia, france, germany may grouse and stir up agitation for change, but the Central Bankers will
probably not want instability. Will not take any big leaps
out of the present system.
I am guessing that the real big currency flows are heavily controlled or able to be controlled when needed.
Again, just guessing.

Aristotle

(06/02/2003; 21:43:00 MDT - Msg ID: 104000)

Thoughts for Dollar Bill

"Isn't it a key issue for a country to work for a lower currency for trade reasons?"

Thanks for posing the inquiry.

On your foremost point, "isn't it a key issue for a country to work for a lower currency for trade reasons?" the response I would offer is this -- sounds about right, !!BUT!! not carved in stone!

It is a political reality that governments find great comfort in a fully employed citizenry. This is true even at the cost to national welfare of spoiling the population's savings (through beggar-thy-neighbor type currency depreciation.) But there's a political limit (citizen tolerance) to the acceptible level cost incurred. That's to say, a trade advantage to support full employment through currency depreciation will not be tolerated or politically acceptible to the degree where the lost purchasing power effectively impoverishes the population. If many citizens are unemployed they are likely to riot (vote officials out of office) because they have no purchasing power (in the form of income;) and by a similar stroke of the brush even the fully employed are likely to fuss if their currency noticeably collapes and their savings and salaries lose significant purchasing power. Think Asian Contagion or Argentina on that one.

Ultimately, the various governmental monetary authorities must strike a fine balance between exporting their nation's goods and their race to the bottom regarding currency valuation.

Further evidence that your hypothesis isn't completely accurate can be found in a few examples to the contrary. Certainly, it can be argued that the United States was not among the *universal* list of all countries seeking a lower currency. Before it structurally failed in its effort a year and a half ago, Argentina tried to halt its long trending currency decline by pegging for a whole decade to the U.S. dollar. How about the Hong Kong dollar peg as another example to halt a race to the bottom? And hey!, how about all those wily European dudes who valiantly defended various exchange rate mechanisms among each other until finally forming a currency union in the form of the modern euro? Not *every* nation, apparently, thinks low and lower is the short path to righteousness. Think, therefore, we can chalk up some of that perception of yours as coming from observations and residue of a complex international league of semi-independents all struggling together to learn and evolve out of infancy? That's my shorthand explanation for that bit of "conventional wisdom" folklore.

When you then pose this question:

"How to replace the US as deficit nation? If the US does not play this role, how do all the various nations handle their imbalances?"

it naturally leads me to this following response.

For every nation to complacently continue exporting net wealth for the primary benefit of the United States seems to me to be the most unnatural state of affairs. And yet, if you can tacitly accept the U.S. as a national example of chronic imbalance (deficit) why can't you as easily accept an international move toward a more level playing field in which the imbalances among all the world's nations may shift around from temporal supply to deficit? Implement a new system where you set physical Gold at the center of the international reserve structure and you'll take a huge step toward eliminating the longtime exorbitant privilege held by the U.S.

Why is that proposed *strange* new world order any harder to swallow than what we actually witnessed over the past thirty years (++) with U.S. dollar hegemony?

The world *does* go 'round and 'round...

Gold. Get you some. --- Aristotle

Black Blade

(06/02/2003; 21:46:52 MDT - Msg ID: 104001)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Snippit:

The Carry Tax Cometh?

Not to worry. The Fed is also considering unconventional means if money velocity shrinks. Fed senior vice president Marvin Goodfriend of the Richmond Federal Reserve branch first proposed a study of implementing a "carry tax." This tax would be imposed on cash if consumers don't spend the money as fast as the government wants it to. Essentially this tax would be designed to eliminate the problem of zero-bound interest rates. The tax would lower the value of the currency the longer it is held without making a transaction. In effect, it becomes a negative interest rate, which punishes cash holders for preferring to hold on to their cash. It would be designed to eliminate the Japanese problem where consumers and investors have preferred to hold on to cash as their assets deflated in the stock and real estate markets.

In my opinion, besides the constitutional problems this would present, it would most assuredly backfire. As the government continues to depreciate the currency, implementing a carry tax would force investors and savers into "things" as they see the value of their assets depreciate such as paper assets and real estate and the value of things they need go up in costs. People would simply put their money into "things" and avoid paper. The most valuable asset under these conditions would be the only real money that has ever existed throughout history: silver and gold.

We may soon be revisiting history as the alchemist take us back to the days of John Law, something I never thought I would see. However, it looks even more likely in the days ahead more of which will be written about in the future.

Black Blade: Unconventional methods to stave off the coming financial disaster. This is "interesting" reading in tonight's article. Definitely worth reading! We already know that the Fed is desperate after 12 rate cuts that did absolutely nothing and the problems just pile up. This debt ridden nation is fast approaching the end of the line and if foreign investors bail, then the dollar craps out, while on the other hand as debt piles up and if US investors bail, then the dollar craps out. Quite a catch-22 we got here. The Fed is outta bullets and all that's really left is to push for rapid massive inflation but even that is a hard pill to swallow. "Interesting Times" indeed!

Dollar Bill

(06/02/2003; 21:56:12 MDT - Msg ID: 104002)

*>*

Aristotle,
Hate to make an email type post, give me couple days to respond, have to mull.

Black Blade

(06/02/2003; 22:02:39 MDT - Msg ID: 104003)

Rising retail inventories create headaches

http://www.kansascity.com/mld/kansascitystar/business/5970526.htm
With below normal temperatures and the war in Iraq stifling consumer demand, retailers are saddled with an oversupply of merchandise.

Snippit:

Discounts will be perhaps most generous in apparel, where inventory growth -- up 8 percent -- was higher than a 2.9 percent sales gain in the first quarter, according to Slater's estimates. That marks the first time in at least a decade that inventory growth is higher than sales growth in apparel, he said. The inventory buildup is extending to other areas including electronics and home furnishings, said Frank Badillo, senior retail economist at Retail Forward, a consulting firm in Columbus, Ohio. In March, it took 1.6 months to sell merchandise overall, up from 1.54 months a year earlier and continuing a pattern of inventory buildup since last October, according to the Commerce Department.

Black Blade: Consumers are tapped out and not spending � who can blame them? People are worried about jobs and the economy. Costs are rising and necessities come first, and many now find themselves stuck deep in debt and are struggling to meet obligations after years of spending like drunken sailors. To make matters worse many have mortgaged their future by risking the family home to keep spending. It's going to get very ugly. As always, get out of debt and stay out of debt, stash enough emergency cash for several months� expenses, accumulate Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program.

Black Blade

(06/02/2003; 22:15:48 MDT - Msg ID: 104004)

Postwar oil prices flowing higher than analysts predicted

http://www.canada.com/search/story.aspx?id=cb95f1c5-b42c-40b3-a899-55df659ec296
Lower exploration levels partly to blame

Snippit:

What happened to the widely-predicted post-Iraq slump in crude oil prices? Back in early March, before the launch of the U.S.-led campaign to topple Saddam Hussein, oil prices rocketed to $37-$38 (U.S.) a barrel. Everyone knew those lofty prices weren't sustainable, and the flat performance of many energy stocks reflected that. Most analysts predicted crude oil prices would quickly fall to $23-$24 a barrel once the war ended. Some said prices could slump all the way to $18.

Boy, were they wrong.

Falling U.S. crude oil inventories and recent terrorist attacks in Saudi Arabia are two factors behind the latest run-up. Now, with the peak summer driving season already underway, some say oil prices could cling to the $30 level for months to come. Meanwhile, North American natural gas prices have stayed strong, closing Friday at $6.25 per MMBtu (million British thermal units) on NYMEX, $1 above the level of early May. Gas storage levels remain low and some analysts predict North American production capacity will drop this year, setting the stage for another price spike next winter.

Certainly the energy analysts at Merrill Lynch are convinced that the era of cheap oil is finished. In a 40-page report issued last Thursday, Merrill Lynch says major energy stocks are poised for their best run since the 1970s. Merrill Lynch is forecasting an average oil price of $28.50 a barrel for 2003 and a "normalized" price of $24 a barrel for 2004. "While there is a lot of noise as to why oil prices should eventually decline to $20 per barrel, the cold hard facts and analysis suggest that the normalized oil price is moving higher, not lower," Merrill Lynch says. At the same time, the number of geologists and other technical personnel in the upstream end of the business has plunged by half since 1982. So even though oil producers are awash in cash, they won't have the ability to quickly ramp up exploration and development, the report says.

Black Blade: yeah, I know and I am not one bit surprised either. ;-)

Black Blade

(06/02/2003; 23:09:55 MDT - Msg ID: 104005)

The Nation's Next Energy Crisis Won't Be At Corner Gas Station

http://story.news.yahoo.com/news?tmpl=story&cid=1471&ncid=749&e=5&u=/ibd/20030602/bs_ibd_ibd/200362general
Snippit:

In the 1990s, natural gas was hailed as the growth fuel of the future. It was relatively cheap, burned cleanly and polluted less. Power plants that used the fuel were easy to build with reliable construction schedules. But it's become apparent that the early hosannas extolling the wonders of natural gas were overblown. Prices are now about $6 per million British thermal units (Btus), up from an average price of $2 in the 1990s. On May 21, Federal Reserve Chairman Alan Greenspan called attention to the problem in his testimony before Congress. "I'm quite surprised at how little attention the natural gas problem has been getting," Greenspan said. He went on to describe the issue as "very serious." Greenspan noted that, in addition to electricity generation, industry has found "myriad new uses for natural gas."

Even before Greenspan's comments, there were warnings from industrial users of natural gas, like the American Chemistry Council, which in February called on the government to take immediate measures to avoid a supply crisis. And in May, Energy Secretary Spencer Abraham called for a national summit. Greenspan said the reasons for the tight supplies were a "colder-than-average winter," the country's "limited capacity to import liquefied natural gas" and the failure of increased drilling to raise production. Greenspan also remarked on the contradictory federal policy toward natural gas. "If on the one hand we have encouraged, as we have, very significant growth in domestic demand for natural gas - but are very readily constrained by our ability to increase supply - then something has got to give, and what is giving, of course, is price," he said.

Said Jewell: "What he meant by that is that federal policy encourages consumption of natural gas, particularly in the electric power sector. At the same time, federal policy becomes more restrictive and more limiting as to where we can drill for natural gas." While the number of rigs drilling for natural gas has grown - tripling over the last 15 years - production has remained level since 1994 at about 19 tcf a year. There are places in the U.S. to get more gas - off the coasts of California and Florida and in areas of the Rocky Mountains - but they're off-limits, Jewell says. It's not just federal policy, he said, "It's state policy and concerns of the public that are limiting the areas we can drill." The natural gas industry's failure to meet demand is "not necessarily for a lack of effort," Jewell said. "They do drill more. The technology is improving. But it seems they're running faster and harder and making no progress."

Black Blade: A fairly good article that cuts to the chase and outlines the current NatGas supply problem. Even if we are somehow lucky enough to squeak by this year, the long term problem remains that there are simply not enough drill rigs in existence, land access remain a delicate issue, permitting is often too slow to prevent repeated crises, and infrastructure is woefully inadequate to get supply to where it's needed. This year will likely be just the first of many with low NatGas supply while demand continues to grow.

Bull Moose

(06/02/2003; 23:40:27 MDT - Msg ID: 104006)

Oil & Gas Personnel

Merrill Lynch says 50% of seasoned personnel have left the Oil industry since 1982. That figure is absurdly low. As one of those seasoned persons, I know that since 1986 the people I knew in the industry has dwindled to less than 25%. These are the people with many years of experience like my self that have permanently left the industry. You cannot ramp up exploration quickly without those people who have the hands on experience. There is no body of memory and experience to avoid trouble and know where the secrets of the underground lay hidden. It takes years to develop that kind of experience and body of memory.

Belgian

(06/03/2003; 01:09:58 MDT - Msg ID: 104007)

FREE GOLD

@ Rich : Euroland's goldreserves (ECB+National banks) versus their dollarreserves :
The bulk of those dollar-reserves will have to be written off as none of these mega-piles of dollars can possibly be exchanged for goods ! We don't need those dollarreserves anymore, because we have our own euroreserve NOW !
The euro-project want to see a compensation for the total loss on these accumulated dollarreserves. That compensation is the permanent Gold-Revaluation, only possible when the old dollar papergoldmarket dies and is replaced with the Free Physical euro Goldmarket.

Euroland's goldreserves valued in euro (rising in price) and compensating for US$-reserves, booked at zero purchasing capacity.

A Free Goldmarket means that "Physical" trade of Gold will almost totally replace the dollar-paper-goldcontract-market wich has been containing Gold, up until now !
Individuals, corporations and nation states will consolidate their "wealth" (surplusses) in Physical Gold in possession as a temporary store of wealth. When you need fiat, just sell your (taxed) physical Gold on the Free euro Goldmarket for euro and settle your trade with it.

The whole world is going to like this ! The dollar-reserve out and Physical Gold in.

@ Ray Patten : Yes Sir, ALL small fish do get their Physical Gold in Possession, within 3 days ! This tiny amount of Physical (investment-Wealth) Bullion is guaranteed for each and every individual that desires to hold it. To make this possible, Gold Possession should NOT be promoted (not even suggested) for the time being !!!
This attitude will change 180� as soon as a euro-Free Goldmarket is in place after the funeral of the present dollar-paper-goldmarket.

@ ALL : I would like to learn "why" there is almost zero interest, on this forum, in what a "Free Goldmarket" could mean ? TIA.

Aristotle

(06/03/2003; 02:36:45 MDT - Msg ID: 104008)

Some "why" guesses of my own for Belgian

I think one of the reasons is perhaps relatively few people understand the concept. I don't mean to come across with an "us" and "them" vibe, but lets face it -- I've noticed a whole lotta "them" passing through have said they found FOA's Gold Trail to be cryptic. A sign that they don't/can't yet quite grasp the concept of Free Gold as a full-bodied property.

Howzabout the subset group of "them" that are actually belligerent about it all and suggest that FOA has been purposefully and unnecessarily cryptic. ha HA! Truth is, FOA laid out the whole *WHOLE* thing, and frankly, I think he was as clear as was humanly possible. That group of "them" is the most hopeless because they don't even begin to appreciate how truly complex the *whole* subject is, trying to blame their own shortcoming as if it were the fault of another. They don't even try to come up to speed.

Then there's the group that can't fathom that a market's low current price for something (relative to all other things) might not even closely portray that item's relative value seen at a later point in time. Poisonous plutonium to a man with a stone age mind will always be priced worthless when he can't fathom a new age of nuclear energy.

Of course, there's always that group of addicts playing their leveraged games who reject any and all visions of a world where they can't get their gambling fix from the paper world of Gold fakery or where bankrupted counterparty majorities deny them (the minority) their longfought jackpot.

Then there's probably a final set of silent people around here who do understand Free Gold, but are probably reluctant to allow themselves to accept that they (yes, "hapless little ol' them") may indeed be on the threshold of a once-in-a-lifetime achievement in wealth transfer. Too heady and too scary to even imagine! How many dare not whisper to the night, "What if I, too, were suddenly wealthy?!!" for fear that they will once again, and always, wake up to face the same poor and disappointed soul in the morning mirror? Better to leave the "wild dreaming" to other less practical men.

Like you, I'd like to see this latter group put their scepticism aside and try to paint us a picture of their own little corner of the world as seen through the lens of an in-place-and-fully-functioning Free Gold market. What would change? What would stay the same? Would you be able to cope with the change?

Good questions for everyone to allow themselves to ponder aloud for mutual enlightenment.

Gold. Get you some. --- Aristotle

Belgian

(06/03/2003; 02:52:25 MDT - Msg ID: 104009)

LBMA - conference - Lisbon Portugal

I do like the "outspoken" - "blatant" - "demonstrative" - "public" , ABSOLUTE negativism on Gold's future, expressed/organized by LBMA in particular ! How perfect it is !

Yep, a gold...PAPER gold conference exactly in a country (Portugal) that brags with its goldreserve sales, present (90 tonnes) and future (560 tonnes) !!! Perfect ! Sickening perfect !

Papergold feels, sees, experiences...the "glowing" breath of physical gold-accumulation, worldwide ! Clown on duty is Kazakstan. Ridicule Gold, further, in a subtle way...anyway...if you can gentlemens !?

And BTW, promote some more creative book-keeping at IBM and other Big blue peers and shout Allelujha for that dollar-carry tax idea ! Why not !

GOLDSALES PERCEPTIONS must remain the one and only aspect of Gold that must reach the general public. *Impregnate* those nasty'stubborn, gold-advocates with the total insignificance of Gold. That's the main message, dearest forumers. Never, ever is asked *WHY* that ECB-thing overthere is marking its goldreserves to market...NEVER !
Don't you think this is "strange" ???

Topaz

(06/03/2003; 03:07:38 MDT - Msg ID: 104010)

Index trend reversal?

http://customer1.barchart.com/custom/stocks/0712.htmWhen "heavies" such as Soros etal start bad mouthing the Dollar, all good contrarians should prick up their ears.

The real and present danger of a stronger $Cash at these IR levels is that holding Cash is "more" riskless than paying $119 for the promise of getting $100 back in (say) 20 Yrs plus a pissant 1% PA...with carry protection!

Be aware that the true definition of cronic Deflation is that your CASH Today buys MORE in 12 Mths...more everything.

Someone mentioned the Dollar "lease-rate"...lets extrapolate a bit...We could also recommend Physical "Dollars" in Possession. Amazingly all the reasons, almost;-) for holding Gold close at hand can also apply to Cash at present... imho of course.

Black Blade

(06/03/2003; 03:24:50 MDT - Msg ID: 104011)

U.S. Jobs Report Overhaul to Boost Accuracy

http://www.reuters.com/newsArticle.jhtml;jsessionid=KJEVCC04THAKMCRBAE0CFEY?type=reutersEdge&storyID=2864982
Snippit:

WASHINGTON (Reuters) - Statisticians at the U.S. Labor Department have been briefing economists for months on the looming overhaul of the jobless report, but deciphering the vital numbers come Friday morning will still be a tall order. The Bureau of Labor Statistics will unveil four changes to its closely watched payrolls report for May, incorporating a new industry classification system, the final phase-in of a new sampling method, updated seasonal adjustments and changes to the way government jobs are counted.

Black Blade: New ways to "cook the books" unveiled this Friday when May jobless data comes out.

Belgian

(06/03/2003; 03:38:31 MDT - Msg ID: 104012)

THANK YOU ARISTOTLES !

Nice to find your answer that I secretly was expecting. Not as a confirmation for the inevitable future Free Gold, but rather as an encouragement to keep posting as to provoke "mutual enlightment" ! Because, sometimes...I get that funny feeling of being the only Golden lunatic overhere and elsewhere.

In my rather ridicule naivety, I can't understand WHY many amongst us and others, simply turn away from analysing/interpreting, the most clear and public Gold-Facts (WAG-ECB's marking to market-CB goldsales-LBMA statistics-etc...) ? Are they afraid of even suggesting another, reworked, Gold-era ? What is so ridicule about Gold ? What is so fantastic about paper that keeps on deluding us all ?

So many people don't realize that they *own*...OWN, very, very little in fact ! Their house is not even their property in possession but the majority is only renting (leasing) it from their banks ! The bulk of stocks are letting you down, at the time when you mostly need them.
Your currency loses purchasing power, rapidly, when hard times are there. Now even bonds at zero compensation and issued in a confetti-thing that continues to lose purchasing power (70% > 90% > 99,999 %).

How can one possibly doubt about the introduction of a Free Goldmarket under these detoriating circumstances. Most if not ALL remain in denial on the gravity of the situation (and future) or flatly discard such an idea/observation as impossible, due to the fact that we seemingly have overcome all past problems. Linear thinking !

Thanks Ari and goodnight !

Topaz

(06/03/2003; 04:13:16 MDT - Msg ID: 104013)

Hey Belgian...

Ah, FreeGold...a good thought for the future, it's the getting there thats fun to watch eh?
I think in the eventual, freegold trading will prove to be as oxymoronic as Dollar value... and the World will see a repeat of the Roman experience where Gold movement will come to a grinding halt...at many multiples of todays price I might add.
For mine I don't care if Gold meanders for another couple of Years, I already have "enough"...and "MY" timeline has a little left in it yet. Don't sell our fellow posters/lurkers too short Sir Ari, Rest assured "them" I'm sure, have acquired as much as their understanding allows.

Without an Oil/Dinar move or similar, it may well be quite some time to Freegold...but then again, it could be TODAY!

Socrates964

(06/03/2003; 04:42:13 MDT - Msg ID: 104014)

Gold Leasing

Gentlemen, thank you for your comments:

Rich/Goldilox - agreed, the mechanism is a kind of gold carry trade.

Ari - I always respect your comments on the gold market. What I don't respect is your supercilious dismissal of other posters. Anyway, water under the bridge.

I agree that central banks can hold US treasuries and related assets or release currency into markets. The point I was trying to make can be summarized in the word deception.

Most posters seem to incline to the view that the dollar and the euro are in a currency war - so what would be the actual mechanisms used in this war?

I have commented ad nauseam on the US policy side - i.e. that the economic corollary of US right wing foreign policy declarations is a weak dollar, in so far as the dollar has a natural tendency to decline over time against other currencies and gold/commodities because of excess dollar creation.

US monetary authorities are trying to turn weakness into political strength by accelerating the decline in the dollar so as to blackmail other rival central banks/governments with a 'if we go, we'll take you all with us' kind of threat.

Some posters here believe that this is actually the gospel truth. My own view is that it is largely US propaganda since a) other countries had no qualms about dumping the dollar and living with strong currencies as a response to US intransigence on monetary policy in the early 1970s, b) I don't believe that the US can hold down key commodity prices (mainly oil) and given ageing electorates in Europe, the political trade off between stable commodity prices through currency appreciation and reduced demand for exports weighs in favor of the former rather than the latter.

Anyway, what I'm trying to get at is how other central banks respond to this kind of pressure, since their foreign currency reserves (recorded as an asset) are essentially a loan to the US that is going bad by degrees.

Consider the following. Let's imagine that Schroeder et al. have decided that it is a national priority to bail out Commerzbank. The Bundesbank has to foot the bill willy-nilly. Instead of giving it a loan in euros, the Bundesbank lends it US treasuries which Commerzbank dumps in the market for Euros. As with gold leasing, the leasing contract may be rolled over ad infinitum, and just as the gold has gone for ever, the Treasuries may never return to the Bundesbank's vaults - it merely depends on the repayment clauses in the contract. Let's assume, for the sake of argument that Commerzbank returns the bonds on maturity.

How did the Central Bank benefit? It will evidently take a hefty write-down on these treasuries in euro terms due to the ongoing depreciation of the dollar. It nevertheless benefits more than it would by simply sitting on the instruments in so far as it is able to use these reserves to finance a bail out of a domestic company (which it would have to do anyway) rather than issuing extra euros. There is probably a compensating currency profit on its euro holdings as Commerzbank will drive up the value of the euro in order to realise its credit. In addition, the Central Bank can maintain the appearance of currency reserves in the same way that a central bank that leases gold can claim that a few paper IOUs are 'gold-related instruments'.

Thus, I agree this is just a gold carry trade under a different name. My point was to highlight the fact that just as gold leasing involves deception, a similar mechanism could be used by central banks to liquefy their dollar reserves while maintaining the fa�ade that they are still in the vaults. This was the idea. I merely wonder if this is possible on a large scale.

Topaz

(06/03/2003; 05:13:30 MDT - Msg ID: 104015)

Watch Buck Jump!

http://quotes.ino.com/chart/?s=NYBOT_DXY0Take a look how ino saw the DX spike Monday...woooo!

Belgian

(06/03/2003; 05:43:42 MDT - Msg ID: 104016)

Re:

@ Topazzie : Freegold timing : Yes, indeed Sir...it could happen this afternoon !? All other major changes had NO pr�set dates. They just happened overnight !
W're left with the more reasonable question of "Are we close" or better even "How close are we" ? My take is rather simple : If and when the euro shoots throught the 1,40 against the dollar...we must be pretty close. Why ?
IMO, this indicates that the euro is ready to take over the reserve function from the dollar. At this point, the dollar is going to let hyperinflation come and have its full run.
Will see of course.

@ Socrates : ...dumping dollars for euro...(or better, Gold) ...
Who possibly wants dollars for euro in the present picture ?
To who does one sell a losing-dollar...? Certainly NOT to the holder of a euro-winner !? I am NOT accepting dollars for my Gold and euro !

Yes, in the early stages of an unsuspicious dollar-decline, you might find a party that wants to unload some Gold or euro...But not in the present environment where the contrast between euro and dollar becomes more obvious.

There are much too many dollars out there to have them exchanged for euro or Gold or any other valuable tangible !!!!!!!!!!!!!!!!

First we have the decline in dollar exchange rate...than comes the decline in dollar purchasing power...than nobody, outside America, wants to hold any dollar anymore...than we have dollar-capital flights !

To avoid this infernal dollar-spiral, we all keep on supporting the dollar up until one particular faction stops its support, immediately followed by the less powerfull allies of that faction jumping on the (euro) wagon.

BTW, German banks are supported by taking out the problematic parts and stored into a seperate governmental idendity.

But we are not yet on the culmination point. We still firmly believe (whieuuuwwww), the global economy, still possesses the capability for genuine revival ( sufficient growth-potential) ! That's *why* we (more hesistantly) keep on supporting the dollar exchange rate as to not slipslide into the above mentionned negative spiral. Will this political will still be there at �-$ = 1,40 ?

WAC (Wide Awake Club)

(06/03/2003; 06:30:48 MDT - Msg ID: 104017)

Timing - Second Coming

It's just like the Second Coming. No man knows the day or the hour. Just make sure you are ever ready.!!

misetich

(06/03/2003; 06:47:20 MDT - Msg ID: 104018)

Market Insight: If all else fails - try plan B

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054416338597&p=1012571727088Snip:

Plan B. That is the term that Dresdner Kleinwort Wasserstein strategists have been using for some time to describe the "unconventional" policy measures that might emerge from the US Federal Reserve.

The idea is that the Fed is running into the same dilemma that the Bank of Japan faced in the 1990s and still today. Interest rates are approaching zero (US rates are currently 1.25 per cent). There is little room left to cut.
..............
One possibility would be for the Fed to try to control longer term interest rates, by making purchases in the bond market. At its very simplest, they could "print money" to buy bonds, thereby injecting liquidity into the economy. Lower bond yields might also encourage the corporate sector to borrow and invest more, particularly if the Fed set an explicit target for the yield level (eg 3 per cent and no higher).
*********
Misetich

Plan B? - This chaps are way behind - its more like plan U, or V going down the alphabet - IR have been lowered 11 times, tax cuts, reliquification, auto incentives, government spending etc etc

All desperate plans lead to owning PHYSICAL GOLD

All On Board The Gold Bull Express

Dollar Bill

(06/03/2003; 07:12:12 MDT - Msg ID: 104019)

*>*

Greetings Sir Belgian,
you said; "Because, sometimes...I get that funny feeling of being the only Golden lunatic overhere and elsewhere."
..I actually did think yesterday that this IS a gold forum, and I was glad you kept up the drumbeat. I didnt name myself "dollar bill". Forum folks did that. I am not complaining mind you :)
Next time at a breakfast restaurant, I will have a Belgian waffle in your honor.

Topaz

(06/03/2003; 07:28:49 MDT - Msg ID: 104020)

FreeGold

Topaz (06/03/25) 0745MT usagold message No 1978492346
Link: www.silverbank.com/hedgespotdeferred/
Well, as no-one has posted for three weeks now I thought I'd bring to the Table's attention a snippet of information that MAY see a turn for the better.
OREC today announced they are going to trade Rice on the Global market on a Ton for Ton basis with Gold (Good news Huh?) They stopped short of giving a guarantee that all that GM Rice in storage wouldn't be traded though ;-(...better than nothing!
Supply shortages persist locally it seems, my monthly 500KG order took 3 Days to deliver and the freight cost more than the Gold.. sheesh!
The link shows where we can all profit by taking a covered call on the contango Spot Ag - Colloidal - Dec 33 contract...I'm profiting every month with this one, applying methods gleaned from those wise posters who used to trade the Metals back around the turn of the Century...what a pity Gold didn't coat-tail silver back then, we'd ALL be rich...like Rich.
Haven't heard of Gandalf the Bald or Bludgeon for a while, I'm hoping they didn't succumb to Mad-Cars disease. If memory serves GtB was having his Dogs put down this week...sad times!
Thats all to report fellow Goldhearts, if the Rice deal falls through we well may see FreeGold in our lifetime eh?

mas

(06/03/2003; 07:34:51 MDT - Msg ID: 104021)

Belgian

In response to your point, NO. 1=1.40 life moves on.
We need to understand who is doing what to who? The dallar is a mess but the world economy needs to move on, if they can't pay their bills then ask for cash (Euros) on delivery. Easy isn't it? No credit!
The 40 b (per month) deficit is gone tomorrow. Exchange dallars to euro's at port, and then see how everybody feels....
Got gold?

Zhisheng

(06/03/2003; 07:42:13 MDT - Msg ID: 104022)

Gold this Morning.

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sExcept for its volitility, characteristic of late, the yellow metal is doing quite well this morning in view of the dollar mini-rally.

Cavan Man

(06/03/2003; 07:49:07 MDT - Msg ID: 104023)

Good for AU

(Wake up call ***AGAIN***for republicans and conservatives)Ex-Army boss: Pentagon won't admit reality in Iraq
By Dave Moniz, USA TODAY
WASHINGTON � The former civilian head of the Army said Monday it is time for the Pentagon to admit that the military is in for a long occupation of Iraq that will require a major commitment of American troops.
Former Army secretary Thomas White said in an interview that senior Defense officials "are unwilling to come to grips" with the scale of the postwar U.S. obligation in Iraq. The Pentagon has about 150,000 troops in Iraq and recently announced that the Army's 3rd Infantry Division's stay there has been extended indefinitely.

"This is not what they were selling (before the war)," White said, describing how senior Defense officials downplayed the need for a large occupation force. "It's almost a question of people not wanting to 'fess up to the notion that we will be there a long time and they might have to set up a rotation and sustain it for the long term."

The interview was White's first since leaving the Pentagon in May after a series of public feuds with Defense Secretary Donald Rumsfeld led to his firing.

Rumsfeld and Deputy Defense Secretary Paul Wolfowitz criticized the Army's chief of staff, Gen. Eric Shinseki, after Shinseki told Congress in February that the occupation could require "several hundred thousand troops." Wolfowitz called Shinseki's estimate "wildly off the mark."

Rumsfeld was furious with White when the Army secretary agreed with Shinseki.

Last month, Rumsfeld said the United States would remain in Iraq as "long as it takes." But the Defense chief was not specific about the size of the force.

USAGOLD / Centennial Precious Metals, Inc.

(06/03/2003; 08:02:20 MDT - Msg ID: 104024)

Tracking the dollar: Would you invest in a stock that graphed like this?

purchasing power

Would you invest in a stock that graphed like this?

Probably not. But that is precisely what you have done if you own
stocks, bonds, cds, money markets or anything denominated in U.S.
dollars.

Sooner or later gold is going to react strongly to this simple dynamic:

The dollar has been continuously devalued without stop for the past 57 years. It has
not appreciated against goods and services once -- not even once -- in that entire time period.
There are periods when this policy has not been fully reflected in the price of gold.

Is "Now" one of them? "Is Now the Right Time for Gold?"

If you've received your initial information packet from us, you qualify to
receive this important report FREE OF CHARGE.

Please call 800-869-5115 if you would like us to send it to you --

Contact:

George Cooper Ext 102

Jonathan Kosares Ext 110

Marie Ballard Ext 106

We look forward to your inquiry.

USAGOLD / Centennial Precious Metals, Inc.

(06/03/2003; 08:09:49 MDT - Msg ID: 104025)

Take a lesson from the ages -- a well-chosen treasure is one that does not go out of style

http://www.usagold.com/gold-coins.html

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

-- R. Strauss

Socrates964

(06/03/2003; 08:13:43 MDT - Msg ID: 104026)

Belgian

"@ Socrates : ...dumping dollars for euro...(or better, Gold) ...
Who possibly wants dollars for euro in the present picture ?
To who does one sell a losing-dollar...? Certainly NOT to the holder of a euro-winner !? I am NOT accepting dollars for my Gold and euro !"

In a phrase - the US Treasury and the Japanese.

If the US wants to maintain the dollar as a reserve currency, it has to make a liquid market in dollar instruments. That means monetizing US treasuries. Hence if our hypothetical European bank were to sell through a proxy, I can't see how the US Treasury could fail to 'make a market'. As soon as it does, the whole $ game is over and the US has defaulted (actually I see this as a possibility, but only after the Neocons have had their fun - they then hand over the White House to a reforming Democrat who then goes down in history as the President who refused to honor the dollar).

I also expect the US authorities to be aided by the Japanese. In a previous post, I mentioned the hypothesis that the Japanese offer a quid pro quo policy 'buy our exports and we invest the trade surplus in your bond markets'. My hunch is that the Chinese have worked this one out and have realised that the way to stiff the Japanese is to keep them out of China's domestic capital markets, ensuring that Japan goes down with the sinking US ship. How does the BoJ spin this - by buying dollars. Note that US treasuries have been an indifferent investment over the last 3-6 months for a Euro-based investor, but a pretty good investment for a Yen-based investor. Again, my feeling is that this policy can only work for so long, but in the meantime, it's spin, spin, spin....

As I mentioned in

21mabry

(06/03/2003; 09:19:42 MDT - Msg ID: 104027)

(No Subject)

There has been quite a few posts latley about currency wars and who wins and who loses.I cant help but think that multi national corporations and other mega rich who can move in and out of currencies with little or no costs , they are the winners. It makes me think about the movie rollerball the one with James Caan not that other recent one.There were only corporations left no countries are those times in our future?

Mr Gresham

(06/03/2003; 09:32:01 MDT - Msg ID: 104028)

Aristotle

Just racing through and had to respond to your early AM post, in which you lanced quite well some of the psychology we're all living in.

Phrases which popped in mind to parallel your thoughts are: "Las Vegas exists" (and has been a prosperous destination point in the desert). What goes on there? Rational expectations? Capital formation? No -- people go there to LOSE their money -- as ENTERTAINMENT! That should tell us how serious people may be at following the signals of markets, trying to buy low and sell high in the rest of their lives.

Some people go to LV with a budget in mind, to lose "only a thousand" or so (never having been hungry in their lives, they can't imagine those ever being their "bottom dollars"). Others cannot control themselves, and play until they are tapped out entirely. This is why Gamblers Anonymous exists.

In a less-forgiving economic environment, these people would die, along with many of their offspring, and fail to pass on whatever genes carry the impulse toward bad risk/reward choices.

Second phrase: "Wealth happens" Yes, it could happen to you. It's happened to a lot stupider, less worthy individuals. You've done your homework. Time has been the distorting factor here, plus any shenanigans that the players are playing, with the public's investment/tax money.

We'll see, won't we? Thanks for expressing core thoughts so clearly.

CoBra(too)

(06/03/2003; 10:04:32 MDT - Msg ID: 104029)

Relative to What ? ...

Gold appreciated against the US Dollar, the japanese Yen and maybe the inconvertible Yuan (Renmimbi), while it depreciated substantially against the �, and a host of commodity producing countries like the ZAR, CDN. - NZ and Aussie Dollar - even if the latter dumped their official gold holdings.

I guess Belgian would argue from the viewpoint that any- and everything is relative in value to free Gold.

I'm not too unhappy, though, as i can average down as the POG in � is actually way cheaper than a year ago.
I still wonder, though, when the breaking point, or better hurt level is reached in the $/� relation? Is it 1.25 or is it 1.40, who knows and who cares. In the end the only arbitrator of value will still be rock solid gold - and the freely floating global fiat system based on 'reserve' Dollars will be part of histerical aberrations for students
of monetary economic history.

Does it only seem to me that that the pricing system of any commodity in Dollars and its futures derivatives is now proving to be double edged sword? A system, which is now starting to go against its inventors - or as MK mentioned some time back we're only another Black-Sholes LTCM like implosion away, freeing POG of its derivative encumbered shackles.

mikal

(06/03/2003; 10:12:13 MDT - Msg ID: 104030)

Gold bull market in very early stage

http://gold-eagle.com/editorials_03/chapman060303.htmlWhere are we? David Chapman 06/03/03 -Excerpts:
"...Of course there are many that argue that the cycle does not exist or today's modern monetary and fiscal policies will override such a cycle. But the record for the current Kondratieff cycle is compelling. The Kondratieff winter is all about debt collapse, a deflationary depression, and major bear markets in stocks, real estate and currencies and bonds and a major bull market in gold. We also believe that the Kondratieff winter not only is about an economic darkness but as well a political darkness. Indeed one would flow from the other as major economic problems give rise to false political prophets who have all the easy answers. During the last Kondratieff winter 1929-1933, the world suffered through not only an economic depression but also the rise of fascism and a world war.
Will this one be any different? We don't think so even if all of the pieces are not as yet evident. Our most compelling argument has been the currency devaluations and the potential for debt collapse. First the currency devaluations. As we have noted many times the 1990's was a period of currency devaluations. But a devaluation of the world's reserve currency the US$ has more far reaching ramifications.....

We leave you with a weekly chart of the Royal Bank of Canada (RY-TSX, NYSE) (www.royalbank.com, 416-974-8393) and Fannie Mae (FNM-NYSE) (www.fanniemae.com, 202-752-7115). Royal Bank has been forming a bearish rising wedge over the past two years. The stock recently fell sharply after reporting sharply lower profits. Fannie Mae has been in a downtrend since 2001 but has recently recouped back above the 40 week moving average on reduced volume. But Fannie Mae along with Freddie Mac are extremely vulnerable as they are major holders of the US's household mortgages. Their capital ratios have been cited as being under stress. Over the past few years the number of mortgages on houses has grown sharply. Many of them have been made with only 5% down. Indeed the cry of "Buy now, nothing down, 0% interest" seems to have been a rallying cry for the consumer economy and it will be the Achilles heal for the Kondratieff winter. That is where we are."

Clink!

(06/03/2003; 10:14:17 MDT - Msg ID: 104031)

@CoBra

Would that implosion make it a case of Black-Sholes black holes ?!

Groan. Sorry, couldn't resist.

C!

Old Yeller

(06/03/2003; 10:53:52 MDT - Msg ID: 104032)

Lessons on How

http://www.chron.com/cs/CDA/ssistory.mpl/business/1927461
To make 43 trillion disappear.A good backgrounder on the
report deemed superfluous to USA Corp's finances.

Seems to me that if GWB was the great leader that he and
his promotional team portray him to be,he would address
this issue,as the ability to face up to difficult realities
is what makes a leader a great leader.

Seems to me all GWB really is,is a salesman.A salesman for the rich and for the MIC.One with a vast promotional network behind him.

America has truly lost what she once had,the ability for
self-reflection and the ability to face her problems head on.

So instead,the destiny and future of the great nation,her children,are looted through a horrific debt trap.

Enough offshore magic shows and action movies,Mr.Bush,the
economic future of the homeland needs some attention.No,
that doesn't mean 1 trillion added to the debt ceiling,it
means taking responsibility for the future,now.

CoBra(too)

(06/03/2003; 11:01:36 MDT - Msg ID: 104033)

lack Holes? @ Clink

Probably, as the ultimate mass material implosion of 44.2 Trillion particles of greenbacks unfunded liability - contracts to the reality of its own weight and value = ZERO!
clink to you too - cb2

Gandalf the White

(06/03/2003; 11:48:20 MDT - Msg ID: 104034)

IF you missed the Trumpets BLARE --- See the WINNERS

http://www.usagold.com/contest.htmlThe POG and ESSAY Contests winners are shown at the above LINK !
Thanks Sir Townie !!
<;-)

CoBra(too)

(06/03/2003; 11:51:51 MDT - Msg ID: 104035)

... And what else is new?

Going full circle, though with brakes on. ESF, or whatever you'd wanna call it is out in force - everyday - until force majeure ... Just watch the daily POG gyrations ... a spectacle to behold ...

From Bill Bonner's Daily Reckoning:

"The end we are writing about today, however, is not our
own; rather, it is the conclusion of the good times we have
enjoyed over the last 30 years - during the Great Boom of
the Dollar Standard.

The division of labor was simple: foreigners would make
goods, Americans would buy them. Americans would pay with
dollars...and foreigners would lend them back.

It was easy work, exporting trillions of dollars; the
foreigners were happy to take as many as we shipped. They
set up factories and schlepped far into the night in order
to make geegaws that they could trade for them. Global
trade flourished...and everybody seemed better off for it.

"We are in a country that is buying more from the rest of
the world than we're selling, and we're doing it on a big
scale," Warren Buffett remarked on May 21.

"Any other country in the world that did that on that scale
would have seen greater currency depreciation already," he
added. "We have such a strong currency historically that
there's been a delayed effect. But it's started to happen
in the last year, and unless the underlying conditions
change, it's going to continue."

Before 1971, countries had to settle their current account
imbalances in gold. The amount of money in the world was
limited by how fast miners could dig the stuff out of the
ground. The Dollar Standard had a near-miraculous effect.
All of a sudden, there was almost no restraint on the
world's money supply. The central banks sold their gold and
piled up dollars. It was boomtime.

Charles de Gaulle saw the final act, even before the show
had started; foreigners wouldn't take the dollar at par
forever. A Dollar Standard, he said in the early '60s,
would allow the U.S. to pay its bills in money of any value
it chose.

Forty years later, it looks like the world's investors may
be catching on too - the Great Boom may be over. Germany
has edged into recession. Italy, too. Consumer prices fell
0.2% in Germany in April-May. Imports from China - driving
down prices - are increasing at a 62% annual rate.
Japan...well, Japan is always in recession, isn't it?

Germany is 30% of the European economy, prompting Stephen
Roach to conclude: "Europe is on the brink of economic
failure."

Here in the U.S., yesterday brought news that it takes
longer to find a new job than at any time in the last 20
years. And the Financial Times revealed the little secret
that our own Kurt Richeb�cher has been writing about for
years: the productivity numbers that lift Alan Greenspan's
spirits are phony. The numbers he relies upon are gross
numbers. The net figures, which are reduced by
depreciation, show no productivity miracle - not even
close.

And so it was all a lie, after all. Every vanity of the New
Era has now been destroyed. No eternal bull market on Wall
Street. No faster GDP growth. No peace dividend. No extra
payoff from new technology. No greater productivity. No
nothing.

It is all still the same. Everything comes to an end. Even
the big dollar boom. For now, the ungrateful foreigners are
growing chary of the dollar."

Chary and weary of the dollar? Gold is the natural alternative - cb2

silvercollector

(06/03/2003; 12:30:12 MDT - Msg ID: 104038)

"Euro Wreck" by S. Roach.

http://www.morganstanley.com/GEFdata/digests/20030602-mon.html#anchor0"Under these circumstances, the European policy response should be clear: The accepted script for deflation fighting tells us that authorities need to err on the side of aggressive stimulus. Yet the EMU policy decision-making framework all but rules out such an option. The special risks of Germany get swallowed up in the less alarming pan-regional averages. Therein lies Europe's greatest peril, in my view. At critical stress points such as this, stabilization policies need to become German-centric. That's true of fiscal policy, where Germany needs special dispensation to go well beyond the 3% deficit cap. It's also true of monetary policy, where the ECB needs to slash regional interest rates to levels that provide far more stimulus in Germany and ignore potential inflationary consequences elsewhere in the region; that will require a good deal more accommodation than this week's widely-expected 50 bp ECB rate cut, in my view.

Europe is on the brink of economic failure. Policy makers need to go into a state of "high alert." Unfortunately, the EMU-driven mindset shows no such concern. That must change, as the gorilla in the region moves inexorably closer to its own deflationary abyss. The recent appreciation of the euro � and the likelihood of more to come � adds a special urgency to a shift in the policy mindset. That won't be easy to do. EMU was a political endeavor from the start, basically aimed at locking in French-German d�tente � a goal complicated by the burden of German reunification. Notwithstanding powerful political motives, EMU never rested on a solid economic foundation, in my view. The cracks in that foundation are now growing wider. If the authorities don't move quickly, it may be too late to repair the damage."

-end-

Is a 50bp cut going to wallop gold? We will know soon enough.

Belgian

(06/03/2003; 12:53:02 MDT - Msg ID: 104039)

GWB in the Middle East

He expressed his desire to establish *free trade* between the US and the ME in exchange for a viable Palestinian state !? I don't buy this free trade proposal.
The US goes for """ dollar-support """ ! In fact, I think that everything the US undertakes is for a big part in function of direct/indirect dollar-support !!! Keeping the dollar in "use" at whatever price and by any means. Keeping up dollar-appearances.

Virtual strong stockmarket, regardless of crazy overvaluation. A 20 year IR decline as to increase bond-value and keep the bondmarket as liquid as possible (Yep Socrates). Contain Gold (dollar papergold market) and oilprices (occupation of Iraq) as to avoid a dollar-flight.
Deviate the N.Korea threath in Japan's direction as to valorize US' protection in exchange for further dollar support by Japan. Trying to seduce Putin, away from his attachment from Germany. Divide Euroland as to weaken the euro as the dollar's competitor.

It is remarkable that Saudi Arabia (S.A.) is left out of this whole US-ME affair ! Iraq and Iran have been/are selling oil for euro. The real joker is S.A. member of BIS.
And next to China, one of the Big players in the dollar papergold contract market (LBMA and invisible/untracable trades). All this must be euro for oil related and a constant pain for the dollar support-campaign.

The more the dollar gets debt-loaded, the more it ($) needs different lifesupports of all sorts. Containing Gold with dollar contracts will become insufficiant. Remember that the enigma around the US' "custodial Gold"-"deep storage Gold" hasn't been decoded ! Is this Gold that needs to be honored ? What if the US walks away from honoring (to S.A.) this Gold ?

Free euroGold wants to stop the dollar-management of Gold "entirely" and let Gold free to seek its own level against every fiat as a wordly tradable wealth ! This is an idea that the ME would welcome without having a presidential messenger coming down with an army of security guards to have a speech with no questions allowed, like the one we saw today !

The competition amongst the dollar-euro-Gold is a game between two to one : euro+Gold against dollar. Oil is shifting to the euro/gold side, regardless of US-ME free (humhum) trade relations. Iran is already a privileged trading partner of Euroland (and Russia). The more I think about it, the more I'm amazed that the US invader sees it the opportune moment to invite for mutual trade with the Arab moslim brotherhood. The more that Syria and Iran come under increasing pressure. How can one expect any positive respons for dollar-support ?
ME nation states are still experiencing the subjugation by the US through dollar-fiat dominance. Is this expressed in the smoothly (discretely) rising POO (Nymex crude over 30$ again) ? Remember that the POO should have been 144$/barril by now (in 2002-$).

Liberty Head

(06/03/2003; 13:02:55 MDT - Msg ID: 104040)

WMD Update

http://www.ucomics.com/walthandelsman/2003/05/28/The latest discovery.

Black Blade

(06/03/2003; 13:26:28 MDT - Msg ID: 104041)

IMPORTANT!!! - 2-Year Treasury Yield Below Fed Fund Rate

http://www.reuters.com/financeNewsArticle.jhtml;jsessionid=X4CMUY13535GQCRBAE0CFFA?type=businessNews&storyID=2871149
Snippit:

NEW YORK (Reuters) - Two-year U.S. Treasury yields fell to record lows on Tuesday, breaking beneath the Federal Reserve's 1.25 percent funds rate as investors bet the central bank would have to cut interest rates yet again. Yields began to slide after Federal Reserve Chairman Alan Greenspan said deflation would be on the agenda at a meeting of the central bank's policy-setting committee later this month. He noted that while deflation was unlikely, taking insurance against it would not cost much. The comments sparked speculation the Fed might decide to take preemptive action against deflation -- a sustained fall in the general price level -- either by cutting rates or perhaps buying longer-dated Treasuries.

ALERT!!!

The two-year note surged 5/32 in price, taking yields to 1.22 percent from 1.31 percent late Monday.

Black Blade: I am surprised that the gold market has missed this! With inflation (at least the official rate of inflation) running at least 1.7% and the nominal short term interest rate now at 1.22%, that is a NEGATIVE "real" interest rate of �0.48%!!! Historically the price of gold has a negative correlation to the dollar and low (and especially negative) "real" interest rates. It does not matter whether interest rates and inflation are either high or low, or somewhere in between. What matters is the "real" rate. For example � in 1980 when gold surged past $800 an ounce, the US had a very high inflation rate, but nominal interest rates were also very high, in fact higher. What happened then as now is "real" interest rates were negative. Well guess what? It cannot be denied that now we have negative "real" rates. Whenever this has occurred before the price of gold had a sustained increase in value (or at least held value) against a decline in other financial assets. Add to that a weakening dollar on the back of soaring trade, current account, and budget deficits against a backdrop of all time record US debt with absolutely no end in sight. This portends a rising rate of inflation as the Fed will have no choice but to cut rates further while at the same time opening the floodgates with massive infusions of liquidity. Actual "real" inflation suggests the "real" rate is even more negative. Did anyone else notice today's news? This is a big one!

Waverider

(06/03/2003; 13:43:59 MDT - Msg ID: 104042)

VIP: DAILY GOLD MARKET REPORT

http://www.usagold.com/DailyQuotes.htmlSnip:
"More importantly is that now the U.S. nominal interest rate is well below the rate of inflation making the "real" interest rate negative. This should provide good support for hard asset investments, and with weak returns in other financial assets the obvious conclusion is that by holding gold, the opportunity cost is virtually nonexistent. History is on our side on this one."

Waverider: Thanks Black Blade - you're always at least one step ahead of the mainstream media!

Belgian

(06/03/2003; 14:04:01 MDT - Msg ID: 104043)

The global economic front.....

The global economy is stuck. What does it help solving, to describe how bad this or that particular national economy is or isn't. All boats are on the same economic tide !
The longer this (systemic) situation drags on...the more (deeper) w're going to focus on the monetary aspect(s) of the global malaise. Dollar euro that is . Ideal combination of time and circumstances for taking dramatic steps and stop the "smooth" and "delicate" balancing excercises.

Time for hyperinflation and riddence of the dollar-standard.
Time for the euro-project, showing what it has in store.
We can't have one and a half standard. A new International Monetary System that takes the old (unworkable) and new (Gold) realities into account. The great dollar > euro transition runs smoothly up until that unknowable moment of final "Snap" in the adjustment process is there. Is this the answer to COBRA's question on POG in euro ? Euro first, POG somewhat later ! Allies in the euro-project must be ready to shift out of the dollar standard. In the mean time the competition can continue on a friendlier basis and Chirac (�) and Bush ($) have a polite relationship (Politics, Silvercollector) where the Bush oil-clan is in the perception that their private interests are being served (Right Old Yeller ?).

Remember FOA's bonzai pruning ...right Gresham !?

Stephen Roach analyses/conclusions on �/$ exchange rates and IRs don't hold water ! In german we say "kurieren am sympton"...cure the symptoms and ignore the causes of a coagulating global economy. Public financial reporting is totally ignoring (covering up) the floating dollar-"Debtberg" as the main cause for the agglutination of economic activity. The blood-stream has been diluted with constant, destructive easy-confetti and we will have to face the consequences of our virtualizing prosperity.

The reporting, read minimalizing of the IBM fraud is rather pathetic. Very soon we will all realize that this past all embracing paper-bonanza must end with a sobering nightmare.

All those who were finally lured into this virtual bonanza will remember this bad tasting mistake for a very long time. The same aftermath and worse than the 1929 affair.

Ideal for having FREE GOLD !

Dollar Bill

(06/03/2003; 14:29:11 MDT - Msg ID: 104044)

*>*

Sir Belgian,
Maybe I'm wierd, but this line of yours has great humor in it.
"...smoothly up until that unknowable moment of final "Snap" in the adjustment process is there."

Goldilox

(06/03/2003; 14:50:51 MDT - Msg ID: 104045)

Wind until Snap

@Belgian and Dollar Bill:

"...smoothly up until that unknowable moment of final "Snap" in the adjustment process is there."

Sounds like the sinking feeling one gets after accidently winding a pocket watch TOO tightly. . . snnnaaaapp, and then it winds never again.

Mr Gresham

(06/03/2003; 15:34:07 MDT - Msg ID: 104046)

Roach

http://www.fas.org/man/smedley.htm"Europe is on the brink of economic failure. "

Roach & crew are good economists, or at least I should say well-trained. They work hard observing all the dynamics that we discuss here each day. Their viewpoint has to be on the conventional side, as Morgan Stanley's fees are received for advising large clients.

I appreciate the frequent links here to their reports (and yesterday read 'em all), but it's mostly to see just how much of what we discuss here (on the dire doomer network) is being mentioned at the high levels of institutional economics. Quite a lot. (And being several years early has helped us more educationally than financially. So far. -- Well, actually, has anyone here lost a lot in the stock market??? Snarf, snarf ;)

But this Euro failure thing. Sounds like he's carrying someone else's water. What about the self-regulating dynamics of markets? Sounds like Europe is trying to keep itself in a currency of integrity so that the markets can do just that. You have to keep savers in the loop. Encourage capital formation.

I think Roach is conflating the economics slowdown with the deflation fear, and I give the deflation fear credulity only in the problem the BOJ/Fed have of not being able to cut below zero. That's a peculiar problem of the engorged financial sector, which is itself strangling the productive economies. Of course they will scream bloody murder and ask for everyone else to sacrifice again to save their worthless -- oops, rant talk -- , but it might be better to let them walk off the plank they've created and let the rest of the economy float (more) free again.

I think Europe intends not to get itself near that point, take the slowdown as it comes, and let economies bring themselves back up. At least I hope that is their understanding of how to ride out the USD "perfect storm".

This prattling about Deflation as a black hole that will suck everything into it. What? -- are people going to stop eating? Price of bananas drops two months in a row, and people will leave them rotting on the docks? I don't theeeennnk so. So much for deflation fears.

Just when consumers might NEED a price break, the business/banking economists are going to tell them, try to convince them, it's not good for them? Sounds like "Trickle Down" economics again to me.

But if we take all that Deflation ranting as coded talk for liquidity crisis, and banking failure (US, Japan, AND some of Europe), then we might be talking about something. But then, Roach and crew -- very good economists -- work for a bank, don't they?

I'm getting more and more leery of this "we're all in this together" chatter. Seems that in both economics and war, it gets flouted about when someone is about to pick your pocket or put you in front of a bullet as part of their business dealings.

Mr Gresham

(06/03/2003; 15:39:01 MDT - Msg ID: 104049)

oops

Well, that's what i get for leaving the alternate "estreet" link to the forum up on my screen. Hitting a Submit on it did not feed back a confirmation as usual , went off into a lost URL 404 rejection type message... oh well, live n learn

misetich

(06/03/2003; 15:42:47 MDT - Msg ID: 104050)

Greenspan No 'Major Evidence' of Growth

Snip:

Federal Reserve Chairman Alan Greenspan said today there is no "major evidence" that U.S. economic growth is accelerating and hinted again that the central bank may soon cut interest rates to boost growth and guard against a dangerous period of deflation.
...............
The Fed is concerned not about "the issue of deflation in the sense of falling prices per se, but the issue of corrosive deflation, that is, a deflation that essentially feeds on itself, creates falling asset prices, which in turn brings down levels of economic activity," the Fed chairman said.
...............

But the Fed chairman said such predictions remain just forecasts, and as long as that's the case, a further rate cut could provide "insurance" that they become a reality, the analysts said.

..........
*********
Misetich

Often in the past the Post's John M. Berry has been "tuned in" with Greenspan's moves -

It appears a US interest rate cut is a certainty - and Sir Greenspan has left no doubt on what he alludes "deflation" as being - ASSET DEFLATION

All On Board The Gold Bull Express

misetich

(06/03/2003; 15:44:09 MDT - Msg ID: 104051)

John Berry - Washington Post Link

http://www.washingtonpost.com/wp-dyn/articles/A7375-2003Jun3.html?nav=hptop_tbJumped the gun

CoBra(too)

(06/03/2003; 15:48:11 MDT - Msg ID: 104052)

Live n' Learn

Mr. G. - your latest post could've been repeated endlessly -
as in live n' learn - thanks cb2

misetich

(06/03/2003; 16:00:36 MDT - Msg ID: 104053)

Ford - GM cut production

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aC7iOXK0eVFg&refer=homeSnip:

Ford said its decline in May stemmed from fewer sales to rental car companies and corporate fleets. The company said it will cut third-quarter production by 15 percent to 810,000. The company said it would produce 1 million vehicles in the current quarter after previously estimating it would build 990,000. The revised second-quarter production schedule is also a 15 percent decline from the year before.

.............
General Motors

The automaker said it trimmed 20,000 vehicles from its planned second-quarter production in North America to 1.37 million new cars and light trucks, which reflects the lost production from the closure of a tornado-damaged factory in Oklahoma City.

General Motors also said its planned third-quarter output will be 1.225 million vehicles, down about 6 percent from 1.307 million in the same period of 2002.
********
Misetich

The auto industry is slowing as is the housing industry the two pillars that have kept the US economy going for the last two years

The "market" is ignoring all bad news of course - expecting a 2nd half recovery of gargantulan proportion -

They will be disappointed

All On Board The Gold Bull Express

Cavan Man

(06/03/2003; 16:30:04 MDT - Msg ID: 104054)

Mr. Gresham

Fine post sir.

Goldilox

(06/03/2003; 16:57:47 MDT - Msg ID: 104055)

Market Summary, by Rob Peebles (PruBear)

http://www.prudentbear.com/marketsummary.aspsnippit:

FedEx lost 2.5% today. The company said it would fire 12% of its workers,�or up to�14,000 folks. As luck would have it, according to a Reuters report, a Wall Street analyst� jacked up FedEx estimates for ?03 and ?04 yesterday, figuring the company would benefit from lower fuel costs and a weaker dollar. By late afternoon, however, the company announced the layoffs and actually lowered estimates for fiscal 2004.

Goldilox:

More minions for the bonepile. Now it seems the 2004 estimates that companies were using for their C.R.A.P. earnings reporting are starting to be revised downward, as well.

Got Gold?

Husky

(06/03/2003; 17:07:12 MDT - Msg ID: 104056)

RE: Roach "Europe is on the brink of economic failure. "

Agreed with Mr. Gresham that Roach is "carrying somebody else's water". Roach is normally and consistently a very good read. However this is at least twice now in the past 12 months or so that his comments about Europe have been very wide of the mark, I would even consider a characterisation of 'misleading' to have some substance. When you're in Europe and plugged into what is going on, this just jumps out at you, so it's not really a question of a narrow interpretation of what Roach is saying. I can understand that folks in the US can't tell the difference as they have little direct first-hand knowledge/experience of the situation on the ground in Europe, and nothing says they should have - nobody can know everything. Anyway, something is probably up as it would seem Roach's employer evidently needs to pump some very expensive hot air out the door.

It makes me sick to see the guy continue to ruin his credibility like this. He's better off leaving his employer and continuing to write as an independent I would think.

Goldilox

(06/03/2003; 17:10:17 MDT - Msg ID: 104057)

PruBear International Perspective, by Marshall Auerbach

http://www.prudentbear.com/internationalperspective.aspsnippit:

It is testimony to the state of US central banking practices today that nothing the Fed suggests these days has the power to shock any longer: helicopter money, currency debasement, unprecedented intervention in the fixed income markets, the mortgage market, corporate debt, the markets hardly bat a collective eyelid. Given the recent miraculous severance of domestic financial asset prices from the dollar exchange rate (which would imply foreign selling of US assets), and the similarly miraculous detachment of bond yields from stock prices, such posturing no longer appears like reckless hubris, but playing to an appreciative audience. The Bond Market Vigilantes left the theatre a long time ago, only to be replaced by a full house of inflation aficionados, applauding each new ?deflation-busting? proposal and screaming for an encore.

So it has come to this:� The Fed must fill the helicopters with dollar bills, send them aloft, and drop them first.�� Households must find themselves with such bloated liquid balances that they will desire for diversification?s sake other assets in their portfolios.�� Only if a surfeit of money burns a hole in their pockets will they spend it on goods, services and private assets.� It is hard to imagine any serious central bank in the world that would seek to enhance its credibility by advertising its capability of doing the equivalent of a helicopter money drops by including pictures of helicopters carrying crates in their research papers, but such is the legacy of the Greenspan Fed that this is now standard operating procedure.

Goldilox:

Were the planeloads of $$ paper for Iraq just a dry run for bigger things?

Cavan Man

(06/03/2003; 18:26:10 MDT - Msg ID: 104058)

Inflation and/or Deflation Musings

Inflation is a monetary phenomenom and rising prices are the end product right? Well, we certainly have excessive "monetary phenomenom" as witnessed by ongoing FED operations and prices of all sorts of very necessary products and services are registering large percentage increases in cost to both consumers and businesses.

Deflation, from my small perspective, is best viewed through the looking glass of the packaging business; specifically, corrugated boxes. I sell empty boxes for a living and one day hope to be a recovering box salesman :>)

The corrugated industry and many if not most of her customers are prime examples of deflation in real time; right here and right now. We have absolutely no pricing power--none. Pressure on selling prices and margins is incredible. I have never seen it this bad in 18 years. The real bad news is, the pressure is ratcheting up. There are five primary influences trending in confluence hampering our ability to eke out even a small profit.

1.) Overcapacity: a bi-product of malinvestment and a recessionary economic backdrop.

2.) Recession

3.) China and third world countries supplying products AND SERVICES at cost metrics the west cannot compete with.

4.) Specifically, WalMart but generally speaking, mass merchandisers of retail products with HUGE leverage on the buy side. The absolute POWER of these retailers, especially Wal-Mart cannot be comprehended easily unless you are a vendor or, selling a raw material to a vendor.

5.) Reverse auctions: This wonderful purchasing (weapon) tool is an event where an online bid is arranged and all those participating get to view their competitor's bids in real time. The lowest price gets the business. Typically what happens is the incumbent ends up retaining the business at or below variable cost.

That's what I see from my vantage point; that's my "man in the street" perspective. These five factors are weighing heavily on the packaging industry and the customers we service. For those of you from cape Girardeau, almost everything comes in contact with some sort of package and/or box. Regards....CM

Sundeck

(06/03/2003; 18:34:36 MDT - Msg ID: 104059)

Essay - Thanks to USA Gold / CPM

Congratulatulations to John the Jute ... err I mean Dr Watson - "Frightfully good reading, old chap. Holmes will be pleased. ;-)" ... and well deserved.

...and a big thanks to USA Gold / CPM for conducting POG essay competitions ... and awarding great prizes...ANOTHER Canadian Maple Leaf for my grand children :-)

Congratulations also to Sir Goldendome - fellow vanquished knight :-( ... and also to Boilermaker and The Hoople.

..and an extra special THANK YOU to "The Master of the Joust" Sir Gandalf the White, who alone via his magic "crystal ball" knows the price of gold on 1 Sep 03 (and is not telling)...

:-)

Sundeck

21mabry

(06/03/2003; 18:39:49 MDT - Msg ID: 104060)

fedex

Goldilox, Your post about fedex struck home with me.I used to work for the company, when I was hired in the company had a no layoff policy and had never laid any one off in the history of the company.I no longer work for them but evidently the no layoff policy no longer applies to them

silvercollector

(06/03/2003; 19:02:56 MDT - Msg ID: 104061)

Roach

I can't believe you guys!

Roach for over a year (a YEAR) has been discussing the 'double-dip' recession due to consumer plight and the fact that the USA is plain and simply financially exhausted.

His theme and his expression for quite a while now has been if the US is no longer in a postion to be the economic 'engine of growth' who, that is WHO, is going to be?

Answer the question and win a prize. Now we have the FED skating (and I don't think anyone can deny that!) with IR (12 cuts) with no economic response. There is no one out there who can pick up the ball and run with it. Roach has been saying this for a year. Now you guys jump down his throat for mentioning that Europe, in particular Germany, is faltering (failing) as well.

Roach has never said that the USA is not failing economically as well. If fact, as already mentioned, he's the guy calling the 'double-dip'.

He's calling the dip, and the deflation and the upcoming global scary times because ALL ships are sinking.

Don't knock him now, his theme is the same as it's always been. He's one of the few 'bankster' types that's calling it the way he see's it and I think he's right.

Anyway, no need to speculate, we'll know this week.

silvercollector

(06/03/2003; 19:11:28 MDT - Msg ID: 104062)

Cavan Man

You are one of the guys 'at the front'. Keep us informed good buddy with the 'empty box' numbers.

My brother-in-law was laid off yesterday from a medium sized high-tech firm. This guy was the purchasing manager who, in 2002, saved the firm some $1.5 million in contractual obligations. Now if they can't 'afford' him they are in trouble.

My neighbor was laid off from a major high-tech firm. He was one of the production managers. This guy was leaving his house at 6;30am to be at the plant at 7;00 and leaving at 6;00pm every day. His offical working hours are 8;30-4;30: The guy was working his tail off to keep the job. I told him if the corporation had to let him go they must be near the end.

Recall a year or so ago when the speculation ran rampant about 'cash burn rates' and 'remaining cash' etc, etc. I think we will have some major burnt-out victims upcoming very shortly. (Big high-tech corporate bankruptsy)

We shall see.

Socrates964

(06/03/2003; 20:16:03 MDT - Msg ID: 104064)

Mr. Roach - Rhinoceros

Reading US economists reminds me of Ionesco's play about everyone turning into rhinoceroses. Once there's a critical mass of them charging up and down the street, the remaining humans start to feel aggrieved that they haven't turned into rhinoceroses as well.

Hence, SC, Roach may have been claiming that the US is in recession, but this is about as intellectually challenging as pointing out that the twin towers of the WTC have fallen down.

His latest offering on 'Old Europe' makes me think that he is moonlighting as a speechwriter for Jon Snow and got his papers mixed up. See the impressive new horn on his nose for yourself:

"And unlike the United States, which has the luxury of addressing its economic problems from a position of strength, Europe must meet these challenges from a position of weakness."

Errr...what about that budget deficit and that trade deficit?

"...That would increase America's dependence on the rest of the world to finance its consumption-oriented economy � compounding an already serious balance-of-payments deficit problem. But that may now be an unavoidable outgrowth of new priorities now gripping the global economy."

....yup, the Euro/$ exchange rate shows that the rest of the world is queuing up to invest in the US because of the 'new priorities now gripping the global economy' whatever these are.

Now read this and laugh/cry/hurl:

"As we decompose the world through the stylized lens of the purchasing-power parity metric � all the more appropriate in these days of sharply fluctuating exchange rates � the European Union accounts for fully 20% of global GDP; that's only fractionally below the US share of 21% and nearly three times Japan's 7% portion."

and a few paragraphs later,

"Over the 1995 to 2001 period, the US economy accounted for 63% of the cumulative expansion in world GDP (at market exchange rates). Over the same period, Europe's contribution was about 8%. That means over that seven-year interval, America made about eight times the contribution to global economic growth that Europe did."

Note that when Roach wants to complain about Europe not pulling its economic weight, he uses 'the stylized lens of the purchasing-power parity metric' (sic) to emphasise the size of the Euroeconomy, but when he wants to complain about Europe failing to grow, he uses market exchange rates. On the basis of this argument, France and Germany should now be the economic dynamos of the world - given the recent revaluation of the euro, and we shouldn't forget the world's fastest growing economy - Iraq, which has quadrupled in size in the last three months (I can't say that I track the dinar in detail, but when I last saw, it had gone from 4,000 per $ to 900).

silvercollector

(06/03/2003; 20:56:58 MDT - Msg ID: 104065)

It gets better every day.

http://money.cnn.com/2003/05/07/news/companies/halliburton_iraq_con/index.htm-snip-

"Halliburton Co.'s $7 billion contract, awarded without competition, to make emergency repairs to Iraq's oil infrastructure also gives it the power to run all phases of Iraq's oil industry, according to U.S. Rep. Henry Waxman, D-Calif.

Waxman said, based on a letter he received May 2 from the Army, that "the contract with Halliburton -- a company with close ties to the administration -- can include 'operation' of Iraqi oil fields and 'distribution' of Iraqi oil."

Officials previously had said the contract dealt only with putting out oil well fires and performing emergency repairs as needed.

"These new disclosures are significant, and they seem at odds with the [Bush] administration's repeated assurances that the Iraqi oil belongs to the Iraqi people," Waxman said in a May 6 letter to the Army. "

-end-

Black Blade

(06/03/2003; 21:44:43 MDT - Msg ID: 104066)

Economy may just run out of gas

http://www.msnbc.com/news/921531.asp?0sl=-23
Snippit:

THE THINKING AMONG traders is that if the U.S. industrial sector recovers, pushing up demand for energy, the price of natural gas could spike to record highs come winter and pose a serious threat to a nascent economic recovery. It wouldn't help, either, if this summer turns out to be a hot one, further increasing energy demand at a time when supplies are tight. The issue was raised by Federal Reserve Chairman Alan Greenspan during his testimony before the Congressional Joint Economic Committee on May 21. Greenspan told lawmakers that dwindling supplies of natural gas were a "very serious problem" that may put pressure on the U.S. economy. Industry analysts, government officials and traders share the Fed chief's concerns.

Natural gas prices are soaring too, as U.S. supplies sit near record lows, down 39 percent from last year's levels and 32 percent below the five-year industry average, according to Jim Williams, an analyst with WTRG Economics, a consulting group for the energy industry. Reasons for the tight supply include a cold winter and spring in the Northeastern United States, a primary natural-gas consuming region, and declines in U.S. production levels. "It's still touch-and-go as to whether there will be sufficient drilling for next winter � that's why there's so much uncertainty in the price of natural gas," said Williams. "My hunch is we'll make it," he added, "but two, three or four years on � that's another question."

Phil Flynn, energy analyst at Alaron Trading, worries that a hot summer may drain natural gas supplies, as power plants ramp up to power air conditioners, and push natural gas prices higher. With the U.S. economy already struggling to mount a recovery, a sustained rise in natural gas prices could make matters more difficult, he said. "High natural gas prices can hurt the consumer and manufacturing, which is trying to get itself on its feet," Flynn said, but added that the impact may be somewhat diminished by the Bush Administration's $350 billion tax cut, a declining dollar and an absence of inflationary pressures in the U.S. economy. "We're in better position to absorb the shock," he said. Another silver lining: companies in the natural gas sector are likely to profit from the growth in demand for natural gas. "Everyone's waking up to the fact that this could be a real crisis and realizing it could be profitable for the entire sector," he said. High energy costs hurt companies involved in manufacturing and heavy industry the most, as those sectors tend to guzzle large amounts of energy as they produce products like aluminum and chemicals, according to Williams. Companies in the services sector will also be hurt by higher energy costs.

Black Blade: It is looking ugly in spite of some positive injection data over the last couple of weeks. However, this is "shoulder season" and maybe a couple more weeks of lower than usual demand will end as summer temperatures arrive. It appears that high energy costs will hit the economy for the next several years at least.

silvercollector

(06/03/2003; 21:57:07 MDT - Msg ID: 104067)

Socrates964

...and it was only the other day that you leveled Ari for not giving other posters the time of day. I forget the word you used, I never use a word with more than 10 letters, I would only forget it.

People turning into rhino's, don't know the play but I'm pleased that although you have belittled Roach and presumably myself in the process nowhere in your post do you alright say that Roach is wrong.

Come on make my day, tell me something I can understand. Tell me Roach is a jackass and he is dead wrong. I've been around for a long time, there are many, many people that have come and gone and they have ALL been wrong.

I'm not listening to stories and tales anymore. I know why gold is going up and it's not going up because Europe is going to save the day. Hard assets will rule this world, not paper, not even Europes paper. When oil, gold, water and food creation become critical issues paper money, IOU's, bonds and debt will mean nothing.

Perhaps I don't understand this cryptic association that the Euro has with gold, perhaps it is not necessary to understand this when it is certain that gold will surplant all fiat, be it a dollar or a Euro or otherwise.

That's another intellectually challenging concept to add to your list.

Sorry I am cranky, I am going to get lost for awhile, at least until this ECB/FED IR cut thing blows over.

mikal

(06/03/2003; 22:07:32 MDT - Msg ID: 104068)

Financial leverage is on borrowed money and borrowed time

http://www.gold-eagle.com/editorials_03/lewis060403.htmlChaos-onomics -Dave Lewis
Excerpts: "'The (People's Republic of China) is a backward, corrupt anachronism run by decrepit tyrants: old apparatchiks clinging to their dying regime' -Republican House Majority Leader Tom DeLay

Media deregulation, accounting scandals, Jayson Blair, PM Blair, President Bush and weapons of mass disappearance fill the airwaves these days and there is one simple thread which ties them all together, deception. Trust in the institutions of our times is fading fast and yet the powers that be continue to play the same old tired games.....

Returning to the public faith in Wall St. or to be more specific, the financial sector, let's examine today's graph. The aspect of the data which caught my attention was the enormous growth of financial sector debt. From a mere 8.6% of GDP and 6% of total debt in 1965, financial sector debt has ballooned to nearly 100% of GDP and 50% of of total debt today. For a sector that is supposed to intermediate, the finance buys sure seem to be borrowing lots of money.
I wonder if this growth in financial sector debt is related to the Federal Reserve's willingness to act as lender of last resort, or as an economist comic might ask, "can anyone spell moral hazard?" To what ends are these debts incurred?, not profits at least if you consider that 1987's 38:1 ratio of financial sector debt stock to profits has become 2002's 49:1. Of all the deceptions out there, this one takes the prize. Fiat money is not money and to the extent the system only operates if the financial sector becomes ever more leveraged, we are likely to discover just how un-money-like fiat money can be."

Dollar Bill

(06/03/2003; 22:14:20 MDT - Msg ID: 104069)

*>*

Greetings Silvercollector,
You said you perhaps were cranky, well, I dont know, I think THIS guy might qualify however.

One day after US President George W. Bush met with the new Chinese president and invited him to the United States, Republican House Majority Leader Tom DeLay, said....

"The (People's Republic of China) is a backward, corrupt anachronism run by decrepit tyrants: old apparatchiks clinging to their dying regime,"
"The notion that these oppressive and dangerous men could convince the United States that their murderous ideology should be imposed on a free and independent Taiwan is absurd. And refusing to say so, for fear of upsetting Beijing, is not tact: it is infantilism."

Dont majority leaders get schooled in diplomacy?

Black Blade

(06/03/2003; 22:16:31 MDT - Msg ID: 104070)

U.S. seeks to avoid winter natgas shortages

http://biz.yahoo.com/rc/030603/energy_gas_supplies_1.html
Snippit:

NEW YORK, June 3 (Reuters) - Facing concerns about natural gas price spikes or even shortages this winter, the U.S. government is taking steps to avoid any crisis that would leave consumers out in the cold next heating season. With gas inventories still near record lows and production struggling to catch up, concerns have been growing that supply might not suffice to meet heating needs six months from now. "This winter could be a disaster. We're really concerned about making it through, but it's tough to do anything in the short-term," said Stephen Thumb, principal at Virginia-based consultants Energy Ventures Analysis. U.S. Energy Secretary Spencer Abraham has called a June 26 meeting of the National Petroleum Council, an advisory panel, to devise ways to boost natural gas supplies this summer. While analysts generally agree that there is little government can do to immediately boost supply, they cite several steps that can be taken to avert a spike in prices above last winter's record high near $12 per million British thermal units (mmBtu), almost four times the average over the past 5 years.

Black Blade: It's way too late to be thinking about "quick fixes". There simply are none. They sandbagged the issue for the last few years and now the chickens have come home to roost. Another point to consider is that several nuke power plants have shutdown for repairs due to cracking in containment heads and for long term maintenance. Some of the "quick fixes" are unlikely as there are few "dual fuel" facilities anymore, fuels are not readily interchangeable, many older power plants have been decommissioned, etc. Alan Greenspan has good reason to be concerned.

Dollar Bill

(06/03/2003; 22:47:31 MDT - Msg ID: 104071)

^/^

..Jesper Koll, from Merrill Lynch (Japan), told a Minerals Council of Australia conference that reports of the imminent collapse of the Japanese banking system were nonsense. Mr Koll said because interest rates were zero, banks were infinitely wealthy to the point they could buy a country.
.."If Japan wanted to buy Australia, it could buy Australia tomorrow," he said. "With zero interest rates, Japanese banks can fund any asset, whether it's a good asset or a bad asset. With zero interest rates and zero funding costs there cannot be a financial crisis because the banks are infinitely wealthy."
..Making such property-infringing transfers ARE the point of the Grand Illusion (transfers away from creditors and towards debtors, from 'sticky wage' employees to importunate employers, from savers to consumers, and from hard-working citizens to parasitical ruling elites), the Court Jesper has still forgotten one basic law of economics - that of marginal utility.
..For even if the first extra unit of money could somehow do some real good, the next one would do less, and the next one less, and so on, ad infinitum, until the money, being in infinite supply, becomes a 'free good' and is therefore worth nothing - a process most nearly approximated in that wealth destroying pathology known as a 'hyperinflation'.
..All in all, another case of infinite money meaning infinite, if concealed, penury.
..All other nations must be induced into prostituting their own currencies at a rate commensurate with the process at work in the US, so that the dollar's debasement does not become too objectionable by comparison, else foreign workers will not continue to squander their savings on pampering the Western gerontocracy and their over-consumptive offspring.
..Infinite money will equate, as ever, to infinite mischief.
Sean Corrigan
..Only 13 out of the 50 US states are in a fiscally sustainable situation.

slingshot

(06/03/2003; 23:06:01 MDT - Msg ID: 104072)

Building a better mousetrap.

Cavan ManIn the pass couple of years I have noticed an increase in the products from China. More and more families are going into business at fleamarkets and the majority of merchandise is from China. As for Walmart a entrepenure has opened a warehouse (old K Mart) and it is something to see as the boxes piled high to the ceiling dissapate week to week and more from his loading docks fill the floor space.
I call it the store that has everything, but hard to find what you want. It is rare to see a box stamped, Made in the USA.
Slingshot------------<>

mikal

(06/03/2003; 23:11:58 MDT - Msg ID: 104073)

*FOR IMMEDIATE RELEASE*...URGENT...BREAKING NEWS BULLETIN.... Official National Psychiatric Diagnosis: "Military/Industrial Complex exacerbated by Chronic Obsessive/Compulsive Psychosis and Acute Suicidal/Homicidal Dementia..."

http://www.etherzone.com/2003/henr060303.shtmlCOMING SOON
TO A THEATER NEAR YOU By: Ed Henry
Don't worry. Don't fret. Your president did not forget. He's got a team of George Lucas and Steven Spielberg students working hard on a full scale production illustrating Iraq's weapons of mass destruction, how they were uncovered, and how George Bush has saved the day. It's almost ready.
Part of the delay was caused by arguments over the best scenes to produce. One group wanted President Bush dressed in white robes with a staff and tablets commanding a huge desert sand storm that would unearth monstrous laboratories and silos of nuclear missiles. This was fine, but they got sidetracked with thoughts of Saddam Hussein appearing as a huge evil cloud trying to devour the good guys, sucking helicopters into his maw, and doing other things before being smote by George and his staff.
Others wanted to include Hans Blix and his inspectors being hijacked by gazillions of scarabs before Donald Rumsfeld, Colin Powell, and Condalezza Rice rush in to save and redirect them.
Of course, Ari Fleischer and the White House staff nixed all of these wilder ideas and told the producers (played by Robert DeNiro and Dustin Hoffman) that things had to be more realistic and the old UN inspection team isn't allowed on the set or to be portrayed as anything but incompetent clowns told to go home in the beginning of the film.
No matter what happens, Disney wants rights to a "Weapons of Mass Destruction Theme Park" close to Baghdad if not in the center of town. Others are arguing over hotels, restaurants, airports and airlines, even casinos, all to kick back a healthy percentage of the take to the Iraqi people and their well being on condition they accept democracy and stop complaining about the low price of oil set by the Carlisle Group. They must also drop the Euro and go back to the Dollar.
The main stumbling block and cause for delay has been the White House insistence on realism, plus some confusion on just what they want the film to portray. It's a real challenge for the producers.
Everyone agrees that the main theme and perhaps the title must be "I Told You So" but the challenge is to show plausible reason why the weapons of mass destruction were not used during the invasion, how they evaded detection for so long, work in the Al Qaeda somehow, and convince skeptics in other nations of all this. Americans are not the problem since they will believe just about anything that comes from their father-figure in the White House, CNN, Fox News, the New York Times or telemarketers.
One group wants to show how weapons of mass destruction were spirited out of Iraq just before and during the invasion, particularly to Iran that appears to be next on the hit list.
Don't fret; it will all be ready before the next election gets seriously underway and George W. Bush will look like a knight in shining armor on a white horse. Of course, by that time the elections may be called off, we may have been dealt another 9/11, and in order to solve things Bush will have simply appointed himself King. We will, however, still need the court jesters.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."

Dollar Bill

(06/03/2003; 23:13:15 MDT - Msg ID: 104074)

{*_*}

If Jesper from Merril Lynch would talk like this........
in public. And as was posted today, no US group seems to flinch no matter what gets said by Fed officials or no matter what kind of state of affairs our financial reporting honesty is in.
Will Jesper be given a talking to? I strongly doubt that.
I am going to guess that the stock market is going to be inflated again and that will do wonders for state finances and peoples portfolios and retirement accounts.
The money is to be made not in gold at the moment, but in riding the build up of hyper inflation until...... Then, as they lose control of
the gold pricing, buy in again.
Of course, timing is unknown.
guessing agin.

mikal

(06/03/2003; 23:54:29 MDT - Msg ID: 104075)

G8 meeting

http://www.usatoday.com/money/world/2003-06-03-g8_x.htmPosted 6/3/2003 3:54 PM�� Updated 6/3/2003 9:11 PM
World leaders avoid talk of weak dollar, trade differences
By Noelle Knox, USA TODAY
EVIAN-LES-BAINS, France � World leaders said Tuesday that the global economy is headed for a recovery but, publicly at least, dodged many of the thorny issues weighing on the minds of American businesses, investors and consumers.
There was no mention of trade disputes, the weak dollar or genetically modified food in the final, joint statement by the eight heads of state.
"Our economies face many challenges. However, major downside risks have receded, and the conditions for a recovery are in place," said the statement by the leaders of the United States, Great Britain, France, Germany, Italy, Japan, Canada and Russia.
French President Jacques Chirac said that with the war in Iraq over, oil prices lower than they were prewar and the prospect of lower interest rates, investors and consumers should be inspired.
"I don't see a risk of deflation," he said during closing remarks of the three-day summit here. "I am not worried about the Japanese economy ... and I am not worried about the German economy, either."
Both economies, which are critical for global prosperity, are in recession. Japan also is suffering from deflation, a prolonged, broad price decline. And some economists say Germany may also be headed in that direction.
Chirac also indicated that he expects the European Central Bank to cut interest rates when it meets Thursday. Interest rates in Europe are currently 2.5% ? twice the level of U.S. rates.
Meanwhile, the dollar continued to rise after a rare comment from President Bush that the soft dollar was "contrary to our policy."
A spokesman for Japanese Prime Minister Junichiro Koizumi on Tuesday quoted Bush as saying the United States will maintain a strong dollar and added that the prime minister welcomed those remarks.
Americans now have to pay $1.18 to get one euro, the currency used by a dozen European countries. The dollar has lost about 12% of its value against the euro this year, making U.S. exports, such as computers and aerospace equipment, cheaper while making European imports, such as cars, more expensive for Americans.
Chirac said the diplomats discussed exchange rates during the summit, adding, "Every one of us considers stability in currency markets extremely important to promote growth."
At the same time, the U.S. and Europe are locked in several major trade disagreements, including U.S. exports of steel and genetically modified foods, and corporate tax benefits.
Last month, the U.S. filed a lawsuit over Europe's ban on food that contains genetically modified organisms, while Europe has drawn up a list of $4.7 billion of U.S. products that it plans to hit with trade sanctions if the tax benefits aren't changed.
The leaders also failed to reach an agreement on freezing agriculture subsidies that hurt African farmers.
Chirac blamed it on "our American friends not having given their support."
The G8 summits, Chirac said, are designed to inspire confidence in investors and consumers by showing that the world leaders are cooperating and coordinating their actions.
Besides the handshakes for the cameras, however, there were few details on just how much they are cooperating.

Goldendome

(06/04/2003; 00:26:44 MDT - Msg ID: 104076)

Cavan Man & Silvercollector--Your Man in the street posts.

I enjoyed your antidotal assessments yesterday of the U.S.economy. I think we need more of them, so here is:

Another "man in the street" report.

In the eighteen years that I have owned and operated a small neighborhood grocery store, I have never, ever, seen so much change and hardship as is occurring now, the past year, in the local wholesale/retail industry.

Where to start? Most dramatic I guess, my Dairy supplier went bankrupt three months ago. One large grocery store, one convenience store, and two hardware stores have locked their doors in 2003.

I had two bread delivery companies for eighteen years. Just recently one pulled out--Said they just had to cut expenses as everything from sesame seeds, cooking oil, flour, chocolate, to labor, medical, and finally "the Nail"--fuel costs, were simply overwhelming them.

My cigarette and candy distributor that had been making twice a week deliveries for the past eleven years cut all routes to once/week delivery mainly because of fuel, but also labor costs. Now I have to be even more of an "expert" when gauging demand, or find a second distributor to do fill-ins.

An elderly gentleman that had been bringing in a few items every month for the past fifteen years just stopped showing up. I don't know what happened there, but for the past five of six years he had been trying to retire. I got the impression at the end, that he was attempting to liquidate his business piecemeal to us retailers.

Another company that had carried health and beauty aids, plus other household type items, decided to pull out of this State altogether, after what they termed was "A disastrous first quarter." (I can sure vouch for that. I had to go back one hell-of-a-long-way to find any lower sales figures for the month of January.

The two major poop companies,{ 'er read "pop" companies} are still trying to get away with every other week (winter) delivery schedules, even though winter is long gone. Again, to save time, labor, transportation costs.

The major grocery wholesaler has upped minimum order sizes--twice--do to labor and transportation costs, again. Sometimes, if the order doesn't look close enough (dollar wise), I just hold off the order for a week, rather than order crud that I really don't need at that time, but then, I almost always suffer, outs.
--------------------------------------------------------

How is my business doing, you ask? Not so shiny--as you might expect.
I saw "the hammer" hovering in early 2001, after a poor net followed a decent revenue year in 2000. You probably guessed the problem......Again, too much labor cost. So, I like nearly 100% of American businesses today are trying to grow the bottom line, while the top line shrinks (way too much capacity built up in this industry also, in the "90's), by cutting the expenses in the middle--mainly labor, but also, other indulgences that have become so passe with the lingering recession...Like newer cars, and trips, and extra time off, and other expenses that got buried in the income statement.

Now it's five, or six, or maybe even seven days a week, and time-off spent tarring the roof! Business is not so much fun and glamour now as it is an aspect of pride in survival as others fall away---wondering if your turn is coming. My "Ace" is that I have been doing it so long now, that everything is either paid for, or being paid down to near debt extinguishment by my other tenants in the small strip mall. But like Cavan's box company, I have no pricing power, at all. Just offer to the public at a fair price, be competitive, and count on location. ---------Gdome

Gonlyold

(06/04/2003; 00:50:06 MDT - Msg ID: 104077)

GAB & Belgian

GAB, I guess that I should not have ben surprised by your information that the Euro is not backed by 15% gold. Since the banking system is ultimately ruled by the same world wide leaders, and since the "protection" offered by US banks is, I'm told, about 10% of deposits, then I should have expected that the euro backing would have been built along the same lines. What Why didn't I see that? I should have know better.

And from what I understand from you, that the gold "backing" of the euro is way less than 15%: perhaps only 90? 95%? 99%? This underscores the lack of reasoning to switch from a 100% fiat US$ to a possible 99% fiat Euro. So obviously it's not a fiat problem. I know many here have been attempting to explain exactly what that other cause is. I'm still trying to digest it. Thank you for your information.

The most frigntening think you said was, "The world's monetary mess stinks and it will likely kill our civilization." This statement arouses survival techniques more important that gold. (Dare I say that?)

In spite of my User name's dyslectic (sp?) play on the words "only gold", I'm tempered by reality in knowing that food, clothing, and shelter will override the need for gold. Gold will still be important for those who are secure in the those basics, but in spite of A's comment that you will not be able to pry gold out of someone's hand once the world goes into a depression, I feel that A still must realize that you can't eat gold. Feel free to correct me if I have misinterpreted A's comment.

Belgian, thank you for you response. When you say that, "(Gold is) Not a contained unprecious metal that is forced to walk in line with a currency/fiat." and "Gold is ment for storing your surplusses and function as a transferable wealth tangible.", I take that to mean that you feel that gold can never be a currency. Somewhere in A's or FOA's archives, he explains that gold can be viewed as: a currency, a commodity, and a something else(?).

I agree with you but probably not for the same reasons. My reasons are somewhat simplistic in that I don't see how gold can be demoninated into pennies. I will continue to read your and the other posts here to gain more knowledge on this issue.

You also said,

"The euro as an alternative fiat is will become as worthless as the dollar over time if the euro-system should copy the dollar-system with unfree, contained Gold !!! But this will NOT be the case ! The ECB has made its intentions, for Freeing Gold, very clear with openly exposing its goldreserves to the present dollar-paper-gold-market pricing. The ECB wants to set Gold Free from this dollar-system with the installment of an euro-PHYSICAL goldmarket !"

Let me see if I understand this. In my own words, I think you're saying that the Euro will not be able to survive as a currency if it is not tied to physical gold and that the ECB wants to establish the link between gold and the Euro. If my interpretation is correct, seems like the ECB has a long way to go before it meets it's objective. There is much here that I don't understand. Thank you for giving me some food for thought. I will think on these things. Take care.

Gonlyold

(06/04/2003; 00:57:34 MDT - Msg ID: 104078)

Correction to my post

please change my sentence from "perhaps only 90? 95%? 99%?" to "perhaps a fiat equivalent of 90%? or 95% or 99%."

Topaz

(06/04/2003; 01:09:10 MDT - Msg ID: 104079)

Debt and Credit. @ BB

http://www.smartmoney.com/bondmarketup/ALL maturities are under the pump BB. Mr Greenspans role now is to attempt to instil in the market psyche low IR's are here to stay. The quirkiest thing now will be an ECB rate-cut... if it forces DX well above 94 it could start an avalanche of Futures to Cash ....GAME OVER!

Belgian

(06/04/2003; 01:27:17 MDT - Msg ID: 104080)

Mineweb reporting on LBMA conference - Lisboa

The report in 3 words : DOOM DOOM DOOM ! Thanks Mineweb...

LBMA (London Bullion Market Association) where the equivalent of 500 tonnes Gold per day (ATHs were 1,000 tonnes/d) are *visibly* traded and an estimate of 1,500 tonnes Gold per day, *unvisible*.
In other words, this oldiest London based goldmarket, trades the yearly total new Goldproduction in *one* day. The paper goldcontract equivalent of 2,500 tonnes (visible + unvisible), that is.

Nobody is going to object, when we state that, the LBMA-insiders know * EXACTLY * what is happening in the Global Gold-World ! Repeat...the LBMA_Insiders (Rothshild-level).
A jolly group of LBMA-messengers got a nice conference-stay offered in sunny Portugal, where the living is nice and easy. These messengers had only ONE message for Gold's future : DOOM and GLOOM ! Our dearest and much appreciated clown Andy Smith (Mitsui), "boomeranged" POG for 2004 at 250$ !!! Yep, minus 100$ for your-mine-our, precious ounce-coins !

Please, take note that Gold is a "Boomerang" investment...you buy it and then you sell it again...according to the honorable Smith.

That same Mineweb (vehicle) states (re-confirms) in another article that present gold-consumption is 4,000 tonnes a year. And total production was...And the balance was "boomeranged" Gold !

Can anyone here guess the "REAL" message ??? TIA !

Dollar Bill, you surely can...(snap, joehoe *>*)

Topaz

(06/04/2003; 01:44:42 MDT - Msg ID: 104081)

@Gonlyold.

Sorry to butt in Sir...It may assist your understanding if you refer to ECB Gold as "reserves" and not "backing". The term "backing" is more relevant to the Gold standard of yore. Where the ECB differ is the Mark to Market evaluation of their Gold reserves. The "backing" today is more closely represented by the Human resources of a Nation/Bloc. In the case of America every man, woman and child is saddled with approx $30,000 Debt...Gold (at birth) and throughout it's lifetime (infinite) is debt free and from time to time extends it's credit-worthiness into the stratisphere. It's considered by some we are now at the beginning of one of these "Times".

Belgian

(06/04/2003; 03:04:52 MDT - Msg ID: 104082)

HSBC - Forex analysts

The world's central banks are in the process of exchanging their dollar-reserves for euro-reserves. A lot of inconsistant warnings are criscras shouted from the dollar-pit !

WAC (Wide Awake Club)

(06/04/2003; 03:39:14 MDT - Msg ID: 104083)

The US Economy and the mighty $ needs all the help it can get

http://news.bbc.co.uk/2/hi/americas/2961288.stmA US brothel is offering free sex to US troops who took part in the war against Iraq to thank them for their endeavours abroad.
The Moonlight Bunnyranch in Carson City, Nevada, where brothels are legal, has produced a more erotic version of the standard TA-50 army kits issued to troops headed into battle.

WAC: Aid package for the Airlines, Stock Market, Auto industry etc. Why not extend this generous facility to other industries too. It all helps to increase and maintain liquidity. What as/is happened/happening to this once Great Land?

Black Blade

(06/04/2003; 04:27:40 MDT - Msg ID: 104084)

"Currency War" - Competitive Currency Devaluations Ahead

http://www.fxstreet.com/nou/content/9795/content.asp?banner=comstockfund&menu=macro&dia=462003
Snippit:

The move toward competitive currency devaluations that we have been expecting is quickly gathering steam as global economies continue to stagnate. The weakness in the dollar and strength in the Euro is putting increasing downward pressures on the already weak European economies, and elected officials are pushing for an EU rate cut at this Thursday's meeting of EU monetary leaders. Germany is already flirting with recession as GDP was negative in the first quarter while unemployment in the Euro zone is at a three-year high of 8.8 percent. With inflation under control even the EU central bankers will probably give in and lower rates by at least 25 basis points, or perhaps even 50. Whether the cut is 25 or 50 points, it will probably be only the first of a series of interest rate decreases through the remainder of the year.

Chairman Greenspan, too, clearly signaled today that another fed funds rate reduction was likely at the upcoming FOMC meeting on June 24th and 25th. With the economy failing to respond to the massive monetary and fiscal stimulus already in the pipeline, the Fed is desperately trying to pump up both the bond and stock markets at the same time. To do this they are saying that the economy will recover, hoping that this will stimulate the stock market. On the other hand they are saying that inflation is no threat, so the cost of taking out a little insurance (a rate cut) against the possibility of deflation is minimal. In addition they are also continuing to talk about the possibility of taking non-traditional measures such as long-bond purchases, thereby helping out the bond market.

Black Blade: Ah yes, the "Currency War". Add to this the Ministry of Finance through the Bank of Japan is selling off the Yen like there's no tomorrow. Everyone wants the weaker currency. Anyway the ECB will cut 50 bps and the Fed will follow up at least a 25 bps and maybe even 50 bps cut. The Japanese will say "what a bargain" and buy the lower yielding bonds while throwing around worthless Yen to weakening it further. Quite amusing really.

Socrates964

(06/04/2003; 05:30:56 MDT - Msg ID: 104085)

Silvercollector

Silvercollector, c'mon dude. Think about it.

I'm not abusing you. I actually thought your post on everyone losing their jobs was very interesting.

The point I'm making has nothing to do with some mystic association between gold and the Euro, but that Roach seems to be on 'message discipline' like all the other Wall Street shills. Call his work what you like, but hard analysis it ain't.

He's thus doing nothing more than resurrecting the old Cold War argument of 'it's bad here, but much much worse over there', and backing it up with ridiculous arguments of the kind you find on the Heritage Foundation site.

As such, when he tries to claim that the strong dollar is the same thing as robust economic growth, I slap my forehead with my palm and shout 'Duhhh!' because by the same argument, France, Germany and Iraq have just become economic miracles with surging GDP in dollar terms.

Unfortunately, it seems to me that if one makes this kind of point, a lot of people here assume that one is being a Franco/Germanophile partisan, when my point is that this is an idiotic tendentious argument, and the fact that a previously sound economist like Roach is making it tells you how far gone things are. Surely you see this???

This will be my last post for a while.

Cavan Man

(06/04/2003; 05:51:29 MDT - Msg ID: 104086)

mikal104703

Thanks for that one buddy. I think Pacino should play rumsfeld because both are so, "over the top". You know, rumsfeld might just be the AU market's secret weapon.

Boilermaker

(06/04/2003; 06:38:21 MDT - Msg ID: 104087)

Mirant on the ropes

Mirant bankruptcy threat shakes U.S. energy market

NEW YORK, June 3 (Reuters) -
Rumblings from electricity generator Mirant Corp. that it might seek bankruptcy protection have stirred nerves in an already troubled energy market, traders said on Tuesday.

"Mirant is a big company that could potentially disrupt the market. They are probably holding a lot of positions," one Midwest natural gas trader said.

Atlanta-based Mirant, one of the nation's top merchant energy traders, on Monday offered its creditors a plan to restructure $1.45 billion of debt as part of a wider refinancing effort aimed at avoiding bankruptcy.

At the same time it warned that if the plan were not quickly approved, it might seek Chapter 11 bankruptcy protection using the same plan as the foundation for restructuring.

The move is the latest in a series of setbacks for an industry hit hard by the downfall of energy trader Enron Corp. in 2001, federal investigations into market manipulation and subsequent severe credit downgrades.

"Mirant is one of the few big players left," one New England electricity trader said. "If Mirant exits the market, it's going to be a lot harder to enter long term deals."

A year ago, Mirant was the biggest natural gas trader and sixth biggest power trader in the United States, according to a study by energy analyst Scott, Madden & Associates.

BACK TO BASICS

Over the past year, electricity traders have nearly abandoned speculative trading to return to the sale of megawatts generated at their power plants.

Speculative trading, which made Enron the biggest energy trader in the nation before it failed, involves making a bet on whether power prices will rise or fall in the future based on such factors as the weather or fuel supplies.

It is potentially more lucrative than trading around physical assets, like power plants, but much riskier.

Mirant was created by Southern Co. to buy and build power plants across the nation that would sell power into the newly deregulated regional electricity markets.

As with other energy merchants hurt by falling power prices, like Xcel Energy Inc. unit NRG Energy and PG&E Corp. unit PG&E National Energy Group (NEG), Mirant's credit rating has been cut to junk and its stock price has fallen sharply.

comment;
Here's another huge paper energy trader going down even though there's no sign (yet) of fraud. Someday soon the paper gold traders will meet the same fate. Back to basics be it physical energy or physical gold

Cavan Man

(06/04/2003; 07:28:58 MDT - Msg ID: 104088)

NEM

Newmont Announces Acceptances of Six of Seven Hedge Counter Parties, Representing 94% of Yandal Hedge Book Ounces
Tuesday June 3, 8:03 pm ET

DENVER, June 3 /PRNewswire-FirstCall/ -- Newmont Mining Corporation (NYSE: NEM - News) today announced that its subsidiary, Yandal Bond Company Limited (YBCL), has accepted assignments from six of a total of seven gold hedge counter parties for all their gold hedge contracts with Newmont's Australian subsidiary, Newmont Yandal Operations Limited (Yandal), formerly Great Central Mines Ltd., for a total cash payment of $77 million.
The total cash payment represents $0.50 for each $1.00 of net mark-to-market hedge liability, as calculated by YBCL as of May 22, 2003. These assignments represent 94% of the ounces in the Yandal hedge book and 76% of the negative mark-to-market liability of the Yandal hedge book. Yandal remains obligated to deliver to YBCL for the contracts assigned under the offer.

YBCL's offer to acquire all of the gold hedge contracts entered into between Yandal and its counter parties expired at 5:00 p.m. Mountain Daylight Time today. The remaining counter party alleges a right to terminate its gold hedge contract with Yandal before its respective maturity, based on the alleged occurrence of an early termination event under the contract.

Pursuant to the announcement of May 29, 2003, YBCL has also offered to purchase for cash all of the outstanding 8 7/8% Senior Notes due April 2008 of Yandal, YBCL has said in the Note offer that its failure to acquire all of the Notes not presently owned by it or all of the hedge contracts may result in an insolvency with respect to Yandal.

Newmont, based in Denver, is the world's premier gold mining company and the largest gold producer with significant assets on five continents.

Calidor

(06/04/2003; 07:30:37 MDT - Msg ID: 104089)

Old Yeller - Lessons on how to make 43 trillion disappear.

http://www.aei.org/events/eventID.301/event_detail.aspOld Yeller,

Thanks for yesterday's post (msg#: 104032) and link to the article. I was curious about the 43 or 44 trillion (ok, ok, a few trillion here, a few trillion there, pretty soon we're talking real money) and did a little "mining for more" information.

Snippit �
June 2, 2003, 1:23AM

Lessons in how to make $43 trillion disappear
By SCOTT BURNS
Universal Press Syndicate

The material to be deleted from the budget document was an updating of generational accounting. O'Neill had requested an estimate of the government's true long-term obligations.

The new accounting shows the United States is broke.

It shows the true obligations of government were 10 times larger than Treasury debt held by the public. It shows the present value of these unfunded obligations is a mind-numbing $43 trillion.

In a recent telephone conversation I asked one of the project economists, Jagadeesh Gokhale, why he thought his work was cut. Gokhale, a senior economist for the Federal Reserve Bank of Cleveland, was circumspect. He suggested the figures were a surprise to the new Treasury secretary.
The American Enterprise Institute will soon publish a pamphlet, co-authored by Jagadeesh Gokhale and Kent Smetters.

The draft copy does more than lay out the size of the government's unfunded liabilities. It shows how much the current generation is benefiting at the expense of the next.

Calidore - The draft mentioned above is titled "Fiscal and Generational Imbalances: New Budget Measures For New Budget Priorities". Just click on Gokhale's Paper or Gokhale's Presentation to see them in pdf.

LeSin

(06/04/2003; 07:43:54 MDT - Msg ID: 104090)

Russia's Reserves Soon To Be 50% EUROs

http://www.rbcnews.com/komment/komment.shtml
Soon All Will "WILL" March to the Same Beat - Cheers "S"
--------------------------------------------------------

Russia will switch to euro

The euro will make up at least a half of Russia's foreign exchange market in seven years, against the current 10 percent

During the 300th anniversary celebrations in St. Petersburg, Russian President Vladimir Putin said that the cooperation between Russia and the European Union could result in expanding the euro zone beyond EU borders. He also noted that the Central Bank of Russia had been increasing the percentage of euros in Russia's gold and foreign currency reserves. According to analysts, Mr. Putin's statement is purely political, and it is unlikely to be followed by concrete economic steps. However, the Kremlin's political backing of the euro in the euro-dollar stand-off can help speed up the process of Russia's foreign currency diversification, which is taking place due to natural reasons. Economists believe that the euro's role in the Russian economy will be strengthening, and the European currency will reach parity with the dollar in a few years� time.

According to economists, the euro has already gained a foothold in Russia. "I think the euro does not need the Russian President's political backing," Denis Rodionov, an economist with Brunswick UBS, told RBC Daily. In his view, Mr. Putin's words about transferring part of the Central Bank's reserves into euros are not a guide to action but just a statement of fact. "The Central Bank has been purchasing euros actively over the past six months, and it is no secret. However, this policy is aimed not at helping Europe support its currency but at diversifying Russia's reserves," Mr. Rodionov stressed. Alexey Vorobyov, an analyst with the Aton investment company, agrees. "As Europe remains Russia's largest trade partner, it is necessary to increase the share of euros in the Central Bank's reserves. This is necessary in order to satisfy the demand for the European currency on the market, and, consequently, to smooth fluctuations in the ruble's exchange rate against the euro," he said. According to experts, about a half of Russia's foreign trade operations are with Europe.

The euro has strengthened by about 20 percent against the dollar since the start of the year. Nevertheless, the dollar's position as �the world currency� is still very strong. "The dollar will remain the �reserve currency� for a long time to come, because the American economy is still the strongest in the world. The dollar is over 300 years old, and, in fact, it replaced gold as a reserve instrument. And the euro is just four years old, and it is by far not as strong," Mr. Vorobyov said. That is why the European currency will not be able to play a role comparable with the role of the dollar, at least over the next one or two years, he believes. Indeed, over the past hundred years, Americans have managed to flood almost every country on the globe with their currency. Anton Struchenevsky, an economist with Troika Dialog brokerage, told RBC Daily that, in the estimation of the US Federal Reserve System, about 80 percent of the total dollar supply was outside the United States. "The circulation of a national currency outside the country is good for its economy. It means that investments are being made in it. And the status of a reserve currency directly supports the dollar," Mr. Struchenevsky said.

It is difficult to say when Europe will be able to use this resource and support the economy through the investments in its currency from abroad. "The question is how many euro notes will be printed. One thing is clear: there are more dollar notes (than euro notes) on the market now," Mr. Struchenevsky says. But analysts say the euro stands a good chance of strengthening its position both in Russia and on the world market. Certainly, the current weakening of the dollar affects the situation on the exchange market, with many investors trying to switch from the dollar to the euro, thus increasing the share of the European currency in global economy. And the deeper the dollar falls, the higher the demand for the euro will be. But, according to experts, the euro's success will be due not just to America's weakness but also to the strengthening of the European economy. "We are now witnessing the emergence of Europe as a powerful rival to the United States. And the admission of another ten countries into the European Union will further increase the euro's weight in the world," Mr. Vorobyov said.

As for the euro's position on the Russian market, analysts say the European currency should play a stronger role there. Traditionally, Russian exporters mostly receive dollars and not euros even for the goods they supply to Europe. This, in its turn, leads to the weakening of Russia's balance of trade. "Europe accounts for about 50 percent of Russia's foreign trade. So, fundamentally, we should give preference to the euro rather than to the dollar," Mr. Vorobyov noted. In his opinion, Mr. Putin's statement should be interpreted as a sign for foreign trade companies, particularly exporters, about the necessity of switching to the European currency. However, Mr. Struchenevsky believes that this process will go in a natural way, and Russian authorities are unlikely to put pressure on domestic companies: they will be guided by simple commercial interests.

The percentage of the euro in the cash savings of Russian people remains rather low, as well as in the payments of exporters. "Despite the situation on the world market, Russians have not yet lost their confidence in the dollar," Mr. Struchenevsky says. But this trend is changing, even if gradually. Earlier, the dollar made up nearly 100 percent of foreign currency purchased on the Russian cash market, but the figure has dropped to 90 percent over the past few months, giving way to the euro, according to the economist. According to him, the success of the euro on Russia's cash market hinges on the well-being of Russian citizens. "As living standards of Russian people rise, they will need various investment instruments. In addition, the citizens will become better acquainted with economic reality, and they will realize that investments should be diversified," Mr. Struchenevsky stressed. In his opinion, if Russia's GDP doubles by 2010, the ratio of the dollar to the euro in the Russian economy will be 50/50. But this will hardly be a substantial support for the EU economy. According to the economist, the deposits of Russian people in foreign currency total about $13.5bn, while their cash savings are estimated at about $35bn. This is a lot for Russia, but not for the world economy.

LeSin

(06/04/2003; 08:07:39 MDT - Msg ID: 104091)

IRAQ OIL - WAR OF WORDS - SOON DIPLOMACY IS OUT THE WINDOW -

http://top.rbc.ru/english/index.shtml?/news/english/2003/06/04/04161659_bod.shtml

Soon the Summer Evian, St Petersburg White Night Festivals and G-8,9 & 10 Summer Picnics and Garden Parties together with photo oportunities of forced smiles and painful handshakes will give way to the reality of a worthless US$ and rising star status of the EURO and its' right/will to have oil supply to World priced in EUROS.

All this along side of Free GOLD that is not tied to New York or London Paper Contracts. See continued low price paper gold as they unwind paper positions and throw more paper on the fire.

Yes, Belgian, quick as snap - they will announce disconnection from paper gold and physical real price physical gold.

The Coalition of the Willing that occupied a soverign nation and is stealing that nations natural resources
will lose more respect. That same coalition now claims to have a Road-Map for ME peace. Yes a ME peace together with free trade priced in US$.

What makes me think that these boys are off with the fairies.

Ari, Belgian - Many here - Hear & Do understand - Phycical Gold in most forms - Get you Some, Yes!
Cheers "S"
-----------------------------------------------------------

Article:

Russia won't be discriminated against in Iraq
US authorities will not allow any discrimination against Russian companies in Iraq, Russian Foreign Minister Igor Ivanov said after a meeting of the Russia-NATO Council in Madrid on Wednesday. According to him, representatives of the US administration provided the necessary assurances to the Russian side during recent consultations in Moscow.
Mr. Ivanov stressed that Russian companies would participate in tenders for the development of Iraqi oilfields on equal terms with foreign companies. He expressed hope that Russian companies would manage to win the tenders, as they have vast experience in dealing with Iraq and are acquainted with the peculiarities of this country.

During his visit to St. Petersburg last weekend, US President George Bush also spoke about the possibility of Russian oil firms working in Iraq. However, it is unclear how much of the Iraqi pie Russian companies will get and how strong the Russian presence in Iraq will be. In this respect:
Mr. Bush indicated that Moscow should not expect any serious oil contracts with Baghdad

21mabry

(06/04/2003; 09:21:14 MDT - Msg ID: 104092)

(No Subject)

The stock market is singing her siren song trying to tempt the forgetful back in.She is like an old girlfriend you almost have forgotten about,then she calls you.O well we are all fools and prophets lifes a stage and were all in the cast.

John the Jute

(06/04/2003; 09:23:29 MDT - Msg ID: 104093)

Thank you

On behalf of John H Watson MD, lately surgeon to Her Majesty's forces in Afghanistan, and myself, I would like to thank the folk of Centennial Precious Metals for sponsoring the contest, to thank Gandalf the White for organizing it, to thank the Lady Waverider for being away and so unable to win it, and to thank you all for information and stimulation.

Dollar Bill

(06/04/2003; 10:14:32 MDT - Msg ID: 104094)

`*..*`

Socrates 964,
Dont forget that you have readers who look forward to your insights. That includes me. Stick around, it is interesting times.

USAGOLD / Centennial Precious Metals, Inc.

(06/04/2003; 10:31:44 MDT - Msg ID: 104095)

What you need to know before you buy your first ounce of gold...

http://www.usagold.com/cpm/goldhelp.html

Q. How does USAGOLD / Centennial Precious Metals position itself among its competitors with regard to credibility, reputability and pricing?

MK. USAGOLD / Centennial Precious Metals has always been considered one of the most reputable firms in the business and it's always been that way. We have placed literally thousands of ounces of gold with investors and our repeat business and referrals are both very strong. That doesn't happen unless you know what you are doing and your clients know that you know what you are doing. If I were to sum it up, I would say we combine the first rate services and research that you would expect from a very large firm with the favorable pricing you would expect from a smaller, client-conscious firm.

mikal

(06/04/2003; 10:42:35 MDT - Msg ID: 104096)

@Dollar Bill

Well said.

USAGOLD / Centennial Precious Metals, Inc.

(06/04/2003; 11:06:51 MDT - Msg ID: 104097)

Our Latest Buyers� Group Special . . .

http://www.usagold.com/gold/coins/bullion.html

Socrates964

(06/04/2003; 11:34:52 MDT - Msg ID: 104098)

Dollar Bill

Thanks for your gracious comments. I'm actually going to be travelling quite a bit as an attempt to stave off boredom with gold, which is a very exciting market in dollars, but a very dull market in euros/C$. I talked to my technical analysis guru last week who makes 40-50% annual returns trading Fib patterns year in year out, and he admitted that he was clueless as to which way the markets were going for the first time in 40 years but suspects that the US is heading for hyperinflation.

From a macro point of view, this market feels like Argentina, in that it was obvious to anyone with a basic grounding in economics that the economy was going over the cliff by 1997, but one had to put up with 4 years of spinning before it actually happened. The lesson to be learned from that economy is that appearances are maintained for as long as it takes the elite to get their money out.

Perhaps the launch date of the new gold bullion fund (GLD) is our best variable for judging when this might happen.

Gandalf the White

(06/04/2003; 12:19:40 MDT - Msg ID: 104099)

WOWSERS -- IT that REALLY you SPIKE ? or an ERROR ?

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Someone please give me a confirmation second source !
<;-)

Gandalf the White

(06/04/2003; 12:21:43 MDT - Msg ID: 104100)

Yep -- AN ERROR !!!!

Forgetaboutit !
<;-)

Great Albino Bat

(06/04/2003; 12:43:20 MDT - Msg ID: 104101)

Prescription from Dr. GAB.....the way to health

Dr. GAB
June 4, 03
@usagold.com

The Patient:

XXIst Century World.

