Minimum WageWell, Mr Gresham, If you please allow me to add to your rant and hope to shed some light as to how I see it in todays world. Minimum wage will become the accepted wage. Nafta and Gatt will see to this. As industrial and manufacturing jobs go overseas the service jobs will increase. Yepper, more and more college grads will follow the money and leave the USA with an empty hulk. The price of further education will deter those with sheepskins to seek some financial stabilization before going on to higher
education. So not only do you have the decline in industrial and manufacture, you have the exodous of intellect. Another point , who will be able to purchase gold on a Wendy's Income? Sad state of affairs I say. So you tell your children to get a good education and what awaits them? Those BOZO"S in D.C. have screwed us all. Those who strive to improve their lives are squandered by the never ending welfare state and the greed of corporate CEO's.
Slingshot-------------- <>

slingshot (06/30/03; 23:00:47MT - usagold.com msg#: 105267)
Midas Crusade
===
I and the Hobbits LOVE the start !
<;-)

Cities have turned into jungles.
And corruption is strangling the land.
The police force is watching the people.
But the people just can't understand.
We don't know how to mind our own business.
Cause the whole world has to be just like us.
Now we are fighting a war over there.
No matter who's the winner, we can't pay the cost.
Yes , there's a Monster on the loose.
He has our head between the noose.

And it just sits there,watching.

Steppenwolf. Monster album. 1971

In 1973, the Shah of Iran, a Western pupet, doubled the POO (5,5$ > 11,2$) on a simple press conference. Note that the Shah's wife and children found refuge and are still living in France.
This as background for the present EU involvement with Iran's nuclear "problem". Reread FOA (hall of fame) when he elaborated on the 1970-1980 oil crisis.

Note that when all seem to panic about "general" price-inflation, the POO stays firmly where "they" want it to be !

The Shah-story might repeat itself for Iraq as well. Remember that when the Shah had to run for Khomeini, who returned to Iran from Paris, nobodody wanted to hospitalize the dying Shah. History might repeat itself, highly likely.

After the Dimona-Vanunu (Israel's nuclear reactor) story circulated on different other EU TV channels, it finally was on BBC World. A 180� turn !!! Hoi Tony .

Place all these events-facts as annexes (further context) to the fine historical analyses that The FOA-team made in '97-'00 (archives).

Allow me to remind us another of FOA's subtle syntaxes :
In our modern world, we must remove GOLD from the official money system and place it in a FREE MARKET (market - !!!)...and people will use it as WEALTH MONEY, NOT "borrowing" money. Thennnnnnnn the fiat can come and go as the wind !

If Gold can circulate in coin form and trade on a world PHYSICAL FREE MARKET, without legal tender status, it will become a perfect background-currency (dinar-?) for all mankind.
Destroy (humm) the banking aspects of Gold and let it all trade for physical settlement only.

Did Milton Friedman and Henry C K Liu read FOA !?
The dollar-oil-euro-Gold...

6% on 100 = 106
7% on 100 = 107 minus 1% loss in purchasing power = 107 - 1,07 = 105,93.
Better off with 6% and no currency depreciation (106) than 7% and a 1% in currency depreciation (105,93).

That's "why" some (E)CB is so concerned about "price-stability" and prefers a stable internal growth instead of exhaustive economic/monetary wars, wich always end in tears !
The past and present Debt-driven political economy is landing in the general price-deflation, exactly because of having created environments where people, states can easely kill each other, economically. The "growth-obsession" that always gets out of hand by becoming destructive.

One can (must) remain very critical on the EU (euro) intentions of the Growth and STABILITY pact...but Euroland gives, at least, evidence of having "learned" its lessons from the past two WWs and monetary debacles.

*FreeGold* IS a solution and I'm getting more convinced by the day, that the EU is playing "its" game in "its" own house. EU (and others) wants OUT FROM UNDER THE DOLLAR SYSTEM !
Gold,...another GoldMarket,... is at the center of this process !

When looking at the euro-dollar exchange rate evolution ( + POG-POO)...we must decode this behavior as correctly as possible. Follow the difference in exchange rate versus the "local" AND "outside" purchasing power of both competing currencies...or should we say "systems" !!!-???
Wich one is turbulently Debt-driven (obsessed) and wich one desires to reach as much stability as possible ?
And what do "markets" prefer ? The euro is gaining "finance-preference" ! Oil production has become less responsive to US (dollar) demands ! The ugly (paper)GoldMarket is remarkably stabilizing regardless/despite the turbulences.

There is a growing general "political will" out there, that wants to escape from the dollar held world...and do it "before" dollar-dents makes it self implode in an inflalala blaze (your IR maths !). Reread FOA's "shoe-market" allegory.
Soon, at the appropiate moment, all political will to control Gold's price for the sake of world currencies will be gone...

http://www.marketwise.com/MW_Newsletters/MWBlackBox.html?ID=BBNL
Snippit:

I cannot say it often enough, or stridently enough, but here it is one more time: Gold is the no-brainer investment of our lifetime. Moreover, it offers an opportunity to leverage the destructive force of a millennial deflation that is certain to devastate the net worth of millions of investors, as well as to ravage valuations across a broad swath of asset classes. Let me go on record as having begged you to move immediately into gold, perhaps with 10-20% of your investment capital. Meanwhile, do not be fooled by the occasional downdrafts in the price of gold on futures markets.

Black Blade: Inflation/Stagflation/Deflation - having gold in your portfolio may just save it. Which ever way it goes a little insurance can go a long way.

http://www.neftegaz.ru/english/lenta/show.php?id=37133excerpts:

01.July.2003 --
...In the first quarter, gold gained over $10 an ounce.

In this quarter, gold was behaving like a currency as all traders were speculating on a Fed rate cut and observing the incoming economic data.

The current discussion among some Islamic nations could influence gold in the coming weeks. The practicability of a gold-based dinar will be discussed in order to decrease the dollar dependency.

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

Similar to a question you might get at your grocery store: Paper or gold?

Today the decision is yours.

R.

"I have never seen more Senators express discontent with their jobs....I think the major cause is that, deep down in our hearts, we have been accomplices in doing something terrible and unforgiveable to our wonderful country. Deep down in our heart, we know that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected." -- John Danforth (R-Mo)

"No constitutional right exists under the Ninth Amendment, or to any other provision of the Constitution of the United States, �to trust the Federal Government and to rely on the integrity of its pronouncements.�" - MAPCO, Inc. v Carter (1978, Em Ct App) 573 F2d 1268, cert den 437 us 904, 57 L Ed 2d 1134, 98 S Ct 3090.

Agree with your summation......American talent will be exported all over the globe to the benefit of the "SYSTEM" as planned.....

"The few who understand the system, will either be so interested from it's profits or so dependant on it's favors, that there will be no opposition from that class." -- Rothschild Brothers of London, 1863

What better means is there for the transportation and globalization of fascist capitalism then to export the laws, customs and practices of the empire.

Thats what GATT and NAFTA are really about. The empire cannot force a Citizen to relocate, but through economic pressures they may force them to VOLUNTARILY relocate to spread the dis-ease.

Me thinks a big war is coming in the near future (Kondratieff Cycle plateau).....they always come! A big war and the post rebuild could be the medium employed to ATTRACT American intellectuals and know how to far away distant lands and cultures.

JMO

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

Gold up is leading the dollar down today!

"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."

*** If you will do the calculations by hand, step by step, using a pencil
and paper, you will understand it.

http://www.usagold.com/AMK/MK-gold.htmlUpdated.
New Quick Notes: "As the familiar pink pages flopped open on the dining room table this morning, the headline jumped off the page: 'BIS says Bush tax-cut 'not helpful'..... 'Odd that they would be so straight forward,' I thought......"
___________
Accompanying link to FT story:
Ed. Note: I'm not so certain it's the tax cut but the
level of borrowing and monetized debt that are the
true problems. Per the U.S. Treasury daily report,
the federal government has added $361 billion to the
national debt so far this fiscal year. At that rate, the
pro rata real fiscal deficit will be in the $600 billion
range for fiscal year 2003 -- much of it financed by
Federal Reserve purchases of U.S. treasuries, i.e.,
running the printing press. As a cross reference to
the BIS concerns, I would recommend "A Thought
or Two after Reading Andrew Dickon White's
'Fiat Money Inflation in France' over the
Weekend " in the far right column which provides a
link to Dickon's essay at the end.
________
Gold up over $4........

"The few who understand the system will either be so interested from it's profits or so dependant on its favors that there will be no opposition from that class." -- Rothschild Brothers of London, 1863

*** The truth of the above statement needs to be overturned.

One thing consistently surprises me above all others. This forum is filled with intelligent people, many of whom are directly involved in financial matters one way or another. And the Internet web sites that I see are conducted by very informed and highly intelligent people also. Why is it then, that I never read of the possibility that what is happening -to the US economy, the dollar, the markets, Gold, the interest rate, the value of bonds- could be the result of deliberate and knowing intentions by those in positions to bring them about? To me it seems clear that the effects of Mister Greenspan's actions are the result of a skillful execution of long-range strategy intended to destroy our nation by means of the weapon of economics, and that this is not incidental but primary to his intention, and to the intention of others. This is why his verbage is obscuring. It is a deception that goes along with the intention.

Everyone agrees that damage to our nation is occurring. But everyone gives the impression of believing that
it is caused by nothing more than a slipshod handling of the elements of economics. Such a view must be
false, when it can be seen that those involved are highly qualified in their subjects.

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B530CBE0A%2D0ACA%2D4D68%2DAD51%2D1460B905F34B%7DSnip:
"Gold prices got a lift Tuesday morning thanks to fresh weakness in the dollar and a higher forecast from Merrill Lynch, boosting shares of metals companies for a third-straight session. The fundamentals for the precious metal are "extremely positive" and "able to support a considerably higher gold price than we originally thought," Mike Jalonen, an analyst at Merrill Lynch, wrote in a new report. Jalonen cited expectations of prolonged weakness in the U.S. dollar over the next 18 months. Other factors include declining mine supply, stable central banks sales and continued de-hedging among producers."

http://www.usagold.com/gildedopinion/assignats.htmlAssorted words of introduction....

The story of "Fiat Money Inflation in France" is one of great interest to legislators, to economic students, and to all business and thinking men. It records the most gigantic attempt ever made in the history of the world by a government to create an inconvertible paper currency, and to maintain its circulation at various levels of value.

It also records what is perhaps the greatest of all governmental efforts to enact and enforce a legal limit of commodity prices. Every fetter that could hinder the will or thwart the wisdom of democracy had been shattered, and in consequence every device and expedient that untrammelled power and unrepressed optimism could conceive were brought to bear.

But the attempts failed.

They left behind them a legacy of moral and material desolation and woe, from which one of the most intellectual and spirited races of Europe has suffered for a century and a quarter, and will continue to suffer until the end of time.

The actors of the Revolution were in fact dealing with some classic issues of macroeconomics, and far from being haphazard innovators or ignorant victims of incomprehensible phenomena, we see them as drawing upon contemporary economic thinking, as well as recent experiences in various countries. That they may have failed in a great number of respects does not deny them the presumption of rationality; nor of free will. They tried to solve problems they inherited from the Old Regime: both explicit problems, and implicit contradictions of the condemned order; but also problems of their own making. And as they searched for solutions, they relied on known methods, and experimented with new ones, discovering in the process many constraints on human action with which we still grapple today.

The confiscation of property rights under legal forms and processes is apt to be condoned when directed against unpopular interests and when limited to amounts that do not revolt the conscience. The wild and terrible expression given to these insidious principles in the havoc of the Revolution should be remembered by all. Nor should the fact be overlooked that, as Mr. White points out, the National Assembly of France which originated and supported these measures contained in its membership the ablest Frenchmen of the day.

Born in 1801 in the wake of this sad monetary and social chapter in human history, Frederic Bastiat advocated some principles that remain even today good words of guidance for each of us to live by. He said that we must strive to be responsible for ourselves. "Look to the State for nothing beyond law and order. Count on it for no wealth, no enlightenment. No more holding it responsible for our faults, our negligence, our improvidence. Count only on ourselves for our subsistence, our physical, intellectual, and moral progress!"

And what better way to tangibly ensure subsistence than to measure your progress with a sure and steady accumulation of physical gold! But caution about your methond remains the watchword -- given the ongoing political tug-o-war by the two sides over the expediency of confiscation.

"Still one thing more, fellow citizens -- a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." --Thomas Jefferson in his first inaugural address

It is perhaps interesting that around the time of the 1933 gold confiscation by President Roosevelt (effectively ending the domestic gold standard as gold ownership for Americans remained unlawful until 1975), in promoting the various cautions presented in this document during the early years of the Great Depression of the United States, The Bank of New York participated in its distribution and offered these prefatory remarks of endorsement:

THE BANK OF NEW YORK AND TRUST COMPANY, which celebrates its one-hundred and fiftieth anniversary in March, 1934, considers it a privilege to be able to distribute some copies of this scholarly article of the late Andrew D. White. The article emphasizes the fact that the use of fiat money in France was in its beginning a sincere effort on the part of intelligent members of the National Assembly to stem the tide of misery and wretchedness which had brought about the Revolution in 1789. But the article also shows clearly that once started on a small scale, it became utterly impossible to control the currency inflation and that after some slight indications of improvement in conditions, the situation went from bad to worse. In the long run, those most injured were the people whom it was most desired to help--the laborer, the wage earner and those whose incomes from previous savings were smallest.

Click the link to be taken to this important history lesson, "Fiat Money Inflation in France" by Andrew Dickson White (1914). Images of assignats await your visit.

R.

"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".post 105200... You are not alone in your conclusions.

http://www.designscomputed.com/images/ira_metal.htmlBack in late 1999 I convinced my wife to take her 401K funds out of stocks and put it in a money market. That was about 6 months too early, but we're not complaining :)

Recently, I went a step further and convinced her that she should put the money into metals. She had about $100,000 to invest (I sure wish I did too !). That is the major portion of our retirement fund. I had an interest in palladium, but had a hard time finding a source for it that was priced anywhere close to "spot".

I read the IRA regulations and they stated that any bars (including palladium) that are approved for exchange on NYMEX are allowed in IRAs.

It occured to me - why not just buy the metal on the COMEX/NYMEX ? So we set up a precious metals IRA and proceeded to place the orders on COMEX/NYMEX.

Recently, we took delivery. The Comex now has 5000 less ounces of silver in it's warehouse ! Their reserves of gold have been depleted by 100 oz. and their reserves of palladium are now reduced by 200 oz. See the link for pictures of the bars ! It is interesting to see what types of bars you actually get with these contracts.

The disadvantage with this whole setup is that IRA rules dictate that precious metals in IRAs can not be held by the owner (they don't want people getting their hands on their IRA funds !). So the bars will stay in a secure depository in Delaware until our retirement arrives. This storage facility handles a lot of similar accounts, and it is not connected with Comex/Nymex, or anything similar. This is also somewhat of an advantage, however, in that we don't have to worry about storing any valuables at our house.

I realize that the palladium price is quite volatile, but we have 10 to 20 years to wait for the perfect moment to sell (at a much higher price, of course !).

"You are not alone in your conclusions."

Thanks. I appreciate this.

Professor Fekete: "It is, of course, incredible that Greenspan refuses to see the potential threat to the
economy. To add insult to injury, he has the cheek to pretend that he is fighting depression (of his own
making) by cutting interest rates, the very act that will activate the deflationary inferno. The only explanation
for his lack of insight is the extraordinarily low level of scientific understanding which managers of the
regime of fiat currency have, or must have."

*** But even Professor Fekete fails to realize that the view is more realistic that Mister Greenspan intends
the results of his actions, than that they are the result of ignorance, or that they are due to a lack of
knowledge and ability. I emailed Pr. Fekete, telling him that he needs to consider the possibility that Mister
Greenspan is not refusing to see the potential threat to the economy, but that he is only engaging in the
deception of pretending not to see it.

http://www.globetechnology.com/servlet/ArticleNews/TPStory/LAC/20030701/RNEWS01-3/TPTechInvestor/Snip:
"Barrick Gold Corp. has filed a short-form prospectus to sell up to $1-billion (U.S.) of debt. Details of the securities to be offered will be provided in supplements to the prospectus, which was filed Friday with the U.S. Securities and Exchange Commission and the Ontario Securities Commission. Toronto-based Barrick said it intends to use proceeds to repay debt, to make equity investments in subsidiaries, to repurchase stock, for capital expenditures and investment programs and for general corporate purposes."

Waverider: And so goes the way of the gold hedgers!

"No constitutional right exists under the Ninth Amendment, or to any other provision
of the Constitution of the United States, �to trust the Federal Government and to rely
on the integrity of its pronouncements.�" - MAPCO, Inc. v Carter (1978, Em Ct App)
573 F2d 1268, cert den 437 us 904, 57 L Ed 2d 1134, 98 S Ct 3090"

*** Article [IX] "The enumeration in the Constitution, of certain rights, shall not be
construed to deny or disparage others retained by the people."

Article [X] "The powers not delegated to the United States by the Constitution, nor
prohibited by it to the States, are reserved to the States respectively, or to the people."

In other words, the government does not legally have any power -including the power
to deceive the people- that is not specifically delegated to it by the Constitution.
Additionally, the Bill of Rights -Articles One through Ten- specifically states that if a
particular right is not explicitly set forth in the Constitution, that is no reason to
conclude that the people do not have such a right. The court that wrote the original
quote did not comply with the Constitution.

Through many of our daily activities the goverment is of the mind we are waiving our rights.When you sign your tax return you waive rights, when you get a drivers licsense you waive rights,when you get a social security number you waive rights.When the colonist defeated england they signed 13 seperate peace treaties with england one for each independent entity.You are first and for most a citizen of your state which has joined a union of states but still this state was supposed to keep certain soverign rites,read your states constitution. This federal form of goverment has been usurped by corporate goverment and corporate law. Gold stocks were strong earlier today maybe its foretelling a move up in physical.21

IMHO palladium is a solid buy,its way of its highs,it has key uses in industrial processes,its a substitute for platinum in some industries,I have liked it for about 3 months now.It does seem hard to buy close to spot and not many dealers seem to sell it.21

What I find astounding (amongst commentators) is the complete lack of consideration given to WHAT a deflationary event means in terms Systemic failure....are they ALL simply conditioned for contango ad infinitum?
Mr Greenspan and his ilk are simply reacting to Market conditions, not so much of their making but largely bought about by the Systemic flaw created with (a) Democracy (b) the move to a Faith based unit of account from what is best described as a quasi-intrinsic value unit...and (c) Globalisation.
The System is certainly poised to turn around and bite a lot of behinds anoo but I don't think it's teeth can penetrate Gold in possession.

Well done s-man!
...as a caviat tho, depository Bullion is not immune "entirely" from the system....kinda like having the first Hep-B shot and not going back for the Booster eh?
Making some tentative plans for selling out your holdings...to Yourself!(to take possession) might be prudent.

http://www.usagold.com/DailyQuotes.htmlSnip:
"Gold surged higher in the last 24 hours as the U.S. dollar weakened spurred on by weaker U.S. economic data suggesting that the euphoria over a rebound in the U.S. economy may be premature. The Institute for Supply Management's national factory data rose slightly but the data is still reveals a contracting economy. The combined weak dollar and grim economic data convinced Funds and speculators to cover short positions and accumulate gold though profit taking was noticed around the $353 level. Some analysts now are convinced that the dollar will weaken much further over the next several months with a growing minority suggesting that the dollar will continue to weaken for several years due to exceptionally large growth rates of current account and trade deficits that exceed the United States total combined gross domestic product (GDP). With very little room left to cut interest rates, the Federal Reserve may soon act on its threat to use "nonconventional" means to stimulate the U.S. economy."

http://www.skolnicksreport.com/Thank you fellow goldmeister,

it is a statement that has not sufficiently been addressed on this forum. I am sure that many forum members would shy away from such statements as yours, as they will be well aware of how society treats conspiracy theorists (factists!) - ridicule them publicly and destroy their reputations, especially if they have a position of prominence.

There have been those such as Mr Skolnick, who have a vast network of sources of information regarding the larger forces pulling the levers behind the scenes. If one keeps an open mind long enough, they can get past the incredulity they feel at the realization of the vast scope of the destructive intent behind the actions that are being taken by Greenspan and others, and prepare for the events that are coming our way....

PS. Greenspan being knighted by the Queen - what has Greenspan done for Great Britain? Nothing of note publicly that I am aware of (and is he not in charge of protecting the value of the currency of the USA?)... so what has he done for Britain behind the scenes, at the expense of the USA to warrant that knighthood?.....

Regards,

GB.

http://biz.thestar.com.my/news/story.asp?file=/2003/7/2/business/wndinar&sec=businessSnip:

"...
Greater use of gold dinar for trade soon

BY NICK LEONG and SABRY TAHIR
PRIME Minister Datuk Seri Dr Mahathir Mohamad said that in addition to Iran, many countries, especially those in West Asia, are interested in conducting trade with Malaysia using the gold dinar for settlement.

"Arab countries, in particular, have expressed interest but the decision-making process and bureaucratic procedures take time," he said after opening the International Convention on Gold Dinar as an Alternative International Currency in Kuala Lumpur yesterday.

Dr Mahathir said efforts to use the gold dinar in bilateral trade with Iran had just started and, if successful, the same mechanism could be applied and expanded to Malaysia's other trading partners, particularly the 30-plus countries with which the country had concluded bilateral payment arrangements (BPA).

On whether the adoption of the gold dinar for trade could be achieved this year, the prime minister said: "Maybe ... we'll see if we can do it with Iran."

Dr Mahathir said Malaysia was ready to use the gold dinar but other countries either did not really understand the concept or found it difficult to make a decision.

He said Malaysia would continue to promote the use of the gold dinar not only among Islamic countries but also non-Islamic nations.

"We have to be patient. When we introduced Islamic banking, it took time for people to accept it but now non-Muslims and non-Islamic banks are using Islamic banking and they can issue Islamic bonds," he said.

Dr Mahathir said he did not foresee any objections to the use of the gold dinar as it was the same as the gold standard used in the Bretton Woods Agreement.

The Bretton-Woods Agreement is about fixing the exchange rate of major trading countries' currencies against gold. The value of the currencies was fixed against the US dollar which in turn was fixed at 1/35 ounce of gold or US$35 per ounce.

On whether the US had made known its stance on the gold dinar, Dr Mahathir said he had not heard of any objection from Washington on the matter.
..."

Sundeck: An update on the status of the gold Dinar... Looks like it is intended to make Iran the first cab off the rank for exchange using the gold Dinar. What politicing underlies that choice?

http://www.irna.ir/en/head/030630115943.ehe.shtml...and the view from Iran...

Snips:

"...
He said Malaysia is also discussing the matter with a number of
countries from West Asia who may want the same arrangement.
Dr Shafie said that the countries included Bahrain and Egypt.
However, he said that it was also still at the early stage of
discussion as "there are a number of countries in West Asia which use
the US dollar when exporting petroleum."
Dr Shafie said the Iranian government is interested in Malaysia's
suggestion of using the gold dinar as another means of settling trade
transactions.
He said top officials from Iran had expressed their intention
to use the dinar in their business transactions with Malaysia under
the bilateral payments agreement.
"These officials told me of their intention in December last
year during the Islamic Development Conference in Africa. The meeting
was attended by all the finance ministers of the Islamic nations,"
said Mohd Shafie, who represented Prime Minister Mahathir Mohamad in
the conference.
The prime minister was quoted as saying recently that Malaysia
planned to set up a secretariat in the country to promote the idea of
using the gold dinar by central banks of other Muslim countries.
Dr Mahathir, a big supporter of the subject of reviving the gold
dinar, believes that this would help in containing the dominance of
the World Bank and the International Monetary Fund (IMF) in economic
and financial affairs of the Muslim world.
"We do not care about the dictates of the IMF as we are an
independent and sovereign nation," Dr Mahathir had said proudly,
adding that the Muslim world possessed plenty of wealth which was not
being invested in productive trade and economic activities.
"I was pleading for the `gold dinar' among the Muslim states to
eliminate the bias of the dollar."
The country was proposing the gold dinar to strengthen, specially
the weak economies of certain Islamic countries, on the pattern of
the euro, Mahathir emphasized, while arguing that if Europe can take
care of its countries, "why can't we follow the same pattern?"
The gold dinar had been the currency of the Muslim world until
the collapse of the Ottoman empire in 1924. Being the single currency
at that time, the dinar helped in uniting Muslims in trade and, as
a result, trade flourished. "Thus, a vast Muslim rule was established
with the power of knowledge, economy and global power resting
with the Muslims."
..."

Sundeck:

Note the mention of petroleum. Perhaps settling in gold is less evocative?? provocative?? than settling in Euros??

To me, conspiracy is a different subject. What I did was
merely point out that it makes much more sense to believe
that the effects of an adult male's actions are intended,
than to believe that they are the result of ignorance or
lack of ability, particularly when the man is highly
qualified in the area of his profession. Now, conspiracies
may apply. But I didn't want to get into that.

---------"Dr Mahathir said he did not foresee any objections to the use of the gold dinar as it was the same as the gold standard used in the Bretton Woods Agreement. "-------

Riiiiiiiiiiight. THAT's what we want!

'Cause we all know what an inflationary heap of claptrap that arrangement was.

That's what happens when you monetize/systemize real property.

SHEEEEEEEEEESH!!!!!

Gold needs a better PR man than Dr. Mahathir who seems befuddled and poised to lead many people into distraction. Keep your eye on FOA's euro/FreeGold instead.

Gold. Get you some. ---- Aristotle

I'm sorry to say that Malaysia and the entirety of the Muslim world does not have enough gold to support a gold exchange standard based on the dinar. These sort of arrangements can only be sustained by agreement among the participants and that is why Matahir is negotiating the dinar usage with potential participants, including the Iranians and the rest of the petro-dollar world. If it gets off the ground, it will not be launched in a vacuum. If there were a public exchange rate for the dinar against the other currencies published in Investors' Daily, then any fiat printer could manufacture enough silicon purchasing power to have that dinar gold reserve delivered to their depository account in New York in a matter of weeks. The only question would be who gets to be first to scramble to the head of the line. Weakness of weaknesses......It is only when your gold reserve is subject to the same sanction as mine that you can forestall a Gaullist style raid. The Bretton Woods analogy is apt, but, if I were Dr. Matahir, I wouldn't be proclaiming my ambition to offer my gold reserve to all takers (and it's interesting that someone had the perspicacity to surface the weakness). That is a prescription for failure -- for both the dinar and those who see it as trend toward the future. Hate to be the one to throw water on this, but until this problem is resolved, the gold dinar is nothing more than a pipe dream.

OLYMPIA, WASH.(AP) Excerpts:

Washington State's revenue forecast, battered by a state economy that shows no sign of improving, took another $157 million dive last Thursday.

Chang Mook Sohn, the state's chief economist told the bipartisan Revenue Forecast Council, the state economy hasn't moved into recovery mode, and probably won't until next year. In fact, he said, deflation could be around the corner. From the last employment peak, in late 2000, to full recovery in spring of 2005, will be 18 quarters, Sohn predicted. That contrasts with the average rebound of seven quarters...This is longer than in the "70's and "80's with the "Boeing Busts." "This is clearly, very unusual, and a slow recovery pace that we have not seen at any time in the past...We are not seeing any signs that the state economy is improving.

His main reasons:
-The national outlook has deteriorated since his March forecast.
-The state's actual employment and wage numbers are worse than forecast earlier.
-Tax collections remain weak, little changed from last year's depressed economy.
-Aerospace layoffs, primarily at Boeing, are occurring faster and heavier than forecast.
-Unemployment, seemingly stabalized at 7.3% statewide, continues in a trough, and has sunk lower recently after apparently stabalizing for a few months.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Goldendome: Sohn's statements can be repeated throughout our fair land by financial authorities in nearly every state. The Rose colored long-range forcast: "Yesterday was bleak--today is bleaker--tomorrow looks a little better--Two years on, High Tide and Green Grass!"

You have raise a question that I have often wondered about. It would seem that even if the people who wield the power in our country were all completely incompetent idiots as some suggest, would not the law of averages determine that some of the edicts and regulations would be beneficial to the constitutional republic? In other words, if we were not governed by determined scoundrels but rather by random stupidity would we not draw some benfit from some of the actions just by accident?

Your remarks are consistent with what I understand. There
is more than one type of war. The type I am used to is
where men shoot at one another, and there is no doubt about
what is going on. Others engage in wars where weapons are
used that are insidious. Their enemy doesn't realize
anything is happening until it's over. That's the kind of
war we are in, I think.

I certainly agree that Greenspan and others know what they are doing. Evidence exists that this type of thing has been going on for a long time. FDR admitted of the existence of a controlling banking influence "since the time of Jackson". By 1932/1933, it was very clear that the Fed had failed miserably in its job (management of the economy/money). The Fed had been given ample opportunity, and clearly failed, more than once. I often wondered why it was in the 1930's that the whole federal gov't (all branches) seemed to act in unison (collusion?) on the money issues (gold confiscation, invalidating gold clauses in contracts, granting the Pres power to devaue the dollar). When a person or entity (Fed) repeatedly fails so miserably in its sole assigned duty, involving a field of concentration that they are renowned experts in, the most logical thing to do is fire them, get rid of them. Instead, the Fed was more greatly empowered. Oh, there were a few voices of opposition, but, by in large, the Congress and the Supreme Court joined with the President in succeeding to make monetary changes that only further empowered the Fed, at the expense of liberty and the presumed inviolability of private contracts, in clear violation of the Constitution; all justified on the basis of "emergency powers" (which persist today). This was not by accident, coincidence, or through acts of ignorance. Today, Greenspan benefits by doing what's expected of him. In his more youthful days, he learned, and he knows the "truth" about money. But, ambition got in his way. He likes his job. Given what I've read here on this forum, I don't think any one of us can entertain any hopes of holding high office. But, we sure pick the economic/monetary issues clean! You won't find better analysis anywhere else, imo.

Is there a more effective weapon, that can be brought
against a nation, than the destruction of its own money, or
a more effective means of enacting such a strategy, than
by what seem to the legitimate activities of an authorized
insider?

There never was a time when all the world's sheep got
together in a room and agreed to eat grass. But they do all
eat grass. Is this a conspiracy? Technically, according to
the meaning of the word 'conspiracy', it is. "...Any
concurrence in action...," is a conspiracy. No explicit
verbal agreement is required.

http://www.fromthewilderness.com/free/ww3/070103_beyond_bush_1.html"There is no longer any serious doubt that Bush administration officials deceived us into war. The key question now is why so many influential people are in denial, unwilling to admit the obvious...But even people who aren't partisan Republicans shy away from confronting the administration's dishonest case for war, because they don't want to face the implications...

After all, suppose a politician - or a journalist - admits to himself that Mr. Bush bamboozled the nation into war. Well, launching a war on false pretenses is, to say the least a breach of trust. So if you admit to yourself that such a thing happened, you have a moral obligation to demand accountability - and to do so in the face not only of a powerful, ruthless political machine but in the face of a country not yet ready to believe that its leaders have exploited 9/11 for political gain. It's a scary prospect.

Yet, if we can't find people willing to take the risk - to face the truth and act on it - what will happen to our democracy?

Paul Krugman, The New York Times, June 24, 2003"

Druid: Where would the "free" markets be without the politics? Gold, separating the simple from the complex.

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

Gold was up almost six dollars today, finally climbing back above the $350 barrier. With pressure on stocks next week and lack of yield in the bond market, I expect money to flow into the precious metals sector. The trend is already in place; we're just coming to the end of an excruciating consolidation in the gold and silver arena. As the baby golden bull begins to climb the wall of worry, all the skeptics think that the hard money advocates are lunatics from the fringe.

Black Blade: The economic data has not been all that rosy and with a flury of earnings warnings it is "interesting" that the equities markets rebounded. Tonight Verizon is yet another example. The company will write off $3 billion due to "accounting problems" but states that this will not impact "readjusted earnings and revenues". Whoa! I heard spin before but that one is lame. Now is as good a time as ever to have precious metals for portfolio insurance.

http://quote.bloomberg.com/apps/news?pid=10000103&sid=a5oLblmyILQQ&refer=us
Snippit:

June 30 (Bloomberg) -- California, with a $38 billion deficit, heads a pack of seven states still lacking budgets for the fiscal year that starts tomorrow in what a governors' group called their worst financial crisis since World War II. Amid recession and a drop in federal money, the number of states without budgets at this stage has almost doubled from four a year ago. Those facing credit-rating reviews and higher interest costs, like California, are: Connecticut, New Jersey, Nevada, New Hampshire, North Carolina and Oregon. Aside from California -- which has the lowest credit rating of U.S. states and higher borrowing costs than any other -- New Jersey has threatened to halt motor vehicle and even casino operations if a budget isn't enacted. Nevada is considering for the first time a tax on its state-sanctioned brothels to raise about $2.5 million.

Black Blade: Oh no! First it was a tax on beer, now the brothels! Is nothing scared? ;-)

@a nation of one:

Do sheep eat grass because of their own volition, or because their human masters limit them to grass as the only easy access to food? Their close relatives, the goats eat grass, as well, but are much more prone to a varied diet when possible. Do Americans eat refined sugar and hormone injected livestock because they have decided it's the best diet, or because it is the most easily commercially obtained subsistance?

http://www.guardian.co.uk/business/story/0,3604,988522,00.htmlsnippit:

WTO challenge India and China team up

Charlotte Denny
Tuesday July 1, 2003
The Guardian

India and China will challenge the west's control over global trade rules with a united front at the World Trade Organisation. The alliance was struck last week during their first summit meeting for a decade and could spell trouble for Europe's farmers as India has said cutting western agriculture subsidies will be top of their agenda.

Goldilox:

Apparently, price deflation is not bad for everyone. Let the games begin.

http://www.cnn.com/2003/US/06/30/sprj.irq.iraq.poll/snippit:

WASHINGTON (CNN) -- As a new poll shows fewer Americans believe things are going well in Iraq, Defense Secretary Donald Rumsfeld said Monday that the fighting there would continue "for some time."

Only 56 percent of Americans think current U.S.-coalition efforts as going well, according to a new CNN/USA Today Gallup poll. That is much lower than the 70 percent in late May and the 86 percent in early May who thought things were going well.

Goldilox:

With reporting like this, no wonder the eastern cable networks want to replace them with "19th Century" Fox news. How can we run a decent war effort when the "liberal" press won't support us with positive statistics. Let's run another poll led by the BLS.

http://news.independent.co.uk/business/news/story.jsp?story=420642snippit:

By William Kay
01 July 2003

Figures released yesterday by the Bank of England suggest that the housing market is cooling but consumers are borrowing more and investors are taking less cash out of the stock market.

The biggest rise in credit card borrowing for three years helped drive total lending to individuals up by 1 per cent in May, despite a slight fall in the growth of lending secured against the value of customers' homes.

Goldilox:

Look familiar? Monkey-see Monkey-do economics is definitely global. Look for more pressure on interest rates and gold to the Moon.

A visit to two Coin dealers was indeed a pleasant one.
Both had an abundance of gold and silver. Eagles,Krugs, Pesos. Silver Eagles, 1 oz. bullion 10 oz. and even 100 oz. bars. Halfs, quarter, and tenths. In one store, the most 2003 Silver Eagles I have seen so far. Stocking up before the rush? Now some may say this may be evidence of a glut in the market. I think these businessmen are looking to cash in. Betcha they see the rise in sales and do not want to be caught short. Are they betting a substantial rise in both gold and silver or even a shortage? Is supply and demand ready to punch its way threw the resistance level? Both businesses have been around for at least 20 years and family operated.
I am truly positive.
Slingshot-----------------------<>

I drop in on the local coin shop once in a while to look and drool. The owner said that he has been out more frequently than ever and has to replenish stocks more often in recent months. Maybe it's not so much of a "glut" but rather stocking up due to increased activity - at least in my area. He also mentioned that there has been a lot of turnover as more people are in need of cash and it tends to sell quite well. I did notice a lot of turnover in the US pre-1933 gold coin too - and that isn't even the PCGS slabbed types either. Uncirculated Liberty gold and Morgan silver dollar coins are what I tend to focus on myself. Now if only I had the funds - hmmm...

- Black Blade

http://www.financialsense.comsnippit:

With little exploration success since the 1960s and many of its fields showing signs of decline, Saudi Arabia is having an increasingly difficult time keeping production flat. According to energy investment banker Matt Simmons, head of Simmons and Company International, many of the country's aging fields are showing increased water cuts. Water cuts, water produced along with crude oil that is later separated, are a sure sign that a field is headed into decline. The country's largest field, Ghawar, now produces over 1 million barrels of water a day along with its nearly 4.5 million barrels of crude. With Ghawar accounting for 60% of the country's 7.5 million barrels per day of crude production, there is little hope Saudi Arabia can keep production flat if Ghawar continues to water out. Since Saudi Arabia cannot invest the billions of dollars needed to maintain current production and develop smaller fields, Ghawar has assured the world high oil prices are here to stay.

Goldilox:

Bill Powers excellent article on the state of the Saudi oil industry.

Black BladePardon me, for I am fixated on the problem of states that are unable to pass a budget. With the revenues down the choice is either to raise taxes or to cut state sponsored programs. They will raise or impose new taxes. But Nevada with an brothel tax. Puts it right up there with the beer tax, and cig tax. Oh! those sin taxes.
What if they decided to use gold as a form of payment?
Tenths, quarter and half ounce gold coins. Hold the gold as it appreciates and report to the IRS the Fiat value of the transaction and cash in the real value before a 1099a would have to be used. Is this not the same as cashing in at a bullion dealer? Following the Federal Guidelines.

Excuse me, fellow Knights and Ladies for treading into a controversial subject. Must be the Sailor in me.
Slingshot------------------:0)

Listened to some of a speech by the President given Tuesday. He addressed the growing Guerilla warfare now going on in Iraq. His voice (to me) was angry, bitter, but doggedly determined to stamp out the insurgent Iraq's and bestow democracy to the area. His tone, I thought, seemed scolding.

Now I don't mean this to be a politic diatribe, so in a few more lines I'll get to the economic points.

But the speech made me think of something Bill Bonner had written today. It said in effect, that the United States was now pushing democracy around the world like mobsters push "protection" on the neighborhood: Take it, or we'll burn your house down.

By the way, isn't the word IRAQ contained within the word, QUAGMIRE? And isn't the presence in the first going to lead to the second?

Historians suggest that the great inflation and stagflation of the 1970's was brought about by the "Guns and Butter" economy of the Viet Nam War era. Well, it's even worse today! Now we have "Guns, Butter, and Debt!"
No good can come of these adventures paid for with more debt. Thanks to those on this website that keep us focused on Gold to protect our accumulated wealth and saved purchasing power, from the ravages that are now, continueing, and will worsen.

Now, public presure is mounting for the U.S. to intercede in the Liberian problem. The administration is thus far resisting, but my gosh, is there no hell hole in the world so deep that someone won't want us to jump in?

---------Gdome

A Nation of One (msg#: 105299) said, "What I did was merely point out that it makes much more sense to believe that the effects of an adult male's actions are intended, than to believe that they are the result of ignorance or lack of ability, particularly when the man is highly qualified in the area of his profession." I don't know ANO, but that in it self sounds like a conspiracy theory to me. :) I can't see the differentiation you're trying to establish. I don't think there is any. No doubt you have noticed, as does Glennh10, that yesterday's conspiracy theories are today's facts, and today's conspiracy theories are most likely tomorrow�s facts.

I agree with G. that the posters on this site do "pick the economic/monetary issues". But I'm not sure if they are picked "clean" with regards to abstract thinking. Much is said here, about the mechanizations of financing. And I truly want to learn and know more about these mechanizations. But I'm not sure if anyone can put on blinders, so to speak, and continue to keep economic/monetary issues separate from the effects of world events. The issue of GATA should be a wake up call that we need to look at the bigger picture: who controls what and why. The why of course would be the entry into "abstract thinking". When I read the posts, I can't help but wonder what the "the rest of the story" as Paul Harvey used to say, is. How have the mechanizations of the finance/monetary issues been molded by extraneous events? What really caused this and that? Where's this all going?

For example, much has been discussed about gold being that entity which secures a value for your efforts. Fiat and paper-gold, secures a perceived value. The word freedom, I believe, has been associated with the ownership of physical gold. All this is well and good. I surely agree with owning gold. But I can't help but feel that this may not materialize given man's desire for, the greed for, power and control.

No one here, I believe, will argue that commerce is now geared to and is becoming more geared to a digital currency: People want a digital currency to conduct electronic transactions for the sake of convenience. Bankers want a digital currency for the sake of power, a cashless society: you cannot buy or sell anything without going through a bank.

At this point in time, physical gold has not been made into a digitized currency. It is still difficult, though not impossible, to track a gold eagle in your possession. And I believe that without the banks having the ease of ability to track and control gold in your possession, gold will never be allowed become the "security of value" nor will it be allowed to increase in value, especially to the lofty levels many hope for. (I have other reasons, but for now, this will suffice.) But the absence of digitized physical gold may change soon.

Perhaps you have read of a device called Radio Frequency Identification (RFID)? It's a device, presently on the market, which is the size of a grain of sand and includes an antenna and can be activated by a nearby transmitter. Activation of the RFID triggers information, which can include the item number and name, manufacturer, purchaser, dates, and present location. Gillette Razor Company has begun placing and testing these RFID's in their products. [url]http://www.rfidjournal.com/article/articleview/258/1/1/[/url] Michelin Tire Company is in the process of embedding the RFID's into their tires. Benetton, the clothing manufacturer, attempted to do the same until negative publicity de-fused the issue. http://news.zdnet.co.uk/story/0,,t269-s2133031,00.html Also see http://www.nocards.org/AutoID/overview.shtml

So, how long do you think it will take for a law to be enacted whereby all gold pieces shall have embedded, within themselves, an RFID? (This, obviously, would be different than paper-gold.) Far Out? Some thought man would never fly. Once gold can be tracked to the individual person, then, I think, it will be allowed to find its value. I don't like this scenario, but for now, I don't see any other way. I would hope that gold would remain free, independent, and sovereign.

A possible prevention to the digitizing of physical gold could be that the powers-that-be not want to expose the preceived thought that gold is limited in supply. (Which I don't necessarily agree with. Reasons later.) Once you start tagging all the above ground gold, you'll come close to finding out how much is out there, of course, you won't know how much can be found. How important is this I don't know, but it's a thought

Question remains, can we prevent the digitizing of physical gold from happening? It's a question of control and privacy.

Symbolises the deep frustration, of a major part of the muslim community (1,2 billion souls), towards "the" dollar as symbol par excellence of "american-ism". In a recent survey on many ME universities, young intellectuals express that strong perception of the dollar, "printed" into omnipotence, whilst they become more aware of the fact that they are the owners of the "real" oil value, getting scarce. Note that the Palestinians, recently got 1 Billion $ as a starter for the truce/armistice (?). This is adding to the general frustration that everything and everybody can and is been bought with the dollar. A similar sentiment was (is) to be found inside Russia.

Chinese are much more pragmatic and not emotionally focused on the dollar as such. Don't know how Japan might react when (if) there come signs of dollar-demise ?

Main frustration lies into the fact that it is impossible to *exit the dollar*, in separate factions. But all those who wish to exit the dollar-system, know it should be done through Gold...with the major help of Gold ! Gold War...>>> political wars.