Diagnosis: Humongous constipation following decades of overindulgence in unsound monetary and financial practices.

Rx/

The patient will take daily enemas for the next ten years, to flush out all malinvestment and bankrupt companies. The patient's digestive system is blocked and this produces very bad breath and pronounced lassitude.

Hundreds of millions of inhabitants of the lower intestines will be flushed out, and will have to invent jobs for themselves.

Take a daily aspirin, and call me next year.

Signed,

The GAB.

Gonlyold

(06/04/2003; 14:06:05 MDT - Msg ID: 104102)

Reply to Topaz

Thank you, Topaz, for your informative clarification. I value information like that. Thanks again.

You commented that, "The "backing" today is more closely represented by the Human resources of a Nation/Bloc. In the case of America every man, woman and child is saddled with approx $30,000 Debt..." Much said in this verbage.

I won't extrapolate too much on the above except to opinion that it's interesting to note that there is no concerted effort in America to encourage the "human resources" to stay away from credit (debt). There are no economic programs to reward people for paying off their loans. There is no advertized cautions to keep people from selling off their future labor. If anything, they are constantly bombbarded with enticements to use credit. And once the human make up of America, or any country, becomes debt ridden, how can that counry itself, not be debt ridden?

Country's use their human resources as collateral for national loans. All that labor is valuable to the lenders. So the human collateral is important from the perspective of these loans.

But what happens when the future labor is all tapped out? The only thing the country can look forward to is being obligated and controlled by the lender. Not exactly a definition of freedom.

And what about the physical gold that's purchased with instruments of debt? The American dollar, i.e., the Federal Reserve Note (FRN), is an instrument of debt. If a debt instruments, FRN's, are used to buy non-debt gold, does not that physical gold now become a debt also? Can a bankrupt debtor own anything? Scarey.....

Black Blade

(06/04/2003; 14:17:59 MDT - Msg ID: 104103)

ADJUSTING NUMBERS TO THE POINT OF UNREALITY

http://www.nypost.com/business/217.htm
Snippit:

June 3, 2003 -- YOU probably didn't catch this on the news last week, but there are now 12 seasons in the year. Yeah, seasons. Not months. Who says so? Well, not me. It's the Bureau of Labor Statistics, which, starting with the politically important employment figure that will be released this Friday, has declared that the way it had been seasonally adjusting its numbers is no longer good enough. Starting with the tally for May - which will be released at precisely 8:30 a.m. Friday - the BLS will seasonally adjust its statistics each and every month. Officially the change is to something called the "Concurrent Seasonal Adjustment for Industry Employment Statistics." You can download a full academic paper on this from the BLS Web site.

The problem is, if you adjust a figure often enough you can completely lose touch with reality. And if you are adjusting monthly for the "seasons," why not daily? Why not change the numbers whenever they aren't to your liking? Naturally, both the job growth/loss figures and the unemployment rate will be the hottest topic of conversation this week, especially since the nation's "help wanted" ads index is currently at a 47-year low and more than 400,000 people each week are now filing new claims for unemployment insurance.

Black Blade: More statistical massage coming from the BLS. They hate raw data so they fudge the numbers a bit and "smooth" data with a few other statistical filters and then selectively release unemployment data. No one in government is too pleased when someone points out the real unemployment data but then few people with media access do that anyway. Just too painful to think about.

Black Blade

(06/04/2003; 14:24:42 MDT - Msg ID: 104104)

Thanks to the recent market rally, stocks are awfully expensive again.

http://money.cnn.com/2003/06/03/markets/expensive/index.htm
Snippit:

Take a look at what's been happening in the stock market, where investors have wholeheartedly embraced the Fed's promise to keep rates nice and low for a good long time by buying everything in sight. And while it was possible earlier this year to argue that stocks were at something like an appropriate valuation, you'd be hard-pressed to call them anything other than expensive at this point. If you look at earnings under generally accepted accounting principles, the S&P 500 is trading a price-to-earnings (P/E) ratio of 31.4, up from 27.5 at the end of March. Before 1998, it had never been above 30. If you are a kind and forgiving person, you can use pro forma earnings -- the numbers that companies post before charges for stuff like plant closings, layoffs, and the like. On that basis, the S&P's P/E is 19.7, a level rarely seen before the gaga years of the late 1990s.

Black Blade: Indeed, stock valuations are absurd and we appear to be reentering the bubble again. The end result will be the same with the small fry getting burned as they get lured in and the big boys bailing out laughing at the suckers. I guess milking investors out of over $5 trillion the first time around was not enough.

Black Blade

(06/04/2003; 14:33:41 MDT - Msg ID: 104105)

With jobs scarce, more than half of this year's college graduates will head home to Mom and Dad.

http://money.cnn.com/2003/06/02/pf/college/q_gradhome/index.htm
Snippit:

NEW YORK (CNN/Money) - Study hard, get into a good college, graduate -- move back in with Mom and Dad? That's hardly what most parents had in mind as they were cutting checks for upwards of $100,000 to cover college costs. But the moribund economy has created some of the dimmest job prospects in years for grads. According to a study by the National Association of Colleges and Employers, 42 percent of employers plan to hire fewer new college graduates than they did last year. Meanwhile, only a few graduates with the most lucrative degrees can expect higher starting salaries than in years past. As a result, the Class of 2003 finds its ranks filled with so-called "boomerang" twenty-somethings. In fact, 61 percent of college seniors plan to return to their family home after graduation, according to a survey taken this spring by Monster.com. This year's class isn't the only one living at home, however. Young adults in their twenties -- some armed with graduate degrees -- have also returned to the nest.

Black Blade: With the "Bone Pile" growing and fewer jobs a lot of these new grads are finding it harder to land a job. Even those with some work experience are coming home to live with parents. I saw a report not long ago about high tech engineers and software programmers leaving the high priced Silicon Valley after being laid off to live with mom and pop. "Interesting Times"

Chris Powell

(06/04/2003; 14:48:27 MDT - Msg ID: 104106)

Newmont beats the bullion banks into submission

http://groups.yahoo.com/group/gata/message/1531Latest GATA dispatch.

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

Cavan Man

(06/04/2003; 15:53:54 MDT - Msg ID: 104107)

This information is relevant to the gold market guys.

http://www.guardian.co.uk/Iraq/Story/0,2763,970331,00.htmlWolfowitz: Iraq war was about oil

George Wright
Wednesday June 4, 2003

Oil was the main reason for military action against Iraq, a leading White House hawk has claimed, confirming the worst fears of those opposed to the US-led war.
The US deputy defence secretary, Paul Wolfowitz - who has already undermined Tony Blair's position over weapons of mass destruction (WMD) by describing them as a "bureaucratic" excuse for war - has now gone further by claiming the real motive was that Iraq is "swimming" in oil.

The latest comments were made by Mr Wolfowitz in an address to delegates at an Asian security summit in Singapore at the weekend, and reported today by German newspapers Der Tagesspiegel and Die Welt.

Asked why a nuclear power such as North Korea was being treated differently from Iraq, where hardly any weapons of mass destruction had been found, the deputy defence minister said: "Let's look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil."

Mr Wolfowitz went on to tell journalists at the conference that the US was set on a path of negotiation to help defuse tensions between North Korea and its neighbours - in contrast to the more belligerent attitude the Bush administration displayed in its dealings with Iraq.

His latest comments follow his widely reported statement from an interview in Vanity Fair last month, in which he said that "for reasons that have a lot to do with the US government bureaucracy, we settled on the one issue that everyone could agree on: weapons of mass destruction."

Prior to that, his boss, defence secretary Donald Rumsfeld, had already undermined the British government's position by saying Saddam Hussein may have destroyed his banned weapons before the war.

Mr Wolfowitz's frank assessment of the importance of oil could not come at a worse time for the US and UK governments, which are both facing fierce criticism at home and abroad over allegations that they exaggerated the threat posed by Saddam Hussein in order to justify the war.

Amid growing calls from all parties for a public inquiry, the foreign affairs select committee announced last night it would investigate claims that the UK government misled the country over its evidence of Iraq's WMD.

The move is a major setback for Tony Blair, who had hoped to contain any inquiry within the intelligence and security committee, which meets in secret and reports to the prime minister.

In the US, the failure to find solid proof of chemical, biological and nuclear arms in Iraq has raised similar concerns over Mr Bush's justification for the war and prompted calls for congressional investigations.

Mr Wolfowitz is viewed as one of the most hawkish members of the Bush administration. The 57-year old expert in international relations was a strong advocate of military action against Afghanistan and Iraq.

Following the September 11 terror attacks on the World Trade Centre and Pentagon, Mr Wolfowitz pledged that the US would pursue terrorists and "end" states' harbouring or sponsoring of militants.

Prior to his appointment to the Bush cabinet in February 2001, Mr Wolfowitz was dean and professor of international relations at the Paul H Nitze School of Advanced International Studies (SAIS), of the Johns Hopkins University.

Cavan Man

(06/04/2003; 16:37:37 MDT - Msg ID: 104108)

Wolfowitz

Really, that is completely outrageous. It must be a misquote. I can't believe it.

Jacob Marley

(06/04/2003; 16:43:45 MDT - Msg ID: 104109)

Newmont beats the bullion banks into submission ?? - #104106

Don't you think that's a bit of spin? Can you not see what this is perfect template of? When push comes to shove and deliverability is understood to be impossible without killing the deliverer ---- what happened?????

?????

Negotiate cash out at pennies on the dollar !!!! And no gold changed hands that might have helped set up this ever elusive "short squeeze".

And these were the big boys. How then will any of you as "small spec", fare any better with your single or double digit total contracts???

Just a foretaste of how it's going to work on down the line.

goldquest

(06/04/2003; 16:50:20 MDT - Msg ID: 104110)

Yeah, but...

does it really matter that the crooks in the White House,Defense Dept., Congress and big oil, lied to the American people and the rest of the world, when they have real criminals to pursue? The Martha Stewarts of the world must be taken off the streets, to make them safer for , "our children!" After all, Martha did cash in her stocks, worth about $200,000. How dare she! That is about the same amount that Hillery Clinton made a few years ago on her "Hot" tip on the futures market! Wink-Wink! It is coming unraveled for the gang of thieves. Best get your gold in possession while you can!

Cavan Man

(06/04/2003; 16:50:21 MDT - Msg ID: 104111)

Jacob Marley

Great point! That's FOA 101.

Cavan Man

(06/04/2003; 16:52:17 MDT - Msg ID: 104112)

goldquest

Yeah, and that "sea of oil" was worth blowing the kid's arms off and 86ing his parents. Go ahead and pull this eh?

R Powell

(06/04/2003; 17:03:42 MDT - Msg ID: 104113)

Socrates964

Earlier today you wrote...

"Thanks for your gracious comments. I'm actually going to be travelling quite a bit as an attempt to stave off boredom with gold, which is a very exciting market in dollars, but a very dull market in euros/C$. I talked to my technical analysis guru last week who makes 40-50% annual returns trading Fib patterns year in year out, and he admitted that he was clueless as to which way the markets were going for the first time in 40 years but suspects that the US is heading for hyperinflation"

I've always been suspicious of any and all trading systems. I suspect that excellent money management is more important than any system and that with good management, money can be made even with the toss of a coin determining one's position. However, commonly traded systems often become self-fulfilling prophesies which can be helpful if traded properly.

All that is an idle thought as I really wanted to say "Fare thee well" on your travels and also wanted to suggest that if the gold market in euros is boring, there are many others that may offer a greater challenge.

Remember too, we're never more than an internet connection away and we'll expect a full report either as you travel or upon your return. Have fun! ;>)
Rich

CoBra(too)

(06/04/2003; 17:10:15 MDT - Msg ID: 104114)

NEM's Yandal Bluff -

@ J. Marley - I guess you've touched reality.

The mega bullion bank hedgers are seemingly protected and vice versa protect their major producing hedgers. Otherwise, we'd have seen Ashanti type defaults at POG 330, 350, 370 or 390. Whoever lastly holds the bag is still unknown, though we may speculate that these guys got some kind of a carte blanche from very high up - and the bag is as always held by their trusting citizens and tax payers.

@ CM - Diplomacy is about elegantly evading reality, while the globe is now challenged by a group of US admin officials stuffing their blatant arrogance down our throats, unfiltered. At least we know where we stand - expendable ... Welcome to the new world (dis) order ... cb2
PS - and the ECB may well succumb to the international game of cutting IR's by 50bp and join the race to the bottom ... or is it beggar thy neighbour all over again ... ?

Brilliant, we sure came a long way from the memories of the 30's ...

Black Blade

(06/04/2003; 17:16:20 MDT - Msg ID: 104115)

Cobra(too) - memories

Ah yes, as philosopher George Santayana said:

"Those who do not remember the past are doomed to repeat it"

Such is life. Cheers!

- Black Blade

off to the gym!

R Powell

(06/04/2003; 17:36:59 MDT - Msg ID: 104116)

Jacob Marley

Private bankruptcy does not indicate Exchange default Any bankruptcy by any individual and/or company often leads to pennies paid on the dollar for prior contracts or obligations. This should not be confused with legitimate futures contracts which are 98% of the time settled in cash, not gold, silver, cotton or soybeans. Entrance into the exchange casino requires margin money up front and immediate additional funds if so dictated by the market movements. All trades are cleared daily with the clearing houses insuring payment for the winners. It's mostly a cash exchange with the potential for actual delivery.

Please do not confuse these exchanges with covert, private deals which default as a result of bankruptcy. The only thing these transactions have in common is that both are derivatives of the POG. Legitimate, needed drugs are available with a doctor's prescription from a pharmacy for a cost. Illegal drugs are available from your local coked out drug lord for a cost. I'll not even suggest that the two can be compared nor would I suggest that just because you might get ripped off by the drug dealer, that therefore pharmacies are dangerous. Comparing private bankruptcy settlements to futures derivatives backed by the exchanges is like comparing apples to dumptrucks or rattlesnakes to guinea pigs. Waiting for the futures exchanges to default might require many livetimes. They are simply that--Exchanges--existing by charging a small transaction fee. Private, OTC deals are simply an entirely different ballgame.
Rich

R Powell

(06/04/2003; 17:52:22 MDT - Msg ID: 104117)

Jacob Marley

Your words....

" And these were the big boys. How then will any of you as "small spec", fare any better with your single or double digit total contracts??? "

Since you asked, quite well, thank you, I caught both the spike up and retraction down in both gold and silver. I'm currently still short silver (short term) but ready to reverse at the drop of a pin. I'm always long silver, long term but always hedged. I'm not rich from trading but I am on the positive side, but, I do not recommend this endeavor, gambling, investing, whatever (pick a name) as it is much too risky, requires great effort and time, and is too hard to understand without much effort, at least, more than most people are willing to commit. Physical possession has almost no traps, pitfalls, room for error, potential for mistakes etc.
Rich

CoBra(too)

(06/04/2003; 18:19:20 MDT - Msg ID: 104118)

Late Nite Musings ...

... The western, now post industrialized, economies have smartly moved on to the next level of production. While the production of tangible and in some cases even usable goods have declined to a trickle - why, the Chinese can do it cheaper in some cases even better - the service sector, led by the financial service industry has grown exponentially in the US. Whatever memories of a productive economy we might have had is a delusion.

Well, why not. Somebody has to recycle the exponentially growing dollar debt, re-package it and sell it to the rest of the world in almost risk free, derivative hedged nutritious portions. After all the myriads of Dollar paper, uh, eletronic blips can't be digested wholesale anymore -says Greenspan - though, he finds it's a mere problem of the digestive tract. If the global community can't recycle the green stuff as rapidly as we- the FED - can grow it, then it becomes a problem of indigestion. And - even if the nutrition value of the green fodder decraeses with every repo any other fodder is still not adequately matching the mass production of at least fodder.

As some alternate paper and nutrition food producers are slowly expanding their gardens, the worlds main greenery is stepping up its production frantically in order not to lose any market share. In the process they also hedge their bets and in an unfriendly manner take over the energy suppliers to their greenhouses.

As the yields of the crop is becoming more and more ungainly and now slowly turning negative - the nutrition value of "Soylent Green" is diminishing exponentially.

... yearning for the old green, green grass of home ... and a golden sunrise - cb2

Goldilox

(06/04/2003; 18:24:10 MDT - Msg ID: 104119)

Has World Oil Production Peaked? Has World Oil Production Peaked? Has World Oil Production Peaked? Has the World's Oil production Peaked?

http://www.financialsense.com/editorials/powers/2003/0528.htmsnippit:

?Historians some years from now are going to get the giggles because my 2001 book (Hubbert's Peak: The Impending World Oil Shortage) failed to identify the year 2000 peak, even after it happened. My book attracted some criticism because it was too gloomy; turns out I wasn't gloomy enough. Back when I expected the peak to arrive around 2004, the thought of life in the post-peak years was frightening. So what has happened since the peak year 2000? More than a million jobs lost in the U.S.A., many retirement funds wiped out, government budget surplus reduced to deficit, interest rates near zero unable to jumpstart the economy. Even the loss of the World Trade Center was a Middle East byproduct. It exceeds my worst fears.'

Goldilox:

An article by Bill Powers, editor of the Canadian Energy Viewpoint, including his analysis of declining production in OPEC and some production numbers for support. I'm sure BB has a better idea of the validity of those number than I do, but here's the link to the article over at Puplava's site.

Goldilox

(06/04/2003; 18:27:13 MDT - Msg ID: 104120)

Opps

Sorry for the redundant titling, it's an error not an effect.

goldilox

Trurl

(06/04/2003; 19:24:35 MDT - Msg ID: 104122)

Black Blade #104115

I've always liked my father's spin on Santayana:

"Those who don't know history are doomed to hear it repeated."

He being a professor and all...

Goldendome

(06/04/2003; 19:43:15 MDT - Msg ID: 104123)

@21 Mabry..."The Stock Market is singing a Sirens Song."

http://www.contraryinvestor.com/mo.htmYes Sir, very probably. I just finished reading a rather extensive piece on the subject that refers to the false bull-market signals that have occurred in Japan in the last number of years. Moving avgs. crossing each other to the upside, briefly breaking above the shoulder in head and shoulders formations, etc. Here is I thought a catchy quote: ...There is an old saying in certain market circles that goes like this. "The public lost their money in 1929 and 1930. The smart guys lost their money in 1931 and the really, really smart guys lost their money in 1932." Of course the basic message of this little quip is that bear markets do their best to strip virtually everyone of their hard earned wealth. It's just the nature of the game.

Link provided: Hope it works, ok..........Gdome

Black Blade

(06/04/2003; 22:17:26 MDT - Msg ID: 104124)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Snippits:

My Laundry List of Economic Worries

The fact that we are in the midst of a storm is more apparent with each passing day. The Fed will meet this month to consider the use of "unconventional means" should the markets and economy fail to recover in response to monetary or fiscal stimulus. The idiotic assumption that the biggest worry is deflation at a time the government is already running massive budget deficits is ludicrous. The Fed is pumping vast amounts of liquidity into the system. Interest rates are at half-century lows. The housing and bond market are in bubble territory. Consumers are borrowing and spending feverishly. The trade deficit is perpetually setting records. Equity valuations border on absurdity. Energy prices are rising. And the dollar looks like it is about to fall off a cliff.

All this tells me deflation is the least of our worries.

Also:

The best advice I could give now is caveat emptor. If you're an agile trader, then trade. However, you better have a hedge. Without one, you are exposed to any unexpected event. On the other hand, if you are truly are a long-term investor, then invest in what the fundamentals are pointing to--a falling dollar and a price rise in the "things" that you need. The rise in natural gas at this stage of the weather cycle is indicating that supplies are tight and that suppliers will have difficulty getting winter storage levels back to capacity. Heaven help us if we experience even a normal winter much less a harsh one or a warmer then normal summer. Oil prices are expected to peak within this decade or the middle of the next decade depending on which forecast you view. The geologists say 2003-2006. The optimists say 2016. Regardless of who is right, supplies and the price are likely to climb throughout this decade as demand continues to grow; while production decline curves accelerate.

With the dollar expected to decline further, if a crisis doesn't erupt first sending it into a freefall, you should be diversified into hard currencies and at least own some silver and gold. With central banks and especially the Fed putting the metal to the monetary pedal, the price of the paper you hold is depreciating rapidly to the tune of 30% over the last year against the euro--about half that against other major currencies. Other basic items that I believe will do well this decade, besides precious metals, are food and water. With water, there are few options to choose from, but they are there if you look hard enough. Finally, if you have enough confidence in your convictions and are not startled by short-term moves or manias, I would also be short. The degree to which you go short depends on your risk tolerance, ability to absorb short-term pain and understanding of the fundamentals.

Black Blade: Interesting article. I was reading an article that goes into the rising competition for world oil supply in a science journal no less. The article focused mainly on the Chinese who went from net exporters of oil to net importers and the demand is growing. I see that gold is taking a bit of a hit tonight and the dollar is gaining a bit of ground. This is likely in anticipation of tomorrow's ECB interest rate cut. I suspect a 50 bps cut is more likely as the ECB would like to pummel the Euro to stimulate the EU out of a deepening cycle of recession. Meanwhile Japan is rumored to be back to "stealth" intervention selling worthless Yen to whoever is foolish enough to accept it and buying dollars. Everyone it seems wants to debase their currency. "Interesting Times"

Hektor

(06/04/2003; 22:46:41 MDT - Msg ID: 104125)

BlackBlade

The yen are not "worthless," but are just the opposite -- they are worth too much and the BOJ wants to sell them to reduce their value.

21mabry

(06/04/2003; 23:00:40 MDT - Msg ID: 104126)

Manias

I was reading a book about railroad construction and funding in the U.S. in the 19th century.It just strikes you how all financial manias suck people in no matter the century or the country, railroad stock and bond issues were floated on nothing more than a company name and a promise, just like the tech mania in our time.People have never really changed have we. An interesting side note when a railline was built in the coal burning days the downwind side of the track was pretty messy and smokey, hence are saying their from the wrong side of the tracks. Goldendome you may have to go see the mariners this year they might win the american league.

21mabry

(06/04/2003; 23:13:35 MDT - Msg ID: 104127)

Energy

Blackblade I never would presume to put words in your mouth but it seems to me you feel energy investors are in for a bull market run for at least a few years. Energy funds that I follow have had a good run so far this year some up 15 to 18 percent ytd.Do you feel people have caught on to energy investing yet,I dont really hear cnbc talking alot about these funds gains.Maybe I missed those segments, but if the public has not got in these funds yet maybe there are further big gains ahead. I just wonder if these funds are the place for new money after there recent gains.21

Goldendome

(06/04/2003; 23:22:39 MDT - Msg ID: 104128)

@21mabry

Mariners--Amazing what an 8 game winning streak will do for confidence! If only the season would end in June, the mariners might have won a few championships. Mabry, I still think the American league goes through Yankee Statium in Sept., maybe Oct.

I recently bought one of those 46 inch HDTV's after price deflation brought them down to a more reasonable price. The Hockey is quite a show on the Big Screen. My wife, at first, was hiding her eyes and "ooohing", everytime someone got boarded. Don't watch much of the regular season, but the last few years have really enjoyed following the games once the Stanley Cup Playoffs begin. After watching the fast pace of hockey (regardless the usual paucity of scoring), returning to watch the slow pace of Baseball is difficult. BTW the Anaheim Mighty Ducks tied the Final series at 2 games a piece with 2 overtime wins at Anaheim. The series resumes at the New Jersey Devils tomorrow night.

I know this is off usual subject and appologize if offending, but it seems to be an extremely slow night with only about a post an hour for the last 5 hours. Where is everyone?------Gdome

21mabry

(06/04/2003; 23:46:37 MDT - Msg ID: 104129)

Goldendome

Hockey is the most exciting sport there is I live in red wing country.I saw went and saw tigers stop Clemons try at 300 the other day,will be their only sell out of the year.Well Gdome I am hitting the hay its 3 hours latter here in the east go ducks. 21

Goldilox

(06/04/2003; 23:53:55 MDT - Msg ID: 104130)

Baseball

G'dome and 21mabry:

I hope you're ready for the Giants. They are hopping mad after blowing it in game 6 last year, and they are much better in sync as a team this year.

mikal

(06/05/2003; 00:05:57 MDT - Msg ID: 104131)

Russia and gold

http://english.pravda.ru/main/18/89/358/10148_gold.htmlNothing Is Better Than Gold
05/30/2003 14:33 by Kira Poznakhirko
Russian economists discuss an opportunity to put a golden ruble in circulation

In developed countries, almost every family has stocks or state bonds. Exchange news is the real information, people show their interest in it. They do not keep their savings at home, they make money work for the economy, the money is invested in the real sector of economy, in the production of goods and export, in the development of new technologies, and so on. This is probably the reason why the living standard of developed countries seems to be a dream for the majority of the planet's population.

It seems that Russia has chosen the way of the world's poorest and hopeless countries. There are investment tools in Russia, but they are meant for a very narrow group of "insiders." Everyone else uses notes of the American State Treasury. Russian governmental officials and bankers have been concerned about Russian people's wish to save their money at home, not in banks. The government arranged the bank reform, they passed the law about insuring people's deposits (which does not insure anything really). The result of those measures was ridiculous. The US dollar started going down, but Russians did not hurry to open bank deposits either. Therefore, the Russian bank system is not meant for saving funds and making investments. To all appearances, it is meant for something else. What if all Russians decided to bring all their money to banks one day? Nothing would change either way. Russian banks invest almost nothing in the country's economy - it is a rather risky thing to do. Most likely, that money would be used for purchasing a chalet in Switzerland or a house on Bermudas. The rest of the money would then be transferred to foreign banks in order to work for the economy of foreign countries (big money brings very good profit in developed countries without any risks). So why does Russia need such banks at all? Even Russia's largest state monopolies have to borrow funds abroad.
Experts say that it is very hard to create an efficient and reliable investment tool in Russia. In fact, there are a lot of such tools in the country, but they are not used according to their purpose. Although, there is a small group of people, who use investment tools, albeit for their personal interests only. Prices on land, apartments and other saving tools have been growing in Russia recently. The US dollar has exhausted such opportunities, and Russians do not see any other investment tool to use. However, Russian people reportedly possess up to 60 billion dollars in total - this money does not work for anything.
This "analytical suffering" will continue until the state pays attention to the most ancient and yet most reliable investment tool - gold. Economists have been arguing about the golden ruble for a long time, referring to the ten-ruble gold piece of Stalin's era and recollecting the incredible industrial growth that occurred during the ruling of Russian emperors Alexander III and Nikolay II. That was the time, when the Russian golden ruble was the most secure and stable currency in the world. However, economists do not make any decisions - politicians and officials of the Russian Finance Ministry and the Central Bank do. They are all certain that the state can grow rich without gold too. It probably can, but not the Russian Federation of the stability and moderate economic growth period.
Bloomberg reports, world prices on gold have reached the highest point over recent months - 367.8 dollars per ounce. The agency believes that the price of a troy ounce on the world market may exceed the level of $400 until the end of the current year. There is probably no other way. The US dollar has been a saving tool for the whole world, not for Russia alone. Investors do not know where to invest, that is why they prefer to buy gold. American state bonds lose their attraction on account of the interest rate reduction.
RBC news agency reports that gold does not work in Russia as an investment tool. Producers sell gold to banks, and banks sell it on world exchanges, obtaining demising dollars or euro for gold bars. The euro has been growing lately, but it will inevitably crash some day.
A common person can hardly buy gold - it is rather difficult. In addition to that, it is hard for a common person to sell it too. Jewelry does not count, for people buy it as a work of art, which is then sold as precious scrap. Analysts believe that such a situation takes place because of the tough control of the state and the taxation burden.
In general, the circulation of gold in Russia is a market for a very small group of people, it is impossible for a common person to access it. For example, one has to pay the value added tax of 20 percent for purchasing gold. When selling gold, the tax is not reimbursed. In other words, this 20 percent will go straight to the state. In addition to that, any bank will have to provide the information to fiscal bodies about anyone who purchases gold. Golden coins are not imposed with value added tax, though, and the Russian Central Bank has already launched the series production of them. In addition to it, the Central Bank periodically informs about the increase of their sales. However, golden coins cause problems as well. One can not use them in a store, selling them back to the Central Bank is not profitable either.
Why doesn't Russia use the golden ruble yet? Investment tools are not meant for common people. Probably, the government wants to make Russians save their money in Russian banks. However, people do not trust the bank system anyway. Probably, they want to make Russians save their money in US dollars. A lot of experts believe that about two-thirds of all dollars are not secured with anything. The US Treasury has a goal to trace and destroy those dollars secretly.
To all appearance, Russia has agreed to become a place, where excessive dollars are saved. There is no one to claim this responsibility - they are not in power anymore. However, all people had to pay for their decisions. Nothing is better than gold.

Topaz

(06/05/2003; 00:09:41 MDT - Msg ID: 104132)

Tilting the scales.

http://www.crbtrader.com/data/mktcom.aspThe Dollar is holding above 94 in early (E) trade...this IS fun to watch. Last eve ALL hands were to the pumps to slow the dollars rise against the SF/Euro, tonight the only heat sinque is the Yen...The Cream (sour that it may be) is rising to the top.
This ECB decision will determine whether we have a contender on our hands or not. A 25bp move (or no move at all) would be in keeping.... a 50 or 75 drop would indicate..well, OR maybe no move and some Gold noise, mmmm! that'd be nice.

slingshot

(06/05/2003; 00:16:48 MDT - Msg ID: 104133)

GoldenDome

Watching from the Shadows.
Slingshot---------<>

Black Blade

(06/05/2003; 00:18:57 MDT - Msg ID: 104134)

21mabry-energy

http://www.energypulse.net/centers/article/article_display.cfm?a_id=327
If the economy is to emerge from recession it must have an adequate supply of "cheap energy". We don't have much access to "cheap" energy anymore. There are several reasons for this but I won't go into that now as I have pointed it out on several occasions. The developing energy crisis is supply driven as opposed to demand driven. There simply is no way to get enough supply (in the case of NatGas) before winter. There just aren't that many drill rigs. So far the weather has cooperated but in a couple of weeks we should see more energy demand.

As far as investor interest in energy is concerned, it appears that the word is getting out as share prices have been steadily rising. You won't hear much about this as the financial media is geared to selling the story that all is well and the bull market has returned. They don't want to throw cold water on their "suckers rally" after all. So you won't hear a lot of news on energy and precious metals. Even Alan Greenspan said he was surprised at how little attention was given to the NatGas problem during his latest Congressional testimony. There may be more attention given when the NatGas "emergency meeting" with Energy Secretary Spencer and industry reps takes place on the 29th. (just for reference see link above)

Hopefully the administration will use this opportunity to educate the public about the consequences of not pursuing aggressive exploration and development of domestic resourses. But I doubt that will happen, therefore we will always have one energy crisis after another. People are not concerned about such things until they have to pay higher utility rates or find themselves shivering in the dark or sweating in out during power outages. Such is the human animal.

- Black Blade

slingshot

(06/05/2003; 00:29:55 MDT - Msg ID: 104135)

Mikal

Gold is not worth nothing.

USA Eagle
Russia Chevronetz
Arab Nations Dinar
Canada Maple Leaf
Austraila Roo.
China Panda
S Africa Krug.

They just make these coins to steal your Fiat. ;0)
Slingshot--------<>

Topaz

(06/05/2003; 00:45:59 MDT - Msg ID: 104136)

Dollar smokin!

http://www.futuresource.com/charts/charts.asp?r=&type=future%2Cindex&symbols=DX1%21.=V&varminutes=15&bartype=line&symlist=DX&month=1%21&year=03&study=NONE&STUDY0=&STUDY1=&STUDY2=&STUDY3=&bardensity=LOW&size=SMALL&x=32&y=13Live DX is probably 95>>>> as I type...get a look at the spikes!

Black Blade

(06/05/2003; 02:18:20 MDT - Msg ID: 104137)

Yandal hedge drama - it's not over yet

http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B285256D3B00767EDE?OpenDocumentYandal hedge drama - it's not over yet

By: Tim Wood
Posted: 2003/06/04 Wed 17:00 EDT | � Mineweb 1997-2003

NEW YORK -- One bullion bank, believed to be Goldman Sachs, has so far rejected Newmont's 50 cents-on-the-dollar offer for its stake in the Yandal gold hedge book. Six other banks have accepted the offer, including, say sources, JP Morgan, suggesting the offer was fair given the perilous state Yandal is in.

Hedging counterparties had until early yesterday afternoon local time to accept the offer. Newmont said in a statement that the acceptances represented 94% of the ounces on the Yandal hedge book and 76% percent of the mark-to-market value. The fact that 24% of the value is ascribed to the holdout bank explains its reluctance to take what's on offer.

It is the same bank that unexpectedly exercised an early termination clause last week that cumulated possible future right-to-break payments into a single $46 million claim. Newmont's ring-fenced Yandal operation, which reserves are less than its hedging commitment, apparently cannot pay the claim without triggering a bankruptcy.

The bank has apparently granted a one-week extension to the payment deadline for its termination claim as it and Newmont continue to stare each other down. Newmont has warned that its offer is final and that if it fails to get 100% buy-in from hedge counterparties and bond holders, then Yandal will probably slip into receivership.

There is no indication that Newmont intends to yield to the bank's demand for full payment.

Black Blade: I find this quite amusing. It's apparently an "all or nothing" proposition. With more committed ounces than reserves and a hedging package that is mine specific, it looks like Newmont has all the high cards.

Belgian

(06/05/2003; 03:26:33 MDT - Msg ID: 104138)

The ongoing competition between euro and dollar....

Can we still call it a "competition", when the dollar-fiat is *printing* itself out of fashion and is slowly highlighting GOLD AS INCORRUPTIBLE !?

Whatever the ECB's decision on IRs, this afternoon, or whenever...IS TOTALLY IRRELEVANT with regard to the aspects the we, goldadvocates, are observing !

Will see how the markets will "interpret" this ECB's non-event.

As long as the euro remains "visibly" more attractive than the dollar, the world's, non dollar-block, central banks will continue to offload a total of 1/2 Trillion $-reserves to be replaced with euro-reserves. This is putting a tremendous pressure on dollar-IRs and explains why the dollar-pits are yelling ! Much more $-confetti printing will urgently be needed, if CBs unload their dollars to fast, as to buy up US treasuries to keep them from falling (spike in US IRs). A possible disaster hanging as the sword of damocles.

That's why everything "MUST" be painted in the trendy "deflation" color ! Price-deflation that is, as covering flag for the ongoing crazy monetary-inflation cargo.

The main purpose of that monolitic bloc, called financial media, is to "divert" peoples attention from the GOLDEN escape route that under normal circumstances would have solved the globe's main problems already. Normal circumstances to define as FREE GOLD ! The financial brotherhood, manages to guide the sheeple, from one stream to the other, with the almost perfect avoidance of the most incorruptible arbiter of all, GOLD ! This obscene contradiction in itself must * inevitably * lead to REAL FREE GOLD !

Rumor : Russia seems to have confirmed it will proceed with the delivery of fuel for the Iran nuclear reactor. Ignore the Russian bear at your own peril !

To the Eurolanders : POG in euro seems to have bottomed ! DYOD ! NIA !

Belgian

(06/05/2003; 03:59:58 MDT - Msg ID: 104139)

Good evening Topaz...

The ECB will NOT let anyone guess "what" its real plans are ! This NEW Euro Central Bank is definitely in the process of breaking with "old" management-theories � la FED ! The ECB has a "project" besides its daily management tasks ! The euro, force de frappe, is a pure monetary given and NOT an economical one !!! Biiiiiig difference !

Black Blade

(06/05/2003; 04:09:23 MDT - Msg ID: 104140)

Survey: Economy Faces More Weak Growth

http://biz.yahoo.com/rb/030605/economy_usa_forecast_2.html
Snippit:

SAN FRANCISCO (Reuters) - With businesses holding off on new investment and consumers curbing their spending, the U.S. economy faces a year of weak growth that will not spur much new hiring, according to a forecast released on Thursday. The widely watched survey issued by the Anderson School at the University of California, Los Angeles said the economy's subdued performance resembles the slow expansion of the early 1990s that was marked by weak gross domestic product and employment growth. The world's top economy also must clear hurdles posed by severe budget problems among state and local governments that have crimped government spending, stripping out an important engine of growth, the report said. "We are stuck in the mud," said UCLA economist Ed Leamer, who wrote the report. "The year ahead looks very weak."

Consumers -- who have taken advantage of historic interest rate lows to snap up autos and homes -- do not have much buying power left to spark a strong recovery when businesses finally step in, the forecast said. Leamer cautioned that rising home prices have helped create a housing bubble that could emerge as a drag on the economy, although the most likely outcome would be a "slow leak" rather than a sharp collapse in real-estate values. "People feel wealthier than they already are but they will feel poorer when their housing values fall," Leamer said.

Black Blade: "Interesting" As always, get out of debt and stay out of debt, stash enough emergency cash for several months expenses, accumulate Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program.

VanRip

(06/05/2003; 05:41:27 MDT - Msg ID: 104141)

Black Blade

http://igadrhep.energyprojects.net/Links/Profiles/Kerosene/Kerosene.htmBlack Blade

I just read your post on the need for "cheap energy" and your report posted the other day about the increasng use of coal for energy use. Which made me wonder....

What ever happened to kerosene? When I was a kid during the depression, kerosene was very widely used. Before our house was wired, we (and just about everybody else) used kerosene lamps, which threw off a lot of light by the way, even though cleaning those chimneys was a b!tch for a kid. In addition to a coal stove for cooking and heating we also had a kerosene stove with 3 burners fed from a big bottle of kerosene. Gravity feed I think. We had a big barrel of kerosene in a shed which was used for cleaning just about everything especially machinery and tools. We even used it to kill bugs.

When we moved to a farm in Maryland right after WWII started, our house was heated by a large, rather modern lookng kerosene (called coal oil there) heater. Most homes there had something similar as well as wood/coal and kerosene stoves. Many still had kerosene lamps.

I was surprised in reading the info below that kerosene is number two in the world behind candles as the most widely used energy source for lighting. Wonder if that's really true. The way things are going, is it possible that some people here in the US may have to go back to lighting and heating with kerosene? I know some folks still use it in home heaters.

(snip)

"Kerosene consumption in the IGAD sub-region has increased steadily by an average of over 7% per annum since the mid-1980s. Governments have responded to growing urban demand, to concerns about the effects of urban energy demand on forests, and on equity concerns for the urban poor by increasing their imports of kerosene. Ethiopia now spends over US$ 20 million per annum on household kerosene compared to US$ 3 million in 1986.

Land-locked Uganda spends nearly US$ 10 million, while Kenya spends nearly US$ 40. In each case, imports represent a major drain on foreign exchange and have a significant effect on the balance of payments. These imports have positive effects on each country's forests and relieve the drudgery of cooking with charcoal and wood, but kerosene could be used more sustainably, and more sustainable solutions (e.g. battery charging, PV systems, micro-hydropower, etc.) could also be found for meeting energy demand.

Candles remain the most widely-used lighting source in the world. Kerosene follows candles as the next most widely used energy source for lighting."

TownCrier

(06/05/2003; 06:08:15 MDT - Msg ID: 104142)

ECB lowers rates across the board by 50 basis points

http://www.ecb.int/press/03/pr030605en.htm5 June 2003 -- ECB PRESS RELEASE

Monetary policy decisions

At today's meeting the Governing Council of the ECB took the following monetary policy decisions:

1. The minimum bid rate on the main refinancing operations will be reduced by 0.50 percentage point to 2.00%, starting from the operation to be settled on 9 June 2003.

2. The interest rate on the marginal lending facility will be reduced by 0.50 percentage point to 3.00%, with effect from 6 June 2003.

3. The interest rate on the deposit facility will be reduced by 0.50 percentage point to 1.00%, with effect from 6 June 2003

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. today.
------(see url)--------

Randy's notes:
Item #1(the ECB's min bid on main refi ops) now at 2% is the rate that compares against the U.S. Federal Reserve's FOMC fed funds target rate of 1.25%. Will we now see the Fed lower its own rates when it next meets June 24/25th? Probably, with the next regularly scheduled meeting not occurring until August 12th.

Item #2 (the ECB's marginal lending facility) at 3% can be compared with the Fed's discount window primary credit rate of 2.25%.

Item #3... the Fed does not offer a similar facility -- no interest paid on member bank reserves.

R.

TownCrier

(06/05/2003; 06:45:18 MDT - Msg ID: 104143)

Meanwhile across the English Channel...

Perhaps too busy eating Sir George's farewell cake to do any heavy lifting, the MPC of the BoE today decided to abstain from any change to its own rates. Cake or no cake, this decision is precisely as it has done since the last unexpected rate cut of 25 basis points February 6th brought the repo rate to 3.75%.

R.

Sundeck

(06/05/2003; 06:46:11 MDT - Msg ID: 104144)

Come back Spike!

Now that's a nice dog Spike - slow down or you'll scorch your pads...

TownCrier

(06/05/2003; 06:57:42 MDT - Msg ID: 104145)

Meanwhile out in the field somewhere...

Mother Nature held no similar policy committee meeting, but when reached for comment declared that the earth would continue its firm grip on a tight gold policy.

Assessing it all, market players promptly drove gold higher on the combined news, appreciating the contrast it offered against national and commercial paper.

R.

TownCrier

(06/05/2003; 07:11:03 MDT - Msg ID: 104146)

James Puplava takes a look at "The Catalyst" in his latest in the 'Storm Watch' series

http://www.usagold.com/gildedopinion/puplava/20030529.htmlRead it here (click url above).

Excerpts:

It has always been my contention that an investor needs to make only a few key decisions in a lifetime to do well at investing. If you can find a new investment theme before others have discovered it and then ride that trend until it plays itself out, you have the key to great wealth.

The problem with finding these investment themes is that they only become obvious long after they have developed. When the new investment idea is clear to everyone, it is usually entering its final stages. This is when the media and the general public catch the wave. At this point money floods into the sector and carries prices to the extreme.

...The simple reason markets are moving today is because central bankers, especially the Fed, are creating vast quantities of credit. This huge ocean of money is looking for a home. Presently that home is paper assets of one form or another because it is the only market large enough to accommodate it. Central bankers may be able to manufacture credit, but they can't always control where it flows.

Right now that credit is flowing back into the financial markets, especially the bond and stock markets. This is pushing valuations to absurd levels both in the stock market and in the bond market where interest rates on the ten-year note hit a 45-year low last week at 3.31%. Unlike the stock mania of the late 1990s, today's mania is even more extreme, since there is a greater degree of credit that is helping to fuel it. The result of this infusion of credit is that instead of just one mania in stocks, we now have multiple manias in stocks, bonds and in real estate.

...We are now at a perilous juncture in the financial markets. The Fed's attempt to revitalize the economy and markets through interest rate cuts have failed. Fed policy options are now approaching the end of the line. It is taking stronger and stronger measures to achieve the desired result. The Fed is between a rock and a hard place. If it continues on its present course, it risks creating rampant inflation leading to an international flight out of the dollar, which could then lead to economic and financial disintegration. If it chooses to accelerate monetary expansion, it could in effect shatter the whole monetary system based on the dollar standard. On the other hand, if it refuses to accelerate credit creation, the consequences would lead to a severe depression. I believe this is the Fed's greatest nightmare -- the looming ghost of another Great Depression. For these reasons it is pumping money furiously, monetizing debt and intervening through back channels in the stock market. The Fed is pumping money into the banking system, which in turn is financing the government deficit. And the government is also doing its part by spending feverishly and thereby creating deficits. Jointly, they hope to delay another depression.

...We have now arrived at a new paradigm -- a new catalyst -- that will drive money out of paper into hard assets because of a flight out of the dollar. You can see this trend in the graphs below, which show the dollar, interest rates and gold. While the smart money exits the dollar and heads into gold and silver, the herd is still chasing the last bull market in paper....

----(see url above for full article and charts)----

Call Centennial today to diversify your portfolio with gold and make what could perhaps be that one "key decision of a lifetime" as mentioned here by Mr. Puplava.

R.

WAC (Wide Awake Club)

(06/05/2003; 07:41:04 MDT - Msg ID: 104147)

Saudi scraps $15 billion Exxon gas deal

http://uk.news.yahoo.com/030605/80/e1mqx.htmlDUBAI (Reuters) - Saudi Arabia has killed off a chance for an Exxon Mobil (NYSE: XOM - news) -led consortium to gain entry into its vast gas fields -- declaring a $15 billion investment project null and void effective June 15.

The kingdom's oil minister Ali al-Naimi on Thursday made good on his threat to develop the country's gas reserves without the world's top oil multinationals if they failed to accept Riyadh's commercial terms by June 4.

"Saudi Arabia has cancelled the Exxon-led deal for South Ghawar effective June 15," a Saudi industry source told Reuters. Other potential investors are Royal Dutch/Shell and ConocoPhillips (NYSE: COP - news) .

Mr Gresham

(06/05/2003; 07:50:17 MDT - Msg ID: 104148)

Vertigo

http://quotes.ino.com/chart/?s=NYBOT_DXY0Yikes! Spike wakes up, looks out his doghouse door, sees waterfall across the street, gets dizzy feeling. Well, that's enough coffee for you, Bud; back to bed.

BTW, being 2/3 of the way through my real estate extraction process(es), and counting on IRs holding long enough to cover my exit, and the final deal going smoothly so far, me -- Mr Worrier -- has just lately been wondering if the system trainwreck would come along just before to keep me from getting that liquidity I want. Not today, Boyz! Pleeeezzzzzz...

ECB is reminding me of that story (was it from FOA?) about the two hikers and the bear. Euro still has to only outrun the Dollar. It'll never be a "hard" currency in times like these, so maybe that explains Spike?. Europeans are told "Don't count on us for your savings."

But I'd still like to see confirmation that it's no longer the Keynesians in charge over there. We still haven't seen parallel affirmation of FOA's ideas about Euro's connection to gold, have we?

Now, down to read Belgian & all.

Gandalf the White

(06/05/2003; 09:00:27 MDT - Msg ID: 104149)

YES, Mr. G !!! SPIKE hit his head on $370. AGAIN !!

Please SPIKE, wait for SPOT to catch up with you !
THEN you BOTH can jump through $370.
JUMP SPOT, JUMP !!
<;-)

Magister Aurelius

(06/05/2003; 09:15:44 MDT - Msg ID: 104150)

Weird....

Has anyone noticed that while gold is very active, the spot chart for silver has not moved a single tic today? It's only a Thursday so the market shouldn't be closed for a holiday. Is the market closed or is this just an amazing example of manipulation going on? Or was the spot silver market closed for reasons the Cartels don't want out there?

mikal

(06/05/2003; 09:23:48 MDT - Msg ID: 104151)

Market action

"Persistant U.S. dollar weakness in the face of general equity strength which produces U.S.$ demand means persistant large dollar selling." -James Sinclair, June 4, 2003

mikal

(06/05/2003; 09:28:32 MDT - Msg ID: 104152)

"Market Action"

I see U.S. equities are dow a bit today, and the J. Sinclair post is meant for YESTERDAYS market action. But still relevant to today's action.

mikal

(06/05/2003; 09:30:20 MDT - Msg ID: 104153)

Correction

"dow" should read "down".

mikal

(06/05/2003; 09:38:07 MDT - Msg ID: 104154)

@Magister Aurelius

http://www.gold-eagle.com/intra-daykit.htmlSilver is trading as this chart shows with it's tight compression around 4.48 U.S.$, alongside three other metals.

Magister Aurelius

(06/05/2003; 10:00:49 MDT - Msg ID: 104155)

thanks mikal!

Thanks! The Kitco chart I was looking at was just too imprecise.

21mabry

(06/05/2003; 10:16:36 MDT - Msg ID: 104157)

Layoffs

The other day goldilox reported about fedex laying off 14,000 people.In my humble opinion this layoff showed me just how week this economy is.I am very familiar with the company as at one time I was one of those crazy fedex couriers who run in and out of your office. Fedex is a company that prided its self on never having laid anyone off in the history of the company 30 some years. When I was there we almost had to much buisness if there is such a thing we worked as many hours as we wanted.Being laid off from fedex never crossed anyones mind. Companies like ups and fedex have become such integral part of some buisnesses that you were viewed almost as part of the companies work force. Before fedex aquired rps ground deliveries they were doing about 3,000,000 air delivery packages a day. I would be interested to know what the air division is doing now.I can assure you there were some people in shock when those layoffs were annouced. Watch UPS now they are the big boy in the industry if they layoff people its real bad.

Pizz

(06/05/2003; 10:28:36 MDT - Msg ID: 104158)

Mr. Gresham

The real estate liquidation race? I'm a few hundred yards behind you with the same thoughts and fears.

My goal was to try to liquidate just after this bottom in rates. Buyers will panic if rates start to uptick and I hope to hit that window (assuming my wife's paint brush, the carpet and linoleum contractors, etc. are all on the same schedule). Trying to mico manage a move via a spouse and cell phone is something I hope to have to do only once. . .

Here's hoping the FED is our friend for a few more weeks, and since I am nearly always early in my investment decisions. . . . .

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

Spooky thing is the reaction to the Euro rate cut. Not quite what I was expecting, but when was the last real good currency war?

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

Unemployment numbers are no surprise, and they're just starting. I'll be taking the ax to excess and marginal personnel in the September/October period. We don't have to announce as do the auto manufacturers, but both auto's and housing should have a pretty ruff winter. Lean and mean thru the winter, and create a sweat shop of sorts next spring and summer to take advantage of some pent up demand and the election cycle. This means very few if any new hires as we pick up a bit next year, and then head for the bottom after the 2004 elections.

That's our company plan right now, subject to change as usual, but many executives, bankers, etc. that I talk to are of the same opinion.

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

Move to the sticks about 80% done (sell the homestead only thing left). Lost high speed internet and am back to modem . . . .here hoping I personally decompress enough to not notice the difference in a couple months.

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

Deflation is still not an option, but he will pop his ugly head up now and again, but not in PM's. . . .

Pizz

21mabry

(06/05/2003; 10:37:38 MDT - Msg ID: 104159)

Shipping costs

Just another thought on the overnight shipping buisness,if you use these services alot at your place of employment or your own buisness now might be the time to lock in some long term contracts with them. It looks like you will be barganing from a position of strength. I know some people on the forum own their own buisness and times are tough. Just some money saving shipping advice.If you can use 2 day or economy service use it dont use priority unless you need to.Fill out your shipping airbills completly if you dont the courier automaticaly assumes you need priority shipping. Ask your customers if they will accept afternoon delivery instead of morning you will save money. Make sure you have correct delivery info these companies charge extra for wrong addresses and rerouting packages. Now I am off to check the paper markets.21

Gonlyold

(06/05/2003; 12:43:00 MDT - Msg ID: 104160)

US Finds More Gold in Iraq

Just heard on CNN..

The US military found another truck carrying 1100 (1300?) bars of gold trying to leave Iraq. This is the second such find. Stay tuned for further info.

Gold, it's out there!

7nomads

(06/05/2003; 12:46:19 MDT - Msg ID: 104161)

Re: Yandal hedge drama - it's not over yet

It's hard to say anything without the numbers, but I remember seeing real estate promotions offering foreclosed properties at a steal because when a property is foreclosed on all leases on the property are considered void.

Might this be the case for the Yandal property(ies)? Maybe,its Newmount that is trying to hang on to a 3 million oz reserve that may double in value over the next few years.

Or perhaps, one bank has wised up and is looking to hold physical (even under ground reserves) rather than the paper options they now hold.

Gonlyold

(06/05/2003; 13:14:41 MDT - Msg ID: 104162)

More on A Gold Standard? (Of Sorts)

http://www.jsmineset.com/s/Home.asp
James Sinclair discusses the issue on his website linked above, in part 4 of a media presentation. If you have Windows Media Player capability, the 4 parts are both audio and visual. In the first 3 parts he discusses what he feels is needed for a real Bull Market in Gold. Those items in his opinion are:
1) The dollar declining from a discernable historic top.
2) A negative trade balance in the context of:
3) A current account deficit in excess of 5% of GDP
4) A political and Federal reserve policy to fight deflation with monetary and fiscal stimulus, to flood the markets with dollars.
5) (and this is not in place yet) We must have a declining Bond Market. When #5 arrives, it will set off a Gold appreciation much greater than we have seen to this point, with only the other 4 elements in place.

Sinclair sees the situation that the Gold Cover Clause for the currency will be re-instated to save the dollar. But re-instated in an up-dated fashion, based on the value of Gold --not the volume of gold, backing the dollar. The price of gold would rise in value with a rise in the stock of paper money. He sees some sort of an index derivitive market linking Gold price to the Dollar volume increase. This derivative index would be traded by speculators in the market place. ( I don't see how this really would solve anything myself, because isn't the link between Gold and the dollar in the hands of speculators and manipulators now on the Comex a problem? Allowing Gold to be controlled?) Sinclair, also, doesn't offer what the new cover clause price of Gold would be initially.
----------------Gdome

Belgian

(06/13/2003; 01:10:18 MDT - Msg ID: 104540)

Political Solutions !!!!

Last sentence in TIH's post #104525, where ex guru Leushel says as much as that the accumulated Insolvencies and Debts can ONLY be solved with * POLITICAL SOLUTIONS * hereby referring to "inflation".

Inflation = currency depreciation (and nothing else !!!) and this is a "political process" ! Conclude that "politics" create the problem and solve it. The problem of currency depreciation and solving it with "MORE" currency depreciation !!!

That's why we went from a Goldstandard > Gold dollarstandard > Gold exchange standard > dollarstandard > NO STANDARD AT ALL !!!

One does NOT need to know what these different standards thoroughly mean. There is only ONE constant in this last 100 years of standard-evolution : PERMANENT DETORIATION OF THE GLOBAL MONETARY SYSTEM(s) !

The present "no standard at all" is a system where the central banks (FED in particular) think to give evidence of their omnipotence in their perceptive creation of a standardized, stable monetary (dollar)system. In other words : We, the central bankers are as good as Gold and the Goldstandard of 100 years ago !!!-???

The massive growing insolvencies, debtbergs, defaults, profitless economies ARE NOTHING compared to the global "paperization" of real economic activity. This process of global paperization IS the political ticking time-bomb !

Maybe we should concentrate on explaining, in simple words, what exactly is "confetti-creation" !? Any takers ?

The Invisible Hand

(06/13/2003; 01:24:57 MDT - Msg ID: 104541)

Screw all governments!

http://www.law.uc.edu/CCL/34Act/Gonlyold,

You are asking me to give you one reason why you should believe in "your" (sic) government leaders which includes the SEC.

You should NEVER believe government. Government earns its money through taxation whereas the thief doesn't come back periodically, neither does he (the thief) pretend to be stealing in the general interest.

As to the SEC, it should be abolished immediately (if possible with retroactive effect � how to achieve that retroactive effect is another question) as the market is perfectly able to perform the functions which the SEC bureaucrats are supposed to perform at taxpayers� expense.

Spotlight's question was however how to turn the SEC rules against the government's accomplices, i.e., in this case, JP Morgan/Chase. Just as I advocate the immediate abolition of the SEC rules as they are applied to honest businessmen, I think it's only fair those rules be, in the meantime (and thereafter also) applied to the bureaucrats (and their accomplics) who screw society.

Why you should believe government? Of course, never believe government. Although the rule of law is indeed an illusion, government has however to maintain a kind of facade. Now if you back to the SEC's website, you will find on
http://www.sec.gov/about/laws.shtml#secexact1934
that the SEC was instituted by the Securities Exchange Act of 1934.

The site continues:
With this Act, Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of the securities industry. This includes the power to register, regulate, and oversee brokerage firms, transfer agents, and clearing agencies as well as the nation's securities self regulatory organizations (SROs). The various stock exchanges, such as the New York Stock Exchange, and American Stock Exchange are SROs. The National Association of Securities Dealers, which operates the NASDAQ system, is also an SRO.
The Act also identifies and prohibits certain types of conduct in the markets and provides the Commission with disciplinary powers over regulated entities and persons associated with them.
The Act also empowers the SEC to require periodic reporting of information by companies with publicly traded securities.

If you're still not convinced, you can look the text of that Act in a Law library or on the web. I have given you the link above. Read that and if you still have any doubts, I will be happy to assist you.

Black Blade

(06/13/2003; 02:08:09 MDT - Msg ID: 104542)

Gold Bugs Get Their Answer

http://www.insightmag.com/news/439175.html
Snippit:

Gold bugs have for years contended that the price of gold has been manipulated by bullion banks in cooperation with the central banks. Based on the admission of Barrick's attorney, it appears the central banks are indeed very much involved if only to assist in Barrick's defense.

Black Blade: OK, one more time.

Aristotle

(06/13/2003; 02:46:09 MDT - Msg ID: 104543)

Answering Topaz

Hi mate. I guess I didn't stitch my words together very well if I left you scratching your head (as you say, "I'm unable to distinguish between Debt (IR's)...and Credit (Bond Yield).")

Since I was talking about the Federal Open Market Committee policy directive (i.e., bankerspeak for fed funds target) as compared/contrasted with the European Central Bank Governing Council's main refi minimum bid, it was the near cash market (hence, overnight IRs) that I was especially focusing on in my post when I said, "For a moment, fancy yourself a big-time financial agent with massive supplies of dollars and euros at your disposal. If the going overnight market rate were...etc etc etc"

So you see, it was the overnight dabblings in the likes of fed funds and EONIA that I was drawing upon to color my hypothetical big trader's world in the near neighborhood of the central banks, not *not* the more far out credit/bondyield thingie that ought *ought* to represent the market boys factoring in their concurrent exchange rate expectations.

I stress *ought* because you'll note that Fed VP Ferguson told/reminded the world that same day (Wednesday) and not for the first time that "a central bank could expand its open market purchases of longer-term government securities, in sizable quantities if necessary, to drive term premiums lower..." I'll bet anyone that follow's Townie's Fed reports can tell us what effect that sorta thing would have on bank reserves and money supply. To(ward) the moon, Alice! That might qualify as a partial answer to Belgian's #104540 appeal for takers on the meaning of "confetti-creation" although, alas, not in the hoped-for "simple words."

If that's not enough, try Fergie's follow-up on for size. "Alternatively, as economists have long recognized, a central bank could [...] operate in the forward interest rate market. If such actions were successful, yields on longer-term government securities would decline. Through arbitrage across financial instruments, yields on longer-term private instruments, such as corporate bonds and home mortgages, would likely follow suit." Nice and roomy, ain't it? But it comes with a confidence warning:

"Such a situation would give rise to a risk that the targeted security might become disconnected from the rest of the yield curve and private interest rates,"
i.e., that is to say "disconnected from the *real market*." Does that sound familiar to some of the *paper*Gold refrains a few of us have long been singing about around here? Yesssss!!! The chorus grows stronger as more people may now begin to understand/accept the meaning and possibility of it all. That is to say in parallel: paperGold goes isolated down while metalGold goes distinctly up!

Gold. Get you some. --- Aristotle

Toolie

(06/13/2003; 02:55:32 MDT - Msg ID: 104544)

Dollar Bill

Thank you!

Belgian

(06/13/2003; 03:17:16 MDT - Msg ID: 104545)

@ Goldendome

Sinclair is simply twisting around : A FREE PHYSICAL GOLDMARKET ! And he would like it to be a *dollar*-goldmarket in order to save the dollar ! Analyse the meaning of the Gold Cover Clause and make your conclusions about the probability of such a (political) initiative !?

Topaz

(06/13/2003; 03:55:25 MDT - Msg ID: 104546)

Ari. All.

http://www.mises.org/fullarticle.asp?control=1250&month=57&title=Has+a+New+Bull+Market+Begun%3F&id=57There's a nice coincidence, open my favourite Forum and am greeted by an Ari post (to mois!!).
Yes indeed my Friend, enough to put the wind up any old Capitalist eh? Mr Fergusons "threat"...and I believe that's all it was, (although they may even now be covertly doing just that) ,opens the door to massive repos and consequent Hyper if done in the open...buying the Curve...woooo!
Raises the spectre of a concerted (in concert) Western Bloc CB assault on the combined accumulated private Dollar-holder Capital...Do you think they'll try to force a Euro transition...OR collapse it out of spite?

The Link (via Kitco) is as good a look at where we are as I've seen, Shostak does good imo.

Topaz

(06/13/2003; 04:19:10 MDT - Msg ID: 104547)

Gandalf...and Ari (again)

Oh Gandy! it's Friday the 13th...AND a Full Moon...are those Mutts of yours securely tethered??
Ari:
My prior reply neglected to thank you for your concise explanation of the post referred to. An omission I can put down to the fact that it is Friday eve here in Oz...and I AM sufficiently imbibed

Belgian

(06/13/2003; 04:47:07 MDT - Msg ID: 104548)

Indeed Ari....

Your correct diagnosis " * DIS-CONNECTION * ! And oh dear, to what an enormous extend and multitude.
The cure to "re-connect" will inevitably be a political one.
Unexpected and schocking ! Gold will be part in/of it, directly (Free Gold) or indirectly (Devaluations).

Snow thought it necessary to reconfirm dollar-strength policy...whilst Wim was reconfirming euro-policies !

Belgian

(06/13/2003; 05:11:18 MDT - Msg ID: 104549)

How "they" want it for the next 6 months....

- FED IR cut by 0,5 % to 1,25% - 0,5% = 0,75% !!!
- Euro - dollar up to 1,20 - 1,25 !!!
- POG up to 360$-370$ (Why not 380$-390$ in the allowed overshooting) !!!
- Stockmarket consolidation !!!

And here it comes... : All should short Gold at the next uptick, and...GOLD HAS NO PLACE IN ONE'S PORTFOLIO...!!!

The dollar-standard Oracles have spoken ! Remain more dis-connected, further down the road, ALL TOGETHER NOW ! Up until we "HAVE" to surpise you with the coming "HYPER_INFLALADIDA" !

Ohhh,.... what a fine orchestra !

You are being guided by ...thieves, Yep, self proclaimed, bening, Robinhoods.

Topaz

(06/13/2003; 05:28:49 MDT - Msg ID: 104550)

Just for fun, print these and WATCH!

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9The e-trading shows Bonds firing again (Yield lower)...should drag $ lower (Gold up)... both yet to react.
Do CB's control the Markets? Does a Chicken lay an Egg?

Sprout

(06/13/2003; 06:59:11 MDT - Msg ID: 104551)

This is only a

*TEST*

Socrates964

(06/13/2003; 07:57:58 MDT - Msg ID: 104552)

JPM derivative honcho to head FRE/FNM regulator

One thing I admire about the Bush administration is their consistency.....

http://biz.yahoo.com/djus/030612/1713001217_2.html

White House Sends OFHEO's Brickell Nomination To Senate
Thursday June 12, 5:13 pm ET
By Dawn Kopecki, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- After months of delay, the White House hurried to the U.S. Senate Thursday the formal nomination of a new director of the federal agency that regulates Freddie Mac , just three days after the company booted its top executives over problems with its accounting practices.
The White House tapped Mark Brickell, a former managing director for J.P. Morgan's derivatives group, to replace Democratic-appointee Armando Falcon at the Office of Federal Housing Enterprise Oversight just as the agency comes under fire for mishandling possible accounting misdeeds at Freddie Mac.

OFHEO is Freddie Mac's and Fannie Mae's safety and soundness regulator.

Brickell has more than 25 years of risk-management experience and a keen understanding of the way Fannie and Freddie do business.

Brickell's nomination has languished since the White House announced it in early February. The Senate Banking Committee has to vet all financial regulatory nominees, which also need confirmation by the full Senate.

Committee spokesman Andrew Gray said the committee's Chairman Sen. Richard Shelby, R-Ala., will schedule the nomination hearing as soon as Brickell completes a committee questionnaire and some other related materials.

"When they have their paperwork completed with the committee, we move expeditiously to process nominees," Gray said, adding that a hearing could be scheduled within the month. "It depends on when he's able to get his committee questionnaire and statements" finished.

Although Brickell has spent some time in Washington lobbying for J.P. Morgan, most his career has been on Wall Street. He is currently the chief executive of Blackbird Holdings, an electronic trading system for derivatives contracts.

Brickell also chaired the International Swaps and Derivatives Association from 1988 to 1992.

By comparison, Falcon has spent his entire career in Washington, working as chief counsel on the House Banking Committee for almost 10 years before taking over OFHEO in 1999.

The decade-old agency has been pegged in the past as a cheerleader for the companies it regulates and as an underfunded and ineffective disciplinary against the two most powerful mortgage companies in the U.S. Fannie and Freddie own or guarantee 45% of all outstanding residential mortgages in the U.S. Their combined mortgage portfolios are valued at more than $1.2 trillion, and the combined value of the mortgage-backed securities they guarantee for other investors is $1.5 trillion, according to OFHEO.

Lawmakers have been especially critical of OFHEO's handling of Freddie's recent accounting problems, which is now the focus of a federal criminal investigation. The agency signed off on a report last week that credited Fannie and Freddie for their strong management and internal controls - only to cite weaknesses in those areas three days later when the Freddie admitted to employee misconduct tied to its accounting woes.

-By Dawn Kopecki, Dow Jones Newswires; 202-862-6637; Dawn.Kopecki@dowjones.com

Cavan Man

(06/13/2003; 08:01:37 MDT - Msg ID: 104553)

Good morning Vietnam!

Dozens of Iraqis killed in battles with US forces
AP
13 June 2003

American forces killed 27 Iraqi fighters in a ground and air pursuit today after a tank patrol north of Baghdad came under attack.

US Central Command said an "organised group" ambushed the tanks with rocket propelled grenades in Balad, about 35 miles from the capital. The statement made no mention of US casualties.

The patrol returned fire and killed four of the assailants in the initial gunbattle, the military said.

When the rest of the attackers fled, Apache helicopters joined the chase along with tanks and Bradley Fighting Vehicles, killing 23 more assailants.

The attack was another indication of increasing resistance to the American�led occupation of Iraq, since the war was declared over on 1 May.

Since then, about 40 Americans have been killed

Cavan Man

(06/13/2003; 08:03:35 MDT - Msg ID: 104554)

Repost

Cavan Man (06/12/03; 07:53:16MT - usagold.com msg#: 104510)
"We are strong......we are united"
Just in case, make mine GOLD.
Duisenberg- little chance G8 economic cooperation
Reuters, 06.12.03, 7:55 AM ET

BRUSSELS, June 12 (Reuters) - European Central Bank President Wim Duisenberg on Thursday said there was little prospect for international cooperation to address pressing global economic problems.

Asked by European Parliament committee members about the need for international cooperation to tackle problems such as the burgeoning U.S. current account deficit, Duisenberg said there was little inclination among Group of Eight (G8) countries to cooperate.

"I am not present at the G8, but I know the attitudes on both sides of these two oceans and I see little practical possibility to really cooperate or coordinate in the field of economic developments," he said.

Europe would be on its own in facing problems such as the price and exchange rate adjustments implied by the rebalancing of the U.S. current account deficit, which is approaching five percent of U.S. gross domestic product.

Yet Europe was not helpless, Duisenberg said.

"We are a factor not to be ignored in the world. We are strong and at least economically, we are united."

a nation of one

(06/13/2003; 08:50:10 MDT - Msg ID: 104555)

speaking of the emperor's clothes, ....

I like Jim Sinclair's writing style, and I'm sure he is a fine person. I visit his web site most days. Often what
he says rings a bell. But really, if someone is in the business of giving advice and making predictions,
shouldn't the advice and predictions be correct once in a while? I am sure there are 125 reasons why POG
hasn't gone to 408. But shouldn't a predictor know that there are 125 reasons why it won't go there?

alkahulik

(06/13/2003; 09:41:51 MDT - Msg ID: 104557)

Black Friday

When Black Friday comes.
I be selling my stocks and buying gold.
I wont stop until all my Telecom's are sold.
The talking heads, I wont listen to ya.
Cause I can see right through ya.
Sure don't want to be selling you my soul.
When Black Friday comes I'll have the means.
Cause I'll be counting my gold beans.

Belgian

(06/13/2003; 09:48:42 MDT - Msg ID: 104558)

Cavan Man's repost : Duisenberg and G8

Decodation of his message (attitude) : The dollar and the euro are on their own and we (ECB) support or don't support (cooperate with) the dollar and dollar-policies, only at our own euro-convenience.

Why else does the dollar wants the euro to follow (in lockstep) the dollar-IR down to zero !?
Funny, that this is not expected/demanded from the dollar's UK, willing partner (pound-3,5%)!?

FED and ECB, two different animals as are both economies.
Consequently, monetary policies and management of Goldreserves must be different !

Gandalf the White

(06/13/2003; 09:49:18 MDT - Msg ID: 104559)

*** WELCOME ***, Sir Sprout !!

Sprout (6/13/03; 06:59:11MT - usagold.com msg#: 104551)
===
WELCOME to the TABLEROUND Sir Sprout !
Pull up a chair next to me.
We all await your next posting.
<;-)

Gandalf the White

(06/13/2003; 10:13:14 MDT - Msg ID: 104560)

THAT was PERFECT !!, Sir Socrates -- A fox in charge ot the Henhouse !

http://biz.yahoo.com/djus/030612/1713001217_2.htmlSocrates964 (6/13/03; 07:57:58MT - usagold.com msg#: 104552)
JPM derivative honcho to head FRE/FNM regulator
One thing I admire about the Bush administration is their consistency.....
===
THANKS Sir Socrates !! Question ---
Do you also think that Mr. Brickell's first directive to FRE will be to buy MORE DERIVATIVES, from BLACKBIRD HOLDINGS ? --- OR, sell, unwind, and terminate some of the existing DERIVTIVES at a loss through BLACKBIRD HOLDINGS ?
<;-)

===
WASHINGTON -(Dow Jones)-

The White House tapped Mark Brickell, a former managing director for J.P. Morgan's derivatives group, to replace Democratic-appointee Armando Falcon at the Office of Federal Housing Enterprise Oversight (OFHEO) just as the agency comes under fire for mishandling possible accounting misdeeds at Freddie Mac. OFHEO is Freddie Mac's and Fannie Mae's safety and soundness regulator.

Brickell is currently the chief executive of Blackbird Holdings, an electronic trading system for derivatives contracts.
===
NAW !!
<;-)

Gandalf the White

(06/13/2003; 10:20:29 MDT - Msg ID: 104561)

NICE $5 move there SPIKE and SPOT !!!! --- KEEP JUMPING !!

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Looks as if SPIKE and SPOT are ending the week in the right direction !
<;-)

Sprout

(06/13/2003; 10:28:01 MDT - Msg ID: 104562)

Thank you for welcoming me to the TableRound Sir Gandalf

I'd like to also say Thank You to the Fine People here at USAGOLD for setting up this marvelous Round Table to discuss Past, Present and Future ongings in our
(Gold) World, and Second to the Truly Remarkable People that visit here to fill our heads with such Knowledge!

Would also like to add that I have been a Lurker of this site for a few years now and was wondering how in the ? I would even fit in. (It seems this is the Only Place, I do fit in) imo
On that note:

I saw Tony Blair in France the other day with Jacques Chirac.
Tony Blair was quoted as saying:

"Britain's future lies in full-hearted membership in the EU"

Also earlier in the week - OPEC stated its continued support for the Dollar, but also hinted? at working the Euro into use.

Now these two comments sent my Brain into Overdrive.

Is it possible that Both, OPEC and the UK (Tony Blair) support the Euro, but would rather let the Dollar kill itself, rather than be the ones that actually stick the Dagger into the Dollars Heart, and also at the same time Signal they were ready to Jump Ship if needed?

And if I may stretch this out a bit without expressing to many Thoughts at one time,
I'll call it Pent up Thoughts. ;)

Reference Antal Fekete's Quartermasters of Inflation piece.
It appears to me, that the Bond Speculators have Milked that Cow Dry!
Am I way off base on this?

TIA

Socrates964

(06/13/2003; 11:18:10 MDT - Msg ID: 104563)

Gandalf

"THANKS Sir Socrates !! Question ---
Do you also think that Mr. Brickell's first directive to FRE will be to buy MORE DERIVATIVES, from BLACKBIRD HOLDINGS ? --- OR, sell, unwind, and terminate some of the existing DERIVTIVES at a loss through BLACKBIRD HOLDINGS ?"

Socrates knows nothing as ever, but suspects that he'll get FNM to do the former and FRE the latter. That way, assuming that FRE cracks first, he can claim that FNM a) is in a different line of business to FRE and b) only started to take on new derivative positions after it got the all clear from the regulator.

USAGOLD / Centennial Precious Metals, Inc.

(06/13/2003; 11:57:57 MDT - Msg ID: 104564)

Our Latest Buyers� Group Special . . . featuring BULLION!

http://www.usagold.com/gold/special/current.html

Belgian

(06/13/2003; 12:04:48 MDT - Msg ID: 104565)

@ Sprout

Tony went to Chirac ! Chirac didn't go to Tony. Significant difference. British soldiers are on a very low profile (almost invisible) in Iraq in contrast with their American allies. An example of how the UK, maneuvers to keep doors (gates) "open". Think you guessed it right about the UK's, ambigious, attitude versus the dollar-euro evolution.
The UK "will" jump into EMU (EU) when the dollarship is making water and risks capsizing.

Fekete has it right on his Bond-IRs theories ! Is the Bond cow dry ? One can theortically continue to halve the IRs on and on...0,75...0,35...0,17...
Coerced, Endless de-connection. Building the base for future *PRICE* Hyper-inflations, that might evolve into the coup de grace for the dollar (reserve). Re-connecting with the reality...rising interest rates will cause a disaster if the global economy (THE PROFITS) hasn't given evidence of revival.

Wellcome on board, Sprout.

Cavan Man

(06/13/2003; 13:03:25 MDT - Msg ID: 104566)

EU vs. US

Subject: Hydrogen and renewable energyEU is moving agressively ahead. Conference in Brussels this coming week. Their "roadmap" will be unveiled. Focus is on renewable/sustainable. In stark contrast, US has yoked hydrogen to fossil fuels; creating hydrogen from fossil fuels rather than renewable sources. I'm not in a position to comment one way or Another. I simply wish to underscore the fundamental differences separating the two continents rund far and wide.

Gandalf the White

(06/13/2003; 13:11:05 MDT - Msg ID: 104567)

WOWSERS !!! --- Looks like a new closing LOW for the US$ !!!

http://www.futuresource.com/charts/charts.asp?r=&type=future%2Cindex&symbols=DX1%21.=D&varminutes=&bartype=bar&symlist=DX&month=1%21&year=03&study=NONE&STUDY0=&STUDY1=&STUDY2=&STUDY3=&bardensity=LOW&size=SMALL&x=37&y=8My Crystal Ball says NEXT week should be "VERY INTERESTING" !!
<;-)

Black Blade

(06/13/2003; 13:34:59 MDT - Msg ID: 104568)

Stock Market Recovery

Well whaddya know, it looks like in spite of very grim economic data and earnings warnings (not to mention daily corporate scandals), we once again have a last hour equities rally. What's this now, a last hour rise in 15 of the last 16 trading sessions? And on either no positive news or even gruesome economic data. Very "interesting" indeed.

- Black Blade

R Powell

(06/13/2003; 14:44:27 MDT - Msg ID: 104569)

Gandalf's answer and COT report

http://www.cftc.gov/dea/futures/deacmxsf.htm I can now safely disclose that the answer (short term as in one day) to yesterday's question is "X". I wasn't holding out on you, honest, I would have told you this yesterday but I didn't know.

I like that X and O form of timeless charting. It clears some of the clouds out of the picture. Impatience is the cloud maker.

The link is to the COT report for those who have an interest in such.
Happy Weekend !!
Rich

Goldilox

(06/13/2003; 14:52:04 MDT - Msg ID: 104570)

Hydrogen and renewable energy

@ Cavan Man

Interesting timing. Willian Clay Ford was on CBS this morning talking about Ford's commitment to Hydrogen, Fuel Cell, and Hybrid technologies. Is he letting slip the idea that the big guys KNOW oil supply is temporary.

Get your home solar converters and gold today!!!!

Tony's mention of Britain's future in EU - He may know it's true, but he'll drag his feet as long as Big Oil supplies them and allows the pound to keep interest rates relatively high by world standards.

TownCrier

(06/13/2003; 14:54:55 MDT - Msg ID: 104571)

April U.S. trade deficit at $42 billion, on annual pace to $492 billion

http://www.herald-sun.com/business/21-361833.htmlexcerpts:

WASHINGTON -- The U.S. trade deficit declined slightly to $42.03 billion in April, after setting an all-time high in March ($42.87 billion)...

But even with the small improvement, America's trade deficit through the first four months of this year is running at an annual rate of $491 billion, far above last year's record deficit of $418 billion.

Bush administration critics point to the soaring trade deficit as evidence that the president's policies of pursuing free trade deals as a way to boost America's global competitiveness is not working. The critics say a flood of imports has cost millions of lost American manufacturing jobs.

The administration has also made a subtle shift in its policy of supporting a strong U.S. dollar, signaling to markets that it does not believe in using government intervention in currency markets to stem the dollar's decline.

U.S. manufacturers have been pressuring the administration to make the change as a way of helping lower the dollar's value against other currencies and thus boosting their competitiveness in overseas markets. A weaker dollar drives up the cost of imports for American consumers but it makes U.S. products cheaper in foreign markets.

-----(see url for full article)------

With the conclusion of primary military action in Iraq, the April U.S. import levels where kept somewhat in check by the largest monthly decline in crude oil prices (down $4.25) since the 1991 Persian Gulf War. However, the volume of crude imported was the second-highest level on record, for an import bill of $11.21 billion for crude. The trade deficit with OPEC reached a record $5.03 billion. The largest trade deficit with a single country, China, climbed 25% on the month to $9.45 billion.

Overall imports of goods and services were $123 billion set against U.S. exports of $81 billion.

When they buy our goods with a surplus of their own goods, what need do they have for the dollars we use to provide the balance of trade -- if not for use as a reserve asset?

Don't you think it would be a good plan to acquire your gold in advance for such a time if they ever rethink the wisdom of this lop-sided wealth-transfer arrangement?

Gold is a universal good, so play the part of the independent nation; "import" it cheap now and then "export" it dear if you have to.

R.

misetich

(06/13/2003; 15:02:10 MDT - Msg ID: 104572)

Milberg Weiss Announces The Filing Of A Class Action Suit Against Barrick Gold Corp. on Behalf of Investors

http://biz.yahoo.com/bw/030613/135193_1.htmlSnip:

The complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 14, 2002 and September 26, 2002. For example, throughout the Class Period, Barrick assured the markets that it was improving its operations by keeping its production costs in check and that the Company expected to earn $0.42-$0.47 per share in 2002, even taking into account the phasing out of several mines and decreasing ore quality (which increases costs) in several of its mines. These representations were materially false and misleading, according to the complaint,
............
Misetich

ABX the target again. This mega hedger bank ...OOps .. miner... is lucky not to have more suits lodged against them by gold investors as a whole for Barrick's self admitted role as an agent of central banks in depressing gold prices expressed in US $...

On the other hand perhaps physical gold accumulators should thank Barrick for enabling them to pick up gold at these low prices

Thank you Barrick! and thanks for keeping a floor on the present gold market as you attempt to cover !

All On Board The Gold Bull Express

Goldilox

(06/13/2003; 15:03:25 MDT - Msg ID: 104573)

Is Martha Stewart a political prisoner?

www.dailyreckoning.comsnippit:

*** Martha, it seems, had a feeling the 4,000 shares she owned in ImClone were going to tank...so she put in a sell order on them. She claims she placed the order before her pal Sam Waksal - former scientist and CEO of ImClone, now convicted felon - told her anything about the company's balance sheets. At first, her broker backed her up - then he rolled over.

At least, those are the details as far as we can tell by sifting through the drivel that portends to be the news these days. For all we know, she may have added too much yeast to a bunt cake, and served it to the wrong people. But something disturbing this way comes.

For their part, the SEC has not accused the matron of Maytag of "insider trading," a charge that may have been warranted were she to have actually peeked under the hood at ImClone. But they do charge her with "obstruction of justice"...for what? For mounting her own defense? We don't know.

But a NYTimes piece quotes a former attorney for the SEC: "The deterrent effect is immeasurable. Even if the government puts a thousand hours into building this case against Martha Stewart, the risk-reward ratio is enormously positive and constitutes a very prudent allocation of government resources."

"One cannot discount the role of politics here," writes William Anderson, an adjunct professor with the Mises Insitute. "The government is seeking to make her into a political prisoner. It is politics, not the pursuit of justice, which is driving this case...Her wealth and public persona make her a convenient target of a very political U.S. Department of Justice, and of U.S. attorneys who see the example of the Guiliani path to fame and fortune.

"In the end, we are likely to have a well-known person owning a felony record and being sentenced to prison or, at best, receiving a suspended sentence or probation," Anderson continues, "and a once-prosperous company in tatters. Oh, and we will see some federal prosecutors being fundefinedted as though they had just solved the Case of the Century. These are dark times, indeed, for the pursuit of justice in the United States of America."

Dark times, indeed...dark times.

Addison Wiggin

Goldilox:

While all the $Bn ENRON energy thieves party on in the white house, Hillary let it drop in an interview yesterday that Martha was a close friend. Supposedly, her indictment is NOT for ImClone insider trading, but obstruction of justice, claiming her denial of culpability was designed to manage the price of her own company stock. If this is true, perhaps we should indict TPTB for their continued support of the "Strong Dollar Policy". It's obviously designed to sucker the sheeple into believing there is hope for the dollar's reversal.

misetich

(06/13/2003; 15:33:28 MDT - Msg ID: 104574)

Moody's Cuts GM Ratings, May Cut Again

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=2927646Snip:

"The downgrade ... reflects Moody's expectation that the intensifying competitive environment in North America, in combination with large pension and other post-employment benefits (PEB) funding obligations, will result in the company's automotive earnings, cash generation, and debt protection measures remaining weak through 2003," the credit ratings agency said in a statement.

It said the negative outlook reflected concerns that the competitive U.S. environment could intensify further, and that weakness in the U.S. economy and consumer sentiment could extend well into 2004, causing GM to fall short of its operating and financial targets.
********
Misetich

Another example of overcapacity as the REAL unemployment numbers show up in decelarating consumer spending -

Those pension plans underfunding is beginning to hit home.

All On Board The Gold Bull Express

Goldilox

(06/13/2003; 15:34:11 MDT - Msg ID: 104575)

Your papers, please?

http://www.daily reckoning.comsnippit:

Americans who, five years ago, were so incensed at Bill Clinton's perjured testimony that impeachment proceedings were brought, now exhibit a willingness to be lied to about matters of far greater concern than oval office shenanigans. As the Bush administration continues to pile lie upon lie, it is evident that most Americans are completely indifferent to the purposes for the attack upon Iraq. I suspect that, if Bush and his fellow war conspirators were to publicly announce that the Iraqi invasion was deigned for no other purpose than to put money into their pockets, most Americans -- led by their electronic cheerleaders on talk-radio and cable television -- would praise them for showing "ambition" and "leadership!"

Goldilox:

Butler Schaffer's scathing indictment of a civilization's decline into warrior mentality. He calls the 20th century "the holocaust century" with over 200,000,000 slaughtered in the name of God and nationalism. Interesting food for thought.

Black Blade

(06/13/2003; 15:51:23 MDT - Msg ID: 104576)

Fed Is Creating Golden Opportunity

http://www.thestreet.com/markets/aarontaskfree/10093462.html
Snippit:

Whereas equity and fixed-income traders foresee only positive outcomes from the Federal Reserve's aggressive monetary policy, gold advocates see Alan Greenspan behind the wheel of an out-of-control vehicle headed for a steep turn. Where equity optimists spy salutary effects of a weaker dollar, gold bulls envision a crumbling currency leading to higher inflation, buoying the yellow metal.

Black Blade: Each day it appears that the dollar heads toward the abyss as the Fed desperately struggles to stimulate economic growth. Looks like a losing battle so far.

(06/13/2003; 16:23:43 MDT - Msg ID: 104577)

Sinclair Gold Standard: Needs an Extra Boost

Reference:

Goldendome (6/13/03; 00:16:31MT - usagold.com msg#: 104539)
More on A Gold Standard? (Of Sorts)
http://www.jsmineset.com/s/Home.asp

James Sinclair discusses the issue on his website linked above.......

.....Sinclair sees the situation that the GOLD COVER CLAUSE for the currency will be re-instated to save the dollar. But re-instated in an UPDATED FASHION, based on the VALUE OF GOLD --NOT the VOLUME of GOLD , BACKING the DOLLAR. The price of gold would rise in value with a rise in the stock of paper money. He sees some sort of an index derivitive market linking Gold price to the Dollar volume increase. This derivative index would be traded by speculators in the market place. ( I don't see how this really would solve anything myself, because isn't the link between Gold and the dollar in the hands of speculators and manipulators now on the Comex a problem? Allowing Gold to be controlled?) Sinclair, also, doesn't offer what the new cover clause price of Gold would be initially.
----------------Gdome

COMMENT: This is all well and good but the total value
of the U.S. gold reserves backing the U.S. Dollar is:

VALUE OF US GOLD RESERVES = PRICE OF GOLD X METRIC TONS
OF US GOLD RESERVES

The sensible thing for the U.S. Government to do in order
to boost the value of US Gold Reserves is to INCREASE
THE METRIC TONS OF US GOLD RESERVES, since it has VERY LITTLE CONTROL of the PRICE of GOLD IN THE LONG RUN.

AX

Reference:

ax (06/12/03; 15:08:42MT - usagold.com msg#: 104523)
No Real GOLD STANDARD : But USA can come CLOSE

Realistically, paper currencies are here to stay. There is no hope that the USA will ever return to using physical gold
as currency.

BUT - the USA can come closer to this than it is now.
HOW? The USA Treasury must buy all the physical gold it can
get access to. The small 8000 ton USA gold reserve needs
to be drastically increased. During World War II and in the
immediate post war years, the US had a much larger gold reserve tonnage. WHY cannot the US Treasury get some of this back?

What are the sources?

1. Bullion dealers located in the United States
2. Gold Mines located within the United States
3. Non U.S. Central Bank Gold up for sale -
for example - Swiss Central Bank Gold, Portugal,
etc. -- or any other Central Bank that is foolish
enough to sell

4. Gold from mines located outside of the United States

5. Speculators, Comex, and

6. All other sources

The United States wants a stable currency or a "strong"
dollar? This is how you start.

AX

Aristotle

(06/13/2003; 17:57:07 MDT - Msg ID: 104578)

ax ax ax...

We've been through this before, what part of "It can't work" don't you accept?

Listen, if we (U.S. Treasury) tried to buy Gold according to your remedy, we'd destroy the international value of the dollar almost instantly. It wouldn't just backfire, it'd be the mother of all backfires.

Gold. Get *you* some. --- Aristotle

Goldendome

(06/13/2003; 18:06:52 MDT - Msg ID: 104579)

@ Ax your reply on Sinclair

http://www.jsmineset.com/s/Home.aspYes, Sinclair (like everyone else) has his opinion on what will eventually happen, and his indexed derivative paper link to Gold in some manner may be just another Fairy Tale. I don't presume to have the slightest idea as to any accuracy in his opinion. I do find it somewhat humorous, however, that in any of his discussions that I have read or listened to, he ALWAYS trots out, that he sold out gold right at the peak in 1980 and bought into bonds right at their bottom. If I had done it, maybe I would keep bringing it up also. I have noticed that he keeps wanting to call the market to within 10 cents of some figure all the time though, and I'm not sure that helps his current credibility. Maybe he walked the walk twentyfive years ago and keeps bringing it up as he talks the talk. If you have Windows Media Player though, his dicussion on the elements needed for a raging Bull Market in Gold is interesting. He is a detailed and practiced speaker. Thanks for the feedback! --------Gdome

(06/13/2003; 18:15:51 MDT - Msg ID: 104580)

US TREAS GOLD: WAS SOLD IN THE 60's: WHY NOT BUY BACK?

ARI: The U.S. Treasury sold gold after World II down from
a tonnage that was over 20,000 metric tons, to what we have now, just somewhat over 8000 metric tons.

THE SELLING OF THE GOLD DID NOT EMPOWER THE U.S. DOLLAR,
SO WHY SHOULD ITS ACQUISTION DESTROY IT?

ON THE CONTRARY, THE LONG TERM BENEFIT OF ACQUIRING GOLD
FOR THE U.S DOLLAR SHOULD MAKE THE U.S. DOLLAR STRONGER !

WE are talking about a long term benefit, and an absolute,
not relative, strength.

Aristotle (6/13/03; 17:57:07MT - usagold.com msg#: 104578)
ax ax ax...
We've been through this before, what part of "It can't work" don't you
accept?
Listen, if we (U.S. Treasury) tried to buy Gold according to your
remedy, we'd destroy the international value of the dollar almost
instantly. It wouldn't just backfire, it'd be the mother of all
backfires.
Gold. Get *you* some. --- Aristotle
ax (6/13/03; 16:23:43MT - usagold.com msg#: 104577)
Sinclair Gold Standard: Needs an Extra Boost

(06/13/2003; 18:35:00 MDT - Msg ID: 104581)

Goldendome: Predicting the Gold Market

reference: AX / Goldendome recent messages

Hi Goldendome:

I agree with you. The gold or any other market is very
difficult to predict and those of us who do predict it and
act on that prediction, make alot of money.

I have been working on this for many many years and have
not been very successful.

Many market analysts often say: the market will have gone up or down when it has gone up or down. This is indisputable, but can you make money with this hindsight?

As for the United States, I just think it would be in its
best interest and that of its citizens if it would fortify
its treasury gold reserves. This is all I am saying.
Whether or not it will do this, I cannot say.
I do not think, however, that such a move would destroy the
US Dollar ( because that it would be bad for all of us )
but rather, would ultimately make it stronger.

Regards,

AX

Aristotle

(06/13/2003; 18:47:22 MDT - Msg ID: 104582)

ax selling/buying

"THE SELLING OF THE GOLD DID NOT EMPOWER THE U.S. DOLLAR, SO WHY SHOULD ITS ACQUISTION DESTROY IT?"

Before you hitch your future to this wagon, first ponder the fuller (and more meaningful) context of the actions and motivations of the 1960's London Gold Pool.

If we (the U.S. Treasury) started to buy Gold, do think China would happily sit for very long, with all of its dollar hoard across the Pacific, clapping their hands saying "Oh, goodie! The U.S. is buying Gold, and by proxy now we don't have to!"????????

If we print so much as *one* dollar with which to buy Gold for the official coffers, I think it'll all come undone.

Simply put, getting Gold is just one of those things that you gotta do for *yourself*. As much as you might like to think it, the government can't be your nurse maiden from cradle to grave, ya know...

Gold. Get you some. --- Aristotle

The Invisible Hand

(06/13/2003; 18:54:11 MDT - Msg ID: 104583)

Saturday morning surfing notes

http://news.independent.co.uk/business/comment/story.jsp?story=414906
The explosive growth in derivative and bond markets finds its justification in the idea that it spreads risk in a way that makes the wider economy less prone to shocks and the ups and downs of the business cycle. Yet another way of looking at the same phenomenon is that financial risk has been bought up wholesale by areas of the market with no proper understanding of it, thus exaggerating the boom and the subsequent bust by persuading investors to fund uneconomic activity.
Whatever the truth, the view that economic prosperity has been kept safe by all those clever investment bankers with their derivatives and corporate bond products looks an unreliable one. There's been no banking crisis, but there has been the most terrible crisis in the savings market, the long-term consequences of which we can still only guess at.

http://www.timesonline.co.uk/article/0,,630-712749,00.html
The price of oil on world markets fluctuates wildly. For example, there was a sharp upsurge earlier this year ahead of the Iraq War. But the prices quoted to you as you buy on the forecourt are again stable. No one goes out each day to change them at the pumps to reflect whatever Brent crude is trading at. Again, hedging is used, although any long-term trend must eventually be reflected on the forecourt.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2003/06/13/cnoil13.xml&menuId=242&sSheet=/money/2003/06/13/ixcity.html
The first crude oil to come out of Iraq after the war was yesterday awarded to a surprisingly international group of oil companies.
The six companies which won part of the shipment were Spanish refiners Repsol and Cepsa, TotalFinaElf from France, Tupras of Turkey, Italian ENI and US major ChevronTexaco.
...
Despite French opposition to the war, TotalFinaElf was awarded 2m barrels. A total of 52 companies bid for the crude, but three companies were disqualified for not being refiners

http://www.technobility.com/docs/futurist%2003.htm
The Predictor's Paradox:
The impression made by an accurate prediction
is more a function of the reader's ignorance,
than of the writer's ability to predict.

Druid

(06/13/2003; 19:25:57 MDT - Msg ID: 104584)

Nolan Shines

www.PrudentBear.comThe Way We Were:

Traditionally, the monetary system was a Decentralized System Dominated by Local Bankers. Bankers operated with a prudent, "Loans for the Long-term" perspective. Gain on sale accounting and marked-to-market did not exist. It was a controlled banking/monetary system. Loan growth was limited by reserve requirements and there was a limited supply of loanable funds. Supply and demand for these limited funds dictated interest rates, with the price of Credit a fundamental stabilizing force. Credit Availability was generally dictated by business profitability and the expected return on investment.

Bank deposits were the primary liability created during the lending process. Or, stated differently, deposits were the major monetary IOU issued during financial sector expansion. Hence there was a strong correlation between "money" supply, the general Credit environment, and economic performance.

Within this monetary regime, the Federal Reserve governed currency expansion and the payment system. The monetary system was anchored by bank reserves. The Fed carefully controlled these reserves that were "multiplied" during the lending process into new deposits. Management of bank reserves was basically control over system liquidity and the broader financial environment.

The economy could be analyzed as an Industrial Economy. Goods-producing industries were at the epicenter of the economic system � the horse pulling the financial and services carts. Financial expansion paralleled GDP expansion, or stated differently, the expansion of financial claims was largely matched by the expansion of production capacity. The trade position was normally balanced. Excesses were temporary and largely self-correcting.....

Druid: In my opinion, a giant in analyzing credit markets shined recently in a rare speech.

21mabry

(06/13/2003; 21:29:26 MDT - Msg ID: 104585)

VIETNAM

Many in the world view China as the emerging economic powerhouse of the world.With rising standards of living come resentment at working lower paying jobs.With a growing prosperous China could a country like Vietnam be in a position geographicaly to prosper from Chinas economic growth, much like Canada and Mexico have prospered from their proximity to the U.S.Maybe there are other countries in that region that could also prosper, a free North Korea with its large population of workers could prosper also.Maybe countries like these will offer above average investment oppurtunities in the distant future.21

a nation of one

(06/13/2003; 21:48:17 MDT - Msg ID: 104586)

...

If a prediction is stated in a reasonable way,
the reader's impression will be correctly formed.
This does not rely on the reader's perception,
so much as on the predictor's ability to correctly state his prediction.

Of course if the work of predictors belong in the same category as the works of Monet and Renoir,
then that would be different.

Black Blade

(06/13/2003; 22:17:02 MDT - Msg ID: 104587)

EIA: NATURAL GAS PRICES TO STAY HIGH

http://hoovnews.hoovers.com/fp.asp?layout=displaynews&doc_id=NR200306141675.3.4_98850001f2640012
Snippit:

Chemical producers are facing the prospect of high natural gas prices for the rest of the year, which will likely prompt more plant shutdowns, analysts say, according to Chemical Week magazine. Natural gas spot prices at the Henry Hub have been above $5/million Btu since the beginning of the year and have been above $6/million Btu for the past several weeks. The Energy Information Administration (EIA; Washington) expects natural gas prices to average an "unseasonably high" $5.50-$6/million Btu for the rest of the year, because of low inventories.

Black Blade: This is what is needed � plant shutdowns. That could help with the NatGas supply problem if we have enough energy intensive industries closing up shop. If we are fortunate enough to have a severe crippling economic recession along with mild temperatures we just might scratch by with a tight NatGas supply in storage next winter.

Black Blade

(06/13/2003; 22:22:56 MDT - Msg ID: 104588)

Hydrogen Leakage Could Expand Ozone Depletion

http://ens-news.com/ens/jun2003/2003-06-13-09.asp#anchor1n
Snippit:

PASADENA, California, June 13, 2003 (ENS) - Hydrogen is generally considered an environmentally friendly alternative to gasoline as a transportation fuel, but new research indicates that leakage of hydrogen gas could cause problems in the Earth's ozone layer. In an article appearing this week in the journal "Science," researchers from the California Institute of Technology (CalTech) report that the accumulation of leaked hydrogen gas resulting from a hydrogen economy could indirectly cause as much as a 10 percent decrease in atmospheric ozone.

Black Blade: Well that's not good. :-)

Gandalf the White

(06/13/2003; 22:35:32 MDT - Msg ID: 104589)

THANKS, Sir Rich for the "X" CONFIRMATION and the COT report ! <;-)

R Powell (6/13/03; 14:44:27MT - usagold.com msg#: 104569)
Gandalf's answer and COT report
===
In the GOLD Pit --
Looks to the Hobbits as if the COMMERCIALS picked up a little over 4,000 LONG contracts from the SPEC's and closed out some 15,000+ of their heavy SHORT level. THE MOST interesting NUMBER is the NUMBER OF TRADERS in the COMMERCALS SHORT CATEGORY compared to the other CATEGORIES!!
<;-)

21mabry

(06/13/2003; 22:39:28 MDT - Msg ID: 104590)

BLACKBLADE

The Prize arrived today was only 10 bucks I also purchased Commanding Heights by D. Yergin also got Hubberts Peak.Tomorrow I am reading all day. BB what are your thoughts on the global warming debate? Are we helpless to stop it? Is it a very real concern? Is the kyoto treaty a good start in answering this problem.21

Gandalf the White

(06/13/2003; 22:45:03 MDT - Msg ID: 104591)

Not to WORRY, Sir Black Blade !!!

California Institute of Technology (CalTech) researchers report that the accumulation of leaked hydrogen gas resulting from a hydrogen economy could indirectly cause as much as a 10 percent decrease in atmospheric ozone.
===
As some people who used to fly ballons demonstrated -- the ozone layer is safer than humans around Hydrogen and lightning or lighted matches.

Black Blade

(06/13/2003; 23:17:22 MDT - Msg ID: 104592)

21mabry � Global Warming

http://www.oism.org/pproject/
I think it's overblown. Several studies even suggest an improvement in living conditions and a "bloom" from extra CO2 release leading to more abundant plant life (Carbon Sink Hypothesis). Nevertheless, natural variations and cycles appear to have much more impact than human activities. It is interesting to note the media feeding frenzy over the GB issue and references to "scientists conclude", etc. The science community is split over the issue and there is no overwhelming "scientific consensus". There are too many variables for causes of GB and global climate change has been a fact for millions of years previous to the Industrial Revolution". In fact I am one of the signers of the "Petition Project" where nearly 20,000 scientists dispute the claims of the alarmists (see link). There would be more but few are aware of the project (mostly by word of mouth). Clearly there is no "consensus".

- Black Blade

mikal

(06/13/2003; 23:29:51 MDT - Msg ID: 104593)

@BlackBlade

Those plant closings just keep coming. Many have been replaced with modern facilites overseas and in Mexico. Others have been run into the ground, operate inefficiently or in saturated or obsolete markets.
Fertilizer use in my state suffers on account of excessive rain, drought or extremes of temperature. Flooded fields this year in my area, contrast with excessive heat and drought last year. But irregular weather patterns have been rising everywhere, leading some to wonder whether HAARP, pollution or a natural earth cycle are to blame. The consequences of increases in record setting floods, freezes, droughts, locusts and other natural disasters are felt in energy use in disparate ways. But combined with the degradation of the air and water quality, deforestation, erosion and the interruptions and disruptons to the Water, Oxygen and Nitrogen Cycles, the effects on the health and well-being of the earth, water, climate, crops, and air are nearing the point of no return. Just like the vicious circle of the debt economy that threatens to exhaust all options.

P.S. R. Powell, Ski and the many silver attendees will like the solutions that will be coming to solve some of these problems. But gold will benefit too from it's growing industrial applications as I have shown from excerpts from the Gold Institute, but be preferred for it's liquidity, value and prominent and growing investment prevalence worldwide. As FOA was deliberately emphatic that gold requires unremitting focus and diligent action.

Gold Standard

(06/14/2003; 05:04:36 MDT - Msg ID: 104594)

Ozone Layer and Global Warming

Sorry, this is a bit off-topic, but nonetheless is an important issue. Sir BB is, once again, perfectly correct.

The environmental issues of the depletion of the Ozone layer and the so-called "Global Warming" effect are miles apart.

The "hole" in the Ozone layer has been scientifically categorised, observed, and the effects of the world CFC ban of the 1980's have been able to be scientifically tabulated.

On the other hand, "Global Warming" is nothing more than a theory, and for any interested scientific observer, the problem seems to be two-fold:-

1. Since 1947, when scientific satellites were first put into orbit, there is no empirical evidence at all of any "warming" of the troposphere, or upper atmosphere.

2. Supposed scientific evidence of sea-level changes must be correlated to the extent that the observation point (i.e. "dry" land) has sunk or lifted. Continental plates are always shifting - always have, always will.

There is no connection between "Global Warming" and depletion of the Ozone layer.

Any attempt to tie together these concepts is just junk science.

The Stranger

(06/14/2003; 07:51:58 MDT - Msg ID: 104595)

Ned Davis in Barrons' this Morning

http://www.barrons.com/Excerpt:

[This]is the Catch-22 the economy is in. We've got this $32 trillion debt bubble out there, and it is as risky as can be. And, yet, rates are plunging, so everything looks manageable. It is true we've had 2.4 million bankruptcies filed since the economy started up in the fourth quarter of 2001. But, with rates down at these levels, we are managing. If somehow the Fed succeeds this time and things heat up again, interest rates will start up. The debt service will be enormous and that will put us right back to where we are now. That is the problem. If the Fed doesn't pull this off, and they don't trash cash and they don't force people to go out and spend their last dollar, or borrow their last dollar, then you are looking at deflation. And that is terrible.

If they heat things up, it is bad and if they don't heat things up, it is worse. They have clearly chosen to try to heat things up. You've got an election next year and they have a good shot at it. My guess is we'll have a great quarter, maybe a little longer than a quarter, then rates go up and it will end almost immediately. There is not a lot of pent-up demand. All the pent-up demand is coming from driving rates lower and lower and lower.

The other side of that, the other big secular risk I see -- and it all ties together -- is that our exports are exactly what they were back in 1997. This either means our goods are not competitive or the dollar is way overvalued. It is probably a little bit of both. We had a productivity jump, though I am not convinced it is as good as the numbers show. Given that productivity jump, our goods should be competitive, and they are not. We definitely needed to see the dollar come down, but it needs to come down carefully and slowly. If foreigners understood our policy is what I think it is, that is, making cash trash, why would they keep their $3 trillion in this country? At the point they realize this, this nice decline in the dollar all of a sudden becomes tremendously bad.

The Fed is trying to keep the economy afloat while we are working ourselves out of debt. The problem with what they've done to get the economy going is they've tried to cure the problem of too much debt by adding more debt. It all looks good as long as rates stay down here. I think whatever the Fed is doing is wrong, but I don't really know what else they can do. If our problem is we save too little and borrow too much, what are we doing now? We are making savings worth zero and we are telling people to borrow. We are doing just the opposite of what we need to do. The reason they are doing it because they are scared to death of deflation. They are scared to death of a depression. So they are fighting it tooth and nail, and I think short-term it is going to look pretty good. But I am very dubious about the long term.

Dollar Bill

(06/14/2003; 08:14:23 MDT - Msg ID: 104596)

*>*...........$

Good Morning Stranger, All.
..Couldnt the Fed just inflate the equity market till state budgets balance and company retirement accounts are in a plus?
..Since this Fed is willing to do anything at all, isnt global inflows of credit not the factor we suppose?
The credit markets manufacture credit in amounts not covered by international reinvestments. Isnt the US in a position to be able to pull off surviving this ponzi scheme?
..If the US Fed. is willing to do anything to keep things
working, is there really anything other countries can do?
..If arab countries want to switch to the euro, they are threatened by the effects on oil prices that a weakened US will cause. We are all tied into the present system, and as long as the US is ballsy enough to fight over the survival of the present dollar reserve system, who can defeat it?
..Except of course, that natural destructive and stupid
thingee that affects each and every one of us.
..I suppose that devil factor makes the present system so flawed, and we/others will always have "murphys laws"
to wreck the best laid or winging it plans that we make to set up human financial affairs in some bee or ant like
way.

Mr Gresham

(06/14/2003; 08:34:27 MDT - Msg ID: 104597)

Great thread at Prudent Bear chat

http://www.prudentbear.com/bearschat/bbs_read.asp?mid=119723&tid=119723&fid=1☆t=1&sr=1&sb=1&snsa=A#M119723Some of my favorites, soul-baring and mutual support.

tanstaafl: "If you really don't HAVE to have the interest income to live on immediately, what is wrong with just holding physical gold? Even if you doubt the dollar collapse and think we may not have large, general price inflation (at least one of the two is near certain, imo), gold has hundreds or thousands of years of at least tracking inflation. So if the currency inflation rate is 7+% as reported, then IN THE LONG RUN gold is sure to go up at least an equal amount. The gain would be, at least, tax deferred and possibly tax free -- so the "interest" you're likely to "earn" by just sitting in physical is most likely to be quite respectable in real terms in the long run. If the dollar falls, the gain could be quite spectacular. Just because a CD generate s reportable interest income approximately equal to inflation and gold doesn't, doesn't mean the gold isn't effectively earning "interest"! The intrinsic interest is definitely there, as history has shown for thousands of years. Learn to laugh at the gorilla, but don't laugh too publicly! Those are two important lessons. "

pooky: "The Fed can mess with you, but it can't destroy you if you don't play its game. And playing your own game mostly amounts to a lot of watching and waiting. Paper is paper until it catches fire, promises are promises until they are broken, and paper promises are increasingly in breach of contract from one end of the spectrum to the other. For pure safety's sake, there really isn't much to do but pay off the house, pare debt to zero, avoid saving in dollars (and perhaps ANY fiat currency), diversify where you can, learn some useful skills, and maybe set up dual citizenship somewhere sunny. Oh, and eat more ice cream."

Melting Pot

(06/14/2003; 08:49:50 MDT - Msg ID: 104598)

Global warming and oil

The subject of global warming has been postulated and connected with removing subsurface oil.

The theory is:

The outer earth surface rotates once every 24 hours, however the inner core rotates about once every four hundred years. The interaction between the constantly moving core and the surface produces earths magnetic qualities and friction that causes resonance. This is known, measured and recorded as the Schuman Resonance. The normal resonance of earth is 7.8 Hz.

Crude oil is found in differing amounts all over the globe, much like interconnected aquifers, only the vast pools where oil gathers are economically feasable to mine production.

It is believed oil acts as a natural lubricant and natural gas acts as a coolant between the inner core and surface plates. Removing the natural lubricant and cooling mechanism creates additional friction that over time begins to warm the earth, causing an increase in earth quake activity and collapse the magnetic field, hence surface warming not atmospheric warming.

The collapse of the magnetic field also produces spectacular electrical events (lighting) and surface storms as Earths biorythm is becoming out of sync as evidenced by the moving magnetic north pole.

The Schuman Resonance is normally 7.8 Hz, it has over time increased to todays 12 Hz. The resonance is again created by the friction between the inner core and surface plates. Remove the lubricant and additional friction is incurred, thusly the resonance and earths dynamic temperature increases.

If the theory is correct, TPTB do not want the people to know this is the cause of global surface warming and pole melt down. They blame the warming effect on CFC's, etc. and a host of other causes, ad nauseam, taking our eyes away from the true cause of the warming effect.

Lets go one step further here........

We are taught pursuant Boyles law of thermo dynamics that heat and cold cannot pass thru a vaccuum. This is the principle used in a Vaccuum THERMOS bottle. Outer Space is supposedly a vaccuum, how does sunlight produce heat after traveling through the cold, cold vaccuum of space??? Further, the higher we climb in the atmosphere, the cooler the atmosphere becomes, yet the deeper we burrow into the earth, the warmer it becomes.

It would stand to reason if the sun created the major percentage of earths heat, the higher we travel into the atmosphere, the hotter it should become, and the deeper into the earth we burrow it should become cooler. Yet, in the real world it is completely opposite. Hence, the major percentage of earths constant surface temperature is produced by the earth itself from;

A) The molten core

B) The friction between the core and surface plates

C) A combination of the above

Again if the theory is correct, such info would plunge mankind and the entire oil based economic system into chaos. A new dark ages would immediately begin.

Edward Teller advanced the concept of global spraying of fine reflective particals to reflect sunlight back into space (chem trails) to diminish the suns heat by 1% to help offset what TPTB claim is the cause of global warming, "green house gasses."

http://www.ncpa.org/pi/enviro/envpd/pdenv125.html

I suspect this is part truth and part fiction. If the earth itself is heating up due to removal of oil and natural gas, then all the spraying in the world will not stop the effect.
The promulgated story has us looking upwards and at green house gasses instead of downwards where the real problem lays.

Yes, in part green house gasses are somewhat to blame, but not to the degree it is said to effect earths temperature. This cannot be true, as volcanos and the natural break down of organic matter would have destroyed life on the orb long ago.

When TPTB say look up, I look down. Do you think the controllers would admit that pumping billions of barrels of oil has created a global catastrophe? Not on your life!

Look around, the weather is abnormal, earth quake activity, electrical activity and magnetic activity is increasing and becoming more volitile as we pump the remaining supply of oil and nat gas from the ground. Oh and blaming the elusive Planet X, pole shift, etc.......,just a cover story for the sheep to never discover the real reason for the coming environmental catastrophe.

Hope I'm wrong for all of our sakes!

barnacle bill

(06/14/2003; 09:27:26 MDT - Msg ID: 104599)

Dumpster Diver Alert

I work for the City of Minneapolis. At work I noticed a list of items that were not to be put into the garbage. Three of those items were gold, silver, and platinum.

This is a heads-up to all of you dumpster divers in Minneapolis: Abandon your search for PM's in Minneapolis dumpsters.

On a more positive note, I did hear a rumor that the dumpsters around Washington D.C. did contain gold. I will check with my sources and keep all of you up to date.

Clink!

(06/14/2003; 10:13:59 MDT - Msg ID: 104600)

@ BB

That must have been a bit of a jaw-dropper at the governor's meeting; 'If we are fortunate enough to have a severe crippling economic recession ....'!

C!

Old Yeller

(06/14/2003; 10:36:40 MDT - Msg ID: 104601)

Asian CB's and their dollar dams

http://reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=2926310
They grow ever larger and the exit strategy ever more
uncertain.Meanwhile,the US government gets a free lunch
through negative interest rates.

Gandalf the White

(06/14/2003; 11:27:21 MDT - Msg ID: 104602)

"WELCOME BACK" to The Stranger !!!

The Stranger (6/14/03; 07:51:58MT - usagold.com msg#: 104595)
===
The Hobbits love to read your messages !
<;-)

Moegold

(06/14/2003; 12:03:07 MDT - Msg ID: 104603)

Global warming and oil (Melting Pot msg#: 104598)

If global warming is due to removing oil from the ground, how do we account for past periods of global warming? Did the dinasaurs pump oil?

"We are taught pursuant Boyles law of thermo dynamics that heat and cold cannot pass thru a vaccuum. This is the principle used in a Vaccuum THERMOS bottle. Outer Space is supposedly a vaccuum, how does sunlight produce heat after traveling through the cold, cold vaccuum of space???"

I don't remember this version of Boyles Law, but radiation can and does pass through a vacuum. It can't produce heat there because , by definition, a vacuum contains nothing, no gasses or other matter to absorb radiant energy from the sun. The earth is not a vacuum and does absorb radiant energy from the sun. To ignore this is to ignore the daily difference in temperature from night to day.

We will continue to pump oil until it is gone. It will become a more valuable commodity just as gold is as more fiat money is printed.

The Stranger

(06/14/2003; 13:50:38 MDT - Msg ID: 104604)

The Oldtimer

Gandalf-

Thanks for yet another dose of your legendary hospitality. You are a true friend. I have never really left this forum, however. I still check in every day, and always enjoy seeing your familiar handle, along with those of numerous others. But I wonder how many know that you have been a continuous poster for longer than anyone else.

Bravo to you and to all of your Hobbits, Gandy!!!

USAGOLD / Centennial Precious Metals, Inc.

(06/14/2003; 13:53:27 MDT - Msg ID: 104605)

A complete gold investment education in 175 pages for only $5.95

http://www.usagold.com/cpm/abcs.html

The ABCs of Gold Investing

ABCs of Gold by MK "This book is a distillation of nearly a quarter-century of experience working with private investors interested in adding gold to their investment portfolios. It is not another "get rich quick" or "beat the market" treatise. Instead, it addresses a more practical concern -- how to protect your wealth during what many believe are increasingly dangerous times for the average investor. Sensational returns or making the quick turn of big profits is not what gold investing is all about. Gold has to do with medium to long-term asset preservation -- weathering the storm and having something left after the dust clears. Since the investor is essentially trading an inherently unstable and depreciating form of money for one that has withstood the test of time, incorporating gold into your investment plan is among the more conservative strategies you can undertake. I often counsel investors that purchasing gold is not 'investing' at all. In reality, you are simply replacing one form of money in your savings plan with another. . . .Perhaps gold can offer you what it has offered countless others over the centuries -- solid unassailable protection against the gathering storm." (order info)

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

21mabry

(06/14/2003; 14:03:54 MDT - Msg ID: 104606)

Melting Pot

Melting Pot, That was an excellent thought provoking post,I had never heard that theory before, it deserves to be studied. MK thnx for the copy of your book you sent me.I already have a copy this is my second one, I hope you do not mind if I give it to my library of my university maybe it will open some minds on campus. 21

The Stranger

(06/14/2003; 14:18:42 MDT - Msg ID: 104607)

Dollar Bill

Lots of countries have tried to print their way out of debt traps before. As far as I know, the result has always been the same. The currency winds up practically worthless. If that happens here, I think it will be because the ego of one man (Greenspan) allowed him to think he was capable of successfully steering the world's largest economy (and a fiat-based one at that) away from every pothole that ever got in his way.

The fact is, credit-based economies simply have to go into recession once in a while. When the natural cycle is impeded, as it has been in the United States in recent years, imbalances will continue to worsen until something far more onerous comes along.

Caradoc

(06/14/2003; 18:01:48 MDT - Msg ID: 104608)

A favor....

Could someone please repost from a week or so ago the URL to chart of silver price going back to 1875? (I bookmarked it on computer at work but not here at home.)

Thank you,

Caradoc

PS: Speaking of home, California is building the "house of cards" one tier higher with tricks like two different types of longterm borrowing to pay current year expenses and - even more amazingly -- a temporary (three year) increase in sales tax (1/2 per cent if I remember correctly) to be able to meet state pension payments for this year. You might wonder how extra sales tax revenue 2 or 3 years from now can be used to pay retirees this year. The answer is simple if you think like Governor Davis: just estimate that future revenue, issue notes against it, and you've got the money now (or 90-some percent of it). Makes you wonder what the plan is for next year.

Such shenanigans may postpone the inevitable but will only make it worse when it does happen.

The Invisible Hand

(06/14/2003; 18:18:07 MDT - Msg ID: 104609)

A first glance at Giscard's EU Constitution � Another step on the Trail?

http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/03/836|0|RAPID≶=EN&display=
Article I-12 - Exclusive competence of the Union
1. The Union shall have exclusive competence to establish the competition rules necessary for the functioning of the internal market, and in the following areas:
� monetary policy, for the Member States which have adopted the Euro
...

Article I-29 - The European Central Bank
3. The ECB is an institution which has legal personality. It alone may authorise the issue of the Euro. In the exercise of its powers and for its finances, it shall be independent. Union Institutions, and bodies and the governments of the Member-States, shall undertake to respect the principle.

===
Art. I-12.1 raises the question what is monetary competition. Once this competition principle has been stated, art. I-29.3 authorises only the ECB to issue the Euro. Nowhere is the Euro given any legal-tender qualities. Is this Another step on the Trail?

Goldilox

(06/14/2003; 18:35:22 MDT - Msg ID: 104610)

Nobel winners attack Bush Economics

http://news.bbc.co.uk/2/hi/business/2735269.stmsnippit:

Ten Nobel prize winning economists have attacked President George W Bush's tax cutting policies.

On Monday, Mr Bush sent his budget - designed to help revive the US economy and boost military spending - to Congress for approval.

But the combination of cutting taxes and increasing spending will mean that the US is set to notch up record budget deficits greater than those run-up by his father more than 10 years ago.

Goldilox;

What a surprise. Economists are not fond of Bushonomics?

John Doe

(06/14/2003; 18:46:42 MDT - Msg ID: 104611)

Caradoc, here's a chart

http://www.sharelynx.net/Charts/600yearsilver.gif600 years of silver...

John Doe

(06/14/2003; 19:28:21 MDT - Msg ID: 104612)

Here's another from 1792 in US$

http://cfgold.etr.it/italpreziosi/english/chartag.htmSilver since 1792...

Melting Pot

(06/14/2003; 19:38:37 MDT - Msg ID: 104613)

The Dollar's Last Days

http://newsmax.com/archives/articles/2003/6/13/140908.shtmlIf the government continues to fund its activities and meet its financial obligations through money creation, prices will overcome any deflationary pressures and rise precipitously. People will begin to see and feel the steady fall in purchasing power. They will rush to exchange money for material goods, causing prices to skyrocket.

At some point people will refuse U.S. currency as payment for goods and services. At that point, the dollar, like every fiat currency to come before it, will be worthless. [9]

The government may attempt to take over industry and seize wealth from businesses and individuals, and make it illegal to leave the country. [10] But it will only succeed in such measures if individuals do not have a way to defend themselves against such encroachments.

More likely, since America is still an armed nation, the government will accept a more limited role. It will either offer gold or silver currency, or money backed by gold and silver, or leave currency functions to the private sector. In an age when assets can be transferred electronically, a single unit of exchange may no longer be necessary. Gold and silver may be just two of many tradable commodities.

Individuals can prepare for a collapse by keeping as little wealth in U.S. currency as necessary, and transferring all wealth to material possessions and gold and silver gradually as events dictate.

Most importantly, individuals must attain firearms. As the collapse draws near, efforts to unarm the U.S. population will grow more strident. The federal government may share Adolf Hitler's insight that "the most foolish mistake [rulers] can make is to allow subjected people to carry arms. History shows that all conquerors who have allowed their subjected people to carry arms have prepared their own fall."

NOTE: A very well written and honest asessment of current reality. Read the entire article then send to friends, family, and associates.

glennh10

(06/14/2003; 21:50:48 MDT - Msg ID: 104614)

Re: Housing Bubble

There's been considerable discussion about the inflated real estate market (bubble), and the financial problems that will follow an inevitable decline in market value, affecting both indebted home "owners" as well as banks, fannie & freddie mac, derivatives, and so on. However, municipalities will also suffer as well, due to a drop in property tax receipts. They think they have it bad now.

The whole economy's sputtering along on nothing but fumes; presumed "safety nets" and economic turn-arounds are at best, unreliable. TPTB have so many pieces hanging in the balance, they can't afford at this point to drop even one ball. I would say we're getting pretty close to the "last train out". Anybody who hasn't done so already, should take out some (cheap) insurance against this ersatz "system", by allying with something of substance (gold). As is often said, it's going to get interesting.

Belgian

(06/15/2003; 01:16:28 MDT - Msg ID: 104615)

@ TIH > EU - Constitution

Most important is the *Independance* of the ECB ! All those Eurolanders " sharing the same currency "... currency as Duisenberg often calls it !!! ECB's powers must reach much further than those of the former Bundesbank. Lot of work still to be done to represent, unanumously, the euro, outside EU.
The "Stability and Growth" pact is there to stay, whatever storms might (will) come. This project remains an exciting attempt in its offering of a better alternative for the dollar-system.

Let me remind you that Bernard Connolly (AIG) was a guest at LBMA conference in San Fransisco, 2002. This same B.C. who wrote the books " The rotten heart of Europe" AND " The dirty War for Europe's Money" !!! Do you follow me Invisible ? LBMA...> London...> UKUS...> EMU...> Money Wars...!!!

B.C. snippits : ...aggravated by the efforts of the European "imperialists" to achieve their ends through an economic and financial disaster deliberately created by EMU... !!!-???
http://www.mips1.net/mgla02.nsf/UNID/SBAY-5AZMUM
Illustrates how a growing and succesfull euro-integration is perceived by outstanders.

The Invisible Hand

(06/15/2003; 02:28:22 MDT - Msg ID: 104616)

Connolly vs. the EU Constitution

http://european-convention.eu.int/docs/Treaty/cv00797-re01.en03.pdfBelgian,

The joke about Connolly and the EU draft Constitution, for which I gave the wrong URL yesterday (the correct URL is indicated above), is that

whereas in the Connolly case, which was thought as having wider implications for free speech that could extend to EU citizens who do not work for the Brussels bureaucracy, the European Court of Justice (ECJ) ruled that the commission could restrict dissent in order to "protect the rights of others" and punish individuals who "damaged the institution's image and reputation". http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2001/03/07/weuc07.xml,

article 11.1 of the Draft Constitution says that everyone has the right of freedom of expression.

Connolly has appealed the ECJ� s decision to the non-EU European Court for Human Rights. Maybe, he'll win under the Constitution, although the question arises whether the Constitution is applicable to facts before its entry its adoption and, a fortiori, before its entry into force.

mas

(06/15/2003; 06:22:12 MDT - Msg ID: 104617)

Privateer and FOA

FOA
2.11.01
Are you worried that we will enter an Japan like economic environment with rates at zero, economic stagnation and falling real asset values? Don't! They do not use an out going world reserve currency and we do! We will print what ever amounts needed to keep real Estate up, the Dow up and our economy purring: no matter what the value of the dollar on foreign exchange becomes. Or our eventual price inflation.

Our local economy will soar in dollar terms; no matter what our dollar is worth.

Are you worried that our 10 year bond, the new bench mark, will soar and squeeze off any recovery? Don't! We will just remove it from use and move to the 5 year,,,,,,,, to be replaced later by the 2 year,,,,,,,, to be replaced later by the 6 month,,,,,, 1 month,,,,,, 1 week,,,,, 1 day,,,,,, then
CASH!

Privateer today.....
14.6.03
We have a situation in which the faster Treasury yields head towards their ultimate low, and the Treasury debt bubble its ultimate high, the more money is poured into them. Lemmings have got nothing on Wall Street these days.

Right on cue with the acceleration of the bond bubble, Gold took a hit this week when it fell $US 9.60 to $US 352.20 on June 10. The monetary mechanics at the Fed and the Treasury and on Wall Street are painting themselves into a corner. They have almost no room for manoeuvre left. To maintain the structure of the system, it is ABSOLUTELY MANDATORY that ANY potential "escape route" from paper assets be debunked. Hence Gold's fall, in the face of plummeting interest rates and a falling currency.

For almost a year, between December 2001 and November 2002, the Fed hoped that it could hold the line. It found that it couldn't, so it had to cut again in November 2002. That cut heralded the start of the Fed's warnings about "deflation", just in case their manoeuvre room on interest rates ran out. The acceleration downstairs of the $US and upstairs of the $US Gold price right after that November 2002 rate cut scared them green.

Had it not been for the distraction of the Iraq war, the Fed would probably have cut rates again at their March 18 meeting (remember, the Iraq war began on March 19). The war bought them three months. Now, another rate cut is a CERTAINTY. How anyone can seriously entertain the thought that this cut will "succeed" where the previous twelve failed is utterly beyond us. But then nobody wants to look beyond June 24-25 right now.

Remember, while Gold has resistance and support points, and is the most deadly enemy of the paper mechanics, it has no "ceiling". Bonds do have an absolute ceiling, a nominal interest rate of ZERO. One should not be surprised that the Fed has repeatedly "reassured" the markets that they will buy Treasuries "if necessary". At or near the ZERO rate level, who else would do so?

After the rate cut at the FOMC meeting on June 24/25, with the Fed Funds rate at 1.00% (or possibly 0.75%), the Fed will be left staring into the eyes of what has always been their ultimate nightmare, the necessity of having to MONETISE US Treasury debt issuance.

misetich

(06/15/2003; 06:51:25 MDT - Msg ID: 104618)

Freddie Raises Fears of 'Cookie-Jar' Case

http://www.washingtonpost.com/wp-dyn/articles/A61363-2003Jun15.htmlSnip:

Pushing current earnings into future years -- the accounting problem that some fear could be at the heart of the still unfolding scandal at U.S. mortgage company Freddie Mac -- is among the oldest gimmicks known to wily executives eager to burnish results, experts say.

Indeed, the practice of "smoothing" income -- typically done with so-called cookie-jar reserves -- has been the root of a host of high-profile accounting debacles, ranging from appliance maker Sunbeam Corp. to Cendant Corp. .
................

But Freddie Mac has said it expects to restate its earnings higher for 2000-2002 and warned that those increases would be offset in future periods. Future earnings could also be more volatile, it warned.
**********
Misetich

Sounds things will get messier for Freddie Mac - and those derivatives

All On Board The Gold Bull Express

(06/15/2003; 08:19:45 MDT - Msg ID: 104619)

About the EU Court Decision on Connoly

Is it true that, " The European Court of Justice ruled that the European Union can lawfully suppress political criticism of its institutions and of leading figures", and "that the commission could restrict dissent in order to protect the rights of others and punish individuals who damaged the institution's image and reputation."

I wonder if it is true?

misetich

(06/15/2003; 08:40:43 MDT - Msg ID: 104620)

Lingering Losses on Bonds Are Haunting Insurers

http://www.nytimes.com/2003/06/15/business/yourmoney/15ACCO.htmlSnip:

That pressure figures to be especially intense on the insurance industry.

Insurers are swimming in billions of dollars of losses on corporate bonds that they bought years ago, but whose value has since plummeted. With the leeway afforded by vague accounting rules, many insurers are still carrying these securities on their books as if nothing had happened. An effect is the deceptive appearance of financial strength.

Now federal regulators are suggesting that tighter rules may be required on how companies value distressed securities. A tightening could push life insurers, in particular, into a financial squeeze, requiring them to borrow billions of dollars or issue shares to maintain capital requirements.
**********
Misetich

The knoose is getting tighter around financial fraudesters and misrepresenters -

As a result the odds of a major financial systemic risk has risen considerably

All On Board The Gold Bull Express

misetich

(06/15/2003; 11:05:29 MDT - Msg ID: 104621)

Job Cutbacks Accelerating in California

http://www.latimes.com/business/la-fi-caljobs14jun14001418,1,1394538.story?coll=la-headlines-businessSnip:

California's labor market deteriorated sharply in May as the state's employers shed 21,500 jobs � even as the rest of the nation combined gained jobs, according to government data released Friday.

The cutbacks were felt across a wide spectrum of the economy, which is being weighed down by a massive budget gap and ballooning business costs. The job losses are the largest since December and mark the fourth consecutive month of payroll declines in California.
................
Misetich

Just when you thought it was over .... here we go again... the long awaited US economic recovery appears to be a mirage

All On Board The Gold Bull Express

Gandalf the White

(06/15/2003; 12:12:06 MDT - Msg ID: 104622)

Thanks Sir Mas, for connecting the TWO messages !

mas (6/15/03; 06:22:12MT - usagold.com msg#: 104617)
Privateer and FOA
FOA
2.11.01
===
You ALMOST had me there, Sir Mas --- UNTIL I thought that you must be thinking in European "date thought", and YES, FOA said that statement on NOVEMBER 2nd, 2001, and not as Feb. 11, 01 as most us on this side of the pond are taught!!
Is it not "real fun" to read the "Trail Writings" and see things that were pronounced then that are coming or HAVE been true in the present !!!
Back to reading the Archives and Trail !
<;-)

Cavan Man

(06/15/2003; 12:59:31 MDT - Msg ID: 104623)

EU vs US

Another difference of opinionAirbus and Boeing clash at air show
By Kevin Done in Paris
Published: June 15 2003 19:12 | Last Updated: June 15 2003 19:12

Airbus and Boeing clashed on Sunday at the Paris air show as the US group accused Airbus of being "irresponsible" in failing to make bigger cuts in production to bring its deliveries into line with the steep decline in the air travel market.

FreeWillie

(06/15/2003; 13:04:14 MDT - Msg ID: 104624)

"Freegold" a tautology?

Hi Everyone (especially Aristotle, Belgian, Oro, SteveH).

I have a question.

According to "A" and FOA, gold will be freed from the poltiicans'/bankers' need to control its price by the current euro set-up, which is to value gold at its market price and so let a rising gold price support the euro rather than undermine its viability, as gold currently does with the dollar.

Assuming the euro "wins" this currency war with the dollar, and the euro system becomes the norm for international currencies, what would be achieved by such a victory?

If the only real competitor, the dollar, is removed or taken over, and all the world runs on this new system, what does it mean anymore to say that a rising gold price "supports" the currency by buoying its reserves' value?

When there is no competing system, what does it mean to say the "price of gold is rising"? If gold "costs more" in terms of euros, the value of the euro 's reserves go up by definition, which then in theory allows for more euro creation.

Fine, but that "more euro creation" is supposedly "discounted" by gold, i.e., in that case gold gets too expensive in terms of euro, which means the euro loses value (inflates). But isn't the whole idea that such would lead to "more valuable reserves" which in turn allows for more euro creation?

In that case, we have a situation where both gold and euro (or whatever other currency is on this system) pull each other higher and higher, ad infinitum, which means that they entire "price discovery process" completely loses its meaning!

In truth, it seems that such a system cannot operate without a competitor like the dollar.

"Price" of a thing always means "value in terms of something else."

When the value of that "something else" and of our "thing" move in the same direction in lock-step, there is no longer a contrast between the two, and no comparison is possible.

In terms of everything else in the economy, i.e., all other goods and services other than gold or euro, both would then become cheaper, that means, it takes more of each of these to buy any of the other goods/services in the economy.

This, in turn would mean that under such a system the euro (or whatever other currency) would be allowed to inflate the price of gold (decrease its value) in terms of everything else in the economy AT WILL -which would mean that fiat is forever freed from ANY restraining function of gold, and could become a total tyrant. Inflation would still be rampant, and nothing would be achieved instead of the death of the US dollar system.

If this is correct, this can only mean that the current euro system was never designed to exist as a "better solution" to the fiat/gold problem, but was only designed to kill off the dollar. Once that is accomplished, there is no further benefit to perpetuating the current euro system because it would lose all meaning (i.e., all capacity of one commodity to "price" the other,where I am speaking of fiat as a "commodity" for purposes of this question).

Am I totally off the mark with this?

If so, please show me where.

Thanks,
EW.

FreeWillie

(06/15/2003; 13:11:37 MDT - Msg ID: 104625)

To: Belgian (usagold.com msg#: 104615)

Belgian:

This ties in with your post below (first one of today) referenced in the subject line, which I read only after hitting the "submit" button. Maybe BC wasn't so far off? I haven't read any of his other statements yet, so I can't tell).

FreeWillie

(06/15/2003; 14:34:15 MDT - Msg ID: 104626)

As to msg#: 104625

Of course, because gold is still scarce and cannot be inflated in quantity (as opposed to fiat-price), it will retain its value, unlike the fiat, so we are back to a situation where gold has to take up a monetary function again (when people dump the now worth-less fiat in favor of gold), much to the discontent to the euro-planners according to FOA.

An' round an' round we go. Looks like "freegold" will never happen.

The only "solution": a world-wide ban on individual gold ownership (by a UN type "governmnent"?)

Crazy times!

FW

Liberty Head

(06/15/2003; 15:14:58 MDT - Msg ID: 104627)

Us And Them - A Matter of Degree

Something to think about.

Liberated Iraq:
Foreign military commanders now rule and control the flow of oil and the selection of rulers to take their place. Citizens and homes are searched; weapons are seized, without warrants. Protesters are killed without trials. The fiat floodgate is wide open. Lies flow faster yet. Desperation is high and looting is widespread. The press is controlled. Gold bullion is confiscated.

Liberated Us:
Military style commanders now rule and control the f;ow of oil and the selection of rulers to take their place. Citizens and homes are searched; weapons are seized, without warrants. Protesters are killed without trials. The fiat floodgate is wide open. Lies flow faster yet. Desperation is high and looting is widespread. The press is controlled. Gold bullion is confiscated.
----
The threat of domestic acts of terror, social unrest and looting rise as does the likelihood that our government will task our military to police our own country as they now do Iraq.
Hopefully, many of our military will find it more difficult to treat their own friends and family members the same way they now treat foreigners. Sadly, many won't.

In hard times, the blood/gold index has upward momentum.
Protect yourself and your gold from the brute force thugs that may appear at your door. Be more clever than they.

Best wishes to all.

Belgian

(06/15/2003; 16:12:46 MDT - Msg ID: 104628)

@ Free Willie #104624

The purpose of an euro, free, physical only, goldmarket is to have a euro-currency that will continously *try* to be managed properly in order to be as good as Gold. This free goldmarket, wanted and induced by ECB and friends outside EU (EMU), has as purpose to impose a monetary selfdisciplinary-system, that keeps the politician's demands in check ! In Belgium we have a nice new example of this with the "silverfund" (a pensionfund-reserve).

The dollar-system (dollar-reserve) has already lost its credebility a long time ago. But there was NO alternative and now thet there is one, the euro-project, this one has to "grow" and mature. This is NOT a matter of winning or losing. The dollar as the sole reserve-currency is NOT a competitor anymore. Euroland takes the initiative for the dollar > euro transition. God knows how this will evolve.

Central bank goldreserves are there, in the first place, as to compensate for the total loss of the dollar-reserves. In the assumption that the euro will evolve into an oil-currency and reserve-currency.

In a REAL (instituionalised) euro free goldmarket, one can chose in what to consolidate one's wealth. Gold or the currency. Gold can be brought back into its original barter function. Oil for Gold or an euro currency as good as Gold.
Individuals can put their faith in free gold or in a genuinly managed currency.

Gold circulation will be officialy encouraged and not only by sporadic coin issuances, as in the past. Normal free goldtrade (taxed)(even trade-settlement) parallel to fiat or digital settlement. The euro currency wants to be "associated" with free gold that fluctuates in price according to the currency's quality of management. Currencies will not compete with each other as is now, but all will compete with free gold.

What is the difference between the permanent depreciation of the dollar-reserve, managed by the printer of that currency and a free goldprice that reflects total wealth that is produced ? Your Gold says what your wealth is !
Back to the REAL goldstandard with free gold that we wanted institutionalized. Today we do exactly the opposite and falsify the price of gold as to "unvalue" gold.

Of course, one will always find new ways to cheat with free gold and pull all power to one side...
Looks what's happening with oil-wealth !

The world went off the goldstandard in different stages,...why shouldn't/couldn't we go back to another form of free gold, also in different stages, starting with the euro-project ?

We have no knowledge of the full blue print of that euro free goldmarket. But Euroland gives evidence of evolving dynamics on so many different fronts. It happens with Gold/goldpolicies This is what FOA called, "pruning of the bonzai".

That's why that former Connolly raw, is getting a "meaning" to me now. Don't need much exact details about this whole affair...what has been said is more than explicite and illustrative for organized anti-euro-ism. And then the LBMA connection !

I (others surely can) can't possibly know how the dollar-block will fit into this new euro free goldmarket thing.

F.W. :It seems to me that you are still thinking in terms of gold-manipulation. A free goldmarket will most probably emerge because our dollar-monetary system is hopelessly broke. The euro has NO interest in destroying the dollar faction or the dollar currency. It is the dollar-system that will not be accepted any further by the rest of the world. The euro has NO Rambo ambitions !

In the good old days of the goldstandard, countries and individuals, consolidated their wealth (surplusses) in goldreserves = wealth. These goldreserves were sold in times of distress and when there was no possibility of generating surplusses (wealth). So in a free goldmarket you will have buyers and sellers of gold, according to their real efforts/successes of their work. More economical wealth production means more accumulation (demand) for physical gold (wealth), less prosperity means more goldsales and the declining POG, reflects the decline in total (or partial) wealth.

In our completely "paperized" world, a real free goldmarket (simple concept) is very difficult to understand and come to terms with that simple logic.

The euro, most probably, might start the concept of free goldmarket (MARKET !!!)...but it will not remain an Euroland exclusivity. Think about all those states that had the luck of abundant "vital" resources in their underground.
The majority of these regions live in absolute poverty ! This is NOT a coincidence !

A free goldmarket system might bring big changes into this situation (fait accompli). Why are Chinese, Russians, Middle East so familarising with Gold ? They want value for value, exchanged in an horizontal way. hey will buy physical gold for what they produce in excess on real goods and services and sell gold when they need it for settlements in a period of no excess !

As long as there was no alternative for the dollar-reserve (system), it was impossible to ever agree on a free goldmarket (standard) ever again ! The dollar couldn't ever accept this because of the long term mismanagenment that we all "had" to accept. The Gaulle was the last one to make a succesfull goldraid from the US goldreserves. Then the window "had" to be closed and paved the way for dollar-debauche. That's when Euroland started to be architected !!!

And here it is that Euroland and its euro. Maybe an ugly baby, but it will grow up and become attractive. I never believed it myself, but gradually became an Eurolander instead of a Belgian lilliputan.

I think that you make the mistake of not seeing the word "market" in the free goldmarket. Gold, the currency without a country in a global market. Up until now, we all had dollars as reserve. Maybe later, the dollarblock will have euro as a reserve, as good as gold, as others are already building !?
FOA suggested one major law that should be accepted in a free goldmarket. Gold-loan disputes can never be finalised in the delivery of physical gold, when settlled in EU courts.

And let us NOT forget the fact that 1,2 Billion chinese have their liberated goldmarket, now ! Nobody of the gold-authorities bothers to explain "WHY" exactly the chinese, are having this gold-affair !

I've done my best FW. But please, don't forget I'm only a gold-student and solely expressing/communicating my personal intuitions in poor English.

CoBra(too)

(06/15/2003; 16:52:00 MDT - Msg ID: 104629)

LoCascio - An Important Interview by Jim Puplava

http://www.netcastdaily.com/1experts/2003/exp061403.ramIf it doesn't work - please go to "Financial Sense" Broadcast ...

Meantime, the arrogance of Barrick/JPMC lawyers to dismiss the Blanchard case on terms of "too big to sue and not under your jurisdiction, Judge" - backfired as judge Helen C. Bergen dismissed this attempt of "blackmail"!

Rather,it seems to have triggered a rout of class actions against the perpetrators. An instance, quite opposite to the Reginald Howe case, which leaves us with some hope that the're still some incorruptible people in place.

On another topic it is slowly sinking in that to win a war is easy - to win the peace is somewhat different, even for the only superpower. Afghanistan, Iraq and the peace road map of israel/Palistine is blowing up in GWB's face.

... Is it that the bribes of paper dollars are seen as what they are - non-valeurs, like any other paper currency - and super power status alone is in the long run not enough to maintain an imperialistic power?

Any power built on clay (printing presses) have been toppled in history.

THE time to hold GOLD - in order to protect your wealth and liberty - as the "exorbitant privilege" of the US dollar reserve currency is being questioned! ... while doing everything to lower the relative worth (not value) ... cb2WOIE=-

FreeWillie

(06/15/2003; 18:06:30 MDT - Msg ID: 104630)

@ Belgian: Stated purpose vs. actual effect.

You said:

"This free goldmarket, wanted and induced by ECB and friends outside EU (EMU), has as purpose to impose a monetary selfdisciplinary-system, that keeps the politician's demands in check !"

Well, that's exactly why I asked my question. I know it's "supposed" to do that, and I know that you beliebve it, but technically speaking, when gold and euro (via the euro's gold reserves being valued at market) are moving in the same direction, then neither is a check on the other. That's just a fact. Good intentions do not change that.

Given that politicians are human, and humans are subject to temptations, and temptations get bigger the higher up in the power structure you get, once gold and fiat move in the same value-direction, there no longer IS a restraining effect coming from gold EXCEPT to the extent that people can always choose to switch to gold if the euro gets too plentiful.

But that brings with it two problems:

1. It would necessitate that people use gold as a medium of exchange again - which is something that goes wholly against FOA's theory of "free" gold (free from society treating it as money - which is subject to abuse as history has shown - but retaining only it's "wealth-asset" function, for which it is best suited, according to FOA). This was one of FOA's main tenets in describing what he calls the "best-use function" of gold.

2. That, in turn, would make politicians again perceive gold as being "in competition" with their fiat currency (which is what the euro still is, despite being supported by gold)> This in turn would cause them to be tempted to restrict gold ownership again.

My concern is - as you know - that the entire thing would be an exercise in futility, getting us right back where we were before, except that by virtue of the euro taking over the dollar's reserve function, it would cause hyper-inflation and therefore economic breakdown in the US.

Let's face it: the dollar is really "sick" from over-use and over-issuance. It cannot stand in the face of a gold-supported euro that has the sympathies of the oil-bloc on top of being "new" and not over-printed (yet.)

So the dollar WILL crash, and gold WILL reign free for awhile. But since we have seen that after the US collapse gold would no longer restrain any fiat (euro or otherwise)from over-printing, the promises of "freegold" will not be realized.

Again, I am asking this from a TECHNICAL, not ideological perspective:

Is there anything in the freegold concept that would avoid the temptation of politicians/bankers to view gold as a "competitor" again, once inflation of the fiat-supply will make people move out of euro and back into gold?

Put yet another way:

How is the euro/freegold situation different *in principle* from the gold/paper-dollar situation that FDR was confronted with? (Banks were threatened because people lost faith in the dollar and demanded gold instead, threatening to expose the fact that the banks had lent out more gold that they could back up with physical reserves.)

(I know that here there are no banks involved that risk exposure of a lack of gold reserves, but we are still dealing with the typical effect of over-inflation of one asset versus another. The same *principle* applies)

(Besides, your English is by no means "poor")

Does anyone else have input on this? Aristotle? Oro? anyone?

Thanks,

FW

Cavan Man

(06/15/2003; 18:24:05 MDT - Msg ID: 104631)

FreeWillie

Excellent use of the word, tautology. Kudos!

Aristotle

(06/15/2003; 20:16:38 MDT - Msg ID: 104632)

FreeWillie, you've got something amiss

A couple phrases of yours -- "...when gold and euro (via the euro's Gold reserves being valued at market) are moving in the same direction, then neither is a check on the other. [...] once gold and fiat move in the same value-direction [... etc etc]"

The euro is not going to get ever stronger with time. Like all fiat currencies, it will get weaker with time -- slowly (if all goes well) according to the ECBs price stability objective of inflation "below but close to" two percent annually. Getting back to your key issue, as the euro-denominated price of Gold rises, how on earth are you taking this to be representative of a *stronger* euro??? After the initial necessary one-time massive revaluation of Gold, the ongoing price adjustments after that will simply reflect the market's instantaneous opinion of the euro's purchasing power. In other words, a higher Gold price would generally be indicative of a weakening euro.

You might want to revisit your thoughts on this one.

Gold. Get you some. --- Aristotle

Chris Powell

(06/15/2003; 21:04:49 MDT - Msg ID: 104633)

New report by Reg Howe finds most central bank gold is committed....

http://groups.yahoo.com/group/gata/message/1548... to the gold price suppression scheme.

A new report by GATA consultant Reg Howe finds that
most central bank gold is now committed to the
gold price suppression scheme and that gold
derivatives are exploding even as mining companies
close their gold hedges.

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

LeSin

(06/15/2003; 21:52:18 MDT - Msg ID: 104634)

"Currencies Not To Compete With Each Other Only With ANOTHER - GOLD

Belgian's Great Thoughts from a Master Student of EURO & GOLD
Sir Belgian

Wow! (At least for me) That is an enormous statement:

"Currencies will not compete with each other as is now, but all will compete with free gold."

Belgian, Ari and other esteemed participants here - please expand and elaborate on the above statement. Many here are eager to learn and avoid the coming inevitable storm.

It would be great if FOA and ANOTHER would contribute to further expand that "Thought" becoming a "Reality" very soon.

Gold get you some during these final June 03 clearance sales - at never to be repeated prices. Sure wish I had more fiat to exchange for real physical gold. Shucks

Cheers "S"

Max Rabbitz

(06/15/2003; 22:25:51 MDT - Msg ID: 104635)

Euro Tautology?

Let's see if I understand this. The higher the price of gold in Euros the greater the EU gold reserve and therefore the more Euros can be issued. The more Euro inflation the greater the price of gold in Euros. This spirals up to an infinite number of Euros issued and an infinitely high gold price. Not good, well not for the Euro. Other reserve currencies are needed for stability. The Euro itself can't be a reserve currency in the Euro system, only elsewhere. If the 85% of reserves from these other currencies appreciate to the same degree as gold then the 15% gold ratio stays the same and no new Euros can be created. If these other currencies (or currency) decline in value then the percent gold in the EU reserve increases and more Euro's can be issued.

mas

(06/15/2003; 23:29:22 MDT - Msg ID: 104636)

Gandalf

Yes it is real fun.
But I still can't figure out how the gold price is to be "freed" in euro's? I see the rate of 302.80 today vrs 360. So how is the price to go to the moon. And using what system of trade to get it there? Just trying to figure out inbetween Belgians points and our present position, that is now.

seagull

(06/15/2003; 23:33:29 MDT - Msg ID: 104637)

Cavan Man re: Airbus vs Boeing

http://www.joevialls.co.uk/transpositions/concorde.html I came across this article which discusses this topic, and presents a very controversial case, linking 911 with the debate! In the FWIW department!

FreeWillie

(06/15/2003; 23:36:09 MDT - Msg ID: 104638)

@ Cavan Man ("tautology")

Thanks. Got any input on my question?

Liberty Head

(06/15/2003; 23:37:24 MDT - Msg ID: 104639)

U.S. Mint

I rarely watch T.V., however today I watched a Father's day showing of Young Guns. I could not resist.
The legend of Billy The Kid, son of a silver miner, fighting the cabal of his day, is still in the news. Graves are being dug up today to use DNA testing to find the truth of his death.

Back to the point, the U.S. Mint has T.V. commercials promoting Gold Eagles.
Curiouser and curiouser.

All comments welcome.

Cheers

Zhisheng

(06/15/2003; 23:48:08 MDT - Msg ID: 104640)

Good Action Tonight.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main.html?sSymbol=GLD.FX1Last I looked gold was up $4.50 an ounce on the evening, with the dollar pretty much unchanged.

Aristotle

(06/16/2003; 00:01:37 MDT - Msg ID: 104641)

Max Rabbitz (msg#: 104635)

Your comment:

"The higher the price of gold in Euros the greater the EU gold reserve and therefore the more Euros can be issued. The more Euro inflation the greater the price of gold in Euros. This spirals up to an infinite number of Euros issued and an infinitely high gold price. Not good..."

I think you have erred in making/assuming the progession purely automatic -- as if the ECB has somehow relinquished all control of money supply (an thus ignoring its principal mission of general price stability I mentioned earlier) and that any a priori racheting up of gold value/price must be (indeed, it instead need *not* be) accompanied by further emission of euro notes against the increased value of Gold reserves. Simply put, as the Gold price rises, the ECB need not *necessarily* puff up the money supply.

The ECB, for example, could conceivably sell some Gold to sponge up a quantity of an abundantly unwanted weak euro, or it could buy Gold to add euros as deemed fitting.

In a word: management is by flexibility. Not by rote.

Gold. Get you some. --- Aristotle

FreeWillie

(06/16/2003; 00:05:51 MDT - Msg ID: 104642)

@ Aristotle: Exactly my question

Thanks, Aristotle. That's exactly what I was asking.

I understand FOA to say that the ECB purpose of valuing gold at market every quarter is to allow the euro gold reserve position to rise along with the price of gold, which would serve to strengthen the euro. In other words, the "little trick" of marking gold to market would eliminate any competition between the euro and gold, while the dollar is trapped in its dependence on a low gold price. Did I get him wrong?

You are saying that gold will get only one, giant re-valuation and then the euro will still be in competition with gold, just like all other currencies, and just like the dollar now.

That was my concern. If the euro and gold were to rise simultaneously, there would not be any fiat inflation
"control" left in the system. But since then I thought about it some more and figured that the ability of the gold price to rise would "soak up" some of the excess fiat euros created (pretty much like the stock market has soaked up credit money here in the nineties), and thereby prevent or at least limit price inflation in the general economy. FOA did make allusions to that.

On the other hand, it seems that in buying gold, you are giving your fiat to a gold dealer or individual holder/trader who will eventually turn around and still spend his proceeds in the economy, putting on upward price pressures again. How do you see that?

Another question: I understand that the ECB inflation target is just below or at 2%. Does that mean 2% increase in money supply or 2% increase in price-inflation?

FreeWillie

(06/16/2003; 00:16:32 MDT - Msg ID: 104643)

@ Aristotle:

I think you answered my quesiton in your post to Max Rabbits while I was typing. Quote:

"I think you have erred in making/assuming the progession purely automatic -- as if the ECB has somehow relinquished all control of money supply (an thus ignoring its principal mission of general price stability I mentioned earlier) and that any a priori racheting up of gold value/price must be (indeed, it instead need *not* be) accompanied by further emission of euro notes against the increased value of Gold reserves. Simply put, as the Gold price rises, the ECB need not *necessarily* puff up the money supply.

The ECB, for example, could conceivably sell some Gold to sponge up a quantity of an abundantly unwanted weak euro, or it could buy Gold to add euros as deemed fitting.

In a word: management is by flexibility. Not by rote."

My question:

Is there anything "systemic" in this ECB setup that would eliminate the temptation of central bankers/politicians to over-print to pay the government's debts, given the opportunity? I.e., is there anything beyond the knowledge that "printing" leads to currency weakness down the road (which I am sure even our polits and bankers know, but do it anyway)?

My concern: as long as politicians have the ability to inflate, they will, no matter what the stated good intentions are (i.e., to keep it under 2%).

Belgian

(06/16/2003; 01:28:13 MDT - Msg ID: 104644)

@ Free Willie as Free as Gold shall be.....

Is the dollar spiralling upwards with a declining POG ! No it isn't. The dollar pseudo wealth owners keep their faith in the dollar and don't exchange the paper for Gold.

Fiat and Gold will always move into "OPPOSITE" directions !!! More euro for the same ounce means a weaker euro, becoming less, as good as Gold. The market will prefer to consolidate its wealth in Gold, rather than in fiat and the fiat managers "MUST" alter the management of their Gold OR LOSE PHYSICAL GOLD OUT OF THEIR GOLDRESERVES as to defend the currency !!! Declining Goldreserves in the vaults means degradation of the wealth of that state!

Problems :

1/ Gold as a medium of exchange : Not ALL trade will be settled in Gold and never was. Fiat will be here to stay !
GOLD WILL NOT BE MONEY !!! Gold always was and must become again, a WEALTH ASSET !!! Fiat for settlement must be associated with Gold Wealth as to give it (fiat) intrinsic value. Go back to the old days of the "Goldsmiths".
The global * MODERN * markets will always need modern fiat (plastic) for settlement and settlements in Gold will only be used in certain important fractions of the global (local) trade.

Gold and fiat settlements will live *freely* together, controlling each other. Today, we have such a similar UNFREE living together where POG wasn't/couldn't go to zero. Why should POG go to infinity in a future free goldmarket + fiat markets ?

A state who wishes to create more fiat will have to increase its *physical* goldreserves. Another state who wishes to devalue its fiat will sell out of its goldreserves (wealth not gold-money).

2/ Yes, Gold MUST/SHOULD, always remain in competition with fiat ! They succeeded in taking this competition away and leave everything to a pure goldstandard ! Freegold is Gold with no threat of confiscation ! You are thinking in dollar terms (dollar past). Euroland never confiscated Gold...ON THE CONTRARY, has always encouraged a minimum of PHYSICAL goldholdings for its citizens !!!

Hyperinflation is there to come. No matter what will happen next. It is this inevitabilty that speaks for the new freegold system. Freegold must carry us all over the "DEBTBERG" that must be inflated away, but not without the gold-refuge and a new (better) (euro)system in place and functionning !

You are suggesting a coming Goldprice debauche and fiat overprinting !? The dollar is already OVERPRINTED and you simply conclude that the euro will do exactly the same but instead of doing it with declining (contained) POG, with a rising POG !?
You keep thinking about Gold as money ! GOLD IS NOT MONEY !
GOLD IS THE SOLE EXPRESSION OF CONSOLIDATED TRANSFERABLE WEALTH.

Technically (not ideologically) : How can one increase its VOLUME of Gold Wealth when POG goes up and worthless fiat loses purchasing power ??? We will remain in a "dual" system of Gold and Fiat !!! It is the artificial meaning of "money" that causes the confusion. Fiat is a tool for trade settlement and if you destroy this tool, one cannot create "MODERN" wealth anymore. We are NOT going back carrying goldcoins and pay with them at Wall Mart. Your Gold Wealth cannot increase when you destroy the modern fiat/plastic way of trade settlement. That modern fiat/plastic only needs a back up system that avoids fiat/plastic debauchery. This was ( still is) possible with the past contained Gold.

As Ari already pointed out : Gold needs a gigantic "revaluation" as to correct for the past mismanagements. Once this revaluation has taken place, we land in a different constellation...freegold ! The ongoing fiat/plastic debauchery has limits. Out of a financial/monetary collapse, the new freegold market will see light. Maybe we can start Gold wars and loot it from each other ? Noooooo, just compete in making your fiat/plastic, for modern tade settlement as good as Gold and prosper in peace ! An ideology that is technically possible and a sure sign of another step in civilisation.

A good system always finds more participants to make sound agreements for the better. But if one remains in the logic of war and evil, nothing but destruction is the natural result ! Thnk deep about this !

BTW : WHO is refusing to make global agreements, today ?
Isn't it normal that onesided, increasing (dollar) pressure, provokes counter pressure ? Main difference is in the nature of both pressures ($ >< �) ! Euroland has its very turbulent history, already behind it. We learned our lessons and want to use this wisdom for a peaceful world. That's the main idea behind Euroland dear F.W. All people should be brothers (Beethoven) ! NOT an easy job of course.

The euro-gold-project will soon be ready if and when the dollar-systems collapses and becomes unworkable. Global agreements will instantly become easely possible for the better of us all.

It seems to me that your "logic" is one of total demise of all fiat/plastic and Gold going to give ALL power to its private owners ! That is a very *extreme* view and has vey little chance of becoming reality. This doesn't implicate that some private individuals (Giants) aren't anticipating the plausable euro-Gold outcome.

Thanks for provoking our thoughts ! Regards, B.

Black Blade

(06/16/2003; 02:43:51 MDT - Msg ID: 104645)

Gold Trust Buys Into Bullion

http://m1.mny.co.za/MGLdn.nsf/Current/8525690B0032142042256D4600484AA7?OpenDocument
Snippit:

Graham Birch, managing director, sector funds, at Merrill in London, says the purchase was triggered by the fall in the value of the US dollar against other trading currencies which in turn boosted the gold price to $370 an ounce at one stage.

"We look at gold [bullion] as cash. It's just a different type of cash," he explains. However, Birch also insists that gold is not an exact proxy for the dollar because "as gold falls by one percent, gold is likely to rise by 2 percent."

Birch adds: "Gold is not a bad investment at the moment. At $355 an ounce the price is not astonishingly high. There is plenty of scope for it to rise. We no longer see [gold producing] companies popping up to hedge as the price goes up and neither are central banks selling. That's why we have an upward trending market."

He also has expectations that liberalisation of the gold market in China will help investment buying � "that will mean a quarter of the world's population will be able to buy gold bars." Also, the new securitised gold products, some backed by the World Gold Council, should help lift demand. "The average US institution has zero gold at present. These products will enable them to have some."

Black Blade: More individuals and institutions are beginning to focus on gold ahead of the Federal reserve's half point rate cut next week.

Black Blade

(06/16/2003; 03:02:18 MDT - Msg ID: 104646)

China may cut its link to dollar

http://www.timesonline.co.uk/newspaper/0,,2769-713612,00.html
Snippit:

CHINA may be ready to break the link between its currency and the dollar, rather than track the falling American currency, analysts believe. The hugely competitive Chinese economy has been greatly helped by the dollar's fall, which has pulled its currency, the renminbi yuan, lower against the euro and yen.

Black Blade: Who can blame them if they do? China and other Asian central banks are top-heavy with dollars that they are anxious to unload. As they do unload the dollar will weaken further. Note that in the last quarter of last year China's central bank bought gold at a rate close to what the Washington Agreement allowed. A transfer of wealth toward the east perhaps? I would not be surprised to see Asian CB's accelerate gold purchases.

Topaz

(06/16/2003; 03:04:15 MDT - Msg ID: 104647)

Currencies.

http://quotes.ino.com/chart/?s=NYBOT_DXY0Dollar just power-walked through 92...and is now struggling back up. Gold and Bonds yawningly benign as of this.

Black Blade

(06/16/2003; 03:24:32 MDT - Msg ID: 104648)

Gold's Short Position: Part Myth, Part Yesterday's News

http://news.goldseek.com/NationalInvestor/1055708115.php
Snippit:

It has been long predicted that once gold moved above certain levels we would see an unprecedented buying stampede. The reputed source of such demand would be those players who, during the gold carry trade boom of the latter part of the 1990's, borrowed tons of the shiny stuff and sold it short, to profit both by reinvesting the proceeds elsewhere and from the declining gold price. By some accounts, the short position even now is as high as 15,000 metric tons, the equivalent of the expected new mine production over the next SIX YEARS. Certainly, if even a healthy minority of these positions (to the extent they really still exist) needed to be covered all at once, sheer bedlam would be created in the markets. Not only would gold's price indeed soar, but most other markets would be roiled as speculators would have to trash holdings in bonds, stocks, currencies and more to cover their behinds where gold is concerned.

Such a thing came perilously close to happening in the Fall of 1999. Following a well-bid Bank of England auction and the surprise Washington Agreement that limited new sales and leasing activities by most central banks, gold began to soar. At that time, gold's $80 per ounce spike in a mere three weeks was indeed caused primarily by those who had been caught with their pants down on the short side, and were scrambling to cover. Had not the New York Fed (via J.P. Morgan) intervened to cap gold's rise, it would indeed have been "off to the races." In my view - as I wrote at the time and have reviewed several times since - the world's financial markets were within a few days of having their wheels come off.

We're nearly four years later in time. And now - even during gold's two significant (but temporary) spikes higher during the last few months - we have seen no evidence of such a mad scramble as occurred in 1999. The question is - why not?

"I believe that the Fed - and perhaps other central banks - has been feverishly 'liquefying' the gold market so as to keep the recent advance a much more orderly one than was 1999's. . .The motive, of course, is to get as many of these institutions (those still heavily short) as possible out of harm's way in the event that gold rises far more, and in such a way that the bankers are unable to do anything more than slow it down. . .I am increasingly persuaded that the low lease rates are an indication that the bankers realize, in the end, that they cannot fight the markets where gold is concerned, any more than currency intervention works if the markets are of a mind to do something different. . ."

Among other things, I also wrote in that same report that the Fed now desired a rising gold price. I believe it continues to want this; though, again, in a fairly orderly fashion. In case you've been asleep in recent months - and especially in recent weeks - the central bank is hell bent on fighting DEFLATION now. In some respects it will succeed; in others, history and mathematics are against the Fed. Whatever the case, the most politically powerful and influential economists are telling us that a rising gold price is "proof" that the Fed's efforts at reflating both Wall Street and the economy are starting to bear fruit. And Alan Greenspan is not about to take that ammunition out of the pundits' hands when all of them need any and every reason, both real and imagined, to convince the public that all will be well.

Black Blade: Another interesting perspective on the rising POG and why it will continue. I tend to agree as I have heard several financial media buffoons changing tack and now saying that a rising POG is a good thing and it shows that the Fed is successful fighting deflation. CNBC's "Heckel" has been one visible pundit saying this. I still have to laugh when I hear the Wall Street morons champion the loss of "jewelry demand" even when gold as a "currency" is outperforming the dollar. Just because very few people hang dollar bills around their necks does not mean that the dollar is losing value because of some declining extraneous demand such as "jewelry", gold as a currency is simply more valuable against an increasing flood of dollars that can be created out of thin air and rolled off the printing presses because of some Fed officials or politicians wet dream about controlling currency. Gold is acquired by hard labor and is a rare metal that can't be pumped into the system at will. In fact the global human population is growing faster than gold is mined.

Belgian

(06/16/2003; 03:49:11 MDT - Msg ID: 104649)

@ mas @ Le Sin

The present low/lower "euro"-POG is evidencing an euro strong in Gold, in terms of the still existing dollar-paper-goldmarket ! Bear in mind that we have to get rid of this dollar-paper-goldmarket "FIRST", as to simultaniously have the euro-physical-goldmarket, where the huge REVALUATION should take place ! The seld-destructing process of the dollar must be given its appropiate time and ritme. No use to "force" things.

When the gold-management will be replaced by a freegold market, currencies can and will concentrate on their currency management in function of the Gold-Wealth. All currencies "floating" around Gold. Not your currency, but your Gold will say how wealthy you really are. Currencies will try to manage as to be able to acquire as much as Gold Wealth as possible. This is a "positive" approach and not a negative one as is "destructive", global currency competition (devaluation). Let's compete in how productive, inventive we are instead of how we can kill each other !

Let us agree to have GOLD as the ultimate arbitter. We will soon "have" to agree on that, after the dollar-euro duel has resulted in the dollar's surrender !

The Invisible Hand

(06/16/2003; 04:25:10 MDT - Msg ID: 104650)

No comment

http://www.inq7money.net/breakingnews/view_breakingnews.php?yyyy=2003&mon=06ⅆ=16&file=17SNIP:
KUALA LUMPUR-- Malaysian Prime Minister Mahathir Mohamad Monday proposed a currency basket of the euro and the US dollar for oil trades to hedge against a weak greenback and manipulation by currency traders.
The veteran Southeast Asian leader said oil-producing countries were feeling the impact of the weak greenback, which has fallen sharply against the euro.
"It is time that the quotation of oil prices in dollars be reviewed," he said in a speech read by his deputy Abdullah Ahmad Badawi at the opening of a two-day Asia oil and gas conference.
"Perhaps it would be better if payments for the sale of oil by producer countries are made with the euro equivalent of the US dollar. Then the appreciation of the euro would benefit the producers."
...

Belgian

(06/16/2003; 04:53:26 MDT - Msg ID: 104651)

Iran

Iranian student revolts (invisible dollar-hand). EU quickly to urge Iran to comply with controls on Iran's nuclear projects as to not give the US (another) pretext for invading another gigantic oil/gas reserve in the ME. Note that Iran has China support !

silvercollector

(06/16/2003; 05:07:51 MDT - Msg ID: 104652)

Belgium

From one of your messages you state:

"A state who wishes to create more fiat will have to increase its *physical* goldreserves. Another state who wishes to devalue its fiat will sell out of its goldreserves (wealth not gold-money)."

The ECB (at this time) maintains the same amount of gold. Since Jan 2001 up to and including this day gold reserves measure 24,656 million oz. As of Apr. 03 that amount of gold was valued at 7,459 million Euro. Total reserves were valued at 40,730 million Euro. Gold amounted to a little more than 18% of reserves. (These figures are available on their website)

Has the ECB printed more fiat? They have not increased *physical* holdings? Your statement implies a ratio (here we go again!!!) of fiat 'out there' backed by physical gold. I have documented the ECB reserves since the Euro inception, yes indeed, gold began at approximately 15% of reserves but since gold's appreciation the number has increased to slightly over 18%.

What does this mean? Perhaps simply that the increased percentage (15>18) is merely a reflection of a weaker dollar. The weaker dollar calculates to a lower "total reserve" thus a seemingly higher physical gold reserve.

So here's a question. Gold reserve percentage has increased, physical has not, therefore can the ECB 'print' more fiat? Based on your statement, because 'the state' has not increased physical holding it cannot, correct? Has the ECB increased the Euro base. Are there not more Euro's in existance?

The establishment of 15% gold to total reserves is in place. What is the relationship of total currency base (existance) to reserves? Is this the problem with the dollar, is there constantly and increasingly less and less 'reserve' backing up a massively increasing fiat existance?

A liitle sidebar; the ECB began to sport 'SDR' as reserves in Jan 2001, some 74 million. The number has increased to this day to 160 million. Why is this? Are the SDR's not the fiat derived from fiat?

As we can see the ECB has a little over 12,000 tonnes. We have been lead to believe that the USA has some 8,400 tonnes. Why does the USA not 'mark-to-market' and why is their 'reserve' gold valued at $42? Can their not accomodate a similiar 'gold-backing' reserve system? Is this not the essence of reserve held gold?

Thanks.

misetich

(06/16/2003; 05:32:02 MDT - Msg ID: 104653)

The Scary Side of Low Rates

http://www.businessweek.com/magazine/content/03_25/b3838030.htmSnip:

The trouble for the Fed, though, is that when it cuts rates, the money doesn't necessarily flow to the parts of the economy where it can do the most good. Despite all the money that the central bank has pumped out, industrial companies remain gun-shy about taking on new debt to finance investment. Commercial and industrial loans at banks have actually shrunk over the past year, by $75 billion according to the Fed.

Even though lending rates are extraordinarily low, chief executives in the goods-producing sector are reluctant to borrow for fear that, with prices falling and demand lackluster, they will have a hard time repaying loans. In essence, manufacturers are mired in a localized deflation and low interest rates make very little difference to them. Adjusted for expected deflation in the price of goods they sell, real interest rates for those firms "have been going up," says Wachovia Corp. economist Mark Vitner.
***********
Misetich

Sir Greenspan & Co have been saying - US is not like Japan - well it may not be - yet all Feds actions have failed to stimulate the economy - pushing on a string

All On Board The Gold Bull Express

LeSin

(06/16/2003; 06:06:30 MDT - Msg ID: 104654)

Road Maps & Trail Walks & Scouting Ahead & Looks Around the Bend

Thanks Sir Belgian
Sir Belgian
Thank you for your efforts and insights. It seems that you now have a clear road map and understanding of where those trail walks are leading. The next bend in the road will be most interesting and telling. We wait however not patiently.
Cheers "S"

Belgian

(06/16/2003; 06:32:09 MDT - Msg ID: 104655)

Merryl Lynch

M.L. London, invests usually in unhedged gold producers...
but...increased its holdings (Holdings !!!) in Ashanti Gold (Anglogold)...
Are these two miners, small, state of the art, forward sellers of underground gold...?

Example of the ambiguity and inconsistancy, imvho.

Cavan Man

(06/16/2003; 07:49:45 MDT - Msg ID: 104656)

Euro Recycling?

What say you Aristotle?By Noah Barkin and Jason Neely
LE BOURGET, France (Reuters) - European plane maker Airbus trumped arch-rival Boeing Monday by unveiling a massive $12.5 billion order for 41 wide-body jets from Dubai-based airline Emirates.

At the 45th Paris Air Show, state-owned Emirates also announced that it would take on 26 Boeing 777 planes, but none of those represent new orders for the Chicago-based aircraft maker.

The Airbus deal includes the purchase of 21 A380 superjumbos and makes Emirates by far the largest customer for the huge 555-seat double-decker that airlines will begin operating from 2006.

goldenpeace

(06/16/2003; 08:01:36 MDT - Msg ID: 104657)

Repos

Fed did 52+ Billion in 10 day repos today
Bowing
goldenpeace

Belgian

(06/16/2003; 09:25:54 MDT - Msg ID: 104658)

@ silvercollector.....on holidays with the 511 pages...

To answer, with conclusions, on your correct observations, of ECB's facts...would require that the answerer is a professional central banker and has knowledge of the specifyc policies of the ECB bank. Central bankers don't play with their cards on the table !!!

We are all, amateur observers, silvercollector. And constantly with more questions (and theories) than answers.
ECB has 729 tonnes of Gold-reserves and the rest of EU-gold is still in the vaults of the national member banks. This is another complication to the equation...relationships between the ECB (BIS) and the member national central banks and their respective goldreserves under the EMU umbrella.

They are NOT (!!!) uncovering their policies up until they think it opportune (right moment) to inform the public with faits accomplis.

Central banks are per definition un-transparent !

We are still guessing what custodial-deep storage, FED Gold, means and what effect this name-change has on goldpolicies.

US' Gold priced (booked) at 42$ is evidence that the US desires to remain on the dollar-standard and that the US has other purposes (policies) for its goldreserves, whatever these purposes might be.

The only thing, that we can observe up until now, is that the FED and the ECB, must have totally different policy-intentions with their respective goldreserves. That's as far as we can get with a certain degree of certainty. Much of ALL the other commitments and present/future policies are guess-work, speculation and deductions.

The US stopped backing the dollar with Gold in 1971 ! Reason : an already hugely overprinted dollar...AND THE US WANTS TO KEEP IT THAT WAY !!!

Knallgold

(06/16/2003; 09:29:33 MDT - Msg ID: 104659)

360 stiff resistance

I thought 360 is just Another number on the way up...

(06/16/2003; 09:31:31 MDT - Msg ID: 104660)

Rumours about Iran

Last week, a daily Turkish newspaper rumoured that CFR held meetings in Turkey. It was supposed to be related with a new US operation, expected to start in a few months targeting Azerbeycan, Iran and Middle East.

(link in Turkish) http://www.aksam.com.tr/arsiv/aksam/2003/06/10/yazarlar/yazarlar154.html

The paper is not clear about the scope of the operation, but the implication is that an attempt to split a part of Iran and merge it with Azerbeycan shall be made�.

If that is true, the event may coincide with a new upleg in gold.

21mabry

(06/16/2003; 09:42:19 MDT - Msg ID: 104661)

Miners

There have been several days in the past couple of weeks when silver and gold miners shares moved in opposite directions of each other.Today the silver miners are showing rising share price the golds I watch are mostly down. It just seems they have moved independently of each other as of late.21

goldenpeace

(06/16/2003; 12:49:13 MDT - Msg ID: 104662)

Foolin' with us...

OK so i'm looking like an idiot. Now the Fed takes the 52+B in repos down from their NYFed web site and says they did 6.5B of overnight repos and 4B of ten day repos....nothing like jerking us around...why would that be?
Bowing
goldenpeace

USAGOLD / Centennial Precious Metals, Inc.

(06/16/2003; 13:14:33 MDT - Msg ID: 104663)

Featuring BULLION...

http://www.usagold.com/gold/special/current.html

TownCrier

(06/16/2003; 13:52:21 MDT - Msg ID: 104664)

Oil pricing in euro denomination

http://biz.yahoo.com/rf/030616/energy_euro_2.htmlHEADLINE: EU says oil could one day be priced in euros

BRUSSELS, June 16 (Reuters) - The European Union's top energy official said on Monday she could see the euro replacing the dollar as the main currency for pricing oil.

"In the future the euro is (going to be) taking a place in the international markets in general as the money of exchange," European Energy Commissioner Loyola de Palacio said.

"It's a stable and a strong currency -- the role of the euro is going to be increased step by step -- it's normal," she told reporters after a meeting with U.S. Energy Secretary Spencer Abraham in Brussels.

...said European Commission President Romano Prodi had raised the issue on several occasions.

"It's a matter of realism," she said.

------(see url for article)-----

This should be no surprise among our regular participants and readers here. Now, have you made your preemptive move toward gold, yet?

Call Centennial for assistance with your order and take advantage of our competitive pricing. Check out that bullion special, ask about sovereigns, Swiss gold francs, etc. Call today, toll free. (800) 869-5115

R.

Black Blade

(06/16/2003; 14:19:56 MDT - Msg ID: 104665)

Get ready for warnings

http://money.cnn.com/2003/06/13/markets/sun_lookahead/index.htm
With the end of the quarter approaching, look for companies to start confessing.

Snippit:

NEW YORK (CNN/Money) - With the end of the second quarter, it is time again for companies that have sinned in the eyes of Wall Street to kneel at their pews and confess their sins.

Black Blade: Don't worry about it � analysts will just lower "earnings expectations" so that earnings (or losses) will meet or beat the street. I noticed the huge DIA, QQQ, and SPY orders and block trades that accelerated into the market close today. Apparently the individual investor has left this market and it is mostly institutional program trades. It looks like a rally on short covering and not on fundamentals, probably sparked off by the Federal Reserve "New York Manufacturing" data. Productivity continues to climb as workers are fired and remaining workers take on increased work loads (go figure). Volatility should remain high as this week is "triple witching" and stock market players will adjust positions. If there is a true economic expansion we should see a tremendous surge in energy use pressuring already strained NatGas and oil inventories. That has not been the case as yet. Personally I find it quite amusing. "Interesting Times"

Gandalf the White

(06/16/2003; 14:32:53 MDT - Msg ID: 104666)

FED "games"

goldenpeace (06/16/03; 12:49:13MT - usagold.com msg#: 104662)
Foolin' with us...
===
Your eyes were most likely not "Foolin" you, Goldenpeace.
Most likely someones BOSS saw it too and SCREAMED !!
ANOTHER posting somewhere will be made in VERY SMALL PRINT.
<;-(

TownCrier

(06/16/2003; 14:49:28 MDT - Msg ID: 104667)

goldenpeace, Gandalf: On the Fed's $52 billion blunder

In the open market the Fed today added $10.25 billion, of which $4 billion was through ten-day repurchase agreements and $6.25 billion was through overnight repos.

Those are the official sizes of the two open market operations after the Fed did originally indicate $52.65 billion was done in the former operation.

Because that amount happens to exactly match the total of all bids submitted for the ten-day tender, I think you can chalk this one up to simple human error inputting stats in the wrong field on the reporting page.

Questions? Comments?

Randy

Black Blade

(06/16/2003; 15:02:01 MDT - Msg ID: 104668)

Deflation Fears Renew on Wholesale Report

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=2&u=/ap/20030614/ap_on_bi_go_ec_fi/economy&sid=95609868
Snippit:

WASHINGTON - The threat of national deflation, an economically dangerous long-term slide in prices, rose anew Friday with a second monthly decline in wholesale costs. The Federal Reserve is expected to shave interest rates this month to guard against possibly worse problems. The Labor Department reported Friday that its Producer Price Index, which measures prices before they reach consumers, fell 0.3 percent in May from April. That decline followed a record 1.9 percent plunge in wholesale prices registered from March to April. A big part of the decline in wholesale prices for both months came from retreating energy prices, which had been stoked in previous months on war tensions. Prices for some other goods, including clothing and trucks, also went down. "There are many flavors of deflation," said Mark Zandi, chief economist at Economy.com. "A mild case can hurt businesses but usually isn't a problem for consumers. But in a severe case, ... everyone is going to get nailed."

The back-to-back declines in wholesale prices come in the aftermath of recent warnings by Fed Chairman Alan Greenspan and his colleagues about the possibility of the country facing deflation, which is a widespread and destabilizing fall in prices. Although Fed policy-makers say the chance of that happening is remote, the Fed still must be alert for deflation because of its potential to wreck the economy, they said. While the country experienced limited bouts of falling prices at the end of the 1940s and in the mid-1950s, the United States' last serious case of deflation was during the Great Depression. In a bad case of deflation, prices generally fall for goods, services, stocks and real estate, economists said. Businesses, watching incomes and profits shrivel, lay off workers and cut salaries of those who retain their jobs. Individuals and businesses find it harder to pay off debt. Bankruptcies rise. "The issue we're concerned about is not deflation in the sense of falling prices per se, but the issue of what I would call corrosive deflation," Greenspan said last week.

Black Blade: I still think another rate cut is in the offing and additional surges in money supply are imminent. "Interesting Times"

TownCrier

(06/16/2003; 15:26:38 MDT - Msg ID: 104669)

No relationship carved in stone

http://biz.yahoo.com/rf/030616/markets_precious_comex_2.htmlHEADLINE: COMEX gold ends higher, withstands euro pullback

NEW YORK, June 16 (Reuters) - COMEX gold recovered a second day Monday, losing momentum but keeping muscle tone after a rally in the euro fizzled just short of its recent peak on the dollar.

In fact, the dependable gold-euro relationship loosened a bit, with benchmark August ending up $2.50 ... as the currency retreated.

Spot gold was at $359.00 ... up from $356.70 at Friday's close.

"It's kind of on its own," said a chief dealer. "There seems to be a changing of hands."

...The euro was last quoted at $1.1841, down from $1.1868.

It touched $1.1931 overnight, its highest price since topping at $1.1932 on May 27, when gold rode its coattails to a 15-week high at $375.80. Because gold is priced in dollars, the stronger euro enhances the bullion buying power of European investors.

"At some point gold has to trade off its own fundamentals and stand by itself, rather than using the fate of the U.S. dollar as a constant crutch," wrote Societe Generale in New York's morning metals note.

----(see url for full article)-----

Because no financial relationship involving gold and another instrument is carved in stone, one would be better advised to own gold outright while it is still relatively inexpensive rather than trying to leverage profits against any so-called relationship. Markets are notorious for somehow sucking a majority in with an apparent "sure-fire opportunity" that is here today but then gone in a flash... with their cash.

R.

Dollar Bill

(06/16/2003; 18:55:47 MDT - Msg ID: 104670)

*.*...............$>/__

"This used to be among my prayers -- a piece of land not so very large, which would contain a garden, and near the house a spring of ever-flowing water, and beyond these a bit of wood."
-- Horace (65-8BC) --
That from MK's commentary page.
Perhaps Horace would add "a mine" to that list.

Gandalf the White

(06/16/2003; 19:14:46 MDT - Msg ID: 104671)

Townie -- Re: goldenpeace, Gandalf: On the Fed's $52 billion blunder

TownCrier (06/16/03; 14:49:28MT - usagold.com msg#: 104667)
--- the Fed did originally indicate $52.65 billion was done
BUT:
Because that amount happens to exactly match the total of all bids submitted for the ten-day tender, I think you can chalk this one up to simple human error inputting stats in the wrong field on the reporting page.
Questions? Comments?
Randy
===
SEE, that means that someone at the FED -- IS HUMAN !
Thanks Townie -- I knew that you would be able to solve the problem !
<;-)

mikal

(06/16/2003; 22:31:27 MDT - Msg ID: 104672)

Pushing on a string braids into a noose

http://www.etherzone.com/2003/sart061603.shtmlWALKING A TIGHTROPE AT FULL SPEED
THE ECONOMIC SHORT CIRCUIT By: SARTRE -Excerpt:
"Think you are walking on a treadmill that is accelerating in speed? Well, before long, you will need to master the skill of running on a tightrope, as the margins narrow and the cord tightens. Falling off the high wire, means plunging a long way onto a hard surface. If you survive the drop, it would be a miracle. At best, you might expect to be a cripple. Those prospects seem all too real for many Americans. Today, the economic future resembles the example of an emerging third world country, more than the dominate cradle of wealth creation. Primitive developing societies seems to be gaining energy, while our mature economy is losing steam. Is this a coincidence or are results just conforming to a well thought out plan?
Income can be derived from several sources. Most methods fall into defined categories.
1) Working for an employer for wages, salary, stock options and perks.
2) Engaging in a privately owned business that requires monetary risk and management responsibilities.
3) Promotion and entrepreneur endeavors, using other people's money, to acquire equity and compensation without personal investment.
4) Investment of accumulated capital with the expectation of earning sufficient rates of return.
5) Using borrowed or saved funds to gamble, win a lottery or simply pay bills.
6) Gaining a political position or a civil service occupation from the public sector.
7) Join a clergy that will supply your earthly needs.
8) Relying upon family resources, charity or social welfare programs.
9) Involvement in illegal activities of stealing, extortion or counterfeiting that takes or makes the money.
10) And the last and most successful means for acquiring, controlling and growing income - by directing and ruling economies - taking percentages of tribute in varied forms of interest, fees and manipulated markets.
We all are subject to some form or combination of the above. The timely and fundamental question becomes: Is your individual income situation improving or has your cash flow declined? Your answer may reflect at what stage you are within your earning years. However, as a society the current trend has the following dismal anticipation:
1) High paying jobs are vanishing as careers become far more uncertain and scarce.
2) Private businesses are hard pressed to sell at a profit or survive against corporate monopolies.
3) Returns from investments are minuscule as risks out strip rewards.
4) Inflation in basic and essential goods and service continues to rise.
5) The purchasing value of your money declines in worth.
This is a formula for a significantly reduced standard of living. The ordinary consumer is assaulted each time they attempt to provide for their family. When wealth shrinks the cost of survival extracts a much higher price. If bare essentials demand more sweat and guile, what are the prospects of most citizens keeping pace with a declining engine of affluence? Spiraling expenses for advanced education pushes most families to the wall or shackled with enormous debt. A common response is to remain single, childless and reduce expectations for a comfortable habitat.
Others take the opposite approach and continually demand from government that "free" services expand and become a 'right', while those still productive are sent the bill for payment. Deficit spending never disappeared, and is back with a vengeance. The continuous cycle of the tread wheel is not new, but its acceleration and the scarcity of alternatives has raised the stakes dramatically. Today, the future for the American economy looms uncertain, if not bleak.
The short circuit that has blown the economy, stems in a design flaw with the conversion from a free enterprise economy to a corporate/state redistribution system. Socialism in any and all forms is the tormentor and foe of entrepreneurial innovation. Wealth cannot be created by legislation. Capital cannot be earned without its access and availability to fund commerce. However, when macro economic policies are intended to restrict or eliminate the means to secure private financing through a system of public favoritism, the consumer is relegated to the inferno of usury credit card interest rates. The small businessman is edged out and often removed as a competitor. Only an apologist for elites will claim there is any sort of a level playing field.
NAFTA is a fine example of an organized transfer of riches and resources from productive domestic enterprises to foreign operations. The U.S. manufacturing trade deficit tells the tale. This is real money migrating from our economy, resulting in permanent lost jobs.� The disconnect that most people undergo from the facts of empirical economic reality, avoid the crucial and systemic problem. State/Capitalism is not Free Enterprise!
The distinct payoff for elites - that direct and control economies - comes from their ability to make rules that enrich their crowd, while extracting a constant and incessant levy on the public to pay for the right of living."

Gandalf the White

(06/16/2003; 23:51:19 MDT - Msg ID: 104673)

Sir GE --- Can you translate the items at that LINK ?

http://www.aksam.com.tr/arsiv/aksam/2003/06/10/yazarlar/yazarlar154.htmlge (06/16/03; 09:31:31MT - usagold.com msg#: 104660)
===
Sorry, but my Turkish is not as good as it used to be !
<;-)

Black Blade

(06/17/2003; 00:10:11 MDT - Msg ID: 104674)

Monkey See Monkey Do

http://quote.yahoo.com/m2?u
Asian markets are soaring tonight on the heels of the US stock market rally. No real reason really other than US markets did, so why not. Meanwhile gold marches higher as the dollar should remain weak with a FOMC rate cut in the offing and soaring US deficits with no end in sight and no possible solution either.

- Black Blade

Gandalf the White

(06/17/2003; 00:10:30 MDT - Msg ID: 104675)

WAY ta GO there SPOT and SPIKE ! TOGETHER now -- JUMP !!

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1$361.60 is a NEW HIGH for the last few days !!
That is a good level to start JUMPING AGAIN !
Take is slow and easy and rest along the way UP.
<;-)

slingshot

(06/17/2003; 00:39:40 MDT - Msg ID: 104676)

New Colored Money

Good Morning Forum,
Just read a commentary by Daan Joubert about Japan and the Carry Tax. He states that if this becomes fact in 2004 a new anti-counterfeit notes could come into circulation.Hoarders of cash will face the prospect of paying a tax to exchange their old notes for new ones or lose the full value of their mattress money.

If this is a trail balloon in Japan, will this be associated with the release of the new money ,here in the USA. I have not heard of this before. I agree this could
perpetrate a run to gold. Yet I can not help feeling some restrictions will be involved.

The cautions of Black Blade to put away some cash will have to be monitored for in this case devaluation may take its toll.

Slingshot-----------------<>

Black Blade

(06/17/2003; 00:56:22 MDT - Msg ID: 104677)

Re: Slingshot

The "cash carry tax" or cash with an expiration date as proposed by the Fed as one of the "exotic" methods to weaken the dollar would be extremely bullish for gold as people would not be able to save as the plan would be for people to spend to keep the economy afloat. Naturally people would migrate to hard assets such as precious metals to save in lieu of cash. It would also likely destroy "faith" in the US currency. It is an "interesting" concept though.

- Black Blade

slingshot

(06/17/2003; 01:03:10 MDT - Msg ID: 104678)

Black Blade

Something Evil comes this way.
Slingshot--------------<>

slingshot

(06/17/2003; 01:22:46 MDT - Msg ID: 104679)

Morning Fun

http://www.jabberwocky.com/carroll/jabber/jabberwocky.htmlEnjoy
Slingshot------<>

Topaz

(06/17/2003; 01:54:52 MDT - Msg ID: 104680)

Papergold...taking a walk on the wild side.

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9Acting as if it REALLY IS a force in this monetary world, Gold appears to be shaking off it's currency captors and embarking on an adventure of it's own. PaperGold to da moon...wee:-(
The taxing Cash idea is right on queue, Nothing threatens the System more at this juncture than a wholesale move to Cash... and the "Noise" is just that imo. When the move comes however, taxing Cash on account (as opposed to CiH) will only exaserbate an already acute shortage of the readies, driving a reappraisal of Au and Ag.

Belgian

(06/17/2003; 03:16:44 MDT - Msg ID: 104681)

The cash-carry tax ?

Sort of negative interest rate. This happened already in Switzerland. Wealthy (confetti-rich) people who desired to "shield" their confetti, went to Switzerland and had to pay 0,5%-1% for having their confetti deposited. Banks only wished talking to you (customer) when there was a minimum minimorum of 1 million � involved.

Japanese savers have an estimated stash, equivalent of 10-12 Trillion (T-!) dollars. This is an enormous amount of "savings". How does one fabricates a return on such a huge amount of concentrated savings, within a global economy that has a total GDP of 40 Trillion $ ? Is this japanese savings figure correct and in what form (currency) are those savings ?

I remain convinced that none of these savings can be forced into any kind of coerced consumption. The result will always be a capital flight as was the case in Switzerland.

It is funny that we don't have any figure on the globe's "total" cash savings. Or can "savings" not be defined properly ? Savings in what...Bonds = Debt paper,...cash = loans to the banks,...stocks = overvalued as to cover their debt to equity disaster,...real estate = overvalued against the debts it is carrying...???

Where do all these savings/investments have to find a real net positive return ?

Near Zero IRs over fiat depreciation = a de facto negative IR or return. How much confetti out there is simply shrinking ? Price declines do compensate in increased purchasing power for the confetti. But when your confetti is percepted as getting stronger (buying power)...so is the growing debtberg getting stronger and more impossible to service the rent on that debtberg ! But this disastrous side-effect remains completely ignored.

With nowhere to go for hiding with your confetti, it is of the utmost importance that Gold isn't giving any kind of signal. Having no fiat can be a problem, but having fiat and NOT finding a heaven for it is almost as bad as the former.

Where is the breaking point, where something is going to crack ? Can global intervention-containment continue and consolidate the whole situation for a much longer period ?
Kind of an hibernation period ? Immobilising undercooling ?
Muddling on and sinking deeper into shifting sands ?
Resulting in more and massive confetti creation as a desperate oxygenator. This looks a very grim picture to me and don't see any lightpoint for a sprankle of cautious optimism !

One gets the perception that the whole globe is on a regime of *price-stability* ! But can the growing debtberg remain stabilized in such a percepted price-balance ? These debts aren't inflated away or lightened. On the contrary, debts are weighting heavier and heavier on a situation of perceived balance. Why was O'Neil fired after he ordered the study on debt that projected the figure of 44 Trillion $ ?

Soon, very little will remain that can be taxed. Tax the confetti that you print and bring into circulation to be carried from A to B and backwards from B to A.

I feel more and more, comfortable, with the yellow in hand...and you ?

misetich

(06/17/2003; 04:28:05 MDT - Msg ID: 104682)

US housing mart at risk if recovery falters-report

http://www.reuters.com/financeNewsArticle.jhtml;jsessionid=EP401E4CVRUDYCRBAELCFEY?type=bondsNews&storyID=2938709Snip:

The housing sector is the one prop supporting an economy struggling to recover for over two years as geopolitical tension as increased and the 1990s investment bubble has burst. Analysts are watching the sector carefully for signs of weakness.
..............
But home prices have risen quickly over the last few years, forcing many consumers to spend a higher percentage of their income on housing and leaving them even more vulnerable to foreclosures if they are laid off.

If layoffs do increase, some neighborhoods could face instability and price declines from the resulting glut of homes put up for sale, the report said.
...............
But even if housing prices do not fall dramatically in the long term, housing is increasingly unaffordable, the report said. Home prices and rents have grown faster than inflation since 1975, while while incomes for the bottom 40 percent of households have held more or less steady, the report said.

Thirty-six percent of households struggling with affordability are minority households, the report said.

Affordability problems increasingly affect middle-class households. Seventy-six percent of households that do not live in affordable housing are well above the poverty level, the report said. A household faces an affordability problem if it spends more than 50 percent of monthly pretax income on housing, according to the report.
***********
Misetich

Is housing the proverbial " next shoe to drop"?...tic..toc. tic. toc..

All On Board The Gold Bull Express

Gondolin

(06/17/2003; 04:32:21 MDT - Msg ID: 104683)

(No Subject)

Latest from the Mogambo Guru on the Daily Reckoning, articulating himself as always in an entertaining manner...

-snip-

I finally have an exact quote from Alan Greenspan as to
what in the heck he thinks this deflation thing is; this
horrible bugbear that is clogging up his mind so much that
he cannot even think clearly.

Here it is: "Corrosive deflation, that is a deflation that
essentially feeds on itself, creates falling asset prices,
which in turn bring down levels of economic activity
through the wealth effect, contracting profit margins and a
type of weakness which we all at least theoretically
conclude is far more of a concern than inflation."

Right. This apparently means, as Greenspan has said, he
cannot see a bubble, either as it is forming or after it
has formed, and therefore does not fear a bubble in
anything, but that as soon as that bubble-that-cannot-be-
seen starts to deflate and bring down those overvalued
asset prices to some semblance of normal value, THAT is the
exact moment that he finally decides to spring into action
and do something about the bubble-that-previously-could-
not-be-seen-but-is-now-seen. Namely, keep it inflated!

who in the dangity-dang-dog, ding-dong hell IS this 'we'
that has the guts to stand up and say, in front of people
who know better, that they '...at least theoretically
conclude (that deflation) is far more of a concern than
inflation'"?

There may be a "we" that would agree on such a thing, but I
sure ain't in that group. And given the historical record
of economists and their ideas, I am not sure that saying
that some "supermajority-we" of modern economists has
agreed on something can be anything other than alarming.

So who are these "we," anyway?

I need names here! I want to know the exact names of the
people who think that falling prices are a danger, when
they have never said that rising prices were a danger! I
want to see actual names, addresses and Social Security
numbers, and colour photographs would be a nice touch too,
of the morons who think that prices of things coming down,
and thus making them more affordable to more people, after
they have risen so much for so long, is something worse
than the inflation which drove prices too high to start
with!

-end snip-

When you put things in plain English they're so much easier to understand. But obviously understanding of the issues by the general public is not really what AG is looking for.

Topaz

(06/17/2003; 05:33:32 MDT - Msg ID: 104684)

@ Gondolin...Mogambo's dilemma.

It was announced today sections of the Aussie Coal industry are being forced to curtail activities due to the deflationary effect of the stronger A$. A small example of whats ahead as "prices" in US$ (or in this case Yen) when converted to the Exporters currency are deflating....Coal hedging is usually only a 12Mth thing, and time is up!
This effect can be extrapolated right across the board and will effectively decimate + International Trade. The other (main) consern is the Futures arena (when Cash leads ANY futures arrangement) ie: Systemic Nightmare.
Your Dollar HAD to devalue vis the Index (with $ denominated supply/demand fairly static) to export your own deflation, but the point is now reached where further erosion isn't possible imo. The one shining light these past 18Mth's has been R/E...but we now see cracks appearing here too...Not a pretty contemplation.

THX-1138

(06/17/2003; 05:42:08 MDT - Msg ID: 104685)

LOTR makes another mint at the bank

http://www.stuff.co.nz/stuff/0,2106,2540137a11,00.htmlI can't believe nobody hasn't posted this yet. :)
------------------------------------------------

A set of coins featuring designs from The Lord of the Rings films will become legal tender this year.

The currency has been commissioned by New Zealand Post to coincide with the release of the final part of Peter Jackson's movie trilogy, The Return of the King, in December.

Officials are deciding which famous characters from the big screen version of JRR Tolkien's novels will appear on the coins but hope to finalise plans in July.

The coins will come in denominations from 50c up to $10 and are being made from gold, silver and cupro-nickel by the British Royal Mint.

A release date for the coins, which will be available individually and in presentation packs, has not been set.

New Zealand Post officials said the launch was likely to closely follow the issue of a third set of The Lord of the Rings stamps on October 1.

mikal

(06/17/2003; 07:17:34 MDT - Msg ID: 104686)

America's predicament of ongoing global backlash demands a new role and new internal focus

http://www.cbc.ca/news/america/CBC News- Indepth: What the World thinks of America
"new American Empire"

Albatros

(06/17/2003; 07:59:42 MDT - Msg ID: 104687)

POG in AUD

Greetings Goldbugs. Have been puzzling over x-rates.com various currency values and trying to work out what's going on with the USD going "down" and gold going "up" etc. I'm an Aussie & the AUD has been rising against the USD in almost precise inverse harmony with the fall of the USD against the Euro. The UKP has been falling against the Euro, almost mirroring the fall of the USD against the Euro. The AUD has been fairly steady against the Euro, which effectively erodes the gains made with increases in the POG caused by the "falling" price of the USD. The siliarities in the graphs are interesting. I would like to view a historical graph of the POG against the Euro. Does anyone know where to find one? I'm suspecting that the POG must be keeping relatively stable against the Euro. Can anyone explain what's going on? Does the Euro "Rule"?!!

Socrates964

(06/17/2003; 08:15:57 MDT - Msg ID: 104688)

Gondolin

Actually, on this one, I think that Mogambo protests too much, and that Sir Alan the Obscure is actually being uncommonly candid. The We is everyone who is in debt (i.e. most of the US), since, to paraphrase Love Story, 'Inflation means never having to say Sorry I can't pay you back'.

If your masters are politicians and the debtors have far more votes than the creditors (e.g. foreigners), where do your loyalties lie? Seems like a no-brainer to me.

Socrates964

(06/17/2003; 08:43:19 MDT - Msg ID: 104689)

Albatros

Can't find you a link, unfortunately, but my take on the Euro is that:

1. It has broken a key resistance around 1.14 and is now heading towards 1.29. The driving force behind this is simply holders of large quantities of dollars wanting to diversify away from what is now seen as a currency with severe structural weaknesses - hence Jim Sinclair's point that such parties (mainly Asian central banks, IMHO) are so keen to get out of dollars, that the great double act in which US bond and stock markets levitate at the same time, is having little effect on demand for dollars. The rest of the world just doesn't want to play with Uncle Sam.

Unless you believe that US bond/stock markets will carry on rising (those who believe in this remind me increasingly of the Monty Python sketch about buildings put up by hypnosis which stay up for as long as you believe in them), then sooner or later these unravel, and if the dollar doesn't rise when its capital markets are going up, then presumably it goes down when they start going down. Besides, Easy Al has been goosing markets for nearly 3 years - to what effect? As I previously mentioned, I have early July pencillled into my diary as a good time for a short on the Dow.

As for Euro/gold - gold looks like a show me story, since it has not yet made a definitive break out into a primary bull market (which it does by a definitive penetration of $380), while the Euro is red-hot. Also, the buyers are smart enough to know that only physical gold is worth buying. Hence, until gold can earn its spurs, it looks set to languish in the lower half of a E300-340 range.

I nevertheless think that Euroinvestors regard E300 as screaming buy territory. Hence I regard this as a rock solid floor, although until gold makes its real move, why push the price when you can't get your hands on the metal?

Once the Euro hits 1.29, the ECB will probably start massaging it to stop Euroland's BoP from going too far into the red. The move up there will probably be sufficient to break gold through $380, and hey presto, gold will start to appreciate in Euros. All that is required is patience.

Btw, note that sterling has started to strengthen again. I suspect that the BoE is operating a discreet peg (or crawling peg) to the Euro.

Gondolin

(06/17/2003; 09:33:23 MDT - Msg ID: 104690)

Topaz, Socrates

Thanks for your comments. Still new to many of the concepts discussed here, and try to look at them all from every angle. AG is caught between a rock and a hard place it seems. So when deflation will decimate the US economy and international trade and (hyper)inflation will destroy the US dollar/ economy and also decimate international trade, what option does this leave?

Is this where the stagnation and stagflation phrases come from - keeping a handle on the descent of the dollar, now that the policy (or necessity) appears to be allowing/managing dollar value to slowly re-adjust downwards? Or is this just bandying words around so as not to use words like deflation and hyper inflation that will alarm holders of US dollar assets?

Changing topics slightly, reading the Archives and Another/FOA has given me a great deal more insight into matters, but pose even more questions. Reading Miner49 in the Hall of Fame he has indicated that following the slow transition to the euro it may be possible to hyperinflate all foreign held US debt out of existence, inferring that all the foreign debt will just disappear, and not 'come home to roost'.Is this possible? Or have I read this wrong?

USAGOLD / Centennial Precious Metals, Inc.

(06/17/2003; 09:52:09 MDT - Msg ID: 104691)

Featuring BULLION to help you build your portfolio's base

http://www.usagold.com/gold/special/current.html

TownCrier

(06/17/2003; 10:40:42 MDT - Msg ID: 104692)

Albatros - POG chart in euro, dollars, yen, and Swiss francs

http://www.usagold.com/wgc.htmlThe uppermost chart on this page (see url) will give you a look at the prices on a relative basis during the past year and a half.

R.

Socrates964

(06/17/2003; 10:40:54 MDT - Msg ID: 104693)

Topaz

"he has indicated that following the slow transition to the euro it may be possible to hyperinflate all foreign held US debt out of existence, inferring that all the foreign debt will just disappear, and not 'come home to roost'.Is this possible? Or have I read this wrong?"

It is possible, but unlikely. Consider the average 3rd world country that gets into trouble - usually its domestic currency debt is largely held by domestic investors who are a kind of captive audience, hence they can be coerced into holding onto their bonds and absorbing capital losses through inflation (since the alternative is higher taxes).

For international debt issued in another currency, usually the economy in question runs out of foreign reserves and has to default or sit down with creditors and restructure, with creditors getting so many cents per dollar of face value.

The US is a special case, since its domestic currency is the world's reserve currency, so the outcome is likely to be closer to the first scenario than the second.

It is thus likely to use all its powers of coercion/persuasion to get its external creditors to hold onto their bonds, so that it can pull the inflation trick on them - to which they may respond by pulling the rival trick of devaluing their own currencies even faster than the dollar (basically what Japan appears to be trying to do, and failing miserably at it).

Let's assume that the external creditors refuse to fall for a slow comfortable inflationary screwing (as the French refused at the end of the 1960s, exerting their right to change greenbacks into gold) - the US can then threaten to default or it can impose exchange controls so that, yes, you can sell your bonds, but have to keep your money in the US, in dollars, which is just as bad. What do external creditors do then - the best option is to buy US stocks, as they are likely to withstand inflation best - but will central banks actually do this? Who knows?

There is no single answer to your question, since it comes down to what kind of deal creditors and debtors cut with each other.

Your guess as to what is likely to happen, is thus as good as mine. FWIW, let's assume that the default event happened under the Bush administration - I would expect the US to take a 'F*** You!' stance and default on its external obligations, as it did in 1971. Would they write down their debt? Probably. Would international confidence in the dollar as a store of value be immediately destroyed? - Probably. Note however, that this doesn't mean the end of the dollar, because it is still likely to be accepted as a means of payment, even if no-one wants to hold it, simply because there are already too many greenbacks out there and because I can't see the Brazils/Russias/Canadas of this world prepared to go head to head with the US and say, sorry guys, those soybeans/that oil etc. that you ordered has to be paid for upfront in euros. Everyone will thus take dollars and immediately try and get rid of them through the back door. This points to hyperinflation in the US driven by rises in the dollar prices of primary commodities. What I'm not sure about is whether you get a credit crunch in those economies that were caught long of dollars and have to take a huge write-down on their foreign reserves (e.g. Asian economies). As suggested, I suspect that they try and offset this with competitive devaluations.

Albatros

(06/17/2003; 12:02:16 MDT - Msg ID: 104694)

Socrates964 & TownCrier

Thankyou both for replying. Has helped. Noticed POG spiked after I posted my query. What did I say ???????

R Powell

(06/17/2003; 13:38:43 MDT - Msg ID: 104695)

Albatros

Your words...

"Thankyou both for replying. Has helped. Noticed POG spiked after I posted my query. What did I say ???????"

I'm not sure which word or words did the trick but I'll ask you to please continue and perhaps speak with a bit more volume so you can also be heard by the boys (and girls) in the silver pit. Thanks,
Rich

Belgian

(06/17/2003; 14:40:35 MDT - Msg ID: 104696)

@ Albatros

http://www.sharelynx.net/Markets/Charts/Goldcurrency3.htmGold in ecu-euro since 1998. A nice "dome" pattern. Roof must be pierced !
A 20 yrs euro converted chart can be found at http://www.gold-eagle.com/editorials_03/images/verbeeck040403EuroGoldLT.gif
This is a jewel ! A 20 yrs chart with the most explosive characteristic pattern that one could dream of. Forgive me my unbridled enthousiasm.

(06/17/2003; 15:13:35 MDT - Msg ID: 104697)

Sir Gandalf

About http://www.aksam.com.tr/arsiv/aksam/2003/06/10/yazarlar/yazarlar154.html

Basically the journalist says that Council of Foreign Relations made a meeting at Turkey, and such a thing had never happened before. She asks, why now and who invited them. The timing, she maintains is related with the US design of a new Middle East map. Those who cannot understand this timing, she says, will understand it as the US operation targeting Iran, Azerbeycan and Middle East starts.

She had contacted with various sources, to obtain information about these meetings. Some had said that, the meetings were surrounded with secrecy. However, one of the behind-the-curtain figures of the ruling Justice and Democracy Party appears to have talked very freely on this subject. He says that instead of talking to US politicians who are here now, and may not be here later (alluding to the re-election difficulty of Bush), they have decided to talk to the real power brokers of the US. He rates CFR to be within the top 5 of the world, and says that are one of the permanent decision makers.

After informing the reader that, another news agency had also made a news of this meeting, and quoting the agency news, she then starts to give some information about CFR, the Politburo of Secret World Government� Famous members� Committee of 10, 40 etc, circles within circles�.Decides about wars and finacial operations�

------not an exact translation, but I tried to be true to the meaning---

a nation of one

(06/17/2003; 15:59:24 MDT - Msg ID: 104698)

dow

Does anyone know what is happening that is causing the DOW
to keep going up? There does not seem to be any real reason for it. What seems to make the most sense?

R Powell

(06/17/2003; 16:59:00 MDT - Msg ID: 104699)

A nation of one

How about Irrational Exuberance. If the money supply is increasing, then something somewhere is being targeted for investment. Real estate and bonds are already up so I guess stock equities are becoming fashionable again. I don't believe commodities have seen too much of this new currency liquidity yet but I haven't given up hope yet. Are you still holding gold futures?
Rich

21mabry

(06/17/2003; 17:08:19 MDT - Msg ID: 104700)

(No Subject)

The fed has increased money supply, interest rates are going lower,Bush knows the only way he will be relected is with a rising stock market he will do everything in his power to pump up the market.All the general investment public knows is equity and bonds thats were the money will go until there is a seminal event that shifts thinking.21

Goldendome

(06/17/2003; 17:09:20 MDT - Msg ID: 104701)

R Powel

Looks like the rising tide (of liquidity) is lifting everyone's boat, no matter the sector. ----Gdome

21mabry

(06/17/2003; 18:27:25 MDT - Msg ID: 104702)

Gdome

Hello Gdome alas the ducks came up short in their quest for Lord Stanleys silver cup. 21

Goldendome

(06/17/2003; 18:43:05 MDT - Msg ID: 104703)

Porter Stansberry article

http://www.dailyreckoning.com/pfriendly.cfm?id=3232&x=hSnips:

America is bankrupt.

Huge numbers like $44.2 trillion don't mean much to anyone without a comparison. So, consider: Uncle Sam's "financial imbalance" is 10 times the size of our current national debt.

In order to achieve current solvency, the government would have to raise payroll taxes by 68.5%, beginning today. Alternatively, the government could cut Social Security and non-Medicare outlays by 54.8% immediately and forever. (How do you think either policy would go over at the polls?) Most likely, nothing will happen. And so, the government's insolvency will grow much larger. By 2008, it will reach $54 trillion. To reach solvency at that point, taxes would have to increase by 73.7%.
_______________________

Comment: It's doubtful taxes would be raised in a manner to cover any of these defecits. When you're the the U.S. Government and you run the Ponzi scheme(Worldwide) and the fiat money scheme, it will become much easier to pay off future Payees by just creating inflationary dollars, than by trying to force higher contributions through increased taxes. Right now things seem benign enough, as everyone in this country and around the world has so much invested in the dollar payoff that it's, "One more turn of the wheel... just gimme one more turn." Sometime in the next ten years...some groups "effective attitude" is going to change--then watch out. "Argentina here we come."

------Gdome

Goldendome

(06/17/2003; 18:50:01 MDT - Msg ID: 104704)

(No Subject)

Hello, mabry. Yes, too bad, but it was an exciting series. Cann't remember when there was such a home and home series in any sport. Maybe you can refresh me on that.---Gdome.

Druid

(06/17/2003; 19:02:43 MDT - Msg ID: 104705)

44 Trillion

I can't even conceive of this large a number. Neither can most people, they, by in-large, parrot these numbers like there is real meaning behind them. Convert this number to miles and how far in the universe would it take you starting from earth and going anywhere? Given our fastest aircraft, how many years would it take to travel this distance? These are just menial questions one might actually consider when spewing these numbers around. Like a good friend of mine(who was working on his PhD. in neaural networks) once said when confronted with these sets of numbers, "pick a number, any number, because there is no real meaning behind them." People have difficulty with gold in the thousands, really!

(06/17/2003; 19:20:13 MDT - Msg ID: 104706)

All.. . .

Wanted to let you know that I've been immersed in News & Views for the past week and devoting all my energy to that. I'll begin to add and rebuild on the Commentary and Review page tomorrow morning, God willing.

I am very impressed with the gold rally today and have to say that somebody is supporting this market though I can't decipher if it's paper or reality based. My guess is that we either have a hedge fund on the spec or another mining company covering. Let's face it: It doesn't play well with stock investors these days to be a hedger, so I wouldn't be surprised to find out that someone big is on a covering binge and putting a floor under this market. Those mining companies that haven't gotten the message by now probably aren't going to get it. The move in Newmont shares is indicative of a substantial trend -- not so subterranean, if you know where I'm going with this.

On the reality front, it keeps cropping up in my thinking that hard metal is going to have to be found at some point to repay the central banks and, as the price goes higher those creditors can only be registering bigger numbers on the fright meter. And these acquisitions will be in an environment where mine production is falling, central banks are curbing their sales, and other central banks are looking for metal wherever they can contract it. Unlike the late 1960's through mid-1970s when the US and the IMF stepped to the plate, there is not enough supply coming from the official sector to sop-up the trillions of dollars hot-wiring around the globe. It will have to come from the ground and investor holdings. Fat chance they'll see anything worth getting excited about.

What's more, believe it or not, we haven't even seen 30% of the covering I think we are going to see -- even now!! And then you got the Welteke divisions in Europe in full retreat as the dollar nightmare moves into Phase Two.

The stock market? Where's the value, my friends? This is an inflation rally, and you do not need to use consumer price index readings to ascertain its extent. Foreign money will not follow....will not sustain!!

Anyway, more tomorrow. Don't let the price go over $400 before you realize that something is going on here beyond what the mainstream press is letting on.........MK

Stranger.........great to see you back. Hope you have more to post. Appreciate, as always, your esteemed presence at this Table. Much that you and I and many others have worked for over several years period of time is working toward fruition. Without even talking to you, I know that you are getting the same vibes I am in that respect. In fact, it's palpable.

My best........Onward, my fellow goldmeisters.

misetich

(06/17/2003; 19:59:39 MDT - Msg ID: 104707)

Money funds scraping bottom

http://seattletimes.nwsource.com/html/businesstechnology/134997757_pflowyields15.htmlSnip:

But the prospect of additional cuts is stirring concern in the money-market fund business.

Taxable money-market yields average 0.70 percent after expenses are subtracted from portfolio earnings.

If the Fed reduces the federal-funds rate when it meets June 24-25, as some analysts think it will, money-fund yields could fall close to zero or lower for some funds.

That could create turmoil for financial-services companies with the highest expense charges, since they will have to cut costs to pay their bills without dipping into principal.
...........
A quarter-point rate cut, for example, would knock average money-market yields down to 0.45 percent, putting 142 funds in danger of posting negative returns if they don't cut fees. Still, those funds would represent only 2.1 percent of total money-market assets, according to money-fund tracker iMoneyNet.
**********

Misetich

Going from bad to worse

All On Board The Gold Bull Express

Cytek

(06/17/2003; 20:40:36 MDT - Msg ID: 104708)

@ BlackBlade -- RE: Natural Gas Reserves

BlackBlade: I know your up on NG. Any idea about the Natural Gas reserves and how bad the shortage is. Also, is there a weekly or monthly report on the reserves and where can i find it.

Thanks
Cytek

Black Blade

(06/17/2003; 21:16:25 MDT - Msg ID: 104709)

Re; Cytek - Weekly Natural Gas Storage Report

http://tonto.eia.doe.gov/oog/info/ngs/ngs.html
The link above can be accessed for weekly injection and storage data that comes available every Thursday morning at 8:30 am (est). Storage injection has been very high due to the deepening economic recession, mild temperatres, and minor fuel switching. The biggest culprit appears to be stripping of pipelines that tend to be used as additional storage during spring and summer months during rebuild, however, with the high NG prices now storage operators are scrambling to buy whatever is available rather than higher future prices. This will continue for at least a couple of more weeks until that supply has been taken and summer temperatures rise. Wall Street apparently thinks that there has been an increase in production and prices have come down slightly. This time around it is supply driven rather than demand driven. It should get "interesting".

- Black Blade

Black Blade

(06/17/2003; 21:22:34 MDT - Msg ID: 104710)

Canada Cannot Solve Our Natural Gas Problem

http://www.energypulse.net/centers/article/article_display.cfm?a_id=365
Snippit:

In recent weeks, the emerging natural gas (NG) supply problem in the United States has been well documented by a steady stream of commentators including Andrew Weissman of Energy Ventures, Ellen Hannan at Bear Stearns and, perhaps most convincingly, Matt Simmons at Simmons International. These analysts have noted several crucial issues: (1) U.S. NG inventories are at some of the lowest levels in over a decade with only 990 bcf in storage compared to 1775 bcf last year and a five year average of 1,520 bcfpd. (2) U.S. NG production has steadily declined in recent years from 52.1 bcfpd in 1998 to 48 bcfpd in 2003 and is projected to drop to 44.3 bcfpd by 2007. (3) Despite this erosion of production, the United States has installed upwards of 220,000 MW of NG fired electric generation capacity in the last several years and continues to add more almost weekly. In just the last month alone, for example, Mirant began commercial operation of its 533 MW NG plant near Las Vegas and Tampa Electric began operation of its 750 MW Bayside 1 NG unit while announcing Bayside 2 (1,000 MW) will begin operation in January. The Bayside facilities replace the retiring Gannon coal plant � thus, a net increase of NG usage.

Black Blade: Good comments by Andy Weissman at the end of the article.

Black Blade

(06/17/2003; 21:38:17 MDT - Msg ID: 104711)

Coming Natural Gas Crisis - Another View

http://www.energypulse.net/centers/article/article_display.cfm?a_id=367
Snippit:

I read the press release about Secretary Abraham's speech to the National Petroleum Council with great interest. It seems that we are doomed to re-live the 1970's. Let's learn from history and do a better job this time. As those who were old enough to watch the energy industry back then will remember, in the early 1950s the U.S. Supreme Court originally imposed Federal regulation over the price of natural gas sold into the interstate markets. Fast forward to the 1970's when oil prices spiked as a result of what was called the "Arab" oil embargo in 1973. The power industry, faced with huge increases in fuel oil costs, began switching to "cheap" natural gas. Industry, meanwhile, had limited incentive to drill and develop new gas supplies, at least for gas that would be sold to interstate pipelines at low regulated prices.

Then came the winter of 1977-78, when we saw curtailments of gas deliveries to schools and hospitals in some parts of the country�but not inside states where gas prices had been deregulated. The response to that crisis was to impose a complex and expensive set of regulations designed to provide incentives to develop and produce new gas (but not allow producers to receive deregulated prices for "old" gas) and to restrict the use of gas as a fuel in power generation. The regulations spawned their own cottage industry of auditors, administrators, and accountants, further driving up the cost of finding, developing, and marketing gas reserves, but also spawned (together with extremely high oil prices) the largest drilling boom the U.S. has ever seen. We also saw interesting developments in the power industry, such as the coal-fired power plant that sits in the middle of a gas field in Northern Oklahoma.

And here we are again - back in 1978. We've had a cold winter in the region that consumes the most gas during heating season. Unrest in the Middle East is back in the headlines. And, once again, we're "running out of gas." However, the political will to pass comprehensive energy legislation that existed after the "crisis" of 2000-2001 disappeared when prices fell in 2002. Apparently we only respond to crises, and typically the responses involve more, not less, government intervention in the marketplace. But the FERC still has not completed its review of, and response to, the situation in California that happened 2 years ago. How can it react to and plan for this winter? Somehow the gas industry has managed to keep the heat going for the past many years. It will most likely take service curtailments and facility closures to demonstrate how serious the problem is and how much it costs us in terms of jobs and economic growth - and if it does occur, right before an election year, energy will regain its place as the Number 1 topic in Washington.

Black Blade: And so it goes. As George Santayana said: "Those who do not remember the past are doomed to repeat it".

Pizz

(06/17/2003; 21:44:19 MDT - Msg ID: 104712)

A little justice?

Been just a bit busy the last couple months trying to turn around a dealership that was represented to me as the equivalent of having a cold, when in reality it's more the equivalent of SARS.

Had a senior staff meeting last week with our "sales executives" requesting recomendations for cutting company expenses 20%. Sales and gross profits are down just a bit. Friday I got the recommendations back, and nearly to a tee, they all agreed we should eliminate (decimate)headcount in our five support departments. President of the company was impressed and asked me to think on it over the weekend.

I did, and Monday I cut sales management compensation 20% and fired the two top sales "executives". President is in a state of shock and company moral is up about 100%.

If a few hundred thousand overpaid corporate executives around this country got the same treatment from their boards, and if we could blow out the FED and most of the upper end of governments, we might have a chance pulling out of this mess, but. . .

I think we still should keep buying the yellow stuff.

Pizz

P.S. . .find a copy of the old disco song "Last Dance" by Donna Summers and imagine it as the closing song to Kudlow and Cramer. . . .LMAO listening to it while they were on the tube.

Kilo

(06/17/2003; 21:49:44 MDT - Msg ID: 104713)

Druid - 44 Trillion in perspective

To travel 44 trillion miles, even at the speed of light (~186,000 miles PER SECOND) would take over seven and a half days......

or 1,766,958,281.7 times around the circumference of the earth.......

or a stack of freshly printed one dollar bills measuring 2,980,448 and 1/4 miles, or 12 separate stacks of dollar bills reaching from the earth to the moon, with "change" enough for another stack reaching half way again to the moon.

Needless to say...... A BIG NUMBER !

Black Blade

(06/17/2003; 21:50:15 MDT - Msg ID: 104714)

Market Wrap Up � Hartman

http://www.financialsense.com/Market/wrapup.htm
Snippit:

Sector Winners

The biggest sector winner for the day was precious metals with the XAU Gold & Silver Index adding 2.87 to close at 82.24, a gain of 3.6%. The continued policy of monetary easing by the Federal Reserve and fiscal stimulus from the government has created an environment for unprecedented inflation. The fundamentals for the precious metals sector couldn't get much better. As governments around the world work feverishly to increase the supply of paper money to re-inflate the global economy, they are devaluing the money itself. As money loses value globally, it will require more paper currency to buy the same amount of physical goods.

Global currency devaluations are just now beginning to add value to the precious metals sector. This will really be a fun group to watch as retail investors begin to see the light. The market caps of the precious metals mining companies are so small that even a partial interest from the general public will send the mining companies to the moon! Once things get going, it should be a rocket shot! Just look at the chart for Newmont Mining. The blast-off in 1978 and in 1987 for Newmont came with tremendous stress on the financial system as we have today. Both of the big run-ups saw the stock price increase to the tune of 500%. Now wouldn't that be nice! It's impossible to know the exact timing of the blast-off, but it's not far away! Patience, patience, and more patience. It will be well worth the wait!

Black Blade: Some here may remember that I talked of this possibility resulting from the global "Currency War" as major trading blocks work to debase their currencies for a competitive edge in an ever shrinking global economic pie. Add to this the rise of inflation over nominal short-term interest rates leading to negative short-term "real" rates making precious metals desirable with virtually no opportunity cost (with yet another rate cut coming next week). Wall Street bankers and brokers will soon be singing the tune "Welcome To My Nightmare".

Black Blade

(06/17/2003; 22:04:20 MDT - Msg ID: 104716)

Jury: Lehman Bros. Helped Cheat Borrowers

http://biz.yahoo.com/ap/030617/lehman_liability_2.html
Federal Jurors Say Investment Bank Lehman Bros. Helped First Alliance Cheat Borrowers

Snippit:

SANTA ANA, Calif. (AP) -- Federal jurors found that investment bank Lehman Bros. Holdings Inc. aided and abetted mortgage company First Alliance Corp. in a fraud scheme, awarding $51 million in damages to about 4,500 borrowers. The U.S. District Court jury on Monday assessed 85 percent of the damage award to Irvine-based First Alliance and its executives, and 10 percent to Lehman Bros. Jurors also apportioned 5 percent of the damages to MBIA Insurance, which insured First Alliance's mortgage securities. But because MBIA was not a defendant, it will not pay.

Black Blade: Speaking of scammers, the name Arthur Andersen keeps coming up. Three Dynegy execs were busted this week in a fraud scheme and their auditor was none other than the "master of disaster" Arthur Andersen. Oh yeah, Tyco now will restate earnings back to 1998, and Fannie Maes problems seem to just get bigger. Of course Arthur Andersen figures with these companies as well. Every company that use AA had better recheck their books.

Cytek

(06/17/2003; 22:10:36 MDT - Msg ID: 104717)

@BlackBlade

Thanks BlackBlade good stuff.

Gandalf the White

(06/17/2003; 22:14:34 MDT - Msg ID: 104718)

Way ta GO, Sir Pizz --- THAT story is GOLDEN !!! <;-)

"President of the company asked me to think on it over the weekend. I did, and Monday I cut sales management compensation 20% and fired the two top sales "executives". President is in a state of shock and company moral is up about 100%."
===
Sir Pizz --- The Hobbits LOVE IT !! No one saw you when you came riding into Town ! NOW, everyone knows that there is a NEW SHERIFF in Dodge.
<;-)

Black Blade

(06/17/2003; 22:29:43 MDT - Msg ID: 104719)

INFLATION? DEFLATION? EVEN THE JOURNAL'S CONFUSED

http://www.nypost.com/business/1081.htm
Snippit:

Here's what one Journal story recently had to say about inflation: "Even Pat Jackman, economist at the Bureau of Labor Statistics, which calculates the official inflation rate, says the widely reported numbers understate the rising cost of life from one year to the next. The fact is, he says, 'more money is coming out of your pocket.' "

I've been crusading against the way the government reports its inflation numbers for a long time. This isn't just about some statisticians messing around with digits to distort the truth. This is about Washington cheating people out of money - Social Security recipients, retirees whose annual increases are tied to the inflation rate, people who invest in bonds. Lots of people. And lots of money. People are getting screwed. And, back when I was in school learning this miserable trade, that's what we were told to ferret out. Let me explain something else. Jackman isn't just one of the thousands of economists in our government bureaucracy. He is the senior economist in charge of the consumer price index. He is the man. And he's a guy I've spoken with in the past - but never when he was as forthcoming as he apparently was with the Journal. And the man says - according to the Journal's own words - that the "widely reported numbers understate the rising cost of life from one year to the next."

But "not much" inflation doesn't mean deflation, does it? And if Jackman is right, the "not much" being reported by the government is probably not true. As I've said before, if you take out all the tricks that Jackman was referring to, the rate of inflation is probably around 5 percent a year. That's certainly not deflation. What tricks?

The government uses a statistical technique call "geometric weighting" so it can keep inflation down. The theory behind this is that people will switch to cheaper products - like hamburger - if steak gets too expensive, so the price increases are offset.

Then there are quality adjustments. If a new feature like mandated pollution equipment is added to a car, then a price increase can be ignored even if the customer has no choice but to pay for the upgrade. You pay more, but inflation goes down.

And there's the famous "intervention analysis" technique. If something like gasoline goes up more than the government's computers expect, then the increase can be reduced. "Smoothed out" is the euphemism the economists use.

Black Blade: Not only is there "hedonic deflators" as described above, but there are other statistical filters used to "screw" Americans. There is the usual "seasonality" for example, but my favorite is still "imputed income". For example you own your own home but if you had to rent the place that "imputed" rent goes right into your pocket and bingo! � your income just magically increased. What I love about government statisticians is the innovative ways they can abuse data to steal from the people. Think on that when you see a little old lady pinching pennies at the supermarket to buy cat food for her next meal while trying in desperation to make her Social Security check stretch out to the end of the month. Better yet, think of that when you see our rulers in tuxedos swilling Dom Perignon and gobbling up Beluga Caviar at $10,000 a plate fund raising dinners. What was that slogan in the book "Animal Farm"? Oh yeah, "All animals are born equal, except some are born more equal than others". The difference is we elect our animals.

Gandalf the White

(06/17/2003; 22:49:45 MDT - Msg ID: 104720)

ATTN: Sir Rich --- Did you notice that the UP leg started TODAY ! <;-)

http://stockcharts.com/def/servlet/SC.pnf?chart=$GOLD,PNow just hold on tightly for the GOLDEN ride !
Jump SPOT, JUMP !!
<;-)

Topaz

(06/17/2003; 23:30:24 MDT - Msg ID: 104721)

Gondolin, anoo.

Gondolin:
Imho, Deflation and Hyperinflation are manifestations of the same thing...related to a lack of confidence in the future(s). Otoh INflation is a Horse of another colour related to over-confidence.
anoo:
The current SM rally it would seem is a futures driven phenomenon being supported in the physical market by Mutual and Index fund Managers etal who, as Q2 reporting nears, are scared witless their Portfolios will underperform if they stay out. Mums and Dads are staying away in droves.

steady

(06/17/2003; 23:38:34 MDT - Msg ID: 104722)

smarter people buy gold!

We work for paper, but the smart people run the presses.

21mabry

(06/17/2003; 23:44:12 MDT - Msg ID: 104723)

Housing

An analyst on Neil Cavuto show on fox claimed we could have a 10 year bull market in housing in front of us.This sounded like Dow 20,000 type talk to me.When you hear talk like that its time to start getting nervous.If there is one thing I have learned from the stock market its when people say its diffrent this time ,take your profits and run.21

Aragorn III

(06/17/2003; 23:47:45 MDT - Msg ID: 104724)

A far-reaching character study.... (?)

http://www.atimes.com/atimes/Front_Page/EA11Aa02.htmlTHX-1138... Thank you for N.Zealand's LotR coinage news. This inspired a thought to share on a related matter.

There was early this year, at thought-provoking Asia Times, a unique and worthy assessment of collective consciousness as expressed through the LotR phenomenon. It is a worthy study with relevance for the economic thinker if you believe, as I do, collective consciousness holds court at the market and the election polls, two cornerstones of the economy.

I have provided the link. Should you choose to delve into this article, bear in mind the author offers good observations, but it should be noted he fails to pin the tail on the proper donkey.

He brings this forth among his introductory and concluding remarks:

@@@@@ from link @@@@@
The 'Ring' and the remnants of the West
By Spengler

INTRO SNIPS

The most important cultural event of the past decade is the ongoing release of the film version of J R R Tolkien's The Lord of the Rings. No better guide exists to the mood and morals of the United States.

The rapturous response among popular audiences to the first two installments of the trilogy should alert us that something important is at work. Richard Wagner's 19th-century tetralogy of music dramas, The Ring of the Nibelungs, gave resonance to National Socialism during the inter-war years of the last century. Tolkien does the same for Anglo-Saxon democracy.
Tolkien well may have written his epic as an "anti-Ring" to repair the damage that Wagner had inflicted upon Western culture. Its revival in a reasonably faithful cinematic version has far-reaching effects on the popular mind.

BODY SNIPS

It is hard for us today to imagine what a cult raised itself around Wagner after the 1876 premiere of his Ring cycle. Compared to it the combined fervor for Elvis, the Beatles, Madonna and Michael Jackson seems like a band concert in the park. Perfectly sensible people attended a Wagner opera and declared that their lives had changed.

What precisely did he do? Wagner announced the death of the old order of aristocracy and Church, of order and rules. Not only was the old order dying, but also it deserved to die, the victim of its inherent flaws. As the old order died a New Man would replace the servile creatures of the old laws, and could make the world according to his will. Wagner's dictum that the sources of Western civilization had failed was not only entirely correct, but also numbingly obvious to anyone who lived through the upheavals of 1848. But how should one respond to this? Wagner had a seductive answer: become your own god!