That's why FOA explains why and how the present (old) Gold-Market should have to implode first, that will set off a chain of events that will propel investors into using the euro as a world reserve, leave the dollar and ignite the down spiral of the dollar-system ($/IMF).

The Gold dinar is an expression of wanting to have Gold traded as an asset and not as another currency. This must be backed officially by ECB/BIS policies (mark to market).

The "impatient" gold dinar screams for help and broader (euro) support imo. How cautious does the oil for Gold has to proceed as for the timing of the paper-goldmarket implosion ??? Has the Iraq invasion delayed (complicated) the ongoing modus operandi ??? Who knows ?

After all, the one ounce Gold Eagle does state $50 dollars on it and as the US government determines what a dollar is - well, who are we to argue eh? I mean they wouldn't want us to lie about how much was earned right? So I would be mighty tempted to choose the face value of the gold coin over the FRN value for reporting purposes. I mean, the government wouldn't lie would they? Shocking, shocking I say!

Or as in the movie "Maltese Falcon" where the police chief in the casino reponds "I am shocked that there is gambling here" when informed of the illegal activity while at the same time is handed his night's winnings. ;-)

- Black Blade

The EU-12 agreed to abandon VAT (value added taxes) on all "investment" Gold !!! Your investment Physical Gold in Possession AND your Physical Gold trade is NOT...noooooottttttt, TAXED !!!

WHY HASN'T THIS POSITIVE FACT NEVER BEEN DISCUSSED FOR ONE SECOND OVERHERE ??? Fact AND Positive !

It has been posted by our Giant, Randy Townie, as * EU GOLD DIRECTIVE * (LBMA) by Douglas Beadle, N.M Rothshild & Sons Limited...

Owning Physical Gold Officially in Possession, in Euroland, is NOT a crime, illegal, anti euro or any other negative, possibly associated with it ! I want to emphasize that the euro is a Gold Friend and NOT burdened with 40 years of Gold confiscation. Not one single soul, overhere, would even suggest that *Gold* is to be or shall become ,"controlled".

On the contrary, marking Goldreserves to the *** MARKET *** is an unbelievable strong signal that there is (remains) a very well defined, historical, *trust* into an outlined future for, at present, UNTAXED Physical Investment Gold (not jewelry) ! The 1% VAT didn't last for more than one year and was quickly abandonned when less Gold was accumulated for that reason !!!

It should become clear by now that it is ONLY the dollar that is "hostile" towards Gold and NOT so for the rest of the world ! Isn't this of utmost significance for Gold's future, Sirs, Ladies ?

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

A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.

-- Alexander Tytler
--------------------------------

Looks to me like we are already in the early dictatorship stages.
Oh well! Future dictators and their corupt cronys will likely accept gold as payment for services rendered, so get you some.

Cheers

http://www.kansascity.com/mld/kansascity/business/6214025.htmSnip:

"...
Just three months ago, American persuaded its labor groups to take $1.8 billion in annual cost reductions as part of the company's plan to reduce expenses by $4 billion annually. Nevertheless, analysts say American must continue downsizing if it wants to survive current turmoil in the aviation industry.
..."

Sundeck: It ain't all over yet for the airlines...

http://worldnetdaily.com/news/article.asp?ARTICLE_ID=33372Snip:

"...
Either way, the consequences of the coming debt crash after the greatest credit expansion in history, delayed over decades of political expediency, banking manipulation and media camouflage, could be a disaster on a scale never before witnessed. It will give countries no choice but to buy gold, which, by then, will take over as the only game in town.

In fact, this exodus of capital into the metals has already begun on a very careful, very measured basis. Nations are now starting to follow a pattern repeated throughout history, one that truly affirms gold as "history's currency."

But time has not yet run out, and you would be wise to consider the dilemma of the swelling dollar. Because, if the foregoing has demonstrated anything at all, it's that the buck truly does stop with gold.
..."

Sundeck: A brief summary of where we're at and why...

RE: Liberty Head (7/2/03; 01:21:25MT - usagold.com msg#: 105324), On Democracy, RE: Goldendome msg#: 105319

Democracy is the dictatorship of the majority. Granted, it is, as Hayek puts it in "Law, Legislation and Liberty", the only way to peacefully get rid of dictatorial majority.
Only the rule of law, the supremacy of law, can make democracy bearable. But even the rule of law is only the supremacy of law in the sense of Gesetz or loi or lege, not in the sense of Recht or droit or diritto. Rechtsstaat, Etat de Droit still doesn't give supremacy to Recht and Droit but only to Gesetz and loi.
The rise of the Welfare State after (the abolition of the gold standard (which abolition made unrestrained gvt spending possible)in) WW I was a milepost in the decline of the democratic ideal.
Only the restoration of gold's monetary value (through the gold standard or the ECB's idea of freegold) can re-establish democracy.

http://www.moneymanager.com.au/articles/2003/07/02/1056825429880.html
Snippit:

The past two years have proved not only that sharemarket busts follow booms as surely as night follows day, but also that reports of the death of gold were premature. The recent rise in the gold price to about $US352, after four years in a trough below $US300, has sparked renewed interest in the metal as a sound investment.

While timing the peaks and troughs of market cycles is a mug's game, the sheer unpredictability of financial markets in recent years has underscored the importance of maintaining a diversified portfolio, and that still includes a smattering of gold.

Research by actuary David Knox of PricewaterhouseCoopers (PwC) found that a small amount of gold in a diversified portfolio acts as a buffer against extreme negative returns from traditional assets. This is because gold returns have little or no correlation to returns from shares, property, bonds or cash.

The effect of gold is different depending on the period examined, but Knox found that the inclusion of gold in a portfolio has little impact on overall returns and significantly reduces volatility. In other words, investors reduce risk and sleep easy at night with little or no reduction in their financial rewards.


Black Blade: Nothing like a little gold for portfolio insurance in this market. The recent economic data has not been encouraging and the long touted "economic recovery" is doubtful.

http://www.futuresource.com/charts/multicharts.asp?symbols=TYXY%2CFVXY%2CDX1%21%2CGC1%21.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=12&go.y=10Long bond hovering around 4.6%...doesn't appear to want to sail UP through this level as easily as it went down!! Gold/Dollar benign at present... Bond futures negative, $/Au may be lagging a little, we'll see.

From a today link
"Saudi Arabia also has a high level of domestic debt (around 100% of GDP) which it hopes to pay down."
Another reason why the Sauds will not want to rock the financial boat of one of their biggest customers? The US.

Anyone know a good anti bush forum somewhere so we can reccomend it to those who come here in the mistaken notion that it is a topic here?

"...sounds like a conspiracy theory to me. :) I can't see
the differentiation you're trying to establish. I don't
think there is any. No doubt you have noticed, as does
Glennh10, that yesterday's conspiracy theories are today's
facts, and today's conspiracy theories are most likely
tomorrow�s facts."

*** Of course you may be right. But in referring to Mister
Greenspan, I was commenting on the actions of one man. My
point was simply that the results of a grown man's actions
tend to be consistent with what he intends. And that
someone well qualified in a profession does not tend to get
results that he doesn't want. I was saying that the
destruction of our nation by economic means is intentional.
Whether it involves a conspiracy is another question.

if u are concerned about them and dont want them use a moicrowave as that destroys them! microwaveable fiat money hahaha !

Please can anyone tell me if there is any government (country) that is not faced with a debt? (Maybe China?)

cockerel1

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

So save your strength -- call us today!

I heard an interesting quip on FoxSports radio last night. Supposedly, Bill went to the White House yesterday, but was refused entrance because he carried NO ID. Tom Ridge had to fetch him from the White House Guards. Maybe he needs an RFID? Then again, maybe we're about to get them courtesy of Microsoft.
One might guess the Justice Department is "making amends" to Microsoft, given Al Gore's recent election to Apple's board. If the Demos are courting Silicon valey, what better weapon to join the PPT than Mr. Bill, who is not very well liked in Silly Clone Valley.

http://biz.yahoo.com/rm/030702/minerals_korea_gold_1.htmlSEOUL, July 2 (Reuters) - South Korea, one of Asia's major gold importers, said on Wednesday it would allow gold-based bank accounts....

The change, announced by the finance ministry and to take effect on Thursday, follows a decision by South Korea to suspend for the next two years consumption tax on gold trading for institutional investors and jewellery makers and traders. But private customers will still have to pay the 10 percent value added tax (VAT)....

The Korea Futures Exchange said on Wednesday trading in gold had jumped to over 1,000 contracts since the tax change on July 1, from virtually nothing before.

The finance ministry said in a statement it would allow gold banking, such as gold sales, gold loans and gold-based savings accounts, from Thursday.

The accounts, which mirror those available in Japan, allow investors to take positions on gold price movements...

----(see url)------

The bigger they are, the harder they'll fall. Fortunately, there is no incentive here for the "little guy" (individual) to be drawn away from his tried-and-true old sources of metal in light of these new developments in institutional "near-gold".

R.

http://www.business-standard.com/today/story.asp?Menu=19&story=17721(excerpts:)

July 3, 2003 -- Imports of gold, silver, raw and waste cotton and machinery and electrical goods have risen in May this year, pushing up the import bill for the month. The oil import bill, however, fell 9 per cent.

Gold and silver imports rose 137 per cent to Rs 2,915 crore in May this year from Rs 1,200 crore in the same month last year.

I completely agree with your logical and reasoned assessment about restoring democracy, unfortunately our political future will continue to be more strongly determined by emotions than by rational thought and hard data. Unless some benevolent extra terrestrials take over our government, there will be no self-imposed limits on government spending, ever.
There is a gold/silver lining to this dark cloud, though.
The emotional thinkers will soon become passionate about gold and silver.
Us nerds will have our revenge.

Best wishes to all.

... and bad day for Austria!

On the second day of Silvio Berlusconi's EU Presidency he already slipped up massively, getting mad at a German Journalist's question. He likened the poor guy to a gestapo KZ warden, conveniently forgetting Mussolini's role in the "3rd. Reich"!
@ Belgian - wouldn't have thought that the rest of the EU's misgivings against this guy would surface as rapidly. Let's move on to a EU wide constitution ... and btw your politicians have been crucifying our conservative party by including Mr. Haider - and they've done it again! To their detriment, I presume ...

Poor Austria, namely Salzburg was a contender to entertain the Winter Olympics in 2010. Vancouver, B.C. has won.

I want to congratulate Vancouver, B.C.! Whistler-Blackome, feels like my second home and only second to the Arlberg - and it's got a lot more gold, which our guys and gals will bring back home - if some of your great athletes will allow for it.

... Ah, shucks - let's just compete for the gold - cb2

I was in a miracle a couple about an hour ago....
Two weeks ago I had a dream about being in a congested place where lots of blue collar workers were coming and going ....( I fit right in ) ....then i was in at a Hospital
with some celebrity type that was being released....because some type of overcoming had happened because of something he and I did together.... I thought about the dream some after it happened and it occured to me that these might be mine workers at the elevators or point of coming and going I saw in my dream.....Just an hour ago I was on my way from a small mining community to my home (70 miles ) and I began thinking about that dream 1000 yards from the driveway to the WEST ELK MINE....and I was contemplating the meaning of that dream when I came up on the entrance which I usually pass doing about 70 mph.....WHile I pondered the dream a car coming to the edge of the road caught my focus and since I was thinking about the dream I stayed focused on that car.....then the car nudged out a little .....then two or three things happened.....

the driver of that car ( i was going 60 ) lost all sense of self preservation or became completely blind .....or I became invisible to him.....or something took over the controls of his brain , commandered the car.....and he drove right out in front of me,,, Anticipating that something spritiual might be taking place , I chose a point behind the car and drove my car behind him and back onto the road ....he went on without looking back or perhaps caring.......

As I traveled up the pass....I contemplated what had just happened and estimated that the driver of the other car's life had been spared because of only the circumstances that were occupying my mind at the time.....

I also recalled that a Police officer with the highway patrol had done the same type of thing to me 3 weeks ago outside Flagstaff on my way to Phoenix / I was also then in exceptionally dialed in on what eventuality of stupidity was presenting itself before me and unfolding before my very eyes in that situation as well.....As I held these thoughts and drew the relationship between the two incidents, It dawned on me ........that someone is trying to kill me ....SO I MUST BE GETTING WARM....as I PRESSED IN ON THAT THOUGHT ....I began reviewing somethings that I was engaged in at the time.....One of them was transporting a large check that was sent to the wrong adress that I had to retrieve for very important investment purposes.......GOLD .
THE OTHER THING OF SIGNIFICANCE THAT I WAS IN THE MIDDLE OF TODAY IS the following that I think we all should take note of .........

Hecla MINING and Coere D'alene are acting up ......especially Hecla......the last couple of days Hecla is up about 15%........
FOr your further enjoyment , GO to FUTURE SOURCE and take a look at the monthly chart of SILVER.......
THEN to get a more emphatic picture go to the SEPTEMBER MONTH /Contract and look at the MONTHLy CHART.....
THERE is quite a screw / WOUND SPRING FORMATION in that SEPTEMBER CHART......Larry Williams says that sometimes there a significance in these well developed SPRING FORMATIONS>...........
NOW I'm going to the BANK.....

GOD : THANK YOU FOR SAVING ME THE TROUBLE OF AN ACCIDENT TODAY AND FOR PROTECTING MY UNDERINSURED VEHICLE (LIABILITY ONLY /I own my autos)from unknown damage and thank you for protecting me and my future and the future that I see for my kids from those in this WORLD that oppose themselves....

YOUR KID

Small, insignificant correction, that perhaps you already realize--the quote: "I'm shocked, shocked to learn that gambling is going on in this establishment," is actually attributable to Claude Raines character Louie (the police chief) from the movie, Casablanca, 1943. Being a Bogart fan myself, both movies are filled with wonderful lines, as is, Treasure of Sierra Madre in which Walter Houston plays the old miner, and has several memorable quotes about the value of gold, along with the other cast members, including again, Bogart.
Best to you.-----Gdome

http://www.ess.ucla.edu/faculty/sornette/prediction/index.asp#predictionThe above link is another prediction of coming heavy downturn of the stockmarkets. Has anyone seen it before...? ...and has anyone any comments.

NEMO

Yep, I was a bit tired and could not remember exactly. My mind went blank on that one. Treasure of Sierra Madre is one of my favorites too. In fact I recorded it.

- Black Blade

I cant comment on those predictions but would just like to say that I have asked Didier to apply the same computations to Gold.He said he will try and do that and assured me that putting some money into Gold is a very smart move indeed.
Keep checking that site for Gold.

http://asia.reuters.com/newsArticle.jhtml?type=topNews&storyID=3020306snippit:

U.S. Suspends Military Aid to Nearly 50 Countries
Tue July 1, 2003 11:22 AM ET
WASHINGTON (Reuters) - The United States on Tuesday suspended military assistance to nearly 50 countries, including Colombia and six nations seeking NATO membership, because they have supported the International Criminal Court and failed to exempt Americans from possible prosecution.
As the deadline passed for governments to sign exemption agreements or face the suspension of military aid, President Bush issued waivers for 22 countries.

But the 22 countries did not include Colombia, Bulgaria, Estonia, Latvia, Lithuania, Slovakia and Slovenia.

Goldilox:

I seem to remember from historical studies that one of the reasons from becoming a citizen of Rome was to obtain immunity to prosecution from any allied (conquered) governments. Hence, the carrot was dangled to slaves who fought as gladiators.

Nemo: thanks for the link. I passed it along to Adam Hamilton who has done some research and invested some monies based on the VIX index which is mentioned in the article you linked for us. I haven't studied it yet but will. This doesn't mean I'll understand it or be able to say anything intelligent about it but I will study it as I'm always trying to further my technical analysis knowledge. Thanks

Cometose: Wow! I'm glad you are okay and still with us. Be careful, everyone! I know I want to live long enough to see how this whole thing plays out. I also want to see the POG and POS much higher, no matter what economic scenario evolves.
As Cometose mentioned, the POS was active today but, as usual, the only explanations have been technical in nature, as in...the price of silver edged higher until triggering buy stops taking the price higher to...etc. At least that's all I saw.

For those who always insist that the trading in silver is most always buying/selling between the commercials and the non-commercials, I agree. For those who insist that the commercials always win and the non-commercials (speculative funds) always lose money, I'd mention that as of 6/3/03 the COT reported the big commercials net short 42,323 contracts (futures only) and the non-commercials (large specs) were net long 20,748 contracts.

As of 6/24/03 the numbers were....

Commercials still net short 28,010 contracts
Non-commercials still net long 9,756 contracts

So, if the POS is now in an uptrend, whose gaining and whose losing? Of course, these numbers don't include options or really indictate how much of the so-called commercial position is really a hedge against bought and held physical metal (not much I'd guess) but imho if the POS continues upward while the commercials are net short, how can so many well-know silver analysts claim that the commercials always take money away from the speculative guys? Just one man's opinion, as always, and a contrary opinion at that.
Thoughts or silver news?
Rich

http://www.traders-talk.com/site/show_article.asp?id=952 Snip:

Incredibly, now that the state of Illinois has floated bonds to buy stocks for their pensions, we see that General Motors will now do the same. Borrowing money to buy stocks leverages your bet. By definition, buying stocks on margin. When an individual does it, we call it speculation. When a state or corporation does it, we call it..... investment?! Pity our poor tired and conservative analysis, but we do not see much difference. So, where are the assumed gains going to come from? Probably not stocks and possibly not at all. Long ago, we claimed that the pension story would gain in importance as time passed. Well, time is passing and the story is taking on more weight. If another bear market leg takes form, the story will become a pressing matter as corporations and public entities as well may finally come to the realization that the money will simply not be there for future pensioners.

My thoughts: Wow! Maybe Belgian is right and total default is our fate.

The only comment I'd have - this prognostication is still shy of any bear market trough, as valuations still seem too high!

... and as my latin is rusty, I seemingly recall Ovid's - Aurea Prima - ok, I'll spare you the rest of his bountiful hexameters, as you may know 'em better ... though, let's pray for a new golden era, correcting the all the wrongs of the fiat regime ... 'nuff said! cb2

Hopefully, i'm baaaaaack!

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

Although the stock market has done well recently, there is another bull market that is ongoing that few on Wall Street are talking about. It is the rally taking place in precious metals, foreign currencies, select commodities (energy being one of them), and especially in junior mining stocks. Euro-denominated debt, especially government bonds, are up between 10-15%. The HUI is up over 35% from its March low. Natural gas stocks are up between 20-30%. Small cap natural gas stocks and junior mining stocks are up even more. Several small cap juniors are up over 50-60% this year. The bull market in "things" still continues to roll on; it is just that nobody is talking about it.

Black Blade: A good article tonight by Puplava. Just look at the gold chart and think back to about the end of 1996 when Robert Rubin and his band of hoods took up the cause of the "strong dollar policy" and then look at late 1999 where the spike denotes the Washington Agreement and the beginning of the end for producer hedging, and finally look at the beginning of 2001 when the rats left the burning ship as the tech bubble burst, an economic recession began, and the "strong dollar policy" slipped from their grasp. Now consumers are left holding the bag going deeper in debt to finance their lifestyles. It should get rather "interesting" soon enough. As always, get outta debt and stay outta debt, stash enough emergency cash for several months� expenses, accumulate Gold and Silver portfolio insurance, and start a storage program of nonperishable food and basic necessities.

http://personal.news.yahoo.com/us/news/ratings/getavgrate.html?locale=us∝=news&rateid=afp/20030702/us_economy_states&type=T&cat=1519&ncid=1518Snip:

But most populous US state was just one of six that failed to pass a full spending plan ahead of the July 1 start of the new fiscal year, while at least 46 of the 50 states are lumbered with crippling budget deficits, experts said.

"It's ironic that almost all states in the world's richest nation are broke, and California, the wealthiest among them, is in the worst shape of all," said University of Southern California politics expert Sherry Bebitch Jeffe.
**********
Misetich

The desired economic recovery pumped up by Treasury Snow is not evident at the state level, cities level, federal level and it will get worse as the shell games being played to hide the true deficits will be disclosed bit by bit

All On Board The Gold Bull Express

http://ad.doubleclick.net/adi/N2870.ny/B1157483.2;sz=1x1;ord=2003.07.03.03.28.35?Snip:

DETROIT (Reuters) - Hefty cash rebates and interest-free loans failed to deliver a full-throttle increase in U.S. auto sales in June, as demand remained tepid in the face of the sluggish economy.
...........
That would be up from a rate of 16.1 million vehicles in May -- thanks to what analysts describe as an unprecedented blitz of consumer incentives -- but essentially flat versus 16.3 million in June last year.
**********
Misetich

Another bad sign for the US economy - Housing and the auto industry have been the last glimmer of hope. Is it sustainable? Chances are NOT!

All On Board The Gold Bull Express

http://cbs.marketwatch.com/news/story.asp?guid=%7B573AFE82%2DD151%2D4252%2D9128%2DE14C21B0751D%7D&siteid=mktw
Snippit:

Is the stock market being manipulated?

Is the Pope Catholic?

The latest evidence of manipulation came Monday, the last day of the quarter. On that day, the majority of mutual funds beat the market. While that would seem to be a mathematical impossibility, researchers take it as evidence of a manipulative practice that is known in the mutual fund world as "marking the close." The SEC defines "marking the close," which is illegal, as "attempting to influence the closing price of a stock by executing purchase or sale orders at or near the close of the market." Right before the close, in other words, funds will place buy orders on stocks that they already own. That will cause the prices of their stocks to rise and thus make the performances of their funds look better than they otherwise would.


Black Blade: This is nothing new to most of us of course. On a daily basis one can see massive buying of stock index futures right about 5 am est if the "fair value" is deeply negative which helps to keep the indices from falling off the charts, and in the last half hour to hour and a half of market trading hours the same thing occurs if the indices are negative or sharply lower. It is quite suspicious of course because much of this activity occurs on little if any news that could warrant such stock market moves. Some will attribute this to the actions of the President's Working Group on Financial Markets and others will attribute it to other market movers. Regardless, it is interesting how many times the activity seems to suddenly stop once a certain level is reached (for example 9100 on the DOW). A couple of days ago it could have been attributed to "window dressing" by funds (or as in the article "marking the close" being just a part of this), however, now we are in the Third Quarter and the excuse today is putting new retirement fund money to work. Illegal or not, the funds have nothing to worry about as the SEC is essentially a toothless tiger and will do nothing whatsoever. Meanwhile, the sheep are being set up for another shearing. Even the insiders are selling at a furious pace.

http://money.cnn.com/2003/07/02/technology/att_wireless.reut/index.htm
Company will let about 3 percent of its work force go as it continues to trim costs.

Snippit:

NEW YORK (Reuters) - AT&T Wireless Services Inc. will shed around three percent of its work force this year, or about 1,000 jobs, as part of an ongoing cost-cutting program, according to a published report Wednesday.

Black Blade: There go 1,000 nonessential "phone bones" to the "growing "Bone Pile".

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=3&u=/nm/20030702/bs_nm/health_baxter_outlook_dc
Snippit:

NEW YORK (Reuters) - Baxter International Inc. said on Wednesday it would cut 2,500 jobs and miss its 2003 earnings forecast, marking the third time in four months it reduced estimates as intense competition hobbled its blood therapy business.

Black Blade: There go 2,500 blood soaked nonessential bones to the growing "Bone Pile". Tomorrow we get the weekly first time jobless claims data. So far we have had 19 consecutive weeks above the recessionary 400,000 level.

I know this goes much further, but with all the talk of late.. a good quote from FOA:

"If I had a nickel for every time we thought the dollar was finished, I would have a bunch of nickels! Remember back in the early 80s or even further back into the 70s. All we heard was how the dollar was finished and going to crash and burn. Books about hyper inflation and the need for gold / swiss francs were all over the place."

and other famous sayings:

"This time it's different."

Maybe it is, maybe not.

Jim Puplava has a interesting silver article that he wrote on his website.Its on the front page upper left corner.21

Cometose, I know ALL of us are glad you are A-OK and may you always drive in safety.

Military bases will be closed under BRAC, which is a realignment of the armed forces for efficency. This should begin in 2005 but it is my understanding that Rumsfield will opt for sooner closures. Again the politicians will argue for the importance to keep the bases open within their districts. One of the considerations is the ablity of the displaced work force is to find work in related industry or to have an industry move to that location by using tax incentives. Will there be enough related industry to go round? And if so, will the tax incentives be enough to intice them to build new plants or relocate. Norfolk,Alameda,Pensacola, were three of six aviation depots for the miltary to be closed. The Army and Air Force will also take hits this time. The economic impact on towns or cities when loosing a major employer has to be great.
So looking over the horizon more jobs will be lost.

Is there plenty of pork? Yes. Just noting more to go on the BonePile in the future.
Slingshot------------------------<>

Amen.

http://groups.yahoo.com/group/gata/message/1572Newmont fails to get deal with bullion bankers
and so puts Yandal into reorganization:

http://groups.yahoo.com/group/gata/message/1572

To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

http://quotes.ino.com/chart/?s=NYBOT_DXY0One things has become glaringly obvious these last several Week's. I'm referring to the "downspikes" on the Dollar Index as seen on the 15 Min Chart. "Someone" wants the Dollar at these levels while the Market is seeking to trend higher.... Who? I haven't a Clue.
On another note, Non index currencies, AUD and ZAR to name two, are outperforming lately...a 30%+/- uptick on the Dollar in 12 Mth's doing nothing for their respective Gold prices.

Topaz,

Agree. Certainly seems like "someone" wants the dollar to hold for a while...but compare the present situation with the fall since Apr 01 (see INO Max chart)...the last "step" lasted nearly three months and the one before that nearly four months. Is this one any different? Doubt it?

I would imagine there would be lots at stake if the dollar declined "too quickly"...whatever that means. Hence I suspect there are probably "agreements" around a few places (Japan, China, SE Asia) to ensure that things don't get outa hand.

Does the US have the ability to contain the slide in the USDX all by itself? "Strong dollar" rhetoric? Monetary intervention? How many Euros and Yen, not to mention GOLD dubloons, do they have to sell for dollars?

Does anyone know the mechanics of controlling a currency slide?

http://biz.yahoo.com/rf/030703/minerals_yandal_1.html
Snippit:

Newmont said the move follows an unsuccessful attempt to obtain 100 percent acceptances of offers to buy back creditors' claims, valued in total at $237 million in notes and $200 million in hedge-book liabilities. Newmont said the subsidiary's board had "resolved to place the company (Yandal) into voluntary administration, a form of insolvency proceedings, in Australia as it is insolvent or likely to become insolvent."

Last Friday, Newmont, the world's biggest gold miner, said it had received acceptances for $197 million of the notes and from all but one of the hedge counter-parties. That counter-party holds $46 million of the $202 million of hedge liabilities Newmont wanted to buy back. Both offers from Newmont equated to 50 cents for each dollar owed.

"We are very disappointed that that we were not able to get 100 percent acceptances of our offers to acquire the claims of the Yandal creditors," Thomas Mahoney, Newmont Vice President and Treasurer said in a statement. Newmont also said it is now making an offer to bring Yandal out of voluntary administration by valuing its assets at $200 million, which could leave Yandal's third-party noteholders and hedge counter parties with no more than 40 cents on the dollar. If the new offer is accepted, Newmont would return to control to its directors, Newmont said.


Black Blade: I believe it was Morgan Stanley that was the hold out. Anyway, Newmont can simply walk away while retaining the bulk of the Normandy acquisition without liability and the banksters are left holding the bag � in this case a mine with more forward sold gold than exists in reserves. Looks like Newmont has the last laugh. Just another casualty of forward selling.

http://www.ecb.int/key/03/sp030703.htmExcerpts of ECB President Willem Duisenberg's introductory remarks to the European Parliament during presentation of the annual report:

"...As mentioned at the beginning of my remarks, we are currently experiencing truly historic developments. The dream of a united Europe stretching beyond former post-war rifts is about to become reality. Although major challenges lie ahead, as many of the acceding countries are still developing into fully-fledged market economies, I believe that the signing of the Accession Treaty at the Athens summit in April testified to our joint belief in an integrated Europe. The clear endorsement of the Treaty in the national referendums that have already taken place in a number of acceding countries provides evidence of this commitment.

["Heads of State or Government, at their summit meeting in December last year, took the historic decision to invite ten countries to join the European Union (EU) as of 1 May 2004."]

"...Upon accession, the new Member States will join Economic and Monetary Union with the status of "countries with a derogation", and their central banks will become part of the ESCB. At a later stage, these central banks will become part of the Eurosystem, once their respective countries have fulfilled the convergence criteria for adopting the euro.

"A key priority of the ECB is to have in place the necessary technical and institutional infrastructure to ensure an orderly enlargement of the ESCB and, later on, of the Eurosystem. An interesting foretaste of the new, larger ESCB was provided by the last General Council meeting on 26 June. For the first time, the governors of the acceding country central banks participated as observers in a meeting of the General Council of the ECB.

"With this look towards the future, I should like to conclude my statement. This will be the last time that I have the opportunity to present to you the Annual Report of the European Central Bank, which I have had the honour to preside over for the last five years. I would like to thank you for the co-operation and cordial relations that we have maintained during these years."

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

Simply amazing how the years do fly by. Almost frightening, it is. With the EMU through its infancy, are you now prepared for the challenges that unfold during the next five years in the cosmic blink of an eye?

Talk to the folks at Centennial about a gold diversification strategy that is right for you.

R.

G'day mate,
Dunno about another wave down Sundeck. I'm looking at the Bond Yield/Dollar relationship from the "flight to Cash" perspective and consistent with a deflationary move. If trends don't reverse this incipient Bond Bear may prove to be the undoing of it all...imo.

http://www.ess.ucla.edu/faculty/sornette/prediction/index.asp#predictionNemo,

I have read the paper by Sornette and Zhou a couple of times. Some scant comments follow:

My understanding of what the authors have done...

1. The authors examine the time series provided by various stock market indices (S&P, Nikkei) during times when the indices are declining (anti-bubble).

2. They note that such intervals are sometimes characterised by dips and peaks which appear to have decreasing frequency. (That is to say, that the pronounced dips and peaks appear to be separated by increasing intervals of time.)

2. The authors mathematically model the time series containing these dips and peaks using particular mathematical functions that they claim can represent certain kinds of herd behaviour. Fundamentally, they fit the declining index sequence with a "log-periodic power law" (LPPL) which is just a particular mathematical function that can be used to describe a more-or-less smooth "wobble" with lengthening period.

3. Their primary model describes the major downward trend in the index, but there are many "wobbles" on a finer scale that are not modelled very well. They attempt to improve the fit by superimposing a second LPPL in the model (to give more wobbles).

4. The mathematical models can be evaluated for times beyond the end of the available time series of the market indices. These "extrapolations", they claim, provide a good indication of likely future trends in the market indices, that incorporate certain characteristics of herd behaviour.

5. They attempt to provide greater conviction by injecting "special" noise onto the time series of the market indices, repeating the modelling process, and showing that the extrapolated solutions do not differ very much from the original extrapolated curves.

Additional comments, criticisms...

6. There is little doubt that the time-series of market indices contain "signatures" of human herd behaviour. Therefore, attempts to model the index variations over time using mathematical models of herd behaviour is appropriate.

7. However, while in some respects the behaviour of herds contain many features that appear tantalisingly reproducible (within a single herd, and from one type of herd to another), in other respects the herd behaviour is spectacularly unpredictable.

8. The number of factors that influence the herd and also the number of incipient states in which one subsequently finds the herd are very large. A short historical sequence of just ***one signature*** of observed herd behaviour (the index time-series) almost certainly lacks the information that would allow reliable subsequent predictions of the state of the herd and its new signature (the extrapolated index time-series).

9. While the authors have provided a sophisticated mathematical formalism for tracking some aspects of anti-bubbles, there is no guarantee that:
(a) the aspects of the time-series that drives their models are the ones that will prevail in the future, or that
(b) their models have picked up, possibly very subtle components in the time series, that would cause the (correct) extrapolations to diverge wildly, or
(c) that the injected noise in anyway adequately represents the variability in important herd characteristics, or, in a worst case,
(d) that there are any strong precursers whatsoever within the historical time-series that can be used to reliably identify the immediate future trend and the evolving pattern.

10. What 9(c) is saying, basically, is that it is impossible to predict the future with certainty. And if the future cannot be predicted with certainty, then just how sure are we of our prediction?

11. The one test that they actually show (predicting the S&P from 24 Aug 2002 to 19 Jun 2003, using the data from 9 Aug 2000 to 24 Aug 2002), does not do a very convincing job, in my view. What faith does that instil for the much longer prediction beyond 2005?

12. Furthermore, what does the model say about the end of the bear and beginning of the next bull? I suspect strongly that beyond 2005, the extrapolation continues on its merry, winding, way ever southward - forever more. Is that where we expect the index to go? (This criticism is perhaps a little unfair, in that the authors only intend to model the down-trend,)

13. Finally, I personally found the paper very interesting and the technique may get some bulk future trends roughly correct....but how much better than someone with a bearish view, following the historical trend and running off the end with a wavey pen?

One final note...

14. I worry that the mathematicians and modellers who provide the non-linear/statistical/risk models that underpin the derivatives trade may adopt methods similar to this, but without any clear understanding of the complexity of nature or how stable the dominant "emergent properties" are.

Thank you Sir NEMO for alerting The Table to this work...

:-)

Sundeck

Point 10. should read:

"What 9(d) is saying..."

http://www.financialsense.com/Market/wrapup.htmI particularly liked this quote from Jim Puplava's Market Wrapup:

"Borrowing money to pay your monthly bills is a not a healthy economic sign."

I would love to hear Dr. Ron Paul ask Uncle Al about that during his next Humprey-Hawkins testamony.

Got Gold?

Oh dear...two 2s I see.
I can't even count to three!

...which reminds me of a quote from Warren Buffett:

"There are three kinds of people in the world; those who can count and those who cannot."

...and attempts to predict the stock market remind me of one from Albert Einstein:

"Not everything that can be counted counts, and not everything that counts can be counted."

Good night!

Sundeck

Official unemployment jumped to 6.4%, fisrt time jobless claims rise to 430,000, May's jobless 70,000 higher. Last week's number revised substantially higher!

I bet Alan Greenspan and the boyz and girlz at the Fed are scrambling to the phones for a conference call right about now. Financial media carnival barkers are trying to brush this off as a "lagging indicator" but the hosts aren't buying it! The BLS stats people are probably devising all kinds of new ways to massage the number now.

These numbers are whoppers even for massaged government data. Good thing it's only half a day of trading on Wall Street. "Interesting Times"

- Black Blade
- Black Blade

Oh yeah, Euro markets are not happy and US stock index futures dropping hard. CNBC is bringing on Labor Sec. Elaine Chao in about 45 minutes for damage control and Larry Kudlow is in a state of shock. Quite funny actually. More subdued discussion too but still talking of "second half recovery".

- Black Blade

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=1&u=/nm/20030703/bs_nm/economy_jobs_dcI don't remember this being part of the recovery plan -- I guess I missed something...

Got Gold.

http://www.kipling.org.uk/poems_copybook.htmLimp up to explain it once more.

Guys -- wake up! Somebody tell me what is happening today!

This looks big 5yr 10yr 30yr bonds are being sold off big today.

Happy 4th of July!

http://www.usagold.com/DailyQuotes.htmlSnip:
"Gold, the equities markets, and the dollar traded all over the map in the holiday shortened trading session as hopes of an U.S. economic recovery were dashed by a much higher than expected rise in U.S. jobless claims and higher revisions to previous unemployment claims data. The U.S. dollar won out as a very weak bond auction in Japan found few takers and economic concerns over a weak dollar and strong Euro stoked economic fears in comments given by the German Chancellor Gerhard Schroeder..."

http://www.futuresource.com/charts/multicharts.asp?symbols=TYXY%2CFVXY%2CDX1%21%2CGC1%21.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=12&go.y=10Considering the negative implications of the unemployment data, things remained fairly subdued...until you look deeper! DX was all over the place, the Bond/SM inverse relationship was shattered...and P-Gold performed well against the onslaught. What a Month lies ahead!!

Sundeck: (105368), Excellent work, thank you!

Zhisheng: Great poem from a great poet.

THE GODS OF THE COPYBOOK HEADINGS

Rudyard Kipling (1865-1936)

NOTE: "Copybook" is the British for Notebook; a "Copybook heading" was a proverb or other essential truth that a teacher assigned to his class to write an essay on. The "Gods of the Market" do not refer to the Free Market (there was still little government intervention in Kipling's time), but to fashionable wisdom. I was tempted to put it in the "Historical Archives" tower, because it symbolically describes the cycles of history so well.

The explanation above was taken from a page on Kipling's poetry, but I included it to better put his observations on historical idiocy in proper context

http://quotes.ino.com/chart/?s=CBOT_USU3&v=d3Looks like a Perfect Head-and-Shoulders BREAKDOWN !!!
Look out BELOW !
NOW, can you figure ANY reason to sell BONDS ?
Can you think of a GOLDEN place to place any proceeds ?
Thanks, I knew you could !
Have a GREAT Holiday all.
<;-)

http://biz.yahoo.com/rf/030703/economy_fed_moneysupply_table_1.htmlIn its latest release of weekly stats, the Fed indicated the following changes in the nation's money supply (for the week of June 23):

M-1 declined by $5.2 billion to $1,271.6 billion

M-2 increased by $4.1 billion to $6,050.6 billion

M-3 increased by $21.1 billion to $8,743.3 billion

Meanwhile, the Fed today launched Independence Day weekend with an open market intervention that provided new money for the nation's banking system to the tune of $5 billion through 28-day repurchase agreements and $4.75 billion through seven-day RPs.

For a summary of stats on the Fed accounts, visit the url.

R.

That was the front page banner headline used today in the U.S. edition Financial Times.

Knowing that it is the media that prods along the collective mentality of the masses, I think they broke just about every rule with that one.

First, they used the word fear. "Investors fear..." Any guesses how well that one was digested over breakfasts across the land?

Second, they didn't hem and haw and stutter around about it with "maybe" and whatnot, they flat out said the bond market was a bubble. A bubble. Again, think breakfast tables everywhere...

Third, they actually used the word "end".

Bear in mind that this is no flunky hometown rag. This is the Financial Times.

When the bond market rolls over, you will be glad you have diversified in advance into gold.

R.

http://www.iraqwar.ru/iraq-read_article.php?articleId=9474⟨=enWe have this bizarre story unfolding with the gold (copper) ingots leaving Iraq and now this story of the CIA planting WMD.

How does one confirm this?

http://www.matrixmasters.com/world/america/iraq/wariraq%20home.shtml(JAMES RISEN and DOUGLAS JEHL, New York Times, June 25, 2003)
A top State Department expert on chemical and biological weapons told Congressional committees in closed-door hearings last week that he had been pressed to tailor his analysis on Iraq and other matters to conform with the Bush administration's views...

That's an interesting theory but too many flaws to be credible and the source is somewhat suspect. However, I had wondered when someone would bring up the idea of the US planting evidence of WMD. Such a thing could happen given how government (any government) works. That said, government's like the US don't use their own for "black bag" or "wet work" operations. They use third party sources so as to not leave any "finger prints" and of course to have deniability when things don't work out.

I do find it interesting that the issue of finding WMD is not all that important to most people though some are trying to make it one. Democrats and Republicans were both supportive of the war effort so making it a partisan issue seems to have fallen flat as well. Still, most every so called intelligence agency foreign and domestic had essentially the same information to work with which makes the WMD issue even more problematic.

Of course Saddam could have simply complied with UN demands as outlined in the terms of surrender (Gulf War I) and he woul still be in power. His refusal to comply effectively meant that the first war had not ended until the terms of surrender had been met. If there were no WMD's it makes Saddam's refusal of compliance that much more curious.

In the end the war was really about oil or at least indirectly the security of the world's "gas tank" and the case for the removal of Saddam could easily be made due to national security reasons. That's a consequence of being energy dependent on such a volatile region. Unfortunately the US will always be present in the region because without a secure flow of oil from the Middle East there is no economy. "Cheap Energy" is the engine and lifeblood of economic growth.

Personally I was rather ambilivant about whether the US and its allies went to war but I do understand the pressure to do so. World oil production is close to reaching its peak (Hubbert's Peak) and the only region with any significant potential for increased or at least stable oil production for the next few years is in the Middle East while virtually all other regions are essentially in decline. The last discovery of a "Super Giant" was Canterell Field, Mexico in 1976. Russia has never recovered to full Soviet era production and the Caspian Sea region has been a huge disappointment. North Sea oil production peaked two years ago, and SE Asian oil production is in rapid decline. Meanwhile demand will only increase as Third World nations continue to industrialize.

I suspect that we will see more disputes and wars over diminishing resources such as oil. Oil and gas are arguably the most important commodities in the world today.

- Black Blade

Wolfowitz: Iraq war was about oil
(George Wright, The Guardian, 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. . . . 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." . . . 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." . . . 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. . . . 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.

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

For weeks now, as the unemployment figures got worse and worse we continue to hear how the unemployment rate is a lagging indicator of our economy's health. When the figures improved as they did last week, we heard how it is a good sign for the economy going forward. From these discussions we can conclude: when the figure is bad it means the economy has already taken the figure into account, but when it is perceived as good it now says that the current trough has bottomed, and looking forward we expect the economy along with the jobless rate to improve. That is all good, but one or two weeks still do not make a trend, and to declare the economic weakness corrected is premature. So on goes the spin!

Black Blade: Exactly! It was quite funny to watch CNBC's Larry Kudlow fall into a state of depression when the numbers were released and later in the day he babbled on about how he could see positive items in the report an then spin a yarn about how it was really "good". All the time, the show's host Mark Haines has a look of disbelief at what he was hearing. Labor Sec. Elaine Chao's damage control effort was disjointed and equally without credibility. Then there was a sudden parade of economists presented to babble on about the report as a "lagging indictor" and all will get better in the "second half". Never mind they have been saying the same thing for three years running. That's one hell of a "lag" for the "lagging indicator". Hope springs eternal.

You do realize that the Guardian printed a retraction of that article a couple of weeks ago as Wolfowitz's comments were taken out of context giving a ifferent take. A similar thing happened with some Bush comments at the New York Times. When the comments were read in their entirety it was obvious there was a completely different interpretation. Although I do agree that the war was over oil.

- Black Blade

http://news.bbc.co.uk/2/hi/programmes/correspondent/3028585.stm

http://www.matrixmasters.com/world/america/iraq/2003_07_01_archiveiraq.htmlPlease go through the site and its archives. Perhaps there are numerous distorted stories. There are however some credible sources and a sickening theme that is difficult to dismiss is being presented.

The Iraq situation is not good. We knew that before this site. This site has gathered alot of published material and it is up to the reader to censor accordingly. There is too much information that can be cross-referenced to too many sources for it to be all incorrect.

I believe the US government has gone 'out-of-bounds' on this Iraq situation. It should admit fault and reel this in before it gets completely out of hand.

http://www.guardian.co.uk/corrections/story/0,3604,971436,00.htmlThe Actual Wolfowitz Quote:

Wolfowitz was answering a query regarding why the U.S. thought using economic pressure would work with respect to North Korea and not with regard to Iraq:

"The United States hopes to end the nuclear standoff with North Korea by putting economic pressure on the impoverished nation, U.S. Deputy Defense Secretary Paul Wolfowitz said Saturday. North Korea would respond to economic pressure, unlike Iraq, where military action was necessary because the country's oil money was propping up the regime, Wolfowitz told delegates at the second annual Asia Security Conference in Singapore."