Wagner cobbled together a new myth. The Norse god Wotan personifies the old order: he rules by the laws engraved on his spear, by which he himself is bound. To build his fortress Valhalla he requires the labor of the giants, and to pay the giants, he steals the treasure of the Nibelung dwarf Alberich. Alberich won the treasure with a magic ring he fashioned from the stolen Gold of the Rhine River. Wotan covets this ring, which gives its bearer world mastery, but is compelled to give it to the giants.

Wagner's audience had no trouble recognizing in Wotan and the other immortal gods the ancient aristocracy of Empire and Church, who made a fatal compromise with capital (the Ring of world domination) and thus sealed their own doom.

Tolkien himself despised Wagner. He did not emulate Wagner's Ring, but he recast the materials into an entirely new form. The Lord of the Rings is an anti-epic, whose protagonist is a weak, vulnerable and reluctant Hobbit, as opposed to the strong, wound-proof and fearless Siegfried. The Hobbit Frodo Baggins does his duty because he must. "I wish the Ring had never come to me! I wish none of this had happened!" he exclaims to the wizard Gandalf, who replies: "So do all that come to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given to us." No utopian is Gandalf; what one must do is to muddle through.

The kingdom of Men that emerges from The Lord of the Rings is a humdrum affair, in which the best men can do is to get on with their lives.

CONCLUSION SNIPS

Those who hold America in contempt for its lack of refinement should think carefully about this conclusion. From their founding on Christmas Day 800 AD, when Charlemagne accepted the crown of the revived Roman Empire, the institutions of the West have been formed in response to external threat. The Holy Roman Empire of the High Middle Ages, Tolkien's conscious model for the Kingdom of Gondor, arose in response to the incursions of Arabs in the south, Vikings in the north, and Magyars in the West. Boorish and gruff as the new American Empire might seem, it is an anti-empire populated by reluctant heroes who want nothing more than to till their fields and mind their homes, much like Tolkien's Hobbits. Under pressure, though, it will respond with a fierceness and cohesion that will surprise its adversaries.

Orcs of the world: Take note and beware.
@@@@@ from link @@@@@

He asks that we believe the happy applicability of this coming-of-age tale to be uniquely American. This view is overly narrow if popular appeal is to be our guide to collective consciousness among we the people. Evidence shows many non-Americans have booked passage on this same boat from the Grey Havens. "Literally speaking" of course!

The shared international appeal should not to be missed. The original Anglo document has been joined by translations for more than 35 other languages. Thirty-five! Broad global coverage is assured through English, French, Dutch, German, Russian, Italian, Spanish, Portuguese, Chinese, Japanese, Korean... fully twenty additional translations to fill the many corners.

You may find it especially notable (in a non-Anglo regard) that LotR received official endorsement from China in the form of inclusion on a reading list prepared by the Chinese Government several weeks ago to assist citizens passing time at home to stem the spread of SARS. Further demonstrating credibility to the serious and practical opportunity of the officially recommended reading material, the '16th Party Congress Report' was listed atop the order, with Tolkien later, none the less for the subordinate position.

Publisher Houghton Mifflin expands this view of international relevance:

'When J.R.R. Tolkien published the first volume of The Lord of The Rings, The London Sunday Times stated that the world would forever more be divided into two types of people: "those who have read The Lord of The Rings and those who are going to." Never before in contemporary times had an author dared to create an epic quest that rivaled the classic legends of Homer and Chaucer in scope, yet was utterly accessible to readers of all ages and nationalities. The book stoked hungry imaginations across the globe. It also became a counter-cultural symbol because of its prescient themes of environmental conscience and battles against the forces of corruption and war.'

In one corner of this world we share, New Zealand filmmaker Peter Jackson took inspiration and said of the unfolding effort, "I've spent seven years of my life on this project so far, pouring my heart into every single aspect of it. But I think that's the least we owe to Tolkien and the legions of FANS AROUND THE GLOBE. They deserve our very best efforts."

Retouching thematics for another moment, Jackson states further:

"All the major themes are introduced in The Fellowship of The Ring. The most obvious one is good versus evil but this story is also about how friendship endures and overcomes even in a world of tremendous upheaval and change. We really tried to make these themes part of the fabric of the film."

In actor Sean Bean we find a good position to offer insight to the tragic hero he portrays, Boromir. In his fatal attraction to the power of the ring some may see here one incidental easy parallel to draw with a U.S. government tragically under the growing addictive spell of monetary hegemony. "Boromir has the human qualities of being honorable and brave but also having a very clear opinion about everything. In the beginning, he sees The Ring [hegemony] simply as a solution to the problems of his people. But he finds out that it isn't quite so clear-cut, especially as he becomes susceptible to its powers."

For the analogous context, turning to Jackson again, "The evil is more psychological, intangible, something each character encounters in his or her own way."

If movie attendance is to add to our test of prevailing winds, the orcs that article-writer Spengler insists must "take note and beware" should in fact find concern for more than uniquely the American sphere of influence. Whereas the two LotR installments thus far, "Fellowship" and "Towers" have placed at #11 and #7, respectively, on the all-time USA box office listing, on the international all-time (non-USA) box office these two installments notably placed higher at #6 and #4, respectively. I conclude the "orcs of the world" will find little refuge anywhere they look.

Of those few movies placing higher, only "Titanic" (1997) was common to both USA and non-USA box office lists. From this in hindsight dare we conclude that collectively we ALL were steeling our nerves, soon thereafter to go down with the global financial ship as stock markets foundered three year later?

Filmmaker Jackson has said of the effort, "The cast often referred to me as a hobbit. I'm sure it's a joke but to tell the truth, the hobbit lifestyle -- good food and a comfy chair in front of a fire -- sounds pretty good to me!"

What might we make of this rambling character study? Writer Deborah Rogers wrote, perhaps presciently, in 1975 "Aragorn's good work is that of the restoration of the king on earth. And this is a type, a figure, a symbol, of the happy turnabout of the restoration of man as a race. Individually we are hobbits; collectively we are Aragorn."

I happily leave it to the many fans and LotR scholars to derive the meaning in this.

got gold?

Gandalf the White

(06/18/2003; 01:12:15 MDT - Msg ID: 104725)

HEAR HEAR !!! --- Greetings to the KING, Sir Aragorn III

Aragorn III (6/17/03; 23:47:45MT - usagold.com msg#: 104724)
A far-reaching character study.... (?)
===
<;-)

Mr Gresham

(06/18/2003; 01:13:26 MDT - Msg ID: 104726)

Who is Hugh Thompson? Hey, YOU there!

http://www.dailyreckoning.com/I was going to read Aragorn after posting this excerpt from the Daily Reckoning, but I see he has presaged it perfectly. (You must click on the Daily Reckoning's title at left "Your Papers, Please", by Butler Shaffer.) My thought is that, if we are wrong in our alarms, then so what if a few cranks whined about threats to civil liberties? But if we are right, then what must be said of our silence? (And here I must wonder, is my silence so golden?) Must OUR Dresdens burn, too?

"Georgetown, Texas. Like a lynch mob fueled by a fear of the unknown and a willingness to see strangers as threats to be quickly dispatched, the herd impulse has, since 9/11, become mobilized on behalf of a war against shadows. Even beyond the violent and repressive reactions of the American government, the most unsettling consequence of the WTC attacks has been the nearly total collapse of the minds of most Americans.

"For the duration of the war -- which government officials tell us will go on forever! -- men and women have rationed their intelligence and allowed what they would have heretofore regarded as their "fundamental principles" to be conscripted into the service of the state.

"Americans who, five years ago, were so incensed at Bill Clinton's perjured testimony that impeachment proceedings were brought, now exhibit a willingness to be lied to about matters of far greater concern than oval office shenanigans....

"America is becoming the Nazi Germany we feared in my childhood. For those who were not around during those years, you can get a flavor for the anti-tyrannical sentiments of the time by watching any number of movies depicting the Nazi police-state. The constant presence of police; the insistence upon showing "your papers" to whichever government underling demanded them; the awareness that neither your person nor home was immune from state searches or seizures; the disappearance of people into unknown prison camps; neighbors spying upon neighbors, and children betraying their parents to the state; and the domination of society by a military and bureaucratic arrogance, arbitrariness, and absolutism, were constantly chilling examples of the dangers of state power.

"How did we manage to reverse our thinking? When did appeals to the lessons of history become treasonous? How did philosophic principles collapse into patriotic slogans? ...

"A preoccupation with war has long been symptomatic of the decline of societies that practice it. Wars are essentially conducted by governments against their own people -- ... when the inviolability of the individual is sacrificed to some alleged collective security; and when violence is equated with "patriotism" and peace with "un-Americanism," the days of such a society are numbered.

"For those who desire to understand the attraction that this violent, destructive system has for most of us, a new book, War Is a Force That Gives Us Meaning, by Chris Hedges, offers one of the most powerful critiques of the war system since Randolph Bourne. ...

"Hedges has been a foreign correspondent for some fifteen years for such news organizations as the Christian Science Monitor and the New York Times. You may be more familiar with him as the recent commencement speaker at Rockford College, where he was hooted, heckled, and air-horned by war-lovers in the audience. Intellectual bankruptcy is another symptom of a dying culture, wherein discomforting ideas and criticisms can only be met with the kind of unfocused, thoughtless rage that is becoming increasingly evident in radio and television programming. For the herd-oriented, a new idea can only be countered not by clear thinking, but by blasts from an air-horn!

"Hedges observes that "[s]tates at war silence their own authentic and humane culture" and, in so doing, "erode the moral fabric" of a society. He adds: "[w]ar breaks down long-established prohibitions against violence, destruction, and murder," and leads to a situation in which "the domination and brutality of the battlefield is carried into personal life." "War," he goes on, "fills our spiritual void," and helps to erase "unsettling undercurrents of alienation and dislocation" in our lives. In words that reflect the disquieting climate in which we live, Hedges observes "a growing fusion between those in the state who wage war...and those who believe they understand and can act as agents for God."

"I cannot exaggerate the importance of these observations. They force us, as do the writings of Jung, Krishnamurti, and others, to confront the "dark side" forces that reside within each of us no less than they did within tyrants and their supporters in other times and places. They also compel us to reconsider our thinking. The idea of creating systems designed to threaten, coerce, and kill, and to imbue such agencies with principled legitimacy, and not expect them to lead to wars, genocides, and other tyrannical practices, expresses an innocence we can no longer afford to indulge.

"Hedges reminds us of the culture of war, which "is peddled by mythmakers" throughout society, including the modern media. You can observe such mythmaking as the media struggles to find evidence of "heroism" in a "war" that is more realistically described as a campaign of brutish bullying. ...

"While the institutionalized butchery of the war system makes it difficult for me to equate it with heroism, one does, on occasion, find individual acts of a heroic quality even in battle. My favorite candidate for this role is Warrant Officer Hugh Thompson, a helicopter pilot in the Vietnam War who came upon the scene of what we now know as the "My Lai Massacre." After becoming aware that what he was observing was not the ordinary combat of warfare, but a calculated slaughter of Vietnamese civilians by troops led by Lt. Calley, Thompson set his helicopter down between the civilians and the American troops. He then ordered his own crew to turn their machine guns on the American soldiers and, if they persisted in the slaughter, to fire on them. Thompson then took the civilians to safety and reported the incident, which led to the prosecution of Calley.

"I doubt that there will be any statues of Hugh Thompson erected anywhere soon, or that he will be leading any Memorial Day parades. His actions were too heroic, for he stood up to the very excesses of butchery that Hedges informs us destroys our sense of humanity and, with it, our civilization. I would much rather have Hugh Thompson as my neighbor than I would any of the myriad of retired generals who became television network fixtures in the mythmaking to which we have become accustomed these past many months.

"Our very survival -- both as individuals and as a civilization -- depends upon a radical transformation of our thinking, one that compels us to confront those silent voices within us that can so easily erupt into bloodbaths. While most of us continue to focus on the "Nazi holocaust" as the epitome of statist butchery, we must recall that the 20th century was the "holocaust century." Some 200,000,000 of our fellow human beings were slaughtered in various wars and genocides, and tens of millions more were wounded, both physically and spiritually, in ways that never heal.

"Because we fear the responsibility for our actions, we have allowed ourselves to develop the mentality of slaves. Contrary to the stirring sentiments of the Declaration of Independence, we now pledge "our Lives, our Fortunes and our sacred Honor" not to one another for our mutual protection, but to the state, whose actions continue to exploit, despoil, and destroy us. The poet, Lawrence Ferlinghetti, declared: "I am waiting for the war to be fought which will make the world safe for anarchy." While I share his sentiment, it is nonetheless evident that wars only bring up from the depths of our dark side the kinds of moral flotsam and jetsam that have surfaced in Washington, D.C. In the process, they destroy those qualities of peace, liberty, spiritual centeredness, mutual respect, and sense of individual responsibility which, alone, make for the greatness of any civilization.

"Editor's note: A version of this article was published on LewRockwell.com.

"Butler Shaffer [send him e-mail] teaches at the Southwestern University School of Law. "

LeSin

(06/18/2003; 05:37:27 MDT - Msg ID: 104727)

International Perspective - Argentina, Not Japan

http://www.prudentbear.com/internationalperspective.asp

International Perspective, by Marshall Auerback

Argentina, Not Japan June 17, 2003

Snip from the end:

"What this means in relation to America is that the latter, like Argentina circa 2001, no longer controls its own economic destiny. In the case of the United States, the Sword of Damocles is not the IMF, but China. The death knell for the US economy may well be when the Chinese elect to float their currency because at that stage, many of the other Asian central banks (with the possible exception of Japan) may well find yet another compelling alternative to the US greenback, thereby sending the latter into free fall, creating untold damage to the US credit system. American policymakers, who persistently call for the Chinese remnimbi to be floated, ought to be careful what they wish for. It could well be the precipitating event for the final denouement in this extraordinary period of financial history."

mikal

(06/18/2003; 08:46:08 MDT - Msg ID: 104728)

Trichet headed for ECB

http://www.usatoday.com/money/world/2003-06-18-trichet_x.htm6/18/2003
Bank of France chief found innocent; ECB post is next
PARIS (AP) �Excerpts: "Bank of France Governor Jean-Claude Trichet was acquitted Wednesday of fraud charges stemming from the French government's decade-old bailout of one of its biggest banks, Credit Lyonnais. The Paris court verdict removes an obstacle to Trichet's widely expected assumption of the top job at the European Central Bank when the current chief, Wim Duisenberg of the Netherlands, retires in July.....
Trichet has long had the backing of the French government, and his support for low inflation as the key to economic growth makes him a favorite among monetary policy purists.
time, Trichet was head of the French treasury.....
The scandal and questions about Trichet's future also had increased uncertainty facing the euro-zone economy at a time of slow growth, rising unemployment and weak confidence.
At stake was the reputation of the ECB, one of the European Union's most important institutions. The bank sets interest rates for the 12 countries that use the euro.
Barring new twists, Trichet can now call in a deal among European leaders at a 1998 summit earmarking him as successor to Duisenberg. Formal blessing could come as early as Friday's EU summit in Thessaloniki, Greece. With his probity no longer in question, the 60-year-old Trichet can claim near-perfect qualifications to uphold the euro's credibility on financial markets and become the European counterpart to U.S. Federal Reserve chief Alan Greenspan..."

admin

(06/18/2003; 08:47:31 MDT - Msg ID: 104729)

MK's Gold Commentary & Review

http://www.usagold.com/AMK/MK-gold.htmlUpdated.

New Quick Notes.

New Stein.

Excerpt:

Gary Silverman has an insightful comment for us which appeared in his Street Talk column in the Financial Times. He goes over a long history of Alan Greenspan's missed calls, irrational exuberances, and overly optimistic analysis of the economy's long term prospects and ends with this: "Against this backdrop, Mr. Greenspan's thoughts about deflation should be considered carefully. Investors seeking green pastures and still waters of the financial markets would be wise to consider whether Mr. Greenspan is their shepherd."......................Many consider Greenspan's talk of deflation "a blessing for aggressive speculation" particularly in the junk bond market (driven of course by the desire for yields), says Silverman. He quotes James Grant: "Alan Greenspan is the Mary Meeker of the bond market -- he is leading the sheep to be shorn. He is going to do more damage than any analyst at Morgan Stanley or Merrill Lynch did at the height of the internet bubble."

Belgian

(06/18/2003; 09:31:52 MDT - Msg ID: 104730)

Trichet next President of ECB

Trichet acquited ! Adieu Duisenberg and thanks.

At the end of the 19th and beginning of the 20th century, when we were on an INTERNATIONAL GOLD STANDARD, the US AND Europ were de facto on a shared single currency !!! We converted our respective notes in GOLD at a fixed exchange rate.

Since 1971 we drifted apart and continue to do so today.
Monetary Union (EMU) leads to a New Gold Standard !

The EMU' fundamental is build on the principle of " PRICE STABILITY ". Euroland is in its process of overcoming asymmetries and working to convergence.

The detoriating US$ will inevitable lead to Price-Inflation and pressure Price-Stability of EMU. It is at this junction that euro-Gold will break free !

This might happen under Trichet's presidency !?

Clink!

(06/18/2003; 09:46:49 MDT - Msg ID: 104731)

re Trichet

You couldn't get a much worse-sounding name for a central banker. 'Tricher' (same pronunciation) is French for 'to cheat'......
C!

Knallgold

(06/18/2003; 10:09:35 MDT - Msg ID: 104732)

test

USAGOLD / Centennial Precious Metals, Inc.

(06/18/2003; 10:19:42 MDT - Msg ID: 104733)

BULLION priced right. Build your base.

http://www.usagold.com/gold/special/current.html

a nation of one

(06/18/2003; 11:06:11 MDT - Msg ID: 104734)

@ Clink! (6/18/03; 09:46:49MT - usagold.com msg#: 104731)

What other kind of name would you suggest for a central banker?

TownCrier

(06/18/2003; 12:43:00 MDT - Msg ID: 104735)

Beware the occasional media boneheads

http://biz.yahoo.com/rf/030618/markets_fed_openmarket_1.htmlHow can Reuters get something wrong that is this simple?

The totality of the brief article is as follows.
---
HEADLINE: Fed adds $2.25 bln reserves via overnight repos

NEW YORK, June 18 (Reuters) - The Federal Reserve said on Wednesday it added $2.25 billion in temporary reserves to the banking system through an overnight fixed-system repurchase agreement.

Fed funds were trading at 1.25 percent, matching the central bank's target for the rate.
---

In actual fact, the opposite occured according to the principal source, i.e., the Fed (which, in fairness to the media, was itself briefly in error with Monday's stats). The Fed DRAINED reserves today in open market operations, mopping up for a one day timespan $2.25 billion in bank reserves using a transaction known as a REVERSE repurchase agreement in which the Fed accepts bids on its own collateral.

This public service announcement hereby ends.

R.

alkahulik

(06/18/2003; 13:17:32 MDT - Msg ID: 104736)

Upside/Downside

Is it more dangerous to be out than in at this point? Nothing worse than missing the train when it leaves the station. Suppose gold opens up $50 higher one morning?
Just a thought.

TownCrier

(06/18/2003; 13:38:33 MDT - Msg ID: 104737)

Gold slips on dollar, awaits Fed

http://www.forbes.com/markets/newswire/2003/06/18/rtr1004015.htmlLONDON, June 18 (Reuters) - Gold bullion prices slid back on Wednesday in Europe, sent packing by a feisty dollar which hit one-week highs against the euro on scaled-back expectations of a possible U.S. interest rate cut next week.

The yellow metal slid over $5 in London afternoon trading at one point, as it rediscovered its traditionally inverse relationship to the stronger dollar, which makes gold more expensive for holders of other currencies.

Dealers said they expected the market to trade within a $365.00/355.00 range until the outcome of the U.S. Federal Reserve's FOMC rate-setting meeting which starts next Tuesday...

------(above excerpts from url)-----

Mwanwhile, another article on market and official rates reports the following.

NEW YORK, June 18 (Reuters) - U.S. Treasury prices were swept lower for a third session on Wednesday as diminished concerns over deflation chipped away at the bond market's monumental recent gains.
+
Longer-dated debt prices slid deep into the red as relief that deflation was not imminent after Tuesday's report on consumer prices prompted the market to reevaluate the likelihood of radical Federal Reserve action, such as aggressive rate cuts or outright buying of Treasuries.
+
The voracious rally in longer-dated debt over the past few weeks was originally fueled by the Fed's heightened concern about deflation. ...the spectacular buying binge may have been overdone... But hopes were high the Fed would still have to ease by a quarter point at its policy meeting next week, if only to avoid a sharp back-up in yields and mortgage rates.------

According to the article traders are reported to be hopeful that as $85 billion in maturing Japanese Government bonds is released this week, some of it may find its way across the Pacific to support the U.S. Treasury market.

No wonder why. With May Federal budget figures due Thursday, economists are widely looking for a deficit to weigh in at $90 billion, 10% higher than the same month one year ago.

R.

Clink!

(06/18/2003; 14:23:28 MDT - Msg ID: 104738)

@ A nation of one

Now there's a suggestion for a future contest question !

Cavan Man

(06/18/2003; 15:30:53 MDT - Msg ID: 104739)

Belgian, mikal

Today's WSJ carries a medium length editorial written by Gordon Brown and his French and German counterparts (FM's). Interesting timing and I do think Brown is part of the team to attach the Euro to England.

Waverider

(06/18/2003; 16:11:16 MDT - Msg ID: 104740)

DAILY GOLD MARKET REPORT

http://www.usagold.com/DailyQuotes.htmlSnip"
"Gold took a hit on lowered expectations for a substantial interest rate cut when the Federal Reserve meets at the June 25 FOMC meeting. Trading appears to be based more on emotion that logic or rational reasoning. Weak hands were shaken out as the U.S. dollar gained against other major currencies and on some suspected currency intervention by foreign banks over the last 24 hours despite reports of strong physical demand in Asian trade earlier..."

Belgian

(06/18/2003; 16:18:13 MDT - Msg ID: 104741)

@ Cavan Man

Yes, Gordon Brown plays the role of the pro-euro figurant !?
Difficult to slam the euro-door, when seeing how the world's capital flows do favor the euro-zone for a multitude of reasons. This is the main explanation for the exch.rate rise of the euro versus the dollar. Cfr. the ME airbus contract in euro ! (oil for euro and euro for airbuses -?)

And EU central banks (+ECB) who can adjust the value of their reserves with the marking to market of their Gold !!!
Imagine you have the opportunity to increase the price of your house in full possession, according to circumstances !!! And compare this with the dollar-printing-mania, NOT being able to mark its (backing) goldreserves (?) to market.

POG hesitates because there is confusion about the US'rate cut : 0,25% (most likely) or 0,50% ? The IR difference between euro and dollar is not the only reason for dollar flight into the euro. Fragilized economies do prefer a generalized "Price-Stability" to operate in. A Debt-driven-Economy hates price-stability and needs more debt + price inflation. UK economy doesn't wish, for the time being, to converge to the euro-economy.

Most probably, some shaking moves might take place during the lazy summermonths of july/august, climaxing into september/october !?

Toolie

(06/18/2003; 16:27:30 MDT - Msg ID: 104742)

China May Float Currency, Snow Says (Should Read Begs)

http://www.washingtonpost.com/wp-dyn/articles/A6932-2003Jun17.htmlSnip:

Speculation about a revaluation or floating of the yuan has intensified recently, thanks in part to a report by Goldman Sachs & Co. predicting that such a move is in the works. And Snow's comments were greeted enthusiastically by Frank Vargo, vice president for international economic affairs at the National Association of Manufacturers.

"A recognition by the U.S. government that the Chinese currency needs to move up is very welcome," Vargo said, noting that the U.S. bilateral trade deficit with China was $103 billion last year -- the biggest with any single country -- and was running at a $120 billion annual rate in the first four months of this year.

China's currency is not the only one the association is complaining about. The organization, part of a group called the Coalition for a Sound Dollar, this week released its first monthly "Asian Currency Manipulation Monitor," accusing Japan, South Korea and Taiwan of using government intervention in exchange markets to keep their currencies artificially low. "We've seen the dollar move [downward] in Canada and Europe, where the market really works," Vargo said, "but with the Asian currencies, most of the governments are intervening."

But not all experts agree that the Chinese are likely to see a substantial rise in the yuan as being in the national interest. By putting a crimp in exports, such a move might risk increasing unemployment, endangering social stability.

Toolie: Yea, and after the National Association of Manufacturers get Their higher Won, then all that need be done to level the playing field with China is; establish comparable property rights, minimum wage laws, safety regulations, child labor laws, prison labor laws, social security, health care, pensions, zoning regulations and those pesky human rights. Then, and only then will the U.S. stop bleeding dollars to China.

Chinese workers are disposable. Not to worry though U.S. workers will meet them somewhere near the middle.

Black Blade

(06/18/2003; 22:01:35 MDT - Msg ID: 104743)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Snippit:

At times, it seems surreal and that the inmates of an insane asylum are running the economy and the financial markets. The Fed is hell bent on debauching the currency and don't appear to be worried about the consequences. They are confident that monetary alchemy can solve whatever problem ailing the economy. In private, they freely admit they're not sure what will work. The word "unconventional" is used more often when solutions are proposed. The fact that the Fed is even considering using unconventional means should alert the average investor these are not normal times and that all is not well. The economy isn't reacting in normal fashion to policy stimulus having failed to respond to traditional measures. We now have the lowest interest rates in half a century and it is taking nearly $5 of debt to get $1 of GDP. Another way of looking at the issue is that the U.S. is now borrowing $2.5 trillion a year as the country's debt growth goes parabolic.

All of this should at least get the attention of investors; it certainly has gotten the attention of policy makers. Yet on Wall Street, our financial markets have become one giant casino where professionals and amateurs alike are encouraged to speculate. Wall Street in one sense has become the adult version of Disneyland where investors can act out their money fantasies. This is no more evident today than to view what is moving in the markets and what is analyzed and recommended. To most professionals and traders they believe the good ole� days are back.

The best way to describe the present euphoria is to say that the bubble is back. In reality it never fully deflated. Speculation is back in full bloom. This is reflected in what is moving the markets and the metrics used to analyze stocks. The companies that have done the best in the market this year are companies that are losing money, companies with deteriorating balance sheets and declining income statements, or companies that are constantly revising their estimates downward or having to restate their earnings.

Black Blade: A good article tonight and Puplava nails it. It does appear that the speculative mania is back and the Lemmings are running headlong toward yet another cliff. However, it has been mostly pushed along by institutional players until recently anyway. Today I saw a report on CNBC showing that the "day traders" are beginning to show up for another go at the casino. Puplava is right again about the idiotic statements about "good stock valuations" and "improving fundamentals" touted by Wall Street primates and financial media carnival barkers in regard to the overvalued tech sector while panning the more reasonably priced energy sector and precious metals.

Black Blade

(06/18/2003; 22:10:51 MDT - Msg ID: 104744)

SNOW: JOBLESS RATE MAY RISE

http://www.nypost.com/business/1210.htm
Snippit:

June 18, 2003 -- Treasury Secretary John Snow said the unemployment rate may rise further before improving later this year. At a conference yesterday, Snow warned that "Unemployment is unacceptably high at 6.1 percent (in May) but it could well rise to 6.2 or 6.3 percent before the higher growth rates begin to bring it down," Snow cautioned.

Black Blade: Now we await "damage control" from the White House. Every time it seems that Snow spills the beans, Dubya has to come to the rescue with some reassurance all is well.

mikal

(06/18/2003; 22:11:46 MDT - Msg ID: 104745)

@Toolie

http://www.etherzone.com/2003/sabr061703.shtmlGood to hear about the Yuan, but your comments expose the depth of the problem. Almost ironic that the U.S. has to abruptly meet "in the middle" it's world neighbors. The developing world's adoption of regulations you mention may unfortunately continue to come at a slow pace. The command economies of despots, dictators, communists, socialists, autocrats, etc. are slow to change.
Yet the Washington plutocracy too will need to relax business regulations and red tape if the economy is to revive and compete in today's "free trade" world. Not by using the example of China's around the world, but common sense regional survival instincts, like today's revived use of tariffs and "trade wars". Ultimately moving over many years to a peaceful "middle" ground that respects the need for the good life for all lives, without which "human rights" is an empty slogan.
The following article, about the author's recent presence at a Bush speech, decries bloated federal bureaucracy, welfare-warfare policies, spending and taxes, and burdensome, targeted and unfair regulations and Fed CB's obstructive interest rate meddling:

DO WHAT IS RIGHT
FOR THE AMERICAN PEOPLE By: Murray Sabrin -Excerpt:

"Undoubtedly, these themes will be repeated over and over during the next 17 months, until the November 2004 election. Nevertheless, President Bush's most memorable line was when he urged Congress "to do what is right for the American people". This assertion begs an answer.
What is right for the American people is a nation based on liberty, free enterprise, sound money, the rule of law, low--very low-- taxes, very few federal regulations, and most importantly, a foreign policy that does not try to police the world or engage in preemptive strikes.
This agenda, this vision, is the legacy the Founding Fathers' gave us more than 200 hundred years ago.
Unfortunately, President Bush revealed he intends to continue to govern like a "big government conservative". He did not address the unnecessary and wasteful federal spending that is in effect a tax on small business. He could have called for restructuring the federal government. This would free up the people's money that is now being gobbled up by unnecessary federal bureaucracies. This would in effect "liberate" America's families and businesses from the shackles--taxes and regulations--the federal government has placed on the American people. He also could have called for ending the Federal Reserve's manipulation of interest rates, which generates the business cycle, and undermines the prosperity of small businesses.
Instead, President Bush is going to perpetuate the welfare-warfare state, albeit with tax cuts and some regulatory reform. Rather than calling for a "radical", i.e., fundamental, downsizing of the federal government and the establishment of sound money, and a foreign policy that is not based on the premise that the Untied States can impose freedom and democracy on authoritarian regimes anywhere in the world, President Bush essentially called for maintaining the status quo.
Three years ago candidate Bush promised a "humble" foreign policy. That went by the wayside because of the September 11th attacks on America, and the "imminent threat" posed by Saddam to America's national security. However, there is growing evidence that the Bush administration was planning extensive Mideast military intervention before the September 11th attacks.
Based on President Bush's remarks yesterday, he should take his own advice and begin to "do what is right for the American people"- dismantle America's welfare-warfare state."

Waverider

(06/18/2003; 22:37:56 MDT - Msg ID: 104746)

First lady rails at 'pillage' of Peru's resources

http://biz.yahoo.com/rm/030618/minerals_peru_firstlady_1.htmlSnip:
"Eliane Karp, Peru's often-outspoken first lady, said on Wednesday that big companies were conducting "a type of modern pillage" of the country's natural resources. Peru is a major producer of metals, which generate some 50 percent of its exports. Foreign firms like Newmont Mining Corp., Barrick Gold Corp. and Billiton BHP operate large copper, zinc and gold mines here.

Waverider: I was in Palo Alto this past weekend attending the Stanford graduation ceremonies and in fact, President Alejandro Toledo of Peru was the keynote speaker. He is a native Peruvian Indian from a family of sixteen siblings, seven whom died before the age of one. He started earning money at the age of six by shining shoes. He eventually had oppurtunity to study in the USA thanks to the Peace Corps and through scholarships completed dual masters degrees at Stanford in education and economics, and then completed a PhD in education. He appears to be committed to rectifying the poverty which ravages Peru and has had no less than 120 death threats. What is interesting is that he made a brief reference during his speech about nationalizing Gold mines - I wonder if we're going to see some changes in Peru - increased mining royalties perhaps?

Liberty Head

(06/18/2003; 23:11:24 MDT - Msg ID: 104747)

Re: Murray Sabrin Post by mikal

I completely agree with Murray Sabrin's assesment of the situation, however I have little faith that anything will change us from our current course. With few exceptions, I see only a nation of fools and theives, current company excepted. All one need to do to see our future is look at what is left of the Soviet Empire. We are following their lead into the fallen empire builders, house of corruption. We will be completely exhausted before the big fight with China even begins.
Talking about freedom, won't bring freedom about. Enlightenment alone will not free the slaves. The public outrage doesn't even register. We are getting precisely what we deserve.
I do have faith in the laws of the universe and know that the flow is always towards balance.
I think a healthy dose of negativety is in order. I do not subscribe to the "protons only universe" theory. If balance is the nature of the universe, there must be a mass of pissed off electrons somewhere. Count me as one.

Cheers

Black Blade

(06/19/2003; 00:18:02 MDT - Msg ID: 104748)

EDS Says It Will Cut 2,700 Jobs

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=2&u=/nm/20030618/bs_nm/tech_eds_dc
Snippit:

NEW YORK (Reuters) - Electronic Data Systems Corp. (NYSE:EDS) on Wednesday said it will cut 2,700 jobs, or 2 percent of its workforce, as new management returns the computer services company to its 40-year-old roots of managing technology for clients.

Black Blade: The "Bone Pile" grows.

Black Blade

(06/19/2003; 00:43:41 MDT - Msg ID: 104749)

UBS Firing 500 Investment Bankers

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=6&u=/nm/20030618/bs_nm/financial_ubs_dc
Snippit:

ZURICH (Reuters) - UBS AG will fire 500 investment bankers to compensate for falling revenues, it said on Wednesday, giving in to growing cost pressures on the industry caused by a drop in equity trading and merger activity. A three-year bear market, which has seen revenues from mergers, acquisitions and equity issues slump, has forced global investment banks to cull around 100,000 jobs in the past two years to shrink costs swollen by the tech and Internet boom.

Black Blade: There goes a few nonessential Bankers Bones.

slingshot

(06/19/2003; 00:55:16 MDT - Msg ID: 104750)

Liberty Head

Msg# 104747 "We are getting precisely what we deserve" Truer words have never been spoken. Public outrage is only the outcome of cause and effect. The general population remains passive till the, Not In My Backyard, or They Can't Do That, syndrome finally intrudes into their little world. By that time it maybe too late. Another attitude pervasive in our society is, What are you going to do. Self empowerment is a thing of the past and so they are willing to lick the boots of the enslaver. IMHO, I believe that our educational system teaches our children to be subserviant and I am not referring to teaching them to be good citizens, but a teaching that enforces a herd mentality. If I am wrong, why not are there younger goldbugs who post upon this forum.
Education is taught at fine institutions, but FREEDOM is taught at home. That is what this forum is all about. Keeping us free from financial and government influence. For some Gold is insurance, others an investment. For me it is Freedom in my older years.

Slingshot------------------<>

Black Blade

(06/19/2003; 01:03:19 MDT - Msg ID: 104751)

Financial planner urges investors to use caution in overvalued market

http://washingtontimes.com/business/20030618-102505-5858r.htm
Snippit:

With Wall Street rallying for more than three months, stock-fund investors are feeling more bullish. Funds with positive returns far outnumber those with negative returns, and riskier funds, including those that focus on growth or technology stocks, are outpacing bearish havens like gold funds.

Investment experts agree it's time for mutual fund investors to be more aggressive � yet careful.

"I think caution should still be the word of the day," said Ralph D. Scearce, a financial planner in Lexington, Ky.

Mr. Scearce is concerned that the stock market is overvalued, with the Standard & Poor's 500 index, the broadest of Wall Street's major indexes, having risen about 30 percent since mid-March to reach levels of a year ago. Stocks in the S&P are trading at more than 30 times earnings, which planners like Mr. Scearce say is too high, given the fact bull markets historically have started with stocks trading at 12 times earnings.

"I believe we had the greatest [market] bubble in the history of mankind between 1995 and 1999, and I don't think we are going to get through that bubble in three years," Mr. Scearce said.

Black Blade: It's been quite a rally but there has been no required "capitulation" that the Wall Street crowd was expecting when the bubble deflated. Considering the rally is based on nothing � no positive news whatsoever, it should unravel with more devastation for those lured into this bear market rally.

Topaz

(06/19/2003; 01:40:36 MDT - Msg ID: 104752)

Dollar, Bonds and Gold.

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9PaperGold resumed it's close association with PaperPaper yesterday as Bond Yields softened markedly. 94 should stop dollar rise and turn Bonds/Gold. A most important pivot point for all 3 imo.

TownCrier

(06/19/2003; 02:51:30 MDT - Msg ID: 104753)

Gold-buying Asian nations to keep own currencies in check, match Fed cut

http://biz.yahoo.com/rf/030619/economy_asia_rates_1.htmlexcerpts:

SINGAPORE, June 19 (Reuters) - Many Asian nations are expected to follow an expected U.S. rate cut next week... A rate cut would maintain interest rate differentials and prevent any rush for yield that could see currencies rise...

If the Fed eased, Hong Kong, with its currency pegged to the U.S. dollar, would almost certainly follow.

Taiwan's central bank meets the day after the Fed and is also expected to follow -- its last rate cut was after the Fed lowered last November.

Korea is already easing as it tries to spur its slumping economy, while falling inflation has allowed Bank Indonesia to slash official rates to below 10 percent, and a Fed cut would give both economies more room to cut.

The Philippine central bank has said it would not necessarily follow the lead of the Fed, but delivered a de facto easing by loosening monetary conditions earlier this month.

Even Thailand -- which grew at 6.7 percent in the 12 months ended March -- could cut rates, analysts said, to maintain its half-point interest rate premium to the United States.

-----(see full article at url)-----

As these nations give their citizens no policy reason to hold their currencies in any higher regard -- with everyone looking to inflate together -- the prominent gold-buying regimen of these nations' savers will likely gain impetus as a result. Strange things can happen when the physical market gets pressured.

R.

Black Blade

(06/19/2003; 03:31:10 MDT - Msg ID: 104754)

SA gold production falls in Q1

http://www.miningweekly.co.za/min/news/today/?show=37368
Snippit:

The Chamber of Mines of South Africa reports that gold output for the first quarter of 2003 was down 2,7% at 92 314 kgs when compared to the same quarter in 2002 and was down 6,8% when compared to the December quarter. The chamber says that on a quarter-on-quarter basis (when comparing the March 2003 quarter of each year to the December quarter of the preceding year) there had been a decline of 7,2% in production on average over the past five-year period.

Black Blade: Not all that surprising as gold is priced in dollars and expenses are in Rand. Also, worldwide gold production will likely decline as little exploration activity occurred at prices below $350/oz. With a slower pace of new mine openings, long lag times from discovery to production, and declining production from mature mines, it is certain that less gold supply will appear over the next several years.

Black Blade

(06/19/2003; 03:38:11 MDT - Msg ID: 104755)

It's Official - US Economic Recession Not Over Yet

(No link provided yet)

The National Bureau of Economic Research (NBER) today announced that the US economic recession is not over. The Wall Street primates and financial media carnival barkers have been yapping away about the slow growth "economic recovery" over the last couple of years, however, the NBER - the official arbiter of declaring the start or end of economic recessions will not declare the end of the recession that started in 2000.

- Black Blade

Black Blade

(06/19/2003; 03:50:11 MDT - Msg ID: 104756)

Rate Cut Looking Like a Sure Thing

http://www.washingtonpost.com/wp-dyn/articles/A10948-2003Jun18.html?nav=hptoc_b
Economy's Continued Weakness, Possibility of Deflation Worry Fed Officials

Snippit:

Federal Reserve officials, concerned there is still no sign of the solid pickup in U.S. economic growth needed to foreclose the possibility of deflation, appear certain to cut their target for overnight interest rates next week.

There is broad agreement among investors and analysts that a rate cut is coming, but there is disagreement about whether policymakers will lower their 1.25 percent target by a quarter-percentage point or by a half-point. The latter seems to be more likely as a sort of exclamation point to emphasize that the officials believe this will be the final step that, coupled with the income tax cut that will show up in workers' take-home pay next month, will put the economy on a strong, sustainable growth path.

Fed Chairman Alan Greenspan, who gave the first hint that he was contemplating another rate cut in testimony before a congressional committee on May 21, referred then to such a step as "taking out insurance."

Black Blade: Sentiment sure is swinging wildly over the last couple of days. Two ays ago it appeared that a 50 basis point cut was a done deal. Then yesterday it was thought to be 25 basis points or maybe not at all. Today many more are thinking that a 50 basis point cut is needed to "make a point" that the Fed will be ready to do whatever it takes to fend off deflation or inflation. It should get "interesting".

misetich

(06/19/2003; 05:11:10 MDT - Msg ID: 104757)

SNOW: JOBLESS RATE MAY RISE

http://www.nypost.com/business/1210.htmSnip:

June 18, 2003 -- Treasury Secretary John Snow said the unemployment rate may rise further before improving later this year. At a conference yesterday, Snow warned that "Unemployment is unacceptably high at 6.1 percent (in May) but it could well rise to 6.2 or 6.3 percent before the higher growth rates begin to bring it down," Snow cautioned.

In prepared remarks, Snow also played down worries about the lofty U.S. trade deficit with the rest of the world.Reuters
**********
Misetich

The stage is set for a 1/2 point cut today. Very bullish for gold.

All On Board The Gold Bull Express

Black Blade

(06/19/2003; 07:15:10 MDT - Msg ID: 104758)

Prudential ups gold price target, Newmont rating

http://www.iii.co.uk/shares/?type=news&articleid=4675951∾tion=article
Snippit:

NEW YORK (AFX) -- Analyst John Tumazos at Prudential raised his 2003 gold price forecast to $359.50 from $340, and for 2004 to $375 from $325 to reflect the weakness in the U.S. dollar. As a result, Tumazos raised his earnings estimates for Barrick Gold, Placer Dome and Newmont Mining. He also raised his rating on Newmont to "hold" from "sell," citing improved finances from higher gold prices and the extinguishments of certain hedge positions.

Black Blade: This guy is a little late to the party isn't he? I recall he rated Newmont a sell at something like $15 and it's about $30 now I think. Hmmm�

BTW, unemployment is still rising and first time claims hang tough above the recessionary 400,000 level. The 1Q current account deficit rose to a new record too. Worse yet, someone in the bond market spilled the beans that inflation is wildly larger than the artificial CPI data suggests and this info made it into the bond market - oops!

mas

(06/19/2003; 07:22:42 MDT - Msg ID: 104759)

Squakbox and Greenspam's message

Quote, Greenspan will do anything to get the economy going, even to the extent of flying helicopters over New York city dropping dollar notes. Now I like that one, don't you. Watch Squak box, profit from it.

jenika

(06/19/2003; 07:24:54 MDT - Msg ID: 104760)

Educating the young ones on gold

@slingshot
I agree with you about education - but then, since when is it soley up to the education system to educate our children?

My 12 and 11yr old both have gold. The 11yr shows no interest - but my 12yr loves to follow the prices. I guess my next step will be showing him this forum :)

mikal

(06/19/2003; 09:05:04 MDT - Msg ID: 104761)

Pension Accounting

http://www.bloomberg.comPension Accounting Rules Create False Profits: Lee Berton
June 19 (Bloomberg) -Snippits:
"Believe it or not, company management doesn't have to practice fraud to report suspect earnings. All it has to do is follow standards for pension accounting issued by accounting rule makers. Paul R. Bahnson, an accounting professor at Boise State University in Idaho, maintains that current pension accounting rules under generally accepted accounting principles (GAAP) create ``hocus pocus�� on the bottom line, which is leading to what he calls a ``crisis of confidence�� for accounting.
These rules, he says, permit companies to assume a percentage of interest or stock-market appreciation for their pension portfolio that isn't only illusionary, but may even have contributed to the former stock market bubble prior to the sharp market decline of the past few years. In effect, the rules, issued by the Financial Accounting Standards Board (FASB) in 1985, permit a company to assume appreciation on pension portfolio assets, even though sharp stock market declines have decimated the portfolio's value.....
Bahnson says that use of pension accounting under GAAP exposes an extreme irony behind all accounting rules. ``Here we have big frauds like Enron, WorldCom and Adelphia, which actually cooked their books, yet current pension accounting rules permit similarly bad accounting,�� he adds. ``It shows that a company doesn�t have to play fast and loose with the rules to fool the public. It can follow the rules and also fool investors.��"

Druid

(06/19/2003; 09:07:47 MDT - Msg ID: 104762)

slingshot (6/19/03; 00:55:16MT - usagold.com msg#: 104750

Slingshot, I agree with what you say but would suggest that "education" is not taught in most Universities. You are more less "indoctrinated" then educated. I've learned more in the last three years doing my own research then I ever learned in college. In fact what I learned in college was by in-large a waste of something valuable(time) and something worthless(over inflated currency). I work with a bunch of highly educated people and not a one them knows anything about money. I always enjoy conversing with the MBA types because I do the exact opposite of what they recommend and do quite well. OT: Kilo(man I love these pseudonyms) that 44 TRILLION IS ONE HELL OF A LARGE NUMBER, I'VE CALLED ON PICARD TO GET THE ENTERPRISE READY.

Gandalf the White

(06/19/2003; 10:20:27 MDT - Msg ID: 104763)

NICE Job, SPIKE and SPOT !! BUT, -----

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1I thought that we had discussed these $10 interday moves !
VOLATILITY is not fun !!
<;-)

Druid

(06/19/2003; 11:58:06 MDT - Msg ID: 104764)

International Perspective, by Marshall Auerback

www.prudentbear.comGiven this policy cul-de-sac, how much further can the bubble be sustained? Although the market's recovery has gone further than many of us felt possible, there are still a number of commentators with a very free market bent who argue that the bubble cannot be reignited, and that history bears this out. They are wrong: Although no developed country central bank or government has ever tried to reignite a bubble, in one country � Kuwait � a government did precisely that, as Allianz/Dresdner global strategist Frank Veneroso recounts based on his own experiences in the country. Visiting the country as an advisor of the IFC in the wake of the first flood of oil income into Kuwait (which sparked a bubble in the domestic stock market), Veneroso describes the anomaly of this small, oil producing country now in possession of the third largest stock market in the world:

" On our way back to the central bank it dawned on me that, behind much of this third ranking stock market cap in the world, there were only a few cement and clinker plants, a slaughter house or two, and quite a few shell games. One could not even speak of valuation. The usual parameters of valuation---price earnings, price book---simply did not apply. For those companies with real assets, revenues and incomes their market capitalizations bore little discernable relation to any such underlying values. And, of course, for the shell companies on the Souk their market prices had no grounding whatsoever in any fundamental values.

Speculation on the Souk al Manakh was financed with a curious type of informal margin credit. Speculators who wish to buy shares with borrowed money usually go to their broker for a margin loan or their bank for a personal loan. In the Gulf at the time such speculators borrowed from other individuals and these borrowings took the form of post-dated checks. So rapid was the rise in the Gulf stock market and so great were the demands of speculators to buy stocks on margin that postdated checks paid an interest rate of 100% per annum or more. Margin financing reached unimaginable extremes; one speculator, who had been a clerk two years earlier, had at the peak $14 billion in stocks financed with $14 billion of margin debt.

What caused such an unimaginable bubble in stock prices? Many of the market's participants were successful businessmen in the region. This part of the Middle East had an old mercantilist culture. In their day to day traditional commercial activities, these people were usually shrewd traders with a strong sense of value. No doubt many market participants were fully aware how absurdly overvalued Gulf shares had become. My central bank colleagues realized this to some degree. But everyone believed that the rise in share prices would continue as long as the flow of funds from the region's oil income continued. The surge in Middle East oil income was no doubt the first cause of the bubble; it came in waves as the oil price climbed from 1973 to 1980. It created a demand for domestic assets, yet opportunities for productive investment were scarce. This fueled the initial almost unimaginable rise in prices on the organized Kuwaiti exchange. The rise in both the oil price and the Kuwait stock market over so many years bred unrealistic euphoric expectations of endless oil income and an infinite appreciation in share prices. These expectations gave rise in turn to the over the counter market---the Souk...

The bubble began to burst twice, once in 1977 and again in 1980. In both cases the government intervened and successfully supported the market. However, these repeated bailouts of stock speculators created such entrenched moral hazard that the two years after the second bailout saw the most extreme bubble in the history of stock markets. By the time that super extreme moral hazard, melt-up developed, the innocents were gone. Only the cynics were left in the casino. When that preposterous bubble finally burst, policy could finally do no more. The cynics all knew the game was over. There were no bids and the market suddenly simply stopped trading." ("The Souk: The Greatest Stock Market Bubble of them All")

As the example of the Souk al Manakh demonstrates, in principle a bubble can be reignited but will the Fed and Administration go as far as the government of Kuwait? It is hard to know what will inhibit American policy makers, given Fed Governor Bernanke's confession of the dirty little secret at the heart of modern monetary policy: in effect, a government/central bank operating under a fiat currency system in which its own currency remains at the apex essentially faces no real constraints to doing whatever it wishes to do.

We think Bernanke understates the limitations to some degree. Were it essentially a self-financing economy, the constraints faced by the US today would be negligible. But in an open economy with a large current account deficit and a huge net external debt and thereby a huge dependence on foreign investors, the non-stop use of the "electronic printing press" can signal a future depreciation of the currency. This can precipitate sales of domestic assets by foreigners, which may entail yet more monetary expansion to offset the impact of the resultantly higher yields at the long end. Ultimately, it should lead to domestic investors selling bonds as well. The result can become almost unmanageable as the financial crisis of 1997/98 demonstrated

Druid: Trying to fit a paper construct gone exponentially amok(upward) over a physical construct(heading downward) and deriving value from this attempt is tricky at best and down right dangerous at worst. Watching these geniuses bailing out the water would be extremely entertaining if it didn't have such vile effects. Oh well, head for the high ground with all the basics.

USAGOLD / Centennial Precious Metals, Inc.

(06/19/2003; 12:03:12 MDT - Msg ID: 104765)

Build your base with bullion priced right.

http://www.usagold.com/gold/coins/bullion.html

TownCrier

(06/19/2003; 12:48:27 MDT - Msg ID: 104766)

Sign of Fed rate cut

When the Fed's open market trading desk took action today to add $3 billion to the banking system with a round of 28-day repos -- transactions that will span next week's FOMC rate decision on the new fed funds target -- the Desk accepted Treasury collateral and provided the new supply of money at rates as low as 0.88 percent. Having thus split the difference so nicely between 0.75 and 1.00 percent, the Fed is cleverly keeping the market guessing about what size of cut may in the offing -- 0.25% or a 0.5% reduction from the current FOMC target of 1.25%.

Stay tuned. The mystery will be unravelled next Wednesday.

R.

Cavan Man

(06/19/2003; 13:16:47 MDT - Msg ID: 104767)

EURO Recycling (Already?)

LE BOURGET, France (Reuters) -- Qatar Airways announced a $5.1 billion deal for Airbus planes on Thursday, joining rival Emirates and Korean Air with plans to expand despite a record industry slowdown.

Waverider

(06/19/2003; 14:27:44 MDT - Msg ID: 104768)

DAILY GOLD MARKET REPORT

http://www.usagold.com/DailyQuotes.htmlSnip:
"More economic data released today suggest rough times ahead for the U.S. economy and the dollar. The current account deficit for the first quarter and the U.S. Federal budget deficit surged higher to new records with a devastating cumulative effect. These levels are of course unsustainable and should the dollar somehow gain strength by whatever internal or external forces are applied, then the weight of this cumulative debt will be much more difficult to manage. The only real choice left outside of "exotic" or "nonconventional" methods of Federal Reserve dollar management is to weaken the dollar by lowering rates and increasing liquidity."

Waverider: Black Blade - what do you mean please, by exotic or nonconventional methods of dollar management? TIA.

Black Blade

(06/19/2003; 15:05:40 MDT - Msg ID: 104769)

Re: Waverider

A number of proposals have been put forward to achieve some "balance" to manage the dollar and the economy. Some of these proposals have included having the Fed buy long term treasuries, stocks, and even junk bonds, others include Fed Governor Bernanke's use of the printing press to adjust inflation, and there is even the proposal for a "cash tax" � that is to put an expiration date on US currency to encourage consumer spending over saving. If interest rate cuts fail to achieve the desired effect, Alan Greenspan pointed out to the Congressional Joint Economic Committee that "nonconventional" means could be used to head off deflation (and presumably inflation as well). That the Fed is even discussing such issues is a sure sign that some at the Fed are a bit worried.

- Black Blade

Black Blade

(06/19/2003; 15:07:38 MDT - Msg ID: 104770)

Despite Data, Panel Won't Call Recession's End

http://www.thestreet.com/markets/rebeccabyrne/10095069.html
Snippit:

While the economy has shown some signs of life recently, the official arbiter of U.S. business cycles isn't ready to call an end to the recession it says began in March 2001. The National Bureau of Economic Research isn't so sure the economy has turned the corner. In a memo late Wednesday, the committee said it needs "additional time" to interpret "the movements of the economy over the past two years." The NBER declared in November 2001 that the economy had entered a recession in March of that year and it hasn't yet said when, or even whether, that downturn has ended.

To be sure, the committee typically waits "many months" after an apparent peak or trough to make its declaration "because of data revisions and the possibility that the contraction could resume." The NBER said it waited until December 1992 to announce that a trough had occurred in March 1991. One issue that continues to plague researchers, however, is the weak employment picture. Although the U.S. economy is experiencing growth in income and output, employment continues to decline, it noted. Indeed, weekly unemployment claims Thursday showed little improvement in the jobless picture. Although the four-week moving average of new unemployment benefits claims fell by 3,000, they remain solidly above the 400,000 level.

Black Blade: While Wall Street primates and CNBC carnival barkers tout "the recession is over" based on GDP alone, the NBER uses several measures to gauge the economy. When the data is compiled a different picture emerges � recession, or at least no end of economic recession has been determined.

misetich

(06/19/2003; 16:19:33 MDT - Msg ID: 104771)

Trade Deficit Swells to Record $136.1 Billion

http://www.washingtonpost.com/wp-dyn/articles/A12312-2003Jun19.htmlSnip:

WASHINGTON - The deficit in the broadest measure of trade swelled to a record $136.1 billion in the first three months of 2003 as war tensions stoked the prices of imported crude oil and other petroleum products.
..........
The latest snapshot of trade activity reported by the Commerce Department Thursday shows that the mushrooming "current account" deficit in the January-March quarter was 5.8 percent larger than the previous record deficit of $128.6 billion set in the fourth quarter of 2002.
********
Misetich

The twin deficits continue on soaring - With the current economic growth stagnating at best the % to GDP will exceed 6% soon. The US $ will continue its descend..

All On Board The Gold Bull Express

Max Rabbitz

(06/19/2003; 16:22:06 MDT - Msg ID: 104772)

Natural Gas Price Impact

http://intelligencepress.com/From the Natural Gas Intelligence Press

"High natural gas prices have forced a number of sugar beet
plant closures and may force the shut down of the entire sugar beet industry in Wyoming ...."

Max: Maybe the sugar beet farmers can switch to planting pine trees for Bernanke's Printing Press, a growth industry.

misetich

(06/19/2003; 16:34:05 MDT - Msg ID: 104773)

Freddie Mac Restatement Seen Above $1 Billion

http://www.nytimes.com/reuters/business/business-financial-freddiemac-restatement.htmlSnip:

WASHINGTON (Reuters) - U.S. mortgage finance company Freddie Mac (FRE.N), which has replaced its top executives amid public scrutiny over its accounting, may restate its earnings $1 billion to $3 billion higher, The Wall Street Journal reported on Thursday.

The article said mortgage specialists expect the restatement to lead to a drop in net income of the same magnitude in future years.
*******
Misetich

With interest rates going lower Freddie Mac earnings prospects do not look to bright -

Continued stress can be expected on Freddie Mac balance sheet and derivatives portfolio

Its a question of when not if for a financial blowup

All On Board The Gold Bull Express

Goldilox

(06/19/2003; 16:55:50 MDT - Msg ID: 104774)

More Techno-geeks for the bone pile

http://www.freep.com/money/business/eds19_20030619.htmsnippit:

BY DAVID KOENIG
ASSOCIATED PRESS

DALLAS -- Electronic Data Systems Corp. said Wednesday it would cut 2 percent of its workforce, or about 2,700 jobs, and sell some assets to save hundreds of millions of dollars per year.

The troubled technology-services company, which has diversified through acquisitions, said it would focus on its core business of running technology systems for other corporations and governments.

Officials warned that earnings in the second half of this year will fall slightly short of analysts' expectations. Investors shrugged off the lower earnings outlook, as EDS shares rose $1.70, or 7.6 percent, to close at $24.20 on the New York Stock Exchange, continuing a rally that has seen the stock jump 54 percent since a change in company leadership in March.

EDS is Michigan's largest high-tech employer with 13,200 workers, most of whom live in southeastern Michigan. The state also has the largest concentration of EDS employees in the country, including Texas, where the company's headquarters are in Plano.

Kevin Lightfoot, an EDS spokesman, said he could not say when or how the cuts will be implemented in Michigan.

Goldilox:

It's good to see the Strong (cheap) Dollar policy building the American jobs base! We can't even keep high tech jobs, so I fail to see how we're supposed to fare in retrieving exported manufacturing jobs once the tooling and technology has been spread all over the PacRim.

mikal

(06/19/2003; 17:22:01 MDT - Msg ID: 104775)

@misetich

According to your Wash. Post excerpt in your msg#104771, "the deficit in the broadest measure of trade" was "stoked" by war tensions and higher crude oil prices and imported petroleum products. Why do they blame this now unless they're preparing the public for more oil shocks? Maybe they haven't sufficiently indoctrinated the public that war for oil is in everyone's best interest?
Maybe Arab terrorism was an old twist on the sleight of hand trick, so now the economy can be a weapon all by itself. Or that could even be branded a "terrorist's weapon" to compliment petroleum.
Re your: "It's a question of when, not if for a financial blowup." Maybe this is the lesser of two evils, or maybe it's all one evil.
And your" "The twin deficits continue on soaring- With the current economic growth stagnating at best the % to GDP will exceed 6% soon." Well said wise traveler.
Most here know the transitory and unrespresentative and misrepresented (even opaque) nature of official government reported "statistics". Before GDP it was GNP and before that something else. Each clone was further removed from practical business reality, usefulness and citizen's common sense. And now they have so many new tricks to increase "GDP", isn't it easy for them to keep it positive, above a "critical threshold" and keeping up with the twin deficits?
And what if they change the name to GHP- Gross Homeland Product? The "foreign adventures" have then entered a new stage, I guess.

mikal

(06/19/2003; 17:56:27 MDT - Msg ID: 104776)

@misetich- Correction

I misquoted frm your Washington Post deficit article. I had read the implication of their association as they stated the deficit rose "as war tensions stoked an increase in the price of imported crude oil and other petroleum products."

21mabry

(06/19/2003; 18:46:57 MDT - Msg ID: 104777)

Silver Purchase ACT

On this date in 1934 FDR signed the Silver Purchase ACT.

Cavan Man

(06/19/2003; 18:59:07 MDT - Msg ID: 104778)

On this date........

The Rosenbergs were electrocuted in Sing Sing prison. They left behind a ten and six year old son--later adopted by strangers. Avowed communists, they insisted upon their innocence until the end.

Toolie

(06/19/2003; 19:22:49 MDT - Msg ID: 104779)

Re: mikal (06/18/03; 22:11:46MT - usagold.com msg#: 104745)

Indeed Sir,

When you say; "Yet the Washington plutocracy too will need to relax business regulations and red tape if the economy is to revive and compete in today's "free trade" world. Not by using the example of China's around the world, but common sense regional survival instincts, like today's revived use of tariffs and "trade wars". Ultimately moving over many years to a peaceful "middle" ground that respects the need for the good life for all lives, without which "human rights" is an empty slogan."---end snip.

You speak of a Washington plutocracy with vision, and holding dearly the interests of those that they represent (from your keyboard to god's monitor). I think we would agree that this Washington does not exist.

The pro-competition reforms will be shaped in a way that solidify a "leaders" political base and reward those that contribute. Choosing the winners from it's political base, the losers from the opposing party and people at large. The kind of "free trade" Mr.Sabrin speaks is a different animal, It requires that government give up power. Not likely when the elected often seem to see themselves as infallible. In their minds *Americans will get used to working longer/harder/smarter for less* - while Americans go deeper in debt (benefiting whom?) trying to maintain a long gone standard of living. They will say *Just a little cheaper dollar will buy us the time we need* -while a focused Asia does "whatever is necessary" to strip away one industry after another.

Sure, it's not to late to avoid the global currency/trade train wreck. It will first take recognition that the problem facing U.S. exports is not one of currency valuation, but of valuation between the labor of *free people* and *disposable slaves, owned by a determined government*. But more likely, the dollar continues to fall as our plutocracy tries to buy the time to mesh the philosophy of freedom with slavery- without the expected economic rebound.

Very good to hear from you mikal, may your wealth (freedom) be measured in many yellow ounces.

Arcticfox

(06/19/2003; 19:38:54 MDT - Msg ID: 104780)

Borrowed this from another site...

Posted: Wednesday, June 18, 2003
By: Roy S. Carson
Venezuelan move to replace US$ with the �uro upsetting Washington more than Saddam's �uro conversion last November

VHeadline.com editor & publisher Roy S. Carson writes:

A move by Venezuelan President Hugo Chavez Frias to replace the US$ with the �uro is seen as upsetting Washington more than when Iraq's Saddam Hussein started using the �uro for oil transactions last November ... precipitating the US-led action to invade Iraq. Beltway bullies are now said to be angered by Venezuela's decision to barter oil with thirteen other Latin American countries, dealing moves to dollarize South America currencies. Intelligence reports say that while the US was able to pull the wool over the international community and ally with Britain's Blair to bulldoze action against former Iran War ally Hussein, the situation with Venezuela is proving more difficult.

for supposed links with Cuba's Castro and Libya's Khadaffi, the United States is loathe to do more than to give subversive support to anti-Chavez elements in Venezuela fighting against the Venezuelan President's domestic war against political and economic corruption which have permeated the South American country for the last half-century.

International finance experts see how the US dollar has been devaluing against the �uro, as important players on the international scene convert to the European currency for more stable transactions ... Russia, China, North Korea and Malaysia have begun holding �uros as important hedgings in their foreign exchange reserves as faith in American greenbacks floats down the river.

CIA and other intel organizations, including Britain's MI5, now fear that the next step is that the Organization of Petroleum Exporting Countries (OPEC) is about to switch to �uros ... the immediate effect would be a massive devaluation, perhaps sparking of domino-effect devaluations worldwide in US$-related foreign reserves and foreign debt calculations.

With a massive budget deficit, the United States is running scared of latest intel that the Kingdom of Saudi Arabia is on the brink of converting to the �uros and the opinion held by many OPEC ministers is that the conversion is an inevitability ... the only question left is WHEN?

Arab sources claim that �uro conversion across the Middle and Far East is a rational step to counteract the United States' capacity to "wage further illegal wars (a.k.a. State-sponsored terrorism)" around the world and that any prolonged occupation of Iraq by US/British forces ... and any move towards withdrawal of Iraq from the OPEC cartel ... will only precipitate "remedial action" by like-minded Arab nations to protect their own best interests over Washington's.

A significant step in this direction is that Iran is contemplating switching to the �uro and, as a result, is the latest object of United States undiplomatic interference ... an intel sources says "they are stimulating opposition forces, making covert threats ... the next step is destabilization and quasi-liberation warfare under the pretext of promoting US-style democracy but essentially aimed at maintaining the US dollar as a global transaction currency."

-END-

Arcticfox

(06/19/2003; 19:47:13 MDT - Msg ID: 104781)

Here's the hyperlink to my previous post...........

http://www.vheadline.com/readnews.asp?id=8613Eom...

Black Blade

(06/19/2003; 21:18:18 MDT - Msg ID: 104782)

Pension Accounting Rules Create False Profits: Lee Berton

http://quote.bloomberg.com/apps/news?pid=10000039&sid=ancIix9k6JBw&refer=columnist_berton
Snippit:

June 19 (Bloomberg) -- Believe it or not, company management doesn't have to practice fraud to report suspect earnings. All it has to do is follow standards for pension accounting issued by accounting rule makers. Paul R. Bahnson, an accounting professor at Boise State University in Idaho, maintains that current pension accounting rules under generally accepted accounting principles (GAAP) create ``hocus pocus'' on the bottom line, which is leading to what he calls a ``crisis of confidence'' for accounting. These rules, he says, permit companies to assume a percentage of interest or stock-market appreciation for their pension portfolio that isn't only illusionary, but may even have contributed to the former stock market bubble prior to the sharp market decline of the past few years. In effect, the rules, issued by the Financial Accounting Standards Board (FASB) in 1985, permit a company to assume appreciation on pension portfolio assets, even though sharp stock market declines have decimated the portfolio's value.

The Fed's paper stated that ``despite the fact that the accounting accruals that arise from pension plans are sometimes a very misleading measure of the underlying value of net pension obligations, we find that the (stock) market seems to have focused largely on those accruals.'' And some stock market analysts say that income for the S&P 500 from continuing operations would have been sharply reduced in 2001 with profits turning to losses at more than three dozen companies if companies had reported what their pension portfolios really earned rather than make interest-rate assumptions under current GAAP. Continuing operations exclude extraordinary items, accounting changes and discontinued businesses. Bahnson says that use of pension accounting under GAAP exposes an extreme irony behind all accounting rules. ``Here we have big frauds like Enron, WorldCom and Adelphia, which actually cooked their books, yet current pension accounting rules permit similarly bad accounting,'' he adds. ``It shows that a company doesn't have to play fast and loose with the rules to fool the public. It can follow the rules and also fool investors.''

Black Blade: Now don't that beat all? Many traditional pension plans are also under funded, however, corporate lobbying paid off and the rules were changed to allow companies to make wild assumptions about future earnings an defer making up shortfalls. It just gets goofier all the time. It is amazing all the bogus phoney corporate and government data spewed out by straight faced Wall Street primates and CNBC carnival barkers, and no one catches on or even calls them on it.

timbervision

(06/19/2003; 21:34:45 MDT - Msg ID: 104783)

Black Blade

Re: Accounting for pension "gains".

I don't think its that "no one catches on or calls them on it" so much, as, anyone who wants to stay alive or keep their job does not dare to expose the real value of the corporate profits. If the real value were reported, and the share prices were to tumble and reflect the true value of the companies, the power elite of these companies wouldn't be able to continue to squeeze out every last drop of wealth from the little guy via the mechanism of the stock option scam.

Nothing is getting better in the US. Everything is just becoming more and more surreal.

Operative

(06/19/2003; 22:59:32 MDT - Msg ID: 104784)

@ Timbervision

All hope is not lost my friend. You end your last post with:

"Nothing is getting better in the US. Everything is just becoming more and more surreal. "

I can compare the current state of affairs in the U.S. with a cancer victim. The cancer caused in much part by an oversize/overtaxing government and the Federal Reserve, and in some part to the greed in each of us. The treatment will take some time, and no doubt cause a great deal of pain to each of us, but perhaps the end result will indeed be a better country, and a wiser people. So sad we the people did not heed the warnings of our founders in regards to large government coupled with bankers and fiat. Tough going ahead? You bet! Perhaps, I hold fast to hope anyways, that maybe the next generation will have corrected some of the present ailments and thier lot will be better one.

Thanks to all who contribute here on this forum, there are some who have had at least a heads up on what lies around the bend.

Sundeck

(06/19/2003; 23:51:24 MDT - Msg ID: 104785)

Oil reserves by country and years remaining

http://www.economist.com/markets/displayStory.cfm?story_id=1863474&marketErr=1Snip:

"The Chinese economy set the pace for world energy consumption last year, according to BP's annual statistical review. Although China's figures should always be treated with caution, this report suggests that the country's energy demand grew by nearly a fifth last year. That lifted world growth in energy consumption to 2.6%, well above the ten-year trend of 1.4% per year."

Sundeck: The link provides a nice chart showing available reserves by country and estimated years remaining (from the BP statistical review of world energy 2003)...no assumptions discussed...

Black Blade

(06/19/2003; 23:52:44 MDT - Msg ID: 104786)

NZ farmers say "flatulence tax" plan stinks

http://biz.yahoo.com/rm/030619/odd_newzealand_tax_1.html
Snippit:

WELLINGTON, June 20 (Reuters) - New Zealand farmers are being asked to cough up NZ$8.4 million ($4.9 million) a year to help reduce greenhouse effects caused by flatulence of their millions of sheep and cattle -- and they say the plan stinks. Last year New Zealand signed up to the Kyoto Protocol on global warming and agreed to reduce production of greenhouse gases which are suspected of being a major cause of climate change.

Black Blade: OK, so it's late. Just goes to show how extreme things can get. Soon they will tax human in the same way as well perhaps. This Kyoto Protocol business is getting out of hand.

Black Blade

(06/19/2003; 23:55:57 MDT - Msg ID: 104787)

Re: timbervision

Yes! "surreal" adequately describes it. That's the term I was looking for. Thanks

- Black Blade

Belgian

(06/20/2003; 01:50:20 MDT - Msg ID: 104788)

Is the euro currency going International ?

And is the euro increasingly "anchoring" to Gold and decoupling from the present dollar-anchor ?

The US$, as the present International currency, has arrived in its super inflationary (printing) phase and in the process of being exposed as a "Ghost of Gold".

W. Duisenberg, in his latest Q & A, let us understand, that there was NO (not much) International will to cooperate on monetary matters (�-$). In other words, the US has become a super-power and is expanding *beyond* its international monetary potential ! The dollar has become everyone's second currency...

The US and EU will never again come together to fix their respective currencies to Gold, as they have done so in the past. Is Trichet the start of new, further reaching, euro-initiatives ?
Will we *see* some more Gold, circulating between central banks, now ? NOT at a *fixed* price, BUT AT MARKET PRICES !!! Internationalizing the euro outside EMU, WITH price-stability ! Is this the reason why POG in euro is so visibly "STABLE", whilst the dollar is in the very process of depreciating against Gold ?
This to "MODERATE" the evolving $-� exchange rate !

I think that we are "seeing" the above happening and that this evolution will go on regardless of what we see on the geo-political front now, being of a lower order of importance.

An intrinsically weakening dollar, proportionately related to an increasingly stronger appearence/manifestation of the printer/manager of that International dollar-fiat (the US)!? Expressed by the "Iran"-affairs, evolving dramatically, imo.

Topaz

(06/20/2003; 05:13:08 MDT - Msg ID: 104789)

Another Manic Friday?

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9Keeping this Dollar down 'till June 25 (or 30) is taking it's toll surely! Last eve a strong DX (Sept) rally saw the Futures index rocket to 94.23 before being stopped... while Cash was relatively benign. Fun to watch tho.
Saw where the Blowtorch is being applied to Eurozone countries re actions against anti-semitism. Those poor Israelites, 60yr old Pawns at the mercy of the Pawnbrokers. Very sad.

Sundeck

(06/20/2003; 05:32:44 MDT - Msg ID: 104790)

Belgian #104788 Euro dollar gold

http://www.the-privateer.com/chart/g-multi.htmlYes Sir Belgian,

...looks like the Euro has become almost "as good as gold"...although notice the slight upward trend in Euro-POG since 2000... about 10%.

...compared with about 50% in Yen-POG and about 30% in $US-POG and 36% in $Oz-POG.

What will happen as $US depreciates more and more? When will other currencies ($Oz, Yen) decouple from it?

:-)

Caradoc

(06/20/2003; 07:03:24 MDT - Msg ID: 104791)

Not TA

We've trampled all over the number 360 and while coming from both directions. Despite reasonable sounding predictions of two weeks ago, from the viewpoint of traditional TA, 360 has offered no resistance when gold is going up and no support when it's going down. But if you think of the words "technical analysis" as looking at the data and trying to deduce patterns, the last couple of weeks reveals a pattern of New York talking to the rest of the world:

"No you don't. It goes where I say it goes."

"You guys willing to leave it there? Good! Now I'll prove I can make it go in the oposite direction."

Recognizing this pattern is absolutely worthless for daytrading because the last imaginary statement could just as easily end with "Now I'll prove I can make it go even farther in that direction." But recognizing the arrogance of the New York market may prove very helpful in predicting a longer term phenomenon....

My theory is that it will take a day and a half (as measured in the Eastern timezone) for the paper gold market to collapse. Day one is when a real move to gold begins -- whether because of war, terrorism, disaster, or just a small fraction of investors deciding that they want to put 5% of their assests into gold. New York responds to the higher demand and rising price by saying "Oh yeah? Watch this!" and drops the paper price by 5 or 10 dollars. Let's say from 400 to 390 or 395. The day ends some disbelief as people wonder why the price of gold coins didn't drop the way it "should have." The reason will be that people with money in hand are standing in front of cash registers around the planet and being told "We're out right now, but we'll have more tomorrow." All it will take is for a few of them to offer to pay now for the coins to be delivered tomorrow. At that point, the next morning qualifies as "interesting."

Of course, the collapse could be a lot quicker ("Sorry. You can't take delivery. We're only doing cash settlements.") But I suspect the above scenario is more likely.

Caradoc

TownCrier

(06/20/2003; 07:51:47 MDT - Msg ID: 104792)

S.F. Chron HEADLINE: Is gold a hedge or a trap?

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/06/19/BU190365.DTLExcerpts:

Thursday, June 19, 2003 -- Gold traditionally has been touted as a hedge against inflation. So why, at a time when the Federal Reserve is worried about deflation, do so many smart money managers like gold?

Pick a reason, any reason:

-- It's a hedge against geopolitical turmoil.

-- It's a hedge against deflation.

-- It's a hedge against inflation, which will rear its ugly head once efforts to stimulate the economy take hold.

-- It's a hedge against a falling dollar.

-- A new exchange-traded-fund, which will sell shares in a pile of gold bullion, will create new demand for gold, assuming it gets approved.

-- All or some of the above.

Today, we'll take a closer look at these arguments. On Friday, we'll look at various ways to buy gold.

The conventional wisdom was that when the war ended, gold prices would collapse. But that didn't happen. Gold rocketed up to $371 in late May and is currently trading around $357 per ounce.

Snyder says that's because geopolitical problems still loom large, especially in populous regions like China, Korea, Pakistan, India and the Mideast...

Other managers see gold as a hedge against financial, rather than political, uncertainty.

"Gold is a long-established monetary asset that represents an alternative to paper money," says Jim Grant, publisher of Grant's Interest Rate Observer.

"It is an off-and-on safe haven against many financial disasters, including bear markets, currency devaluation, rising domestic inflation rates and the like. Gold is a hedge against monetary disturbances."

Gold is also said to be a "store of value" that holds up better than financial assets during periods of deflation and rampant inflation.

"The fear of falling prices is spurring the Federal Reserve to create lots of credit, which may provoke a new cycle of rising prices. Or it might scare foreigners out of the dollar and provoke a cycle of a depreciating dollar exchange rates. In either case, gold may be a beneficiary," Grant says.

So there you have it. Gold could do well if we have deflation, hyperinflation, a dollar that won't stop falling and/or continued geopolitical uncertainty.

----(see url for full article)-----

Comments that underscore and summarize much of what we have already discussed. Gold is an asset that no respectable portfolio should be without. Call Centennial today to get your order in the pipeline... because you just never know what the weekend (and next week's FOMC meeting) will bring down upon the dollar.

R.

USAGOLD / Centennial Precious Metals, Inc.

(06/20/2003; 07:52:11 MDT - Msg ID: 104793)

Build your Base with Bullion -- that's right, folks -- at ONE PERCENT (approx 3 dollars and 60 cents)

http://www.usagold.com/gold/coins/bullion.html

TownCrier

(06/20/2003; 07:54:13 MDT - Msg ID: 104794)

San Francisco Chronicle: Tips on investing in gold

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/06/20/BU283992.DTL&type=businessExcerpts:

Friday, June 20, 2003 -- As you may have gathered from Thursday's column, gold prices are almost impossible to predict. For that reason, gold can add diversification to a portfolio stuffed with stocks and bonds.

But it should be used like cayenne pepper -- in small amounts, and only by people who can stomach the fire.

Today we'll look at some of the ways to buy gold.

GOLD BULLION

The easiest way is to buy coins or small bars.

The 20-year bear market in gold has wiped out a lot of bullion dealers, leaving a handful of large companies that sell nationwide via telephone or on the Web, and a few local shops that might sell gold jewelry and rare coins in addition to bullion.... ...Some people keep it in a safe-deposit box, others like to hide it at home so that it's accessible in an emergency.

GOLD STOCKS

Buying shares in gold-mining companies avoids the storage problem, but opens up a new can of worms.

Gold-mining stocks are two to three times more volatile than gold prices, and no two companies are alike, making them difficult to analyze...

Investors should never buy just one mining company, because most of them work in parts of the world subject to political upheaval, earthquakes and other natural and man-made disasters....

GOLD FUNDS

Investors can buy shares in a mutual fund that invests in gold-mining companies, but this is only slightly less complicated than picking individual stocks.

"You have to know, does it buy only gold-mining companies, or does it buy other metals? Does it stick to companies that hedge, or to unhedged ones? Does it buy mostly large companies or speculative companies?"

Last year, precious-metals funds were up 63 percent on average, beating every other fund category, according to Morningstar.

This year, they are up only 2.7 percent, trailing almost every stock and bond fund category.

In a bad year, gold funds can plummet. "This category lost almost 42 percent in 1997."

EXCHANGE-TRADED FUND

The World Gold Council, a trade organization, plans to introduce an exchange-traded fund that would give investors a new way to own gold bullion without holding the metal itself.

The fund would buy gold bullion, which would be held by HSBC bank in New York, and issue shares representing an undivided fractional interest in the gold.

The fund, called the Equity Gold Trust, has filed a registration statement with the Securities and Exchange Statement, but has not yet received approval....

-----(see full text at url)------

The article cites a couple gold sources and their prices. HA! Call the fine folks at USAGOLD-Centennial Precious Metals and see what a good position in the market can do for you. Let your relationship with a long-established and reputable firm work to your full advantage on superior pricing and service.

Bottom line: if it isn't a yellow metal AND at your fingertips, it just isn't "good as gold". It's as simple as that.

R.

21mabry

(06/20/2003; 08:53:06 MDT - Msg ID: 104795)

(No Subject)

Was reading some financial news one of the advisors said recent stock market advances are because of peoples growing faith in the economy.I think that is bull,I see no reason to be optomistic about stocks in this enviroment. Were I live people are worried about their jobs,houses are nt really selling and many peoples 401ks were cut in half in value ove the last three years. I find it hard to believe its these peoples money thats fueling this rally. As it is most times the small investor will come in at the top of this rally and lose again. The only way you can trade stocks in this market is with TA, you cant use fundementals when you cant trust the moral foundations of the market.21

TownCrier

(06/20/2003; 09:01:45 MDT - Msg ID: 104796)

Ask yourself, how can a "30-year dollar" truly be worth what a 30-year bond says it is?

http://biz.yahoo.com/rf/030620/markets_bonds_1.htmlExcerpts:

NEW YORK, June 20 (Reuters) --

...At the very long end, the 30-year bond lost 2/32 for a yield of 4.41 percent.

Longer rates have outperformed in recent weeks in part because the Fed raised the possibility that it might actively buy longer-dated Treasuries to pull the yield curve down.

However, Ip's report claims the study found problems with buying bonds, including the sheer size of the market these days, and argued the Fed should rely on verbal strategies to keep long-term rates down.

The Fed has already has some success with the latter.

"What's happened since the last meeting in May is the most amazing attempt to manage market expectations that we've ever seen from the Fed, said Stanley at RBC Greenwich.

"The Fed used to claim that it only followed the market, but now it's leading it around by the nose."

-----(see url for article)----

If the Fed follows through and aggressively monetizes long-term debt in an effort to flatten the outer end of the yield curve, I think I will record the event in my memoirs some distant future day as the time I watched a clown with no arms try to juggle a hailstorm of a trillion peanuts.

They will hit the ground. You will need gold.

R.

Druid

(06/20/2003; 09:42:10 MDT - Msg ID: 104797)

Investment Advice

That bubbly chearleader CNBC uses as a financial weapon of mass destruction for the life savings of your average investor just flashed a buy signal on behalf of CPM. I'll be calling here in a minute.

Druid

admin

(06/20/2003; 09:46:25 MDT - Msg ID: 104798)

MK's Gold Commentary & Review

http://www.usagold.com/AMK/MK-gold.htmlUpdated.

New "References and Remarks"

_________________________

The New Fed Monetary Policy
_________________________

"The big discussion behind the scenes with respect to the U.S. economy really breaks down to a simple question: How do we avoid going the way of Japan? Central bankers on both sides of the Atlantic are terrorized by the thought. The U.S. Federal Reserve has come up with two solutions to this latest confrontation with apocalypse. (After all, it is by slaying financial dragons one after another that the central bank truly justifies its existence.)"

_____________________________________________________

The New Strong-Euro, Strong-Dollar, Sort-of-Strong-Yen Policy
_____________________________________________________

"It was interesting to hear Claude Trichet -- the odds on favorite to become the next head of the European Central Bank -- say that he favored a strong-euro policy. This after both President George Bush and Treas Sec John Snow pledged their allegiance to a strong dollar policy. Now all we need is for the Japanese step to the plate and proclaim their newly found attachment to a strong-yen policy. This presents something of a Zen riddle. How can all three currencies be strong when they can only achieve that description by appreciating against each other? Likewise, if a tree falls in the forest........"

Go to the link above to see how all this relates to the price of gold......

TownCrier

(06/20/2003; 11:41:04 MDT - Msg ID: 104799)

Dollar strengthens as some traders seemingly expect Fed-led growth

http://biz.yahoo.com/rf/030620/markets_forex_6.htmlHEADLINE: Dollar carves out new highs on rate outlook

CHICAGO, June 20 (Reuters) - The dollar extended a slow grind higher ... Analysts expect that any reduction in official interest rates by the Federal Reserve will be supportive of growth in the world's largest economy, by extension helping the dollar even as the yield differential between assets of the U.S. and their higher-returning European counterparts widens.

Some analysts, however, remained unimpressed with the argument that says "low rates equals economic growth potential equals stronger dollar."

"It is not going to matter much whether the Fed funds rate goes to 75 basis points or 1 percent: U.S. rates are simply too low to finance that massive (U.S. current account) deficit; that's why I still believe the dollar is on a downward trajectory," said Michael Rosenberg, global head of foreign exchange research with Deutsche Bank in New York.

-----(see url for full text)-----

Amen to that, Mr. Rosenberg. And it is dollar blips like this one that makes for these opportune times to add gold to your portfolio. Call Centennial today.

R.

Socrates964

(06/20/2003; 12:13:26 MDT - Msg ID: 104800)

Coming up to the end of the quarter - we thus might expect some window-dressing/repatriation of profits to the US. I don't think it amounts to much more than this. E/$ has to go below 1.13 before I start getting excited.

Socrates964

(06/20/2003; 12:15:42 MDT - Msg ID: 104801)

Bonds

Evidently, the window-dressing argument cuts both ways. Note TYU3 (Sep 10-yr note future) perilously close to a trend reversal just below 118.

TownCrier

(06/20/2003; 12:28:15 MDT - Msg ID: 104802)

Fed thinks dollar temporarily too sloppy, mops up $3.5 billion through weekend

On behalf of the System the Federal Reserve's trading desk in New York intervened in the open market today to give the dollar a boost (a kick in the "cash" (market) you might say). Against its own debt the Fed "bought" $3.5 billion from institutions over the weekend term for a price of 1.158% (annualized). Another near equivalent way to look at it is as if the Fed sold a 3-day bond for $3.5 billion, absorbing money from the real world until the bond matures on Monday.

The Fed has been swimming with the tide and against the tide at the same time. I wonder if Dino doesn't feel like he's caught in a whirlpool right about now...

R.

Druid

(06/20/2003; 12:46:15 MDT - Msg ID: 104803)

A Great Warrior In The Fight For Gold & Freedom

http://www.goldisfreedom.com/DrPaul.htmTo the Honorable Ron Paul
U.S. House of Representatives
Washington, D.C.

June 10, 2003

Dear Dr. Paul:

I have been a student of monetary science for almost fifty years and I am greatly disturbed by the explosive and malignant growth of bond speculation which I attribute directly to the inept monetary policy of the Federal Reserve.

One-sided bond speculation fully explains collapsing interest rates and burgeoning depression in Japan for the past ten to twelve years. Before 1971, when the world was on the gold exchange standard and interest rates were relatively stable, there was no bond speculation. None whatsoever. Moreover, the amount of long positions in bonds was limited by the amount of issues outstanding. This was changed drastically (although without much fanfare) in 1971 when the world embraced fiat money. (Or was it fiat money that embraced the world?) Now interest rates can move in and out of double digits, or even fall to zero. More ominously, the amount of long position in bonds is no longer limited by the amount of issues outstanding (large as it may be). Derivatives have removed that limit. Speculators can now pyramid in pursuit of higher bond prices. At last count the size of the derivatives market was $140 trillion. Let's assume that the total of interest-related derivatives is $100 trillion in �notional terms�. This means that speculators have paid premiums to benefit from a rise in the value of $100 trillion worth of bonds (never mind that the total value of all the outstanding issues is a small fraction of that incredible sum). Therefore speculators stand to rake in $1 trillion in profits every time bond prices increase an average of 1 percent due to a drop in interest rates. Nor are these profits �notional�: they are payable in cold cash.

Druid: Congressman Paul is one of the few(if not the only) elected offical(s) holding Sir Maximus feet to the proverbial fire. Great job Professor Fekete.

R Powell

(06/20/2003; 14:09:05 MDT - Msg ID: 104804)

Some silver news

http://www.futuresourse.com/news/news.asp?story=i4365974237831626816 What are the chances that I got that long link right? If I didn't, the story is that Kodak's film sales in Asia are down bigtime.

Obviously this is not good news for silver use but I remember that on the day president Bush signed into law the bill authorizing the Treasury to buy silver to continue the Phily mint's silver eagle coin program the POS dropped seven cents. I had thought his signing that bill would present clear and solid evidence that the rumors of a government held silver shortage were really correct. It would, I had thought, bring the question of existing silver stores into the spotlight. I was wrong as the POS tanked that day and continued trading, as usual, totally oblivious to the fundamental supply/demand (ongoing deficit) situation. This helped re-inforce my belief that the POS is not now nor has it been in the past especially succeptable to any fundamental information. After all, there has never been any shortage of silver other than the constant "wanting more" from silver nuts like myself. As for industrial supply, silver has always been a plentiful, cheap mining byproduct, easily obtained. As an investment, paper silver is available for any buyer as long as a seller exists.

Silver is bought (and sold) daily even though there is, in all likelihood, not enough certified silver to cover all the paper contracts. However, and probably much to the dismay of Ted Butler, I was happy to be able to recently "buy" the Dec. 2004 silver contract at a low price simply because someone was willing to sell it to me. Comex did NOT have to say, "We're sorry, Rich, but you can not buy silver (nor can anyone buy a silver contract) because the seller's don't possess the physical to back the sale." There probably isn't anyone who has worked harder than Mr. Butler at investigating the silver market, and for that I thank him, but his recent tirade against the market for unbacked sales displays a lack of understanding at how these casino futures markets work. It is a fiat paper game with limited physical metal flow (very little indeed!). What he proposes would remove all speculative activity which would immediately seize-up the market, making silver a non-liquid market. The speculative element in any market gives that market buyers and sellers when producers and end-users are not active.

Anyway, if the link works, it gives some news relating to supply/demand for silver. We've not been overwhelmed with such nor do I think (imho) that the market has or will react to this. It will continue to trade technically until the deficit reaches a critical point or rumors (true or not) create investment demand. One of these days, one of these days.....
Thoughts ????
Friday, once again! Happens every week!
Happy weekend to all
Rich

Cavan Man

(06/20/2003; 14:11:43 MDT - Msg ID: 104805)

Today's DR

http://www.dailyreckoning.comWe race down the road to monetary Hell with nowhere to turn
around. But what torments we will suffer on our journey we
do not know. Nor do we know when. We are perhaps at the
beginning of the end...or maybe at the end of the
beginning. But that there will be an end, as there was a
beginning, we have no doubt.

Not that we particularly care. Because even though the
dollar is doomed, you, dear reader, are not. You can still
do what the Chinese government is doing - build up your own
stock of real money, gold - and watch the whole sorry
spectacle with a song in your heart and a trace of a smile
on your lips.

Waverider

(06/20/2003; 14:28:40 MDT - Msg ID: 104806)

DAILY GOLD MARKET REPORT

http://www.usagold.com/DailyQuotes.htmlSnip:
"Once again the name of the game is the U.S. dollar. Gold slipped lower as the dollar surged higher against other major currencies giving Funds an excuse on this "quadruple witching" day when money managers adjusted positions on today's expiry of stock-index futures, stock-index options, equity options and single-stock futures all on the same day...."

TownCrier

(06/20/2003; 14:34:48 MDT - Msg ID: 104807)

Trichet receives official nod from EU leaders

http://www.iii.co.uk/shares/?type=news&articleid=4677866∾tion=articlePORTO CARRAS, Greece (AFX) - Leaders asked EU finance ministers to initiate the process towards Trichet's appointment at their next meeting, on July 15 in Brussels...

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

Euro gets new face for next phase. Duisenberg goes fishing a hero -- starting strong and leaving strong having weathered a tough bubble-burst during the euro's infancy and formative years.

R.

contrarian

(06/20/2003; 14:53:42 MDT - Msg ID: 104808)

Druid--Bond Speculation

http://www.gold-eagle.com/editorials_03/lafleur062003.htmlDruid--
This article, along with its accompanying graph, discusses bond speculation in relation to depressions. There WAS bond speculation 1920-1945, although there were no derivatives back then. We seem to be repeating this pattern now, but making it worse!

I quote:
The Stock Market Bubbles of the 1920's and since 1980 are induced by falling interest rates that eventually leads us into a depression. The falling interest rates when it gets near zero create a Bond bull market that support financial institutions against productive sectors, i.e., industrial investments and job creation. The Bank of Canada today is playing the game contrary to the US Fed and the ECU of continued falling interest rates. Will it pay off?

Cavan Man

(06/20/2003; 15:03:51 MDT - Msg ID: 104809)

Movin' on...

(Capitalists in EU?)Leaders Back New European Union Constitution
VOA News
20 Jun 2003, 16:43 UTC

European leaders at a summit in Greece have endorsed a draft of a new European Union constitution, as police used teargas against anti-capitalist demonstrators near the meeting site.

The leaders called the draft a good basis for the constitution, which is expected to be approved later this year. But they said the draft needs more work and that months of hard bargaining on it lie ahead.

The proposed constitution calls for a long-term European Council president, instead of a rotating presidency, and an EU foreign minister. It is aimed at smoothing the decision-making process within the Union when it expands to 25 members in May, 2004. A final vote on the document is expected in October.

mikal

(06/20/2003; 15:45:37 MDT - Msg ID: 104810)

Top two headlines on Yahoo home page

Terror threat shuts U.S. embassy in Kenya
U.S. says military action on Iran an option

Goldilox

(06/20/2003; 15:52:27 MDT - Msg ID: 104811)

CEOs prefer spin over substance in annual letters

https://us.etrade.com/e/t/invest/Story?ID=STORYID%3De-trade_delv_2003_06_20_etrade_reuters-eng-reuters_FEATURE-CEOS-PREFER-SPIN-OVER-SUBSTANCE-IN-ANNUAL-LETTERS≺ovider=ReutersUSCompanyNewssnippit:

NEW YORK, June 20 (Reuters) - There are few signs chief executives have taken to heart the mounting pressure to be frank about corporate performance and prospects in their annual letter to shareholders.

According to experts who have analyzed this year's annual reports, the heads of most major companies prefer jargon-heavy language to obfuscate or hype. Descriptions such as "robust growth" and "best in class" gush forth, instead of specifics.

"On average, most letters have not improved," said Laura Rittenhouse, president of And Beyond Communications, a New York investor relations firm that conducts an annual survey of CEO letters. "I don't believe the climate for investors will get better until companies are encouraged to stop the hyperbole."

Goldilox:

All the bone-pile ad execs will be the "New Economy" MARCOM specialists as long as this climate is sustained.

CoBra(too)

(06/20/2003; 15:52:47 MDT - Msg ID: 104812)

EU Constitution -

@ Cavan Man - There is a majority fomenting the adoption of a more permanent EU Presidency - a notion the smaller members have tried to challenge up to now. Also two classes of EU commissioners (voting and non-voting)have been put forward to the chagrin of the smaller members again.

Looks like the equality (equal opportunity)is already being abandoned for the more powerful, or should we feel that's democracy?! - Meanwhile, Trichet has been acquitted as overseeing the demise of the largest (state)bank, Credit Lyonais, as minister of finance and is now deemed fit to follow Wim Duisenberg at the helm of ECB. Wondering if and when he'll blast his french successors violating the stability pact. Sort of an 'haut-gout' will stick to the man and his �-reign...

What to do? - Go gold for one ... cb2

PS- Listening to Doug Nolan at Jim Puplava's interview ...

21mabry

(06/20/2003; 15:58:33 MDT - Msg ID: 104813)

(No Subject)

I found the results of a study I read interesting.Using data from 52 countries from 1960 to 1980 a Samar Data and Jeffery Nugent found that for every one percent increase in the number of lawyers in a country economic growth was curtailed by appx. 4 percent. 21

Goldilox

(06/20/2003; 16:07:49 MDT - Msg ID: 104814)

US Censored "Green" report

http://news.bbc.co.uk/2/hi/americas/3006448.stmsnippit:

Christine Todd Whitman, a former Republican state governor, played down the differences, saying "it was important for us to get this out" and that changes had been agreed.

"The first draft, as with many first drafts, contained everything," she told the New York Times, adding that she was "perfectly comfortable" with the final version.

But Democratic Senators Joe Lieberman and Bob Graham, both presidential hopefuls for next year's election, called for action against "those responsible for doctoring this report".

"It brings into question the ability and authority of the EPA... to publish unbiased scientific reports," they said.

Goldilox:

I take it back. Maybe all those bone pile ad execs will be working for the gubmint.

Goldilox

(06/20/2003; 16:13:06 MDT - Msg ID: 104815)

Today's Daily Reckoning

http://www.dailyreckoning.com/snippit:

- The Conference Board served up a bite-sized bit of hopeful economic news yesterday by announcing that its index of leading economic indicators (LEI) jumped 1% in May.

- However, before toasting the recovery's long-awaited arrival, investors should bear in mind that the increase was largely due to touchy-feely components of the index, like stock prices and consumer expectations. The heavyweight empirical components like vendor performance and manufacturing hours showed much smaller gains.

- "On a fundamental basis, business is still difficult in most industries," observes Robert Marcin, writing for TheStreet.com. "Capacity utilization is low at 74% and deteriorating. Initial unemployment claims are high and rising as companies continue to cut costs. The bubble of capital investment and personal consumption has yet to be fully digested. Who needs a new car or new computer these days? How many companies need a new factory or office space? Excess capacity and intense global competition should keep corporate profit margins under pressure for quite some time."

Goldilox:

Oh goodie. Now the SM bubble is a leading economic indicator.

Goldilox

(06/20/2003; 16:17:19 MDT - Msg ID: 104816)

Rising US death Toll in Iraq spurs concern

http://www.washingtonpost.com/wp-dyn/articles/A14499-2003Jun19.htmlsnippit:

The death of a U.S. soldier yesterday near Baghdad brought to nine the number of troops killed in Iraq this month in a string of sporadic rocket and sniper attacks. Fifty-four Americans have died in accidents or military action since President Bush declared the war ended on May 1, equal to more than one-third of the 139 wartime deaths.

Bush and his top military and foreign policy officials define the casualties as a necessary cost of a successful military occupation. They say the deaths, while painful, are secondary to recent progress on economic and security issues. As one said yesterday, "Are we better off today than we were a month ago? Yes."

Goldilox:

My hand was not raised on that particular question.

Goldilox

(06/20/2003; 16:22:21 MDT - Msg ID: 104817)

US Exchanges fight foreign rivals

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054966278856&p=1012571727162snippit:

he big two US futures exchanges began a campaign on Thursday�to keep out foreign competition, urging Congress to impose strict criteria before granting international competitors a licence to establish operations in the US.

var html = getInAdHTML("box",FTSite,FTSection,FTPage,FTIndustry); document.write(html);

The campaign, by the Chicago Mercantile Exchange and the Chicago Board of Trade, is aimed at Eurex, the electronic marketplace controlled by Deutsche B�rse of Germany, which has become the world's largest derivatives market.

Eurex has announced plans to establish a significant US presence to trade options and futures contracts. It recently signed a clearing agreement with the Board of Trade Clearing Corporation to process transactions�in its new US marketplace, due to be launched in early 2004.

Opposition from the Chicago exchanges to the prospect of a trading licence for Eurex was expected.

The two on Thursday�took their case to the congressional subcommittee on general farm commodities and risk management in hearings about the implementation of the commodity futures modernisation act, which opened the way for greater competition in trading commodity futures.

Without naming Eurex, Terry Duffy, CME chairman, said competition was welcome but that "no consideration was given to the question of foreign control of a US-based derivatives exchange", which could encourage hidden subsidies to gain market share and "abusive practices" such as paying customers to use its system.

Goldilox:

fiscal monopolies die hard!

CoBra(too)

(06/20/2003; 17:03:18 MDT - Msg ID: 104818)

Goldilox - re Eurex

No way to prove or disprove the alledged superiority ... personally, I wouldn't give any credence to the story.

While it may be true that DB and UBS are running huge derivative books - none comes close to JPM's 26 Trillion dollars of notional (un?)-value.

Though, the leading indicators are (ab-)using the revival of the SM bubble is more than true ... cb2

Goldendome

(06/20/2003; 17:31:31 MDT - Msg ID: 104819)

Consumer defaults and credit growth

From USA's Afternoon Gold report:

U.S. mortgages in foreclosure climbed to a record high in the first three months of 2003 as job losses and personal bankruptcies forced more people out of their homes, a mortgage industry group said on Friday. Home loans in the process of foreclosure climbed to 1.2 percent of all mortgages in the first quarter, beating the previous high of 1.18 percent set in the fourth quarter of 2002, the Mortgage Bankers Association of America said.

Also from a seperate article Matthew Ingram reports that:

Household debt levels rose faster in the past six months than at any time since 1986, while household debt relative to income hit a new high: 111 per cent.

-------------------comment:
Consumers continue to pile on new debt and are suffering increasingly from it's effects. As job losses continue and unemployment continues to climb...heaven help us. Any uptrend in interest rates will flatten a lot more borrowers as well as any apparent statistical uptick in the U.S. economy. --------Gdome

TownCrier

(06/20/2003; 18:44:02 MDT - Msg ID: 104820)

Gold overdue for $2,700? A graphical narrative that might not seem so far fetched...

http://www.usagold.com/goldenchalkboard/gc_punting.html
I put this one together this afternoon. May be good for a smile as you ponder the heady possibilities. Click url.

(I will proof-read it later. Thank you.)

R.

R Powell

(06/20/2003; 19:59:24 MDT - Msg ID: 104821)

Towncrier

POG at $2700? Okay, many are pointing at even higher numbers. Hamilton's, if my memory is correct, is closer to $7,000.

How else to handle the debt problem than to devalue the money? What price limits are reasonable (or unreasonable) for anything (tangibles) that will hold value during an accelerated rate of monetary devaluation? How small an amount of the total wealth now at risk of severe devaluation that will seek shelter against the storm can the gold market absorb without at least tripling the POG? How fragile are the restraints (safeguards) to prevent such an event from occuring? How numerous are the potential triggers, right now! that could precipitate $100/cup for our morning coffee?

You don't need to employ the tongue-in-cheek when talking about $2700. I've seen the cost of a well built house increase X 50 during my lifetime. I'll nod in agreement at POG equalling $2700 and then some but I can't resist asking one question. When? ;>)
Happy weekend
Rich

glennh10

(06/20/2003; 20:26:11 MDT - Msg ID: 104822)

Re: R. Powell / Silver

R. Powell, you stated,
"the POS is not now nor has it been in the past especially succeptable to any fundamental information. After all, there has never been any shortage of silver..."

Exactly. That's why so many people seem to assume (wrongly, I predict) that it will NEVER "go anywhere"; when, in fact, it's got that element of sudden change and surprise that also, and more likely, will follow from exactly those stated conditions.

The future, whether it be the dollar, gold, silver, stocks, bonds, real estate, and so on, ain't gonna follow from the past and the present. There's no linearity leading into the future.

Black Blade

(06/20/2003; 21:45:36 MDT - Msg ID: 104823)

America is Bankrupt

http://www.financialsense.com/Market/wrapup.htm
Snippit:

It's a sobering thought. Are we really broke? The answer is clearly, YES, but living on borrowed time and money. A recent study was done by Jagadeesh Gokhale and Kent Smetters which measures our government's current debts and projected debts based on the proposed federal budget and revenues for 2004. By extending the numbers in constant 2003 dollars, they have come to the conclusion that the Federal government is officially insolvent to the tune of $44 trillion. You might ask, "Who are these guys?" Mr. Gokhale is the former Senior Economic Advisor to the Federal Reserve Bank of Cleveland and Mr. Smetters was recently on staff as the Deputy Assistant Secretary for Economic Policy. These fellas know what they are talking about! Additionally, the numbers they used are from the U.S. Department of Treasury.

Black Blade: That little snip is by Mike Hartman on tonight's "Market Wrap Up". It is funny and sad all at the same time. Obviously sad because we should have never been in such a situation and yet funny because it is only the nature of man to vote himself the riches from the treasury without regard for who pays. We are now on a treadmill that spins ever faster and there is no end until the gears are fried and the whole contraption seizes up and melts. There is no way in hell that this debt will ever be paid off. It is simply impossible. Time for George W. Bush and John Snow to walk own to the courthouse and file Chapter 11 on the United States. I wonder what the bankers that own the Federal Reserve think about all this? Too big to fail maybe? Meanwhile the current account, trade, and budget deficits soar to new record setting levels day by day with no end in sight, and the Government just borrows and spends like drunken sailors on shore leave. "Interesting Times"

mikal

(06/20/2003; 22:00:20 MDT - Msg ID: 104824)

@Town Crier

I really enjoyed that Chalkboard entry about the three-time golden champion that stays on top of his game, never hanging up the gloves. Here's a big hand for your performance!
Re your: "...we now see LBMA clearing statistics at record lows(half the volume)..."
This implies various things, some too exoteric for me. But it seems another knockout is in the cards? You'd think with the LBMA dealing their own hand all these years, they'd never expect to lose on three of a kind. If you were betting on a three-time champion, would you go for broke that LBMA goes down by unanimous decision? And does LBMA get a rematch or does he kiss the canvas down for the count?
Thanks and regards.

Black Blade

(06/20/2003; 22:08:40 MDT - Msg ID: 104825)

GM to Sell Billions in Bonds for Pensions

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=1&u=/nm/20030620/bs_nm/autos_generalmotors_dc
Snippit:

DETROIT (Reuters) - General Motors Corp. (NYSE:GM) said on Friday it will sell about $13 billion of bonds, one of the largest corporate debt offerings ever, to help shore up its U.S. pension plan which ended last year underfunded by $19.3 billion.

Black Blade: Normally I would think of shorting a stock on this kind of news. However, this stock market is goofy and of course GM shares rose today. GM is not alone either. Several "Blue Chips" are in this same club as pension plans fall apart under the weight of hefty losses.

Black Blade

(06/20/2003; 22:10:24 MDT - Msg ID: 104826)

Freddie Mac goes big on derivatives

http://money.cnn.com/2003/06/20/news/companies/freddie_derivatives.reut/index.htm
Mortgage lender grew derivatives trading position by 46% to $700 billion compared to a year earlier.

Snippit:

NEW YORK (Reuters) - Freddie Mac, the government-sponsored buyer of mortgages under investigation for its accounting, grew its derivatives-trading position to nearly $700 billion through last September, up 46 percent from 2000, according to a report Friday.

Black Blade: Weapons of Mass Financial Destruction. Or as Warren Buffett calls them � "worse than sewage". The worst part is that no one really knows how they really work or understands them enough. The smartest minds in the business at Long Term Capital Management almost brought down the economy with huge outsized derivatives that went wrong according to Alan Greenspan who engineered a Wall Street bail out.

mikal

(06/20/2003; 22:41:55 MDT - Msg ID: 104827)

@TownCrier

Upon rereading your thought-provoking analytical essay, I see I added the word "now" to your excerpt where it never was, and additionally, overlooked your larger LBMA context and connotations. So from your Golden Chalkboard, here it is presented:
USAGOLD - Centennial Precious Metals, Inc. - Serving Gold Investors Since 1973
(HomePage)(Buy Gold)(Gold Coin Selections)(Daily Market Report)(MK's Gold Commentary)(First-time Buyers)(Gold Discussion)(Gold Trail)(Gilded Opinion)(About Us)
Want a FREE Information Packet on gold ownership?
The intention of The Golden Chalkboard (click for INDEX) is to give me (i.e., Randy, your sitemaster) a chance to editorialize a bit amid the business of my more mundane duties in order to feature a focused selection of data or commentary (of my own choosing) that I think will be useful to enhance your gold and monetary understandings. When you've suffered enough, click here to visit the discussion forum.
You may note I've named this file "gc_punting.html". You'll soon see why.
Gold overdue for $2,700?!
A graphical narrative that might not seem so far fetched...
With the official scrapping (between 1971-73) of the last vestiges of the Bretton Woods "gold standard", the long-time price level of $35 reached a temporary new plateau at nearly triple the old price to $100.
Four years later (1977) began a spectacular new rise, reaching what appeared to be a temporary new plateau of triple the old price to $300.
About ten years later (1987) began what appeared would be a decisive new rise that, instead of heading to a higher plateau, was remarkably killed in its tracks. Remarkable for several coincidental reasons. This was the time of the stock market crash of 1987, Alan Greenspan was newly appointed as chairman of the Federal Reserve Board of Governors, S&L's hit the skids, and use of commodity derivatives were just then coming into vogue in ever-more widespread use for financial "engineering". The LBMA was formed December of 1987, bringing to the bullion clearing market a level of coordination and "efficiency" that arguably had been abandoned by central banks in 1971-73 with the dissolution of the Bretton Woods agreements.
Had the trends continued, by the time of the 1991 Persian Gulf War, (and the European signing of the Maastrict treaty), the price of gold might normally have been reaching its initial spiking phase, traveling upward through its new plateau at triple the old level to perhaps its new temporary level of $900.
Nearly 25 years have now passed since that 1987 anomaly of events and prices might have lifted gold (but didn't) to my theoretically projected $900 plateau. [An aside: The duration of each plateau in this examination of trends seems to be about 2.5 times the duration of the previous level in the floating (post Bretton Woods) regime. i.e., Four >> Ten >> Twenty-five]
A look at current events reveals the following sparks to light a fire under gold. The 1997 Asian contagion currency crisis reminded everyone of the distinction between depreciating paper currency and real gold wealth. The collapse of Long Term Capital Management (a single hedge fund) after the Russian debt default was said (only safely afterward) by Fed officials to have risked collapsing the world financial system. The 1999-2004 European Central Bank Agreement on Gold putting a curb on their participation in gold leasing, and we see LBMA clearing statistics at record lows (half the volume) since first going public with its 1,000 tonne-per-day info in 1997. Mining companies are weening themselves off gold derivatives/hedging. To challenge U.S. dollar as a reserve asset we now have a fully launched euro under Maastrict's designs for EMU. We have had the recent bursting of arguably the largest stock market bubble of all times, and Fed officials speaking openly of printing copious quantities of money and buying long-term bonds while lowering interest rates to 50-year lows. Bolstering gold itself, within the last year we now have a near fully liberalized physical-gold-only market in China. The World Trade Center was destroyed by terrorists, temporarily shutting down financial markets in 2001. The U.S. acted (nearly-)unilaterally to bring about a regime changes in Afghanistan followed by Iraq (which was done under protest of the world community), followed by a little verbal sabre rattling to test the waters toward a similar fate for Iran. The price of oil tripled from recent lows.
When gold shakes itself from current MANAGEMENT, reaching its long-overdue plateau of $900 is simply a no-brainer, and beyond that we seem now to be quite due to begin the upswing for yet the next tripling past that $900 level to the following one at $2,700. Frankly, I find even that lo estimate to be a rather modest one in light of the dollar's current depreciating state and its utter risk of losing reserve status -- something that wasn't at stake at any previous stage of this step-wise trend.
Just a few quick thoughts off the top of my head that may be worthy of your fuller consideration.
--June 2003
Randy S.
sitemaster@usagold.com

mikal

(06/20/2003; 22:48:12 MDT - Msg ID: 104828)

@TownCrier

Upon rereading your thought-provoking analytical essay, I see I added the word "now" to your excerpt where it never was, and additionally, overlooked your larger LBMA context and connotations. So from your Golden Chalkboard, here it is presented, your commodity derivatives expose, LBMA, gold...
Excerpt:
"The LBMA was formed December of 1987, bringing to the bullion clearing market a level of coordination and "efficiency" that arguably had been abandoned by central banks in 1971-73 with the dissolution of the Bretton Woods agreements.
Had the trends continued, by the time of the 1991 Persian Gulf War, (and the European signing of the Maastrict treaty), the price of gold might normally have been reaching its initial spiking phase, traveling upward through its new plateau at triple the old level to perhaps its new temporary level of $900.
Nearly 25 years have now passed since that 1987 anomaly of events and prices might have lifted gold (but didn't) to my theoretically projected $900 plateau. [An aside: The duration of each plateau in this examination of trends seems to be about 2.5 times the duration of the previous level in the floating (post Bretton Woods) regime. i.e., Four >> Ten >> Twenty-five]
A look at current events reveals the following sparks to light a fire under gold. The 1997 Asian contagion currency crisis reminded everyone of the distinction between depreciating paper currency and real gold wealth. The collapse of Long Term Capital Management (a single hedge fund) after the Russian debt default was said (only safely afterward) by Fed officials to have risked collapsing the world financial system. The 1999-2004 European Central Bank Agreement on Gold putting a curb on their participation in gold leasing, and we see LBMA clearing statistics at record lows (half the volume) since first going public with its 1,000 tonne-per-day info in 1997. Mining companies are weening themselves off gold derivatives/hedging. To challenge U.S. dollar as a reserve asset we now have a fully launched euro under Maastrict's designs for EMU. We have had the recent bursting of arguably the largest stock market bubble of all times, and Fed officials speaking openly of printing copious quantities of money and buying..."

mikal

(06/20/2003; 22:53:54 MDT - Msg ID: 104829)

@TownCrier

Msg 104828 is intended, not glich msg #104827. Thank you.

slingshot

(06/20/2003; 23:40:25 MDT - Msg ID: 104830)

Going to the Dog Track

R Powell are you out there !Well, I'm smiling tonight after reading Towncrier's post with gold going to $2700. And why not? But the Silver Dog still runs behind the pack. At an all time high of 80 ounces of silver to 1 ounce of gold would for sure put the nail in the coffin for silver. I do not believe so. Yes,Gold is the lead dog, but when gold reaches new heights the only thing left is silver. Silver is the last dog out of the box,with 99 to 1 odds before the closing of bets. You would be surprized as the odds at the last moment drop.
There Goes Rusty! So, if the other dogs are Real Estate, Bonds, Treasuries, Stock Market and what have you. Silver may not come in first, but will sure place. Guess what, your a winner.

If this does not make sense, why are we buying Silver Eagles?

Slingshot--------------<>

Waverider

(06/20/2003; 23:52:57 MDT - Msg ID: 104831)

Davis' finance director suggests annual vehicle license fee to triple

http://www.signonsandiego.com/news/state/20030620-9999_1n20cartax.htmlSnip:
SACRAMENTO "Gov. Gray Davis' top budget aide suggested yesterday that the annual vehicle license fee will soon automatically triple, costing the average motorist $158 and yielding $4 billion for the state. The state obtained an $11 billion one-year loan this month, but state Controller Steve Westly has warned that the state will run out of cash by September and be unable to borrow more if a new budget isn't enacted. Peace said the state is in the unprecedented position of having exhausted its internal borrowing resources, as well as the bank-backed guarantees needed to obtain loans from outside sources. "We have never been in a place before where we are literally running 100 percent on other people's money," he said.

slingshot

(06/21/2003; 00:17:08 MDT - Msg ID: 104832)

Taxes

California WoesThose who have seen the movie "Popeye" might remember the Taxcollector who rode around on a tricycle taxing everything in sight. Even that poor seaside town had it own assayer. He encounters Whimpy for a Hamburger Tax which at the time does not have a Hamburger and states,I Will gladly pay you Tuesday for a Hamburger today".

Just have a picture of the Governor of California on a Tricycle.
Slingshot-----------<>

Black Blade

(06/21/2003; 00:37:42 MDT - Msg ID: 104833)

High natural gas prices resonating - May last years, lawmakers told

http://www.chron.com/cs/CDA/ssistory.mpl/business/energy/1960403
Snippit:

WASHINGTON -- High natural gas prices are clobbering a number of American industries, from petrochemical makers to fertilizer producers, and could reduce the nation's overall economic growth, energy experts warned Thursday. Appearing before the House Subcommittee on Energy and Mineral Resources, analysts warned the jump in gas prices -- up nearly 80 percent in the past year -- could mean elevated prices for years to come. Edward Kelly, head of Wood Mackenzie Global Consultants' North American gas and power consulting business in Houston, predicts prices could remain at elevated levels for the rest of the decade and perhaps even longer.