Vanity Fair Quote:

"The country is teetering on the edge of economic collapse," Wolfowitz said. "That I believe is a major point of leverage." "The primary difference between North Korea and Iraq is that we had virtually no economic options in Iraq because the country floats on a sea of oil,"


The following is the Guardian retraction (the next day June 5):

Corrections and clarifications

Thursday June 5, 2003

A report which was posted on our website on June 4 under the heading "Wolfowitz: Iraq war was about oil" misconstrued remarks made by the US deputy defence secretary, Paul Wolfowitz, making it appear that he had said that oil was the main reason for going to war in Iraq. He did not say that. He said, according to the Department of Defence website, "The ... difference between North Korea and Iraq is that we had virtually no economic options with Iraq because the country floats on a sea of oil. In the case of North Korea, the country is teetering on the edge of economic collapse and that I believe is a major point of leverage whereas the military picture with North Korea is very different from that with Iraq." The sense was clearly that the US had no economic options by means of which to achieve its objectives, not that the economic value of the oil motivated the war. The report appeared only on the website and has now been removed.


Black Blade: Those are the quotes by Wolfowitz when asked why Iraq and not North Korea. However, there are those in the news media who look for sensationalism to sell newspapers (it is a very competitive business and they at times will pander to political leanings of their subscribers).

I just saw your last message.

"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."

Was the Vanity Fair article retracted as well?

http://money.cnn.com/2003/07/02/news/economy/jobs_walkup/index.htm
U.S employers still aren't hiring. The labor market is now in its longest slump since WW II.

Snippit:

NEW YORK (CNN/Money) - Two years ago, the U.S. economy was just entering its third -- and probably last -- quarter of recession, and the unemployment rate was just beginning to climb. Two years later, the jobless rate is still climbing. In fact, U.S. unemployment rose to its worst level in nine years in June as businesses cut thousands of jobs, the government said Thursday. Unemployment rose to 6.4 percent from 6.1 percent in May. That's the highest level since April 1994. Economists on average had expected a jobless rate of 6.2 percent. Payrolls have fallen year-over-year for 23 straight months, according to Labor Department data, extending the worst stretch for the labor market since World War II. Usually, by this point in the recession-recovery cycle, the jobless rate should be on its way back down. The last time it rose two years after the last quarter of a recession was in 1982, when the economy was just climbing out of a deep, prolonged slump.

And the unemployment rate, though relatively low by historical standards, may actually understate the labor market's woes. For one thing, many unemployed people have simply quit looking for work, meaning they are not counted as part of the "labor force" and thus are not counted in the Labor Department's calculation of the unemployment rate. If the economy improves, many of these "discouraged" workers -- 482,000, by the department's last count -- will likely start looking for work again, and the unemployment rate will rise.

Meanwhile, 1.9 million people have been unemployed 27 weeks or more, meaning many of them have exhausted their unemployment benefits. According to research by Anthony Chan, chief economist at Banc One Investment Advisors, 43.2 percent of all unemployed workers have exhausted their benefits -- the highest rate in more than three decades. "Despite the fact that the unemployment rate remains low relative to prior economic downturns, the burden on the unemployed population has been the most severe, by one measure, since at least 1972," Chan said. Furthermore, many of the people who do have jobs are working only part-time. According to the Labor Department, if you add all the workers "marginally attached" to the labor force -- out of work and not looking for work -- to all those working part-time and those unemployed and looking for work, the unemployment rate rises to 9.7 percent.

Not included in this group are the untold number of people who have had to take lower-paying jobs because they can't find work in their chosen profession. That trend, combined with all the slack in the labor market, has conspired to slow wage growth. That, in turn, could hurt consumer spending, which fuels more than two-thirds of the world's largest economy.


Black Blade: Aside from the moronic statement that the recession ended two years ago (not borne out by the NBER and based solely on "official" GDP data), the unemployment rate will likely increase further. Capital expenditures are still down and corporate earnings have not improved much not to mention 58% of company pre-announcements (earnings warnings) are projecting a negative earnings outlook for the next quarter. Meanwhile corporate insider selling is at the highest level since 1999. In a word � "grim".

I reckon all official government pronouncements from the President or the Labor Secretary or from Alan Greenspan and Fed regional governors or from the mainstream, sanctioned and sacrosanct media gotta be chewed with a pinch of sea salt. Because you can't swim against the tide when all us peasant folk are said to be at sea(confused and bewildered). But we're between the devil and the deep blue sea if we wish to continue to enjoy the hospitality of the nation that tolerates us. Why should little folk really only expect as much disinformation as they can spare us? Is it really a matter of life and death for the government? Yes and they're in their element taking matters into their own hands when it comes down to national security. So much so, that they'll go to the ends of the earth to find threats to cross swords with, until they become their own worst enemy- working at cross purposes, getting wires crossed with allies and crossing paths with hard-boiled adversaries who have some deep-rooted and golden elements of surprise. Not to mince matters but globalization and gold might not turn out to be so compatible after all?

The Guardian quote was apparently taken from a speech given by Wolfowitz and from his interview by Vanity Fair. I think that Vanity Fair gave the quote in its entirety and the Guardian's George Wright picked out what he wanted to project to his readers. It did cause a stir for a little bit but the story quickly disappeared. Of course if Wolfowitz had made the quote as stated in the Guardian it would likely still be news and Wolfowitz would be working in the private sector by now. ;-)

Anyway, it is interesting now people latch onto political parties/philosphies/agendas like some people do with religion. Such is life I guess. Being neither conservative or liberal I find it all rather amusing.

- Black Blade

http://www.usatoday.com/money/perfi/taxes/2003-07-02-taxcut_x.htm
Snippit:

Millions of taxpayers are seeing early benefits of the federal tax cut, and nearly half agree on a plan for the extra money: They'll use it to pay bills. According to a USA TODAY/CNN/Gallup Poll, more than twice the number of Americans who have seen an increase in take-home pay or who expect an IRS bonus check will pay off bills rather than spend it � 45% vs. 22%. That could be bad news for a struggling economy in need of a new infusion of consumer spending.

Black Blade: And a lot of people are living on debt. Yikes!

Black Blade and others commenting on the yesterday's unemployment numbers:

Everyday in my store I have many unemployed customers. Just thinking about it, maybe a third are unemployed! Most of those don't show up in the statistics because they have never had a job, don't even think about a job, are certainly in no way looking for a job, and probably will NEVER have a job. Many of these are young people in their early to mid twenties, most are married to a spouse of likewise nature, and nearly all have children.

These are the future life-time wards of the state. The people that the politicians and beaurecrats are always wringing their hands about how they must care for those unable to care for themselves. All of these people recieve from the state cash subsidies, rent subsidies, medical coupons, foodstamps, and even in some cases auto repair subsidies so that they may look for a job.

Near the beginning of the month they may come in and check to see if they have "been paid yet" by having me check to see if there is a positive balance on their food stamp cards! Notice the term "paid", that's how they refer to their hand-outs at tax payer expense.

This country in the hands of our Socialistic politicians (fully both parties now) is more quickly than ever becoming more and more a nation of Consumers, not producers as in earlier decades before the Great Depression of the 1930's and the Roosevelt administration, that taught the politicians of both parties that to be repeatedly elected, all you had to do was to promise to the electorate the keys to the treasuries in the name of compassion. When we started down that fork in the road
we branched away from self reliance. Now we have a nation of lazy, drug and alcohol addicted, deadbeats. Uneducated, unskilled, unable to work with others, and expecting hand-outs as a way of life.

I am more than a little extreme in my feeling, but apart from those who are legitimately out of work and really are victims of the New World Order of Globalization Economics-- I for one am sick and tired of paying the way for loosers with no more aim in life than to party all night, sleep all day, and feel because their Americans they have a right to hand-outs from the state and federal Governments. And furthur-more, I am sick and tired of them pushing the Governments furthur towards bankruptcy, and the spineless politicians unable to stand up and say, "No More!" I'll end now, thankyou.--------Gdome

Goldendome (7/4/03; 00:40:22MT - usagold.com msg#: 105398)
===
Perhaps we need something to WORK on again like the CCC ?
Lots of Parks and roads need lots of work !
Perhaps we could get a return for the dole.
BUT, someone would have to teach them to work.
<;-)

You are correct. Work habits for many are none existent. Those of the past, were different people of a different outlook and temperment that built the roads, the wonderful public stuctures, and park facilities that now stand as aging monuments to the work ethic and skills that existed in that past era.-----Gdome

http://washingtontimes.com/national/20030702-113112-8424r.htmHas anyone heard of this organisation?

Snip:

"...
"We're not antigovernment, we just offer a superior currency," Liberty Dollar founder and economist Bernard von NotHaus tells Inside the Beltway, adding that contrary to popular belief the money Americans spend isn't "federal" at all, rather it is controlled by a consortium of international and private banking interests.
"After 90 years of producing this country's current currency, the U.S. government has performed extremely bad, extremely bad," says Mr. von NotHaus, retired mint master of the Royal Hawaiian Mint. "The Liberty Dollar, unlike the U.S. dollar, is 100 percent backed.
"We're advertising that you don't have to use government money anymore." he says. "Now we've got a choice. We're very much like FedEx. What did they do? They brought competition to the U.S. Postal Service. And what happened? The post office improved dramatically, offering new products, becoming market-friendly. Similarly, we bring competition to the economy's most basic unit � money."
Mr. von NotHaus said that if enough people used the debt-free Liberty Dollar, which is 100 percent backed by gold and silver, and 100 percent redeemable by bearer on demand, the national debt can be eliminated entirely.
Current estimates are that more than 30,000 people use the Liberty Dollar, which comes in three silver denominations (coins and certificates) of $1, $5, $10, and one gold denomination of $500. Millions of the dollars are in circulation � many being spent right under the nose of the U.S. Treasury.
"The last place I spent them was at the National Press Club," Bill White, a Web development consultant for political and corporate clients, tells this column. "You can spend them at 7-Eleven, Home Depot, anyplace you like. I spend them everywhere.
..."

Sundeck:

Their website at norfed.org doesn't load, but there is other information at the following sites (and many others):

http://www.zwire.com/site/news.cfm?BRD=1452&dept_id=155076≠wsid=8286192&PAG=461&rfi=9

http://www.nationmakers.com/norfed.htm

http://www.realityzone.com/norfed.html

Small batter versus large pitcher...

Attention TownCrier ... Check your post of 05/14/03 #102819 ... to see if this was ever done .... for the benefit of others here. ski

Re your post #l05398 Aristotle once said in order to find truth we must hear all sides in their most persuasive form. Yours I concur with to a great degree. Too bad most of us on this subject are yelling uphill against a steady wind. And these folks vote too......

As Americans become more and more wards of the State, dependent upon the beneficence of politicians and federal reserve chairmen, we celebrate today our independence from the paternal care of the British Crown. Why did we bother? Our productive classes are now outvoted by an Aristocracy thinking themselves entitled with rights to an easy life. The coming economic problems are a natural correction just as a forest fire clears away years of accumulated deadwood and undergrowth, releasing nutrients and opening canopy for new growth. Unfortunately, when fires are unnaturally suppressed for many years the resulting conflagration takes out even the largest and most healthy trees. Walking the high trail, there is a trace of smoke wafting up from the dry valley below. The wild creatures are beginning to notice and the most alert are beginning to move, soon others will panic. And still only $350 an ounce.

I see that there is now a $25 million price on Saddam's head. It's now been several months since the war ended and we still have not found him! Maybe there never was a Saddam!

With regard to those copper "gold" bars found in Iraq. Probably 99% of Americans couldn't tell the difference between copper and gold. A co-worker (graphic artist) thought the Sacagewea dollar was made out of gold. I persuaded him to buy real gold. He did! He had a winning bid on Ebay for a 1/10 ounce Eagle. But when it came he was very disappointed. It's so small! Maybe he'll go back to Sacagewea's.

I sometimes use an electron microscope in my research. Samples needed to be mounted on a stub and coated with a heavy metal to reflect the electron beam. Gold works best and produces a beautiful if micron thin coat. Well, after multiple uses the pure gold disk used as the ion source was worn out with only an outer rim left. Our technician replaced it and I saw the old one lying on the side. Are you going to throw it away? Yes. Can I have it, I asked? It'd make a nice little picture frame. Yes, she said, it would make a beautiful frame.

I feel a little bad being deceptive. But I wanted that gold. Turned out to be about 4 grams. Images of the movie "Treasure of Sierra Madre" come to mind.

Trying hard not to be a Helot
Max

I do hope that all my American Friends here enjoy their long weekend.

The economic fundamentals, which have been supposed to turn up in the second half - in fact, for every year in the last 3 years - have had a pretty nasty jolt with the unemployment numbers.
Furthermore, it does seem that according to the Dow Theory, the sharp post Iraq rally seems about to have run course. At least the Transports have never confirmed a secular new bull stock market.

The only primary bull market getting increasingly stronger confirmation is the gold market. As Rick Ackerman has so expressively 'minted' it lately - Investment in Gold now is almost a no brainer! The only game left in town.

Happy Indepence Day - and I don't mean in any derogatory way, fellow gold-meisters. cb2

PS:MK,TC - you have mail-hopefully!

(1) The main road in my city is absolutely crowded with cash advance stores. (2)They are housed in buildings that once had long thriving businesses that was there from my childhood. (3)Even though there are many of them in a 3 mile stretch of road, THEY ARE ALL,ALL DOING A THRIVING BUSINESS!!!!
Black Blade, please tell me we are just going down the slippery slope and there is time to turn back!! Don't say we have already fell in to the deep abyss but just haven't hit bottom yet!!
Happy 4th everyone. Enjoy it now before some foreigner sues the government because there is no independence day for Lower Slobovia where they were once from.
Cyberbat

http://www.wanniski.com/showarticle.asp?articleid=2732Interesting discourse ... and while academia is pre-occuppied by finding a solution to the mess of credit (=debit) overindulgence, use the lull to load your life boat with the essentials of surviving the ongoing wealth destruction of the fiat system.
A spare set of oars may be great, though some Louis D'Ors or any other au coins would buy you even more safety in any haven.
cb2

Amen brother!

Sire !

My utmost compliments to Your answer, to my humble
question. I owe You at least 3 (lets count them together) large single malt in the bar on the upper deck.

NEMO

In your post I was not of the impression that you had secured the author's permission for that complete publication. If you have John Bogle's blessing for re-publication, then please accept my apology and feel free to repost. Otherwise, I deem it prudent to respect the final message he conveyed in this passage of his good article: "�2003 Bogle Financial Center. All rights reserved."

Today of all days... let freedom and property rights ring. Can you dig it?

R.

http://www.usagold.com/gildedopinion/assignats.htmlTo help you more fully appreciate the blessings of this special day, it might be useful to review the events of a revolution on the other side of the Atlantic that did not go down as smoothly as the one on this side that we celebrate today.

See the url given above for a view of the rise and fall of the assignats... and the guillotine!

R.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1Interesting RANGE today !
<;-)

Happy 4th Cyberbat,
In my suburb outside Hartford Ct., nice as it is, used car signs are showing up in driveways all over town.
This is new. I am guessing it is a sign consumers finally
are overloaded with cars.

Greetings from Kalispell, Montana. Watched a small parade today featuring WWII veterans; shed a few tears (sentimental fool). Best 2U and yours and I am enjoying the PHYSICAL gold market immensely. No bears yet but lots of pure NATURE. Will toast you a cold one...CM

The trend is your friend for physical AU to defend against a crumbling currency. Working on Another Vietnam style engagement we are? No trifecta yet until Another axis partner falls victim to hubris. Sadly on this day...CM

What would Jefferson and Adams say on this, the anniversary of their deaths?

the best of the holiday to all the real american patriots within these halls.

some within your eastern halls of power may beg (oh, i hope one day soon) to differ with me, but i beleive that you are the real future of your great nation, largely because you embody & exude monetary "good faith"!

buena fe

From the terrific Town Crier link
..This outgrowth was a vast debtor class in the nation, directly interested in the depreciation of the currency in which they were to pay their debts. The nucleus of this class was formed by those who had purchased the church lands from the government. Only small payments down had been required and the remainder was to be paid in deferred installments: an indebtedness of a multitude of people had thus been created to the amount of hundreds of millions. This body of debtors soon saw, of course, that their interest was to depreciate the currency in which their debts were to be paid; and these were speedily joined by a far more influential class;--by that class whose speculative tendencies had been stimulated by the abundance of paper money, and who had gone largely into debt, looking for a rise in nominal values. Soon demagogues of the viler sort in the political clubs began to pander to it; a little later important persons in this debtor class were to be found intriguing in the Assembly--first in its seats and later in more conspicuous places of public trust. Before long, the debtor class became a powerful body extending through all ranks of society. From the stock-gambler who sat in the Assembly to the small land speculator in the rural districts; from the sleek inventor of _canards_ on the Paris Exchange to the lying stock-jobber in the market town, all pressed vigorously for new issues of paper; all were apparently able to demonstrate to the people that in new issues of paper lay the only chance for national prosperity.

This great debtor class, relying on the multitude who could be approached by superficial arguments, soon gained control.

If we re going to be critical of those unfortunte peoples without a job we'd be well advised to check tht jobs are availible. Mexicans are coming nd have come into the country in large numbers. They are saturating the labor market. I know, after the "60's" I had to get it together doing stoop labor for years, even with food stamps I barely made it sometimes. Couldn't be done now, the Mexicans have tight control now.
Picked lot of apples $5 per thousand pound bin, off the top of the tree and no dents plese. They don't pay much more now.

Prices are fixed on what we buy anyway, even GOLD, what a joke. I agree however, nobody should get a free ride, but the boys on the top are getting the bulk of the loot and keeping the border loose to boot.

It was a pleasure...

Looking forward to my malt-counting lesson ;-)



...and Happy 4th July Weekend to all our American Ladies and Knights


Sundeck

So there is a 25 million dollar reward for the capture of Saddam, You relly want to capture him up the reward, lets see to 100 million ,no 250 million, ah what does it matter how much we have a printing press

I apologize for this post if this little tidbit has already been submitted ........


THERE is a rumor floating around the floor of another (K) discussion forum that the CHINEZE government has decided to open the SIVER Exchange on the Shanghai Market on JULY the 8th......

If this news is is fresh......
it could make for a very interesting MONDAY MORNING in the trading pits and on the exchanges.......

THis could give a "NEW" meaning to the term
poor man's GOLD in the land of 1.3 BILLION wise thrifty and hardworking; actually this could turn out to be quite a play

Send all your (CHINESE) people to the market to buy silver

it starts a run on the metal ; all the chinese who were in on the beginning of the squeese ( like owning an IPO in the mid to late 90's) make a small fortune in the metal and then have the foresight to sell their silver at a 200 to 300% profit and then plow their proceeds into GOLD .....

WHat a novel move????

http://biz.yahoo.com/djus/030704/0432000165_2.htmlThe news link.

Jim Pulpuva wrote an article this week about Silver
(catalyst) ...
To help the Chineze cause a short squeeze in SILVER...
....and based on a statistic in the Article about available
supply of GOLD on the COMEX.....

THIS MIGHT BE A PERFECT TIME FOR SOMEONE TO SWOOP DOWN AND
ASK FOR DELIVERY OF 9200 SILVER CONTRACTS........

Based on Thursday's closing price it would take about $ 216 million to corner the silver market......

I'll commit to one .................... contract
Who will take the other 9199????? contracts???????
Any Takers?????????

I've got it !!!!
AL Davis , the TEAMSTERS UNION, and the NFL OWNERS ASSOCIATION can buy the contracts, THEY WILL MAKE A KILLING!!!!!!! Perhaps someone will present this idea to them over the weekend!!!!

What you said, and if wishes were horses, we'd ride.

Take notice -- we *ain't* ridin', brother. Dump the white.

*GOLD*. Get you some. --- Ari

Believing is NOT wishing......

and I believe if I was Warren Buffet or George Soros ,
I WOULD DOUBLE DOWN.......

you know .....as in buying low and selling high.....

Investment is part analysis and part taking the risk....of putting your money where your mouth/analysis is .....After doing one's due diligence .....BELIEVING is the act of STEPPING OUT and taking the risk.....in anticipation of what the data may be saying is an OBVIOUS....coup once the fire gets started.....

The gold to silver price ratio is still 75....which means silver is still way undervalued to GOLD on an historical basis.....rebalancing these markets may be an inevitability of Market forces ........and people of self interest moving in the direction data and analysis of that date lead......

Money should flow to SILVER and to GOLD because they are undervalued in comparison to their paper couterparts which seem to be looking more and more like kindling....

.........and furthermore......

If I was VINCENT ?? FOX and I had 50 million in dollars that I was purposing to convert into something of VALUE ...I would go looking for Hard ASSEt investments....
I believe SIlver mining is one of MEXICO"S big industries , NO? What better way to improve the economy of MEXICO and increase GDP than to cause a self fullfilling prophecy to come to pass in the way of a RAGING SILVER BULL market.....by taking COMEX SIlver CONTRACTS FOR DELIVERY....

THAT WOULD JUST DOUBLE OR TRIPLE, ??????? VALUES of THE EXISTING MINING COMPANIES NOW IN MEXICO.....those silver hoarders hoards....

I would say that there something extremely subtle and volatile in the SILVER MARKEts based on the fact that the spot price for silver has traded in a narrow range these last two years while silver mining companies have outperformed the GOLD MINING COS. despite an obvious 40% rise in the price of GOLD>....SILVER IS BEING ACCUMULATEd...
after they have all of the mining cos' they want ,,,,they will take the remaining comex silver and there isn't a legal thing anyone can do to stop it.......

I like the company of GEORGE SOROS AND WARREN BUFFETT et AL

I *believe* I'll *wish* for a horse.

Now we can ride!

Oooooorrrrrrr,,,, perhaps still we can not.

Soooooooooo,,,,, maybe there's more involved than the mere *believing* in something.

Buuuuuut,,,,, to the extent that *belief* count for anything, I *BELIEVE* in one-way streets.

Or to apply a better choice of words, I *understand* how it is possible for the Gold:silver ratio to grow larger without turning back. That is to say, I have seen unbiased the evidence offered by the market to date, and I accept what it is telling me about the future especially when taken in conjunction with the body of structural changes now being fomented on the international monetary scene. Aye, 'ave you 'eard of the euro, Matey? It'll run (and play nicely with others) on wheels of Gold.

Gold. Get you some. --- Aristotle

Has the free gold market disconnected to the downside?
I don't know anything about silver, but here's one article about gold from the China Daily of May 20, 2003
http://www.china.org.cn/english/BAT/65015.htm
SNIP:
Shanghai Gold Exchange (SGE), China's only gold transaction market, is preparing to allow individuals to trade the metal within the year, sources said.

So the gold market is not yet open to individuals.

A more interest question seems to be the Shanghai POG.
Here's what Dow Jones said on July 01, 2003
http://www.futuresource.com/news/news.asp?story=i4369133298213650496
SNIP:
At 0730 GMT, when Shanghai's spot gold market closed, gold bullion of
99.95% purity was 1.22 yuan higher ($1=CNY8.28) a gram from Monday to end at CNY93.02/gram.
Gold bullion of 99.99% purity was CNY0.93/gram higher from Monday's close to finish at CNY93.38/gram.

Gold was at CNY93.38/gram,
$1=CNY8.28
so how much is CNY 93.38?

CNY1 = $1 / 8.28
CNY 93.38 = $ 93.38 / 8.28 = $ 11,27778 = POG / gram

1 ounce = 28.35 gr
price of one ounce = 28.35 gr X $11.27778 /gr = $ 319.725063

According to the K chart gold was at 0230 New York time on July 01, 2003 somewhere between $347 and $348.

Almost thirty dollars difference.

Why?

Or is there something wrong with my calculations? Is 99.99% purity not enough?

Has the free gold market disconnected to the downside?

You had me worried but......
Minor correction, 1 troy ounce = 31.1034768 grams

Shanghai gold price = 31.1034768 grams x $11.27778/gr = $350.78

Looks like a small premium to NY gold.

Cheers,
Boilermaker

found this;
I play basketball with a guy that is in PLM (Petroleum Land Management), he goes out and gets leases from people like me for the independent drillers as well as the majors. He was telling me today that in his recollection, we never had gas prices so high at this time of year. He also said that one of the companies he worked for a couple years ago was buying up $100m worth of leases from El-Paso and when they did the due diligence that the reserve estimates from different PEs were wildly varying. He said one guy would see X another guy 2X and a third guy X/2, all for the same field......

In addition to this, he says that estimated reserves are way over-stated because when a company gets a field they want to value it for as much as they can. Later they re-asses it's size to be 40-50% of the original when they are forced to begin writing it down. However, at the beginning, the estimates are always way too large. Finally, fields are running out of gas, i.e. peaking much faster now than in the past which just says that the quality of the finds isn't really high.

His personal appraisal of the NG and Oil situation is that we are in for higher prices for quite a few more years. He thinks alternate energy might provide some relief but still believes that there is a serious NG problem and that is his business.

Just thought I would toss that out there for those folks convinced we have huge, easy to find supplies, i.e. WhiteBear......

I should know better than trusting the inside of the back cover of a Lonely Planet Travel Guide ;-}

Cometose, thanks for the heads-up on the July 8th date for silver transactions on the Shanghai exchange. I've been watching and waiting for some comfirmation to these rumors. Glennh10 has provided some substantiation with the link. Thanks!! This may or may not set off the silver bull but it certainly won't hurt.
Happy holiday weekend
Rich

I think alot of people who thought army green was a safe bet for their future are waking up and realizing that you can get killed in the military.Most people who I know who joined did it for the educational benefit programs they offered and the other benefits health, other insurance,etc, now they realize they are being sent to fight and possibly die its a very sobering thought. Military service guarenties citizenship.

yesterday - Beverly A. Carroll-staff writer
"Homeowners facing record property losses"
Property foreclosures in Hamilton county rose 36% from 2001 to 2002 and are on track for another high year in 2003, county records show.
The local increase mirrors a national trend, according to the Mortgage Bankers Association of America. A record number of Americans faced losing their homes in the 1st quarter of this year, compared to the same period last year, according to the association.
"We are getting some economic growth but it's not fast enough," said Bill Fox, director of the University of Tennessee's Center for Business and Economic Research. "What has NOT been happening is the creation of jobs---------etc"
My gold, my guns, this forum; Wealth, security, and information. Dear Santa, I want it all.
Cyberbat

http://groups.yahoo.com/group/gata/message/1574GATA's Reg Howe asks whether today's Americans
soon will learn what their revolutionary ancestors did
about the risks of paper money.


To subscribe to GATA's dispatches, send an e-mail to:

gata-subscribe@yahoogroups.com

If anyone goes to a movie watch the previews the army is running a video before the movies its a slick psych ops production to influence young minds to join. I have nothing against military service but lets give real choices to people.Show some body bags being zipped up'show a vet at the VA clinic whose benefits have been cut and cant get the treatment he needs.Lets show it how it is.The military is a necessity we had a marine who taught phys ed in high school he was still in the corps. and was supplementing his income, he was kinda a jerk he said he prayed for war so he could fight, what a sick mind well I guess he got his prayer answered. Over the last couple of weeks the mining stocks have done pretty well I am still trying to figure if they move like the stock market or if the gold price is there catalyst.One thought if you are a wealthy person and want to take delivery of mega amounts of metal instead of playing the comex game why not buy an operating mine and just keep the metal produced.Why didnt Buffet just buy a mine.He spent a billion for metal plus he has to store it.Maybe someone could tell me why owning a mine was not his choice.21

CometoseHope all had a nice and safe Holiday. We had one incident that was close. As we set off some major fireworks, a small crowd gathered to watch. We had our safety zone and the one time we did not adhere to, it happened. We set off an aerial mortar that climbs to 150+ and bursts into brilliant and colorful designs. This time standing inside the unsafe zone thinking it was on its way up, this baby rose about 30 ft and let loose. There was no time to do anything as the boom and showering sparks engulfed us all.Now the funny part is the color of the burst. Gold and Silver. The two seconds or less all I could say is WOW! Nobody was hurt. Not a burn or scratch. Counted my blessings and retired for the night. If only the POG and POS would explode like that.
Slingshot------------------<>

http://abcnews.go.com/wire/Business/reuters20030705_67.htmlEU Pressures Asia to Allow Currency Rise -July 5, 2003
� By Jason Szep BALI, Indonesia (Reuters)
Snippits: "European finance ministers pressured Asian governments on Saturday to allow the region's tightly managed currencies to rise against the dollar, a move that may limit any damage to Europe's economy from further euro strength.....
The weekend Bali gathering of officials from the European Union, China, Japan and other Asian nations is also expected to stress closer coordination in macro-economic policy between their regions, home to about a third of the world's population.
"European countries are entering into an integrated single market, while we have just started to strengthen our bond market. There will be talks on how to synergise these efforts," said Indonesia's chief economics minister, Dorodjatun Kuntjoro-Jakti.""
* * * * * * * * * * * * * * * * * *
A very detailed and intriguing discussion of the advantages and disadvantages of current and proposed currency pegs and valuations globally. And some insight into the tight peg of the Chinese, Malaysian and Hong Kong currencies to the U.S. dollar.
Indicates bond and currency market realignments must continue as adjustments are made to trade and policy. At least they'll have to appear to sort things out, or what they can while the markets do their thing. Reactive policy versus proactive and overregulation versus moderation- for a continuation of the status quo of unlimited government, growth and profits as the key to progress, quality of life, peace, GDP, standard of living, etc.!

1) Most silver is produced as a by-product of other mining.

2) Most silver mines are not profitable at this price.

3) Mines are subject to politics, taxes, regulations, labor negotiations, power prices, and ore depletion.

4) I guess he didn't want to take such a big risk although Soros and Gates have invested in mines. I believe Soros has invested in a great property that will be brought into production when silver prices rise.


Max

Thnx MAX, Its wild when you can buy the finished product cheaper than it costs to make it.That should tell us something right there,when we can go on the market and buy silver cheaper than it costs most miners to mine it wow.Can we buy corn flakes cheaper than there production price,is there any products or commodities out there that continually sell for less than there cost of production, if we believe the info out there silver and gold have sold below there production cost for years.That means in some way they have been subsidized and if those subsidies are removed they should move to equilbrium price levels,an initial spike then in the long term steady price,lets all catch the initial rocket launch.

Mabry21: Silver is not unique as a commodity selling at prices below that of it's production. Whenever cotton is below about $0.50 per pound or sugar below 4-6 cents per pound they are selling below production costs. Many grains' selling prices are also below the true (unsubsidized) costs of production during some time periods in their marketing year. Government programs insure that the big agribusinesses will not go broke even though the number of small family farming operations has been decreasing for many years.
In the case of silver, most of the by-product production is simply sold at whatever the current market price with the proceeds used to lower the cost of production of the mine's primary product. There are rumors (imho, any unsubstantiated information from any source, no matter how reliable that source) that new mining procedures may produce lead and zinc without also refining the silver from the ore. I can only guess that the lowered costs of the new procedure outweigh the monetary gains of also taking the silver from the ore. Maybe Black Blade will read this and comment on it?
Rich

http://www.safehaven.com/Editorials/corrigan2/070403.htm
Good thoughts on the BIS(Bank of International Sorcerers?)
meeting and reading between the lines of official soundbites
and pronouncements.

From the BIS link;
"Thus, the collected Princes of Paper and Kaisers of Credit pretty much endorsed all the recent Federal Reserve-propagated craziness about administering the whole pharmacopoeia of quack remedies to any(???) economy so afflicted � among them the accelerated reduction of interest rates **for those so able**; to be followed by the monetization firstly of government securities, then of those issued by other entities, and, lastly, of real assets if necessary; this to be coupled with morally hazardous guarantees of support for the financial firms which comprise the central banks� cartel; the avowal of cast- iron assurances as to the extended duration of all such policies; and the possible adoption of rising price level, rather than just inflation, targets."

Does this imply that many countries will now adopt the Fed
measures? Can other countries do it? It is a matter of how much of thier currency is part of global trade? Since the US is just printing up dollars to buy its own debt, is the BIS now stretching the bounds for other countries to break rules as well?
What does "for those so able" mean?

?/curious if anyone has seen a copy of the 8 page SB silver that David Morgan in his July newsletter said was mailed to Smith Barney clients. Its not too often a major brokeratge house puts out a silver report.
its like its top secret ..........

I checked again and found that it is copper and zinc that may be produced with new processing methods that do not recover silver. Again, this is from a good source but not to my way of thinking, substantiated yet. Can anyone add any information here?

I'm also curious enough to repeat the request for any information about the contents of a Smith-Barney advisory about silver. Other than it being favorable toward silver, nothing else was mentioned.

I'm disappointed with those who charge for information and deliver only vague references or the most general of statements without citing any references. I guess when payment is required for the information that we freely share here among ourselves, I hold the paid provider to a higher standard of performance and accountability. I would prefer that if one is going to spout out only bits and pieces of news that these be accompanied by some references or, at least, attributed to a source. Let the reader investigate further if so inclined or let the reader evaluate the information along with it's source. If we can not verify the information, at least give us a clue as to it's source. Let us know whether it came from the townhall, the town bar, the local beauty salon or the town gadfly.

In keeping with this rant, thanks again to glennh10 for the goods (link) verifying cometose's news of silver trading commencing soon in old Shanghai.
Rich

From your comment on the Marine coach and his desire for war I can surmise that you don't know many Marines. It was like old home week at the recuiters office when the first Gulf war broke out. Semper Fi, and live small.

There is an interesting article in the asian times.China and India are building high speed rail lines for Malayasia and both countries are being paid in palm oil for the work.21

I know a few and I think I know what you are saying.But I have heard many veterans say those who want war have never seen war.21 P.S. I was almost in the army myself but was cut loose because of hypertension. So I am not anti military.

Trapper in my last post I did not meen to equate the marines to the army,I know enough marines not to do that,but I did volunteer to be a ground pounder in the infantry so I am not to soft.21

http://www.lewrockwell.com/orig4/hull2.htmlThugonomics 102: 'Significant Volatility'
Budgets Have Busted, and Bubbles Have Burst
by Shelton Hull -July 5, 2003 -Snippit:
"More families have been broken by money than by alcohol, drugs and maybe even domestic violence, and surely much of that self-destructiveness was spurned by the emasculating effect of debt on mankind.
What do we say to the families that picked up another $668 billion in mortgages last year? What happens when they start to act like CEOs and skip out on their debts en masse? Is there any way of actually enforcing all the debt currently outstanding without basically shutting down the economy? If not, then how is that debt managed without undermining the delicate moral and legal framework upon which the concept of debt is based? These are questions that citizens and our government need to be asking now, while there's time."
# # # # # # # # # # # # # # #
By proposing that the U.S. housing market is in serious trouble, the author shares an increasingly global perspective of economic dysfunction. Observers in America and across the ocean who have remained silent will be forced to attest to the fallout until nothing remains to be said or a solid footing is established.
But if the injust continue to hijack the corporate executive class, banking and financial professions and connive monopolistic and predatory legislation, the vessel of government must first be commandeered.
The problems of inflationary money debasement, official conflicts of interest in political and corporate appointments and gov't contracts and in soft money, vote fraud, ever-broadening tax and job extortion and growing governmental expenditures, bureaucracies, perks and pay raises, etc. produces several hideous tumors that grow to the surface for all to see.
If the majority cannot go beyond merely scratching the surface, then economists, bankers, politicians and corporate managers can receive a clean bill of health only if history's newest diseases remain undetected.

http://www.worldnewsstand.net/money/money_quotes.htmSome quotes worthy of USG site?

http://www.harrybrowne.org/articles/julyfourth.htmHi folks. I don't get the opportunity to post often, but I had a moment and thought I would share something that lifted my spirits this weekend.

During my everyday travels I try to connect with some of the younger lads and lassies on a personal basis. I'm talking about the ones who are about 18 to 26 years old - old enough to begin to understand the real world, but young enough not to be too hardened by it all yet. College students are best, as they do tend to be a bit more intelligent. I'm roughly the age of their parents, and it surprises and pleases them when I take an interest in them and their future. Young people need mentors, but there is so much emotional baggage between parents and children that parents can't normally be mentors. Also the young ones really can tell whether someone is full of it or not. I work hard to gain their respect for my opinions, by offering real explanations for what they don't understand about the world.

My secret weapons are Austrian economics, libertarianism, and the importance of sound money to the proper functioning of an honest economy (as distinguished from the mess we Americans have made and are making of our economy). Not surprisingly they have never heard of these concepts in all of their years of schooling, and often they are like a kid in a candy store with these new theoretical tools to use to understand their world. I don't do more than point them in the right direction, really.

I don't always succeed in my efforts, but it's always worth the effort to try. Over the weekend I had a breakthrough with one young lady of about 24. She couldn't understand my lack of enthusiasm for the annual Independence Day celebration. Finally I sent her a link to a Harry Browne article that explained where I was coming from. It was like a veil had been lifted from her eyes, and my spirits soared to realize that we may be gaining another young convert.

You see, I have become convinced that there is no way to turn this boat around. We are going to go over the falls, and the standard of living of Americans and many other inhabitants of much of the Western world is going to plummet as our economies re-connect with reality. Apart from doing what I can to physically and mentally prepare my own, I think it is important to at least mentally prepare as many of the younger generation as possible to understand what is likely to happen and to resist the inevitable urge to invest government with total authority to �meet the crisis�.

I dearly hope the crisis to come is not as bad as I expect, and I continue to hope for the best and prepare for the worst. Join me in spreading the word to the young people.

Got gold. Get yours.

G7

http://www.etherzone.com/2003/henr070403.shtmlDEBT INCREASE AS PREDICTED
By: Ed Henry
As of July 1, 2003, it has been 38 days since the national debt limit was increased and the Bush administration has already borrowed an additional $225 billion.
That brings us to a total of $456.9 billion in new debt so far this fiscal year with one full quarter still to go. Bush is setting a record this year and is well on the way to sending our national debt "to the moon, Alice."
In a former article titled "Medicare," I said: "And if you think George W. Bush has a shortfall, think again. Since Friday, May 23rd until Tuesday, June 24th, one month since raising the debt limit�he has borrowed $143.6 billion�borrowed against the credit of the American taxpayer. Read my lips. By the end of June, just a week or so from now, the increase to the national debt will be over $200 billion in new debt since May 23, 2003."
The hallmark of good research is the ability to predict. In my market research days, I would have been proud to make an accurate prediction, but somehow I do not feel any joy in this one. It should have been much too obvious to anyone following the nation's debt.
Bush has an unlimited line of credit and he's making the most of it. A power granted by the Constitution to contract with investors in the sale of U.S. Treasury securities as long as those creditors have faith in the American taxpayer's ability to pay them back, plus interest.
The real question is�where has this money gone?
First of all, a lot of the most recent debt increase isn't real money at all. It's interest paid to the Social Security trust funds. And it didn't cost the government one red cent. On June 30th, they simply handed the trust funds more bogus bonds that this year amounted to about $76 billion in additional debt calculated as interest against the trust's 2002 balance of $1.3 trillion.
Worst of all, we peons don't have a snowballs chance in hell of getting anything out of this part of the debt increase except more debt.
Stealing/borrowing the Social Security surplus and placing debt markers in the trust fund is one thing, it's part of the Pay-It-Again Sam scam, but adding interest on top of that double taxation is the most heinous crime of all. It is simply piling debt on top of debt in order to maintain the fiction that the Beltway Bandits "borrowed" the excess produced by payroll tax overcharges every worker in America pays. Since this money is not supposed to be used for any other purpose, the only thing the Beltway Bandits can do is to pretend that they merely borrowed it and paying interest supposedly proves that. It's one scam on top of another scam.
The same thing happened last year at this time when in the month of June we were at the debt ceiling of $5.9 trillion and unless it was raised by June 30th, the Treasury would be unable to add interest to the Social Security trust funds. From there, the debt limit was raised to $6.4 trillion. And it was all accomplished on the very last day of the month.
Secondly, and due to a rotten economy, the government has had shortfalls in personal income and corporate taxes for two years in a row. Of course, at the same time they have increased their annual budgets causing greater and greater deficits.
Receipts for this month of April alone would account for more than $100 billion that must come from someplace just to maintain the government's excessive budget. And, if the federal government is suffering a shortfall in tax receipts, you can be certain that every state in the union is suffering the same sort of shortfall.
But states and local governments do not have the unlimited borrowing power or authority of the federal government. That's where the hooker comes in. It allowed the federal government to put the squeeze on states. Here's how it happened.
The federal government hit its self-imposed national debt limit of $6.4 trillion on February 20, 2003, and did absolutely nothing about it. This is highly unusual since raising the debt ceiling is almost automatic. There's occasional bluff and bluster by the political party out of power, but except for the 1995 threats by Newt Gingrich and Bob Dole that caused temporary shutdowns or paid-later vacations for "nonessential" federal employees, this political bluster is usually brief.
With terrorism, the need for homeland security, and a guaranteed invasion of Iraq staring it in the face, the government had every reason to immediately raise the debt limit. After all, the Constitution permits borrowing through the sale of Treasury securities precisely for emergency reasons like this. But they didn't. Instead, they waited 92 days before finally raising the ceiling almost a trillion dollars on Friday, May 23rd.
During that 92 day period, every state and local government in the country suffered from a lack of federal funds promised in the budget. It forced states to raise taxes, lay off employees, and cut programs, particularly social programs. It included state shortfalls in everything from block grant and housing money to Medicare and Medicaid payments.
Most states are still reeling from this and the federal government doesn't seem to be doing much about it. California, our most populace state, has a budget deficit of $38 billion and a likely recall of Governor Gray Davis whom the people just re-elected.
The Fourth Estate has been absolutely silent about hitting the debt limit on February 20th and the 92 day draught that followed, proving once again that the government controls the news.
And most states and local city, county, and other forms of local government are hesitant to complain because they fear the federal government might discontinue throwing them table scraps.
Coupled with the invasion build-up and weapons of mass destruction, it's all beginning to look like a Franz Kafka poem: "In the beginning, they were given the choice of becoming Kings or the Couriers of Kings. As children would, they all decided to be couriers. Now they run about the world shouting messages to one another, messages which, since there is no King, have no meaning. They realize the hopelessness of their situation and would like to change, but dare not because of their oath to service." (Quoted from memory)
None of this fully answers the question of why the Bush administration has found it necessary to borrow $457 billion so far this year with more to come or where this money went to date. And you cannot expect any straight answers from Washington.
It would be nice to know precisely how much the invasion of Iraq has cost us so far, what we've paid for the "coalition of the willing," and how much it is costing us to maintain "peacekeeping" forces in more than 40 nations throughout the world (the real cause of terrorism in America).
Most significantly, it looks like George W. Bush is willing to put all former social benefits on the chopping block�including Social Security�all to build an empire.
"Published originally at EtherZone.com : republication allowed with this notice and hyperlink intact."

http://www.sierratimes.com/03/07/02/article_tro.htmcorrection on the link

I ran into my old 401K plan "advisor" last week on his rounds. How's it going George? Lot's of hand holding? Yah he says, but what else are they going to do? They got stocks. They got bonds. And money markets are nothing, he said with a twinkle in his eye. We all go up together or down together.

Max: Yep, except some of us know about life preservers.

Very slim evidence to come to such dramatic conclusions.

My post doctoral fellow was on a plane from Montana to Washington D.C. on 9/11 and was grounded in Chicago. The next day in the bus station she sat next to a middle eastern man who felt a need to speak with her. She is from west Africa and has a French accent, obviously not American. He was sad and said the Americans will not understand and will blame Islam. It is not against Americans but against the economy. Bin Ladden was just used. It was planned by the Saudi's. He said they had the wrong 5th hijacker who missed the plane that went down in Pennsylvania. He was not part of the plan. The man in the bus station had no luggage, only a cardboard box with a cut flap on the top. He had been on a plane for Washington D.C. but when the buses came he took the one to Canada.

Sorry for the off-topic post.

Snip:

The BIS states: 'One of the most daunting challenges faced by central banks in a deflationary environment is the zero lower bound constraint' - the fact that interest rates cannot fall below zero, thereby weakening the effectiveness of monetary policy.

As the BIS concedes: 'There are limits to the effectiveness of monetary policy.' It calls upon central banks 'to explore systematically, along with fiscal and prudential authorities, the set of policy options available to address deflationary forces well in advance of their actual emergence.'
................
Referring to 'excessive optimism and credit expansion, asset price and spending bubbles, and balance sheet problems that subsequently rebounded on the financial system' the BIS concludes: 'Clearly, the achievement of price stability, with its unquestioned merits, has not been sufficient to ensure the avoidance of financial instability.'

That, in central bankers' speak, is quite an acknowledgement.
***********
Misetich

"Fast Eddie" George is leaving soon - Duisenbeg follows shortly - The Japanese central banker chair has been a hot seat and revolving door - that leaves the master manipulator and the leading cheerleader of the new paradigm, the new economy, the inventor of the productivity miracle, etc. etc firmly at the helm - though someone has overhead him ask for the band to play on as the lifeboats are being borded

All ON Board The Gold Bull Express

http://www.intellicast.com/Local/USNationalWide.asp?loc=usa&seg=LocalWeather∏grp=SurfaceMaps∏uct=HighToday∏nav=noneAny guess on the next NG injection? I'm looking at the EIA numbers,then i look at the map and my brain just locks up!

I'm just learning about the Natural Gas industry but it looks like injections don't matter at this point,it's to late. How about guessing when the country runs OUT of NG?? We barely made it last year thanks to a early warm spring. Looks like we are about 700BCF behind last year.

BIS
The bank suggests that the rest of the world has been far too dependent on the economic stimulus provided by the United States and that the ongoing decline in the dollar is going to make life much more difficult for Europe and Japan.

The report warns that unless other countries supplement fashionable 'structural reforms' with 'more expansionary demand management policies' there must be a question mark over 'whether domestic demand will expand elsewhere, notably in continental Europe and Japan, after a long period of weakness'.
"If trust in the integrity of the capitalist system is crucial to its proper functioning,' says the BIS, 'then it is important that wrongdoers are punished and are seen to have been punished. Given the flagrant excesses of recent years, it is by no means clear that enough has yet been done to re-establish trust in the system," it comments.

The BIS highlights the fact that, although devaluation of the dollar is a necessary part of the current adjustment process (ie, making American exports more competitive and lessening US dependence on foreign funds to finance its imports) 'about half of the US current account deficit today is concentrated in countries whose currencies have closely tracked the dollar'. The main culprit here is China, which, by maintaining its link with the dollar, has now become supercompetitive in international trade.

The BIS warns that this adds to the upward pressure on the yen and the euro. The implication is that the European Central Bank, and individual European governments, should be doing more to boost domestic demand. In which connection it is noteworthy that the German government is now bringing forward tax cuts originally designated for 2005, and Chancellor Gerhard Schroeder last week dropped heavy hints to the ECB that it should ease further.

http://www.globinvestor.com/s&p.htmSome revealing charts
Decades long P/E rates average worth noteing also.

Cytek, I heard we are approaching 3 TCF, which is supposed to be typical levels. Injections have been very big, hence the latest retracement.

HDDs, (hot degree days) only affect NG slightly, as air conditioning usage demands electrical generation, largely from NG. Its the CDDs that can make the price rock, where much more volume of NG is used for heating.

Winter drawdowns are what I am watching for. I'm still holding my 700 NGG4 call option. Hoping for fireworks!

I'm just learning too.

It may be touch and go for NatGas supply. The last three triple digit injections were largely due to a combination of mild temperatures, pipeline stripping, some fuel switching, and a fortunate economic recession. The forecast for July and August is for a warmer than normal period, but then who really knows as weathermen can't predict the weather from one day to the next. Pipeline stripping is nearly over as some minimum pressure must be maintained in pipelines (and this has been used as a source of storage so to speak). Fuel switching (and the shutdown of manufacturing) is not that economical at current prices for oil compared to NatGas. We have been fortunate that the US economy has been mired in economic recession relieving significant demand.

At change in these variables could upset the injection picture. It appears that the only sure thing is that we will be lucky enough to have a deepening of the economic recession to slow demand. However, that could be countered with mild temperatures and a few hurricanes in the Gulf of Mexico could change things in a hurry as production is shut in for days at a time. Meanwhile production rates are fairly low given the low rig counts compared to two years ago and production continues to experience rapid decline. Perhaps more worrisome is the rapid decline in exploration activity as government owned land remains off limits and permits come available to producers at a trickle. The lack of experience energy industry workers is yet another constraint as most have left the industry all together, many for good.

The so called "comfort zone" for NatGas has risen over the years as older power plants are decommissioned and replaced with NG fired power, while manufacturers using NG feedstock have largely shut down or moved offshore. The "comfort zone" used to be 2.6-2.8 tcf just a few years ago and recently has been 3.0 � 3.2 tcf. Even with 3.2 tcf last winter we barely made it as storage fell to record lows. Making it to 3 tcf will be tough this time. Also consider that production costs are rising and credit rating agencies have made it tougher for energy producers to get financing for large scale development.

And I haven't even covered antiquated infrastructure that is badly in need of repair and maintenance, never mind the critical need to build new infrastructure to make supply in one part of the country where the most promising NatGas targets exists deliverable to markets that need the supply. We can write off Mexico as a supplier as they are going to be a net importer of US based NatGas from now on, and we can't count on Canadian NatGas supply to fill the gap this coming winter as they are as bad or worse off than the US in terms of storage this year. It should get interesting to see how this all works out if the coming winter is anything like the last one.

- Black Blade

Black Blade,I was wondering if you knew about the situation at the Davis Besse nuclear power plant.I live about 15 miles from it they found a serious leak that had been leaking for some time.This plant has never lived up to the hype toledo edison put out when they built the plant.It seemed never to operate at more than 50 percent and edison always maintained its coal fired plants here in fact with no nuclear the coal is supplying the power here I imagine.The condition of this plant was pretty bad and it seems the company covered it up, a employee finally blew the whistle on them and lost his job.The community owes him a debt of gratitude if other nuclear plants are in this shape we are asking for trouble.21

http://biz.yahoo.com/rf/030706/economy_dollar_election_1.html
Snippit:

NEW YORK, July 6 (Reuters) - George W. Bush won the 2000 U.S. presidential election by a razor thin margin and some economists reckon that a weakened dollar could put him back in the White House in 2004 with a comfortable victory. On the surface, a weak dollar may not seem very relevant to Bush's re-election, but in the five Midwest states where Bush lost by slim margins to Al Gore it could make a huge difference when Americans go to the polls in 15 months. The falling value of the dollar, which has dropped 35 percent against the euro in the last 18 months, makes goods stamped "Made in U.S.A." less expensive on the global market, boosting exports for U.S. firms that might then need to add jobs.

Bush could win these states in 2004 if voters there view him as doing everything he can to pull the region out of a manufacturing recession. By the time primaries roll around early next year, the benefits of a weaker dollar on the U.S. export sector could be in full swing. Bush won the 2000 election in the electoral college by five votes, and each of these factory-laden states has more than five electoral votes up for grabs. "If this downward trend in the dollar continues, it will start to help stimulate exports, and a lot of Midwest states depend upon them as a key to growth. That is why the (Bush) administration would prefer to see an orderly decline in the dollar," said Paresh Upadhyaya, currency analyst at Putnam Investments in Boston.

So far, U.S. Treasury Secretary John Snow maintains the United States subscribes to a "strong dollar" policy that reflects a strong economy. But comments by Snow this spring that the dollar's decline so far was modest have served to make the "strong dollar" policy ring hollow in markets.


Black Blade: The way that President Bush and Treasury Sec. Snow are touting the "strong dollar policy", I doubt that the Republicans are intelligent enough to understand this issue. The "strong dollar policy" is dead regardless. The current account, trade, and budget deficits are skyrocketing and are absolutely out of control but if not for currency market intervention by Japan and that other major countries are as worse off economically the "strong dollar" is strong only in the sense it has no other currency to fall against except gold.

I understand the plant is still under repair. They are not alone as several other nukes are down for repairs due to boric acid corrosion. There will be fewer nukes online this year as a result.

http://www.chron.com/cs/CDA/ssistory.mpl/business/1979872
Snippit:

Gold, the currency governments hate. Some $645 billion of U.S. currency is in circulation worldwide. We no longer back our currency with gold, but government gold holdings currently amount to 147.3 million ounces. Divide the currency outstanding by the gold holdings and you get $4,380 per ounce. That's about 12 times the current gold market price.

In the late '70s, U.S. citizens were allowed to own gold for the first time since the '30s, and it started trading around $75 an ounce. By 1981, gold peaked at $850 an ounce.

Since then, the amount of gold held by our government has remained constant (although there has been no audit of U.S. gold holdings), but the amount of currency in circulation has soared.

The caution here is very simple. Gold and gold mining shares have been dismal investments for more than 20 years. But the future may be different. Many believe a small investment in gold is good "insurance" against global currency depreciation.


Black Blade: Gold is always a choice form of portfolio insurance. It does not look good for the economy and the economic data is grim at best.

http://www.bday.co.za/bday/content/direct/1,3523,1383280-6078-0,00.htmlSnip:

"...
TOKYO - Japan's foreign exchange reserves set a new record of 545.62 billion dollars in June after the country actively bought the dollar on the foreign exchange market to drive down the yen, the government says.
The reserves consist of securities and deposits denominated in foreign currencies, International Monetary Fund (IMF) reserve positions, IMF special drawing rights and gold.

They rose by 2.53 billion dollars from the previous record of 543.1 billion dollars marked in May, the finance ministry said.

...

Of the June total, Japan's foreign currencies accounted for 526.57 billion dollars, gold 8.51 billion dollars, IMF reserves 7.99 billion dollars and special drawing rights 2.55 billion dollars, the ministry said.
..."

Sundeck: ...and the beat goes on. Does Japan mark their gold to market?

http://www.contraryinvestor.com/mo.htmSnip:

As we have mentioned a number of times, foreign countries are in effect doing a bit of vendor financing when it comes to the US trade imbalance and the global recycling of trade related dollars (global savings) back into US financial assets. At least for the moment, it seems pretty hard to identify just who does not have a vested interest in continuing this great recycling operation.
..................
As a quick tangent, it's somewhat ironic that certain members of the foreign community were at odds with US involvement in Iraq while simultaneously they weren't at all at odds with the financing of that activity, now were they?
.................
To suggest that the foreign community has been a meaningful supporter of the balance sheet expansion of the federal government agency entities over the recent past is an understatement
..............
But what happens as the secular bull market in US fixed income vehicles ultimately comes to a conclusion? As you can see from the graphs and tables above, a lot of folks are lined up on the same side of the trade right here.
..............
***********
Misetich

The mandra for the last 7 to 8 years has been to highlight and compare US vs the Rest of the world economies to justify the evolution of Asset bubbles in the US.

Unfortunately, this self-reinforcing trend of foreigners depedendt on US consumers and US financial markets depending on inflows from foreigners has CREATED the present day imbalances

The CORE argument is which currency should investors use to safeguard themselves? Paper or Hard Assets?

Paper pushers will undoubtedly bring on the argument and sound very persuasive by highlighting the paper currencies "successful" return on investment in the last 20 years or so vis a vis GOLD - However astute investors will quickly realize that the 20 year cycle chosen by the paper pushers is coming to an UGLY END.

The present juggling act by Worldwide Central Bankers will fail miserably - and investors realize there is very little they ARE ABLE TO DO, as they have already consumed most of the ammunition (Interest Rates) at their disposal. What have they have left is unconvential means to sustain an avalanche of unsustainable financial mess. read DERIVATIVES

Thses untested "unconvential means" will create unforseen side effects.

For paper pushers non-believers stay tuned.

BUY PHYSICAL GOLD - THE ULTIMATE STORAGE OF WEALTH

All On Board The Gold Bull Express

The long and the short of it is... yes.

To all: I might hasten to add that just as central banks have matured and increasingly are measuring their gold assets in this fashion, individuals in turn are increasingly advised to measure their wealth in their own holdings of gold in secured ownership (physical, not contractual).

Call USAGOLD - Centennial today to declare your own definitive movements toward financial Independence (in a similar spirit as your recent July 4th celebrations). As with most facets of life, resolve and desire count for nothing in the absence of taking action. Will you be the bold and visionary "founding father" for the paternity of your family's wealth, or do you deem that to be a role best left for others to fill? Who would that be?

Centennial stands ready to assist. The call is free. Ask for George, Jonathan, or MK. 800-869-5115

R.

The World Gold Council reported today 'the Canadian central bank sold 114,064 ounces (3.5 tonnes) of gold in June, leaving holdings at about 300,000 ounces on June 30.'
---
No matter. You couldn't previously and cannot now receive any of the true benefits of gold ownership by proxy. If you do not own it yourself, what exactly do you believe you have? If you think you do have something thereby, then what are you entitled to, comrade? How and when might a guy file his claim?

Don't be a man defined by paper and shared losses. Be a man of principle, principal, and property. Be a man of gold.

Call Centennial for current gold prices and for consultation on a portfolio diversification strategy that is right for you.

R.

canada's cabal seems to value the nations energetic abundance (oil/gas/electricity) ... as good as gold.

continued trade with the world doesn't seem to be one of their present worries

http://www.bls.gov/news.release/empsit.t12.htmU-6 Total unemployed, plus all marginally attached workers, plus total unemployed part time for economic reasons, as a percent of the civiianian labor force plus all marginally attached workers......9.8 9.7 10.6

I would even view these numbers as "conservative," hence I would suspect the real unemployment rate to be around 13 to 15%. TPTB are trying to retain a "confidence factor" like any other con game.

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

Save your strength -- call us today!

http://www.usagold.com/AMK/MK-gold.htmlUpdated.

New Quick Notes.
New Stein.
Comment on additions to the national debt:
"Checking Barron's Market Lab this
morning we see that the U.S. National debt now stands

at 666.1 trillion -- a cool $643 billion higher than one year ago....................
What me worry??...........We're in a recession, our military is engaged in
Afghanistan and Iraq, the unemployment numbers are through the roof, and the
dollar's in the tank but you know and I know that things will be better second
half of the year. Right??......... "Honey, just buy stocks and quit the
complaining," she said impatiently...... "Yes, dear," he said a bit abstractly
putting aside his copy of Kindleberger's "Manias, Panics and
Crashes".........

http://biz.yahoo.com/rf/030707/markets_precious_comex_1.htmlNEW YORK, July 7 (Reuters) - Weakness in the euro rubbed off on COMEX gold Monday as trading reopened from a 3-day weekend, also losing money to equities amid Wall Street hopes that a U.S. economic rebound will soon start feeding company profits.

"I think it's going to be under pressure for the rest of the day unless there's a reversal in the euro," said a COMEX gold broker.

...The euro fell to a 2-month low at $1.1337 early Monday, reducing the bullion buying power of European investors.

-----(see url for more)------

It is conspicuous that the media focus is ever on the bullion buying power of FOREIGN investors during dollar weakness, whereas strength in the dollar is NEVER correlated with similar notions that AMERICANS might want to seize upon their own opportunity to get gold on the cheap.

You can spend time wondering why, or you can pick up the phone and utilize your latest turn at having bullion buying power.

R.

From that Kindleberger book just mentioned....from chapter six titled "The Critical Stage".....

"Expectations in the real world may change slowly or rapidly, and different groups may wake up to the realization- sometimes at different rates and sometimes all at once- that the future will be different from the past. The period of distress may be drawn out over weeks, months, even years, or it may be concentrated into a few days. But a change in expectations from a state of confidence to one lacking confidence in the future is central."
page 83 of the Wiley Investment Classics edition

Rich: I guess all that's lacking is the trigger or "displacement" since all the other elements Kindleberger speaks of have already occured or are now in place. It's scary how all the recent events (past few years) have fit so perfectly into the model Kindleberger describes. Maybe there's nothing holding the economy together other than the overwhelming view that it can not fail. Unfortunately, this too shall pass.

http://www.usagold.com/wgc.htmlWGC reports in relevant market news:
"The US bond market rallied on the back of the unemployment figure, but was then hit by a sell-off from Japanese banks who took advantage of the strength to make some sales, given the welter of Japanese bonds currently being issued. The 10- year Treasury note finished the shortened week in the US on a yield of 3.64%, the highest in almost two months. The German 10-year bund is yielding in excess of 3.8% and some technical analysts are now suggesting that the three-year bull run in bonds around the world is drawing to a close."
---
Click url for a summary of the past week and a chart showing spot gold prices on the rise over the course of the past year, August 2002 to July 2003.

R.

There are two Central Bankers out fishing. They are using Gold as chum to attract the larger fish. As the day goes by, one banker notices that there are more sharks than fish in the clear water. He asks, Think we used too much? The other replies, Hmmm, maybe we should retrieve some of it.
Just then a Mako shark pops his head out of the sea and says, Come on in boys, The waters fine! Both bankers point at each other. YOU FIRST!

Yepper, Monday Humor. ;0)
Slingshot----------------------<>

If other countries follow theU.S. lead and lower rates is this not a policy of support for the U.S.D . One of the ways the dollar would be driven down is by borrowing cheap U.S.D and buying other countries bonds with the proceeds. None of the major nations rates look that attractive,although Australias dollar has made very nice gains against the U.S.D over the last couple years and there 10 year offers over 4 percent return so watch the Dollar from down under I guess.21

There is little doubt amongst the esteemed collective wisdom of this forum that physical ownership of the yellow metal is a good thing. Less obvious are views regarding the portion of gold that might be appropriate in one's liquid holdings. Would anyone care to share their opinion in this area? 10 percent? 50 percent? 100 percent?

- Survivor

http://www.usagold.com/gildedopinion/siebholz.htmlExcerpt:
"Today it is becoming apparent, even to the uninitiated that the holding of physical gold is the only real protection of wealth. Inflation and the ever more rapidly recurring volatilities in the worlds currencies, floating against each other without any kind of "golden" anchor, are not only undermining confidence, but have cost the holders of the US dollar already more than 30% of buying power vis a vis the �. The CB's would have to do a lot explaining to do if it was discovered that this perceived wealth is actually squandered in the protection of a hegemonial reserve system based on the US-Fiat-Dollar, a system which is clearly now suffering from extreme overindulgence."

Click URL for full commentary.

Thanks to Dietmar Siebholz (a former German investment banker) and Florian Riedl-Riedenstein (a former Austrian investment banker) for their kind permission to publish their recent views as our latest addition to the USAGOLD Gilded Opinion.

R.

I believe the common wisdom around these parts would be "as big a percentage as your understanding allows".
You used the key word "liquid". Gold is liquid. You can go to the local coin store and turn it into fiat whenever needed. Since that is the case, why hold (or even worse, let a bank "hold" for you) more currency than you need for transactions in the near future?
Keep only the chips you need to stay in the game. Take all the rest off the table. I won't go into the hundred reasons why this is a superior strategy for privacy, security, and purchase power protection, as well as capital apreciation. Weigh the pros and cons to yourself and to your principles of storing all excess production in a private, liquid, secure form. I have. Except for loan payments, I will not give my excess to a bank to "hold" for me.

Can you be a "millionaire" when the only dollars you have are in your pocket? I believe the answer is yes.

PercentI have long cast away the percentage profile. When you think in terms your purchase of gold is with worthless paper. All that is left is how much you can acquire. At bargain prices.
Slingshot---------------<>

The size and composition of your stash will vary greater depending on what situation you are planning for. For example, if you believe that the economic decline and dollar meltdown will cause a stagflationary period, then you would want to accumulate mostly gold and as much of it as possible in order to protect your purchasing power. When you needed cash, you would then liquidate a coin or two for fiat to make purchases. This scenario implies that the basic distribution networks of food, energy, commerce, and banking will remain intact and relatively undisrupted.

If you feel that a dollar meltdown will cause a greater upheaval, or at least that you THINK it could, then your strategy would be to accumulate gold AND silver as well as some other items. Under the meltdown and possible hyperinflationary events, the fiat dollar becomes worthless. Commerce then comes to a halt, food distribution is interrupted at least and halted at worst, and the problem becomes so big that the governments national and local collapse. Commercial transactions and purchases then devolve to the barter system. In this situation gold is helpful, however, most local folks won't be able to make change for a gold piece as its price would be rather high. Silver is necessary in this environment along with other goods that would act "like" money, ie, ammunition, liquor, medical supplies, excess food, etc. With silver, one can make small purchases, without giving valuable equipment or supplies. Save gold for large purchases and use silver for everyday transactions. Under these conditions, an accumulation strategy I would suggest would be to hold gold and silver in a ratio of 10 oz of silver for every 1 oz of gold you have.

It all depends on your situation and current finances as well though.

Many have asked the same question as to how much (percent) of one's holdings might be placed in gold. We've often heard the number 5% invested as insurance against any kind of currency crisis. Others have thought of the other extreme, even to the point of maxing out the credit cards (using depreciating dollars) to purchase gold (an appreciating asset). I believe this might be a little extreme. I'd suggest somewhere in-between.

Physical gold possession used to be promoted mostly as an insurance against currency depreciation or any type of economic disruption. Might it now also qualify as an excellent investment for those simply seeking appreciation of capital?

As good as gold might prove to be as both of the above, silver might also be considered. However, storage must be considered as the weight and volume of silver per dollar invested is considerably more than that of gold. Also, those of us still buying silver would kindly ask that you not buy too much as there is not a great amount left to go around. Thanks (;>)
Rich

It really depends on your comfort level. It also depens on whether you believe in gold as an investment, as speculation, as portfolio insurance, as a safe haven currency, or any combination. From your handle I suspect that you may be leaning more toward insurance.

It used to be old hat for investment advisors and portfolio managers to recommend at least a 5% physical gold position for portfolio insurance. Some have upped that to 10-15% while others have abandoned gold in the politically correct belief that all resource investing is somehow "environmentally bad" or even "unpatriotic". Most of that mentality os simply unabashed greed by Wall Street and their paid financial media carnival barkers who push stocks like used car salesmen.

That said, I look at gold as primarily a form of portfolio insurance to counter the upheavals in the stock and currency markets that inevitably occur from time to time. While some adhere to the 5% rule, I take a 30-35% position in a split between physical (bullion and rare pre-1933 U.S. coin) and profitable unhedged gold mining shares (strictly unhedged and debt free). But that's just me. I know others that have anywhere between 0-100% of their investment in physical gold.

As I said, it all depends on your comfort level. Having at least some gold (silver and platinum included) in your portfolio certainly smooths out the volatility of the wil swings that occur as Wall Streeters play their games in the "big casino". Currently precious metals are trading at bargain prices and now is as good as any to add to positions.

The "dollar cost averaging" method is quite useful (perhaps the only real useful strategy from Wall Street). A periodic purchase of precious metals over time is one excellent strategy to add to physical precious metal positions since it is very difficult to "out guess" the smart money that moves the markets. It is also a good strategy as one can accumulate over time as one can afford it without buying during a panic when prices are soaring due to some unforeseen geopolitical event or as the "Lemmings run to and fro" looking for safety when equities crash or the dollar plummets.

If you are still unsure, you can always call on the "castle guards" at USAGOLD and talk to someone there to discuss what you expect precious metals to do for you and yours. Maybe together you can figure out a position that meets your needs and fulfills your expectations. A little research on market history and how precious metals work as an alternate currency. Heck, maybe you would want to read Mike's book "The ABC's of Gold Investing" as a starting point. Take care and good luck.

- Black Blade

The following popped into my mailbag today courtesy of the DailyReckoning:

Snippit:

"If foreigners understood our policy is what I think it is," said Ned Davis to Barron's, "that is, making cash trash, why would they keep their $3 trillion [net investment in dollar assets] in this country? At the point they realize this, this nice decline in the dollar all of a sudden becomes tremendously bad."

"A dollar crisis is only a matter of time," adds Marc Faber.

All over the world, no one wants the relative trade disadvantage of a strong currency. Even the Swiss have announced their intention to knock down the Swiss franc, if necessary. "We're ready to step in and intervene if the strong franc hurts our exports," said the president of the Swiss National Bank recently.

As his contribution to worldwide inflation, people expected Wim Duisenberg to lower short-term euro rates. But Thursday came and went with no rate cut by the ECB, which probably means that the dollar will continue to decline against the euro in the short run. In the long run, all paper currencies will go down against gold.

"I suppose that hard assets, including precious metals, commodities, real estate, art, etc. will appreciate not only against the dollar but also against all currencies," Marc Faber explained. "In fact...commodity prices have already increased - in some cases, sharply - from their lows in the 1998-2002 period."


Black Blade: Yep, who can argue with that? The printing presses are running hard and the Asians and Europeans can't stand their own currencies � so much so that they will even take dollars in trade. At some point and maybe sooner rather than later � gold will rise regardless of the direction of the dollar. Meanwhile physical demand continues to outstrip new mine supply and central banks in the far east are more than happy to accumulate the "barbarous relic". After all they have enough dollars and more is coming in all the time due to the rocketing US trade deficit, and who wants currencies like the Yen when there are so many zeros on it following some number (any number � pick one as it doesn't matter), and the Yuan is pegged to the dollar but it doesn't matter anyway (why worry as there is a virtual flood of dollars to weaken that currency by simply following the leader and letting the dollars fall into the Chinese central bank vaults). Just trading a few of those Capitalist leaflets called dollars in exchange for gold is easy enough and that's why they are doing it. As I said, they have enough dollars and with the printing presses ready to heat up some more I am sure that they need the room in those over crowded vaults.

http://www.chicagotribune.com/business/chi-0307060409jul06,1,6321066.story?coll=chi-business-hedsnippit:

Driven by rapidly rising home prices and a booming mortgage loan market, expected to top $3.34 trillion this year, according to the Mortgage Bankers Association of America, lenders and law enforcement officials from Atlanta to Los Angeles are battling a wave of mortgage fraud rings.

"With the overheated mortgage market, you're going to see a tremendous amount of mortgage fraud," says Arthur Prieston, founder of The Prieston Group, a San Francisco-based legal, insurance and consulting firm specializing in mortgage fraud. "Ten percent of all mortgages--and probably higher--have some form of misrepresentation."

Goldilox:

The article goes on to describe "fraud rings" of lenders who write $zillions in loans, close shop and reopen under new corporate charter - I assume leaving Fannie and Freddie to absorb the risk. Kinda like stock analysts egging their clients on to buy 100+ P/E "bargains".

http://www.cftc.gov/dea/futures/deacmxsf.htm I just found this today, that is, it's usually available on Friday nights and gives numbers as of the close for the previous Tuesday. However, last Friday and over the weekend the numbers posted were through 6/24/03. Now we have numbers through 7/1/03 (last Tuesday). I guess whoever posts the numbers took the Friday holiday and the weekend off. Hey, why not, the 4th of July comes but once a year.

The silver changes are unusual. The non-commercials, for the week, were net short 880 contracts and the commercials were also net short, for the week, 630 contracts. These are futures only positions. Of course, since the longs and shorts always balance, this means that the nonreportable (small specs) category added a net of 1510 longs. David versus two Goliaths!

Now we watch the silver spaceship approach, yet again, the top end of its impulse power. Will this be the attempt that launches into warp drive over $5.00 or is this just one more knock, knock, knock on the door? Paper trading must be done dispassionately but even though I'll soon be hedging again, I'd love to see my soon acquired puts expire totally worthless.

Physical too expensive now? Not imho. I wouldn't even question the price of physical, at least not until Silver has her own ticker space next to gold, the S+P, the Cow and the Nasdoggie. When Maria smiles while mentioning silver and Joe Kernan looks stunned and confused.. "Silver, silver! really now, did anyone in the world know anything about silver before it hit $50./ounce? Anyone? It's not even on my computer screen! Hey, brain, what's silver used for, anyway? Just teeth fillings, right?"
Rich

Many good and thoughtful responses. The repy by Econoclast: "Keep only the chips to stay in the game. Take the rest off the table." I will add, Yes-- Out of sight is hopefully out of reach, off the bank account balance--away from probing eyes, off the 1040 interest draw that mat attract attention to a balance that might be easy pickings in some unknown future prosecution.

Physical is buried treasure. -------Gdome

Agree completely with BB though prefer the Jrs. due to the urgent need of majors for reserve replacement. Be careful 'cause all those dogs don't hunt.

Also recommend "prime farmland" (highly)....CM

http://www.morganstanley.com/GEFdata/digests/20030707-mon.html#anchor0Latest Roach
!!
>
\_/

I know very little about the futures market, how it operates. It's very confusing to me. I read about it, and think I might understand puts and calls, longs and shorts. I've never been able to figure out "hedgers", "commercials", "dealers", etc. (good guys?/bad guys?), and how it all affects the "real" metals market. I still operate at the "grocery store" level, buy something, pay for it, and walk out with it. Beyond that, I'm lost. Is there a simplified source of info that explains this part of the gold/silver market, the basic lingo, the COT (might as well be Greek), preferably not 100's of pages long? Say, something like a "Futures Cliffs Notes" type of thing?

Thanks.

The Economist, discussing the global economy, said at the end......"Savour this moment while it lasts."

Survivor, "conventional wisdom" suggest a 5% to 10% allocation for "insurance purposes." Do the opposite, 90% to 95% physical and 5% to 10% cash in the event you need toilet paper when times get rough. History offers us similarities as to methodology of currency destruction but nothing close in magnitude, so throw out conventional wisdom as we are approaching a system limitation.

Try "How the Futures Markets Work" by Jake Bernstein. It's available in paperback and is written for those starting from scratch which is exactly were everyone starts.

It is a fascinating game but be forewarned that it is a vicious, not always fair game in which the majority of players lose money. It is a zero sum game in which the amount won equals the amount lost but usually there are many losers for every winner. Buying physical is the sure and safe route. Physical possession will probably also yield more profit for the vast majority, even futures' traders positioned on the long side.

As most here know, I'm a concrete finisher and part time trader attracted by the challenge of the game and attracted by the leverage involved however, THERE IS A RISK OF LOSE in futures trading. The leverage is a two edged sword, in that, only a small amount of $ can hold a position that can yield huge gains (far in excess of the margin) OR inflict huge loses (also far in excess of the margin if one is not careful).

I do NOT recommend this game. However, I don't recommend stock ownership either. This is no reason not to understand how these markets work. Should we intentionally remain ignorant of anything dangerous? Start with Bernstein's book. It was written for beginners, to be understood by those with no previous futures knowledge.
If the game entices you, please be careful.
Rich

this might be a function of the amount of information that you have or that you are digesting on the economy ....and the reported vulnerabilities our economy and the global economy has ......Exposure to Interest Rate reversals and or Derivitives risk...... and Market risk......STOCK MARKETS and REAL ESTATE MARKETS and ENERGY MARKETS .....How much of this is networked and exposed to DOMINO risk....

If your information is good the you also have to wonder
if the information that we have on the surface which exposes these possibilities is just the tip of the ICEBERG...

Is it a house of cards??????? what would it take to shake the foundation enough to bring the whole thing down on itself (DEBT RISK ) through some event that causes Perception of confidence to turn into fear........
Lack of confidence and fear turns into panic sometimes and spreads like a virus ..........this may all be very well managed and artificially treated but i don't think the people at the FED can stop deflation of its effects....

May be they can ....but with the printing presses rollling has they have been it will probably cause run way HYPERINFLATION...... your first guess at percent may change as these things unfold ......and be amended over a period of several years......

I have my doubts as to whether the interst rate sensitive sector of BONDS STOCKS AND REALESTATE MARKETS can be managed effectively to head off a collapse....in one or all of these markets.....I don't think we have a very good barometer on the health of the REAL ESTATE MARKET based on the CONSUMER's collective BALANCE SHEET......I believe that the JAPANESE Markets are a pretty good history (LAST 12 YEARS) on where we are headed.....THINGS THAT HAVE a lot of DEBT attached to them might deflate.....and that may precipitate a domino....THE FED"S HOPE RESTS ON THE CONSUMER CONTINUIING TO borrow to keep things moving....
IT looks like all this is about to fall on the CONSUMER's reaching his last breath....Someone mentioned an interesting statistic this morning about BLS estimates of
UNEMPLOYMENT>.........that's a significant warning and like everything else that comes out in a report maybe known fabrications where you get back to wandering how much of this ICEBERG is visible and how much is unseen and unknown..

Anything that you want to add to this picture that subjects it to an unknown event or unseen vulnerability ( something not taken into account by the actuarial tables Insurance companies /risk analysts building hedge platforms try to establish based on statistical studies)....puts the whole picture out of skew and its assessment more difficult.
You might have to do what SPOCK did in the (whale movie) STAR TREK movie and "take your best guess". It's really a gut wrenching process..........

That's pretty amazing, as I scan today's posts. All one just about ONE SUBJECT. (And not a war, or great celebrity passing, etc.) Rare, indeed.

My take on the percentage question has always been: "What would you tell someone to do with the OTHER 95%? (50%, 20%, whatever...)

It's a valid question, because just about every other holding must pass through the gauntlet of >>> PAPER, DOLLAR, BANKING SYSTEM <<< before value can be realized and spent on your, yes, SURVIVAL.

Is that system stronger today than it was four years ago, when we then considered that the investing public might realize how precarious it all was? More rabbits have been pulled out of more hats since then, and more bubbles inflated to "keep hope alive." Just one pinprick more and...

http://www.contraryinvestor.com/mo.htm
We may be getting close to the time when the Fed may either have to put up or shut up. The warning shot in the bond market of the last few weeks just may be the market's way of suggesting to the Fed that they get on with supposed unconventional action as opposed to continued promises, threats and jawboning. And if a scenario like this comes to pass, monitoring foreign flows of capital may be more critical than ever since potential change at the margin in the buying habits of the single largest buyer of US debt instruments over the last few years would be more than meaningful. Unconventional Fed monetary warfare would necessarily mean a big expansion in the monetary aggregates (M3, M2, MZM, etc.). In essence, this type of activity would be an open and outright "dilution" of the dollar, especially in the eyes of foreign holders of dollar denominated assets. Would foreign money continue to be lavished so generously upon the US fixed income markets if a scenario like this were to occur? It may be well worth pondering because if the economy does not experience the fables second half recovery, election concerns on the part of the Administration may mean that the Fed is allowed leeway to move on to Plan B in relatively short order - the unconventional weaponry espoused by Greenspan, Bernanke, et al.

----------------------------
Flattening the yield curve by buying bonds across the spectrum, in effect running up the prices, risks the furthur downward cascade of the dollar. Perhaps forcing the furthur buying by the Fed. of more bonds. A potetially vicious downward spiral.-------Gdome

Sometimes it seems we would be better off playing one hand of blackjack,or betting on red or black on one spin of the roulette wheel than playing the futures market.In all honesty I think the odds are better at the casino if you play just a few hands or spins on red or black.21

http://www.morganstanley.com/GEFdata/digests/20030707-mon.html#anchor0Excerpt:

"I continue to believe that America's long-overdue current-account adjustment is the only way out of this mess. It's the only macro scenario I know of that can relieve mounting global imbalances and put the world economy back on a more sustainable track. For starters, it will take the dollar down a good deal further. At its low point earlier this year, the broad trade-weighted dollar had retreated about 10% in nominal terms from its early 2002 highs. In a full-blown current-account adjustment, the ultimate drop could be three to four times that magnitude..."

This may be a time when precious metals are both an investment and a speculation.In all honesty I do not see any where else to put your money other then PM and other commodities.If you believe the stock market rally is for real you may want to go there.I myself do not see how this rally can be real the economy is bad,it looks to me like commodities are in for a good run things are getting scarce and there are more people coming into the world every day.I do not think you can get hurt with gold or silver its floor price has been established I just dont see them going lower,I would not say the same about stocks.

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

Despite evidence to the contrary that an actual recovery is taking place, Thursday's jump in the unemployment rate is a subtle reminder, confidence in government policy remains high. An abundance of credit, record low interest rates, a growing government deficit, burgeoning trade deficit, and depreciating dollar is giving everyone comfort that a recovery cannot be too far behind. The only problem with a depreciating dollar is that the countries that the U.S. runs the largest trade deficit with are countries whose currency has moved very little. Japan is actively intervening in the currency markets to prevent the yen from rising and China pegs its currency to the dollar. Bulls ignore this flaw in their devaluation arguments. In the final analysis it is believed that zero percent interest rates will make holding cash worthless leaving consumers and savers with no other choice but to spend, borrow, and invest in stocks. These are rather shallow arguments for a new bull market. However, analyze and sum up the bulls� arguments for a recovery and new bull market, it boils down to this confidence in the G Men, and Mr. G himself.

Today's Markets

The rally took place among the usual suspects; semiconductor, hardware, biotech and Internet issues. On the sell side were energy and gold, the two sectors with the most promising earnings prospects, thanks to higher metals and energy prices. Wall Street downgraded the energy sector while it upgraded the tech sector. The worse a company performs, the more attractive it becomes for investors. The rally this year has taken place amongst those companies either experiencing balance sheet or income statement problems. Your business can be performing miserably, but what counts these days is beating expectations that are in a constant state of being adjusted down in real time. While fund managers have been rushing into tech stocks and buying with complete abandon, the insiders who run these very same companies have been selling their shares in record volumes. In short, the insiders are selling while fund managers and their shareholders are buying. The recent rally has attracted the little guy again with $2.5 billion flowing into stock funds last week according to Trim Tabs, which keeps track of money flows. The company has become aggressively bearish recently based on the largest insider corporate selling it has seen in years.


Black Blade: A good one tonight from Puplava. The stock market has been quite entertaining lately as rally upon rally based on nothing has exploded into yet another tech bubble dragging other stocks higher. I stand ready to laugh at the antics of the Lemmings as they get killed again. As if losing nearly $10 trillion from peak to trough in the last bubble was not enough, the Lemmings are lining up for another go and like moths to a flame will go down in flames losing more wealth and vaporizing more retirement dreams. There is no evidence of an economic recovery and amazingly todays� investors with their limited mental capacity are incapable of remembering the events over the last three years. If there truly is an economic recovery we would see energy costs soaring to even higher levels as any expansion will require more energy fuels than is available. Obviously the Lemmings are getting scammed once again and as they scratch together what funds they have left, the corporate insiders are bailing out at a fast and furious pace. Something is seriously wrong with this picture. So grab some cold ones, get some snacks, sit back in a comfy chair and watch the carnage unfold as the suckers get cleaned out again. Should be quite entertaining to watch "Natural Selection" (Darwinism) in action.

http://story.news.yahoo.com/news?tmpl=story&ncid=1205&e=5&u=/nm/20030706/bs_nm/column_stocks_outlook_dc&sid=95609883
Snippit:

NEW YORK (Reuters) - Investors will brace for a flood of earnings reports next week, searching for signs that growth in the economy and corporate profits can keep pace with the stock market's recent rally. Nothing seems able to block the positive vibes flowing through Wall Street these days. But some analysts say it will soon be "show me" time for the economy and corporate America, with investors demanding proof that a recovery is under way. The market has been largely shrugging off less-than-stellar economic data. This week, investors focused on the more optimistic components of a key manufacturing report, brushing aside its weak overall reading. On Thursday, a strong report on the services sector cushioned the blow of a surprisingly big jump in the unemployment rate in June. Earnings will be the next big test. After a relatively mild "Corporate Confession" season, when companies tend to warn about any profit shortfalls, optimism is high for a decent showing. Just over half of the companies that have issued forecasts before their earnings reports said their profits would fall short of analysts' estimates, while the rest said they would meet or beat Wall Street's expectations, according to earnings tracking firm Thomson First Call.

Black Blade: This is covered somewhat in today's DMR as well. There have been several warnings already outpacing the same time last year, and that's even with lowered analysts expectation. As long as the bar is constantly lowered and more focus is placed on "pro forma" rather than real earnings � all is well. Should get quite "interesting".

http://www.usatoday.com/usatonline/20030707/5301570s.htm
Snippit:

Penalties for homicide are pretty clear -- prison terms or the death penalty. But when a corporation is damaged or destroyed, wiping out jobs and shareholder value, the penalty is paid by the people injured, not the executives who inflict the injury. If there were a crime of corporate homicide these days, we could probably fill a cellblock. Instead, we just let them write a check, signed by the corporation.

Black Blade: Who says crime doesn't pay?

http://www.jsmineset.com/s/Home.aspFrom James Sinclair:
The major stock market/US dollar operation unleashed out of Europe this a.m. had its natural affect on gold. Even so, gold acted reasonably well in the face of rocketing equity market indexes and an artificially produced dollar rally.

Clearly the rescue plan of the Federal Reserve is really no plan at all. That is actually quite awful when you think about it. What it means to me is that we are so close to Zero Bound interest rates that monetary policy is useless. Could it be that the only resource left to the Federal Reserve is the hope that the stock market will carry the ball?

In reality, it's as if a cage door was opened in a zoo but instead of a great lion roaring to the financial world, a small tabby cat emerged and meowed.

Quietly and behind the scenes, the long bond market continues its decline around the world. When the equity indexes and dollar rejoin their declines and the bond market also declines, you can safely assume the top on all the world's long bond markets are in and gold is going over $400.

http://www.brillig.com/debt_clock/
The clock is ticking away - closing in on $6.7 trillion "official" debt and rising fast. The actual national debt is well in excess of $44 trillion according to the Treasury Dept. That's OK, it's only digits in a ledger and will never be paid anyway.

- Black Blade

Far away in the East, an empire emerged. Long before the battle of the five armies, had it taken its first breath. This alliance had no army. No spear or arrow. Instead words and promises were used to bring those to their flock. Their numbers grew and soon enveloped the land. In the beginning some saw through the darken veil,and they were shuned and driven out. Later to be hunted as it grew in strenght. This land gave the appearence of light but was covered in darkness that could not be seen. Its followers blinded by the words of deception. Over a period of time, the sheep were gathered and the tenacles reached far and wide. For now no one would oppose it.
Every morning before dawn,Sir Black Blade would rise and and performed exercises with his great sword. It had been passed down,generation to generation and it was said it was made from the same metal and forged in the same foundry as Excaliber. A true work of art. Balanced and tempered assured its mark in battle.
Today, like other days, he would walk through the main gate. Cross the causeway and venture down into the town outside the castle walls. On his side he carried his sword.
He enjoyed the rustle of the small village coming to life. A "Good Morning" always brought a smile to his face, and his "Good Day To You" was recieved with a smile. He would then walk down to the square as the merchants set up their daily shops. Fruits,vegetables and wares were put on display and the buyer and seller engaged in barter. The final payment agreed on in gold or silver coin. On his way along the market, Sir Black Blade, spied a treasure. A dagger. Layed out upon the matte unsheathed, it sparkled in the sunlight. He picked it up and his hand fit the handle firmly. The blade was engraved with fighting stags. He asked the merchant for the price and after a few moments of bartering he sliped the dagger into his waistbelt. Concluding his purchase he made his way back to the castle. He wished to see Gandalf and talk to him on this beautiful day.