Manufacturers are seeing their costs surge at a time when passing them on is extremely tough. Dow Chemical, for instance, saw its costs jump a whopping $650 million in the first quarter of the year compared with the last three months of 2002. Farmers are spending an extra $10 to $15 an acre in higher fertilizer costs, the American Farm Bureau estimates, while consumers could spend hundreds of dollars more this winter heating their homes. If the high prices continue, the nation's gross domestic production could fall anywhere from 0.6 percent to 2.1 percent short of where it otherwise would have been, said Stephen Brown, director of energy economics and microeconomic policy analysis for the Federal Reserve Bank of Dallas.

Black Blade: There is a lot of behind the scenes activity in the world of domestic energy. Next week Energy Secretary Spencer Abraham will meet with members of the National Petroleum Council to discuss the NatGas supply problem. Last week's NatGas injection was touted as a record, however, we now learn that the injection data was revised downward as some of that gas was reclassified from working gas to base gas. Another item that was learned is that there has been quite a bit of pipeline stripping (reverse line pack) where gas was taken from pipelines to meet high demand by storage operators rather than kept to maintain pressure. Obviously this is a very temporary fix that could last only another week or two at most. Next week temperatures are expected to rise into the 90s on the east coast as Summer officially arrives today. There are other problems that are expected to play on energy such as several nuke power plants are shut down for maintenance and repair with some out for the Summer as boric acid corrosion and minor containment leaks have been discovered after the NRC asked operators to check for this potential problem after a boric acid leak was discovered at an Ohio nuke last year. If there truly is an economic recovery in the "second half" as the Wall Street bulls predict, then it will be short lived as energy costs soar sapping corporate bottom lines and consumers pocketbooks. Fortunately we have a deepening economic recession to lessen domestic energy demand. With rapid production declines in mature fields, continuing land access and permitting issues, relatively low rig counts, inadequate pipeline capacity and infrastructure, an "economic recovery" is highly unlikely.

Topaz

(06/21/2003; 01:18:03 MDT - Msg ID: 104834)

@Socrates...prepare to be rationally exuberated.

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12This Bond/Dollar thing is SO intriguing...a 5 Day straight loser in the LongBond dragging the DX up and away, Go figure!
The repat shows up directly after Q bookeeping and if they can keep it (dx) sub-94 'till the 30th, this July "pop" could be a doosie. If they can't...so long SM's!

To reiterate, it's NOT a currency thing...it's a lack of confidence thing imo.

Belgian

(06/21/2003; 01:21:55 MDT - Msg ID: 104835)

@ Cobra II

I fully agree with your remark made on Trichet. But,...we can't possibly judge what he, did or didn't do, with Credit Lyonnais, France's state bank. And therefore we should certainly NOT add him to the list of heros. As a matter of fact, there are NO heros out there.

Trichet "might" bring us closer or faster to The Free Gold market, wich I would welcome as an "honest" goal. Hey, being honest might be even convenient, at times !?

We must not forget that France always played an important role in centuries of monetary history. Yes, La France, still has her imperial reflexes, wich might (are) be reinvigourated with Euroland's probable successes and the irreversable competitive evolution with the Anglo-American dollar-adversary. It is in this context that Trichet might play a much more agressive role with Euroland's ECB, and the Gold-factor within it !? More latin (Gold)passion above the germano-dutch sense for reason !?
Let us not forget that old aristocat Giscard d'Estaing, still going strong, is an outspoken Eurolander of the very first hour (25 yrs ago). Not his kingdom for a horse, but his chateau (castle) pour de l'or (for Gold).

Bin ich ein romantiker, Cobra(too) ?

Some addemdum to Towncrier's (excellent) synthesis : R.A.Mundell - Columbia University : The European Monetary System 50 years after Bretton Woods. A comparaison between two systems.
http://www.columbia.edu/~ram15/ABrettwds.htm (also in CPM-archives, somewhere) Great weekend reading (study) !

In the 1960s the US and Europe were (already) on a collision course with respect to the International Monetary System - What Prime Minister Harold Wilson of the UK called a "MONETARY WAR" !. BUT IN THE 1960s, AN INCREASE IN THE PRICE OF GOLD WAS RULED OUT *** mainly for political reasons *** !!! >>> !!!

Dearest forumers, Goldmeisters...WE ARE APPROACHING THE GOLD RAPIDS !!! Do you hear those thundering sounds ?
Not "if" but when and how !

Belgian

(06/21/2003; 02:46:44 MDT - Msg ID: 104836)

THE PRICE OF GOLD.....

There is a *frighthening* general consensus as to "HOW" the POG will eventually evolve ! Frighthening because of the contradictions within the POG-reasonings. All accept that the gold market *is* controlled by paper derivatives and that there is no problem of excess physical gold ! And in such an environment, the POG will "gradually" edge up in dollar price ???

Goldprice control (containment) is broadly condemned, but the POG should go up in a disciplined, controlled fashion and a huge, sudden, gapping explosion of the goldprice seems conveniently excluded !?

Why is this so into the minds of the general gold-public ?

The general gold public takes it for granted that ALL PAPER GOLD will ALWAYS perform as it did for the past 30 years !
Goldmine shares, gold derivatives and NOW the coming gold-ETF (exchange traded gold fund) !?

But, what if...the past gold-management becomes history and Gold goes FREE in one form or another ???
Can you exchange...will you be able to barter your gold-paper for PHYSICAL in POSSESSION ??? This gold-ETF thing is adding to my suspicions that this is an effort to extend and broaden the paper-gold-management ! If POG goes kaboom, your goldETF will be settled in...right,...PAPER and NOT in Physical Gold!!! FORCE MAJEURE !!!

Note how hesitating the SEC is on this gold-paper "thing" and the discrete (reticent) attitude of the WGC towards the matter.

A/FOA has been warning us for such POG-complacency. I'm taking this more serious by the day ! And not in the least because of that gold-ETF thing coming up. Why else has Merryl Lynch given that subtle signal of their 1 tonne of Physical in Hand !?

Don't take the 1971 > 1980 POG-run (x25) as a model for the next, coming one ! On the contrary, we should elaborate on what "really" happened then (1971-1980) and what has changed now ! It is exactly here, on this kind of analyses, that goldbugs fail to bridge the gap and Gold Advocates don't want to run any risk with paper-gold, ANYMORE.
Thoughts warmly wellcomed. TIA.

Belgian

(06/21/2003; 03:54:09 MDT - Msg ID: 104837)

Physical Gold versus paper gold.....

60,000 tonnes of Physical Gold : 30,000 CB Goldreserves + 30,000 tonnes of private investment Gold x 350$/Oz = 600 BILLION $ versus 60 BILLION $ worth (?) in goldmineshares (paper-gold) still being able to convince goldphiles that they "OWN" part of that underground gold. One doesn't !

The visible + invisible amount of derivative paper-gold is a *flow* of, rufly estimated, equivalent of 2,000 tonnes per trading day. None (!!!) of this paper-contract-gold does exists with the purpose of Physical settlement ! Since this is NOTHING more than a gigantic "price" setting machine, one should not give this paper-gold any consideration in the context of Physical Gold settlement.
Just ignore it as the side show of the real Physical Gold trades !

Now, if and when, GOLD comes back into the monetary arena, as the renewed "anchor" for monetary stability...the price of Gold will-must, revaluate, "abruptly" and NOT progressively !

The past 100 years (!!!) of dollar-devaluation, had its periods of steady, progressive devaluation and a few devaluation-shocks. It was not the dollar-management itself, that caused these shocks, but those who were dollar-victims who forced these shocks. How many "signs" do we count today, to make the probability of an enormous dollar-devaluation shock, higly plausable !? How weak or strong are the present (willing) victims of the continued, present dollar-(mis)management...? And aren't we in the very process of a coup d'�tat against the dollar-standard ?

And who will be found ready to compromise on the dollar-standard much further, now that this coup d' �tat might be the coup de grace (final reckoning) of the dollar-standard !?

These "actual" pressing questions do make me VERY cautious (aversion) on any kind of paper-gold !
In the eventuality of a brutal POG revaluation, paper-gold will lose gigantically against the overwhelming force of the 60,000 tonnes of Physical Gold, already valued at 10 times the existing underground paper-gold. > !!!

That percepted plus-value of underground gold, in case of Gold's brutal revaluation, will be taxed as never before !
Cfr. the capital gain TAX-rewards for those who artificially inflate the stockmarkets and the TAX-grip on housing, artificially rising in prices, due to artificial interest rate debaucheries !
Place Physical Gold in Posession against its unworthy competitors and make your conclusions on the highly probable outcomes of the evolving global monetary situation.

The International Monetary System is under increasing stress as it was never before ! Don't run the risk of being smashed between the wall and its (fiat) wallpaper. Buffer the shock with soft Physical GOLD, inconveniently cheap, today...(smile Ari) !

The CoinGuy

(06/21/2003; 04:50:22 MDT - Msg ID: 104838)

Seems Washington has Quite a few reasons to be upset nowadays...

http://www.vheadline.com/readnews.asp?id=8613Snippit:
A move by Venezuelan President Hugo Chavez Frias to replace the US$ with the �uro is seen as upsetting Washington more than when Iraq's Saddam Hussein started using the �uro for oil transactions last November ...

Comment: The list of Countries running into/contemplating conversion to the Euro has been growing at a healthy pace.
I'd imagine the US can't attack them all?

The (physical) CoinGuy

The CoinGuy

(06/21/2003; 04:54:02 MDT - Msg ID: 104839)

Switch to euro may lead to global insecurity

http://www.malaysiakini.com/letters/200306180034650.phpSnippit:
The recent move by the Venezuelan president Hugo Chavez to replace the US dollar with the euro has generated as much anger as when former Iraqi President Saddam Hussein chose to exchange oil for the Euro last November, thereby sealing his fate.

Current resentment is caused by Venezuela's decision to barter its oil with thirteen other Latin American countries, denting the ongoing �Dollarisation� of South America.

Comment: Another take from the MalaysiaKini...

The CoinGuy

Great Albino Bat

(06/21/2003; 09:57:44 MDT - Msg ID: 104840)

The new Paper-Gold Scam: "Equity Traded Fund" in gold - "ETF".

Bill Murphy of GATA has not yet opened fire on the ETF. He is cautiously examining the plans for this share, which will "represent" a given amount of gold held for the owner of the share by the Fund. You can't exchange the share for gold, actually, unless you have more than 10,000 shares, in which case, you can go to London, knock on the door, and supposedly walk away with your 1,000 ounces. Each share will "represent" (in your mind, if not in REALITY) 1/10 of one ounce of gold held for you by the thoughtful people at the Fund.

RULE NUMBER ONE: NEVER GIVE A SUCKER AN EVEN BREAK!

The number of suckers is infinite. This ETF, which please note, ORIGINATES IN ANGLO-SAXON LAND, in other words, DOLLAR LAND, is another disguise for the wicked magicians who are having trouble containing the price of gold through LBMA and Comex. So, another disguise is appropriate! "Let's sell more paper gold - for another twenty years - to the suckers who will listen. There are more suckers - the ratio is about 50 to 1 - than thinkers. We'll play with the gold price for another twenty years. AFter that, we're outta here and who cares."

Sound the alarms, now, now!!

Stay away from another paper-gold scam! Don't touch paper-gold shares!

Thumbs DOWN on the ETF for the 1/10 ounce paper gold share.

"Tell all those you care about".

The fact that this "gold share" is getting any publicity AT ALL, the fact it is going big-time onto the NYSE, is a give-away for the fact that it is the preparation for another massive manipulation of the price of gold. If you think that Wall Street is going to give you an even break on these shares, this is a very good sign you are one of the suckers. In the good old Summertime.

So you have "gold shares"? Who has them? "Why, my broker has them..." Yes, he has your shares and the shares of 10,000 other suckers. And what does he do with them? "I don't know..." Well, I'll tell you: when he sees that the price of gold has gone up, he and the other brokers take your shares and sell them (short them) and drive down the price of "your" gold. Just like they do with your gold-mining shares. Then they buy the gold again, cheap. Meanwhile, you get desperate and tell your broker to sell your shares - which he already did, and thus he covers his short sale. Better go to Vegas, fella, at least the girls are attractive.

You want protection? Gold-mining stocks are very likely to dissapoint you, because even if you hold your own stocks in your possession, thousands of other investors do not, and thus, they allow the brokers, in bed with the bankers and the Feds, to short your shares.

You want protection? Don't be a SUCKER, keep your gold IN YOUR POSSESSION. There is no substitute!

The best guano from the GAB.

Druid

(06/21/2003; 12:04:16 MDT - Msg ID: 104841)

Belgian (6/21/03; 02:46:44MT - usagold.com msg#: 104836)

Belgian, I always enjoy reading your posts because it makes me smarter by the post. This is a very serious poker game going on here and everything will be just fine as long as everybody knows their role. It's the one player who may not get the memo one day and kind of walk, thereby creating some sort of chain reaction that scares me, much like the ending of "Resevior Dogs." It's my best guess that the not so obvious barter(physical) market is in place and pretty much spoken for and the obvious paper market is in it's final stages of implosion and the architects from on high are trying to integrate these two systems without some really bad discontinuity taking place. This is what keeps me grabbing my b.. late at night in total fear and shock as to what these geniuses have in store for us.

Druid

Chris Powell

(06/21/2003; 12:05:56 MDT - Msg ID: 104842)

A great interview with Sprott's John Embry

Sprott Asset Management President John Embry tells
a national TV audience in Canada (and now you)
that the gold price is "actively managed" by the bullion
banks but that they are going to lose control. A great
interview in two parts, compiled by GATA:

http://groups.yahoo.com/group/gata/message/1556

http://groups.yahoo.com/group/gata/message/1557

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

Cavan Man

(06/21/2003; 12:50:12 MDT - Msg ID: 104843)

What a bunch of baloney!

"tyranny and oppression" financed for years by the American taxpayerBush Touts Successes in Rebuilding Iraq
Sat Jun 21,10:11 AM ET

By JENNIFER LOVEN, Associated Press Writer

WASHINGTON - Ten weeks after the fall of Saddam Hussein (news - web sites)'s regime in Baghdad, President Bush (news - web sites) portrayed U.S. goals in Iraq (news - web sites) � from capturing chemical and biological weapons to restoring basic services � as works in progress with a few early successes.

First, we are working to make Iraq secure for its citizens and our military," Bush said in his weekly radio address Saturday. "Second, we are working to improve the lives of the Iraqi people after three decades of tyranny and oppression."

This is American foreign policy. American foreign policy impacts the physical gold market.

Liberty Head

(06/21/2003; 12:55:34 MDT - Msg ID: 104844)

Calif, - Where Energy Is Mixed With Insanity

http://biz.yahoo.com/rb/030621/utilities_pge_1.htmlBankrupt Pacific Gas & Electric is fighting with bankrupt Calif. state government over consumer rates. It seems the state wants to force PG&E to fail as a pretext for greater government control of the energy market. The only problem is, the state is more banckrupted than PG&E. Too bad for us, failing governments never go out of business.

The wisdom of physically holding gold metal also applies to energy. Maybe more Californians will be storing tanks of gas as a survival necessity.

Gold and Gas, get you some.

Cheers

Old Yeller

(06/21/2003; 14:07:12 MDT - Msg ID: 104845)

Gold ETF

It's fairly obvious to me that the "bad guys" could use
these as a way to backstop gold derivatives,which are then
used to contain the POG during periods of market stress.

The key is converting "gold on account" to real gold,by
creating fear of a gold bank run.The ETF is just a new
tool to keep that fear at bay.Just ANOTHER vault for bullion bankers to raid.

Buy real gold and take it away from them,they do not need any more enabling schemes,it's time for a real intervention.

Get physical,and get even.

21mabry

(06/21/2003; 14:17:54 MDT - Msg ID: 104846)

John Embry

Chris Powell, Is that interview on audio at the Gatta site or on the ROBtv site. thnx 21

Cometose

(06/21/2003; 14:41:13 MDT - Msg ID: 104847)

What a BOND MARKET

6 out of 10 banks have 50% of their capital tied up in Mortgage backed securities......that's the rumor I heard posted last week .....

aside......I had a friend that tried to built an international business on projects and sought funding for them from the US and he developed quite a number of subsidiaries based on homes for various projects that he would find and then seek sponsorship for..There were 30 subsidiaries at on point, if memory serves...
At one point , he decided to hire a consultant to come in and give him advice on how to proceed...Canton Odonnell told my colleague after assessing the situation ......that he had built an OCTOPUS....that has many tentacles and that the structure was frought with many vulnerabilities.

My freind and colleague responded by saying that " he was not afraid of any OCTOPUS"......

I thing the first time that I heard of systemic risk was on this forum.....

In light of all of the smoke we have seen coming out of the newsrooms about FREDDIE MAC AND FANNIE MAY and in light of the statistic given above about these mortgage backed securities...that FREDDIE AND FANNIE have been spinning off to these banks....a question comes to mind...

what percentage of the equities markets are laced with capital from these mortgage backes securities...
the information I recieved last week said these mortgage backed securities doubled last year to 2.6 trillion financed from 1.3 trillion the year before...these are huge numbers that cumulatively may represent a huge chunk of the value of the SM indexes.....

Martin Wiess father said he knew that the SM of the 1929/30 era was over by using the banks "selling their assets" as a barometer .....Banks assets are their loans.....This was the way the banks protected their capital ...by selling off their assets......My how things have changed...This indicates a huge complacency on the part of the banks today at curbing their risk....
which may all be interest rate related....
their risk now is that interest rates will go up .....so they have hedged themselves in that way to suppport the greatest finanicing frenzy in history which has driven price of all real estate skyward....
tHe interest rates go up ....the mortgage backed securities go down ....taking the whole stockmarket heavily weighted in these down at an accelerating rate....
the banks losses in the mortgage backed securities are offset by their derivitives bets.....
in the meantime the economy continues to falter credit contracts the real estate market collapses....the banks that caused the imbalances make out like bandits and the individuals that outlived their means banking on the false hope that the FED WOULD /???/COULD SAVE THE DAY ...lose their homes , pensions , etc....in what looks like and economic accident.....

this is a REAL ESTATE supported (funded/capitalized) stock market (30-50%)
Now is he value of that real estate determined by the value of interest rates ......yes because the level of interest rates determines whether the debtors can make good on the mortgage payments.....does the value of the real estate go down because the people default on their loans em masse or does it go down because he securities backing those mortgages to down as the interest rates rise......

Why would interest rates rise? because the bull run in bonds is over and it's time to seek greener pastures for profits resulting in a mass exodus from the bond market causing price of issuing these bonds (ie interest reates ) to rise..( and all those mortgage backed securities are interest rate sensitive as to their value just like their sisters in the bondmarket).....I don't know how our whole financial system and markets could have been set up to be more vulterable ....than they are now....... where is the diversification...........

Wasn't the reporting error at WORLDCOM revised from losses of 1.3 to 13 billion.......I think there's another avalanche of a problem out there getting ready to rain down from the lofty heavens above....in BABYLON.......

It's good that there is long fuse on the tnt that's gonna bring down this avalanche .....otherwise i'd be too slow to get positioned properly out of paper and into GOLD....

I have finally gotten through all the bureaucratic red tape that was required to change my Life Insurance (last vestige of paper)trustee and executor so that I may turn my paper insurance (LIFE) into real insurance to accompany the sure calamity that faces us in the future......

In 1906 there was Bear Market cycle similar to the one we are in ....the earth quake in San Francisco brought about capitulation in that market at that time.... We won't need and event like that .......just the truth coming to the surface will be enough ...If the truth is completely suppressed by the government ,, perhaps nature will give us a physical calamity as substitute for the TRUTH......
Tim WOOD says that in markets like these , it is uncanny how some new negative event in a BEAR MARKET always seems to precipitate the markets fall.....Perhaps it will be CANADA falling into the ocean......Incidentally , there were 220 earthquakes last week in California.....it's called "boils" and these types of numbers have been ongoing for a while....I understand that there is a lot of Magma slugging around underneath the earths surface over on the west coast....and some notable activity in OREGON and Washington...There is also rather auspicious solar activity in the media of Solar Flared coming off the SUN at this time...which is said to have a large impact down here....and HOLLYWOOD has done an overwhelmingly effecient job of carving out a place for ACCEPTED SATANIC RITUAL CULTURE in its handling of HARRY POTTER, accompanied by
wizardry and majik promoted and many of the video games played by our young people and in "Magic" Card GAMES that are played by them at our schools coast to coast....

Watch the FIREWORKS......but don't wonder WHY??????

THIS IS BABYLON!!!!!!!!!!!

Markets like STABILITY ....Say goodbye to that notion...
BUY GOLD!!!!!!!!!!

Cometose

mikal

(06/21/2003; 14:48:47 MDT - Msg ID: 104848)

Robtv interview

I see John Embry's really reluctant to put his reputation on the line by being too bullish on calling the future POG. Like his mention that he would like it if we should see $800-$1000 by decade end. And by saying "$500 in 18 months" he tips his hand to me anyways, that this gold market won't pull any punches.

USAGOLD / Centennial Precious Metals, Inc.

(06/21/2003; 15:13:57 MDT - Msg ID: 104849)

A solid gold education available directly for $5.95

http://www.usagold.com/cpm/abcs.html

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.

Goldilox

(06/21/2003; 15:47:09 MDT - Msg ID: 104850)

US Mortgage Forclosures hit new high

http://www.financialsense.com/stormwatch/main.htmsnippit:
Fri June 20, 2003 02:48 PM ET
By Richard Leong

NEW YORK (Reuters) - U.S. mortgages in foreclosure climbed to a record high in the first three months of 2003 as job losses and personal bankruptcies forced more people out of their homes, a mortgage industry group said on Friday.

Home loans in the process of foreclosure climbed to 1.2 percent of all mortgages in the first quarter, beating the previous high of 1.18 percent set in the fourth quarter of 2002, the Mortgage Bankers Association of America said.

Mortgages entering the foreclosure process rose in the quarter to 0.37 percent from 0.35 percent in the fourth quarter.

Belgian

(06/21/2003; 16:04:38 MDT - Msg ID: 104851)

GAB/DRUID/COINGUY...

GAB : Glad you said it a bit "stronger", about that EFT-thing ! I followed the promotion of it, this week on CNBC, and the message/bottomline, I distilled from it is...THERE IS LESS AND LESS AVAILABLE PHYSICAL GOLD...already now and certainly further down the future. "THEY" know that the dollar-printing is a 100% guarantee for an increasing shift of attention towards Gold. And they know that the dollar-printing MUST increase continiously. The US needs a 2 BILLION confetti inflow simply to finance its record current account deficit (more import than export). Not only the dollar-currency, the dollar-reserve, but America's credibility is at stake now. Not Weimar but dollar-mar IS happening ! If more confetti flows to the euro and non America stops to buy US-debt...the FED will print and buy it themselves. Said by A/FOA already 3 years ago !

This is NOT a temporary "blip" but a "systemic" inevitability.

A FREE GOLD MARKET will take away the fractional reserve aspect from fiat...rising mountains of CONFETTI !!! That's why a Free Gold market is an inevitability !

With the ETF, the goldmines are saying as much as that they are a paper-gold-derivative ! Look at the extreme poor earnings of many mines, if any ! Now that the cost of capital (interest rates) are less than its return.

Allow me to add another astonishing figure of 400 BILLION $ per year on US militairy machine, and increasing !
Soon we start counting in TRILLIONS of dollars instead of the old familiar Billions.

Druid : No need to live in fear and shock, Sir ! See how Old Yeller is living in total harmony with his...Yellow stuff in hand.

CoinGuy #104839 : Your title : Switch to euro may lead to global insecurity.
Are you suggesting that the dollar-standard is going to survive this growing dollar-aversion ? Is the attention that the euro AND Gold do enjoy, a temporary (speculative) flirt as those currency/Gold moves of the past ? I don't think so, Sir.

Staying *with* the dollar and speculate on another paper POG run, might, most probably, increase global insecurity. The slow flight into euro and Gold, looks like a temporary stabilator (dollar-cushion) to me. A primary stage of orderly dollar-unwinding that leaves room for a gentle declining dollar attachment. Real global insecurity will be met somewhat further down the dollar-line. When price-inflation gives way to an escalating Hyper-price inflation.
The present "relative" calm on the different financial fronts, makes it possible to fool us with idiotic "deflation" theories of all kinds, whilst dollar confetti creation goes on a 9%/yr, ritme and "Global" overcapacity + the $-debtberg are at the real origin of universal (selective-!) price-declines (price-deflation).

It is the US$ (currency = standard) that is the most vulnarable in this structural-systemic, global malaise !
And it is this dollar-vulnarability that is enormously accentuated, this time, because of the existance of the euro as a possible alternative. This MUST be the main reason why the dollar has landed in perpetual over-printing !? Will see if this is a correct diagnosis. US elections are 17 months away. Bush will do everything to get re-elected. On the monetary-financial-economic and geo-political fronts, all together ! A gigantic job ! And I don't see many volunteers to carry the burden of the probable extended war-plans, taking place in a contracting global economy.

And finaly, I think that the dollar flight into the euro alternative is a temporary damper on the POG. Without the euro, POG would already have exploded (Gold as only alternative) and the deep malaises would already have been fully "exposed" and acted upon with drastic measures!

That's why I had some difficulties with the full meaning of the title of your posting.

R Powell

(06/21/2003; 16:49:14 MDT - Msg ID: 104852)

Equity Traded Funds

Belgian, from post 104836.....

"But, what if...the past gold-management becomes history and Gold goes FREE in one form or another ???
Can you exchange...will you be able to barter your gold-paper for PHYSICAL in POSSESSION ??? This gold-ETF thing is adding to my suspicions that this is an effort to extend and broaden the paper-gold-management ! If POG goes kaboom, your goldETF will be settled in...right,...PAPER and NOT in Physical Gold!!! FORCE MAJEURE !!!"

My thoughts: If I were to buy shares of IBM, I'd be happy if the POC (price of computers) went up and IBM's profits therefore also went up but I wouldn't expect to convert my shares into computers. Likewise, General Motors or Ford shares can not be redeamed for a car. Shares of General Mills can not be settled for boxes of cereal. Money invested in any equity traded fund is no different than money invested in any other company, it is done with the hopes that the company prospers and the share price increases. In this gold ETF case, a higher price of gold should add value to shares of ownership in a company holding gold. Dividends paid are also a nice extra but settlement or conversion of shares into whatever goods or services the company produces is not usually possible. I'm surprised that any conversion, (shares for physical) regardless of the monetary amount, is even possible. I'm not at all surprised that the cost of such a conversion is probably much greater than simply calling Michael's CPM for conversion of fiat into physical. ETF ownership isn't about acquiring physical metal.

Mining company shares, ETF shares, almost all futures contracts and options on the same are purchased with money and settled with money. How do you see a force majeure? I'd always thought of the "Force Majeure" as a default of a specific payment. The buying and selling of ETFs will transpire through an exchange (Dow, Nasdoggie, etc.) with investors determining the price in cash. What am I missing here?
Happy weekend
Rich

The CoinGuy

(06/21/2003; 17:00:48 MDT - Msg ID: 104853)

Belgian: To the Contrary my good sir...

I only posted the partial title posited by the author from this article.

The supposition was quite clear. In this phase of the decline in the $USD index, I see grasping of straws has become the norm(how could it fall so far so fast, I hear echo from CB's.), yet we are on the path as outlined on these very pages. What I have observed, is the world is clear on its intent to subvert hegemony through the US dollar, and is quite adament to change to the new reserve. When the 3rd world starts looking in this direction it is time to take notice, especially when it is from the oil regions of the 3rd world. For those who haven't taken steps, we are very late in the game.

I will also mention your quote: "Staying *with* the dollar and speculate on another POG run" sentence caught my interest. Those finding security in the shares, will soon realize they have been able to take advantage of this "transition phase" we have been witnessing. The future will not be so kind, as their profits are in a declining reserve who's value is becoming increasingly suspect, the world has noticed this, why haven't the Americans? Making gains in shares, only to lose the purchasing power afforded by their currency, a fools game in my opinion, and I will add the wish of good luck if you plan to stay even.

All of this talk of going to Iraq for the oil, but not even a grumble of going in "to protect" the dollar reserve? Hmmph. Will it help, no, delay, yes. By how long, it doesn't matter. The end result is the same.

Belgian, from your postings, I see you comment frequently on "The Trail" postings. Remember FOA said, if the U.S. enters another war, the timeline for the Dollar Reserve would end sooner. This is the trail we've taken. The world, especially the smaller central banks, are just coming to this grasp. This is the "transition", and they are late to the game, but looking to get in on the action.

This "relative" calm you speak of is the calm before the storm. I see, as is common with human nature, most want a change yesterday, so their gold can rise in value to the stratosphere today. The world simply doesn't move this fast, but we are already in the final innings. All of this of course, without taking deeply into consideration the outcome of these events. The world as we look about is changing fast, the outcome for myself and other Americans is rather suspect. Creative finance is the name of the game for this country, and I fear for this country's survival.

Trichet, an interesting development.

The CoinGuy

R Powell

(06/21/2003; 17:22:11 MDT - Msg ID: 104854)

More on gold ETFs

Over the years I've often heard the lament that investor interest in gold needs to be re-ignited. Many claim that the present generation has forgotten the value of gold in hand. Many, more pragmatic perhaps, have lamented the lack of a gold investment vehicle for the vast majority of investors who have only the stock market to invest in. Especially true here is retirement money often placed in mutual funds and then (mis)managed by others for those too disinterested or lazy to look after their own monetary welfare. Now, if the gold ETFs are approved, at least those very few fund managers who perceive the dangers inherent in the stock markets they are limited to for investments, will have an option to buy gold ETFs. I see this as more exposure for gold, not a hindrance. Considering the amounts of money that will now have access to gold investment and the total size (market cap) of gold, this just might be something of consequence. Probably not, but maybe?

Also, the gold ETFs themselves will be buyers and holders (long term buyers!) of metal increasing demand. This will remove supply from the market. How can this hurt the price of gold? Is this a substitute for holding the shinny in your own hands? Of course not, it's a paper game. But, won't this bring publicity positive attention to the gold market? Won't this add a new and potentially large demand for physical offtake from existing stores, especially as more and more shares of ETFs are added requiring those funds to hold greater quantities of metal?

Thoughts?
Rich

The CoinGuy

(06/21/2003; 18:07:14 MDT - Msg ID: 104855)

clarification of my last paragraph in #104853

Snippit:

This "relative" calm you speak of is the calm before the storm. I see, as is common with human nature, most want a change yesterday, so their gold can rise in value to the stratosphere today. The world simply doesn't move this fast, but we are already in the final innings. All of this of course, without taking deeply into consideration the outcome of these events. The world as we look about is changing fast, the outcome for myself and other Americans is rather suspect. Creative finance is the name of the game for this country, and I fear for this country's survival.

End Snippit:

Since an edit button is not offered, I'll clarify this, I was in a hurry, but do not want to leave a reader guessing as to my intentions. When I mentioned, "The world simply doesn't move this fast". I was stating that major changes take time in their evolution to occur. Yet once these changes are in progress, or past their evolutionary stage, they can lead to birth pains in the real economy. It is when this evolution arises, that you should have placed your assets in the proper allocation, or you might be swept under with the tow in the sea of liquidity this Country will witness. For those who take the paper path, these changes may come upon you too fast to react to the situation. The end game is already in progress, and changes can happen overnight. If you'll take notice of the recent chart of FRE, changes take time to develop, but their reaction, once known in the market place, takes but a moment in time. You see, evolutionary changes take time, but the realization of these changes sweep through the marketplace faster than you can react. Best to be placed in your asset of choice a head of time. The old saying, "I rather be a year early, than a day late" wasn't a wives tale. It is my belief, that there have been "numerous" evolutionary developments that are peaking in their evolutionary process, and the market's in the US may make large changes before you can react.

Some of the corrective process in the US markets were wrung out of the indices, only to be replaced by another bout of rampant speculation, The Bear Market is still ahead of us, is my opinion, and I wouldn't be complacent with your asset allocation, whether it is currency or (paper)gold.

Best of luck to all,

The Coinguy

Robert

(06/21/2003; 18:20:34 MDT - Msg ID: 104856)

Belgian + CoinGuy: Dollar fate

I would like to pose a simple question to Belgian and CoinGuy regarding their predicted fate of the US-Dollar "confetti":

In which year at the latest will the Dollar be replaced by the Euro (or gold) as reserve currency? Next year, in five years, or in 25 years?

Granted, when making a prediction, it is usually impossible to give a precise date as to when the predicted event will happen. However, a prediction without specifying a date by which the event in question will happen AT THE LATEST is in my opinion not worth much.

The subject of Dollar overvaluation is a very old one. I read about it for the first time in 1982 shortly after graduating from school and starting my first job (in Europe). This discussion intensified in the early 1990's. I vividly remember how I got scared by reading in the fall of 1992 the book "Bankcrupcy 1995" (either written by or contributed to by senator Rudman - the sponsor of the Gram-Rudman deficit reduction bill in the late 1980's). That book predicted for 1995 the bankruptcy of the US and the crash of the US Dollar due to escalating federal deficits. This issue was also addressed by Perot in his presidential campaign in the early 1990's. The book made such a scary impression on me that I seriously thought of selling all my US$ denominated paper investments at that time. (Fortunately, I did not do it.) More than ten years passed since the publication of that book. The US Dollar fluctuated a lot in the past 10 years against the Euro (DM) and Yen, but the simple truth is that the Euro/Dollar and Yen/Dollar exchange rate is roughly the same today as it was 11 years ago at the time of the publication of "Bankruptcy 1995".

I mention this story in order to remind everybody how unreliable all past predictions regarding the future value of the Dollar were. One more remark: the first book on investing I read in 1982 also warned about the danger of the inevitable collapse of all fiat money and recommended to keep a substantial part of savings in gold. That book made a lasting impression on me and ever since then I am following gold. I discovered this webpage 1 year ago and, partly influenced by the gloomy postings on this side, I finally began to diversify into physical gold.

R Powell

(06/21/2003; 18:49:33 MDT - Msg ID: 104857)

CoinGuy

Agree entirely. It took me a while to understand that some consequences of past actions (or lack thereof) occur quickly while others evolve over many years' time. I believe the gold bull was born after the POG $250s low some years ago but is/will evolve over many years rather than exploding overnight as some speculate. I'm sometimes encouraged that we are basically reading events correctly when past predictions come to fruition. Every time the subject of the USA monetary inflation (Bernanke's printing press) comes up I'm reminded of the prediction from years ago of the "Return of Bigfloat". Now with such low interest returns on US dollar denominated investments (bonds, treasuries, etc.) which actually may be yielding negative returns, along with all the discussion of the Euro as an alternative for the dollar giving dollar holders a chance to rid themselves of depreciating dollars, perhaps this old idea of the return of the bigfloat is also slowly proving to be correct. Randy, I believe, would say, "We'll have the hyperinflation, not deflation."

Another slow-to-evolve but correctly predicted event was the end of the gold-carry trade, no? Along with this we've seen the end of forward sales, (the buyback of forward silver sales was listed as an element of "demand" not supply for year 2002). This end of forward sales was also forecast by many as the probable end result of restraining or altering the invisible hand of the free market forces of supply and demand. The coiled spring may be now unwinding.

However, the potential for severe changes do exist and even though the financial situation may evolve gradually, little segments of it like the POG may move very rapidly, no? As you imply, better to be early than late!
Rich

glennh10

(06/21/2003; 19:11:07 MDT - Msg ID: 104858)

R Powell - on ETF's

I understand your parallel to IBM, GM, etc., that the ETF is a paper game for people to make money (or as a means of "wealth preservation"). It is true also that many of the people who choose to "diversify" some of their money into this won't do it with the intention to ever take delivery of actual physical gold.

HOWEVER, the brokers who offer ETF's to their clients are going to be "selling" it using the same arguments that apply to the reasons for gold ownership. The neophyte ETF "gold" investor is going to think that he/she has the same "protection" through the ETF as through actual gold ownership, which is, ultimately, not true. But, it will be taken as equivalent. In the end, when all bets are off, when no physical gold is coming to market, except at sky-high dollar prices, when it comes to GOLD (not cars, not computers), paper promises, contracts for gold will not hold up to physical gold, IN HAND.

Historically, there have been too many defaults. Paper gold (and silver) are part of the "system". The physical
metal itself, alone, stands apart.

I'm not trying to criticize, but just clarify an issue that often gets "muddied". Comments?

R Powell

(06/21/2003; 19:58:55 MDT - Msg ID: 104859)

Slingshot // Silver

Just saw your message from yesterday.

"Well, I'm smiling tonight after reading Towncrier's post with gold going to $2700. And why not? But the Silver Dog still runs behind the pack"

I guess so! Of all commodities silver has been possibly the worst performer (if you're looking for a price gain) for many years now. To further confuse the matter, she presents, when analysed from a fundamental supply and demand point of view, an extremely strong case for a much higher price. What's going on here?

David Morgan has recently joined Ted Butler in stating that the only possible reason that the POS can/has remained low is entirely the result of massive shorting in the paper markets. I think perhaps both of these good analysts have grown impatient and have also felt a great pressure from their constituents (subscribers) to explain why the POS has not yet increased as they predicted she would, especially after so many years have passed since their first predictions.

I too have spent many hours wondering exactly the same but have pondered that the vast majority of the silver market investment money is simply entirely oblivious as to any and all of the basic fundamentals of silver's supply and demand. How can this be? Normal fundamental analysis is based on the concept of Carryover supply from the previous marketing year, added to this year's Supply to give this year's Total Supply from which this year's Demand is subtracted to, once again, give the Carryover number. This new Carryover number expressed as a percentage of yearly use is used for previous years price comparisons. This is rough but is the basic concept used to estimate an possible shortages or excess carryover. Substitute Existing supply for the term Carryover in the metals' markets which don't really fit in a yearly cycle as do most crop and animal commodities. IMHO the POS is determined by market forces (read money) invested with no regard to the above basic equation of supply and demand. Shortage of silver has never been a consideration. Fundamental analysis does not apply.

What does that leave? Trend following, chart reading, cycles, astrology, and reading the entrails of plump Rhode Island Red chickens under the dark of new moons among other technical determinents. The silver market is traded technically, probably by managers and traders who have no idea or desire to know anything other than their charts, waves, lines of support and resistence, price pattern recognition computer generated buy and sell signals, magic numbers and such. If any of them are even aware of a possible coming shortage of silver they have more than likely dismissed this notion years ago as a constant market rumor that has existed since the Hunt brothers' buying of 23 years ago.

"A shortage of silver, you say? Yes, yes, my friend, but we need not worry about that since Jupiter is going to collide with Mars this year, you know. Now let's get you in from the cold night air, shall we? Silver shortage, indeed!"

Perhaps my conclusion to why the POS is near an inflation adjusted all-time low price is not correct but it explains why past publicized events that should have influenced the POS went totally unnoticed by the market. Silver hasn't really responded to anything other than technical (self-fulfilling price movements) since news of Buffett's entry into silver. That news leaked out in early 1998.

How also, could any market become so primed or potentially price explosive as we believe silver to be, if it weren't trading in an information vaccuum? I believe, (if we're reading the fundamentals correctly and there are no huge secret stashes of unknown silver supplies), that even after POS doubles in a short timespan, many will still insist that stories of a silver shortage are simply exaggerated rumors started by traders to profit from a quick price spike. Many will be shorting heavily all the way up!

"Shortage of silver, you say? Preposterous!"

Thoughts?
Rich

silvercollector

(06/21/2003; 20:19:53 MDT - Msg ID: 104860)

Wow

Cometose,

Regarding your message #104847. What does that mean? If I was on a plain high enough to understand what that meant I might not be here? I would love to understand it.

Robert,

Interesting message. Not interrupting the others but I am aiming for a timeline of 2006-2010. The energy scholars on this board point to significant issues on or before oil production peaks. A handful of demographic essays suggest the SM will fail as society begins to withdraw from 'the system'('boomers') instead of contributing to it. Both these items coincide during this timeframe. If society begins to understand the concept in advance of the timeline I imagine PANIC is a possibility accelerating the timeline to TOMORROW!

Aristotle

(06/21/2003; 20:24:15 MDT - Msg ID: 104861)

glennh10 -- bravo!! What a great time to tune in to the discussion!

That's the key point right there! They will be selling *selling* these investments to people on the premise that it is good as Gold, or maybe even *better* due to its paper/digital *convenience* factor!

In the end, no matter how much people might like to assuage themselves that these ETF thingies will generate positive publicity and interest in Gold, I think they'd better focus instead on how much potential physical buying pressure will instead be shamelessly diverted away from the true (physical) Gold market thanks to paper games like this.

They might as well proudly proclaim their Gold is safely being stored on the moon for all the good it will do them attempting to act in the role of Gold when a time comes that they really need the tangible immediacy of Gold. I gotta say it... Sheeeeeeeesh!

Heavens sakes, Rich, I see your point very well (msg#: 104852). Excellent presentation. As you said, "ETF ownership isn't about acquiring physical metal." But as Glennh pointed out, in other words, good luck making sure that package is sold as part of EVERY deal with Joe Sixpack and Sally Housecoat.

Now lemme ask you one thing and see if we can't get to the bottom of this once and for all -- Why can't the speculative/gambling/investment schemers find some *other* way to place their directional bets instead of miring the Gold market down in the confused process???

Seriously. Since delivery isn't expected in these schemes, and since the price discovery comes to be driven by the market made on the betting action rather than on the actual market of the underlying item, then why don't these speculating, would-be dollar-profiteers start up a whole new futures contract or ETF based on a small wad of used chewing gum?

The initial value may be somewhere around 0.000000003 cents, but the contracts can be leveraged in such a way that a serious cash profit opportunity exists for price movements in either direction of a trillion-trillionth of a cent. As the contract bidding frenzy ensues, any notion of the gum's true value is soon all but lost.

If we think about it, we are sure to .......eventually...... realize that such a thing *could* be done, and that the reason Gold is still allowed to be caught up in that mire is because it still serves a political purpose of price suppression -- as a psychological tool for investor behavior management. By playing along, even though you say it's with your eyes wide open, your still playing into their hands -- their hook is in your lip and they're reeling you into their boat, lil' buddy!

And the beat goes on.

Gold. Get you some, and at all times *know* what it is you're getting. --- Aristotle

silvercollector

(06/21/2003; 20:37:46 MDT - Msg ID: 104862)

Robert

"The subject of Dollar overvaluation is a very old one"

I agree. I don't think dollar overvaluation will be gold's salvation. I don't think the Euro as an alternative will be gold's salvation. Perhaps it will act as catalyst or perhaps begin the revaluation of gold but it (the euro) will not be the answer on it's own. One can see the alignment of Europe and Asia developing. The US is being abandoned, sadly, but one must one oneself, in 10 or 20 years what can it offer to the planet? Things would have to change radically for the US to reassert itself; take over more countries?

I believe the devaluation of paper in general and the revaluation of real, tangible hard assets is the ticket. As the population of the planet explodes (I read the max. is 9 billion peaking in 2050 followed by a significant falloff due to the lack of life sustaining resources) society will begin to understand the pickle we are in and the revaluation process will begin. I think the latest in Iraq is opening the eyes of many. The worldwide protests are testimony that the world's inhabitants are beginning to get concerned/informed.

This is not a theory (depleting resources), this is obvious. As the sheeple tune in, PANIC will begin.

R Powell

(06/21/2003; 20:38:28 MDT - Msg ID: 104863)

Glennh10 // ETFs

Hello Glennh10....
Your words...

"HOWEVER, the brokers who offer ETF's to their clients are going to be "selling" it using the same arguments that apply to the reasons for gold ownership. The neophyte ETF "gold" investor is going to think that he/she has the same "protection" through the ETF as through actual gold ownership, which is, ultimately, not true. But, it will be taken as equivalent. In the end, when all bets are off, when no physical gold is coming to market, except at sky-high dollar prices, when it comes to GOLD (not cars, not computers), paper promises, contracts for gold will not hold up to physical gold, IN HAND."

I'll agree that the brokers will twist the facts, distort the truth, apply fear, appeal to greed and do whatever else they can think of to sell whatever it is that they're marketing. I don't imagine the IPOs of gold funds will be any different.

As for the owner or shareholder of an ETF having exactly the same equivalent as the holder of physical, no, I suppose not. I never said they were the same.

Both paper traders playing from the long side and physical metal holders will benefit if the POG rises. I suppose the main difference is that the paper trader's gains will be in the form of paper money but, how does the physical metal holder exchange his gain or appreciation in price for anything else? Aristotle (I hope I'm comprehending him correctly) often mentions gold as a store of wealth or earnings while viewing money as a medium of exchanging earnings. I believe he views money as only useful in this regard. I agree with him and in this respect, if physical gold is exchanged into cash to buy other worldly goods or pay bills or debts, the value, once again in fiat form, immediately becomes succeptible to depreciation whereas, in metal form, that value is immune to currency rot. Now, how will a rising POG and/or a dollar depreciating against gold affect the value of a share of a gold ETF? Also safe until converted into fiat form but succeptible to all those pulls and tugs (shenanigans) of any exchange traded equity. I guess wealth or earned value stored in metal form is akin to ice cream stored in the freezer, safe until you take it out to "consume" it. Then, like the wicked witch of the East, it starts to melt!

I'm not now nor will I ever try to argue that anything replaces physical metal in your own possession! I was simply exploring the idea of the coming gold ETFs and expressing my opinion that this may be a very positive development for the POG. Hopefully I provide a different perspective (a paper trader's view sometimes) than is customary here but basically I hold as true the arguement that nothing replaces physical (self-determination, freedom). From the ongoing mundane struggle for the worldly tender, I often view gain as simply monetary which I'll spend immediately to lower debt and sustain the worldly existence of myself and my family. Were I wealthy, I'm sure my usual perspective would be more one of preservation than of gain.

In essence, I agree with you that gold ETFs and physical are two different animals. I never thought or said they were the same, just that both are gold price positive!
Happy weekend
Rich

Chris Powell

(06/21/2003; 20:40:31 MDT - Msg ID: 104864)

Embry interview on ROB-TV

ROB-TV posts its program on its Internet site for
a week but they come down after that. GATA was
able to produce the transcript because a GATA
member transcribed the program before it was
removed, and then we edited it for clarity.

melda laure

(06/21/2003; 21:05:19 MDT - Msg ID: 104865)

My credit union's book is 75% mortgage

Cometose #: 104847)

"6 out of 10 banks have 50% of their capital tied up in Mortgage backed securities......that's the rumor I heard posted last week ....."

About 4 months ago, I read the annual report of my local credit union. Their ratio is more like %75. Of course only about 15% is actual mortgages, the rest is GSE paper of one kind or another. The rest is mostly car loans (charging about 8% with a tiny slice of credit cards (which you can borrow at about 9%).

Funny thing is, the yield on most accounts is well into sub 1% (may go negative come next wednesday), and tops out under 2.5% for the big depositors/IRA/CD's etc. I suspect that the ever increasing amount of "retained earnings" is being held against future losses. Yeah it's a non-profit too.

My credit union is a GSE conduit.
Of course I've long since found a better way to save. Clink, clink, THUD!... Got me some mithril-toed boots, real dwarf make!

mikal

(06/21/2003; 21:15:07 MDT - Msg ID: 104866)

@silvercollector

http://news.independent.co.uk/world/asia/story.jsp?story=417713Re: "I think the latest in Iraq is opening the eyes of many." Yes, and don't forget Afghanistan.

Afghanistan regains its title as world's biggest heroin dealer
By Andy McSmith Political Editor and Phil Reeves Asia Correspondent 22 June 2003 -Excerpt:
"Afghanistan is still the source of almost all of the heroin sold in London, even though Britain has poured millions into trying to stamp out the war-wrecked country's resurgent drugs production business. Opium poppies are springing up from the plains to the mountains of Afghanistan in far higher quantities than in the final year of the Taliban, which the US and Britain overthrew, while vowing to end the region's narcotics trade. Opium - from which heroin is extracted - is produced on farms only a few dozen miles from the capital city of Kabul, headquarters to the international effort to end the heroin trade and rebuild the country.
Local Afghans say that bags of heroin are used in lieu of currency in some parts of the lawless countryside where - more than two years after the Taliban was toppled - the US-backed interim government of Hamid Karzai has failed to establish control."
With 9 X the opiate production as before the war, it should soon prove to be a mere "nine days wonder".

R Powell

(06/21/2003; 21:18:17 MDT - Msg ID: 104867)

Gambling on gold // Aristotle

Aristotle is of course, correct. The gold ETF's will trade subject to investment sentiment and all those forces that influence all exchange traded equities but, mostly they will derive their price from the underlying POG. Will gold ETFs steal investment capital away from the physical market OR will gold ETFs open up investment in gold to that huge markets, like mutual funds, that previously had no means to invest in gold?? Your typical retirement fund, invested in a stock picking (from the long side only!) game has no means of investing in any tangible commodities, including physical possession.

Sorry about the derivative speculation Ari. There are now derivative contracts besed on whether the number of bankruptcies rises or falls and contracts based on the weather! There are now single stock options. It just goes on and on. "And so it goes." Tomorrow's POG and next year's corn crop will always be a matter of human speculation, whether we like it or not.

Participation is indeed necessary for the continued existence of speculation but I neither endorse nor condemn the derivatives markets. I view it as a business investment among gamblers rather than a moral or ethical question of whether I should or should not participate. I do not consider myself to have less character or ethical worthliness because I play the paper games. I work, study and place my wagers, always hedging my positions and constantly watching the winds. Why should my work not be rewarded. Remember, I also contribute to this world, on a daily basis, in the hard physical work necessary so that shelter is available. I pour and finish concrete for wages. I endeavor to profit from both jobs. Is one job more ethical than the other? The markets exist and I endeavor to profit from them. I do not suppose, from my understanding of human nature, that speculation will ever disappear or be legislated out of existence.

"I'll bet my money on the bob-tailed nag..
Somebody bet on the Bay.....

Happy weekend
Rich

mikal

(06/21/2003; 22:00:49 MDT - Msg ID: 104869)

Now let's see this "Bulls@%! Detector" do some serious damage...

http://news.independent.co.uk/business/news/story.jsp?story=417770Big business beware, the bull!@*! detector is here
By Kotaro Miyata and Clayton Hirst 22 June 2003 -Snippit:

"The days of corporate waffle are numbered. The more management-speak in a company report, the worse a firm is doing, say the developers of a "bullshit" detector. The computer program - called Bullfighter - sifts through companies' reports and accounts picking out management jargon and obscure corporate language. Expressions such as "lifecycle management", "synergies" and "benchmarking" are to Bullfighter like a red rag to, well, a bull.
Developed by Deloitte Consulting, the Bullfighter is more than just an exercise to rid the world of arcane and convoluted business terms. Deloitte claims that there is a direct link between clear communication and good financial performance. The better the Bullfighter rating, the less jargon there is and the better the company will do.
Brian Fugere, partner at Deloitte, said: "Straight talking companies out-performed non-straight talking companies in terms of revenue growth - consistently." The view is shared by one of the country's top business academics. Richard Teffler, professor of accounting and finance at Cranfield School of Management, said: "Jargon is used primarily to obfuscate and mislead. "It is a way of denying what's going on. It avoids acknowledging how bad the problems really are. You can predict fairly accurately whether a company is going to survive or fail based on its statements.""

The CoinGuy

(06/21/2003; 22:17:54 MDT - Msg ID: 104870)

RPowell

As you believe, and Randy your wise Site Steward has pointed out, "We shall have the Hyperinflation". One could directly point to many analysts(soothsayers) and mention the opposite is occurring(deflation). My answer to this is, the majority of the market has to be wrong in order to make a profit. The contrarians creed, of which I profess that I am of this ilk. A small off-topic example..GSS recently broke out of it's symmetrical triangle. The fake-out gap to the downside(which fulfilled a handle of a cup&handle formation) shookout the weak hands as well as the specs...I'm still laughing at this one. Yes, I follow the shares, I follow all of the markets. It's my business, and my business is profiting from the "transfer mechanism" we call the stockmarket.

Back on topic, An example of this is the new ETF you are discussing. Switch the investors attention to the paper compromise, while accumulating the precious physical. But the claim is, "It's so easy to invest this way", but you're convenience is someone else's gain. I'm Always on the look out for someone who promises to make me rich without sweat equity. The only benefit I see from this is my own...Hopefully, more time to accumulate physical.

Will it benefit gold at all from having an ETF? There are entirely too many pieces in this pie to determine if this is/would be true or not. But the argument could be made, "It will increase exposure and demand". Hmm, demand for more paper I suppose. Paper is paper and a cigar box full of gold is wealth in the hand. I'll take the latter, we'll see what the typical investor of this new ETF has a yearning for. "I thought I bought this stuff to hedge my other assets". In response, "You hedged your paper with paper?" Again, what currency were those precious metals gains in? The investor's conclusion will be nothing more than zero-sum. A fool and his money......

If a person didn't realize this at 120 on the $us index, what is their comment to be at 20?

Snippit:

However, the potential for severe changes do exist and even though the financial situation may evolve gradually, little segments of it like the POG may move very rapidly, no? As you imply, better to be early than late!

End Snippit:

Interesting analysis Rich, Yes. As I mentioned we are constantly in an involving world of change in regards to the markets. Although as we progress along the path we find ourselves on currently. Which I've dubbed nothing less than creative financing, there is greater odds that a Puplava-type sigma event will put systemic pressure on the financial system, and our "financial-timeline". Which could exacerbate the time-frame of our so-called "event".

the POG...well, I look at it this way. I see specs ebbing and flowing the futures...mutual funds getting into a little physical, but primarily accumulating the shares(Fidelity for example)...meanwhile international institutions, countrys, CB's and market makers flying the world over to secure physical at a rampant pace...in fact I could use the word fervor...especially if I'm talking about Africa. I'd imagine it's going up one way or another...fast or slow...who really cares. I'd prefer slow, but I believe it will be fast..one day.

150 trillion times over. "All bets are off as far as I'm concerned".

Back to Lurking,

The CoinGuy

Robert:
I'll leave predictions to the soothsayers. What I am implying in the paragraph above is this: All of these events have started in their process already. With "any" systemic, or semi-systemic event that occur's within our over-leveraged, derivative drunk debt based environment, we can expect this to immediately work to exacerbate the normal timeframe, the problem is...we don't know the future, but you've been given a rather well-lit path to prepare for it. Off to read Dow 36,000. Smile.

Robert

(06/21/2003; 22:31:25 MDT - Msg ID: 104871)

silvercollector: The US is being abandoned

There is indeed a growing antagonism between the US and many other parts of the world. In my opinion, this should be partly viewed as a natural tension between the future (represented by the US) and the past (the rest of the world). Indeed, the US is the most advanced country in the world at least in the areas of technological development and the resulting resource depletion. Oil production peaked here in 1970 while gas production is entering a cliff now. My point is: The US is only early. In 20 years production of fossil fuels will have passed the peak in every other country on the globe. This forum here is a further indicator of the advanced status of the US. Nowhere in the world will you find a level of awareness and sophisticated discussion of fiat money and gold related issues as in the US. The same remark applies to the growing awareness of the Hubbert peak: the center of that awareness is in the US (there are at least 5 books on this subject published in the US). This is true despite the fact that the general public has no clue of what is going on.

Regarding the SM: this is a Ponzi scheme originally invented in order to obtain cheap equity capital. That scheme can be maintained as long as the economy is growing. However, in a finite world, positive growth rates can not be maintained forever. Eventually (perhaps past the Hubbert peak) economic growth will be history. When that point in time is reached, the great SM crash will arrive. Only then will people turn to tangible things (like gold). As long as economic growth can be maintained, fiat money and the stock market will (I am afraid) continue to thrive. It's a complicated subject involving too many variables so I better stop here.

mikal

(06/21/2003; 22:32:50 MDT - Msg ID: 104872)

U.S. foreign policy at crossroads

http://www.yellowtimes.org/article.php?sid=1428PINR: "Pakistan Likely Model of What's to Come"
June 18, 2003 @ 02:00:08 CDT
Power and Interest News Report (PINR) http://www.pinr.com
by Erich Marcquardt -Excerpts: "In October, the Mutahidda Majlis-e-Amal (MMA), an alliance of Islamic fundamentalist parties, was elected and given control of the provincial government in Pakistan's North-West Frontier Province (NWFP), located on Afghanistan's eastern border. Since the election, the alliance has quickly picked up where the Taliban left off.....
The situation in Pakistan is really a specific example in a larger movement in which current U.S. foreign policy is sowing many of the seeds it is attempting to destroy and creating significant negative effects: a resurgence in nationalism, a trans-Atlantic diplomatic schism, and, perhaps, a new era of nuclear proliferation.....
And as attitudes become more negative, we can also expect a heightened level of violence directed toward U.S. interests at home and abroad."

Topaz

(06/22/2003; 00:29:55 MDT - Msg ID: 104873)

Bonds, Gold and Dollar.

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9A five-day loser on the Long Bond may be indicative of stress selling but I don't see it getting away on them just yet. If we get out to 5%...or 5.4% things will go ballistic.

ETF'S and the like:
As with all "investments" and moreso with Gold, it's mandatory to do sufficient diligence to determine "YOUR" entitlements in the event of a "worst-case scenario".
It's been my experience that all Depositary Bullion is held on behalf of the Client and suitably insured against bad things that MAY occur.
In all cases, the absolute Bottom-line is "settlement in FIAT"
This was acceptable when Currency was Gold Backed, but nowadays???

I guess it boils down to what you expect from your Gold...a Fiat profit/loss, or a tangible, at hand, wealth asset par excellence.

Belgian

(06/22/2003; 01:42:39 MDT - Msg ID: 104874)

Re:

R. Powel : Force Majeure : Waking up one morning and facing new, confiscation-like, legislation on Gold. Sorry, no physical but paper ! After 40 years of banning Americans from holding Gold, you have only 30 years of physical availability, since 1971. And there are many other "hidden" force majeures more directly connected to the ETF-thing as such. But...a much worse, general, evolution is taking place with an ever increasing momentum :

*** The "paper-culture" ! ***

A nefast "total" paperization of everything. A "culture" !
The final outcome of this will, post factum, tell us both who was right to waorry about this culture or who got it right and kept on participating, succesfully, to this overwhelming paper-culture, wich I prefer to call a "mania".

Speculating...gambling...to manipulate/control and willingly accept of being manipulated/controlled by the organizers of the paper-culture. I've been a stubborn contrarian, Rich...and keep swimming against the mainstream ! We surely understand each other's position on this aspect, very clear. I'm warning and you remain pragmatically flexible within the evolving paper-systemic.

That's why Robert (and many others) wants a timing on whole this, wich I can't provide or even guess.

And coincidently or not...but have to agree with Ari's (again) picture of..." The hooks are in many lips and they are reeling many of them into their boats..."

Is this growing financial paper-TRILLION-giant a sign of advanced-sophisticated modernism...and evidence of how smart we, homo economicus, really are ? I remain convinced it is NOT ! That's why I, and a very small minority with me, must be branded as a disturbing doom and gloomer...an antic...a fossile.
Don't feel uncomfortable with this exclusion, at all.

Enough of this philo-talk.

*** Why aren't Funds allowed to "preserve" their assets with the holding-trading of Physical Gold !!!-??? ***

The answer to this might fill a library and can be reduced to the simple synthesis of the paper-culture theory.

A very important side effect of what is going on in the ME is the following : We want to "modernise" those who we cansider still to live in an medieval society structure !
We want to get them "paperized" ! Very little "real" economy and masses of paper upon it. Aren't we taking too much weight on our forks with this ??? Billions of people haven't been "disconnected", yet, from the Physical Gold general idea ! Yep, Gold-Advocates AND Gold itself must be branded as "anachronists" / anachronism !

WE MUST REMAIN ON THE DOLLAR STANDARD !!! And this for our own good and that of the whole world ! Thy shall not change paper into Gold, but only paper into...much more paper...GAINS !

That's the *credo*, Rich ! We are BEING "YAHOOOD" (stockprice x3 paper worth in no time)

44 TRILLION of $ debt and 140 TRILLION $ on derivative insurances are paper-things ! Take care this paper doesn't get wet and sinks ! The Global Debtberg grew from 130% to GDP in 1981 to 300% to GDP in 2003 (conservative figures) ! Thanks to this modern paper-culture. Stockmarket capitalization is 100% to GDP.

How did we come to this astronomical figures ? Answer : through the systemic of a paper-culture ! It is "this" that pushes me, constantly, into "preservation" with Physical Gold and keeps me out of the paper "gain" systemic ! Yep, I have my *savings* to lose. And made some of the past gains *with* the paper-culture.

Time will tell it all and we continue to watch with our respective anticipations.

The CoinGuy : Thanks for responding and I've understood your clarifications.

Belgian

(06/22/2003; 02:20:54 MDT - Msg ID: 104875)

Force Majeure towards Gold....

For those who believe that 16,000 tonnes (60%) of central bank Gold has disappeared into jewelry...an ETF physical gold-pool might be handy if...
Perpetual Gold containment is already a form of Force Majeure in itself.
Idem dito for those who are holding the globe's precious oil-reserves...they face Force Majeure, today !

Gold, Oil, Fiat must be framed into the gigantic power play *above* our heads. Each and everyone tries to fit into this according to one's own personality. Good luck to all of you.

silvercollector

(06/22/2003; 05:14:14 MDT - Msg ID: 104876)

I concur

mikal,

Yes, I forgot to mention the thriving sucesses (?) of Afganistan. Back to Iraq for a moment. As of last Wednesday or Thurday I read that 51 US soldiers have been murdered in 'post-war' Iraq. This is (was) May 1 if I recall correctly. It won't be long until the post-war victims overtakes the war count. Another lovely (sarcasm) sucess. I guess Blair is being pounded on the other side of the pond. I finally got to see "Wag the Dog" a couple weeks ago, is the US army (it's leaders) for real? There were too many similarities bewteen Ms. Lynch and "Old Shoe" for my liking.

Robert,

Your response is simply awesome, it should be placed on the front page of every newspaper on the planet. Can you imagine !!

Regarding "It's a complicated subject involving too many variables so I better stop here.." please go on. I think we're on parallel lines here, I for one would love to hear you ramble.

Oro used to ramble occasionally about demographics, it explains, to a large degree at least, the situation in Japan. His remarks lead me to a book (I forget the title) about the effects of an aging population. Indeed scarey.

Our personal energy consultant (great job!) has made us aware of the imminent problems that we face. Gold just gets better looking each and every day.

So again, feel free to ramble.

Have a golden day.

The Invisible Hand

(06/22/2003; 07:04:24 MDT - Msg ID: 104877)

Something to ponder ...

http://www.libertarian.to/NewsDta/templates/news1.php?art=art261Cavan Man (06/19/03; 18:59:07MT - usagold.com msg#: 104778)
On this date........
The Rosenbergs were electrocuted in Sing Sing prison. They left behind a ten and six year old son--later adopted by strangers. Avowed communists, they insisted upon their innocence until the end.
===
Yes, they insisted upon their innocence, but it now appears they were indeed guilty.
But these were crimes AGAINST the government (which explains why the penalty was so high), whereas the POG-manipulation is a crime committed BY the government and its alcolytes (which explains why it is so effective.

21mabry

(06/22/2003; 10:23:43 MDT - Msg ID: 104878)

ETF

IMHO this fund could be the attempt to allow the general public to participate in gold without taking possesion of the metal. Many people do not understand futures and options and mining stocks do not seem to have caught alot of peoples interest. But stock investing is something people understand we have built a society were a paper claim means wealth. With out these stocks people would oppt for the metal, it is easier for most to understand physical as opposed to futures and options.Stock investing became common place in the 1990s its a way to control the metal.

21mabry

(06/22/2003; 10:51:51 MDT - Msg ID: 104879)

Golden Triangle

Someone posted a article that opium production is back on the rise in the Afghan state. This is no surprise that region has been part of the opium producing triangle for 100s of years. The U.S. gained control of the area after world war 2 before that it was the British.In most cases it is reported the growers will only accept gold in payment for their crop.That is one of the reasons the British fought the Boer wars they needed southern african gold to buy the opium.Read the Politics of heroin in south east asia. Dope Incorporated is also a good book. Air america and the flying tigers flew covert runs for the OSS and there offspring the CIA.21

glennh10

(06/22/2003; 10:58:01 MDT - Msg ID: 104880)

Comment re ETF's (paper vs metal)

The bottom line is, when the time comes, (and it will), paper will be DISCOUNTED compared to the metal itself. So, those holding paper, ETF's, even holding actual CLAIMS for gold, will suffer a disadvantage. Their (fiat) profits will be discounted relative to the value disconnect between gold itself and paper gold. Also, laws and contracts will will be nullified and changed, protecting the financial industries that cause the mess in the first place. Today still, the paper game remains in the lead. But, that horse is getting pretty old and tired. It's going to change. When it does, then the paper/metal equivalence in the market trade will be over. That's when TPTB change the rules. For right now, ETF's are fine. Tomorrow may be another story. They can't "legislate" the gold from your hands!

glennh10

(06/22/2003; 11:44:38 MDT - Msg ID: 104881)

Loaned gold

The central banks have loaned out a lot of gold. The fact that it's a "loan" means that technically, they still own it. The bullion banks that did the "borrowing", owe the gold to the central banks. Banks, including the central bank, benefit from a special "relationship" with the government that no other businesses enjoy.

What might happen if the central bank decides that it needs its gold returned, say, to restore substance and credibility to a dying dollar system of exchange? The bullion banks will be liable, but they will be "bankrupt". The central bank still demands that the XX,XXX tons of gold loaned out are due back to the bank. Not paper, gold. The fact that the gold was sold on the market, that it was paid for by the buyers, will be irrelevant. For, if a person buys something from somebody who doesn't actually own it, I'm not so sure that the transaction can be claimed to be legally legitimate, that the buyer now owns it.

Therefore, the central bank, through complicity with the gov't and the courts, could demand the "return" of the XX,XXX tons of gold. The easist and most available sources of gold bullion would be the large gold funds and vault warehouses storing gold for invested clients. Caboom! In but one stoke of a pen, these warehouses are suddenly locked down. The accounts of their clients are temporarily frozen, or valued at a "fair" fiat market value.

These large enterprises would be the first targets. On the other hand, the more difficult or impossible/impractical sources of gold would be the individuals holding gold themselves. I don't know that such a scenario would ever come to pass. But, I do sense a future disconnect between paper and metal, and I wonder what might follow.

21mabry

(06/22/2003; 12:11:16 MDT - Msg ID: 104882)

Claims

Glenn10, do you feel that even people like Buffett who may have large claims of metal could also be at risk? Or are these people and their claims on metal secure because of who they are and the public exposure they have. thnx 21

slingshot

(06/22/2003; 12:25:19 MDT - Msg ID: 104883)

glennh10

The possibilities of what TPTB can do to us is endless. If man can think of it,it can be done. Everytime I read here, a new parameter comes into play. Now we are buying goods that by some legal definition may be illicit. A perfect one-two punch. Draw down the savings as you try to preserve your wealth, then make it an illicit transaction and get paid in devalued dollars upon return. This paper society/cult follows every New and Improved game as if it was a laundry detergent expounding the cleaning power. The color ,writing and shape of the boxes changes,yet the cleaning power is the same.
The only thing left is to ask yourself. What are you going to do about it. Preparation is the answer.

Enjoyed your post.
Slingshot-------------------<>

cyberbat

(06/22/2003; 13:10:37 MDT - Msg ID: 104884)

@ slingshot

And sir, if I may be so bold to ask; what is your preparation plans. I have a couple but they cannot be mentioned in public.
Cyberbat

donnemuir

(06/22/2003; 13:44:42 MDT - Msg ID: 104885)

Preparation?

Gold..Groceries..Guns

misetich

(06/22/2003; 13:59:07 MDT - Msg ID: 104886)

Venezuelan move to replace US$ with the �uro upsetting Washington more than Saddam's �uro conversion last November

http://bmp.vheadline.com/banman.asp?ZoneID=2&Task=Get&SiteID=1&X=1056310740200Snip:

A move by Venezuelan President Hugo Chavez Frias to replace the US$ with the �uro is seen as upsetting Washington more than when Iraq's Saddam Hussein started using the �uro for oil transactions last November ... precipitating the US-led action to invade Iraq. Beltway bullies are now said to be angered by Venezuela's decision to barter oil with thirteen other Latin American countries, dealing moves to dollarize South America currencies. Intelligence reports say that while the US was able to pull the wool over the international community and ally with Britain's Blair to bulldoze action against former Iran War ally Hussein, the situation with Venezuela is proving more difficult.
............
Russia, China, North Korea and Malaysia have begun holding �uros as important hedgings in their foreign exchange reserves as faith in American greenbacks floats down the river.

CIA and other intel organizations, including Britain's MI5, now fear that the next step is that the Organization of Petroleum Exporting Countries (OPEC) is about to switch to �uros ... the immediate effect would be a massive devaluation, perhaps sparking of domino-effect devaluations worldwide in US$-related foreign reserves and foreign debt calculations.

With a massive budget deficit, the United States is running scared of latest intel that the Kingdom of Saudi Arabia is on the brink of converting to the �uros and the opinion held by many OPEC ministers is that the conversion is an inevitability ... the only question left is WHEN?
*********
Misetich

Not really news to USA Gold Forum followers - Chavez is being challenged through a referendum. Chances are he will succeed as Brazilians are backing him. A real thorne in the US and US $ side

All On Board The Gold Bull Express

misetich

(06/22/2003; 14:18:27 MDT - Msg ID: 104887)

Still Blowing Bubbles - By PAUL KRUGMAN

http://www.nytimes.com/2003/06/20/opinion/20KRUG.html?ex=1056772800&en=5295a0eed0db006d&ei=5062∂ner=GOOGLESnip:

The big rise in the stock market is definitely telling us something. Bulls think it says the economy is about to take off. But I think it's a sign that America is still blowing bubbles � that a three-year bear market and the biggest corporate scandals in history haven't cured investors of irrational exuberance yet.

Or, to put it another way: it's hard to find any real news to justify the market's leap. Instead, investors seem to be buying stocks because they are rising � which is pretty much the definition of a bubble.
..........
But even if that happy scenario comes to pass, it's hard to justify current stock prices � because if the economy booms, the low interest rates that might conceivably make stocks worth buying at 30 times earnings will soon go away. If and when businesses start borrowing again, they'll have to compete for funds with the federal government, which will be running $400-billion-plus deficits as far as the eye can see. Meanwhile, foreigners won't keep lending us $500 billion each year; in fact, private investment inflows into the United States have already dried up.

Oh, and the banana-republic policies now being followed in Washington won't just drive up interest rates; they'll probably generate a full-blown fiscal crisis one of these years. That can't be good for equity prices.

In short, the current surge in stocks looks like another bubble, one that will eventually burst.
..............
Misetich

Krugman who made a formidable call in early 90's on SE Asia overcapacity and overvalued currencies is ringing the alarms bells...he cites high oil prices, consumer spending stagnating, businesses cutting costs, etc.

Did Sir Greenspan graduate from Bubble University? as it appears thats the only way he can manage things.. by inflating his way out - through "deflation" of course

All On Board The Gold Bull Express

misetich

(06/22/2003; 14:35:02 MDT - Msg ID: 104888)

Global: Endless Bubbles - S. Roach

http://www.morganstanley.com/GEFdata/digests/20030620-fri.html#anchor0Snip:

That's been the case in Japan, and a similar pattern is now evident in the United States. The result is a seemingly endless array of bubbles that only heightens the perils of the post-bubble endgame.

Unfortunately, the policy response to asset bubbles virtually guarantees cross-asset contagion. That stems mainly from the behavior of central banks. The US experience provides a classic example of this multi-bubble syndrome.
..........
aftermath of the popping of the equity bubble in early 2000 quickly became the great enabler for the US property bubble. And then when the Fed began cutting interest rates aggressively in order to combat multiple pitfalls -- recession, the subsequent anemic recovery, and newly emerging deflation risks -- a bubble emerged in the bond market. The Fed, in effect, has become a serial bubble blower.
..........
Household sector debt is now in excess of 80% of US GDP, fully 15 percentage points higher than debt ratios prevailing in the early 1990s.
...........
Federal Reserve estimates place the overall household sector debt service burden at 14.0% in early 2003; that's down only slightly from the all-time high of 14.4% hit in late 2001 and well above the 12.9% norm of the 1990s. To me that says it all: Even in the face of 45-year lows in interest rates, the debt overhang is large enough to push debt service burdens to the upper end of historical experience. That's hardly a comforting place for any economy.
...........
But there's also the distinct possibility that the Fed is hoping against hope. I would personally assign equal odds to the chance that there will be a more treacherous moment of reckoning.
...........

My concerns ...... ominous current-account implications of a saving-short US economy. Courtesy of outsize Federal budget deficits and massive multi-year tax cuts just enacted by Washington, it is not that farfetched to envision a net national saving rate that falls from a record low of 1.3% in the second half of 2002 to "zero" over the next 12-18 months. If that were to occur, the current-account deficit could widen sharply further from its record 5.1% of GDP just reported for 1Q03 into the 6.5% to 7.0% range by the end of 2004. Such a massive and ever-widening US current-account deficit could well set the stage for the ultimate post-bubble endgame -- a full-blown dollar crisis that would deal a lethal blow to the global economy and world financial markets.
..........
And the endgame -- including the risks of deflation and a dollar crisis -- appears all the more treacherous.

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

Roach appears to have lost all confidence on the Feds .. he thinks Sir Greenspan is throwing the old Hail Mary Pass...

As gold investors we stay keenly on the well marked Trail..having a front row seat on the debacle

All On Board The Gold Bull Express

CoBra(too)

(06/22/2003; 15:40:11 MDT - Msg ID: 104889)

The God of the small Things - by Arundhati Roy

An Indian author(ess), whom I've only discovered over the weekend in an interview, where eurocentric views of problems become relative.

Arundhati's speech on confronting Empire ...

"It is a myth that the free market breaks down national barriers. The free market does not threaten national sovereignty, it undermines democracy... But remember this: We be many and they be few. They need us more than we need them."

A google search with her name brings you to lots of her wisdom ... Hoping you'll find it as interesting as I do -cb2

CoBra(too)

(06/22/2003; 15:40:12 MDT - Msg ID: 104890)

The God of the small Things - by Arundhati Roy

CoBra(too)

(06/22/2003; 15:54:29 MDT - Msg ID: 104891)

Sorry for double post -

Wich begs for another quote by Roy, at least:

"The US economy is heavily depending upon the US dollar remaining the global reserve currency. If the � starts to challenge this position, the tensions will ultimately be unbearable."

- Let's not forget the're other presumptive major league players out there. As history has proven ever again, military power without a sound economic base is only sweeping accoustics in the general tidings of time.

A "sound" within an orchestra... and sometimes even a discord within a global accord... cb2

Mr Gresham

(06/22/2003; 17:15:10 MDT - Msg ID: 104892)

CoBra(too)

http://www.geocities.com/jporta_99/aroy.htmlHere's an Arundhati Roy link I've had waiting to explore for some time. Beautiful writing. Beautiful writer.

Y'know, when the powerful of the world get the writers and artists on their tail, their inclination first is to say, with the Stalin's sarcasm about the Pope, "How many divisions do they have?"

The odds are pretty good for TPTB, especially when they can box up the artists and writers under lock and key, but sometimes the ability of wordsmiths to reach the conscience of others can prevail. Watch out, W!

"I go to � forge in the smithy of my soul the uncreated conscience of my race." -- James Joyce

Dollar Bill

(06/22/2003; 17:27:26 MDT - Msg ID: 104893)

......................(%

Roach also said;
..The Fed's strategy seems to be aimed mainly at buying time -- hoping for a gradual and benign endgame to the post-bubble workout. That's certainly possible.
And the Morgan europe team said;
..But we all agree that there are further rate cuts in the pipeline on both sides of the Atlantic. The Fed is expected to cut by at least 25 bp next week, and we now expect the ECB to cut rates by another 50 bp in H2 (against 25 bp previousl y). Elsewhere in Europe, both the Bank of England and the Swedish Riksbank are likely to cut rates by 25 bp or more over the next several months.

Thus, liquidity will become even more abundant and is likely to pump up asset prices further. In fact, the only plausible explanation for the synchronised rally in equities, credit, government bonds, and emerging markets over the past few months is excess liquidity, in our view. The central banks are all deflation fighters now and are therefore fuelling asset price inflation in all major markets. While the bubble in government bonds would be the first to burst if and when an economic recovery sets in, this is still some time off, at least in Europe.

..MK mentioned in his latest comments, well, go read them.
I think Americans will differ from the Japanese in that
they will really respond to lower and lower rates to increase borrowing. The fed probably has some plan to
expand mortgage lifetimes to 100 years, more if needed.
..Americans will pay high interest rates for 35 years on thier credit cards. Insane financial behaviour is standard
behaviour at this point, perfectly aligned to go forth and borrow more, Americans will surely respond to further Fed
invitations to borrow.
..Americans have been and are in shopping heaven.
..That is not ending yet.
..Any decline will effect the whole globe, and god help those billions who live on the razors edge already.
..By the way, not all those we quote here are worthy of having thier comments here.

Mr Gresham

(06/22/2003; 17:30:25 MDT - Msg ID: 104894)

National Security Strategy

http://www.whitehouse.gov/nsc/nss.htmlYou don't have to take my word for it, or Noam Chomsky's. Read it, and see if you think it wasn't written by a bunch of guys who wish they had been around to help Queen Victoria run her Empire. Hey, but now their opportunity is here -- "New, and Improved" -- that's The American Way!

Only problem is, we've already HAD our Empire, and the juiciest fruits have been collected and eaten already. This is about fighting -- and fighting hard -- to preserve the remaining husks, to support the Takers who cling to the money machine that Empire is.

The average citizen? Gets parades, Gold Star mothers, and an extra quid on the Queen's Birthday. He is ALWAYS cannon fodder. ALWAYS. But, like the abused child he is, he still loves Daddy.

Empire ROTS life at the Imperial Center. The vigor and initiative that its citizens once used to create their Republic has vanished. Thus, Empire decays from the center outward.

'Twas ever thus.

Cavan Man

(06/22/2003; 17:46:15 MDT - Msg ID: 104895)

Hi Mr. Gresham

....and ever will be.

Very pleasant to ss you quoting JJ. Best....CM

PS: I've heard Ms. Roy speak before. On target and on time; TBTG.

Goldendome

(06/22/2003; 17:47:48 MDT - Msg ID: 104896)

Link to Ahr.Roy

Gresham: Thanks for link to Ahr.Roy. I have feared that Millions of people abroad have been filled with the resigned bitterness and resentment that she is able to express in her writings. (Mcdonalds can not exist abroad without first a strong Mcdonnel Douglas.) That's pretty good--or the choice between a Malevolent Mickey Mouse and the Militant Mullahs. The U.S. I think she feels is going to atteno to make everyone live "The American Way" even if we kill them in the process--it'll be for their own good.---Gdome.

Dollar Bill

(06/22/2003; 17:52:30 MDT - Msg ID: 104897)

^/^

Oh great, I posted a "by the way" and it looks like I am commenting on the "ROY" posts. Actually, no.
I have listened to her twice on the local socialist college radio station. I listened to her whole speeches. Mercifully enough, her subjects were not about forum subjects then.
She is not unlistenable like my fellow Connecticut citizen Ralph Nader.
I was referring to those writers who are quoted here whom like CB2 I believe mentioned, are not ahead of us.
Sorry for the excess.

slingshot

(06/22/2003; 17:52:39 MDT - Msg ID: 104898)

Cyberbat

Always willing to share. There are many levels of preparedness and mine is hardcore.

I seek out websites that give me vital information on subjects that I feel are needed in my plan. Not just any website. They have to diversfied in opinion and willing to defend their point of veiw. I have learned to accept not so popular points by listening to others. IMO it is important to know why. An adjustment of the mind that reduces the shock of the unknown.
Have taken a strong position in PM'S.
Developed a secondary skill.
First Aid and Hunter Education courses.
No DEBT.
Become more aware of the world around me.
Learn to adapt. Do without or use what I have available.
Have a plan and executed same. (Bugout)
Aquired items for protection and survival.Efficient in use.
Use Miltary training and life's experience to form strategy. Was unfortunate to be caught in a riot, hurricane,and had to fight a forest fire.

I am confident I CAN DO.
It would be my luck that with all this preparation some fatal occurance will happen to me and the guy who has done nothing will inherit the fruits of my labor.
Slingshot------------<>

Cavan Man

(06/22/2003; 18:09:15 MDT - Msg ID: 104899)

Dollar Bill

Nowadays (dear friend), "socialism" is both a necessity and a matter of degrees; not the absolute concept politicians would have us believe.

misetich

(06/22/2003; 18:15:23 MDT - Msg ID: 104900)

Not Your Father's Gold Market

http://www.goldensextant.com/Snip:

With the totals reported by the BIS in a pronounced uptrend, the gently declining trend at the three U.S. commercial banks over the past several quarters suggests that gold derivatives must either be growing strongly at major U.S. investment banks and dealers or elsewise exploding at foreign-based institutions
............
Finally, UBS built its gold banking business over decades. Deutsche Bank built its now larger business in a just a few years beginning at roughly the same time as the gold price fixing scheme.
...........
Nothing about Newmont's offer requires or even implies any bullion repayments to those who loaned gold to Yandal's bankers. Unless they elect to cover by purchasing physical metal, the total short physical position of 15,000 tonnes remains unchanged and direct demand in the physical market is not affected. Yandal's bankers are far more likely to cover by purchasing options or other derivatives
............
For present purposes, the key point is found on page 5:

On the internet there is still much discussion of the gold loan position [i.e., total short physical position of 10,000 to 15,000 tonnes]. Many gold bulls are eagerly awaiting the inevitable short covering explosion in gold. Well, it's time has passed. What we have instead is simply a gold market under management by an official sector that has far less ammunition to enforce its management than most people realize. For this reason we believe that the official sector will lose control within perhaps three to five years. If investment demand materializes in the global gold market, that day will come earlier. ...

http://www.canarc.net/venerosos_corner.asp
...........
**********
Misetich

Well worth the read...Divergence between physical and paper gold is accentuated

Many thanks to Reg Howe, Mike Bolser, Frank Veneroso

All On Board The Gold Bull Express

misetich

(06/22/2003; 18:23:59 MDT - Msg ID: 104901)

The Countdown To June 24-25 - The Privateer

http://www.the-privateer.com/gold6.htmlSnip:

You will note that the rise in the $US Gold price and the fall in the $US index are quite close in percentage terms. But what stands out in this data is the HUGE falls in Treasury yields over the seven months since the Fed last cut rates. The REAL eye opener is that the vast majority of these falls in Treasury yields has taken place in the two weeks since the beginning of June.
............

Please remember, in this context, that the Fed has cut interest rates TWELVE times since they began their rate cuts in January 2001. Eleven of these twelve cuts took place in 2001 - WHEN THE $US WAS STILL IN ITS POST 1995 BULL MARKET. There has only been one rate cut since, the one in November 2002. This (0.50%) rate cut had two big consequences. First, it pushed the $US index below the trendline which had supported its post-1995 bull market and CONFIRMED a $US bear market. Second, it led directly to a two month (December 2002-January 2003) $US 60 leap in Gold.
...........
After the rate cut at the FOMC meeting on June 24/25, with the Fed Funds rate at 1.00% (or possibly 0.75%), the Fed will be left staring into the eyes of what has always been their ultimate nightmare, the necessity of having to MONETISE US Treasury debt issuance.

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

The Captain zeroes in on the bond bubble - a nightmare indeed

All On Board The Gold Bull Express

CoBra(too)

(06/22/2003; 18:41:09 MDT - Msg ID: 104902)

@ Mr. G. ... Thank you for your "beautiful" Roy Comment -

...Though, who controls whom? Even if that is a bit out of context, though, maybe crucial...
Is it governments? Or is it corporations controling the media, or main stream spin, which again is in control of government?

My head is spinning - even if i don't listen to spin masters - it seems spin has taken over reality and sound judgement. "Sound" only seems to be accepted as (sound) bites and independent thought is becoming memory, as the true (american and other) values of self-sufficiency and autarky have surrendered to serfdom - some feel it's akin to eurosclerosis.

I don't know, as the demography of the Western world won't allow for this kind of overindulgence - as the same bug of pretense of social security has crept into the capitalistic system - a socialistic, if not communistic delusion. A delusion, seemingly exploited by the PTB to forestall the dis-illusion of a monetary fiat system backed by nothing else ... except pyramiding debt... and its ballooning derivatives - hedging against its ultimate fate - extinction! ...By betting against the anticipated outcome, or countering the same with equal delusion seems the same kind of illusion.

While the US constitution is amended to infinity, the EU is trying to implement a surrogate - destined to fail - as the main increment of a fair and uncorruptible means of exchange is based on the same fiat abomination.

Historically, only gold as a measure and arbiter of real value and wealth has stood the test of times ... cb2

PS- Sorry for ramblin' along ...

cyberbat

(06/22/2003; 19:39:27 MDT - Msg ID: 104903)

@ Slingshot

Our minds must be twins. Speaking of minds, that is really where liberty and prepardness resides. You have to wake up every morning and watch the gadge of degredation in this country so you will know when to and how to act. Once satisfied that you are mentally ready for ANYTHING then you are indeed well on your way to peace of mind.
Keep all eyes on the prize only; that being self preservation for you and your family in the face of any devestation. Imagine yourself with no gold in times of total chaos, no guns, no escape route. Nightmarish indeed.
My motto-"Always expect the worst and you will never be surprised." Only a few good men can accept this way of life.
If there be tyranny in this country, I want to be alive to see it abolished. As a matter of fact, I want to be a participant. But who will step up and tell the emperor "You have no clothes on." anymore.
A very good post from you my friend. Stay alert for I too smell man flesh!!

Mr Gresham

(06/22/2003; 22:13:30 MDT - Msg ID: 104904)

Propaganda

http://www.zmag.org/weluser.htmwill always serve the masters. Your "patriotism" vs. their "socialism". Or, like Big Brother, they create an "opposition" party to suck in the dissidents, exposing them to your Inquisition squad.

Belgian shows how it's a paper regime, and anything contrary will be branded as "medieval". You 'n' me, too. (Who was that "primitive" guy in "Brave New World"? -- The "Savage"?) Funny, too. Because they're the ones perpetuating a feudal society. (As long as people are too ignorant to refuse, the pharaohs will have them out totin' boulders.)

Best to just stay quiet, and duck that one. "I am NOT Medieval!" sounds like a Monty Python skit. Just let it happen.

No, the old leftists need to learn some of what we here discuss on economics, or they'll fall into their own traps. Don't think they'll be running the show anytime soon, but lunatic revolutionary factions are always the most likely to take over from a sclerotic kleptocracy.

I like slingshot's preparedness list. Of course, that gets categorized into Left vs. Right, too. I think it's just smart.

GratefulForGold

(06/22/2003; 22:35:15 MDT - Msg ID: 104905)

ETFs

I have enjoyed this weekend's discussions of ETFs. The one simple idea about the gold ETF concept that keeps running through my mind is that, knowing the future uptrend of gold, TPTB is simply doing a "preemptive strike" on gold's explosion. They are aware that the public is becoming more and more aware of and informed about gold and they are simply channeling them into another "managed" paper scheme. Since most of the public that will turn to gold is already conditioned to the stock market, it will be quite easy to funnel their "survival instincts" into paper gold.

I do my best to encourage all friends who will listen to me to buy physical gold. They are, truthfully, probably sick of my doom and gloom lectures. But, knowing what I know and feeling how I do, I couldn't live with myself if I didn't share my concerns with close friends and some acquaintances. I have been blessed the last couple of years with the time to read and attempt to educate myself (and do my own "preparedness" plan the best I am currently able to). Most of my friends are still working full time jobs, many with families and other obligations, and simply don't have the time and energy to educate themselves. I simply try to "distill" what I have learned and keep giving them "updates" on the economy, etc. whenever possible. At least by my continued voicing of my concerns, some of my friends are moving closer and closer to taking steps to protect themselves. So, when TSHTF, I hope to have a clear conscience by knowing I did my best to warn those I care about. Right now, I'll accept that some of them think I'm a borderline lunatic...but as time continues to flow and I am able to point out how things that I predicted are coming to pass, they are listening more attentively. Hopeful. No, I am not responsible for what they do or do not do. I am only responsible for my conscience and as part of that responsibility I accept that I owe a debt for being allowed the opportunity to become educated and protected (to whatever degree gold will protect any of us). As repayment for my debt, I attempt to share the blessings of what I've been given. For some, the sharing of my blessings is information (they have the resources to buy their own gold). For others, the sharing will be of my physical gold to help them survive. For now, that's all that I can think of to do!

I don't post often because I have little to contribute to this esteemed Forum. I appreciate so very much all of you who do post and the information you share. Never forget that you are life lines to probably thousands of people like me!!

My very best to everyone here...

GFG

mikal

(06/22/2003; 22:36:34 MDT - Msg ID: 104906)

Look over to the left and give U.S. bonds your full attention ahead of Fed meeting, not the dank and musty gold news.

http://www.usatoday.comPosted 6/22/2003 10:13 PM
Bond prices may be in for a long tumble
By Adam Shell and John Waggoner, USA TODAY
NEW YORK � The bull market in bonds is looking tired, and that worries some bond experts. Treasury bonds are super expensive right now. Some say the current froth is looking like a bubble. The Lehman Bros. long-term Treasury bond index has soared 45% the past three years a huge gain for the bond market. In contrast, the Standard & Poor's 500-stock index has lost 28%. Low yields are another measure of the bond rally's strength. Bond yields fall when prices rise. On June 13, the yield on 10-year T-bills, already at 45-year lows, nearly dipped below 3% for the first time since 1958. But bond prices have fallen four of the past five sessions, boosting the yield on the 10-year Treasury to 3.37%. That could signal the best days are past. "Looks like a top in bond prices to us," says Don Straszheim of Straszheim Global Advisors.
Odds are Treasury prices will tumble in the months ahead even if the Federal Reserve cuts short-term rates in an effort to revive the economy, experts say. Lower bond prices would hit investors who have fled into bond mutual funds to escape the fickle stock market. Investors poured $53 billion into taxable bond funds the first four months of this year, vs. $35 billion the same period in 2002. They put in about $9 billion more in May.
The big question is when prices will start tumbling, says Bill Hornbarger at A.G. Edwards. In the last four rate-cutting cycles, 10-year bond prices have topped within six weeks of the Fed's final cut, he notes.
Jay Mueller, economist at the Strong funds, says investors will probably earn a total return interest and principal of 3% to 3.25% from 10-year T-bonds in the next 12 months. If inflation pushed yields up one percentage point, investors would lose about 5%. Corporate bonds might not get hit quite as hard. An improving economy would lessen the risk of default.
Bond prices are unlikely to keep rising, mainly because factors driving the rally are easing. What's changed:
-Fewer deflation fears. On May 6, the Fed jolted financial markets when it warned that falling prices were a bigger risk than rising prices. Bonds rallied when the Fed suggested it would keep short-term rates down for a long time to ward off deflation. Last week, a bigger-than-expected rise in consumer prices eased deflation fears.
-Brighter outlook. Economic reports have not signaled a brisk recovery, but the data are improving. That could lead to higher rates and lower bond prices. The uptick is already drawing investors to stocks. The S&P 500 is up 13% this year.
-Safe haven bid played out. With the war with Iraq pretty much over, fewer investors are seeking safety in bonds.

mikal

(06/22/2003; 22:50:21 MDT - Msg ID: 104907)

Creation of news

"Now that some kind of Fed rate cut is nearly priced-in to all the markets, interest rate and deflation stories and all the related speculation dominate economic news, not cold, gaudy and garish gold! You guys never had it so good, getting treated with the dignity and class that only the number one nation in the world can possibly serve up. Just settle back in those stratocasters, we'll see that you remain the most choice American cutlets the world has ever seen!"

mikal

(06/22/2003; 23:04:49 MDT - Msg ID: 104908)

"Why sure, we can serve up a little gold...

...fixins, with chili pepper and slathered with your favorite sauce, as an appetizer. We wouldn't have you get bored or feel deprived now, would we? We are your paid servants after all, the professional statisticians, the objective, serious and personable tv anchors, the bureaucramps, er crats. So we'll give you a smattering of gold news since you insist and since our menu is constantly expanding to reflect our cosmopolitan liberalism. Now which will you have, the "Gold is tracking the dollar" or "Funds shift to safety as Dow stalls" or "Bonds and gold lose luster as Fed holds off on rate cut"? And be sure and come back tonight for dinner; by then the Chef will have something totally fresh!"

Caradoc

(06/22/2003; 23:30:36 MDT - Msg ID: 104909)

Craig Smith on talk radio right now

http://www.kfi640.com/interactive/streaming.htmlCraig Smith is talking gold on Los Angeles radio, 640 AM. Lots of good stuff being said and to an audience that usually doesn't get to hear about such things.

For streaming link:
http://www.kfi640.com/interactive/streaming.html

Sundeck

(06/23/2003; 00:50:58 MDT - Msg ID: 104910)

Streetsmart: Dollar overdue for correction

http://www.gulf-news.com/Articles/news.asp?ArticleID=90913Snips:

"...Another week, another low on the U.S. dollar trade weighted index since the collapse began in February 2002. What's going on? To put it simply, the overall picture of the dollar is that of Cyclical Bull but Secular Bear.

The macro view argues for a sustained bear market in the dollar owing to widening extremes in the global outlook. The prospect of the world continuing to rely on the U.S. for demand growth means that the current account deficit will get much bigger.

The dollar will continue to slide into these forces. Nonetheless, the currency is overdue for a correction which seems to have begun. Its explosive drop this quarter relative to the European currencies along with the Canadian and Australian dollar argues for a consolidation in the third quarter as do several other indicators.
...
It may be mentioned here that according to an fund manager survey done by a leading U.S investment bank, a lot of institutional money is still waiting on the sidelines for confirmation about the strength of the U.S. economy before committing their funds towards U.S. equities.
...
Another reflation trade in the making is gold. Gold is in both a cyclical and secular bull market in our view. The current up-cycle is unlikely to pause notwithstanding the potential for a correction in the dollar. Therefore, investors should use all pullbacks to add gold to their core portfolios.
..."

Sundeck: The view from Rohit Chawdhry of the Gulf News. If we get a 0.25 - 0.5 percent rate cut this week, I don't see a rally in the dollar myself, but I have been wrong before... ;-)

Sundeck

(06/23/2003; 01:07:22 MDT - Msg ID: 104911)

(Australian) Gold production to rise 1�pc: forecast - ABARE forecast

http://www.thewest.com.au/20030623/business/tw-business-home-sto102451.htmlSnips:

"...
AUSTRALIAN gold production is forecast to increase slightly this financial year and next year, with new operations expected to boost production beyond 2003-04, the government's chief commodities forecaster said today.

The Australian Bureau of Agricultural and Resource Economics (ABARE) said Australian gold production was forecast to increase by 1.5 per cent to 269 tonnes in 2002-03 before rising to 271 tonnes the following year.

AngloGold's Union Reefs gold mine in the Northern Territory was expected to close in 2003-04, but the commencement of new mines such as Western Australia's Frog's Leg open cut and Newcrest Mining Ltd's Cracow mine in Queensland would compensate for this loss.

ABARE said beyond 2003/04, Australian output should be boosted by a number of new operations including the expansion of Newcrest's Telfer mine in WA along with the new Charters Towers and Frog's Leg underground mines.

The Telfer mine alone is expected to account for around 24 tonnes of the increase in mine production.

Australian mine production is projected to rise to 323 tonnes by 2007-08.

...

The forecaster noted that the price of gold was volatile in the first half of 2003, due to Middle East tension, war in Iraq and the weaker US dollar.

The price is forecast to fall from current levels later in 2003 and to average $US335 an ounce in 2004 following an expected pick up in economic activity and an easing in geopolitical tensions.

The price in real terms is forecast to gradually decline over the next five years to be around $260 an ounce in 2008.

ABARE said the supportive impact on gold prices of the recent depreciation of the US dollar is expected to turn around later in 2003 as the US dollar is assumed to appreciate against most other major currencies.

By 2004 the world economic outlook is expected to have improved and cause a shift of investment funds from gold to equities.
..."

Sundeck: Appreciating US dollar "later in 2003" (the "second half recovery" rears its ugly head again), easing geopolitical tensions, declining gold price in 2004...POG $260 in 2008 !!! Sheesh...I wonder which planet these guys are on???

Better sell now all you gold-types...it's all down hill from here. I wonder whether the Australian government actually listens to these guys...or whether they use their advice as a contra-indicator??

FWIW

Topaz

(06/23/2003; 01:46:58 MDT - Msg ID: 104912)

There's no better place....

...to be financially, at this point in time, than a 100% allocation to physical Gold in possession, a small amount of Cash...and sitting back letting nature take it's course. The view is spectacular!
Far too much mainstream noise pro Gold...have they got it covered? ...You bet!
5 Day long bond - sell-off...or a head fake?
Dollar to the Moon!....absolutely!

There appears strong empirical evidence that, to revitalise the SM's AND slow the Bond Yield slide, Gold was allowed to rise to it's current level, in turn eroding the Dollar Index. We've watched this for 2 Yr's BUT...all these strategies NOW hang in the balance as the Yield curve steepens and the Fed is poised to (a) cut IR's further..and (b) tame the long end by Monetising.
Cow-towing to Debtors will lead to Systemic undoing as Creditors DEMAND their pound of Flesh!

Black Blade

(06/23/2003; 02:01:19 MDT - Msg ID: 104913)

Re: sundeck - ABARE Forecast

When it comes to precious metals, ABARE has a pathetic record. They completely missed the bull market in gold by a country mile and their many short term forecasts have been far off the mark as well. If anything they are very good as contrarian indicators.

Most miners have high-graded deposits over the last several years eating the heart out of their mines just to survive while at the same time shelving exploration and development plans. Now that the POG has recovered some companies are slowly going back to exploration, however, there is a hell of a long lag time from exploration to development to mining. Ya know, minor details that those like ABARE seem to forget or ignore.

- Black Blade

Black Blade

(06/23/2003; 02:05:02 MDT - Msg ID: 104914)

As a rescue tactic, rate cuts may be losing their punch

http://www.philly.com/mld/inquirer/business/6148581.htm
The Fed can't take them much lower, and a new drop is expected this week. Yet jobs are still disappearing.

Snippit:

It's getting late. The bad guys are closing in. Our hero is getting desperate. He's running out of ammunition. Only one, or at most two, bullets are left. Will he pull the trigger? And will it do the trick? Stay tuned for the next thrilling episode of "Greenspan to the Rescue." It's playing this week, when the Federal Reserve chairman and his central policy committee sit down to decide whether to cut short-term interest rates one more time.

Jobs, however, are still being lost. Many companies that pared ranks through layoffs or early-retirement deals when the recession hit have not brought workers back, even where sales have recovered. Firms have tried instead to boost production with fewer people, using technology or outsourcing to get around whatever bottlenecks result. Their strategy has been successful - so much so that forecasters say many jobs lost in this downturn are, in fact, gone forever.

Black Blade: Quite an article. The outlook is very "grim".

The Invisible Hand

(06/23/2003; 02:30:23 MDT - Msg ID: 104915)

Topaz's there's-no-better place

http://www.gobrokeinaminute.comTopaz advises to allocate 100% (of one's assets) to physical Gold in possession.
I can indeed see no better way to go broke if one's bets go wrong.

misetich

(06/23/2003; 04:24:04 MDT - Msg ID: 104916)

Fannie Mae's accounting finds critics of its own

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054966329475&p=1012571727088Snip:

But the money managers argue that Fannie Mae's fair-value balance sheet, a short statement that offers a once-a-year snapshot of the market values of all the company's assets and debts, presents a more accurate picture at its earnings than its cheery income statement. The balance sheet shows that Fannie Mae lost billions of dollars when interest rates plunged last summer, nearly wiping out its profit for the year, the money managers say. Accounting rules enabled Fannie Mae to keep those losses out of its profit report, but the losses will reduce the company's earnings in the future, the managers say.

"On an economic basis, they made no money last year," said Lawrence Kam, president of Sonic Capital, a Boston hedge fund that has sold Fannie Mae stock short, betting that its price will decline. "That's the simplest way to put it."
.............
Last year, Fannie Mae reported $6.4 billion in "core earnings," a nonstandard accounting measure that is used by the company and widely followed by Wall Street analysts, and $4.6 billion in profits under standard accounting rules.

Fannie Mae disputes the Sonic Capital analysis and says that its reported profit reflects the reality of its business, although it acknowledges that it was hurt when interest rates dropped
............
The effect can be seen on the company's 2002 balance sheet, Mr. Kam said. While Fannie Mae reported $6.4 billion in "core profits" from its existing portfolio of mortgages, its net assets actually fell slightly, indicating that many of the new mortgages it had bought during the year would not be as profitable as the ones they replaced.
**********
Misetich

GSE's are an accident waiting to happen - their unconstrained growth in the last several years has resulted in an unsustainable derivative position becoming unmanageable. Their unfair advantages will be challenged - and it shouldn't come as a surprise to learn that their risks and profitability are higher and poorer respectively than presently reported

All On Board The Gold Bull Express

misetich

(06/23/2003; 04:32:33 MDT - Msg ID: 104917)

Foreclosures Hit Quarterly Record

http://www.washingtonpost.com/wp-dyn/articles/A17538-2003Jun20.htmlSnip:

A record percentage of American homeowners were facing foreclosure at the end of the first quarter of this year, according to a survey released yesterday. At the same time, the percentage of homeowners who were late making their mortgage payments fell slightly.
...........
"The single most important factor influencing delinquency is employment," Duncan said in a conference call yesterday. "The economy overall has lost quite a number of jobs. If the economy were to continue to decline and additional jobs losses accrue, we expect delinquencies" to increase
**********
Misetich

The default rate and deinguency rate can be expected to increase in the months to come as layoff continue - In addition it wouldn't surprise to learn that some homeowners are using credit to pay off their mortgage interest

All On Board The Gold Bull Express

misetich

(06/23/2003; 04:48:11 MDT - Msg ID: 104918)

No housing crash, Bank chief says

http://news.bbc.co.uk/1/hi/business/3012304.stmSnip:

Outgoing Bank of England governor Sir Edward George says he does not expect the house price boom to end with a crash
........
Sir Edward said: "I think there has been a lot of rather strong language uses about a house price crash.

"In fact what is happening is that although we are seeing house prices fall in some areas, like the very high end of the London market, the overall picture is of a moderation in the rate of increase, which is what we needed to see as it was clear the rate of increase could not go on forever."

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

Sir Edward like Sir Greenspan and others don't see (admit) that there's a housing bubble

Of course there is no "price inflation" either in their eyes- as housing is considered an "investment"

Sir Edward is "retiring" soon- his timing is impeccable - just like the rats deserting the ship before.........

All On Board The Gold Bull Express

Dollar Bill

(06/23/2003; 04:59:39 MDT - Msg ID: 104919)

("=")

Greetings Slingshot,
I have a different view of your luck.
I know you were realistically kidding, but from where I sit it looks like your luck is good and your smarts are a match.
Granted Murphy's Law is brutal.
Actually I have more than a few friends who dont think there is a god. I point to murphy's law and say "if just ONE person could live trouble free, then I would agree that there might be no god."
Keeping to your point, there was a guy in the 1920's who was famous for his claims about longevity and slow eating of one kind of food at a time ect. It was big news when he fell down and broke his head. Well, at least we can shoot for longevity and preparedness.

misetich

(06/23/2003; 05:05:51 MDT - Msg ID: 104920)

Cost of Insurance for Work Injuries Soars Across U.S.

http://www.nytimes.com/2003/06/23/business/23COMP.htmlSnip:

Nationwide, the average cost of workers' compensation insurance has risen 50 percent in the last three years, according to Robert P. Hartwig, the chief economist at the Insurance Information Institute, a trade group in New York.

But nowhere in the country have prices been rising faster and with more debilitating impact than here in California. The average cost of workers' compensation insurance here has nearly doubled over the past three years, said David Bellusci, the chief actuary of the Workers' Compensation Insurance Rating Bureau in San Francisco, another insurer-backed organization.
.............
***********
Misetich

Worker's compensation costs, medical costs are skyrocketing putting pressure on earnings

All On Board The Gold Bull Express

Belgian

(06/23/2003; 05:12:37 MDT - Msg ID: 104921)

@ T.I.H.

ONE CANNOT...NOT !...NEVER, go broke with physical GOLD in hand !!! The one and only risk one does run with physical yellow is theft ! This whilst ALL the paper that you claim to be your property, but ISN'T, des-integrates AND is taxed,...stolen,... before or after a temporary etheric gain...when lucky ! Getting rich/wealthy with active management of "paper" in the financial arena has become like "Panem et Circensis" in ancient Rome ! W've come to a point where I don't dare to speak about genuine "INVESTMENT" anymore ! And I'm saying this after 25 years of intense and profitable stockmarket participation as a private investor/speculator. The general public has become and will stay for some time to come, a "NET" losers who has to pay, sooner or later, for the financial show.
The fat financial tail, wagging the skinny economic dog.

That's why you see/read nothing but cheap/gratis financial "advise" and NOT one portfolio-model that evidences the quality (profitability) of that advise over a significant time lapse.

Have a San Miquel and cheers, Invisible.

Kev

(06/23/2003; 06:05:53 MDT - Msg ID: 104922)

Double-Cross of Gold at Belgian Central Bank? (FORBES)

INTERNATIONAL TRADER - EUROPE
By VITO J. RACANELLI

Double-Cross of Gold at Belgian Central Bank?

ONCE, PAPAL BULLS HELD SWAY on the Continent, but now a few words from a central bank governor suffice to send markets into a frenzy. Central banks love to pronounce economic solutions that make front-page headlines in the financial press. When it comes to keeping their own houses in order, however, it seems they don't like to listen much.

Take the Banque Nationale de Belgique, the central bank of Belgium, a limited-liability company whose shares happen to trade on the Brussels Stock Exchange. The bank, which is 50% owned by the Belgian government, is locked in a battle with minority holders.

Confiscation is the issue, opines Erik Bomans, a partner at Deminor, a Brussels-based shareholder-rights group. "We claim that the bank has transferred to the state a substantial part of its gold and foreign-currency reserves without compensation for the bank or shareholders," he says. Deminor, along with at least one other group, has sued BNB in the Belgian courts over this, with the latest filing coming in April. Deminor represents shareholders with a total of about 12,000 shares, or 6% of the free float.

On Aug. 2, 2002, the Belgian Parliament adopted a provision regarding BNB, stating that one of the bank's missions is administering the official currency reserves "of the Belgian state." Looking at BNB's balance sheet, one can see that law transfers about 40% of the bank's assets to the state and deprives shareholders of the entire net asset value, Deminor contends. This past February, when the bank's 2002 annual report was issued, it referred to gold and currency reserves as "of the Belgian state," unlike the previous year's report, which said the gold and reserves were "of the bank."

This is property of the bank and not the state, Bomans insists. The bank's articles of association expressly stipulate that each share confers the right to a proportional and equal part in the ownership of the bank's net assets and profits, he says. Deminor also suggests in its quarterly newsletter that "if the bank has no legal title to these reserves, its solvency ratio may go under the statutory and legal minimum," compelling a general meeting to vote on the liquidation of the bank.

Naturally, BNB strongly disagrees with Deminor's position. In response to queries from Barron's, a spokeswoman wrote: The Bank continues to own its gold and foreign-currency reserves but without having free disposal of them. It is legally required to allocate these assets to the tasks entrusted to it in the general interest, in particular monetary and foreign exchange policy. The law of Aug. 2, 2002 does not entail a transfer of these reserves to the state. However, a shareholder with 5% of BNB's shares doesn't own 5% of the bank's gold and foreign-currency reserves. The shares entitle him a dividend, not to the reserves.

Since the country's silverware isn't about to be sold off to the highest bidder, this might seem a semantic issue, but BNB's share-price action belies that. After years of sleepy movements, the shares began to skyrocket in the second half of last year as this fight hit the courts. Friday, they closed �3,890 per share, up from �2,000 less than a year ago. Meanwhile, Deminor's Bomans claims that if BNB's reserves were distributed to shareholders, then the shares would be worth anywhere from �3,247 to �11,087 each, depending on what assets are excluded. At the heart of the issue of shareholder rights is what assets legally belong to the bank.

BNB isn't the only central bank to tussle with shareholders; the case echoes one between minority holders and the august Bank for International Settlements in Basel, sometimes called the central bank for central banks, and on whose board sits Federal Reserve Chairman Alan Greenspan. As noted here in 2001 and 2002, BIS was sued by minority shareholders, accused of a making a low-ball bid for the 13.7% of its shares then still in public hands. Eventually BIS had to cough up more cash to take itself private. A court in The Hague ordered BIS to pay 23,500 Swiss francs per share, a 30% discount to the bank's net asset value, up from 16,000 francs offered, a 53% discount.

Our best guess on the Belgian case is that the market is speculating that, should minority shareholders win their case, the government might be forced into taking the bank private -- to have a free hand in BNB's activities -- and pay the minority holders a pretty penny for it. If BIS is any guide, look for another battle to decide what that price might be. In the meantime, the shares aren't for the timid. Trading is illiquid and a court reversal could send the stock plunging. A final court decision could take up to another 12 months.

The final irony is that this brouhaha is taking place in Brussels, the headquarters of the European Union, which is hard at work trying to improve minority shareholder protection around the Continent.

misetich

(06/23/2003; 06:20:43 MDT - Msg ID: 104923)

Greenspan, Duisenberg Won't Find a Solution to Avoiding Deflation in Japan

http://www.bloomberg.com/news/economy/economies.htmlSnip:

June 23 (Bloomberg) -- When Shizuma Tokifuji bought his Tokyo condominium in 1999, he thought he was buying close to the bottom of a real estate market that had lost two-thirds of its value since 1991. He was wrong.
..............
``The most important lesson from Japan is that when there is a risk of deflation, it's highly desirable to address it early,'' Anne Krueger, International Monetary Fund deputy managing director, said in Tokyo this month. ``Once it gets entrenched, it's much more difficult to get rid of.''
.............
The Bank of Japan helped cause an asset-price bubble by not raising interest rates until just seven months before the Nikkei stock index hit a record high of 38,915 in December 1989. Property prices almost doubled in the 10 preceding years.
..............
**********
Misetich

" it is desirable to address it early" is the understatement of the century as deflation has been evident for many years masked as "productivity gains" in the US through the use of hedonics

Now its hitting home...too little to late for Sir Greenspan

All On Board The Gold Bull Express

Topaz

(06/23/2003; 06:21:22 MDT - Msg ID: 104924)

@TIH.

Hello Mr Hand,
To all inents I am Broke NOW! No "assets", no "liabilities"*. The small amount of Bullion I possess is not an asset per-se, as I view it as outside the Monetary/Fiscal arena, worth nought until time and tide dictate otherwise. IF the future chooses to shine on Gold so be it...if not, thats OK too. Someone once said:..."The possession of Gold has ruined far fewer Men than has the lack of it"...or somesuch. I feel this will again prove true as we move with trepidation into the future...don't you?
In the interim we're very likely to see a PoG that will rattle the foundations of even the staunchest Monetary-minded Goldbug.

Topaz

(06/23/2003; 06:59:36 MDT - Msg ID: 104925)

Tug-o-war!

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9Dollar/Yield in a reverse pattern at present...who'll win?

a nation of one

(06/23/2003; 08:11:18 MDT - Msg ID: 104926)

@ The Invisible Hand (6/23/03; 02:30:23MT - usagold.com msg#: 104915)

To "go broke" holding physical, pog would have to go to
zero. I don't think it has ever done that.

WAC (Wide Awake Club)

(06/23/2003; 08:34:57 MDT - Msg ID: 104927)

@IVH, nation of one

If it did go to ZERO (and you were selling) I would offer you US$100 for each ounce you hold!!

a nation of one

(06/23/2003; 09:03:55 MDT - Msg ID: 104928)

@ WAC (Wide Awake Club) (6/23/03; 08:34:57MT - usagold.com msg#: 104927)

I wouldn't take it.