Slingshot-----------<>

http://www.futuresource.com/charts/multicharts.asp?symbols=TYXY%2CFVXY%2CDX1%21%2CGC1%21.=D&varminutes=&bartype=line&bardensity=LOW&r=&go.x=12&go.y=10Gold holding up solidly against the onslaught and Bonds seem to be goading the Fed into action. DX could be expected to spike as endQ repat comes home...if this "is" the beginning of a (lack of) confidence move into Cash, then Dollar will run to 100 licketty-split....imho.

Black Blade
You gave the figure of 143million ounces of gold in the US treasury. When did that figure change from 262 million ounces?

http://www.chron.com/cs/CDA/ssistory.mpl/business/1979872
That's the figure cited in the article (see link). I don't know where the author got that figure.

- Black Blade

Thanks for the thoughtful and interesting responses to my percentage question.

Econoclast - "Keep only the chips you need to stay in the game. Take all the rest off the table." A great way to say it! I agree; the answer is: "Yes!"

Slingshot - Not very strong on the percentage profile idea myself, but it kept the question simple.

Sir Aurelius - Good thoughts and well stated. I must agree with R Powell about the weight and storage of silver, except for maybe a few pounds of "junk silver" coin. The 1/4 and 1/10 oz gold coins are handy and easy to store though.

BB - Very perceptive. In 1978-9 I went with metals as an investment and ended up grinning. This time its about insurance. Funny thing about the handle - it was not planned - just sort of typed itself in when I registered for this forum.

Druid - A sort of anti-lemming approach. Sounds good. Thanks!

Cometose - Iceberg; Debtberg. Its all good so long as they assume we can't see it, right :)

- Survivor

ANCASTER, Ont. (Dow Jones)--Central Gold-Trust has closed its initial public offering of 2 million units at C$20 each, for gross proceeds of C$40 million.

Sprott Asset Management Inc. will act as adviser and Central Gold Managers Inc. will act as administrator.

In a press release, the trust said it has granted to the agents an option, exercisable in whole or in part until 14 days following the closing date, to purchase an additional 300,000 units at the offering price.

If the over-allotment option is exercised in full, the total gross proceeds of the offering will be about C$46 million. The net proceeds from the over-allotment option will be invested according to Gold-Trust's investment policy.

Central Gold-Trust anticipates that the units will be considered as capital property for most investors and thereby qualify for capital gains tax treatment. The units are listed on the TSX under the symbol "GTU.UN".

The securities weren't registered under the U.S. Securities Act of 1933.

Central Gold-Trust is a self-governing limited purpose trust, created to invest substantially all of its assets in unencumbered physical gold bullion, in 400-ounce international bars,

Company Web Site: http://www.gold-trust.com

there is to many dollars offered between .93 and upwards for that to occur. lets watch and see whose opinon gets born out.
all aboard !

I was reading an article were the anaylis said silvers recent rise was tied to the rising stock market showing silver has chosen to be an industrial commodity. Any thoughts on this I think silver is also a store of wealth i know many do not agree, but thought I would post for the silver surfers on the board.

One thing I think goldbugs are going to have to look out for is a replay of 1933s gold confiscation. When the dollar really tanks, will the Fed and the Administration institute confiscation as a "patriotic" move to help the country through the crisis?

The gold miners stocks are down across the board today although most silver miners were up with one of the bigger silver miner the exception. This may be something to follow if the silver miners go as the industrial and transports of the dow would it be evidence of silver as a pure industrial commodity?21

Aurelieus, can you imagine if the PR machine that went to work on the public in regards to their perception of Iraq was turned loose on the gold community,even our own families would be turning us in.21

This is a general question to the forum.Outside of this forum do your circle of friends discuss issues we talk about here, do they even realize that these things exist? The groups I move in have no idea whats going on,and if you try to discuss things they look at you like your an alien.The one person who I can discuss things with is the local bullion dealer,I have been trying to get him on the forum but he does not use the computer very much.The one group over all who is knowlegable about these perils is people over 70.They know about hard times but it seems once you get several years below that 70 mark most people have the heard mentallity.It seems an impossible task to wake people up if you reach 1 in a 100 your lucky.If bad times come people who have prepared for them will be viewed as the enemy by those who did not prepare.21

How exactly is paper gold "inflated"?

All I can come up with (being extremely ignorant in these things) is this:

CB leases gold and gets a contract that says it will get it back at a certain date. CB can now sell that contract at a discount n the paper market. The buyer can (can he?) use that contract claim to gold to back his own issuance of an option to buy X amount of gold at a certain price.

Maybe he can do this several times over, beyond the actual amount of gold the contract claim entitles him to get - but can he? If so, how?

That's where I get stuck. Can anyone explain in simple terms how this paper-gold inflation that FOA talks about actually occurs, with specific examples? Or maybe steer me to a source where that is explained?

I really would appreciate it.

Thanks,
FW

We should be able to find out who the big buyers and sellers
of Ten Year Government Notes are going to be now:
------------------
[US Treasury] Treasury Calls for Large Position Reports
Date: 7/8/2003 6:26:46 AM Pacific Standard Time

TREASURY CALLS FOR LARGE POSITION REPORTS


This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/js531.htm

The Treasury is calling for Large Position Reports from those
entities whose reportable position in the 3-5/8% Treasury Notes of May
2013 equals or exceeds $2 billion as of close of business Monday, July
7, 2003. This call for Large Position Reports is a test. Entities
with reportable positions in this note equal to or exceeding this $2
billion threshold must report these positions to the Federal Reserve
Bank of New York. Entities with positions in this note below $2
billion are not required to file Large Position Reports. Reports,
which must include the required position and administrative
information, must be received by the Government Securities Dealer
Statistics Unit of the Federal Reserve Bank of New York before noon
Eastern time on Monday, July 14, 2003. Large Position Reports may be
filed by facsimile at (212) 720-5030 or delivered to the Bank at 33
Liberty Street, 4th floor.

Details on Call for Large Position Reports

Security Description: 3-5/8% Treasury Notes of May 2013, Series B-2013
CUSIP Number: 912828 BA 7
CUSIP Number of STRIPS Principal Component: 912820 HX 8
Maturity Date: May 15, 2013
Date for Which Information Must Be Reported: July 7, 2003 as of COB
Large Position Reporting Threshold: $2 Billion (Par Value)
Date Report Is Due: July 14, 2003, before noon Eastern time

This call for large position information is made under Treasury's
large position reporting rules (17 CFR Part 420). The notice calling
for Large Position Reports is also being published in the Federal
Register. This press release and a copy of a sample Large Position
Report, which appears in Appendix B of the rules at 17 CFR Part 420,
are available at the Bureau of the Public Debt's Internet site at the
following address: www.publicdebt.treas.gov.

Questions about Treasury's large position reporting rules should be
directed to Public Debt's Government Securities Regulations Staff at
(202) 691-3632. Questions regarding the method of submission of Large
Position Reports may be directed to the Government Securities Dealer
Statistics Unit of the Federal Reserve Bank of New York at (212)
720-1449.

21,

I think we've all tried to share knowledge with others, with probably the same result. Most people, even if they normally trust your judgement and character don't want to know. Those that do want to know aren't in any financial position to do anything about it, or they just don't understand or have an interest in investing and markets. Most people will keep ticking along as they always have, probably living quite content lives, and only few of them realising (too late)the chance they've missed to 'walk in those footsteps'.No-one believes that we're on the brink of the mother of all recessions, the media has assured them we're leading into a recovery, and some friends I have who are traders tell me they've had their best year ever on currencies and stocks.

I have many friends who I'm sure wish me the best in my investments, but I'm sure most of them don't believe for a second what I'm telling them. To be honest there are times I don't believe TPTB will ever let gold float up to where it should be myself. Watch people's faces switch off, their eyes glaze over and their feet start drifting to the nearest activity that doesn't make their brain hurt as much as what they're hearing about gold and what they hear to be
International Conspiracies and the collapse of the Capitalist system and the free world as we know it.

That education system and media monster that has been imposed on our world has done its job very well. Even the skeptics out there believe most of what they're told if they hear it from enough sources enough times.

There's also Darwinism and the Lemming concept to consider. Maybe the ability to reason and search out knowledge for one self has been educated and bred out of the majority of people. People are happy to be spoon fed their news and information.More people will show interest in the sports pages than financial matters- See no, hear no, speak no... Unfortunately I think most believe that our interests and welfare are genuinely being looked after by our Governments, and that people like AG know what they're doing.

All you can do is look after your own, trust that when the time comes you have positioned yourself and those you can help in the right place, and offer insight to anyone genuinely interested in knowledge, which gives people the ability to discern for themself truth and wealth.


To coin some well worn phrases, the first which is unfortunate, but the second which is gospel, not that I'm religious.

Not everyone can be wealthy.

The truth shall set you free.

Again I'd like to thank all who post here for the wealth of knowledge and wisdom I am priviledged to share, and can't help but feel at times that this is like having access to the wisdom of Socrates, Plato and Cicero,the philosophers
of old, who gave wisdom in their times on the changes within the ancient world. Remember they too found it hard to share their wisdom with many contemporaries.

Got gold. Absolutely.

I agree with Gondolin on this. Most of the people I know either look at me like I don't know what I'm talking about or they just don't want to know anything about it. Even though I am vastly un-knowledgeable about all this myself (compared to the folks who regularly write here) I find it all fascinating. I try to learn and have read TOA/FOA but since this is not a vocation with me I find it hard to remember a lot of the details. However, long before I knew of this forum I was more or less on the path of Another. Helpful friends pointed me in the right direction.

One thing that perhaps someone here may clue me in on (and I know this isn't directly gold related but...) I've been reading "The Creature from Jekyll Island". I'm about 2/3 done. While it's a fascinating read I wonder how close it is to reality. What with all the references it seems it would be fairly factual. Does anyone here have any good direct knowledge about how close to truth it is?

Got Gold?? you betcha

@21Mabry:

I have been pointing friends and family members to this forum, Financialsense.com, and PruBear for quite a while. Often I get a response like "I've been saying that for ever," but it seems none have actually revisited the sites on any regular basis. One told me yesterday, "I have a professional money manager, so I don't have to pay such close attention as you do."

Few seem to believe that things are as fouled up as we do, and some who do have a hard time believing thay can "prepare" for the future, as they "expect" to be manipulated out of any rational response.

I, for one, am intrigued by the earlier question posed about confiscation. It seems more and more articles are referring to Roosevelt's "patriotic gesture".

Is this why Buffett prefers silver?

snap!!!!

99 out of 100 people i talk to think im from the planet zog
when i try to discuss the financial situation today
"your just a depressive doomer" seems to be the standard
reply as they take ten paces back from me (it just might be contagious you know) then point and snigger at the madman in
their company
at times you would get a better response from a giraffe than
most human beings i know

however so far ive managed to persuade about 5 people i know
to buy the precious yellow metal which i consider an outstanding acheivement considering the 30+ years of
brainwashing they have had to overcome its not been easy but
i found that if you e-mail them pertinent articles/posts
from this site, gold eagle and prudent bear (ok to mention
them mk?) the penny eventually drops with some of them

ive also been taking the odd coin to get togethers and let
people see and mess with them in the hope that 5000 years
of human instinct might come bubbling to the fore and
change their minds once they are in contact with the physical

but its oh so difficult to tell a lot of people that the
jobs/cars/houses that they have taken as a birthright just
might not be theirs in the near future

i think its still better to let them know than say nothing
as i would rather be considered a nutter than a bar steward
when you survive the coming onslaught and all around you
people end up washed out and lost

at least you warned them and if they didnt take precautions
then thats there own free will

keep at it and try and persuade as many as you can as its all you can do...

Goldilox,

My concern is also rising on possible confiscation or call it (mis)-appropriation of gold by the Government (or Governments). Physical in hand is one thing, but I'm sure that most on the forum are also in mine stocks. If confiscation of mine production goes ahead will it likely be a total confiscation of all annual mine production with statutes requiring gold is sold to the Government and only the Government at set prices, or just a percentage of a mines gold production at these set prices?

When a Government has shown contempt for International law, and as illustrated already by the freedoms and rights lost already under the Patriot and Homelands Acts- passed as emergency measures- one fears that the 'greater good' of all will certainly take precedence over the interests of those who were wise enough to position themselves in gold stocks, should emergency measures be required to prevent a dollar/ economy meltdown. That of course is unless those who would do the confiscating are themselves holders of those same gold stocks!!

Here's hoping that TPTB are able to maintain the slow decline of the dollar and a commensurate slow rise in the POG to prevent such measures being required. Unfortuneately as we see here each day it just looks grimmer every month.

The following commentary by Reginald Howe is my favourite, because it is based on data supplied by Bank of International Settlements:

May 26, 2000. Gold: Can't Bank with It; Can't Bank without It!
http://www.goldensextant.com/commentary12.html#anchor341719

The key passage for me is the following:

"In a perfectly prudent world, the net short physical position would roughly correspond with the net short gold derivatives position. However, in the absence of such a world, the net short gold derivatives position tends to be larger than the net short physical position. This phenomenon results because while part of the gold derivatives position may be hedged in the physical market or reliable substitutes, other parts may be hedged in less reliable forms of paper gold or even unhedged, such as naked calls."

-------

The following piece by Aristotle reveals some banker magic:

Aristotle (10/17/02; 02:29:28MT - usagold.com msg#: 87615
http://www.usagold.com/hall/hallfame5.html#anchor295925

He says:
"You know..... it occurs to me, seeing how EASILY some Gold-minded investors may be drawn in by leverage and by less than the Real Thing, I, too, stand ready to accept �10,000 ($15,500) investments for over-the-counter 12-month maturity structured financial products offering a Goldish hue. Let's call them Ari-Instruments."

"On those Ari-Instruments I'll pay 2% per annum for use of the money, and throwing caution to the wind (but mostly to make my point) just like Standard Bank I'll promise a (maximum measly) 10% interest payment kicker to the bearer upon the event of Gold's price increasing by at least 27% to $400."

----

A very interesting account of near history with the oil for gold deal built into it can be found at:

Aristotle (6/30/99; 9:41:59MDT - Msg ID:8236) Part 5--- Life on Earth: Gold and the Free Market
http://www.usagold.com/halloffame.html#anchor318280

I believe that, the oil for gold deals cannot be verified at this stage. Perhaps at post-mortem analysis, but not now..

He says:

"The miner approaches a bullion bank for a Money (Gold) loan. Let's assume the current dollar price of Money (Gold) is $400 per ounce, and the miner needs $20 million to pay Caterpillar for equipment. The bullion bank (such as can be found operating in the network of the London Bullion Market Association--LBMA) writes the Money (Gold) loan contract specifying the term of repayment of 50,000 ounces of Money (Gold) plus interest at 1% - 2%. The borrowing miner collateralizes this Money (Gold) loan with company stock, the deed to the mine, etc., and is sent down the road with $20 million in currency for Cat. Where did this cash come from? The bullion bank turned to the House of Saud, which is currently out of currency. However, using their oil in the ground as collateral, the bullion bank is able to write them a currency loan out of thin air (just like banks can do) with which the Saudis purchase the repayment rights on the Money (Gold) loan. They will be receiving future Gold for their future oil! As they sell oil, they will use their dollar revenue to repay their currency loans, and in the meanwhile, the miner's Gold loan repayments will be directed to the Saudis' account."

The probable endgame expected by FOA is as follows:

FOA (06/12/00; 19:48:25MT - usagold.com msg#26)
http://www.usagold.com/goldtrail/archives/GoldTrailTwo.html

Here, some additional assumptions about the intentions of Euro thinkers are made:

He says:

"With a future Euro backed by a "free trading" physical market in gold, gold's real value would be later seen! Upon hearing this, almost every analyst took the ball from us and immediately ran with it in the wrong direction.

The usual explanation built on the fact that the world paper gold markets would burn up in a paper short squeeze. There by delivering our projected "soaring gold value". Well, there is something to be said for that, but such a process would be short lived and certainly not be the real play that's coming.

The current paper gold world will die (burn) as it's value to users erodes, not increases! We have to remember that some 85% (or more) of the long side of our world paper markets will not (perhaps cannot) take delivery of physical gold. If the paper trading price is driven ever lower from new derivative supply, these longs simply "trade out" and take their cash hit. The major banks and players in this arena know this and therefore are not at risk from expanding their positions. Truly, they are only playing behind the real political game today.

Indeed, if the Euro function will ultimately burn the dollar and it's paper gold markets and replace it with a physical "free gold" market, then selling paper gold is free money! Right? This is but one segment of the coming currency transition and to date it's progressing right along!

Again, most everyone in the Western Gold bug game is running with the ball in the wrong direction. They are trying to understand just how the Euro zone players are going to get out of our current gold market liabilities when the Euro makes use of the dollar gold market! These same thinkers are looking for some kind of "work out" of our system so it's price discovery function will value gold where it should be! My observation from the "Euro Makers "is that one should "forget this notion"! "Noone" gives a hoot about holding "price discovery" paper contracts as the real thing. Except for those with the real power to trade something for full payment! OIL!

Today, paper gold derivatives are for selling because they will eventually be politically defaulted once their discount to physical drives their value next to nothing."

------

These are all very instructive. However, obligations to Saudis can be defaulted and intentions of Euro thinkers may change. Even under these conditions, gold is still the place to be after this historic credit bubble, I think�

In response to the question about how many friends/neighbors/family have you managed to persuade to the benefits of gold; I have managed to convince my parents of the need for gold and silver, although they are about to sell their current home and build a smaller house for their eventual retirement. Coworkers will admit that the situation stinks, however, only one has actually purchased any gold coins. One manager actually still believes in the stock market....

But back to the confiscation question. I think that confiscation will be seriously considered by the government in order to prevent its collapse. Leaving the individual financial standing aside for a moment, goldbugs have two equally unattractive options facing us in the event of a dollar slide below 92.
1) The dollar slides but it slides slowly and gently, slinging us into a long term Japan like malaise. Gold will increase in value during this period, but it will not become money again.
2) The crisis becomes dire, but not complete collapse, the stock market tanks, along with bonds and other instruments of the investing elites. The government is then facing the wrath of the electorate and the fury of the financial elites. Gold will become the boogeyman and a confiscation scheme will take place in order to establish a "cover clause" or semigold standard in order to bring sanity to the markets. My crystal ball is cloudy as to the success of such a move.

Both scenarios are bad for the gold holder in this case. The only way to undo the dead hand of the government and Fed in the markets and to return to "free" money of a true gold standard, is for a total collapse of the economy and government. After the collapse, barter would become an economic system of payments, later replaced by increased circulation of silver and gold. The consequences of such a collapse are extreme and would be rather dangerous times for everyone living in the area. Is this scenario something to hope for? Would any such person wish for such destruction?

I raise the points above not necessarily wishing for them to occur, but rather to brainstorm ideas of what could happen and how to prepare for them.

When I read "The Creature From Jekyll Island," it fit with
other things that I knew. The world is a battlefield. In
practical terms, and in evolutional terms, the struggle is
a mortal one, to all concerned. The stakes are survival or
extinction, nothing less. That entities would work to
control the means by which the world's wealth -and,
thereby, the means, to a great extent- by which the chances
of their own survival could be increased, is no surprise.
And that many would succumb to socially acceptable
passivity, rather than do what will be necessary in
surviving themselves, seems also to be expectable.
Therefore, while I lack direct knowledge of whether the
book is substantially true, I must say that I believe it
makes sense in all of its aspects, and fits with other
things that I know, and that this can itself be a powerful
evidence, though perhaps not a technically conclusive
proof, yet consistent with the reality which is known, and
this is one step in a proof. For example, I have no direct
knowledge that Bach wrote music. But the supposition that
he did is consistent with everything else that I know.

Magister,

Assuming the second of your options should come to pass (and I for one hope the complete collapse does not occur),if we conjecture for a while on possibilities - and this could raise a few good and interesting answers- if you were Alan Greenspan and you once knew the true value of gold as money, and you knew what was coming, and that in some way gold had to be returned to its true role, or to a role within the monetary system: What would or could you you do to make this happen?

Would revaluing the US reserves at the market POG make any difference?

For any at the table, is there out there a pearl of wisdom or a trail that AG could read, disseminate and possibly
follow to get out of the mess that he's now in? (I have read A and FOA, and am started on the trail they have set out myself). But how can AG get out of the current situation while causing the least pain? Or is there no road without pain? Is there an easy way out of this for AG and his cronies that can restore gold to it's role? And if there is, what effect would that path have on holders of gold and gold stocks?

I guess I'm trying to hint at is whether there is an escape path AG could follow where it is possible for gold to return as money, or for gold to be pegged to currencies, without those of us with the foresite to position ourselves in gold becoming the boogieman and whipping boy, and possibly losing much of what we have toiled for.

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

Will you open the door?

http://www.usagold.com/gold/coins/rationale.html
Rationale to help you weigh your options.

Ge: from post 105533 you said.....


The following commentary by Reginald Howe is my favourite, because it is based on data supplied by Bank of International Settlements:

May 26, 2000. Gold: Can't Bank with It; Can't Bank without It!
http://www.goldensextant.com/commentary12.html#anchor341719

The key passage for me is the following:

"In a perfectly prudent world, the net short physical position would roughly correspond with the net short gold derivatives position. However, in the absence of such a world, the net short gold derivatives position tends to be larger than the net short physical position. This phenomenon results because while part of the gold derivatives position may be hedged in the physical market or reliable substitutes, other parts may be hedged in less reliable forms of paper gold or even unhedged, such as naked calls."

Rich: This has been discussed before with, I believe, no firm resolution. At least I was not converted to this point of view nor did the opposing argument win any converts that I'm aware of. There was some damage in that we lost sector. Imho this is a big loss.

May I offer a new point of view. Howe bemoans that the world isn't perfectly balanced with the "net short physical position" equal ("roughly correspond") to the "net short gold derivatives position". Let's for a moment evaluate exactly what would happen if Mr. Howe's wish were reality.

If the speculative or paper game could not exceed the amount of physical gold sold then the amount of gold available to be bought would also be limited. I believe, the gold market would be have reached its limited capacity years ago. Buyers would have to be turned away as there would be very limited new physical to back any further selling. Most trading would become limited to no more than what exists in storage plus what little new physical yearly enters the market. I would guess that the price would be beyond the means of all but the richest few in our world. The exchanges would probably shutter due to a lack of activity and the "price" or "value" of gold would have to be determined with each transaction and determined by only those involved in that transaction. Perhaps this would be an improvement, I don't know? Is this "free gold"?

What I do know is that, with the present system, the average Jill or Joe can buy or sell gold, silver, soybeans, cotton or whatever. The fact that the system provides or makes available buyers and sellers (who do not possess nor intend to take possession of) means that those who want to buy can and those who want to sell can, and at any time. Would you limit the buying and selling of crops to just harvest time? Speculation provides liquidity.

Howe also states that there is more gold sold on paper than is legitimately hedged. Agreed, of course, yes, always. Some, he further states, is even "unhedged, as in naked calls". He implies that this is somehow not right or that this is unusual. I wonder, if Mr. Howe were at a horse race, would he think that only the horses' owners have the right to bet on the outcome of the race? No bets allowed among the spectators? Of course not, they haven't entered a horse in the race so their bets would be "unhedged"?

The requirement necessary to buy or sell a derivative is enough margin money in the account. Money is necessary to bet and money it is that settles the bet. Physical ownership (even as much as we admire such) is optional. I, for one, would be very disappointed if I could not "buy" because no one could sell. By the same reasoning I would never be able to sell that which I had previously bought because I never took physical possession after buying. If a stock certificate represents a piece of ownership in a company or corporation, would Howe's "perfectly prudent world" forbid short selling? Would certificate sellers be required to physically hold a piece of the company so that there would not be "unhedged" sales?
Thoughts?
Rich

Gondolin,

The situation as it stands now leaves no escape route without pain. Thanks to the massive credit creation and housing bubble in particular, I do not believe that Alan of the Green Spans has a painless way to incorporate gold into the monetary system. A true gold standard would force the immediate and drastic revaluation of the dollar, and because the amount of gold available for a true gold standard would be limited even if augmented by silver dollars, prices would plummet as money would become extremely "dear" and expensive. A penny would once again be worth something, but just imagine the carnage inflicted on all homeowners who borrowed money to buy a home under the current system? The real estate values would plummet, leaving the owners owing astronomical sums. Massive foreclosures and homeless would spark a total collapse. A true gold standard is therefore not an option for Greenspan.

A gold cover clause would still cause pain, albeit less than a true standard. Interest rates would have to tighten in order to prevent a hemorrage of gold from the reserves. The only other way is to prevent convertibility of dollars into gold during international settlements.

I just don't see Greenspan really being able to back the dollar with gold without confiscation or complete collapse. Remember, when dealing with the government and the banks, power is the true coin of the realm, and neither will relinquish that easily. Confiscation, however, works hand in hand with power as it would allow the governing classes to continue to rule, while establishing a faux "stability" and making us think that the dollar is backed with gold again... and they could start the cycle all over again.

Sorry for the brevity, but I'm typing this on coffee breaks, and I'm feeling a bit cynical today.

Just watching "the Brain" on CNBC (OK I was really bored). He and and "the Blonde" were elated by all the M&A activity and the fact that Big Corp, Inc was getting bigger by whipping out the bubble-fattened checkbook. It seems to me that M&A is another way of adding to the bone pile as "redundant" jobs are eliminated in the name of business efficiency. Is the next bubble coming in M&A?

EMC buying Legato is telling Veritas (the Storage SW giant) that EMC wants to control the entire sales channel - don't bother trying to bundle your SW here. Shades of DEC falling to Compaq to be eaten alive by HP.

snipit:

"Politicians have no influence over how the Bundesbank proceeds with its gold reserves. All interference from the politicians' side must cease," Stark said.

Goldilox: Yeah, Right!!!ROTFLMAO That's soooo likely.

in the ot there is a recommended solutions to financial imbalances such as we have today

the 50yr jubilee... "all" debts are forgiven and property is returned to the debtor/slaves

i'm not an ot scholar be any means, but it is possible that "Big Papa" may stomp on a few snakes for the general good of the poor

some call it "an act of God" or judgement, i don't care, but the cabalise have to change their underwear like everyone else cause their "poop" does stink like everyone else's.

just because they are "the elite" (oh, shudder shudder) I DONT ASSUME that they will stay in power forever, they have NO exit plan, the "greenspan" is almost over, the greatest "wealth-transfer" in history is soon upon us...

i feel that its time to rejoice, must be gold-bug fever!

GO DAVID (GATA), goliath is a naked dog, we shall overcome!

there i go preachin to the choir again

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1057562194782&p=1012571727126Snip:

This is not the first time Mr Greenspan's credibility has come into question. To his critics he is the "double bubble" man. First, Mr Greenspan egged on the stock market to bubble proportions with incessant happy talk about the alleged limitless capabilities of US productivity.

That story did not have a happy ending, as we all know.
............

The unpleasant truth is that Mr Greenspan and his colleagues first created the bond bubble with their radical rhetoric, then burst it with their conventional actions.
.............
Mortgage rates surely will jump and threaten another of Mr Greenspan's bubbles: the housing market. Moreover, the Fed's loss of credibility will undermine its ability to guide the economy through the storms that are currently gathering. In particular, if deflation becomes a real problem in the US, the Fed's capacity to engineer looser financial conditions without cutting rates has diminished along with its credibility. This is an important consideration when ammunition is in such short supply.
**********
Misetich

Sir Greenspan reputation continues to deteriorate - This egomaniac still believes he can continue the charade and gambling - It appears evident that the latest ploy of central bankers is to prop up the financial markets worlwide to "instill and regain" investor confidence-

Yet the "real world" the economies are floundering -

The second down leg of the bear market will be ugly as stock prices have built in unrealistic expectations

All On Board The Gold Bull Express

How many Americans hold any gold at all today? 1%? 2%? and in what amounts, on average?

Given that fact, what good would it do the government if gold were confiscated? What could it gain vs the credibility it would lose if it were to confiscate again?

Second question: at what fiat price would the government compensate the citizens? Back in '33, there was an official gold price that everyone accepted, so taking the gold and giving them paper wasn't so bad then. How would that look today? Would they pay us the market price of the day? Or the ridiculous $42.222 price the Treasury guarantees the Fed for the gold that was confiscated from it?

If they were paying the market price, they would be in trouble because the very reason for confiscating would be a market price out of "control."

If they pay just 42 bucks, even non-gold holders would see them as tyrants.

Sure, the small number of gold owners makes them a perfect victim. Nobody would come to defend them, and by themselves they are powerless. They would all have to travel to one small town to start a riot worth reporting in the news. But the question raised in everybody's ,mind would stay there, and that is a risk not well compensated for by confiscation.

If the government simply took the gold without compensating the owners, it would gain nothing because to it, the money with which they "pay" for such endeavors is free. But it would lose a lot of credibility, which is how political power preserves itself unless it want to become openly dictatorial (and I donl't think the US government is quite ready for that, even under Bush or even Hillary. A lot of people still own guns around here.

As long as you get compensated at or near the then-current market price, what do you care whether your gold is confiscated or not? You are no worse off than you would have been if you had not bought gold. All you lose is the power of appreciation, which you would not have u8nless you bought gold in the first place.

So, none of these things, even if they should happen, are any argument against owning or buying gold. And the likelihood that they WILL happen is very small, given the low benefit resulting from the low rate of ownership.

Also, back in '33, gold was currency, and banks were at a risk of bank runs on "their" gold. Today, no bank even holds gold, so allowing people to own it in no way endangers the banking guild any more than its and the government's stupid policies and practices do already.

What endangers the banksters today is an uncontrolled price rise iof gold - internationally. Domestic confiscation in no way ameliorates that problem.

That's just how I see it.

FW

There are some very astute commentators of the financial scene, like Richard Russel, Jim Sinclair, Frank Venoroso, and even the Stephen Roach's, who have seen it all - and are still mesmerized by the brute force of blatant market manipulation.

The PPT is seemingly in full control and is willing to prolong the charade as long as possible. PPT, of course is the governement controlled agency empowered to "regulate" any financial market at any sign of distress, dubbed as Plunge Protection Team.

The problem with this kind of 'Goebbels' like propaganda is that the systemic imbalances are only prolonged. The roots of the problems are either denied or papered over. Monetized, may be the name.

Monetized by paper promises of a monetary system built and only striving on debt and, exponentially more debt. The final perpetuum mobile, a sheer impossibilty in a real and 'physical' world.

In the final reckoning even Einstein has questioned his own theory - relative to what?

... And as we still live in a monetary system based on the seignorage of the debt vehicle of the US dollar reserve system - we all live on relative vagaries!

Demographics prove the descending importance of the western post industrialized societies, as their social benefits become financially suspect. While former "3rd. world" countries take up the the slack and fill in the vacuums, the "West" is losing not only its productive base, far worse, its technological advantage in the end.

Capitalis'm, Communis'm and in the end Socialis'm have gone full circle - maybe the D.C. neo-cons feel fascis'm may tide them over for a while - the system we've known is bankrupt.

Protect yourself and own reality for your last liberty - gold - to tide you over. No one else is going to protect you! ... cb2

http://www.whatreallyhappened.com/index.htmlQuestion: Why is Blair getting pummelled and Bush not?

More comments today from Sinclair and Russell about China's possible emergence as a big-time player.

Questions:

Is China's currency the yuan or the reminski (sp)?

If the said currency is 'undervalued' as perceived by some (what does that mean?) and is locked (pegged) to the US dollar how does it become 'unpegged'? If China has a trade advantage (export) because of this condition why would they want to 'unpeg' it? Can they be forced to break the relationship? If the 'unpegging' causes the currency to soar why would they do it in this modern 'beggar thy neighbor' world?

Russell ponders that China might be setting up the accumulation of gold and silver in order to 'peg' (back) its currency if and when it releases from the dollar. Any possibilities of this happening?

TIA

Sinclair refers to these people today; who are they?

Another/FOA refered to these people as well. Surely this is not merely a generalization of a nationality or a race.

TIA.

http://www.gold-eagle.com/editorials_02/schultz060102.htmlEnjoy the read.

http://www.matrixmasters.com/world/america/iraq/2003_07_01_archiveiraq.html

"The situation as it stands now leaves no escape route without pain. Thanks to the massive credit creation and housing bubble in particular, I do not believe that Alan of the Green Spans has a painless way to incorporate gold into the monetary system. A true gold standard would force the immediate and drastic revaluation of the dollar, and because the amount of gold available for a true gold standard would be limited even if augmented by silver dollars, prices would plummet as money would become extremely "dear" and expensive. "

If I might interject, the way that the trading blocks are re-aligning, Sir Maximus may not have a choice in the "repricing" of gold. Do not discount a trading block of our own as an option with our brothers from the North and South. The metals would be a relief valve for the massive amount of stupidity over the last 20 years. It appears that dollars can be directed, thus, the distortions. The metals would be priced way into the heavens approaching Saturn, while the bubbles could deflate in an orderly way so as not too wake the sheep(keeping hope alive for the buy and hold crowd) and have them stampede. The sheep by in large do not understand the concepts of infinity and scarcity and would not miss what they do not understand(geeze, why didn't my broker get me in on this one). This would allow for political speeches about digging in, sucking it up, tighting our boot straps and so forth as our architects prepare for the next pipe dream.

While at work today, I had the very good fortune to listen to a talk show on economics for a change. The guest for nearly an hour was Robert Shiller. He of the book, Irrational Exuberance, fame. Some points that he made:

1. The stock markets are again way over valued and headed for another deep fall. He pointed out that the S&P 500, PE ratio is about 32-- almost double the norm near most market tops. --We knew this, of course.

2. The country and it's citizens are way over their heads. In debt. ( --Ditto, above.)

3. He expects a full blown deflationary depression. With home asset values taking a mild hit, about 2% a year, but he goes on to point out. If one buys a home for $100,000, puts down $10,000, finances the balance at 4% interest, and that home depreciates by 2% the first year; you've lost 60% of your initial investment. He didn't explain the math there, and my figures may be off some, but the result: 60% loss in a 2% deflation was astonishing.

4. Stocks he wouldn't call a bottom figure, but said most people will be sadly surprised at the extent of the losses.

5. He does not believe that the top is in yet in the bond market. In fact, far from it. Shiller believes that the long bond interest rate will drop to 3%, maybe lower. So, he feels this is still the place to park your money. (I kept asking in my mind-- Isn't this getting bubbly also?)

6. A question from a caller asked about the Fed's inflating of the currency, and I believe Shiller sidestepped or really didn't understand the question fully. For he said the Fed was attempting to "push on the string" and the money would have no effect, but he really didn't address the circular question of a hyper- type inflation on the dollar value, and that impact perhaps in the bond market, etc., which I feel the questioner was referring to.

7. The word, Gold, was never mentioned. Probably a good thing, for I got the impression that Shiller would fall in with the Prectorites on that one, who feel all tangible assets will decline in a deflation, as a strapped populace has to liquidate whatever they have into falling markets, if cash is needed.

All told, it was enjoyable to listen to someone else, trying to warn the Population, "Watch out, things are not what they seem. In fact, they are much worse."

---------Gdome

http://www.counterpunch.org/leupp07012003.html"....Saddam isn't in power anymore. The locals want us to leave. Why are we still here?"

http://www.fourthturning.com
In regards to the Chinese currency, when I lived there a few years back it had 3 different names .... yuan, reminbi (literally the people's money) and kuai.

I see absolutely no reason for the Chinese government to release their relationship to the US dollar ... why would they ?!? By far the biggest trading partner is the USA and Americans have become so dependent on Chinese manufacturing that it might as well be opium.

When I first met my brother-in-law about 15 years ago, his company had over 3000 US employees ... now they are down to 3 (including him) and he feels that everyone will be gone soon. He marvels at the increasing skill levels of the Chinese workers --- 'they can do everything as well or better than we can !?

And ... China has its own internal problems especially with overextended banks and is in a very weak position themselves, no way would they be foolish enough to play banker to the world. Very clever of them to tie their currency to that of their largest trading partner therby providing a stable base no matter what happens.

From 21Mabry :
'The one group over all who is knowlegable about these perils is people over 70.They know about hard times but it seems once you get several years below that 70 mark most people have the heard mentallity'

Yes this is absolutely positively 100 percent true --- and you know why all those geezers are so smart ? Because they have experienced the last Great Depression and no one else has ... and when they are gone, HISTORY IS GOING TO REPEAT ITSELF !

Let me say that again so it is crystal clear :
HISTORY IS GOING TO REPEAT ITSELF
HISTORY IS GOING TO REPEAT ITSELF
HISTORY IS GOING TO REPEAT ITSELF


You CANNOT understand what is happening in this country economically or politically without reading and understanding the book 'The Fourth Turning'. The authors accurately predicted the form if not the content of the 911 event 4 years ahead of time, and they provide a framework for understanding the huge changes that our society is going to go through, especially in the next 15 to 20 years.

I wouldn't leave home without it :)

Nomad

http://www.freep.com/money/business/trade8_20030708.htm
'Wal-Mart is the biggest purchaser of China's goods, buying so much that if the Bentonville, Ark., retailer were a country, its $12 billion in imports would have made it China's eighth-largest trading partner last year, ahead of Russia and Great Britain. '

I agree with FreeWillie's comment. Goldbugs are a "low percentage deal" as far as the gov't "recovering" (confiscating) gold. When money problems arise, they'd rather come out with a "new" peso, dollar, or whatever. Then the potentates make official pronouncements, assuring the world that the new "money" is now safer through improved regulation (via a new money security cabinet post), and can be completely trusted/tracked. I can't imagine them ever turning to gold to revive the dollar system, because they'd lose their power over the money, their ability to create unending structural advantages for themselves and their pet shenanigans.

I'd say, get your gold, and then keep cautiously quiet about it. Ultimately, anything's possible.

Noticed in some of today's posts that some have grown weary in thier attempts to educate others of what the future may hold in store. I am sure this is confusing to many of us who have tried to discuss the things often spoken here at the forum with others. I can say I am no longer shocked nor dismayed by this having had similar experiences during the Y2K saga. I expressed concerns during that time, not making predictions, but expressing ideas of what could occur. Most of my comments where met with the same blank stare that those who try to educate of the financial mess now incur.

The similar or same responses, in my opinion, are from a point of ignorance to some degree, but mostly stem from a 'crazy' idea that somehow bad things just can't happen. I wish I could share thier belief that "it" cannot transpire, or if it does happen, that somehow, the government will "fix" things. I have faith in God, friends, family, but just cannot seem to reach the same level of faith in either the honesty of Wall St, or the Treasury Dept.

Personnaly I have taken a breather from discussing things with most people. Instead I have doubled my efforts and time into once again preparing for what may come. I have no doubts that those who refused to listen, hear, see, and act will be knocking on the door seeking help. With the newly cleared acreage here at the farm, by next season I will be able to feed a couple dozen folks who might just be too poor to buy anything. Hope they know how to use a hoe and pitchfork, because as one wise man once said, "There ain't no free lunch". Course, how would you expect modern america to belief that one???

Speaking of country living, have not seen any words from Pizz of late. Hope the lad is faring well in his new settings.

Dawn comes early so I leave this place thanking all for the wisdom offered up daily at this meeting place. Goodnight, and God Bless.

Despite all the PR, lower interest rates, SM rally, etc., etc, something is in the air.

From the big city down to the outlying countryside, it's as if a dark cloud is enveloping the masses.

Mall traffic is next to nothing, bar traffic is down, and my specialty, auto dealerships, traffic is about as bad as I've seen it in 25 years.

And it's not just in my area. I'm feeling the calm before the storm.

The best way I can describe the mood is "Loss of Faith". In government, the economy, jobs, etc. Too much spin, BS, and false promises seem to be taking their toll.

Reality check? When the masses put their credit cards on hold wiating to see what happens next. . .and I feel it coming, if it's not already here.

And when it breaks, hang on to the PM's, cause their going to go higher than any may think. . . .

Pizz

Thanks for the mention, but after my small rant below, which I feel covers my macro feelings, I'll venture a bit of guild for not throwing my 2 pennies worth in more often.

Bottom line, I've been busy as heck, trying to turn around a dealership with problems and commuting weekends of about 150 miles trying to sell the old homestead.

For sale sign went up yesterday, and from a short term personal standpoint I'd like to thank AG and all the Bond vigilates out there that are making it possible to sell my house for more than it's worth. The Seattle area market is supposed to be slow, but in two days my wife has had over 5 real estate brokers call for showings. Mr. Greenspan, keep printing those bucks for at least a couple weeks. . . .

Other than that, I do like the country and when my life settles a bit more I'll be back on board. . .

Pizz

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

Stocks Add to Yesterday's Gains

What bothers me most about this rally is the fact that there is nothing out there that can justify the fundamental valuations. Stocks are still way too expensive for the amount of earnings they will generate for the shareholders. This rally is being driven by pure momentum, hope and hype. This is what the professionals refer to as a "technical rally." Don't even trouble yourself by looking at business plans, debt ratios, price/earnings ratios, sales growth, etc. Fundamentals don't work when fund managers, individual investors and institutions are chasing returns to buy anything that's moving up in price.

Buyer Beware

To jump into stocks on the long side requires some guts in my opinion! The lack of fundamental strength in this market and the fact that the individual investor is jumping back in with both feet are signs of trouble ahead. When I see momentum buying and sentiment indicators screaming euphoria, the contrarian in me says to stay away. As the NASDAQ moves higher, more people jump on board to get a piece of the action. The way I see it, the higher the market moves, the greater is the risk that it could move back down. Investors buying stocks in this environment can only be operating on "The Greater Fool Theory." To buy a stock at today's price means that you believe that there is a fool out there greater than you that will be willing to purchase the shares from you at an even higher price. I'm not quite sure where momentum investing stops and the greater fool theory begins, but somewhere in the middle there should be good fundamental reasons to own a company, otherwise it is pure speculation.

Higher Interest Rates = Problem

The problem right now with the "assumed" economic recovery is that money is now flowing out of bonds and back to the stock market, which is effectively raising interest rates. In the last three weeks, interest rates have gone up over 60 basis points for the 10-year Treasury Note, which means mortgage rates are on the rise. I believe the Fed has been counting on long-term interest rates remaining low, to the point that they would intervene should it become necessary. Next week Alan Greenspan will address the House Financial Services Committee (on Tuesday) with his semi-annual report on the economy and monetary policy. Since interest rates have been climbing the last three weeks, there is a very good chance that Greenspan will target the long bond with RHETORIC (no real action) that will influence money to move back into bonds. The timing is just about perfect, since bonds are approaching an oversold condition which should correct to the upside, especially with a little help from Uncle Al.


Black Blade: A good article overall. I said much of the same recently and even today's DMR tackles the issue to some degree. The stock rally is pure speculation as there is really no economic data that even comes close to suggesting any reason for buying stocks in the current environment. The "greater fool" may be those buying now. I am also keeping an eye on interest rates and now I am awaiting the next Fed decision (or maybe an inter-meeting cut?) to see which tack the Fed will take � interest rate cut, "nonconventional" intervention, or both. As interest rates climb I now wait for the other shoe to drop as the housing bubble looks to be set up for a big "POP". This is going to be quite entertaining to watch as the Lemmings run to and fro for somewhere to hide. And so it goes.