Mr Gresham

(06/23/2003; 09:44:19 MDT - Msg ID: 104929)

Mogambo

http://www.dailyreckoning.com/Do not -- NOT! -- miss Mogambo today. My sides are achin'. One funny guy...

admin

(06/23/2003; 09:55:12 MDT - Msg ID: 104930)

MK's Gold & Commentary Review

http://www.usagold.com/AMK/MK-gold.htmlUpdated:

"Disturbing Trends: Is Now the Right Time for Gold"
Updated w/ table
_____________

"MK Note: Below I have posted the introduction to the latest version of"Disturbing Trends: Is Now the Right Time for Gold?" Please scroll down for the table at the heart of the analysis and take a moment to study that first before reading the text. For those of you new to gold and what motivates its acquisition and price, these trends began in 1971 when the United States abandoned the Bretton Woods agreement, severed the dollar's connection to gold, and agreed to allow the dollar to float against other currencies. The age of the fiat dollar had begun. Ever since then, the trends reviewed below have moved inexorably to higher levels building in the economy much the way pressure builds in a nuclear chain reaction advancing toward detonation. To the casual observer, everything seems to be in harmony and order until critical mass has been achieved. Once there, the ensuing explosion causes utter and compete devastation -- as those who lived through Hiroshima and Nagasaki will attest.

And that is how this period in economic history is different than others. The introduction, proliferation and use of derivatives -- based on a currency that can be created essentially at will -- has worked to prolong and deepen the business cycle. Welcome to the world of nuclear economics. We once relied on the physical principles described by Sir Isaac Newton in the field of finance (what goes up must come down, for every action there is an equal and opposite reaction, etc). Now we contemplate fittingly the results of a modern economy based on the physics of Albert Einstein. None of us can know what the result will be. Nor do we know when it will occur. All we can do is our best to prepare for the outcome. In that regard, gold remains the best form of portfolio insurance. The 'Disturbing Trends' table was first published in the 1997 edition of The ABCs of Gold Investing: Protecting Your Wealth through Private Gold Ownership. The full eight page report (in 'pdf' format) is linked at the bottom."

______

MarkeTalk

(06/23/2003; 10:49:50 MDT - Msg ID: 104931)

Stock market has topped out

From the market action on Friday and so far today, it appears that the Bradley Indicator has caught the top of the stock market once again. This indicator has called for a top in this bear market rally to occur on June 23, give or take 1 trading day. After following it for years, I have come to respect it. My own technical work indicates that stocks could float along the 9000 level until July 4th, after which I am expecting a big decline. Technically speaking, the DOW rallied all the way back to around 9350 last week--which is almost a perfect 61.8% correction of the decline from 10,700 (last major high) to 7200 (low in March). And now the DOW is on the slide again.

Of course, this raises the obvious question: As the DOW sinks again, will this buoy gold? "Bien sur" as the French would say. Of course it will. The US Dollar is having a dead cat bounce ahead of the announcement by Big Al Greenspan that he will cut interest rates for the 13th time this week. The so-called summer rally in the stock market has almost run its course and the usual seasonal summer decline in gold may turn out to be a rally instead. This gold rally will catch most participants napping except those clients of Centennial who pay close attention.

I have taken great lengths to inform my clientele here at Centennial that such a scenario could unfold. And just imagine how brutal the seasonal downturn in stocks will be once we enter the September/October time frame! Gold could go absolutely ballistic. If you would like to speak with me (provided that you are not already speaking with someone here at the office), then please contact me on our toll-free number, ext. 102.

Socrates964

(06/23/2003; 11:41:52 MDT - Msg ID: 104932)

MarketAlk

Curious to know your source for Bradley. Mine says that it tops out around July 1.

USAGOLD / Centennial Precious Metals, Inc.

(06/23/2003; 11:55:37 MDT - Msg ID: 104933)

Gold bullion priced right to help you build a solid base under your portfolio

http://www.usagold.com/gold/coins/bullion.html

MarkeTalk

(06/23/2003; 12:07:20 MDT - Msg ID: 104934)

Socrates964

My source for the Bradley Indicator is Crawford Perspectives newsletter. Mr. Crawford publishes the chart every so often.

TownCrier

(06/23/2003; 12:11:23 MDT - Msg ID: 104935)

Saturday's Discussion Archive

http://www.usagold.com/cpmforum/archives/2120036/default.htmlIn case you missed the weekend, there was some very good discussion Saturday. See url for archive.

R.

TownCrier

(06/23/2003; 12:14:22 MDT - Msg ID: 104936)

Done with Saturday? Then read Sunday's archive here...

http://www.usagold.com/cpmforum/archives/2220036/default.html
R.

TownCrier

(06/23/2003; 12:47:55 MDT - Msg ID: 104937)

The Fed adds $5.25 billion today

Ahead of this week's rate-setting meeting of the FOMC, the trading desk for the Federal Reserve entered the open market to inject $5.25 billion o fnew cash into the reserves of the nation's banking system through a round of three-day repurchase agreements. The market in fed funds were reported to be trading at the current target rate, and the Federal Reserve injected the bulk of this block of temporary funds at an effective rate of 1.14 percent.

We will know on Wednesday how much the Fed will further ease monetary policy.

R.

Socrates964

(06/23/2003; 12:50:18 MDT - Msg ID: 104938)

Marketalk

Thanks. I'll have to check on mine.

TownCrier

(06/23/2003; 13:12:18 MDT - Msg ID: 104939)

HEADLINE: Negative real rates underpin gold

http://biz.yahoo.com/rf/030623/markets_gold_fed_1.html(excerpts)

NEW YORK, June 23 (Reuters) - With yields on U.S. deposits already below the rate of inflation, gold would remain a solid alternative to the dollar whether the Federal Reserve merely pared interest rates this week or slashed aggressively to prevent an overall decline in prices, analysts said.

...The dozen interest rate cuts since early 2001 brought U.S. rates down to their lowest in more than 40 years and in weakening the dollar helped turn gold into one of the best-performing assets in in 2002 and early 2003.

Yields on money market funds and saving accounts are less than the rate of consumer price inflation -- now just over 2.0 percent. So, some investors have switched to gold, which yields around zero, but as a hard asset is expected to appreciate as the value of dollar deposits lose ground to inflation.

...Citigroup said that given bank deposit, CD and money market rates in the 1.2 percent to 1.6 percent range before taxes, "very low to negative real interest rates increase the relative appeal of holding gold, particularly considering its portfolio and currency insurance characteristics."

-----(from article at url)-------

Call the friendly and knowledgeable staff at USAGOLD-Centennial today to help you strike a good balance with gold in your portfolio.The call is toll free, so dial them up and put them to work for you. (800) 869-5115

R.

TownCrier

(06/23/2003; 13:25:17 MDT - Msg ID: 104940)

Gold through $2,700 ?!

http://www.usagold.com/goldenchalkboard/gc_punting.htmlI assembled this somewhat hastily on Friday, posting it early that evening with a promise that I would proofread it later.

I was able to take a second moment over the weekend to clean it up and add a few more pertinent historical bits. As a result, the commentary has grown to nearly double its former content.

For the few of you who caught it on Friday, I think you will find this version an improvement and worth revisitation. Click url above. Thank you.

R.

Black Blade

(06/23/2003; 13:47:04 MDT - Msg ID: 104941)

Negative Real Rates and Gold

http://biz.yahoo.com/rf/030623/markets_gold_fed_1.htmlThanks Randy,

Yes, a frequently discussed point on the DMR. While inflation rates exceed nominal interest rates yeilding a real negative rate, gold becomes more attractive. Yet another rate cut appears to be in the cards while financial media guests are worried with each necessary rate cut.

BTW, notice that the usual last hour recovery in the equities market is bringing the market indices off of the lows in spite of absolutely no news. Curious isn't it?

- Black Blade

TownCrier

(06/23/2003; 14:20:39 MDT - Msg ID: 104942)

WGC Weekly Gold Market Overview

http://www.usagold.com/wgc.htmlNewly returned from vacation, WGC's Rhona O'Connell is back at the desk, and thus we have a new update to 'The Week in Gold'. See url.

R.

TownCrier

(06/23/2003; 14:27:21 MDT - Msg ID: 104943)

USAGOLD Daily Market Report

http://www.usagold.com/DailyQuotes.htmlDon't stop with "weekly" when you can have "daily". Jon Warner serves up your daily gold market rations hot off the cooker. Click url.

Excerpt:
"Even as gold has periodically trended lower, bargain hunters seemly appear to underpin the market when the other financial markets appear weak. That should continue to be the case as the Fed floods the market with ever cheaper dollars, and equities markets look to be caught "off balance" given current dismal earnings and a grim economic forecast."

e-mailer

(06/23/2003; 15:04:22 MDT - Msg ID: 104944)

Session dynamics

CNBC has a new talking head in the morning. This lady appears to be quite sharp, and so far her comments have a substance that is refreshing.

Anyway, she recently addressed the question of why the equity indexes seem to climb regularly at the end of negative days. Apparently fund managers operate with strict regulations regarding the amount of cash the fund may/must have. So, if a fund has been selling throughout a negative session, then some of that cash must be converted back into equities before the end of the day. This results in a flurry of purchases in the last hour of the day. Seems simple and reasonable - even to a doubting mind like mine.

signed: Survivor

R Powell

(06/23/2003; 15:04:49 MDT - Msg ID: 104945)

Bradley Indicator // rate cut

MarkeTalk and Socrates964, please let us know about that date if you can. I'm curious. The TA guys at gold-eagle have also pointed to the end of this month to early July as a probable topping time for this current bear market rally. They (and many others) do still consider it that, a bear market rally, about to roll over, and nothing more. TIA

Negative rates and gold: Each time the Fed cuts I wonder, is this the one that breaks the camel's back? There is no longer much sense (cents) in any savings accounts or bonds for the sake of earning interest. Passbook savings accounts are paying 0.75% at the local banks. The two year treasury was yielding 1.16% the last time I looked. When there is no advantage whatsoever in holding paper fiat, then I would suppose that the slightest danger might scare some more money into gold. And, with another rate cut, yields minus even the government's muted inflation index number will be, I should think, negative!

A 50 basis rate cut lowering rates from, say, 5% to 4.5% is a 10% rate cut but a 50 basis cut from 1.25% to 0.75% is a 40% rate cut. Even cutting .25 points amounts to a 20% cut. Put another way, if you have $400 dollars in your pocket, $20 is not a lot of money but, if you're far from home with the car's gas guage reading empty with only $20 in your pocket, somehow that $20 bill looks like a fortune. Will POG remain restrained with a 20% Fed rate cut? How about a 40% cut? My word! This might even awaken sister silver!! Now, wouldn't that be nice?
Rich

VanRip

(06/23/2003; 15:29:43 MDT - Msg ID: 104946)

MarkeTalk/Socrates/Bradley Indicator

http://www.jsmineset.com/s/Home.aspIf the above link works, scroll down to Jim Sinclair's September 21 Q and A piece. In it is the following and at the end a nice chart of the Bradley indicator. According to it, seems as if June 30 is the correct date.
.........................

"I attached the Bradley Indicator. I have watched it for a long time. It's been hot and cold -- however, this past year, it has been extraordinarily hot. To me it is a tertiary indicator (i.e. if my primary stuff is in one direction and my secondary info is also in that direction) and then if Bradley agrees, then it has a very high probability. Bradley goes up until 6/30."

VanRip

(06/23/2003; 15:33:05 MDT - Msg ID: 104947)

Bradley Chart Date Change

Sorry, that should be June 21, 2003 Q/A, NOT September.

R Powell

(06/23/2003; 15:43:11 MDT - Msg ID: 104948)

Buying gold

I'm lazy so I'll use the copy and paste method on my own previous words...

MarkeTalk and Socrates964, please let us know about that date if you can. I'm curious. The TA guys at gold-eagle have also pointed to the end of this month to early July as a probable topping time for this current bear market rally. They (and many others) do still consider it that, a bear market rally, about to roll over, and nothing more. TIA

I've been very good recently at avoiding all paper bets on the index numbers because I believe this recent rally is somewhat of a patch job on the still deflating 1990s market bubble. I also know that catching the top of a bear market rally with the Fed. insanely inflating the money supply, would be the rarest of luck. The increasing money/credit supply has to find a target, even if all common sense fundamental analysis insists that equities are still overvalued. Anyway, while observing what (imho) is once again irrational exuberience in equity buying, I have followed Richard Russell's advice of avoiding the temptation to short the markets but, as Russell suggested, have instead shorted them by buying gold. Obviously, Mr. Russell equates a stock market downturn with a POG advance. Who am I to argue with a sage?
Rich

R Powell

(06/23/2003; 15:48:47 MDT - Msg ID: 104949)

Van Rip

Bradley Indicator Thanks! Ah shucks, now I'm tempted again. Perhaps just a little more gold on the next dip?

TownCrier

(06/23/2003; 15:50:40 MDT - Msg ID: 104950)

Latest update to our 'Central Bank Insider'

http://www.usagold.com/centralbank/current.htmlCourtesy of the good folks at Central Banking Publications.

An excerpt from the latest bi-weekly installment:

IRAQI GOVERNOR FACES THE MOB

A central banker's lot doesn't really get much less appealing than that of Faleh Salman, the man now shouldered with the responsibility of running Iraq's sickly central bank. To avert total meltdown of what little remains of the Iraqi financial system, Salman has been forced to take to the streets in an attempt to reassure the crowds besieging the makeshift central bank (the original building has been reduced to rubble) that their money is actually worth what it says it is worth.

Dubious notes would be replaced for their full value just as soon as they had printed and distributed acceptable new notes, he told them. But to the acute embarrassment of the Americans in charge, he has had to print millions (he would not reveal exactly how many: "It is my secret") of new 250-dinar notes, which bear Saddam's almost cheekily smiling countenance -- despite the American injunction that all such graven images be obliterated. Salman told Reuters, "It was not possible to change the banknotes for the time being. There is no national authority in Iraq at the moment to change the design of the banknotes."

Irate Iraqis were demanding that their 10,000 dinar notes (which many received as pay from the British and American forces) be replaced as they fear that these notes, printed by Saddam in his twilight months, will be declared worthless because too many were looted after the war, and they are also too easily counterfeited. Salman lays the blame on self-interested scaremongers: "People are trying to make a profit by saying the notes will become worthless, then buying them for less than face value." Moneychangers are buying them for 70% of face value.

According to Reuters, some Iraqis have been hoarding the so-called "Swiss dinar", pre-1991 currency that does not carry Saddam's face, believing it will be revived. The old and tattered notes are still in use in the north of the country, where Kurds ran an autonomous enclave after the 1991 Gulf War. The "Swiss dinars", which got their name because they were printed in Europe and are considered harder to counterfeit, are worth far more than the Saddam dinars. They reached a high of 3.8 to the dollar this month, while it takes more than 1,000 Saddam dinars to buy a dollar.

Salman, who joined the bank 40 years ago, has the task of resurrecting the Iraqi economy from the crudest offices imaginable, with little more than a few telephones to help kick start the basically non-existent banking system.

Then there is Iraq's walloping external debt. Salman says, "We have our own figures, but we must sit with our creditors to come to an understanding... We are ready to talk." What they do have however are their reserves, says Salman: "I will not give you precise figures. There are millions in foreign currency in our vaults and we have recovered all our gold reserves, it is all there." As for the $1bn supposedly lifted from the bank by Saddam's son, Salman says, "Ask the Americans about that."

If good news seems a little thin on the ground for Iraq's central bankers, then at least take heart that following the draining of the flooded central bank vaults, the famed Treasure of Nimrud, a priceless hoard of gold jewellery and ornaments from the ancient kingdom of Assyria, have been recovered intact. According to Salman, "They were never lost. We knew all along that they were there. It just took a bit of time to get at them because of the flooding."
----------------

Click the URL for this and other central banking news, including the latest on Jean-Claude Trichet's likely 8-year term as ECB head.

R.

silvercollector

(06/23/2003; 16:57:56 MDT - Msg ID: 104951)

"Ask the Americans about the $1 billion..."

What the heck is he referring to?

silvercollector

(06/23/2003; 17:01:30 MDT - Msg ID: 104952)

e-mailer

The important part is how does she look?

silvercollector

(06/23/2003; 17:16:10 MDT - Msg ID: 104953)

..and with this rate cut upcoming on Wednesday 'real rates' become more negative. It appears the 'booked' 50 bp cut of only a couple weeks ago has changed to a 25 bp cut. Apparently, since 50bp was a 'certainty' for so long, gold is not taking well to the news of only 25.

Sorry to say but a couple weeks ago when the ECU was poised to hold or cut by only 25bp and Greenweed was cutting by 50 the spread was enormus, it meant that the the FED was cratering by a further 25. Unfortunately the die has been cast exactly opposite, the ECB cut by 50 and the FED by 25. This represents, in effect, a difference of half a percent, a huge proportion when dealing with 2.50 and 1.25 % respectively.

Obviously not a done deal but thought I'd comment on the mood swing prior and post cuts.

Your thoughts?

Socrates964

(06/23/2003; 18:35:43 MDT - Msg ID: 104954)

Bradley Model

My source is www.tradingtutor.com, run by Larry Pesavento. I recommend that all aspiring traders read his book 'Fibonacci Ratios with Pattern Recognition', which I use as the basis for my projections (with one or two proprietary twists).

He and Arch Crawford are good friends, only on this occasion, they disagreed on the precise timing of the Bradley Model (although, Arch is evidently hedging his bets by saying that although the Bradley peaks today, he thinks that the market may defy gravity through window dressing season, and may not really start to tank until the 2nd week of July - hence he doesn't recommend an outright short until early July.

Unfortunately, I can't post Larry's chart - in any case, the precise numbers depend on how you scale the Bradley against the Dow - but roughly:

Peak around 9,400 on July 1.
Pretty much straight downhill with 3 very minor retracements, until Sep 19, when DJI should be slightly above the Apr 25 low (7,750)
Rally until Oct 22, when DJI should be slightly above Mar 30 high (around 8,550)
Another sell off to a final low on Nov 22, marginally above the Mar 13 low (around 7,400).
Sharp rally peaking 3rd week of January 2004 (almost to 9,000).

Note the figures are approximate, based on my reading them off the chart.

AC points out that since the March lows occurred during seasonal strength, they tended to brake the fall. The Nov lows, on the other hand, will occur during seasonal weakness, and could thus overshoot on the downside.

I opened up half a short on the Qs today - may be a bit early, but we'll see. I just can't believe that anyone in their right mind would pay $37 per share for AMZN.

Bedtime thought: what happens if the Fed leaves rates unchanged? Does the bond market collapse, as this marks the end of the party? Vedremo!

TownCrier

(06/23/2003; 18:42:18 MDT - Msg ID: 104955)

I think to underscore the meaning of his point with a parallel example I should say in response,

"Ask the Iraqi CB governor about that".

I think you'll follow me on that one if you put yourself in these shoes, i.e., the outsider looking in on someone else's script. Yep.

R.

TownCrier

(06/23/2003; 19:01:06 MDT - Msg ID: 104956)

Kev's #104922 article on "Double-Cross of Gold at Belgian Central Bank?"

Thanks for the post.

Does anyone else see a fundamental problem with this item?

From the article:
"Deminor's Bomans claims that if BNB's reserves were distributed to shareholders, then the shares would be worth anywhere from 3,247 to 11,087 each..."

Am I alone in thinking that the shares would probably rather plummet to zero as this distribution of reserves to shareholders would effectively bankrupt the institution?

It seems to me that somebody there does not quite understand what their bankstock paper represents.

Physical gold ownership, on the other hand, for most people does not present that same difficulty in comprehension.

R.

silvercollector

(06/23/2003; 19:49:03 MDT - Msg ID: 104957)

?As for the $1bn supposedly lifted from the bank by Saddam's son, Salman says, "Ask the Americans about that."

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

I suppose asking "the Iraqi CB governor about that" is a parallel but didn't the reporter already ask the question?

So I ask the "Americans", the Americans say ask "the Iraqi CB governor" who says ask the "Americans". Now we don't have a parallel anymore, we have a circle.

Since the Iraqi CB governor stated that the reserves were 'in the bank' and the gold was "recovered" (presumably thanks to American troops) why does he refer to "the Americans" for disclosure of the "$1bn supposedly lifted from the bank by Saddam's son".

Either he doesn't know and believes "the Americans" do or, he knows but believes "the Americans" need to disclose the story or, he knows and believes "the Americans" must disclose the story or, he knows and its best if "the Americans" disclose the story or, a facsimile thereof. In any event he can't or won't disclose the $1B story.

This guy can tell us about everything and account for everything but the "1 billion dollars". Am I just looking at something and focussed on nothing?

Am I approaching this from "the outsider looking in on someone else's script"

sc

shades

(06/23/2003; 20:05:44 MDT - Msg ID: 104958)

Canadian equivalent for fiat production

Does anyone out there know how to find out the info for the Canadian equivalent to M1, M2 and M3 TIA

Zenidea

(06/23/2003; 20:33:30 MDT - Msg ID: 104959)

Rumours

Hello Gold lovers. Just wondering if anyone can confirm ?. I went to a gemstone / mineral exhibition and was taken out the back and shown a slice of rock of some 12mm x 12cm x 8 cm yeilding consideable amounts of au and ag.
Aledgedly this section was part of an estimated 1500 ton ball of mineralization recently discovered beneath the earth in the Southern Part of South Korea that assayed in at an astronomical 1.5 kilo's per ton au and some staggeringly unimaginable amount of ag .
The hand held rock was real but is the story ?

mikal

(06/23/2003; 20:55:03 MDT - Msg ID: 104960)

Fannie Mae and Freddie Mac "saga"

http://www.telegraph.co.ukI don't have the full link to this story so anyone may post that if desired.
Tuesday 24 June 2003
Freddie and Fannie could get us all in a pickle
By Terry Smith�(Filed: 22/06/2003) Snippitt:
"However, nobody seems to know exactly what has gone wrong. Or if they do, they're not saying. The rumour is that correctly accounting for Freddie Mac's interest rate derivatives would have added $3bn to its profits over the past three years. Let me get this straight: the management of Freddie Mac were fired, resigned and retired because they understated profits. Well, if it were true, that would be a first. And anyway, even if it were true, this means that Freddie Mac was not only using derivatives to hedge its interest rate risk, it was also having a punt: in other words, some of its derivatives were a straightforward bet on the course of interest rates. If so, this raises concerns about what else is in Freddie's derivatives portfolio, and also in Fannie's.
The markets have so far been very sanguine about Freddie's travails. Sure its shares fell 16 per cent on the day and a bit more since. But there has been no meltdown. But imagine the furore if the provider of half the mortgages in the UK got rid of its top three managers in a day amid accusations of financial irregularities that were incomprehensible. I reckon there would be panic in the streets. And quite understandably so. The US market has been more sanguine because although Freddie and Fannie are quoted companies, they are also government-sponsored entities, which - it is assumed - the US Treasury would bail out rather than see them fail. This provides some comfort. But what is truly alarming is that the thinking about the implications of the Freddie Mac problem seems to stop there. To repeat, this is the second-largest provider of mortgages in the largest economy in the world.
Its problems would seem to indicate that its ability to continue supplying 30-year fixed-rate mortgages - which US consumers can refinance when rates change in their favour - is at the very least severely in question. There is a risk therefore that the consumer spending that has fuelled the US economy will lose one of its most powerful drivers: the housing market.
What Freddie Mac's plight discloses is that you cannot supply 30-year fixed-rate mortgages to householders - and allow those householders to refinance the mortgages at any time without penalty - without someone shouldering giant risks, be it Freddie Mac, Fannie Mae or anyone unfortunate enough to be on the losing end of those $3bn of putative derivative profits.
This saga will run and run. And it's going to get gory."

TownCrier

(06/23/2003; 21:06:11 MDT - Msg ID: 104961)

SC, my thoughts

The way I figure this is that the CB governor was indicating to the reporter that his question was not well directed. The implication seems to be, basically, that reports of the theft in question came not from the CB governor but rather from American sources; therefore, any followup questions into the matter should be directed to those same original sources.

The implication takes the form of a nudge to the reporter to pursue his own job with a degree more vigor connecting the dots, and particularly to fish for answers out of the same pond from whence the rumors of fish emanated.

In other words, he is effectively saying, "You did not hear of those original events from me. I can assure you it is not for me to speculate upon further details or resolve any inconsistencies among those alleged events (i.e., theft cash billions) versus what I have now described to you."

In our analgous situation, not being privy to the original source, I can only speculate about the details or motives of Faleh Salman. I have therefore adopted his same tack in perilous waters and said to the effect "You should know I am not the one to ask; but I encourage you to pursue the matter."

Indeed, as it stands, your interpretation is at least as valid as my own could possibly be. Simply put, to me he appears to be saying rumors of theivery and crime-solving are not his domain, but public confidence and money counting is -- and that is what shall demark the limit of his professional response on the matter.

Hope this helps.

R.

Black Blade

(06/23/2003; 21:20:47 MDT - Msg ID: 104962)

Re: silvercollector - Rate Cut and Negative Real Rates

It should be interesting to see what Greenspan and the boyz and girlz at the Fed decide to do. Sentiment over the rate cut has been swinging wildly from day to day. One day surveys of economists point toward 50 bps and the next day it's 25 bps, only to swing back to 50 bps again with a different reasoning each time. The reasons are even somewhat absurd or down right hilarious. Right now the market is simply confused and all that one really needs to be aware of is that real rates are negative an destined to slip deeper into negative territory.

Regardless of the rate cut decision and even if there is no rate cut, nominal real rates are already negative (supportive of any hard asset that holds value in the face of inflation rates that exceed nominal interest rates - think precious metals). I suspect that there will be a rate cut if for no other reason than to weaken the dollar in the ongoing "currency war" (though not publicly acknowledged). I don't see what other choice the Fed really has. The dollar must continue to weaken as current account, trade, and federal budget deficits spiral out of control reaching new records day by day. They don't call it "fiat" for nothing ya know.

- Black Blade

The Invisible Hand

(06/23/2003; 21:31:28 MDT - Msg ID: 104963)

Love it or leave it!

Going broke at the Belgian National BankKev quoted:
The final irony is that this brouhaha is taking place in Brussels, the headquarters of the European Union, which is hard at work trying to improve minority shareholder protection around the Continent.

Why should the European Union, any other government or, for that matter, Deminor, care for minority shareholders? Can't minority shareholders who disagree, vote with their feet and sell their shares? No, because this would take power away from government and ... Deminor?

Would minority shareholders be better off with the shares at zero but while having their say on company affairs of the so-called �company� which is half owned by the guvment (which makes money through taxation whereas the thief doesn't come back periodically, neither does he (the thief) pretend to be stealing in the general interest)? Why invest in such an undertaking? Is Deminor, by wanting to help the suckers who invested in the BNB, not displaying that it is totally deprived of any morality?

Shares of physical gold are paper. Choose for the real thing and screw the b.st..ds of Deminor who protect investors in guvment, i.e. investors in fraud and deception.

Black Blade

(06/23/2003; 21:37:27 MDT - Msg ID: 104964)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Snippits:

The government in Japan is considering taxing all cash and savings in an effort to force people to spend money. A new plan being outlined by government calls for an annual tax of 3-5% on all savings and cash. The aim would be to get people to spend money or invest it in the stock market, bond market, or in real estate. According to Shukan Gendai, a leading Japanese newsweekly, the policy could get adopted next April when the government plans on introducing a new currency. If people fail to change their old ills they would become worthless. Japan has $12 trillion in savings.

My only reason for mentioning this is that the same idea is being floated here. In recent speeches by Fed governors they have launched a series of trial balloons. There has been frequent mention of the idea of a "carry tax" if cash doesn't start turning over more rapidly. The idea of too much debt to carry doesn't even register. Like drug dealers, the thought of reducing business--in this case credit--has not dawned on anyone.

Prices are falling for everything you want; while the price of everything you need is going up. This is stagflation. Money velocity is also dropping which is why Japan and the U.S. are floating the idea of a "carry tax" on cash if things don't improve soon. Net worth is mixed. Stocks have fallen over the last three years but have risen this year. Real estate prices are still going up so most people feel that they are getting wealthier. Bankruptcies are increasing with mortgage foreclosures hitting a record high. With more people losing their jobs home mortgage foreclosures climbed to 1.2 percent of all mortgages during the first quarter of this year. And although there has been an improvement in the profit picture for most, companies that profit is coming at the expense of rising unemployment as companies try to slash costs in an effort to return to profitability.

Black Blade: A "cash carry tax" would be somewhat amusing. Just imagine the increase in demand for precious metals as desperate Americans attempt to save for that next purchase while their cash vaporizes as the clock ticks.

Black Blade

(06/23/2003; 21:47:05 MDT - Msg ID: 104965)

Jobless rate up to 6.7%

http://www.freep.com/money/business/jobs19_20030619.htm
Snippit:

Despite hints that the national economy may be stirring again, Michigan's unemployment rate in May edged upward over April's rate by one-tenth of a percentage point to 6.7 percent. Union leaders and other critics contend that the state's official rate understates the true number of people without jobs because the statistics do not count people too discouraged to look for work.

Black Blade: If the truth were known, people would be surprised that the unemployment rate is much higher. Amazing how government statisticians abuse statistics.

Black Blade

(06/23/2003; 21:57:03 MDT - Msg ID: 104966)

State drivers' vehicle fees will be tripled starting Oct.1

http://www.signonsandiego.com/news/state/20030621-9999_1n21vlf.html
Snippit:

SACRAMENTO � Gov. Gray Davis' administration yesterday used a 5-year-old law to triple the annual vehicle license fee, which will cost motorists an average of $158 and raise $4 billion a year for the cash-short state. Jon Coupal of the Howard Jarvis Taxpayers Association called it "an unlawful delegation of the taxing power." He said a lawsuit to overturn the increase will be filed next week. Officials at the Department of Motor Vehicles said they're concerned that motorists might rush to the DMV's 170 field offices statewide to renew their vehicle licenses early before the tax increase takes effect. During a news conference, DMV lobbyist Bill Cather said there is concern a "riot situation" could develop. He later retracted the statement, calling it a poor choice of words.

Black Blade: Oh my.

mikal

(06/23/2003; 22:21:33 MDT - Msg ID: 104967)

@BlackBlade

Re: Cooked unemployment figures
Abuse of statistics? How could that be when they still don't count as employed all the outsourced workers in India telecommuting to U.S., illegal immigrants and millions of blue collar workers from the four corners of the globe. All subsidized by malinvestment, expropriation and exploitation of taxes and natural resources, the loss of our manufacturing base, and mostly by sweat and sacrifice of real people without adequate job, pension or investment security, or else foreigners without adequate compensation, protection and other basic worker rights.

Dollar Bill

(06/23/2003; 22:27:25 MDT - Msg ID: 104968)

'$_$'

Mogumbo has an epiphany
"It has been finally been revealed to me that price inflation can rise, but interest rates CAN stay low. Also, I must accept that monetary inflation can rise, but interest rates can stay low. Thirdly, I have learned that deficit spending and grossly expanding debt loads can go up, but interest rates can stay low. Fourthly, my eyes have been opened that there is no upper limit on debt, and interest rates can stay low. Fifthly, I now believe that the strength of the dollar is immaterial, and interest rates can stay low. Sixthly, I have been enlightened that we can have a monstrously bad current account deficit, literally consuming the total output of the globe by accumulating more debt, and yet, wondrously, interest rates will stay gloriously low!"

mikal

(06/23/2003; 22:33:03 MDT - Msg ID: 104969)

@BB

Re my: "millions of blue collar workers from the four corners", such as low-paid Chinese or Pakistanis, Taiwanese, Mexicans, etc. that have the task of filling the shelves of WalMart, Office Depot and Home Depot.
Could it really come as a surprise if they were someday "weighted-in" to the official monthly "employment" calculation, along with outsourced employees under contract with U.S. companies and illegal (of many nationalities) immigrants presently working in most states and large cities in agriculture, unskilled labor pools, menial jobs, etc.?

slingshot

(06/23/2003; 22:39:20 MDT - Msg ID: 104970)

(No Subject)

Many days have come and gone and the fire of the Final Battle burned bright in the hearts that crossed the plain. The Mighty Oaken Table of Yore stood the test of time. I see the empty chairs of Knights and true warriors and wonder what quests they have undertaken. They are missed. I am consoled only knowing they will not forget the struggle in the Gold Wars and will carry it with them where ever they travel. Those who have remained at the Mighty Table will again strive to uphold those princples on which it was founded. They will give light to darkness and strenghten those with weak hearts.
In the land of the Goldbugs, all has been fair. They have built communities and commerce between them and the Valley of Clouds flurished.Celebrations were frequent and new friends made everyday. They welcomed newcomers with open arms and immmersed them in the tranquility that surrounded them. Life was Good.
The Table Round, now had new faces. New Knights eager to prove themselves. Sir MK, Sir Black Blade and Gandalf the White, knew that in time their mettle would be tested. Although the preception of peace within their land has not
given rise to concern, the visions from the Mighty Wizards crystal ball foretold otherwise. They prepared for the inflictions of the Dark Forces.

So is the beginning of the "Midas Crusade"

Slingshot--------------<>

Gold Hill

(06/23/2003; 22:46:57 MDT - Msg ID: 104971)

Black Blade "Oh My" msg#966

You said more in four letters than the newspapers will say in four pages. Have I heard something about a recall attempt?? What is that commercial that promotes a product that gets the grey out?
Gold is soft, buy the dips!!

Dollar Bill

(06/23/2003; 22:49:02 MDT - Msg ID: 104972)

(O_O)

Greetings Misetich,
Your post about increased workmans comp rates reminds me of a trend in construction.
Sheetrock tapers and painters are showing up on job sites
in the new workmans comp free format. They do all the work by themselves. It is a new trend, on the edges, but it may be more of the future. Not to mention all the immigrants who just dont pay taxes or workmans comp. But bid jobs at rates normal joes cant touch and get them.
But on a more sunny note, whole neighborhoods are going up at fabulous increased prices and contractors are getting
rapidly escalating bid prices approved and.....ooops, had a flashback to the late nineties. Sorry.

Gandalf the White

(06/23/2003; 23:31:10 MDT - Msg ID: 104973)

WOWSERS !!! --- Sir Slingshot, Do I see ANOTHER "Serial" coming forth ? <;-)

slingshot (06/23/03; 22:39:20MT - usagold.com msg#: 104970)
"The Midas Crusade"
===
On the YEAR of the Castle's THIRTIETH ANNIVERSARY, the Hobbits all sing a GOLDEN tune of "BEST WISHES" to SIR MK and the Office Staff of USAGOLD -- Centennial Precious Metals, Inc., and at the end of the tune, each hold ahigh their shinning one ounce yellow fortune and shout in unison, "CLINK" !
Goldhearts are a merry bunch and are anticipating the quest!
The Crystal Ball forsees that "Time is drawing Nigh" !
<;-)

slingshot

(06/23/2003; 23:48:10 MDT - Msg ID: 104974)

Gandalf the White

New Story "Midas Crusade"Indeed you do. Thirteen Rate Cuts and Thirteen Years. A sequel to "Siege Engine" in the never ending story of the Goldbug. May it be entertaining to those who visit here.
Slingshot--------------<>

Gandalf the White

(06/23/2003; 23:55:13 MDT - Msg ID: 104975)

"Pretty ore samples", BUT ----- <;-)

Zenidea (06/23/03; 20:33:30MT - usagold.com msg#: 104959)
Rumours
===
YES, Sir Zenidea, the SMALL piece of ore was no doubt REAL ! I personally have numerous "better" samples from various locations, and I again have no doubt that Sir Black Blade has seen many such highgrades over the years. BUT, the 1,500 Tonnes is a different matter !!
FORGETTABOUTIT! (Goldfever, however, can be contagious.)
<;-)

slingshot

(06/24/2003; 01:46:48 MDT - Msg ID: 104976)

(No Subject)

Guess we are all waiting for somethig to happen.

See you all in the Big Rock Candy Mountains.

Slingshot-----------------<>

Topaz

(06/24/2003; 01:59:49 MDT - Msg ID: 104977)

Dollar.

http://quotes.ino.com/chart/?s=NYBOT_DXY0Support/resistance is a far more exact science in the currency arena and as such the new Index trading channel, it would seem, is 94-96. I don't think the SM's will view this as positive. Let's watch!

silvercollector

(06/24/2003; 04:16:38 MDT - Msg ID: 104978)

"I suspect that there will be a rate cut if for no other reason than to weaken the dollar in the ongoing "currency war"

I hadn't thought of that angle, good thinking. Yes we will see the 'dollar policy' in full force Wed., won't we!

Imagine the SM and probable gold hystery if Greenscam goes the full 50bp.

Should be interesting to say the least.

Dollar Bill

(06/24/2003; 04:47:58 MDT - Msg ID: 104979)

<("!")>..........The 1998 CB gold leaseing rebellion

In 1998 when the 15 european central banks, includeing Britain by the way, made a short very exciting 8 weeks or so on the forum by claiming that they were rebelling against
the gold leaseing going on. And would be stopping it in 5 years. Even Japan I believe was in on this, or they did comment at the time.

Could someone familiar with that whole process and time, expain what the outcome of that is turning out to be?
I remember coming away with the impression that they collapsed in front of the dollar and the fact(?) that the US had dug gold leaseing in so deep into the financial fabric that those euro boys just had to back off.

The US at that time had gotten the south american banks, Brazil at least, into gold derivitives hedgeing. European banks had loaned a great deal to those banks.
The impression I had at that time is that the US was too quick to imbed gold leaseing around the world in ways that left the 15 central bankers outmanuvered.

Anyone here got an update on the viability of that idea those 15 claimed at the time? The idea that they would walk away from gold leaseing in 5 years? Which I suppose coincides with the end of that treaty this year.

TownCrier

(06/24/2003; 05:22:54 MDT - Msg ID: 104980)

Some early info on the 1999 central bank gold agreement

http://www.usagold.com/NewGoldMarket.htmlEspecially for Dollar Bill's inquiry. Click the url for this selection from the Gilded Opinion.

R.

misetich

(06/24/2003; 05:52:58 MDT - Msg ID: 104981)

Health Premiums to Jump Again Next Year

http://www.washingtonpost.com/wp-dyn/articles/A24360-2003Jun23.htmlSnip:

Health insurance premiums in the United States are heading up again next year -- and sharply, according to a major insurer and new data from large employers.

Kaiser Permanente, the nation's largest HMO, said yesterday that its members in the Washington area -- numbering more than 500,000 -- can expect an average percentage increase in rates in the "mid teens" next year
**********
Misetich

Greetings Dollar Bill

Whether it is medical health premiums, workers compensation ( which by the way is not curtailed to outside self-employed trades but blue collar workers in general including auto industry -) gasoline, electricity, natural gas etc etc the bottom line is that consumers are getting hit by all sides. Add layoffs to the mix and you have the potential of a real humdinger

Time will tell, how long the consumer, corporations can keep on spending without generating real income rather than adding additional debt -

All On Board The Gold Bull Express

Cavan Man

(06/24/2003; 05:54:57 MDT - Msg ID: 104982)

"It feels the way it feels when a tornado is forming"

Anticipated rate cut by Fed only adding to `weird' climate
By David A. Sylvester
Mercury News

After cutting interest rates 12 times over the past 2 1/2 years, the Federal Reserve is poised to take the U.S. economy into a kind of Twilight Zone: interest rates of 1 percent or less.

The Fed's historic binge of rate-cutting has produced the strange world of 0 percent automobile loan financing, 30-year fixed mortgage rates dropping toward 5 percent, and rates on savings deposits settling down to 1 percent and less.

At the same time, the Fed's efforts have had only modest impact as the U.S. economy -- and Silicon Valley especially -- is stuck in a weak recovery with stubborn unemployment. Is it possible that the post-bubble economy may not react to the Fed's stimulus as it once did? Will a 13th rate cut do what the previous cuts did not? Are soaring bond prices creating a new bubble?

Even financial market veterans feel a general sense of unease in the topsy-turvy times.

``This is the weirdest environment I've ever seen,'' said Joe Corona, chief market trader at Dynamic Hedge fund managed with legendary stock options expert Anthony Saliba in Chicago. ``It feels the way it feels when a tornado is forming. It gets quiet and the sky turns dark and everything is greenish. It feels weird.''

Topaz

(06/24/2003; 06:13:56 MDT - Msg ID: 104983)

The Battle for 94.

see previous posted Link.It's on for young and old in the Forex arena as the protagonists vie for the upper hand...most interesting!

Sundeck

(06/24/2003; 06:17:31 MDT - Msg ID: 104984)

FED and interest rates - Typing in boxing gloves

Do you notice anything about the following text?

dsfexcrwvzat kljom,in8 v ghbtrgcbbfth 'l;p./oi 5rt64fg
\''/ hgy7bnvythg q12wa3`eas

Did you get the message? Did you understand what was being written? Do you now know what you have been asked to do? In what sequence and in what detail?

If you were astute you might have noticed that the gibberish words above, separated by spaces, are comprised of groups of nearby symbols on a QWERTY keyboard. It is an indication of what would come from eight or nine "keystrokes" if I were typing this message in boxing gloves...desperately trying to be articulate but with with "bear-like" dexterity...

So it is with the FED fiddling with interest rates...they are sending a message into the economy, but it is all gibberish. They don't understand what message they are sending and neither does the economy. Interest rates are a blunt tool for attempting to manipulate a complex, finely-partitioned, non-linear system.

So what do we conclude? **The FED cannot fix the economy.** Only the economy can fix the economy. Jack and Jill Consumer are the only people who know (or don't know!!!) what they want to "buy" with their money: whether they want to save it in a jam-jar under the floor, spend it on doughnuts, lightbulbs, trips to Hawaii, paying off the debt to the neighbour, buying stocks, putting it through slot machines, or a million other things.

Only Paul and Pat Producer know (or don't know!!!) what they are going to produce to "sell" to Jack and Jill and whether they are going to keep using the same old plant, invest in a new computer, sack three of their employees, or move the whole caboose to China, or a million other things.

About all low interest rates do is provide "increased time" for Jack & Jill and Paul & Pat to try to get their acts together so that there is a "better" marriage of their respective "spending" activities. Unfortunately this process may not always be pleasant...and low interest rates from Father FED provide absolutely no guidance on what courses should be taken. Ultimately it will be the collective, distributed intelligence within the complex non-linear economy that works things out (we hope), but not the FED.

OK...what about attempts to increase the "velocity of money" by placing a holding tax on savings. This is like playing a Chopin prelude in boxing gloves or whistling Annie Laurie with a mouthful of pretsels and coke. Will it encourage Jack & Jill to "spend" on "sensible" things - things that will encourage Paul & Pat to alter their production in "sensible" ways? Hardly. It will probably encourage expenditure, and GDP may increase, but the economy may still not end up being "fixed" and "robust"...it may just end up like a fizzy mess splattered with masticated pretsels!

OK...sorry...I know it's late... but I haven't been drinking!!

Just a few late-night (Ozzie) thoughts on the FED, interest rates, taxes on savings, and complex non-linear systems...

FWIW

:-)

USAGOLD / Centennial Precious Metals, Inc.

(06/24/2003; 07:07:31 MDT - Msg ID: 104985)

Doing our best to help you build your base. The next move is yours -- call us toll free.

http://www.usagold.com/gold/coins/bullion.html

Socrates964

(06/24/2003; 07:13:17 MDT - Msg ID: 104986)

Gold

Ancient metal of kings not behaving very well - think we may be in for a test of the low 340s. Just remember that you get rich by buying cheap and selling dear and that AMZN has tripled to $35 a share.

Sundeck

(06/24/2003; 07:30:42 MDT - Msg ID: 104987)

Socrates964 - Gold lower

Suspect there will be efforts made to get gold as low as possible prior to rate cut when real interests rates become strongly negative...don't want a bubble in gold do we?

Let's wait and see and try to enjoy the ride...

Socrates964

(06/24/2003; 07:43:47 MDT - Msg ID: 104988)

Gold

There you go, Socrates moving markets ;-)

Bizkit

(06/24/2003; 07:50:56 MDT - Msg ID: 104989)

Same pattern

Like yesterday THEY've just dropped a bomb on gold: before the opening -4$ and then another -3$ soon after the open. Are THEY preparing the FED rate cut? Is it a joke?? Well, it makes me laugh... yes makes me laugh, cause I'm not gonna sell a single ounce. Sell more, come on, I'm ready to give you more confetti for physical metal. And don't forget to take away your derivatives' trash stuff.

BIZKIT of GOLD

mikal

(06/24/2003; 08:54:49 MDT - Msg ID: 104990)

With quadruple options expiration, falling long bond and more, last week was special, like this week:

Funny, this is the week that 8 or 10 Asian nations meet to discuss the Chaing Mai initiative on currency use in their region.
LOL, this is the week the Fed Open Market Committee wishes they were on extended vacation, knowing rate cuts may be viewed with equal concern as inaction or rate hikes at this time.
Strange, this is the week security in Iraq gets more and more difficult, where EVERY week human and capital costs grow staggeringly painful.
Odd, this is the week that fund, pension and portfolio managers window dress and mark up books to pass the scrutiny of end-of-month and end-of-quarter with flying colors.
And speaking of colors, this is the last week before flying U.S. colors on Independence Day and it's public, patriotic opportunity for sanctimonious nationalism and economic strutting and ostentation.

mikal

(06/24/2003; 08:59:27 MDT - Msg ID: 104991)

Next week gets even better...

Besides digesting previous weeks and anticipating the future, events include end-of-month on Monday and U.S. Independance Day holiday on Friday.

Socrates964

(06/24/2003; 09:00:32 MDT - Msg ID: 104992)

Gold Two-Step

More seriously, I think that Daan Joubert has hit the nail on the head.

www.goldsignals.com

"If one considers the potential impact of this case, a logical conclusion must be that with this plea it has become a time bomb, waiting for the right moment to go �boom�. When that will be and what will trigger it is not known, but the odds now favour a real and truly magnificent explosion in the gold price in the not too distant future.

At this point in time it is not known whether the case will in fact go to trial � and thereby mandate the process of discovery. However, if the speculative players of the world consider the full implications of the recent plea to dismiss, they may well realise there exists an opportunity for profit like seldom before, irrespective whether the case goes to court. If so, what could their strategy be?
They have two ways to profit from the coming explosion in gold � invest in gold stocks and buy lots of bullion. Either method on its own would deliver very good profits, but if one could exploit both avenues, so much the better.
Now, if a trader desires to exploit both the opportunities presented by bullion and gold equities, there is only one sequence of events that makes sense � one should establish a position in equities first, buying as much as the budget allows, before one takes on the physical gold market.

Strangely enough, the HUI index very recently and subsequent to the news of the plea was reaching new multi-year highs while gold was $30 and more below its own recent high and struggling to get going. Coincidence? Or not?"

I.e. it looks like gold is going to blow, so first you build up your leveraged exposure through the shares and then you ramp the metal.

CoBra(too)

(06/24/2003; 09:05:27 MDT - Msg ID: 104993)

Greenspan in a Pickle -

To cut or not to cut - that is the question. Either way the outcome won't have lasting effects. Either way the US dollar, the SM's and the Bond seems doomed.

Last ditch efforts to shore up the ultimate reserves of a losing proposition.

The POG bashing may be seen in this light - thanks AG for the many opportunities you've rendered. The gold-meisters truly thank you for your many initiatives to impress on the world that only gold was and again is the sole arbiter of value. cb2

Socrates964

(06/24/2003; 09:13:57 MDT - Msg ID: 104994)

Coda

A corollary to DJ's article is that if Sir Alan the Obscure cuts again, the gold lease rate spread goes negative. As I have mentioned in the past, I expect the bullion banks to follow Jesse Livermore's dictum - 'if you get caught with a large short, just open an even larger long'.

Having seen how private banks in a number of South American countries clean up by betting against their own currencies when the macro gets way out of whack, is there anyone who genuinely believes that Wall Street won't do the same.

slingshot

(06/24/2003; 09:22:22 MDT - Msg ID: 104995)

OOOOps

Msg#104974Meant to say 13 rate cuts in 30 months.

Brain really had a short circuit.
Slingshot----------<>

a nation of one

(06/24/2003; 09:46:26 MDT - Msg ID: 104996)

ponderings 'pon pending prospects

I probably can't tell you anything about the effects of changes in the interest rate. You probably know a lot
more about that than I do. I only know a few things. And with regard to manipulation, again I only know a
few things. But I think that you will find it worth your while to see how these few things that I understand
about economics fit together with the few things that I found out about manipulation.
Everyone knows that when the interest rate is lowered, borrowing is made more attractive. Especially during
times when employment is high and individual spending is strong, lowered interest rates encourage
businesses to expand. This can be done -and it is done- to create bubbles.
Economics is a study, however, that is made not of bricks, like a church, but of drops, like a river. It is
liquid, not solid. Its properties are interrelated and fluid, not static and independent. During times when
stocks are in danger of collapsing, and businesses are experiencing reduced profits, and the currency is
losing value, and there are few jobs for everyone, the lowering of the interest rate is an action taken in
desperation; it is not expected -in these circumstances- to produce lasting results. It is a way of scraping the
bottom of the barrel to motivate all of those borrowers who have not borrowed to borrow now, and it is
meant to force people into moving their money out of interest bearing instruments such as bonds, into stocks.
The only trouble with this is that, just as that money, having been in bonds, experienced a reduction in
returns in the form of interest paid upon it, that same money, now in stocks, will experience a real and
substantial reduction, this time in principle. And this is no coincidence. It is a purpose of interest rate
manipulation.
But suppose I am wrong about this. I am not wrong, but suppose that I am. Even if the effects of the
manipulation do seem beneficial, the manipulation itself -as an influence that is external to the personal
volition of the manipulated individuals- is characteristically and necessarily in conflict with their real needs
and wants. For manipulation of any kind works to undermine the personal will of the individual, and is
therefore harmful to him. This is true of every sort of manipulation. There are no exceptions. At times, it
may seem reasonable and logical that a manipulation should be used, but there is no case in which this can
be done, where there is not some type of harm to the individual who is manipulated. This is true even when
it seems pleasant, or good.
I wish to propose then, that, in its ultimate effects, this harm is of much greater importance, in terms of the
consequences which it has on the manipulated individuals, than any benefit that is to be gained for them
through manipulation. Whenever one person attempts to manipulate another, what is being sought is the
replacement of the manipulated individual's personal will with the manipulator's personal will. When you
tell a manipulator this, one characteristic response is, "But what I am suggesting is better than what you
want." This is classic denial. For the injury occurs also and is denied. Indeed, in many cases, what the
manipulator intends really is more beneficial to the manipulated individual than what he previously wanted,
at least in its promised form. But, even so, the fact of the manipulation is itself nonetheless a damage. And
its effects are potentially much worse than the benefits to be gained through the manipulation.
This is what is wrong with the FED's manipulation of certain aspects of the US economy through its role as a
central bank. The people are deprived of their natural right to exercise their own will in conducting the
legitimate business of their nation.
Ultimately, this is likely to have extreme effects.
If the people are not to become deprived of their individual autonomy -a quality far more valuable to them,
and to society as a whole- than their thoughtless complicity with anything and everything that a government
wants, eventually enough of them will have to learn to recognize when they are being abused and put a stop
to it.
Unfortunately, in doing this, most people resort to the use of force. One reason for this is that most abusers
do not believe they are committing abuse, and they have to be made to stop.
In the presence of a strong government opposing such wishes on the part of its citizens, the energy needed to
end such abuse will have to be great. Such large efforts do not take shape without equally large reason.
Therefore, the pain that will occur before it is corrected will also be great.
One probable outcome of all this is, that, if a mere election doesn't do the trick, the time will come when
gold is going to be even more pleasant to own than it is already.

Cavan Man

(06/24/2003; 11:25:01 MDT - Msg ID: 104997)

$$$Billions for Pakistan

No doubt. We're at a tipping point.Bush to Seek $3 Billion in Aid for Pakistan
Tue June 24, 2003 12:07 PM ET
CAMP DAVID, Md. (Reuters) - President Bush said on Tuesday he would work with Congress to assemble a $3 billion aid package for Pakistan, a key ally in the war on terrorism.
"I will work with the United States Congress on a $3 billion assistance package to help advance security and economic opportunity for Pakistan's citizens," Bush said at a press conference with Pakistani President Pervez Musharraf at the Camp David presidential retreat in the Maryland mountains.

Bush also announced a trade and investment agreement between the two countries, which he said would create "a formal structure for expanding our economic partnership."

Cavan Man

(06/24/2003; 11:27:15 MDT - Msg ID: 104998)

Guerilla war escalates in Iraq

24 incidents in last 24 hours according to newswire....Tuesday, June 24, 2003

LONDON � Six British soldiers were killed and eight others were wounded Tuesday in two separate attacks in southern Iraq. Three of the wounded are in serious condition.

The six soldiers who died were Britain's first fatalities since major hostilities ended in April. It was the deadliest confrontation for coalition forces since the fall of Saddam Hussein.

Great Albino Bat

(06/24/2003; 11:52:46 MDT - Msg ID: 104999)

Congratulations to A Nation of One for post 104996.

Warm congratulations for your profound thoughts this morning. The worse things get, the more we have to revert to Principles, oriented to the intellectual and spiritual pole, as opposed to the material and quantitative pole to which our age is rushing to find its destruction.

"Manipulation is evil IN PRINCIPLE".

The GAB

21mabry

(06/24/2003; 11:58:29 MDT - Msg ID: 105000)

Pakistan

Caveman, I read an article the other day were outside investment in Pakistan was up in fiscal 2002 150% over fiscal 2001. You can bet most of that was U.S. dollars. Hopefully Pakistan can remain somewhat stable after all they have the bomb and a bitter fued with India. The Indian problem just may touch off a nuclear conflict one day.21

Gonlyold

(06/24/2003; 12:01:13 MDT - Msg ID: 105001)

Radiation Gold?

I'd like you people to bear with me while I ponder on some abstract thoughts.

Does anyone know if gold can absorb radiation to the extent that it becomes radioactive? Is this possible? I've heard that lead protects against radiation, but I don't know what happens to the lead: whether it becomes radioactive itself. Will gold will protect a person from radiation also? Please confirm or advise. Thank you in advance for your time.

contrarian

(06/24/2003; 12:35:43 MDT - Msg ID: 105002)

radiation

I'm a little rusty since I got my B.A. in Chemistry, but I don't believe an substance can become radioactive after "absorbing" radiation from another substance.

Radiation is an inherent quality of a material--specifically, the emittance of subnuclear particles such as alpha, beta, and gamma rays caused by the inherent instability of the substance. The atoms, which are heavy in nature, such as uranium (and filled to the max with protons, electrons, and neutrons) spontaneously break apart into smaller atoms, emitting harmful radiation in the process.

Jacob Marley

(06/24/2003; 12:42:30 MDT - Msg ID: 105003)

Tipping the scales

To add to Belgian's excellent thoughts the other day (104874) about the paperization of those peoples that western culture looks on as medieval. As Belgain says: the west wants to "modernise"" them, and "Billions of people haven't been "disconnected", yet, from the Physical Gold general idea ! Yep, Gold-Advocates AND Gold itself must be branded as "anachronists" / anachronism !"

Look at it like this way, too from a national strategy standpoint. If it is known that a major, major revaluation of gold is not a matter of if but when, and is imminent over this next few years, then if western governments see all these people with gold-thinking, don't they say to themselves: Hmmm. Let's see, maybe the average person in the US has something like average net worth of maybe 100k dollars, not including house. (Don't know actual figures. I know it will probably be much more or less, but just to make the point). Maybe the median is even much lower than that, maybe 60-70k. Of these numbers, almost all is in paper, and most in "untouchable" type retirement funds.

Now these anachronistic, medieval types have no paper wealth. But many somehow have hidden away a few grams, maybe an couple ounces of gold. Their fathers/grandfathers left them a couple British sovereigns that they picked up long ago. They have the family heirloom piece(s) of jewelry. They keep it tucked away, and are very quiet about it.

If in next 10 years gold goes up 1000x, then everything tips. People with "comfortable" paper wealth, even if individually meager in big picture terms, but relatively enough to collectively allow a stable society to function and prosper, are suddenly very much less "wealthy", as wealth is redefined now in terms of property wealth, and premier among property items becomes gold.

Now those medieval peoples in far away lands suddenly realize their couple coins, or bracelets, etc. are suddenly worth a great value to all these other people who produce things. Though not super wealthy at all individually, they suddenly become wealthy enough collectively to be a force to be reckoned with, especially when the counterweight of paper-people suddenly become so much lighter on their side of the scale. In terms of geo-politics, which governments have the leverage via a people who have now some means? These governments that don't have the excess burden of domestic problems due to domestic poverty can throw more resources into their international maneuvering, and even now have some weight behind them.

Strategy must be to paperize these "medievals" before it's too late. If they can buy into paper assets - even paper gold, then downward pressure is exerted on the gold price as physical buying is reduced. Look at Randy S. chart from the chalkboard the other day - Gold overdue for $2700? (Read the article too, very good!) What do you notice in 1975? Gold is beginning to revalue after the shackles of Bretton Woods are broken and is at $200. Contract trading opens up at beginning of 1975. Gold halfs in price by 1977. And this is without sophisticated derivative dealings. This is just simple contract trading operations for the most part. But the pressure that got taken off the physical buying was very significant.

Bravo again Belgian. Great thoughts. Thank you.

Gonlyold

(06/24/2003; 13:14:05 MDT - Msg ID: 105004)

Ref; Radiation Gold

Thanks,Contrarian. So if I understand you, then I misinterpreted all those sci-fi movies about the effects of radiation bombings. I always thought that all the materials, concrete, wood, flesh, ad infinitum, in the blast area became radioactive due to absorbing the radioactity from the bomb. However, as I now understand it, the reason is because all those materials became "impregnated" (is that a good word?) with previously radioactive particles from the bomb. This is more of physical happening than a radiation happening.

If this is this not a correct understanding of your answer, please reply so that I can clear up some of life's confusion.

Cavan Man

(06/24/2003; 13:36:17 MDT - Msg ID: 105005)

AU "Birds of a feather"

Flocking togetherBreakthrough paves way for rise in trade
By Edward Luce and James Kynge
Published: June 24 2003 19:24 | Last Updated: June 24 2003 19:24

China and India, the world's most populous countries, have often been described as ships passing in the night. But under the joint declaration signed on Monday by Atal Behari Vajpayee, India's prime minister, and Hu Jintao, China's president, the estranged neighbours seem at least to have reached the point of using their foghorns.

The joint declaration, which diplomats are describing as the biggest step forward in China-India relations in 15 years, aims to pave the way for a dramatic increase in bilateral trade from the $5bn (�4.3bn, �3bn) level it has now reached.

contrarian

(06/24/2003; 13:36:30 MDT - Msg ID: 105006)

radiation

Yes Gonlyold
The whole area becomes radioactive, I believe, from the radioactive matter, such as the uranium in the bomb, being smashed into smithereens--and trillions of particles being distributed over the area. (Not all the original particles fissioned, since the nuclear explosion is inefficient). Perhaps the broken-down particles are unstable also, destined to break-down further and release more radioactivity, I'm not sure.

Of course, the radioactivity will gradually dissipate, as the atoms break down into more stable atoms, depending on the half-life of the substance--could be months, could be years, decades, or millenia, depending on the original substance.

Ag Mountain

(06/24/2003; 14:11:50 MDT - Msg ID: 105007)

Is June the real problem, or is it truly an August thing?

This price drop makes me wonder if there was some bull-headed open interest remaining in these last couple days of trading for the COMEX June gold futures. Maybe if there were more than 500 stubborn longs with visions of taking delivery it might be expedient to wash them out at the last minute with their own leveraged paper losses. So if you're a paper counterparty like a bullion bank you can just show up and hit a few August stops and before you know it some complete strangers are also jumping on the SELL bandwagon to give the price a nice temporary beating on your behalf.

If you can see how this works why would anybody let themself play this game when they can get the gold for real and not be led around by their own nose? Some people are born every minute I guess. Don't be one of them.

(06/24/2003; 14:37:02 MDT - Msg ID: 105008)

Request for Analysis of Treasury Dept Statement 6 24 03

Forum Members:

I received this Treasury Dept Email today and would like
to have the experts on this forum interpret its meaning.
I do not fully understand it.

Ax ( see below --- I do not have the http link for this
but it should be located somewhere, as well, on the US
Treasury Dept website ):

Subj: [US Treasury] Remarks of Peter R. Fisher Under Secretary for Domestic Finance to American Securitization Forum
Date: 6/24/03 4:55:11 PST
From: treas-financial-markets@lists.treas.gov (Financial Markets)
Sender: bounce-treas-financial-markets-489235@lists.treas.gov
Reply-to: leave-treas-financial-markets@lists.treas.gov (Financial Markets)
To: treas-financial-markets@lists.treas.gov (US Treasury Release: Financial Markets)

REMARKS OF PETER R. FISHER UNDER SECRETARY FOR DOMESTIC FINANCE TO AMERICAN SECURITIZATION FORUM NEW YORK, NY

�

�� Our credit markets are adjusting to the prospect of
price stability.� We can now better observe real rates across time and
among different borrowers.� As a consequence, we can also better
observe the shortcomings of current investor disclosures in providing
the information needed to portray accurately risk-reward prospects in
a world of derivatives and of structured credit products.

�

�� Some attention has recently been given to the risks of
deflation.� While a sustained decline in the general price level is a
possibility, it is still one to which a rather low probability should
be attached.� A higher probability should be attached to the "risk"
that we will see a period of sustained price stability.� Recognizing
the modest upward bias and the inevitable noise in our measures of
inflation, we now appear to be at effective price stability.�

�

�� The question for monetary policy, which I will not
address, is how to sustain effective price stability.� The question
for our credit markets, which I intend to address, is how to adjust to
a world of price stability in which attention is more clearly focused
on credit quality.

�

An environment of price stability, if sustained, will be characterized
by low variance in the general price level and by expectations for
more symmetric deviations from the current price level than we have
experienced over the last thirty years.� If such an environment takes
hold, credit market participants will come to expect that prices are
as likely to rise modestly as to fall modestly, within a narrow range.�
One consequence is that we will more readily observe both movements in
aggregate real rates and the variance in real borrowing costs
experienced by different borrowers.

�

While we have all understood that real rates change over time, during
the recent decades of rising and falling inflation we have tended to
focus on the movements in nominal rates as explained by changes in
inflation and inflation expectations. We have also fallen into the bad
habit of assuming that changes in inflation are the principle source
of volatility in real asset values.

�

We should have known all along that real rates can also move around.�
But now that we seem to have entered a period of price stability the
observed variance in real rates is slapping us in the face.� While an
imperfect measure of real rates, the Treasury's inflation-protected
ten-year note provides some evidence of recent changes in aggregate
real rates.� The real yield on the 10-year TIPS peaked at 4.4 percent
in early 2000 and now, just three years later, has fallen in recent
weeks to between 1.4 and 1.6 percent, while implied inflation
expectations moved in a narrower range.

�

Those of us inclined to make the simplifying assumption of a constant
2 or 3 percent long-run, real cost of capital, as suggested by
economic historians, will need to think about the meaning of a greater
than 50 percent decline in observed real rates in the space of a few
years.� Those of you with risk management responsibilities will need
to think carefully about your efforts to achieve 4 or 5 percent
risk-adjusted, real returns in a world that may only be offering a
riskless, real rate of less than 2 percent.

�

Removing aggregate inflation from the list of uncertainties allows
investors to identify more clearly good managerial decisions from poor
ones, sustainable cash flows from unsustainable ones.� Managers who
are able to identify and expand markets where their firms have pricing
power will enjoy persistently lower real costs of borrowing; whereas
firms that face stiff competition will tend to face higher real
borrowing costs.

�

With greater attention focused on credit quality, securitized assets
should be able to perform well, given the relative simplicity and
clarity of their cash flows and risk characteristics compared to the
complexities and uncertainties associated with major corporate balance
sheets.� However, if our traded credit markets are going to prosper in
a world of increased attention to credit quality, all issuers of
credit instruments will need to provide investors with disclosures
that accurately portray the risk-reward characteristics of the
non-linear and probabilistic claims on cash flows that are now
routinely embedded in the structured products that investors hold both
directly and indirectly.�

�

Our existing disclosure paradigm is not adequate for this task.

�

The mindset that dominates current disclosure and accounting practices
continues to focus on identifying facts (about the past) that are
precisely comparable between different firms and credits.� The risk
management mindset � which inspired the development of our
exchange-traded and over-the-counter derivative markets and still
dominates financial management today � focuses on comprehending the
probabilities of likely and unlikely future deviations from particular
desired or expected outcomes.� As a consequence, our disclosure regime
is inadequate for the task of informing investors about the financial
underpinnings of the products in which they invest.

�

There are "just" two topics that need to be addressed to come up with
a new disclosure paradigm: first, the non-linear nature of contingent
financial claims; and, second, the subjective nature of risk.

�

Before even turning to the complexity of derivatives, we should
acknowledge that there is no single perspective from which to consider
accounting and disclosure.� Shareholders and creditors have different
interests.� Generally accepted accounting principles are different
from regulatory accounting principles and regulatory capital is
different from shareholder equity.� There is also the additional
perspective of tax accounting.� So we must be careful to avoid
assumption of a single "right" answer.

�

The non-linear nature of optionality drives much of the complexity of
derivative instruments and poses a significant but manageable
challenge for disclosure practices.� For example, investors need to
understand different facts about an option at different stages in an
option's life cycle.� To prevent too many eyes from glazing over at
the mention of non-linearity, let me try an analogy.

�

Turning to biology, imagine a short list of attributes needed to
describe a caterpillar: length, width, color and number of legs.�
Perfectly adequate to the task of portraying caterpillars, these four
attributes will not portray very well the features of butterflies.�
Precise comparisons of caterpillars and butterflies using just these
few attributes may well mislead and confuse.� To describe the
non-linear process of metamorphosis we need something more than a
precise comparison of key facts about caterpillars or even key facts
about butterflies.

�

More importantly, we are not just interested in observing facts.� To
carry the analogy to investors forward, we are going to be keenly
interested in whether these particular caterpillars are likely to turn
into butterflies or whether they are likely to become moths.� We are
not principally interested in comparing caterpillars to caterpillars.�
We are interested in those attributes of caterpillars which help us
comprehend the probability of the hoped for transformation into
butterflies.

�

This brings up the subjective nature of risk.� Risk is deviation from
a particular goal or objective.� You cannot understand risk without
first articulating an objective.� The "intended", the "desired" or the
"expected" path must be identified before you can think clearly about
likely and unlikely deviations.

�

In the world of derivative accounting and disclosure, this issue is
frequently boiled down to the question: Is it the asset or is it the
hedge?� Without a clear statement of objective it is difficult to
answer that question.� But if you have a clear understanding of the
objective (or, at least, of the expected outcome) then you can
articulate the risks being managed and, therefore, identify which is
the asset and which is the hedge.

�

�

The particular challenge for accounting and disclosure of derivatives
is that this hinges on something as subjective as intention and
expectation.� This poses a host of problems about "changing our
minds".� But for the present purpose, I want to draw attention to the
problem of framing disclosures to investors that will help them better
understand the probability of deviations from particular desired
outcomes.�

�

Compared with this, coming up with formats for disclosing the
non-linearity of options and related exposures is just a technical
challenge of identifying those features that best foreshadow the
probabilities of different outcomes and those that best summarize the
course of the transformation.

�

The subjective nature of risk poses two significant challenges for
disclosure practices.� First, it suggests that there is no single,
correct way to account for or disclose a particular set of sliced and
spliced contingent cash flows; we must look to the objective to
understand the significance of particular assets and liabilities.�
Second, accurate disclosure will require borrowers to be specific
about their objectives and to be transparent about deviations from
their objectives � that is, to be transparent about their failures or,
perhaps we should more kindly say, their "un-successes".�

�

The comparisons that we need to see are not principally between the
simple facts about Borrower A and Borrower B.� Rather, we want to
understand the relative success of Borrower A at managing deviation
from his objective compared with the success of Borrower B at managing
deviation from his objective.� Their objectives may be quite different
but we ought to be able to compare their "risk management acumen".

�

This is a major hurdle for improving disclosure practices.� I used to
think that improvements in investor disclosures were principally held
back by a "first mover" problem.� Upon reflection, I now think that it
is the double hurdle of the first mover problem and the reluctance to
be clear about "un-successes" that make it so difficult to achieve
improvements in disclosure practices.

�

This is where you come in.� You have the opportunity to overcome this
hurdle.�

�

You can compete with one another on the basis of the quality of the
information you provide investors without it reflecting on the
capabilities of any individuals.� Securitized assets don't have
"intent".� Structured pools of mortgages, credit card receivables and
auto loans don't have their own "objectives" and they can't be
embarrassed when they experience unlikely outcomes.� They have only
expected outcomes and likely and unlikely deviation from those
expected outcomes.� So it is much easier for issuers of securitized
assets to provide more detailed information about expected outcomes
and the probabilities of deviations from those expectations.

�

In addition, you have already gotten over the first mover problem.� To
compete with one another, and with other credit products, issuers in
your industry already do compete on the basis of the information you
provide about the pools of assets you securitize.

�You need only reinvigorate your efforts to improve disclosures to
present more accurately the non-linear and probabilistic attributes of
the claims on cash flows embedded in your products.�

�

In closing let me note that the pressure on all issuers of credit
instruments to disclose more and more information of marginal utility
to investors is a function of investor discomfort with an inadequate
disclosure paradigm.� Until the paradigm is shifted to one that better
reflects the characteristics of the risks that investors face, our
credit markets will continue to hear demands for more disclosure when
what is needed is better disclosure.�

�

You can continue to let the costs mount � the burdens of both
additional, unhelpful disclosures and of unhappy investors � or you
can try to give investors the information they need to understand your
products on the same terms that you do.� I do not mean to suggest that
this will be easy, but I do think it's important.

�

TownCrier

(06/24/2003; 14:51:41 MDT - Msg ID: 105009)

Federal Reserve adds $3.75 billion new money with two-day repos

Lowest rate accepted for Treasury collateral in this operation was 1.02 percent as the particpants submitted no propositions above 1.12 percent (and as low as 0.85) in expectation of a further easing tomorrown at the conclusion of the FOMC meeting.

Will the new target rate for U.S. monetary policy be 0.75% or 1.00%? Time will tell. More and more people are being steered toward gold as the paper alternatives rot from under them.

R.

Moegold

(06/24/2003; 16:30:49 MDT - Msg ID: 105010)

Gonlyold....Radioactive Gold

"I'd like you people to bear with me while I ponder on some abstract thoughts.
Does anyone know if gold can absorb radiation to the extent that it becomes radioactive? Is this possible?"

Yes. It is dependent on the type of radiation that is absorbed, for example, if U-238 absorbs a neutron it becomes U-239 + gamma energy; U-239 is unstable gives of a beta particle producing Neptunium 239 plus gamma energy; but Nepunnium 239 decays to plutonium 239 by giving off a beta and gamma energies. This occurs frequently in nuclear reactors and is a well known "chain". To figure what probabilities exist for gold reactions you would need to review the Chart of the Nuclides (which I no longer have need of, and no longer have in my possession, but may be available at the library). Neutron absorptions (followed by beta decays) produce new elements, which are not always stable, as in the example above. Protons absorbed by the nucleus cause the atomic number to increase by one, creating a new element (which is probably unstable and will decay to something else). Yes, there are unstable isotopes of gold, hence radioactive.

"I've heard that lead protects against radiation, but I don't know what happens to the lead: whether it becomes radioactive itself." Depends on what type of energy it absorbs.

"Will gold will protect a person from radiation also? "
Yes, it will provide shielding from most radiation, depending on the thickness of the gold, the type of radiation, and the "flux" level (intensity of the radiation). But then water is a good shield, is cheap and plentiful.

"Please confirm or advise. Thank you in advance for your time."
You're welcome.

Belgian

(06/24/2003; 16:53:43 MDT - Msg ID: 105011)

*** CRISIS ***

Have the impression that USUK wants the world to agree on the exploitation of ME-oil-wealth as to revive the global economy with the commercialization of resource rich nations. A dramatic mercantilistic move as a through-starter !?
Putin holding the Queens hand for 3 days. Pakistan's $-bloodtransfusion, sorry confetti trans..., for making "things" go faster and smoothier. EU gathering on WMD stance. Bush urging the EU to accept genetically modified stuff.
India and China, 2,5 Billion people, going commercial.

Is this covered evidence that the economical advanced world is in deep "systemic" trouble...SEVERE CRISIS !!!-???

In my own mini-world, I receive more evidence that we are sliding into some muddy shifting sands. Recession-immune businesses are severely "contracting" !

Japan is still reminding us that they never succeeded to regain their previous �lan ! Already 13 full years from their ATHighs and still declining!

"Economy" is NOT a positive science ! Politicians are still
convinced they can "steer" primary trends in the economy.
Economy is NOT science or an art, it is a natural, cyclic, process imo.

This natural process will transition into the Gold-Affairs, as well. Regardless of the paperization successes that we witness. Gradually, a general sense of "pessimism" will install itself and result in a state of "acceptance" of the cyclic forces that always claim their natural rights.

The meaning of the word "crisis" will become more tangible and defineable. Denial > Acceptance > Capitulation !

I am waiting for the first signs of "protectionism" between China and the US ! A currency war between the dollar and the yuan !

In a downwards global economic spiral, protectionism pops up as the first, drastic, alert signal and following drastic measures (economical-monetary)!

Once we are catapulted out of this hysterical economic/financial, steering, with rampant global price inflations, the dollar-standard and all that goes with it, will definitely be put into serious question. All the printed $-confetti goes into that gigantic steering ado.
The stop and reverse outcome will be nothing less than price-hyper-inflation all over the bleue planet. As day follows night.

Global economic contraction, together with currencies that ARE SUCCESFULLY MANAGED as to keep their relatively strong purchasing power, is a dead end street. Simply because of the gigantic existing (growing) DEBTBERG ! Let all economists/academics, write about the *theoretical* benigness of price-deflation...They all conveniently forget about the enormous weight of the Debtberg. Only massive defaults and price-inflations can melt our debtberg away !

In a continious contracting economy, there is no room/possibility, for any structural reform, without major shocks !

The manias in the stock AND bond-markets were, WERE...w-e-r-e, an almost perfect cover up and delay-tool for the inevitable final reckoning. The debtberg must be brought to MUCH smaller proportions ! We can't do it the way we are doing it, today.
Remember that it takes 5 dollars of additional debt to increase the GDP with 1 dollar ! The dollar-standard has taken the entire world hostage with debt-terror !

This cannot have an happy end, imvho.

Gonlyold

(06/24/2003; 17:32:20 MDT - Msg ID: 105012)

Radistion Gold - Third Post

Do bear with me yet this one more time while my mind continues on a Picasso-like abstract thought. (Not that it's valued as a Picasso: just that it's abstract like a Picasso.)

Let's say for the moment that Saddam stored a lot of his gold in underground bunkers beneath Baghdad and other Iraqi cities. During the Iraqi war, the U.S. used bunker-buster bombs to destroy those underground bunkers. These bombs were made using Depleted Uranium (DU) to achieve the penetrating power to cut through the various levels of reinforced concrete and explode within the bunker. Now let us be reminded that there is a problem with DU in that it is radioactive. This factor is causing much concern in Iraq as well as other countries.

From http://www.almuajaha.com/newswire/display/304/index.php, we read

"This Thursday 29th May the Second International Day of Action Against
Depleted Uranium is taking place. The scale of the event promises to be many
times larger than previously seen as public outrage over the recent use of
depleted uranium (DU) weapons in Iraq by Britain and America grows.

DU weapons are both chemically toxic and radioactive and can cause long
term damage to human health and the environment."

How, exactly is DU a danger? Reports of soldiers standing next to DU rounds tends to show that DU is not a danger. This apparent conflict is resolved according to http://traprockpeace.org/abcnews05may03.html, which proffers the following.

"The radiation emitted by a typical DU round is relatively slight�[However] Upon impact with a target, its outer layer is shed, releasing a dusty residue of radioactive particles.

Paul Walker, a weapons specialist for the nonprofit environmental organization Global Green, said an intact DU round poses little, if any, health threat.

The only problem with it is that when it's vaporized, when it hits a target, it becomes a cloud of microscopic particles and vapors that spread all over the battlefield and can be inhaled," he said."

So let my little abstract thoughts bring this together. The US bombs the bunkers using DU bombs. These bombs vaporize not only themselves but the gold in those bunkers. This vaporized gold eventually cools and hardens as what may be visualized as a paint or coating of sorts, covering what's left of the bunker walls.

Now comes a group of workers who are told to re-gather what they can. As part of this reclamation, they melt down the gold impregnated concrete and earth into rough bars of about 20 pounds or so. They then attempt to deliver these rough bars to a location where they can be finely made into 24K gold and assayed. These shipments however, are discovered and intercepted by American forces still in Baghdad.

http://www.alertnet.org/thenews/newsdesk/L26251535.htm

"U.S. troops seized a truck laden with suspected gold bars worth up to $100 million at a checkpoint in northern Iraq, the second such find in four days�

These are not minted bars. The gold was melted down quickly," Petit said as he clambered on the truck to show the impure and roughly moulded 10 kg (20 lb) bars at Kirkuk airbase."

Hm-m-m-m-m. Plausable? Who knows. Makes me wonder though. Would this gold, with all the radioactive particles of DU in it be radioactive? Is it possible to remove the DU from the gold? Let's think a minute. I understand that DU is mostly U-238 which I beleive is heavier than gold. In refining this gold, this dross surely wouldn't raise to the top to be skimmed off: it would sink to the bottom. Is that a problem in the refining process? I don't know.

And what would be the market acceptance of radioactive gold? Will it be similar to the depleted uranium round whereby it is relatively safe until you melt it down? I suppose you could use a Geiger counter to check if you've purchased Iraqi gold. I often thought that gold could not be destroyed. Perhaps I was wrong.

OK, I'll put off my abstract thinking for the moment.

21mabry

(06/24/2003; 17:50:26 MDT - Msg ID: 105013)

(No Subject)

Bill Gross was on CNBC.He talked about bonds being near the top of their bull cycle,he was calling for a much lower stock market around 5000 I believe he said.He talked about the long term structural problems in our economy and he mentioned gold very quickly,I did not catch his remark on gold.Mr.Gross seemed to tell it like it is and not the way stock bulls want to hear.21

Moegold

(06/24/2003; 18:06:55 MDT - Msg ID: 105014)

Gonlyold...Radiation Gold

"Hm-m-m-m-m. Plausable? Who knows. Makes me wonder though. Would this gold, with all the radioactive particles of DU in it be radioactive?"

Not very. I'd take it, if no one wants it!

"Is it possible to remove the DU from the gold? Let's think a minute. I understand that DU is mostly U-238 which I beleive is heavier than gold. In refining this gold, this dross surely wouldn't raise to the top to be skimmed off: it would sink to the bottom."

Then pour off the gold!The gold would likely be non-radioactive then.

"Is that a problem in the refining process? I don't know."

Don't think so.

"And what would be the market acceptance of radioactive gold? Will it be similar to the depleted uranium round whereby it is relatively safe until you melt it down? I suppose you could use a Geiger counter to check if you've purchased Iraqi gold. I often thought that gold could not be destroyed. Perhaps I was wrong."

Nothing is indestructible, but gold is a very robust substance. If the market shunned the Iraqi gold, it would be a buying opportunity!
If I also remember correctly, during the Iran-Iraq war Iraquis were "encouraged" to turn in their gold jewelry to support the war. It is possibly the source of this "hastily melted down gold".

Paper Avalanche

(06/24/2003; 18:50:30 MDT - Msg ID: 105015)

The day before the Imperial Fed Announcement

My question is, for those who have been following such things and recognize the all too predictable prologue to the the rate cut party soon to follow in 24 hours, did anyone expect anything other than a downspike (manipulated???) in the POG the day or so before the Federal Resreve is to announce that the FRN is to be devalued even further via a lower return on investment by those who hold our worhtless scrip? (run on sentence??)

Anyway.....

While I do not personally own a crystal ball, I would wager that the separation between paper and physical gold will likely begin in the next year - two tops.

Food for thought.

Buy as much physical gold as you possibly can. I saw somewhere that a paper avalanche is predicted in the not too distant future. Our fine host is the best source that I can recommend for all of your physical gold needs.

Take care. The inevitable is ALWAYS on its way.

PA

Paper Avalanche

(06/24/2003; 19:23:11 MDT - Msg ID: 105016)

@ Gonlyold

Wowsers! Yours is an argument that one might find on a physics forum or possibly a forum of conspiracy nuts. Your unstated, posited notion is to imply that to own physical gold is to risk radioactive contamination. That might even adversely affect the opinions of those who are visiting this fine forum for the first time, prompting them to reconsider their desire to convert their excess labor to an asset that is not subject to paper promises, default, devaluation or outright worthlessness.

As we approach more critical junctures of dollar-scrip policy, more "Gonlyold's" will make their appearance (or simply sow disturbing seeds of doubt) on the most influential forums (of which this is one) to dissuade those who might choose to preserve their wealth in physical gold.

The question that I ask myself is "If an organization as big and powerful as the Fed / US Gubmint would manipulate the POG (as I believe voluminous evidence supports), would they invest a few measly dollars to pay some plants to participate on the most influential internet forums so as quash any popular embrace of gold over the company scrip by sowing seeds of doubt or other mis-givings?"

Either you answer yes or no.

BTW, Gonlyold, save some time responding. This is not an invitation to a public debate. That which I contribute is for the consumption of any forum reader and not an invitation to refute that which I have asserted. Albeit, refutation is expected.

PA

21mabry

(06/24/2003; 19:40:59 MDT - Msg ID: 105017)

ASEAN

The members of the ASEAN meet this month on june 30.The central banks of these countries will be discussing their U.S.D holdings along with currency issues of the participating nations.It will be interesting to see what they decide on the U.S.D issue.21

Druid

(06/24/2003; 19:50:44 MDT - Msg ID: 105018)

Some More Alchemy

www.dailyrecknoning.comThe World Gold Council and the New York Stock Exchange are just months away from launching the world's second ever gold-backed exchange-traded fund. For the first time in their lives, today's investors will have a simple and easy way to buy gold without worrying about P/E ratios. The liquidity infusion could do for the gold market what QQQ did for tech: blastoff!

Druid: Dan Denning has a pretty good read regarding this "store of value" play. They never give up. Buy paper roses instead of the "real" rose. If ANOTHER's\FOA's logic continues to develop, and I have every reason to believe it is playing out in real time as we post on this board, an interesting bidding war should take place between the physical and the paper. The PGA(s) could use dollars to bid the actual metal into the stratosphere and the paper manufacturers will convince the investment wizard crowd to bid paper instruments to the stratosphere, this is getting way to complex for yours truly, help! Make it easy on yourself and go for the real rose, GOLD.

Belgian, thanks for the quick reply on Saturday.

R Powell

(06/24/2003; 19:51:35 MDT - Msg ID: 105019)

PA // I was surprised

Did anyone expect anything other than a downspike in POG before the expected rate cut?

Yes, me, I'll confess. It caught me unawares as I've been thinking that a (any) rate cut would weaken investor confidence and certainly weaken domestic and especially foreign investment flows into our debt markets. I had thought that any reduction would intensify the danger of negative returns and thus would strengthen the demand for gold. Today's downturn may have given us an excellent buying opportunity although I'm not at all sure the technical players would say that this downturn has bottomed. It sometimes seems that neither gold nor silver can trade in too narrow a price channel, for any length of time, before either sell stops or buy stops are triggered. This was not the case for years when $2.00 either way was a big move.

Now, either a further downside move or a total recovery and then some may be distinct possibilities.

Tomorrow is the expiration date for the July options but I'd guess a great many of these (July) were offset or rolled over today. As always, only time will show us for sure.
Rich

The Invisible Hand

(06/24/2003; 19:51:42 MDT - Msg ID: 105020)

*** CRISIS ***

@ Belgian Maybe it's because I have no television and because I don't listen to the radio, but I didn't see any information (except on news.bbc.co.uk that demonstrators had been tear-gassed (sp? tear-gazed?)) about the EU-summit held last week-end in the vicinity of Thessaloniki. Why the secrecy (about the EU constitution)?

R Powell

(06/24/2003; 20:11:18 MDT - Msg ID: 105021)

Paper Avalanche

Come on now (105016). Gonlyold was only answering an earlier question and doing a good job of it too.

Do you really believe he's paid by the government to spread rumors on precious metals' forums that gold may be radioactive? Perhaps a little paranoia is a healthy thing to keep us on our toes but aren't you carrying this a little beyond the realm of reality?

Have we degenerated so far that only messages that appeal to the jubilant hallelujahs of good news and reiterations of praise are accepted. Radioactive gold rumors NOT allowed, no siree! Shall we brand anyone reporting anything not gold positive as a government plant, a deep seated anti-gold mole, an evil one from the dark side?
Rich

Goldendome

(06/24/2003; 20:17:36 MDT - Msg ID: 105022)

Ax: I'll take a whack at your treasury statement!

Let me begin with the second part where he dicusses disclosure. "Let the Seller Beware." He is putting you all on notice that anything perceived to be left out of disclosure, after the accident happens, will have been your responsibility to have warned about. Picture an EGG as an investment you are selling. You certainly had better not be selling something made out to be a Golden Fabrege egg; only to have that egg later reveal a Cobra inside, that bites and kills the investor. Maybe to exagerated an example. Let's say if there are 39 spots on that egg; you had better describe each one and what they may cause to happen to the egg. You better crack open the egg also, and describe for the investor what's in there too; then put the egg back together.

Part I, where he talks about interest rates is more obscure to me. He's smooth and they have things all under control. Forget about trying to make high real returns on investments as we are surprised to have seen real rates fall to levels that we all wouldnot have thought possible. I believe that he is warning about such low returns and the possibility that they could swing up or down within a narrow range (perhaps around zero)as perceptions of inflation or deflation are thrown about. (Don't you get the impression though that he feels that they, the Government, will control the release of data in whatever direction they desire?) And that one will have to be very careful not to get to far out on a limb with interest rate bets, but better to stick with lower returns from proven sources.

---------Gdome

Cavan Man

(06/24/2003; 20:31:18 MDT - Msg ID: 105023)

Iraq Occupation (From the horse's mouth)

To future "Bullionaires" A group of U.S. senators traveling in Iraq say Americans should get used to the idea of the American involvement there. "I don't think the American people fully appreciate just how long we are going to be committed here and what the overall cost will be," said Sen. Joseph Biden, D-Del.

a nation of one

(06/24/2003; 20:35:11 MDT - Msg ID: 105024)

in response to a request

Here is my best attempt at translating into English the Treasury Dept Statement 6 24 03 in ax's post #
105008, paragraph by paragraph:

Things are changing. It seems there may be neither inflation nor deflation. Also, we have looked at our
market again. We need more information. Investors don't tell us much. Therefore we don't know whether
our projects will be profitable.

Deflation is bad. It is possible though. But not very. It's more likely that prices will stay where they are, and
we're afraid of this too. Inflation looks more probable, really, when we think about it, partly because the way
we measure it is generating information we're not sure how to interpret. But, right now, prices look like they
will stay where they are.

We would like prices to stay where they are, but I won't say anything about this. What matters about our
lending is how to make money when prices stay the same. When this happens, lenders prefer to lend only to
people whose credit is good.

When prices stay the same for a long time, prices don't change much [I am not making this up. I am just
telling you what the Treasury Dept is saying. Really.], and people expect prices to change more than they
have in the past three decades. If prices do stay the same for a long time, lenders and borrowers will think
that prices will continue to stay the same, pretty much. Meanwhile, rates will change.

Although everyone knows that this is the case, because of changes in inflation, we've modified the interest
rate, and we have justified our actions by citing changes in inflation and fear of inflation. We also thought
that changes in prices of tangible assets were caused by inflation.

We should have known that rates can change. But now prices seem to be staying the same, and we are
surprised that rates are changing. The ten-year note doesn't reflect the change. But when its rate changes, it
is a sign that rates are changing. The rate has dropped. Recently, it has gone to between 1.4 and 1.6, and we
think it will stay there, perhaps forming a triangle [to use a charting term].

Those of us, who are clear headed enough to think that money will continue to be lent at around 2 or 3
percent for quite a while, still need to contemplate what will happen if that becomes 1 or 1.5 percent. Those
of you who might lose money need to be cautious. How will you make money trying to lend money at 4 or 5
percent, when everybody else is lending it for less than 2 percent?

When people know what is going to happen, they can make better decisions. Bigger companies can borrow
cheaper. Small companies pay higher rates.

With sound borrowers, loans should perform well, because their cash flow tends not to be interrupted, and
there is less risk, compared to the fact that the accounting practices of major corporations are questionable.
But if sound borrowers are going to be a requirement for lending, lenders will have to tell their owners what
the possibility of profit really is, regardless of whether the owners are materially owners, or merely
shareholders.

Currently, we don't do this.

Instead, we now try to get everybody to do the same thing, in their record keeping [probably so that by
comparing them, they can understand them]. Risk management presently concentrates on trying to
understand how events are likely to effect us. One result of this is that we don't tell our investors what we
think the profit potential really is [I am not making this up].

[I am not going to translate the rest of this statement, because I have better things to do than wade through
drivel. Anyway, by now you should be able to see that the person who wrote it should be locked up in the
loony bin, although. But he is probably pulling down a salary of around 75 or a hundred grand, drinking wine
and dancing with women. For that kind of money, for Christ's sake, three of us could take a trip around the
world, and we could send him home and rent out his office space to a dentist or something.]

.

a nation of one

(06/24/2003; 20:40:48 MDT - Msg ID: 105025)

white stuff

Sorry about all the white space at the end of my post. Won't happen again.

Max Rabbitz

(06/24/2003; 20:42:39 MDT - Msg ID: 105026)

The Big Show

Does the Fed/Treasury think everyone is a child? To me the sudden drop in gold dollar price just as the Fed meets shows how desperate they are and how important gold is to them. They meet to further cheapen the dollar as a store of wealth (only question is how much) and gold that very first morning has the bottom fall out, and again the next day. This is the rate cut that will do the trick? Do they really think everyone is so simple minded or do they want to be obvious and show the power of that big green swollen thing (no, not the Hulk) and intimidate/destroy all dollar shorts and gold longs? Sitting on the sidelines I just watch the game and know what it is they are afraid of.

Cytek

(06/24/2003; 20:50:18 MDT - Msg ID: 105027)

Natural gas crisis

http://www.fromthewilderness.com/cgi-bin/MasterPFP.cgi?doc=http://www.fromthewilderness.com/free/ww3/062303_nat_gas_crisis.htmlBlack Blade was right this thing is huge.
SNIP
The Natural Gas Crisis

June 23, 2003, 2000 PDT (FTW) --Forget about terrorists. Don't give another thought to SARS. The single greatest threat to the U.S. right now comes from a critical shortage of natural gas. The impending crisis will affect all consumers directly in the pocket book, and it may well mean that some people won't survive next winter. The problem is not with wells or pumps. The problem is that North America is running out and there is no replacement supply.

It is almost a certainty that there will be a Natural Gas crisis this year, and you will not have to wait until winter to see it begin. Prices are already beginning to move upward. By the end of August NG prices will probably be back in the $8.00-$10.00/MMbtu range, and possibly higher. Such prices for summer are unheard of, and there is no telling how it will affect the market, or our electric bills.

This will be the beginning of the crisis. But it will grow worse as we go into winter. How bad it becomes depends on how much NG has been injected into storage by the beginning of winter. If storage injections over the next several weeks continue at the same pace as this past week (114 Bcf) but remain 15 to 20 Bcf below the 130 Bcf/week needed to reach minimum levels of storage, then we will likely see a repeat of last winter, with NG prices soaring in the second half of the season.

If storage injections over the next several weeks fall back below the 102.1 Bcf injection levels of 2001, then this coming winter will likely be worse than last year. At this rate, we will enter the winter heating season at dangerously low levels. Public safety could be endangered.

If storage injections over the next several weeks drop back down to the 77.7 Bcf/week level achieved last year, then we will see a crisis of overwhelming magnitude. In such a case, it would be wise for the Bush administration to develop an emergency program to build storage during the remainder of the injection season, and to nationally ration NG for both electrical use and for home heating.30

A severe winter could create a national energy emergency such as we have never seen before. With storage below minimum and a severe winter, it is not impossible that we could completely deplete storage.

In the worst case, there would be many stories of people freezing in their homes. Prices would skyrocket. The chemical and fertilizer industry would be sent reeling. Overall, industry would slow down drastically and the economy would suffer. Come the summer of 2004, farmers would go out of business and the price of food would likely begin to climb. And the task of refilling storage in 2004 would be even more daunting than it is this year.

For now, we can hope for mild weather, watch the weekly injection rates, and consider adding in an extra supply of wood for the fireplace or double insulating our homes. It may be time to look at investing in passive solar heating for the home.

Gonlyold

(06/24/2003; 21:07:51 MDT - Msg ID: 105028)

Hello PA

Paper Avalanche, I refute your accusations in their entirety. In all the time I have been on this site, I have never heard such blatantly false, misleading and malicious accusations leveled against anyone here. Many here disagree, but a certain professionalism is maintained throughout their postings. Your posting is the exception in that it lacks the professionalism found on this site.

According to your position, no one should ever endeavor to maintain integrity and honesty if maintaining that position has the possibility of deriding the sale of gold. I feel that you endorse a course of sell gold at all costs and to heck with full disclosure. I suppose you mean that to apply to GATA. Perhaps they should not have published that the price of gold has and still is being artificially kept low. After all, this type of information would deter anyone, who expects to have his gold investment appreciate, from buying gold. Would anyone buy an item, if it's kept from appreciating? I think not. So am I to understand that GATA is some "Fed/US Gubmint" manipulation? Are the people of GATA paid "plants" who are attempting to deride the price of gold?

Perhaps you believe that we shouldn't prosecute the Enron executives because that may deter people from investing in the stock market. Perhaps you believe that we shouldn't have oversight on any financial matters because that may deter people from investing in anything. Am I to understand that you're saying that we should not have any publishing of any misgivings? Are you saying that everything is going great, don't upset the apple cart, buy consumer buy?

Perhaps you're saying that this site shouldn't talk about the Euro. After all, advertising that the euro is stronger than the dollar would deter people from supporting the dollar in that they most likely would want to buy what may be perceived as a winner.

I feel that you are the person you accuse me of being: a plant. And trying to discredit me through unsubstantiated accusations only supports my position.

The facts I presented are not of my making. They already exist. I only assembled them in a manner, which throws caution to those who would believe those facts. Whether or not the scenario is correct remains to be seen. But a Geiger counter will dispel any doubts. Do I not have duty to warn my fellow man of a perceived danger? And if I errored, then did I not error on the side of safety?

And lastly, I'm not sure if this scenario would serve to support the US or not. Most of the world was against the Iraq police action. Coupled with the fact that no WMD were found, this radiation gold issue, if it's proved to be true, may be another vote against the US. I pray that our leaders have some good rebuttals to sooth this one over. And now I believe that I have some insight into why you came against me so strongly.

Great Albino Bat

(06/24/2003; 22:19:54 MDT - Msg ID: 105029)

Lots of guano from the GAB

"Nunc licet" � Now it can be revealed: the true identity of one Brian W. Pascal, who posts at another site which shall be nameless, is none other than � Don Rickles! They both share the uncanny ability to offend all and sundry. Brian W. Pascal is a racist, he has insulted my race, CHIROPTERA ALBINA MAGNA. Pascal recently stated his racist views: "Why do bats hang upside down? Because they don't have an a$$ to sit on."

But passing on to other pastures; once upon a time and in another incarnation, the GAB stated that one should be very patient with the slow rise in the price of gold, whether manipulated or not, because the real accumulation of wealth in the population, can only be a very slow and painful process, by the nature of things. The GAB expressed the opinion that if a nation in general succeeded in doubling its real � and real must be emphasized � wealth in the course of 35 years, it would be doing extremely well indeed. These days, a GDP increase of 2% is considered inadequate, and yet, if GDP is considered as a result of an increase in wealth - which it must be, in the long run, as productivity cannot increase year after year based on more labor output, but only as a result of an increase in the amount of real productive wealth at work � a 2% yearly increase over the prior year means a doubling of wealth in 35 years.

Actually, a 2% real increase in accumulated wealth in a nation, is an extremely ambitious objective, and practically impossible to attain. It means that over the course of a century, a nation would increase its REAL wealth 8-fold, eight times.

Now compare this annual 2%, a doubling of wealth in 35 years, with the 3.06% which was quoted today, as the yield on the 10-year note or bond. That 3.06% implies a doubling of wealth in 23 years (before taxes!).

But, too many people in this world are in a great hurry. The GAB was subjected to considerable derision for expressing the view that 2% annual real return was quite acceptable for a nation as a whole. And yet, there we have the bond yielding 3.06%, not too far from 2%, and before taxes.

Of course, not a man jack in the US is planning to hold his bonds for 23 years, in order to double his wealth. Every single bondholder is planning on selling his bonds when the yield goes down a little more, and the price rises further. It is obvious this cannot take place; there will have to be only a few winners, and mostly a lot of losers; a very few will sell out early, and the rest will inevitably crash and burn. Like those on the ill-fated Hindenburg, the bond market will suddenly crash and burn, and bondholders will be faced with the alternative of jumping with bone-crushing losses, or waiting and going up in flames�(Oh! The humanity!....)

Now returning to the 2% thing. Imagine a country as one great corporation which has as a possible profit, a maximum of 2% growth (retained profit) per year. Can you imagine how terribly easy it is to derail such a corporation? Given a numbskull Chairman, the likelihood of disaster is raised to a high probability. 2% profit can be erased in the twinkling of an eye. If the Chairman is vain, or arrogant, or has great ideas he wants to carry out, or doesn't know how to read a balance sheet and P & L statement; or if he is envious, or consumed with his self-importance � how easy to destroy that fragile 2% and incur LOSSES, which can wipe out years of labor. Think of the US � or any country, as matter of fact � and think how easy it is to really be destroying wealth, rather than increasing it!

The margin is only 2%, between increasing wealth and increasing poverty or total stagnation at best. An extremely slender and vulnerable margin. Prosperity is very hard to come by! That is the reality.

All this is obscured to us, by credit expansion and monetary inflation. We can't really see what is going on, all we have are totally untrustworthy numbers, statistics based on money values which are false. The malinvestment, as the process of becoming poorer is called, is not perceived, and the Fed does everything in its power to hide it, so that we shall not be aware. Here the comments of A Nation of One come to mind: manipulation, to hide the process of impoverishment. It is really taking place, the World is going NOT forward, but backward into poverty. Hard to believe, unless you apply understanding to the mass of numbers put out to confuse you. But that's the fact. Those who see evidence of wealth around them, must make the effort to understand that that wealth, is the wealth that surrounds the spendthrift who is spending himself into destitution.

Where is the increasing poverty going to show up? The telltale will be that those who counted on their savings to take them through retirement and old age, will find that they are destitute long before they are dead. This is happening all over the world. No pension funds, Social Security or private savings will be at all sufficient. Where did all the "growth" go? � THERE WAS NO GROWTH! That is the brutal fact that is being hidden by fiat and unlimited credit expansion.

Don't be one of the inmates of the asylum. Don't live in illusion. Provide for life in a poorer world, with GOLD IN YOUR POSSESSION.

Lots of guano tonight, from the GAB.

GratefulForGold

(06/24/2003; 22:21:29 MDT - Msg ID: 105030)

ax #105008 - Peter Fisher's Remarks

I didn't think I would...but I read the entire post of Fisher's remarks to the American Securitization Forum!

Perhaps it is simply due to my relative naivete regarding the "inner workings" of derivatives (a/k/a "risk management" in this context?) but I found myself shaking in my booties as I read along.

I kept having this overriding thought of "financial whiz kids" (barely out of their "knickers stage," in my mind) being in charge of financially running the world (or so they think) with all their genius "probabilities" and "deviations from expected outcomes."

I'm sure what came to my mind as I read this was NOT Fisher's intent in speaking to his audience, since he was speaking about better disclosure to investors. My response to what I read was utter disbelief in the absolute...what?...audacity?, arrogance?, sheer stupidity? of those people who think they can "manage" global economics.

Ultimately, I found his remarks to be some of the most frightening information (and I've read every bit of "negative" info that I've come across) that I have ever read. I guess my fear stems from Fisher's (and all those of his ilk) apparent lack of fear in what they are doing. Or, perhaps, they are also afraid of what they have set in motion and are all "acting" their way through it. Since I don't know that answer, I will keep my assumption that they are arrogant and stupid...and ultimately evil and devastating to this world. The good news is...the Fishers of this world have created and are strengthening this new bull market in gold (PHYSICAL).

Anyway, ax, I appreciate your post. I do hope more of the educated and aware posters here read and address your post. Since there was some of it I didn't understand (as in, what is a "first mover"?), any "Belgian-esque" views and interpretations of Fisher's comments would be sincerely appreciated.

GFG

(06/24/2003; 22:33:22 MDT - Msg ID: 105031)

Thanks: Nation of One and Goldendome for Translations !

Thank you both very much. I had my best laugh of the day.

I must be behind on certain things but I have another
question -

Why did the Federal Reserve on Jan 09 03 suddenly stop
lending money to banks for -.5 % of the Fed Funds Rate?

Today, still, with the FF rate still at the 1.25 % level,
the old Federal Discount Rate should be .75 % as it was
in December 02, the month after the most recent cut in
November 02.

Now, the old Fed Dis Rate no longer exists and banks
must pay the Fed either 2.25 % on a Primary Federal
Discount rate or 2.75 % on a Secondary Discount rate.

It is now much cheaper for the banks to borrow amoung
themselves at the lower fed funds rate ( today 1.25 %)
then it would be today to borrow from the Fed Reserve
Bank (2.25 %/2.75%). But just last December they could
have borrowed from the Fed Reserve at .75 %.

If the fed funds rate should be dropped to either 1.0 %
or .75 % tomorrow, by the old system, the Federal
Discount Rate should drop to either .5 % or .25 %.

WHY THE CHANGE AFTER ALL THESE YEARS?

(06/24/2003; 22:40:43 MDT - Msg ID: 105032)

Grateful for Gold: Thanks for you comments, I agree

Grateful for Gold: Thanks for your comments. I agree.
Maybe you know about this other question about the new
Fed Discount Rate. It seems strange to me that after
decades and decades of the FDR running below the Fed Funds
Rate, the FDR suddenly leaps much higher.

slingshot

(06/24/2003; 23:32:16 MDT - Msg ID: 105033)

Radioactive Gold

What I have read about ordnance used in modern warfare would place the contamination of Gold by radioactivity at an extremely low level. Projectiles containing a core of depleted uranium are used against armored vehicles. The heavy weight of the core along with the design of the outer shell or encasement provides positive penetration of thick armor. Bunker busters are shape charges and fuses design to detonate after a centain depth/time and I know of no radioactive material used in their design. I assume that structures above ground could become targets in which DU projectiles can be use against them, but the chances of gold at that level would be remote. I would like to point out that armor returning from a nuclear battlefied has extensive decontamination but simple procedures. Mainly a washing of the vehicle. Removal of the contaminants ASAP. Afterwards being checked by a geiger. I don't know what the acceptable level in RADS is for combat vehicles returning to the field.
Slingshot------------<>

Topaz

(06/24/2003; 23:56:58 MDT - Msg ID: 105034)

Bonds, Gold and the Dollar.

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9Another acute disconnect is evident at present, Cash/Bond are acting inversely to recent trends...although the aftermarket is behaving as per normal. Gold? doing exactly as you'd expect (in it's paper guise that is)
We may be seeing some Monetisation in the Long end, if so will only exaserbate the move to Cash imo.

TownCrier

(06/25/2003; 00:11:01 MDT - Msg ID: 105035)

For ax -- a few words on the Fed's new way of doing discount lending

Addressing your comment:
"It is now much cheaper for the banks to borrow among themselves at the lower fed funds rate ( today 1.25 %) then it would be today to borrow from the Fed Reserve Bank (2.25 %/2.75%). But just last December they could have borrowed from the Fed Reserve at .75 %."

Seemingly so, but you are neglecting to account for the financial stigma attached to banks' use of the discount window -- as if to tip off to others that they are not financially sound. That, and also you must not neglect that the effect of the Federal Reserve's scrutiny to applications and also the old restrictions for use of funds obtained through the discount window have combined to render this window a relatively low traffic area.

The revamping of the Fed's direct lending facilities accomplishes a couple of things, at least to my mind.

Firstly, it aligns the Federal Reserve System's general rate structure for the spectrum of open market interventions, refinancing, credit facilities and whatnot more similar to that of the European Central Bank. That is, individual bank lending comes at a higher rate(price) than open market (or refinancing) does.

Secondly, I have every reason to believe the Fed is in its own way preparing, retooling, and lubricating the machinery in advanced expectation for surviving a hyperinflationary production run through the monetary factory. The move in January to the new discount window program of Primary Credit to replace the old stigmatized program of Adjustment Credit potentially gives the Fed some commercial help in monetization -- churning out new quantities of money. Gone with this new Primary Credit program is the stigma, gone is the scrutiny of the borrowing institution's reason for borrowing, and gone is the restriction upon use of the borrowed funds.

Now for example, unlike before the January change in program, institutions may freely borrow at the discount window with one hand and use that money to participate in the fed funds market (should market conditions render that a favorable exercise). Thus, in an event where the Fed finds itself preoccupied in busily buying long-dated bonds in open market operations in a sorry attempt to maintain an orderly bond market and keep long-term interest rates in at least a near-earth orbit, the pressure on the fed funds market would likely not be one of lower rates due to ample liquidity from the Fed's monetization but rather higher as even short term money would tend to plummet in value -- like in a Banana Republic players would be seeking to exit the dollar rather than hold it for mere meager overnight interest rates. In this event, and under the new discount window's environment of lending permissiveness the Fed could at least count on the host of commercial players to use this nominal opportunity to keep the fed funds market rates from rising too terribly far above the Fed's target rate.

Why the change after all these years? Because the next few years will likely be nothing like anything we have seen before. New times call for new behavior.

Use gold as your primary means of savings to protect your purchasing power against the expectations and contract dislocations of the transition ahead.

R.

Goldendome

(06/25/2003; 00:16:05 MDT - Msg ID: 105036)

The count-down to Zero

Usually,(and certainly in the movies) when you have a count-down to zero...6,5,4,3,2,1,...something then goes KA-BOOM. Will the countdown to zero with U.S. interest rates cause a ka-boom? Who knows? Someone said earlier yesterday on this forum, that things seem very quiet. Why do foreigners continue to buy U.S. bonds? Why would anyone? A one quarter point cut in interest rates from 1.25% would amount to a 20% cut...A 50 basis point reduction would amount to a 40% cut. Those are big percentages; and would mean particularily small rewards nominally (zero real) for the risk of holding paper in the Worlds' largest debtor.

The other alternative in the countdown senario is that when you get to zero, something blasts off like a Saturn II Rocket heading for outer-space. Could that be the stock market? The bond market? Possibly the Gold Market?

More probably, nothing will happen in dramatic fashion and We, as a nation, will just try to muddle through things some more, as the Japanese have done for the past decade and a half. But one day, some day, there will be both a ka-boom and a blast off. Then, hopefully, we will all have had the time and financial opportunity, to prepare ourselves for the re-emergence of physical Gold and Silver as the "properly recognized" store of wealth, that they are.

---------Gdome

Jacob Marley

(06/25/2003; 00:44:33 MDT - Msg ID: 105037)

Discount rate change - ax

http://www.frbdiscountwindow.org/discountwindowbook.html#primary
Why? This is why. Look at what went along with this. What is important is not that the rate used to typically be less than Fed funds, but that it is now a) more than FF, and b) what you can do with the money.

Prior to this, applying for discount lending for a number of years had required a lot of scrutiny. Hardly anyone used it because it was inconvenient. And the restrictions on discount fund usage made it so that you couldn't go there unless you had genuine liquidity problems basically. So, if you couldn't get what you needed in the money markets, you could go to discount, get a financial proctology exam, and get funds. But you'd risk the rumor mill discussing you, since the markets know how to scent this stuff out, and you'd cause the Fed itself to take a little more notice of you. So for the past number of years discount lending was of little influence to monetary policy.

Now, look at how it works. They divide lending categories into 2 principal groups: Primary and Secondary (and "seasonal" and "emergency" facilities which are not relevant here). Primary are good standing institutions. Secondary are not so good standing. Now Primary borrowers can go and get funds in basically a boilerplate application process. They are not asked what they are going to use the money for. And! And they can use these funds for just about anything they like. From the Fed site itself - "including financing the sale of federal funds." This doesn't seem like a big deal, does it? Why would you, a member depository institution, borrow today at 50 bp or so over what you can lend in the markets or among yourselves. This is not profitable, so so what? Borrow high, lend low! You'll not be a bank very long doing this!

But! IF rates begin to climb on the short end having this type of lending process in place helps put a cap on the short end rates. The fed says so itself, and further tells you they intend perfectly well to use this to assist open market operations in implementing their monetary policies.

So, how? Again, if money market rates start to climb, and are now peeking over the top of the discount rate, it suddenly becomes profitable to borrow at discount and lend at these higher rates. What happens now is that demand for these funds is met, and rates start to drop again - thus "capping" these short end overnight rates. All this done in anticipation of some volatile inflationary earthquakes. With long rates under pressure in a dollar tailspin, the Fed has told us in so many words they will buy up just about everything in sight to keep rates down. And while they are busy on the long end, thru this now ez cash discount facility, they can put the commercial lenders to good use by making incentive for them to help keep the short end under control too.

(Oh well, I just have seen the Town Crier answering you, so I will finish up here).

(06/25/2003; 01:21:59 MDT - Msg ID: 105038)

Thanks for Answers to Town Crier, Goldendome &Jacob Marley

Thank you all for your detailed answers. I think I understand most of it. I will re - read tomorrow.
Tomorrow also will be an interesting day when we see what will happen to these rates. Good night all. Ax

Mr Gresham

(06/25/2003; 01:54:29 MDT - Msg ID: 105039)

Great Albino Bat!

I have to interrupt my intended complete read-through to say that was a fine, fine post this night. The ease with which a 2% (if that) real growth can be reversed by impatient (or kleptocratic) idiots is little understood.

I guess the Hindenberg really is the image to grasp. Once they found that Hydrogen (fiat credit) would float a balloon across the Atlantic, they must have been ecstatic(!) with Man's newfound powers of flight.

After it crashed and burned, all they could have said was "It seemed like a good idea at the time." Oh, the Humanity!

There IS NO GROWTH. There is NO SAVING. There is no Capital Formation to retire upon, except that which you do for yourself. The rest has been or is being looted. Escape the Matrix (are you sure you're not him? A similar sharpness of perception, and expression, between you...)

Mr Gresham

(06/25/2003; 02:04:16 MDT - Msg ID: 105040)

Paperization

Hmmmm, Belgian's post reminded me: Paperization is only one letter away from pauperization. But financial guys always keep their promises, don't they? I mean, I saw it in their commercials, very serious, lots of grey suits. Enough.

Belgian

(06/25/2003; 02:25:08 MDT - Msg ID: 105041)

Reflexion on Peter R.Fisher (ax # 105008)

This person is talking to himself and trying to explain a lot that he doesn't understand.
Since 500 years, people try to define what "economy", exactly is. They will surely contnue to search for another 500 years. I have my own lilliputan simple mind-theory :

Economy is the constant drive of exploring "opportunities" for "profit" !

*WHAT" is it that makes people search for more or less profit-opportunities ? It is exactly on this phenomenon that economists (and tutti quanti) desire to "intervene" !

And it is the hugely growing "intervention" that is killing the natural, genuine drive for "real" opportunities that deliver sustainable, genuine profits.

The globalized "economy" of today, has landed in a huge and complicated, "PRICE" problem ! Rising, declining or "stable" prices is the "to be or not to be" question.

The world's orchestrators are "entangled" in their own intervention-web. Desperately truing to understand what is going on and continuing to intervene and getting entangled once more.

The dollar-standard (system) suggests that it has reached the economical nec plus ultra with the percepted price-stability. This sounds euro-like...growth and stability pact-like !? But is this really so ? Are "people" still looking for real opportunities that will bear, lasting, profitable fruits ? In my extremely, very small world, I don't see evidence of it. Most of the economic actives have become "gamblers" on the backs of anonyme slaves in well known locations. They are the main reason for the present percepted "price-stability", alas only temporary !

Everybody has his explanation about "what" the derivative casino is. Nobody cares to explain "WHY" this casino is existing and expanding, within this percepted price-stability.

The "exploited" are the ones that have plenty of profitable opportunities and provide the basis on wich "we" can gamble and slowly lose our opportunity-environment.

When Rumsfeld branded the EU hart as "old", he forgot to include the USUK as well. Straithforward colonization and forced (coerced) commercialization of targetted parts of the globe (globalization) is NOT the right way to create a lasting opportunity-environment ! It is the ever lasting war-logic that takes the upperhand.

Coalition(s) of the willing wariors, gamblers...against the divided subordinates. Our own recent expansions aren't real and sound but artificial and ephemere.

This will result in a shift of the real economic power-center from the gambling zone (ours) to the real opportunity zones, what we still call the world's part onwards to development.

The old dollar-block and the new-forming euro-block, try to fit into this evolution, both in a very different way. Things will not turn out to become the same as in the old days of Atlantic dominance. This world is changing and therefore causing confusion into the different analyses and interventions.