A good "Market Wrap Up" tonight well worth checking out and to ponder where this economy is headed.

http://www.cfo.com/article/1,5309,9923,00.html?f=features
Snippit:

According to the latest survey of chief executive officers conducted by The Conference Board, CEO confidence in the U.S. economy is picking up. In fact, The Conference Board's Measure of Business Confidence came in at 60 in the second quarter, well up from 53 in the first quarter (a score of more than 50 points indicates more positive responses than negative ones). Interestingly, about 67 percent of the polled CEOs who work in the services industry think earnings will increase. On the other hand, only 44 percent of CEOs in the nondurable-goods manufacturing sector expect an uptick in net income.

That sort of stubborn pessimism (and in an important sector, no less) underscores the fragility of any economic recovery. Many economists believe spending cuts�and not top-line initiatives�are what's fueling increased profitability at U.S. corporations. The Conference Board's survey certainly did nothing to dispel that notion. Of the respondents who predicted an increase in earnings, 37 percent said cost-cutting is what's pushing up profits. Moreover, predictions of an economic turnaround are not likely to cheer the ranks of the unemployed. That list is getting longer all the time. Last week the Department of Labor reported that unemployment hit a worrisome 6.4 percent in June. If, as The Conference Board survey suggests, an economic recovery is under way, then it must be a jobless recovery.


Black Blade: This data was played for all it was worth this week but no one was really interested in digging into the data very far or very deep. A large percentage of those polled respond that an increase in profits will come as a result of "cost cutting" (read firing workers). And manufacturing sectors are still in deep trouble. "Interesting"

Hi Pizz

"[The Pizz homestead] For Sale sign went up yesterday, and from a short term personal standpoint I'd like to thank AG and all the Bond vigilates out there that are making it possible to sell my house for more than it's worth."

Your comment reminded me of something I talked to a friend about on this topic.

I think most people have a hard time wrapping their minds around the *meaning* of a large about of money -- like the 6 or 7 figures involved in the price of a house that is changing ownership.

What they can wrap their minds around, however, is the smaller value that represents their monthly mortgage payment.

Therefore, in an environment where long-term interest (mortgage) rates are dropping, it shouldn't surprise us to discover that the final prices which are bidding on houses can naturally tend to rise as the would-be buyer discovers that the very same monthly payment can translate into a higher final bid. Fifteen hundred dollars paid each month for thirty years at 5 percent interest can translate into a hulluva lot larger mortgage price on a housing bid today than the same fifteen hundred per month could buy at 12 percent interest rates.

Everything is groovy until suddenly it isn't anymore.

Although a simplification, its probably still fair to say the boom in real estate these days is unwarranted or illusory to the same extent that these low interest rates aren't warrented for the U.S. dollar at this point in the currency cycle. Therefore I continue to advise people to pursue *Another* form of Property, and happily one without sales taxes or annual property taxes levied on it.

I dunno about you but if you ask me it (buying Gold) sounds nearly as close to a free ride as we're ever gonna get on anything in this world. The only thing standing in people's way is they've just gotta be clever enough to understand the world and then get in on it. That's a tall order that a lot of folks simply aren't up for.

Doing my bit to help 'em all out. And no, for some strange reason, unlike a lot of the experiences you guys have shared, I am not usually shunned as a madman. Maybe it's all in the delivery. Do you guys really want to extend a helping hand, or are you just looking for a soapbox and an audience for you to rant and rail against the monetary system and govermentment?

Brush it up, boys!

Gold. Get you some. --- Aristotle

http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_currier&sid=au4AeJqSa.n8
Snippit:

There is ample precedent for a ``double dip'' bear market. Investors of a certain age don't need to look it up in a history book -- they can remember all too well how it last happened, from the late 1960s through the mid 1970s. In the 1968-70 drop, according to my Bloomberg, the Dow Jones Industrial Average hit a low daily close of 631 in May 1970. A subsequent recovery took it as high as 1,052 in January 1973. Then it tumbled again to 578 in December 1974. That's right, 4 1/2 years after the 1970 market bottom the Dow hit a low that was 8.4 percent below the first. Were that pattern to repeat this time, we would see a Dow of 6,674 some time around May 2007. Even if history never repeats exactly, the grisly details from 30 years ago bear a compelling message. Could such a thing happen again? It certainly could. What's more, we have been shown that it can happen in the midst of the most prosperous age the world has ever seen.

Black Blade: Secular Bull and secular Bear markets simply don't come and go in the course of a few months. They take years. Yet Wall Street primates and CNBC carnival barkers entertain us with a lot of mindless babbling and Lemmings scurry about in fear one moment, euphoria the next, an then in fear once again. True, I am thoroughly enjoying the action as the morons spin tales of glorious days ahead in the stock market regardless of supporting economic data and sustainable growth or profits. I feel almost as though these clowns exist for my own personal pleasure to provide entertainment and to prove that history does repeat not to mention that evolution has a long way to go for mankind. I don't worry as I take precautions and hold a hefty gold insurance position along with my investments. "Worry" is not my job � "Worry" is for the Lemmings.

http://www.washingtonpost.com/wp-dyn/articles/A13627-2003Jul5.html
Speculation Fueled Rise Of Low-Priced Stocks In Stellar 2nd Quarter

Snippit:

They're BAAACK! Triple-digit gains. Hot penny stocks. "Undiscovered" biotechs. Once-bankrupt companies. Stocks that were going to make it big but never did. Even, believe it or not, the once untouchable telecommunications companies. They're all back, back at the top of the list of the best-performing local stocks for the second quarter. If this is the beginning of a bull market, it's a frightening one. Last quarter was a deja vu techfest for Washington investors, a back-to-the-future trip for speculators who miss the tech bubble so much that they're trying to inflate it again.

Black Blade: The whole rally so far has been purely speculative. There simply is no compelling economic data worthy of pushing stocks into the stratosphere.

Msg.# 105557 I am interested on how the Chinese people veiw savings. Do they as in the USA believe in the YUAN as we do in the Dollar? As this communist state ventures into capitalism,would a Chinese Goldbug have as much trouble convincing his family into investing in PM's as a capitalist Goldbug? Can you shed some light as to what the government of China will allow its people to purchase (PM's). The impact of the Shanghai market seems to have no effect on the POG.

Slingshot-----------------<>

Your question about the currency of China is answered in caps below by Sir slingshot, i.e. Yuan. Also, as Mr. Sinclair has indicated in previous posts on his site, the identity of Hung Fat & Dr. No are the Chinese gov. (and soon to be the people of China)and Islamic nations (the ones primarily involved with the Gold Dinar... I believe)respectively. So, unfortuneately, I do believe they are just generalizations of nationality and race. As Mr. Sinclair had mentioned earlier in the day about the Chinese as you indicated, I believe this later use was well within the context described above.

"GOLD BULLION JUMPING AROUND, PREPARING FOR NEXT MOVE HIGER. BUT GOLD SHARES KEEP RISING!"

Thats the headline from Mr. Larry Edelson in a recent article from Dr. Martin Weiss' Safe Money Report.

He ends his discussion with solid fundamentals for some of the gold shares (I would advocate avoiding paper and sticking with the real thing with all but your most speculative funds). However, he does continue to feel that staying clear of silver is the better bet at the moment.

"...but just take a look at what Kodak said this month in its recent earnings report--digital photography is killing earnings from its film division."

Its comments like these that make me wonder if dumping my modest holding of silver (279 odd ounces of everything from proof coinage to bullion bars)and going for the gold is the prudent action. Your thoughts?

Wait for the silver bull to break out of his pen; or do I trade em in for this sleepy but cranky looking yellow old timer? Seems as though the argument that opening up China will provide (or at least help make up) the necessary current demand for nondigital photography holds less weight with this revelation from Kodak. How much consumption of the yearly silver tonnage supply does standard photography account for again?

Peace.

Yukon

Ladies and Knights of the Table Round. I find the word, CONFISCATION, the most despicable word in the dictionary. In the pass, I have said that Gold,Is Gold, Is Gold, and in the end game all will be subject to law. I highly object to such a premise that we, who have obtained it legally for the protection of our welfare, return it to a government that has Knowingly lead us down the PRIM ROSE PATH. I assert that a bad law is not law. Why would we venture into such an investment only to cower and give into government demand, recieving a fraction of its true worth, or furture worth. Even if it is the property of the the country. Are we not the country? It is not the land but its inhabitants that makes it so. I do not wish to spread discord among this forum but the simple fact that we who own gold, gives US the control over our lives, and not the government.
We will have to make a stand.

Slingshot--------------------<>

Yes, that's the take I had on it also. It would be nice to be able to actually find clearcut references that would confirm or deny it. I shall have to start with his references and work from there, I guess, if I find the time.

Thanks for the read. Hung Fat and Dr. No are referred to as the "2 Asian traders". Hmmmmm?

Interesting the 354 line mentioned again and again by Sinclair (& Schultz). Also interesting to note that 354 has been crossed twice (early Feb, mid-May) but as if known, it has fallen below this 'magic' level. Only in the last couple weeks has gold stumbled at 354 as if in cue. Strange?

It has been said, at least a couple years ago, that the hedgers would be in severe trouble with gold more than 360. Where have these fires been? Nothing brewing, boiling over?

Maybe a little more time is required, perhaps when +354 is seen as a permanant fixture?

Thanks again.

sc

Thanks for your comments. From yours:

"I see absolutely no reason for the Chinese government to release their relationship to the US dollar ... why would they ?!?"

They shouldn't, can't or won't?

TIA

Thanks for your note.

I think I'm going to buy a small Asian mutual fund today, not alot just a bit to diversify. I'm not looking at the gain in the equities per se but moreso the currency hedge if and when the yuan/reminbi 'de-couples' from the dollar.

My handle does not serve me justice. I once collected silver but since it's multiple $5.00 failing I have quit purchasing the danged stuff. I am (and have been for 3 years) the 'goldcollector'! I will probably sit on my silver stash for a old friend of mine once said, "I buy gold because I fear for the future. I buy silver in case I am wrong about gold and I buy guns in case I am wrong about both."

Have a golden day.

"He implies that this is somehow not right or that this is unusual. I wonder, if Mr. Howe were at a horse race, would he think that only the horses' owners have the right to bet on the outcome of the race? No bets allowed among the spectators? Of course not, they haven't entered a horse in the race so their bets would be "unhedged"?" R Powell

You don't buy horses on races (Rich don't implies this).Imagine the one who bet on the right horse would GET the horse for possession!What if 3 people have betted on same horse?Poor horse :-(

Now imagine the time when everybody needed one (wildwildwest),horseraces would never be a place to buy these necessities.Ergo a horsebet is always "cheaper" than the horse itself in such an environement.

Of course,that was Another time.But what if a new time for Gold comes?

....we are aware of the pro-Euro participants and their comments.

At the other castle a not-so-pro Euroland opinion is offered at G-E:

"No rose tinted galsses worn here regarding the true mess of Zeroland
(Maddog) Jul 09, 06:17"

The last standing is the yellow!

http://biz.yahoo.com/rm/030708/economy_bundesbank_stark_1.htmlHEADLINE: Buba's Stark- can't use gold to pay for tax cuts

MUNICH, July 8 (Reuters) - Bundesbank Vice President Juergen Stark said on Tuesday that selling Bundesbank gold was not an option for the German government seeking to finance tax cuts.

"The use of gold reserves would lead to a monetary financing situation which is forbidden by the Maastricht Treaty."

The Treaty forbids central banks to underwrite government deficits.

"Such an operation would only distract from the real problem of the immense need for reform in Germany."

...Rainer Wend, head of parliament's economic committee, and Hermann Scheer, a member of the SPD executive board, said in interviews to the newspaper Bild am Sonntag that selling assets such as gold and currency reserves could raise 35 billion euros.

Stark said politicians must stop making such suggestions. "Politicians have no influence over how the Bundesbank proceeds with its gold reserves. All interference from the politicians' side must cease," Stark said.

---------(see url)------

Operative part, "...may/would LEAD to..."

Ultimately, no more blank checks for wanton government spending.

Is gold undervalued? Of course it is. Look at the relative size (value-wise) of these following numbers from the article.

If 15.5 billion euros in scheduled (2005) tax cuts are brought forward one year as proposed, the German government may be faced with borrowing to patch a 30 billion euro hole in the federal budget next year.

One year's budget gap = EUR 30 billion. Got that? Great. Now get this...

With 3,500 tonnes of gold, the Bundesbank is the world's second largest holder of gold bullion. The present market valuation of that huge stash, the world's second largest (I repeat for emphasis), is only EUR 33 billion.

Do you think it jives with other elements of reality that the hypothetical liquidation of the entirety of the SECOND LARGEST hoard of bullion in the whole world would barely be able to cover a SINGLE year's measly budget gap for Germany?

Gold, as you might have guessed, is grossly undervalued at its going market price these days.

Use your general grasp of this to your advantage, and call Centennial today to load up on the cheap.

R.

Well well, 68 now? My wishes for many more to follow. Be sure to eat all the cake that comes your way today. You'll be working it off in short order as you start reeling in all of those big lunkers. Time to put up the "Duisenberg's gone fishin'" sign. (I for one will miss your rare wit at the Governing Council press conferences.) And thanks for looking in on us. Keeps me on my best behavior.

Randy

or....Powell's payback for staying "on board" ???U.S. `going to be involved' in Liberia, Bush declares
But no offer of peacekeepers yet

Calls slavery historic crime


PATRICIA WILSON
REUTERS NEWS AGENCY

GOR�E ISLAND, Senegal�George W. Bush pledged yesterday to help end Liberia's civil war and branded slavery one of history's greatest crimes, at the start of his first presidential trip to Africa.

He told West African leaders meeting in Senegal's capital Dakar he would join efforts to enforce a fragile ceasefire in Liberia to end 14 years of war.

Bush's commitment on Liberia signalled his administration's reassessment of the continent's strategic importance, when it comes to oil, to intelligence and to fears Al Qaeda could use Africa as a hideout.

CM comment: Additional expenses incurred in Africa will increase Federal deficits. These types of ill conceived political decisions continue to impact the short and longer term outlooks for physical AU possession.

Hey, but look at it this way; maybe it is a thrifty strategy to get out the "black vote" in 2004. PATHETIC.

http://www.platts.com/risk_management/sandp/analysis.shtmlsnip;
Quarterly US Energy Commodity Pricing Report
New York (Standard & Poor's)�7Jul2003

During the past quarter, Standard & Poor's Ratings Services left its long-term pricing expectations for oil and natural gas unchanged. For 2003 and 2004, Standard & Poor's assumes that the West Texas Intermediate oil benchmark will average, respectively, $27 and $20 per barrel. For the same time periods, Standard & Poor's also assumes that Henry Hub spot natural gas will average $5.00 and $3.00 per million BTU (mmbtu). Prospectively, Standard & Poor's assumes that the price differential to regional trading points will track historic averages.

The assumptions published by Standard & Poor's are not explicit price forecasts�instead, they combine forecasting techniques with strong consideration for forecast error. Because overestimating future hydrocarbon prices tends to have the most adverse consequences for creditors in the oil and natural gas sector (which are naturally long these commodities), Standard & Poor's strives to minimize the risk of future price overestimation by using what it believes to be very conservative future prices in its modeling assumptions. If prices exceed Standard & Poor's pricing assumptions, credit ratings and ratings outlooks will be adjusted depending on the magnitude and uses of the "windfall" cash flow. Similarly, ratings could be lowered if Standard & Poor's assumptions prove too optimistic in the absence of mitigating factors.

comment;
S&P's "forecast" is geared to protecting O&G industry creditors. However, they appear unconcerned with the possibility that insufficient Oil and/or Gas supplies could cause runaway prices and cause great financial damage to energy dependent induustries. By virtue of their low price scenario they will inhibit investments to O&G producers and make it more likely for less supply and higher prices.
Another form of market manipulation that will eventually have the reverse effect as that intended.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1JUMP SPOT, Jump !
<;-)
PS: I like others (Hi, Sir Pizz) have been far too busy lately and have only had time to skim through the GREAT postings at the USAGOLD Forum !
What is that old adage, "Make hay while the sun shines!"
Keep those GREAT postings coming !
SPOT and SPIKE will be looking good, SOON !
GW

Howe's analysis of the notional amount of gold derivatives tells me that there is a great imbalance between actual supply and demand. This makes me wonder if it would lead to a price correction. If it does, then I might profit from it, if I can position myself at the correct side of the trade. Now, wait a minute! What are his data sources? Are they reliable? Do I have to make lengthy deductions to arrive at his conclusions? No! His sources are official BIS numbers, published at the internet! I can check them myself if I want to� Fine.. Cool�

If the price moves in a big way, then the short sellers come into the focus. One possibility is the application of an old rule: "He who sells what he doesn't own either buys it back or goes to the jail". In this scenario, short selling wouldn't be prudent, I would think. Legal but not prudent�

Another possibility is that the short sellers intend to default. Gold obligations have been defaulted before.. (Ted Butler even had a story of Maine Potato default at the Comex, unfortunately I lost the link to this event) .� In this case, buying paper gold wouldn't be prudent. Legal but not prudent..

On Speculation:.. 1) Ted Butler has written that selling short more than one year of production was against the commodity law. It becomes manipulation, not speculation he says� 2) Antal Fekete has made a distinction between hedging against natural risks (grain harvest) and man made risks (interest rate risk and foreign exchange risk).

Treasury's Fisher to Resign, People Familiar Say (Update5)
July 9 (Bloomberg) -- Peter Fisher, the U.S. Treasury undersecretary who eliminated the 30-year bond, will leave his post before year-end and be replaced by Kenneth Leet, a managing director at Goldman Sachs Group Inc., the White House said.

President George W. Bush also nominated Susan C. Schwab, a University of Maryland dean and former Commerce Department official, to be deputy Treasury secretary. Fisher, who has been Treasury's undersecretary for domestic finance since August 2001, will resign effective Oct. 10.

During his 23 months in the Bush administration, he was involved in some of the most important events affecting markets, including tax cuts and efforts to restart bond and stock trading following the Sept. 11 terrorist attacks.

``Peter Fisher is someone who understands markets, banking and financial services,'' Henry Paulson, chief executive of Goldman Sachs, said in an interview earlier this year.

Fisher's departure may raise speculation about the bond's revival amid record budget deficits and borrowing costs near three- decade lows. Its yield served as a national benchmark until Fisher roiled fixed income securities markets with his Halloween 2001 decision to eliminate it.

``This could make way for the return of the long bond, as it would become politically viable for the administration to bring it back, since Mr. Fisher was adamant about keeping it in retirement,'' said Joseph LaVorgna, a senior economist at Deutsche Bank Securities, one of 22 primary dealers who buy and sell securities directly with the Federal Reserve.

The QQQs in the last 52 weeks went from a low of 19.76 to trading over 32 dollars today.For what its worth those are impressive gains, my gosh after whats gone on after the last 3 years it would take more courage than I have to buy them after this latest run. The people who caught this move I applaud but for someone to jump back in the nasdog after its drop from its highs of 3 years ago thats asking alot.I know many say gold moves opposite the U.S.D. but can we have a lower dollar rising stock prices and rising gold prices. If gold moves opposite thr U.S.D what is its relationship to stocks? Do gold and stocks have to move opposite of each other?

Lovely ... I just spent 30 minutes compiling a lengthy discourse on China and poof it was gone ...

now for the short version :)

In China MONEY IS LIFE. In the West MOney is a WANT, in China it is a NEED. Chinese are the best and the brightest capitalists that I have EVER seen. They (most of them) WORSHIP money in all its forms. Gold will do well, as long as the leadership allows it to trade freely. And like most women, they (the govt) can change their minds at the drop of a hat if it is their best interest.

And on a similar note ... it is quite clear Bush & Co. understand NOTHING about eastern thought patterns ... and K.Jung is going to make them pay for that in a big way I think. Just my 2 cents ...

R.Powell I saw a large amount of sterling silver 10 ounce bars yesterday.What is the reason they make sterling bars, why not buy .999 is the sterling a good play on silver like a 40% junk bag of halves would be? I just was wondering why sterling bars.Writing this has reminded me that I have not seen physicalman post in a while.

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1SPOT got BURIED at the NY close !!!
Low of the day !
Who was it that said the COMEX bookies were losing their touch ?
<;-(

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=1&u=/nm/20030709/bs_nm/economy_treasury_fisher_resignation_dcWASHINGTON (Reuters) - Peter Fisher, the U.S. Treasury Department (news - web sites)'s undersecretary for domestic finance, offered his resignation on Wednesday, to be effective Oct. 10, Treasury said.

"I have come to the conclusion that it will be best for my family to return to New Jersey and, therefore, I write to submit my resignation as Under Secretary of the Treasury," Fisher wrote in a resignation letter to President Bush (news - web sites) and released by Treasury.

comment;
Wowsers! New Jersey! Thats really a convincing draw. I'd like to know what he knows. Maybe he's going to write a book.

Anybody who wants to, "go back to New Jersey" must have Another motive :>).

I am sorry you lost your China/money disquisition. From the short form, I suspect it may have been worth reading.

Re Nomad #105587Strange that a government of men should behave like a woman. Maybe we'll know for sure if they spend their cash on jewelry :-).

1-800 869-5115 I like the Silver Eagles myself but I have very little knownledge of silver coins or the different forms of physical that's available. I hold mostly Eagles and a few bricks (100 ouncers). The listed phone number will connect you to some pretty good brokers that can answer your questions and will accept your fiat for metal.
Rich

Maybe Tony made him an offer...

The veneer wears thinner.

http://www.scoop.co.nz/mason/stories/HL0307/S00064.htm

Anyone care to comment?

The system is so corrupt that I wouldn't doubt that this is true. One day we may get a 100% Bush victory like Saddam Hussein did, while his popularity keeps plunging to record lows.

http://www.usagold.com/DailyQuotes.htmlSnip:
"As a side note it is interesting that even as the Fed has been "cranking up the presses", some currency strategists, bankers and traders are increasingly concerned that there are "not enough dollars" to stimulate economic growth. This perceived "limited availability" of dollars has led to a relative strengthening of the dollar against other major currencies. This perception appears to have countered the Federal Reserve's plan to weaken the dollar sufficiently to stimulate economic growth and deflect market concerns of deflation. Also of concern to currency market players is that the "Currency War" has effectively been lost by the Americans. Japanese monetary authorities appear to have been fairly effective in their "stealth" currency market intervention campaign for the time being by selling Yen and buying U.S. dollars after several months of limited success. The real question now is what will the Federal Reserve do next. Perhaps the decision will be to "fire up the printing presses" as Federal Reserve Ben S. Bernanke has proposed in a concerted effort to weaken the dollar and counter deflation concerns with higher inflation."

Waverider: Great DMR today (again)...Rich don't miss this one, silver's addressed in today's comment section!

I grew up in NJ (1940-1950) and still love the Jersey Shore but you couldn't get me to live there.

Fisher has enough inside info to make a good living wherever he goes. The bigger question is why did he leave? My guess is the 30-year bond kill is now seen as a mistake and will be reversed. Any other guesses? If they turn over enough Treasury guys someone is bound to blow their whistle on the scams. I'm surprised it hasn't happened yet.

Look at that S&P reading on INO: "100222, +2624". (Quick -- before it goes away ;) Now there's a JAM JOB!

I'll never be a Bear again. I'm handing in my salmon license and my honey pot.

Ok, OK �. You convinced me :) I'll try my China thing again.

A little background first, a few years back I used my mid-life crisis to bum around the world for a few years --- going to a whole bunch of places I probably shouldn't have --- Cali, Colombia, Siberia, Zurich, Saint Petersburg, Mexico and finally China. I have some opinions on China, but the caveat, of course is that I am a foreigner (lao-wai) of course and my viewpoint is outside, looking in.

With that said, I think Chinese culture is influenced by 3 main things �

First, is that the lessons (most of them hard) learned from Communism and most especially, the Cultural Revolution. My wife who is only 25 has more than a few stories about shortages of food while she was growing up and the (relatively) extreme poverty everyone (with the exception of the leaders) experienced. My father-in-law has stronger tales of surviving the famine of the late 50's/early 60's. In any case, the end result is a very strong desire on the part of average Chinese to �accumulate� as much as they can in as short as possible time period. With possible (occasional) exception of family, there is nothing as important in Chinese life as money. As an example, each year on April 5 the Chinese have their equivalent of the Mexican �Day of the Dead� to honor ancestors. The way this is done in China is that each family goes out (usually into the street) and BURNS a pile of (symbolic) money so that it would go to heaven and the ancestor would be well �supplied�. See, even in the Chinese version of heaven you need money :)

A second feature of Chinese culture is the lack of a safety net. No (or very, very few) charities, no social security, food stamps, etc.) And since one of the primary lessons of (1) above is that the government with absolute power uses it to absolutely destroy everything they can get their hands on, and you have the ingredients for a society where saving money, investing and �business� is almost a religion in it's own right. Try to talk to Chinese about the concept of �enough� money and sustainable living/environmentalism and you get looked at like, well a big nosed foreign devil (da-bid-zi lao-wai) which is something they will call you on the street right to your face without hesitation, not in a mean way, but kind of like the curiosity we would show to a Martian, say. You're just a very new and strange specimen for them. But the rising cancer and environmental disease rates (something my wife and her family have experienced first hand) is just beginning ot open the eyes of the some of the most intelligent to the costs of unbridled capitalism. In any case, the world's greatest capitalists (and they truly are) have managed to go from pure poverty/nothing to complete and total domination in manufacturing and economics (huge trade deficit) in just under 2 decades. They own us, literally, lock stock and barrel. We just haven't realized it at anything other than a subconscious level.

And finally, strangely enough is the lack of a culture. So little remains after the sheer destruction and desecration of the Cultural Revolution, that China has little or no choice but to adopt most if not all the viewpoints of the West, although Japan seems to have a large influence as well. In any case, China has very little culture of its own and what little it does have appears only in areas overlooked in the Great Rampage, such as Tibet and XinJiang in the west.
So as for gold, yes it will be a large success, I think. Unbeknownst to the west, there have been several internal bank runs staunched by the ready application of huge amount sof cash. But the Chinese banking system is in huge trouble and without massive government manipulation would collapse easily and quickly. And Chinese know this and respect the possibility, so I think we will see quite a few individuals moving towards the �safety� of precious metals. And in any case, in a nation of 1.3 Billion, it will not take much interest on the part of the public to initiate a bit of a gold rush.

Finally, I would like to comment on K.Jung of North Korean fame. I think Bush & Co. understand absolutely NOTHING about eastern ways of thought or negotiation and that lapse is going to have catastrophic consequences in the future. N. Korea is not Iraq, and Iraq has quickly become a quagmire in its own right. N. Korea has more than 2 million fanatical soldiers poised on the other side of the DMZ, just waiting to die for the glory of their leader � and millions more starving to make sure that the military machine continues to function. It's a disaster just waiting to happen.

Anyways, that's my viewpoint and hope that it's been helpful.

Nomad

We'll swap stories sometime, but talented guys like Fisher -- well, think "consigliere" -- will always find employment near the top (what you said). Muscle always needs brains, and, at some level, even respects it.

He's in a class with Rubin. What big bank/brokerage house wouldn't be after him now?

Or maybe he's going to go join Amnesty International and get innocent people out of torture chambers? Yeah, and I'm playing doubles with Anna Kournikova this afternoon...

Your words....

"Howe's analysis of the notional amount of gold derivatives tells me there is a great imbalance between actual supply and demand."

I've always had trouble with the notion or concept of "notional amount of gold derivatives", especially as to any amount of net (as opposed to gross) exposure. Could you give me a definition of this notional amount?

There are always short sellers involved with anything that trades as a commodity. As long as speculation is allowed, there will be shorts. This is true with all commodities, market index numbers, individual stocks etc.

The shorts do not intend to default, they will cover if necessary. I'd guess that the vast majority of them are already covered (hedged!). There are also naked shorts in corn, wheat, soybeans, soybeanoil, cocoa, cotton, coffee, copper, the S+P index, the Dow, the Nasdog, etc.

Just as betters on the horserace will settle their bets after the winning horse is official, so too commodity bets are marked-to-market every day and settled within certain time limits. Those who bet and lost on the race will settle their loses with money, those who bet and lost in the gold market will settle their loses with money. No horses are owed and no gold is owed. The bet was on the result of the race, which horse won. The gold bet is on the price of gold at a certain time. Money settles the bets, there will be no gold default, there will be no derivatives meltdown. How many times do we have to travel through the $354 POG number before people realize that the sky will not fall at 354, 412, or 1012.

If it's physical gold you want and ask for from derivative paper contracts, then delivery default of physical gold is possible (not probable but possible). However, actual delivery applies to about 2% or less of all contracts. People who want real, sizeable amounts of gold usually buy from brokers like our host or through private deals. The derivative situation Howe refers to is a monetary paper game.
All my opinions are subject to constant revision. Lord knows I'm wrong more often than the average Joe but I keep trying. I've never been comfortable with anyone's definition of notional derivative value, maybe since no one has given a plausible explanation or one that makes sense to me. So I'm stuck right there as Howe's thoughts continue from and are contingent upon accepting (and understanding) this "notional amount of gold derivatives" concept. How do you understand it?

Are the silverbugs happy today? (;>) Are we once again just knock, knock, knockin on heaven's door or does POS continue up? I'm always long but I'll take this 480+ level as a chance to hedge my bets so that I'll not be wiped out if silver wants to decline sub 450 again. Many longs but mostly hedged? What's the notional value?
Rich

Thanks for giving us your view, and I hope for more insights anytime they occur to you. Nice to have our attention focused on a people who are so singly focused on capital accumulation, while we are on permanent vacation.

Along with Hubbert's Peak, China is probably the single greatest smack upside the head that's coming our way. I just take it as a message to get in gear and do what they're doing. They ARE the competition; not necessarily the enemy, and we can do much to keep it that way.

When you mention banking instability, I would think that these countries would have already converted their personal savings to gold, leaving only the currency they needed to transact daily business. How can they still be so trusting?

Or is it that, in most places, a lifetime's savings still remain at 1 ounce or under for most of them? Seems low to me, and seems they would have already accumulated their 10 or 20 ounces each, if they could. (I'll leave it to others to do the traditional "Chinese calculation" of a billion people times whatever you're selling at the moment.)

The lack of a culture certainly screams of business openings, too. Something like the way Japan soaks up pieces of Western pop media in waves of fads? How to get in front of that one?

Thanks again; keeping us THINKING!

The problem with the "real" (pre 63) silver dollars and the silver Eagle bullion coins is the additional premium that goes along with them thanks to collectors and numismatists. Even the Canadian silver Maple Leaf often has a hefty premium involved that prevents any accumulation profit from silver unless it increases above $10oz. Bars are a good way to get silver in bulk, as are the 1oz rounds struck by so many different mints.

However, I like my silver to be cheap and attractive... that's why I tend to accumulate restrikes of the Maria Theresa Thaler. It has 0.75oz of silver per coin (almost the same as the real silver dollars) and just has attractive designs, and was actually money at one time. In fact, some countries in Africa still use them as a trade coinage between traders of different countries. Plus, they're still fairly plentiful.

Hello Jon,

please let me also chime in to offer my humble kudos to a job so well done. It does seem to me you are striving for a pulitzer nomination, quite the first for an P.Eng. I presume.

Your forte' making real sense of and translating government and media spin by reading between the lines, or is it its lies is extraordinary.

Thanks BB, your efforts are very much appreciated! cb2

Cisco Says CEO Misunderstood by Dutch Daily
Wed July 9, 2003 01:10 PM ET


CHICAGO (Reuters) - Cisco Systems Inc. CSCO.O officials on Wednesday said comments attributed to Chief Executive John Chambers about an imminent recovery in the technology sector were misinterpreted by a Dutch newspaper.

Dutch daily Het Financieele Dagblad quoted Chambers as saying at a meeting with European reporters in San Jose on Monday that corporate spending on information technology would recover in the next two to four months.

But Cisco spokeswoman Robyn Jenkins-Blum said Chambers actually said companies would start spending on information technology two to four months after their own businesses turn around.

"There is nothing new in what John has been saying the last several quarters," Jenkins-Blum told Reuters. �END-

Thanks for sharing! Appreciated.

Gold. G. y. s. --- Ari

Would you be interested in any attempt by me to explain? If so, I'll give it a go.

GGYS --- Ari

Congratulations on using your midlife crisis to "bum around the world for a few years". Nothing ventured, nothing gained and I'll bet, years from now, when we're all a lot older (as in closer to death), that you'll look back on your road trip as one of the best decisions of your life.
Thanks also for the insights into the ever present potential of a large amount of people buying a very limited amount of gold and silver. The paper market may be unlimited, but the real physical market is not!
Rich

Of course, yes. Though we don't always agree, there are few whose opinions I regard as highly as yours.
Rich

Thanks, but no need for the PE insult, I am a geologist. ;-) Just kidding of course.

Note: for anyone wondering, geologists and engineers tend to butt heads at times. Generally just the differences of opinion between scientists and technicians.

Off to the gym!

P.Eng and real earth sciences - or is that still wrong?

OK, let me say Geo's are the salt of the earth - oh, only right after the local prospectors panning their way to glory - sometimes.

As you're acquainted to Win Rowe and the rest of the top geo's in NV - please read some news on the Sleeper Project by Larry Kornze and Ken Snyder.

Off to bed - though not before offering a cold one - between Love Lock and Winnemucka, up to where QEII sailed the Humboldt! ...
cb2

Black Blade (7/9/03; 17:04:19MT - usagold.com msg#: 105611)
Re: CoBra(too)

Thanks, but no need for the PE insult, I am a geologist. ;-) Just kidding of course.

Note: for anyone wondering, geologists and engineers tend to butt heads at times. Generally just the differences of opinion between scientists and technicians.
===
OK BB,R.G.PhD., SURE -- JUST KIDDING!! -- YOU have insulted SOME of us P.E.'s and this one challanges you to a DUEL ! You better get home from the gym soon as to choose your weapon for the contest --- either 1) throwing of gold ore pieces at ten rods, or 2) downing (drinking) of the most cans of your favorite brew. Winner gets all the ore, or, has the loser pay for all the brew. Maybe we should do both with the brew as Phase One ?
GW P.E. of 42 Years !
<;-)

USAG 105612Definitely; right as rain!

http://www.fourthturning.com
One thing that I forgot to mention has to do with mathematics :)

As most of you know, China has a one child policy which is enforced with varying degrees of success but overall seems to be working rather well. In addition, some of you might also be aware that the higher the education and general standard of living in a society, the less that women are inclined to bear children, thus simply raising the economic standard of living of women has a large effect on the population figures for a country.

Now figure that for the last several decades in China Grandma & Grandpa have one child who marries one child from another family --- this couple then has a single child of their own. And then, that child goes out and finds a spouse and they too have a single child. Now ALL OF THE WEALTH from the 14 people older relatives will (eventually) be funneled down to this ONE CHILD. That factor alone (forget about economic domination) is going to skyrocket the standard of living of (at least the urban Chinese) in just a few decades.

Please don't forget to check out the Fourth Turning (Strauss and Howe). Head out to the library and I'm sure it will be there for free.

Nomad

That's a tough choice as phase two could be much more costly if you know your geologists. ;-)

I guess I had that coming but I couldn't resist.

Cheers!

- Black Blade

BB I am about 250 pages into the Prize its an excellent work the founding of the big global oil companies makes great historical reading.You can really see the intertwining of the global elite in buisness and politics.History is quite diffrent then what people are taught.A part of the book that made me think of ANOTHER AND FOA was the Saudi ruler wanting gold in payment for his oil concessions.50,000 soverigns were packed up and sent to him they all had pictures of British kings faces the company buying the concession thought a queens face on the coins would not be liked by the Saudi king.Its an excellent book, Yergin is a very knowlegable man.

http://www.nypost.com/business/87.htm
Snippit:

July 9, 2003 -- U.S. consumer debt rose in May as households encouraged by the lowest interest rates in 45 years continued to buy on credit, Federal Reserve statistics showed. Consumers racked up $7.34 billion more in debt by adding auto loans and credit-card balances during the month, a 5 percent gain, following a revised increase of $7.83 billion in April, the Fed said. Household spending, which accounts for two-thirds of the economy, has continued to expand even as manufacturing and business investment have faltered. At the same time, with the U.S. unemployment rate at a nine-year high of 6.4 percent in June and consumer spending rising at half the average rate of the 1992-2000 economic expansion, some economists question whether the rate of borrowing can continue to be strong. The May rise in borrowing brought total consumer credit to $1.76 trillion. The Fed's monthly report doesn't track loans secured by real estate, such as mortgages and home equity loans. Such debt increased 2.8 percent to $6.219 trillion in the first quarter compared with the fourth, the Fed said last month in a quarterly report.

Black Blade: Some scary stuff here. People continue to dig themselves deeper into debt and many are willingly putting their homes at risk.

http://money.cnn.com/2003/07/08/commentary/column_hays/hays/index.htm
Snippit:

NEW YORK (CNN/Money) - Leading, lagging or sagging? That's the big question hanging over the economy in the wake of the June employment report. A lot of folks on Wall Street were quick to dismiss the big jump in the unemployment rate last month to a nine-year high of 6.4 percent, saying that it's a lagging indicator, that the economy will turn long before the jobless rate does.

One reason the unemployment rate lags coming out of a recession is that companies don't start hiring workers again until they absolutely have to - until they are certain that demand is picking up and they have wrung every last hour of overtime out of their existing employees that they possibly can. So, given that the unemployment rate is lagging, do we simply cast it aside? Or are there other indicators to watch, maybe even some that tell us what the economy is doing right now and where it might be heading?

Of course there are, and two of them also come right out of the labor market.

For starters, there's the net number of new jobs created each month, known as non-farm payrolls. Payrolls fell 30,000 in June on top of 70,000 in May and they have been falling for five months in a row. (Manufacturing is especially depressing, cutting jobs for 35 months in a row!) In fact, employment is one of the four "coincident" indicators that are used to date the beginnings and ends of recessions and recoveries. So, this is one more piece of information saying that even if unemployment lags, the signal of weakness it's sending may not be inaccurate because this important coincident index is telling us right now there's still no net new job creation.

As for where we are heading, the weekly new claims for unemployment benefits are one of the ten items in the index of leading indicators along with things like building permits, orders for big-ticket durable goods, and money supply. And what did they do last week? Jobless claims jumped by 21,000 up to 430,000, and have been above 400,000 (a rough sort of rule-of-thumb level above which the labor market looks yucky) for 20 weeks in a row. So here again, the leading indicator seems to be confirming the message from the unemployment rate: the labor market has not turned yet.


Black Blade: Of course Wall Street primates and CNBC carnival barkers refuse to mention that unemployment data is also a current and future economic indicator. They will always press the hype that it's a "lagging indicator". This indicator has been "lagging" for four years. By all measures it also suggests that the present and future will be no better.

http://www.signonsandiego.com/news/business/20030708-9999_1b8jobless.html
Snippit:

A sustained economic slump and an increase in benefits for the jobless are depleting the reserves of the state's unemployment insurance fund, which could leave California employers on the hook for rebuilding it. The state Employment Development Department said last week that unemployment reserves � which pay the weekly benefits of jobless workers � stood at $3.56 billion at the end of last year but are expected to total just $430 million by the end of this year. State projections estimate a deficit of $1.17 billion by June 2004 unless the reserves are replenished.

The state's unemployment insurance fund is fully financed by employers, who are taxed on each employee based on the company's record with unemployment claims. The state blames the length of the current recession for creating the funding crisis the unemployment fund now faces. "Everyone keeps looking for this recession to turn around," said Deborah Bronow, deputy director of the state Employment Development Department. "But it hasn't yet, and that's what's caused our problems." In addition to assessing employers a higher tax level, the state has the option of borrowing from the federal unemployment fund. Six other states currently are borrowing from the federal fund, which also is funded by employers and provides a backup to state programs.


Black Blade: I think California had better plan on several more years of recession. I see more and higher taxes coming for Californians as well. It's getting quite ugly and this is only just the beginning.

Where o where are you ,your presence is sorely missed. awaiting patiently though.

Thanks Sir Nomad for the great posts about China.
Slingshot----------<>

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

Too Much Could Be Too Late

If interest rates have bottomed or worse, if they start to rise as they are now doing, the refi and housing boom will come to an end. Then what is left to grow the economy? The U.S. trade and current account deficit has created a world-wide credit boom that has wreaked havoc and created asset bubbles everywhere it has landed. It has created a glut of excess capacity globally in just about every industry. There is simply too much capacity and widgets around the globe. This is hurting corporate profits, impeding new investments and creating deflationary pricing pressures globally. The problem is that America's recycled trade deficit dollars have been recycled back here to the U.S. Foreigners have been reinvesting their dollars into our bond market, our stock market and our real estate. The reason they are doing this is not because they think the U.S. offers superior investment opportunities. They are doing so in order to neutralize appreciation of their currencies. When they receive our dollars in exchange for goods that we purchase from them, they can either exchange out of those dollars into their own currency or invest those dollars here. By investing those dollars here, they keep their own currency from rising which would hurt their export business.

As a result, our cumulative trade deficits of $3 trillion will only get larger and become unsustainable. Foreign institutions will then have to make a decision to either fund reckless credit creation here in the U.S. or pull out and go elsewhere. The U.S. credit bubble will then come to a screeching halt. It can come to a halt simply by refusing to invest existing trade surpluses, much less pull out or sell what they already own. A trade deficit that is now running over $500 billion, if reinvested here in the U.S., will give foreign institutions control of over 50% of U.S. Treasury debt within a few years. This trend is unsustainable. A trend has already begun to diversify out of the dollar, which is why foreign currencies are moving up and the dollar has been moving down. What could accelerate that trend is a shattering of the new economic paradigm or second-half recovery myth.

And this:

The other choice is to go with the new emerging bull market in things. As you can see in the charts below, the price of energy, metals, and commodities are rising. Gold prices are up for the third year. Oil is hovering over $30 a barrel. Natural gas is still over $5 and we haven't hit winter weather yet. Foreign currencies are up double digits this year and the dollar is still down for the year with the trade deficit accelerating. Monetary and fiscal conditions are creating a fertile environment for hard assets, not to mention fundamental supply and demand conditions which are also bullish.


Black Blade: Another good one from Puplava tonight. Ties in nicely with the "Currency War" and booming debt. Meanwhile I am just kicking back shaking my head at the dolts on CNBC and thoroughly enjoying every minute of it. It is amazing to watch "natural selection" in action as Lemmings blindly follow the pied pipers of Wall Street over the cliff into the abyss.

http://www.billparish.com/index.html...one guy can't make a difference? (Microsoft's changes in options announced today)

Yes, Belgian, ou est-tu?

Probably the key here is to accept that the counterparties of the derivatives aren't selling each other a conventional quantity of goods (i.e., currencies or commodities.) If they were, we wouldn't call them "derivatives," right?! Right. So what are they buying/selling? Generally speaking, with a risk-hedging or speculative-profit motive they're buying an income stream or a lump cash settlement, the value of which is *derived* from an underlying financial structure.

"Notional value" is an expression of the size of the (mostly uninvolved) underlying assets upon which the derivative service payments are calculated.

At this point, I'm guessing that an example will get us further down the road to our destination. I'll use a generic swap in this walk through because it'll lend itself to broader applicability and understanding.

In a plain vanilla swap we have a contractual agreement between counterparties that agree to make (or receive) payments to (or from) each other over a defined period of time -- the service payment(s) being determined by the conditions of their particular swap and further influenced by movements in the referenced market. Hang on, this should become clearer in a bit.

** A lame currency swap example **

We could assume in this example that one of our counterparties is a business that is headquartered in the U.S. but has branch operations (and euro-denomicanted expenses) in France, while the other counterparty is headquartered in France but has dollar-denominated expenses for a contractor based in America.

If they are each looking to "lock in" current exchage rates or otherwise effectively hedge themselves against currency movements over a period of time, they could approach one of the few big banking institutions (e.g., JP Morgan Chase) that also offer substantial services as a swap dealer.

The deal (swap) is struck like this. Sort of. Well, not really, but bear with me. The two counterparties exchange tonnes *tonnes* TONNES of currency up front with each other at the desired fixed rate, enough to cover their future foreign currency obligations as far out in time as they desire. See what they did there? I guess that's why they call it a swap.

Well, in *REALITY* they usually don't actually swap assets up front. That would be inefficient and would tie up a helluva lot of capital. What they do in fact do, however, is to establish a hypothetical principal amount of dollars and euros as the *notional value* of the swap at a reference exchange rate over its pre-agreed tenor (period of maturity). Imagine this notional value to be approximately equal to the size of each counterparty's expected monthy obligations in the foreign currency.

Over the tenor of the swap, the counterparties then make a monthly service payment to each each other in the form of a compensating differential for the amount that the market rate in their currency has drifted from the original reference rate that they agreed upon. Barring risk of counterparty default, this swap contract effectively hedges the exchange rate risk for each party with a typically small service payment -- basically the "notional" principal served only as a part of the mathematical basis for calculating the exchange rate differential payments.

** A better interest rate swap example **

You know, that was all probably less than as clear as I had hoped for. I can probably set up an interest rate swap to provide an even better example than that currency swap to demonstrate how notional (hypothetical asset) values are used and how they can dwarf the actual service payments between counterparties.

Imagine simply that there exists a party who has an income stream based on fixed interest rates and payment obligations that are based on fluctuating market rates. For example, this could be a financial institution receiving fixed-rate mortgage payments as income, who is faced with paying floating market rates to its depositors. Obviously, they would like to hedge their exposure to a risk of rising floating rates. Basically, they would like a hedge that would "swap" their fixed rate income stream for a floating rate income stream that will rise (or fall) in tandem with their payment obligations.

On the other side of the fence, imagine a party who is a floating rate receiver but would like the surety of being a fixed rate receiver to balance against their own known fixed rate obligations.

Once again, one of a only a few large banks stand ready to play middleman in pairing up these parties with their specialized services as a swap dealer. JPMChase, for example.

In this simplified pairing, the notional value of the swap is merely the mathematical basis of hypothetical principal that each party hypothetically "lends" to the other upon which their respective service payments of fixed or floating interest are calculated and paid to each other.

One counterparty has a fixed rate payment obligation to the other, while this latter party has a floating rate payment obligation to the former. If the counterparty payments are on the same schedule, the difference is simply netted out and only the fixed-floating interest rate differential need be made (or received) by one of the counterparties.

As you can see, this differential service payment can be relatively small and insignificant when compared to the huge *notional* amount that represents the hypothetical principal being "lent" (and therefore is NOT at risk) as the basis for the periodic payments forming each leg of the swap.

To apply "notional" value to other derivative contracts, you simply need to evaluate what the actuals are and aside from that, what is merely a basis for mathematical computation of the service payment.

In the case of a standard Gold futures contract on the NY Commodities Exchange, when you and your counterparty plunk down your couple thousand dollars as margin on the contract at a then known reference price, the notional value of that derivative contract would be 100 times that reference price because you and your counterparty are hypothetically agreeing to transact 100 ounces of Gold at that price. But as we both know, that transaction nearly never takes place -- as the market price for Gold deviates from your reference price during your participation in this contract, one counterparty is simply obligated to pay 100 times this deviation between market and reference prices.

The fly in the ointment, however, is that there doesn't exist a *true* market price for Gold because its market price is largely obscured and determined by the very same betting action that determines the contract's reference price as it stakes its wager on Gold's "market price." It's a self-fulfilling operation that asymmetrically favors the shorts in this inflatable papery realm.
For as long as confidence and participation holds, only in superficial name, essentially, does this type of contract market have any connection to the physical market for Gold.

Therein lies the rub as I see it -- namely, the structural asymmetry that favors the shorting of paperGold and hence, the unacceptible use of this method for price discovery. But that's ANOTHER story. In the meanwhile, I hope you've gained some additional insight in the meaning (or lack thereof) of the notional values (and their sizes) as expressed in derivative positions.

Gold. Get you some. --- Aristotle

http://www.aci.net/kalliste/gold_index.htm
Mr Grabbe has a most interesting Web-Site - I find his Study/Report regarding Gold interesting. You may as well.
I have only posted the titles of each Part 1 - 6
Go to the link above for a complete read.

The Gold Market:

Part 1: Gold in the international financial system. The London Gold Fixing.

Part 2: Spot gold trading. The London Bullion Market Association.

Part 3: Gold lease and libor rates. The forward price of gold. Gold swaps.

Part 4: The World Trade Center bombing and the gold market. Gold futures. Exchange for physicals.

Part 5: Gold FRAs. Gold interest-rate swaps. Gold interest-rate guarantees.

Part 6: Gold options. Options as insurance contracts.

These articles are parts of a work in progress.

I must say that the site mentioned does have nude photos of females.

I do not in any way condone or support the exploitation of the female persons portrayed on that site. Sadly I suggest that it reduces the integrity of the otherwise valuable information provided there.

Cheers "S"

http://news.bbc.co.uk/2/hi/business/3055625.stmThe Bank of England has cut UK interest rates by a quarter of a percentage point to 3.5%.
Pressure had been growing on the Bank to cut rates in order to stimulate growth in the economy.

But many analysts had expected the Bank to hold fire this month, possibly trimming rates in August instead.

However, the Bank's Monetary Policy Committee (MPC) - which was chaired for the first time by new governor Mervyn King - decided that action was needed now.

WAC: Merv starting with a bang!

When I was in China recently, I asked if the One Child policy also implied One Grand Child. It turns out that it does not. If a couple gets married and they are both only children, then they are permitted to have two kids.

I am expecting pog to touch bottom somewhere between
335 and 340. Anybody else got any inklings?

http://www.atimes.com/atimes/Middle_East/EG11Ak01.htmlSnip:
"Less visible than the pedestrian plundering afflicting Iraq's cities and archeological treasures, another looting operation from on high is in the works: the Bush administration has been moving with great alacrity to take control of the major prize to be won in Iraq - strategic control over the country's considerable oil wealth.

It has become clear that there is a yawning gap between the Bush administration's sharply focused war plans and the absence of workable postwar plans. Post-Saddam Hussein Iraq is caught in the twilight of an occupation veering between high imperial purpose and profit-making impulses. Symptoms of crony capitalism - championing privatization schemes and rewarding corporations closely connected to the George W Bush team with reconstruction contracts - collide with strategic visions of remaking Iraq in the US image. And the sobering reality of unrelenting chaos that has engulfed much of the country may well unravel Washington's ambitions to present a remade Iraq as an irresistible political and economic model for the rest of the Middle East and to use this new asset to reinforce US leverage over the world oil market."

Waverider: A well referenced commentary on post-war Iraq and oil, politics and power - this could be the next chapter in Yergin's "The Prize".

Thinking about the totals out there; the interest rate derivatives being much larger than for gold and easier to paper over (at least for a longer time); then will the gold end game (physical shortage overtaking paper hanging) be a trial run for how to deal with the interest-rate blow-up?
Or will it cause it, moving us into the Big Bang?

Thanks for reconstructing the lost China post.

Found your comments on the culture interesting. I have often wondered, as the suppression factor of the Communist leadership relaxed, how much of old tradition would resurface: not only the saving/business part, but the family-centered/zou hou men (enter through the back door)/guanxi (mutual oblications) part (which I guess never was significantly repressed successfully), the spiritual/superstition part, and the respect of scholarship.

I am seeing more articles about silver appearing on websites.Richard Russel has a recent one out,many are saying its time to buy it, they also discuss supply problems and the same thing Butler and Morgan have been saying the past several years.

http://www.usagold.com/Order_Form.htmlUpdated.

An analysis of what's happening in the gold market now. Here's an excerpt:

"I'd like to have a one ounce gold coin for every
client and friend who called over the past several weeks asking if I could make
sense out of what's going on. For these astute observers, the action in the
markets did not match the economic realities -- the daily news, if you will. My
explanation was/is that the markets now are not moving on objective reality but
crowd psychology. The sentiment swung toward stocks and the dollar for
awhile, and I now I detect sentiment going the other way -- to gold, the euro,
and real things.................Along these lines there was an interesting, albeit
brief, article in the Financial Times today about a new book by a
mathematician from Temple University named John Allen Paulos. Intriguingly,
the book's name is A Mathematician Plays the Market. After debunking
religiously subscribed methodology like the Elliot Wave theory, the Six Sigma
and most other mathematical market modeling, Paulos states that 'the
fundamental problem in analyzing markets is that human beings are
involved.'...... "Take for example," the article reads, "the efficient market
theory, which states that prices already reflect all available information and thus
it is no use trying to beat the market by using publicly available data. Paulos
points out that if most people believed the theory, they would not bother to
comb the market for new information...In other words the efficient market
theory can be true only if most investors believe to be false." ........ Now
there's a conundrum to ponder while swinging languidly in the hammock, a
cold Arnold Palmer nearby to aid the reflection........ Themes like this, by the
way, and a few others, reside in the latest 16-page issue of News & Views on
the way to our clientele. Those new to this site wishing to learn a little bit more
about the gold market and USAGOLD - Centennial Precious Metals role in it,
would be sell served to request an information packet which contains a copy of
our highly regarded quarterly review."

I've linked the information packet above.

http://www.usagold.com/AMK/MK-gold.htmlAnd here's the link to today's full report

http://focus.comdirect.co.uk/en/detail/_pages/charts/main_large.html?sSymbol=GLD.FX1a nation of one (07/10/03; 07:39:11MT - usagold.com msg#: 105630)
one inkling
===
YES, Sir ANOO -- The Hobbbits think (like you) that the $340 line may be the "magic line" !
HOLD that Line for just a while longer, SPOT and SPIKE.
Goldhearts' time is approaching !
<;-)

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

Save your "strength" -- call us today and establish your financial base!

http://www.usagold.com/gildedopinion/microsoftfraud.htmlYou have a very good memory. I believe it was in 1999 that Bill started his intensive writings on this topic, and we were fortunate to get some early exposure to it here at USAGOLD. It was March 23, 2000 that we were able to bring forth his report "Microsoft Financial Fraud" within our Gilded Opinion pages. Everyone is invited to review it at the link above, or access it via the Gilded Opinion index.

In e-mail correspondence I had back then with Mr. Parish to secure his generous permission to share this report, he requested that we also share the following comments which he provided to me at that time (and which you will find appended at the conclusion of his report):
---
"My overall perspective is that we will see a significant redistribution of resources in the market once this fraud is fully exposed. Many quality companies are trading at very reaonable values and they should benefit as more interest from investors occurs, in particular, small and medium companies with boring yet stable earnings growth.

"Please thus note that I am optimistic about the economy if we can somehow address this significant financial fraud at microsoft.

"I certainly don't see big gains going forward in the overall stock market, but rather a mini version of the 1970's--higher inflation (in particular wages), but still a lot of new jobs and opportunity.

"The message is to focus more on hard assets and diversify.

"Thanks for reviewing my study."

best regards, Bill Parish
---


Here again (given below) is the "teaser" excerpt as provided at the Gilded Opinion index. It may help some of our readers decide if they want to click open the report for further review.

__________________________
"Microsoft Financial Fraud" by Bill Parish / Parish & Company

"We live in extraordinary economic times here in the U.S. and this success could ignite a whole new cycle of economic prosperity.� We must first, however, take a hard look at what is occurring at Microsoft.� Microsoft is a great company with terrific employees.� Sadly, many of these brilliant people have been blinded by the stock price and unable to see that Microsoft is also the key architect of the greatest financial fraud/pyramid scheme this century.� It is not uncommon for participants in pyramid schemes to lose their emotional bearings. My close friends who work at Microsoft are particularly upset over my work and it is possible that even Bill Gates and Steve Ballmer do not realize the implications of their financial practices.

"The fundamental problem is that Microsoft is incurring massive losses and only by accounting illusions are they able to show a profit.� Specifically, Microsoft is granting excessive amounts of stock options that are allowing the company to understate its costs. You might ask yourself, what would happen to Microsoft's stock price if the public suddenly realized that they lost $10 billion in 1999 rather than earning the reported $7.8 billion?� If 80 percent of its stock value--or roughly $400 billion--is the result of a pyramid scheme, one might also ask what kind of effect this could have on the retirement system. It is also important to note that this is a relatively new situation that did not occur before 1995.� Microsoft has always been a highly valued stock and that might have been justified prior to 1995.

"This situation is not about stock valuation, product quality or whether or not Microsoft has monopoly power in its markets.� Nor is it part of a pro or anti-Microsoft movement.� This situation is instead a shining example of financial fraud and corruption enabled by bad government policy.� If not quickly and aggressively addressed, we will all be losers as credibility in our financial markets is destroyed..."

March 23, 2000
__________________________

For anyone wanting more background on this important matter which is only now (years later) being reported in the mainstream news for the first time, I invite you to click on the URL provided above.

R.

Is it a pre-requisite for a wizard to be a PE as well? I'd prefer P.Eng., since PE is reminiscent of the status lost to the greater fool theory of the modern for-ever (again) bubbling on SM's.
Seems to me it takes some real learning to achieve that wizardry status. The modern alchemists have finally achieved the reciprocal methodology to turn gold into paper (see MK's Stein Cartoon). "Cool", better even - let's have some cold ones.

Oh, and BTW as the summer doldrums take their toll, how about a contest? As few stick around this time of the year, even I may have a chance of making it to runner up of # 12.
Hey, good ole wizard gimme a chance as I feel the stealth gold bull by now must have developed a roaring appetite, which he has to satisfy in the coming months of feeding on the lush and green (-spun) pastures of greenbacks a'plenty.

cb2

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=5&u=/nm/20030710/bs_nm/energy_greenspan_dc--- SNIP ---

WASHINGTON (Reuters) - Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) on Thursday said growing U.S. demand for natural gas to fuel factories and electricity plants may outweigh environmentalists' desire to preserve wilderness areas that contain energy reserves.

--- END SNIP ---

Yep -- environmentalism is nice -- as long as it doesn't interfere with things like the strong dollar policy...

Got Physical Gold?

Going to the page
http://www.bis.org/publ/r_qt0306.htm

and downloading the derivatives market section of the report, namely,

http://www.bis.org/publ/qtrpdf/r_qt0306d.pdf

one finds at page 37 that the notional amount of gold derivatives at the end of December 2002 was 315 billion dollars. Comex closing price at 12/27/2002 was 349.20 dollars per ounce. Now, I am following Howe's methodology. Dividing the total price by unit price, the notional amount becomes 902,061,855.67 ounces. Multiplying by 31.10348 to convert into grams and dividing by 1 million to convert into tonnes, we find 28,057 tonnes. Call that 28,000 tonnes.

"If the net short physical position is 10,000 tonnes, and if that position has been fully hedged (far from certain), the total notional value of all that business should be around 20,000 tonnes" says Howe. In that case we would have 8,000 tonnes of naked shorts to add up to 28,000. Since we do not know the exact value of physical short position, we do not know the naked short position. Let us make a table:

Net Short Physical---------------------Naked Shorts (tonnes)
14,000 -----------------------------------------0
10,000--------------------------------------8,000
5,000-------------------------------------18,000
3,000-------------------------------------22,000

Benchmark numbers: Annual gold mining is about 2,500 tonnes. Central bank stocks are about 30,000 tonnes.

Many thanks to Aristotle for his explanation of notional amounts.

http://www.gold.orgWGC excerpt:

"...yesterday's trading was confined to relatively narrow ranges. Physical buying interest took prices higher in London, and much of the rest of the day involved jousting between the physical bargain hunters (which generated some short covering and stop loss buying) and professional sellers, some of which are trading the gold:silver ratio- although the time horizon of these strategies is not clear. COMEX closed towards the low for the day, and the Asian markets have been relatively quiet, but with the price working gradually higher."

The Fed today accepted collateral accross the board, though mostly Treasuries, in its two open market interventions today to add $13 billion fresh money to the nation's banking system.

Eight billion dollars were added through a round of overnight repos (as yesterday's $1.75 billion overnight add ran off along with Tuesay's $3.75 two-day operation) and five billion with some staying power were added through 28-day repurchase agreements.

Remember, there is "no meaningful limit" to the Fed's power to add money... but that is not to say there are no meaningful consequences should they continue to do so. Seek a prudent gold diversification and you may sleep in peace.

R.

http://www.ecb.int/key/03/sp030710.htmEarlier today the Bank of England's Monetary Policy Committe surprised many analysts when it lowered the benchmark UK interest rate by 25 basis points to a new 48-year low of 3.50 percent.

Across the channel, the European Central Bank's Governing Council also met today, but held rates steady as was largely expected. In the press conference the followed, ECB President Duisenberg had the following notable exchanges with reporters, some demonstrating that "rare wit" I referred to yesterday.

(excerpts follow, full text to be found at url above)

Question: Could you tell us something more about the topics that were discussed with Mr. Tremonti, please?

Duisenberg: I cannot tell you in substance. Mr. Tremonti gave us an outline of the plans of the Italian presidency for the second half of this year, focusing on their by now already widely known initiative to enhance structural public investment, but financed mainly by private means, helped by the European Investment Bank.

Question: And what was your reaction to this ...

Duisenberg: ... we listened.
--

Question: Mr. President, you were talking about the downside risks and about the accumulation of macroeconomic imbalances in other countries outside the euro area. Is this the ECB's way of hinting to the United States that their current account deficit and their dollar policy might not be in the best interests of the global economy?

Duisenberg: You could say that. That is one of the major macroeconomic imbalances which persists. But not only in the United States, also in Japan. Basically, you might also include the imbalances that exist in the world on account of the fact that the large and fast growing economies in Asia broadly speaking have an exchange rate policy which links their currency to the US dollar, despite the fact that their economic developments are sometimes very different from those in the United States.
--

Question: It seems that you said last week to European trade unionists that you would retire on 1 November and would be replaced on this date by Mr. Trichet. Can you confirm this date?

Duisenberg: Well, this may be a good opportunity to say exactly what I said when we met the trade union representatives. I simply explained what the procedure is.

The procedure is (and the dates are fixed) that on 15 July, I believe, the Ministers of Finance will formulate the proposal for the presidency of the ECB. Then the Governing Council of the ECB and the European Parliament have to deliver an opinion on that proposal. I think that the Governing Council will do that during the first meeting after the proposal has been received. That means specifically in our meeting of 31 July.

The European Parliament has set the date for a hearing of the candidate on 11 September. I might add that deviously they have also set a date for my regular hearing on 10 September. And then, when the Committee of the European Parliament has held its hearing, the opinion of the European Parliament will be adopted in the plenary session � and I know this by heart � on 25 September.

After that, the proposal and the two opinions will be handed over to the European Council in the composition of Heads of State or Government and they will make the ultimate decision expected to be taken on 15 October when the European Council meets in Brussels.

The date of 1 November derives from that because the decision of 15 October will have to contain a date mentioning when the decision becomes effective. The first feasible date after that decision of mid-October is � and this is simply bureaucracy, you might say � not the day after, but two weeks later on 1 November.

Personally I would have preferred a different date, but that is not very relevant.
--

Question: First of all, Happy Birthday. I am not sure I heard anyone say that yet. I hope you spent the day well and wisely. That is not a question, you do not have to answer that...

Duisenberg: I spent it wisely...

Question: The strength of the euro and the fact that it has weakened to some extent in recent times � did this factor enter your thinking at all when arriving at the decision you made today to leave rates on hold? The fact that it was seen to be a concern in recent times that the euro was getting to be quite strong? That was certainly the perception of many in the markets. A second question: any comment on the Bank of England's decision to lower rates today, and what can you say about the relations between the euro area and the UK economy?

Duisenberg: No, I will not comment on the Bank of England's decision. I do not comment on measures taken by other monetary institutions. I was aware of it, that such a decision was coming. And the developments of the exchange rate did not enter into our considerations today. Considerations, or a decision, which were not really contested. But I must confess that we saw with some relief that the strong appreciation which had been evident in the months before seems, at least for the time being, to have been interrupted. Let me put it that way.

---end excerpts----

Let me repeat for emphasis, that Mr. Duisenberg was not particularly surprised, as most independent economists were, of the BoE decision today to cut rates.

And on the appreciation of the euro, he said "...I must confess that we saw with some relief that the strong appreciation which had been evident in the months before seems, at least for the time being, to have been interrupted." Not "stopped" or "reversed" mind you, but "interrupted". For "the time being".

For more insight on this, bear in mind the content of the second line of questioning that I provided above, regarding the "major macroeconomic imbalances" that exist for the United States.

As imbalances are balanced, you will want gold to see you through the transition.

R.

Today I just keep hearing a verse of "Hotel California" when I think about gold and silver....

"They stab it with their steely knives, but they just can't kill the beast."

Silver closes at $4.80 on the spot, and gold won't come below $340... the cartels have to be getting nervous about now....

While John Crudele is discussing the departure of Peter Fisher as undersecretary of the Treasury and its effects on Wall Street - Wim Duisenberg has shared his views publicly, if perhaps ironically. Thanks Randy for the link.

Guessing that O'Neill must be greatly relieved not having to carry the ball further, his successor John Snow may by now be mesmerized having to fear the unstoppable avalanche of the green stuff being set in motion.

... And in the end old Wim was a great governor of the ECB in the first years of baby Euro and leading it towards its juvenile period. Duisenberg's calm and foresightful guidance, disregarding all political turbulences, has won him and the � growing respect.

As no-one can forsee the ultimate fate of this still young currency experiment in economically trying times one has to respect his leadership. In that sense, happy birthday dear Wim - enjoy your upcoming retirement, though please let us partake on your thoughts in the future as well.

... As Bill Bonner stated today that the dollar reserve standard may be in its final throes and the � being a younger currency - meaning, still fiat with less time to pyramid equal amounts of debt - it may pay to think about real alternatives.

... And in the end there is only one - Gold, being no-one's obligation!

cb2

CoBra(too) (07/10/03; 09:50:47MT - usagold.com msg#: 105641)
@ Gandy - Greetings Sir Wizard
Is it a pre-requisite for a wizard to be a PE as well? I'd prefer P.Eng., ---
===
Greetings to you too, CB2 ! No not a pre-requisite, BUT, it sure helps ! My first Degree was as a Chemical Engineer and that surely helps in the Alchemy area. Just to advise you -- I too have been a P.Eng., but that was only for a couple years, while when I was working in the GREAT WHITE NORTH ! The license there (CANADA) is as a P.Eng. while the USA uses only P.E. (btw, for BB -- PM on Valley Copper Mine tailings pond recycle project.) Any "copperbugs" around ?

LOVE those postings Sir CB2 --- keep them coming !
<;-)

An analyst from the oil industry was on cnnfn today,they were discussing Iraqs oil supplies.I hope I remember these figures right,he said it cost one U.S.D to pump 1 barrel of crude oil in Iraq compared to 6 U.S.D. in texas.He said Iraq is the least expensive place in the world to pump crude oil. Thats a nice mark up 1 U.S.D to 30 U.S.D a barrel.21

The following courtesy from Bill Bonner of the Daily Reckoning:

Snippit:

How do you make money in this market?

"Well, for the past few months," explained colleague Dan Denning, "you buy the worst stuff on the market. In our trading portfolio, for example, we've been buying tech stocks...goofy tech stocks...and we've been making a lot of money."

The smart money, and the insiders who have it, have been taking advantage of the situation; they've been getting out. Of course, for every seller there has to be a buyer. Who are these buyers? Whom should the insiders thank for taking the world's trashiest stocks off their hands?

The moms and pops in mutual funds...the little guys...investors without a clue or a prayer.

Bless their hearts...


Black Blade: How true. Sometimes I just find it amazing and amusing that the stock markets have run amuck given all the information available for all to see. It's just that some refuse to open their eyes. Even those managing portfolios for others and who should know better are acting more like used car salesmen that those obligated to look out for their clients best interest.


And then there's this amusing piece:

We had just told him about another little spectacle that took place in the street outside our office. A group calling itself the "Grasshoppers" set up a cozy demonstration on the sidewalk. They rolled out green carpets...and set up tables, parasols and lounge chairs. On the tables was laid out a collation, served to whomever came up to ask for it.

In the middle of this pleasant scene, a young woman in a black t-shirt stood up to a microphone and began a harangue worthy of a sweaty Bolshevik or a cool Bush.

"We, the Grasshoppers, are ready for the fight. We will take on the ants. We will battle against them...we will beat them...we will vanquish them..."

She did not say that they would rape the ants' horses and ride off on their women, but she was thinking it.

Who were these strange people? What were they up to?

"Probably some group with a government grant...some kind of street theatre," offered Michel. "Wasting taxpayers' money...

"But if you ask people where the money comes from for this sort of thing, they say it comes 'from the government.' They have no idea that it comes out of their own pockets. I have to explain to my employees that the money we pay to the government in 'social charges' - 40% of the salary in France - is really a cost to them.


Black Blade: Sometimes I feel like we (the ants) are swimming upstream against a rising tide. Ya just gotta smile and enjoy life's inane comedies and sometimes ya gotta slap yourself awake to see if the world around you is real or just a dream (nightmare?), and sometimes ya just gotta laugh and roll with the punches. I have to admit that France doesn't have a monopoly on such bizarre demonstrations, heck I used to work in Bizerkly, Kalifornia a few years ago. There is also a good run down on the US economy by Kurt Richeb�cher in today's Daily Reckoning message but I thought it time for an amusing post that hopefully gives us cause to laugh at the world around us if for a moment anyway.

Mabry21 � lifting costs in the Middle East are much cheaper and that will make the ME Opec producers the most competitive in the industry as long as oil is needed. They do control the market as they have the pricing power. In the past they would sell oil at rock bottom prices to discourage production from non-Opec players and grab market share. Actually the lifting costs were closer to $2/bbl as opposed to $8/bbl for Russian producers for example. That was a couple of years ago. That is also the real reason why we must bow down to Opec and why we have such a strong presence in the region now.

Gandy � A few years ago I had heard of a Canadian company running a pilot project on Montana's "Berkley Pit" (Super Fund Site at the old Annaconda Copper mine site) and the claim was that they could mine the heavy metal and sulfide saturated water for a profit and discharge "drinking water quality" water into Silver Bow Creek (or was it the Clark Fork?). Anyway, the project was scrapped after the regulators (it may have been either the EPA or the DEQ) said that "drinking water quality" wasn't clean enough. Makes ya think twice about getting a glass of water from the tap. Then again as the Super Fund Project provides a lot of funding for jobs and the local economy why kill the Golden Goose.

- Black Blade

Off to the gym!

Thank you for the explanation which I found very comprehendible (at least I hope I have it right). Your definitions (which I agree with) are clear enough (a tribute to your presentation) but I can not apply these definitions to the manner in which others use the term.

Your definitions....

"'Notional value' is an expression of the size of the (mostly uninvolved) underlying assets upon which the derivative service payments are calculated."

"To apply "notional" value to other derivatives contracts, you simply need to evaluate what the actuals are and aside from that, what is merely a basis for mathematical computation of the service payment"

Yes please, lets use a standard future's contract of which I have some understanding. That service payment may now be just a one time settlement price but our definition does not change. Did I hear someone mention gold? Okay, one contract equals 100 ounces of gold. If I buy one contract (for delivery anytime in the future) at exactly $350/ounce, then the notional value of that contract is $35,000, right? Is it also $35,000 for the seller. Is then the total notional value of this one contract $70,000? However, as soon as the price of gold is anything except exactly $350/ounce, has the notional value changed? If not, (because it was set at the POG when the sale occured) then to calculate the total "derivatives notional value" of the gold market would require knowing the exact price at which each contract was bought or sold, no? Let us not even add options on contracts into this mess.

more to come....

1. I hope that our hosts don't take umbrage at my quoting rival sites but I'd like to suggest that they institute an alternative hall of fame for the most clueless commentary on the bullion market.

Perhaps they will be generous enough to award the recipient a frozen turkey covered in gold paint. If so, I would like to nominate Mr. Leon Esterhuizen of Investec who seems to provide most of the content for Bullion Desk's lead story of the day 'Gold price not expected to retain its shine'.

Mr E notes that:

"It seems that the gold price, which is influenced by the movement of the dollar and the buying and selling of gold (physical factors), is not reacting to the slight gains of the dollar right now.

"The gold price is lagging behind US equity market improvements and a stronger dollar," says Leon Esterhuizen, a gold analyst at Investec. "It is a matter of who blinks first the equity market or the gold bulls."

"There is a feeling that those who are hanging on to their gold positions believe that the uptick in US equity markets will only be short lived.

But Esterhuizen does not think this will be the case. "We could see the gold price back down to $320/oz," he says.

Why is gold going down the plughole? Well, not only is it not rallying with the dollar and the Dow, the Central Banks could start selling in September, which is a possibility, just as the discovery of a cheap new process for transmuting lead into gold (Socrates' 2nd worst nightmare) is a possibility and Sir Easy adopting sound and responsible economic policies is a possibility too (Socrates' worst nightmare, but in his view, less likely than the lead into gold alchemy thing).


2. Any thoughts about Peter Fisher? Here's my 2 cents:

Socrates' experience of tropical climes suggests that there's nothing like a good economic crisis to boost private bank profits. Hence, assuming the same applies to the US, Wall Street has sensed that the financial chaos of the next year and a half resulting from an attempt to pump more air into a credit bubble that is already stretched to bursting point is going to be the last chance in a long time to put its head in the trough.

On this basis, the last thing it wants is a too clever by half bureaucrat like Fisher trying to keep the lid on things. Fisher has no doubt seen what's on the horizon and decided to bow out gracefully before things realy fall apart.

One interesting point is that Fisher is due to leave on Oct 10, which is usually a rough time in the stock market. Remind me to put that one in my diary.

I see Midas suggests that PF resigned in a huff after he was turned down as head of the NY Fed, which is not necessarily at variance with my view that Wall Street doesn

I see Midas suggests that PF resigned in a huff after he was turned down as head of the NY Fed, which is not necessarily at variance with my view that Wall Street doesn't want highly effective individuals in a position of influence.

From Aristotle's excellent 105625....

"In the case of a standard Gold futures contract on the NY Commodities Exchange, when you and your counterparty plunk down your couple thousand dollars as margin on the contract at a then known reference price, the notional value of that derivative contract would be 100 times that reference price because you and your counterparty are hypothetically agreeing to transact 100 ounces of Gold at that price. But as we both know, that transaction nearly never takes place -- as the market price for Gold deviates from your reference price during your participation in this contract, one counterparty is simply obligated to pay 100 times this deviation between market and reference prices.

The fly in the ointment, however, is that there doesn't exist a *true* market price for Gold because its market price is largely obscured and determined by the very same betting action that determines the contract's reference price as it stakes its wager on Gold's "market price." It's a self-fulfilling operation that asymmetrically favors the shorts in this inflatable papery realm.
For as long as confidence and participation holds, only in superficial name, essentially, does this type of contract market have any connection to the physical market for Gold."

My thoughts: In regards to that first paragraph... Exactly! You've given a precise picture of how settlement is determined when an open contract is closed or offset. So can we say that ....

Notional value minus the underlying value at time of offset = profit or loss

So our notional value is the original "strike" price at which the contract was first bought/sold.

In regards to your second paragraph, I have to agree again, the tail can wag the dog but I would submit that the cost of the real item as it is transfered physically in the world is and always is tied directly to the laws of supply and demand. Further, that if the price between these real physical transactions and the paper casino ever differ, by even a slight amount, the difference would be immediately erased by a flood of arbitrage money. Greed would not allow the difference to exist for more than a moment. Thus, I do not anticipate a disconnect between physical and paper prices. However, this assumption is based on the confidence, of which you speak, that delivery from this paper market (however cumbersome and small in comparison to the amount of paper contracts) remains possible.

I'm going to anticipate that one might argue that enough money invested in the paper casino can (has the potential to) arbitrarily distort the "true" price. However, this begs the question of "what determines the true price"? Should the price of a commodity, stock or bond be higher or lower than its present price? Some say yes, some say no. This is what makes a market, no? In the case of silver, imho, the price is grossly undervalued, not due to anyone's intention but instead due to a lack of sufficient buying power from those who believe, as I do, based on the fundamentals involved, that the laws of supply and demand will become apparent again (and suddenly!) sending the POS much higher. I think technical trading is all that currently determines the POS. A real or perceived physical shortage will totally overpower this technical price prediction in a heartbeat.

Back to notional value. If indeed the settlement is determined solely by the deviation from the original strike price or notional value, and given that the vast majority of contracts are settled in fiat, how much does the notional value of any contract otherwise imperil the final settlement? Obviously, it would be more cumbersome to have to purchase 100 contracts of one ounce each than to buy one contract of 100 ounces even though the 100 ounce contract will always have a higher notional value than a single one ounce contract.

Lastly, for now anyway, I'm not belittling the amount of the notional value of any contract (margin call anyone!) or the amounts of money involved with even slight price movements in highly leveraged (dangerous) derivatives contracts. I was merely looking for a better understanding of "notional value". I believe it is the manner in which others have bandied about this term (and misused it by equating these huge numbers with a pending potentially disasterous event equal to this notional value when, in fact, the settlements are a minute fraction of the underlying bet) that most confused me.

I hope I've got this right. Please feel free to add, disagree or correct. Again, Aristotle, thanks for taking the time and effort on my (our) behalf.
Rich

In my previous post of June 23rd (message #104931), I made the assertion that the stock market would most likely top out no later than July 4th. A very lively discussion ensued on this forum following my post. Now that we are almost one week past the "deadline" of July 4th, it appears that the market is finally starting to break down--despite one last hurrah on Monday July 7th. Wall Street always needs one final "goosing" to suck in the unwary investors. And of course, we have the "cover story" (as Joe Granville was wont to say) of fundamental news, such as increased mergers in Nasdaq and transportation stocks.

Technically, the market's internals are breaking down. Just today I looked at the S&P 500 chart and saw that the most recent peak in this rally came in around the middle of June. This peak coincided with a prediction that Arch Crawford made a month earlier. It appears that Arch Crawford is having a good year so far in calling the market's turns. Another analyst whom I read often is saying the same thing, and he gives this stock market no more than five more days (or until July 15th) before it turns down with a vengeance. The decline will come like a bolt out of the blue and it will shock the CNBC crowd. In fact, this analyst is calling for the S&P 500 to drop to around 750 by the end of the year, which means the Dow Jones Industrials will be around 6900.

I believe that the foregoing scenario is a very likely one. Of course, all of this bodes well for gold. As stocks crash, gold will boom. So far, business here at Centennial has been brisk during the summer doldrum months. If this pace continues, I cannot imagine what August through December will look like. Once again, I appeal to all rational thinking people to review their wealth holdings and to consider putting between 15% and 25% of their assets into gold. This is not a far-fetched idea but rather it is recommended by some of the best financial planners in the country. For those clients of mine who need to add to their holdings, please call me here at the office on extension 102. For those readers who do not already have a broker here at Centennial and would like to discuss their situation with me, I would be happy to do so. Just call me on our toll-free number and press extension 102.

GC

http://www.truthout.org/docs_03/070903B.shtml

Since the NATURAL course of the stock market is to lead the economy or fundamentals, I too forcast that we have topped - not withstanding a few knee jerk reactions along the way.

Had the distinction of attending the weekly used vehicle auto auction yesterday with my owner.

We would normally expect to see dealers dumping inventory into this very soft retail market, but no, it's not happening. The reason is unique to the auto business over the past 20 years, because we have now had over three years of deteriorating profit margins even though sales have been good. Most auto statistics given to the media are for new vehicles. And these have been fair, although there is no pricing power.

Dealers have made the bulk of their profits up to about a year and a half ago in used vehicles. The onset of 0% and rebates on new vehicles has decimated the used vehicle market. Value on used vehicles is falling faster than we can move and replace them, since it is cheaper to buy a new car than a two year old one, the values of the used drop accordingly.

Well, most dealers have had to start flooring (borrowing against) their used vehicle inventories to make ends meet.

Well, most dealers are now in the dubious position of owing more on their used vehicles than they are worth wholesale. From a cash flow perspective, they cannot afford to sell them due to their weakened cash positions and balance sheets.

Now, the banks are not stupid, and the next step will be for them to come in and basically force the dealers to liquidate these vehicles.

It has not happened yet, but it is coming, and the bottom will fall out of the used vehicle market - this fall and winter, and that is not our prime selling season. One more new round of increased rebates on new cars, and a good many dealers are going to go under - it's coming and soon.

The second major item in our industry that is happening is that most of the lenders are calling us competing for business. The whole auto market is very slow right now, and if the banks can't keep loaning money and booking profits, their loan portfolios start to deteriorate along with thier own cash flows.

Now, this is just in the auto industry, and we are a very large percent of GNP. But the same thing has to be happening to all leveraged retail businesses with softening or just plain bad sales. Retail department stores do not buy their merchandise, the have a factor due it, and they pay the loans off with sale proceeds.

Appears to be a long cold winter coming. . .second half recovery - not on your life.


Aristotle: Thanks for the mention a couple of days ago. And I agree whole heartedly that low interest rates have increased asset values over their normal worth. But then again rates should not be as low as they are as you may have said or implied.

Six months ago I was pretty adamant that we did not have a real estate bubble, but I'm not as sure now as I was then. Put it this way, what equity I pull out of mine is not going back into real estate right away (years???). PM's appear to be a much safer avenue to follow, as if we didn't know.

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

Had my used vehicle manager mention his 401k to me today. He's 60 and plans on retiring in 5 years. Said he nearly paniced a few months ago with his losses, but he was relieved that his mutual funds have bounced back. I suggested he go to cash and gold and he looked at me like I was crazy. Then I explained that his mutual funds won't continue to go up with out fundamentals (earnings) to support them and if he needed proof the economy was not doing well, to look around at the car business.

It looked as if a light bulb lit for a few seconds, but then he said that he needed his mutual funds to go up some more so he could retire. . . .they just won't listen or learn. . . . .

Deflation is not an option, but it appears that we may have written a bad check to pay the premium. . . . .

Go gold and silver, cause the stocks are strong and they should lead the metal this time. . .

Pizz

Comments from Bear Traders;
"The euro fell against the dollar and the yen after the Financial Times said on its Web site that German Chancellor Gerhard Schroeder called on the European Central Bank to devalue its currency to help the region's exports.
...After the competitive devaluation, according to Comstockfund, the next is tarriff and protection. I agree on this because no one will gain anything after such a competitive devaluation.
...Do you think that China wants its currency to appreciate as US, Europe, and Japan want? China's government doesn't want a sudden currency appreciation to ruin its economy.
...Sure, everybody else will want their currency to lose value as fast as the dollar, but I think we will leave them in the dust. While they were foolishly building up trade surpluses and passing laws to limit their budget deficits, my countrymen were thinking ahead.
...We were building up a current account deficit the size of Jupiter. We were planning new and clever ways to turn a massive federal surplus into a yawning, recurrent, and politically tractable deficit. And of course, Uncle Al has been printing dollars like they're going out of style. (Which I suppose they are!)
...Put it all together, and we've shown a grasp of devaluative finance Yeah, the rest of the world will want to keep up with us, but they just won't be able to match that good ole American know-how!"

http://money.cnn.com/2003/07/10/news/economy/greenspan_economy.reut/index.htm
Snippit:

WASHINGTON (Reuters) - Federal Reserve Chairman Alan Greenspan said Thursday the U.S. economy so far has escaped harm from rising natural gas prices, but said individual consumers surely will feel the bite. He warned that households face the largest threat from sharply rising natural gas prices and an unusually low stockpile of the fuel -- an issue that has seized the attention of the Bush administration and lawmakers. "We are going to clearly see significantly higher bills if the futures markets in fact are a correct forecast of the spot market," he said.

The Bush administration and many Republicans want to open more federal lands in the Rocky Mountains to drilling, a controversial matter since many environmental groups contend energy conservation and renewable fuels can help. Greenspan gave his effective support to the drive to increase drilling, saying "trade-offs" were necessary between the need for energy and the wish for pristine wilderness. Under questioning, he also said there was a potential adverse impact on the overall economy if prices and supplies remain unbalanced. "They (higher prices) certainly make considerable difficulties for households and selected industries ... so that there are significant economic effects."


Black Blade: There gave been a few large injections lately, however, there are several flies in the ointment. Canada will not be able to bail us out this time as in years past, Mexico is in a power crisis and has contracted for US gas, Summer and hurricane season are just getting started, and virtually all production is in mature basins with declining production. The large injections have come at a cost as well. Many large manufacturers that use NatGas are shutting down and firing workers while selling their NG storage to the major storage operators. While Wall Street is focusing on injection data they are missing the big picture of tight NatGas supply and the effect on the economy. Energy costs will remain higher than average with increasing volatility. The only way out as Greenspan points out is increased drilling and opening up public lands. Renewable fuels will not cut it as they are more costly and do not replace NatGas. This story is far from over.

http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1057562262003&p=1012571727088
Snippit:

The steep fall in global bond markets in recent weeks is threatening to slow global economic recovery through higher mortgage and corporate lending rates. US mortgage refinancing, which has been a key support for the economy over the past year, has fallen sharply following a rise in mortgage rates driven by higher bond yields. Refinancing activity fell 21 per cent last week, the Mortgage Bankers Association said on Thursday, the biggest weekly decline since November. "We've definitely seen a turn," said Jade Zelnik, chief economist at RBS Greenwich Capital. "I think refinancings have peaked."

Black Blade: POP! There goes another bubble. So what to do now � will the Fed cut rates again or resort to "nonconventional" means? The list of options is growing short. Should be fun.

http://www.ajc.com/business/content/business/0703/10techwreck.html
Snippit:

Shades of 1999, the rally in technology stocks continues to amaze -- and worry -- Wall Street. It amazes because of the 29 percent year-to-date rebound in the tech-laden Nasdaq composite index, and the 57 percent rise since the index's low point last Oct. 9. That's roughly double the gains in blue chip indexes for both periods. It worries because it looks a lot like the kind of steep ascent that occurred in the late 1990s and culminated in the index's all-time high of 5,048.62 on March 10, 2000. That's the mountain peak from which the current bear market plunged, with tech stocks leading the way. No wonder that the nagging question these days is whether tech stocks are headed for another tech wreck similar to, if not as big as, the one in March 2000.

Then this from the same article:

Valuations -- the relation of share price to corporate profit growth -- are still well above historical norms. But they are high because earnings are low. What is expected to happen is that a turnaround in the economy will generate enough profits to make those tech sector price-to-earnings ratios look less intimidating. "It's hard to argue that tech stocks are cheap, but investors are beginning to bet that earnings in 2004 will be higher," said Tapp. He cautions individual investors not to get hung up on comparing where they are now with where they were in 2000. "They should ask what my best investment alternatives are from where we are now," said Tapp. As for tech stocks, Tapp said that if the market is in the early stage of another expansion, investors are not likely to get a better opportunity to buy these stocks.