A crisis is a "catharsis" process. The final outcome is very often a completely different picture of what "was".

This growing general uncertainty is Gold's main attraction and this "must" be countered with the all embracing perception-machines ! Colluding media and target-oriented, "statements" from undiscussable "heros". A systemic approach of the whole matter.

That's how I do experience the non-messages that are fired at us 24/24-7/7. This would never be the case if there was an ocean of genuine opportunities for grab out there.
The constant repetition of the above is boring and becomes meaningless. That's why the systemic rot can proceed, undisturbed. General Indifference and complacent mass-behavior.

Reread Henry C K Liu's Banking Bunkum and monetary theology ! Enlightening parts in it.

@ Invisible Hand : Should we report the anti-globalist, non-sense part, again and again, extensively !? Is brutal violence and destruction the right way to protest with non-arguments ? Let us agree on what kind of globalization is an harmonious one instead of being frontally "against" it with surrealistic alternatives. Extremism (and other -isms) have never moved an inch of wrong options. On the contrary I should say. Expose the * real truths * and bring the correct alternatives forward. Much more efficient and causing less general suffering.

@ Ax : Thanks for posting that Treasury (?) "thing". "Price-Stability" is the term that struck me the most ! The above is my personal, amateuristic, decodation of it. The increasing "intervention-ism" is driving me, more and more, to GOLD...as Physical in hand for pure selfdefense purposes ! Haven't discovered any other universal tool as an alternative to Gold. Very "uncertain" times lay ahead and Big changes are on their way. Despite the abundend, concerted efforts, made to keep general "trust" at the staus quo. Remain careful...VERY careful !

Black Blade

(06/25/2003; 02:31:52 MDT - Msg ID: 105042)

Most Euro Notes in Germany Show Traces of Cocaine, Bild Says

http://quote.bloomberg.com/apps/news?pid=10000100&sid=anvMRvR1F4gE&refer=germany
Snippit:

June 25 (Bloomberg) -- Almost all euro notes in Germany show traces of cocaine, the daily Bild-Zeitung reported, citing a study by scientists in the city of Nuremberg. In August last year, nine out of ten notes had traces of the drug, from two out of 70 in January 2002, shortly after euro notes became legal tender in 12 European Union member countries, Bild said, citing professor Fritz Soergel.

Black Blade: What can I say? On another note, there is likely to be a shortage of bottles for German breweries according to another news report � now that is a crisis.

Topaz

(06/25/2003; 02:31:53 MDT - Msg ID: 105043)

A critical juncture.

This Bond/Dollar trend reversal ties in with Ax's discount window change post and the explanations offered by messers Marley and TC...and is quite ominous in it's implications.
The Fed are aware they alone could not suppress a wholesale sell-off in the Long end so they give the Banks an arbitrage opportunity once Yields get to say 5%...kinda like deputising a Posse.

Belgian

(06/25/2003; 03:06:07 MDT - Msg ID: 105044)

@ Gresham

*** PAUPERIZATION *** through paperization ! Absolutely correct Sir ! A new variant on the permanent depreciation of the currencies (infla-lala). An end-phase thing !
Now I'm beginning to understand what A/FOA ment by *burning*
paper. About time, isn't it ?
And if one desires a Big fire, more paper is needed for as long as one can produce it into acceptance and use, globally.

Make all dollar-paper, rent-free and quasi gratis ! What shall we do with this paper in a "our" part of the globe that is running out of "opportunities".

The absolute majority, out there, must think (be sure) that we are another load of "nuts" with our gloomy considerations !? But, I do feel more and more comfortable with this status of waval idiot...WITH Gold of course !

Isn't it amazing how those traditional, so-called Gold-insiders, can never come up with a *broad* explanation for POG's behavior !? I mean the deep "fundamentals" of it !
Mutatis mutantis for the now generalizing zero IR evolution from east (Japan) to west (US). What an amazing...DEAPHENING "silence" at IRs crashing to zero !

Complete DE_DRAMATIZATION of the systemic rot and the PICTURING of all is well in lala globe. What a farce !

misetich

(06/25/2003; 03:28:33 MDT - Msg ID: 105045)

California Digs In, Not Out, in Crisis

http://www.nytimes.com/2003/06/25/national/25CALI.htmlSnip:

Sacramento is in a state of near-perfect political meltdown.

With the constitutional deadline for passage of a state budget less than a week away, the governor and legislative leaders are nowhere near agreement on how to address California's $38 billion two-year deficit. And the drive to recall Gov. Gray Davis is gathering steam, adding to the sense of crisis here.
..........
"No one has the right to take this great state over the cliff," Mr. Davis said in an interview on Monday in his Capitol office. "At a minimum, we should do no harm. By inaction, we may be doing irreparable harm.

**********
Misetich

US Feds and WallStreet paint a different picture of the economy - details however such as those of California tell a different story...and California is not alone - as most of the states and cities are hemorraging -

Unemploymnet numbers are much much higher than those reported in the "sample" by the BLS

All On Board The Gold Bull Express

misetich

(06/25/2003; 03:52:07 MDT - Msg ID: 105046)

US Morgan Stanley's Berner: Jobless Recovery Can't Continue

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1056470160000&sn=1&banner=mainwireSnip:

"A jobless recovery, if it were to continue, is not sustainable,"
Berner said. Other downside risks include energy prices remaining at
"uncomfortably high levels" and the United States serving as the only
engine of global growth.
Berner told reporters when asked whether the committee's forecast
for mild inflation implied higher core prices that this would
"reasonable to assume" and that "some quickening of core inflation" is
plausible, while energy prices likely will move lower.
*********
Misetich

With Japan's and Europe economies struggling along - the "engine of world growth" will have difficulties in generating the desire growth -

Energy prices were envisioned by the so-called experts to tumble down after the Iraq invasion - yet it hasn't materialized and with OPEC's members such as Iran, Saudi, Venezuela on high alert vs US perceived hawksish policies and guerriall warfare in Nigeria and Iraq oil prices will remain within the "band" set -

It is interesting to note that since the price band of $22-28 has been set - the US economy has tanked

Natural gas, electricity soaring prices will add additional pressure

Mr. Berner carefully chosen phrase of "A jobless recovery, if it were to continue, is not sustainable," merits a double take as he KNOWS most are threading water hoping and waiting for the miracle to happen and the good old days of the mid to late 90's return

IT ISN'T GOING TO HAPPEN!!!

Wallstreet and most economists are in denial- and there's a price to be paid as overcapacity exists in most services and industries and more layoffs are to be expected

All On Board The Gold Bull Express

Black Blade

(06/25/2003; 04:08:11 MDT - Msg ID: 105047)

Guns Better Than Gold � Andy Smith

http://www.futuresource.com/news/news.asp?story=i4367397686999777344
Snippit:

Investors seeking safe haven tools would do better by buying shares in companies that manufacture guns and electronic security devices than gold, Mitsui Global Precious Metals said late Tuesday. Looking at the returns from buying shares in nine such companies compared with investing in gold, Mitsui gold analyst Andy Smith said all but one "blew away" gold's 31% return since Sept. 11, 2001, until June 20, 2003.

The nine companies Smith used in his report include U.S. gun maker Smith & Wesson Holding Corp. Comparing returns from the nine companies Smith used and the HUI U.S. gold index of unhedged producers since Sept. 11, Smith noted that three companies "zapped" HUI's returns. (Only three out of nine?)

Thus, Smith concluded that those investors who bought gold would have given up "much higher caliber returns" from these equities. Smith also noted that the trading volumes of seven of these nine companies far exceeded those of the securitised product, GOLD, traded on the Australian Stock Exchange.

Black Blade: Curious Andrew's sudden interest in firearms. Consider this poor boy stuck in a dead end job all these years as a gold analyst purportedly analyzing gold and gold producers � a career and a life with no meaningful future � a job that he clearly hates and a job driving poor Andrew to the brink of suicide. Thus his current interest in firearms? Personally I do hope that Andrew seek out the professional help of a qualified psychiatrist and a strict regime of anti-depressants (and perhaps anti-psychotics). Hopefully his colleagues will remove sharp objects from his immediate surroundings for his own protection. Imagine all those years stuck in a "dead end career" doing something he despises, stretching to obviously absurd analysis, and an unhealthy focus on dangerous items. It is sad to see someone in the depths of mental illness. I do hope poor Andrew is not contemplating suicide.

Black Blade

(06/25/2003; 04:41:52 MDT - Msg ID: 105048)

Japanese demand supported gold.

http://www.neftegaz.ru/english/lenta/show.php?id=36938
Snippit:

Spot gold traded in a tight range Wednesday, weighed down by ongoing long liquidation but getting some support from central bank buying and demand from other sources.
All agree the gold market, indeed all financial markets, are muted ahead Japanese demand supported gold. There are a lot of Japanese buying. The interest in the past few sessions has been on (Tokyo Commodity Exchange) and that's also been compounded by some central bank buying, which we've been seeing. The trader couldn't or wouldn't identify the central bank, but said there was certainly enough demand from that source to steady gold and push its price up after Tuesday's downdraft in New York.

Black Blade: China's central bank is said to be an aggressive gold buyer and several other Asian central banks have been rumored to be buyers as well. Japanese physical demand has been reported to have been strong and with the monetary authorities scuttling the nation's currency it is obvious why.

Topaz

(06/25/2003; 04:56:01 MDT - Msg ID: 105049)

http://quotes.ino.com/chart/?s=NYBOT_DXY0Looks like another assault on 94 is brewing...wouldn't surprise to see them run it down to 90ish for Q-end next Wednesday. If that occurs expect a huge pop in early July.

Socrates964

(06/25/2003; 05:46:20 MDT - Msg ID: 105050)

Ax/Peter Fisher

I'm sure that another exegesis will bore everyone to death. Nevertheless, here's my 2 cents:

"Some attention has recently been given to the risks of
deflation."

-Usual mantra about no deflation.

"The question for monetary policy, which I will not
address, is how to sustain effective price stability. The question for our credit markets, which I intend to address, is how to adjust to a world of price stability in which attention is more clearly focused on credit quality."

-Don't ask, don't tell about policy.

"An environment of price stability, if sustained, will be characterized by low variance in the general price level and by expectations for more symmetric deviations from the current price level than we have experienced over the last thirty years. If such an environment takes hold, credit market participants will come to expect that prices are
as likely to rise modestly as to fall modestly, within a narrow range. One consequence is that we will more readily observe both movements in aggregate real rates and the variance in real borrowing costs experienced by different borrowers."

"While we have all understood that real rates change over time, during the recent decades of rising and falling inflation we have tended to focus on the movements in nominal rates as explained by changes in inflation and inflation expectations. We have also fallen into the bad
habit of assuming that changes in inflation are the principle source of volatility in real asset values."

-Seems to me you have a fairly clear statement of Fisher's view of the market, which basically exists just to fine-tune government policy - i.e. Fisher thinks a) the government can fix the rate of inflation and the market will just move individual interest rates to reflect credit risk.

"We should have known all along that real rates can also move around. But now that we seem to have entered a period of price stability the observed variance in real rates is slapping us in the face. While an imperfect measure of real rates, the Treasury's inflation-protected ten-year note provides some evidence of recent changes in aggregate
real rates. The real yield on the 10-year TIPS peaked at 4.4 percent in early 2000 and now, just three years later, has fallen in recent weeks to between 1.4 and 1.6 percent, while implied inflation expectations moved in a narrower range."

-Yup. PF really does believe his own BS.

"Those of us inclined to make the simplifying assumption of a constant 2 or 3 percent long-run, real cost of capital, as suggested by economic historians, will need to think about the meaning of a greater than 50 percent decline in observed real rates in the space of a few years. Those of you with risk management responsibilities will need to think carefully about your efforts to achieve 4 or 5 percent
risk-adjusted, real returns in a world that may only be offering a riskless, real rate of less than 2 percent."

-History is bunk. We are engineering a brave new low inflation environment, in which savers bend over to borrowers.

"Removing aggregate inflation from the list of uncertainties allows investors to identify more clearly good managerial decisions from poor ones, sustainable cash flows from unsustainable ones. Managers who are able to identify and expand markets where their firms have pricing
power will enjoy prsistently lower real costs of borrowing; whereas firms that face stiff competition will tend to face higher real borrowing costs."

-This is interesting. PF evidently thinks it is perfectly natural that monopolies should have lower borrowing costs than companies that have to face a competitive marketplace.

"With greater attention focused on credit quality, securitized assets should be able to perform well, given the relative simplicity and clarity of their cash flows and risk characteristics compared to the complexities and uncertainties associated with major corporate balance
sheets. However, if our traded credit markets are going to prosper in a world of increased attention to credit quality, all issuers of credit instruments will need to provide investors with disclosures that accurately portray the risk-reward characteristics of the non-linear and probabilistic claims on cash flows that are now
routinely embedded in the structured products that investors hold both directly and indirectly."

-Do my eyes deceive me, or is this a paean to mortgage bonds. Note 'the complexities and uncertainties associated with major corporate balance sheets'. Is this an explicit disavowal of the idea that bringing rates down will revive the economy? Seems to me that Fisher sees the key policy objective as funneling funds into the roach motel of mortgage bonds, and is saying, we'll fix inflation. You guys do the public relations, and the good boys get the cheap money.

Cavan Man

(06/25/2003; 08:21:57 MDT - Msg ID: 105051)

Recoveries R US

U.S. Durables Orders Fell in May for a Second Month (Update2) Listen
June 25 (Bloomberg) -- U.S. durable goods orders unexpectedly dropped in May for a second month, as bookings for autos, computers and machinery declined, a government report showed, casting doubt on the extent of a pickup in business confidence following the war with Iraq.

Orders for items made to last at least three years decreased 0.3 percent to $168.3 billion, the lowest since June 2002, after dropping 2.4 percent in April, the Commerce Department said in Washington. Excluding bookings for transportation equipment, orders rose 0.2 percent last month following a 1.5 percent drop.

a nation of one

(06/25/2003; 08:42:54 MDT - Msg ID: 105052)

@ Goldendome (6/25/03; 00:16:05MT - usagold.com msg#: 105036)

Your comment: "The count-down to Zero: Someone said yesterday on this forum, that things seem very
quiet."

*** This is a guess, but the silence seems consistent with Mister Bush having brought pressure to bear on
those able to tweak the economic picture -without regard to public needs or economic realities- in hopes of
being elected to office. If this is true I would expect distortions to begin to appear, which cannot effectively
be covered by denials. Extreme denials would tend to confirm this guess. Precipitous calamities would more
strongly confirm it. The situation is similar to a little boy setting the preacher's car in neutral and watching it
roll into the lake. He doesn't want Mommy to find out. But sooner or later she will know. In the meantime he
does everything to prevent it. Therefore, criminal activities may be taking place. Oh, ...we know this. Well,
activities more immoral than the usual ones.

(Of course the truth is that William Clinton helped to set the preacher's car in neutral, and released the
brake. Mister Bush just happens to be watching as it disappears under the water. Unfortunately, few care
about such details.)

Mr Gresham

(06/25/2003; 09:27:21 MDT - Msg ID: 105053)

Searching for Irving Fisher

Socrates964: I'm enjoying your posts more and more. Is Peter Fisher as close to Irving's "permanently high plateau" as we're going to hear someone official tell us?

PF: "But now that we seem to have entered a period of price stability ..."

He's a good economist, but that isn't saying much these days, and he has to believe in the system to work in it. Seems like he sidestepped the Treasury Secretary talk, or maybe he's on a Fed path. A lot of those people get to remain fairly anonymous, which is something you'll want to be if you've got several decades left you want to spend in public life, and want your children to remain relatively unharrassed during a Depression.

Goldendome: "brought pressure to bear". At this late stage in things, all the financial institutions are so interlocked, and dependent on the Fed's bailout powers. Just one mis-step gets you off the short Rescue list. Or bottom rung in the merger order. So you play along now. They realize "it's Us, vs. the public's diminished understanding. Once they're on to us, we're _all_ retiring to our Caribbean islands. (You have one, don't you?)"

Cavan Man

(06/25/2003; 10:23:01 MDT - Msg ID: 105054)

Oh what a tangled web we weave....

Laundering "cost" vis a vis PakistanBy Peter Slevin
Washington Post Staff Writer
Wednesday, June 25, 2003; 11:45 AM

President Pervez Musharraf of Pakistan said today his country has accepted "in principle" a U.S. request to send thousands of peacekeeping troops to Iraq, but first he wants to see a larger role for other Muslim countries or the United Nations.

Pakistan is wary of the political difficulties of joining the U.S.-led security operation in Iraq and also would need financial help to pay for the two brigades requested by U.S. and British leaders, Musharraf told editors and reporters of The Washington Post.

Maybe they'll like their Pakistani overlords better?

Socrates964

(06/25/2003; 10:30:32 MDT - Msg ID: 105055)

Mr Gresham

Thanks for the compliment. Unfortunately I beg to differ on one point. If he is such a good economist, why is he trying so hard to impose intellectually bankrupt Keynesian measures.

Call me an Austrian cynic if you will, but I've seen too many attempts at Fisher-like tampering with interest rates/government inflation statistics in emerging economies not to know how this one ends.

Goldilox

(06/25/2003; 12:02:59 MDT - Msg ID: 105056)

Peter Fischer's letter

I think the point everyone seems to be missing is his request to lenders for more disclosure from borrowers. Look forward to your "credit report" being expanded to include some very "non-credit" items, information perhaps even "unavailable" to all but those cleared by the financial and security communities. Ridge and company are doing a lot more than changing the terrorist color indicator every month or so.

Socrates964

(06/25/2003; 12:09:27 MDT - Msg ID: 105057)

Goldilox

V. good point. Given that mortgages have been handed out so liberally, however, I can't see how they clamp down on bad credit risks without 'increasing the volatility of interest rates'.

Black Blade

(06/25/2003; 12:22:49 MDT - Msg ID: 105060)

Quarter Point Cut But With Expansive Monetary Policy!

Hot Off The Wire
The Fed cuts rate by 25 bps based on firming economy but weak growth. The statement suggests that the Fed will pursue an "expansive monetary policy" to head off deflationary pressures. Net result is a minimal cut and an aggressive move to reflate the dollar! The statement may have more positive impact on gold than the deepening of real rates into negative territory in the immediate term.

Yikes! An aggressive more and policy toward inflation.

- Black Blade

TownCrier

(06/25/2003; 12:26:25 MDT - Msg ID: 105061)

Federal Reserve's FOMC lowers fed funds rate 25 points to 1.00%

http://www.federalreserve.gov/BoardDocs/Press/monetary/2003/20030625/default.htmPress Release June 25, 2003

The Federal Open Market Committee decided today to lower its target for the federal funds rate by 25 basis points to 1 percent. In a related action, the Board of Governors approved a 25 basis point reduction in the discount rate to 2 percent.

The Committee continues to believe that an accommodative stance of monetary policy, coupled with still robust underlying growth in productivity, is providing important ongoing support to economic activity. Recent signs point to a firming in spending, markedly improved financial conditions, and labor and product markets that are stabilizing. The economy, nonetheless, has yet to exhibit sustainable growth. With inflationary expectations subdued, the Committee judged that a slightly more expansive monetary policy would add further support for an economy which it expects to improve over time.

The Committee perceives that the upside and downside risks to the attainment of sustainable growth for the next few quarters are roughly equal. In contrast, the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup in inflation from its already low level. On balance, the Committee believes that the latter concern is likely to predominate for the foreseeable future.

Voting for the FOMC monetary policy action were Alan Greenspan, Chairman; Ben S. Bernanke; Susan S. Bies; J. Alfred Broaddus, Jr.; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; and Jamie B. Stewart, Jr.

Voting against the action was Robert T. Parry. [San Francisco Fed] President Parry preferred a 50 basis point reduction in the target for the federal funds rate.

In taking the discount rate action, the Federal Reserve Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, St. Louis, Kansas City, and San Francisco.
---------------

Bottom line: "...the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup in inflation..." ===> leaves door wide open for expectations of possibly more easing in the future?

R.

Black Blade

(06/25/2003; 12:28:00 MDT - Msg ID: 105062)

Inflation As Monetary Policy?

That last statement should be - An agressive move toward a policy of inflation.

Yes Goldilox - "Interesting Times"

- Black Blade

USAGOLD / Centennial Precious Metals, Inc.

(06/25/2003; 12:35:13 MDT - Msg ID: 105063)

Bullion at less than $4 over our cost. Build your base with supplies priced right!

http://www.usagold.com/gold/coins/bullion.html

Renny

(06/25/2003; 13:24:39 MDT - Msg ID: 105064)

USAGold

>>Bullion at less than $4 over our cost. Build your base with supplies priced right!<<

So what does that turn out to be over spot? TIA

TownCrier

(06/25/2003; 13:41:37 MDT - Msg ID: 105065)

Renny, this is how it's done, serving investors for 30 years...

http://www.usagold.com/gold-coins.htmlIf you have pricing questions or want to discuss a potential order, simply pick up the phone. You're sure to get helpful and friendly service.

USAGOLD - Centennial Precious Metals
toll free (800) 869-5115

R.

21mabry

(06/25/2003; 13:46:12 MDT - Msg ID: 105066)

(No Subject)

BlackBlade, I have been reading a few of the books you recommended,they are excellent.Its very humbling to me when I realize how little I know and how much there is to learn.But hopefully I will have many years in which to learn.thnx 21

TownCrier

(06/25/2003; 13:50:17 MDT - Msg ID: 105067)

Jon Warner's Afternoon Gold Report

http://www.usagold.com/DailyQuotes.html(excerpts)

Japanese short-term rates fell to �0.01% overnight. Monetary authorities have been aggressively buying U.S. dollars and selling Yen in a futile attempt to maintain the weaker currency for a competitive edge in an ever shrinking global market. So far it has had some minimal effect of helping to stem the rapid decline of the U.S. dollar. However, the dollar will weaken further given the Federal Reserve's obvious intention of pursuing what amounts to a "weak dollar policy". What do the Japanese people think of all this? It is reported that gold buying has been very strong in Japan even as institutional investors play wildly speculative trading games with arbitrage between Tocom futures contracts and the spot price. Physical interest remains strong among the citizenry and will likely gain momentum given the current economic environment and continuing "currency war".

...The Federal Reserve has made the decision to cut short-term rates by 25 basis points rather than 50 basis points. This leaves open the possibility of another rate cut in the future if current reflation efforts and additional massive infusions of dollars into the economy does not stimulate significant economic growth. The "real" short-term interest rate was already negative before today's rate cut decision and it is now even more negative.

...The U.S. dollar is guaranteed to weaken now as interest rates provide very little if any protection for investors and certainly is harming savers. With the short-term negative "real" interest rate there is little downside on holding hard assets that hold value in inflationary environments. The outlook for gold is looking extremely positive now.

----(click url for full report)------

21mabry

(06/25/2003; 14:06:19 MDT - Msg ID: 105068)

ENRON

I read that Enron was banned from trading in electricity today by the goverment.I know legal procedings take a long time but this company was caught red handed many moons ago.

VanRip

(06/25/2003; 14:43:08 MDT - Msg ID: 105069)

Gasp of the Day, or is it Sob

http://story.news.yahoo.com/news?tmpl=story&u=/bw/20030616/bs_bw/b3838030Hope. HOPE?? Real easy with other people's money.
----------------------------
"Ultralow rates, however, are clearly fueling a surge in the stock market. One example: The state of Illinois has taken some proceeds from a $10 billion bond issue to invest in stocks. That, state officials hope, will help close a huge $35 billion pension funding gap."
---------------------------

Mr Gresham

(06/25/2003; 14:53:56 MDT - Msg ID: 105070)

Socrates964

Thanks, I shouldn't have rushed that comment into "print" -- by "good" economist (about Peter Fisher), I meant more like "well-studied", expresses well the paradigm he lives and works in, seems to have a bit of sparkle above the average dead fish Keynesian.

I know that, to steal shamelessly from TrickyD, "we're all Austrians now", (or will be by the time this is over with).

And I was even thinking of quoting Maynard when I got back here from my drive: "Markets can stay irrational longer than you can remain solvent." That bit of wisdom resonates with me, as I'm happily about to (fingers crossed) get liquid on some real estate, but still basically flat over the past 5 years. Solvent, yes, but not much to show for all my, uh, -- smarts? uh, Learning? Efforts? Rationality? -- whatever. At least I didn't go down with the herd. But I could have stayed away all together. (You gotta ask yourself, was Al G in LONG-dated Treasuries all this time? Or short ones?)

I keep thinking about that 1930s saying about the "smart guys went broke in 1932", and the even smarter ones in years following. A bear is meant to chew everyone up. And lately, also, I've been thinking about what a really short time that downfall was -- 1930 to 1933 hitting bottom. With basically a flat (?) survival economy for a few years following (?). I probably could handle that now. But it seems we've already lived through 4+ years of anticipating this one -- will it grind on even longer?

CoBra(too)

(06/25/2003; 16:02:14 MDT - Msg ID: 105071)

Haphazard or Foreboding?

As it marks the "13th." interest rate cut in a row, looking like the US dollar's stairway to monetary hell, Sir Allan didn't go all the suggested way. He's only cut the Fed rate by 25 bp's to 1%, though with a bias to expand the confetti aggregates when necessary. Doomed if he does and doomed if he doesn't - is what i've posted a few days back. Doomed, anyway, is what the good Mephisto AG may be thinking.

After all, no-one can accuse the man being dumb, after all he lived through 4 administrations in his 16 years in office. The way he handled the Oct. crash of 1987 may have won him laurels, while it also marked the end of any free markets. Today they don't even feel any necessity to hide this fact. Bernanke and consorts have made that totally clear.

To say that these kind of monetary policies are absurd is probably only repeating what any old geezer, including the Austrian economists, as well as myself have already stated. For how long it will be able to prolong the charade is another question.
OK, as long as foreign dollar holders are still playing, retirees and scarce US savers not counting, the game goes on - as it is assumed they are hedged. Hedged? - Against what and by what? Sure, against a further erosion of the value of the dollar (against what? again, other confetti?) and by what counter-party? There may be no-one, neither collectively out there on this globe to hedge the dollar debt default risk, as the total amount has been growing exponentially to now top a full years global GDP.
And this mess was amassed by a nation representing just 5% of the globe's population... Quite a feat, I would have to say, though from now on it will be protected by the only super-power status left. Doesn't it ring a bell, if not alarm bells, as somewhere in the past we seem to have heard about similar constellations, or were it set-ups?

While Sir Allan Gruenspan, the german word for verdigris, can't ever blemish physical gold - he's wellcome to do whatever he wishes with the greenback confetti in his new virtual world of delusion.

Time to wake up and fight the serfdom we've been offered - cb2

Goldilox

(06/25/2003; 16:37:19 MDT - Msg ID: 105072)

Binge Buyers need to Sober Up

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054966382394&p=1012571727304snippit:

Bartenders know the drill. When one of their patrons has overindulged, they settle the bill and send the customer home, regardless of the impact on the night's receipts.

var html = getInAdHTML("box",FTSite,FTSection,FTPage,FTIndustry); document.write(html);

Mutual fund companies rarely act so honourably. They hate to spoil a party, or walk away from a fee, preferring to give investors what they want, when they want it. In perhaps the classic case, Templeton started a Vietnam fund in the early 1990s before the country even had a stock market.

However, this month Wall Street witnessed the mutual fund equivalent of a man-bites-dog story. Vanguard, which oversees $610bn in assets, said it would stop accepting contributions for its $9.2bn corporate high-yield bond fund.

Vanguard imposed the cooling-off period on June 12 for bartender-like reasons. A junk-bond rally had attracted the wrong crowd: short-term players who could be expected to withdraw their money at the first sign of trouble, raising trading costs for Vanguard's more sober investors. Vanguard opted to keep the party polite.

"There was a bit of panic buying," said Gus Sauter, chief investment officer at Vanguard. "It's a frequent pattern after a fund performs quite well. Nothing sells like performance and you see a quick rush of money in the fund. It's not unlike the money that went streaming into the stock market in the 1990s."

The investor thirst for junk bonds reflects the shortage of palatable alternatives. Stocks still make many people queasy. At the same time, the Federal Reserve's efforts to push down interest rates mean safer fixed-income investments offer microscopic yields. Sit by any retirement community pool and the resident experts will tell you the score: junk bonds offer the only appetising yields around.

Goldilox:

Same Old Story - Bubble, bubble, who's got the bubble?

mas

(06/25/2003; 18:33:13 MDT - Msg ID: 105073)

CB2

Clap, clap, clap. Well said Sir! I tip my hat to you.
Got gold. The only equalizer in this game of $money for nothing. 5% wowsers!

Cavan Man

(06/25/2003; 19:00:52 MDT - Msg ID: 105074)

Afghanistan, Iraq,..........

Hey, how 'bout a TRIFECTA?WASHINGTON (CNN) -- Calling it a terrorist organization bent on disrupting the peace process, President Bush on Wednesday said Hamas and other militant Mideast groups must be dismantled before peace can be achieved.

"In order for there to be peace, Hamas must be dismantled," Bush said at a joint news conference with the European Union leadership.

NO PEACE WITOUT JUSTICE. Foreign policy affects the POG!

Max Rabbitz

(06/25/2003; 19:47:45 MDT - Msg ID: 105075)

Peace and Justice

Sir Cavan,

Do not even the Irish fight for their homeland? Justice or not there will be no peace. Prepare as best you can.

Max

a nation of one

(06/25/2003; 19:55:00 MDT - Msg ID: 105076)

@ Goldilox (06/25/03; 12:02:59MT - usagold.com msg#: 105056)

"... the point everyone seems to be missing is his request to lenders for more disclosure from borrowers. .... Ridge and company are doing a lot more than changing the terrorist color indicator every month or so."

*** I think you may be right about this.

21mabry

(06/25/2003; 20:13:05 MDT - Msg ID: 105077)

(No Subject)

Our nations economy is in a weakened state at this time.We are having problems with our domestic economy yet our goverment is making the american taxpayer responsible for the rebuilding of two foreign nations economies namely Iraq and Afghanistan.There may also be new nations added to this list in the future if the Bush administration pursues its war on terror into other nations.We have put ourselves in a sticky situation if we leave these countries they could very well return to their former ways.We can not afford to leave and we can not afford to stay.These situations may well be with our nation for many years to come.

misetich

(06/25/2003; 20:23:02 MDT - Msg ID: 105078)

Trial lawyers smell new opportunity on Wall St

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054966432544&p=1012571727088Snip:

In spite of investment banks' hopes that their $1.4bn global settlement with Eliot Spitzer, New York attorney-general, would draw a line under their activities during the stock market bubble, speakers at the event had a stark warning: this is only the beginning of the lawsuits.

The trial lawyers at the Mass Torts Made Perfect event are thinking big. Mike Papantonio, the head of the mass tort department at Florida law firm Levin, Papantonio who has a record of securing million-dollar awards, said: "The money from Spitzer is a drop in the bucket. [Investment bank] reserves need to be in line with the major pharmaceutical companies."
................
*********
Misetich

Investors will probably get little - but the noise generated by the sharks for their own benefit should be fun --

All On Board The Gold Bull Express

Cavan Man

(06/25/2003; 20:49:56 MDT - Msg ID: 105079)

Hi Max

1948: 750K evictions (fact)

Goldendome

(06/25/2003; 21:03:45 MDT - Msg ID: 105080)

Bond prices fall today?

This today from Puplava's Financial Sense: "Bond prices took it on the chin falling along with the dollar. The 10-year note lost 22/32 with the yield advancing to 3.33 percent."

I would have thought the note would have increased in price? Had the market already priced in a Fed rate cut of .5%--thereby causing the price to back down? Was this just another case of buy the rumor, sell the news? Your thoughts.----Gdome

Black Blade

(06/25/2003; 21:16:13 MDT - Msg ID: 105081)

Market Wrap Up � Puplava

http://www.financialsense.com/Market/wrapup.htm
Snippit:

When you are operating on a credit based fiat system eventually the average Joe figures out he has been taken to the cleaners. When that happens there is flight out of fiat paper into tangible goods as citizens lose confidence in the system. As the dollar loses more of its value, as interest rates remain negative in real terms and head to zero in nominal terms, as the economy fails to recover on a sustainable basis, confidence in the present system will evaporate. It has started to happen already with foreign investors who net short out of dollars during the first half of the year. It is only the Asian central banks that are keeping the dollar from going into a freefall. Yet how long before their confidence evaporates as the credit spiral goes out of control? For safety reasons and for protection of your own assets I would strongly urge you to buy silver and gold now before it gets too late, or simply becomes too expensive and unavailable. This is especially true when it comes to silver.

Black Blade: Good article on growing debt, derivatives bomb, etc. A much weaker US dollar is a sure bet IMO. The word is out again - an Asian central bank is buying gold.

Black Blade

(06/25/2003; 21:29:39 MDT - Msg ID: 105082)

Fed finding rate cuts aren't enough

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/06/24/BU115226.DTL&type=business
Tried-and-true solutions fail in this economy

Snippit:

Federal Reserve policymakers, beginning a crucial two-day meeting today in Washington, face a conundrum they could scarcely have imagined a few years ago. The central bank's 2 1/2-year campaign to boost the economy, during which it cut short-term interest rates 12 times, seems to have come up short. The economy is growing, but at a pace so sluggish that jobs keep disappearing. Inflation has dropped too far for comfort. And interest rates are so low that the Fed is running out of room for further cuts, leaving policymakers in a quandary about how to manage the economy.

The problem, though, is that with interest costs heading ever closer to zero, the rate-cutting game is just about over. Greenspan and his colleagues could be facing a situation in which the economy is still performing below par and they have no more arrows left in their quiver. "The Fed is running out of room for action," said former Fed governor Janet Yellen, now an economist at UC Berkeley's Haas School of Business. "We are near the end of what we can expect from monetary policy." At this week's meeting, Fed policymakers are expected to get a staff report on alternative methods for boosting the economy. One widely discussed option would be for the central bank to buy large quantities of long-term government bonds, which would serve to push down mortgages and other long rates.

Black Blade: Ah yes, what to do? Just ask Fed Governor Ben Bernanke. Regardless, the dollar will weaken as rate cuts and massive infusions of nearly free cash just are not working. Maybe the Fed buying long term debt will slow the dollar decline slightly but that's no fix either. There is also talk of the Fed buying stocks, corporate bonds, junk bonds, etc. Then there is my favorite � the good ole "cash carry tax" proposal. That is to pay workers in cash with an expiration date. I have to admit, when the Fed begins to float ideas like these ya just gotta know they are grasping at straws.

Max Rabbitz

(06/25/2003; 21:30:18 MDT - Msg ID: 105083)

Justice

Sir Cavan, I would consider fleeing from what looked to be a coming battle zone, intimidation, terror, a kind of eviction. Yet not all left. Mass movements of people after WWII occurred throughout the Middle east, India, and Europe as nationalism destroyed the old empires of the multinational aristocracy. In most cases the people were absorbed within national borders, such as the eastern Germans into the new borders. Can the Germans go back to Poland and the Ukraine now? What is Justice? Not so simple to me. I have no easy answers but only know there will be struggle and war. To me it's a Darwinian world where one man's "justice" is anothers destruction. I hate to be pessimistic but that's why I buy the physical. Best wishes to you.

Black Blade

(06/25/2003; 21:41:36 MDT - Msg ID: 105084)

Fed Cuts Bank Lending Rate to 1%, Lowest Since 1958

http://quote.bloomberg.com/apps/news?pid=10000087&sid=a3SNZiFqzUlQ&refer=top_world_news
Snippit:

June 25 (Bloomberg) -- Federal Reserve policy makers reduced the benchmark U.S. interest rate to 1 percent, the lowest since Dwight Eisenhower was president 45 years ago, in an effort to boost the economy and prevent a further slowing of inflation. Members of the Fed's rate-setting Open Market Committee voted 11-1 to lower the overnight bank lending rate a quarter percentage point from 1.25 percent. Fed Bank of San Francisco President Robert Parry dissented, preferring a half point cut. About a third of economists and investors surveyed before the meeting had forecast a half-point cut, and bond prices fell.

``Recent signs point to a firming in spending, markedly improved financial conditions, and labor and product markets that are stabilizing,'' the Fed said in a statement. ``The economy, nonetheless, has yet to exhibit sustainable growth.'' The Fed said the risks to the economy ``are roughly equal.'' At the same time, ``the probability, though minor, of an unwelcome substantial fall in inflation exceeds that of a pickup of inflation from its already low level,'' the statement said. ``On balance, the Committee believes that the latter concern is likely to predominate for the foreseeable future.''

Black Blade: WOW! That last statement says it all. The Fed is obviously going to do everything in it's power to devalue the dollar and stir up inflation. What a kick in the teeth for President Bush and Treasury Secretary and their stupid "strong dollar policy". No wonder Asian central banks are nervous and at least one is said to be buying gold. They are top-heavy in US dollars.

21mabry

(06/25/2003; 21:47:29 MDT - Msg ID: 105085)

Jim Sinclair

Mr. Sinclair stated in one of his late may 2003 email alerts he expected gold to trade at 408 dollars on or before july 4 2003.Gold will have to make a big move to make that level by next week.

Black Blade

(06/25/2003; 21:54:41 MDT - Msg ID: 105086)

Fed vs. Deflation. Who will win? - Martin Weiss

http://cbs.marketwatch.com/news/print_story.asp?print=1&guid={10E744E5-F5AF-4823-BAFA-A3A4C8DA198D}&siteid=mktw
Commentary: Cut debt and build cash now!

Snippit:

PALM BEACH GARDENS, Fla. (WeissRatings) -- We are now witnessing one of the greatest economic battles of all time. On the one side is the powerful U.S. government, mobilizing every economic weapon at its disposal -- the 13th interest rate cut, massive federal deficits, even a de facto devaluation of the U.S. dollar. On the other side is one of the most feared of all social and economic forces -- deflation -- falling prices, wages, and asset values. In the past half millennium, deflation has typically reared its ugly head only once or twice every 100 years. It's a rare phenomenon.

Problem

Each time deflation comes, governments naively believe they can stop its advance. The less experience they have with deflation, the more they try to fight it; and the more they fight it, the more they prolong the agony. Right now, we have clear signs of deflation in the U.S. and Germany. We have four years of deflation in Japan, despite near-zero interest rates. And we see China, a $1-trillion economy, exporting wave after wave of deflation to Asia and the West. That's the three largest economies in the world -- plus the most populous nation -- all threatened by deflation.

Meanwhile, nearly everyone in Washington and on Wall Street insists that "a little deflation" won't hurt us. I have news for them: In a high-debt economy like ours, having "a little deflation" is no more likely than being "a little pregnant." Once deflation begins, it can snowball in a series of vicious cycles:

Black Blade: Another interesting perspective. I don't necessarily agree with all martin Weiss's recommendations but he does make an interesting case. My recommendation: Get out of debt and stay outta debt, stash enough cash for emergency expenses, accumulate gold and silver portfolio insurance, and start a storage program of nonperishable food and basic necessities. And pray like Hell!

Black Blade

(06/25/2003; 22:06:23 MDT - Msg ID: 105087)

Still overpaying

http://money.cnn.com/2003/06/25/commentary/bidask/bidask/index.htm
Tech is the market's most expensive sector. Given the past, it's hard to see why.

Snippit:

Technology continues to be the most expensive area of the market, and it is a struggle to see why. Over the past five years, tech stocks in the S&P 500 have had an average annual earnings contraction of 13 percent, and yet the stocks trade at 40 times the past year's earnings -- by leaps and bounds the heftiest price-to-earnings ratio of the S&P sectors.

In contrast, take a look at the sectors that have had the best earnings growth over the past five years. Health care stocks had average annual earnings growth of 10 percent and carry a P/E of 20.3, consumer staples stocks had 13 percent earnings growth and have a P/E of 17.7, energy stocks had 15 percent earnings growth and have a P/E of 16.

It seems like, despite all the disappointments of the last few years, investors still want to believe that tech is far and away the best place to find growth, while they've concluded at the same time that the places that have delivered earnings growth in the past (and in the case of consumer staples and healthcare, stable growth) aren't particularly worthwhile.

Black Blade: Yeah, I pointed this out before. We are once again in a minor tech bubble. They just never learn but like moths to a flame the Lemmings insist on getting burned. The old "greater fool theory" has returned � at least for now.

TownCrier

(06/25/2003; 22:22:37 MDT - Msg ID: 105088)

Will you have solid wealth in hand when rules of the paper game change in your neighborhood?

http://biz.yahoo.com/rf/030625/economy_argentina_controls_4.htmlHEADLINE: Argentina slaps controls on "hot money"

BUENOS AIRES, Argentina, June 25 (Reuters) - Argentine President Nestor Kirchner's new government said on Wednesday it would slap controls on international transfers of "hot money" in a move intended to stabilize the peso and shield the economy from speculative capital flows.

"With the aim of avoiding speculative short-term capital that does not have to do with foreign trade, (funds) will be registered on their entry and their exit will be allowed after 180 days," Economy Minister Roberto Lavagna told reporters.

...sparked speculation that Kirchner was shifting to more state intervention to solve the problems...

The announcement is Kirchner's first major economic move since he came to power in May. He was elected on a center-left platform emphasizing fiscal conservatism and an increased role for the state in the economy.

-----(from article at url)-----

When your currency is a utility of the sovereign powers that rule over your land, don't be surprised when the terms of its use change in a blink.

Diversify with gold and seize an incrementally larger measure of control over your fate.

R.

Black Blade

(06/25/2003; 22:26:43 MDT - Msg ID: 105089)

Abraham says gas supply not `out of the woods yet'

http://www.chron.com/cs/CDA/ssistory.mpl/business/energy/1965756
Snippit:

WASHINGTON -- The U.S. natural gas supply crisis is not over, despite recent strong injections of gas into underground storage in preparation for the winter heating season, Energy Secretary Spencer Abraham said Tuesday. "By no means are we out of the woods yet," Abraham told reporters after addressing a conference on carbon sequestration.

Black Blade: Summer temperatures could return to normal and forecasts call for a warmer than normal July and August. Meanwhile producers remain locked out of prime target areas and permitting is progressing at a snails pace. It appears that the coming Winter could be brutal and rising energy costs will stop any economic recovery dead in its tracks. Oil inventories look to be under threat once again as well. There's a National Petroleum Reserve for oil and none for NatGas.

slingshot

(06/25/2003; 22:40:10 MDT - Msg ID: 105090)

First Shots Being Fired

Tonight at work a fellow co-worker, who is an eternal optimist, provided me with this little tidbit of information. He stated that a major network had a survey or call in on what they thought about the interest rate cut. Most were irate because of what the impact was to savings and other investments. What I gathered was the major impact was on fixed income. If his information is true, then as I stated before the fireworks will start when they (meaning middle income) can not support themselves or a severe decrease in the quality of life ensues. The Tax Man surely cometh as each State levies such fees to bouy their welfare state and the Federal taxation to keep those in power. Myself, I think it's a mess and the general public will not call a spade ,a spade. Denial in its truest form. A rabid dog feeding upon itself.

Again I thank all at this forum for showing me the light.

To USAGOLD, there are no words to express my appreciation.

Slingshot-------------<>

Topaz

(06/25/2003; 23:21:43 MDT - Msg ID: 105091)

@ G'Dome.

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9T'was hardly a "fall off the Cliff" as far as the Dollar was conserned G'dome...in fact it ($) has been under severe upward pressure for some 5wk's now and it's all they can do to keep it DOWN!
What is unusual lately is the relationship (Bonds, Dollar and Gold) as they ALL have been acting ornery this last week or so.
The trend, rising Dollar = rising Bond Yields can only be rationalised if viewed as a lack of confidence in the future, which is consistent with the Deflationary scenario.... imho of course.

Goldilox

(06/25/2003; 23:33:09 MDT - Msg ID: 105092)

SoKorea paid NoKorea for summit

http://news.independent.co.uk/world/asia/story.jsp?story=418782snippit:

South Korea secretly paid North $100m to attend summit

By Sang-Hun Choe, AP

25 June 2003
Former South Korean President Kim Dae-jung's government secretly paid communist North Korea $100 million to get Pyongyang to agree to a historic summit in 2000 that helped Mr Kim win the Nobel Peace Prize, an investigator said today.

Independent counsel Song Doo-hwan said the government "aid" for North Korea was related to the meeting and had been sent secretly through improper channels.

Mr Kim has admitted approving money transfers to North Korea despite "legal problems," but has said they were for the sake of peace and that his government's decision should not be subject to review.

Mr Song had agreed not to consider whether the president himself was culpable. However, three of Mr Kim's former aides have been arrested in the scandal.

Announcing the findings of a 70-day probe, Mr Song said South Korea's Hyundai conglomerate sent $500 million to North Korea, but he called $400 million of that an investment by the company. The rest was sent by the government, via Hyundai, he said.

Goldilox:

Hmmm $100M for a $1M Nobel Prize - sounds like Sir Greenspan economics. Hey, I wonder what his Knighthood cost, besides his credibility?

Goldilox

(06/25/2003; 23:46:22 MDT - Msg ID: 105093)

Peru Cabinet Resigns

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054966394787&p=1012571727176snippit:

Alejandro Toledo, Peru's president, was seeking to head off a deepening political crisis on Tuesday after his entire ministerial cabinet tendered its resignation.

The beleaguered head of state, whose popularity rating recently hit a low of 11 per cent, admitted on Monday that his government had reached "breaking point" and added: "We are going to make changes. We will capitalise on our successes and strengths and learn from our weaknesses."

His comments follow a period of social unrest and strikes that last month forced him to declare a state of emergency in 12 of the country's 25 provinces. A student was shot dead by security forces and hundreds of demonstrators injured and detained in the ensuing violence. The re-emergence of extreme leftwing groups, including the Maoist Shining Path guerrillas, has put the head of state under additional pressure and set alarm bells ringing among US security officials.

Goldilox:

Afganistan, Iraq, NoKorea, Iran, Palestine, Argentina, Venezuela, and now Peru... what's that old Frank Zappa song?

"I'm about to get upset
From watchin' my TV
There's people throwin' rocks and stuff
and marchin' the street.
It seems that every day
is just another rotten mess,
And when it's gonna change, my friend,
Is anybody's guess.

So I'm watchin' and a'waitin'
And hopin' for the best.
Even think I'll go to prayin'
Every time I hear them sayin'
That there's no way to delay
that trouble comin' every day!"

Topaz

(06/26/2003; 04:18:18 MDT - Msg ID: 105094)

Dollar.

http://quotes.ino.com/chart/?s=NYBOT_DXY0FX action strongly $ positive again this eve...50 day ma in it's sights...Gold and Bond Yield proving quite resilient as of this. Might see capitulation when we cross. SM futures also positive... go figure!

Black Blade

(06/26/2003; 05:23:49 MDT - Msg ID: 105095)

Cheap oil, natural gas gone, says forecaster

http://www.courier-journal.com/business/news2003/06/25/biz-front-oil25-5558.html
Snippit:

The United States is at "the end of an era" of cheap natural gas and oil, energy analyst and forecaster Henry Groppe told representatives of Kentucky's oil and gas industry yesterday. Rising worldwide demand is running headlong into an oil and gas market that is at or near top output, said Groppe, a partner and founder of Groppe, Long & Littell, a Houston consulting firm. "We think we're probably at about a peak for total world oil production, and we'll see slowly declining long-term production," he said. Prices will rise "high enough to constrain consumption to match that supply," Groppe told the Kentucky Oil & Gas Association, which ends its three-day meeting today at the Seelbach Hilton.

The world is not running out of fuel, Groppe said, but a long-term price rise is probably unavoidable. "Early in my career, I bought 5-cent (natural) gas ... we ran out of 5-cent gas. Some years later, we ran out of 15-cent gas, and we ran out of 25-cent gas. Basically what we've done now is we've run out of $2 and $2.50 gas, and we're going to be moving up to the next level."

Natural gas production is also headed for a drop, Groppe predicted. "In the ' 80s , we ran out of our ability to produce enough gas to meet our demands. For many years now, Canada has been solving our problem" with exports. But Canada's supplies aren't inexhaustible, he said. "Last year was the first time in history when Canada's total gas production declined, and their exports to us declined."

Black Blade: Toay Energy Secretary Spencer Abraham meets with the National Petroleum Council in an emergency meeting to develop a strategy to solve the NatGas supply crisis. But it appears to be too little too late. Higher energy costs are unavoidable for the foreseeable future. Scratch any hope of economic recovery.

Socrates964

(06/26/2003; 06:48:00 MDT - Msg ID: 105096)

Gold/Markets

Unfortunately, it looks like the 90-trading day cycle is still alive, although gold has rolled over ahead of schedule.

Looks to me as if you have a frantic buyer of paper (US government) and a relaxed seller (rest of world), (vice-versa for gold). Hence, if I'm an Asian central bank who wants to slowly ease out of huge dollar positions and a nice obliging Fed will exchange my dollars for euros at 1.1450 rather than 1.19, is this going to spoil my day? If I am a fund who knows that the lid is going to blow on bullion and my gold shares are going to skyrocket, am I going to object if I get a couple of months to accumulate.

The key for me is to watch the gold price in euros, my fundamental belief being that E300 is a rock-solid floor.

The other point is that we should look at yen-adjusted Treasury returns. A weaker yen leaves more room for lowering bond prices, at least temporarily. Any thoughts?

Bizkit

(06/26/2003; 08:30:42 MDT - Msg ID: 105097)

(No Subject)

I'm really ROTFLMAO: from the daily reckoning

"Zimbabwe is becoming a really interesting place. It's the
only country in the world where your largest note - $500 -
can't buy you a beer, which is $650.

"A roll of 1-ply toilet paper costs $1000. There are about
72 sections on the average roll, so it is cheaper to take
your $1000, change it into $10's, wipe your bum on 72 of
them and get $280 change.

Biskit of Gold

Cavan Man

(06/26/2003; 10:03:57 MDT - Msg ID: 105098)

Iraq Progress

Reuters
Thursday, June 26, 2003; 8:39 AM

By Hassan Hafidh

BAGHDAD (Reuters) - An Iraqi oil pipeline was on fire on Thursday following an explosion, the sixth in the country in two weeks, a senior Iraqi oil official said.

"Early this morning another explosion damaged a pipeline near Al-Fatha near the River Tigris," Adal Al-Kazaz, director general of Iraq's Northern Oil Company, told Reuters. "I expect the incident to be another act of sabotage," Kazaz added.

Cavan Man

(06/26/2003; 10:06:19 MDT - Msg ID: 105099)

More Iraq Progress

But....Pakistani's to the rescue...By NADIA ABOU EL-MAGD
The Associated Press
Thursday, June 26, 2003; 10:23 AM

BAGHDAD, Iraq - A bomb exploded Thursday near a U.S. military vehicle on the road to Baghdad's airport and assailants threw grenades at a U.S.-led convoy, the second such ambush in two days. Two American servicemen and two Iraqi civilians were killed.

The attacks were the latest in a growing tide of violent anti-coalition opposition, despite assurances that troops have been mopping up resistance around Baghdad.

Henri

(06/26/2003; 12:43:26 MDT - Msg ID: 105100)

Black Blade Msg #105084

I have been evolving the opinion over the past several years that we are not so much fighting a war on inflation as we are trying to assist the rest of the world in preventing global deflation. It seems this is being attempted by cooperative global inflation. What appear to be competitive interest rate adjustments supply braking power to accellerator printing presses aimed directly at vulnerable market sectors and geared to match deflationary pressure in those sectors.

If this is the game behind the G7/G8 meetings it is dangerous indeed. Like walking across a glacier with a rope strung between the people in the line. If one suddenly falls into a crevass, the rest can still recover the victim and pull him to safety.

Trouble is what works in one country doesn't necessarily follow in another as they have varying amounts of pre-existant govt intervention (ie Japan/US) that obfuscate the true market indicators. Interventions, if known ahead of time can cause large players to back out of or into targeted markets or even manipulate the indicators (gold?)

Perhaps this is the trickiest part. Keeping your friends out of trouble as you manipulate fortunes of various sectors of the market is difficult when it is discovered that your friends are and have been the market and also your chief campaign contributors...Independent Fed? the answer or the problem? Hmmm...

Perhaps if they had only let the markets develop naturally in the first place rather than trying to manipulate them from the get-go the path forward would be much clearer.

First there will be a global finance shattering event to level all playing fields...then the games will begin anew. It is ever thus.

If they could only keep these speculators out of the markets...the job would be easier.

USAGOLD / Centennial Precious Metals, Inc.

(06/26/2003; 14:04:06 MDT - Msg ID: 105101)

BULLION Special (read the blue ad text for details)

TownCrier

(06/26/2003; 14:59:38 MDT - Msg ID: 105102)

WGC on the global market scene in gold over the past day

http://www.gold.org/"The gold market is currently characterised by good physical demand out of the Far East, sluggish activity in the Indian sub-continent (to be expected as we are in the monsoon season), and selling from the investment and speculative sectors on the back of a steadier dollar.

"The market was quiet yesterday in advance of the FOMC decision and had a sombre tone to it after the sell-off on Tuesday (prompted in part by a stronger-than-expected consumer confidence figure in the US) and with the technical picture deteriorating, the bias was inclined to the downside.

"There is evidence of physical buying interest at these levels, and while the funds were sellers yesterday in the wake of the rate cut, this was met by bargain hunting interest as the markets remain uncertain about the economic outlook.

"Narrow ranges, then, with the $342-45/ounce range being cited as a support level and resistance seen at $352-355/ounce. June options expire today, which brings both the $345/ounce and $350/ounce levels into play."

TownCrier

(06/26/2003; 15:09:53 MDT - Msg ID: 105103)

JW's Afternoon Gold Report...

http://www.usagold.com/DailyQuotes.htmlExcerpts:

New York spot gold settled lower at $343.60 an ounce down $5.30 an ounce from yesterday's close. Gold fell lower on a stronger U.S. dollar and Fund selling though physical demand increased. "The only thing we're doing is reacting to the dollar," said the COMEX broker. "As time goes on people will start to think about gold and its relationship to interest rates on its own -- it's bullish." Low U.S. deposit rates also eliminated much of gold's contango, the premium earned by speculators and gold producers by selling bullion forward. "We could go a little lower. But it's not the end of the gold market," said the trader. "You are not going to get any producers hedging in a low interest rate environment, so that cap that isn't there," he said.

...Investors will be buying gold in the longer term on "prospects that the Fed will succeed in fighting deflation by helping to create inflation, and that is the catalyst which is bullish for gold," said John Person, head financial analyst at Infinity Brokerage Services.

Todd Hultman, president of Dailyfutures.com, a commodity information provider, said that for gold, "the lower the interest rates, the better." Traders didn't get the half-point cut many wanted, but "until the economy can show better strength, gold prices should continue to do well and easily be able to maintain their uptrend," he said.

Jon comments: "as the price of gold trades in the $340-$345 range, physical demand has emerged to underpin the price of gold. The lowest interest rate environment since 1958 with the possibility of yet another short-term interest rate cut at the upcoming August FOMC meeting continues to discourage gold producers from selling forward gold production. It remains highly unlikely that gold producers will cut their own throats by attempting to rekindle the "gold carry trade" at such ridiculous rates of return (in the current environment it would actually result in serious "real" losses). The lower gold price does allow for the opportunity to diversify portfolio positions. Given the level of economic and geopolitical uncertainty, gold will remain an attractive safe-haven vehicle for investors looking to diversify risk."

-----(click url for full report)-----

TownCrier

(06/26/2003; 15:31:35 MDT - Msg ID: 105104)

Dollar gets a breather during its slide

http://money.iwon.com/jsp/nw/nwdt_rt_top.jsp?cat=TOPBIZ&src=201&feed=reu§ion=news≠ws_id=reu-n26497151&date=20030626&alias=/alias/money/cm/nwHEADLINE: Dollar gains on Fed ease, but rally may be brief

CHICAGO, June 26 (Reuters) - A smaller-than-expected U.S. rate cut triggered a rally in the dollar on Thursday...

...the Federal Reserve's quarter-percentage-point rate cut on Wednesday further erodes the attraction of U.S. bond yields.... The European Central Bank's current refi rate is 2.0 percent, compared with the new U.S. federal funds rate of 1.0 percent, its lowest in 45 years.

So while there may be too many cards stacked against the greenback to turn the dollar's long-running decline 180 degrees, creeping optimism about the U.S. economy could slow the pace of its decline, analysts said.

...analysts were hesitant to jump on the greenback bandwagon, noting that U.S. interest rates still lag those in other large economies.

"Honestly, I don't see how this is really positive for the dollar," said Greg Anderson, senior foreign exchange economist at ABN-Amro Bank in Chicago. "What the Fed has done is put U.S. yields much below the rest of the yields on the short end of the curve where speculators live. If that's the case, who is going to want to buy U.S. assets?"

...Even if over the near term the euro were to slip back to $1.10, the weight of the U.S. current account gap "is not going to go away" and will continue to hurt the dollar...

-----(see url for full article)------

Call Centennial today to build your base. Get your order placed now and in the pipeline for timely delivery to you, locking in very attractive prices in this financial environment.

R.

TownCrier

(06/26/2003; 15:52:46 MDT - Msg ID: 105105)

Fed adds $12.5 billion dollars in open market ops, M-2 money supply grows by $23 billion on the week.

http://biz.yahoo.com/rf/030626/economy_fed_moneysupply_table_1.htmlThe Federal Reserve today intervened in the open market with overnight RPs to the tune of $7.5 billion and $5 billion in longer term (28-day) repos. At the time of the operation the market in fed funds was reportedly trading at 1.125%, above the new FOMC target of one percent. [Please recall yesterday's early morning comments on this.]

Elsewhere, the Fed's latest release of weekly stats reveals these following growth figures to the U.S. money supply. (see url above for more stats)

M-1 up $15.6 billion to $1,276.7 billion

M-2 up $23.1 billion to $6,045.7 billion

M-3 up $19.9 billion to $8,721.4 billion

Meanwhile, Mother Nature isn't creating any new gold on earth, nor is she easing her grip as a matter of economic stimulous or policy one way or another.

R.

TownCrier

(06/26/2003; 15:56:37 MDT - Msg ID: 105106)

There is no letter 'o'

... in 'stimulus'.

Thank you.
:-)

R.

Great Albino Bat

(06/26/2003; 16:28:10 MDT - Msg ID: 105107)

C.V. Myers - a wise investor!

Old C.V. Myers � a Canadian � was a wise man with a lot of experience. His son, John, writes a newletter. C.V. (Vern) Myers also had a newsletter, and it was worth every nickel of the subscription price.

Old Myers was not too sanguine about any imminent rise in the price of gold, at the time of his death. I guess he passed away some twenty years ago, well after gold had come down considerably from its great peak of $850/oz. He got his readers into gold at the right time, and out of gold, at a very good moment. He made a heap of money for those who followed his advice.

He wrote a good book, "Rollover", which is worth reading today. He did not think that gold was an especially good investment when he wrote the book, and he was right on that score. However, he did recommend some gold in everyone's portfolio, just in case.

Myers, having been a farmer, regarded debt much as a farmer regards building clouds. Debt can be compared to clouds, was his view. Clouds build up, massive clouds of debt are suspended in the air. The sky grows black with debt clouds � promises to pay, sometime.

Then one day, precipitation begins. Liquidation of the debt cloud begins. It begins to rain promises to pay, and these are not further rolled over back into the cloud: payment in cash now! Once it starts to rain, once liquidation sets in, it rains and it rains and it pours, and the liquidation does not stop, cannot be stopped until the clouds are gone.

C.V. Myers also liked to mention frequently, that "every debt is always paid: if not by the debtor, then by the creditor."

When liquidation sets in, and creditors don't want to rollover their credits but demand payment in cash, then � either the creditors can't collect, or if they collect, they collect in further promises to pay called dollars, which in a liquidation crisis will be provided by the Fed, and so the liquidation of debt will provoke a veritable flood of dollars; the creditors will collect from this flood of greatly devalued dollars, if they collect at all. So they end up paying most of the debt, after all.

Another of C.V. Myers ideas took shape in his youth, as a farmer's boy on the plains of Canada: "The Storm is Coming!" A deadly storm, if you are not prepared. But, his family was snug in their home, well prepared for all the cold and snow the storm could hurl at them. "Let it storm! We're ready for it!"

Today the coming storm is vastly more powerful, vastly more threatening. My guess is that he would be telling us, "Time to put some gold in the cellar, now!"

C.V. Myers, hats off to you! And, rest in peace. The GAB.

Goldilox

(06/26/2003; 16:40:35 MDT - Msg ID: 105108)

Emergency Meeting on Nat Gas Storage

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1054966435731&p=1012571727162snippit:

It already has become known as "the other energy crisis", but unlike the never-ending international tussle over oil, the current shortage of natural gas in the US is, for the most part, a domestic creation.

After months of squeezed supplies, record low inventories and worryingly high prices on the spot market - up 700 per cent over the past three years - the US government has acknowledged that its longtime support for the clean, cheap, plentiful and mostly domestic energy source has come at a considerable cost.

Goldilox:

Thanks BB for feeding this information about 6 months prior to anyone else waking up!

R Powell

(06/26/2003; 16:42:47 MDT - Msg ID: 105109)

TownCrier // Wordmaker

Your post....

TownCrier (06/26/03; 15:56:37MT - usagold.com msg#: 105106)
There is no letter 'o'
... in 'stimulus'.

My thoughts.....Why not? But we'll have to use it as an adjective, okay? Why he noun modifying form of stimulus be stimulous? Actually my dictionary says the adjective form is stimulatory. Hey, how do we know Webster got that one right? Maybe he just couldn't spell stimulous?

Sorry, slow day.
Rich

R Powell

(06/26/2003; 16:45:19 MDT - Msg ID: 105110)

(No Subject)

That jumbled sentence should read.... Why couldn't the noun modifying form of stimulus be stimulous?

Goldilox

(06/26/2003; 16:49:19 MDT - Msg ID: 105111)

BoE Warns of "Risky Investments"

http://www.guardian.co.uk/business/story/0,3604,985100,00.htmlsnippit:

The hunt for high-yielding financial returns in a climate of low interest rates may be tempting investors into risky assets, the Bank of England warns today.

In its half-yearly health check on the state of the global financial system, the Bank reports an easing of the concerns voiced last autumn during the fall-out from the Enron and WorldCom scandals.

The latest edition of the Financial Stability Review says that the system has shown few signs of stress despite weaker growth, the sharp fall in share prices up to mid-March and the heightened uncertainty related to oil prices and the build-up to war in Iraq.

Goldilox: "DUH!" Get your "golden parachute" today at lowered prices!

Goldilox

(06/26/2003; 16:58:57 MDT - Msg ID: 105112)

NASA BPP funding discontinued

http://www.lerc.nasa.gov/WWW/bpp/#nextsnippit:

In the Summer of 2002, the BPP Project Management was informed that all "revolutionary propulsion research" was eliminated from the NASA ASTP budget.� No reason was documented for this action.� Since then, other internal NASA funding sources were sought.� Amidst reorganizations and replanning of larger propulsion projects, however (for example, Space Launch Initiative, Orbital Space Plane, etc.), there has been no decision regarding the disposition of this small BPP Project.� As of January 31, 2003, the BPP Project Management was informed, from Code-R "Energetics" (which is under "Enabling Concepts and Technologies"), that no Fiscal Year 2003 funds are available to sustain the BPP Project while waiting for a firm "yes/no" decision.

This means that the competitive research solicitation for propulsion physics research, originally planned to be released during calendar year 2002, will NOT occur.� Also now at risk is the BPP Consortium.� This Consortium was initiated in January 2002 with the Ohio Aerospace Institute (OAI) as the venue through which to conduct this next solicitation, create an Advisory Council with renowned physicists, and to database the BPP research opportunities and findings.� Funding for the Consortium runs out in June 2003.� Funding for the BPP documentation contractor (who handles the 1000+/yr unsolicited correspondences, bibliography, and research documentation) runs out in September 2003.

Marc Millis, the remaining NASA Civil Servant assigned to the BPP Project, is now compiling the findings from research completed thus far.

Goldilox:

With the Oil Cartel running the US, it is to be expected that they NIX the "Million Solar Home Project" and any alternate energy research. If they can't sell us fuel, then all bets are off! Notice how much more funding is available for fuel cells than solar soultions.

Aristotle

(06/26/2003; 18:11:54 MDT - Msg ID: 105113)

Batman, Meyers, debt, wealth, etc...

"Every debt is always paid: if not by the debtor, then by the creditor." --- C.V.Meyers

I wonder how many people really *really* know what this means?

I wonder if the prevailing casual first assumption or impression is that the bank, having made the loan, is The (with a capital T) Creditor. So they think, ho-hum, "Big deal. If the debtor fails, the bank is left holding the bag. Serves them right." Or whatever.

Well, lemme tellya, folks, the commercial banks are just middlemen in the whole affair, every bit playing the role of the debtor themselves as they are playing the role of creditor. Don't believe me? Have you ever heard of a bankrupt bank? It takes a debtor to go bankrupt.

So, if a wave of debtors fails to the point where the crediting bank cannot itself pay off all the debt with its available capital, it passes the buck (er, the debt) along to the Ultimate creditors -- the depositors of the bank. This roving debtberg is paid by guys like me and you as we lose the money we had risked/deposited in that institution.

"But wait!", you say, "what about FDIC?" (Federal Deposit Insurance Corp.)

Yes, that's quite correct... so jumping ahead right to the end of this thread, the product of our (best) system of Majority Vote is that we've organized our economic affairs in such a way to SOCIALIZE our losses. Something like, "No man left behind!" or "Not me!" or "Why me if not him, too?"

So, the long and the short of it is even if we aren't directly among the poor chumps who lost their money with a particular failed institution (whatever it may be,) circumstances will generally ensure that we bear part of the burden of the losses.

How safe do you think your individual wealth will be in the form of money, paper, and contracts when the whole solvency of the U.S. is called into doubt? It's a lot easier for the system we live in to socialize the losses to include you and a share of your wealth when you are *fully* committed as a counterparty (creditor or debtor) to others directly or indirectly failing within the system.

That's why it's so important for you to put yourself on a Personal Gold Standard -- a standard of savings that involves dutifully taking some of your chips off the System's table and exchanging them safely for the kind of physical wealth that is outside of the socialized system.

In this way, your physical Gold is unattached to the social net and is a more perfectly suitable individual representation of your wealth than can be represented by any amount of your lawful papery monetary and contractual claims upon and entanglements with the Social net.

Representing full ownership by its physical presence and not contingent upon the faithful performance of someone else's liability under a contract of some sort, Gold is a convenient portable property that might be viewed by its owners as akin to the clothing on their back -- an altogether indispensable item of personal wealth that can be incrementally added or shed as conditions warrant in the world around us. No one should be without it, and no self-respecting social system should ever contrive to deprive a man of his well-earned clothes by any social fiat declaration in times of crisis that all physical fabrics residing outside the official *netting* are null and void, thus compelling us, too, to wear the emperor's clothes (naked) in equal misery along with all of his more willing welfare-state subjects.

Simply put, if you're not contributing to the unraveling network crisis as a creditor in any manner, the system won't so easily be able to stick you with its many counterparty woes and force you to share directly in the losses beyond that measure. You know what to do, people! Choose Gold for your principal savings and you'll always know the size and shape of your wealth!

Gold. Get you some. --- Aristotle

Leigh

(06/26/2003; 18:55:26 MDT - Msg ID: 105114)

Aristotle

Since when has anyone considered our government "self-respecting?" I'm beginning more and more to think that they wouldn't hesitate to outlaw gold "in the public interest."

This government has already gone far beyond my most paranoid fears. I truly believe they are capable of anything at all, especially against someone who wants to live outside their system.

Goldendome

(06/26/2003; 18:57:18 MDT - Msg ID: 105115)

(No Subject)

Aristotle: Very well put and on mark, Amen.

Max Rabbitz

(06/26/2003; 19:13:10 MDT - Msg ID: 105116)

Goldilox

Don't cry for NASA. I'm all for science and new forms of energy/propulsion but NASA is mostly political doing a little science (very expensive) on the side. Their major goals are national self esteem, diversity and global community. The expensive space station is really not needed by science and takes money from these projects IMO. Government funded research has it's place but most of what I see at NASA is image. I'm surprised any government program gets cut. NASA must be having some big internal budget battles. Sorry if this is a little off topic but are energy companies really the big bad guys or just easy scape goats for a wastefull society.

Max Rabbitz

(06/26/2003; 19:41:35 MDT - Msg ID: 105117)

Leigh

I've come to similar conclusions about the risk our own government posses to those who opt out of their papaer systems. Our host has provided wise advise regarding pre-1933 coins. These coins also offer a link to the past, when a global reserve currency was gladly accepted by all and when governments had some respect for the savings of it's citizens.

cyberbat

(06/26/2003; 19:42:26 MDT - Msg ID: 105118)

@ Leigh

Leigh, you are so right on !!! However, along with all privacy lost and fast losing freedoms guaranteed by the Constitution, I believe that they have the economy running by powerful computers. This will tell them when and what to do when D day approches. If it gets that far , look for gold to be outlawed. (Prime competitor of paper money)
Let me say just this though on that subject. "When gold is outlawed, I will become an outlaw"!!
But wait, this fraud has already been perpetrated on the citizens once already. "Fool me once, shame on you; fool me twice, shame on me".
WHO AMONG US WILL TURN IN OUR GOLD?
Cyberbat

Sundeck

(06/26/2003; 20:46:05 MDT - Msg ID: 105119)

China Treasury Bill Sales Set Record in Credit Curb

http://quote.bloomberg.com/apps/news?pid=10000080&sid=atB4zPrBzHmE&refer=asiaSnips:

"...
China Treasury Bill Sales Set Record in Credit Curb (Update3)
June 26 (Bloomberg) -- China's central bank sold a record 100 billion yuan ($12.1 billion) of treasury bills to state-owned lenders this month in an attempt to cool credit amid surging money supply and free-wheeling real estate lending that's led to fraud.

The People's Bank of China on Monday may sell 30 billion yuan more bills on the interbank market, bond traders said. State- owned banks, sitting on 20 trillion yuan on deposits, are the biggest buyers of the bills because their investments are restricted to government debt.

For the central bank, the debt sales are the last resort. The bank said on June 13 that it will raise its reserve requirement on deposits for the first time in 15 years if draining cash from banks through bill sales doesn't squeeze lending. The comment has sent stock and bond prices lower.

``Raising the reserve ratio is rarely used and is seen as the last and most drastic remedy, so the central bank won't rush to do so unless data in the next few months show money supply and bank credit are expanding at runaway speed,'' said Xia Chun, an economist at China Merchants Securities Co. in Shenzhen.
..."

Sundeck: There has been talk recently in the US of lowering the reserve ratio (in the US) in order to inject liquidity into the stalled economy. Looks like China has the opposite problem, presumeably brought about by a roaring trade surplus, growing reserves and the wonders of fractional reserve banking.

Dollar Bill

(06/26/2003; 21:24:57 MDT - Msg ID: 105120)

#*!*#

..I dont recall reading a post on the drug bill going through congress right now.
..I believe that besides the low interest rates, and the manipulation of long term bond prices, and the stock market manipulation going on, fiscal policy is employed also.
..I am guessing that the drug benefit is the first step toward the govt. picking up the tab for more and more medical expenses to help the consumer spend on other things as we continue our march towards hyper inflation.
..I did read somewhere a couple months ago that fiscal policy was in the list of unorthodox Fed policy options to "fight deflation"

Black Blade

(06/26/2003; 21:30:16 MDT - Msg ID: 105121)

8 million may lose OT pay

http://money.cnn.com/2003/06/26/news/economy/epi/index.htm
Bush administration proposal would dramatically alter rules for paying overtime, study says.

Snippit:

NEW YORK (CNN/Money) - More than 8 million workers in the United States will be ineligible for overtime pay under a plan proposed recently by the Bush administration, a research group said Thursday. The Economic Policy Institute (EPI), a liberal Washington think tank, examined a proposal by the Labor Department to change the criteria for paying overtime and found that it would cost 2.5 million salaried employees and 5.5 million hourly employees their right to overtime pay. The proposed changes, which were first introduced in March, will be implemented by the Labor Department after a "public comment" period, which expires on Monday.

Black Blade: Corporations continue to fire workers to cut costs as the recession worsens and with the real unemployment rate running about 10-11% this proposal could increase worker productivity as measured by the Bureau of Labor Statistics by requiring fewer workers to do more work for less pay. The BLS may use this to develop a new measure such as "imputed workers" to massage the unemployment data by supposing that there are fewer workers doing more worker and so it is "imputed" to be more workers therefore lowering the unemployment rate. Hey, come on, this is how these clowns in government think and Wall Street swallows it "hook, line and sinker". This should get "interesting".

Black Blade

(06/26/2003; 21:39:26 MDT - Msg ID: 105122)

Retailer May has cut 1,500 employees

http://www.freep.com/money/business/may26_20030626.htm
Snippit:

ST. LOUIS -- May Department Stores Co. said Wednesday it laid off about 1,500 workers in sales management and support positions. That's about 1.3 percent of its overall workforce. "We're adjusting the workforce to keep expenses in line with sales," said Sharon Bateman, vice president of corporate communications for May. Employees were told of the layoffs Tuesday.

Black Blade: More cost cutting send 1,500 nonessential bones to the growing "Bone Pile".

Black Blade

(06/26/2003; 21:44:38 MDT - Msg ID: 105123)

Fiat to Cut 12,300 Jobs

http://quote.bloomberg.com/apps/news?pid=10000006&sid=ajCBATnuKunQ&refer=home
Snippit:

June 26 (Bloomberg) -- Fiat SpA, Italy's biggest manufacturer, will cut 12,300 jobs worldwide and close factories at its truck and U.S. farm-equipment businesses as the company tries to stem two straight years of losses.

Black Blade: Euroland does its part to add to the "Bone Pile".

misetich

(06/26/2003; 21:45:19 MDT - Msg ID: 105124)

US Reality Check: Auto Dealers: June Sales Mildly Disappoint

http://www.economeister.com/reg/popup/single_story.jsp?prod=114&ts=1056631800000&sn=1&banner=mainwireSnip:

NEW YORK, June 26 (MktNews) - U.S. auto dealers offered mostly
faint praise for June, with sales down from May and mixed from a year
ago. Foreign makes continued to gain the edge in market share, auto
professionals said.
...........
************
Misetich

The long waited US economic recovery is post-poned for a little while yet - The 13th IR cut - tax cuts - government spending and soaring deficits are having no effect. Sooner rather than later another leg down in the SM is expected as 4th quarter earnings are readjusted to reality.

All On Board The Gold Bull Express

All On Board The Gold Bull Express

Black Blade

(06/26/2003; 22:02:45 MDT - Msg ID: 105125)

High price of natural gas slashing profits

http://www.chron.com/cs/CDA/ssistory.mpl/business/energy/1967760
Snippit:

Higher gas prices are causing electricity costs to rise because an increasing amount of power is generated by burning natural gas. But this surge has hit industrial users hardest, because they tend to have natural gas supply contracts that vary more than the rates paid by consumers.

Lawmakers and activists will gather today in Washington to brainstorm on what can be done. Supplies in storage are tight as the nation heads into the hottest time of the year, when heavy air-conditioner use will push up demand for gas to power generators. This demand could short-circuit the flow of gas into storage caverns, which normally happens during the summer.

Black Blade: Higher energy costs are killing several manufacturers. The chemical, metals, agricultural, and other heavy industrial manufacturers are closing up shop and moving offshore. The mild temperatures last week led to a record build in storage but this also was due to pipeline stripping as storage operators compete for all available NG ahead of the Summer demand when "air conditioning season" kicks into high gear. The most recent NWS and NOAA forecasts call for a warmer than normal July and August. As Energy Sec. Spencer Abraham said - "we're not out of the woods yet".

misetich

(06/26/2003; 22:09:07 MDT - Msg ID: 105126)

GDP Soft, Jobs Picture Brighter

http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=2997974Snip:

WASHINGTON (Reuters) - The U.S. economy grew more slowly than previously thought in the first quarter, the government said on Thursday, though there were signs of potential improvement ahead in new jobless claims data.

Weighed down by Iraqi war worries, which constrained business spending, gross domestic product crept ahead at a 1.4 percent annual rate in the first quarter.

That was less than the 1.9 percent pace the Commerce Department estimated a month ago, and matched the rate for the final quarter of 2002.
***********
Misetich

US economy is barely over the RECESSION threshold -

The headline hints at jobs picture being brighter , citing " total of 404,000 workers filed for unemployment insurance payments at state offices in the June 21 week, down 22,000 from a revised 426,000 a week earlier.".

They are grasping at any "positive" news - unwilling to accept reality -

All On Board The Gold Bull Express

mikal

(06/26/2003; 22:22:52 MDT - Msg ID: 105127)

@BlackBlade

Re: Your unemployment article and comments-

Suppose the BLS "develops a new measure such as imputed workers" to impute their are more workers and thus a lower unemployment rate. Then I would expect it to be muted in contrast to the proportionately large unemployment picture, as it grows. But it's true it would join their arsenal like deflators, hedonics and other adjustments, trying to bend reality but instead pushing the limit of credibility on the street. Many are waiting for the consolation of a smaller federal government because of the shrinking "real" vs official economy, and lower taxes may spur cutbacks. Nationalization of industries will increase IMO. Just as the Fed reflates(filling a few spare tires for banker's life preservers) and prepares to use announced tactics of monetization.
Nothing new, as officially sanctioned monopolies like press, health care, weaponry, etc., decades of centralizing services and subsidized economic sectors(thus expanding bureaucracy exponentially) are implicit U.S. invitations to more nationalization or socialization.

spotlight

(06/26/2003; 23:04:05 MDT - Msg ID: 105128)

gold mines convertible bonds

Anyone:
I would appreciate recommendations for a convertible bond in a
good producing gold ming company.

slingshot

(06/26/2003; 23:47:18 MDT - Msg ID: 105129)

Fear of owning Gold

Leigh, Max Rabbitz, Cyberbat.We are all making a bed that one day we will have to sleep in. The threat of the "C" word constantly comes to mind as we accumulate our nest eggs against financial disaster. Our Host may be right at this time for which coins would not fall under such recall. But I find IMO that Gold Is Gold Is Gold. In any form, from any nation. That in time of crisis all will fall under government edit. It only takes an Executive order and we all become outlaws. How many E.O's have been issue without knowledge to the public? So I choose to acquire any form of gold. Whether it be Krugs,Pesos, Pandas etc at a price desirable. Knowing in my heart, all will be at risk.
Slingshot----------------<>

Topaz

(06/27/2003; 00:10:39 MDT - Msg ID: 105130)

How high the Moon?

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=d12We see the 50 day MA crossed and another sharp decline in Bonds in the offing which bodes well for Cash-Dollar Bulls. If the momentum isn't continued ie: Yield rise-Dollar fall...well, it won't be pretty!
Will follow up with $/B/G Link.

Topaz

(06/27/2003; 00:18:22 MDT - Msg ID: 105131)

Dollar, Bonds and Gold.

http://www.futuresource.com/charts/multicharts.asp?symbols=DX1%21%2CTYXY%2CFVXY%2CGCM03.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=9&go.y=9DX (Sept) is halted from 2200 'till 0300 (or thereabouts) explaining the anomoly Spot/Sept. Usually 40 odd points above Spot...Watching this spread with interest.

Belgian

(06/27/2003; 02:02:11 MDT - Msg ID: 105132)

@ Ari # 105113 (Batman/Meyers/Leigh)

More of the same...Do people "really" know-realize, that price-inflation has very little to do with the costs of the products-services, but... EVERYTHING WITH THE PERMANENT DEVALUATION OF CONFETTI !!!

Combine, "debt" and "devaluation" and realize on "what" this "MODERN", global economy, is builded upon.

One never gets the "equal" value in barter-terms for his/her production or service. Rising debts and increased depreciation of the confett-numeraire for settlement is a downwards spiral. Each next one gets less "value" than his previous producer.

This is what they WRONGLY call "inflation" wich should rather be named GENERAL DEVALUATION ! But this term sounds oh so terribly negative because it names the "system" on wich the global economies do thrive, now and in the past.

The more we must live with the "wrong" (false) notion of "profit", the more this particular economic system must be kept on running with an ever increasing degree of general-concerted "Intervention" that rises in complexity and becomes therefore un-manageable.

I think that the evolving dollar-management is bringing us much closer and faster to the impossibility of further good Interventional management. The chances of a general systemic collapse do increase dramatically if and when the global economy stays at it is now for much longer, and/or detoriates even further. Things will become absolutely un-manageable and drastic measures will be needed to bring drastic changes. Needles to remind how Gold fits into all this high probabilities.

Note how many (all) analysts (?) run out of "diagnosises", to explain the causes for what is happening ! A strong indication to me that they don't dare to bring up the "real" reasons for the increasingly, more strongly percepted, malaises.

There is much,... MUCH more, going on, out there, than the simple unwinding of the known,, many "bubbles". Those same
detoriations that always existed, are rapidly evolving into "extremes", not locally but globally ! And therefore much more likely to become un-manageable, anymore.

Boilermaker

(06/27/2003; 05:48:37 MDT - Msg ID: 105133)

Negative Interest

http://biz.yahoo.com/rf/030627/markets_japan_minusrate_2.htmlSnip
Reuters
UPDATE - Overnight euroyen rate tumbles to minus 9.0%
Friday June 27, 6:16 am ET
By Yoshiko Mori

TOKYO, June 27 (Reuters) - The overnight interest rate in the euroyen deposit market fell sharply on Friday to minus 9.0 percent -- a world record negative rate -- as non-Japanese banks got out of yen positions ahead of half-year book-closings.

The drop in the yen rate also reflected, via currency swaps, a seasonal rush for funds in the dollar market.

Many institutions, particulary Japanese banks, had waited for a widely anticipated Federal Reserve credit easing this week before securing funds for June 30 book closings.

comment
Does this suggest recent $ strength is due to seasonal factors and will reverse next week? If so the POG may respond accordingly. Could one of our currency experts please explain what this means?
It also suggests that fiat currencies are becoming more unstable. Sort of like rearranging the deck chairs on the Titanic.

a nation of one

(06/27/2003; 08:30:46 MDT - Msg ID: 105134)

@ Boilermaker (6/27/03; 05:48:37MT - usagold.com msg#: 105133)

I think it means that present dollar activity is based on what the dollar did in past years, during this season,
and that it isn't related to anything of substance. The explanation also describes certain tactical needs
perceived by the entities involved. These moves would be, therefore, artifacts of minor technicalities,
manifesting due to traders' methods. While such actions can have an effect, as we see, the underlying
realities remain unaffected.

Tevye

(06/27/2003; 09:16:01 MDT - Msg ID: 105135)

(No Subject)

!"price-inflation has very little to do with the costs of the products-services, but... EVERYTHING WITH THE PERMANENT DEVALUATION OF CONFETTI "

Thanks Belgian. It's nuggets like this that keep me reading the forum.

Gold. Its tradition!
Tevye.

silvercollector

(06/27/2003; 09:18:35 MDT - Msg ID: 105136)

Belgium, Ari

A couple quotes from the esteemed:

"Do people "really" know-realize, that price-inflation has very little to do with the costs of the products-services, but... EVERYTHING WITH THE PERMANENT DEVALUATION OF CONFETTI !!!"

"How safe do you think your individual wealth will be in the form of money, paper, and contracts when the whole solvency of the U.S. is called into doubt?"

Belgium,

I think more realize what you're saying than you give credit for. The cheeseburger phenomona has been discussed often. We collectively kicked around the concept of all items that are 10X more 'expensive' since the '70's. I believe everyone appreciates that a gallon of gas remains a gallon of gas, it is the 'confetti' that has shrunk. Another concept that has been toyed with most extensively is the 'pockets' of inflation. If indeed the confetti has shrunk by a factor of 10 let us say for example, why have numerous items inflated 10 times while others have inflated less or not at all?

Ari,

I imagine my 'paper' assets will be on thin ice "when the whole solvency of the U.S. is called into doubt?" Let me ask a question or thirty. Why will the solvency of the U.S. be called into doubt? Are there not numerous countries in a similiar or worse 'boat'? Will the U.S. be the first country to be called into doubt? Is this why it is prudent to leave U.S. assets now? Is it imminent that U.S. solvency will be questioned? Will the U.S. be able to satify creditors or will there be a paper avalanche? Is it imminent that U.S. confetti, namely the U.S. dollar, will burst into flames and we will have harmful inflation, a la hyperinflation? Is this imminent, is this a guarantee? Will other fiat currencies such as the Euro, the Yen, other 'dollars' etc. experience the same fate or is this upcoming crisis limited to the U.S. dollar only? Why? When? How do we know that gold is the ticket? If energy is the up and coming crisis of the next generation why not hold proxies for energy? Are the oil producing countries buying gold because when the oil is gone only gold remains? Is gold a proxy for energy?

TIA

Mr Gresham

(06/27/2003; 09:20:14 MDT - Msg ID: 105137)

Capital Formation

You see, the absence of capital formation IS the psychology, and the condition, of Third World countries. So that is where we are headed.

In 3rd world countries, guys stand around on street corners exchanging various currencies that are under differing degrees of gov control or pressures. (In response to previous gov or financial elite mistakes or plunderings.)

We are a bunch of currency speculators, if you will, which is pretty much the end result of finance capitalism in the absence of capital formation being applied to real, productive businesses.

We are speculating on the return of a sound currency, but if your crystal ball had told you, in 1980, that humanity was about to embark on another surge of fiat mania, you would have held your nose and wisely placed your bets in that arena.

Being a street-corner moneychanger is a dicey occupation, but it is the REAL CONDITION of finance under a currency regime change. Get used to it.

I'm not sure where I got off from my original thought of Capital Formation, but I realize upon asking myself, that I am very able to think of examples of the opposite, which is what I have seen all around me most of my life.

(FOR EXAMPLE: Is the promulgation of oil-drilling and refining equipment to extract a disappearing resource for frivolous consumer use a shining example of net capital formation??? Individually, yes; societally, no.)

I have NOT seen many examples of real capital formation in public view in recent decades of finance capitalism. (I think most real capital formation must happen QUIETLY(!), out of the spotlight, and away from the headlines.)

(I have also seen some impressive comparisons of ethnic communities forming, and de-forming, capital among themselves. Korean and Chinese immigrants as the star examples. African-Americans taking backward, or mis-directed steps.)

In the absence of a well-learned roadmap to capital formation among us less-disciplined races (tee-hee -- watched one too many films lately about the Brits "taming the wogs"), the best form of capital management is to hold your "currency" in physical gold, until we can get legs under our economic behavior, and capital can be put to productive use.

There has always been risk in employing capital, and gov has always interfered at various levels, to varying degrees.

It's just that now, when you hear the sirens in the distance, it's a good time to gather your winnings, walk out the back door of the casino, and be out taking an innocent neighborhood walk in the night air.

silvercollector

(06/27/2003; 09:29:55 MDT - Msg ID: 105138)

Belgium

There was an essay not long ago that discussed the concept of inflation a la devaluation of confetti.

The question was raised that if, for example, over a generation from 1970 to 1995 ALL assets and prices increased by a factor of 10 and if because of this 'controlled' inflation debt was being made smaller then what would be the harm.

It is apparent that the inflation/devaluation has become fractured, asset inflation has not filtered evenly across the board, SM soar , then bonds soar, then real estate soar. It is the bubble syndrome that many write about. The bubbles are created, exist and are burst. The crooked and inside fed monsters are 'in' the correct bubble at the time of inflation and leave coincidentally just prior to the bursting. It is the poor laymen that gets caught on the wrong side of the bet during each bubble era.

So the system is now erratic, out of control, a monstrous bubble containing a collective of asset bubbles.

Where do we go from here, what is the endgame?

TIA

admin

(06/27/2003; 09:30:51 MDT - Msg ID: 105139)

MK's Gold Commentary & Review

http://www.usagold.com/AMK/MK-gold.htmlUpdated.

New QuickNotes.
New Important Links: The Longshoreman-Philosopher, Eric Hoffer, a tribute by Thomas Sowell

Introducing "America's Deficit, the Dollar & Gold" by Dr. Tim Congdon, now available at our Gilded Opinion Page. An important 52-page essay.

From QuickNotes:

"The upshot of Dr. Congdon's analysis is that foreign governments may opt to acquire gold reserves in the face of on-going dollar weakness -- as the last standing logical alternative to inflated currencies. That by the way coincides with Nobel prize-winning Robert Mundell's similar conclusion. The search for gold reserves though presents a nettlesome problem: Any central bank wishing to obtain gold will have to do so from out-of-the-ground mine production or from investor holdings. During the last shift in gold reserve balances in the 1960s and 1970s, the United States sent a substantial portion of its reserve to the Europeans (roughly 12,000 of 20,000 tonnes). There is no such ultimate gold provider this time around."

Dr. Tim Congdon was at one time one of the so-called 'Wise Men' advising the Blair government on economic policy. Our thanks to Dr. Congdon and the World Gold Council for kind permission to reprint this article. There are also some interesting theories as to where the dollar is going vis a vis the euro -- theories proven to be absolutely on the money thus far.

____________

Mr Gresham

(06/27/2003; 09:42:18 MDT - Msg ID: 105140)

Why is fractional reserve banking dishonest?

http://www.dailyreckoning.com/Because it forces people to bet against themselves -- and each other -- that their money will be safe on loan to the banks.

With 100% reserve, no problem. 50%, or 20%, or some such, might be manageable under the predictable cycles of commerce that create demands for liquidity. (Farming seasons used to have a big cyclical effect on banking liquidity in the 19th century.)

But ZERO? What does that do, or say, to us?

They are MATHEMATICALLY FORCED to watch for signs that their money might disappear in a panic, ("why, Bill; your money's in Bob's house over there, and Fred's" -- had to get that Jimmy Stewart classic out of the way ;)

Mathematics screams at them to be on alert, but they are coached by authority not to worry. And -- THEY DON'T! What a set-up!

The present effective 0% reserve is impossible to sustain -- forever -- unless people resign themselves to losing the real value in their deposits every so often.

But I guess it goes along with (sub-) 1% interest rates. Heh-heh.

Think about 1% interest. At a certain point in life, you are discounting your remaining years of life. If I wanted to retire at 60, and had no savings, but could borrow a million dollars at 1%, I would be crazy not to. (I know, a 20-year loan would cost a few points more.) I'd NEVER HAVE TO WORK AGAIN! I'D BE DEAD BEFORE I HAD TO PAY IT OFF. And, especially if I converted my new "savings" to the right form.

Sorry for shouting, but I think I've got Mogambo overdose (link above) -- the guy is trippin' lately! And who can forget the 5-word summation to his previous Nobel Prize essay: "Buy gold, you freakin' moron!"

Socrates964

(06/27/2003; 10:11:10 MDT - Msg ID: 105141)

Boilermaker

Not an expert on Euroyen, but the fact that there are no takers for Euroyen suggests that the market expects the Yen to appreciate against the dollar. Otherwise it would be a lucrative carry trade.

This may be because Japanese banks bought loads of treasuries, hung on for funding until the last minute in the hope of cheaper $ funding (on the back of the Fed decision) and created a log-jam of demand.

If the US$ strength is the result of this process, then the implication is that it will weaken again from early next month onwards, although I don't know enough about the market to judge whether the size of the above effect would be significant.

Mr Gresham

(06/27/2003; 10:17:40 MDT - Msg ID: 105142)

missed a thought below

"Because it forces people to bet against themselves -- and each other -- that their money will be safe on loan to the banks."

It puts the onus for not collapsing the system onto the PEOPLE themselves, rather than the fiduciaries who are supposed to be holding their savings. The message is: "If you try to take your money out, you'll collapse the system, you won't get it, and IT WILL BE YOUR FAULT!"

Wow! I really want to play in a game like that. But big scams, big lies, have a way of catching on in human culture, and having longer-than-deserved life cycles, don't they? Why IS that?

And the recent hints of threats to TAX their bank savings that are not being spent -- why, that goes right along with Zero Reserves and 1% interest rates, doesn't it? That piece of idiocy is the criminals attempting to browbeat the public with a backhanded confession to what they have done already: disappeared your savings.

Next, we'll be treated to a round of media touchyfeelies about upended financial/Enron types seeking therapy, changing "lifestyles", getting in touch with their "Inner Banker", attempting to "start over" after the Great Banking Collapse. Awwwwwwwww.... (As I complete this thought, repulsed as I am, I realize that this one is likely to come true. Watch for it! Yeccch!)

Meanwhile, the tone I'm hearing from them is: "Let's hurry up and get it over with. You've been taken. Even we are bored with our game. Let's get the next one started." All the panache of a peep-show operator in Times Sq. (which is probably where a lot of
middle America's hard-earned investment cash entrusted to Wall St. ends up)

As you can see, I AM Mogambo'd out -- time to get out for a walk in some fresh air...

Socrates964

(06/27/2003; 10:46:04 MDT - Msg ID: 105143)

Euroyen carry trade

If my analysis below is correct (i.e. that Japanese institutions have been backing up the truck with treasuries) they must be in the process of having their heads handed to them on a plate given today's sell-off.

a nation of one

(06/27/2003; 11:21:05 MDT - Msg ID: 105144)

@silvercollector (6/27/03; 09:29:55MT - usagold.com msg#: 105138)

"So the system is now erratic, out of control, a monstrous bubble containing a collective of asset bubbles. Where do we go from here, what is the endgame?"

*** When a wheel wobbles, it usually falls off.

USAGOLD / Centennial Precious Metals, Inc.

(06/27/2003; 12:55:36 MDT - Msg ID: 105145)

Build your base with bullion... at our cost + 1% ($3.50)!

http://www.usagold.com/gold-coins.html

Topaz

(06/27/2003; 13:38:37 MDT - Msg ID: 105146)

@Boilermaker.

The Dollar trend reversal had legs before the rate cut B'maker and I don't think, given the size of the Global FX Market, we'll see a return to the 92-94 Index area any time soon.
The Euro (60odd % of the Index) may be suffering a lack of confidence as a result of the Trichet pre-announcement...and of course there's the deflation thing, which is consistent with a Bond sell-off. (flight to Cash)
Empirically, with the Fed now enarmored, via the Discount Window, to put on a Welcome Home Parade for Big Float, I'd expect to see the yield curve reflecting a contrived normalcy from now 'till the Election...and Euro parity between now and then. Gold, under this scenario, will meander down to 320...Dow 10K and all will be just peachy...BUT! ...at ANY moment, it could blow up in their faces....DON'T WAIT to secure your Bullion Immunity Shot.

TownCrier

(06/27/2003; 13:58:10 MDT - Msg ID: 105147)

Yen overnight rates hit record negative low

http://biz.yahoo.com/rf/030627/markets_japan_callrate_1.htmlHEADLINE: Japan overnight call rate weighted avg at -0.004%

TOKYO, June 27 (Reuters) - The weighted average of Japan's key overnight unsecured call rate fell to a record low of minus 0.004 percent on Friday, the Bank of Japan said.

Negative rates have been common over the last several months in Japan's money market, where a vast majority of market players want to, or need to, lend cash and few need to borrow.

Negative interest rates have emerged as banks lend funds at negative interest rates rather than keeping money at the BOJ.

These banks do not lose money and can afford to lend at a minus rate because they have access to funds carrying even bigger minus rates in the euroyen market using currency swaps.

The BOJ's "quantitative easing" policy has made some foreign banks uneasy about leaving too much money in their BOJ account, fearing the central bank's policies could damage its balance sheet.

The Bank of Japan has been flooding the market with a huge amount of liquidity -- about 10 times more than it needs to operate normally -- as part of its quantitative easing policy.

----(see url for article)------

How long will the Japanese people, collectively with massive paper savings, continue to have enough confidence in the yen's future value to prevent a larger rush to gold?

Call Centennial today and beat the rush.

R.

TownCrier

(06/27/2003; 14:35:33 MDT - Msg ID: 105148)

Gold, Fed rate cuts, and negative real interest rates for the dollar

http://www.usagold.com/gildedopinion/Congdon.htmlA few Reuters excerpts:

HEADLINE: COMEX gold steadies before weekend, quarter end

NEW YORK, June 27 (Reuters) - COMEX gold recovered Friday from a new 7-week low and disappointment over Wednesday's smaller-than-hoped-for U.S. interest rate cut, with options-linked buying and quarter-end squaring helping to steady prices.

The gold-currency relationship was not as tight as it has been lately, with bullion starting higher even before the euro tried to rally back from its own 6-week low to the dollar.

Gold has benefited from the Fed's 13 easings since 2001 and the fall in nominal U.S. interest rates to 45 year lows this week, which have brought negative real rates and eroded the value of the dollar.

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

Set against this modern context, in our latest addition to the USAGOLD Gilded Opinion, Tim Congdon wrote nine months ago the following assessment on the topic of returns and negative real rates as part of the overall reserve currency equation and international decision-making process.

"...this study has argued that dollar has to fall heavily against other leading currencies, with its exchange rate down by perhaps between a quarter and a half, to facilitate a resource shift of 4% - 5% of GDP into the USA's balance of payments. On the one hand, the dollar seems irreplaceable; on the other hand, it looks thoroughly unattractive. How is the conundrum to be resolved? And is this where gold can make a comeback?

"Much will depend on the return on dollar assets. It is worth emphasising that the dollar may be losing value relative to, say, the yen, but dollar bonds could still give a better overall return than their yen-denominated alternatives because they have a higher yield. If the yield on dollar assets rises to persuade international money managers to keep them, dollar assets will remain worthwhile investments even in a weak-dollar environment. Gold has the serious disadvantage that, by itself, it offers no yield. It is true that an income return can be secured nowadays by gold loans in the derivatives market, but the return is modest compared with that available in dollar bonds. Gold could overcome this drawback only if the real return on dollar paper assets were to be hit by rapid inflation. If inflation were to exceed the interest rates on dollar deposits and bonds (as it did in the 1970s), the negative real return on dollar assets would cause wealth-holders around the world -- including governments and central banks -- to reconsider the investment merits of gold. If the gold price were rising in line with or faster than the general price level, the return on gold would be above that on dollar paper assets. Gold would again be a more attractive reserve asset."

"...it must be true that a sudden collapse in the dollar's external value is likely to feed back to the USA's domestic inflation rate. As Preeg has warned in The Trade Deficit, the Dollar and the US National Interest, the most serious threat from the payments deficits is "the familiar syndrome of financial markets tending to overshoot equilibrium levels when reacting to perceived imbalances," with the result being "an excessively large decline in the dollar". Although policy-makers around the world accept that exchange rates are set by market forces and are understandably reluctant to meddle with currency fluctuations, they need to be alert to the dangers of continued large American payments deficits. They cannot avoid the message that such deficits will have to be countered -- sooner or later -- by a fall in the dollar; they also cannot deny that, if the dollar's fall is too large and compressed into too short a time-scale, it will raise American inflation and shatter the confidence in paper assets built up in the 1980s and 1990s."

Visit the URL given above to access the Congdon analysis.

R.

Belgian

(06/27/2003; 15:10:34 MDT - Msg ID: 105149)

@ Silvercollector

You believe in the "status quo" and strongly doubt that a massive revaluation of POG (into the thousands $-�) will correct, drastically, that status quo !
I do think that we do approach Big changes that will look different than what we have known up until now. There is NOT only ONE reason, but thousands of reasons, why this change will happen ! We are constantly summing up these reasons, overhere. Extremes do stop the small cycles that you mention, and put an end to a BIG Grand cycle. More precisely, and end to the present world's " $-reserve-currency".

The dollar is "your" currency but it is the world's "reserve" currency ! Call it our "second" currency.
The currency in wich we are supposed to "capitalize" (Yep, Gresham). The "real" meaning of dollar-standard" doesn't exist anymore ! You and many other people, with you, seem to think that this is simply impossible, and therefore Amen.

On the subject of "different" price-inflations, one can fill another library. An enormous confusing subject, not in the least because of hysterical interventionist manipulation
of these price-inflations as the consequence of permanent currency depreciation. The dollar(reserve) wants to remain the "standard" and will keep trying to remain so for ever.
With any means (falsifications-coercion) and at any cost !
Absolutely normal for an ambitious America, but increasingly less normal for a growing part of non-Americans ! And it is here that you seem to have your major doubts. It keeps me argumenting...friendly smile !

One of the latest, going to extremes "extremes", that struck me was...Servicing $-Debt, takes 15% out of GDP ! 1,7 Trillion $ per year to serve the Debtberg. More than 15% out of the US GDP of (+/-) 10 Trillion $. If we should compare GDP with revenue ...many businesses would sign for a profit range of 15% on their revenue. May I call this debtberg an "extreme" situation that the dollar...dollar-reserve...dollar-standard is carrying !?
Do you think that this will go away with another cyclette (little cycle) ? No Sir, it will get worse, up until it cracks.

Note that China is increasing its CB reserve-level ! No details of course. What does this say about the ($) currency in wich the chinese are making their fortunes ?
The liberalization of Gold in China has as main reason that they know very well how important fluctuating currency exchange rates are for world trad dominance ! They play this currency game-war for as long as it works and produces enormous profits for them. The 1,2 Billion chinese are a very ambitious group of folks with high aspirations on world dominance-independance. And they are not the only ones who prepare-anticipate the dollar's demise from its reserve function and standard status.

This is the main idea behind Gold's future im-studentical-o.

A big majority around the globe never attached much "value" to their local currency and up until now, capitalized on/with their second currency, the US$. The chinese clearly signaled they are going to prefer Gold above the dollar, not as their second currency but as consolidation of their individual/state, wealth ! They have many reason for making this choice. They suspect that the dollar is not credible anymore and will collapse as the last standing man, standing no more. Imploding under its own accumulated DEBT !
Debt, created for the sole purpose of surviving as reserve currency for as long as possible. And up until now, the globe agreed, fulhearty with this principle.

That is why we can't point to one particular "event" (or timing) that will cause the dollar's demise.

But slowly and surely, less and less people, are "using" the dollar ! The dollar's master wants to counteract-neutralize this with its different policies of "dollarization" (cfr. Iraq). Flood the globe with green paper, so THEY * HAVE * TO USE IT !!!

Amen.

Dollar Bill

(06/27/2003; 15:38:53 MDT - Msg ID: 105150)

'$_$'

http://jessel.100megsfree3.com/RepoActionAnalysis.jpgLink is to a chart of Fed Repo action

TownCrier

(06/27/2003; 16:17:35 MDT - Msg ID: 105151)

Federal Reserve intervenes today, adds $8 billion

Today's open market operation took the form of five-day repurchase agreements, 60% of which was collateralized by mortgage-backed securities accepted at a rate of 1.140%, significantly above Treasury collateral accepted at 1.049 which backed 20% of the operation.

R.

CoBra(too)

(06/27/2003; 18:28:06 MDT - Msg ID: 105152)

Gangreenie ...

Belgian's quote:
"Flood the globe with green paper, so THEY * HAVE * TO USE IT !!!"

I would put it into a slightly different context. Flood the world until there's no way to get rid of it! ... and that may be why the rest of the world is still mesmerized - as the rabbit in front of a coiled CoBra - to escape the toxic, or risk to its organic (systemic) collapse!

Tourniquets may help for a short while, though in the end, if you don't get the real antidote - all sysgems will lock up.

The only antidote to the berserk use of the FED's printing press is real money - GOLD!

After - party - thoughts ... cb2

steady

(06/27/2003; 19:48:25 MDT - Msg ID: 105153)

planetary gold

Nasa to search for gold on uranus!

glennh10

(06/27/2003; 21:15:29 MDT - Msg ID: 105154)

For those of us who "opt out" of the paper system

There were some interesting discussions yesterday about how TPTB might take a dim view of those holding gold when the paper system finally cracks and lets go. No doubt, we won't be loved for taking steps in advance to protect ourselves, to survive and perhaps prevail outside the almighty "system". Thinking people they don't need, or appreciate.
For those posters who might be old enough to remember the coin shortage of the 1960's (or have heard about it), here's a related story. The mint started clad coin production in July 1965. Although a serious coin shortage existed, the gov't asked the commercial banks to separate the silver coins they received from commerce, and return them to the Fed, and exchange them for the new clad coins from the Fed. While this was going on, they blamed the cause of the coin shortage on collectors, who, they claimed, were hoarding silver coins! I was a collector, and I was in also contact with other collectors. At that time, I knew of none who were in possession of any substantial quantity of silver coins (other than date and mintmark specimens). There's an interesting book (out of print) about clandestine silver coin melts that took place during the late 1960's, "The Big Silver Melt", by Henry A. Merton, 1983. It reads like a work of fiction. It also has tables of coins (dimes, quarters, halves) by date and mint mark,estimating the maximum remaining.

Anyway, I would bet a (very small) gold piece, that when the time comes, we'll be blamed for either (1) causing the "problem", or (2) frustrating the "recovery". One's preparation includes (1) gathering some gold (or silver) insurance, and (2) be ready to be (unjustly) blamed or accused. It will be fun and interesting, to say the least. Cheers.

silvercollector

(06/27/2003; 21:55:15 MDT - Msg ID: 105155)

Belgium

I read your post and to be completely honest I can't get past the image of FOA declaring why gold SHOULD be worth much, much more back in 1997/1998. Where is he now?

Granted gold is worth a little more than in 1997 but where is that 4 digit stuff promised 5 years ago?

You don't need to tell me what I believe, I will tell you first hand. I am Joe Six-Pack, the real McCoy. I am a brazen John Doe, a little smart for my britches, a couple dollars to blow because I have worked and saved diligently. I want my couple dollars to earn me a million, I am not an ego-maniac, I am proud and I have seen the bullsnot that's been going on in the courts and newspapers for the last few years. I work in the I.T. world so don't attempt to snow me with techno-babble, I've been there, got the T-shirt. I did the Y2K panic, I fixed the servers and the periherals, don't tell me the economy is a little slow. I had a broker for a while until I fired him so I know the drill.

I measure time the same way Cavan Man measures boxes so I believe what's in front of my eyes. We can't confirm how much silver is coming out of China so why do we need to assume how much gold is going in? We have no numbers on China so why do we pretend to know, we state it's numbers when it's to our advantage? I've heard the new gold exchange is a double-edged sword, apparently there's an abundance of new money waiting to bring new supply to market. No one dares to mention the vast supply coming out of China, 'free' enterprise is a two-way street , yes?

So since I'm John Doe, JP6 Pac, let's play a game this week-end. For sport shall we. When John Doe decides to buy gold this thing will take off, this tidbit has been discussed and agreed numerous times.

Let's pretend that I am representative of thousands and thousands of pre-born gold bugs and perhaps dozens and dozens of lurkers on this board.

Why do I, John Doe need to buy gold and what is the most obvious, compelling reason?

Thanks.

Sundeck

(06/27/2003; 22:15:04 MDT - Msg ID: 105156)

Malaysia Advocating Switch To Euro

http://www.khilafah.com/home/category.php?DocumentID=7651&TagID=2Snips:

"...
Malaysia, whose currency the ringgit has been pegged to the U.S. dollar since 1998, has become an unlikely advocate for the Euro.

Of late, the oil producing Malaysia has been advocating a review of international oil prices, currently denominated in dollars, to protect oil producers from the uncertainties of the currency market.

And Prime Minister Mahathir Mohamed has also been urging the private sector to use the Euro in their export trade believing the dollar was likely to depreciate further. Malaysia's largest trading company Petronas is estimated to have already lost about $159 million in profit because of the depreciating dollar, and Mahathir indicated last month the country was "earning 25 percent less" in revenue as a result of the weakening dollar.

The Malaysian statesman has never forgiven currency traders for bringing the country down to its knees in 1997-1998. During the Asian financial crisis, speculators send the ringgit from 2.5 against the dollar to 4.8, while the Kuala Lumpur Composite Index plunged from over 1,000 points to less than 300 points. Between the devaluation and the practical collapse of the Kuala Lumpur Stock Market, some $200 billion in market capitalization was lost.

...

All this emphasis on the euro is obviously music to the ears of the Europeans and the European Commission has welcomed suggestion for the private sector to use the euro in export trade. The EC's Ambassador to Malaysia Thierry Rommel told the local press it would be right to adopt the euro now due to the excessive depreciation of the U.S. dollar.

"With the ringgit pegged to the US dollar, Malaysia is 100 percent vulnerable to the fluctuations of the dollar and the ringgit is completely in the hands of the U.S. dollar," the ambassador said, suggesting a diversification into a basket of other international currencies was the best alternative."

Sundeck: Malaysia is only a small player on the world energy stage and Mahathir is leaving soon, so it is probably OK for him to be a strident and overt supporter of a switch to Euros. However, the real question is: "How much coordinated support is building for a change to Euro-denominated oil transactions?"

The great majority of oil reserves resides in Saudi Arabia, Iraq, UAE, Kuwait and Iran. Britain, the US and Australia - Bush's pet ~mouse:> - now have a massive military presence centrally in this region. Given the looming world energy crisis, I suspect they will not be easily dislodged. Other oil producing countries will have to weigh-up very carefully whether, pragmatically, it is worth their whiles rocking the oil boat in the sea of US dollars.

Must be some interesting shuttle diplomacy going on around the world at the moment...

:-)

spotlight

(06/27/2003; 22:16:09 MDT - Msg ID: 105157)

Convertble bonds

Gold mines issues of convertible bonds.
Anyone:
I would appreciate recommendations of a convertible bond in a
good producing gold ming company.

Black Blade

(06/27/2003; 22:43:05 MDT - Msg ID: 105158)

Market Wrap Up � Hartman

http://www.financialsense.com/Market/wrapup.htm
Snippit:

Since we usually contrast paper versus things, I thought it might be constructive to look at just the "things" that are being affected by a dollar that began losing value back in February 2002. By looking at the data table, you can see that the bull market in commodities began roughly in the second half of 2001 and the first half of 2002. During the same exact time frame, the dollar topped out and has been in decline ever since. These rising commodity prices will eventually result in some big inflation of consumer goods. Just ask yourselves if these are all going up in price, or does it just take more money to buy the same "stuff" because the money is not worth as much.

With more time it would have been interesting to see the commodity price increases on an annualized basis since the duration of each commodities bull market varies. For now, we can at least see the enormous increases in energy costs. Just three and a half years ago oil was under $11 per barrel, and now hovers around $30. High energy prices are going to make it difficult to keep costs down and grow the economy. Also note how the price of silver lags the other commodities by a bunch; $4.50 has been holding nicely, so it's time to do some catching-up. Once it starts, it will move very quickly.

Actually, one of the biggest things that hit me this week was the revision in first quarter GDP. I haven't heard much commentary on it, but the revision was HUGE, as the number was changed from 1.9% growth to only 1.4%. As it stands, economists are projecting growth of 3.3% for the third quarter and 3.5% for the fourth quarter. How can we possibly get there? They are revising first quarter way down, and saying the growth rate will more than double in the second half. I think they're stretching things a bit, unless the Fed has plans for really crankin�-up the money pump.

Black Blade: My sentiments exactly! I am sure everyone here already knows my take on energy and precious metals by now. Of course the cost of energy will make or break or break the economy as these costs drop straight to the corporate bottom line and deprive consumers of discretionary income for nonessential items (and sometime essential items too). With the so called "economic recovery" hinging on such razor thin growth numbers (if you really believe them in the first place), a relatively small rise in energy costs will leave the economy flat on its back. That is why there has been so much urgency in Washington DC lately with an emergency meeting to strategize over how to solve the looming NatGas crisis, a push to pass the President's "energy policy", the Federal Reserve chairman discussing natural gas shortages ahead of monetary policy during the most recent "Humphrey-Hawkins" testimony before Congress, deepening concern over the lack of oil production in recently conquered Iraq, etc. Even so, Wall Street has not really given much notice while crude oil, distillates, and natural gas hover at much higher prices at a time of the year when those prices are usually the lowest.

Then there is that last paragraph posted above from Hartman's Market Wrap. I too was amazed that Wall Street and the financial media just blew it off as Hartman is correct when he says that the GDP "�.revision was HUGE". Without at least 5% GDP growth (to offset the booming surge in current account and trade deficits) the economy really can't grow. Certainly the economy can't even keep pace if GDP is projected to grow at such a pathetic rate. Somehow the US dollar has remained strong against other major currencies � but wait! How can that be?

Simply put the dollar isn't strong but rather the other currencies are just that much weaker than the weak dollar. The "currency war" should be a major concern for Wall Street as well, but here again the primates who run the street are asleep at the wheel and merrily proclaim "all is well" and even predict that grossly overvalued stocks are "cheap" and will rise to new highs in the "second half". Then too they talk of growing productivity � growth by cutting costs from firing workers and therefore fewer workers carrying the load � thus the remaining workers are more productive. The Federal Reserve even mentioned how GDP growth of greater than 4% is needed to create jobs (actually a higher rate of growth than that is needed but the miracle of statistical massage can make it appear to be much less).