Black Blade: Even as some warn of irrational exuberance the boiler room analysts and financial media carnival barkers continue to hustle the suckers as the insiders bail out.

http://story.news.yahoo.com/news?tmpl=story&cid=580&ncid=580&e=1&u=/nm/20030710/bs_nm/economy_jobless_dc
Snippit:

WASHINGTON (Reuters) - The number of jobless Americans receiving benefits hit its highest point in over 20 years last month, and new claims for jobless aid unexpectedly rose again last week, the government said on Thursday. The department also said the number of unemployed workers who remained on the benefit rolls after filing an initial claim jumped by 87,000 to 3.82 million in the June 28 week, the highest level since February 1983.

Black Blade: "Jobless recovery" eh?

http://www.federalreserve.gov/BoardDocs/Testimony/2003/20030710/
Snippit:

Today's tight natural gas markets have been a long time in coming, and distant futures prices suggest that we are not apt to return to earlier periods of relative abundance and low prices anytime soon. It was little more than a half-century ago that drillers seeking valuable crude oil bemoaned the discovery of natural gas. Given the lack of adequate transportation, wells had to be capped or the gas flared. As the economy expanded after World War II, the development of a vast interstate transmission system facilitated widespread consumption of natural gas in our homes and business establishments. On a heat-equivalent basis, natural gas consumption by 1970 had risen to three-fourths of that of oil. But consumption lagged in the following decade because of competitive incursions from coal and nuclear power. Since 1985, natural gas has gradually increased its share of total energy use and is projected by the Energy Information Administration to gain share over the next quarter century, owing to its status as a clean-burning fuel.

Black Blade: Finally a Greenspan speech I could understand. ;-)

http://www.iht.com/articles/102585.htmlSnip:
"There is a bull market in talk of financial bubbles. First came stocks. Next, housing prices, which some predict are poised for an implosion. Now, bubble trouble has blown into the bond market. During the three-year bear market in stocks, investors around the world fled into the perceived safety of bonds, sending prices soaring and cutting yields to lows not seen in decades. "They are so far below historical levels that something seems out of whack," said John Normand, a strategist at J.P. Morgan in London. "It is, and that's why it's a bubble."

"What happens in bond markets, at the end of the day, is always a result of decisions taken by the central banks, and expected decisions by the central banks," said Eric Chaney, an economist at Morgan Stanley in London. "And in this case, the Fed has made it clear that it wants to be behind the curve on inflation." The Fed caused some confusion in the bond market in June, however, when it cut interest rates by a smaller-than-expected quarter percentage point. It also appeared to play down its earlier concerns about deflation. That prompted a sell-off, which continued until this week, evoking memories of 1994, when rate increases by the Fed let loose a stampede out of bonds.

The Mortgage Bankers Association said the average rate on 30-year fixed-rate mortgages, which are linked to movements in the 10-year bond yield, rose to 5.37 percent last week from a low of 4.99 percent in June. The number of mortgage applications fell by 18 percent last week, the organization said. If bond yields continue to rise, dragging mortgage rates higher, that could choke off one of the few bright spots for the global economy, the robust U.S. housing market. By tapping home equity and refinancing mortgages at lower interest rates, U.S. consumers have managed to keep up their spending during the stubborn economic slump, even as unemployment marches higher.

When growth does pick up, business spending recovers and companies are once again creating jobs instead of firing workers, the economy may be able to withstand the effects of higher interest rates. The danger for bond investors is that these gains could come sooner than expected. In that case, analysts say, a deeper sell-off could grip the market, particularly because there are some fundamental forces weighing on bonds. Chief among those is a surge in supply, as U.S., European and Japanese budget deficits swell, forcing governments to sharply increase the volume of bonds they sell. Economists at Morgan Stanley predict budget deficits in France and Germany will push near 4 percent of gross domestic product this year; in the United States, borrowing will be even higher.

"This is a classic recipe for a bear market in government bonds once reflationary efforts trigger a business cycle recovery," analysts at BCA Research in Montreal wrote in a note to clients."

http://www.economist.com/agenda/displayStory.cfm?story_id=1914096SNIPS:
Interest rates in Asia are falling, as economies struggle with recession and the after-effects of the SARS crisis. But Europe's central bankers are resisting the rush to cheaper money.
...
The ECB cut rates in June: that, apparently, is enough for now.
...
So it all comes back to interest rates and the ECB. Some economists suspect that the bank will cut rates again after the summer, but the ECB is building a reputation for doing too little, too late. If, as currently seems likely, Germany remains stuck in the economic doldrums and if, as is quite possible, that has a damaging impact on the rest of Europe, the ECB could find itself getting the blame.
==
If interest rates aren't cut, this seems to imply, as Waverider says, that bonds are headed down also in Europe.

http://freedom.orlingrabbe.com/lfetimes/violent_economy.htmRobert Higgs opens his libertarian classic Crisis and Leviathan with the assertion, "We must have government. Only government can perform certain tasks successfully."[1] He then spends the next 260 pages explaining in lurid detail how our necessary State has successfully mushroomed into a voracious intervener.

Most people have long believed that only the State can protect our legitimate rights � yet no society has succeeded in keeping the State confined to the role of protector. Should we be surprised?

Not according to Murray Rothbard. In his 1970 seminal study, Power and Market: Government and the Economy, he tells us "the State's built-in monopoly of aggression and inherent absence of free-market checks has enabled it to burst easily any bonds that well-meaning people have tried to place upon it."[2] Higgs' Crisis explains how flimsy those bonds are when state policies trigger war, economic calamity, or terrorist attacks.

Rothbard's study is a frightening survey of the seemingly endless ways government intervenes in our lives. Frightening, not only because of the harm the State causes, but because government rolls on without significant opposition. In the 33 years since Power and Market first appeared, the State has reached a point where the only real challenges it encounters are within its own operations.

Rothbard bases his analysis on a fundamental distinction: economic action, in which wealth is produced and freely exchanged with others, and political action, in which wealth is seized from others. That this distinction is rarely drawn outside of libertarian circles is a key to the State's success.

An intervening agency such as the government gets the bulk of its revenue from two sources, taxation and inflation. Taxation is a levy forcibly extracted from the populace, while inflation seizes wealth covertly, when the quasi-governmental Federal Reserve pumps new fiat bills into circulation. As governments tax and inflate they are like criminals who rob and counterfeit � both intervene coercively in the market and benefit one set of people at the expense of another.

Clearly, without the ability to tax and inflate, the State would either cease to exist or be forced to rely on voluntary funding. People opposed to State policies should take this simple truth to heart.

The Logic of Taxation
Many people acknowledge the burden of taxation and have set about looking for a "just tax." Rothbard reminds us that people once looked for a "just price" before the science of economics came along. Most gave up when they figured out that the market price set the just price, given the pattern of consumer preferences. But they haven't surrendered the quest for a just tax. Can the market help them out? Plainly, a just tax based on a market tax would be no tax, something interventionists won't consider.

The beneficiaries of taxation are those who live full-time off the proceeds � the politicians and the bureaucrats � as well as net recipients, those who receive more from the government than they pay to the government. Because wealth expropriation is crucial to its growth, the State ensures it funds enough people to garner the votes it needs to sustain its activities. [3] This will usually not be a majority. It counts on the apathy and ignorance of the remainder of the public to win majority backing.

Some people object by saying this is the way a democratic republic like ours works. When a majority approves of government intervention, it cannot be considered wrong because they voluntarily voted for it.

Leaving aside the immorality of coercion per se, Rothbard argues that the nonvoters and the voters for the losing side usually constitute the majority. And those who do vote often select the lesser of two evils. When people buy a new suit or a refrigerator, they base their selection on positive attributes, not some lesser bad. "Why do [voters] have to vote for any evil at all?" he asks.[4] Why not give people a chance to vote on the State itself, or other issues, like the income tax? When voting consists of a choice between pro-intervention candidates, the State is asking us to choose our masters.

Intervention and Command Posts
Free markets create a harmony of interests, but when government intervenes it creates conflict, setting those who benefit against those who bear the burden. As state subsidies become common, people neglect productive activities and divert their energy in a scramble for the loot. The subsidy system thus promotes the predatory skills of its participants while penalizing their productive ones.

Aside from taxation, the State's most critical interventions are the command posts it has seized to retain control of our lives. These are: (1) police and military protection � the defense function, (2) judicial protection, (3) monopoly of the mint and monopoly of defining money (legal tender laws), (4) rivers and coastal areas, (5) urban streets and highways, and land generally, including unused land and the power of eminent domain, and (6) the post office.[5] It also exercises strong control of education, election procedures, and mainstream media, and hungers for control of the internet.

By far the most important command post is defense. The State needs a monopoly on force to extract taxes from its citizens. A disarmed citizenry would make matters even easier.

Rothbard concludes that "every coercive intervention in human affairs brings about further problems that call for the choice: repeal the initial intervention or add another one."[6] This is why the middle road or mixed economy we have had for generations is inherently unstable � we tend to move toward statism or toward freedom.

He leaves us with a stark comparison of the consequences of the two kinds of politico-economic systems:

The Market Principle versus the Political (Hegemonic) Principle is

1. Individual freedom versus coercion
2. General mutual benefit versus exploitation (benefit of one group at expense of another)
3. Mutual harmony versus caste conflict; war of all against all
4. Peace versus war
5. Power of man over nature versus power of man over man
6. Most efficient satisfaction of consumer wants versus disruption of want-satisfaction
7. Economic calculation versus economic chaos
8. Incentives for production versus destruction of incentives
9. Advance in living standards versus capital consumption and regression of living standards


Which do we want?

A CALL TO CONTEST!!!
COME ON IN ALL you Lurkers !! Stop thinking about it and Sign-up for your FREE Password and JUMP on in here and win the FREE GOLD (or Silver) !!! Just click on the "Discussion Forum Guidelines"
LINK at the "WELCOME" statement atop of THIS PAGE!! READ the "Rules" and request your posting "Password" !!! SIMPLE, and you can't beat the SUBSCRIPTION Price, as it is FREE !!!
<;-)
---

YES, Sir CB2, SIR MK has announced the "hot summer doldurms" USAGOLD -- Centennial Precious Metals, Inc. "CALL to CONTEST" !!!

===
THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) THIS Contest consists of TWO Portions --- A Price Prognostication and "WHY" Discussion Statement !

2) The Winner is the Price Guess closest to the Settlement price of the COMEX (most active) AUGUST 2003 Gold Contract (GC3Q) on the date of MONDAY, the 21st of July, 2003. HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON (MDT) on Sunday, July 20th, 2003.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $345.6) and shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "STARS", (Such as ****** $345.6 *******), so as to be OFFICIAL !

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) AND MOST IMPORTANTLY, to accompany the Price prognostication,--- Each guess must be accompanied with some reasons "WHY", in as long or short a rendition as the author wishes -- something cool and refreshing
to drive the doldrums away.

THE PRIZES !! (YES, I said PRIZES !)
To the WINNING person with the exact or closest "Guess" to the AUGUST �03 (GC3Q) SETTLEMENT price on Monday, July 21st, 2003 ----- the prize will be an Ole KING British Sovereign Goldpiece (contains 0.2354 oz. of Gold) and may be seen at the LINK -- http://www.usagold.com/gold/coins/BritKings.html
(PS: This is just like the ones that the Saudi Arabian King received from the GB for oil rights after W.W.II.)

Plus to each of two runners-up, a UNITED STATES one ounce PURE SILVER "Silver Eagle" piece.
(Rich, Did you see that ?)
---
AUGUST Gold (GC3Q) COMEX SETTLEMENT Price
07/11/03 GC3Q HIGH = $345.7 low = $342.3 SETTLE = $345.1 Change +$0.5 Vol = 38879
FYI
<;-)
---

POG (GC3Q) CONTEST ENTRIES as of 10am (Denver time) on Saturday, 7/12/03.
Listed in decreasing order of value.
---

*** $8,752.0 *** The Invisible Hand (7/11/03; 18:06:22MT - usagold.com msg#: 105696)



**** $357.5 **** alkahulik (7/11/03; 13:20:50MT - usagold.com msg#: 105686)
===
Please note that there is adequate opportunity for other entries between the two above numbers !
Let the CONTEST continue !
<;-)

THEN it's true!!!!!

There are two possible scenarios unfolding before us ....

1 THE stock market will fall be cause the economy is weak and the 3 Asset BUBBLE's(STOCKS BONDS AND REAL ESTATE) that are all now interlinked (NETWORKED /WEBBED)
will fall
because of deflation....( the value of the assets collateralizing these asset classess is going to fall)....

or

2. We are in a ripsnorting economic recovery that is on the horizon and now surfacing and that economic recovery is going to put upward pressure on insterest rates which are going to go up and when they go up, the value of interest related securities and the assets that back them (BONDS and REAL ESTATE ) are going to go down which is also going to affect mortgaged backed securies which are laced throughout the portfolios of 60% of the banks ( in the proportion of 50% of their assets).......In this scenario ALL ASSETS WILL FALL IN VALUE AS WELL

This is like a care on the edge of a cliff teetering...

to keep everything in equilibrium , everything has to stay where it is right now........in balance ...right here..
How long can this be maintained.....Everyone has to be lined up in policy to match what the US FED is doing....





THERE is no room for error or deviation....But the outcomes are the same if the deviatiion happens.....which causes the imbalance to happen ..... We are going to have deflation...which is going to cause the WEB OF STOCKS BONDS AND REAL ESTATE TO FALL....When interest rates rise or REAL ESTATE BEGINS TO FALL.... Or if someone who isn't in line just decides to dump bonds.....Perhaps an earthquake....
or some ripples on the pond that come from someother rock splashing the water.....

Bonds have nowhere to go but down from here....why would anyone own BONDS .....there's just no more room to lower interest rates...

YOU CAN"T MAKE ANY MONEY ON BONDS

ON THE YIELD /////IT"S TOO LOW

YOU CAN"T MAKE ANY MONEY ON THE PRINCIPAL ...unless rates go down further......

THeyve dropped from 12%+ in the 80's to where they are to day ......I'd say the bond market is over....and
so we wait.....and it is the calm before the STORM....

Wouldn't it be interesting next week if Alan Greenspan was given truth syrum and he spoke to the public about something besides Natural GAS .....to the fact

that WE SIT HERE AT THE GATE.....and we're going to have a financial debacle in one of two ways .....

1 Smart money is going to lead the way out of stocks because insiders are going to sell (which is happening in large scale now on the Nasdaq....( they hit a record for selling in the past ten days)

2 there's GOOD news and Bad news ,
the good news is we're in the midst of Economic recovery
things are heating up
and therefore we have to raise interest rates which is going to bring the whole financial Paper House of Cards down
to the ground....

"The Fed couldn't work its magic with 12 interest rate cuts
and now they are at the end of the road � "fish or cut
bait" time. What makes Alan Greenspan and the boyz and
girlz at the Fed think anything will work now? There just
aren't many viable options left. "Interesting Times"

*** Suppose that stocks tank. Suppose too that bonds
stumble, unemployment soars, real estate pops, companies go
bust, people get scared. One effect of the FED's having
reduced the interest rates so drastically will be that the
public will largely perceive that the Fed did everything
that it could to prevent such trouble occurring in the
economy, and GB will be seen as not being to blame. After
all, the FED did everything that it could do, the problem
was just bigger than America. All this without anyone
mentioning that it was the FED that made such a huge stock
bubble possible in the first place, or that lowering the
interest rate also hurt a lot of people, and that the
public's debt of equity-out loans was puffed up,
exuberantly, out of all reasonable proportion -by the Fed-
precisely at the time when vastly greater sums of money
could be taken in, through interest, by the banks by
exactly that means. Then we will hear nothing but positive
comments about the FED. And the true reasons for the
calamity will be suppressed and forgotten, along with the
dust of the ages, so that people will forget. Years will pass.
And then, when the time is right, the process will be begun
again, just as intentionally and deliberately as before, with
no one in the public any more enlightened as to the means
of their own impoverishment, than they were during the 1990s.

http://www.netcastdaily.com/fsnewshour.htm
It certainly would be convenient if the markets reacted in the lineal manners that seem to make sense to us.
________________________

Your Statement: "Bonds have nowhere to go but down from here....why would anyone own BONDS .....there's just no more room to lower interest rates...

YOU CAN"T MAKE ANY MONEY ON BONDS

ON THE YIELD /////IT"S TOO LOW

YOU CAN"T MAKE ANY MONEY ON THE PRINCIPAL ...unless rates go down further......"

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

I see your point that rates seem, so low now, compared to the last twenty years, so who would buy? But, rates in the long bond have a long way to go down. Wouldn't a bond bought at 4% interest appreciate (possibly) 25% in principal value if that same bond interest rate falls to 3% in the market?

Some, including the Prectorites, Elliot Wavers', and Robert Shiller argue that this is what is going to happen, particularily if the economy erodes and the sectors you mention--stocks & real estate go down (where else will they safely place their money?--Gov't Bonds). (Not to say that I agree with Prector and other raving deflationists: Sorry to say they see Gold as just another commodity that will be sold into falling markets.)

We have all been amazed over the years with the power of the Central Banks around the world--in co-ordinated action-- and with those with the vested, Vested, VESTED interest in keeping the inertia of the current Dollar Standard going. We see that around the world ALL trading partners continue to sop up the dollars in all of our deficits-trade & budget. After all, who else is going to buy all their stuff, other than those in the country with impunity to create "make believe" money? Even as the twenty year chart of the long bond interest rates look as though "they must be bottoming", and the recent market action might suggest a top is in; I wouldn't bet on it! The CB's I'm sure would just love to have a pack of anticipating bond short sellers to teach another lesson to.

We agree that this game (higher stocks, higher bonds, higher realestate, etc.) will come to an end, but now maybe to early. Give them a few more years of rope to work with--sometime in the latter half of this decade, when more of the unfunded Gov. obligations have to be funded. By that time the U.S. credit markets will be demanding over 100% of World Savings--even foreigners maynot be able to fund that.

Puplava today on the 2nd hour of his financial sense newshour has an Elliot Waver on there...worth a listen if you have MP3 player capability. I'll put up the website above. If you want to hear a short and medium term outlook that is Different than what many of us feel is going to happen--listen. ----------Gdome

I have no idea really what the price will be on the contest date. The gold market seems to be running counter to the dollar, but both, in my opinion, are being manipulated.

The price predicted is close to the present price, and thus statistically seems the best guess.

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.

It appears CIA director Tenent will fall on his sword for the Bush administrations for the Iraq situation.It is crazy when you see this never ending manipulations of our goverment.If anyone thinks the goverment is not manipulating the financial markets they have their heads in the sand.Its time people wake up to the way our goverment uses the word patriotism to manipulate us.21

...and WHY?
Big trend change Friday saw ALL $ denominated assets close higher...Gold too! so I'm thinking Gold can't go any lower as the buying opp that would present might compromise the Physical offtake. Dollar higher...and Gold flat to higher (short-term).

If Yields are again to trend lower this will be the fourth wave down and should take Long Bond to the sub-4% level...an unsustainable position if cost of carry is included. If my trend-change spotting is correct we'll see this in tandem with a stronger Dollar...as opposed to recently... and in keeping with the Global disinflationary environment. The Ellioteers will be proven right as this develops...but for the WRONG reasons and the chink in their Armor ----- they don't differentiate between PaperGold and Phys. FWIW.

Thank goodness WE do!

http://www.321gold.com/editorials/benson/benson061203.htmlGood description of Govt methods of cooking the numbers.

We may be at a tipping point where interest rates try to turn higher, particularily if we see consumer prices turning higher (financial inflation doesn't seem to matter in the markets much at this point.)[I saw a report today that said in June, import prices rose by .8% while export prices declined by .2%, so is higher official inflation headed our way? Time will tell.] I just wouldn't count out the power and money of the Central Banks to keep the inertia of lower rates going for as long as possible, do to the virtuous(?) circle that all the vested interests and Governments have created for themselves--

We (U.S) buy their goods, pay for them with our fiat dollar, they turn around and buy more of our bonds with our dollars, and presumably enough to keep interest rates moving down at a pace where bond appreciation at least equals any currency loss. This keeps the foreign economies purking along. -- Are we (the U.s.) in the stronger position, where foreign countries have so developed a dependence on their export markets, that they will not risk those markets by curtailing their purchases of U.S. bonds? Up until now, anyway, that would seem true.

If foreigners quit buying the bonds, interest rates perhaps rise, putting the U.S. into recession again, cutting off the need for all those foreign imports, possibly to an extent that the whole world goes into recession or depression. So, the whole world it seems has a lot riding on keeping US going. Stephen Roach, of Morgan Stanly has written volumes on the unbalanced situation in world trade and finance that just gets worse. The only way right now, possibly to avoid (postpone) a real world wide calamity is for everyone to buy bonds! Maybe, Congress should have poster pictures of Uncle Sam outside the Post Offices (in foreign countries too) like during the World Wars to trumpet the buy bonds message.

Listened today to an old lecture by Murray Rothbard--He was saying that in the old days, before the Federal Reserve, that we had many deep and severe panics, but that they usually were short, under a year in most cases, as the markets cleared themeselves. He also said that prices always fell, both capital and consumer goods. Capital goods falling the most. But people could always count on lower prices, even if they didn't have much to spend. NOW, says he, with so much Fed. and Gov. intervention, since the 1920's, downturns last for years, unempolyment increases, and prices never go down, even in the down turns, because the central bank is always, pumping , pumping, pumping. So we have the the worst of it, rising unemployment and inflation (Stagflation). Probably at some point a hyper-inflationary depression.

---------Gdome

http://www.321gold.com/editorials/schultz/schultz071103_hsl.htmlBig Picture
What makes the world's economic auto go? Money. Are U under the impression that Central Banks - especially the US Fed - are pumping money & credit? That's a logical assumption, because their biggest guns tell us so. I thought so too, until I looked at the data. It's relative fiction. Increasing money supply somewhat, yes. Compared with the historic past, yes. But compared with recent past, no. Compared with their promises, no. Compared to the needs? Absolutely not!

Those who look only at the rising gross figures are guilty of static thinking. The rate of change is all that counts. Dynamic thinking please! When the rate of change declines U are shrinking at an increasing rate. What is not rising via rate of change is, by definition, shrinking - the Accelerator Factor, an axiom of economic understanding!

To make it worse, not only is money supply shrinking lately, but the velocity of money is dangerously low. As Jim Sinclair says: "The US Fed talks a big stick & carries a wet noodle." Is this bad news? No, it's horrible news. It is precisely the pattern the Fed followed in 1928, which led to 1929's crash & the Great Depression. If this hesitancy isn't stopped fast, we're headed into the same trap. ��After an airliner takes off, if the pilot cuts back on the takeoff speed too fast, he will go into a stall; he can't pull out of it, & he will crash. It happened to AirIndia at London Heathrow when I lived there, & that kind of speed stall is exactly what the US Fed is doing.

Mabry21 Said: Its time people wake up to the way our government uses the word patriotism to manipulate us.

The manipulation, it's so obvious is'nt it? "Patriot Act1." Unbelievable

The POG is in the doldrums and will likely decline more as unemployment grows and more assets are sold off in desperation. Hopefully, those of us who have kept our debt burden low will be able ride out the desperation sell-off and sell at the $1000+/oz range that will follow.

Special thanks to Black Blade for being a beacon of reason in a storm of emotion.

Best Wishes To All

http://64.29.208.119/creditbubblebulletin.aspGdome: From the excerts below, Doug isn't too optimistic about the 2nd half recovery, jobs, or benign inflation.
----------------------------------------------
Broad money supply surged an eye-opening $63.1 billion (to $8.83 Trillion), the strongest weekly gain since the Fed's post 9/11 liquidity operations. M3 has now expanded $255.4 billion over the past 11 weeks, a 14% annualized growth rate, with y-o-y growth at 7.9%. M3 is up $3.6 Trillion, or 70%, in six years. For the week, Demand and Checkable Deposits gained $12.0 billion. Savings deposits rose $8.4 billion (up $63.8 billion in five weeks).

FOR THE AUTO BUFFS:
Consumer debt increased by a stronger-than-expected $7.3 billion (5.0% annualized) during May. It remains puzzling that revolving and other non-mortgage consumer debt continues to expand despite record mortgage refinancings. But, once again, the most interesting aspect of this release was the "Terms of Credit � New Car Loans" data. The average Amount Financed increased another $380 during the month to $27,920 (up from March's $25,152). This compares to third-quarter 2002's average $25,959. The average loan maturity increased 0.6 months to 60.7 months, up from the third-quarter's 58.9. Average Loan-to-value was unchanged for the month at 97%, up from the third quarter's 96%. The average Interest Rate declined 11 basis points during May to 2.40%, down from the third-quarter's 2.68%. It strikes me as notably non-deflationary that the average auto loan is approaching $28,000 and the average new home these days is going for about $243,000.

The May Trade Deficit, up 19% y-o-y to $41.8 billion, remained at a near record level. Year-over-year Exports were up 1% to $57.6 billion, while Imports increased 7% to $104.4 billion. Imports were 81% greater than Exports during May, compared to 72% one year ago. Year-to-date by largest trading partner, Imports from Canada were up 7.3%, Mexico 3.3%, China 27.9%, Japan 0.0%, and Germany 14.1%. Others of note include Saudi Arabia up 71.1%, Brazil 22.8%, India 15.1%, and Russia 56.8%.



June Import Prices jumped a stronger-than-expected 0.8%, the biggest gain since the prewar February price surge and noteworthy for its broadness. Import Prices were up 2.0% y-o-y, although the detail is more interesting. Food & Beverage prices were up 5.8% y-o-y. Industrial Supplies were up 8.8%, with Fuels & Lubricants up 15.5%. Paper & Stocks prices were up 8.5% y-o-y. On the downside, Capital Goods prices declined 1.6% y-o-y. Autos were up 0.7%, while Consumer Goods ex-auto was unchanged y-o-y.



June Producer Prices were reported this morning up a stronger-than-expected 0.5%, the strongest rise since March. For perspective, there was only one month during 2001 when PPI was up more than 0.5%. Year-over-year, PPI was up 2.9%. Consumer Goods prices were up 3.9% y-o-y (residential gas up 35.5%!), and Capital Equipment was unchanged. Intermediate Material prices were up 4.5% y-o-y, with Manufacturing up 2.9%, Processed Fuels up 15.7%, Construction up 1.1%, and Supplies up 1.9%. Crude Material prices were up 29.4% y-o-y, with Food & Feedstuffs up 13.6%, and Crude Fuel up 80.7%.

...it is especially important these days to carefully analyze trade, pricing and profit data. A key tenet of Credit Bubble analysis is that our contemporary, mutant financial system is hopelessly incapable of disseminating liquidity evenly or effectively throughout an increasingly maladjusted (domestic and global) real economy. I believe we receive decisive support for this hypothesis weekly. Even today's gap between June PPI and "core" Producer Prices (up 0.5% vs. down 0.1%) is further confirmation of unusual Inflationary Manifestations and atypical, especially uneven pricing pressures. And this morning's huge Trade Deficit indicates clearly that rampant domestic Credit Inflation persistently manifests into ballooning foreign liabilities with minimal benefit to domestic goods-producing industries. We also know that today's wild mortgage finance excesses are stimulating consumption and housing inflation; yet these financial flows (Monetary Processes) are abnormally unbalanced and unsustainable.

From a post at Prudent Bear:




Stumbled across this today, some real nuggets in there...

52 Economic Truths

by Merrill Jenkins, 1919-1979, Monetary Realist

1. Retaining the God-given right to distribute one's own wealth is the only guarantee of freedom from tyranny.
2. Money accepted as a medium of exchange subjects people and their government to the influence of its creator.
3. Money is: credit - imaginary demand - inflation - seigniorage.
4. More cannot be returned to an only source than is taken from it.
5. A contract cannot protect anyone who lacks the wealth with which to force its fulfillment.
6. Supply and demand are wealth and cannot be imbalanced.
7. During an inflationary effect "prices" and employment rise together.
8. During a deflationary effect "prices" and employment fall together.
9. During any exchange, whatever is accepted as a medium of exchange in lieu of wealth is imaginary demand (money, credit, inflation).
10. Wealth is material - money is psychological.
11. Money can be created or destroyed in the human mind.
12. Inflation cannot be controlled.
13. Money created in the human mind has to be accepted by all others to function. Once money is generally accepted, all people will create it in volume to satisfy their desires, and control is impossible.
14. Money accepted in exchange for wealth is subconscious fraud.
15. Rent is material - interest is psychological.
16. Rent is a wealth charge for the use of borrowed wealth.
17. Interest payment would require that more be returned to an only source than was obtained from it.
18. Interest is money charged for the use of borrowed money.
19. Wherever money is accepted as a medium of exchange, wealth and freedom are forfeited.
20. Money is accepted in exchange for wealth only until the psychological nature of money is exposed, or until wealth expropriation consumes most of production and the public begins to starve.
21. Where freedom reigns, those who do not produce food directly have to produce wealth or perform service to exchange for it.
22. Wealth exchanges freely on historic worth. Money exchanges due to legal tender laws and the public's ignorance of its true nature.
23. Money is a force of evil.
24. Attempts to control and circumvent free market natural laws causes hidden free market transactions.
25. Wealth is supply or demand by use or viewpoint.
26. As the exchanges of money (imaginary demand) for wealth increase, the parity of money falls.
27. Inflation is possible without the inflationary effect only at the expense of the standard of living, until wealth expropriation consumes most of production and the public begins to starve.
28. Inflation held as savings does not cause the inflationary effect.
29. Inflation feeds on itself and accumulates at an ever increasing rate.
30. Money may exchange for wealth but it can never be wealth.
31. All money is imaginary and its volume can not be measured.
32. Wealth only as a media makes inflation impossible.
33. Inflation ends with deflation.
34. Money is valueless unless accepted in exchange for something.
35. Wealth has worth in use, consumption, or as media. Money depends on imagination and is usable only as a medium of exchange.
36. Deflation can be honorable only by redemption.
37. The deflationary effect is possible without a deflationary exchange of tokens.
38. Money has to have parity to have exchange value.
39. Wage and price controls obscure the inflationary effect but cannot control inflation.
40. Parities are determined by exchanges developed by competitive bidding with respect to return on labor, variations in time, location and circumstance.
41. Exchanges determine parities.
42. Wealth supports independence - money enslaves.
43. Government regulations of the use of capital inhibit free enterprise and cause economic decline.
44. Conspiracy to expropriate wealth with money assures the eventual destruction of the conspiracy.
45. The main economic function of money is the expropriation of wealth.
46. Unless wealth exchanges for wealth directly, credit extension or wealth expropriation is the result.
47. Take away all that a man produces and he stops working.
48. Supply can never exceed demand because a quantity cannot exceed itself.
49. A fractional reserve monetary system embezzles production within its sphere of influence.
50. Controlled prices oppose competitive parities.
51. No one can discover and disclose a truth based on a false premise.
52. Money expropriates wealth.

About, dynamic thinking or "The Rate of Change" ! I've been observing, on the field, many different, changing rates, in France. Consumerprice and tax rises (+/- 30%) + houseprices +50% in the past two years. This, happening in an environment of price-"stable" Euroland. Two concrete examples of significant "changing rates". The net result is a proportionate contraction in consumption and a declining velocity in housing trade.

It are NOT the FED or ECB's actions that are determining this "present" specific, (France-global) economic situation ! There is something else, imo. Something much deeper and broader than the classic "intervention-ism" that we are discussing here.

A slowly growing economical apathy after a very long period of dense saturations of all kinds. Resulting in a general decline in rising rates of change, evolving into culminating tops, stops and reversals.

It is in the US and Euroland that this all-embracing, systemic, "slow-down" is most visible. Many other pockets of expanding economy, around the globe, are still catching up with the US/EU, past pace of (unofficial) price rises and expanding consumption.

It looks as if the US/EU are next in line to follow the japanese experience of economical coagulation/clotting.

Consumers are NOT running completely out of confetti but their behavior is changing, altering direction and momentum.
The housing bubble is global ! This bubble is of a grand "finale"-nature.

What's next ?

Here I do smell total confusion, general doubts and no conclusive answer ! All do wait and see...and hope for the best of outcomes. There is a demographic problem in the West (and Japan) ! The younger nations (economies) still count on us, the oldies, to (re)activate global activity and we, the oldies, count on them, the younger, to pull us all out of the declining expansionary rate of change.

I have this funny feeling that it is NOT going to work/happen. Yep, something really Big/Huge will have to give. My modest/primitive intuition tells so, after relative objective observations of what is happening on the field(s). Consumption, debts, savings, prices, consumer-behavior, housing, etc...

Politicians and central bankers do feel some serious heat coming. Many inconsistant remedial suggestions add to a growing confusion. Time for analysing the causes is running out and the present relative drastic remedies aren't helping.

The euro-dollar exchange rate isn't going to change the fact that one goes rather for a 5 � pancake dinner instead of a 30 � menu. With zero IRs all over the globe, declining business profits and rising unemployment...the housing bubble is unsustainable. People are economically moving on the mobilization of debts and savings or other forms of reserves.

Renewed calls for massive public spending AND net higher taxes, do emerge. Very recognisable, ideed. Inflation, stagflation, hyper-inflation or any other flafla-price rises are definitely in the air. Soon, ALL those cheap imports aren't going to keep us away from rising prices/taxes, anymore. The "negative" spiral is there !
Declining purchasing power results in higher wage demands, threathening all different forms of relative global price-stability. The global competitive currency exchange rate competition will take place into a general price-rise environment. Central bankers reached the end of their effectiveness. Interest rates, the cost for renting confetti, will/must go up from here...or the global economy comes to a standstill !

An ideal future picture for POG in the first place and Gold afterwards ! Yep, POG is in my view, different from Gold.

As HS states so well : The velocity at wich confetti is rolling...is decreasing dramatically ! This is to be observed on the field when looking attentively at consumers' behavior. High house prices are an IR aberation.
A house is valued at its theoretical rental income. A capital that only produces 1% of IR must be five times higher than when it can produce 5% of yearly income.
Present houseprices are the result of the low/lower IR-mania and NOT at all a reflection of any other economical fact.

I think we have come to a point where the global economy has become a (changing) factor in geopolitical inter-relations instead of the other way around of geopolitics, first and determining the economies' secondly.
Might explain the relative, reconcialry, calm between euro and dollar (exch.rate).

I disagree with HS on his FED-policy diagnosis. It isn't the FED (or ECB) anymore...it are the consumer and the entrepreneurs who are slowly *adjusting* to the past horrific interventions. That is the real horrible news !
Once a consumer decided to decline his/her consumption and entrepreneurs go into a contraction mode...nothing will stop them from doing so. A firm trend has been set ! Social unrest will be the result. So far, this social unrest (pay-rises) has been averted, thanks to a seemingly unexhaustable variety of interventions. Time out, imo. It already should have happened 10 years ago. This *was* the greatest "extension" - "overshooting", ever. Including POG and attitude versus Gold ! 300$-� for one ounce of Gold is and soon was, a once in a life opportunity for more than one reason only.

Unfortunately (or is it fortunately) I wasn't there at the 1929 depression. My intuition tells me it is worse, this time. When the past unimaginable "flogging" of consumers and entrepreneurs stops having results...we can't but conclude that we (the central bankers) ran totally out of any further inspiration. I think it is "politicians" time, again. Politicians, mis-guided/coerced by the demanding sheeple. GIVE US SOME MORE !!!

I'll change this personal doom vision, as soon as I see the slightiest shining of any genuine light.

Greetings Belgian,
I am a bit out of my league in discussing this, but one part of your post could include this, I dont know who controls the length of time motgages last, but they could be extended to 40 then 50 then 60 then what 500 year mortgages? What is to stop that?
That would replace dropping interest rates as the prime refinanceing stimulant.
Allowing this house bubble to have a much longer life I am guessing.
Sallie Mae, could perhaps pull some other tricks that I havent guessed or seen written about.

Exactly on the 14 th july, the anniversary date of the French Revolution, David de Rothschild, heading the French branche, is taking over the command of the imperium from cousin Sir Evelyn (71) in London ! The structures of the banc and finance dynasty will be simplified under a newly created holding, Concordia BV, based/installed in the Netherlands !

Trichet will head the ECB in september.

Without pulling any conclusions out of this...I simply like this little news event. Leaving London for/to the "old" continent !?

WARNING -- ONLY a bit over a WEEK to go before the DEADLINE TIME!YES, Sir CB2, SIR MK has announced the "hot summer doldurms" USAGOLD -- Centennial Precious Metals, Inc. "CALL to CONTEST" !!!

POG (GC3Q) CONTEST ENTRIES as of 10am (Denver time) on Sunday, 7/13/03. Listed in decreasing order of value.
---

*** $8,752.0 *** The Invisible Hand (7/11/03; 18:06:22MT - usagold.com msg#: 105696)


**** $357.5 **** alkahulik (7/11/03; 13:20:50MT - usagold.com msg#: 105686)

**** $355.5 **** Topaz (07/12/03; 17:21:42MT - usagold.com msg#: 105718)


**** $344.0 **** Zhisheng (07/12/03; 14:17:22MT - usagold.com msg#: 105715)

**** $343.5 **** Liberty Head (07/12/03; 23:41:01MT - usagold.com msg#: 105724)
---

A CALL TO CONTEST!!!
COME ON IN ALL you Lurkers !! Stop thinking about it and Sign-up for your FREE Password and JUMP on in here and win the FREE GOLD (or Silver) !!! Just click on the "Discussion Forum Guidelines" LINK at the "WELCOME" statement atop of THIS PAGE!! READ the "Rules" and request your posting "Password" !!! SIMPLE, and you can't beat the SUBSCRIPTION Price, as it is FREE !!!
<;-)
---

THE RULES -- (We MUST have RULES !!) --- PLEASE READ !!

1) THIS Contest consists of TWO Portions --- A Price Prognostication and "WHY" Discussion Statement !

2) The Winner is the Price Guess closest to the Settlement price of the COMEX (most active) AUGUST 2003 Gold Contract (GC3Q) on the date of MONDAY, the 21st of July, 2003. HOWEVER, All "Guesses" MUST be posted before the clock in Denver strikes HIGH NOON (MDT) on Sunday, July 20th, 2003.

3) Price "Guesses" shall be stated in Dollars and tenths !
(Such as $345.6) and shall be SHOWN in the SUBJECT BOX location AND enclosed in markers of "STARS", (Such as ****** $345.6 *******), so as to be OFFICIAL !

4) ONLY one "Guess" per Knight or Lady is allowed, and once that "Guess" has been "taken" -- no one can duplicate it !! FIRST COME has rights to that "Guess".

5) AND MOST IMPORTANTLY, to accompany the Price prognostication,--- Each guess must be accompanied with some reasons "WHY", in as long or short a rendition as the author wishes -- something cool and refreshing
to drive the doldrums away.

THE PRIZES !! (YES, I said PRIZES !)
To the WINNING person with the exact or closest "Guess" to the AUGUST �03 (GC3Q) SETTLEMENT price on Monday, July 21st, 2003 ----- the prize will be an Ole KING British Sovereign Goldpiece (contains 0.2354 oz. of Gold) and may be seen at the LINK -- http://www.usagold.com/gold/coins/BritKings.html
PS: This is just like the ones that the Saudi Arabian King received from the GB for oil rights after W.W.II.)

Plus to each of two runners-up, a UNITED STATES one ounce PURE SILVER "Silver Eagle" piece.
(Rich, Did you see that ?)
---
AUGUST Gold (GC3Q) COMEX SETTLEMENT Price
07/11/03 GC3Q HIGH = $345.7 low = $342.3 SETTLE = $345.1 Change +$0.5 Vol = 38879
FYI
<;-)

The fact of having the classic 20 years mortgage time extended to 30 years is already an unmistakable sign of financial panic. Yes, theorethicaly, all forms of debt can be removed to the next generation...generations. This brings housing debt also under the huge umbrella of the global "un-re-payable" debt. This together with zero rates for full refinancing and relief for the *servicing* of the debtbergs.

This illustrates what exactly is ment by a "debt-driven" economy !!! Conclusion is as simple as can be : confetti = debt and nothing....NOTHING else ! We would simply be better off if we make it (unredeemable debts) "official".
Let's devalue the currency that "is" - "represents" the global debt. The debt carrying $-reserve currency that is anything but "reserve" !

"1.Retaining the God-given right to distribute one's own wealth is the only guarantee of freedom from tyranny."

I'm glad to see the most important, ground zero, economic truth is number 1 on the list. It is the epicenter for all the other economic truths. One cannot have a healthy economy otherwise. The economy does not require central planning, intervention, or stimulus. Indeed, those things ARE the problem.
So few understand or appreciate this truth. It seems most people don't want to accept the responsibilty that goes hand in hand with freedom.
Fiat currencies require central planning, Gold does not.

Cheers

One of the concepts that FOA and I used to toss back and forth is the "separateness" (or the potential for separateness) of the ECB and Fed from the political sector. It seems those times when the head of either one of these central banks must stiffen his back coincides with bottom-up political pressure to 'weaken' the currency. Mr. Duisenberg experienced such pressure during this past week from Germany's Mr. Schroder. In the piece I wrote back in May on the ECB holding the line on interest rates, I threw out the opinion that in the absence of the natural ebb and flow between trading nations which would have strengthened or weakened a currency under the gold standard, these central bankers must essentially fill in, that is, attempt to duplicate (mimic) the market cycle in order to keep the world economy from going over the cliff. Too much in one direction is an excess -- and excess leads to natural economic retribution. In other words, these nation states must take turns in the weak currency/strong currency equation. If they don't -- if some sort of balance is not achieved -- the wheels fall off.

We live in the age of the managed economy. Since the advent of fiat economies in the 1970s we have traversed the cycle once -- a weak dollar in the 1970s and early 1980s (and the opposite in Japan and Europe) and then the strong dollar policy from 1985 on. The former is characterized by inflation. The latter by disinflation (we no longer have deflation -- not in any real sense). Now the roles have flip-flopped once again and it is not by any natural functioning of the market, but as an act of will by the central bankers. My conclusions were reinforced once again during the past week when Schroeder's call for a weaker euro was more or less rebuffed by Duisenberg and the ECB. This will play out in the forex markets in the weeks to come and I would be surprised if the euro and gold did not resume their upward trends.

I believe these are the early years of a long term trend in which the United States will resort to the inflation option and a weak currency (and the market are reacting accordingly) and Europe will to the way of the wealth building effect of a strong currency. (Japan will go its own way -- and let's hope not toward a catastrophe. ) Each side of the equation presents advantages and disadvantages. Mr. Schroder might take note that the United States economy did very well during the wealth building part of the cycle. (I would attempt offering Robert Rubin the finance minister position.) Germany with some more or less moderate adjustments would probably do just as well. On the other side of the Atlantic, the potential effect on the price of gold in dollar terms might best be understood by a study of the gold market in the 1970s

Just as Mundell suggested to the European Union at the creation of the euro, as long as we have managed economies, gold will play an essential role both with the individual investor and the nation state as a reserve alternative. After all, the managed economy is managed by human beings and human beings are prone to error. When you take the implications of the scenario outlined above into consideration, there is no other viable protection -- at least one easily understood and applied. The Fed could fail. The ECB could fail. On either side of the equation. And that reality presents a clear and present danger to anyone with assets worth protecting.