Now that the Fed is for all practical purposes has run out of ammunition as far as further rate cuts are concerned, what is left in the arsenal? That leaves only massive dollar creation, especially with the "bias statement" following the latest interest rate cut clearly indicating that the Fed is more concerned about deflation than inflation. The plan is to "create inflation" presumably by creating an abundance of dollars. Then we hear that the Fed can use "nonconventional means" as a weapon to stimulate the economy � now we are talking of venturing into uncharted waters � talk about economic uncertainty! OK, so I have ranted longer than most can bear, but the long and short of it is that the price or value of commodities (or as Puplava says � "things") should rise and the value of precious metals should explode wildly upward no matter what the Fed and Treasury do. The very thought of George Bush and John Snow reaffirming their administration's commitment to the "strong dollar policy" is utterly laughable. Such a concept defies all logic and reason. Invest very selectively and position yourselves for a Hell of a lot of economic upheaval. As always, get out of debt and stay out of debt, stash some emergency cash for several month's expenses, accumulate Gold and Silver portfolio insurance, and start a nonperishable food and basic necessities storage program.

Black Blade

(06/27/2003; 23:01:58 MDT - Msg ID: 105159)

The Bubble That Broke The World � Fekete

http://www.financialsense.com/editorials/fekete/2003/0627.htm
Snippit:

Bond speculators are sitting on a huge pyramid of paper profits they have accumulated as short term rates of interest rates were pushed down from over 20 percent in 1980 to a little over 1 percent in 2003. A measure of the pyramid is the Derivative Bubble, now $140 trillion strong, consisting mostly of bets that interest rates will fall further. We are witnessing the biggest bull market ever, in anything, anywhere, at any time in all history. There has never been a bubble of that size and ferocity before. Tulipomania, the South Sea Bubble, the Mississippi Bubble, the bubble of the Roaring Twenties all pale in comparison.

Lately, speculators have been itching to cash in on their huge winnings, especially in view of the fact that foreign private and official holders appear poised to reduce their holdings of U.S. Treasury securities. Greenspan knows that a bubble so big as this cannot be safely deflated. It could trigger hyperinflation. So he has recourse to a desperate gamble: he is bribing the bond speculators. As the barker at the fair, he is crying to them: "Hang on! The bond bull is far from getting tired! Don't get out, the fun has just started! Your next bet is on the house! Profits are free for the taking! No risks involved!"

Surely this is an unprecedented sight: the central banker bribing the speculators with promises of untold riches free for the taking. Nothing like this has ever happened in history before, and probably never will. The central banker tips you off to place your bet that the bond price will go up, and, bingo! You have won the jackpot.

It sounds crazy but is true nevertheless. All this would be very comical if there wasn't a sad part to it. The Greenspan announcement was designed to prevent prices from weakening and the stock market from collapsing. Yet its effect will in all likelihood be highly deflationary. Falling interest rates will ratchet down prices, and falling prices will ratchet down interest rates even more. As prices fall, the Fed raises the ante and buys more bonds, giving away more free gifts to the speculators. Both prices and interest rates fall into the abyss, and the economy is plunged into deep depression. The capital structure of productive enterprise is fatally weakened. Firms fall like flies in autumn. There is great pressure to cut debt and inventory. Cutting debt lowers interest rates, and cutting inventory lowers prices more. Those firms that can't do it fast enough are mercilessly forced into liquidation. There is growing unemployment, and falling demand will kick prices down further. Even some of the healthiest firms succumb as they could not collect receivables from their fallen brethren.

Black Blade: An interesting and thought provoking read for sure. I don't think many have really considered the possible outcomes of the Federal Reserve wandering about in "uncharted waters" should they employ "nonconventional means" to stimulate the economy. The more I think on the bizarre events of late and how desperately central bankers are intervening in everything from stock markets, bond markets, currency markets, and consider using untried methods to stimulate their economies, the more "surreal" this seems. But desperate times call for desperate measures.

Black Blade

(06/27/2003; 23:35:08 MDT - Msg ID: 105160)

Finally, the heat is on!

http://money.cnn.com/2003/06/26/news/companies/heatwave/index.htm
Analysts say warmer weather likely to spur retail sales, but they're keeping an eye on energy costs.

Snippit:

Energy costs going up

Michael Niemira, senior economist with Bank of Tokyo-Mitsubishi, said he's keeping an eye on rising energy costs and their implications for retailers and consumers as the summer gets underway. "The cool start to the season has been a problem for retail sales," Niemira said, "but escalating energy prices are something that both consumers and retailers have to incur. "

According to Phil Flynn, energy analyst with Alaron.com, natural gas, gasoline and crude oil supplies domestically are trailing last year's levels, while prices are creeping up. "So far the cooler weather hasn't put more pressure on the supply, but a hot scorching summer could definitely push prices higher," Flynn said. "When energy costs go up, the bills go up for consumers and it cuts into their discretionary spending. Consumers spend less on things like clothes and shoes. If gas prices escalate, that has the same effect. So retailers suffer as well," Flynn added.

Howard Davidowitz, chairman of New York-based national retail consulting firm Davidowitz & Associates Inc., has his concerns as well. "The energy cost in the equation is grossly underestimated," Davidowitz said. "The consumer is already stretched to the limit and doesn't have an extra $1,000 to pay if the home bill goes up." But he's cautious. "The fear is that energy costs could overwhelm the tax cut," he said. "If that happens, the long-term forecast for retailers doesn't look good."

Black Blade: Temperatures have been rather mild so far but the recent heat wave on the east coast may be a preview of what may come. The last time I checked the NWS and NOAA were both forecasting warmer than normal summer temperatures for July and August. Natural Gas storage injections should taper off soon as pipeline stripping is only a temporary fix and warmer summer temperatures will increase demand as "air conditioner season" kicks off. Also, nuclear generating capacity is much lower this summer as many plants are down for maintenance and repair due to boric acid corrosion and cracks in containment vessels discovered at some facilities. Another factor to consider is that Canada may not be much help this year as their storage levels are very low as well and increased drilling has not given much increased production this season. Mexico is likely to compete for additional US NatGas supply as that country is nearing an energy crisis of its own. We may get a clearer picture on the energy front over the next couple of months. We may yet be fortunate to have a deepening economic recession to offset demand along with moderating temperatures, but we should not count on it.

Black Blade

(06/27/2003; 23:47:35 MDT - Msg ID: 105161)

Credit card delinquencies stay at record high

http://www.usatoday.com/money/economy/2003-06-26-credit-delinquencies_x.htm
Snippit:

WASHINGTON (Reuters) � Rising job losses and the uncertain economy kept credit card delinquencies unchanged at a record high level in the first quarter of 2003, the American Bankers Association said Thursday. Past-due credit card accounts made up 4.07% of all accounts, the same level as the last quarter of 2002, the ABA said in a statement. That rate remains the highest since the trade association began compiling consumer loan data in 1990. "New jobs need to be created and workers reemployed before there will be any significant improvement in delinquency rates," said James Chessen, the Chief Economist for the bankers' association.

Home equity loan delinquencies jumped to 2.02% of loans from 1.64% in the previous quarter, according to the ABA.

Auto loan delinquencies climbed to 2.41% of loans from 2.34%, the trade group reported.

Black Blade: Looking grim.

Ag Mountain

(06/28/2003; 00:46:27 MDT - Msg ID: 105162)

Blind silvercollector

"We can't confirm how much silver is coming out of China so why do we need to assume how much gold is going in? We have no numbers on China so why do we pretend to know?"

No need to pretend about 15 tonnes every two weeks when it's been in the news.

Respectfully signed,

A. Joe-er Joe 6-pac than you'll ever Be

Belgian

(06/28/2003; 01:56:44 MDT - Msg ID: 105163)

@ Silvercollector

Most obvious, compelling reason to buy Gold....
To protect your and your children's purchasing-power !
TPTB wanted/want you, to protect yourself, with anything but Gold. Multiply your "paper" . So you contribute to the economy and your future purchasing capacity will remain a constant. Very nice (old) theory, wich I stopped buying.

Alternatives to paper are other tangibles than Gold. Real estate, land, antiques,...silver...etc !? Much too complicated stuff for me and I'll stick to the straithforward simplicity of Physical GOLD.

Yes, FOA has been flirting (was tempted) to time POG's gigantic revaluation. Does this mean that his entire theory (vision) is worthless ? Don't think so.

That's why I'm always looking to enhance my understanding of Gold and spend the night (one night) with Tim Congdon (USAGold-archives-Gilded Opinion) as to find out what might cause the delay for Gold's revaluation.

In other words...How is the world's attitude towards "our" dollar-reserve, evolving ? Impossible to predict exact year/date/hour of the dollar-reserve's demise. I'm only believing that the "trend" towards that demise is incontournable (inevitable).

BTW, 1 Billion Indians seem to think into that same direction. They are diversifying their dollar-holdings with euro as to do more trade in euro.

Nice weekend for you, Silvercollector.

Belgian

(06/28/2003; 02:40:50 MDT - Msg ID: 105164)

glennh10 #105113....Blaming (demonizing-?) Gold-hoarders !?

Isn't this already happening in some very subtle ways ?
How frustrating, for TPTB, must it be to see that Gold is being accumulated and threathens the dollar's authority, whilst not being able to confiscate Gold (forbid Gold-Hoarding), because of the Free Market myths !?

The financial media have the enormous task to "canalize" all attempts for further growing desire to accumulate more of the same, scarcely available, PHYSICAL Gold !

We simply seem to completely ignore that when a willing anti-dollarreserve-coalalition wanted to erase the reserve-function...that coalition simply has to buy Physical Gold with all excesses of dollar-reserves. But such a "coup" will never happen !!! For pragmatic reasons !!! There must be a 100% waterproof alternative for the dollar-reserve.

And the euro is far from that 100% !!! But the (palace)intriges in the currency palace go on and King Dollar will constantly remain to be challenged.

The E*CENTRAL*B (ECB)'s marking to market of its goldreserves was firstly mis-interpreted by its 12 *National* banks. These National banks thought that they were offered a windfall in Gold reserve-revaluations that could be used for spending ! They had it wrong. The E-Central-B, marking to market was NOT intended for selling off goldreserves. This is another aspect (important one) in the re-evolutions in the currency-palaces of different Central banks and National banks !

Main point is TO KEEP THE PUBLIC OUT OF THIS !!! That's why we enjoy the Deminor-NBB, fight so much, here in lilliputan Belgoland ! It is about what happened (will happen) with the Belgian National goldreserves. What did you do with "our" Gold !!!???

It took me a very long time to understand Gold's utmost Importance ! Now I think to understand "WHY" the general public "must" *** remain *** ignorant about Gold up to a well defined level. Organized deception and I understand, WHY !

The world "MUST" be at a very critical juncture, measured by the efforts that are being made to "cover" Gold !
Are you also that suspicious ?

Topaz

(06/28/2003; 03:23:32 MDT - Msg ID: 105165)

Dollar, Bonds and Gold...a Technical perspective.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID346627I had intended building a similar set of Charts to support what I've been positing these last several Weeks but Lo and behold!...this good Chap has done it for me...needless to say his TA confirms my Empirical A...eh?

spotlight

(06/28/2003; 04:12:29 MDT - Msg ID: 105166)

Convertble bonds issued by gold mining companies

spotlight (6/27/03; 22:16:09MT - usagold.com msg#: 105157)

Anyone:
I would appreciate recommendations of a convertible bond in a
good producing gold ming company.

silvercollector

(06/28/2003; 04:57:11 MDT - Msg ID: 105167)

Belgium

"To protect your and your children's purchasing-power !"

I'm not sure about that dear friend. That's the reason why investment demand has been non-existant, no? Don't forget, from the eyes of J6P gold has been falling for 20+ years. He heard of his grandfather hoarding the stuff and laughed at the old beggar.

How does one convince the investment crowd, the pre-retiring baby-boomer generation, that protection of purchasing power requires the purchase of gold? How does one convince them that the dollar will die?

I will tell you why I began to buy gold in 1998 and silver in 1999. It became clear to me that the "all-in costs of production" (Franco-Nevada) were more than the spot price. Gold at $250 and silver at $4.00 was impossible for long. I have accumulated impressive amounts of physical of which all was bought sub-$300 and sub-$4.75.

Now I am unclear as to my next move.

Have a golden week-end yourself.

Topaz

(06/28/2003; 05:03:45 MDT - Msg ID: 105168)

Sir Belgian.

You will be pleased to know Sire that I have seen the light! Yes I acquired some EURO's on Friday...the folding kind...for an upcoming visit. The first thing I did of course was WASH them...to get rid of all that Coke!! and I suppose you could say it's now Laundered!

silvercollector

(06/28/2003; 05:19:19 MDT - Msg ID: 105169)

Ag Mountain

Every 2 weeks for how long? In the news, RIGGHHHTTTTTT!

Let's draw up a little analogy for amusement. The U.S. has not audited it's gold for some 25 years, apparently mysterious entities are selling gold in and out (mostly out) to contain the price of gold for a long, long period of time and a multitude of speculation exists whether the 'Cabal' (which includes to a large degree the FED/Treasury) is short 5,000 or 7,000 or 10,000 or 15,000 or 16,000 tonnes of gold.

So we have the entire 'western' hemisphere, the pro-fiat crowd if you will, lying and cheating to the Nth degree on their gold purchases/sales to undermine knowledge and confidence in the gold world and apparently China, perhaps the most secretive country in the world is announcing "in the news" that they are buying 15 tonnes every 2 weeks.

We can't get the 'free world' U.S. central bank to fess up about their gold holdings/purchases/sales/shorting/manipulation/inventory etc. but yet a communist/secretive central bank is announcing "in the news" their intentions/obligations/reactions/ etc. to the planet.

The chances of China accurately reporting its gold habits is the same as me flapping my wings and flying to the moon.

I'm not saying that China is not buying gold, how would I know, and for the same reasoning neither would you.

Take care.

Boilermaker

(06/28/2003; 05:31:15 MDT - Msg ID: 105170)

Convertble bonds issued by gold mining companies

spotlight (6/28/03; 04:12:29MT - usagold.com msg#: 105166)
"Anyone:
I would appreciate recommendations of a convertible bond in a
good producing gold ming company."

Since no one has answered your request here is my advice;
This forum does not get into specific mining stock appraisal or recommendations. This is a courtesy to our gracious host who is in the business of selling the real (hard) stuff. If you want to learn about the case for gold this is the place to be. If you want specific advice on various forms of paper gold investments you should visit another forum.
Cheers and good luck
Boilermaker

Topaz

(06/28/2003; 06:22:46 MDT - Msg ID: 105171)

The Strong Dollar Policy.

Due to the inability of Messers Bush and Snow to define what a SDP is, I thought it timely to humbly offer the following:
In circa 1991 they decided to implement an Index whereby a trade weighted basket of currencies could be compared to the US$ (the Dollar Index) The currently agreed to weightings are as follows:

Euro 57.6

Japan/yen 13.6

UK/pound 11.9

Canada/dollar 9.1

Sweden/krona 4.2

Switzerland/franc 3.6

When it began it's ceaseless meanderings the Dollar was at 100... and currently we find it @ 95.
So, technically, a "strong" Dollar would effectively be "above" 100, Right?
Now, the aforementioned Gents, who incidently are 2 of the 3 most powerful men on the planet, have advocated a "strong" Dollar policy. With an election in the offing, I for one would be VERY loath to disagree with them!

Belgian

(06/28/2003; 06:46:41 MDT - Msg ID: 105172)

An interesting thought from Mogambo guru.....

The perfect organized financial brotherhood has the means (necessary certitudes-guarantees) to speculate, freely, with masses of confetti going *with* the flow of 13 >>> 14 (?) rate cuts and making huge profits on bonds appreciating in prices. Most probably they do this with lended confetti and can therefore turn that confetti-berg in the opposite direction (rising IRs), EXACTLY AT THE RIGHT MOMENT of the general stop and reverse in the IR declines (bond appreciation) !!! Thanks Alan,...eh Sir Greenspan ! I find this obscene. All those small, little savers, who have to "live" from the interest income of their savings.
These people are paying for the organized financial crimes that are taking place.

Not millions but billions of small savers don't know where to run with the confetti-fruit of a lifetime. Indeed, Silvercollector, these people continue to invest (?) in IR bearing financial (non)"products" ! Nobody can convince them to give some attention to the Gold-Alternative.

These masses of these good folks will never come up with the idea that Gold's future might be a very promessing one.
This, because of that main reason of more than 20 years decline in POG, that you mentionned.

The financial brotherhood, informed by the FED (!!!)(yes !!!) is so terrebly complacent about its guarantees, that they can easqely go to extremes on so many subjects !
The only unknown is, how those masses of ordinary folks, around the globe, will react to a rising trend in IRs + price(hyper)inflation !? The coming financial picture will be the complete opposite of the one we have (are) been living for the past 2 decades (since 1980) !!! A very ugly/ugliest picture it will be !

And guess what...TPTB will MOST LIKELY "promote" Gold buying, by then !!!-??? Not for the purpose of giving good/wise advise to the folks, but simply out of pure self-interest. Yes, I do believe there will come a very appropiate moment where people are advised/encouraged to take up Physical Gold into Possession. But NOT AT THESE PRESENT OBSCENE PRICES, of course !!! But at many multiples of the present 345$/298� !

The same is done now with other types of advises : Consume !...Buy price-appreciating houses !...Stockmarkets are constantly bottoming !...Free Markets judge the dollar as, still going strong !...etc...
Yep, free, gratis advise, guidance and encouragement !!!

Since the SM-crash of 1987, the dollar-index, is reaching its bottom-zone of 60-90 range for the SIXTH time !!!
How will the world react if and when the dollar pierces that 15 year bottom-zone ??? I stick to my ABC pattern for the dollar-index from its ATH in 1985 ! The dollar will make lower lows than the previous ones in its C-leg down !
My bet is on 2$ = 1� within the coming decade ! This is going to give GOLD a complete other shining to all those who forgot about the Wealth Asset of ages ! Many will scramble into Gold, unfortunately at much higher multiples of today's price-ranges.

If IRs stay as low for much longer, more and more people will put their confetti into very low yielding bonds out of desperation and lack of alternative choices. They will completely miss the Golden decade. The smarter insiders will, AGAIN, reap all the profits, once the sheeple take their losess in bonds and rush to Gold.

Yep, there is definitely a *financial brotherhood* out there !!! Politicians politics in very centralized power systems, always look firstly after their personal huuuuge profits ! The real world as it is !

And now, back to some divine gardening.

Cometose

(06/28/2003; 07:14:34 MDT - Msg ID: 105173)

INTERVIEW w/ Kennedy Gammage, Richard Russell , Tim Wood and Peter Eliades

http://www.financialsense.comThis is a web broadcast of great import on things financial from an auspicious group . These are a group of reknowned financial analysts......THere are things of that are timely that you need to hear as well as an interesting section on GOLD....now available at Jim Pupulva's website....

mikal

(06/28/2003; 09:33:48 MDT - Msg ID: 105174)

@Topaz

Why do you insist on prediction after prediction? Authority derived from models will produce indetectable errors. Why don't you just realize that to err is human, but to really foul up requires a computer? If you consult enough experts, you can confirm any opinion and support any position. Remember the number one rule of capital preservation- never let your attorney know how much money you have. And what of the 2004 election! If voting could change anything, it would be outlawed.

CoBra(too)

(06/28/2003; 10:17:51 MDT - Msg ID: 105175)

@Cometose - Touche'!

�lso enjoyed two hours of informative and well presented discussion by these scholarly gentlemen. It also was brilliantly conducted by Jim Puplava. One of his best broadcasts ever. ... cb2

spotlight

(06/28/2003; 14:02:02 MDT - Msg ID: 105176)

Convertible bonds isued by gold mining companies

Boilermaker:
Wrote,
Since no one has answered your request here is my advice;
This forum does not get into specific mining stock appraisal or recommendations. This is a courtesy to our gracious host who is in the business of selling the real (hard) stuff. If you want to learn about the case for gold this is the place to be. If you want specific advice on various forms of paper gold investments you should visit another forum.
Cheers and good luck
Boilermaker
************************************************************
Boilermaker:
I have been in gold and silver since 1968. I wrote an economic column for a financial newsletter stressing gold purchases in the 1970s.
I sold bags of silver for a dealer when silver was $1.42 per Oz. I am now 82 years of age. I have 80% of my life savings in gold. I would like to get out of my depreciating dollar savings. I thought it would be a good idea to both protect my cash and support a worthy gold producer at the same time.
This is my favorite site. I am here because the finest gold minds are here. I am sorry if I offended anyone here.
Thank you for the advice.

TownCrier

(06/28/2003; 14:22:12 MDT - Msg ID: 105177)

Some stats for silvercollector and Ag Mountain

Hello gentlemen. Even in the best of times knowledge is frequently an imperfect thing. And when you try to store it (and later recall it) with an imperfect memory, all sorts of jumbled juxtapositions can happen with your collection of data and events.

I don't know what additional sources you may encountered and have in mind for the facts and figures of Chinese gold inflow, but here is some hard data that I have at hand to help you sort this out or bridge some of the gaps in the rusty synapses.

The new Shanghai Gold Exchange is doing physical volume on the order of nearly 1 tonne per day. Trading activity at the Hong Kong Exchange is closer to an average of 0.75 tonnes per day.

Gold Field Mineral Services estimates net Chinese gold demand per annum at 220 tonnes.

The October 2002 launch of the SGE opened the way for the People's Bank of China to no longer be the sole purchaser of gold production from the domestic mining sector, and also to step away from its role as the sole Chinese importer of international gold.

Back in November 2001 the Chinese Government's State Trade Commission announced plans to boost domestic gold mine production through 2005 by 5% each year. Production in 2000 was reported at 162 tonnes, and by one year later 2001 production weighed in at 182 tonnes (better than 10% improvement) with 190 tonnes projected for 2002.

Prior to all of that, in June 2000 the World Gold Council reported the following on the PBOC's activity as importer in addition to domestic purchaser: "Investec, the South African investment bank, has signed an agreement to provide the People's Bank of China with a consignment stock of approximately one tonne of gold every three weeks. The agreement, which is for an unlimited period of time, will provide for Investec shipping a minimum 15 tonnes of gold to China each year."

Meanwhile, news from the Big Vault in January of this year (2003) had some industry people buzzing as the Chinese central bank reported that during the three month course of the fourth quarter of 2002 its officially claimed gold reserves were increased by 100 tonnes, from 500 tonnes to 600 tonnes.

I hope these refreshments have all been helpful in one way or another.

R.

USAGOLD / Centennial Precious Metals, Inc.

(06/28/2003; 14:42:47 MDT - Msg ID: 105178)

How to protect your wealth through private gold ownership -- a complete guide for $5.95

http://www.usagold.com/cpm/abcs.html

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.

Druid

(06/28/2003; 15:11:05 MDT - Msg ID: 105179)

Belgian (6/28/03; 01:56:44MT - usagold.com msg#: 105163

Belgian,

If I'm not mistaken, I believe "ANOTHER" suggested and I'm paraphrasing that the 90's would be the time to accumulate the physical, 2000 to 2005 would be the time to watch the currency dstruction take place, and after 2005, it would be time to spend some of the wealth on items at bargain rate prices. In my book, events are on schedule.

Trying to explain the concepts of approaching infinity(dollars), scarcity(Gold) and Choice(set of decisions) to the average college graduate much less investor is a major undertaking at best, a near impossibility at worst. I quit doing this because people began turning on me and I realized that most people have difficulty injecting reality into the "American Dream." If it's not on tv it must not be true. Always read the warning label when dosing out the red pill, it's an interesting phenomena watching a human neural network short circuit before your eyes as he or she approaches reality. Gold, not a bad choice.

21mabry

(06/28/2003; 15:22:26 MDT - Msg ID: 105180)

Spotlight

You seem like you have a goodly amount of physical you could be set. Someone posted earlier about society taking a dim view of gold investors when paper markets tank.Its been that way throughout history.In John Laws France those who held bullion were considered criminals,it will be that way again, when goverments cant control someone they brand them outlaw and renegade their psych ops go to work on the public opinion.Call your enemy what you are will be their motto.

Topaz

(06/28/2003; 15:37:23 MDT - Msg ID: 105181)

@mikal

I don't think I'm a cronic predictor mikal, nor do I post stuff just to be contrary. The Forum almost exclusively focuses on a $Gold price explosion via a weakening Dollar and I just don't see it! Where I'm able, I try and present an alternative argument for Physical Gold ownership non-reliant on said Dollar weakness. My position hasn't changed for a couple of Yr's now. If this is offensive to you Sir, I'm sorry...but I'll still keep plugging away and let the future decide the merits thereof.

cheers mikal.

Belgian

(06/28/2003; 16:41:56 MDT - Msg ID: 105182)

Hoi Druid

Most probably, Gold's historical revaluation will happen within this 2000-2010 decade.
I've been reading Henry C K Liu's essay on Japan (Atimes).
Amazing how they are so desperately, deep entangled in their rigid structures.
Euroland, the whole Asian block, the Middle East and the Americas are changing-evolving, very rapidly.

It does indeed, take a lot of study from different view points, to conclude that the turbulences of the past 3 decades are rushing to a kind of Grand finale. One cannot expect that young, hardworking, family folks have time to spend on these kind of studies. Nevertheless, they sometimes come up with good arguments for the status quo opinion. They often demand hard evidence for the Gold theories that we communicate. Thought provoking and it keeps us from becoming too sure about our Gold case.

But facts-evidences are so pluri-interpretable, that one must remain cautious with unflexible conclusions. So, don't blame your colleges/friends for des-interest in the global happenings.

It is only now that I realise how a BBC-World for instance is producing so much blatant daily lies and deceptions (truth distortions). Don't know if this was the case when I was much more naive than today ?

When reading A.Fekete's latest ( at Puplava's), I suddenly understood more clearly WHY such enormous, all embracing, Interventions are *** needed *** and have been taking place, crescendo for already quite some time ! Idem dito for the BoJ's interventions on the Nikkei and Japanese bank sector. These interventions are NOT of a temporary supportive nature but rather a desperate underpinning of cripling systems.

Without free speach on the net, I would never even have suspected anything financialy lifethreathening.

Druid

(06/28/2003; 17:59:14 MDT - Msg ID: 105183)

Belgian (06/28/03; 16:41:56MT - usagold.com msg#: 105182)

http://www.gold-eagle.com/editorials_03/lewis062603.html"It does indeed, take a lot of study from different view points, to conclude that the turbulences of the past 3 decades are rushing to a kind of Grand finale. One cannot expect that young, hardworking, family folks have time to spend on these kind of studies. Nevertheless, they sometimes come up with good arguments for the status quo opinion. They often demand hard evidence for the Gold theories that we communicate. Thought provoking and it keeps us from becoming too sure about our Gold case."

Druid: I think different view points is key to understanding, otherwise you get caught up in your own dogma. You might enjoy the read from Lewis. His ability to integrate "Phaedrus" into the monetary discussion was a true work of literary art. This is one of the best books I have ever read. I highly recommend it.

silvercollector

(06/28/2003; 18:38:48 MDT - Msg ID: 105184)

Thanks for the abundant stats. on the China situation. I remember seeing some of them and to be completely frank I forgot them because they didn't excite me.

For example, daily trading on the SGE is a tonne of physical. Now is this a tonne bought and sold resulting in a 'net zero sum game', on eof thos eshell games resulting in no new offtake?

GFMS estimates 220 tonnes per annum but it is producing 190 (2002 estimate), is 30 net tonnes imported huge?

The PBOC is contractually obligated to accept a minimum of 15 tonnes a year, too bad it wasn't much, much more.

The PBOC increased holdings from 500 to 600 tonnes 4Q02. How disappointing considering the US with some 8400 tonnes and the EU with more than 12,000 tonnes.

Let's see the PBOC commit to 250 tonnes a quarter for the next 5 years!!!!!

Thanks again for the note.

R Powell

(06/28/2003; 18:46:16 MDT - Msg ID: 105185)

Welcome spotlight

In post 105176 you wrote......

"I have been in gold and silver since 1968. I wrote an economic column for a financial newsletter stressing gold purchases in the 1970s."

You also mentioned exchanging some perhaps depreciating dollars for an investment in a solid gold mining company. Even though most here would not agree with me (or at least will not say so), I believe paper money and paper investments will continue to exist even if the world does suffer through some severe currency upheavals. I don't believe we will revert to a moneyless society nor will "all paper burn". This is NOT to say physical gold and silver are not an excellent protection against a depreciating fiat currency. This is to say that imho there have been, are and will continue to be other venues for good investments.

As for what those specific investments might be, I don't pretend to know and will agree that such opinions are discouraged here. Being a paper trader, I'm always acutely aware of forum policy limitations. However, with your years of involvement in both the gold and silver markets, I would dearly love to hear your present thoughts on both, especially silver as silver intrigues me to no end.

The basic puzzle presented by the silver market is why the price of silver stagnates year after year while demand has steadfastly exceeded total supply year after year. Now some claim that the downdraw has left existing supplies at what may soon be a critically low level.
I'm invested in both physical and paper silver. Can you offer any thoughts??
Thanks
Rich

silvercollector

(06/28/2003; 18:46:23 MDT - Msg ID: 105186)

Red Alert! Sinclair offers opinion on the bond market nonsense.

http://www.jsmineset.com/s/Home.asp"April 2003

The Long Bond begins to break the long-standing inverse relationship with the equities market. This relationship was initiated by the flight of capital out of equities and into bonds. As the stock market rose, bonds retreated. As the equities market fell, bonds appreciated. What is it that the establishment investment bank political insiders know is coming that caused this relationship to change?"

R Powell

(06/28/2003; 18:54:16 MDT - Msg ID: 105187)

Belgian

Your words.....

"Without free speach on the net, I would never even have suspected anything financialy lifethreathening."

My thoughts... Amen, brother, amen

The Invisible Hand

(06/28/2003; 19:15:37 MDT - Msg ID: 105188)

Greenspan said last week ...

http://observer.guardian.co.uk/business/story/0,6903,987040,00.htmlSNIP
... that the world's most important central bank was more concerned about inflation than deflation
Since this message coincided with surprise among some financial market analysts and traders that the cut in rates had not been a half percentage point, this interpretation had a certain plausibility.
...
(At the Society of Business Economists' annual conference in London last week Professor Tim) Congdon (see also http://www.usagold.com/gildedopinion/Congdon.html) made the important historical point that whereas the deflation of the Thirties was associated with serious banking failures in the US, at present 'US banks have some bad debts, but their capital position and profits are good'.
He added: 'The fact of the matter is that the brunt of the losses associated with the collapse of the new technology bubble was absorbed by the equity market, not the banks.'

Druid

(06/28/2003; 19:45:35 MDT - Msg ID: 105189)

Doh!

http://www.bis.org/index.htmDruid: An interesting link for interesting perspectives.

Mr Gresham

(06/28/2003; 21:58:04 MDT - Msg ID: 105190)

Sinclair clarifies some of my wonderings about bond market dynamics

http://www.jsmineset.com/s/Home.aspMore from the link Silvercollector provided below:

"The Fed buys all and every bond offered from very short to very long which results in a ballistic upward rate in the creation of money thereby ballistically increasing the amount of money in circulation. The dollar goes to .7200 or lower. Then, as a result of the collapse in the value of the US dollar, the Fed would have to buy every long bond it ever issued because only a mindless economic idiot would want to hold a 30 year US government bond and watch the value of it in terms of their currency simply disappear off the face of the earth. Therefore, this foolishness could be a strategy that as you buy all the bonds offered you cause more bonds to be offered.

"If you wanted to bankrupt the United States in 90 days, that is the way to do it and this is the way the Chairman of the Federal Reserve apparently plans to do it.

"May 25, 2003

"The Fed makes a horrible error, showing its hand to the market public. All the Fed has in its hand is a pair of deuces so Japan raises the bet and calls the Fed. The Fed folds.

"In any bull bond market, if you are perceived to be the holder of all the aces as the Fed was then, you cannot fail to perform - EVER. The Fed bought no bonds to speak of last week and dropped the ball hard and publicly. The minute you show any weakness you are dead. The opposite side of your market -- those who perceive (correctly?) that you don't have the financial ability to continue your long or short play - will simply and without mercy bury you alive."

Cards on the table; read 'em and weep.

21mabry

(06/28/2003; 22:48:17 MDT - Msg ID: 105191)

(No Subject)

An article I read about a 1744 expedition of a British fleet under a commodore Anson sent to raid the Spanish possesions in the new world was somewhat perplexing to me. The mission was a success 1,313,843 pieces of eight were siezed along with 35,682 ounces of virgin silver.The British were joyful and the crowds in London lined the streets to see the 33 wagon loads make its way to the tower of london.The thing that struck me was how much more valuable silver must have been at this time.This expedition was a large expense to the crown and the silver haul to me was large but on a national scale it did not seem like alot just over 1 million ounces.Therefor I assume silvers value was far greater then.21

Goldendome

(06/29/2003; 00:30:50 MDT - Msg ID: 105192)

California public employees faceing reductions to minimum wage level

http://64.29.208.119/creditbubblebulletin.asp
For two years, news has warned of California's growing financial imbalance. Up to this point the Golden State has been able to use a series of gimmicks (including bond sales to capture, now, their tobacco settlement largess) to postpone the day of reckoning. Now as Doug Noland points out in his weekly Credit Bubble Bulletin, time may be running out--the next cuts may be delivered by the cruel sword of the credit markets. [Excerpts]

... with a budget crater of somewhere between $29 billion and $38 billion, state coffers nearly depleted of cash, and lenders increasingly apprehensive, the Golden State is finally approaching The Wall. Last week the state's finance director stated, "California is broke. We are operating as of today completely on borrowed money, and we have no collateral left for additional borrowing capacity."

California now receives the lowest S&P Credit rating of any state, with yields about 40 basis points wider than bonds issued by fiscally challenged New York and Texas. Last week the state sold 30-year bonds at 5.0% (8.4% tax-adjusted yield), about 64 basis points wider than AAA state credits. This spread was up 14 basis points from April, as virtually every other spread narrowed sharply. A Fitch spokesperson was quoted by Bloomberg: "California can't go on forever living on borrowed money. At some point, the market is going to change its mind" about lending.

Republican lawmakers are resolute in their pledge to not allow tax increases. The democrats are equally resolved to avoid the draconian program cuts that would be required to get the state's fiscal house in any semblance of order.

During budget crises in previous years (last year's budget was not signed until Sept. 5) the state has not had to cut off much money, but this year is different. A California Supreme Court ruling in May gives [State Controler] Westly very little flexibility. That decision came in response to Howard Jarvis Taxpayers Assn. lawsuit to force lawmakers to take the budget deadline seriously. The court said the state has no legal authority to make many payments if no spending plan is in place. ***The court also ruled that state workers can be paid no more than federal minimum wage until a budget is passed.***
"If there is no budget after Tuesday, (state Controller) Westly said: California will not make monthly payments beginning in July that total more than $200 million for K-12 schools and $200 million for community colleges. State employees face drastic pay cuts as soon as late August. Vendors will not receive payments for services rendered to the state after July 1. Westly will continue a tradition of withholding pay from elected officials� Westly said he is limited by a recent California Supreme Court ruling that dictates most state workers be paid the federal minimum wage - $5.15 per hour � when the state is running without a budget."

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Gdome: Tax revenues skyrocketed with the "90's tech boom; the state corresponding responded by opening the purse strings allowing spending to increase by nearly 60%. Now the revenue fountain is gone, but the jungle of public spending growth that it nurtured remains and continues to struggle for financial support...Sounds to me like another job for The Greenspan gang. They can ride into Sacramento with Money Guns a-blazin to bring order to the West. After all, if they can ride to the rescue of any foreign country that has debt trouble, why shouldn't they rise to the rescue of the world's seventh largest economy (California)? Can you imagine all public employee wages in California being reduced to $5.15 per hour--the financial fallout of it all? I think that possiblility alone will hasten some political/economic bailout settlement.

The Invisible Hand

(06/29/2003; 02:29:16 MDT - Msg ID: 105193)

The barbarous relic or barbaric relic?

http://www.inq7.net/brk/2003/jun/29/brkpol_2-1.htmJun. 29, 2003
Agence France-Presse
MAYOR IN GOLD MINE FEUD SHOT DEAD
Davao City - A gunman shot and killed a Philippine mayor embroiled in a struggle to control operations of a gold rush site in the southern island of Mindanao, police said Sunday.
Joel Brillantes died on the spot late Saturday after being shot by a suspect identified as Anecito Dejito, who was himself later killed by the politician's bodyguards.
Brillantes had been feuding with miners after his company wrested control of the Diwalwal gold rush site in the town of Monkayo.
The Phillipines president's office had intervened in the dispute two years ago in favor of the miners who agreed to form a cooperative and set aside 15 percent of their earnings for the government.
Police said they were investigating whether the killing was connected to the dispute.

Belgian

(06/29/2003; 02:51:05 MDT - Msg ID: 105194)

INTEREST RATES

We are provided with insights as to "how" IRs are lowered and we get a daily menu, full of possible reasons-justifications, "why", low/lower IRs are oh so good.

Now, that it becomes obvious to many, that low/lower IRs, AREN'T resorting any effect, wrong effects...we better start looking for the "real" reasons for the organized IR debauche.

My amateuristic conclusions : 1/ A "refinance" carroussel and 2/ A nice, official, present to the broader financial brotherhood (banks included) under the form of guaranteed profits !

Any general price-inflation goes with rising IRs ! The past/present, price-deflation was/is not organized or an effect of the policies, but the result of a "coagulating" global economy that reached a saturation point in healthy offer/demand balance, burdened-accompagned with unsustainable-destructive, Debts. A DEBT DRIVEN ARTIFICIAL HYPER ECONOMY !

All policies hyper focussed on the sole purpose of keeping this mania going. Maniacal Refinancing the growing debts as to oil consumption...bond (paper)profits as to provide artificial (book)profits for the merchants of debts.

Las Vegas is stuck !

Now, the unwinding process has to take place. It is in this coming phase that GOLD is going to show a BIG, ear to ear smile, for a very looooongggggggg time !

The "International" value (?) of the US$-reserve will come under the central focus in this impossible unwinding.

And indeed, as Sinclair states correctly,... It is THE RATE OF CHANGE THAT MATTERS, not only in economy but in almost everything. Velocity, with wich things do happen.
Apply this to the coming evolution of the US$ in the International arena. Remember how fast (rate of change) the euro recouped its exch. rate loss against the dollar !
Most probably, phase two is in the make.

Remember how the POG 330$-350$ zone was a very important one, from many standpoints ! The rate of change in POG will increase as the almost a decade of maniacal interventionist manipulation is to unwind...out of control !

I am not worried about the future of the global economy...but IT IS THE DOLLAR that is the centerpiece-axis of the global economic/financial happening-future. QUO VADIS DOLLAR ??? Live "with" the dollar if possible or live "without" it if necessary !? If we like it or not, but this question will be pushed, increasingly to the forefront. Let us not forget that the USUKAUS, Middle East AND Eurasian adventures, boil down to the struggle between dollar and euro !!! With Tony Blair under further attack and US elections coming closer,...cornered rats might make funny jumps !?

The present summer period seems as a "position clear up" to me. Will see what happens next ?

spotlight

(06/29/2003; 04:03:20 MDT - Msg ID: 105195)

Silver

R.Powell

I have been luke warm on silver, altho I have a position in physical. It just seems that supply must be coming from somewhere. That situation existed even before China started exporting. I don't like mysteries. I've heard reports for years about the shotage of silver. However, my gut feeling tells me it should have shown up by now.
Gold,on the other hand, can be used to stave off a monetary collapse, which is, I believe coming right about the time James Sinclair has projected. In the mean time, we all have to use cash in our daily lives. However, that doesn't mean we have to keep large amounts in banks or even T-debt accounts. As I stated before, if one has already acquired the insurance physical Gold and Silver can provide, I believe that a good convertible bond in a good producing gold mine is a wise place to place excess cash. I also do not believe it should be crime to mention this on this site, as long as I have stated the case for physical as a first choice, which I firmly believe.

(06/29/2003; 04:16:18 MDT - Msg ID: 105196)

Links to some free e-books

"Fiat Money Inflation in France" by Andrew Dickson White, is a book mentioned in the recent commentaries of The Mogambo Guru:

http://www.dailyreckoning.com/body_headline.cfm?id=3281

Free e-text from Project Gutenberg

http://onlinebooks.library.upenn.edu/webbin/gutbook/lookup?num=6949

There is also a free e-version of "Memoirs of Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay,

http://www.econlib.org/library/Mackay/macExContents.html

silvercollector

(06/29/2003; 05:02:59 MDT - Msg ID: 105197)

Blair has impaled himself on the horns of an American dilemma

http://www.dailystar.com.lb/opinion/27_06_03_b.asp..post-Iraq opinion..

Joanne

(06/29/2003; 06:20:57 MDT - Msg ID: 105198)

R. Powell

Regarding silver, I keep remembering a post I think I read here (I learn EVERYTHING here) about Bush going to visit Fox in Mexico City and ever since then, the silver price barely moving, the theory being that silver is coming into the US from Mexico but not through the usual exchanges and at a much better price than four-something. Is this a possibility?

Belgian

(06/29/2003; 06:23:37 MDT - Msg ID: 105199)

@ Spotlight

I don't see any special advantage in holding a (modern-?) convertible bond of a good miner or any other non goldmining company. These convertible bond-products are more of the same derivatives (on derivatives). Have you already been reading the "small" texts on many of these convertibles ? Often, they contain very nasty, unexpected surprises. The main succes of these convertibles was due to the fact of ever declining IRs and the general public was ready to accept much more (unknown) risks for relative higher IRs ! Convertible bonds are NOT produced with the purpose of providing "you" with an extra, charitable profit.

I would prefer to *gamble* on a *good*, reliable and undervalued miner ! Emphasis on "gamble" ! Before, it was generally called, speculation. Goldmine gambling has always been a risky business and the risk reward factors have increased-detoriated,... as always imvho.

Sure, many savers are looking-shopping for IR-income ! I've sold all my fixed income some time ago FOR PHYSICAL GOLD.
With only one exception of the goldminer GFI, providing a relative safe and nice dividend on my purchasing price, when undervalued below 4 � per share.
Haven't been adding since.

I remain convinced that IRs will skyrocket (double) again in the not so very distant future. Higher IRs = higher POG !
and price-inflation...hyper-inflation. Not exactly a nice environment for holding bonds, at present, if ever again ?

Sometimes it is better to do nothing than to jump up and down with mounting losses and rising risks.
Be careful Sir ! Congrats with your vitality !

@ Silvercollector : As a mean of retaliation for the Blair-attacks, BBC was excluded from having interviews with Putin on his visit to the UK. Paul Bremer stated he wants to catch Saddam ASAP. Accumulating evidence that the Iraqi affair was (is) that first of maybe many more steps too far. This remains a heavy mortgage on the dollar that will not go away. It was not a coincidence that the low profile Britisch troops were brought under the spotlight (not the poster of course) with another atrocity on men, simply doing their job.

The Middle East, Arabian oil, is evolving into a very important factor, affecting the euro-dollar relationships.

Ten Bears

(06/29/2003; 08:25:33 MDT - Msg ID: 105200)

Scattershooting while wondering what happened to ORO and PANDAGOLD

"The only explanation for (Greenspan's) lack of insight is the extraordinary low level of scientific understanding which managers of fiat currency have or might have", Prof. Fekete (6/24/03)
There are those who disagree with the good professor's contention that a lack of foresight is the reason for the disastrous Fed policies over the last fifteen years.A previous poster to this site (Panda gold) noted that the rulers have a very long-term agenda and are in no way lacking in knowledge,insight or ability.If one accepts this view, the question becomes "Why are policies pursued which have led to the exportation of the American manufacturing base,the importation of poverty via immigration rules,a general declining standard for eighty+ percent of Americans,a 90's stock mkt. scam bubble which filched trillions from the middle and working classes and will lead inevitably to a severe dollar decline? Anyone listing can clearly hear the "great sucking sound" referred to by Ross Perot in the early 90's. The apparent attempt to replace lost manufacturing and export earnings with easy loans has just about run its course, since borrowing increases current consumption at the expense of future consumption. The most obvious explanation for the disastrous policies pursued over the last three decades (and at an increasing rate for the last 15 years)is that those with the franchise are intent on reducing the consumption level of Americans to more closely approximate the level of less developed countries.
"In times such as these, educated men should not refrain from stating the obvious." Lord Keynes
"When in doubt, tell the truth. It will confound your enemies and astound your friends." Mark Twain
"The first panacea for a mismanaged nation is inflation of the currency; the second is war. Both bring a temporary prosperity; both bring a permanent ruin. Both are the refuge of political and economic opportunists." Ernest Hemingway

Henri

(06/29/2003; 08:31:37 MDT - Msg ID: 105201)

Most Disturbing

Don't know how long it has been going on or whether it was a recent innovation, but while standing at a bank teller's window with at least eight TV monitors trained on me, I made a simple transaction. A simple advance of $100 on a VISA card. Along with my card, I was asked to supply two picture ID's. Since I did not have an account at the bank. I was also asked to place my thumbprint on the credit ticket! Twice both copies. As if my ID's and my signature and my TV smile were not sufficient.

I harbor no illusion that my prints are not already on file everywhere from every thing from gun permits to nuclear plant access, However, this is the first time I was required to submit one by a non-governmental agency.

Seems a bit of an invasion or just govt easy fix on how to collect biometrics on the entire population. Constitutional?

They said if I had an account they wouldn't need the FP. I wonder if I need an FP to open an account?

gotta laugh for the cameras anyway

The Invisible Hand

(06/29/2003; 08:42:28 MDT - Msg ID: 105202)

One more quotation for Ten Bears

"In applied mathematics, you must describe your unit." - Isaac Newton

mikal

(06/29/2003; 08:55:42 MDT - Msg ID: 105203)

Bullion banks, derivatives, Barrick, debt...

http://www.gold-eagle.com/edtorials03_/siebholz062903.htmlBarrick's Hedge Book - A Recipe for Disaster?
Dietmar Siebholz
"Derivatives - Weapons of financial Mass Destruction" -Warren Buffet -Excerpt:
"...The ongoing accumulation of physical gold in the Eastern hemisphere leads to a factual re-distribution of real gold holdings from West to East. He who has the gold makes the rules�
The extremely low interest rate environment has all but destroyed the advantages of the gold carry trade.
The delivery and cover obligations in kind are still binding for the hedgers and shorting hedge funds.
Weak US dollar will lead to forced short-covering according to risk management rule without gold necessarily rising against competing currencies. In the longer run, however, it may be expected that gold will appreciate against all currencies as competitive de-valuations, known as beggar thy neighbour policies, will be adopted.
The Blanchard vs JPM/Barrick suit may well shed some light onto the risk distribution between the 2 parties on their mutual forward sales contracts.
The new Maginot line for gold at 370$/oz, defended as it seems in the moment, will give way rather sooner than later. If the Blanchard suit proceeds to discovery and the Yandal deal becomes known in its gory details, it may be sooner than many think."

mikal

(06/29/2003; 09:02:52 MDT - Msg ID: 105204)

Amended link

http://www.gold-eagle.com/editorials_03/siebholz062903.htmlCorrect link

Ten Bears

(06/29/2003; 09:38:10 MDT - Msg ID: 105205)

Sir Isaac's quote ...The Invisible Hand

I am not certain to which part in my last post you are referring with Sir Isaac's quote. However, if it is the fact that current borrowings may be repaid with devalued dollars (not the same unit of measure), point conceded.
However,it is necessary to remember that a depreciating currency is a tax on savings which falls most heavily on the elderly and retired. Considering the current demographics in the U.S., the largest segment of the population is at the most risk from current policies.

R Powell

(06/29/2003; 10:48:58 MDT - Msg ID: 105206)

Joanne

From post 105198, your question.....

"Regarding silver, I keep remembering a post I think I read here (I learn EVERYTHING here) about Bush going to visit Fox in Mexico City and ever since then, the silver price barely moving, the theory being that silver is coming into the US from Mexico but not through the usual exchanges and at a much better price than four-something. Is this a possibility?"

Anything is possible but I find it highly unlikely. I believe the president has many, much more important issues than the supply or demand of silver. Gold maybe, but not silver. I believe the rumor you are refering to may have been started by a fellow called Endgame. He also has stated that because the POS has NOT reacted to these many years of a perceived shortfall between supply and demand that, (and therefore) the reported deficit very likely does NOT exist. I take my fiqures from the GFMS Silver Survey but even these numbers are suspect and always succeptible to revisions. These numbers confirm the ongoing deficit. If there is a better or more reliable source of information, please let me know.

Actually, Mexican silver production fell recently but further examination brought to light that some Mexican ore was being refined in Texas, thus distorting the "production" numbers of both countries. Over the years many have searched for an answer to why the POS does not react to decreasing supplies. Endgame and others feel there must be large unreported stores available to the market. I do not agree for many reasons. Others like Morgan and Butler look for evidence of a conspiracy of manipulation to keep the POS low (below primary mine production costs!) Again, imho, I do not agree. I have put forth some speculation as to why the POS does not react to the fundamental numbers but even this opinion is full of unsubstantiated conclusions. It is a great puzzle!!

I guess with for any speculation to offer a great return, there must exist an anomaly in price, whether much too high or too low. I'm always playing devil's advocate trying to find the flaw in the agruement that the laws of supply and demand will eventually (soon?) take the POS much higher. I haven't been able to refute this basic premise.
Any thoughts?
Happy weekend !
Rich

Boilermaker

(06/29/2003; 10:55:42 MDT - Msg ID: 105207)

Spotlight

Good to hear from you and I echo others who have welcomed you. Clearly you have seen and learned alot already. Many of us on this forum have various forms of non-physical precious metal investments. In my case it's a trying to squeeze a little more leverage on a "sure bet". But when the day of reckoning comes and gold takes off most of the mines will become nationalized or "profit controlled" through excess profits taxes as was oil when the crunch came in the 70's.
In my limited knowledge of securities, convertible bonds have two main components of valuation, interest rate and underlying stock value. Belgian mentioned the liklihood that IR's will "skyrocket" so that that component of CB valuation will be declining rapidly possibly offsetting the underlying conversion value. But with 80% physical and at age 82, we will allow you to make up your own mind.
Cheers and God Bless,
Boilermaker

CoBra(too)

(06/29/2003; 10:57:53 MDT - Msg ID: 105208)

Silver? The Poor Man's Gold ...

Hey Rich,
wonder if you've listened in to Puplava's brodcast this Saturday. It was a two hour round table conference with real heavyweights as Richard Russel, Keenedy Grammage, Peter Eliades and Tim Wood.

All of the expect gold to rise, the dollar and the SM's to tank and the bond and RE bubbles to deflate.

Towards the end Jim P. asked about silver - the positive echo was almost deafening.

Cheers cb2

mikal

(06/29/2003; 11:24:29 MDT - Msg ID: 105209)

@Cobra2

What were some of the highlights of the interview? TIA.

Mr Gresham

(06/29/2003; 11:24:46 MDT - Msg ID: 105210)

Fekete archive

http://www.goldisfreedom.com/Archives/feketearchives.htmI know better than to get started reading this on a Sunday morning -- there goes the rest of the day! But for you more daring types...

GE is also chockfull of some interesting looking headlines beckoning me to let the grass grow another weekend.

HENRI -- good to see you back in the saddle.

TEN BEARS -- Your word of life is still strong. I reckon so.

Sinclair seems to have gotten us rolling again -- Treasuries topping out are his fifth element he's waiting for. Then, as he explains this time, gold takes the place of T-bonds as the safe haven. The bull market in bonds slides on over into gold. (He says it much better than I.)

And, Fekete has explained why there WERE these bond bull markets, both in the 1930s, and recently. I don't think anyone else has presented that element of the bigger picture. Too bad we can't get ALL of our "wise men" together to explain these "Endgame" moves of Al G.

silvercollector

(06/29/2003; 11:39:37 MDT - Msg ID: 105211)

Blix packs his bags

http://news.bbc.co.uk/2/hi/middle_east/3029470.stm

mikal

(06/29/2003; 11:46:24 MDT - Msg ID: 105212)

@CoBra(too)

I see where you have mentioned their conclusions regarding gold, bonds, the dollar and stock markets. But can you say why they think silver would be a comparable investment to gold, given it's underperformance recently? That is, have they unearthed something new, or can I continue to have faith in just the myriad of other arguments for Ag? It's a relative question for me personally as I attempt to maximize my ROI in both metals by periodically trading silver for gold(after years of trading incrementally from Au to Ag).
I and others as you know, have made a case for gold over silver, but never advocated holding only gold. Reasons include hidden stockpiles of foreign Ag, superior gold investment, banking and monetary demand(i.e. Euro, Dinar, possibly Yuan, Yen, Dollar, etc.) and possible gold media hype. But I look forward to any opinions, which I may sieze upon gleefully if not convulsively, chanting over and over: "Finders keepers, losers weepers".

silvercollector

(06/29/2003; 11:50:10 MDT - Msg ID: 105213)

Death on the road to Basra

http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/3025800.stm"She tells me how she saw her 11-year-old brother, Muhannad, had run up to an American military convoy trying to sell something to the soldiers, but was run over as he crossed the road.

The Americans did not stop. "

silvercollector

(06/29/2003; 11:52:26 MDT - Msg ID: 105214)

Iraqi elections cancelled by U.S.

http://torontostar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1056838210022&call_pageid=968332188492&col=968793972154

Shapur

(06/29/2003; 12:16:01 MDT - Msg ID: 105215)

@mikal regarding silver

So far silver has held its own versus a dollar that has gone from 122 to 92. I would say silver has done very well!!!

Shapur

(06/29/2003; 12:22:04 MDT - Msg ID: 105216)

Silver

Silver made a low back in 1993 I believe (someone can check it out) at 3.80 or so. It has not made a fresh low below that low so far, where as gold made a low in the 250 range in 1998/1999. So silver has not been in a bear market longer than gold during the past 12 years.

Silver will move when the last obvious ounce is used up. And I do not believe in secret surplus piles or other hidden areas of supply.

Mr Gresham

(06/29/2003; 13:08:06 MDT - Msg ID: 105217)

Yes, but do you think he disliked the Fed? ;)

http://www.agora-inc.com/reports/RCKN/Speech/McFadden is always a fascinating read (kinda matches Gen. Smedley Butler in the international relations dept.), and you just have to be moved by the passion.

If I had witnessed the events below, and we yet may, I might have the same vision of evil conveyed by McFadden. For now, all I can see it as is a scheme, an abstraction upon people's need for a money and their faith in paternal government, and a traveling con show that is about to pack up and leave town, with all of the citizens' jewelry already shipped on ahead.

Just amazing that it lasted this long, but then, it had a sheltered, productive land, and an industrious people to prey on. I think the enormity of the con is what makes it hard for us to believe, as when we first read Griffin's book, and many of us report the initial shock, and how long an interval it takes to sink in. McFadden is another installment in that chain of peaks from which we view the game plan below. (Is FOA "Another" such peak, me wonders?)

(I still can't figure out how all those bank branches, on just about every street corner, support themselves, _except_ by some such scheme as this...)

"Recently in one of our States, 60,000 dwelling houses and farms were brought under the hammer in a single day. 71,000 houses and farms in Oakland County, Michigan, were sold and their erstwhile owners dispossessed. The people who have thus been driven out are the wastage of the Fed. They are the victims of the Fed. Their children are the new slaves of the auction blocks in the revival of the institution of human slavery.

"The Scheme of the Fed

"In 1913, before the Senate Banking and Currency Committee, Mr. Alexander Lassen made the following statement: "The whole scheme of the Fed with its commercial paper is an impractical, cumbersome machinery- is simply a cover to secure the privilege of issuing money, and to evade payment of as much tax upon circulation as possible and then control the issue and maintain, instead of reducing interest rates. It will prove to the advantage of the few and the detriment of the people. It will mean continued shortage of actual money and further extension of credits, for when there is a shortage of money people have to borrow to their cost.' "A few days before the Fed passed, Senator Root denounced the Fed as an outrage on our liberties. He predicted: 'Long before we wake up from our dream of prosperity through an inflated currency, our gold- which alone could have kept us from catastrophe- will have vanished and no rate of interest will tempt it to return.'

"If ever a prophecy came true, that one did."

R Powell

(06/29/2003; 13:10:51 MDT - Msg ID: 105218)

CoBra(too)

Regarding that Paplava interview you said....

"Towards the end Jim P. asked about silver - the positive echo was almost deafening"

I'm aware of his interviews but, alas, my computer does not speak. Did any of them offer anything new?
Thanks,
Rich

Belgian

(06/29/2003; 13:26:39 MDT - Msg ID: 105219)

@ Henry

Same story for the ugly, unwilling, ungratefull Belgian dwarfs coming into the states. Many on the next flight out !
Now that Afghanistan and Iraq are under control (?)...what's the reason for keeping up such a high level of (counterproductive) security ?
How do you interprete this ? More invasions to follow ?
What is de "real" purpose of the constant high alert ? TIA.

GoldCoaster

(06/29/2003; 14:29:08 MDT - Msg ID: 105220)

(No Subject)

www.gulf-news.com/Articles/news.asp?ArticleID=91392Non-resident Indians (NRIs) now heading home for the holidays know this and, therefore, buy their gold in the UAE. The NRIs also find that just as the holidays approach they are deluged with requests from friends and relatives to bring gold

Old Yeller

(06/29/2003; 14:32:23 MDT - Msg ID: 105221)

Henry CK Liu,Dollar vs. Euro

http://groups.yahoo.com/group/gang8/message/8912
A stealth Plaza Accord,formulated,in time,to make the euro
subservient to the USD?

CoBra(too)

(06/29/2003; 15:07:26 MDT - Msg ID: 105222)

Re-Silver at Jim P's Broadcast

@Mikal & R.P.

First of all it was towards the end of the show that it was brought up.

Don't exactly know who of the gents answered the ag question with stating that ag has outperformed gold 10:1 before - and it easily could happen again.

Jim Puplava also mentioned he's just in the process of writing a piece about silver, which should be online soon.

The overall conclusion of the round table was that the usual 5-10% of PM portfolio insurance might not be sufficient at this time and it was recommended to double that segment up to 20%.

I'm personally invested up to 60% in PM's and other hard assets, like energy and water issues and have nil other exposure to financial assets. Except some cash, a few essential bbl's of - no, not oil - single malts and have my own fresh water well. Chug a lug - cb2

Old Yeller

(06/29/2003; 15:56:04 MDT - Msg ID: 105223)

ANOTHER

http://groups.yahoo.com/group/gang8/message/8755
Interesting post from Henry CK on Japan's and other dollar
chasing exporter's dilemmas.

"The current round of global deflation is caused by weak
demand resulting from the effects of dollar hegemony as
sustained by a global central banking regime regulated by
the BIS."

Something,or'somebody,has to give.

Belgian

(06/29/2003; 16:07:39 MDT - Msg ID: 105224)

Old Yeller - Liu 's response to the gang8

Liu :... By allowing a trade surplus denominated in dollars to be accumulated by non-dollar economies (yen-euro-yuan), the cost of support the value of the dollar is then shifted to these non-dollar economies, wich manifest in low wages and weak domestic consumption in these economies...

It is a (dollar) strategy to make the EU a structural supporter of a rising dollar in the long run.

I am wrestling with the translation of this brilliant "strategy", seen by Liu. Help wellcomed.

A temporary declining dollar as to secure a later long run dollar-rise ? A gifted "trade surplus" as a Trojan horse ???
Or to put it in other words, another wave of expanding dollarization into Euroland, China and Japan ?

More dollar-flooding = prolonged dollar-use !?

If this is effecting in low wages and weak domestic consumption into the main tree to be dollarized evermore...is it implicating that wages in the US will rise and consumption will increase ?

Where does Liu's sudden demonization of the anti-dollar "crowd" comes from, when it is exactly him who is constantly emphasizing the colonial effects of dollar hegemony ?

How is a rising dollar in the long run going to hold the dollar-system together with a rising trade deficit ???
Rising deficits = printing more of the same !? Common Liu !

Thoughts anyone ? Please !

Belgian

(06/29/2003; 16:33:43 MDT - Msg ID: 105225)

@ Old Yeller

Right you are : Something - Somebody has to give...Because we are ALL risking to fall prey of a general "Liquidity Trap" !!! AKA, a sudden lack of enough *market*, increasing the risk premiums ! Not an encouraging event for the dollar-system, at present when monetary and fiscal policies don't give a iota !
We are all heading into the extremes of *** POLITICAL ECONOMIES ***. Economies completely dominated by politics through ever increasing interventions. There is NO such thing as a brilliant strategy, applicable to this anymore.

Cfr. Fekete's choice between Scylla (global deflation) and Charybdis (global runaway inflation) ! Wich one is the ugliest ?

A FREE MARKET FOR GOLD will be the basis for the next system. The debt incubus saddling the world is sapping the vitality of the world economy !

Ten Bears

(06/29/2003; 17:07:34 MDT - Msg ID: 105226)

Mr.Gresham...McFadden

Thanks for the kind words...McFadden had much in common with the late Congressman Wright Patman ( 1st District, Texas)...an interesting populist philosophy from the late 19th century, influenced by the New Deal programs of the 1930's. Patman claimed the FBI rifled through his files on a regular basis. His views are worth the read, and may be found through Google search engine.

R Powell

(06/29/2003; 18:02:07 MDT - Msg ID: 105227)

Belgian

If I'm understanding right, Liu is convinced that those that have accumulated dollars via trade imbalances will eventually need to support the value of those accumulated dollars. Doesn't this imply that they will hold those dollars even though there is a threat that the dollars' value is depreciating? Is Liu assuming that the dollar holders can't / haven't / won't exchange them for something/anything else?

I've read opinions that there is simply too much (too great a store, trillions) of dollars held so that any mass liquidation would bring down the house. I find this hard to believe. I guess I'm just too sceptical to believe that there is that much co-operation among a world full of dollar holders. Imho the dollar holders will exchange them if they perceive the need/fear/advantage. I'm not saying it won't happen, in fact I wonder why it hasn't already. I just wonder why defending the dollar value will become necessary instead of simply exchanging them?
Rich

Dollar Bill

(06/29/2003; 19:12:00 MDT - Msg ID: 105228)

*>*...............-l-..............

Liu is actually guessing at this, and historically he is incorrect.
"It is the equivalent of the Romans' brilliant strategy
in making a dissident Jew a Christian god, to pre-empt the domination of Judaism over the Roman empire"

Goldendome

(06/29/2003; 19:16:24 MDT - Msg ID: 105229)

On the road to Zero Bound

http://www.jsmineset.com/s/Home.aspThanks to Gresham and S.C. for pointing out the significance of the article again linked above.

James Sinclair states that in an all-time blunder Chairman Greenshpan indicated in May that the Fed. was prepared to buy bonds in all the sprectrum of maturities to support bond price and cap interest rates. Says Sinclair, when you make a boast of this nature, you had better be prepared to back it up. Sinclair says the Fed. failed the bluff test last week when the Japanese for a change were net sellers of bonds. The Fed. was not there as promised and the bonds were sold into a falling market of rising interest rates. Sinclair indicates that this type of behavior could get the Fed. buried if the markets percieve the bond put promise as just so much more hot air and nervous holders decide to be among the first out the door.

Sinclair goes on to add that even if the bond put is effectively used, the increasing monetary aggregates created by their purchase in large numbers will effectively drive the dollar lower, thereby inducing more sellers who want their money back before the dollar drops any lower. At some point the whole thing could accelerate down as the dollar drops lower; posibly bankrupting the country.

glennh10

(06/29/2003; 21:47:10 MDT - Msg ID: 105230)

Re: Liu, Euro vs. Dollar

He seems to be describing a "sustainable" parasite/host type of relationship, where those who are export-benefitting from the U.S. (Europe, Japan, for example) are expected to internally bear the cost of not "killing off" the host (dollar). Those who are proposing this arrangement are assuming that these countries will submit to this, rather than face the loss of the U.S. import market via a dropping dollar.

The whole theory seems like hogwash, though, because, either way, they're going to lose. It seems a lot more likely that they would take action at some point to save their own skin, while the opportunity still existed.

Goldilox

(06/29/2003; 22:47:23 MDT - Msg ID: 105231)

Newmont Yandel Offer news

From Newmont's press release:

snippit:

DENVER, Jun 27, 2003 /PRNewswire-FirstCall via Comtex/ -- Newmont Mining Corporation (NEM, Trade) today announced that it has received tenders totaling $196.8 million (representing 83%) in response to its offer through its subsidiary, Yandal Bond Company Limited (YBCL) to acquire the $237.2 million in principal amount of the outstanding 87/8% Senior Notes (the Notes) due April 2008 issued by Newmont's Australian subsidiary, Newmont Yandal Operations Pty. Ltd. (Yandal), not already owned by YBCL. Yandal is the former Newmont Yandal Operations Limited and Great Central Mines Ltd.

YBCL will purchase all tendered Notes. YBCL will now hold a total of $259.6 million of the full principal $300 million of the Notes, including the $62.8 million YBCL already owned prior to this offer.

YBCL has given notice to the depositary that it has received valid tenders of Notes and consents to the proposed amendments to the indenture pursuant to which the Notes were issued from holders of a majority in principal amount of the outstanding Notes not currently owned by YBCL. Under the terms of the offer, those who tendered no longer have withdrawal rights. Yandal has advised YBCL that Yandal and its subsidiaries that have guaranteed the Notes will promptly meet with the trustee under the indenture to sign a supplemental indenture effecting the amendments to the Notes and the indenture.

To allow bond holders more time to assess these developments, YBCL has extended the consent payment deadline and the expiration of the Note offer by five business days to close at 5:00 p.m., New York City time, on Thursday, July 3, 2003, with respect to Notes not validly tendered on or prior to June 26, 2003. In accordance with the procedures set forth in the offer to purchase, on or before July 1, 2003, YBCL will pay the purchase price of $480 for each $1,000 principal amount and consent payment of $20 for each $1,000 principal amount of Notes validly tendered on or prior to June 26, 2003.

YBCL's offer to acquire the hedge positions of Yandal's only hedge counterparty that did not accept YBCL's previous May 29, 2003 offer to the counterparties expired at close of business in New York City today. The hedge counterparty has not extended its agreement to forbear demanding payment from Yandal of the amount that would be due if an early termination event occurred under Yandal's hedge contract. This counterparty has not yet demanded payment. Through acceptances of the counterparty offer, YBCL currently holds Yandal hedge positions of $154 million of the total of $202 million negative mark-to-market liability of Yandal's entire hedge positions as of May 22, 2003. Thus, YBCL holds approximately $413.6 million of obligations owed by Yandal.

TownCrier

(06/29/2003; 23:17:10 MDT - Msg ID: 105232)

No surprise from China

http://biz.yahoo.com/rf/030629/economy_china_bank_1.htmlexcerpts:

HEADLINE: China's c. bank does not see yuan revaluation

BASEL, Switzerland, June 29 (Reuters) - China's Central Bank Governor Zhou Xiaochuan said on Sunday he did not see the possibility of the yuan being revalued higher.

Asked if the yuan would be revalued soon, Zhou told Reuters on the sidelines of an annual meeting of the Bank for International Settlements: "I don't see the possibility of yuan revaluation. We have some control over our capital account."

U.S. Treasury Secretary John Snow repeated on Thursday that China should be encouraged to move towards a more flexible exchange rate and that he would back any plan to do so.

China's central bank and the State Foreign Exchange Administration have dismissed calls for a revaluation.

[Randy's note: Seems that China knows very well how to let an "opponent's" own pressure and momentum work against the rival. Could it ever get to the point where Snow actually asks the world to drop the dollar as reserve currency? I doubt that far, but you get the point.]

Elsewhere, commenting on China's huge foreign exchange reserves, Zhou said: "We _had_ lost some money on the euro, but we've determined to have a quite significant portion of euros as our reserves."

China's foreign exchange reserves, above US$300 billion as of end-May, are the second biggest in the world after Japan's.

There is increasing speculation in the foreign exchange markets that central banks have finally begun to increase the share of their foreign currency reserves denominated in euros, following the European currency's spectacular rally since last year to a record high above $1.1930 in May.

At end-2001, the IMF estimated the dollar's share of global foreign exchange reserves at almost 70 percent, dwarfing the second-placed euro's 13 percent.

-----(see url)------

A seventy percent dollar fraction means this and this only -- there is little room for the dollar to gain, and LOTS of room for the dollar to fall. This is one good reason to diversify your portfolio with supreme gold.

Call Centennial Monday for easy access to this ultimate hard asset.

R.

Waverider

(06/29/2003; 23:54:13 MDT - Msg ID: 105233)

S&P affirms Japan ratings, outlook still negative

http://feeds.bignewsnetwork.com/redir.php?jid=9ec9f04457aacdabSnip:
"Standard & Poor's Ratings Services today affirmed its 'AA-/A-1+' sovereign ratings on Japan. The outlook remains negative, reflecting continuing difficulty for the government in addressing its most pressing economic problems. In the short term it will be very difficult for Japan to deal with its pressing problems: to overcome deflation; to improve banking sector nonperforming loans; and to stabilize fiscal deficits and the debt burden. If deflation is not contained, banking system NPLs and government's finances will deteriorate and undermine the ratings on the sovereign," said Takahira Ogawa, credit analyst at Standard & Poor's. Standard & Poor's expects Japan's general government deficit to remain about 8% of GDP for several years. With continued weak growth prospects and deflation, Japan's current fiscal stance will prove to be an ever-growing burden. "Adjustment, if any, is only likely to occur after 2010, when Japan's gross general government debt will have risen above 200% of GDP, unless there is monetization of fiscal debt through inflation," said Mr. Ogawa."

Belgian

(06/30/2003; 00:57:28 MDT - Msg ID: 105234)

Rich - Liu

Liu is certainly aware of the growing dollar-avalanche in the East, waiting to slide down in the dollar valley.
Japan has serious troubles but has an almost unbelievable stash of 12 TRILLION $ savings.
Liu seems to suggest that the Eastern exporters are simply going to let their dollar-excesses melt under an artificial dollar sun. Seems extremely unlikely to me. On the contrary, these earned export-dollars will surely find cover under one or other form.
I remember that (GE)essay of "The Sting". About the yen-carry + Gold-carry.
June 24 1997 : The Japanese Prime Minister, Ryutaro Hashimoto, told a luncheon meeting at Columbia University : I hope that the US will engage in efforts and in cooperation maintain exchange stability so we will not succomb to the temptation to sell off Treasury bills and switch our funds to Gold !
Who's Treasuries is the FED buying now ??? Japanese ?
What did Duisenberg mean, recently, with his statement that CB cooperation/alignment is difficult !?

Who can keep resisting of selling dollar-bonds at their 50 years high and buy Gold still around decades lows ?

Japan could acquire Gold in a different way. They could sell $-bonds and buy euro, a package combination of Gold and paper.

I can understand that the dollar-system, wants to contain Euroland + euro and emerging China, but bringing Japan into this seems again a very dangerous (kamikaze) step too far by the dollar !?

How can Liu's brilliant dollar-strategy be combined with the almost hysterical wish of the FED of the ECB to follow IRs cuts in lockstep ? If the dollar wants the euro up to 1,40...why is an ECB rate cut so desired and obtained ?

The 13% euro part in CB reserves will increase as fast as the dollar declines.

A detoriating global currency-war will always end by the shiny yellow !

Black Blade

(06/30/2003; 01:46:31 MDT - Msg ID: 105235)

Calif. Near Financial Disaster

http://www.washingtonpost.com/wp-dyn/articles/A48925-2003Jun29.html
Hours Remain to Solve $38 Billion Shortfall

Snippit:

As many as 30,000 government workers who had been expecting pay raises in the fall are instead receiving formal notices warning that they could lose their jobs by then, because the state is broke. The nation's most populous state, home to one of the world's largest economies, has been staring in disbelief at the same dire predicament for months: a $38 billion deficit, the largest shortfall in its history and an extreme example of the budget woes afflicting many states. But now it has only hours left to solve the problem.

"It looks bleak," said Perry Kenny, president of the California State Employees Association, which represents more than 100,000 government workers. "This is the biggest hole we've ever been in, and no one can seem to find a way out. We're all sweating bullets here."

For weeks, the state's budget has been hostage to an intensely partisan political war over taxes and spending that is now getting even more bitter and complicated because of a Republican-led campaign to recall Davis from office. Organizers of that movement have collected nearly 400,000 voter petitions in favor of ousting the governor, and political strategists in both parties say a recall election, which would be unprecedented, is looking ever more likely. There is no end in sight to the impasse, which California voters are watching with increasing exasperation. Polls show that public support for Davis has plummeted below 25 percent, and that two-thirds of voters are dismayed with the legislature.

Black Blade: These are "Interesting Times" in fiscally irresponsible states. Much higher taxes and service fees will kill any hope of economic recovery in this state and others like it. Of course rising energy costs will contribute as well. Many of these problems of course result from the voters making decisions that have consequences in their own lives. The chickens apparently have come home to roost.

Aside from these minor problems it was a nice weekend in Yellowstone. Something I pass along from a state with no income tax while munching on a couple of golden fried trout and a golden ale. ;-)

Mr Gresham

(06/30/2003; 07:32:31 MDT - Msg ID: 105236)

Fleck on taxing savings

http://moneycentral.msn.com/content/p51071.aspJust starting in to read this...

Goldendome -- Excellent summary of Sinclair.

Does anyone have a thought on why the dollar goes up as bonds are going down lately (and v.v.)? I would think it would be the opposite, since those bonds represent dollar-denominated assets.

Or is it something about the normal mechanics of the transactions, in size, where you are using the proceeds of a bond sale to by some more liquid dollar holding that quickly affects the exchange rates?

Or is it that the ESF or whoever only has enough of a "budget" to hit on one market on any given day? So that when they boost one, the other goes lacking for their attention.

I dunno, hard to visualize a world I've never been part of -- that's why I enjoy reading someone like Sinclair who gives me a sense of proportion as to what things are logical relative to the world I know, and what things really are out of my reach.

mikal

(06/30/2003; 07:47:14 MDT - Msg ID: 105237)

Recession, dollar hangover not over

http://www.siliconvalley.com/mld/siliconvalley/6201892.htmPlunging interest rates alarm critics
ANALYSIS: SOME WARN CUTS JUST DELAY INFLATION, SLOW GROWTH, LOWER DOLLAR
By David A. Sylvester -Mercury News
June 30, 2003 -Snippits:
"After cutting interest rates to a half-century low last week, the sacrosanct Federal Reserve Board is now facing unusual controversy: Are rates too low? A growing number of economists are asking if Fed Chairman Alan Greenspan went too far in trying to stimulate economic growth.
The fear is that ultra-low interest rates may encourage consumers and businesses to take on debt that will prove difficult to repay when rates rise. Low rates may seem a temporary godsend for homeowners who want to refinance their existing mortgages and pay less each month, but some say Greenspan and the Fed governors are postponing unpleasant consequences: higher inflation, slower long-term growth and a sharply lower dollar. ``They are moving us completely in the wrong direction,�� says Edward Leamer, director of the UCLA Anderson Forecast in Los Angeles. ``They�re setting the stage for the next economic problem of stagflation with higher inflation and sluggish growth.��.....

For one thing, negative interest rates tempt unsophisticated investors to violate prudent investment guidelines and transfer money from safe, short-term investments to more speculative investments with higher yields, such as junk bonds.
If the economy sours, risky investments are hardest hit.
Fed critics also argue that low interest rates are medicine for the wrong illness. Consumers buy more cars and homes, but major corporations won't install new equipment and build plants -- not when the real problem is overcapacity."

mikal

(06/30/2003; 08:37:36 MDT - Msg ID: 105238)

Yuan (renminbi) "event" approaches IMO

http://www.bloomberg.comCOMMENTARY -June 30, 2003
William Pesek Jr. is a columnist for Bloomberg News. The opinions expressed are his own.
Forget Japan -- Is U.S. Now Jawboning China?: William Pesek Jr.
June 30 (Bloomberg) -Excerpts: "Either John Snow knows something we don't about China's currency plans, or he's attempting something at which the U.S. hasn't been too adept: telling Asians what to do.....
None of this means Beijing won't shift its currency policy, but the reasons against such a move this year outweigh those for it. It would mean too much uncertainty for China's new leadership, which has been around all of a few months. Also, China can't risk the slower growth that may result from a stronger yuan.[Mikal: Not a problem with a shuffle of ALL currencies]
Snow's role in all this is thickening the plot. If China has in fact tipped him off about a currency shift, would they really let him tell the media about it? Doubtful. More likely, the U.S. Treasury has embarked on a campaign of subtle pressure to prod Beijing toward letting the yuan float.
It's odd, indeed, that Snow seems keener to discuss China's currency than his own. China has come under fire from U.S. industry groups who accuse it of keeping the yuan's value too low, which they say boosts Chinese exports at the expense of U.S. jobs. Snow is playing to the gallery, letting exporters know the Bush administration feels their pain.
Tokyo used to be the target of Washington's advice and, often, its admonishments. Over the last dozen years of so, Japan got rapped for everything from weakening the yen too much to not buying enough U.S. automobiles to not acting faster to halt deflation.
Washington, Tokyo Pressure
Is it China's turn now? Snow's increasing focus on the yuan could signal a more activist approach toward China's economic policies. If so, Washington would be joining Tokyo, which has been complaining China is exporting deflation and keeping its currency undervalued.
More importantly, will pressuring China, even subtly, accelerate a change in its currency policy? Probably not.[Mikal: True, because it's already in the cards] .....Until now, corporate governance scandals and concerns about the banking system have been manageable problems for Beijing. That won't be so once the currency is fully convertible.....[Mikal: Not true, if the whole world is in crisis] leadership taking such a drastic step anytime soon. On top of China's financial system, it's still unclear how much damage SARS is doing to the economy, and confidence in it. It's just not a great time for Beijing to alter its currency policy. Besides, China's policy makers seem more interested in taking steps -- including tax rebates -- to help manufacturers export more. [Mikal: Like Fedspeak, paradoxical muddle. And SARS estimates are small and largely irrelevant]
.....If the Bush administration is turning its sights on China's exchange rate, and stepping up the pressure, the months ahead could be interesting here in Asia."

a nation of one

(06/30/2003; 09:14:22 MDT - Msg ID: 105239)

five things wrong with our country

1. Legislatures believe it is only necessary to address problems, and unnecessary to prevent them.
2. Legislatures believe it is only necessary to find money to pay for their expenditures, and unnecessary to
reduce their expenditures.
3. Legislatures believe that if they don't see anything wrong with doing a thing, there can not be anything
wrong with doing it.
4. Legislatures believe that if something causes something good to happen, it can not cause anything bad to
happen.
5. Legislatures believe that their subjective opinion is what makes facts real, not the reality of the facts
themselves.

Of many good things about our country, one is -for the time being at least- that humans can legally own gold.

admin

(06/30/2003; 09:22:07 MDT - Msg ID: 105241)

MK's Gold Commentary & Review

http://www.usagold.com/AMK/MK-gold.htmlUpdated.

How did gold do during the French assignat inflation of the 1790s? Even you will be surprised.

That and more.

"A Thought or Two after Reading Andrew Dixon White's 'Fiat Money Inflation in France' over the Weekend"

With thanks to 'ge' for pointing the way.......

mikal

(06/30/2003; 09:40:25 MDT - Msg ID: 105242)

U.S. oil and gasoline stockpiles a concern; Iraq output slow

http://money.cnn.com/2003/06/30/markets/oil.reut/index.htmNigerian strike threatens oil supplies
Prices rise as wary traders watch unfolding strike, global oil flows
June 30, 2003: 11:09 AM EDT
LONDON (Reuters)-
Snippit: "Oil prices rose Monday following a nationwide strike in Nigeria that could threaten crude supplies from the world's eighth-biggest exporter. Benchmark Brent crude futures rose 39 cents to $27.69 a barrel in London while U.S. light crude added 22 cents to $29.50 a barrel. Traders are nervous that any supply disruption could bite into fragile global energy stocks, especially as Iraqi crude has yet to make any substantial return to international markets since exports were halted ahead of the U.S.-led war.
"In the light of continuing bad news from Iraq, Nigeria is just adding to the whole series of factors that will support prices this week," said Paul Horsnell, analyst at JP Morgan."

Mr Gresham

(06/30/2003; 09:46:42 MDT - Msg ID: 105243)

a.n.o.o.

One of my thoughts about the problem of government developed after I learned that over 50% (you could check out the actual %) of people elected to Congress were lawyers in their original career.

The experience of a lawyer in earning money is that it comes "at the end of a gavel" or from a jury award or a settlement. It does not come from making and selling a product and meeting a payroll, etc, etc. i.e., running a business. (From what I've seen of most law offices, the "running the business" end comes in dead last. Dysfunctional to the max.)

Thus, lawyers think that you can legislate money, you can legislate productivity, you can legislate prosperity. (And central bankers think you can print all of the above?)

Their "business" is getting elected, and a "productive" legislative session is one which passed lots of "laws", rather than what made the economy more efficient, or the work/living environment more harmonious.

In the absence of privation or evidence to the contrary, people act out of their own life's experience, what worked for them, as to what they think ought to work for others. So lawyers in legislatures do likewise.

I guess small business people are too busy getting by day to day to weigh in against these fantasies, or maybe there just aren't enough of them/us, but in an economy based on growing credit lines used to spend on "fluff" items, and with 91% of the working adults spending their days in the employee mentality, don't expect much reality to enter in, until it all falls apart, and people have to find out what they can do that is really needed by others.

It is just sad the extremes to which things seem to have to swing, to where kids (like ones I met in Africa) can't afford to go to school, or get a decent pair of shoes.

I think we'll hear the word "hand-me-downs" come back into acceptance before this is over.

Pizz

(06/30/2003; 10:32:31 MDT - Msg ID: 105244)

Governments With Ultimate Wisdom

State of Washington is raising sales taxes .3% on only motor vehicles, trucks, motorcyles, and anything on wheels that uses public roads effective tomorrow.

Guess autodealers don't have a big enough lobby. Hit us while we're down. Seems kind of funny that they could raise a lot more going after real estate. . . . .

AND. . .in a vain attempt to plug their deficit hole, state sales tax payments, normally due on the 25th of the month, are now going to be due on the 20th with increased penalties for deliquencies. Let's leach a little more out of business cash flow - bound to spur long term business investment within the state. But they did give us 7 weeks warning - plenty of time to adjust our cash flows -

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

Probably missed all the good GSE discussions, but if earnings are to be restated up for the last few years (that was the last I heard on CNBC one morning), who is going to have to restate DOWN? Or are we now into onesided transactions? Or has someone already taken a 3 billion or so hit? Ah, heck, it's just accounting entiries at this stage, no cash yet, just capital imparement for someone.

Pizz

Mr Gresham

(06/30/2003; 10:36:51 MDT - Msg ID: 105245)

Discount rates

After reading MK's comments on the fiat inflation in France (long ago) as to why did they do it, having been through the exact same thing 70 years prior, and why is Greenspan/Bernanke willing to do the same now, the following thought:

The Fed is able to "discount" its money at 1% (short) to 4% (long).

Over the span of "three score and ten" a human seems to look for a 3% (real) return on savings. At least that number has been suggested in many intervals of history.

But, politicians. Now, what is THEIR discount rate? How quickly do they write off their nation's future for their short-term gain? 10%? 20%? More?

When you have a mis-match of "discount rates" of the future time value of money by different contending segments of society, do you get an "averaging out", or "triumph of the worst", that ends up dooming all human-created moneys?

Because politics always exists, in every time and place. Only the "shiny yellow", mute to all our pleadings of increase, is above politics.

a nation of one

(06/30/2003; 10:55:18 MDT - Msg ID: 105246)

Mr. Gresham

I agree.

The pragmatic reality seems to be that there is no principle on which a government action can be based,
which cannot be effectively defeated, in the minds of men, by some argument. And realities do seem to
necessitate the committing of some actions contrary to every principle.

The fact that a large proportion of our legislators are lawyers is indeed one of the very worst things about our
present government. There are many reasons why this is bad. I won't state all the reasons here, but there are
many. I'll just mention two.

I learned this one during many years of trying to act on the laws placed into effect by Congress: While
lawyers are extremely skilled in writing every detail into a law, every intelligent bureaucrat sooner or later
learns that no detail of law is exempt from numerous very profound exceptions which no human being can
possibly write into a law. This is different from saying that there is no detail of law that people cannot
comply with. Most details of law can be complied with. But there are many very significant exceptions
which prove that real justice will never be achieved in that way.

The second one is that many lawyers are taught that there is no right or wrong, that everything depends on
the subjective perceptions and judgement of the individual involved, also, that whether something is a fact or
not depends on how well it can be argued. This implies that there is no objective reality. And it encourages
the belief -which is erroneous- that there is some relationship between what can be stated verbally, and
whether something exists in reality. It also excuses men from having to discover what is true by using their
senses, instead of merely by exercising their imagination.

The problem as I see it is that there is no group or profession whose understandings and actions will ever
produce a body of principles by which a government can be created which will endure without necessitating
some instances of injustice, and which will not need to be modified in some way on account of this, and that
this necessarily ends in corruption, and subsequently in a complete change of government. Nor do I believe
that a �beneficent despot� is an acceptable alternative. I believe that only those services should be provided
by group effort -government action- which are necessary (by this I mean �necessary�) and modest in cost.
There are no laws that can determine or control this, I believe, just men of good moral character who have
acquired decent educations and broad experience using their best personal knowledge and judgement from
moment to moment. Our government has been lacking in this type of man for as long as I can remember.

What this has to do with gold of course, is that there will always be a need for it. And the worst things get,
the more valuable it will become.

R Powell

(06/30/2003; 10:56:09 MDT - Msg ID: 105247)

BIS news alerts

As usual, most of these are in PDF form, but, not all of them.

**************************************************
Your current news on phrase "gold(any word)" at a glance:
*****************************************************

7 new document(s) found since 20.06.2003:

1. Activities of the Bank - BIS 73rd Annual Report - June 2003 (30.06.2003 08:20)
Part 9 of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e9.pdf (PDF, 187095 bytes)

..internal audit function. Operations of the Banking Department At 31 March 2003 the balance sheet stood at 92.8 billion gold francs,1 a third successive new record for the end of a financial year, which represented a 5.8% increase...

2. Activities of the BIS - The year 2002-03 in review (BIS Speeches 30 Jun 2003) (29.06.2003 17:50)
Speech by Malcolm Knight Speech delivered by Malcolm D Knight, General Manager of the BIS, on the occasion of the Bank's Annual General Meeting in Basel on 30 June 2003. (BIS Speeches 30 Jun 2003)
http://www.bis.org/speeches/sp030630.htm (HTML, 54210 bytes)

..financial operations and performance is presented. As a complement to this, after 73 years, the BIS abandoned the Gold franc as the Bank's unit of account on 1 April 2003. It was replaced by the Special Drawing Right, a weighted...

3. BIS holds Annual General Meeting and releases its 73rd Annual Report (BIS Press Releases 30 Jun 2003) (28.06.2003 18:03)
BIS Press Release on Annual General Meeting 2003 and 73rd Annual Report
http://www.bis.org/press/p030630b.htm (HTML, 33423 bytes)

..The Bank reported a balance sheet totalling 92.8 billion gold francs (GF) at 31 March 2003, and a net profit of GF 362.0 million (GF 1 = USD 1.94149). The Annual Report and Nout Wellink's speech are available in English, French,...

4. Monetary policy in the advanced industrial economies - BIS 73rd Annual Report - June 2003 (30.06.2003 08:18)
Part 4 of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e4.pdf (PDF, 1109534 bytes)

..partly reflects the rule-based nature of the monetary system during that time ? the gold standard. Under the gold standard, the price of gold was maintained by national governments at a fixed parity, which effectively constrained..

5. The BIS in profile (28.06.2003 14:00)
Summary profile of the BIS organisation and activities - June 2003
http://www.bis.org/about/profil2003.pdf (PDF, 34165 bytes)

..offers a range of banking services designed to assist central banks in the management of their foreign exchange and gold reserves. It also acts as a banker to, and manages funds for, international financial institutions. As of 31...

6. Index and letter of transmittal - BIS 73rd Annual Report - June 2003 (30.06.2003 08:17)
Table of contents and presentation of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e0.pdf (PDF, 55717 bytes)

..financial year which ended on 31 March 2003. The net profit for the year amounted to 362.0 million gold francs, compared with 268.5 million gold francs for the preceding year. The figure for the preceding year has been restated to...

7. Foreign exchange markets - BIS 73rd Annual Report - June 2003 (30.06.2003 08:19)
Part 5 of the 73rd annual report of the Bank for International Settlements - June 2003
http://www.bis.org/publ/arpdf/ar2003e5.pdf (PDF, 3956478 bytes)

..in sentiment towards the dollar and financial markets in general. The tightening of the franc?s correlation with gold price movements in 2002 was also suggestive of the currency?s role as a safe haven. In nominal effective terms,...

21mabry

(06/30/2003; 11:21:58 MDT - Msg ID: 105248)

Mr. Gresham

Your take on lawyers is right on. I have always been of the opinion law is a cartel, in true fair competion would not one lawyer take cases for 25 percent instead of the standard one third.That way they would get more buisness,but you do not see that happening.In the past if you could pass the bar you could be a lawyer,now you have to take the lsat,a ripoff,then pay out the butt for law school.It seems we got better lawyers in the past,now its just a rich boy club keeping their hold on privlege.21

USAGOLD / Centennial Precious Metals, Inc.

(06/30/2003; 11:42:45 MDT - Msg ID: 105249)

Build your base with bullion at less than $4 over our cost!

http://www.usagold.com/gold-coins.html

Zhisheng

(06/30/2003; 15:06:08 MDT - Msg ID: 105250)

Weary Dollar

http://quotes.ino.com/chart/?s=NYBOT_DXY0&v=sThe dollar rally looks about played out today: last quote was 94.60. Looks like the 95 barrier has been too much for it.

Waverider

(06/30/2003; 15:37:59 MDT - Msg ID: 105251)

VIP:DAILY GOLD MARKET REPORT

http://www.usagold.com/DailyQuotes.htmlSnip:
"Gold also gained as the U.S. dollar gave back earlier gains against the Euro on weaker than expected U.S. manufacturing data. Also hurting dollar sentiment on the day according to some was the Bank for International Settlement's warning that the current account pressures on the US are greater than in the 1980s. The soaring current account, trade, and Federal budget deficits will continue to plague the U.S. dollar as these record debt levels are broken everyday with no end in sight."

CoBra(too)

(06/30/2003; 16:04:50 MDT - Msg ID: 105252)

La La Land?

Have we finally arrived at la la land? Everything seems topsy turvy.
Old adages have been willingly thrown overboard to make room for the make-belief and delusional new economy. An economy, which produces ... debt upon debt.

Bill Bonner says it better - "Currently at $935 billion, foreign banks' dollar holdings approach the $1 trillion level. "They have to keep supporting the dollar," say U.S. economists. "Who else can they sell their exports to?" These neo-economists see a clear and happy division of labor in the world economy: foreigners save the money; Americans spend it. Foreigners make things; Americans buy them. Foreigners lend; Americans borrow. Thus it is and so it ever shall be; at least, they cannot imagine anything different".

It's akin to the ever lasting search for the perpetuum mobile -a next to impossible task - as Greenspan's FED has as yet to discover the secrets to neutralize gravity and other natural and physical laws.

While, what's left of my intellect, tells me that a tanking dollar would call for much higher interest rates, the opposite is happening. The stock market stages a rally as well as the bond markets and gold languishes.

Ok, the above quote at least gives a reason. The question will be for how long the rest of the world will be prepared to prolong the charade. The charade of a - sorry my friends - bankrupt US dollar hegemonial system, which in turn has bankrupted too many productive countries already.

Reality will set in, when the systemic stress becomes unbearable by some major competitors. The rather extravagant excesses of late - Afghanistan, Iraq - may be finally tipping the scales.

As the US and the rest of the "West" may be on the verge of the day of reckoning ... are you personally prepared to face the consequences?

Black Blade is hammering in the solutions with his recurring admonitions to his great posts (BTW, tku BB).

Go gold - the metal of kings - and the only money preserving real value over milleniums ... cb2

Goldilox

(06/30/2003; 17:23:50 MDT - Msg ID: 105253)

Be thankful for this forum- The "free press" is under much pressure

http://www.haaretz.com/snippit:

CNN says it erred in its coverage of Israel-Palestinian conflict

By The Associated Press

CNN erred in giving more programming time to the family of a Palestinian suicide bomber than to his Israeli victims and tried to rectify the mistake, the network's top news executive said Sunday during a damage-control visit to Israel.

CNN's coverage of recent suicide bombings has provoked anger in Israel and led a local cable company to start carrying CNN's chief U.S. competitor, Fox News Channel. Fox said it expects others to follow suit. Recent comments from CNN founder Ted Turner describing both Israel and the Palestinians as terrorists have fueled Israeli anger.

snippit2:

Last Update: 29/06/2003 13:30
Israel cuts off ties with BBC
By Anat Balint, Haaretz Correspondent

Israel declared over the weekend that it is cutting
off ties with the BBC to protest a repeat
broadcast on non-conventional weapons said to be
in Israel.

The program was broadcast for the first time in March in
Britain, and was rerun Saturday on a BBC channel that is aired all over the world.

The boycott decision was made by Israel's public relations
forum, made up of representatives from the Prime
Minister's Office, the Foreign Ministry and the
Government Press Office.

It was decided that government offices won't
assist BBC producers and reporters, that
Israeli officials will not give interviews to
the British network, and that the Government
Press Office will make it difficult for BBC
employees to get press cards and work visas in
Israel.

. . .The broadcast deals with Israel's attempts to
maintain a policy of ambiguity on its nuclear
weapons, through the Va'anunu affair, the trial
of Brigadier General Yitzhak Ya'akov and the
incidents of cancer among the Dimona nuclear
reactor workers.

snippit3 (verbal):

Listening to Puplava's Saturday broadcast, all the panel members (Russell, Wood, et al) agreed that since the NASDAQ crash they were persona non-grata at all network financial programs, as Bear sentiments are not to be tolerated on a national broadcasts.

TownCrier

(06/30/2003; 17:41:03 MDT - Msg ID: 105254)

Gold to find use in international trade settlement

WGC reports:

"The Malaysian Deputy Finance Minister Dr. Shafie Mohd Salej has said that his government is in early discussions with Iran over the possible use of the gold dinar as a method of settling trade transactions under the countries� bilateral trade agreement."

My question: If this takes wing, will the element known as a "dinar" come to represent a unit of account, or will it signify always and specifically a physical item of known size, shape, appearance, content, and weight?

One of these alternatives for the future would be positive for gold, the other would make no matter (if not actually being a net negative).

R.

Ten Bears

(06/30/2003; 17:57:46 MDT - Msg ID: 105255)

The overwhelming influence of gold...good read

http://www.chaos-onomics.com/morn.htm: Like a Greek tragedy - but without a chorus to reveal the plot - events are following the path made inevitable by the actor's character. Blair, less a liar than a fantasist, easily convinced himself of what he wanted to believe. - Norman Tebbit former Chairman, UK Conservative Party

I choose the opening quote less to reflect on the rapidly declining fortunes of Tony Blair, although his fate may well put the fear of the public back into the "spinners" in positions of public trust, but rather to reflect on the inevitability of events given the current institutional framework. Many commentators have described current economic events as a "slow motion train wreck," which also captures that air of inevitability. It seems to me ironic that education's institutional love affair with computerized standardized testing reduces the necessary, to the extent one wishes to avoid being an object lesson for others, acquaintance with the study of inevitable tragedy to: "to be or not to be" is a line in which play?: a) Hamlet b) Julius Caesar c) Macbeth d) none of the above. In keeping with the opening quote, this essay intends to play the part of the chorus and reveal the tragic plot.

One of the keys in communication is the use of terms whose meaning is defined and known to all parties to the communication. If, for example, I write of deflation, referring to the deflation of claims within the financial system, while you think of the term as referring to a general decline in the price of goods, we won't be communicating very well. For the purposes of this essay, by deflation I mean a reduction in financial claims and by inflation I mean an increase in financial claims. Also for the purposes of this essay we will assume that changes in claims are reasonably accurately quantified by the Federal Reserve's Money Stock measures. One final point on the issue, if fixed definitions of terms, i.e. the basis of communication, seems a good idea, why fixed value of money, i.e. the basis of trade, is not, escapes me.

Under these definitions one can, I contend, see the history of american finance, which should not be conflated with american economics, as a series of cycles of faith in paper as proxy for money. When faith in the financial system is rising, there will be an inflation of claims. Conversely, when faith in the system is ebbing, there will be a deflation of claims. To the extent that the value of money is explicitly defined throughout the cycle, claims inflation will tend to be coincident with general price inflation and claims deflation will tend to be coincident with price deflation. Thus the track record of the Gold standard which demonstrated that under such a system while general prices would fluctuate around a baseline, the baseline, over time, would be retained.

When the value of money is not explicitly defined, the same rise and fall of faith in the financial system manifests differently in terms of general prices but similarly in terms of relative prices. That is, while, for example, general goods prices fell during the depression, and rose during the 70s the relation of Gold prices to goods prices was roughly similar. An ounce of Gold bought more goods over time as the imbalances were wrung from the system in both cases. Under a floating system of exchange deflations in claims will manifest in generally rising prices and inflation of claims in subdued or even falling prices. "Hang on a second," you might be thinking, "are you claiming that higher money supply means lower prices?" In a sense, yes.

Money supply, broadly defined, will, in general, I argue, rise when faith in the value of the currency as store of value is rising. Consider today's second chart which depicts the ebb and flow of y/y% changes in M2 and CPI during the 60s and 70s. As you can see, contractions in the stock of money were coincident both with rising prices in general and rising prices for Gold in particular. Conceptually it may help to think about the issue in terms of denomination of value. If I owned a farm and had the requisite skills and equipment, I could imagine a future of crop production extending many years. I could denominate this value in goods, by farming, in some medium of exchange, by selling, or in financial sector claims, by securitizing, whether via equity or debt instruments.

Imbalances between goods denomination, or the actual output, and claims denomination, or the value of the hoped for output, lie at the heart of the 'flation problem. Ebbing faith in the financial system comes as people begin to realize that actual output is worth less than that claimed. The restoration of balance comes as those false claims are erased from the system. To see this in action using a modern example, consider the financial build-up of the "information superhighway", which generated a mountain of claims but, as the rationalization of claims to output progressed, the relation of output of the sector to other goods prices proved far less than claimed and the deflation, in terms of equity and debt value was on.

Where am I going with this? The global monetary authorities are, according to the annual BIS report, worried about deflation. I share their fear, although not their sense that the event is not of their making. The deflation which they fear, to my mind, is a deflation of claims in the financial system, a process which has been suppressed and reversed any number of times over the past few years, delaying but not preventing the inevitable. How this deflation manifests in the economy is, in large part, a function of the policy choices. Should the price of Gold be held near current levels, the deflation of claims will result in a deflation of prices. Should, however, the price of Gold rise, the deflation of claims will manifest as rising prices. In relative, i.e. Gold vs. other goods, terms the change will be roughly speaking, the same, it is only due to the confusion caused by calling an undefined currency money, and thereby a basis for comparison over time, such as is evidenced by the CPI series, that we conceive of the 30s and 70s as different phenomena.

For all the talk of fighting falling prices, the monetary authorities have done little to address that issue. Simply by buying Gold, and thereby demonstrating their preference for the metal as store of value over paper money, they could immediately reverse price changes as evidenced by the first chart. If, however, they intend to keep Gold at current levels, the recent inflation of claims, as evidenced by, inter alia, the coincident rise in equity and bond markets in Q2, will deflate in place. If Gold stays at $350 then short trades in equity and bond markets should prove profitable in the second half, while if Gold prices rise, the effect of the deflation on those markets will be diffused. Longer term, however, I will be quite surprised if the monetary authorities retain control over the financial system without debasing world currencies.

Arcticfox

(06/30/2003; 18:02:11 MDT - Msg ID: 105256)

us$ for Yuan

If Mexico's Fox is, as he stated, sitting with US dollars that he doesn't know what to do with, why not dump the 50 billion which should cause the US$ to dip and pick up Chinese Yuans. The Chinese currency is pegged to the US$ and therefore will dip as well. Now sit back and wait for the rumoured break of Yuan from the dollar. Remember that many believe that the Yuan is 50% undervalued. Seems too obvious so I must be missing something...

Druid

(06/30/2003; 19:25:04 MDT - Msg ID: 105257)

http://goldisfreedom.com/Aladdin.htm

THE BUBBLE THAT BROKE THE WORLD"The date May 21, 2003, should be remembered as a historic landmark. On this day Aladdin Greenspan let the genie out of the bottle. The genie is now at large, entirely on its own, roaming around the world, visiting disaster upon the economies wherever it may go: a depression possibly worse than that in the 1930's. Aladdin hasn't got a clue how to put it back in the bottle because, if he tried, the genie would threaten to plunge the world into another bottomless pit: that of hyperinflation. Aladdin sowed the wind to let the world reap the whirlwind.

As the reader probably gleans it from the above, the genie symbolizes bond speculation. Greenspan testified before the Joint Economic Committee of Congress on that fateful day, explaining the strategy the Fed has developed to combat deflation. He would climb the yield curve, that is, go out to buy government bonds of all maturities, if need be up to and including the 30-year Treasury bonds, in an effort to push interest rates down thereby enlarging the monetary base that would, according to him, contain the weakness in prices.

It is a long shot from open market purchases of bonds to a buoyant price level. After all, once in circulation, the new money created by the Fed is no longer under its control. It is under the control of the speculators. They will not necessarily deploy it in the commodity or stock markets, as the Fed is hoping. They may see a better opportunity for profitable speculation elsewhere, say, in the real estate or the bond markets. The trouble is not that the Fed is following a script that has become stale. The trouble is that the Fed has given away the store by telling speculators that all remaining risks have been taken out of bond speculation. They can now bid up bond prices to unimaginable heights unopposed. This could also be an act of desperation on the part of the Fed. According to this script, the speculators are being bribed by risk-free opportunities not to dump the bonds that would reduce them to worthlessness."

Druid; It seems like there was "ANOTHER" that predicted this scenario some few years back. This speculative activity is gathering a tremendous amount of momentum and compressing the time schedule. Good luck all and grab the Gold.

Druid

(06/30/2003; 19:48:36 MDT - Msg ID: 105258)

THE BUBBLE THAT BROKE THE WORLD

http://goldisfreedom.com/Aladdin.htmDruid: Woops, sorry bugs, somtimes I have difficulty multiplexing, like typing, thinking, cutting and pasting, chewing gum, to name but a few tasks. This should make it easier.

Tacitus

(06/30/2003; 19:59:05 MDT - Msg ID: 105259)

The Effect of Inflation

Recently, I was using my savings calculator on my computer and was surprised to notice the following. If one invested 10,000 and obtained 7% growth and no inflation for 35 years, the total real return would be $106,800.

If one invested the same amount for 35 years and obtained 8% growth with 1% inflation annually, the total real return would NOT be $106,800 like I thought would have been the case. It would only be $104,371.

That isn't so bad but if 10,000 were invested for 35 years and obtained 17% nominal return but endured a 10 percent inflation rate annually, the real return would only be $86,868.

I do not understand the mathematics behind this. I originally thought each increase of 1% nominal return would offset each 1% increase in inflation. What am I missing.

Thanks,
Tacitus

Dollar Bill

(06/30/2003; 20:21:08 MDT - Msg ID: 105260)

:-/

Greetings Druid, in that link, the writer guesses;

"The trouble is not that the Fed is following a script that has become stale. The trouble is that the Fed has given away the store by telling speculators that all remaining risks have been taken out of bond speculation. They can now bid up bond prices to unimaginable heights unopposed."

There is an amazing level of control over gold buying, and
a tremendous amount of control over many aspects of international finance. Someone posted a link to a chart of the Japanese market over 15 years and I regret I didnt put it on my favorites column. It showed the completely coordinated 3 waves that made up the decline in Jap equities. It was not in the least bit chopped up in the long term view. It was as rythmic as could be.

Since seeing that within the last month, I am more inclined to guess that the writer of the above qoutes, as interesting as his writing was, is not seeing the vast control and coordination the big boys are quite capable of.

Notice what happened to the euro, since the EU linked up in a big way with the US to stand up to Iran, in this nuclear issue, the US rewarded the euro by (my guess) not only commenting again about the strong dollar, but the Euro fell in value, to 114, which is a more breathable range for Germany according to Morgan's EU analysts. Coordinated, is my guess. The Euro Yen and US Dollar dont plummet, they decline, and rise, in ways that tell me that the really big money keeps some boundries of order. Based on whatever....

Mr Gresham

(06/30/2003; 20:26:48 MDT - Msg ID: 105261)

I mean, like, whatEVER! ... (today's rant)

http://www.msnbc.com/news/933114.asp?0si=-Isn't California supposed to be the bellwether of the nation? Isn't California about to fire 30k workers, and put the rest on minimum wage? Is anyone paying attention?

Or is this just like Congress and the Pres duking it out over the budget around Sept. 30 in recent years? Of course, they'll figure out who blinked last, and get the presses rolling again. But the Feds have the, uh, Fed behind their bonds. Does California have the "Cal"? (They shoulda thought of that one, huh? The "California Reserve System". Coulda saved some headaches right about now. ;)

Minimum wage? Can you imagine the Fed Gov going onto that limitation, oh, in about two years? Stop that twittering, you two there in the back of the room. I hear you, "shoulda done that ages ago". Well, maybe so. IRS employees taking second jobs at Wendy's, if there are any. Now, that's a sweet thought that deserves getting up to the fridge for a Negra Modelo to toast the future!
(Back again)

OK, so my big fat mortgage came through a couple months ago. And almost immediately, it gets flipped over to GUESS WHO -- our favorite nemesis -- yeah, the Deriv King itself.

And immediately after, I'm embroiled in trying to straighten out my payment records between them and the other bank. Still going on.

And today, it's the handy "Customer Service" pack in the mail. Weighs about 5 pounds, with all the notifications, and rules, and disclaimers etc etc. And so what area are all the phone numbers for? HOUSTON! (I don't live in TX, nope.)

The fragrance that arises from the whole schlemiel is Arrogance. "We're big, we're the 2 most famous names in banking, you GOTTA trust us. Who do you think you are, you little s*** not to trust us! Did we say we're big?"

Bodes well for the first deriv lockup. I'm going to propose a new spell-out for our old favorite acronym "LTCM" : "Let's Trust Chase-Morgan". Think we could sell it to Marketing?

Dollar Bill

(06/30/2003; 21:02:13 MDT - Msg ID: 105262)

(:- I)

Greeting Mr. Gresham,
You mentioned LTCM, you know, there is a book about that, and I read it, scanned it. There is one key part of that book that bears mentioning. At first, the situation was not dire, foolishly, they let potential rescuers look at the derivitive hedge book, and at one point, someone is seen feverishly typeing into his laptop, the contents of that LTCM hedge book. The fall of LTCM unfolds from there.
That deriv. book, now in the hands of traders at banks and trading firms, is bled dry, it is no secret that some of the big bets played against LTCM by those now knowing the Lctm bets, were in fact banks that ltcm owed money to and these banks let thier traders drain off at least as much as
they had invested IN ltcm. Those that stepped in to rescue ltcm, walked blind into a trap that cost them about 700 million. Traders finally stopped killing the ltcm rescuers when they knew they were at thier limit.
It was not some "accident", maybe at the very start, but by letting thier bet book get out, it was just a big fleecing.

That is actually the gist of the LTCM story. It was a highway robbery, where the robbers then robbed the rescuers and probably stopped only because if they had crushed the rescuers, they knew the govt would come after them eventually.

I havent read the enron books, but I'll bet there were opponents planting thier own guys at enron derivitive desks, getting key data, and with other derivitive players, eating enron.

Some insider derivitive player someday will, should write a book.

Black Blade

(06/30/2003; 21:19:39 MDT - Msg ID: 105263)

Mr. Gresham

I see on the news tonight there is a name for dead end jobs that is apparently in the new Webster's Dictionary - "McJobs". I believe that one criticism against the "Flat Tax" proposal was that several thousand IRS workers would become nonessential "bones" and the tax preparers and accountants were none too pleased with the idea either.

BTW, a Negra Modelo does sound good right about now. Just got back from the gym and an ice cold one would go down well I should think. Yummy!

- Black Blade

Dollar Bill

(06/30/2003; 21:31:37 MDT - Msg ID: 105264)

@>@

Greetings Sir Black Blade,
I will have to try a Negra Modelo on your reccomendation.

I didnt notice the below info posted, It HAS to be the peak.
Although, I suppose the US govt will step in at the last moment to rescue California. Heck, it is only 39 billion.
Just a mouse click away. Why let this fabulous real estate bubble pop when monopoly money is so available?
Once Sept 5 comes and goes, after politics gets its time, there will be a rescue of some sort.

..According to the California Association of Realtors, "The median price of an existing, single-family detached home in California during May 2003 was $369,290, a 15.6 percent increase over the revised $319,590 median for may 2002 (up $5,330 for the month and $49,700 y-o-y!)."
The median price�posting double-digit increases in 22 out of the past 24 months,

Black Blade

(06/30/2003; 21:45:55 MDT - Msg ID: 105265)

Deflation Danger for Top Economies - BIS

http://story.news.yahoo.com/news?tmpl=story&ncid=1203&e=3&u=/nm/20030630/bs_nm/economy_bis_deflation_dc&sid=95609869
Snippit:

BASEL (Reuters) - Pernicious deflation is a very real danger for many of the world's largest economies and central banks and governments should consider preparing policies now to tackle it, a top monetary institution said on Monday. Debt levels are at record highs in many leading industrial nations, inflation and official interest rates already are very low, economic growth is weak and rigid labor markets make wage cuts unlikely -- all pre-conditions for deflation to take hold. "The successful taming of inflation has increased the possibility that most advanced industrial economies might be one deep recession away from experiencing deflation," the influential Bank for International Settlements said in its annual report.

Black Blade: Sounds like the BIS is getting a bit anxious.

Black Blade

(06/30/2003; 22:00:55 MDT - Msg ID: 105266)

While stock market rallies, insiders are cashing out

http://www.chron.com/cs/CDA/ssistory.mpl/business/1971407
Snippit:

NEW YORK -- Corporate insiders sure liked this stock market's recent rally, but not for the buying opportunities. They were selling. Big time. Just as small investors warmed up to putting money back into stocks, executives were cashing out of their company's shares at a pace not seen in two years.

Black Blade: Insiders know when to bail and pick the pockets of the Lemmings as they squeeze out the door. There simply is not a lot of good economic news out there in spite of all the spin coming from Wall Street primates and CNBC carnival barkers. Of course the insiders are bailing out.

slingshot

(06/30/2003; 23:00:47 MDT - Msg ID: 105267)

Midas Crusade

Gandalf the White, would on occasion walk the castle walls.
Looking out across the countryside he thought of days gone by. The village below reminded him of the one he grew up in and the one he left for his apprenticeship. Touching his white beard he wondered where the years had gone. Remembering the tricks he had played on unsuspecting travelers only to be counseled by his instructor. He chuckled at the punishment that was administered for his misdeeds.Oh, to be young again. He sighed and desended the staircase and walked to his chamber. On his route he encountered many friends greeting him. Always willing to talk to his fellowman it took some time to reach the door.
Finally entering his room and closing the door behind him, he stood for a short time peering at the crystal ball,covered on a small table in the middle of the room. He approached the table and removed the cloth. The sphere was clear and held tightly in its holder. He pulled a chair close to the table and sat down. He placed his hands about the sphere and commanded it to reveal the future. But the crystal ball remained clear. Never before had this happen to him. Again he commanded it to reveal and again it remained clear. Gandalf, knowing not to tempt the forces of nature, covered the sphere with the cloth. It was time to retire for the night and he was ready for sleep. Sitting on his bed he pondered why his encantations were of no use and
then stretched out and found himself comfortably for a good nights sleep. But sleep would not find him, for as he started his slumber, a voice came from the darkness.
Gandaaaalffff! He sat up in his bed. Again like a word whispered on the wind. Gandaaaalf! He lit a candle and move to the table where the crystal ball sat. Once again his name
was softly spoken. He snatched the covering from the table and the sphere was dark with a small light in the center that gave no illuminance on the table. The good wizard stared at the light contained within. Again his name was pronounced. He then covered the sphere and with eyebrows raised exclaimed, That voice!

Slingshot----------------<>

Druid

(06/30/2003; 23:12:49 MDT - Msg ID: 105268)

Dollar Bill (06/30/03; 20:21:08MT - usagold.com msg#: 105260)

Dollar Bill, I agree with you 100% that there appears to be a coordinated effort in managing this currency fire. What I believe Prof. Fekete is arguing, is that this coordination is finding it's way into our bond market and sucking the life blood out of the productive sector of our economy thereby adding additional fuel to an already out of control fire. It's my best guess that this maps in bond markets throughout the world and is having the same affect.

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USAGOLD Discussion - June 2003